Tuesday, March 24, 2009

Twitter and the Finance world

Below is a blog post from a M&A newsletter I subscribe to that talks about what potential role Twitter might play in finance in the (near?) future.  It seems that the author is conjecturing quite a bit here by predicting that Twitter might one day be of use in generating leads to deals.  It seems, however, given that the twitterer knows that all information posted is in public domain, and further that he's actually being "followed," I believe Twitter would have a limited role in finance as a place to gather thoughts on the latest thinking, but nothing more.

M&A Twitter

HEADLINE: Proprietary M&A Deal Found on Twitter
Okay, that’s not a real headline, but theoretically it could be in a couple years. For those who haven’t caught the Twitter bug, or don’t even know what I’m talking about, let me explain. 
Simply put, Twitter is a free social networking site (http://www.twitter.com) that allows people to share information within a 140-character limit – just the right amount for quick notes and text messages. Among the famous people and brands using Twitter are Martha Stewart, the New York Times, Ashton Kutcher and Shaquille O’Neal. I’ve had a Twitter account for a few weeks now (adamreinebach is my Twitter name), and save for a handful of trivial comments about ‘plans for sushi’ and ‘boy I hate standing in lines’, I’ve found it to be a valuable service. (FYI, I haven’t signed up for the text message app, because I’m too cheap, but that’s another reason for its popularity.) 
With Twitter expanding at breakneck speed – it’s gone from 2 million to 6 million users in the last year – I’ve gotten more and more questions about its relevance within the M&A market. Right now, the answer is probably limited. You can search on Twitter right now (http://search.twitter.com) for comments on M&A, the middle market, private equity, etc., and you’ll find some info, but nothing earth-shattering. Not surprisingly, small intermediaries are far more likely to tweet than, say, a managing partner at a mid-sized PE firm. 
But as Twitter grows, and as social networking in general becomes commonplace, there’s no reason to think mid-market M&A will be insulated from this trend. ACG and other organizations are incorporating these tools as a way to connect members, so it’s not surprising that a good number of the web hits we get at http://www.mergersunleashed.com?ET=mergersunleashed:e2182:221867a:&st=email come through social networking sites. At the very least, I would expect more firms operating within this space to use Twitter for promotional purposes, while others may use it as another way to keep abreast of relevant news. 
So, you ask, what’s the real upside of creating a Twitter account? 
For now, finding a proprietary deal on Twitter, Facebook or any other social network is highly unlikely. Twitter is littered with self-promoters (present company excluded), and the search function is not intuitive, so I can’t make a full-blown endorsement of the service. But if you remember what a social network is designed to do—making valuable connections—then Twitter passes the test for me. Just by spending a few weeks on Twitter I’ve ended up connecting with three people who may become business partners. Not a bad ROI for 10 minutes of Twitter per day. 

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Friday, March 06, 2009

Facebook and credit reports

People often say "be careful what you put up on Facebook, your future employer could see it." The conventional wisdom is that pictures with you and your friends drunk at a bar will surely come back to haunt you.

While it's true that the internet turns us all into minor public personalities, with corresponding PR concerns, I think these fears overreach in the wrong direction. When I first started my blog in 2001, it appeared to be a hopelessly self-centered, narcissitic sort of enterprise. But over the years my blog readership grew and people came to familiarize themselves with my style, and blogs in general became more common. I once left a job and then was rehired years later to find that literally dozens of high-level people in the firm had continued reading my blog all those years, and therefore were happy to recommend my rehire with a big raise.

Along a similar vein, I view public identities like Facebook and LinkedIn and blogs a bit like credit reports. I don't really want people to know that I was late on my phone bill two years ago, but because creditors can learn that, plus all other bits of information about me, they trust me enough to give me, a complete stranger, thousands of dollars, sight unseen. In essence, the existence of bad information out there, as long as it's considered comprehensive, *increases* trust in society. And trust greases the wheels of commerce like nothing else.

These days before I go on an interview or look at a company, the first thing I do is check out their profiles on Linkedin and do a basic google search. If I find nothing, I'm immediately suspicious. Who are these people that have no internet footprint?

And if I was hiring someone younger than me and didn't find embarassing photos of them drunk at a party somewhere, I'd conclude one of three things: 1) they're boring and have no friends, 2) they're abnormally secretive and perhaps have been covering their tracks or 3) they don't experiment with modern internet services. All three conclusions are bad.

Thus, in my opinion, we should err on the side of more self-disclosure, not less.

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Narrow casting and democracy

One of the interesting evolutions in modern media is the personalized news page. I can build a page full of RSS feeds of bloomberg markets news, WSJ editorials, tech news from alleyinsider, and world news from the BBC, all in one place. I can tune and tweak my information stream to contain nearly exactly what I want, and nothing more.

What's the problem? Confirmation bias. People like to read news and perspectives that confirm their view of the world. Rush Limbaugh fans get agitated listening to left-leaning radio and vice versa. And news media is increasingly inclined to inject perspective rather than strive for objective neutrality. Fox news springs to mind as an example.

Since civic life in a democracy depends on a certain amount of common ground, this narrowcasting is dangerous. We can now use personalization to effectively tune-out perspectives with which we disagree. Indeed, we may create such isolated media bubbles for ourselves that we might not even be aware of the areas of disagreement. Such an information consumption distortion is going to harm political discourse, because people won't be able to see two side of the issues anymore. They may not even agree what the issues are in the first place.

Therefore I think it's important that at least some part of our information diet is determined not through personalization or algorithmic prediction or whatever. I think there's still a strong place for the Tom Brokaw's of the world to pick the major issues of the day, and give a balanced perspective on those issues. And everyone's info diet should at least include that feed.

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API's and the information supply chain

A speaker at the BRITE media conference this week unveiled his new consumer media product: a database of 30-second movie clips. Effectively he had rights to distribute any Hollywood movie ever made, in no more than 30-second chunks. "What should my business model be?" he asked the crowd. Some people offered video e-cards, others offered up video avatars, others thought he should get into the ad-supported UGC mashups business.

After several minutes, he said "great - I can be in all these businesses". His plan: let other businesses figure out the consumer-facing use of his product. He intended to monetize the database via API's and B2B licensing fees. Hallmark can be in the greeting card business. MySpace can make the avatars. Blip.tv can do the mashups. He'll expose the database via API's, and a constellation of downstream businesses will repackage the content in whatever way they can think of.

This information-middleware concept is the right kind of thinking. I've seen too many startups take one small competitive advantage (e.g., user interface design or a strategic partnership with big company X) and try to build a whole vertically integrated consumer product out of it.

In the new web 3.0 world of API's and mashups, companies won't need to build soup-to-nuts solutions anymore. Information supply chains will elongate, and many more players will add little bits to the final product via API's, and lots and lots of XML and database calls will be exchanged behind the scenes.

It's a better way to build information products, and will ultimately drive lots of cost out of the ecosystem as a whole.

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Wednesday, March 04, 2009

Tweeter on FT

Tweeter was featured in an article in the Financial Times earlier this week.  Unsurprisingly, the question of how to monetize the service is still unanswered, even by IVP, the VC firm that pumped $35MM into the company last month:

"Then there is the issue of making money. The $35m investment was a "leap of faith", admits Mr Fenton. Biz Stone, co-founder, says Twitter will never charge a fee for its basic service, though it has considered charging business users for extra functions.

If Twitter succeeds in attracting a mass audience, there will be "all sorts of revenue opportunities", claims Mr Chaffee. But for now, with plenty of cash in the bank, it can afford to build its audience for "years" before worrying about how to make money, he says."

See full article:

Sweet to tweet 

By Richard Waters, Chris Nuttall and David Gelles 

Twitter To say anything compelling in so brief a format is hard when up against millions of other pithy utterances. Will this online fad make money? [=140 characters]. Richard Waters evaluates the prospects Wired life

At first glance, Twitter has all the hallmarks of an internet fad. The microblogging serv ice, which limits posts to 140 characters, has become a favourite of celebrities and the restless digerati who always seem to be "discovering" some hot new thing. Britney does it and so does Lance. Barack, of course, has been at it for ages.

It comes with its own quirky language. Messages are known as tweets and people who read your messages are called "followers". Then there are the particular Twitter culture and modes of behaviour: sociability is enhanced by "retweeting" messages you find particularly illuminating - rebroadcasting them to your own followers. Among hardcore users, gratuitous selfpromotion is frowned on.

Yet there is more to this new internet fashion than meets the eye. For in its deceptively simple way, Twitter has stumbled on a formula that a whole generation of recent web start-ups has been searching for: a way for people to connect with friends, express themselves and find information that stands a chance of one day becoming as popular as other mass online trends such as blogging and social networking.

Twitter itself - a service run by a tiny Silicon Valley company with only 29 employees - has yet to prove that it has true mass-market appeal, or that it can find a way to make money from the idea. But even if it falls short, the new forms of behaviour that are developing around it point to an entirely new area of online interaction that others will rush to exploit.

"As the media changes and expands, the way we respond to it has to expand," says Peter Norvig, director of research at Google. Early ways of interacting over the internet are already evolving into new forms, he adds: for instance, among younger people, e-mail has largely given way to communication based on a mixture of texting, instant messaging and posting messages on social networks.

In this online world where communication, self-expression and media consumption are constantly mutating into new forms, Mr Norvig says that Twitter looks like more than just a passing fad, even if the longer-term picture is still hard to discern.

Twitter users post short messages, either from a personal computer or mobile phone. These are usually made public, though they can be restricted to selected people. Anyone who wants to track a Twitterer's public "tweets" can choose to become a "follower": the "stream" of messages is then mixed in with streams from all the other people that are being followed, whether just a small number of friends or a large group made up of celebrities, politicians and others who have rushed to get a voice in this new domain.

Launched three years ago, Twitter first won an enthusiastic following among technophiles. Celebrities and other public figures later latched on to it and, since late last year, it has shown signs of gaining a much wider following. According to the Pew Internet and American Life project, a research grouping, 11 per cent of US internet users say they are broadcasting short updates about their actions, moods or thoughts, though much of this may be taking place on an existing network such as Facebook.

The growing interest explains why Silicon Valley's financiers sense that this could be the next big thing on the internet and have been clamouring to invest in the company, even though it has no revenues or much of an idea yet about how it will make them in future.

"I think people aren't aware of how big these new media properties can get, and how quickly," says Todd Chaffee, a partner at IVP, a venture capital company that took part in a $35m (£24m, €27m) financing for Twitter last week. Pointing to the global audiences built by YouTube and Facebook, he adds: "These are massive media properties and Twitter is headed in that direction. There's a viral network effect that's giving explosive organic growth."

Could a trendy little short-message service really be the next YouTube or Facebook? After all, despite the passionate enthusiasm of its users, Twitter almost from the outset came to symbolise a wave of so-called Web 2.0 internet services that have expanded the sociability of the internet but made precious little money.

Yet plenty of heavyweight thinkers caution against dismissing the idea out of hand. John Seely Brown, a former head of Xerox's renowned Silicon Valley research laboratories and co-author of The Social Life of Information , an influential book that predated this decade's explosion of online social media, argues that Twitter has added a new and useful element to online behaviour. The blizzard of short messages on the service "extends peripheral awareness", he says, with the nuggets of observation and information flying by creating a richer "context" for online life. They also lubricate a broader range of social interactions: "It gives you an awareness of what's around you. It's easy to take up and have a one-minute conversation with the community I'm following on Twitter."

The Twitter phenomenon has much to do with the fundamental simplicity of the idea. Operating at the juncture of blogging, texting and social networking, the service defies easy categorisation. "Because it's undergoing such rapid evolution, it's hard to slap a label on it," says Peter Fenton, a partner at Benchmark Capital, who has just joined Twitter's board. "We haven't hit on a simple tagline or description yet."

Its elements - including the real-time nature of the comment flow, the fact that tweets are searchable and followers choose which streams they receive - have combined to create something that scratches an itch most internet users did not even know they had. As it has grown, a network effect has also kicked in. "The more users, the more valuable it is - there's a compounding effect," says Mr Fenton.

One early technological decision made for the service is starting to look smart. Twitter's founders created a way for other developers to write internet applications that ride on top of Twitter - leading, for instance, to independent search services and organisational tools that draw on data from Twitter.

As similar approaches at Facebook and Apple's iPhone have shown, opening up like this can turn a technology into a platform on which innovation takes place, in turn attracting more users. It is only in the hands of users that services such as this come alive or fall by the wayside. "It's more a triumph of humanity than a triumph of technology," says Mr Fenton.

Tony Hsieh, boss of Zappos, an internet shoe retailer, displays the enthusiasm of the new Twitter faithful - he confesses to checking tweets on his BlackBerry Pearl while "waiting in line, or at a red light, or if I'm walking". In the two years since he became hooked on the service, he says, the way it is used has "evolved quite a bit".

At first it was about building a network among like-minded, tech-savvy people, though it has become "more about relationship building" as user numbers have grown. With many posting links to things they have read or seen, it has also turned into a media sharing service. Says Mr Hsieh: "I generally get all my news through Twitter."

Not surprisingly, businesses have also been exploring ways of tapping into such a rapidly growing network. The fact that users choose which messages they want to receive could open the way to a new form of "opt-in" marketing. "Twitter is symbolic of focused content that matters, when you want it," says Bob Pearson, head of communities and conversation at Dell. The computer maker, for instance, issues a stream of tweets about new discounts on its products, to which anyone can subscribe.

Beyond the social or business connections it lubricates, Twitter's blizzard of short messages has created a new way to catch the mood of the virtual world - and one that works in real time. That, says Mr Norvig at Google, may be its most intriguing addition to today's internet: "The expectation when you come to Google is that you search for things that happened before, not what's happening now."

On Twitter, the aggregated voices of millions can be heard in unison. "It's like saying, 'Hey, we're experiencing this together'," says Mr Norvig. "That fact that I said I was at [President Obama's] inauguration nobody cares [about] - but if 1m people say they are there, it be-comes interesting."

This has turned big global news events into a new form of shared experience. Traffic on the website jumped during the inauguration as users who were there, or watching it on television, turned to the service to talk about their feelings - a contrast with Google and Facebook, which saw dips in traffic during the event. As last year's siege of Mumbai played out, a flow of eyewitness accounts turned Twitter into both a source of news and a place for people to respond immediately to it.

"You get this picture of what's happening really quickly," says Frank Eliason, director of digital care at Comcast, the US cable television company. "On Facebook you can search groups, but you can't search what people are doing or saying."

None of this, of course, guarantees that Twitter is here to stay - or even that other "microblogging" services like it will succeed in connecting with a mass audience in the way that social networking has done. Information overload, or simple resistance to the new, could stunt its growth. Barriers to entry on the internet are low - as Twitter itself has proved - and the Darwinian struggle among social media services is intense. Something else will no doubt emerge to claim the increasingly stretched attention of the Twitterers.

Then there is the issue of making money. The $35m investment was a "leap of faith", admits Mr Fenton. Biz Stone, co-founder, says Twitter will never charge a fee for its basic service, though it has considered charging business users for extra functions.

If Twitter succeeds in attracting a mass audience, there will be "all sorts of revenue opportunities", claims Mr Chaffee. But for now, with plenty of cash in the bank, it can afford to build its audience for "years" before worrying about how to make money, he says.

This "build it and they will come" approach has produced many of the biggest names on the internet. It was the strategy behind household names such as YouTube and Skype as well as Google itself. Twitter still has a long way to go to join that club but, among the many consumer internet services that are struggling for attention, it has a better chance than most.


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Tuesday, March 03, 2009

Virtual Reality or Architecture?

We discussed many topics in class tonight, one of them being virtual reality. I came across an article regarding Sony commissioning architect Kenji Ikemoto to create a virtual world, for the Sony PS3 console called Home. This design contract is specifically interesting because Sony hired an architect rather than a traditional computer programmer for the job when its early release sales did not meet expectations.  ‘While Home hasn’t caught on with gamers yet, with most of the early reviews being mixed or critical calling the environment 'nothing more than chic apartments, a mall, a bowling alley and a movie theatre', it nonetheless represents a milestone for the gaming industry and an interesting experiment in community design.’ http://www.worldarchitecturenews.com/index.php?fuseaction=wanappln.projectview&upload_id=11007   


Articles on the related topic can be found at the links below:

http://www.businessweek.com/globalbiz/content/jan2009/gb20090123_837565.htm?chan=innovation_game+room_top+stories

http://www.worldarchitecturenews.com/index.php?fuseaction=wanappln.projectview&upload_id=11007

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Monday, March 02, 2009

Youtube Out at Whitehouse.gov

In a move aimed at appeasing privacy advocacy groups, the Obama team has switched video serving services from Youtube to Akamai.  The concern raised by advocacy groups relates to the use of cookies served by Youtube to every visitor of Whitehouse.gov.  In response, Whitehouse.gov has decided to switch video serving and will now use Akamai.  According to PaidContent.org:

 

The main problem was that YouTube served long-term tracking cookies to every visitor to the president’s blog, even if they didn’t click “play” to watch the video; with Akamai there are no concerns about YouTube or parent company Google tracking visitors’ movements, since the videos are coming from the White House’s own servers now.

 

What fascinates me about this move is less the technicalities of Akamai vs. Youtube privacy considerations, and more the mere fact that government is evolving in front of our eyes through use of technology.  Weekly video chats, tweeting, direct emailing – all of these methods more directly connect our people with our government.  Of course, we should expect much experimentation (and some inevitable mistakes) as new channels of connectivity are introduced.  

 

The implications of this technological evolution will be significant as we increasingly expect and demand transparency and responsiveness to our real-time needs.  I credit the new administration for a communication strategy that incorporates these new and exciting channels.

 

http://www.paidcontent.org/entry/419-obama-drops-youtube-for-akamai-on-whitehouse-gov/


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Hulu Traffic Remains High Post-Super Bowl

In the rough and tumble uber competitive world of digital media, it is interesting and exciting to read success stories.  Far be it for me to call Hulu a smashing economic success, but it has clearly generated what appears to be sustainable buzz around its video distribution platform. 

 

In a rather unusual move for digital media properties, Hulu aired a major television ad during the Super Bowl.  Early indications suggest the expensive gamble has paid off.  As reported on Silicon Alley Insider (http://www.businessinsider.com/hulu-traffic-still-up-big-after-super-bowl-spike-2009-3), traffic initially spiked the day after the big game from 8mm average users to 18 million users.  While the buzz has settled somewhat, Hulu now averages somewhere between 11-13 million users/day.  This represents a substantial 1/3rd increase in usage since prior to the Super Bowl.

 

Two interesting observations regarding Hulu’s recent success:

 

First, Hulu seems to be gaining mainstream adoption.  As a digital media video platform service, this is quite impressive given the intense competition for time- and mind-share.  The story of Hulu, however, is unique given its focus on high-end quality premium content.  It is clear that in an online world filled with massive amounts of user generated content, there is still a solid place for premium product.

 

Second, Hulu’s foray into the world of tradition television advertising is fascinating.  While many digital media sources relay on viral or web-based promotion, Hulu stepped out of its home forum to reach a large audience during the Super Bowl.  While much of Hulu’s mainstream Super Bowl ad success may be attributed to the mainstream nature of the content Hulu distributes, it also might signal a changing strategy amongst other digital media services as they attempt to expand audiences using traditional means.  


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Gaming Consoles as the Central Control Point of the House

I was looking into buying a blu-ray dvd player this last weekend when a friend suggested that I just purchase an X-box. They said that not only would it play blu-rays, it would play games and would also cost less than the average blu-ray dvd player. I did some research and the other interesting aspect is that the X-box is also already connected to the internet. One of the discussion points surround the dvd players was whether or not they had a connection point to the internet that allowed them to function as a central control point to download movies, update software, download music, etc. It seemed like the discussion focused around a larger philosophical point - how are all of the devices in the house connected and controlled and how does the house communicate digitally with the outside world. In a sense, what is the next generations operating system look like? It would seem that Microsoft has positioned themselves well to compete in that market by placing a device in the middle of a house's device ecosystem that is also connected to the outside world. It will be interesting to see how this race evolves over the next couple years.

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Will books go the way of digital music

Kindle... I keep hearing about kindle. If kindle gets mainstream adoption the way that digital music has, what will be the implications on the publishing industry? The music industry completely mishandled the transformation of music IP to the digital medium. By fighting it, they missed the opportunity to help shape it and thus profit from it. I realize that the overall revenues for music have decreased, but that is something that could not be stopped as new technology left value for the creation and distribution of the physical medium minimal. While I do not believe that consumers will brace digital books with the same enthusiasm as people like the experience of holding a paper book, it would seem that a transition to digital books at some level is inevitable. In that case, it would seem that the major publishing companies should be embracing products such as kindle and using the music companies as an example of what not to do.

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Web 3.0

I was speaking with Leland Putterman about the state of the VC market and the expected returns from today's start-up companies. Leland made a very interesting comment about his vision of Web 3.0. This got me thinking - what will be the basic concepts and value propositions of the next generation of the web. In our class Marketing and the Internet, we have talked at length about the value propositions of Web 2.0 - continuous improvement, long tail, network effect, customer self service, collective intelligence, innovation in assembly. Leland's thesis is that Web 3.0 will all be focused around process redesign. That is, leveraging cloud computing, the continuing interoperability and the functionality of web 2.0 to rearchitect basic business process. This is an intriguing concept. As I thought about one example, Seamlessweb and their ability to integrate a web 2.0 service offering with expense management to reengineer a corporations finance operations, a number of other possibilities came to my mind - one of which might even be worth exploring.

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A Good Web 2.0 Job Site

The recent economic downturn has certainly weighed heavily on harried online job seekers. Luckily, new Web 2.0 job tools are making it easier for employees and hiring companies to find each other. A recent article on MSNBC hailed the benefits of comanies such as Jobs2Web: http://www.msnbc.msn.com/id/29463590/ which are taking a new tack to adress the new ways that employees are searching for job opportunities.

Before the advent of LinkedIn and Facebook, the internet job search process was by and large limited to job postings and user resume submissions. This tends to be a cumbersome process, overwhelming a company with a huge pile of innapropriate applicants. It can be extremely difficult to separate the wheat from the chaff! Companies like Jobs2Web take on a comprehenive Web 2.0 approach, relying on social networks to target and match candidates who have specific skills necessary for the job in question.

In my opinion better targeting of job candidates through Web 2.0 technology will be better for everyone involved. No longer will you send your resume inot the "black hole" of a site like Monster.com with the near certainty of never hearing a response. Hopefully the job search process will continue to evolve to become a much fiendlier, faster and direct experience that saves time for everyon invovolved. Companies like Jobs2Web will help us get there ....on the net.... http://www.jobs2web.com

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CalendarFly - A new social networking company

I met Drew Aldrich for lunch last week to discuss his new social networking company - CalendarFly. His premise is that he can offer both a scheduling/calendaring/workflow functionality and combine it with the traditional social networking functionality and market it to schools. He thinks that there are a couple of businesses in this market but that they are all much too expensive and that public schools will not be able to afford an offering such as this, especially in this economy. He hopes that he can offer both better functionality as he is creating this tool using better technology (instead of 5 years ago when the competitors architected their solutions) as well as take advantage of an advertising based revenue model to offer it to the schools for free. It is a very interesting concept and opportunity if his underlying competitive research is correct. My concern with business model is that it would seem that a facebook affiliate will create the functionality and then dominate the market. Drew's thought is that schools are so concerned about facebook, that they would support an independent 3rd party. He is going live with a POC school system next month and it will be interesting to see if it gets momentum.

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Paid bloggers

Paid blogger Programs
A new study published by adweek shows that blogging and user generated content created by paid conversations is cost effective and a successful way for brands to generate WOM. Certain brands such as Kmart are starting to experiment with this space and WOM marketing effort.
Many brands are compensating bloggers or reaching agreements with them and providing perks (such as flying them to tech conferences, etc) so that they will blog about their products or services. While compensation to bloggers should be made public, this is a low cost initiative compared to media buys and allows the brand to tap into the network and following of the blogger. This type of effort is categorized as something between PR outreach and advertising. This type of tactic makes sense for brands that need some help creating buzz when it initially wouldn’t and have a larger reach as well.
This does present ethical issues, where the consumers might start becoming suspicious of brands that use this type of marketing tactic. Also, if brands are later found not to have disclosed a paid conversation relationship, this could affect how the brand and blogger are viewed. A concern about authenticity and the level of honesty a blogger can have with such a relationship because the fear of a blogger is that if they write something negative, they will not be asked back to blog.



http://www.adweek.com/aw/content_display/news/digital/e3i9b282d63be07572ababcf16dfcb82fab

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The long tail and the New York Times?

Today, The Wall Street Journal reported (, the New York Times is moving hyperlocal! The Times is experimenting with citizen journalism, and constructing a web of sites for various communities in New York and New Jersey called "The Local."  Beginning today, they will cover Fort Green and Clinton Hill, Brooklyn, as well as Maplewood, South Orange, and Millburn, NJ.  With "The Local," The Times is creating a platform for user generated content.  Costs for content will be minimal, and they are seeking to find smaller, local businesses as advertisers.  This is an interesting, and powerful, move by the Times, but it is not without precedent.  The Washington Post tried do something similar in 2007 but did not meet much success.  I'm all for the New York Times staying alive, so let's hope that the Long Tail throws them a bone! 
   


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Strange MP3 players taking over?

If you can't beat the i-Pod, mind as well go whacky right? Check out some of these interesting new designs for MP3 players: http://reviews.cnet.com/2300-6490_7-10000346.html?tag=centerColumnArea1.1 They are definitely different!!! The Baylis player features a handcrank to generate power, very eco-friendly indeed...another, the "Chumby" looks like a Nerf football on steroids. The "Dolphin" player is great for underwater adventures.

While some of these designs are whackier than others and may appeal to niche buyers, I am left wondering why no other large companies have been able to figure out an MP3 player that can seriosuly compete with the i-Pod. Microsoft's Zune player started out with such promise, but the company recently revealed that Zune sales were down a whopping 54% http://www.rollingstone.com/rockdaily/index.php/2009/01/27/zune-sales-down-54-percent-will-microsoft-fight-to-save-its-digital-music-player/ Too bad!

It can't be that hard, right? Step 1 Design an easy-to-use device that is user-friendly and good looking. Step 2. Build a a rich content dowload site. Step 3. Spend a ton on marketing the thing.
Maybe I'm oversimplifying things a bit too much...

What I think Microsoft and the other secondary MP3 players are truly missing is some sort of brand "soul"....a core message about their product that will make an emotional connection with customers. For Micrsosft's sake, I hope they do some serious soul searching soon.

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Dew Crew Advocacy Program

Dew Crew Advocacy Program

Mountain Dew has created a very successful advocacy program and has rolled it out on various college campuses across the US. Their advocacy program consists of a screening process to identify brand advocates, then allowing them to become brand spokes people in their community, manage and launch their individual marketing programs for the brand.
This allows companies to find motivated influential and passionate individuals, and have them reach out locally to influential members of the community through online and offline means, where they can recommend the brand as well as create a local community and meaning for the brad. The Dew Crew now become a co-creator of the brand as they bring their own meaning, identity and vision to it locally and through their network, and they get rewarded for their passion.
The portal holds a variety of tools, assets, widgets, and marketing collateral, all downloadable or forward-able, to allow the Dew Crew to create their own marketing campaigns for the Mountain Dew brand. Individuals on this portal have competitions with each other, create best practices, blog, upload pictures of events and become even more committed to Mountain Dew and to spreading the word. Companies should think about the value of tapping into this advocacy model to allow for passionate consumers to recommend the brand, empower them with the tools to successfully do so and reward them for their loyalty and passion. This form of engagement has proven very successful for Mountain Dew, has created very loyal users and allowed for efficient acquisition of new consumers all by allowing selected users to have access to marketing tools online to develop their own brand campaigns.

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When will there be an new i-Phone?

I was surprised at the last Macworld event when Apple did not announce a new version of the i-Phone. To me that was very un-Apple like, beacuase I have always thought of the brand as reinventing itself with new products every few months. Maybe the rumors are all coming true and Steve Jobs' recent leave of absence has put a damper on new product releases? I hope not.

Some people have recently speculated that Apple will launch an i-Phone "nano" http://www.cnet.com/8301-17918_1-10160905-85.html?tag=centerColumnArea1.2
but in my opinion, going smaller would not do much for the product. The i-Phone is already slim, manageable and feels nice in your hand. What they could do to improve the phone is continue improving the network speed for video and content download, as well as look to other creative ways of using the device - such as video recording or a credit card speed pass, much like in Japan. Speaking to fellow i-Phone junkies though, many seem relieved that no new i-Phone has been launched. For once it feels nice that the device they just bought isn't already outdated.

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Banana republic insider program

In an age where users and consumers want to be co-creators, Banana Republic has developed a very interesting program to incorporate market research along with engagement and rewards tactics for a select group of loyal individuals. Certain individuals holding the Banana Republic credit card, who’s spend can therefore be tracked, are regularly sent surveys and asked to contribute to branding, creative concepts for new campaigns as well as respond to existing campaigns meant for the brand to understand how this is received by their loyal customer based. This allows them to take the feedback and create relevant campaigns. At the same time, the customer feels a special link to the brand, since they are being asked for input and allowed to give feedback on the brand. These individuals are also allowed at time to see creative before it is printed and consumed by the general public. This is a great way to engage loyal customers and using a group of individuals who have a credit card, where purchases can be tracked and this effort’s success and revenue generating power measured.

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Tremor.com

P&G has recently created an amazing new online tool called Tremor. Tremor is an online vehicle for word of mouth marketing. They have a registration only database of 200K teenagers, 350K moms. Their screening process to identify connectors and moms is based on a set of questions asked when registering and a sophisticated algorithm. Connectors are individuals who have a much larger network than average (5 to 6 times). Connectors also are seen as individuals who are influential and talk about their experiences. Tapping into these connectors can be very beneficial to brands, especially those targeting the teen market, who mainly rely on peer-to-peer recommendations and WOM. This is a good way for companies to communicate a brand message or new product. This is a wonderful source of information for market research as well.

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http://www.adweek.com/aw/content_display/news/agency/e3i9f631ea10a4997bc68b6e958b04c9b69

A recent article in Adweek highlights the importance of loyalty programs and the need for brands to deliver on their programs and keep their customers engaged. Loyalty building programs have been found to create significant word of mouth. In a period when consumers are suspicious of advertising and peer-to-peer has become a preferred way of getting recommendations, this would signify a very important strategic opportunity for manufacturers and service providers. A study of MyCokeRewards and BestBuyRewardZone found that 70% of individuals engaged in the rewards program were likely to recommend the brand to others.
Participating in a reward program can allow consumers to feel ownership of the brand. A study on word of mouth and reward programs found that 55% of members consider themselves brand champions.
Understanding this is a tremendous opportunity for manufacturers who can use the rewards programs not only as a retention tool, but an acquisition vehicle as well. With this kind of information, couple with testing the effects of growth from peer-to-peer recommendations can now create a lifetime value rewards members with a very different ROI.

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Microsoft to Start Testing Kumo

Microsoft plans later this week to begin internal testing of Kumo, a long-anticipated update to its Live Search product. Ultimately, Kumo is designed to be both a rebranding and an update for Live Search, although at this point Microsoft is describing it as "an internal test environment".

Word that Microsoft was close to launching the new search tool began with a Twitter posting by Barney Pell, who serves as a "search strategist and evangelist" for Microsoft.  In the posting, Pell did not mention the Kumo name, but said that the site was getting an updated user interface and new brand.

For more on this story read below:

http://news.cnet.com/8301-13860_3-10185515-56.html?tag=newsLatestHeadlinesArea.0

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The White House dumps YouTube

Responding to complaints by privacy activists, the White House has quietly abandoned YouTube as the provider of the embedded videos on the president's official home page.

With the release of the latest weekly video address, the White House has shifted to a Flash-based video solution using Akamai's content delivery network. 

The White House's decision to move away from the Google-owned video sharing site will likely be met with praise by privacy activists and could mark the beginning of a real backlash in response to Google's thirst for detailed data on the browsing habits of Web surfers.

For more on this story, see below:

http://news.cnet.com/8301-13739_3-10184578-46.html?tag=newsLeadStoriesArea.1

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Will the iPhone do everything?

Check out this really cool video on the Iphone Directed by The Purchase Brothers.


http://www.youtube.com/watch?v=hTJxa1vzckE&eurl=http://asia.cnet.com/crave/2009/02/20/will-the-iphone-do-everything-by-2013-/&feature=player_embedded


"Originally titled the "iPod Everything", it was to feature a music player, phone, internet, GoogleMaps, touch screen, numerous applications, and a seemingly infinite number of other features. Then the iPhone was announced. After a little adjusting the iPhone Everything is here".

"The video concept revolves around the myriad features the iPhone has and how someday it will basically be able to do everything under the sun. Of course, the spoof takes things to the extreme, but it got us thinking, what will the iPhone really be able to do in the future--let's say four years from now, in the year 2013? "

Named Time magazine's "Invention of the Year" in 2007 the iphone definitely makes people have something to talk about all the time. With the last 3G iphone launched on July 11, 2008, users are starting to talk about when the new iphone will be launched and what new features it will have.

For those addicted or real fans of Apple Products check out the Ad for the iP Product.
http://www.aboyandhiscomputer.com/show.php?ItemID=2204





Source:Will the iPhone do everything by 2013? By David Carnoy

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Cloud Computing the new dotcom...

"The cloud is the new dotcom". This quote from George Zachary, VC at Charles River Ventures partner summarizes this "next catch-all" category. Companies like Facebook, Google, Amazon, Microsoft and Salesforce are competing to become the platform of choice for people to develop web apps on. Through the hundreds of applications and startups created, all data is slowly shifting from the personal pc to the cloud. Without these platform, applications like flixwagon would be much more difficult to build.
The CEO of Salesforce, a CRM software company that was in the forefront of the cloud-based services says: "we are on the threshold of fundamentally a new paradigm of computing". He continues to say that cloud computing is both defined as a "software-as-a-service" (or SaaS) and as a "platform-as-a-service".
The power of the cloud is to let users access their data from any device, anywhere and at anytime.

Check an interesting video on: http://www.techcrunch.com/2009/03/01/the-cloud-is-the-new-dotcom-video-highlights/

Ido Shamgar

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Links conned, trusted networks targeted

Malware hackers are present where the masses collect: Google, Facebook and Twitter.


"McAfee researcher Craig Schumagar points to the recent Gmail outage as an example. When that happened, many were searching for the cause or solution to the problem, and Schumagar shows how a malicious link copying verbatim the top news source text as a snippet, shows up fourth in the search rankings, following highly recognizable and trusted sources like Google News, Digg.com, and Mashable".

A later research found that this domain was linked to other trendy topics: Sharon Stone at the Oscars, Extreme Makeover foreclosure, Nicky Hilton, IHOP all you can eat pancakes promotion.

In trying to reach more e-mail inboxes, spammers are taking advantage of users by masking links typically ousted by filters by using Google search links to the target site instead of the URL itself. Facebook has issues as well because the company doesn’t verify or approve third party applications. When allowing these applications friends are spammed with a “Error Check System” message, and searching the phrase leads them to similar scareware index-related peril. Twitterers are also affected by having dangerous sites submitted by people they follow. Scammers are using scripts to follow those who follow them automatically to build up their follow lists. In addition, Twitter doesn’t verify email addresses, making it easy for spammers to sign up.

Targeting trusted social networks and social applications by hackers may have two purposes.
  1. Abuse the trust users themselves place in them.
  2. Taking advantage of Search Engine Optimization. Scammers are likely arriving there by taking advantage of trusted sites to gain “trusted” links, largely upon which Google bases its results.

It really makes me feel vulnerable specially since I use all the online services mentioned and I really do trust their sites. Its time for them to get more aggressive in protecting their users. Its worrisome to think that scammers could replace good SEO.

Source: Google Trends, SEO Create Hacker Perfect Storm. By Jason Lee Miller.


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Boxee: the TV revolution is underway

The Columbia Media Conference happened last Friday. Panelists talked about the way media and especially TV is recreating itself. Eminent VCs and media business folks were talking about the emergence of new platforms that will unleash developer's creativity and give way to a whole new world of TV consumption and entertainment. The hottest company around is called Boxee.tv. It is a media entertainment open platform. Users can watch TV or listen to music from different sources on the same platform. Boxee's API is available to the open source community, to develop original applications on top of it, like Facebook.
I have recently heard Boxee's CEO giving a fascinating example of the type of applications that are created on Boxee. A developer has released an application that allows users to link their Last.fm customized radio to music videos on YouTube. As soon as a song on last.fm is playing, the application looks at its corresponding music video and shows it on Boxee. Hence, people have a kind of MTV channel customized to their current mood.

This is only the beginning of a new world where the TV content and distribution will be free of the major cable companies and channel networks control, and that's great news.

Ido Shamgar

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IPhone dominance over the mobile web

A research firm has found that the IPhone has 66.61% of mobile traffic, while its competitors have just gained a foothold. The traffic has been measured across tens of thousands of websites.
Its competitors have yet not managed to get more than 7% of the traffic.
Its next competitor, Windows mobile, had only 6.91% of traffic, Google Android and Symbian have captured 6.15%. The Palm OS was used at 2.37%. The Blackberry was only used at 2.24%.



We have to take into account that the Android was not available before october, and managed to capture in a few months a market share that took Symbian years to acquire. This performance is great news for Apple. The usability of the MAC OS used on Iphones and the Safari web browser have played a significant role in the success.

For more information: http://www.appleinsider.com/articles/09/03/01/apple_iphone_controls_over_66_of_all_mobile_web_use.html

Ido Shamgar

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UK broadcaster may have to sell its version of Facebook

Friends Reunited launched in 2000--three years before MySpace, four years before Facebook, and five years before Bebo--and is now in trouble and struggling behind its more dynamic competitors

"Valuing a business as lightly spun as a "social network" requires bankers to perform marvels of prestidigitation. Yet, that is the feat facing ITV, the struggling UK broadcaster, as it considers a sale of Friends Reunited. ITV bought the website, which helps former schoolmates reconnect, for 175 million pounds in 2005 in an attempt to boost its online presence. Now ITV may wave goodbye to Friends."

More on the article here from the Financial Times:

http://www.ft.com/cms/s/2/2ad8a68a-fd9e-11dd-932e-000077b07658.html

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Amazon backs off text-to-speech feature in Kindle

Amazon announced recently that it will let publishers decided whether they want the new Kindle e-book device to read their books aloud.

The text-to-speech feature that allows Kindle users to have books read to them in a male or female voice.  The president of the Authors Guild, Roy Blount Jr., recently contributed and essay to the editorial page of the New York Times laying out the guild's objections to the feature, which he said undermined the market for the professional audio books that are sold separately.

More on the article here:

http://bits.blogs.nytimes/2009/02/27/amazon-backs-off-text-to-speech-feature-in-kindle/

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Twitter Eyes Search as Means to Monetize

This morning's Advertising Age refers to Twitter's business plans.

"When twitter closed on a $35 million round of venture capital, in addition to the $20 million it had already raised, the messaging service signaled that it intends to be a very big business.
Like its 6 million users, corporations have embraced the service. Its ability to take the measure of what is being said at a given time about brands is a potential gold mine for marketers, and it is the first place Twitter will look to generate revenue.

"There are companies and brands depending on it more and more and finding the insights valuable in how they make decisions," said co-founder Biz Stone. "What further can we do to help them?"

But selling services to corporate America isn't the kind of Google-scale business Twitter's founders and backers are banking on. What is? Well, maybe search. Last summer, Twitter bought search engine Summize and has recently started integrating search into certain user accounts. Federated Media CEO John Battelle likens Twitter to YouTube, in that Google thought it was buying a video platform, but YouTube's real value may be that it has become the second-largest source of search queries. The difference is Twitter enables a search of real-time sentiment and conversation. "Twitter owns its own search, which is more valuable than Twitter itself," said Howard Lindzon, an entrepreneur who launched one of a proliferating ecosystem of Twitter-based businesses, StockTwits.

At this point, all ideas are still at a whiteboard stage. Twitter hired its first business-development exec in January, and Twitter's new funders -- Benchmark Capital and Institutional Venture Partners -- want Twitter to continue to focus on growth before revenue. "It is a big, emerging media property growing at a phenomenal rate," said IVP General Partner Todd Chaffee. "Frankly, I'm in no rush to resolve these issues."

One thing Twitter isn't pursuing is traditional advertising. "We're just not looking at it right now," Mr. Stone said, "not just because we don't know how it would be received, but it would require a team we just don't have." In a sense, Twitter faces the Facebook problem in that it has created an ecosystem of Twitter-based businesses from which it does not profit, and marketers don't need to pay to use the service. Benchmark General Partner Peter Fenton said that's really not a problem. "The more applications built on top of Twitter, the more valuable Twitter is," he said.

Of all the ideas now under discussion, the one that seems a no-brainer to Twitter and its backers is the idea of "verified" accounts. That would allow users to pay to reserve a Twitter handle and certify that they are representing a corporation or an individual. "That is a great concept, because one of the challenges with social media is 'Who is real?'" said Frank Eliason, director-digital care at cable giant Comcast. Comcast has an entire team that interacts with Twitter, including Mr. Eliason, who tweets as @ComcastCares, but also staffers such as @ComcastBill, @ComcastGeorge and @ComcastBonnie. But there's nothing stopping anyone from registering their own "Comcast" handles, which is why Shaquille O'Neal tweets as @TheRealShaq.
Similarly, corporations could pay for their own secure, private Twitter to communicate with employees or fans of their brands.

The other idea that seems obvious to Twitter and its backers is offering paying customers real-time data on who is saying what about a brand. "What struck us is it gives you an immediate view into what people are thinking or saying about your brand right now," Mr. Fenton said. "There is any number of revenue models that could emerge from that."
Scott Monty, global digital communications manager for Ford Motor Co., said the automaker would be interested in, say, age and geographic overlays atop metrics. "It would be great to know who we are talking to on Twitter," he said.

When Ford brings the new Ford Fiesta from Europe to the U.S. next spring, it will pitch the car to millennials. Twitter's average age is well in Gen-X territory, and Mr. Monty said Ford would communicate differently with younger buyers in that demographic.
While Twitter professes to be in no hurry, the band is being beaten to market by others building marketing services around Twitter. One example is Philadelphia-based digital agency NetPlus Marketing, which has its own Twitter-management software, Platform T, that allows marketers to manage multiple accounts, a Twitter scanner and a scheduler that lets them send scheduled tweets. NetPlus doesn't charge for the service but requires users to apply for an account. "We are trying to make Twitter easier and more manageable for our clients," said Colton Perry, NetPlus senior VP-technology.

Search could be valuable for Twitter, or whoever ends up owning Twitter. Mr. Battelle argued that Google and Yahoo haven't added Twitter search because they don't want to make Twitter any more valuable than it already is. But the question is how to turn it into revenue without turning off users in the process.

Now that the funding is in the bank, Mr. Stone said Twitter's first order of business is to increase staff, probably to 60 in the coming year, and then start conversations with brands about the kinds of services they'd be willing to pay for. "We are growing like crazy and kind of shockingly low on employees," Mr. Stone said. "At the same time, there is so much work to do that it's scary."

http://adage.com/digital/article?article_id=134954

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Twittering Celebrities

This NY Times piece describes how celebrities are taking advantage of Twitter to connect directly with their fans.  From posting cell phone pictures during post-Oscar parties to alerting fans to where they will be, celebrities are embracing Twitter and its applications, and it seems to be getting them the attention they want. 

Twitter is a low maintenance way to keep fans interested and engaged, and helps celebrities project an image that they are comfortable with the newest technology trends.  It also allows them to control the information that they release to fans, which is obviously preferable to paparazzi shots and tabloid stories. 

It remains to be seen whether celebrity endorsement of Twitter will give it a broader appeal to the masses and help attract new users.  Will these high profile early adopters convince their "followers" to check out Twitter?  It's too early to tell, but the free publicity and buzz they are creating for Twitter  certainly can' t hurt .  

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Oslo aims to break down mobile social network barriers

Further to the BW article sent by Doug yesterday, I read an interesting article about a new, largely European-inspired, initiative that hope to address the problem of sharing your location between different platforms. The alliance, called OSLO (Open Sharing of Location-based Objects) includes many of the players in mobile social networking and location-based social software.

Twelve startups, all of whom serve their users with location-based services, have signed an agreement to enable their combined 30 million users to share location information and interact between networks.

OSLO has been in discussion with Google and Yahoo! about joining the alliance. Google of course recently launched it’s Latitude product, while Yahoo! has been working on FireEagle.

For the full article, click this link:

http://uk.techcrunch.com/2009/02/27/oslo-accord-pushes-location-sharing-between-social-networks/

G

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Kindle Student Edition rumored to be in the works

Having recently launched Kindle 2, Amazon are already facing speculators on what Kindle 3 will be like. According to TechCrunch, Prime View International, maker of electrophoretic displays AKA epaper makes the screens for Amazon's Kindle 2. However, rumors that they are working on a larger-sized touchscreen makes us think they are now ramping up production of the "student's Kindle" they talked about last year. This Kindle will have a larger screen and more research-oriented features - Wi-Fi, anyone?

See http://www.crunchgear.com/2009/02/27/students-kindle-coming-soon/ for more details.

G

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Wonder Woman, Wonder Woman - All the World's Waiting for You!!!

I can't wait for the Wonder Woman animated movie direct-to-video release this Tuesday, March 3rd. I've seen commercials for it on VH1 so I know it will be available on DVD and Blu-Ray, but there was no mention of video on demand or electronic sell through availability. I checked DC Comic's website but was really surprised that the company didn't take advantage of this release to cross-promote the comic book series or tell users where they can buy the movie. In fact, DC Comic's homepage was promoting Green Latern comics. I had to click on the Downloads and Podcasts link to see a banner ad for the movie. However, the banner ad leads to no where. Visit the Downloads and Podcast subpage again, and there's a link promoting a Nintendo DS game.

I checked Amazon.com and maybe, just maybe, the movie will also be available through the company's VOD service.

I'm really surprised by the lack of marketing sophistication on DC's part to promote such an iconic charactere. They really missed their chance not only to cross-promote the comic book, but to take advantage of motion comics and make a one shot story available on iTunes that could reach out to consumers who are not comic book fans. The Watchmen motion comics were a brilliant idea to re-purpose content with audio and video and expose the graphic novel to people who normally don't read comic books. In today's challenging environment and with IP that's so well positioned to take advantage of digital media, it's really a shame.

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Sunday, March 01, 2009

Price discrimination in e-commerce

There is a lot of talk recently about plummeting CPM rates online. More ad-targeting intelligence and more focused niche sites was supposed to be the CPM-boosting savior. But bloggers are "hanging up the pajamas" and advertising-revenue based startups are folding faster than ever.

What's next? I think that increasingly sophisticated ad-targeting is only part of the answer. Sure, US-based female cardiologists over 50 are a prized demo, and laser-focused ad networks targeting them might command $80 CPM's. But I think the real money is in pricing the final transaction: charging rich, impatient people 50% more than less affluent people with time on their hands. The kind of price discrimination we see in airline tickets, concert seats and clothing sample sales will emerge in increasingly sophisticated forms online.

So, with better and better ad-targeting, I might have one banner say "WSJ for students: only $45!!" and another say "WSJ for executives: only $85!!", and the difference in final sale price would justify huge CPM premiums for both segments. I know the price elasticity curve of a student is different than for an excutive, so I could algorithmically choose optimal prices for both groups, and thus higher profits for both groups.

Similarly, if my inventory data were dynamically fed into my online banner ads, I could generate promotions based on capacity. E.g., I could lower advertised prices if something isn't selling well and my inventories are too high. Or, I could detect surges in interest and dynamically raise prices in response. Essentially, banner ads could be used for price discovery, price-based promotions, and price-discrimination.

These sorts of pricing innovations are where the *real* money in online advertising is.

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X-as-a-Service

Here's an interesting article on SaaS vs. PaaS vs. IaaS. http://news.cnet.com/8301-19413_3-10140278-240.html

The general view is that the market for internet-enabled services is becoming segmented in a way similar to the seven-layer networking model. Software-as-a-Service is essentially user-facing, consumer-ready applications deployed on the internet. E.g., Salesforce.com is SaaS for customer relationship management. Platform-as-a-Service is a layer below that: something you'd use to build SaaS applications. Force.com is an example. Infrastructure-as-a-Service is yet another step closer to the metal: it's CPU's and storage and bandwidth. AWS (Amazon Web Services) is an example.

Each layer offers a different set of functionality to a different part of the value chain, and developers would stack layers on top of one another to deliver a finished product. This theme of increasing abstraction and layering appears often in the computing world (think assembler -> C++ -> operating system -> programs), so it's natural that such differentiation is emerging on the 'net as well. The business models for each layer are likely to look very different from one another.

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Social networks: improvement to your social life or stimulating egocentricity?

We all have too many friends on our social networks. Why would you not accept friend requests, what does it matter that you don't know each other? We all want to have a big network of friends. But as soon as we get updates of people that we actually don't know, the value of the social network becomes less. Based on research of Dr. Dunbar the human brain does not allow for stable social networks of over 150 people. The average Facebooker has 120 friends. If even the average Facebook-user has close to the maximum of processable friends, many users will go way beyond this number.

Well, what's the issue? Of course kids in puberty will use social networks and all its applications. But after a certain age, the social part of these networking platforms will dimish. There is no value in getting updates of people you met once in a bar with semi-friends 12 years ago. You only want to receive information from people you care about, from people that think a like. Applications like MySpace and Facebook are becoming more and more about branding yourself, getting your self out to the world. People create movies they want to share with the world. Whether people are actually watching, not important. It is about setting yourself in the middle of the world, at least the world you care about. Great for creativity and self-esteem, less great for social interaction.
The real future of online networking applications is much more in platforms like delicious and Twitter. These platforms are based on information sharing with people that have the same interests. Twitter provides social interaction as well, but the key of their success will be in customized information flows. Delicious organizes your own tags of website, but in the end is all about sharing these tags with your think-alikes. These platforms might end up in the center of our information-based society.

For more details on the social processing capabilities of the human brain, have a look at 'Primates on Facebook'

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UK ads: better at night

According to a recent study by the UK based Internet Advertising Bureau, online advertising is viewed most optimally in the evening hours. In their recent survey, the IAB found that younger (ages 18-24) consumers paid more attention later in the day, while the oldest consumers (age 55+) had paid most attention to online ads between 2 and 6pm and 9 and12pm.

Moreover, consumers said that they least open to being interrupted by online ads when doing activities requiring their full attention, such as watching TV online, while consumers were most willing to be interrupted by online advertising while doing activities such as shopping online.

I wonder if the folks in television paid-programming already knew this...

Genevieve

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Ten cent friends?

Last month, Burger King introduced a “Whopper Sacrifice” application on Facebook. The user simply had to get rid of ten friends via the application and he or she would receive a free Whopper. For each Facebook friend a Facebooker removed, his or her profile picture was electronically burnt on screen and then that person was notified that he or she had been part of a “flame grilled sacrifice” in your quest for a Whopper. Additionally, the "sacrifices" appeared in users’ activity feeds – for example, "Genevieve sacrificed Columbia Business School for a free Whopper."

What’s strange is that Facebook shut down the application because of concerns about privacy issues. Facebook’s statement:

“We encourage creativity from developers and brands using Facebook Platform, but we also must ensure that applications follow users’ expectations of privacy. This application facilitated activity that ran counter to user privacy by notifying people when a user removes a friend. We have reached out to the developer with suggested solutions. In the meantime, we are taking the necessary steps to assure the trust users have established on Facebook is maintained.”

As TechCrunch points out:

All that happened is the user being dissed got a message telling them, which helps the application spread virally. Without that feature the app is far less powerful. There is no real privacy issue here, just a policy decision by Facebook that people shouldn’t be notified when you remove them as a friend.

Before shutting it down, the Whopper Sacrifice ended in excess of 233,906 friendships.

What’s most interesting is what this shows about the utilty of one’s online social network. While there are those who regard number of friends and/or subscribers as a useful metric, it seems as though it really isn’t. It seems, instead, that some of us have too many online "friends" we don't really want. Burger King, brilliantly, captured the issue of overwhelming network size and incentivized social networkers to defriend – valuing those friendships at fewer than ten cents a pop.

Genevieve

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Hulu Abandons Boxee

Most of you are familiar with Hulu, which is fast becoming the premier destination on the web for television content. Fewer know Boxee, a software program in alpha (yes, that comes before beta) which basically turns your computer into an all-in-one media player.

Boxee has a loyal following among AppleTV users, even though the integration is far from seamless, because it offers such a compelling user experience. I've tried it on my Mac, and although it is still very buggy, I can definitely see the appeal. It deftly pulls in streams from YouTube, Netflix, Flickr, CBS, ABC, and until February 20th, Hulu.

Wait, what's happening with Hulu? According to the company, they are being asked to abandon Boxee by their content providers. This has prompted all sorts of speculation as to what is going on behind the scenes. Here are a few of the headlines I've seen:
The best explanation comes from entrepreneur Marc Hedlund, courtesy of The Guardian:

"The only reason they're on Hulu is to make money from Heroes when you watch it online so Apple or Google doesn't make that money instead," he said.

Put simply, it's about where you watch your TV.

The television companies who support Hulu don't mind if you watch their shows on your computer through their website from time to time. It means they can stick adverts on it and recover cash that would (at best) only go to rivals like iTunes or YouTube.

But the last thing TV companies want is for you to stop watching broadcast telly altogether and push internet streams onto your living room TV. Their lucrative live ads get switched out for inexpensive web ones – dealing another blow to their already struggling businesses.

I'm sure this is just another turn in what will be a very long story. Still, I'm hoping that at some point the networks come to their senses and realize that people will ultimately get content as they like, regardless of the provider's preferences. (I keep telling people about how my television signal died at least a week before I noticed it was gone.)



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Traditional media metrics shifting outside the home

Internet banner ads and paid search campaigns are taking larger portions of the pie of advertising budgets. This makes sense. First, there is growth on the internet: internet usage among Americans increases every quarter. Secondly, advertisers can track how many people view their ads, how many people clicked on their ads, and how long they stayed on an advertiser’s site. This information wasn’t available before with traditional advertising and provides advertisers with incredibly useful metrics.

Given the shift to online advertising, it’s great to see traditional media responding.

Nielsen recently teamed up with Integrated Media Measurement (IMMI) to start measuring the number of people watching TV outside of their homes in places like restaurants, offices and gyms. Television execs are hoping to more accurately capture the number of people who watch television - CNBC in the office, for example - even if they don’t watch it at home.

One wonders, however, if this will dilute the accuracy of the information. For example, how many people sitting in a bar with CNN on the television sets in front of them are actually watching as intently as they would if they were viewing from home? Can this be seen as an attempt to artificially boost numbers and, therfore, artificially boost reach?

Genevieve

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Brooke Shields and the Routan boom

I’ve been reading recent criticism of VW’s Routan marketing campaign and its supposed contribution to VW’s low level of minivan sales. While I'm sure this drop in sales is due largely to the current recession, I still feel the need to defend VW and their agency, Crispin Porter + Bogusky.

I have to admit, ads that employ celebrities are not terribly inspiring; in my opinion, it’s generally an indication that theoretically innovative advertising execs can’t offer anything really innovative. But, I really like VW’s Routan television ads with Brooke Shields (especially given her recent media attention due to “disagreements” with Tom Cruise about post-partum depression).

In VW’s TV ads, Brooke Shields urges viewers to “have a baby for love, not for German engineering.” Hilarious! It seems that Volkswagen wanted both to deviate from the traditional “soccer mom mini-van” model as well as to challenge long-established beliefs about the mini-van. Thus, Brooke Shields hawks Routans and invents a Routan baby boom, with families prompted to procreate as a means of justifying their purchase of a German errand mobile.

In fact, Volkswagen even took it to another level by creating the “Routan Babymaker 3000” , an online program in which visitors can preview what offspring might look like (either the result of real or fantasy partners). Try it – it’s fun!

Brooke Shields selling minivans is admittedly not a huge leap, but that’s not what’s so great about it: VW has leveraged both television marketing and online marketing in a humorous and effective way. Don’t blame Brooke for lack of sales – as one former leader used to say, “It’s the economy, stupid”!

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In an article published in the WSJ a few months ago, the discussion around role brands and consumer products play and how can they interact with the consumer is brought out. As brands realize that Facebook is such a potentially valuable tool to segment, target, and reach consumers, they are exploring and experimenting with how to be part of this space. From product pages, banner ads and polls, to ads inserted into newsfeeds, all these efforts to this day have proven unsuccessful. The truth of the matter is that Facebook as it is used is a place to connect with and interact with friends, family, not brands. A majority of individuals aren’t keen on become a friends with or a fan of a brand and having this commercial aspect invate their intimate space. This leaves a great challenge but also an amazing opportunity for innovations and creativity as CPG companies try to find a way to monetize their efforts on this space.

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Kindle for Magazines

Following the success of Amazon's Kindle, Hearst is planning to introduce an electronic reader for periodicals according to Fortune Magazine. Hearst has developed a wireless e-reader with a larger screen than the Kindle, making it more suited for newspapers and magazines. The screen is rumored to be the same size as a standard sheet of paper.

Hearst made an investment more than 10 years ago in E Ink, the company which supplies the electronic ink supply used in most e-readers. Unlike Amazon, Hearst will let publishers develop their own branding and payment models.

This is an interesting development as well as opportunity for the publishing industry. I wonder how many e-reader devices a person will need a and what is the appropriate size. Also, not mentioned in this article is the price of this new reader.

http://money.cnn.com/2009/02/27/technology/copeland_hearst.fortune/index.htm?postversion=2009022712

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A Google Monopoly?

The New York Times had a great article entitled Everyone loves Google until its too big and TechCrunch followed up on a great commentary on What an antitrust case against Google might look like.

Google has always been the goldenchild of Web 2.0 and I think thats largely because everything Google has done has been largely been seen as a consumer service. Until recently most of the public probably couldn't answer the question "How does Google make money?" and I think many viewed Google customers as the users browsing the web (when in reality clients are just as an important Google customer as its browsing user base).

The article brings up 3 key things that would need to be proved in order for the Justice department to begin considering an anti-trust case. They are:

  • The prescence of a monolopy
  • Abuse of the monopoly resulting in consumer harm
  • Detering market industry in areas that would benefit consumers

Eventhough it is tough to prove maybe someone will be able to prove point 1, but beyond that it would be very hard for anyone to buy points 2 or 3. No matter how big Google gets as long as they are viewed with the lense that their primary goal is to serve the public good by providing superior search services its going to be tough to ever claim that Google is in an monopolostic position that is hurting consumers.

To look at it a different way, maybe if the if we focus on advertisers as consumers first and not users, then there may be an issue. As Google gets larger and larger market forces will push Google's prices high enough that advertisers start calling foul. If hurting the advertiser can be linked to hurting the end consumer then Google is going to have to be on the lookout.

It certainly will be interesting to watch in the coming years...

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Republicans: can they provide a message we can believe in?

Inspired by Stephen’s post about congressional leaders on twitter, I remembered the Wall Street Journal’s recent focus on the Republican Party’s improved internet savvy.

RNC Chair candidates were recently asked whether or not they have any followers on Twitter and most responded “yes”, with some able to recite precise numbers of social media followers and friends on Twitter and Facebook. These questions result from larger Republican Party interest focus on internet and social media marketing after losing massively in recent elections to the more tech-savvy Democrats. In fact, a group of Republicans have provided a ten-point action plan outlining how to rebuild the Republican Party, identifying “the Internet” as the number one priority. According to them, “winning the technology war with the Democrats must be the RNC’s number one priority in the next four years.”

I don’t think this makes much sense.

The Republican Party should absolutely improve its internet and social media marketing strategies (compare gop.com with democrats.org and you’ll see what I mean), but I think the party is overlooking a major initial step in reviving itself from the dead: have a message!

While I believe social media and online marketing are terrific ways of reaching new and diverse groups of citizens, I don’t think any amount of online marketing expenditures can save a brand or a campaign if there is not a clear or consistent message. I highly doubt that those who voted for Obama did so simply because he Tweeted or was on Facebook – instead, I think people supported him because he emphasized change and his message (while, ironically, one of change) never wavered. In short, I hope the Republicans can come up with a central idea and/or a rallying cry before they enlist the help of social media and internet marketing.

Genevieve

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Internet blogs to end fraud?

Two weeks ago, another Ponzi scheme was uncovered – this time, in large part because of the internet. (http://www.timesonline.co.uk/tol/news/world/us_and_americas/article5761474.ece) (http://dalmady.blogspot.com/)

Alex Dalmady, a 48 year old Venezuelan financial analyst, wrote a report questioning Stanford International Bank’s business model and stated returns that was published in January, 2009 and subsequently reproduced on various internet blogs. His report fueled the investigation of Stanford International Bank and led to the ultimate discovery of Stanford’s massive fraud.

It seems as though the internet, and bloggers, may actually help uncover (though I doubt will prevent) future fraud within the US. What remains to be seen, however, is how internet law will grow along with these blogs. As it currently stands, the Communications Decency Act of 1996 protects blog owners but not bloggers: in short, a blog owner whose blog has published offensive opinions cannot be held liable but a blogger who uses a blog site can be held liable for his or her accusations.

Perhaps it's time for some online libel reform? Or perhaps we need to post our accusations under the name “anonymous”?

Genevieve

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Email channel = Very profitable for marketers

Though social media seems to be monopolizing consumers’ minds, it seems that one of the traditional channels is still strong. Email, though not seen as exiting as social media, is an easy/low-cost way to reach consumers. And for those consumers who choose to receive emails from companies, it provides a means of communication with that company. In fact a recent study from direct marketing agency, Epsilon, found the following:
56% of recipients of permission-based email from retail companies said they were more likely to make purchases from the sending retailers
52% said they had a more favorable opinion of the retail companies that send them email because of the communications they receive.
48% of respondents reported feeling more loyal toward the retailers and their products as a result of receiving permission-based emails.
87%--of respondents who receive permission-based email from retail companies said email is a great way to learn about new products
63% of those who receive permission-based email from retail companies said they want to receive personalized content based on their Web site activity and past purchases.
75% of respondents reporting purchasing a product online as a result of permission-based email, while 67% reported purchasing a product offline. (This is a huge number, especially because a consumer is going from online (information) to offline (purchase).)
Interestingly, depending on the industry, the email channel may resonate with consumers more. Specifically, Epsilon found that people who receive emails from the travel industry are more likely to make purchases than if they receive emails from other brand companies. There are many positive benefits from sending emails to consumers, even though it may seem less “cool” right now.

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Why Not Pandora?

I guess I'm a little out of the loop and didn't realize people still made music videos, so I was pleasantly surprised to see that many of my faves were on Youtube. Even more surprising was that, for some at least, a link pops up at the beginning that will take you to Amazon so you can buy the mp3.
Having just done our group project on Pandora the immediate question I asked myself was why they don't link to the video. I mean - I know that's a whole other hot mess - but it seems like if they had such a feature they could guarantee more eyeballs will be on the page, which in turn would mean they may be able to ask more for these run-of-site display ads. I use Pandora a lot, and it seems like they end up selling their remnant space through DoubleClick quite often. I am sure that's why they had to start inserting the audio ads. Just an idea...

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Yahoo and Microsoft Dance

Microsoft still wants Yahoo.

Last summer I worked in banking on the west coast, and the group I worked at was the buy-side advisor for Microsoft in the proposed Search deal to buy Yahoo, a highly coveted deal that would have wielded tens of million dollars in fees for our group. When I arrived, the deal had just officially died, and you could sense the immense fear and disappointment around this deal not happening—people knew that this deal would have saved a couple heads in the office. Btw, Yahoo paid $79M in fees to its advisors, despite no deal, which I find absolutely ludicrous.

Fast forward to the worst economy in 60 years to March 2009, and Microsoft still really wants a piece of Yahoo. It’s no surprise, since 14 years into its online business, MSFT has miserably failed to do anything in search. And we heard recently that Yahoo’s search share has stabilized, i.e. it’s not losing any more share. See Surprise! Yahoo Now Has Edge In Microsoft Search Negotiations, showing that Yahoo’s search share has stabilized at 20%.

And Steve Ballmer has finally admitted that Microsoft sucks at search.

Meanwhile, Yahoo, continues to unveil new PPC Video Ad Tools, and has been "quietly testing" the sponsored search tool Rich Ads In Search with a select number of national brand advertisers, according to Tim Mayer, Yahoo VP for search monetization and distribution. It took nearly a year to create and test the Rich Ads In Search, but Yahoo has finally unveiled the program.

The advertisers--including Pedigree, Pepsi and Esurance--have seen click-through rates increase by as much as 25%. The pay-per-click (PPC) service for video ads appears to increase brand exposure and influence higher conversion rates. "People can now add interactive elements to sponsored search such as a video, search box, or deep links," according to Yahoo.

Brand advertisers have been testing the 30- and 60-second video tool. The ads link to relevant pages on the brand's Web site, a strategy that can help drive conversions directly from the Yahoo search query pages. And a box within the listing allows users to search for products or a store location without navigating away from the search query.

So.. back to Yahoo and MSFT - I think it's very likely Carol Bartz will strike a search deal (not slell all of Yahoo), and the only ones happier than Steve Ballmer and company will be the bankers.

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