Monday, May 31, 2010

The valuation of Facebook: A golden investment opportunity or the next bubble?

Facebook recently reached a $33 billion valuation on the private market. This is comparable to companies such as Time Warner, Starbucks, Visa and Southwest Airlines. It seems fair to ask whether this is a reasonable valuation for a social networking website.

On the private stock market Sharespost, one eager buyer wants to purchase Facebook stock at $75 a share. This implicitly values Facebook at an impressive $33.2 billion. According to the analysts at at Private Equity Data Center, this is fairly close to Facebook's fundamental value of $35 billion.

This valuation implies a handsome return for Facebook's investors, which together made an aggregate investment of $778 million (including Microsoft's $240 million). Sure, Facebook is the global leader in social networking. Moreover, last year Facebook claimed that it turned cash flow positive. But is this valuation reasonable? Let's look at some crude valuation metrics.

Value per user
Facebook states that it has 400 million "active users". This implies that on average each user is worth $83. So one way or the other, on average every Facebook user needs to generate $83 in advertising revenues. Is this realistic? How many ads did you click on Facebook so far? Do you think you will make Facebook earn $83?

Earnings multiple
Inside Facebook forecasts that Facebook will generate $1 billion in sales this year. This gives some insight in Facebook's earning potential. Let's assume that Facebook has a hefty 80% net profit margin. Then Facebook would be valued at 42 times net income. The only way to justify such a multiple is if Facebook's earning will show steep growth indefinitely.

Admittedly, the above metrics are very rough. As a private company, Facebook decided to be reserved in sharing figures about its performance. This prevents a thorough analysis of Facebook's valuation. Still, my personal gut feeling is that Facebook's current valuation is on the steep side. Obviously, I might be wrong here. Possibly there is still an enormous upside in the valuation: some sources speculate that the true value is closer to $100 billion.


Note that I assumed that Facebook is cash and debt free in the above.

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Print still alive?

I've spent the last week trying to learn and understand the online media / ad space for my independent study project.  Interestingly, I learned that WSJ.com charges up to $65 CPM.  This is an ultra premium due to WSJ's subscriber model, pay wall, and the demographics of its readers.  What surprised me was that Glamour, Conde Nast's main moneymaker (the print edition), charges over $200k for a full page glossy ad with a base rate (comparable to # impressions) of 2.25m.  On a life-for-like basis, this is equivalent to $89 CPM.  For those who says print media is dead - for a certain type of reader and a certain type of brands (fashion, luxury, retail), print is still most influential.

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Choosing a blogging engine for your web-site

I've recently spent quite some time trying to find a good blogging engine for one web-site and wanted to share my experience.

In general there lots of different engines that allow you less of greater degree of flexibility (usually, if you don't aim for commercial use, you will have tons of features, designs etc.) and for me the most differentiative factor was the language used to power these blogs: PHP or Perl.
For those who don't know, both these languages are kinda de-facto standard in the web and the chances are high you daily use web-sites written in any of them. PHP is perhaps a bit easier and can be used to write small scripts and easy applications, while Perl is a much more like other programming languages and is more suitable for big web-sites and complicated applications. Moreover if you've ever studied C you can start programming with PHP right away while Perl will require lots of time to learn. All that's the reason I've decided to go for PHP and below are the links with a small description to the best publishing engines written in PHP:

- Joomla (http://www.joomla.org/) - perhaps the most famous one. Joomla is a great tool: it is fully written in PHP, stores data in MySQL and includes features such as page caching, RSS feeds, printable versions of pages, news flashes, blogs, polls, search, and support for language internationalization. It has thousands of plugins and is so far the most flexible platform.
- Textpattern (http://textpattern.com/) - if PHP or Perl sounds like a rocket since for you - you should go for Textpattern. I've never used it, but it looks like even monkey can tweak it and apply to its web-site (however I assume monkey knows how to use Appache)
- Drupal (http://drupal.org/) serves more like a content managing system (so it's a higher in hierarchy than ordinary blogging engine) - it is also a very flexible platform
- ExpressionEngine (http://expressionengine.com/) - nice system however it's free only in its core version and for a full-scale version you will have to pay 100USD and then some more money for other modules
- WordPress (http://wordpress.org/) - it's a closest rival to Joomla and offers same level of flexibility and thousands of add-ons. Strongly recommend.

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When Facebook Says - You Have Too Many Friends - NYTimes.com

When Facebook Says - You Have Too Many Friends - NYTimes.com
Have you guys read this article?

What kind of rapport does a network of thousands of "friends" entail? Clearly, people may use FB for all sorts of purposes but I just can't see the one that would make "friending" a small army compelling. But even within smaller networks, I feel like adding a feature that would let one create different groups of contacts, say "college", "office", etc. wouldn't hurt. I know FB has this functionality of creating different lists of friends, but outside of very generic privacy settings (world, network and friends) it doesn't allow you to manage which groups of people can see which of your posts. I just don't understand why it's not there. I'm guessing if such a tool was implemented, FB could do a lot better in terms of keeping existing users away from smaller specialist networks that according to some could be FB's biggest threat.

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BP on Twitter

It's a fake BP Global PR twitter account, but it's hysterical! An example of marketing and the internet out of control. The abundance of user-generated content makes it difficult to control your brand image and can make PR a crazy job.

bpglobalpr

Some examples...
"We are starting a movement to fix the oil leak. Just mail your garbage to New Orleans and we'll take it from there. The bigger the better!"

"If you've ever wanted to take a dump in the ocean, now is your chance."

"If we had a dollar for every complaint about this oil spill, it wouldn't compare to our current fortune. Oil is a lucrative industry!"

"Please do NOT take or clean any oil you find on the beach. That is the property of British Petroleum and we WILL sue you."

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"shit my dad says" on twitter

A hilarious twitter page by a 29-yr-old who lives with his dad. A great example on how 100 words every few days can lead to over a million followers and profits in the long tail...

shitmydadsays

Some examples ...
“Pick your furniture like you pick a wife: It should make you feel comfortable and look nice, but not so nice that if someone walks past it they want to steal it.”

“Do people your age know how to comb their hair? It looks like two squirrels crawled on their heads and started fucking.”

“The worst thing you can be is a liar....Okay, fine, yes, the worst thing you can be is a Nazi, but then number two is liar. Nazi one, liar two.”

More than a million people now follow Mr. Halpern’s philosophical musings on Twitter. He also has a New York Times Best-seller and a pilot coming out on Thursdays after Big Bang Theory.

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Sunday, May 30, 2010

Will Google TV be a success? It's all about timing

There are some signs that Google's timing is right.
  1. More broadband connectivity available today than ever before,
  2. Hardware is getting more powerful (better CPUs, more RAM...),
  3. Software is getting much better and development is accelerating,
  4. Companies are providing better APIs (application programming interfaces),
  5. Consumers are more connected and they want to connect more often.

So, there's reasonable expectation that this particular Google endeavor will be successful. If it is, we are going to see pretty remarkable change in the business of television.

If Google TV lives up to its promise, it will seamlessly integrate the world of online content with the sociology of "watching television". This is powerful, habitual behavior that is demonstrated in every American household for over eight hours each day.

The question is simple: "Is Google TV two years ahead of its time or six months ahead of its time?". We'll know soon enough.


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Partnership is the key for location-based social networking

Foursquare number of users has grown a lot after the partnerships with W/Bravo, Zagat, MTV and VHI. The picture bellow shows the evolution of Foursquare users and some important milestones of important partnership they have made.

Gawalla is also following the same direction. The InterContinental Hotels Group, by room count the world's absolute largest, is partnering with location-based social network GoWalla to offer rewards to customers who check in this summer. The Hit It Big promotion promises rewards such as retail gift cards and double air miles to guests who stay multiple nights at participating IHG hotels between now and Aug. 31, 2010, including up to $500 in gift cards.

Would you sing up to win $ 500 in gifts cards?

4sqadoption


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New regulation in Europe applicable to Ecommerce and luxury goods

On April 20th the European Commission adopted a new Vertical Agreements Block Exemption Regulation and a revised set of accompanying guidelines on vertical restraints (VBER). The new rules are due to become effective on June 1st, 2010. Among other significant changes in the antitrust rules, the ones that are relevant for our course are the ones that apply to Online Distribution.
In particular, the following situations even if not automatically prohibited will very likely be viewed as antitrust violations:
-Preventing customers located outside a distributor's territory from viewing its Web site or automatically re-routing such customers to their national Web sites
-Limiting the proportion of overall sales made over the Internet
-Requiring that a higher price be paid for products sold online
-Requiring termination of Internet transactions if credit card data reveal an address outside the distributor's territory
Furthermore and even more importantly online distributors may be required to have one or more physical locations ("bricks and mortar" shops) or showrooms as a condition for becoming a member of a selective distribution system. Having one of more shops should give the opportunity to consumers to physically see and try or test their products.
These new rules have been read as a response to the Luxury brands lobbying. Luxury goods manufactures have always been concerned about online stores selling their brands at a discount and taking advantage of the investment they have to make to build and maintain their brand equity.
Effectively from the 1st of June in Europe Luxury brands will be able to prevent online stores from selling their goods.

http://business.timesonline.co.uk/tol/business/industry_sectors/retailing/article7107211.ece

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Saturday, May 29, 2010

TIME Magazine names The 50 Worst Inventions


This weekend, Time.com named its list of The 50 Worst Inventions (in no particular order). Some seem quite inspired: subprime mortgages, hair in a can, asbestos, and Snuggies for dogs, to name a few.

Others fall right into the realm of what we discuss in class and might be more questionable: Farmville (see Dekyi's post below), Foursquare, pop-up ads, and spam email.

What may first seem like some kind of power struggle between old and new media becomes comical when readers click through the compiled list to read the authors' commentaries. For Farmville:
"Blast you, Farmville. The most addictive of Facebook games is hardly even a game — it's more a series of mindless chores on a digital farm, requiring the endless clicking of a mouse to plant and harvest crops. And yet Zynga, the evil genius behind this bizarre digital addiction, says more than 10% of Americans have logged in to create online homesteads. How many hours of lost productivity does that translate to? Tough to guess. But for me, personally, at least dozens. Sorry, TIME."

Foursquare is touted as being another "creepy" way to tap into "a generation of narcissism." I won't necessarily argue with that. Given the reports circulating about Foursquare users who have gotten robbed after telling the world that they are not at home, it does seem that, at times, we're demonstrating a loss in the ability to distinguish convenient connections from unnecessary overshares.
Mashable.com's audience, when polled (and at this post's publication time), were almost split on the functionality of Foursquare, with 1,637 voters to 1,455 saying that Foursquare was actually useful.

And in an ironic twist, I had to "skip" a pop-up ad just to read the post on pop-up ads, which calls escaping online ads a "hopeless endeavor". Time.com may not want to bite the hand that feeds it. But, ok, agreed on spam email. Worst invention ever.

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Federal regulators looking at Facebook...


Adapted from David Gelles at the FT, May 29, 2010


Two days after Facebook announced simplified privacy controls, Congressman John Conyers, head of the House Judicairy Committee, sent a letter to Facebook asking them to cooperate with federal regulators looking into its privacy policies.


Mr. Conyers asked Facebook to provide details about it sharing member information with third parties and about it privacy policies. Mr Conyers didn't indicate if the House Judicairy Committee was starting an investigation. However several privacy groups have lodged complaints with the Federal Trade commission.


Lets see if Facebook new rules will convince regulators. Based on their trackrecord, they have not always followed up on their promises...

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Friday, May 28, 2010

Pandora - an ad placing machine?


Although Pandora has been around for almost 10 years, it is pretty new to me as its use restricted to US. Pandora iPhone app is still at top 21 of the free-app download list today. (http://www.apple.com/itunes/charts/free-apps/) I think this is an excellent web-based software which can play music tailored to your music preference and plays them non-stop. Pandora changes the way that people listen to music as it diverts traffic from internet streaming version of the normal radio station like www.capitalfm.com . A lot of listeners actually prefer listening to straight music and skip the DJ. Also they can listen to the music they really like rather than what the DJ likes.

For the free version, there are advertisements everywhere, and it occupies almost half the page. These are mostly interactive ads that are tailored to internet radio station. It is apparent that Pandora survives on advertising revenue and it has 7 sales offices within US apart from its headquarters. The entire page (skin) could change color to suit the advertisement, there are many custom designed icons and features that could built into the advertisement. There are many different types of advertisements available and all very creative. The full description can be found here in the video for advertisers http://www.pandora.com/static/ads/media-kit/advertising.html

Pandora tries to entice the listeners to keep going back onto the page by asking listeners to click on whether they like or unlike the song (part of their tailoring method), so they can see the advertisement next to the Pandora. There are also many ads tailored to the iPhone or Blackberry application, like click to call, banner ads for mobile, click to find location etc.

Sometimes it acts similar to the normal radio station and slots in an audio advertisement in between songs. So in case you are not browsing the Pandora page, their ads can still reach out to you.

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Who Moved My Crops?

By a non-Happy Farmer

I'm not an active SNS person, even though I checked my facebook and Kaixin (China version of facebook) frequently and enjoyed reading about my friends' new feed. I'm kind of lagged behind the era, my friends when they already became expert, I just got to know there is a SNS game called "Happy Farm". For those who are even more lagged behind than me, see the link below to know what "Happy Farm" is). From that days on, I often saw things like "X moved *** from Y's farm...". Still, I cannot understand why this"naive" game can become so popular (I would appreciate if anyone can stand out and convince me the goodness of this kind of game). I know many will object, but for me, this is just a waste of time and "doing well by not doing good", even though SNS firms may earn millions from such game.

http://www.youtube.com/watch?v=I-KMhbH27gA&feature=related

Some recent findings in China even increased my concerns. Because of this game, some players have been fired, lovers have broken up, but none of them can stop “Happy Farms” from becoming increasingly popular!!! The game developers only allow 2 million new players every day, but there are still more people waiting to play!!! Some true stories to share, though a bit extreme:

June 26th, a Netizen called “eifeng” posted an article called “Playing web games at work, that’s awesome!”. He said there was an official in XX city that was fired because she was online playing the game. The reason she was playing the game was because she was worried someone would steal her crops.

Another story is about a couple who had been together for 4 years. But after they started playing the game “Happy Farms”, their relationship was on the rocks. The guy had to work late, so he told his girlfriend to set the alarm and help him manage the farm while he was gone. But unfortunately, the girlfriend was pregnant, so one of the nights, the alarm didn’t wake her up. When the next day came, the guy found that not only did his girlfriend not harvest the crops, a lot of his crops were also stolen by other players. He got really angry and had a huge fight with the girl. In the end, they broke up and got rid of their baby...

This might not happen on any of us, but can be a good warning to all. If you are becoming an addict to Happy Farm, watch the video below:

http://www.youtube.com/watch?v=HLNVbmeWgII

I have a dream that one day I can have my own farm, but no way it is a fictional online farm!!!

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Top 1000 Most Visited Sites Published by Google




http://www.google.com/adplanner/static/top1000/

According to the list published by Google, Facebook took the first place with unique visitors 540,000,000, followed by Yahoo. All the websites among the top 10 have advertising except Wikipedia and Mozilla. It should be noticed that Google does not include itself in the list.

Professionals in the industry said that compared to Alexa, Google Ad Planner provides more accurate data because of its comprehensive sources. It’s a very powerful tool that can help companies to create their media planning easier and reach their target customers better.

Baidu, Google’s main competitor in China, was ranked 8th. It’s interesting that Google tagged its category as Web Portals instead of Search Engines.

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Thursday, May 27, 2010

Augmentation (without surgery)



Yesterday, TechCrunch reported that Ogmento received a significant amount of VC funding - the first augmented reality gaming company to achieve this. For those of you who do not know, augmented reality is "a term for a live direct or indirect view of a physical real-world environment who elements are augmented by virtual computer-generated imagery." (Wiki!)

I recently saw a cool start-up utilizing this technology. Users have to download the company's software, which serves as a reader. They print business cards that when you hold it up to the reader, it reflects an AR. The founder showed me his business card. His standard information was on the front, and on the back was a blotchy pattern, similar to Rorschach Inkblot Test. When I held the card up to the camera on his Macbook, the patterns caused different things to jump out of the screen including photos and his CV. A diffusion of this technology through network effects would be necessary for this concept to catch on, but in itself, it is a pretty cool technology. If people could utilize an app on their phones as readers, it would be a great way to be able to access more information about a person off of their business card using augmented reality.

Other cool uses of augmented reality:
One Japanese company enabled women to try on makeup using an augmented reality mirror.Wikitude allows users to overlay information onto photographs and maps (see photo above).Pocket Universe is an app that gives users information about constellations and planets by holder their iphones to the sky. And many apps are now available (I use Layar), that show users the bars and restaurants on a live map on their phone.

I think this technology will drastically change many of our daily activities including dining, traveling, and doing business. It has had a marked effect on the gaming industry. What will be next?




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Creating Display Ads Just Got Easier

Advertising on the web is becoming more simplified and less costly, much to the delight of small business owners. As described in the New York Times article, An Ad Engine to Put ‘Mad Men’ Out of Business, the driving force behind this trend is new software such as PlaceLocal (developed by advertising company PaperG), which automatically and quickly builds display ads for businesses using just a company name and address. The program works by gathering basic company information off the web such as telephone numbers and hours of operation. This information is then combined with photographs, reviews and other text to create a customized online ad for the business. Samples of the ads may be viewed at PaperG’s website www.paperg.com.

As of today the program is being used by 32 local media sites. These sites are typically charged a flat monthly fee for access to the software. In return the software allows these sites to quickly create ads for local small business that are interested in advertising on the local media sites. The advantages are numerous. Providing a small business with an example ad, instead of a rate card is a more appealing offer. Additionally, the program saves the media sites and advertisers time and money by quickly creating ads that meet the sites desired specifications. In the near future, the ultimate purpose of the software will be realized when small business will be able to go to PaperG’s website to create ads directly.

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Wednesday, May 26, 2010

Twittvertizing and a Web 3.0 search engine

A blog post by Jonathan Morgan below outlined Twitter's new rules for ad networks. It seems to me that the new rules for twittvertizing are not so much to "preserve the enduring value of the service" but rather a clever move to help promote its new search engine when it rolls out to the general public. On Monday, Twitter announced at the TechCrunch Disrupt Conference in NYC that its new search engine was going live. However, I wonder how Twitter will deal with celebrity sponsored tweets? With Brittany Spears earning up to $20k per endorsed tweet and Kim Kardashian $10k, celebrity twittvertizing is a big business that seems to be odds with a credible tweet engine.

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Hulu to remain free?

There appears to rumors about the a subscription service to the tune of $9.99 for access to Hulu.

An article from DailyTech from last week mentioned a target date of May 24 - which, fortunately has already passed and the service remains free.

See the link: http://www.dailytech.com/Hulu+to+Remain+Free+Premium+10Month+Subscription+Still+At+Least+a+Month+Away/article18408.htm

The new theory is that the current form of Hulu will remain free, but a subscription will provide premium access to more episodes.

Part owner, News Corp had publicly stated plans to charge this year. Cable giant, Comcast is likely to complete its acquisition of NBC, another part owner of Hulu, and is incentivized to charge for the service as well.

Perhaps the 15 sec commercials aren't so bad after all...

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Tuesday, May 25, 2010

Yahoo Acquires Location-Based Social Network

Foursquare is about to face a much more competitive environment from now and ahead. According to Forbes.com, in a post some hours ago, Yahoo announced that it has acquired Koprol, a location-based social network in Indonesia. The service is similar to Foursquare and Gowalla, enabling users to connect and share photos, reviews and other information in real-time using their mobile phone browser.

This acquisition is especially interesting in the context of Yahoo's new partnership with Nokia. Yahoo says it plans to continue to invest in the evolving Koprol service, including mobile applications, like its newly released app for the BlackBerry.

Yahoo explains that the company "is focused on providing personally relevant content to its global users on multiple devices and access points" and that it plans to "leverage the rich community of information generated by Koprol users to make its properties and applications, including its homepage and media and communications products, even more locally relevant."

Still, it's unclear why Yahoo is making this type of acquisition. It may be a strategic move for Yahoo's Asia region, and the company may not intend to grow the network beyond the area.

How or if Koprol will hook into Yahoo's other location-based tools and APIs, like Fire Eagle, has not yet been revealed.

http://blogs.forbes.com/marketshare/2010/05/25/yahoo-acquires-location-based-social-network/


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NYTimes Paywall Coming Soon

In last week's post, I ranted about the horrible ads on New York Times and proclaimed my willingness to pay for their content. Turns out, the Times is on it. Mashable.com reports (on the Wall Street Journal's actual reporting) that NYTimes.com will start charging for some content in January 2011. Subscribers to the print edition will receive online access for free and visitors who mainly come to the site via search engines and links will likely never be asked to pay, so the company does not expect a big impact on overall traffic -- which is important for advertising revenue. Times executive editor Bill Keller says it just comes down to business. “It costs money to do the kind of deeply reported journalism our readers expect, and it’s well worth paying for." Couldn't agree more, Bill, especially since this week I actually got video ads on the Times homepage.

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Monday, May 24, 2010

Mobile Innovation

Mobile innovation in the last couple of years has been absolutely incredible. Just five years ago, all smartphones were more or less crappy. While Blackberry had the email space efficiently locked down, all other applications were really tedious to use: Internet browsers could not deal with anything but the most simple websites; games were limited by slow processors and tiny screens; usability of the usual stylus- or keyboard-driven navigation was disastrous -- these devices were just horrible to use. Today, there are multiple great products in the market that are revolutionizing the mobile space and for the first time ever provide real choice: whether you are an Apple, a Google Android or a Blackberry person, the mobile space is exciting and enabling ever-new business ideas, not least of which mobile advertising.

But the one thing still holding back mobile innovation are the networks. Those of us who use AT&T's service in any major urban area, particularly in Manhattan, know just how horrible their service is. The complaints do not focus only on dropped calls and slow data connections, though, the networks are active roadblocks to further mobile innovation. They place all kinds of restrictions on the use of their network: no VoIP, no video streaming, no tethering. And it's not just AT&T either, Verizon is little different. What is motivating these networks? For one, they are heavily-regulated, capital-intensive oligopolies -- never exactly a hotbed of innovation. But they also know how to drive up short-term revenue and boost the all-important ARPU (average revenue per user). And as long as all networks are equally user-unfriendly, they can get away with all those little annoying tricks.

What's this all mean? We should really hope for somebody to disrupt the cellular networks. It is probably infeasible to just launch a new competitor. But Google has already dipped its toe in the water by participating in the 2008 wireless spectrum auction. So maybe somebody else has another ace up their sleeve?

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Facebook and Privacy

So at dinner last night, a bunch of us were talking about Facebook and the concerns we had about a (lack of) respect for privacy. Some people talked about a Facebook-basklash, but few people actually knew people who had dropped off. But I was surprised how much anti-Facebook sentiment there was, even amongst people who would be expected to be avid users (VC guys). Is the anti-Facebook basklash coming?

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Internet Marketing for the Small Business

Typical small businesses trying to expand their reach though the web may find that the costs of keeping a permanent webmaster too expensive. Enter an array of ever-evolving Content Management Systems (CMS), most of them open source or offering additional services at reasonable rates. WordPress,which is the leading choice for many bloggers, has extended into CMS territory with the launch of it's latest 3.0 version, which enables far greater flexibility than its predecessors.

Wix.com proves a powerful tool for quickly creating webpages in an online, all-graphical interface. This type of web design software may be of great appeal to people trying avoiding HTML and that have been waiting for years for web design software to catch up and make it "as easy as making a Power Point presentation". So, with these new technologies, internet users are also becoming website builders at a very high rate.

Now, the ease of outsourcing design & programming activities for the internet has become so widespread that many of the more advanced features for websites, web marketing, and the production of valuable media content are available for very reasonable costs. Companies like eLance provide a marketplace to find and offer services to build and manage sites, matching companies across the globe.

Have you even heard of open source movie production? The animated short Elephant Dream was produced entirely in open source 3D animation suite Blender, which makes the point clear: small businesses don't have to bear huge costs to access similar tools as large enterprises.

Elephants Dream from Blender Foundation on Vimeo.




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New Twitter Rules Clamp Down on Ad Networks

Earlier today Twitter has put its foot down and changed the rules that will substantially curtail third-party networks placing ads in the service. This decision will adversely affect many startups, such as Ad.ly and other third-party networks placing ads on the site. Twitter will not allow any third party to inject paid tweets into a timeline on any service that leverages the Twitter API.

This move is predicted to sharply curtail the activities of a number of Twitter ad startups, while giving more prominence to Twitter's own ads, called "Promoted Tweets." Promoted Tweets, which is Twitter's version of a search ad, appears at the top of a user's timeline based on "resonance", a metric that includes the number of clicks on an included link or the number of times the tweet has been passed around. In doing so, Twitter shares revenue with the applications that distribute the ads.

Now that the announcement has been officially declared, Twitter's Promoted Tweets will be the only sanctioned ad within the Twitter timeline. However, these rules will not ban Twitter users, themselves from taking ad dollars in exchange for their Twitter Posts. One example of this is Kim Kardashian who typically charges $10,000 to tweet specific messages to her followers on Twitter. Twitter announced that its users own their tweets and are free to do or say what they want, even if they want to sell their Tweets to advertisers.

Also, the new Twitter rules still allow third parties to place ads around Twitter feeds in other applications or next to Twitter search results, but they cannot resemble actual tweets. The new rules do not appear to affect those selling ads against Twitter search results (ie TweetUp, a startup founded by pioneer Bill Gross and search engines such as Google, Bing and Yahoo).

Since it was founded in 2006, Twitter was frequently used by a number of startups seeking to monetize the site. One of the largest and most prominent Twitter ad network, Ad.ly has signed up more than 70,000 Twitter users in hope of converting their Tweets into ad revenue. By doing so, they raised a $5 million first round of venture capital.

Though the move is not particularly surprising it is sure to have a critical impact on the third party ad networks. In Twitter's defense, they believe they have an obligation to their users to preserve the enduring value of the service and prevent third party ad networks from using the site since they are not necessarily looking to preserve the unique user experience.

For additional information on this article, click the link below.

http://adage.com/digital/article?article_id=144056

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In-Game Video Advertising

Statistical studies has shown that 33% of all teenagers in the US play more than 1 hour / week of video games (with over 2 million teens playing more than 20 hours a week!). Moreover, there is a growing number of adults (in particular females) that are frequently playing internet games. Not surprisingly the industry is more and more becoming interested in in-game video advertising. More so, as studies indicate a greater efficiency of this type of ads as compared to TV ads. See: http://techcrunch.com/2009/03/24/study-in-game-video-advertising-trumps-tv-advertising-in-effectiveness/
For further info you can also take a look at: http://www.neoedge.com/advertisers/
and http://www.google.com/ads/games/index.html

Question: Is there any regulation limiting the amount of ads in a game for teens?

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A Useful & Free Tool: Dropbox

Today I'm writing about a very useful and free application I use everyday. its called Dropbox (www.dropbox.com), and it allows you to store all your files online so that you can sync your files online and across your computers automatically.

You have 2GB of free space which makes it enough to store all your work and other leisure stuff (You can have up to 100GB if you choose their premium option, for a fee). It also works across mac and pc which makes it very versatile. You can work on any computer by logging into your account. Then, when you use your computer, everything will be automatically updated with your latest work.

Amongst many other supported devices, they have also launched an ipad application, which makes it very useful if you have one; you just have to put your stuff in your dropbox (in your computer) and you can then access it and edit it on the go with your ipad.

Sharing files is simple and can be done with only a few clicks. You can set public folders, where others can edit your work and collaborate. This can be very useful with photos too, and space is not really a constraint.

Dropbox backs up your files online without you having to think about it. This is done automatically and you can even have an undo history (very useful, believe me).
Furthermore it is very secure; all transmission of file data and metadata occurs over an encrypted channel (SSL). All files stored on Dropbox servers are encrypted (AES-256) and are inaccessible without your account password.

Dropbox was founded by Drew Houston and Arash Ferdowsi in 2007, and received seed funding from Y Combinator. Today, Dropbox is well-funded by Sequoia Capital, Accel Partners, and Amidzad. Since launching publicly in September of 2008, we've attracted millions of users and are growing rapidly. We've been featured in the New York Times and on TechCrunch, and have won awards from places like PC Magazine and CNET.


https://www.dropbox.com/

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Spam is profitable ...

I did some brief research regarding the profitability of spam and found various and inconclusive results. However, it is apparent from the articles that I read that spam is a profitable business, albeit a low margin business. Viagra seems to be the leading product, but fake watches also provide spammers (or their clients) with some revenue. Not surprisingly, the products most likely to be bought are "impulse buy" products. What I found surprising is that spam is a striving industry tied to the global economy. There are several books written on the subject likely adding to the GDP of this country. Workers from India, China, Bangladesh and other developing countries have been outsourced to tackle captchas. And, as noted in class, most spamming business are operating out of countries in Africa.

I am sure, with some deeper digging, someone could find reliable numbers regarding the profitability. If so, please post some info.

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More Social Media Stats...

Here's a video on social media stats worth checking out:

Updated Social Media Stats in Erik Qualman’s Social Media Revolution Video

One of the interesting notes was that 25% of search results for the world's 20 largest brands are links to user-generated content.

It's perhaps an understatement to say that the ability to capture the positives and fend off the negatives in the online sphere is becoming increasingly important to brand success. In fact, companies are developing Emergency Response plans in order to identify and react to negative conversation or social media chains.

The Social Media and the Big W site outlines how brands can utilize a Social Media Alert and Response Team (SMART) to quickly and effectively respond to these situations, and how the process for response differs based on demographics (younger audiences require a faster response) and the size of the company's social media presence.


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Too Soon for the New York Times to Get Greedy

The New York Times currently allows users who are directed to their website through 3rd party links to access content for free. However, that may soon be changing. The NYT may adopt a model similar to the Wall Street Journal and the Financial Times, which requires users to subscribe in order to access linked stories. Given that the NYT is currently free, its no surprise that its story's are linked to more often by bloggers than those of its competitors. Charging users to access content will not only lead to a decrease in the number of sites linking to the NYT, but will also lead to a drastic reduction in online readership. While it's important for the company to monetize traffic directed to its site, charging a subscription fee is not the best approach. With new mobile/portable devices such as the iPad and other tablets hitting the market, the NYT will have plenty of opportunities to implement a subscription model. However, for now, it's in the company's best interest to ensure that it does not drive away eyeballs from its online content.

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How to market alcohol in the digital age

One of my favored purveyors of ingredients for liquid libations--Shopper's Vineyard in New Jersey--takes advantage of a variety of web-marketing channels. Their liquor expert, Seth Nadel, not only sends out a bi-weekly email blast informing me about the latest deals (this week is a Bourbon sampler pack), but alerts me ahead of time via his twitter account. Beyond these more passive push technologies, Seth integrates YouTube and facebook into his advertising campaign. His twitter post references a youtube presentation featuring this week's Bourbon special. The video, in turn, provides a call to action to join the facebook fanpage, where users can find a $15 discount on the Bourbon special.


I appreciate an interactive campaign as much as the next bourbon drinker, but find the nested interactions and additional pull requirements to be a bit of a pain--I don't find it incredibly helpful to watch a video on bourbon, nor am I likely to use a fan page to dictate my alcohol purchases. There is a fine line between effective use of social media and an ineffective over-use. This seems to fall on the overuse side of things.


Luckily, Nadel also uses social channels that have more relevance to alcohol connoisseurs. Specifically, Nadel will often post to the message board Ministry of Rum whenever the weekly specials feature a rum product (e.g., here). Such direct interaction with a specific audience seems to be paying dividends, and certainly makes me more likely to stick with Seth's choices.

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Social Media for B2B

While we are all familiar with the application of social media marketing in consumer product segments, B2B companies are hopping on the bandwagon too. Here are a couple ideas for using social media in B2B settings:

http://mashable.com/2010/05/20/facebook-b2b-tips/

http://mashable.com/2010/03/25/b2b-marketer-lessons/

1. Use social media to make your business more human and create a relationship with customers.

2. B2B customers buy based on expertise, use social media to demonstrate your expertise in your market.

3. Allow customers to ask questions and get support through your Facebook page.

4. Set up a shopping tab on your Facebook page to drive customers to your e-commerce site.

5. Take orders through Twitter.

6. Use Twitter to address customer service issues.

If you decide to use social media marketing, make sure to maintain control of the way your company image is communicated. Construct guidelines for you employees regarding the what and how of social media communication.


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