Don't Mock the Metaverse

The Economist argues that despite the ham-fisted launch of Meta and some of the mocking that ensued, we should be taking it seriously.  Something like the Metaverse is a natural extension of both sophistication in hardware, software, and artificial intelligence, and a three-dimensional internet is the logical next step from where we are now. They cite the examples of Everquest, World of Warcraft and now Roblox as three-dimensional locations in which people live and play - not so much work - but which have millions of users.

Meanwhile, Shaan Puri on argues on Twitter that we're thinking about Metaverse wrong - and we shouldn't be thinking about it as a place, but as a threshold in time that we are inexorably moving towards - where our digital lives are more important to us than our physical ones.  We are already cultivating our digital selves with filters, and with the introduction of phones our level of attention on the physical environment around us has dropped to 50%. Puri foresees a time when 90% of our attention is on screens and believes that that is when the Metaverse will truly exist.

The implications for digital marketing are of course enormous - with so much attention on screens, opportunities to respond to intent and interest are only going to multiply and accelerate. It is no surprise the Facebook is betting big on this, followed by Microsoft and nVidia - it is not 'weird' - it is simply about positioning their companies to be ready to capitalize on where the world is headed.

The question is how digital marketing will be welcomed in this new world. In class last week we heard from a speaker who offers value exchange advertising on mobile, who despaired at how poor marketing placements in virtual environments were being both executed and received. My personal favorite, Nine Inch Nail's nail-gun ammo box in Quake, has rarely been beaten, and it's now over 25 years old.

Will Microsoft’s new email marketing tool kill MailChimp?

Microsoft recently released an email marketing extension of Office 365 Microsoft Connections. Connections allow users to create professional-looking email marketing campaigns on the web, iOS, and Android. It monitors campaign performance, including clicks and open rates, and manages subscribers. In many ways, Microsoft Connection’s value proposition is similar to MailChimp’s! If this was not enough - Microsoft is offering the email tool for free just like MailChimp! Ever heard of anything ‘free’ from Microsoft before?

MailChimp announced in early May that it would give its 15 million customers free access to its email marketing tools, a service previously which came at extra cost. While MailChimp is cheaper than an Office 365 subscription, experts say that's only true to a point. The MailChimp business model has a "free to play" lower tier which spikes upwards as a list of subscribers grow. For example, with MailChimp, you can email to a list of up to 2,000 subscribers a month for free, but if you have 24,000 subscribers, it will cost you $150 a month. However, MailChimp’s model is not sustainable - especially if it were to compete with tech giants! Microsoft on the other hand, has $126 billion in cash on hand, so offering products for free is no big deal for them.  But with Microsoft's offering there is a catch - Connections is not really 'free', you will need to purchase Office Suite to install the email tool!

While leveraging Microsoft's platform may seem tempting to small businesses, they must wait to see if Connections will be like Microsoft Media Player or Microsoft Money! Will it be a huge success or will it just fail like several other Microsoft products?

It is perhaps too soon to say anything, but it will be interesting to see if Microsoft is able to revolutionize email marketing with Connections and if MailChimp will be able to sail through the fierce competition from a tech-giant!

Link: https://techcrunch.com/2017/07/10/microsoft-launches-new-email-marketing-and-invoicing-tools-for-small-businesses/?ncid=mobilenavtrend

HALO: Marketing Evolved

Microsoft's XBOX One is gearing up for the next iteration of it's wildly popular HALO video game series which puts the player in the role of the Master Chief, a cybernetic super soldier, as he battles an alien race known as the Covenant.
HALO 2's marketing effort in 2004 involved an alternate reality game that let players solve real world puzzles that ultimately led them to a point where they could play a demo of the game. HALO 3, launched in 2007, followed up with an even more ambitious campaign that involved the release of action figures, a HALO branded soda, and video documentaries that cost $40 million. The big risk was a stunning success with 3.3 million units selling in the first week and total sales of $170 million in the first few days leading it to win several marketing awards. HALO 4 reverted to the same tactics used in the HALO 2 marketing campaign by challenging gamers with puzzles that unlocked promotional art which went viral in social media circles and on gaming blogs.

Needless to say, the series is immensely popular with many gamers and it would be easy for the developers to pare back the marketing budget for a brand that pretty much sells itself. The attached article is old, but it's really interesting because it dives into how the marketers have observed the evolution of their target market and how they view their different segments and I think the lessons learned can be applied to many different circumstances.

http://www.dmnews.com/halo-4-marketing-evolved/article/274185/

The HALO marketing machine is gearing up for the latest installment in the series with a Tumblr website that shows a picture of a bullet with the word "Traitor," written on it and a timer counting down to the next update. If history is any guide, this is just the beginning of a well orchestrated campaign to whip the loyal fanbase into a frenzy for the release of this title.

Business Anthropology in a Digital Age

“All of these problems at the end of the day are human problems, I think that that’s one of the core insights that we try to apply to developing Facebook. What [people are] really interested in is what’s going on with the people they care about. It’s all about giving people the tools and controls that they need to be comfortable sharing the information that they want. If you do that, you create a very valuable service. It’s as much psychology and sociology as it is technology.”      
                                                                           

These are words of Mark Zuckerberg who studied psychology and computer science at Harvard University and went on to create Facebook whose initial IPO listed the company at a market cap of $104 billion.

  

Today there are many well-qualified anthropologists working in business. Companies increasingly hire anthropologists to design new technology, to learn more about their customers, and to improve their business. Increasingly, business anthropology is a preferred approach for business executives to understand why and how people around them do what they do, as well as why and how consumers choose to purchase the goods and services that they prefer.

Companies hire anthropologists to measure how customers like their products and what they can do to improve them. Companies like social gaming developer Zynga and web search company Yahoo hire people with anthropology degrees to do user research. These anthropologists use anthropological methods to collect information from game users and analyze it to help game designers make the games more attractive and fun for users. 

Intel is another company that has hired anthropologists. In particular, Director of Interaction and Experience Research, Genevieve Bell, is credited with changing Intel’s business plan. She has done research on the way people all over the world use computers and the internet and has helped redirect Intel into the smart phone and internet TV markets, both of which are non-computer-based ways of using the internet. She says that for large parts of the world, the Internet is, and will continue to be, mostly text on a phone. So Intel is pursuing that market with its Atom chips, which are cheaper and consume less power than, say, Intel Core i3 or Celeron processors. Bell has also been key in helping Intel move into the smart-TV market, studying how people behave when they are entertained by television in a living room, and how that experience is distinct from sitting in front of a computer.

Other tech companies have social scientists on staff. Microsoft, IBM, and Hewlett-Packard  are some of the corporations that have anthropologists and ethnologists working alongside systems engineers and software developers. 

Xerox  is credited with pioneering this practice when its Xerox Palo Alto Research Center in 1970s hired an anthropology grad student to help engineers build copiers with an easy-to-grasp user interface. This easy-to-grasp user interface was then adopted by Steve Jobs to create the Apple computer which revolutionized the PC industry. 

Fear Grips Google?.. Really?..

Is Google really scared of anything other than the term 'anti-trust'? :)

According to James Doran in the New York Post on June 14th, "co-founder Sergey Brin is so rattled by the launch of Microsoft's rival search engine that he has assembled a team of top engineers to work on urgent upgrades to his Web service."

So why does Bing have Google scared?

• Apparently there is something about the search algorithm in Bing that has Brin concerned - and the fact that one of Google's co-founders is so hands-on regarding this particular competitor has industry insiders taking notice.
• Google and Yahoo! dominate the search market, with 60 and 20% market shares respectively, and Microsoft has been largely unsuccessful in competing - but Bing has been received favorably by critics, was launched with a gigantic marketing budget ($80-100M according to the Post), and early statistics show Bing increasing Microsoft's market share by two percentage points, to about 11 percent.
  

But 'Fear Grips Google' seems to be a bit of an overstatement by the Post at the moment, as Scott Kessler, senior analyst at Standard & Poor's and a Google specialist, notes the main motivations for consumers' choice in search is ease of use and habit - making Google harder to scare than an $80M marketing budget and favorable reviews.

While I've tried out Bing and find it to be quite user-friendly, the force of habit motivation that Kessler mentions is a difficult hurdle to overcome. It will be interesting to see how Microsoft proceeds in gaining market share once this initial marketing push phase is complete. Can they stay in the game, after setting the pace at $80-100M, to overcome this Google habit of ours?

Read 'Fear Grips Google' in the NY Post here:
http://www.nypost.com/seven/06142009/business/fear_grips_google_174235.htm

AP Reports Facebook worth $3.7 Billion

The endless speculation that Microsoft's $15 billion valuation of Facebook (through an investment) was way out of whack with reality is finally revealed to be true - even within Facebook itself!

According to court documents obtained by (and hacked by) the AP, the recent settlement of the ConnectU lawsuit shows that Facebook values itself internally at only $3.7 billion.

Techcrunch also discusses the laughable 'cut and paste' hack used to reveal the supposedly blacked out court information.... Check it out for yourself.

In light of writedowns like Google's 'mark to market' of their investment in AOL, this is not that surprising. Perhaps the greater question is why these things happen in the first place. For a promising startup with great potential, valuation can often be the consensual hallucination of where it's going to be - and this is often a self-fulfilling prophecy, as people and partners want to sign up with and do business with (and invest in!) what is perceived as the next big thing.

By encouraging Microsoft to place a seemingly high valuation on Facebook as an enterprise, was Facebook trying to game the system - create a sense that they were an emerging juggernaut, suggest a higher valuation to potential investors, acquirers, and even employees - and perhaps even impact the perception of the average consumer choosing where to spend their social networking time and attention?

Yahoo Shareholder Presentation...

Here's an excellent summary of the Yahoo!-Microsoft saga (Question #1 from the Final!) and the subsequent Icahn related mumbo-jumbo.

the Yahoo! Investor Presentation at the SEC

Yahoo-Google Under Investigation

To add to the Microsoft-Yahoo drama, there has been talk of antitrust implications of a possible merger between Google and Yahoo, otherwise known as the "other option". The speculations of this possible merger were launched in full force when Yahoo announced that it would conduct an exploratory two-week trail with Google by outsourcing some of its online ads to Google. The "Wall Street Journal" reported last week that the trial has "yielded positive results", thus signaling to the Department of Justice (DOJ) that there are serious possibilities of a long-term relationship between Google and Yahoo. With Google dominating the online advertising market with approximately 60% share and Yahoo following up with 20%, a merger of the two companies could easily violate US antitrust laws.

The story gets even more interesting. Google CEO Eric Schmidt is under investigation by the US DOJ for anti-trust behavior. Upon Microsoft's unsolicited acquisition bid for Yahoo, Schmidt reportedly contacted Yahoo CEO with questionable motives. The DOJ reports:

… The Justice Department is concerned that the test may violate antitrust law, the source said, adding that authorities “have initiated an investigation” of it … The source, who spoke on condition of anonymity, said that some of the government’s concern focused on a telephone call from Google Chief Executive Eric Schmidt to Yahoo Chief Executive Jerry Yang to offer help in thwarting Microsoft’s $44.6 billion bid.

While Google was able to garner regulators' blessing on their DoubleClick acquisition back in March, it does not seem likely that the antitrust gods are smiling upon them this time. While no decisions have been made as of yet, it'll be interesting to see what happens. Who would of thought that amongst the group of Microsoft, Yahoo, and Google, that Microsoft would be the one left out of the antitrust investigations for once?!

Sources: Reuters, Mashable

Yahoo! to Report Quarterly Earnings Tomorrow

With Microsoft's three-week ultimatum coming due in five days (April 26) and AOL and Google in the mix, Yahoo's first quarter earnings release tomorrow could be one of their most important. With the economy slowing, one could hypothesize that earnings for Yahoo could be down, however because Yahoo is in no rush to work out a deal with Microsoft, most people believe that things are looking up for Yahoo. Industry analysts predict revenues of approximately $1.33 billion, which translates into 12% year-on-year growth and $.09 earnings per share.

Another major point of interest that people are eagerly anticipating is the result of Yahoo's two-week trail ad partnership with Google. A successful partnership would fall in the range of at least a 30% - 40% increase in revenue per search.

Tomorrow's announcements will most likely determine how much bargaining power Yahoo will have in a possible Microsoft take over. While analysts opinions are split on whether or not the deal will actually happen and at what price, all analysts agree that Yahoo has been and still is a strong company. Bernstein analyst Jeff Lindsay says:

We expect management to have pulled out all the stops to drive up Q1 performance, maximize their value, and make life generally as difficult/expensive for Microsoft as they can… We also think it likely that a deal with either AOL (NYSE: TWX) or Google or both will be announced ahead of the Microsoft deadline, and see this as a positive for shareholders.

While Needham analyst Mark May states:

We believe in-line results and either a maintaining or increasing of CY08 guidance will provide Yahoo! mgmt with further proof that it is executing toward its three-year financial plan, and will tilt the negotiating power in the MSFT take-over bid toward Yahoo!, in our view. Despite Yahoo!’s value as a take-over candidate and the potential for a raised MSFT bid, we are maintaining our Hold rating as i) we believe the company currently trades at or above its stand-alone fundamental value, and ii) we believe there is as much as a 50% chance that the MSFT transaction does not take place.

In the end the market seems to feel that Microsoft will eventually take over Yahoo, however key variables such as the Google ad partnership outcomes and how positive Yahoo's Q1 earnings have been will help determine how good of a deal Yahoo will be able to negotiate.

Sources: Paidcontent.org