Posts Tagged ‘business’

More Difficulties Monetizing Web 2.0

February 7, 2008
A Branding Me First: I Was Right About Something!!!

It’s a bittersweet day for those of us who keep repeating over and over and over again that advertising on social networking sites is not effective. I think I have been spouting the same line since I started this blog: advertising, although it may create revenue, is not the most lucrative way to monetize Web 2.0.

Google’s stock tanked recently, falling 8.6%, which is the sharpest fall since it went public. As many of you already know, this is in large part due to the recent “bear hug” Microsoft gave Yahoo. But another key reason for the dive was the (semi)lack of revenue growth: although the net income rose 17% compared to a year earlier, that figure fell short of analyst expectations, and may represent the peak of continued growth.

So how come Google did not meet expectations? CFO George Reyes said, “We have found that social networking inventory is not monetizing as well as we would like.” Translation: we bought a helluva lot of advertising inventory for a helluva a lot of money, and it’s not performing. How bad is this problem? the reporter for the NY Times continues: “People involved in [the MySpace deal] said that Google never assumed that it would earn its $900 million back from that deal, but it appears to be losing even more than it had expected.”

Now, don’t get me wrong; I don’t think advertising is worth throwing out completely. I just want more creative business models for Web 2.0; there has to be other, more profitable ways to monetize these services.

Anyways, so much for me being a “naysayer” (the link back to me is in the last paragraph of this other blogger’s entry).

EDIT

Also check out AU Interactive’s rundown of a Facebook Social Ad experiment. 

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Microsoft Bids On Yahoo

February 1, 2008
Trying to Compete with Google

In what Bloomberg states is “the biggest-ever technology takeover,” Microsoft made an unsolicited $44.6 billion bid for Yahoo. That figure marks a 62% premium of Yahoo’s stock price as of yesterday’s closing.

It seems this bid is the culmination of the roller-coaster ride Yahoo has been on the past month: first, according to one report, the Yahoo CFO Susan Decker stated, “We don’t think it’s reasonable to assume we’re going to gain a lot of share from Google […]. It’s not our goal to be No. 1 in Internet search. We would be very happy to maintain our market share.” (as of September of 2007, Yahoo’s share of search traffic was approximately 19.5%, followed by MSN at 12%, compared to Google’s 54%). Second, Chairman and ex-CEO Terry Semel left the Yahoo board. He is credited it reviving the company and then “losing touch,” not being able to gain on Google’s dominance as quickly as others had hoped.

This hope was one of the reasons Yahoo ditched merger talks last year: “In a letter to Yahoo’s board, Mr. Ballmer wrote that the two companies discussed a possible merger, as well as other ways to work together, in late 2006 and 2007. Mr. Ballmer said that in February 2007, Yahoo decided to end the merger discussions because its board was confident in the company’s ‘upside.'” Now that that potential “upside” has fizzled out, it may be we’ll see this bid actually go through, especially since the search advertising market could possibly grow to $80 billion by 2010.

EDIT

Found a copy of the letter sent to Yahoo by Microsoft, and a great analysis of the possible merger on Forbes (the title? “A Messy Marriage”… gotta love it).

Digital Music Sales Grow

January 30, 2008
But Overall Sales Still Falter

Although music sales as a whole have declined, digital music sales grew to $2.9 billion in 2007 (compared to $2.1 billion in 2006), according to reports from The New York Times and The Economist (handy graphs in the latter link… especially if you fancy Beyonce). Once again, the fall in overall sales is being blamed on piracy. Understandable. I only hope a) we find better ways to curb this piracy other than DRM (or even worse, the Sony debacle of 2005) and b) this transforms music companies, which, for years, have basically served as mammoth loan sharks… with exorbitant overhead.

Interestingly, there appears to be a demographic divide between those who buy CD’s and those who download their music, according to a list of the top ten artists of 2007.

No Complete WSJ.com Access

January 25, 2008
Wall Street Journal Won’t Be Free

Hopes of the Wall Street Journal getting rid of their online subscription revenue have been seriously dashed: speaking at the World Economic Forum, Rupert Murdoch reportedly stated, “‘The really specialized (material) giving the greatest insights, that will still be a subscription service.'” However, the New York Times pointed out that Murdoch has “has vacillated publicly” about staying fee-based; the article noted that in November, Murdoch said “‘We expect to make that free.'” So why the change? Although I highly doubt Murdoch and company based the decision on this information, a Bear Stearns analyst concluded that to free WSJ.com, the site would need 12x more traffic. On The Long Tail, Chris Anderson explicated why that conclusion is probably false. I mostly agree with him, since the analysis is “based on an estimated CPM of $6”; that price estimation strikes me as ludicrous, because I’m pretty sure old media schedules for my clients do not include a $6 CPM.

Oh well. I was hoping I could gain access to more articles, such as “A CDO Called Norma,” especially since the topic directly affects my work. Looks like I’ll just have to wait for that raise.

My “Smartphone” And Windows Mobile

January 23, 2008

Windows Mobile

Another Reason Why I Can’t Stand Microsoft Products

Supposedly setting up ActiveSync is a breeze. Months ago when I actually used my Motorola Q for work email, it was a nightmare and I really never got it working correctly. Now, for the time being, all I want is to get my short videos and pictures onto a personal PC (scroll down to page 14 for the simple step-by-step guide). Is it wrong for me to assume that, even though I work with computers, I should not have to be a software engineer to figure out how to sync my Motorola Q with a PC? The other day I installed the Sync software and instead of being able to plug it in via the USB port and have it work its magic, I got the error message “Cannot find the mobile device.” Great. Then, I had to run a component of the software to “help” me find everything wrong with this failed connection, leading me to pages of confusing tips.

I just figure that, if the software on my Q is made by Microsoft and the software on the PC is made by Microsoft, and the software on my Q carries the name of Windows (Mobile 5.0) and the software on the PC carries the name of Windows (XP), then it should be a fairly seamless process, right?

Mark my words: the person who is going to make some of the most money in the next decade is the person who figures out how to make this digital mess work together: my AIM account (brandingme) through my Q, my Q to my MacBook (ugh, do I even want to subject my MacBook to that???), all the world’s web pages with FireFox, Safari and IE (and I guess Opera), and hell, even Microsoft software with Microsoft software.

You get my point. And trust, that person who makes it work together, he will be rolling in the dough.

[note to self: become programming language god]

What Won’t Google Do?; Lazysphere Blogging

January 17, 2008

“The Search Party”

Recently the New Yorker published an article about Google’s foray into, well, just about everything.
Kidding.
Anyways, here’s a great quote:

As Google expands beyond search […] the risk is that the company will come to believe that its engineers can master any business, solve any problem, and that Google will lose its focus.    

So, I don’t run a multi-billion dollar corporation, but even to me it seems Google is spreading their talent too thin; it’d serve them well to stick to their corporate mission: “to organize the world’s information and make it universally accessible and useful.” That’s quite a task… so why distract yourself with other things? Is Google running the risk of Starbuck’s, that of diluting the brand? Okay, that may be an apple to oranges comparison, but I think I’ll hold my ground on that argument. I.e., Google should stick to organizing content, not producing content.

Are You A Lazy Blogger?

Steve Rubel once again makes a good point: bloggers can be lazy, meaning bloggers are joining the “Lazysphere” instead of producing thoughtful, quality content. Interesting, because a while back Rubel stated that he’d rather post less on Micro Persuasion in favor of being “into the whole micro-blogging revolution”.

Now, my two cents: it’s hard to constantly produce good content. For some of the longer posts you read here, I can spend one to two hours simply doing research… yes, that time does not even include writing. My process is to go through all of my RSS feeds, hit up some of my favorite blogs and see if I can spot a theme; then I dig a little deeper through search engines in an attempt to find more articles. I read them all. I grab the url’s of the pertinent ones and then try to form a post that includes my analysis and opinion. That takes a lot of time. And what do I get for it??? About 3 pageviews a month.

So what’s my issue? Maybe I’m a horrible writer; maybe I don’t have original, quality, thought-provoking content; maybe I don’t post enough; maybe I might not engage in the blogging community enough to draw others to my blog; or maybe people are simply not interested in my ongoing thought process of how to monetize Web 2.0 sans advertising. Whatever the reason (I’m guilty of a lot of the things I just listed), it’s hard to keep it up when you can tell for certain that no one gives a $h!t about what you have to say…

Where Is Time Warner Headed?

January 16, 2008

Jeff Bewkes In a Personal Light

I found a great personal piece about the soon-to-be CEO of Time Warner, Jeff Bewkes. To put into context what he is up against, a few choice quotes: Richard Parsons, the chairman if Time Warner, said, “‘If I were Jeff, I would shoot myself.'” Later, Don Logan, the former head of Time, Inc., said, “‘If I were Jeff, I would follow Dick’s advice—I would go ahead and shoot myself.'” Damn, son.

God speed to you, Jeff. God speed.

MacBook Air

January 15, 2008

Apple Announces MacBook Air

Jobs’ keynote speech was, among other things, the introduction of the MacBook Air, a super-thin laptop with beefed up wireless capabilities.

So, it’s confession time: I’m a part of the Apple cult. I converted to a MacBook in April. I am never going back… except for when I am absolutely forced to use PC at work. Anyways, how bad am I steeped into the cult? I almost cried when I watched the MacBook Air demo.

One thing that floored me was that the demo shows someone using a PC. First, it was incredible that a video demo on Apple.com showed someone using a PC, but it was even more incredible that Apple seems to be touting a new compatibility with their competitor. Hopefully this small step with help bridge the gap for others to start converting. We need more people in the fold!!!

😛

Blogging For Money; FCC Auctions

January 15, 2008

Blogging For Money

Another story from the Journal did a great run-down of some new ways bloggers can take their labor of love (i.e., making enough money each month to cover hosting fees) to an actual cha-ching enterprise (i.e., being able to cover monthly hosting fees and some extra lattes for all those late-night marathon writing sessions). Unfortunately, the article is centered around how to do the best advertising program for your blog… which, once again, leaves us with no better ideas about monetizing Web 2.0 than slapping ads on whitespace.

FCC Airwaves Auction

I found an article on Bloomberg that was very useful in clarifying what the FCC auction will look like when it starts in two weeks. Also, the Wall Street Journal reported that Frontline Wireless has met it’s “demise” even before the auction started. Interesting, because the company was able to get a 25% small-business discount credit, but nevertheless ended up not being able to make the minimum bid.

Eisner Has A Point Concerning the Writer’s Strike, But…

January 9, 2008

…he’s being quite a jerk about it. Jeff Bercovici has kept tabs on the phrases used by Michael Eisner to describe the current writer’s strike; those phrases include “stupid,” “misguided,” and “insanity.” In an interview with Ad Age (sorry, subscription required after jump), he also called the strike “foolish.”

Now, Mr. Bercovici has elsewhere pointed out how Michael Eisner may not be the internet visionary he likes to make himself out as, but I do have to say this: while I do not appreciate Eisner’s course rhetoric, he has a point. Right now the pie that the Writer’s Guild is going after is small, and there isn’t much to go around. Not because the powers-that-be have it all gobbled up, but because, truly, there isn’t much on the plate.

However, I disagree with Eisner’s assertion that it will take three years to figure this out. Distributors and content owners want to get paid as much as the writers; they will figure it out sooner. For instance, if my personal habits went from die-hard appointment television fan to utilizing iTunes, NetFlix, and ’30 Rock’ on NBC.com for my content consumption, I have a feeling the money-makers are racking their brains to get something out the door faster than three years from now; to them, that’s probably an eternity.