Assumptions are mixed from a possible AOL acquisition, Project Panama, designed to better match ads with search results, expected to generate over $500 million in revenue (25 cents in EPS) over two years and the pure speculation on Yahoo's stock which lost 35% year to date.
Tuesday, October 31, 2006
Friday, October 27, 2006
Following our question about where Microsoft business model was going - read Hey Microsoft, are you becoming Googled? - and now that all 3 Internet titans have published their quarterly results, let's stop for a while and understand who is ahead of the curve.
Assuming financial analysts and investors are doing their due diligence properly, we could rely first on their feel for it. So, looking at the comparison chart between all three stocks Microsoft (MSFT), Google (GOOG), and Yahoo (YHOO) for the last 6 months, Google seems to ride the wave, Microsoft catching up and Yahoo heading south. Google even afforded to reach a new stock price all time high of $484.64 on 23 October, briefly surpassing $150 Billions for the first time! Remember, they acquired YouTube for $1.6B in stock... that's a dime.
I'm pretty in line with this view of the world as it reflects today's perception of who are the leaders in the on-line business. Here is a quote from AP on Monday supporting it:
"The third-quarter performance underscored the substantial advantage that Google has built over chief Internet rivals Yahoo Inc. and Microsoft Corp., leading most analysts to conclude that the company will continue to dominate the online advertising market while it explores other potentially lucrative opportunities." -- Michael Liedtke, AP Business Writer
But one should also keep in mind that very few players in this industry have the financial muscle to create and maintain huge architectures supporting Software as a Service (SaaS) delivery to the masses. We're talking $Billions fellow marketers, not VC money (sorry Netvibes fellows ;-) ).
Why should WE care? Well, if you only rely on search engine market shares to place your search marketing bets, the game is pretty simple: Google 49.2%, Yahoo 23.8%, MSN 9.6% according to Nielsen Netratings. Google market share surges even to more than 80% in some countries like France. The reason why we should care is Marketing 2.0 again. Search Advertising is powerful but not enough. Why would all these major players invest in Web 2.0 emerging companies otherwise? The question is for us to understand what are tomorrow's business models in a variety of industries like software, music, videos and what have you. If revenue is bound to come from on-line advertising in the future, it clearly means all other advertising form factors will decrease. Our marketing-mix, in a Marketing 2.0 era, will then significantly change and above all, marketing performance will be heavily impacted. To be digged.
Friday, October 20, 2006
It was interesting to understand what Microsoft offering and strategy was and if Web 2.0 was already matured enough to deliver concrete tactics. Marc Bresseel, Regional Sales Director MSN EMEA walked us through Microsoft offering and Anne Kirah, Senior Design Anthropologist which I recommend listening to, check out her keynote address video at Tech.Ed 06 in Sydney, shared with us what interactive marketing should pay attention to vis-à-vis on-line international audiences behaviors. This impressive and well organized push for Microsoft Digital Advertising Solutions (MDAS) is a clear signal and lead me to ask to myself: Hey Microsoft, are you becoming Googled? i.e. is advertising revenue going to become mainstream in Microsoft business model?
I'm not sure despite Marc referring to blogs, RSS and AJAX, in a typical technology centric view of the world, that Web 2.0 is yet at the core in MDAS, but we'll be watching.
Not only does Live initiative demonstrate the rising success of software as a service model, but MDAS could be one of the Microsoft answer to the burning question of what is the appropriate software business model in the future, as it is center stage with music and video for the majors for some time now.
Marketing 2.0 could then have a significant new role in these companies: carry revenue quota just like any other division. I'm sure a lot of us in the IT industry are going to pay a lot of attention to the advertising market revenue forecasts as of today. You can bet I will be sharing it here in Marketing 2.0 when I get some.
Tuesday, October 17, 2006
Well, all of this is true. Let's refer to Tim O'Reilly's definition of Web 2.0, as he coined the term back in Sept. 2005. In the Web 2.0 world, the web is a platform not a destination. Thus Tim elaborates with this Netscape vs. Google comparison to support his claim. Netscape flagship product was a web browser i.e. a desktop application, Google flagship product is a web service.
What really is interesting to us marketers about Web 2.0 is not the technology which has always been means to an end, but the social implication of opening up collaboration to all web users and among them your customers, partners, influencers, journalists and analysts. I was happy to read that Jay Adelson, Digg CEO, just thinks the same:
"To me Web 2.0 is not a technology revolution. It's rather users accepting the idea of collaborating."
You can refer to Jay's interview if you read french. Here it is.
Web 2.0 for us marketers is an acceleration of empowered customers and consumers two ways communicating with our brands and among themselves. Be sure to capture this inter-customer communication not to avoid growing negative buzz, as we highlighted here in Marketing 2.0 for Dell.
To me, Web 2.0 is the today's answer to the non effective advertising cloud addressing ad-educated populations. In a way, it drives us to being positioned properly and relevant to prospect audiences and to lead with transparency in our communication. This is another chapter of our Marketing 2.0 Manifesto.
Tuesday, October 10, 2006
"Our close partnership with the ad community is extremely important to us as we evolve Microsoft from a software company into the world's largest, most attractive provider of online media through MSN, Windows Live and adCenter," said Ballmer. "Ad-supported software services are an integral part of Microsoft's plans to give consumers access to a broader variety of digital media, whenever they want and on whatever device they prefer."
The debate about software as a service (SaaS) seems to be clearly closed and discussions seem to focus on when rather than if. The question is: what will happen to the $120 billion software revenue? Will it augment the advertising revenue or vanish?
Google realized this a long time ago and provided our industry a clear demonstration on how to succeed in that space. The latest Google acquisition, YouTube for $1.65 billion in stock, grabs more than 50% of the online video market on top of its own 11% i.e. 61% total. With more than 100 million videos played each day, Google now appear to be a solid Web 2.0 broadcaster. The largest national US networks are revisiting their advertising value proposition, bending more to a result oriented proposition than the usual message impression probably responding to the Internet capability.
Another question is whether advertising can be more than just allowing for free stuff. As a matter of fact a good friend of mine, Marc Leprat, started an interesting business recently called imagiin.com, where you can earn money - yes real dollars - if you agree to watch commercials. They've been introducing non intrusive Advertising On Demand, more relevant and more effective. Each minute devoted to watch ads will bring you back about 50 cents i.e. $30 an hour. It is already well regarded in the communication industry as imagiin.com made CB News, a major weekly publication in France about communication, cover page. I encourage you to go on imagiin.com and become a member today.
Thursday, October 05, 2006
First of all, let's do a reality check on the battery recall issue. It's been widening recently and Sony is really at the center of a communication crisis as now more than 7 million batteries are being recalled for replacement, according to the U.S. Consumer Product Safety Commission. The list of the winners are Dell with 4.2 million, Apple with 1.8 million, followed by Lenovo, Toshiba, Fujitsu, HP. Battery recall at Dell and Apple alone will cost more than $170 million. That's a pretty extreme case study for all of you interested in quality impact to the bottom line. If you want to read the latest about it just go here.
Coming back on Dell, they're handling the problem with this dedicated web site, and apparently trying to initiate a serious turnaround in their decline. What happened to their corporate blog One2one? Well first of all they've been changing the name to Direct2Dell for various reasons -- Dell explains it here -- that would give you a clue on how little prepared they were. By the way, they admire the One2one XXX site marketers SEO skills!
But the most interesting breaking news to me was the real backfire move from Michael Dell in a keynote at the Techdays on September 12. Michael is back and he's launching Dell 2.0. Here is a Direct2Dell quote about it:
"Michael also talked a bit about Dell 2.0. He launched our Dimension products yesterday, including our first two AMD products for consumer and small business customers." -- more on this here
It produced at least one comment from a shareholder that goes like this:
"Nevertheless, the public response has been a shrug -- with most commentary calling Dell 2.0 devoid of substance and the stock price remaining unmoved. In the absence, to-date, of many concrete components to Dell 2.0, the success of this "evolution" depends on the quality, creativity and discipline of management. Part of the public indifference is probably based on the unsatisfactory performance of Kevin Rollins and Michael Dell at Tech Day." -- more on this here, and Dell stock vs HP and Apple here.
I'm an optimistic and I like to focus on positive outcomes. I wish good luck to Dell for its Dell 2.0 venture but let's make sure, message to Michael Dell's staff, that Marketing 2.0 is not ignored anymore i.e. tell Kevin Rollins that customer satisfaction is more important than cost reduction to be a Hero at Dell.
Wednesday, October 04, 2006
As you can see the results are separated by offering type:
- products as books, PC or Travel, usually measuring direct impact on sales (lower response rate)
- lead generation for offering such as financial services or real-estate, more incline to measure leads received from soft or free offers (higher response rate)
But at the same time, B2B software firms -- dear to my heart -- are lacking effective SEO. Again this survey finds out that 28% of them did not optimize well enough to appear in the first page of organic ranking for search on core keywords to their business, no matter how big the brand was. You can read the MarketingSherpa full report for more insight.
Is it correlated to a slower than expected spend in outsourced SEO? Or lack of focus from our Marketing Executives on the topic? We know SEO must be tracked on a daily basis and adjusted on the fly to boost results.
More is to be said about SEO in Marketing 2.0 and I'll probably come back on this topic shortly with more. In the meantime, let's share our experience: feel free to post your own take on this in a comment right here on Marketing 2.0.