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dd:Can Google grow like Dell and Cisco?
SuperModels
Google is positioned to exploit the most profit-rich avenues of the digital world. But can it really surge the way Dell and Cisco did in their glory days?
By Jon D. Markman
In a storybook sequence reminiscent of the late 1990s, brokerage analysts have tripped over each other in recent weeks to announce higher and higher price targets for online search provider Google (GOOG, news, msgs). With the stock now trading above $290, the analysts -- who are essentially, let’s face it, just doing their job as salesmen -- vow that it’s heading for $310, $350 or better.
Brokerages have joined the groundswell for Google to exploit one of the singular curiosities of the psychology of the stock market: They know that the higher the price of a stock goes, the more famous it becomes and the more people seem to want it. It’s the opposite of the way that sensible people run the rest of their lives, in which lower prices for cars and clothes spark buying interest.
In a world that blurs information and entertainment, Google has become as much a celebrity as it is a company, and has attracted the usual adoring crowd.
This time, however, the sell side may have a point. As Google has cleverly given employees great freedom to create and release software on the fly, it has tapped into creativity that has satisfied a yearning among consumers for transparency in the value and availability of things. More importantly, at the same time it has found brilliant ways to help marketing partners monetize that yearning without appearing greedy. See the news
that affects your stocks.
Nice guys and the holy grail
Although it has veered on the edge of annoying the privacy hounds with its innovation of posting highly targeted ads within its free e-mail service, the counterculture-tinged company may have discovered the Web’s holy grail, as originally imagined by the hippie capitalists behind the pioneering service Netscape. Google is as profitable as eBay (EBAY, news, msgs), as ubiquitous as Yahoo! (YHOO, news, msgs) and as service-oriented as Amazon.com (AMZN, news, msgs), yet still comes across as a nice guy in a tie-died shirt.
Maybe nice guys do finish first. Google has positioned itself in some of the most profit-rich avenues of the digital world and become as essential to our experience of life and work as personal computers and networking were two decades ago. It is not overstating the case to suggest that Google, though only a year old as a public company, might ultimately fulfill investors’ dreams to find “another” Dell (DELL, news, msgs) or Cisco Systems (CSCO, news, msgs) -- and possibly in record time.
This is much harder than it looks, and it does not look particularly easy. To be another Dell or Cisco, from now through the next 10 years it must achieve annualized net income growth of 20%. While its boosters in the brokerage community seem to think that is a piece of cake, due to its proven ability to roll out one well-imagined product after another, investors should keep in mind that many other outfits have likewise been crowned by the securities salesmen as the next Dell or Cisco, and come up short.
Online storage -- forever
The big difference in this case is that part of the genius of Google is its not-so-secret plan to become the online storage unit for virtually our entire lives, and perhaps well beyond the grave. The method for this is its free e-mail service, called Gmail, which has had a powerful impact even though it has not been officially released to the public. Still in widespread “beta,” Gmail currently provides two gigabytes of e-mail space to users free, and it has promised to add another gigabyte annually on the anniversary of its release. That is 200 times more storage than computers provided Dell customers in the early 1990s ramp-up of its business.
As you probably realize by now, pigeonholing Gmail as an e-mail service obscures the fact that, at a time that almost anything can be instantly sent to oneself or friends through online mail over broadband connections, it actually becomes the central repository of every important thought, document, photo or song that one has ever harbored or shared electronically. Combined with its easy search functionality, this has made Gmail a sort of essential “life cache” for its hundreds of thousands of early users. And this is subtly but profoundly monetized by the company with text ads so well-targeted via advanced text-parsing algorithms that they seem more like helpful hints than obnoxious intrusions.
To grasp the power of this business model, consider it in the context of that tired old phrase about the Internet being an information superhighway. As Google expands Gmail with personalized companion services -- such as maps, mobile-location guides and customized Web portals -- it is swiftly becoming the single most popular roadway in the world on which major corporate advertisers wish to post their billboards. This has put it in the sweet spot of the virtuous cycle for any media company, as user growth and usage growth have translated into increasingly higher advertising rates. The rise in revenues has fueled the company’s kitty for research and development, which has in turn fueled further engineering advances.
It is better to be lucky than good, and if you’re both -- watch out. Google’s targeted advertising strategy has come along at a time when global advertisers have finally decided, after several years of waiting and watching, that they need to shift a very significant portion of their marketing strategy onto the Web. And it has also come along at a time when online sales have exited launch phase and are well into blastoff. The industry says overall online sales in May were up 45% over a year ago and now regularly hit $1.5 billion per week.
Ad money flows in
The path to those riches for Google is only partly through its retail-sales comparison search engine, called Froogle. It’s primarily through the increase in prices advertisers are willing to pay to put their name next to the results of consumers’ searches on Google itself. According to a report by Fathom Online, as reported by an analyst at independent investment research firm First Global, keyword prices are up more than 9% this year above the Christmas holiday’s seasonally strong levels, to $1.75 per word. That is particularly significant, as a study by another industry research firm shows that most online buyers do a generic search for a product via a search engine before narrowing down their focus (e.g. “running shoes”, not “Adidas”). Each time one of those results is clicked on Google, it rings the cash register.
With ad budgets tight and global economic growth slowing, that kind of growth has drawn marketing money away from television, radio and newspapers, which is why traditional media giants such as Viacom (VIA, news, msgs), Clear Channel Communications (CCU, news, msgs) and Tribune (TRB, news, msgs) are struggling. Next to be affected are local Yellow Pages and smaller newspapers, as Google’s new “local search” engine is expected to generate as much as $4 billion in annual revenues by 2009.
This is one street that goes both ways. Just as marketers have shifted a significant portion of their ad purchases from traditional media to Google keywords, institutional investors have likewise shifted a big portion of their stock purchases to Google shares. At $80 billion, the company currently has a market value that’s half again larger than Clear Channel, Tribune, News Corp. (NWS, news, msgs) and The Washington Post (WPO, news, msgs) combined.
Now this is where the math gets tricky for new investors. For while it’s true that Google has performed extremely well fundamentally and shows no signs of slowing down, at a comparable period in their histories Cisco and Dell were much smaller companies. CreditSights pointed out in a note not too long ago that when those two companies had passed the threshold of $750 million in net income in a calendar year, as Google did in December 2005, they had had market caps 1.6 times and 3 times the average S&P 500 ($INX) technology stock at the time. Google’s market cap is now about 7.5 times the average S&P 500 tech stock. Moreover, Dell’s forward price/earnings multiple at that milestone was 9x, and Cisco’s was 16x. Google’s is more than 60x.
Google’s current valuation and future price targets are high because its past has been sterling -- capturing a stunning 57% of the entire search-engine market in 2004, by credible estimates -- and expectations are also high. It is at the very center of the most important trend to hit the modern lifestyle since the PC, and shows every sign of gaining ground. Dell and Cisco managed to avoid serious stumbles and defy their many skeptics at this stage in their histories, and make thousands of late-coming shareholders very wealthy.
Google could very well do the same -- though, because even more is expected of it than of its elders, its margin for error is much thinner. Go ahead and buy now if you believe, but beware that at these prices its most important search will be for the Fountain of Youth, for it must keep running at full speed and never, ever slow down to fulfill all those promises.
Fine Print
To see all the cool stuff that Google engineers have cooking, go to its Labs Web site. One is a MyMSN-like customized home page. Check it out here. ... There are lots of interesting blogs that follow Google. Here is its own.
Jon D. Markman is publisher of StockTactics Advisor, an independent weekly investment newsletter, as well as senior strategist and portfolio manager at Greenbook Investment Management. While he cannot provide personalized investment advice or recommendations, he welcomes column critiques and comments at jon.markman@gmail.com; put COMMENT in the subject line. At the time of publication, he held no positions in stocks mentioned in this column.
http://moneycentral.msn.com/content/P116163.asp?Printer
dd: Googles Own Blog http://googleblog.blogspot.com/
ot tangent and dd: the more I read and learn, the less it is I really know it seems (except for the fact that having my position here with neom will be one of the smartest decisions that I ever made I think, lol)....anyway, this paperclick is interesting because imo it will in effect provide for a marketers dream, true transparency for product awareness(as P&G Brand managers and others imowould say)by utilizing a "key enabler" of their propritary tech, the bridge, I mean raw thoughts here but any marketer or anyone for that matter can target pychographically (and as Mr. Schmidt mentioned in that interview I posted last)and as the writer points out below, iow, wiht paperclick bridge (pysical world to internet world remote) "...Get access to as much psychographic data as you possibly can, and try to crawl into their heads. Then your media plans, and the creative that is tied to them, will be more effective..."I don't know, maybe I need a break from all thsi dd, lol....signing off for a while...HOLD EM TIGHT AND CLOSE TO THE VEST!!!!
Wednesday, June 8, 2005
Yes, But What Are They Thinking?
By Cory Treffiletti
Many things are changing as the ad industry shifts toward a more accountable model, but one of the most overlooked and interesting changes is happening in the media planning arena. The most important thing, which we tend to overlook, is that the industry is shifting away from a demographics targeting-based model toward a psychographics-based model.
In the "old days" you focused your planning on an initial demographic target, such as men 18-24 years of age, with HHI $35k-$50k, single, etc. These breakdowns of demographic data would tend to lump together groups of "like-minded" individuals. However, in today's world--where information and trends spread like wildfire through digital media--we are quickly creating a global society where traditional barriers such as race, age, and region are no longer important. What happens as a result of this globalization is that traditionally disparate demographics are latching onto similar trends and ideas, and groups of "like-minded" individuals are truly organized based on their minds--their psychographic information.
For proof that psychographics are becoming more important, we need not look far. At the most recent iMedia Summit, a highly informative presentation broke down the Urban Audience into seven unique segments that detailed subtle differences within each group. Some segments skewed slightly younger and were more of an influencer audience, while others may have skewed to the same age range--but based on geographic data, they may have been slightly later in adopting various trends. Companies like Claritas offer excellent insight into similar audience breakdowns with their Prizm Cluster product. These Clusters group various segments of society together based on the types of music they listen to and the types of clothing they buy.
The reason that psychographics are becoming more important than demographic details is that they focus on behavior. Behavior is what defines an effective campaign. To develop an effective campaign, you must know how the consumer interacts with your messages when they see them, and in what context they see them. You need to convey a message that is relevant to them at any given moment, or will be able to influence their decisions at a later date. Demographics assume that everyone in the group is of the same mindset, but this is too much of an assumption to be effective. You need to know and you need to be flexible enough to react based on their behavior. Demographics are too rigid, and do not take into account the intricacies of human nature.
Think about it... are all 30-year-old men the same? Are all 30-year-old men in New York City the same? Are all 30-year-old men in San Francisco the same? Of course not. Within New York or San Francisco, you have a wide variety of 30-year-old men. Some are career-focused, while some are free spirits. Some are into hip hop, while some are into garage rock or electronica. Some are gamblers, while some are not. The typical stereotypes that might be associated with demographics fall to the wayside when information can be shared in a global community and your personal interests can be affected by a wider range of inputs than what you can see in your immediate vicinity.
What this means for media planners and communications planners is that you need to look much deeper than demographics in order to develop an effective campaign. You need to get into the mind of your audience and hypothesize about their patterns of behavior. You need to understand what they are thinking and which outside factors may affect their decision making from day to day. This also means that your plans need to be dynamic, and must be susceptible to change. The audience is becoming more fickle and reactive to the world around them. Get access to as much psychographic data as you possibly can, and try to crawl into their heads. Then your media plans, and the creative that is tied to them, will be more effective.
Good luck--it ain't gonna be easy!
Cory Treffiletti is the senior vice president, managing director at Carat Interactive San Francisco.
dd: About Google's Eric Schmidt
Google, Silicon Valley's hottest private company, is different --and successful. Eric Schmidt, the company's CEO, tells AlwaysOn why, in his opinion, this is the case. This the first part of the interview, part two was posted Friday, and part three and part four are now also online.
NewsTeam / AO [AlwaysOn] / POSTED: 04.22.03 @07:11
AlwaysOn: We hear that Google is run in an unusual way.
Schmidt: It really is. Virtually all of the strategic initiatives and product initiatives are either driven by the two founders or by very small innovative technical teams. We don’t have a traditional strategy process, planning process like you’d find in traditional technical companies. It allows Google to innovate very, very quickly, which I think is a real strength of the company.
AlwaysOn: Was that the thinking behind your recent acquisition of Pyra Labs?
Schmidt: In this particular case, one of Google’s founders, Sergey, did a lot of research on who the leaders in this space were, with a special emphasis on tools and end-user experience, which is what Google is really very focused around. It became very obvious that Pyra Labs was the leader, and so we have a deal team, which simply went up and said “Would you like to do this?” It seemed pretty obvious. They met the technical team. It was a relatively routine decision. It was very consistent with how the world and Google all benefit with more information on the Web more broadly accessible, and this is a way to advance that.
AlwaysOn: But you bought blogging software and a blogging search engine with a million registered users, as far as I understand.
Schmidt: What we really bought was a team. With these little companies, the asset that you get is the knowledge in the people’s heads, and that’s what we care about. They will be enormously creative in the next few years.
AlwaysOn: Did the blogging sector get to a certain critical mass where you felt Google had to pay attention to it?
Schmidt: I think it was more a question of the right opportunity came along. We’re extremely interested in getting more information published on the Web in any kind. A relatively straightforward analysis says that a lot of the digital authoring empowerment in people’s hands is at a stage where people do not appreciate how powerful this is. I’m not just talking about computers. I’m talking about digital cameras and those types of things.
I believe that this notion of self-publishing, which is what Blogger and blogging are really about, is the next big wave of human communication. The last big wave was Web activity. Before that one it was e-mail. Instant messaging was an extension of e-mail, real-time e-mail.
The next step in general for information is the self-publishing part. If somebody takes the time to write something, having Google understand that is very important to that person. So if you view the world as one person at a time, getting that person, that author to understand that we value, we index, we search, and we care about their information is a very important part of our strategy.
AlwaysOn: Let’s talk about this second chapter of the Internet. My view is that in the first chapter, as media businesses we reached out and found people. But in the second chapter, which I call the eBay-ization of the business model, there’s this awareness that, hey, Metcalfe’s Law is two-way, and that’s much more interesting than one-way.
Schmidt: Ten years ago, before the Mosaic/Netscape phenomenon, the culture in our country really felt very uniform. It felt like everybody was talking about the same things. On a day-to-day basis you didn’t hear a lot of wildly differing views from your own, because you worked with the same people and you read the same stuff and you were busy working on whatever problem you had.
When the Internet publicity began, I remember being struck by how much the world was not the way we thought it was, that there was infinite variation in how people viewed the world. People are amazingly surprised to find out that an awful lot of people think that they’re idiots, whether it is the Flat Earth Society or some other variant. Back then, everybody talked about how the Internet was going to change media, because it would bring everybody together.
But the Internet is really about highly specialized information, highly specialized targeting.
For example, we grew up with this notion of the three major broadcast networks. We all got news at the same time. We’re all still reeling from the fact that there are not homogeneous news sources anymore, that the magazine and publishing industries are becoming more variegated, more distributed, and smaller and more targeted.
The Internet, in particular what’s happening at Google now, is the extreme of this. This is not necessarily all good, but it’s clear that if you extrapolate this out, that there will be a million weblogs of communities that are very distinct and very strong. And they don’t favor one political party or one particular view of life. And the creationists will have theirs and the people who are non-creationists will have theirs. Every group will find people who are either simpatico or players. There will be thousands of those [communities].
My argument ten years ago was that the Internet was created to provide enough fodder for people to get Ph.D.s in anthropology again. Because all the previous Ph.D.s have been written, they have studied every known society. So we just invented a thousand more. I think it is very consistent for Google to try to be a way for people to see all this information in its many forms, not all of which will be acceptable to everyone. It has to do with the combination of empowerment from self-publishing and the sense that there are many, many more viewpoints than we are aware of.
AlwaysOn: You said that it isn’t all good….
Schmidt: Well, people are surprised to find out that there’s evil in the world. On a day-to-day basis I don’t encounter evil -- I work with nice people and I live in a perfectly pleasant environment, but in fact there’s plenty of evil in the world. And one person’s definition of evil is another person’s different definition.
AlwaysOn: When you think about it, Al Qaeda created a cyber-nation. They’re in lots of countries and it’s said they communicate with each other by embedding secret messages in different websites.
Schmidt: And there is at least one criminal on the Internet as we’re speaking, and at least one criminal pedophile. Why? Because they existed before the Internet existed. We need to find ways to prevent these bad things from occurring, but the fact that they exist [on the Internet] is not an indictment on the total model.
In many ways, the Internet allows you to target bad things and decide what you want to do with them. I believe that these issues around ‘good’ and ‘bad’ will become the defining issues of how information is accessed. We have a tradition of free speech in our country. There are exceptions that are applied with which we’re all familiar. Other countries have different traditions. Every country is going to face this issue, independently of Google.
AlwaysOn: Like that bit of a challenge the company had a few months back with China?
Schmidt: Well, Google has taken the position that we will not filter answers. And in the case of the Chinese government, they shut off access to Google and then they turned it back on a few weeks later. In my view that is a testament to how important access to this information is to China. In other words, speaking for them not for me, although from their perspective it’s not a perfect collection of information, but the sum of the value of access to the information was that important, given that China is growing so quickly and is so focused on technology adoption.
About Google's Schmidt - Part 2
Google, Silicon Valley's hottest private company, is different—and successful. Eric Schmidt, the company's CEO, tells AlwaysOn why, in his opinion, this is the case. This is part two of the interview. In part one, Mr. Schmidt talked about the acquisition of Pyra Labs, and how micropublishing and blogging communities are changing the online world. In part three Google's revenue streams are discussed. In part four Mr. Schmidt gives an update of his views on Moore's Law.
NewsTeam / AO [AlwaysOn] / POSTED: 04.24.03 @07:28
AlwaysOn: We were talking about the need to find ways to prevent bad things from happening, and how the Internet has made it easier to find specialized information and communities, both ‘bad’ and ‘good.’
Schmidt: Google makes it easier to discover these things that are going on. But these behaviors have been going on for a long time.
AlwaysOn: But now they’re more easily identified?
Schmidt: They’re more easily identified and tracked. And in theory, if they’re really evil, they’re more easily intercepted as well.
AlwaysOn: So more and more real life is going to be documented digitally either through activity online, or in the case of Washington D.C., we’ll have digital cameras on every corner. Extrapolating here, how do you feel about that?
Schmidt: Well I have a personal political view, which is probably different from yours.
AlwaysOn: Oh come on. You’re the most liberal guy I know. Let’s hear it.
Schmidt: Hmmmm, since this is a Google interview….
AlwaysOn: No, it’s an Eric interview.
Schmidt: Well, I think the evidence is that more information is almost always the right answer to every question. My view is that the cure to the problem of free speech is more free speech, not less. And Google exists in order to further that outcome, which is more communication.
AlwaysOn: So you’re speaking like a conservative.
Schmidt: Jeffersonian.
AlwaysOn: A true liberal, in the original sense?
Schmidt: In the original sense, that’s correct.
AlwaysOn: French revolutionary sense….
Schmidt: My personal view is that most organizations, whether they’re governments or business or universities, get to a point where a certain kind of information hiding goes on. People withhold information.
And my personal view is that the transparency of information, though messy, results in a better society. Google is organized to make that much easier. This notion of for example individuals who decide to track their entire personal lives [online] will bear a penalty when that information is misused from their perspective, and it’s a choice that they face.
Each individual in this society will have a choice of anonymity versus full disclosure. I think that’s a fine choice, which I think people need to get themselves educated about.
AlwaysOn: Conceivably there’ll be a point at which the cops could say that someone is a suspect in this murder case and they’ll push a button to print out a report and they’ll have this guy at 7/11 and they’ll see when he was on his computer and when he was on the subway….
Schmidt: I think there will be many, many legal and judicial challenges on the question of essentially unintended surveillance, which is what you’re asking about. In the 1960s and 70s we went through all sort of probable cause doctrines and the Miranda decision. So there will be some new definition of probable cause.
But I think this will ultimately be a political not a technical outcome. The technology allows great things, and one of the consequences of the technology allowing great things is that you can do things on a scale you could never do before.
I feel that the majority of those things are not a good outcome for society, because it’s the boundary between a free society and a police state. Where that line gets drawn is the subject of infinite debate, but the underlying technology allows a tremendous amount of targeting.
AlwaysOn: Here’s the off-the-record question—this is funny. After you guys acquired Pyra Labs, somebody sent me a column from some British writer, in which the guy posited that Google places a master cookie on your computer and develops a search profile. So what’s your off-the-record answer?
Schmidt: No, I can give you an on-the-record answer. We don’t do that. In this case, which I’m familiar with, people get confused over what Google knows about people. We actually know very little. We don’t know anything about you. We know your IP address but your IP address can be shared. This is all disclosed in great detail as you read into our website.
AlwaysOn: This writer guy supposedly had a bunch of commentary so there was a weblog. Did you look at that? And people were saying, "Oh, I’m using a new search engine now."
Schmidt: This is an example of what the right response is to that kind of thing. The correct response is not “This guy is an idiot for publishing that.” The correct response is to say that the solution to free speech is more free speech.
In that particular case, we actually did correct it, and you’ll see if you’ll follow it, there were a series of additional articles that sort of got the message out. Part of what Google is about is we try to stay on the ‘don’t be evil’ side of these issues.
And so we have a tremendous debate, because Google has the ability to do many things like what you described, and in every case we decided not to. Because we don’t think it would benefit our end-users. And I should be very clear: We will not do that. That’s a commitment.
These are bad business choices. The correct business choice is to preserve the anonymity and activity of the end-user, and let them make the decision as to what information they want to reveal. You get into trouble when you take people’s things which they expect to be private and make them public. If people choose to give away all the rights, then that’s a separate issue, but they need to do so knowingly.
AlwaysOn: They have to opt-out, though.
Schmidt: Well, this is where opt-out is a problem. So our view is we just don’t do it. Because the value of the brand and the value of the Google experience has to be a trusted one.
AlwaysOn: Yes.
Schmidt: I’m not sure if I’m giving a strong enough answer. We don’t do this. Is that clear enough? We don’t do it and we’re not going to do it because it’s over the line.
AlwaysOn: Yes, that’s very clear.
Schmidt: I’m happy to have a general conversation about it, but Google is not going to do it.
AlwaysOn: Back to this other point about whether to opt-in or opt-out. One interesting approach to this is that people begin to think of their information as currency. For example, I have my name, my address, my salary information, whatever, this might be worth something. It is certainly worth something to Google or to eBay in some way, shape, or form. How can people capitalize on that? How do they make a more efficient market to say “Okay, I will knowingly give you this piece of information about myself because I get this other thing in return”? I think that’s not quite clear.
Schmidt: These models are still evolving.
AlwaysOn: Yes, it’s not as efficient a market in that space.
Schmidt: We’re having a business conversation, but Google is not really about the business side of it. What Google is really about is promoting the access to information in all forms. And that is the design center of the company. We happen to monetize that with our revenue streams, and the reason the revenue is useful is that it allows us to build more hardware, do more searches, buy Blogger, those kinds of things. But the design centers around the user experience.
AlwaysOn: At the risk of hyperbole, is this a little bit like religion…? Religion sort of works that way, promoting an idea or a concept. They have to keep it going as a community in some form as well.
Schmidt: But the people we hire at Google come here because they want to change the world. They believe in the kind of principle that I’m describing, they want to participate in the next build-out of Internet access and information.
About Google's Schmidt - Part 3
Google, Silicon Valley's hottest private company, is different—and successful. Eric Schmidt, the company's CEO, tells AlwaysOn why, in his opinion, this is the case. This is part three of the interview. In part one, Mr. Schmidt talked about Pyra Labs, micropublishing, and blogging. In part two, he spoke about online privacy. In part four, which is now online, Mr. Schmidt gives an update of his views on Moore's Law.
NewsTeam / AO [AlwaysOn] / POSTED: 04.28.03 @03:26
AlwaysOn: Can you tell us about Google’s revenue model and initiatives?
Schmidt: The great thing about being a private company is that we don’t need to discuss any of those at all.
AlwaysOn: I know that, but I’m not asking how much your revenue is—I’m asking if you could just summarize your categories of revenue.
Schmidt: Sure, that would be a fine and non-threatening question. We make money from a number of things. We power the search vendors, so for example we power Yahoo and AOL, if you go to their site and do whatever you’re doing, Google search shows up as part of that. In some cases they show the Google brand and in some cases they bury our technology inside something they’re doing, and that’s fine. They’re the customer, that’s entirely their choice.
-- ADVERTISEMENT --
AlwaysOn: What else?
Schmidt: Another category of revenue comes from advertising. There Google has both a sales force as well as self-service advertising, generally known as AdWords.
We get another set of revenue from taking those ads and essentially running them on other people’s sites, whether they’re a search partner or not. This gets confusing. But an example would be Ask Jeeves. It is a competitor in the search phase and a partner on the revenue ad side—and a very good one, I might add. We’re ecstatic about that deal.
So in some cases the customer is both a search partner and an advertising partner, in some cases it’s just a search partner, and in some cases it’s just an advertising partner.
Then there are further revenue streams which have to do with internal search. Cisco uses Google search for their internal information. We also brought out a product called Google Search Appliance, which is a yellow box with which you can do Google search just within your company. It has nothing to do with Web search.
And we recently announced technology which will take the advertisements that are being run on search pages, but also allows us to run on non-search pages.
AlwaysOn: Going forward, how do you stay on a revenue ramp?
Schmidt: Let me talk primarily about advertising because it’s easier to conceptualize, though most deals are a combination of search and advertising. These models are beautiful things. The value to the advertiser is so great, that we were able to withstand this recent advertising winter.
This is because we proved the measurability of our system to advertisers. Advertisers are paying for clicks. They’re paying for the closest thing to conversions, which is what advertisers ultimately care about, they’re advertising some sort of product. We can show a very direct linkage. So this pay-for-performance has really been very successful for us.
I don’t know how big it can get, but it could be a much, much larger part of the industry overall.
AlwaysOn: What about your international market?
Schmidt: More than half of Google’s queries come from outside the United States. The international markets for search are growing faster than the US markets, because they are sort of catching up with Internet penetration. There’s every reason to believe that the model that we built in the United States works in the Western world.
For example, Google introduced the service in Japan, which had never seen pay-for-performance advertising and we were the first in that country to do it. Six months later it’s a booming business for us. These are credit card-based, very simple, very low-barrier-to-entry models. Our target markets are basically Western Europe, Japan, Australia—the usual suspects because that’s where the majority of the market is.
The simple analysis says that just taking the US revenue models and applying them outside the country is a tremendous increase in revenue for us. There’s no good reason why in Germany the demographics and activity and business model should be any different than in the US.
This is part three of AlwaysOn’s interview with Eric Schmidt, CEO of Google. Part one and part two were posted last week. The final installment is here.
Google's Schmidt Takes On Moore's Law
This is the final of a four-part interview series with Google CEO, Eric Schmidt. In part one Mr. Schmidt talked about micropublishing and Pyra Labs. In part two he spoke about online privacy. Part three mentions Google's revenue streams.
NewsTeam / AO [AlwaysOn] / POSTED: 05.02.03 @09:06
AlwaysOn: You’ve also been getting attention about statements you made regarding Moore’s Law, which we blogged on AlwaysOn and got some interesting commentary on. Do you think that Mike Malone and the Red Herring article properly reflected your position?
Schmidt: Let me make the argument that I made six months ago, and then let’s see what’s wrong with it. The argument from then goes something like this: In the first place, we are all technology optimists. Everybody here believes technology is going to be great, that’s not even a question here. The second thing is that the [technology] industry has become completely demand-limited, not supply-limited. Because of our manufacturing capability and tremendous innovation there, we can build as many computers and so forth as anybody wants. There’s never a backlog.
The third is that because Moore’s Law is running as fast as it is, we have a fundamental problem with revenue growth in our industry. It goes roughly like this. If you assume no innovation, then the product improves in price-performance by a factor of two every 18 months. So in theory, either your revenue drops by half or you have to sell twice as many computers to get the same revenue. It’s a form of commodity business.
AlwaysOn: But that hasn’t quite happened. If the tech industry were a commodity business everyone would have gotten out of it already, surely?
Schmidt: This has been true for a long time, but we got around this. We brought out new versions of Windows, which needed more PCs and more computers, or we brought out networking. The joke was that “hardware giveth and software taketh away”—remember that whole dialogue over the last ten years. So there would be demand drivers and these demand drivers were in two categories. One category was new applications, the Internet being the most recent example, media and so forth. The other category was international expansion.
Looking at it statistically, if you took current applications within the US market, which is roughly half of the total market, you don’t get any growth. You might get negative growth. But you make it up because you have new applications, new development, and so on. This is a very difficult curve to ride over a 30-year period. We’re now in a period where there is no obvious next killer app—people have everything they need because they pre-bought it because of Y2K. Furthermore, the next obvious killer app is in the media space, and that is driven by digital rights management issues.
So for example, if Hollywood wins and our side of the industry completely loses, then there will be no access to this information, this media, and therefore there will be no growth in high tech. If we win and Hollywood completely loses, there’d be no new media produced. So there’s a balance of interests. It’s a genuine disconnect between the way the media businesses are run and the way high tech needs new content. We haven’t found yet where that balance is, that too will be litigated. There will be laws and judges and products to solve that. This will take a very long time.
AlwaysOn: With more and more content becoming available now, that creates more need for me to have devices and computers around. But I don’t worry about whether or not I need to upgrade this stuff to the next level because I need it to be more powerful. I do think we’ll still be on an innovation curve. It just won’t be emphasized by Moore’s Law, or by power. Maybe it will be driven by access to content.
Schmidt: That’s a good way of articulating it. I think it’s important to remember that the networking boom is also a result of Moore’s Law. The reason the switches got faster is because of Moore’s Law. We always focus on Moore’s Law as being about Intel chips because of Gordon Moore being at Intel. But our having these incredible spread-spectrum wireless radios is fundamentally a consequence of physicists plus Moore’s Law. The same things are going on, we just have to redefine where Moore’s Law applies.
AlwaysOn: So how does Moore’s Law apply to the technology industry’s market woes?
Schmidt: The problem is that whenever I think of my earlier argument, I’m pretty depressed about it, because it says that basically there will never be a high tech recovery.
AlwaysOn: ‘Never’ seems a bit too far away….
Schmidt: Well, what’s going to draw in growth? My assertion is that the only thing that actually drives aggregate growth in high tech, is an expansion of information access—expansion from a specialized market to a generalized market.
This argument is pretty compelling. If you go through each of the [technology] waves, the key characteristic was that a specialized thing became generalized. In the Sun workstation case it was very specialized design systems becoming workstations for general use. In PCs it was desktop productivity. With the Web it was access to information that was previously published but not generally accessible. And so forth. Let’s look at markets today that have that capability. One that’s clear to me is roaming Wi-Fi networks. Roaming Wi-Fi networks clearly change information access in a fundamental way. So that will be a major growth driver.
AlwaysOn: On the AlwaysOn Network we argue that wireless is the killer app for the next generation, because basically there are over 100 million PCs shipped a year. And in China there are 5 million new mobile phone users a month. So maybe people will get onto the Internet through very low-cost devices, which continues throughout the Web surfer market, then they get dependent on the Internet and as they make money it drives them to buy PCs.
Schmidt: My current view of the industry is that the assertions I made at the beginning are roughly correct, and that they are true because of the nature of innovation in high tech. The physicists are busy doing their maneuver [to keep increasing chip density], and it’s not going to stop until 2015 or past that. So I think that the only way to get high tech to boom, as opposed to just sitting here and having everybody be miserable, is to focus on this information expansion argument.
In this context, it clearly favors the Google argument, because Google is about information expansion. It clearly favors bloggers, and the wireless people. Now, as an industry, let’s go find five other markets for which that’s true. And let’s get everybody prioritized around what those are. Until then, we’re all going to be sitting around with low stock prices and lay-offs and people generally complaining.
AlwaysOn: So to get high tech to boom, where are these new markets going to come from? I’m not sure I see the big players lining up to figure out what’s hot, what fits with your model of information expansion….
Schmidt: There’s a simple analysis which goes something like this. Where are jobs created in our society? Small companies and entrepreneurs. Where is economic growth driven in our society? Small companies and entrepreneurs. What has just occurred in the last two, three years? The barrier to entry for a small business entrepreneur has dropped by an order of magnitude or more. And we refuse to acknowledge how profound this change is. Because we’re still focused on Fortune 500 companies, the Fortune 1000 companies. But if you look at Google’s advertising, there’s zillions of companies there you never heard of, because they consist of Bob. And Bob is a hell of a decision-maker, he’s a great customer, and he’s very, very focused on one thing. When he takes a vacation, there’s a problem.
We forget that the engine of growth in the economy is from the small. Earlier we talked about China. Where is the engine of growth? It’s coming from the small entrepreneur, and this is true not just in the US. What happens, in our society we get so excited about bigness, when we should celebrate diversity and the number of new players, which just in and of itself creates a diversity of opportunity.
That cycle has begun; there are plenty of examples in non-high tech markets. In the media industries, the cost of digital editing studios has dropped to $2000. So there’s an infinite number of Steven Spielberg clones whose barrier to entry is much lower. That’s a serious change in the sense of creativity and impact on society, which will play out for many, many years ahead.
AlwaysOn: For me, Wave Two of the AlwaysOn Network will be video journalism. I want to do my own “From the Streets of Silicon Valley/Market Wrap” for 12 minutes. I was talking to Roger Ailes of Fox. He said it costs $1.5 billion just to bust into the cable news network business today. But there are going to be zillions of guys like AlwaysOn. I look at it as a great opportunity.
Schmidt: So where is the revenue growth going to come from in the industry? From the Fortune 1000 to the Fortune 10,000—or maybe it will be the Fortune 10,000 to the Fortune 50,000. Figuring out and understanding how to reach them, how to communicate with them, how to work with them will turn out to be key. And it will all be enabled by virtue of this expansion of access to information.
This is the fourth and last part of this AlwaysOn interview with Eric Schmidt, CEO of Google. Part one and part two were posted last week. Part three was posted earlier this week.
Bonus Interview: What Eric Schmidt Found at Google
Says the CEO: "Innovation comes from invention, which you cannot schedule. That's the secret"
http://www.businessweek.com/magazine/content/04_18/b3881011_mz001.htm
WiFi dd: Confusion over next generation Wi-Fi
Tuesday, June 7, 2005 Posted: 6:33 AM EDT (1033 GMT)
(sog comment ps, not to be confused wiht WiMax, lol)
Wi-Fi will soon be able to carry high-definition television streams and Internet phone calls.
http://www.cnn.com/2005/TECH/06/07/wireless.networks.ap/index.html
SAN JOSE, California (AP) -- The technology behind wireless data networks in homes and businesses is on the verge of a makeover that promises to fix long-standing complaints of spotty coverage, flaky connections and inconsistent speeds.
The next generation of Wi-Fi will be so powerful that it's expected to be capable of carrying everything from Internet phone calls and music to high-definition television streams over the airwaves without a hiccup.
But it may be a while before we get to enjoy the full benefits of wireless communication.
The standard technically known as 802.11n does not exist yet and the final 802.11n specifications aren't expected to receive an official nod until late next year at the earliest.
But that has not stopped the makers of access points, networking cards and other wireless gear from launching a parade of products that claim the benefits and even the underlying technologies of the still-to-be-defined 802.11n.
The situation is setting a new standard for market confusion -- even in an industry that plasters its boxes with claims of unobtainable speeds, fuzzy math and a dizzying collection of acronyms.
Some products are labeled "Pre N," which some believe might lead consumers to think the equipment is upgradeable to actual 802.11n.
"It's misleading the poor consumers," said Ken Dulaney, an analyst at the research firm Gartner Inc.
"They walk into these technology emporiums and they're just snowed under by all this stuff that doesn't mean anything."
Meanwhile, equipment and chip makers are accusing each other of stealing names, breaking standards and causing interference with existing Wi-Fi networks.
The companies also report that rivals' gear doesn't work well with equipment based on existing standards -- though independent reviews indicate interoperability at least in slower modes.
The Wi-Fi Alliance, an industry group that certifies wireless products to ensure they work together, refuses to review any products for 802.11n interoperability until there's actually a standard approved by the Institute of Electrical and Electronics Engineers.
"We just feel that there are too many moving parts," said Frank Hanzlik, the alliance's managing director.
Currently, two draft proposals are battling it out before the IEEE. At a meeting last month in Australia, one of the proposals failed to get enough votes to become the draft standard.
Much of the controversy surrounds an advance called MIMO, an acronym for "Multiple Input, Multiple Output," which refers to the use of several antennas to improve overall wireless performance. It's a major part of both 802.11n proposals under consideration.
In that definition, multiple antennas and radios are used to send different streams simultaneously on the same data channel. At the receiving end, antennas pick up the signal, which is then deciphered. The result is an increase in range and data rate.
The technology was pioneered by the Palo Alto startup Airgo Networks, which now supplies the chips for the latest equipment from Cisco Systems' Linksys division and Belkin among others.
Airgo's CEO, Greg Raleigh, wrote papers describing it as far back as the mid-1990s while a student at Stanford University. But now, he says other companies are trying to derail his company's momentum and confuse consumers by using MIMO to describe other technologies.
"There's been a lot of impostor technology that's piggybacked on the MIMO bandwagon," he said.
Atheros Communications, a larger maker of wireless networking chips, uses a much broader definition.
"What (MIMO) refers to is any wireless system that has multiple antennas at both ends of the connection," said Craig Barratt, Atheros' chief executive. "The way in which those antennas can be used is quite varied."
Atheros' MIMO, found in some D-Link Corp. gear, extends the range of a wireless signal by transmitting the same stream of data over multiple antennas. Video54's flavor also uses multiple antennas but relies on software to instantly alter their configuration to improve the signal.
Both companies defend their usage of MIMO and bristle at being called impostors.
"Their accusation is so ridiculous that it's not worth even fighting," said Video54 CEO Selina Lo. "MIMO started in the research community way before Greg was even involved."
Video54's first customer is Netgear, which also sells business-class equipment based on Airgo's chip. For consumers, though, it's offering Video54 combined with Atheros chips in a product line it calls RangeMax. One reason: it's cheaper.
Airgo is "very envious of our business with RangeMax," said Vivek Pathela, head of Netgear's consumer product management and marketing. "They're getting furious because they're seeing their costs are so much higher. We can be a lot more competitive."
Airgo's Raleigh points out that RangeMax, in its fastest mode, uses a speed-boosting technology that bonds data channels.
By contrast, Airgo's single-channel approach makes more efficient use of the airwaves. As a result, Airgo's "True MIMO" -- a term the company has trademarked -- won't affect neighbors' networks, said Raleigh.
In any event, Raleigh contends, the debate will quickly become moot. That's because his flavor of MIMO is capable of moving beyond today's theoretical maximum of 108 megabits per second -- while "impostors" will be unable to boost their performance any further.
Gartner's Dulaney says most consumers are best served by waiting for 802.11n's official certification.
At that point, gear from different manufacturers will inter-operate even in the fastest modes -- the ultimate speeds of which might leave today's offerings in the dust.
"It's a good technology, and it will be there in time," he said. "Wait until it settles down. Maybe what you buy today will be deemed in conflict with what eventually gets approved. You might be screwing up your neighbor, who knows? Just wait for a standard to happen."
dd: Yahoo! bids to eat RIM's lunch
By Andrew Orlowski (andrew.orlowski at theregister.co.uk)
Published Wednesday 8th June 2005 11:33 GMT
Success spawns competition, but for RIM, the attacks are now coming from all sides.
On Monday Microsoft vowed to give its Exchange 2003 customers wireless push email capabilities similar to RIM's Blackberry Connect middleware for free in a service pack later this year.
By licensing its Exchange push software to Nokia and Symbian (http://www.theregister.co.uk/2005/03/22/ms_activesync_symbian/), Microsoft has indicated that it is prepared to weaken its smartphone platform in order to shore up its Exchange revenue.
This is entirely consistent with previous fits of Redmond paranoia, in which Microsoft feared that Windows would become "a poorly debugged device driver layer", in Marc Andreessen's reckless words. In this case, the argument is that RIM could expand its email capabilities to perform Exchange-like functions, leaving Microsoft to sell a rather expensive directory server.
But less well-known names which sell primarily to carriers have long promised to undercut RIM's license fee, too. One of these, Seven, has today found a partner in Yahoo!, offering a carrier-based push email for a tenth of the price of RIM's Blackberry Connect. It isn't an Exchange service, and it is periodic delivery rather than true push; but it does the job.
Yahoo!'s mobile email is initially a modest deal, available only to Sprint PCS customers in the US, but it bring the capabilities to the consumer at a very low cost: $2.99 a month. It's available on five devices including the Treo 650 and 600.
In Japan, Seven offers a mobile email service on DoCoMo and KDDI phones using Brew and Java respectively, and has promised to bring this to the UK, where it already provides email for O2 and Orange. Arch-rival Visto hasn't been idle - last month it announced a global win with Vodafone for its own wireless sync software. ®
Original URL: http://www.theregister.co.uk/2005/06/08/yahoo_push_email/
Superbrands case studies: Virgin Atlantic
Brand Republic 7 Jun 2005
Virgin Atlantic
Originally published in 'Consumer Superbrands Volume VI', July 2004. The book reviews the UK's strongest consumer brands as judged by an independent judging panel.
Case study provided by Superbrands.
Market
The airline industry was affected more than most by the tragic events of September 11th 2001. There was an immediate and significant reduction in passenger demand, particularly across the North Atlantic, and a number of airlines became bankrupt. 9/11 was quickly followed by further challenges of SARS and the effects of the Gulf War. The industry is slowly rebuilding passenger confidence and recent traffic figures show signs of a recovery from 9/11. However, it is clear that in order to survive and compete in this challenging environment, it is vital for airline companies to adapt and evolve, focusing on capturing the market with an ever-improving range of services. Airlines with strong brand leadership, like Virgin Atlantic, should be most likely to emerge from the challenge strengthened.
Achievements
The brand's achievements have been recognised by a number of prestigious award schemes. In recent years the airline has won a huge number of well respected awards including the Best Long Haul Business Airline at the Business Travel Awards and FX and Design Week awards for the Upper Class Suite. In 2003, Virgin Atlantic won the Business Superbrands Awards for 'the brand that most values its employees'. In 2002, the airline won an array of awards including Best Business airline at Condé Nast Traveller Awards; The Guardian and Observer Awards; Best Transatlantic Airline at the Travel Weekly Awards and in 2001 Virgin Atlantic won OAG Airline of the Year. In addition, the brand has been consistently voted as a Superbrand and in 2001 was given Cool BrandLeader status by the Superbrands organisation.
Despite tough trading conditions in 2003 Virgin Atlantic achieved a turnover of £1.4 billion and carried almost four million passengers.
History
In the early 1980s, transportation - rather than customer care - appeared to be the top priority of the airline industry. When Virgin Atlantic burst on to the scene offering not only better service and lower costs for passengers but a commitment to put the customer first, the effects were radical.
The company was set up in 1984 when an Anglo-US lawyer called Randolph Fields approached Richard Branson - the young and unorthodox chairman of the Virgin Group -with an idea for a new airline that would fly between the UK and the US. Better known at the time as the leading light in the world of pop and rock music, Branson was enthusiastic about the opportunity to diversify. His characteristic energy and enthusiasm meant that within three months the airline began to lease its planes and June 22nd 1984 marked Virgin's inaugural flight from London to Newark.
From those early days the airline has gone from strength to strength. Now based at both London's Gatwick and Heathrow airports, it operates longhaul services from Heathrow to New York (Newark and JFK), Los Angeles, Boston, San Francisco,Washington, Miami, Tokyo, Hong Kong, Johannesburg, Cape Town, Shanghai, Lagos and Delhi. Virgin also operates services from Gatwick to Orlando, Barbados, St Lucia, Antigua, Las Vegas, Grenada, Tobago and Port Harcourt. Virgin Atlantic has also introduced a service from Manchester airport to Orlando. In January 2003, the airline began twice-weekly services to Port Harcourt in Nigeria and in May 2003 the airline commenced services between Gatwick and Tobago and Grenada bringing its total number of destinations to 22.
Plans have also been announced for new routes between London Heathrow and Sydney to start at the end of 2004 and London Gatwick and Cuba and The Bahamas to commence in summer 2005. On December 20th 1999 Richard Branson signed an agreement to sell a 49% stake of Virgin Atlantic to Singapore Airlines to form a global partnership. The cost of the transaction to Singapore Airlines was £600.25 million, which included a capital injection of £49 million and values Virgin Atlantic at a minimum of £1.225 billion. The deal was finalised in early 2000.
Virgin Atlantic has pioneered a range of innovations setting new standards of service, which its competitors have subsequently sought to follow. Virgin Atlantic has introduced a string of firsts including individual seat-back televisions for all economy passengers and the introduction of automatic defibrillators. Despite Virgin Atlantic's growth the service still remains customer driven with an emphasis on value for money, quality, fun and innovation.
Product
Virgin Atlantic's Upper Class has changed the face of business travel by offering limousine pick-up and Drive-Thru check-in. Virgin Atlantic also has Clubhouses, Virgin lounges for Upper Class passengers, at many of its destinations. The Virgin Clubhouses are deliberately designed to challenge the conventions of the airline industry and to create a different travelling environment. In 2003 Virgin Atlantic launched its revolutionary Upper Class Suite product. The product consists of a reclining leather seat for take off, a place to sit and eat a proper meal opposite your partner, the longest fully flat bed in the world with a proper mattress for sleeping on, a private on-board bar to drink at with your friends, a private massage room and four limousines per return trip - all at a price thousands of pounds less than other airlines' First Class.
By charging the same as other airlines' business class for this first class product, Virgin Atlantic's new Upper Class Suite is not only attracting former Concorde passengers but BA's and other airlines' first and business class passengers as well. The Upper Class Suite has already proved to be a massive success winning the airline all-important market share along with an impressive array of prestigious awards. The 'Freedom' meal service was introduced in 1999 which means passengers can eat 'what they want, when they want'. Virgin Atlantic's unique in-flight beauty therapy service, which celebrated its tenth anniversary in 2002, has a dedicated area on-board the plane.
Virgin Atlantic also opened its first arrivals lounge called Revivals at Heathrow airport. Revivals is designed to provide everything a passenger could need to awaken, revitalise and prepare for their day ahead after a longhaul flight. Virgin Atlantic also operates 'flyingclub', one of the most generous frequent flyer programmes available. flyingclub was re-launched at the end of 1999. As well as restructured membership levels, flyingclub has even more partners with the introduction of more airlines and hotels than ever before.
Premium Economy was first introduced in 1992. It is a service aimed at the cost conscious business traveller who, for budgetary reasons, travels economy but still requires extra space in which to work or relax. Premium Economy features 38" seat pitch, complimentary champagne at take-off and a fully flexible ticket. Virgin Atlantic's Economy class was the first to provide every passenger with a seat-back TV screen. It now provides the most advanced inflight entertainment system available with up to 300 hours of video and audio on demand along with a huge selection of computer games. Virgin Atlantic also gives out 'K-ids Packs' to children on-board and amenity kits containing useful items like socks and toothbrushes as well as more unusual items such as eye gel and lip cream.
Recent Developments
Virgin Atlantic continues to launch several new routes. In summer 2002, the airline took its newest delivery becoming the launch customer for the A340-600 - the longest plane in the world. In total, ten aircraft will be delivered by 2006 in a deal worth US$1.9 billion. The aircraft was named 'Claudia Nine' by supermodel Claudia Schiffer in front of an audience of media and VIPs. In 2004, the Queen named one of Virgin Atlantic's new A340-600s during a state visit to France. The aircraft was named 'Queen of the Skies' in commemoration of the centenary of the Entente Cordiale.
The new aircraft offers passengers many new on-board features including a redesigned on-board bar and in-flight beauty therapy area in Upper Class and new seats for both Premium Economy and Economy passengers. The aircraft has the most advanced in-flight entertainment system in the world which provides passengers with up to 300 hours of video on demand, fourteen audio on demand channels, fifteen computer games including multi-player games, on-board SMS text messaging service and a quick find search facility. In 2003 the airline commenced new services to Port Harcourt, Nigeria in February and Grenada and Tobago in May.
Early in 2004, Virgin Atlantic Airways Chairman Richard Branson announced that the airline is embarking on a period of sustained growth which will feature the launch of a series of new routes including Australia, Cuba, and The Bahamas, an increase in services to the US, Caribbean, Asia and the Far East, orders for two more A340-600 aircraft and the recruitment of 1,400 staff over the next year.
Promotion
The greatest and most well known advertisement for Virgin is Richard Branson himself. Branson is often perceived as the consumer's hero, an entrepreneur operating in a style all of his own, and Virgin's brand values emanate from his personality. At the same time as being one of Britain's most admired businessmen, Richard Branson's daredevil antics, such as ballooning across the Atlantic, have given the Virgin brand additional publicity.
Branson also keeps a shrewd eye on promotional opportunities: when he heard of British Airways' decision to remove the Union Jack from their plane exteriors, for example, he capitalised on the change by introducing the Union Jack onto Virgin planes.
Virgin Atlantic has proved an astute advertiser over the years. Its logo is highlighted on all its goods and services and is a highly protected property. Virgin Atlantic has implemented an integrated media strategy to promote its brands, including television, newspapers, posters, promotions, direct mail and the internet, often to wide acclaim.
The 'Grim Reaper' ad, for example, won numerous marketing awards and creative accolades including a Golden Lion in the Travel Transport and Tourism category at the Cannes International Advertising Festival; a Silver in the British TV Advertising Awards, a Solis award for Travel & Air Transport TV at the International Tourism & Leisure Festival as well as winning the Travel category in the London International Advertising Awards. In 1999 it won The Guardian Newspaper Recruitment award for Best Commercial Advert and Best Written Advert.
Recent television advertisements have been centred around the Upper Class Suite. In addition, a selection of strip advertisements emphasising Virgin Atlantic's services and fares have featured in the UK press and won several marketing awards. During 2004,Virgin Atlantic is launching the Virgin Atlantic GlobalFlyer record attempt to be piloted by Richard Branson's former recordbreaking partner, Steve Fossett.
The Virgin Atlantic GlobalFlyer aims to be the first solo piloted aircraft to fly non-stop and without refueling around the world. With this attempt, Virgin Atlantic is going back to its roots. Back in the 1980s when Virgin Atlantic was launched, the airline had limited marketing budgets and by attempting (and setting) a number of marine and aviation records Virgin Atlantic was put firmly on the map.
Brand Values
Virgin Atlantic strives to provide the best possible service at the best possible value. It is a distinctive, fun-loving and innovative brand, which is admired for its intelligence and integrity. Judging from the results of a poll conducted by research agency NOP the public also associates it with friendliness and high quality. Virgin Atlantic also recently won an NOP World Business Superbrands Award for the 'brand most perceived to keep its promises'.
Things you didn't know about
In 1999 Richard Branson received a knighthood for his services to entrepreneurship.
Virgin Atlantic employs over 200 Inflight Beauty Therapists to give Upper Class passengers beauty treatments in the air.
Virgin Atlantic serves approximately 2.5 million ice cream bars and 120,000 bottles of champagne each year.
The average age of Virgin Atlantic's fleet is around five years old - one of the youngest fleets in world aviation.
Virgin Atlantic has recently spent two years and £50 million developing its award-winning new Upper Class Suite.
(c) 2004 Superbrands Ltd
ot: Zacked and all longs
Just want to say thanks again for all the insights, I figure this hobby of mine dding this company in my spare time and with the approval of the wife at night may turn very profitable some time soon and I suppose dding calms me and justifies my accumulating the shares I did and fwiw, the more I read from the longs, the more shares I wish I could pick up, lol, but know I have enough and will never go on margin and/or put my family in jeopardy finacially...so I suppose this is a friendly thanks to all and reminder that while we all could get on eachothers nerves while cooked up here at times aboard "the good ship neom" lets kep keep it fresh, courteous and intellectually stimulating)...something like that, lol and have a great week...
Cheers!
sonofgodzilla
The mobile Internet has centered on the walled gardens of mobile operator portals. However, in the UK, a wind of change is starting to blow -- a change that could have a significant impact on the very existence of the portal model.
The operator portal, from Vodafone Live! to O2 Active, has long been a source of contention in the mobile industry. Although winning applause for educating consumers on the potential of mobile content, it also serves to constrain the industry by forcing content to stay within the walled garden and pushing providers to costly and time-consuming attempts to win valuable places on the WAP deck.
"In the early days of the Web, ISPs had walled gardens and that model fell apart," said Rob Wells, director of new media at Universal Music. "I've always said the likes of Vodafone Live! have a short shelf life and the same thing will happen as on the Web. There's some hugely exciting stuff going on off-portal."
The end of last year saw many companies start to experiment with downloadable Java portals in an attempt to side-step the operator portals. Now, however, with consumer confidence and usage in WAP booming, that off-portal space is becoming a fertile breeding ground. This is being driven by the use of WAP Push, which consumers are already using in huge numbers to download simple content like polyphonic ringtones, making it easy for brands and media companies to promote their full WAP sites.
"It's all about consumer education and the youth market is now very comfortable browsing off-portal," said Graham Darracott, partner at agency Graphico, which is building WAP sites for a swathe of large brands. "The BBC is also helping greatly by heavily promoting its WAP portal on-air." The embryonic commercial mobile search industry is only going to drive this faster.
The surprising thing is how open operators are starting to be about the effect this is having on their portals. "Direct to consumer was 70% of our £500 million 2004 market," said Vodafone's head of commercial partnerships, Jeremy Flynn. "The portal is still vital and Live! brought the mass market. Vodafone Live! will be the showcase, but the money and margin is in facilitating off-portal services."
Orange, while not so dramatic, also reports that over 50% of its traffic is coming from off-portal. This is surely fantastic news for mobile content providers, meaning businesses can be built without having to worry about striking operator deals. Especially as many operators are refusing to take any new content in popular areas, like games, directly, forcing companies to work through aggregators.
However, it raises interesting questions over the viability of the portal model. For so long seen as the crown jewels in the operator's data strategy, it seems the value of the portal is diminishing. Orange's Kiosk service, which provides a directory-like approach to enabling consumers to get off-portal, now has over 100 services.
"Direct-to-consumer has become the new buzzword and we embrace that," said Orange head of wholesale Ben Hirsch. "Kiosk is now contributing a significant amount to our WAP revenues."
As off-portal grows in significance, this is likely to lead to some friction within operators, one senior operator source suggests, between the wholesale team looking to boost off-portal traffic and the portal team's efforts to keep focus on the portal.
One growing issue here is pricing. Operators such as Vodafone have removed data traffic charging on their portals in an attempt to drive usage. This is starting to raise concerns for content providers as it means a piece of content on an operator portal, all other things equal, is automatically cheaper than off-portal. Some are already talking about the need for fair trade investigations. One senior music industry source even suggests the issue may be used "as an excuse to help shut down the portal."
At the same time, operators are beginning to recognise the need for a balanced wholesale model. "We're looking at a freephone-style browsing concept for off-portal, where the publisher subsides the browsing cost," said Flynn.
This is likely to be very attractive to the bigger media companies and brands keen to support their customers' WAP habits. Especially as ever more view WAP as an essential medium.
"We're actively looking at a direct-to-consumer portal," said Jane Marshall, controller of ITV Interactive. "In the same way a broadcaster has a Web site, it should now have a mobile Internet proposition."
However, in addition to the flood of headline-grabbing brands launching onto the mobile Web, there is also an exploding number of smaller, independent WAP sites, often grouped together in communities such as tagtag.com, which is said alone to have over 720,000 sites.
And people are obviously hungry to find them -- at paid-search giant Overture, which is leading the push by the sector into mobile search, head of vertical markets Sean Walker says that according to its research, there are now over 40 million off-portal searches each month. Online techniques, such as affiliate marketing, are also starting to flourish on the mobile Web.
Ballmer: While Apple And Google Get The Glitz, We Get The Customers June 6, 2005
Microsoft's CEO expounds on two rivals that are in the spotlight, the company's efforts to attract younger employees, and how its products address new work styles.
By Aaron Ricadela
InformationWeek
The sense of excitement in the computer industry may be accruing more to Apple Computer and Google Inc. than Microsoft these days, but Microsoft CEO Steve Ballmer downplays the buzz those companies are generating. Microsoft still outsells Apple 50-to-1, and it's in a better position inside companies than its search-engine rival, Ballmer said during an interview at Microsoft's TechEd conference in Orlando, Fla., on Monday. The world's largest software company also is trying to redefine its jobs to appeal to a younger demographic.
Ballmer's comments, after a conference-opening speech here, came hours before Apple CEO Steve Jobs was preparing to disclose at a technology conference in San Francisco Apple's decision to use chips from Intel in its computers, switching away from those of IBM. "We've been competing with Apple every day for the last 20 years and we have about 50 times as many users," says Ballmer. Every year, 50 times as many people buy a PC as a Mac, he added. "I don't think this changes anything in the basic competitive dynamic."
In the search-engine market, Google may have the franchise on the Web, but inside companies, Microsoft's SharePoint products are more popular, Ballmer says. "It's the same basic concept" as the servers Google sells programmed with its search algorithm, but "we're clearly ahead in the market," he said. "Google's barely started and we have millions of users." Last month, Google CEO Eric Schmidt told InformationWeek the company plans to expand the features it offers in its appliances. Those could include E-mail, instant messaging, and image searching. Said Ballmer, "It wouldn't surprise me if Google wanted to get in the game, just as it wouldn't surprise them that we want to take market share from them on the Internet."
Ballmer's topic during his speech to nearly 12,000 IT workers here was how corporate technology departments need to learn to support a "new world of work" characterized by employees who work from remote locations and organize themselves into teams that span company boundaries and coalesce and dissolve with the demands of projects. At the same time, Ballmer said, Microsoft's entry into consumer electronics markets with products such as its Xbox video-game console and Windows Media Center computers are helping the company refine its marketing and think more like a consumer-products company. "We're learning how to be more consumer oriented in a lot of our marketing," Ballmer says. "We'll learn some new skills, or relearn them. You could say that Windows and office started out very much marketed to consumers 15, 20 years ago, and they morphed to be much more marketed to IT people over the years."
Microsoft also is trying to inject some pizzazz into the jobs for which it hires young people out of college. Chairman Bill Gates last month said the company is trying to make its jobs more attractive to younger workers, and "taking out the parts of the job that aren't interesting." Ballmer admits Microsoft is having recruiting troubles -- "In our workforce, we're having a hard time finding talent, but who isn't in the IT industry?" he says. But the company also is trying to update the tools its workers use to do their jobs. Using more instant messaging on the job is one example. It's a "basic communications medium" for people in their early 20s entering the workforce, Ballmer says, but it's not commonly used by workers even as old as 35. "That's a good example of trying to make the job more natural -- you could say more fun." Ballmer loosely compared the situation to when he joined consumer-products company Procter & Gamble 27 years ago. "When I joined Procter & Gamble we went through oftentimes 20, 21, 22 rewrites of a memo. That was commonplace before it went up the management chain." Without word processors, Ballmer and his co-workers used X-Acto knives and Mylar boards to literally cut and paste text. "Do you think it was a lot of fun working there?" he says. "Getting the memo right was hard enough, but the process of getting the memo right was just outlandish." During his speech, Ballmer pointed to Microsoft technologies designed to support a "new world of work." The tech industry is entering another period of "sustained growth," he said. But 10 years after the release of Windows 95, a watershed event in high-tech marketing, Ballmer couldn't resist a jab at his own company's branding. Microsoft today released a "messaging and security feature pack" for its latest version of Windows for high-end cell phones, and an update to its E-mail server software called Exchange Server 2003 Service Pack 2. "Some people say Microsoft's a good marketing company," said Ballmer, reading the lengthy product names off his slides. "I have a hard time saying all that."
http://www.informationweek.com/story/showArticle.jhtml?articleID=164300720
ot: "You see, wire telegraph is a kind of a very, very long cat. You pull his tail in New York and his head is meowing in Los Angeles. Do you understand this? And radio operates exactly the same way: you send signals here, they receive them there. The only difference is that there is no cat."
ot & dd: I Ned Rest Too, Nite Nite:U.S. Web Giants Target China
With Internet use exploding in the Middle Kingdom, companies like Yahoo! and Google are hunting harder for deals
As China's internet market sizzles -- 94 million Chinese now go online, second only to the U.S. -- many of its Web companies have rocketed from startup obscurity to stock-market fame. Shanghai gaming innovator Shanda Interactive Entertainment Ltd. (SNDA ) last year raised $100 million in an initial public offering and now stands 249% above its launch price. Ctrip.com (CTRP ), which provides online travel reservations, raised $40 million in an initial public offering in December, 2003, and its shares have since more than doubled. Tencent, which operates China's top instant-messaging service, pulled in $200 million in its Hong Kong IPO last June and has seen its shares rise by 30%.
Now, Net giants from the U.S. want a piece of that China magic. On May 11, Microsoft Corp. (MSFT ) said its MSN portal had formed a joint venture with a Shanghai company to operate a Chinese-language version of MSN. Later in the month, Google Inc. (GOOG ) opened a small office in Shanghai, following a February deal with Tencent to provide search services for the Chinese company. And Yahoo! (YHOO ), Amazon.com (AMZN ), eBay (EBAY ), and Expedia (IACI ) have been on the prowl in China, too. "The sense of urgency among big players has accelerated," says Safa Rashtchy, an analyst with Piper Jaffray & Co. (PJC ) in Menlo Park, Calif. "If you don't have a major stake in China, you could be left out."
It helps that U.S. Net outfits have an easier time getting into China these days. In the past, foreign companies that wanted to invest in Chinese dot-coms had to grapple with restrictions limiting their access to the market. Typically, the Americans would invest in an offshore company that had a contract to provide content to the Chinese company but had no stake in China itself. In late 2003, Beijing eased those restrictions as part of commitments it made in joining the World Trade Organization. Foreigners can now directly own 50% of Chinese Net companies, though getting approvals can still be slow.
The first to take advantage of the more liberal climate is MSN. Its partner is Shanghai Alliance Investment Ltd., which is run by Jiang Mianheng, a son of former President Jiang Zemin. The venture will offer Chinese-language content from government-backed outlets such as the Beijing Youth Daily and the Shanghai Media Group. One target audience is China's 340 million-plus cellular subscribers, who often use their handsets to go online. "Because of the mobile population, there are opportunities for new services," says Bruce Jaffe, MSN's chief financial officer. One such service, for instance, might allow Chinese bloggers to post their thoughts while on the go.
Other U.S. companies have already jumped in, restrictions or no. Yahoo! Inc. last year paid $120 million for a Hong Kong company that gives it control of Chinese search engine 3721. A key attraction of 3721 was the relationships its sales staff had built up with advertisers, says John E. Marcom Jr., senior vice-president of international operations at Yahoo. "3721 has a thriving, on-the-ground sales model," says Marcom. In addition, 3721 understands the local market and has helped Yahoo spruce up its site design and product positioning, he says.
Yahoo's salespeople will have to work hard to stay ahead of Google. The search giant sold about $24 million in ads in China last year and had about a quarter of the search market, according to researchers BDA China Ltd. While other search engines typically charge 3.6 cents a click for ads pegged to keywords, Google in recent months has cut the price to just 2.4 cents. While that could well get more companies interested in buying keyword ads, it is also likely to put pressure on China's leading search company, Baidu, in which Google holds a small stake.
Big e-commerce players are moving into China, too. eBay Inc. paid $180 million for EachNet Inc., a Delaware company that gives it control of Chinese Net auctioneer EachNet, and says it will spend at least $100 million in China this year. China is a "defining measure of business success on the Net," Chief Executive Margaret C. "Meg" Whitman told analysts in February. EachNet's gross sales grew 70% year-on-year in the first quarter, to $100 million. And last August, Amazon.com Inc. bought a British Virgin Islands company that gives it control of Joyo.com, China's leading online bookseller, for $75 million. While Amazon CEO Jeffrey P. Bezos cautioned shareholders at the company's May 17 annual meeting that the venture "will take many years to succeed," he said "it's an investment worth making in a country that's growing so rapidly."
Some Chinese are welcoming the American invasion. Pony Ma is the 34-year-old founder and CEO of Tencent, the Shenzhen company that operates QQ, an instant-messaging service with 77% of the Chinese IM market. Although Ma first turned to Baidu for a search function on the QQ portal, in February he switched to Google. Ma thought Google's search engine was more efficient, and decided it was less risky to work with the Americans. "Baidu could be a competitor," Ma explains. Given what he sees as the more limited goals of the newcomers, he says, "it's safer to work with foreign companies."
Foreigners, though, face plenty of dangers in China. For starters, the market is immature. Paid search, for instance, is just a $150 million market, compared with $3.9 billion in the U.S. In addition, companies that don't have a local operation can find themselves at a big disadvantage. For instance, Google doesn't have any local servers; as a result, few university students can see it, because school networks don't easily connect to sites outside China. And keeping the country's censors satisfied that the Net isn't fostering subversion requires companies to do lots of monitoring of content on their sites.
At MSN, Jaffe says the company is doing its best to make sure that the censors have no reason to move. "We keep a keen eye on being locally sensitive" wherever MSN operates, he says. "This will be no different." That will mean restrictions on what Chinese Net surfers can see and say on MSN's site, of course. But it's a price Microsoft and much of the rest of the U.S. Internet community appear willing to pay.
By Bruce Einhorn in Shenzhen, with Ben Elgin and Robert D. Hof in San Mateo, Calif. and Timothy J. Mullaney in New York
Copyright 2000-2004, by The McGraw-Hill Companies Inc. All rights reserved.
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ot: beacon GO TO BED!You Need Rest eom
Jobs Has Easy Sell to Mac Faithful Jason Lopez, newsfactor.com
Tue Jun 7, 2:06 PM ET
When Apple CEO Steve Jobs announced to a crowded room of developers in San Francisco that the company would shift its computers to Intel (Nasdaq: INTC - news) chips, he was met with a few boos and snickers.
By the time CEOs like Intel's Paul Ottelini and Adobe's (Nasdaq: ADBE - news) Bruce Chizen took the stage minutes later to assure the Apple faithful that everything would be OK, the crowd was downright congratulatory.
Jobs took several pointed pot shots at Windows even as Roz Ho, the general manager of Microsoft's (Nasdaq: MSFT - news) Macintosh business usit, waited in the wings to deliver a cheer for Apple's new venture.
But the hatchet appeared to be permanently buried with Intel -- although Ottelini jokingly reminded the crowd that Apple has not played nice in past ads slamming Intel's technology.
No Longer Evil
Some of Jobs' presentation came off as a defense of the move to Intel chips -- and with good reason. Intel always has been considered one half of the evil empire known as Wintel, and Apple has indelibly stamped that message into the minds of its followers. It was understandable that Jobs was prepared for a less than friendly response.
"[Intel is an] engineering-driven culture that is passionate about their products," Jobs told the Apple crowd. "We didn't always view them that way," he acknowledged.
When Intel's CEO Paul Ottelini took the stage, it was obvious that Apple developers approved of the big hug he gave Jobs, which resulted in a momentary thud of his lapel microphone. Although many industry analysts say IBM's (NYSE: IBM - news) latest PowerPC chip designs are actually better than Intel's, Ottelini pointed out that there is more to making semiconductors than building in speed.
Price and efficiency count especially with hot-selling mobile computers. You could almost hear Jobs counting Intel-based PowerBooks and iBooks flying off the shelves.
Smells Like Apple
If developers have a problem with the migration to Intel chips, it has less to do with a disparity in the quality of the technologies and more to do with bad timing. Miklos Fazekas, a Hungarian developer, was disappointed in the news.
"It's going to be huge work to change over," he said. But Fazekas acknowledged that users of the CAD software he helps develop would probably like the result.
"We just bought half a million dollars worth of PowerPC hardware last week," said John Koontz, head architect of I.T. at Eastern Illinois University. "The secrecy thing has kind of bit us here, but we'll move to [Apple's Intel platform] like everybody else."
Most developers, like Alan Shouls of UK-based Softpress Systems, see Intel as just another third party hardware partner. The value in Apple is OS X and the fit and finish of the hardware. "If it looks like an Apple, feels like an Apple, and smells like an Apple, it's an Apple," he concluded.
Microsoft Takes On RFID Data Management
Senior VP Flessner calls making RFID available inexpensively and plentifully from a Windows perspective a "super-important play."
By Aaron Ricadela, InformationWeek
June 7, 2005
URL: http://www.informationweek.com/story/showArticle.jhtml?articleID=164301026
Microsoft plans to ship the next version of its database and development tools in early November, and it's working on software to manage radio-frequency identification data that's due next year.
Senior VP Paul Flessner said Tuesday at Microsoft's TechEd conference in Orlando, Fla., that SQL Server 2005, Visual Studio 2005, and BizTalk Server 2006 will ship the week of Nov. 7. The company is also working on software for use with Windows and SQL Server it says could smooth out problems companies are having loading data from RFID tags into databases, and making that data available to workers.
"We're going to make sure RFID is available very inexpensively and plentifully from a Windows perspective," said Flessner in a speech at the conference. RFID tags in manufacturing and remote data-scanning sensors used in science, shipping, and commercial construction are forecast to generate reams of new data in coming years. "This is a super-important play for us," he said.
In an interview, Flessner said companies are looking for database, development tools, and workflow software that can coordinate the functions of their applications to "match the chaos of the real business world." Mergers, acquisitions, and investments mean more systems need to be connected to one another. To that end, Microsoft said today that the "reporting services" business-intelligence functions of SQL Server 2005 now will be available in all editions--including lower-cost Express and Workgroup editions. Previously, that feature had only been planned for inclusion in the Standard and Enterprise versions of the database software. A "report builder" for end users will now be included in the Workgroup edition as well as higher-end versions. Microsoft also released the first public pre-release version of SQL Server 2005.
Microsoft managers say they haven't yet decided how they'll ship the RFID software under development. But Flessner says the technology is important for companies involved in inventory management, shipping, and distribution. RFID tag readers speak a variety of technical protocols, and industry standards haven't taken widespread hold, he says. Microsoft is developing a device driver, programming object model and APIs, and plans to include in its BizTalk product the ability to write programs that can direct "the massive flow of RFID data" coming into companies.
lol, Bill Bill Bill, must be wild for him now watching all this go by and see how vital it is to trump the foes....and how bout that rfid stuff...this is all to wild, I am glad I am in here all I can say, jmho
My bet, msft, then intc then symbl or everyone, lol
Btw, I ordered the transcript for the charlie rose/schmidt(goog) interview but havent received any notification yet that I ordered it, and imho, even though those alogarithim dudes sergio, etc are worth 8 bil a piece...hats off to em and now they are a target for most paradigmn paralisys stricken folks/companies...., Bill (or anyone else for that matter jmho) will not sit back and let msft (or any other company for that matter)be trumped by them any longer imo, let the games begin!!!!
Bonus dd:
Monday, May 23, 2005
How real is Microsoft's browser threat to Google and Yahoo? (MSFT, GOOG, YHOO)
A looming threat to Google's search business is Microsoft's next release of its Internet Explorer browser. Why? Because Microsoft could build search into the browser in a convenient and compelling way, just as it's built into Firefox and Safari. In light of that, Joseph Nocera's NY Times article adds an important factor to the mix:
Mr Nocera discusses the impact and aftermath of the Microsoft (ticker: MSFT) anti-trust trial five years ago. The entire article (free subscription required) is well worth reading, but two points stand out:
Since the trial, Microsoft has been far more cautious about leveraging its operating system and office productivity software dominance into other markets. In the words of Bradford Smith, Microsoft's General Counsel: "Every single decision the company makes with respect to Windows is made with a level of antitrust legal advice".
The issue at the core of the litigation - that Microsoft should not have been allowed to "innovate" in ways that extended the operating system into new markets - was never resolved.
I've argued that the next release of Internet Explorer is sure to damage Google's (ticker: GOOG) search business. (That's why Google's contextual advertising business is potentially more valuable than its search business.) But Mr Nocera's article raises the possibility that despite the fact that both Firefox and Safari select a single provider as the default in-browser search option (in both cases Google), Microsoft might - perhaps - be reluctant to do the same thing.
Although Mr Nocera specifically addressed the threat to Google from Microsoft, Yahoo (ticker: YHOO) is equally exposed. Yahoo presents itself as a diversified company, but a disproportionate amount of its profits and growth come from paid search.
http://www.internetstockblog.com/2005/05/microsofts_brow.html
nite nite
SOG
dd: navini Web Site And Videos http://www.navini.com/pages/press/videos.htm
http://www.navini.com/pages/company/index.htm
Wimax realated dd:BellSouth to launch broadband service
The phone company plans to launch Internet service for residential customers with WiMax technology.
June 7, 2005: 7:28 AM EDT
http://money.cnn.com/2005/06/07/technology/bellsouth.reut/index.htm
CHICAGO (Reuters) - BellSouth Corp., the No. 3 U.S. local telephone company, said Tuesday it would launch a wireless high-speed Internet service for residential customers based on an early version of the WiMax technology backed by Intel Corp.
BellSouth (Research) and other telecommunications companies have been testing WiMax as a cheaper alternative for connecting hard-to-reach customers or replacing more expensive wired data links.
BellSouth said it would offer the service starting in August in Athens, Ga., and would expand to several cities in Florida later this year.
The company did not release details on prices or data speeds for the service.
Intel (Research), the world's largest chip maker, is pushing WiMax as a way to spread cheap yet ubiquitous wireless broadband access, as well as a future driver of chips and notebook computer sales.
With Intel's muscle behind the WiMax push, some 240 companies have joined the industry group developing standards and equipment.
Certified WiMax equipment has yet to go on sale, but several companies sell "pre-WiMax" gear based on early versions of the standards. BellSouth said its service would use equipment from privately-owned Navini Networks.
ot comment and Power Lunch DD: Captial Gains Related
Hi, lunch break here and came across this while thinking for quite some time about this complicated tax code here in the USA...In any event, don't want to count the 'Ol eggs b4 they hatch but someone posted a while back of only a 5% tax rate if AGI (adjusted gross income) was $68,000 or less...with all due respect I will defer to a tax advisor if and when I decide to sell a few, etc and if there is a gain, but reality is, it sure appears to me that short term hold of a stock asset would require a tax bracket cap gains tax according to an individuals particular tax bracket they fall into up to approximately 40%..Now if the same person holds longer than a year, well than you would pay a max of up to 20% with a min of 15% if you would fall into the 15% tax bracket. And then there's ultra long hold (greater than 5 years) that get tax3ed at even a lower rate...
Be it as it may, this is why the Govt I SUPPOSE WANTS TO KEEP THINGS COMPLICATED WITH THE TAX CODE, SO THE irs EMPLOYEES CONTINUE TO HAVE TO WORK AND SO ACCOUNTANTS CAN SPIN YOUR HEADS AND CHARGE YOU FEES TO STAY EMPLOYED (me, *(I'd rather dd and figure out other stuff and let the accountants advise me so I will probably pay them when it is all said and done fwiw)...SOMETHING LIKE THAT, LOL...in ANY EVENT, I’ll WORRY ABOUT ALL THIS WHEN THE TIME COMES AND MAKE SOME ACCOUNTANT HAPPY WIHT THE FEES I WILL HAVE TO PAY HIM/HER TO ASSES THE FORTUNE I MAKE HERE AT NEOM....IT SURE WILL BE A NICE PROBLEM TO HAVE IMO...
HAVE A GOOD DAY, and sorry about caps, just noticed them...
sog
dd:Subject: Tax Code - Capital Gains Tax Rates http://invest-faq.com/articles/tax-cap-gains-rates.html
Bonus dd: neet reflection on cap gains psyche, etc:
Eliminating the Holding Period For Capital Gains
On Saturday (April 21), the New York Times reported that Senate Republican leaders hope to add a capital gains provision to the tax bill working its way through Congress. George W. Bush did not propose any change in capital gains taxation in his tax plan. The Times reports that one idea under serious consideration is to eliminate the capital gains holding period.
http://www.ncpa.org/oped/bartlett/apr2501.html
dd: IRS Publication 550 (2004), Investment Income and Expenses
(Including Capital Gains and Losses) http://www.irs.gov/publications/p550/index.html
dd:
Broadcast TV facing broadband realities
June 07, 2005
By Diane Mermigas
CHICAGO -- Broadcast television networks and stations are destined to become glorified program suppliers whose participation in interactive advertising and content will be dependent on cable, satellite, Internet and other gatekeepers.
The more unique their content, the more assured their involvement in new revenue streams from interactive devices and platforms that reach well beyond the living room TV set to countless forms of wireless Internet broadband access and storage that are not homebound.
In less than five years, consumers will be spending $60 billion annually on DVR-like devices, satellite radio, iPods and mobile technology driving personalized media outside of the home. One-fifth of all consumer spending will be on new content access and distribution technologies now in their early stages of growth, according to Bernstein Research.
Such new realities are being heartily embraced by some broadcasters and being ignored by others but are sneaking up on them all. Once in the digital door, content-producing broadcasters will be thrust into the hornet's nest of copyright protection vexing films and recorded music as they seek assured compensation and integrity protection for what they produce -- from primetime series and soap operas to news.
Television is especially vulnerable and must identify new tech business models that deter a combined threat from piracy and ad skipping to $12.5 billion, or 8% of all television revenue in the next five years. Just look at thousands of hours of TV programming already in play on peer-to-peer file-sharing systems like BitTorrent, which are compromising television, DVD and syndication revenue. Clearly, the road to ubiquitous digital content will be strewn with lost value if broadcasters don't get cracking on a PayPal-like universal payment system.
In fact, Bernstein Research projects that by 2010 the Big Media companies that own broadcast networks and TV stations could lose $160 billion in equity value from unchecked ad skipping and piracy.
That alone makes a technology shift imperative for grass-roots broadcasters who created the mass market more than 50 years ago, only to be losing it incrementally to technologies that are empowering consumers and making personalization the new media standard.
Ask television broadcasters about the future, and they most likely will say they are waiting to be rescued by regulators enforcing digital must-carry, increased sale of digital television sets and a digital critical mass penetration that includes not only homes but also individual TV sets. TV broadcasters say they will resist spending much money on digital content until there is a big enough market (more than the current 10 million digital homes to assure a payback -- mirroring their approach to high-definition television.
But the digital revolution is nothing like the qualitative HDTV picture technology that will come to the masses through attrition. It is all about the interactivity, portability, high speeds and huge storage capacity that consumers already are embracing in many places, away from the home TV. Even at home, the 30% of consumers with broadband connections will at least double within five years, according to Forrester Research.
Not many grass-roots broadcasters get that. They shrugged at the only innovative idea to give broadcasters unfettered interactive connections to consumers -- a broadcast set-top box, the brain child of Emmis founding chief executive Jeff Smulyan. A year later, he is in talks with Verizon and other telephone companies about the box, and is selling his TV stations.
Among other thing, Smulyan ran headlong into local broadcasters who would rather lease their digital spectrum to third parties for proprietary digital transmissions as a safe and secure new revenue stream.
Smart broadcasters are preparing to launch their local news, video classifieds and dating services, weather and sports (if it hasn' t been consumed by regional sports networks) in tandem with cable operators, cell phone companies and Internet service providers who can help them get to the promised land of interactive content and advertising. They want a piece of the $4 billion in annual domestic TV subscriber revenue that Bernstein says will quadruple by 2015, when global TV subscription fees reach $50 billion.
ABC News recently relaunched as a 24&frasl7 linear news network that is transferable to any Internet-connected broadband platform, and that constitutes a lot of new potentially lucrative outlets, from cell phones to video game consoles to personal computers and a host of mobile devices. Like so many broadcasters, ABC could look to its cable counterpart, ESPN.
Likewise, Scripps is launching advertising-supported broadband channels for the web-iterations of its winning Food and Home & Garden niche cable networks with backing from GM and Whirlpool, and such Internet partners as Yahoo, MSN and Comcast.net. The same interactive tools allowing targeted consumers to plan meals and remodel their homes also will facilitate transactions with advertisers: a broadcaster's dream.
Other broadcasters including Hearst Argyle, Grey Broadcasting and NBC are concentrating on ways to bring their unique local news to the digital broadband table. The Big Four's oft-mentioned summary "mobisodes" to cell phones and streaming media providers of popular series "24" and "Desperate Housewives" is just the tip of the iceberg.
Bernstein analyst Tom Wolzien contends that if the broadcast networks could attract a mere 6% of the 20 million women age 18-49 in the workplace with streaming media soap operas on desktops or other Internet-connected devices, they could generate $230 million in revenue at the current broadcast CPM, or $700 million at a three-times-higher Web CPM. Simulcasting with the broadcast network feed through TV affiliate Web sites avoids historical rights and affiliate issues, he said.
Once they begin dabbling, broadcasters will begin to capitalize on the fact that consumers respond to and seek particular content -- not networks or stations -- a phenomenon that will be more starkly evident as cable operators convert to all-digital and a la carte content selection and pricing are routine.
Broadcasters' enterprising response to interactive digital technology is imperative even if they only half-heartedly accept Forrester's projection that marketers will spend $26 billion on online display ads, e-mail, search and broadband classified ads within five years, representing 8% of all advertising spending and rivaling the combined ad revenue of cable and satellite television and radio. That increased online ad spending will directly correlate to decreased traditional media ad spending, Forrester said.
The growth opportunities for broadcasters with desirable content are not so much in the average daily five hours consumers spend watching television at home as they are in the average daily 41&frasl2 hours consumers use broadband interactive media in their cars, at work and on the go. Just look at the way conventional radio and telephone have resurrected their dying business models by shifting to satellite radio and digital cellular phones. In the near future, the latter will morph into pocket-sized personal communicators with more memory than a mini iPod, Web browsing and connectivity on par with the best wireless laptops, top quality video, 3-D sound, a music and movie synching USB, emails and Internet messaging.
Broadcasters' new rules of play and opportunity were among the broad range of matters examined in a recent series of conferences hosted by Sanford Bernstein about a personalized interactive digital media world that is the very antithesis of the broadcast analog world slipping away.
The overriding conclusions paralleled those already jolting Wall Street, Madison Avenue and Main Street.
Foremost among them: Consumers are increasingly intolerant of irrelevant advertising and content. They are willing to spend more for content and services they want, irrespective of the technology, platform or price.
Broadcasters still have an important place on the radically changing media food chain as branded content providers, if they are smart. They only have to look at their newspaper brethren to know how not to respond. The no-growth sector still is trying to figure out the Internet and betting on cyclical relief when advertisers and consumers have long since shifted their spending to other media. So much for seeing the opportunity in change.
Find this article at:
http://www.hollywoodreporter.com/thr/search/article_display.jsp?vnu_content_id=1000947232
dd: Increasing online ad spending aids Google
Online advertising sales in the U.S. rose by 26% to $2.8 billion in the first quarter as companies shifted ad spending from more traditional sources to the Web, according to PriceWaterhouseCoopers and the Interactive Advertising Bureau.
The first-quarter total was the most in more than two years, PriceWaterhouseCoopers and the New York-based IAB said in a statement.
Online ad spending rose from $2.2 billion in the same period a year ago.
The boost in online ad spending, which began to recover in 2003 after declining for two straight years, is benefiting companies such as Google and Yahoo.
First-quarter profits surged almost sixfold at Google and it more than doubled at Yahoo as they sold more Web ads.
Google shares got an additional boost from analyst Jordan Rohan at RBC Capital Markets. It was the fourth brokerage in a week to boost the share-price estimate for Google.
The firm said the stock may reach $330 in the next 12 months with revenue increases topping forecasts.
Google shares jumped nearly 4%, or $10.68, to $290.94 yesterday. The stock has more than tripled since the company went public last August.
Bloomberg News
Originally published on June 7, 2005
Waiting For The Revolution
by Nick Johnson, Tuesday, Jun 7, 2005 6:00 AM EST Online media Daily
AS ONLINE AD SPENDING CONTINUES to skyrocket this year, many believe that 2005 is the breakout year. Analysts are looking at projections from $12.3 billion (Goldman Sachs) to nearly $15 billion (Forrester Research), and online media is projected to reach 20 percent of all media consumption (Goldman Sachs). This has been due in large part to emerging technologies that allow advertisers to get increasingly more targeted about the audience they reach.
Behavioral targeting is leading the charge. This is truly the next stage of media evolution, and now is the time for thought leaders who understand the value proposition to take ownership of the capability and show a commitment to behavioral targeting. Such a commitment--one that makes behavioral targeting a core part of campaign-level strategy--will drive new economics that will dramatically transform and grow online advertising..
There are clear precedents for the transformative power of embracing targeting. About twenty-five years ago, cable television launched, and it took some time for advertisers to embrace the medium. It was an emerging media outlet, and advertisers were slow to commit. Then there was a big breakthrough when Budweiser and ESPN got together to develop a huge multi-year deal that really helped put ESPN--and, by extension, cable--on the map.
This was the beginning to a transformational event--instead of trying to reach a narrow audience by spending a ton of money on broadcast and hoping to find them, cable was an evolution of media distribution that allowed advertisers to reach their target in fewer places with less out-of-pocket expense. Early buyers saw that "we have to start allocating some budget to this," and pretty soon 5 to 10 percent of media budgets were being allocated to cable every year. This made it a robust, viable media channel.
The evolution of cable has helped marketers get used to spending premiums to reach targeted but highly valuable segments of the audience, and the broadcast mentality began to slip away. According to Veronis Suhler Stevenson, in 2003 the communications industry spent $39,758 MM on broadcast TV (not including barter syndication) compared to $83,537 MM on cable and satellite TV. Moreover, share on broadcast TV continues to deteriorate as more money goes to cable. The targetability of audiences through cable accelerated media efficiencies by letting planners buy audiences more accurately.
Fast forward to today, and we can see how the value of being able to reach a specific audience has grown--and is the dominant force behind media and advertising today. One of the primary reasons Viacom is splitting into two companies is because the MTV brand--with incredible ownership of adults 18 to 34--and other valuable demographics in Viacom cable are among the strongest year-to-year growth in the company. MTV's value is fueled by the ever-growing elusiveness of today's youth--they're gravitating to gaming, the Internet, and mobile devices. The more elusive they become, the more valuable the ability to target them in aggregate on MTV becomes.
What that phenomenon ultimately says is "in the cable world, the demographic is king." But whatever value the demographic has, it is a proxy for something even more valuable: behavior. With cable demographics, you maybe know how old a person is, what gender they are, and some interests--obviously, they like music and like watching spring break--but you don't know much more about them than that. Online, you can get to all their interests directly, based on their real behavior.
With behavioral targeting, an advertiser can find young adults, but the interest isn't just because they are young adults. The interest is in more finely targeting them based on what they do and what their interests are. You can go to a major, young adult online community like Bolt.com and target teenage girls based on the type of content they read. And when they come back to the home page you can serve a teenage girl interested in makeup a Revlon ad; a teenage girl interested in sports a Gatorade ad and a teenage girl that is interested in gaming an XBOX ad.
Gaining Steam
That scenario is becoming more and more available to marketers because the technology is deploying at a rate that matches agencies' media planning sophistication. Deployment of behavioral targeting today is significantly broader in reach than it was six months ago, as there are more and more outlets where advertisers can invest against behavior. The old excuse of not being able to aggregate enough reach is gone. Cross-site buys can be done at a meaningful scale, and that means that behavioral targeting, and all the value it brings, can be and must be central to online advertising.
One last interesting thing to look at is the relative maturity of online advertising. 2000 was the tipping point for online spending. The online market was being fueled by IPOs and dotcom hysteria and the place to spend money was online. It unnaturally flooded the market, sold out inventory, and helped sites without any best practices get up and running; established media brands were competing with start ups like the globe.com. Then the market bottomed out and the dot coms followed. The big online-only brands struggled to survive.
Now in 2005, we have the biggest online spend ever predicted. Guess who that is being fueled by? The Fortune 500 marketers; the folks who emerged to drive cable success 25 years ago. They are fueling growth and supercharging the penetration of Internet as a marketing vehicle. Cable is bought on a targeted CPM basis, and the reason it gets a premium is the laws of supply and demand. There aren't that many adults 18-34, and MTV does a terrific job of aggregating them; therefore, they get a premium. Behavioral targeting is doing the same thing, but is creating much narrower--and even higher-value--audience segments based on behavior rather than demographics. We're now seeing the same sort of marketplace effect as buyers extend their understanding of premium pricing
Online media's ability to segment and aggregate people based on behavior, intent, and being in-market is going to continue to drive the value of audiences and the ability to reach them. We're ready for our Budweiser to kick it to the next level.
Nick Johnson is Senior Vice President of Business Development and General Manager of Account Strategy at Revenue Science. Nick focuses on creating, communicating and implementing partnership strategies to drive demand for Revenue Science behavioral targeting services through building relationships with advertising agencies, large publishers and advertisers. Revenue Science is the global standard for behavioral targeting.
dd> Google: B2B Buyers Rely On Search
by Shankar Gupta, Tuesday, Jun 7, 2005 6:00 AM EST
GOOGLE MONDAY UNVEILED A REPORT stating that buyers of technology goods for businesses turn primarily to search engines--both paid listings and natural results--for decisions at every stage of the buying process. The study broke down the buying process into three parts--research, consideration and comparison, and purchase. During the research phase, according to the study, respondents use search 30 percent more frequently than print magazines and trade publications, the second-most often-used source. In the consideration and comparison phase, search engines were used 21 percent more often than trade publications and magazines, which were again the second-most used source, and five times more often than e-mail newsletters, which were the least-often used. And in the purchase stage of the buying process, search engines were used by 21 percent of buyers as their primary resource, with trade publications, content Web sites, and trade shows trailing at roughly 13 percent each.
The study, entitled "The Importance of Search in the Business Technology Purchase Process," was conducted in March and April of this year, and was performed by Millward Brown, which surveyed 900 people involved in corporate technology buying decisions. The study took into account both paid listings and information provided in the natural results.
John Topping, Google's director for technology B2B verticals, said that the research shows that technology business-to-business marketers can reach buyers with search, especially in the earlier phases of the buying process.
"It shows there's a particularly big opportunity for these B2B tech markets to communicate at the early research phase and the consideration and comparison phase with search," Topping said. "If I'm doing research, I'm going to try to look at everything that was written ... I think we've found particularly that in a market like this, a lot of information is needed, so it's not surprising that a search engine would be a primary way of people to organize it and get at it."
Aaron Tan
URL: http://news.zdnet.com/2100-9584_22-5727715.html
Symbol Technologies CEO William Nuti is good at pulling out the weeds in corporate restructuring.
And this he did when he moved up the ladder last year from his chief operating officer position to head the once-flagging barcode applications company that had been dogged by several accounting scandals.
A former top executive at networking giant Cisco Systems, Nuti was successful in weeding out the bad performance issues and harvesting the good. In less than a year, the company's revenue rose to $1.3 billion, up 13 percent from the year before. Operating costs were also slashed, by $15.5 million.
Nuti also refreshed the company's entire product line, steering Symbol toward new areas, such as RFID, or radio frequency identification.
In a recent interview with CNETAsia, Nuti spoke about several areas, including intellectual-property rights, and privacy issues concerning RFID.
Q: You recently filed a second patent infringement lawsuit against Intermec, relating to some of Symbol's patents. Can you give us an update? And how are your customers affected?
Nuti: No customer will be affected whatsoever. A lot of attention has been paid to it--more than we anticipated. It's simply a matter of us protecting our intellectual property in the market that we have worked so hard for.
We have 875 patents that we've developed over the last 30 years and where we've spent an incredible amount of money. The two areas where we are launching suits against Intermec are wireless and 2D barcodes. We think we have an excellent case in those areas.
How do you view the fact that some businesses have abused intellectual property for their economic benefit against the greater good of society?
Nuti: As the CEO of a company that has invested so much in intellectual property, it's disturbing for me to see another business in the market act with the lack of integrity or ethics that I would expect the global business landscape to live up to.
Do you agree that software patents are accorded too easily?
Nuti: I think that just like hardware, software patents are equally important in the market. The buzz around Microsoft spending a lot of money developing their software and their patent infrastructure has to be respected from a global perspective.
But on the flipside, I also believe that you have to offer reasonable and nondiscriminatory license terms for companies to use that software or hardware.
It is Symbol's goal to lead in the RFID industry. What is the company's position so far? Right now, I would characterize Symbol as the leader in RFID technology for the supply chain industry, as well as travel and transportation. Clearly, there is a large RFID market that we don't participate in--the active tag market. We (therefore) can't characterize Symbol as the leader in RFID in the general sense.
Technology is always a double-edged sword. RFID, while useful to businesses in streamlining logistics, is considered a bane for privacy. Any thoughts?
Nuti: I actually think that a lot of education needs to be done on a worldwide basis with regard to RFID, because an RFID tag is nothing more than a talking barcode. It's a serial number identifier that's transmitted, and nothing more than that.
So, there isn't any risk of a privacy breach when all you're receiving is a unique identifier, like a license plate number. And when I receive that data, I need to match it to a database to give me more information about what that means. And RFID tags don't have any power--they have to be powered by a device in a specific range.
The key issue is one of education. When people understand how the technology works, they will no longer have a concern about privacy.
Are privacy advocates against RFID technology really blowing things out of proportion?
Nuti: Absolutely, there's no doubt about it. And it's because they don't understand the technology. Once they understand the technology, I think they will quickly back off the concerns they have. It's up to us to educate them. I spend a good amount of time educating world leaders in Washington, D.C., and around the world on RFID--the technology and why there shouldn't be any concern with privacy.
Do you get threats from privacy advocates?
Nuti: No, I haven't directly received any letters or threats. In the 1970s, people were concerned about the same privacy issue with barcodes. And of course, once people understood the technology, their concerns went away. The same will happen with RFID.
After taking the helm at Symbol Technologies, what magic did you weave to turn the company around?
Nuti: I didn't weave any magic. I had a good management team, and they've done a great job with our product line. We focused on five things. The first was company culture. The second was operational processes. The third was vision, followed by strategy. Once we understood that, we developed our organizational structure to deliver on that.
The output was a good financial performance. We worked 24-7 for a few years on rebuilding our product line, our go-to-market strategy, services, capabilities and marketing strategy.
Did your experience at Cisco help in any way?
Nuti: Absolutely. At Cisco, I had a reputation for being "Mr. Fix It." I was shipped around the world to either build or restructure parts of the company. For many years, I had been doing fairly large-scale restructuring at Cisco. This certainly helps you, skills-wise.
But nothing really prepares you for a turnaround of this magnitude. This was--no hyperbole intended--maybe one of the largest or more significant turnarounds in corporate history in the last decade.
According to media reports, you engineered a plan to sweep out the "toxic culture" at Symbol. What was toxic before you came onboard?
Nuti: There was a toxic subculture in the company that was largely due to unethical management, but it involved very few people. The other aspect of the culture that we needed to deal with was how we essentially had "muscle memory" on how not to make money.
We did not make any profits from 1998 to 2002. Those were some of the biggest boom years in information technology history to not make money during that time frame. It was surprising, to say the least.
For six years, people were doing things and thought what they were doing was translating into profitable growth. It was only when we restated the financials that people found out. What they (the previous management) did was leading to a non-profitable company.
We had major behavioral and habitual changes that needed to take place inside the company (in order) to build "muscle memory" on how to grow profit from the bottom up. That required a substantial change in management effort. We restructured every business and function of the company. Out of 5,600 people in the company, we brought in 3,600 new people in two-and-a-half years.
We built our business systems up from a company that managed itself on Microsoft Excel to one that is connected globally with a set of applications that's used consistently on a global basis. And we spent a lot of money and time on leadership and people development to attack this notion of muscle memory.
Lastly, we set in place a very aggressive communications plan. We were very mind-numbing when it comes to ensuring the consistency of our messaging internally, in the company, and externally--so people would understand where we were going and how we were going to get there.
In terms of new product introductions, what were some of your big bets in recent years?
Nuti: We completely refreshed our entire product line. Two years ago, there were really only three businesses in the company: advanced data capture, mobile computing and wireless LAN.
We made two very large bets. The first was the acquisition of Matrics, which allowed us to move into the RFID space. The second was opening the mobility software division, which is focused on end-to-end value added solutions for the enterprise mobility architecture of capture, move and manage. Essentially at its core, it's a mobile and wireless LAN deployment and management system that would enable our customers to drive down total cost of ownership, as well as gain control of the mobile edge.
You were once touted as the heir apparent to Cisco boss John Chambers before you took over Symbol. What were your opportunity costs back then?
Nuti: I was very flattered to be considered as a possible successor to John. But by the same token, I think it's always difficult to follow a John Chambers. I wasn't interested in taking a $24 billion company to what was next.
I wanted to set out on my own and take a smaller company to the size of Cisco and challenge myself along those lines to achieve greatness on my own.
This interview was pitched as a rare opportunity to meet a high-profile technology CEO. How accessible are you to your employees and customers?
Nuti: I don't consider myself the CEO of Symbol. I consider myself an associate in the company. I don't think I carry myself as the CEO. I'm a pretty regular person.
I would love to spend more time with customers, and I will, now that we've become more external in our focus given the turnaround. I probably spend 30 percent of my time with customers today, but I'd like that to be 50 percent. And I spend probably 80 percent of my time with my associates. I'm rarely behind closed doors in my office at all. I'm a very hands-on leader, not a micro-manager, although some may disagree.
You have been described as a hands-on operator, with marketing savvy and unflagging energy. Now, where does that energy come from?
Nuti: (laughs) It comes from a passion for my work and my passion for the vision of the company. I genuinely believe in our company, vision and people. If you dig deep, it also comes from a great driver of very successful people: the fear of failure.
Your regular interactive meetings with top executives allow you to instill a learning culture at Symbol--how successful is that?
Nuti: It's working well. Symbol is very much a start-up. It is almost newly founded because of such substantial changes in the company. There has to be consistent interactive communication on a global basis, so that (1) people understand where you are going and how you intend to get there, and (2) you listen carefully to what the challenges are in achieving those goals.
Making customer satisfaction part of employee compensation--how did your staff react to that?
Nuti: Customer satisfaction and yearly performance are part of the bonus structure for everyone in the company. It's 25 percent of my yearly bonus, and that's not small.
When all is said and done, we put the money where our mouth is, and not many companies do that. It's only when you make it part of your employees' compensation that you will get the focus and attention you need on customer satisfaction.
In the past year, our customer satisfaction has gone up. In 2003, our customer satisfaction rating was 3.51 out of 5, and in 2004, it was 3.81 which is a fairly healthy jump year-on-year. Every year we dive deeply into the customer satisfaction survey results and come up with plans to address the top three to five functions that will improve customer satisfaction. We chart that throughout the year, measure our progress against that, and rerun the survey to see if we've improved.
Bonus DD:The big switch--from barcodes to RFID
ZDNet - Jun 1, 2005
... The buzz around Microsoft spending a lot of money developing their software and their patent infrastructure has ... It is Symbol's goal to lead in the RFID industry ...
http://it.asia1.com.sg/newsdaily/news001_20050604.html
dd: UA To Unveil Research Center For Hot Technology
http://www.nwaonline.net/articles/2005/06/07/business/03uacenter.prt
By Shea Van Hoy
The Morning News
A new research facility opening this week stations the University of Arkansas as a leader in the development of radio frequency identification technology, a university professor said.
The RFID Research Center will be shown to the public Friday when the UA will also hold a morning forum about the technology featuring representatives from major companies from Northwest Arkansas and beyond.
Twenty-two sponsoring members -- a group of retail, market and industry leaders -- are backing the center, according to a news release. These include: Wal-Mart Stores Inc., Tyson Foods Inc., J.B. Hunt Transport Services Inc., Hanna's Candle Co., ABF Freight System Inc., Intel Corp. and Microsoft Corp.
Opening the center makes sense in capitalizing on the business strengths of the region, said Dr. Bill Hardgrave, executive director of the center and of the Information Technology Research Institute and UA associate professor. Specifically, Wal-Mart has pushed suppliers to implement RFID technology to track pallets and cases of merchandise. An RFID chip emits a radio signal that is read by a reader device networked to a computer system.
The technology wasn't exactly dormant, but with Wal-Mart's interest it "suddenly exploded overnight," Hardgrave said.
He said Wal-Mart provided him an opportunity to work with the Bentonville-based retailer regarding RFID just more than a year ago.
Wal-Mart said in April that 100 suppliers met a January deadline for having RFID tags pallet- and case-ready. Company spokeswoman Christi Gallagher said the technology is being implemented with the shopper in mind.
"RFID will allow product to be on the shelf when the customer wants to purchase it," she has said. "Additionally, because the system will create pick lists for the associates, (they) will be able to spend more time on the floor helping customers and stocking merchandise rather than spending time in the back room looking for product."
Hardgrave said he envisions Fayetteville becoming a hub for RFID research and other companies are taking notice. The market for RFID is expected to grow to $2.7 billion by 2007, according to the American Business Journal.
"With Tyson as a supplier and J.B. Hunt a transportation company, it makes the research more holistic and not focused on a particular area," he said.
He said he and other faculty members made a list of companies they believed would benefit from sponsoring and sharing in the work at the center. He said most signed on.
The exposure from the RFID center is already paying off, Hardgrave said. He said the recent class he taught on the subject was one of the first in the country and attracted more than 50 students, with many more expected for the course when the fall semester arrives.
"It can provide for a lot of growth for the university based on the reputation it creates in the world of academia. The response from other universities has already been tremendous," Hardgrave said.
Other colleges such as University of Kansas and Massachusetts Institute of Technology are conducting RFID research but the UA should find its niche thanks to the new center, said Mark Roberti, editor of RFID Journal. Roberti will be in Fayetteville for the Friday opening, he said.
"The natural niche for the UA is going to wind up being RFID in retail. Wal-Mart certainly wouldn't mind that" Roberti said. "There is plenty of research (to be done) in that area."
He said studies at the UA could discover new RFID-based technologies not envisioned today by Wal-Mart or its suppliers. Roberti said a cycle could develop for careers in RFID technology because of the university and Wal-Mart working together.
He said showing prospective students an academic and real-world RFID future at the UA followed by employment in the RFID department at Wal-Mart should be beneficial for the university.
The center contains a 7,800-square-foot "live-environment" laboratory and will bring in faculty and students from the Sam M. Walton College of Business as well as agriculture, engineering, law and arts and sciences departments.
Hardgrave said there are also applications for RFID in areas such as security, both for humans and property. He said the National Football League even experimented with "contactless payment" via the technology at concession stands at some of its stadiums last season.
"I think we'll see the true value of RFID as a integrated network of sensors."
DD and nite nite: Advanced Standards May Propel RFID To Greater Adoption
Specs for high-end active tags and a bid to develop open-source software could see Radio Frequency Identification applied to sound alarms in high-end security applications as well as to track every two-liter bottle of Coke.
By Alexander Wolfe, TechWeb News
June 6, 2005
URL: http://www.informationweek.com/story/showArticle.jhtml?articleID=164300803
RFID, the tag-based, asset-tracking technology that's being propelled into widespread deployment thanks to its adoption by Wal-Mart and the U.S. Defense Defense, is about to get an additional boost from several advanced standards efforts as well as bid to take RFID into the open-source world.
The efforts come just as RFID has begun to shed its reputation as a touchy technology, for which readers had to be carefully positioned lest they miss tags attached to shipping pallets and corrugated boxes. "Many of the problems that plagued the first pilots have been resolved," said, Mike Wills, general manager of the RFID business at Intermec Technologies Corp., in an interview. "Experiences will be significantly different, as people begin to implement [RFID] generation 2. They're going to see a measurable difference."
Generation 2 RFID, which refers to a spec defining a protocol for communication between tags and readers, was approved last December by the RFID standards body known as EPCglobal. Now, that standard has been submitted to ISO, the international standards body, where it's undergoing review for approval as a worldwide standard.
"We should see adoption votes take place throughout the summer," explained Wills. "There's a meeting coming up in the next few weeks in Asia to review the [spec]." If approved, the EPCglobal Generation 2 spec will take on an additional designation as the ISO 18000 part 6c standard for passive RFID in supply chain applications.
RFID is about to get a separate software boost from the newly formed Radioactive Software Foundation, which is looking to develop a suite of open-source RFID software that conforms to the EPCglobal's RFID standards. The foundation was established in June in Toronto by two RFID software houses, N4 Systems of Toronto, and Refactored Networks of Kennesaw, Ga.
The availability of such software should spur new players to join the burgeoning collection of RFID vendors. Along with Everett, Wash.-based Intermec, leading suppliers of RFID tags, readers, and complete systems include Symbol Technologies, Philips, Texas Instruments, Red Prarie, EM Microelectronic, Alien Technology, Impinj Inc., and, perhaps surprisingly, networking giant Cisco Systems, among others.
As RFID moves upscale, two other standards efforts now taking shape will assume greater importance. Currently available standards cover only so-called "passive" RFID tags, which are the cheapest and most pervasive implementation of the technology. However, there are two other, more capable but pricier, types of RFID tags, known as semi-active and active. Semi-active tags have an internal battery, which give them longer life and greater range than garden-variety passive tags. Full-blown active tags can add features such as real-time data tracking and built-in motion detectors. "If somebody tries to break into a secure cargo container, active tags have the ability to signal an alarm," explained Wills. "There's a multitude of high value, high security applications where I might want to have [tags with] two-way communications."
In real-world RFID applications, all three tags have their place. "Will there be a blending of technology? Sure, for example, an active tag can become a relay for telling me what's inside that cargo container, down to every passive tag that's inside of it," said Wills.
With the standard for passive tags now in place, Wills said the EPCglobal group has turned its attention toward nailing down specs for their more complex cousins. "They are now beginning to assemble the working groups and steering committees," said Wills. "They're moving into semi-active and active."
Along with availability of standards, a stumbling block toward wider RFID deployment has been the cost of the tags. Currently, passive tags cost between 30 cents and 45 cents in quantity, according to Wills. However, as more vendors entering the RFID equipment market, prices are poised to come down. "I think on the supply chain type of platform, you're going to see prices cut in half in the next year and a half," Wills said.
By 2009, tag prices could go as low as 10 cents, according to some market studies Wills has seen. "I think the ultimate goal is a price point that allows retailers to go to item-level," Wills said. In this scenario, an RFID tag is embedded in every two-liter bottle of soda, as opposed to today's box- and pallet-level usage model.
http://informationweek.com/story/showArticle.jhtml?articleID=164300803
Bonus dd: Foundation to Create Free EPC Software
The RadioActive Software Foundation plans to develop software for all EPCglobal RFID standards and make that software available to the general public
http://www.rfidjournal.com/article/articleview/1634/1/1/
ot comment:Posted by Hemos on Monday June 06, @09:25AM
from the distributed-communication-an-internet-does-not-make dept.
An anonymous reader writes "RFID Journal has an artricle about how an open source foundation is creating a new Internet based on RFID tags. 'The founders [RadioActive Foundation] liken the EPCglobal Network as a whole to the Internet, with RFID tags acting as URLs, and the tags' associated data being the Web site for that tag . The software the foundation develops, Michael Mealling adds, will act similarly to an Internet search engine. With Discovery Service software, for example, companies will be able to search for an RFID tag without requiring connected links between each point of the tag's travels.' Pretty neat concept, probably decades away."
More Bonus dd:Intermec makes RFID announcements
(another rfid player and long time scanorammer..lol):http://mrtmag.com/news/intermec_rfid_051305/
ot: ok ok, I think I just validated to myself (and my wife who doesnt know yet, lol)and justified to myself I made a good decision today near the close via the great dd here to pick up up another 3500 shares jmho...eom
ps...I am thru buying, cant afford anymore...eom
RU Ready For RFID????: Electronic product coding (EPC) and radio frequency identification (RFID) are transforming today's business environment, offering increased accuracy and visibility, real-time decision making, and greater responsiveness to customer demand.
But, these are complex and still-emerging technologies that require high levels of expertise to implement correctly to achieve measurable benefits.
Attend one of these three complimentary one-hour interactive Web seminars from IBM® and Symbol Technologies:
http://www-1.ibm.com/industries/wireless/doc/content/event/upcomingevents/1310372104.html
ot: Is It just Me OR A paradigm SHIFT IN PROGRESS????
Or do I still see nothing to get in our way to realizing our dreams with this lil gem called neomedia???...lol, so much to digest every day, but while this is unrelated at the moment to neomedia although this is the "space" we are in imho...but when GOOGLE takes over the top spot in market cap for worlds largest media companies (NOT TO MENTION a variety of OTHER CO'S LIKE MR. jACK wELCHES FRIGGIN gmgm, ETC ETC AND IN ONLY WHAT FRIGGIN 6 YEARS????......well, imo, we are simply waiting for the mother ship connection at club NEOM or are we simply on track to be gigger, much gigger than anyone could ever imagine...;)???..or can it be that we are all gonna be proved wrong????? STAY TUNED, FILM AT 11!!!lol
LONG AND STRONG AND ENJOYING THE ANTICIPATION....
sonofgodzilla
ot: cloud8, sorry, I replied to you inadvertantly, ooops, meant to reply to "none"...anyway, hope all is well since I have you on the thread)eom
dd: Local.com Prepares To Revolutionize Local Search
http://www.webpronews.com/insidesearch/insidesearch/wpn-56-20050606LocalcomPreparesToRevolutionizeLo...
Chris Richardson / Staff Writer / 2005-06-06
According to many who follow the search industry, local search is in a position to be one of the more requested and on demand features available. The ability to locate various points of interest tailored to a local setting (zip code, city, etc.) is quite attractive to visitors and search users.
Because of the growing popularity of local search, the iron is hot for fully functional engine that concentrates specifically on finding locally relevant information to strike. Evidently, the governing body at Interchange, parent company of LocalDirect.com, feels the same way.
Interchange is preparing to launch Local.com, a local search engine brand that will begin by focusing its efforts on the United States and Europe, with ideas of making it available globally. The goal for Interchange and Local.com is simple, to offer users the best local search engine available, and considering some of their ideas, this goal seems to be attainable.
Local.com is scheduled for launch in third quarter of 2005, and when it does become available, it will come complete with SMS Local, a local search service available to mobile phone users; a comprehensive index, based in part on the LocalDirect.com search index; advertising services provided by Interchange's ePilot program; and the pledge to concentrate solely on local search.
This means that unlike Google, Yahoo and their competitors, there will be no video search, no Group services, no email service and the like. Instead, the goal of Local.com is to offer the most satisfying local search service available. To accomplish this, Interchange will focus solely on improving and enhancing the local search experience. This is made even more evident when you notice the aforementioned features that will be available when Local.com launches.
Of course, the amount of features being offered doesn't mean much if the basic search experience is unsatisfying. To secure themselves against this occurrence, Local.com is offering one the most complete local indexes available. As indicated, a large portion of Local's index will be acquired from LocalDirect.com, although this may not be quite as comprehensive as Interchange wants.
In order to bolster the LocalDirect index, Local is planning to unleash a web crawler based on Interchange's Keyword DNA local-search technology. Local's crawler will perform similarly to web crawlers belonging to other search entities.
Another area of concentration for Local.com is the delivery of relevant results to users. Because local search is predicated on location, when you search a business or personal interest in Dallas, Texas, you don't want results originating from Houston to show up in the query results. To prevent this from occurring, Local.com has setup filters to ensure results are as relevant location-wise as possible. This means if you were searching for a mechanic in Louisville, businesses out of Lexington would not appear in the query results.
Heath Clarke, Interchange CEO, shared his vision for Local.com in the following statement, "Our goal is to make Local.com the number one destination site for consumers searching for local businesses, products and services. We intend to build Local.com into a brand that consumers trust to deliver highly relevant local-search results. User experience is of paramount importance to us as we seek to redefine what local search means."
Look for an in depth look at Local.com when Interchange officially launches.
ot comment and dd:We're living in a Google world, Nikesh Arora:
(SOG Comment fwiw...ps, I read this piece below while I caught in my multitasking side of my eye that GOOG is up to 291.00 +11.00, and I dd'd this am during breaks and decided the reward to risk ratio here is too great imho and decided to justify another 3,000 shares I plan to pick up this week if I can clear a few bucks so I can sleep better at night alhough I am a bit over my budget I am done buying and can't wait for the fireworks to begin))...)
The internet search engine is only seven years old, but it's already worth more than General Motors and Disney combined. Not only that, but its staff get free food and bring their pets to work. Ian Burrell meets its new European director
06 June 2005
Amid the hurly-burly of London's Charing Cross Road, where the gutters are clogged with fast food litter and discarded leaflets for cheap English courses, a dingy side street beside the famous Astoria music venue leads to one of the most important new sites in the British media landscape.
Behind an imposing gate is an ultra-modern block that takes the visitor - via a talking lift - to offices where the £43bn entity known as Google Inc is devising its strategy for becoming a feature of the daily life of every British household.
This is the British "Googleplex", where the reception area is furnished with a bean bag in corporate colours beneath a palm tree and where passing members of staff help themselves to free smoothies from the fridge and take in the latest headlines projected onto the wall direct from Google News.
The man driving Google into the British consciousness is Nikesh Arora, 37, who was recently recruited by Google founders Larry Page and Sergey Brin in an interview conducted among the artefacts of the British Museum. Brin and Page, who set up Google in 1998, are still only 31 but each has amassed a personal fortune of £6bn.
"We walked around. We looked at the exhibits and a lot of our conversation was about the Rosetta stone," says Arora, referring to an Egyptian artefact that dates to 196BC and is inscribed in three languages. The Greek wording enabled scholars to decipher the hieroglyphics and was a major breakthrough in Egyptology. Arora says: "We discussed how it was an amazing parallel to Google translating its services around the world."
As this informal interview concluded, Arora left the museum but Brin continued to tour the exhibits. Ten days later Arora learned that he had the job.
Google now operates in 109 languages. The company, which last month saw its share price rise to a record $255 (treble the $85 it floated at just last August) is already worth more than General Motors and Walt Disney combined. Arora, who is in charge not just of the UK operation but the whole of Europe, is responsible for a network of nine offices from Stockholm to Madrid.
"We are at the tip of a consumer phenomenon and we haven't seen anything yet," he says. "It's challenging because we are growing really, really rapidly and we are having to hire a lot of really smart people and train them into the Google way of doing things."
This is a company where the staff bring their dogs into the workplace, so canines such as Rufus, Jasmine and Floyd are regulars in the office.
"We are pet friendly and we make sure that people get to eat when they work. We have fresh fruit and cereals here for everybody every morning. People get their food free here. It's the little things that make for a happy workforce and happier people are more productive," says Arora. "Our founders have preserved the culture of the company since its inception because we believe our way of doing things is our competitive advantage."
If Google staff struggle to find a childminder, Arora, who lives in Kensington with his wife and seven-year-old daughter, says he tells them: "Bring your kid here."
Google has already become part of modern culture, taking a place once occupied by the family dictionary, the encyclopaedia collection, the phone book and more. Comedian Dave Gorman has written a best-selling book and enjoyed sell-out tours describing his Googlewhacking adventures (see box).
At last count, Google had indexed a staggering 8,058,044,651 web pages on its servers. Arora thinks this is just the beginning. "We are at the tip of a trend," he says. "Less than 10 per cent of the world's information is online today. The remaining 90 per cent is still out there on television programmes, on radio stations and in books in libraries."
Google intends to put the texts of books, the scripts of radio and television programmes and films (along with the pictures and sound that go with them) into formats where they can be sifted and sorted by the world's most famous search engine. A new service called Google Print is digitising 15 million books from some of the most prestigious libraries in the world, including that of Oxford University.
Arora, who is the first Google vice president to be appointed outside the US, says: "We are taking all the books out there so that people can go and search out information and either go and buy the book or get it from a library."
He claims that rather than making libraries and bookshops redundant, Google Print will re-energise the interest of younger generations in classic texts. "The more that is available online, the more people will go and look at works that they didn't know about and the more they will buy them," he claims.
Google Video, another project under development, will enable users to search home videos, films and television programmes (using scripts, captions and programme guides). Arora says: "If I miss a programme at 9pm on a Sunday why should I have to wait until the cable gods show it again? We provide a platform and work with the partners who have the content to make it accessible to customers."
Arora is a cultured man with a globetrotting wanderlust (he came to London via America, Germany and India) and a healthy disrespect for cosy convention that seems to embody the Google spirit. "The moment I stop believing my management I leave," he says. "Life's too short - I'm giving more time to my company than to my family. It's very important that I love the people I work with and work for."
He chooses to highlight a key phrase in Google's company ethos: "Do No Evil". Arora says: "People say 'what does that mean?' and that's an interesting question in itself because it means to everybody in the company what they think is implied by the statement. So a lot of people make sure that we don't put the interests of anybody else before the interests of the customer - and that's the phenomenal force of Google." He acknowledges that Google has "a responsibility to our shareholders" but claims "we are not a commercially oriented organisation".
Arora is sitting in Google's "Bolan Room", beneath a brightly coloured screenprint of the 1970s rock legend more associated with Telegram Sam than the worldwide web. Bolan crashed his Mini into a tree on Barnes Common in 1977 when the internet was little more than a plaything for a handful of scientists at the US government's Advanced Research Project Agency.
In a few short years, the internet, says Arora, has moved from being "an interesting distraction" to something that is "ingrained in our lives". Today's children, he observes, are "going to do three times the things we do on the internet. We just don't even know it". He cites his own family as examples of the growth of communications technology. His 68-year-old father texting him "HIHOWAREU?" at about the same time that his four-year-old daughter rejected a gift of a toy phone because it lacked a SIM card. "What's going to happen in future is that the whole notion of connectivity is going to become our lives," he says.
In its most recent quarterly results Google posted profits of $396m, up from a relatively humble $64m the same quarter a year ago. The extraordinary level of growth (Europe now accounts for more than 20 per cent of revenues) creates problems, particularly with new recruitment. Arora says, "We are trying to cope with our success ... move as fast as we can to find really smart, qualified people."
Google's advances have provoked fears that it is planning global takeover by stealth. French commentators have levelled accusations that the California-based company is engaged in "cultural imperialism".
Arora won't have it. "When you go to Google.fr it's a French site. All the content is in French and when you do a search it results in content in France. It happened to be a technology platform we developed in Mountain View, California."
In France, he notes, 60 per cent of consumers use Google as a search engine - "the consumers are voting with their fingers". Google says it drives around 60 per cent of searches in the UK but in Spain the company already has a stunning 96 per cent of the traffic.
The company is continually developing new features to add to its basic search engine. Google Local is a new addition in the UK, which appears to provide direct competition for existing online services (such as Multimap, Streetmap and 192.com) that offer information on local shops and services and route maps. Arora is unapologetic, describing the service as "a fascinating example of sometimes you don't have to be first, you just have to be very good'". He continues: "It's a combination of mapping products, of Yellow Pages-type products, of local directory products and driving directions all poured into one."
Google is working on improving the service by installing Google Earth technology, already available in the US, that allows consumers to picture their route using satellite images.
"The UK is a fascinating market. It picks the best of both worlds - a lot of trends migrate to the UK because of the lack of a language barrier and it is still seen as the gateway to Continental Europe," says Arora. "The UK is one of the top markets for Google in terms of world focus and is the landing base for us in Europe where we try all these new things."
More controversially it is planning an assault on the world of email with its recently launched Gmail, which provides users with BBC headlines, local weather forecasts and share prices on a familiar Google page that combines search engine with email. Arora is convinced it will be a success but says: "Talk to people around the world about whether there's room for another email concept and they say 'Everything that could be done has been done'."
It is behaviour like this that enrages rivals such as Microsoft (which has vastly greater resources and has already promised to "catch up and surpass Google" in search engine technology) and Yahoo! (which has a powerbase of 100 million registered email users and which is not far behind Google in terms of searches).
Google has made its gains without charging users for any of its services. It makes all its money from advertising, though it does not charge advertisers if nobody clicks on an ad. "We let the consumers decide if they want to click on an ad and we don't demand payment until somebody clicks on an ad," says Arora. "That's an important innovation in the world of advertising - we are not going to thrust ourselves on anybody."
Arora says that while television might now have more than 50 per cent of advertising share, it is not so long ago that TV didn't exist and print media had the cake to itself.
"As new media arrive, they are initially sluggish but they reach a tipping point where they become mainstream and advertisers realise they are a place where people don't just go for fun but for serious business," he says. "Advertising should follow the amount of consumer time spent with a medium - that's what happened with television and radio and that's what will happen with the internet."
He says that advertisers that watched Celebrity Love Island cannot be sure how many people watched their commercial, unlike internet advertisers which can determine the time a consumer came to their site and what they looked at once they were there.
Google is so effective that it does not need to advertise itself, he claims. "Google doesn't spend money advertising; it spends money making sure the product is the best and that consumers use it. As a consequence the brand gets stronger."
It is out-of-the-box thinking like this that drew Arora to Google. He says: "Most big companies are fixated with short-term quarterly earnings. But Google says businesses are cyclical and require investment at certain times and we are going to do what's right for the business, and if that means this quarter our numbers are different from the last quarter we will tell you why. I thought, 'This makes perfect sense - why don't more people do this?'"
Arora went to school in Varanasi, the holiest of Indian cities, with its ancient steps leading down to the sacred waters of the River Ganges. Varanasi is revered in India as "The Home of All Knowledge", a title which younger generations are already conveying on the Great God Google. From a young age Arora had "the travel bug in my feet", the result of a childhood spent on the move as the son of a leading figure in the Indian air force.
So at the age of 21 he left India behind and headed to America. "I had two suitcases and nothing else to my name," he remembers. Taking a position at Boston's Northeastern University, he "had to fend for myself", with jobs taking notes for disabled people, guarding the university dorms, teaching corporate finance to adult education students and, for two days, working at Burger King. Business school led to prestigious jobs as an analyst in the telecoms sector, but in 1999 Arora decided life had become too comfortable, packed his bags again and headed for Europe.
"I enjoy working in places which are very fast-moving and where things are changing. As my life takes on a steady pattern I do things to undo the pattern," he says. He took a small flat in Bonn, working as a consultant to Deutsche Telekom before he moved to London and started up a mobile multimedia company called T-Motion, which was inspired by the way Japanese consumers had embraced the growth of mobile phone technology. The company, based in Minories in the City of London, was subsumed by T-Mobile and Arora was given a position on the phone giant's board.
High-flier though he undoubtedly is, it is a big step up to his role at a company that has evolved in seven short years into one of the most powerful brands in the world. "The challenge and opportunity we have is that Google has done in the past five to seven years what it has taken many companies 15 to 20 years to do. I'm sure there are things we have done quickly on the way which we need to go back and make sure they are more robust," he admits. "Three years ago we had only a handful of people in Europe."
For a company that is apparently dedicated to the dissemination of every nugget of information, Google is extraordinarily reticent to release statistics about its own operations. Asked how many of Google's 3,500 staff are based in Europe, Nikesh promises that "we should be able to resolve that for you" but colleagues later say they cannot provide a figure. Google itself might have responded: "Your search did not match any documents."
Arora admits he didn't like London at first but now, his childhood love of cricket reawakened, he says, "I wonder how I will ever move out of this city - there's so much to do."
One way or another he has a lot on his plate and Google founders Brin and Page will be monitoring his progress carefully. In the meantime, he has some recruiting of his own to do. He says, "Last year our revenues grew 80 per cent, so you have to grow the staff at a high double-digit number. I have to get them to understand the Google way of doing things 5,000 miles away. In California you can smell and breathe the air every day and you become Google-ised in a much shorter period of time. My challenge is to preserve that culture and make them feel part of the Google family."
http://news.independent.co.uk/media/story.jsp?story=644506
DD:Invertising: The Future of Advertising When Consumers Control the Media
by Rick Bruner, Monday, Jun 6, 2005 5:00 AM EST
THE LATIN ROOT OF "ADVERTISE"--ADVERTERE--LITERALLY means "to turn towards." It is the same root for the word "adversary." This sense of confrontation at the essence of advertising may be what undergoes the most radical change in the next decade of marketing sponsorship.
Contrary to popular wisdom, consumers do not hate advertising per se. People continue to buy through catalogs that arrive in their mailboxes; search advertising is booming because people click ads targeted to their queries; and we can all hum a dozen favorite TV jingles.
Yet, in this world of hyper-fragmented media and too many marketing messages, consumers are acting to avoid the overload, paying for the unadulterated media they want, and investing in technology to strip out unwanted ads. With the skyrocketing popularity of blogging and TiVo, iPods, NetFlix, and peer-to-peer networks, consumers are starting to expect more control over their entire media experience, a phenomenon at odds with interruptive advertising.
The popularity of consumer-controlled media arguably has more to do with consumers' desire for the exact media they want when they want it than it has to do with ad avoidance. Nonetheless, the same tools that enable consumers to skip ads if they want to, raise the bar considerably for advertisers.
Procter & Gamble Chief Marketing Officer Jim Stengel told the audience at the American Association of Advertising Agencies' media conference last year: "All marketing should be permission marketing. All marketing should be so appealing that consumers want us in their lives."
"Permission marketing" may not be the best phrase to describe the new era of marketing that is already beginning to take shape. "Service marketing" may be closer to the idea:
--Helping people make purchase decisions when they are seeking advice, such as with search marketing.
--Providing regular product and category information when they request it, as in the case of opt-in e-mail programs.
--Delighting with ads featuring entertaining, funny, intriguing, and challenging content such as adver-movies, adver-games, and other forms of adver-tainment that consumers go out of their way to download or copy the URLs in order to enjoy them repeatedly and forward them to their friends.
Let's call it "invertising," referring to various forms of marketing that consumers invite into their lives.
No other advertisement in any medium in the last 10 years has generated the same amount of excitement in the ad community as the wacky interactive Web site SubservientChicken.com, which promoted Burger King's TenderCrisp sandwich in April 2004. The site allowed users to command the man dressed in a chicken suit to do silly things like "come hither."
A year later, the site remains the subject of analysis in many publications including The Wall Street Journal, The New York Times, Forbes, and The Economist. Why? Because it blended so many of the features that make the Internet a unique marketing opportunity--interactivity, seamless online video, artificial intelligence, irreverence, instant blogability, and the irresistible need to e-mail it to five of your closest friends.
Approximately 14 million people visited the site after an initial e-mail to 20 friends of the developers. The TenderCrisp sandwich is outselling the company's "Original Chicken Sandwich," and Hoovers.com reports that Burger King's revenues rose 18 percent in 2004 to $1.3 billion.
Of course, a stand-alone Web site that depends on viral word-of-mouth alone to prove its success is hardly a scalable model for most advertisers. Jeff Benjamin, interactive creative director of Crispin Porter + Bogusky, the agency behind Subservient Chicken, agrees that ad campaigns should have an important role in viral campaigns of the future. "It's a hard proposition to say that I'm going to spend all this money to design a great viral campaign and then put my faith in e-mailing it to 10 friends to spread the word. You can't count on that."
Benjamin continued: "We realized that using traditional means to support a viral program helps to ignite it, at least in the beginning. Using traditional ads helps reach those trendsetters, like bloggers, more effectively."
To this end, Crispin Porter is including a Web ad campaign to support the launch of its lastest viral sensation for Burger King, SithSense.com, which features a game of 20 Questions with Darth Vader--with often eerily accurate results. Check it out; it's one ad you'll want to revisit and send to your friends.
Rick E. Bruner is Director of Research at DoubleClick.
http://publications.mediapost.com/index.cfm?fuseaction=Articles.showArticle&art_aid=30840
BONUS DD:The Difference Between Search, Behavioral, and Contextual
by Anand Subramanian, Thursday, Jun 2, 2005 6:00 AM EST
SEARCH. BEHAVIORAL TARGETING. CONTEXTUAL ADVERTISING. These are just some of the terms floating around in cyberspace within the complex industry of online advertising. As the Internet evolves and new technologies emerge, marketers are under increasing pressure to spend their budgets and choose online ad solutions wisely.
http://publications.mediapost.com/index.cfm?fuseaction=Articles.showArticle&art_aid=30698
Coffee break DD: Stepping Up Search: How Behavioral Targeting Can Enhance ROI
by Scott Ferber, Monday, Jun 6, 2005 5:00 AM EST Commentary
WHAT BETTER WAY TO IDENTIFY a potential customer than by his or her own actions? Search engine marketing is one way to do it. By purchasing paid listings, advertisers get their Web sites in front of self-selecting consumers who are likely to be good leads for business. Search is a great way to get clicks, but what then? How can marketers be sure those consumers are given every possible opportunity to convert into buyers?
<> With the popularity of search engine marketing resulting in continually increasing keyword prices, these questions are more important than ever. And behavioral marketing may hold the answers, enabling advertisers to turn potential customers generated by search into bottom-line conversions. According to eMarketer, by the end of 2005, spending on behavioral targeting will reach $934 million and will account for 8.3% of all online advertising spending. If 2004 was the year of search, 2005 is the year of behavioral targeting. Although search will still account for an estimated 38.5% of total online spending, behavioral targeting is becoming a critical tool for getting more from every search dollar.
The smart way to search
As search listings become more costly, success depends on taking advantage of every possible opportunity for optimization. Marketers who still depend on manual or rules-based bidding platforms are not fully capitalizing on their search listings, and it's costing them. Switching from a manual platform to an automated one enables marketers to manage terms, track results, and update bids on a frequent basis based on keyword performance, ensuring that every penny is spent wisely.
Similarly, most rules-based platforms determine bids on a term-by-term basis, which means they fail to account for term relationships within a campaign. Marketers are wise to invest in technology that optimizes all terms across engines--individually and as part of a portfolio, according to overall goals, such as budget, cost per conversion, sales, or margin.
Simply tracking clicks is another trap many marketers fall into. Only conversion tracking can measure which terms are resulting in actual sales--a better basis for bids to achieve cost-per-acquisition goals.
Behavioral basics
The notion behind behavioral targeting is relatively simple. Using anonymous data, it enables marketers to deliver ads to consumers based on their recent online behavior--i.e., what they recently bought (or basketed and didn't buy), where they surfed, or what they searched for. Based on this information, ads can be tailored to drive users back to the advertiser's site to complete the desired registration, purchase, or other action.
Most marketers leverage behavioral targeting through specific publishers, targeting certain behaviors across a publisher's Web site. Better yet, advertisers can market across groups of Web site publishers by investing in a network solution. Networks aggregate multiple Web sites to form the desired audience, such as consumers who are interested in travel-related content.
However, using behavioral targeting to track activity solely on external Web sites ignores valuable activity on the marketer's own site. Tracking user behavior on one's own property makes remarketing possible, and can dramatically increase the likelihood of conversion. Research from Advertising.com indicates that this type of network-based behavioral targeting can improve click-through rates anywhere from 94% to 225%--and conversion rates up to 3,000%.
Beyond search
Both search and behavioral targeting are rooted in consumer action. They capture consumers with a demonstrated interest in, for example, travel to Florida, whether they actively search for "Florida vacations" or simply visit the Web site of a Florida resort. However, search is limited to simple text listings, with little room for personalization. Behavioral targeting can push search to the next level by employing graphic ads featuring custom content based on user activity. Combining these two tactics is a powerful way to convert consumers who could easily be lost using search tactics alone. For example, behavioral targeting can be used to convert consumers who clicked on a search listing, but for some reason did not purchase.
An integrated search + behavioral campaign might work like this:
1. Consumers enter the term "Florida vacation" into a search engine. Through search engine marketing, you can ensure that your listings appear among top search results.
2. Consumers click on your listing and visit your Web site.
3. After consumers exit your site, you can deliver targeted ads to those users based on their site activity, as well as their keyword searches. This activity can include: clicked-but-did-not-purchase, abandoned shopping cart, purchased a product, etc.
Improving performance
Even if the consumer clicks on your search listing and leaves your site without booking, he or she may still be looking for "Florida vacations." Or, for example, if a consumer purchases airfare to Florida via your site, he or she may be also still be interested in booking hotel reservations. Behavioral targeting enables sequential messaging to convert these in-market consumers. You've paid a lot to attract that customer through a search engine--don't let him slip away. Behavioral targeting can dramatically increase the returns on your search investment by boosting the conversion rate of visitors to your site--i.e., the number of consumers that click on your search listing and actually book a flight, hotel, etc. In addition, it enables you to track which keywords result in an actual sale (versus just a click). That provides valuable insight for assessing the value of your terms and bids, making your search investment yield better returns.
Search engine marketing remains a powerful tool in the online marketer's arsenal, but with costs on the rise, it pays to make the most of every click generated. Behavioral targeting is a smart, cost-effective, and proven way to do just that
Scott Ferber is CEO of Advertising.com.
http://publications.mediapost.com/index.cfm?fuseaction=Articles.showArticle&art_aid=30838
dd: AT&T, Microsoft Form Alliance
JUNE 06, 2005
BEDMINSTER, N.J. and REDMOND, Wash. -- AT&T and Microsoft Corp. today announced a groundbreaking strategic alliance that is expected to revolutionize the development, deployment and delivery of next-generation Internet Protocol (IP)-based communications services.
The alliance leverages the far-reaching AT&T global IP network, which can be accessed from 149 countries, and Microsoft® Connected Services Framework, an integrated software solution that enables the rapid delivery of converged communications services across multiple networks and end-user devices. Using Connected Services Framework, AT&T will be able to dynamically create new network-based IP services and applications that can be deployed when and where they are needed.
In addition, the two companies committed to developing a broad array of network-enabled right-time communications services during the next five years that will focus on messaging, collaboration, media and business applications. These services will expand on AT&T’s existing IP services portfolio, including the company’s recently announced Dynamic Network ApplicationsSM (DNA) portfolio, and Microsoft’s set of hosted collaboration, communications and business applications, and will drive the development of other service bundles.
One of the first goals of the five-year road map will be an effort by Microsoft to Web services-enable AT&T’s voice over Internet protocol (VoIP) service so it can be delivered through the Microsoft Connected Services Framework to enterprise customers along with other communications services. This would give AT&T DNA end users click-to-dial capabilities within any Microsoft Office application.
Through these initiatives, enterprises will gain unprecedented access to and control and management of their IP applications.
This alliance will enable AT&T to leverage Microsoft Connected Services Framework and the innovation of the 6.5 million Microsoft developers and more than 70,000 independent software vendors developing on the Microsoft platform to more rapidly develop new, integrated IP communications services that help enterprises drive revenue growth. These applications complement AT&T’s intelligent, application-aware network, which enables customers to optimize application performance in a dynamic, security-enhanced, globally distributed, virtual environment.
“Today’s announcement is yet another milestone for AT&T’s strategy to deliver next-generation services atop our application-aware IP network. These services will enable enterprises to implement integrated collaboration, messaging, VoIP and conferencing services without the capital investment that locks them into solutions that are not future-proofed,” said Dave Dorman, chairman and CEO of AT&T. “It moves to a new industry level AT&T’s intent to deliver to businesses worldwide the promised vision of converged IP-driven services via the world’s leading global network. As global commerce increasingly relies on the networked enterprise to move business forward, its significance can’t be overstated.”
“AT&T is recognized worldwide as a technology innovator, and the strategic alliance we’re announcing today will extend its leadership,” said Steve Ballmer, chief executive officer of Microsoft. “We’re delighted to be partnering with AT&T to develop advanced, software-powered communications services that will create great new opportunities for its customers.”
Microsoft Connected Services Framework is an integrated software solution for building and managing complex services using a service-oriented architecture (SOA) and Web service interfaces. Microsoft Connected Services Framework allows telecommunications operators to aggregate, provision and manage converged communications services for their subscribers, regardless of network or device.
AT&T will deploy Microsoft Connected Services Framework as the foundation of its Microsoft .NET-based SOA, which integrates an array of interoperable Web-based, functional capabilities in a simplified, streamlined manner. This will enable AT&T to provide a consistent service interface to its back-office systems for delivering fully managed, on-demand IP communications services. As part of the alliance, AT&T has become a founding member of Microsoft’s Connected Services Framework Customer Advisory Board and will help shape the development of its road map priorities.
AT&T delivers the sophisticated networking services that businesses need to compete effectively and efficiently, as evidenced by the customers the company serves, including virtually all of the Fortune 1000 and all of the S&P 500, backed by the world-renowned research, development and intellectual property of AT&T Labs. Through this initiative, AT&T will be able to drive network-based services and applications across its deep customer base, leapfrogging the competition.
Over the last four years alone AT&T will have invested over $10 billion in capital expenditures to update its network and integrate systems, while further rationalizing cost structure and growing next-generation services. With Microsoft Connected Services Framework, AT&T’s application-aware network is being enhanced by a unique managed application software infrastructure that is intended to ultimately allow any business, anywhere in the world, to plug any application on any device into the company’s IP-enabled multiprotocol label switching (MPLS) network. As a result, enterprises will be able to better control and manage their IT infrastructure, and receive real-time application performance management capabilities, supported with the global reach, scale, reliability, security and performance they’ve grown to expect from AT&T.
AT&T’s Managed Application Infrastructure will enable individuals to maximize their collaboration and messaging needs through real-time synchronization. For example, a once-static document could be shared via a portal and not only display the author’s name, but also the author’s presence, availability and preferred communications method at that moment, including e-mail, instant messaging and voice. With a simple click, documents could be shared through a Web conference among several individuals, and changes to the document could be shared across multiple end-user devices and in the format preferred by the end user. Empowering people to share and communicate through dynamic and flexible means enables more rapid response rates and real-time productivity gains.
AT&T Corp.
Microsoft Corp.
http://www.lightreading.com/document.asp?doc_id=75059&print=true
Good DD for next Weekend:Wireless/Mobility Solutions for Service Providers http://www.cisco.com/en/US/netsol/ns341/ns396/ns177/networking_solutions_white_paper0900aecd801aa448...
Cisco Position on WiMAX and Related Technologies for Mobile Operators
pdf version: http://www.cisco.com/application/pdf/en/us/guest/netsol/ns177/c654/cdccont_0900aecd801aa448.pdf
SOLUTION OVERVIEW
THE CISCO POSITION ON WIMAX AND RELATED NEXT-GENERATION RADIO TECHNOLOGIES FOR MOBILE OPERATORS
WiMAX will be one of several high-speed wireless WAN technologies seeing broad deployment. The others include HSDPA, EV-DO, 802.20, and a variety of proprietary solutions. Cisco® has no current plans to build WiMAX base stations or base stations using any other WAN radio access technology. Where Cisco will participate is in partnership with RAN vendors. Cisco will provide IP technology for next-generation base stations, and our RAN partners will provide the RF component. Cisco will also provide the IP infrastructure to network these next-generation base stations together, and Cisco will provide the IP services layer.
CISCO SOLUTION SET FOR MOBILE OPERATORS
The primary focus for Cisco Systems® in the mobile wireless space is to provide the IP infrastructure and services support for mobile operators. This solution set includes Cisco Mobile Exchange, which supports service access control, deep packet inspection (for billing, data mining, and lawful intercept), mobile IP, security, and packet gateways (the Cisco Packet Data Serving Node [PDSN] and Cisco Gateway GPRS Support Node [GGSN]). It also includes IEEE 802.11 equipment to support public wireless LAN installations, cell site routers to support IP-based backhaul, the Cisco IP Transfer Point to support Signaling System 7 (SS7) over IP, as well as switches and routers for backbone infrastructure.
Cisco works to enable these services regardless of which radio access technology is used. Furthermore, Cisco believes that the best coverage model for most mobile operators is a combination of wireless LAN and wireless WAN technologies. Different tools are required for different jobs. Wireless LANs provide very high performance in a local area, wireless WANs provide ubiquitous access in the wide area, and mobile IP is the glue that can bind them together into a service offering.
ROLES OF WIRELESS LAN AND WAN TECHNOLOGIES IN THE MOBILE OPERATOR'S NETWORK
The dominant technology for wireless LANs is based on the IEEE 802.11 standard. This technology is widely deployed, is cost effective, is fast, and uses unlicensed spectrum. This last item has significant implications for how the technology can be deployed. Unlicensed doesn't mean unregulated. The use of unlicensed bands puts limitations on the amount of power that an IEEE 802.11 radio can emit. Higher power output risks interfering with other users of that band. As such, this technology is primarily being used to support wireless LAN services. These services can involve a single access point in a coffee shop or a large number of access points to cover an airport or a hotzone in a downtown area.
Wireless LANs will typically have a performance advantage over wireless WANs, simply because of the physics of radio waves: RF signal strength drops off as the square of the distance. Therefore, the closer users are to the access point, the stronger the signal. Public wireless LANs are usually found in heavy-traffic areas (such as hotels, airports, and convention centers), and they only need to propagate a signal a few hundred feet. A wireless WAN service must be able to propagate signals over many kilometers. A second advantage that wireless LANs have is in the channel width of the carrier. Wireless LANs operate in higher frequency bands and use wider channels. Today's systems use 20-MHz channels, and the future will most likely include both wider and narrower channel options. These wider channels support much higher data rates. And although the higher frequency bands do not penetrate structures very well, this turns out to be an advantage when using unlicensed frequencies because it helps limit interference.
Wireless WAN systems operate in lower frequency bands and with narrower channels (typically 5 MHz for Wideband Code Division Multiple Access [W-CDMA] and 1.25 MHz for CDMA2000). These narrower channels mean lower data rates. Much of the reason for this has to do with the economics of RF spectrum. Lower frequency spectrum is much more valuable than higher frequencies and is thus auctioned off in narrower channels. For mobile applications, optimal frequencies are below 1 GHz. In fact, various parts of the world have enjoyed success with mobile services operating at 450 MHz where one cell tower can cover the same area as a dozen or more towers operating at 1.9 GHz. (Differences in terrain can cause significant variability.) In addition to greater propagation ranges, the lower frequencies can also pass through structures more effectively to reach users deep inside buildings. These are all very important to the operator and the user.
In the mobile wireless WAN, some carrier frequencies will typically be assigned to support voice services, and some will be assigned to handle high-speed data services. Voice services are usually best handled with CDMA technologies such as CDMA2000 and W-CDMA (the evolution path for the Global System for Mobile Communications [GSM]), which have been carefully optimized for this application. For high-speed data services several good options are available. These include high-speed downlink packet access (HSDPA) overlays for Universal Mobile Telecommunications Service (UMTS) networks, evolution-data optimized (EV-DO) overlays for CDMA2000 networks, a variety of proprietary solutions and the emerging IEEE 802.20 and 802.16 mobile standards. All of these technologies offer, or will offer, similar performance on a bit/second/Hertz basis. As a general rule, the user can expect about 500 kbps on the downlink and about 100 kbps on the uplink. These numbers will vary widely depending on such variables as distance from the cell tower, loading on the tower, terrain, and user movement and speed. These are only rough approximations.
CLOSER LOOK AT 802.16 TECHNOLOGY
Of the various wireless WAN technologies, IEEE 802.16 (also known as WiMAX) has been getting the most attention. This is a function of successful marketing by the WiMAX Forum, strong support from merchant chip vendors such as Intel, and the participation of most of the major Radio Access Network (RAN) vendors.
WiMAX originated as a fixed-wireless technology that could be used in microwave backhaul applications as well as for fixed-wireless access. WiMAX has recently begun adding support for mobility. The primary advantages of WiMAX-based solutions are:
• Very reasonable intellectual property rights (IPR) licensing that comes with the IEEE's reasonable and nondiscriminatory licensing policy
• A strong industry consortium, WiMAX Forum, devoted to promoting the technology
• Intel's support, which should translate into inexpensive client devices as WiMAX technology makes its way into laptops and personal digital assistants (PDAs)
This last point is worth emphasizing because the cost of the client device is a considerable part of the cost of wireless WAN services and often must be subsidized by the mobile operator.
The primary disadvantage of WiMAX technology is that true standards-based mobile network deployments will probably not occur until at least 2006. In the meantime, solutions based on EV-DO, HSDPA, and various proprietary technologies are becoming available.
Markets for WiMAX technology include:
• Microwave backhaul-This opportunity was the genesis of WiMAX. Much of this market centers on backhauling voice from cell towers. This is typically done at very high frequencies (greater than 10 GHz) using line-of-sight radios. The vendors in this market all have proprietary solutions, and a standard should reduce costs.
• Fixed-wireless access-This market is fairly small (maybe US$500 million per year) and is focused on areas lacking DSL or cable service. Fixed wireless has had trouble competing with wired solutions when those solutions are available. What makes WiMAX different is the potential to integrate this technology into laptops and PDAs and make it portable. Users can then enjoy a wireless DSL service that follows them as they move. But this starts to sound a lot like a mobile service.
• Mobile access-The mobile market is huge. The network equipment market alone (not including handsets) is about US$45 billion per year, and the handset market is worth twice that. If WiMAX can succeed as a high-speed mobile data overlay, that will drive the kind of volumes that will help bring down the cost of the technology for all applications.
WiMAX will not be a viable competitor to Wi-Fi in the LAN for reasons discussed previously. It is a WAN technology, and it will compete with other WAN technologies.
THE CISCO POSITION ON WIMAX AND OTHER NEXT-GENERATION RADIO TECHNOLOGIES
WiMAX will be one of several high-speed wireless WAN technologies seeing broad deployment. Others include HSDPA and EV-DO. Cisco has no current plans to build 802.16 base stations or base stations using any other WAN radio access technology. Where Cisco will participate is in partnership with RAN vendors. Cisco will provide IP technology for next-generation base stations, and its RAN partners will provide the RF component. Cisco will continue to develop and market wireless LAN technology based on the 802.11 standard. As the leader in the enterprise, service provider, and home market segments for wireless LANs, Cisco will continue to serve customer and market needs.
Cisco will continue to promote the use of IP technology as the basis of the end-to-end architecture for WANs. Cisco is working with leading industry participants and standards organizations toward this goal. The Third Generation Partnership Project (3GPP) and 3GPP2 organizations are working on roadmaps for the all-IP mobile network, and Cisco is participating in these efforts. Cisco is also involved in efforts to craft an end-to-end IP architecture around packet radio technologies. Regardless of the packet radio used (WiMAX, WiFi, Flarion, etc.), Cisco believes these networks should be built on an end-to-end IP infrastructure. Cisco is joining the WiMAX Forum to help make this a reality.
BONUS DD:CISCO SOLUTIONS FOR MOBILE OPERATORS, (tons 'O Good reads here if you find the time possibly while on the beach or at the lake this summer...) http://www.cisco.com/en/US/netsol/ns341/ns396/ns177/networking_solutions_packages_list.html
Month old dd: Mobile Search Hots Up
May 27, 2005
Overture, the paid-search network, has announced several deals to take it into the hot space of mobile search. More deals and partnerships are expected soon.
Well, actually the announcement they've made is more an announcement that they're going to make an announcement. They have signed up to provide paid-search for Yahoo's WAP portal (well, since Yahoo! own Overture, it would have been a bigger story if they'd gone with someone else) and the off-portal search from a mobile operator (to be announced). This is in addition to a deal already signed with Orange.
More deals and partnerships are expected soon.
Mobile search is an interesting area, for two reasons.
Firstly, 30% of searches are currently to look for mobile content (ringtones etc). Since about 2/3 of mobile content is currently sold via operator portals, this is a clear and present danger for operator revenues. In other words, while they may make money from the advertisers paying for their ads to be presented to users, many of these ads will be for competitors of the operators.
Since the cost of the ad itself is clearly going to be much less than the profit on the sale of the content (it has to be, otherwise there's no business model), this has the clear potential to cannibalise operator content revenues.
Having said that, operators have little choice but to get involved. If they don't offer search, someone else will. Though the prospect of an operator paying to advertise on its own search portal is an interesting one. The danger is that if the operator does pay to get high results every time, other advertisers are very likely to boycott the service.
Hmmmm.
The other fascinating element of this emerging market is that no one is talking about local mobile search. While this isn't the only market for mobile search, by any means, it will be an important one.
My opinion is that search on mobiles will polarise into two distinct and sizable markets - maybe even dominated by different types of companies.
The first area is Location-Independent Search (LIS), which is very similar to the type of search you do on your desk top. After all, if you're looking for ringtones to download to your phone, the location of the retailer is of little importance. Distance is dead and all that.
But if you want the name of a shop or restaurant, as an example, location is probably a very important factor indeed. Thus, you'll want to undertake a LDS (Location Dependent Search). The default location will be where you're standing right now, but you'll be able to over-ride this by inputting another location, if you wish.
So the LIS sector could well end up being dominated by Overture or a company like that - I can't see Google standing by and letting them win though. And the LDS sector should be the heartland for Yellow Pages or other locally organised directory service.
It's going to be a fascinating space to watch it emerge.
Story via NMA.
http://www.mobile-weblog.com/archives/mobile_search_hots_up.html
dd: Vodacom, Virgin Mobile splash $750m on Vmobile
By Okoh Aihe, Communication Editor with agency report
Posted to the Web: Monday, June 06, 2005
(ps, virgin is ona tear everywhere eh???, regards, SOG)
LAGOS– THERE are indications that the joint bid by Vodacom and Virgin Mobile for one of Nigeria’s leading mobile operators estimated at $750 million will formally come into Vmobile today, even as Africa’s big telecom firms are set to announce huge earnings this week.
The joint announcement by the two operators put an end to frenetic behind-the-scene- activities where Vodacom which left Nigeria in a huff last year had renewed interest in Vmobile with an offering of $8.05 per share.
A Vmobile source was sure last night that the new bid could come in before the close of today but couldn’t be emphatic on when it was going to be discussed by the board.
But in South Africa where Telkom with substantial shares in Vodacom is today expected to announce predicted earnings of about 35-55 per cent jump largely due to rigorous cost cuts and subscriber growth at its Vodacom mobile unit, MTN which will on Thursday announce earnings is predicting between 40-50 per cent trade boom in the year ending March, because of massive subscriber growth in Nigeria.
Agency reports quoted a South African telecom analyst as saying that “we’ll be looking for more on Nigeria from Telecom and Vodacom. And on MTN, the question is where is the big plan? Where are the new licences?”
Both operators are looking for the big market and eyes are focusing on Nigeria where the telecom market is exploding with MTN literally hitting a gold mine with about five million lines in just over three years of operation. The Nigerian performance makes MTN the biggest mobile operator in Africa going by subscriber sales.
After five years of intensive telecom activities in Nigeria, Engr Ndukwe, boss of the regulatory agency, the Nigeria Communications Commission (NCC), announced last week that the country’s phone lines had hit 14 million, rising from less than a million lines in 1999.
Some analysts told Vanguard yesterday, that it was this vast market supported by a large population that attracted most operators.
The joint bid by Vodacom and Virgin Mobile will likely help Vodacom put a leg in this market although it was hinted that the return to Vmobile would mean that it has to pull out of the MTEL/NITEL bid, where it had previously expressed joint interest with Telkom.
The consortium is seeking to take 51 per cent of Vmobile and there are indications that it may get up to 60 per cent depending on what it’s putting on the table of Vmobile which has been starved of funds for needed expansion.
Vmobile is at the moment running an in-house promo which says the company wants to construct 3,000 base stations across the country in the next two years.
http://www.vanguardngr.com/articles/2002/cover/june05/06062005/f306062005.html
dd: Google clicks with investors in Tech Stocks
(ps, I think I'll take my Lava Lamp in psychedelic purplehaze blue please).
To find a reason for Google's latest giddy rise on Wall Street, look no further than the embarrassment of investors who have so far missed the boat.
June 05, 2005 11:42 PM ET All Financial Times News
"Some stocks cross a threshold when [investment managers] have to start explaining why they don't own them," says Kevin Landis, chief investment officer of Firsthand Funds, a technology investment firm.
Recent investing newsThe Bank of New York Selected by The United Mine Workers of America Health and Retirement Funds for Master Custody Services Premier's Players Grille Reports April Restaurant Sales Comps up over 33% EntertainMax Worldwide, Inc. Announces Recent Progress Coca-Cola Bottling Workers End Strike Washington Mutual buys Providian for $6.45bn
Mr Landis is among those who do not own Google - an increasingly painful choice as the internet search engine's shares have taken their latest spike up, climbing more than 40 per cent since the company reported strong first-quarter earnings at the end of April.
Lured by this seemingly inexorable rise, which had taken Google's stock market value to nearly $80bn by the end of last week, momentum-driven stock traders have also joined the party. The result has been the sort of rapid upward spiral familiar from the days of the dotcom boom. "That's a powerful updraft - it's what seems to be happening here," says Mr Landis.
While capitulation by the sceptics and momentum-driven stock trading may be behind the latest spike in Google's stock, there is more than simple stock market psychology at work.
In only nine months as a public company, Google has produced three quarters of spectacular growth that have exceeded even the most bullish forecasts - capped by a first quarter in which its revenues nearly doubled from a year before.
Also, at 42 times Wall Street's estimated earnings for 2006, Google's shares are broadly in line with eBay's multiple of 38 and Yahoo's 50 - companies whose growth rates are far lower.
While the market's conventional wisdom had been that the young company should trade at a discount to these more mature internet peers, the common view now is that it deserves to at least trade at a comparable level.
Google's almost total reliance on search engine-linked advertising, once considered a potential weakness due to the lack of diversification, is now considered a strength.
With search advertising booming and Google starting to outstrip rival Yahoo, particularly in the newer markets, its status as a must-own stock is cemented.
Beyond the infatuation with the spectacular short-term growth of Google's brand of search advertising lies an equally heady prospect: that the tech world's next great company has arrived. According to this view, internet search may have been its first success, but greater things lie ahead. "People are buying this stock right now because they think it will be the next Microsoft," says Mr Landis.
Supporters point to the recent flood of new internet services from Google, from local search tools to rudimentary video search. By the end of next year, these and other new products will have turned Google into "a full-fledged multi-application company with a strong presence in several promising areas", according to Safa Rashtchy at Piper Jaffray.
Rather than simply a search engine, it will be seen as a broader internet services company, he suggests.
In the short term, however, the fate of its high-flying stock price is likely to hang on further evidence that search engines are becoming a staple outlet for advertisers. More quarters like the last one, and the embarrassment of non- owners will be complete.
http://news.moneycentral.msn.com/provider/providerarticle.asp?feed=FT&Date=20050605&ID=48670...
Regards,
SOG