Blog Archives
Microsoft Acquires YaData
By Kenneth Corbin | February 28, 2008Eager to cut a deeper trench with its online ad business, Microsoft has opened its checkbook once again, this time to purchase YaData, an Israeli company specializing in behavioral targeting and customer segmentation technologies.
Along with the acquisition came the vague promise that YaData's technology would help Microsoft "provide more focused and relevant advertising."
Earlier this week, Microsoft announced a new feature called [Engagement ROI](/ec-news/article.php/3730161/Microsoft+Pitches+New+Ad+Measurement+Approach.htm), promising to give advertisers a better measure of how all their placements in a given campaign contribute to a customer's decision to make a purchase.
A Microsoft representative would not comment on how the acquisition specifically would improve Microsoft's Ad Center platform, providing only a statement saying that YaData's behavioral targeting technology "will help Microsoft provide better ROI for advertisers, higher yield for publishers and more relevant advertising for consumers through advanced targeting and optimization."
Details of the transaction were not disclosed, but the Israeli business paper *Globes* reported that the sale price was between $20 million and $30 million.
A Picket Line in The Sand
By Kenneth Corbin | February 25, 2008The eBay sellers' boycott has been extended another week. I say "has been" extended because I'm coming up a little short on what entity, exactly, is leading the protest action against the e-commerce giant.
There is a site, Powersellersunite.com, that gives the disgruntled sellers something of a unified Web presence, but they're not exactly a labor union. It's unclear what, if any, leverage the boycott will exercise over eBay.
At issue are the fee adjustments announced last month and, of greater pain, the fact that come May, sellers will no longer be able to leave negative feedback about buyers.
"Some people think it's more about the fees, but it's really more about the feedback policy," said Ina Steiner, an expert on all things e-Bay who runs the site Auctionbytes.com.
Incoming CEO John Donahoe said the feedback changes were needed because eBay found that sellers were leaving retaliatory comments against buyers at a much greater rate than buyers were about sellers, and that that was creating an inhospitable shopping experience. Instead, Donahoe said that eBay would provide recourse for sellers dealing with the proportionally small number of deadbeat buyers by ramping up its behind-the-scenes monitoring. Steiner said she pressed him on how, specifically, eBay would protect sellers after stripping their right to speak out against bad buyers, but that he offered no specifics.
While third-party tracking firms have claimed that sellers' listings on eBay have dropped 13 percent since the auction began, the company said that it has seen no discernible dip in seller activity.
Short of keeping the issue in the media, the real impact of the sellers' strike will be marginal, Steiner predicts. For one thing, the largest sellers probably aren't the one participating. They would be the ones who are also selling on Amazon and through their own Web sites. Those are the ones that eBay wants to keep, according to Steiner.
"eBay doesn't mind losing some of the unique items that they have right now," she said. "The way that they rolled out the fees, it favors high-volume commodity sellers."
The more expendable sellers -- the ones who are manning the virtual barricades -- are the ones who can ill afford the work stoppage, Steiner suggests.
"The biggest thing about boycotting as a seller it that it comes right out of your bottom line," she said.
Media Liberation, Coming to a Facebook Near You
By Kenneth Corbin | February 19, 2008Having completed its first round of venture funding, doubleTwist -- the company dedicated to "helping consumers liberate their media" -- has raised the curtain on its first product offerings.
doubleTwist's new desktop program claims it will liberate digital media from their DRM protections, so consumers can share content with their friends and sync it to any device they choose.
"When you receive an e-mail, you can read it on your Blackberry, Web mail or Outlook. E-mail just works," said Monique Farantzos, CEO of doubleTwist and co-founder of the company with Jon Lech Johansen, known in some circles as DVD Jon.
"With digital media such as video from a friend's cell phone or your own iTunes playlists, it's a jungle out there," Farantzos continued. "It can be an hour-long exercise in futility to convert files to the correct format and transfer them to your Sony PSP or your phone."
doubleTwist's other offering is a Facebook application, called "Twist me." Released in beta, Twist me allows people to share media with their Facebook friends and sync to a variety of portables, including Sony PSP and Nokia N series handsets, with support for the iPhone coming soon.
Available as a free download, the doubleTwist desktop detects and displays media from any peripheral device and "transparently handles any necessary file conversions." doubleTwist said that the product also integrates with Apple's iTunes store, so people could sync digital music bought through that application to a variety of devices, effectively working around the DRM restrictions attached to most music available on iTunes.
If it takes hold, and survives the legal challenges that could be waiting, the technology could come as a body blow to DRM, already on the ropes as the major record labels have already shown their willingness to license their collections without the restrictions to Amazon. The industry's alliance with Amazon MP3 is of course a calculated move to break Apple's vice-grip on digital music. However, doubleTwist is now offering a freely distributed technological workaround that would accomplish what Apple has not been able to through its licensing agreements: shed the usage restrictions from the music available through its wildly popular online store.
As released, the desktop application works with Windows XP or Vista. A version for the Mac operating system is expected in the second quarter of the year.
Yahoo Moves Ahead With Layoffs
By Kenneth Corbin | February 13, 2008Yahoo is pressing forward with the "strategic workforce realignment" CEO Jerry Yang promised in [last month's earnings call](/bus-news/article.php/3724666).
Reports are coming in from Sunnyvale today that every meeting room was filled with managers meeting with employees and handing out pink slips. The company planned to lay off about 1,000 employees.
Last month, Yang said that the company was facing "headwinds" as it entered a year of transformation. Of course, an asteroid crashed into Yang's strategic overhaul on Feb. 1, when Microsoft went public with its unsolicited acquisition bid.
That the layoffs are happening as planned is no great surprise. Yahoo has spurned Microsoft's bid, and is moving forward with initiatives like its ambitious mobile agenda, as we saw from its [announcements](/mobility/article.php/3727671/Yahoo+Not+Sitting+Still+on+Mobile.htm) at the Mobile World Congress in Barcelona earlier this week.
Many analysts have predicted that there will be a personnel churn if Microsoft is successful in acquiring the company. They point to a clash of cultures. Quite simply, many Yahoos would never work for Microsoft. Should Microsoft go hostile in its bid, the bad blood could create an exodus.
No doubt these are heady times in the world of Yahoo. Given the precarious future of the company, it's easy to imagine that some of the now-former employees already had one foot out the door.
"No Thanks, Microsoft" ... What Now?
By Kenneth Corbin | February 09, 2008If Yahoo rejects Microsoft's $44.6 billion acquisition bid, as *The Wall Street Journal* has reported it will on Monday, CEO Jerry Yang is going to have to make a pretty strong argument to convince frustrated shareholders that he can turn it around, and fast.
Rejecting the bid could mean one of two things. Yahoo could be trying to lean on Microsoft for a higher offer, or it could be digging its heels in, signaling its commitment to remaining independent and fending off a hostile takeover. The *Journal* quotes an unnamed source close to the matter saying the bid "massively undervalues" the company.
The $31 per share that Microsoft offered was a 62 percent premium over the closing price of Yahoo's shares the night before it was announced. Since then, Yahoo shares have soared by more than 50 percent on reaction to the bid, closing at $29.20 on Friday.
Microsoft would already have to borrow -- for the first time ever -- to finance the transaction. It is uncertain how much higher it would be willing to go to purchase the Internet pioneer. There have been no takers on the short list of companies in a position to put in a rival bid.
Yahoo's shareholders are impatient. Jerry Yang replaced Terry Semel as chief executive last summer with the mandate of reversing the company's flagging stock price. He has not. Shareholders have filed suit against Yang and the board, claiming that it has breached its fiduciary duty. Rejecting the offer is likely to send them into orbit, and drive the share price in the opposite direction.
The *Journal* reported that Yahoo would send a letter to Microsoft detailing its reasons for rejecting the offer, which would likely include the lengthy regulatory review that could hamstring Yahoo as it continues to limp along independently.
The initial rejection could spur Microsoft to up its offer, or initiate a proxy battle in an attempt to oust the board.
A Yahoo spokeswoman reiterated that the board was "evaluating the Microsoft proposal in the context of all of the company's strategic alternatives."
What those alternatives might be -- and whether they might entail a detour over to Mountain View -- should soon become a little clearer.
Money Well Spent?
By Kenneth Corbin | February 05, 2008Whether the Super Bowl ads struck you as amusing, annoying or just plain absurd, you can't argue with results.
Two new sets of research from marketing consultancy SendTec and online metrics firm comScore make a pretty strong argument that the Super Bowl TV spots succeeded in driving Web traffic. In marketers' multi-channel mix, the Web has become a complementary vehicle to television for promoting a brand, so directing consumers to the Web, if not the explicit goal of the TV spot, is certainly a positive result.
An estimated 97.5 million viewers tuned in to watch the Super Bowl, and many of them raced to the Internet to view the spots that struck them as funny, cute, curious or clever. Thirteen percent of Super Bowl viewers went online to watch an ad, comScore found. For GoDaddy.com, which devoted its entire spot to driving traffic to its Web site to view the ad that Fox wouldn't air, that portion rose to 38 percent.
For a company that has built a reputation for pushing the boundaries of acceptable content in its Super Bowl ads, this year's campaign exceeded even the chief executive's expectations. Here's what GoDaddy CEO Bob Parsons wrote in his blog:
"Before the game was over, we received right at 1.5 million visits to our Web site. We had a whopping 2 million visitors for the day. This compares to last year when we had less than 1/2 million visitors."
SendTec took a more empirical approach in its measure of advertisers' success in driving traffic to the Web. Tide's Web site took five minutes of refreshing before it loaded completely, the firm noted.
SendTec also looked at what the different companies were doing to supplement their TV-Web cross-promotion with paid search advertising. GoDaddy bid on terms like "Super Bowl ads," "Super Bowl commercials" and "domain."
Audi enhanced the reach of its spot -- a play on "The Godfather" -- by bidding on keywords like "Godfather," "Godfather Ad" and "Audi Commercial."
More metrics will be forthcoming, for sure, but it seems clear that the TV-Web linkage is working, and that the Super Bowl, celebrated for its TV spots, has become a fertile ground for multi-channel promotion.
A Major in Marketing With a Minor in Google
By Kenneth Corbin | February 04, 2008Time is running short for aspirant Web marketeers to take up the Google Online Marketing challenge.
Google sent out a notice today calling for more universities to enter the competition where marketing students will see who can deliver the best results to a local small business using AdWords.
The rules: the company can't have more than 100 employees, and it has to already have a Web site. Faculty members divide up their marketing students into teams, and each team gets a $200 AdWords voucher to work their marketing magic.
Teams are to submit a market analysis of the company before and after the AdWords campaign. What could be better? A small business gets a free marketing consult, marketing students get some high-octane resume fodder, and Google takes yet another step toward institutionalizing itself. After all, what better way to position AdWords as the pivot point of online marketing for small businesses than to secure the endorsement of academia at large?
Talk about a marketing strategy: Google reaches out to the university community, offers a modest AdWords voucher and the promise of the real-world experience that professors love to talk up in their course descriptions, and -- BOOM! Google's on the syllabus of Marketing 101 classes in schools around the world.
Google said that it set out with the modest goal of signing up 200 schools worldwide. To date, 724 universities in the United States alone have signed up.
Ingenious. To the clever folks in Mountain View, I doff my mortarboard to you!
A New Chapter in a Familiar Story
By Kenneth Corbin | February 04, 2008Listening to leading advertising executives wax about the
state of digital marketing and you're left with the feeling of an industry that
hasn't gotten comfortable in its own skin yet.
At the Always On conference in New York, attendees from ad
agencies, Web companies, ad network descended on the Mandarin Oriental in
Columbus Circle to discuss all things new media.
Participants in one panel tackled the subject of
monetization -- a question at the top of the agenda of every advertiser and
content publisher trying to find their niche on the Web.
Well, like most panels where top-level executives gather to
discuss top-level issues, the panel titled "When Will Online Advertising
Dollars Catch up with Online Viewership?" raised more questions than it
answered.
"We live in impatient times, but we're actually moving
very fast," said Bruce Nelson, Vice Chairman of Omnicom, one of the
world's largest advertising holding companies.
Penry Price, Google's Vice President of Advertising Sales,
suggested that the blusterous tide that carried in the first wave of Internet
high-flyers 10 odd years ago set expectations too high, that a transformative
medium like the Web needs time to mature.
Nelson reminded the audience that ad spending on the Web is
increasing at twice the rate of the previous newcomer to the media mix: cable
television. And cable didn't require advertisers to reinvent the playbook -- Madison Avenue creatives been making TV spots for decades.
But, step back 30 years earlier, and broadcast TV was the new
kid on the block scrapping to earn respect from advertisers, Bob Jeffrey
reminded us. Jeffrey is the chairman and CEO of JWT, another global advertising
powerhouse, and he knows his history.
"A lot of creatives weren't interested in television in
the early 50's," he said. "A double-page spread in Life
magazine was considered a career maker."
Creatives are still learning how to create and package their
messages online. Media buyers are still figuring out the best pricing
structures, and advertisers are still grappling with the ROI matrix.
The takeaway message: it's an evolutionary process. Both
Jeffrey and Nelson said that they no longer encountered any resistance from
their clients in convincing them to integrate digital into their media mix.
Price demurred when asked about Google's designs on horning
in on the agency's business: "We don't want to purchase any agencies --
that's not a margin business we want to get into." (Sprinkles of
laughter throughout the crowd.)
"We do want to work with agencies and work with
creatives," he said, emphasizing that Google's core competencies do not
include storytelling ??? the pap of the agencies' output. What Google brings to
the table is scale, reach and solutions to technical problems, which could make
it a very powerful ally for the agencies.
But when it comes to advertising, Price admits that even
Google doesn't have a crystal ball:
"The Internet and digital media is about the most blank canvas that we have."
Bang The Gavel Slowly
By Kenneth Corbin | February 04, 2008Most of the lawsuits that the RIAA issues never make it to court. Usually, recipients of the association's prelitigation letters, very often university students, settle, staving off the possibility of an ugly, expensive legal mess.
Such was not the case with Tanya Andersen, a disabled single mother living in Oregon, responded to the RIAA's lawsuit in 2005 with a vigorous denial of the charges and a countersuit. The RIAA's suit has since been tossed out of court, and earlier this week, a U.S. District judge in Oregon upheld an earlier ruling that the RIAA must compensate Andersen for her legal fees.
The judge also cleared the way for Andersen's malicious-prosecution case against the RIAA to obtain a class-action status. Among the bizarre tactics that Andersen alleges the RIAA investigators engaged in include impersonating a relative while on the phone with her elementary-school-aged daughter.
The RIAA legal beat is nothing if not lively. Of necessity, the RIAA's file-sharing cases that make it to court get very personal very quickly. We learn what kind of music people listen to, what sorts of pornography they favor and other details about their Internet habits that they'd just as soon keep to themselves. Well, Andersen's showing us that the mud flies both ways. This should be a fun one to watch.
For What It's Worth
By Kenneth Corbin | February 04, 2008So far the Super Bowl has been a fertile ground for News Corp. cross promotion.
The cast of Prison Break finally escaped, tunneling up from under ground, breaking through the surface at midfield. The eponymous curmudgeon from the medical drama House strummed out the licks from the Fox's NFL theme music on his electric guitar, then growled to the camera, "Wear a cup." Then the latest machine dispatched from the Terminator franchise body slammed the Fox football robot.
From the ads not hawking a Murdoch brand, here are a few of the highlights so far:
Bill Frist and James Carville put their differences aside and came together over a Coke. They rode around D.C. on a tourist trolley and watched the sun set over the reflecting pool. In these politically charged times where polarization and divisiveness are the norm, the scene was refreshing, kind of like a Coke.
eTrade showed us a baby gloating about how easy it is to buy stock online. Click. "Look, I just bought stock." Then the child spit up on itself. The economy's tough all around.
SalesGenie.com put its $2.7 million (the going price for a 30-second spot on the game) to good use showing us pandas with ludicrously overdrawn (and borderline offensive, I'd imagine) Asian accents struggling to figure out how to build their business. (Part of the secret turned out to be to stop eating the bamboo furniture. The other part involved using some Web-based lead-generation service. I forget the name.)
In case you missed any of the action (the ads, not the game), News Corp.'s got you covered. You can review all te ads on MySpace, at myspace.com/superbowlads.
RIAA Redux
By Kenneth Corbin | February 04, 2008Might we look forward to a day when the RIAA is nothing more than four dead letters? Could it be? But who would attend the funeral, other than Lars Ulrich?
Rumors are beginning to swirl that EMI, one of the Big Four record labels, is considering withdrawing its support from the RIAA and the International Federation of the Phonographic Industry (IFPI), the music industry trade association in Great Britain.
Variety has reported that EMI is in talks with the other major record labels over the potential of restructuring the trade groups. In December, EMI sent a letter to the IFPI that could well become the first step toward its withdrawal from the organization. There's also been some talk of merging the two groups into one.
In any event, EMI isn't happy with the trade groups. Threatening the RIAA with the prospect of withdrawing from the group -- and even taking other labels with it -- just might be enough to force its hand and change its policies. After all, what would the RIAA be if the big four -- with their myriad subsidiary labels -- dropped it? It would be an association in search of an industry to represent.
Speculation and rumors for now, to be sure, but it's got to be an encouraging sign for the legions of folks out there who've been taking shots at the RIAA for the last several years.
The RIAA has taken a firm stand against digital piracy. On its Web site there is no shortage of saber-rattling rhetoric about prosecution and lawsuits and the moral outrage of stealing from copyright-holders.
The validity of these claims really isn't important anymore. Suing your fans by the thousands isn't good for business, certainly not when your most visible success came in the form of a $222,000 damages award won from a single mother for downloading 24 songs from the Internet.
Throwing mud at the RIAA is a favorite pastime in blogdom, so no need to pile on anymore. We can leave it at this: The legal strategy is obviously failing. CD sales are plummeting, major artists are defecting from their labels in droves, and DRM-free digital music is going to become the industry standard -- just how effectively has the RIAA been representing its industry? Sounds like EMI already has an answer.
Whither Yahoo's Fortunes?
By Kenneth Corbin | February 04, 2008The rumors are not new, but they're getting hard to ignore. The New York Post has turned up sources close to Yahoo who warn that CEO Jerry Yang might be forced to sell a large stake of the company to a private equity firm out of fiduciary responsibility to the shareholders. Yahoo's stock is hovering a couple points above its 52 week low. The company is expected to lay off hundreds -- if not thousands (Henry Blodget has reported 2,500).
Next Wednesday the company reports its fourth quarter earnings. In the interest of showing good faith for the investors, official word on the extent of the layoffs (it seems now more a question of how many, not if) could come before or along with the earnings, which are expected to be bleak.
Yahoo continues to lose market share and ad revenue to Google, but of course the other portals are, too. And with the economy threatening to slip into recession, Yahoo isn't the only company that will be tightening its belt. Google's stock has dipped of late, and could very well slide further in a jittery economy.
But Google and Yahoo are catching the economic downturn on a different plane than Yahoo. At CES earlier this month, Yang laid out a vision for making Yahoo the "indispensable" starting point on the Web. At this precarious point, we're left to wonder if Yang will even get the chance to see it through.
Who's Watching The Watchdogs?
By Kenneth Corbin | February 04, 2008Public-interest groups like the Electronic Privacy Information Center (EPIC) and the Center for Digital Democracy (CDD) are a vital safeguard for consumers in the digital age. They keep vigilant watch over the Internet, fight the tough fight against large companies and hack through arcane government bureaucracies. Their dedicated staffs work long hours to promote the causes of consumer protection and corporate transparency. These principles are beyond reproach.
But there might come a point when even the champions of the good fight go too far.
EPIC and several other groups filed a complaint with the Federal Trade Commission on Saturday requesting that the agency order Ask.com to pull its AskEraser product from the market. AskEraser is a privacy feature that promises to delete users' browsing histories from Ask's servers. The product was introduced in December.
In the complaint, EPIC et al charge Ask with deceptive trade practices, claiming that the product creates a unique persistent identifier that could still be used to track consumers, that the information trail of users who enabled AskEraser is still available to Ask's business partners, like Google, and that the mechanism of the opt-out cookie is not a viable privacy safeguard because it does not scale.
The complaint also takes issue with the two-year lifespan of the AskEraser cookie. The groups are not right on this one. Ask changed the application earlier this month, extending the life of the askeraser cookie to 30 years. This information is available on Ask's Frequently Asked Questions page.
The point about consumer data being tracked by Ask's business partners is true enough. Google serves ads on Ask's search pages, and, by the terms of its agreement Ask has no control over what information is stored on the servers of Google. Ask readily admitted this limitation when it rolled out AskEraser, and virtually ever media outlet that covered the announcement included that important point in the story. That important point also appears in Ask's FAQ section.
The groups also object to the unique persistent identifier that is created in the form of a time stamp when a user turns on AskEraser. This is certainly the case, but Ask rebuts the charge with the claim that, with its search logs expunged, there is nothing to track, so the persistent identifier is a non-issue.
Finally, EPIC et al take issue with Ask's warning that it will turn AskEraser off if ordered to do so by a court or other legal authority. The FTC complaint calls this a deceptive trade practice; Ask says that it, like any legitimate business, is obligated to comply with the law.
Nicholas Graham, Ask's vice president of corporate communications, freely admits that AskEraser is not perfect, that it has limitations and room for improvement. The roll-out of AskEraser grabbed headlines because it was the first time a major search engine had offered a feature that gave customers the chance to erase their browsing histories. The CDD, one of the groups that signed the complaint, greeted the announcement in December with an upbeat tone of cautious optimism. It was a good first step.
Now, after EPIC and Ask have been unable to connect to discuss the concerns on a technical level, the groups are taking their case to the FTC, calling for the product to be pulled from the market. The debatable merits of the complaint notwithstanding, by appealing to the feds to shut the service down, they give scant incentive to other search companies to develop similar features that start taking privacy more seriously. And that is, after all, what they want. Isn't it?
