Over the past 12 months, a lot - and we mean a lot - of Yahoo!’s senior management has left. Most have resigned, but beneath the veneer you sense that many were shown the door. Frankly, the pace of departures accelerated after former Chairman and CEO Terry Semel left the company and was replaced with Chief Yahoo! and founder Jerry Yang.
Today, on New Year’s Eve, one more Chief Something leaves. Interestingly, at a time when Google’s ranked crossed 15,000 Googlers and the smartest and savviest are rightfully praising Mountain View’s dominance, you have to wonder if Google is embarking on the same hubris filled march towards bloatedness, which online is the sure fire path to destruction.
When the previous rumor of a Microsoft / Yahoo! merger - rather, acquisition of the latter by the former - sent Yahoo!’s stock up 18% in one day (only to settle back down after the management of the two respective firms jointly kiboshed the rumor), one of the many explanations for the dead deal was the lack of role for Terry Semel in the joint MSN.com/Yahoo! empire.
I personally doubt that storyline, for Semel would have probably welcomed an union that would have sent him riding in the sunset as a hero to shareholders. But the fact remains, a joint MSN.com/Yahoo! unit would create a lot of redundancy at the top. I think that Microsoft invests a lot in MSN.com and Live.com and has many shining stars there, but Yahoo!’s management would have been more vocal and in the limelight… which would have made things tricky in a merger because despite Yahoo!’s superior pedigree online, the fact would be that MSFT would be buying Yahoo! and as such, MSFT’s upper management would have to come out on top in the union. I admit this is not always the case, and sometimes buyers pay a premium for talent… but no one buys excess fat and unnecessary layers of management… which is one of Yahoo!’s main problems.
I personally think Jerry Yang’s soul-searching - both as Chief Yahoo!, CEO and largest individual shareholder - has made him realize one of two things:
1- Now that people are actually reporting to him, unlike the Semel era where no one did (!), Yang is probably intent on cleaning shop. When your stake in a company is worth $8B or so - but could easily be $10B if not $15B - you pay a bit more attention to who does what. My gut says that under the Semel regime, a lot of people had no idea who did what and who was actually responsible for what. This is really not a knock at Mr. Semel, who did clean up shop at Yahoo! when he joined back in the day… but as Yahoo! grew and got bloated, it was time for a change. A cynic might suggest that all of these people leaving is a negative sign for Yahoo!, but a realist would ask, are these not the same people who so let Yahoo! slip? [I’d argue that Yahoo! remains pretty strong in all areas apart from search… but who has not lost in search to Google?]
2- A sale to MSFT (or maybe even News Corp., for that matter, or a spinoff with NBC, or a private equity firm) is not so bad… because it will allow Yahoo! to get away from the short-term mindset of public shareholders… which is proving to be Yahoo!’s biggest achilles heel: looking cute next to Google, whose bosom only seems to expand and shine brighter under Wall Street’s auspices.
Read our options for YHOO here:
- status quo
- merger with eBay
- acquisition by/merger with Microsoft
- taken private
- can Google buy Yahoo!
Maybe, just maybe, he has come to grips with both #1 and #2… and is doing #1 to set up #2.
I could be, and very well might be, very, very wrong. But if you consider where talks (assuming talks were held, indeed) were left off in Redmond, I presume one area of improvement was to clean up (read: lighten) Yahoo!’s senior ranks to make a merger easier to integrate.
After all, it’s cheaper to part ways with upper management now than it would be after a merger where employees know they have an upper hand. Nothing like a conspiracy theory to start off 2008.
Disclaimer: Long YHOO stock.
Digg this Blog
Share on Facebook
WatchMojo on Twitter
WatchMojo on YouTube
Add to Favorites
WatchMojo NewsletterHenry Blodget’s been a great addition to the blogging landscape, but the past couple of days, he’s proving that too much turkey does cause blurriness.
Yesterday he suggested that Mozilla Firefox rebrand itself Netscape Mozilla. Just wrong.
Today he uses Perez Hilton as a case study for YouTube’s revenue programs. As a content provider to YouTube with 1,000 clips, I’ll spare some of the actual details of YouTube’s actual payouts and what not, but I will say that Perez Hilton is the worst example to use because, well, to quote Center Networks‘ Allen Stern, “Perez is in a tough spot as advertisers might not want their product shown next to Britney’s crotch”. Well said.
Marketers make money when they spend money. It’s not their money they spend, they have jobs in marketing and advertising or sales and they have to spend it. If they didn’t, they would not have jobs. Yet, most of Google’s historical client base have been small and medium sized businesses, so the advertising money is in fact their money. Google bought YouTube last year, then they got sued by Viacom, it took them some time to position YouTube into a money machine. But, like it or not, over time Google will make a lot of money off YouTube, even though neither Perez nor WatchMojo.com will be the main beneficiary of that (wonder who will be? Google).
But, the point is, Robert Scoble is partially right, audience size is not everything, but it is a lot, and if you want a video audience, you have to be on YouTube. Perez Hilton makes enough money from smut and everything else not to worry about YouTube, and in YouTube’s mind, good riddance, because Perez generates streams but little else of value.
For content owners to succeed on YouTube, and in generating revenues in general, they will need:
- reach, as measured by audience
- relevance, as measured by demographics
- frequency, as measured by publishing cycle
- fit, as measured by content.
(online marketers will also look considerably at engagement, or time spent on a site, but I digress. Also want to stress that there are many ways to slice “what marketers look for” as surety of content, for example, comes up too).
Ultimately, Perez lacked in everything but audience, and maybe demographics… but I’m not sure his publishing cycle was frequent enough to merit dollars, and the fit with most advertisers was non-existent.
Video advertising is so nascent and embryonic that if you want to make a case study of someone, you should look at previous models at similar stages, and not a blue-haired homosexual video blogger (not that there is anything wrong with that, of course).
Mark Evans, who pens the “A Canadian on Tech” blog states: Canada Needs a Peter Thiel. He’s right, but the problem is, Canada does not deserve it. I’m a proud Montrealer and Canadian, I’ve had the honor and privilege of working at two of the more successful Canadian-started consumer media Internet companies of the past 10 years. But there’s a reason why I wake up and think global and downplay the Canadian factor: Montreal and Canada offer great advantages for businesses, making it a great place to start a company, but is this a place one can scale a company? Nope. Not even close.
Remember when Chris Rock would mock some of his “fellow brothers” for “keeping it real” (as in being ignorant)? Well, sometimes, I wonder if being ambitious and working hard is a sin. In Canada, it is. Canadians have to keep it real by downplaying their drive, basically. We want to win in hockey, basically, anything else, “we want to participate”.
In 2003, I was trying to keep Major League Baseball’s Montreal Expos in the city and approached the usual suspects.
Amongst others, I approached eBay President Jeff Skoll, he had no interest. I also tried to approach Jeff Mallett (a Canadian and former Yahoo! executive) but found out he had invested in the SF Giants. What does that say?
Montreal and Canada are pretty minor league, and we don’t do anything to shatter that perception. We have a bunch of people patting one another in the back, but doing very little to change the conditions on the ground.
In fact, entrepreneurs who show boldness and ambition are actually shun by the chummy club who manage the purse strings, but that’s for another post. Much like in Silicon Valley, the existing investors invest in their inner circle. But in California, there is so much money that there is a trickle-down effect. Here? Nonsense.
Anyway… I know, the Expos were a lousy investment, granted… but financing in Canada is pretty lame. By the time Canadian entrepreneurs strike it big, they have given up and forgotten about Canada because when they needed help from the financing community, the moneymen were nowhere to be seen. It becomes a vicious circle, because the best and boldest entrepreneurs understand this and bolt before sticking it out in Montreal (think Skoll, Mallett, etc. - though Mallett is from BC, which is on the West Coast, while Montreal and Toronto are on the East Coast).
I sincerely wish Mark Evans is right, that from the shadows steps in a white knight who will catapult entrepreneurs to deliver on their big dreams… but I doubt it. I have given up on Canada because I refuse to think small. I’m not the first one to realize this, be it in entertainment, business, etc., remaining in Canada is a one-way ticket guaranteed to remain, well, a “participant” instead of a winner.
A lot of traditional VCs (particularly those based in the West Coast) woke up this morning and tossed some chairs around and broke some really expensive shit because of this article in the Wall Street Journal, lauding Peter Thiel and his partners over at Founders’ Fund, which include Sean Parker, Luke Nosek, Ken Howery. The fund’s investments include:
- Iron Port Systems: email security software (recently sold to Cisco for $830M).
- Slide: the #1 or 2 widgets maker on Facebook.
- Facebook: apparently, a popular social networking site.
- Powerset: the natural search language company launched on the heels of a XEROX patent.
Anyone who has ever read anything on HipMojo.com knows that while I respect VCs, I think the entire industry is one big game of smoke and mirrors. Fred Wilson deserves some credit for introducing transparency to the industry, as does Brad Feld, and a slew of others. While we’re handing out props, TheFunded.com has done a great job of giving some Vulture Capitalists a much deserved public ass-whooping in a fairly open and direct manner, though yes, it has its drawbacks, too. The guys at VentureHacks.com deserve a lot of props for sharing their know-how, because let’s face it, indeed VCs work on term sheets 24/7/365 whereas us hapless entrepreneurs don’t.
But while Wilson and Feld still represent the VC establishment, and TheFunded.com and VentureHacks.com remain outsiders with little direct, material influence; Thiel and his partners in crime are insiders by virtue of being investors, and have a big impact because regardless what any entrepreneur thinks about the value of his or her company, said value is a function of demand and supply… and in an environment where less capital is required to build an empire (and in less time), Thiel’s fund definitely tips the scales in favor of the entrepreneur.
As an entrepreneur, there are no two ways about it: you love what Founders’ Fund is doing, even if they hitherto only invest in limited segments, amongst people they know, and in a specific geographic area.
Moreover, Thiel and Founders’ Fund differs in one more significant way: their track record is actually very impressive, both as investors and operators. Thiel was CEO of Paypal, which we ranked as one of our 13 most explosive startups ever and its acquisition by eBay as one of the best Web M&A deals of all time.
The experiences at Paypal - which has become a GE-like super factory of technology entrepreneurship and investing (in how it has churned out so many founders, investors and managers) - is actually inspiring.
The experiences the men have had individually - such as the rumor that Thiel resents how Mike Moritz pushed Max Levchin’s then-named Confinity to merge with Elon Musk’s X.com to form Paypal and thus dilute his holdings, or pretty much everything pertaining to Sean Parker at either Napster, Plaxo and Facebook, etc. gives them a lot of street cred with entrepreneurs who have grown wary of anything that comes out of a VC’s mouth. You need not read between the lines: I don’t trust VCs, thankfully I’ve not needed VCs to grow WatchMojo.com thus far. While I am not alone thus far, most entrepreneurs don’t have a choice and throw caution into the wind and accept draconian terms.
The main point of objection I have is that it’s not as if VCs - either individually or as a cohesive group - even have an enviable track record. VCs brag about 5 investments crapping out, 2 to 4 being so-so hits, and 1 being a grand slam that makes up for the others. Huh… note to PR team, draft another elevator pitch, pal. I would not brag about taking other people’s money and then sinking 50% of the investment in a toilet… but I digress.
If I have a beef against VCs, it’s not personal; it’s professional. I see through their spin, I can BS better than them, and being a media content oriented company, it’s not traditional VCs that I really count on to find a financial partner. But again, I digress. Technology startups I advise welcome VCs’ interest though I almost view it as a kiss of death (reference Zantaz, Filmloop, and many others).
Anyway, that out of the way… Some gems from the article:
- “Mr. Thiel, the former CEO of online-payment company PayPal, is making waves in Silicon Valley with an investment strategy that differs significantly from the traditional approach. His company invests only modest amounts of money, sometimes just a few hundred thousand dollars, and focuses on entrepreneurs Mr. Thiel and his partners often know personally. He also takes an uncharacteristically hands-off approach to company management.”
- “Many VCs “have these very cushy jobs, they get paid a lot,” and often can’t relate to founders, he says.”
- “Most traditional VC companies want to invest larger sums, several million dollars, say, for large stakes in start-ups and then exert control over the companies’ operations. Some demand “liquidation preferences,” or guaranteed returns if companies are sold.”
- “Significantly, the fund often buys only a 5% or 10% stake in a company and sets up a special class of stock that start-up founders can sell while they are building their companies — and before venture-capital investors see profits. That way, the thinking goes, the company founders can reap some financial reward and stay motivated to build the company before an IPO or company sale, which can take years.”
- “Some traditional investors don’t think founders should make money before backers do, since early paydays might distract them from the task at hand. All of this is causing traditional VC firms to re-examine the way they invest in tiny tech start-ups. VC concerns including Trinity Ventures, for example, are now letting a few of their entrepreneurs “take money off the table” early on by selling stock.”
- “Mr. Thiel acknowledges his company faced resistance from blue-chip investors when it set out to raise money for its latest, $220 million venture-capital fund. One large institutional investor, who declined to be named, said he was put off by Founders Fund’s anti-establishment pitch. Others wonder whether Founders Fund could soon tap out its close-knit network of entrepreneurs and run out of companies to fund.”
I won’t comment on each one, suffice to say it’s refreshing and a welcome change from VC’s draconion rules of engagement in standard term sheets, something I covered recently here. I’ve also long argued that one reason we don’t see any grand slams anymore is because of the greatest mistake VCs and entrepreneurs make, which is not taking any money off the table in financing rounds. What’s that saying? Bulls make money, bears make money, but hogs get slaughtered… yeah, that one.
A cynic would highlight, however, that Founders’ Fund it too young, too early, and too idealistic to have hit some rough patches. In other words, it’s not what Thiel et al. think and do now in good times, but how they will react in a downturn. Judging by many economic indicators, the economy won’t be spectacular in 2008, but as we’ve outlined before, that will actually help the Web sub-economy in a few ways.
To conclude, Founders’ Fund won’t even be the biggest wave to shake down VCs in the US. That, my friends, will be foreign capital, trickling in more and more in 2008 and flooding American startups in 2009 and beyond. Foreign financial institutions - be it in China, Singapore, Saudi Arabia, etc. - are investing 5-10% in American financial giants. Over time, the same trends will lead many investors to start to invest in US startups as well. For more on this, see our sister publication WorldMojo.com’s post World to USA: Who’s Your Daddy?.
Been doing a lot of reading on successful media personalities. A few stories that stuck out today:
Jeff Zucker, CEO of NBC Universal, from his Wikipedia page:
He went on to Harvard, serving as President of the school newspaper, The Harvard Crimson, during his senior year, surprising many who thought the post would go to Michael Hirschorn. As President of the Crimson, Zucker encouraged the decades-old rivalry with the Harvard Lampoon, headed by future NBC colleague Conan O’Brien. (The Crimson’s editors now joke that since Zucker is O’Brien’s boss, those who want to get ahead in life should choose to join the Crimson over the Lampoon).
When he was not admitted to Harvard Law School, he was hired by NBC to research material for its coverage of the 1988 Olympics in Seoul, South Korea, where he worked for host Bob Costas.
Zucker was diagnosed at age 31 with colon cancer, worked through two bouts of it, and had a large part of his colon removed, then endured more than a year of chemotherapy. He scheduled his chemo treatments for Friday afternoons, so he could be back at the office on Mondays. Zucker’s cancer is in remission, but he still thinks about its impact. “It put my life into perspective,” he says. “I want to win and win honorably. But heck, it’s only television.”
On Sumner Redstone, from his Wikipedia page:
As National Amusements grew Redstone believed that content would become more important than distribution mechanisms. There would always exist channels of distribution (albeit in varied forms), but content was always going to be necessary (his famous quote is “content is king!”).
Looking for a new business venture, he set his sights on Viacom International, a company which he had already been buying stock in as an investment and was a spin-off of CBS in 1971 after the FCC ruled that television networks could not syndicate programs they produced.
After a hostile takeover in 1987, Redstone won voting control of Viacom and led a series of acquisitions to make Viacom one of the top players in modern media (along with Bertelsmann, General Electric & Vivendi’s NBC-Universal, News Corporation, Time Warner, Sony, and The Walt Disney Company).
One of Redstone’s largest acquisitions came in the form of Viacom’s former parent, CBS.
After CBS and Viacom split in late 2005, Redstone remained chairman of both companies.
I could comment quite a bit on all of this, but the one thing that stands out right now is Redstone’s comment “that content would become more important than distribution mechanisms. There would always exist channels of distribution,” this is exactly the idea behind my comment that distribution has now become commoditized and content so scalable.
I’ve gone through many of the recaps of 2007 and predictions for 2008 and been trying to find one common theme between them. Up to now, I’ve not been able to wrap my arms around any one thing. I’ve personally spent some of the time between Christmas and the New Year looking back at the good, bad and ugly in 2007 for WatchMojo.com and Mojo Supreme and strategizing for next year…
Then it hit me. The timing was no coincidence: we are about to announce a pretty major partnership - one that took one month to negotiate but three months to launch (and it has yet to launch, but should any day now).
I think buried under the many storylines of 2007: Facebook’s euphoria, AOL’s implosion, the massive consolidation amongst ad networks, Yahoo! scooping up a handful of these to itself, and major media companies re-engineerings is the mantra of distribution over destination.
Personally, I started 2007 wanting to build WatchMojo.com into a large destination, focused around niches. I might do this in 2008, but 2007 saw our distribution take off. At some point, you can’t let your predetermined conclusions supersede what the market demonstrates. Our site - or what I call the property - now accounts for 5% of our total relevance and reach. By way of syndication partnerships with distribution points such as YouTube et al., we have grown over 10x in 6 months.
We’re tiny compared to major media companies, but they too began to drink from the same koolaid. CBS is all about distribution over destination. I think this is also why AOL totally set Dulles aflame and imploded AOL.com in favor of Platform A - a hybrid of Advertising.com, Quigo, Tacoda and all of the rag tag ad networks they have bought over the years (mind you, in this case, ragtag refers to assorted only and not meant to be derogatory, all were leaders in their respective spaces).
Don’t get me wrong, if I had millions in the bank, I’d probably allocate a chunk of that to develop our destination. In fact, I will anyway because I think it’s smart to do that, particularly, when everyone is going gaga over distribution and networks… but I won’t lie, I anticipate to further build up our network and distribution in 2008 and in one year’s time, our syndication business will account for 99% of our business.
I do reiterate however, that it’s always good to go against the grain when people jump on bandwagons, as the saying goes: those who can, build a destination; those who can’t embrace the distribution (just don’t ask me who said that saying).
On that note, expect a long overdue announcement pretty soon.
NTV asks what the big ad format will be in online video. No real surprises in what the panel answers. Can’t blame them.
I think the dominant ad format will not be pre-roll or overlay, both are somewhat intrusive:
- The pre-roll is like the pop-up. How much longevity did that have?
- Any decent quality video will have some kind of caption in the lower 1/3 of the screen, and the overlay blocks it.
Much the same way Google (technically GoTo.com first) took simple little text ads (classifieds basically) and deployed them online, I think what will succeed in online video will be a throwback to something from offline media, this time TV.
What is that?
Just a guess, but what about the PiP. That’s right, the Picture in Picture. I think it will work for a few reasons:
1 - a PiP ad format can technically stay on throughout the whole video, which I think is the only way video will surpass search advertising’s size. I am not saying it has to remain throughout the whole period, but that would be far more effective.
2 - a PiP can be an image, short text or even, video. If video is the killer app, should the killer ad format in the killer content format not include itself? Expecting a video ad format to thrive with no video in it is akin to building a website out of a cardboard box and calling that interactive.
3 - Technically, you should be able to somehow make it expand to see the whole ad, so imagine if
- scrolling over with a mouse will make the PiP expand as an overlay with the full text;
- a simple click will make the PiP load a video (I know, this might be irritating) and
- a double click takes you to the client site.
It’s not obvious but it could work, especially as viewers learn how the PiP works.
4 - Video content itself has expanded, at WatchMojo.com, for example, we publish in 480×270 pixel sizes, so a PiP of 120×90 would not really piss off too many users, I think… look at the image below. I’ve noticed on our page on YouTube, for example, that an overlay does cover up the caption that bears our text, so I do not think that is optimal, either.
5 - I don’t think it’s very killer (in a good way) for the overlay to have to go somewhere, such as the lower 1/3 of the screen, whereas technically the PiP can go to the top, bottom, left or right. With our content, for example, I’d probably put it on top, to the right.
See the black box, that’s what a 120×90 PiP would look like in our 480×270 publish format.
That black box does not really take much away from the content, does it? Then again, maybe I’ve had too much turkey this week, cause a Black Box is obtrusive… but a logo, text or image would be easier on the eyes.
I’m not saying no one has done this, I’m just saying no one has really fully executed this… and this is where I think the most upside is.
What do you think? More importantly, if you wanna watch the video in question, click here, it’s pretty funny.
I frequently get questions from journalists, students, etc., I usually post the answers on the blog and then send them to the interviewee. Enjoy.
I am a student from Germany. During my studies I am doing a research on the topic “US Advertising-Networks”.
During my research I came across your blog and noticed your expertise on this topic, I would be very thankful if you could help me with my research by just briefly answering the following questions. In return I would be happy to end you my gathered results, which you can use for you blog as well.
1. Which ad-networks do you think are currently the most relevant players?
2007 saw a change in the landscape in that a wave of consolidation hit the space. For more on that, see our recap of M&A deals in 2007. The implication is that the independence of ad networks, and how they are used going forward, will impact who becomes the most relevant ones. The ones to look out for include:
Advertising.com has forever been the largest one, and with AOL moving towards becoming an ad network via Platform A, I think it will be interesting to see what happens there.
Right Media was bought by Yahoo! and I think they will help Yahoo! monetize the long tail inventory within Yahoo! properties and allow Yahoo!’s sales force expand the reach they offer advertisers by opening up inventory away from Yahoo! properties. As such, Right Media might have the most explosive value.
Yahoo! also bought Blue Lithium, who has historically been the most premium ad network in terms of ad network, so I think the combination of Yahoo! + Right Media + Blue Lithium will remain very interesting.
The biggest independent ad network suddenly becomes Tribal Fusion. Tribal Fusion is a wild card, because their parent Exponential could leverage its own balance sheet to make acquisitions and totally shift its complexion, or it can be shopped around to the usual suspects as a very large, independent ad network. Casale, Specific Media and TrafficMarketplace all have similar dimensions as Tribal Fusion and are technically in play.
I think video ad networks like Tremor Media and Broadband Enterprises will be the ones to watch. You can also add companies like Brightroll, Yume, Scanscout, as well as Video Egg. This is a very competitive space, one could argue that there is a mini-bubble in this space. The challenge really will boil down to the valuations and VC expectations of these companies. The online video advertising space remains nascent, and trying to grow these companies too quickly will backfire, but not jumping on opportunities can prove fatal given VCs uber-high expectations, too.
Other Pay Per Click text ad networks such as AdBrite, Kontera might try to ride Quigo’s wave but ultimately, trying to make noise in the text based ad market is hard because Google is proving to own this market. Of course, to anyone but Google, owning these companies is interesting, which is why AOL paid $300M for the Israeli-based company Quigo.
2. Which kind of model is going to take hold on the market? For instance performance-based advertising, display advertising, exchange models?
There are two schools of thought. One says that online being targeted, tracked media will encourage the dominance of performance based advertising. That is not wrong, but the flip side is that marketers will be willing to pay display-based advertising to get better placement. So I think you will see a combination of display, branded advertising on the best real estate on the best sites and most niche, targeted sites… with performance-based pricing on less desirable inventory, such as social networking sites with racy content. Ultimately, as more and more global ad agencies and Fortune 500 advertisers shift ad dollars to the Web, the sheer demand for advertising online will both tip the balance towards display pricing.
This is not a zero-sum game, both models will continue to thrive…
3. Do you expect niche businesses like AdBrite or Vibrant Media to exist on the long run or are those providers going to be integrated into the bigger networks, as for example Quigo was aquired by AOL/Advertising.com?
Ultimately, consolidation hits all industries after a rapid period of innovation. Invariably, shareholders also want exits and a return on their investment. So combining these two macro level forces, yes, you will see more consolidation. But, this does not mean that independent networks will not thrive. The ad networks are at a crossroads, some will even get bold and move into new businesses.
This is something I covered just yesterday, here.
4. If they will co-exist, which will be the advantages of the smaller networks?
There are a lot of small advertisers that will not be able to meet the minimum CPC prices or daily budgets of the large ones, so the need for small networks will remain. Moreover, if you are a niche network - the way Quigo was - then I think you will do fine.
5. Do you expect more exchange modells as RightMedia to being developed?
Yes. The massive rise in value will encourage many more Right Media clones, especially independent ones.
6. Do you think that in the future advertisers will only work with exchange modells without using classic networks?
No, advertisers will always want to balance simplicity with choice. Over time the use of networks becomes a must and something else becomes experimental. I’d say all advertisers should include ad networks in their mix, but other types of efforts will pop up, such as (for example) pay for call, or sponsorship. You are seeing a lot of flat-fee deals, for example, because some CPC prices have experienced hyper inflation. These things work in cycles.
7. Which of the current technologies such as behavioral targeting or social ads do you expect to establish?
I have covered BT’s limits here. Social networking advertising is also more hype than substance right now. Marketers in 2007 shun the hypothesis of advertising on social media sites, and I think 2008 will only reinforce that. Admittedly, as a producer of professional content, I am biased, but the truth that belief of mine precedes the bias. It is because I don’t think that advertisers will embrace user-generated media that I produce professional video content, and not the other way around.
8. Do you expect new technologies or trends to evolve?
I do think eventually more and more advertising will be locally-driven and this will only further pull dollars away from radio and newspaper advertising.
9. What do you think will the online advertising market look like in 3 years?
Wow. Three years is a long time. In 2004 (three years ago), a lot of things were different and frankly, there will be more change. Anyway, I think more and more marketers will use the Web because the Web is tracked, targeted and timely. An advertiser can turn a campaign on and off in a timely fashion, so there is much less waste online. We all hear about how tracked and targeted nature of online ads will draw more dollars from offline, but I think the third T - timeliness - is almost as important.
Other things we have covered include the blurriness of lines between technology and media, software and advertising. This was manifested by the MSFT/aQuantive deal, and the WPP/247 Real Media deals.
Apparently, Sam’s Club is getting into search engine marketing services. Sam’s Club is Walmart’s answer to Costco/Price Club. On the surface, this is an April Fool’s joke, right?
Wrong. This makes sense. For one parent company Walmart is all about offering discounts and introducing efficiency to inefficient markets. Say what you want about putting out mom and pop businesses, but did those companies really have strong businesses to begin with? Were it not Walmart, then someone else would have entered the market. That’s not the humanitarian in me speaking, perhaps, it’s the economist.
Walmart is no newbie to business, it has seen Google become one of the most valuable businesses in America thanks to search engine advertising and Walmart wants a piece. It would make little sense for Walmart to do many of the things that command high growth rates online, but SEM actually makes sense. The reason is actually quite simple and intuitive: most of Sam’s Club clients are small and medium sized businesses that are increasingly looking to use the Web to build a client base and promote their services.
From the company’s own boilerplate:
SAM’S CLUB is a low-margin, working warehouse, offering consistent savings on more than 4,000 items, from appliances to home or office supplies; from apparel to frozen foods, produce and baked goods. Members are traditionally small- and medium-business owners, or individuals who understand the value of the membership shopping format. Annual business memberships are $40, and individual memberships are $45 (both $5 less than the prevailing rates in this retail category).
As Google becomes bigger and bigger, it will turn its attention to Fortune 500 advertisers and global agencies, and many of the S&M sized businesses will continue to become increasingly disillusioned with Google. I am not saying Walmart will succeed, but I am saying that it makes sense to offer Sam Club’s mainly small business clients SEM services. I actually can think of a way Walmart could kill in this category, but for that, I expect at least a free membership to Sam’s Club.
This question requires a far longer post and what not, but if you like nice, fat, juicy round numbers, it’s worth noting that as of today’s market close, the sum of Apple and Google’s market capitalization yielded $400 Billion.
With Apple flirting with $200 per share, that gave it a value of $175B, and Google came in today at $225B
In case you are wondering, Microsoft sat at $342 Billion.
All three made the list of our Top 10 technology stocks of all-time, check out the order here.
