Steve Wozniak was at my alma mater recently, we dispatched a team to cover his chat. Here is one of many videos.
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For most companies and investors, the 1990s was a lost decade. Not for Apple. Not at all.
From Tech Crunch:
When Steve Jobs returned to Apple [in 1997] the company had just completed a fiscal year where they lost about $1 billion on $7 billion in revenue. The company was worth about $4 billion. Rivals like HP and Dell were worth about $62 billion and $8 billion, respectively.
Today Apple is worth a staggering $184 billion on revenues of $36.5 billion and net income of $8 billion. The company is now worth far more than HP and Dell combined. Hewlett Packard is worth just $119 billion, and Dell is worth $28 billion. You could throw another Dell in there and Apple would still be worth more.
Historically Google hasn’t had to do much marketing to attain it’s near monopoly of search traffic, with roughly 70% market share. But with Microsoft spending $100 Million on its push for Bing, could Google be feeling the pressure, however slight it may be?
Last week Google released a series of videos (commercials) dubbed “Search Stories” which leave a taste of emotion and a simple tag line to boot “Search on.” The series follows a fictional user on their quest for answers pertaining to an initial query, which evolves into another query and another and so on.
WatchMojo was surprised and excited to see one of our own videos featured as a result for one of the fictional user’s queries.
With nearly 4,000 videos that have generated more than 90 Million views woldwide, covering diverse topics such as Belly Dancing, MMA, or Justin Bieber, it was inevitable that WatchMojo would be asked to participate in an ad campaign for the Google Network. The thing is, we weren’t asked, this actually sort of happened by accident… I guess it’s like having your app featured in an iPhone commercial, just because Apple thinks it’s cool, not cuz you paid big money for it!
Okay, maybe it’s not as lucrative as being in an iPhone commercial, but here at WatchMojo we still think it’s pretty cool and we totally consider it a compliment and validation that the last 3 years of hard work are finally starting to pay off and the world is beginning to sit up and pay attention to us…
Watch the ad in question after the jump and feel free to let us know what you think about the ad, WatchMojo, Google, or whatever : )
The Ad In Question:
The Video That Was Featured:
According to URLFan, courtesy of RWW:
#1. en.wikipedia.org (1)
#2. youtube.com (3)
#3. flickr.com (2)
#4. twitter.com (9)
#5. google.com (4)
#6. myspace.com (6)
#7. facebook.com (-)
#8. imdb.com (5)
#9. nytimes.com (7)
#10. apple.com (8)
Read more on RWW.
I actually like the ongoing “crazy-like-a-fox” trajectory Rupert Murdoch has taken over his career. But if does go ahead and agree to some kind of exclusive deal with Microsoft’s search engine Bing, it better not be for a puny $15M but something in the scope of $50-100M.
Remember, he paid $5.7 billion for the Dow Jones company, parent of WSJ, partly due to the promise of what that asset would be worth by untapping digital opportunities. Yes, the market has changes, advertising has lost favor to subscriptions and what not, but still… just because WSJ.com might get a guaranteed revenue to de-list from Google is half the battle, it’s the price of that exclusivity that matters.
Looks like it, by setting up a second class of shares to allow management to remain firmly in control of operations, Facebook is sending the clear message that it will IPO in the next year or two.
Of course, it could also be a less sublte message to Google, Microsoft and a few deep pocketed others that if they wish to acquire the world’s number one social networking site, the time is nigh.
Admittedly, that is not a major statement to make, as few companies have the firepower to make a $1B+ purchase. But I do see this playing out in 2010.
Here’s why.
Social media is revolutionary, but it’s not the best canvas for advertising. We’ve seen various iterations of social media all belly-flop with advertising (UGC being the most notable).
These days, the obsession is with monetizing Twitter with advertising. I don’t think that is the way to proceed. We first made that case in Twitter’s 140 problems where we looked at e-commerce opportunities. Frankly, that was a couple of years ago, today I see Twitter as a lean and stripped out “content and user management system” with a licensing model. Basically, follow WatchMojo’s latest videos here or my pontifications here. If this is a $1 billion company, so be it. It’s clearly not what you or I think; valuation is largely determined by the greater fool theory, where you just need someone to come along and bid $1 more.
When the recession hit and advertising retracted, I thought this was a good thing for the company, because it forced them to think outside of advertising.
The Twitter PR machine said “well, we never really wanted to insert ads” but now that the economy has stabilized and advertising is flowing faster to online and wireless, advertising-as-the-model is back in vogue.
Of course, a lot of this is the media writing about it.
These days Twitter itself is hinting at commercial/premium accounts, which is vague.
Honestly, I think Twitter needs to grow up and start to experiment with commercial methods, fast. But since 99% of business models and business plans are DOA, they fear doing anything that shows just how hard monetization is.
Clearly, they wisely raised $100 million before growth slowed down, but now, it’s time to stop talking and build a business. They impression I get, is that they keep moving the chairs around and it’s becoming a tad tedious. I don’t blame them at all for raising a massive round while they remained in spreadsheet-only-business-model mode.
How Will Users React to Twitter’s Business Model?
Trust me, whatever the model, the users won’t mind. Well, let me say that the bulk of users who don’t really use Twitter won’t even notice. The power users will just welcome the fact that Twitter is doing something. If it’s acceptable, the users will at least know how - if at all - it affects them. If it’s not, the users will go crazy and Twitter will adjust. That’s the beauty of web business models and their user ecosystem.
Developers, Developers, Developers…
Most importantly for Twitter, the developers who build Twitter-based apps need to know. Facebook seems like a dangerous platform to build apps for because of their track record of (naturally) changing the rules of engagement to maintain power in the ecosystem.
I Don’t Even Know What I Don’t Know…
I think the reason why Twitter has been a bit more liberal and open is that they themselves don’t know where the ship is headed and are willing to ride it out.
So Why Will MSFT or GOOG Buy Twitter?
Ultimately, I think what they will do, is offer for free something someone else charges for and that will encourage that someone else to just buy them for something like $1-2B.
From the above-linked NYT article:
Tuesday was another typical day for John Chow, blogger and Internet entrepreneur in Vancouver, British Columbia. Mr. Chow treated his 50,000 Twitter followers to a photograph of his lunch (barbecued chicken and French fries), discussed the weather in Vancouver and linked to a new post on his Internet business blog.
Then he earned $200 by telling his fans where they could buy M&M’s with customized faces, messages and colors.
So basically, instead of Google managing leads and referrals for you through their organic and paid search database, Twitter will offer you referrals through their followers and advertisers database. Great. Glad we know the plan.
The thing is, Twitter, I think, won’t charge for any of this, at least not initially.
Recall that with the $25M that Kleiner Perkins and Sequoia gave Google, it was enough to bankroll free-freaking-search to users. Don’t you think Evan Williams, Biz Stone, Fred Wilson et al. will be able to keep Twitter free long enough thanks to their $100M until Google realizes that Twitter is doing what Microsoft threatened to do, which is make ads free so that Google loses revenue?
Once this materializes - and it’s possible to argue that it already has - then either:
- MSFT will buy Twitter so it can continue to keep referrals free, forcing Google to reduce their cost-per-click rates down, and thus lose revenue,
or…
- Google will buy Twitter to do what it does best: shut it down and avoid this scenario from happening.
Sure, you can argue that Twitter doesn’t want to sell, blah-blah… but while Facebook resisted selling but has since raised revenues to $550M or so, I am not sure the same will happen with Twitter, for Twitter, we once argued, was Facebook but with less upside. I don’t know if these two companies are even worth comparing anymore as they do wildly different things… but all in all, while Facebook probably did the right thing by selling, it remains to be seen if Twitter should hit the cash register in 2010 or not.
Crazy that a few years ago, Rupert Murdoch was toying with the idea of setting the WSJ.com website totally free… and now with ad revenues plummeting, it’s all about subscription sales.
Advertising? WTF is that? Read more. I wrote about how this sudden aversion to positioning their companies for ad revenues will come back to haunt them by the time they implement these subscription initiatives.
Esquire profiles Ryan Kavanaugh, Relatively Media’s CEO, in its Best & Brightest feature. I had heard about Relativity but didn’t know much about the people or story behind it. Esquire does a great job of diving into the company that finances movies for the likes of Sony, MGM, Universal, Time Warner, etc.:
“What separates Kavanaugh from most producers is not just that he’s making movies, it’s how he’s making movies.”
(…)
It’s All About the Numbers
People sometimes criticize me for taking a very analytical approach to content creation for the Web, but I don’t make apologies. Reading the profile on Kavanaugh, I won’t lie, I almost feel vindicated:
“What I first see is a bunch of numbers,” says Ramon Wilson, Relativity’s thirty-year-old executive vice-president of business development.
(…)
Before Relativity commits to financing a particular movie — either through its slate deals with Sony and Universal or on its own — it’s fed into an elaborate Monte Carlo simulation, a risk-assessment algorithm normally used to evaluate financial instruments based on the past performance of similar products.
Enough variables are included in the Monte Carlo for Wilson and his team to have reached the limits of their Excel’s sixty-five thousand rows of data: principal actor, director, genre, budget, release date, rating, and so on. After running the movie through ten thousand combinations of variables (in marathon overnight sessions), the computers will churn out a few hundred pages that culminate in two critical numbers: the percentage of time the movie will be profitable, and the average profit for each profitable run. The computers will also calculate the best weekend for the movie to be released, whether Russell Crowe will earn his salary or Sam Worthington will be good enough, and the box-office effect of an R rating versus PG-13. But for Kavanaugh, those are secondary considerations: Unless the movie shows the distinct probability of a return — no one at Relativity will reveal the precise green-light figure, but it’s something like 70 percent — the script gets shredded. “Everything has to run on the principle of profit,” Kavanaugh says. “We’ll never let creative decisions rule our business decisions. If it doesn’t fit the model, it doesn’t get done.”
Ok, we don’t quite have that system. In fact, so much of it is straight from the gut. But the approach, or rather, the belief that you cannot be self-indulgent when it comes to producing things is paramount at WatchMojo.
If You Create It, Will They Watch? (It Depends.)
Yet today, we’re the only company that is in a position to adopt and maintain a ”Field of Dreams” approach to creating entertaining and informative content. Of course, we do so based on a set of criteria and editorial and marketing guidelines. It’s not a free-for-all where I green light every idea. Or rather, while I am willing to entertain any idea from anyone, it has to fall within the parameters that have proven successful.
We create content people watch; the results speak themselves: nearly 100,000,000 streams since launching in 2006.
The definition and measure of success is of itself debatable and subjective, I am well aware of that. But we’re the only new media company that gets paid guaranteed licensing revenue from other media companies… that is not a grey matter and explains why unlike many video companies (not just content companies) we actually experience the odd month where we’re in the black.
You Want People to Think You’re Crazy
Another thing I particularly like reading about Kavanaugh is proving the naysayers wrong. In Malibu Mag’s Ryan Kavanaugh: The Fall and Rise:
“I was told every day by the biggest people in the industry that I would never make it; they were laughing at me,” Kavanaugh said. “They don’t want to believe that someone can do something different. But I put my blinders on, fought hard, stuck to my plan and never gave up.”
(…)
Kavanaugh couldn’t afford the rent initially posted at the office he wanted, so he struck a deal with the landlord to pay half the rate in the first year and double it the second year. Relativity now has multiple floors in the same building with 65 employees, all of whom Kavanaugh calls his greatest strength. He took a mortgage out on his house at the time for $300,000 and put all of it into the company. There were times, he said, when he didn’t know if he could make payroll.
I know the feeling. Continues Malibu Mag:
That was 2004. Today, Relativity has major dealings with almost every key studio in Hollywood.
I also know the feeling. Back in 2006, people thought:
- I was crazy for investing in premium video content, they felt that I was at risk from both the bottom (UGC) and the top (super premium). Nearly four years into the venture, UGC has fallen flat on its face as marketers reject the medium, and super premium producers see a lack of ad dollars on the Web (relative to offline and traditional outlets) so they shun to publish on the Internet.
- I was insane for producing everything from automotive, to business, entertainment, lifestyle, music, sports, travel and video games. Today, we’re ubiquituous. Who else, do you know of, that supplies content to both mass market aggregators (such as Hulu and YouTube) as well as vertical content producers (such as Thomson Reuters and IGN).
I don’t frequently publicize my plans to venture in super premium content. I won’t today either. But all I will say is that once you have enough data on what kind of content works and you have built a distribution network across multiple platforms, it becomes almost too easy to move from producing premium content to super premium content.
As a small aside, the Esquire article refers to his favorite movie. I actually recall watching it and to this day, the last scene from the movie haunts me:
But there’s a poster on the wall of Kavanaugh’s office, a tattered one-sheet from what he says is his favorite movie, a movie so unpopular that he could find the poster only in Spanish: En algún lugar del tiempo — Somewhere in Time. It’s a 1980 tearjerker starring Christopher Reeve and Jane Seymour as unlikely lovers separated by a half dozen decades, until Reeve learns to close his eyes and open his mind and convince himself that he can travel through time. It was a critical and commercial failure, and yet something about it worked for Kavanaugh. Maybe it was the physics behind it. Maybe it had something to do with where he was when he first watched it or the lens he saw it through. Whatever it was, even he can’t explain why, exactly, Somewhere in Time caught hold of him. “It’s just an insane love story,” he says, his hands held out at his sides. “Titanic was an insane love story, too.”
It is insane, I won’t give the ending away… all I will say is after watching that movie, you never see a penny on the street(or any coin for that matter) the same way.
