The Disruptor

How Not to Be a Spammer When Marketing Your Business

2012-05-14T17:32:00.000+08:00

by Riva Richmond | Entrepreneur.com

Email is the single most effective marketing tool for many businesses -- and being blocked as an email spammer can be their biggest headache.

It's getting more difficult to get into inboxes, as the battle between spammers and Internet service providers rages on. Nearly one in four commercial emails doesn't make it to the inbox and is either shunted to spam folders or blocked altogether, according to a March report by Return Path, a New York email deliverability monitoring firm. Six months earlier, that figure was one in five.
Small companies often run afoul of spam filters, even if they have opt-in email lists of supposedly willing recipients. Many who are new to email marketing start off on the wrong foot, says Dennis Dayman, chief security and privacy officer at Eloqua, a Vienna, Va., marketing software and services company. "They 'spray and pray' and hope that someone will click and buy," but are hit with angry complaints and find their emails blocked as spam, he says. Ironically, many companies send too few messages to have their way smoothed by Internet Service Providers (ISPs) as known commercial email senders.

But you can significantly improve your odds of reaching customers and prospects by taking the right steps. Here are some essentials to keep in mind:

Polish your reputation.

Spam filters used to look closely at email content and punish spammy messages (i.e. Viagra! FREE!!). But experts say sender reputation is by far more important now.
In the same way a bad credit score can freeze you out of the lending market, a bad sender score for your domain name or IP addresses can keep your emails out of inboxes. ISPs, including Hotmail, Gmail and Yahoo Mail, use a number of tools to determine sender reputation. Key among them is the number of user complaints, which are made by clicking a report spam button. If more than one in a thousand email recipients complain, your messages will be blocked altogether, says Tom Sather, senior director of email research at Return Path. Messages that fail to engage recipients can also hurt you.

Once you start being relegated to the spam folder, it can be difficult to get out. "People have to report that you're not spam," Sather says.

Your first task is to find out just how liked or disliked you are. Return Path offers a free online service, senderscore.org, where you can plug in your IP address, see your score and find out the underlying causes of a bad one so you know what to fix.

Use clean lists.

ISPs punish senders with shoddy email lists. Avoid buying lists as they typically include spam traps, which are fake addresses used only to catch spam, and addresses of people who haven't given permission to receive marketing messages, Dayman says. These people are more likely to complain and less likely to buy anything.

It can be time consuming, but you're probably better off building a list of real customers and prospects who have agreed to receive email from you. When you ask customers for email addresses, have them specify the types of email they want to receive. If they agree to a newsletter but not marketing messages, honor the request -- or risk dinging your reputation. Also consider segmenting your list by type of customer to make it easier to send relevant messages.

Also, maintain good list hygiene by regularly removing addresses that bounce or opt-out. If necessary, thoroughly cull your list by sending a message asking for permission to continue sending email and keeping only the addresses that respond.

"It's not about having the biggest email list," Dayman says. "Move yourself over to a quality-over-quantity mentality."

Hone your content.

Spammy content triggers spam filters only 17 percent of the time, Sather says. But if you are new to email marketing or too small to have built a reputation, that rate could be higher.
London-based fundraising website Go Get Funding had problems with email delivery when it was launched in December. "Our welcome email mentioned the words 'raise money.' We changed that to 'raise funds.' We removed exclamation marks when they probably weren't needed, and overall, toned down emails," says founder Sandip Singh. The delivery rate improved significantly.
Moreover, annoying and irrelevant messages can lead some recipients to click the "report spam" button. Avoid trouble by targeting messages, clearly identifying yourself in the "from" address, crafting an engaging subject line and making sure messages appear correctly on PCs and mobile devices.

Hire help.

When it comes to sending commercial email, there's strength in numbers. Consistent volumes of 30,000 emails a month or more enable ISPs to recognize legitimate senders, Dayman says. If you don't send that much email, consider teaming up with other small and responsible senders by sharing servers or using a recognized emailing service such as Constant Contact, iContact, Mailchimp or VerticalResponse. Using marketing tools can boost your sender score and firms such as these can help you manage your lists and otherwise stay on the straight and narrow.
Plans are often free to start but can grow to hundreds of dollars a month, depending on email list size and volume.

Source: http://negosentro.com
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Homer Nievera Business Development. Digital Marketing. Social Media. http://homernievera.net

Facebook's Lack of a Female Voice

2012-02-04T18:35:00.001+08:00

A report in Bloomberg calls out Facebook's lack of a female voice in its board of directors. This puts FB at odds with other industry leaders, including Linkedin and Google, who both have at least one female as director.

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Homer Nievera Business Development. Digital Marketing. Social Media.
http://homernievera.net

2011-09-30T15:10:00.001+08:00

Attention. Good marketing has to catch attention. But up to what extent?
Read this article from Yahoo! and tell me what you think:

PETA to launch its own porn site: Does exploiting women promote animal rights?
by Lylah M. Alphonse, Senior Editor, Manage Your Life, on Tue Sep 20, 2011 3:05pm PDT

People for the Ethical Treatment of Animals, the animal-rights group known for its controversial ads featuring nearly naked starlets, is taking their "I'd rather be naked than wear fur" idea to a new level by launching their own XXX porn site.

That's right: The same organization that fights to protect animals plans to do so via a medium that often exploits and denigrates women.

"We're hoping to reach a whole new audience of people, some of whom will be shocked by graphic images that maybe they didn't anticipate seeing when they went to the PETA triple-X site," Lindsay Rajt, PETA's associate director of campaigns, told Reuters

The X-rated site will show pornographic content and images from PETA's more risque ads, Rajt said. Those images will be interspersed with pictures and videos showing animals being mistreated—and (we're not making this up) links to vegan and vegetarian "starter kits" and recipes.

"When people first visit the site, it will be very enticing and once they go just a little bit deeper, that's when they'll be confronted with images that we hope will make them stop and think and get them talking and hopefully encourage them to make a lifestyle change to a plant-based diet," Rajt said.

Yes, they expect it to be "enticing." But to whom? People who like crush films, porn that shows women killing small animals by stomping them to death?

It seems unlikely that people who are drawn to both pornography and violent video about abused animals would be looking for a way to convert to vegetarianism. But that's PETA's plan.

Other animal rights activists are skeptical about the idea.

"It's like promoting robberies as an alternative to assaults," said Brian M. Messenheimer, an Army veteran who does animal rescue work in the Boston area.

Adult film stars Sahsa Grey, Ron Jeremy, and Jenna Jamison have all appeared in PETA's ads and have had very successful careers in porn, and PETA insists that the women they'll feature on their port site are willing participants as well, so exploitation doesn't enter into the equation.

"Our demonstrators, the models, all chose to participate in our campaigns," Rajt pointed out, before invoking the "F" word: "It's not a very feminist thing to do to turn to women and tell them whether or not they can use their voices, their bodies to express their voice."

But for countless other women who were forced into the porn industry or are stuck in sexually violent relationships, being a "willing participant" doesn't mean they aren't also victims of abuse. Messenheimer looks at it in terms of animals. "Does it lessen the fact that dogs trained to fight are willing participants?" he asks.

Pornography and feminism aside, PETA has also been criticized for its treatment of the animals it claims to have rescued. According to their own data, filed with the Department of Agriculture in Virginia, in 2010 PETA took in 2,345 homeless dogs and cats—and euthanized 2,301 of them.

What do you think? Is pornography a valid way to promote animal rights?

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Homer Nievera
Business Development. Digital Marketing. Social Media.
http://homernievera.net

Social Media Case Study: ArtBabble Shows How Video is Done

2011-09-08T10:04:00.000+08:00

By Richard MacManus

This week we're looking at how social media is being deployed in museums. The idea with our Social Media Case Studies series is to analyze how social media is actually being used by organizations, which we hope will provide inspiration or assistance to others. We started with Brooklyn Museum yesterday. Despite being impressed by the presence of Brooklyn Museum on many social media platforms, I concluded that the museum is spreading itself too thin. I think it would be better off focusing on deeper engagement on fewer channels. Some of the feedback suggested that I was overly critical. That wasn't the intention, however I do think constructive criticism motivates us all to find more creative ways to use social media.

Today we're going to review a service that creatively uses video. Called ArtBabble, it's an art video service run by the Indianapolis Museum of Art (IMA). Want to know some best practices for integrating video into your social media plans? Look no further...

With a tagline of "Play Art Loud," ArtBabble is kind of a portal for video art content. Although it was created by the Indianapolis Museum of Art, many of the America's top museums and (some from overseas) are listed as partners. ArtBabble was launched in April 2009.
There are three main sections: Series, Channels, Artists.

The Series section features series on a certain theme, such as a series called Making Art from the J. Paul Getty Museum. That one features 7 instructive videos, on topics ranging from Gem Carving to Making a Spanish Polychrome Sculpture. Personally, I'm planning to check out the series entitled Abstract Expressionist New York.

The Channels are topic-focused sections. For example Asian Art features over 100 videos.
Finally, the Artist section lists out individual artists. For example I discovered an excellent video about the late San Francisco artist Margaret Kilgallen.

One of the best features in ArtBabble is that each section (Series, Channel, Artist) has its own RSS feed, so you can subscribe to video content in a very granular way. It also features all of the usual social touches, such as ratings, comments and tag clouds.

ArtBabble is an elegantly designed site with a lot of compelling content in it. Perhaps the biggest lesson here for other organizations is that the video content on ArtBabble comes from dozens of art museums, so it is varied and regularly updated. It's not always possible to collaborate with others on content, but for a social site it's always a plus.

Let us know what you think of ArtBabble in the comments, also any other site that you'd like to give a shout-out to for its usage of video.

Source: ReadWriteWeb

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Homer Nievera
Business Development. Digital Marketing. Social Media.
http://homernievera.net

And Now Yahoo Has Put Itself Up For Sale...

2011-09-08T09:59:00.000+08:00

(Source: Business Insider)

In addition to firing CEO Carol Bartz, Yahoo's board has now put the company up for sale.

The person who briefed the Wall Street Journal on the Bartz firing also told the paper that "Yahoo is open to selling itself to the right bidder."

That's the equivalent of sticking a FOR SALE sign on the lawn.

The board canned Bartz, the WSJ's sources say, after studying the company's assets for two weeks and concluding that Bartz was doing a lousy job. If this is really true, one wonders what on earth the board has been doing for the past two years, while pretty much everyone else concluded the same thing.

There's no quick fix for Yahoo. The company needs to embrace the fact that it's now a media, content, and communications company--and make heavy investments in those areas. It needs to radically streamline itself. And it needs a leader with a clear product vision and the ability to execute on it.
The trouble with the above prescription is that, if the board is equally happy to just sell Yahoo, this leader will be even harder to find. And, in the meantime, the company will be even more firmly entrenched in the purgatory that has frozen it for the last couple of years.

Please follow SAI on Twitter and Facebook.
Follow Henry Blodget on Twitter.

Read more: http://www.businessinsider.com/and-now-yahoo-has-put-itself-up-for-sale-2011-9#ixzz1XK1l6ydk

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Homer Nievera
Business Development. Digital Marketing. Social Media.
http://homernievera.net

Is this How Globe Telecoms Looks at Loyalty?

2011-08-26T14:00:00.000+08:00

True story.

My wife went to a Globe outlet in a mall and talked to the customer service personnel on getting her Iphone 4 unit based on her loyalty points.

Yes, there were available units that day. Guess what? They can't give her any of those units as those units were allocated ONLY for walk-in new subscribers.

I understand that part. But in marketing 101, it takes you more than 10 times the cost acquire a new customer than to service a loyal one. So how come they don't have stocks for loyal customers in their branches? Shocking indeed!

Hey Aissa, can you sound off your clients? There's something a-miss here.

Cheers all!

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Homer Nievera
Business Development. Digital Marketing. Social Media.
http://homernievera.net

My Samsung Series 5 LCD Quit!

2011-08-26T09:28:00.000+08:00

What a crappy sales pitch...and a crappy product!

My Samsung 40-inch LCD Series 5 Full HD TV (model# LA40B530P7RXXP, serial# AZ8F3DG5400026V) simply quit on me last weekend.

In their sales pitch at Automatic Center in Alabang where I bought it, they said the LCD screen's life is at least 10 years. Guess what?!? It conked out in less than 2 years! WTF?!?

So there we went to the authorized Samsung service center, Lenwon Electronics, to have it repaired. Surprise! Surprise! It will cost me at least twenty thousand pesos! You gotta be kidding. That's the cost of a brand new 40-inch LG LCD!!!

Hey Samsung guys, you gotta do something about your crappy service and your crappy product!

p.s. notice the exclamation marks in this entry)

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Homer Nievera
Business Development. Digital Marketing. Social Media.
http://homernievera.net

Warning Warning against new carnapping modus

2011-08-18T19:21:00.001+08:00

THIS PERTAINS TO EVERYONE--MEN INCLUDED.

Warning..!!!! Warning....!!!!

Just last weekend on Friday night we parked in a public parking area. As we drove away I noticed a sticker on the rear window of the car. When I took it off after I got home, it was a receipt for gas. Luckily my friend told me not to stop as it could be someone waiting for me to get out of the car . Then we received this email yesterday:

------------------------------------------
"Warning from Police"

THIS APPLIES TO BOTH WOMEN AND MEN BEWARE OF PAPER ON THE BACK WINDOW OF YOUR VEHICLE--
NEW WAY TO DO CARJACKINGS (NOT A JOKE)

Heads up everyone! Please, keep this circulating. You walk across the parking lot, unlock your car and get inside. You start the engine and shift into Reverse.

When you look into the rearview mirror to back out of your parking space, you notice a piece of paper stuck to the middle of the rear window So, you shift into Park, unlock your doors, and jump out of your car to remove that paper (or whatever it is) that is obstructing your view. When you reach the back of your car, that is when the carjackers appear out of nowhere, jump into your car and take off. They practically mow you down as they speed off in your car.

And guess what, ladies? I bet your purse is still in the car.

So now the carjacker has your car, your home address, your money, and your keys. Your home and your whole identity arenow compromised!

BEWARE OF THIS NEW SCHEME THAT IS NOW BEING USED.

If you see a piece of paper stuck to your back window, just drive away. Remove the paper later. And be thankful that you read this e-mail. I hope you will forward this to friends and family, especially to women. A purse contains all kinds of personal information and identification documents, and you certainly do NOT want this to fall into the wrong hands.

Please keep this going and tell all your friends.

The Medvedev Girls

2011-08-02T16:05:00.000+08:00

Source: Business Insider

No one knows exactly what to expect from next year's Russian presidential election.

Sources have been saying that Vladimir Putin is mulling a return to the presidency, while Dimitry Medvedev himself has recently been looking increasingly independent of his mentor.

More importantly, a response to the mysterious "Putin's Army" has been found -- the "Medvedev Girls" (h/t Miriam Elder).

Apparently affiliated with the group "Medvedev - Our President", the girls are planning to meet on August 4 to show their support for Medvedev.

Worth noting -- at the time of writing the video has 6 likes and 47 dislikes. A good sign for Putin?

Read more: Business Insider

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Homer Nievera
Business Development. Digital Marketing. Social Media.
http://homernievera.net

Nestle's Value-laden short film: Unplugged

2011-07-14T14:31:00.002+08:00

Something worth sharing and watching.

Nestle has done a good job with it's array of short films. Here's "Unplugged"....

Like It on Facebook: http://www.facebook.com/unpluggedfilm

Congrats to my friend Ricky Baizas!

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Homer Nievera
Business Development. Digital Marketing. Social Media.
http://homernievera.net

The Ribman's Response to Groupon Bashing

2011-06-20T16:52:00.000+08:00

Sharing from TechCrunch

Editor’s note: Carey Friedman is the proud owner of Grandpa Eddie’s BBQ in Richmond, VA. This post is in response to a guest series on TechCrunch taking a critical look at Groupon’s business model.

I’ve been reading a lot of stories on TechCrunch lately coming down hard on Groupon and, like other happy Groupon merchants, wasn’t going to comment because I thought it was a single story with one author’s thoughts. However, after seeing story after story trying to pick apart every single piece of Groupon, I felt it necessary to write about my experience. I’m also hoping that I’m the first BBQ restaurant owner who to write for TechCrunch.

I had tried almost every other form of advertising in the past with varying degrees of success. Then our Groupon sales rep contacted me. I had heard about similar deals before and had turned down the offers. However, Groupon offered me something different. At the time, there were 86,000 people signed up for Richmond’s Groupon list (many more now). After she explained the details, how everything worked and what to expect, I ran the numbers on the discount and wanted to give it a try. There is no better way to get almost 90,000 unique impressions for so little cost. We ran our first deal in December of 2010 and sold 1,184 Groupons.

Let me say this loud and clear—for my business Groupon has worked incredibly well. The first deal I ran was $10 for $20 worth of food and drink. I was told to expect nearly a thousand deals sold and was pleasantly surprised that we sold nearly 1,200. Of those 1,200 customers, we found that 70% of them were new customers, a great average right off the bat. Of those 800+ new customers, we have seen more than half of them return. Also, let’s not forget all the people who came into my restaurant in the weeks following the Groupon deal and told me that they saw my business on Groupon, missed the deal, but still came anyway because they wanted to try out a new restaurant. That kind of exposure for a small business is invaluable! We were seen by tens of thousands of potential customers in our area and that didn’t cost a dime!

Now, back to the Groupon customers. We tracked every Groupon redemption on our point of sale (POS) system and found that only a handful (literally five or six), had a ticket total that was under the price of the Groupon ($20). We found that customers, on average, spent at least $12 on top of the price of the Groupon, and that was before they came back and paid full price (most more than once). And this is at a BBQ restaurant! One consistent factor has been that Groupon customers are much more likely to add an appetizer or dessert to their check, since they know the first $20 only cost them $10. This has been a wonderful way to not only up the ticket average on the redemption, but also has given the customers a broader taste of our menu. When they come back without the Groupon, they are more likely to order that extra item again. Also, I found Groupon customers to be better than the average “coupon” customer. These are people that were interested in trying a new restaurant and open to the idea of coming back. There was only a small percentage of guests who were just looking for a bargain.

Another number that I track, which many other restaurants do not, is what my employees claimed on tips. It gives me a good idea of the overall traffic in my restaurant and how confident my customers are with the economy. From my experiences over the past 29 years in the industry, when the economy is rough, tips are one of the first things to take a hit. During the first quarter of 2011 my employees claimed over $4,000 more in tips than the same period in 2010. This was during the first three months of our redemption period and was by far the highest volume of Groupons. It is indisputable that Groupon brought the vast majority of these customers to our door. Groupon customers were some of our best tippers and nearly always, almost without fault, tipped on the total bill, not the discounted check.

One of the best reasons I found to use Groupon is that it’s trackable. Buying a newspaper ad doesn’t allow you to see who’s coming in as a result. With Groupon, you can see your marketing dollars at work and have the chance to convert Groupon customers to regulars, something we’ve done a lot. My employees were thrilled when we ran the deal because we were always busy and that’s a good thing. Our bottom line has been raised significantly and I owe a lot of that to Groupon.

Please don’t dismiss this story as an anomaly. I have recommended Groupon to other small business owners, some of whom have run deals with Groupon and done very well (Havana Connections in Richmond for one). The positive stories are out there in abundance, even though we may not yell as loud or as frequently as others.

Will everyone succeed using Groupon? Probably not. As a business owner, I feel like it’s my responsibility to look at this marketing tool and see if it works for my business. There is no question that it has paid for itself better than any other advertising medium we have ever used. The Groupon sales reps have been extremely helpful in telling me what to expect and how to prepare as well. For me, and, I suspect many other small business owners, this is a no brainer. For the money I spent on the discount, not only was I able to get my message out to almost 90,000 separate individuals, but I was easily able to capitalize on this and turn many of the guests into regular customers. Where else can a small business get that kind of marketing access? The simple answer is nowhere.

I am now running my second Groupon deal, and launched it on the exact day that the first offer expired. We sold over 2400 Groupons, even more than the first time.

--------
Groupon

Website: groupon.com
Location: Chicago, Illinois, United States
Founded: November 11, 2008
Funding: $1.14B
Groupon (www.groupon.com) features a daily deal on the best stuff to do, see, eat, and buy in more than 565 cities around the world. By promising businesses a minimum number of customers, Groupon can offer deals that aren’t available elsewhere.
… Learn More
Information provided by CrunchBase

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Homer Nievera
Business Development. Digital Marketing. Social Media. http://homernievera.net

10 Social Media Stats that still Surprises Us

2011-06-19T00:33:00.000+08:00

SHARING...
--------------------------------------------------

10 Social Media Statistics That May Surprise You

The social media landscape is changing at a rapid rate. The reason? More people are joining the “social media game” everyday….some who you wouldn’t even expect!

Recently, I was looking at some very interesting statistics reported by Yougov.com which illustrated some very interesting trends. I thought I would share them wh you as they may just change the way you think about sites such as Facebook, LinkedIn, Twitter and YouTubeHere are the top 10 social media statistics that just might surprise you:

3 out of 5 Facebook users access the site more than once per day AND the younger the user, the more they log on.
Men are more likely to use Twitter or YouTube.
Woman are more likely to go on Facebook multiple times per day.
Some of the most staggering growth has been in in the 55 plus market. Over 40% of 55+ social networkers have been registered on the sites for less than two years!
Even more interesting? 28% of Facebook users are over 55.
Men and youngsters are more likely to be influenced by what they read on social media and are more likely to engage by commenting and interacting.
Of the market of 18-24 year olds, 62% interact through comments and such.
Of the market of 55+ users, only 32% interact through comments and such.
On social media sites, men tend to be drawn to topics such as sports, newspapers, radio, financial services and music.
When it comes to the interest of women on social media, they flock to fashion, beauty, food and drink.

Here’s a more detailed breakdown of the differences in how men and women engage on social media:

Music: Women 12.3% – Men: 17.6%
Sports: Women 5.4% – Men 15.5%
TV: Women 10.5% – Men 12.6%
Newspapers: Woman 4.3% – Men 8.8%
Food/Drink: Woman 7.0 – Men 8.3%
Travel: Women 6.9% – Men 8.3%
Fashion: Woman 2.9% – Men 7.8%

These statics show that as our social media community grows, we can see definite trends in usage that illustrate there are many opportunities to promote your business online. The days of Facebook being only used by college students is well and truly behind us and we are now in the days when grandma is using Facebook and grandpa is on Twitter.

Source: Blogma
Written by Chris Tompkins

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Homer Nievera Business Development. Digital Marketing. Social Media.
http://homernievera.net

Why Groupon Is Poised For Collapse

2011-06-14T18:28:00.000+08:00

Sharing from TechCrunch

Editor’s note:This guest post is part of an in-depth series looking at the daily deal industry written by Rocky Agrawal, an entrepreneur who has worked on local products since 1995. Read Part I, Part II, and Part III also. He blogs at reDesign and Tweets @rakeshlobster.
Imagine you’re a small business owner. You have to choose between two propositions:

You can pay $62,500 for marketing. You’ll get a whole lot of customers coming through your door. No guarantees if they will ever come back, but they’ll come once.
I’ll pay you $21,000. You get $7,000 in about 5 days, another $7,000 in 30 days and the remainder in 60 days. In exchange, you’ll give my customers cheap products for the next year.

I’ve been working on local for a long time and I know it’s hard to get small businesses to spend money on advertising. Really hard. Even getting $200 a month ($2,400 a year) is a high hurdle to meet.

There’s no way a business will sign up for #1. Most merchants would laugh you out of the store if you asked for $60,000.

Except they are. In droves.

Although they sound completely different, #1 and #2 are really the same—it’s the Groupon business model.
Businesses are being sold incredibly expensive advertising campaigns that are disguised as “no risk” ways to acquire new customers. In reality, there’s a lot of risk. With a newspaper ad, the maximum you can lose is the amount you paid for the ad. With Groupon, your potential losses can increase with every Groupon customer who walks through the door and put the existence of your business at risk.

Groupon is not an Internet marketing business so much as it is the equivalent of a loan sharking business. The $21,000 that the business in this example gets for running a Groupon is essentially a very, very expensive loan. They get the cash up front, but pay for it with deep discounts over time. (This post applies to Groupon operations in the United States and Canada; it’s different in other parts of the world.)
In many cases, running a Groupon can be a terrible financial decision for merchants. Groupon’s financials also raise questions about its ongoing viability. Buying Groupon stock could be as bad a deal for investors as running a Groupon offer is for merchants. This is my opinion, but I have some facts to back it up.

Traffic is not necessarily profitable traffic

Groupon can clearly deliver customers. But in order to know if it makes financial sense as a customer acquisition tool, merchants need to know two key numbers:

The proportion of Groupon customers who are already their customers
How often new customers come back.

The higher the first number, the worse their deal will perform. The higher the second number, the better their deal does.

But for most businesses, these critical numbers are impossible to know. Groupons haven’t been out long enough to generate this data. And Groupon’s tracking methods aren’t collecting this data. (My intuition is that Groupon doesn’t want to know.)

Groupon touts a win-win proposition. But the reality is that Groupon usually wins and merchants usually lose. The merchant agreement is one of the most lopsided I’ve seen.

It’s rare that Groupon loses . . . until merchants figure out how to cheat.

The hidden auction

Underlying Groupon’s success is an auction. It’s not explicit, like Google’s AdWords bidding platform, but the economic effects are similar. The fact that Groupon runs daily deals creates artificial scarcity and drives up pricing to absurd levels. Even with four deals a day in a given market, you’re talking about fewer than 1,500 deals a year.
The “bid” in this auction is the total revenue that goes to Groupon. That’s a function of the value of the voucher, the negotiated revenue share and the number of deals that will be sold. The number of deals that will be sold is a function of, among other factors, how deep a discount and how commonly needed the product is. The larger the discount, the greater the volume.

All of this creates an incentive to drive up Groupon’s revenues. It also provides an incentive for salespeople to sell bigger and bigger deals, some of which might not be suitable for a small business. Because of all the hype around Groupon, salespeople are able to use the “Who’s Who” model—sell what an honor it is to be specially selected to be featured on Groupon.

Groupon’s process for selecting which deals it runs has little transparency. It’s not always the highest bids that win; sometimes, lower value bids win just to keep subscribers opening their emails. (In this case, think of merchants bidding with discounts, so the deeper the discount, the higher the bid). I’ve also heard from merchants who say Groupon has changed their deals at the last minute to make them more profitable for Groupon.

Cash is king

Many small businesses are struggling for cash and the Groupon sales pitch resonates. Marketing with no upfront payment. You get cash within days. A steady stream of customers. This is not a new idea. Rewards Network has been offering restaurants cash upfront in exchange for discounted meals over time. (But on more generous terms than Groupon.)

Groupon’s S-1 calls tough economic times a risk; but the recession was really their opportunity. As other forms of credit dried up, struggling businesses jumped at the chance to get cash now in exchange for discounting their product later. The real risk for Groupon is that the economy improves to the point that businesses don’t have to resort to deep discounting.

Repeat Groupon businesses

Some of the analysis of Groupon’s long term prospects has pointed to repeat Groupon offers from merchants as evidence of a viable long-term model.
How can a repeat customer be bad, right? For a Groupon merchant, a repeat customer is a great thing. But for Groupon itself, a repeat customer can be a sign of trouble ahead.
I had been struggling to understand why some businesses ran repeat Groupons or cycled among the various daily deal vendors, given that the economics clearly suck if you can’t drive repeat traffic. Some let the same customer buy 3 or more of the same deal. That’s a clear no-no for a loss-leader designed to acquire new customers.

A conversation with Forkfly (a Groupon Now competitor) CEO Paul Wagner was enlightening. He suggested that they were doing what struggling families do when they max out a credit card—they get another one.
That makes perfect sense. Revenue from subsequent daily deals help pay for the obligations created by the first one.

Receipts look like the one at right. Lots of product going out, staff to pay and little cash coming in. Taking out another Groupon loan is a quick fix. (If I were a sales rep, I’d have that date marked on my calendar for follow up. “I know we did 50/50 last time, but I’m thinking Groupon gets 70% this time.”)

Hacking Groupon

How would you exploit an overpriced loan? Don’t pay it back.
Assume that you’re a business that is unscrupulous and you’re looking to make a quick buck. You could create a wildly generous deal that would sell like crazy. In about 30 days, you’ll have 2/3 of your share of the deal. Then you shut down operations.

It also works for businesses that are just having a tough time. As critical as I am of Groupon, the slam dunk case is to sign up with Groupon if you’re going bankrupt. I strongly encourage every business that is about to go under to call Groupon. (Don’t tell them Rocky sent you.) It makes total financial sense—as a Hail Mary play. If you’re lucky, the upfront cash will be enough to help you stay afloat. If not, well, you were already going out of business. It may be your best option. In the short term, you’re actually helping Groupon because they’re being valued on revenue and no one is taking into account risk.

Groupon is essentially holding a portfolio of loans backed by the receivables of small businesses. If a business goes under, consumers will come back to Groupon for their money back. Unless Groupon is actually doing credit assessments on businesses that it chooses to feature, this is a big risk for Groupon.

The onerous terms for participating in Groupon also create an adverse selection problem. The most successful businesses don’t need Groupon for customer acquisition or financing.

The assumption is that nothing will go wrong and all of these “loans” will be paid back. (At least the subprime mortgage lenders were able to sell that risk off to Wall Street and AIG.)

Like the mortgage lenders, Groupon doesn’t know exactly how much risk it has piled up. Because some merchants track redemptions on paper, Groupon has no way of knowing how many unredeemed Groupons are outstanding. If a business goes under and the records are unavailable, every buyer of that Groupon could try to make a claim against it. (The risk is mitigated by the fact that a lot of redemption occurs within the first 60 days, but we don’t know how much.)

Google, with more than $36 billion in cash on hand, is uncomfortable enough with that risk that it dumps it onto Google Offers buyers. Groupon could mitigate this risk by changing its terms and conditions so that the consumer is responsible in case a merchant goes bankrupt.
Relying on float

Where does Groupon get all the money to give to these merchants? Credit cards—yours. Groupon gets paid within a couple of days by its banks. It then takes that money and gives it to the merchant in three chunks. From Groupon’s S-1:

Our merchant payment terms and revenue growth have provided us with operating cash flow to fund our working capital needs. Our merchant arrangements are generally structured such that we collect cash up front when our customers purchase Groupons and make payments to our merchants at a subsequent date. In North America, we typically pay our merchants in installments within sixty days after the Groupon is sold.
We use the operating cash flow provided by our merchant payment terms and revenue growth to fund our working capital needs. If we offer our merchants more favorable or accelerated payment terms or our revenue does not continue to grow in the future, our operating cash flow and results of operations could be adversely impacted and we may have to seek alternative financing to fund our working capital needs.

Translation: They’re using money from new deals to pay for previous deals. They need to keep growing revenue. As of March 31, they owed merchants $290.7 million.
In the agreement I’ve seen, the first installment is 33% in 5 days. If they have to pay merchants faster, that could lead to problems.

And Google might force that to happen. According to Google Offers’ payment terms, merchants receive 80% of their share in 4 days—more than twice as much, 1 day earlier.
There’s no way that was an accident.

If Groupon matches these payment terms, they’ll need cash faster and need to grow faster. (Google Offers accelerates the rate at which Groupon’s scheme has to draw in new suckers.) If Groupon doesn’t match, it gives Google a key differentiator to win deals. If those businesses go with Google’s more generous terms, that too will starve Groupon of the cash it needs to pay earlier merchants.

Now here’s the crazy part. Not only is Groupon effectively giving loans to merchants, but it also works the other way around. The merchant is on the hook for the entire value of those deals until Groupon pays the merchant back its portion. Unlike other loan providers, the merchant is making a short-term loan to Groupon. (Not technically, but effectively.) They buy inventory in advance of the Groupon run. They also serve the initial rush of customers. The business is in a hole before they get their 30- and 60-day Groupon payouts.

While the chances might be small, Groupon merchants should know that they’re taking on the risk of Groupon’s collapse. If Groupon collapses, a lot of small merchants could be left holding the bag.
If you know of a business that closed after running a Groupon or other daily deal, please send an email with the name of the business to dailydeals@agrawals.org. And remember, correlation is not causation.

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Homer Nievera Business Development. Digital Marketing. Social Media.
http://homernievera.net

Advertising to Facebook Fans Improves Conversions, Says Study

2011-06-13T11:27:00.001+08:00

Source: ReadWrite Biz
By John Paul Titlow
-----------------------------

The cost of converting people to sign-up for events, purchase products and register for services decreases considerably when businesses run Facebook advertisements that target existing fans, as opposed to non-fans. Registration acquisition costs can be 44% cheaper, while event sign-ups cost 33% less and purchases are 15% cheaper to achieve.

This is according to a recent blog post on Inside Facebook, who was privy to data from the social advertising agency TBG showing these results. Over the course of a thirteen-client, 4.1 billion ad impression study, TBG found that targeting Facebook fans was more effective than targeting non-fans when it comes to these specific types of conversions.

It makes sense that consumers who have already declared their appreciation for a brand are more likely to purchase their products or sign up with that company. If I'm not yet acquainted with a given brand, I'm probably going to be far less inclined to spend my time or money with them.

To get consumers to that point, these data suggest, businesses would be wise to invest more effort in acquiring Facebook Fans, since these people appear to be so much more inclined to act.
Thanks to studies like this, we can begin to see the answer to that ever-elusive question: Does all this social media stuff actually offer any ROI to businesses?
Explains Josh Constine on Inside Facebook:

For instance, if a health care company planned on acquiring 1 million registrations over a year via Facebook ads at $10 per registration, it could save $4.4 million by advertising to its Facebook fans instead of the general Facebook population. This means if the cost of attaining enough fans from which to secure 1 million health care registrations is less than $4.4 million, the company has produced a direct return on investment on its Facebook fan acquisition strategy without even counting the value of being able to communicate directly with the fans through Page updates.

Results may of course vary depending on industry, market and the nature of the ad campaign. But by analyzing billions of ad impressions TBG is able to provide a pretty solid and reliable sample size.

What have you been seeing with your Facebook ad campaigns? Do fans or non-fans seem to offer greater value? Any other take-aways?

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Homer Nievera Business Development. Digital Marketing. Social Media.
http://homernievera.net

Google buys Admeld for $400 M

2011-06-10T22:35:00.003+08:00

No wonder my friends at Admeld have silent the past weeks.

AdMeld, an advertising optimization platform for publishers, has been acquired by Google for around $400 million in an article in TechCrunch. Not bad for a company that initially got a US$30 million in VC funding in 2007 from Foundry Group, Spark Capital, Norwest Venture Partners and Time Warner Investments.

Michael Barrett

According to the article by Michael Arrington, the deal is some sort of "a sweet comeback for CEO Michael Barrett" who was reportedly fired from News Corp. in 2008 "when the division that owned MySpace failed to meet a $1 billion revenue target." According Arrington, "most sources we spoke with at the time said he was the fall guy for an unrealistic revenue target to begin with, set by News Corp.’s Rupert Murdoch in a previous earnings call."

Way to go Admeld!

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Homer Nievera
Business Development. Digital Marketing. Social Media.
http://homernievera.net

Heineken's Ad on Multiply Marketplace

2011-06-09T11:04:00.002+08:00

Cool execution for a simple video ad on Multiply's Marketplace. It launches from the Heineken bottle on the lower left-most corner of the page. Non-intrusive but definitely something you'd be curious about.

Notice the Heineken bottle on the lower left corner?

The Heineken video launches by mouse-over or click.

Here's the full video:

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Homer Nievera
Business Development. Digital Marketing. Social Media.
http://homernievera.net

Game Time, Lunch Time!: McDonald's Interactive Pong Billboard

2011-06-07T15:20:00.001+08:00

McDonald's Pick n Play: Interactive Pong billboard brings big-screen elation, tomorrow's lunch

You could enjoy that Big Mac in the peace and artery-clogging quiet of your local McDonald's, or you could just catch the next flight to Stockholm, where Ronald apparently serves his meals with a side of interactive, outdoor gaming. It's all part of something called Pick n' Play -- a new (and pretty ingenious) ad campaign that invites pedestrians to play a game of Pong on a giant Mickey D's billboard, using only their smartphones. All you have to do is stand in front of the display, log on to Pick n' Play's site from your handheld, and wait for your phone to verify your location. From there, you'll have to manipulate an onscreen paddle using your device's touchscreen, while doing battle with a game that gets increasingly more difficult. Last thirty seconds, though, and you'll get a free, lipid-drenched treat of your choice, courtesy of the Golden Arches. Best of all, you won't even have to download an app to get your Pong on -- putting you one step closer to that coronary you've always wanted. Trot past the break to see it for yourself.

Source: Engadget
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Homer Nievera
Business Development. Digital Marketing. Social Media.
http://homernievera.net

MOL Acquires LoadCentral, Philippines’ Leading Prepaid Payment Platform

2011-06-01T11:59:00.001+08:00

Purchase of LoadCentral Will Strengthen

MOL’s Offerings and Presence in Asia

MANILA, Philippines, June 1, 2011 – MOL AccessPortal Sdn Bhd (MOL), a leading payment service provider for online games, virtual worlds and social network in Asia, today announced that it has acquired 100% of LoadCentral, Philippines’ leading prepaid payment platform.

The acquisition will create synergy for both organizations and enhance growth prospects. LoadCentral’s leading position in providing prepaid payment platform to consumers in the Philippines will give valuable access to new channels for delivery of MOL’s products. Following the acquisition, the combined company becomes the largest payment provider for prepaid services for the growing online gaming market in the Philippines.

LoadCentral, which operates under the company name Uniwiz, distributes mobile air-time and game credits, using both scratch cards and electronic top-ups through an expanding and profitable network of some 7,400 convenience retailers and Internet cafes across the Philippines. LoadCentral provides payment services for more than 1,500 popular online games. Prior to the acquisition, LoadCentral was a distributor of MOL’s range of payment services for online games. LoadCentral will continue to trade under its brand name following the acquisition.

Founded in 2000 and headquartered in Malaysia, MOL is one of the largest payment service providers with more than 500,000 physical and virtual payment channels in Asia. MOL, which acquired the pioneer social networking site Friendster in December 2009, has also announced several major partnerships with global leading Internet companies in the last year. These strategic partnerships with companies such as Facebook, Paypal and Zynga launched new monetization services for these companies in Asia. MOL also partners with some of the leading payment channel partners across the region including banks, telecommunications operators, cybercafés, retail outlets, convenience stores, among others.

“The Philippine online gaming and social networking markets are experiencing spectacular growth. These are now part of Philippines’ dynamic digital entertainment and media industries. Our vision is to make it easy and safe for consumers in the Philippines to acquire virtual currency for their digital lifestyle,” said Ganesh Kumar Bangah, Chief Executive Officer of MOL. “With the support of the seasoned and highly capable executive team at LoadCentral, I am confident that our complementary businesses will create synergy and strengthen our position in the rapidly expanding Philippines prepaid service market. This acquisition reflects MOL’s continued commitment to invest in key markets across Asia.”

Jeff Boone, LoadCentral’s General Manager, said: “We identify with MOL’s vision of serving the e-commerce infrastructure needs of our customers. We have been seeking to expand our business in the Philippines and are pleased to have attracted a company specializing in an exciting high growth segment of our market. We are excited that LoadCentral can further grow the business and be part of MOL.”

----------

About MOL AccessPortal Sdn Bhd

MOL AccessPortal Sdn Bhd (MOL) is one of Asia’s leading payment service providers. MOL is a MSC Malaysia Status Company that operates and develops payment system. MOL handles over 60 million transactions with an annual payment volume of more than US$300 million. MOL leverages on a network of more than 540,000 physical payment collection points across more than 75 countries. It is also linked online to more than 88 banks in 9 countries worldwide. MOL is recognized as one of the Asia Pacific’s fastest growing technology companies in the Deloitte Technology Fast 500 Asia Pacific Awards 2011. MOL is headquartered in Malaysia with offices across Asia Pacific. For more information, visit www.mol.com <http://www.mol.com> .

About Uniwiz Trade Sales, Inc. and LoadCentral
Uniwiz Trade Sales, Inc. is the developer and owner of LoadCentral, Philippines’ most successful distribution solution provider for all prepaid services including e-Loads, physical call cards, prepaid Internet cards, online gaming cards, satellite cards and others.For more inforation on LoadCentral, visit: www.loadcentral.org <http://www.loadcentral.org> .

MOL is a trademark of MOL AccessPortal Sdn Bhd in Malaysia. All other product and company names herein may be trademarks of their respective owners.

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Homer Nievera
Business Development. Digital Marketing. Social Media.
http://homernievera.net

Microsoft’s Web-Based Marketplace to Send Apps to Windows Phones

2011-05-30T11:27:00.002+08:00

Source: Mashable
-------------------

When Microsoft rolls out its Mango operating system for Windows Phone 7 this fall, the company will debut a new web-based version of its Windows Phone Marketplace at the same time, according to Microsoft’s Windows Phone Developer Blog.

The web-based Marketplace will let users select and buy any of the platform’s 17,000 apps on a web browser and then send them directly to their Windows phones over the air.

When clarifying the service to Engadget, Microsoft said it expects most customers to download apps to a Windows phone over the air, but that if the Marketplace service is not activated on a cellphone, it will use SMS to turn on the over-the-air app service before software is downloaded and installed.

Microsoft added that users will also have the capability of sending themselves an email with a link to the app, but the company expects most users will instead let the apps install in the background.

The Mango operating system aims to make cellphones “smarter and easier,” focusing on efficient multitasking, enhanced cloud integration and better platform tools for developers.

Related post: Windows Mango Phone

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Homer Nievera
Business Development. Digital Marketing. Social Media.
http://homernievera.net

Kabam raises $85M for hardcore social gaming business

2011-05-27T12:54:00.000+08:00

Source: Gamesbeat
--------------------
Here’s a “kaboom” for all those social game skeptics out there. Kabam has raised $85 million in a fourth round of funding to fuel its business making hardcore games for social networks such as Facebook. The backers include Google Ventures, Pinnacle Ventures, Performance Equity and SK Telecom Ventures, as well as earlier backers.

It’s as good a sign of disruption in games as any. Based on the funding from such heavy-duty backers, Kabam is now one of the most valuable independent companies making games on Facebook. In terms of users, it is far outgunned by market leader Zynga (poised for a possible initial public offering), which has 247 million monthly active users on Facebook. Kabam has just 7.2 million monthly active users. Zynga has raised hundreds of millions of dollars, but Kabam is holding its own, raising $125 million to date.

People will shake their heads at the amount of money here and what it says about the likely valuation. But as we noted in a review of Kabam’s games, the investors here aren’t crazy. Kabam clearly has users who are far more valuable than the standard social game player, because Kabam’s users are willing to pay Kabam a lot of money for a hardcore game experience on Facebook. Kabam’s four active games include Dragons of Atlantis, Kingdoms of Camelot, Glory of Rome and Global Warfare (below).

They’re all hardcore role-playing games where users play for four hours at a session, compared to maybe 10 minutes for a Zynga game. About 90 percent of Kabam’s players log into their games six or seven times a week. That’s what Kevin Chou, chief executive of Kabam, calls engagement. Those gamers are running the game in the background while they’re multitasking. That allows them to have lots of time to play all day long, even as they do other work. Such gamers would never have a four-hour stretch to play a console game.

Chou says that about 80 percent of the company’s players say they play hardcore games on the consoles or the PC. And now they are spending less time with those games and more time with Kabam games. This had to happen. With nearly 700 million users, Facebook has become a mirror of society. And society includes a lot of hardcore games. Kabam is one of the few companies to realize this and to target those gamers, who are accustomed to spending a lot of money on games. Kabam blends the immersive game play of massively multiplayer online games with the social satisfaction of social networking games.

Kabam was founded in 2007 as Watercooler and funded by Betfair and Canaan Partners. It had around 20 employees for quite a while as it experimented on Facebook, making sports fan pages and sports games. It had a big hit with its first major role-playing game, Kingdoms of Camelot, which quickly pulled in millions of users. The game still has 1.5 million monthly active users 19 months after its launch. Kabam also acquired WonderHill, a San Francisco game company that developed Dragons of Atlantis, which has become Kabam’s most successful game to date.

Kabam’s games are free-to-play, where users play for free and pay real money for virtual goods such as more Centurions for the Imperial Roman Army in Glory of Rome. While many users play for free. There is a sizable percentage of users who pay money for the time-saving aspects of the game. And the funny thing about hardcore gamers is that they’re willing to pay more than $60 to get their fix. Whenever Microsoft launches a new $60 version of Halo, it often creates a $125 “legendary” version for the biggest fans.

Ken Pelowski, managing director of Pinnacle Ventures, said Kabam’s typical user numbers are similar to the number of hardcore fans for each console game hit.

“Those console fans are migrating online to free-to-play games, and that is what Kabam is seeing,” Pelowski said. “But here, you don’t have to pay $250 for a box and $50 for each game. Here, you could play the game for free. You could pay hundreds of dollars. You could pay thousands of dollars. The high growth and high value of the user base justifies a higher valuation for the company.”

Kabam’s users are as dedicated as console gamers. They’re willing to spend more than $60 sometimes, just to get a much-needed advantage that will make them look good in front of their fellow alliance members (as many as 100 players can band together in alliances). Chou has said that Kabam isn’t really going after Zynga. It’s the anti-Zynga. It’s going after Activision Blizzard and Electronic Arts instead, with the aim of disrupting their traditional business, Chou said.

This is the place in the story where traditional game company executives cackle at the audaciousness of Chou. But there are a lot of former game industry veterans working for him.

Kabam doesn’t disclose its financial results. But the tea leaves are there. With just four games and $125 million in funding, Kabam has been able to grow from 25 employees to more than 400 in the past 16 months. Chou said the team will be shipping more impressive games, including five later this year.

Console gamers may laugh at the low interactivity of Kabam’s games now, but Chou says there’s a full pipeline of games coming, and each one will reflect learnings from Kabam’s direct observation of millions of gamers. Traditional video game executives would kill to get that kind of feedback. Global Warfare, Kabam’s newest game, has minimalist, cinematic-style cut scenes (as much as Facebook can handle) and it takes the game play from Glory of Rome to a higher level. The game forces players in an alliance to be more social by requiring them to coordinate assaults on strategic resources in the game. I’ve been playing it since it debuted on May 3, and I’ve spent most of that time getting ready to do real battle. That might bore other players, but I consider it to be a fun investment of my time.

There is some precedent for Kabam’s funding. The game industry took notice of the Kabam-style model of getting more dollars out of hardcore gamers when China’s Tencent bought the majority of Riot Games for nearly $400 million in February. Riot Games had only 1 million users playing one game, but those dedicated gamers spent a lot of money. In January, Kabam raised eyebrows and fears of a “bubble” in social gaming when it raised $30 million.

EA, for its part, has its own online role-playing game Lord of Ultima online on Bigpoint.com. But there’s an opening for Kabam to get big in this niche because many of the big traditional game publishers have left the PC game market to focus on the consoles. And the traditional game publishers who have entered the Facebook market are focusing on competing with Zynga for the new demographic of casual gamers on Facebook. No one is really competing directly with Kabam, except other startups such as Kixeye.

But Kabam has to walk a delicate balance with its users. It can get the games to monetize better by making ordinary tasks take longer and longer to do, like sending scouts on a recon mission. The users may get fed up and pay Kabam some money so that it can eliminate the wait. But if the users feel like Kabam is holding them up at every turn and deliberately trying to frustrate them, then they will move on to another free-to-play game that doesn’t treat them that way.

There are some risks for Kabam. The company can stage some massive battles where users send reinforcements to stop attackers from looting a city. But it takes a lot of computing power to make sure that the game doesn’t crash or make the wrong calculation in this kind of scenario. And overall, Kabam needs more servers because its users are online so much. Kabam has to make sure that it doesn’t hit a wall with Facebook’s infrastructure, which wasn’t really built for real-time engagement.

Over time, the social network platform will become better at running online games. And then Kabam will likely try to create games that include the animations and 3D graphics that hardcore gamers want. Chou says the company will also expand into new markets such as Asia, where there is a lot of potential among hardcore gamers. Pelowski acknowledges that there is still a gap where the best console games have a higher quality bar, but Kabam is starting to close that gap. And in the meantime, the company is still monetizing its current games very well.

All of that adds up to a lot of value, says Pelowski. As to whether Kabam is part of a giant social gaming and social networking bubble, Pelowski says the underlying metrics of the business justify the investment.

Existing investors Intel Capital, Redpoint Ventures, and Canaan Partners also participated in the deal.

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Homer Nievera
Business Development. Digital Marketing. Social Media.
http://homernievera.net

Way Cool!: Windows Mango Phone with Internet Explorer 9

2011-05-27T11:22:00.000+08:00

The Windows Mango Phone is way too cool with the IE9 as its main feature.

Though it still doesn't have a Flash Player (they've got Silverlight, that's why) and Thethering, it's worth a second look. It highlights smart communication, apps and the web. Watch the video here for a spin:

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Homer Nievera
Business Development. Digital Marketing. Social Media.
http://homernievera.net

Microsoft soon to buy Skype for $8.5 Billion?

2011-05-10T17:04:00.002+08:00

This is one for the digital books. When Microsoft buys, Skype for $8.5 billion, I'd say this news can rival a Linkedin or even a Facebook IPO. Read the Yahoo! News article here.

Or read the copy-pasted version below:

(Source: Yahoo! News)
-----------------------------------------------------

NEW YORK (Reuters) - Microsoft Corp is close to buying Web video conferencing service Skype Technologies for $8.5 billion including debt, a source familiar with the situation said, underscoring the technology giant's growing ambition to plug a hole in its mobile offerings.

Buying money-losing Skype would have no immediate impact on Microsoft's finances, but would make clear its intention to compete with rivals such as Apple Inc and Google Inc.

Microsoft is putting more energy and resources into the mobile and Internet arenas as the importance of the personal computers underpinning its Windows and Office franchise appears to be under threat.

Microsoft's deal with Skype is expected to be announced as early as Tuesday morning, the source said. The source declined to be named because the talks are not public. Microsoft and Skype declined comment.

The deal would be the biggest in the 36-year history of the world's largest software company.

Despite doubling sales and profit in the last eight years, Microsoft's stock has largely languished at the same level, as investors worry about its ability to counter new rivals such as Google or adapt to new ways of computing.

Facebook and Google Inc were separately considering a tie-up with Skype, two sources with direct knowledge of the discussions previously told Reuters. Google had held early talks for a joint venture with Skype, the second source said.

A source said at the time such a deal could value Skype at $3 billion to $4 billion -- far less than the value put on it by Microsoft's interest.

Skype's planned IPO had been expected to raise about $1 billion, several other sources said at the time.

Microsoft already has video chat as a function in its Windows Live Messenger service, but it is not available on its Windows Phone 7 software.

Skype also makes versions of its own service which can be used as an app on the iPhone and iPad, Research in Motion's BlackBerry and Android phones. It cannot be used on Microsoft phones.

Apple's FaceTime video calling service -- available on its latest iPhone and Mac computers -- has been a big hit with consumers. Google recently followed suit by adding video to its popular Google Talk application for smartphones running on its Android system.

CASH PILE

The deal is relatively small for Microsoft, which has $50 billion in cash and short-term investments on its balance sheet. The $8.5 billion purchase price would likely include the $686 million in long-term debt on Skype's balance sheet.

"I think the price is quite reasonable," said Sean Lee, a Taipei-based manager of the Global Top Dividend Fund at Shinkong Investment Trust, which owns Microsoft shares.

Luxembourg-based Skype, which had delayed plans for an initial public offering, had recently been looking at other options.

Skype was formed in 2003. Ebay Inc bought it in 2005 for $3.1 billion. Last year it took in $860 million in revenue but made a net loss of $7 million, according to data in its initial public offering filing.

In 2009, eBay sold a majority stake in Skype to an investor group that included Silver Lake, the Canada Pension Plan Investment Board and Andreessen Horowitz for $1.9 billion in cash and a $125 million note. EBay retained about a third of the company.

Last year, Skype had about 124 million connected users every month by the end of June. But 8.1 million were paying customers, using Skype to make calls to traditional phones at discounted rates.

A deal would be Microsoft's biggest acquisition since its formation in 1975 if it goes ahead, exceeding the $6 billion it paid for online ad agency aQuantive in 2007, which was not a success.

Microsoft shareholders are generally relieved that its $47.5 billion offer for Yahoo Inc in 2008 was rebuffed, paving the way for a web-search agreement which gives Microsoft most of what it wanted anyway, while Yahoo shares have halved in value.

Microsoft's most high profile Internet purchase was the $240 million it paid for a 1.6 percent share in Facebook in 2007. However, it is also plowing money into its MSN Internet portal and Bing search engine, racking up $7 billion in losses in the last four years.

Technology sector mergers and acquisitions have spiked since last summer, driven by increased confidence in the economy and companies facing pressure to spend mountains of cash stockpiled on their balance sheets.

Global deal volume year to date is up 55 percent when compared with the same period in 2010, recent figures from Thomson Reuters show.

Goldman Sachs and JPMorgan are advising Skype, the source said. Microsoft is not using advisers, the source said.

Earlier, tech blog GigaOM reported news of the potential deal.

(Additional reporting and writing by Megan Davies and Bill Rigby; Additional reporting by Sakthi Prasad in Bangalore and Clare Jim in TAIPEI; Editing by Anshuman Daga)

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Homer Nievera
Business Development. Digital Marketing. Social Media.
http://homernievera.net

5 Things You Probably Didn't Know About Pac-Man

2011-03-05T15:14:00.002+08:00

Five things you never knew about Pac-Man

(Reposted from Yahoo!)

By Chris Morris

Having been a part of the pop-culture landscape for over 30 years now, Pac-Man is a pretty familiar character.

He has adorned cereal boxes, been the star of a Saturday morning cartoon program and appeared on virtually every gaming platform to have ever been released.

That's not just systems from Microsoft, Sony and Nintendo. It also includes essentially every cell phone that has a screen, long-dead portable systems and plug-and-play devices for your TV. Along the way, the little pellet-muncher has built an empire that has allowed publisher Namco-Bandai to survive the worst the economy could throw at it.

But even the most well known icons have their secrets. This week, at the Game Developers Conference in San Francisco, Toru Iwatani, creator of the game, offered a postmortem on the industry's biggest franchise-and told a few tales most fans have probably never heard.

Here are the five most surprising:

The point of the game was to attract girls

While today's player is slightly more likely to be male, gaming in the late 1970s was pretty much exclusively a men's club. Iwatani wanted to change this, creating something that could appeal to both women and families, he says.

"The reason I created Pac-Man was because we wanted to attract female gamers," he says. "Back then, there were no home games. People had to go to the arcade center to play games. That was a playground for boys. It was dirty and smelly. So we wanted to include female players, so it would become cleaner and brighter."

Each ghost had specific orders

When you play the game, it might seem as if the four ghosts are actively chasing you. That's not exactly true. Iwatani intentionally avoided programming them with that purpose, since that would have resulted in Pac-Man zipping around the screen with four ghosts always right behind him.

Instead, it's only Blinky, the red ghost, who doggedly pursues you throughout the game. Pinky, the pink ghost (naturally), simply wants to position itself at a point that's 32 pixels in front of Pac-Man's mouth. The blue ghost, Inky, is seeking to position itself at a similar fixed spot. And Clyde, the orange ghost, moves completely at random.

Because the player constantly has Pac-Man on the go, however, the ghosts are always changing direction and trying to achieve their goal, which adds to the challenge of the game.

What, exactly, does Pac-Man mean?

You may have heard the story about how a pizza with a missing slice inspired Pac-Man's design. But it turns out the game was designed entirely around food.

"I thought about something that may attract girls," says Iwatani. "Maybe boy stories or something to do with fashion. However, girls love to eat desserts. My wife often does! So the verb ‘eat' gave me a hint to create this game."

That theme continued with the game's name. In Japanese, "puck puck" is akin to the U.S. saying "munch munch". So the original name - Puck-Man - translated as "Munch man". (A savvy Midway Games official changed it to Pac-Man when the game hit the U.S. to discourage vandals from shaving off part of the "P," thereby creating an obscene word.)

The missing puzzle piece

Pac-Man was designed to be as simple as possible, to attract a wide audience. The limits of technology in 1980 made this a little easier to achieve. Iwatani says he's happy about this now, but at the time, there was one more thing he wanted to add to the game.

"I wanted to have a shelter and it would move up and down," he says. "When the ghost comes, the ghost would be pinched by the shelter which would disfigure the ghost."

The ghosts were almost just one color

It's kind of hard to picture Pac-Man without the brightly colored ghosts today, but when the game was being developed, Iwatani says he was pressured hard to change that.

The president of Namco ordered him to make the ghosts a single color - red, to be precise - since she believed players would be confused that some ghosts, perhaps, were Pac-Man's ally.

Iwatani refused the order and on questionnaires to the game's testers, asked if they would prefer a single color ghost or four. Not a single person wanted the single-color option. That ultimately convinced the president she was wrong.

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Homer Nievera Business Development. Digital Marketing. Social Media.
http://homernievera.net

Online publishers sign MOU for standard metric system to gauge performance

2011-03-03T12:38:00.000+08:00

By Karen Boncocan
INQUIRER.net First Posted 11:53:00 03/03/2011

MANILA, Philippines – Frontrunners in the industry of online publication have signed a Memorandum of Understanding (MOU) for a standard metric system to gauge their performance.
Six online publishers agreed on Monday to acquire a third-party standard metric system, which according to

Paolo Prieto, president of INQUIRER.net, was a "bold move" aimed at raising advertising spending for the industry.

Those part of this collaboration were Inquirer Interactive, Inc., GMA New Media, Inc., ABS-CBN Interactive, Inc., PhilStar Global Corp., Summit Publishing Co., Inc., Philippine Entertainment Portal, Inc., and BusinessWorld New Media, Inc.

The host of the event, GMA's Edna Belleza, said that talk of creating a standard metric system began five months ago when the six leading publishing companies started meeting regularly. She added that this collaboration among online publishers was relevant to the times, and that the MOU signing formalized their commitment to the progress of the industry.

This development "heralds new and exciting times" to Connie Nolasco-Lopez, managing director of ABS-CBN Interactive, who said that online media was making progress even thought it was before "perceived a platform that is nice to have; a poor cousin to traditional platforms of television, radio and print." Online media, said Lopez, has the global reach and the “growth of access and the increasing amount of time people are spending online," has added to its relevance.

Prieto pegged the number of internet users in the country at 30 million but said that advertisers needed concrete data to base their decisions on placing advertisments. This was where Australian third party standard metric system Effective Measure came in.

Effective Measure analyzes impressions and page views, providing advertisers with the information they need to decide where to place their investments.

To Vergel Santos, Businessworld's executive editor, their collaboration with Effective Measure showed "their seriousness... to heed certain standards."

Summit Publishing and PEP president Liza Gokongwei-Cheng said that Effective Measure would provide "transparency in presenting data as publishers to advertisers using a common standard."
Like the other online media executives, Kevin Belmonte, president and CEO of Philstar.com expected great things from the collaboration, saying "finally, we will have a credible, accurate measurement of our business, across the industry."

GMA Network chairman Attorney Felipe Gozon said Effective Measure would ensure that advertisers would get a "credible standard by which they can judge where to put their money."

Belmonte explained that the move would be beneficial not only to the publishers and advertisers but to the readers as well.

Gary Libby, the Philippine Daily Inquirer's vice-president for Information Technology and Pre-Press and INQUIRER.net’s chief operating officer said that data from Effective Measure would be assessed by April.
Russel Conrad, Regional Director for Effective Measure Southeast Asia, said the MOU signing was special as it was the first in the region.

Other executives who witnessed the event were Philippine Daily Inquirer (PDI) president and chief executive officer Sandy Prieto-Romualdez, PDI chairman Marixi Prieto, Philstar.com chief operating officer Rose Anne Belmonte, GMA New Media president and chief operating officer Judd Gallares, and Businessworld executive editor Arnold Belleza.

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Homer Nievera Business Development. Digital Marketing. Social Media.
http://homernievera.net

Is Print Dead?

2011-03-03T01:00:00.001+08:00

At the dawning of each digital revolution, the question still: "Is print dead?"

I vote a solid "NO." Print, in the form of newspapers, magazines books and journals are still alive albeit fighting for attention in many markets globally. Throughout the years since the birth and commercial use of the Internet, the demise of print has always been predicted to happen. Today, roughly 15 years since, print is still a media force and major information resource worldwide. Usage may be dwindling in developed countries but in Asia, where Internet penetration is still weak, print is still getting enough attention to draw decent advertising revenues.

EMarketer estimated that online ad spending grew 13.9 percent in 2010 to 25.8 billion dollars while spending on print newspaper ads estimated a drop of 8.2 percent to 22.78 billion dollars globally. "The bad economy has actually accelerated the shift to digital advertising," eMarketer chief executive Geoff Ramsey said in his blog last year. He added, "Online ads -- especially search ads -- are increasingly seen by many marketers as a more reliable bet than print ads, which are often difficult to tie to a measurable financial result."

Realistically, however, in the Philippines, where digital advertising was thought to consistently grow 10% year-on-year since 2008, I only estimate the same 1-2% actual media ad spend versus total ad expenditures budgeted for 2011. This is roughly the same figure since at least 2 years ago. The only shift in digital media budgets happens when major sites move about in terms of Alexa rankings. This mirrors the poor education of many so-called digital marketers who try hard to cross the great divide from traditional media.

Don’t get me wrong. I have been in print and digital media longer than many. That revolution is coming and some would say it is already here. But the “tipping point” has yet to occur, especially in Asia.

News gathering and the cultures that move journalists, magazine and book writers hasn't really changed. The only things that have really changed are the ways materials have been delivered and processed. News is now delivered faster to the desks because of new technology. E-Books abound while Amazon's Kindle has been increasingly selling more each year. So just like any other product or service, technology has simply changed or added a way for us to consume information.

I know a lot of young people born in the age of cellphones and the Internet who read newspapers online but still buy printed magazines and devour printed books. How did Harry Potter and the Vampires become monster hits in movies? There is a different pull in terms of feel and experience that the print brings. It won't die. At least not in the next 20 years. It's not a fearless forecast. It's being practical. You can't scan all the books currently in libraries fast enough in 20 years. Even an act of Congress wouldn't pass fast enough to have everything digitized.

So as you read this blog entry electronically, you can soon reach for that newspaper or some paperback and relax for awhile, either in a lounge or a coffee table. Love those glossies, huh?

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Homer Nievera
Business Development. Digital Marketing. Social Media.
http://homernievera.net

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