Yahoo CEO Carol Bartz has been removed, and the question is whether the company can succeed under ANY leadership. It has two problems: its Internet startup culture and its unwillingness to take advantage of potential partnerships with telcos and cable companies.
Absolutely, Kim. Global total adspend is about $700 billion and total global network services is about five times that. It should be clear that it would be smarter to figure out how to sell something than to figure out how to ad-sponsor something, but VCs use voodoo math, apparently, and buzz is what drives social startups.
While there may be strategies to make online ads that much more effective, isn't there a quite independent problem that ad dollars - and target "eyeballs" - are finite and are being outrun by the number of advertising platforms the Internet is creating every day?
That's kind of a reflection of the challenge of online ads, Nicole. We have a lot of good historical data on how ads work in traditional media, but in online even though in theory we should get really good metrics, we have little really good data. Is an "impression" really making an impression? I did some research on this topic and found that for seasoned IT professionals visiting tech publication websites, they typically ignored site-pre-roll banner ads so completely they had no sense they were even there. The same research showed that where ads were linked contextually to editorial material on the same page, they had a very high level of recall. Thus, to your point, relevant ads are powerful online. The trick is making them relevant. My own work would suggest that ad success depends less on demographic or behavioral targeting and more on contextual targeting, meaning that you put ads for crock pots on slow-cooker recipe pages and ads for TVs on pages talking about the features of HDTV sets. It's surprising to me how often that doesn't happen!
"There are only so many eyeballs, only so many dollars per eyeball, and we've trained two or three generations of consumers on how to ignore ads."
Those are the two big problems for this industry. Eyeballs do not automatically equal dollars, yet there are still many companies subscribing to that theory (I cannot figure out why); and consumers are continuously being given the tools to avoid/ignore advertisements. Now the online advertising industry may be working backwards, serving less relevant ads (more likely to be ignored) in order to comply with privacy demands. In other words, it's time to come up with alternatives to advertising as a revenue stream and abandon the users = dollars "logic."
The big winner in the OTT space may end up being somebody like Amazon. Think about it. if the goal of advertising is to get somebody to buy something in an indirect, manipulatvie way, why wouldn't the direct approach--sell it to them--be better? What companies pay in retail spread to get their products and services to the market is much larger than their ad budget.
Seen in this light, the Amazon tablet might be more significant than just an iPad competitor!
You are so right about this Tom. I look on in amazement at what are thought of as major players in the industry, still acting like start-ups, trying to figure out how to turn their bright idea into reliable, long-term revenue. GroupOn. YouTube. Maybe even Twitter.
Google figured it out with search, but search is not the future. It seems to be laying down some strong alternative plans. LinkedIn seems to have figured it out through subscription. Facebook through sinister omnipresence. But I think we will see some very big names run out of steam in the not too distant future.
That's like selecting between leprosy and tuberculosis, I think! The problem is that there are too many people trying to monetize ad appearance. There are only so many eyeballs, only so many dollars per eyeball, and we've trained two or three generations of consumers on how to ignore ads. I'd back political websites; there's no shortage of money there!
So, should I back Yahoo or AOL. Having trouble deciding.
It's almost as if some of these early Internet start-ups have spent the last ten or more years waiting for the money to come to them. Yahoo has enormous traffic on its home page, doesn't it? You'd think they could bake some cake with that.
Great analysis. It absolutely escapes me how Yang and co. could have judged the market so poorly. Many startups take nothing for granted and realize how hard they have to work to sell out to anyone, much less Microsoft. How that eluded Yahoo mystifies me.
The whole Amazon.reader debate is a double-stupid. It's stupid to think that there's any e-book buyer who doesn't know Amazon's URL, and it was stupider to let ICANN launch the whole free-form TLD initiative to start with.
Subsidized handsets, rather than locked handsets, should be the focus of regulators. We're not getting good deals, not fostering innovation, and weakening our power as buyers.
50 billion household devices will be on the Internet by 2020, according to Cisco. And we're hearing foreign governments are hacking our infrastructure. Surely our refrigerators are next!
YouTube's move to a partial pay-for-view model could help relieve a dearth of good new content but it could also complicate debates in many parts of the world over payment by content providers for delivery of their material to customers.
That's what Larry Page said on Google's earnings call, referring to the conjunction of mobile and the cloud. Well, let's chart it then! We need to be thinking about an Internet where 90% of our traffic goes to 70 destinations within 40 miles of us.
Facebook's Graph Search may face some profound challenges and risks, first, because Facebook users haven't been thinking of their posts as product reviews; and second, because Facebook will now have to contend with the social-network equivalent of SEO "gaming" of results.
EU operators are considering joining up to create a pan-European network to reduce competitive overbuild and cost. This might lower costs and focus operators on higher-level, more interesting services.
With the advent of low-cost Web cameras and broadband network connections, home security systems have become a hot business. In addition to traditional security suppliers, like ADT, the market is attracting telcos, cable companies, and energy providers, thereby creating an area of increasing competition.
Verizon has made the Xbox into a basic set-top box, so does that mean streaming video will replace TV after all? That's complicated. It turns out there are three different video models and three different futures for them.
Skype recently acquired GroupMe, a startup developing tools to make mobile communications simpler. The move underscores dramatic changes in that market, ones that will change how executives communicate.
Maybe Google+ will be competitive and maybe it won't, but it's likely to introduce video calling and OTT communications as a replacement for standard telephony. There will be major consequences to this, and we don't have an FCC or political framework capable of coping.
Comcast's deal with Skype for on-TV videoconferencing seems illogical on its face: It encourages the worst kind of traffic for cable broadband providers. So could they have a deeper strategy to monetize this, one that might test neutrality rules yet again?
Customer interest in mobile video transmissions is growing. However, there is not enough bandwidth now to support rich exchanges – a shortcoming that could stymie movement to applications like mobile videoconferencing.
Comparing Internet services is tough because service providers price and market their services based on a best-case scenario connection that most consumers will never enjoy.
That's what Larry Page said on Google's earnings call, referring to the conjunction of mobile and the cloud. Well, let's chart it then! We need to be thinking about an Internet where 90% of our traffic goes to 70 destinations within 40 miles of us.
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