Influencers in the online world

Robert Scoble has a note on how invisible influencers can drive interest in products. As I just started reading Malcom Gladwell's Tipping Point (four years after all connected people I imagine), I look forward to re-read Scoble's article when I've finished the book. But I think that one thing that makes the online world different with regards to influencers is the ability for a person to turn him-/herself into a de facto publishing platform at no (direct) cost. Regardless of channel (web, e-mail, IM) it is really easy and cheap to spread information in a way that cannot be described as truly one-to-one but rather one-to-many (publishing).

Yahoo, contextual ads and switching costs

Umair at bubblegenrations comments on the Yahoo Mail and resources comment I made a couple of days ago. Sometimes I wonder if he isn't a bit too into strategy (in a good way, though) for me to truly understand his reasoning, but still I have some comments.

I don't agree with the notion that Google has a significantly more trustworthy consumer brand than Yahoo, especially not among American users. I'm not sure that contextual ads in an e-mail environment is good for the advertiser, nor am I sure that e-mail providers will be able to sell the idea of such ads to their users (the privacy concerns). If Google can sell their users on the idea of contextual ads in Gmail, I don't believe that Yahoo won't be able to do the same to users of Yahoo Mail. Basically I think users believe both corporations will treat their private e-mails confidentially and chose the service that they like the best. So switching costs won't be affected in a major way by contextual ads alone. But, that's just my 2 cents...

AdSense is not free branding

Over at the excellent Searchblog John Battelle seems to have fallen for 24/7 Media's FUD campaign about AdSense and image ads. Just because the payment isn't based on CPM (pay per impression), doesn't mean that the advertising is free. Especially when Google will drop any image advertisment that yields less than a text-AdSense ad.

CPM or performance-based (CPC/CPA) is about risk allocation between the publisher, the network and the advertiser. Not about getting cheaper advertising, even though that might be the result.

The basic rule to remember in online advertising is who controls the number of advertisments shown and what the ads look like.

If the advertiser pays CPM the publisher show whatever advertisment the advertiser wants (within ToCs, of course) the number of times paid for.

If CPC/CPA the publisher decides how many times the advertisment is shown. If the advertiser doesn't pay enough, the publisher should show other ads. By pushing prices up via an auction (like Google does) or by direct negotiations with advertisers and by demanding better, direct-response oriented ads, the publisher increases its revenue as both CTR and CPC goes up.

To optimize profitability the publisher will mix CPM and performance-based, as few sites can sell all inventory at higher CPMs than the good performance-based deals can generate.

Yahoo has the resources

Umair over at the excellent bubblegeneration writes that Yahoo hasn't got the resources to compete with Gmail's 1GB of storage and its upping of the limit to 100 MB for free users of Yahoo Mail is done to please analysts. I disagree with the notion that Yahoo hasn't got the resources to make it work, as Overture's ContentMatch technology would only need minor tweaking to be an AdSense clone.

Shoestring marketing

Four marketing tips for the entreprenuer who doesn't want to spend a fortune on advertising. You can always exchange time for money, paying a high rent is often a cheap form of advertising, giving away free samples is a cheap form of advertising and what you say to customers actually matter.

Regulation costs leading to MBOs?

According to an article in Financial Times more CEOs of big, public companies are thinking of taking their companies private. The cite the new Sarbanes-Oxley regulations as the prime motivation of going private. This could lead to interesting times for private equity firms and the likes of Berkshire Hathaway, as primarily mid-sized companies will have the ability to go private.

But companies still will want to go public. The new regulations ought to push the size needed to be a public company upwards. As a result VCs will have to stay with their companies longer. Just some ramblings on the topic...

EA and Xbox Live

Convincing Electronic Arts to develop games for Xbox Live is no doubt a huge win for Microsoft. I assume EA was the real winner in the negotiations, as Microsoft had everything to lose by not having EA onboard.

When I worked in the games industry I developed a basic rule for estimating the success of a console. If EA is supporting the platform, it will have a chance of survival. If EA is not supporting the platform, the console is DOA. By signing EA, Microsoft makes Xbox Live a true contender in online field.

Google is becoming the new Yahoo

Lots of smart people have noticed this, but Google is clearly marching in the direction of becoming a portal. Or more specifically a new Yahoo. Search, mail, communities and news for the B2C-market is what makes a portal. The healthy ($500 million+ in annual sales) B2B-business as a advertising network and technology provider also mimics Yahoo.

How Google will keep its brand as strong and focused as it is today, I don't know. But it clearly looks like there will be some room for a new pure-play search engine pretty soon.

Toyota Way

I began reading The Toyota Way by Jeffrey K Liker a couple of days ago. I am about a chapter into it and I believe I'll enjoy it. The focus on operations coincides with a course in school, which makes the book even more interesting. Another book on operations I like is Eliyahu Goldratt's The Goal.