| Wednesday, Apr 22, 2009 |
What's inside:
Today's Online News
1. Yahoo Hits Earnings, Plans To Shed 5% Of Workforce by Mark Walsh
2. Wikipedia Founder: How To Save The Newspaper Industry by Laurie Sullivan
3. Canadians Embrace Online Video by Gavin O'Malley
4. RIP: Adware Company Zango by Wendy Davis
5. Widget Distributor Clearspring Unveils ConnectedAds by Mark Walsh
6. Red Bee Media Exec Becomes Dailymotion's CEO by Gavin O'Malley
7. StrongMail Puts Data In The Clouds by Laurie Sullivan
8. Digitalsmiths Appoints Move Networks Exec To SVP by Gavin O'Malley
9. Pizza Hut 'Twintern' to Guide Twitter Presence by Karlene Lukovitz
Commentary
10. So, That's What Twitter Is For by Kathryn Koegel
News Briefs
11. Mobile Sites 30% Slower Than Wired Web Browsing
12. ValueClick Rolls Out Mother's Day Package
13. Motorola Exec Named Wahlstrom President
14. Agency Founder Rejoins Denuo
Today's News
1. Yahoo Hits Earnings, Plans To Shed 5% Of Workforce
by Mark Walsh
In its first quarter under CEO Carol Bartz, Yahoo met earnings expectations on revenues that came in slightly lower than forecast. The company also announced plans to shed 5% of its staff, or about 700 people, based on the 13,600 employees it had as of December. The new round of layoffs follows about 1,500 at the end of 2008.
Yahoo reported a profit of 8 cents a share, down 78% from a year ago, on revenue of $1.16 billion -- a 13% drop from the year-earlier period and falling just below analysts' consensus estimate of $1.2 billion.
During a conference call Tuesday, Bartz and outgoing Yahoo CFO Blake Jorgensen acknowledged the impact of the economic downturn on marketers' display and search advertising budgets. Reflecting the pullback, display ad revenue on Yahoo's own sites fell 13% during the quarter, and search by 3%. Analysts had expected display ad revenue to fall by 17%, and search by 1%.
While emphasizing the importance of search advertising for Yahoo, Bartz declined to comment on the company's reported renewed talks with Microsoft about a search and advertising partnership. Earlier Tuesday, the blog D: All Things Digital reported that ongoing talks were "hot and heavy," citing an unnamed source close to the situation.
"Search is a very valuable business for Yahoo, but that's all I'm going to say about search today," said Bartz. Yahoo's search market share is about 20% and Microsoft's is about 8%. In a sign of how far-reaching the recession has become, search leader Google -- with about two-thirds share -- reported its first quarter-to-quarter sales drop last week.
Despite the economic challenges, Bartz assured that the company is focused on "creating kick-ass experiences for users." She outlined three key goals for Yahoo: globalizing its platform to innovate more quickly, building 'wow' products on top of that platform and continuing to invest in advertising products.
"I can't overestimate the past focus that the company had on the U.S. market which really left international properties to almost fend for themselves," said Bartz. So standardizing the look and feel of its key properties across the world is a key initial focus of investments that Yahoo plans to make in 2009.
To that end, she highlighted management restructuring already begun since she joined Yahoo in mid-January including naming Ari Balogh as chief technology officer, overseeing all product development, and bringing on a chief marketing officer.
She also announced that Jeff Russakow will join the company from Symantec April 24 in the newly created role of senior vice president of customer advocacy, overseeing all customer support services.
As far as the layoffs, the company plans to make the staff cuts in the next two weeks. Bartz characterized the latest reductions as streamlining existing operations rather than the across-the-board, cost-driven cutbacks in December. In short, only about half as many people will be cut this time. The blog D: All Things Digital reported last week that 500 or more layoffs would be announced.
Yahoo cited the hit to revenue especially in its key display ad business, falling 13% to $371 million in the quarter. (Search was actually higher at $399 million.) "We have seen pressure on guaranteed (premium) advertising prices," said Jorgensen, whom Yahoo is still searching to replace after he announced his resignation earlier this year.
Both he and Bartz said they expect brand advertising to rebound when the company does. One of Yahoo's long-term initiatives for boosting display advertising is its APT platform for streamlining the process of buying and selling image-based ads.
Asked about the status of the project, Bartz said development will be ongoing with periodic releases. "It's a big honking important platform for us," she said. "It replaces both the internal ad-serving platform and Right Media outside ad platform. "It was a bigger task than the company understood, frankly."
Yahoo was trading up almost 4% in after-hours trading to almost $15 a share, after closing at $14.38 Tuesday.
2. Wikipedia Founder: How To Save The Newspaper Industry
by Laurie Sullivan
Editor's Note: This article has been updated
SAN FRANCISCO -- Jimmy Wales, Wikipedia founder, had a few words to offer ailing newspaper and media companies looking to cut costs and compete better online. The online maverick pointed to the Wikipedia business model.
During the opening keynote remarks Tuesday at the ad:tech 2009 San Francisco, Wales told attendees that newspapers and traditional media companies cannot compete alone in online media.
"They should just give up," he said, but did suggest a few cost-cutting measures. This starts with examining the topic that reporters cover and deciding how to tap into other sources for information, similar to Wikipedia's model.
For instance, the very best political bloggers are easily equals to the best New York Times columnists, Wales said. They do it for free because they love it. "Fabulous opinion editorialists" don't need the infrastructure of a publishing company or newspaper to succeed.
Wikipedia, founded in 1996, has 25 employees, but it relies on thousands of people worldwide to support the community. Today, the site is the fourth-largest Internet company. There are 2.8 million articles published in English, and it offers content in 22 other languages that add content for free.
Wales said media companies need to tap this model, yet keep their competitive advantage, which is the ability to send reporters to locations such as Afghanistan and Iraq. "I think newspapers should try and invite the community in and take over sports journalism. Avid sport fans write tons of content and there are people who would pay money to have the job of a Sports Illustrated reporter.
News is widely syndicated -- and that's one reason why it's difficult to charge for the content, Wales said. Smaller newspapers pick up news from The Associated Press, for example, but that type of syndicated online model makes sense. "If you went into Google News and didn't see 600 copies of the same story, but just one, that one could make money -- and spreading it everywhere doesn't make sense," Wales said.
Many newspapers are transitioning from print to online and incorporate online video, but not many are taking advantage of user-generated content. The industry is in its infancy.
"When I look at consumer-generated video like YouTube, it feels a lot like text did in 1999," Wales said. "It's a lot of individuals posting things they made themselves. Some is great, some really awful. We haven't seen communities come together to produce bigger projects."
3. Canadians Embrace Online Video
by Gavin O'Malley
About 21 million Canadians viewed more than 3.1 billion videos online during the month of February, according to new data from comScore Video Metrix.
The average Canadian online video viewer spent 10 hours viewing videos in the month -- up 53% from their average viewing time last year.
"Canada's high broadband penetration and tech-savvy Internet users make it an optimal environment for online video to flourish," said Bryan Segal, vice president of sales, comScore Canada. "The combined forces of reach, high engagement and 'sight, sound and motion' make online video a particularly attractive brand-building vehicle for online advertisers."
Google sites led as the most popular video destination in February with more than 1.6 billion videos viewed -- 52% share of all videos -- and YouTube.com accounting for nearly 99% of videos viewed at the property.
Microsoft sites ranked as the second-most-popular video destination with 55.6 million videos viewed (1.8%), followed by Yahoo sites with 45.7 million videos (1.5%).
Up north, the average online video was 4.1 minutes in length -- up nearly 25% from the previous year's 3.3-minute average. In addition, more than 1.6 billion videos were viewed by 18 million viewers on YouTube.com in February, representing nearly 90 videos per viewer.
What's more, nearly 88% of the total Canadian Web population viewed online video in February -- the highest penetration of the five countries currently reported by comScore Video Metrix.
4. RIP: Adware Company Zango
by Wendy Davis
Zango has followed former rivals WhenU, Claria and Direct Revenue to the graveyard of failed adware companies.
Former Zango chief technology officer Ken Smith wrote on his blog that the company had taken on too much debt and also suffered from marketer and publisher defections.
Smith acknowledged in his post that Zango was plagued by improper installations of its pop-up serving software -- a problem that consumer advocates and the Federal Trade Commission had flagged. "Back in 2003-2005 we partnered with some people that we should never have partnered with," Smith wrote. "We almost completely outsourced our distribution to them, and we let them promote and install our software without adequate oversight or supervision."
He estimated that around 4% of the installs during those years were the result of drive-by installations done with no notice to users. Smith also said that in many other cases, users installed the software without sufficient information about it.
In 2006, Zango agreed to pay the FTC $3 million to settle a complaint alleging that the company turned a blind eye to the installation tactics of its affiliates.
As the FTC and various state attorneys general cracked down on adware, marketers and publishers began avoiding it. Smith wrote on his blog that almost none of the company's largest advertisers in 2005 were still using Zango by the end of 2006.
Last year, Zango laid off 68 employees, representing around 30% of its workforce. At the time, a company spokesperson said the layoffs were part of a strategic decision to focus on the new casual gaming offering Platrium.
Video search engine Blinkx has reportedly acquired some of Zango's assets.
Zango still has a lawsuit pending against spyware removal vendor Kaspersky Labs, which distributes software that purged Zango from users' computers. Zango alleged that Kaspersky Labs wrongly interfered with Zango's relationships with consumers. A U.S. District Court judge in Seattle ruled against Zango, but the company appealed and the 9th Circuit is currently considering the case. It isn't clear what effect Zango's shuttering will have on the lawsuit.
5. Widget Distributor Clearspring Unveils ConnectedAds
by Mark Walsh
Widget network Clearspring has launched a new service allowing marketers to learn more about social networking activity around branded applications via public interactions such as comments, news feeds, sharing and notifications.
Previously, Clearspring widgets tracked only direct usage metrics such as installs, click-throughs, time spent and the number of visitors. The new ConnectedAds program -- initially focused on MySpace and Facebook -- tracks a wider range of social activity tied to widgets to help marketers better gauge the effectiveness of social media campaigns.
Using ConnectedAds, for example, a movie studio promoting a new release can now measure whether a movie trailer widget that someone installed on their Facebook page appeared in other users' news feeds and how many friend comments it generated.
Furthermore, ConnectedAds tracks user interactions not just within MySpace and Facebook, but between those sites and the 80 other social networks across which Clearspring distributes widgets. A movie studio would thus also be able to see whether it was shared with followers on Twitter or added to a user's Delicious bookmarks.
"This will let advertisers know what the conversation with, and around, this advertising-based content is,'" said Clearspring CEO Hooman Radfar. "We're really trying to go toward automating word-of-mouth advertising across the emerging social landscape."
He noted that the Facebook redesign in particular -- placing greater emphasis on sharing content, increasing the frequency of status updates, and opening up the news feed to brands -- calls for upgraded analytics around apps. "It's really about getting into that feed and tracking metrics properly so advertisers have some assurance their efforts are working," he said.
Radfar said the ConnectedAds program would carry an additional charge beyond its standard widget development, distribution and tracking services, but declined to provide details.
McLean, Va.-based Clearspring says its widget network has 470 million unique users worldwide and reaches 43% of the global Web audience. It works with large publishers including NBC Universal, Time Warner and MTV networks and advertisers including Clearasil, Sprint and Honda.
Despite the economic downturn, Radfar said Clearspring's business has continued to grow quarterly. "We're hitting our (financial) numbers so we feel fairly comfortable," he said. The company made an undisclosed number of layoffs at the end of last year.
6. Red Bee Media Exec Becomes Dailymotion's CEO
by Gavin O'Malley
Paris-based video-sharing hub Dailymotion on Tuesday confirmed reports that its existing CEO Mark Zaleski is being replaced by Red Bee Media commercial director Ian Brotherston.
"Ian's primary focus will be to lead Dailymotion in its next phase of development," including the company's continued U.S. expansion, according to Benoist Grossmann, partner at AGF Private Equity.
In late 2007, Dailymotion raised $34 million from AGF Private Equity (a division of Allianz AG) and Advent Venture Partners LLP to finance its hasty U.S. invasion.
Last week, French newspaper Le Journal du Net reported that Dailymotion was seeking an additional investment to counter a depressed global online advertising market. However, Dailymotion representatives on Tuesday did not return press inquiries on the matter.
Dailymotion's Board of Directors said Tuesday that Zaleski had resigned from his position as CEO "to pursue other opportunities and spend more time on his other investments."
"Mark has driven the many phases of our development, including taking the lead in the industry in anti-piracy protection," said Philippe Collombel, partner at Partech International -- one of Dailymotion's original investors.
As commercial director at Red Bee Media, the privatized Broadcast Technology Division of the BBC, Brotherston was responsible for strategy, international expansion, new media, sales and marketing, and business growth.
Prior to that, Brotherston held senior international leadership roles within AT&T and British Telecom, where he managed businesses in Europe, Asia and the U.S.
7. StrongMail Puts Data In The Clouds
by Laurie Sullivan
StrongMail Systems is expected to unveil Wednesday the next version of its email campaign management offering, touting "cloud" computing features. Put simply, that means marketers can now own the hosted app or sign up for StrongMail Message Studio V 5.0 as an on-demand Software as a Service (SaaS), allowing budgets to remain flexible as clients sign on or drop off.
StrongMail Message Studio V 5.0 enables marketers to own the platform and take advantage of cloud computing. It enables companies to easily leverage customer data to improve results, while lowering resource requirements and costs. Marketers who sign on to have the system hosted typically rely on multitenant applications used by thousands of other customers because it's easy to install. The ability to own the hosted solutions allows companies to gain tighter integrations with other IT platforms and build on purchased assets.
The new version, available now, includes many new features that allow marketers to improve campaign performance and reduce costs by simplifying and streamlining traditionally resource-intensive activities, including advanced analysis, reporting and data integration, according to Ryan Deutsch, VP of strategic and market development at StrongMail Systems.
While cloud computing gives customers the benefit of ownership, the real challenge became educating marketers to determine if they wanted the service, Deutsch said. "When we talked to clients about the idea of going up into the cloud -- allowing customers to scale up and down as needed and only pay for what they use -- it sounded appealing," he said. "We provision slices or segments of the infrastructure. This lets the customer consume just the right amount of infrastructure to run the application."
The new version also includes a datamart within the platform to allow marketers to aggregate the data, and business intelligence (BI) tools. One of the main challenges faced by marketers is gaining access to all the information required to produce and send relevant email messages. The datamart provides companies that don't have the resources and tools to aggregate and manage the data.
The BI tools give marketers the ability to analyze the data. Rather than look at the information at the campaign level, marketers can review the information based on customer segments such as geography and conversion rates.
Deutsch has seen marketers bring in third-party data to track attributes they had not in the past.
8. Digitalsmiths Appoints Move Networks Exec To SVP
by Gavin O'Malley
White-label video technology company Digitalsmiths has appointed Move Networks senior executive Robert Bryson as SVP of sales and business development.
Bryson will be responsible for corporate development, strategic partnerships, developing customer relationships, and -- as he put it -- "accelerating the digital media audience reach of our customers."
Before joining Digitalsmiths, Bryson served as senior vice president of sales and business development at Move Networks, where he led all sales and business development as well as the commercial deals and strategic relationships with the likes of Disney Media Networks, Disney ABC Television Group, ESPN Media Networks, Fox Interactive Media and MySpace.
The company also appointed Melissa Sargeant as vice president of marketing. She will lead the marketing and media efforts for Digitalsmiths. She previously served as a director of product marketing for software management company CA, Inc. (formerly Computer Associates).
Based in Raleigh-Durham, N.C., Digitalsmiths provides publishers with video indexing and ad-targeting technology bundled with a white-label video service. "Digitalsmiths has built the right technologies to power its digital video integrated services platform," according to Bryson.
The company faces stiff competition from a long list of video platform and indexing providers, including Brightcove, blinkx, thePlatform, Ooyala and Fliqz.
Brightcove, in particular, appears to be dominating the industry--having recently signed a number of top publishers, including Time Warner's AOL, The New York Times Co.'s NYTimes.com, and 16 Condé Nast Web properties. Overall, Brightcove is now the online video platform of choice for 93 magazines across 21 publishing families.
However, Time Warner's hugely popular and video-heavy celebrity gossip site TMZ recently dropped Brightcove for Digitalsmiths. The startup also previously reached a deal to power Time Warner's TheWB.com.
Late last year, the company closed a second round of financing worth $12 million. The round was led by .406 Ventures, and included existing investors The Aurora Funds and Chrysalis Ventures -- the two of which helped the startup raise $6 million last year.
9. Pizza Hut 'Twintern' to Guide Twitter Presence
by Karlene Lukovitz
Marketers struggling with the social media zeitgeist might be intrigued by a new idea from Pizza Hut. The QSR has announced that it's searching to fill a newly created intern position specifically dedicated to being the company's "voice" on Twitter and helping to guide its presence on other social media.
The paid "twintern" job description from Pizza Hut states that the successful candidate will keep its Twitter followers posted on "great deals and menu items from Pizza Hut," as well as "keep a keen eye on pop culture news, off-the-wall stories or anything else quirky and fun that ... would be of interest to loyal Pizza Hut fans." The twintern will also monitor Twitter and alert the company to any negative buzz.
In addition, the twintern will bring perspective to other social media such as Facebook (Pizza Hut has nearly a million fans on its page, which includes an ordering widget), and other digital initiatives such as total mobile access and e-gift cards.
Aside from being Twitter-literate, applicants must be enrolled in college and willing to work in the chain's Dallas headquarters for the summer. The chosen one will also demonstrate creativity in the application. (Applications are being accepted on pizzahut.com.)
"Forward-thinking brands are now on Twitter, whether it's a CEO tweeting on behalf of a company or a world-class athlete," summed up Pizza Hut chief people officer Amanda Fleming. "We are committed to making Pizza Hut a truly digital brand, where customers can connect with real team members from the company and participate in real, honest conversation. Twitter is another way for us to make that connection. It's important for us to be where our customers are, and right now that's social media platforms, such as Twitter."
"The social media interns of today will be the CMOs of tomorrow, as social media becomes a fulcrum for communications strategies," predicts Reggie Bradford, CEO of social media services provider Vitrue, adding that if he were "20 again," he'd take the job even without pay.
"Marketers are starting to realize that social media provides the opportunity to make the one-to-one connections that build trust and engagement," as well as "get ahead of the conversation" with a strategy that encourages key customer and employee advocates to "fight back" when virtual communications about a brand start to go sour, Bradford says.
The need for strategy, he adds, is one lesson to be learned from the recent fallout experienced by Domino's after the stomach-churning video posted by two employees on YouTube. And while social media can clearly create negative brand impacts, they are also "the way to rebuild customer trust and brand image," Bradford says.
Commentary
10. So, That's What Twitter Is For
by Kathryn Koegel
It was a pleasant surprise recently to find Moldova, one of the saddest of all the former Soviet Republics, making the front page of the old media New York Times.
And of all things, it was a Web 2.0 article. Turns out there was a rigged election to bring back a Communist regime and the youth won't have it. They are gathering in the main square and Twittering their discontent. It's probably been 10 years since any wire service bothered to show up in this minute backwater and yet Moldova is everywhere. The government shut down cell service, Internet access is hardly universal there, but information technology wins.
I have a very personal connection to events like this and to the place in general. I was a "worst case scenario" media development worker in places like Bosnia, Belarus, and most extensively Romania. I actually taught media how to survive through, shockingly: advertising. For the many who do not remember the geographic spoils of WWII, Moldova was fashioned out of a chunk of Romania and Stalin forcible moved in a lot of ethnic Russians to help sever connections. Moldova lately seems to only make the media in stories about prostitution in Western Europe -- the place is known for supplying the bulk of purchasable women in hot spots like Prague and Istanbul (don't believe me, Google "Moldova" and two of the top options are "women" and "girls"). None of these media programs bothered with Moldova: it was just too poor and too hopeless -- worse even than Belarus which has a Russian puppet dictator.
Moldova may be impoverished, but it does have young people who have experienced the freedoms of the west and the empowerment of modern technology -- they were probably your waiter in London or the bellhop in your Paris Hotel and like many of us are a bit underemployed these days. Underemployment leads to lots of social networking...and suddenly you have mass movements about things other than computer games.
I've been a constant head-scratcher about Twitter. It's too jittery, gossipy and overall TMI. It's as annoying as the Facebookers who tell me what they're eating for dinner, and I think the authenticity is quickly being taken over by PR spew. Yet, in this case I get it: it's instant information that news sites and even blogs cannot match. Of course there is no telling how reliable any of this is, but the sincerity and the immediacy of the posts from the main "piata" (pronounced just like "piazza") come through http://pman.cloudapp.net/. There is a lively debate going on about what should and should not be done, updates on government crack downs of media -- they've been denying the entrance of foreign journalists to the country and Facebook is now blocked there. Protesters are also claiming they have peaceably invaded the old media outlet: the state television network.
I usually confine my writing online to topics involving advertising, and yes, there is a connection here. Think of this development in light of the massive breast beating going on over the death of the American newspaper and what that will mean to freedom of information. I'll bet that Moldova doesn't have much of a newspaper --people are too poor to buy them and there isn't much of an economy to support them with advertising. So how are people getting information? Surely not through state television, but through Internet access and micro-blogging.
In this instance, I do hope that Twitter gets that Google buyout or some kind of business model. Advertising can and should support freedom of information and freedom from censorship. In the west we have lost all connection between advertising and democracy. Let's hope we find that connection in time to keep platforms that encourage debate alive.
The revolution will not be televised...it will be Twittered. Anyone want to sponsor that?
News Briefs
11. Mobile Sites 30% Slower Than Wired Web Browsing
Not exactly a big surprise, but browsing on the mobile Web was found to be 30% slower than on the desktop Internet, according to a study by Web measurement firm Gomez and mobile Web domain registry dotMobi.
The study looked at mobile Web services provided across businesses in the airline, banking and search industries, according to five key elements: readiness, discoverability, speed, success and consistency.
Yahoo topped a group of nine search providers in all five categories, with Amazon, Ask and Google tied for second place, and MSN coming in last. Among the six banking sites rated, Bank of America was first, followed by Chase. In the airline category, AirTran, Continental and Southwest all tied for first.
In a separate, recent study, dotMobi said there were currently more than 1.1 million mobile sites, with that figure continuing to grow rapidly.--Mark Walsh
12. ValueClick Rolls Out Mother's Day Package
ValueClick Media on Tuesday announced the details of its Mother's Day sponsorship package, designed to connect advertisers with consumers shopping for mom during the days leading up to the holiday on May 10.
The sponsorship provides access to audiences on sites, including DivaVillage, Become.com and RecipeTips.
A "Remembering Mom" custom channel is comprised of relevant, premium sites across the ValueClick Media network, including American Greetings, Woman's Day, Regards.com, Celebrities.com, CraftBits, Fathermag.com and PhotoReflect.
"The Mother's Day sponsorship leverages our extensive access to quality content," said Bill Todd, general manager of ValueClick Media.--Gavin O'Malley
13. Motorola Exec Named Wahlstrom President
Geoff Kehoe has been named president of The Interpublic Group's Wahlstrom, the Mediabrands specialty unit dedicated to bringing local interactive marketing to mobile, search, social networking and directory marketing (print yellow pages & IYP). Kehoe will manage Wahlstrom's growing operations and will oversee its national network of seven offices.
Kehoe joins the company from Motorola Inc. where he served as head of global e-commerce marketing and led U.S. brand communications for the launch of the RAZR phone model.
His professional history spans several decades, during which he has managed distribution channels and marketing partnerships for Amazon, American Express, Avis and Kodak. Kehoe also built direct & database marketing and carrier co-op marketing programs with Verizon Wireless, T-Mobile, and AT&T. Kehoe began his career at J. Walter Thompson, handling clients Sears and Hyatt. Additionally, Kehoe acted as SVP, group account director at Draft, where he managed the Sprint PCS account.--Tanya Irwin
14. Agency Founder Rejoins Denuo
Tim Harris -- one of the founders of Denuo -- has recently re-joined the agency as senior vice president. His role will focus primarily on the development and promotion of new products and services for Denuo, as well as helping clients better understand and interpret the changing marketing landscape brought about by new technologies and behaviors.
He returns to the agency after spending two years in the videogame development space. During that time, he successfully launched Seven Lights, a company that specializes in the production of customizable online entertainment. While there, he concepted and developed the company's first game, The Continuum.
Harris was founder of Denuo's premier gaming division Play, the industry's first and most recognized agency unit dedicated to leveraging videogames as a consumer contact medium. He also co-founded Starcom IP -- a once standalone digital unit inside Starcom MediaVest Group.--Tanya Irwin
Wednesday, Apr 22, 2009
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