Reports are circulating regarding Apple’s plans to offer newspaper and magazine subscription services over the iPad platform giving many “old media” outlets (newspapers/nagazines that have been struggling in the recent past) a new channel to deliver their content.
http://ecommerce-journal.com/news/29750_apple%E2%80%99s-ipad-news-sub-servicell-send-papers-digital-delivery-platform
The brief article (a follow up to a story I first heard reported on WBZ radio but is now being picked up by other news outlets) reports that Apple’s planned cut could be as high as 30% and 40% of subscription fees and advertising revenue respectively, to allow the publishers of this “old media” a very desirable channel to Apple users.
It would appear that Apple is looking to the 90% of total global advertising spending that is currently not on-line (and thus not in Google’s sights yet), making a bet on which aspects of that ad spend will go on-line when, and making a play to influence how it will go on line in a way that is profitable for Apple, and possibly less profitable or not profitable at all for Google.
Google appears to be the dominant force in on-line advertising right now, and their financial statements and investor information shows that they are very good at providing a venue for on line, search based advertising.
While many analysts and pundits seem to agree that on line advertising will grow significantly, the question is often how. And will it grow in a search based way, adding more spending to Google’s primary market (and likely adding more revenue to Google’s financial statements?) or will that growth in on-line advertising materialize in a different way (perhaps delivered via apps /content desired by the user, or by another method)? Already some “free” services have ads interspersed such as Hulu and Pandora to which Google has no direct link.
So the question is, how will advertising grow on-line, and can Google react if ad spend switches to something other than a search centric model?
Sunday, September 19, 2010
Google and digital marketing
Everybody is talking about using Google to drive up the page visits and thus drive up the conversion rate for the sales. What is the place of my website on Google? Shall I buy the ad word? What are the keywords that my customers are searching?
So many start-ups or median search engine optimization companies
So many guesses around the algorithm of how Google rank the page
So much money fall into the pockets of the "social media marketing" company and Google
But
Is Google marketing really so effective?
Of course I can not google it: suspect google not place the article question the effective of google itself too early.
My feeling is that when everybody is trying to rank high in google, the direct high rank of the commercial website is not effective- ie. conversion rate. But the microsites are more effective to transfer no. of visits into the conversion rate. Since customers have already read about the product from a third party in a non sales driven way, the credibility is higher.
What do you think ?
25 Years From Now: Why Google Will Outlive Apple
Tim O'Reilly's article on the Internet Operating System talks about a future of horizontal integration vs. vertical integration. Google will ultimately outlive Apple because Google is pursuing an integration strategy which makes Google an integral part of that operating system. Apple's integration strategy makes it temporarily successful in spite of that system, but at the expense of the company's long-term relevance.
As we all know and as O'Reilly reminds us, Apple has successfully pursued a strategy of vertical integration. With iPhone/iPad/iTouch/iPod/iTunes, Apple owns the hardware, the software platform, and the content. But Apple has also cultivated a strong brand - good, clean design, user-friendly, young, hip, intelligent, forward-thinking. The strength and cohesiveness of the Apple brand in people's minds is what has enabled Apple to succeed with a vertical integration strategy. Indeed, the core of any vertical integration strategy in information technology is a strong brand. To the extent that brand assets as powerful as Apple have proven difficult to replicate, full vertical integration will remain elusive to most, if not all, other technology companies besides Apple. This leads to an odd conclusion: vertical integration can never be an industry-dominant strategy in the world of information technology. There just aren't enough truly strong brands among large-scale companies to make it a broad phenomenon.
You could even argue that an essential element of Apple's brand is the company's gadfly, oppositional status - Apple can never be the dominant owner of most of our technological lives because Apple will always need a significant competitor to stand in opposition to. If it weren't for Microsoft being so easy to beat up on, Apple's brand might not evoke the white-hot intensity of feeling it does today.
The conclusion: Apple's success, and the vertical integration strategy so tied to its brand, are unreplicable on an industry-wide scale. Apple has been successful to date, and may continue to enjoy success for a while. But it will not define the industry in the future.
So what about Google? Google has demonstrated true mastery of the art of hedging. This mastery has enabled the company to evolve from super-fast search engine to technology industry idea-fount funded by ad brokering. And this same artful hedging lies behind Google's pursuit of *both* horizontal and vertical integration strategies. Android and Chrome represent the vertical strategy. Android is a software platform for mobile apps, and the Chrome browser is a software platform for web applications. Both platforms show that Google understands that owning front-end layers in the platform can help companies gain strategic advantage through exclusive interaction with more back-end layers. I don't think that Google knows whether this will end up necessarily being a successful strategy long-term. They just know that can afford to make both of these money-losing investments in order to position themselves intelligently should the industry develop in the direct of vertical integration.
But will it?
Never forget who owns the data. As O'Reilly points out, Google has amassed more potentially valuable data than maybe any other company on earth. And in an environment where horizontal integration is dominant, the owner of so much data sits in the catbird seat. In a horizontal world, success isn't about owning all the layers, it's about offering enough value to others within the *same* layer so that you become indispensible. If Google, with its enormous data assets, won't be indispensible to other parties who crunch data and deliver meaningful services using that data, I don't know what company will be.
This is also another way of saying that Google's ownership of so much data and data-collecting capability (which, by the way, Android and Chrome provide in spades) makes the company a critical component of The Cloud (the giant middle layer in a horizontal integration model).
In a world where businesses function more and more as nodes in a network, making yourself a critical component of that network keeps you relevant. Google understands this and is committing resources today to position itself for that emerging world. Apple is merely coasting on the admittedly impressive success of its vertical integration strategy. But this strategy is a sideshow to the growing trend of horizontal interdependence within an ecosystem of services. This is the larger future for which Google is preparing.
Microsoft Azure vs. Amazon EC2
www.networkworld.com/news/2010/062510-microsoft-azure-amazon-ec2.html
Amazon currently offers infrastructure-as-a-service while Microsoft's Azure is a platform-as-a-service model. This article discusses the relative strengths and weaknesses of the different models. It also suggests that in the near future the two different companies will converge toward eachother.
Microsoft's COO, Kevin Turner briefly discussed and dismissed Amazon's infrastructure as a service model during the Microsoft Financial Analyst Meeting 2010. "It only provides a limited set of platform, as a service set of capabilities, in virtual machines that you manage with Amazon, that you maintain and update."
Amazon currently offers infrastructure-as-a-service while Microsoft's Azure is a platform-as-a-service model. This article discusses the relative strengths and weaknesses of the different models. It also suggests that in the near future the two different companies will converge toward eachother.
Microsoft's COO, Kevin Turner briefly discussed and dismissed Amazon's infrastructure as a service model during the Microsoft Financial Analyst Meeting 2010. "It only provides a limited set of platform, as a service set of capabilities, in virtual machines that you manage with Amazon, that you maintain and update."
Cisco to Turbo Boost South Korean City to "Smart" Future-City Status
Cisco to Turbo Boost South Korean City to "Smart" Future-City Status
BY KIT EATONTue Mar 30, 2010
Cisco has just signed up to what sounds like a bizarre and confusing thing: It'll be a partner in developing a whole "smart city" in Korea. Weird. But if you think about it, with networks connecting up everything, it may be a model for where you'll live in the future.
We're talking about Incheon, in South Korea. It's going to transform the Incheon Free Economic Zone (IFEZ) into a "high-tech, globally competitive and environmentally sustainable smart connected city" which sounds terrifically grand. Yet the ultimate goal, to "support continued innovation in Korea" is even loftier--while being perfectly believable, given the amount of high-tech innovation and manufacturing Korea already fosters.
But what of Cisco's role in all this? The clue is in the phrase "smart connected city" and the goal for IFEZ to be a "regional center for innovation, healthcare, education and society." This implies that many systems, businesses and social services in the city will be networked in some way, to improve efficiency as well as information sharing, which is perfectly aligned with Cisco's expertise. There's also talk of wonders like "video-enabled homes" and the green aspects of the tech, which should be made possible through more efficient energy usage, aided by smart meters and what not.
Cisco's also going to be funding venture-backed startups, which is one route for the tech giant to recoup some of the investment costs IFEZ will incur. But it's really in its plans to "develop globally replicable Smart+Connected Community business models and technologies" in a new research center in Songdo, Incheon, that we see Cisco's greater strategy revealed. Cities in Europe or the U.S. are unlikely to take the sort of technical and financial gamble that Incheon, and the Korean authorities, are prepared to make--and this turns a huge community into an experimental work-out for Cisco. When it's got its tech and strategies nicely optimized for the citizens of IFEZ, it'll be able to leverage its learning to sell similar "smart city" solutions to the States and Europe, when we eventually catch up to the Korean development pace. And while we probably shouldn't be expecting Jetsons-like tech advances to come out of this experiment, the kind of fully-integrated future digital-living solutions envisaged by Microsoft in its Vision of 2019 would certainly benefit from some smart city tech.
[Cisco]
http://www.fastcompany.com/1601528/cisco-smart-city-korea-incheon-future-living-networks-nes
BY KIT EATONTue Mar 30, 2010
Cisco has just signed up to what sounds like a bizarre and confusing thing: It'll be a partner in developing a whole "smart city" in Korea. Weird. But if you think about it, with networks connecting up everything, it may be a model for where you'll live in the future.
We're talking about Incheon, in South Korea. It's going to transform the Incheon Free Economic Zone (IFEZ) into a "high-tech, globally competitive and environmentally sustainable smart connected city" which sounds terrifically grand. Yet the ultimate goal, to "support continued innovation in Korea" is even loftier--while being perfectly believable, given the amount of high-tech innovation and manufacturing Korea already fosters.
But what of Cisco's role in all this? The clue is in the phrase "smart connected city" and the goal for IFEZ to be a "regional center for innovation, healthcare, education and society." This implies that many systems, businesses and social services in the city will be networked in some way, to improve efficiency as well as information sharing, which is perfectly aligned with Cisco's expertise. There's also talk of wonders like "video-enabled homes" and the green aspects of the tech, which should be made possible through more efficient energy usage, aided by smart meters and what not.
Cisco's also going to be funding venture-backed startups, which is one route for the tech giant to recoup some of the investment costs IFEZ will incur. But it's really in its plans to "develop globally replicable Smart+Connected Community business models and technologies" in a new research center in Songdo, Incheon, that we see Cisco's greater strategy revealed. Cities in Europe or the U.S. are unlikely to take the sort of technical and financial gamble that Incheon, and the Korean authorities, are prepared to make--and this turns a huge community into an experimental work-out for Cisco. When it's got its tech and strategies nicely optimized for the citizens of IFEZ, it'll be able to leverage its learning to sell similar "smart city" solutions to the States and Europe, when we eventually catch up to the Korean development pace. And while we probably shouldn't be expecting Jetsons-like tech advances to come out of this experiment, the kind of fully-integrated future digital-living solutions envisaged by Microsoft in its Vision of 2019 would certainly benefit from some smart city tech.
[Cisco]
http://www.fastcompany.com/1601528/cisco-smart-city-korea-incheon-future-living-networks-nes
Competing in the Courtroom
As a company using advanced technology that is vital to your business model, how vulnerable can you be if you do not have a defensible patent position?
Before today, I had never heard of Interval Research Corporation.
In 1992, Paul Allen, co-founder of Microsoft, bankrolled this tech incubation lab with 100 million dollars. The goal was to create a "research setting seeking to define the issues, map out the concepts, and create the technology that will be important in the future...[pursuing] basic innovations in a number of early stage technologies and [seeking] to foster industries around them -- sparking opportunity for entrepreneurs and highlighting a new approach to research."
Interval Research was shut down in April 2000, but not before it had secured 300 patents, 4 of which are now owned by Interval Licencing LLC, a vehicle that Paul Allen is now using to sue Apple, Google, Yahoo, Facebook, Netflix, YouTube and others.
One of these patented technologies allows a site to offer suggestions to consumers based on what they are currently viewing, another allows readers of an article to rapidly find related subject articles. The remaining two are related to what is happening peripherally to a user's main activity, such as flashing video images or updated stock quotes, news or ads.
If the patent infringement can be proved, the damages could be vast.
Incidentally, Amazon has been left out of the list of defendants, even though we know that one of Amazon's practices is to offer suggestions to consumers. I wonder if a strategic deal has been made, or if Amazon has a solid defensible position for its technology that does not infringe on Paul Allen's "patents".
So far, it seems that the defense that the sued internet companies are planning is based simply on the fact that Paul waited too long. It will be interesting to see if that will be enough to fend off the lawsuit.
If Paul Allen had sued a long time ago, it may have been harder to prove the monetary potential of the technology, which would affect the dollar value of settlements.
Here's a copy of the lawsuit filed:
http://online.wsj.com/public/resources/documents/intervallicensingcomplaint0827.pdf
According to the Wall Street Journal, NTP, Inc, another licence holding company which successfully sued RIM in 2006 for $612 million dollars, is now suing Apple, Google, HTC, Microsoft and Motorola over infringement of 8 patents related to the delivery of email over wireless networks.
I find it very interesting that an innovative company that struggles to develop technology and make it work in the marketplace can remain so vulnerable if their technology can be proven to infringe on a patent held by someone else, and I am curious as to how executives at the likes of Google and Apple would approach innovation, if they know that "patent trolls" - companies that hold patents but don't do further development work - are waiting in the wings to pounce on their hard earned profit in the form of damages.
The Splinternet
Last week, we read the article, "The Web is Dead," which claims that the World Wide Web as we know it is now being replaced by "apps." RSS feeds, Skype, Facebook, Twitter, and Pandora apps and other services on a smartphone allow you to use the internet without having to open a web browser. This phenomenon has given rise to a new term, the "splinternet," which describes how various devices (i.e. iPad, iPhone, Kindle, Xbox, Android) use different formats to display web content, making traditional html standards obsolete and the internet less unified. As a result, the "splinternet" has created a unique set of challenges and opportunities:
1. Increases lock-in
2. Creates the need to develop new web analytics tools
3. Changes the way online marketing is done
One way to think about the "splinternet" is how web pages displayed on an iPhone look different than on a desktop computer because of the different screen sizes. In addition, the iPhone does not support Adobe Flash, so that also changes the content between the two devices. We've discussed before how Adobe envisions a world where developers create one set of code which can be used across multiple platform devices. Apple, on the other hand, insists on creating proprietary, closed platforms for their devices. Adding more applications and services that can only be used on a certain device leads to lock-in. Apple has been a leader in this area, but Facebook is also trying to keep people tethered to their platform.
Another problem that occurs is that much of the content on Facebook and Twitter cannot be searched by using Google because of the log on requirements. Search engines and html standards were built based on open internet. Facebook closes that door, which in turn creates the need to develop new web analytics tools so that this type of information can be found. Google will most likely be able to find a way to do this, yet the issue of privacy will also surface.
All of this is important because the "splinternet" is radically changing traditional online marketing. Over the past 15 years, companies have developed ways of finding and learning about their target customers. Yet a more diversified internet makes it much more difficult to get a clear sense of how to reach the customers across various platforms. It will be interesting to see if there will be winner take all effect, or if the internet will become even more split up over time.
For more information on the "splinternet", check out these articles:
1. Increases lock-in
2. Creates the need to develop new web analytics tools
3. Changes the way online marketing is done
One way to think about the "splinternet" is how web pages displayed on an iPhone look different than on a desktop computer because of the different screen sizes. In addition, the iPhone does not support Adobe Flash, so that also changes the content between the two devices. We've discussed before how Adobe envisions a world where developers create one set of code which can be used across multiple platform devices. Apple, on the other hand, insists on creating proprietary, closed platforms for their devices. Adding more applications and services that can only be used on a certain device leads to lock-in. Apple has been a leader in this area, but Facebook is also trying to keep people tethered to their platform.
Another problem that occurs is that much of the content on Facebook and Twitter cannot be searched by using Google because of the log on requirements. Search engines and html standards were built based on open internet. Facebook closes that door, which in turn creates the need to develop new web analytics tools so that this type of information can be found. Google will most likely be able to find a way to do this, yet the issue of privacy will also surface.
All of this is important because the "splinternet" is radically changing traditional online marketing. Over the past 15 years, companies have developed ways of finding and learning about their target customers. Yet a more diversified internet makes it much more difficult to get a clear sense of how to reach the customers across various platforms. It will be interesting to see if there will be winner take all effect, or if the internet will become even more split up over time.
For more information on the "splinternet", check out these articles:
The Splinternet War: Apple vs. Google vs. Facebook
The Web Is Turning Into The 'Splinternet'
Apple, Amazon, Google Wage Content Wars
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