Apr 3, 2009
Here’s a heck of a rumor that we’ve sourced from two separate people close to the negotiations: Google is in late stage negotiations to acquire Twitter. We don’t know the price but can assume its well, well north of the $250 million valuation that they saw in their recent funding.
Twitter turned down an offer to be bought by Facebook just a few months ago for half a billion dollars, although that was based partially on overvalued Facebook stock. Google would be paying in cash and/or publicly valued stock, which is equivalent to cash. So whatever the final acquisition value might be, it can’t be compared apples-to-apples with the Facebook deal.
Why would Google want Twitter? We’ve been arguing for some time that Twitter’s real value is in search. It holds the keys to the best real time database and search engine on the Internet, and Google doesn’t even have a horse in the game. In a post last month called It’s Time To Start Thinking Of Twitter As A Search Engine, I wrote:
More and more people are starting to use Twitter to talk about brands in real time as they interact with them. And those brands want to know all about it, whether to respond individually (The W Hotel pestered me until I told them to just leave me alone), or simply gather the information to see what they’re doing right and what they’re doing wrong.
And all of it is discoverable at search.twitter.com, the search engine that Twitter acquired last summer.
People searching for news. Brands searching for feedback. That’s valuable stuff.
Twitter knows it, too. They’re going to build their business model on it. Forget small time payments from users for pro accounts and other features, all they have to do is keep growing the base and gather more and more of those emotional grunts. In aggregate it’s extremely valuable. And as Google has shown, search is vastly monetizable - somewhere around 40% of all online advertising revenue goes to ads on search listings today.
If this is accurate, it’s a brilliant deal for Google - the value of Twitter is only going to go up over time. And it will be Twitter founders Evan Williams and Biz Stone’s second sale to Google - they sold Blogger to them just five years ago. But there’s one big question - where’s Microsoft in all this? Letting Twitter go to Google only hurts them, badly, in the long term search game. This is an asset they need to be competing for aggressively.
Of course, it’ll be sad to see Twitter become just another subsidiary of Google, if this happens. I would have liked to have seen the company spread its wings a little longer to see what it could do.
Updated: Yet another source says the acquisition discussions are still fairly early stage, and the two companies are also considering working together on a Google real time search engine. But discussions between the companies are confirmed.
Apr 2, 2009
- Sony's Meteron, which is across the street, is closed - another casualty in battles with Apple and Nintendo.
- The show is sponsored by two respected publishers, Techweb and O'Reilly books. Despite covering technology, have they fallen behind the times?
- New magazines cover the topics of web hosting and video marketing. I perused the glossies, noted some of the usual advertisers. I would have returned the magazines to save trees, but the slightly soiled, over-printed magazines would be tossed anyway. Pretty. Sad. Why destroy the earth?
- The conference used a bank of laptops connected to printers for badges. I was greeted with a 'friendly' request for a confirmation code. What code?
- I found the option to log in by id. I remembered, but typed the wrong password since the system demanded a certain type of password. But the error message simply said I was not enrolled. I resolved my own problem. Nevertheless, the system was not web 2.0 and fails every measure of user interface design. The organizers produce beautiful magazines and books, but fail to match their editorial advice when it comes to online execution.
- For an advanced show where everyone carries a cell phone, a system where the guest sends a/an #imhere SMS to @w2e - would have been cool and expected.
- The security topic had 12 people in a hall with some 800 seats.
- Everyone had an iPhone, Apple MacBook Air, netbook, RIM, or some other of the latest fashionable device. Oh! Don't forget the leather jackets. The wirelesss devices was the story.
- Twitter was the most popular topic, but as the speakers talked about twitter, I saw a range of uses from registering for twitter to tweeting the talk.
- Users snapped iPhone photos and uploaded to their web page. Some had their FrontPage app running.
- The most popular use was email or twitter checking, Google reader, taking notes in Word??, or monitoring web dashboards with complex panels. Perhaps the attendees were following the same talk over tweeter from other attendees!!
- In hindsight, the most common screen was the Wi-Fi panel as users struggled to get a connection. Maybe that's why so many were using Word or some notepad.
- The speakers droned on with buzzwords. Do they have 15,000 followers? Can they influence these followers to click their links? Techcrunch and Fred Wilson have admitted that they cannot convert followers to visitors. Have these speakers experienced a different result? Or is it just talk with no first-hand success?
- AT&T selling netbook - to diversify their depence on iPhone?
- Bundling Wi-Fi to go after t-Mobile. Will they allow VoIP using the netbook?
- Integrating their wireless and DSL services could put a dent on Comcast's growth into homes with integrated video, phone, and data services.
AT&T announced on April 1st a plan to sell a subsidized netbook in Atlanta for $50. As typically done in the wireless industry, the subsidized price requires a service agreement. In this case, agreeing to pay $60/month to AT&T will not only get the user a $50 netbook and 200MB a month of data on its mobile network, but also a DSL connection for the home and access to the company’s Wi-Fi hotspot locations. Since this was first announced during CTIA, all the focus has been on the wireless portion of the announcement, and the selling of a notebook in a traditional cellular phone manner. What has been totally overlooked is the combination of home and on the go broadband access as a single service. In-Stat feels the combining of home and on-the-go broadband is just as important a trend as the selling of subsidized netbooks.
With growth in new home broadband service subscribers slowing, providers will need to steal existing broadband users away from other providers if they want to continue to grow their customer base. Our research shows that current broadband users would be willing to switch from their current broadband provider to one that could combine a home and on-the-go service. Clearwire has been using this strategy since last September to win subscribers in its two WiMAX markets.
In a survey conducted in 2008 In-Stat found the following:
- Over 80% of respondents said they had some level of willingness to switch from their current broadband provider to one that combines both home and on-the-go service.
- Over 40% of respondents said they would be willing to pay their current home broadband provider an extra $10-15 a month for a home and on-the-go service.
- Network performance is important to users. Over 40% of both Wi-Fi hotspot and 3G laptop data users said they had been discouraged from using wireless broadband in the past due to poor or slow network performance.
In-Stat’s research, Waiting for WiMAX — US Consumers Want More From Wireless Broadband (IN0803969WBB), covers what US consumers like and dislike about current broadband options and their desire to have a single service that combines both home and on-the-go service. It includes:
- Criteria used to select wireless broadband service.
- Measure of respondents’ interest in 3G cellular, Wi-Fi, and WiMAX services.
- The results from two surveys, one a general US consumer survey and another of just 3G laptop data users.
Mar 31, 2009
Google last week said it would discontinue its AdSense video units feature at the end of April (via paidContent). The company has lately been trimming its product offerings, even in advertising — eliminating radio and newspaper ad programs as well. Here’s the explanation for the AdSense video units closure from the AdSense blog:
“[W]e’ve found that it hasn’t had the impact we had hoped for. As a result, we’ve decided to retire this feature at the end of April so we can focus our resources on other opportunities to help publishers earn from their sites.”
Google’s AdSense video units always seemed a bit awkward to us (see our private beta coverage, public beta coverage and followup). When I hear AdSense and video together, I think contextually targeted ads spread through the long tail of web video publishers — basically the video equivalent of AdSense for web sites. This was not that. AdSense video units enabled web site publishers to feature YouTube videos from producers on a set list, accompanied by overlay ads. Revenue would be split between Google, the web site owner and the video producer. So basically, you could get paid for people watching embedded videos on your web site.
Google now encourages web site publishers to just embed the videos directly. From comments on the AdSense blog post, it seems some people did use, like and earn money from the feature. But multiple commenters said that was only after considerable work to figure out the video ad units. Though it seems unlikely the units generated a ton of revenue, they’ll inevitably decrease some YouTube video producer earnings.
Magazines have 5.5 times more ad influence relative to the time spent with them, a multiple that is higher than for any other major media, according to an analysis of consumer time spent with media conducted by the Magazine Publishers of America (MPA), writes Media Buyer Planner.
The study is an attempt to make the measurement of advertising more meaningful by linking time spent with a medium directly with advertising outcomes. The study assigns a score - or Ad Value Per Minute - to valuate the time readers spend with the advertising in each of the major media.
“One of the things that is important in understanding how advertising works is to separate the consumer relationship with the medium from the consumer relationship with advertising in the medium,” said Ellen Oppenheim, CMO of the MPA. Very often, she said, people look at time spent as a leading indicator of advertising engagement, rather than time spent with the advertising itself.
To help marketers address this issue, the MPA linked time spent with media to ad impact by using third party sources. The resulting metric, dubbed the Time-Ad Impact Ratio, can “help marketers to evaluate time spent in a way that aligns with their desire for better results,” said the MPA.
Perhaps unsurprisingly, the MPA discovered that magazines index with more than twice the impact of TV, online or radio, and are considerably higher than printed newspapers.
The Time-Ad Impact Ratio shows the following rankings, which differ significantly from those that exist if time spent is examined in isolation (without regard to results):
- Magazines emerge as the leading medium with 5.5 times more ad influence relative to the time spent with magazines on an average day
- Newspapers rank second with 4.9 times more ad influence relative to time spent
- The internet has 2.5 times more ad influence relative to time spent
- TV has 2.3 times more ad influence relative to time spent
- Radio has 1.1 times more ad influence relative to time spent
Oppenheim acknowledges that the studies are based on consumer perceptions about media rather than behavior and are therefore a guideline and not a gold standard nor a potential currency.
Mar 30, 2009
by Erick Schonfeld on March 30, 2009
In an upbeat report this morning, the Interactive Advertising Bureau reported that internet advertising in the U.S. grew 10.6 percent to $23.4 billion. And the $6.1 billion fourth quarter (up 2.6 percent) was the first time Internet advertising surpassed the $6 billion mark. That said, the rate of growth declined both on an annual and quarterly basis. Even the 4.5 percent sequential growth over the third quarter was the lowest since 2002 (as was the annual growth rate).
Search advertising dominated, with 46 percent of total Internet advertising market share. It also grew more than 20 percent for the year. The only category which grew as fast was rich media and video. Online video advertising grew faster than any other sub-category, with 123 percent annual growth (going from $324 million in 2007 to $724 million in 2008). Display advertising was able to eke out 8 percent growth for the year, but declined 4 percent in the fourth quarter.
Performance-based advertising widened the gap over plain-vanilla impression-based advertising (CPM) last year, with 57 percent of all internet advertising revenues being performance-based versus 39 percent being CPM-based. That 18 percent gap widened from a 6 percent gap last year.
The IAB also trotted out some numbers showing that Internet advertising revenues are outpacing TV advertising by some measures. The $23.4 billion in annual internet advertising spending exceeded advertising on cable TV for the first time (which was $21.4 billion), and took the No. 3 spot behind national and local TV ads ($29.8 billion) and newspaper ads ($34.4 billion).
And in a new analysis comparing the first 14 years of Internet advertising revenues to the the first 14 years of cable and broadcast TV advertising, the IAB found that Internet advertising surpassed cable TV advertising in Year 4 ($907 million versus $499 million) and broadcast TV advertising in Year 10 ($9.6 billion versus $8.9 billion). Now, in Year 14, Internet advertising is almost twice as large as broadcast TV advertising was in its 14th year ($13.3 billion) and nearly four times as large as cable TV ($6.5 billion).
The Pew Research Center’s Project for Excellence in Journalism released a study today that claims bloggers and journalists have an “uneasy” optimism about the future of news media on the web. But, the study says, their optimism definitely trumps that of broadcast and print employees in traditional media industries.
According to the study, most journalists who work in the online news industry believe that the internet is having a negative impact on fundamental journalistic values, including a loosening of standards (45% of respondents felt this way), increased emphasis on speed (25%), and the addition of voices from outside the traditional media institutions (31%). While there’s no doubt that the internet is changing the way journalism is conducted and delivered, I’m hesitant to think that speed and increased diversity of viewpoints from outside the industry is detrimental to journalistic integrity.
Online journalists are cautiously optimistic that their publications have viable business models compared to traditional forms of media. Over 60 percent of respondents reported that their online news units were making a profit. But only four out of every ten online journalists are “very confident” that online news can find a profitable business model for journalism, and are worried about the money-making prospects of internet advertising. Roughly two-thirds of journalists surveyed predicted advertising would be the most important form of revenue for news websites in three years. That in itself might be an overly optimistic projection for online advertising revenues, which today only accounts for less than 10 percent of overall newspaper advertising dollars in the U.S., and actually showed a slight decline last year. Print advertising, however, is diving faster than anyone expected.
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