This is No TOY STORY, Twitter’s Prospects on the Way UP with Pixar CFO Hire
<Somewhere in Twitter HQ>
“So, Ev, if I understand you correctly, there isn’t actually any revenue to count at the moment?”
“No, Ali, we hired you because we were hoping you’d bring your collection of Pixar dvds in for us to watch when the Fail Whale appears.”
If it’s not Ali Rowghani’s movie collection that Twitter wanted, it must be that the microblogging service has hired the Pixar executive because–gasp–Twitter’s primed to make some actual profits!
“Ali will be an important member of a growing team focused on creating value for our users and capturing the financial opportunities that result from it,” Twitter CEO Evan Williams said in a release. Rowghani had been at Pixar for nearly a decade. “His thoughtfulness on retaining a great culture to work and staying consistent with our principles will also be a significant contribution.”
To infinity and beyond! 
YouTube Nets $10Grand from Video Rentals
YouTube conducted its first test of a video rental service last month with five independent films from Sundance Film Festival. In the ten days of the test, the rentals received a total of 2684 views, according to the New York Times. At $3.99 a pop, YouTube brought in $10,709.16.
If YouTube could sustain both of those rates on rentals at large, they’re looking at more than $390,000 a year in revenue. That’s close to offsetting the largest loss estimate from last year and more than enough to turn a profit if more conservative loss estimates are correct.
The original blog post announcement doesn’t say how much of the revenue, if any, will be shared with the independent filmmakers. The additional exposure may be worth the money to the filmmakers, of course.
But to expand the program with large studios, YouTube will doubtlessly need to share revenue, cutting into their profits. YouTube first has been rumored to be discussing rentals with major studios (or free showings) for months. They already have a number of content deals in place with studios including Disney, MGM, and Lions Gate.
As always, we’ll end with the question: Do you think this is the way YouTube will make the big bucks?
Will Widespread iPhone Availability be a Festivus for the Rest of Us?
The folks at Apple just need to wake of in the morning to create news of all sorts that could shape the online world in many ways. First, there’s the talk about some profits in Q1 that would make any company happy (The company posted revenue of $15.68 billion and a net quarterly profit of $3.38 billion, or $3.67 per diluted share). There’s all the hubbub about the announcement of their new tablet device on Wednesday which is apparently the worst kept secret in quite some time.
Now comes the rumor that in the next 18 months the iPhone should be available on most major carriers thus breaking away from its AT&T exclusivity contract (read: stranglehold) that has been the bane of many iPhone users existence. If this is truly the case then there may be some considerable change on the Verizon, oops, I meant horizon.
This makes sense for Apple since the other rumors are that Android devices are a real threat to the iPhone dynasty. eWeek reports
Is Jan. 27 the day Apple introduces its anticipated tablet — and AT&T’s exclusive relationship with Apple’s iPhone comes to an end?
According to Hot Hardware, which cites an “inside source,” the latter is seeming likely — though news of which additional carrier or carriers will gain access to the iPhone is still unknown.
Verizon Wireless has been rumored for some time to be on line for an iPhone — a scenario that analyst have called a positive one for Apple — while others have said that Verizon may also be first in line for the Apple tablet.
The move would entail Apple releasing either a CDMA-based version of the iPhone, or a single, updated iPhone that could run on both networks.
No matter what the scenarios that are played out there are plenty of people who are right on the edge of moving to some Android device but have been holding off in hopes of the iPhone escaping the bondage of its AT&T deal. Everyone wants to see it happen except, of course, AT&T. Whether the network criticisms of AT&T are real or not there could be an exodus to other networks if the iPhone can be had someplace else.
For me this may delay my plans to move away from the BlackBerry to an Android device on Verizon. This kind of a result could be just as much of a reason for Apple to make this happen than anything else. If they could slow the adoption rate of the Android smartphones with just the prospect of the iPhone showing up on other networks then that in and of itself is a victory.
So if you are an iPhone user would you jump ship to get on another network if the iPhone were there? And for you folks like me who are not currently an iPhone user what are your plans for the next smartphone you purchase?
If this happens then this should be very interesting for everyone from users to marketers. Your take?
For Ads the More Targeted May Mean Less Profitable
Maybe you can have too much of a good thing. As the Internet allows advertisers to slice and dice large segments of desirable markets into thinner, more defined slices it also creates something that is much less desirable: smaller profits.
How is that you say? How is it possible to make less on my advertising spend when I am advertising directly to the group that most needs or wants my products? Well, it’s simple supply and demand. While you are targeting a much more defined market you are not going to be alone in that quest to advertiser to just the people that will buy. Remember those pesky competitors? They want those people too because their claim is that they are better than you. Now you are going to find a price war that drives up costs for advertising and makes customer acquisition costs rise which in turn hurt the bottom line. So maybe there is too much of a good thing after all.
Professor Alessandro Bonatti, working with Yale University economics professor Dirk Bergemann on this research, says “… newspapers have a very limited ability to target audiences… specialized magazines can do better… Google has a very good ability to target who’s browsing each page… (though) online advertising has the potential to drive out traditional advertising, it does not necessarily follow that online advertisers will make more money… ”
Bonatti continues, “…as technology keeps improving, more and more web sites can sell very narrow products to very specialized audiences… with lots of people targeting the same audience the profits to be made through specialized advertising become more and more spread out… instead of competing for one large pool… you will have price war in each targeted segment as the slice gets more and more narrow.”
Bonatti concludes that, “… the better the technology, the lower the profits for advertisers… “
Not the news that advertisers want to hear but it sure is music to the ears of the niche ad networks that attract these more narrowly defined groups. Advertising price war? We’re in! Woo-hoo!
Different verticals are responding more rapidly and it also is dependent on just how far CPM’s fell during this downturn / recession / economic morass. Real estate is seeing an increase in CPM’s jumping 17% from Q2 to Q3 of last year while foodies are driving that category up almost 91% in the same period.
Here is a chart from Adify Vertical Gauge for you to gloss over and wonder what it really means.
So be careful what you wish for advertisers. Sure it’s great to advertise as close to the buyer as you can but you’re not the only one with that strategy. Let’s hope you are the one with the deeper pockets at least.
Google Sues To Stop Online Scams Using Its Name
Google is fighting back against the get-rich-quick and work-from-home scams that use its name. The company says it’s suing to stop what it calls “a widespread Internet advertising scam” that often goes under names like “Google Cash,” “Google Money Kit,” “Google Profits,” and more.
Google has made available the text of its lawsuit (PDF) against a [...]
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Dayparting: Profitable Tactic Or Waste Of Time?
Hour of day bidding, or dayparting, has been the topic of much discussion of late. Advertisers want to leverage every possible trend to maximize their profits, and one way to do this is to take advantage of search engines providing advertisers with the flexibility to run their campaigns with bidding by hour of day. With [...]
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Twitter, IPO and Advertising
Biz Stone, Twitter co-founder of Twitter was holding court for reporters in the UK and started to talk about all the things that Twitter followers obsess over including the big one: revenue.
Stone said that an IPO is not OOTQ (out of the question) but it’s also not on the front burner. In fact, he said something that is the truth but comes off a little strange (possibly arrogant?) considering how most of the rest of the planet is struggling. Reuters reports
Twitter, the social internet firm that tracks trends through individuals’ updates of events around them, may eventually go to the stock market for funding if necessary, its co-founder Biz Stone said.
The three-year-old company was already making some revenue and would concentrate on that next year. “2010 is really going to be the revenue year. I don’t know if we’re going to be profitable, but we have plenty of time,” Stone said on Monday.
Wow, the sense of urgency is overwhelming. Stone also stated that there is no interest in selling the company.
So 2010 is the ‘Year of Revenue’ for Twitter. Profits schmofits. How is this revenue going to occur? Advertising apparently. But it won’t be your father’s internet advertising either. Biz tells us so much without actually saying anything.
Stone declined to give detail of how Twitter would introduce advertising next year on its site to its users, but hinted again it would be different from traditional forms of internet advertising, which include display ads and sponsored search.
“Everyone’s going to love it. It’s going to be amazing,” he said when asked about the dangers of its tens of millions of visitors taking exception to the move.
So we have some amazing advertising opportunities to look forward to. Any thoughts on what those might be? Let’s hear it.
Aol.
I wanted to put the new rendering of the once iconic brand of America Online (AOL) as the headline just to see how it looks. It looks….weird. Below are some of the pictures from All Things Digital of how this new look will happen for the Aol. once it is officially cast overboard by the Time Warner mother ship. OK, so thrown overboard is bit harsh. How about pushed out the door with a resounding “Don’t let the door hit ya in the a#$ on the way out”?
My thoughts on the logo? I don’t get it. Why do you now go lower case with a period? I suppose it’s to help you see the new AOL (sorry Aol. or do I have to wait for the cord to be cut? I’m confused.) Fortunately, Aol. Ceo.Tim Armstrong will clear it up for us.
“Our new identity is uniquely dynamic. Our business is focused on creating world-class experiences for consumers and AOL is centered on creative and talented people–employees, partners, and advertisers. We have a clear strategy that we are passionate about and we plan on standing behind the AOL brand as we take the company into the next decade.”
Yup, I got that from the new logo. The only thing that matters about AOL / Aol. is whether it is a viable business that has a spot in the Internet space once the new arrangement is official. No tricky logo or any other quote from anyone will tell the tale like revenue and profits. But hey, there are things like press releases for those quotes so let’s hear it.
“Historically brand identity has been monolithic and controlling, little more than stamping a company name on a product. AOL is a 21st century media company, with an ambitious vision for the future and new focus on creativity and expression, this required the new brand identity to be open and generous, to invite conversation and collaboration, and to feel credible, but also aspirational. We’re delighted to have worked so closely with the AOL leadership team to create something bold and exciting that sets AOL apart,” said Karl Heiselman, CEO of Wolff Olins.
I never realized that using capital and lowercase letters could do so much.
Baidu.com Profits Jump 42% Then Stocks Take a Dump
You read that correctly. Despite an increase in profits of 42%, which is a pretty strong showing by anyone’s standards, the stock price fell over 13% on the NASDAQ. How does this kind of thing happen you ask? It appears that Baidu.com is going to suffer from the same issue that has plagued Google for most of its existence which is that no matter how well the engine performs the naysayers will win the day. Remember some of the outrageous numbers that Google used to put up and the following outcry that it wasn’t enough?
Yahoo Finance explains why the stock tumbled despite otherwise chipper news.
The company cautioned that it expects a “temporary negative impact” on fourth-quarter revenue as it completes the transition to its new Phoenix Nest online advertising system and phases out an older system. That sent Baidu shares plunging 13 percent in after-hours trading on the U.S.-based Nasdaq market.
The markets are acting as if they never heard of this new-fangled advertising system and that they perceive it as a threat to the health of the leading Chinese search engine. That’s simply not the case since about 70% of the advertising currently run is already on the new platform.
Baidu’s CEO gives a pretty low-key presentation of this switchover that runs counter to the market’s harried reaction that sent the stock tumbling
“With 70 percent of customers already using Phoenix Nest, we believe this is the right time to complete the switch to the new system,” said chairman and CEO Robin Li in a statement. “We are confident that Phoenix Nest will deliver tremendous benefits to our users, customers and Baidu.”
Maybe people are just too tough on search engines because they think they are a license to print money but despite the admitted possible slowdown it seems to be an irrational non-exuberance regarding the company and its stock.
Of course this kind of short-term reaction to what is eventually a good move long-term for the search engine is evidence of the ‘everything happens right now’ world that we live in. What company hasn’t experienced some short-term pain that has resulted in long-term benefit? It’s normal in business.
Well, maybe it was normal when businesses were run on principles and common sense rather than the day traders and short-term thinkers of today. It’s no wonder that Google offers no guidance on its performance because it will be hung out to dry no matter how good or bad their numbers are. Can’t we start thinking about business again with some common sense rather than uncommon expectations?
MSFT Quarter: Revenues Down 14 Percent, But Beat Estimates
Microsoft announced quarterly revenues of $12.9 billion, a decline of just over 14 percent from the same period a year ago. Adjusted revenue, which accounts for $1.5 billion in deferred Windows 7 receipts put the quarter at $14.4 billion, just 4 percent down vs. a year ago. Profits were also down. Online services (where Bing [...]
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