We Have Met the Evil and It Is Not Google or Apple: It Is Us

Posted on January 26, 2012 by robhof

Cross-posted on my Forbes blog, The New Persuaders.

So much talk about evil these days. Google is evil for promoting results from its Google+ social network on search results pages, and even for changing its privacy policy to make clear its services share data. Apple is evil for not coming down hard enough on harsh working conditions at its Chinese suppliers’ factories.

Well, maybe. But if they’re going to be honest, the many pundits piling on to today’s titans of tech need to look up from the screen and into the mirror. Google’s and even Apple’s businesses, warts and all, don’t exist without our explicit participation. As Pogo famously said, albeit in a different context: “We have met the enemy and he is us.”

Now, I’m still not so sure Google’s actions on either score rise to the level of evil by any reasonable meaning of the term. (In fact, the furor over Search plus Your World  makes me think of Pogo creator Walt Kelly’s second most famous line: ”Don’t take life so serious, son. It ain’t nohow permanent.”) But it sure looks like Google’s at least edging closer to the evil line than its hifalutin ideals ever seemed to suggest.

For its part, Apple has taken considerable effort improve the factories that produce the gleaming iPhones and iPads we love. But if today’s New York Times story is correct, it’s clearly culpable in its seeming ambivalence about coming down hard on its suppliers exploiting workers.

Fact is, though, these companies get away with things we don’t like only because we let them. As powerful as Apple and Google seem, they both answer to customers and users. That would be us. And unlike politicians, they must answer to us every day–if we insist they do.

But we can’t do that just by bitching about them on blogs. You want Google to back off on personalized search and data-sharing? Opt for the plain results (click the Hide Personal Search button up there on the right), sign out of your Google account, or even delete it entirely. Or try Bing, or DuckDuckGo. Easier than blogging about it! And if enough of you do it, rest assured that Google’s data crunchers will notice, and if they’re as smart as they like to think, they’ll figure out how to change things.

You want Apple to fix its factory conditions? Don’t buy that next iPhone or iPad, and tell Apple why. If enough of you just say no, Apple will notice, and maybe start to use some of those unbelievable profits to change things.

Everything else is just talk. And there’s been quite enough of that already.

Filed under: search, Google, Silicon Valley, Apple, iPhone, Steve Jobs | Tagged: , , , , , , | 1 Comment »

What’s Coming in Internet Advertising: 12 Predictions for 2012

Posted on January 10, 2012 by robhof

I did my annual predictions first on my Forbes blog, The New Persuaders, since they’re focused largely on the Internet media and advertising I cover there. On that blog, they’re done as separate posts, but I wanted to gather them up in one place here, as I’ve done in previous years. So here’s what I think will happen (or in some cases, not happen) this year in my corner of the technology and startup world:

Facebook goes public, but won’t start an IPO landslide: Facebook will make the signature stock offering of the decade, one that reportedly will value the social network at up to $100 billion. But it won’t launch a thousand IPOs as a gazillion venture capitalists and angel investors hope.

Of course, the first part of that prediction is a gimme. But I can’t go without mentioning it because the Facebook IPO will be one of the biggest stories of 2012. Assuming Goldman Sachs or Morgan Stanley don’t stumble in pricing and selling the offering, Facebook’s IPO will be every bit as important as Google’s in 2004. It will be a sign that Facebook is a real, sustainable company (if there was any doubt left by now), but also a sign that social networking is getting woven into the fabric of our entire online experience.

The second part of the prediction depends less on how the Facebook IPO goes than on how (or whether) the economy recovers. If the recover remains slow to nonexistent and the stock market reflects that, IPOs will be sparse. If we get the slow but growing economic improvement we seem to be seeing now, more companies will go public but not a gusher. But the point is that Facebook is such a singular success that it’s not going to set the tone for lesser (often far lesser) Internet companies.

Facebook’s ad business booms–but not at Google’s expense: Facebook’s social advertising looks promising, but won’t come close to challenging Google’s huge success in search ads this year–maybe ever.

Obviously, Facebook is having no problem raking in the bucks from advertisers eager to reach its 800 million-plus audience–or more specifically, the millions of people in whatever target markets they choose. EMarketer reckons the company will gross nearly $6 billion in ad revenues this year, up from $4 billion in 2011. And that’s before we know anything about Facebook’s likely plans for mobile ads or an ad network a la Google’s AdSense that would spread its ads around the Web.

From reading a lot of articles, you’d think Facebook is stealing all that money directly from Google. That’s not mainly the case, given Google’s own considerable growth in display advertising, though Facebook’s success may well blunt that growth in the future. Instead, Facebook currently is eating Yahoo’s and AOL’s lunches, and those of many ad networks that, until Facebook ramped up its ad business, were the main alternative for advertisers looking to target sizable audiences.

What would make Facebook a huge Google-scale company is the theft of an entirely different meal: television advertising. After all, Facebook shows much more promise as a brand advertising medium than a direct-marketing medium like Google. It needs only to draw a small fraction of the $60 billion or so spent on television advertising, the biggest brand medium, to be enormously successful. But even then, it’s not mainly a Facebook vs. Google contest.

Facebook still needs to answer a big question, however. That’s whether its “social ads,” which incorporate people’s friends in ads in a 21st century version of word-of-mouth marketing, will have nearly the effectiveness in driving attention and ultimately sales as search ads, which appear in direct response to related queries, often involving products people are looking to buy. The potential is intriguing, and there are some nice examples of how well social advertising can work.

But despite Facebook’s considerable work in providing new kinds of metrics on marketing and advertising impact on its users, marketers and agencies aren’t yet universally convinced they need to spend a lot of money on Facebook ads. After all, they can get a lot of mileage out of their free Facebook Pages and Like buttons around the Web. (Not to mention, it remains to be seen whether these ultra-personal ads will cross what blogger Robert Scoble calls the Facebook freaky line.)

Bottom line: If Facebook is to be the Google of the this decade, its advertising has to at least approach the engagement of search ads, especially as Google itself moves to become more of a brand advertising platform with YouTube and continues its push into display ads. While Facebook is building what seems likely to become a great business on anew vision of advertising that could change many decades of tradition,2012 won’t be the year it closes that deal.

Image ads finally find a home on the Web: In 2012, marketers will start to find ways to do on the Web the kind of image and brand advertising that works so well on television. Not in the same way, at all, but brand advertising nonetheless.

Read more »

Filed under: search, Google, advertising, Yahoo, Twitter, Facebook, venture capital, startups, wireless, Apple, iPhone, social, Microsoft, display, Android, TV, mobile, social games, angel investing, Google TV, video | Tagged: , , , , , , , , , , , , , , , , , , , , , , , , , | 1 Comment »

How Did I Do on My 2011 Predictions?

Posted on December 28, 2011 by robhof

It’s that time of year for the annual Prognosticators’ Ball, when most of dine on humble pie. I will be opining on what’s coming in 2012 for the parts of tech I follow, but first a report card on how I did a year ago. Here’s what I predicted, followed by my completely unbiased assessment of each:

* There will be at least one monster initial public offering in tech. Take your pick (in more or less descending order of likelihood): Skype, Groupon, Zynga, Demand Media, LinkedIn, Twitter, Facebook (only if it has to). But despite many stories that will call this event a bellwether,  the IPO won’t bring back anything like the bubble days of the late 1990s (and thank goodness for that) because there are still only a few marquee names that can net multibillion-dollar valuations.

Bingo! Four of those companies went public (and one, Skype, got bought by Microsoft), but it remains clear that the IPO window opened only a crack so far.

* App fever will cool. Good apps that encapsulate a useful task or bit of entertainment–Angry Birds, AroundMe, Google Voice–will continue to do well. But those apps that do little more than apply a pretty layer atop Web content won’t get much traction–and moneymaking opportunities are uncertain in any case. The bigger issue: Once HTML5 becomes the widespread standard for creating Web services, enabling much more interactive Web services right from the browser, I wonder whether the need for separate apps will gradually fade.

Wrong! I still wonder, even more this year, about the appeal of apps, which increasingly look like a return to the bad old days of constant upgrades. But the day of reckoning, if it ever comes, certainly didn’t happen in 2011.

* Google will get closer to offering a social networking service–or at least incorporating social features into other services–but they won’t slow down Facebook. Lots of people think Google will bellyflop again, after failures with Orkut,Buzz, and Wave, but I don’t buy the argument that the company’s algorithmic DNA can’t produce useful social services. (After all, the PageRank algorithm underlying its search is inherently social.) At the same time, Facebook long since left the launchpad, and the best Google can do is to divine the next step beyond overt social sharing.

Bingo! Despite constant criticisms that it isn’t really taking off beyond the digerati, as well as nits about how it’s handling various features, Google+ is a very promising social beachhead for Google.

* It may be the fastest-growing company ever, but Groupon’s growth will slow. Of course it will! Otherwise it would be larger than Google by, like, July. The bigger question is whether eager investors will understand that as fast as the company is growing, and no matter how well it’s pursuing a local-business opportunity that many have failed to corral, it’s no Google or Facebook when it comes to net profit margins. Or at least I can’t imagine how it can be, if Groupon has to hire thousands of sales people and copywriters. But give it credit for cracking open at least a piece of the local-business market–and unleashing a flurry of competition, from a gazillion daily-deal startups to Google.

Bingo! In fact, Groupon faced a number of challenges, not just growth, and its stock price remains below its first-day closing price thanks to concerns about rising competition, business model, and management’s ability to shepherd a public company.

* Cable television cord-cutting (or at least cord-shaving) will accelerate thanks to continuing high unemployment, the growing amount of content on Netflix and other alternative services, and the likelihood that Internet-TV devices will keep improving. (For all its mixed reviews, Google TV will start to get more interesting as prices drop and TV apps arrive.) But the falloff in pay TV subscriptions will continue to be muted by the power that top cable networks wield, especially in sports and recent hit shows. And let’s face it, more than 100 million people currently paying for cable and satellite services know what they want.

Half-right. TV ownership declined for the first time as some people realized they can cobble together alternatives to $100-plus cable subscriptions. But as I also said, most people still more or less like their cable service, so change will be slow.

* YouTube will finally become a business. Between content deals, a spate of new ad formats, and the realization that online video ads are really the most effective brand advertising, Google’s video site will start bringing in the revenues that its massive audience always promised. This will be a big boost for Google’s display ads that CEO Eric Schmidt has been promising would be the search giant’s next billion-dollar-plus business.

Still to be determined. With a $100 million investment in original content, a big redesign, and an accompanying push for advertising, this may already be a reality, but we don’t know yet. So I was probably a bit early on this one.

* A Verizon iPhone will push smartphones into the truly mass market, because thanks to Verizon’s network, the damn things will finally work as phones as well as computers. But Verizon’s gain won’t necessarily come at the expense of Android phones, which are getting better all the time, and maybe not even AT&T; there’s plenty of growth to be had from feature-phone users making the switch to smartphones.

Jury’s still out. Depending on whom you read, smartphone sales may or may not be outpacing feature phone sales. And certainly Verizon’s iPhone was a big hit. But I think it’s going to be a bit longer before smartphones truly reach the global masses.

* Facebook will make steady progress on more targeted ads, finally providing some clarity after years of promises on how it’s going to fulfill the expectations implicit in its breathtaking valuation. In the past six months, I’ve already been getting noticeably more relevant ads on Facebook. But like every other company employing such targeting, it will keep running into privacy worries that could slow the rollout. And I’m still skeptical that people’s “likes“–or their friends’ likes–will be as accurate an indication of what they might buy as what they type into a search box.

Bingo! While we won’t know Facebook’s ad revenues for sure until it files for its IPO this coming year, and it remains uncertain that its social ads will steal any thunder from Google’s search ads, the company’s doubling of revenues this year, to more than $4 billion, means it’s doing something right.

* Game mechanics will spread further into realms such as e-commerce and health care. But these incentives and rewards that get people to play otherwise boring games such as FarmVille won’t be the panacea for Internet startups that some investors hope.

Bingo! While Zynga’s IPO was something of a bust, gamification spread to many new realms.

* Location-based services such as Foursquare and Gowalla will struggle to reach the masses. To date, they simply haven’t offered people a compelling reason–beyond those game mechanics, and rather weak ones at that–to bother checking in wherever they go. Coupons and special offers related to your location or the particular place you’re visiting will be crucial to making this activity worthwhile, but it obviously takes awhile to build a critical mass, because I hardly see any so far, and none very interesting.

Bingo! No knock on Foursquare, whose user base keeps growing pretty well, but Gowalla got sold and I ask you, how many of your friends use check-in services regularly?

* Q&A services such as Quora and Facebook Questions will start to get traction beyond the digerati. Quora, in particular, has an amazingly high signal-to-noise ratio at least for now, providing a glimpse of how the Internet will provide ways to tap people’s brains, not just the information they’ve decided to put on a Website. At the same time, these services could produce a venue for very targeted advertising.

Wrong! Quora may be doing OK for all I know, but Facebook Questions went nowhere. At this point, it remains uncertain whether these services will be must-do’s for most people, let alone develop into real businesses. Then again, Siri on the iPhone could change the game.

All in all, not too bad. Now we’ll see how I do for 2012.

Filed under: advertising, Android, Apple, Facebook, gamification, Google, Groupon, iPhone, mobile, Netflix, search, social, startups, TV, Verizon, video, wireless, YouTube, Zynga | Leave a Comment »

Five Small Stories About Steve Jobs

Posted on October 5, 2011 by robhof

Lots of people who were closer to Apple cofounder Steve Jobs than I have written moving memorials to a man who, in an industry and a region where people love to say they want to change the world, actually did it. The Apple II, the Macintosh, the iPod, the iPhone, the iPad–and Pixar!–none of these would have happened, certainly not in the same culture-jolting way, were it not for Jobs’ imagination and determination.

Because I was busy enough watching Intel create the electronics revolution, chronicling Scott McNealy and Sun kicking Hewlett-Packard’s butt for awhile, and witnessing Jim Clark and Marc Andreessen birth the commercial Internet, I can’t share tales of watching the genesis of the particular revolutions Jobs sparked from a front-row seat. All I’ve got are a few small, even inconsequential tales of Steve Jobs from my brushes with him over the years. But I wanted to share them anyway in the hope that they add a little more color to the life of a man who brought so much to ours.

I met Jobs face-to-face for the first time just before he was to introduce, if I’m not mistaken, the NeXTcube computer in 1990. BusinessWeek writer Kathy Rebello and I visited Jobs to see the machine at NeXT’s offices in Redwood City, Calif. He was his usual charming self–and make no mistake, despite his well-deserved (and self-described) reputation as an asshole, he was very charming. And his enthusiasm was infectious even though I had doubts about whether he could widen NeXT’s wedge between Apple and Sun into a sustainable business.

I remember two things distinctly. One was his focus on the shape and design of the jet-black machine, which I recall him touching fondly. That love of good industrial design is something he clearly never lost.

The other thing I remember is that he nervously fingered the wedding ring on his finger. When I jokingly asked him if it perhaps it wasn’t fitting so well, he launched into a story about his grandfather, who was a machinist (if I remember correctly–though seeing that his adopted father Paul was a machinist, I wonder if I heard wrong). Anyway, he said his grandfather was operating a machine with his wedding ring on, and it got caught in the machinery, removing his finger along with it. So every time he felt the ring on his finger, it gave him a twinge.

Now, this was Jobs before his canonization as the savior of Apple, so perhaps it’s just an example of a CEO trying to make nice with reporters with a personal tale. Still, the story stuck with me precisely because it was such a human, uncorporate story to bother telling.

I also saw Jobs just a couple of times doing his famous product introductions. One was the introduction of the first NeXT machine at a huge gala event in San Francisco in October 1988, if I recall correctly, because BusinessWeek writer Katie Hafner needed help reporting on a NeXT story she was working on and I was the new guy getting sent to whatever needed doing. (She thought she was getting an exclusive, though Jobs apparently promised an “exclusive” to two other publications–vintage Steve Jobs.)

In demonstrating a built-in dictionary that could call up definitions with amazing speed, he said, “Hmm, what shall we look up? How about ‘mercurial’?” That was the most common descriptor of Jobs at the time, and his joke brought down the house. Like I said, he could be the most charming guy in the room when he wanted to conjur up his famous reality distortion field.

The next time I saw Jobs onstage was just three years ago in San Francisco at his introduction of the iPhone 3G at Apple’s Worldwide Developer Conference, helping out my BusinessWeek colleagues and Apple aces Peter Burrows and Arik Hesseldahl. I hadn’t seen Jobs in person in many years, onstage or anywhere else. Of course I knew about his health issues, but as I liveblogged the event, it still struck me how frail he seemed:

Maybe it has been far too long since I’ve seen Jobs speak in person. But he seems a little laid-back, even tired?

As it turned out, this appearance kicked off another round of speculation on his health. Even without the benefit of hindsight today, it felt to me that, at the least, Jobs’ ability to carry Apple entirely on his shoulders was fading.

Update: Oh, how could I forget that photo shoot? For a special issue on Silicon Valley in 1997, BusinessWeek had somehow gathered many of the leading lights of the Valley at that time. I later wondered how on Earth we made that happen, but there’s Jobs on the left, dressed characteristically with more style than the rest put together.

I don’t remember much about Jobs’ behavior during the shoot beyond his huddling with his friend and Oracle CEO Larry Ellison at one point. And maybe that was the point: While there was no doubt he had to be in that photo, he wasn’t yet Steve Jobs, the icon, he was the guy who had just returned to Apple after it bought NeXT and faced a huge uphill battle to save it. Still, he was Steve Jobs; I remember his letting the magazine know that he was annoyed about the photo because his white shirt stuck out from under his vest.

One last story: My wife and I used to frequent a small restaurant in downtown Palo Alto called Caffe Verona. One evening around 1999, more or less, we were getting coffee, and suddenly I noticed that ahead of me was Ellison. That was interesting enough, but then I saw him take his drink out to the small patio entrance–where sat Steve Jobs and his wife.

Being a reporter, and because I think neither recognized me in the dark, I took a seat outside a few feet away, hoping to overhear any juicy details about coming products, Silicon Valley gossip–whatever. Long after my wife went back inside to get warm, I kept nursing my cappuccino and pretending to read magazines. So what did I overhear?

A half-hour of talk about the details of macrobiotic diets.

It was a mildly funny story to tell for years afterward. After Jobs’ health issues, it became less funny. But I always thought it was significant for another reason anyway. Here was one (actually, two) of technology’s leading lights, and they somehow found time to pal around talking about everything but their businesses.

Ultimately, what I remember about Steve Jobs was not the showman, the icon, the visionary. I remember a real human being who just happened to change the world.

Filed under: Apple, innovation, iPhone, mobile, Silicon Valley, Steve Jobs | 3 Comments »

LIVE Inside Google Search Event: Search by Image and Voice, and Faster Too

Posted on June 14, 2011 by robhof

Google will shortly provide an “under the hood look at Google Search” for a group of reporters and bloggers in San Francisco. According to the invitation, Google Fellow Amit Singhal, who for a decade has headed the core search ranking team, and others will “share our vision and demo some of our newest technology and features.”

It’s uncertain what Google will talk about, but events like this often are a forum for introducing new features. The last time Google did a similar event, the company introduced Google Instant, which shows search results as you type–a very significant change in its iconic search engine. Given how much competition Google’s facing not only in search but from social services from Facebook to Quora, it seems likely the search giant will have some notable new features or services to talk about. I’ll be liveblogging the highlights (as will many others). You can also watch it here. And you can submit questions to insidesearch 2011@google.com.

UPDATE: Google announces three key new features:

1) Voice search on desktops and notebooks, not just mobile.

2) Search by image, not just words.

3) Instant Pages, which eliminates load times when clicking on pages in top search results.

Bottom line for us: Easier and faster search no matter where you are.

Bottom line for Google and its competitors: It has no intention of getting one-upped on mobile devices.

Read more »

Filed under: advertising, Android, Chrome OS, Facebook, Google, search, social | Tagged: , , , , , , , , , , | 1 Comment »

Reed Hastings at D9 Conference: Netflix Will Remain Complement, Not Competitor, to Cable

Posted on June 1, 2011 by robhof

Netflix has had an incredible run at transforming television, so I’m always interested in what CEO Reed Hastings has to say. This morning, AllThingsD‘s Kara Swisher is interviewing him at the D9 conference in Southern California. I’m not attending, but AllThingsD is doing a livestream of a few sessions, including Hastings. Here’s what he had to say:

Q: Is Netflix so successful that it’s driving up the cost of content beyond what even it can afford? Hastings: We’re in this virtuous cycle. We’re paying more for content, but we continue to grow with 35% gross margins. So it works as long as subscriber growth continues.

Q: Is it just handing over money to Hollywood that has improved its perception of Netflix? Hastings: Yes (in a word).

Q: What about the Starz deal (a key one for lots of movies and TV shows, which Netflix got cheap a couple years ago)? Hastings: We’ve grown a lot since then, so we’ll pay more for the content.

Q: $200 million as rumored? Hastings: Wouldn’t be shocking. (Though Starz wants a lot more than that.)

Q: Where do you go next to get fresher content? Hastings: We look at what we think our subscriber count will be at the end of the year, so what is our budget? Then we go out and do deals. Consumers want us to have all the new stuff. But the new stuff is very expensive. You can’t get it at $8 a month. We’re really much more of a complement for the new-release business.

Read more »

Filed under: advertising, Netflix, TV | Tagged: , , , , , | 1 Comment »

Five Visionaries on What’s Coming Next in Technology

Posted on May 25, 2011 by robhof

Every year for the past 13, the business and technology forum Churchill Club of Silicon Valley has held a very popular annual dinner where about five tech forecasters and finance people offer up their predictions on what’s coming next in technology in the next three years. On the panel tonight at the venerable Santa Clara Marriott are Curt Carlson, president and CEO of Menlo Park research lab SRI International; Aneesh Chopra, first chief technology officer of the United States; venture capitalist and speed talker Steve Jurvetson, managing director at Draper Fisher Jurvetson; Ajay Royan, managing director of Clarium Capital, Peter Thiel‘s company (Thiel was supposed to be here); and futurist Paul Saffo, managing director of foresight (an appropriate title) at Discern Analytics. Emcee is Tony Perkins of AlwaysOn. I’m liveblogging the highlights.

If I remember previous events, this one is a little different in that Carlson, not each individual panelist, is presenting the trends. Each of the panelists raises a paddle with green on one side, to show they agree that the predicted trend will happen, red on the other to show they don’t. Yeah, it’s kinda hokey, but it’s fun. The audience votes with handheld devices as well as little red and green cards.

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What’s Google’s Marissa Mayer Up To?

Posted on May 25, 2011 by robhof

We haven’t heard much from Marissa Mayer, one of Google’s highest-profile executives, since she left her longtime job as vice president of search products last October to become vice president of location and local services. Some saw that as a demotion, though it’s clear that Google is putting an especially heavy emphasis on local commerce and advertising. So, hoping she will reveal a bit more of what she has been and will be doing in the red-hot local e-commerce and ad markets, I’ll be watching Mayer’s fireside chat with Mike Arrington at the TechCrunch Disrupt conference in New York today. Here’s what she has to say:

Q: What’s Google like now with Larry Page as CEO? Mayer: Google’s always been focused on the user, and Larry even more so. The other thing that’s happened is we had projects that started small like Chrome and Android that are now large. There’s a lot of optimism. A lot of energy.

Q: Is it good for competition and the industry that there’s Facebook, Bing, and other significant competitors? Mayer: It causes everyone to work that much harder and get that much better.

Q: What are you doing now? Mayer: I’m VP of Maps and Local (guess her title has changed a bit?).

Q: Is Google scraping other sites’ content for its Place pages? Mayer: People expect results to be comprehensive. So we want to get people really good data when they search for local information. It’s really meant to be a directory. There’s not enough information there to make a decision… so you go to the reviews and other sites.

Q: Is Google going to show only its own reviews once it gets enough of them? Mayer: Today we aren’t getting a lot of [our own] long-form reviews. (So I guess not, for a while at least).

Q: What are Google brands that matter going forward? There’s so many, I’m confused. Mayer: We’re really trying to streamline that. Not as many separate brands like Hotpot, etc. There’s Maps and there’s Local. Maps is the geospatial location and it should be personalized. Places is the local side of it, the textual and descriptive side. Those are really the two big pillars in this space.

Q: How are things going on the mobile side? Mayer: Great. We just crossed the 200 million installs on Google Maps for Local. About 40% of our traffic for Maps is mobile. More on the weekends, could cross permanently in June.

Q: What’s your goal to be successful in the next year? Mayer: Get you places you want to go or didn’t know you want to go. Enhancing our data. On the very far reaches, I’m starting to look at contextual discovery: Can we figure out from your context just the right information you’re likely to want without searching for it. Like if you walk into a restaurant that your friend went to last week, maybe you could see what they ordered.

Q: What are you personally investing in besides Square and One Kings Lane? Mayer: Also Minted, Gene Security Network. I’ve been active as an angel for a little while. It’s fun. I love watching how companies go through the growth phase, and helping them get through that. I’m not on Angel List or anything like that.

And that’s it. Well, not much there, sorry to say. You’ll get more on what Mayer and Google are planning for the local market here.

Filed under: advertising, e-commerce, Google, local, mobile, search, social | Tagged: , , , , , , | Leave a Comment »

Online to Offline: How Mobile Payments Will Shake Up Real-World Commerce

Posted on May 25, 2011 by robhof

With Google queuing up the debut of its mobile payments system on Thursday and Square announcing plans to replace the cash register and the wallet in one fell swoop, there’s a lot of interest in the use of cell phones to pay for things in the physical world. This morning, we’re hearing a bit more about this hot area of investment at a panel at TechCrunch Disrupt in New York, which you can watch by livestream. Exploring the topic are Stephanie Tilenius of Google Commerce and Payments, Alex Rampell of “transactional advertising” platform TrialPay, and venture capitalist Lewis Gersh of Metamorphic Partners. TechCrunch editor Erick Schonfeld is moderating.

Q: How do mobile payments affect daily deals and other local commerce? Tilenius: We call it the age of mobile-local.Consumers will be able to walk around and get deals. You’ll see us embedding offers throughout our mobile experience. Gersh: We could retarget consumers [with advertising] who were in a retail store. It could be Groupon having local pickup for offers.

Q: How can you make local advertising work, beyond Groupon? Rampell: Local businesses would rather get a check than a click, and they’re willing to pay for that. Tilenius: Groupon is a great model, and congratulations to them for creating it. But Groupon has tapped into one element of it. Ultimately it’s going to be about customer management.

Q: What’s compelling about Near-Field Communication (which allows consumers to wave a cell phone at a product to get more information or to pay for it), which Google is backing? Tilenius: The ease of use is compelling. You could see a product in Gap and if it’s not in your size, you could use NFC to order one in your size and have it shipped to you tomorrow.

Q: How soon will mobile payments catch on? Tilenius: It’s going to happen quickly. There’s already a ton of activity in this space (though a lot of it is overseas). In Singapore, everybody uses NFC for payments.

Q: How would NFC help local or e-commerce? Gersh: If you go to a local coffee shop and say I can promise you 1,000 new customers if you install this device, they’ll probably do it.

Q: What do you think of Square’s latest announcement? Rampell: Square is really competing with cash. If you want to make a $500 purchase at a flea market, this works better than cash. They can manage the fraud problem. Tilenius: Square isn’t trying to compete with Visa and Mastercard. They’re servicing really small merchants and displacing cash. It would work well to pair deals with that.

Filed under: advertising, e-commerce, Google, iPhone, mobile, payments, wireless | Tagged: , , , , , , | Leave a Comment »

How Social and Mobile Will Disrupt Online Advertising

Posted on May 24, 2011 by robhof

It’s no secret that online display advertising is going through huge changes, thanks largely to the fact that banner ads have never worked very well. Everyone from Google to Facebook to Twitter to a gazillion ad technology startups is trying to figure out something that will work as remotely well as search ads. So I’m always interested to hear how smart folks think display ads will evolve. This morning a panel at the TechCrunch Disrupt conference in New York, which I’m watching by its livestream, will be exploring this. On the panel: former Yahoo/Right Media’s Mike Walrath, now with Moat, a “search engine for display ads”; Carolyn Everson, new head of advertising at Facebook; Eric Litman, CEO of mobile ad platform Medialets; and Gurbaksh Chahal of ad network RadiumOne. TechCrunch editor Erick Schonfeld is moderating.

Q: Is the online advertising we have now sufficient or broken? Walrath: It’s broken, the way we’re delivering it to marketers is fundamentally broken. Two things are bullshit: that usage of the Net will drive brand spending; and that if that doesn’t work, sight, sound, and motion (video, flashy stuff, etc.) will solve it. Neither will.

Everson: For 10 years, every digital company has been trying to say you should move more advertising online, and they haven’t figured out why it hasn’t. TV is still strong. You have to get the creative community comfortable with digital advertising. They do not feel comfortable enough with the medium to bring more advertising to the Net. Can’t just offer a billion little boxes.

Q: Don’t online ad budgets have to take from TV? Litman: To think that dollars are not flowing in, that’s an argument from 1998. There are dollars available to come from traditional media.

Walrath: We’re having the wrong conversation–the latest whiz-bang way to target an ad. Just incremental. Until we change the conversation, we’re going to be battling for table scraps from traditional media. Channeling Wenda Harris Millard (who famously said years ago at Yahoo that online ad companies needed to do more than sell the ad equivalent of pork bellies, meaning banners sold cheaply by the ton)… We need to show purchase intent and brand recall. Otherwise, the conversation is meaningless. (Amen!)

Chahal: Disagrees (not surprisingly). Display advertising works. People want to spend more money. You can make that multibillion-dollar display industry better. Everson: The top brands care about the social graph. 50 million “Likes” per day happen on Facebook, which drives Facebook’s latest ad offering, called “Sponsored Stories,” which turns Like and other actions into ads on Facebook.

Q: To what extent does mobile and location help brands? Litman: I don’t need an ad to tell me there’s a Starbucks near me. That’s not the model for local advertising. It’s really much more defining where people are within a store, walking down an aisle, and using a tool to compare products; the brand can pay slotting fees to get their products in those tools. We’ve seen a bunch of search dollars coming into mobile. Walrath: Most mobile ads I’ve ever seen have been a shitty experience. Can’t just show ads–they need to be intrinsic to the apps being used. Chahal: Mobile ads are still pretty new–$550 million last year.

Filed under: advertising, display, Facebook, Google, mobile, search, social, Yahoo | Tagged: , , , , , , , , , | 1 Comment »

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