Apple’s Big Q3 Earnings Miss: It’s All My Fault

Image representing Apple as depicted in CrunchBase

Image via CrunchBase

From my Forbes.com blog The New Persuaders:

Apple just reported an extremely rare miss on its third-quarter earnings. The company came in below analysts’ expectations on profits, and Apple’s fourth-quarter outlook underwhelmed analysts as well, thanks in large part to “transition” issues this fall.

Translation: People are waiting for the iPhone 5 to come out and, as a result, they aren’t buying as many of the current models as expected.

The stock has fallen more than 5% after-hours. I feel really bad. Because I’m one of those waiters. …

Read the complete post at The New Persuaders.

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Still Following Apple Playbook, Google Debuts Cute Ads For Nexus 7 Tablet

Adapted from my Forbes.com blog The New Persuaders:

Next to its elegant products, Apple is best known for its iconic advertising–all the way from its famous (or infamous) IBM-baiting “1984” Macintosh ads to its “Think Different” campaign to its minimalist iPod spots. Now Google is borrowing Apple’s marketing mojo to promote its new Nexus 7 tablet computer.

Despite a deserved reputation for not doing many ads for its own products, Google was already making a small name for itself with a few scattered spots–even ones during the Super Bowl in 2011 and 2010–for selected products such as its Chrome browser. Some observers have noted how Apple-like the “Dear Sophie” and “Parisian Love” ads were–Apple’s FaceTime ads and “Get a Mac” ads, in particular, are pretty cute–so Google must have figured it might as well stick with what works.

Today, Google debuted a TV commercial for the Nexus 7 tablet that once again follows the Apple playbook: simple, cute ads with music that walks the edge of heartwarming and treacly. This one has a father and son using the tablet while camping–and if that sounds strange for a device that requires a WiFi connection, well, watch the ad to discover the twist.

Will the ads work? As the Atlantic points out, this one may not work as well as the others for several reasons that have to do with that twist. Others love it.

The only mystery is why Google is running these ads now, when the pricier version of the Nexus 7 is sold out. Yes, a product shortage–another buzz-producing page from Apple’s playbook. But if Google keeps up the high level of emotional connection its ads routinely forge, it seems likely to set its own example for tech advertisers.

Why Google’s Nexus 7 Tablet Is Hotter Than Apple’s iPad

Cross-posted with some changes from my Forbes.com blog The New Persuaders:

For once, an Apple product isn’t the hottest piece of hardware on the scene. This week, at least, that highly enviable status goes to Google’s new Nexus 7 tablet.  According to reports, several retailers are sold out of the 7-inch tablet, and even Google’s own online store only has the cheaper, $199 8-GB version. The $249 16-GB version is no longer available anywhere except on eBay for a steep premium.

Of course, you have to remember that selling out doesn’t mean much without knowing how many sold out. This is a classic Apple ploy, though to give Apple credit, it usually turns out later that it sold a ton of whatever sold out. No matter, selling out a product shortly after its release still works great as a marketing tool, as you can see from the coverage gushing about “incredible demand.”

But Google deserves credit for more than just marketing. Now that I’ve tried it for several weeks, with a model provided temporarily by Google at its I/O developer conference, I can tell you why the Nexus 7 is the latest hot gadget:

* It looks and feels, to use the technical term, slick. The fact is, Apple’s products have a look and feel that few can match, and even the Nexus 7 doesn’t quite get there. But it’s pretty damn close. It feels substantial, while substantially lighter, of course, than the iPad. The swiping is very smooth as well.

* The 7-inch size is appealing and convenient. It’s easy to hold it in one hand, while swiping with the other. It also fits in a pants or shorts pocket (or purse, I’m guessing) surprisingly well for temporary transport. So I end up taking it more places than my larger tablet.

* The screen is no Retina like the latest iPad, but it still looks sharp and bright.

* It may not have all the apps, or some of the latest and greatest, that Apple has, but it’s got plenty. And some very nice ones, too, such as Flipboard and my current favorite, The Night Sky.

* Almost forgot–it’s cheap! For $199, it’s less than half the current $399 minimum for an iPad. That makes the Nexus 7 close to an impulse item, or at least a gift that won’t break the bank.

* Uber-reviewers Walt Mossberg of the Wall Street Journal, David Pogue of the New York Times, and even Apple fanboy/Google hater MG Siegler, himself, all like it. So does almost everyone else.

For all that, I can’t help mentioning the downsides. The default screens are a mess of apps, My Library (which features an Esquire cover of Bruce Willis that I really don’t want to see anymore), and recommended apps and magazines I couldn’t care less about (Country Weekly magazine? Really?). You can change the app organization, but at the outset, it’s haphazard, making it hard to find some basic ones at first. In particular, the nondescript icon for Google Play, which seems really key to Google’s ultimate success at mobile devices and apps, doesn’t suggest an app store. And who besides us Google watchers know that “Google Play” is an app store anyway?

As many have noted, there’s not much content in its Google Play store. But that means little to me because I’m a Netflix subscriber and can watch using the Android App. There’s also a Hulu Plus app. (But not Amazon Instant Videos via my Prime subscription, at least not without browser tweaks few will want to bother with; that may be a deal-killer for big Amazon video fans.) The device doesn’t have a rear-facing camera. Since I’m not using a tablet to take photos (partly because, in what is a weird omission, there is no built-in camera app), and since Skype is one of the killer apps as far as I’m concerned, the single front-facing one works fine for me. It’s WiFi only, though again, I wouldn’t pay for another monthly data plan anyway. And with only 8 or 16 GB of storage, you better be comfortable storing most of your stuff in the cloud (I am).

Finally, there’s apparently a problem with the touchscreen, though I haven’t run across it yet, that’s especially a problem for playing games. My own minor complaint about the screen, which I haven’t seen mentioned in reviews I’ve read, is that it’s just a tad too small, or at least the border around the screen is. It’s hard to pick up along the side, because too often I end up touching an icon and launching an app or stopping a video when I don’t want to. The recessed side buttons are a little hard to reach sometimes, too. These are quibbles, though.

Meanwhile, it looks like Apple is readying its own smaller iPad for under $300. That could well steal the Nexus 7’s thunder–especially since it almost certainly will do two or three things better than the Nexus 7 because it’s Apple and because it will be newer.

But for the next few months, at least, Google has a bona fide hit on its hands. And for all the right reasons, not just manufactured scarcity.

Read the original post at The New Persuaders.

Report: Apple’s Mobile Ads Make More Money Than Google’s

From my Forbes.com blog The New Persuaders:

Despite the rapid rise of mobile devices based on Google’s Android operating system, marketers are still getting better results from their advertising on Apple’s iPhone and iPad.

Ads that run on Apple’s iPhone command significantly higher prices than Android, and way higher prices than any other mobile platform, according to a new report from mobile browser maker Opera Software, which also operates a mobile ad network. The iPad in particular, thanks to its large touchscreen and ease of use, gets the highest effective cost per 1,000 impressions (eCPM) of all devices–$3.96 to the iPhone’s $2.85 and Android’s $2.10. All the other platforms are far behind.

That gives Apple’s iOS platform an outsized lead in actual ad revenues compared relative to its market share in traffic: Together, the iPhone and iPad capture more than 61% of revenues to Android’s nearly 27%. Again, all the others bring up a distant rear.

Read the complete post at The New Persuaders.

No Larry Page, But Google Q2 Profits Beat Forecast on Light Sales

Image representing Google as depicted in Crunc...

Image via CrunchBase

From my Forbes.com blog The New Persuaders:

Providing a sign that online advertising continues to shine in a tough economy, Google reported a second-quarter net profit today of $2.79 billion, or $8.42 a share, up 11%, on a 35% jump in sales to $12.21 billion. Non-GAAP profit per share, the one analysts track, came in at $10.12, a little above the Street’s $10.04.

Those revenues included six weeks of its recent acquisition of Motorola Mobility. Google revenues alone were $10.96 billion, up 21%. Either way, revenues after payments to website partners were $8.36 billion, a bit lighter than analysts’ forecast of $8.41 billion.

In trading immediately after the close, shares rose about 5%, then eased back to a steady 3% gain. Google’s shares closed up today about 2%, to $593.06.

Although Street estimates were iffy given the addition of Motorola Mobility to Google’s results for the first time, Citi analyst Mark Mahaney was expecting a $9.99 non-GAAP profit per share on $12.45 billion in gross revenue. Without Motorola, he was expecting $10.76 billion in gross revenues, $8.23 billion in net revenues after payments to website partners. You can listen to the archived analyst call on Google’s YouTube channel.

The upshot after the call: Google executives sounded a confident tone about the business, though insight about Motorola was almost non-existent. In particular, Google appears committed to making mobile advertising pay off, shrugging off concerns about low mobile ad prices.

Google partners don’t seem worried about that either. Jared Belsky, executive VP at digital ad agency 360i, said in an interview that he thinks the rapid rise in mobile computing should be a net positive for Google simply because people are searching more hours of the day now. “This is a strategy for the long term,” says Belsky, who notes that its clients’ mobile ad search spending is now 14% of the total–an increase of 300% from a year ago. “Increasingly they’ll be able to monetize it.” Even more important, he says clicks on mobile ads have risen 300% as well as marketers provide better landing pages and people get more comfortable clicking on the ads as a result.

And the call begins.

Read the complete post at The New Persuaders.

Finally, Fearless Frictionless Sharing on Facebook

From my Forbes.com blog The New Persuaders:

Ever since Facebook debuted “frictionless sharing” last year, this practice of apps such as the Washington Post Social Reader or Socialcam posting your activity on your Wall without asking your permission each time has produced waves of annoyanceprivacy concerns, and even requests for the feds to ban it. There’s also evidence that Facebook users are rebelling against them.

On Thursday, a company that enables sharing on a number of social networks is introducing a tool for publishers of all kinds to enable frictionless sharing on Facebook in particular, but in a way that may ease many people’s concerns. ShareThis, one of several companies that aggregate share buttons on many websites, including Forbes.com, is debuting ShareNow. The tool lets publishers enable automatic sharing on Facebook without having to build their own social reader like the Washington Post’s, for example.

In beta test mode for now, the ShareNow button will sit on the left side of the page on each website that enables it, showing an on/off button that indicates whether continuous sharing is on or not. Readers can turn it off for stories they don’t want to share and then turn it back on for others. Also, if they change their mind on something they shared, they can delete that share on their Facebook Timeline, again with a click to “undo.” …

Read the complete post at The New Persuaders.

Job One For Yahoo CEO Marissa Mayer: The Vision Thing

Marissa Mayer

Marissa Mayer (Photo credit: jdlasica)

Cross-posted from my Forbes.com blog The New Persuaders:

Everybody has all kinds of advice for Yahoo’s new CEO, Marissa MayerHire great engineers. (Well, duh, but how? Big money alone won’t do it.)  Fire 10,000 people. (Sure, Marc, easy peasy–that should help with recruiting too.) Fix Flickr. (Right, and 47 other services while you’re at it.) Go mobile. (Years late, that should work.)

Granted, most of those things may well be necessary at some point, and probably soon. But here’s what everyone from employees and advertisers to users and investors needs to know first: What is Yahoo?

It’s a question that has produced unconvincing answers for so many years it’s hard to remember by now what made Yahoo unique. Yahoo itself takes a direct crack at it on its “Investors FAQs” page, answering the very same question, “What is Yahoo!?”:

“Today, Yahoo! Inc. has become the world’s largest global online network of integrated services with more than 500 million users worldwide.”

Ugh. “Digital media company”? Makes my heart, uh, flatline.

It also has an actual “mission or vision statement,” a clear carryover from Carol Bartz, two CEOs ago:

“Yahoo! is the premier digital media company. Yahoo! creates deeply personal digital experiences that keep more than half a billion people connected to what matters most to them, across devices and around the globe. That’s how we deliver your world, your way. And Yahoo!’s unique combination of Science + Art + Scale connects advertisers to the consumers who build their businesses.”

A little better, but really, “Science + Art + Scale”? Hard to imagine that means much to advertisers, let alone consumers. (I was always surprised Bartz didn’t call it Art + Science + Scale to provide a more characteristically salty acronym.)

Still, there’s a kernel of something in the part about keeping people connected to what matters to them. I will hazard an unpopular view that Yahoo’s original mission as a portal still has fundamental appeal to many people. Most digerati will say the portal is dead, and good riddance, as people flock to more focused services such as Facebook’s social network and Google’s search engine. So if Yahoo comes out and says it’s a portal, it will become even more of a laughingstock in the tech community.

But even Google and Facebook increasingly are becoming hubs for all kinds of activities, even if they will never utter the P word. So it seems clear that a very large number of people out there want someone else to help them decide the best services and apps to use online–and provide a way for them to work together and share data in ways that are useful to us, not just advertisers. It’s also clear that many people are leery, thanks to privacy concerns or simply because they may miss the latest and greatest from that new upstart, about going all-in on Google or Facebook or even Apple.

At its heart, Yahoo’s value, when it has had value, is providing people easy, curated access to the best online services out there, whether they’re Yahoo’s own or others’. That’s a media company, however that’s evolving today and will continue to evolve in the future.

Of course, a vision only works if you act on it, so ultimately, what will really matter is creating new services people can’t live without. Those are now few and far between at Yahoo, though a few like Sports and Finance come pretty close. Spurring the creation and execution of new ones is where Mayer could shine where her predecessors did not.

But Mayer’s vision needs to acknowledge that Yahoo’s future can’t simply rest on pumping out cool products. It needs to be more meta than that in an era when only a couple behemoths can even think about providing everything on their own (and even Google has throttled back its habit of throwing stuff against the wall to see what sticks). And dozens of smaller companies are providing best-of-breed services that Yahoo will be hard-pressed to compete with.

The way Yahoo becomes a 21st century media company, a concierge of online services, needs to be fundamentally redesigned for the mobile era, of course. I still use MyYahoo a lot because I’ve populated it with stock lists, key news sources, access to email accounts, quick views into other services such as Twitter and Facebook, and more. But the desktop version is a fright on my mobile phone, and the mobile version is simply a long list of seemingly random feeds.

Yahoo, of all companies–the one that famously kept its home page simple enough early on that it wouldn’t take more than a few seconds to load on slow dial-up connections–should be able to figure this out. Even Apple, with the random scattering of apps across multiple pages on its iPhone, hasn’t figured it out. But I’d love to see it, and I and a few hundred million other people wouldn’t mind getting it from Yahoo.

For her part, Mayer provided a provisional vision of what Yahoo is or should be to the New York Times: “My focus at Google has been to deliver great end-user experiences, to delight and inspire our end users. That is what I plan to do at Yahoo, give the end user something valuable and delightful that makes them want to come to Yahoo every day.”

But that “something” is far too diffuse, and surely she knows that. As a former product chief at Google, Mayer may face a challenge doing the vision thing. She needs an elevator pitch, yes, but more than that: She must make a clear, bold statement of why we should continue to type Y-a-h-o-o into our browsers, or install Yahoo apps on our smartphones.

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