Facebook Live: Charlie Rose Interviews COO Sheryl Sandberg, VC Marc Andreessen

DAVOS/SWITZERLAND, 28JAN11 - Sheryl Sandberg, ...

Facebook COO Sheryl Sandberg (Photo: Wikipedia)

From my Forbes.com blog The New Persuaders:

For better or worse, you know a company is serious about putting forward a clear image of itself when it submits to an interview with Charlie Rose.

And so on Oct. 2, Facebook COO Sheryl Sandberg and board member and uber-VC Marc Andreessen talked with the PBS journalist at the annual ad confab Advertising Week in New York, clearly in hopes of persuading brand marketers to invest much more on the No. 1 social network. Here’s a live account of what they had to say, paraphrased at times (especially when it comes to fast-talking Andreessen):

Rose asks Andreessen where advertising is heading in the Internet age.

Andreessen: People love the Internet and there’s such a powerful global phenomenon putting the world in people’s hands. We have the fundamental challenge in advertising and media: Most of the money is trapped on the wrong side. We still don’t have most of the money and advertisers moved over to online. We now can see that transition happen, particularly with mobile.

Sandberg: You went from radio to TV and print and then to online. We think Facebook represents the next stage of online and we’re still in the very beginning. Ads online today are onetime and one-way, no ongoing relationship. We’re at the very beginning of changing that. Businesses have an opportunity to change their relationships. They can establish an ongoing relationship. And members have 130 friends they can pass messages along to.

Rose: What are the challenges of mobile for Facebook?

Sandberg: Mobile is a huge opportunity for Facebook. There soon will be 5 billion phones. The engagement opportunities for us are obviously much, much higher. Our mobile users are much more engaged, and that forms the basis for monetization.

Also, the marketing messages can be put into the newsfeeds.

Rose: But does it in any way make the user unhappy?

Sandberg: We’re looking very carefully at this. We’ve been very pleased with the results. We’ve also seen a real improvement for marketers.

Rose: Has the monetization been slower than you expected?

Sandberg: Marketers understand they can’t just do the same campaigns. Then we have early adopters, and we’re working to help them understand. …

Read the complete post at The New Persuaders.

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Facebook’s New Gift Service: Nice, But Not Yet An E-Commerce Game Changer

From my Forbes.com blog The New Persuaders:

Just in time for prime gift-giving holidays like Friday’s World Rabies Day (or if you prefer, Ask A Stupid Question Day), Facebook today launched a social gift service. It’s rolling out to only a select few for now.

I must be one of them, because I was able to send something to my wife to try it out. But in its current form, I doubt I’m going to use it much.

This isn’t the 2.0 version of the Facebook Gifts virtual-gift service that the company shut down two years ago, by the way. In fact, the new Gifts is built upon, and run by, the folks at Karma, the gift-giving service Facebook acquired in May.

It actually looks pretty good. And while I have ordered precisely one gift that obviously has not yet been delivered, so I can’t judge the entire gift-giving process, it worked quite smoothly. I clicked on my wife’s Timeline, clicked the gift button, and off I went to order her some caramels. She can even pick her own flavor–that’s pretty cool.

In this case, I obviously know her address, so one advantage of Facebook Gifts–not having to know or ask for someone’s address–is moot in my case. What’s more, I didn’t get an automatic reminder I might get if it were her birthday, so that bit of friction elimination wasn’t a factor for me either. But it’s fast and easy to send gifts to friends, and that’s great–not just for consumers, but for Facebook, which can use a service that brings in revenues not dependent upon its brand of advertising that many large marketers are still doubtful about.

So what isn’t great, at least for me?

* A lot of the most prominent gifts are pretty vanilla–teddy bears, spa appointments, flowers, cupcakes. Maybe they’re fine products. Maybe they’re the sort of thing most people give their friends. But for a service with a tagline “real friends, real gifts,” too many of these products seem just too impersonal. Products, especially gifts, are not necessarily fungible, and all the less so for close friends for whom you’re supposed to be getting something special. And if they’re not close friends–and let’s be honest, most people don’t have several hundred close friends–I probably won’t be sending them many gifts, from Facebook or anywhere else. …

Read the complete post at The New Persuaders.

AWOL From Amazon’s New Kindle Fire Tablet Lineup? That (Mostly) Ad-Supported Model*

* Updated below.

From my Forbes.com blog The New Persuaders:

A few days ago, it looked like an ad-supported (read: cheap) Kindle Fire might be in the lineup introduced this morning at Amazon.com’s debut of new Kindles in Santa Monica.

Sorry, no dice. The company did introduce a lot of other products, of course, including a faster, cheaper, $159 version of the Kindle Fire with longer battery life, as well as new high-definition “HD” models–including, in something of a surprise, one that has a nearly 9-inch screen. The 7-inch version with 16 GB of memory will be $199, the original price of the first Kindle Fire. It will ship Sept. 14. The 8.9-inch version will be $299, $200 less than Apple’s iPad, and will ship Nov. 20.

Amazon CEO Jeff Bezos also pulled an Apple-like “one more thing” move by introducing a $499 8.9-inch Kindle Fire, also shipping Nov. 20, that has 32 GB of memory and much faster 4G data connections, though that service will cost $50 a year for 250 MB a month. That doesn’t seem like much data, at least for video streaming purposes.

On the more traditional e-book front, Amazon also showed a new Kindle called Paperwhite for $119 for a WiFi version and $179 for a free-3G version, as well as a newly named basic non-touchscreen Kindle now called the $69 Kindle. That one, $10 less than the previous version, is the ad-supported Kindle.

But it’s not the cheaper ad-supported Kindle Fire that some folks apparently had expected. * Update: To make it clear, as Amazon did not at the launch event, all of the new Kindle Fire models will have some advertising, or what Amazon calls “special offers” and “sponsored screensavers” that previously were only on the Kindle with Special Offers. So in a sense, the whole line has at least a small ad component that ultimately may have some impact on the price of the devices. But it still looks fairly minimal compared with the potential for a tablet whose cost could be substantially subsidized by ad revenues in a similar way that carriers subsidize cell phones. Although Engadget reported Amazon would soon allow buyers to pay a fee to avoid ads, CNET now reports Amazon has no immediate plans for that.

Why not a much cheaper, largely ad-supported model, given that it would have provided Amazon an additional way to differentiate itself from Google’s, Apple’s, and other tablets? …

Read the complete post at The New Persuaders.

Flashback to 2001: How Far Can Facebook Shares Fall Before They Can’t Fall Any Lower?

Facebook’s stock performance since May IPO

From my Forbes.com blog The New Persuaders:

I’m having a flashback, and it’s Mark Zuckerberg’s fault. OK, not exactly the fault of Facebook’s cofounder and CEO, but his company’s stock.

The swoon in Facebook’s shares, culminating in a close today at less than half their IPO price, brought back memories of what feels like (but may or may not be) a similar situation I observed a decade or so ago in the wake of the dot-com bust. I was covering Amazon.com during its period of rapid expansion, when it was far from apparent to everyone that it would survive, let alone turn into a blockbuster business.

Amazon.com’s shares–which went public at $18, as it happens the price to which Facebook’s shares fell today–had dipped below $6 a share in late 2001. Amazon had huge costs from building out massive warehouses around the country well ahead of its level of revenues, prompting one analyst to predict that Amazon would go under unless it changed its expansionist ways.

It was the one time I remember wishing that I weren’t prohibited by BusinessWeek rules from buying stocks of companies I wrote about. Having reported on the company for several years and knowing how the economics of its business worked, I was pretty darn sure Amazon wasn’t going under and that founder and CEO Jeff Bezos knew exactly what he was doing.

And he did. Thanks to his vision coupled with a determination to stay the course while adjusting for market changes along the way, Amazon is now trading at $248 a share. A mere 100 shares bought then would have realized 40-fold return for a pre-commission, pretax profit of $24,200.

I don’t yet have the same feeling about Facebook’s stock that I had about Amazon’s back then. …

Read the complete post at The New Persuaders.

Amazon’s Ad-Supported Tablet: What Took So Long?

The current Kindle Fire

From my Forbes.com blog The New Persuaders:

Ever since the first, rather expensive smartphones came out five years ago, I wondered: Why not offer cheaper ones supported by advertising? After all, even if you’d prefer not to see ads, you’re already taking a subsidy from a wireless carrier that often entails (I’m talking to you, Verizon) carrier widgets and interface limitations than are far more onerous than any advertising.

But since then, the only ad-supported portable devices that I can think of, at least that are still around, are Amazon.com’s Kindles with Special Offers. Now, however, the Wall Street Journal says Amazon may debut an ad-supported new 7-inch tablet as a followup to now sold-out Kindle Fires, as a way to offer a lower price in an increasingly competitive tablet market. The tablet could come as part of an expected Amazon launch of new tablets on Sept. 6.

The tablet apparently would display an ad as the device “wakes up.” The story mentioned no specific price break. The Special Offers Kindles offer a $30 to $50 price break, which if applied to the current Kindle Fire price of $199 would come in as low as $149. That would provide a considerable discount from Google’s Nexus 7 tablet, whose key appeal since it debuted in mid-July has been its low price.

Apple also is expected to come out with a similarly sized iPad Mini this fall, that could be priced as low as $249. However, Apple’s brand would still make a higher-priced device appealing to many people.

Assuming the ad-supported Amazon tablet actually launches, what took so long? Well, for one, tablets are still a pretty new category, so perhaps it just took awhile to work out the economics. Also, it’s possible that the ad formats on each tablet have to be so unique that it’s hard to get marketers interested at a more than experimental scale. Not least, a lot of people may figure that if they’re already paying a couple hundred dollars or more for a device, having to watch ads as well is a step too far.

But given that the three key tablet combatants today–Apple, Google, and Amazon–each are already in the ad business to varying degrees, and as it becomes clearer what kinds of ads work best on mobile devices, I wouldn’t be surprised to see more ad-supported models before long.

Why Google’s New Tablet Could Be The iPad’s First Real Competition

From my Forbes.com blog The New Persuaders:

Google is just a couple of days away from debuting a new tablet that could finally shake up a market utterly dominated so far by Apple’s iPad.

Reports from Gizmodo and others say Google is likely to introduce the diminutive 7-inch tablet at its Google I/O developers conference (whose Wednesday keynote I will be covering live here). The kicker, according to the reports: The tablet, built by Asus, will start at $199 for an 8 GB of memory, up to $249 for a 16 GB version.

Amazon.com’s Kindle Fire already plowed this pricing ground, of course, so such a tablet wouldn’t be entirely new. But while the Fire has been reasonably successful for Amazon, it hasn’t made much of an apparent dent in the iPad because of its limitations, including a somewhat app platform controlled by Amazon itself. And the Fire doesn’t run a standard version of Android, making it tougher yet for developers to do apps for it.

Let’s not forget Microsoft’s coming Surface tablet, either. But the reported pricing on that device, introduced last week, sounds quite close to the iPad’s. So unless it’s significantly better, which seems doubtful, it seems unlikely to mount a serious challenge.

But Google’s tablet, assuming as Chairman Eric Schmidt has promised (and this is a very big assumption) that it performs well, could for the first time challenge the iPad. And it would come at a time when tablets are the focus of everyone in tech from chipmakers and hardware manufacturers to app developers to marketers and publishers hoping to capitalize on a new mobile Internet device that could give them the creative canvas to rival (or exceed) the appeal of television and magazines. Here’s why Google might have a hit this time:

* It’s cheap. Now, merely being cheap won’t guarantee people will buy it in sufficient numbers to matter. But at $199, it doesn’t have to be every bit as good as the iPad. As Clayton Christensen has noted in cases dating all the way back to the transistor radio in the 1950s, a rival can most successfully challenge an established incumbent not by matching it feature-by-feature, but by offering something good enough for most people for a lot less money.

* The rock-bottom price will attract more app developers. If it’s decent enough to sell a lot thanks to the low price, that suddenly makes Android a more attractive platform for app developers. One of several reasons the iPad is the most popular app platform is that Apple controls the operating system version so developers don’t need to rewrite an app for each device running different versions. …

Read the complete post at The New Persuaders.

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