Tag Archive | "daily"

Newspaper Attacks UK Government For Its ‘Closeness’ To Google

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UK tabloid newspaper The Daily Mail, has decided to raise the issue of Google’s influence on the UK government, after uncovering the fact that Conservative Party ministers have held meetings with Google an average of once a month since the General Election two years ago. There have been 23 meetings between Tory ministers and Google since June 2010, with Prime Minister David Cameron meeting Google three times and George Osborne – who as Chancellor of the Exchequer is supposed to meet with business leaders – four times in two years.

The story needs to be a seen in a wider context. The Conservatives have recently come under fire for having too close a relationship to another powerful entity, News Corporation (as did the Labour party during its tenure). A huge inquiry into Press standards has in large part focused on the ties between Rupert Murdoch’s media giant and the Conservatives.

But what the report buries way down in the article, is the number of times the newspaper itself has met with the Government. A Google spokesperson told us: “It’s absolutely right that governments speak with companies about issues that affect their citizens. The British Government makes the list of those meetings publicly available – including the Daily Mail’s 34 meetings over the same period.” In other words, the Daily Mail has met with the Government almost one and a half times a month (on average) since they entered office – that’s quite a bit more than Google has. It’s likely those were high-level meetings, not editorial ones.

That said, the issue does raise the question of Google’s closeness to the UK government and its ability to grab the ear of the Government on a number of topics. It’s the kind of access a lot of companies would be envious of.

Culture minister Ed Vaizey has met the firm seven times. Culture Secretary boss Jeremy Hunt has held four meetings. In David Cameron’s first months as party leader in 2006 and 2007 (though not yet Prime Minister), he spoke to the annual Google Zeitgeist conference.

Three senior figures have moved between the Tories and Google in the last few years. Rachel Whetstone is Global head of communications and public policy at Google and is married to David Cameron’s former chief of staff, Steve Hilton. Naomi Gummer was formerly adviser to Culture Secretary Jeremy Hunt, but is now a public policy adviser to Google. Amy Fisher Was a press officer for Google, and is now a special adviser to the Environment Secretary Caroline Spelman.

On Hilton, the right wing Daily Mail newspaper has rarely missed an opportunity to attack his more radical attempts to shake up government thinking about technology and its effect on society. But it’s more likely that the Conservatives – in part driven by Hilton’s thinking – have realised that the world has moved away from the green-screen, big-IT projects which used to fill the coffers of the likes of EDS and others, towards embracing a more open standards approach. On the ground this has fed into attempts to open up government data, and led also the innovative project known as Gov.uk, which is taking a startup approach to government online, employing many of the UK’s best engineers and tech stars.

It’s also quite something to see a sentence describing Hilton as the “shaven-headed son of Hungarian immigrants” – a phrase which betrays the Mail’s antipathy to alternative thinking.

In March it was announced that Mr. Hilton was going to take an academic post at Stanford University in California to be near his wife who works at Google. He plans to return next year, though it’s not yet clear whether he will re-join the government.

Of course, back in the real world, these West Wing-like moves of advisers between big business and governments go on literally all the time. We don’t currently have the equivalent figures for meetings with Microsoft or Cisco, or Facebook, IBM or other companies, but I’d be amazed if there were not similar factoids waiting to scurry forth if someone someone decided to lift a few rocks. Indeed, Microsoft, Cisco and many other large tech companies have appeared several times at the government’s ‘Tech City’ meetings.

So quite why the Daily Mail has decided to home in on this issue is a little bit of a mystery. It may be that the story was placed as an attack by the Labour Party. Their health IT scheme to store patients’ records failed spectacularly just before they left office, so they would have smarted at the suggestion by Cameron that a company like Google could probably do a better job.

The newspaper quotes Helen Goodman, Labour’s media spokesman, who says “Of course it is important for ministers to listen to business, but a meeting with Google every month does look like the sort of privileged access that small businesses can only dream of.” Unfortunately, she neglects to mention the numerous tiny tech startups that have been invited to Number 10 Downing Street over the last couple of years as part of the government’s Tech City initiative, and its purchase of an entire building – Campus London – in East London which is housing small tech startups that have have nothing to do with Google. (As disclosure, I’m co-founder of a co-working space that’s a tenant in that building, but frankly, I’d point this out even if it wasn’t).

Then again, Google doesn’t help its own cause. In Europe it does not have a great record on tax. As Goodman points out: “Ministers must disclose what they discussed. Did they challenge Google over their repellent tax avoidance, which was uncovered by the Daily Mail?”

It’s here that criticism could land a big punch. Google has been oft criticised for paying tax on less than a quarter of its UK income. In 2010 it generated £2.1 billion in the UK but with its international operations based Ireland, where corporation tax is much lower than the UK, it escapes a great deal of tax.

And Google hasn’t always helped its own cause.

Last month Google executive Naomi Gummer, until recently a Conservative minister’s political adviser, caused a furore in the press when she implied (not unreasonably?) that it was the job of parents to stop children seeing adult content online, not Internet companies. Currently a debate rages in the UK about creating an ‘off switch’ at ISP level to block porn, allowing parents baffled by content settings or Net Nanny software to simply order a ‘clean’ version of the Internet direct from their ISP.

A Conservative Party spokesman told the Mail: “All these meetings have been properly declared and it is normal for relevant ministers to meet with a company of this size.”

Ultimately the Mail’s story does raise questions of perceptions over-all but as a major UK tech player, it would be extremely odd for it not to meet with whoever was in power fairly regularly. Neither Facebook not Twitter, for instance, have anything like the huge engineering bases and offices Google has in the UK. Do we want our politicians to remain in a worldview of tech dominated by the desktop and ‘licenses’ or one where developers, startups and apps can thrive? I’d hazard not.



Article courtesy of TechCrunch

Spotting The Next Facebook: Why Emotions Are Big Business

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Editor’s Note: Nir Eyal is the founder of two acquired startups and an advisor to several Bay Area companies and incubators. Nir blogs about the intersection of psychology, technology, and business at NirAndFar.com. Follow him on Twitter @nireyal.

Tomorrow Facebook will sell shares in one of the biggest tech IPOs in history. New investors will gobble up the stock to get a piece of the global phenomenon famously started in Mark Zuckerberg’s dorm room in 2004. But while owning the stock will have quantifiable value when it trades on the open market, few buyers will be able to say truthfully that they understood the value of the company just a few years ago.

Ask yourself candidly, what did you think of Facebook the first time you landed on its homepage? Where you blown away? Could you see how it would fill a gaping need in the lives of nearly a billion people? If you’re honest with yourself, and you’re not Peter Thiel, your answer is probably, “No, not really.”

Don’t feel bad. Like many of the astoundingly successful web companies of the last decade, it was hard to appreciate the value of Facebook at first glance. But one person who “got Facebook” early on was Noah Kagan, who in October of 2005 joined the company as one of its first product managers. In 2006, Noah was the source for an analysis of Facebook written by Nisan Gabbay. The essay identified one of the most important reasons for the company’s ascent to Internet glory and offers a prescient description of opportunities still to come:

“The Facebook success story is most interesting to me because of how daily offline social behavior drove usage of the site. There are plenty of activities in our daily life that could benefit from a complementary online product … Facebook demonstrates you have a great Internet service if offline behaviors can drive nearly daily usage online.”

The analysis was spot on. Facebook succeeded because it built new online habits around frequent offline behaviors. Originally, Facebook was designed to replace the physical face books undergraduates received their first week of school. The printed collection of classmates’ names and photographs was an indispensable artifact of college life and was referenced for everything from study group formation to late-night hookups.

TheFacebook.com, as it was originally known, offered users a digital way to feel connected to others throughout the day and from anywhere they could access the web. The power of this universal human need for social acceptance and connection helps explain how the company grew well beyond college campuses and now touches one in eight people on the planet.

The Need To Feel

Ask a devoted Facebook user why they log-in to the site several times per day and they’ll describe features they love and provide examples of how they use the service. They’ll tell you it’s a great way to share photos or keep up with their friends.

But below the surface is the need for emotional gratification. Though we can all shift our emotional states ourselves, it’s not easy. Instead of going through the hard work of consciously changing the way we feel, we use ready-made solutions to do it for us.

Using products or services for emotional gratification is nothing new; some of the most valued things on earth are those that have the ability to transport us quickly from pain to pleasure. For example, we laud the ability of painters or musicians to “move us” with their art. We shower athletes with millions for their ability to transform the gloomy start of the workweek into the excitement of Monday Night Football. Facebook, and the companies like it, are the new tools we use to quickly elevate our moods. This “emotion arbitrage” is the differential in work between having to create our desired physiological state ourselves versus utilizing a product or service to help do it for us.

Facebook won’t be the last company to help us feel good fast. The next web phenom to fulfill our emotional needs will likely contain the following traits:

Cued By Frequent Feelings

The most successful consumer web companies cater to our most basic and powerful emotions. People may feel emotions differently, but we all feel the same spectrum in varying degrees. The most valuable services create internal triggers in the user, activating desire to use the site whenever experiencing a particular sensation. These cues prompt users to come back to the site unaided by external messages. The site becomes the default solution to satiate their emotional needs.

The key is how often we feel the emotional cue. In fact, the market potential for a new company is a function of the frequency of how often the emotion it addresses is felt. As Gabbay correctly noted in his 2006 article, early Facebook users felt the need to connect to the site on a daily basis. Likewise, companies that successfully address frequently experienced emotions stand to reap huge rewards.

Pain Relief

When we feel negative emotions we seek out experiences to bring us back to more positive mental states. Products that can alleviate powerful negative feelings – like fear, sadness, rejection, anxiousness, inferiority, and uncertainty – even temporarily, can be a major draw for consumers.

Odds are that if you’ve felt restless during your day, you’ve visited Facebook, Twitter, YouTube, Pinterest or one of the other top 25 websites to lift you out of your funk. However, positive feelings fade over time, and when we find ourselves in a negative emotional state again, the cycle continues. The chemistry of the brain ensures this is so.

With Facebook, it’s often loneliness that cues a visit to the site. Twitter is cued when the user fears being out of the loop about what’s happening. Pinterest users feel the urge to capture and collect visual scraps of the web, worried they’ll lose the image lest they pin it.

Specific Solutions To Fuzzy Needs

You may be thinking that to claim websites are used to satiate unpleasant emotions is a stretch. Clearly, no one logs into Facebook after saying, “I’m seeking to be taken out of a state of loneliness. Let’s check my timeline!” Yet, it’s undeniable that the mind compels us to do everything we do as it endlessly searches for rewards and avoids pain.

So how does a consumer technology company communicate what their product is for, without actually stating what the product is for? Obviously, no one would have signed-up for Twitter with the tagline, “Twitter alleviates your anxiety of social rejection.” Instead, the company made the value of the service concrete with the tagline, “Find out what’s happening, right now, with the people and organizations you care about.”

Yet, in Twitter’s early days even this messaging was still too opaque. So Twitter had to be even more specific about the value of the service. As Josh Elman, an early product manager who led the Growth Team at Twitter, explained to me, “We had to more actively tell the story and came up with use cases around knowing what was happening. One great example is when Conan O’Brien tweeted he was going on tour and sold it out quickly. We told the story as, ‘if you are a fan of Conan O’Brian and were on Twitter the morning of Thursday, March 11, you may have seen the tweet announcing his tour and quickly bought tickets. If you weren’t checking Twitter then, you missed out.’” Same message delivered, but with a specific example to drive the point home.

Things To Come

With the imminent Facebook IPO, Instagram’s recent billion dollar sale, and unprecedented new sources of capital funding seed-stage investments, a new tide of entrepreneurs will answer the enticing call of opportunity and pursue their Silicon Valley dreams. Though almost all will fail, a tiny few will create products, which will touch the lives of not just millions, but billions of people. Those entrepreneurs will have a firm understanding of human behavior and their products will be grounded in fundamental emotional needs.



Article courtesy of TechCrunch

Horoscopes, Yahoo, video, Instagram, Lost Bubble, more on this week’s top 20 growing Facebook apps by DAU

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Daily Horoscope was the No. 1 gainer on our list of Facebook applications that grew by daily users this week. Additionally, there were two other horoscope apps, Yahoo, a few video websites, mobile apps, Instagram, Facebook’s developer site, and games led by Lost Bubble.

The titles below grew between 100,000 and 1.7 million DAU, based on AppData, our data tracking service covering growth for apps on Facebook.

Top Gainers This Week

Name DAU Gain Gain,%
1.   Daily Horoscope 1,900,000 +1,740,000 + 1,088%
2.   Yahoo! 6,500,000 +1,700,000 + 35%
3.   Siz.net 670,000 +530,000 + 379%
4.   Lost Bubble 380,000 +320,000 + 533%
5.   Zynga Slingo 4,000,000 +300,000 + 8%
6.   Candy Crush Saga 2,000,000 +200,000 + 11%
7.   Instagram 2,500,000 +200,000 + 9%
8.   الأبراج اليومية 200,000 +191,000 + 2,122%
9.   Buggle 690,000 +190,000 + 38%
10.   Pyramid Solitaire Saga 480,000 +160,000 + 50%
11.   Zynga 670,000 +130,000 + 24%
12.   Developer Site 120,000 +110,000 + 500%
13.   Chill 1,400,000 +100,000 + 8%
14.   Horóscopo Diário 1,800,000 +100,000 + 6%
15.   HTC Sense 1,600,000 +100,000 + 7%
16.   Klout 1,100,000 +100,000 + 10%
17.   Nimbuzz Mobile 1,900,000 +100,000 + 6%
18.   Nokia 2,300,000 +100,000 + 5%
19.   Pool Live Tour 2,100,000 +100,000 + 5%
20.   Samsung Mobile 3,600,000 +100,000 + 3%

In addition to Daily Horoscope,   الأبراج اليومية and Horóscopo Diário were popular on our list; these apps tend to post daily feed stories when used. Yahoo’s web app was popular, as well as Siz.net and Chill.

Instagram remains on our list, but its video counterpart, Viddy did not. A number of other mobile apps were popular: HTC Sense, Nimbuzz Mobile, Nokia and Samsung Mobile. Then, Facebook’s Developer Site made our list.

Finally, games on the list were led by Lost Bubble, but included several Zynga and King.com titles.

All data in this post comes from our traffic tracking service, AppData. Stay tuned for our look at the top emerging apps on Friday.

Article courtesy of Inside Facebook

Three Ways Facebook Can Leverage Mobile To Boost Revenue

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Editor’s note: Hussein Fazal is CEO of AdParlor, an ad management and technology company for Facebook campaigns. AdParlor manages over 1 billion daily ad impressions on Facebook for clients such as Ubisoft, SEGA, Groupon, OMD and Starcom.

I must say that I have been a little bit disappointed recently in the many, many, many analysts who have been knocking the Facebook valuation with very limited insight into what is going on with their advertising business. Their revenue potential is as strong as it has ever been and the social network continues to grow its users and roll-out innovative advertising products.

While there are many things that Facebook can do to drive revenue related to display, search, and mobile – let’s take a look at three immediate steps Facebook could take to ramp up revenues from its 500 Million+ monthly active users on mobile devices.

1. Show more Sponsored Stories in the mobile news feed – A sponsored story is a piece of news that you would see in your news feed anyways – turned into an ad. It is relevant, social and most people who see a sponsored story wouldn’t even recognize it as an ad. Simply put – sponsored stories work. Looking at campaigns AdParlor has run across numerous verticals show that on average, sponsored stories have a 17% higher click-through-rate and a 38% higher conversion-rate than regular marketplace ads.

When sponsored stories were first introduced they were only shown on the right-hand column. They were then rolled out into the news feed on the web version of Facebook. At fmc they announced that they would begin to serve sponsored stories on mobile, and on April 26th it seems to have gone live. However, most users have seen few if any sponsored stories in their mobile news feed as Facebook is slowly rolling this out while monitoring user experience. Facebook can easily flip the switch on this, increasing the volume of sponsored stories it shows in the mobile news feed and increase their mobile revenues.

2- Combining Location & Offers – A while back Facebook attempted to compete with Groupon and other daily deal sites by creating a deals product. They quickly shut that down for multiple reasons – and then re-emerged recently with an offers product. These offers are coupons which any page owner can create for free – and will begin to appear in a user’s news feed on the web. The real benefit will start to roll in when Facebook begins to serve these offers in the news feed on mobile devices to users who are near the store providing the offer. Even though an offer is free to create – if Facebook can leverage location-based mobile offers – page owners will begin to see the ROI and will purchase ads and sponsored stories against these offers to get more distribution beyond what is given for free. Additionally, brands will now have a very clear path to seeing ROI when buying fans. The investment question around the value of growing your fan base – at least for physical location retailers – will be answered. This is sure to increase the ad spend these companies will make on growing their fan base.

3 – Open up mobile device-specific targeting  There is currently a Facebook broad category targeting option for mobile devices. Advertisers can choose between Android, iPhone, BlackBerry, and Windows Phone. However – this targeting simply means that a user has accessed Facebook through one of these devices. Creating an ad and selecting this targeting will show ads to these users – however they could be accessing Facebook via the web or even a different device. If Facebook were to tweak this and allow advertisers who select iPhone to have ads show specifically ON the iPhone to a user accessing Facebook from their iPhone – this would mark a significant opportunity. Specifically – one of the largest advertising categories on mobile devices is for apps – and the massive gaming subcategory. If Facebook were to enable actual mobile device-specific targeting – iPhone, Android, and BlackBerry application developers could then leverage Facebook advertising to drive application installs – taking the user right from the click of the ad into the corresponding app store. It seems that right now Facebook wants to limit mobile ads to be sponsored stories in the news feed for many reasons – to maintain user experience, to keep users within Facebook, and an effort to make it not feel like advertising. Given this – it is unlikely that Facebook would allow ads from the mobile news feed to direct users anywhere outside of Facebook. However – the opportunity is there – and the revenue potential is huge.



Article courtesy of TechCrunch

CollegeBudget Acquires Y Combinator-Backed Munch On Me To Bring Food Deals To Campuses

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Last we heard from CollegeBudget, its founder and CEO Mike Moradian was in the process of crowdsourcing a very personal decision — whether or not he should attend Harvard Business School or forgo an MBA in favor of leading his startup to victory (or the deadpool). After 80K votes, it turns out that, in spite of Vivek Wadhwa’s advice (and that of many others), Moradian has decided to turn down Harvard to focus on growing CollegeBudget. Sometimes a body has to follow their dreams and their passion, sorry Harvard.

For some quick background, CollegeBudget set out to create a variation on the Groupon discount and group buying model, specifically targeted at campuses. The goal being to bring discounts and group buying — including for textbooks and student loans — to colleges and universities across the country. Fast forward to the present and CollegeBudget is finding validation for its campus model. Since our coverage last year, the platform has grown its user base from 600K to two million students and now features deals from over 250 merchants at more than 100 campuses. The growth, Moradian says, saw a big jump in January, when the startup launched national deals with American Apparel and Skype.

Today, CollegeBudget is moving more aggressively into local offers, particularly around food. For hungry, cash-strapped college students, food discounts can be extremely appealing, especially when one of the alternatives is the school’s cafeteria. This is where Munch On Me comes into the picture. Munch On Me is a daily deals site for food, which Alexia described as a “Groupon for food — done right.”

The startup, which is a graduate of Y Combinator’s 2011 summer class, puts a spin on the daily deal model for food by offering discounts on specific dishes, rather than every item on the menu, a focus that restaurants love because it means they can prepare in advance for the increased demand. What’s more, focusing on specific dishes allows for quicker turnaround, a greater number of deals, which Munch On Me sweetened by taking a smaller commission on their deals than the bigs, like Groupon.

Munch On Me’s unique spin on food deals (as another example, because restaurants often lack quality images of their own food, Munch On Me sends out a professional photographer to snap pics for the discounted dish) became increasingly appealing to CollegeBudget over the last few months, Moradian tells us. Especially as the startup’s competitive advantages have allowed for deeper penetration into local markets and allowed it to forge long-term merchant relationships in, it just so happens, more than 20 college towns in California.

That’s what led to today’s announcement, as Moradian tells us that CollegeBudget has officially agreed to acquire Munch On Me. While the particulars of the deal aren’t being disclosed, we’ve learned that this wasn’t a pure acqui-hire, cash has indeed exchanged hands. As a result of the acquisition, the full Munch On Me team, which is currently based in San Francisco, will be staying put in the Bay Area, moving into CollegeBudget’s SF offices.

“We really liked what they were up to and were keen to build that kind of functionality into our product,” the CollegeBudget founder says. After being introduced, the teams hit it off, finding that they shared a similar vision for their companies, and it wasn’t long before Munch On Me agreed to integrate their product and style into CollegeBudget.

The combination of the two services, Moradian believes, will help strengthen its leadership in the college social commerce market, bringing Munch On Me’s active, food-centric user base to CollegeBudget’s growing network of college students and merchants, allowing the newly formed business to expand into new markets.

The cost of the college experience (tuition and otherwise) has continued to grow, to the point of absurdity. Student debt in the U.S. today has pushed north of $1 trillion, with the average debt per student standing at more than $25,000. As a result, CollegeBudget, Moradian says, wants to do everything it can to save students on college expenses — and with Munch On Me on board, a lot of that attention will be paid to reducing food costs.

The team is in it to revolutionize student discounts, and it’s no longer subscribing to a “daily deals” model, instead deals are open for one to two weeks, meant to give companies a greater window of opportunity to bring in new, young customers — a demographic that’s obviously much coveted among consumer brands. (Hence the American Apparel and Skype campaigns.)

As for Munch On Me users, the startup will continue to offer access to its coupons until September 1st, at which point it will officially shut down its website. You can find out more here.

More from CollegeBudget on the acquisition here.



Article courtesy of TechCrunch

Five Ways Native Monetization Is Changing Silicon Valley

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Editor’s note: Dan Greenberg is the founder & CEO of Sharethrough, the native video advertising company. Dan has been honored as an AdAge “Media Maven” and was recently named to the Forbes “30 under 30″ list. You can find him on Twitter at @dgreenberg.

With a $100 billion IPO pending, it’s with confident defiance that Facebook has thumbed its nose at traditional web advertising models. On Facebook, despite their $5 billion 2012 forecasted ad revenue, you’ll see no prerolls, no rich media ads, no “punch the monkeys,” and no interruption. Facebook is leading the charge for a new generation of media companies who are building their businesses on “native” advertising models, a fundamental shift away from the traditional interruptive ad models that users have learned to ignore. Facebook’s commitment to native monetization signals significant change to come.

Native advertising on Facebook

Native advertising is a new form of inventory that seamlessly integrates promoted content from brand advertisers into the fabric of a site itself. Native advertising inventory is content that’s part of the site experience rather than ads that interrupt users, such as pre-roll video ads or boxes, buttons, and banners on the corners of pages. Facebook’s Sponsored Stories are one of the largest bets on native advertising in the ad industry – a bet that’s consistent with the ad strategies of the dominant social media platforms such as Twitter, YouTube, StumbleUpon and the coming ad products from the next wave of internet elite like Tumblr and Spotify.

Promoted Tweets on Twitter

The appeal of “native” monetization models is that they create an alignment between a company’s business model (create/publish/curate content) with their revenue model (promote brand content that fits into the site experience), just as Google did with search ads that are relevant to search results. Google AdWords was the original native monetization pioneer, paving the way for Sponsored Stories on Facebook, Promoted Tweets on Twitter, TrueView promoted videos on YouTube, Paid Discovery on StumbleUpon, and Sharethrough’s Promoted Videos.  These examples are only a handful of a large and growing movement of promoted branded content experiences that have replaced traditional one-way ad formats.  Social content sites such as Cheezburger, BuzzFeed as well as publishers like Gawker and The Awl have also followed suit.

Native Video ads on The Daily What, a Cheezburger site

The success of these companies in figuring out native monetization models has sparked a number of broad-based changes in the startup economy.  Here are five ways native monetization is changing the game for startups in Silicon Valley and beyond.

1. Native is now the starting point for monetization strategy. The success of companies such as Facebook and Twitter around native monetization, as well as social content sites such as BuzzFeed, hasn’t gone unnoticed by the next generation of entrepreneurs.  For these digital natives, their starting point wasn’t ever going to be display ads, popups, or prerolls – their starting point for monetization is native.  You’re already seeing companies like Spotify introducing branded playlists and Tumblr enabling brands to promote their posts.  The next generation of internet elite are bypassing the display ad slog altogether and creating ad products that enable brands to engage natively with their audiences.

Lionsgate used native advertising on Tumblr to promote “The Hunger Games”

2. Native is turning heads in the venture community. The value of native monetization hasn’t been lost on the venture community either.  Imagine an entrepreneur telling a prospective investor that their monetization model is to slap display ads in the corners of their site – not going to happen.  For the next generation of startups looking to build long-term businesses, AdSense is just not a viable option.  Instead, the startups that can articulate a roadmap for building a native monetization model through ad products that fit uniquely within their sites will find a much more receptive audience. Can you imagine if Pinterest introduced display ad banners to the site (see below)?  Users would revolt.

Pinterest has an ad-free interface, yet it is proving to be a powerful weapon for brands.

3. Native shepherds in a new wave of ad tech. There are countless sites and apps that have the ability to offer integrated, unique native ad experiences, but instead are still monetizing with AdSense or other standard display options. Why? Because it’s easy to set up, it does not require a direct sales team and their developers can focus exclusively on making their site experience as good as possible. While none of these motivations is going to change for publishers, the desire to offer native ad products will only increase as they see the industry increasingly heading that way. As a result, technology companies that can enable publishers to create and monetize native ad experiences will be a big growth area in the coming years.  A new crop of native monetization tech companies have emerged like Sharethrough for native video ads, Outbrain for natively promoted articles, and Solve Media for native ads in captchas, to name a few.

The next wave of Silicon Valley ad tech gamechangers will help publishers monetize with native ad formats.

4. Advertising is no longer a dirty word for engineers. The most consistent users of “ad blocker” technology are Silicon Valley engineers. Advertising is just not a sexy pursuit for most engineers, largely because the bulk of advertising detracts from a site experience and annoys its users.  So it’s understandable that an engineer is not motivated to put in their blood, sweat and tears to increase the amount of interruption and add to the thoughtless ads on the web. Times are changing, though – native monetization offers a host of compelling technical challenges that are all in service of building a better internet, one where advertisers create value for users instead of interrupting them.  Some of the best engineering minds in Silicon Valley, like Kevin Weil and Gokul Rajaram, now work on the “revenue engineering” teams at Facebook and Twitter.

Mekanism, a creative agency based in San Francisco, won last year’s “AdAge Small Agency of the Year” award.

5. Native advertising empowers the creative industry in Silicon Valley. A brand’s ability to succeed with native ads is tied to the ability of the creative industry to continue creating great brand content for the native medium.  Promoted Tweets, Sponsored Stories and Paid Discovery are all new forms of media that the best creative agencies intimately understand and embrace.  Just like the cottage industry that grew up in Silicon Valley around SEO, we are seeing creative shops in Silicon Valley and the Bay Area come up in a big way. Groundbreaking Bay Area creative agencies like Mekanism, EVB and Pereira & O’Dell, as well as production shops like Portal A Interactive and Seedwell,  have all been built from the ground up around the DNA of Silicon Valley and have quickly become major players in the global ad game.  With a shared vision for a future where brands create and distribute content that creates value, not ads that interrupt and annoy, Silicon Valley’s creative minds are setting the tone for the next stage of worldwide digital advertising. Portal A’s tech-celebrity-inspired video for SF Mayor Ed Lee redefined what a campaign video can be.



Article courtesy of TechCrunch

Foxconn Chief Confirms The Apple iTV

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fanboys

In an interview published by China Daily today, Terry Gou, chairman of Foxconn, confirms the massive manufacturing company is making preparations for an Apple television set called iTV. Gou also states that neither development nor manufacturing has begun. Apparently, per China Daily at least, the television set will have an aluminum construction, Siri voice controls and FaceTime video calling.

This is the most solid report to date of the long-fabled Apple HDTV. The product has been rumored for the last several years. So far both Steve Jobs and now Tim Cook have called the Apple TV, the company’s set-top box, a hobby. But it seems the company is almost ready to turn its avocation into an occupation.

Gou’s claims published in today’s China Daily report line up very nicely with previous rumors including Cult Of Mac’s claims from last week. The iTV, or as I have long called it, the Apple HDTV, seems like it would be an iMac designed for the living room. An Apple HDTV will likely use a very similar branding and design plan as the iMac with near-edgeless glass and aluminum frame. It would also hopefully have a similar I/O port design, allowing consumers the luxury of having all the ports located in one location. China Daily also indicates that Foxconn is teaming up with Sharp to produce this set, which makes sense given Sharp’s dominance in LCD manufacturing.

But as China Daily indicates, production nor development has started on this product yet, seemingly indicating that it won’t hit the market in 2012. It’s been also rumored that Apple is trying to line up more content partners to bolster iTunes’s library or even perhaps cobble together a legitimate alternative to cable TV. Whenever it hits, the iTV, Apple HDTV, or whatever it will be called will likely be the biggest TV news (albeit perhaps not the most popular selling unit) since the Beatles appeared on Carson.



Article courtesy of TechCrunch

Evernote Goes East With A Standalone Chinese Service: ‘Yinxiang Biji’

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Screen Shot 2012-05-09 at 11.35.09 PM

Evernote, the company that makes software to help people take personal notes and archive information about their daily lives, today debuted a new standalone version of its service specifically for the Chinese market called Yinxiang Biji (印象笔记.) In English the name translates to “Memory Notes” or “Impression Notes,” according to Evernote.

In a blog post announcing Yinxiang Biji, Evernote CEO Phil Libin explained the strategy of putting forth a standalone site like this:

“Our user base in China is growing quickly; with over a million users, it’s already our third largest country and at the current rate it’ll soon top Japan to move into second place. We’re really pleased with this, but, frankly, using Evernote in China hasn’t been a great experience.

The most common request we get from our Chinese users is to make Evernote faster, more reliable and better integrated with the rest of the Chinese Internet. Due to poor network connectivity between the US and China, there’s only one way to definitively fix the problem: have a separate service in China.”

The separation between Evernote and Yinxiang Biji runs deep — all the way to the server level. “Evernote and Yinxiang Biji are completely separate services with no connection to one another,” Libin wrote in the blog post. “Evernote data will not be stored on Yinxiang Biji servers, and vice-versa.”

Just last week Evernote closed on a $70 million round of new funding valuing the company at some $1 billion. CBC Capital of China was an investor in this latest round, so it seems that relationship has informed the uniqueness/boldness of this move.

It’ll be interesting to see how this plays out for Evernote, and also how many others follow its lead. It’s been notoriously difficult for web companies to launch in China, even after they have built strong businesses in the US and elsewhere. Perhaps Evernote’s strategy of investing extra time and money into tackling the market with a standalone entity — built from the ground-up specifically for China — will be the key to success.



Article courtesy of TechCrunch

Was Zynga’s Deal To Buy OMGPOP That Disastrous? Here’s Some Perspective.

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Draw Something, the game that could do no wrong now seems like it can do little right, at least according to the blogosphere. There’s been a string of stories from virtually everyone saying that the OMGPOP acquisition is “haunting” Zynga because Draw Something’s daily active usage is down to 9.1 million daily active users from its peak of 14.6 million daily active users.

It’s funny how the press turns (and we know this too well). On the day we broke the story that Zynga was about to buy OMGPOP for what turned out to be $180 million, Business Insider said that our rumored price range was way too low. When the company sold, they then wrote a story citing Flurry’s CEO that OMGPOP had left $800 million on the table.

But now, the story is totally opposite! “Interest is fading!” The deal was a debacle! This chart below from AppData is getting rehashed over and over again.

It looks dismal. But while Draw Something’s decline seems a little scary (as it should be), there’s a lot of context to keep in mind –

1) Zynga raised its bookings guidance by around $50 to 75 million for the year, mostly on OMGPOP. Zynga said late last month that bookings for the year would come in at between $1.425 billion to $1.5 billion, up from $1.35 to $1.45 billion. They said on the earnings call that the $50 to 75 million bump was mostly because of Draw Something. While that seems high, it’s not out of line if you look at other comparable company monthly revenues. Funzio was making $5 million a month at the time of its sale to GREE. Glu Mobile, a publicly-traded company, did $17 million in Android and iOS gaming revenues in the first quarter.

2) Games usually peak and then taper off in usage. But revenue sometimes goes in the opposite direction with optimization and improvement (like with Farmville). Zynga probably knows the natural lifecycle of freemium game better than most other companies. Games peak early and then taper down over long stretches of time.

Even hit games often contribute the majority of their revenue to the company after they peak. Farmville was still Zynga’s top game by revenue last quarter even though it’s several years old. It made up 29 percent of the company’s online game revenue, followed by Cityville which had a 17 percent share, according to an SEC filing today.

Here’s the life cycle of Cityville, Zynga’s top game on the Facebook canvas by monthly active users:

Here’s what Farmville looked like:

If you zoom out, here’s what Draw Something’s life cycle looks like. Kinda familiar?

True, mobile is a little bit different. The titles that were first to market like Angry Birds and Zeptolab’s Cut The Rope, have managed to last longer than your typical social game on the Facebook. There are also exceptions like Words With Friends, which has a very unusual curve and Zynga Poker. But life cycles for mobile games are getting shorter every quarter.

3) OMGPOP’s price may seem high, but the deal was far from the most aggressively priced one in recent social gaming memory.

Remember when Disney paid up to $763.2 million for social gaming startup Playdom in 2010? At Playdom’s peak, the company had 7.3 million daily active users. When the deal finally closed, they had about 5 million. Even if you exclude the $200 million earnout, Disney paid more than three times as much as Zynga did for one-half of the daily active users. And that’s factoring in Draw Something’s recent declines.

Or how about the time when DeNA paid up to $403 million for Ngmoco in 2010?  When DeNA won the bidding war against Zynga for this company led by former EA execs, they got 12 million registered users. That’s registered, as in people who touched Ngmoco’s Plus+ gaming network maybe one or two times (not people who used it every month or every day).

OMGPOP had peak usage of 14.6 million users every day. Up until now, Ngmoco has mostly been a source of costs for its Japanese parent as it only launched its Android-based mobile gaming network last fall. If they start materially adding to revenues, it won’t be until now or later in the year, two years after they were acquired.

Or how about the time when GREE paid $104 million for mobile-social gaming network OpenFeint even though it lost more than $6 million on $282,500 in revenue the year before? OMGPOP made about that much revenue per day when it sold to Zynga.

4) There are a lot of other conflating factors that have driven the stock downward over the past few months:

The lock-up period for Zynga’s employees ended a week ago, so now the company’s rank-and-file can sell their holdings. Pincus himself sold close to $200 million in stock at the beginning of last month through a secondary offering. Both Pandora and LinkedIn, which went public last year, matched or found new lows when they hit their critical lock-up dates.

Maybe there are some underlying concerns about where Zynga will find new growth as the company’s business on Facebook seems mature. Draw Something might tie a little bit into that as it’s part of Zynga’s mobile strategy, but it’s not just the game itself. It’s hard to envision a gaming business on iOS or Android that has the market share that Zynga has on Facebook. Furthermore, many standalone Android or iOS gaming companies trade or have been sold at somewhere between $200 million and 400 million.

At a $5.89 billion market cap, Zynga is aggressively priced for growth and is worth about four times its projected revenues this year. Meanwhile, Electronic Arts trades at not much more than what it will bring in revenue for this year. Zynga is also changing a lot internally as early employees, many of whom didn’t have a genuine gaming background, phase out. The company is now pulling in a lot of EA’s middle management. That could bring some creative firepower but it could also create internal culture clash.

But OMGPOP? That’s just one game. And the title’s decline, while fast, mirrors what you see with other hit games.



Article courtesy of TechCrunch

Facebook Amends IPO S-1 To Admit Advertising Biz Hurt By Increasing Shift To Mobile, RSUS Grant

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Facebook Mobile SEC

Facebook has just filed a sixth amendment to its S-1 filing to IPO in order to provide more transparency about how the shift of its user base from the web to mobile is causing it to show fewer ads per user, which could hurt revenue in the long term. Facebook also granted about $796 million in restricted stock units to employees less than a week ago. I’ve excerpted the significant changes and embedded the whole S-1 below. Specifically, Facebook is warning investors that daily active user count is rising faster than the number of ads the site is showing, which it predicts will lead to a lower average revenue per user.

As we noted when Facebook originally filed, it hasn’t proven its ability to monetize mobile yet. It now has Sponsored Stories ads running in the mobile news feed, but it can’t show nearly as many ads in this format as it does on the web, where it often shows four to seven ads per page, though less prominently in the sidebar.

By injecting ads directly into the news feed, Facebook is meddling with one of the most addictive features of the site. If it shows too many ads, users could become less prone to frequent return visits, and might spend less time browsing the feed. The company must walk the tightrope, testing to see how many in-feed ads it can get away with.

While on the web it can keep ad presence in the news feed conservative, on mobile this is it’s only real revenue driver. Facebook may have to slowly ramp up the frequency of mobile feed ads in order to acclimate its users. Unlike other free mobile apps that plaster banner ads over content or force users through interstitials, Facebook is trying to pioneer a less obtrusive way to monetize mobile through ads. Unfortunately,  investors may be weary of weathering the process with their money on the line.

Here’s the important changes to the S-1, in bold:

Page 14: “We do not currently directly generate any meaningful revenue from the use of Facebook mobile products, and our ability to do so successfully is unproven. We believe this increased usage of Facebook on mobile devices has contributed to the recent trend of our daily active users (DAUs) increasing more rapidly than the increase in the number of ads delivered. If users increasingly access Facebook mobile products as a substitute for access through personal computers, and if we are unable to successfully implement monetization strategies for our mobile users, or if we incur excessive expenses in this effort, our financial performance and ability to grow revenue would be negatively affected.”

Page 17: “Based upon our experience in the second quarter of 2012 to date, the trend we saw in the first quarter of DAUs increasing more rapidly than the increase in number of ads delivered has continued. We believe this trend is driven in part by increased usage of Facebook on mobile devices where we have only recently begun showing an immaterial number of sponsored stories in News Feed, and in part due to certain pages having fewer ads per page as a result of product decisions. For additional information on factors that may affect these matters, see “Risk Factors—Growth in use of Facebook through our mobile products, where our ability to monetize is unproven, as a substitute for use on personal computers may negatively affect our revenue and financial results” and “Risk Factors—Our culture emphasizes rapid innovation and prioritizes user engagement over short-term financial results.”

Page 78, regarding the RSUS: “On May 3, 2012, we granted an aggregate of 25,257,815 RSUs. We will determine the fair value of these grants during the second quarter. If the fair value of our Class A common stock was $31.50, the midpoint of the price range set forth on the cover page of this prospectus, the aggregate grant date fair value would be approximately $796 million.”

I’ve learned that analysts at Facebook’s first IPO roadshow events have been especially concerned about how Facebook’s ad business will be impacted by the shift to mobile. Adding additional transparency to its S-1 is Facebook’s attempt to be up front critics. By showing it recognizes the problem rather than sweeping it under the rug, investors could be more confident the company will come up with a solution.

[Image Credit: WatBlog]



Article courtesy of TechCrunch

 

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