New Mining Techniques Probe Deeper Into Consumer Data
Wall Street Journal
Behind the scenes of a recent online shopping trip, Blue Kai , a startup company that collects Internet user data, was tracking when a Web surfer browsed for electronics on eBay, searched for cruises and checked out snowboards. It also tracked when a Web surfer researched Chevrolet sport utility vehicles on auto site Autobytel and priced flights to Durham, N.C., at travel site Expedia.
After collecting that kind of information, Blue Kai groups Web visits into categories of consumers. It then immediately auctions off the data from some of the sites to marketers and Internet companies, which in turn use it for consumer research and ad personalization.
The Web companies make money for selling the data about visitors to their sites, and Blue Kai takes a cut. The advertiser gets its coveted targeting.
After collecting that kind of information, Blue Kai groups Web visits into categories of consumers. It then immediately auctions off the data from some of the sites to marketers and Internet companies, which in turn use it for consumer research and ad personalization.
The Web companies make money for selling the data about visitors to their sites, and Blue Kai takes a cut. The advertiser gets its coveted targeting.
While the idea of target marketing has been around a long time, marketers until recently have had a hard time buying on enough Web sites to make the targeting truly effective.
Blue Kai, like data-mining firm eXelate Media and others, are striking deals with thousands of Web sites to collect and sell data on their visitors that will be used for consumer research or ad targeting. Marketers, in turn, are using the information they buy to make better choices when buying ad space. It is a process that's proving especially useful when buying through ad exchanges, which are new systems that allow advertisers to bid directly on the ad space available on a large group of Web sites.
Buying such data would let a hotel chain, for instance, show ads featuring discounts in North Carolina to a person who recently shopped for a flight to Durham—and not just on the travel site, but on any of a number of sites across the Web.
Some Web sites are hesitant to sell data about the consumers visiting them to outside firms. Historically, the only way a marketer could buy ads on a Web site was through striking a deal with that site directly. Now, buying ads based on the data about visitors, rather than the content published on the site, could drastically change how media companies do business.
The data is becoming the most important component for marketers and Web sites. It tells them who their audience is
Refining digital ad buying practices could bring some steam back to the market for online display ads—those with text and pictures that border a Web page—a market estimated at $20.8 billion in 2009, down from $23 billion in 2008, analysts say. U.S. online ad spending on targeted ads will reach $1.1 billion this year, up from $775 million in 2008, according to research firm eMarketer.
"These companies are adding tremendous value to the whole advertising ecosystem," says Ross Sandler, an Internet analyst with RBC Capital Markets.
Tapping such data gives marketers a way to buy ads according to specific groups of consumers who are likeliest to be interested in a given product, says Curt Hecht. Mr. Hecht is president of Vivaki Nerve Center, a unit of Publicis Groupe that buys hundreds of millions of dollars of online ad space a year for companies such as Procter & Gamble and Wal-Mart Stores.
For instance, a credit card company can buy ads targeted to small business owners it knows are in the market for a new card, instead of buying ads on business-related Web sites.
Neither Blue Kai nor eXelate discloses specific Web sites that they buy and sell data from, citing agreements with those Web sites. In their privacy policies, some Web sites reveal that they sell data to third parties, but often do not list the particular company. EBay says in its privacy policy that it works with Blue Kai but doesn't allow the company to collect any personal information about consumers.
Travel sites Expedia and Kayak say they both sell consumer data in Blue Kai's auction, noting that the information is anonymous and not tied to the specific Web site.
The data brokers have different formulas for collecting and selling information on millions of Internet users across thousands of Web sites, from top retail and travel sites to social networks. Blue Kai, a Seattle company launched in September 2008, regularly records information on more than 160 million unique U.S. monthly visitors shopping on retail, travel and auto sites across the Web.
"The data is becoming the most important component for marketers and Web sites. It tells them who their audience is," says Omar Tawakol, chief executive at Blue Kai.
Some lawmakers, concerned about Internet privacy, are preparing legislation to make more transparent Web sites' tactics for collecting information on their users. In an effort to fend off legislation, data brokers say, they abide by industry standards and do not collect any personally identifiable information and sensitive data, such as health information. They also tout efforts to make their business practices more transparent to consumers.
Both Blue Kai and eXelate, for instance, feature sections on their Web sites to show consumers what information the company tracks and giving consumers the option not to be tracked.
Not all Web sites where Blue Kai tracks information sell data to outsiders. Some use the information to personalize their sites for individual users or for their own advertising purposes.
Some publishers fear that their competitors could buy data about the consumers visiting their sites and use it to steal customers.
IAC/InterActive, for instance, is testing the sale of consumer data tied to its e-commerce site Pronto through eXelate. "If we sell that data, it allows another sales team to sell our audience and compete against us," says Greg Stevens, president of IAC Advertising. "But if it is worth millions and millions and millions of dollars, then hey, maybe the paradigm has turned upside down."
"These companies are adding tremendous value to the whole advertising ecosystem," says Ross Sandler, an Internet analyst with RBC Capital Markets.
Tapping such data gives marketers a way to buy ads according to specific groups of consumers who are likeliest to be interested in a given product, says Curt Hecht. Mr. Hecht is president of Vivaki Nerve Center, a unit of Publicis Groupe that buys hundreds of millions of dollars of online ad space a year for companies such as Procter & Gamble and Wal-Mart Stores.
For instance, a credit card company can buy ads targeted to small business owners it knows are in the market for a new card, instead of buying ads on business-related Web sites.
Neither Blue Kai nor eXelate discloses specific Web sites that they buy and sell data from, citing agreements with those Web sites. In their privacy policies, some Web sites reveal that they sell data to third parties, but often do not list the particular company. EBay says in its privacy policy that it works with Blue Kai but doesn't allow the company to collect any personal information about consumers.
Travel sites Expedia and Kayak say they both sell consumer data in Blue Kai's auction, noting that the information is anonymous and not tied to the specific Web site.
The data brokers have different formulas for collecting and selling information on millions of Internet users across thousands of Web sites, from top retail and travel sites to social networks. Blue Kai, a Seattle company launched in September 2008, regularly records information on more than 160 million unique U.S. monthly visitors shopping on retail, travel and auto sites across the Web.
"The data is becoming the most important component for marketers and Web sites. It tells them who their audience is," says Omar Tawakol, chief executive at Blue Kai.
Some lawmakers, concerned about Internet privacy, are preparing legislation to make more transparent Web sites' tactics for collecting information on their users. In an effort to fend off legislation, data brokers say, they abide by industry standards and do not collect any personally identifiable information and sensitive data, such as health information. They also tout efforts to make their business practices more transparent to consumers.
Both Blue Kai and eXelate, for instance, feature sections on their Web sites to show consumers what information the company tracks and giving consumers the option not to be tracked.
Not all Web sites where Blue Kai tracks information sell data to outsiders. Some use the information to personalize their sites for individual users or for their own advertising purposes.
Some publishers fear that their competitors could buy data about the consumers visiting their sites and use it to steal customers.
IAC/InterActive, for instance, is testing the sale of consumer data tied to its e-commerce site Pronto through eXelate. "If we sell that data, it allows another sales team to sell our audience and compete against us," says Greg Stevens, president of IAC Advertising. "But if it is worth millions and millions and millions of dollars, then hey, maybe the paradigm has turned upside down."
Book Review: 'Googled: The End Of The World As We Know It'
Wall Street Journal
Google's announcement last week that it would offer free turn-by-turn navigation software prompted a nosedive in the stocks of Garmin and other navigation device makers. The jolt was just the latest such disruption caused by Google since its founding in 1998 by Larry Page and Sergey Brin. During that time the company has grown into a $22 billion behemoth—yet, remarkably, it is still in the early stages of a long growth phase. Eric Schmidt, Google's chairman and chief executive, expects that one day it will be a $100 billion enterprise. Being the gatekeeper for the world's information turns out to be a lucrative business, especially without the expense of creating any of it.
In "Googled," New Yorker writer Ken Auletta tells the familiar story of the company's rapid transformation from Silicon Valley start-up to global corporation. As expected, we hear about the young Rollerblading employees at Google's Mountain View, Calif., headquarters, with its massage rooms, pool tables and free meals. But thanks to the unusual degree of access that the company granted the author—and thanks to his sharp eye—"Googled" also presents interesting new details. The book describes, for instance, Google's close relationship with former Vice President Al Gore—during a meeting with him, back in his hirsute phase after leaving office, Google executives showed their solidarity by donning fake beards.
While the story of Google's creation and evolution still holds interest, what fascinates is the company's growing power and expanding horizons. Mr. Auletta observes that the "Google wave has crashed into entire industries: advertising, newspapers, book publishing, television, telephones, movies, software or hardware makers." This impact has forced companies to make difficult choices. One response has been to try to emulate Google, redrawing business plans to emphasize online advertising—although few other companies have so far managed to build a large, profitable business from it.
Google's focus on advertising has led the company to maximize usage by giving away most of its services. For companies selling similar products—like navigation systems—Google's approach is alarming. And even its partners are wary. Martin Sorrell, the chief executive of the advertising giant WPP, describes Google as a "frenemy"—a valuable ally and formidable competitor. Advertising firms worry about being "disintermediated" by Google. Content providers appreciate the traffic that Google sends their way but worry about the erosion of their franchises by aggregation that emphasizes Google's brand, not their own. Some businesses that rely on Google to generate both their traffic and their revenue risk becoming the chimp in the survival maxim "eat what the monkey eats and then eat the monkey."
In contrast to all this corporate anxiety, consumers so far have been upbeat about the extraordinary power that Google wields. As Mr. Brin explains, Google's importance in people's lives comes from "determining what information they get to look at." Lawrence Lessig, who was an expert in the Microsoft antitrust case (and is now a professor at Harvard Law School), tells Mr. Auletta that Google will soon be more powerful than Microsoft ever was, since primacy in search gives the company unprecedented control over commerce and content.
Remember when Google used to point to Mapquest for maps and Yahoo Finance for stock quotes before they substituted Google Maps and Google Finance? Google's favor turned Wikipedia into the world's leading reference source, but a few algorithm tweaks would easily send that torrent of Google SEO traffic elsewhere. Mr. Lessig says that, for the moment, we take comfort from the fact that Google has been led by "good guys." But then he asks: "Why do we expect them to be good guys from now until the end of time?"
Mr. Auletta notes that many successful companies have appeared "impregnable"—until they didn't. IBM once had a 70% share of the massive mainframe computer market. Then came antitrust action and the personal computer. A company expanding into as many arenas as Google is will almost certainly "wake up the bears," as Verizon Chairman and CEO Ivan Seidenberg puts it.
Google faces challenges on multiple fronts, including the real-time Web (where users can access information the instant it's published). Of most concern are the more than 800 million global users on social networks—where much of the information is unavailable to Google. In some parts of the world—for instance, China, South Korea and Russia—Google is even the underdog, trailing such search engines as Baidu, Naver and Yandex. Microsoft remains a formidable competitor, with a newly invigorated search strategy. And of course, given Google's increasing market power, regulatory intervention may be lurking, although perhaps not anytime soon in the U.S., where the company is very friendly with the current administration. Perhaps the greatest risk, as entrepreneur Yossi Vardi notes, is the "hubris" that often afflicts wildly successful companies.
Problems for Google might lie beyond the horizon, but the immediate future promises more success: Google is well-positioned for the transition to "cloud computing," where software and data are stored online rather than on personal computers. Mr. Schmidt says that cloud computing will be "the defining technological shift of our generation." Accordingly, Google's greatest value creation probably still lies ahead.
In "Googled," New Yorker writer Ken Auletta tells the familiar story of the company's rapid transformation from Silicon Valley start-up to global corporation. As expected, we hear about the young Rollerblading employees at Google's Mountain View, Calif., headquarters, with its massage rooms, pool tables and free meals. But thanks to the unusual degree of access that the company granted the author—and thanks to his sharp eye—"Googled" also presents interesting new details. The book describes, for instance, Google's close relationship with former Vice President Al Gore—during a meeting with him, back in his hirsute phase after leaving office, Google executives showed their solidarity by donning fake beards.
While the story of Google's creation and evolution still holds interest, what fascinates is the company's growing power and expanding horizons. Mr. Auletta observes that the "Google wave has crashed into entire industries: advertising, newspapers, book publishing, television, telephones, movies, software or hardware makers." This impact has forced companies to make difficult choices. One response has been to try to emulate Google, redrawing business plans to emphasize online advertising—although few other companies have so far managed to build a large, profitable business from it.
Google's focus on advertising has led the company to maximize usage by giving away most of its services. For companies selling similar products—like navigation systems—Google's approach is alarming. And even its partners are wary. Martin Sorrell, the chief executive of the advertising giant WPP, describes Google as a "frenemy"—a valuable ally and formidable competitor. Advertising firms worry about being "disintermediated" by Google. Content providers appreciate the traffic that Google sends their way but worry about the erosion of their franchises by aggregation that emphasizes Google's brand, not their own. Some businesses that rely on Google to generate both their traffic and their revenue risk becoming the chimp in the survival maxim "eat what the monkey eats and then eat the monkey."
In contrast to all this corporate anxiety, consumers so far have been upbeat about the extraordinary power that Google wields. As Mr. Brin explains, Google's importance in people's lives comes from "determining what information they get to look at." Lawrence Lessig, who was an expert in the Microsoft antitrust case (and is now a professor at Harvard Law School), tells Mr. Auletta that Google will soon be more powerful than Microsoft ever was, since primacy in search gives the company unprecedented control over commerce and content.
Remember when Google used to point to Mapquest for maps and Yahoo Finance for stock quotes before they substituted Google Maps and Google Finance? Google's favor turned Wikipedia into the world's leading reference source, but a few algorithm tweaks would easily send that torrent of Google SEO traffic elsewhere. Mr. Lessig says that, for the moment, we take comfort from the fact that Google has been led by "good guys." But then he asks: "Why do we expect them to be good guys from now until the end of time?"
Mr. Auletta notes that many successful companies have appeared "impregnable"—until they didn't. IBM once had a 70% share of the massive mainframe computer market. Then came antitrust action and the personal computer. A company expanding into as many arenas as Google is will almost certainly "wake up the bears," as Verizon Chairman and CEO Ivan Seidenberg puts it.
Google faces challenges on multiple fronts, including the real-time Web (where users can access information the instant it's published). Of most concern are the more than 800 million global users on social networks—where much of the information is unavailable to Google. In some parts of the world—for instance, China, South Korea and Russia—Google is even the underdog, trailing such search engines as Baidu, Naver and Yandex. Microsoft remains a formidable competitor, with a newly invigorated search strategy. And of course, given Google's increasing market power, regulatory intervention may be lurking, although perhaps not anytime soon in the U.S., where the company is very friendly with the current administration. Perhaps the greatest risk, as entrepreneur Yossi Vardi notes, is the "hubris" that often afflicts wildly successful companies.
Problems for Google might lie beyond the horizon, but the immediate future promises more success: Google is well-positioned for the transition to "cloud computing," where software and data are stored online rather than on personal computers. Mr. Schmidt says that cloud computing will be "the defining technological shift of our generation." Accordingly, Google's greatest value creation probably still lies ahead.
How NOT To Show Up In Google SERPs
from Media Buyer Planner
Rupert Murdoch is determined to change the way print content is treated on the web. In addition to being one of the first and largest media companies to plan a full-scale switch from free to paid content models for its newspapers, Murdoch is saying he will block News Corp content from being indexed by Google.The move will certainly significantly decrease by a large margin the amount of traffic that goes to News Corp.‘s news sites. Jonathan Miller, News Corp’s chief digital officer, says the company will survive both economically and audience-wise without Google driving traffic to its sites.
News Corp. is expected to block Google’s access within months.
The issue involves the debate surrounding free versus paid content. Murdoch has made it clear for months that he believes free content online devalues the worth of the content. With that in mind, News Corp plans to stop offering its news sites for free, though Murdoch has said the company might not meet its own deadline of charging for content across all sites by the middle of next year. Murdoch’s company has clearly been at the forefront of the debate, and Murdoch expects a paid model to begin to be played out more and more often over the next two years.
News Corp, if it does indeed block Google’s access to its content, will be the first major media company to do so. “The traffic which comes in from Google SEO brings a consumer who more often than not reads one article and then leaves the site,” Miller says. “That is the least valuable traffic to us… the economic impact [of not having content indexed by Google] is not as great as you might think. You can survive without it.”Google, for its part, claims to send news organizations about 100,000 clicks every minute. “Publishers put their content on the web because they want it to be found,” said a spokesperson (via the Telegraph). “But if they tell us not to include it, we don’t.”
MSN Redesign Sneak Peek
Reuters
On November 4, Microsoft Corp. unveiled a preview of its most significant home page redesign in over a decade. The new MSN home page is designed to be the best home page on the Web, with powerful Bing search, the top news and hottest entertainment, and some of the most popular social networks -- all in a fresh new look. The new home page will deliver comprehensive local information from the new MSN local information offering, MSN Local Edition, also unveiled today. Beginning today, anyone can preview the new home page at http://preview.msn.com. The new home page will begin rolling out today and become widely available to U.S. customers early next year.Ninety percent of people surveyed find home pages such as MSN to be valuable, and they like the convenience of a comprehensive site.* Nearly 100 million people in the U.S. visit MSN every single month, and MSN added over 10 million new customers in the last year alone. However, today's sites often fall short of top customer needs and many haven't kept up with evolving trends. Extensive customer research highlights that people want less clutter and easier access to information and services they care about, including search services that help them make decisions easier and faster.
"Now is the time to clean up the mess on the Web -- people need less clutter and less hassle to find what matters most to them," said Erik Jorgensen, corporate vice president, Microsoft. "Microsoft is uniquely invested in search, media experiences and technical innovation. Combining these assets to deliver our new MSN home page is a tremendous win for customers and advertisers."
The clean, new MSN home page cuts through the clutter with 50 percent fewer links than the previous home page and a simplified navigation across news, entertainment, sports, money and lifestyle. The new MSN home page also embraces the latest customer trends by deeply integrating powerful search from Bing and providing easy access to Facebook, Twitter and Windows Live services, comprehensive local information and in-line video. Sophisticated technology powers the home page to deliver personally relevant information, and improved performance satisfies people's need for speed.
Google Dashboard Gives Some Insight As To Data Company Stores
LA Times
Google has unveiled its 'Google Dashboard' service, a page where users can get a sense of the data the company stores about them in any of 23 different Google-run services.
As questions about how the company uses consumer data continue to mount, Google has tried to answer those concerns by allowing users a clearer view into how their data is stored and used by programs like Gmail, YouTube and Google Docs.
"We think of this as a great step towards giving people transparency and control over their data, and we hope this helps shape the way the industry thinks about these issues," Alma Whitten, a Google engineer who works on Privacy and Security, said in a statement.
The Dashboard is essentially a page listing each service that stores data, along with which types of data it stores. Rather than allowing users to control and edit their data directly from the page, however, Dashboard refers users to other pre-existing settings pages. In that sense, the Dashboard is a consolidation of existing functions, not a new set of tools by which users can control their data.
And though much of the concern about Google's data storage revolves around precisely how and what the company does to analyze and profit from user information, and incorporate that information into the system of Google SEO, the Dashboard offers little insight into those domains. It does not specify which services keep user data, or for how long. Neither does it alert users that, for instance, their Web search histories and e-mails are constantly scanned for the purposes of selling products to them and others.
But users should expect that most or all of their data could be used for advertising, Google said. "To most folks, I think that there is a general expectation that even when we launch a product that doesn't have a clear business model associated with it, there's a possibility that advertising could be associated in some way," said Shuman Ghosemajumder, Google's business product manager for Trust & Safety.
Google said it would continue to add features to the Dashboard, and that services that were not included in the first iteration -- Analytics, AdWords, AdSense, and Book Search among others -- would be added in later versions.
As questions about how the company uses consumer data continue to mount, Google has tried to answer those concerns by allowing users a clearer view into how their data is stored and used by programs like Gmail, YouTube and Google Docs.
"We think of this as a great step towards giving people transparency and control over their data, and we hope this helps shape the way the industry thinks about these issues," Alma Whitten, a Google engineer who works on Privacy and Security, said in a statement.
The Dashboard is essentially a page listing each service that stores data, along with which types of data it stores. Rather than allowing users to control and edit their data directly from the page, however, Dashboard refers users to other pre-existing settings pages. In that sense, the Dashboard is a consolidation of existing functions, not a new set of tools by which users can control their data.
And though much of the concern about Google's data storage revolves around precisely how and what the company does to analyze and profit from user information, and incorporate that information into the system of Google SEO, the Dashboard offers little insight into those domains. It does not specify which services keep user data, or for how long. Neither does it alert users that, for instance, their Web search histories and e-mails are constantly scanned for the purposes of selling products to them and others.
But users should expect that most or all of their data could be used for advertising, Google said. "To most folks, I think that there is a general expectation that even when we launch a product that doesn't have a clear business model associated with it, there's a possibility that advertising could be associated in some way," said Shuman Ghosemajumder, Google's business product manager for Trust & Safety.
Google said it would continue to add features to the Dashboard, and that services that were not included in the first iteration -- Analytics, AdWords, AdSense, and Book Search among others -- would be added in later versions.
Opinion: Senators Orrin Hatch and Jim DeMint Voice Concern Over Possible FCC Net Regulations
from the Wall Street Journal
Chairman Julius Genachowski sees the
need for Internet Regulation
Last week, Chairman Julius Genachowski and his Democratic colleagues on the Federal Communications Commission (FCC) began rewriting federal regulations governing the Internet and broadband communications. According to Mr. Genachowski, the Internet today is a failed market in which neither entrepreneurs nor consumers are treated fairly.
If this is news to you (especially if you're reading this on a Web site while simultaneously uploading photos to your family blog and streaming music from an online radio station), you're not alone.
The Internet is one of the only aspects of our economy and national life free from government regulation. Mr. Genachowski and his colleagues see this as a bad thing. We disagree.
If there is a perfect encapsulation of the success of Washington's current hands-off approach to the Internet, it's the popular "There's an app for that" advertising campaign. Since the latest introduction of smart phones like Apple's iPhone and Blackberry's Curve, independent software developers have created tens of thousands of applications for mobile devices. There are apps for gamers, bloggers, couch potatoes, foodies, health-care providers and every other niche market you can imagine. These applications have improved people's lives and satisfied consumer demand.
And it has all happened without a Washington politician or bureaucrat moving a muscle.
This isn't a coincidence. If the Internet were invented by a politician or worse, managed by bureaucrats, cell phones would still look like bricks and the information superhighway would still be a dirt road. If there is any sector of our economy where competition is so fierce and where the pace of innovation is so rapid that government interference would only get in the way, it is the Internet and telecommunications market.
The Internet has grown because of a virtuous and mutually beneficial circle: network operators provide ever-increasing speed and bandwidth; content providers one-up each other with game-changing innovations; and consumers adapt and adopt at lightning speed.
Ten years ago, we effectively had no broadband marketplace. Dial-up Internet was common, but not ubiquitous. Consumers had a choice of service providers, but they were typically confined to walled gardens of preselected or preferred content. The broadband revolution led us out of that desert. Instead of dog-paddling, we could surf the net, choosing between broadband service offered by traditional phone and cable companies and, now, wireless companies as well.
Compare that to the last decade of success at government dominated companies like Fannie Mae, Freddie Mac, GM or Chrysler.
Yet despite an overwhelming record of innovation, and customer satisfaction, Washington wants to replace the judgment of consumers with that of politicians and bureaucrats.
Net neutrality may sound like fairness but it is actually the opposite. Bandwidth is finite—like the finite number of lanes on a highway—and network providers must innovate in order to accommodate the burgeoning traffic. As they invest billions of private dollars in new and improved networks to accomodate demand for such net tools as business VoIP service, they should rightly expect to set prices and manage those networks as they see fit.
If the FCC takes control of the Internet, they will in effect be regulating how consumers use their computers, and we'll have the inevitable result of all poorly designed regulations: business decisions prejudiced by politicians and political decisions prejudiced by corporations. Keep in mind, we're talking about the most competitive, efficient and consumer-driven industry in the global economy.
Is it reasonable to believe committees of suits in Washington—with hearings and markup meetings and regulatory comment periods—can keep up with the competitive pressures of Google SEO and the Internet economy?
To ask the question is to answer it. There is a time and place for federal economic regulation, but the middle of a recession is not the time, and the Internet is certainly not the place.
If this is news to you (especially if you're reading this on a Web site while simultaneously uploading photos to your family blog and streaming music from an online radio station), you're not alone.
The Internet is one of the only aspects of our economy and national life free from government regulation. Mr. Genachowski and his colleagues see this as a bad thing. We disagree.
If there is a perfect encapsulation of the success of Washington's current hands-off approach to the Internet, it's the popular "There's an app for that" advertising campaign. Since the latest introduction of smart phones like Apple's iPhone and Blackberry's Curve, independent software developers have created tens of thousands of applications for mobile devices. There are apps for gamers, bloggers, couch potatoes, foodies, health-care providers and every other niche market you can imagine. These applications have improved people's lives and satisfied consumer demand.
And it has all happened without a Washington politician or bureaucrat moving a muscle.
This isn't a coincidence. If the Internet were invented by a politician or worse, managed by bureaucrats, cell phones would still look like bricks and the information superhighway would still be a dirt road. If there is any sector of our economy where competition is so fierce and where the pace of innovation is so rapid that government interference would only get in the way, it is the Internet and telecommunications market.
The Internet has grown because of a virtuous and mutually beneficial circle: network operators provide ever-increasing speed and bandwidth; content providers one-up each other with game-changing innovations; and consumers adapt and adopt at lightning speed.
Ten years ago, we effectively had no broadband marketplace. Dial-up Internet was common, but not ubiquitous. Consumers had a choice of service providers, but they were typically confined to walled gardens of preselected or preferred content. The broadband revolution led us out of that desert. Instead of dog-paddling, we could surf the net, choosing between broadband service offered by traditional phone and cable companies and, now, wireless companies as well.
Compare that to the last decade of success at government dominated companies like Fannie Mae, Freddie Mac, GM or Chrysler.
Yet despite an overwhelming record of innovation, and customer satisfaction, Washington wants to replace the judgment of consumers with that of politicians and bureaucrats.
Net neutrality may sound like fairness but it is actually the opposite. Bandwidth is finite—like the finite number of lanes on a highway—and network providers must innovate in order to accommodate the burgeoning traffic. As they invest billions of private dollars in new and improved networks to accomodate demand for such net tools as business VoIP service, they should rightly expect to set prices and manage those networks as they see fit.
If the FCC takes control of the Internet, they will in effect be regulating how consumers use their computers, and we'll have the inevitable result of all poorly designed regulations: business decisions prejudiced by politicians and political decisions prejudiced by corporations. Keep in mind, we're talking about the most competitive, efficient and consumer-driven industry in the global economy.
Is it reasonable to believe committees of suits in Washington—with hearings and markup meetings and regulatory comment periods—can keep up with the competitive pressures of Google SEO and the Internet economy?
To ask the question is to answer it. There is a time and place for federal economic regulation, but the middle of a recession is not the time, and the Internet is certainly not the place.
Web Advertising Making A Comeback
From Sun-Sentinel
After bogging down in the recession, Internet advertising is regaining the momentum that has made it the decade's most disruptive marketing machine.
The signs of an online revival are emerging even while advertising in print and broadcasts remain in a slump that has triggered mass layoffs, pay cuts and other upheaval.
Companies seem reluctant to spend on elaborate online campaigns, such as the highly visual display ads on Yahoo.com, partly because they tend to be more expensive and not as well-aimed as search ads. The reticence is the main reason Yahoo reported its third-consecutive quarterly decline in ad sales Tuesday. Yahoo's ad revenue fell 12 percent after declining 13 percent in the first half of the year.
Even so, Yahoo isn't being hit as badly as newspaper publishers, and Google SEO is as important as ever.
The signs of an online revival are emerging even while advertising in print and broadcasts remain in a slump that has triggered mass layoffs, pay cuts and other upheaval.
Companies seem reluctant to spend on elaborate online campaigns, such as the highly visual display ads on Yahoo.com, partly because they tend to be more expensive and not as well-aimed as search ads. The reticence is the main reason Yahoo reported its third-consecutive quarterly decline in ad sales Tuesday. Yahoo's ad revenue fell 12 percent after declining 13 percent in the first half of the year.
Even so, Yahoo isn't being hit as badly as newspaper publishers, and Google SEO is as important as ever.
Internet advertising was just about the only bright spot in the third-quarter reports of newspaper publishers Gannett Co. and McClatchy Co. Meanwhile the companies are dealing with steep declines in print ads — an imbalance most analysts predict will take years to address.
The reality is that much of the advertising in long-established media, particularly in the classified sections of newspapers, will never rebound to pre-recession levels, said Lauren Rich Fine, a longtime media analyst who is now a professor at Kent State University.
That grim outlook contrasts with the fact that advertisers are allocating more of their budgets to the Web. Rates are less expensive, and the returns on online ad investments are easier to quantify.
These trends will give Internet advertising 19 percent, or nearly $87 billion, of the worldwide ad market in 2013, up from just 4 percent, or about $18 billion, in 2004, according to PricewaterhouseCoopers and Wilkofsky Gruen Associates.
That would make the Internet the third-largest marketing medium, and search engine optimization one of the most important investments a company can now make in its future. Television is expected to remain on top, with $168 billion, or 36 percent of the global ad market, down from 35 percent in 2004. Newspapers would still be No. 2, but their $92 billion in advertising revenue is projected to account for 20 percent of the global ad market, down from 28 percent in 2004.
For now, though, some types of Internet advertising — real estate, travel and help-wanted, in particular — remain in the funk they fell into in the first half of the year, when U.S. ad revenue on the Web fell 5 percent. (That was still far better than the 12 percent to 29 percent declines suffered by U.S. newspapers, radio stations and television broadcasters.)
The most compelling evidence for an online recovery is being made by Google Inc., whose search engine powers an online network that has grown from $411 million in worldwide ad revenue in 2002 to more than $22 billion annually now. The company's ad revenue rose 8 percent in the third quarter, the fastest pace so far this year, and Google's executives indicated they are gearing up for even more rapid growth in the months ahead.
The greater flexibility online makes it easier to gauge the mood of consumers by buying Internet search ads before ramping up spending in other areas, Fine said.
"I think a lot of (advertisers) are experimenting right now, hoping they can stimulate a little more demand."
Carl Icahn, Yahoo Board Split Amicably
From USA Today
Activist investor Carl Icahn has decided his work is done at Yahoo after muscling his way on to the slumping Internet company's board nearly 15 months ago.
In a resignation letter Friday, Icahn said he felt like it was time to leave Yahoo (YHOO) so he could spend more time on his investments in other companies.
"I don't believe that it is necessary at this time to have an activist on the board of Yahoo and currently my attention is focused on other matters," Icahn wrote.
Icahn, an outspoken billionaire, spent several months last year denigrating Yahoo co-founder Jerry Yang and the rest of the company's board after Yahoo turned down an opportunity to sell to Microsoft for $47.5 billion, or $33 a share.
That snub still looks like an expensive mistake, with Yahoo shares closing Friday at $17.22.
Icahn struck a truce with Yahoo to get on the board in August 2008 and he is apparently leaving on an amicable note.
In his letter, Icahn praised Yahoo's current chief executive, Carol Bartz, saying she is "doing a great job." Bartz replaced Yang as CEO nine months ago.
Icahn also applauded Yahoo's decision three months ago to hire Microsoft to provide its search results in the United States for the next decade. It's a partnership that Icahn tried to bring together while he was still seeking to get Yang fired. The proposed alliance between Yahoo and Microsoft still requires regulatory approval.
Yahoo, which is based in Sunnyvale, Calif., also had kind words for Icahn, saying it is "grateful for his active role in shaping the future" of the company.
A Yahoo spokeswoman said there are no immediate plans to fill Icahn's seat on the board. Another director, Maggie Wilderotter, plans to step aside at the end of the year.
After Wilderotter's departure, Yahoo will be left with 10 directors, including Yang. Two of other directors, John Chapple and Frank Biondi, joined the board as Icahn's allies.
Icahn remains one of Yahoo's largest shareholders with a 4.5% stake that is currently worth slightly more than $1 billion. He and his investment affiliates spent $1.8 billion accumulating a 5.5% stake last year, but whittled the holdings two months ago by selling 12.7 million shares.
His resignation letter gave no indication whether he plans to sell more of his Yahoo stock now that he has left the board.
Yahoo's fortunes have been sliding for the past three years as Google SEO widened its lead over Yahoo SEO search market and people began spending more time at other popular online hangouts such as Facebook.
Earlier this week, the company announced that its third-quarter earnings more than tripled as cost cutting helped to offset a 12% decline in revenue. The revenue erosion wasn't quite as bad as earlier this year, raising hopes that the company will fare better as the U.S. economy pulls out of its worst recession in 70 years.
In a resignation letter Friday, Icahn said he felt like it was time to leave Yahoo (YHOO) so he could spend more time on his investments in other companies.
"I don't believe that it is necessary at this time to have an activist on the board of Yahoo and currently my attention is focused on other matters," Icahn wrote.
Icahn, an outspoken billionaire, spent several months last year denigrating Yahoo co-founder Jerry Yang and the rest of the company's board after Yahoo turned down an opportunity to sell to Microsoft for $47.5 billion, or $33 a share.
That snub still looks like an expensive mistake, with Yahoo shares closing Friday at $17.22.
Icahn struck a truce with Yahoo to get on the board in August 2008 and he is apparently leaving on an amicable note.In his letter, Icahn praised Yahoo's current chief executive, Carol Bartz, saying she is "doing a great job." Bartz replaced Yang as CEO nine months ago.
Icahn also applauded Yahoo's decision three months ago to hire Microsoft to provide its search results in the United States for the next decade. It's a partnership that Icahn tried to bring together while he was still seeking to get Yang fired. The proposed alliance between Yahoo and Microsoft still requires regulatory approval.
Yahoo, which is based in Sunnyvale, Calif., also had kind words for Icahn, saying it is "grateful for his active role in shaping the future" of the company.
A Yahoo spokeswoman said there are no immediate plans to fill Icahn's seat on the board. Another director, Maggie Wilderotter, plans to step aside at the end of the year.
After Wilderotter's departure, Yahoo will be left with 10 directors, including Yang. Two of other directors, John Chapple and Frank Biondi, joined the board as Icahn's allies.
Icahn remains one of Yahoo's largest shareholders with a 4.5% stake that is currently worth slightly more than $1 billion. He and his investment affiliates spent $1.8 billion accumulating a 5.5% stake last year, but whittled the holdings two months ago by selling 12.7 million shares.
His resignation letter gave no indication whether he plans to sell more of his Yahoo stock now that he has left the board.
Yahoo's fortunes have been sliding for the past three years as Google SEO widened its lead over Yahoo SEO search market and people began spending more time at other popular online hangouts such as Facebook.
Earlier this week, the company announced that its third-quarter earnings more than tripled as cost cutting helped to offset a 12% decline in revenue. The revenue erosion wasn't quite as bad as earlier this year, raising hopes that the company will fare better as the U.S. economy pulls out of its worst recession in 70 years.
Subscribe to:
Posts (Atom)
