Organic SEO Blog

231-922-9460 • Contact UsFree SEO Site Audit

Friday, December 30, 2011

New York Times Email Disaster to Millions

Story first appeared in the Associated Press.
The New York Times accidentally sends an email to millions offering a 50 percent discount.

In today's digital age, it's easy to send out an email by mistake — even for a company that's in the business of communication.

The New York Times thought it was sending an email to a few hundred people who had recently canceled subscriptions, offering them a 50 percent discount for 16 weeks to lure them back.

Instead, Wednesday's offer went to 8.6 million email addresses of people who had given them to the Times.
That was the first mistake. The second came when the Times tweeted this: "If you received an email today about canceling your NYT subscription, ignore it. It's not from us."

But the Times did send the original email.

This email should have been sent to a very small number of subscribers, but instead was sent to a vast distribution list made up of people who had previously provided their email address to The New York Times. The NYT said they regret the error.

The damage had already been done, however.

Many people called or wrote in. The newspaper initially honored the discount, even to people who were already paying full price and had no plans to cancel. Murphy said the newspaper stopped giving out discounts to people who received the email in error by early afternoon. She did not say how much the gaffe cost the company or specify how many people contacted the newspaper.

A parody Twitter account called (at)NYTSpam amassed 152 followers by Wednesday afternoon by making fun of the slip-up. The account's description of itself says: "Parody account. Not affiliated with (at)NYTimes or actual spammers -- just sick of bad digital strategy."

The newspaper has made big strides in raising revenue from digital subscriptions. It says it has gained 324,000 digital subscribers since restricting full online access to paying subscribers in March.

Friday, December 09, 2011

Google Receives AdMeld Aquisition Approval

Story first appeared in USA TODAY.
The Justice Department approved Google's acquisition of online advertising service Admeld after concluding the deal wouldn't diminish competition in one of the Internet's most lucrative marketing niches.

The decision announced Friday clears the way for Google (GOOG) to take control of Admeld six months after the companies agreed to the deal. Google said it plans to take control of Admeld within the next few days, although the two companies' products will remain separate for a while longer.

It's the fourth time since 2007 that that the U.S. government has taken a close look at a Google acquisition to determine if it would stifle competition or drive up prices. Google has gained regulatory approval in each instance. In 2008, though, Google backed out of a proposed partnership with Yahoo (YHOO) to avoid a legal battle with the Justice Department.

The Justice Department is still reviewing Google's proposed takeover of cell phone maker Motorola Mobility Holdings (MMI). That $12.5 billion deal is the biggest in Google's 13-year history.

The Federal Trade Commission is in the midst of a broader inquiry into whether Google has been abusing its dominance of Internet search to make it harder for people to find rival services and apply pressure on advertisers to pay higher prices. Google has consistently predicted that investigation will be resolved in its favor.

Google hasn't disclosed how much it is paying for Admeld, a New York company that works with websites to help them figure out how to make the most money from the amount of space they have available for display ads. It's a steadily growing field of advertising that emphasizes photos, video and illustrations instead of Google's specialty of distributing text-based commercial links alongside search results.

The Justice Department said that privately held Admeld, formed in 2007, raised about $30 million in 2010 to help fund its operations.

Google generated revenue of about $29 billion last year and analysts expect it to surpass $38 billion in revenue this year. Most of Google's revenue still comes from search advertising.

In an attempt to diversify beyond search advertising, Google bought DoubleClick for $3.2 billion in 2008. That deal is turning display advertising into a major moneymaker for Google, but the company's market share in the segment still lags behind Facebook and Yahoo, according to the research firm eMarketer Inc.

That apparently helped sway the Justice Department to approve the Admeld deal.

Wednesday, November 23, 2011

The Spread of Malicious Internet Ads

Story first appeared in USA TODAY.
The online-advertising industry is scrambling to quell a long-standing problem that has taken a turn for the worse: the spread of malicious ads on the Internet's top commercial websites.

Several new twists have made so-called malvertisements a fast-rising threat to consumers — and a big headache for publishers, advertisers and ad networks, say technologists and security researchers.

The spread of infected online ads has spiked tenfold over the past year, according to research disclosed by security intelligence firm RiskIQ at a recent Online Trust Alliance conference in Washington, D.C.

RiskIQ documented a peak of 14,694 occurences of malvertisements in May of this year, up from 1,533 in May 2010. Each corrupted ad could have infected the PCs of thousands or millions of website visitors, based on how long the ad ran, says Elias Manousos, CEO of RiskIQ.

Organized crime gangs have streamlined the process of sneaking viral ads into the distribution system run by advertising networks, causing billions of tainted ad impressions to appear on the top 500 websites over the past 12 months, say technologists and security researchers.

Website security firm Armorize recently discovered criminals selling tutorials, tool kits and ad placement services to anyone who wants to get into the malvertising game. "There is a whole ecosystem designed to do this," says Matt Huang, Armorize's chief operating officer.

A recent rash of infections have been triggering bogus security warnings, followed by an offer for fake antivirus protection.

Last month,, a site that measures home broadband connection speeds, began displaying legit ads carrying instructions to load pitches for Security Sphere 2012. Simply navigating to the site launched the promos, which locked up the visitor's PC until he or she purchased worthless "protection" for $35.

Doug Suttles, chief operating officer of Web diagnostics firm Ookla, SpeedTest's parent, says his engineers spotted the attack and cleaned it up within three hours. The criminals, in this case, pioneered a novel technique. They corrupted legit advertisements as they arrived in the ad-handling program, called OpenX, used by the SpeedTest site.

However, tens of thousands of other websites that use the free OpenX ad-handling platform are wide open to this new type of attack, says Armorize's Huang.

In another twist, consumers bedeviled by bogus anti-virus pitches have started bad-mouthing websites they believe triggered the fake promos. Armorize has documented numerous consumer complaints that have gone viral on Twitter and other social networks, causing a drop in visits to the sites in question.

Some ad networks have begun participating in a working group discussing "information-sharing about malvertisers and their ads," says Steve Sullivan, the Interactive Advertising Board's vice president of digital supply chain solutions.

The Online Publishers Association, the industry group of major website publishers, has yet to closely examine malvertising. Obviously, stuff like this is disconcerting to the industry, says Pam Horan, OPA's president. They haven't done any research in this area, and she has not specifically heard anything from the members about this.

Even so, validating ads has become a major conundrum. Web publishers trust the ad networks to continually rotate ads to their Web pages. Meanwhile, the big ad networks, such as Google, Adobe, Microsoft and Yahoo, use automation to pull ads into rotation from a series of smaller networks and agencies.

Malvertisements are also used to spread stealthy infections that quietly take full control of the victim's PC, which is then used to steal data, probe deeper into corporate networks and pilfer from online financial accounts.

Consumers can protect themselves by making sure anti-virus programs and all updates for their Web browsers and popular applications, especially Adobe Flash and Adobe PDF, are current. Consumers who want to protect themselves further can use browser plug-ins, such as NoScript and AdBlock, that block all online ads.

Craig Spiezle, the Online Trust Association's executive director, says publishers, advertisers and the ad networks realize what's at stake.

The good news there is growing interest of some of the key stakeholders — including Yahoo, Microsoft and Google — on the need to employ countermeasures. It's clear that validating the ads everyone depends on is a shared responsibility. If consumers don't trust ads, they may not go to the site, or they'll start running ad blockers, and that will compromise everyone's ability to monetize.

Amazon Launches Digital Book Lending Library

Story first appeared in the Wall Street Journal.

As the e-reader and tablet wars heat up, Inc. is launching a digital-book lending library that will be available only to owners of its Kindle and Kindle Fire devices who are also subscribers to its Amazon Prime program

The program will be limited, at least at the beginning, in what is available to borrow. Amazon will initially offer slightly more than 5,000 titles in the library, including more than 100 current and former national bestsellers, such as Stephen R. Covey's "The 7 Habits of Highly Effective People."

None of the six largest publishers in the U.S. is participating. Several senior publishing executives said recently they were concerned that a digital-lending program of the sort contemplated by Amazon would harm future sales of their older titles or damage ties to other book retailers.

Moreover, Amazon will restrict borrowers to one title at a time, one per month. Borrowers can keep a book for as long as they like, but when they borrow a new title, the previously borrowed book automatically disappears from their device.

The new program, called Kindle Owners' Lending Library, cannot be accessed via apps on other devices, which means it won't work on Apple Inc.'s iPad or iPhone, even though people can read Kindle books on both devices. This restriction is intended to drive Kindle device sales, says Amazon.

The program, which is effective Thursday, comes a few weeks before Amazon ships the Kindle Fire tablet on Nov. 15, which is a direct competitor with the iPad.

The lending library reflects a broader effort by Amazon to lure consumers to Prime, a service that costs $79 a year.

Amazon Prime began as a membership plan to offer package-shipping perks. Then, earlier this year Prime added a video-streaming feature to the subscription. Nearly 13,000 movies and TV shows are now available under the streaming feature.

Amazon, the market leader in e-readers, made Kindle titles available to libraries beginning in September and libraries said the impact already has been significant.

At the Seattle public-library system, e-book borrowing rose 32% in the month after Kindle books became available, said Seattle's electronic-resources librarian Kirk Blankenship. E-book borrowing had typically been rising 10% or 15% a month, he said.

Mr. Blankenship said he isn't worried about Amazon starting its own lending service.  He said there's a lot of people that can't afford Amazon Prime, so we also want to be a resource for people looking for other things beyond the best-seller list.

Russell Grandinetti, vice president for Kindle content, said the vast majority of participating publishers were receiving a flat fee for their titles, while a more limited group is being paid the wholesale price for each title that is borrowed. For those publishers, we're treating each book borrowed as a sale, he said.

Despite concerns among major publishers about the potential impact on sales of the program, some see it as a positive. Arthur Klebanoff, chief executive of RosettaBooks LLC, an e-book publisher that is making Mr. Covey's title available under a flat-fee arrangement, said he did so because he believes it will spur sales of Mr. Covey's other works.

What is Yahoo Doing!

Story first appeared in USA TODAY.

Even as Yahoo rolls out a fresh batch of social and mobile products and services, its strategic moves continue to baffle investors and analysts alike.

And at least one major shareholder isn't happy. Hedge fund manager Daniel Loeb, in a letter to Yahoo's board on Friday, pushed for the ouster of director and company co-founder Jerry Yang. Loeb, who owns a 5.2% slice of Yahoo through a fund called Third Point, asserts that Yang has too many conflicts of interest.

Chief among them is Loeb's contention that Yang is in discussions with several buyout firms about joining forces to acquire a controlling stake in Yahoo. Loeb's letter names the Blackstone Group, KKR, Providence Equity Partners, Silver Lake Partners and Texas Pacific Group as firms talking to Yang, who co-founded Yahoo in 1995 with David Filo.

Yang had no comment.

The shareholder hullabaloo is just the latest distraction for the scuffling Internet pioneer. Though the online display ad market is growing in the U.S.— especially in the sale of targeted ads based on unique data — Yahoo badly lags behind Facebook and Google. At the same time, Yahoo made "no strides forward in the dominant technology trends — social, mobile and cloud. And, if anything, they've lost even more ground," says Jonathan Yarmis, an independent tech analyst.

In September, Yahoo booted Carol Bartz as CEO after she failed to reverse its flagging fortunes despite 2½ years on the job. Then the board hired investment bankers Goldman Sachs Group and Allen & Co. to help the company explore its strategic options. In recent months, Yahoo has padded its editorial ranks, stealing key execs from CBS Interactive. Last week, the company bought online ad network Interclick for $270 million and bolstered its mobile and social efforts.

The confluence of seemingly conflicting strategies has confounded followers of the Internet company, inspiring the latest parlor game in Silicon Valley: What, exactly, is Yahoo's end game?

Yahoo's answer is that the board is exploring a wide range of options. The company says they can assure all Yahoo shareholders that whatever the outcome of the strategic review process may be, it will serve the best interests of all the company's shareholders.

In a Sept. 23 memo to employees, Yang, Filo and Yahoo Chairman Roy Bostock said the search is on for a full-time CEO and that company advisers are fielding offers from potential business partners. USA TODAY obtained a copy of the memo.

In the weeks since Bartz was bounced, Yahoo has had a flurry of activity under interim CEO Tim Morse. Last month, it announced a content-sharing and distribution partnership with ABC News and rolled out more than a dozen original Web series featuring actors such as Morgan Spurlock and Judy Greer.

But the purchase of Interclick — which reaches more than 120 million unique users a month, according to market researcher ComScore — is a head-scratcher because Yahoo already owns ad network BlueLithium, which has not panned out, analysts say.

Yahoo executives are betting the addition of Interclick makes it a stronger company or a more attractive acquisition target, Lee reasons. However, he said, "it is odd Yahoo decided its best option was to buy rather than to build on top of what" it already has.

Potential bidders

Yet the saber rattling by private-equity firms and other buyout shops storming the gates of Yahoo is building pressure on management. The company needs to move fast to prove its relevance or be sold at a bargain-basement discount. The problem: Yahoo isn't growing like it used to. And its prospects in the face of competition aren't great, either. Still, it's profitable and boasts a massive audience of 700 million users worldwide.

Much of the problem is leadership. Yahoo still doesn't have a permanent CEO. And then-CEO Yang's resistance to Microsoft's offer to buy the company in 2008 for $47.5 billion — double its current market value — has landed him in the doghouse. Yahoo's board ultimately rejected the bid.

Should Yahoo opt to sell, a long list of prospective suitors possibly awaits. Even Google's name pops up, although Alibaba Group, a Chinese Internet company partially owned by Yahoo, is the only bidder that has publicly declared its interest in mounting a takeover attempt.

Google and Yahoo declined to comment.

Others reported to be mulling an offer include Silicon Valley venture-capital firm Andreessen Horowitz and buyout firms KKR, the Blackstone Group and Silver Lake Partners.

Microsoft has been reported to be weighing whether to help finance a Silver Lake bid.

It would be folly for Microsoft, sitting on a heap of cash (more than $40 billion) to make another go at Yahoo, cautions independent analyst Damon Vickers. "These are two companies slowly fading away," he says. "If they merge, it would be like two cinder blocks sinking in water."

Despite its well-documented problems — three CEOs in a few years, for starters — Yahoo's audience of some 700 million people worldwide and its stakes in prized assets such as Alibaba and Yahoo Japan make it an attractive takeover candidate, says David Hallerman, an analyst at eMarketer.

By acquiring Yahoo, Google or Microsoft could eliminate a competitor and pick up valuable pieces from Yahoo in the process, says Carl Tobias, a professor at the University of Richmond's School of Law. But Google and Microsoft face antitrust scrutiny if they pursue Yahoo, he adds.

The takeover talk has helped lift Yahoo's stock price by more than 30% since Bartz's departure. Yahoo's shares rose nearly 3%, to close at $15.69 Monday.

Still, it is unclear if Yahoo will put itself up for sale as it explores ways to appease shareholders. Many stockholders are frustrated with the company's declining revenue at a time when the overall Internet advertising market is growing.

Yahoo's profit and revenue slipped year-over-year during its third quarter. Profits were $293 million, or 23 cents a share, compared with $396 million, or 29 cents a share, in the year-ago period. Revenue was $1.07 billion, vs. $1.12 billion a year ago, but in line with Wall Street expectations.

What the future holds

Yahoo's travails aren't likely to go away as it increasingly faces competitive pressure from Facebook and Google for users and advertisers.

Searches on Yahoo, for instance, were up only 1% in its third quarter, while search page views slumped 3%, the company said.

That, in no small part, has adversely affected Yahoo's online advertising business. While Yahoo's annual revenue from display ads is expected to improve 15% to $1.86 billion in the U.S. in 2012, Facebook's is expected to soar 45% to $2.9 billion and Google's 58% to $1.82 billion, according to eMarketer.

Yahoo said it has agreed to extend the revenue-per-search guarantee in its partnership with Microsoft through March 2013.

Earlier this year, however, Yahoo admitted the two-year deal was taking longer than anticipated to pay off because of technical imperfections in the search-advertising system.

Yahoo is being squeezed by Google's dominance in search and Facebook's in delivering targeted advertising to its 800 million members. With these two monster competitors offering scale, relevance and the power of the social graph — and with AOL's new Devil ad unit slowly gaining traction — the room for Yahoo to grow dramatically is narrowing.

In that Sept. 23 memo to employees, Yang, Filo and Bostock acknowledge Yahoo needs to "accelerate innovation, reignite inspiration, and give our users what they want now — great content that is engaging and easy to use on any device and provide an experience in which they can participate and contribute."

Such strategy dovetails with the advice of several industry observers, including Don Dodge, a former Microsoft executive who closely follows Yahoo.

He suggests that Yahoo hire a "product-driven CEO" who focuses on customers and eschews business deals; hold onto valuable equity holdings in Yahoo Japan and Baidu; and concentrate on Yahoo strongholds, such as Yahoo Sports and Yahoo Finance.

Web Suffix Debate

Story first appeared in Bloomberg News.

A program to let companies acquire their own Web suffixes is failing to win over U.S. brand owners such as Procter & Gamble Co. and Hewlett- Packard Co. that don’t see a need to expand beyond .com.

P&G, the world’s largest consumer products company with more than 50 brands including Tide detergent, Pampers diapers and Crest toothpaste, won’t apply for new suffixes, said Paul Fox, a spokesman. HP, the biggest computer maker, considers the program costly and has no plans to take part, said Gary Elliott, vice president of global marketing.

The Internet Corporation for Assigned Names and Numbers, the nonprofit group managing the Web’s global address system under a U.S. Commerce Department contract, is preparing to consider almost any word in any language as a Web suffix, including company and brand names or terms such as .shopping or .nyc. The group will accept applications from Jan. 12 through April 12, 2012, for as many as 1,000 new suffixes a year. The application fee is $185,000 for each domain name.

Not one of 21 companies in the Standard & Poor’s 500 that Bloomberg informally surveyed in the past month said they plan to apply. Other responses ranged from still researching options to not commenting.

Six-Year Deliberation

Rod Beckstrom, the group’s chief executive officer, said the program isn’t for all companies when he told a meeting of the organization on Oct. 24 that “anyone who might be interested needs to do their own homework, develop a solid understanding of the program and then determine” whether a new name is worthwhile. “The clock is ticking,” he said.

The naming group, overseer of the Internet’s address system since 1998, currently manages 22 so-called generic top-level domains, including the commonly used .com, .org and .net. After six years of deliberation, the Marina del Ray, California-based group’s board voted June 20 to expand the number of those domains as a way to spur online innovation.

The expansion may foster competition in the domain sector, support new business models online and provide consumers with new ways to find products, according to an analysis prepared for the oversight group in June 2010.

The Commerce Department should delay the domain-name expansion to give businesses more time to assess the program, including brand and legal issues, the National Retail Federation wrote in an Oct. 21 letter to the agency.

‘Uncertainty Reigns’

 Mallory Duncan, general counsel of the Washington-based retailers group, said in an interview that with the application date just months away, there’s not time to think all this through.

The Commerce Department is reviewing the letter and plans to respond in a timely manner, Moira Vahey, a spokeswoman for the agency’s National Telecommunications and Information Administration, said in an e-mail.

The Association of National Advertisers, a Washington-based organization where HP’s Elliott serves as chairman, criticized the domain-name expansion as increasing costs for businesses and sowing confusion among consumers.

The association represents more than 400 companies including Bloomberg LP, the parent of Bloomberg News.

Canon Inc. and Hitachi Ltd. are among the few large companies that have expressed public interest in the new domains.

Watching Competitors

General Motors Co., the largest U.S. automaker, has “thoroughly evaluated” the domain-name program and is weighing its options, Tom Henderson, a spokesman, said in an e-mail. Wal- Mart Stores Inc., the world’s biggest retailer, is assessing the program, Ravi Jariwala, a spokesman, said in an interview.

Adobe Systems Inc., the largest maker of graphic-design software, is opposed to the “unnecessary, wholesale expansion of generic top-level domains and is very concerned it will cause confusion for consumers and increase the potential for online and consumer fraud,” John Travis, the company’s vice president of brand marketing, said in an e- mail. Even so, Travis said the company is still evaluating whether to apply for domains.

Companies may ultimately apply for domain names because they don’t know what their competitors are doing and the next application round hasn’t been announced, said Josh Bourne, managing partner at FairWinds Partners LLC, a domain-name consulting firm in Washington.

Competitive Risk

Brands are looking at the risk of being left behind. If all of your competitors are using their .brand or .keyword in marketing campaigns and you don’t have one, it may make you look out of touch, out of date.

Bourne is president of the Coalition Against Domain Name Abuse, a nonprofit group that has criticized the structure of the expansion, including the lack of a timeline for a second application round. The group’s members include Eli Lilly & Co., Morgan Stanley and Nike Inc.

Hewlett-Packard will use its website rather than “fracture our dollars” on new domains, Elliott said. He estimated the cost of operating a Web suffix may eventually reach $1.5 million, including legal and consulting fees, Web development and other costs for the Palo Alto, California-based company.

Procter & Gamble, based in Cincinnati, will “focus on our existing .com sites and other ways to connect with consumers,” Tonia Elrod, a spokeswoman, said in an e-mail.

The program requires resources that they would prefer to focus on building relationships with customers. P&G already operates a range of .com brand sites, including for razors and for toilet paper.

Contract Scrutinized

The U.S. companies join corporations in Europe such as Porsche AG, Vodafone Group Plc and Puma SE that have said they aren’t attracted to new suffixes.

The name oversight group is operating under a Commerce Department contract that expires in March. The agency is reviewing public comments on whether the terms should be amended and plans to open the contract for bidding this year.

The Commerce Department should include ethics and conflict- of- interest rules in a future contract to manage the domain-name system, Senator Ron Wyden, an Oregon Democrat, wrote in a September letter to the agency.

Two Washington-based government watchdogs, the Center for Responsive Politics and Public Citizen, have raised concerns about the departure of the naming group’s former chairman, Peter Dengate Thrush.

Dengate Thrush left the organization four days after the vote on domain-name expansion and within a month joined a London company called Top Level Domain Holdings Ltd., which intends to acquire Web suffixes created by the new plan and offer Internet registry services.

Fast Retailing Co Looking to Purchase Rival

Story first appeared in Bloomberg New.

Fast Retailing Co., Asia’s largest clothing chain, may buy a bigger rival in the U.S. or Europe after the yen’s advance to a postwar high against the dollar boosted the Japanese company’s purchasing power.

The yen strength and anemic stock markets make this a very good opportunity for M&A, Chief Executive Officer Tadashi Yanai, 62, said .  He added that it won’t be something small, but a company of equal size or bigger.”

The billionaire aims to take advantage of the yen’s climb to expand outside Japan, where an unexpectedly long summer damped demand for fall and winter clothing, contributing to a 12 percent decline in profit in the year through August. Fast Retailing opened two New York stores last month and aims to be the world’s top clothing retailer, targeting a sixfold jump in sales from last year to 5 trillion yen

($64 billion) by 2020.

If there is a chance to do M&A in the future, they are thinking of doing it. Yanai, who turned his father’s tailoring business into a company with a market value of 1.4 trillion yen, making him Japan’s second-richest person.

Fast Retailing, the second-biggest gainer on the Nikkei 225 Stock Average in the past five years, “does not need any brands” and isn’t considering companies such as Esprit Holdings Ltd., Yanai said.

Polo Ralph Lauren Corp. probably won’t agree to an acquisition, according to Yanai.

Overseas Sales

Fast Retailing has said it intends to boost overseas sales to be greater than domestic revenue by 2015 as it expands in China, Southeast Asia and the U.S., competing with Inditex SA’s Zara, Hennes & Mauritz AB, and Gap Inc. Sales at Uniqlo stores in Japan that have been open more than a year dropped for a third straight month in October.

Making purchases was one of the ways the company was “investing for the future,” Yanai said in September. He remains Fast Retailing’s biggest shareholder with a 22 percent stake, according to data compiled by Bloomberg.

Fast Retailing has gained about 26 percent in the past five years. In dollar terms, its market value has soared 90 percent. The stock fell

0.2 percent to 13,390 yen as of the 3 p.m. close of trading in Tokyo, paring its advance this year to 2.8 percent, compared with a 14 percent drop for the Nikkei 225 and a 17 percent slide for the broader Topix index.

May List Overseas

Yanai said the company may also list overseas since the Japanese equity market lacks growth. He didn’t give a timeframe for any share sales.

The yen on Oct. 31 hit a post-World War II high of 75.35 against the dollar before the government intervened in the currency markets. The Japanese currency traded at 78.24 to the dollar on Nov. 4.

Fast Retailing had 202 billion yen in cash and short- term investments in August, the highest level since at least 2002, according to data compiled by Bloomberg.

The company bought out apparel maker Link Theory in two transactions in 2009 for $371 million after purchasing a minority stake in 2004, according to data compiled by Bloomberg. That’s Fast Retailing’s biggest acquisition to date, the data show.

Profit Outlook

Sales will probably jump 18 percent to 965 billion yen in the fiscal year ending Aug. 31, the clothing retailer said Oct. 12 in a statement. Profit is likely to rise 31 percent to 71 billion yen in the fiscal year.

Fast Retailing’s overseas sales comprised 18 percent of last year’s 820 billion yen total, compared with a share of about 16 percent in the previous year, according to its annual reports.

Fast Retailing has spent more than $875 million on 22 deals since 2003, according to data compiled by Bloomberg. It acquired a stake in Nelson Finance, owner of the French brand Comptoir des Cotonniers, in 2005, according to its 2010 annual report. Fast Retailing bought a further 64 percent in the company for $192.5 million in 2006, according to data compiled by Bloomberg.

Princesse tam.tam

The clothing retailer also took control of French fashion brand Princesse tam.tam by buying 95 percent of Petit Vehicule for $83 million in 2005, the data show.

The company paid a median of 20.6 times earnings before interest and taxes on seven of its deals, according to data compiled by Bloomberg.

That compares with a median of 11.6 times EBIT for 78 transactions in the clothing retail sector in the same period, the data show.

Fast Retailing in August 2007 dropped out of the bidding for New York luxury chain Barneys as Dubai’s Istithmar PJSC offered $942 million, raising its offer twice to counter the Japanese retailer.

Yanai at the time said Fast Retailing would spend as much as 400 billion yen, or about $3.5 billion, on acquisitions to double annual sales to 1 trillion yen by 2010. The company announced deals worth more than $400 million in the period from August 2007 through the end of 2010 and reported sales of 815 trillion yen in its 2010 fiscal year, according to data compiled by Bloomberg.

Focusing on Uniqlo

“We no longer think there is a reason to buy Barneys,” Yanai said.

“Currently, we are mainly driving our Uniqlo business, so in that sense, there is no meaning to buy Barneys.”

Fast Retailing aims to build a global production system capable of manufacturing 5 billion articles of clothes yearly by 2020, it said in September.

Yanai, with an estimated wealth of $7.6 billion according to Forbes, quit his job selling kitchen items and men’s clothing at a Jusco supermarket in Japan to join his father’s tailoring business, Ogori Shoji, in 1972. He became president in 1984, when he opened the first Uniqlo store, known at the time as Unique Clothing Warehouse.

Fifth Avenue Store

In Japan, Yanai is second in wealth only to Softbank Corp. Chief Executive Officer Masayoshi Son, according to Forbes.

Fast Retailing aims to make 1 trillion yen of pretax profit, excluding ordinary items by 2020, more than 10 times this fiscal year’s. It plans to open as many as 300 stores annually within a year or two, Yanai said last month.

Yanai opened two of Uniqlo’s biggest stores to date in New York last month, with one on Fifth Avenue and another on 34th street. The Fifth Avenue store has a floor space of 89,000 square feet. The company plans to open stores in Los Angeles, Chicago and San Francisco in the next three years, he said.

LG Said to Plan to Debut Google TV at Trade Show in January

Story first appeared in the Bloomberg News.

  Google Inc. and LG Electronics Inc. may unveil a television using the search giant’s software at the January Consumer Electronics Show in Las Vegas, according to two people with knowledge of the project.

The product would be LG’s first model with Google TV, said the people, who declined to be identified because the discussions aren’t public.

Support from the world’s second-largest TV manufacturer may boost Google’s attempt to bring its dominance in Internet search to living rooms with the Google TV software. Last month, the Mountain View, California-based company introduced a redesigned television service after sales of its initial version didn’t meet some expectations.

LG a Tokyo-based company, and Google, a US based company, both declined to comment on the discussions between the two companies.

Google, pushing into areas that boost competition with rivals Apple Inc. and Microsoft Corp., unveiled the TV service last year with partners Sony Corp., Logitech International SA and Dish Network Corp. 
Google said last month the partners would receive the updated software.

YouTube, Android

LG and bigger rival Samsung Electronics Co. are embracing the Internet and 3-D images to revive TV demand amid a plunge in set prices. Sony, maker of the Bravia models, has forecast an eighth straight year of losses at its TV business.

The revamped version of the TV service Google unveiled last month has a simpler interface. The upgrade was designed to show the YouTube video-sharing service better and opens up the platform for Android developers to build applications for TV. Android is Google’s software platform for mobile devices.

After the debut of the TV service, Google failed to secure programming from the four major U.S. broadcast networks, led by CBS Corp. and News Corp.’s Fox. Logitech, based in Romanel-sur- Morges, Switzerland, cut the price of its Revue set-top box for Google TV in April, citing “a slow start.”

The Electronics Times, a South Korean newspaper, reported this month that LG was in discussions with Google to use the TV service. The report didn’t give a timeframe for the product’s unveiling.

Samsung, based in Suwon, South Korea, also was in discussions with Google to develop a Google TV product, Yoon Boo Keun, head of Samsung’s TV business, said in February.

Twitter changes business of celebrity endorsements

Rapper Snoop Dogg gave props on Twitter to an ad for the Toyota Sienna minivan. Actress Tori Spelling linked to a website for rental cars. And reality TV star Khloe Kardashian soliloquized about the brand of jeans that accentuates the famous Kardashian derriere.

"Want to know how Old Navy makes your butt look scary good? Ask a Kardashian," the reality TV star tweeted.

These celebs aren't just writing about family cars and fashion choices for the heck of it. Stars can get paid big bucks to pontificate about clothes, cars and movies in the 140 characters or less allowed per tweet. That adds up to about $71 per character.

Twitter, which in its five-year existence has reshaped how people shop, vote and start revolutions, is now changing the business of celeb endorsements. A growing number of firms are hooking up companies with stars who get paid to praise products to their thousands -- sometimes millions -- of Twitter followers.

The endorsements range from subtle to blatant; the celeb pairings from sensible to downright odd.

Singer Ray J urged his 600,000-plus Twitter followers to see the horror movie "Saw 3D." Lamar Odom, L.A. Lakers forward, tweeted to his nearly 2 million followers about hip-hop artist and entrepreneur Jay-Z's book "Decoded": "My man Jay-Z ... only rapper to rewrite history without a pen. Until now."

Of course, anything on Twitter is short-lived and reaches only a small, self-selecting audience: Research firm eMarketer estimates that only 11% of U.S. adult Internet users are on the site. And even though some celebs have faithful followers, it can be hard to measure whether their tweets lead people to spend.

Still, celeb tweets can be a way to grab an audience. And paying a celeb to tweet is much cheaper than a traditional advertising campaign. Want a tweet from Khloe Kardashian? That will cost about $8,000, according to social media marketer Izea. Looking for a cheaper option? Ray J is about $2,300.

Companies like Izea, and twtMob usually pair products with celebs through a combination of software algorithms and Hollywood instinct. The companies say they use many metrics to gauge the effectiveness of a paid tweet, such as the number of times it gets reposted by others.

When got Charlie Sheen to tweet for in March, the actor was getting fired from his sitcom "Two and a Half Men." Within an hour of Sheen's first post, got more than 95,000 clicks.

"I'm looking to hire a #winning INTERN with #TigerBlood," tweeted Sheen, who had just recently signed up for Twitter and now has more than 5 million followers.

Dan Smith, vice president of marketing for website CampusLIVE, which helps advertisers connect with college students, hired Izea to help him get a celebrity to tweet about his company.

Smith polled his interns and they picked Lindsay Lohan, the actress most famous for her run-ins with the law. According to Smith, CampusLIVE paid Lohan about $3,500 for one tweet: "These challenges for college kids on #CampusLIVE are SO addicting!"

The post to Lohan's 2.6 million fans drove about 4,500 clicks to the website, Smith said. But he also said he wasn't sure if he'd use her again -- because he's already tapped her fan base.

For her part, Lohan on her own time tweets about topics like fulfilling her community service sentence. But she has also posted comments for Izea on a few occasions, the company says. Her tweets about wind energy ("While saving the world ... save money! I love it!") and about a gold mining company ("R ur savings safe? Think again!") were paid endorsements, according to Izea.

Those posts, along with the CampusLIVE tweet, included the characters "#ad" at the end, which indicates that a post is a paid endorsement. But Lohan's publicist, Steve Honig, says that Lohan does not sell her tweets: "She uses Twitter to communicate with her fans and let them know what she's up to."

Like any endorsement, celeb tweets come with the risk that a star's behavior will not coincide with the company's image. And of course, there's a science to picking the right one: Will consumers buy that their favorite rapper drives a minivan?

Twitter generally allows the paid tweets, as long as they're posted manually and not automated by a computer program. The Federal Trade Commission suggests endorsers end their tweets with the # symbol, called a hash tag, and the letters "ad" or "spon," short for "sponsored by," to clarify that they're ads.

Google Reaches for the Stars

This story first appeared in the New York Times.

In a top-secret lab in an undisclosed Bay Area location where robots run free, the future is being imagined.

It’s a place where your refrigerator could be connected to the Internet, so it could order groceries when they ran low. Your dinner plate could post to a social network what you’re eating. Your robot could go to the office while you stay home in your pajamas. And you could, perhaps, take an elevator to outer space.

These are just a few of the dreams being chased at Google X, the clandestine lab where Google is tackling a list of 100 shoot-for-the-stars ideas. In interviews, a dozen people discussed the list; some work at the lab or elsewhere at Google, and some have been briefed on the project. But none would speak for attribution because Google is so secretive about the effort that many employees do not even know the lab exists.

Although most of the ideas on the list are in the conceptual stage, nowhere near reality, two people briefed on the project said one product would be released by the end of the year, although they would not say what it was.

At most Silicon Valley companies, innovation means developing online apps or ads, but Google sees itself as different. Even as Google has grown into a major corporation and tech start-ups are biting at its heels, the lab reflects its ambition to be a place where ground-breaking research and development are happening, in the tradition of Xerox PARC, which developed the modern personal computer in the 1970s.

A Google spokeswoman said that investing in speculative projects was an important part of Google’s DNA. While the possibilities are incredibly exciting, please do keep in mind that the sums involved are very small by comparison to the investments we make in our core businesses.

At Google, which uses artificial intelligence techniques and machine learning in its search algorithm, some of the outlandish projects may not be as much of a stretch as they first appear, even though they defy the bounds of the company’s main Web search business.

For example, space elevators, a longtime fantasy of Google’s founders and other Silicon Valley entrepreneurs, could collect information or haul things into space. (In theory, they involve rocketless space travel along a cable anchored to Earth.) Google is collecting the world’s data, so now it could be collecting the solar system’s data.

Sergey Brin, Google’s co-founder, is deeply involved in the lab, said several people with knowledge of it, and came up with the list of ideas along with Larry Page, Google’s other founder, who worked on Google X before becoming chief executive in April; Eric E. Schmidt, its chairman; and other top executives.

Google may turn one of the ideas — the driverless cars that it unleashed on California’s roads last year — into a new business. Unimpressed by the innovative spirit of Detroit automakers, Google now is considering manufacturing them in the United States, said a person briefed on the effort.

Google could sell navigation or information technology for the cars, and theoretically could show location-based ads to passengers as they zoom by local businesses while playing Angry Birds in the driver’s seat.

Robots figure prominently in many of the ideas. They have long captured the imagination of Google engineers, including Mr. Brin, who has already attended a conference through robot instead of in the flesh.

Fleets of robots could assist Google with collecting information, replacing the humans that photograph streets for Google Maps, say people with knowledge of Google X. Robots born in the lab could be destined for homes and offices, where they could assist with mundane tasks or allow people to work remotely, they say.

Other ideas involve what Google referred to as the “Web of things” at its software developers conference in May — a way of connecting objects to the Internet. Every time anyone uses the Web, it benefits Google, the company argued, so it could be good for Google if home accessories and wearable objects, not just computers, were connected.

Among the items that could be connected: a garden planter (so it could be watered from afar); a coffee pot (so it could be set to brew remotely); or a light bulb (so it could be turned off remotely). Google said in May that by the end of this year another team planned to introduce a Web-connected light bulb that could communicate wirelessly with Android devices.

One Google engineer familiar with Google X said it was run as mysteriously as the C.I.A. — with two offices, a nondescript one for logistics, on the company’s Mountain View campus, and one for robots, in a secret location.

While software engineers toil away elsewhere at Google, the lab is filled with roboticists and electrical engineers. They have been hired from Microsoft, Nokia Labs, Stanford, M.I.T., Carnegie Mellon and New York University.

A leader at Google X is Sebastian Thrun, one of the world’s top robotics and artificial intelligence experts, who teaches computer science at Stanford and has developed a driverless car. Also at the lab is Andrew Ng, another Stanford professor, who specializes in applying neuroscience to artificial intelligence to teach robots and machines to operate like people.

Johnny Chung Lee, a specialist in human-computer interaction, came to Google X from Microsoft this year after helping develop Microsoft’s Kinect, the video game player that responds to human movement and voice. At Google X, where he is working on the Web of things, according to people familiar with his role, he has the mysterious title of rapid evaluator.

Because Google X is a breeding ground for big bets that could turn into colossal failures or Google’s next big business — and it could take years to figure out which — just the idea of these experiments terrifies some shareholders and analysts.

Mr. Page has tried to appease analysts by saying that crazy projects are a tiny proportion of Google’s work.

Tuesday, October 18, 2011

Yahoo Vexed by Weak Sales

Story first appeared in the Wall Street Journal.
As Yahoo Inc. shops itself to potential buyers, its core advertising business is weakening. That trend is evident through Craig Atkinson's ad agency.
Yahoo's core advertising business is weakening -- the company in some cases has cut prices 5% to 15% -- a complication as Yahoo shops itself to potential buyers. Amir Efrati has details on The News Hub.
Mr. Atkinson is president of ad giant Omnicom Media Group's PHD unit, which oversees annual ad spending of $4 billion to $5 billion for companies including Starbucks Corp. and Gap Inc. Over the past year, he said, the agency's ad spending on Yahoo properties is flat to slightly down.
And in the past few weeks, since Carol Bartz was fired as Yahoo chief executive, Yahoo's Americas-region chief Ross Levinsohn and others have been on a "barnstorming tour" to meet with him and his peers, he said. "They're saying, 'We're willing to do what we have to do to win the business,'" Mr. Atkinson said, adding that while his advertiser clients still view Yahoo as a way to reach and target "enormous audiences," it's no longer a "must-buy."
Mr. Atkinson's experience is troublesome for Yahoo, which reports third-quarter results Tuesday. Following Ms. Bartz's firing, Yahoo's board has been looking at potentially selling off all or parts of the onetime highflying Internet company, people familiar with the matter have said.
One of the company's key assets is the heavy traffic to its home page and its news, entertainment and other websites—and the strong online display-ad business those sites have sustained.
Any weakening in Yahoo's $4 billion annual ad business—a figure that excludes commission payments to Yahoo's business partners—may have implications for how attractive the company is to suitors. Yahoo's display-ad business, including graphical, interactive and video ads, generates 40% of the company's overall revenue but only grew 5% year over year in the last reported quarter—a sharp slowdown from double-digit growth rates in prior quarters.
Analysts expect Yahoo's display-ad sales to be flat or slightly higher than a year ago in the third quarter. By contrast, the overall U.S. online-ad industry has increased more than 20% so far this year.
Yahoo's Web-search partnership with Microsoft Corp. has been a drag on search-ad revenue, which accounts for one-third of overall revenue. And decline in the average amount of time people spend on Yahoo sites every month is now beginning to show up in the company's financial figures.
"The eroding ad business weakens the resolve of Yahoo's board to remain an independent company, increasing the chances of an outright sale," said Jordan Rohan an analyst at Stifel Nicolaus & Co. As long as Yahoo on Tuesday reports that quarterly revenue isn't more than 10% below the $1.2 billion to $1.26 billion range it previously projected for the quarter, potential buyers of the company "will be able to overlook it," he said.
A Yahoo spokeswoman said the company is in a "quiet period" before Tuesday's earnings and can't comment on sales and revenue.

To reverse its fortunes, Yahoo has been bending over backwards to please its largest ad clients, according to ad executives. In recent weeks and months, the company in some cases has cut ad prices 5% to 15%, including for its home page and Yahoo Mail log-in page, and included features such as custom animation, said ad executives. The home page commands the highest prices for ad units on Yahoo, running anywhere from $200,000 to $850,000 for a full day.
Yahoo also changed the look of the Yahoo! logo on its home page for the launch of Walt Disney Co.'s most recent Pirates of the Caribbean film earlier this year, something the company had never done before for an advertiser, a Yahoo spokeswoman said.
In addition, when Yahoo and ad agencies disagree on how many people viewed a particular ad on its sites, Yahoo has been willing to bill the agency based on the agency's numbers rather than its own—something it seldom did before, according to agency executives. "Historically Yahoo was a company of 'No's' and they are slowly becoming a company of 'Yes we can,' which is very refreshing," said David Cohen, an executive vice president at Universal McCann, a media-buying agency owned by Interpublic Group of Cos.
Mr. Cohen, PHD's Mr. Atkinson and other advertisers said they are also encouraged by some other Yahoo moves. For instance, Yahoo has created an "agency development team" of more than 20 salespeople dedicated to each of the major ad agencies. Yahoo can now also propose large-scale display-ad campaigns on its websites within a week or two of being approached, down from four to six weeks previously.
Yahoo is also more proactive with its largest advertisers, agency executives said. In prior years, ad agency executives said, Yahoo billed itself as the best place to reach a wide audience and often waited on advertisers to call, a tactic that became less effective as Internet users began to spend less time on Yahoo sites, including Yahoo Mail, the company's biggest source of ad space.
Following an overhaul of its sales leadership that started last year, Yahoo has reached out to advertisers to work on large-scale campaigns surrounding "anchors," or annual events such as the Super Bowl and the Oscars, and "tent-poles," or less-frequent events such as the recent British royal wedding.
Such efforts have borne some fruit. Yahoo recently reached a deal with Procter & Gamble Co. for a display-ad campaign during the summer Olympics next year, worth tens of millions of dollars, said people familiar with the matter. Spokeswomen for Yahoo and P&G declined to comment about the deal.
Still, ad agency executives said Yahoo faces an uphill climb. Rishad Tobaccowala, chief strategy and innovation officer at VivaKi, an agency that oversees $7 billion to $10 billion in digital-ad spending for clients such as General Motors Co. and Coca-Cola Co., said the average rate for ads on Yahoo sites has fallen 10% to 15% annually over the past two to three years.
That trend is due partly to the growing availability of cheaper ways for advertisers to reach large audiences on the Web, thanks to technology from companies such as Facebook Inc. and Google Inc., which places ads on thousands of sites through its automated DoubleClick ad exchange.
Yahoo's ad prices have also been pressured by the growing amount of articles and videos on the Web, including "premium" content from media companies such as Walt Disney, Viacom Inc., and video site Hulu LLC, which is worth more than content generated by Yahoo. "Yahoo doesn't have the technology that Facebook and Google has, and it doesn't have the quality of content that other players have," said Mr. Tobaccowala, whose agency is part of ad giant Publicis Groupe SA. To remedy the content-quality gap, Yahoo has begun to form partnerships with leaders in various categories. Two weeks ago it announced the first such deal, which puts ABC News video content on Yahoo sites. The companies split revenue from ads sold against the content.
To better compete with technology rivals, Yahoo is teaming up with AOL and Microsoft to combine the supply, or inventory, of lower-priced ads that the companies sell on their respective sites into one marketplace where advertisers can buy it, people familiar with the plan said. The move theoretically could boost the ads' value. Spokeswomen for the companies previously stated they were working on partnerships but didn't elaborate.
Customers are supportive of the moves. "What you're seeing now is innovation to create more relevance for advertisers," said Adam Shlachter, director for digital in the U.S. for MEC, the global media-buying agency that is part of WPP PLC."We've heard a lot more from them [Yahoo] of late. There's more regular dialogue, lower prices and new opportunities," he said.