Archive for September, 2008
Article By: Joshua ‘The Red’ Russak (Red@aclion.com)
Front-and-center on the Yahoo! homepage: Citigroup to buy Wachovia banking operations! Bear, Lehman and WaMu…now we have arrived at Wachovia!? “In the latest byproduct of the widening global financial crisis, Citigroup Inc. will acquire the banking operations of Wachovia Corp. in a deal facilitated by the Federal Deposit Insurance Corporation.” How will this effect the Technology Sector and Digital Growth?
The financial markets have been on edge since Friday following the proposal for a $700 billion banking bailout hit a roadblock of opposition. (Read the $700 Billion Bailout Plan or the Alley Insider Summary.) Surprisingly, big financial companies raised the Dow Jones more than 120 points on hopes lawmakers would hammer out the bailout rescue plan this weekend. The Technology sector suffered a different fate, quoting Reuter’s article on Friday: Dow, S&P gain on bailout hopes, Nasdaq slips , “Tech shares took it on the chin, keeping the Nasdaq in the red, after a disappointing outlook from BlackBerry maker Research in Motion. considered a bellwether for the sector. [...] The fate of the rescue plan pushed nearly everything else to the background on Friday.” The Technology Heavy Nasdaq was down almost 4 points on Friday!
Research in Motion wasn’t entirely to blame. Apple Inc, shed 2.8%, also hurting the Nasdaq. Apple is really feeling really the pain. In ZDNet article, Apple: Is It Really Recession Proof?, “Morgan Stanley analyst Kathryn Huberty thinks that Apple can’t outrun a slowing economy. And she’s betting her estimates on it.” PC’s are coming out on top because “Apple doesn’t play the sub-$1,000 game.” The cheaper option prevails during a recession! This is going to be a recurring theme in our economy! Want proof? My girlfriend was just given the assignment to write a 5 page essay on the effects on the purchasing of Brand-Names during a recession. I will gladly post that paper on my blog as soon as it is completed.
To make things seems even worse, AdAge just published the article: Revenue Growth Slowest Since 2001! “The nation’s top 100 media companies saw a 4.6% revenue boost in 2007, their slowest growth since the recession year of 2001.” Though on the bright-side of things “Media’s biggest winner is no surprise: digital, with revenue up 10.8%.” Could we be headed back to
That doesn’t change the fact that for the Media Sector, mergers-and-acquisition activity has slowed dramatically this year undoubtedly due to the credit and capital markets current situation. “There have been only five announced U.S. media acquisitions valued above $250 million so far this year. [...] In contrast, there were 14 announced media acquisitions above $250 million by this time last year.” (AdAge)
All these facts do not mean the tech sector is suffering entirely. According to MarketWatch.com article FiSpace.Net: One Company’s Recession, Another Company’s Opportunity, “some businesses find that the economic malaise has created a greater need for their technology and services. One such company, Zippi Networks, Inc. (Pink Sheets:ZIPI), may well be in the right place at the right time as they assist individuals in successfully selling items on eBay, creating a revenue stream for their customers and the company.” The article continues to explain how many tech companies are reaping the benefit of our current economic situation.
The title for this article may be a bit misleading, but the point is simple: This is a very mixed-up place to be for the tech and online media space and I’m interested to see how this will play out in the next few months (or weeks pending any new surprises from the financial sector).
Silicon Alley Insider is a business blog, produced by and for the New York digital business community…and easily one of my favorite blogs in the Online Space!
Only in their 2nd year, they are now hosting their second Silicon Alley 100, an “annual list of the 100 most influential and important folks in New York’s digital-business community. The list includes executives, investors (venture capital, private equity, angels), financiers, attorneys, journalists, analysts, commentators, philanthropists, and others who make extraordinary contributions to New York’s digital industries (such as the guys on the right).” (Launching The 2008 Silicon Alley 100…Vote Now!)
If you’d like to Vote, then go to the Silicon Alley 100 Voting Booth and make your selection. You’ll recognize quite a few names on the list, and you’ll be surprised to see how they rank. If you don’t like the way our tally looks right now, their voting booth will close at end of the business today (aka: Tonight!).
As always, here’s SAI’s company info provided by CrunchBase.com
Web2.0 Expo took place at the Javits Center September 16th-19th and came off as a great success for many of the attendees – myself included! One of the most valuable sessions took place on Thursday: “Starting Up in Silcon Alley”. I only registered for the Expo Hall, but was lucky enough to find my way in using some of my usual event tactics (hint: involves a scanner and photoshop).
The topic covered an important question for VC’s and Tech Entrepenuer’s alike: Where to start up? For the vast majority of the online world, when you hear Silicon Valley you think the heart of everything tech in the US all located in Northern California. But lately entreprenuers, VC’s and tech-startups are beginning to find value in areas outside of NoCal. One Silcon in particalur, Silicon Alley, “is a nickname for an area with a concentration of Internet and new media companies in Manhattan, New York City. Originally, the term referred to the cluster of such companies extending from the Flatiron District down to SoHo and TriBeCa, but as the location of these companies spread out, it became a general term referring to the dot com industry in New York City as a whole” (Wikipedia). And many VC’s and entreprenuer’s alike are beginning to see a lot of value in New York City. This was the topic of discussion for the panel which consisted of….
-Nate Westheimer, BricaBox Founder (Panel Moderator)
-Kevin Ryan, CEO & Co-Founder of AlleyCorp
-Karin Klein, Vice President of Softbank Capital
-David S. Rose, Principal of Rose Tech Ventures
It was a legitimate topic as there are many successful start ups in NYC Silicon Alley. “A couple of years after the internet bust, Silicon Alley began making its comeback with the help of NY Tech meetup and NextNY. Since 2003 Silicon Alley has seen a steady growth in the number of start-ups. As of 2007 Google’s second largest office is located in New York as well as major online advertising and media companies such as Eyeblaster, DoubleClick, Roo and meetup.com” (Wikipedia).
Nate moderated the event and for about a 1/2 hour, conducting a Q&A style panel allowing the audience to ask questions as well (as you’ll see). To best cover this event, here’s a taste of what went on…
Nate: What does it mean to start up in Silicon Alley?
- Kevin: “Great management talent in NY, [...] We still have an undeveloped VC infrastructure…a real lagger in terms of development. [...] I’m extremely Bullish! 10 years from now we’ll stil be smaller than Silicon Valley, but the gap is closing in day by day!”
- Karin: “We are finding many compelling startups in NY. We have the building blocks key resources in NY – customers, partners and financiers. [...] 3 examples of success: BuddyMedia, Thumbplay and Paltalk.”
- David: “This is a very good time to start a company in NYC. The world is changing…what we don’t understand is how rapidly it is changing! The cost of a startup keep decreasing – In 1988 $20million to $2million to $200,000 during Nuclear Winter to now $20,000! You now have the resources!”
Nate: Do you have an “only in New York” story?
- Kevin: “Being near the advertising community was an enormous advantage. So you have to be here!”
Nate: Do/would you ever request anyone that you invested in to come to New York?
- Karin: “Associated Content was based in Colorado, and they needed to be closer to advertisers. Also, retention of teams is easier.”
- David: “Angel investors offer more than just $$money$$. We offer our offices, incites, and much much more. So it’s a benefit for them to be here.”
- Kevin: “Staffing opportunity is definitely a plus. Also, to say Real Estate here is more expensive makes no sense. We determined our costs were $5,000 per person per year at DoubleClick and compared to other cities that cost only $1,000 less, that’s not so significant.”
Nate: Where do you see things going in Silicon Alley?
- Kevin: “Rate of growth is going to slow down. It doesn’t have to do with the economy. It’s just that the rate-of-change is slowing down”
- David: “I challenge that…the rate-of-change is accelerating. Anyone who says they know where the world is going is FULL OF SH*T!”
- Karin: “The entrepreneur’s now are really committed and have strong conviction. I’d much rather back someone in this environment.”
- Kevin: “Here’s some great advice for the future: Start when the wave starts! [...] If you want to start video now, it might be a little late.”
- David: “248 Venture Backed IPOs in ’99…0 Venture-Backed IPOs in Q2 2008?.” <-[A statistic I heard just a week earlier at the E-Marketing Breakfast at the Harvard Club NYC, found in the article “The Future of Search” over a bagel ‘n cream cheese!]
…at this point Adeo Ressi, Founding Member and CEO for TheFunded.com challenged the panel. With a smile on his face, he walked up to the audience mic and, quoting him as accurately as possible, he said…
- Adeo Ressi: “Silicon Valley kicks New York’s BUTT! There is 10x everything in the Valley!”
Adeo was an early pioneer in the growth of the World Wide Web and has been a successful entrepenuer over and over (GameTrust Inc, Total New York, etc.) He started his company, TheFunded.com started in NYC, but he moved it to Silicon Valley and off of that he made many good points. To further support him, “despite the development of other high-tech economic centers throughout the United States, Silicon Valley continues to be the leading high-tech hub because of its large number of engineers and venture capitalists” (Wikipedia) It definitely stirred up the panel and it was all in good fun, but at the same a reality check. David obviously was the first to challenge him and the audience definitely enjoyed the panels overal reaction.
After the conference, I took my picture with the panel (as seen at the beginning of this blog-most), then everyone made their way upstairs for a Lunch Session headed up by David Rose. It was very personable and David really pumped up the audience in terms of all the stages of starting up (concepts, funding, etc). A lot of individuals there wanted to pitch David which is why he continuously made this point over and over: “Only 1.32% of all Companies that pitch VC’s get funding.” I’m not sure if he was referring to here in NYC, or in the US, but either way that is a statistic you should NOT ignore as an entrepreneur.
David instructed entrepreneurs to create a working product, get users/consumers, show some profitability and then come to the VC’s! He also made another great point saying that “The most important person in the management team is the entrepreneur. We’d rather bet on a jockey than the horse!”
Afterward, there was another chance for Q&A and I had the chance to pop out my question…
Red: Kevin, you mentioned a great tip: Start when the wave starts! What do you see as the next big wave?
The whole team responded, but it was hard to pinpoint a single response. Kevin said once again that things were slowing down and there’s no wave at this moment. He also mentioned “mobile” but he was a skeptic with the iPhone. David obviously challenged him saying this space was “accelerating, but at a granule level.” Karin jumped in to point out that for “Video & Social Media, there was still good money to be made. [People just need to start] innovating these areas.”
Either way, they spent a good 10 minutes covering that topic before moving on. It’s good to see David and Kevin go head to head. I don’t know about the rest of the audience, but I was really fired up to be in the same room as 4 successful entrepreneurs and to actually engage in a discussion with them.
Web2.0 Expo was a success ! Keep on top of my calendar because there are still a few good events ahead in Q4 of 2008. And remember…Keep an eye for the “Red-Hair” at future events!
To end off here is a fun fact for you: For a list of other places with the “Silicon” name: Click Here.
Social Ad Summit was last week and it was a great event. Hats off to Nick ONeil and company for running a classy event in its initial iteration. The venue was great, the food was superb! Honestly the PM cocktail was replete with open bar great sushi, lamb, huge cheese display, it was really off the hook! But to more critical initiatives it was the constancy of the audience and energy that was most notable. EVERYONE was working on something exciting. Dynamism was the word for the day and the audience was very very collaborative. As a recruiter we are always looking to gain a pulse on the market and try to be a few steps ahead of it. I, personally, was most struck by metrics behind the network models leveraging social environments for impressions on branding campaigns, or lead acquisition via virtual cash. As always, most San Fran based companies recognize that they need a sales presence here in NYC and that agencies are the last link to advertising dollars. OK nothing new there but I am wondering if there are more marketer direct opportunities for more traditional interactive platforms then are available to newer social platforms.
It was a great show – I shot a note to Nick O’Neil afterward thanking/congratulating him and strongly suggesting he keep it just at small (300 pp) next year.
Here I am chatting with Brian August of Plentitude. He is at the very beginning of what could be a heck of a ride – Plentitude has a very ambitious plan!
Off to more follow – up
It’s a fact, I am “obsessed” with Online Marketing Expo/Conference SWAG. Some are ashamed, other makes fun, but quoting Tech Crunch Article, TechCrunch50 swag bag: Room for improvement “there’s nothing wrong with a good tchotchke, and this stuff is kind of fun to give out to kids, and useful if you need clothes for changing the oil or painting a room”.
Now for all of you who do not know what SWAG is let me inform you. Not to be confused with a “cheap purchase during your high-school days” SWAG, as defined by UrbanDictionary.com: “Stuff/Sh*t We All Get – Relating to the trade show convention industry, where exhibitors hand out “free stuff” to visitors. Most of the time these items are purely promotional materials, and are fairly worthless. ie. pencils, mugs, and mouse pads. [...] SWAG always has the company name, logo, slogan, product, service, and contact information clearly printed somewhere on the item/s. Some convention goers have made a hobby of collecting as much swag as possible, and compete with others at the show.”
As Used in Conversation…
-”The online gaming booth is handing out swag demo disks.”
-”That beats my swag bag of stationary!”
Awards: Recognition merchandise given to acclaim superior performance or service. Awards should be gifted in a way that publicly acknowledges the achievement.
Business Gifts: Merchandise given by a company to its employees, customers or any person with whom it wants to enhance a relationship. Business gifts are given in goodwill without obligation to or from the recipient.
Commemoratives: Merchandise used to mark a ceremony, anniversary, event or milestone.
Incentives and Premiums: Something the recipient can’t buy at any price, but must take some specific action to obtain: such as making a purchase, exceeding a sales quota or accomplishing specific company goals. Popular examples are: Safety Incentives, Wellness Incentives, Dealer Incentives, Direct Premiums, Referral Premiums and Sales Incentives. Incentive programs typically involve gifts given in sequence to keep people interested and involved in the program.
Lumpy Mail: Also known as a dimensional mail, lumpy mail is a promotional product sent via direct mail. Lumpy mail should be creatively designed to cut through the clutter and deliver a specific marketing message to a specific target audience.
Prizes: Reward given to winner in a contest, sweepstakes or lottery. Prizes may be used as bait to generate leads, opt-ins for future communication or answers to a survey. Technology gifts are popular prizes.
Promotional Giveaway: Direct premium given free of charge or obligation to generate awareness and/or goodwill. For maximum effectiveness the item should be useful or meaningful to the recipient and also tie in with the goals and objectives of the advertiser.
Traffic Builder: A promotional product designed to boost traffic at a retail store or booth at a trade show/job fair. Items should have lasting value to the recipient so the message is carried long after the event is over.
Gotham Media Ventures recently hosted “Digital Media, Advertising: The E-Marketing Breakfast“, sponsored by Gridley and Company LLC, one event of a series of breakfasts that will take place over the next few weeks/months. The topic of this breakfast was laoded one – Searching for Dollars: The Future of Search Opportunities and Investment. The venue – Harvard Club of NY….
…at this point it becomes clear: Not a casual event! Unfortunately I didn’t think to wear a suit. I came expecting marketing executives and ended up finding a mixed, well-dressed crowd of VC’s, AE’s, CEO’s and SEM Guru’s. I was just happy I didn’t go with the Pink Polo. Either way, it was definitely a step up from the casual networking and entrepreneur events I’m used to attending. And I’m happy to say the panel was exceptional.
Moderating the event was Stan Sandberg, Principal at Gridley & Company LLC, the events sponsor. The panelists were as follows:
Stan began his introduction with a lengthy happy birthday wish to search giant Google, though I’m not sure today was the right day as I discussed in my previous article Google’s 10th Birthday! (But what day?). He mentioned 3 solid facts: Internet Marketing is growing fast (22.8%), Search is the biggest and fastest growing sector, and most shockingly in “99 was thr cup of the .com boom…99 was the breakout year. 248 IPOs in 99…0 Venture-Backed IPOs in Q2 2008″, (a point continuously repeated during Web2.0 Expo Panel “Starting up in Silicon Alley”, which I will blog about tomorrow).
On that note, the panel began. There were many great points made covering a number of important areas in Online Marketing. To get them all out, I will format the rest in Q&A form:
Stan: Your thoughts on the future of Search & Search Budgets?
- Aimee: “Much longer investments in strategic planning.”
- Adam: “A lot of growth in analytics in order to create value.”
- Sarah: “There will always be more money in search because it is measurable.”
- Kevin: “Data-mining is absolutely mission critical.”
Stan: Role of the Search Agency today?
- Aimee: “There is a change in process of how agencies are approaching companies.”
- Adam: “Definitely interested in brand building with companies that have offline” (mentioning the possibility of partnering up with the offline agency the company chooses.
- Sarah: “A lot more contingent on the marketer and collaborative efforts…collective brainstorming.”
- Kevin: “The reality is – it is driven by the client. Agencies are driven by the P&L in the end of the day…the client has to drive it.”
Stan: What are you seeing in terms of keyword trends and ROI?
- Kevin: “Two issues -> Minimum click costs continue to increase & media channels are deciding whether or not your site is worthy and that is a BIG problem.
Stan: Google = Better Results…your thoughts?
- Kevin: “70% of search in the US is Google…90% in Western Europe”. Keep in mind geo-location.
- Aimee: “Be aware of the other search engines and how they work. [...] Google drives volume, but other sites can drive better conversions.”
- Adam: “The volume is on Google. It has been a disappointing competition to watch…I am hoping somebody can compete with Google.”
- Kevin: “Google Properties will eventual equal Government Intervention.” In reference to Chrome, “Google terms & conditions are crap”, but he finished off by saying “…maybe we would be better of joining Google.”
Stan: Innovation – Where will it come from?
- Kevin: “Cuil was the worst piece of sh*t search engine. What we saw at the end of that was VCs are now questioning ex-google employees. The press is second guessing the ex-googlers as well. [...] The same journalists who said Cuil was big, also say Yahoo is going down”
- Aimee: “Digital out of home is going to be huge…mobile, video online…also marketing tools”
- Adam: “We need to use 3rd party analytics companies in order to make sense of it all”.
- Sarah: “Google – they got the eyeballs”
- Sarah: “There are cases where search makes no-sense!“
- Aimee: “1+1=3″
- Kevin: “We have to be careful how we use the word Study today” (referring to stats and case-studies).
- Adam: The trend and timelines is as follows “Offline -> Website -> Mobile & E-mail”.
The conference ended on a great note, and overall I feel the crowd was pleased.
Article By: Joshua ‘The Red’ Russak (Red@aclion.com)
Web2.0 Expo was fully packed with good swag, give aways and presentations…ALL FOR THE SAKE OF LEAD-GEN! Each booth would trade SWAG for a simple bar-code scan so they could follow up with you after the show. I particularly enjoyed Axiom Software Inc’s approach to lead-gen. Their booth offered a Flip video camera if you entered your contact info and explained “How has Web2.0 Expo effected your business?”
Here’s AC Lions very own Managing Director, Dan Goldsmith, offering his opinion….
That’s right…this is Google’s 10th anniversary/birthday. Funny enough, nobody really knows the exact day, as quoted directly from Google’s Answer Pages: “Google opened its doors in September 1998. The exact date when we celebrate our birthday has moved around over the years, depending on when people feel like having cake.”
TechCrunch offer’s their own theory in their article, Happy Tenth Birthday Google! When Are We Celebrating?
“Google is actually nearly 13 years old if you go by their own corporate history page: “By January of 1996, Larry and Sergey had begun collaboration on a search engine called BackRub, named for its unique ability to analyze the “back links” pointing to a given website.”
But if you go by when the Google.com domain name was registered, they’ll turn 11 on September 15.
However, the date Google celebrates as their birth month is September 1998. They celebrated on September 7, their date of incorporation, until 2005. Since 2005 (and also randomly in 2002), they’ve celebrated on September 27.”
If you have any other theories, I’d be glad to hear it. Google, at the age of 10 is already more successfull than I’ll ever be. YOU CAN FORGET GETTING A GIFT! All the best Google and thanks for your app’s!
Article By: Joshua ‘The Red’ Russak (Red@aclion.com)
eMarketer.com published an article today that may affect the world of online in a whole new way. In the article Affluent Spend the Most Time Online, a study conducted from March through July 2008 by Ipsos Mendelsohn suggests that “among US affluent heads of household surveyed, those with annual household incomes of $250,000 and over spend the most time online.”
This may impact where advertisers go to research the impact of their campaigns. The rich could one day define the “perfect ad” and the poor will get stuck with last years Banner ads. This is all speculation, but one thing is for sure. Ad Networks and social communities like aSmallWorld.com, that advertise to the Rich will see an increase in income if these stats continue.
I find it interesting to note that TV and Radio time decreases as you get richer. Now, when you site down and think about, everything here makes sense. The rich are more likely to rely on the Web as a source of news and information simply because the RADIO and TV are too slow and cluttered with ads. There are endless correlations and reasons, but I’ll leave those assumptions up to you…