Archive for the 'Marketing' Category

Brickfish - Aiming to Create a new Model for Online Marketing

Published on February 21, 2007 in Business, Entrepreneurship, Internet and Marketing. 0 Comments

brickfish

I really can’t remember how I came across Brickfish, but what I know is that it caught my attention from the moment I stumbled upon it. Claiming to be a new model for online marketing, Brickfish simply offers anyone the chance to upload campaigns and allow their community to evaluate that campaign whether it be a blog, video, or photo. Brickfish breaks down users into two segments, Brands and Consumers, allowing anyone to partake on any side depending on what one has to offer.  Brands range from self-branded content to branding campaigns from the likes of Reebok and Varsity Books, and Consumers ranging from your everyday average internet user to extremely marketing savvy users.  Brickfish states:

“Our company was founded on the belief that consumers define brands-in fact, consumers are brands. We have created the world’s first integrated environment where consumers and companies engage with each other in ways that empower users to make a real impact. Everyone who is involved in the site and with our campaigns has the power to bring about positive change and we would like to invite you to join us in embracing that belief.”

I’ve browsed around the Brickfish website for quite a bit now and believe that there is a lot of potential for it to become a huge sensation within the next few months.  With Brickfish raising $11.2 million during its Series A financing round, according to today’s press release on their website, one can only expect more great things to come from such a venture.  This is where social networking meets product development, marketing, branding, and advertising, which is great in a world today where most products are driven by the needs and wants of the consumer.

The Right Way to Acquire: Google Acquires YouTube for $1.65bn

Published on October 9, 2006 in Business, Internet, Investing and Marketing. 1 Comment

Google (GOOG) today announced that has struck a deal to acquire YouTube, the leading online video distributor, for $1.65 billion. For those that are unaware, YouTube serves approximately 120 million videos on a daily basis. Even though the reach of YouTube is quite higher than the reach of some broadcast media, YouTube has yet to define a revenue model. This is where Google’s acquisition of YouTube will play a crucial role in defining a revenue model that is bound to make a whole lot of money. A few months ago, Google announced that AdSense would, in addition to their contextual advertisements and banner advertisements, also provide video advertisements. With Google Video only having close to 6.5% market share, surely Google’s video advertisements wouldn’t be a huge moneymaker through Google Video. This is where YouTube has a whole lot of potential to rake in a big chunk of change for Google, as YouTube owns close to 43% of the online video market share.

I would say that this is a different type of acquisition for Google. First of all, YouTube was bought out not with cash, but in exchange for Google stock. Additionally, Google will not be rebranding YouTube; YouTube will remain as a separate entity and resume operations as it always did with its full staff. Sounds pretty good to me, knowing that it is the YouTube brand name that is attracting 43% of viewers of online video.

Many people were skeptical about the acquisition of YouTube by Google. Especially since the first big leak of a potential acquisition surfaced on Friday, October 6th. As it turns out, YouTube and Google were in talks for about two weeks, and one can conclude that both entities were pretty serious about the talks. This draws my attention to the potential acquisition of Facebook, the second largest social networking website. It seems that it has been over a year since Facebook has been taking turns having talks with potential acquirers, such as Yahoo! (YHOO) and Microsoft (MSFT). But every time a rumor of a potential acquisition of Facebook is ever mentioned, the rumors turn out to be rumors after all. What might be the cause behind it? I would have to say that Facebook has put too big of a price tag on itself. Rumors and leaks state that Facebook is asking in excess of $1 billion, which is obviously turning away the buyers. Yes, the largest networking website, MySpace, was bought out for $750 million. But that three-quarters of a billion dollars was paid to acquire a huge chunk of the social networking market share (currently a few percentage points over 75%), while Facebook commands less than 10% of the social networking real estate. Trying to catch up to first place, Facebook was willing and is willing to try anything, first diversifying away from its niche market of college students to high school students, then diversifying away from students and opening up to the general public (something that angered hundreds of thousands of college students).

Just to tie things back all together, I would like to say that I doubt Facebook will ever be bought out for a price that they are asking for, especially when they are trying to do anything to gain market share. Yahoo! is falling behind Google by being unable to diversify its portfolio of products and services and take the lead in the many online ventures that Google has a hold on. Google on the other hand is able to acquire small ventures that have a lot of growth potential, and at the same time, small companies like YouTube on the receiving end are able to take advantage of their “huge potential for growth” situations.

Zecco Defines a New Way of Online Trading

Published on October 9, 2006 in Business, Internet, Investing and Marketing. 0 Comments

If you haven’t checked out Zecco by now, I really recommend that you do, especially if you’re an online trader or investor. Online trading has reached a new milestone with Zecco, by allowing online investors to trade for free. Some research into the Zecco through the Zecco Community Forums has provided me with answers as to how Zecco plans on generating income to sustain the business.

First off, not all trades are free through Zecco, only market orders and limit orders are for free. But other services cost a minimal amount. For instance options trading is priced at $3.50 plus $0.60 per contract. Browsing the Zecco Forums led me to learn the following:

  1. Looking at E*Trade’s 10-K filings, one notices that 49% of the revenues that E*Trade generates is from interest.
  2. Companies like E*Trade spend on average $5 on advertising for every trade that is conducted.

This all makes sense when one realizes that Zecco requires a minimum account balance of $2,500 and that they do not plan on advertising their service. Zecco seems to be hoping that the minimum $2,500 account balance will help them generate enough revenues through interest. Furthermore, rather than spending big money on advertising, Zecco plans on having their community forums and blogs, generate enough viral marketing to attract new customers. With the average Zecco page having three Google AdSense advertisements on it, it is quite evident as to how Zecco plans on generating a big chunk of their revenues in order to help cover clearing fees that result from the free trades.

Many people talk about Zecco being the Google of online trading. Whether or not Zecco is the Google of online trading, it wouldn’t come as a shock to me if sometime in the future we learn of Google and Zecco signing off on a deal where Google will guarantee a certain amount of advertising dollars to be generated through the Zecco website. Something similar to the Google and MySpace deal that we saw two months back.

For those who are interested here are some more Zecco links: a comparison of Zecco and other online brokers, the Zecco team, and the Zecco backers.

Online Search can Make or Break a Business

Published on September 26, 2006 in Business, General Business, Internet and Marketing. 0 Comments

Who would have ever thought that online search would have a huge impact on a company’s ability to sell or attract customers? A recent article on CNN Money titled Get right with Google describes how small companies can lose up to 20% of their revenues due to losing their rankings on Google for specific search keywords or keyphrases. This problem probably does not only exist for companies that depend on Google (the article probably focused on Google due Google being the leader in market share in terms of online searches), but probably also exists for companies that rely on any of the top search engines to generate traffic to their websites.

Online search engines have become a great marketing tool for many companies, especially for small companies that couldn’t afford expensive advertisements in publications and other types of media. But at the same time such companies that just rely on search engine marketing are at a huge risk of losing a lot of their business due to the fact that search engines are constantly refining the algorithms that are used to rank websites based on certain keywords and keyphrases. That makes one wonder how a company can stay on top of all the advances that take place on the internet?

There are probably hundreds and hundreds of ways to do so, but a very simple, cheap, and cost-effective way would be for companies to use a free online analytics tool, such as (and by far the greatest free one out there) Google Analytics to monitor website traffic and keyphrases that lead to the traffic. Any anomalies that are noticed should be immediately looked into and tested against various variables and benchmarks (such as looking up certain keywords or keyphrases that were generating the most traffic for the website from a search engine) and test the page rank of the company’s current website against the past page rank. Since almost all search engines claim that their search algorithms are proprietary, the only way to go about improving page ranking is by visiting websites that have “stolen” the website’s spot on the search engine and analyze the way keywords are used on the website, what websites link to the website, the way the link structure of the websites work, etc. From this point, the company’s website must be modified to match the new trends that are allowing for other websites to perform better with that search engine.

Customer Service: It Does Differ

Published on June 10, 2006 in Business and Marketing. 1 Comment

I’ve been in Kuwait for a bit over a week now to visit family and friends. Over the course of the past few days, I have noticed something very awkward about the way companies treat their customers, and to be quite honest I find it quite shocking when you compare the customer service here in Kuwait with the customer service one gets in the United States.

It isn’t just one store here in Kuwait where you realize that customer service is nearly inexistent, it is noticeable in almost every single business establishment available.  Employees and sales people simply could care less about the customer; they are more interested in killing time in random ways than in helping their customers out.  You would expect that the employees of a world-known establishment would treat their customers like kings, so that their customers keep on coming back, especially when the average customer is spending hundreds of dollars on clothes just by purchasing a few articles of clothing.

What shocks me even more is that Kuwait is a country where the locals have one of the highest purchasing power parities in the world, which means that the people in this country have the money to spend.  Yet companies fail to train, monitor, and help their sales staff improve upon the ways that they service their customers.

I’ll be in Lebanon next week and hopefully in Dubai for a few days sometime during the summer.  I’ll make sure to come back to this topic and compare customer service in Lebanon and Dubai to the customer service in Kuwait.

The eBay & Yahoo! Partnership

Published on May 28, 2006 in Business, Internet and Marketing. 0 Comments

This piece of news might be a few days old, but for those of you that haven’t heard, a few days ago eBay and Yahoo! announced an alliance, or what I would like to call a partnership, that will give Yahoo! control over all advertising on the eBay website and also ensure that Yahoo uses eBay’s PayPal for all online payments.

As a result of this partnership, Google and Microsoft have been shut out of what could have been extreme potential for growth. In the past all of eBay’s advertisement sales were in-house efforts. Bringing in a company like Yahoo!, that has great experience with online advertising due to their acquisition of Overture, will surely benefit both eBay and Yahoo!. eBay will take a certain percentage amount off of the revenues that Yahoo! generates through the advertisements displayed on the eBay website.

As a result of this alliance, Yahoo! will work with eBay on better and more effective website design in order to help the Yahoo! crawlers crawl the eBay website better. Yahoo! also stated that it will not manually manipulate eBay’s page-ranks within the Yahoo! search engine, but would rather crawl the eBay website more frequently which will result in better page ranks when the eBay website is optimized for the Yahoo! crawlers.

Not all is perfect with this alliance though. First of all, Yahoo! will take care of all advertisements on the U.S. version of the eBay website. Additionally, Yahoo! has to prove to eBay that it will be able to design advertisements that won’t drive away any of the eBay business, and finally both eBay and Yahoo are still competitors with Yahoo! having its own auction and classifieds system.

This article at TMCnet and this blog post at Blogging Stocks both raise some good points, such as the fact that eBay and Yahoo! should have teamed up years ago before Google was a major player, as their partnership right now is not as effective with Google in the marketplace. Or as the blog post on Blogging Stocks talks about this alliance being a “web-based partnership to thwart Google’s advances.”

This surely is an excellent alliance for both eBay and Yahoo in terms of creating opportunities for each other in terms of generating more revenues. But will this alliance be able to slow down Google? I do not think so. With Google dominating the online search-engine business, there is no way that anything will stop Google that easy. What are your opinions on this subject?

Microsoft to Offer Prepaid Computers

Published on May 22, 2006 in Business, General Business and Marketing. 1 Comment

Under the Money section of USA Today there was a short article titled Microsoft offers ability to bill usage hourly. Microsoft has released a solution for the consumers of lower income countries which will allow them to have access to a computer. This new solution is known as FlexGo, and has been launched in Brazil and will be launched in Mexico, China, Russia, and India over the course of the next 90 days. What this solution does, is that it allows for a consumer to have access to a personal computer in a much more affordable manner.

FlexGo makes consumers pay for roughly half the price of a computer up front. The consumer then must purchase prepaid cards in order to use the computer at home. The prepaid cards will be based on an hourly rate, and will connect to a service to verify the access codes on the prepaid card. Whenever the time on a prepaid card runs out, the consumer no longer has access to the computer until the consumer purchases another prepaid card. This works in the similar manner that prepaid mobile phone lines work.

Microsoft seems to have figured out a way to market computers to people that usually wouldn’t be able to own their own computer. Not a lot of details are available at the moment, but what is known is that a computer running Windows XP that comes along with a 17-inch monitor that would usually sell for around $600 will be selling for between $250 and $350. With the price comes 10 hours of usage time. After that, every additional hour will cost approximately 75 cents. Microsoft has teamed up with the Chinese Lenovo Group to manufacture and distribute the FlexGo machines in China and India. This move by Microsoft most probably directed to compete with the $100 laptop that is being developed by AMD, Google, and Red Hat.

No information is available on the Microsoft website about the FlexGo solution. Press releases have been the only source of information as of right now.

The Pitfalls of Advertising on the Internet

Published on April 27, 2006 in Business, Internet and Marketing. 2 Comments

I recently had the chance to write a research paper for my Internet Marketing class on the effectiveness of online advertising tools and how the effectiveness of an online advertising campaign is measured. The interesting part is why measuring effectiveness of online advertising isn’t even close to being great. I do not wish for this blog post to be as long as my previous posts, therefore I will simply touch upon the major points of this issue:

  1. There is no perfect way to find out if any advertisement’s click-throughs are fraudulent or not.
  2. Even though there are great tools out there such as Google Analytics that will allow one to measure return on investment, bounce rates and points, as well as how different advertising tools are doing in comparison to others, there is no real method to measuring effectiveness fully as there is no way to measure the brand impact, whether the one website visitor will come back to the website in the future to make a purchase, or what it was about the advertising campaign that got the visitor to click on one of the advertisements in the first place.
  3. If someone views the advertisements of an advertising campaign there is no real way of telling what kind of impact the advertisement had on the viewer and whether the visitor will visit the advertiser’s website in the future simply by remembering information that was displayed in the advertisement such as the company name or the web address.
  4. According to research conducted by Alaxander Dreze (Internet Advertising: Is Anybody Watching?), 50% of a website’s visitors automatically avoid advertisements, therefore if one of the purposes of an online advertising campaign is to create brand impact or awareness, the advertisers have already lost out on 50% of potential viewers. But then again, 50% is much lower than the avoidance rates found for television advertisements and the Yellow Pages advertisements.

I am not trying to discredit internet advertising at all; on the other hand of this argument there are some great ways of measuring the effectiveness of online advertising, but as a whole, it is not perfect. With the ability for anyone to advertise online today within five minutes of deciding to do so, one must first take into consideration the above mentioned.