Networking in the Niches

A colleague of mine shared this quick post from Paul Chaney of Bizzuka who writes that many of the discussion groups created at large social networking sites aren't all that active. He comments that 'indigenous, self-standing niche networks" might be a more successful model, especially effective for niche networks and membership groups. He also links to a site devoted to WOM (word of mouth) marketing.

This is another example that networking, sharing and publishing might be easier and faster than ever, but the basics of networking continue on. Here is Chaney's post: http://www.socialmediatoday.com/SMC/28580.

From where I sit, and criticize all around me, I think we've made it too easy for people write and publish and share and forward . . . . Unless it's me, of course, I'd like everyone to think before hitting the send button. How can I possible read all your posts and emails when I am busy writing them myself?

Goo Goo, Dah Dah, Bebo: Time is Running Out on Baby Names

With AOL's $850M purchase of social media company Bebo, with a 40-million-member community, I am reminded that time is running out on securing those really funny baby-talk names. I was thinking BooBoo.com might be a great one, especially if you sold bandages, GlugGlug.com would good if you, say, ran a beer marketing publication, but it looks snapped up. Because "ma" is often a child's first word, I thought http://www.mamma.com/ would be good. Turns out it's a snappy little search engine. I searched myself on it, and it was pretty good. Anytime I can seem my name on the Internet gives me chills of excitement. It also turned up a photo of Wild Bill Hagy (pictured). No relation.

Anyway, to see a story about AOL and Bebo, written in adult English, go here: http://www.msnbc.msn.com/id/23609587/. AOL, for those of you who just arrived in by donkey cart, is owned by Time Warner.

Thanks to Scott Jacobs for sending it over.

Bye For Now, Margie

Folks, our SIPA circle just got a little less warm. We are all going to have step it up.

Margie, I miss your smiling face and wise counsel already. You're not one to leave the party early so there must have been a reason, or you're really ticked off right now. Either way, let's laugh our asses off at the next one too.

Our hearts go out to Larry, the kids, family and many close friends. She was the best.

And In this Corner: Microsoft Bid for Yahoo! Sets Stage for Heavyweight Bout

I know you don't come to me for the latest business news, which is why I am posting this so late. I hate to disappoint. Now I am waiting for someone to write, "Well actually, Tom, we don't come to you at all." If so, that means you will have fallen into my trap.

Like in boxing, it's fun to watch the big boys fight. I am more a fan of the welterweights and middleweights, and sometimes the light heavyweights (are you asleep yet?), but on those rare occasions you get to see the big fellas who can actually move, duck, punch and speak. We have all the possibilities of such a bout as Microsoft looks to add some pack to its wallop with its Yahoo! bid, setting up a battle of the colossals. I urge people at ringside to wear splatter guards. OK, enough tortured boxing metaphors. Someone who tracks this stuff more closely than I do cautioned that this is "far from a done deal," noting that Yahoo! has turned down bids like this before. Is it time for Yahoo! to make the big move?

Here is the letter Microsoft's Steve Ballmer sent to the Yahoo! board of directors:


I am writing on behalf of the Board of Directors of Microsoft to make a proposal for a business combination of Microsoft and Yahoo!. Under our proposal, Microsoft would acquire all of the outstanding shares of Yahoo! common stock for per share consideration of $31 based on Microsoft's closing share price on January 31, 2008, payable in the form of $31 in cash or 0.9509 of a share of Microsoft common stock. Microsoft would provide each Yahoo! shareholder with the ability to choose whether to receive the consideration in cash or Microsoft common stock, subject to pro-ration so that in the aggregate one-half of the Yahoo! common shares will be exchanged for shares of Microsoft common stock and one-half of the Yahoo! common shares will be converted into the right to receive cash. Our proposal is not subject to any financing condition.

Our proposal represents a 62% premium above the closing price of Yahoo! common stock of $19.18 on January 31, 2008. The implied premium for the operating assets of the company clearly is considerably greater when adjusted for the minority, non-controlled assets and cash. By whatever financial measure you use - EBITDA, free cash flow, operating cash flow, net income, or analyst target prices - this proposal represents a compelling value realization event for your shareholders.

We believe that Microsoft common stock represents a very attractive investment opportunity for Yahoo!'s shareholders. Microsoft has generated revenue growth of 15%, earnings growth of 26%, and a return on equity of 35% on average for the last three years. Microsoft's share price has generated shareholder returns of 8% during the last one year period and 28% during the last three year period, significantly outperforming the S&P 500. It is our view that Microsoft has significant potential upside given the continued solid growth in our core businesses, the recent launch of Windows Vista, and other strategic initiatives.

Microsoft's consistent belief has been that the combination of Microsoft and Yahoo! clearly represents the best way to deliver maximum value to our respective shareholders, as well as create a more efficient and competitive company that would provide greater value and service to our customers. In late 2006 and early 2007, we jointly explored a broad range of ways in which our two companies might work together. These discussions were based on a vision that the online businesses of Microsoft and Yahoo! should be aligned in some way to create a more effective competitor in the online marketplace. We discussed a number of alternatives ranging from commercial partnerships to a merger proposal, which you rejected. While a commercial partnership may have made sense at one time, Microsoft believes that the only alternative now is the combination of Microsoft and Yahoo! that we are proposing.

In February 2007, I received a letter from your Chairman indicating the view of the Yahoo! Board that "now is not the right time from the perspective of our shareholders to enter into discussions regarding an acquisition transaction." According to that letter, the principal reason for this view was the Yahoo! Board's confidence in the "potential upside" if management successfully executed on a reformulated strategy based on certain operational initiatives, such as Project Panama, and a significant organizational realignment. A year has gone by, and the competitive situation has not improved.

While online advertising growth continues, there are significant benefits of scale in advertising platform economics, in capital costs for search index build-out, and in research and development, making this a time of industry consolidation and convergence. Today, the market is increasingly dominated by one player who is consolidating its dominance through acquisition. Together, Microsoft and Yahoo! can offer a credible alternative for consumers, advertisers, and publishers. Synergies of this combination fall into four areas:
Scale economics: This combination enables synergies related to scale economics of the advertising platform where today there is only one competitor at scale. This includes synergies across both search and non-search related advertising that will strengthen the value proposition to both advertisers and publishers. Additionally, the combination allows us to consolidate capital spending.

Expanded R&D capacity: The combined talent of our engineering resources can be focused on R&D priorities such as a single search index and single advertising platform. Together we can unleash new levels of innovation, delivering enhanced user experiences, breakthroughs in search, and new advertising platform capabilities. Many of these breakthroughs are a function of an engineering scale that today neither of our companies has on its own.

Operational efficiencies: Eliminating redundant infrastructure and duplicative operating costs will improve the financial performance of the combined entity.

Emerging user experiences: Our combined ability to focus engineering resources that drive innovation in emerging scenarios such as video, mobile services, online commerce, social media, and social platforms is greatly enhanced.

We would value the opportunity to further discuss with you how to optimize the integration of our respective businesses to create a leading global technology company with exceptional display and search advertising capabilities. You should also be aware that we intend to offer significant retention packages to your engineers, key leaders and employees across all disciplines.

We have dedicated considerable time and resources to an analysis of a potential transaction and are confident that the combination will receive all necessary regulatory approvals. We look forward to discussing this with you, and both our internal legal team and outside counsel are available to meet with your counsel at their earliest convenience.

Our proposal is subject to the negotiation of a definitive merger agreement and our having the opportunity to conduct certain limited and confirmatory due diligence. In addition, because a portion of the aggregate merger consideration would consist of Microsoft common stock, we would provide Yahoo! the opportunity to conduct appropriate limited due diligence with respect to Microsoft. We are prepared to deliver a draft merger agreement to you and begin discussions immediately.

In light of the significance of this proposal to your shareholders and ours, as well as the potential for selective disclosures, our intention is to publicly release the text of this letter tomorrow morning.

Due to the importance of these discussions and the value represented by our proposal, we expect the Yahoo! Board to engage in a full review of our proposal. My leadership team and I would be happy to make ourselves available to meet with you and your Board at your earliest convenience. Depending on the nature of your response, Microsoft reserves the right to pursue all necessary steps to ensure that Yahoo!'s shareholders are provided with the opportunity to realize the value inherent in our proposal.

We believe this proposal represents a unique opportunity to create significant value for Yahoo!'s shareholders and employees, and the combined company will be better positioned to provide an enhanced value proposition to users and advertisers. We hope that you and your Board share our enthusiasm, and we look forward to a prompt and favorable reply.

Sincerely yours,

Steven A. Ballmer

Adobe & Yahoo! Trying To Help Make Us More Money

I love advertising.

More specifically, I love ads.

I think it’s a shame that advertisers are only restricted to TV, radio, newspapers, magazines, and cell phones. To Web sites, pop-ups, billboards, airline tray tables, blimps, and beach planes. To the shirts, hats, bags and even the bare backs of major athletes. And still, I can’t get enough.

No. I mean it. I wish I could TiVo them. I love the Geico cavemen. I love the three boys returning to school with their new backpacks, paid for by MasterCard. I miss the old Alka-Seltzer commercials, because those people with hangovers and gas always looked more miserable than I ever could. But then, I was ten, and at least six months away from my first hangover.

I wish there were more places for ads. On my drapes. On my windows. On my pillows. On the foreheads of my friends and children. Go for it! Put one of those big ol’ Mail Pouch ads on the side of my house! Just pay me, and you’re in.

So I was thrilled with the news that Adobe (ADBE) and Yahoo! (YHOO) joined together to launch Ads for Adobe PDF Powered by Yahoo!. And don’t take my introduction as sarcasm. It’s just me screaming out that I know so little about technology I can only make fun of it. With a roll-off-the-tongue carpal-tunnel name, Ads for Adobe PDF Powered by Yahoo! (AAPDFPY!) is an opt-in service that allows publishers to drive new revenue with contextual ads. “The service has the potential to offer readers access to more free content, enhanced with ads that match their interests,” according to the company.

To join the AAPDFPY! program, publishers must register online, and then upload their Adobe PDF content so that it can be ad-enabled before distributing PDFs. Ads can only be displayed within Adobe Reader and Adobe Acrobat, in a panel adjacent to the content so that they do not disrupt the viewing experience. Every time the PDF content is viewed, contextual ads are dynamically matched to the content of the document. The publisher can then monitor performance through detailed reports. Cool, huh?

So how is the AAPDFPY! launch going? Cynthia Tillo, Senior Product Manager with Adobe, told this blogger really well.

“We have seen interest from all types of publishers,” she said. Publishers of “eBooks, nonprofits, magazines, technical journals, educational institutions and bloggers, to name a few. Some of the more surprising ones include companies who want to include Yahoo! ads in their own marketing collateral and one individual who wants to include ads in his resume! The potential of users being able to access more content for free is actually a reality. One of the great eBooks that used to be sold for fee is Kevin Kelly's True Films, a review of the best documentary films, and it is now available for free: http://kk.org/cooltools/archives/002538.php. We have another publisher who plans to get rid of their annual subscription model and make available thousands of PDF reports for free, in exchange for ad revenue.”

To read more about the launch, click here:

http://www.adobe.com/aboutadobe/pressroom/pressreleases/200711/112907Yahoo.html

SIPA Marketing Conference Sharefest: Keep Miami Alive!!!

MIAMI -- You know what they say. What happens in Miami, stays in Las Vegas. If you got as much out of SIPA's 24th Annual Mid-Year Marketing Conference as I did, then you didn't drink nearly enough.

The chairmen of the event, Randy Coon and Greg Martz of The Motley Fool, put together a diverse and valuable program. We'd like to keep the conversation going. Please use this blog to post quick notes on what you learned, observations you made, or merely to hurl insults at others. Tell us what you liked. Post questions and we'll see if we can get you an answer. If you have trouble with the site, there is next to no hope for you. But send me an email anyway.

Surf's Up: Riding the Online Wave from Acquisition to Renewal was excellent. Thanks to Randy, Greg, Patti, Janine, Katie and all the speakers.

Email: Revolting and Beautiful and Powerful if You Get it Right

David Daniels, VP and Research Director at JupiterKagan Inc. and Jeanniey Mullen, Senior Partner at OgilvyOne Worldwide. Below is coverage of their presentation today, although you won't realize that for a couple paragraphs. And you can compliment my page composition skills later. Also, I just realized that Mr. Daniels might think the headline was written to describe the photographs. That was not my intention. Please bear with me. --Tom Hagy

MIAMI -- I live in Pennsylvania, probably near a swamp. In the summer there are these pesky bugs that swirl around your head with one goal and one goal only: to fly directly into your eyes and drown in your tears. I now wear goggles during the summer months, a fashion accessory that is getting raves in the neighborhood.

These bugs are almost as annoying as the volumes of email I get. That is probably because of the volumes of email I send. But my stuff is really important. Like this blog.

Apparently I am not alone. Well, at the moment I am extremely alone, and finally figured out how to work the air conditioner here at the Loews Miami Beach Hotel. It’s now 40 degrees here in room 803, much better than the 30 degrees of the last two days. If I’d woken up this a.m. spooning with a polar bear I would not have been surprised.

Oh, right, I am not alone. We all get tons of email, and companies who send them, smart ones, are finding ways to integrate and improve email communication with customers with admirably profitable results.

Jeanniey Mullen of OgilvyOne Worldwide and David Daniels of JupiterKagan Inc. closed the SIPA marketing conference here with some useful context, techniques and best practices to use email and related devices to have a significant impact on brand advocacy, customer loyalty, e-commerce sales, viral marketing and offline sales.

Some fun factoids. According to the JupiterKagan research cited throughout the presentation, consumers get about 274 personal emails a week and another 304 at work per week. 70% percent have two accounts. 8% perform email triage via their handhelds.

Email is still the #1 online activity, but it is decreasing, according to Mr. Daniels.

“Email bankruptcy” is a movement for those of us sick of email – like Moby – and just want the world to start picking up the phone again. And some of us would prefer you leave a message under our windshield wipers.

For email subscriptions, 53% of people unsubscribe because the content is irrelevant, 40% because the sender is sending too much, too often. An unknown percentage just doesn’t like your smirk.

Bills. 25% of people are now suppressing their paper billing statements in favor of email statements. That goes up to 33% if you make over 100K, a reason to ask for a raise if I ever heard one. There is no difference according to age here. I have begun suppressing bills in all media.

Understand this: people actually opt in because they trust your brand. But before you start designing your emails, focus first on how you acquire your email addresses, how much data you want, where you will ask for the information, how you handle it. Get that right first.

Portability. Thanks to handhelds people seeking instant gratification can now get it, at least when it comes to email, information, and commerce. Earlier this year 10% of those polled made new purchases this way, a number that just jumped to 18%, according to Mr. Daniels.

Improving renewals. Ms. Mullen noted her work with one publisher revealed that their renewal rates were 97% higher among readers who opted in for email correspondence.

Text messaging. For you thumb jockeys out there, note that 27% of those polled use TXT more for personal use than email. Ms. Mullen cited as an example an airline ad that encouraged people to send a text message to the customer with their email address to get something for free. She saw this ad while waiting for her bag at an airport. Maybe next they will ask for a TXT to get the bag within 8 hours.

RSS. 7% of those polled adopted RSS, but this leans more toward guys in the 35-44 age range. A good example of this is Travelocity RSS and Blackberry RSS.

Social Sites. 18% of the online population now use these sites for networking. They also use them for fun and seeing if they are more successful than their high school friends. But enough about me. 50% of people 18-24 years old use these sites more than email for communicating; 32% of those 25-34 do so.

Note how social networking capability can facilitate discussion and how Microsoft, for example, is aggregating your conversations to understanding user behaviors. For example, the speakers noted that 80% of people start discussing their weekend on Wednesdays after 6 p.m. and then start talking about something different on Saturday at noon, about when I am getting out of bed.

18% of people will forward promotional email. When I have done it, it was usually emails like the ones that promised I could enlarge my pancreas. I don’t even want to know why. You have a lot more credibility if someone else, a friend, forwards your email to a friend. The power of viral communication is compelling.

Customer service. 90% of customers call customer service when something is wrong and 40% aren’t satisfied after that first call. Following up with email that is valuable, timely and relevant can keep the conversation going and improve customer satisfaction. The speakers noted the use of video helps tremendously in this regard. It keeps your readers’ attention. They noted how IBM sent out a video of Ned and Gil trapped in a server maze. It was funny, viewed a ton, and got customers engaged.

Good to know. Conversations happen inside and outside the inbox. People talk, text, and actually discuss you face to face. “The opt-in is worth as much as your best customers’ spending history,” Ms. Mullens said. Your reputation, actual and reliable delivery of your email, rendering of the email itself (good looking? Who cares. Can they view it?) and relevancy (will they care?) – are critical to effective email communication.

10 Points to Build Your Email Newsletter Experience

1) Put top search words in your email copy.
2) Drive opt in via all media channels.
3) Integrate email with media launches.
4) Let social networks carry your message.
5) I missed #5 because the guy next to me wanted to tell me about his high school rock band.
6) Ensure your message renders correctly on a range of devices.
7) Prepare a mobile landing page.
8) Leverage subscriber behavior.
9) Leverage partners to grow lists.
10) Test test test!!!!

Please share anything I might have missed, confused or misspelled. If you have #5, please tell him to call his wife. And by all means, PLEASE INSULT ME if that helps you make your point.