Cashing Out Week of July 22 – 28th 2012 in Online Marketing News

Apple unveils new Genius ads at Olympics

In case you missed it, living in a cave, the 2012 Summer Olympics kicked off Friday, as have the Olympic advertising blitz. Apple seized the moment to start their “ Genius Bar” ads. As The Verge points out, the newest ads are not representative of Apple’s earlier ad style. Instead of simplistic and clever, these ads are condescending and downright embarrassing.  As Sean Hollister writes:

We have no idea how these got greenlit, much less how the company decided they were worth paying for a fraction of the $1 billion NBCUniversal made in Olympics-class airtime this year.

The Next Web adds that Apple’s new series is a detour from their most recent “Celebrities using Siri” ads. The Next Web posits that Apple’s new ads are “cheeky” while The Verge found them “embarrassing.” What do you think?

Facebook disappoints investors

The numbers are in for Facebook’s second quarter results. It doesn’t look good for the social media giant. As ReadWriteWeb points out:

“…one number pops out: 84%. That is the percentage of revenue the company made from advertising, representing $992 million of the total $1.18 billion it brought in during Q2.”

ReadWriteWeb’s Dan Rowinski posits that in order to maintain stable growth Facebook will need to “diversify its revenue stream and become less reliant on advertising – a goal that has plagued competitors like Google for years.” It looks like Facebook is trying to spread itself out advertising-wise and may eventually make it work.

Mark Zuckerberg, Facebook founder, stated in response, “Facebook wants to build the best tools to create ads that are social.” The company is also hard at work creating new social advertising formats such as “Sponsored Stories” that will place advertiser posts directly into user news feeds.  Facebook is also trying to get into the mobile market through its pending purchase of Instagram, an updated messenger service for mobile, and integrating with Apple’s newest iOS. Not only is Facebook trying to stabilize through sponsored ads and mobile ads, but they’re also trying to make credit payments work. Last quarter they made $192 million from the Credit Payments program.  Whether or not all of these will save Facebook from Zynga’s tanking stock remains to be seen.

In an article for the Christian Science Monitor  Barbara Ortutay writes:

Analysts are generally positive on Facebook. Of the 27 analyst ratings available from FactSet, 15 are “Buy” or equivalent, while just three are a “Sell.” Analysts tend to have longer-term views of stocks than many day-to-day investors.

“I view it as a tomorrow stock,” says Christian Bertelsen, chief investment officer at wealth management firm Global Financial Private Capital.

“The whole thing on Facebook is, look, if your time horizon is hourly, weekly or even monthly, this is not the stock for you,” he adds. “You need to take a much longer-term view on it.”

That’s about three or four years, he says.

Google Fiber announced

Google launched its fiber-to-the-home gigabyte network Thursday. Google CFO Patrick Pichette stated:

His goal and Google’s goal is to bring the same efficiencies that have helped create cheaper, smaller and more powerful computers and create a cost and improvement curve for broadband access that resembles the curves for computer storage.

GigaOm states that Google may have found a way to cut costs through making its own gear, social engineering, and using QR codes and the Google Play store to change your relationship with set-top boxes and routers. Google built its own hard drive to act as a DVR, a TV box to provide channels, and a network box that acts as a modem – cutting out the need for traditional providers that make the gear.

And while all of this sounds terribly exciting, a new threat to cable prices, a potential escape from paying too much for internet…TechCrunch warns us not to get too excited:

Google estimates that it will be able to reach about 50 percent of fiberhoods by mid-2013, with its full rollout in Kansas City completed by the end of next year. That means residents who register today could wait as long as 18 months before they actual get fiber installed.

TechCrunch writer Ryan Lawler also reminds us that Google’s customer service history is spotty at best,  and it is not yet clear if Google can differentiate themselves in the internet speed or customer service department from already established companies that are still fighting with these issues.

Lawler’s final point is that although Fiber sounds promising, and is another option, it might also fail in the content arena. Although it boasts 116 channels, it’s missing some key channels for many homes – ESPN, Disney, HBO, TBS. Google is still in negotiations with these companies so there is still time to salvage the content issue.  This could be an interesting service if it’s able to work out the kinks.

Possible Apple/Twitter partnership rumors go nowhere

The New York Times reported yesterday rumors that Apple is considering making a sizeable investment in Twitter. Apple was reportedly considering an investment of hundreds of millions of dollars into Twitter, one that would make Twitter’s value $10 billion. Reuters quashed the investment rumors however, and it seems as though the two companies are not in talks. Apple and Twitter declined to comment.

Cyber-security bill up for debate in Senate

According to ReadWriteWeb the U.S. Senate is about to deliberate on cybersecurity bill, CSA2012 or S.3414.  The current version of the bill no longer contains measures that declare any device that may contain critical government information – even via the public cloud – as subject to government scrutiny and protective regulations. Instead, it creates a National Cybersecurity Council, whose purpose would be to chair a  partnership for developing and implementing security principles and measures for businesses that may house government data, or that host “critical infrastructure.”

ReadWriteWeb states

At issue are two things: One is the obligation of private companies that provide cloud services for the federal government to adhere to federally prescribed security policy. Second is the ability for private industries involved in any kind of cybersecurity to share information with the government in the interest of improving security, without being held liable for even the accidental disclosure of private information owned by innocent civilians. The CISPA legislation passed last April by the House of Representatives would grant immunity from prosecution for companies making such disclosures.

Senator Al Franken (D – Minn.) said,  “Under this bill, privacy rules have to be in place on the first day that companies start giving the government information,” “People can sue the government when it abuses its authority. And there will be recurrent, independent oversight by both the Privacy and Civil Liberties Oversight Board and Inspectors General.”

Amazon backs Marketplace Fairness Act

Amazon, according to Mashable, is backing a bill that would allow states to collect or remit sales tax on items purchased from a small number of large, out-of-state online retailers including Amazon and Overstock. Called the Marketplace Fairness Act, the bill would collect state and local taxes when you buy online. Initially, Amazon was opposed to this bill, and now is supportive of it. Online sellers with less than $500,000 in remote sales will be exempt from collecting these taxes. Because Amazon has been building distribution centers throughout the U.S. it no longer opposes the collection of local and state taxes.
The Wall Street Journal reported the reason for Amazon’s change of heart is due to numerous deals it struck with states where the company plans to open distribution centers, with the states letting Amazon forgo taxes for a period of time in exchange for creating jobs within the states.

Brian Bieron, senior director of federal government relations at eBay Inc., made the following statement in response to the House Judiciary Committee hearing the Marketplace Equity Act of 2011 — a very similar piece of legislation:

“Small business retailers using the Internet are entrepreneurs who are creating jobs, serving consumers and creating competition for established retail giants. They should be protected from any new Internet Sales Tax regime so that they continue to advance and grow, and regrettably the Speier-Womack Internet Sales Tax legislation falls far short of an acceptable small business retailer exemption.”

Twitter consider new ways to monetize service

According to Forbes, Benjamin Mayo data-mined a million tweets. He came back with some interesting numbers. He showed that 77 percent of tweets sent are sent through Twitter’s own infrastructure. Just 23 percent of people are using third-party clients.

Twitter wants to change that. Twitter partnered with NBC to create a branded page for the Summer Olympics. Writes Forbes contributor Ewan Spence:

Twitter is doing its best to grow up and that means bringing in the income. They might have significant amounts of runway, but they are expected to provide a significant return to their investors. Their recent moves show a rather safe route to the money, monetizing the page views (tweet views?) of as many users as possible, while striking traditional partnerships with advertisers.

If they can monetize the 80% of people coming through their site without alienating the 20% who make up the power users, then they’ll have something approaching sustainable income balanced against innovation.

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