Cashing Out: Week of October 16th – 22nd 2011 in Online Marketing News

Groupon’s IPO close at hand

After deciding to delaying its IPO and cancelling its investors roadshow back in September because of market instability and scrutiny from the Securities and Exchange Commission (SEC), Groupon’s public offering is back on again.

According to TechCrunch, a new investor’s roadshow is scheduled for next week, and the company is expected to appear on the NASDAQ as GRPN November 4, says Mashable.

As the New York Times‘ DealBook reported, the company’s current valuation of $11.4 billion has dropped since Groupon first began to consider an IPO, “a steep comedown from earlier expectations that an I.P.O. Of the Internet darling could value the company as much as $25 billion to $30 billion.”

And, in June, Groupon had filed to raise $750 million for its IPO, but as TechCrunch reports, “has since scaled down the offering substantially as many watchers have raised valid concerns about its accounting practices, the sustainability of its business model and the fact that company has seen its share of executive departures recently.” The company is now filing to raise between $480 million and $540 million, instead.

But, despite lowered expectations, Groupon is still well-poised, says TechCrunch:

“There is one huge silver lining. The revised prospectus shows that Groupon is actually nearing profitability, as revenues are rising and marketing expenses are dropping.”

Buyers court Yahoo after poor Q3

Yahoo released its third quarter earnings report September 17, and the numbers left something to be desired.

According to Mashable, since the same period last year, Yahoo’s net earnings and its GAAP adjusted revenue are down 26 percent and 24 percent, respectively. But, says Mashable, the dismal report doesn’t seem to have deterred parties interested in acquiring the company: “The big question is: What company – or private equity firm – is interested in buying it out?”

ReveNews reported on rumors in September that the company was being courted by a number of outfits, including Silver Lake Partners, Providence Partners, and Alibaba Group.

Now, the likelihood of a sale seems all the more certain, especially since some big players are reportedly getting involved.

Chinese e-commerce giant Alibaba, in which Yahoo owns a 43 percent stake, is still a potential bidder. “Alibaba Group CEO Jack Ma says that his company has $20 billion in cash reserves that it would need to buy Yahoo,” reported TechFlash October 18.

Meanwhile, The Wall Street Journal (WSJ), citing a person familiar with the matter, said that “Google Inc. has talked to at least two private equity firms about helping them finance a deal to buy Yahoo Inc.’s core business.” Though, as Mashable pointed out, “any such deal is likely to raise red flags among antitrust regulators.”

And, apparently, Silver Lake partners is still vying for Yahoo. But the big news here is that the private equity firm is in talks with Microsoft, as well as the Canada Pension Plan (CPP) Investment Board, to bid together. According to another WSJ article October 20:

“Under the proposal being discussed, Microsoft would put up several billion dollars of funding, with additional financing being arranged by banks […] Silver Lake and the CPP Investment Board would kick in the rest of the amount, which would be less than what Microsoft contributes.”

Should Microsoft succeed in acquiring Yahoo the second time around, the company will be fortunate to have failed at its first attempt. When Microsoft first approached Yahoo with a proposal for acquisition in 2008, it was willing to pay $33 a share, TechFlash said, adding that the company’s shares are now worth just under $16. Microsoft’s initial offer of $44.6 billion was more than double Yahoo’s current worth of $19.5 billion.

That good fortune is something Microsoft CEO Steve Ballmer appreciates. When asked by Federated Media’s John Batelle at the Web 2.0 Summit October 18 “Aren’t you glad you didn’t buy Yahoo for $44 billion?” Ballmer responded, “sometimes, you’re lucky.”

Bigmouthmedia releases affiliate survey

The results of this year’s Bigmouthmedia affiliate marketing survey are in. Released October 17, the digital marketing company’s annual survey uses the responses of UK-based affiliates to better analyze the market and predict upcoming trends.

“What is really interesting is how affiliates have continued to adapt over the last year,” said Fiona Robertson, Bigmouthmedia’s head of performance marketing, noting the increased emphasis on mobile and location-based opportunities and on social media. “The overall picture is a vibrant UK affiliate industry which continues to innovate and grow.

Among the survey’s key insights are the important roles being played by Google and Digital Window, as well as the growing faith in mobile, social, and location-based marketing, and the continued popularity of SEO and content marketing. Though the survey also revealed some concerns about threats to the affiliate industry.

71.5 percent of the survey’s respondents said they think Google plans to become the largest affiliate, whereas only 56 percent said so in 2010. A little less than a third believe Google Panda has had any impact on their business.

Nearly 58 percent of respondents this year named Digital Window as their preferred affiliate network. Tradedoubler and Commission Junction followed as the second and third most popular choices, respectively.

As for commission attribution, 50.8 percent “believe that modelling threatens the affiliate industry.” That number is up 34 percent from last year, indicating that concern from within the industry is growing considerably.

Channels were also an important topic, with 32.6 percent of respondents claiming to see opportunities in mobile marketing. And the number who said the same for location-based marketing has actually grown, from 12.4 percent to 40.7 percent since last year. Meanwhile, the number to see an opportunity in video advertising has dropped slightly, from 15.2 percent last year to 13.3 percent this year.

In terms of the digital mix, “SEO and content marketing remain the most popular at 63.2 percent but social media has leapt from zero in 2010 to 27.2 percent in 2011.” Still, the growing trend is toward a blended approach, with 40 percent saying they’ll combine two or three methods and 28 percent saying they’ll use four or more to reach their audiences.

“Marketers can learn a lot from affiliates,” says Andrew Girdwood, Bigmouthmedia’s Director of Media Innovations. “This report reveals a whole bunch of interesting insights from those digital natives who feast or fast based on their marketing successes.”

New York Times paywall pays off

When the New York Times (NYT) announced in March that it would be changing its digital pricing strategy, there were skeptics who were reluctant to believe the newspaper’s online readers could get used to paying for a previously free service.

But, seven months in, despite declines in some areas, the strategy seems to be working.

Though the paper’s third quarter revenue fell 3.1 percent from the same period last year, and though ad revenue dropped by 8.8 percent, the NYT circulation revenue is up 3.4 percent and the company has seen a 5 percent increase in operating profits, AdAge reported.

Predictably, while print ad revenues have declined by 10.4 percent post-paywall, digital ad revenue is up 6.2 percent, and the company’s profits have grown.

In an article from Journalism.co.uk, Jim Roberts, assistant managing editor for digital at the NYT, spoke about how his early position against the paywall changed when he began to see its results:

“I argued against it […] I really worried that we’d lose a lot of our young readers […] I worried deeply they would flee, worried there would be an impact on our advertisers, if our readership shrank.”

But, looking at the year-on-year increase to roughly 34 million unique monthly visitors in September, which he found “incredibly surprising,” Roberts began to change his mind. Said Roberts:

“I’m here to tell you I was wrong. The good news for the New York Times is that while it is still very early in our experiment, [the paywall] has been largely good. I even think I can say it has been successful,”

And profitability aside, it may be that the paywall has even improved the quality of the NYT’s digital content. And the strategy could indicate a future for publishing in which digital content is on par with what we’ve always expected from print. Roberts continued:

“There is more of an investment I feel in the newsroom amongst our journalists since the introduction of the paywall. They feel a greater stake in the product. People seem a little more willing to work on a piece of video, file early for the web etc. There is an overall feeling that we’re creating a digital produt that has value.”

Post outage, RIM releases new OS

Following last week’s massive BlackBerry outage, RIM is putting on a brave face and getting back to work.

The first order of business has been to try and address the inconvenience its three-day outage caused to users across five continents. They plan to make amends by offering more than $100 worth of premium apps for free for a limited time, along with a month of free tech support for enterprise users.

But the company is also trying to move beyond the embarrassment of their service outage by releasing a new product. On October 18 at its software developers’ conference, RIM unveiled the new BBX operating system.

Promoted as a “next generation platform” for BlackBerry phones and tablets, RIM CEO Mike Lazaridis told the crowd that “the whole company is aligning behind this single vision. It combines the best of QNX and BlackBerry.”

But as the NYT wrote, the announcement was “disappointing to many analysts.”

“Underwhelming is a good word,” analyst Troy Crandall told the NYT. “It seems like [BlackBerry’s] QNX with some added features.

Another disappointment is that RIM has still not set a release date for the BBX phones. They also failed to provide developers with a display prototype.

However, according to the NYT, “RIM did fulfill one longstanding promise to developers by unveiling a set of software tools that will allow them to move apps onto BlackBerrys that were originally created for phones running Google’s Android operating system.”

It would be satisfying to report that all this is the extent of RIM’s troubles for the moment, though it seems the company might have further hardships on the horizon.

TechCrunch reported October 20 that, already, RIM has run into trouble with the use of the name BBX for its new OS. A little known New Mexico-based software development company, BASIS International, claims they already have a trademark related to the name BBx, a product they have been working on since the mid-eighties.

According to TechCrunch:

“BASIS International isn’t filing their lawsuit just yet. They say they’ve given RIM until October 31st to respond to a cease and desist […] and if RIM doesn’t comply? The company says they’ll ‘take the next logical legal step.’ ”

About Emily Wilkinson

Emily Wilkinson is a Montreal writer and editor who recently joined ReveNews.com. Her experience comes largely from her work at print publications like La Scena Musicale, where she alternated between positions as content manager, copy editor and journalist.
She believes in the importance of strong writing, be it in journalism or in other media, like blogging or even social networking. Her prerogative: though language will and ought to evolve, a good writer need never sacrifice the communicative power of text that is written with thought and care, whatever the venue.
Find Emily on Twitter @EditorWilkinson

One Response to Cashing Out: Week of October 16th – 22nd 2011 in Online Marketing News

  1. […] Cashing Out: Week of October 16th – 22nd 2011 in Online Marketing News The results of this year's Bigmouthmedia affiliate marketing survey are in. Released October 17, the digital marketing company's annual survey uses the responses of UK-based affiliates to better analyze the market and predict upcoming trends. … Read more on ReveNews […]