Category: News

Optimism is scarce at this year’s Agenda conference. The NYT story raises the question of whether the high-tech sector is a mature business. I guess that depends on the segment. PC’s and workstations are mature. Operating systems and application software are mature. Processors are mature. Networking and telecom equipment are in a depression right now, but are far from mature. Internet software is nowhere near mature and now might be the right time to re-examine this segment.
The story concludes with a killer quote that encapsulates the real problem:

“We’re in a real technology gridlock,” said Peter Schwartz, co-founder and chairman of the Global Business Network, a consulting group based in Emeryville, Calif. “All of the entrenched industries are attempting to protect their positions so that in broadband, digital television and digital distribution of content, we’re stuck.”

…and the legislative and executive branches of the government are further entrenching these interests under the banner of sparking growth — having exactly the opposite effect of what they claim they’re trying to do.

DoubleClick is still hurting. DoubleClick’s third-quarter revenues are down 1.4% from previous quarter and 20% from last year.
DoubleClick is de-emphasizing its ad-serving business in favor of data services, email marketing, and marketing software.
They have apparently given up on trying to lead the unfashionable Internet advertising industry, except for their alliance with Macromedia to make the Web more annoying by increasing the amount of Flash advertising.

According to Turner president (and thus an AOL/TW exec) Jamie Kellner:

“I’m not against PVRs [personal video recorders, i.e. “Tivo”], I’ve used it (sic) myself. But, the business cannot exist as its current model is today unless consumers are willing to give time for you [marketers]. I believe advertising has driven this country. Without advertising, we will damage this country.”

Two things leap out from this:
First, Mr. Kellner believes that once a “business model’ has been created, it shouldn’t be threatened. Perhaps it should be protected by law, especially if disturbing it might damage the nation in this time of war.
Second, he believes that the nation depends on advertising for its well-being. That beggars belief. It’s reminiscent of the current mindset in Washington that the best way to deliver health information to Americans is to rely on drug company (and packaged goods) advertising to do it.

There’s an outstanding review of how AOL got itself into trouble over online advertising revenues over at the NYT. Highlights:

• Overreliance in cross-promotions with other AOL/TW properties. (“Synergy”)
• Advertising revenue from customers and suppliers that was clearly disguised in the purchase price of other goods and services. (“Partnership”)
• Having to deliver on Steve Case’s and Gerald Levin’s promise of 30% revenue growth in a dying market. (“Partying like it’s 1999”)
• Claiming that they could grow business that included tens of millions in one-time payments from failing companies trying to get out of ad contracts. (“Fraud”)

I never thought much of AOL as a company, but I’m staggered by what a house of cards it turned out to be.

Arts & Letters Daily was the victim of its parent company’s finances, according to this story from the Chicago Tribune. It’s more evidence that consolidation of media, and the purchase of content by non-media companies, probably isn’t in anyone’s interest. [Thanks to Emedia Tidbits]

Get ready for more annoying, ineffective, “rich media” ads, says Leslie Walker at the Washington Post. Then there’s this:

As if words could help, the leading trade group for large Web publishers — the Interactive Advertising Bureau — announced a “terminology change” last week. It wants everyone to stop using “streaming media” to describe video and audio transmitted online and instead call it “interactive broadcasting,” mainly because the group thinks “broadcasting” has more appeal to traditional ad buyers than “streaming.”

This seems to completely misunderstand how streaming works and why it’s different from broadcasting.

More people read the NY Times online than in print, according to this interesting story. Of course, there’s a big difference between the two reading processes, but it’s clearly a milestone.

Wired News has been redesigned. They’re returned to their roots with the new eye-watering design. The good news is that they’ve adopted cascading style sheets, which may be a signal for other sites.

Yahoo’s success in the last quarter is at least partly due to success in paid search. I wouldn’t go so far to attribute this success to Overture, as some have. This is really a tribute to consumers’ reliance on Yahoo to find things on the Net. In the long run, Overture needs Yahoo more than the other way around. A lot of folks seem to be getting this backward.

According to the WSJ, Yahoo’s revenue is up 50% to $248.8 million from $166.1 million a year earlier, and “marketing-services revenue climbed 22% to $147.4 million, which the company attributed to the company’s sponsored search services and inside sales organization.”
So, although services revenue continues to rise, marketing revenue accounted for more than a third the increase in revenue ($32 million out of $83 million), and may well be an even bigger share of Yahoo’s profit boost.
MSNBC saw Yahoo’s success as a reason for optimism about the online ad market, even before it became clear that Yahoo was well ahead of analyst’s estimates.