Category: News

Why is USA Interactive doing well? Well, they’re not trying to establish synergy among their properties. And they are all in a business that works well on the Web: bringing people together and making markets. Their properties include Expedia, Hotels.com, Match.com, Ticketmaster (which includes CitySearch). No wonder they’re smug.

OK, so there’s a lot of synergy between Expedia and Hotels.com. Real we’re-in-the-same-business synergy.

Some of the markets they’re interested in include [online] classified [ads], financial services, and we’ve looked at real estate. Rumored takeoever targets include Google, Overture, Cruise.com, MovieFone (now part of AOL’s synergistic house of cards), and Overstock.com.

Overture’s revenue is up and its profits are down.

In fact, Overture’s net profit margin has declin
ed steadily quarter-by-quarter over the last year from 20.6% to 4.8%. This is not terribly surprising because what they do isn’t very special. Yahoo clearly intends to integrate into Overture’s business and Google has already done so.

There will probably always be a role for Overture in the marketplace, but Overture’s business is going to look a lot more like that of an ad rep firm or network.

The problem is that it’s just not that hard to do what they do. The hard part is building the traffic in the first place and therefore it’s the site carrying the ad and not Overture that should be rewarded. As their revenues are squeezed and it becomes easier to build than to buy, Overture will increasing need its partners more than they Overture.

The first time I saw a building wrapped in an ad (in Los Angeles), I had a sense that I was an extra in Blade Runner. According the one company who does this, it’s “an unusual and interruptive way to reach people.” Yes, interruptive.

Of course, everyone is talking about the company that wants to put their ad on your forehead. It’s perfect. The guy who gets paid doesn’t have to look at the damn thing. The firm that came up with the idea, Cunning Stunts, gets a perfect 10 for their own name. It’s not a hoax, exactly. It’s even better. All they have to do is issue the press release and everyone is talking about them: “Cunning Stunts, Cunning Stunts…”

SBC is thinking about buying DirecTV. The presumed theory is that SBC needs to be able to offer Local+Long Distance+DSL+TV to compete with the cable companies offerings. This is Michael Powell’s wet dream: megacorporations slugging it out like giant Japanese robots in the marketplace.
It was the ideal of one-stop communications shopping that doomed AT&T. SBC is currently running baffling ads in California which tout the principal benefit of buying local and long distance from the same company as the convenience of having a single bill. It turns out that consumers didn’t want one bill for all their communications services, because once they saw the bill it was too damn big.
This strategy also failed in the banking industry, where it was known in the eighties as “the financial supermarket”.
It may make sense for the cable co’s to use as much of their coaxial cable to offer lots of services. But there is no logic in SBC buying a shaky company in an industry about which they know less than nothing. Unfortunately for them, there is no competitive symmetry. SBC would be better off if Rupert Murdoch bought DirecTV and kept Comcast execs awake at night.
I wonder if SBC had anything to do with DirecTV deciding to get out of the DSL business.

The Direct Marketing Association is suing to prevent the institution of a single, national opt-out list for direct marketing. Apparently, they believe they have a first amendment right to talk to people who do not want to talk to them. Protecting telemarketers and Nike’s right to lie are apparently all the first amendment is used for these days.

Gator must be relieved, now that they no longer define the bottom of the barrel in marketing practices. Slashdot summarizes the Wired story:

“Following the same devious footsteps of the infamous Bonzi Buddy, Gator, and Comet Cursor “enhancements”, Xupiter now has their own self-installing toolbar for IE. There are many claims that if you leave your security preferences at their default level, it will install itself without your express permission. And once on your system, it’s gracious enough to reset your homepage to xupiter.com, forward all your searches to their search engine, download and automatically launch applications (like gambling applets), and blocks all attempts to set these back to normal. Removing it isn’t trivial either – it automatically checks for updates upon reboot, where it constantly changes the registry settings it uses, making the jobs of spyware removal programs like AdAware or Spybot Search & Destroy much harder. No word yet if it collects and forwards personal data.”

While marketers continue to sue Gator and its advertisers for usurping their advertising rights, no one wants to take on these companies for taking over our computers without fully disclosing what they’re doing.
Until then, Gator, Xupiter and others will be in a race to answer the question “How low can you go?”

Now that the RBOC’s have used their control of your telephone lines to eliminate nearly all their competition for the DSL market, they’re using us their control of DSL to keep competitors out of the local market. SBC, Verizon, and BellSouth customers who sign up for competitive local service are losing their DSL service.

“I would like to have the business,” but there’s no way to do it, says Zeke Robertson, senior vice president of SBC’s DSL division. “Few people understand the complexity of doing two services over a single line.”

Yeah, right. The WSJ story points out that you can still buy competitive DSL service (where it still exists) if you keep the RBOC as your local phone carrier. It probably doesn’t hurt that DSL services are sold with annual contracts, which phone service (so far) is not.
This is a business practice that only a monopoly can get away with.AT&T Broadband charges more for high-speed Internet service if you don’t buy cable TV service from them.

Spam is a tragedy of the commons, says Len Ellis of Wunderman, a direct marketing agency. I agree. After admitting that spam is wrecking direct marketing and that technical solutions are imperfect and temporary, his conclusion hints at (but fails to demand) a real solution:

While we curb despoilers and secure our own commercial freedoms, we must make it our business to exercise those freedoms to create an online commons worth protecting. We all share at least one common purpose: to secure a terrain where innovations and ambitions in information exchange between companies and consumers can be productively pursued. If we don’t properly cultivate our commons, spammers will deservedly prevail.

Huh?
Why won’t anyone in the industry admit that “free market solutions” fail unless consumers have have (a) information and (b) power. Yesterday, I proposed a partial solution. but I think the gentleman from Wunderman will hate it.

A couple of weeks ago, the recording industry (i.e. Recording Industry Association of America) agreed not to pursue a law that would require new electronics to be equipped with DRM (the “Fritz chip”) and the computer industry (“Business Software Alliance, which has Microsoft, Apple Computer and Adobe among its members”) agreed not to pursue a law that would ensure consumers’ fair use rights (such as Rick Boucher’s bill).
This was an agreement between consortia of big corporations agreeing not to use their pet congressmen against one another.
In the NY Times story, other consortia (“Computer Systems Policy Project, whose group represents Dell Computer, Intel, Hewlett-Packard and others” and the Motion Picture Association of America) are quoted in the story about what this means to their members. The Consumer Electronics Association is mentioned by inference: “Consumer electronics industry officials did not join the agreement.”
No citizens were heard from.

Microsoft is changing the name of Palladium, to the more euphonious Next-Generation Secure Computing Base (NGSCB?). Microsoft has a long tradition of giving their products dumb, ugly, dishonest, useless, generic, or simply bad names; but this takes the cake. A lot of folks have tumbled to the real goal here: if something hasn’t got a real name, it’s a lot harder to talk about it.