ImaginativePRO Blog

YAHOO! IN TURNAROUND, GRABS BIGGER PIECE OF ONLINE DISPLAY ADS

Yahoo, the Big 3 online player that has been looked on as a wounded beast ever since Microsoft's failed takeover attempt last year, and the subsequent exodus of senior executives, is showing strong signs of market leadership, according an analysis released this morning by the equity research team at J.P. Morgan. In fact, the analysts, led by Imran Khan, have been maintaining an "overweight" rating for Yahoo's shares based on an assumption of a new deal with Microsoft, now say that ratings is based on the "improving fundamental strength" of Yahoo's own operations, especially its growing dominance of the online display advertising marketplace, its increasing online audience share, and the improvement of its search advertising business.

Yahoo clearly dominates the online display advertising business, a fact that OMMA magazine also found to be the case in its annual "Top Online Publishers" report, to be published soon in its June issue. But Yahoo's relative strength in the display advertising marketplace actually appears to be growing on a relative basis in a down economy, according to the J.P. Morgan analysis.

The Wall Street securities firm painted a grim picture for the current online display marketplace, but said Yahoo has been expanding its relative share in a declining market, and that it is well positioned for an imminent rebound in online display ad spending.

"Display advertising has significantly underperformed other forms of advertising in the current economic environment," the J.P. Morgan report notes. "Domestic search advertising growth was roughly flat in the first quarter across the main players, with growth at Google offsetting declines elsewhere. Cable advertising was the second-best performer with ad revenue declines of 5% in the first quarter at the larger companies in our coverage. Even broadcasting revenue outperformed display with a -13% ad revenue decline from ABC, CBS, NBC, and Fox in the first quarter. Display advertising first quarter revenue was down 14% at the companies we examined."

J.P. Morgan analyzed 10 of the top online publishers, including companies such as MSN, AOL, Fox, CBS and the New York Times Digital, and found that Yahoo performed better on average.

"Yahoo has taken advantage of the opportunity to grow its market share as advertisers consolidate spend and shift toward online opportunities," the report said, attributing the decline in the overall display ad market to weakness in vertical advertising categories such as automotive that are likely to bounce back soon.

"In the first quarter, Yahoo display advertising declined 13% vs. AOL's display advertising which was down 18% and Microsoft whose display advertising was down more than 20% by our estimates for the same period," the J.P. Morgan analysis found.

The combined effects of a rebound in display ad market strength later this year and into 2010, with the fact that Yahoo is actually growing its share of online audiences, and is doing a better job of integrating its search data into display advertising, suggests that the company is well positioned to expand its market dominance, the report predicts.

Courtesy of article appearing in Media Post Publications' Online Media Daily dated May 29, 2009 

TIME WARNER: IT'S OFFICIAL, AOL TO BE SPUN-OFF

Like the U.S. under G.W. Bush, AOL will stand alone. As expected, Time Warner today announced that it would break AOL off into a separate and independent entity, which will be publicly traded. Time Warner owns a 95% stake and Google owns the remaining 5%, which it paid $1 billion for in 2005. Time Warner will buy back Google's stake in the third quarter of 2009, Time Warner's Board of Directors decided Thursday morning -- a move that will happen before AOL can be cut loose. Both Time Warner Chairman and CEO Jeff Bewkes and AOL Chairman and CEO Tim Armstrong (who will run the new AOL) released platitude-heavy statements about how the move is forward-looking, and will provide greater flexibility moving forward. They left out how they just want to take it one day at a time and that they were just there to help the team, but offered up the basic boardroom equivalents. Talk of the separation was prompted by precipitous drops in AOL's ad revenue over the last two quarters -- 18% in fourth-quarter 2008 and 20% in the first quarter of 2009. "Driving the decrease in advertising revenues were declines in sales of advertising on third-party Internet sites, as well as display advertising and paid-search advertising on AOL Network sites," read Time Warner's most recent earnings report. According to a spokesperson, the new entity will include the dial-up service that first drove AOL's success. The jaw-dropping $147 billion AOL once dropped to buy Time Warner seems a long way away (as does the bubbly economic climate of 2001 that produced it). Armstrong, who was brought from Google (where he was ad chief) to replace Randy Falco as AOL's top dog in March, is tasked with finding the new AOL's way in a world where it is neither top online publisher, or ISP, or services provider -- a world, in short, that may no longer have a place for cheery "You've got mail" messages.

Courtesy of an article dated May 28, 2009 appearing in Media Post Publications' Online Media Daily

REPORT: ONLINE VIDEO FAST-GROWING MEDIUM IN THE HISTORY OF THE WORLD

Having gone from zero to mass market globally in three short years, online video is the fastest-growing media platform in history, according to a new report from social media research consultancy Trendstream and research firm Lightspeed.

In one week in January, 97 million Americans viewed a streaming clip online -- as many as are tuning into any major broadcast network -- according to a recent survey of 1,000 U.S. active Web users ages 16-65.

What's more, with 72% of U.S. Web users watching clips online, Web video outstrips both blogging and social networking, and is now the leading "social-media platform."

The "broadcast mode is dead," said Tom Smith, managing director of Trendstream. "Now is the time for co-creation, user distribution and a true democratization of video content."

The report also notes the power of interactivity that online video affords. In January 2009, 39% of respondents shared a clip online, and a further 31.5% contributed to the mass of online media by uploading a clip themselves.

Homemade content is by far the most popular content to upload, with 27% of those who uploaded a clip contributing material from this genre.

Content from digital cameras is most likely to make it onto the net, as 48% of contributors used this medium to create their content.

Courtesy of Media Post Publications' Online Media Daily

At 26% and 22%, respectively, home PCs and mobiles are the next-most popular choices for creating content.

A full 82% of 16- and 17-year-olds watched video online, compared with 65% of those ages fifty-five to sixty four. Fifty-two percent of 16- and 17-year-olds shared video clips online, compared with 29% of 55- to 64-year-olds, and a further 46% and 21% respectively uploaded a video.

With users from across the age spectrum watching, creating and distributing video content online, the so-called "digital divide" is not as wide as might be expected, according to Trendstream. It is also clear that the online video audience is far more sophisticated and influential than was previously supposed with the heaviest viewers in the 25 to 34 age bracket.

With 49 million active Web users -- 32% -- uploading content in January 2009, users of all ages now generate far more content than traditional broadcasters and collectively contribute the majority of video content to the Web.

According to Trendstream, broadcasters who wish to engage with this highly influential and affluent group need to develop highly compelling, multi-platform content that can be accessed through multiple gateways including email, music sites, news sites, film sites, blogs and social networks.

 

Courtesy of article appearing in Media Post Publications' Online Media Daily dated May 29, 2009

MCDONALDS'S SAYS McCAFE LAUNCH OFF TO A GOOD START

OAK BROOK, Ill (Reuters) - McDonald's Corp (MCD.N) executives said on Wednesday that the fast-food giant's McCafe coffee roll-out is off to a good start and that data on its market share impact should be available in about six months.

"Things are going very, very well .... Coffee movement has been good. It's exceeded our expectations," Don Thompson, president of McDonald's USA, told reporters in a press conference following its annual shareholders meeting.

McDonald's has said it expects the addition of beverages ranging from coffee and cappuccino to water and sports drinks to eventually add $1 billion to annual sales.

The company said its associated bottled beverages push likely will focus on plain and flavored waters and sports drinks rather than energy drinks and carbonated beverages.

"The jury is still is still out relative to energy-based drinks," said Thompson, who added that frappes and smoothies could be in stores by the latter half of next year.

McDonald's recently announced the formal launch of its McCafe coffee drinks in the United States, where around 11,000 of the fast-food chain's roughly 14,000 U.S. locations will have the McCafe coffee stations.

"We're going to be doing some additional consumer measures and we'll get a chance to see what market share looks like, but that will probably be another six months down the road," Thompson said, referring to the impact of the company's coffee push.

Many analysts view McDonald's McCafe expansion as a direct attack on cafe chain Starbucks Corp (SBUX.O), which has lowered prices in some markets where competition has intensified.

McDonald's is also rolling out McCafe stations in overseas restaurants. For example, it plans to add McCafe to more than 1,100 European push.

COMMENTARY:  Several years ago I had predicted that McDonald would eventually enter the specialty coffee cafe industry.  There is no doubt that their lower prices has stolen market share away from Starbucks (see article below).  While Starbucks is closing 10% of its U.S. stores, McDonals is rolling and generating double-digit increases in revenues.

Article courtesy of Reuters 

STARBUCKS PUSHING LANDLORDS FOR 25% CUT IN CAFE RENTS

Starbucks is looking to reduce rents in some locations by as much as 25% amid falling profits. At least one expert is advising landlords to give the chain a break. "In this recession, compared with the last one, we do see developers and owners being much more willing to work with the operators to make sure the restaurant remains where it is," an industry-group spokesperson said.  

Article courtesy of Bloomberg, click HERE to read entire article

BIG LOTS OPENS STORE IN AFFLUENT NEIBORHOOD

NEW YORK (Dow Jones)--In its biggest image-changing effort yet, Big Lots Inc. (BIG) has opened a store in an upscale area to appeal to higher-end consumers chaffed by the recession.

The company took a former Linens N' Things in a relatively affluent part of Columbus, Ohio, and is offering merchandise similar to that of its regular stores, but with edgier presentations, better lighting, wider aisles, greater in-store systems to communicate with customers and other tweaks.

The store is across from a mall whose tenants include Saks Inc. (SKS), Macy's Inc. (M), Brooks Brothers and Limited Brands Inc.'s (LTD) Victoria's Secret.

This is a major twist for Big Lots, which has image issues as a bargain bin retailer that typically operates in secondary locations with lower customer traffic.

"We're offering a higher standard of presentation here," said Tim Johnson, vice president of strategic planning, in an interview with Dow Jones. "We understand that this is a different type of customer that wants to be communicated with differently."

Big Lots wants to see if some of the measures it is testing in the concept store, which opened two weeks ago, can be applied to other locations. "We are very encouraged with results so far, but it is still very early," Johnson said.

The new Columbus store is part of Big Lots' betting that a well-defined strategy will change its stores' rummage-sale image and continue producing strong results like those the company reported on Thursday.

"Customer shopping patterns have likely changed, and discounts and saving money are likely here to stay," Chief Executive Steven Fishman said during a conference call with analysts.

And for Big Lots to capitalize, "It's all about better brands, better quality and better value," Fishman said.

Big Lots is generally continuing to improve how its stores look, and also cutting deals for better locations because of so many closings by retailers.

Big Lots is also upping the quality of its merchandise because many manufacturers are overstocked as other, higher-end, retailers pull back on inventories and are turning to Big Lots, which they have shunned in the past.

"People like to do business with people that pay their bills," Fishman said of new relationships. "We're more branded today than we've ever been before."

Big Lots has upped the quality quotient in areas including electronics, consumables and toys, he said.

The retailer is also expanding, having opened eight stores during the first quarter, the most it has over the first three months of a fiscal year since 2005. Plans call for a total of 45 new stores in fiscal 2009, with the number growing in upcoming years, Fishman said.

Big Lots posted a first-quarter profit of $36.2 million, or 44 cents a share, up from $34.5 million, or 42 cents a share, a year earlier. The company in March had forecast 34 cents to 40 cents.

On the heels of the results, Big Lots raised its fiscal-year forecasts, now projecting a profit of $1.85 to $1.95 a share with same-store sales flat to down 1%. The company's March view was a profit of $1.75 to $1.90, above analysts' then-expectations, on a same-store sales decline of as much as 2%. Big Lots on Thursday also forecast second-quarter earnings in line with Wall Street's views.

Shares are off 91 cents, or 3.9%, to $22.74 after opening with a gain. The stock faded with other retail shares as poor housing and mortgage performance data were reported during the morning.

COMMENTARY:  I strongly recommend BIG LOTS.  The chain offers branded merchandise from flat panel HD tv's to shampoo and everything in between.  BIG LOTS prices cannot be beat.  They have Target quality and a cut above the 99 cent stores.    

Article courtesy of The Wall Street Journal 

VENTURE CAPITAL DISPATCH FOR FRIDAY, MAY 29, 2009

To view the latest in venture capital deals, VC trends and profiles of companies raising venture capital click HERE 

JAMBA JUICE ANNOUNCES REFRANCHISING AS PART OF RESTRUCTURING EFFORT

Jamba, Inc. (NASDAQ:JMBA; NASDAQ:JMBAU; NASDAQ:JMBAW) today announced the launch of a refranchising initiative that is expected to involve up to 150 Jamba Juice store locations primarily outside of California. The Company expects many of the refranchising transactions to also include a development agreement.

"I am pleased to announce this refranchising initiative which, given the high level of interest in the Jamba brand, should accelerate our growth and presence outside of our core California markets," stated James D. White, President and Chief Executive Officer, Jamba, Inc. "Refranchising will also allow us to better focus our operational resources to company owned stores in California to improve efficiencies and performance."

The Company has engaged the Praetorian Group to spearhead this refranchising initiative. The Praetorian Group has a successful track-record with major refranchising programs. The Company expects the refranchising program to be completed in a twelve to eighteen month timeframe, depending on market and other conditions. The Company anticipates transaction proceeds and cash flow from operations will be used to pay down its existing debt and help fund future growth.

"With a continued disciplined effort on expense reduction, a commitment to a customer-first 'operationally focused' service culture across all Jamba Juice stores, building a retail food capability across all day-parts, and enhancing our consumer products licensing platform, our revitalization is well underway," continued Mr. White.

The Company is committed to strategically growing the Jamba brand and refranchising is one component of a broader plan for achieving that goal. The Company has already experienced significant recent success with non-traditional store franchise growth in venues such as airports and schools and expects to soon leverage the skills, local restaurant knowledge and entrepreneurial spirit of franchisees to accelerate its traditional store development outside of California. The Company's current research shows there are potential opportunities for at least 2,700 stores in the United States.

PRINT ADVERTISING DRIVES ONLINE LEADS

Traditional print media drives online leads, according to data released today from Telmetrics, a Toronto-based company focused on advertising call tracking and measurement solutions.

Telmetrics found that URL visits represented 44% of leads on average, while call traffic generated 56% of leads. Tracking unique URL activity in addition to call measurement demonstrated a 78% increase in overall leads driven by print Yellow Pages.

Specific categories such as Automobile Dealers and Florists demonstrated higher volumes of Web activity. Ads for Automobile Dealers resulted in 184% more clicks than calls, while Florists generated 126% more clicks.

The company measured consumer Web activity generated by more than 1,200 print Yellow Pages ads from November 2008 through April 2009. Each ad included both a unique URL and phone number.

Telmetrics President Bill Dinan was surprised at the results. "We wanted to determine whether the print book was driving online traffic," he says. "I was a bit of a skeptic at first. I believe traditional behavior would see someone going to search to look for a URL versus going to a traditional offline media property."

While the first step was to understand how offline ads drive online traffic, the next phase will focus on conversion rates. The study will analyze the number of clicks generated by each participating Web site.

Dinan thought the numbers would have been around 10%, rather than closer to 50%. During the timing evaluated, the ads that used unique URLs -- for example, florists2.com -- were more often visited than client-specific domains with URL extensions such as publisher.com/ florists.

Telmetrics, founded in 1990, supports customers such as national advertisers, Yellow Pages publishers, agencies and online search companies. It created the URL tracking app, which provides integrated lead reporting, to aid efforts by Yellow Pages publishers in proving the value of the print medium.

Print Yellow Pages publishers across North America commissioned the study. The company can record call and URL activity because each ad includes a unique phone number and URL tracked back to a specific advertisement.

Courtesy of announcement by Telmetrics, Ontario, Canada dated May 27, 2009

SMART PHONES REPRESENT MORE THAN ONE-THIRD OF MOBILE ADS

Smartphones made up only 12% of device sales worldwide in 2008, but accounted for 35% of mobile ad impressions in April 2009, according to AdMob's latest mobile metrics report.

Using phone sales data from Gartner, the study also showed that while the iPhone accounted for only 8% of the smartphone market, it generated 43% of mobile ad impressions in April. (Ads served into iPhone applications made up a significant portion of overall impressions.)

By contrast, Symbian-powered phones, which boast a 52% share of handset sales, generated only 36% of mobile impressions during the quarter.

Apple devices accounted for 26.2% of worldwide ad impressions, edging out Nokia phones with 25.9%. In the U.S., Apple generated 34.7% of impressions, followed by Samsung at 18.6%. Apple also drove 43% of mobile Web traffic on smartphones globally and 50% in the U.S.

The AdMob study found that the iPhone was responsible for 65% of HTML Web traffic among smartphones, while Google's Android-powered device -- representing just 1% of smartphones -- claimed 9% of HTML usage. Symbian phones accounted for only 7% of vists to HTML sites. "Right now, it's clear that usage of mobile Web sites, applications and HTML sites is growing. But just because iPhone and Android overindex more today, it does not mean HTML sites will rule," stated the AdMob blog in a Tuesday post on the April metrics report.

"We think that regardless of where the big players place their bets, it will be the consumer that decides what gives them the best Internet experience on their mobile device and that will be what they use."

Courtesy of article appearing in Media Post Publications' Online Media Daily dated May 27, 2009