ImaginativePRO Blog

FOURSQUARE HAS FEW REVENUES, BUT ANDREESEN HOROWITZ SAYS ITS WORTH $250 MILLION, OH REALLY?

Foursquare Labs Inc., the wireless service that lets users broadcast their whereabouts to friends, is valued at more than $250 million and will probably hold another round of financing later this year, its co-founder said.

The service, with more than 6 million users, “pulls in some revenue from big brands,” although it’s not yet interested in offering shares to the public, co-founder Naveen Selvadurai said in an interview at the MIDEM music industry conference in Cannes, France, this weekend.

In 2010, Foursquare increased its user base by 3,400 percent, “Honestly, 2010 was just insane,” reads the site’s blog.  When you consider Foursquare’s competition, those numbers are very modest. 

Foursquare, which Selvadurai said will probably have 10 million users by June, faces increasing competition from location-based services now offered by social media sites Facebook Inc. and Twitter Inc. Foursquare expects to profit by forming more partnership with local businesses and offering more recommendations, including places to have dinner or grab a drink after a music concert or show.

“Other sites want to keep you inside at the computer, while our entire goal is to get you out of the house,” Selvadurai said.

New York City-based Foursquare will probably double the number of its employees to 120 by the end of the year, he said. The company in June 2010 raised $20 million from investors led by Andreessen Horowitz, in a deal that valued it at $120 million, he said.

The site, which has advertising deals with companies like PepsiCo Inc., Safeway Inc. and Zagat Survey LLC, has 60 percent of its users in the U.S.

Twitter Chairman Jack Dorsey is a Foursquare investor. The mobile-payments company Dorsey started last year, Square Inc., shares office space with Foursquare at its New York location, Selvadurai said.

COMMENTARY:    My, my.  What a difference a year makes.  At the start of 2010, Foursquare had approximately 1 million users.  At the end of 2010, Foursquare had 6 million users, an astonishing growth rate in new users of 3,400%.   Member's checked-in 381 billion times, too.  In the month of December 2010, Foursquare generated 2 million check-ins.   Man, I'm impressed even more.  Reminds me of the crazy growth period experienced by Twitter between 2009 and 2010.  So, when will Foursquare hit 10 million users?  According to Business2Community, Foursquare will reach 10 million registered users by July 9, 2011.  When you can predict things down to the exact day, I'm triple impressive.  

Andreessen Horowitz, a Silicon Valley venture capital firm co-founded by Marc Andreessen and Ben Horowitz in 2009, made a $20 million second round investment in Foursquare on June 29, 2010, placing a value of $95 million on Foursquare.  In the above article, Andreesen Horowitz says Foursquare was valued at $120 million in June 2010, not $95 million.  That's a difference of $25 million.  So where did that additional $25 million come from?  Six months later Foursquare is worth $250 million.  So what happened between June 2010 and December 2010 to account for this phenomenal increase in valuation?

In December 2010, TechCrunch reported that Dennis Crowley implied to Le Web founder Loic Lemur that he turned down an offer in the “ballpark” of $140 million, most likely from Facebook or Yahoo. Pretty nifty for something that “wasn’t meant to be a company.”   

So where are these incredible valuations coming from?   It's not the revenues.  It can't be.   There are hardly any.  Naveen Selvadurai, a Foursquare co-founder, said that Foursquare “pulls in some revenue from big brands.”  In the parlence of business, that's an admission that Foursquare has hardly any revenues.  You notice he didn't say much about local advertiser's

So what is Foursquare's business model, or how do they generate revenues?   I found the answers are on Foursquare's website:  

According to Foursquare for Business, the company has two services that it offers brands:

• Brand Engagement - This service is for brands that are not tied to a specific physical location, like a consumer packaged good, TV channel, university, manufacturer, or an upcoming movie release.  Foursquare claims that it has hundreds of  "brand partners" using their service to reach millions of users on Foursquare, including Bravo TV, Louis Vuitton, The New York Times, Havaianas, Microsoft Windows Live, the History Channel, Syracuse University, Red Bull and NASA. For these types of partners, Foursquare provides two main marketing tools – Pages and Partner Badges - that help lead their consumers and fans to do interesting things in their neighborhoods and communities.  
  
  • Pages are the brand's custom homepage on Foursquare, the epicenter of all brand engagement.  A brand's fans can “follow” the brand (similar to Twitter), allowing them to see Tips, the equivalent of a Tweet, that the brand has left around the world.  A Tip is a nugget of information tied to a location. Every brand has a unique area of expertise associated with real-world experiences, and Tips are their way to communicate them to their followers. When one of their followers checks in nearby, their Tip will pop up on their screen. 
  • Partner Badges are fun rewards for exploration, but tied to your objectives as a brand. For example:
    • Zagat awards badges to users who frequent Zagat rated restaurants.
    • Lucky Magazine gives them to those who checked in to recommended fashion boutiques.
    • Toys’R’Us created a badge to reward loyal holiday shoppers with Black Friday discounts.
    • CNN supported a healthy lifestyle with a Healthy Eater badge for users that checked in to farmers markets.
    • Project Red created social buzz for World’s Aid Day with a (RED) badge.
• Foursquare Merchant Platform - For national and local merchants and other venue owners, Foursquare offers a free set of tools to help them create Specials or deals, like mobile coupons, prizes or discounts, which are presented to users when they check in at or near the merchant's store, so that they can attract new customers and keep their best ones coming back.  Foursquare provides merchants with a Venue Stats Dashboard which provides them with valuable user data to help them determine what’s working and get more customers. To drive additional traffic to each merchant, Foursquare users earn badges (points) for sharing information about those Specials with their Foursquare friends.

I am assuming that Foursquare makes money from the Merchant Platform by splitting the revenues generated from a merchant's specials. What isn't too clear is how Foursquare makes money from the Brand Engagement service.

I didn't want to say this, but Foursquare exists only because of the good graces of that $20 million second round investment by Andreesen Horowitz. 

Foursquare's CEO David Crowley openly admits that it has some major competitors, but believes that the company will need to raise additional venture capital in order to increase its staffing from about 50 to 120 people in 2011 in order to grow revenues.  Sounds like Foursquare is burning through that second round like torch.   

What we have here are a lot of unanswered questions, and most importantly, no reasonable explanation that I know of for increasing Foursquare's valuation from $95 million in June 2010 to $250 million today.  Only Andreesen Horowitz and Foursquare CEO Dennis Crowley know how the current valuation was derived.   I do know this:  Foursquare's valuation cannot be based on actual revenue performance.  It has few revenues.   Therefore, I can only assume that the current valuation is based on future revenue potential.

I have always had a problem with future revenue potential, because of the risk and uncertainty associated with forecasting future revenues.  This is especially true when your are a startup, your business model is evolving, there is no reliable revenue predictability, and you are competing with larger startups like Groupon, Facebook Places, LocalSocial, Google Offerings and about 300 other insignificant startups, who are in the daily deals business. 

To make things worst, it's a commonly known that location-based check-in services has a huge adoption problem.   According to PEW Research, only 4% of adult internet users use location-based check-in services like Foursquare or Gowalla on a regular basis. Only 1% use these services daily.

Here are some other finds of the PEW Research:

• 7% of adults who go online with their mobile phone use a location-based service.
• 8% of online adults ages 18-29 use location-based services, significantly more than online adults in any other age group.
• 10% of online Hispanics use these services – significantly more than online whites (3%) or online blacks (5%).
• 6% of online men use a location-based service such as Foursquare or Gowalla, compared with 3% of online women.

So when are those revenues coming?  Must we wait until Foursquare hits that 10 million user plateau in June 2011?

I am willing to bet that Foursquare users are spreadout primarily in the top 25 metro markets.  Brands are looking for eyeballs or impressions or the number of people actually likely to check-in and take advantage of a deal.  1.0 million daily check-ins (Using the above 381 million check-ins in 2010 divided by 365 days), is a nice number, but not the kind of numbers that will thrill advertisers.  Furthermore, 80% of Foursquare members are male.   The daily check-ins by gender are as follows:

• Male = 1 million daily check-ins x 80% = 800,000 daily check-ins  
• Female = 1 million daily check-ins x 20% = 200,000 daily check-ins

The gender gap really places a limit on the kind of advertiser's that will use Foursquare. 

There is a big difference between checking-in with a merchant, and actually cashing in on a deal, but since I don't know the closing ratio it is difficult to calculate any kind of ROI.  Since many deals require multiple check-ins, I am willing to bet dollars-to-donuts that the attrition rates are at least 80%, and I am being rather generous.  If we assume the latter, 640,000 males and 160,000 females dropout never redeem that deal out of frustration.  Today's Millennials and Gen-Y's have never been known for their patience.  They want it now.   If we assume that the closing ratio on redemption is 25% (again, I am being generous), and applied this to the 160,000 males and 40,000 females, that actually redeem the merchant's offer, the result would be as follows:

• Number of users:  200,000 (160,000 males and 40,000 females).
• Closing ratio:  25%
• Number individuals redeeming an offer:  25,000

Keep in mind that I wittled down that 1 million daily check-in number to 25,000 individuals that actually redeemed a merchant's offer.   No wonder Foursquare only "pulls in some revenue from big brands".  

Houston, we have a problem.  Advertiser's are interested in impressions (lots and lots of eyeballs, something akin to a Facebook or Twitter), and 6 million or 10 million Foursquare users is not going to cut the mustard. 

If the above weren't enough, privacy us a major issue.  As mentioned before, the huge gender gap  or ratio of males to females is 8-2.  User's simply do not want to be tracked by brands.  So what are we to make out of this?    

In an October 29, 2010 article in the Silicon Alley Business Insider,  a Facebook insider told Business Insider, that about 30 million people (now estimated to be 40 million) had tried Facebook Places.  Larry Yu, a Facebook rep was asked to provide further details on Facebook Places on usage, but he said, "[I] don't have any guidance to offer right now, I'm afraid."     

According to Business Insider, back in October there were 150 million Facebook member's using their mobile phones to log into Facebook.  The idea that one-in-five of them have tried Facebook Places isn't a shock.  What is a shock is how few check-ins Places is seeing from these millions of users.

The bottom line is this:  6 million, 10 million or whatever Foursquare's membership is going to be by the end of 2011, doesn't mean much if the brands cannot get behind location-based check-in services in large numbers.   Foursquare's 6 million members are spread throughout the U.S. and internationally.   Audience reach is a real issue.  Brands are not interested in small numbers, which means that unless you are a major brand with many store locations, Foursquare is not going to benefit you very much.

Only Foursquare and its investor's, in their infinite wisdom, know how they are going to overcome the audience reach issue, gender gap, fear of being tracked and low LBS participation rates.   It better be a dewsey in order to justify that $250 million valuation.  

Just to make my point, I am going to assume that Andreesen Horowitz's $250 million valuation was based on a multiple of "future" revenues. Just for the hell of it let's make some assumptions: 

• Revenue multiple: 60x revenues. 
• Estimated revenues: $4.160 million (250 million divided by 60).
• Revenues per user:  $0.69 cents ($4.160 million divide 6 million users.  Facebook's revenue per user is about $3.5. 
  

If we used that figure of ten million users by June 2011, that would yield revenues of $6.9 million.  If Foursquare has to ramp payroll and administrative expenses for a staff of 120, that is going to burn through that $6.9 million in revenues very quickly, including most of that $20 million investment from Andreesen Horowitz.  No wonder Dennis Crowley admits they will have to raise additional capital.        

Lordy, lordy.  Foursquare's revenue model doesn't scale very well, does it?  If scalability is the problem with location-based check-in services similar to Foursquare, it could help explain why Facebook is not making much making much of a dent, hardly mentioning Facebook Places revenues, but that subject is ammunition for a later discussion of Facebook.

  Courtesy of an article dated January 23, 2011 appearing in Bloomberg Mobile and an article dated January 18, 2011 appearing in Business2Community

IS FACEBOOK'S NEW VIRTUAL GOODS BUYING FEATURE CALLED 'BUY WITH FRIENDS' A WAY TO COMPETE VERSUS GROUPON?

 

Facebook just revealed that it’s testing a new feature called “Buy with Friends” for its site, which will allow users to share their deals on virtual goods — and I’m starting to wonder whether Facebook could bring something similar to non-virtual deals.

Commerce product marketing manager Deb Liu described the feature on-stage today at the Inside Social Apps InFocus conference in San Francisco. (I’m at the conference, but I was busy writing about other news, so for this story I’m relying on the coverage from Forbes and All Things Digital.) The idea is to let users tell their friends about virtual goods purchases that they’ve made in Facebook games. Most interestingly, if a user unlocks a deal, they might be able to share it with their friends.

Facebook has constantly worked to find the right balance in allowing developers to promote themselves in users’ newsfeeds without users feeling that they’re being spammed. (Chief technology officer said earlier today that Facebook has reduced spam by 95 percent. in the past year.). Buy With Friends offers a possible solution to that problem, because a message about a random Facebook game will probably seem much less annoying when it actually benefits you, say if it tells you, “Your friend has unlocked this deal for you — get 40 percent off this special monster food.”

More than 50 percent of users in the test program elected to share their purchases, Liu said.

Again, this is all about virtual goods for now, but it might carry over nicely into the Deals product that Facebook announced last November. Right now, businesses can offer different kinds of deals as a reward for check ins on Facebook Places. What if you could then share those deals with your friends? For example, you might win a discounted pair of jeans if you check in to Levi’s often enough, then you could offer your friends a similar discount. It would be a way for Facebook to compete with popular group-buying site Groupon in a way that doesn’t just copy Groupon’s features.

COMMENTARY: 

Facebook will generate more than $1 billion in sales from virtual goods this year, and approach $2 billion next year.  Facebook had introduced Facebook Credits as a enabler of online transactions. Currently, there are more than 200 games and applications from 75 developers that accept Facebook Credits for those virtual goods, including 22 of the 25 most popular social games. Facebook credits can buy virtual goods from more than 200 applications on the Facebook platform, like special crop seeds or enhanced tractors in the otherwise free-to-play social game FarmVille. Credits have now moved into the physical world as well. Recently, Safeway Stores joined Target, Best Buy and Walmart in selling Facebook Credit gift cards, just in time for them to become a stocking stuffer for the onrushing holiday shopping season. Facebook is ramping up its repertoire of services which accept Facebook credits and features the following currently

VentureBeat's Anthony Ha's comments comparing Facebook's  new "Buy With Friends" buying feature with Groupon's group buying model are is worth looking into.   If I were Google I would combine both virtual and real world purchasing capabilities into the new feature.  Why have two.  This is an over-simplification, of course, but you could connect a separate module to process real world purchases, and those would automatically be messaged to a Facebook's member's friends. 

Groupon commands a nearly 80% share of the group buying market, and with its new $377 million funding, and aggressive international expansion plans, will give them a good lead before Facebook enters the group buying market, if at all.

My main concerns is whether group buying is sustainable over the long run, for various reasons that I have detailed in my previous blog posts.  Many experts believe that group buying has already entered a "Bubble" stage.  Still, you cannot argue against success, but 2011 will be a crucial year for group buying.  LocalSocial, #2 behind Groupon, is partnering with Amazon.com, and they have nearly doubled their traffic in a week.  LocoalSocial also raised $140 million venture capital, so it could become a real threat to Groupon. 

Courtesy of an article dated January 25, 2011 appearing in VentureBeat's SocialBeat

PROFILE: SUSAN WOJCICKI IS EMPLOYEE #18 AND GOOGLE'S DYNAMIC HEAD OF ADVERTISING PRODUCTS

Susan Wojcicki, Google’s senior vice-president of product management who oversees all of the technology giant’s advertising products, has quite a lot riding on her. Quite simply, she is the woman tasked with generating 97pc of Google’s vast revenues.

In a rare UK interview, the woman who gave Google co-founders, Larry Page and Sergey Brin, their first humble office premises, her garage, in 1998, reveals her vision for Google’s hugely successful search advertising business.

“Yes, I did rent my garage out to Larry and Sergey in 1998. I had just got out of business school and bought a house. So I needed to get some renters in order to help pay the mortgage,” she says coolly.

It was undoubtedly the best investment she ever made. However, despite their repeated requests, Wojcicki, resisted working for the new young company called Google for the first year the two developers beavered away in her garage.

However, at apoint during 1999, Wojcicki said she had her “a-ha” moment, when she knew she had to start working for Google. “I was online desperately trying to search for something and couldn’t access Google for some reason and then couldn’t find any information I needed. I suddenly thought getting information you need is going to become very important online. That’s when I started working for Google,” she explains.

Google Employee Number 18, of a whopping 23,000-strong global workforce, some 11 years later, Wojcicki is largely referred to as the woman who created AdSense – a key component of Google’s hugely successful search advertising system which sells relevant display advertising to companies. Having started as the company’s marketing manager, she now oversees all of Google’s advertising products including AdWords, AdSense and DoubleClick.

According to its last financial report, Google’s total revenue for Q3 2010 was $7.29bn – the majority of which comes from Wojcicki’s department.

This week, of course, Google has been in the news after the European Commission announced a formal inquiry into how it manages its ranking of companies in search and how it then advertises against those rankings. The EC’s move came after complaints from three internet companies who alleged they were the victims of search “penalties” which had put their businesses at risk.

Wojcicki is clear in her answer – Google, which dominates the search market, makes every attempt to be transparent and will look at ways to improve. Even the EC admitted that it wasn’t yet clear that Google had a serious case to answer. “Given our success and the disruptive nature of our business, it’s understandable that we’ve caused unease among other companies and caught the attention of regulators,” she said.

“We respect this process and will continue to work closely with the European Commission to answer their questions. But one thing that’s often overlooked is that we actually provide more information about how our ranking works than any other major search engine. On the advertising side, we give our customers lots of information about how the ad auction works, as well as tips on how to improve their ad quality scores, and the ability to simulate their bids to give them more transparency. ”

Google insiders know that success often breeds suspicion, particularly if that success is based on new technology which few people outside the business actually understand. When asked if AdSense was her creation, Wojcicki’s becomes a little uncomfortable, saying: “It’s a controversial question – various people had the idea but what I can say is that I was the first product manager who worked on it and made it happen. I was one of the key people who brought it [AdSense] together.

“I am also the only person who has worked on AdSense for the last eight years continually and I am responsible for Google’s advertising system – which accounts for approximately 97pc of the company’s revenues.”

In fact, a senior Silicon Valley executive, who wished to remain anonymous, goes as far to call Wojcicki “the money” in Google. “If you think about Google’s large and ever-expanding business, very little of its endeavours, such as YouTube or Gmail, make profit or any significant revenues,” the source said. “As useful and great as these services are, the money still comes from the same place it has always has done in Google – from its unrivalled search advertising business – and that’s Wojcicki’s responsibility. She is very powerful and hugely influential at Google and in Silicon Valley.”

Recently promoted to an elite group of eight senior vice-presidents at Google, and a long-standing member of the company’s operating committee, Wojcicki, aware of the impact of her words, is unsurprisingly guarded in every reply.

However, despite recurring hesitance, when talking about her vision of Google’s advertising evolvement, she becomes more fluent. “Right now I am focusing on the power of mobile and location in terms of the endless opportunities for advertisers wanting to get the most out of Google,” she explains.

“Right now offline and online are coming together because of smartphones.

“It’s a really rich theme and we are just at the beginning of understanding the possibilities. These smartphones have not been around for that long, only two and a half years. Penetration is still growing but already the way that we shop and purchase everything is changing.”

Wojcicki, citing a Forrester study, says that although 42% of in-store sales are influenced by online only 7% of purchases actually happen online. This is where she sees the next big opportunity, supported by the fact that there has also been a 30pc growth (according to Forrester) in mobile shopping queries which shows that people are going online while in shops, or near shops, to make decisions before buying offline.

In a very neat addition to its Google Product Search, the technology giant has partnered with more than 70 large retails brands, such as Best Buy, in a move which sees the search company receive live feeds of each “partner” store’s stock in real time.

This means that when someone searches for a specific product on their mobile phone, using the Google mobile app in the US, they will be informed which stores near them at that point in time has the product, in which size and how many they have left.

The stores, according to Wojcicki, already have the data stream, so there is no extra work except the act of wiring it up as a feed to Google.

She says that the product is just “the beginning” of what Google plans to do to make offline and online come together in a more seamless and useful fashion, for both consumer and advertiser alike.

Wojcicki is confident that the service, which is currently a free add-on to participating brands, will be able to operate around the world.

When asked for her response to those Google critics who say that the search giant regularly crosses the “creepy line” on intrusion when expanding its reach with similar innovations, Wojcicki’s guard reappears.

After a moment’s thought, she says carefully:

“We are a consumer company and our success is directly linked to our users trusting us. Therefore we have the same incentive as the user: they want to see relevant advertising so their experience of Google is positive and we want to deliver it.

“Our interests are aligned with the user.”

Wojcicki’s guard goes up higher still when pressed on what Google’s plans are for the cashing in on the social space – an area it is severely lagging behind its competitors, such as the fast-growing Facebook.

Earlier this year, Google was rumoured to be building a Facebook rival, GoogleMe.

Last week, TechCrunch reported that the new social product could be called Emerald Sea or Google +1.

Wojcicki will not be drawn on the speculation.

However, she admits that “social can be an important way that people make purchase decisions too”, and that Google is “working on developing products in this area”. Her pointed silence on this issue, over all others, speaks volumes.

Location and mobile may be the hot technology themes in 2011, but social is getting hotter by the minute, and Google has yet to strike it rich in this area – which Wojcicki will undoubtedly be working on improving.

Video is another area where she is focusing her energy – especially as YouTube needs to start finally paying its way since Google purchased the once loss-making company in 2005.

“We are testing a lot of products around video advertising at the moment – which are doing well at better targeting,” she said.

“One thing I am excited about is offering people a range of very relevant advertising videos, before or alongside a piece of video content, which people can choose from. I think video advertising is a hugely compelling medium.”

However, Wojcicki’s remit does not stretch to answering questions about Google TV’s commercial plans, despite the commercial video solution being key to its implementation.

The new service recently launched in the US, against the backdrop of a considerable backlash from certain media outlets, fearful of the Google experience spreading to TV. Wojcicki says it’s not her area.

Refreshingly, she has very little to say when asked what it’s like to be one of the only women in a very senior position at Google, a rarity in most major companies, especially technology ones.

“I am responsible for creating and overseeing the future products that make up Google Advertising. I don’t focus on being a woman as Google don’t.

“The company measures my success whether the products work and bring in decent levels of revenue,” she says.

Judging by the company’s latest financial report, her recent promotion was well deserved.

COMMENTARY:  Susan Wojcicki is obviously a very important member of Google's senior management team.   The fact that a very senior anonymous Silicon Valley executive calls her "the money" at Google, is a testament to her importance.  This is the first time that the article confirms that very few of Google's other revenue streams are making a real contribution to the bottomline. This is what I have been saying for a very long time. 

Susan mentions that Google is in the process of introducing some new video advertising products, which is probably in reference to YouTube, and finding ways to improve YouTube's advertising effectiveness, revenues and  profitability.  It can sure as hell use it.  As far as I know, YouTube's revenues have never been publicly reported, so they must be pretty bad, but this is conjecture on my part.

Larry, Sergey and Eric better keep her happy otherwise she is going to defect to Facebook.

Courtesy of an article dated January 30, 2011 appearing in The Telegraph

 

MAGNAGLOBAL: GLOBAL DIGITAL OUT-OF-HOME ADVERTISING TO DOUBLE BY 2016, AND TEN REASONS WHY ITS SO POWERFUL

I haven't covered the digital out-of-home advertising industry for several months now, and from the looks of things, it is gaining in popularity and on a very powerful growth curve.

The new medium of Digital Out-of-Home (DOOH or DO), which is also called Out-of-Home Video Advertising, In-Store TV, Captive Audience TV, Digital Signage, Dynamic Digital Display or other names, offers advertisers one of the most targeted and powerful ways of reaching consumers.

It extends the reach of TV to be “OOH TV,” of in-home internet to be the consumer                               addressable “OuterNet” or serves as a “middle media” to drive consumers to a website or motivate mobile download, e-browsing, e-commerce and permission marketing.

The inherent characteristics of all networks is that digital displays such as LCD or plasma located where people shop, wait or travel are centrally controlled to present media targeting an audience at a particular location and time.

According to Magna Global, worldwide DOOH advertising ill grow at a compounded annual growth rate of 15.2% from 2011-2016, making it the third fastest growing media around the world over the next five years.  That puts it behind only online video, growing at 19.6% per year over the same period, and mobile, growing at 19.4% per year.

DO is expected to grow at roughly three times the rate for the media industry overall, which Magna sees growing at between 5%-5.5% from 2011-2016. Here are some highlights:

• DOOH will drive the strong growth rate for the broader OOH (static displays like storefront signs and billboards) advertising category in general, which Magna expects to grow 7.9% in 2011.  
• DOOH advertising revenues will double from $2.6 billion to $5.2 billion between 2011 and 2016.
• OOH advertising revenues will increase 46.8% from $26.3 billion in 2011 to $38.6 billion

Focusing on specific regions, Magna sees DOOH revenues growing fastest in Asian countries including South Korea, India, China, and the Philippines -- but DOOH is just part of this upsurge. The same forecast expects conventional, static billboard, transit, and other kinds of traditional out-of-home to grow at an annual rate of 6.8% during this period. The increase in conventional billboard revenues is attributed to the proliferation of new advertising surfaces on the sides of buildings, as well as more sophisticated management of ad inventory on public transit systems.

Cinema advertising will be another strong growth area over the next couple years, according to Magna, which forecasts an 8.8% growth rate in 2011 followed by annual growth rates ranging from 8%-10% through 2016. In dollar terms, that means total (global) cinema ad revenues will grow from $2.6 billion in 2010 to $4.4 billion in 2016.

Almost a million displays are operating in North America and savvy advertisers and communicators are achieving their branding, merchandising and awareness goals through these advertising, retail and staff or patron digital display networks.

According to a Nielsen Research survey, DOOH advertising ranked highest among consumer's who considered advertising "intereting" and "attention grabbing". 

According to eMarketer, DOOH advertising displays can be found in a broad range of venues. Here's the size of the DOOH viewing audience by venue for the period January-February 2009:

According to eMarketer, U.S. DOOH advertising spending ranked #8 among all  media segments for the years 2008 and 2009.  Just about every media segment took a hit in 2009 after the Great Financial Meltdown of September 2008, but DOOH advertising was only down by 4.9% between 2009 and 2008:

The following offers the Top 10 reasons why DOOH advertising is so powerful. Each is then described in more detail.

1. It gets proven branding, merchandising and “call to action” results.
2. Location – Location – Location !
3. Measurability – Viewers and demographics
4. Demographic Targeting
5. Time of Day-Week-Month Placement
6. Price (It is a bargain for ROI-ROO)
7. Ease of flight planning and purchase
8. Growing inventory of networks, locations and displays
9. Positioning with other “digital” marketing channels
10. You just cannot, not look at relevant DS Content (It gets noticed)

Let's look at each reason in detail:

1. It gets proven branding, merchandising and “call to action” results. While the measurement standards introduced by the Out-of-Home Video Advertising Bureau (OVAB) in late October 2008 reflect actions toward a measurement standard, many networks, retailers and brands have been conducting impact studies for years. Neilson, Arbitron, DS-IQ, Transearch and others have well developed methodologies and are able to provide metrics which define branding, merchandising effectiveness.  WalMart recently announced that it is proceeding to deploy its next generation of In-Store TV to further maximize its achievement of retailing goals, reflecting the proven capability of DOOH as an advertising medium.  Other retailers, advertisers, investors and communicators are equally bullish on the power of DOOH to generate Return on Investment (ROI), Return on Objectives (ROO) and Return on Effort (ROE).
2. Location – Location – Location ! DOOH brings “The Power of Place” described Suzanne Alecia, President of OVAB while presenting with agency representatives at the Strategy Institute’s DOOH Investors Conference. OVAB member networks exist in over 34,500 retail, transportation/travel, Health/Health Care, Office Buildings, Lifestyle andEntertainment venues, delivering 2.4 billion in gross venue traffic monthly.  DOOH presents messages at the “point of purchase” which Proctor & Gamble has named the “First Moment of Truth,” in reflecting that all consumer messaging must start at the point of product selection and be focused on securing a consumer desire and alignment with a product to assure purchase intent.  Waiting areas in which a “captive audience” can be presented with messages (such as elevators, transit, medical offices, etc.) offer high value to advertisers. And while “out and about” messaging to consumers through DOOH can build brand awareness and purchase/action intent.
3. Measurability – Viewers and Demographics.  As referenced at point 1, measurement is advancing rapidly. Eye and shopper tracking tools such as those available from CognoVision, TruMedia, Quividi, VideoMining and others allow advertisers to know who is watching (i.e. age range, gender, etc.) to enable testing and tuning of ad impact, or a new paradigm of advertising called “Dynamic Ad Provisioning” whereby an ad is presented based on the demographic of who is watching.
4. Demographic Targeting.  There are several dimensions of this including the ability to target a demographic based on the location or time of day in which an ad is presented. The second is the ability to present messages on multiple DOOH displays while a target demographic goes about its day. SeeSaw Networks describes how ads might be presented to reach the “Millenials” demographic (18-25 year olds) in a given day through displays at for example, bus shelter, coffee shop, on campus, in a food court, gas station, bank machine, in mall, in a bar and washroom and finally through street furniture.
5. Time of Day-Week-Month Placement.  DOOH allows advertisers to present ads at the time of year, month and day when they will be most effective. This time targeting reduces ad spending waste to further address the dilemma presented by John Wanamaker, the pioneering merchant, religious leader, civic and political figure who is considered the father of modern  advertising when (in about 1920) he said, “Half the money I spend on advertising is wasted… I just don’t know which half!”
6. Price (It is a bargain for ROI-ROO).  While offering better approaches and new paradigms of message targeting, DOOH is typically sold on a CPM (Cost per Thousand viewers) basis. Inherent capabilities for message targeting combined with attractive CPM rates make DOOH attractive on the media plan, providing high Return on Investment (ROI) and Return on Objectives.
7. Ease of “flight” planning and purchase.  Planning and buying media sits somewhere at the intersection of being an art, science, craft requiring discipline and tenacity on the part of ad agency and branding professionals. Longer-standing ad mediums such as TV, radio, print and internet have longer-standing approaches to assist in media planning and placement, although these are developing very rapidly in DOOH. Media planners and buyers charged with investigating DOOH will find it increasingly easy to access network information, 3rd party metrics. Gaining a proposal from a DOOH network operator is a phone call or email away.
8. Growing inventory of networks, locations and displays.  As of mid October, the 28 member networks of OVAB accounted for over 34,500 locations and 400,000+ displays covering all DMAs and providing total Gross Venue Traffic of 2.4 Billion monthly and 27.5 Billion annually according to Suzanne Alecia, OVAB President.  InfoTrends, Inc. reports that DOOH is growing at 25% CAGR toward $2.6B by year end 2011. The number of 837,000 displays currently installed in North America is growing by 18% annually. The 43% of these displays that are used primarily for 3rd party advertising is growing at 58% annually. Other displays are used for location branding, staff or patron communications. The “fourth screen” of DOOH (so called after TV (1st screen), computer display (2nd screen) and handheld (3rd screen) has a growing inventory of usable and accessible displays. While this ad-based display inventory will grow, it can be easily imagined that displays not currently carrying advertising or sponsored messaging will in future provide part of its playlist for revenue-generating purposes.
9. Positioning with other “digital” marketing channels.  Economies, “speed to messaging” and communications flexibility are provided when content creation, composition, management, transport and presentation are all done digitally. This allows the cost-effective re-purposing of ads across media platforms and DOOH is positioned to leverage or excite other media platforms. This supports brand goals in creating “ubiquity”, an omni-presence with targeted demographics.  Messaging on DOOH can provide a website address, mobile download number or a telephone number, which when dialed from a cell phone provides a pre-recorded message specific to the ad display location for exhibit, product or other information,Wayfinding, voting, etc.  Given the ability to recycle 99.5% of technology components and to carry a large volume of ads in a completely digital communications supply chain, DOOH is very “Green.”
10. You just cannot, not look at relevant DS Content (It gets noticed).  Motion compels us to look at what’s moving – perhaps this behavior is burned into our DNA from our “caveman” days when motion represented either a possible meal or a threat. Dr. Hugh Philips, a cognitive psychologist has described in POPAI seminars that human beings “select” or “de-select” what they notice based on the relevance of what is presented. That being the case, motion video and animation coming and going on a dynamic display offers high probability of being seen, and relevant or interesting messages can then fulfill the objectives.

The networks available to advertisers can be accessed through Digital Placed-Based Advertisinig Association (DPBAA), Canadian Out-of-Home Digital Association,Adcentricity, SeeSaw Networks or specific retailers or network operators such as CBS Outernet, NBC Everywhere and others.

Courtesy of an article dated January 21, 2011 appearing in MediaPost Publications Digital Outsider and an article dated January 10, 2011 prepared DOOH industry expert Lyle Bunn 

WHAT FACEBOOK MUST DO TO JUSTIFY ITS OUTRAGEOUS VALUATION. CAN'T DO IT STRICTLY WITH ADS

 

Steve Jobs is famous for publicly dismissing a market shortly before Apple enters it. And Mark Zuckerberg and his team seem to have some Steve Jobs in them: There are several obvious product launches coming for the company, but it either denies they’re in the works or refuses to talk about them.

Here’s a scorecard:

An Ad Network: This is one that seems obvious to many industry watchers. Facebook has widgets and integrations around the Web, and could easily turn those into revenue-generating opportunities. It could use its social graph to introduce targeted advertising and provide real competition to Google and other ad networks.

But the company has denied repeatedly that it is working on an ad network. Dan Rose, the company’s VP of partnerships and platform marketing, said this week at DLD in Munich, “We get that question a lot, and the answer is always the same: there are no plans for that at this point.”

However, this week Facebook launched a reprise of its failed Beacon product that turns off-site behavior–user “likes”–into “sponsored stories” within its site.

Prognosis: Likely later this year. This would be a good revenue stream to turn on before Facebook goes public, as it says it’s likely to do in 2012.

A Facebook Phone: This one is a rumor mill regular, and it came up again Wednesday with a report that Facebook would launch two phones with HTC at Mobile World Congress this year.

Rose responded at another event in Europe, “This is really just another example of a manufacturer who has taken our public APIs and integrated them into their device in an interesting way….The rumors around there being something more to this HTC device are overblown.” (via Reuters)

But baking Facebook into a phone makes sense. As Facebook CTO Bret Taylor said on Tuesday, “Mobile devices are inherently social.”

Taylor said Facebook wants to take a platform approach to mobile, maximizing accessibility through use of HTML5. But it could be hard to resist demonstrating deep address book integration, instant personalization and other benefits of a Facebook-designed mobile phone.

Prognosis: The denials seem to be a matter of semantics. Facebook is likely to support these projects, and they are coming to market soon.

Payments for Non-virtual Goods: Another major move for Facebook this week was to announce that usage of its Facebook Credits virtual currency would be mandatory starting this summer. It’s a big deal that Facebook will be hooking up credit cards and PayPal accounts for many of the 200 million-plus users who play games every month on its platform.

The obvious next step for Credits is payments for non-virtual goods. But that may not be a viable model given Facebook takes a 30 percent cut of all Credits, which would destroy margins on just about everything but virtual goods. Asked this week at the Inside Social Apps conference whether Facebook would expand Credits to apply to other types of purchases, Deb Liu, the company’s commerce product marketing manager, said no.

“Facebook credits is built as a virtual currency and it’s really built for virtual goods,” she said. Facebook sees Credits as “an opportunity to drive better experience particularly in the games world.”

Still, that doesn’t mean Facebook couldn’t use a similar system to introduce ways for users to pay for digital goods like media within its platform. Margins for digital goods could feasibly swallow a 30 percent cut, as they already do in Apple’s iTunes store.

Prognosis: Facebook’s launch of Credits has been halting and unpopular, in large part because it’s awkward to layer a 30 percent tithing onto its platform after developers have built their businesses. It seems likely to continue to move slowly on payments.

Voice and Video Chat: The Daily What ran a screenshot on Wednesday of a Facebook voice call option appearing on the screen of a user participating in text chat. A company spokesperson didn’t dismiss it as a PhotoShop job, but said, rather, “We don’t comment on rumor and speculation and have nothing to announce at this time,” in response to an emailed inquiry.

COMMENTARY:  The above revenues will be necessary in order for Facebook to sustain its growth and justify its incredible $50 billion valuation (SecondMarket.com).  There is also another reason:  There is an upper limit to how much advertising revenues Facebook can generate.   Social networks historically have very low average revenues per user (see chart below). Here's a recap of the calculations: 

• Facebook's is $3.27 using revenues of $1.8 billion and 550 million users (chart says $4.00)
• LinkedIn is $2.30 based on revenues of $161 million and 70 million users
• Twitter is $0.78 based on $150 million revenues and 190 million users
• Google is $24.00 based on revenues of $29.32 billion and 1.2 billion users.

Having said the above, Facebook's principal revenue sources will come from advertising (places, website display, classifieds, pay-per-click, etc.), virtual currency fees, games revenue splits, voice/video chat (videoconferencing) fees and real goods payment processing fees.

Facebook Ad Network revenues will probably be split between the advertising agency and Facebook on a 70/30 or 60/40 ratio similar to those for Apple iAD. 

I believe that Facebook will eventually introduce pay-per-click advertising that will be similar to Google's AdSense and AdWords.  This is a type of advertising that advertiser's can understand and control.  This could be very lucrative and will hurt Google.  Before this can happen, Facebook will need to develop a robust search engine similar to Google. Whether they have the chops to do this, without violating Google's patents, remains to be seen. 

Voice and video chat (videoconferencing) for business presentations, collaborations, business meetings, and training and educational courses, could be very lucrative.  There will probably be personal and business pricing plans.  Videoconferencing was a $2 billion market in 2010, but there are a ton of companies competing in that space.  The Great Recession reduced travel, so corporations used videoconferencing, so there is a lot of growth potential.  Market leaders are as follows:

Rankings                       Market Share

Cisco/TANDBERG                   43.4%
Polycom                          28.8%
Huawei                            9.1%
RADVISION                         3.4%
SONY                              2.0%

Other potential revenue courses include video streaming advertising. This would be a direct attack on YouTube.  I would not rule out a Facebook Marketplace or Auction similar to eBay and Amazon.com.      

Facebook certainly has a lot of potential as a huge pawn shop or platform for merchants and corporate America to reach Facebook's 550 million users.   But, first things first. 

Facebook needs to get the advertising right.   I keep hearing that social media is now mainstream, but I doubt this. There are still a lot of pessimists out there, and they are not spending huge sums on social media.  The other problem are ROI's and measurement metrics. There are no established industry standards.  And finally, I am not so sure that all advertiser's fully understand social media. We could fight about this all day long, but I am ready to do battle, if you are.  

Courtesy of an article dated January 27, 2011 appearing in D | All Things Digital 

COPIES OF BARACK HUSSEIN OBAMA'S BIRTH CERTIFICATE WILL SOON BE AVAILABLE, BUT IT WILL COST YOU 100 BUCKS

Americans who still doubt that President Barack Obama was born in Hawaii may soon have access to a copy of his birth record, but it will cost them.

Tired of requests from so-called "birthers" asking to see Obama's birth certificate -- and hoping to make a dent in the state's projected $800 million budget deficit -- state legislators have proposed a bill that would offer a copy of the coveted document to anyone who asks and charge a $100 fee.

"If it passes, it will calm the birthers down," Rep. Rida Cabanilla said, according to The Associated Press. "All these people are still doubting it because they don't want the birth certificate from Obama. They want it from our state office."

Chicago Tribune / MCT

Pictured above is Barack Obama's birth certificate, as supplied by the Obama for President campaign. A proposed bill in Hawaii, Obama's birthplace, would charge $100 for a copy of the document to anyone who requests one.

Obama issued a certificate of live birth during his 2008 campaign, an official state document confirming that he was born on Aug. 4, 1961, in Honolulu. But for the next two years, Hawaii health officials continued to receive phone calls and e-mail requests asking for the records directly from the state, mostly from people who say they suspect Obama was born in Kenya or Indonesia and is therefore ineligible to be president.

Democratic Gov. Neil Abercrombie has said he wants to end the controversy by offering access to the birth record. But Hawaii cannot release it because of the state's privacy laws, something the proposed legislation, if enacted, would change.

The bill was introduced by Democratic legislators in Hawaii, who said they hoped it would have the added effect of bringing a little money into the state.

"If the people are so concerned about Barack Obama and if he was actually born in Hawaii, born in the United States, let them pay a fee of 100 bucks," said Rep. John Mizuno, according to KHON2 News in Hawaii. "We can certainly use the money, and we don't need to hear their complaining anymore."

Two years into Obama's presidency, birther conspiracy theories about his place of birth have abated somewhat, but continue to generate political controversy. Earlier this month, Minnesota radio host Mike Evans said he was a friend of Abercrombie's and claimed the governor told him he couldn't find Obama's birth records. Later, though, Evans said he "misspoke" and apologized.

COMMENTARY:  When I saw this article I just had to post it on my blog.  To be honest with you, I think birther's know Obama was born in the U.S., but they like having fun pushing the idea that he was born in Keyna or Indonesia.   It's a big joke that was created and spread by Rush Limbaugh, Sean Hannity, Laura Graham and the other neocon loons to get the neocons troops all fired up.  Well, it worked.   It went viral.  Isn't social media grand?

Will this curtail or finally put an end to birther bitching?  I really doubt it.  Birther's are so completely brainwashed, that they can't stand the truth or very tought that Obama is actually a U.S. citizen even if the evidence was thrust in front of their eyes.   I know one birther and he always tells me, "it's just liberal propaganda".   

After this announcement, the cries of liberal propaganda will resonate throughtout neoconland.  They will be calling the Governor of Hawaii a liar and other terrible names, claim that the birth certificate is a counterfeit, that this is all a conspiracy concocted by Obama to embarass the birthers, and that it is a trick by the largely Democratic State of Hawaii to make some money to balance their budget. 

In the spirit of bipartisanship, I will order a copy of Barack Hussein Obama's birth certificiate myself, just so that I can show it to my birther friend.   Just so you all know, I voted Barack Obama, but I am not very happy about his broken promisses and that he continues most of George Bush's policies. I would rather not see him run in 2012, and would prefer to have somebody else run in 2012, but the thought of voting for a Republican is very scary to me.

Is a copy of Barack Hussein Obama's birth certificate worth $100?  Damn right it is.  How many birth certificates of any U.S. President do you own? This could become a real collector's item.  So to any birther's  reading this, I encourage you to purchase a copy, because I don't want you to miss out on the appreciation which will surely come.

Place your order by clicking HERE.  Personal checks will NOT be accepted.

Courtesy of an article dated January 28, 2011 appearing in AOL.com

 

CRAZY APP: WHICH SIDE OF YOUR FACE IS BETTER LOOKING?

Do you prefer your left side and wish your right side looked the same? Presto!

Used to be, all you needed to test your own hotness was a mirror and a quick squeeze of the hiney. Then science (and a lot of creative interpretation) went and got involved and now the only thing anyone cares about is a symmetrical mug. Perfectly spaced eyes? Babe. Equally proportioned nostrils? Sexxxx-y.

It was only a matter of time, then, before someone developed an app that generates images of a more even-faced -- and presumably beautiful -- you. And you thought the world had run out of ways to make you hate yourself.

Here’s how the app, called Echoism, works: It takes a picture of you, then splits the image into a left and a right section. The images are then mirrored to create two separate, symmetrical identities, one showing what you’d look like if the left side of your face were dominant; the other showing right-side dominance.

 

So not only do you get to admire how you’d appear with the impossible facial symmetry of Amber Valletta, you get proof -- once and for all! -- that yes, the left side of your face is droopier than the right, and no you cannot photograph it. (Right, Mariah?)

Artist Julian Wolkenstein is keeping a weblog of all the photos folks upload using the app. Here’s the odd thing: The pictures are utterly, completely, and totally frightening (which probably has a lot to do with the crappiness of camera phones). Half the people resemble aliens. The rest could pass for some combination of Jeffrey Dahmer and Herman Munster. Everyone's rendered ugly in a similar way, and there's something sort of beautiful about that.

Courtesy of an article dated January 27, 2011 appearing in Fast Company Design

LINKEDIN FILES FOR AN IPO, TO RAISE $175 MILLION, FUELS AN AVALANCHE OF WEB IPO'S IN 2011

LinkedIn Corp.’s plan to raise as much as $175 million in an initial public offering may be the first in a wave of share sales for U.S. social-networking companies.

The largest professional-networking site plans an IPO after turning a profit in the first nine months of last year and more than tripling revenue between 2007 and 2009, it said in a filing yesterday with the U.S. Securities and Exchange Commission.

Other companies that foster online interaction may follow suit. LinkedIn is at the forefront of social-Web startups that aim to replicate the successes of Internet pioneers, such as Google Inc. and Amazon.com Inc., and avoid the fate of sites like Pets.com Inc., which shut less than a year after its IPO.

“LinkedIn is bringing the very hot concept of social networking to the practical business world,” said Dixon Doll, co-founder of venture-capital firm DCM, based in Menlo Park, California. “The whole social-networking phenomenon may be in the fourth or fifth inning and none of these have gotten public yet.”

Social deals site Groupon Inc., which rebuffed a $6 billion takeover approach from Google, is in talks with banks about a public offering this year, while Facebook Inc. may pursue an IPO in 2012, three people familiar with the matter said last year.

Earnings, Facebook

For the nine months that ended in September, net income attributable to common shareholders was $1.85 million, LinkedIn said. Revenue was $161.4 million, almost double the $80.8 million a year earlier. Total revenue in 2009 was $120.1 million, and the company had $89.6 million in cash and equivalents as of Sept. 30.

LinkedIn is dwarfed by Palo Alto, California-based Facebook, the most popular social network, which has more than 500 million users. It had revenue of $1.2 billion in the first three quarters of last year, up from $777 million, according to a person who has viewed documents pertaining to its results and asked to remain anonymous because the company is private.

Even with that growth, Facebook isn’t worth the $50 billion valuation it derived from a recent round of financing led by Goldman Sachs Group Inc., according a poll of 1,000 Bloomberg customers who are investors, traders or analysts.

Of investors polled, 69 percent say Facebook is overvalued, the poll showed. Only four percent said it’s worth more.

‘Lot to Like’

LinkedIn could draw strong demand in the public markets because it has steadily boosted sales from advertising, subscriptions and hiring services, said Tom Taulli, an independent technology analyst.

“There’s a lot to like if you’re an investor,” said Taulli, who is based in Los Angeles. LinkedIn is “growing quickly, it has multiple revenue streams and there’s global potential here,” he said.

LinkedIn’s biggest shareholders include:

• Co-founder Reid Hoffman and his family and trust, with 21 percent 
• Sequoia Capital, with 19 percent 
• Greylock Partners, which holds 16 percent 
• Bessemer Venture Partners, with 5.1 percent 
• LinkedIn Chief Executive Officer Jeff Weiner owns 4.1 percent.

Some of the shares sold to the public will be from existing shareholders and some stock will be issued and sold by Mountain View, California-based LinkedIn, according to a post on the company’s blog. The company didn’t say how many shares would be sold in either case, or at what price.

‘Always Danger’

LinkedIn hired Morgan Stanley, Bank of America Corp. and  JPMorgan Chase & Co. to lead the offering, according to the SEC filing. Allen & Co. and the investment banking division of UBS AG are also working on the sale.

Jim Breyer, a managing partner at venture capital firm Accel Partners, said if it was up to him he wouldn’t take LinkedIn public now. There’s “always danger” of a social-networking bubble, he said today in an interview with Bloomberg Television at theWorld Economic Forum in Davos, Switzerland. Accel was an early investor in Facebook and Groupon.

LinkedIn has more than 1,000 employees and 90 million users in more than 200 countries. Members use the site to search for jobs, recruit employees and find industry experts. While users can create personal profiles for free, LinkedIn introduced paid subscriptions in 2005, giving recruiters more access to job candidates and providing business professionals ways to communicate with one another. The company also makes money by selling ads on the site.

As LinkedIn’s membership has grown, investment firms have been clamoring for a piece of the company.

$3 Billion Valuation

Tiger Global Management LLC, a hedge fund founded by Chase Coleman, paid $20 million for a stake in the company in July, at a valuation of about $2 billion, according to two people familiar with the matter. SharesPost, a private exchange, is now trying to auction LinkedIn shares at a valuation of almost $3 billion, three people familiar with the matter said last week.

Pricing of LinkedIn’s stock in its IPO won’t be affected by trading on speculative markets for private company shares, the company said in its SEC filing.

LinkedIn was founded in 2003 by former PayPal Inc. executive Hoffman, 43, and received its first round of funding that year from Sequoia, the venture firm behind Google Inc. and Yahoo! Inc. Sequoia’s Mike Moritz is on LinkedIn’s board. The company has raised more than $100 million from firms including Greylock, Bessemer and Bain Capital Ventures.

On Jan. 25, in the first venture capital-led U.S. IPO of 2011, Web content company Demand Media Inc. sold 8.9 million shares at $17 each after originally offering 7.5 million shares for $14 to $16 apiece. New York-based Goldman Sachs Group Inc. and Morgan Stanley arranged the IPO.

LinkedIn “is just one of what we view as dozens of high- quality private companies that represent strong venture capital- backed, technology IPO candidates,” said Paul Bard, director of research at Greenwich, Connecticut-based IPO researcher Renaissance Capital LLC. “You’re going to see momentum continue, and we could end up with some pretty big numbers in terms of IPOs in 2011.”

COMMENTARY:  Look's like LinkedIn's revenue run rate for 2010 will about $218 million. NYPPEX had estimated that LinkedIn would do $200 million in 2010.  Not too shabby of an estimate.  

According SharesPost, LinkedIn currently has 97.1 million shares outstanding at $30.o0 per share, with a total market capitalization of $2.91 billion U.S. dollars.  The $30.00 per share price is based on a SharesPost auction announced on January 21, 2011, scheduled to close on January 28, 2011. The auction was supposedly established in order to provide LinkedIn investor's some liquidity prior to the IPO.  

According to LinkedIn, it provides the following marketing solutions:

Company Pagtes

 

Custom Groups

Display Ads

 

Sponsorships

White Paper Distribution

Partner Messages

 

About LinkedIn

Company Background

• LinkedIn started out in the living room of co-founder Reid Hoffman in 2002.
• The site officially launched on May 5, 2003. At the end of the first month in operation, LinkedIn had a total of 4,500 members in the network.
• It took 494 days to reach the first million members, and now, on average, a new member joins every second of every day, or approximately one million every 12 days.
• The company is privately held and has a diversified business model with revenues coming from user subscriptions, advertising sales and hiring solutions.

LinkedIn Today

• LinkedIn operates the world’s largest professional network on the Internet with more than 90 million members in over 200 countries and territories.
• More than half of LinkedIn members are located outside of the United States.
• There were nearly two billion people searches on LinkedIn in 2010.
• Headquartered in Mountain View, California, LinkedIn also operates in Dublin, Ireland; London, England; Toronto, Canada; Mumbai, India; Amsterdam, The Netherlands; and Sydney, Australia.
• The company’s management team is comprised of seasoned executives from companies like Yahoo!, Google, Microsoft, TiVo, PayPal and Electronic Arts. The CEO of LinkedIn is Jeff Weiner.
• LinkedIn is currently available in six languages: English, French, German, Italian, Portuguese and Spanish.
• LinkedIn started off 2011 with about 1,000 full-time employees located all around the globe, up from around 500 at the beginning of 2010.

Worldwide Membership

• 90m+ professionals around the world as of January 2011
• 20m+ members in Europe as of December 2010
• 5m+ members in the UK as of December 2010
• 1m+ members in France
• 2m+ members in the Netherlands
• 1m+ members in Italy
• 1m+ members in the DACH region (Germany, Austria and Switzerland)
• 1m+ members in Spain
• 8m+ members in India
• 2m+ members in Canada
• 1m+ members in Australia
• 1m+ members in Brazil

LinkedIn and Business

• As of January 2011, LinkedIn counts executives from all 2010 Fortune 500 companies as members; its hiring solutions were used by 69 of the Fortune 100 companies as of December 31, 2010.
• More than one million companies have LinkedIn Company Pages (formerly known as company profiles)
• LinkedIn represents a valuable demographic for marketers with an affluent & influential membership
• Thousands of developers are using LinkedIn APIs to create innovative tools and services for professionals

Courtesy of an article dated January 28, 2011 appearing in Bloomberg

NETFLIX DOES A '180', DECIDES TO INTEGRATE ITS MOVIE RENTAL BUSINESS WITH FACEBOOK

Representing a strategic about-face, Netflix says it is currently baking Facebook into its entire service -- in large part to encourage a segmenting of household accounts into multiple personal accounts.

"We're working on an extensive Facebook integration, which will further the notion of a personal Netflix account," Netflix said in a shareholder letter issued this week.

Netflix accounts have traditionally been affiliated with individual home addresses, but more screens per household -- along with more diverse offerings -- gives Netflix the opportunity to mine households for multiple accounts.

"When we were primarily a DVD-by-mail service, we measured our market in terms of households," Netflix said. "Households subscribed to Netflix and members of the household watched the DVDs as they wanted ... Online streaming video, however, is more naturally individual, since it is watched on personal screens like phones, tablets, and laptops, as well as on shared large screen televisions."

Netflix previously launched social tools, but scrapped them last year after they failed to take off. Mike Hart, previously Netflix's director of engineering for APIs, is now director of engineering for social.

"Our long-term goal is to evolve the Netflix service so that it feels more natural to have a personal account," Netflix said this week. "This evolution from household to personal relationship will take several years, and there will always be some households that only have one account."

In what may prove a challenge to Netflix's social strategy, a recent study found that the TV watching isn't as "social" an experience as one might assume. Rather, just 25% of consumers expressed an interest in sharing what they watch with friends, according to SideReel, which helps users find content and TV shows online.

Going forward, however, that may be the least of Netflix's problems. Its relationship with media companies could soon change when a deal with pay-TV channel Starz to stream movies from Sony and Disney expires. Indeed, Richard Greenfield, an analyst at BTIG research, estimated that the cost of the deal could go up from $25 million a year to more than $250 million a year.

Overall, according to research firm Screen Digest, Netflix revenues for 2010 were expected to reach $2.2 billion.

Netflix's snail-mail business was expected to account for 35% of disc-rental spending in the U.S. in 2010 -- up from 26% in 2009, according to Screen Digest.

COMMENTARY:  Like I have said before.  Facebook is not really a social network.  It's a all a clever disguise. Facebook is really a pawn shop,  a platform if you will, for companies that wish to tap into Facebook's huge 500 million plus membership.  

Netflix is doing the right thing before competitors like Blockbuster and RedBox integrate with Facebook.  

I think you are going to see a lot of online and offline businesses fully integrate with Facebook. Penneys already integrated its catalog with Facebook.    But,, I also worry that as more companies integrate with Facebook, that Zuck will know even more about us either legally or illegally.  After all, Facebook is not known for protecting our privacy.

Courtesy of an article dated January 27, 2011 appearing in MediaPost Publications Online Media Daily

WHAT IS YOUR STATE WORST AT? CHECKOUT THE UNITED STATES OF SHAME MAP

 

After compiling various census and US health figures, pop culture blog Pleated-Jeans constructed a surprisingly informative map to illustrate the acts for which each of our fifty great states came in dead last.

While some stats fit in with a common stereotype, others are a bit more enlightening.

1. Alabama: highest rate of stroke (3.8 percent) (tied with Oklahoma)
2. Alaska: highest suicide rate (23.6 suicides per 100,000 people in 2004)
3. Arizona: highest rate of alcoholism
4. Arkansas: worst average credit score  (636) California: most air pollution (15.2 micrograms per cubic meter)
5. Colorado: highest rate of cocaine use per capita (3.9 percent total population)
6. Connecticut: highest rate of breast cancer 
7. Delaware: highest abortion rate (27 per 1,000 women aged 15 to 44)
8. Florida: highest rate of identity theft (122.3 reports per 100,000 people)
9. Georgia: sickly based on highest rate of influenza
10. Hawaii –highest cost of living (tied with California)  
11. Idaho – lowest level of Congressional clout 
12. Illinois: highest rate of robbery (284.7 incidences per 100,000 people)
13. Indiana: rated the most environmentally unfriendly by NMI solutions 
14. Iowa: highest percentage of people age 85 and older (1.8 percent) (tied with three other states)   
15. Kansas: poorest health based on highest average number of limited activity days per month (3.5 days)                                        
16. Kentucky: most cancer deaths (227 per 100,000 people) (BONUS fact: Kentucky also has the highest rate of tobacco smokers – 25.6 percent)
17. Louisiana: highest rate of gonorrhea (264.4 reported cases per 100,000 people) 
18. Maine: dumbest state claim based on lowest average SAT score (1389)  
19. Maryland: highest rate of AIDS diagnosis (27.6 people per 100,000 people)  
20. Massachusetts: worst drivers claim based on highest rate of auto accidents    
21. Michigan: highest unemployment rate (13.6 percent)
22. Minnesota: highest number of reported tornadoes (123 in 2010)  
23. Mississippi: highest rate of obesity (35.3 percent of total population)  BONUS facts: Mississippi ranks last in the most number of categories. These include highest rate of child poverty (31.9 percent), highest rate of infant mortality (10.3 percent) lowest median household income ($35,078), highest teen birth rate (71.9 per 1,000 women aged 15 to 19) and highest overall rate of STDs.
24. Missouri: highest rate of bankruptcy (700 out of every 100,000 people)  
25. Montana: highest rate of drunk driving deaths (1.12 deaths per 100 million miles driven)  
26. Nebraska: highest rate of women murdered annually
27. Nevada: highest rate violent crime (702.2 offenses per 100,000 people). BONUS fact: Nevada also has the highest rate of foreclosure (one in 99 houses)
28. New Hampshire: highest rate of corporate taxes  
29. New Jersey: highest rate of citizen taxation (11.8 percent)  
30. New Mexico: antisocial claim based on lowest ranking in social heath policies  
31. New York: longest average daily commute (30.6 minutes) 
32. North Carolina: lowest average teacher salary    
33. North Dakota: ranked last in ugliest residents report as chosen by The Daily Beast
34. Ohio: nerdiest state claim based on highest number of library visits per capita (6.9)  
35. Oklahoma: highest rate of female incarceration
36. Oregon: highest rate of long-term homeless people
37. Pennsylvania: highest rate of arson deaths (55.56 annually) 
38. Rhode Island: highest rate of illicit drug use (12.5 percent of population) 
39. South Carolina: highest percentage of mobile homes (18.8 percent) 
40. South Dakota: highest rate of forcible rape 76.5 per 100,000
41. Tennessee: chosen most corrupt state by The Daily Beast  
42. Texas: lowest high school graduation rate (78.3 percent)  
43. Utah: highest rate of of online porn subscriptions  
44. Vermont: infertility claim based on lowest birth rate of any state (10.6 births per 1,000) (tied with Maine)                                  
45. Virginia: highest number of alcohol-related motorcyle deaths  
46. Washington: most cases of bestiality (4 reported in 2010)                                        
47. West Virginia: highest rate of heart attack (6.5 percent of population)
48. Wisconsin: highest rate of binge drinking (23.2 percent of population)
49. Wyoming: highest rate of deadly car crashes (24.6 deaths per 100,000)

THANK YOU TO  SAD HILL NEWS

Source of Information:

Most stats taken from http://www.americashealthrankings.org/ and http://www.census.gov/compendia/statab/rankings.html (unless otherwise noted)

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COMMENTARY:    You know how sometimes you come to certain perceived notions about people that come from certain states?  Let's take California for instance. I often hear people saying, "Yeah, California that's where all the gays live" or "Yeah, Arizona, they pack the most guns of any state."  

It's all coming together for me now.  Now I understand why some of the people in certain states are such delberts and pathetic scumbags.  I knew I was right about your state.  

Courtesy of an article dated January 28, 2011 appearing in PatriotFreedom.org