News Corp.: Video ads to get premium pricing July 24, 2008
Posted by Mark Blei in : Uncategorized , add a commentHALF MOON BAY, Calif. – Looking at big money-making opportunities online, News Corp. (NWS) President Peter Chernin pointed to video, mobile and overseas markets as good long-term bets.
In an interview with Fortune editor at large Richard Siklos at Brainstorm Tech on Tuesday, Chernin said advertisers still haven’t completely embraced the online opportunity, and that they continue to have a television mindset. He said an advertiser recently told a MySpace sales rep to come back when the social network has a “SuperBowl-level” event. What the advertiser failed to recognize, Chernin said, is that the MySpace homepage has as many viewers every day as the SuperBowl has once a year. (Of course, there’s a good argument that MySpace visitors aren’t quite as engaged with the content as SuperBowl viewers are.)
He also addressed the challenges News Corp. faces in getting a decent price for ads on MySpace. (The company partners with Google (GOOG) to monetize the site.) The answer, Chernin said, may be to look beyond banners and text ads. “What drives ad prices is scarcity,” he said. “The place that is most promising is probably in video. By definition there’s more scarcity in video, and there’s even more scarcity in premium video.”
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Why you'll finally use LinkedIn December 14, 2007
Posted by Mark Blei in : Uncategorized , add a commentThe buttoned-down social network has a new CEO, a growing membership, and an increasingly-useful set of features.
NEW YORK (Fortune) — For years, I’ve been befuddled by LinkedIn. I knew it was supposed to be the social network for work, but to me it was like war. “What is it good for?” I asked myself repeatedly, even as I occasionally poked around and accepted requests to link with people. I belonged to it, but I really didn’t know why.
The other day I had a chance to sit down with LinkedIn CEO Dan Nye, who’s been on the job since February. He told me about a few changes that Linkedin subsequently announced (VentureBeat has a good description of them.). And his PR person upgraded me to what would otherwise be a paid account. (It can be $20 to $200 per month.)
I have had a revelation. Linkedin isn’t bad. For all my well-known (and even ridiculed) enthusiasm for Facebook, Linkedin shows there will be plenty of room for other ways to connect with people on the Web.
Linkedin aims for a much more functional role in your life. While Facebook remains better designed and conceived, in my opinion, it is not likely any time soon to help you find a job, hire a contractor or consultant, or figure out who you should hire for a position.
That’s because of two things. First, despite all the criticism of its privacy policies, Facebook is fundamentally based on the notion of privacy. You cannot find out much about someone unless they have willingly elected to be your “friend,” or if they are in a partially-open network you also belong to – for your town or workplace or school. The other reason is that Facebook is intended to be a communications medium. Think of it as, in part, a way to broadcast information about yourself.
Linkedin, by contrast, is a sort of high-end consensual database of colleagues. In some ways it aims to turn the entire planet’s workforce into one big set of colleagues, who only come to know one another when one can solve a problem for the other. You can look for that job or find that consultant or employee, because Linkedin’s member data is essentially open for all to see, and because the site offers search tools to help you slice and dice it. (They are much more sophisticated and useful if you’re a paying member.)
In recent months Linkedin has reached a new critical mass. I know this in part because Nye told me the service now has 17 million members, up from only 8 million when he arrived. But I also know it personally because, for example, until very recently it contained hardly any of my classmates from college. While my class only included about 300, now about 40 of them are on Linkedin. (You generally tell the system what class you were in when you join.) And colleagues at Fortune and friends outside the tech industry (Linkedin’s initial user base) are joining quickly.
“We are focused on Linkedin as a productivity tool,” says Nye. “We don’t want to be compared to other sites that are just about pageviews and frequency of use. We want to give you the information you need to do your job better.” As for Facebook, he says “It makes sense to keep your personal and your professional lives separate.”
That last one I frankly doubt, in an era when the line between the two is so gray. Facebook will become more functional as it adds features that enable us to slice and dice our relationships to more accurately reflect the fact that one “friend” is a PR person who calls to pitch me a lot and the other is my brother. But Linkedin will remain useful, albeit not so often nor so enjoyably.
Nye said that if you were seeking a “product manager with an MBA trained in Six Sigma who lives in Cincinnati” you’d probably find six. I did that exact search, and actually found one.
Nye himself wanted to hire a former Procter & Gamble marketer who had been in Silicon Valley for a while. Using Linkedin, he claims he found eight names immediately and within half an hour was on the phone with one he had quickly vetted by e-mailing mutual friends (LinkedIn tracks those very well).
LinkedIn also enables you to ask questions either of specific members or the whole hoi polloi. You could, for example, ask an HR manager at a company similar to yours if your salary is fair.
A new interface design, still in beta, is an overdue and attractive visual upgrade. With the latest features, Linkedin aims to become more of a portal drawing users back daily. One, launched in partnership with Business Week, allows you to read a news item and examine names and companies mentioned through the lens of your own connectedness. (Nye recited the depressing figure that only 30 percent of LinkedIn’s members have read any business magazine in the last 30 days.)
Maybe that’s why people recently found credible a rumor that News Corp. was angling to buy the service, which Nye has said would not sell for less than $1 billion. But a very senior News Corp. executive I spoke with says there is “no way” the company would ever be interested in paying nearly that much.
But LinkedIn has established a key position in the business ecosystem. If it keeps developing its functionality, and especially if it reduces its fees, which are ridiculously high for anyone who is not either hiring or looking for work, I see a bright future. It will further speed the pace of commerce by helping us all better find the people we need to get work done.
Facebook's strategy: More than ads November 9, 2007
Posted by Mark Blei in : Uncategorized , add a commentThe social networking site promises to turn advertising on its head by blending e-commerce with word-of-mouth marketing, writes Fortune’s David Kirkpatrick.
(Fortune) — Don’t compare Facebook’s new ad system to anything you’ve seen on Google, television, or any other advertising medium you can think of.
Compare it instead to Amazon.com (Charts, Fortune 500) or eBay (Charts, Fortune 500). That’s because, while advertising as we know it today may very well be a good profit engine for the social networking company, its new Facebook Ads program is also about e-commerce — that is, selling.
Take the user reviews on Amazon. They’re often useful when making a purchase, yet we don’t know much, if anything, about the people recommending a product. Facebook aims to fix this by adding what it calls its “social graph” on top of such a rating system. In effect, your friends — not strangers — will be giving you the thumbs up or down on products you might buy. (For an excellent description of the mechanics and details of what Facebook announced Tuesday, read my colleague Jessi Hempel’s report from the scene.)
Facebook’s strategy is based on a relatively new concept known as word-of-mouth marketing. In recent years, a sizable industry has grown up around the idea of getting people to talk to other people about products and services while hanging out together at neighborhood barbecues or late-night dance clubs. Consumers, the thinking goes, are far more likely to trust a pitch from friends than from a 30-second TV spot.
It makes sense. And now Facebook is automating that process — combining e-commerce with word-of-mouth marketing. When a Facebook user buys something, the seller will ask for permission to promote that fact to his or her social network (and, presumably, pay Facebook a fee if the user agrees). The contrast with conventional advertising is stark. It’s more akin to an Amazon seller who pays a per-sale commission than an advertiser who pays for a click on Google (Charts, Fortune 500).
It’s yet another sign of how power is shifting online into the hands of consumers. I wouldn’t be surprised if retailers offer discounts to Facebook users who agree to promote their shopping habits.
But the Facebook strategy is also about promoting brands. It allows people to stand up and say they believe in a certain product. For instance, this week I indicated I am a “fan” of The New York Times. Facebook will now broadcast that fact into the “Newsfeed” that my friends see as they log into the service — and The New York Times benefits.
To be sure, Facebook’s chief competitor, MySpace, has long allowed members to befriend bands or brands. The difference is that Facebook distinguishes between advertisers and users. On MySpace, you make friends with a brand much as you would with, say, a new coworker. Facebook makes a distinction between friendship with a person and “fanship” with a brand.
What makes Facebook different from MySpace and most other social networks is its social graph, which expresses real offline relationships in electronic form. To now attempt to inject commercial information into that social graph — and to do so without disturbing the human relationships that have allowed Facebook to thrive — is fascinating, ambitious, and highly risky.
The strategy isn’t fullproof. Skeptics argue that people have little interest in becoming public promoters of products they use. Facebook probably didn’t help its cause much when, in announcing the new ad platform, it cited Sprite as an example of a product users could promote to their pals. Will people really want to trumpet their association with unhealthy sugar water? Most likely not (unless, of course, they’re paid for it).
But what about that cool independent coffee shop around the corner? That sounds much more appealing. So it’s also possible that Facebook will expand the universe of companies that advertise online.
What’s more, Facebook could change the very nature of marketing, forcing marketers to work more closely with product developers. Instead of crafting compelling messages that will encourage consumers to want to spend, companies will have to think about how they can make the best possible product that people will want to buy — and tell their friends about. Cruddy goods won’t have many friends on Facebook.
Whether Facebook’s new ad play sizzles or fizzles, the site continues to make the boldest moves on the Internet. 
