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Eight Billion Reasons Yahoo Didn’t Buy Facebook

April 8, 2011 By Leave a Comment

For much of the year, Facebook had been in negotiation to sell itself to Yahoo. The market value of the “instant behemoth” social service sites has fluctuated, as services both large and small have changed hands this year. The first big acquisition was Newscorp’s purchase of MySpace for $580 million in 2005. That set a benchmark, which was driven upward somewhat by the NBC Universal purchase of women’s online network iVillage for $600 million earlier this year.

Social networking sites typically allow users to create and share blogs, pictures and videos with friends and the wider public. What makes Facebook different from MySpace? Its founder(s) set out to create a social networking site that is designed for post-high school users. It connects people by region, college, company and high school.

Build a personal profile and connect with others that are sharing your life experience as opposed to your social, entertainment and artistic interests, which are the focal points in MySpace. Facebook attempted to blend a little maturity into the energized chaos found on MySpace, and they have been successful. Their current membership is somewhere north of ten million – compared to the 145 million that MySpace claims.

The MySpace inclusion of ‘artist pages’ allows artists working in audio and video mediums to freely distribute media from within a social network. It has become a central feature of the network. Artist pages exist alongside individual profiles, and in addition to the regular profile features they allow the artists to upload media and distribute it in the network. Individuals can link to artist pages, endorse media, and participate as fans. This feature resulted in bands using the site to promote their music, one of the dynamics of the site that has made it so successful.

Facebook’s orientation around actual communities makes it much more efficient as a connectivity tool. You can connect to anyone within your group and you can search for people across the entire Facebook spectrum. Specific interest areas are much more easily brought into focus and it is easier to build a group around them. The big question for Facebook is its relevance past the college years. The question for MySpace will be its ability to undergo a little maturation in the form of advertising and control of commercial video and music posting.

In the marketplace Facebook has had several suitors on its dance card, having held negotiations with both Microsoft and Viacom over the past year. Microsoft has in fact signed a deal with Facebook whereby Microsoft will sell and provide banner ads and sponsored links for Facebook using its adCenter online advertising software. Some medial analysts dismiss this deal as minor, citing banner adds as passé and sponsored posts as an advertising method that is showing some age as well.

In the Google corner, the company has announced a deal with MySpace to pay at least $900 million in shared advertising revenue and become the site’s sole search provider. As part of the deal, Fox Interactive Media will add Google search boxes to MySpace and its other web sites. Google has first crack at selling any display ads Fox doesn’t sell directly. Google has shown an ability to work partnership agreements and a willingness to settle for a piece of the action that has served them well in the feinting and blocking that occurs in the Internet consolidation ring.

Google’s purchase of YouTube ratcheted up the pressure on Yahoo to close the deal. It’s worth noting that Google bought YouTube with Google stock – a choice that was not open to Yahoo in their Facebook negotiations. Earlier this summer Yahoo decided that Facebook was too expensive at $1 billion and in July, came close to closing an agreement at the $800 million figure. The reported high offer of just over 1.6 billion was rejected, and now Facebook claims it isn’t for sale, but if it was, it’s worth at least 8 billion.

From a financial/cultural perspective, Yahoo had a lot on the line with this acquisition because it would have significantly reshaped the portal’s efforts to establish and hold a Yahoo “community.” In one Yahoo corner or another, many of the features contained in both MySpace and FaceBook can be found already as Yahoo proprietary components. What is missing is the packaging and the social cachet that both social networking services hold for young people.

Yahoo has built a strategy of drawing Internet users and advertising through building community-based services on the Web, but acquisitions so far have been on a small scale. Recently Yahoo has acquired Bix, MyBlogLog and Kenet Works. Bix and MyBlogLog are built along social networking lines, and will work (hopefully) as a complement to Yahoo’s current properties: Flickr, Delicious, Upcoming and WebJay. All of these have slightly different orientations: FLickr is photo-centric, Delicious is a blog tagging and sharing service and Bix is a digital karaoke and entertainment site that takes amateur uploads.

While the Yahoo / Facebook deal appears to be dead, the evolution of social networking sites is bringing several characteristics to light. There is some indication that user loyalty is a slippery issue. MySpace users are migrating to Facebook, YouTube and other sites as their primary “hookup.” Average visitation time on the site has dropped by over half.

On the other hand, Media metrics firm Hitwise has released its Media Report which found that MySpace is still atop the social networking mountain, with 82 percent of visits to the top 20 social networking sites landing on their site. Whatever the figure, Yahoo’s attempted purchase of Facebook would have been an expensive bet on a hot product that could cool as quickly as Friendster and others that have preceded it. Finding an advertising model that works for the Facebook is also going to be a challenge, particularly given the existing Microsoft deal to handle some ad placement for the service. Given the turbulence in the social network marketplace, the inability to close the deal may end up being a positive for Yahoo.

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Home based business: is it right for you?

April 8, 2011 By Leave a Comment

It is many people’s dream to work from home, by starting a business from scratch or joining a legitimate work at home business opportunity, affiliate program or franchise. Working at home means you can work at something you enjoy, “sack” difficult clients, put difficult bosses behind you, and avoid a lot of the daily stress faced by employees. The home based business industry is expanding rapidly and research suggests that revenue from home-based businesses will increase by up to 17% a year for the next five years. Home based business can mean a consultancy, franchise, affiliate program, network marketing, party plan, internet sales, and many more.

It’s a big step from being employed to working for yourself, so plan as far ahead as possible. You will need to think about the effects on all areas of your life to prepare yourself, before you actually leave your job. With corporate cutbacks, redundancy can be the trigger for starting a home based business, and in this case you may have no scope for planning ahead. If you are made redundant try to negotiate as many extra benefits as you can from your employer: for example pay in lieu of notice, use of company equipment such as mobile phone or computer. Also see if there is any training your employer could pay for, to help you in your business, such as internet skills.

If you have no other income, you will need some savings to carry you through your business start-up period: work out basic living expenses for six months and try to put at least that sum aside. Don’t forget that you will need to provide for benefits you may have received from employment, such as health insurance, pension contributions or a use of a company vehicle. Of course, if you have a spouse or partner who is employed and is willing to provide these necessities during your start up phase, you are buying yourself extra startup time.

Of course you will want a comfortable and quiet work area, ideally away from the rest of your household. This is important not only to reduce noise, but also to create the psychology of being “at work” and not “at home” when you need to concentrate. While some lucky people do manage to start their home business from the kitchen table, you’ll find the separation will help you run your business much more efficiently. Don’t forget to allow space for storage and meeting visitors, if your business involves this.

When you are working from home to help your business succeed, sometimes long and unusual hours, it is easy to ignore both your physical and mental health. The usual advice applies – proper diet and exercise, and even if you don’t have a family at home, don’t work all the time. Entrepreneurs often report that the one aspect they miss in home working is the contact with colleagues, so be sure to maintain a social life, possibly through a business networking or support group. Try to surround yourself with positive, supportive people, and be sure to explain your business idea fully to your family. They will be a critical part of your support system. Those who love you the most aren’t usually trying to stand in your way – it’s just that starting a home business may be something unknown to them, and like everyone, they tend to be fearful of something they don’t understand.

Benefits of a home based business
Working from home is a different way of life from 9-5 employment and offers benefits – monetary or lifestyle – that can far outweigh those found as an employee. Whether you work at home already, are thinking about it, or your life circumstances now make working from home necessary or possible, be sure to think these benefits through as you choose your employment options.

Financial benefits are not always the prime motivator. Many people are willing to take a reduction in income to enjoy the lifestyle benefits of working from home. There is a huge sense of freedom in being able to plan your own timetable. You can make appointments, do your shopping, and run other errands without trying to fit everything into a lunch hour or on the way home from work when everyone else is doing the same thing. You can take advantage of a glorious day to take your dog for a long walk, or stop to watch sport for an hour in the afternoon. You may need to start earlier or finish later to compensate – but the point is that you have this freedom when working for yourself.

In addition to time freedom, another big benefit of working at home is a reduction in stress. Of course, any business will bring its own pressures, but there are certain stressful situations that can be avoided by working at home. and the less stressed you are, the more energy and enthusiasm you have, energy that can be spent on your family or business! The daily commute can literally be a few feet to an office or other work area. You can avoid the stress, time and wear and tear involved in the traditional daily commute, and literally add two hours to your working day.

Choosing the right business for you
Many escapees from the corporate world don’t have a clear, transferable set of skills that they can use in their own business. For example, an engineer can see a number of uses for the skills used in their former job. For the rest of us a little more imagination may be needed.

The key to success is to keep an open mind and do not dismiss an opportunity because it is different form things you have done before. Look around at the opportunities available for online and offline businesses, surf the net, visit sites that offer advice. Also remember that you could be involved in more than one business.

There is a wide range of business opportunities to consider, including Affiliate programs, Internet based businesses, retail sales, network marketing, party planning. Many are highly reputable companies with successful track records. It’s important to find out as much as possible about the company and to contact those already involved so you understand any risks you may be taking, how long before you can reasonably expect to make serious money, and what amount of work is required to make that money.

Be practical in your expectations of a homebased business: enormous income in a very short time is unrealistic, and a legitimate home business will not promise this. However, many offer a steady income stream that can increase gradually. It takes a certain amount of time to build any successful business. By starting and maintaining a legitimate home-based business, you can achieve your dream of being your own boss.

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Creating Brands That Provide Psychological And Social Benefits Beyond The Product

April 8, 2011 By Leave a Comment

The main reason for the general fascination with brands is their ability to provide the consumers an extra value in addition to what the product\service\company themselves can provide. A value which becomes the major motivation for consumers to desire the product. Everybody agrees about that, but from here on it becomes foggy. First of all, what is this value exactly? Also, how precisely is this value being added and incorporated into the brand? In this short article I attempt to provide a clear answer to both of these key questions and to suggest a workable approach to creating value added brands.

By way of introduction, let me say that strong brands are perceived instruments, means to achieve goals or benefits, in the consumer’s mind. They arouse emotions because they are perceived as a source of something beneficial. The positive emotions are direct outcomes of these anticipations. Their various symbolizations (name, logo, font, emblem, etc’) have little impact of their own. Their importance is mainly as identifiers of sources of already attributed and anticipated benefits.

The act of branding has ten different meanings which are ten different ways to create instrumentality or usefulness beyond the tangible benefits which the product/ service/ company themselves can provide.

Creating a conceived linkage to a tangible benefit

The most basic level of branding is creating a conceived linkage between the brand name and other identifiers and a tangible benefit. Huge brands like Pantene shampoo which promise to amend the six symptoms of unhealthy hair look, work in this level.

Forming a mental context

A “mental context” is a concept or an organizing principle which allows the consumer to conceive originally unrelated facts (such as: the various marketing activities of a company) as connected by a guiding intent or by some other common factor. For example: should you stumbled into a hotel like the “Hudson” or the “Royalton” in the heart of Manhattan, you are promised pleasure on different levels, but if you know you’re in a “Boutique Hotel” your stay becomes a very different experience altogether.

Directing an experience

This is essentially a hypnotic effect, in some cases related to Placebo. The branding here is the creation of an expectation which alters the sensed experience and enables the consumer a richer experience than what the product alone can provide him with. For instance, the expectation that an energy drink like “Red Bull” will energize, makes the consumers feel a wave of energy beyond the physical effect of the drink.

Creating a means of self presentation

Here the branding creates a symbol with a meaning that is well known to everybody in a relevant group, which enables the consumer to characterize himself. The brand “ABSOLUT vodka” became a way for yuppies to signal their yuppieness to other yuppies and so became a huge success.

Creating a means to deliver a message

The branding role in this approach is to create a symbol of another kind, its meaning known for everybody as well. The diamonds giant “De Beers” made the diamond a means of expressing commitment, making the physical fact that a diamond is indestructible a metaphor for the lastingness of a relationship.

Building a social-cultural authority

The next branding approach is the creation of an authority which the consumers can use as a guide, to help them understand what’s happening around them and to inform them which behavioral ways are normative, what will make them happier etc’. The brand “Apple” depicted the personal computer, not only as a working tool but also as a device for self expression and creativity.

Creating “a long hand”

In this approach, the branding is creating means for the consumer and empowering her to act for noble objectives and high purposes, which are important to her, but which she can’t achieve by herself. The “Body Shop” network made buying a way for contributing to the preservation of the environment and helping people in need all around the globe.

Creating an Alter Ego

Here, the brand is a way for the consumer to behave (at least on a fantasy level) in a manner he would like to but doesn’t dare, or isn’t willing to pay the price for. The provocation of the fashion brand “Diesel” is made as if “in the name of” the brand customers. They can feel like they are provocative themselves every time the brand advertises one of its outrageous campaigns.

Building an “Emotional Gym”

Opting for our civilized and protected life style, we compromise (not once, happily) a lot of our possibilities as humans. We go to the gym to prevent the degeneration of our body which, in our life style, doesn’t get to face the challenges it was designed for. Similarly, we watch movies and TV series’ in order to “exercise” emotional skills which aren’t legitimate in our life style. Brands like “Sicily” from “Dolce & Gabbana”, allows us too to experience such emotional possibilities.

Facilitating fantasies

With only a fine difference from the previous approach, this branding approach helps the consumer to fantasize an alternative reality. The brand “Timberland” was designed as a way for consumers to fantasize about courageous adventures against the forces of nature.

The understanding of the different kinds of added value, the ways by which these values are instrumental to the consumer and the methods by which brands can be destined to be means for the consumer for achieving his goals, makes the difference between masterful creations of brands and amateur imitation which produces mere look-alikes.

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