Twitter investor and VC Chris Sacca just got engaged! Here's the photo he just posted on Instagram. He tweeted out the story, too, and it's very cute. Congrats!
Join the conversation about this story »
The most interesting thing about last night's report that the ebook market will reach $1 billion this year wasn't so much that number -- through it's impressive, especially considering the growth rate -- but that Amazon has a full 50% marketshare there thanks to its Kindle platform.
When Apple announced the iPad with its iBookstore many people thought the inferior Kindle would be toast, but by letting people read Kindle books on any device, Amazon has preserved, and even arguably gained, marketshare. Today, most of the people who read books on iPad do it on the Kindle app.
The ebook market is a battle of the titans. It's Amazon versus Apple versus Barnes & Noble versus Sony. It also crucially involves all the big publishers, who are scared of going digital but know they must embrace it lest they go the way of the music industry, and so have been taking two steps forward and one step back.
But Amazon played beautifully every step of the game. And now, in a market that is growing very big, very fast, and probably has strong network effects, it has an early lead which makes us think it will end up dominating it. In fact, we think Amazon's marketshare will end up closer to 90%.
Here's how it happened and why we think Amazon can't be stopped.Join the conversation about this story »
See Also:
We ran this post a couple of weeks ago. In light of the latest report that AOL just hired advisors to help it figure out how to grow faster and merge with Yahoo, it seemed to make sense to run it again...
The two struggling Internet giants of the 1990s, Yahoo and AOL, should merge.
Immediately.
(In fact, it's ridiculous that they haven't already).
This idea isn't new--we've been calling for it for three years, and, according to Kara Swisher, "big investors" are now calling for it, too.
"Big investors" want Yahoo and AOL to merge, AOL CEO Tim Armstrong to become CEO of the combined company, and Yahoo CEO Carol Bartz to become Chairman (which would be in keeping with what Yahoo's board is discussing anyway). We would certainly be open to that idea--assuming Tim can persuade us that he is tough enough to quickly and efficiently make the big restructuring moves (and cuts) that the combination would require.
But the management structure isn't as important as the combination itself.
Here's why the companies should merge:
Yahoo and AOL are both in the same business, and it is a business that benefits greatly from scale. Yahoo and AOL are both basically media companies. They both use technology extensively, but their core competency is producing content to attract an audience and then selling display ads against that audience. They also both operate duplicative mail, instant-messaging, sports, finance, news, maps, and other services, all of which currently compete with each other. That is senseless. By combining, Yahoo and AOL would achieve greater scale and reduce duplication.
There is huge and needless duplication of services at AOL and Yahoo: "Portal" page, finance, sports, entertainment, celebrity gossip, games, mail, instant-messaging, ad network, search window (outsourced), chat, etc. There is no reason for these services to be duplicated. And by splitting the market, Yahoo and AOL are splitting the market and thus losing more ground to their competitors. Take "mail," for example. Yahoo Mail and AOL Mail are critical traffic drivers to both company's content empires. They keep users coming back many times a day. But both Yahoo Mail and AOL Mail have lost ground to Gmail, Facebook, and Twitter, and Microsoft Outlook is still a major competitor. Left on its own, AOL Mail will die: AOL just doesn't have the resources to keep it competitive with the offerings of far-richer companies like Microsoft and Google. Yahoo Mail may survive, but it would have a better chance with the added scale and resources of being combined with AOL Mail. And the same can be said for instant-messaging, voice-chat, and all of the other areas above.
AOL is affordable, even for Yahoo. AOL's enterprise value is about $2.4 billion. Yahoo's is $16 billion. Yahoo could probably get AOL for $3 billion, maybe $3.5 billion. That's only 20% dilution. And if Yahoo didn't want to take the dilution, it could always buy AOL for cash. Yahoo doesn't know what to do with its cash anyway. (It might have to borrow a bit of money to pay cash, but money is free right now. Alternately, it could sell off its Alibaba stake and raise the cash that way. The stake adds no strategic value whatsoever.)
The combination would be instantly accretive for shareholders. In combining, Yahoo and AOL could not only boost revenues, but cut hundreds of millions of dollars of costs. Both companies are already gushing cash, so the combination would immediately goose cash flow.
The combination will eliminate a major competitor for both companies--both in display advertising and, importantly, in the consolidation of the burgeoning online content industry. AOL just bought TechCrunch for ~$40 million. Yahoo should also have bought TechCrunch--and we suspect that AOL's move might just wake Yahoo's M&A team up. In future sales, therefore, AOL and Yahoo might be competing with each other for companies like TechCrunch. That will drive prices up...unless they're working together.
Combining AOL and Yahoo would make the combined platform a "must buy" for any display advertiser. The display market isn't growing as fast as the search market, but it's still a huge and fast-growing market. Right now, the two companies' sales forces are duplicated. They needn't be. And the combination would offer advertisers even greater reach, inventory, and targetability. This, in turn, would reduce content production costs as a percentage of revenue.
The combined search businesses would have (slightly) more leverage to get better terms with Google or Microsoft. AOL only owns 3 percent of the US search market, but that 3% is still worth ~$500 million a year. Search is an economy-of-scale business, so the added scale would likely allow the combined company to squeeze better terms out of Microsoft or Google.
The combined distribution business would have more leverage with Hollywood, the music industry, and other content creators. Why is the cable industry so powerful? Scale. Once again, the more people you reach, the more valuable you are as a distribution platform. This combination would bring more distribution scale.
AOL's New York media headquarters would give Yahoo an even stronger beachhead in the media and advertising capital of the world. New York still matters, especially in this industry.
Yes, putting the two companies together would be challenging and require painful cuts. But it's not rocket-science. And it also wouldn't involve combining enormously different cultures and businesses, the way, say, the disastrous AOL Time Warner merger did. These two companies are essentially in the same business. As long as management took a disciplined approach to the integration, the merger would stand a good chance of being very successful.
Unless it radically refines and focuses its business, AOL must combine with someone--Yahoo or Microsoft. There is no way it can survive as a generalist all-things-to-all-people brand when it is so much smaller than everyone else in the business.
Yahoo has less need to do this deal--Yahoo already has enough scale--but the combination would help Yahoo. And, as discussed, it would also eliminate a major competitor.
Merging Yahoo and AOL is not "the answer" to both companies' woes. Once they combine, they'll still have to execute. But it's a good step toward for both companies.
They should do it immediately.
See Also:
Well, AOL, We Love That You're Playing Offense Again--But We Still Don't Know What You're Doing
Yahoo's Board And Partners Are Getting Sick Of Carol Bartz's Mouth
Join the conversation about this story »
The real lesson for media companies from this weekend has nothing to do with left vs. right.
It's that reporters and TV journalists who actually express opinions are interesting. They can turn the power of their personality into content people care about, attract large audiences, and generate advertising revenue.
Call it Personality Media. And traditional media ought to be paying close attention -- it can mean big money for media companies if handled properly.
One the reigning champions of Personality Media is Glenn Beck. Another is Jon Stewart. And don't forget the heavy personal touch of other media scions on their digital empires, including Arianna Huffington on Huffington Post and Nick Denton of Gawker.
We're going to take a close look at the business of Personality Media at IGNITION, our conference on the Future of Media taking place Dec. 2-3, 2010 in NYC. The CEO of Beck's media empire, Chris Balfe, will be joining us, along with Huffington, Denton, and other great speakers. Early-bird tickets are on sale through Monday.
Personality Media comes with its own challenges. Who cares that Juan Williams is a bigot? Apparently, just about everyone. Judging by the flurry of coverage following Williams' firing from NPR after he made a controversial remark about Muslim clothing -- and his subsequent hiring at Fox News -- people are fascinated by this story.
Yet media often miss the chance to capitalize on Personality. In fact, personality is exactly the quality they often aim to bleach out in traditional journalism. Editors proudly boast they don't even vote in elections, as it would "bias" their coverage (which is obviously a bunch of crap--not voting doesn't mean they don't have an opinion).
Williams is a classic example of media-opportunity lost. He expressed what a lot of America thinks when America sees Muslims on planes--and he got canned for it.
It's a sentiment some might call crude or offensive. But it could have been a chance to start a conversation. Instead of other media outlets profiting from the ensuing conversation with Web views, popular content, call-in shows, etc. NPR could have been hosting the dialog. It could have created a Web forum to ask listeners' opinions. The remark could have been turned into an investigation of the nature of bias, and Williams could have hosted his own program on bias or the limits of political correctness. One can imagine the legions of commenters both supportive and apoplectic who might suddenly listen to or engage with NPR in a new and unexpected way.
After all, isn't it kind-of interesting that Williams, a member of the press, is willing to publicly admit his fear and talk about it? Couldn't that have spurred some real discussion? Instead, NPR fired Williams. And now Fox reporters are attacking NPR.
Want to weigh in on Personality Media? And a handful of other smart media conversations? Join us at IGNITION on Dec 2-3 in NYC.
Join the conversation about this story »
See Also:
Twitter has issued new rules about how the rest of us can use the words "Twitter" and "Tweet," MG Siegler of TechCrunch tells us.
And the rules are right out of a handbook on how to take yourself way too seriously.
For example:
And:
Naming your Application or Product, Applying for a Domain
Do: Use Tweet in the name of your application only if it is designed to be used exclusively with the Twitter platform.
Don’t: Use Tweet in the name of your application if used with any other platform.
In other words, if you're TweetDeck, a company that was created shortly after the company called Twitter and helped to make Twitter the powerhouse that it is today, you have to change your name to, say, StatusUpdateDeck, because Twitter's lawyers now say they own the word "Tweet."
Now, Twitter's lawyers will no doubt say that what they're doing here is just laying claim to company property, the same way "Xerox" or "Kleenex" or "Google" might do.
But that's crap.
Twitter, meanwhile, just co-opted words that had existed happily for hundreds of years before its founders were even born, and it's now trying to convert these words into company property.
Yes, Twitter's lawyers will say here that they're only trying to control the CAPITALIZED forms of these words, but that's still weenie-like. As MG Siegler notes: "This would seem to be all about Twitter gaining the trademark to the word “tweet”, which they’ve been trying unsuccessfully to do. They also later note, “Please remember to capitalize the T in Twitter and Tweet!” As a commenter notes, it’s funny that they don’t even capitalize it in their own logo!"
(And are Twitter's lawyers really going to be cool if "TweetDeck" changes its name to "tweetdeck"? Somehow we doubt it.)
More importantly, this whole "we own and can dictate how English words are used" thing just runs so counter to the grass-roots power-to-the-people "open" ethos that made Twitter what it is today.
Yes, by imposing ever-greater rules on how application providers can interact with the service, and by co-opting some of the most popular third-party applications, Twitter has already screwed over some of the folks who initially supported it and begun its transformation into a "CORPORATION." But those moves were foreshadowed and expected, and they were arguably necessary to the company's long-term financial success.
Trademarking the word "Tweet," meanwhile, has nothing to do with the company's long-term financial success (unless part of the financial model is expected to be suing people for trademark infringement.) It's just annoying.
So, we urge you to rethink this one, Twitter.
If you want to trademark the company-name "Twitter," fine. But lay off "Tweet." And stop trying to dictate how people can and can't use words that have been communal property for centuries. It's way too early--and your company is still way too cool--to let lawyers take over.
See Also: Here's Who Just Got Screwed By Twitter
Join the conversation about this story »
