Showing posts with label it's. Show all posts
Showing posts with label it's. Show all posts

Monday, November 22, 2010

eBay Not Involved In Groupon Sale Talks -- Looks Like It's Google's Deal To Lose

Groupon CEO Andrew Mason on CNBC

Groupon is reportedly entertaining a buyout offer of $4-$5 billion from Google.

In the process, it is shopping this offer to other potential bidders through the press.

One name that surfaced last week as a potential bidder was eBay.  But a source close to the company tells us that eBay is not involved in the talks.

So will anyone top Google's $4-$5 billion offer?

Unlikely.

There are only a handful of companies that can afford to buy Groupon and have some strategic reason for doing so.

These include:

  • Google
  • eBay
  • Amazon
  • Microsoft
  • Yahoo

Of these, eBay is apparently not involved, Yahoo can't really afford to pay $5 billion, and Microsoft has very little strategic reason to jump into this business.  That leaves Amazon and Google.

Amazon buying Groupon would make sense--probably more strategic sense than Google buying Groupon. But we doubt that Amazon would shell out the $5 billion necessary to do it.  Amazon's market cap is $75 billion to Google's $190 billion, so the relative cost to the company would be much higher.  Amazon is also not as desperately in need of a new growth engine as Google is.  So we suspect that if it came down to a bidding war, Google would win.

So now the question seems to be, when Groupon finishes shopping Google's offer, will it decide to pursue an IPO--or take Google's money?

Unless Andrew Mason has an ambition to build the next eBay or Amazon, the answer should be obvious: The company should take the money.  $5 billion is not a bad payout for two years work.  And there's enough that could go wrong in this business that it's likely worth letting Google and not Groupon take that risk.

See Also: Hell, Yes, Google Should Buy Groupon. And Twitter. And Foursquare...

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eBay Not Involved In Groupon Sale Talks -- Looks Like It's Google's Deal To Lose


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Sunday, November 14, 2010

It's Still Location, Location, Location

Contrary to what many creative investing courses may tell you, the old standby "location,location, location" still matters. I've seen both courses and speakers attempt to dispel this adage because the technique being promoted miraculously makes physi

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Friday, November 12, 2010

Twitter Cofounder: "It's Not Just For Saying I Had A Bran Muffin Today"

biz stone twitter AP

The media’s in trouble. The microblogging sensation is on fire. Can Biz Stone’s latest gambit help prop up a financially crippled industry? Howard Kurtz reports.

Biz Stone, the funny and engaging co-founder of Twitter, had an unusual message for his communications chief when he finally broke down and hired one last spring:

“We don’t need PR.”

Stone’s view, he recalls telling Sean Garrett, who grinned at the memory, was that “if reporters want to write bad stories, they should totally call us out and shame us.” A tech reporter later explained that he looked “like a schmuck” to his editors when the company ignored his questions. “That’s when I thought, oh my God, we have to get back to these people.”

Now fabulously wealthy at 36, clad in his usual uniform of black shirt, jeans, and running shoes, Stone has seen his life become a whirlwind. Wolf Blitzer interviewed him at CNN this week while he was in Washington to receive the first innovation award from the International Center for Journalists. NBC’s Ann Curry took him to lunch in New York and introduced him to Jimmy Kimmel, whose show he did Wednesday night.

Stone was not particularly surprised when Twitter took off among the media crowd, because he and his partner Ev Williams had designed blogging tools that many journalists adopted a decade ago. Now he sees an emerging partnership—but also a sense of wariness.

“It feels like journalism as an industry was somewhat—what’s the word?—I don’t want to say afraid, but skeptical: Who are these guys now? Are these Internet guys who are going to make all the money but not share any?

“We provide the information. That’s when we hand off the baton to journalists, to provide context.”

Toward that end, Twitter has quietly formed a number of partnerships—some legal, some informal—with top news organizations. On Election Night, for instance, the company provided a steady stream of seconds-old tweets about the midterms to The New York Times, which posted them online. (Sample: “Goodbye Speaker Pelosi. Your power is gone. That’s your karma for not listening to the people! Good riddance!”)

On the same night, The Washington Post became the first news outlet to buy one of Twitter’s “promoted trends,” under the hashtag symbol #election, which linked to a continuous list of stories, headlines, and video.

“It was a great experiment,” says Katharine Zaleski, the paper’s director of digital news products. “We went straight to an audience that is already very engaged and talking to each other, and put our content at the top of the most important conversation of the day. We had tons of stuff we could tweet and were treating Twitter as another home page.”

CNN’s John King used his magic wall to show graphs categorizing 200,000 tweets, dating back to April, in such statewide races as California and Nevada. “It’s as if you could just parachute into diners around the country and listen to what people were saying,” CNN reporter Tom Foreman told viewers. And Twitter plans to ramp up these efforts for the 2012 campaign.

Twitter executive Chloe Sladden says there are “three major areas we discuss and explore with our journalism partners: How Twitter impacts how journalists source and shape stories. How Twitter has changed how news breaks and how audiences follow breaking stories. How papers engage their audience via Twitter.” She declined to discuss financial details, but Stone says the goal is to share revenue with the news outlets.

Is Stone’s ego bruised by non-believers like Tom Brokaw, who recently said of Twitter that “an awful lot of it seems to be… just stuff that fills air”? Stone views such attitudes as a byproduct of the four-year-old company’s explosive growth. “The gap between people who’ve heard of Twitter and those who understand the value of it is still pretty wide,” he explains. “We have to get people to understand it’s not just for saying ‘I had a bran muffin today,’ that it’s an information network.”

That is his preferred phrase, rather than social network, though in my experience there is a strong sense of community within the circle you choose. Stone’s point is that anyone can play: “CNN doesn’t have to approve you. Kanye West doesn’t have to friend you for you to get his tweets.”

With 95 million tweets uncorked each day, Stone is conscious of what he calls the “noise” of Twitter. He says the company plans to make the rivers of information more navigable, not just by suggesting people to follow, as it does now, but by suggesting relevant tweets you should read—based on some algorithm that assesses your interests.

(By the way, Stone gets overwhelmed by technology just like the rest of us. He insists on crafting polite replies to strangers who send him notes, and occasionally gets so backed up that he declares “email bankruptcy. I tell my communications team, ‘I just deleted all my email. If you had anything important, resend it.’”)

When he gets in a groove, Stone can sound a bit starry-eyed. The global surge in mobile phones, he says, means Twitter can reach millions where there is no Internet access. “We can empower farmers in rural areas to have a better of idea of grain prices or weather. We have tremendous growth potential, not just for business purposes but for the purpose of real social change.”

But first he’s trying to change the company’s image in Washington. He recently hired Adam Sharp, a former congressional staffer, as his first ambassador to the capital. Sharp won’t be lobbying but serves as more of a chief hand-holder, helping lawmakers master the art of tweeting and posting Twitpics.

That, of course, could foster some goodwill in Congress, where nearly every lawmaker has a Twitter account, including Nancy Pelosi (23,000 followers) and John Boehner (72,000). The same goes for Sarah Palin (297,000 followers) and Barack Obama (5.9 million, though he’s acknowledged that “some 20-year-old” does his tweeting). Stone met this year with Democratic Sen. Claire McCaskill (43,000 followers) and Republican Rep. Darrell Issa (15,000 followers). He told them he hasn’t been ignoring Washington but that Twitter was tiny, just 150 people working out of a San Francisco loft (it’s now up to 300).

Stone doesn’t seem confrontational by nature, but he did take a swing at Malcolm Gladwell—despite being a “huge fan”—after The New Yorker writer’s recent piece “Small Change: Why the Revolution Will Not Be Tweeted.” Despite all the publicity over Twitter’s role in the Iranian street protests, Gladwell dismissed the “grandiosity” and “outsized enthusiasm for social media,” saying activists were more effective in organizing the Woolworth’s sit-in in North Carolina in 1960. Stone responded to his 1.6 million Twitter followers (“Mr. Gladwell, I totally dig your hair but…”) and at greater length in The Atlantic, insisting that real-time communication “allows many to move together as one.”

“It was a straw man,” Stone told me. “He paints it in black or white. No one ever said forwarding a tweet is like the civil-rights movement in the 1960s… It’s absurd to say Twitter doesn’t have some complementary role to play.”

In the meantime, Stone is having a blast. He recently shot a commercial for Stolichnaya vodka in which he debated his double—playing both parts—about whether Twitter is “just a constant stream of meaningless babble.”

Stone recently saw The Social Network alone because his wife, Livia, who runs a wild animal hospital in California’s Marin County, wasn’t interested in the Facebook film. Stone laughs at the notion that he, like Mark Zuckerberg, might one day be the focus of a major motion picture: “I think maybe they’ll make a bad CW comedy about us.”

He is diplomatic when I ask whether Facebook’s moment has passed. “People could say, ‘Facebook’s not cool anymore. I think the Facebook guys would say, ‘Great, we’re not a fad anymore, we’re part of people’s lives.’ I don’t know that you want to be cool. That’s just a burden.”

If Twitter still has a coolness factor, it’s a burden that Stone wears lightly. He looks slightly amazed to find himself rubbing shoulders with famous politicians and television anchors, as if it’s a dream from which he might wake up.

So how does it feel to be an obscure geek one day and have worldwide influence the next?

“It’s weird,” says Stone. “Sometimes we feel nauseous. Sometimes we feel elated. Sometimes we don’t know what to feel.”

Howard Kurtz is The Daily Beast's Washington bureau chief. This article originally appeared at The Daily Beast and is republished here with permission.

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Saturday, October 23, 2010

Facebook vs. Foursquare: It's Game Time

foursquare_square.pngWhen Facebook Places launched in August, the media wasted little time in calling game, set and match on Foursquare and its location-based social network (LBSN) brethren. With over 500 million users, the theory went, Facebook would become the most popular check-in service due to its sheer size alone.

While Facebook hasn't released any initial stats regarding the number of users or check-ins being generated through Places thus far, personal and anecdotal experiences from early tech adopters suggests the uptake hasn't been significant. Having survived the unveiling of Places by growing its own user base from 3 to 4 million users in less than two months, and with plenty of money in the bank, Foursquare has a shot at growing beyond its early-adopter community and becoming a mainstream network. So how does Foursquare become the next Twitter and not end up like Friendster?

Sponsor

Guest author Alex Calic is a consigliere to entrepreneurs, currently working with The Media Trust, having previously worked with Clearspring, InPhonic, Coremetrics and InTouchPOS. Alex covers adtech, commerce, mobile, social and video on his blog alexcalic.com and on Twitter at @alexcalic.

Make A Few Enemies (If You Want 500 Million Friends)

The launch of Places was a direct shot at Foursquare by Facebook. To return the favor Foursquare should go after Facebook's core audience of college students (something I suggested to Foursquare CEO Dennis Crowley in a conversation last year). Beyond revenge, this actually makes a lot of sense if you remember that Facebook's success was built on its ability to capture the college crowd before opening up to other audiences.

Now considering that 1) with 165 million Facebook users in the U.S. alone there is bound to be some backlash by young adults against parental "friending" as well as overall loss of interest in the platform, and 2) Foursquare's raison d'etre is to help people find new things to do in cities, Foursquare can offer college users a unique experience.

Students who already use Facebook now have the chance to create a new, curated social graph based on people they want to interact with socially - and one that doesn't include their parents. By leveraging Foursquare's discovery element, which the company has started rolling out across several campuses with the launch of Foursquare for Universities, students can develop relationships based on sharing new experiences.

foursquare_glow.pngThe result is the creation of a real social network - one that occurs in the real world and not just online or through social games. Facebook is accurate in not calling itself a social network as it operates more like an ambient network, one that allows people to communicate and interact with their accumulated social graph from afar. Because Foursquare's purpose is to enable face-to-face social interaction it has the opportunity to become the place where your real friends are, i.e. people who you'd actually want to grab a drink or hang out with if you knew they were nearby.

This statement can't honestly be made by anyone trying to socialize beyond Dunbar's number on Facebook. Time will tell if Facebook's just announced Groups rectifies this situation or is too cumbersome for average users to implement. If not, they can resort to playing dirty by enforcing their newly granted LBSN patents.

Show Me The Money (Or At Least a Discount)

Not to be lost in the social aspect of Foursquare's service is the underlying business opportunity. While mayor-ships and virtual badges have been the drivers of Foursquare's early successes (to a maniacal level in some instances), I agree with early stage investor Dave McClure, though not in such eloquent terms, that game mechanics will only take LBSN's so far, and that tangible financial rewards are how these networks can turn into more mainstream services.

That's not to say that Foursquare should abandon its game mechanics. In fact the social activity driven through these features of Foursquare's service should be leveraged by local businesses because these mechanics can create the right type of incentive structure. Local merchants are eager to tap into in-discretionary spending habits (especially those of college kids), but in a cost-efficient manner that creates loyalty beyond just the initial lead generation. In the same breadth, consumers are interested in deals at local establishments - especially promotions they can opt-in to. That's where leveraging Foursquare's Swarm Badge to drive group participation makes sense.

The concept around Swarm Parties, in which businesses offer discounts to customers once a minimum number of users have checked-in on Foursquare in a given time period, has proven to be effective in increasing sales for local businesses in both the U.S. and overseas. This hasn't been lost on the likes of recently launched GroupTabs, which is looking to provide group discounts for local merchants by combining the check-in features of Foursquare with the deal incentives of Groupon.

While Groupon itself has shown how effective it can be in driving one-time sales for local businesses, it does also have its drawbacks. Foursquare can help businesses foster the long-term loyalty with consumers that is missing from Groupon-type offerings by helping merchants create incentives that can exist beyond virtual badges. This could include leveraging relationships merchants already have with consumers through loyalty cards, which CardStar is already doing by integrating Foursquare into its service, or creating new reward structures based on check-in frequency.

Find Other Ways to Help Users Grab Life... And Experience New Places

Beyond group incentives, Foursquare needs to find other ways to be useful to users and businesses in discovering one another. The recently launched "Add to My Foursquare" button is a great way to transfer an individual's Web-based interest in a venue into actually visiting the physical store when they check-in nearby that business. Beyond Web surfing, Foursquare's recommendation engine, which is still being tested, could offer search engine-like opportunities for users to find, and merchants to pay to promote, businesses based on matching users' check-in activity with potential interests. Combined these capabilities can not only enable better discovery and thus socialization opportunities for current users, but also act as a starting point for new users who don't have a check-in history but want to benefit from the wisdom of the local crowd.

Foursquare's ultimate success, in addition to keeping the service up and running, will depend on its ability to create tangible benefits for its current users, before they start losing interest, while simplifying the value proposition for mainstream Facebook users to understand and start using Foursquare. If not, companies like Google Ventures-backed SCVNGR, which now has 500,000 users of its own, has the pieces in place to compete with Foursquare through its own brand relationships, university outreach program and group-buying functionality, are waiting in the wings to take on Facebook Places.

Ball's in your court Foursquare. I'm rooting for you.

Photo by Vadim Lavrusik

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