Showing posts with label paying. Show all posts
Showing posts with label paying. Show all posts

Thursday, January 27, 2011

Bing Deal With Yahoo Isn't Paying Off For Microsoft So Far (MSFT, YHOO)

bartz ballmer sign

Microsoft's distribution deal with Yahoo to make Bing the default search engine looks like a bad deal for Microsoft so far.

Here's what Microsoft said in its 10-Q statement for the last quarter of 2010 (Microsoft's Q2'11), which the company released this afternoon. During the quarter, compared with one year ago:

Online advertising revenue grew $117 million or 23% to $632 million, reflecting continued growth in Bing, offset in part by decreased third party advertising revenue....Cost of revenue grew $110 million driven by costs associated with the Yahoo! search agreement.

Research and development -- including salaries of Bing staffers -- isn't included in cost of revenue.

So in other words, for every extra dollar Microsoft spent on customer acquisition, it got about $1.06 in new advertising revenue.

Cost of revenue includes other deals as well, and the Yahoo deal didn't really kick in until the end of October -- almost a month into the quarter. But then again, Microsoft has a lot of other sources of online advertising revenue, and none of them are growing fast enough to offset the traffic acquisition costs.

In the long run, Microsoft hopes that the combined market share of Bing and Yahoo will get more advertisers into the system, increasing cost-per-click. The extra data for all those new Yahoo users should also help Microsoft target its ads more effectively.

Then again, Microsoft may not care how much Bing costs now, as long as it keeps the pressure on Google.

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Bing Deal With Yahoo Isn't Paying Off For Microsoft So Far (MSFT, YHOO)


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Friday, November 19, 2010

CHART OF THE DAY: Facebook Paying The Most In Tech (GOOG, AAPL, CSCO, AOL, EBAY)

How is Facebook getting so many talented employees?

Well, it's a cool product, it has pre-IPO stock, and it's small enough that an engineer feels like he or she can really make a difference at the company.

Of course, there might be another, more old fashioned reason too -- Cold hard cash. According to Glassdoor.com (via CNBC) Facebook is paying the highest base salary in the tech world on average for engineers. Even when factoring in bonuses, Facebook still pays the most.

Facebook's base salary is $110,500 on average for software engineers. Next closest is Cisco with $105,720. Google is fifth with $98,814. But, throw in the bonus and Google is second best paying.

This information runs contrary to what we've heard from a source familiar with Facebook who says the company is fairly strict about not paying high salaries. But, Glassdoor's information is based on at least 28 employees anonymously self-reporting data.

chart of the day, software engineer salaries, facebook, google, etc., nov 2010

Follow the Chart Of The Day on Twitter: @chartoftheday

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Wednesday, October 27, 2010

Netflix Paying More Than $1 Billion For Streaming Rights (NFLX)

Reed Hastings, Netflix CEO

The number of users streaming video content from Netflix may be growing like crazy, but the company's latest earnings filing on Monday (PDF here) shows that the transition from discs to bits won't be cheap.

Acquisition of streaming content was the number-one drain on cash flow during the quarter, costing more than $115 million. By way of comparison, the company only spent about $30 million on acquisition of DVD discs. Netflix also revealed that it now owes $1.2 billion in commitments for streaming content deals--that's up from $115 million at the end of 2009.

As Peter Kafka reports at Media Memo, a lot of the expense probably comes from the company's deal with the Epix Pay TV channel, which was signed in August. That deal cost an estimated $1 billion, and gave Netflix rights to films from Epix partners Paramount, Lionsgate, and MGM. Netflix could also end up on the hook for more than $2 billion when it has to renew its deal with Starz, which gives the company streaming rights to films from Disney and Sony.

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