War of the Dolls: Barbie Vs. Bratz Translates To Mattel Vs. MGA - Bratz Dolls Infringed On Barbie Doll Copyright

Intellectual property rights are very important nowadays where mere ideas and concepts can be the capital to any successful business venture. It used to be that you had to create some tangible product and manufacture it to make your business empire. These days it can become much easier to create that business, but it can also be that easier to lose!

Bratz for instance, which looks weirdly like Barbie in most ways has recently been canned by federal court recently and will have to stop selling come next year.


“In the most dire scenario, MGA can’t sell Bratz at all and a humongous chunk of their business disappears,” said Needham & Co. analyst Sean McGowan. “But it’s likely they will work out a way for MGA to stay in business but Mattel to profit.”

Here's some more detail from MSNBC.

The federal judged banned MGA from making and selling all 40 dolls in the Bratz line, which it began selling in 2001, including the four originals — Yasmine, Chloe, Sasha and Jade. U.S. District Judge Stephen Larson also ordered MGA to reimburse its vendors and distributors for the cost of the dolls and all shipping charges for sending them back.

The ruling, issued in a California federal court, followed a jury’s finding that Bratz designer Carter Bryant developed the concept for the dolls while working for Mattel. The same jury later awarded Mattel $10 million for copyright infringement and up to $90 million for breach of contract after a lengthy trial stemming from Mattel’s 2004 lawsuit ended in August.

The post-trial dispute that prompted Wednesday’s ruling centered on whether the jury found that only the first generation of Bratz dolls infringed on Mattel’s copyright or whether all the dolls in the line were in violation.

The jury verdict form asked panelists only to find whether there was infringement and assign a dollar reward, but did not ask them to specify which dolls violated the law.

If you're asking, what led to this scuffle? The Bratz range of dolls were the first serious competition given Mattel's fashion doll queen, Barbie. In 2004, sales figures showed that Bratz dolls were outselling Barbie dolls in the United Kingdom, although Mattel maintained that in terms of the number of dolls, clothes and accessories sold, Barbie remained the leading brand. In 2005, figures showed that sales of Barbie dolls had fallen by 30% in the United States, and by 18% worldwide, with much of the drop being attributed to the popularity of Bratz dolls.

In April 2005, MGA Entertainment filed a lawsuit against Mattel, claiming that the "My Scene" line of Barbie dolls had copied the doe-eyed look of Bratz dolls. The lawsuit is currently pending in the court system of California.[13]

Mattel sued MGA Entertainment for $500 million alleging that Bratz creator Carter Bryant was working for Mattel when he developed the idea for Bratz. And so here we are now, Barbie wins over Bratz

What Happens When A Company Veers Away From Its Brand Color? Starbucks Goes Red This Holiday Season

Starbucks goes red? When a company intentionally veers from its traditional brand color, there better be a darned good reason. Starbucks for instance has joined the Product (red) brigade, spearheaded by U2's Bono to fight AIDS, tuberculosis and malaria.

It's marketing for a cause and it's a beautiful thing. When companies make themselves productive beyond the scope of their own profitability, it is just a blessing not only to the organization but to the world



Seeing a company that contributes to the world's sustainability is impressive. Companies in the private sector do not operate in a vacuum, but in a world where at some point everyone is interconnected.

Every time you buy coffee at Starbucks, five cents will be contributed to Africa. It's not a lot but it can save lives. It's a good start. When company brands as big as Starbucks start to take notice, I certainly do hope others will follow. This is a great way to blend holiday marketing as well.

Holiday Sales versus Holiday Discounts: Are You Giving Too Much For The Same Revenue?

Holiday shopping is still in full swing even with the economic slowdown. Black Friday has shown no signs of a decrease in consumer spending as thousands flocked to their favorite retail destinations to get the best deal for their money.

The National Retail Federation, adding up sales Thursday through Saturday and projected sales for Sunday, said that each shopper spent about 7 percent more this year than last year. Shoppers spent an average of $372.57 Friday though Sunday, according to the federation, a trade group.

Strength of online sales can even be seen via this reuters article that said, PayPal, an online payments service owned by eBay, saw almost 34 percent more transactions this Black Friday than a year earlier.

PayPal saw sales rise 26 percent on Black Friday, the day after the Thanksgiving holiday that traditionally kicks off the U.S. holiday shopping season. PayPal said its sales numbers reflected 12 percent of all U.S. e-commerce.

Black Friday is best known as the day consumers crowd shopping malls, while greater online traffic is expected three days later on "Cyber Monday," when consumers use faster Internet connections at the office to make purchases.

Overall Web sales during the U.S. holiday season are expected to be flat at about $29 billion this year, according to tracking firm comScore.

Amazon.com said Apple Inc's iPod touch was the top-selling electronics item on Friday morning, followed by a Canon Inc PowerShot camera. Wii Fit and the Wii console were the top-selling items in the video game category, while the LeapFrog Tag Reading System was the best-selling toy.

But are we giving too much away? Analysts said the discounts that drew in shoppers over the weekend were so steep that many ailing chains might be no better off in the long run.

“You’re looking at discounts of 50 to 70 percent off,” said Matthew Katz, managing director in the retail practice of Alix Partners, an advisory and restructuring firm. “You have to sell two to three times as much to break even.”

What will the Holiday Season be like for Online Retailers?

More than half of online retailers (56.1%) expect their holiday sales to increase at least 15% over last year - although last year's survey had found that three-fourths (77.5%) expected their sales to grow more than 15%.



Overall results show that “Retailers will be heavily promotional to attract shoppers on a budget, but have also invested in new site features to improve the online buying experience," according to executive director of Shop.org - retailers will suffer from the economic slowdown but nevertheless they are believed to be resilient.

What are retailers doing to manage the economic slowdown this holiday season? What online strategies will be applicable this year?

1. Majority of retailers (78%) plan to offer free shipping with conditions* at some point during the holiday season, consistent with last year’s levels.
2. Compensating for increased shipping costs by renegotiating terms with shipping providers (40.4%), closely managing company headcount (33.3%), and reducing other promotions (15.8%).
3. One-fifth (21.3%) of retailers will require a higher purchase amount for customers to be eligible for free shipping, and one in ten (10.6%) will cut back on usage of free shipping with no conditions.
4. 42.9% of retailers added or improved their website since last holiday season, to help customers navigate sites more easily.
5. Websites now provide product video (42.6%) and customer reviews (32.7%) can give shoppers more information to make buying decisions.
6. Website enhancements in clearance-sale pages (27.1%) and featured-sale pages (31.3%).
7. Nearly one-fourth (25.0%) of online retailers added a Facebook page this year

What are buyer behaviors (consumer patterns) this holiday season?

1. Consumers acknowledge that 24-hour shopping convenience is one of the main reasons they choose to buy online (58.6% this year vs. 58.5% last year).
2. Shoppers’ other top reasons for buying online instead of in stores include not wanting to fight crowds (41.1%), easy price comparisons (36.4%), and free shipping (33.3%).
3. Nearly one in four shoppers (23.1%) says they are spending more online due to high gas prices, more than double the number which said the same last year (9.0%).
4. One in five shoppers (20.1%) say they simply have less money to spend this year for the holidays, while 10.6% cited a poor economy as a factor.
5. One in ten (11.0%) plans to spend less online this year due to high shipping charges.

Findings shown here are from the eHoliday Study conducted by BizRate Research, a Shopzilla company, for Shop.org, surveyed 2,040 online buyers (defined as anyone who has made an online purchase in the last 12 months) from September 29 to October 3, 2008, as well as 60 online retailers from October 1-20, 2008.

If You Were PaperMaster What Would You Do?

Okay you're a genius engineer, considered one of the premier chip designers with IBM. You're so good in fact that you became vice president of microprocessor technology development in IBM. But you happen to have so much more potential, so Apple across the street offer you a position as well. Steve Jobs' company offers you a vice president position for device hardware engineering.



Possibly there was a lot of fine print here not mentioned in the news but one thing led to another and you take the position with Apple - probably more money.

But when you start your first day, you get the shock of your life - you get sued! IBM claims that you have violated prior employment agreement by accepting a position at a competitor and may divulge IBM's trade secrets to Apple.

This is what happened to Mark Papermaster. He has reportedly has authored several papers on PowerPC chip development and is considered a "top expert in Power architecture and technology." Papermaster's expertise in system design--putting together the entire package of processor, chipset, and the rest of the guts that form a computer--could serve him well at a company that prides itself on soup-to-nuts design.

It's such a shame as Steve Jobs had such high praises for this guy. “Mark is a seasoned leader and is going to be an excellent addition to our senior management team,” said Steve Jobs, Apple’s CEO.

So now he's in big trouble. Wonder if he gets paid? That's like being in between a rock and hard place. Management sure is a difficult spot to be in. It's not like you're just an engineer, but being in a position like that allows you permission to privy information/ sensitive information that makes it complicated in what may otherwise be such simple terms as work transition

Yahoo CEOs Daughter Tells Guard To Google Her

Now it's rather ironic when Yahoo CEOs daughter says "Google me, you dumb f**k!" Not just because it's very rude and unkind, it's also promoting the competition. It's unfortunate that Courtenay Temel had to be in the drunken state to have blurted out those words. Ending up in this rather messy lawsuit.

Isn't Yahoo already in enough trouble as it is? Last October 30, Jaroslaw Jarczok claims he was working security last August at 4 in the morning at PureNightclub when Courtenay was "quite intoxicated due to alcohol and/or chemical or other substances."

Apparently it got out of hand because Terry Semel's daughter was eventually handcuffed to which she said, "Do you even know who I am, f**king idiot?...Google me, you dumb f**k."

And that will go down in history as one of the worst things she could have said, ruining not only herself but her dad as well. Haven't heard about Semel as Yahoo's CEO in business terms, it's such a shame his name is dragged in mud as a result of his daughter's drunken escapade.

Why start bgC3? Bill Gates' New Company

Bill Gates officially retired from Microsoft mid-year 2008, but then jumped ahead to build another one - bgC3 a.k.a. "Bill Gates Catalyst 3", earlier named Carillon Holdings. BgC3 is supposedly described as a "think tank," which includes "scientific and technological services", "industrial analysis and research", and "design and development of computer hardware and software". Others say it's a way of coordinating Gates's business and philanthropic work.


I think Bill Gates wants to focus on less grind work and more broad strokes, Nobel-worthy activity. I've met CEOs who dream of just thinking about what the company could be or could be doing in the next 3-5 or even 10 years without having to worry about the limitations of now, or the current problems (Vista) faced by the company's current image and processes.


No doubt, he wants to be free from actually worrying about how Microsoft runs while still being able to contribute to its success. It's always nice to be in the planning stage and not have to worry about the details. I guess that's the privilege of being a retired CEO

What Will Happen To Marketing In The Time Of Economic Crisis?

That question must be in the minds of a number of marketing professionals these days. What do we do with marketing now in times of economic crisis? Given the economic conditions brought about by the US recession, it's imperative we ask:

1. Do we shut down marketing?
   
2. Do we slowdown on marketing?

The answer to #1 is of course NO. Do not stop marketing. Research shows that retention is strengthened in consumers particularly when marketing is done during economic lows. Why is that? Because your company emanates an image of strength and tenacity during a time when everybody else seems weak and vulnerable.

I'm inclined to respond "no" to the 2nd question too, but of course there will have to be a consideration as to the company's budget and goals. I am not averse to cost cutting when it is done prudently. However, marketing is a very complicated thing - because you spend money to make money. You spend a dollar to get a hundred or maybe even more.

Although cutting marketing cost may end up having to be an option when the bottom line becomes thin, it is nevertheless not a wise move specially if your marketing campaigns are timely and targeted. Because even if the economy is down, your market may still be nudged into the right direction. Even if you decide to lower the marketing budget, always bear in mind the opportunity cost of returns that may not be gained.

One thing about marketing is that, if people are really not interested (or if your marketing campaign does not echo the right message) they will not respond to your advertising.

Bear in mind that marketing is an activity of resonance. Prospects will respond to your message if your marketing campaign is successful - meaningful and well-targeted. Regardless of the signs of the times, people will still spend for essential commodities like food and clothing. Although they might tighten their belts in terms of non-basic expenditure such as vacations, hobbies and maybe extra services that they can still live without at the moment, they might still part with their money if they perceive the value to be much higher than the actual money they shell out.

So capitalize on your products value, if consumers see the value and/ or quality of your product then for sure your marketing will be well worth the allocated budget.

Predictions on How the Philippine Economy will Suffer along with the rest of the World

It's a good thing the Philippines wasn't so advanced in the first place in terms of investment because if we had been, then the Philippines would also be in a pretty bad shape now.

The only reason the Philippine economy is still afloat is because the Philippines was too poor to invest its finances in the riskier financial institutions. Unfortunately the smarter more advanced economies thought that taking smaller more secure investments and reinvesting them into riskier investments made them a lot more money. Unfortunately, that didn't work out the way they planned it.

The Philippines will feel the ripple effect of the US economic slowdown. The impact will be felt first of course in the stock market as well as direct exposure. The latter is minimal while the stock market will hurt PSE among other things. And then in terms of incoming investments. The export industry will suffer - particularly those that service the US and Europe. Yes Europe is also in trouble as a result of the sub prime catastrophe. Iceland has already declared bankruptcy and I'm pretty sure that country was much better off than the Philippines. Both the US and the UK have put in place bailouts as sponsored by their governments. Let's hope they make it through this as well. Because we are all interconnected financially, the Philippines owing money to other countries, make it susceptible to these changes although not on our shores.

Nevertheless the living conditions won't be as bad as it has always been - prices will continue to be high, gasoline prices have at least has gone down because there is less demand for oil now as a result. Business that are dependent on tourism and incoming remuneration from abroad will be hit specifically.

If OFWs abroad will have a difficult time, the Philippine economy will be hit pretty bad although I doubt the the extent to which overseas Filipino income will be threatened any worse than an American or European.

The newspapers these days are just peppered with images of the stock market and how it has just crashed amidst the US economic trouble. The bail-out will take a few months or even years to take effect - as the primary issues now are that people are no longer comfortable with spending money, banks are no longer free to give as much credit as they used to. There is a lack of predictability as to what might happen to the stock market, everything being red now.

Some people are buying stocks while their dirt cheap while most are just unloading what seems like lost causes.

The world will be a lot wiser after this economic slum... if it will survive it

Will The US Bail-out Work?

I have been too busy at work to notice recent international news - particularly about the US economy, given that I've just moved to a new office and am still trying to learn the ropes of the business so to speak. I thought that now that I no longer work for a foreign company, I could get away with not knowing what was going on there.

But the Lehman Brothers bit me in the a*s. A global perspective was required in order to complete a Board of Directors' presentation. I went along with it because it was the right thing to do. Of course there will be local and global impact to what will happen to the US economy.

So now I'm forced to pay attention. Here's what happened for the hapless such as myself.

The subprime crisis already began years ago. The US decided to buy bad assets from developing nations and provide a lending service to not exactly "credit worthy" applicants. This was not a suicidal effort, but in fact at that time a seemingly brilliant initiative.

The idea was even if these financial institutions lent money to people who can only repay a small portion up front; considering that the working conditions will improve in the next 3 years and their assets will appreciate, these firms "ballooned" the repayment over a delayed period (about 3 years or so). That way the lenders will pay a little up front but then have enough money later on to pay for an increase repayment after several years. I bet at the time it seemed like a win-win situation.

This was of course until mid-2007 when the interest rates on housing started to rise and investors were getting shaky. As a result people were forced to sell their investments, impacting the stock market and further damaging the financial institutions that lent money because people were now unable to pay them back when their repayment figures were significantly higher.

So the complex web of financial transactions occur until here we are in a state where "everyone owes everyone." Companies like Bearns Stearns, Meryll Lynch & Lehman Brothers who capitalize on these investments felt the blunt first.

And so Bearns Stearns and to be rescued by the US government while Lehman Brothers ended up filing for bankruptcy last Sept-15. Right now the US government needs to implement their $700 billion bailout plan (if that's what it's going to be or something better up their sleeves really quick) or it will hurt not only for America but for the rest of the world as well as the domino effect will just spread throughout the world.

Now to answer the question: Will the US bailout work? According to Forbes it's too big to fail as it brings together Republicans & Democrats to the table as Congress tries to digest Bush's initiative. They say it's no good but there's not better choice right now. It is a rather dire situation - do or die.

If the rescue plan fails, the economy fails. The rest of the world can only watch and wait.

Delta Air Lines Will Take The Wifi Route To Beat Competition

The airline industry is quite robust and very competitive. Everyone competes to be the best airline around. They offer sodas and snacks as well as in-seat entertainment systems that aims to make the passenger experience a lot better than the other airline.

Delta Air lines has taken this competitiveness to a whole new level by making their airplanes virtual wireless internet (WiFi) hotspots. Delta is the first large U.S. airline to commit its main fleet of jets to a technology that lets passengers surf the Net while flying. The service will be available for a $9.95 flat fee on flights of three hours or less, and $12.95 on longer flights.

Beating out JetBlue that offers a limited online solution composed only of e-mail, messaging and shopping on Amazon.com.

Now why did Delta choose this service as compared to other unique service points? Here are a few reasons

• It's cheap. Delta though would term that cost-effective instead. They don't have to shell out a dime for additional manpower in the airplanes and or additional infrastructure. All they had to do was partner up with a service provider - in this case it was Row 44
• Quick and easy to deploy. Again because of the minimal need for additional manpower and infrastructure to support such an additional service in the part of Delta, it is indeed the wise choice. It's not only cheap but easy to set up.
• Does not require a lot of maintenance. Since the service provider handles the efficiency part of the bargain, all Delta really has to do is sit back and watch the money roll in

Like any option for an additional service, the above criteria should be checked. It is imperative that if the company decides to provide an additional service, it should be well worth the effort. Meaning it is appealing to the customer and it is cost effective as well as easy to deploy.

Particularly as prices of consumer products and services continue to rise, it is very important that companies let people see the value of each and every purchase. This goes the same for commercial flights.

This will ensure a win-win situation.

Mirror Mirror on the wall, who's the biggest ad spender of them all?

The biggest ad spender for Q1 of 2008 goes to the Healthcare sector and with good reason! As the world gets more polluted, more and more people are putting a premium to health and insurance with Nielsen Global Consumer Concerns report, May 2008 noting health as the global consumer's biggest concern. This makes a lot of sense. There are so many kinds of diseases going around, people are so busy now making sure they're insured for their family or that they stay healthy enough to go on working.

Basically the growth in advertising spend per sector looks like this

• Healthcare - 10%
  
• FCMG or Fast moving consumer goods - 6.7%
  
• Clothing and accessories - 5.5%

With regards to advertising medium, television has seen much growth too in the last quarter, followed by radio and newspaper

Will Starbucks Say Goodbye Soon?

Starbucks has been going on a downward spiral with an initial job cut and then a lawsuit over "free" wifi. Starbucks is finally closing the doors of 600 outlets! That's a lot I tell you. That's approximately 10% of their total store chain since they have 6,800 US stores. And 600 stores have the equivalent of 12,000 employees losing their jobs. That's really sad.

So what happened you ask? Let's take our answer from Boston.com's Alex Beam - he has laid down in the best and simplest possible terms the answer

What went wrong at Starbucks? To invoke the venerable business cliche, they didn't stick to their knitting. Their core business was overcharging consumers for coffee, and a very lucrative business it was. Then they started selling dreamy CDs, and the company even helped produce a movie, "Akilah and the Bee," that bombed at the box office. Schultz bought a basketball team and started hanging out with Mick Jagger and Paul McCartney, the usual recipe for business disaster.

Google Getting Sued Again! This Time By Viacom Bec Of Piracy Issues On Youtube

There have been just articles upon articles on privacy issues for online use. And I agree that is imperative that people be able to retain online privacy at some point. Companies like Google though make a living out of collecting personal information from users. This allows them to profile clients, enhance advertising and improve the user experience online.

But in cases like this when Viacom sues them, that information also becomes a threat. After illegally posted clips of "The Colbert Report' was posted on Youtube, Viacom cried foul and demanded to know who was doing this.

This then started the avalanche of online piracy and online privacy nightmares for everyone concerned. The judge just ruled that Google would have to turn over user information for Youtube, and although I don't think it's really a big deal as long as they find the culprit and put the case to rest just so we can all go on with our lives, it's still sensitive that this amount of powerful data can fall indeed be transferred and can indeed fall into the wrong hands.

At this point though, Google and Viacom have come out publicly to say that they will do everything they can to retain people's anonymity. Yeah right!

Guess Chocolates Can Also Be Used In Business, Not Just In Courtship - IBM Tries To Win Over Africa With Chocolate

I absolutely LOVE chocolate. I don't know how people can survive without it. Well actually I do know, I just enjoy chocolate so much I think it should be part of the daily diet. Chocolate tastes good, makes you feel good and is not that expensive. It also doesn't take that long - unlike other things that are also considered satisfying.

Anyway moving on, IBM is attempting to endear itself to Africa. It's weapon of choice - you guessed it - chocolate! And why chocolate? Apparently it is Africa's primary crop and source of economic stability. And so understanding cocoa and in turn chocolate will help the region improve over all - the people and the economy.

With IBM's recent million dollar investments in Africa, it would make sense for them to give some back for a change and help the region flourish. So how are they doing this? IBM is having their new supercomputer Blue Gene to understand the genetic makeup of the cocoa genome that could make it more resistant to droughts and pests, which could lead to a steady crop and contribute to Africa's economies.

A noble feat - but also with criticism, apparently there may be some ulterior motive aligned with business and financial returns for the company. Makes sense, IBM after all is a corporation and not a charity foundation. I agree with their business strategy as long as it helps people instead of cause harm then I guess no foul.

If Africa is to gain with IBM's supercomputer profits - then I guess all is well with the world.

The Separation Of Bill Gates And Microsoft

After 30 years, it looks like the end has come for Bill Gates and Microsoft. The end not being a termination of course of either but instead a change in relationship. Bill Gates is finally stepping down and is now just going to work part-time. Taking it easy I guess. Must be the stress.

Everybody thinks Gates is some genius. The college drop-out who was once the richest man in the world with one of the most innovative companies around.

I do agree that Bill Gates is sort of a legend now. It's good I guess that he's stepping down. Sort of sounds like the end of an era so to speak for the tech world. It would be a shame if he were to go down in flames, beaten bad by Google. So this is the smart approach to bow down in grace while still retaining the image that you're still at the top of your game.

Bill Gates was interviewed by CNet on what might it be like for him After Microsoft and what his thoughts were on the future of technology and Microsoft as a company. He also talks about the failed Yahoo buy-out. Apparently Microsoft already has a stand-alone strategy of its own. Probably as a Plan B, should the acquisition fail - which it did. But anyway, their goal is probably just the same as all the other companies. How do we grow? How do we scale?

Read the complete CNet interview here.

Yahoo's Re-organization - Damage Control?

Yahoo has been in a bit of trouble. It might have declined the Microsoft buy-out offer in a futile attempt to stay afloat. Yahoo, the company and as the brand is suffering extreme criticism from all sides. Executives are leaving for greener pastures, which only goes to show that something may be amiss within those hallowed walls.

That's not to say that not many have left Google and Microsoft. I'm sure many talents there have also left in search for the better opportunity. And may have found them through other smaller companies that are still able to provide them the leeway and freedom that most probably the big guns have now refused to shell out.

But as for Yahoo, the company is indeed on shaky ground. With one executive after another publicly exiting. There must be a very think atmosphere of frustration and anxiety there. I do hope the restructuring does help them figure out what happens.

Analysts seem to think that Yahoo is the result of death by product management. Perhaps it's true, but how come the multiple product perspective didn't impact Google? There must be something wrong with the business strategy or management that's affecting how the company operates from inside out.

It would be shame though to lose Yahoo. I do think they are still one of the best in the online business world and I do hope they figure this out. I've seen Yahoo grow throughout the years and they are still quite admirable although they aren't number 1. Number 2 still isn't a bad place to be.

Yahoo Dumped Microsoft Buy-out For Google Non-Exclusive Partnership. Has the Courtship Ended? Or is it just beginning?

Yahoo has finally made their call. They have finally said "NO" to Microsoft. Yes Microsoft got dumped. Yahoo didn't want a buy-out or maybe they did, but they just didn't think Microsoft's offer was good enough.

What they have done instead is partnered with Google. They have ceded their search capacity to Google. So right now, the ads that will come out on Yahoo are essentially Google ads. That's what it means.

The business strategy here being that revenues could potentially increase for Yahoo search. However the flip-side is that this gives Google even more power in the market. It's now closing into monopoly if I may say so myself as Google supplies other smaller search engines like Ask.com

CNet reports that Yahoo expects the revenue to help the company invest in its dual-pronged advertising strategy that's designed to offer advertisers an easy ability to buy text ads on search results and to buy graphical "display" ads elsewhere on Yahoo's considerable Internet properties.

"This agreement provides a source of funds to both deliver financial value to stockholders from search monetization and to invest in our broader strategy to transform display advertising and advance our starting-point objectives with users," Yahoo President Sue Decker said in a statement. "It enhances competition by promoting our ability to compete in the marketplace where we are especially well-positioned: in the convergence of search and display."

Under the deal, Yahoo will select the search terms for which Google will supply ads, the companies said. The ads will be displayed in the United States and Canada, and Decker took pains to say how Yahoo controls which Google results are displayed and when.

Yahoo's search ad engine, Panama, is competitive with Google's for many popular queries, but Yahoo plans to use Google with less common searches, Decker said. "Yahoo monetizes very competitively with Google for query ads but is not as competitive in the tail," she said, referring to the long statistical tail consisting of a large number of infrequent searches.

New iPhone, New Business Model For Apple

Apple will be selling the new third generation iPhones at a much cheaper rate. $200 less than older versions, if you can imagine that. That's sure to kill future purchases for older models though

But the way Apple now shares its income with carriers has also changed. Whereas historically, carriers get a percentage of the initial purchase and the users continuing payments during the life of the contract, the new scheme lets Apple keep all of the initial sale while carriers will benefit more from the recurring fees of users.

I think this isn't such a bad idea as carriers will be forced to provide more continuous customer support after the sale.

Apple has decided to expand its dealership for operators. Under the former business model, Apple reached exclusive deals that allowed only one operator per country to sell the phone. That strategy, while building up demand, was criticized as cloistering the iPhone from a potential huge audience.

All this will fall into place when the new 3G iPhone goes on sale next month. So watch out for it. It's twice as fast at only half the price -- on sale July 11

Microsoft's and Apple's Approaches To Security Disclosures - The Carpet Bomb Case, Microsoft Says Stop Using Safari

This shows how 2 companies can be very different in approaching dilemmas. I guess it's company culture combined with executive decisiveness.

I do not criticize Apple for being the way they are. It's great to come clean about a problem and say, "Yes we have a problem and yes we have the solution." But it doesn't help in the interim if it takes 3 months to find the answers.

I also see Microsoft's point of coming forward early in the game and calling out the competition. We all know something is wrong with Safari and they have acknowledged that Safari coupled with Windows poses a very vulnerable spot for users versus hackers.

This article in Computer World quotes nCircle's Storms, "Microsoft has really embraced the enterprise, and decided that disclosure and a regular patch schedule is what the enterprise needs to support and maintain its products.

"Apple, on the other hand, appeals to consumers, and believes that for the majority of consumers, issuing an advisory without a patch would probably just create FUD [fear, uncertainty and doubt]," Storms concluded.

As Storms noted, Apple has remained silent on the Safari carpet bomb problem. Last week, it did not respond to a request for comment on its security team's decision against adding a user-approval option to Safari. The company was not available Saturday.

Microsoft did say that it was working with its rival, however. "[We] are working with our colleagues at Apple to investigate the issue," said Tim Rains, a product manager in Microsoft's malware protection center, in a post to the MSRC blog.

No timetable has been set by Microsoft for patching its software to block combined Safari-IE attacks. As it often does in security advisories, the company only said that it may issue a patch.

Well now I'm glad I'm using Mozilla Firefox instead of the reportedly bugged Safari and Internet Explorer.

Google Takes Top Online Property Position For The First Time With Barely 1 Million Visitors Over Yahoo

Wow I always thought Yahoo had the edge in terms on online property, but recent study has shown that Google was victorious this month in routing visitors to their sites.



For more details on this web ranking report - visit Marketing Charts

Bill Gates Does Touch Wall Demo For CEO's

I guess it is always more effective when the CEO of one company speaks to others like him, rather than the typical sales person. Bill Gates pulled off the Touch Wall demo with the precision of the Microsoft giant that he is. Although haunted by news that he is to be soon-to-be-retired chairman - being a has-been does not seem to be affecting Mr. Bill Gates.

His demo of Touch Wall was pretty good. In fairness though, the product is amazing. An offshoot of Microsoft Surface, Touch Wall includes special software plus "some scanning cameras down here at the bottom, so whenever I go up to it and say just touch it, the software will notice that, theoretically," Bill Gates said so himself.

He also spoke about another related product in Beta News:

"I've also shown here the RoundTable, which is the videoconferencing thing that takes the entire view, the 360-degree view of everybody in the room by using multiple cameras, and creates that teleconferencing interaction that's far, far better. That's a new type of interaction," continued Gates.

Now emerging on the horizon, he said, are "little thin, tablet-like computers that have both the pen capability and that finger touch...and you'll be able to switch back and forth between those."

Gates told the CEOs he ultimately foresees vertical and horizontal natural interfaces of various sizes appearing almost everywhere.

"This idea that you just sit there and interact, touch, you don't have to learn anything, that naturalness really draws people in. So, it's been a strong success so far, and that form factor is going to get cheaper and smaller," predicted Microsoft's chairman.

No wonder he's the genius behind Microsoft - how else do you sell something that would be this expensive? I mean come on who else could possible afford it. I certainly wouldn't but my CEO, yes he will. Now that's marketing to a target audience.

Dissension Within The Ranks - Ask.com

There is said to be dissension within the ranks of Ask.com, with Barry Diller - Ask.com's CEO believing that Ask.com needs better high profile advertising while Jim Safka who used to run Match.com and ran the famous campaign featuring Dr. Phil McGraw stands for his premise that it would be more beneficial for Ask.com to develop the core search engine as well as creating flashy features that will differentiate it from the other big players in the search market like Google and Yahoo.

This disagreement among executives causes a confusion of company direction from budgeting for infrastructure and staff direction. It has been said in a New York Times article that there was always a clash about everything from how much to spend on engineers and servers to the design of their logos to the scripts of their commercials.

This is very dangerous for a company. If there is no unison in terms of goals and direction then the company is only heading towards a downward spiral.

How The Number 1 Brand In The World Stays On Top - The Secret Of Louis Vuitton

Louis Vuitton was recently ranked the No. 1 luxury brand in the Millward Brown BrandZ ranking of the Top 100 Most Powerful Brands, a list that covers 50,000 brands worldwide according to Forbes.

So what's their brand secret? Well for one, they are revolutionary. Consider their newest endorser - Keith Richards of the Rolling Stones. He's not the typical celebrity endorser and they know it. But why pick him? They want trend-setters and jet-setters. People who will pay the extra grand to get the best in luxury.

The economy is already unstable as it is, why settle for the girl/ boy next door who might not even have enough money to spare? Louis Vuitton is going for class A, retirement age individuals who have money to burn.

Bold moves like this keep Louis Vuitton ahead of the pack currently with a brand value of $25.74 million. Sometimes it's just amazing how they started as a steamer trunks and luggage retailer in 1854 and eventually evolved into the marquee brand they are today.

Wendy's Brand Attempt To Pick Itself Up

Business Week attempts to capture Wendy's start and fall in its recent article. It also aims to show how new owner Triarc might help turn the company around. Here's the article.

Wendy's has been struggling for several years. It has failed to keep up with trends in the industry, such as boosting growth by focusing on breakfast and value menus. For example, last summer, while McDonald's (MCD) focused on making its franchises a convenient stop on the morning commute with its new and improved coffee, Wendy's served breakfast at only 500 of its 6,000-plus franchises.

In a joint press release, Triarc and Wendy's said that the deal should be completed during the second half of 2008, pending shareholder approval. With Peltz and his partner Peter May owning over 35% of Triarc and their investment company Trian holding 10% of Wendy's, approval appears to be little more than a formality.

Now it's Triarc's turn to see if they can turn Wendy's around. Restoring the luster to Wendy's brand should be first and foremost for Peltz and Triarc, UBS' Palmer said. "[It would be] helpful to them if they made their restaurants as high end as people perceive their food to be."

Changes in how the company is managed may also reduce costs across the board. Operating improvements could lead to $100 million in annual savings; combining operations another $60 million. Profit margins, which have been falling, also need to be brought up to the levels of other fast food restaurants.

"Wendy's may have lost its way a little bit since Dave Thomas died," said Morningstar analyst John Owens. "If Peltz puts a plan that the franchisees can get behind, I think the prospects [for a turnaround] are good."




After Wendy's founder Dave Thomas died in 2002, Wendy's has suffered from an identity crisis. Thomas appeared in over 800 commercials between 1989 and 2002. But without Thomas, Wendy's ad campaigns have been lackluster at best, especially compared to McDonald's and Burger King's (BKC) contemporaneous ads. Yet another campaign fizzled in January when Wendy's replaced "That's Right," which had failed to boost sales, with "Waaaay Better Than Fast Food."

"The company almost had to decide what they wanted to be from scratch," said UBS analyst David Palmer. "They seem to be switching from campaign to campaign."

China Now The World' Largest Internet Population

PC World just reported that China with 221 million users now beats US with 216 million users as the world's largest internet population. Here are the details:

The Ministry of Information Industry (MII) cited statistics from the China Internet Network Information Centre (CNNIC), a quasi-government organization that reports to the MII. China reached the magic mark at the end of February, English-language newspaper China Daily reported. In March, Beijing-based telecommunications consultancy and research firm BDA China reported that China had overtaken the U.S. in total Internet users.

With its large population, China made reaching the world's top mark look easy. China currently has only 16 percent Internet penetration -- below the world average of 19.1 percent, and well below the approximately 50 percent penetration in the U.S.

CNNIC normally releases Internet population statistics for the previous six months in January and July each year. U.S. Internet measurement firm Nielsen/Netratings estimated the American Internet population at 216 million at the end of 2007.

China began allowing consumer dial-up Internet access in 1995. In August 1996, it began filtering and blocking Internet sites it found objectionable, including pornography, foreign news sites and sites relating to sensitive political issues such as Taiwan and Tibet independence movements. The practice which continues today, although China has promised full and unrestricted Internet access during the 2008 Olympic Games in Beijing in August.

Internet usage in the country grew 53 percent from the end of 2006 until the end of the 2007, when it had 210 million users, according to the January 2008 CNNIC survey. Forty percent of new users came from rural areas, a new area of growth despite China's Internet population still coming largely from major cities like Beijing and Shanghai. CNNIC defines a user as anyone who uses the Internet at least once per month for any function.

The January survey also revealed that for the first time, the number one use of the Internet in China was online music, the application of choice for 86.6 percent of users. E-mail placed only fifth, with 56.5 percent of users. They seem to be communicating via instant messaging instead, an application used by 81 percent of users.

On its way to the top slot, China has produced some of its own Internet brands. Alibaba.com, of which embattled Yahoo owns 40 percent, became one of Asia's largest Internet companies following its initial public offering in Hong Kong in November raised US$1.5 billion. In three years, its Taobao consumer auction site overtook eBay's Chinese site, eBay Eachnet, and forced the U.S. auction giant out of the market and into a minority joint venture with Tom Online. Alibaba also operates Yahoo's China site. Baidu has dominated the local search market, soaking up over 60 percent of all Chinese search queries and pounding Google in the process.

The U.S. should be safe in the number two position for a few years: third-place India had only 60 million users as of September 2007, according to the International Telecommunication Union.

The World's Number 1 Brand Goes To Google. Big Surprise... Not!

Companies in the industry of technology are growing ever more powerful and do not seem daunted by the mounting pressures of the stock market. Do you know why? Let me tell you a little secret... it's because the prevalence of the online world is just beyond the normal boundaries of trading and consumer goods. Online services are not normally real products but knowledge sharing that is not affected by the rising prices of crude oil! Well not directly anyway... but you get my point.

Technology companies, including Google, Microsoft and Apple, accounted for 28 of the top 100 brands in Millward Brown's survey. They represented a combined brand value of $US187.5 billion.

Anyway Google tops the list of Millward Brown's survey. According to Sydney's Morning Herald, the search engine's marque is worth more than $86.1 billion ($94 billion), up 30% on last year, according to the Brandz list from Millward Brown Optimor published yesterday, which calculates the proportion of sales driven by brand.

The top five is unchanged from 2007, with Google followed by General Electric, Microsoft, Coca Cola and China Mobile. Wal-Mart, Citi and Toyota dropped down the rankings.

Salesforce Plus Google Apps Available As An Integrated Product On Monday! Microsoft Watch Out!

On Monday, the Google and Salesforce will announce that they have integrated Salesforce’s customer relationship management software and Google’s suite of office productivity applications, which includes e-mail, word processing and spreadsheets programs, into a single software package. Like most of the software the two companies create, the package will not require a download or installation, but rather will be delivered as a service over the Web according to NY Times

The offering will compete with Microsoft’s customer relationship management software, which is integrated with the its Office suite. The alliance could help Google, whose productivity programs are used largely by individuals, make inroads into businesses, where it is seeking to challenge Microsoft’s multibillion-dollar Office franchise.

Already customers of Google’s and Salesforce’s programs can use them side by side. But Dave Girouard, Google’s vice president and general manager, said the integrated offering would bring users new functions.

For example, users would able to keep track of e-mail sent to a customer right on that customer’s sales record, and a group of people collaborating on a sales account would be able to communicate by instant message with one another, he said.

“In the history of hosted software to date, applications could be like islands,” Mr. Girouard said. “They don’t really work together seamlessly. This is a first of its kind.”

Microsoft, which dominates the productivity software market but is a smaller player in customer relationship management software, or C.R.M., brushed aside concerns about competition from the Google-Salesforce alliance.

“Salesforce has belatedly recognized that it is important to link C.R.M. apps to productivity tools,” said Brad Wilson, general manager for Microsoft’s C.R.M. unit. “It has been core to our product since we launched five years ago. It validates our strategy.”

Google and Salesforce, two of the most important proponents of the idea of delivering software as a service over the Web, have grown increasingly close over the last several months. “The enemy of my enemy is my friend, so that makes Google my best friend,” said Marc Benioff, chief executive of Salesforce.com.

When Google introduced its package of productivity applications in February 2007, Salesforce was one of the few large companies committed to using the software. In June, the two companies began integrating Google’s AdWords advertising technology into Salesforce, and in November, Salesforce joined OpenSocial, an alliance of companies then led by Google that was establishing standards for creating applications for social networks.

Salesforce for Google Apps, as the integrated product is called, will be available to Salesforce customers at no additional cost starting Monday.

Microsoft Has No Problem If Privacy Online Is Regulated?

The CNET News blog posted that Microsoft on Thursday issued its response to proposed Federal Trade Commission guidelines for online ad industry self-regulation, but the company wouldn't necessarily oppose regulation, a Microsoft representative said.

"Two years ago we were one of a handful of companies calling for a comprehensive federal privacy bill," Frank Torres, director of consumer affairs for Microsoft, said in an interview.

Microsoft also has been talking to the sponsors of bills in New York and Connecticut that deal with online advertising, he said. "We're definitely not opposed to them."

The article went on to say that in the meantime, Microsoft's proposal recommends that consumers be able to opt out of behavioral targeting and that targeting based on sensitive data, such as health conditions, sexual orientation or religious beliefs, should be opt in.

The Network Advertising Initiative trade group for online ad networks also released guidelines this week that would exclude sensitive information and children under 13 from ad targeting. The Center for Digital Democracy and the U.S. Public Interest Research Group support a separate FTC rulemaking for each of the following sensitive data issue areas: children, teens, health and medical, and financial. And the Institute for Public Representation at Georgetown University Law Center says data from anyone aged 17 and under should be considered sensitive data.

Microsoft also says the companies that keep records of page views or collect other information about consumers for the purpose of delivering ads--including Web search data--should post a privacy policy on the home page, keep the data secure, and retain the data for only as long as needed or as required by law.

That would apply to search engines like Google, Yahoo, and Microsoft, and not just companies that do behavioral targeting. In the FTC proposals, search data is not covered.

"Our view is that the FTC should broaden the scope of the principles to include" contextual advertising, Torres said.

Later on Friday, Yahoo weighed in on the FTC proposals, saying that industry self-regulation is preferable to regulation and legislation because they would reduce the flexibility advertisers and others now enjoy. Yahoo also pledged to not target children under 13 or target based on sensitive information and allows consumers to opt out of targeted ads. The company also said it would soon begin a public education campaign on its network about targeted advertising.

Meanwhile, the Online Publishers Association (OPA) said on Thursday that the FTC should exclude anonymous behavioral information in its guidelines on targeted advertising and focus on personally identifiable information only.

"Behavioral information derived from the use of anonymous tracking technology is necessary to facilitate many services unrelated to advertising, to create desirable (and, in many cases, free) content, and to design and refine products and services that provide consumers with the best possible online experience," OPA said in a statement. "None of these beneficial uses of anonymous behavioral data raises privacy concerns."

The FTC principles, unveiled in December, say sites should give consumers the ability to choose whether to have their information collected for behaviorally targeted advertising, and if ads are based on sensitive information, consumers should be asked for permission to be targeted.

The Interactive Advertising Bureau weighed in with its proposed guidelines earlier this year which support an opt-out system for consumers who don't want their information collected for advertising purposes.

The Electronic Privacy Information Center (EPIC) says self-regulation won't protect consumers the way that legislation would.

"It's time to move beyond the self-regulatory approach, particularly in light of the growing problems of identity theft and security breaches in the United States," says Marc Rotenberg, executive director of EPIC. "The FTC should push for laws and techniques that minimize or eliminate the collection of personally identifiable information."

Image care of Pycomail

Microsoft's Threat To Yahoo: Take Our Offer Or Else!

CTV.ca just published that Microsoft has set the clock ticking for Yahoo to accept its $41 billion buyout offer in a letter to the Internet pioneer's board Saturday, warning that if a deal wasn't reached by April 26 the software maker would launch a hostile takeover at a less attractive price.

"If we have not concluded an agreement within the next three weeks, we will be compelled to take our case directly to your shareholders, including the initiation of a proxy contest to elect an alternative slate of directors for the Yahoo board," wrote Microsoft Chief Executive Steve Ballmer.



"If we are forced to take an offer directly to your shareholders, that action will have an undesirable impact on the value of your company from our perspective which will be reflected in the terms of our proposal," he wrote.

A Yahoo spokeswoman declined to comment Saturday.

In the letter, Ballmer said Yahoo's search share and page views, two measures of the strength of the Web portal company's business, appear to have fallen since the offer was made at the end of January. At the time, Microsoft's cash-and-stock offer was valued at $44.6 billion, or 62 percent above Yahoo's market value. Judging by Friday's closing share prices, the deal is now worth just under $41 billion.

Yahoo's board formally rejected Microsoft Corp.'s bid in February, saying it undervalues the company.

Since then, the Silicon Valley company has explored alliances with Google Inc., News Corp.'s MySpace.com and Time Warner Inc.'s AOL, but no alternative to Microsoft's offer has surfaced.

Ballmer acknowledged the alternative negotiations and questioned why, in the absence of another offer, Yahoo was still dragging its heels.

"This is despite the fact that our proposal is the only alternative put forward that offers your shareholders full and fair value for their shares," Ballmer wrote in the letter. Ballmer said the Microsoft offer has grown stronger as the economic climate has weakened.

"We believe that the majority of your shareholders share this assessment," despite a forecast recently released by Yahoo that calls for the company's revenue to rise more than 70 percent during the next three years, he wrote.

Microsoft has said from the start that it would consider all possible ways of getting the deal done, including taking its offer directly to Yahoo's shareholders, as well as working to elect its own candidates to fill Yahoo's board at the company's annual annual shareholder meeting, and thus the deadline for Microsoft to nominate its slate.

Yahoo has not set a new date for the meeting. Before Saturday, it was known that Microsoft had hired a proxy solicitation firm to help with a hostile bid, but the software maker had made no pronouncements as to when that might happen.

How The Government Can Interfere With Company Mergers - The MicroHoo Example

Governments are taking active roles in the world of commerce. As mergers and economic situations occur left and right, the governments of the world feel the need to control and/ or at least review these major changes and how it might effect the economy as a whole. The New York Times article below accounts the possibility of Chinese law impeding on Microsoft's attempt to take over Yahoo. Read on...

Microsoft’s hostile-takeover attempt against Yahoo may encounter an unexpected hurdle in August after a Chinese antimonopoly law takes effect that will extend the nation’s economic influence far beyond its borders.

The law, which goes into effect on Aug. 1, is intended to strengthen an existing set of antitrust regulations the Chinese originally established in 1993. It will make China a third sphere of regulatory influence, matching the power of the European Union and the United States, according to legal specialists in this country and in China who have studied it.

Formally enacted by the National People’s Congress last year, the measure gives Chinese regulators authority to examine foreign mergers when they involve acquisitions of Chinese companies or foreign businesses investing in Chinese companies’ operations. Beijing could also consider national security issues, according to a report by the official news agency Xinhua.

The law could give China influence in Microsoft’s courtship of Yahoo because in August 2005, Yahoo, a premier search portal, invested $1 billion in Alibaba.com, China’s largest e-commerce business. The investment gave Yahoo about a 40 percent stake in the Chinese company. Alibaba officials have said they believe that a Microsoft takeover of Yahoo would set in motion a buyback provision, making it possible for them to gain independence from Microsoft.

Nathan G. Bush, an antitrust law specialist with O’Melveny & Myers in Beijing, said the law represented the ascendance of China “as another regulatory capital contending for influence with Brussels and Washington.”

“Multinational corporations will need to develop strategies for all the markets they operate in,” he added, “and China is a big market.”

Whether China would seek to review a Microsoft acquisition, and what kind of posture it might take, would be closely watched by regulators and global companies as an indication whether it will play a conciliatory or a nationalistic role on the world stage.

“I don’t think anyone has worked through the issue of where an Internet merger should be reviewed, given that it truly is a World Wide Web,” said Andrew I. Gavil, a law professor at Howard University.

There are potentially dozens of jurisdictions that could claim oversight in such a deal because of the global business interests of the two huge companies and because it could potentially transform the Internet into two megaportals, Google and Microsoft. Other parts of the world that might have an active interest in the outcome of a merger include South Korea, a vibrant Internet economy where an antitrust investigation into Microsoft was previously opened.

Executives at Microsoft and Yahoo declined to comment on the possible effect of the new Chinese law. In rejecting Microsoft’s takeover bid in January, Yahoo’s chief executive, Jerry Yang, said in a letter to employees that the offer substantially undervalued the company, in part because of the significant growth potential of the Alibaba business in China.

The issue of whether the Beijing authorities will harmonize the law with foreign antitrust laws or use it to fire a shot across the bow of global businesses was sharpened last week after an effort by Huawei Technologies to invest in 3Com collapsed in the face of national security concerns in Washington.

The Committee on Foreign Investment in the United States had examined the purchase, through which Huawei would have gained a stake in 3Com. The American company’s Tipping Point subsidiary makes Internet intrusion-detection software, a technology that the United States maintains has national security implications.

Before the attempted investment fell apart, senior Chinese officials were quoted as saying they thought that the deal did not have national security implications, and that American regulatory efforts were a cover for protectionist trade practices.

National security has played a role in other attempted deals involving Chinese companies. In 2005, the Chinese National Offshore Oil Corporation made a high bid to acquire Unocal, leading to a vote in the House of Representatives to block the deal. Soon afterward, the Chinese company, known as Cnooc, withdrew its bid and Unocal was acquired by Chevron.

In the case of the proposed Microsoft-Yahoo transaction, the Chinese have in recent years become more and more alert to the role the Internet plays in their economic and political affairs.

Last week, a vice minister in the State Council Information Office, which oversees the Internet, said there were 230 million Chinese users of the Internet. He said the Internet sector accounted for 7 percent of the country’s gross domestic product, and he expected that to rise to 15 percent in three to four years, according to a Reuters report.

The official, Cai Mingzhao, warned that foreigners should not use the Internet to interfere in Chinese internal matters, according to a report in The Guardian.

Even if the Chinese government did not try to prevent a takeover by Microsoft, a prolonged review could substantially damage the value of the business, a number of Internet industry executives said.

Want To Start Your Own Business? Why Not Start Online?

From the article, Start a Web business in an extra few minutes By Anupreeta Das taken from Reuters. The sample highlighted here is Zlio.com where you can make your own store and this is their story.


When David Pangelinan isn't logging 14-hour days driving a fuel tanker, he's at his computer indulging his latest hobby: building a succession of online stores in minutes.

Pangelinan has built four online stores offering hundreds of products for sale, from Bulova watches to Betty Boop pillows, using the Web site Zlio.com.

"It was real easy," said Pangelinan, 43, who lives in Columbus, Georgia.

Pangelinan said he's still learning the finer points of e-commerce, and spends time browsing through thousands of products on Zlio.com's catalogue that he could sell.

"I just went in there and started jotting down the products that were interesting and caught my eye," said Pangelinan, who spends six to 10 hours a week tending to his shops.

Zlio.com, which launched in France in 2006 and in January in the United States, allows people to form online stores for free. Users can choose a name, address and template for the store they want to create and then begin displaying wares, say an iPod or a T-shirt.

It's a simple tool, with none of the typical hassle of designing a site, setting up a payment gateway and keeping stock of merchandise and shipping.

Once signed up, a new shopkeeper can choose from more than 3 million products offered by 120 merchants, including Barnes & Noble Inc, Zappos, Gap Inc and Apple Inc. They can then invite friends and relatives to shop.

"It's the Tupperware party concept gone online," said Zlio.com founder and Chief Executive Jeremie Berrebi. "But people are defining the concept of the shop."

Berrebi, an Internet journalist-turned-entrepreneur, said he meshed the idea of a Tupperware party with social recommendation features in which users turn to friends for shopping suggestions to create Zlio.

The notion of helping people create online stores is nearly as old as the commercial Web itself. Major e-commerce players eBay Inc and Amazon.com Inc have helped Web entrepreneurs set up hundreds of thousands of independent online stores.

Sites such as CafePress.com have been around since 1999, allowing Web users to create stores to sell personalized accessories like coffee mugs. Zlio offers a far wider range of goods for sale and takes more of a social networking approach.

Zlio also provides some marketing help. They can put a widget on their Facebook or other social networking page, or use Google Inc's AdSense software to direct traffic to their sites.

So far, people have created more than 250,000 stores, many organized around themes. One was devoted to all things red, another sold only hot sauce, a third focuses on The Beatles.

John Holsen, who runs a small publishing business in Kansas City, Missouri, recently started a shop with his wife, a yoga teacher, to sell yoga gear.

"It started as an experiment to see if I could build an e-commerce site in five minutes," Holsen said. "And you can."

He said his site gets up to 5,000 hits a month and makes about $300-$400 on monthly revenue of $3,000. "You won't get wealthy off of it, but if you built enough sites, you can probably make a decent income," he said.

On average, shopkeepers make about $300 a month, but top sellers can make as much as $3,000, Zlio spokeswoman Rachel Bremer said.

Merchants share the revenue with Zlio and the seller based on the number of clicks and sales. Shopkeepers display wares and can earn up to 10 percent commission through eBay's PayPal online payment service, either on every sale or on every click generated. They don't have to worry about shipping orders because the companies take care of it.

Last year, Zlio generated $12 million in sales for the companies with which it has tie-ups, Berrebi said. He refused to disclose how much money the site makes. He also has seen some business interest in the site. Mangrove Capital, which was an early investor in eBay's popular Skype Internet phone service, is backing Zlio, too.

As for the name Zlio itself, Berrebi said it doesn't mean anything. "It's just a four-letter word."

From Reuters via Yahoo News

Google Has The Business Model To Beat -- Sucking The Life Out of Competitors And Old Meda

Henry Blodget, a Wall Street analyst during the dot-com heyday who now runs Silicon Alley Insider, published a report Friday that examines Google's advertising growth in 2007 against those of 17 online and traditional media rivals, including Yahoo, Microsoft, Time Warner, Disney, Viacom, CBS, and Clear Channel.

From the story:

"The year-over-year growth of revenue (in 2007) on Google.com (U.S.)--approximately $2 billion--was more than twice as much the growth of ad revenue in all of the offline media companies in this sample combined. This is such an amazing fact that it bears repeating: A single media property, Google.com (US), grew by $2 billion. All the offline media properties owned by the 13 offline media companies above, meanwhile--all of them--grew by about $1 billion."

Here are the statistics on Google's growth

• Total US ad revenue across all 17 companies grew 9% from 2006 to 2007, from $53 billion to $58 billion

• Online ad revenue grew 28%, from $14 billion to $18 billion.

• Offline grew only 3%, from $39.5 billion to 40.6 billion. This was helped significantly by the inclusion of affiliate fees and (and global revenue) at CBS, Viacom, and News Corp.

• Online ad revenue grew by $4 billion.

• Offline ad revenue--in all other media--grew by $1 billion.

So advertising revenue is flowing online at a frantic rate. That's the whole story? No. Let's look at how that online revenue breaks down.

• Online ad revenue grew 28%, or $4 billion.

• Online ad revenue at Google grew 44%, or $2.7 billion.

• Online ad revenue at Yahoo, Microsoft, and AOL grew only 15%, or $1.3 billion.

• Google captured 2X as much revenue as its closest three competitors combined.

The confirms it, Google has got the business model to beat at this point. Because right now Google is sucking the life out of old media and greatly shifting ad spend towards its direction.

Bebo Goes To AOL For $850 Million - What Now?

AOL will pay $850 million to acquire global social networking site Bebo.com in an all-cash deal announced Thursday through an article from CNN Money.

With 40 million members, Bebo's audience lags Facebook and MySpace in the United States, but it vies for the top spot in the United Kingdom and has a fast-growing global audience.

"Bebo is the perfect complement to AOL's personal communications network and puts us in a leading position in social media," said AOL chief executive Randy Falco.

AOL hopes to leverage its advertising sales business across Bebo's network. Time Warner owns AOL and Fortune.

Bebo will be the cornerstone to AOL's social media strategy. When integrated with instant messaging services ICQ and AIM, it is expected to reach 80 million members.

Started in 2005 by San Francisco programmers Michael and Xochi Birch, the company has approximately 100 employees.

Bebo's site looks a lot like MySpace with a cleaner interface. It has been a pioneer in combining professionally produced entertainment and user-generated content with programs like KateModern.

The show's title character, Kate Modern (whose name is a play on the famous British museum, the Tate Modern), is a waifish art student trying to make it in London. She and her friends record and post short video diaries and chat with viewers. Her popularity is one reason why Bebo's 40 million members spend an average 33 minutes on the site. Another reason is that with the launch of its open media platform in the fall, Bebo plays host to content from old media companies like CBS Beand MTV.

The deal comes just one week after AOL launched Open AIM 2.0, which allows developers greater freedom to develop for the AIM network and integrate AIM into its sites and applications.

Bebo has a number of pre-existing deals with AOL competitors. In September the site announced a partnership with Yahoo to sell the site's display ads in Britain and Ireland and to integrate Yahoo! Answers with Bebo's site. That followed a Microsoft partnership that let members IM with anyone - Bebo friend or not - on Windows Live Messenger. Shields declined to comment on what will happen to those deals.

There is much debate over how to monetize social media. Relying on advertising has thus far proven disappointing. In a March 9 interview at SXSW, Facebook ceo Mark Zuckerberg said his company, which is valued at $15 billion, was close to breaking even - another way of saying that it is not yet profitable. And Google's $900 million ad deal with MySpace isn't generating the return the company expected.

Instead, companies are looking to profit off of the applications that live atop those platforms. "We used to look at social network sites like we would any ad-supported sites, like the NYTimes," said Google's president of advertising Tim Armstrong at a Bear Sterns media conference on March 10. "Now we think differently. We look at social networks as a platform and see an opportunity to monetize widgets and social network applications."

In a best case scenario, Bebo will now be able to leverage the behavioral targeting capabilities from AOL's Platform A to better target certain demographics, and it will be able to scale to reach a larger audience with AIM. But AOL has not proven itself able to integrate acquisitions well so far. It has been on an acquisitions tear, putting down more than a billion dollars in the last few years for online advertising companies Advertising.com and Tacoda. But its unclear how well these properties work together, and recently the company lost Tacoda founder Dave Morgan and let go Platform A President Curt Viebranz.

Even Facebook's CEO Mark Zuckerberg Needs Help When It Comes To Growth Online

As this Wall Street Journal article suggests, even multi-million dollar Facebook needs help every now and then. Read on to learn Facebook's struggle for growth online.

Mark Zuckerberg, Facebook Inc.'s 23-year-old chief executive, is finding that he and his company have to grow up at Internet speed. The latest sign: He has poached a top Google Inc. executive, Sheryl Sandberg, to help expand his social-networking company.

Sheryl Sandberg

Ms. Sandberg, a six-year Google veteran who has been the search giant's vice president of global online sales and operations, will become Facebook's chief operating officer. In that role, the 38-year-old executive will try to help expand the privately held company's operations, revenue and international reach. She will also lead sales, business development, public policy and communication. Ms. Sandberg will report directly to Mr. Zuckerberg, who has been searching for a second-in-command for several months.

Ms. Sandberg's appointment comes as Mr. Zuckerberg is trying to adjust to being head of a company that is quickly outgrowing its position as one of Silicon Valley's hottest startups while preparing himself to be able to lead it to Google-like international heft. Based in Palo Alto, Calif., Facebook is a social-networking site that allows users to create personal Web pages and communicate with one another.

It has grown fast in the four years since Mr. Zuckerberg founded it. Sales reached $150 million in 2007, but the company's operations are concentrated in the U.S., and it is still burning up more cash than it is generating in revenue, according to a person familiar with the company's finances. Facebook declines to comment on its performance.

In early December, the CEO had a conversation with one of his mentors, Silicon Valley investor Roger McNamee, in which he admitted he was having a tough time with some new pressures he was facing as chief. "Is being a CEO always this hard?" he asked, according to Mr. McNamee, a managing director at private-equity firm Elevation Partners who has a personal stake in Facebook.

In an interview, Mr. Zuckerberg says he doesn't recall the specific conversation with Mr. McNamee, but acknowledges the CEO job "is hard -- I do sometimes whine to Roger about it."

Weeks prior, Mr. Zuckerberg had faced protests from users and privacy groups after launching a new advertising program. One element of the program tracked users' activities on Web sites outside of Facebook and shared those activities with their friends. Some Facebook members complained that this violated their privacy, and one local blog dubbed Mr. Zuckerberg "the Grinch." Around the same time, personal information about Mr. Zuckerberg, including material from his Harvard University application, was posted on a Web site for Harvard alumni.

Facebook's advertising initiative was a turning point in the public's perception of Facebook and its young CEO, who had enjoyed years as a Silicon Valley darling and was now the brunt of a backlash.

A Self-Assured CEO

After founding Facebook as a college student four years ago, Mr. Zuckerberg saw almost instant success. Millions of users flocked to his Web site and top Silicon Valley investors rushed to fund it. Mr. Zuckerberg also become known as a self-assured, even arrogant, CEO. Some of his early business cards read, "I'm CEO ... b -- ." (A Facebook spokeswoman says the cards were meant as a joke.) In a speech in March 2007, he said: "Young people are just smarter."

Mr. Zuckerberg is now finding that young people aren't enough. Like other technology startups, the key skills for Facebook employees in the early days were technology know-how and product development. To keep growing, the company needs to tap people with more traditional skills, including the ability to woo advertisers, manage a big staff and handle public relations.

"I coded the original site and managed the engineering teams," Mr. Zuckerberg says in an interview, adding that his next task is to "work on bringing really talented people into the company to help it scale." Mr. Zuckerberg declined to comment on his personal style or his reputation as a CEO.

Mr. Zuckerberg's experience is emblematic of Silicon Valley's accelerated culture, where startups change more in a few years than most companies do in decades -- forcing CEO-founders to adapt quickly in order to survive in their roles. The founders of Google, Yahoo Inc. and eBay Inc. all handed the reins to outsider CEOs within three years of founding their companies.

To season himself, Mr. Zuckerberg in recent years has reached out to high-profile mentors like Mr. McNamee and Don Graham, CEO of the Washington Post Co. Last year, Facebook brought in trainers including Bill Clinton's former speaking coach to help the CEO improve his speaking style.

Ms. Sandberg joins a roster of recent Facebook hires that includes Chief Financial Officer Gideon Yu, formerly CFO at YouTube, and Vice President of Product Marketing and Operations Chamath Palihapitiya, a former head of AOL's instant-messaging business. Mr. Zuckerberg is also seeking to hire a new general counsel and a vice president of communications and public policy, says Facebook spokeswoman Brandee Barker.

Part of the Struggle

Part of the struggle for quickly maturing startups is that founders don't want to lose their stamp on the company -- something they fear may happen if they hand the reins to a hired CEO. Mr. Zuckerberg says he is trying to build Facebook on his own terms, and indicated recently that he doesn't want another No. 1 in the company. Owen Van Natta, chief revenue officer who previously held the role of Facebook COO, last month said he was leaving the company. The departure was related to Mr. Van Natta's ambitions to be CEO of a company, a title Mr. Zuckerberg isn't willing to relinquish, both men say.

In Ms. Sandberg, whose appointment was confirmed yesterday, Mr. Zuckerberg is seeking an experienced hand who can also enable him to hold on to the reins. "It's going to be very valuable for me to have a partner [to help] me to think about how to do operations, especially as the organization grows very large and as we scale internationally," says Mr. Zuckerberg.

Mr. Zuckerberg built an early Internet venture in October 2003, during his sophomore year at Harvard. He acknowledged hacking into the school's online student directory and accessing students' photos, according to an article published at the time in the Harvard Crimson, the school newspaper. Then he put up a Web site that invited visitors to judge students' attractiveness based on those photos. He was harshly criticized by fellow students for the project and quickly closed it down. Ms. Barker declined to comment on the incident.

His next project was Facebook, which let people create online "profiles," or personal Web pages, through which users could interact with one another. In 2004, he left Harvard and moved to Palo Alto with a few friends. Once in Silicon Valley, he raised funding to expand the Web site, which at first only college students could access.

For a while, he kept up his college lifestyle. Early on, he and his friends worked out of a rented house in Palo Alto, which they allegedly left "in total disarray," with barbecue ashes and broken glass spread on the deck, according to court documents posted on the Web site of "02138," a magazine for Harvard alumni. The documents relate to a lawsuit filed in U.S. district court in Boston in which some former Harvard classmates have alleged that Mr. Zuckerberg stole the idea for a social-networking site from them. Through his spokeswoman, Mr. Zuckerberg declined to comment on the documents or the lawsuit.

When the company moved to an office in downtown Palo Alto, he wore Adidas flip-flops to work and often arrived in late morning and worked until the middle of the night, say people who worked for him at the time. Mr. Zuckerberg has been described by colleagues as shy -- sometimes so uncomfortable socially that he comes across as stiff.

Others describe Mr. Zuckerberg as a quietly thoughtful executive willing to learn from others. "A lot of times, when people meet with Mark for the first time, he's really quiet, and people assume he's not engaged or paying attention," says Matt Cohler, vice president of product management for Facebook. "Actually, he's really engaged and he's trying to listen."

In September 2006, Mr. Zuckerberg's profile grew when Facebook began letting in anyone with an email address, not just students. Around that time, Facebook added a feature called the "news feed" that made it easier for people to track friends' activities on the site. When thousands complained that it violated their privacy, Mr. Zuckerberg upset some further with a blog post telling them to "Calm down. Breathe. We hear you." Later, Facebook changed its privacy settings to make it easier for users to manage how their information is shared.

In May 2007, Mr. Zuckerberg wore his flip-flops onstage at a San Francisco event, where he announced he would let other companies offer services such as games within the Facebook site. Mr. Zuckerberg's investors began urging him to focus on finding a way to turn Facebook's popularity into revenue, say people familiar with the matter.

Mr. Zuckerberg sought seasoned help. He brought on Messrs. Yu and Palihapitiya. Michael Sheehan, a communications coach who has advised Mr. Clinton, came in to teach the CEO how to improve his wooden image, in part by coaching him in public speaking.

He asked friends like the entrepreneur Marc Andreessen, who founded Web-browser company Netscape when he was 22 years old, for advice in keeping Facebook's fast-paced, communicative culture intact as Facebook grew, says a person familiar with the matter. Ms. Barker said Messrs. Zuckerberg and Andreessen discuss business regularly but declined to comment on their conversations. Mr. Zuckerberg also turned to Mr. McNamee. He says he encouraged Mr. Zuckerberg not to sell Facebook or give up his CEO role.

All the while, Facebook kept growing. Last year, Microsoft Corp. invested $240 million in the company, valuing the startup at $15 billion. That gives Mr. Zuckerberg a net worth on paper of at least $3 billion. According to comScore Inc., a Web tracking firm, Facebook had 101 million visitors in January, up from 25 million in January 2007. Facebook's social-networking rivals include MySpace, owned by News Corp., which also owns The Wall Street Journal.

Last summer, Facebook began working on a project that involved attaching ads to messages about a user's activities on the site. These ads would then be seen by the user's friends. The company also designed a feature called Beacon that took this idea a step further: It tracked people's activities on sites outside of Facebook. If someone made a purchase on Overstock.com, for example, Facebook would notify the user's friends through a message, sometimes without explicit permission. Vendors partner with Facebook to participate in the service, and Facebook can make money by displaying tailored ads from the vendors on users' profiles.

At an event in New York in November for top advertisers, Mr. Zuckerberg unveiled the ad program, including the Beacon feature. Efe Cakarel, who runs a service within Facebook that lets users watch independent movies, was with Mr. Zuckerberg and recalls suggesting that advertisers might worry that attaching ads in this way could turn off users. He says Mr. Zuckerberg shrugged off the concern, saying, "They'll like it when they see how well it works." Through a spokeswoman, Mr. Zuckerberg says he doesn't remember the conversation but that it could have happened.

Privacy Complaints

Instead, people complained that Beacon was a privacy invasion. The watchdog group MoveOn.org Civic Action started a petition against Beacon, and companies including online retailer Overstock.com Inc. pulled out of the program or raised concerns about it.

That's when Mr. Zuckerberg complained to Mr. McNamee, asking whether the CEO job was "always this hard." Mr. McNamee recalls answering, "Only if you're successful. And if you're successful, it's really hard, but it's also worth it."

Mr. Zuckerberg deliberated for hours over a public apology letter about Beacon, says a person familiar with the matter. "We simply did a bad job with this release, and I apologize for it," he finally posted on Facebook's blog. He also began requiring users' permission to share their details via Beacon.

Mr. Zuckerberg says he also spoke with Mr. McNamee in December about how to structure his management team. That "led me to consider bringing in someone like Sheryl," he says, "starting a few other executive searches and making some other changes on the team."

Mounting Pressure

Ms. Sandberg had joined Google in 2001 when it had fewer than 300 employees. She helped build it into a global company and run its cash-cow AdWords and AdSense programs. Her unit, which has thousands of staff, now handles sales for about 99% of Google's advertisers.

Late last year, Mr. Zuckerberg met Ms. Sandberg at a holiday party. In January, Ms. Sandberg asked Mr. McNamee for career advice about another job opportunity she was weighing, and he suggested she talk to Facebook before making any moves. Mr. Zuckerberg then met again with Ms. Sandberg over dinner and elsewhere before clinching the hire.

Mr. Zuckerberg and Ms. Sandberg will face mounting pressure to find a better business model. Facebook's Web traffic continues to rise. But industry watchers are now questioning whether that growth will ever translate into Google-size revenue.

According to a person familiar with the company's finances, Facebook hopes to double revenue to $300 million to $350 million this year, its fourth full year in business. Google had revenue of $440 million in its fourth year, a fivefold jump from the previous year.

Mr. Zuckerberg's growing fame has included some unexpected challenges. On a recent trip to Los Angeles, for example, paparazzi caught him leaving a restaurant with a woman and heckled him with suggestions that he was cheating on his longtime girlfriend. The video showed up on the gossip site TMZ.com, but it turned out that the woman was in fact Mr. Zuckerberg's girlfriend.