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.