MarketMe 2.0

Amazon and PayPal have long not been partners in commerce. Of course, the reason for this most oft stated is basic competition. As you might know, Amazon introduced last year its Amazon Payments shop-till-your-cell-phone-drops Apr-2-2008 system for use at Amazon.com and partner sites.

Still, the idea of broadening the Amazon Payments business greatly piques the interest of analysts. One more party to voice enthusiasm for a larger payment network to span a vast supply of Internet commerce Web sites is Derek Brown of financial services firm Cantor Fitzgerald. As quoted by Eric Savitz of Barrons, Brown seemed this week to increase the potency of that lingering flame, saying that an “Amazon Payments” system a la PayPal in its potentially extensive reach, is perhaps a very worthwhile avenue to venture down, due to its intimate and very refined knowledge of online retail in all its limits and possibilities. Brown argues Amazon had “long ago demonstrated that it understands (perhaps better than any company) the needs/wants of online retailers.”

PayPal is no doubt the reigning leader of payment transfer services born on the Web. Its reach is quite extraordinary, and it continues to reap the financial benefits in kind. So much so that its success drew Google into the fold in 2006 with its own competitor, dubbed Checkout, beginning with the US market. But while Google Checkout has made a name for itself, it has not achieved ubiquity as eBay’s property managed to do. This naturally leaves open a fairly great opportunity for Amazon. With its lasting mark made on the online retail market, Amazon is most certainly positioned to offer PayPal a significant challenge.

My sense is that exercising http://en.wikipedia.org/wiki/Physical_exercise its heft is in Amazon’s interest at this point in time. The company’s place atop the heap in online retail is definitely advantageous for the pursuit of an extension to its business, and, as with its Associates program, the world of third-party Web sites are the group best able to help Amazon make the most of its core assets - all while offering consumers another way to pay, as it were. The company doesn’t absolutely need to invest in the payment space to such a degree as is being speculated. But there’s little chance that it will encounter much difficulty in the way of user adoption if it so chooses to make the jump, discounting the fact that one marketplace will be a no-go for an ambitious Amazon Payments push. It’s name: eBay.

Mashable

Jacob: “All I have to say is, ‘goodridence, PayPal!’”

eBay has pulled the plug on Media Marketplace, a controversial pilot program designed to buy and sell radio and TV advertising on the Internet. The Internet auction house confirmed the closure of the program after one year with the brief message: “We have ended our pilot program in this market.”

The system got off to a rocky start, receiving little support from the cable network industry and none at all from the broadcast networks, according to a report in AdWeek. The Cabletelevision Advertising Bureau refused to endorse the system, and only a few of its members–notably Oxygen and Ion–participated in the system. Many complained the system commoditized television ad time.

Last October, eBay officials issued a statement saying, “We’ve been disappointed by the lack of broad engagement by cable networks. This has caused the initial testing to be slower than expected.”

While eBay has abandoned its efforts in selling cable TV ads spots, the company has been working with Bid4Spots on a separate service for selling radio ad time. A notice on the Media Marketplace page urges users to go to Bid4Spots.com for service.

CNET News

Media companies should see Google not as an enemy but as an ally that’s trying to make advertising work on the Internet, Chief Executive Eric Schmidt said Wednesday.

Google has a financial incentive to make sure advertising can support companies that supply high-quality content, Schmidt said during an on-stage interview here with Ken Auletta, The New Yorker’s media reporter. But Schmidt said there’s another dimension to Google’s motivation, too, one not often figuring prominently in business affairs.

“It’s a huge moral imperative to help here,” Schmidt said of publishers’ problems making advertising work on the Internet.

Google CEO Eric Schmidt speaks in San Francisco.

(Credit: Stephen Shankland/CNET News.com)

Happily for Google’s moral compass, the company’s effort to make money is pointed the same direction. The company is trying to solve the online ad problem in part with DoubleClick, the display-ad company Google bought earlier this year. Google’s cash cow is selling text advertisements that appear next to search results, but with DoubleClick, Google hopes to tackle the graphical ad side of the market.

DoubleClick will let advertisers tackle the market for both search and display ads with a unified interface, Schmidt said. “By combining DoubleClick with that (search-ad) architecture, we can provide a single platform for publishers that over time will begin to generate significant revenue for publishers,” Schmidt said.

Display ads are a business in flux on the Internet, though. A new study showed that growth slowed for display ads on the Web, hurt by a weakening economy. Revenue increased 8.5 percent annually to $2.9 billion in the first quarter of 2008; the year earlier, the growth rate was 16.7 percent, according to TNS Media.

Viacom has sued Google over copyrighted material on its YouTube site. But, Schmidt argued, media companies attack Google for helping to usher in the digital content era.

“There is a sea change from one model to another. Many of the criticisms I see seem to be merely about the change, and Google happens to be the messenger,” Schmidt said. “Those changes are going to occur independently.”

Google itself is a publisher, at least in one sense: it offers countless videos through YouTube service. So Google has more incentive than just its DoubleClick division to improve display advertising.

People are consuming more and more media on the Internet but paying less and less, Schmidt said. “That’s bad for Google. We are critically dependent on high-quality content,” he said.

A key part of making advertising work is making sure ads are targeted at people who are actually interested, Schmidt said. Searching for a subject on a Web site makes targeting easier, because a search engine can infer people’s interests through their search queries, but for display ads, it’s not so simple. As advertisers figure out how to target ads better, though, they’ll curtail spending on general ads, Schmidt predicted.

“Why does my TV show me ads I couldn’t possibly be interested in?” he asked, saying it’s a waste of advertisers’ money.

Schmidt insisted that profitability is only a useful tool that’s subordinate to Google’s true agenda.

Morality in the driver’s seat
Schmidt touched on the company’s principled agenda several times during the talk.

Ken Auletta of The New Yorker speaks with Google CEO Eric Schmidt.

(Credit: Stephen Shankland/CNET News.com)

For example, he said, “The goal of the company isn’t to monetize everything. The goal is to change the world.” Could you pin that down a little? Sure: “For the better,” he said.

In addition, he said Google’s “don’t be evil” motto is real, though often misunderstood.

“We don’t have an evil meter we can apply,” he said, but it is a real part of company discussions.

“I thought when I joined the company this was crap–companies don’t have these things. I thought it was a joke. It must be a Larry and Sergey thing,” Schmidt said, referring to Google co-founders Larry Page and Sergey Brin. “So I was sitting in a room six months in, and an engineer said, ‘That’s evil.’ It’s like a bomb goes off in the room. Everybody has a moral and ethical discussion that, by the way, stopped the product.”

In addition to trying to better the world, Google has other motivations that don’t necessarily rate highly on Wall Street’s priority list.

Criticism from Wall Street is “not the signal we respond to,” Schmidt said. “We respond to end-user satisfaction.”

But Google can afford to pay less attention to the quarterly earnings imperatives that often drive publicly traded companies, Schmidt added.

“We have enough leverage that we have the luxury of time,” Schmidt said. “Most businesses can’t invest for scale. They have to make money now. That short-term focus does make people sometimes make the wrong trade-off.”

At the same time, money still obviously matters: The company decided to move YouTube into a money-making phase. “In January or February we had a big meeting,” Schmidt said, at which he delivered the “Come on, guys” message, Schmidt said in remarks to reporters after the talk. YouTube has been a “huge success,” but monetization is now the priority

He didn’t elaborate on specific YouTube revenue plans, though. “We have a revenue plan, a usage plan, a scale plan, a bandwidth plan,” he said, but wouldn’t discuss any of the points besides saying YouTube “is now the majority of outbound bandwidth. We had to retool the network.”

CNET News

When Facebook Pages was released last year, it was aimed at attracting the attention of brand managers globally. With the opportunity to reach Facebook’s more than 70 million active users, Facebook Pages provided a simple solution for brands to reach out directly to their consumers. The way that brands can promote their pages is through the use of Facebook’s SocialAds. Additionally, the branded pages show up when searching through the site.

Facebook also recently launched the Facebook Pages Directory enabling users to browse through the most popular pages. Currently the most popular pages on Facebook include Barack Obama, the Chris Moyles Show, Apple, Victoria’s Secret PINK and The Stig. The most users on any page? Just under 1 million for Barack Obama.

Just last week there was a substantial amount of discussion surrounding Verizon moving their community from their branded social network over to Facebook. The reason provided by Verizon was that they want to “provide our users with the most dynamic and feature rich community experience.” This is a great move but it also raises some other issues.

Conflict of Interest
Currently there is a mini-industry built around the development of custom branded applications on Facebook and other social networks with Facebook being the central hub. As Facebook increases their application restrictions it has become more difficult for many of these applications to spread on their own. Instead brands have been forced to purchase install campaigns which drive users to the applications.

The competitor to install campaigns? Facebook’s SocialAds driving users to Facebook Pages. That means that Facebook is competing directly with some of the companies that are building businesses on their platform. While they have been in direct competition from the beginning, it is now in Facebook’s best interest to reduce the viral growth of applications and make Facebook Pages more attractive.

There are rumors circulating that Facebook will be updating their Pages offering in the near future to make them more attractive for businesses. This is going to end up forcing a lot of the custom development offerings out of the market since it will be easier to simply build a Facebook Page and run a SocialAds campaign.

Is it the New Ning?
Ning currently provides companies with their own customizable social networks. The only problem is that it is frequently difficult to attract returning users if there is not an extremely avid fan base. As such it is frequently better to integrate the networks into communities that already have active users such as Facebook. This is why Verizon decided to shift the location of their company’s branded network.

While Facebook Pages do not provide nearly as much functionality as Ning, they do help users express their branded affiliations, proudly promoting that they are fans of a brand directly from within their profiles. This may be all the branded interaction necessary from a marketing perspective. That’s what Facebook is banking on and as the restrictions on applications increase, Facebook is hoping that the trend toward branded Pages continues.

AllFacebook

The executive in charge of Microsoft Corp.’s search efforts acknowledged Tuesday that the company’s “Live” brand for search and online services leaves much to be desired.

Now that Microsoft has abandoned its $47.5 billion takeover bid for competitor Yahoo Inc., its marketing team is working on fixing Microsoft’s search image to make it more competitive with Google Inc., Kevin Johnson, president of Microsoft’s platforms and services division said at a search advertising conference in Seattle hosted by the parent company of news site SearchEngineLand.com.

Danny Sullivan, editor of SearchEngineLand, asked Johnson if he meant Microsoft wants to “change” its image in search instead of fix it.

“Fix means fix,” Johnson replied. “If that means change, we’ll change.”

Microsoft’s Live brand, which decorates a mishmash of sites and applications, has been the recurring butt of jokes made by industry analysts who have a hard enough time keeping the company’s unwieldy product names straight without it tacking on an extra “Live.”

Sullivan has suggested in past interviews with The Associated Press that Microsoft should revert to the MSN search brand, or switch to Microsoft Search.

Microsoft is working hard to convince investors, advertisers and Web surfers that it has a fallback plan for improving the quality of its search engine and boosting traffic without help from Yahoo.

So far, the company is focusing on searches that lead to some kind of transaction, which Johnson called “commercial intent queries.”

Last month, Microsoft launched a shopping search site that gives Web surfers a rebate on purchases from advertisers. It also relaunched Farecast, a Seattle-based travel search startup it acquired this year, as part of its network of sites.

During his talk Tuesday, Johnson mentioned real estate as another “commercial intent” search category and said Microsoft’s success in improving its search market position will be measured by whether it can raise its share of searches that lead to a purchase.