If at First You Don't Succeed... Google Introducing Another Social Network

If at first you don’t succeed, try again? At least that’s what Google believes. “Google making another attempt at social networking” by Jessica Guynn of LAtimes.com reports Google is going to introduce Google+, a social networking platform. This will be another Google venture in social media; their previous venture, Buzz, was gravely doomed as it automatically added Gmail contacts as friends and had privacy issues.  While previous CEO Eric Schmidt admits failure and disappointment trying to break into social networking, current CEO Larry Page is making it a priority.

Google is still one of the most significant successful parts of the Internet but their biggest threat is Facebook’s popularity. According to the article, “people are spending more time on Facebook, according to research firm ComScore. The average U.S. visitor spent 375 minutes on Facebook in May compared with 231 minutes for Google”.  Google+ is not only a way to compete with Facebook (although Google would not admit in the article they are trying to compete) but to maintain their place as the most popular spot online.

Microsoft Releases Office 365 to Compete w/ Google Apps

Today, Microsoft begins to sell Office 365. This Office is “a cloud-based version of Microsoft’s e-mail, whiteboard collaboration software and word processing, spreadsheet and presentation programs”. According to “Microsoft Takes to Cloud to Defend Its Office Business” by Steve Lohr of NYtimes.com, the emergence of this cloud service should be viewed as a direct response to Google Apps. Google Apps is a cloud, “web-based alternative” and many businesses are beginning to embrace it.

The article begins with comments from a company who switched from Microsoft to Google, leading into the main point that Google Apps is now a competitor to Microsoft. The article reports 30 million active users of Google Apps. Other major transitions mentioned: The National Oceanic and Atmospheric Administration, State of Wyoming, and the McClathy Group. The subscription renewal rate is about 90%.

To Recover Revenue Lost to eBooks Some Booksellers are Charging for Events

The bookstore industry has it rough; they’ve been hit by the success of eBooks and online booksellers and the state of the economy.  According to “Come Meet the Author, but Open Your Wallet” by Julie Bosman and Matt Richtel of NYTimes.com, one of the strategies to raise money is to charge admission to author events, which is unusual.  Typically, author events are free, with attendees having to already have purchased the book to speak to the author or get an item signed.  But to attend the event and hear the author speak is free.

According to some of the independent booksellers in the article, they are trying to prevent the bookstore from becoming a library. As Nancy Salmon from Kepler’s stated: “They type titles into their iPhones and go home… We know what they’re doing, and it has tested my patience”.  Some of the prices mentioned in the article range from $5 to $10 or the price of the author’s book.

While the strategy makes sense for booksellers, it conflicts with authors and their publishers. The purpose of an event is to reach the author’s audience, including those who choose to buy the eBook or from an online retailer. Neither author nor publisher cares from where the book is legally purchased. Pricing an author event could leave some fans left out and could interfere with the success of a book. Author Eleanor Henderson’s reaction to pricing events:

“I’m not sure that charging readers would be a) useful or b) friendly. While I understand the need for bookstores to make money, I don’t think they should discourage readers.”

Sprint Claims AT&T Could Expand w/o Merging w/ T-Mobile

AT&T and T-Mobile are currently in the process of defending their future merger to the government. As mentioned in a previous post, the merged company would become the largest cell carrier with about 42% of the market. This would leave Sprint third in market, thus they are not a supporter of the merger. One of the strategies to prevent the merger is Sprint has attacked one of the main reasons for the merger offering an alternative.  “Sprint offers AT&T spectrum solution without merger” by Jasmin Melvin of Reuters.com reports AT&T has defended the merger as a means to use T-Mobile’s spectrum to improve their speed and  performance.

Sprint claims “AT&T could forgo the T-Mobile takeover and increase its network capacity by more than 600 percent by 2015 by simply putting its current resources to better, more efficient use.” The point being that the proposed reason for the merger is invalid. The detailed claims about AT&T being able to help itself expand were presented to the FCC yesterday. Sprint is also claiming that AT&T investing in this improvement “would cost far less than the $39 billion AT&T would spend to take over T-Mobile”. The response from AT&T:

“A company that has outsourced the management of its own network shouldn’t be giving advice to others”

Is Best Buy a Trademark Bully?

It seems Best Buy believes they own the rights to the word “geek”. According to “Now That Everyone Wants to Be a Geek, Lawyers Have Been Called” by Miguel Bustillo of WSJ.com, Best Buy has sought legal actions against many businesses who use any aspect of the “geek squad” brand including the car, the colors, and/or the name. Best Buy inadvertently gave attention to their legal fiasco when they attempted to stop Newegg.com’s recent advertisement.

According to the article, Newegg’s current commercial takes a not-so-subtle shot at competitor Best Buy:

“The spot, which aired on cable television and the Web, shows a clueless blue-shirted store salesman stammering and shrugging when a customer asks him to explain the difference between two laptops. It then touts Newegg as a website where shoppers can read reviews from fellow customers who actually know what they are talking about, and flashes the slogan, 'Take it from a Geek'."

RIM Cuts Profit Expectations by 30% and Shares Drop 16%

Research In Motion, maker of BlackBerry, did not have a good Thursday. According to “RIM shares sink 16% on slashed outlook and layoff plans” by David Goldman of CNNmoney.com, the company stated the next BlackBerry operating system, BB7, would be delayed until August and  “the company drastically cut its full-year profit expectations by 30%”. As the title states, the market response to the news was a significant share drop.

The article reports the company’s first quarter sales missed expected forecasts and last quarter, the company sold “a disappointing 13.2 million devices last quarter, including a measly 500,000 PlayBook tablet”. The delay of BB7 is disappointing news as the company see it as the solution to its lower than expected sales. The BlackBerry Torch, the last RIM BlackBerry product, is almost a year old and the PlayBook hasn’t sold well. The new OS is expected to bring RIM "up-to-date".

J.C. Penney Hires Apple Exec as Its CEO

JcPenney Co Inc is hoping for a massive retail makeover. The architect of this makeover will be Ron Johnson, senior vice president of retail of Apple. In November he will be J.C. Penney’s new CEO, replacing Myron Ullman. According to “Penney Snags Apple Retail Executive as Next CEO” by Phil Wahba and Poornima Gupta of Reuters.com, the news was great for the stock – “Penney’s market value rose more than $1 billion on the announcement, with its shares adding $5.26, or 17.5 percent, to close at $35.37.”

J.C. Penney has been trying to get Johnson for some time. The largest shareholders of the company wanted to bring Johnson on as an executive years ago. The allure is that Johnson is really dedicated to retail and its consumer and previously worked at Target before working at Apple.  Under Johnson, “Apple opened its first retail outlet in May 2001” and, as most of you know, the Apple store is incredible. It has a great décor and is recognizable and significant to its overall brand.  A former Apple executive had this to say about Johnson:

“From day one, and ever since, I have never heard Ron refer to somebody coming into the store as anything other than a guest… When you hear him talk, you feel like you are talking to somebody who was running a Four Seasons hotel as opposed to somebody who was running retail.”

The article reports J.C. Penney’s goals are to integrate technology into the retail space, reach out to different demographics, and become known as a trendy “budget conscious” store.  Johnson’s appointment will hopefully remake and rebrand J.C. Penney and in the meantime Apple is looking for his replacement.

Pandora Makes no Profit but has Filed IPO

Pandora is a very popular online radio station and has been around for a while. The company does very well in terms of subscribers and has expanded their product across many mobile platforms. The problem is the company has made no profit.  According to “Pandora: The money-losing music machine” by Dan Mitchell of CNN Money/ Fortune.com, the company had lost of $6.8 million in the most recent quarter and $3 million the quarter before that. Despite the continual losses, Pandora has filed an IPO and might debut in the market tomorrow.

The reason Pandora cannot make profit is they lose money every time the product is used.  The article explains the problem as:

“The trouble is the music royalties Pandora has to pay to music labels every time it streams a song. Those rates are higher than the advertising revenue Pandora collects. Every transaction is a money-loser. In its IPO filing, the company says it will continue to lose money through ‘at least’ fiscal 2012. But there’s nothing to indicate what might change in that time to turn around its current losses.”

Nokia CTO Leaves Adding to More Bad News

Chief Tech Officer of Nokia, Richard Green, is on leave from the company. According to “Nokia CTO on Leave Amid Report of Strategy Disarray” by Ritsuko Ando and Georgina Prodham of Reuters.com, there is speculation that Green left “over Nokia’s Microsoft-focused smartphone strategy and might not return”.  The official and only response from Nokia is that he is on leave for personal reasons. 

Nokia is not doing as well as its competitors. As the mobile market has advanced, the company has been run over by competitors in the smartphone market and cheaper competitors in the low-end market. The company’s market value and ratings have dropped. According to one analyst “We will probably see more of these negative news from Nokia in the coming weeks…”

The news about the leave came on a day when CEO Stephen Elop spoke at a conference in London. Elop avoided the CTO leave issue and instead focused on Nokia’s current state. He shut down all rumors that Nokia was up for sale. Yesterday, CNBC reported rumors of Microsoft buying Nokia, along with other companies.  The article reports Elop is probably telling the truth as Nokia does not seem attractive to any potential buyer. Nokia will be working with Microsoft to develop phones using Windows Phone OS. According to the article, “Elop stuck to this line that the company needed not a fundamental rehaul but a more focus and better execution”.  Nokia’s focus is clearly competition as Elop stated: 

“It is more important for us today to compete with Android and Apple than to compete with a Samsung Windows phone”

Gap Clothing Partners with Diane Von Furstenberg Hoping to Increase Sales

A month after Gap, Inc fired their head designer, Patrick Robinson, they have partnered with Diane von Furstenberg. According to “Gap Fights Fashion Slump with von Furstenberg Deal” by Allstair Barr of Reuters.com, von Furstenberg, famous for women’s clothing, will work with Gap to revamp the baby and kids clothes.

“The collection should be ready by March 2012, and the clothes will be sold through GapKids and babyGap stores in almost 30 countries, including United States, China, and Japan…They will also be available online in 75 countries…”

The article reports Gap is still looking for a lead designer. The inspiration behind the partnership with von Furstenberg is that Gap missed out on the current colorful fashion trend, sticking with neutrals, and von Furstenberg is known for “print, optimistic color and femininity”. The key goal is to boast sales.

I’m a little confused. If Gap believes their lack of sales is due to missing out on a fashion trend in women’s clothing, how will von Furstenberg working in baby and kids clothing solve the problem? Von Furstenberg is known internationally for women’s clothing; why is she not working in this department?

Phil Ivey Sues Full Tilt Poker, Claims the Site has not Refunded Money to Players

Last month, I wrote about the government seizures of online poker sites. It is illegal to gamble online in the U.S. and it also illegal for any poker site, even based overseas, to allow players to use their bank accounts to play. Many sites, including Full Tilt Poker were accused of creating fake transactions as means to allow people to gamble. A few days after the seizure, the government let the poker sites go up again only as a means for players to get their money. Well, Phil Ivey, one of the most popular and successful professional players, filed a lawsuit against Full Tilt Poker.  The basis of the lawsuit is that other online players have not gotten their money back.

Jonas Bevacqua, Co-founder of LRG Passed Away

Jonas Bevacqua co-founder of LRG, Limited Research Group clothing, died Tuesday.  The cause of death has not been released. Bevacqua died at 34 and started his company in 1999. The style of his clothing was a hybrid between skateboard style and hip hop with eclectic splashes added. According to “Jonas Bevacqua,Co-Founder of LRG Clothing, Dies at 34” by Douglas Martin of NYtimes.com, “In 2002, Entrepreneur magazine estimated the company’s annual revenue at $150 million and ranked LRG fifth among the 500 fastest growing companies that year”.

The clothing was embraced by many celebs within and outside of the hip hop industry. The company also embraced its style into a full brand by “[promoting] underground recording artists and [having] its own skateboard team.” He started the company when he was a parking valet and worked his way up to a successful entrepreneur. It’s truly sad to hear of his passing. The LRG team has written a tribute letter, which is on the homepage.

People are Starting to Realize LinkedIn was a Bubble

The first day of LinkedIn’s debut was filled with much excitement and media fanfare. Even though valued at $45-a-share, the stock hit an amazing high of $122.70. But there were some people, like myself, not so excited. I felt that LinkedIn could not be valued so highly unless their was a plan to validate the value. LinkedIn is a great professional social media tool and makes it money from advertising but what else could the company do beyond maintaining current operations and software updates, especially with millions more dollars, which is what the high stock numbers equates to. That day, I watched “Mad Money” on CNBC. If you’re familiar with the show, you know Jim Cramer, the host, is very animated, aided by a colorful set and a sound effect board. The beginning segment of the show was without the extras and had a serious tone. Why? Because Jim Cramer had experienced the dot-com bubble and survived. He clearly stated that LinkedIn acted and smelled like a bubble; the company was good but not worth its value; and a lot of the spectacle and cap on shares on the initial day were tools to hype the stock and thus cause a buying frenzy. He was serious because despite having the dot-com bubble as a means of reference of past mistakes, we were repeating the past. Also, the warnings of a bubble have been floating the internet for some time (I wrote a post on this months ago); the “bubble what?” ignorance of LinkedIn’s opening was sad. Now, the stock has dropped significantly and both the current price and academia are stating, for sure, that the stock was a bubble.