Facebook (Nasdaq:FB) launches mandatory video ads. That’s olde school television. you know when your watching a reasonably interesting show and suddenly these ads come on. Madison Ave Madmen call that Interruption Marketing. similar to tele-marketing which has annoyed tens of millions.
So where is the promise of social marketing. You know engaging the follower with relevant compelling offerings which have a high sell through rate. This is like watching the Swedish Bikini cheerleading team during a commercial break exhorting you to drink a particular beer while you are ignoring your girlfriend as you watch a very important football game. Very important to be emphasized.
Facebook will become no more powerful than network TV. Which right now is not very powerful at all.
George Gutowski writes from a caveat emptor perspective
Facebook (Nasdaq:FB) is poised to launch video ads for a reputed $2 million a day to reach everyone between 18-54. If they hang onto the business they will gross $730 million. hopefully without annoying the users.
Despite the fact it is free I’m pretty sure I don’t want to see the ads. So what if you go into your profile and change some of your settings. Age comes to mind. Tell em you’re over 55. This demographic apparently does not watch video’s. Change other aspects that makes it difficult for them to figure you out.
The ads will play automatically so watch for creative resistance from an ungrateful public who do not care to pay the bills for billionaire and multi-millionaire geeks working at Facebook.
George Gutowski writes from a caveat emptor perspective.
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Microsoft (Nasdaq:MSFT), Yahoo (Nasdaq:YHOO) and AOL (NYSE:AOL) have all banded together to sell ads on each others sites to compete against, wait for it, Google (Nasdaq:GOOG) While there may be some selling efficiencies we now have officially created a duopoly.
Duopolies are very price inefficient. A lot of me too-ism develops. Cost conscious advertisers will not see a notable difference in offerings. Everyone settles in for a nice game of gouge the customer. Look for more but useless government inquiries into online advertising costs.
Advertisers will need to revolt. Major advertisers will need to form venture capital pools to buy into the next Facebook, Twitter or whatever. That way they can control their spends and develop strategic positions.
Disclosure: George Gutowski writes from a caveat emptor perspective. It’s all about the Black Swans. I hold no positions in stocks mentioned in this post. I have no plans to initiate new positions within the next 72 hours.
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AOL (NYSE:AOL) announced a 20% workforce reduction. The unlucky employees to be decimated are not in the Huffington Post (read Arianna) camp. Was this pre-negotiated but not announced at the time of acquisition? 20% equals 950 people. 200 Americans will be applying for jobless benefits. 750 Indians (South Asia) are also out of work. 300 Indians have been offered jobs with third-party contractors who have not been named.
So what does this mean for AOL’s cost structure? Indian labour is supposed to be low cost and price efficient. On a net basis 450 positions have been eliminated. We can only assume that the remaining 300 positions are cheaper through the unknown third-party contractors.
Has technology advanced so far that we can eliminate hundreds of AOL positions? If so why was this not done sooner?
Will the Huffington Post infrastructure be used more efficiently? Thereby allowing substantial workforce reduction? I thought Huffington was purchased for it’s content and marketing appeal. I do not recall any discussion about technology synergies.
Where is the Huffington infrastructure? Was it off shore already?
How will left leaning Democrats explain the loss of American Jobs in technology? Are there more to come?
AOL/HuffPost needs to explain its new cost structure. If you can eliminate so many low wage jobs what has changed in the AOL cost model. Investors need to understand these issues. There are enough questions about AOL as it is.
Disclosure: “George Gutowski” writes from a “caveat emptor perspective”. I hold no positions in stocks mentioned in this post. I have no plans to initiate new positions within the next 72 hours.
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AOL (NYSE:AOL) used its precious cash resources to purchase Huffington Post for $315 million. Nice pay-day for Arianna and her investors. Huffington Post was hot hot hot. AOL did the right thing in buying. But they needed to take Arianna Huffington as a hostage to back up the big bet. They are looking to her to transform AOL into something positive and vibrant. They put her in charge as editor-in-chief.
Arianna will become the next head of AOL or AOL will fire her within the next two years and lament their lack of good luck. The press releases do not talk about the purchase being accretive. Right now it’s all about the hype. AOL stock has moved downwards.
To make $315 million work at say a 15% ROI AOL will need $47 million per annum in return. Arianna your hostage negotiations probably failed to point this out to you.
Disclosure: “George Gutowski” writes from a caveat emptor perspective. I hold no positions in stocks mentioned in this post. I have no plans to initiate new positions within the next 72 hours.
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Wall Street Journal insists that Yahoo (YHOO) is still looking to merge with AOL (AOL). Advisers have been hired. Strategic options that everyone is painfully aware of are being , whats the word they use, reviewed. AOL was ejected by Time Warner (TWX). AOL needs to do something dramatic to get into a sustainable life boat.
Yahoo, which cannot forget a major error in judgement when they refused Microsoft (MSFT), has some interesting assets namely Alibaba (HK:1688) and Yahoo Japan (TYO:4689). The remaining assets are mildly interesting. Watch for the Asian Dragons to make a bid for Yahoo. Perhaps even a reverse takeover from Alibaba. The Asian positions have the most promise. The Asian Dragons have readily available cash.
AOL cannot afford to get into a bidding war.
Disclosure: George Gutowski writes from a caveat emptor perspective. I hold no positions in stocks mentioned in this post.