1. Yahoo will merge or be acquired. It’s inevitable. With a stock pricing straddling $10/share, a group like Ichan’s will continue buying huge portions of Yahoo stock causing stock prices to be driven up even further. With Ichan already controlling enough chairs to influence who takes the CEO chair and playing an active and persistent role on the Board, the company is headed in the right direction for an M&A.
2. Facebook will come to a realistic evaluation. The $15B hype behind Facebook will be put into check. With VC cash drying up, Facebook will have no choice by to increase advertising activities via performance based online advertising. Hopefully this activities won’t scare off users like Beacon. Not only can we expect a more practical valuation of the traffic Facebook is riding, but also a precedent for the valuation of social media in general.
3. Ebay will continue to outpace Amazon. Already ahead by a slim margin in unique monthly visitors, Ebay will outpace Amazon in growth and possibly in stock value. With consumers still spending on tight budgets, the of increase in second hand shopping Ebay gained over Christmas will play an active role in consumer shopping patterns after Q1 2009 post Christmas lull.
4. P2P lending will rise as a serious source of personal finance. Consumers still need small loans despite the average American carrying thousands in credit card debt, and banks raising personal credit rates. P2P lending sites like lendingclub and prosper will rise as a preferred source of banking; providing consumers with easy access to small time loans and empowering investors with additional revenue streams.
5. Angel investing will reach tipping point. Angel investing will become a more prominent and sought after source of funding, given lower startup costs as well as the bootstrapping mentality needed for survival in a recession.  Although still playing an active role with high exit value ventures, VCs aren’t going to take the risks that they have been in the last 2 years. Savvy angel investors will not only provide short term capital but can fill the void in provided valued added strategic guidance.

Let’s see how the ball rolls towards the end of 2009 Q1. Good luck to anyone starting a business this year!

The red line is Anheuser-Busch, and the blue line is Brown-Forman Corp., the parent company for Jack Daniels.

He was totally right! I’m not going to even bother putting a chart up for international alcohol companies, but let’s say you could easily diversify your portfolio with a few international brands, even in emerging countries and the principle yields the same results.

The value of our investments and cash are based on variables far beyond our own control. With trillions of dollars lost in the last 12 months it makes any investment, even cash or gold look scary. All investments, no matter the type, have a price that is subject to change.

I see too many financial and tech bloggers, in addition to financial “experts” giving frantic and contradictory advice. None of their answers address a simple question: what good are the investment decisions you make today worth when the entire world economy can turn upside down tomorrow? There is simply too much information to consider and little relevant historical data available.

The difference between now and the 9/11 recession, the recession of the 90s or Great Depression is that we are at a major technological advantage to learn and act financially. With finance 2.0 management and research tools like mint or yahoo finance with have the ability to get highly personal up-to-the minute information and the ease to act on what we learn. The real issue is our skill in interpreting information, making responsible decisions and investments for the long term.

Disclaimer: This purpose of this entry is strictly to provoke thought – not a provision for financial advice.

What this deal is really about is testing passive and unengaged traffic.  Everyone interacts with web properties hosting games, funny videos and entertainment. But this traffic is not actively seeking information to make a decision. They’re simply screwing around, taking a break, playing with friends or relaxing.  Traffic volumes for passive traffic like this is decent when compared to a high volume news sites like the NY Times:

The big question is how to monetize this traffic. Higher numbers often indicate a higher chance for monetization.  Companies like Digg (valued at $40M) have the investment behind it - but results still need to be proven.  The same can be said for the other web 2.0 models like social networks and photo websites that draw massive amounts of untargeted traffic and investment - but shy away from boosting revenue figures.  These sites are cool, but I won’t believe they are an effective business model until I see the money line in action.

Another issues is how ad placement will be achieved. In the worse case scenario, ads will be placed in a seemingly disruptive way - totally distracting happy flash gamers playing their favorite free games.  Arrington gave us excellent example pointing to the tasteless ad display in movies like Idiocracy and 1990s old school style websites. Let’s hope it won’t be something like this:

Can you imagine ads being implemented in your favorite game - popping out of no where or as, characters, objectives and other in-game tactics!?

I believe there is a business behind passive traffic like flash games and other entertainment sites.  The numbers are there but the engagement is not.  On the bright side this deal will be good for everyone: Google will invest a few zillions to attract, test and monetize.  If and once the results are successful, smaller time media companies have room to move in.

In the mean time I doubt Raft War players are going to bite anytime soon :)

It didn’t take long for the Yahoo-Google ad management deal to get scrutinized by the Department of Justice.  The deal - allowing a certain allocation of Yahoo!’s ad space to serve Google managed ads - has some in Washington doubting its fairness and contribution to a competitive environment.

Can’t say I’m shocked. I spoke in the past about how consumers and businesses lose when Google nears monopoly status.  I just had no idea it would happen so soon. Everyone knows that Google has been growing disproportionally out of control with their hold on search and content advertising.  Few outside of the media business understand it.  But can any attempt at regulation or breakup at this point really achieve anything? With such a huge amount of means of interacting over the Internet it might be too late.

Regulation if done effectively could set a new precedent. This could be an excellent chance for regulators and federal authorities to make a ruling over Google that can create a competitive environment.  I hate regulation, and prefer for market economics to level the playing field.  In this case there is simply too much out of the control of consumer’s hands.  Seriously, is there enough market force to boycott the two largest names in search - :) ?

In the best case scenario the fact the DOJ is reviewing the case may give an incentive for an adjustment in the market without intervention.  Maybe Google will back down and Yahoo! consider new options for strategic partnerships with other media companies.  Worse case, a poor decision will be handed over by officials who barely understand how the Internet works let alone have the wisdom to see it’s direction in the next few years.

In this agreement, a portion of Yahoo!’s search and content inventory will actually serve Google sponsored ads in addition to Yahoo!’s. The situation gets gets even worse on a corporate level:

1. Google is coming close to “evil empire” status. I’ve written about the possible consequences of Google becoming that “one guy” we’ve all seen taking home leftovers from the all you can eat Chinese buffet.  I’m sure it’s lonely on top.  But rather than focusing on what makes them great in the eyes of the world – like enhancing a few key products and innovating killer new ones – they’re stalking out competitors in a take all or nothing approach, with the capacity to destabilize the internet.
2. Ruins margins for publishers. Totally out of Econ 101: Google’s massive inventory of traffic and ad distribution via publishers gives them too much power in controlling prices.  Everyone knows that Google takes a much larger commission of ad revenue from publishers hosting AdSense ads than affiliate networks performing the same service.  No doubt Google can get away with this and still compete against performance based networks given their superior optimization technology, bidding system and reach.  It’s an explosive combination for any single entity to take an even larger portion of search traffic which strengthens their control over pricing.  The results will certainly put publishers in a more vulnerable and reactive position in addition for possible regulation calls.
3. Another strong blow for Yahoo as a player. A possible deal between Yahoo! and Microsoft had the chance to maintain a competitive landscape in high volume search potrals as well as the internet as a whole.  With dismal results and the subsequent board room drama that still ensues – Yahoo! is only a shadow of player it used to be in terms of validating a much needed higher value share price on paper.  This deal not only downgrades their position, but literally sells their inventory/client base to their biggest competitor.  Where are they going to be in another 12 months?  Who else can step up to the plate and maintain a competitive online media environment?

The Yahoo! Google deal is just another another desperate and cheap attempt by Yahoo! to raise stock value in hopes of landing some magic deal.  Time will tell if this is their first step in becoming a giant Google Adsense publisher.

Controlling every point of our online experience without focusing a few critical elements can transform Google’s position as a cool company in San Francisco into a Costco style provider that we reluctantly accept due to its convenience and commoditization.

What do you think about when you hear the word Google? Entry point to the web. Creativity, innovation and serious $$. Maybe even people buzzing around in a really cool work environment.

I tend to think about a group of guys hell bent on breaking the rules and proving that the American dream still exists for anyone who has a great idea, a clever approach, determination and the skill to make it happen.

Today Google wants to be everything and everywhere online. They started with a search engine. Now they’re a toolbar, email client, GPS/mapping system, a scheduling solution, web-browser… and almost mobile phone amongst other things.

What made them cool was the search engine.

What made them that $$ was their ability to scale and target traffic.

What made them warm and fuzzy was their near Che Guvera revolution approach of going to head to head with the likes of Microsoft and other large companies. I love Google products like Gmail, their RSS feeder, calendar and even media tools like GoogleInsight which we’ve written about before. They’re far superior to other conventional services – especially one you have to pay for – like from Microsoft. Not to mention I feel like I’ve taken something back when I use them.

But seriously… can’t it go too far? Who wants a one stop shop for life? Do you want only your favorite cereal for breakfast every single day? Do you really want the Costco/WalMart experience applied to the internet? It can happen. And it starts by competing against people who not only do a better job but also provide strategic value to one’s business. Most recently it’s happened here:

The Google web-browser. Sure it’s good – but I’m willingly to bet it’s not make a ding in hard core Internet Explores user market. Most likely it will take a larger portion of Firefox, Opera and other browsers.

Google phone. What… iphone 2? I can appreciate that it’s a great entry point to mobile media. But why not focus on creating WAP based client or downloadable applications on a huge variety of phone modes so everyone can access mobile content in a form their already familiar with?

Google’s stands in a position to fit its brand somewhere between that warm fuzzy feeling you might get when walking into a small time local coffee shop and that somewhat sold-out feeling when ordering a coffee you can’t pronounce form Starbucks.

Obviously it’s their creativity that got them started. This same creativity combined with the shear scalability they control could be transform them into one of the same large companies they’ve grown accustomed to taking down in the first place.

Lips sealed.  No one seems to know the valuation of the deal was, since Google finalized the sale on Sept. 10.  This already raises a few eyebrows as to Publicis’s real confidence in the purchase.  Measuring the investment of their newly acquired SEO rich affiliate network - as means to beef up their online marketing activities and presence is still very much an internal issue.

Offline media and performance marketing don’t mix.  It’s understandable that offline agencies from big to small don’t mess with performance marketing - it’s simply not their business.  The giants on Madison Ave. know how to negotiate enormous budgets and build brand campaigns.  Meanwhile, CPA and CPC pricing models are driving traditional impression based CPM models down on the aggregate… primarily from the explosive growth in traffic sourced from search engines and content rich publishers.  Despite this, there is always going to be a demand for brand driven advertisers who measure the effectiveness of their marketing campaigns against massive scales of revenue.

If it’s about branding, then Publicis’s bet may actually pay off. As we all ready know, the real purchase value of Performics comes from it’s advantage in SEO.  This asset combined with their already active search marketing activities - could be extremely lucrative combination for large brand oriented clients.  If you want to look at  a real risk in offline media take a look at CBS.  In their attempt to buy Internet in the last few months, they gambled on huge properties like CNET for $1.8 billion and LastFM for $280 million among others.  Time will tell if and how it will pay off.

At best it will redefine the industry. If the results are good, than large and small advertisers might soon follow.  Better still, this deal stands to legitimize SEO’s shady background by powerful market and economic forces in mass… making SEO and search marketing just another department in both large and small agencies.

To make it happen Publicis and other traditional media companies might consider following the likes of other bold moves and mistakes of acquisitions past.  Seriously.  Look at Yahoo! exodus of executives since the Microsoft deal went down, or is still going through… or whatever status it remains at.   Lack of top level competence from Publicis as well as a growing pains in corporate culture and job security can easily cause key management players an even entire company divisions to walk.

The ability of traditional media to make a successful bid with online media - lies not just in making wise acquisitions but in their management and optimization of a channel they are just beginning to understand.

Google is focused on performance marketing more than ever before. Since Google finalized the sale of Performics to Publicis earlier in August, the focus of the deal has been on the conflict of interest narrowly avoided from its previous acquisition of DoubleClick. Google is the world’s biggest provider of search and its revenue model is built from ad placement within its search engine and publishers using AdSense. 

Let’s look at foundation. Google’s $3.1B acquisition of DoubleClick in March 2008 expanded its reach dramatically via display advertising and affiliate marketing. The affiliate marketing portion of this deal included capitalizing on the advertiser and publisher base of Performics, a division of DoubleClick.

The most interesting part of March’s deal is that Google effectively jumped into performance marketing overnight – with serious potential to take a huge portion of the affiliate marketing industry. Their newly converted Performics affiliate network stood to “compete” against some of the best known names in the affiliate marketing including AOL’s TradeDoubler, Commission Junction and Linkshare. Actually competing isn’t really the right word – maybe obliterating is. With enormous inventory in search and display ads combined with significant reach via search and targeted publisher traffic - they immediately took action by offering AdWords advertisers a bid on pay-per-action beta tool. Now, advertisers could pay for a lead, sale or other action - rather than just a click. The program gave current Google advertisers an additional competitive advertising stream, while leveraging former Performics advertisers via Google’s targeted publisher base.

The results have been somewhat inconclusive. Little publicity or reporting was done outside of the service’s introduction. The program’s pay-per-action beta was active for a sometime before being merged into CPA bidding tool which Google released prior to the deal (in September 2007) . It was a bold move, but not enough to make a serious threat to other affiliate networks. Sure it takes time to make the transition and we won’t know what bottom line revenue was generated until Google’s annual report will be published next year. Nonetheless performance advertising hasn’t taken the Google’s spotlight.

What really happened in August & September? Details of September’s acquisition show that the SEO portion of Performics was center to Publicis’s interest and eventual acquisition. Selling off the SEO division wasn’t must of a surprise as SEO marketing tactics compete against other channels already operated by Google.

So what does Publicis’s acquisition mean for Google’s stake on performance marketing? With the ‘SEO issue’ conflict of interest out of the way - Google stands to finally spearhead performance based marketing – mainly affiliate networks. Most likely Google’s affiliate marketing services, website names and features will change to reflect the results of the deal.  But over time, the same services and pricing models will be slowly enhanced and integrated into a more powerful Google Affiliate Network. We know now that it’s not as easy as turning on a switch. However, the knowledge, publisher base and advertisers from Performics combined with Google’s extensive reach via search and publisher websites - could be the right combination to redefine performance marketing, control yet another online revenue stream and generate serious revenue.

Mitigating a conflict of interest within Google’s acquisition of DoubleClick is just one result of this month’s finalization of the sale of Perfomics to Publicis. This week we’re going to take a deeper look into this deal and its effect on Google’s stake on performance marketing, offline media’s slow and stubborn move into online channels and the immediate benefits emerging markets may stand to gain.

The potential to create highly effective marketing campaigns with outstanding ROI is every media buyer’s holy grail. What if you could take a keyword and generate dynamic reports of market driven data that literally tell you which markets to invest in, which keywords to add/drop and most importantly the trends defining the viability of your markets’ interest? Enter Google Insight.

Generating lists of keywords with similar relevancy to an existing online media campaign is nothing new. We’ve taken for granted the fact that serious campaign creation and management involves many unknown variables and sluggish optimization. GoogleAdwords’s keyword tool and other products on the market have been a media buyer’s right hand man when testing and optimizing campaigns. These tools are excellent but lack market driven data and statistics to transform a mediocre campaign in into real powerhouse of ROI.

Google Insight is truly amazing - and relevant to anyone who’s communicating a product, service or experience. It’s so easy a 15-year-old could generate more effective reports in 5 seconds that would otherwise take a decent media buyer – slaving over multiple spreadsheets and 10+ cups of coffee – days to create. More importantly the “rising searches” section literally tells you which keywords to test. Use the time duration filter to compare lifecycles and growth acceleration curves across multiple geographic markets and search terms.

See Google Insight in action with 2 terms that greatly differ in both in search purpose the expected outcome from a given campaign:

1. Kate Spade. This targeted search term is most likely relevant to e-commerce websites where geo-targeting and an understanding of trends can really drive ROI. Check out the results over a 30 day time period in the US:

East Coast states claim the top 5 in rank (hehe… I know, shocking) . Aside from the “related” keywords that could be added to this to this campaign, the “rising searches” section actually manages your investment in new media for the month. “Kate spade sale” and “kate spade handbang” are in “breakout” status with more than 5,000% change in growth!.

2. Olympics. This term is broad enough that it can be applied to a huge variety of businesses– most likely large brand oriented advertisers like McDonalds, Coca Cola and Nike. Check out global growth over 30 days, 90 days and 12 months:

30 Days:

90 Days:

12 Months:

Apparently New Zealand is most receptive to the Olympics over a 1 year period. Searches made in Australia, New Zealand and Singapore have amazingly consistent search volumes over the same time period. If I were a brand advertiser I would try to focus on trends all at least 60% of my investment in the top 5 markets and jump to the US only 6 months prior to the release of the games with a gradual budget increase.

Haven’t heard of Google Insight? Most haven’t. I haven’t heard much about this in the online media world and nearly zero in mainstream media - but then again who relies in mainstream media for technology and internet news anyway!?

Google Insight is going to change the playing field of internet economics. For those who are serious about e-commerce and online media – a 30 minute daily investment into this tool will no doubt reduce redundant time management and significantly increase revenue streams.