Archive for the ‘Journalism’ Category
February 8th, 2012
The piece, written by Frédéric Filloux compared Facebook’s valuation 3 years ago, with its valuation now and pulled up some interesting data on its profit and value per user, then compared this to other social and traditional media.
The article set the scene with a snapshot of a Marc Andreessen interview, from February 2009, who was the creator of Netscape and a Facebook board member. At that time, the social network had 175 million users and Microsoft had just made an investment setting Facebook’s valuation at $15bn.
Andreessen was quoted on the vision for Facebook, saying: “6 billion people on the planet. Probably 3 billion of them with modern electricity and maybe telephones. So maybe the total addressable market today is 3 billion people. 175 million to 3 billion is a big challenge. A big opportunity.”
I’m sure there were a few raised eyebrows in 2009, but perhaps his statement is a little more believable today, although there are other issues such as strong competition in key markets, the member opportunity is indeed there.
Fast forward to last year (2011) when Andreessen was quoted commenting on Facebook’s funding ($1.3bn as of January 2011). Andreessen said the whole amount was actually a shrewd investment as it translated into an acquisition cost of “one or two dollars per user” ($1.53), which sounded perfectly acceptable to him.
As Filloux mentions in the article, if you look at Facebook’s pre-iPO filing: Marc Andreessen was right both in 2009 and in 2011.
So why the title of ‘Facebook’s strange economics?‘ Well, this is where it gets interesting.
As Filloux points out, last year, each of the 845 million active members on Facebook brought in $4.39 in revenue and $1.18 in net income. He also pointed out that based on the $3.9bn in cash and marketable securities on Facebook’s balance sheet, each of these users actually generated a cash input of $1.53 dollars.
The article then suggests the expected market value for each user after the IPO, which is based on the $100bn valuation, comes out at a value of $118 per user.
Filloux then goes on to compare this to other social networks and more traditional media.
Looking at LinkedIn, which is obviously more specialised than Facebook, and has about 145 million users, it has a $7.7bn market cap and a value of $57 per user. However, LinkedIn makes $3.5 in revenue and $0.78 in profit.
The New York Times, until recently the most read online newspaper in the world, is a less straight forward case, as Filloux notes, simply because the company has numerous websites that deal with domestic and global users as well as traditional readers of multiple hardcopy titles.
Filloux suggested a figure of 50 million people worldwide who are in regular contact with one of NYT’s titles. Based on today’s $1.14bn market cap, this yields a valuation of $23 per NYT customer, five times less than Facebook.
However, there is a large anomaly because in 2011, each NYT customer brought $46 in revenue, almost 10 times more than Facebook. As for the profit ($56m for the NYT), each customer brought in a little more than a dollar.
Looking at traditional media company Gannett, Filloux noted it makes between $50 and $80 per year in revenue per customer, and, depending on the way you estimate it, the market values that customer at about $50.
This means Facebook or LinkedIn are flying high while traditional media are struggling; when Facebook achieves a 47% profit margin, Gannett or News Corp are in the 10% range.
This in no surprise in terms of the way social media are over taking traditional media, but the value per user is much lower. 10 times lower in fact, but the market values these users up to five times more.
Bringing this in to context, Facebook looks set to offer shares a multiple of 100 times its earning and 25 times its revenue. Apple is worth 13 times its earnings and Google 20 times. These kinds of figures do not tend to stand the test of time very well when the market matures, so beware of the Facebook Bubble as Filloux puts it.
The article offers real clarity on what has been one of the most dramatic valuations since the dotcom boom. Facebook’s success is undeniable and its meteoric rise to success/power is there for all to see, but surely the valuation is generous to a fault. Or too generous not to fault.
I have no doubt Facebook’s IPO will be a massive success, and the future of the organisation is bright, but why do we need to make a success story into a super success with falsely inflated valuations, when the real story is still pretty damn impressive?
July 29th, 2011
Earlier this week Charlotte McEleny wrote a piece for NMA titled: Social CRM needs to be defined.
Charlotte opened her piece by saying: “Social CRM is an exciting phenomenon for brands, but with a lack of definition, it is becoming a meaningless social media buzz phrase.” This sums up the issue well. Many people are now talking about Social CRM, but the reality is they are probably only offering one element within Social CRM’s remit, or beginning to appreciate the range of elements that must come together, and as a result, it is becoming a bit of a buzz phrase.
The issue of a lack of available case studies that Charlotte mentions is also possibly linked to this problem, as I doubt many of what we would now call Social CRM campaigns started out with that title. Instead, it’s likely that there were separate functions of monitoring, engagement and data management. Although we are now seeing these functions pulled together under the Social CRM umbrella, planned and purpose-built Social CRM campaigns are still few and far between and have little in the way of a track record to report back on.
So, I thought I would have a go at defining Social CRM, and also pull in definitions from other more recognized individuals in the sector.
Put simply, we believe Social CRM is about delivering improved customer service by managing customer relationships and data, and its main focus should be fully on ‘Humanising the conversation’.
Wikipedia defines Social CRM as follows (quoting Paul Greenberg):“A philosophy & a business strategy, supported by a technology platform, business rules, workflow, processes & social characteristics, designed to engage the customer in a collaborative conversation in order to provide mutually beneficial value in a trusted & transparent business environment. It’s the company’s response to the customer’s ownership of the conversation.”
One of the hottest discussion points at the event was that ‘Social CRM must go beyond Social Media Monitoring‘, although this is an important piece of the puzzle. The key is to understand this ‘social data’ and exploit it fully, both internally and externally. Having social profiles and listening is not enough; you must be able to react, engage and offer useful insights that your community can benefit from. This, in turn, builds trust and helps customers focus on what is important to them. Therefore, considering this range of variables, Social CRM cannot be automated.
By investing in a Social CRM strategy, brands can expect to improve customer service, consolidate customer-related information and processes, evolve service offerings and open up invaluable conversations with customers.
We must approach Social CRM by offering a combination of social media monitoring, community management and engagement with a learning element that allows the brand to refine its customer services offering as a result of relevant feedback.
However, the truth is that there is no single correct approach to Social CRM, as each organisation has different focuses, challenges and customers. This is why we believe the Social CRM process must be developed as a strategy in partnership with the brand.
For further information, Mitch Lieberman, who also spoke at Social CRM 2011, has written an analysis on IBM’s Institute for Business Value “From social media to Social CRM” paper, which is an excellent guide.
June 20th, 2011
You want to know the slow crawl to alternative-truth? By nature, brands leech. It’s natural; they have no intrinsic life of their own. We build and sustain them. They’d die without us.
“They want you to go to their website and submit your product ideas/surrender your business secrets (depending on whether you’ve taken out a patent) for a new five part series that seeks to ‘revolutionise’ the way we use energy.
“It doesn’t matter if it’s for work or play, as long as your ‘next-generation technology’ will change the way we live.
“We really want to find new and original products,” says series executive producer Dan Adamson of programme makers TwoFour. ”The series is a great opportunity to give budding entrepreneurs a national audience for their creations.”
The programme makers expect people to have patented their ideas. It costs at least £50K to protect an idea in the UK alone. Investors in a really good idea expect spend up to £500K to protect their property in the courts worldwide. It’s a painfully expensive and time-consuming process.
But, at base, do you instinctively trust the E.ON brand? Me neither. There are so many things that I dislike about this marketing shtick but at it’s heart it is without an essential truth.
Maybe that has something to do with the brand’s affection for pushing up prices year on year, way beyond what’s right and reasonable. And their lack of care for their consumers, balanced against their desperate need to appease their shareholders. Guess who wins.
As for “changing the way we live”, we’ve been there, suffered and won’t get fooled again. Maybe
Against all that dark stuff, here’s truth and beauty:
April 27th, 2011
Content curation ha been a constant discussion at Liberate Media since we first saw its expression through Brian Solis in April 2009. To be frank, the position Brian described then was inchoate.
We’ve followed and engaged in the online content curation discussions since then without feeling that we had found that unique moment when everything is revealed and made pristine.
We’ve worked with any number of online free and commercial tools over the past five years that have first measured, dissected and then sought to provide the marketing answers around online content creation and curation that businesses crave.
Wikipedia is not much help in our struggle to understand precisely the commercial goals and processes. The world of the mind, in this instance, gives little guidance but is worth a reference:
“Digital curation is the selection, preservation, maintenance, collection and archiving of digital assets. Digital curation is the process of establishing and developing long term repositories of digital assets for current and future reference by researchers, scientists, and historians, and scholars generally.” link
Many commercial contributors feel, like Pete Codella that: “The challenge is to think of what you share online as storytelling. What story do you want to tell? What are the key messages to be conveyed? What’s the best way to tell that story, and how do you do it in such a way as to encourage others to voluntarily share your story?
“This is where the whole concept of content curation has come from. It’s like a museum curator preparing an exhibit. Careful thought and planning go into every detail from the room’s lighting and colour to the arrangement of the artwork to exhibit publicity.
“Coupled with the strategy of effective storytelling is understanding search optimisation. It’s incumbent upon business communicators (not just web developers) to understand how things like page titles, meta data, description, keyword, header and ALT tags, and RSS feeds impact search placement. Not only is developing content a strategic exercise, strategy is front-and-centre for how that content is packaged for the Web.”
Discussion with our academic and commercial partners over the past week has convinced me, finally, that online content curation equates with Quality in the commercial sphere. And the only way to add quality to content currently is through human intervention.
In my view (and this is open space for discussion) the human touch is, and will be for some time, the crucial difference that adds social and economic worth to any online social object.
The current dominant model for content curation is: “Organising and sharing the most relevant content on a finite subject.”
Right there is the definitive problem, for me. No subject is finite, by nature. The definition fails, not only because it is, of itself, contradictory, but also because the online medium in which it sits does not recognise “finite”.
Finite is, for me, commercial shorthand for automation. The only reason for making a form of online content finite is to appease the needs of measurement companies that seek to contain the parameters for their work, to produce quantifiable results, through code, with a froth topping of human analysis.
Curation = quality. Spread is no longer a useful metric. Quality of content curation will deliver connections that are far more useful, relevant and so commercially beneficial. The only way to fulfil the equation is to have people, experienced, savvy and fully engaged who can develop these connections, reshape the content for specific audiences, monitor and respond and so maintain the social objects they curate.
If a social object curation agency delivers 10 rock-solid leads to a brand each week, then it is a winner. It has harnessed the best automated measurement processes, interpreted by humans, who also drive the engagement, conversion and delivery processes.
The human touch = lead quality.
This equation means that brands that are serious about gaining a competitive edge need to understand that full automation, and so cost reduction, is no longer available in the medium-term, if ever.
Serious brands need to allocate the cash that will give them the results they want. Humans are more expensive than robots. They are also absolutely essential.
Quality in this form is measurable and so worth the money. The other qualitative outcomes from the human touch are immeasurable.
February 11th, 2011
Have no doubts about it. The deposition of Egyptian President Husni Mubarek signalled a fundamental change, not only in Middle Eastern politics and culture, but also in the way we view social networks.
Wael Ghonim today (Friday 11th February) told CNN’s Wolf Blitzer that Facebook was a key to the success of the Egyptian people’s uprising.
Ghonim is a marketing manager for Google and played a leading role in organizing the January 25 protest by reaching out to Egyptian youths on Facebook. Shortly after that first protest, Ghonim was arrested in Cairo and imprisoned for 12 days.
Since his release, Ghonim worked hard to dismiss the notion that he is a symbol for the Egyptian freedom mobement.
“I’m not a hero. I was writing on a keyboard on the Internet and I wasn’t exposing my life to danger,” he said in an interview immediately after his release. “The heroes are the one who are in the street.”
[Thanks to Huffington Post]
We know that progress is not linear. There will be setbacks and even a bloody reckoning that re-establishes the corrupted classes in Egypt. But whatever happens at the blood and flesh level in the short term will not affect the cultural dominance of social networks.
The speed at which Facebook, Twitter, YouTube, LinkedIn and other social platforms have been transformed from simple sharing tools to revolutionary engines is astonishing. And we also bear in mind that states under pressure have used every traditional means to block these platforms.
It took the traditional tools of communication – the Press and Broadcast – centuries to achieve this level of authority and power. By the time they had achieved this, most were diminished because they were owned by or in the pay of power brokers in the countries in which they operated.
What is strikingly new about the social platforms is their agnostic, non-judgemental nature. Indeed, their very survival depends on this. Many millions of voices can group to form a new ground for the process of change – and answer the criticism of that process.
This is truly an exhilarating time in the culture of transmission; more fluid, engaging and productive than we have ever witnessed.
We should celebrate with the Egyptian people and at the same time pay a discreet homage to Facebook and the other social networks for their (our) part in the process of change.
We’ve watched the transmissions and debates on broadcast networks but we always got our information about the Egyptian people’s struggle first through the social networks. This is one communiqué. Enjoy this tonight:
February 4th, 2011
There would be little to recommend the BBC news service – were it not for the global breadth, depth and innovation in the way it delivers the information that is our lifeblood.
God bless the Government and the Foreign Office for applying the bloody rapier to those services. I’m sure that we will all benefit from these cuts.
Meantime, “Innovation”? Agreed, the format of the morning news schedule on Radio 4 could do with a refit and the daily specialist programmes, apart from You & Yours, struggle against an aged structure but have you listened to PM recently?
Lead presenter Eddie Mair is most definitely leading a quiet revolution in the delivery of news at Radio 4. Quiet, because there has been no big promotion, “shout out”, or any other marketing push. But, there is no doubt that PM is fundamentally changing the way we hear and engage with news in the UK.
Eddie Mair seems to understand, and is ahead of, the engagement culture that is redefining the way we share information. At the same time, he deploys a very wicked sense of humour at every opportunity. It is extraordinarily fresh, disconcerting and quite wonderful.
He plays with news objects in a way that places them in our online social context, asking for and reflecting the “instant” opinions of listeners in a way that draws us close.
At the same time, he balances the ironic, distanced, and playful mode with an exact approach to events – the ‘old-school’ way that puts the people he questions under a pressure that exposes the weaknesses of their arguments and themselves.
So what’s different? What Eddie and the PM team are doing dissolves the ‘given’ production and presentation of news. The PM team’s agile, fluid and emotionally-intelligent approach to news gathering, editing and presentation has deposed the rigid, sealed and dislocated methodology that defined and deformed the way we hear radio news.
They make the complexities of engagement apparently simple because Eddie and his colleagues know how to converse. He is shockingly funny, adept and sometimes breathtakingly wonderful in the way that he draws out new ways of thinking from news items that we might easily dismiss.
And here’s the thing. TV news cannot hope to match this depth of engagement because its existence demands a passive audience. We have moved on – and so has Eddie Mair and the PM team.
This is an extraordinary development in the culture of news, and the culture of media. We should celebrate this new freedom and engage with it.
And here’s a free radio soundtrack to dance, sing and hum along to:
And a cautionary tale (be scared, be very scared):
December 20th, 2010
Every so often, one of the good guys turns up to fight for what’s right and true in this bank-distorted, greed-obsessed and blood-sucking world.
Al Franken is US senator and he has been fighting against the slavering tech companies in that benighted country who have, almost since the internet became a commercial proposition in 1993, sought to corrupt the idea of a free-flowing global information network.
These companies, of which AT&T, Comcast and Verizon Wireless are current prime examples, want to create new revenue streams by creating tiers of internet data streams, allowing companies to buy visibility and dominance. The price they expect to pay is very high in monetary terms. The price we will pay is the end of the internet.
Make no mistake, if the US Federal Communications Commission does not annihilate the threat of a tiered internet tomorrow (Tuesday, December 21st) when it meets to discuss “net neutrality”, then we can kiss goodbye to the internet.
What worries me is that the FCC has been taking seriously the views of the companies who stand to gain massively from the introduction of rules allowing a tiered internet. Indeed they have actively sought these views, which is a matter of great concern.
The FCC chairman Julias Genachowski’s draft Order has not been made public but early reports make clear that it falls far short of protecting net neutrality.
President Obama is on record in giving his unqualified support for net neutrality:
The free marketeers, God Bless ‘Em, are also on the side of all that is good and true. Witness this MSNBC Cenk Rant: Internet Freedom In Danger. Rant it might be but for once, he makes sense:
So, what’s to worry? Well, Al Franken is and therefore so am I. The FCC could change the world tomorrow. And remember, it’s not just the US – the virus of tiered internet will spread, if we do not stop it here, right now.
December 12th, 2010
This week we’ve seen the next step in the re-personalisation of social media and the first public salvoes in the incoming cyber wars – both have profound consequences for the way we communicate online.
On the one hand, we have the launch of GeoGroups, an iPad app that offers a level of control over social media engagement not seen since the early days of Facebook.
On the other hand, we have witnessed the launch of, admittedly quite crude and functional, attacks on the commercial online assets of companies that bowed to US pressure and so damaged the commercial interests of WikiLeaks.
Good guys always finish, in my experience. We will have to watch the WikiLeaks story being played out and engage where needed, in the right way – and hope that the Internet can develop in the form that we want.
So, first, Geo Groups. Possibly the finest app for iPhone to be released this year, full of promise and with the initial infrastructure to make sure it flies. We’re testing in depth now but first feedback suggests that this is a new way of negotiating the social web, and one with a sure market.
For me, it represents the re-personalisation of online social culture. Geo Groups allows you to create a social group around anything that has a location but also contain and control, in a positive way, the ebb and flow of information in that group.
It’s a response to the atavistic emotions that all social media interaction currently provokes, the feeling that there is too much, too diffuse and too uncontrolled information in the daily online engagements we make.
Geo Groups has an open API and third-party developers can make full use of the platform. Check out the developer page for more info. Geo Groups is my kind of company for that offering alone.
Little grouse, though. Did you guys check out the name online before you chose it? You’re competing in search terms with one of the biggest companies in the world that offers “private correctional and detention management, community re-entry services as well as behavioural and mental health services to government agencies around the globe.”
Best of luck with the Search terms battle.
Talking of battles, apart from a very brief period in the mid-1990s, I’ve always seen the Internet as a conditional space, governed and given by global power brokers as a gesture, not a right. We, in the sense of ordinary people, do not control this space. In the same way that states can shut down the traditional information spaces – TV, radio, telecommunications, press – so in the same way can they disable the Internet.
The price they pay for this action, for blocking the “self-healing” network temporarily, is that it will have a destructive and perhaps terminal impact on trade, exchange and development.
But if a body of citizens decides to wage war on states and commercial interests by using electronic weapons (and, let’s face it, the Denial of Service is a very crude stick), states and their agents will respond with full force.
Any idea of “being beyond control” is clearly irrational. We need now to clarify in our minds what we want to achieve and to fully assess the conditions in which protest, discussion, argument and development can proceed.
If we don’t do that, we risk the end of the Internet as we have known and loved it. If you don’t believe that look at China, Burma, North Korea, Iran, Iraq, Pakistan and, shortly, London. Tell me it’s not relatively easy to block networks and global communication.
Hilary Clinton signalled in February this year that the US Government views cyber wars as the defining terrain for hostile engagement in the next ten years. The US might be an ailing power but it is still top Rottweiler globally and can do an enormous amount of “restructuring” to the Internet in the time it has left as the uber-state.
We engage aggressively at our peril but we do need to engage intelligently, now more than ever.
Talking of intelligence, here’s what the founder of the World Wide Web has to say about our online futures. I interviewed Tim Berners when I was working at The Times – his semantic knowledge, quiet passion and belief in the absolute benefit of an open web still resonate now.
Spend a few precious minutes hearing what Tim says about the future of the web; you will be rewarded:
November 23rd, 2010
Milo Yiannopoulos had a hissy fit at the Telegraph this week. [click on hissy} Strange, because he usually walks the sometimes intelligent middle line. He spluttered, raged and nearly cursed against the “blood-sucking social media gurus” that have inserted themselves, much like a virus, into the corporate body of UK business since 2007.
The immediate antecedents and provocations that engineered his rant are open to discussion as is his key point that purveyors of social media expertise are salespeople that use snake oil to shower daily.
There is no doubt that there are many, often young, inexperienced, people in the UK now who have seen the promised land in much the same way that people saw a similar online chimera in the mid to late 1990s. And in a similar way, they have nothing to offer.
That Milo mentioned a single company, which in his eyes, is doing the right thing in social media is confusing but no matter. More important is the insertion of his influential, if emotive, ideas into the commercial body of the UK at a time when the right ideas about social media engagement are sorely needed.
In my experience, companies are uncertain, scared and unwilling to engage socially with the very thing they must engage with – the consumer who is in control.
Milo’s exposition may win friends on the conservative side of business who intuitively feel the need to regain control of the relationship with consumers. This is not a practical view because that level of control has gone, forever.
It would have been more positive for Milo to rage against the ‘chimerists’ but at the same time to place social media more strongly at the centre of developing UK commerce, which is where it belongs; more, where it actually is.
Interestingly for me, he does not offer a new path, methodology or explanation of social media. Put simply, he rages but does not explain. If Milo was serious about the need for ways to engage with social media, he should have enriched his bluster with effective ideas.
Does that mean he dismisses social media? Apparently not. He points out the pathfinder quite clearly but does not go any further. That is a shame.
I’m with Milo on the dissolution of the insidious snake oilers, and this will certainly happen. But I’d hope he would look wider and see the many, many people who are working to engage, make stronger connections and build UK businesses through social media.
A propos of little, here’s one of my top five songs. It may have bearing on the trifle above, more likely not.
November 12th, 2010
Putting issues of bomb threats to one side for the moment, and our country’s obsession with coming down hard on anything remotely related to the subject, especially in relation to aircraft and airports, even if it is clearly a joke, I wanted to pick up on a great article by Milo Yiannopoulos at The Telegraph today who beautifully overviews the issue between our judicial system, which is dramatically out of touch with the social web, or even the pre-social web for that matter.
I have a small insight into the clash between how we lead our online lives, and how our legal system interprets that, as my wife is a solicitor. From my own personal experience, I am constantly amazed by the antiquated systems and processes she has to follow in accordance with our legal system, and she works for a relatively progressive and modern firm. But that’s just the tip of the iceberg, and in general our solicitors have a good grasp of what is taking place online, but the system they work under does not.
The system and its understanding is one problem, our obsession as a country with security and the removal of our natural sense of humour in relation to such matters is another, but in my opinion it’s the double standards that annoy even more.
Let’s take the case of our Twitter joker. Yes, it was probably not the best thing to do in light of recent cases where even obvious jokes have resulted in dramatic action, but let’s be honest, this was never a threat, and should we all need to be that careful? Some might argue that the hard stance is to attempt to cut out such instances of joking about serious matters, but that’s really not going to happen. If you look at our social history we have faced most of the major threats to this country with humour, is that going to change now?
The reality is, if you look at the content available on the web, there are many more real examples of threats and dangerous content. So, why take action against the citizens who may have joked about something that is undoubtedly serious, but pose no real threat, and not these other examples?
The reality for Paul Chambers, the 26-year-old accountant who has lost two jobs as a result of his Twitter joke, is he has lost his appeal and will have to pay a £1,000 fine, around £2,000 in costs and he will have a criminal record for threatening, in jest, to blow up an airport.
If I look at my Twitter feed now, I can see a range of what could be construed as threats if we are working on the Paul Chambers example. Should these people be arrested and charged? Should I stop following them as a result? Or should we all get some perspective here and put our legal energies into dealing with the real threats and not those that are clearly written in jest.
Furthermore, if you search for the #IAmSpartacus hashtag in Twitter now, you’ll see the number of people who feel this joke has gone too far by re-issuing the so called threat that Paul Chambers tweeted, in support of him.
The scary thing is, as the number of people who utilise social media in its various guises expands, the likelihood of similar cases also expands. So, while I don’t expect anything to change quickly in our legal system, we’re likely to see more unfortunate examples such as this. Furthermore, if you don’t understand the social web, #IAmSpartacus is about to become its latest case study.