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Archive for the ‘Useful resources’ Category

Facebook users bring in 10 times less cash than traditional media users

February 8th, 2012

An excellent article in Guardian’s Monday Note caught my attention earlier this week, titled ‘Facebook’s strange economics

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?

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Tweet limit impacts Social CRM effectiveness - just ask O2

February 1st, 2012

The development of Social CRM has been well documented over the last few years, and we have written a number of posts on the subject, sharing Liberate Media’s experiences of Social CRM campaigns.

However, a very real issue in the development of Social CRM, at least in terms of Twitter usage, was highlighted last week by O2 who exceeded their daily limit while attempting to respond to a breaking communications crisis. O2 asked Twitter for an extension on the amount of tweets it could send, (Twitter’s daily limit is 250 direct messages a day, and 1,000 tweets) but this was refused.

O2′s PR and social media campaigns manager, James Paterson, confirmed the issue at last week’s 1-2-1 Digital Strategy Summit, run by Marketing Week. In fact, he confirmed that O2 actually accrued the same amount of ‘mentions’ in one day as it does in a normal week.

If you are not familiar with the issue, O2 was attempting to respond to the news that user’s mobile phone numbers were being leaked to websites that they visited.

In the Marketing Week piece, Paterson said it was important that O2 did “not stay quietly in [its] shell” as news circulated about the data leaks and that the company employed a strategy immediately to respond to user questions and communicate that it was investigating the issue.

The mobile operator did utilise other tactics as part of its Social CRM response, i.e. preparing a “Q&A” blog post to explain the technical reasons behind the data leak and to apologise for the concern caused.

Paterson said: “We wanted to respond to as many people as possible with fair answers. In the past we may have just given a Q&A to the well-known media outlets, but our people understand that if you answer queries and communicate to people on social media straight away, problems tend to be resolved more quickly.”

However, although O2 followed a clear strategy for its response, it was hindered by Twitter’s account limit.

Twitter has commented on the limit issue: “Limits alleviate some of the strain on the behind-the-scenes part of Twitter, and reduce downtime and error pages. For the sake of reliability, we’ve placed some limits on account actions like following, API requests, direct messages, and updates.”

“The daily update limit is further broken down into smaller limits for semi-hourly intervals. Retweets are counted as updates.”

These rules obviously reduce the effectiveness of Social CRM response mechanisms for large brands, although in fairness Twitter was not designed as a CRM channel, therefore it has no responsibility to look out for such problems.

However, as Twitter continually looks towards brands to bolster its revenue strategy, it’s likely that it will not only expand this function, but also charge for it, a charge that i’m sure the majority of brands would be willing to pay.

In this instance O2 responded to a breaking issue well, and tried to be open by answering as many of its customer tweets as possible, but this was quickly curtailed when Twitter would not allow any further tweets that day.

This issue, and the others that are sure to follow, further highlight a real flaw in many social CRM strategies, while also drawing attention to a revenue opportunity for Twitter. If Twitter is not already working on a paid response they are likely to be jumping on it rapidly in the near future.

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A Google a day puzzle

January 17th, 2012

If you haven’t seen this before a Google a day is a great way to stimulate your brain first thing in the morning! It is basically a puzzle you have to solve via Google search, and there is a new puzzle every day to answer.

To make sure you cannot cheat, Google uses Deja Google – “A wormhole inspired time machine that enables you to solve today’s puzzle spoiler free by searching the Internet as it existed before A Google a Day launched“.

Today’s question is:

Who was the first American president known to have sworn his oath of office on a book other than the Bible?

To help you enhance your search understanding, use Google Inside Search, which is a Google site with the latest search features, tips and tricks.

If you’re really into a Google a day, there is a Chrome app available here, or I would also suggest you try out pokki, which is a desktop platform allowing you to install various apps to it, including one for ‘a Google a day’.

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Wikipedia 24 hour black out – a protest against SOPA and PIPA

January 17th, 2012

Wikipedia has announced that it will be holding a 24 hour blackout for its English language site from 05.00 UTC on Wednesday, January 18. You can read the statement from the Wikimedia foundation here and press release here.

The statement confirms: “In an unprecedented decision, the Wikipedia community has chosen to blackout the English version of Wikipedia for 24 hours, in protest against proposed legislation in the United States - the Stop Online Piracy Act (SOPA) in the U.S. House of Representatives, and PROTECTIP (PIPA) in the U.S. Senate. If passed, this legislation will harm the free and open Internet and bring about new tools for censorship of international websites inside the United States.”

This means that on Wednesday any visitors to Wikipedia (There are believed to be around 100 million English-speaking Wikipedia users) will only have access to an open letter encouraging them to contact the U.S. Congress (or local authority outside of the U.S.) in protest.

Some have said that the blackout is unnecessary because a major target of the protest, SOPA (the Stop Online Piracy Act), has already been halted by opposition from the White House, but Jimmy Wales, the co-founder of Wikipedia, said the blackout would go ahead anyway, by tweeting: “PIPA is still extremely dangerous,”

PIPA (or the Protect Intellectual Property Act), is still under consideration by the Senate, and has stirred many of the Web’s vocal commentators into action. Jimmy Wales also tweeted.

This is going to be wow. I hope Wikipedia will melt phone systems in Washington on Wednesday. Tell everyone you know!”

“My goal is to melt switchboards!,”

“We have no indication that SOPA is fully off the table. We need to send Washington a BIG message.”

The user-generated news site Reddit and the blog Boing Boing have also said they will take part in the blackout.

So why such a response to the acts? Well, SOPA and PIPA plan to impose responsibilities on websites such as Wikipedia to check that no material they host infringes copyright. Under current laws if websites remove pirated content when they are notified by the copyright holder they are not liable for damages.

The proposed laws also make it easier for American copyright holders to cut off access to foreign websites hosting unlicensed copies of films, music and television programs, which has recently been evidenced by the case of an English student, Richard O’ Dwyer, who is accused of creating a website that provided links where people could illegally access film and documentary material.

He now faces 10 years in jail for operating a website that U.S. authorities say hosts links to copyrighted material after a judge ruled that the 23 year old can be extradited to the US.

He is arguing that under the so-called dual criminality rule, since he has not been charged for an offence in the UK, the US has no right to extradite him.

The U.S. SOPA and PIPA legislation has been backed by major media owners, including Rupert Murdoch, and opposed by the giants of Silicon Valley, including Google and Facebook.

On Friday the White House said it would not approve key parts of the SOPA bill, which means it will need to be re-written and proposed. A statement from the Whitehouse said the provisions for blocking foreign websites “pose a real risk to cyber security“. And later confirmed : “Any effort to combat online piracy must guard against the risk of online censorship of lawful activity and must not inhibit innovation by our dynamic businesses large and small,”

This brought a reaction from Rupert Murdoch over the weekend, who called Google a ‘piracy leader‘ and suggested ‘Barack Obama had thrown his lot in with Silicon Valley Paymasters’, to which Google replied:

“This is just nonsense. Last year we took down 5 million infringing web pages from our search results and invested more than $60 million in the fight against bad ads.

“Like many other tech companies, we believe that there are smart, targeted ways to shut down foreign rogue websites without asking US companies to censor the Internet.”

Further information on the Wall Blog.

Jimmy Wales has urged us to take action: “Today Wikipedians from around the world have spoken about their opposition to this destructive legislation.

“This is an extraordinary action for our community to take - and while we regret having to prevent the world from having access to Wikipedia for even a second, we simply cannot ignore the fact that SOPA and PIPA endanger free speech both in the United States and abroad, and set a frightening precedent of Internet censorship for the world.

“We urge Wikipedia readers to make your voices heard. If you live in the United States, find your elected representative in Washington (https://www.eff.org/sopacall). If you live outside the United States, contact your State Department, Ministry of Foreign Affairs or similar branch of government. Tell them you oppose SOPA and PIPA, and want the internet to remain open and free.”

There is an argument to say Wikipedia should remain impartial, but this is very difficult when its core focus will be so badly affected by the proposed legislation, and I support its stand to raise awareness of the issues.

To get further detail, pleased read the Telegraph’s overview of the story

Or the BBC has a good round-up.

Mashable also offers a good run down of the U.S. Government’s position.

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Google changes the rules and upsets Twitter, among others

January 12th, 2012

Earlier this week Google announced a number of changes, which apply to the U.S. only at this stage, and are designed to accelerate personal search, and move towards social search.

The three changes fall under the following categories:

First: Personal results, aimed at helping you to find more relevant to…well…you.
Second: Profiles in search, meaning you can more easily identify people you’re close to or want to follow.
Third: People and pages, which focuses on helping you to find profiles and Google+ pages related to memes or topics of interest.

The additions offer more meaningful ways to connect with people around you, straight from the search results.

This all sounds well and good, and personalising and or customising results to be more relevant can only be more positive, can’t it?

Many commentators such as the Guardian and BBC have picked up on the other side effect of these changes which is to make Google+ much more relevant. For example, when you search for information, particularly about individuals, results from the social network will be prominently displayed on the first page of results, assuming you are a member.

That makes Google+ a much more attractive social network, as users will see fewer results from outside it when they search for information.

As you might expect, Twitter has offered its opinion on the issue, as it has perhaps the most to lose. Twitter’s lead lawyer, Alex Macgillivray, called it a “bad day for the internet“, and suggested - as a former Google employee - that there would have been dissent internally “at search being warped this way“.

Twitter later made a formal statement: “For years, people have relied on Google to deliver the most relevant results any time they wanted to find something on the internet.

“As we’ve seen time and time again, news breaks first on Twitter, as a result, Twitter accounts and tweets are often the most relevant results. We’re concerned that as a result of Google’s changes, finding this information will be much harder for everyone. We think that’s bad for people, publishers, news organisations and Twitter users.”

Others have also criticised the change, Danny Sullivan of Search Engine Land commented: “Search engines are supposed to send you away to the best information, even if they don’t have their own in stock. Google has previously been excellent at providing links to the most suitable information.

“Today’s change is one of the few times where I’m thinking ‘What the hell are you doing, Google?’

Getting to the heart of the matter, Google was always going to find a way to move its social network, which is so far behind the game, to the front. Its best strategy to achieve this is to link its social network more closely to its search engine, which is after all the most popular in the U.S and Europe. But is that fair?

Google’s decision to favour Google+ posts which would not rank highly by its normal criteria (defined by the number of “authoritative” pages on the web linking to it) could suggest that it is favouring its own product in order to grow it more quickly. That in turn could breach antitrust (or competition) laws.

Twitter and Facebook content does not generally appear in Google search results because neither site provides Google with unlimited access to their content.

Twitter formerly had an agreement in which Google paid for access to index its database directly, but Twitter chose not to renew the agreement, according to a statement placed on Google+ by an official Google account, which said it was “a bit surprised by Twitter’s comments” because “they chose not to renew their agreement with us last summer“.

Although these changes are likely to head to Europe eventually, the Guardian piece suggests Google may have to think twice about introducing the changes over here because it has a greater share of search in European countries, meaning a ruling on it affecting the market is more likely, and also if the changes extend to results on Android phones, then it may face more urgent calls for an antitrust investigation.

This wouldn’t be the first time that there has been a call for Google to be investigated on such grounds, but if these changes do come to Europe as expected, we could be on the verge of a few interesting legal actions.

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YouGov 2012 consumer technology predictions

December 20th, 2011

YouGov has announced its 2012 predictions for UK consumers’ consumption and behaviour around Smart TV, smartphones, Facebook, digital newspapers and digital radio. The findings originate from a multi-country study, carried out in November 2011 with almost 13,000 respondents.

The headline statistics include:
o 15% of UK consumers say they will own a Smart TV within the next 12 months
o 86% of smartphone users ignore advertising on mobiles
o 60% of UK online population now use Facebook more than once a day
o 24% of tablet users access the web whilst in bed
o Just over one in five (22%) of 18-24 year olds have listened to the Radio via a portable radio set (including DAB)

As you can see, surprisingly only 15% of UK consumers said that they expect to purchase a connected, or ‘Smart’, TV within the next 12 months. However, that figure may not tell the whole story as people are already connecting their TV to the web via external devices, including games consoles such as the Xbox 360 and PS3, along with ‘plug in’ boxes such as Boxee.

The biggest driver for adoption of Smart TV is the availability of content, as YouGov reports 36% of UK respondents aged 18-24 said that they would make a connected TV purchase if they could watch their favourite TV content on-demand.

Dan Brilot, media consulting director at YouGov, said: “Smart content producers must continue to develop their services to make it increasingly easier for people to watch what they want, when they want, wherever they want.”

Moving onto smartphones, 40% of people own smartphones in the UK, increasing to 68% within the next upgrade cycle. However, YouGov say 86% of smartphone users ignore advertising on mobiles, meaning engagement via mobile must be useful and relevant - not broadcasted, or in other words: advertising.

In terms of digital newspapers and tablets, Russell Feldman, associate director of technology at YouGov says: “The decline of print media sales will only accelerate during 2012. Tablets and apps will increase the digital cannibalisation of paper copies as they erode more of those previously inaccessible locations to digital devices; for example, nearly one quarter (24%) of tablet users access the internet whilst in bed.

Tablet usage is still small (currently only 4% of the UK population own one) but that number is growing and, as the market develops and new entrants such as the Kindle Fire gain traction, newspaper and magazine publishers will focus more effort on specific tablet versions of their publications.

Finally, DAB take-up hasn’t quite lived up to the initial hype. To make this happen, Dan Brilot, media consulting director at YouGov says: “The radio industry needs to educate and support consumers as they become accustomed to new ways of listening and to ensure that reach and frequency opportunities are truly maximised - not lost - in the digital age.”

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Britain shows strong digital culture

December 14th, 2011

Ofcom’s sixth International Communications Market Report was announced today and it shows Britain’s digital culture is developing well against other countries.

According to the report, covered in the Guardian, the British spend more time online, own more Smartphones and digital video recorders and watch more television over the internet than any country on the Continent.

Breaking down the statistics, apparently the British spend an average of 746 minutes (more than 12 hours) a week online, longer than any of the world’s major economies except the U.S.

However, the UK tops the charts in terms of Smartphone use and online and digital TV viewing, as 46% of all British mobile subscribers are Smartphone users, more than in Europe and the US and up from 24% the year before. The next highest was Spain, with 45% penetration.

61% of young mobile subscribers have been able to acquire Smartphones, and one quarter of 55 to 64 year olds claim to access the internet from their phones.

The UK also tops the online TV viewing figures with 27% of Britons watching TV online every week, higher than the U.S., where the total is 23%. UK digital TV penetration is also the highest in Europe, with 97% of households receiving more than the five basic channels. France is the second highest, with 93%, and America at 87%.

The UK  leads the field in buying online, as 79% ordered goods and services. The Dutch are the next most likely to make it to the checkout, with 74% spending online.

Considering our lower broadband penetration (The UK’s broadband penetration is 74%, where as France has reached 77%, Canada 83% and the Netherlands 89%) and often patchy mobile service outside of urban centres, the figures show that the British as a nation have not only accepted digital, but are making it a strong part of our culture in terms of communication, leisure and retail habits.

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Print page text - not unwanted page elements

December 8th, 2011

We all like something that makes life a little easier, and one thing that frustrates me intensely is printing out web pages. You always get the pictures, adverts, links, and some times hundreds of comments if the post is a popular one, basically all the stuff you don’t need!

Don’t fear, help is at hand thanks to a handy little article in LifeHacker. They suggest a Chrome app called Print Friendly. They say: “Print Friendly for Chrome gives you control over what makes it into the print out and what doesn’t” The good thing about it is that it moves most of the useless stuff for you, it then shows you a final version, which you can tinker with, before finally hitting print.

Print Edit, is a similar product for FireFox. Print Friendly can be found for free at the Chrome Web Store.

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CMI B2B Content marketing report review

December 6th, 2011

The B2B Content Marketing: 2012 Budgets, Benchmarks and Trends report, was published yesterday by the Content Marketing Institute in the U.S., led by its founder Joe Pulizzi.

We usually try to focus on UK/Euro stats on this blog, but I found the data in this piece to be particularly interesting. You can see the full findings here, and the sample of 1,092 marketers was taken in August 2011, and focused on how well B2B marketers are achieving their goals when it comes to content marketing, and how much has changed in the past year.

The 2011 study follows the 2010 piece of the same name and therefore allows for comparison between this year and last year.

In brief, the report shows:

Usage and effectiveness
• 9 out of 10 organisations market with content marketing
• On average, B2B marketers employ eight different content marketing tactics to achieve their goals. The most popular tactics are: (see graph below for full breakdown)
- Article posting (79%)
- Social media (excluding blogs) (74%)
- Blogs (65%)
- eNewsletters (63%)
- case studies (58%)
- in-person events (56%)

• Marketers are using content marketing to support multiple business goals, led by:
- brand awareness (69%)
- customer acquisition (68%)
- lead generation (67%)
- customer retention/loyalty (62%)

The least widely employed goal for content marketing is lead management/nurturing.

Measurement
• Web traffic is the most widely used success metric (58%). However, this year, sales lead
quality (49%) is the second-highest used metric (versus direct sales in the previous study).

Budget
• Marketers, on average, spend over a quarter of their marketing budget on content marketing
• 60% report that they plan to increase their spend on content marketing over the next 12 months.

Challenges
The greatest reported challenge is “producing the kind of content that engages prospects
and customers
” (41% of respondents). And nearly the same percentage of respondents in 2011 as in 2010 reported that “producing enough content” (20%) and “budget to produce content” (18%) are their greatest challenges in content marketing.

While in-person events and webinars are still seen as the most effective tactics, on average, the following ranked notably higher in perceived effectiveness compared to the 2010 report:
• Blogs: 45% increase
• Case studies: 32% increase
• Videos: 36% increase
• Webinars/webcasts: 25% increase

The challenges section will resonate with many marketers, identifying points that will continue to test brands of all types, specifically: producing the kind of content that engages prospects and customers, producing enough content, and budgeting to produce content, which is difficult enough without considering those organisations that have little or no experience of the resource required to produce high quality and engaging content in a consistent way.

Of the tactics, it was a bit of a shock to see blogs coming out highest in terms of perceived effectiveness compared to 2010. The general trend has been away from blogs, but perhaps this is a reflection of quality beginning to tell over quantity, as those that have actually put the effort into B2B blogs are now seeing the return over the ‘me too’ blogs that see very little in either response or effort.

Measurement is always a prickly subject, and it was no surprise to see web traffic ranking as the most popular, although sales lead quality is beginning to show a little more relevance for those B2B businesses putting the time in to identify metrics and better understand opportunities and outcomes.

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Mobile years and wallets disappearing

November 30th, 2011

It’s about that time of the year when we start seeing predictions for the year ahead. Top of most predictions lists for the last 5-6 years, if not longer, has been “the year of mobile” and of course that hasn’t quite come to fruition. However, next year…

Joking aside, we are certainly getting closer to the much heralded explosion of mobile, and it’s perhaps supporting services such as ‘digital money‘ that will make it more of a reality than the development of handsets alone.

As you might have seen, PayPal recently predicted that we won’t need cash in its traditional form by 2016, as our mobile will handle the payments for us. In fact, Carl Scheible, managing director of PayPal UK commented in the ‘Money: The digital Tipping Point‘ report that: “Children born today will become the UK’s first ‘cashless generation. It will be completely natural for them to pay by mobile.”

Now of course this is nothing new, mobile payments have been talked about almost as long as the ‘year of the mobile‘ but if anything this timeframe seems a little excessive, after all we can already pay for our food at Pizza Express using an iPhone app, and there are many more examples coming. We’re a long way from abandoning our wallets, but the change can be implemented relatively quickly from here.

Most of us can now swipe our cards over a terminal in a shop to pay for anything up to £15, and from January this will include Oyster card readers, which will accept direct payment. Therefore, bringing contactless card technology and mobile technology together is hardly a major leap, especially as the next generation of mobile phones are being built with near-field communication (NFC) chips, which will also enable contactless payment and offer the advantage of digital loyalty cards, promotional offers and receipts held on phones.

PayPal offers further evidence of the move to leave our wallets at home with stats that show 45m people in the UK use a mobile phone and over a third of mobile users surveyed have used the mobile internet to buy something from a retailer’s website.

The big issue beyond the technology is of course the security, but with advances in device-based, or embedded security, i.e. security built into the device and not sat on top in the form of after sales software, the future is bright. I would estimate that we will be ditching our wallets before 2016, and who knows the year of mobile may have even arrived by then.

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