Filed under: Industry, Google (GOOG), Yahoo! (YHOO), Marketing and advertising, Viacom (VIA), News Corp’B’ (NWS)

There have been rumors for months that Yahoo! (NASDAQ: YHOO) would cut costs, and probably a lot of people. Some of those estimates have been as high as 3,000. Now, The Wall Street Journal is reporting that the specifics of the move might be announced during the earnings release later this week. According to the paper, “The exact number of jobs to be eliminated remains unclear, though it is expected to exceed the 1,000 jobs that Yahoo announced it was cutting in January.”

Forget Yahoo!. The news means that an entire portion of the media industry that was recently viewed as relatively immune to an economic downturn is now under siege. For the last three years, analysts have stated they expected Internet display advertising to grow at double digits rate for the next half a decade. The Internet has a relatively small portion of the ad market compared with media like Television, but it is viewed by just as many people. Display advertising should, therefore, be growing faster than other forms of marketing simply to catch up to its fair share of the consumer media audience.

Two things happened to derail the conventional wisdom. The first is that no one thought that even a recession would significantly damage Internet revenue growth. It has been viewed as a more efficient, targeted way to reach people. The second is that few people saw that Google (NASDAQ: GOOG) would take up such a big amount of overall World wide web marketing budgets. Its earnings show that it is sucking all of the air out of the room of on the internet budgets. Search advertising is apparently even more effective than display.

If Yahoo!, which is the company with the largest share of display ads is hurting so badly, what does that mean to the World wide web divisions of large media conglomerate like News Corp (NYSE: NWS), which owns MySpace, or Viacom (NYSE: VIA)? It means no good.

Douglas A. McIntyre is an editor at 247wallst.com.

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Filed under: Google (GOOG), Marketing and advertising

Along with the rest of the tech industry last week, Google, Inc. (NASDAQ: GOOG) saw its stock price plummet. In the last two weeks, GOOG shares have seen a tailspin of $100 per share knocked off. While that would seem cause for concern for some companies, remember that Google fundamentally is still very strong: very little debt and billions in cash for just about anything it wants.

One thing it appears to want is more advertising revenue. In fact, the company made a move last week that we should all anticipate to see with the majority of Google’s products in the next year or two: ads next to its web services. Starting with Google Maps, the company started supplying text advertising to the bottom of its Google Maps service. Add to that the “click-to-buy” buttons showing up on some YouTube videos and Google seems to be using the trial-and-error method to see how it can expend it advertising revenue reach beyond search.

TechCruch reported that comScore’s rating for Google Maps in August was 131 million unique visitors with 1.3 billion page views. It makes sense for Google to tap advertising into this product just based on those number alone. but, it can’t just think plugging relevant text ads (as in search) will magically work. Google could stand to get innovative and find a way to really make interactive advertising work on Google Maps. If it can repeat the success of innovation within different ad models in its wide array of products, Google will be unstoppable. To many, it’s already there. but, there is still room to grow.

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Filed under: Products and services, Marketing and advertising, Target Corp. (TGT)

Target Corp. (NYSE: TGT) has started selling a Blu-ray disc player for what’s probably the lowest retail price you can find one at: $229. I’ve stated many times in the past that this new format won’t catch on with consumers until retail prices routinely get to less than $200, so this new price from Target is nearing that mark. Of course, panicked U.S. consumers probably won’t be buying any Blu-ray players the remainder of this year as they watch what wealth they did have evaporate in the markets.

The Target model is an Olevia brand player (yes, that’s an off-brand), which marks a $70 reduction from a current Sony Blu-ray player that is being sold alongside the Olevia player for $299. Still, unless there’s some breakthrough difference that Blu-ray manufacturers and retailers can market correctly, most U.S. consumers will stay with their progressive-scan DVD players that sell for $75 or less and have a perfectly fine picture (although not true high-definition).

So, perhaps sometime in late 2009 — roughly a year from now — the market will see $99 Blu-ray players and regular consumers may finally feel the urge to purchase one and begin re-purchasing their movie libraries in yet another format. That is, until super-duper, high-fidelity Purple-ray players hit the market sometime in 2014 and the cycle repeats yet again. Perhaps by then, we’ll all be out of this economic funk and won’t be protecting our cash hoards, however tiny they may be by then.

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Filed under: Products and services, Google (GOOG), Marketing and advertising

If you’re a Google, Inc. (NASDAQ: GOOG) user, you probably enjoy the relatively high quality of the company’s products at t cost of — zero. How does Google give all this away for free, you ask? It’s the same as any other company on the web that features quality products at no cost. The cost is your privacy. You are paying, and paying large.

Do you mind? It’s hard to state what kind of personal, financial and psychological profile Google has on millions of its customers, but you can believe that this large marketing database exists. How Google manages this will be the most important decision in the company’s young, decade-old existence, but the question remains: do many of us sell our souls for freebies? Each time you sign up for something free but fill out a complete demographic profile to get it, you’re selling out. Google is doing nothing different — but its scale is so huge that all this data controlled by one entity does cause for concern among the informed consumer inside us all. It should, anyway.

Google, like anyone in business who is savvy, knows that giving away products or services for “free” on the front end is made up for on the back end. In other words, would you rather pay for every single product or service you use and not have any entity know how to market to you — or would you rather get a good majority of your products and services at no cost but with the attached condition that there are lots of entities out there that know you better than you know yourself?

More importantly, they know how to push your exact buttons to have you behaving like a robotic consumer or a slot machine junkie? With the U.S. consumer responsible for two-thirds of economic activity (as tiny as that’s at the moment), the harnessing of this kind of power becomes clear. Okay, I’m off to perform a Google search…

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Filed under: Television, Magazines, Marketing and advertising, Media World

It’s being reported that Playboy’s (NYSE: PLA) Hugh Hefner’s relationship with Holly Madison is over. Madison, as you probably know, was Hefner’s head girlfriend, but he has two others as well: Kendra Wilkinson and Bridget Marquadt. The four of them star in a reality show called The Girls Next Door, which runs on the E! channel. It’s a pretty fun show, even though it does make me maddeningly envious of Hef’s lifestyle. That aside, it seems to be a decent brand ambassador for the Playboy image. Unfortunately, the popularity of the show hasn’t been enough to offset losses at the media company. Playboy’s stock currently sits below $3 a share. It is the exact opposite of one of Hef’s playmates: downright depressingly hideous.

Well, I can’t really comment as to how the Hefner/Madison affair will turn out. Will she go back with him? Is this just a publicity stunt? I simply don’t know. However, I would envision that, with Playboy’s stock in the dumps, a breakup might be an event that could be exploited to help out the company. Let’s face it: the whole three-girlfriend thing is pretty much an orchestrated machine anyway. So, if Madison truly does feel like she’s ready to move on with her career, I think Hef should clean home and get rid of the other two girls as well. Then, he could go on a search for three new girls next door (or maybe he should search for more, why stop at just three?). It could be an integrated media campaign spanning the magazine, the website, and a new reality show.

If CEO Christie Hefner played her cards correctly, she might drum up a lot of interest in the Playboy magazine with a scheme like this. The flagship publication is what’s killing the stock right now. Until that turns around, I don’t think the stock is going to be a viable investment idea. What she could do is put together a search that would feature hundreds of prospects in the publication. They might then stay at the mansion and get weeded out through various tasks as is typical of any reality show. An adult version of the reality show could run simultaneously on the Playboy cable offerings. For all I know, maybe he’s run searches for girlfriends in the past. If so, he needs to do it again.

Something has to be done to get Playboy back on track. This won’t do the trick by itself, of course, but I think it would nevertheless constitute a cool effort that would open up new marketing opportunities. Manufactured or not, I’m sure Hef enjoys his ladies. But come on, Hugh, isn’t it time for some new blood? And don’t you want to do something to help out your stock? There are a lot of shareholders out there who are depending on you, because, even at the low single-digit price level, I don’t think the stock is ready to rebound yet.

Disclosure: I don’t own any company mentioned; positions can change at any time.

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Filed under: Products and services, Google (GOOG), Marketing and advertising

Google, Inc.’s (NASDAQ: GOOG) YouTube continues to take the lion’s share of the online video market. Although startup Hulu.com — which will broadcast the U.S. Presidential candidate debate live tonight — has come on strong, YouTube has it. Everyone from teens with $69 digital cameras to professional videographers are uploading video footage to the site.

Google announced recently that it was upping the file size of uploaded video to the site as well — by a factor of 10. Going from 100 Megabytes to 1 Gigabyte per uploaded video is extraordinary in and of itself, but this will make YouTube all the more attractive to those who want to take rather exhaustive video and upload it for all to see while not being constrained.

For example, five minutes of video on a standard digital camera (just an average, of course) will easily eat up 100 Megabytes of storage. Since we’re not all video compression experts, Google — with this change — has just granted its on the web video universe to expand in a large way.

In addition to the video file size increase, YouTube’s new uploader will grant multiple file uploads at the same time. This is also a rather big change from the “upload and wait” scenario of the past. Although Google surely wants to make more money from the huge amount of video viewed each minute on YouTube, giving regular customers the ability to have more massive videos (and several at one) uploaded should just push it that much further in front of the online video pack. What it needs now is to lift the 10-minute limitation for non-partners. But then again, that would invite a whole new universe of copyright piracy. Maybe.

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Filed under: Marketing and advertising, Best Purchase (BBY)

Ideal Buy, Inc. (NYSE: BBY) is ditching the warehouse-blue store format that it’s grown famous for. Well, not really — but in some newer stores in Denver, that cheery blue is being supplemented by earth tones and skylights as the largest consumer electronics chain in the U.S. sets its sights on the female demographic. That’s right — the anti-gadget crowd who rolls both eyes when guys begin salivating over that 50-inch flat screen television.

Women do have a large (indirect) impact on consumer electronics sales, although the merchandising most retailers push definitely fits the male buying persona. So, instead of the gray, techie feel where those large flat-panel displays generally reside, Ideal Buy will be placing some (if not all) of those TVs into staged rooms that look like a set from a typical home. What a superior way to visualize that new purchase than by seeing how it looks in the real world, right? Ever sold a home and staged it to sell? Same thing.

Ideal Purchase even asked 40 local female customers to work with its employees to help them form ideas. In other words, merchandise your products in a way that makes them comfortable to be around and use, not as cold hard hunks of steel, plastic and chrome. Serving the needs of women shoppers better is a perfect way to grow sales in this economic state (if that’s even doable) — Ideal Buy certainly has the right idea here. There’s nothing better than involving your customers in decisions that affect how they buy, right?

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Filed under: Industry, Competitive strategy, Google (GOOG), Microsoft (MSFT), Yahoo! (YHOO), Marketing and advertising

Yahoo!’s (NASDAQ: YHOO) shares hit another multi-year low, trading down to $15.54, off by more than half from its 52-week high of $34.08. That high was driven by a buyout offer from Microsoft (NASDAQ: MSFT), but Yahoo! now trades well below the level where it changed hands before Redmond came calling.

Yahoo!’s market cap is below $22 billion. By some estimates its ownership of Yahoo! Japan and Chinese e-commerce company Alibaba are worth $10 billion. That means that Yahoo!’s core business trades at only two times sales, a remarkably low figure.

Two fears have pushed Yahoo! down. The most obvious is that its share of the search market in the U.S. has fallen to about 20% and continues to drop. It might form a partnership with Google (NASDAQ: GOOG) to push up its revenue in this arena, but the deal is being challenged by antitrust authorities.

The major reason behind Yahoo!’s drop is one that would tend to push the shares down more over time. Wall Street has believed that world wide web display advertising, Yahoo!’s key revenue business, would continue to grow at rates of more than 20% for the next several years. Current evidence is that many marketers do not think about online display ads to be very effective, maybe even less effective than TV. Some big world wide web firms have watched their growth rates drop to single digits.

Yahoo! may be up against a problem that has no simple solution.

Douglas A. McIntyre is an editor at 247wallst.com.

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Filed under: Google (GOOG), Marketing and advertising

Not a day goes by that the market is not obsessed with the latest move or product launch at Google (NASDAQ: GOOG). Most recently, the media has been all over the company’s energy initiatives and its Android smartphone launch. To a massive extent, the coverage takes attention away from the fact that the recession is slowing the company’s size growth. But very few people seem to spend a lot of news cycles on that.

Google is currently having an internal debate about whether it should spend money to advertise its own brand and products. It is probably a waste of money because the company is already in a number of businesses that drive up its expenses without bringing in a dime.

According to The Wall Street Journal, “The search giant has recently held discussions with several Madison Avenue agencies, including Wieden + Kennedy and the boutique firm Taxi New York, about new efforts to promote some products, according to people familiar with the matter.”

The question is what does Google have worth promoting? It already owns the search business, so marketing that product would seem to be a waste of money. Its other major products for searching images, news and maps don’t bring in any revenue, so advertising them would appear to be burning money.

A lot of corporate advertising is meant to make management feel good. Google does not need name recognition and it is hard to see why the search company would want to promote one of the most famous brands in the world or any of its free offerings.

But Google does have cash to spare, and that usually drives a temptation to spend it.

Douglas A. McIntyre is an editor at 247wallst.com.

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Filed under: Rants and raves, Marketing and advertising, Sprint Nextel Corp (S)

No wonder Sprint Nextel Corp. (NYSE: S) is losing customers fast. The third-largest wireless provider in the U.S. announced a new “MyMoneyManager” program last Thursday that sounds like the nicest thing for your Sprint phone since sliced bread. The only problem is this: the new downloadable application meant for your Sprint handset lists compatible Sprint cellphones that looks like the “who’s who” of the Sprint handset lineup from sometime in 2007. Umm, Sprint: it’s October 2008.

This is the kind of thing that not only makes Sprint subscribers confused and angry, but gives a terrible PR black eye to a wireless company that has lost hundreds of thousands of customers in the current year. Sprint should work hard to announce new applications that actually are meant for and usable by its current product lineup — not from outdated models that are not even for sale any longer.

The reason customers have not embraced using applications on their cellphones is due to the “works there/doesn’t work there” framework that the wireless industry just can’t seem to figure out. Unless it’s universal across a product line, why even bother? Sure, there are lots of wireless phone manufacturers and models, all of which are different. Add to that the protectionist tendencies wireless providers have and it’s no wonder why consumers find it hard or impossible to do things on these technologically-advanced phones that marketing departments want them to. With examples like this, it’ll never happen. Can you hear me? Good.

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