Sunday, July 31, 2005
Fraud Prevention Steps Taken at eBay
Online auctioneer eBay this week strengthened rules to prevent fraud on its site, as cases continue to emerge of disreputable sellers misrepresenting the products they market there. One allegedly fraudulent eBay merchant was sued this week by the Missouri Attorney General, Jay Nixon, after an individual, Michael D. Pickens, allegedly sold burned clothing purported to be new merchandise from Banana Republic and other leading retailers. "Michael Perkins duped consumers who thought they were buying resalable clothing, but got stuck with bales of trash instead," the attorney general said, adding that refunds need to provided "right away" to consumers.
Increasingly, eBay is worried that consumers are having a "bad buying experience" in the words of PayPal spokeswoman Amanda Pires. Not only are there allegedly fraudulent merchants -- as averred by the Attorney General of Missouri -- some vendors on the site who claimed they would accept credit cards for payment were not doing so. What's more, there were concerns that there was "shill" bidding in some of the auctions. That is, small merchants were having their families bid on the products to boost the final sale price. This week, eBay took steps to remedy the problems.
According to Steve Oglethorpe, senior marketplace policy manager at eBay, merchants who engage in shill bidding will have their accounts suspended. "Shill bidding is bidding that artificially increases an item's price or desirability," said Oglethorpe. "It includes bidding by individuals with a level of access to information about the seller's item not available to the general consumer. Shill bidding unfairly manipulates item prices and undermines trust in the marketplace, and is prohibited on eBay." Oglethorpe said that some merchants at eBay may be having family members, roommates, or even employees, engage in the bidding, and he had issued a warning to merchants to tell them to tell their associates to abandon the practice.
Another problem was that some merchants were refusing to accept credit card payments from customers, even though the eBay site itself advertises that consumers are free to do pay with the cards. The reason some merchants on eBay don't want to honor the cards is that they have low-profit margins on many products, and credit cards, like Mastercard and Visa, charge between 1.9 percent and 2.9 percent of the value of the transaction to process the payment. In addition to those changes, eBay is updating some categories of merchandise sold on the site, including business and industrial, consumer electronics, eBay motors, health and beauty, jewelry and watches, sporting goods, sports memorabilia, and toys and hobbies.
"As always," eBay told merchants, "you can move your item to another category by revising your listing, if it has not received a bid and there are more than 12 hours left in the posting." But the problem of fraudulent sellers may persist and continue to require outside help from law enforcement. Nixon, the attorney general of Missouri, indicates that he received complaints totaling "in the double digits" from consumers about the allegedly bogus merchandise said to have been offered by Michael D. Pickens, of Bethany, Mo. According to a lawsuit filed by Nixon, consumers placed orders on eBay, and then, to fulfill the orders, Pickens hired a supplier of old clothing intended for donation to poor countries. Pickens had him ship the shoddy goods, including, reportedly, fecal matter and broken glass bits, directly to the buyers. If convicted, Pickens could be fined US$1,000 per violation, the attorney general said.
For more information, please visit Guardian eCommerce.
Increasingly, eBay is worried that consumers are having a "bad buying experience" in the words of PayPal spokeswoman Amanda Pires. Not only are there allegedly fraudulent merchants -- as averred by the Attorney General of Missouri -- some vendors on the site who claimed they would accept credit cards for payment were not doing so. What's more, there were concerns that there was "shill" bidding in some of the auctions. That is, small merchants were having their families bid on the products to boost the final sale price. This week, eBay took steps to remedy the problems.
According to Steve Oglethorpe, senior marketplace policy manager at eBay, merchants who engage in shill bidding will have their accounts suspended. "Shill bidding is bidding that artificially increases an item's price or desirability," said Oglethorpe. "It includes bidding by individuals with a level of access to information about the seller's item not available to the general consumer. Shill bidding unfairly manipulates item prices and undermines trust in the marketplace, and is prohibited on eBay." Oglethorpe said that some merchants at eBay may be having family members, roommates, or even employees, engage in the bidding, and he had issued a warning to merchants to tell them to tell their associates to abandon the practice.
Another problem was that some merchants were refusing to accept credit card payments from customers, even though the eBay site itself advertises that consumers are free to do pay with the cards. The reason some merchants on eBay don't want to honor the cards is that they have low-profit margins on many products, and credit cards, like Mastercard and Visa, charge between 1.9 percent and 2.9 percent of the value of the transaction to process the payment. In addition to those changes, eBay is updating some categories of merchandise sold on the site, including business and industrial, consumer electronics, eBay motors, health and beauty, jewelry and watches, sporting goods, sports memorabilia, and toys and hobbies.
"As always," eBay told merchants, "you can move your item to another category by revising your listing, if it has not received a bid and there are more than 12 hours left in the posting." But the problem of fraudulent sellers may persist and continue to require outside help from law enforcement. Nixon, the attorney general of Missouri, indicates that he received complaints totaling "in the double digits" from consumers about the allegedly bogus merchandise said to have been offered by Michael D. Pickens, of Bethany, Mo. According to a lawsuit filed by Nixon, consumers placed orders on eBay, and then, to fulfill the orders, Pickens hired a supplier of old clothing intended for donation to poor countries. Pickens had him ship the shoddy goods, including, reportedly, fecal matter and broken glass bits, directly to the buyers. If convicted, Pickens could be fined US$1,000 per violation, the attorney general said.
For more information, please visit Guardian eCommerce.
Saturday, July 30, 2005
Credit Card Titans Cut Ties to CardSystems
Two credit card giants, American Express and Visa USA, are severing ties with the Atlanta-based credit card processor whose hacking incident left 40 million consumer accounts open to potential fraud. Within hours of the disclosure that Visa was seeking a replacement for CardSystems Solutions, American Express said yesterday it would no longer do business with the company beginning in October. The loss of two large clients marks another significant blow to the embattled CardSystems, which employs 25 in Atlanta and 90 at a Tucson, Ariz., processing center.
The company, which processed more than US$15 billion in transactions last year for Visa, MasterCard International, American Express and Discover Financial Services, already is at the center of two federal probes into its security breach. Tomorrow, John M. Perry, CardSystems' chief executive officer, is slated to appear before a subcommittee of the House Committee on Financial Services. Perry is one of several industry executives expected to testify. The hacking incident, which CardSystems discovered in May, included 22 million Visa and 13.9 million MasterCard accounts. American Express and Discover have not provided numbers. In an interview last month, Perry said the card information that was hacked was stored in what he called an "exception file," which contains accounts with transactions unable to be processed. The file contains account numbers, names and expiration dates, but not information used in identity theft, such as Social Security numbers or birth dates.
But both Visa and MasterCard said storing that information violated security agreements CardSystems has with both card associations. Visa sent letters to 11 banks that used CardSystems to process payments directing them to find a replacement firm by Oct. 31.
"Despite some remediation actions taken by the processor since the initial reporting of the data compromise, Visa cannot overlook the significant harm the data compromise and CardSystems' failure to maintain the required security protections has had on Visa member financial institutions and merchants, as well as the significant concerns it has raised for cardholders," Visa spokeswoman Rosetta Jones said yesterday in a statement.
"CardSystems has not corrected, and cannot at this point correct, the failure to provide proper data security for Visa accounts," she said. CardSystems executives, who were en route to Washington yesterday, could not be reached for comment on American Express' decision. Earlier in the day, the company issued a statement concerning Visa. "We are disappointed and very surprised that Visa has decided to take this action today, not only because of the impact that it will have on our employees, but the disruption that it will cause to our 110,000 merchant customers," the statement read. "We hope that Visa will reconsider." CardSystems said its systems were found to be compliant by Visa in June 2004, and that the company has "been in almost daily contact" with Visa since discovering the breach. "Since that time, CardSystems has taken significant steps to ensure that we could restore our compliance status with Visa by August 2005," the company said.
It is unclear whether MasterCard --- Visa's chief competitor --- or Discover will follow suit. MasterCard said it is requiring CardSystems to develop a compliance plan by Aug. 31, and it is holding weekly meetings with company executives. "As of today, we are not aware of any deficiencies in its systems that are incapable of being remediated," MasterCard spokeswoman Sharon L. Gamsin said in a statement. "However, if CardSystems cannot demonstrate that they are in compliance by that date, their ability to provide services to MasterCard will be at risk."
A Discover spokeswoman said the company is reviewing its relationship with CardSystems and is interviewing company executives. After that review, spokeswoman Jennifer Born said, Discover will decide whether it will continue its relationship with CardSystems. A deadline for that decision has not been set.
Brought to you by the Guardian eCommerce Privacy Seal Program.
The company, which processed more than US$15 billion in transactions last year for Visa, MasterCard International, American Express and Discover Financial Services, already is at the center of two federal probes into its security breach. Tomorrow, John M. Perry, CardSystems' chief executive officer, is slated to appear before a subcommittee of the House Committee on Financial Services. Perry is one of several industry executives expected to testify. The hacking incident, which CardSystems discovered in May, included 22 million Visa and 13.9 million MasterCard accounts. American Express and Discover have not provided numbers. In an interview last month, Perry said the card information that was hacked was stored in what he called an "exception file," which contains accounts with transactions unable to be processed. The file contains account numbers, names and expiration dates, but not information used in identity theft, such as Social Security numbers or birth dates.
But both Visa and MasterCard said storing that information violated security agreements CardSystems has with both card associations. Visa sent letters to 11 banks that used CardSystems to process payments directing them to find a replacement firm by Oct. 31.
"Despite some remediation actions taken by the processor since the initial reporting of the data compromise, Visa cannot overlook the significant harm the data compromise and CardSystems' failure to maintain the required security protections has had on Visa member financial institutions and merchants, as well as the significant concerns it has raised for cardholders," Visa spokeswoman Rosetta Jones said yesterday in a statement.
"CardSystems has not corrected, and cannot at this point correct, the failure to provide proper data security for Visa accounts," she said. CardSystems executives, who were en route to Washington yesterday, could not be reached for comment on American Express' decision. Earlier in the day, the company issued a statement concerning Visa. "We are disappointed and very surprised that Visa has decided to take this action today, not only because of the impact that it will have on our employees, but the disruption that it will cause to our 110,000 merchant customers," the statement read. "We hope that Visa will reconsider." CardSystems said its systems were found to be compliant by Visa in June 2004, and that the company has "been in almost daily contact" with Visa since discovering the breach. "Since that time, CardSystems has taken significant steps to ensure that we could restore our compliance status with Visa by August 2005," the company said.
It is unclear whether MasterCard --- Visa's chief competitor --- or Discover will follow suit. MasterCard said it is requiring CardSystems to develop a compliance plan by Aug. 31, and it is holding weekly meetings with company executives. "As of today, we are not aware of any deficiencies in its systems that are incapable of being remediated," MasterCard spokeswoman Sharon L. Gamsin said in a statement. "However, if CardSystems cannot demonstrate that they are in compliance by that date, their ability to provide services to MasterCard will be at risk."
A Discover spokeswoman said the company is reviewing its relationship with CardSystems and is interviewing company executives. After that review, spokeswoman Jennifer Born said, Discover will decide whether it will continue its relationship with CardSystems. A deadline for that decision has not been set.
Brought to you by the Guardian eCommerce Privacy Seal Program.
Thursday, July 28, 2005
All the Bandwidth You'll Ever Need
It's the Internet's favorite price point: zero. From software to movie trailers, the freebies just keep coming. Usually they're come-ons, designed to focus our eyeballs on digital advertisements. But some online giveaways are utterly devoid of strings, and utterly compelling. Information is often free; storing and transmitting it never is. Luckily, these online services are dirt-cheap for most of us. Your Internet service provider probably throws in free website hosting as part of your monthly subscription fee. People who want to set up their own Internet domains subscribe to independent hosting services. Some of these outfits will give you half a gigabyte of online storage for a mere US$10 a month. That's ample for most personal websites and blogs. Then there are companies like Blogger.com, which will host your blog for free. Blogger is owned by Google. With its billions of dollars in ad revenues, the huge search company can afford to be generous, especially with disk drive prices so low.
Even at retail, a gigabyte of data storage now costs about 75 cents; bought in bulk it's cheaper yet. And remember that most websites are mainly text, which takes up very little space. But although a good-size website, complete with pictures, might use up 10 megabytes, a single podcast can easily devour that much storage space. If you upload new podcasts on a regular basis, and maintain an archive of your older shows, you'll have hundreds of megabytes in need of a good home. It gets worse for video bloggers -- that small but growing band who use camcorders to chronicle their lives and times. Not many people are publishing their personal movies yet, but those who do must figure out how to store files that can easily hit 50 or 100 megabytes.
Then there's a problem most Web page hobbyists never consider -- the bandwidth factor. Web hosting services spend lots of money on their connections to the Internet. As usage increases, the hosting companies must buy faster, larger Internet connections. To cover the cost of all of this bandwidth, the companies set data-transfer limits on each account. Text-based sites rarely bump up against these limits. But any podcaster or video blogger with a sizable audience will soon hit his data-transfer limit, and receive a bill for excess bandwidth use.
So it's surprising to learn that only 28,000 Internet users have signed up at Ourmedia, a new Internet service that's giving away both storage and bandwidth, for personal use, at no charge. Any podcaster, text blogger or video blogger can sign up for a free account at Ourmedia.com and publish as much as he wants for as long as he wants. It sounds like a classic Internet come-on: Free bandwidth in exchange for a flood of on-screen advertisements. But Ourmedia's not driven by a quest for profit. It's the latest venture of the Internet Archive, an ongoing effort to catalog and preserve every document posted online.
Brewster Kahle, a veteran of the long-gone Cambridge supercomputer firm Thinking Machines, launched the Archive in 1996, with money earned from a successful Internet business venture. Today, the Archive, located online at www.archive.org, gets funding from multiple sources, including the National Science Foundation and the Library of Congress. It contains about 40 billion pages, spanning most of the Web's history. The Internet Archive is, alas, a mess. Its crude search tool is lousy for looking up files on specific topics. On the other hand, if you want to review past postings at a specific site -- say, CNN.com's coverage of the Sept. 11 attacks -- you'll find it here.
For all of its flaws, the Archive has made an excellent start at preserving our online history. It could do an even better job if more Internet users published their files here in the first place. Enter Ourmedia, an idea conceived by a couple of the Archive's biggest fans.
Journalist J.D. Lasica, author of the new book Darknet, cooked up the plan along with Marc Canter, co-founder of software company Macromedia. "We both saw that digital media had become so pervasive that people can pretty easily create this stuff," said Lasica, "but it's still pretty hard to share this stuff." So Lasica and Canter drew up a proposal for an eternal free hosting service. They successfully pitched it to Kahle as a way to enhance the Archive, at lower cost than the current method, which uses "spider" software to search for new Web pages. "We can bring you contemporary culture," Lasica told Kahle, "and we'll put it up on your servers." Pornography is banned from Ourmedia; so are files that violate copyright laws. Otherwise, anything goes.
Despite the Internet Archive's vast size, it had plenty of unused disk space. Which is why Internet publishers can publish their biggest, fattest multimedia files on the Ourmedia servers for free -- a price that Lasica said will never increase. That's easy to say with just 28,000 users. But after reading this, legions of readers will no doubt sign up, then tell their friends. Next thing you know, Ourmedia has several million users and a massive bill for storage and bandwidth. How can the company keep giving it away? "We're going to look for different additional partnerships," said Lasica. "We're already in discussions with Yahoo about that."
They don't just want money from the huge Internet company. Lasica and Canter want Yahoo and other companies to host portions of Ourmedia on their own computers. They hope to transform Ourmedia into a distributed storage system, housed in servers worldwide. Companies could donate unused server space and bandwidth, allowing the Ourmedia service to expand without limit. As for the indexing problem, Lasica is also talking to Blinkx.com, the company that recently launched a podcast search engine. Blinkx uses speech-recognition software to identify the words used in audio and video files. Then it indexes those words so you can look up podcasts and videos on any topic. With corporate financial and technical support, Ourmedia could become the Internet's richest and most user-friendly multimedia site -- and for publishers, definitely the cheapest. It's such an appealing vision that it's sure to enrich someone. Not Lasica, Canter and Kahle, perhaps. But certainly the rest of us.
Brought to you by Guardian eCommerce Site Approval And Privacy Seal Program.
Even at retail, a gigabyte of data storage now costs about 75 cents; bought in bulk it's cheaper yet. And remember that most websites are mainly text, which takes up very little space. But although a good-size website, complete with pictures, might use up 10 megabytes, a single podcast can easily devour that much storage space. If you upload new podcasts on a regular basis, and maintain an archive of your older shows, you'll have hundreds of megabytes in need of a good home. It gets worse for video bloggers -- that small but growing band who use camcorders to chronicle their lives and times. Not many people are publishing their personal movies yet, but those who do must figure out how to store files that can easily hit 50 or 100 megabytes.
Then there's a problem most Web page hobbyists never consider -- the bandwidth factor. Web hosting services spend lots of money on their connections to the Internet. As usage increases, the hosting companies must buy faster, larger Internet connections. To cover the cost of all of this bandwidth, the companies set data-transfer limits on each account. Text-based sites rarely bump up against these limits. But any podcaster or video blogger with a sizable audience will soon hit his data-transfer limit, and receive a bill for excess bandwidth use.
So it's surprising to learn that only 28,000 Internet users have signed up at Ourmedia, a new Internet service that's giving away both storage and bandwidth, for personal use, at no charge. Any podcaster, text blogger or video blogger can sign up for a free account at Ourmedia.com and publish as much as he wants for as long as he wants. It sounds like a classic Internet come-on: Free bandwidth in exchange for a flood of on-screen advertisements. But Ourmedia's not driven by a quest for profit. It's the latest venture of the Internet Archive, an ongoing effort to catalog and preserve every document posted online.
Brewster Kahle, a veteran of the long-gone Cambridge supercomputer firm Thinking Machines, launched the Archive in 1996, with money earned from a successful Internet business venture. Today, the Archive, located online at www.archive.org, gets funding from multiple sources, including the National Science Foundation and the Library of Congress. It contains about 40 billion pages, spanning most of the Web's history. The Internet Archive is, alas, a mess. Its crude search tool is lousy for looking up files on specific topics. On the other hand, if you want to review past postings at a specific site -- say, CNN.com's coverage of the Sept. 11 attacks -- you'll find it here.
For all of its flaws, the Archive has made an excellent start at preserving our online history. It could do an even better job if more Internet users published their files here in the first place. Enter Ourmedia, an idea conceived by a couple of the Archive's biggest fans.
Journalist J.D. Lasica, author of the new book Darknet, cooked up the plan along with Marc Canter, co-founder of software company Macromedia. "We both saw that digital media had become so pervasive that people can pretty easily create this stuff," said Lasica, "but it's still pretty hard to share this stuff." So Lasica and Canter drew up a proposal for an eternal free hosting service. They successfully pitched it to Kahle as a way to enhance the Archive, at lower cost than the current method, which uses "spider" software to search for new Web pages. "We can bring you contemporary culture," Lasica told Kahle, "and we'll put it up on your servers." Pornography is banned from Ourmedia; so are files that violate copyright laws. Otherwise, anything goes.
Despite the Internet Archive's vast size, it had plenty of unused disk space. Which is why Internet publishers can publish their biggest, fattest multimedia files on the Ourmedia servers for free -- a price that Lasica said will never increase. That's easy to say with just 28,000 users. But after reading this, legions of readers will no doubt sign up, then tell their friends. Next thing you know, Ourmedia has several million users and a massive bill for storage and bandwidth. How can the company keep giving it away? "We're going to look for different additional partnerships," said Lasica. "We're already in discussions with Yahoo about that."
They don't just want money from the huge Internet company. Lasica and Canter want Yahoo and other companies to host portions of Ourmedia on their own computers. They hope to transform Ourmedia into a distributed storage system, housed in servers worldwide. Companies could donate unused server space and bandwidth, allowing the Ourmedia service to expand without limit. As for the indexing problem, Lasica is also talking to Blinkx.com, the company that recently launched a podcast search engine. Blinkx uses speech-recognition software to identify the words used in audio and video files. Then it indexes those words so you can look up podcasts and videos on any topic. With corporate financial and technical support, Ourmedia could become the Internet's richest and most user-friendly multimedia site -- and for publishers, definitely the cheapest. It's such an appealing vision that it's sure to enrich someone. Not Lasica, Canter and Kahle, perhaps. But certainly the rest of us.
Brought to you by Guardian eCommerce Site Approval And Privacy Seal Program.
Wednesday, July 27, 2005
Google Posts Record Number of Searches in Q2
Internet search powerhouse Google garnered 37.6 percent of all U.S. search queries on the Internet in this year's second quarter, according to comScore Networks, a Net metrics service firm. That's the largest market share that Google has had in a quarter since comScore began compiling its search reports in December 2003. Google's 5.65 billion U.S. queries placed it at the top of the Web ferret pack for the quarter, followed by Yahoo, with 4.65 billion queries and a 30.4 percent market share; MSN, with 2.39 billion queries and a 15.6 percent share; AOL/Time Warner, with 1.41 billion queries and a 9.2 percent share; and Ask Jeeves, with 934 million queries and a 6.1 percent share. While Google's market share increased from the first quarter, when it was 35.9 percent -- as did Ask Jeeves' share, which climbed from 5.3 percent, and AOL's, which jumped from 9.1 percent -- Yahoo's share dropped from 31.2 percent and MSN's from 16.3 percent.
Although Google maintains a hefty market share, it isn't rolling over its competitors, Chris Sherman, associate editor of SearchEngineWatch.com, said. It's fairly clear that Google is and has been No. 1 in terms of use, he said, "but whether or not the others are losing ground to Google or not, I'm not really clear about that." "A 2 percent change over a quarter doesn't represent a significant gain in momentum," he maintained. "I would much rather take a look at a year or couple of years time frame and see if there is any trend there," he said. "And for the last year or so there really hasn't been." Google, Yahoo, MSN and Ask Jeeves declined to comment on the comScore numbers. AOL could not be reached for comment.
On a year-to-year basis, comScore's latest U.S. numbers show growth declining in queries to the general search engines. Growth in the first quarter was 45.8 percent higher than the first quarter of 2004, but in the second quarter it was only 31.4 percent higher than the same period in 2004.
Mark S. Mahaney, an analyst with Smith Barney, in a research note released this week cautioned investors about reading too much into overall query growth rates. "We've only got seven months with [year to year] growth results to look at, and comScore has a habit of layering in new properties into search results without restating prior results, so organic growth rates are very tough to get at," he wrote. However, he noted, "Overall, we would expect to see a deceleration in query growth rates due to the law of large numbers." He estimated that query growth rates at Google would rapidly decline from approximately 53 percent in 2004 to 39 percent in 2005 to 15 percent in 2006.
If query growth decelerates, it could impact revenues at the major search engines, but Sherman doesn't believe growth will decelerate significantly. "If anything, as the Internet grows more complex, I think people are going to turn to search engines more frequently, rather than less," he said.
However, Sherman noted that general purpose search engines like Google are starting to see slivers cut from their pie. "We're seeing a real rise in vertical search engines, which are subject-specific or task-specific -- shopping, travel and so on," he explained. "We're going to see more of that going forward as people become more sophisticated and as these specialized search engines become better at what they do." "People still need information on the Internet," added Rita Knox, an analyst with the Gartner Group based in Stamford, Conn., "but a more generic search capability like Google is going to be less useful." "They're going to need their searches more specialized, more pointed, have more functionality wrapped up in it," she said.
Alan Gordon, president of Findit.com, a site that specializes in localizing search results for users, reasoned that if query growth has begun to lag, it's because people are tired of what they're getting from the major search engines. "You can't make a dog like its dog food," he said. "If it doesn't like its dog food, you can't keep giving it the same thing." "I applaud some of these companies for being very creative," he added. "But their basic model is raw search results and then paid search results pasted on top of that. That's not always the most efficient way to find things on the Internet.
Brought to you by Guardian eCommerce.
Although Google maintains a hefty market share, it isn't rolling over its competitors, Chris Sherman, associate editor of SearchEngineWatch.com, said. It's fairly clear that Google is and has been No. 1 in terms of use, he said, "but whether or not the others are losing ground to Google or not, I'm not really clear about that." "A 2 percent change over a quarter doesn't represent a significant gain in momentum," he maintained. "I would much rather take a look at a year or couple of years time frame and see if there is any trend there," he said. "And for the last year or so there really hasn't been." Google, Yahoo, MSN and Ask Jeeves declined to comment on the comScore numbers. AOL could not be reached for comment.
On a year-to-year basis, comScore's latest U.S. numbers show growth declining in queries to the general search engines. Growth in the first quarter was 45.8 percent higher than the first quarter of 2004, but in the second quarter it was only 31.4 percent higher than the same period in 2004.
Mark S. Mahaney, an analyst with Smith Barney, in a research note released this week cautioned investors about reading too much into overall query growth rates. "We've only got seven months with [year to year] growth results to look at, and comScore has a habit of layering in new properties into search results without restating prior results, so organic growth rates are very tough to get at," he wrote. However, he noted, "Overall, we would expect to see a deceleration in query growth rates due to the law of large numbers." He estimated that query growth rates at Google would rapidly decline from approximately 53 percent in 2004 to 39 percent in 2005 to 15 percent in 2006.
If query growth decelerates, it could impact revenues at the major search engines, but Sherman doesn't believe growth will decelerate significantly. "If anything, as the Internet grows more complex, I think people are going to turn to search engines more frequently, rather than less," he said.
However, Sherman noted that general purpose search engines like Google are starting to see slivers cut from their pie. "We're seeing a real rise in vertical search engines, which are subject-specific or task-specific -- shopping, travel and so on," he explained. "We're going to see more of that going forward as people become more sophisticated and as these specialized search engines become better at what they do." "People still need information on the Internet," added Rita Knox, an analyst with the Gartner Group based in Stamford, Conn., "but a more generic search capability like Google is going to be less useful." "They're going to need their searches more specialized, more pointed, have more functionality wrapped up in it," she said.
Alan Gordon, president of Findit.com, a site that specializes in localizing search results for users, reasoned that if query growth has begun to lag, it's because people are tired of what they're getting from the major search engines. "You can't make a dog like its dog food," he said. "If it doesn't like its dog food, you can't keep giving it the same thing." "I applaud some of these companies for being very creative," he added. "But their basic model is raw search results and then paid search results pasted on top of that. That's not always the most efficient way to find things on the Internet.
Brought to you by Guardian eCommerce.
Tuesday, July 26, 2005
Google Investors Turn to E-Commerce Startup
Already rich from their prescient investments in breakthrough companies like online search engine leader Google, renowned venture capitalists John Doerr and Ram Shriram think they have discovered their next gold mine. It's another dot-com with a zany six-letter name -- Zazzle, a startup that makes customized T-shirts, posters and postage stamps. Backed by their respective venture capital firms, Doerr and Shriram are investing US$16 million in Zazzle and joining the Palo Alto, Calif.-based company's board of directors -- a job both men also hold at Google. The investment, to be announced later today, will provide a marketing springboard for Zazzle, which has relied almost exclusively upon word of mouth since founder Robert Beaver II and his two sons, Bobby and Jeff, launched the Web site two years ago. The company has since grown to 100 employees.
While keeping a low profile, Zazzle has built a library of 500,000 digital images, including more than 3,500 items of copyrighted material licensed from Walt Disney's treasure trove of pop culture icons like Mickey Mouse and Goofy.
Zazzle's technology has "really opened up the vault of all our character art for the first time," said Patrick Haley, Disney's manager of new business development for consumer products. s Here's how Zazzle works: customers pick an image to be printed on a piece of merchandise, select a phrase from a menu and the order is supposed to be completed within 24 hours. The company so far has been making mostly T-shirts and posters. Beginning today, Zazzle will sell customized postage stamps in a partnership with mailing equipment maker Pitney Bowes. A sheet of 20 first-class stamps will sell for $16.99 -- a 130 percent markup that matches the price that Stamps.com charges for a similar sheet of personalized postage. The U.S. Postal Service is hoping the personal touch will become popular for commemorating special events like weddings and birthdays, giving more people a reason to use "snail mail" in an era of increasing electronic communication. It may sound like prosaic stuff, but Doerr is convinced that Zazzle is onto something big. "This will be a smash success," he predicted. Doerr, perhaps the best-known partner at Menlo Park, Calif.-based Kleiner Perkins Caufield & Byers, has long been one of the commercial Internet's most outspoken zealots. His enthusiasm has rarely wavered, even when the dot-com bust obliterated hundreds of Internet startups, taking along billions of dollars.
"That was just the tail end of the first boom," he said. "We are no further along than the early adolescence of the Web." Until recently, many venture capitalists have been avoiding Internet investments, particularly those in the crowded field of e-commerce. Since venture capitalists poured $28 billion into e-commerce startups in 1999 and 2000, the sector has attracted about $650 million in each of the last two years, according to PricewaterhouseCoopers and Thomson Financial. The pace picked up slightly during the first three months of this year when venture capitalists invested $181.5 million in e-commerce. Doerr's track record ensures his latest bet will attract attention. He has previously hit the jackpot with early investments in Web browser pioneer Netscape Communications, online retailer Amazon.com and, of course, Google. But he also has invested in his share of flops, including Onsale.com, Homestore.com and Drugstore.com.
Google may become Doerr's crowning achievement.
The $12.5 million that he invested in 1999 when hardly anyone was interested in online search engines turned into a Kleiner Perkins stake worth $1.8 billion by the time the company went public 11 months ago. The stock has more than tripled since then, enabling Kleiner Perkins to retain a $1.7 billion stake in Google even though the firm has sold most of its shares. Shriram, who met Doerr as one of the early executives at Netscape, got involved in Google even earlier. After leading a small group of investors that placed $1 million in the search engine in 1998, Shriram retains a stake currently worth $1.3 billion. Doerr isn't quite ready to predict the investment in Zazzle will duplicate those staggering returns, but he still can't resist drawing some parallels. "They are Googlesque in their energy and their ability to think big," he said.
Brought to you by the Guardian eCommerce Site Approval And Privacy Seal Program.
While keeping a low profile, Zazzle has built a library of 500,000 digital images, including more than 3,500 items of copyrighted material licensed from Walt Disney's treasure trove of pop culture icons like Mickey Mouse and Goofy.
Zazzle's technology has "really opened up the vault of all our character art for the first time," said Patrick Haley, Disney's manager of new business development for consumer products. s Here's how Zazzle works: customers pick an image to be printed on a piece of merchandise, select a phrase from a menu and the order is supposed to be completed within 24 hours. The company so far has been making mostly T-shirts and posters. Beginning today, Zazzle will sell customized postage stamps in a partnership with mailing equipment maker Pitney Bowes. A sheet of 20 first-class stamps will sell for $16.99 -- a 130 percent markup that matches the price that Stamps.com charges for a similar sheet of personalized postage. The U.S. Postal Service is hoping the personal touch will become popular for commemorating special events like weddings and birthdays, giving more people a reason to use "snail mail" in an era of increasing electronic communication. It may sound like prosaic stuff, but Doerr is convinced that Zazzle is onto something big. "This will be a smash success," he predicted. Doerr, perhaps the best-known partner at Menlo Park, Calif.-based Kleiner Perkins Caufield & Byers, has long been one of the commercial Internet's most outspoken zealots. His enthusiasm has rarely wavered, even when the dot-com bust obliterated hundreds of Internet startups, taking along billions of dollars.
"That was just the tail end of the first boom," he said. "We are no further along than the early adolescence of the Web." Until recently, many venture capitalists have been avoiding Internet investments, particularly those in the crowded field of e-commerce. Since venture capitalists poured $28 billion into e-commerce startups in 1999 and 2000, the sector has attracted about $650 million in each of the last two years, according to PricewaterhouseCoopers and Thomson Financial. The pace picked up slightly during the first three months of this year when venture capitalists invested $181.5 million in e-commerce. Doerr's track record ensures his latest bet will attract attention. He has previously hit the jackpot with early investments in Web browser pioneer Netscape Communications, online retailer Amazon.com and, of course, Google. But he also has invested in his share of flops, including Onsale.com, Homestore.com and Drugstore.com.
Google may become Doerr's crowning achievement.
The $12.5 million that he invested in 1999 when hardly anyone was interested in online search engines turned into a Kleiner Perkins stake worth $1.8 billion by the time the company went public 11 months ago. The stock has more than tripled since then, enabling Kleiner Perkins to retain a $1.7 billion stake in Google even though the firm has sold most of its shares. Shriram, who met Doerr as one of the early executives at Netscape, got involved in Google even earlier. After leading a small group of investors that placed $1 million in the search engine in 1998, Shriram retains a stake currently worth $1.3 billion. Doerr isn't quite ready to predict the investment in Zazzle will duplicate those staggering returns, but he still can't resist drawing some parallels. "They are Googlesque in their energy and their ability to think big," he said.
Brought to you by the Guardian eCommerce Site Approval And Privacy Seal Program.
Monday, July 25, 2005
Getting Into Blogs Helps Search Engines Find You
Are blogs the next big thing? For many, they're a big thing already. Dave Taylor, for instance, a Boulder, Colo., business strategy consultant and writer, sees blogs as an essential -- and profitable -- part of his business. But before we get to that, what exactly is a blog? Taylor begins explaining the concept by stating what it isn't: "It isn't a diary or journal, it doesn't have to be updated with any frequency, it doesn't have to have date and time stamps and it doesn't have to open up your innermost life to the public at large." Hmmm, that seems to be the common perception of just what blogging is. So what is it, then?
"It's a sophisticated content-management tool," Taylor told me recently, "allowing anyone to separate the content of their site from the delivery of that content to the visitor." One of the big advantages from the business perspective, Taylor told me, is that it allows the company to "wrest control of their content from their webmaster." In other words, a blogging tool is one that allows anyone authorized in your company, regardless of technical skills, to post information to your Web site. No longer do you need to write something, pass it over to your IT department or Web designer and wait who-knowshow-long for the information to appear on the site. The end result of setting up blogging tools on a corporate or small-company Web site is, because posting information to the site becomes so easy, the site content is likely to be more accurate, timely, up-to-date and in sync with the needs and interests of customers.
A company's technical-support or customer-service department can post answers to the day's issues into the support area. The sales team can update details about all your products. HR can update the "Management Team" area and job postings, and so on. No longer is the technical team a bottleneck. All your staff are "empowered" (I hate that word, but it seems to work here) to become content creators for your site. Why does it matter? Well, most companies have found this bottleneck frustrating, so removing the blockage has to be a good thing. But what you'll find is not merely that the content you wanted posted now gets posted quickly and easily, but that the simplicity of the process actually increases the amount of content ... all of a sudden you are posting information that you never realized you wanted on the site.
That's good for customers looking for product-sales information or product-support information, which means it's also good for your company, of course. It's also good for your company because the more content your site contains, the more traffic you're likely to get from the search engines.
The foundation of search-engine optimization is "content," text related to your products and services. Each page containing the keywords that your prospects are likely to type into a search engine is like a lottery ticket. The more pages, the more likely you are to "win" traffic from the search engines. And it can be a way to promote yourself or your company as an "expert" in your field. As Taylor puts it, "I believe the 21st century will be characterized by the cult of expertise, and that the successful companies will be those that are widely recognized as experts." One way to establish expertise, according to Taylor, is through the use of blogs. Which brings us to AskDaveTaylor.com and Blog.Intuitive.com, Taylor's blogging sites. On the first he answers questions about a variety of technical subjects, while on Blog.Intuitive.com, he writes about a variety of technical and business subjects.
His blogging helped him build a reputation. Taylor -- who helps companies integrate online communications in all its forms (including blogging, of course) into their operations -- has been interviewed by Wired magazine and MSNBC and has been quoted by Tom Peters and many fellow bloggers out in the "blogosphere." It does take a commitment of course -- not so much money, but time. Taylor spends at least 30 minutes a day or so on his blogs. But his sites make money directly (through Google Adsense ads) and indirectly (through consulting projects).
Get the Blogging Started
So what does it take to get started? Blogging is cheap. You can use a "hosted" blogging system such as Blogger.com (a free system owned by Google), or Typepad.com (which Taylor recommends for hosted business blogs; from $5 to $ 15 a month). Or you can install a system on your own Web server such as WordPress (a free "open source" program) or MoveableType, a program that costs $70-$100. Both programs can be installed with a couple of hours of geek time.
Blogging isn't for every business. You, or someone in your company, has to have something to say, and the ability to say it reasonably often.
If you own a shoe store in the mall, it's probably not for you. But if your company has scads of hidden information that should be exposed to the world, or if your business could benefit by positioning itself as a source of expertise in your industry, perhaps it's time you took at this simple and affordable new tool.
Brought to you by Guardian eCommerce.
"It's a sophisticated content-management tool," Taylor told me recently, "allowing anyone to separate the content of their site from the delivery of that content to the visitor." One of the big advantages from the business perspective, Taylor told me, is that it allows the company to "wrest control of their content from their webmaster." In other words, a blogging tool is one that allows anyone authorized in your company, regardless of technical skills, to post information to your Web site. No longer do you need to write something, pass it over to your IT department or Web designer and wait who-knowshow-long for the information to appear on the site. The end result of setting up blogging tools on a corporate or small-company Web site is, because posting information to the site becomes so easy, the site content is likely to be more accurate, timely, up-to-date and in sync with the needs and interests of customers.
A company's technical-support or customer-service department can post answers to the day's issues into the support area. The sales team can update details about all your products. HR can update the "Management Team" area and job postings, and so on. No longer is the technical team a bottleneck. All your staff are "empowered" (I hate that word, but it seems to work here) to become content creators for your site. Why does it matter? Well, most companies have found this bottleneck frustrating, so removing the blockage has to be a good thing. But what you'll find is not merely that the content you wanted posted now gets posted quickly and easily, but that the simplicity of the process actually increases the amount of content ... all of a sudden you are posting information that you never realized you wanted on the site.
That's good for customers looking for product-sales information or product-support information, which means it's also good for your company, of course. It's also good for your company because the more content your site contains, the more traffic you're likely to get from the search engines.
The foundation of search-engine optimization is "content," text related to your products and services. Each page containing the keywords that your prospects are likely to type into a search engine is like a lottery ticket. The more pages, the more likely you are to "win" traffic from the search engines. And it can be a way to promote yourself or your company as an "expert" in your field. As Taylor puts it, "I believe the 21st century will be characterized by the cult of expertise, and that the successful companies will be those that are widely recognized as experts." One way to establish expertise, according to Taylor, is through the use of blogs. Which brings us to AskDaveTaylor.com and Blog.Intuitive.com, Taylor's blogging sites. On the first he answers questions about a variety of technical subjects, while on Blog.Intuitive.com, he writes about a variety of technical and business subjects.
His blogging helped him build a reputation. Taylor -- who helps companies integrate online communications in all its forms (including blogging, of course) into their operations -- has been interviewed by Wired magazine and MSNBC and has been quoted by Tom Peters and many fellow bloggers out in the "blogosphere." It does take a commitment of course -- not so much money, but time. Taylor spends at least 30 minutes a day or so on his blogs. But his sites make money directly (through Google Adsense ads) and indirectly (through consulting projects).
Get the Blogging Started
So what does it take to get started? Blogging is cheap. You can use a "hosted" blogging system such as Blogger.com (a free system owned by Google), or Typepad.com (which Taylor recommends for hosted business blogs; from $5 to $ 15 a month). Or you can install a system on your own Web server such as WordPress (a free "open source" program) or MoveableType, a program that costs $70-$100. Both programs can be installed with a couple of hours of geek time.
Blogging isn't for every business. You, or someone in your company, has to have something to say, and the ability to say it reasonably often.
If you own a shoe store in the mall, it's probably not for you. But if your company has scads of hidden information that should be exposed to the world, or if your business could benefit by positioning itself as a source of expertise in your industry, perhaps it's time you took at this simple and affordable new tool.
Brought to you by Guardian eCommerce.
Saturday, July 23, 2005
Phishing Targeting Small Banks
Smaller regional banks and credit unions have become prime targets for phishing -- sophisticated scams that send fraudulent e-mails to consumers directing them to fake Internet sites where they are ordered to provide personal or account information -- experts told UPI's The Web. Phishing scams hit an all-time high this spring, and even members of the White House employees credit union were probed. "The reason that phishing is on the rise is that there is a lot of money to be made illegally," said Alex Shipp, a senior antivirus technologist at MessageLabs in New York City, a provider of e-mail security services for businesses. "If you are a criminal and want to get into the business , there are people who will sell you software to set up illegal Web sites, and people who will process the credit card numbers you've stolen. A whole underworld infrastructure is developing."
Shipp's firm has produced a telling testimony on the phishing phenomenon. The study, part of MessageLabs' Intelligence Monthly Report for May 2005, indicated phishing attacks reached 9.1 million during May, an increase of about 1.4 million from the previous high reached last January. Massive amounts of scam e-mails are directing consumers to Web sites dressed up to look like those of Citibank, Northern Trust or LaSalle National Bank, as well as lesser-known financial firms.
Shipp said generally the smaller institutions use fewer security safeguards, and their customers may completely trust any e-mail coming to them that purports to be from their bank. The criminals are exploiting this. "At these smaller banks, they can compromise a few accounts, and get a lot of money, or at least what seems to be a lot of money for them," he said. "Many of the criminals are from the countries of the former Soviet Union. They don't need to have a lot of money to be considered rich."
Federal regulations have been put in place to protect the data of customers at all financial institutions, but sometimes the smaller institutions do not have the resources to pay for top-notch IT security, said John Colbert, chief executive officer of Guidance Software in Los Angeles, a security software company. "If they have a breach in security, they still have to notify customers," Colbert said. Banks and financial institutions are fighting back against the overseas hackers with new authentication technologies and better consumer-education programs. For many years, technologists have touted biometric readers -- technologies that can scan an individual's retina or read a thumbprint as a way of making Internet computing secure. The problem is that such solutions are based on hardware and are very expensive.
Now, software developers are attacking the problem. BioPassword, in suburban Seattle, has developed software that can track the unique ways every individual types on a computer keyboard.
"There is a particular way that each individual holds the keys and releases the keys, and a particular latency between each keystroke that each person has," said Greg Wood, BioPassword's chief technology officer. "The differences are in milliseconds -- and can be computed mathematically. Individual typing patterns may be more unique than individual thumbprints." Wood called the software impossible to crack, because no one can replicate the rhythm of another typist.
The technology was first developed for military applications at the Rand Corporation, the government-sponsored R&D think tank. It is related to the analysis of dots and dashes of the Morse Code communicators during World War I, said Wood, who previously worked at Microsoft for nine years before joining start-up BioPassword recently. Education Needed
Smaller financial institutions are starting to educate their customers about the risks of phishing scams, even as they are seeking software to solve their security and authentication problems, said Chris Novak, a senior consultant at Cybertrust in New York City. "They're adding materials to their Web sites, telling customers to be aware of the problem," Novak said. "Education is often the first step in stopping the criminals." In addition, smaller financial institutions are developing operational response plans, anticipating they will be victimized by a phishing attack. They also are planning how to conduct investigations of attacks when they do occur. The companies worry that if they do not address the issues, their brand images will be hurt, perhaps permanently. They also worry their customers might become victims of ID theft if they do not improve security. "At a lot of these smaller banks, you don't even have to present an ID when you go up to the teller and make a deposit or withdrawal," Novak said, "but it's not the same on the Internet. Any organization can be phished."
Brought to you by Guardian eCommerce.
Shipp's firm has produced a telling testimony on the phishing phenomenon. The study, part of MessageLabs' Intelligence Monthly Report for May 2005, indicated phishing attacks reached 9.1 million during May, an increase of about 1.4 million from the previous high reached last January. Massive amounts of scam e-mails are directing consumers to Web sites dressed up to look like those of Citibank, Northern Trust or LaSalle National Bank, as well as lesser-known financial firms.
Shipp said generally the smaller institutions use fewer security safeguards, and their customers may completely trust any e-mail coming to them that purports to be from their bank. The criminals are exploiting this. "At these smaller banks, they can compromise a few accounts, and get a lot of money, or at least what seems to be a lot of money for them," he said. "Many of the criminals are from the countries of the former Soviet Union. They don't need to have a lot of money to be considered rich."
Federal regulations have been put in place to protect the data of customers at all financial institutions, but sometimes the smaller institutions do not have the resources to pay for top-notch IT security, said John Colbert, chief executive officer of Guidance Software in Los Angeles, a security software company. "If they have a breach in security, they still have to notify customers," Colbert said. Banks and financial institutions are fighting back against the overseas hackers with new authentication technologies and better consumer-education programs. For many years, technologists have touted biometric readers -- technologies that can scan an individual's retina or read a thumbprint as a way of making Internet computing secure. The problem is that such solutions are based on hardware and are very expensive.
Now, software developers are attacking the problem. BioPassword, in suburban Seattle, has developed software that can track the unique ways every individual types on a computer keyboard.
"There is a particular way that each individual holds the keys and releases the keys, and a particular latency between each keystroke that each person has," said Greg Wood, BioPassword's chief technology officer. "The differences are in milliseconds -- and can be computed mathematically. Individual typing patterns may be more unique than individual thumbprints." Wood called the software impossible to crack, because no one can replicate the rhythm of another typist.
The technology was first developed for military applications at the Rand Corporation, the government-sponsored R&D think tank. It is related to the analysis of dots and dashes of the Morse Code communicators during World War I, said Wood, who previously worked at Microsoft for nine years before joining start-up BioPassword recently. Education Needed
Smaller financial institutions are starting to educate their customers about the risks of phishing scams, even as they are seeking software to solve their security and authentication problems, said Chris Novak, a senior consultant at Cybertrust in New York City. "They're adding materials to their Web sites, telling customers to be aware of the problem," Novak said. "Education is often the first step in stopping the criminals." In addition, smaller financial institutions are developing operational response plans, anticipating they will be victimized by a phishing attack. They also are planning how to conduct investigations of attacks when they do occur. The companies worry that if they do not address the issues, their brand images will be hurt, perhaps permanently. They also worry their customers might become victims of ID theft if they do not improve security. "At a lot of these smaller banks, you don't even have to present an ID when you go up to the teller and make a deposit or withdrawal," Novak said, "but it's not the same on the Internet. Any organization can be phished."
Brought to you by Guardian eCommerce.
Friday, July 22, 2005
Report: Spam's Effectiveness Gives It Staying Power
Spam e-mail is likely to remain a scourge for Internet users for one simple reason, says a new report -- it still works. A survey by research firm the Radicati Group and messaging security vendors Mirapoint found that some 11 percent of Web users had purchased a product by clicking through on spam e-mails. Many of those users never got what they thought they were buying, with 9 percent of those surveyed admitting that they fell victim to spam-based scams. Reducing the effectiveness of spam in generating e-commerce would probably be a simple solution, one that might prove far more likely to work than the current wave of spam filters, address verification programs and law enforcement efforts aimed at spammers.
"If people stop buying products from spam, spam would probably go away," said Marcel Nienhuis, market analyst at the Radicati Group. "User education and implementation of smart practices when dealing with spam, such as not opening unidentified messages, will be crucial in discouraging spammers." Even those who don't complete purchases through spam messages are likely to at least click through the messages to find out more. The survey of 800 Internet users -- two-thirds of them business users -- found 39 percent click on embedded links within unwanted commercial e-mail messages, with more than half saying that doing so appeared to result in receiving more spam in the future. Such links often serve to verify that an address is active and often leads to spammers targeting the address with more messages. The authors of the report said the survey revealed that despite the place that spam has taken in popular culture, with such e-mail considered a scourge by most computer users, many people are still uninformed about how such messages should be handled.
"More than half of e-mail users do not understand the harmful effects of clicking on any links in spam e-mail, even the 'unsubscribe' link often is a trap," said Bethany Mayer, chief marketing officer at Mirapoint. "Only a combination of federal legislation, user education and effective technology will help us stamp out the problem of spam." The survey results are shocking given how much effort has gone into educating users about spam from the likes of AOL, Yahoo, and MSN, which have made consumer education a key part of their multi-pronged attacks on spam, which also includes new technology rollouts and cooperation with law enforcement to track down abusers of the system. The data must be a source of frustration for those who have been waging high-profile battles against spam. Microsoft recently began using its Sender ID specification to limit how much spam reaches Hotmail users, and AOL has made spam protection a key part of its marketing campaign, with one TV spot showing a grateful user showing up at AOL headquarters to thank those who have helped curb spam.
However, much of that effort is based on the premise that users detest spam and want it eradicated, an idea that could be called into question by the presence of so many willing spam participants. The survey did not specify which types of spam messages were most likely to draw positive responses from users.
The fact that a full 9 percent of the survey respondents said they had lost money when trying to buy through spam could be a chilling stat for major e-commerce players, who could see such users be turned off from buying online altogether. However, Forrester Research analyst Carrie Johnson said that while the e-commerce industry needs to be on guard against spam abuse, most users are savvy enough to make distinctions between legitimate e-commerce and true spam. "Scammers and spammers have been operating in the shadows of e-commerce for years without disrupting growth or undermining public trust in the medium," Johnson said. Still, she said, the fact that spam still works is a reminder that thousands of new computer users come onto the Internet every day and that more public education efforts might be needed to keep the Web safe.
Brought to you by Guardian eCommerce Privacy Seal Program.
"If people stop buying products from spam, spam would probably go away," said Marcel Nienhuis, market analyst at the Radicati Group. "User education and implementation of smart practices when dealing with spam, such as not opening unidentified messages, will be crucial in discouraging spammers." Even those who don't complete purchases through spam messages are likely to at least click through the messages to find out more. The survey of 800 Internet users -- two-thirds of them business users -- found 39 percent click on embedded links within unwanted commercial e-mail messages, with more than half saying that doing so appeared to result in receiving more spam in the future. Such links often serve to verify that an address is active and often leads to spammers targeting the address with more messages. The authors of the report said the survey revealed that despite the place that spam has taken in popular culture, with such e-mail considered a scourge by most computer users, many people are still uninformed about how such messages should be handled.
"More than half of e-mail users do not understand the harmful effects of clicking on any links in spam e-mail, even the 'unsubscribe' link often is a trap," said Bethany Mayer, chief marketing officer at Mirapoint. "Only a combination of federal legislation, user education and effective technology will help us stamp out the problem of spam." The survey results are shocking given how much effort has gone into educating users about spam from the likes of AOL, Yahoo, and MSN, which have made consumer education a key part of their multi-pronged attacks on spam, which also includes new technology rollouts and cooperation with law enforcement to track down abusers of the system. The data must be a source of frustration for those who have been waging high-profile battles against spam. Microsoft recently began using its Sender ID specification to limit how much spam reaches Hotmail users, and AOL has made spam protection a key part of its marketing campaign, with one TV spot showing a grateful user showing up at AOL headquarters to thank those who have helped curb spam.
However, much of that effort is based on the premise that users detest spam and want it eradicated, an idea that could be called into question by the presence of so many willing spam participants. The survey did not specify which types of spam messages were most likely to draw positive responses from users.
The fact that a full 9 percent of the survey respondents said they had lost money when trying to buy through spam could be a chilling stat for major e-commerce players, who could see such users be turned off from buying online altogether. However, Forrester Research analyst Carrie Johnson said that while the e-commerce industry needs to be on guard against spam abuse, most users are savvy enough to make distinctions between legitimate e-commerce and true spam. "Scammers and spammers have been operating in the shadows of e-commerce for years without disrupting growth or undermining public trust in the medium," Johnson said. Still, she said, the fact that spam still works is a reminder that thousands of new computer users come onto the Internet every day and that more public education efforts might be needed to keep the Web safe.
Brought to you by Guardian eCommerce Privacy Seal Program.
Thursday, July 21, 2005
Hacker Tells of Bungle That May Have Cost $1 Million
A Scottish hacker facing 70 years in a U.S. jail after he was accused of shutting down government networks has broken his silence. Gary McKinnon, 39, claimed yesterday he did no deliberate damage after sneaking into confidential armed forces and NASA files. He insisted it was an accident when he destroyed data by pressing the wrong button. The Glasgow-born computer geek said, "I thought, 'Oh bloody hell,' and that's when I stopped for a while."
McKinnon was banned from using the Internet under bail conditions imposed last month.
And he is terrified of being extradited to the U.S., where it's claimed he did US$1 million of damage by hacking into networks run by the U.S. Army, Navy, Air Force, NASA and the Defense Department. Prosecutors claim he left networks "inoperable" by deleting 1,300 user accounts.
McKinnon, who lives in London, believes he found evidence that the U.S. has a secret spaceship manned by "non-terrestrial officers" and that it has built a robot soldier. But he confessed he could not remember the details because "I was smoking a lot of dope at the time." The self-taught computer expert claims he encountered dozens of other hackers from all over the world while snooping on U.S. networks.
Jobless computer systems administrator McKinnon was inspired to start hacking by the movie "WarGames", in which a whiz kid hacks into a Pentagon network. He said, "You end up lusting after more and more complex security measures." "It was like a game. It was addictive. Hugely addictive." McKinnon was caught in November 2002 because, he said, he was "a bit sloppy" and left his own email address while downloading a program. He is due to appear in court later this month.
Brought to you by Guardian eCommerce.
McKinnon was banned from using the Internet under bail conditions imposed last month.
And he is terrified of being extradited to the U.S., where it's claimed he did US$1 million of damage by hacking into networks run by the U.S. Army, Navy, Air Force, NASA and the Defense Department. Prosecutors claim he left networks "inoperable" by deleting 1,300 user accounts.
McKinnon, who lives in London, believes he found evidence that the U.S. has a secret spaceship manned by "non-terrestrial officers" and that it has built a robot soldier. But he confessed he could not remember the details because "I was smoking a lot of dope at the time." The self-taught computer expert claims he encountered dozens of other hackers from all over the world while snooping on U.S. networks.
Jobless computer systems administrator McKinnon was inspired to start hacking by the movie "WarGames", in which a whiz kid hacks into a Pentagon network. He said, "You end up lusting after more and more complex security measures." "It was like a game. It was addictive. Hugely addictive." McKinnon was caught in November 2002 because, he said, he was "a bit sloppy" and left his own email address while downloading a program. He is due to appear in court later this month.
Brought to you by Guardian eCommerce.
Wednesday, July 20, 2005
Method for Classifying Web Site Content Being Changed
The Internet Content Rating Association (ICRA) is changing the way it ranks Web sites.
The new system will use Resource Description Framework (RDF) technology developed by the World Wide Web Consortium , which allows Web site developers to grade their sites according to the suitability of the content. For example, the new system allows clearer differentiation between medical and pornography sites, and includes shortcuts to generate labels for pornography and gambling sites. "RDF is a modern technology with an active and growing body of support from academia and the digital content production and distribution industries," said Stephen Balkam, chief executive at the ICRA. "With digital content now flowing freely across national boundaries, media platforms and delivery devices, this new system will allow ICRA and its partners and supporters to deliver better child protection, along with a significantly improved means of self-regulation to the industry on a global scale," Balkam said. RDF allows new areas of the Internet to be classified, such as RSS feeds and blogs, and the technology forms a significant part of the Semantic Web being developed by Tim Berners-Lee.
Brought to you by the Guardian eCommerce Privacy Seal Program.
The new system will use Resource Description Framework (RDF) technology developed by the World Wide Web Consortium , which allows Web site developers to grade their sites according to the suitability of the content. For example, the new system allows clearer differentiation between medical and pornography sites, and includes shortcuts to generate labels for pornography and gambling sites. "RDF is a modern technology with an active and growing body of support from academia and the digital content production and distribution industries," said Stephen Balkam, chief executive at the ICRA. "With digital content now flowing freely across national boundaries, media platforms and delivery devices, this new system will allow ICRA and its partners and supporters to deliver better child protection, along with a significantly improved means of self-regulation to the industry on a global scale," Balkam said. RDF allows new areas of the Internet to be classified, such as RSS feeds and blogs, and the technology forms a significant part of the Semantic Web being developed by Tim Berners-Lee.
Brought to you by the Guardian eCommerce Privacy Seal Program.
Tuesday, July 19, 2005
Retirees Turn to eBay for an Income
Selling items on eBay's online auction site is a pastime for some people, but for Ellen Lee it's a matter of paying for some of life's necessities. Ellen, 59, and her husband, Peter, 57, worked as a nurse practitioner and family physician, respectively, until they retired in the late 1990s, with the goal of slowing their hectic lives. But when they needed health insurance, Ellen's pre-existing medical condition prevented her from getting affordable coverage. Small Business Insurance
The couple was already selling some books on eBay when their accountant asked if there was some type of business they could start to qualify for affordable health insurance offered to small-business owners. They set up a business in June 2001 to more formally sell items on eBay. The Lees are part of a contingent of eBay sellers 55 and older who retired or were laid off from traditional full-time jobs and now sell online for income. The company doesn't have statistics about the number of sellers who fit that description, but spokesman Hani Durzy said eBay is seeing more of them attend classes the company sponsors on how to sell items. The group's involvement in eBay is surprising, given that they didn't grow up using the Internet , much less buying and selling on eBay.
"Generally the Internet crowd is thought of as those under 40," Bill Cobb, president of eBay North America, said in a recent interview. "Yet these retirees have the time to do this, and it's given them something new in their lives. They have a pension, they had a career and they have friends, and now they have a business." The Lees now help libraries sell books on eBay and sell things for others on consignment. "We started off wanting to be successful in selling, and then it went to wanting to cover insurance costs, and then it went to making a profit," Peter said last month while attending eBay's annual gathering of buyers and sellers here. "Then we wanted to be PowerSellers, and now I've got in my head the next goal of wanting to get to the Silver Level, which is $3,000 a month in sales, and we're right on the edge of that."
People qualify to be PowerSellers by having monthly gross sales of at least $1,000, and having positive feedback from 98 percent or more of their sales. The status gives certain perks from eBay. Marcia Cooper, 69, bought items on eBay while she was still working in marketing. Still, she didn't know much about the Internet or eBay when she was a casualty of downsizing in 2000. That changed after her son told her how much profit he made on concert tickets he sold on eBay.
She and her fiance, Harvey Levine, soon began selling concert and sporting tickets, antiques and collectibles on eBay. The Fort Lee, N.J., couple are now PowerSellers, selling items for themselves and others, as well as teaching people how to sell and buy items on eBay. "We're taking our skills from our previous occupations and using them today for our own business," Cooper said in an interview on the sidelines of the eBay annual meeting.
The pair haven't replaced their former incomes, but "it's a tradeoff," Cooper said. She and Levine, 66, who also was forced into early retirement, cite the time flexibility, lack of a commute and more freedom as reasons they enjoy making a living on eBay.
Joyce Banbury, a retiree from Russell, Kan., who would only say she's over 65, sold her first Beanie Baby on eBay in June 1998. She became one of the company's first PowerSellers by selling Beanie Babies to supplement her family's income while staying home and raising her granddaughter. Although no longer a PowerSeller, Banbury teaches others how to buy and sell. She's also involved in using eBay to improve the economic development of rural communities. She visits towns, some with as few as 200 people, and explains how selling items on eBay can improve their communities and their lives. "[EBay] is a way people can stay in a small town, and it supplements their income or is their income," she said. "EBay connects you to a world market, and that makes it exciting to a rural market." Although some people look forward to the day they leave work for good, the Lees aren't exactly counting down the days until they "retire" from their second careers. They need their eBay business to be successful until they're 65, when they're eligible for Medicare. But the couple is having such a good time that they might do it longer, Ellen said.
"It's a great way to meet people from other walks of life," she said. "It's really fun."
For more information, please visit Guardian eCommerce.
The couple was already selling some books on eBay when their accountant asked if there was some type of business they could start to qualify for affordable health insurance offered to small-business owners. They set up a business in June 2001 to more formally sell items on eBay. The Lees are part of a contingent of eBay sellers 55 and older who retired or were laid off from traditional full-time jobs and now sell online for income. The company doesn't have statistics about the number of sellers who fit that description, but spokesman Hani Durzy said eBay is seeing more of them attend classes the company sponsors on how to sell items. The group's involvement in eBay is surprising, given that they didn't grow up using the Internet , much less buying and selling on eBay.
"Generally the Internet crowd is thought of as those under 40," Bill Cobb, president of eBay North America, said in a recent interview. "Yet these retirees have the time to do this, and it's given them something new in their lives. They have a pension, they had a career and they have friends, and now they have a business." The Lees now help libraries sell books on eBay and sell things for others on consignment. "We started off wanting to be successful in selling, and then it went to wanting to cover insurance costs, and then it went to making a profit," Peter said last month while attending eBay's annual gathering of buyers and sellers here. "Then we wanted to be PowerSellers, and now I've got in my head the next goal of wanting to get to the Silver Level, which is $3,000 a month in sales, and we're right on the edge of that."
People qualify to be PowerSellers by having monthly gross sales of at least $1,000, and having positive feedback from 98 percent or more of their sales. The status gives certain perks from eBay. Marcia Cooper, 69, bought items on eBay while she was still working in marketing. Still, she didn't know much about the Internet or eBay when she was a casualty of downsizing in 2000. That changed after her son told her how much profit he made on concert tickets he sold on eBay.
She and her fiance, Harvey Levine, soon began selling concert and sporting tickets, antiques and collectibles on eBay. The Fort Lee, N.J., couple are now PowerSellers, selling items for themselves and others, as well as teaching people how to sell and buy items on eBay. "We're taking our skills from our previous occupations and using them today for our own business," Cooper said in an interview on the sidelines of the eBay annual meeting.
The pair haven't replaced their former incomes, but "it's a tradeoff," Cooper said. She and Levine, 66, who also was forced into early retirement, cite the time flexibility, lack of a commute and more freedom as reasons they enjoy making a living on eBay.
Joyce Banbury, a retiree from Russell, Kan., who would only say she's over 65, sold her first Beanie Baby on eBay in June 1998. She became one of the company's first PowerSellers by selling Beanie Babies to supplement her family's income while staying home and raising her granddaughter. Although no longer a PowerSeller, Banbury teaches others how to buy and sell. She's also involved in using eBay to improve the economic development of rural communities. She visits towns, some with as few as 200 people, and explains how selling items on eBay can improve their communities and their lives. "[EBay] is a way people can stay in a small town, and it supplements their income or is their income," she said. "EBay connects you to a world market, and that makes it exciting to a rural market." Although some people look forward to the day they leave work for good, the Lees aren't exactly counting down the days until they "retire" from their second careers. They need their eBay business to be successful until they're 65, when they're eligible for Medicare. But the couple is having such a good time that they might do it longer, Ellen said.
"It's a great way to meet people from other walks of life," she said. "It's really fun."
For more information, please visit Guardian eCommerce.
Monday, July 18, 2005
Arbitrators Back Google in Fight Against 'Typo Squatter'
In a ruling that could have ramifications for the entire Web industry, Google has won an arbitration case that gives it control of several similarly spelled domain names. The National Arbitration Forum found in favor of Google in a case the search engine company brought against a Russian man, Sergey Gridasov, who registered at least four domains: googkle.com, ghoogle.com, gfoogle.com and gooigle.com. The arbitration panel found in favor of Google after being unable to get a response from Gridasov and after Google showed that it held the trademark to the "Google" name, that the misspelled variants were a clear attempt to confuse users and that Google stood to suffer real harm since the fake domains were being funneled to a site that downloaded spyware to unsuspecting users' computers.
The ruling came under the Uniform Domain Name Dispute Resolution Policy established by the Internet Corporation for Assigned Names and Numbers (ICANN) as an alternative to lengthy and costly lawsuits. The process is meant to offer faster results and appears to have worked in this case: Google filed the complaint less than two months ago. The arbitration was binding, and under the panel's ruling, ICANN will now shut down the Web sites. Because it is not a court ruling, the case isn't seen as setting legal precedent. However, for companies like Google that carefully guard their names as part of their brand images, it could be reason to more aggressively pursue alleged trademark violators.
SearchEngineWatch.com Editor Gary Price said the case could indicate a stepped-up enforcement posture by Google of one of its biggest assets -- its brand name and image.
"It will be worth monitoring to see if Google will begin asserting its legal rights over other registered domains that either resemble Google or include the word Google in the domain name," he said.
A number of sites that are takes on the Google name, such as GoogleWatch.com and Googlenews.com, currently lead to other generic search sites. In addition, several others sites that actually provide information about Google are located at URLs that are take-offs on the Google name.
Google is no stranger to trademark disputes and has found itself on both sides of the hearing table. A year ago, Stelor Productions, owner of the Googles.com Web site, which markets products aimed at young children, filed suit against Google, saying it had infringed on Stelor's trademark rights by using its search engine to market children's products. Also, Google's own AdSense program has been targeted by companies that said their trademarks were violated when Google peddled ad space via keywords that enjoy trademark protection. The latter case is seen as far more important to the overall Web industry, since it speaks to the marketing side of the search business . The news of the win and its overall importance drew mixed reactions.
Many analysts said the ruling broke little new ground, especially since the defendant merely defaulted, which left the arbitration panel with little choice but to rule in Google's favor.
IDC analyst Jonathan Gaw said the streamlined process that Google employed was designed to reduce cybersquatting by making it faster and easier for companies to assert their rights. In that sense, the process seems to be working. Gaw noted that while celebrities and others -- including the recently chosen Catholic Pope -- are still targeted by squatting, incidences of cybersquatting aimed at corporations seems to be far lower than at the peak in the 1990s. However, to some others, the ruling was the latest example of Google aggressively asserting its dominance over the Web. That view -- that Google has designs on controlling ever more of the Web -- has been gaining momentum. Fueling the concern was a move last week in which Google invested in a company attempting to deliver broadband Internet access over existing electrical wires. Still, most online recognize that "typo-squatting," as the practice is sometimes known, is a less-than-ethical business if for no other reason than the fact that it would be all but impossible for a company to defend itself short of registering all possible variants on its legitimate domain name , a costly proposition at best.
Brought to you by the Guardian eCommerce Privacy Seal Program.
The ruling came under the Uniform Domain Name Dispute Resolution Policy established by the Internet Corporation for Assigned Names and Numbers (ICANN) as an alternative to lengthy and costly lawsuits. The process is meant to offer faster results and appears to have worked in this case: Google filed the complaint less than two months ago. The arbitration was binding, and under the panel's ruling, ICANN will now shut down the Web sites. Because it is not a court ruling, the case isn't seen as setting legal precedent. However, for companies like Google that carefully guard their names as part of their brand images, it could be reason to more aggressively pursue alleged trademark violators.
SearchEngineWatch.com Editor Gary Price said the case could indicate a stepped-up enforcement posture by Google of one of its biggest assets -- its brand name and image.
"It will be worth monitoring to see if Google will begin asserting its legal rights over other registered domains that either resemble Google or include the word Google in the domain name," he said.
A number of sites that are takes on the Google name, such as GoogleWatch.com and Googlenews.com, currently lead to other generic search sites. In addition, several others sites that actually provide information about Google are located at URLs that are take-offs on the Google name.
Google is no stranger to trademark disputes and has found itself on both sides of the hearing table. A year ago, Stelor Productions, owner of the Googles.com Web site, which markets products aimed at young children, filed suit against Google, saying it had infringed on Stelor's trademark rights by using its search engine to market children's products. Also, Google's own AdSense program has been targeted by companies that said their trademarks were violated when Google peddled ad space via keywords that enjoy trademark protection. The latter case is seen as far more important to the overall Web industry, since it speaks to the marketing side of the search business . The news of the win and its overall importance drew mixed reactions.
Many analysts said the ruling broke little new ground, especially since the defendant merely defaulted, which left the arbitration panel with little choice but to rule in Google's favor.
IDC analyst Jonathan Gaw said the streamlined process that Google employed was designed to reduce cybersquatting by making it faster and easier for companies to assert their rights. In that sense, the process seems to be working. Gaw noted that while celebrities and others -- including the recently chosen Catholic Pope -- are still targeted by squatting, incidences of cybersquatting aimed at corporations seems to be far lower than at the peak in the 1990s. However, to some others, the ruling was the latest example of Google aggressively asserting its dominance over the Web. That view -- that Google has designs on controlling ever more of the Web -- has been gaining momentum. Fueling the concern was a move last week in which Google invested in a company attempting to deliver broadband Internet access over existing electrical wires. Still, most online recognize that "typo-squatting," as the practice is sometimes known, is a less-than-ethical business if for no other reason than the fact that it would be all but impossible for a company to defend itself short of registering all possible variants on its legitimate domain name , a costly proposition at best.
Brought to you by the Guardian eCommerce Privacy Seal Program.
Sunday, July 17, 2005
Selling Search Engine Optimization
Mike Minor admits his company's first Web site was a flop. "No one saw it," except friends and regular customers, said Minor, president of Vivian International, a distributor of ice machines based in Chesterfield, Mo. Then a friend referred him to Mark Forst and Bill Brasser, founders of Captiva Marketing in the St. Louis-suburb of Clayton. Captiva specializes in search engine optimization -- the art of getting a Web site to rank high on search engines, such as Google, Yahoo and MSN. After Captiva remade his Web site, Minor started getting lots of new leads. Soon, e-mail inquiries outpaced phone calls.
Life Imitating Online Art In fact, remaking the Web site remade the company. Minor shut down his warehouse and started selling machines on a drop-ship basis. Vivian International now sells a wider variety of machines to customers ranging from wine aficionados to poultry processors.
"They changed my business dramatically," Minor said. Search engine marketing has come into its own over the last decade, as more consumers and businesses turn to the Internet when they're looking for products and services to buy, said Kevin Lee, chairman of the Search Engine Marketing Professional Organization, a 350-member trade group based in New York.
And businesses large and small are recognizing the potential.
Lee estimates that companies spent US$4 billion last year on pay-per-click advertising and an undetermined amount on designing Web sites so they will rank higher in Internet searches.
Brown Shoe Co. uses paid and organic searches to drive customers to its Famous Footwear and Shoes.com Web sites as well as to build awareness of its brands, said Bill Bledsoe, manager of e-commerce for the company, which is based in Clayton. "You're trying to make yourself known and make yourself easy for customers to find," Bledsoe said. "It's a very customer-focused strategy." Search engine marketing can eliminate a lot of waste that occurs in mass advertising, said Todd Abrams, an adjunct professor of marketing at Washington University. It's particularly useful for selling products that customers want to research carefully, such as the purchase of a car or business-to-business sales.
The beauty of search engine marketing is that people who look at a Web site after doing a search are more interested in buying a particular product or service than people who might see a commercial while watching television or an ad as they flip through a magazine, Lee said.
"You're not bugging people," said Captiva's Forst. "You know that your target is interested."
Forst, 34, said he began investigating how search engines work about five years ago. Back then, he was sales and marketing director for Sinclair & Rush, a plastics molding company in Arnold, Mo. He started to build a new Web site for one of the company's divisions. But he didn't understand how to get it near the top of the list when customers searched online for the kinds of products the company makes. He figured someone had to rank No. 1 -- so why not Sinclair & Rush? "I spent every night learning how the rankings work," Forst said. He learned that most major search engines use a mathematical formula to rank Web pages, based partly on whether the page title or content matches search terms.
Some search engines look at the number of other sites that link to a particular Web page.
The other way to get to the top is with what's known as a paid search, which brings up sponsored links on the right side of the results screen, Forst said. In some cases he recommends that customers subscribe to paid searches, but he also works on ways to make customers' Web sites more search-friendly. "Every page has to be designed so you can get to the item you're trying to sell," Forst said. In many cases, he sets up pages for each product or division, so the search comes directly to the product rather than to the company's home page. Captiva was "really interested in what I did, how I did it and where I wanted to go," said Minor with Vivian International. "I was thrilled from the get-go, because they were asking the right questions."
Search engine optimization might not always produce the dramatic results that Vivian International experienced. But several clients said Captiva helped them find more leads and convert those leads into sales. Chris Weis, marketing director for the Nu-Era Group of St. Louis, said Captiva helped revamp the store-supply firm's Web site to produce more sales. "We had some very specific sales goals that we needed to meet," Weis said. "We not only met those goals, but we exceeded them drastically." Captiva currently has three people working directly with clients -- Forst, Brasser and Forst's sister, Beth McLaughlin. Two other employees design and program Web sites. The company works directly with clients as well as in partnership with advertising agencies. Captiva is managing more than 60 sites and monitoring them for performance every month. Forst said he has to keep up with search engines' algorithms and the best key words for each site, because they keep changing. "A lot of this business is testing," Forst said. "We have to be experts at every aspect of search engine marketing."
Brought to you by Guardian eCommerce.
Life Imitating Online Art In fact, remaking the Web site remade the company. Minor shut down his warehouse and started selling machines on a drop-ship basis. Vivian International now sells a wider variety of machines to customers ranging from wine aficionados to poultry processors.
"They changed my business dramatically," Minor said. Search engine marketing has come into its own over the last decade, as more consumers and businesses turn to the Internet when they're looking for products and services to buy, said Kevin Lee, chairman of the Search Engine Marketing Professional Organization, a 350-member trade group based in New York.
And businesses large and small are recognizing the potential.
Lee estimates that companies spent US$4 billion last year on pay-per-click advertising and an undetermined amount on designing Web sites so they will rank higher in Internet searches.
Brown Shoe Co. uses paid and organic searches to drive customers to its Famous Footwear and Shoes.com Web sites as well as to build awareness of its brands, said Bill Bledsoe, manager of e-commerce for the company, which is based in Clayton. "You're trying to make yourself known and make yourself easy for customers to find," Bledsoe said. "It's a very customer-focused strategy." Search engine marketing can eliminate a lot of waste that occurs in mass advertising, said Todd Abrams, an adjunct professor of marketing at Washington University. It's particularly useful for selling products that customers want to research carefully, such as the purchase of a car or business-to-business sales.
The beauty of search engine marketing is that people who look at a Web site after doing a search are more interested in buying a particular product or service than people who might see a commercial while watching television or an ad as they flip through a magazine, Lee said.
"You're not bugging people," said Captiva's Forst. "You know that your target is interested."
Forst, 34, said he began investigating how search engines work about five years ago. Back then, he was sales and marketing director for Sinclair & Rush, a plastics molding company in Arnold, Mo. He started to build a new Web site for one of the company's divisions. But he didn't understand how to get it near the top of the list when customers searched online for the kinds of products the company makes. He figured someone had to rank No. 1 -- so why not Sinclair & Rush? "I spent every night learning how the rankings work," Forst said. He learned that most major search engines use a mathematical formula to rank Web pages, based partly on whether the page title or content matches search terms.
Some search engines look at the number of other sites that link to a particular Web page.
The other way to get to the top is with what's known as a paid search, which brings up sponsored links on the right side of the results screen, Forst said. In some cases he recommends that customers subscribe to paid searches, but he also works on ways to make customers' Web sites more search-friendly. "Every page has to be designed so you can get to the item you're trying to sell," Forst said. In many cases, he sets up pages for each product or division, so the search comes directly to the product rather than to the company's home page. Captiva was "really interested in what I did, how I did it and where I wanted to go," said Minor with Vivian International. "I was thrilled from the get-go, because they were asking the right questions."
Search engine optimization might not always produce the dramatic results that Vivian International experienced. But several clients said Captiva helped them find more leads and convert those leads into sales. Chris Weis, marketing director for the Nu-Era Group of St. Louis, said Captiva helped revamp the store-supply firm's Web site to produce more sales. "We had some very specific sales goals that we needed to meet," Weis said. "We not only met those goals, but we exceeded them drastically." Captiva currently has three people working directly with clients -- Forst, Brasser and Forst's sister, Beth McLaughlin. Two other employees design and program Web sites. The company works directly with clients as well as in partnership with advertising agencies. Captiva is managing more than 60 sites and monitoring them for performance every month. Forst said he has to keep up with search engines' algorithms and the best key words for each site, because they keep changing. "A lot of this business is testing," Forst said. "We have to be experts at every aspect of search engine marketing."
Brought to you by Guardian eCommerce.
Saturday, July 16, 2005
High-Speed Internet Use Rises 34 Percent
High-speed Internet use by U.S. businesses and households rose 34 percent in 2004 to 37.9 million lines, the Federal Communications Commission said yesterday. The figures were cited by the agency's chairman as proof that the FCC's broadband policy is working. Digital subscriber line, or DSL, service increased 45 percent last year to 13.8 million lines. Cable modem use climbed 30 percent to 21.4 million lines.
Other Internet connections using wireless and satellite increased by 50 percent to 500,000 last year, the FCC said, while use of optical fiber and powerlines rose 16 percent to 700,000.
Network-Sharing Rules Late last year, the agency made a number of decisions designed to spur broadband deployment by easing network-sharing rules for Bell companies. In a column published in yesterday's Wall Street Journal, FCC Chairman Kevin Martin said broadband deployment is his "highest priority." Critics note that the U.S. ranks as low as 16th in terms of broadband use among major countries.
Brought to you by Guardian eCommerce.
Other Internet connections using wireless and satellite increased by 50 percent to 500,000 last year, the FCC said, while use of optical fiber and powerlines rose 16 percent to 700,000.
Network-Sharing Rules Late last year, the agency made a number of decisions designed to spur broadband deployment by easing network-sharing rules for Bell companies. In a column published in yesterday's Wall Street Journal, FCC Chairman Kevin Martin said broadband deployment is his "highest priority." Critics note that the U.S. ranks as low as 16th in terms of broadband use among major countries.
Brought to you by Guardian eCommerce.
Friday, July 15, 2005
Report: Consumers Changing Online Habits Due to Spyware
One of the long-feared results of Internet security problems -- its potential effect on consumer behavior and eventually, spending -- might be starting to materialize, according to a new report.
The Pew Internet & American Life project says that a survey that it conducted found that 91 percent of Internet users have changed their online behavior out of fear of falling victim to hidden spyware scams. Pew Project Associate Director Susannah Fox said the changes might be the result of increasing awareness of spyware's dangers and its prevalence online. She said 68 percent of Web users -- or some 93 million Americans -- had computer problems in the past year consistent with spyware and virus infections.
"Familiarity breeds contempt when it comes to spyware. The more Internet users know about these programs, the more they want to sound the alarm and take steps to protect themselves," Fox said.
She added, "These survey results show that as Internet users gain experience with spyware and adware, they are more likely to say they are changing their behavior." For now, the types of sites that users are avoiding are mainly peer-to-peer networks and sites about which little is known. To date, core e-commerce appears to be unaffected by the concerns, with consumers confident they can trust well-known sites -- from eBay to Amazon and with many in between -- to be spyware free.
However, analysts still worry that continued high-profile security concerns will, over time, convince some would-be online shoppers to steer clear of the Web, or at least to be very guarded with their information when they go there.
Pew said that 49 percent of Web users regard spyware as a "serious threat to their online security," yet, somewhat ironically, some 73 percent also said they do not closely read the terms of service when agreeing to download peer-to-peer programs or other freeware from the Web. Spyware is often piggybacked onto those types of programs, often loaded onto a user's computer without his or her knowledge at the same time as a legitimate program. The spyware scourge might get the blame for problems it's not even causing. Pew said 60 percent of users did not ever figure out what caused problems with their PCs. A quarter of users have seen programs appear on their systems that they did not knowingly install, however, and 18 percent said their home pages changed for no apparent reason.
That uncertainty might be the most alarming development for the Internet industry and e-commerce.
"What is more alarming is the larger universe of people who have struggled with mysterious computer problems, but have no idea why," Fox said. "Internet users are increasingly frustrated and frightened that they are not in charge of their Internet experience." That sense of lost control stands to dampen e-commerce growth as much as any specific security threat. After all, viruses and related threats have been part of the Internet culture from the start and have not impeded growth to date.
However, spyware is seen as somewhat different in that even users who take the precautionary measures advised by PC security experts -- such as not opening unknown attachments to e-mails and keeping virus software up-to-date -- is not always enough to keep spyware at bay. Spyware has been around for some time, but in recent months has shot to the top of the hit list when it comes to Web security. New York state Attorney General Eliot Spitzer made history by targeting a legitimate online marketing firm -- Intermix -- as a propagator of adware and spyware, a case that was recently settled with no admission of wrongdoing.
One of the bones of contention in that and other cases is what exactly qualifies as spyware. Marketing firms say ad-delivering software and other programs are being lumped in with true spyware, which is intended to be used to track a victim's actions and capture personal and sensitive information that can be used in identity theft and other schemes. Part of the confusion and concern among consumers might stem from that same difficulty in defining what spyware is. Many antivirus firms have released programs to stem spyware and those filters often capture a wide range of different software code. Richard Stiennon, vice president for Threat Research at Webroot, said that spyware can be as simple as tracking cookies installed on a user's machine without his or her knowledge. By Webroot's count, 144,000 different URLs reviewed at the end of March had some form of adware or spyware on them. "When you look at the big picture," a number of high-profile marketing sites fall under the spyware and adware umbrella, Stiennon said. "That's probably not helping consumers feel safe or in control."
Brought to you by Guardian eCommerce.
The Pew Internet & American Life project says that a survey that it conducted found that 91 percent of Internet users have changed their online behavior out of fear of falling victim to hidden spyware scams. Pew Project Associate Director Susannah Fox said the changes might be the result of increasing awareness of spyware's dangers and its prevalence online. She said 68 percent of Web users -- or some 93 million Americans -- had computer problems in the past year consistent with spyware and virus infections.
"Familiarity breeds contempt when it comes to spyware. The more Internet users know about these programs, the more they want to sound the alarm and take steps to protect themselves," Fox said.
She added, "These survey results show that as Internet users gain experience with spyware and adware, they are more likely to say they are changing their behavior." For now, the types of sites that users are avoiding are mainly peer-to-peer networks and sites about which little is known. To date, core e-commerce appears to be unaffected by the concerns, with consumers confident they can trust well-known sites -- from eBay to Amazon and with many in between -- to be spyware free.
However, analysts still worry that continued high-profile security concerns will, over time, convince some would-be online shoppers to steer clear of the Web, or at least to be very guarded with their information when they go there.
Pew said that 49 percent of Web users regard spyware as a "serious threat to their online security," yet, somewhat ironically, some 73 percent also said they do not closely read the terms of service when agreeing to download peer-to-peer programs or other freeware from the Web. Spyware is often piggybacked onto those types of programs, often loaded onto a user's computer without his or her knowledge at the same time as a legitimate program. The spyware scourge might get the blame for problems it's not even causing. Pew said 60 percent of users did not ever figure out what caused problems with their PCs. A quarter of users have seen programs appear on their systems that they did not knowingly install, however, and 18 percent said their home pages changed for no apparent reason.
That uncertainty might be the most alarming development for the Internet industry and e-commerce.
"What is more alarming is the larger universe of people who have struggled with mysterious computer problems, but have no idea why," Fox said. "Internet users are increasingly frustrated and frightened that they are not in charge of their Internet experience." That sense of lost control stands to dampen e-commerce growth as much as any specific security threat. After all, viruses and related threats have been part of the Internet culture from the start and have not impeded growth to date.
However, spyware is seen as somewhat different in that even users who take the precautionary measures advised by PC security experts -- such as not opening unknown attachments to e-mails and keeping virus software up-to-date -- is not always enough to keep spyware at bay. Spyware has been around for some time, but in recent months has shot to the top of the hit list when it comes to Web security. New York state Attorney General Eliot Spitzer made history by targeting a legitimate online marketing firm -- Intermix -- as a propagator of adware and spyware, a case that was recently settled with no admission of wrongdoing.
One of the bones of contention in that and other cases is what exactly qualifies as spyware. Marketing firms say ad-delivering software and other programs are being lumped in with true spyware, which is intended to be used to track a victim's actions and capture personal and sensitive information that can be used in identity theft and other schemes. Part of the confusion and concern among consumers might stem from that same difficulty in defining what spyware is. Many antivirus firms have released programs to stem spyware and those filters often capture a wide range of different software code. Richard Stiennon, vice president for Threat Research at Webroot, said that spyware can be as simple as tracking cookies installed on a user's machine without his or her knowledge. By Webroot's count, 144,000 different URLs reviewed at the end of March had some form of adware or spyware on them. "When you look at the big picture," a number of high-profile marketing sites fall under the spyware and adware umbrella, Stiennon said. "That's probably not helping consumers feel safe or in control."
Brought to you by Guardian eCommerce.
Thursday, July 14, 2005
Is It Spyware or Adware?
Slip a prerecorded DVD into your computer, and this software program quietly goes online to report what you're watching, like an alien contacting its mother ship. Is it spyware? Not necessarily. The "mother ship," in this case, is Microsoft. The software is the Windows Media Player. To some privacy advocates, the Microsoft program behaves in certain ways like spyware, which illustrates a basic problem: It's tough to fight something when you have trouble simply identifying it. Critics say the spyware label can apply to any secretive software that does something on your computer without your knowledge and for somebody else's purposes.
There is no debate that it refers to plainly malicious programs that spy on your e-mail, hijack your modem or steal account numbers.
But when the risks are less obvious -- say, with an adware program that tracks your Web surfing to deliver targeted pop-up ads -- consensus has been harder to come by. Critics say that adware, like spyware, is often downloaded by mistake or through deception -- sometimes by clicking on a "Security Warning" that wrongly implies a program is needed to continue viewing a Web site, or occasionally by just visiting a site. Adware can quietly collect data about users' online habits. It can cause computers to become painfully slow or crash. And it can be difficult to remove.
Adware-makers counter that they use technology to deliver a smarter form of advertising that consumers willingly accept, because they want the games or entertainment offered in exchange, or simply welcome the ads and special offers. Stuck in the middle are people such as Kevin Charnigo of Doylestown, Pa. He never knowingly accepted any of the programs clogging his 3-year-old computer, but it became so jammed with unwanted software that he was ready to toss it out. Even with a high-speed connection, he could barely get e-mail or surf the Web. "I would turn the computer on and I'd start seeing pop-ups before I even logged on to the Internet," said Charnigo, regional pharmacy supervisor for CVS.
While Charnigo does not distinguish spyware from adware, or one piece of adware from another, leading adware-makers insist such distinctions are crucial. And their efforts are paying off.
Partly at their urging, the U.S. House of Representatives passed an anti-spyware bill in May that leaves adware alone if it is accepted voluntarily by computer users -- in return, say, for a downloaded game or screen saver -- and if it steers clear of features that are specifically prohibited, such as being difficult to remove.
Adware-makers also have pressed companies that make spyware-removal programs to quit labeling their programs as risky or even mentioning them at all. Symantec's new Norton Internet Security AntiSpyware Edition labels some adware "low risk" and recommends that users leave it alone. Kraig Lane, Symantec's product manager, said that as Symantec looked past programs that were hijacking computers or stealing personal data , it realized it was dealing with a different kind of threat. "People are used to antivirus programs where everything is black and white. Spyware and adware fall more into a gray area," Lane said. Some privacy advocates say spyware and adware are the latest examples of a commercial intrusion into personal computers that began with "cookies" -- small files that advertisers and Web sites place on personal computers to track a surfer's behavior.
Chis Hoofnagle, West Coast director for the Electronic Privacy Information Center , puts Windows Media Player in that same category. Microsoft says the online-reporting feature provides users with information about the DVDs they watch, collects no personal information , and can be disabled. Even so, Hoofnagle said, each program comes with a unique serial number. "By installing Windows Media Player, you've basically tagged your computer," he said.
Microsoft recently raised its profile in the spyware wars by offering computer users a beta-test version of an anti-spyware program developed by a company it acquired. Michael Serdikoff, a Wyncote, Pa., computer consultant who says spyware and adware remain the largest problem he faces, is one of many who see irony in the software giant's new role. Not that Microsoft is wrong to target spyware, he said. But he and others blame Microsoft for much of the problem, which they say was fueled by security holes in its software. Even so, Serdikoff cuts Microsoft a break.
"When they designed it, this stuff wasn't even out there," he said. "Nobody was forward-thinking enough."
Brought to you by Guardian eCommerce.
There is no debate that it refers to plainly malicious programs that spy on your e-mail, hijack your modem or steal account numbers.
But when the risks are less obvious -- say, with an adware program that tracks your Web surfing to deliver targeted pop-up ads -- consensus has been harder to come by. Critics say that adware, like spyware, is often downloaded by mistake or through deception -- sometimes by clicking on a "Security Warning" that wrongly implies a program is needed to continue viewing a Web site, or occasionally by just visiting a site. Adware can quietly collect data about users' online habits. It can cause computers to become painfully slow or crash. And it can be difficult to remove.
Adware-makers counter that they use technology to deliver a smarter form of advertising that consumers willingly accept, because they want the games or entertainment offered in exchange, or simply welcome the ads and special offers. Stuck in the middle are people such as Kevin Charnigo of Doylestown, Pa. He never knowingly accepted any of the programs clogging his 3-year-old computer, but it became so jammed with unwanted software that he was ready to toss it out. Even with a high-speed connection, he could barely get e-mail or surf the Web. "I would turn the computer on and I'd start seeing pop-ups before I even logged on to the Internet," said Charnigo, regional pharmacy supervisor for CVS.
While Charnigo does not distinguish spyware from adware, or one piece of adware from another, leading adware-makers insist such distinctions are crucial. And their efforts are paying off.
Partly at their urging, the U.S. House of Representatives passed an anti-spyware bill in May that leaves adware alone if it is accepted voluntarily by computer users -- in return, say, for a downloaded game or screen saver -- and if it steers clear of features that are specifically prohibited, such as being difficult to remove.
Adware-makers also have pressed companies that make spyware-removal programs to quit labeling their programs as risky or even mentioning them at all. Symantec's new Norton Internet Security AntiSpyware Edition labels some adware "low risk" and recommends that users leave it alone. Kraig Lane, Symantec's product manager, said that as Symantec looked past programs that were hijacking computers or stealing personal data , it realized it was dealing with a different kind of threat. "People are used to antivirus programs where everything is black and white. Spyware and adware fall more into a gray area," Lane said. Some privacy advocates say spyware and adware are the latest examples of a commercial intrusion into personal computers that began with "cookies" -- small files that advertisers and Web sites place on personal computers to track a surfer's behavior.
Chis Hoofnagle, West Coast director for the Electronic Privacy Information Center , puts Windows Media Player in that same category. Microsoft says the online-reporting feature provides users with information about the DVDs they watch, collects no personal information , and can be disabled. Even so, Hoofnagle said, each program comes with a unique serial number. "By installing Windows Media Player, you've basically tagged your computer," he said.
Microsoft recently raised its profile in the spyware wars by offering computer users a beta-test version of an anti-spyware program developed by a company it acquired. Michael Serdikoff, a Wyncote, Pa., computer consultant who says spyware and adware remain the largest problem he faces, is one of many who see irony in the software giant's new role. Not that Microsoft is wrong to target spyware, he said. But he and others blame Microsoft for much of the problem, which they say was fueled by security holes in its software. Even so, Serdikoff cuts Microsoft a break.
"When they designed it, this stuff wasn't even out there," he said. "Nobody was forward-thinking enough."
Brought to you by Guardian eCommerce.
Wednesday, July 13, 2005
Amazon.com Sitting Pretty 10 Years Later
Soon after Amazon.com debuted 10 years ago, Jeff Bezos and his handful of employees spent late summer nights packing books in a tiny warehouse, scrambling to ship a growing gush of orders. Today, the man who has grown accustomed to being hailed the king of Internet commerce runs a global powerhouse that did nearly US$7 billion in sales last year, dealing in everything from banjo cases to wild boar baby back ribs. As more businesses beef up their online operations, is the company that helped get it all started in danger of seeing its dominance eroded by the competitors it helped spawn?
Time will tell, but industry experts say Amazon is well positioned to maintain a firm grip on its title as the undisputed e-commerce leader. "I think Amazon's biggest challenge is itself. They've really raised the bar for the entire industry," said Kurt Peters, editor of Internet Retailer, a monthly magazine covers the business. In the beginning, Bezos said he had no plans to sell anything but books online. But after it went live on July 16, 1995, the business took off more quickly than anyone had predicted, and before long customers started clamoring for more. "We actually started to get e-mails from customers saying, 'Would you consider selling music, because I'd really like to buy music this way, and DVDs, and electronics?'" Bezos said in a recent interview.
Amazon has nearly 49 million active customers. They bought more electronics during last year's holiday blitz than books, a first for the company. With $6.92 billion in sales in 2004, Amazon ranked at the top of Internet Retailer's annual top 400 list, well ahead of computer maker Dell, which posted $3.25 billion in online business-to-consumer sales. Office Depot, which has a partnership with Amazon, wasn't far behind, with $3.1 billion. EBay users sold $34.2 billion in merchandise through the online auction house in 2004, but the magazine doesn't include the site on the list because it's essentially an online shopping bazaar, not a retailer.
Scott Devitt, an analyst with the Baltimore investment firm Legg Mason Wood Walker said he thinks comparison shopping sites like Shopping.com and Shopzilla.com pose the most formidable threat, because they can often push prices lower than Amazon. "But when you buy from a comparison shopping site, just like when you buy from eBay, you don't know what you're getting from the merchant," Devitt said. Amazon has had a decade to build up trust that it will deliver orders on time and cheaply enough to keep customers coming back. Amazon's groundwork paved the way for competitors to follow, but Devitt says he thinks most retailers, especially brick-and-mortar shops, have a lot of catching up to do: "Amazon is always one step ahead."
"Earth's Biggest Selection" no doubt owes at least part of its name to the alliances it has forged with dozens of high-profile retailers, including Target, Macy's, Nordstrom, Toys R Us and Wine.com. "If there were a significant interruption to those [partnerships], that could be a problem for Amazon," said Richard Hastings, a retail analyst for the credit-ratings firm Bernard Sands.
To hold on to its spot as top dog, Hastings said Amazon will have to keep being nimble to fend off attackers at the flanks of its business, like eBay, online DVD rental Netflix and discount retailer Overstock.com . More than 900,000 third-party sellers now hawk their wares on Amazon, making up more than a quarter of last year's overall sales -- a sure sign that Amazon is getting serious about taking on eBay. And last month the company started renting DVDs in Germany, six months after it got into the same business in the United Kingdom.
Amazon hasn't said when -- or if -- it might go head-to-head with Netflix, which took over Wal-Mart Stores' DVD rental business in May after the world's largest retailer admitted it couldn't compete. Amazon first ventured beyond books when it added music and DVDs in 1998. Electronics, toys, games, home improvement items, software and video games came a year later. Today it has 31 product categories and does business in seven countries. International sales accounted for nearly half the company's revenue last year, and Bezos has vowed to continue expanding overseas.
Analysts say that Amazon has won over the masses with its vast selection, a brand name everyone knows, a site that's easy to navigate and a reputation for reliability . "They've developed an extremely loyal customer base, and they've cultivated that by continually lowering prices and adding features to their Web site," said Dan Geiman, an analyst with McAdams Wright Ragen in Seattle.
The company has also weathered hard times that killed off most early online retailers.
As the dot-com craze reached fever pitch, Amazon made some bad investments in failures like Living.com and Pets.com. When the bubble burst in 2000, it scaled back and laid off 1,300 employees. And it took several years to post a profit. The bumps in the road and the lingering volatility of the company's stock price don't seem to phase Amazon's eternally ebullient CEO.
"During those bubble years while the stock price was going up 30 percent a month, we would have all-hands meetings, and I would ask employees, 'Please do not feel 30 percent smarter because the stock went up 30 percent, because when it goes down 30 percent in a month, we'd have to feel 30 percent dumber'," Bezos said.
The stock has been trading in the mid-$30 range in recent months after topping $100 a share in the late 1990s. Bezos plays the unflappable optimist when he points out that, adjusting for splits, the stock started out at $1.50 a share. "In eight years, to go from $1.50 a share to $35 a share is unusually good performance, by any measure," he said.
Brought to you by Guardian eCommerce.
Time will tell, but industry experts say Amazon is well positioned to maintain a firm grip on its title as the undisputed e-commerce leader. "I think Amazon's biggest challenge is itself. They've really raised the bar for the entire industry," said Kurt Peters, editor of Internet Retailer, a monthly magazine covers the business. In the beginning, Bezos said he had no plans to sell anything but books online. But after it went live on July 16, 1995, the business took off more quickly than anyone had predicted, and before long customers started clamoring for more. "We actually started to get e-mails from customers saying, 'Would you consider selling music, because I'd really like to buy music this way, and DVDs, and electronics?'" Bezos said in a recent interview.
Amazon has nearly 49 million active customers. They bought more electronics during last year's holiday blitz than books, a first for the company. With $6.92 billion in sales in 2004, Amazon ranked at the top of Internet Retailer's annual top 400 list, well ahead of computer maker Dell, which posted $3.25 billion in online business-to-consumer sales. Office Depot, which has a partnership with Amazon, wasn't far behind, with $3.1 billion. EBay users sold $34.2 billion in merchandise through the online auction house in 2004, but the magazine doesn't include the site on the list because it's essentially an online shopping bazaar, not a retailer.
Scott Devitt, an analyst with the Baltimore investment firm Legg Mason Wood Walker said he thinks comparison shopping sites like Shopping.com and Shopzilla.com pose the most formidable threat, because they can often push prices lower than Amazon. "But when you buy from a comparison shopping site, just like when you buy from eBay, you don't know what you're getting from the merchant," Devitt said. Amazon has had a decade to build up trust that it will deliver orders on time and cheaply enough to keep customers coming back. Amazon's groundwork paved the way for competitors to follow, but Devitt says he thinks most retailers, especially brick-and-mortar shops, have a lot of catching up to do: "Amazon is always one step ahead."
"Earth's Biggest Selection" no doubt owes at least part of its name to the alliances it has forged with dozens of high-profile retailers, including Target, Macy's, Nordstrom, Toys R Us and Wine.com. "If there were a significant interruption to those [partnerships], that could be a problem for Amazon," said Richard Hastings, a retail analyst for the credit-ratings firm Bernard Sands.
To hold on to its spot as top dog, Hastings said Amazon will have to keep being nimble to fend off attackers at the flanks of its business, like eBay, online DVD rental Netflix and discount retailer Overstock.com . More than 900,000 third-party sellers now hawk their wares on Amazon, making up more than a quarter of last year's overall sales -- a sure sign that Amazon is getting serious about taking on eBay. And last month the company started renting DVDs in Germany, six months after it got into the same business in the United Kingdom.
Amazon hasn't said when -- or if -- it might go head-to-head with Netflix, which took over Wal-Mart Stores' DVD rental business in May after the world's largest retailer admitted it couldn't compete. Amazon first ventured beyond books when it added music and DVDs in 1998. Electronics, toys, games, home improvement items, software and video games came a year later. Today it has 31 product categories and does business in seven countries. International sales accounted for nearly half the company's revenue last year, and Bezos has vowed to continue expanding overseas.
Analysts say that Amazon has won over the masses with its vast selection, a brand name everyone knows, a site that's easy to navigate and a reputation for reliability . "They've developed an extremely loyal customer base, and they've cultivated that by continually lowering prices and adding features to their Web site," said Dan Geiman, an analyst with McAdams Wright Ragen in Seattle.
The company has also weathered hard times that killed off most early online retailers.
As the dot-com craze reached fever pitch, Amazon made some bad investments in failures like Living.com and Pets.com. When the bubble burst in 2000, it scaled back and laid off 1,300 employees. And it took several years to post a profit. The bumps in the road and the lingering volatility of the company's stock price don't seem to phase Amazon's eternally ebullient CEO.
"During those bubble years while the stock price was going up 30 percent a month, we would have all-hands meetings, and I would ask employees, 'Please do not feel 30 percent smarter because the stock went up 30 percent, because when it goes down 30 percent in a month, we'd have to feel 30 percent dumber'," Bezos said.
The stock has been trading in the mid-$30 range in recent months after topping $100 a share in the late 1990s. Bezos plays the unflappable optimist when he points out that, adjusting for splits, the stock started out at $1.50 a share. "In eight years, to go from $1.50 a share to $35 a share is unusually good performance, by any measure," he said.
Brought to you by Guardian eCommerce.
Tuesday, July 12, 2005
A Very Big Cyber Cyclone Developing in China
Today, for the first time, China has 100 million people on the Internet , 30 percent of whom are on broadband . Within a few years, a billion people in Asia will be playing with e-commerce. All that power and all that technology replicating at a phenomenal rate will create global shockwaves both in trade and communications. The entire continent of Asia, including India and several other highly populated countries, is not far behind. The process of this advance is still hard to imagine by Western nations, most of which are comfortably nestled in vast, rich lands with very low populations. When combined, this adoption of technology and new e-commerce attitudes in Asia creates the true ingredients in the making of a powerful cyber cyclone that will cut a clear path.
Come 2008, at the opening ceremonies of the Beijing Olympics, when the athletes march in unison to their beautifully orchestrated national anthems, the whole world will witness a sleeping giant take a dramatic turn. The nationalistic pendulums will swing and, with all the other bells and whistles in place, a new trade war involved in posturing and making this the dawn of an Asian Century will come into focus. Today in Asia, cell phones , computers and just about all other new paraphernalia is being purchased in several million units each and every single day. The price is becoming very affordable, and the population is being submerged in these new technologies. In addition, productivity is increasing and the easy life is becoming more widely embraced. The impact is awesome.
While the West took decades to develop and painstakingly bring to the market new technologies like fax machines, which were initially the size of a suitcase, and cell phones, which at first were the size of a briefcase, Asians got sleek, small, turnkey solutions from the get go, while missing the early cycles of the IT revolution. Those early cycles included huge costs to refine innovations and expensive obsolescence. Now there is cheap, off the shelf, all set, ready to go technology with full integration and full compatibility. Wow.
This emerging Internet-driven, technology-dependent and telecommunication-based society is also showing a cute sense of national and traditional values, directly reflecting in lifestyle change and consumer behavior throughout Asia. The marketing and branding of products and ideas are in the forefront. There is also a dramatic increase in the production of local products backed by extremely fast distribution of marketing messages via cyber branding, almost becoming a killer to a lot of old-style Western media blitzes promoting Western products.
There is an undercurrent of pride seriously influencing the markets in Asia, a rise in a subculture based on embracing local ethnicity and nationalistic values. Western branding practices when marketing pushed gaudily packaged, overpriced Western-style products and services were mostly oblivious to local sensitivities. The concept that consumers are just sheep, so commonly and sometimes successfully used by Western ad agencies, has been adversely noted in the East. Most now fully understand that they are Asians first.
Overall, the benefits of technology will be felt far more greatly in Asia at the grass-root level then anywhere else in the world. The speedy low-cost Asian workers, their mass interaction and innovative spirits suppressed over centuries, are all about to be released. While the West is losing its grip by the hour on the global branding of new and powerful products and services, the number of trademark applications filed in China each year for three years in a row were equal to all the new trademark applications filed in the world combined. Filing new trademarks positively indicates the introduction of new things in the markets. The Western branding edge is turning soft, as the East is aggressively adopting global cyber branding and packaging. The real question is: What's the future of marketing and branding, Western style? Where will be the next big expanding markets for branding?
What will the West and the rest of the world do for their corporate brand positioning to combat this awesome force? Furthermore, what will happen when all this e-commerce activity is funneled into the living rooms of every consumer of the globe? Marketers and just about everyone else beware. A very big cyber-cyclone cometh our way.
Brought to you by The Guardian eCommerce Safe Site Privacy Seal Program.
Come 2008, at the opening ceremonies of the Beijing Olympics, when the athletes march in unison to their beautifully orchestrated national anthems, the whole world will witness a sleeping giant take a dramatic turn. The nationalistic pendulums will swing and, with all the other bells and whistles in place, a new trade war involved in posturing and making this the dawn of an Asian Century will come into focus. Today in Asia, cell phones , computers and just about all other new paraphernalia is being purchased in several million units each and every single day. The price is becoming very affordable, and the population is being submerged in these new technologies. In addition, productivity is increasing and the easy life is becoming more widely embraced. The impact is awesome.
While the West took decades to develop and painstakingly bring to the market new technologies like fax machines, which were initially the size of a suitcase, and cell phones, which at first were the size of a briefcase, Asians got sleek, small, turnkey solutions from the get go, while missing the early cycles of the IT revolution. Those early cycles included huge costs to refine innovations and expensive obsolescence. Now there is cheap, off the shelf, all set, ready to go technology with full integration and full compatibility. Wow.
This emerging Internet-driven, technology-dependent and telecommunication-based society is also showing a cute sense of national and traditional values, directly reflecting in lifestyle change and consumer behavior throughout Asia. The marketing and branding of products and ideas are in the forefront. There is also a dramatic increase in the production of local products backed by extremely fast distribution of marketing messages via cyber branding, almost becoming a killer to a lot of old-style Western media blitzes promoting Western products.
There is an undercurrent of pride seriously influencing the markets in Asia, a rise in a subculture based on embracing local ethnicity and nationalistic values. Western branding practices when marketing pushed gaudily packaged, overpriced Western-style products and services were mostly oblivious to local sensitivities. The concept that consumers are just sheep, so commonly and sometimes successfully used by Western ad agencies, has been adversely noted in the East. Most now fully understand that they are Asians first.
Overall, the benefits of technology will be felt far more greatly in Asia at the grass-root level then anywhere else in the world. The speedy low-cost Asian workers, their mass interaction and innovative spirits suppressed over centuries, are all about to be released. While the West is losing its grip by the hour on the global branding of new and powerful products and services, the number of trademark applications filed in China each year for three years in a row were equal to all the new trademark applications filed in the world combined. Filing new trademarks positively indicates the introduction of new things in the markets. The Western branding edge is turning soft, as the East is aggressively adopting global cyber branding and packaging. The real question is: What's the future of marketing and branding, Western style? Where will be the next big expanding markets for branding?
What will the West and the rest of the world do for their corporate brand positioning to combat this awesome force? Furthermore, what will happen when all this e-commerce activity is funneled into the living rooms of every consumer of the globe? Marketers and just about everyone else beware. A very big cyber-cyclone cometh our way.
Brought to you by The Guardian eCommerce Safe Site Privacy Seal Program.
