Monday, October 31, 2005
New Bankruptcy Rules Take Effect
New rules meant to make it tougher for individuals to erase debt by filing for bankruptcy go into effect today and experts say consumers may be in for a shock if they run into financial hard times.
The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 is being billed as the first major overhaul of bankruptcy laws in nearly 30 years. The rules require that individuals consult with a credit counselor and also pass a means test before they are allowed to file for Chapter 7 bankruptcy, which can eliminate many debts and has been used as a way of creating a clean slate after a waiting period.
The means test examines a consumer's income levels as well as the type of debt they face and is meant to exclude individuals who ran themselves into debt through discretionary purchases from seeking shelter in bankruptcy. Most filers with above-average income will not be allowed to use Chapter 7 bankruptcy to eliminate debt but instead create five-year re-payment plans. Many jurisdictions nationwide saw a surge in the number of last-minute filings leading up to today's deadline, with filings rising 10-fold in some locations.
Though they support directing debt-strapped consumers to counselors for advice, many consumer advocates have been critical of the changes, saying the changes fail to take into account whether credit card companies or others issued credit to consumers knowing they were bad risks. Some groups also worry that more aggressive collections activity will result. According to Nick Iezza, an attorney with Spiwak & Iezza, a top Southern California collection law firm, the changes will make it "substantially harder" for people to receive full bankruptcy protection from creditors. The new law also has two implications for businesses: For those thinking about trying to file bankruptcy to buy time to reorganize, the new laws create shorter and more stringent deadlines for emerging from bankruptcy with a plan to repay debts.
And for those who are owed money by consumers, the changes will allow for more aggressive pursuit of collections, said Iezza. Some credit card companies, who widely supported the changes and in some cases lobbied on their behalf, already saw a negative impact from the law before it took effect. Citigroup reported a decrease in its net margins as a result of more bankruptcy filings, the company said. But the main thrust of the changes are aimed at consumers who use bankruptcy as a way of eliminating debt and starting fresh.
Some economists warn that the U.S. consumers' appetite for credit poses grave long-term risks, especially when interest rates are starting to rise, making it more expensive to attain credit from a variety of sources, from home equity loans and auto loans to credit cards. Credit industry data estimates that Americans are carrying some US$800 billion worth of credit card debt, or more than $7,200 for each household in the country. Another $1.3 trillion is owned in car loans, personal loans and retailer-arranged financing for major purchases such as appliances and computers.
Kelly Rote, communications manager for Money Management International, a credit counseling company, said the best outcome of the change may be more awareness of alternatives to bankruptcy and increased awareness among consumers of the risks associated with credit.
"This bill ensures that consumers will be given tools to help avoid future financial trouble," Rote said.
Brought to you by the Privacy Seal Program from Guardian eCommerce.
The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 is being billed as the first major overhaul of bankruptcy laws in nearly 30 years. The rules require that individuals consult with a credit counselor and also pass a means test before they are allowed to file for Chapter 7 bankruptcy, which can eliminate many debts and has been used as a way of creating a clean slate after a waiting period.
The means test examines a consumer's income levels as well as the type of debt they face and is meant to exclude individuals who ran themselves into debt through discretionary purchases from seeking shelter in bankruptcy. Most filers with above-average income will not be allowed to use Chapter 7 bankruptcy to eliminate debt but instead create five-year re-payment plans. Many jurisdictions nationwide saw a surge in the number of last-minute filings leading up to today's deadline, with filings rising 10-fold in some locations.
Though they support directing debt-strapped consumers to counselors for advice, many consumer advocates have been critical of the changes, saying the changes fail to take into account whether credit card companies or others issued credit to consumers knowing they were bad risks. Some groups also worry that more aggressive collections activity will result. According to Nick Iezza, an attorney with Spiwak & Iezza, a top Southern California collection law firm, the changes will make it "substantially harder" for people to receive full bankruptcy protection from creditors. The new law also has two implications for businesses: For those thinking about trying to file bankruptcy to buy time to reorganize, the new laws create shorter and more stringent deadlines for emerging from bankruptcy with a plan to repay debts.
And for those who are owed money by consumers, the changes will allow for more aggressive pursuit of collections, said Iezza. Some credit card companies, who widely supported the changes and in some cases lobbied on their behalf, already saw a negative impact from the law before it took effect. Citigroup reported a decrease in its net margins as a result of more bankruptcy filings, the company said. But the main thrust of the changes are aimed at consumers who use bankruptcy as a way of eliminating debt and starting fresh.
Some economists warn that the U.S. consumers' appetite for credit poses grave long-term risks, especially when interest rates are starting to rise, making it more expensive to attain credit from a variety of sources, from home equity loans and auto loans to credit cards. Credit industry data estimates that Americans are carrying some US$800 billion worth of credit card debt, or more than $7,200 for each household in the country. Another $1.3 trillion is owned in car loans, personal loans and retailer-arranged financing for major purchases such as appliances and computers.
Kelly Rote, communications manager for Money Management International, a credit counseling company, said the best outcome of the change may be more awareness of alternatives to bankruptcy and increased awareness among consumers of the risks associated with credit.
"This bill ensures that consumers will be given tools to help avoid future financial trouble," Rote said.
Brought to you by the Privacy Seal Program from Guardian eCommerce.
Sunday, October 30, 2005
High-Tech Hot for Holidays
Who would be dreaming of a big holiday retail season in a year when the economy has been battered by everything from hurricanes to high gas prices? The answer: consumer electronics executives. Retailers are stocking up now with the products you'll be seeing for the holidays. They're betting consumers will spend big bucks on big-screen TVs, iPods and game systems.
Executives hope high gas prices, rather than denting spending, will take a toll elsewhere while consumers buy gadgets and home entertainment systems. Coupled with falling prices for flat-panel televisions and the usual crop of hot items surrounded by marketing buzz, that has some marketers making bold predictions. "You're seeing the perfect storm where everything is coming together for the best of the 25 seasons I've been in this business," said John Kelly, a senior vice president at Circuit City. Ken Bernhardt, a marketing professor at Georgia State University, is a bit less enthusiastic but agrees with the basic premise. "I think the very high gasoline prices, if they remain anywhere near these levels, may help consumer electronics," he said. "If people have less money to go out, and spend more time at home, they invest in an upgrade of their TV in particular."
Of course, that assumes consumers this year can make sense of the acronyms and options that confront television shoppers these days -- flat panel, flat screen, HDTV, digital, LCD, plasma, etc.
"There's a real potential for consumer confusion," Bernhardt said. "A lot of consumers that would like to buy one of these sets could become confused and just not buy."
Christian Roberts said he is willing to navigate TV technology to get a system that will let him be better entertained at home. "I drive a 2000 Dakota V8, and I get 17 miles to the gallon," he said. "Every time I pull in to get gas it's US$51. I'm shopping for a big-screen TV in the 55- to 61-inch range." Buyers at electronics chains already have made their major decisions on what to stock for the holidays, and they hope Roberts isn't alone in his desire to curl up next to a big-screen TV. For consumer electronics retailers, the holiday season is huge. It can be the difference between success and failure for the year. "The holidays up the ante in this business," said Mike Linton, the chief marketing officer at Best Buy.
The three-month period that includes the holidays accounts for much more than a quarter of a retailer's revenues. More than 30 percent of all consumer electronics spending occurs during that time, Bernhardt said. Flat-panel televisions have been beckoning consumers from store displays for more than five years. The fact that retailers think this will be a breakthrough year reflects a product mix that has become more evolutionary than revolutionary for 2005. It has been five years or so since the industry had a single must-have product, Linton said. That was the DVD player.
Refined or more affordable versions of flat-panel televisions, digital cameras, music players and video game consoles now are showing up high on annual gift lists. For example, iPod's Nano is simply a slimmed-down version of the popular music player from Apple. The buzz in game consoles this year is swirling around Microsoft's Xbox 360, an enhanced version of the original.
DVD recorders are now available for what a player once cost, and LCD computer monitors are now as cheap as tube monitors once were. Camcorders are moving toward direct-to-DVD or hard drive recording, while prices for miniDV tape models have fallen to the $250-to-$500 range.
But there is no single product that is expected to have the widespread draw that the DVD player once did. Instead, marketers are betting on general enthusiasm for digital products and consumers' desire to upgrade gadgets and computers they already own. "We are moving into the second phase of the digital revolution," said Best Buy's Linton. "There's a lot of customization. If you go back five or six years it was, 'Yeah, I have to get a laptop,' or a digital camera. What we are seeing now is that 'I'm going to add more choice and a lot more power to what I already have.'"
Linton also expects to see what he calls the "soccer mom" in his stores. "She will shop earlier and come in with a list," he said. "And since she's the family historian she'll be interested in products that work with the digital camera. There will be a big press on digital imaging." In fact, once you get past the consensus picks for the holidays, Kelly thinks printers made especially for printing photographs may be the dark-horse winners for the holiday season. "Now they have the digital camera, it's become the camera of choice," he said. "So they want to be able to print their own photos and do it fairly inexpensively." Bernhardt said the evolutionary products may well produce a strong season for electronics chains, but nothing beats that single, gotta-have-it item that may be missing this year. Such items not only boost revenue but spur sales of accessories and related products. "For instance, when, say, a toy is hot, then Wal-Mart and the others get incremental traffic driven by that," he said. "These people, once in the store, may buy CDs and DVDs, games for the GameBoys as well."
Brought to you by Guardian eCommerce.
Executives hope high gas prices, rather than denting spending, will take a toll elsewhere while consumers buy gadgets and home entertainment systems. Coupled with falling prices for flat-panel televisions and the usual crop of hot items surrounded by marketing buzz, that has some marketers making bold predictions. "You're seeing the perfect storm where everything is coming together for the best of the 25 seasons I've been in this business," said John Kelly, a senior vice president at Circuit City. Ken Bernhardt, a marketing professor at Georgia State University, is a bit less enthusiastic but agrees with the basic premise. "I think the very high gasoline prices, if they remain anywhere near these levels, may help consumer electronics," he said. "If people have less money to go out, and spend more time at home, they invest in an upgrade of their TV in particular."
Of course, that assumes consumers this year can make sense of the acronyms and options that confront television shoppers these days -- flat panel, flat screen, HDTV, digital, LCD, plasma, etc.
"There's a real potential for consumer confusion," Bernhardt said. "A lot of consumers that would like to buy one of these sets could become confused and just not buy."
Christian Roberts said he is willing to navigate TV technology to get a system that will let him be better entertained at home. "I drive a 2000 Dakota V8, and I get 17 miles to the gallon," he said. "Every time I pull in to get gas it's US$51. I'm shopping for a big-screen TV in the 55- to 61-inch range." Buyers at electronics chains already have made their major decisions on what to stock for the holidays, and they hope Roberts isn't alone in his desire to curl up next to a big-screen TV. For consumer electronics retailers, the holiday season is huge. It can be the difference between success and failure for the year. "The holidays up the ante in this business," said Mike Linton, the chief marketing officer at Best Buy.
The three-month period that includes the holidays accounts for much more than a quarter of a retailer's revenues. More than 30 percent of all consumer electronics spending occurs during that time, Bernhardt said. Flat-panel televisions have been beckoning consumers from store displays for more than five years. The fact that retailers think this will be a breakthrough year reflects a product mix that has become more evolutionary than revolutionary for 2005. It has been five years or so since the industry had a single must-have product, Linton said. That was the DVD player.
Refined or more affordable versions of flat-panel televisions, digital cameras, music players and video game consoles now are showing up high on annual gift lists. For example, iPod's Nano is simply a slimmed-down version of the popular music player from Apple. The buzz in game consoles this year is swirling around Microsoft's Xbox 360, an enhanced version of the original.
DVD recorders are now available for what a player once cost, and LCD computer monitors are now as cheap as tube monitors once were. Camcorders are moving toward direct-to-DVD or hard drive recording, while prices for miniDV tape models have fallen to the $250-to-$500 range.
But there is no single product that is expected to have the widespread draw that the DVD player once did. Instead, marketers are betting on general enthusiasm for digital products and consumers' desire to upgrade gadgets and computers they already own. "We are moving into the second phase of the digital revolution," said Best Buy's Linton. "There's a lot of customization. If you go back five or six years it was, 'Yeah, I have to get a laptop,' or a digital camera. What we are seeing now is that 'I'm going to add more choice and a lot more power to what I already have.'"
Linton also expects to see what he calls the "soccer mom" in his stores. "She will shop earlier and come in with a list," he said. "And since she's the family historian she'll be interested in products that work with the digital camera. There will be a big press on digital imaging." In fact, once you get past the consensus picks for the holidays, Kelly thinks printers made especially for printing photographs may be the dark-horse winners for the holiday season. "Now they have the digital camera, it's become the camera of choice," he said. "So they want to be able to print their own photos and do it fairly inexpensively." Bernhardt said the evolutionary products may well produce a strong season for electronics chains, but nothing beats that single, gotta-have-it item that may be missing this year. Such items not only boost revenue but spur sales of accessories and related products. "For instance, when, say, a toy is hot, then Wal-Mart and the others get incremental traffic driven by that," he said. "These people, once in the store, may buy CDs and DVDs, games for the GameBoys as well."
Brought to you by Guardian eCommerce.
Friday, October 28, 2005
eBay Buys VeriSign Payment Gateway
Looking to beef up its PayPal online payment service and enhance its reputation with online merchants outside of its online auction kingdom in particular, eBay said it would acquire the payment gateway system of security company VeriSign. EBay said its PayPal unit, which it took over in a US$1.5 billion acquisition more than three years ago, would acquire the VeriSign payment solution in a deal worth around $370 million. The prize in the buy is VeriSign's payment gateway, which handled some $40 billion in online payments last year. The acquisition will be used to offer PayPal as a payment solution to "tens of thousands" of new small and mid-sized businesses that engage in various types of online commerce, eBay said. In addition to the acquisition, eBay said the deal calls for VeriSign to provide eBay security support services and technology advice, including the purchase of 2 million security tokens. Tokens are physical devices, often key-chain sized USB plug-ins, that are used to create so-called two-factor security, which requires users to provide both a security password and the physical token.
PayPal President Jeff Jordan said VeriSign's gateway "perfectly complements" the existing PayPal technology. "This acquisition allows PayPal to give our customers more choice in payment services and grow our merchant services business even more quickly," he added. Analysts said the acquisition would help eBay build a more secure PayPal. While that may help soothe eBay buyers and sellers increasingly concerned about identity theft and other online security issues, it may also finally help propel PayPal into more of an all-purpose online payment solution that reaches well beyond the massive eBay community. Two-factor security will begin to be rolled out in 2006, eBay said. Security is a major concern to PayPal and eBay users, who have been repeated targets of phishing attacks, which use e-mails meant to look like official correspondence from the companies to trick users into turning over their personal and financial information to third party sites.
EBay said the purchase will be worth an additional $100 million to the top line at PayPal in 2006. The $370 million purchase price will be paid in either cash, stock or a combination, the companies said. EBay may also be eager to beef up its payment technology, and expand its merchant and consumer customer base, before Google's planned Google Wallet is released. Google executives have said the wallet service will not be a direct competitor to PayPal, but many analysts say it makes sense for Google to aim for the same payment middle-man spot where eBay has long held high ground. "A Google payment system may not compete directly with PayPal, but it could limit PayPal's expansion beyond eBay," said Piper Jaffray analyst Safa Rashtchy. "Anything that Google or Yahoo might do in this area could be a threat to eBay's ability to expand PayPal outside of eBay. " Being first to market with two-factor security will likely go a long way with merchants and others worried about online fraud. But some security experts have already predicted that hackers and others bent on stealing personal information will stay a step ahead of the changing technology.
A report released this summer by a UK researcher said the fact that ATM cards -- a form of two-factor security with both a PIN and the card needed to conduct a transaction -- are often stolen and compromised is proof that criminals will find a way to defeat even the most sophisticated security technology.
The latest acquisition comes as many tech world observers are still scratching their heads over eBay's most recent buy -- the $2.6 billion takeover of peer-to-peer voice calling company Skype.
Many see little synergeies in that deal, while the effort to beef up PayPal is seen as a winner, not only because PayPal is widely seen as being in the best position to become the Web standard for micro-payments or credit-card alternative, but also because the deal helps service eBay's core auction and fixed-price commerce platform. "The Skype deal spooked some people, but there is a case to be made for it and eBay has been actively making that case," said Forrester Research analyst Charlene Li. Because the VeriSign deal is much closer to its core business, the new buy likely won't require the same level of hand-holding, she added.
PayPal President Jeff Jordan said VeriSign's gateway "perfectly complements" the existing PayPal technology. "This acquisition allows PayPal to give our customers more choice in payment services and grow our merchant services business even more quickly," he added. Analysts said the acquisition would help eBay build a more secure PayPal. While that may help soothe eBay buyers and sellers increasingly concerned about identity theft and other online security issues, it may also finally help propel PayPal into more of an all-purpose online payment solution that reaches well beyond the massive eBay community. Two-factor security will begin to be rolled out in 2006, eBay said. Security is a major concern to PayPal and eBay users, who have been repeated targets of phishing attacks, which use e-mails meant to look like official correspondence from the companies to trick users into turning over their personal and financial information to third party sites.
EBay said the purchase will be worth an additional $100 million to the top line at PayPal in 2006. The $370 million purchase price will be paid in either cash, stock or a combination, the companies said. EBay may also be eager to beef up its payment technology, and expand its merchant and consumer customer base, before Google's planned Google Wallet is released. Google executives have said the wallet service will not be a direct competitor to PayPal, but many analysts say it makes sense for Google to aim for the same payment middle-man spot where eBay has long held high ground. "A Google payment system may not compete directly with PayPal, but it could limit PayPal's expansion beyond eBay," said Piper Jaffray analyst Safa Rashtchy. "Anything that Google or Yahoo might do in this area could be a threat to eBay's ability to expand PayPal outside of eBay. " Being first to market with two-factor security will likely go a long way with merchants and others worried about online fraud. But some security experts have already predicted that hackers and others bent on stealing personal information will stay a step ahead of the changing technology.
A report released this summer by a UK researcher said the fact that ATM cards -- a form of two-factor security with both a PIN and the card needed to conduct a transaction -- are often stolen and compromised is proof that criminals will find a way to defeat even the most sophisticated security technology.
The latest acquisition comes as many tech world observers are still scratching their heads over eBay's most recent buy -- the $2.6 billion takeover of peer-to-peer voice calling company Skype.
Many see little synergeies in that deal, while the effort to beef up PayPal is seen as a winner, not only because PayPal is widely seen as being in the best position to become the Web standard for micro-payments or credit-card alternative, but also because the deal helps service eBay's core auction and fixed-price commerce platform. "The Skype deal spooked some people, but there is a case to be made for it and eBay has been actively making that case," said Forrester Research analyst Charlene Li. Because the VeriSign deal is much closer to its core business, the new buy likely won't require the same level of hand-holding, she added.
Wednesday, October 26, 2005
High Prices at the Pump May Send Consumers Online
Rising gas prices may be withering consumer confidence these days, but online retailers see a silver lining in the disturbing trend. "People are going to be less inclined to drive to shopping centers," Bernard Baumohl, executive director of the Economic Outlook Group in Princeton Junction, N.J. said. "Instead, they're going to stay at home and if they carry on their usual holiday spending patterns then they will do it more likely online." He predicted that the 2006 holiday season will be a banner year for online retailers. "Right now, e-commerce represents about 2.2 percent of total retail sales, he said. "That number has been generally climbing over the last couple of years. "I would expect that we're going to see the biggest increase in online sales this season," he continued, "precisely because of American households just not wanting to spend that much money driving around to malls and wasting gas."
However, early indications are that consumers aren't fretting about gas prices putting a crimp in their holiday shopping styles. In a survey released earlier this month by NPD, of Port Washington, N.Y., 65 percent of consumers said that the price of gas would have very little or no impact on their holiday spending. The survey found that the average consumer expected to spend US$681 on holiday gifts this year, a three percent increase over last year's average of $655. Most of the consumers surveyed by NPD -- 67 percent -- said they'd be shopping at discount stores, like Wal-Mart and Target -- while 37 percent told pollsters they'd be shopping online. "The added dynamic this holiday season for consumers will be the higher fuel prices and higher heating expenses we're seeing in the market now," NPD Chief Industry Analyst Marshal Cohen said in a statement. "Despite these challenges, retailers will fare well this holiday season and consumers will not let these distractions spoil their holiday shopping spirit."
Consumers, however, aren't the only ones affected by rising fuel prices. Online merchants need to ship their wares to their customers and shipping requires fuel. It's common practice for shippers to pass increased fuel costs on to customers. Federal Express recently announced a 5.5 percent hike in its rates, effective Jan. 2, due to rising gas prices. And UPS passes fuel cost increases to its customers through monthly surcharges. According to UPS Spokesperson Susan Rosenberg, the surcharge for ground service customers is 3.5 percent in October and will be 4.5 percent in November. The surcharge for air services, which is capped, was even higher -- 12.5 percent for October, up from 9.5 percent in previous months. She said that fuel costs increased, year over year, 30 percent in the first quarter of 2005 and 45.3 percent in the second quarter.
However, according to the Shop.org/BizRate Research Holiday Mood Study released last week, Net merchants won't be passing their increased shipping costs onto consumers. The survey revealed that 79 percent of online retailers plan to offer free shipping, with conditions, during the holiday season. "Online shoppers are clearly motivated by promotions like free shipping, gifts with purchase, and special online offers," Shop.org Executive Director Scott Silverman said in a statement. "These promotions will enable customers to save money while helping retailers maximize their holiday sales." He added, "Because companies have planned for them as part of their overall marketing strategy, these promotions will not come at the expense of profits." The mood study also disclosed that Net sellers were very optimistic about the coming holiday season. All companies responding to the survey predicted sales gains over last year, pollsters found. Some 19 percent of the merchants are expecting sales to double over 2004 and 54 percent estimated increases in the 20 to 99 percent range.
Brought to you by Guardian eCommerce.
However, early indications are that consumers aren't fretting about gas prices putting a crimp in their holiday shopping styles. In a survey released earlier this month by NPD, of Port Washington, N.Y., 65 percent of consumers said that the price of gas would have very little or no impact on their holiday spending. The survey found that the average consumer expected to spend US$681 on holiday gifts this year, a three percent increase over last year's average of $655. Most of the consumers surveyed by NPD -- 67 percent -- said they'd be shopping at discount stores, like Wal-Mart and Target -- while 37 percent told pollsters they'd be shopping online. "The added dynamic this holiday season for consumers will be the higher fuel prices and higher heating expenses we're seeing in the market now," NPD Chief Industry Analyst Marshal Cohen said in a statement. "Despite these challenges, retailers will fare well this holiday season and consumers will not let these distractions spoil their holiday shopping spirit."
Consumers, however, aren't the only ones affected by rising fuel prices. Online merchants need to ship their wares to their customers and shipping requires fuel. It's common practice for shippers to pass increased fuel costs on to customers. Federal Express recently announced a 5.5 percent hike in its rates, effective Jan. 2, due to rising gas prices. And UPS passes fuel cost increases to its customers through monthly surcharges. According to UPS Spokesperson Susan Rosenberg, the surcharge for ground service customers is 3.5 percent in October and will be 4.5 percent in November. The surcharge for air services, which is capped, was even higher -- 12.5 percent for October, up from 9.5 percent in previous months. She said that fuel costs increased, year over year, 30 percent in the first quarter of 2005 and 45.3 percent in the second quarter.
However, according to the Shop.org/BizRate Research Holiday Mood Study released last week, Net merchants won't be passing their increased shipping costs onto consumers. The survey revealed that 79 percent of online retailers plan to offer free shipping, with conditions, during the holiday season. "Online shoppers are clearly motivated by promotions like free shipping, gifts with purchase, and special online offers," Shop.org Executive Director Scott Silverman said in a statement. "These promotions will enable customers to save money while helping retailers maximize their holiday sales." He added, "Because companies have planned for them as part of their overall marketing strategy, these promotions will not come at the expense of profits." The mood study also disclosed that Net sellers were very optimistic about the coming holiday season. All companies responding to the survey predicted sales gains over last year, pollsters found. Some 19 percent of the merchants are expecting sales to double over 2004 and 54 percent estimated increases in the 20 to 99 percent range.
Brought to you by Guardian eCommerce.
Tuesday, October 25, 2005
Google Rolls Out RSS Reader
Google unveiled its latest beta product offering at the Web 2.0 conference in San Francisco last week. The Google Reader is a Web-based RSS reader designed for the search engine's registered users. Similar to the online service offered by NewsGator, Google Reader allows users to subscribe to RSS feeds and receive an e-mail notification when a Web site publishes an update. "We often get asked how anyone is supposed to keep up with the firehose of stuff launched from the Web's spigot, so we're offering Reader as a way to help," said Chris Wetherell, software engineer for the Google Reader, on his blog.
Google is billing the new tool as a way for users to spend more time reading what they care about most. Google said the reader automatically gets the latest news and updates from a user's favorite sites. It also allows users to sort their reading lists by a relevance feature, which takes a guess at what's most relevant to the user based on factors such as which items the user actually decides to read. Google said its new RSS reader also allows users to find the blogs and news sites they have been missing out on. Finally, Google said its new beta service allows users to share interesting items with friends. When a user comes across something worth sharing, they can e-mail or blog it from within the Reader and star or label items they want to save for themselves.
The Google Reader user interface is designed for user familiarity, with a search box at the top similar to the search engine. Users are instructed to enter the name of a news source or author, such as the New York Times or Dave Barry, or a topic or industry, such as gardening or nanotechnology. If the user knows the URL, they can also enter that directly. The Google Reader returns a list of results, and allows users to subscribe to the ones they want. A reading list helps users navigate the RSS feeds with buttons for "up," "down," and "refresh." The Reader is also designed to help users keep track of what items they have read and remove those items from the list the next time they refresh.
Search engine expert Danny Sullivan said that the Google Reader is more of a portal feature than a search feature. In other words, he said, if you use Google Reader to read your feeds, then you are likely going to use Google to do other things. "It makes you stick with Google, in the same way Yahoo's My Yahoo gets you sticking around there to read feeds," Sullivan said. "There are search features, of course, some may find this a new and useful way to locate feeds, though I think the Google Blog Search feature is more for that crowd." Google last week also announced the official launch of Google Local, merging the technologies behind Google Local and Google Maps. Google Local offers users access to information such as integrated local search results and detailed driving directions, and includes features such as draggable maps, satellite imagery, and keyboard shortcuts.
Brought to you by Guardian eCommerce.
Google is billing the new tool as a way for users to spend more time reading what they care about most. Google said the reader automatically gets the latest news and updates from a user's favorite sites. It also allows users to sort their reading lists by a relevance feature, which takes a guess at what's most relevant to the user based on factors such as which items the user actually decides to read. Google said its new RSS reader also allows users to find the blogs and news sites they have been missing out on. Finally, Google said its new beta service allows users to share interesting items with friends. When a user comes across something worth sharing, they can e-mail or blog it from within the Reader and star or label items they want to save for themselves.
The Google Reader user interface is designed for user familiarity, with a search box at the top similar to the search engine. Users are instructed to enter the name of a news source or author, such as the New York Times or Dave Barry, or a topic or industry, such as gardening or nanotechnology. If the user knows the URL, they can also enter that directly. The Google Reader returns a list of results, and allows users to subscribe to the ones they want. A reading list helps users navigate the RSS feeds with buttons for "up," "down," and "refresh." The Reader is also designed to help users keep track of what items they have read and remove those items from the list the next time they refresh.
Search engine expert Danny Sullivan said that the Google Reader is more of a portal feature than a search feature. In other words, he said, if you use Google Reader to read your feeds, then you are likely going to use Google to do other things. "It makes you stick with Google, in the same way Yahoo's My Yahoo gets you sticking around there to read feeds," Sullivan said. "There are search features, of course, some may find this a new and useful way to locate feeds, though I think the Google Blog Search feature is more for that crowd." Google last week also announced the official launch of Google Local, merging the technologies behind Google Local and Google Maps. Google Local offers users access to information such as integrated local search results and detailed driving directions, and includes features such as draggable maps, satellite imagery, and keyboard shortcuts.
Brought to you by Guardian eCommerce.
Monday, October 24, 2005
Investors Search for the Next Google
For the first time since the dot-com bust, venture capital investments in Internet companies are surging. Call it the Google effect. With investment in Internet companies climbing again after several years of decline, the quest is on to find, and fund, the next Google -- or companies with cutting-edge technology that could be acquired by Google or rivals like Yahoo or Microsoft's MSN as they expand their footprints in Internet search arenas.
Venture firms funded 219 Internet deals in the first half of 2005, putting them on pace to exceed last year's 413 deals, according to figures from the Thompson Financial Venture Economics research firm. That would mark the first annual increase in Internet deals since 2000. And the average size of Internet deals is also on the upswing, climbing to US$7.1 million in the first half of this year from $6.6 million last year. "People in the venture business are now looking at companies they might not have looked at a couple of years ago because of Google," suggested Axel Bichara, a senior partner at Atlas Venture in Waltham, Mass. But when entrepreneurs come calling at venture firms these days, foraging for money to bankroll Internet start-ups, they can expect to be grilled about their approach to the fast-growing Google, which boasts a market value of about $90 billion and more than $7 billion in cash. "They are now a formidable presence that needs to be considered when making any kind of investment, whether it's on the enterprise side or the consumer side," said Scott Tobin, general partner at Battery Ventures in Wellesley. Tobin said the Google effect often figures into which Internet companies can line up backers. There are two sides to the Google effect. Even as some investors are casting a skeptical eye on start-ups thought vulnerable to Google, others are aggressively funding start-ups seeking to carve out niches in the expanding Internet business model Google has pioneered.
Every start-up in the Internet field needs a strategy for fending off, partnering with, or differentiating itself from Google. And it's not only potential investors who are demanding to see the strategy. Google is also part of the conversation with job prospects and would-be customers. "The venture guys are very interested in companies in the Internet space," affirmed Jim Baum, the president and chief executive of Endeca Technologies of Cambridge, Mass., a company that helps consumers navigate the Web sites of giant retailers like Wal-Mart Stores and The Home Depot. "But for someone like us, you end up having to answer the question: 'How are you going to compete with Google?'" In many ways, Google has become this decade's Microsoft, a high-tech behemoth that is by turns admired, envied, and feared by nearly everyone in the industry because of its cash horde and constantly evolving business model. Google started in 1998 as a search engine, then developed a profitable business built on Internet advertising, and recently has begun investing in everything from wireless networks to an Internet-based computer platform, threatening companies in markets as far-flung as telecommunications and enterprise software . Its share price has more than tripled since its initial public offering in August 2004. "There's an 800-pound gorilla in the room," said Bob Davis, partner at Highland Capital in Lexington, Mass. "Any smart upstart in the Internet space needs a clear view of Google, and a strategy for dealing with it."
Start-ups, in fact, are working to sharpen their strategies. Endeca hired a principal evangelist, Paul Sonderegger, to convince customers that its guided navigation software is superior to Google's hyperlink analysis in helping consumers find their way around retail sites. "To get the Google experience on a retailer's website, you need someone other than Google," Sonderegger said. SideStep Inc., a start-up in Santa Clara, Calif., down the road from the "Googleplex," the headquarters of Google in Mountain View, Calif., has focused on the field of travel search. SideStep buys ads from Google, but competes for customers making travel plans. "If you're maniacally focused on one market, as we are, you're going to do it better," said Phil Carpenter, SideStep's vice president of marketing. Tim DeMello raised $3.1 million from angel investors last month for his Boston start-up Ziggs Inc., which targets the niche of people search. "There's a lot of room for people doing something more specialized," said DeMello, Ziggs chief executive. "If we went out with a general search engine, I think that would have been a tough sell."
Brought to you by Guardian eCommerce.
Venture firms funded 219 Internet deals in the first half of 2005, putting them on pace to exceed last year's 413 deals, according to figures from the Thompson Financial Venture Economics research firm. That would mark the first annual increase in Internet deals since 2000. And the average size of Internet deals is also on the upswing, climbing to US$7.1 million in the first half of this year from $6.6 million last year. "People in the venture business are now looking at companies they might not have looked at a couple of years ago because of Google," suggested Axel Bichara, a senior partner at Atlas Venture in Waltham, Mass. But when entrepreneurs come calling at venture firms these days, foraging for money to bankroll Internet start-ups, they can expect to be grilled about their approach to the fast-growing Google, which boasts a market value of about $90 billion and more than $7 billion in cash. "They are now a formidable presence that needs to be considered when making any kind of investment, whether it's on the enterprise side or the consumer side," said Scott Tobin, general partner at Battery Ventures in Wellesley. Tobin said the Google effect often figures into which Internet companies can line up backers. There are two sides to the Google effect. Even as some investors are casting a skeptical eye on start-ups thought vulnerable to Google, others are aggressively funding start-ups seeking to carve out niches in the expanding Internet business model Google has pioneered.
Every start-up in the Internet field needs a strategy for fending off, partnering with, or differentiating itself from Google. And it's not only potential investors who are demanding to see the strategy. Google is also part of the conversation with job prospects and would-be customers. "The venture guys are very interested in companies in the Internet space," affirmed Jim Baum, the president and chief executive of Endeca Technologies of Cambridge, Mass., a company that helps consumers navigate the Web sites of giant retailers like Wal-Mart Stores and The Home Depot. "But for someone like us, you end up having to answer the question: 'How are you going to compete with Google?'" In many ways, Google has become this decade's Microsoft, a high-tech behemoth that is by turns admired, envied, and feared by nearly everyone in the industry because of its cash horde and constantly evolving business model. Google started in 1998 as a search engine, then developed a profitable business built on Internet advertising, and recently has begun investing in everything from wireless networks to an Internet-based computer platform, threatening companies in markets as far-flung as telecommunications and enterprise software . Its share price has more than tripled since its initial public offering in August 2004. "There's an 800-pound gorilla in the room," said Bob Davis, partner at Highland Capital in Lexington, Mass. "Any smart upstart in the Internet space needs a clear view of Google, and a strategy for dealing with it."
Start-ups, in fact, are working to sharpen their strategies. Endeca hired a principal evangelist, Paul Sonderegger, to convince customers that its guided navigation software is superior to Google's hyperlink analysis in helping consumers find their way around retail sites. "To get the Google experience on a retailer's website, you need someone other than Google," Sonderegger said. SideStep Inc., a start-up in Santa Clara, Calif., down the road from the "Googleplex," the headquarters of Google in Mountain View, Calif., has focused on the field of travel search. SideStep buys ads from Google, but competes for customers making travel plans. "If you're maniacally focused on one market, as we are, you're going to do it better," said Phil Carpenter, SideStep's vice president of marketing. Tim DeMello raised $3.1 million from angel investors last month for his Boston start-up Ziggs Inc., which targets the niche of people search. "There's a lot of room for people doing something more specialized," said DeMello, Ziggs chief executive. "If we went out with a general search engine, I think that would have been a tough sell."
Brought to you by Guardian eCommerce.
Sunday, October 23, 2005
The Art of Effective Web Searching
The ubiquitous Web search form -- the "search command line" -- has had a profound and transformative effect on information retrieval. That simple little box at the top of every search engine has opened up a boundless new world for millions of people. In doing so, all of the major search engines have made compromises to cast their nets wide and broaden their overall appeal. While this has done wonders to build a general-purpose tool for the majority, there are specific things that we can do to unlock the secrets buried beneath the search command line. The major search engines tend to return particularly accurate and relevant results for two very different types of queries. On one hand, a search for terms that are common but rather specific will usually return an accurate list of popular Web sites that contain canonical information about the term(s). At the other extreme, a search for a relatively rare and statistically improbable set of search terms also tends to return accurate results. For example, a search for "ISBN 0679723420" points you straight to Vladimir Nabokov's classic Pale Fire, without much effort.
Therefore, the art of effective searching usually falls somewhere in the middle of those two kinds of queries. This is especially applicable in the academic and technical communities, where users frequently seek out esoteric and difficult-to-articulate data. While the search engines are getting better at helping the user with these more demanding queries, here are six techniques the power user can adopt to find the best results fast: Search from the outside in. Sometimes search queries simply return too much information, especially when the search engine doesn't know enough to disambiguate between different types of results. The first approach most people try is to add more terms to the query until the right results are found. But this can just as easily eliminate good results as reveal them. An alternative is to start with broad search terms and use the "minus" operator in the search query to selectively eliminate sets of results. This lets the power user quickly scan through the list of results and subtract entire categories of pages with quick modifications to the query, ending up with only the desired matches.
Comparison search. The Web is so large, no single search engine can crawl more than a fraction of it. Also, each search engine's relevancy algorithms (i.e., the logic that determines the order of the search results) differ substantially. The solution is to keep bookmarks handy for the big engines such as Google, Yahoo, and MSN, and be prepared to check all of them on particularly challenging searches. Server-side bookmarks. Everyone uses bookmarks, but one power search technique is to use a server-side bookmark manager rather than the one stored on your computer. When the user finds great pages, the bookmarks can be saved on a dedicated bookmark server such as del.icio.us, or LookSmart's Furl, or one of the advanced search engines such as A9 or Yahoo, via their toolbars. Many of these new services also support the capability to tag individual bookmarks with keywords or add extended diary entries that annotate your personal Web as you search.
Tabbed browsing. Web browsers such as Firefox and Safari support tabbed browsing, which hides new pages in the background of the same window until you need them. This allows the power user to perform a search and preload all of the interesting results in tabs while they work down the list. So, all of the selected pages will be loaded and ready to be read by the time the user is done scanning the list of search results.
Search histories. Another technique is to employ a search engine to track the user's search history. A permanent, searchable history is invaluable when performing serious research on the Web. In fact, search histories are often better than bookmarks in such cases, because a bookmark only helps the user remember one site at a time, while a search history helps the user remember how and where they found the page, and helps them retrace those steps in the future. Vertical search. No one general search engine will ever be able to fully capture the richness and complexity of the Web. Medical databases, travel information, and library catalogs are a few examples of vertical search engines that contain highly specialized data in narrow domains. Search syndication protocols such as Amazon.com's and Open-Search are helping specialized vertical search engines surface their results to other sites to help maximize their accessibility.
The search industry is evolving rapidly, and more tools for information retrieval and information sharing are being developed daily. Search engines are also learning how to personalize results based on the user's individual habits. They are incorporating more and more of the deep vertical data into their primary search interface, and are learning how to simultaneously serve the novice user, while adding tools and capabilities to empower the most sophisticated users. In the meantime, power users can stay on top of their searches with advanced search techniques such as those above.
Brought to you by the Guardian eCommerce Privacy Seal Program.
Therefore, the art of effective searching usually falls somewhere in the middle of those two kinds of queries. This is especially applicable in the academic and technical communities, where users frequently seek out esoteric and difficult-to-articulate data. While the search engines are getting better at helping the user with these more demanding queries, here are six techniques the power user can adopt to find the best results fast: Search from the outside in. Sometimes search queries simply return too much information, especially when the search engine doesn't know enough to disambiguate between different types of results. The first approach most people try is to add more terms to the query until the right results are found. But this can just as easily eliminate good results as reveal them. An alternative is to start with broad search terms and use the "minus" operator in the search query to selectively eliminate sets of results. This lets the power user quickly scan through the list of results and subtract entire categories of pages with quick modifications to the query, ending up with only the desired matches.
Comparison search. The Web is so large, no single search engine can crawl more than a fraction of it. Also, each search engine's relevancy algorithms (i.e., the logic that determines the order of the search results) differ substantially. The solution is to keep bookmarks handy for the big engines such as Google, Yahoo, and MSN, and be prepared to check all of them on particularly challenging searches. Server-side bookmarks. Everyone uses bookmarks, but one power search technique is to use a server-side bookmark manager rather than the one stored on your computer. When the user finds great pages, the bookmarks can be saved on a dedicated bookmark server such as del.icio.us, or LookSmart's Furl, or one of the advanced search engines such as A9 or Yahoo, via their toolbars. Many of these new services also support the capability to tag individual bookmarks with keywords or add extended diary entries that annotate your personal Web as you search.
Tabbed browsing. Web browsers such as Firefox and Safari support tabbed browsing, which hides new pages in the background of the same window until you need them. This allows the power user to perform a search and preload all of the interesting results in tabs while they work down the list. So, all of the selected pages will be loaded and ready to be read by the time the user is done scanning the list of search results.
Search histories. Another technique is to employ a search engine to track the user's search history. A permanent, searchable history is invaluable when performing serious research on the Web. In fact, search histories are often better than bookmarks in such cases, because a bookmark only helps the user remember one site at a time, while a search history helps the user remember how and where they found the page, and helps them retrace those steps in the future. Vertical search. No one general search engine will ever be able to fully capture the richness and complexity of the Web. Medical databases, travel information, and library catalogs are a few examples of vertical search engines that contain highly specialized data in narrow domains. Search syndication protocols such as Amazon.com's and Open-Search are helping specialized vertical search engines surface their results to other sites to help maximize their accessibility.
The search industry is evolving rapidly, and more tools for information retrieval and information sharing are being developed daily. Search engines are also learning how to personalize results based on the user's individual habits. They are incorporating more and more of the deep vertical data into their primary search interface, and are learning how to simultaneously serve the novice user, while adding tools and capabilities to empower the most sophisticated users. In the meantime, power users can stay on top of their searches with advanced search techniques such as those above.
Brought to you by the Guardian eCommerce Privacy Seal Program.
Friday, October 21, 2005
Court Upholds Blogger's Right to Anonymity
In a case seen boosting the credibility and profile of blogs as sources of news and opinion, the Delaware Supreme Court this week found that four bloggers accused of defamation had the right to remain anonymous. The court ruled that a lower court was wrong in ordering an Internet service provider to disclose the identity of anonymous bloggers who used a local newspaper's public blogging area to criticize a local elected official. The court said that the official, Patrick Cahill, should have been required to provide more evidence that he had suffered damage from defamation before ordering the bloggers' identities be revealed.
The ruling is getting attention because it may represent the first time a state's high court weighed in on blogger's rights to privacy and because the decision is seeing raising the level of blogs to more legitimate status. In the past, courts have been unwilling to protect the identities of message board posters and others who had been accused of misconduct. Of the four bloggers targeted by Cahill, one decided to appeal an initial ruling. He is referred to in court documents only as John Doe No. 1 and by his blog name, "Proud Citizen." His attorney, David Finger, said the decision represented protection for all anonymous bloggers "from lawsuits which have little or no merit and are filed solely to intimidate the speaker or suppress the speech."
Cahill, an elected member of the Smyrna, Delaware city council who had feuded publicly with the city's mayor, initially sued over the content of several of the postings, which included veiled references to his sexuality and suggested he suffered from "obvious mental deterioration." In the ruling, Chief Justice Myron Steele said that blogs are more often than not written as opinion and are recognized as such by readers. "Given the context, no reasonable person could have interpreted these statements as being anything other than opinion," he wrote. "The statements are, therefore, incapable of a defamatory meaning." Steele also called the Internet as a "unique democratizing medium unlike anything that has come before," and went as far as to liken anonymous writings in blogs and chat rooms to political pamphleteering, which helped jumpstart the American Revolution.
The court left open the possibility of a blogger having to be identified, but only after the aggrieved party has shown substantial evidence they've been harmed. "We are concerned that setting the standard too low will chill potential posters from exercising their First Amendment right to speak anonymously," Steele wrote. "The possibility of losing anonymity in a future lawsuit could intimidate anonymous posters into self-censoring their comments or simply not commenting at all."
With the ruling, the court lent credence to bloggers' comments by affording them a similar level of protection that credentialed reporters receive from libel suits, in which the burden of proof is on the allegedly defamed person to prove they were harmed and, in the case of public figures, that the writer had reason to believe the information was wrong before it was published. Online rights groups, several of which worked with the anonymous blogger on the case, were quick to hail it as a milestone. "Bloggers have a strong First Amendment right to speak anonymously," said Kurt Opsahl, staff attorney at the Electronic Frontier Foundation. "It is critical that plaintiffs' claims face a stringent test before a court unmasks online critics, lest we reduce the vibrant public debates on the Internet to the cautious views of a select few voices." But others noted that states often ignore the precedent set by other state's supreme courts, preferring to wait for a U.S. Supreme Court ruling for guidance.
Brought to you by Guardian eCommerce.
The ruling is getting attention because it may represent the first time a state's high court weighed in on blogger's rights to privacy and because the decision is seeing raising the level of blogs to more legitimate status. In the past, courts have been unwilling to protect the identities of message board posters and others who had been accused of misconduct. Of the four bloggers targeted by Cahill, one decided to appeal an initial ruling. He is referred to in court documents only as John Doe No. 1 and by his blog name, "Proud Citizen." His attorney, David Finger, said the decision represented protection for all anonymous bloggers "from lawsuits which have little or no merit and are filed solely to intimidate the speaker or suppress the speech."
Cahill, an elected member of the Smyrna, Delaware city council who had feuded publicly with the city's mayor, initially sued over the content of several of the postings, which included veiled references to his sexuality and suggested he suffered from "obvious mental deterioration." In the ruling, Chief Justice Myron Steele said that blogs are more often than not written as opinion and are recognized as such by readers. "Given the context, no reasonable person could have interpreted these statements as being anything other than opinion," he wrote. "The statements are, therefore, incapable of a defamatory meaning." Steele also called the Internet as a "unique democratizing medium unlike anything that has come before," and went as far as to liken anonymous writings in blogs and chat rooms to political pamphleteering, which helped jumpstart the American Revolution.
The court left open the possibility of a blogger having to be identified, but only after the aggrieved party has shown substantial evidence they've been harmed. "We are concerned that setting the standard too low will chill potential posters from exercising their First Amendment right to speak anonymously," Steele wrote. "The possibility of losing anonymity in a future lawsuit could intimidate anonymous posters into self-censoring their comments or simply not commenting at all."
With the ruling, the court lent credence to bloggers' comments by affording them a similar level of protection that credentialed reporters receive from libel suits, in which the burden of proof is on the allegedly defamed person to prove they were harmed and, in the case of public figures, that the writer had reason to believe the information was wrong before it was published. Online rights groups, several of which worked with the anonymous blogger on the case, were quick to hail it as a milestone. "Bloggers have a strong First Amendment right to speak anonymously," said Kurt Opsahl, staff attorney at the Electronic Frontier Foundation. "It is critical that plaintiffs' claims face a stringent test before a court unmasks online critics, lest we reduce the vibrant public debates on the Internet to the cautious views of a select few voices." But others noted that states often ignore the precedent set by other state's supreme courts, preferring to wait for a U.S. Supreme Court ruling for guidance.
Brought to you by Guardian eCommerce.
Thursday, October 20, 2005
VeriSign to Combine With Weblogs.com
It's party time in blogland. So say analysts in the wake of two successive blog-related acquisitions this week. First, AOL said it would acquire Weblogs, Inc. yesterday. Today, Verisign said it has purchased Weblogs.com. VeriSign purchased the company and its ping service from Scripting News in a US$2.3 million cash deal. VeriSign said the acquisition will allow it to provide more stable and reliable communications for the Internet's blogosphere. "The Internet has experienced an explosion in both the number of bloggers and the number of daily RSS feeds from bloggers over the past 12 to 24 months, but the infrastructure to support that level of Internet communications has not kept pace," said Mark McLaughlin, senior vice president of VeriSign's Naming and Directory Services. "VeriSign is uniquely positioned to provide the scalable, secure infrastructure that the blogosphere needs. Purchasing the ping server architecture of Weblogs.com enables VeriSign to continue supporting the vast numbers of Internet communications and improve the experience of millions of Internet users."
A ping server automatically notifies subscribers when new content is posted to a Web site or blog. Weblogs.com is the original ping server created and developed by pioneering blogger Dave Winer, also one of the pioneers of Really Simple Syndication (RSS). Weblogs.com currently handles nearly 2 million pings each day and supports thousands of daily RSS feeds from bloggers as well as professional publishers. By migrating Weblogs.com's ping service to VeriSign's ping infrastructure, VeriSign said it will be able to offer the users of RSS and real-time content a robust, intelligent platform as the use of RSS and real-time content continues its rapid growth. VeriSign said it will continue to operate Weblogs.com as an openly available service, greatly benefiting the entire blogosphere, from individual bloggers to value-added feed applications such as blog search services.
Google got a head start in the blogosphere, but others companies have been catching on to the trend. That's because the number of bloggers and the growth of new blogs per day is on the rise. As of the end of July 2005, Technorati tracked over 14.2 million Weblogs, and over 1.3 billion links. That's just about double the number it tracked five months ago -- and the blogosphere continues to double about every six months, according to the firm. MSN Spaces, Blogger, LiveJournal and AOL Journals are tapping into software like WordPress and Movable Type to help spawn over 80,000 new blogs every day, Technorati reported. That amounts to about one new blog every 1.08 seconds with more than half of new bloggers still posting three months later, and 13 percent of blogs updated at least once a week.
Blogging expert B.L. Ochman, president of WhatsNextOnline.com, said she is thrilled to see blogging pioneers rewarded for their efforts to push the adoption of blogging -- but she said she is also a little nervous. "Some people think blogs are a magical elixir and they aren't. I am glad to see that blogs will be made more mainstream and that they'll get the attention of more people and our audiences can grow, but they are just Web sites. It is all about the content -- it's about the bloggers," Ochman said. "I am afraid the bloggers are not the ones getting rich." For VeriSign's part, Ochman said buying Weblogs.com was a good move. Not only does Weblogs.com have a great URL, it has a great technology, she said. "The ability to ping other sites is one of the reasons that blog content is so freshly updated in the search engines," Ochman said. "VeriSign now has a part of the infrastructure that's really important to the blogosphere."
Brought to you by Guardian eCommerce Privacy Seal Program.
A ping server automatically notifies subscribers when new content is posted to a Web site or blog. Weblogs.com is the original ping server created and developed by pioneering blogger Dave Winer, also one of the pioneers of Really Simple Syndication (RSS). Weblogs.com currently handles nearly 2 million pings each day and supports thousands of daily RSS feeds from bloggers as well as professional publishers. By migrating Weblogs.com's ping service to VeriSign's ping infrastructure, VeriSign said it will be able to offer the users of RSS and real-time content a robust, intelligent platform as the use of RSS and real-time content continues its rapid growth. VeriSign said it will continue to operate Weblogs.com as an openly available service, greatly benefiting the entire blogosphere, from individual bloggers to value-added feed applications such as blog search services.
Google got a head start in the blogosphere, but others companies have been catching on to the trend. That's because the number of bloggers and the growth of new blogs per day is on the rise. As of the end of July 2005, Technorati tracked over 14.2 million Weblogs, and over 1.3 billion links. That's just about double the number it tracked five months ago -- and the blogosphere continues to double about every six months, according to the firm. MSN Spaces, Blogger, LiveJournal and AOL Journals are tapping into software like WordPress and Movable Type to help spawn over 80,000 new blogs every day, Technorati reported. That amounts to about one new blog every 1.08 seconds with more than half of new bloggers still posting three months later, and 13 percent of blogs updated at least once a week.
Blogging expert B.L. Ochman, president of WhatsNextOnline.com, said she is thrilled to see blogging pioneers rewarded for their efforts to push the adoption of blogging -- but she said she is also a little nervous. "Some people think blogs are a magical elixir and they aren't. I am glad to see that blogs will be made more mainstream and that they'll get the attention of more people and our audiences can grow, but they are just Web sites. It is all about the content -- it's about the bloggers," Ochman said. "I am afraid the bloggers are not the ones getting rich." For VeriSign's part, Ochman said buying Weblogs.com was a good move. Not only does Weblogs.com have a great URL, it has a great technology, she said. "The ability to ping other sites is one of the reasons that blog content is so freshly updated in the search engines," Ochman said. "VeriSign now has a part of the infrastructure that's really important to the blogosphere."
Brought to you by Guardian eCommerce Privacy Seal Program.
Tuesday, October 18, 2005
Yahoo Acquires Upcoming.org
Yahoo has acquired Upcoming.org, an online event planning site that's expected to infuse the Internet powerhouse with more content about local communities. The Sunnyvale, Calif.-based company confirmed the deal late yesterday without disclosing financial terms of the acquisition.
Los Angeles-based Upcoming acts as a social calendar that depends on its users to post free listings about a wide range of upcoming events, from local rock concerts to picnics in the park.
The site, founded by Andy Baio, provides tools that enable users to share observations about the events and identify common areas of interests. Yahoo plans to keep Upcoming's current Web site separate, but eventually will incorporate much of the content into its own site to bolster its local
search capabilities, said Paul Levine, Yahoo's general manager of local search. "We think local search is about much more than being able to find a business in your community," Levine said. "There is no question that local events are an important component, too." Both Yahoo and its rival, Google, have been placing a greater emphasis on local search during the past two years as more people gradually change the way they search.
With more homes having high-speed Internet connections that make it easier to load Web pages, people increasingly are turning to the Internet before the Yellow Pages for business referrals. And more people, particularly younger generations, also are turning to the Web to learn about what's happening in their communities. Both Yahoo and Google want to field the local search requests because they make money from the ads posted alongside each batch of results. Because Upcoming revolves around social networking, Upcoming eventually might be blended into "Yahoo 360," a social networking and blogging section the company is testing. The listings about concerts also shape up as a logical fit with Yahoo's music offerings.
Brought to you by Guardian eCommerce.
Los Angeles-based Upcoming acts as a social calendar that depends on its users to post free listings about a wide range of upcoming events, from local rock concerts to picnics in the park.
The site, founded by Andy Baio, provides tools that enable users to share observations about the events and identify common areas of interests. Yahoo plans to keep Upcoming's current Web site separate, but eventually will incorporate much of the content into its own site to bolster its local
search capabilities, said Paul Levine, Yahoo's general manager of local search. "We think local search is about much more than being able to find a business in your community," Levine said. "There is no question that local events are an important component, too." Both Yahoo and its rival, Google, have been placing a greater emphasis on local search during the past two years as more people gradually change the way they search.
With more homes having high-speed Internet connections that make it easier to load Web pages, people increasingly are turning to the Internet before the Yellow Pages for business referrals. And more people, particularly younger generations, also are turning to the Web to learn about what's happening in their communities. Both Yahoo and Google want to field the local search requests because they make money from the ads posted alongside each batch of results. Because Upcoming revolves around social networking, Upcoming eventually might be blended into "Yahoo 360," a social networking and blogging section the company is testing. The listings about concerts also shape up as a logical fit with Yahoo's music offerings.
Brought to you by Guardian eCommerce.
Monday, October 17, 2005
A new online domain for the travel industry is open for business. Airlines, theme parks, restaurants, tourism offices and others in travel and tourism are eligible for Web sites and e-mail addresses ending in ".travel." The new domain could give consumers confidence that they are dealing with a legitimate travel business or group, though the mantra of "buyer beware" applies: Operators of the domain won't be performing any credit or criminal background checks or offering any guarantees.
New York-based Tralliance, a unit of Internet communications company Theglobe.com, won approval to run ".travel" earlier this year from the Internet's key oversight agency, the Internet Corporation for Assigned Names and Numbers , or ICANN. Since July 1, industry groups such as the Adventure Travel Trade Association and the International Hotel and Restaurant Association have been verifying that companies and organizations belong to one of 18 eligible industry sectors. Those approved were allowed to register and use ".travel" names starting Sunday.
Although Tralliance billed the domain as an online space for the global travel and tourism community, travel journalist and author Edward Hasbrouck criticized the rules, saying they exclude travelers at the expense of promoting travel businesses. "The domain appears to exclude the participation of the largest class of people who use the Internet to travel -- people who use the Internet to post their travel stories and photos and all sorts of things," Hasbrouck said. Cherian Mathai, Tralliance's chief operating officer, said individuals might qualify as travel media if they offer a service, such as advice on how to get there. Simply creating a site with family photos from Peru's Machu Picchu won't qualify, he said. Approval is made on a case-by-case basis, he said.
So far, many of the eligible travel sectors are in transportation, including airlines, bus operators, cruise lines and passenger rail lines, a group that covers suburban commuter lines but not city subway systems. Also eligible are hotels, casinos, camp facilities, travel agents and providers of travel technologies. To prevent overlap with ".aero," an existing domain for the aviation industry, airports and aerospace companies don't qualify -- but airlines do.
Mathai said the list will be continually reviewed by a nonprofit group of travel associations, the Travel Partnership, and may grow to include retailers of luggage, for instance. ICANN has been creating new Internet suffixes partly because existing ones like ".com" are crowded, making easy-to-remember addresses difficult to obtain. Nonetheless, Web sites that already have a ".com" name are likely to keep it and automatically redirect visitors to the new ".travel" site instead.
"Nobody wants to give up a dot-com name at this stage," Mathai said.
Brought to you by Guardian eCommerce Privacy Seal Program.
New York-based Tralliance, a unit of Internet communications company Theglobe.com, won approval to run ".travel" earlier this year from the Internet's key oversight agency, the Internet Corporation for Assigned Names and Numbers , or ICANN. Since July 1, industry groups such as the Adventure Travel Trade Association and the International Hotel and Restaurant Association have been verifying that companies and organizations belong to one of 18 eligible industry sectors. Those approved were allowed to register and use ".travel" names starting Sunday.
Although Tralliance billed the domain as an online space for the global travel and tourism community, travel journalist and author Edward Hasbrouck criticized the rules, saying they exclude travelers at the expense of promoting travel businesses. "The domain appears to exclude the participation of the largest class of people who use the Internet to travel -- people who use the Internet to post their travel stories and photos and all sorts of things," Hasbrouck said. Cherian Mathai, Tralliance's chief operating officer, said individuals might qualify as travel media if they offer a service, such as advice on how to get there. Simply creating a site with family photos from Peru's Machu Picchu won't qualify, he said. Approval is made on a case-by-case basis, he said.
So far, many of the eligible travel sectors are in transportation, including airlines, bus operators, cruise lines and passenger rail lines, a group that covers suburban commuter lines but not city subway systems. Also eligible are hotels, casinos, camp facilities, travel agents and providers of travel technologies. To prevent overlap with ".aero," an existing domain for the aviation industry, airports and aerospace companies don't qualify -- but airlines do.
Mathai said the list will be continually reviewed by a nonprofit group of travel associations, the Travel Partnership, and may grow to include retailers of luggage, for instance. ICANN has been creating new Internet suffixes partly because existing ones like ".com" are crowded, making easy-to-remember addresses difficult to obtain. Nonetheless, Web sites that already have a ".com" name are likely to keep it and automatically redirect visitors to the new ".travel" site instead.
"Nobody wants to give up a dot-com name at this stage," Mathai said.
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Sunday, October 16, 2005
They Made the Internet - Now They Want to Make Money
BBN Technologies built the forerunner of today's Internet , employed the @ sign to send the first e-mail, and even designed the acoustics for the UN General Assembly Hall in Manhattan. But the company didn't get rich off of any of those milestones. Now a recapitalized BBN is scrambling to make sure history doesn't repeat itself. With new ownership and a new strategy, BBN wants to profit off the new century's next big thing: the war on terror. The company hopes to benefit financially from the speech recognition , network security , and wireless mobile technologies it is pioneering for use in Iraq and elsewhere.
To do that, the 57-year-old company originally known as Bolt, Beranek & Newman must make the transition from a contract research house still heavily dependent on Pentagon contracts to a nimbler and more entrepreneurial concern focused on turning out rapid prototypes, spinning off businesses, and broadening its customer base. The company is growing its core research operations faster than it had previously, said Robert G. "Tad" Elmer, the president and chief executive of BBN. At the same time, it is moving to line up more work for U.S. intelligence agencies and to tap new revenue sources by licensing more of its technology to corporations and start-ups. "We believe there is great applicability in commercial areas for some of the things we're really good at," Elmer said. "Right now these commercial areas are not that big a part of our revenue. However, if we do it right, they could be a very profitable part of our business. And unlike the go-go days of the late '90s, profit really matters now." That's been especially so since March 2004, when a team of senior executives and private equity investors purchased the BBN research business from Verizon Communications for an undisclosed sum. The new owners, led by General Catalyst Partners of Cambridge, Mass. and Accel Partners of Palo Alto, Calif., reconstituted the once-public BBN as an independent company after seven years under the corporate umbrella first of GTE, then Bell Atlantic, and finally Verizon. While the strategy is set, the chase after civilian business won't be easy.
BBN has excellent technology in the speech and language fields, said Bill Meisel, president of TMA Associates, a speech technology consulting firm in Los Angeles. But he said it faces stiff competition in those areas from rivals such as Microsoft, IBM, and ScanSoft, all with more marketing experience. "The history of BBN is it's been very inventive, yet it's never been a commercial marketing organization," he said. "Now that it has outside investors, it's trying to reach the commercial markets." Indeed, there have been many chapters in BBN's storied history, but few have involved technologies that landed in consumers' hands. In addition to the company's acoustics work in 1949 at the UN, BBN also invented the Arpanet, precursor to the Internet, in 1969. Two years later, BBN engineer Ray Tomlinson employed the @ sign to send the first e-mail message. In 1978, its chief scientist, James Barger, analyzed the tapes of the John F. Kennedy assassination and suggested the possibility there were two shooters.
The speech processing research it began in the mid-1970s is one key to the future of BBN and its 650 employees. Next month the company expects to land a contract from the Pentagon's research arm, the Defense Advanced Research Projects Agency, to lead an effort to develop technology that immediately translates spoken languages, such as Arabic or Mandarin Chinese, into searchable English text. That contract will be for a Darpa program known as GALE, for global autonomous language exploitation. Valued at more than US$15 million for its first year, it will be one of BBN's largest contracts ever. At the same time, company representatives have been marketing related technologies --speech recognition, search-to-text, and media search -- to Silicon Valley search and Internet companies, though they have yet to announce a deal. "We need to be continually moving into new areas, which feeds the vitality of the organization," said Stephen D. Milligan, BBN vice president and chief technologist.
But military research still represents more than 80 percent of BBN's revenue, and most of the cutting-edge technologies coming out of its labs today, from distributed software to artificial intelligence , are focused on aiding the US armed forces fighting in Iraq and Afghanistan.
"Over the past five years, because of what's going on in the world, their technologies have become ever more relevant," said David Fialkow, the General Catalyst managing director who sits on the BBN board.
One research effort is dubbed Ambush, a multiplayer military training program for personal computers that simulates a convoy moving on a desert highway. The software and artificial intelligence agents create a series of virtual scenarios (sniper fire, improvised explosive devices, car bombs, rocket-propelled grenades) requiring quick decision-making by troops in the convoy.
"It throws you into situations," said Bruce Roberts, scientist at BBN's distributed systems and logistics division. "The goal is to make day one like day three, to make sure that when you go on a convoy you're up to speed with the environment and the skills you need." The program, part of the computer-based training initiative funded by Darpa, was tested at the Pentagon's Joint Readiness Training Center in Louisiana as a supplement to physical training. It was fielded by the Army's 1st Stryker Brigade, 25th Infantry Division, which was deployed to Iraq from Fort Lewis, Wash.
Another program is Boomerang, a detection system featuring multiple microphones mounted on armored vehicles that can quickly identify the direction of mobile shooters and enable soldiers to respond. Like Ambush, Boomerang became a "rapid development" program after the Defense Department approached the company in November 2003. "We were given 60 days to build the system from scratch," said program manager David Schmitt. Ambush, meanwhile, began in March 2004; BBN readied a prototype by June and it was deployed in September.
Elmer said the company is becoming adept at the kind of rapid prototyping required in wartime, and that skill has become an important part of BBN's new culture. Bringing products to market quickly will also be critical as BBN officials peddle their technologies to Internet, consumer electronics, and life sciences companies. "We need to preserve and build on BBN's exceptional long-term technical culture while at the same time taking some of its best technology into high-growth commercial markets," said Jim Breyer, an Accel Partners managing partner and a director of BBN.
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To do that, the 57-year-old company originally known as Bolt, Beranek & Newman must make the transition from a contract research house still heavily dependent on Pentagon contracts to a nimbler and more entrepreneurial concern focused on turning out rapid prototypes, spinning off businesses, and broadening its customer base. The company is growing its core research operations faster than it had previously, said Robert G. "Tad" Elmer, the president and chief executive of BBN. At the same time, it is moving to line up more work for U.S. intelligence agencies and to tap new revenue sources by licensing more of its technology to corporations and start-ups. "We believe there is great applicability in commercial areas for some of the things we're really good at," Elmer said. "Right now these commercial areas are not that big a part of our revenue. However, if we do it right, they could be a very profitable part of our business. And unlike the go-go days of the late '90s, profit really matters now." That's been especially so since March 2004, when a team of senior executives and private equity investors purchased the BBN research business from Verizon Communications for an undisclosed sum. The new owners, led by General Catalyst Partners of Cambridge, Mass. and Accel Partners of Palo Alto, Calif., reconstituted the once-public BBN as an independent company after seven years under the corporate umbrella first of GTE, then Bell Atlantic, and finally Verizon. While the strategy is set, the chase after civilian business won't be easy.
BBN has excellent technology in the speech and language fields, said Bill Meisel, president of TMA Associates, a speech technology consulting firm in Los Angeles. But he said it faces stiff competition in those areas from rivals such as Microsoft, IBM, and ScanSoft, all with more marketing experience. "The history of BBN is it's been very inventive, yet it's never been a commercial marketing organization," he said. "Now that it has outside investors, it's trying to reach the commercial markets." Indeed, there have been many chapters in BBN's storied history, but few have involved technologies that landed in consumers' hands. In addition to the company's acoustics work in 1949 at the UN, BBN also invented the Arpanet, precursor to the Internet, in 1969. Two years later, BBN engineer Ray Tomlinson employed the @ sign to send the first e-mail message. In 1978, its chief scientist, James Barger, analyzed the tapes of the John F. Kennedy assassination and suggested the possibility there were two shooters.
The speech processing research it began in the mid-1970s is one key to the future of BBN and its 650 employees. Next month the company expects to land a contract from the Pentagon's research arm, the Defense Advanced Research Projects Agency, to lead an effort to develop technology that immediately translates spoken languages, such as Arabic or Mandarin Chinese, into searchable English text. That contract will be for a Darpa program known as GALE, for global autonomous language exploitation. Valued at more than US$15 million for its first year, it will be one of BBN's largest contracts ever. At the same time, company representatives have been marketing related technologies --speech recognition, search-to-text, and media search -- to Silicon Valley search and Internet companies, though they have yet to announce a deal. "We need to be continually moving into new areas, which feeds the vitality of the organization," said Stephen D. Milligan, BBN vice president and chief technologist.
But military research still represents more than 80 percent of BBN's revenue, and most of the cutting-edge technologies coming out of its labs today, from distributed software to artificial intelligence , are focused on aiding the US armed forces fighting in Iraq and Afghanistan.
"Over the past five years, because of what's going on in the world, their technologies have become ever more relevant," said David Fialkow, the General Catalyst managing director who sits on the BBN board.
One research effort is dubbed Ambush, a multiplayer military training program for personal computers that simulates a convoy moving on a desert highway. The software and artificial intelligence agents create a series of virtual scenarios (sniper fire, improvised explosive devices, car bombs, rocket-propelled grenades) requiring quick decision-making by troops in the convoy.
"It throws you into situations," said Bruce Roberts, scientist at BBN's distributed systems and logistics division. "The goal is to make day one like day three, to make sure that when you go on a convoy you're up to speed with the environment and the skills you need." The program, part of the computer-based training initiative funded by Darpa, was tested at the Pentagon's Joint Readiness Training Center in Louisiana as a supplement to physical training. It was fielded by the Army's 1st Stryker Brigade, 25th Infantry Division, which was deployed to Iraq from Fort Lewis, Wash.
Another program is Boomerang, a detection system featuring multiple microphones mounted on armored vehicles that can quickly identify the direction of mobile shooters and enable soldiers to respond. Like Ambush, Boomerang became a "rapid development" program after the Defense Department approached the company in November 2003. "We were given 60 days to build the system from scratch," said program manager David Schmitt. Ambush, meanwhile, began in March 2004; BBN readied a prototype by June and it was deployed in September.
Elmer said the company is becoming adept at the kind of rapid prototyping required in wartime, and that skill has become an important part of BBN's new culture. Bringing products to market quickly will also be critical as BBN officials peddle their technologies to Internet, consumer electronics, and life sciences companies. "We need to preserve and build on BBN's exceptional long-term technical culture while at the same time taking some of its best technology into high-growth commercial markets," said Jim Breyer, an Accel Partners managing partner and a director of BBN.
Brought to you by the Privacy Seal Program from Guardian eCommerce.
Friday, October 14, 2005
Patent Office Deals Blow to Microsoft, Internet Explorer
The U.S. Patent and Trademark Office (USPTO) this week dealt Microsoft a blow that may not be a knock-out punch, but comes pretty close to hobbling its argument that Internet Explorer (IE) does not infringe on a Web browser patent because prior art makes the patent invalid. The USPTO reviewed and reaffirmed the patent owned by the University of California and licensed exclusively to Eolas Technologies. The patent, known as the 906 patent after its official patent number, 5,838,906, covers a method used to call up interactive applications, or plug-ins, within a browser.
Microsoft will have to redesign IE, the most widely used Internet browser by far, if it loses the suit and cannot come to a licensing agreement with Eolas.
"That decision is certainly going to make it harder for Microsoft in court," Bruce Sunstein, a patent attorney with Bromberg and Sunstein, told TechNewsWorld. "The patent office viewed the prior art and said, 'We think the patent is OK.' It will make it harder to invalidate at trial -- not impossible, but hard." Sunstein said the standard for invalidating the patent is "clear and convincing" evidence that this prior art is within the scope of the claims of the patents. Considering that the USPTO just validated the patent, that argument will be tough to make. The university and Eolas first sued Microsoft in 1999 and won the civil case in 2003, with the jury awarding Eolas $520.6 million in back royalty fees and interest. Microsoft appealed, but a Chicago District Court upheld the verdict in January 2004, and also banned the company from distributing the infringing software . That injunction was stayed during the appeals process. Microsoft argued that it should have been allowed to present the browser Viola, which it said constituted prior art, but the trial judge excluded that evidence.
The software giant won its appeal and will get another trial in District Court, however, in order to win the case, Microsoft must prove the patent invalid. Microsoft is arguing that Eolas knew about Viola and did not mention it when the company first applied for its patent. Pei-yuan Wei and colleagues at O'Reilly & Associates, Microsoft will argue, invented the technology and used it in Viola before the University of California patent application. Some in the Internet community, including the World Wide Web Consortium (W3C), which sets Internet standards, have sided with Microsoft, fearing that redesigning IE would cause a domino effect in which Web sites designed around IE specifications would break. Microsoft and Eolas are battling on another front as well. The software giant has petitioned the U.S. Supreme Court to review whether Microsoft should be liable for fees from overseas use of the software in question. "The patent is related to making and selling things in the United States," Sunstein said. "But if you one master CD in the U.S. and the rest overseas, the master CD is very significant. The court can consider the effect of related activities outside the country. If as a result, the infringing company profited, it's settled law that you can get damages caused by that infringement."
Brought to you by Guardian eCommerce.
Microsoft will have to redesign IE, the most widely used Internet browser by far, if it loses the suit and cannot come to a licensing agreement with Eolas.
"That decision is certainly going to make it harder for Microsoft in court," Bruce Sunstein, a patent attorney with Bromberg and Sunstein, told TechNewsWorld. "The patent office viewed the prior art and said, 'We think the patent is OK.' It will make it harder to invalidate at trial -- not impossible, but hard." Sunstein said the standard for invalidating the patent is "clear and convincing" evidence that this prior art is within the scope of the claims of the patents. Considering that the USPTO just validated the patent, that argument will be tough to make. The university and Eolas first sued Microsoft in 1999 and won the civil case in 2003, with the jury awarding Eolas $520.6 million in back royalty fees and interest. Microsoft appealed, but a Chicago District Court upheld the verdict in January 2004, and also banned the company from distributing the infringing software . That injunction was stayed during the appeals process. Microsoft argued that it should have been allowed to present the browser Viola, which it said constituted prior art, but the trial judge excluded that evidence.
The software giant won its appeal and will get another trial in District Court, however, in order to win the case, Microsoft must prove the patent invalid. Microsoft is arguing that Eolas knew about Viola and did not mention it when the company first applied for its patent. Pei-yuan Wei and colleagues at O'Reilly & Associates, Microsoft will argue, invented the technology and used it in Viola before the University of California patent application. Some in the Internet community, including the World Wide Web Consortium (W3C), which sets Internet standards, have sided with Microsoft, fearing that redesigning IE would cause a domino effect in which Web sites designed around IE specifications would break. Microsoft and Eolas are battling on another front as well. The software giant has petitioned the U.S. Supreme Court to review whether Microsoft should be liable for fees from overseas use of the software in question. "The patent is related to making and selling things in the United States," Sunstein said. "But if you one master CD in the U.S. and the rest overseas, the master CD is very significant. The court can consider the effect of related activities outside the country. If as a result, the infringing company profited, it's settled law that you can get damages caused by that infringement."
Brought to you by Guardian eCommerce.
Wednesday, October 12, 2005
Search Engine Placement Lawsuit May Chill Free Speech
A lawsuit filed against Web sites that allege search engine results on Google.com were rigged by a placement firm is being watched throughout the Internet industry, as possibly having an impact on the free speech rights of bloggers, experts say. The Las Vegas-based search engine placement company Traffic-Power.com has filed suit against SEOBook.com and TrafficPowerSucks.com, which each have a lot of adverse commentary about the firm posted on their sites. Both sites are being sued for comments made by third parties -- who are not in the employment of the sites' producers.
Experts think the lawsuit may be dismissed as a suit designed to silence comment on matters of public concern, known by the acronym SLAPP, for Strategic Lawsuits Against Public Participation.
"Plaintiffs think they can bully Web sites and blogs into doing what they want," commented Eric Goldman, an attorney, and a faculty member at the Marquette University School of Law, located in Milwaukee, Wis. Another lawyer, Kurt Opsah, of the Electronic Frontier Foundation based in Washington, D.C., said often lawsuits are filed which have no merit, but which are designed to silence foes, and compel them to spend money to defend themselves in court. Bloggers, who are generally small businesses , or part-time writers, may not have the means to defend themselves from well-financed legal assaults, however, experts said. The story of the lawsuits started a year ago. Blogger Aaron Wall, whose blog, SEOBook.com, is a popular destination for those in the search-engine optimization industry. Wall last year wrote of an error message on Traffic-Power.com's Web site, which said, "You have reached this page in error." Wall commented that "being on the Traffic-Power client list is an error."
This post inspired an array of even more negative posts about Traffic-Power.com from readers. "I recently got scammed by Traffic-Power," wrote one. Other postings suggested that Traffic-Power.com sent "reports from search engines nobody uses." Soon thereafter, Wall received a cease-and-desist letter from a Las Vegas attorney, Max Spilka, who accused the blogger of publishing "proprietary and confidential information related to Traffic-Power.com's business that was pirated from Traffic-Power and which Wall obtained without permission." The attorney also demanded that Wall provide a list of the sources -- for his postings -- and that he redact all information related to Traffic-Power.com from his Web site. If he did not comply, the lawyer wrote, the company would seek damages that could exceed US$1 million. On Aug. 11, the firm filed suit in a Nevada court, alleging defamation and theft of trade secrets against the blogger.
The stakes are high for the lawsuit. Traffic-Power.com is seeking to restore its reputation, and hopefully, one day, be allowed to work with Google.com again. Being knocked off the search engine would be a blow to any Internet marketing firm, as 45 percent of all searches in the United States are done with Google, according to Nielsen NetRatings Search Engine Ratings. A distant second in popularity is Yahoo.com with 23 percent of all searches, and MSN is third with about 13 percent. Part of the controversy over Traffic-Power stems from allegations of trying to optimize search engine rankings. Some clients complained about dropping in the rankings, but Traffic-Power says ranking drops for most clients were due to search engines changing their indexing methods, not something the firm did.
Brought to you by Guardian eCommerce.
Experts think the lawsuit may be dismissed as a suit designed to silence comment on matters of public concern, known by the acronym SLAPP, for Strategic Lawsuits Against Public Participation.
"Plaintiffs think they can bully Web sites and blogs into doing what they want," commented Eric Goldman, an attorney, and a faculty member at the Marquette University School of Law, located in Milwaukee, Wis. Another lawyer, Kurt Opsah, of the Electronic Frontier Foundation based in Washington, D.C., said often lawsuits are filed which have no merit, but which are designed to silence foes, and compel them to spend money to defend themselves in court. Bloggers, who are generally small businesses , or part-time writers, may not have the means to defend themselves from well-financed legal assaults, however, experts said. The story of the lawsuits started a year ago. Blogger Aaron Wall, whose blog, SEOBook.com, is a popular destination for those in the search-engine optimization industry. Wall last year wrote of an error message on Traffic-Power.com's Web site, which said, "You have reached this page in error." Wall commented that "being on the Traffic-Power client list is an error."
This post inspired an array of even more negative posts about Traffic-Power.com from readers. "I recently got scammed by Traffic-Power," wrote one. Other postings suggested that Traffic-Power.com sent "reports from search engines nobody uses." Soon thereafter, Wall received a cease-and-desist letter from a Las Vegas attorney, Max Spilka, who accused the blogger of publishing "proprietary and confidential information related to Traffic-Power.com's business that was pirated from Traffic-Power and which Wall obtained without permission." The attorney also demanded that Wall provide a list of the sources -- for his postings -- and that he redact all information related to Traffic-Power.com from his Web site. If he did not comply, the lawyer wrote, the company would seek damages that could exceed US$1 million. On Aug. 11, the firm filed suit in a Nevada court, alleging defamation and theft of trade secrets against the blogger.
The stakes are high for the lawsuit. Traffic-Power.com is seeking to restore its reputation, and hopefully, one day, be allowed to work with Google.com again. Being knocked off the search engine would be a blow to any Internet marketing firm, as 45 percent of all searches in the United States are done with Google, according to Nielsen NetRatings Search Engine Ratings. A distant second in popularity is Yahoo.com with 23 percent of all searches, and MSN is third with about 13 percent. Part of the controversy over Traffic-Power stems from allegations of trying to optimize search engine rankings. Some clients complained about dropping in the rankings, but Traffic-Power says ranking drops for most clients were due to search engines changing their indexing methods, not something the firm did.
Brought to you by Guardian eCommerce.
Monday, October 10, 2005
Online Advertising Continues Rapid Growth
Advertisers sunk nearly US$3 billion into online marketing campaigns in second quarter, with spending on Web advertising jumping 26 percent over the same period last year, according to a new report. The Interactive Advertising Bureau (IAB) and PricewaterhouseCoopers said Internet advertising revenues for the second quarter were $2.985 billion, up 7 percent over the first quarter of this year.
Online advertising marked its 10th straight quarter of growth, according to the IAB study, with the second quarter setting a new record for Internet marketing spending. Search marketing continued to dominate, grabbing 40 percent of the total online ad spending in the quarter. "It is clear from this continued growth, that most agencies and marketers are now committed to Interactive as a critical medium in reaching their audiences, as well as engaging them in more immersive brand experiences," said Greg Stuart, president and CEO of the IAB. "At the end of the day, it is about increased effectiveness from your marketing dollars and Interactive delivers this." PricewaterhouseCoopers partner David Silverman said the growth is a "natural development" since consumers are spending more time online, with less time spent on traditional media. "The flow of advertising dollars follows," he added.
The IAB said the numbers also highlight how the Web has come into its own as a branding medium, evolving from a strictly call-to-action advertising format. Rich media advertising rose 26 percent in the quarter, the report said, just edged out by search, which rose 27 percent. The IAB is currently finalizing guidelines for rich media and broadband advertising to help foster the growth of TV-style video ads. Another fast-growing segment of online marketing was so-called lead-generation and referrals, which nearly tripled to $347 million, or about 6 percent of total online spending. Falling were sponsorship programs, which lost 23 percent year-over-year to $317 million, and so-called slotting fees, which fell 37 percent to $58 million.
Online advertising has been growing steadily since early 2003 and is on track to surpass the $10 billion annual spending level for the first time in history. Research firm eMarketer predicts that more than $12 billion will be spent this year, double 2004 levels. By 2009, that's expected to reach $22 billion. "The spending growth is impressive, but shouldn't come as too great a surprise," said senior analyst David Hallerman. "These dazzling increases are possible in part because growth came from such a small base. And in the last few years the Internet has truly become a mainstream medium." Hallerman said the Web advertising sector is seeing expected growth given how many people now turn to the Web for news, information, communications and entertainment. "These yearly and quarterly ad spending gains point to a sea of change in media usage among marketers, reflecting how the Internet has become an essential element of daily life for more and more individuals," he added. Meanwhile, there's evidence that like online advertising, e-commerce is poised for a strong run heading into the all-important fourth quarter. Piper Jaffray analyst Safa Rashtchy said in a report that many e-tailers are building up extra inventories and boosting marketing budgets in anticipation of a strong fourth quarter. Some analysts believe the high price of gasoline may contribute to growth, with consumers thinking twice before driving to the mall to do their shopping.
Brought to you by Guardian eCommerce.
Online advertising marked its 10th straight quarter of growth, according to the IAB study, with the second quarter setting a new record for Internet marketing spending. Search marketing continued to dominate, grabbing 40 percent of the total online ad spending in the quarter. "It is clear from this continued growth, that most agencies and marketers are now committed to Interactive as a critical medium in reaching their audiences, as well as engaging them in more immersive brand experiences," said Greg Stuart, president and CEO of the IAB. "At the end of the day, it is about increased effectiveness from your marketing dollars and Interactive delivers this." PricewaterhouseCoopers partner David Silverman said the growth is a "natural development" since consumers are spending more time online, with less time spent on traditional media. "The flow of advertising dollars follows," he added.
The IAB said the numbers also highlight how the Web has come into its own as a branding medium, evolving from a strictly call-to-action advertising format. Rich media advertising rose 26 percent in the quarter, the report said, just edged out by search, which rose 27 percent. The IAB is currently finalizing guidelines for rich media and broadband advertising to help foster the growth of TV-style video ads. Another fast-growing segment of online marketing was so-called lead-generation and referrals, which nearly tripled to $347 million, or about 6 percent of total online spending. Falling were sponsorship programs, which lost 23 percent year-over-year to $317 million, and so-called slotting fees, which fell 37 percent to $58 million.
Online advertising has been growing steadily since early 2003 and is on track to surpass the $10 billion annual spending level for the first time in history. Research firm eMarketer predicts that more than $12 billion will be spent this year, double 2004 levels. By 2009, that's expected to reach $22 billion. "The spending growth is impressive, but shouldn't come as too great a surprise," said senior analyst David Hallerman. "These dazzling increases are possible in part because growth came from such a small base. And in the last few years the Internet has truly become a mainstream medium." Hallerman said the Web advertising sector is seeing expected growth given how many people now turn to the Web for news, information, communications and entertainment. "These yearly and quarterly ad spending gains point to a sea of change in media usage among marketers, reflecting how the Internet has become an essential element of daily life for more and more individuals," he added. Meanwhile, there's evidence that like online advertising, e-commerce is poised for a strong run heading into the all-important fourth quarter. Piper Jaffray analyst Safa Rashtchy said in a report that many e-tailers are building up extra inventories and boosting marketing budgets in anticipation of a strong fourth quarter. Some analysts believe the high price of gasoline may contribute to growth, with consumers thinking twice before driving to the mall to do their shopping.
Brought to you by Guardian eCommerce.
Saturday, October 08, 2005
Google Offers Prime-Time Video Streamcasts
Search engine leader Google is delving deeper into an unconventional business, offering an Internet streamcast of last week's television premiere of Chris Rock's new comedy. Other online outlets have made network prime-time shows available before, but "Everybody Hates Chris" marks Google's most high-profile video offering so far. It comes as Google increasingly ventures beyond its search roots as it battles the likes of Yahoo and Microsoft.
The series premiere -- 21 minutes long after removing commercials -- is being offered through Google's servers Monday through Thursday, when the new episode broadcasts on UPN. To prevent further distribution, the video is available as an on-demand stream rather than a download, which could be stored on a computer and copied. For UPN, the offering is an opportunity to reach viewers, particularly younger ones, who might have missed the premiere on broadcast TV. For Google, it is a chance to demonstrate that its Google Video service, still in a "beta" test phase, is more than a collection of home videos, which users are encouraged to upload.
"We're constantly exploring new ideas on how to deliver content to users," said Peter Chane, senior business product manager for Google's video team. He described the Rock offering as a test of "how many users want to watch the show on the Internet if they didn't watch it on television."
Through Google Video, professionals and amateurs alike may submit video that is indexed and then displayed through a browser-based video player. All the currently available videos are free, but Google hopes to eventually charge for some of the material in partnership with the content providers. Google also has been recording television shows off the air, but largely because of copyright restrictions it is displaying only still images and portions of transcripts from those shows.
Networking With a Network In the case of "Everybody Hates Chris," a comedy based on Rock's childhood in Brooklyn with a penny-pinching dad and tough but loving mom, Google had a deal with UPN. Larry Kramer, president of CBS Digital Media, which oversees UPN's Web site, said the network had to work out special rights with the production company, UPN affiliates and owners of music featured on the show. Chane and Kramer would not say whether any money changed hands as part of the deal. Earlier this year, the WB debuted its new series "Supernatural" on Yahoo before airing it on television, and last year it showed "Jack & Bobby" on America Online first. Yahoo also streamed the pilot of Kirstie Alley's "Fat Actress" at the same time it debuted on Showtime. The BBC also is experimenting with video online and plans to eventually let Web users watch its programs up to a week after they have aired.
In addition, studios have been adapting their hit shows for new media. Fox developed original, one-minute episodes of "24" for mobile devices. Kramer said a mini-version of the CBS crime drama "CSI" is being discussed for the Web and cell phones. He said talks with potential advertisers were ongoing, and no launch date has been set. "You'll see more and more becoming available on the Web, mostly in cases where networks are convinced it supports and helps the show," Kramer said.
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The series premiere -- 21 minutes long after removing commercials -- is being offered through Google's servers Monday through Thursday, when the new episode broadcasts on UPN. To prevent further distribution, the video is available as an on-demand stream rather than a download, which could be stored on a computer and copied. For UPN, the offering is an opportunity to reach viewers, particularly younger ones, who might have missed the premiere on broadcast TV. For Google, it is a chance to demonstrate that its Google Video service, still in a "beta" test phase, is more than a collection of home videos, which users are encouraged to upload.
"We're constantly exploring new ideas on how to deliver content to users," said Peter Chane, senior business product manager for Google's video team. He described the Rock offering as a test of "how many users want to watch the show on the Internet if they didn't watch it on television."
Through Google Video, professionals and amateurs alike may submit video that is indexed and then displayed through a browser-based video player. All the currently available videos are free, but Google hopes to eventually charge for some of the material in partnership with the content providers. Google also has been recording television shows off the air, but largely because of copyright restrictions it is displaying only still images and portions of transcripts from those shows.
Networking With a Network In the case of "Everybody Hates Chris," a comedy based on Rock's childhood in Brooklyn with a penny-pinching dad and tough but loving mom, Google had a deal with UPN. Larry Kramer, president of CBS Digital Media, which oversees UPN's Web site, said the network had to work out special rights with the production company, UPN affiliates and owners of music featured on the show. Chane and Kramer would not say whether any money changed hands as part of the deal. Earlier this year, the WB debuted its new series "Supernatural" on Yahoo before airing it on television, and last year it showed "Jack & Bobby" on America Online first. Yahoo also streamed the pilot of Kirstie Alley's "Fat Actress" at the same time it debuted on Showtime. The BBC also is experimenting with video online and plans to eventually let Web users watch its programs up to a week after they have aired.
In addition, studios have been adapting their hit shows for new media. Fox developed original, one-minute episodes of "24" for mobile devices. Kramer said a mini-version of the CBS crime drama "CSI" is being discussed for the Web and cell phones. He said talks with potential advertisers were ongoing, and no launch date has been set. "You'll see more and more becoming available on the Web, mostly in cases where networks are convinced it supports and helps the show," Kramer said.
Brought to you by Guardian eCommerce Privacy Seal Program.
Thursday, October 06, 2005
Visa, MasterCard Win Battle Over Breach
A California judge ruled Friday that Visa and MasterCard don't have to send individual warnings to thousands of consumers whose personal account information was stolen during a high-tech heist uncovered earlier this year. "I don't see the emergency," San Francisco Superior Court Judge Richard Kramer said in rejecting a request for an order against the nation's two largest credit card associations. "I don't think there is an immediate threat of irreparable injury" to consumers.
The ruling represents a setback for a consumer lawsuit targeting Visa and MasterCard for a computer security breakdown that occurred between August 2004 and May at CardSystems Solutions, a payment processor for merchants.
The breach, initially disclosed by MasterCard three months ago, exposed up to 40 million credit and debit accounts to potential abuse. The still-unknown computer hacker grabbed enough sensitive account information to defraud at least 264,000 account holders, according to evidence gathered in the case so far. Although the scope of the CardSystems break-in has been generally outlined, the credit card associations haven't sent warnings to the most vulnerable customers.
San Rafael, Calif., attorney Ira Rothken, who filed the lawsuit, argued that Visa and MasterCard at least should be required to notify the Californians whose account information was stolen. The notification request was made under a 2-year-old California law that has been widely copied across the country to help ensure consumers are alerted when their personal or financial information stored on a computer is lost, stolen or breached. Rothken argued that the law will be rendered "ineffectual" if the most vulnerable customers affected by the CardSystems breach aren't warned about their exposure to fraud.
Both Visa and MasterCard argued they shouldn't be obligated to send the notices because they don't have direct relationships with the account holders, whose cards were issued by thousands of banks that belong to the associations. San Francisco-based Visa and Purchase, N.Y.-based MasterCard provide processing and marketing services to the banks. Rothken contends California law requires warning notices be issued as quickly as possible so customers can take the necessary steps to protect themselves. "They [shouldn't] have to sit there and pray nothing bad happens to them," he told Kramer. MasterCard attorney Gary Halling countered that the law's disclosure intent had already been satisfied because the mid-June press release that announced the CardSystems breach had attracted prominent media coverage throughout California and spurred a hearing in U.S. Congress. If individual notices were sent, more customers might request a replacement card -- something that could be expensive for the industry. Each replacement account costs about US$35.
Visa and MasterCard have maintained there is little financial risk to even the most vulnerable account holders because of their "zero liability" policies that reverse all fraudulent charges.
What's more, the chances of identity theft are minimal, Visa and MasterCard said, because Social Security numbers and home addresses weren't taken in the CardSystems breach. The theft involved customer names, account numbers and security codes, providing the tools for criminals to make bogus credit and debit cards. In his oral ruling, Kramer criticized the consumer lawsuit for being too vague. "We have a complex case with complex legal questions that got wrapped into a ball and rolled in here," Kramer said. "It's just not presented in a way that a court can rationally deal with at this time."
Brought to you by Guardian eCommerce.
The ruling represents a setback for a consumer lawsuit targeting Visa and MasterCard for a computer security breakdown that occurred between August 2004 and May at CardSystems Solutions, a payment processor for merchants.
The breach, initially disclosed by MasterCard three months ago, exposed up to 40 million credit and debit accounts to potential abuse. The still-unknown computer hacker grabbed enough sensitive account information to defraud at least 264,000 account holders, according to evidence gathered in the case so far. Although the scope of the CardSystems break-in has been generally outlined, the credit card associations haven't sent warnings to the most vulnerable customers.
San Rafael, Calif., attorney Ira Rothken, who filed the lawsuit, argued that Visa and MasterCard at least should be required to notify the Californians whose account information was stolen. The notification request was made under a 2-year-old California law that has been widely copied across the country to help ensure consumers are alerted when their personal or financial information stored on a computer is lost, stolen or breached. Rothken argued that the law will be rendered "ineffectual" if the most vulnerable customers affected by the CardSystems breach aren't warned about their exposure to fraud.
Both Visa and MasterCard argued they shouldn't be obligated to send the notices because they don't have direct relationships with the account holders, whose cards were issued by thousands of banks that belong to the associations. San Francisco-based Visa and Purchase, N.Y.-based MasterCard provide processing and marketing services to the banks. Rothken contends California law requires warning notices be issued as quickly as possible so customers can take the necessary steps to protect themselves. "They [shouldn't] have to sit there and pray nothing bad happens to them," he told Kramer. MasterCard attorney Gary Halling countered that the law's disclosure intent had already been satisfied because the mid-June press release that announced the CardSystems breach had attracted prominent media coverage throughout California and spurred a hearing in U.S. Congress. If individual notices were sent, more customers might request a replacement card -- something that could be expensive for the industry. Each replacement account costs about US$35.
Visa and MasterCard have maintained there is little financial risk to even the most vulnerable account holders because of their "zero liability" policies that reverse all fraudulent charges.
What's more, the chances of identity theft are minimal, Visa and MasterCard said, because Social Security numbers and home addresses weren't taken in the CardSystems breach. The theft involved customer names, account numbers and security codes, providing the tools for criminals to make bogus credit and debit cards. In his oral ruling, Kramer criticized the consumer lawsuit for being too vague. "We have a complex case with complex legal questions that got wrapped into a ball and rolled in here," Kramer said. "It's just not presented in a way that a court can rationally deal with at this time."
Brought to you by Guardian eCommerce.
Tuesday, October 04, 2005
Total System Disruption
I recently attended a CIO/CFO roundtable that, among other things, focused on the difficulty of demonstrating the business value of IT. Exasperated, one CIO said half-jokingly: "Want to see if IT matters? I'll just go unplug all the servers and we'll see how long the business runs." He added that IT could never shut down today because it would be too disruptive -- unacceptable downtime is measured in seconds these days, not hours or weeks. Yet total systems disruption -- water, power, and communication, to name only a few -- is exactly what happened in New Orleans after Hurricane Katrina, and the immediate aftermath offers a view of the value of IT as well as our vulnerability to disruption in a technology-mediated world.
Although few analyst firms tried to parse Katrina from an IT perspective, Gartner set up a Katrina blog for their analysts, including one who volunteered his time to the rescue effort and others who looked at the disaster from a technology perspective. One analyst lauded the power of social networking for quickly identifying missing persons and reuniting lost families. Another focused on the importance of backup power systems, noting that fewer than half of all mobile cell sites have backup generators and most have only a few hours of reserve power. (Working cell phones would have helped greatly in the days after the disaster). Others focused on issues that will become more critical in the wake of Katrina-driven fuel-cost increases, such as telecommuting and supply-chain optimization. Then there was Gartner Research Vice President French Caldwell, who focused on better and more holistic uses of predictive technologies. "No one can be fast enough if relief starts once the storm is over," Caldwell asserted. "Perhaps we need a paradigm shift that recognizes the tremendous predictive power that computing improvements have brought in recent years."
Caldwell noted that although hurricane prediction models have continued to get better, what was needed in New Orleans was a more holistic, social dynamics model that took into account human behavior as well as the weather. How many people and in what locations would be unable to evacuate? How many would refuse to evacuate because they were determined to stay with their house and belongings? In a world where IT leaders are increasingly focused on human behavior along with organizational and cultural issues -- not just on hardware and code -- Caldwell's observation seems right on the mark. Most financially sound enterprises have risk management and disaster recovery plans that incorporate data, assets, and critical business processes. But how many of those plans take into account what the actual human beings involved might do? How many take into account the "soft" issues that always seem to foul up the best-laid plans?
Brought to you by the Privacy Seal Program from Guardian eCommerce.
Although few analyst firms tried to parse Katrina from an IT perspective, Gartner set up a Katrina blog for their analysts, including one who volunteered his time to the rescue effort and others who looked at the disaster from a technology perspective. One analyst lauded the power of social networking for quickly identifying missing persons and reuniting lost families. Another focused on the importance of backup power systems, noting that fewer than half of all mobile cell sites have backup generators and most have only a few hours of reserve power. (Working cell phones would have helped greatly in the days after the disaster). Others focused on issues that will become more critical in the wake of Katrina-driven fuel-cost increases, such as telecommuting and supply-chain optimization. Then there was Gartner Research Vice President French Caldwell, who focused on better and more holistic uses of predictive technologies. "No one can be fast enough if relief starts once the storm is over," Caldwell asserted. "Perhaps we need a paradigm shift that recognizes the tremendous predictive power that computing improvements have brought in recent years."
Caldwell noted that although hurricane prediction models have continued to get better, what was needed in New Orleans was a more holistic, social dynamics model that took into account human behavior as well as the weather. How many people and in what locations would be unable to evacuate? How many would refuse to evacuate because they were determined to stay with their house and belongings? In a world where IT leaders are increasingly focused on human behavior along with organizational and cultural issues -- not just on hardware and code -- Caldwell's observation seems right on the mark. Most financially sound enterprises have risk management and disaster recovery plans that incorporate data, assets, and critical business processes. But how many of those plans take into account what the actual human beings involved might do? How many take into account the "soft" issues that always seem to foul up the best-laid plans?
Brought to you by the Privacy Seal Program from Guardian eCommerce.
Sunday, October 02, 2005
Web Draws in Advertisers
If you type "e-mail marketing" into Google's search engine, Bronto Software appears under "sponsored links." Click on that link and the Durham, N.C., software company pays Google US$6.50. The advertising fees quickly add up. Bronto spends up to $1,200 daily on Google ads -- a lot for a company that expects to generate $1.5 million in revenue this year. But Bronto executives say it's a worthwhile investment.
Advertising has been the unfulfilled potential of the Internet. Early on, the Web was the mass medium that couldn't figure out how to turn a profit. That's changing. Giant advertisers such as Ford, as well as smaller businesses like Bronto, are fueling a surge benefiting Internet companies such as Google and Yahoo. Even traditional media, which saw advertising revenue droop after some larger advertisers turned to the Web, are benefiting from online advertising. Online ads are the fastest-growing segment of advertising for newspaper companies, according to the Newspaper Association of America.
Several factors are leading more advertisers to the Web:
-More eyes. "We are starting to see people who say they spend more time on the Web than with any other media," Isaid Sri Kalyanaraman, a professor at the University of North Carolina-Chapel Hill's School of Journalism and Mass Communications. Consumers with online access spend 34 percent of their total media time on the Web, according to Forrester Research.
-Better ads. Advertisers and ad agencies are becoming more adept at exploiting the medium. "Finally, there are enough proven examples of Internet marketing success stories," said analyst Shar VonBoskirk of Forrester Research.
-Accountability. Advertisers like to know what they're getting for their money, and the Internet lets them know. Many ads, like Google's search ads, don't cost a dime until someone clicks them. And the Web enables companies to track how much time someone spends with an ad and how many viewers make a purchase. By using Google's tracking system and its own software, Bronto knows that 5 percent of Google searchers who click on a Bronto link seek more information about the company. And 5 percent of those folks become customers. "It's all measurable," said Joe Colopy, Bronto's co-founder and president.
-Greater flexibility. More than half of the households with Internet connections now have broadband, according to eMarketer, a market research firm. That has attracted deep-pocket advertisers who are interested in providing "more compelling content to users," said Peter Petrusky, director of advisory services at PricewaterhouseCoopers.
Last year, Internet advertising revenue rose nearly 33 percent to $9.6 billion, according to data collected by PricewaterhouseCoopers for the Interactive Advertising Bureau, Revenue in the first quarter of this year rose 26 percent compared with the same period a year prior, for the ninth consecutive quarter of growth. While growing quickly, online ads are still a small portion of the market. The Interactive Advertising Bureau estimates online ad spending represents 3.7 percent of total advertising expenditures.
That is true at newspaper companies, too. For the second quarter, online newspaper ad revenue jumped 28.6 percent, over the same period in the year prior. The increase is 10 times the growth rate of print ads, according to the Newspaper Association of America. But online ads were still only 4.1 percent of total ad revenue. The McClatchy Co., the California-based owner of The News & Observer, posted a 37 percent increase in online ads for the second quarter, primarily due to growth in online classified ads. Online ads had 5.6 percent of the chain's total ad revenue.
Internet advertising also boomed during the dot-com craze. But when many of those advertisers went out of business, ad revenue plummeted. This time around, household names are leading the charge online.
For instance, Ford is expanding its Internet advertising and announced last fall it would generate "more than 1 billion consumer impressions" on the Web in a single quarter. "We have a lot more tools available to reach potential customers," said a statement by Marty Collins, general marketing manager of the Ford division. At the Research Triangle's largest ad firm, McKinney (which has shortened its name from McKinney & Silver), CEO Brad Brinegar is a big believer in Internet ads. So are his clients.
"I have to sell traditional advertising more than I have to sell online advertising, in some cases," Brinegar said. McKinney attracted national media attention this year for creating an "alternate reality game," centered around the Internet, for the introduction of the new Audi A3 luxury car.
The growth in online ad revenue cuts across categories, according to the data from PricewaterhouseCoopers and the Interactive Advertising Bureau.
But the fastest area of growth, as well as the No. 1 category, is search ads. They accounted for 40 percent of online ads and generated 51 percent more revenue in 2004 than they did a year earlier.
Search ads include the key word search ads used by Bronto, but the category extends beyond them. Other types include "contextual search" ads, such as those offered by Google, that place a company's ads on different Web sites featuring material relevant to the product or service the advertiser is selling. Google shares the ad revenue with the Web sites.
The explosion in search ads is reflected in the financials of the leading search companies.
Google, which generates all but 1 percent of its revenue from search ads and is the No. 1 search site, nearly doubled its revenue for the second quarter. Yahoo's second-quarter profit rose more than sixfold, thanks to a 51 percent jump in sales. Search ads are Yahoo's largest revenue source.
One reason search ads are so popular is that the Web is increasingly used to research purchases. Such ads can reach people while they're in a buying mood. Also attractive to advertisers is that they can set their own price. Multiple companies can choose to run ads tied to the same key words. The more they pay, the higher they appear among the sponsored links. "Each advertiser pays what it's worth to them," said Greg Stuart, CEO of the Interactive Advertising Bureau. Bronto, for example, has bids in on 800 key words and phrases -- from a high of $6.50 per click to as low as $1.75 for "law firm marketing products."
Search ads may be hot, but they aren't sexy. They're text only, and not much text at that. But, elsewhere, advertisers are flexing their creative muscles. "Ad agencies have finally learned how to use this medium," said Natalie Perkins, a Raleigh-based ad consultant. She cites as a prime example Burger King's "subservient chicken" at www.subservientchicken.com. It's a simple idea -- a video of a guy in a chicken suit (with garters, no less) who will follow typewritten commands. Type "moonwalk" and the chicken does just that.
It reinforces the idea that, at Burger King, you "get chicken just the way you like it." It's an idea that could be executed only on the Internet. And the Web site has attracted 17 million visitors -- plus boatloads of positive buzz -- for half the cost of what it would have taken to produce and buy time for a 30-second TV commercial, according to company spokeswoman Adrienne Hayes. "The Web has become a very powerful creative medium ... [and a] very popular consumer medium," said McKinney's Brinegar. "Where the two meet, opportunity explodes."
Brought to you by Guardian eCommerce.
Advertising has been the unfulfilled potential of the Internet. Early on, the Web was the mass medium that couldn't figure out how to turn a profit. That's changing. Giant advertisers such as Ford, as well as smaller businesses like Bronto, are fueling a surge benefiting Internet companies such as Google and Yahoo. Even traditional media, which saw advertising revenue droop after some larger advertisers turned to the Web, are benefiting from online advertising. Online ads are the fastest-growing segment of advertising for newspaper companies, according to the Newspaper Association of America.
Several factors are leading more advertisers to the Web:
-More eyes. "We are starting to see people who say they spend more time on the Web than with any other media," Isaid Sri Kalyanaraman, a professor at the University of North Carolina-Chapel Hill's School of Journalism and Mass Communications. Consumers with online access spend 34 percent of their total media time on the Web, according to Forrester Research.
-Better ads. Advertisers and ad agencies are becoming more adept at exploiting the medium. "Finally, there are enough proven examples of Internet marketing success stories," said analyst Shar VonBoskirk of Forrester Research.
-Accountability. Advertisers like to know what they're getting for their money, and the Internet lets them know. Many ads, like Google's search ads, don't cost a dime until someone clicks them. And the Web enables companies to track how much time someone spends with an ad and how many viewers make a purchase. By using Google's tracking system and its own software, Bronto knows that 5 percent of Google searchers who click on a Bronto link seek more information about the company. And 5 percent of those folks become customers. "It's all measurable," said Joe Colopy, Bronto's co-founder and president.
-Greater flexibility. More than half of the households with Internet connections now have broadband, according to eMarketer, a market research firm. That has attracted deep-pocket advertisers who are interested in providing "more compelling content to users," said Peter Petrusky, director of advisory services at PricewaterhouseCoopers.
Last year, Internet advertising revenue rose nearly 33 percent to $9.6 billion, according to data collected by PricewaterhouseCoopers for the Interactive Advertising Bureau, Revenue in the first quarter of this year rose 26 percent compared with the same period a year prior, for the ninth consecutive quarter of growth. While growing quickly, online ads are still a small portion of the market. The Interactive Advertising Bureau estimates online ad spending represents 3.7 percent of total advertising expenditures.
That is true at newspaper companies, too. For the second quarter, online newspaper ad revenue jumped 28.6 percent, over the same period in the year prior. The increase is 10 times the growth rate of print ads, according to the Newspaper Association of America. But online ads were still only 4.1 percent of total ad revenue. The McClatchy Co., the California-based owner of The News & Observer, posted a 37 percent increase in online ads for the second quarter, primarily due to growth in online classified ads. Online ads had 5.6 percent of the chain's total ad revenue.
Internet advertising also boomed during the dot-com craze. But when many of those advertisers went out of business, ad revenue plummeted. This time around, household names are leading the charge online.
For instance, Ford is expanding its Internet advertising and announced last fall it would generate "more than 1 billion consumer impressions" on the Web in a single quarter. "We have a lot more tools available to reach potential customers," said a statement by Marty Collins, general marketing manager of the Ford division. At the Research Triangle's largest ad firm, McKinney (which has shortened its name from McKinney & Silver), CEO Brad Brinegar is a big believer in Internet ads. So are his clients.
"I have to sell traditional advertising more than I have to sell online advertising, in some cases," Brinegar said. McKinney attracted national media attention this year for creating an "alternate reality game," centered around the Internet, for the introduction of the new Audi A3 luxury car.
The growth in online ad revenue cuts across categories, according to the data from PricewaterhouseCoopers and the Interactive Advertising Bureau.
But the fastest area of growth, as well as the No. 1 category, is search ads. They accounted for 40 percent of online ads and generated 51 percent more revenue in 2004 than they did a year earlier.
Search ads include the key word search ads used by Bronto, but the category extends beyond them. Other types include "contextual search" ads, such as those offered by Google, that place a company's ads on different Web sites featuring material relevant to the product or service the advertiser is selling. Google shares the ad revenue with the Web sites.
The explosion in search ads is reflected in the financials of the leading search companies.
Google, which generates all but 1 percent of its revenue from search ads and is the No. 1 search site, nearly doubled its revenue for the second quarter. Yahoo's second-quarter profit rose more than sixfold, thanks to a 51 percent jump in sales. Search ads are Yahoo's largest revenue source.
One reason search ads are so popular is that the Web is increasingly used to research purchases. Such ads can reach people while they're in a buying mood. Also attractive to advertisers is that they can set their own price. Multiple companies can choose to run ads tied to the same key words. The more they pay, the higher they appear among the sponsored links. "Each advertiser pays what it's worth to them," said Greg Stuart, CEO of the Interactive Advertising Bureau. Bronto, for example, has bids in on 800 key words and phrases -- from a high of $6.50 per click to as low as $1.75 for "law firm marketing products."
Search ads may be hot, but they aren't sexy. They're text only, and not much text at that. But, elsewhere, advertisers are flexing their creative muscles. "Ad agencies have finally learned how to use this medium," said Natalie Perkins, a Raleigh-based ad consultant. She cites as a prime example Burger King's "subservient chicken" at www.subservientchicken.com. It's a simple idea -- a video of a guy in a chicken suit (with garters, no less) who will follow typewritten commands. Type "moonwalk" and the chicken does just that.
It reinforces the idea that, at Burger King, you "get chicken just the way you like it." It's an idea that could be executed only on the Internet. And the Web site has attracted 17 million visitors -- plus boatloads of positive buzz -- for half the cost of what it would have taken to produce and buy time for a 30-second TV commercial, according to company spokeswoman Adrienne Hayes. "The Web has become a very powerful creative medium ... [and a] very popular consumer medium," said McKinney's Brinegar. "Where the two meet, opportunity explodes."
Brought to you by Guardian eCommerce.
