At $39.23 Billion , Facebook is now cheaper than what Steve Ballmer was prepared to pay for Yahoo (when Yahoo CEO Jerry Yang famously turned him down). Can Microsoft buy Facebook? or Can Apple buy Facebook?
Both would be okay from an anti trust perspective- and both have the cash. Note you need only to buy 51% of shares for controlling and Mark Zuckerberg seems a bit down (never mind Sean Parker’s voting arrangement).
Can Google plunk 20% of FB for 8 billion – less than they paid for Motorola, so they can sell Ads there while FB concentrates on thee social aspects.
FB has innovated with good UI, apps, cassandra,the like button, the FB connect network, and of course socially targeted ads. I dont think it’s stock price deserves to be dog with fleas.
I do like to experiment though, and I wonder if search engines just –
1) Make people lazy to bookmark or type the whole website name in Chrome/Opera toolbars
2) Help disguise sources of traffic by encrypted search terms
3) Help disguise corporate traffic watchers and aggregators
So I am giving all spiders a leave for Q1 2012. I am interested in seeing impact of this on my traffic , and I suspect that the curves would not be as linear as I think.
Is search engine optimization over rated? Let the data decide…. 🙂
I am also interested in seeing how social sharing can impact traffic in the absence of search engine interaction effects- and whether it is possible to retain a bigger chunk of traffic by reducing SEO efforts and increasing social efforts!
Data Miners love data. The more data they have the better model they can build. Consumers do not love data so much and find sharing data generally a cumbersome task. They need to be incentivize for filling out survey forms , and for signing to loyalty programs. Lawyers, and privacy advocates love to use examples of improper data collection and usage as the harbinger of an ominous scenario. George Orwell’s 1984 never “mentioned” anything about Big Brother trying to sell you one more loan, credit card or product.
Data generated by customers is now growing without their needing to fill out forms and surveys. This data is about their preferences , tastes and choices and is growing in size and depth because it is generated from social media channels on the Internet.It is this data that can be and is captured by social media analytics.
Mobile data is also growing, including usage of location based applications and usage of Internet from the mobile phone is leading to further increases in data about consumers.Increasingly , location based applications help to provide a much more relevant context to the data generated. Just mobile data is expected to grow to 15 exabytes by 2015.
People want to have more and more conversations online publicly , share pictures , activity and interact with a large number of people whom they have never met. But resent that information being used or abused without their knowledge.
Also the Internet is increasingly being consolidated into a few players like Microsoft, Amazon, Google and Facebook, who are unable to agree on agreements to share that data between themselves. Interestingly you can use Yahoo as a data middleman between Google and Facebook.
At the same time, more and more purchases are being done online by customers and Internet advertising has grown much above the rate of growth of other mediums of communication.
Internet retail sales have the advantage that better demand predictability can lead to lower inventories as retailers need not stock up displays to look good. An Amazon warehouse need not keep material to simply stock up it shelves like a K-Mart does.
Our Hypothesis – An Analogy with how Financial Data Marketing is managed offline
Financial information regarding spending and saving is much more sensitive yet the presence of credit bureaus alleviates these concerns.
Credit bureaus collect information from all sources, aggregate and anonymize the individual components accordingly.They use SSN as a unique identifier.
The Internet has a unique number too , called the Internet Protocol Address (I.P)
Should there be a unique identifier like Internet Security Number for the Internet to ensure adequate balance between the need for privacy as well as the need for appropriate targeting?
After all, no one complains about privacy intrusions if their credit bureau data is aggregated , rolled up, and anonymized and turned into a propensity model for sending them direct mailers.
Let’s say a gym opens in your neighborhood. The owner creates an ad to get people to come in for a free workout.
2. Facebook gets paid to deliver the ad
The owner sends the ad to Facebook and describes who should see it: people who live nearby and like running.
The right people see the ad
3. Facebook only shows you the ad if you live in town and like to run. That’s how advertisers reach you without knowing who you are.
Adding in credit bureau data and legislative regulation for anonymizing and handling privacy data can expand the internet selling market, which is much more efficient from a supply chain perspective than the offline display and shop models.
Privacy Regulations on Marketing using Internet data Should laws on opt out and do not mail, do not call, lists be extended to do not show ads , do not collect information on social media. In the offline world, you can choose to be part of direct marketing or opt out of direct marketing by enrolling yourself in various do not solicit lists. On the internet the only option from advertisements is to use the Adblock plugin if you are Google Chrome or Firefox browser user. Even Facebook gives you many more ads than you need to see.
One reason for so many ads on the Internet is lack of central anonymize data repositories for giving high quality data to these marketing companies.Software that can be used for social media analytics is already available off the shelf.
The growth of the Internet has helped carved out a big industry for Internet web analytics so it is a matter of time before social media analytics becomes a multi billion dollar business as well. What new developments would be unleashed in this brave new world is just a matter of time, and of course of the social media data!
3 years ago, in a mock article I speculated what happened if Microsoft followed Google, and gave away Windows/Office for free while showing you ads. Basically whats the value of a single customer for 3-4 years worth of ads.
I recently found an interesting example of a website that both makes a lot of money and yet is much more efficient than any free or non profit. It is called ECOSIA
If you see a website that wants to balance administrative costs plus have a transparent way to make the world better- this is a great example.
World’s largest tropical forest reserve (38,867 square kilometers, or about the size of Switzerland)
Home to about 14% of all amphibian species and roughly 54% of all bird species in the Amazon – not to mention large populations of at least eight threatened species, including the jaguar
Includes part of the Guiana Shield containing 25% of world’s remaining tropical rainforests – 80 to 90% of which are still pristine
Holds the last major unpolluted water reserves in the Neotropics, containing approximately 20% of all of the Earth’s water
One of the last tropical regions on Earth vastly unaltered by humans
Significant contributor to climatic regulation via heat absorption and carbon storage
Click per milli (or CPM) gives you a very low low conversion compared to contacting ad sponsor directly.
But its a great data experiment-
as you can monitor which companies are likely to be advertised on your site (assume google knows more about their algols than you will)
which formats -banner or text or flash have what kind of conversion rates
what are the expected pay off rates from various keywords or companies (like business intelligence software, predictive analytics software and statistical computing software are similar but have different expected returns (if you remember your eco class)
NOW- Based on above data, you know whats your minimum baseline to expect from a private advertiser than a public, crowd sourced search engine one (like Google or Bing)
Lets say if you have 100000 views monthly. and assume one out of 1000 page views will lead to a click. Say the advertiser will pay you 1 $ for every 1 click (=1000 impressions)
Then your expected revenue is $100.But if your clicks are priced at 2.5$ for every click , and your click through rate is now 3 out of 1000 impressions- (both very moderate increases that can done by basic placement optimization of ad type, graphics etc)-your new revenue is 750$.
Be a good Samaritan- you decide to share some of this with your audience -like 4 Amazon books per month ( or I free Amazon book per week)- That gives you a cost of 200$, and leaves you with some 550$.
Wait! it doesnt end there- Adam Smith‘s invisible hand moves on .
You say hmm let me put 100 $ for an annual paper writing contest of $1000, donate $200 to one laptop per child ( or to Amazon rain forests or to Haiti etc etc etc), pay $100 to your upgraded server hosting, and put 350$ in online advertising. say $200 for search engines and $150 for Facebook.
Woah!
Month 1 would should see more people visiting you for the first time. If you have a good return rate (returning visitors as a %, and low bounce rate (visits less than 5 secs)- your traffic should see atleast a 20% jump in new arrivals and 5-10 % in long term arrivals. Ignoring bounces- within three months you will have one of the following
1) An interesting case study on statistics on online and social media advertising, tangible motivations for increasing community response , and some good data for study
2) hopefully better cost management of your server expenses
3)very hopefully a positive cash flow
you could even set a percentage and share the monthly (or annually is better actions) to your readers and advertisers.
go ahead- change the world!
the key paradigms here are sharing your traffic and revenue openly to everyone
donating to a suitable cause
helping increase awareness of the suitable cause
basing fixed percentages rather than absolute numbers to ensure your site and cause are sustained for years.
DECISION STATS 