Category: business | 商業 | 상업 | ビジネス

My interest in business or commercial activity first started when a work friend of my Mum visited our family. She brought a book on commerce which is what business studies would have been called decades earlier. I read the book and that piqued my interest.

At the end of your third year in secondary school you are allowed to pick optional classes that you will take exams in. this is supposed to be something that you’re free to chose.

I was interested in business studies (partly because my friend Joe was doing it). But the school decided that they wanted me to do physics and chemistry instead and they did the same for my advanced level exams because I had done well in the normal level ones. School had a lot to answer for, but fortunately I managed to get back on track with college.

Eventually I finally managed to do pass a foundational course at night school whilst working in industry. I used that to then help me go and study for a degree in marketing.

I work in advertising now. And had previously worked in petrochemicals, plastics and optical fibre manfacture. All of which revolve around business. That’s why you find a business section here on my blog.

Business tends to cover a wide range of sectors that catch my eye over time. Business usually covers sectors that I don’t write about that much, but that have an outside impact on wider economics. So real estate would have been on my radar during the 2008 recession.

Piper Jaffray trends
US investment bank Piper Jaffray put out some of the smartest publicly available thinking about the internet space at the moment: last week they issued a new detailed report called The User Revolution: The New Advertising Ecosystem and The Rise of the Internet as a Mass Medium. Piper Jaffray customers can get a copy from their representative, I am on their email list because of my long-term interest in this area.

Reading it at first, my initial reaction was that I thought that it was quite patronising, but then I realised that the document has to assume little to no knowledge because its main audience is going to be fund managers of all ilks.

The Piper Jaffray report has some great industry data points and articulates many of the key concepts that are shaping this market in an easy and articulate manner. In the accompanying industry note the technology analyst team pulled out those key points as an executive summary; some of which I expect to see being incorporated into PowerPoiint presentations at a meeting near you:

The User Revolution

The User Revolution – consumers taking control of content consumption and branding. User-generated content as well as user indent driven services (like Amazon, Last.fm and Yahoo! Music’s Launch radio stations).

Communitainment – The three areas that historically drove demand for internet services like Yahoo! and AOL of comunity, communication and entertainment are being directly addressed all at once by new services acting as an accelerant for for the market

The Golden Search – ’search as the new portal’. When I used to work at Yahoo! search was described as the front door to the web. A much quoted statistic was that over seven out of every ten internet sessions was started from a search enquiry. Piper Jaffray thinks that search will be increasingly used in branding campaigns (marketers really need to crack this as contextual and search adverts have encouraged brand disloyalty – Kelkoo’s whole business was built on the back of Google ads with pretty much zero brand marketing, and you have a generation of online marketers who use quantative data from search marketing without any regard to brand value, instead focusing purely on transactional data).

Video ads

Video ads will be the next thing – this is kind of counter-intuitive as ads have moved from banners and animation to text ads, but then services like YouTube facilitate in-programming ads a la television.

I found the following section of the report executive summary particularly pertinent, and as a PR consultant it is the concept that clients I have spoken to find the most difficult to grasp: The Revolution Is About Control. The uprising by the users is over control – control of the type of content users want, control of the place and time content is delivered., control of the advertisements that the users are willing to take, and control of the brands they want to create. Unlike most revolutions, where the masses revolt because of major hardship and grievance, the User Revolution was largely driven by the proliferation of media options, the emergence of the Internet, and the growing sophistication of consumers.

I find the last point of particular interest, particularly when I think of the adverts that run on UK television for products like the now defunct Courts Carpets or Cillit Bang – perhaps there isn’t that much wisdom in marketing.

And finally just a couple of the business risks that I through of interest:
- The loss of confidence by advertisers in the effiacy of online advertising and emerging business models.
- A decrease in efficacy of online advertising including display and search advertising
Media fragmentation

I particularly like how they show the fragmentation of media over the past 40 years!

More related content here.
February 25, 2007
Airplane reading

During my recent travels I needed some airplane reading materials, but didn’t want to go down the mindless thriller route a la Grisham, Dan Brown or Tom Clancy.

I took a few books with me, two of which I will cover off in this post. It’s not how good you are, it’s how good you want to be by Paul Arden. The book distills the wisdom of a senior advertising man and provides inspiration that agency account leads can dip into to dig themselves out of the usual SNAFU account work or new business pitches that occcasionally come up.

Unstuck by Keith Yamashita and Sandra Spataro provides guidance on getting past team issues. The cleverest part of the book is the personality test for your team at the beginning that helps you move through the problem. Like the Paul Arden book, Unstuck can be read from cover-to-cover the value is knowing that it is there to pull out of the drawer and use it as a prudent time to resolve team and project issues.

Having them as airplane reading material gave me a good idea of what I could get out of them. Also they are small and slim, providing a lighter load for your carry-on luggage or slip into the main pocket of a fleece. More book reviews here.

January 28, 2007
Sunday Miscellany

You know when you’re part of the the technorati when: you’ve had your comments login for Valleywag before they threw the door open to the proletariat. Valleywag is the gossip site du jour for the tech sector, following on from the PC era Notes From The Field that featured in InfoWorld.

Whilst everyone at Fortune magazine gets excited that a candid interview with Bill Watkins of Seagate Technology has an admission that consumers use their ever larger hard drive to hold more porn; they manage to gloss over the real telling comments that offer more than a brace of Valleywag articles.

The M&A boom: The Valley is no longer “about building a company and a culture. It’s about making money for the top guys. If you look back to Intel (Charts) and Fairchild, they set out to build a company that would become massively large. Google (Charts) was another good example. They waited a long time. They wanted to build a big company. People don’t think like that now.” That includes, Watkins continues, YouTube. “YouTube is like eBay. The founders didn’t know what they were doing. The consumers just took hold of it.”

The private equity boom: Seagate went private in 2000 – in a $2 billion buyout led by Silver Lake Partners – only to go public again in 2002, giving Watkins insight into the current privatization wave. “It’s all about investors getting short-sighted. They’ve lost their patience. There’s nothing these private equity firms do that Fidelity couldn’t do. If you’re Fidelity, and you own $40 million of my business, and you want a meeting to discuss how my business could be run more efficiently, I’ll take the meeting. I’ll listen. But that’s not the way things work. When you go private, the only thing you think about is going public again.”

Silicon Valley is running a risk in losing the key thing that separates it from Bangalore, Cambridge Mass. and Epsoo Finland. The culture. This is what makes engineers work days and nights to code great products and attracts some of the brightest people from around the world.

The short-termism that Watkins goes on about shows how the Valley is no longer seen as separate to mainstream corporate America; but you can’t run a technology company in the same way as a biscuit company.

On the way back from Liverpool I managed to read Irresistible! Markets, Models and Meta-Value in Consumer Electronics by Bailey and Wenzek. Given that the book was published by IBM and the authors are business consultants for IBM it was no accident that the future of consumer electronics is powered by cell processors and embedded Linux.

What is interesting is the way Bailey and Wenzek see a blurring of the line between a product and the adjunct services like the iPod and iTunes. They also predict an electronics industry with only 25 per cent of the players that are currently in the marketplace and highlight the needs for localised products for local consumers. More book reviews here.

December 3, 2006
The Strength of the Wolf

I chose The Strength of the Wolf by Douglas Valentine as I needed a good paperback to read as I travelled back to Liverpool. It seemed strangely appropriate that I read a book about narcotics travelling there; given that Liverpool’s recent history and cultural renaissance has been intertwined with its association as the UK’s narcotic equivalent of the Square Mile. Characters like Curtis Warren as it’s big swinging dicks as Liars Poker author Michael Lewis would have called them.

The premise of The Strength of the Wolf by Douglas Valentine is that the US and other foreign governments have had their fingers in the drug trafficking pie for hundreds of years.

Indeed Great Britain fought two wars over the opium trade. However, this is thought to be history.

The US as the 20th century empire ‘ruler’ is alleged to have carried on the practice supporting Chinese nationalists running heroin through the golden triangle, right-wing military figures in South America, friendly factions in the Middle East to smuggle opium to the French Connection and allowing the mafia a degree of freedom in return for using their supply.

Valentine also describes how drugs were used as a way of controlling minorities and how politically-motivated drugs laws fanned demand in the US rather than choking it off.

These allegations are made as Valentine tells the story of the FBN (the federal bureau of narcotics), its successes, it’s failures and its politics. How officers trod the line between doing their job, whilst not upsetting the establishment players who most benefited from the drug trade that they combated.

The book covers the inner real politik that tore the FBN apart and the global narcotics market as it evolved from the early 20th century.

Valentine eventually decides to pursue so many leads from Jack Ruby’s involvement with drugs, the CIA and narcotics business associates link with the Kennedy assassination (which sounds only slightly more credible than the Warren Commission finding that Oswald did it on his own with an Italian carbine), DeGaulle’s link with Corsican criminals to fund French intelligence work and Mossad’s alleged involvement with money launderers and Lebanese narco power-brokers.

At times these allegations and avenues come out like a stream of consciousness and the thread of the plot leaps around like an epileptic break dancer. Whilst Valentine has obviously done a very thorough and comprehensive job in researching the book, it seems that he had too much material to work with in too little time.

The book becomes hard to follow because of the huge amount of information and cross-linkages that it tries to convey and not exactly ideal reading material for travelling.

I stuck with the book, not because of the drugs and intelligence drama, but the more human tale of how the agents careers were created and trashed like failed drafts being thrown in the paper basket. The book on balance, deserves the plaudits that have been heaped upon it, but who will recognise the achievements of the reader who pushes through to the end? More book reviews can be found here.

November 30, 2006
Peanut Buttergate

Peanut Buttergate broke over the past few days. It is also better known as the Peanut Butter memorandum. What is it and why should you care? In the post below I write about it from my viewpoint as a former Yahoo! employee in the European marketing team focused on search. I am familiar with the business units and the personalities involved.

Who is Brad Garlinghouse?

Brad Garlinghouse is a natural and compelling presenter. I had seen him speak in internal presentations about Yahoo!’s communications and messenger products. Garlinghouse has written a four-page memorandum looking for internal change at Yahoo! which maps out a possible future direction for the firm.

Brad Garlinghouse makes some very pertinent points in his now famous peanut butter memo about Yahoo!, but ultimately shows a more selfish agenda than ‘saving’ the company he loves.You can read the full memo here, but I have just pulled some of the key items out to provide a European perspective on some of the points that he made. YMG = Yahoo! Media Group – the team that Garlinghouse led at the time.

Garlinghouse was frustrated with what he saw as competing products and approaches:

• Flickr vs. Photos: To say that Photos competes with Flickr is ridiculous Yahoo! Photos was tired, boring and a pretty shoddy product

• YMG video vs. Search video

• Deli.cio.us vs. My Web

• Messenger and plug-ins vs. sidebar and widgets

• Social media vs. 360 and Groups

• Front page vs. YMG

• Global strategy from BU’vs. Global strategy from Int’l

Part of the reason for this was a complex silo’ed matrix structure and an the result of an organisation struggling to fight a talent and ideas war against very strong adveraries like Google and Microsoft.

Some of the Yahoo! products should have been killed off, whilst other duplications occurred because internal products like 360, Messenger and MyWeb sucked at crucial iterations in their product life.

In addition, Yahoo!, particularly Music and the Comms & Community BU which Garlinghouse runs has a poor record of building products fit for early adopters like Music properties that aren’t Mac-compatiable, the new Yahoo! Mail which doesn’t work on Safari and a Messenger client which was much poorer than open source equivalents like Adium X making it hard to build a buzz that will trickle down to mainstream users.

Develop a focus on the vision

Absolutely, and drive this down into reinvigorating the brand for the 21st century. In the US, Yahoo! has a brand that resonates with consumers, but in Europe the Yahoo! brand doesn’t stand for anything. Whilst my former boss Georga could recite the values of the brand and we all had purple folders highlighting what they were, this hadn’t changed in consumer perceptions. Focus on the vision is the first part of making that work.

Restore accountability and clarity of ownership

Two things are needed here – measurements that ensure long-term thinking rather than stort-term performance peaks and selling the future. The right people in the right roles to fulfil this. In Europe, this means going from from the top down.

Long-term thinking means building a brand to make Yahoo! a must-go online destination, rather than just using arbitrage calculations to buy clicks on Google. It means giving European users a higher quality user experience and prioritising the products users want rather than executive whims

Redesign performance and incentive schemes: This is only any good if it is tied into the right measurements and I don’t think that Garlinghouse has got these measures right.

Peanut Buttergate as part in power play

This paragraph I found particularly interesting, yet has got the least publicity is ‘Align a set of new BU’s so that they are not competing against each other. Search focuses on search. Social media aligns with community and communications. No competing owners for Video, Photos, etc. And Front Page becomes Switzerland. This will be a delicate exercise — decentralization can create inefficiencies, but I believe we can find the right balance.’

Garlinghouse is basically going for a power play here.

Social media has been alligned to search because that’s where a lot of the smart people who get it are: community and communications from a product and technology perspective don’t get it.

Search has embraced social media because the algorithimic war is one of attrition whereas social media offers a breakout situation. A more radical and business savvy play would be to adopt Google search again and augment it with social media.

Garlinghouse blew it at that paragraph, its not about doing the best for the company, its about building his empire in the face of worthy opponents like Jeff Weiner who heads-up Search.

It would make more sense to put Communications mail product and all the communities products into Search alongside desktop search.

Final gaffe in Peanut Buttergate

Finally being a marketing person I was horrified to see such a high profile marketing gaff ‘I love Yahoo! I’m proud to admit that I bleed purple and yellow.’ Yellow has not been an official corporate colour for over a year, somebody please give him a brand guide folder. More Yahoo! related content here.

November 19, 2006