AllThingsD » inventory

Nokia: We're Building Lumia 900s as Fast as We Can

John Paczkowski — Wed, 18 Apr 2012 10:41:09 +0000

We won’t know for certain how many Lumia 900s Nokia and AT&T have sold, until the companies report second-quarter 2012 financial results this summer, or release official sales data. But it turns out that the recent Lumia 900 stock-outs AT&T has been experiencing are a pretty good indicator of how the device is faring at market.

Looks like the software glitch that plagued early versions of the handset — and prompted Nokia to offer replacement devices to consumers affected by it — hasn’t had much of an effect on inventory. The company says that far more consumers have opted to patch their Lumias with the software Nokia has provided than have swapped them for new ones at a local AT&T store.

In other words, if the cyan version of the Lumia 900 is out of stock at AT&T’s online store (as it currently is), it’s because it’s sold out for the time being, not because Nokia is scrambling to update and recertify returned handsets.

“The inventory situation is primarily a function of demand because we are seeing that most customers are opting to keep their units and simply update via Zune,” Nokia spokeswoman Karen Lachtanski told AllThingsD. “So the impact of customer swaps is insignificant. We are producing more devices to satisfy demand as quickly as possible.”

That’s a good sign, indeed. And further evidence that sales are exceeding expectations, as Paul Roth, AT&T’s president of retail sales and service, recently claimed.

BlackBerry Friday: PlayBook at $300 Off

John Paczkowski — Fri, 18 Nov 2011 00:24:27 +0000

Soon you’ll be able to buy a BlackBerry PlayBook for the same price as Amazon’s new Kindle Fire: $199.

With the holidays nearly upon us — and a stockpile of unsold PlayBooks sitting in inventory — Research In Motion is giving its struggling tablet its steepest price cut yet. Tomorrow, a number of Canadian retailers will slash $300 off the PlayBook’s list price across the entire line. That means $199 for the 16 gigagbyte model; $299 for 32GB, and $399 for 64GB. And, come Black Friday, Staples and others presumably will do the same in the U.S.

So, $199 — not bad for the tablet that was to be “a quantum leap over anything that’s out there.”

[Image credit: Staples]

Former Top Yahoo Sales Exec Weishaupt Joins Criteo

Kara Swisher — Wed, 16 Nov 2011 18:13:35 +0000

Well-known online advertising exec Frank Weishaupt, who recently ran North American marketplaces for Yahoo, will join ad display performance firm Criteo to head up sales.

Weishaupt, who left Yahoo several months ago, will be based in Boston and will be hiring up to 100 salespeople. He’ll report to another former top Yahoo sales exec, Criteo President Greg Coleman.

Interestingly, one of the pair’s most pressing challenges going forward will be the recent move of Yahoo to block “retargeting” firms.

In a post last week, Peter Kafka wrote that Yahoo told Criteo and others that “it would stop selling them its ‘Class 2’ remnant inventory, which the companies used to purchase on behalf of clients and essentially resell at a premium. The idea, theoretically, is that Yahoo will sell more of those ads itself.”

Here’s the official press release:

CRITEO TAPS FRANK WEISHAUPT AND EXPANDS FOOTPRINT; OPENS BOSTON OFFICE

Leading online advertising performance platform expands US presence with Boston office and hires Former Yahoo! digital media veteran

PALO ALTO, CA — (NOVEMBER 14, 2011) – Criteo, the global leader in performance display today announced that Frank Weishaupt, former Vice President, North American Advertising Marketplaces at Yahoo!, will join the company as SVP of Sales. The company also announced the continued expansion into the US Market with the opening of an office in Boston, which will focus on sales and service to mid-market advertisers and publishers. With offices in over three continents, Criteo now employees over 400 employees while serving personalized ads on behalf of over 1200 e-commerce clients across 20 countries globally.

“Criteo is committed to bringing performance to the display advertising landscape,” said Greg Coleman, President of Criteo. “I am thrilled to have Frank, a true industry veteran with a very successful track record of scaling sales organizations, join the team to continue our momentum. Our goal at Criteo is to bring our solution to a wide variety of advertisers and publishers, and Frank will be focused on helping meet that objective.”

As a 15 year digital media veteran, one of Weishaupt’s key priorities will be to build a sales organization in Boston focused on mid-market advertisers and publishers. Weishaupt has been a key part of exponential growth for several of the world’s most influential digital media companies.

“Criteo has created a name for itself as the global leader in performance display advertising. I am excited to have joined a company that is committed to growth and a team with such passion to drive this industry forward,” said Frank Weishaupt, SVP of Sales at Criteo.

Prior to joining Criteo, Weishaupt held several key management at Yahoo! over a 10-year period. Most recently he had General Management responsibilities for the US Display, Search, and Ad Technology businesses. The focus of the role was overall monetization strategy, pricing and yield management, strategic direction of the Yahoo! Ad Network, and general management of the ad platforms and global exchange.

Weishaupt holds a bachelor’s degree in engineering from Northeastern University.

Criteo is hiring and looking for team members to join the global leader in performance online advertising marketing.

Federated Media Buys Lijit Networks

Kara Swisher — Tue, 04 Oct 2011 12:00:16 +0000

San Francisco-based Federated Media Publishing said it has bought Lijit Networks, a smaller online advertising analytics and tools firm.

The price for the Boulder, Colo., start-up — which was founded in 2006 — was undisclosed, but it has received just under $29 million in venture funding from firms such as Foundry Group. Federated said Lijit would continue to operate independently, “but in conjunction.”

In an interview yesterday, Federated CEO Deanna Brown said the buy was to round out offerings for its clients and to better compete in a world where most of the online ads go to the top five players.

“I am excited we can give both publishers and advertisers more tools for engagement and monetization,” she said.

Federated, which lost big social-media news site Mashable earlier this year, also benefits from increased scale and inventory of sites.

Lijit CEO Todd Vernon, who will become EVP of technology at Federated, said that it was ever more important for ad-focused firms on the Web to “deliver the entire stack.”

“Lijit has a core competency in the media business, and combined with FM’s best-in-class sales force, we can offer everything needed to do effective online campaigns,” he said.

Here’s the official press release:

Federated Media Publishing To Acquire Lijit Networks

Combined Entity Will Power More than 77,000 Independent Publishers Across the Web Via Comprehensive Advertising, Analytics and Reader Engagement Tools

SAN FRANCISCO, October 4, 2011 – Federated Media Publishing, which powers the best of the Independent Web, today announced the acquisition of Lijit Networks, Inc. Lijit is a leading provider of advertising services, audience analytics and reader engagement tools for online publishers of all sizes. The combined entity will reach nearly 300 million global unique visitors according to Quantcast.

Lijit, headquartered in Boulder, Colorado, will continue to operate independently but in conjunction with the rest of Federated Media Publishing. Lijit CEO Todd Vernon and COO Walter Knapp will take on corresponding EVP of Technology and SVP of Platform Revenue responsibilities at Federated Media Publishing and will report directly to Federated Media Publishing’s CEO, Deanna Brown. Additionally, Lijit board member Seth Levine from Foundry Group will join the Federated Media Publishing board of directors, effective immediately.

With the addition of Lijit Networks’ existing publisher relationships, Federated Media Publishing will now reach more than 77,000 online publishers and nearly 15,000 expert communities, making it one of the largest companies to power publishing on the Independent Web. The acquisition vastly expands the combined company’s inventory of sites, offering premium advertisers improved scale and reach.

Publishers Will Profit and Flourish

Lijit helps publishers more thoughtfully interact with and better understand their audience by providing analytics and engagement tools that build deeper relationships, lengthen time on site and increase page views. These robust and actionable audience analytics and reader engagement tools leverage intent, behavior and demographics to help publishers of all sizes increase revenue and better engage their readers.

Additionally, the combined advertising services provided by FM and Lijit will give publishers of all sizes a revenue stream that complements existing sales efforts and helps grow and monetize their website businesses, no matter what the size.

Advertisers Can More Easily Analyze and Engage

The combination of Federated Media Publishing’s premium online advertising and conversational marketing programs and Lijit’s proprietary data collection tools will empower advertisers to better understand user intent, contextual relevance and demographic information. And by leveraging the combined entity’s extensive publisher relationships, advertisers will have unprecedented scale on the Independent Web.

Introducing Programmatic Buying to the Independent Web

Programmatic buying is one of the fastest growing trends in digital media and the introduction of Lijit’s robust RTB exchange will equip media buyers with one of the largest platforms available. Over the next few months, Federated Media Publishing and Lijit will develop a series of private exchanges that will highlight leading independent publishers. These exchanges will allow brands to engage active, passionate consumers found in highly conversational online communities and publications, while delivering premium CPM rates via FM’s conversational marketing programs.

Quote

“The Lijit Networks team is just as passionate and committed to powering publishers as we are at Federated Media Publishing and that was a crucial element to this decision,” said Deanna Brown, chief executive officer, Federated Media Publishing. “Our combined relationships, proprietary tools and conversational marketing services will be invaluable to publishers and advertisers alike.”

“Federated Media invented how to leverage authentic voices and engaged conversations that exist in the Independent Web,” said Todd Vernon, founder and CEO of Lijit Networks. “The combination of the two companies is a game changer in the industry that unlocks new opportunities for both companies and our combined publisher network.”

Groupon's Andrew Mason Talks About…No, Not Exec Shakeup, But Groupon Now

Kara Swisher — Thu, 24 Mar 2011 13:04:19 +0000

Yesterday, BoomTown had a cheap Chinese lunch and a chit-chat with Groupon CEO Andrew Mason in Silicon Valley–but not about what most people want to talk to him about.

That would be the departure of the Chicago-based social buying site’s President and COO Rob Solomon and who is on the very short list of candidates the hot start-up will replace him with.

Oh, I tried to get him to ‘fess up about all that, but Mason would not bite, except on his Kung Pao Chicken.

Instead, all he wanted to talk about and show off is Groupon’s latest real-time deal innovation, which it is calling Groupon Now–and which Mason has been touting a lot of late.

“It’s deals in a time window linked to a location,” said Mason. “Until now, no one has had the assets to fix a merchant problem that was viciously subject to a chicken-and-egg situation.”

By that metaphor, Mason means real-time deals by location, rather than via emails, doled out and paid for immediately, taking advantage of perishable retail inventory.

And, of course, using the burgeoning smartphone phenom via an app with only two buttons:

“I’m Hungry” and “I’m Bored.”

Which pretty much covers most of humanity’s main complaints.

The company is rolling Groupon Now out to thousands of merchants in early April, first in Chicago, San Francisco and Washington, D.C.

“Even the most popular restaurants and businesses are never completely full,” said Mason. “Groupon Now can help them even out the flow of customers.”

It’s this push and pull that Mason hopes will move “Groupon 1.0″ to the next level.

More importantly, Groupon Now is the start-up’s attempt to thwart rivals hot on its heels, as well as grow into the gazillion-dollar valuations being bandied about for its possible IPO.

But all of those competitors have moved into the real-time space too, from LivingSocial Instant to offerings from OpenTable, SCVNGR to Yelp to Foursquare. And, of course, there are also big efforts coming from both Facebook and Google, whose $6 billion offer Groupon turned down.

Now, no surprise, everyone is second-guessing that decision, putting a lot of pressure on both Groupon and, especially, Mason.

Who–despite all the hype and attention he has received–still has that prenaturally calm Midwestern affect.

“It is more important that we are the ones bringing relevant deals to consumers from our merchants,” he said. “That is all that matters.”

Overstock Says No Shortage of Inventory in the World That's Ripe for Discounting

Tricia Duryee — Tue, 15 Mar 2011 20:25:49 +0000

In so many ways, Overstock may be considered the original flash sales site.

Founded in 1999, the Salt Lake City company offers a wide variety of merchandise, ranging from bedding and home decor to appliances and sporting goods–at discounted prices.

But with a little bit of marketing polish, the practice has become a new, chic burgeoning industry.

A discount center conjures up imagines of large warehouses with cement floors full of unsold items. A flash sales deal, however, leads you believe you’ve found a pair of designer jeans for half off after sifting through dozens of boutiques on Rodeo Drive.

With that in mind, a micro industry of flash sales sites has been born.

The Gilt Groupe, HauteLook, One Kings Lane, Rue La La and Jackthreads all have their own niche, focusing on curating clothing for women or men, or furniture and home decor.

One big question is, is there enough inventory to sustain it all?

“It’s the dirty little secret in manufacturing,” said Overstock’s CEO Patrick Byrne. “The answer is that there is far more than you can possibly think. A company will say they don’t have overstock, but if you talk to the CFO, they will ask, ‘what can you truck away?’ The world is filled with excess inventory and is looking for channels to get rid of it.”

But just because the inventory is there, Byrne doesn’t believe they can all survive.

“We think the world only needs one pipeline, and we’ve built the one pipeline to do that,” he said. “The suppliers are better off with one big pipeline. If one pipeline emerges, where all the liquidation gets done, there will be price integrity in the rest of their marketplace. It’s our aspiration to be that one thick pipeline.”

On average, he said Overstock’s inventory is about 60 percent off the manufacturer’s recommended price. He said, general retail stores sell items for an average of 15 percent off and Walmart is even more heavily discounted at 30 to 40 percent off. Sites like Amazon.com, are normally somewhere in between, and flash sales generally claim discounts of 50 to 70 percent.

About a year ago, Overstock jumped on the bandwagon to launch Eziba.com, which focuses on selling a small number of items, ranging from furniture to jewelry, at heavily discounted prices via a daily email.

Eziba has the boutique look, with large photos of the products and colors bleeding off the page. That’s in sharp contrast to Overstock’s more straight-forward layout that stresses searching and browsing for items that are displayed in small thumbnail pictures.

Byrne said one of the big differences between items sold on Eziba and those sold on Overstock is the amount of inventory in stock.

Items on Eziba may have up to 5,000 on the virtual shelves, whereas products sold on Overstock have only a couple of hundred left. Another difference is that there’s only a dozen or so items for sale on Eziba at any given time, while Overstock’s inventory spans 300,000 items (not including books and movies).

One of the big differences between Eziba and the competition is that it’s able to leverage Overstock’s infrastructure.

For instance, Eziba customers get the same customer service as Overstock and have the same flat-rate shipping of $2.99 an order.

So far, Byrne says the introduction of other sites has not affected the company’s business.

“It’s like swimming around in Lake Michigan and asking did you bump into each other. The world is so much bigger than anyone gets. It’s so enormous,” he said.

Overstock has been steadily growing over the years.

In 1999, the company recorded revenues of $1.8 million, and last year, revenues totaled $1.1 billion. Still, it’s a microcosm of the super-large e-commerce world. The company’s stock is trading at $14.31 a share for a market cap of $333.4 million. In contrast, Amazon’s is valued at around $75 billion, and eBay is worth $40 billion.

Generally, Byrne categorizes the company as a nice profitable company that has built a very solid foundation over the past few years.

He said the recent stability, compared to the start-up years, gives him the chance to experiment with new lines of business. ”We are very agile. We can develop new things really quickly and snap them into the platform we’ve built.”

In addition to Eziba, the company also runs Worldstock, a site that helps artisans from around the world sell their crafts online. Byrne made the recent decision to give all of its profits to a charity that’s focused on helping build classrooms in developing countries around the world.

It’s also recently launched Main Street Revolution, which helps small business around the U.S. sell their goods online, ranging from children’s clothing to specialty home-made cookies.

The company’s latest endeavor includes experimenting with a significant rebranding of the Web site.

In January, it introduced the domain name O.CO, which is a shortcut to its regular Web site. During an initial introductory period, customers who shop at O.CO will receive free shipping.

Byrne said the reason behind the name is to have a more recognizable brand across the 90 countries it operates in. While the domain name will change permanently internationally, the company is only experimenting with the name domestically.

Inside Twitter's Sales Machine: A Secret Guide for Advertisers (Video)

Peter Kafka — Wed, 16 Feb 2011 16:45:01 +0000

Twitter hopes to generate something like $100 million from advertising this year, but first it has to teach people how to buy its ads. Here’s how it’s doing that: A hand-holding how-to video, which walks through everything from pricing to dealing with angry users.

The tutorial, which runs 40 minutes, is up on YouTube, but it’s unlisted and is only accessible via a private link. Thanks to a helpful reader, I’ve been able to watch it myself, and I’ve uploaded it at the bottom of this post so you can see it, too.

But it is 40 minutes long–and most of you don’t need to watch all of it. Here’s what you need to know if you’re interested in advertising, technology and Twitter’s first attempts at making real money:

Promoted Tweets, Twitter’s first big ad product, hasn’t taken off.
Instead, at least for now, Twitter is pushing customers to spend most of their money on Promoted Accounts, its pay-per-follower product it rolled out at the end of last year. Twitter tells advertisers they ought to spend $4 on Promoted Accounts for every $1 they spend on Promoted Tweets–the original Google-style ad concept CEO Dick Costolo introduced last year. Twitter says that’s because it’s a lot easier to buy the former than the latter, because there’s a lot more inventory available. (And because Promoted Accounts will “turbocharge” Promoted Tweets.)

Promoted Tweets should get a big push in the next month or so.
Until now, the only way you’re going to see a Promoted Tweet is if you click on a search term that someone has purchased, or if you’re using Twitter app HootSuite. But Twitter says the ads will start running in users’ regular “timelines”–the primary Twitterstream they see–on its own Twitter.com site, by the end of Q1. That’s going to make them much more visible, and should hopefully help with the inventory problem noted above.

Twitter is telling customers to expect an “engagement rate” of 1 percent to 3 percent.
Ad buyers are usually trying to measure success by figuring out how many people looked at or clicked on an ad. Click-through rates for most Web ads are very tiny, and according to an ad buyer who has seen Twitter’s presentation, the company says a realistic click-through rate is 0.3 percent. But “engagement” rates–which measure when a user retweets an ad, or likes it, etc.–are supposed to be much higher. My tipster, by the way, says Twitter is requiring new ad buyers to make a purchase of at least $5,000 worth of inventory in order to participate in the company’s beta tests.

Twitter is warning buyers that some users will have a problem with their ads.
At the end of the presentation (around the 35-minute mark), the company takes time out to coach buyers about “dealing with negative user feedback,” which it more or less assumes they’ll be getting. “People are averse to change, especially when it comes to advertising, and this type of feedback is to be expected,” Twitter’s off-screen instructor explains. The company’s suggested coping strategy: Don’t worry! The complainers are an “extremely marginal percentage of the total.”

[UPDATE: So how do the ads actually work? A Twitter ads tester would like to share their experiences with the rest of the world, but can't.]

[ See post to watch video ]

Exclusive: Seeking Better Search Results, eBay Finds Experts at Bing and Facebook

Tricia Duryee — Mon, 31 Jan 2011 21:00:54 +0000

EBay has hired two search experts away from Facebook and Microsoft Bing as it prepares to roll out new features on its site, we have learned.

The company has confirmed the appointments of Scott Prevost to the position of VP of product management on search and Dennis DeCoste to the position of director of research, where he will manage such technical topics as data mining and machine learning.

Prevost will start immediately. DeCoste is a couple of weeks into his new job.

The two hires will focus on delivering changes to the e-commerce site’s homegrown search engine, by better matching items in its inventory based on a consumer’s search terms or interests.

The company is now working on the next-generation of search, according to the company’s research labs, which lists both “search” and “machine learning” as two of its top priorities. Recently, eBay rolled out the ability to sort by “Best Match,” and will soon be launching other versions on eBay.com. “Through great strides we’ve made in applying machine learning to our search engine, search results will continue to become more relevant with each use,” says a labs post.

Previously, Prevost was the principal development manager at Bing, where he led a team of developers who were responsible for a bringing a variety of Bing features to market, including complex stuff like adding “captions and summaries to search results, reference answers and query processing using natural language techniques,” according to Prevost’s LinkedIn profile. Before that, he served as the general manger and director of product for Powerset, which Microsoft acquired in 2008.

Before joining eBay, DeCoste was a research scientist at Facebook, where he worked to improve a number of products, including ad matching, search ranking, link recommendation and spam detection. Prior to that, he was a principal scientist at Microsoft and a director of research at Yahoo Research, according to his profile on LinkedIn.

We also reported exclusively today that eBay’s PayPal subsidiary has hired Sarah Brody, formerly at Apple, to lead Global Design.

Microsoft Takes Another Stab at Selling Its Own Ads–By Getting Someone Else to Do It

Peter Kafka — Mon, 31 Jan 2011 11:00:53 +0000

It’s about time! Or, more accurately, “real time”: It’s taken Microsoft several years to get its head around the idea, but the company is finally going to start selling its ad space via a “real-time bidding” exchange, just as Google does.

The difference: Instead of running the exchange itself, as Google does, Redmond is going to outsource the work.

In February, ad tech start-up AppNexus will begin selling Microsoft’s “non-premium” display ads via its own exchange. And Microsoft will essentially pull the plug on AdECN, the exchange it bought in 2007 but only began testing a year ago.

If you’re not remotely interested in advertising technology, here’s the takeaway: Lots of smart people predict that display advertising will be moving to “real time bidding,” which allows buyers and sellers to set the price of a single ad impression in milliseconds.

That efficiency makes plenty of sense from a buyer’s perspective, but it will inevitably chip away at publishers’ pricing power–which is one reason big sellers like Microsoft haven’t embraced it yet.

Microsoft sort of announced the move last October, when it participated in a $50 million investment in AppNexus. Microsoft and AppNexus have been deliberately playing down the move, for reasons I can’t quite fathom–it’s not as if players like Google haven’t picked up on it.

(And that Microsoft-AppNexus connection may or may not have had something to do with a falling-out between AppNexus and Google last year.)

In any case, it’s now formalized: Microsoft will throw all of its unsold inventory into an exchange that AppNexus will power, starting with ad space on Windows Live Hotmail. Then it will add in all of the inventory on MSN properties, and eventually ads from third-party publishers that Microsoft is working with, like Viacom.

Which doesn’t mean Google will be quaking in its boots.

At the start, AppNexus figures it will be moving more than 10 billion ad impressions a month through the exchange, which sounds like a lot. And it is! But Google’s AdX is many times larger–it’s a safe bet that it’s doing more than one billion impressions a day, and likely much more.

Still, Google’s giant lead isn’t necessarily insurmountable. For starters, the universe of display advertising is much more fragmented than search. So no matter how much inventory AdX picks up, there’s always going to be lots of ad space that Google doesn’t get its hands on.

And because Google’s so big, there’s a very deliberate effort by lots of buyers and sellers to make sure they have other options. So underdog Microsoft–I can’t get over how odd it is to type that–will get at least a look-see for quite some time.

Memory Chips Are About to Get Cheaper

Arik Hesseldahl — Thu, 13 Jan 2011 16:28:00 +0000

Market research firm iSuppli says it expects a “huge drop” in the selling price of computer memory chips this year. After a run-up of more than 77 percent in price for DRAM chips during 2010, it expects a drop of nearly 12 percent this year.

DRAM is the ultimate commodity chip market, and its boom-or-bust cycles are legendary. When demand picks up, manufacturers like Samsung, Hynix and Micron always rush to add manufacturing capacity–prices pick up; chips become scarce.

Everything seemed to be going well for the chip companies until the third quarter of 2010. After five straight quarters where the average price for a DRAM chip increased, it suddenly turned south as demand for notebook PCs slacked. That’s in line with what Gartner and IDC reported yesterday about the PC market.

There’s good news for consumers, however. All that stacked-up inventory has to go somewhere. If you’re planning to buy a notebook this year, the base models will now start shipping with four gigabytes of memory instead of two. And for those who bought a machine with only two in the last year or so, upgrades will be more affordable.

The one bright spot for the memory companies? You got it: Smartphones and tablets. Memory content in phones is expected to increase by nearly two-thirds. And the 57 million tablets that iSuppli expects will ship this year will also need some DRAM. More details here from iSuppli.

Yet More Money for Ad Tech: Turn Raises $20 Million

Peter Kafka — Wed, 05 Jan 2011 17:25:05 +0000

A lot of smart people think there’s already too much money jammed into advertising technology start-ups, but more keeps coming, anyway. The latest infusion is a $20 million funding round for Turn Inc., a “demand-side platform” that’s supposed to help advertisers buy lots of display advertising inventory. Turn has raised $57 million to date, which means any exit is going to have to be very big to make investors happy. Reminder: Google bought DSP Invite Media for $81 million last year. And Microsoft, another potential acquirer, has thrown its weight behind rival DSP AppNexus.

EBay Acquires Berlin-Based brands4friends for $200 Million

Tricia Duryee — Mon, 20 Dec 2010 17:05:09 +0000

It’s been a busy shopping season for eBay, which has made its third acquisition in as many weeks.

Today, eBay said it has acquired brands4friends, a German online retailer for $200 million in cash. Earlier this month, eBay announced the acquisitions of Milo, which keeps a database of local retailers’ inventory, and Critical Path, a mobile application development shop.

EBay expects brands4friends to strengthen its position as a leading online fashion destination in Europe. Brands4friends claims to be “Germany’s largest online shopping club,” which offers top brands at reduced prices to members through limited daily offers.

Online shopping clubs account for 20 percent of online fashion sales in Europe, according to eBay’s own research.

The 3-year-old company has about 3.5 million members and 200 employees.

As part of the deal, eBay will also assume brands4friends’ equity interests in U.K. shopping club secretsales.com and in Japan’s brands4friends.jp. The acqusition is expected to close in the first quarter, pending regulatory approval.

Google, Myspace Finally Land New Ad Deal

Peter Kafka — Thu, 16 Dec 2010 15:58:34 +0000

Google and Myspace have finally struck a new ad deal, replacing the three-year, $900 million pact that expired this fall.

The two companies aren’t handing out details on the new pact, but have made it clear that it’s not going to be anything like the old one, which provided Myspace and the rest of News Corp.’s Web properties with massive guaranteed payments.

But we’ve known that for a long time: The first deal got done when Myspace was white-hot, and Google was competing fiercely with Microsoft to lock up prime real estate.

Now, of course, Myspace is well into a protracted decline, despite News Corp.’s efforts to turn it around (News Corp. also owns this Web site). And Microsoft isn’t nearly as aggressive as it used to be on these kinds of deals.

The real question for Myspace is what happens now. News Corp. has been quite clear that it’s not happy with the site’s performance, and if anyone were willing to pay anything for it, I’m sure Rupert Murdoch would be happy to part with it.

But who wants to buy a shrinking, money-losing Web site? News Corp. may not be able to do that much about the audience decline, and the money-losing part is tougher to fix than it seems from the outside.

That’s because Myspace is still stuck amortizing fees it picked up in the go-go years, like the big settlement/licensing deal it struck with Universal Music Group, which allowed it to start up MySpace Music in 2008.

Those aren’t operating costs, but they’re still real, and they don’t go away. “You start off every year $70 million in the hole,” says a person familiar with the company.

So how else can you cut costs? There are some obvious ways to go, and they won’t be pleasant for Myspace’s remaining staff.

UPDATE: Nature of news on the Web–this story was a scoop for all of about three minutes. Here’s the release–note the news about the Myspace inventory being offered via Google’s DoubleClick Ad Exchange.

MYSPACE AND GOOGLE RENEW AND EXPAND SEARCH
AND ADVERTISING AGREEMENT

LOS ANGELES and MOUNTAIN VIEW, Calif., December 16, 2010 – Myspace and Google, Inc. today announced a multi-year agreement to renew and expand their long-standing search and advertising relationship. Under the terms of the new agreement, Google will continue to power Myspace search and search advertising and will also provide additional display advertising services to enhance the rich
entertainment content experience inherent on Myspace.

This agreement brings together Google’s expertise in search and advertising with Myspace’s strength in social entertainment. Specifically, the agreement provides Myspace with:

Web search and search advertising
Full display ad solutions (including participating in the Google Display Network and DoubleClick Ad Exchange)

“We’re thrilled about renewing our partnership with Google. Their best-in class technology will continue to provide our consumers with a robust search experience,” said Nada Stirratt, Chief Revenue Officer of Myspace. “We look forward to participating in the Google Display Network and DoubleClick Ad Exchange to increase yield across our display ad inventory.”

“We’re excited to deepen our partnership with one of the largest social Web properties in the world, Myspace,” said Henrique de Castro, Vice President of Global Media and Platforms at Google. “We’re pleased that our technology will benefit Myspace’s users on its newly redesigned site, and that Myspace has chosen our display advertising solution to increase its returns.

Q&A: VC Alex Ferrara Dishes on the Business of Shopping and Selling Online

Tricia Duryee — Tue, 14 Dec 2010 14:00:44 +0000

With big-ticket e-commerce acquisitions, like Amazon’s $500 million purchase of Diapers.com and Soap.com, and now the failed attempt by Google to purchase Groupon, we decided to chat with Alex Ferrara, a partner at Bessemer Venture Partners, to get a sense of the current state of the market.

Bessemer has an impressive list of e-commerce bets: It was an investor in Quidsi, the parent company of Diapers.com and Soap.com, as well as in Yelp. And personally Ferrara is involved in other deals, such as Yodle, which helps local businesses market online, and OMGPOP, a social gaming company. Yesterday, it announced an investment in Shopify, which provides tools to help businesses sell products online quickly.

eMoney: So, you’re background is actually in computer programming? Does that help you evaluate deals?

Ferrara: I was a software engineer for many years, using Java and Microsoft languages, and I had the pleasure of authoring an O’Reilly book on Web services [O’Reilly & Associates’ "Programming .NET Web Services"]. I don’t know if it helps me, but it causes me to gravitate toward good technology and product teams.

Your most recent investment is Shopify?

Yes, we just closed last week. I just loved the team and was impressed by the product and the tech DNA that these guys had. It provides a commerce platform that can quickly serve small as well as larger businesses. They have about 10,000 to 11,000 customers as of today–and they’ve watched a lot of small businesses grow into larger enterprises.

My view of this whole small- and medium-sized business space is that they have a lot of the same pain points as large enterprises….Shopify delivers 80 percent of the functionality of larger, more expensive and cumbersome e-commerce software packages at a fraction of the cost. It offers a range of very sophisticated features around inventory management, marketing capabilities, as well as shipping and fulfillment–all of the capabilities you would get in an expensive package. They are democratizing the whole expensive enterprise software functionality.

E-commerce is a mature business that’s been around for a long time. Is there more innovation that’s happening in the space?

I think the market that Shopify is going after is less about taking share from existing players, and more about the next generation of businesses that are getting started today. A lot of those are mainstream local retailers.

Let’s say a trillion-plus has been spent in local retail, and it’s starting to move online, so that’s a big business. It won’t fully move online, but the local retailers need something besides their Main Street shop. Plus, the retailers want to tie in their physical locations, and use phones to manage their store, and take advantage of [Shopify's] technology to manage their business, whether its physical or online.

An Apple store was the first retail experience I had where I could swipe my credit card anywhere in the store–there was no waiting in line at the register.

Why can’t all retail experiences be like that? Shopify is going to do that, by moving everything to the cloud, whether you are going to a physical store, to the Web or on a mobile device. It should be one and the same.

What do you think of the local e-commerce market, especially given Google’s reported $6 billion offer for Groupon?

From what I’ve seen from afar, Groupon seems like a big business. If the rumors are true, it’s interesting to see Google having an interest. I look at them mostly as a self-serve ad company, which is mostly about technology and automation. Groupon has built a big local salesforce–it’s the inverse of Google’s approach.

I think it says a lot about how Google must be thinking about growth opportunities. To get to the local market, you do need the local salesforce. Self-serve works for a portion, but at the end of the day you need a sales channel.

So, you do think Google needs a local salesforce?

I’m guessing, but it strikes me as something that could be very compelling when [Groupon is] combined with [Google's] machinery. You could leverage each other’s data to do better at targeting for serving ads.

What about all the Groupon copycats?

Time will tell. It’s one of the questions I’ve thought about a fair amount. I don’t know. We have not invested, and clearly there’s a lot of smart people who think there are alternatives and a big enough opportunity to support competitors. I wouldn’t be surprised if it’s big enough. There’s a number of players doing quite well. It’s a good time to be No. 2 to 4.

The big question is, how valuable will it be for the end-business over time. There’s not a lot of historical information on that.

What’s the role of mobile in e-commerce going forward?

For a lot of the local businesses, [mobile] fits so perfectly, and it’s got to be a huge part of any local product offering. A lot of the local merchants are mobile, as well. They don’t have large staffs to rely on and are wearing lots of hats. They want to provide service to their customers on the go–the iPhone and Android really enable that. That’s why Shopify made an iPhone version that helps the merchants to do that.

On the consumer side, they’ve also seen an increase in willingness to make purchases on mobile. It’s expected to grow exponentially, and we have some pretty good data on Shopify. Purchases on mobile are starting to grow quickly.

What about virtual goods? You are an investor in OMGPOP, a social gaming company.

They monetize and generate a good portion of revenues from virtual goods….One of our former investments is Playdom and they did a fantastic job. [Yes, they did. In July, the Walt Disney Company acquired Playdom for $763 million.]

We are bullish on digital media and gaming. We are seeing more and more game mechanics being applied to other business models. For instance, companies in financial services or online education are having their products include game mechanics to drive behavior and make the product experience more intuitive.

Still opportunities for start-ups, with giants like Amazon around? What would be your advice?

There’s a tremendous opportunity internationally. I think it would be challenging to go head to head with Amazon in certain categories. You can’t differentiate on price, and you can’t differentiate on customer service because they are impressive. This isn’t my area of expertise, but as a firm, we see that there’s a space for international e-commerce companies. They understand the local market and the nuances of the local market, and can be in an area that has been overlooked. If they can get scale, they have a chance.

Or niche opportunities, like Diapers?:

That’s a team that did a fantastic job. They provided a great level of customer service. Whenever I told people we were investors, strangers or friends would say, “I love it.”

Google Expected to Outgrow Apple in Mobile Display Ad Market in 2011

John Paczkowski — Tue, 07 Dec 2010 00:48:32 +0000

The mobile advertising market is ballooning, as is Google’s share of it. Of the $877 million spent on mobile advertising in the United States this year, 59 percent of it went to the search sovereign, according to an updated assessment by IDC. Meanwhile, Apple claimed just 8.4 percent share, Yahoo 5.6 percent, down from 7 percent last year, and Microsoft 4.3 percent, down from 6.3 percent.

Clearly, Google rules the mobile ad market in the States in much the same way it dominates search. That said, it’s important to note that the mobile ad market as defined by IDC includes both search and display ads and that the advertising business of some of the companies figuring in IDC’s report doesn’t extend to mobile search.

Apple, for example.

In the mobile display market, Apple claims an 18.8 percent share, which basically puts it neck and neck with Google with its 19 percent share. A short distance behind, Millennial Media has 15.4 percent. And behind Millennial, Yahoo has 10.1 percent.

And in front of them all: “Other,” with 20.5 percent (click image to enlarge).

So the leaders of mobile display advertising have yet to be decided, though Apple and Google have staked the largest claims to date. But while the the two companies are essentially tied right now, IDC’s Karsten Weide tells me Android’s growing presence in the mobile space means it will likely overtake Apple in display as well.

“Even if display was decisive for the war, I expect Google to outgrow Apple there in the coming year, primarily because Android devices will outsell Apple’s iOS devices,” Weide said. “More devices means more mobile Internet traffic, means more ad inventory that can be sold to advertisers, means more revenue. That said, search will remain more important than display in mobile and may well increase its market share even more. A lot of the mobile traffic is about finding things while being on the road: shops, restaurants, hotels…and that means search traffic, be it in traditional search queries or map searches. Google stands to benefit from this.”

Google Cuts Off AppNexus, and the Ad Tech World Shudders

Peter Kafka — Wed, 01 Dec 2010 00:57:00 +0000

AppNexus, a high-flying ad technology start-up, just had a bad few days. The next few weeks could be rough, too.

That’s because over the weekend, Google suspended the company’s access to the ad giant’s “real time” ad exchange. The move isn’t permanent, but it’s still likely to cut directly into AppNexus’s business, and it’s a very big deal for the ad tech industry.

“It’s a bombshell,” says a competitor.

AppNexus offers customers several different services, but its most important one is acting as a demand-side platform (or DSP) for clients who want to buy display advertising inventory. The bulk of that comes from Google’s DoubleClick Ad Exchange, and for now, that’s gone.

What happened? Google won’t address the incident directly, but a statement the company released today implies that it has problems with at least one AppNexus client and an ad they’ve placed:

To protect users and publishers, the Ad Exchange has extensive, widely-published policies for a range of issues including ad quality, ad content and malware. We have technologies to detect violations, and when a customer is in breach of our policies, we take action, including potential suspension from the Ad Exchange. AppNexus is a great partner, and we’re working with them through this issue to get them back on the Ad Exchange.

Via email, AppNexus President Michael Rubenstein, who left Google to join the start-up a year ago, stresses that the cutoff is “temporary,” and adds:

We’re modifying our process of working with Google to create a new arrangement whereby AppNexus clients wishing to access Google inventory will have their own individual seats on DoubleClick Ad Exchange, but will continue to serve impressions through AppNexus.

In practical terms, that means AppNexus’s ad buyers will need to set up a contract directly with Google before it lets them access its inventory again. (You can read an email Rubenstein sent to his clients on Monday, explaining the new terms, at the bottom of this post.)

That could take weeks for each ad buyer. Or they could simply take their business elsewhere and skip the process. Google itself has its own DSP, via its purchase of Invite Media earlier this year.

“I would expect a lot of these clients can’t really wait several weeks,” says Tony Katsur, general manager at MediaMath, an AppNexus competitor.

Ad industry executives tell me Google has cut off other DSPs from its ad exchange in the past. But AppNexus is a particularly high-profile player. In October, it raised $50 million in funding that included money from Microsoft, which has yet to fully embrace the “real time” display ad market itself.

Some industry insiders I’ve talked to are muttering darkly about Google sending some sort of message to Microsoft, or trying to steer business to Invite, or some other conspiratorial motives.

But none of that makes much sense to me. Google is under intense scrutiny that’s only going to get more severe. And crippling a partner–even temporarily–is the kind of thing that’s going to raise plenty of eyebrows.

Hard to imagine Google making this move lightly, and without a very good reason.
—–
Here’s the text of the email that Rubenstein sent to AppNexus clients yesterday:

From: Michael Rubenstein
Date: Mon, Nov 29, 2010 at 4:41 PM
Subject: RE: Access to Google AdX Inventory
To: Michael Rubenstein

Important Update:

Further to the notification below regarding the disruption of access to DoubleClick Ad Exchange supply, AppNexus has been in continuous contact with Google to resolve this issue. At present, Google’s position is to require all AppNexus buyers accessing Ad Exchange inventory to have a direct contract with Google in order to restore access. To be clear, this will not impact your ability to use AppNexus as your RTB platform for buying Google inventory, but simply means that you will in the future remit payment for media purchased on DoubleClick Ad Exchange to Google directly, rather than to AppNexus.

Your account manager will contact you tomorrow with details on how to proceed with restoring access to DoubleClick Ad Exchange.

We thank you for your continued patience and support as we work through this.

Regards,

Michael Rubenstein

—— Forwarded Message
From: Steven Giacomelli
Date: Sat, 27 Nov 2010 18:35:20 -0800
Subject: Access to Google AdX Inventory

Dear Client,

Beginning at 7:00 PM ET / 12:00 AM UTC, our monitoring alerted us to the fact that our real time bid requests from Google’s AdX had dropped to zero. We are investigating on our side and are also working with our contacts at Google. Currently we have no ETA for a resolution. We will update you as more details become available.

Thank you for your patience,

Steve

[Image credit: Nesher Guy]

The Shipping News: Plenty of iPhones for the Holidays

John Paczkowski — Tue, 09 Nov 2010 18:40:48 +0000

It’s taken the better part of four months, but iPhone 4 supply has finally caught up with demand. Ship times for the device fell to 24 hours yesterday for the first time since its June launch, which bodes well for Apple as it it heads into the holiday season.

“We believe the iPhone should see continued solid growth into the December quarter with support from improved inventory in the US,” Barclay’s analyst Ben Reitzes said in a note to clients today. “Apple has now expanded distribution to Target (Target also sells the iPad) to join others including Apple stores, AT&T, Best Buy, Radio Shack and Wal-Mart. Perhaps more importantly, we believe availability is improving overseas, with the iPhone 4 set to ship for its first full quarter in China. International demand seems strong into calendar year-end.”

For the quarter ending in December, Reitzes figures Apple will sell 14.8 million iPhones, with sales ramping up after that, assuming the company moves to a multicarrier model in the states. Says Reitzes, “As we move into C1Q we continue to believe it is quite likely that we will see the iPhone introduced on Verizon in the US which should continue sales momentum. By CY-end 2011, we believe Apple will have more than 2 carriers in the US, which could help its market share vs. Android significantly.”

Sharp, LG Warn of TV Glut

Daisuke Wakabayashi and Jung-Ah Lee — Thu, 28 Oct 2010 18:33:55 +0000

Sharp Corp. and LG Electronics Inc. warned that a glut of inventory for flat-panel display televisions will continue to pressure prices during the critical year-end holiday shopping period.

The inventory build-up of liquid crystal display televisions is the result of a surge in production by global TV makers this year following a period of reduced output in the aftermath of the financial crisis, when consumer spending plunged. The flood of new models has heaped additional pressure on TV prices, which routinely experience 20 to 30 percent price declines annually.

The build-up has filtered down the supply chain. The market for large-sized LCD panels, which was experiencing shortages several months ago, has now swung in the opposite direction, forcing panel makers to scale back output and slash prices to clear out inventory.

Read the rest of this post on the original site

Chips: The Street’s Worries Intensify; Downgrades Piling Up

Eric Savitz — Tue, 07 Sep 2010 17:46:37 +0000

The Street’s fretting over weakening demand in the chip sector is intensifying.

In short, signs of weak PC demand, combined with fears of a slowing recovery in IT spending, indications of inventory expansion in the supply chain and general worries over the lackluster economic recovery have spurred multiple analysts to rethink their positions on the sector generally and on a variety of individual issues. Today alone, there were downgrades and estimate cuts from a number of firms.

Here’s a rundown.

Read the rest of this post on the original site »

Bain Leaves News Corp.'s FAN, Which Will Be Integrated Into MySpace: The Internal Memos

Kara Swisher — Mon, 23 Aug 2010 23:29:32 +0000

Adam Bain (pictured here), the well-regarded exec who ran the Fox Audience Network, called FAN, is going to Twitter to head up its early but increasingly aggressive advertising revenue efforts.

Here is the internal memo from News Corp. digital head Jon Miller about the changes at the ad network, in which it is clear the company is scrambling to shift strategy.

News Corp. (NWS) had been working on a plan for more than a year to spin off FAN and sell a piece of it to private equity investors, in part to hold onto Bain.

Now, it will go spinning back to MySpace, its principal source of ad inventory.

In his memo to employees below, Miller talked about the spin-off discussions, which failed principally due to issues over internal revenue share with MySpace.

Thus, back to the troubled social networking site, which is–after much exec turmoil–being run by Mike Jones. Jones has been trying to reinvigorate MySpace with a new look and a strategy focused on music and entertainment content.

Said Miller: “By aligning the FAN platform directly with MySpace, we will be able to utilize its services to further drive MySpace’s revenue efforts and to play a key part of the site’s planned re-launch later this year.”

News of Bain’s departure as FAN president–after a dozen years at News Corp.–to become a top exec at Twitter was first reported by TechCrunch earlier today, but without details of what would happen to FAN.

Bain also addresses his departure in the memo below.

First, here is the Miller memo:

Dear FAN employees:

I wanted to address the media reports this morning regarding Adam’s departure and also share some details on our plans for FAN moving forward. First off, Adam Bain will indeed be departing FAN–a company he has led from the ground up and built into one of the Web’s top five advertising platforms in just over two years. He has been an invaluable asset to this company and we wish him well in the future.

In addition, today we are announcing a plan to move forward with an integration of FAN’s team and technology directly with MySpace. As many of you know, we have had discussions with a number of interested parties in recent months with respect to potential partnerships involving FAN. After deliberating over these external options, we ultimately decided that the best path for FAN–and for News Corp.–is to put this leading-edge technology to work to benefit our existing assets. By aligning the FAN platform directly with MySpace, we will be able to utilize its services to further drive MySpace’s revenue efforts and to play a key part of the site’s planned re-launch later this year.

Bruce Wiseman will work closely with Mike Jones and Jack Kennedy on the overall MySpace integration efforts, and you will be hearing more from your managers shortly on details regarding the integration and how it will affect you. In addition, we will be sharing information broadly with you as much as possible over the next several weeks.

Lastly, I want to thank all of you for your commitment and dedication to FAN over the past two years–this is an incredibly talented team that’s accomplished a great deal in a very short amount of time. Also, please join me in once again thanking Adam for all his work–he will be missed both personally and professionally–and we look forward to crossing paths with him in the future.

Regards,
Jon Miller

And here is the Bain memo to his employees:

Guys–

I wanted to let you know that after 12 years at Newscorp, I’m moving on to pursue a once-in-a-lifetime opportunity in San Francisco.

As you can imagine, this is a pretty emotional decision and one that didn’t come easily. I’ve literally grown up inside this company and will always be grateful for the amazing opportunities that were afforded to me–the greatest among them: the opportunity to work with and lead this team.

The things we’ve done in the ad business–Self-Serve, Targeting, Segmentation and our work with big data–are too numerous to detail here, but they are industry-defining and have set Newscorp up to succeed for many years to come.

My deep thanks to Jon Miller–I’m humbled by the freedom and support given to me here at FAN. And lastly, I want to thank you, my team. I will miss the heck out of you, but I’m psyched to watch you continue to succeed, albeit from afar.

Bruce will be leading the company thru this transitional period.

Thanks again for all of your support and the privilege of leading this extraordinary group over the last two years.

–ab

Finally, here is the News Corp. official press release on the whole, well, messy thing:

MYSPACE AND FOX AUDIENCE NETWORK ANNOUNCE ORGANIZATIONAL INTEGRATION PLAN

MySpace to Leverage FAN’s Team and Leading Advertising Platform FAN President Adam Bain to Depart

Los Angeles, Calif.–August 23, 2010–News Corporation’s MySpace (http://www.MySpace.com) and Fox Audience Network (FAN) today announced a plan to integrate the FAN business directly with MySpace. The move will enable MySpace to leverage FAN’s team and its leading technology platform. In addition, FAN announced that its President, Adam Bain, will leave the company to pursue other opportunities.

“FAN and MySpace have worked together closely over the past several years and this integration will further align these two properties,” said Jon Miller, Chairman and CEO of Digital Media for News Corporation. “Adam has been an invaluable asset to News Corp, having led FAN’s growth from the ground up into one of the Web’s largest ad platforms, and we wish him well in the future.”

“By fully integrating FAN’s platform and team, we are in a great position to further leverage FAN’s technology, which allows advertisers to serve the right ad to the right person and apply that to content across MySpace to provide a more relevant experience for our users,” said Mike Jones, President of MySpace. “The FAN team is incredibly talented and we’re excited to welcome them to the MySpace family.”

Fox Audience Network was created in 2007 and currently reaches more than 150 million Internet users. The company leverages proprietary advertising technology to create highly-targeted advertising campaigns for a wide range of marketers, while also delivering cutting-edge tools and services to third-party publisher partners, advertising agencies and research companies.

iPhone 4: Stock-Outs at Apple Stores, New Orders Now Shipping in Three Weeks

John Paczkowski — Mon, 28 Jun 2010 12:00:55 +0000

Apple is selling the iPhone 4 as fast as it can make it–actually faster. With demand for the device off the charts after first-weekend sales, the company’s online storefront is now showing a ship time of three weeks for new orders. And Deutsche Bank analyst Chris Whitmore says that his survey of brick-and-mortar stores shows frequent stock-outs. “Demand is outstripping supply in multiple regions despite frequent replenishment,” he wrote in a research note issued this morning.

According to Whitmore’s survey of 100 iPhone 4 retail outlets (Apple, AT&T, Best Buy, O2, Orange and Car-Phone stores in the U.S. and U.K.), 60 percent of Apple Stores were sold out by Thursday evening, as were 100 percent of retail-partner stores. Supplies were replenished overnight, but by end-of-day Friday, quite a few stores were reporting stock-outs. And that number only grew on Saturday.

“Our checks carried out on Saturday revealed that Apple retail stores which were stocked-out on Thursday/Friday were unable to replenish stocks with ~95 percent of stores contacted experiencing stock-out situations. Further, most Apple representatives were not certain about the iPhone 4 stock replenishments and comments such as ‘We’re out of stock’, ‘Don’t know when we will have them in store’, ‘We sold out just minutes ago’, ‘No, we don’t know when we will be getting the phone’ and ‘Your best bet is the online store’ were cited frequently,” Whitmore reported.

“In addition,” according to the analyst, “retail stores which had iPhones in-stock cited long lines (2 to 3 hours) outside the stores. Comments such as ‘We have very limited numbers, we should be sold out in a couple of hours’ and ‘Please give us a call just before you leave home to make sure the iPhones are in stock’ suggested waning inventory levels.”

Whitmore figures Apple (AAPL) sold more than one million iPhone 4s over the weekend, but notes that shipments could have been dramatically higher if there was more supply.

“While the strong start is encouraging, we believe the long-term opportunity for growth of the iPhone is even more significant as near-term shipments are being gated by supply constraints,” Whitmore wrote. “We estimate Apple to sell 44 million iPhones in CY10 (8.5 million in the June quarter) and 55 million in CY11.” (See chart below; click to enlarge.)

Attention, Wal-Mart Shoppers: iPhone 3GS Clearance Sale in Aisle Nine

John Paczkowski — Tue, 25 May 2010 11:58:58 +0000

With two weeks to go before Apple’s annual Worldwide Developers Conference and the presumed debut of the company’s next-generation iPhone, Wal-Mart is dropping the price of the entry-level iPhone 3GS by more than half.

This morning, the retailer cut the price of iPhone 3GS devices with 16 gigabytes of memory from $197 to $97 with a two-year service contract. Wal-Mart claims the reduction is simply part of its “ongoing aggressive savings announcements.” But coming as it does amid speculation about the launch of a new iPhone (and rumors of the discontinuation of the 8GB iPhone 3G), it is being interpreted as a move to clear out inventory before that device arrives at market.

Meanwhile, Apple (AAPL) and AT&T (T) continue to sell the 16GB iPhone 3GS at its original price, though I can’t imagine that this will continue much longer. When Apple introduced the iPhone 3GS in June 2009, AT&T slashed the price of the entry-level 8GB iPhone 3G to $99.

The company is expected to do the same thing this year with the low-end 3GS. And, as it did last year, that price cut will likely spur adoption of the device among the lower tiers of AT&T’s customer base. As BTIG Research analyst Walter Piecyk observed in a note to clients this morning:

We estimate that last years price cut of the iPhone 3G to $99 stimulated more than 3 million phone sales to existing AT&T customers that helped the company further penetrate the family plan with higher ARPU, lower churn customers. We believe the impact could be even larger this year for AT&T given its the broad market acceptance of the iPhone, the halo impact of the iPad and the installed base of iPhones that will need to be upgraded to a 3GS phone in order to benefit from Apple’s latest upgrade to its iPhone OS 4.0.

AOL to Wall Street: Our Turnaround Is Going to Be Really Slow

Peter Kafka — Fri, 14 May 2010 13:23:29 +0000

AOL disappointed investors with a Q1 earnings report that missed low expectations. CEO Tim Armstrong doesn’t want that to happen again, so he’s bellowing as loud as he can: Don’t expect much from us anytime soon.

Yesterday Armstrong sent CFO Artie Minson out to Barclays Capital to repeat the message. It got through. Here’s analyst Douglas Anmuth noting that ad sales will be underwhelming for a while, even though the Web ad business is bouncing back:

Management was quick to point out that AOL’s overall display pipeline for the back half remains soft. Management indicated that it has booked roughly 60% as much inventory for the back half as it had booked at the same time last year–and that was in a softer overall macro environment.

On the plus side, pricing for the ads AOL (AOL) does sell are improving, which it can attribute both to the overall recovery and AOL’s focus on selling high-end inventory while dumping its low-cost stuff. Still, Anmuth says, “We do not expect the uptick in CPMs to offset the removal of low quality ads and the sales force dislocation in the near term.”

So lower those expectations, okay?

But not too much!

AOL also suggests that its new search pact, which will replace the one with Google (GOOG) that expires in December, will be a big deal. According to Anmuth, “Management is approaching the renewal as a broad strategic partnership for the company that has many potential outcomes. AOL mentioned mapping and local could be part of the deal and we wouldn’t be surprised if a display ad partnership was also included.”

Barclays thinks Armstrong’s recent hire of ad tech executive Alex Gounares from Microsoft (MSFT) means the deal could end up tipping to Redmond. Stay tuned.

RadioShack Dumping Palm? [UPDATED]

John Paczkowski — Mon, 19 Apr 2010 13:15:33 +0000

For Palm, April is indeed proving to be the cruelest month. It began with reports that the company is for sale and continued with news of the departure of software chief Michael Abbott. Now comes another ugly development: RadioShack appears to be dumping the company’s smartphone line. The Palm Pre and Pixi have disappeared from the retailer’s Web site and from the shelves of many of its stores.

As of this writing, RadioShack’s Palm Store is entirely empty (“What are you shopping for in our Palm Store?” “Nothing!”). And CL King analyst Lawrence Harris reports that a number of RadioShack locations are no longer stocking the Sprint (S) version of the Pre and Pixi.

“Over the weekend we visited multiple RadioShack locations in the New York metro area,” Harris writes. “Most were no longer carrying the Palm Pre or Pixi. One location still had some Pixi’s, but no Pre’s in stock. The store manager told us that sales of the Pixi would be limited to the stock on hand, with no further shipments expected. Historically, RadioShack has been an important sales channel for Sprint. In recent weeks RadioShack was offering both Palm models for free, probably in order to clear out inventory.”

I’ve asked both Palm (PALM) and RadioShack (RSH) for comment and will update here if and when I’m given one.

UPDATE: Wendy Dominguez, corporate media relations manager for RadioShack, just provided me with the following comment: “For competitive reasons we don’t comment on inventory numbers and distribution of specific devices. Palm has been a good partner. We expect that relationship to continue.”

Dominguez declined to explain why Palm devices are no longer available for sale in RadioShack’s Palm Store. Nor would she comment on reports that the Palm Pre and Palm Pixi have disappeared from a number of the company’s brick-and-mortar locations.

UPDATE: Palm has declined comment.

UPDATE: Sprint has confirmed to Tech Trader Daily that it is indeed phasing out sales of both the Palm Pixi and Pre. “The plan is for the Pre to be replaced by a BlackBerry device and the Pixi for a message-centric device,” a spokesman told the blog.

FURTHER READING:

Palm: I Cast Thee Out Creepy Lady Ad Agency

Palm’s Worst Nightmare: New iPhones on AT&T and Verizon

A Palliative for Palm

Good Luck Competing on the iPhone’s Home Turf, Palm

Exercise in Futility? Palm Pre Plus, Pixi Plus Headed to AT&T

Palm: Pssst. Wanna Buy 1.15 Million Smartphones?

Palm Pileup: Weak Smartphone Sales and a Gruesome Q4 Forecast

Could Be Worse, Could Be Raining: Palm’s AT&T Launch Delayed?

Could WebOS Licensing Be Palm’s Salvation?

Palm’s Salvation? Less Push, More Pull.

And if Palm’s Project JumpStart Doesn’t Work Out, There’s Always “Project Defibrillator”

Double Face-Palm: Analysts React to Palm’s Lowered Guidance

Time to Start Looking for a Buyer, Palm?

2010: Year of the Palm? Maybe Not…

Analyst: Palm May Be Acquired in the Next Two Years

Palm: I Cast Thee Out Creepy Lady Ad Agency

John Paczkowski — Tue, 06 Apr 2010 11:50:57 +0000

“The Pre is probably being talked about more than other phones right now because of the marketing and advertising, and that’s a good thing. Could the ads work harder to show exactly how the phone works? Yes, but we knew it would be polarizing people to have a woman not shout at them and tell an interesting story.”

– Gary Koepke, co-founder of Modernista, the agency responsible for the absurd marketing campaign that launched the Palm Pre

Well, Modernista founder Gary Koepke was right about one thing: The absurd ads his agency conceived for the launch of the Palm Pre really could have worked harder to show how the phone worked–a lot harder. Because here we are a year after the device launched and Palm (PALM), which was the toast of the Consumer Electronics Show when it announced the Pre, is languishing amid lousy sales and an alarming inventory problem.

Little wonder then that Palm is rumored to be cutting the agency loose, evidently having finally realized that launching a bet-the-company smartphone with an advertising campaign that says almost nothing about it was unwise, if not utterly foolish–almost as foolish as choosing as a lead for that ad a female character far better suited for a role in “The Exorcism of Emily Rose.”

In the end, Modernista’s Palm campaign was simply far too short on product description and far too heavy on inane imagery (an army of jumpsuit-wearing Chinese dancers and a strange mumbling woman on a rock?) to be effective. If, as Advertising Age claims, Palm is dumping Modernista and negotiating with several other agencies to handle upcoming campaigns, it’s a wise move. Here’s hoping we see some new ads with clearer messaging and a focus on features over directorial foppery in the future.

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