The company also has a new leader. In late February, board member Michelle Peluso took over as CEO, replacing the company’s chairman, Kevin Ryan. Peluso most recently was the consumer chief marketing officer and Internet officer at Citigroup, and previously spent six years as CEO of Travelocity.

I sat down with her last week at Gilt’s New York City headquarters to discuss what she has been up to during her first 100 days. Short answer: A ton. Here’s an edited look at Peluso’s thoughts on some key topics, including new business ideas, acquisition targets and positioning Gilt for a possible IPO:

On doing everyone’s job

One of things I’ve been doing is getting to know the team on a more granular level. Being on the board, I knew the senior level mostly. I’ve spent two weeks in each department. I do meet-and-greets, meet with high-potential and top performers, and then do some of their work. In Kentucky, I picked, received and packed. I’ve shot photos, styled, cropped photos, re-cropped. I’ve done [quality assurance] … and pushed code to production. It’s been important getting to really know the team and key leaders two levels down that I didn’t know as much. And really knowing how they work at a very granular level.

On new ways Gilt may work with fashion brands

One of the things brands have asked is whether we could be more of a marketing platform for them around opening new stores, juicing new lines, thinking about new demographics. How do we do a better job beyond just selling excess?

With Banana Republic, we introduced their “Mad Men” collection first on Gilt. It wasn’t a flash sale, but it was exciting and nuanced. Or if Jonathan Adler is opening stores and wants to drive foot traffic and pays us a marketing commission off of everything those people buy. Or it could be advertising dollars. We are looking at advertising revenue a little more.

And as we become bigger, are there more parts of the value chain we can play in if there are brands who come to us and say, “We don’t know what to do with mobile,” or “We don’t really know how to distinguish ourselves in the e-commerce world”? Does it make sense for us to help?

On whether this means that Gilt could start a consulting business

Yes … or not. Maybe we are actually running the mobile apps for them or doing distribution. Maybe they send products to our warehouse, and we manage distribution and fulfillment of those products.

On all of these ideas, we looked at some models and started to launch some things to see what gets traction.

On focus

We got too unfocused and launched a few too many categories, and launched a few businesses that may have been exciting businesses and maybe under different circumstances could have built scale … but we got distracted from the core business.

On asking staff to come up with other new business ideas

We set teams in motion to come up with 30 ideas, with timelines and parameters, and they came back and pitched the exec team over a couple of days. We cut a bunch out and put a few through.

We’ve taken the net of the ideas and are now through the second round of evaluation of those ideas. The goal is to finish that by the end of June, because July first is our new fiscal year.

What some of the ideas might be

• International: We have done a very, very light touch on international; we allow shipping to other countries, but we haven’t really done local language translation or actually making shipping affordable by looking hard at vendors. We haven’t accepted returns. Everyone gets the same merchandise at 12 noon. There’s a lot to improve. International has grown without doing any of that from four percent to 8.5-to-nine percent without really trying.
• The sale of pre-owned/vintage clothes: We do some vintage sales that are highly successful — they’re incredibly pristine … On that strategy, one step is to diversify sources through third parties, another step could be truly getting into marketplaces like Threadflip and The RealReal. We could even acquire as one of our options.
• Mobile: We just crossed over 40 percent of revenue coming from mobile. We are a much more mobile company than the vast majority of commerce and e-tailer players. But can we think of some next-gen ideas? We just launched the ability to take a picture of your face and swirl through different glasses on your face. We’ve looked at a bunch of those ideas.

On boring ideas where there is opportunity

Then we’ll look at some things that are frankly really mundane, but also important. Things like chat and other ways to improve customer service — changing return policy. These are things we’re looking at, but we are pretty close actually to final decisions.

Whether she thinks further layoffs are needed

No. I think our goal is to grow revenue significantly faster than we grow our cost basis. Where we free up resources by doing some things less manually, we’ll put more resources on other things. I’d love to put more people on mobile development, I’d love to go after vintage a little more aggressively, and we think international is a big opportunity.

Morale

I asked for a full employee survey before I joined. We usually do it in May, but I asked for it to be done the week before I started. The questions around being proud to work here, being proud of the brand, and loving the people you work with — those scores are high 80s and 90s … which is really, really, really good.

And then some stuff where there’s real opportunity for improvement — we’ve grown so fast that we haven’t always done a good job of helping with career paths.

Financial goals

• Being adjusted EBIDTA-positive this year
• Starting to generate cash consistently from operations by the end of the calendar year
• Growing revenue by robust double digits

IPO

Are we a good target for an IPO? Yes. And if you asked me why I think that, I’d say a lot of banks come in here, so we have a good sense of the market. And we are the biggest, most powerful brand in the space. We have recently been seeing strong double-digit growth, we’ve been proving we can be adjusted EBIDTA-positive, which we have been for a couple of quarters [Gilt about broke even on an adjusted EBIDTA basis in Q1], we’ve got a bunch of upside in international. I think we have a compelling story for a public company profile. … We’ve been having some conversations.

Having said that, we’re not in a rush. … Going public has its consequences. We’ve seen in the last six to 12 months that it’s not so fun to be in a rush to go public.

I believe we’re a strong public-company target, and it’s our likely path, but we’re not in rush. It’s a very dynamic conversation. Part of it is what I think, part of it is what changes if a competitor goes public, for example.

On whether Gilt has room to grow, or whether it has reached most of its potential customer base

People ask that question about flash sales in general. When you step back and look at the total luxury market sold at discount, it’s still such a tiny fraction. We have done some things that give us a good idea that the market size is still really large, with room for growth. We’ve done a little bit of TV — direct-response TV — and have seen customer growth accelerate a bit. We’re really convinced that we have a relatively untapped market in front of us.

Then, with our new ideas on top of those, we think there’s some nice upside. So, for a variety of reasons, I feel good about the revenue growth opportunity in front of Gilt.

I think the story of a bubble around flash sales — we’ve been a little quiet around that, and maybe fed it by saying we’re not going to be in Jetsetter and not going to do [Gilt] Taste. I think the actual performance of the business is pretty compelling.

On whether Gilt City warehouse sales could lead to Gilt retail locations

They’ve been great, and done in a very brand-accretive way — very much in line with flash sales — a little bit of frenzy, fun, a little bit crazy. And we get to move some of our inventory at the end of the day.

But I don’t think brick-and-mortar is a big idea for us.

On the knock that Gilt holds too much inventory

It’s important to us have a reasonable amount of flexibility for our partners. I won’t give you percentages, but there are different kinds of ways we work with partners. Some of it we’re selling a first-look, others we’re getting a look at excess and don’t take inventory. For others, we buy the inventory we want, or we may do a take-all, and sell what we can and put the rest in final sale. For other partners, it’s effectively drop-ship.

On revenue

That’s one of the things I don’t want to be talking about. We have talked about that in the 2012 calendar year we had gross revenue of $600 million, but that included Jetsetter, which just got sold. We’re not giving the number for calendar year 2013, but if you stripped Jetsetter out of both, we’d have robust double-digit growth.

As we reported in March, HP has withdrawn from the naming rights to the San Jose sports arena currently known as the HP Pavilion, home to the San Jose Sharks of the National Hockey League. The new naming rights will go to the German software giant SAP. Affectionately known by hockey fans as the “Shark Tank,” it will now be the SAP Center at San Jose.

I just received the following statement from SAP:

“Shark Sports & Entertainment and SAP have reached agreement for SAP to become the naming rights holder of HP Pavilion at San Jose. We are pleased to be working together on this significant partnership that will continue to positively impact the venue as well as the city of San Jose and its residents. At this time the deal awaits approval from the City of San Jose.”

The change marks an early end to the naming rights deal that HP inherited in 2002 when it acquired Compaq Computer which was originally scheduled to run through 2016. (It was called the Compaq Center at the time.) The deal cost HP about $47 million over 15 years. NBC Bay Area is reporting that the payment to the Sharks from SAP will be a little less than $1.7 million a year and about $8.4 million to the city. It’s unclear how long the deal will last.

HP CEO Meg Whitman discussed an early out to the deal with Hasso Plattner, SAP’s co-CEO and chairman of its supervisory board, at a routine meeting earlier this year. Plattner is the majority owner of the Sharks and recently bought out two other co-owners, longtime Kleiner Perkins venture capitalist Kevin Compton and former VeriSign CEO Stratton Sclavos. His stake in the team is said to be north of 90 percent.

HP had wanted out of the naming rights agreement as the result of a wider evaluation of its global marketing and branding efforts. The deal was said to cost HP about $3.1 million a year, essentially pocket change to the $120 billion (2012 sales) tech giant, but perhaps less useful in a world where personal computers — Pavilion is also the name of HP’s primary PC brand — are selling at historically low levels.

Whitman and Plattner were said by sources familiar to the situation to have discussed the naming rights situation at a routine meeting earlier this year. (HP is a major SAP customer.) Asked by Plattner whether she intended to keep the naming rights on the arena through 2015, Whitman is said to have responded: “Frankly I’d like to get out of it.”

HP will still have access to the arena and to San Jose Sharks games. Sources say the company intends to hold on to a single luxury box it leases for the purpose of entertaining customers. Oddly enough, the naming rights for the luxury suites belong to another tech company: They’re currently known as Citrix Suites. No word yet on whether or not those naming rights are changing too.

The arena seats 17,562 for hockey games, and more than 19,000 for concerts. It hosts as many as 190 events a year, including the SAP Open, a men’s tennis tournament. It was briefly the home court of the NBA’s Golden State Warriors during a period when the Oakland Coliseum was under reconstruction.

Never mind that. CEO Marc Benioff, in what appears to be his sole media interview on the deal, went on his favorite TV show, CNBC’s “Mad Money,” less than an hour ago and defended the deal, calling Indianapolis-based ExactTarget a “perfect fit” with Salesforce that, he argues, completes its cloud-based marketing software business. And by the way, Salesforce raised its annual guidance to say it expects to report $4 billion in revenue this year.

One other thing he said is that Salesforce looked at “every company” in the marketing software space. The one not named ExactTarget that appeared to take the biggest hit today was Marketo, which floated an initial public offering last month. Its shares fell by $1.97, or eight percent, to $22.61 and are off their highest levels by more than 15 percent. Marketo, itself a cloud-based marketing and “Revenue Performance Management” company, had many times been named as a possible, even likely, Salesforce target.

Indeed, at least part of any investment analysis of Marketo included a possible buyout by Salesforce, and Salesforce has been known to be shopping around for some time following Oracle’s $871 million acquisition of Eloqua last year.

Salesforce has at times been criticized for overpaying on its acquisitions. The $212 million it paid for Heroku at a time when it was basically a pre-revenue startup was a good example. In 2011 it paid $326 million for Canada’s Radian6, the first big piece of what ultimately became the “marketing cloud,” and it wasn’t long before that looked like a pretty solid idea. Buddy Media came next and was, at $745 million, Salesforce’s biggest acquisition before today.

What are the results so far? Benioff said on a conference call with analysts on May 23 that he expected the marketing cloud could be a $1 billion business. So how’s that working out? Right now, he said, it’s a $100 million business.

But as he says in the video with CNBC’s Jim Cramer below, there’s hope. Tech spending by marketing execs is expected to eclipse that of CIOs and CTOs within four years. That’s what Salesforce is gunning for with this deal and others before. And ExactTarget’s strengths in email and digital marketing fill out gaps in Salesforce’s capabilities. Also, as he tells Cramer, ExactTarget hasn’t grown that much internationally, something it can do as part of Salesforce. All of this makes it the “perfect fit” for Salesforce, right? At $2.5 billion, it better be.

Here’s the video.

Salesforce is paying $33.75 a share, which amounts to a 52 percent premium, or $11.65 over yesterday’s closing price of $22.10. Salesforce shares are down by more than 2 percent, or $40.16, in pre-market trading on the news. (Update: I initially mixed up the dollars and the percentage in estimating the premium. Sorry for my mistake.)

The deal is another example of the boom in marketing software that runs in the cloud. Salesforce has made a series of acquisitions in this space in recent years, the most recent and now largest of which was Buddy Media, for which it paid $745 million last year.

One of the big buckets of technology spending at large companies, especially consumer-facing ones, is no longer in the office of the CTO or CIO, but in that of the chief marketing officer. Salesforce isn’t the only one going after that pot. Marketo, another cloud-based marketing software outfit, debuted in an $80 million IPO last month. IBM bought Unica in 2010, and last year, Oracle paid $871 million for Eloqua.

ExactTarget will become part of the steadily growing marketing cloud that Salesforce has built with Buddy Media and Radian6, a marquee Salesforce deal from 2011.

ExactTarget’s customers include Coca-Cola, Nike, and The Gap. It ran a $21 million loss on $292 million in revenue last year.

Here’s the announcement:

Salesforce.com Signs Definitive Agreement to Acquire ExactTarget

The combination of ExactTarget with Salesforce will create the market and technology leader in marketing

ExactTarget, a leading cloud marketing platform, is used by more than 6,000 companies including Coca-Cola, Gap and Nike to manage their digital marketing

SAN FRANCISCO and INDIANAPOLIS, June 4, 2013 /PRNewswire/ — Salesforce.com [NYSE: CRM], the world’s #1 CRM platform (http://www.salesforce.com/), and ExactTarget [NYSE: ET], a leading cloud marketing platform, today announced that they have entered into a definitive agreement under which salesforce.com will acquire ExactTarget in a transaction valued at approximately $2.5 billion. Under the terms of the agreement, salesforce.com will commence a tender offer for all outstanding shares of ExactTarget for $33.75 per share, in cash. The transaction has been unanimously approved by the Boards of Directors of both companies.

Salesforce.com’s acquisition of ExactTarget will further its mission of being the world’s leading CRM platform—one that enables companies to transform how they connect with their customers across sales, service, and marketing. By combining ExactTarget’s leading digital marketing capabilities with salesforce.com’s leading sales, service and social marketing solutions, salesforce.com will create a world-class marketing platform across email, social, mobile and the web.

The dramatic increase in consumer and business use of social networks, mobile devices, and new digital technologies is causing a revolution in marketing, as budgets previously spent on traditional media are now moving to digital campaigns. Gartner estimates that by 2015 consumer technology companies will have switched one-third of their traditional marketing budgets to digital1, and CMOs will outspend CIOs on information technology by 20172.

The combination of ExactTarget and salesforce.com will increase the value proposition that customers of both companies will receive. Salesforce.com customers — including many of the world’s largest and fastest growing organizations — will be able to extend their investments in sales, service and social marketing with access to the industry’s most comprehensive marketing automation solution. ExactTarget’s large and vibrant customer base — including many of the world’s largest consumer brands — will have access to new world-class social marketing capabilities, and will be able to leverage salesforce.com’s leading sales, service and platform solutions to transform their end-to-end customer experience.

Comments on the News
“The CMO is expected to spend more on technology than the CIO by 2017,” said Marc Benioff, chairman and CEO, salesforce.com. “The addition of ExactTarget makes Salesforce the starting place for every company and puts salesforce.com in the pole position to capture this opportunity.”

“ExactTarget’s mission is to revolutionize how businesses connect with their consumers using data-driven digital marketing across all channels,” said Scott Dorsey, ExactTarget chairman, chief executive officer and co-founder. “Salesforce.com’s tremendous strength in social marketing, along with its leadership position in sales and service, not only will accelerate this vision, but also provide our customers with a powerful, integrated CRM platform to transform their end-to-end customer experience.”

“Marketing was the fastest growing CRM category in 2012, growing at 21% (more than four times the software industry forecast norm in 2012),” said Yvonne Genovese, managing VP, Gartner’s Marketing Leaders Research. “We believe this growth will continue and marketing will be the largest growing CRM category through 2017.”

Salesforce Marketing Cloud — The Marketing Platform of Choice for CMOs
The acquisition of ExactTarget will accelerate the growth and leadership of the Salesforce Marketing Cloud. The combination of ExactTarget’s industry-leading marketing automation and campaign management capabilities with salesforce.com’s leading social marketing solutions — listening with Radian6, publishing with Buddy Media, and advertising with Social.com — will deliver the marketing platform of choice for CMOs. Now any company will be able to connect with their customers in entirely new ways across email, social, mobile and the web.

Acquisition to Create the Market and Technology Leader in Marketing
As the global leader in CRM, salesforce.com is number one in sales, service and cloud platforms. And now with the combination of Salesforce and ExactTarget, salesforce.com will become the leader in marketing. The acquisition gives salesforce.com industry leading solutions across every major pillar of CRM, creating a unique customer platform that enables companies to transform how they connect to their customers throughout every part of the customer lifecycle. For ExactTarget, joining salesforce.com will accelerate its growth by providing dramatically increased customer and geographic reach and global operational scale.
ExactTarget — Leading Cloud Marketing Platform for More Than 6,000 Companies
Founded in 2000, ExactTarget is a leading cloud marketing platform. The company’s solutions enable marketers to integrate customer data from any source to power digital marketing campaigns across multiple channels, all while leveraging sophisticated marketing automation capabilities. More than 6,000 companies around the world, including Coca-Cola, Gap and Nike rely on ExactTarget’s solutions to drive customer engagement, increase sales and improve return on marketing investments.

Details Regarding the Proposed ExactTarget Acquisition
Under the terms of the transaction, salesforce.com will commence a tender offer to acquire all of the outstanding shares of ExactTarget for $33.75 per share in cash, subject to customary closing conditions, including the receipt of a majority of ExactTarget shares in the tender offer and expiration of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act. Following the successful completion of the tender offer, ExactTarget shares not tendered in the tender offer will be converted in a second step merger into the right to receive the same $33.75 per share in cash paid in the tender offer.
The transaction is expected to close late in salesforce.com’s fiscal second quarter, ending July 31, 2013.
Financial Impact of the Proposed ExactTarget Acquisition

FY14 Revenue: The acquisition is expected to increase total revenue by $120 to $125 million. This estimate reflects an approximately $65 to $70 million reduction relating to fair value adjustments to billed deferred revenue and unbilled backlog, adjustments related to the combined customer base, and inter-company revenue elimination.
FY14 non-GAAP EPS: The acquisition is expected to reduce non-GAAP EPS by approximately $0.16. This estimate reflects reduced revenue expectations as described above, and standard integration costs and transaction fees expected to be in the range of $40 to $45 million.
Q2 FY14 non-GAAP EPS: The acquisition is expected to reduce fiscal second quarter non-GAAP EPS by approximately $0.05. This estimate reflects reduced revenue expectations as described above, the company’s operating results for the fiscal second quarter and standard integration costs.

Based on the above, Salesforce.com is updating its guidance previously reported on May 23, 2013 as follows:

Q2 FY14 Guidance: Based on an expected late fiscal second quarter close date, this transaction is not expected to have any material impact to salesforce.com’s fiscal second quarter FY14 revenue results previously guided on May 23, 2013. Non-GAAP EPS is expected to be in the range of $0.06 to $0.07.

Full Year FY14 Guidance: Revenue for the company’s full fiscal year 2014 is projected to be in the range of $3.955 to $4.0 billion, an increase of 30% to 31% year-over-year.
Diluted non-GAAP EPS is expected to be in the range of $0.31 to $0.33. Non-GAAP EPS estimates assume a non-GAAP tax rate of approximately 36%. The non-GAAP EPS calculation assumes an average fully diluted share count of approximately 645 million shares.
These estimates assume a late fiscal second quarter close date, and actual results could differ materially based on the final transaction close date. The company will update full year GAAP EPS guidance upon completion of purchase accounting after the transaction closes.

Non-GAAP Financial Measures: This press release includes information about non-GAAP EPS, non-GAAP tax rates, and constant currency growth rates (collectively the “non-GAAP financial measures”). Non-GAAP EPS estimates exclude the impact of the following non-cash items: stock-based compensation, amortization of acquisition-related intangibles, and the net amortization of debt discount on the company’s convertible senior notes, as well as income tax adjustments. The purpose of the non-GAAP tax rate is to quantify the excluded tax adjustments and the tax consequences associated with the above excluded non-cash expense items. These non-GAAP financial measures are not measurements of financial performance prepared in accordance with U.S. generally accepted accounting principles. The method used to produce non-GAAP financial measures is not computed according to GAAP and may differ from the methods used by other companies. Non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures and should be read only in conjunction with the company’s consolidated financial statements prepared in accordance with GAAP.

BofA Merrill Lynch is serving as the financial advisor to salesforce.com. JP Morgan is serving as the financial advisor to ExactTarget.

Management Conference Call
Salesforce.com and ExactTarget will host a conference call to discuss this transaction at 8:00 a.m. (ET) / 5:00 a.m. (PT) on June 4, 2013. A live dial-in is available domestically at 866-901-7332 and internationally at +1-706-902-1764, passcode salesforce.com or 89103168. A live audiocast of the event will be available on the salesforce.com Investor Relations website at http://www.salesforce.com/investor and ExactTarget’s website at http://www.ExactTarget.com/company/investor-relations/events-presentations. A replay will be available at 800-585-8367 or +1-855-859-2056 passcode 89103168, until midnight (ET) July 4, 2013.

About ExactTarget
ExactTarget is a leading global provider of cross-channel digital marketing software-as-a-service solutions that empower organizations of all sizes to communicate with their customers through email, mobile, social media, web and marketing automation. ExactTarget’s suite of integrated applications enables marketers to plan, automate, deliver and optimize data-driven digital marketing and real-time communications to drive customer engagement, increase sales and improve return on marketing investment. Headquartered in Indianapolis, Indiana with offices in Asia, Australia, Europe, North America and South America, ExactTarget trades on the New York Stock Exchange under the ticker symbol “ET.” For more information, visit www.ExactTarget.com.

About salesforce.com
Salesforce is the world’s largest provider of customer relationship management (CRM) software. For more information about Salesforce.com (CRM), visit: www.salesforce.com.
Any unreleased services or features referenced in this or other press releases or public statements are not currently available and may not be delivered on time or at all. Customers who purchase salesforce.com applications should make their purchase decisions based upon features that are currently available. Salesforce.com has headquarters in San Francisco, with offices in Europe and Asia, and trades on the New York Stock Exchange under the ticker symbol “CRM.” For more information please visit http://salesforce.com, or call 1-800-NO-SOFTWARE.

Media giant Hearst has hired two senior execs — Demand Media’s Joanne Bradford and former Los Angeles Times CEO Jeffrey Johnson — in a significant move to digitally turbocharge and jumpstart its flagship but long-suffering newspaper, the San Francisco Chronicle and its SFGate.com website.

“They have deep publishing and new media experience and believe in the power of great content with a valued brand,” said Heart CEO Frank Bennack in a statement. “We are excited to work with them to redefine the choices for how and where readers can experience the trusted Chronicle content they depend on.”

In the new leadership, Johnson will be the publisher of the Chronicle, while Bradford will be its president. Both will report to Hearst Newspapers President Mark Aldam. Current publisher Frank Vega — an old-style publisher who has had a controversial tenure at the Chronicle — will retire, though Hearst said he will continue as chairman through the transition.

“The San Francisco Chronicle should be a shining star and use case of how to build a community and cover local news,” said Bradford in a text to me today.

Indeed. While the Chronicle and its website is the largest for local news in the Bay area, it has lagged a lot in aggressively covering key trends — such as tech — and the fast growth of the region. While the area has blossomed, the Chronicle, like many big-city newspapers, has suffered, as digital businesses of all kinds have made incursions on its business.

Its daily print circulation is now 265,000, and combined with its website it reaches close to two million people.

Getting all that a whole lot higher — and, perhaps more importantly, a lot more relevant — will be a tough job and will likely require a major reinvention of the Chronicle brand.

That is especially true since the San Francisco area, including Silicon Valley, is the world’s key digital hub, as well as a leader in a number of areas — from top-notch sports teams to having one of the most innovative food and indie cultures. After a few years of rough economic times, the city is on a bit of a roll, including being the location of some upcoming major events such as the Super Bowl and America’s Cup.

Bradford has a lot of experience in both old and new media and is well known in the online media advertising space, having had top sales and media jobs at BusinessWeek magazine, Microsoft, Yahoo and, now, Demand.

She has been at that content site, where she has been its chief revenue and marketing officer, since 2010. At Yahoo, previous to Demand, she was an SVP in charge of North American revenue and also worked on branded entertainment partnerships. At Microsoft, she was a corporate VP and chief media officer of MSN Media Network.

And, although I have known her well over many years — full disclosure: We are very good friends — I had no idea she had an undergraduate degree in journalism from San Diego State University.

Johnson is also a longtime media exec. He has recently been an operating partner at the Yucaipa Companies — owned by kingpin Ron Burkle — focusing on media investments since 2007. Previous to that, he was president, publisher and CEO of the Los Angeles Times for just a year, but had been its SVP and GM since 2000. At the Times, he was responsible for the newspaper’s digital and print operations including editorial, advertising, circulation, consumer sales and marketing, finance and technology. Johnson has also worked at the Chicago Tribune and Orlando Sentinel and has an undergraduate degree in accounting from the University of Illinois and an MBA from the University of Chicago.

The Chronicle is the largest newspaper in Northern California, founded in 1865 by Charles and Michael de Young. Its owner, the privately-held Hearst, is one of the nation’s largest media companies, with dozens of daily and weekly newspapers; has a huge group of television stations and cable network stakes, such as Lifetime, A&E and ESPN; hundreds of magazines, such as Good Housekeeping, Cosmopolitan and Elle; and many other varied holdings.

Bradford will be replaced at Demand Media by Jeff Dossett.

According to an internal memo and now on his LinkedIn profile, Yahoo has just hired longtime McKinsey exec John DeVine as SVP of global operations. He has worked in the marketing and sales practice at the consulting firm since 1999 and has been an advocate there of “how companies need to embrace the customer experience.”

Devine will report to COO Henrique De Castro — who also worked at McKinsey — and will be helming a wide swath of operations, such as advertising solutions. DeCastro has also been searching recently for a head of the key U.S. ad unit and has tried to hire former AOL sales chief Ned Brody. That hire is limbo now, due to Brody’s 14-month non-compete contract with AOL; CEO Tim Armstrong shows no signs of letting him leave sooner.

But DeVine is on board at Yahoo, so to speak. The former submarine officer in the U.S. Navy also has a masters degree in nuclear engineering — batten down the hatches for incoming at ATD HQ! — from the University of California Berkeley and did his undergraduate work at the U.S. Naval Academy.

The information provides a powerful tool for marketers but raises new privacy concerns. Even as Americans browsing the Internet grow more accustomed to having every move tracked, combining that information with a detailed accounting of their movements in the real world has long been considered particularly sensitive.

Read the rest of this post on the original site »

This one doesn’t sound at first quite as interesting, but from the point of view of complex computing tasks, it’s pretty cool. When you think about all the ways that companies have to try to engage with and then make their customers happy and the ways they can do that more effectively, you can probably imagine how a deeply analytical computer might be useful.

IBM calls it the Watson Engagement Advisor; it’s an offshoot its Smarter Commerce initiative. Consider that Watson is smart enough to understand the natural ebb and flow of human language and is designed to answer questions in much the same way humans do, and then quickly sort through a set of known information to determine the best answer, and you’ll realize it’s a fit for customer service.

In that way, Watson can learn over time, and like a good bartender with a lot of regulars, keep track of the unique likes and dislikes of customers and get better at it over time. And that’s important as consumers come to expect to be able to interact with companies pretty much wherever they are and on whatever device they happen to be using at the time: Whether it’s a smart phone, tablet, PC or whatever, they will expect — already are expecting — consistent experiences. Consumers, especially the younger ones, will expect companies to shift with the marketplace as tastes change and evolve.

Watson can be the voice that customers hear when they reach out to the company asking questions. Watson has only gotten smarter since its run on “Jeopardy,” speeding up its performance by 240 percent while slimming down the size of the system required to run it by 75 percent. Already the Nielsen Company and the Royal Bank of Canada are among those kicking the tires in trials.

The Yahoo board has approved a massive $1.1 billion all-cash deal to buy Tumblr.

It’s not clear when the official vote was taken, but sources close to the board said the acquisition was a foregone conclusion and was unanimously approved by the directors of Silicon Valley Internet giant.

The deal will likely be announced Monday morning, said numerous sources.

AllThingsD.com initially broke the story of the acquisition efforts and later followed up with details of the exact price and the board meeting to approve the transaction.

There were no other competing bids, despite reports, to snap up the New York-based social blogging service. That said, Tumblr had held some very preliminary discussions about various deals with Facebook, Google, Microsoft and also Twitter earlier this year.

As part of the Yahoo deal, Tumblr CEO David Karp — who will get a windfall of cash from the acquisition — will stay at Yahoo for four years at least and retain a lot of control over the service, much in the same way Instagram CEO Kevin Systrom does at Facebook. But, as there, Yahoo will undergird Tumblr’s nascent advertising business with its large and established infrastructure, said sources.

Yahoo had been mulling some kind of deal with Tumblr, from a strategic investment to an outright acquisition, for about six weeks. Sources said that Yahoo CEO Marissa Mayer had decided that buying the company was going to be “the stake in the ground of what her strategy is going forward for Yahoo.”

And that is to attract younger audiences with just the kind of user-generated content Tumblr has pioneered to impressive growth.

According to numerous sources, Mayer determined quickly in her research that the site was just the kind of property that Yahoo needed to make it both “cool” and relevant to new consumers.

Yahoo is looking to bolster its strong set of existing media offerings to appeal to a different demographic and also get into the social space via consumer-based software solutions that are both elegant and easy to use.

Tumblr’s mobile usage has also been strong, which also interested Mayer. While Tumblr started as a desktop-based service, its mobile offering has ramped up quickly in the last few years. ComScore says that a quarter of the service’s U.S. visitors now come from mobile devices.

At this price, it will be Mayer’s biggest acquisition so far. Since she became CEO last summer, Mayer has made only a series of small acquisitions of mobile startups at a low cost.

According to sources, the Tumblr brand will continue.

The deal, if consummated, will be a big win for investors. In a series of fundings since 2007, Tumblr has raised $125 million so far and is now at a reported valuation of $800 million. Investors include Spark Capital, Union Square Ventures, Sequoia Capital, Greylock Partners, Insight Venture Partners and the Chernin Group.

While Tumblr’s Karp has resisted various offers for the company over the years, Mayer spent a lot of time with him reassuring him that Yahoo could turbocharge his business. He has also been searching for a COO to help him build out the infrastructure of its business, especially its advertising one.

And as Peter Kafka and I previously wrote, Tumblr could certainly bring Yahoo a big, young audience. Its worldwide traffic was at 117 million visitors in April, according to comScore. On its home page, Tumblr claims it has 107.8 million blogs and 50.6 billion posts. U.S. desktop traffic to Tumblr was 37 million in April, close to LinkedIn and Twitter, although Twitter obviously has much more via mobile.

But figuring out how to make money from that is a task that the company has only recently started to tackle.

Like other recent Web startups that have seen rocketship growth — see: Twitter, Facebook — Tumblr resisted advertising for its formative years, and its user base seems particularly unwilling to accept standard banner ads. In addition, many industry observers think that Tumblr’s pages are packed with porn or other questionable content that would scare off advertisers.

But within the last year or so, Tumblr has started selling modestly sized “native ads” promoting brands’ Tumblr pages, on users’ “dashboards,” which has shown promise. Tumblr has said it had $13 million in revenue last year and sources said it could get up to $100 million this year.

Tumblr has been represented by Qatalyst Partners’ Frank Quattrone, while Yahoo’s Mayer, as well as M&A head Jackie Reses and CFO Ken Goldman, have been on the company’s side.

Interestingly, what got me first focused on Tumblr last week were Goldman’s comments at JP Morgan’s Global Technology conference last week, where he underscored the need for the aging Yahoo to attract more users from the coveted 18-to-24-years-old age bracket. Along with more marketing, he explicitly said Yahoo needed to be “cool again.”

“One of our challenges is we have had an aging demographic,” said Goldman at the Boston event. “Part of it is going to be just visibility again in making ourselves cool, which we got away from for a couple of years.”

Tumblr, apparently, fits the very expensive bill.

The bigger of today’s two is Tableau Software, which specializes in data visualization. Yesterday, the company announced that the shares priced at $31, raising north of $254 million in the process.

The company will be listing on the New York Stock Exchange with the ticker symbol DATA. Goldman Sachs and Morgan Stanley are running the deal. Credit Suisse, J.P. Morgan, UBS Investment Bank, BMO Capital Markets and JMP Securities are also underwriting.

Tableau’s biggest shareholder is the venture capital firm New Enterprise Associates, which led two investment rounds for a combined $15 million, the last being a $10 million series B in 2008 in a deal led by Forest Baskett. NEA’s stake amounted to about 37 percent before the sale, worth more than $607 million at the share offering price.

Founder and chief scientist Pat Hanrahan has about 18 percent of the company, worth about $295 million at the offering price. His co-founders — Christian Chabot, chairman and CEO, and Christopher Stolte, chief development officer — have about 15 percent each, with both stakes worth north of $235 million. Meritech Capital Partners has a stake amounting to about 6.5 percent, worth more than $102 million at the offering price.

The other one going today is Marketo, the cloud-based marketing software company. Market price yesterday was at $13 a share, raising almost $79 million. It will trade on the Nasdaq under the symbol MKTO.

Goldman Sachs and Credit Suisse are leading the offering. UBS, Canaccord Genuity, Raymond James and JMP Securities are also underwriting.

Marketo’s biggest shareholder is InterWest Partners, which prior to the sale had a 33.3 percent stake worth more than $302 million. Storm Ventures has a stake of a little more than 17 percent, worth $66 million. Battery Ventures, which led a $50 million Series F in 2011, has a 7 percent stake, worth about $28 million.

Hard to believe there’s anyone interested in “Arrested Development” who doesn’t know that a new season is coming to Netflix this month. But that’s not stopping Netflix from spending some time and money on really fun marketing stunts.

Earlier this week, for instance, the company set up a frozen banana stand — which will mean a lot to “Arrested Development” fans and nothing at all to the rest of you — at various Manhattan locations. The stand drew huge crowds.

And today this appeared in my inbox:

Tobias Funke “tobias@brigademarketing.com”
11:37 AM (24 minutes ago)

to me
Well hello there!

I’m Dr. Tobias Funke, and I finally got around to making those new head shots! And now you can insert me anywhere into your YouTube video creations!

Presenting www.insertmeanywhere.biz! I’ve always aspired to work with great directors like yourself and the great Mr. James Cameron. You’re reputation precedes you, and I promise you, kind sir, no other actor has this kind of agility. So I’d like to give you early access to all of my best characters.

We can talk about payment later. As you will see from my videos, I am okay with any kind of backend.

Regards,

Dr. Tobias Funke

Click through and you’ll find an entertaining video from Tobias/David Cross. In theory, you’re supposed to download clips from the site, and mash them up yourself using Final Cut or some such. More realistically you’re just going to watch stuff other people have made, like this clip:

So: Super smart (NYC-based PR shop Brigade Marketing gets the credit, apparently) [UPDATE: Both Netflix and Brigade want to note that Brigade didn't create the campaign or the tech behind it, but handled distribution to folks like me]. And super effective, since I’m writing about it right now.

Recall that part of Netflix’s pitch is that it doesn’t need to do a lot of marketing for its originals, because it doesn’t need to aggregate a big initial audience, like a TV show or movie needs, and because its most effective marketing tools are the millions of customers it already has. Stuff like this is clever but not crucial.

To have a chance of boosting their share of TV ad dollars, advertisers say online outlets need to do more to promote their shows.

Read the rest of this post on the original site »

All of that has been great news for Luma Partners’ Terry Kawaja, a banker who has made a specialty of navigating and explaining that landscape.

A few years ago, Kawaja put together a chart that tried to map out all of the different players, and that graphic became an instant hit for him: Regular people can’t make any sense out of this stuff, but for people in the industry, Kawaja’s “Lumascape” is a key reference text. Since then, he has put together eight more, each drilling down into a specific ad tech subsector.

Here’s the newest one, focused on what Kawaja is calling “marketing technology,” which he says includes everyone from Oracle to WordPress to dozens of companies likely known only to their employees.

You can click on the graphic below to enlarge it, or head here for Kawaja’s explanation of the graphic, and a link to a larger version.

Does that make sense to you? Don’t worry if you said “no” — implicit in Kawaja’s pitch is that this stuff is so dizzying that only a trained professional can understand it. But that seems to be working out quite nicely for him.

Not the core service (tweets continue to fly as fast as ever). It’s about giving a simple, straightforward explanation of exactly what Twitter is to the masses of people who just don’t get it. An unenviable challenge, if you ask me — for such a simple product, understanding Twitter can be rather complex.

Luckily, I don’t have that job. It now belongs to Gabriel Stricker, Twitter’s current VP of communications, who will head up the company’s consumer marketing efforts from now on. That’s according to a recent change in his Twitter profile, which now lists him as VP of marketing and communications.

Stricker comes from both a PR and a marketing background: He headed search comms at Google for more than five years; in 2003, he wrote a book on marketing strategy, and he has a history in political campaigning.

Historically, Twitter hasn’t had a solid, unified consumer marketing team or a person to lead it for years. Pam Kramer did a short stint as VP of marketing back in 2011, but it didn’t work out so well; Kramer was shown the door after only three months.

Gabriel Stricker

Since then, and even before, Twitter’s consumer marketing efforts have been splintered across the company. And instead of focusing efforts on basic user education of what Twitter is, resources would often be divvied up among departments on a first-come, first-served basis.

Stricker will fold a number of design team employees into his newly christened MarComms department, while the rest of the team will remain focused on designing and building actual products (rather than occasionally being peeled off to work on a promotional launch, for instance). It’ll also likely involve hiring new people (or contractors), which Twitter is actively doing at the moment.

Sales marketing remains a separate division under the control of Tom Thai, who came in from Twitter’s acquisition of Bluefin Labs earlier in the year, and who took the reins from Shane Steele.

Twitter declined to comment on the changes.

Sources familiar with the negotiations tell AllThingsD that HP CEO Meg Whitman wants out of the $47 million, 15-year naming rights deal, which is scheduled to end in 2016. The move is part of a global reevaluation by HP of its marketing efforts and sponsorships. The change could be announced as early as this summer, in time for the 2013-14 hockey season.

Software giant SAP is said to be interested in taking over the naming rights. Its founder, former co-CEO and chairman of its supervisory board, Hasso Plattner, is the majority owner of the Sharks. Plattner, who ranks at No. 122 on the Forbes magazine list of global billionaires, with a net worth of $8.9 billion, recently bought out two other co-owners, the longtime Kleiner Perkins venture capitalist Kevin Compton, and former VeriSign CEO Stratton Sclavos. Following that deal, Plattner’s stake in the team is said to be in the neighborhood of 90 percent.

HP spokesman Michael Thacker declined to comment, as did SAP spokesman James Dever.

A change in the arena’s naming rights would have to be approved by the San Jose city council. Michelle McGurk, a spokeswoman for San Jose Mayor Chuck Reed, had no immediate comment. Update, 4:50 PM PDT: I just received a statement from McGurk. See it below.

Scott Emmert, a spokesman for the San Jose Sharks, didn’t immediately return messages seeking a comment.

According to people familiar with the discussions, Plattner raised the issue of HP’s naming rights with Whitman directly during a routine meeting. HP is a significant SAP customer. Asked if HP intended to hold on to its naming rights through 2016 as the current agreement states, Whitman said, “Frankly, I’d like to get out of it.”

HP inherited the naming rights from Compaq, the computer company it acquired in 2002 for $25 billion. At the time, San Jose’s arena was known as The Compaq Center at San Jose. It has been known as the HP Pavilion at San Jose since late 2002. The rights are said to cost HP about $3.1 million a year.

As annual expenditures go, $3.1 million is pocket change for HP. While it doesn’t disclose marketing expenditures directly, those expenses fall under the “selling, general and administrative” (SG&A) line item on HP’s income statement, which in fiscal 2012 was $13.5 billion.

Still, since Whitman took over as CEO in 2011, marketing functions that had previously been run by HP’s disparate business units — the PC unit, the printer unit and so on — have been centralized under Chief Marketing Officer Marty Homlish.

Over the years, HP has become involved with hundreds, if not thousands, of events and programs that it sponsors as a way of raising the visibility of the HP brand. Those programs and sponsorships are now in the process of being systematically reevaluated, and many are being canceled outright.

The HP Pavilion name was given to the arena to align with the company’s main PC brand, known as Pavilion. But with personal computer sales in rapid decline, attaching the brand name to a sporting facility is no longer seen as an effective use of marketing dollars, people familiar with HP’s thinking say. Money saved from canceled marketing efforts is being redirected into either new marketing efforts or into HP’s research and development budget.

HP will still have access to the arena and to San Jose Sharks games. Sources say the company intends to hold on to a single luxury box it owns to entertain customers. Oddly enough, the naming rights for the luxury suites belong to another tech company: They’re currently known as Citrix Suites.

Informally known as the Shark Tank, the arena seats 17,562 for hockey games, and more than 19,000 for concerts. It hosts as many as 190 events a year, including the SAP Open, a men’s tennis tournament. It was briefly the home court of the NBA’s Golden State Warriors during a period when the Oakland Coliseum was under reconstruction.

Update: Here’s the statement I just got from Michelle McGurk, a spokeswoman for San Jose Mayor Chuck Reed:

“We’ve enjoyed a long and productive partnership with both the Sharks and HP, and we greatly appreciate their long-standing and valuable commitment to our community.

“The current agreement is scheduled to end in 2016, so we would be starting a process in the coming year or so to explore contract alternatives in the normal course of business.

“Because the Arena is an outstanding facility and Silicon Valley a unique location, we’re optimistic that we will be able to end up in position of mutual benefit for everyone, without speculating on any specific outcome.”

While several marketing software developers have had strong IPOs in recent months, Marin is one of just a few IPO-bound marketers focused specifically on advertising technology.

Read the rest of this post on the original site »

Attributed to Richard Thaler and Cass Sunstein in their best-selling book “Nudge: Improving Decisions about Health, Wealth, and Happiness,” a “Nudge” is a signal — which could be contextual or environmental versus written or verbal — that changes the behavior or decision that a human will make.

The original test of this theory was in a Chicago school district where they changed how food was laid out in the school cafeteria. This had a 35 percent positive impact in the consumption of healthier foods, without actually restricting the overall choices of foods available.

Leveraging a variety of different strategies, such as default settings, information as incentive and right context, companies have proven the ability to change someone’s behavior through a successful Nudge.

Automated decision making: So many decisions, so little time

So why do these Nudges work? Essentially, we don’t have time to process each decision that we make in life. Instead, we use cues and heuristics to guide our decisions — an automated decision making process.

The basis of Nudge theory is to apply an understanding of predicted behaviors to shape and influence that automated process. While standing in the checkout line, most shoppers will not weigh all of the pros and cons of donating two dollars to the charity at hand. The retailer can easily drive the results it wants by predicting that most shoppers will be in a hurry, and willing to accept the two dollar price point.

Now let’s consider how many decisions are made by a mobile user each day. Should I use an app or a mobile site? Should I forward this to my friends? How much should I top up my prepaid account?

Each individual’s decision is a unique, personalized Nudge opportunity.

And herein lies the challenge of applying an understanding of predicted behaviors to the mobile space. Although the traditional Nudge approach, which leverages trial and error, has proven successful for influencing the masses, it does not allow for the creation of timely, individualized Nudges for millions of dynamic customers.

So how can a mobile operator with six million subscribers making 200+ decisions per minute apply the Nudge theory to effectively discover, learn and optimize how to engage with each customer to truly change their behaviors?

Discovering the who, when and how of nudging mobile customers

Leveraging data-driven technologies such as pattern recognition, behavioral clustering, social graphing and predictive analytics, mobile operators are turning to data science and machine learning to advance the application of the Nudge theory — moving from a broad-brush approach to one of micro-targeting.

So how do you determine “who” to Nudge? By understanding how individuals behave over time, we can use pattern recognition approaches to establish fingerprints of each customer and group according to behaviors they have in common — e.g., usage frequency and type, elasticity recharge cycle, social graph authority, etc.

Then, by clustering people with similar fingerprints, discover what’s unique about certain groups relative to others, which indicates desirable and undesirable traits and causes that help describe how you should Nudge them.

For example, we’re working with mobile operators focused on increasing the value of their prepaid customer base, with one objective being to increase the frequency with which a customer recharges. Through automated behavioral analysis, we can determine that customers exhibiting specific attributes — patterns of balance consumption, spend per day, inbound/outbound on- and off-network activity distribution, etc. — have the highest propensity of being influenced by a specific Nudge.

Such highly individualized Nudges can yield double-digit percentage improvements in customer revenue and relative improvement in retention — the perpetual impetus driving marketers and mobile operators worldwide.

Determining “when” to engage is equally important because the context of mobile users — their location, social interactions, activity — is constantly changing. It’s imperative to understand not only the customer’s previous and current contexts but also what they’re likely to do next. This is where the voluminous amount of mobile data becomes an advantage; enabling the discovery of behavioral patterns, sequences and trends tied to specific business objectives.

For our defined group of prepaid customers, we can predict behavioral patterns. For instance, when a subscriber’s balance reaches a specified amount, they are likely to recharge within the next 24 hours, or when a customer misses the opportunity to rollover their current balance, there is a 71 percent higher probability of service cancellation within the next two recharge cycles. This understanding of what a customer will do next enables proactive Nudging — influencing a customer before a decision has been made versus reacting to how they have behaved.

Although traditional Nudge theory is based on influencing the masses, mobile Nudging centers on personalization that can only be achieved at an individual level. By aligning the “who” and the “when” with the right parameters — time constraints, price point, offer value (if any) and the right contexts — we can personalize Nudges and determine “how” to market to each customer.

In the case of our prepaid customer, we found that identifying and changing the right parameter — in this case, shortening the offer’s expiration period — not only results in a positive change for the next cycle, but it actually affects many cycles moving forward, generating significantly higher ARPU and lower churn.

Influencing behaviors that matter

That’s what fuels the application of Nudge — the ability to positively impact business metrics. Every decision that a customer makes, whether to make a purchase, extend service, deepen engagement or recruit friends and family, is a Nudge opportunity and a chance to impact the bottom line.

If mobile operators are applying Nudge to create positive and sustainable changes in customer behaviors that have a real impact on customer revenue and retention, it’s only a matter of time before businesses in other industries discover for themselves that with the help of Data Science, sometimes a Nudge can be more effective than a push or a shove.

Dr. Olly Downs is SVP of Data Sciences for Globys, a big data analytics company that specializes in contextual marketing for mobile operators.

Remember the “Why You’ll Love a Mac” campaign? Well, this is basically the same thing, but for iPhone. In other words, it’s a big ‘ol advertisement for an important product from the company that makes it.

But, Apple launched it just two days after Samsung unveiled its new iPhone challenger the Galaxy S4, so that must mean the company is terrified its Korean rival is suddenly going to claim the 60 percent to 70 percent of annual handset industry profits it typically captures for its own. Clearly, Apple is feeling the heat.

Or just maybe Apple is desperate.

Thing is, Samsung has a Web page of its own, and it claims the Galaxy S4 is a “Life Companion” that’s going to transform our lives in ways never before possible. “The Samsung GALAXY S4 is all about ‘togetherness.’ It brings people together when they’re apart.”

A smartphone that’s a “life companion?” That seems a stretch. A little ridiculous, too. Could it be that Samsung worries the iPhone might encroach on sales of the S4?

One could argue that promoting a smartphone as a life companion is evidence that Samsung is feeling a little heat of its own. Who in their right mind would claim such a thing if they weren’t? That sounds a little desperate, too.

And you know what? Samsung is feeling the heat. And so is Apple.

You know why? Because Samsung and Apple are beating the hell out of each other in the mobile device market in which they each seek supremacy. Recall that the two companies have some 50 lawsuits against one another spread out over 10 countries. This is Godzilla versus Mechagodzilla.

So these “rare defensive” interviews? These “We Are The Champions” Web pages? They’re not tells.

They’re marketing. They’re advertising. They’re part and parcel of a brutal battle over a lucrative and important market. And they’re not unusual. They’re business.