According to yet another online shopping survey for the holiday shopping season, this one from comScore, people are buying a lot more online than last year.

I know this people-buying-stuff-online thing must come as a shock to those who have been living in a cave for several years now.

For those with an Internet connection, though, sales rose to $1.04 billion on Black Friday, an increase of 26 percent over last year. It is the first time that Web purchasing for the important retailing day was over $1 billion, with 57.3 million consumers visiting online stores.

The entire amount of 2012 online holiday spending from the beginning of November until now, according to comScore, has been $13.7 billion. It is a 16 percent rise, but still a drop in the bucket compared to bricks-and-mortar retailing.

But, according to a statement from a comScore guy, “We continue to see this shopping day become more and more prominent in the e-commerce channel — particularly among those who prefer to avoid crowds at the stores.”

People don’t like being jostled at a mall when they can sit at home and buy more things on a couch. Imagine that!

Amazon was where the most action was among online retailing, followed by Walmart, Best Buy, Target and Apple. Auction site eBay was excluded from this group.

And, if you can bear any more stats, here is a chart from ChannelAdvisor on online sales:

And one of the top director candidates is well-regarded Hollywood exec Peter Chernin, said several sources.

He is an obvious choice, having been a top exec at News Corp. for many years. Since he left in mid-2009, Chernin has forged a successful film and television career, producing such hits as “Rise of the Planet of the Apes” and “New Girl.”

But, unlike many media execs, he has also focused on garnering much deeper digital experience.

Chernin was key to the formation of the Hulu premium online service, for example, and is also a board member of the Pandora streaming music service. He has also been making digital and media investments in Asia.

(And, interestingly, although apropos of nothing, Chernin’s former boss, Rupert Murdoch, has become an avid tweeter, too.)

Sources said Chernin has not decided if he even wants such a board seat, and Twitter management is still only in the early stages of its board effort, presumably to replace Flipboard’s Mike McCue.

The entrepreneur left the board earlier this year, after it was clear that his social media app and Twitter were on a collision course (or an acquisition one, depending how you looked at it).

But the addition of a media-savvy director — or even two — also makes sense in the context of the past year of Twitter’s evolution.

The brainchild of Jack Dorsey, Evan Williams and Biz Stone, Twitter first began as a microblogging social network.

While it did attract a lot of attention due to its celebrity tweeters — such as actor Ashton Kutcher and famebot Kim Kardashian — the management and board of Twitter is largely tech-centric in experience.

But, more recently, the service has taken its shape as a consumption-based media company, where some 40 percent of its user base read and consume content rather than create it. That is to say, they watch, but they don’t tweet.

Such a strategic direction is a natural extension for bringing in more advertising spending from outside partners, especially big media companies that have both the eyeballs and dollars that the company is hoping to attract.

Twitter is now commonly used throughout the media space in a variety of roles, from branding to audience-gauging, and also sometimes even as a plot device.

(That said, you won’t catch CEO Dick Costolo outright admitting Twitter’s media-company status; he still wants the Silicon Valley cred of being valued as a technology giant first.)

A Twitter spokesman declined to comment on any effort to bring in new directors; Chernin has not yet responded to a query for comment.

It’s been nice to see all the euphoria at Yahoo about free food and Apple iPhones kicking it up a notch.

But, purple people, guess what? Them’s just your basic table stakes in Silicon Valley these days and pretty much everyone else has had such perks for a long while now.

Thus, as nice as it is to drink your coconut water gratis, after two months in charge, it’s long past time to focus on what new Yahoo CEO Marissa Mayer is up to besides making much-needed but obvious cultural changes at the troubled Internet giant.

She’s been busy with the expected listening tour of employees and also outside tech players — such as former Yahoo CEO Terry Semel — which is a textbook stop in the turnaround playbook.

Now comes the hard part: Actually beginning to make the significant decisions about how she’s going to turn around Yahoo and what the key issues of strategic focus need to be.

In a series of recent meetings, according to numerous sources inside the company, Mayer has begun to outline what those are to top staff.

Not surprisingly, they are many of the same thorny issues that Yahoo has been facing for a long time and which center primarily on making the company relevant again in a wide number of ways.

I’ll get to many of them over the next week in a series of What Will Marissa Do? posts — including looking closely at her new hires, when and how Mayer will deal with inevitable layoff decisions facing the company, where the sale of Yahoo! Japan stands and, finally, what she’s cooking up for key Yahoo products.

But the focus has to fall first of all on search and advertising, the two arenas that Mayer has been studying most closely, according to numerous sources close to the situation.

That has included a recent meeting and numerous discussions with Microsoft CEO Steve Ballmer about improving Yahoo’s search advertising partnership, said sources at both companies.

That deal has been largely disappointing since it was struck under the regime of ousted CEO Carol Bartz several years ago.

Many reasons are given for the poor performance of the entire arrangement, including lack of improvement of cost per click and share growth for both parties. That means bid density and numbers of advertisers remain too low, especially compared to Google’s offering of access to a larger, more active and lucrative market.

Simply put, despite massive spending by Microsoft on search, users and advertisers get significantly better results overall with the search leader Google.

(You can read a great piece by Search Engine Land’s Danny Sullivan from last year, which exhaustively looked at the issues until then.)

The irony abounds that it’s up to Mayer to fix this problem of improving revenue per search with Ballmer, since she has been among the executives who have made Google the search behemoth it has become.

Her particular expertise has been on search experience for consumers, which is just the area that Yahoo desperately needs to improve after handing over technology duties to Microsoft.

That move was controversial at the time and some feel it was a big mistake. But, most also think there is no going back at this point, given the enormous cost of running a serious search enterprise.

Such an idea is still being raised inside Yahoo, although it seems more nostalgic than a realistic possibility, given the enormous price and, more importantly, the departure of the company’s core search engineers in recent years.

That doesn’t mean Yahoo under Mayer can’t be key to helping solve Microsoft’s search tech problems. She certainly knows the entire arena, which has already given Yahoo increased credibility among Microsoft’s search engineers.

“None of Yahoo’s many CEOs knew anything about search technology and that’s certainly not the case here with Mayer,” said one person close to the situation at Microsoft. “When she walks in, she instantly has status among the geeks as someone who knows what she’s talking about.”

It still may be a losing battle, due to Google’s overwhelming dominance, but if anyone at Yahoo can spot areas of even small improvement — which can yield big returns — it could be Mayer.

In addition, she can spearhead Yahoo’s own efforts to reverse — or perhaps simply stop — search market share declines via delivering a better consumer offering.

That’s still heavy lifting, no matter the exec, since both Microsoft’s Bing and Google are better equipped to win here, too.

“It hard to imagine we are going to slow down in any way,” said one former colleague of Mayer’s at Google to me recently in a rather ominous tone. “We’re only going to get more competitive.”

Pressure much?

And more: Mayer is under a time limit, since guaranteed payments Microsoft agreed to pay Yahoo for the shortfalls on what was promised will be running out next year. The pair has renegotiated that deal before, and it will likely have to do so again.

Of course, Mayer could try to walk and threaten to take Yahoo’s search business elsewhere, a move that former CEO Scott Thompson was mulling before his ouster.

That’s not a surprising ploy, except it is probably impossible to pull off, a fact acknowledged by top Yahoo execs.

“It might feel good to say we have options in search,” said one person close to the situation. “But that ship sailed years ago.”

Indeed, especially since Google is the only choice of possible alternate partners and such a move is rife with major obstacles.

There is the issue of the contract with Microsoft, which could lead to a potentially explosive legal struggle Yahoo can ill afford.

“They can try to get out of the deal,” said one high-ranking person at the software giant. “But that’s a lot easier threatened than done.”

And, there is the clear regulatory hairball any search hook-up between Google and Yahoo would lead to.

That’s happened before, which Mayer knows well since she was a top exec in Google’s business when it tried to partner with Yahoo as a way to prevent Microsoft’s hostile takeover bid for the company.

While times might have changed, Google is currently facing a likely battle with the Federal Trade Commission over its powerful search business, and trying to get Yahoo’s business now is a non-starter.

Thus, finally fixing the Microsoft partnership is key to Mayer’s success since it represents a little over one-third of revenue of Yahoo (see the chart below).

The bigger part of Yahoo’s business, as you can also see from the chart, has been display revenues. And that, too, has been a sorry tale of declines and ever more disappointing results.

A report by eMarketer on display market share had this depressing chart for Yahoo:

As is clear, the march downward for one-time leader Yahoo has been swift, and the prospects for the future are worse as Google and Facebook vie for leadership.

The reasons for this have been myriad, but Mayer has apparently decided that it’s been due in large part to the broken Yahoo ad tech platforms and their ever weaker performance.

As we have previously reported, she has determined that it’s now time to invest in improving them, both by funding internally and external acquisitions.

For that, she has formed a tight group of execs to scan the landscape for tasty and innovative treats for Yahoo to gobble up.

That includes: Scott Burke, SVP of Yahoo’s advertising and data platforms; Brian Silver, who runs the company’s Right Media Exchange; Xuhui Shao, a key engineering VP under Burke; and Mark Morrissey, the longtime tech exec who previously ran the company’s search business and was key to integrating the Microsoft search deal into place.

The cerebral Burke especially has been pushing ad platform improvement for a while and finally seems to have won the battle against detractors of the big and possibly grandiose plan by appealing to Mayer’s interest in not giving up.

Thus, the tabling of plans by Thompson, as well as interim CEO Ross Levinsohn, to outsource some of the automated parts of the display business to Google.

Those talks were very serious, as well as others to sell off Right Media, but they are done for now.

One major issue — the people in charge of the ad platform turnaround could also be seen (and most definitely are) as mired in Yahoo’s legacy of lackluster results and poor performance.

“It is kind of funny that the guys responsible for the decline now have the responsibility for fixing it,” said one source at Yahoo.

It’s a fair point to be made.

But that’s water under the bridge, apparently, since the group has been making the rounds, helped by Yahoo’s M&A execs, with a wide range of companies in many different ad tech area being considered (and some dismissed), including: Mediaocean, Turn, Criteo, PubMatic and Millennial Media.

Millennial is the most interesting, because it is a mobile ad play, where Yahoo is exactly nowhere (to be fair, less than nowhere) after years of botched efforts.

As with other companies, this is a critical arena for Yahoo, and yet one more that Mayer needs to focus on.

Lastly, Mayer has to make sure Yahoo’s premium display business remains strong. This is much more based on relationships with large advertisers than on major sponsorship and branding offerings, as well as creating consumer products and content that is appealing to marketers.

This area is now headed up by former Google exec Michael Barrett, who has publicly said he was staying put for now at Yahoo as its chief of revenue.

In fact, because he is in charge of all sales, he occupies the second slot under Mayer on Yahoo’s now strangely configured, punctuation-impaired and information-free management page.

But numerous sources inside and outside Yahoo said Barrett has also told many people that he is still not fully committed to staying in the role for the long haul.

If he eventually gets a lucrative exit package — something the new boss is not being very generous with overall, said sources — that will mean Mayer will need a high-profile and well-regarded ad exec to replace him; sources said Mayer has already begun reaching out to some candidates.

The pickings are slim, with only a few names on the list of those capable of taking on such a job. That includes: Demand Media’s Joanne Bradford, who was also a former top Yahoo exec; Microsoft’s Yusuf Mehdi; OWN’s Kathleen Kayse; MLB.com’s Bob Bowman; and any number of Google execs.

In that regard, as with all the other search and advertising overhaul efforts at Yahoo, it is a matter of attracting serious talent into the company going forward.

More on that — and more — to come.

It’s not so much about any shifts in sentiment or intention for spending among large companies, it’s just that the dollar is currently strong against other currencies, so U.S.-domiciled companies are in a weaker position when selling to customers in other countries. When accounting for that discrepancy, Gartner says it expects overall growth in spending of 2.5 percent, but on a constant currency basis, the digits would be transposed for a healthier 5.2 percent.

Spending by governments will likely contract, thanks in no small part to the austerity measures being put in place in the euro zone.

The highest rate of growth will be in the telecommunications equipment sector, which will grow by nearly 7 percent, Gartner says. A lot of that is thanks to mobile going to mobile, but also to speeding up networks. See the rest of the segments and their expected rates of growth in the table I screengrabbed from the press release, below:

Earlier this week, Gartner singled out IT spending in emerging economies, which it said will amount to an impressive trillion and change by itself. And last week we got a glance at the sentiment from 100 CIOs at large enterprises, courtesy of J.P. Morgan, indicating that growth is likely to tick upward this year. Up is good.

Whether women buy more tech products than men seems to be another facet of the subject emerging right now.

According to a new report from Parks Associates, more women than men are downloading movies and music, women do the majority of game-playing across some platforms, and women have higher “purchase intentions” than men do when it comes to some electronics.

In the 1986 movie “Ferris Bueller's Day Off,” Ferris got a computer, while Jeannie got a car.

Women are 40 percent more likely than men to play games on Facebook, represent the majority of Nintendo Wii players, and match men in terms of owning and playing Microsoft’s Xbox and Sony’s PS3, says the report. And women are 73 percent more likely than men to have watched a full-length TV show online in the past 30 days.

Parks Associates also says that women have higher purchase intentions than men do when it comes to buying popular devices like tablets, laptops and smartphones, though men’s interest surpassed women’s when it came to purchasing flat-screen LCD TVs.

Intent, of course, is different from pulling the trigger and pressing the e-commerce “buy” button.

This Nielsen study, meanwhile, refutes the idea that women aren’t likely to purchase advanced TVs.

And while the Parks Associates report says 88 percent of women purchased tech-related items last year, compared to 83 percent of the men surveyed, not all recent reports point to women as besting men in tech-buying.

Confused yet? You’re not alone.

Let’s look at this chronologically:

In 2008, men were estimated to spend $902 annually on consumer electronics, compared with the $558 women spent on tech each year.

By 2009, women were spending more on consumer electronics than men, according to the CEA. It says women accounted for $55 billion of the $96 billion spent on electronics gear that year.

But in 2010, as our WSJ colleague points out here, the average man reported spending $3 on consumer electronics for every $2 the average woman said she spent.

With all of the fluctuating data, perhaps comparing women to men when it comes to consumer tech spending isn’t the right way to look at it. It’s how much growth is occurring overall when it comes to women and consumer tech.

We’ve come a long way from this 2003 report on women being “comfortable” purchasing PCs and DVD hardware.

Despite the fact that women were still trailing men in terms of consumer electronics purchases in 2010 — women spent $631 on average, compared to men’s average annual spend of $969 — women still spent $73 more on tech products than they did in 2009. And that number is expected to continue to grow.

You’ve probably heard a lot about the emergence of female purchasing power. A lot of this may have to do with the current state of the economy and shifts within households: While men are recovering more quickly from the recession — regaining more than one out of three jobs lost, compared to women regaining about one in four — men have been hit harder over the past few years, hovering at a full percentage point higher in terms of unemployment. (Some of the recent employment gains for men may also be attributed to a disproportionate number of men working in the government sector who have been regaining their jobs.)

Many women consider themselves to be chief financial officers — of the home. According to a Harvard Business Review report from last year, U.S. women continue to say they control more than 70 percent of total consumer spending. Earlier reports indicate that this number could be even higher, but some researchers say the number is murky.

Another Nielsen study shows big differences between what female consumers in developed countries spend money on versus what females in emerging countries spend on: More than half of women in emerging countries focus on allocating household funds for their children’s education, compared to 16 percent of women in developed countries, who are more likely to spend on vacations and other items. And yet, in both developed and emerging countries, more than half of women surveyed say that purchases of computers, mobile phones and smartphones have changed their lives for the better.

Bottom line: Women are making more buying decisions, and that includes consumer technology products, though the growth to date seems incremental. And that doesn’t necessarily have to be measured against what men are buying — though marketers like to know these things.

We can only hope that increases in women’s tech purchasing also means that manufacturers and marketers are getting savvier about that age-old question — what do women want? — and that the answer isn’t necessarily hardware in stereotypically girlish hues.

According to a new survey from Parks Associates, an international market research firm, age will be the biggest factor in tech purchases made between Nov. 1 and Jan. 1. Young adult consumers — defined as those between 18 and 34 years of age — are more likely than others to purchase laptops, smartphones, tablets and LCD flat-panel displays this season. Also, households with children are much more likely to purchase laptops and LCD flat-panels.

Image courtesy of David Boyle/Flickr

Not surprisingly, tablets are the product of choice for big spenders, with higher-income households more likely to buy iPads and Android tablets. Some other interesting notes from the survey: Apple’s ecosystem of music, media and apps continues to drive interest in hardware, with 17 percent of consumers surveyed saying they’re looking to buy Mac laptops, trailing only Dell at 22 percent of intended purchases.

And in the smartphone category, there’s more bad news for BlackBerry: 83 percent of current iPhone users intend to buy an iPhone again this holiday season; 81 percent of Android OS users said the same, but only 41 percent percent of BlackBerry users intend to buy RIM’s iconic handheld device again this season.

The data, which comes from a survey of 2,000 U.S. heads of household and factors in purchases to date this year, as well as buying intentions, offers a somewhat optimistic outlook for consumer electronics this holiday season, with purchase intentions rebounding to near-2009 levels after a steep decline in 2010. Almost 50 percent of U.S. broadband-connected households intend to purchase a CE product from early November to Jan. 1, compared to 38 percent last year.

The fact that consumers began shopping earlier than usual this year may be giving retailers a longer window to move products, researchers note. Consumers also indicated that mobile shopping and mobile wallet options are increasingly appealing.

But it’s not all good news in gadgetland, as the economy continues to weigh on consumer confidence. Other data suggests that 2011 may still be a weaker than expected year for consumer electronics spending. Research firm IHS iSuppli recently reduced its consumer electronics growth outlook for the year, cutting expected revenue to $357.3 billion, a 1.5 percent rise from revenues in 2010, compared to its previous forecast of 6.4 percent growth for the year.

Parks Associates’ director of research John Barrett calls the slight boost in spending intentions this season the “keeping-it-home” phenomenon, noting that the people surveyed were more likely to make purchases for themselves this year, or for someone in their own household, rather than for gift-giving outside of the home. “The number of people buying something has gone up, but so have all the economic worries,” Barrett notes.

Readers, have you bought, or do you intend to buy, consumer electronics this holiday season?

The Hopkinton, Mass., company, which sells data-center products, has posted strong results of late as customers seek efficient ways to store and access mounting troves of documents and media. But worries have emerged that macroeconomic conditions are causing softness in tech spending.

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IBM, one of the first big tech companies to post quarter results, is seen as a barometer for investment in technology by governments and corporations. While IBM has benefited from a push toward higher-margin businesses, such as data-analysis services, worries have emerged that the weak global economy is having a negative impact on tech spending, particularly by governments.

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Among the hot and hyped Web 2.0 scene, not many would pick out 13-year-old digital promotions site, Coupons.com.

But, on the heels of a recent $200 million funding — which valued the quiet Mountain View, Calif., company at $1 billion — and a surging online discounting market, it has nabbed another $30 million from Greylock Partners.

Greylock has already invested half that amount, via a secondary market transaction, and is Coupons.com’s first venture investor. Its previous funders have been institutional investors.

“Coupons.com have been quietly building all the key infrastructure in this area,” said Greylock’s Reid Hoffman. “We think they are poised for the massive shift that is coming.”

The new funds, said its CEO and co-founder Steven Boal, will be used for a variety of things, including an aggressive mobile and social push for the longtime site.

“We are now focusing on hypergrowth,” said Boal, who noted that coupon clipping is perhaps the original social media. “Saving is kind of hip these days, even if we have been around for a long time with this exact focus.”

Coupons.com had already moved in the mobile/social direction with the 2009 acquisition of Grocery iQ, a mobile app that lets users manage shopping lists and discounts on phones.

There will be more to come, said Boal, who said the growth of the category is inevitable as consumers use these devices to manage their spending habits.

Coupons.com will also use the funds to expand its staff from 288 employees now to more than 450 by the end of the year, operating in about 13 countries. While Coupons.com has been profitable on a cash-flow basis, all the new initiatives will be costly.

And, while that kind of expansion could remind you of the explosive daily deals sector — and it is easy to put Coupons.com in the same highly competitive arena as Groupon — the company operates more as a platform and a white-label provider of discounting services to manufacturers and retailers, especially supermarkets and chain stores.

In fact, Coupons.com provides a lot of such services for them, garnering $100 million in revenue this year, up from $60 million last year and $40 million the year before. Much of that money is made when a customer uses its site or sites it powers and downloads a coupon for redemption.

One area of promising growth, said Boal, is managing discounts on Facebook’s social networking site, which is increasingly being used by consumer goods companies to test promotions and increase loyalty.

“It’s a really interesting area as product companies can be really nimble in managing their promotions,” he said. “And the ability to really drill down on the response of a certain sector of consumer is very powerful.”

It goes without saying that newspapers that previously dominated this industry have been on the wane.

The massive funding also sets up Coupons.com for a possible 2012 IPO, especially given its dominance — it serves nine out of 10 big grocery chains, four out of four pharmacy giants and such — in the digital couponing sector.

Presumably, there would be no discounts for that stock.

Here’s the official press release:

COUPONS.COM ANNOUNCES GREYLOCK PARTNERS INVESTMENT

Company’s Rapid Growth Including Mobile and Social Couponing Solutions to Benefit from Greylock’s Expertise

Mountain View, Calif. — October 3, 2011 — Coupons.com Incorporated, the recognized leader in digital coupons, including online printable, social, mobile and loyalty card promotions, today announced an investment by Greylock Partners. Coupons.com, which recently raised $200 million from institutional investors, is transforming the multi-billion dollar coupon industry and accelerating the shift from the newspaper to digital. The investment, a secondary market transaction, will enable the company to tap into Greylock’s expertise as it continues to produce market-transforming couponing solutions, including its mobile- and social-based products and services.

“We are very excited to work with Reid Hoffman and James Slavet and the entire Greylock team,” said Steven Boal, CEO of Coupons.com. “Greylock’s expertise and relationships will prove invaluable as we continue connecting brands with consumers via money-saving offers at every touch-point across the digital landscape — including web, social and mobile — and along the consumer’s entire path to purchase.”

“We’re very pleased with our investment in Coupons.com and are excited about working with the team as they continue to build a substantial, market-defining company,” said Reid Hoffman, Partner at Greylock Partners. “Coupons.com is almost single handedly transforming the multi-billion dollar coupon industry by ushering the newspaper-dominated business to digital. The market opportunity the company faces is immense, and we look forward to contributing in any way to their continued success, particularly in the context of social and mobile solutions.”

Coupons.com powers the vast majority of coupons printed online via a network of tens of thousands of sites in addition to their flagship site, Coupons.com, which is the 39th most trafficked site in the country. Coupons.com Incorporated is also the go-to resource for manufacturers wanting to coupon-enable their digital marketing initiatives, and virtually every major consumer packaged goods manufacturer resides on the company’s client roster. The company is aggressively building its team, expanding its full time staff from 288 employees in June to more than 450 expected by the end of the year, a growth of over 50 percent during the six-month period.

In addition to capturing a growing share of the multi-billion dollar newspaper-dominated coupon industry, Coupons.com is also expanding the couponing market by lowering the barriers to entry for companies to offer coupons, enabling smaller manufacturers — which could not place offers in the newspaper insert because of budget requirements or category exclusivity restrictions — to utilize coupons to engage with consumers. In addition, Coupons.com attracts a new demographic of coupon users, who engage with new couponing methods like digital, social and mobile coupons, but typically would not engage with traditional paper coupons.

The comments from the Sunnyvale, Calif., company raised concern about second-half spending on networking products and weighed on the sector’s stocks Wednesday. Industry giant Cisco Systems Inc., which has talked about the economy’s “mixed signals” and air pockets for almost a year, fell 3.7 percent.

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That might seem a piddling increase, but it’s actually quite substantial–the difference between $3.4 trillion and $3.6 trillion. Said Gartner’s Richard Gordon, “Absent the addition of media tablets, the forecast would have slightly declined in constant-dollar terms; however, with their addition, there’s virtually no change in the underlying forecast growth at the level of overall IT.”

Gartner also raised its 2011 IT hardware spending estimates, lifting them to 9.5 percent from 7.5 percent. And once again, tablets were largely the reason. Global spending on the devices is expected to reach $29.4 billion this year, up from $9.6 billion last year. And that growth trend is likely to continue for the foreseeable future. Gartner expects the tablet market to have an average growth rate of 52 percent through 2015.

One indicator is the sales of prepaid gaming cards that are purchased at Walmart, Target, 7-11 and many other retailers.

While the game cards are typically purchased in person, they can be used for a range of things, from buying virtual goods within FarmVille  to buying a game that’s digitally delivered over the internet via Xbox Live.

Today, NPD released industry sales figures for February today, reporting that prepaid game cards now account for 22 percent of all accessories sold and that sales have increased 52 percent compared to a year-ago.

Meanwhile, in the same time period console software sales only increased by 2 percent.

NPD’s Analyst Anita Frazier said the jump in game card sales points to the increased importance of digitally distributed content sales within the games industry, and that last month marked the best February on record for accessory sales.

The top-selling item was the Xbox 360 1,600 points card.

Overall, NPD reported that physical retail channel in the U.S. generated video game hardware sales in February of $467 million, increasing 10 percent. Video game software, including console and portable totaled $601.4 million, dropping 5 percent, and video game accessories totaled $257 million, increasing 22 percent.

The estimates were released today by BIA/Kelsey, but seem conservative given some of the official figures known about the largest players in the space.

For instance, Groupon turned down a $6 billion offer from Google late last year, and then raised nearly $1 billion in venture capital.

Groupon also recently disclosed in an internal memo that it saw its revenue surge to $760 million last year from $33 million the previous year (although more than a third of its 2010 sales came from outside the U.S.).

But that’s only Groupon.

The No. 2 player in the space, LivingSocial, which raised $175 million from Amazon.com, said it was booking revenues of more than $1 million a day and is projected to record well over $500 million in revenue in 2011.

Both companies are well-positioned with nearly 200 other players trying to get into the space, and as of March 1, deals were being offered in 178 cities, reaching 102 million people, according to the research firm, which is hosting an event on the topic later this month in Boston.

The daily deal providers operate by building large local sales forces that negotiate deals on services and products at roughly 50 percent off. Customers then purchase the vouchers in advance, and the companies keep about half of the revenues from the sale.

BIA/Kelsey said its revenue expectations factor in that the novelty of these group-buying discounts will fade and e-mail open rates will fall as time passes. In its most optimistic scenario, U.S. revenues could hit as much as $6.1 billion in 2015.

This time, unlike the one that aired right before the Super Bowl kick-off, LivingSocial is focusing more on the deals themselves.

In the Super Bowl, it used the tagline “LivingSocial changed my life,” and had a strange storyline that featured a gruff-looking man who turns into a cross-dresser.

The two new spots are a little more on point.

For example, in “We’ll set the stage, you play the part,” a man and a women perform a number of quick costume changes as they transition through a number of scenes, ranging from a restaurant (55 percent off fine dining), to a hair salon (72 percent off) to a dance floor (where they save 62 percent on tango lessons). For the finale, the curtain closes and the announcer says, “Sign up for free to get daily deals at LivingSocial.com.”

The Super Bowl commercials for both LivingSocial and Groupon demonstrated how difficult it is to portray this somewhat new concept of offering a voucher for a heavily discounted service.

Even so, LivingSocial’s commercial might be a little misleading since it uses “free” in the tagline. As any regular participant of LivingSocial or Groupon would know, you have to pay for the voucher in advance if you want the deal. (But it may not be so obvious to a newbie).

While LivingSocial’s Super Bowl ad fell flat, Groupon fell on even tougher luck with its series of three advertisements, which viewers revolted against and called insensitive.

The one that got the most feedback was a 30-second clip featuring Timothy Hutton that said while Tibetan culture is in jeopardy, “they still whip up an amazing fish curry, and since 200 of us bought at Groupon.com, we’re each getting $30 worth of Tibetan food for just $15.”

Groupon initially offered to retract that one, but ended up having to apologize and yank all three. The company tried explaining that it was raising money for those causes, but the connection was lost on viewers.

LivingSocial’s new commercial can be found on the company’s Web site. It’s also embedded below. Mashable reports that the new campaign, which will kick off Sunday, was created by the Martin Agency.

The move is significant because it puts Square’s new rates below the industry standard for small merchants, who typically do less than $1,000 a month in business.

Square is taking the high-risk bet that cutting the rate will fuel its gain in market share as the race heats up in the mobile payments space.

“In the short-term, we will sacrifice revenue, but we believe it is worth the cost because it is the right decision for users and by simplifying payments it will help grow the entire market,” a spokeswoman explained.

Square’s rates will fall to a flat fee of 2.75 percent per transaction instead of charging 2.75 percent plus an additional 15 cents. (The rate for when a credit card number is keyed in, rather than swiped, will remain the same at 3.5 percent plus 15 cents.)

Square’s new rates will resonate well with merchants.

It means that for a $100 purchase, they will now pay $2.75, rather than $2.90. The impact will be much greater for smaller purchases, like a $3 cup of coffee that will now cost the merchant 8 cents, down from previous 23 cents.

There’s also a benefit when a customer visits a coffee shop twice in one day, for example.

Under the old rates, the merchant would have to pay 30 cents for a customer who visits twice a day in transaction fees alone. But under the new rates that goes away and the merchant will only be charged a percentage of both transactions.

Square, which recently raised $27.5 million in venture capital, is trying to gain a foothold in a market that remains inaccessible to many small vendors, who aren’t willing to spend thousands on a point of sales machine.

Instead, it offers merchants the option of plugging a small dongle into a smartphone, such as an iPhone, iPad or Android device to accept payments.

In the mobile payments space, Square competes directly with services being built by mammoth financial incumbents, as well as others like Intuit, PayPal and the wireless carriers.

Intuit, which also provides an accessory for smartphones to take payments, charges 2.7 percent plus 15 cents with no monthly service plan. A high-volume account, which charges more than $1,000, costs $12.95 a month, but drops the rate to 1.7 percent plus 30 cents.

Will Intuit drop its prices to compete with Square?

Possibly. After Square made its card readers free, Intuit followed suit, and said last week that after a short trial period, it was committed to keeping them free permanently.

To be sure, the fees can be baffling to a small business owner.

In a survey, conducted by the Merchant Bill of Rights, it found that only 26 percent of participants believe they are being treated fairly by the debit/credit/prepaid card processing industry, and only 21 percent understand the rates, fees and surcharges they pay.

Still, Square will clearly be taking a financial hit.

It will have to continue to pay the fees being demanded by credit card companies like Visa and MasterCard. But the company said it continues to negotiate these rates with providers.

There is some hope a compromise can be reached.

Recently, Visa wrote about Square in a blog post, referencing a recent interview we did with Square’s CEO Jack Dorsey, who is also the co-founder of Twitter. In the post, Visa said Square provides an easy payment solution for small merchants. It wrote: “We are committed to working with innovative companies, like Square and others, as the world shifts to electronic payments.”

The San Jose, Calif.-based company is announcing this morning that it has finalized a partnership with Sprint to enable its customers to charge small items to their Sprint bills.

T-Mobile USA is the only one of the majority carriers left without an agreement, but you can safely assume one is coming soon.

BilltoMobile, which is majority owned by Korean-based Danal, already inked deals with Verizon Wireless in May, and AT&T in October.

In some circumstances, other other mobile-payment partners, including Boku and Zong, are piggy-backing on BilltoMobile’s relationships, so they can also enable mobile payments.

To be technical, the deal with Sprint is a Direct Mobile Billing Gateway Service Provider agreement. It essentially means that it has a direct line into the carrier’s billing systems, so that small purchases will be charged to the mobile bill.

The deal does not extend beyond digital goods to more expensive physical goods like books from Amazon.com.

Through BilltoMobile’s direct relationships with carriers, it has been able to significantly lower fees to make charging items to the phone bill feasible. Those fees have fallen significantly for digital items, which have high margins, but are often not low enough to make charging physical items reasonable. So, currently, the rates are appropriate for charging virtual good inside a Facebook game, or maybe even a song or purchase of a higher level in a video game.

As we previously reported, Zong told us that some physical goods with higher margins will be enabled sooner than you think.

BilltoMobile said Sprint’s implementation is expected in the coming months.

The company now reaches more than 240 million wireless subscribers in the U.S. across mutliple carriers, including Sprint, AT&T and Verizon Wireless.

To make payments, customers don’t have to register, set up or download anything. Purchases are completed in seconds using a two-step authentication process.

PayPal is also going after this space, however, this year it will also be focusing on rolling out an in-store solution to allow consumers to use their PayPal account at the register.

The eBay-owned company announced the pilots last week at its analyst day, and we followed up with PayPal’s president, Scott Thompson, to find out what the company has in store.

Thompson said the program will target the “everyday spend category,” meaning large merchants that specialize in groceries, gas and other broad categories.

To be sure, PayPal, which is on track to become bigger than eBay over the next few years, is quickly expanding as it sees opportunities in mobile and other alternative payment options.

So far, it has been more focused on becoming an online and mobile payment platform for virtual and digital goods, including the ability for customers to pay for small and inexpensive items without leaving an app or Web site.

In terms of physical payments, however, PayPal’s experiments have consisted of a partnership with Bling Nation that allows users to adhere a sticker to their mobile phone to pay for in-store items using a PayPal account.

Thompson said the partnership was a good test, but it was mostly focused on small merchants and wasn’t going to get mass adoption.

For the trials this year, Thompson wouldn’t disclose what technology the company will be using, but he promises it won’t require swapping out expensive point-of-sale machines.

“Anytime there’s a real-time network and it is online, it’s addressable by us,” he said. “We’ll address it with software.”

He said PayPal is technology-agnostic, which is perfect for today’s world of different views and different standards. “If there were common standards, there would be no need for PayPal. With all of the competing standards, and our ability to run above them, we have the opportunity to win over the next three to five years.”

Thompson said the solution won’t require issuing plastic cards to customers, which is inherently not secure because they can be lost, or overcharged. “The future is pushing money to the merchant vs. the merchant pulling money from your bank account.”

The pilots will include using a couple of different techniques to find out what customers like.

Any way you slice it, the opportunity in front of it is enormous (and uncertain).

In 2010, PayPal’s mobile revenues totaled $750 million, and is forecasting for the segment to grow tenfold over the next three years. He says if PayPal is able to get just one percent of retail sales, it will be able to double the size of its business.

PayPal is not the only one fighting to be at the checkout. Other payment providers, such as Visa and MasterCard will be there, along with other start-ups, such as ISIS, the wireless-carrier-led initiative in the U.S.

Don’t confuse this with how companies, like Zong and Boku, are trying to enable consumers to charge some higher-margin physical goods to their carrier bill. That goes after only a small segment of payments, whereas PayPal is aiming for the everyday stuff.

While paying by mobile phone has been around for years–with consumers charging ringtones and other mobile content to their bill–it’s been only in the past few months that it has become viable for other expenses.

In fact, over the past couple of weeks, a substantial milestone was reached and went almost completely unnoticed, said David Marcus, the CEO of Zong, a mobile payments provider.

He said Facebook stopped adding a surcharge when customers buy Facebook Credits via the mobile phone. And it’s not just Facebook–other companies have been following suit when it comes to digital and virtual goods.

What’s more, there’s an even bigger change coming very shortly.

Carriers will lower the amount it charges even more for physical goods.

It won’t be enough for everyday items that have extremely low margins, like groceries or gas, but it will open up mobile payments to e-commerce. Most notably, Marcus said, consumers of high-margin items, like group-buying vouchers from Groupon and LivingSocial, will be able to participate.

The process makes sense. Users should be able to be notified about offers via the phone, purchase the deals on the phone and then walk into a restaurant or bar to redeem them using their mobile phone–instead of logging on to a Web site from a computer and printing out paper vouchers.

“Our sales force is actively working on it right now, and by the end of the second quarter, we’ll be processing physical payments,” he said.

Zong is not the only one in this red-hot space.

In fact, it’s chock-full of competitors, including PayPal, Boku, mopay and BilltoMobile. They all want to make paying for virtual and digital goods on the phone as seamless as possible.

Additionally, another class of company is going about it in a whole other way: Using your phone to charge payments to your credit card at the grocery store, gas station or other location. Usually this entails waving the phone in front of a point-of-sales device using RFID or near-field communications.

The mobile-payment providers are not in that space, but several incumbents are, including Visa, MasterCard, PayPal and even the carriers, through a joint venture called ISIS. Another company, Square, is coming up with a way to replace the point of sales machine with a cellphone.

But Marcus said the really exciting stuff is right around the corner.

And, right now, most of the momentum is from the carriers dropping the revenue splits to closer to 10 percent, from 40 percent more than a year ago. “The carriers won’t go below 10 percent for digital or virtual goods, but they will lower their rates for physical,” he said.

Removing these sky-high surcharges has sent payment volumes skyrocketing.

In fact, after Facebook and others were able to lower the rates, Zong got a nice lift.

Marcus said across their its network, its daily payments volume jumped by more than 50 percent in the first week of January, compared with the same week last December.

Marcus keeps track of the company’s payments volume from a flat screen on the wall of the company’s Menlo Park, Calif., offices. When countries turn red, it’s a good sign.

He expects more good signs in the future as it prepares for another bump from physical goods coming in the next few weeks.

The decision was announced on the company’s blog and included an apology from the company’s CEO Andrew Mason: “We hate that we offended people, and we’re very sorry that we did–it’s the last thing we wanted.”

The company had previously made the decision to discontinue the spot that aired during the game’s third quarter after complaints lit up the company’s Facebook and Twitter accounts.

The ad featured Timothy Hutton, who talks about how the Tibetan culture is in jeopardy. ”But they still whip up an amazing fish curry, and since 200 of us bought at Groupon.com, we’re each getting $30 worth of Tibetan food for just $15…in Chicago.” In other commercials, Cuba Gooding Jr. saves half on a whale-watching expedition, and Elizabeth Hurley pays half for a bikini wax after talking about deforestation in Brazil.

Viewers were offended, believing that Groupon was exploiting, and making light of, three serious issues.

The ads weren’t entirely a stretch for the Chicago-based company, which considers itself quirky and injects humor into everything it does–from corporate blog posts to the deal of the day.

Recently, it appointed a new high-level executive, and in the announcement also mentioned that it had hired a guy in charge of stocking Diet Coke and Vitamin Water drinks in its four-story Chicago headquarters. The aspiring actor gave out his email address, in case anyone could help him get some gigs. No offense to Jason Harinstein, the SVP of corporate development, who left his job at Google for the company, right?

So, maybe Groupon’s decision to use humor in its big coming-out party–an introduction to every American who didn’t already know the company and what it is all about–was lost in translation.

“Five days have passed since the Super Bowl, and one thing is clear–our ads offended a lot of people. Tuesday I posted an explanation, but as many of you have pointed out, if an ad requires an explanation, that means it didn’t work,” Mason concluded.

A few ads may still run today, but after that they will be gone for good. “I personally take responsibility; although we worked with a professional ad agency, in the end, it was my decision,” he continued.

Groupon still expects to raise about $500,000 for the charities that were associated with each commercial. But the message that Groupon also had good intentions was lost in the TV ads when the charities weren’t ever mentioned.

There’s a chance that some of its 50 million subscribers were so upset they canceled their daily emails, but there’s likely an equal chance that the conversation–as negative as it was–provided additional lift and awareness to the brand.

Mason said, however, that wasn’t the intention. “We certainly aren’t trying to be the kind of company that builds its brand on creating controversy–we think the quality of our product is a much stronger message.”

Experian Hitwise reports that the day after the Super Bowl, Groupon’s Web site did receive a huge surge, with traffic jumping to 1.145 million visits, a 78 percent jump from just 641,000 a week earlier.

We asked the question before the Super Bowl whether Groupon’s appearance would be a touchdown or a fumble.

Having to pull your commercials not even a week later probably qualifies at least as a penalty.

But don’t be fooled, Groupon can still come back and win the game.

Today, he says it’s all “new eBay.”

At the company’s analyst meeting at its headquarters, the company demonstrated the major changes made over the past couple of years and laid out plans for how local, mobile and social will lead the next wave of commerce.

In the afternoon, Bob Swan, eBay’s CFO, took the stage to give the financial rundown that everyone had been waiting for since the morning.

Swan highlighted PayPal’s growth trajectory by saying that it expects to double revenues over the next three years to between $6 billion and $7 billion, compared with $3.4 billion in 2010.

He also talked up how mobile was gaining speed by saying that PayPal mobile transactions were estimated to double to $2 billion in total payment volume, and that mobile on marketplaces will double to $4 billion in gross merchandise volume.

Meanwhile, when looking at the company’s gross merchandise volume, he sees the business increasing from $60 billion in 2010 to $75 billion in 2013. And, to support the strength of the business, the company anticipates generating $7.5 to $8 billion in free cash flow by 2013.

Swan wants to stress that these growth rates are being driven from the company’s core businesses, and not from the more innovative stuff eBay is working on in local, mobile and social. “We are in a  different state than we were in March 2009, where the crystal ball was murky and full of potholes. Now the crystal ball is full of opportunities. We have unmatched advantages that position us to win.”

That’s possible because of the improvements the company has been making over the past two years.

“We’ve made significant and necessary changes necessary for growth. Two years ago, search was optimized for auctions and suffered. Two years from now, search will be a competitive advantage for eBay,” said Mark Carges,” eBay’s CTO of marketplaces. “We’ve rolled out many tailored experiences and selling on eBay will be vastly simplified.”

To illustrate the change, Carges showed how there’s no more irreverent banner ads on the search results page, and instead of returning up to 19 paid results, it gives shoppers the “best matches” and cuts the time in half that it takes to return results.

The company also launched the buyer protection program, which will return the price of the item and the cost of shipping to customers unhappy with purchases.

Christopher Payne, VP of eBay marketplaces North America, said the company will start to increase marketing spend on these improvements to drive awareness: “We’ve been intentionally quiet as we fixed fundamentals, but starting in the second half, we’ll start marketing this new experience.”

At lunch, analysts were so eager to talk to Donahoe he wasn’t even able to get to his seat. They crowded around him in the lobby to grill him on what impact Facebook, Apple and Google were going to have on the company’s payments aspirations.

Donahoe wasn’t phased, saying that PayPal is technology agnostic. He will support BlackBerry, Google’s Android, Apple’s iPhone — and all of the iterations they produce from phones to tablets. What’s more, he says, the company is building the tools and technology for merchants to keep up in what can be a daunting world.

Analysts appear impressed with the improvements. Today, the company’s shares traded up nearly 8 percent, or $2.57, to $34.53, coming close to marking a 52-week high.

A lot has changed in that time.

PayPal has become an increasingly important part of eBay’s business, comprising 37.5 percent of its overall revenues in 2010. It is also the fastest-growing division, with revenues jumping 23 percent compared with 2009′s.

And, since eBay’s last analyst day almost two years ago, the company’s stock has tripled.

Still, expect feelings to be mixed.

In the past couple of years, eBay has been working hard to improve its site, making it easier for merchants to sell and easier for buyers to find what they are looking for. But eBay’s traditional marketplaces division grew by only eight percent last year and faces steep competition from Amazon and next-generation shopping-site offerings ranging from Groupon’s daily deals to Gilt Groupe’s flash sales.

Another growth area is mobile–both for PayPal as it expands into mobile payments, and also for commerce opportunities.

EBay has been quick to acquire companies to fill these gaps, purchasing RedLaser, which is a mobile application for comparing prices; Critical Path, which was a small app developer; and Milo, which keeps a database of inventory in local stores. EBay still has around $7 billion in cash on hand to make a much more substantial acquisition.

Because PayPal isn’t a home run, either.

Many companies are trying to solve different parts of the mobile payments puzzle, including Zong, Boku and BilltoMobile–for digital and virtual goods–and Square, which is turning mobile phones into point-of-sales device. Not to mention Apple, Google and Amazon, which are all working on alternate payment services, as well.

Making matters worse, PayPal’s Osama Bedier–who was VP of platform, overseeing PayPal’s global payments platform, including mobile–recently resigned to take a job across town at Google.

The event kicks off at 8 am tomorrow (Thursday) and will include an opening keynote from Donahoe, who will address financial objectives and the company’s vision for the future of shopping and payments.

The event will also be heavy on PayPal speakers, including Scott Thompson, PayPal’s president; Ed Eger, PayPal’s SVP and general manager; and Sam Shrauger, VP of global product and experience–among many others.

Follow our liveblog here on eMoney, or the webcast on eBay’s investor relations page.

However, exactly how it will be accomplished, no one quite knows.

WildTangent believes it has found the winning formula, and, surprisingly, it goes against what others, like social gaming leader Zynga, are already doing in the space.

Over the past 12 years, the Redmond, Wash.-based company has toyed with all sorts of business models.

But the picture started coming into focus a couple of years ago, when WildTangent made the decision to stop developing games itself in favor of helping other PC game makers distribute and monetize their games. Six months ago, it expanded from working on only PC games to social games, too.

In an interview, Mike Peronto, WildTangent’s president and CEO, and Dave
Madden, EVP of sales, marketing and business development, said social gaming has quickly become the company’s fastest growing segment, with revenues tripling year-over-year.

WildTangent is best known for its consumer-facing game platform, which comes preloaded on 85 percent of PCs sold today. The platform, which is also accessible online, attracts 20 million monthly active users and is monetized through a combination of players paying for coins at 25 cents a piece, subscriptions and ads.

Madden said the problem it is now focused on solving is how to monetize social games when only two to three percent of players are willing to pay for virtual goods.

That means advertising is inevitable, but it’s still too early to tell how it will play out.

Last month, Zynga told us it was focused on product placements within games, where virtual goods are sponsored by brands, like blimps in FarmVille and branded cars in Mafia Wars.

But Madden argues that approach doesn’t scale. “We know it doesn’t scale because we’ve tried to build a business doing it,” he said.

“Product placement is appropriate in some media, and games are no different, but it’s not supported well by agencies, and we are trying to chip away at the broadcast budgets. There has to be metrics for them to compare it to other mediums….It’s difficult to measure a sign or blimp.”

Today, WildTangent works with some of the largest brands, including PG&E, Unilever, automobile makers and insurance companies. It also works with some of the biggest social games companies, like Playdom, Digital Chocolate, Crowdstar and others.

While WildTangent does sometimes work with brands on product placements–like a Scoop Away litter box in the Happy Pets game on Facebook–generally, it requires players to watch a short video, or offers the option of playing a very simple game.

So far, Madden and Peronto have been happy with the results. Of all of its social advertising campaigns, WildTangent has been averaging a 10 percent click-through rate.

WildTangent, which has 130 employees, hit profitability two years ago and has been in the black ever since.

Next up is integrating social games into its platform so it can have access to their vast distribution network, and then it will bring what it has learned from advertising on social networks to mobile phones.

Here’s a video of Madden and Peronto talking to eMoney about the opportunities for advertising in social games:

]]> http://allthingsd.com/20110209/wildtangent-not-playing-around-when-it-comes-to-advertising-in-social-games-video/feed/ 1 http://allthingsd.com/20110209/has-cisco-escaped-the-air-pockets/ http://allthingsd.com/20110209/has-cisco-escaped-the-air-pockets/#comments Wed, 09 Feb 2011 15:35:41 +0000 Arik Hesseldahl http://newenterprise.allthingsd.com/?p=2974 The last time the networking giant Cisco System reported quarterly earnings, CEO John Chambers used the phrase “air pockets” to describe the surprise sour turn in its guidance that showed sales would grow only between 3 and 5 percent, way below the 13 percent that analysts had expected. Shares in Cisco fell like a rock, from $24.49 on Nov. 10 to $19.07 on Dec. 3, and have leveled off near $22 a share in recent days.

Today’s the day we find out whether Cisco has successfully navigated the turbulence, and how bad the air pockets truly were. So far, the indications suggest that Cisco is starting to fly clear of the trouble. The consensus of analysts surveyed by Thomson Financial calls for Cisco to report per-share earnings of 35 cents on sales of $10.24 billion.

Barclays Capital analyst Jeff Kvaal wrote in a research note issued Monday that Cisco’s end markets look healthy. Telecom carriers and Internet service providers are spending, and you see that reflected in reports from Juniper, which show sales to service providers up 24 percent, and in AT&T’s optimistic capital spending outlook. Meanwhile, growth in enterprise spending is holding steady as companies improve their networks. And in the end, Cisco’s guidance for sales to grow 3 to 5 percent may prove a tad conservative, meaning those air pockets may not have been as entirely bad as originally thought.

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