That brings Simulmedia’s total raise to some $27 million over three years. That money is going into Morgan’s take on “targeted” TV advertising, which promises to merge Web-style targeting with traditional TV ads.

There are lots of people chasing targeted TV ads, and to date none of them have gotten very far. Canoe Ventures, a consortium led by Comcast, Time Warner Cable and the rest of the cable industry, just imploded earlier this year.

The TV guys will probably get there, someday. But in the meantime, Morgan is trying a slightly less ambitious version that he says can work now.

Rather than trying to deliver customized ads to every TV viewer based on their individual set-top-box data, Simulmedia uses some set-top-box data (which it gets from providers like DirecTV, TiVo and AT&T) to try to find undervalued ad inventory. So, in theory, it can help an advertiser find a cheaper way to get in front of a specific audience it wants to reach.

If that sounds a bit like Web advertising, that makes sense. Morgan built two pioneering Internet ad companies — 24/7 Real Media and Tacoda, which were acquired by WPP and AOL — before tackling TV.

Simulmedia says it has run 200 campaigns for 24 brands since it pivoted to its current model (it had originally tried using the same technology to target TV advertising for TV programming), and Morgan says he is “very close to profitability.” This is the second time Morgan has funded the company with an inside round: The same group of investors put in about $9 million a year ago.

Except that’s not true at all: The Web offers advertisers a slew of creepily effective targeting mechanisms, but they only work for some stuff, some of the time. An ad on the Web may do a better job of reaching its audience than, say, a magazine ad. But that doesn’t mean it does a good job.

Example: Here’s data from Nielsen, via Bernstein analyst Carlos Kirjner, which tracks the accuracy of a recent ad campaign by “a manufacturer of women’s personal care products.” It was supposed to target women between the ages of 25 and 54. But most often it didn’t — the most accurate publisher got the ads in front of the right people 40 percent of the time. Overall, the campaign only hit the target 25 percent of the time. And nearly half the time — 47 percent — the ads got served to men.

Kirjner uses the anecdote to bolster his bullish case for Facebook, which he thinks can do a much better job of targeting than regular sites can, because it knows so much more about its 800 million-plus users.

Maybe. I’ve noticed that Facebook has stopped sending me ads that offer to get me a job at the CIA, or to meet Christian singles in my area, so that’s good. Right now, it’s showing me a banner for the McDonald’s Angus Deluxe, which is more accurate, since I do like food. But not that food.

The Web’s sorta-close, sorta-not targeting problem hasn’t hampered Google, obviously. But that’s because Google’s search ads respond directly to your input and your intent. Now, Facebook, Google and everyone else are going after the branded ads that dominate TV, where the really big money lives. And if they want to get bigger bites of that, they’re going to have to get more accurate.

The lawmakers — Edward J. Markey (D., Mass.), Joe Barton (R., Texas) and Cliff Stearns (R., Fla.) 00 want to know if Google’s behavior “constitutes a violation” of a privacy settlement Google and the Federal Trade Commission signed last year. Breaches of the settlement could bring fines of as much as $16,000 per violation per day.

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Clearspring, the social-sharing company — in an effort to increase its business as a marketing analytics player — has acquired XGraph, a data science company.

Clearspring declined to provide the price it paid for XGraph, but said the deal was in cash and stock. The start-up raised $3.75 million just over a year ago.

The combined company has 85 employees — 70 at Clearspring and 15 at XGraph.

Execs at the the McLean, Va.-based company said the purchase will increase value to advertisers and publishers via audience targeting and data science. Clearspring is best known by consumers for its AddThis social-sharing tool, which provides a lot of detailed user data.

Clearspring raised $20 million in funding in May. At the time, the company said it planned to spend its new cash on acquisitions that leveraged data and built audiences more efficiently.

The New York-based XGraph focuses on modeling and monetizing the Web’s social graph.

“We get a lot of data points every day and making sense of them is something we have already been doing, but XGraph fits the bill to go even further in the multi-graph use of data,” said Clearspring CEO Ramsey McGrory. “It puts us in a position to be the market leader for the application of data.”

Key Compton, CEO and co-founder of the three-year-old XGraph, noted that the industry has become data-driven in new ways.

“People are connected to each other via social connections in a multi-graph platform,” said Compton. “I think there are some really interesting opportunities to access the data.”

Here’s the official press release for the deal:

Clearspring Acquires XGraph to Create Largest Multi-Graph on the Open Web

Company accelerates growth by deepening data team and technology

McLean, VA and New York. NY. — November 1, 2011 – Clearspring, provider of the largest social sharing and analytics platform, AddThis, announced today it has acquired XGraph, Inc., a leading data science company focused on modeling and monetizing the web-wide social graph. Clearspring’s massive reach and proprietary real-time data processing capability, coupled with XGraph’s audience technology, create the largest multi-graph platform on the web — mapping 1.2 billion user’s connections by brand affiliation, intent and social behavior.

The investment in XGraph’s data science capabilities marks another step on Clearspring’s rapid growth trajectory. XGraph’s team has deep data science expertise with applied backgrounds in advertising, sociology, mathematics and computer science. Their unique technology dynamically organizes users by shared connections and interests. XGraph’s team and platform will drive Clearspring’s existing efforts with publishers, advertisers and agencies forward while also setting the stage for new innovation.

“Clearspring is at the epicenter of two major shifts online — the web becoming social and personal, and advertising becoming data-driven and accountable. The common thread in both changes is data. To compete in this new world, companies will not only need the ability to access and process big data, but also have the ability to activate that data to create value for consumers, publishers and advertisers,” said Ramsey McGrory, Clearspring’s new Chief Executive. “The combined company has the people, technology and data to enable our clients to stay at the forefront of these changes. 2012 will be a breakout year for Clearspring.”

For advertisers, agencies and trading desks, Clearspring will immediately be able to provide the largest multi-graph audience targeting capabilities available on the open web. By using this technology to identify a brand’s core audiences and finding millions of other connected and like-minded people online, the company can now drive more efficient spending and increased campaign performance. Clearspring also plans to leverage this new capability to deliver publishers unique audience insights, monetization capabilities and actionable data products in the coming year.

“Most companies only capture one dimension of how we’re all connected, whether it be our friends or people we share with — a single graph approach. XGraph not only models these social connections, but also multiple other types of connections such as brand affiliations, intent and more — a multi-graph approach,” said Key Compton, XGraph’s CEO. “We’re truly excited to leverage our technology to unlock the value of Clearspring’s massive data set and help publishers and advertisers truly harness the power of the web-wide interest graph.”

XGraph is headquartered in New York with an office in Silicon Valley. All XGraph employees based in New York will join Clearspring’s office there. Clearspring plans to keep the office in Silicon Valley. The combined company will have 85 employees nationwide.

Eric Rosenblum, Google’s director of product management for Google Offers, said the deals business is all about getting relevant offers. “In order to do that, you need a lot of good deals. Even if you have one good one every day, it won’t satisfy everyone,” he said.

Google Offers launched its first city in June, having to start from scratch after Groupon rejected its $6 billion buyout offer. Today, it is already in 17 U.S. markets, including four launched this week.

In those markets, the goal to date has been to offer one deal a day, sold by its own sales force. Now, through partnerships, it will be able to offer consumers more than a dozen deals daily.

The participating deal providers: Dealfind, DoodleDeals, HomeRun, Juice in the City, PopSugar Shop, ReachDeals, Tippr, Kgbdeals, Gilt City, Active.com, GolfNow, Mamapedia, Zozi and Plum District.

The additional offers will first be offered in San Francisco, and will be rolled out more widely in the coming weeks.

Aggregation is not new; however, no one has cracked the code yet on personalization and targeting — not even Amazon. Men still are being offered Brazilian bikini waxes; women get pitched discounts to the barbershop.

Rosenblum believes that by having a wider selection of offers, and by asking people what their preferences are, Google Offers will be able to offer a more tailored experience.

When consumers sign up, a quiz asks them about the types of deals they want, and where they work, live and hang out. That information, which is optional to share, will be used to deliver multiple offers that match the shopper’s interests, all in one email.

In a blog post, Google says, “If you’re not the outdoorsy type and you don’t love spa treatments, then we won’t send you deals for zipline adventures or hot stone massages.”

“People do feel overwhelmed by information,” Rosenblum said. “They want to have the best deals for them and most relevant deals for them — it’s very user-centric.”

Google will also handle the payments and redemption process, so users don’t have to remember which provider they purchased a deal from. Some of the technology being used was acquired through its purchase of the DealMap. Rosenblum would not disclose the terms of the partnerships.

Despite its late entrance, Google has done fairly well so far. Over the past two weeks, the search provider has launched in eight cities. “Google is feeling quite bullish about this, and we are expanding quickly,” Rosenblum said. “We are now doubling down and picking our partners. Our deal density goes up by 10x in all of the cities.”

More recently, Groupon has been asking people for personal information so that it, too, can provide tailored offers. In some of its bigger markets, it’s typical for Groupon to have a handful of offers every day.

In a pop-up bubble on deals, Groupon sarcastically says, “This Time It’s Personal: To see exciting sequels to today’s deal, start adding your Deal Types and Places near you!”

The Groupon pop-up inquires about how far the deal is from the shopper’s home, and asks the user to answer a simple question. On an offer for auto detailing, it asks, “Want deals like this one? If so, click that you love that new-car smell.”

I like you. Actually, I think you’re pretty great. We’ve known each other for a long time, and I really appreciate that you understand me so well by now.

You know, for instance, that I’ve thought about buying the newish Beastie Boys album. And that I was recently in the market for a new router. And you told me about this cool Madison Smartt Bell book I didn’t know about (I bought that one — sent it straight into the Kindle).

So I’m always happy to hear from you.

But lately you’ve been acting … weird. Like you don’t really know me anymore.

You’ve started sending me these notes about something called “AmazonLocal.” Apparently, they are daily deals that LivingSocial buys, then hands off to you to distribute. Because I’m not the only person you know well — you know lots and lots of people.

That’s cool. But these “AmazonLocal” thingies — they’re not for me.

You’ve sent me five so far. One of them was for a restaurant, which is fine, I guess. But I have a long list of restaurants I want to go to before I start going to random ones I’ve never heard of.

The other ones, though? I think maybe you thought they were going to somebody else. There was one for something called a “Brazilian Blowout.” And one for Pilates classes. And one for sewing classes. And today I got one for two “Brazilian Honey Waxes,” which I think do something different than a Brazilian Blowout. But I’m not sure.

And look. I’m secure in my manhood, and I’m not offended. And it will be easy for me to unsubscribe to these things, and I’ll do that just as soon as I’m done typing this.

I guess I’m just not sure why you sent me these in the first place. Why go ahead and make me feel just a tiny bit less good about our relationship? You certainly don’t need the money — you see $9 billion of that every three months. And if you did want to send me this stuff, all you’d have to do is ask.

But you didn’t.

And while I’m certainly going to keep buying lots and lots and lots of stuff from you, I might think twice before I open another one of your emails. What a bummer.

P.S.: If you do have leads on affordable three-bedroom apartments with outdoor space in a leafy block in Brooklyn, please holler, ASAP.

—-

Unrelated: One of my all-time favorite advertising videos. May not be safe for work, but you should watch it anyway:

——–
Also unrelated: Happy Birthday, Ben!

The e-commerce giant has started what is effectively an ad network* where it buys Web advertising inventory and resells it to marketers at a premium. It can add a mark-up to its ads because it’s using the data it collects about its visitors and shoppers to target likely prospects.

Amazon has noodled with Web ads in the past, but has confined itself to selling space on Amazon.com and other sites it owns, like IMDB.com. This is the first time it has branched out into ads on third-party sites, and that could be a big deal: It could be a serious revenue stream for the company, and it could also raise a privacy fuss.

The company is moving into the third-party ad business with the help of Triggit, a San Francisco-based ad tech company; there’s a press release announcing the partnership at the end of this post. An Amazon rep declined to comment beyond the announcement.

Here’s how it works: Amazon uses the detailed data it collects on its customers and visitors to create pools of potential marketing targets. Amazon tells Triggit to hunt down particular Web surfers after they’ve left the site, using tracking “cookies;” once the start-up finds them it purchases ad inventory those users are looking at. Amazon uses that ad space to serve up an ad for the marketer it’s working with, and charges them for the impression.

This is another take on “retargeting,” where advertisers trail Web surfers from site to site, and which has become standard issue for Web advertising. Retargeting rankles some privacy advocates, since Web surfers usually aren’t aware that people are tracing their movements.

The targeting is theoretically anonymous, since the marketers aren’t technically tracking individual people but their Web browsers. But that distinction doesn’t mean much to many people.

And since Amazon’s working with much more information — it knows what you looked at on its site, what you bought, and all sorts of other personal information — I can see folks making a fuss about this move, too.

On the other hand, Amazon’s already using personal information to show you stuff you might like to buy on its own site, and via promotional e-mails (“customers who have purchased or rated music by Elvis Costello might like to know that Delivery Man is now available”). So it’s entirely possible most people will shrug this off, if they’re even aware of it.

And if it works, there’s a lot of opportunity for Jeff Bezos and company here. Not only does Amazon have an enormous data set to work with, it can pitch marketers on its ability to “close the loop” between online advertising and commerce — it can get an ad in front of a potential customer, and then show that the customer ended up buying the product on Amazon.

Amazon chooses Triggit’s Demand Side Platform (DSP) technology

San Francisco, Calif. – June 28, 2011 – Triggit today announced that it has been selected by Amazon.com to serve as a Demand Side Platform (DSP) for Amazon’s digital display advertising. Triggit will provide Amazon with its sophisticated real time bidding (RTB) software to enable Amazon to show the right ads to the right users across nine ad exchanges and more than four million websites.

“To be selected to provide technology to a company as technically advanced as Amazon is humbling and incredibly exciting,” said Zachery Coelius, Triggit’s CEO. “We are looking forward to working with the Amazon team to hopefully bring some of the amazing innovation they have brought to ecommerce to the world of advertising”.

Triggit has been at the forefront of recent innovation in the online advertising marketplace and has developed technology that enables companies such as Amazon to better communicate with their audiences with highly relevant and timely messages across the entire web. Over the past year Triggit has seen wide adoption of its technology across the Fortune 500 and now counts as customers a diverse group of companies such as Kodak, Mazda and Orbitz. That market traction also enabled Triggit’s revenues to grow by over 2000% in 2010.

*For AdExchanger readers: Yes, this isn’t technically an ad network. But for general readership, the phrase should work well enough.

Now a series of specialized companies are pitching products to simplify the landscape by helping marketers navigate the online-advertising world.

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Lawrence E. Strickling, an assistant secretary of commerce, is expected to call for the legislation at a hearing of the Senate Commerce Committee, said a person familiar with the matter.

This person said the administration will back a law that follows the outlines of a report issued by the Commerce Department in December. The administration wants any new rules to be enforceable and will look to expand the Federal Trade Commission’s authority, this person said.

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Microsoft’s decision to include the tool in Internet Explorer 9 means Google Inc. and Apple Inc. are the only big providers of browsers that haven’t yet declared their support for a do-no-track system in their products. In January, Mozilla Corp. said it would include a do-not-track feature in an upcoming version of its Firefox browser. Internet Explorer is the most widely used browser.

The moves by Microsoft and Mozilla reflect an unusually fast adoption of an idea—the do-not-track system—that was first officially proposed by the Federal Trade Commission only three months ago. It highlights the pressure the industry faces to provide people with a way to control how they are tracked and targeted online, as lawmakers and regulators threaten to rein in the practice.

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Apple’s iPad success and the imminent release of new application distribution platforms from Google and other software companies threaten another seismic shift for publishers that may have far greater impact on their business models than the growth of free media on the web. Devices like the iPad offer consumers a rich reading experience and offer publishers even more targeted advertising, but the revenue tradeoff as publishers navigate the path from print to this new world is lopsided–and not in a good way.

While we all enjoy browsing publications at newsstands, over 90 percent of the circulation of U.S. magazines is delivered directly to consumers through the mail. The data and cross-marketing opportunities that these direct customer relationships provide to publishers is the fundamental underpinning of their business model.

Data informs advertising in magazines and allows for better targeting. It provides for the sale of ancillary products like books, videos and special issues. It allows multi-title publishers to solicit new readers across their enterprise. Even competitors agree to exchange lists because it benefits the industry by building more magazine readers from a pool of customers who already enjoy receiving their publications through subscription rather than by single copy purchase.

Without direct access to customers, publisher revenue will decline sharply and the publications that we depend on for in-depth reporting, news and entertainment will risk a final digital Armageddon.

Should we care? Why can’t the publishing industry just leave the world of messy ink and rural route delivery? Can’t it pivot to a less costly distribution model where customer ownership isn’t as critical?

Unfortunately, even if we assume that publishers retain their customers, there are extraordinary business challenges in transforming today’s print consumers into exclusively digital readers. And publishers can’t afford to relinquish their direct connection to readers without a more attractive economic model than the digital publishing world presents today.

Here’s why:

1. The Advertising Model Won’t Pay.

   Magazines are a wonderful advertising medium. Among the top fifty publications ranked by advertising revenues, each copy of paid circulation generates a pass-along audience that averages seven readers. Those seven readers factor heavily into advertising rates, and provide a significant revenue multiple to be weighed against the editorial, marketing, printing and distribution costs of delivering a copy to the consumer.

   What happens to this audience with a digital magazine? If a publisher wishes to be paid for its distribution, it will likely set entitlement requirements that discourage free circulation of its products. Even with integration of social networking tools to enable article sharing, publishers won’t generate more than 1.5 or two readers per copy. So the advertising revenue per circulation unit will fall due to the fact that fewer people see the ads. Even to remain constant, advertising effectiveness per copy would have to increase over four times to make up for the audience decline from seven to 1.5 readers per copy.

   Of course, most publishers believe these new digital magazines will have wonderful consumer engagement qualities that will result in a higher value being placed on their advertising. They believe digital ads will be better targeted and more efficient than print at delivering the right message to the right reader. But will that value be four times the value of print today? Not likely.

   Some argue publishers must cast their lot with free content and endeavor to survive with an exclusively ad driven model. But we need to remember the lessons of the web for most publishers. Even with the powerful reach the web provides, The Economist, The New York Times, The Wall Street Journal, Sports Illustrated and Vanity Fair would fail without the significant vote their consumers make every month by making a direct payment to the publisher.

   So editors and consumer marketers will bear a larger burden in this new mobile reading world. They’ll need to increase the revenue from consumers. And one could argue that this is a good thing, redressing the imbalance of an industry that has been too highly leveraged on advertising. But for the consumer stream to become more valuable, one of two things must happen: either the demand for magazines must rise, or the cost of distribution must fall.

2. A 30 percent Cut to the Store Isn’t a Great Deal.

   Isn’t selling your magazine through an app store and receiving 70 percent of the revenues a great deal? After all, magazine subscription agents and newsstands don’t return anywhere near that amount to publishers. But this is argument misses an important point. In iTunes and the Android Marketplace, there’s virtually no merchandising of magazine products. A magazine app must swim to the top of several hundred thousand other applications. And even in the context of a dedicated magazine store, the publisher won’t control featuring. The value of the brand must pull the consumer through to the purchase. And brands are expensive to build and nurture. So the publisher will continue to bear a high marketing cost to ensure enough sales for a stable level of circulation, just as they do today in the offline world. These marketing costs would certainly erase any advantage that a 70 percent cut would provide over the conventional agent model, particularly if the publisher cannot capture information on the customer and determine an effective ROI against their marketing expenditures.

3. Margin Must Come Before Marginal Cost.

   What about the fact that there is virtually zero distribution cost? Well despite the problems of the U.S. Postal Service, the cost of printing and distribution represents a relatively low percentage of publisher expenses–somewhere on the order of 20 to 25 percent today. Of course there are significant creative and technical costs in publishing a beautiful new magazine in tablet form. Just adapting to the variety of screen sizes, screen resolutions and operating systems requires significant new investments. These costs, together with the aforementioned ad revenue decline, more than eclipse the savings from eliminating paper and postage.

So where will this margin come from if not from the consumer?

Tablets provide publishers a wonderful opportunity to rethink their products and add more value. But no manner of reinvention will be possible if they can’t mine their customer relationships to merchandise these new products. If the relationship between the magazine publisher and customer is broken, the industry will end up like music and book publishers–removed from customers, wedded to old habits and powerless as digital delivery inevitably overtakes and diminishes the value of their physical distribution.

Lastly, let’s consider the argument from a consumer’s perspective. Nearly one out of every two Americans subscribes to a magazine today. Many will purchase iPads and other tablets over the next year. When they do, Apple and others suggest that 150 million consumers ignore their existing relationships with publishers.

In this battle over ownership consumers are the losers. They will not be able to direct publishers as they wish, choose to get both a print and digital version of the magazine, or move to digital only delivery. They won’t be afforded the opportunity to get a better value by bundling their print and digital delivery together. They won’t be able to align their print and digital purchases so that expirations synchronize and billing is simplified. They won’t be able to move their experience to the device that suits them–irrespective of the platform–and read on phones, laptops, tablets or anywhere they like. Nothing in the transition will remove friction or frustration. Is this an experience we will be proud of?

There will be a transition from print to digital delivery that publishers and software providers must manage for consumers, and not solely for the advantage of their business interests. A print magazine is informative, beautiful, portable and easy to navigate. It’s also inexpensive. There will certainly be a long period when consumers will wish to try out new forms of reading on tablets but not give up their trusted print brands.

Businesses that make these transitions easy for consumers will flourish. Consider the long path to electronic billing for the banking industry, the Netflix shift from DVDs to video streaming, or even Apple’s introduction of Macs that run Windows software. In each case, the transition strategy provided for significant long-term advantage. And most would agree that there’s a significant long-term advantage for the software industry to make friends with 150 million magazine consumers.

Here’s how they do it:

1. Allow the customer to buy access to print, digital or bundle both together with one-click convenience.
2. Create simple APIs that connect the handful of major print fulfillment houses to application storefronts so existing print accounts can be harmonized with digital access.
3. Provide for critical customer data to flow to publishers so they can refine their products and find new ways to merchandise them to consumers.
4. Build opportunities for publishers to cross-merchandise products from within their applications and utilize one-click checkout.
5. Don’t thwart retailers like Amazon and Barnes and Noble who have existing relationships with publishers. They know how to merchandize magazines and will be a positive force for competitive pricing and product development.

With these measures I think very few publishers would object to the 30 percent cut these stores wish to collect or have any significant concerns about the stores retaining the direct billing relationship with their customers. In the end, publishers would build more unique magazine products, sell more related products and encourage their consumers to buy more devices.

Of course, without such cooperation publishers will always have a choice where to play. Tablets are not made of stone and publishers are not called upon by a higher power to work with distribution platforms that are fundamentally destructive to their consumer relationships and business interests.

John Squires is a former EVP of Time Inc., and founder of Next Issue Media

AOL CEO Tim Armstrong is the gift that keeps on giving–at least to Greg Coleman.

He’s the Chief Revenue Officer at the Huffington Post, for which the Internet giant just forked over $315 million to acquire.

Sources said Coleman, who has run advertising sales at the privately held news and opinion site since the fall of 2009, will get a multimillion dollar payday from the deal, even though he is not staying on after it closes, since AOL has its own top ad guy.

Except that this is the very same Greg Coleman who had been running ad sales for AOL for only two weeks when Armstrong took over from ousted CEO Randy Falco in February of 2009.

Coleman was gone from AOL by the end of April, replaced by Armstrong with current ad sales head Jeff Levick.

And for those three months of work Coleman got paid out his entire three-year AOL contract.

Not bad work if you can get it.

Actually, many credit Coleman’s energetic work at the Huffington Post for turbocharging its ad sales revenue to $31 million in 2010 and projected revenue upward of $60 million in 2011.

Coleman is an experienced online ad exec who was at Yahoo for seven years, responsible for all advertising revenue worldwide. He came to Yahoo from Reader’s Digest.

But Coleman ran into Yahoo’s management buzz saw after trouble hit the company in 2007. He was one of the first in a long line of execs to leave the troubled company, departing in one of its many controversial reorganizations.

But Yahoo’s ad business did grow strongly under him and former Yahoo ad exec Wenda Millard.

Before AOL, Coleman ran a Los Angeles-based start-up called NetSeer, which focused on ad targeting.

Memo to soon-to-be unemployed Greg: You’re definitely buying lunch next time I see you, and keep in mind that BoomTown is feeling partial to caviar.

According to the poll, 61 percent of Internet users said they’ve noticed that some online ads appear to be targeted at them based on their Web-browsing habits. Curiously, though, 90 percent of respondents said they pay little or no attention to online ads.

Two-third of respondents said advertisers should not be allowed to target ads based on online tracking. And 61 percent said tracking is not justified even to keep websites free.

The poll, of 840 adult Internet users, was conducted Dec. 10-12 by USA Today and Gallup Inc.

The poll suggests users want more control over tracking and behaviorally targeted advertising. Respondents were asked if they’d prefer to allow all advertising networks to target ads, none to target ads or “only those advertising networks you choose.” Nearly half, 47 percent, preferred being able to select networks that could target ads; 37 percent did not want any targeted ads and 14 percent said they would allow all targeted ads.

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Thirsty New Yorkers bought more than 1,300 of her online coupons, and “it kind of blew my mind,” Ms. London said. People redeemed roughly 900 of the coupons over six months at her small Xoom NYC Inc. shop, including a crush in June, but she was disappointed that few became regular customers.

“Most of the people who came are not from this neighborhood—I most likely won’t see them again,” Ms. London said, adding she wished she had limited each person to three coupons rather than 10. Fortunately, she said, not all the coupons were redeemed. “I definitely would have lost money if everyone had shown up,” she said.

Groupon and its competitors, which build buzz by sending out a daily email alerting subscribers in a city to a local bargain, are listening to gripes like Ms. London’s and recasting their operations. Among the new approaches: computer programs to better target consumers with personalized deals and staff on the ground to help merchants.

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But for a certain slice of the advertising technology world, there’s no debate: They believe advertisers and publishers are going to consume increasing amounts of personal data to make advertising more targeted and more effective. End of story.

Add the investors betting on eXelate into that group. Carmel Ventures and Menlo Ventures are putting $15 million into the company, which brags that it runs the “the first and largest open marketplace for audience targeting data.” The Israeli company had previously raised $4 million.

Data marketplaces like eXelate, Blue Kai and Magnetic are supposed to help advertisers and publishers fine-tune their products; they work hand-in-hand with display advertising exchanges like Google’s (GOOG) AdX.

But while some parts of the ad technology ecosystem appear threatening to the status quo, eXelate has made a point of reaching out the establishment: The company recently added New York Times (NYT) digital boss Martin Nisenholtz and Interpublic Group (IPG) venture head Matt Freeman to its board of directors.

After announcing its second-quarter earnings this afternoon after the markets closed, Yahoo (YHOO) CEO Carol Bartz and CFO Tim Morse held the usual conference call.

The results: Net income and margins were up at the Silicon Valley Internet giant, while revenue was meh. Display advertising growth was up, while search ad revenue was down.

Revenue and worries about future direction turned out to be the questions of the day.

2:03 pm PT: While she touted the improved margins with a confident tone, a nice accomplishment, Bartz quickly pointed out the obvious on revenue weakness.

She blamed a combo of issues, such as not monetizing search-share improvements.

“How do we measure our business?” asked Bartz, in her financial soliloquy. Another laundry list of stuff, such as engagement, editorial expertise and scale.

Then it was off to the races with updates on Yahoo’s social, local, video and mobile improvements.

That would be things such as integration with social networking powerhouse Facebook and online gaming phenom Zynga, more video all over the site and other initiatives to spur consumer engagement.

Bartz’s faves are the “Bikini 101″ videos, she said, which apparently get you ready for the summer season.

BoomTown last wore a bikini in 1974.

2:12 pm PT: Morse came on and started going over the numbers.

Yay on costs and margins. Not-so-yay on revenue growth.

You get the picture. Morse had some excuses, all of which seemed reasonable, including a pullback of advertisers in July.

More numbers on the savings from the Microsoft (MSFT) search and advertising alliance, tax issues, guidance, cash status and more.

I like listening to Morse, who always sounds super-competent. But he completely bores my assistant, Ed, just like other CFOs he is subjected to in earnings season, since I blast these calls on my computer’s speakers.

Sorry, Tim!

2:27 pm PT: Bartz was back and talking about display advertising and how Yahoo is working on all kinds of new schemes to improve advertiser experience, as well as to engage consumers more.

Onto search, which has long been Yahoo’s Achilles heel, no matter how Bartz spins it. Revenue per search is down and has been, which is a problem.

“As for search, we remain focused on growing our search business,” she said firmly. We’ll see about that after a year into the deal with Microsoft.

She touched on the controversy around contextual search being counted on comScore (SCOR) and dismissed it–although we will see how that turns out!

Then Bartz gave an update on the Microsoft alliance transition. Nothing new here, and the hope is that it will begin to take place by the end of the year, but only if it can be done with “quality.”

Bartz then touted Yahoo’s performance related to delivering information on the World Cup soccer, which she should as the company’s media arm did a bang-up job.

More on improvements in development and innovation, although it was a little light on deep examples.

Bartz summed up by again mentioning margin improvements, which was a good idea, and then moved onto Q&A.

2:38 pm PT: First question is about revenue lag, natch.

Bartz noted that customers’ marketing budgets are “easy to turn on and off.” The perils of the ad market! But, she said, she felt it was more of an overall market issues, rather than Yahoo-specific.

The next question was about page-view decline. Are these Wall Street analysts actually doing their job?

Morse answered that page views might not be all that anymore, since consumer use of Web technologies has changed.

“What we are trying to do is move toward a more holistic view,” he said.

But he admitted, “It is honestly a bit of a surprise.” Say what?!?

The next question was more on display advertising revenue drop-off and inquired about whether it impacted search.

Bartz said she thought it was because of those nagging on-off switches marketers can use!

The next question was about revenue pick-up on bucket tests of new system with Microsoft and, again, more on where the weakness in revenue is located.

“I will tell you we are pleased with it,” said Bartz coyly about the Microsoft test results.

As to revenue slowdown: No specific category and it was those big knob-turning customers.

More on cost-cutting and advertising revenue, which were essentially the same question over and over.

It is the right question, too.

At one point, Bartz talked about redefining advertiser expectations and how targeting was a better way to get to consumers.

Actually, it is pretty much about that old sales mantra of ABC: Always Be Closing!

More shuffling the papers about what was going on and what was coming next. Bartz noted that consumer confidence is “really weird now.”

Then there was a question about this “science, art and scale” motto that Yahoo has been using and calling SAS for short (internally, many move the letters around to make a naughty word).

The larger point, said Bartz, was that Yahoo is one of the new places that can deliver big results to advertisers in an unusual and engaging way.

True enough, which begs the question again: So what’s with these weak revenues? And, of course, what is Bartz going to do about it?

As we have with every change to features and functionality on All Things Digital, today we are writing to give you details about a new Meebo toolbar on this site.

It appears at the very bottom of each page on our site.

The first thing you need to know: You can get rid of it whenever you like.

But we think you will like it, because it enhances our site’s navigation, highlights fresh content and provides instant-messaging functionality, all in one place.

Such as:

– Share Page: Drag the page–or individual page items, such as a headline or image–into social tools or chat tools to share with friends and colleagues

– News: The most recent headlines from BoomTown, MediaMemo and Digital Daily, as well as select headlines from The Wall Street Journal, MarketWatch and Barron’s

– Reviews: The latest product reviews and analysis from Walt Mossberg and Katherine Boehret

– Hot Topics: Links to our aggregated coverage of recent product launches and timely issues

– Twitter: An “uber feed” that combines all our tweets

Per our All Things Digital Privacy Policy, any toolbar usage information will be shared with Meebo solely for the purpose of using this service or for targeting advertising on the toolbar.

Meebo may use cookies to target these toolbar ads; for more information please read Meebo’s Privacy Policy.

If you want to use a chat tool, you’ll be asked to log in with a user name and password. Again, please see Meebo’s Privacy Policy regarding collection and storage of your IM passwords.

And as I said at the start, if you prefer not to use the Meebo service, click the down arrow at the far right of the toolbar to hide the unit. If you change your mind, click that arrow and the toolbar will reappear.

In addition, below is a video interview I did with Meebo founder and CEO Seth Sternberg about the toolbar addition, as well as his company’s new XAuth announcement.

XAuth is an open authentication effort, which includes Meebo and partners Google (GOOG), Yahoo (YHOO), Microsoft (MSFT), MySpace, JanRain, Disqus and Gigya. As described on its Web site:

XAuth is an open platform for extending authenticated user services across the web.

Participating services generate a browser token for each of their users. Publishers can then recognize when site visitors are logged in to those online services and present them with meaningful, relevant options.

Users can choose to authenticate directly from the publisher site and use the service to share, interact with friends, or participate in the site’s community. The XAuth Token can be anything, so services have the flexibility to define whatever level of access they choose.

Here’s the video with Sternberg:

Comments? Ideas? Write us at feedback@allthingsd.com.

]]> http://allthingsd.com/20100504/meebo-toolbar/feed/ 5 http://allthingsd.com/20100420/liveblogging-yahoos-first-quarter-earnings/ http://allthingsd.com/20100420/liveblogging-yahoos-first-quarter-earnings/#comments Tue, 20 Apr 2010 20:59:24 +0000 Kara Swisher http://kara.allthingsd.com/?p=27190

BoomTown liveblogged Yahoo’s first-quarter earnings call with analysts today, which started at 2 pm PT.

Earlier today, Yahoo said its net income spiked to $310 million, or 22 cents a share, in the period.

Revenue, after subtracting what Yahoo (YHOO) pays in advertising commissions, was $1.13 billion.

Wall Street was expecting earnings of nine cents per share and net revenue of $1.17 billion.

Here we go:

2:02 pm PT: Investor lady said stuff. But, yay, Yahoo CEO Carol Bartz was on the call, so–not that I don’t enjoy CFO Tim Morse, also on the call–it promised to be much livelier.

Bartz got on first and called it a “solid” quarter. Nothing fancy, but pretty accurate.

She quickly turned it over to Morse for the numbers.

It’s all in the charts and slides here, but Morse did stress the importance of the search and advertising partnership with moneybags Microsoft (MSFT).

It is like cost-savings manna from heaven–$78 million in this quarter alone–for Yahoo. In fact, it’s the gift that will keep on giving, noted Morse, although not in those words.

Also, advertising, especially display, is back! Search, not so much. Revenue per search down, share down–a true weakness for the No. 2 search player.

More numbers from Morse, who began to lull me into an afternoon nap, so there was joy on my part when he said: “On a final note…”

Overall, Morse said that things are looking up.

2:21 pm: Bartz is back, noting first that the ad market is looking up and that marketers are looking to get creative with Yahoo’s “digital canvas.”

“Science, art and scale,” said Bartz.

I had no idea Yahoo was Rembrandt!

She used examples of work the Silicon Valley Internet giant is doing with retail giant Walmart (WMT).

Search is not so pretty: “I don’t think it is any secret that we have had a hard row to hoe in search,” Bartz said.

The bad crops metaphor is right!

2:27 pm: Microsoft deal stuff, though Bartz gave few details.

Suddenly, she threw a bit of a tantrum about those who focus too much on Yahoo executive talent, or–actually–the departure of executive talent from the company, which she called “borderline” obsessive.

I think she just took a smack at my reporting and called me the Vincent Van Gogh of the Internet, since All Things Digital breaks most of those stories.

Memo to Carol: I have covered both goings and comings. Did you miss the Blake Irving piece just this week?

And, frankly, when you lose your chief ad sales person and CTO in a month, it’s kind of a big story.

I am a bit obsessed with Yahoo, it is true, but I still have both ears. (Unless Judy comes at me with some scissors for giving you a hard time!)

End of my tantrum.

Bartz then moved onto details about programming and other features at Yahoo–sports, mobile, Facebook integration–and the company’s recent content deal with Hollywood producer Ben Silverman.

She called what he makes for Yahoo “video snacks.”

Smacks and snacks!

2:37 pm: Q&A time!

First up, a question about search and display.

Morse answered: Display great, search not.

Next: Flat page views and how do you increase engagement?

Bartz will “take a whack at that,” since she is clearly in a whacking mood.

Engagement is a big focus and Yahoo is working on it: More interactivity, social networking, better targeting.

Bartz said she has been getting a lot of diet recipes in that targeting, although she has no idea why. I think she looks great!

Next: What’s up with search declines again?

Morse: We are working on it!

Bartz: “We’re not a long-tail buy.”

Now, a tax guidance question (which means I headed to the bathroom at this point).

Next: What up with international? Also, another question about search decline trends–there has to be a morning after!

“We’re not fighting comScore (SCOR) on this,” said Bartz. Good idea.

“We have a lot of effort going into this,” she added. Stabilization is apparently the new up.

2:50 pm: I missed the last question because I had been looking at an OMG! story about actress Sandra Bullock not wearing her wedding ring. What can I say, except that Yahoo content is a lot more interesting than this earnings call.

But essentially, Bartz was talking about making Yahoo’s internal operations more consistent, which has been one of her favorite memes.

There was also a China question, but Yahoo is not running the show there.

More about the search alliance with Microsoft and its costs.

“There are a lot of moving pieces on this,” said Morse, which means he does not know yet.

He added that Yahoo might buy back some stock, but did not give specifics.

More search questions, this time about how Yahoo sells it. Bartz sounded weary of the questions about this key arena.

I can almost hear the internal dialogue in her head: “WHY THE #@&%*# ARE THEY SO BORDERLINE OBSESSED!?!”

Face it, Carol, we can’t get enough of your search non-answers.

Bartz moved onto Yahoo’s strength in the content space. She is right about this, which is Yahoo’s major differentiation.

And again she stressed the artistic canvas metaphor, for both content and advertising.

Yahoo is the Da Vinci of Digital! The Michelangelo of Microchips! The Picasso of Pixels!

I am borderline choked up at the thought of it.

]]> http://allthingsd.com/20100420/liveblogging-yahoos-first-quarter-earnings/feed/ 0 http://allthingsd.com/20100226/twitters-ad-plan-copy-google/ http://allthingsd.com/20100226/twitters-ad-plan-copy-google/#comments Fri, 26 Feb 2010 17:04:21 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=16768 What will Twitter’s long-awaited ad platform look like? Something like Google’s.

That’s the general description of Twitter’s plan, according to people who have been briefed by the company.

Here are the very broad strokes:

• Ads will be tied to Twitter searches, in the same way that Google’s (GOOG) original ads were. So a search for, say, “laptop,” may generate an ad for Dell (DELL). The ads will only show up in search results, which means users who don’t search for something won’t see them in their regular Twitterstreams.
• The ads will use the Twitter format–140 or fewer characters–and will be distributed via the third-party software and services that use Twitter’s API. The services will have the option of displaying the ads, and Twitter will share revenue with those that do.
• Twitter will work with ad agencies and buyers to seed the program, but plans on moving to a self-serve model like Google’s, down the road.

The caveats: Everyone I’ve talked to cautions that the plans are evolving and that there are plenty of details to work out. Including a launch date, though it seems as if the first half of this year is a very safe bet.

But at first blush, this seems like a relatively straightforward way for Twitter to get into advertising, without upsetting its growing user base: You won’t see the ads unless you use Twitter to search for something, and Twitter’s advertisers will have at least a vague idea of what you’re interested in.

There are lots of gritty details that Twitter either hasn’t worked out or hasn’t disclosed to the people I’ve talked to. For instance:

• How will advertisers buy and price the ads? Will they use a Google-like cost-per-click model or something else?
• Twitter searches are popular, but very crude. Can Twitter refine them to make them more useful to users?
• Google’s ads work because Google has reasonably good idea of both users’ intent and identity. Twitter knows much less about its users. How can it gather enough data to make its targeting more meaningful?

Twitter has been careful not to position its ad plan as the core of its business. And the company has made a point of stressing that its initial ad rollout, like other initiatives it’s launching this year, are merely “tests.”

That’s one of the of ideas behind the $100 million funding round Twitter closed last summer–it gives the company the time to play around with different business models. But this one seems to have plenty of potential.

]]> http://allthingsd.com/20100226/twitters-ad-plan-copy-google/feed/ 0 http://allthingsd.com/20091203/boomtown-decodes-google-ceo-schmidts-shut-up-you-whiny-news-folk-op-ed-so-you-dont-have-to/ http://allthingsd.com/20091203/boomtown-decodes-google-ceo-schmidts-shut-up-you-whiny-news-folk-op-ed-so-you-dont-have-to/#comments Thu, 03 Dec 2009 21:30:47 +0000 Kara Swisher http://kara.allthingsd.com/?p=21415 Please see this disclosure related to me and Google.

Google CEO Eric Schmidt did one of his patented throat-clearers in an opinion piece in The Wall Street Journal today and it pretty much begs for translation.

Well, BoomTown shall not tarry from the task of decoding the extra-long rumination from the head of Google (GOOG), who was responding to the recent spate of aggressive attacks by traditional media publishers.

They have blamed the search giant for everything from their current business woes to the destruction of journalism to Tiger Woods’s dicey marital troubles.

Okay, not that! But the rest for sure.

First and foremost among the attackers has been Rupert Murdoch, CEO and ruler-of-all-he-surveys at News Corp. (NWS), which owns The Wall Street Journal and this Web site.

How ironic, yet still typically cozy from a corporate bigwig point of view! I call you a cur in public, but please use my newspaper so that I can get some decent traffic from this wrestling match.

But all is not what it seems in the Schmidt piece, of course, so here’s the translation:

What Schmidt wrote: How Google Can Help Newspapers

Video didn’t kill the radio star, and the Internet won’t destroy news organizations. It will foster a new, digital business model.

By ERIC SCHMIDT

Translation: We come in peace, always. You know, like the freakily calm lady from “V,” who is really a lizard under all that pretty and is actually secretly trying to decide between grilling and broiling all you whiny news people.

Also, you can address me in the future as Emperor Palpatine.

What Schmidt wrote: It’s the year 2015. The compact device in my hand delivers me the world, one news story at a time. I flip through my favorite papers and magazines, the images as crisp as in print, without a maddening wait for each page to load.

Even better, the device knows who I am, what I like, and what I have already read. So while I get all the news and comment, I also see stories tailored for my interests. I zip through a health story in The Wall Street Journal and a piece about Iraq from Egypt’s Al Gomhuria, translated automatically from Arabic to English. I tap my finger on the screen, telling the computer brains underneath it got this suggestion right.

Some of these stories are part of a monthly subscription package. Some, where the free preview sucks me in, cost a few pennies billed to my account. Others are available at no charge, paid for by advertising. But these ads are not static pitches for products I’d never use. Like the news I am reading, the ads are tailored just for me. Advertisers are willing to shell out a lot of money for this targeting.

Translation: It’s the year 2015 in the United States of Google, where the new country colors are a festive green, blue, red and yellow.

As per the new Declaration of Googlependence, besides the tracking chip in your thighs, every citizen will be outfitted with a tablet running Chrome and looking suspiciously like a large iPhone, except that Apple (AAPL) was outlawed in the Fanboy Purge of 2010.

Every day, citizens will receive news specially aimed at them, such as “The Health Benefits of Sergey Worship.” Ads will also be tailored to citizens’ likes and dislikes, such as a pitch for Googley deodorant with the motto: “Search me, because I smell nice!”

Costs will be billed to your accounts at the National Bank of Google.

What Schmidt wrote: This is a long way from where we are today. The current technology–in this case the distinguished newspaper you are now reading–may be relatively old, but it is a model of simplicity and speed compared with the online news experience today. I can flip through pages much faster in the physical edition of the Journal than I can on the Web. And every time I return to a site, I am treated as a stranger.

So when I think about the current crisis in the print industry, this is where I begin–a traditional technology struggling to adapt to a new, disruptive world. It is a familiar story: It was the arrival of radio and television that started the decline of newspaper circulation. Afternoon newspapers were the first casualties. Then the advent of 24-hour news transformed what was in the morning papers literally into old news.

Translation: [Rachel: Please insert usual pap boilerplate here damning the newspaper business with faint praise. History of how change hurts, but is inevitable...blah, blah, blah. Please make sure to deliver a few digs too, like how--unlike Google--newspapers have no idea what their readers did last summer. Like we do. Cue evil Mwahahahaha laugh here.]

What Schmidt wrote: Now the Internet has broken down the entire news package with articles read individually, reached from a blog or search engine, and abandoned if there is no good reason to hang around once the story is finished. It’s what we have come to call internally the atomic unit of consumption.

Translation: “Atomic unit of consumption” is one of those terms we don’t expect you small-brained people to even begin to understand. Although you use only eight percent of your mental capacity, we here at Google use an average of 71 percent, tracking on our search share.

What Schmidt wrote: Painful as this is to newspapers and magazines, the pressures on their ad revenue from the Internet is causing even greater damage. The choice facing advertisers targeting consumers in San Francisco was once between an ad in the Chronicle or Examiner. Then came Craigslist, making it possible to get local classifieds for free, followed by Ebay and specialist Web sites. Now search engines like Google connect advertisers directly with consumers looking for what they sell.

Translation: I also don’t expect you Luddites will get this, but all your base are belong to us.

For those who need an older cultural reference, it is like the end of “Butch Cassidy and the Sundance Kid.” Um, as much as you Hollywood types like a happy ending, Butch and the Kid did not make it.

What Schmidt wrote: With dwindling revenue and diminished resources, frustrated newspaper executives are looking for someone to blame. Much of their anger is currently directed at Google, whom many executives view as getting all the benefit from the business relationship without giving much in return. The facts, I believe, suggest otherwise.

Google is a great source of promotion. We send online news publishers a billion clicks a month from Google News and more than three billion extra visits from our other services, such as Web Search and iGoogle. That is 100,000 opportunities a minute to win loyal readers and generate revenue–for free. In terms of copyright, another bone of contention, we only show a headline and a couple of lines from each story. If readers want to read on they have to click through to the newspaper’s Web site. (The exception are stories we host through a licensing agreement with news services.) And if they wish, publishers can remove their content from our search index, or from Google News.

Translation: Shut your overstuffed pie holes, you grumbling antiques. You were dying by the cell long before our superior technology arrived to save the day and help you out of your sorry mess.

Plus, we toss you all that traffic and you still manage to fumble our perfect pass like the pikers you are. (In truth, you are Charlie Brown and we are Lucy.)

Also, have you ever heard of “fair use”? It’s the law now and we can hire more lobbyists in Washington, D.C., than you with the bazillions and gamillions of dollars we make from all those tiny little blue links.

You do realize I have a key to the the White House and visit more times than Joe Biden?

What Eric wrote: The claim that we’re making big profits on the back of newspapers also misrepresents the reality. In search, we make our money primarily from advertisements for products. Someone types in digital camera and gets ads for digital cameras. A typical news search–for Afghanistan, say–may generate few if any ads. The revenue generated from the ads shown alongside news search queries is a tiny fraction of our search revenue.

Translation: Here’s an easy formula for you to grok: Michael Jackson+the pretty boy from “Twilight”+digital cameras=Big bucks for Google! Some thumbsucker you did on Afghanistan, however worthy and important for our nation’s future=14 cent CPM, but only if a drunken Lindsay Lohan story is in close proximity.

What Schmidt wrote: It’s understandable to look to find someone else to blame. But as Rupert Murdoch has said, it is complacency caused by past monopolies, not technology, that has been the real threat to the news industry.

Translation: [Rachel: Please insert Rupe quote that actually hangs him here.]

What Schmidt wrote: We recognize, however, that a crisis for news-gathering is not just a crisis for the newspaper industry. The flow of accurate information, diverse views and proper analysis is critical for a functioning democracy. We also acknowledge that it has been difficult for newspapers to make money from their online content. But just as there is no single cause of the industry’s current problems, there is no single solution. We want to work with publishers to help them build bigger audiences, better engage readers, and make more money.

Meeting that challenge will mean using technology to develop new ways to reach readers and keep them engaged for longer, as well as new ways to raise revenue combining free and paid access. I believe it also requires a change of tone in the debate, a recognition that we all have to work together to fulfill the promise of journalism in the digital age.

Translation: Really–we’re from Google and we’re here to help! Mwahahahahaha.

Seriously, you guys, please go back to demonizing Microsoft (MSFT) or those banker salaries or the health care bill.

While my gabillions of dollars are more than protecting me from the blows you are trying to land, I am not liking the hairy eyeballs I got at the Allen & Co. conference at Sun Valley last summer. I think Washington Post head Don Graham even short-sheeted my 600-thread count Frette bedding there.

What Schmidt wrote: Google is serious about playing its part. We are already testing, with more than three dozen major partners from the news industry, a service called Google Fast Flip. The theory–which seems to work in practice–is that if we make it easier to read articles, people will read more of them. Our news partners will receive the majority of the revenue generated by the display ads shown beside stories.

Translation: [Rachel: Please insert some kooky-named Google 20 percent project we have no intention of really going large on here, so they think we really are working on something to save them. Those media folks like Hail Mary tech solutions, even if they don't even know how to turn them on.]

What Schmidt wrote: Nor is there a choice, as some newspapers seem to think, between charging for access to their online content or keeping links to their articles in Google News and Google Search. They can do both.

Translation: You de-indexin’ me? You de-indexin’ me? You de-indexin’ me? Then who the hell else are you de-indexin’? You de-indexin’ me? Well I’m the only one here. Who the %*#! do you think you’re de-indexin’?”

What Schmidt wrote: This is a start. But together we can go much further toward that fantasy news gadget I outlined at the start. The acceleration in mobile phone sophistication and ownership offers tremendous potential. As more of these phones become connected to the Internet, they are becoming reading devices, delivering stories, business reviews and ads. These phones know where you are and can provide geographically relevant information. There will be more news, more comment, more opportunities for debate in the future, not less.

The best newspapers have always held up a mirror to their communities. Now they can offer a digital place for their readers to congregate and talk. And just as we have seen different models of payment for TV as choice has increased and new providers have become involved, I believe we will see the same with news. We could easily see free access for mass-market content funded from advertising alongside the equivalent of subscription and pay-for-view for material with a niche readership.

Translation: Smartphones are the answer! Sure! Your aging demo loves reading teeny-weeny writing on a device they want to throw against a wall.

Or maybe you can be like HBO! Except you’ll need more borderline porn and Mafia guys.

What Schmidt wrote: I certainly don’t believe that the Internet will mean the death of news. Through innovation and technology, it can endure with newfound profitability and vitality. Video didn’t kill the radio star. It created a whole new additional industry.

Translation: A census taker once tried to test me. I ate his liver with some fava beans and a nice chianti.

]]> http://allthingsd.com/20091203/boomtown-decodes-google-ceo-schmidts-shut-up-you-whiny-news-folk-op-ed-so-you-dont-have-to/feed/ 24 http://allthingsd.com/20091203/live-comcast-pitches-nbc-deals-to-investors-with-charts/ http://allthingsd.com/20091203/live-comcast-pitches-nbc-deals-to-investors-with-charts/#comments Thu, 03 Dec 2009 13:35:57 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=13480 Comcast investors have been upset with the company ever since its plans to acquire control of NBC Universal from GE appeared in September. Now’s the time for the company to start wooing them back (at least publicly).

On the call: Comcast (CMCSA) CEO Brian Roberts, COO Steve Burke, CFO Michael Angelakis

CEO Brian Roberts: The deal will make us “strategically complete.” [Translation: We promise not buy anything else!]

Obligatory praise for Jeff Zucker for “completely transforming NBC into one of the premier cable operators in the business,” which is the same way Zucker likes to describe himself.

This deal is so incredibly easy for us to finance that we’re increasing our dividend by 40 percent. [Also, we're doing this with both hands tied behind our back!]

CFO Michael Angelakis: If you get confused, there’s an appendix at the end of our presentation.

Did you know that Fandango is a “female-oriented” site? Me either.

Comcast has a “clear path to control” the joint venture by buying out GE’s (GE) interest, but future payouts are capped at $5.75 billion.

Debt ratings agencies have signed off on this, so don’t worry. They never get this wrong.

Roberts: Can’t stress this enough: We’re not buying a faltering film company and a flailing broadcaster; we’re buying a bunch of profitable cable channels. Cable channels. Cable channels.

Also, we’re buying at the bottom of the cycle, so some of the duds that we’re buying may end up having upside.

[Roberts is right about this, by the way: Networks really do rise and fall over time, almost independently of what management does. Remember ABC's peril in the pre-“Lost" era?]

Oh yeah. There are some theme parks, too.

Okay. Back to the deal: Cable channels, cable channels, cable channels. They are great. We love them. Affiliate fees are growing 12 percent a year, ad sales are up seven percent a year. Check out the awesome slide on page 19. “I think this is a wow slide” (see below).

Some more praise for Zucker.

COO Steve Burke: Cable channels. Cable channels. Cable channels. We love the ones we own, but they’re “subscale” compared to what we’re buying from GE.

We’re going to cross-promote the heck out of these and figure out how to make G, Style and Versus more valuable, like NBCU does with Bravo, etc.

[We're about 40 minutes into the call, and this is the first discussion about the Web.] The JV will be a Top 10 company with 82 million uniques.

At least for now, Comcast is still talking about “On Demand Online,” not XTREME ONLINE RAWKS or whatever the company is supposedly going to call it.

Q&A:

Can you give us more color on new businesses you may create once you combine? Also, what are you going to sell off?

Burke: There are “literally dozens of innovative ideas that come out of this combination.” Like interactive advertising. Targeting, etc. (via cable, not Web). We can launch new channels, new video-on-demand packages, more windows. A lot of opportunities.

Roberts: We don’t plan on selling anything. But “we have a long time between signing and closing” to learn about the assets we’re buying.

A lot of people have tried vertical integrations like this and they haven’t worked. What’s going on here? Also, how are you going to work with businesses like Hulu, which threaten your business?

Roberts: Some of these have worked. Think of [Liberty Media Chairman] John Malone’s deals. Or Time Warner (TWX) buying Turner. Or even News Corp. (NWS) and DirecTV. Anyway, that’s the past. Let’s look to the future. More important is that we believe this deal works with zero synergy benefits. [That's for you, Jeff Bewkes.]

[Um, anyone else get bumped off the call? Nope, just me. Apologies, will go get the Hulu the rest of Roberts's answer later, but I'm guess it was something along the lines of "we love Hulu and have no intent to crush it like a bug, and besides, we're one of three networks that will own it."]

Please explain how you’ll negotiate for, say, the Olympics and other assets when you don’t actually own NBC yet.

Roberts: [GE CEO] Jeff [Immelt] and Jeff [Zucker] will have to run their business until the deal closes.

What about regulatory hassles?

Roberts: No worries. This is a “pro-consumer transaction.” And check out all the things we said to that effect earlier this morning.

Burke: Both local advertising and national advertising are recovering. An analyst notes that GE has never told us much about NBCU because it hasn’t had to. So we’re going to get a much better look at how the business works going forward.

Why are you sticking your regional sports deals into this joint venture? Also, why not just hand the money you’re spending on this deal back to investors, via share buybacks?

Burke (I think): When you think of sports, its hard not to think of NBC Sports and Dick Ebersol [ahem]. Also, we think there’s some synergy with some of NBC’s local broadcast stations.

Angelakis (I think): We’ve already bought back $14 billion worth of stock in six years, and we’ll keep buying back stock. Also, check out our dividend. But we need a balance. This deal gives us financial returns and long-term strategic returns.

Roberts (I think): The timing is good. Size is appropriate–we can handle it. “You gotta like the business….We think it’s a reasonable risk. That’s what we’ve always done at Comcast.”

As for regulatory risk, if Washington wants us to make a really really serious change that blows up the rationale for doing this, we have the ability to back out. But we don’t think that’s going to happen. “Is there a break-up fee?” the questioner asks. Answer: No.

What does this mean for TV Everywhere/On Demand Online? (and Hulu)?

Burke: NBC has been careful not to put too much cable content on the Internet. We think that’s a smart strategy, “not that they asked us.” We think that going forward, you’re going to continue to have free broadcast stuff on Hulu, and cable stuff on TV Everywhere.

Roberts: Windows in general, our focus has been on expanding offerings, putting them on multiple platforms. All of those things are more likely to occur in a way that benefits distributors, content owners and consumers. “What about Hulu premium?” the questioner asks. Answer: “That’s certainly not in the cards.”

Here’s Comcast’s pitch in chart form:

ComcastNewPDF_12.3.09 –

]]> http://allthingsd.com/20091203/live-comcast-pitches-nbc-deals-to-investors-with-charts/feed/ 0 http://allthingsd.com/20091124/ad-industry-works-on-ads-about-ads/ http://allthingsd.com/20091124/ad-industry-works-on-ads-about-ads/#comments Tue, 24 Nov 2009 16:11:46 +0000 Emily Steel http://voices.allthingsd.com/?p=18345 Madison Avenue has joined forces with Internet companies in a last-ditch attempt to stop privacy regulations over the $29 billion online-ad industry.

The industry is finalizing an ad campaign to educate consumers about how digital advertising works, creating an icon that would appear on Web pages or ads alerting consumers if their activity is being tracked and deploying new technologies to police the Web for illegal activities. At issue is the practice of tracking consumers’ Web activities–from the searches they make to the sites they visit and the products they buy–for the purpose of targeting ads.

The efforts follow calls from the FTC earlier this year for Web advertisers and Internet companies to do a better job explaining how they track and use information about consumers’ Web activities and creating a simple way consumers can opt out of being tracked.

Read the rest of this post on the original site

]]> http://allthingsd.com/20091124/ad-industry-works-on-ads-about-ads/feed/ 0 http://allthingsd.com/20091118/center-for-digital-democracys-jeff-chester-talks-about-microhoo-and-more/ http://allthingsd.com/20091118/center-for-digital-democracys-jeff-chester-talks-about-microhoo-and-more/#comments Wed, 18 Nov 2009 16:55:03 +0000 Kara Swisher http://kara.allthingsd.com/?p=20741 While in Washington, D.C., BoomTown can’t just visit the policy wonks from Internet companies (such as my Facebook how-do-you-do here), so I hightailed it several hundred feet and directly across Connecticut Avenue NW to visit with Jeff Chester.

For those who don’t know him, Chester is the executive director of the Center for Digital Democracy, a nonprofit consumer advocacy group that works to promote privacy and protection online.

In other words, a professional–and much needed–thorn in the side of Facebook, Google (GOOG) and these days, MicroHoo.

That’s because, while advertisers and publishers are supportive of the massive search and online advertising deal between Microsoft (MSFT) and Yahoo (YHOO)–which now looks close to being launched–Chester has a more whoa-nelly attitude.

“There are questions that must be answered regarding the collection and sharing of consumer data by the two companies,” said Chester right after the deal was announced. “While the rationale for the deal is to provide some much needed competition to Google (and income for Yahoo), the further consolidation of the global digital advertising system should be a concern to Internet users, privacy advocates, online marketers, and competition regulators.”

Violations of consumer privacy by such unions or by Facebook’s efforts to use data to better deliver online ads or by any of the myriad ways such companies are honing their behavioral targeting skills worries Chester.

Thus, in patented D.C.-style, he hectors government agencies, politicians and the media to look more closely at such practices.

Here is my video interview with him about all this, which is well worth listening to, especially in an era when online powerhouses like Google are learning more and more about you, and not in a good way:

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