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Archive for July, 2012

80% of Ad Clicks on Facebook Coming from Bots? Maybe it’s Cyber-Insider-Trading

Posted by Bob Warfield on July 31, 2012

Fascinating story over on Techcrunch:  Startup Limited Run claims 80% of the clicks it got through Facebook advertising were due to bots.  They concluded this because so many of the clicks had Javascript disabled (they say normally only 1-2% disable Javascript) and because whatever was clicking through wasn’t bothering to fetch the images on the page.  Lastly, the clickers were claiming to be non-standard software, not the usual contingent of Chrome, Internet Explorer, and other browsers.

Sounds pretty damning, no?

If Limited Run’s experience turns out to be the norm for Facebook, you have to take the next step and think about 2 things:

1.  Facebook is only 20% as successful as it claims and that’ll mean another huge hit to their stock price along with more lawsuits.  Who wants to take a short position on this news?

2.  You have to wonder who built and is paying for these bots and why?  The only good answer I can think of is that it would be someone with a vested interest in either raising ad revenues for Facebook (those darned cyber-insider-traders are manipulating the stock!) or someone who wanted to radically increase advertising costs for Limited Run.  Either way they are up to no good.

Quick entrepreneurs–how fast can you throw together a tool, product, or service that helps companies measure and document advertising fraud?  They need solid data to negotiate with the likes of Google or Facebook and get any money back.

Posted in business | 2 Comments »

Steve Ballmer and Marissa Mayer Face the Same Problems at Microsoft and Yahoo

Posted by Bob Warfield on July 17, 2012

marissa-mayerI know this will come as a shock to many Microsofties who will hate seeing their company compared to Yahoo, but I firmly believe that Steve Ballmer and Marissa Mayer face exactly the same problems at their respective companies.  The only differences are matters of scale and position on the lifecycle to extinction.  Both are CEO’s of once great and now fading empires.  Both organizations have gone a long time without showing much sign of recovery.  In Microsoft’s case, the stock has been flat since Bill Gates handed over the reigns.  The world has started referring to Steve Ballmer’s tenure as Microsoft’s Lost Decade.

I came to this conclusion just as I was about to write about the new Office Microsoft is showing around and what I think the most important work for Ballmer to accomplish in the next 12 months would be.  As the thoughts for the article were percolating, a fresh round of articles about Marissa Mayer taking the Yahoo CEO post began circulating and I thought, “Well, I’d better write about what she needs to do too.”  That’s when I realized they’re both facing the same problems and need essentially to do the same things to fix their respective companies.  Because we’re talking about two large entities that are each worthy of a post of their own, and trying to bring the threads together, this will be something of a magnum opus post.  Appologies in advance for being verbose.

Let’s set the stage with a little review of what’s being written.  I’ll start with Mayer and then go on to Ballmer.  In both cases, the usual suspects did the usual Echo Chamber number on the news.  We got an initial round of, “Golly, we’re surprised at how cool this news is after we’d written off <insert either Microsoft or Yahoo here>”  This was followed almost immediately by the round of grumblers and link baiters who write about how Mayer is the wrong thing for Yahoo being a product person instead of a media person and Office is too little too late.  Both are bullshit-tunnel-vision-link-baited and shallow article types (other than that guys, you did great analyzing these events).  Hey, let’s face it, journalists and what passes for journalists these days write about the news, they don’t make it, and they often don’t even understand it.  They don’t care.  They’re running the modern equivalent of Pavlov’s dogs where if you stick the right stuff in a headline with the right edgy attitude you get traffic, rinse and repeat until it becomes mechanical.  Yada, yada.

So, for Marissa Mayer we got:

Analysts react to Marissa Mayer in the WSJ:

“What we are a bit worried about is that by selecting Ms. Mayer, Yahoo is
explicitly pursuing an aggressive and bold growth strategy, whereas we believe a
value strategy might be more appropriate,”

Uh huh.  Analysts used to mean something to the stock market but they never really got tech with a very few exceptions–Rick Sherlund, Mary Meeker, and Chuck Philipps.  Absent an Oracle-style rollup Godfather for failed Internet media companies, Yahoo has little choice but to bet on a bold growth strategy.  There’s a reason most analysts aren’t running companies.

Ever popular Mathew Ingram on GigaOm tells us Marissa may not be a good fit:

In his post is a lot of gobbledigook from various folks that boils down to Mayer not being a media maven while Yahoo is a media company.  Shouldn’t it really have a media CEO?  I’m gonna call bullshit on that one too.  Where are these media companies?  The idea that media companies would rule died quite a while ago.  We have seen News Corp fail, AOL fail, the Music Industry fail, and Yahoo fail.  We are watching Books fail at the hands of technologists as we speak.  How much more fail do we need from the media world thinking they know how to run this stuff.  OTOH, despite some recent stumbles, we have seen Reed Hastings take what looks to me like a media company called Netflix and totally kick ass.  Reed’s prior post was founding and running Pure Atria software, which produced extremely nerdy technical tools for software developers.  Steve Jobs is another example who captained a launch of Apple into the music business.  Here is an important newsflash to those who think hardcore software product people can’t hack media or marketing:

In an online digital world, media and marketing are products.  The whole freaking User Experience is a product that spans all of these things.

If you don’t understand that, you are going to wake up like a lot of other once great companies and wonder how the software wunderkind ate your lunch.  This is why Marc Andreesen keeps proclaiming that software is eating the world.  Companies that don’t have people like Marissa Mayer can’t play that game.  Media Guys, Sales Guys, and Marketing Guys are never going to play that game.

‘Nuf said on that theme for the moment other than to add for Steve Ballmer, your biggest problem may be precisely that you don’t have what Marissa Mayer brings to the table as a product person.  You’re a snack cake salesman when you needed to be a fighter pilot.

Kara Swisher has 10 Totally Fluff Questions for Marissa Mayer

Oh boy.  Talk about linkbait.  Lists are always link bait and this one is no different.  It covers such critical advice as making sure not to be too geeky and not to think it’s cool to wear a lot purple.  Yes Kara, I imagine you were saying of Marissa, “What. A. Geek.”  And guess what, she runs things.  Jealous?

The less snarky questions focused on:

-  How do you cut enough people to carve out space to work in?

-  Which products do you cut?

-  How will you manage the board and partners?

Kara, you need to go have a conversation with Mark Hurd.  That’s his kind of discussion.  It did not do wonders for HP.  It propped him up nicely, but it has left the world’s largest computer company wondering WTF to do next.  The reason is simple.  These are short term answers.  You can’t cut technology companies to greatness.  You have to actually build something.  Product people are long term people.  They build things.  They understand that you don’t slash and burn out one side of your mouth and then succeed in hiring tons of awesome new talent.  Rather, you come up with a strategy that the talent can actually respect and you build a culture that the talent can thrive in.  Geez, what’s next?  Shall we ask Marissa if she plans to implement Microsoft-style stack ranking during her first 30 days?

The funniest was ReadWriteWeb telling us Yahoo needs a visionary not another product person and then letting Forrester Analyst Shar VanBoskirk define what a visionary is thusly:

“What I think Yahoo needs is a visionary – an aggressive executive who can make some pretty solid decisions about the business Yahoo needs to be in,” VanBoskirk said. “I’m not sure Yahoo needs another product person.”

Sounds like a visionary is a damn bean counter to me.  Let me get very very crystal clear:  a real product person will make solid decisions about the business Yahoo needs to be in.  Seems like Forrester and Gartner Analysts are the only ones whose crystal balls are more cloudy than Wall Street Analysts.

I won’t bore too much with the happy posts about Mayer because they typically boiled down to, “Yahoo is so screwed up we had no idea they could attract someone as talented as Marissa Mayer.”  Cool beans.

I think Fred Wilson had the best happy post I read:

Fred Wilson proclaimed that Yahoo is no longer dead to him.

Funny quote, but a little heavy on the Mario Puzo, no?  While your avatar-caricature looks a bit like a dark haired Marlon Brando, I’m not sure I fancy you the Godfather.  But, I know you have the sense of humor to take this in the sense it was meant.  And yes, I agree with you Fred, Yahoo is making some decent decisions here.

For Ballmer and the new Office release, it was much the same, although the kudos were a little more forthcoming with substance.  Let’s be real, Windows 8 and Office 2013 are the best work Microsoft has done in a long long time.  They deserve some kudos.  And, like the Mayer articles, we got first some good stuff followed by the snarky stuff.

Here are some of the articles that caught my eye:

Ballmer talks about why the Lost Decade is a myth:

Okay Steve, dream on.  It’s no myth.  What had been an awesome shareholder value machine has stalled on your watch almost to the day Gates stepped out.  Yet, Ballmer at least talks like he understands what needs to be done in this passage:

It’s not been a lost decade for me! I mean, look, ultimately progress is measured sort of through the eyes of our users.  More than our investors or our P&L or anything else, it’s through the eyes of our users.  We have 1.3 billion people using PCs today.  There was a time in the ’90s when we were sure there would never be 100 million PCs sold a year. Now there will be 375 million sold this year alone.  So, is it a lost decade?

The stock market has always had its own meter.  Sometimes it’s ahead of itself, sometimes it’s behind itself. A broken watch is right twice a day.  Ultimately all Microsoft can do is focus in on doing exciting products…

Okay, Steve, we agree.  Microsoft needs to deliver exciting products.  Now here is the part you REALLY need to understand:  it has failed to do so under your tenure.  There have been few exciting products from Microsoft for a LONG time.  The Lost Decade is not only a failure to deliver shareholder value, it is a failure to deliver exciting products.  When you have delivered them, they’ve been accidents and not in your core businesses.  Time to change that or get someone who can.  Incidentally, this is absolutely true for Yahoo as well.  They quit being exciting when they quit delivering exciting news.  On the Internet, everything is a product.  If your “product” is not exciting, you lose.

The high level summary of why Ballmer and Mayer face the same problems at Microsoft and Yahoo boils down to both failing to deliver exciting product often enough to matter in recent years.  Microsoft has had slightly better network effects to slow their decline (helps when you control an OS!), but the eventual outcome will be the same as it has been for Yahoo.

GigaOm wonders if Microsoft can recover its superpowers

Great continuation on the failure to deliver exciting products theme.  Consider these quotes:

To put it in the simplest terms, Apple makes products that people are crazy about and will stand in line all night to buy. When was the last time you saw a Microsoft product that inspired that kind of devotion?

Microsoft’s tried-and-true model of chipping away at a product category over the years until it got it right (usually around release 3)  isn’t applicable in the web era of continuous updates.

Of course, there is always someone around who will opine that the lack of quality product is simply a lack of focus.  For this article, Harvey Lubin says:

They have started to compete on too many fronts, against too many competitors.They want to beat Apple at computer hardware, and mobile services. They want to beat Google at Web search.They want to beat IBM at servers. They want to beat Sony & Nintendo at gaming. By trying to do everything, they end up doing none of them very well.

If it were truly a lack of focus, there would be some exciting products and a bunch of also rans.  That’s not really the case.  What we have is a lack of culture or talent that is capable of producing the exciting products.

Ars Technica gave us the Mac Fanboy perspective which is “Why did you bother, you can never be as great as Apple.

Well of course they did pretty much eat the Mac’s lunch for many years, so it actually is worth bothering and for the first time in years Microsoft shows signs they actually might still be able to bother.  Chill dude.

On a more positive note, Larry Dignan notes that Microsoft has a Killer Product Cycle Underway

He’s right, this is a killer product cycle for Microsoft.  Their problem has been that killer cycles happen too seldom.

What’s Next for Microsoft and Yahoo?

As I’ve argued, Microsoft and Yahoo are in the same place.  We may argue about the matter of degree, but both are once-great empires that have disappointed customers and shareholders for a long time.  They are each reaching inflection points where it will be increasingly hard to recover if they don’t take prompt action.  But what should that action be?

First, let’s take a moment to recognize each company gets one more get out of jail free card.  Microsoft gets it because the Windows/Office release cycle is the best they’ve had in years.  Yahoo gets it because nobody expected the likes of Marissa Mayer would take their CEO job.  In other words, we have a temporary willing suspension of disbelief.  The key will be to act in a way that extends that into lasting momentum.  To do that both companies need to produce exciting products at a rate that establishes and builds momentum.  That’s what vibrant tech growth companies do, and it is what has been lacking from these two for way too long.

Marissa Mayer and Steve Ballmer face the same problem:

How do they reignite a steady stream of exciting product launches to rebuild their company’s momentum?

If they each accomplish nothing else in the next 12 to 18 months, there are two key things that they both must do to set the stage for that kind of momentum:

Microsoft and Yahoo Must Both Achieve Agility

Ballmer and Mayer must make their organizations demonstrably agile.  The days of 3 year product cycles for Microsoft are long since over.  Ballmer needs to put a stake in the ground that we will see updates for all the key products with betas out in 12 months and shipping in 18 months from now.  Mayer should do the same for Yahoo. Then they must deliver those results against that schedule, and they must sharpen the pencils still further until they can do 12 month product cycles.  Once having gotten that religion, they must never let more time than that pass without impactful releases of all their key offerings.  The world simply changes too quickly these days, and cycles any longer than that leave companies struggling to stay relevant as they miss one key trend after the next.  As any student of OODA Fighter Pilot tactics will tell you, once you get inside the other guy’s decision loop and make him respond to you, your victory is only a matter of time.

That doesn’t mean shipping mediocre products just to say you shipped something.  Microsoft, that doesn’t mean you’ll get your standard high dollar upgrade fees every 12 months either.  It means you will make it happen, “it” being shipment of a release that really moves the ball forward.  Every 12 months.  Without fail.

If you can establish that kind of momentum, that kind of agility, many benefits will accrue.  You will start to control the agenda as others respond to your initiatives instead of vice versa.  You will attract and retain good talent as they see the opportunity to do something that matters in the near term.  Momentum is key for tech companies.  If a shark stops swimming, it dies.

Microsoft and Yahoo Must Both Articulate and Demonstrate a Product Vision Worth Getting Excited About

Establishing agility is almost a mechanical process.  Yes, it will require enormous cultural upheavals and force of will.  But it is not like trying to schedule that Einsteinean flash of insight that is sometimes called for.  Unfortunately, the second of the two key things you must do is closer to requiring Einstein.  Establishing an agile cycle will help, and you probably have enough stuff on the drawing boards to get through the first cycle with flying colors.  But to go further, to have it all make sense and not just be a rambling features-gone-amuck kind of release cycle, you must have Vision.

This has historically been tragically missing from both companies.  At best, Microsoft has had a Vision to commoditize other people’s ideas, and lately it has fallen far short on that.  Yahoo’s Vision seems to have been to grab up one shiny plaything after the next and claim to be a great media company amassing playthings in a meaningful way.  Not much of a Vision (I use the capital “V” advisedly).

Marissa Mayer may be a Visionary capable of producing that capital “V” Vision, but Steve Ballmer most assuredly is not.  Steve, you’re going to have to get someone in there who is.  Possibly more than one someone’s.  You’re going to have to empower them and you’re going to have to stay the Hell out of their way.  Like Clint Eastwood told us, “A man has to know his limitations.”  This will be extremely hard for Microsoft, which has confused a Product Management Culture with having Vision.  Product Managers mostly only have lower case “v” vision because they listen to customers too much.  They let customers define how the problems will be solved instead of sticking to describing what problems they have.  Despite what MBA school teaches, checking off every request some customer made never results in Vision.  It’s better than nothing, but not much better.  Steve Jobs was never even interested in what problems customers have and went out of his way to make sure they had little input into how the problems he deigned to solve would be solved.  Marissa, if you are not a Visionary, and very very few CEO’s and other successful people (let alone Product Managers) are ever self aware enough to know when they are not Visionaries, you have the same problem as Steve.  You’re simply better equipped as a product person to understand how to help realize the Visions of others.  But if you aren’t the Visionary, you will need to get some in there quickly.

Visionaries are rare indeed, for they are the ones with crystal balls that actually work.  They see clearly how insanely great things could be, and what it will take to get there.  They are unfettered by considerations of how things are today and often whether things will even seem possible.  They ignore Wall Street, pundits, analysts, and customers alike.  Losing their Visionary or even more commonly failing to ever have a Vision that can withstand the test of time is the most common reason Tech companies die.  Visions can be accidental.  Accidental Visions turn out to be proxies for the real Vision.  Minicomputers are a great example.  They were closer to being commodities than Mainframes, but they fell well short of commoditizing computing power the way PC’s did.  By and large their luminaries never figured that out, or if they did, they were unable to do much about it.  Proxies are dangerous, because they work for a time.  Companies worship these false prophets for way too long when the proxies cease to track the real prize closely enough.

Large companies can only find real Visionaries by looking for people who have been right more than once, and never right because they rode somebody else’s wave.  Having found one of these rare unicorns, Visionaries are often completely at odds with the skillset needed to survive in large organizations.  They are not politically savvy (or don’t care).  They do not do well in meetings.  They do not crave gigantic staffs to manage.  They will not suck up at the expense of doing something they know is wrong, or even a little bit less right.  They are prickly and uncompromising.  Yet, you must not only find them, you must prop them up and make them successful despite all the antibodies the entrenched burocracies at Microsoft and Yahoo will generate to try to expel them.  It’s not going to be fun, but the alternative is a continuing slide into irrelevance at the hands of the Visionaries in other companies.  That’s even less fun and you’ve had a taste of what that’s all about.

Are you still hungry enough to do what it takes?  Do you want to win?

Good.  Because now you know what you need to do.  Let’s get on with it–time is short.

Posted in apple, business, Marketing, strategy | 4 Comments »

Twitter’s Biggest Problem: Brevity

Posted by Bob Warfield on July 2, 2012

Twitter CEO Dick CostoloThere are many rumblings these days about Twitter’s recent changes blocking LinkedIn from putting Tweet’s into their streams.  Lots of different reactions from various folks:

-  From Twitter’s perspective, they’re trying to deliver “a more consistent user experience.”  We can paraphrase that one as, “We can’t run ads if you don’t come to our site, so we have to block you.”  This is one of many direct examples where advertising creates a nasty conflict of interest between a large audience and the folks who really pay the bills.  It’s one reason why ad-driven business models are more likely to treat their audiences like cattle to be harvested and milked.

-  Owen Thomas points out over on Business Insider that Twitter’s own Facebook app does cross posting.  Well, that is a bit inconsistent, isn’t it?  Apparently Twitter believes it can live without LinkedIn, but not so much Facebook.  Looking at these three services, I think that’s an astute assessment, but time will tell whether they cut out Facebook too.

-  Mathew Ingram warns Twitter to be careful of what happened to MySpace and Digg, who both alienated developers with these sorts of changes.  Mathew agrees with me on the reason for Twitter’s move, “Twitter wants to control the network as tightly as possible so that it can monetize it more easily,” but he goes on to point out that there are downsides to the simple greedy strategy (as there always are).  He points out that the developer community is not happy with these quotes:

Twitter was trying to shut down third-party services so that they could “inflict a homogenized, boring, monoculture on their user base [that] they can monetize, which will make the experience progressively worse.”

Says turntable.fm developer Jonathan Kupferman in a tweet, “Twitter seems to be mercilessly killing all developer apps of any interest businessinsider.com/twitter-linked… Light the match, hello 

John Abell of Reuters points out, “Twitter’s value is its integration with other networks. Cutting them off is like being on the wrong side of history.”

Ingram concludes by pointing out that MySpace and Digg, “started to hemorrhage users because it focused more on monetization through ads and other elements than it did on maintaining a good experience for users.”

-  Dalton Caldwell laments Twitter having chosen the advertising route instead of becoming the Internet’s real-time API.  In the beginning, Twitter was great to many developers precisely because it had an early API that made a lot of sense for things these developers thought were very cool.  Not so much anymore.

-  Nick Bilton of the NY Times calls this latest Twitter move a, “Cacaphony of Confusion” for Twitter owned apps and sites.  He points (among other things) out that if what Twitter wants is a more consistent user experience, starting with Twitter’s own apps is not a good idea.

There were not many positive responses, save for the occassional, “We can make lemonade from this lemon” post, or the other stock-in-trade for Internet Hysteria which was Anil Dash’s missive about how the Web was over reacting by a lot.  He chides the developers for feeling hurt because Twitter is finally readily to appeal to the great unwashed instead of being their personal playground.  He claims this will all ultimately be healthy for the ecosystem because it cuts down on ‘bots Tweeting spam.  Except it doesn’t because I can still push articles from LinkedIn to Twitter, just not vice versa.  Hmmm.  So much for that kind of logic.

Twitter’s real problem here is ironic:  it’s own Brevity limits the options for what it can do.

Look, you only get 140 characters.  There’s nothing left if you try to divide that into something smaller.  If you have something like a blog post, you can link to the frickin’ blog post and there’s ample reason to go there.  With Twitter, why bother linking?  Just put the whole Tweet in the article and save people the trouble.  They can read 140 characters faster than they could click through, possibly have to sign in, get oriented, and read it in situ.

I’ve written along similar lines before when I said that Twitter’s biggest problem is the Tweets themselves are ads.  I’m not the only one.  I’ve heard many a person quip that Twitter is write only and never read, or that it’s just bots Tweeting headlines back and forth about one another.  So many have gamed the service to get more followers for their own ads, I mean Tweets, that it’s a joke.  Robert Scoble has gone round and round and seems to choose his latest Social Dingbat of the day based on which one is the easiest to game into another huge crush of followers in the shortest time.

Is the ecosystem really going to be improved by what Twitter is doing?  Can it fix this problem that Tweets are ads?  And what can you do with high quality non-ad/non-bot Tweets?

I don’t think they will fix the ecosystem.  As I said, they want to make it easy to add Tweets via API’s, they just don’t want you reading them in that way.  And to actually separate the wheat from the chaff is not something they’re directly incented to do.  They want to live on the advertising model.  And, to keep a consistent user experience, that’s only going to work if the ads look just like Tweets.

It’s a vicious cycle.  Don’t expect it to end any time soon–instead, expect it to get much worse.  They’re making a final monetization dive bombing run to get to a liquidity event.

Lastly, entrepreneurs and geeks, don’t bet the farm on Twitter.  They are not in business to help you.  Quite the opposite these days.  They’re in business to collect ad revenue.

Posted in business, Marketing, Web 2.0 | Leave a Comment »

 
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