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My 2 featured articles for the week ending May 25, 2007:

Archived blogs for the week of May 14, 2007

1343 - May 15, 2007 - 1.24 PM EST

Online marketing can improve a lot

According to Media-Screen's "Netpop-Play" report, high-speed Internet users spend almost fifty percent of their overall spare time online.

Media-Screen's research states that the average Internet user spends about an hour and forty minutes of his or her typical weekday spare time online. Over half of that time was devoted to entertainment and communication.

The report also notes a range of users' spare time activities, and found that email and personal Internet surfing trumped TV viewing, sometimes by a large factor.

"The results were not that broadband users spend more time online, but that online marketing is still vastly underutilized in proportion to that time," said Josh Crandall of Media-Screen.

He added "currently, the proportion of advertising resources devoted to the Web (about 7 percent, according to Zenith Optimedia) is nominal, relative to the value it generates in interest and engagement among fans. As more of the population goes on the Web and there are more marketing channels, it will be imperative for the entertainment industry to know how to effectively allocate marketing and advertising dollars."

Estimates for U.S. online ad spending as a percentage of the overall market are based on Internet Advertising Bureau/PricewaterhouseCoopers data, and are similar to the Zenith numbers. About 10 percent of ad dollars will go online in less than three years from now, up from 6.7 percent in 2007.

Posted on Businessblog™

1342 - May 14, 2007 - 11.58 AM EST

Google to focus more on acquisitions

Google CEO Eric Schmidt said at the company's annual shareholders meeting that the company intends to increasingly focus on targeted acquisitions of smaller companies.

Google's CEO seemed to suggest that the company might be embarking upon a major aquisition spree. However, Schmidt didn't rule out more large-scale transactions akin to its recent purchases of YouTube for US $1.65 billion, and of ad firm DoubleClick for more than $3 billion.

Schmidt added "overall, we are more comfortable today than we were a few years ago in acquiring real businesses. However, we are not doing this for competitive reasons. We are doing it simply because it's part of building out a long-term portfolio."

Additionally, even more acquisitons are likely as Google finds additional opportunities in its offerings and beef up its technology selection, Schmidt noted. He added "For the short-term, I think the pace will accelerate, but it is not a fundamental shift and we are certainly not going to do it every day."

Google's acquisition strategy is important not only because of the direct impacts, but also because it has a significant ripple effect, with other players in the Internet content, search and advertising area often forced to react when Google makes an important move.

As an example, within a few days of Google's DoubleClick acquision (apparently out-maneuvering online rivals in the process) Microsoft was said to be in talks with another ad firm, 24/7 Real Media.

Shortly after, Yahoo acquired Right Media and word broke that Microsoft and Yahoo were talking a potential merger. However, those talks we soon nixed and both companies said there won't be any merger after all.

Despite all of this, Google will become involved in the consolidation trend now taking place in the traditional media and news delivery world, Schmidt said. Currently, Thompson Financial is bidding to acquire Reuters, and Rupert Murdoch's News Corp. has made an unsolicited bid to buy Wall Street Journal parent Dow Jones.

Schmidt said "a lot is going on right now, and we made a decision to focus primarily on user-generated content, and not on businesses where we would own the content." He also added that "it often makes more sense for Google to partner with such content owners."

Nevertheless, Google co-founder Larry Page suggested that the company remains interested in journalistic content, though it believes it can help democratize that content along the way. Read more...

Posted on Businessblog™

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