Wednesday, December 17, 2008

Advertising on Internet Video Sites Slow

Over the last few years, the landscape of television has changed drastically. Viewers have gone from scheduling time around specific programs, to watching many of the same shows at their own leisure. One of the major questions many networks and industry officials have had to answer, deals with the legality of watching their content online.

The way in which Fox and NBC dealt with this change was the partnership in creating Hulu. Today Hulu included movies and television shows from a variety of networks that are free and legal to watch through the support of its advertisers.

I personally, am a huge advocate of Hulu. I get to catch up on episodes of The Office, recent Saturday Night Live skits (which were great during the pre-election coverage), The Daily Show (when I feel like watching it), and I started watching a show, Burn Notice, only because of its presence on Hulu.

I'll get off of my Hulu pedestal, and on to the article (found here). With the downturn of the economy during the fourth quarter this year, many companies have been forced to trim their budgets. Partially because there is not a full understanding of online video, multiple formats, and increased quality programming from internet companies rather than network websites, many companies in need of cutting their marketing budgets, have looked to their online video advertising.

Advertising on regular television has been projected to fall almost 2% next year and 5% in 2010. Conversely, the amount of money spent advertising on digital video sites has increased, the expected growth will not happen as quickly as originally anticipated.

With my addiction to Hulu, I am enjoying the conversion to watching shows I enjoy at my convenience. With this mindset taking hold, the landscape of television will continue to change. My feeling is when the economy begins to turn around, advertisers will soon be putting greater percentages of their budgets into online video content.

Wednesday, December 10, 2008

AOL's Big Bet: Bebo

In light of our previous class assignment on Web 2.0, a number of social networking sites were described. In Wednesday's Wall Street Journal, Emily Steel wrote an article, titled, "AOL Readies High-Stakes Social-Media Debut." It can be found using the following link.

In summary, this past March, Time Warner purchased Bebo, a social networking site (meaning Blog Early Blog Often) for $850 Million. Currently, Bebo is ranked third behind MySpace and Facebook in terms of unique visitors per month. Among the hopes that AOL has for Bebo is to grow to include all the users of its AOL/AIM instant messenger programs, which could be about 125 million people. AOL projects that in the near future, most internet users will use social networking sites, specifically Bebo as their homepage or launch pad to the internet, combining email accounts from Yahoo and Google, news feeds, and online video. One of the recent feature Bebo has added is the integration of the AOL Instant Messaging and Skype on the website, for broader communication between its users (Similar to Facebook Chat). While Bebo is only currently attracting slightly less than 6 million unique visitors a month, that figure has increase 34% this past year, comparing to the almost 75 million and 46 million visitors for MySpace and Facebook respectively.

The biggest question that faces the value of social networking sites are the value they posess for advertisers. Some critics of AOL think that they overpaid. I think I tend to agree with that opinion. However, reading this article showed me that Bebo has done more to allow third party access to add entertainment features to the site.

Bebo's biggest roadblock is increasing membership. Competing with Facebook and MySpace is tough. If there are many users like me, I personally only want to have one profile to manage. I use Facebook. I waste too much time on the site as it is. Even though Facebook is not currently an ideal space to start browsing, if it eventually does have characteriscs like Bebo mentioned in the article, I do not think I would like it. I get easily distracted. I like the social networking as a piece of my browsing experience, not my starting point.

Wednesday, December 3, 2008

Auto Industry Needing a Tune-Up (and More)

The title of the article I chose is, "Big Three Seek $34 Billion Aid: GM, Chrysler Warn of Collapse This Month as Lawmakers Explore Bankruptcy."

It can be found at:
http://online.wsj.com/article/SB122823078705672467.html?mod=todays_us_page_one


I picked this article about the auto industry because, for as long as I can remember, I have been a "car guy." I watch motorsports, read car magazines, I love to draw cars, and (keeping my fingers crossed for GM) hope to own a new Camaro when they are produced.

Some of the points in the article include that GM needs $4 billion to stay afloat this year, and $18 billion total. GM states that it may look to cutting or selling-off brands like Pontiac, Saab, and Saturn, and reducing their debt by $30 billion through consolidating operations and other methods. Chrysler needs $7 billion immediately in order to meet payments, expenses and other cash flow need for the first quarter of 2009. Chrysler says that they will be cutting their workforce and CEO Bob Nardelli will work for $1 in 2009. While GM says that it could break-even (in North America) by 2012, Ford looks like the brightest of the three, claiming it can return to profitability in 2011, in addition to using funds to introduce more fuel-efficient and alternative fuel vehicles.

The first time that the auto industry executives traveled to Washington a few weeks ago, they drew well deserved criticism for flying in seperate private jets, and were unable to secure any financing. As they returned earlier this week, by traveling in company cars touting their latest hybrid or fuel technologies, and additional details were released, giving an even worse outlook for the companies. GM said they could no longer make it to 2009 with the cashflows they currently have, and are banking on recieieving a federal bailout. I am worried for GM because their executives said "there is no plan B." Pundits have thrown around the word bankrupcy with GM for over a year, and their executives still agree that it is not an option. Drastic change is coming to the American auto industry. If not through bankrupcy, then through massive reorganization and structure.

There seems to be new information coming out daily with the auto industry and how they are coping with this historic times. Their survivial is important not only for their stakeholders, but for the rest of the world economy.