AT&T, Sprint Nextel, Verizon Among Top-10 Social Networking Advertisers

AT&T was the leading display advertiser on social networking sites in June 2009, Sprint Nextel was the fourth-biggest and Verizon Communications was the 10th largest advertiser on social networks that same month. About 80 percent of all social networking display ads were placed with just two sites: MySpace and Facebook.

Though most of us probably have not been paying attention, social networking sites quietly have grown to represent more than 20 percent of All U.S. online display impressions, according to comScore Ad Metrix.

MySpace and Facebook each represent nearly 10 percent of total U.S. online display ads, and then there is a classic long tail of advertisers each representing a fraction of percentage point of the overall online display advertising market.

The reason spending is shifting to social networking sites, and to online venues overall, is that advertising ultimately follows people. And leading U.S. communication companies have moved aggressively to follow their potential customers to social networking.

“Over the past few years, social networking has become one of the most popular online activities, accounting for a significant portion of the time Internet users spend online and the pages they consume,” says Jeff Hackett, comScore senior vice president.

“Social networking sites now account for one out of every five ads people view online. Because the top social media sites can deliver high reach and frequency against target segments at a low cost, it appears that some advertisers are eager to use social networking sites as a new advertising delivery vehicle.”

In the month of June 2009, AT&T got two billion impressions (the number of times an advertising item is seen, heard or watched), representing about 30 percent of AT&T's total advertising impressions for the month, across all media. AT&T's social networking ads were seen by more than 87 million unique people during the month.

Sprint Nextel served up 790 million impressions, representing more than 26 percent of its total ad impressions during June 2009, and was seen by 68.6 million unique visitors.

Verizon Communications represented 435 million impressions, representing 10.5 percent of its June 2009 ad impressions, and reaching 54 million unique visitors.

All of those are bigger numbers than I would have guessed.

Clearwire Activates 10 More Markets

As Clearwire activates 10 additional markets, it also is elaborating on service plans that offer casual use in addition to the more-standard monthly subscriptions.

The new markets include Boise, Idaho; Bellingham, Wash.; and eight Texas markets, including Abilene, Amarillo,Corpus Christi, Killeen/Temple, Lubbock, Midland/Odessa, Waco andWichita Falls.

Clearwire mobile and residential plans can be purchased by the day or by the month. Home Internet service plans start at $25 per month; while mobile Internet plans start at $35 per month, or customers can purchase a convenient mobile day pass for $10.

For a limited time, customers can also choose the "Pick 1 Unlimited" plan; offering an unlimited home or mobile Internet for $22.50 for the first three months and $45 per month thereafter.

Equipment options include USB modems for PCs, including WiMAX-only or dual-mode modems that allow roaming on Sprint’s nationwide 3G network service whenever the Clear 4G service is not available.

Pricing for modems start at $49.99, after instant rebate, or may be leased for prices as low as $4.99 monthly.

For residential service, modems can be purchased for $69.99 or leased for just $4.99 monthly. Residential customers can also add in-home voice service with purchase of the "Clear Voice Adapter" for $15, and receive unlimited local and long distance service for just $25 per month.

With the "Clear Spot," any existing, off-the-shelf Wi-Fi device (802.11b/g) can connect to Clearwire’s 4G WiMAX network. The Clear Spot creates a personal Wi-Fi hotspot that travels with consumers anywhere they happen to be within CLEAR’s mobile WiMAX service area.

This $139.99 device is a portable, battery-powered router that seamlessly connects up to eight standard Wi-Fi-enabled devices (computers, mobile phones, portable gaming, consoles, cameras). The Clear Spot is compatible with both the Clear 4G and Clear 4G+ mobile USB dual-mode service options.

Clearwire also sells Intel Embedded WiMAX laptops, including the Dell Studio 17, Studio XPS 16, Latitude E4300, Latitude E6400, Latitude E6400 ATG, Latitude E6500, Precision M2400, Precision M4400 and Vostro 1220.

The company also offers the Fujitsu LifeBook P8020. WiMAX-ready laptops from Lenovo include the ThinkPad line: SL400, SL500, X200, X200s, X200 Tablet, X301, T400, T500, W500 and W700.

Samsung offers the X460 notebook as well as the NC10. The Samsung Mondi is a mobile WiMAX-enabled handheld device.

Leap Wireless Seeks $8.6 Million in Broadband Stimulus Funds

Cricket Communications, which owns Leap Wireless, has applied for a $8.6 million broadband stimulus grant in partnership with One Economy Corporation, to provide 23,000 low-income families primarily in Baltimore, Houston, Memphis, San Diego and Washington, D.C. with sustainable, innovative broadband access and digital literacy training.

Project Change Access would furnish subsidized, low-cost wireless broadband using Cricket’s 3G wireless network.

One Economy would provide targeted and localized content for education, employment, and health care through its multiple online portals, in addition to training.

Clearwire Seeks "Modest" Broadband Stimulus Funding for 2 Markets

Clearwire says it has applied for a "modest" amount of broadband stimulus funds to bring new service to underserved areas within Detroit and Puerto Rico, two areas that were not otherwise part of Clearwire’s current business plan.

Clearwire also announced its plans to affiliate with a limited number of other grants submitted, as a spectrum and technology partner, covering additional territories in five states.

These stimulus-related projects would have no significant impact on Clearwire’s funding or build-out plans, the company says.

As it appears fewer telcos applied for funds than might otherwise have been expected, it is possible that fixed wireless providers will have a relatively high profile amongst service provider applicants in rural areas.

8x8 Adds Web Conferencing

8x8, has introduced new Web-based conferencing service to its existing portfolio of business communication offerings for small to medium sized businesses.

The first in a series of new unified communications services to be introduced over the coming months, the "8x8 Virtual Meeting" Web conferencing service is an online collaboration tool accessible instantly (no software download required) from any web browser and any computing platform.

Available as an add-on service for existing 8x8 customers or as a stand-alone offering for new subscribers, 8x8 Virtual Meeting lets users conduct centralized online meetings, complete with integrated voice conferencing (to and from any telephone or web browser platform), presentation slide sharing, desktop and application sharing, instant messaging, chair control, conference control and call recording, with up to 50 participants per conference.

Free Press Asks for Future-Proof National Broadband Speed Definitions

The Free Press has filed comments wtih the Federal Communications Commission asking for a "future-proof" definition of "broadband" that takes into account the services and applications consumers can use, especially high-quality video communications.

Derek Turner, research director of Free Press, says the definition has to be flexible, evolving over time and not unduly restricting speeds or capabilities.

In all likelihood, though service providers will likely always have some differences with Free Press, broad agreement on standards that relate more to capabilities than specific immutable numeric targets makes good sense.

Everybody believes speeds will continue to increase over time, but carriers obviously do not want rigid standards set that distort investment priorities or have negative implications as far as raising investment capital to build those capabilities into networks.

Free Press, on the other hand, does not want targets set so low that carriers do not have incentive to keep upgrading.

The good news here is that a greater degree of understanding about broadband standards seems to have developed over the past couple of years, between policy advocates and industry suppliers.

Verizon to Introduce New Feature Phone Data Plans

“Enhanced Multimedia Phones” using an HTML Web browser, EV-DO Rev. A and a QWERTY keypad, and sold by Verizon Wireless starting in September 2009, apparently will be sold with a new data plan, according to the Boy Genius Report.

Apparently the Samsung Rogue is the first new Verizon handset to meet the criteria. The idea, clearly, is to monetize expected bandwidth use--expected to be light--by customers buying those phones.

One of the new data plans costs $9.99 for 25 MBytes while the other costs $19.99 for 75 MBytes of monthly usage.

The assumption is that users of such devices will mostly want access to email and light Web access on an occasional basis. The data caps might appear at first glance to be paltry, but Verizon Wireless undoubtedly has done enough data mining of its current customer base to set the caps in an appropriate way.

Heavier users of course have the option of buying the other standard data plans.

Not all users will be happy about the new charges, but they will be even less happy about charges for casual use, set at $2 a Mbyte.

Sprint Sells HTC Touch Pro2

Sprint Nextel will begin selling the Windows Mobile-based HTC Touch Pro2 on Sept. 8, 2009, for $349.99 with a two-year service agreement and after $100 mail-in rebate. The touch-screen device features the more-popular slide-out QWERTY keyboard and a 3.6-inch tilting screen.

Additional business features available on HTC Touch Pro2 include International Quad-Band capability (CDMA, GSM), full HTML browser from Opera, stereo Bluetooth wireless technology, WorldCard Mobile Business Card Scanner, Facebook integration and Linked inboxes, which link personal and work contacts. A 3.5 mm headphone jack, a microSD card slot and an auto-focus 3.2 megapixel camera/camcorder also are standard.

As does the Palm Pre, the Touch Pro2 organizes messages across message formats, so that voice, text or email messages from a single person can be searched "under a single contact card," HTC says.

Sprint appears to be bundling the device, or suggesting it be bundled with, Sprint TV and Sprint’s sports applications NFL Mobile Live and NASCAR Sprint Cup Mobile.

Without knocking either the device or the way Sprint Nextel envisions the user scenario, the launch illustrates the complex problems marketers now are having in positioning specific devices and network features.

"Smart phone" doesn't cut it, in many ways. HTC seems to have developed the Touch Pro2 as a business device, aimed at users who want to do things like participate in conference calls. But it seems to me a confusing positioning to emphasize entertainment applications for such a device.

That isn't to say people aren't increasingly interested in devices that bridge the work and personal spaces, but simply that the positioning of the Touch Pro2 would more logically have been as an enterprise tool for users who think conferencing on a mobile is a more compelling feature than simple email handling, which RIM seems to have staked out, or the simple Web surfing niche, which Apple now "owns."

"Conference in your pocket" would seem a better fit between end user niche and the device's native capabiltiies. To be sure, Sprint is emphasizing "stay productive" in its messaging. And perhaps that is where Sprint should be developing messaging around this specific device, as tough as that is. The references to Sprint TV--to me, at least--conflice with the "collaboration tool" features of the device.

HTC’s Straight Talk technology enables the Pro2—with carrier cooperation—to transition from an e-mail to a single- or multi-party conference call, as well as having the ability to offer itself as a conference room–like speakerphone system.

Straight Talk technology, according to HTC, includes a mechanical and acoustic design that allows it to offer a speakerphone experience similar to those in boardrooms; asymmetric speakers and noise suppression technology with full-duplex acoustics deliver a “high-fidelity voice and sound experience.”

That's the end user niche it seems to me Sprint Nextel should not stray from with this particular device.

Mobile Broadband Makes a Shambles of "Broadand Penetration" Statistics

At the end of 2009, Forrester expects mobile Internet penetration to reach 17 percent in Western Europe, the same adoption rate for the PC Internet a decade ago. If the growth rate remains the same, mobile broadband would hit something on the order of 60 percent to 70 percent penetration in 10 years.

That would make a shambles of efforts to quantify broadband penetration in Western Europe, as similar trends in the U.S. market likewise would make most current concerns about broadband penetration likewise irrelevant.

We have seen this sort of thing before in the global communications business. Policymakers used to wring their hands about voice penetration in developing countries. But monthly costs of $5 to $10 a month now are making mobility the way many people are getting access to voice. Increasingly, wireless handsets will be the way most people in developing regions get access to Internet communications and applications as well.

U.S. policymakers thought a major revamp of communications policy would spur competition in voice, almost precisely at the point that Internet applications were about to make those concerns, if not moot, then of much-lesser concern.

Forrester expects mobile Internet to grow to 39 percent penetration by the end of 2014. That's a lower end point than for the PC Internet in 2004, but the growth curve per se looks quite the same, Forrester Research says.

Netbook Growth Rate Twice That of Notebooks

If you have looked around the table at your last conference room meeting, you have noticed that netbooks already have grabbed significant user share. A new study by NPD Group confirms the traction. In the second quarter of 2009, the netbook segment grew 40 percent sequentially, while notebook sales grew 22 percent sequentially.

In some markets, such as China and Latin America, netbook sales already are greater than notebook penetration.

Still, the installed base of netbooks is about 22 percent of the portable computer market. Asus, the pioneer in mini-note PCs, has been steadily losing share because tier one brands like Acer, HP, Dell, Lenovo and Toshiba have become increasingly aggressive in the segment, NPD Group says.

In many regions, telecom providers have been offering subsidized mini-notes for several quarters, which helped propel growth. In Western European countries, a number of telecoms are subsidizing 100 percent of the price of the mini-notebook devices when the customer signs a two-year data plan contract.

Mini-notebooks have been a significant contributor to the growth in the portable PC market as their very attractive price points make owning a secondary computer viable for many consumers.

Suppliers generally seem to be differentiating notebooks from netbooks by screen size. At about 12 inch screen sizes, netbooks start to overlap with notebooks. Some suppliers likely want to increase average selling prices for netbooks, but price is probably the reason so many netbooks have been sold.

Hulu Cannibalizes Pay Per View, DVR

There's one take-away we ought to gain from looking at the number of subscribers to multi-channel video entertainment services or users of Hulu.

And the take-away is that Hulu cannibalizes pay per view or on-demand programming or digital video recorder income that otherwise might be gained by linear video providers.

On the other hand, we might also note that the revenue potential to be gained from time-shifted services is not all that great at the moment.

The issue is much the same as now experienced by content publishers in most other areas. Namely, that although online distribution costs are lower, revenues are much lower. There remains a revenue gap for online distribution compared to legacy distribution that is not yet fully understood, yet.

Some service providers think the answer might be "TV Everywhere," where a user paying for a linear video subscription can watch that content on mobiles or broadband-connected PCs. The business issue there is just about as challenging: the revenue comes from keeping a multi-channel video subscription. Most of the rest of the distribution is just cost.

The Difference Between Video and Music Business Models

The video business is different from the music business in one significant respect: where people routinely prefer to own their personal collections, they rarely want to "own" news, sports and most serial TV fare. That has some fairly signficant implications for business models. "Buy to own" makes logical sense for consumers of music. "Rent to view" makes more sense for most video and movie fare.

The historic example is the difference between adoption of cable TV and adoption of subscription music services. There are perhaps 20 million XM Sirius subscribers, compared to 63 million cable TV subscribers, plus three million telco video subs and 31 million satellite TV subscribers. In other words, there are 97 million video subscribers, compared to 20 million XM Sirius subscribers.

Most video watchers want to see news, sports and other events only once, movies once or twice. Most music listeners want to own and listen to some favorite songs over and over again. That suggests a stronger market opportunity for video subscriptions, compared to music subscriptions, and a larger market for on-demand video than on-demand music streaming.

iPhone to Go Multi-Network in 2011?

One likely would bet against Apple extending its exclusive U.S. distribution deal with AT&T past 2010, based on market share statistics gathered from around the world, including markets where Apple has an exclusive carrier partner as well as markets where Apple has a multi-partner distribution. Consider the Frech market, where Apple has multiple distributors.

"In France, the company now enjoys dramatically higher market share (in the 40 percent range vs. about 15 percent in ROW) than in countries with exclusive carrier agreements (such as AT&T in the U.S. where the iPhone has market share in the mid-teens).Gene Munster, Piper Jaffray senior research analyst.

Those market penetration figures should prove more compelling than the lower revenue per iPhone unit Apple gets in countries with multiple distributors, Munster argues.

Smart Phones, Broadband: Less and More, Respectively

One never should mistake media hype for end user reality. At the moment, perhaps 10 percent to 11 percent of U.S. adults actually use an iPhone, a BlackBerry or any other "smart phone." Most of the market has yet to adopt any smart phone.

Conversely, the mass media, and some within the specialized communications media, continue to insist that there is a major problem with broadband access. There are isolated issues, to be sure. But 70 percent of U.S. adults now use the Internet. Average household size is about 2.59 per home. About 74 percent are 18 or older. So adjust the household stats to 1.9 adults 18 or older per home.

Assume those 1.9 adults share a single fixed broadband connection at each location. In other words, a 70-percent "per capita" use of fixed broadband does not directly translate to "70 percent household penetration."

Conversely, 30 percent of U.S. adults do not use the Internet, according to Rubicon Consulting. Assuming those non-Internet-using households have the same average size as Internet-using homes, one might roughly assume that broadband penetration of U.S. adults is less than 70 percent, as studies suggest perhaps six to 10 percent of Internet users use dial-up connections.

Assume dial-up households also have the same size characteristics as Internet-using and no-Internet households. Then we might argue that between 60 percent and 64 percent of U.S. households now buy fixed broadband service. But those 60 percent to 64 percent of U.S. homes represent more than 90 percent of all Internet users.

In fact, if one adds users who use broadband at work, at libraries, using public Wi-Fi or mobile broadband, it is likely that more than 95 percent of all Internet users in the U.S. market already use broadband access the way they would prefer, given all their other buying choices.

The point is simply to keep in imind that what people talk about in the media is not necessarily fully reflective of reality.

Smart Phones Start to Differentiate, Because Users Do

Smart phone uses are starting to self sort themselves by lead application, it now appears. Though much could change as adoption becomes more mainstream, it now appears that Apple iPhone users value Web access while RIM BlackBerry users value email. To a lesser extent, Palm users favor calendar apps.

Patterns for users or Microsoft and Android operating system devices are less distinct. But that might be one reason new sales of Microsoft-OS devices are declining, relative to others. To the extent there is any distinction, Google G1 users put heavier emphasis on maps.

The clearest example that users are segmenting themselves by applications is that "the best-selling smartphones are the ones that most strongly associate with one or two particular features," says Michael Mace, Rubicon Consulting principal.

BlackBerry and iPhone each have one or two standout features that more than half their users rank as extremely important, he says. As you would expect, email access is unusually important for BlackBerry users.

BlackBerry users are also much more interested than average phone users in web browsing and calendar. Blackberry users are substantially less interested in price, size of the phone, and address book management.

The priorities of iPhone users are dramatically different from either typical mobile phone users or RIM users, says Mace. Browsing was the iPhone users’ top feature, followed closely by email.

But iPhone users were much more interested than RIM users in music, maps, 3G, and the ability to add new software.

The Windows Mobile user profile is similar to that of the BlackBerry, but less distinctive, says Mace.

The priorities of Windows Mobile users are similar to Blackberry users, with the exception that Windows Mobile users are a bit less focused on email and more interested in adding new software and using maps. But no single feature was noted by more than 40 percent of Windows Mobile users, indicating that it doesn’t have a very distinct feature identity in the market.

Palm users were also somewhat similar to RIM users, with the exception that they were quite a bit more focused on calendar functions, which was cited as the number one feature. But compared to Microsoft users, email and browsing were ranked less hihgly.

"It appears that RIM and Apple are siphoning off most of the people who care the most strongly about browsing and mail," says Mace.

"Calendar scored higher among Palm users than among any other platform, which probably fits with Palm’s roots as a PDA company," he notes.

But Palm application patterns do not have as distinct an identity as Blackberry and iPhone do.

Compared to all the other smartphones, the Google G1 “GPhone” has the least distinctive feature profile. It is cited for maps more than any other phone, but only 30 percentof users call that a top four feature. Relatively few G1 users said browsing is a high priority. Instead, browsing ranked far below iPhone, and on a par with RIM.

That may indicate that the marketplace has not yet decided what an Android device "is." BlackBerry is email, iPhone is Web browsing. Neither Palm, Microsoft nor Android seem yet to have grabbed a clear and distinct niche within the smart phone market.

These findings are important for very broad reasons. I have long argued that voice is, in fact, not a "commodity." The latest Rubicon findings suggest that mobile phones and smart phones likely are not true commodities either. At least in the case of the BlackBerry and iPhone, users have self selected themselves based on behavioral differences.

If that is true, it also should be true that service plans, application optimization and other ways of appealing to a distinct market niche are possible. The Rubicon findings also suggest it is important for Microsoft, Palm and Android to find and cultivate a distinct market niche. So far, none of them seems to have succeeded to the degree Apple and RIM have.

In other words, there is no such thing as the "best smart phone" for every user. That decision depends on what one wants to do most. Smart phones are becoming more like automobiles, in that sense, then has been the case in the past. Roadsters, vans, trucks, subcompacts, SUVs and full-size passenger vehicles have different "lead" applications. So, increasingly, do smart phones.

The key insight here is that communications products and services are less commoditized than most of us typically assume. It might be hard work to differentiate, but it can be done.

Perhaps the worst case scenario would be for most smart phones to ultimately be seen as general purpose mobile PCs. That would destroy the ability to differentiate.