Seasonally Adjusted, 5% Job Growth in 2nd Quarter, Manpower Finds

Seventy-three percent of companies polled in a new Manpower survey said their will not hire employees in the second quarter. Though 16 percent report they will increase hiring, eight percent will cut, for a net gain of eight percent.

On a seasonally adjusted basis, hiring will increase at about five percent of businesses surveyed. That is up from a decline of two percent a year ago, Manpower says.

That 73 percent of firms plan no hiring is a record-tying high in the history of the poll, Manpower says.

The leisure & hospitality industry has a strong outlook and is hiring. So is the professional and business services sector.

The news tends to reinforce the views of economists and the Congressional Budget Office that U.S. unemployment will stay close to 10 percent though the middle of 2010.

That will almost certainly constrain consumer spending and activity in the housing market, suggesting a sluggish recovery.

There had been some hope, particularly early in the current quarter, that business activity had begun to pick up sharply. It turns out that companies were replacing depleted inventory and that core GDP was not improving in any measurable way, says Doug McIntyre, 24/7 Wall Street columnist.

McIntyre is skeptical the latest attempt at stimulus will work, either. The latest "jobs" bill will focus on direct credits for businesses that hire, more state aid, and more infrastructure investment, says McIntyre.

The theory is that these plans will mainline capital to the place where the employment problem is most acute–small and medium-sized business which tend to have limited access to credit, he notes.

But tax credits for hiring do not improve employment if companies see no increase in the demand for their products and services, he says.

The good news is that we are working our way out of the great recession. The bad news is that it appears to be a tough, dogged slog upwards.

One Problem with Smartphones: More Dropped Calls

U.S. wireless customer experience of wireless call quality has dropped over the last six months, according to J.D. Power and Associates.

Over the past six months, customer-reported call quality problems have increased significantly, from 11 problems per 100 calls in 2009 to 13 problems per 100 in the most recent study.

Dropped calls are on the rise, from four problem per 100 calls six months ago to six problems per 100 calls in the latest survey.

On average, smartphone customers experience problems at a rate that is 6 PP100 greater than problems experienced by traditional handset customers. In addition, smartphone customers are nearly three times more likely to experience dropped calls than are traditional mobile phone customers.

"Interestingly enough, consumers using less sophisticated (more traditional) handsets were nearly three times less likely to experience a dropped call than their smartphone counterparts," says J.D. Power.

A rational person might say those findings support the claims made by testing organizations that smartphone design can, and apparently does, have an impact on the ability of such devices to maintain calls, either because of mobile Web signaling interference or even smartphone design issues.

Frustration with call quality is often a leading reason why consumers choose to switch mobile carriers, J.D. Power notes. The study results show a PP100 rate six times as great (42 PP100 vs. 8 PP100) for consumers who report they “definitely will switch” providers in the next twelve months when compared to users who report they will “definitely not switch” carriers.

40 Ways the Internet Changed the World

Sometimes you need to put a face on things to understand a technology's impact.

Global Spending on Mobile Networks to Grow 4% in 2010

Given dramatic increases in mobile Internet and broadband use, it is perhaps not surprising that mobile service providers will be hiking their network investments about four percent in 2010.

Informa Telecoms & Media estimates that mobile broadband subscribers worldwide  reached more than 225 million subscribers in mid-2009, representing 93 percent year-over-year growth.

Global mobile data bandwidth usage increased by about 30 percent during the second quarter of 2009, says Allot Communications.

The investment growth comes on top of about two years of flat to negative spending where mobile service providers tried to hold down spending in the face of the global recession.

Overall investment was down about three percent in 2009, says ABI Research.

Investments in 3.5G technologies such as HSPA and HSPA+, along with the rollout of 4G LTE networks by large operators such Verizon Wireless and Telia Sonera, are driving much of the activity. The fastest growth in capital expenditures is expected to be in South America, where compound average growth rates will average 10 percent between 2009 and 2015.

”The rapid adoption of smartphones will drive service revenue growth in 2010, as more consumers adopt data plans to take advantage of their handsets’ features,” says ABI Research analyst Bhavya Khanna.

Developed markets such as North America and Western Europe saw more than 17 percent year over year growth in mobile Internet revenues, a trend that is likely to continue into 2010.

ABI Research forecasts mobile Internet service revenues to grow at a CAGR of 9.4 percent between 2009 and 2015.

Gracious Sandra Bullock Oscar Acceptance Speech

A gracious Oscar acceptance speech by Sandra Bullock.

Google Does Scare Potential Competitors

Just an entertaining video.

Digital Ad Spending Exceeds Print for the First Time

U.S. advertisers are spending more in 2010 on digital media than on print, says Outsell.  Outsell's study collected data from 1,008 U.S. advertisers in December 2009.

Of the $368 billion marketers plan to spend this year, 32.5 percent will go toward digital; 30.3 percent to print. Digital spending includes e-mail, video advertising, display ads and search marketing. "It's a watershed moment," says the study's lead author, Outsell Vice President Chuck Richard.


Last year, print spending accounted for 32 percent of the total, compared with 30 percent for online.

Spending on Web sites and other digital media will rise 9.6 percent to $119.6 billion this year. Print expenditures will drop three percent to $111.5 billion while total ad spending will jump by 1.2 percent to $367.9 billion from $363.5 billion last year.

Advertisers will reduce spending on marketing for events, and on television, radio and movies this year. TV, radio and movie expenditures will drop by 3.8 percent to $84.6 billion, Outsell says.

Spending on events will decline less than one percent to $45.2 billion this year.


But the survey also suggests marketers will spend 16 percent less on mobile in 2010, compared to 2009.

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Verizon Says Average LTE Speeds Will be 5 Mbps to 12 Mbps, Peak of 40 Mbps to 50 Mbps

Verizon Wireless says its 4G Long Term Evolution network field trials in Boston and Seattle indicate the network is capable of peak download speeds of 40 to 50 megabits per second and peak upload speeds of 20 to 25 Mbps, with average data rates of 5 Mbps to 12 Mbps on the downlink and 2 Mbps to 5 Mbps on the uplink in real-world environments.

Verizon says it will have the new network up and running in 25 to 30 markets by the end of 2010 and will reach about 100 million people.

Aside from the speed advantages, what might be important for many users is better indoor reception. The new LTE network will operate in the 700-MHz frequencies, which means signals will penetrate building walls far better than signals now used in the 2-GHz range.

You can make your own decisions about whether the higher speeds make wireless a reasonable substitute for fixed connections. If a user downloads a lot of video, the answer likely is "no." But if a user is a lighter user, LTE might well be a workable solution for at least some percentage of users.

We have seen what mobility has done to demand for fixed voice connections. We should soon see whether the same thing happens in the broadband access arena.

Why and How Businesses Use Social Media

Social media marketing is a developing art form. In fact, you almost would find it odd that budgets to support social marketing and mobile social marketing are growing on a fairly widespread basis even though a majority of companies have difficulty measuring the return on investment from social media.

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In fact, according to a recent survey of marketing executives by Econsultancy, 61 percent say their organizations are “poor” (34 percent) or “very poor” (27 percent) at measuring social media ROI.

According to the Econsultancy survey, 61 percent report that they “have experimented with social media, but not done that much.”

A quarter say they are “heavily involved in social media”, while the remaining 13 percent are not engaging with social media at all.

So why are marketers using social and mobile social media? They do so for the same reasons they use other marketing channels: generation of sales and leads as well as softer objectives such as improved brand awareness and reputation.

As an intermediate objective, social media efforts often are measured by their ability to drive traffric to company Web sites. "Increased traffic to a Web site is the business goal that marketers are most likely to be trying to influence through social media marketing," says Econsultancy. Fully 74 percent of companies say they use social media to increase Web site traffic.

"Direct traffic to Web site is by far the metric most commonly used to measure the impact of offsite social media, measured by just under two-thirds of company respondents (63 percent)," says Econsultancy.

More brand recognition (64 percent) is the second most important business objective in terms of impact of social media. A similar proportion of respondents (62 percent) cite better brand reputation. And that might be a big part of the reason why social media is used.

Just over half of companies (56 percent) say that they try to achieve increased sales through social media activity. But only a quarter of companies (24 percent) use sales as a metric for measuring social media effectiveness.

User Experience Shifting to Mobile

As with just about every other Internet-mediated experience, the experience context is shifting from PC-based to mobile-based. As the way people share information changed in the shift from printed to online products, so the design and display of information and content likewise will be different as the mobile shift continues to gain traction.

People with experience in the production of text content will point out that the way headlines are written, the way text is formatted, the length of stories and distribution channels all have changed. Similar changes will happen with marketing and advertising campaigns as the mobile context becomes more important.

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Academy Awards High Stakes Standoff Ends 13 Minutes into Telecast

A high-stakes "Academy Awards" game of chicken ended 13 minutes into the telecast when Walt Disney Co. and Cablevision Systems Corp. settled their dispute over a new contract.

Disney had said it would pull the ABC feed from Cablevision if the cable operator did not negotiate a more-favorable contract, potentially affecting about 3.1 million homes in the New York area.

The drama, some might say, could have been higher only if the contract dispute had occurred in the hours and minutes leading up to the Super Bowl.

The contract dispute, and temporary programming interruption, underscores the increasing financial stress in the multi-channel video entertainment ecosystem. Both broadcasters and distributors face rising programming costs, lower profit margins and growing competition.

In past years broadcasters have struck different deals, agreeing to allow "no incremental cost" carriage of local broadcast feeds in exchange for operators agreeing to add new cable networks to their program lineups. Programmers essentially bartered "free" local station carriage in exchange for carriage of new cable networks.

But that was then, and this is now. These days, both broadcasters and distributors are trying to squeeze more profit out of their video operations. And consumer opposition to ever-increasing monthly subcription fees is a background issue, at the same time distribution alternatives are growing.

In a sense, the broadcast networks also are looking over their shoulders at the potential threat Internet distribution represents. But so are the cable operators. After watching the music industry become disrupted by online distribution, as well as the continued decline of newspapers, video content owners are trying to avoid "no incremental cost" distribution of their content.

Given those pressures, it does not seem likely this will be the last tussle threatening program carriage. Versus, for example, now is dark on DirecTV and has been for months, as those two firms have not agreed on new contract terms, either.

As content ecosystems are rearranged, disputes between partners are bound to grow. The same sort of ecosystem change is behind the network neutrality debate as well.

10 Times More Smartphone Users and App Store Sales in 4 Years?

There will be 970 million smartphone users by the end of 2013, up from 300 million in 2010, according to analysts at research2guidance, a Berlin-based market research firm. In 2009 there will only about 100 million smartphones in use.

As a result,  annual app revenues will grow from $1.94 billion in 2009 to $15.65 billion by 2013.

An order of magnitude growth (roughly 10 times) in users and app store sales in four years would be steep, indeed.

What Does 100 Mbps for 100 Million Homes Imply About Monthly Prices?

There are only two major problems with the Federal Communication Commission's upcoming National Broadband Plan, says Dan Hays, PRTM director. The aspirational goal of 100 Mbps service provided to 100 milliion U.S. homes by 2020 is a fine aspirational goal, but it isn't clear how it can be implemented, he says.

The other big initiative is in the wireless area, specificially the effort to get TV broadcasters to give up 500 megahertz worth of spectrum so that wireless service providers can use it.

And there are just two problems there: buyers and sellers. Are there willing buyers? Are there willing sellers? Hays says the broadcasters already have said they are unwilling to sell. Even if they do agree to sell, the cost to acquire that much spectrum would be quite expensive, coming at a time when service providers are straining to justify further investments in their fixed plant.

The 100-Mbps access plan likewise has just two problems: who will pay for the investments, and whether end users are willing to pay substantially more than they now do for the upgraded speeds.

Estimates of how much that might cost range from a wildly-low $25 billion up to $350 billion, says Hays.

Commercial organizations aren't terribly interested in investing now to provide speeds that high, as there is little consumer willingness to pay much more than what people pay today, Hays says.
The percentage of household income spent on communications in the United States is in line with the rest of the world today, he says. So it does not make sense to assume a step level change in spending even if much-higher speeds are made available.

Beyond that, there is a generational and cultural issue at work. A good percentage of broadband non-adopters are older than 65. But as younger users who "cannot live without broadband" move up the age cohort, that particular non-adoption issue fixes itself, says Hays.

Once upon a time one could hear many doubters about why people would buy cable TV when they could get off-air video for no incremental cost. Over time, people decided they really did need it. The same thing has been at work with mobility services and will be true of broadband as well.

None of this is to argue that, over time, access speeds will increase. But investment capital cannot be raised unless there is a plausible business case. So the catch is that investors will want to see some plausible evidence that $300 billion worth of investment will lead to a return on investment.

Assume there are 65 million U.S. households spending $40 a month, on average, for broadband. That works out to about $2.6 billion a month, or $31 billion a year.

Assume a base of about 115 million U.S. households. Assume 90 percent broadband penetration, or 104 million connected homes. That would represent about $4.2 billion in monthly spending, or about $50 billion in consumer revenue.

How much incremental revenue would an investor want to see to justify investing $300 billion? Assume a 15 percent return as a hurdle rate and 104 million customer households.

The debt service implied is $45 billion a year. Assume borrowers also want to repay the principal over a 10-year period. That would very roughly imply a need to earn an incremental $75 billion a year.

Assume 40-percent margins. That implies gross incremental revenue has to be about $187.5 billion a year, or $1630 per customer, or an additional $136 per customer, per month. That implies a monthly price of at least $175 a month.

Do you really think every broadband customer in America, at 90 percent penetration of homes, is willing to pay $175 a month for broadband access?

Of course, maybe I have blown the math here. If not, I think 100 Mbps access, using networks built with private capital, are unlikely to happen. It would require consumers to do something history and logic suggests they will not do.

Mobile Service Providers Jockey to Maintain Relevance in Value Chain

Oddly enough, mobile service providers and device manufacturers are being forced to redefine their value and roles in the mobile ecosystem they long have shaped and dominated. The reasons are not hard to fathom.

The mobile industry's center of gravity is shifting from hardware to software, from voice to data and services, and from traditional telecom stakeholders to new entrants, says Thomas Husson, Forrester Research analyst.

But it is more than that. The mobile industry is reinventing itself, and the biggest changes are the addition of new providers in the value chain. The new and independent role of handset suppliers is one example, but so are software and content providers now parts of the value chain.

In fact, "the mobile environment as we knew it at the end of the 20th century is disappearing," says Husson. Firms such as Apple and Google now are playing huge roles in the business, for example.

That creates new tension as value--and revenue--shares now also are rearranged. In fact, access providers must contend with rapidly-changing shifts in value creation. That does not necessarily mean ISPs are destined to become low-value suppliers of commodity access, though that could happen.

It does mean all the contestants now are in an extended and crucial race to secure their own roles within the value and revenue chains.

Service providers face a limited window of opportunity to reinvent their business models and become smart enablers, says Husson. In part that is because software innovation, rather than hardware, is driving the business.  Increasingly, that innovation is coming from new participants in the business, not the legacy participants.

Global growth also will center on China, India, and emerging markets, as has been the case over the last several years.

In developed markets, the issue will be selling more services and applications to a relatively fixed number of users, as children, seniors, and technology pessimists, the remaining untapped user segments, largely have been tapped. Broadband and data services are the clear focus.

The big question is how well service providers will compete with new value chain participants to create and maintain direct relationships with end users, which traditionally has been the province of service providers. These days, application and device suppliers increasingly are poised to create direct retail relationships on their own.

Global Mobile ARPU Now Depends on Broadband and Data Services

Mobile end-user average revenue per user dropped between six percent to nine percent globally, in the third quarter of 2009, says ABI Research.

In the U.S. market, overall ARPU decreased by $0.45. Average voice ARPU declined by $0.98 while the average data ARPU grew by $0.53, according to mobile analyst Chetan Sharma.

By the end of 2009, average voice ARPU was less than $10 a month while data ARPU was about $15 a month. But average blended ARPU has been flat at around $49.50 since 2003.

ABI Research estimates that ARPU decline is likely to flatten out in developed markets in Europe and North America as mobile data revenue increasingly replaces falling voice revenue, as it has in the United States.

Globally, the growth in minutes of use has also peaked, and is expected to grow at a compound annual growth rate of only 1.4 percent between 2009 and 2015, with much of this growth driven by developing markets in Africa, Asia, and the Middle East.

Minutes of use in the U.S.market are growing at about a three percent rate, says CTIA: The Wireless Association.

Whether in the U.S. market or elsewhere, broadband access and data services are the clear way forward for mobile ARPU, gross revenue and profit margin.