Commonwealth Bank Launches Kaching: P2P, Facebook, NFC Payments

Australia's Commonwealth Bank is launching Commbank "Kaching," a mobile payments service supporting both
peer-to-peer payments using the mobile phone’s contacts and email addresses, and social payments to a user’s Facebook friends, along retail payments using near field communications.

The new service will simplify day-to-day payments to anyone, including friends, family, mainstream retailers and small businesses, says David Lindberg, Commonwealth Bank executive general manager. "Now, for the first time, Australian consumers will no longer have to rely on cash or cards to make payments to family, friends or even businesses."

Kaching works with the 42,000 MasterCard-enabled PayPass terminals across Australia.

Kaching launches in Australia

Netflix Stock Slammed Unfairly?

Earlier in 2011, Netflix was a $300 stock and a hit with investors. In October 2011 it is a $77 stock and hated by almost “everybody.” It is possible Netflix finally has met a challenge it cannot surmount. But it might also be worth noting that Amazon equity also is being slammed as it clearly is making investments in its future that investors don’t like.

There are, to be sure, reasons to be concerned about Netflix. Some would argue the 75 percent loss of value in less than six months is the result of three mistakes, many will say. Among the  key events were raising fees, trying to create separate streaming and DVD-by-mail businesses and shocking investors by warning that Netflix might not make money for all of 2012 as the company ramps up international expansiion plans.

The decline follows Netflix's quarterly earnings report, in which profit and revenue were up sharply but the video-rental company was haunted by its decision to raise prices and its admittedly botched effort to divorce rentals of DVDs from streaming video services. Those moves caused more than 800,000 subscribers to flee in the third quarter and spoiled a lot of goodwill with investors. But revenue is up sharply


But some might note that a significant slide in net customer additions happened months before any of those events, in the quarter ended in June 2011. 

Investor Whitney Tilson has been buying Netflix, though. “It’s been frustrating to see our original investment thesis validated, yet not profit from it.  It certainly highlights the importance of getting the timing right and maintaining your conviction even when the market moves against you.  The core of our short thesis was always Netflix’s high valuation.  In light of the stock’s collapse, we now think it’s cheap and today established a small long position.  We hope it gets cheaper so we can add to it.” Some are buying.

And some think the panic is overdone. Watch the video.

Some might argue Netflix now is a buying opportunity. Netflix's streaming business, its future, is already at a about a $2 billion revenue run-rate, with 21 million subscribers paying $8 a month. Some might compare that to cable TV, satellite TV or telco TV, but the better analogy for the moment is HBO. The issue then is what HBO, as a stand-alone business, might be worth.

At $75 a share, Netflix's market cap is $4 billion, or two time the revenue of its product of the future. Assuming one values the DVD business at zero, the market is valuing Netflix's streaming business at two times run-rate revenue. Some would argue that is low for any company whose future revenue is expected to grow sharply. Netflix bullish case

Only 5% of U.S. Homes Do Not Buy At Least 1 Broadband Service

There’s an interesting bit of data in the most-recent Nielsen “Cross Platform” report on media behavior of U.S. consumers. The study shows that 72 percent of households buy both broadband access and a video subscription service. Broadband drives consumer spending


About 18 percent of households buy video service but no broadband, while five percent buy broadband but not video service. About five percent of households do not buy either video service or broadband.



Add it all up and just five percent of U.S. households do not buy at least one broadband service, with the dominant pattern being “video plus broadband access.”



That doesn’t mean narrowband services are unimportant, either in terms of gross revenue or profit margin. It does mean that when forecasters say the telecom business will in the future be built on broadband services, “tomorrow” already has arrived. 

How Do You Market an Intangible Product?

Some products, especially intangible products such as legal or health services, marketing advice, crisis management and other services, are very hard for buyers to evaluate, in advance of purchase. There is no physical object to inspect, so a potential buyer has to try and determine value some other way.

That's why credentials, furniture, street address, references and "experience" become proxies for value and competence where an intangible product is concerned. Even tangible products such as fashion items or vacation resorts have a huge and similar problem, namely creating a brand or mystique that helps potential buyers evaluate the product, which either is a means to another end, or an "experience."

Those are reasons why content marketing can be effective. Content marketing can help establish credentials, provide evidence of experience and knowledge and thereby reduce the "risk" a prospect faces when buying an intangible product they might not ever have used before, or which gets used infrequently.

By creating great, valuable content you are setting up your brand as a trusted expert, someone your target audience can count on. They learn that your company is one of the real experts in your industry. This helps builds your authority and trust level. Those are proxies for the product attributes potential buyers otherwise evaluate directly, in the case of tangible goods.

Content Marketing Tip: Focus on Educating Your Target Audience

Consumer Ratings, Reviews are Preferred Product Information Sources

Consumers are spending more time than ever using social media, according to Nielsen and NM Incite, a Nielsen/McKinsey company. And social media seem to be quite  influential. In fact, 63 percent of survey respondents say their "preferred" way of learning about products and services is from consumer ratings. 


Some 62 percent say their preferred method of learning about products is from consumer reviews. 


About 60 percent of consumers researching products through multiple online sources learned about a specific brand or retailer through social networking sites, Nielsen says. 


Active social media users are more likely to read product reviews online, and three out of five create their own reviews of products and services. Women are more likely than men to tell others about products that they like (81 percent of females vs. 72 percent of males). Overall, consumer-generated reviews and product ratings are the most preferred sources of product information among social media users.

How Social Media Impacts Brand Marketing

Only a Handful of Firms "Really Matter" in U.S. Telecom

If you want to know what is happening in the U.S. communications business, there really are only a handful of companies one has to follow. That doesn't mean the thousands of firms selling communication services do not matter, only that just a small number of companies represent the overwhelming number of customer accounts and revenue.

AT&T, for example, alone has more than 100 million mobile subscribers and 42 million fixed-line accounts, for a total of 142 million. AT&T has 142 Million Consumer Accounts


Verizon has about 106 million mobile customers and something in excess of 15 million voice customers, for a total somewhere in excess of 121 million. The issue is that Verizon has many customers who may buy only FiOS Internet access or FiOS video but not voice. 


Sprint has perhaps 50 million subscribers, T-Mobile USA 33 million. 

Comcast has perhaps 23 million customers, DirecTV 19 million, Dish Network 14 million and Time Warner Cable perhaps 12 million. 


The point is that one doesn't have to track many firms to capture sufficient data on where the market is going. 

IaaS Will Count for a Third of IT Resources in 2014

About 77 percent of enterprises respondents surveyed by PwC have a plan to adopt some form of cloud computing, and 64 percent said some type of cloud, including private and public, would be the best way to manage IT infrastructure in three years.


Precisely what that means for would-be providers is not quite so clear, though. 


PwC surveyed 489 business executives in an effort to understand the real state of data center management, and the results suggest both increases in traditional data center operations, "private" cloud operations and some increase in public cloud activities. But there will be a huge decline in use of traditional data center services managed by service providers. 


Traditional IT outsourcing service providers are about to see their business models and customer value propositions disrupted. 


But the essence of cloud computing is a move towards highly standardized racks of commodity servers and a software environment that together make for a highly efficient use of resources. Who needs to outsource to a third party when such capabilities are available?

"We have seen major technology shifts in the data center in the past," says David Stuckey, PwC's US leader of its data center infrastructure practice. "These shifts in reality have just added to the mix in the data center, increasing complexity and cost."

Cloud computing, when done right, has the potential to actually replace, and not just augment, legacy environments while adding value by reducing costs and increasing agility," says Stuckey. 

Private cloud is infrastructure operated solely for a single organization, whether managed internally or by a third-party and hosted internally or externally.^[43]

They have attracted criticism because users "still have to buy, build, and manage them" and thus do not benefit from lower up-front capital costs and less hands-on management,^[44] essentially "[lacking] the economic model that makes cloud computing such an intriguing concept".

IaaS Will Count for a Third of IT Resources in 2014

Coca Cola "Rules" Social Media

Coca-Cola ranked as the world’s top brand, with a following on Facebook of 34 million fans, growing at a monthly rate of nearly three percent, posting seven times a month, each garnering more than 235 comments and nearly 1,750 “likes,” according to Covario.

The top 100 leading brands on Facebook includes Hyundai, Disney, Bayer, HP, Victoria’s Secret, Best Buy, Samsung Mobile, Dr. Pepper and Macy’s among the top 10 brands using Facebook effectively.

Perhaps significantly, 35 percent of respondents say “driving sales” is the number one priority for social media programs, but 47 percent see the goal as driving engagement and driving brand awareness, and another 14 percent say they are “driving friends.”

Overall,  65 percent are using their social media programs, and their Facebook pages, to drive “soft” conversions, not explicit sales. Those results point up the fact that social media programs can have multiple goals. But the findings also illustrate the tension posed by social media. To the extent that the purpose is “community” or “socializing” or “fun,” does lead generation interfere with those purposes? If not, how can lead generation be reconciled with the other values? 

The study also has other implications. Traditionally, media efforts by brands have come in clear buckets: paid media (advertising), earned media (public relations, media relations, press relations) and owned media (brands acting as publishers and content creators on their own sites). 

The Covario study suggests top brands fund social media programs partly out of advertising budgets, partly out of PR budgets and partly out of new budgets. Both in terms of practice and internal thinking and budgets, social media is a new mix of outbound communications, marketing and sales promotion.

In many ways social media is a replacement for traditional advertising, public relations and marketing. In other ways it is a new blend of tactics. The rather clear implication is that competencies and skills also will have to change, both on the part of brands and other practitioners in the ecosystem.

At one level, the changes are "merely" about the ways brands spend money. At another level, the changes also reflect and contribute to a change in our understanding and practice of media. 

Historically, the growth of media has been fueled by advertising. If advertising support changes, so will media. In simplest terms, if traditional media has been supported by advertising, and advertising spending shifts to social media, there will be less traditional media and more social media.

Facebook users are “active” users, or using the application  more than four times per week. Less than 40 percent of Twitter users are considered active users, by way of comparison.

Facebook counts nearly 50 percent of its user base as power users (use the site at least once per day). A study done by comScore last year showed that Facebook occupies nearly 10 percent of the user time online globally. Users were spending an average of 450 minutes per month on the platform, compared to 230 minutes on Google, for example.

Facebook users number 800 million as of the time of the writing, more than any other social media platform. Twitter is estimated at 245 million users and LinkedIn, the key professional social platform, 120 million users.

Facebook tips for brands

U.S. SMB Spending on UC up 16% Annually Through 2015

U.S. small and mid-sized business spending on unified communication will grow at a 16-percent compound annual growth rate through 2015, from its current total of about $1.8 billion, according to AMI-Partners. At those rates, U.S. small and medium businesses will be spending about $3 billion on UC in 2015. SMB UC spendiing up by 16% annually through 2015?

More than one-third of small businesses (firms with less than 100 employees) and nearly three quarters of medium-sized companies (firms with 100–999 employees) currently own at least one unified communications component technology, according to IDC.

More than 30 percent of small firms and 55 percent of mid-size firms cite plans to add at least one UC component in the next 12 months, IDC said. VoIP technology has established a solid foothold in the medium-sized business segment, and more than 30 percent of firms with 100 to 999 employees use it. Also, approximately 45 percent of medium-sized businesses currently use some type of conferencing technology.

But what does that mean? At one level, it might mean that there is some use of one UC tool, but not completely unified communications. It might mean Skype gets used. It might also mean that the entire communications platform is completely unified in terms of messaging functions, call delivery or device support. UC growth rates

How Steve Jobs Influenced Google

Steve Jobs apparently gave Larry Page, Google CEO, some advice recently:

"We talked a lot about focus. And choosing people. How to know who to trust, and how to build a team of lieutenants he can count on. I described the blocking and tackling he would have to do to keep the company from getting flabby and being larded with B players. The main thing I stressed was focus. Figure out what Google wants to be when it grows up. It's now all over the map. What are the five products you want to focus on? Get rid of the rest, because they're dragging you down. They're turning you into Microsoft. They're causing you to turn out products that are adequate but not great."

How Steve Jobs Influenced Google's Restructuring

Mobile Social Networking Grows 50% to 75%

In August 2011, the number of people who accessed Facebook, LinkedIn, and Twitter from mobile devices grew 50 percent, 69 percent and 75 percent, respectively, over the same period a year earlier, according to comScore.

Facebook was home to the largest mobile audience among the three social networking sites, attracting 57.3 million mobile users in August, followed by Twitter with 13.4 million users and LinkedIn with 5.5 million users.

Social Networking via Mobile Devices Surging

Mobile Broadband Faster than Fixed Line?

There is an interesting bit of data in the latest report from Akamai on global Internet usage. The global average fixed-line connection speed was 2.6 Mbps, and the global average peak connection speed was 11.4 Mbps.

Looking at mobile broadband connections, average connection speeds on known mobile providers ranged from 5.3 Mbps down to 209 kbps, while “average” peak connection speeds ranged from 23.4 Mbps down to 1.2 Mbps.



The interesting observation is that wireless broadband has the higher peak speeds, about double that of fixed line connections, with a variable “average” speed that in some cases also is twice as high as fixed-line connections, though such sessions are highly variable. When mobile broadband is slow, it is an order of magnitude slower than fixed line connections. Global broadband speeds

Google considers building fiber network in Europe

Google Senior Vice President David Drummond Friday said Google is considering building a fiber network in a European country. As was the case when Google earlier began experimenting first with municipal Wi-Fi and now the fiber to the home network in Kansas City, the effort is to sway policy debates. 1 Gbps test


Google believes rightly that its own business benefits from ubiquitous and capacious broadband. So anything it can do at reasonable cost to stimulate further investment is viewed as a reasonable marketing investment. Municipal Wi-Fi

During a meeting at the French Industry Ministry, Drummond said that Google was "looking very closely" at a potential project in Europe, without specifying where this project would be launched or when. Google considers building fiber network in Europe

This wouldn't be its first foray into networks. The U.S company has already announced a plan to build an experimental ultra-fast broadband network in Kansas City.


Google's interest comes as European telecoms operators are under pressure to up investment in high speed broadband networks across the continent. 


What isn't so clear is whether the demonstration projects will have much impact. Fixed-line broadband access plant is not primarily a "software" matter that is amenable to clever coding. The input costs are well known, and Google will not have access to any tools the rest of the global industry is unaware of or unable to use or buy. 


That suggests Google will not be able to produce some new investment cost breakthrough that has wider commercial implications. Google might suggest that this is not the issue, rather the point is to provide lots of bandwidth and then see what users and developers can do. 


It is hard to see how a small test will offer the scale to entice any serious new applications, either. Since many studies suggest that people spend more time online and consume more bandwidth when they have access to faster connections, nobody would be surprised if there was some stimulative impact. 


But the likely impact in the consumer space is likely to be that people watch more streaming video, play more games and spend more time on social networks. 

Cable Deal for T-Mobile USA?

With the Justice Department having filed suit to block the proposed AT&T purchase of T-Mobile USA, what is T-Mobile's plan if the deal falls through? It doesn't appear that T-Mobile USA actually has had a "plan B." But many speculate that if the AT&T acquisition is blocked, it will also signal that Sprint will not be allowed to buy T-Mobile USA, either.

That will leave T-Mobile USA in a tough position, as it needs spectrum to launch Long Term Evolution, and will emerge from the merger process weakened in the retail market.

Bernstein Research senior analysts Robin Bienenstock and Craig Moffett say the most likely scenario is not a Sprint merger but a spectrum deal with cable operators Comcast and Time Warner, both of which own spectrum T-Mobile USA could use to launch LTE services. The cable operators could monetize their spectrum and provide backhaul services.

To the extent that cable operators sell a wholesale service, they might then use T-Mobile USA rather than Clearwire. That would be more bad news for Clearwire.

Cable Deal Could Be T-Mobile 'Plan B

Is "4G Plus DirecTV" a Viable Alternative to FiOS?

Verizon Wireless seems to be cooking up an out of market “video plus broadband” plan, working with DirecTV. During its recent quarterly earnings report, Fran Shammo, Verizon Communications EVP said that the company was working on such an effort.

“You're going to see that come in the fourth quarter with the what we now call the Cantenna, which is not a commercial name obviously, but it's the antenna that we actually trialed with DIRECTV, which was extremely successful,” said Shammo.

Some will legitimately wonder whether that approach might even wind up being used in some Verizon markets where FiOS has not already started to be deployed. LTE plus DirecTV

There are some significant Verizon markets including cities like Boston, Buffalo, N.Y, Baltimore and Alexandria, Va. where FiOS construction has not started.

The obvious new question is the rational approach Verizon should take to upgrading its fixed-line network. There isn’t much doubt about optical access media being more resistant to some weather-related impairments than copper networks, nor is there much doubt that new optical facilities cost less to maintain than older copper networks.

But the business question is how much incremental investment ought to be made in the fixed network,  if video and broadband services can be provided using the wireless network. One might rationally argue that the cost of maintaining the fourth generation wireless network is lower than the cost of maintaining the FiOS network.

Obviously, if that is true then the avoided capital investment in new optical facilities is significant as well. That isn’t to argue that fixed and wireless networks are in any way equivalent in terms of absolute bandwidth. But there is a financial question.

If the expected revenue and operating cost advantage of FiOS, compared to 4G, does not provide the optimal financial return, then a wireless solution might be the most-rational way to invest new capital.

The problem is that voice is a negligible contributor to incremental revenue on a FiOS network, while video, though an important contributor of revenue, is not such a great contributor to profits. That leaves broadband, and revenue upside is tough.

That is not to say fiber to home facilities are unimportant, merely to say that they might not be the best use of capital for a provider that also is investing heavily in mobile broadband.

In fact, there is an interesting bit of data in the latest report from Akamai on global Internet usage. The global average fixed-line connection speed was 2.6 Mbps, and the global average peak connection speed was 11.4 Mbps.

Looking at mobile broadband connections, average connection speeds on known mobile providers ranged from 5.3 Mbps down to 209 kbps, while “average” peak connection speeds ranged from 23.4 Mbps down to 1.2 Mbps.

The interesting observation is that wireless broadband has the higher peak speeds, about double that of fixed line connections, with a variable “average” speed that in some cases also is twice as high as fixed-line connections, though such sessions are highly variable. When mobile broadband is slow, it is an order of magnitude slower than fixed line connections. Global broadband speeds