Saturday, April 16, 2011

Domino’s Pizza Claims Check-In Grows Revenue 29%

Domino's Pizza says a number of different mobile initiatives are helping the company grow sales. Domino's says its check-in program, based on Foursquare, has grown the company’s online revenue in Britain 28.6 percent increase to $17.5 million Euros. "We offered a specific offer both for anyone who checked in and the mayor of each store, says James Millett, Domino's U.K. multimedia manager.

Mobile ordering also has grown to nearly 10 percent of all e-commerce sales through the Domino's mobile website, web app and iPhone app.

Domino's also recently launched PayPal payments capability on its web and iPhone app platforms. That means customers can order a pizza with an e-mail address or telephone number and PIN on mobile.

TelChina and China Mobile to Create Mobile Payment System

Telnic Limited, the registry operator for the .tel top level domain says its regional partner TelChina and China Mobile, one of the world's largest mobile phone companies, have entered into a strategic relationship to develop mobile payment services.

TechNet Wants Debit Card Rule Delay

TechNet, a group representing executives at major technology companies, sent a letter to senators late last week urging support of legislation by Sen. Jon Tester (D., Mont.) to delay the start-date of the Dodd-Frank law that mandates limits on interchange fees, the volume-related part of debit card fees. The limit on interchange fees, touted as a consumer protection measure, actually is leading debit card issuers to raise fees and charges on all sorts of other banking services to compensate for lost revenue from interchange fees.

The net result will an end to free checking services and higher fees for lots of other services banking customers now use. TechNet wants a delay of implementation for two years so the economic impact can be studied.

TechNet includes Facebook, Apple, Microsoft, Google, Craigstlist, Netflix and Yahoo! among other high-tech companies, along with financial companies such as card-processor Visa, which has long fought against the debit-fee proposal.

The limit on interchange revenue is important for any number of reasons. The cost of financial services will rise for consumers across a wide range of economic levels, say analysts at the Mercator Advisory Group. See http://www.mercatoradvisorygroup.com/images/durbin_analysis.pdf.

The largest card issuers will have less of an incentive to promote debit related products and services and will either shift activities toward credit-based services or will cover their costs differently by fee-based approaches to debit
accounts.

Also unknown is how consumer behavior might change if debit cards are harder to get and more expensive to use, and how retailers might react to supporting cards of various types, issued by institutions of different sizes. If small institutions, exempted from the mandatory interchange revenue caps, charge higher fees, retailers won't want to accept the cards, for example.

Merchants empowered to set minimum and maximum transaction amounts may act to increase consumer usage of cash and checks for pay-now purchasing, which are less efficient and therefore more costly to process, or will lose sales to merchants who chose not to set minimums and maximums, Mercator argues.

An overall decrease in electronic payments may lead debit card issuers to increase the cost of their products to recoup an interchange income shortfall, motivating consumers to choose other forms of payment including cash and
paper checks.

Smaller financial institutions may be faced with higher operating costs should their customers’ debit card usage decline. Any decline in transaction volumes or debit user accounts will drive small banks’ debit operations costs
higher per account and per transaction, again making it likely that consumer end-user fees will need to be increased to pay for operations.

Other prepaid programs that will likely be impacted include payroll cards, which depend on float and interchange fees to offset costs. Due to various laws, both state and federal, payroll cardholders typically do not pay upfront
fees on the cards and despite the fact ATM access is costly to the issuer, cardholders always get some ATM access for free.

The Durbin amendment to the Dodd-Frank bill is yet another illustration of activity that benefits legislators, who get to claim they are protecting the public, while the public actually does not benefit.

For Facebook, Apple, Microsoft, Google, Craigslist, Netflix and Yahoo!, the interest is a bit less direct. TechNet is worried there might be less investment in technology, and a decrease in security. Security breaches will be a negative for application providers.

Gawker Moves Highlight Value of Content in Marketing

Gawker founder Nick Denton might arguably have been known as a 'blogger' and 'blog business' entrepreneur in the past, serving up 'snarky' commentary on news.

These days, he seems to prefer the alternate strategy of becoming an actual provider of original news. For some people, that will represent a huge shift; for others simply an affirmation that the lines between blogging and journalism are porous.

Gizmodo, Gawker, IO9 and Lifehacker might be viewed as blogs. Some of us would disagree, in part. But the larger point might be that a Google-like attention to 'data driven' decision making has driven Denton to realize that 'news' drives readership.

'Duh!' you might say. Media outlets tend to complain that they are the source of most fodder for blog commentary. That's true. Denton now sees that the way to grow is to simply shift attention from commentary on news, to becoming a news outlet.

It's a shift that might be subtle on some levels, and more significant on others. Despite the debates of several years ago about the difference between blogging and journalism, there still is limited clarity about the differences and similarities, because both pursuits have changed, and are changing.

Observers might disagree about the ultimate success of AOL's "Huffington Post" makeover. But there is little disagreement about the fact that both content curation and content creation now are seen as important ports of the enterprise. The former is collecting and pointing to work already created by others, while the latter consists of more-traditional writing or journalism.

The Gawker moves also highlight a separate but related trend: more brands or companies are becoming "media" in their own right.

The way I would describe it is that buyers of products begin their search for solutions to problems, in both a business and consumer context, long before any supplier has any idea those potential customers actually have begun their buying process.

The key insight is that the end user buying process begins long before a supplier sales process can begin. In other words, people and companies start a buying process without letting the suppliers know. The obvious implication is that by the time some formal interest is expressed to a supplier, by a buyer, lots of the fundamental decisions already have been made.

Buyers already have rejected some approaches, and embraced others. They have culled the potential suppliers to a manageable and small list. Buyers have decided why certain approaches make sense for them, what they think they should be paying, and why.

If a supplier waits until this buyer process is finished, many suppliers already have been rejected. So the reason any brand needs to establish a credible, reliable presence in the content space is to be visible and relevant during the early "research" stages of any buying process, which, by definition, occur before any particular brand can start its own "selling" process.

LG-Ericsson USA Launches PBX Family

LG-Ericsson USA is getting into the business phone system market, launching "iPECS-LIK" in North America. "iPECS-LIK" is said to be a full-featured business communications product family, enabling IP communications.

The family of systems is said to fit a wide range of organizations, from a small 10-user office to a 1000-user corporation.

Friday, April 15, 2011

What LivingSocial is Doing with New Investment

LivingSocial recently raised $400 million in new venture capital funding, saying that the money would be used pursue "aggressive domestic and international growth and continued product innovation."

But half the money appears to be going to an early cash out of early investors and members of company management. That isn't illegal. But it might make other investors wonder whether the current valuations of social shopping companies are warranted.

Groupon used $573 million of a $950 million funding round for liquidity purposes, essentially allowing early backers to gain some liquidity from some of their holdings. Of course, in Groupon's case the board had just rejected a $6 billion buyout offer from Google, and some of its shareholders were upset about missing out on an early payday.

Online Video Usage Up 45%

Online video usage in the United States has grown considerably from the same time last year as time spent viewing video on PCs of all types from home and work locations increased by 45 percent, according to Nielsen.

The number of unique online video viewers only increased by three percent from last January 2010, though.

One might conclude from those statistics that most people who see value in online video already are watching it, and watching lots more, while people who do not see the value are not adopting the behavior.
Among viewers who do watch online video, users streamed 28 percent more video and spent 45 percent more time watching. Total video streams also saw significant year-over-year growth, up 31.5 percent to 14.5 billion streams.

Online video, as it turns out, is like any other application. Not everybody sees the value. But those who do find it valuable are increasing their consumption.

January 2011: Online Video Usage Up 45% | Nielsen Wire

Will Generative AI Follow Development Path of the Internet?

In many ways, the development of the internet provides a model for understanding how artificial intelligence will develop and create value. ...