A Different Perspective...

On a regular basis I like to discuss and comment on topics that affect the world, business and otherwise. I hope others will feel inclined to join the discussion and comment on my perspective to engage in open discussion

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It is so interesting to me that people have a critical view of Private Equity (PE) and similar firms. They are typically referred to as "brand killers" due to the leverage they use to acquire companies with lower equity contributions.

The goal of PE firms is to maximize value from any company, and to be able to realize as much value as possible, over the life of owning the company. It is unfortunate that some PE firms drain cash from companies, and are short-sighted in their investment goals. However, it may also be the case, that a PE firm invests in a failing brand (i.e. the company would have gone bankrupt without a buyer), hoping to revive/re-create an industry leader, that can be sold at a later date (or spunoff through an IPO) to materialize the value of the investment.

I am in favor of having a PE industry veteran in the WH to focus on trimming costs and operations, streamline processes, and focus on turning this country around...we are only hurting ourselves thinking that we should raise taxes to give big government more money to spend in negative investment programs (i.e. boondoggles).

I will be casting my vote in favor of Romney, based on these attributes.

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It will be interesting to see what happens to AMR in the future - I don't think they will disappear anytime soon, given the current competitive landscape in the domestic airline industry, but I think they need to re-analyze their cost structure (which they have announced as part of their plan).

I used to fly AA regularly for work, when I lived in California - and they had an aging fleet nearly 10 years ago. From what I know, they haven't spent significant funds in purchasing a new fleet - putting them behind the race for operating fuel-efficient aircraft.

I hope that AMR can bring the pieces together and sort out their operations, including negotiating concessions with the unions...

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There is continued evidence that the advertising market is weak, and has not recovered to pre-recession levels. There are two things that are interesting about this data: (1) companies are continuing to spend on digital advertising; and (2) marketing agencies still haven't figured out the right strategy to maximize customer impact.

The first point is easy to see - it is visible in the earnings of GOOG, YHOO, MSFT and other companies that benefit from digital advertising. It is easy to say that companies are "shifting" ad dollars away from print toward digital advertising. However, if you look were to analyze the data, the real story is that companies are increased digital ad spending (which was always part of their strategy), and they are reducing their spend on print advertising (not because they are shifting ad dollars, but because their budgets have decreased and they need to make decisions on where to allocate funds). Digital ad spending, for most companies, is necessary as another medium (re: outlet) to reach consumers. In today's marketing world, where agencies and marketing directors need to quantify the impact of their efforts, it's easy to focus on digital ads where the impact can be tracked at detailed levels. However, although print advertising is more difficult to track, it should not be ignored completely as "less useful" than digital ads - companies need to figure out how to develop a holistic campaign that leverages both platforms.

The best marketing strategy is one that leverages both print and digital platforms, as complementary tools (1+2 instead of 1 or 2). As an example, I was reading the WSJ last week (in paper form, because that is my preference) and I noticed an ad campaign that I felt did an excellent job of marrying both platforms to optimize my engagement. Allstate insurance utilized a full-page ad to ask me to support a bill in Congress that would create a 'graduated' driver's license program for teenage drivers (11 teens are killed every minute in a car accident on average). The campaign asked me to voice my opinion by logging on to their FB page, to voice my opinion to my elected Congress representative. As we can all admit, if the ad asked me to write a letter to my Congress office, I probably would not have taken any action. However, because they leveraged FB to gather my information, and offered to submit the letter on my behalf, it made the process very easy for me to take action and let my voice be heard.

As an interesting follow-up, I posted 'shared' this campaign on my FB page to see how many people were intrigued to take action based on a digital feed about the campaign. My wife, who is pro-digital, told me yesterday that she saw my post on FB, but didn't click on the link to read what it was about - this is where digital ads fail, they don't provide enough information to create action (and our attention span online is somewhat limited). I hope advertising executives get this right in the future, and figure out that they need to spend on print AND digital ads to have the most impact, creating an interactive experience for all users.

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Yet again, I think this is another example of an industry that is taking steps to adapt to, and embrace, digital technology as a tool to supplement their "brick-and-mortar" operation. The newspaper industry has been under attack on many fronts, from a declining subscription base for print media to legitimate free media available through the internet that undermines the ability of journalists to be compensated at historical rates for their efforts.

The most successful newspapers have been able to monetize their journalistic efforts by establishing "paywalls", requiring consumers to pay for content (i.e. journalist quality information) that provides accurate, reliable and timely news. Leveraging their brand equity, WSJ and NYT have proven to consumers that they can add value, at a reasonable price, to how information is delivered (and available).

If newspapers (and more broadly, print media) is going to survive into the foreseeable future, companies need to adopt digital tools to supplement their print capabilities, instead of fighting efforts to make information available in real-time. I think there is a market for both print and digital media to work together to provide value-added services to customers and consumers, and the most successful companies will embrace both platforms.

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I don't know why banks still exist as commercial enterprise. Given their inherent control of the economy through their depository and lending activities, they can render the country helpless (or try to make huge profits from companies that would otherwise use the funds to invest back into the economy).

I think there should be much more regulation on retail and commercial banking operations. Yes, there is opportunity to make money in sales and trading and investment banking, but these areas should not be part of banking institutions. I hope we get this right someday.

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When it comes to acquisitions, I am a firm believer in free market capitalism. While I understand the argument, in this case, that AT&T could use its dominance in the market to demand higher prices from customers, and/or other providers that want to have a "roaming" agreement with the carrier.

However, I also believe that there are still enough options out there that if AT&T tried to charge higher prices, it would notice consumers defecting to Verizon, Leap, or other carriers. As such, it will be unable to sustain its high operating cost model, and would be forced to lower prices to maintain operating costs adequately.

I see this acquisition as a positive opportunity for AT&T to improve its coverage and quality, with increased spectrum availability. As a current AT&T customer, and anyone else who is knows this, they have some really great coverage in cities like NY and LA, but very poor coverage in areas like Chicago.

Ultimately, I think this deal is a positive for the industry, and it will get approved with certain requirements from the FCC and/or Justice Department

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Google +1 meets Bing + Facebook » The head-to-head competition on social search just got more interesting!

Google hit the scene with their “+1” innovation to being social and search together (see blog post from 3/31) — finally, we were seeing our search needs intersect with our communities value opinions, saving us time and, in some ways, money. Google, the market leader in search, was exactly the right player to bring these together — but suffered from a critical flaw. Google’s “+1” requires “recreating” my social interactions in my search history - versus leveraging social interactions which already exist in the market (namely, through Facebook). To actually use my friends opinions in my search results, they had to be searching and validating results there also — which, given Google’s 65%+ market share in search would not be hard to do, but does require some diligence on the part of my friends.

Over the weekend, we saw brand new ads for Bing! which featured Chromeo — an innovation which bring my Facebook opinions into my Bing! search results, essentially resolving the fatal flaw in Google’s +1 model.

Two points of view emerge for me on this — first) thank goodness Microsoft finally did this - what in the world took them so long to connect search and social together is not entirely clear, but at least they’re at the table now; but second) how much of Google’s standing market share will actually shift to Bing! to make this innovation valuable? It’s unclear how many avid Google’rs actually care about their friends opinions when they search, and even if they do, is Bing! a robust enough search engine to replace Google for them?

It should be interesting to see what kind of attention (hype’d and realized) this really generates for Microsoft — or if it remains yet another innovation on the belt that doesn’t really move the needle all that far…

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I haven't heard of ScrollMotion, but from the article and interview, it sounds like they have been heavily involved (and vested) in the shift to digital content, and how it can enhance print media (rather than compete against it).

This is actually something I have been understanding more and more about over the past year, with a particular company in the print media sector. The players that survive, and continue to grow, are the ones that understand the shift, and align with their customers to support the shift in media preferences (i.e. more digital/interactive content, less static/print content).

I don't think print media will be going away anytime soon - there is still a significant population that likes to hold and feel the book, magazine, advertisement, etc. (I will admit to being one of them), and the best companies going forward will be able to add value by managing both print capabilities and digital capabilities.

This just confirms my view on the state of the industry...

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It's about time the banks came together and used their technology, under a common platform, for the "greater good", instead of keeping each of their respective systems proprietary.

It will be interesting to see how much market share they can steal from the PayPals and Google Payments of the world. I have a PayPal account, but I don't actively use it because it feels somewhat "unsafe", and I have had a bad experience with the types of merchants using PayPal previously. However, a payment system from the banks (while it may have more/less fees than other platforms) seems to me that it would have significantly more inherent security features to protect your account, and related activity.

I am excited by this announcement, and hope to try this out once it launches...!

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I think it's very interesting that there is a market for trade-ins in the electronics market, and in general for most technology products. With the speed of obsolesence shrinking constantly, and new products being developed and released within less than a year, it seems interesting that Amazon is willing to pay for trade-in electronics.

I feel there is probably a strong need for a recycling facility, of sorts, to allow the electronics to be broken down into raw product that can potentially be re-used, to minimize the impact on the environment. However, I don't think this is Amazon's purpose. It also seems to focus on more-recent, and relevant, electronics (e.g. iPhone, Xoom, etc.) rather than your old VCR or DVD player.

It will be interesting to see how useful and relevant this program becomes to minimizing electronics 'waste'.

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Okay, so I know that any opinion I may have about Boeing may be biased (given that I worked there, and enjoyed the opportunity), but I also think this addresses a larger issue facing the US as we continue to maintain our dominance in a global marketplace.

Regardin unions in general, I do not support their agendas, and I think they are obsolete for today's business environment. Dating back, they were established to help regulate unfair labor practices, and organized to collectively bargain for fair wage and treatment in the workplace. Fortunately, we have many labor laws and standards established at both the Federal, State and Local governments to prevent corruptive practices. As a result, unions have resorted to fighting for increased pay and vacation time, particularly in an economy where unemployment has been elevated for more than 24 months, and counting.

I agree with Boeing's stance regarding it's recent adverse ruling by the National Labor Relations Board (NLRB) - it is a hamper on growth. The facility that Boeing built in South Carolina is an expansion of capacity, to supplement its existing facility in Washington (not to move jobs out of Washington). The unions are trying to exercise their power beyond their reach, and I think it is just going to increase the poor perception of these organizations.

It will be interesting to see what happens as Boeing looks to appeal the ruling - in the meantime, more than 1,000 employees in South Carolina have to sit idle and unemployed until the groups come to an agreement...

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This is going to create a model for how the industry changes to adapt to a world built on cloud computing solutions. Google, like Amazon, has found a way to create a 'digital locker' where users can purchase movies and music, and can stream them directly to their device. It's ingenious, because it does not require Google to comply with negotiating with publishers and movie studios in order to comply with license rights, since the movie or song will be streamed over the internet, rather than downloadable by users.

While this does not create a model for users to have offline access to their music and movies, it does create a platform that will allow Google to negotiate with the studios and music publishers in the future, and can offer the 'offline' mode to its customers by easily adding the feature. But, the user base will allow them to negotiate with the content owners for a favorable price point, that then allows them to compete directly with Apple's iTunes.

BUT, as we all know, Apple isn't going to take this lying down - they probably already have their solution developed, and are just waiting for their competition to try and catch up to where they are today, and once they do, *pow* - they will release their new platform that blows everyone else out of the water!

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I saw this article this morning on mashable, and initially asked my wife if they were a reliable source (as you can probably tell, she is more active in the technology start-up section than I am), and she said "not always". Since then, I have seen this story break on Reuters and other news sites which is interesting. It seems to early to try to "break" the story, and make it seem credible at this stage in the process.

To comment on the story itself, my family and I have recently started using Skype to connect between London, New York, and Los Angeles. It works amazing, but as the article says, part of the reason for its popularity is the "no-cost to call" opportunity. If Skype tried to convert these calls to a "low-cost" service, there would probably be a significant drop-off in usage and active customers. Given the number of investors/owners of Skype over the years, I think the service might be past its prime, and can easily be pushed to the side by a new startup company that offers more features - there is nothing significantly proprietary about Skype's model right now. It will be interesting to see how this plays out...

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This is an interesting decision by LinkedIn for several reasons. First, I don't think of LinkedIn as a 'bellweather' in the technology industry (i.e. IBM, Microsoft). Secondly, I am not sure how strong investor appetite will be for such a listing. I would imagine that a listing is geared toward the venture capital investors seeking an exit opportunity, more than really bringing long-term value and growth for future investors.

The fact that companies like Apple, Oracle, etc. (and Microsoft for a long time previously) are listed on the Nasdaq, I would think it would make more sense for LinkedIn to align with the Nasdaq exchange, more than the big board (NYSE).

I am curious - if LinkedIn were to go public in the coming months - how many of you would buy their stock, as a growth investment opportunity?

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This article is a follow-up to yesterday's blog regarding Ford's recent performance and turnaround. Granted, this posting is somewhat biased given my wife is a consultant with Booz&Co, but I felt it deserved credit and aligns with my views on the Auto industry...

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Sony Plans Two Android Tablets

It's very interesting, the number of players that have jumped into the Tablet market. I remember not too long ago, when Apple announced the iPad launch - the general feedback I kept hearing from people I would talk to was along the lines of "why would I want to spend $500 on a tablet when I can get an eReader for $199?"

I think, as we have seen, Apple has the brains and power to create and change the industry at a minute's notice. The Netbook market, which was still emerging as a "cheap notebook alternative" had a premature death because the iPad changed the perception - an eReader and a mobile computer in one device.

I feel like Steve Jobs has a basement of gadgets already developed, and is just waiting to launch them once the competition has a chance to "catch up" to his existing products...even then, I would argue that Sony, RIM, Acer, Motorola, et al have a way to go before they can match the iPad's functionality and consumerism!

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Smaller Cars Lift Ford’s Profit to $2.55 Billion

For about five years, I have been actively following Ford's progress, and overall turnaround strategy execution, to return to profit and become a major player in the Automotive industry, once again. The thrust for my enthusiastic following started in 2006 when Ford hired Alan Mullaly as CEO, replacing Bill Ford, while Bill Ford continued to be involved as Chairman.

I used to work at Boeing in my previous "life" (read: pre-MBA career), and got a chance to experience Mulally's game-changing efforts first-hand. Under his direction, as President of Commercial Airlines, Mulally helped shaped the future of air travel, investing in the efforts to develop the 787-Dreamliner, and revive Boeing's role as an innovator in Aerospace. The most probable reason he moved to the CEO position at Ford was because he was passed up for the role at Boeing in 2005, due to unfavorable insider scandals plaguing the company at the time.

Many people I have the discussion with had written off Ford as a viable player in the market, and continued to doubt any turnaround efforts. I think the "new blood" brought in by hiring an outsider as CEO helped to reinvigorate the brand, and question the current processes for research and development. The result, as we have seen, has been a successful turnaround story that they can hopefully continue to build upon and take market share from their battered competitors.