October 2009 Archives

Modern, Internet Marketing from Cadillac!

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General Motors Vice Chairman Bob Lutz recently challenged drivers to take on the new Cadillac CTS-V at New York's Monticello racetrack. It was a publicity stunt all around. However, GM, to their credit, used all of the modern, internet marketing tools at their disposal:

The event was picked up by many media outlets, including Forbes and National Public Radio.

Props to General Motors for a very successful event and publicity campaign. This event cost far less than a TV or newspaper initiative and was, much, much more effective.

Andrew Hill:

Those who cannot learn from history are doomed to repeat it, as George Santayana famously put it. On that basis, Lords of Finance - winner of the 2009 Financial Times and Goldman Sachs Business Book of the Year Award - teaches a forceful lesson to the world's economic policymakers.*

Liaquat Ahamed's vivid history of how central bankers' mistakes helped precipitate the Great Depression bowled over the judges and swept away a strong field of finalists for the 2009 prize.

It was not only that the book was "beautifully written", in the words of Lionel Barber, the FT's editor. Its selection as the "most compelling and enjoyable" business book of the past year was also due to the strong parallels between the events

Mr Ahamed describes and the events leading to the past two years of economic and financial turmoil. The book "reminds us that tumult in financial markets wasn't created in the 21st century", says Lloyd Blankfein, chief executive of Goldman Sachs and co-chair of the judging panel with Mr Barber.

The Profit and Peril of Mashups

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What is a "mashup"? According to this wikipedia entry, "In web development, a mashup is a web page or application that combines data or functionality from two or more external sources to create a new service."

Real estate brokers and agents may wish to take advantage of "free" internet api's (application programming interface). Websites such as flickr, facebook, youtube, yelp and many others offer programatic interfaces to their data and media.

What are the benefits of such API's?

  • Aggregate local information around properties for sale or rent.
  • Enhance your website "experience".
  • Avoid the cost of collecting and managing local information.
What are the costs and risks of using such API's?
  • Bad data. Automated information aggregators often lack local expertise. Information may be outdated; a long closed restaurant may still have a review on your website.
  • Inappropriate content. I created a Facebook demonstration for a client some time ago. The resulting page included an advertisement for Filipino Girls.
  • What motivates the data aggregator? Is their strategy aligned with yours?
  • Does the data make your site more generic?
  • Competitive stealth advertising on your site. Savvy competitors will figure this out and place their content on your site via the API's.
What are the alternatives to "mashups"?

Your agents have a wealth of local market knowledge. Hire or appoint a "blog-o-spondent" or "blogger-in-chief". This person creates and aggregates your own content (text, audio, video, maps) on your blog, around your website(s) and via appropriate social networks. Over time, agents and staff post directly and incorporate your listings, services and our unlimited use maps (for a fixed price). Create your own platform that emphasizes your brand. This approach improves recruiting, retention and internet marketing in ways that you control and at a much lower cost than traditional advertising.

Main Street reliably supports the tools you need, from blogs, dynamic short links, lead management, surveys and multimedia to market reports and live charting tools.

As always, there is no "free lunch".

Mary Meeker, Scott Devitt & Liang Wu [1.5MB PDF]:

Mary Meeker, Scott Devitt & Liang Wu [1.5MB PDF]:
Financial Market + Economy Update / Dashboard
  1. Financial Markets Have Rebounded, Technology Sector = Relatively Impressive.
  2. Leading Economic Indicators Seem to Have Turned Corner, Coincident / Lagging Indicators Still Weak.
Mobile = Incremental Driver of Internet User / Usage Growth
  1. Mobile Internet Usage Is and Will Be Bigger than Most Think.
  2. Apple Mobile Share Should Surprise on Upside Near-Term.
  3. Next Generation Platforms (Social Networking + Mobile) Driving Unprecedented Change in Communications + Commerce.
  4. Mobile in Japan + Desktop Internet Provide Roadmaps for Mobile Growth + Monetization.
  5. 3G Adoption / Trends Vary By Geography.
  6. Carriers in USA / W. Europe Face Surging Network Demand But Uncertain Economics.
  7. Regulators Can Help Advance / Slow Mobile Internet Evolution.
  8. Mobile-Related Share Shifts Will Create / Destroy Material Shareholder Wealth.

Virtual Properties latest broker branded iPhone app is now available. Contact us to learn more: zellmer@virtualproperties.com Virtual Properties provides a number of real time, mobile tools, including its 2nd generation iPhone app, mobile public websites and Main Street intranet tools.

Lessons to be gleaned from Singapore's property boom

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Gillian Tett:

If you talk to financiers in Singapore these days, the topic of property prices keeps cropping up but, unlike in America, it is not the threat of further real estate market falls.

Instead, as Wall Street worries about American house prices - exemplified by a downbeat report from Goldman Sachs this week - in Asia there is mounting concern about property booms-cum-bubbles.

Thus far this year in Hong Kong, for example, residential property prices are estimated to have surged by about 25 per cent. In Singapore the increase is calculated at more than 15 per cent. However, on a visit to that city this week, I was repeatedly told by locals that these figures may be understating the trend: in prime residential and business centres, there is reportedly such a bidding frenzy for good assets, that prices are far higher than official data imply.

The trend is striking for at least two reasons. For one thing, it provides another graphic sign of an issue I discussed in last week's column - namely the degree to which a flood of money in the global financial system is now potentially creating new mini-bubbles in certain asset classes.

To be fair, this is certainly not the first time that Asian property markets have been on a roller-coaster ride. After the Asian crisis a decade ago, prices swung dramatically too. And this year's price surge has still not reversed the dramatic tumble seen last year. The Asian property index is still "only" trading back where it was in the spring of 2008, below the dizzy peaks of 2007. Nevertheless, the sheer scale and speed of this year's rebound has taken even locals by surprise. And while part of the boom reflects optimism about Asian growth prospects, another key factor is that investors round the world are now frantically searching for yields, amid the ultra loose western monetary policy (which, by default, translates into loose policy into much of Asia too, due to fixed exchange rates).

An Overview of the Housing & Economic Crisis

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Whitney Tilson @ the Value Investing Congress [5.7MB PDF] via email:

The combination of limited supply (due to large numbers of loan mods), demand stimulated by massive govt subsidies (mainly the $8,000 tax credit, FHA and ultra-low interest rates), and favorable seasonality has led to four consecutive months (May-Aug) of rising home prices. As you can see from this chart (from page 78 of our housing presentation -- a newly updated version is posted at www.valueinvestingcongress.com), while home prices rose in August, the rate of increase (sequentially, relative to the previous month) was less than in July and is, I believe, the beginning of the seasonal downturn, which happens every year after the strong months circled on the chart. This year, the seasonal downturn may be exacerbated by the large number of loan mods that will fail and become foreclosures and, eventually, inventory. And if Congress doesn't renew the $8,000 tax credit and/or reins in the FHA, and if interest rates rise, look out below!

Diary of a Love Affair: Obama & Google

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Maha Atal:

The president may be critical of corporate America, but he has a soft spot for one very big business: Google. Here's how the two got so intertwined.

On election night, Schmidt is among the celebrities -- including Oprah Winfrey -- at Obama's victory rally in Chicago.

Later that week, Schmidt is named an economic adviser to Obama's transition staff, and Obama continues to rely on Googlers during his presidential transition: The president-elect appoints Andrew McLaughlin, who helps Google's Political Action Committee raise over $200,000 for Obama's campaign, to run the President's technology transition group.

Rumors swirl that Schmidt is on deck for a formal role in the administration, but he denies them. Instead, he will later accept a place on the President's Council of Advisors on Science and Technology..

Jonathan Cheng:

Concerns about a growing bubble in Hong Kong's high-end property market pushed central bankers here to increase the required down payment on luxury homes to 40%, from the current 30%.

The new measure, which goes into effect immediately, applies to properties valued at HK$20 million (US$2.6 million) or more, part of an attempt to tamp down an overheated sector that has alarmed regulators and set off a wave of populist anger.

The Hong Kong Monetary Authority, the city's de facto central bank and main banking regulator, said that luxury-home prices already had exceeded Hong Kong's historical peak in prices, in 1997.

While property prices in much of the rest of the world continue to languish, prices in traditionally volatile Hong Kong have been on a tear this year, thanks in large part to low interest rates and a wave of liquidity from mainland China, where Beijing last year unleashed a four trillion-yuan (US$585.6 billion) stimulus. Economists attribute much of Hong Kong's property run-up to mainland Chinese, and developers say that mainland Chinese customers now account for as much as 40% of new-home sales.

2009 State of the Blogosphere

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View imageRichard Jalichandra. Mike Arrington summarizes:

Key points Jalichandra brought up - What's the no. 1 success metric for a professional blogger? What do successful bloggers have in common? The data was taken from a survey of 2,900 bloggers, conducted by Penn, Schoen & Berland.

72% of bloggers are hobbyists, says Jalichandra, and blog for fun. They don't make any income from blogging, and only half hope to someday. They blog simply to express themselves. Of professional bloggers, only 10% blog 40 or more hours per week.

2/3 of professional bloggers are male, and 60% are between 18 - 44 years old. 75% have college degrees, and 40% have graduate degrees. Half have household incomes of $75,000 or more. 17% of them say blogging is their primary source of income. A whopping 74% of bloggers use Twitter, v. 14% of the general population. Their no. 1 use of Twitter is to promote their blogs.

In a Generation That Friends and Tweets, They Don't

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Ian Shapira:

Tomek Kott is so stubborn about not joining his friends -- in truth, nearly his entire generation -- on any social networking site that his wife launched a mini-crusade against him. Exploiting a tactic surely befitting our times, she whipped up a Facebook group last year called "Tomek Kott Must Join Facebook."

So far, it hasn't worked. Her husband, a 25-year-old physics graduate student who considers social networking a time-wasting cesspool of pseudo-communication, remains blithely unconnected.

"I am old-school in the personal touch way," said Tomek Kott, who lives in Silver Spring and has outsourced many of his digital communication duties to his wife, Anne. "All my friends from high school have also met my wife, and they're friends with her; my wife 'friended' them or whatever it's called."

Kott and others like him are social networking refuseniks: people in their 20s or early 30s who have gone off the grid, eschewing the ecology of Facebook, Twitter, MySpace and the like. In Washington, refuseniks are not exactly operating in isolated, Luddite worlds: One is in a dance company, another is a rapper/hip-hop singer, another is a Georgetown undergraduate. Kott grew up in Redmond, Wash., where his father is a software engineer for Microsoft.

All of them, given their ages, qualify as exotic life forms.

Blinded by Turbulence

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Don Sull:

It was a cool autumn evening in 1999, and Lakshmi Mittal listened as a team of MBA students painted a grim picture of the turbulence roiling the steel industry. Mittal had agreed to judge a case competition at the London Business School, where teams of finalists vied to analyze the success of his steel empire (including the private firm LNM and a public corporation Ispat International), and make recommendations to the firm's founder and CEO.

Mittal's success was undeniable. Since starting with a single steel mill in Indonesia in 1976, Mittal had built the fourth-largest steel company in the world, by acquiring under-performing steel factories throughout the 1990s in countries including Mexico, Canada, Trinidad, Germany, Ireland, Kazakhstan and the United States. Founded by an Indian, incorporated in The Netherlands, headquartered in London and selling steel in 80 countries around the world, Mittal's group was the first truly global steel company. Industry analysts estimated Mittal's steel holdings were worth $2 billion, which secured him a place on Forbes list of billionaires.

Based on their analysis, the student teams implied (without quite stating it in so many words) that Mittal's success resulted largely from good fortune. They argued he could not ensure continued success in the face of industry uncertainty. And since luck is not a strategy, they advised him to take chips off the table while he was still ahead, by selling his steel business, for example, or diversifying into related industries.

Mittal didn't take their advice.

Don Sull:

2007 was a tough year for America's microbrewers, firms such as Boston Beer Company, that brew speciality beers. The price of malting barley, used to color and sweeten beer, nearly doubled after barley farmers in the U.S. planted more fields with corn to take advantage of government subsidies for corn-based ethanol. The government introduced the subsidies to decrease American reliance on Middle Eastern oil, at a time when crude prices were rising and geopolitical forces threatened to disrupt supplies. That same year, poor weather in Europe severely limited yields of hops, which provide beer with a bitter tang, driving up the prices. Hops prices jumped just as the euro strengthened against the dollar, further jacking up the prices paid by brewers. That same year, SAB Miller and Molson Coors Brewing, the second and third largest brewers in the U.S., merged, creating a behemoth to further pressure profits of small brewers.

Microbrewing might seem like the kind of business that could escape market turbulence-the production technology hasn't changed in centuries, demand is local, and the business is simple. Yet even in this industry, profits were influenced by a wide range of forces, including government regulation, oil prices, exchange rates, industry consolidation, and European weather.

Why Email No Longer Rules...

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Jessica Vascellaro:

Email has had a good run as king of communications. But its reign is over.

In its place, a new generation of services is starting to take hold--services like Twitter and Facebook and countless others vying for a piece of the new world. And just as email did more than a decade ago, this shift promises to profoundly rewrite the way we communicate--in ways we can only begin to imagine.

We all still use email, of course. But email was better suited to the way we used to use the Internet--logging off and on, checking our messages in bursts. Now, we are always connected, whether we are sitting at a desk or on a mobile phone. The always-on connection, in turn, has created a host of new ways to communicate that are much faster than email, and more fun.

Why wait for a response to an email when you get a quicker answer over instant messaging? Thanks to Facebook, some questions can be answered without asking them. You don't need to ask a friend whether she has left work, if she has updated her public "status" on the site telling the world so. Email, stuck in the era of attachments, seems boring compared to services like Google Wave, currently in test phase, which allows users to share photos by dragging and dropping them from a desktop into a Wave, and to enter comments in near real time.

The Economist:

JUST after Barack Obama was elected president, his incoming chief of staff, Rahm Emanuel, told a conference of American captains of industry, "You never want a serious crisis to go to waste." Here's hoping his audience was paying attention, because recessions--particularly gut-wrenching slumps like this one--provide as many opportunities for business people as they do for politicians. Although they are often called "slowdowns", recessions shake things up rather than slowing them down. They reward strengths and expose weaknesses, create new opportunities and kill old habits, release pent-up energy and destroy old business models. Distressed assets can be bought for a song, talented people hired cheaply and new ideas given an airing.

The most striking example of this was the Depression. Most people think of the 1930s as an economic desert littered with foreclosure signs and unemployment queues. But for the canny few it was a huge opportunity. DuPont invested heavily in research and development (R&D) and hired unemployed scientists. By the late 1930s 40% of its sales were from products that were less than a decade old--including world-changing inventions such as nylon and synthetic rubber. Procter & Gamble (P&G) invested so heavily in radio advertising that it created a new artistic form, the soap opera. The list of companies which took off during the Depression includes Revlon, Hewlett-Packard (now HP), Polaroid and Pepperidge Farms, the last of which was founded by a society lady whose husband was a victim of the Wall Street crash.

Dan Pink on the surprising science of motivation

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Ted Talks:

Career analyst Dan Pink examines the puzzle of motivation, starting with a fact that social scientists know but most managers don't: Traditional rewards aren't always as effective as we think. Listen for illuminating stories -- and maybe, a way forward.

Lew Sichelman:

When it comes to lawsuits, real estate agents and brokers tangle mostly among themselves. But disgruntled buyers or sellers who believe they've been so wronged that they are willing to spend the time and money to take their realty professionals to court bring a fair number of cases.

The vast majority of transactions go off without a hitch. Moreover, the cases that are adjudicated tend to come down in favor of the defendant.

But if the latest edition of Legal Scan tells us anything, it's that a handful of agents and brokers either don't know the law or don't care to follow it.

Legal Scan is a biennial research report by the National Assn. of Realtors of the legal issues facing its 1 million members. Combining surveys of state real estate commissions and other key people in the business with an analysis of case law and recently enacted statutes, the report identifies potential pitfalls that can ensnare anyone.

MG Siegler:

Last night, I was out with some friends in search of a particular bar. Naturally, we did the 21st century equivalent of asking a gas station attendant for directions, we pulled out our iPhones to look it up in the Maps application. The result was odd; the bar we were looking for was there, but there was another result in the same spot, labeled as "User-created content."

Yesterday, Search Engine Land noted that sponsored links (ads) are starting to show up in the Maps application on the iPhone. It would appear that Google is slowly adding some new features. But what's odd is that these features are showing up without warning, and, as far as I can tell, without a way to turn them off.

While clearly, Google is not going to let you turn off sponsored links, the user-generated content element is odd. These pins show that some random person I don't know was at the place I'm looking for, at some random time. It's simply not useful at all.

I also wonder how Apple, which loves to have total control of its devices, feels about these additions. Google helped Apple build the default Maps application, but it is still one of Apple's own apps and now it seems that Google can simply inject any content it wants into Maps from its end. Also a bit odd is that this particular piece of user-generated content comes from the location-based social network Plazes, which is owned by mobile rival Nokia.

Control your map content and reduce costs with ReData maps from Virtual Properties. Includes a branded iPhone app - version 2 out soon.

NPD Group:

According to leading market research company The NPD Group's 2009 Household Penetration Study, approximately 12 percent of all U.S. computer owning households own an Apple computer, up from 9 percent in 2008. While Apple ownership is growing, those households are decidedly in favor of mixed system environments. Of those 12 percent, nearly 85 percent also own a Windows-based PC.

Multiple computer ownership is a common thread in Apple computer households, with 66 percent of households owning three or more computers, compared to just 29 percent of Windows PC households. Apple owning households are decidedly more mobile as well, with 72 percent of them owning a notebook, whereas only 50 percent of households that have a Windows PC own a notebook.

Not only do Apple computer owners own more computers (and more mobile computers) than the norm they also tend to own more types of electronics, and more of them, than typical computer owning households. For example, while 36 percent of total computer owning households have an iPod, 63 percent of Apple households have one. And while almost 50 percent of Apple owners own some type of navigation system, only about 30 percent of all computer households own one.

What Really Kills Great Companies: Inertia

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Gary Hamel:

In most organizations, change comes in only two flavors: trivial and traumatic. Review the history of the average organization and you'll discover long periods of incremental fiddling punctuated by occasional bouts of frantic, crisis-driven change. The dynamic is not unlike that of arteriosclerosis: after years of relative inactivity, the slow accretion of arterial plaque is suddenly revealed by the business equivalent of a myocardial infarction. The only option at that juncture is a quadruple bypass: excise the leadership team, slash head count, dump "non-core" assets and overhaul the balance sheet.

Why does change have to happen this way? Why does a company have to frustrate its shareholders, infuriate its customers and squander much of its legacy before it can reinvent itself? It's easy to blame leaders who've fallen prey to denial and nostalgia, but the problem goes deeper than that. Organizations by their very nature are inertial. Like a fast-spinning gyroscope that can't be easily unbalanced, successful organizations spin around the axis of unshakeable beliefs and well-rehearsed routines--and it typically takes a dramatic outside force to destabilize the self-reinforcing system of policies and practices.

Let me return, for a moment, to the topic of my last post, organized religion. What are some of the inertial forces that have prevented churches from reinventing themselves in ways that might make them more relevant to a post-modern world? A partial list would include:

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