Bob Thurman: Becoming Buddha — on the Web

November 16, 2007 · Filed Under Interesting tidbits, Society

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The coming job crisis in developing countries: youth’s lack of skills

This survey comes on the heels of the India Labour Report 2007, which does not paint a very pretty picture. It has found that 90 per cent of Indian youth are unemployable. For a country currently experiencing a demographic bulge, with a large part of its population under 35, this is not good news. The majority of quality jobs in India are skill-based, which most young people lack. Only 8 per cent of Indian youth are unemployed, but lack of vocational skills means that more than half of Indian graduates earn less than Rs 75,000 a year.
A major cause of this skill shortage is that only a very small percentage of children who complete the primary level of education continue to the diploma level.

From the article “The future is young”

November 14, 2007 · Filed Under Asia, Interesting tidbits, Youth

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Choosing profitable domain names 101 - Stay away from “the giant’s niches”

jm_small_55.jpgAs domainers, there are two sectors of the market we should not be interested in: the lowest and the top.

You see, when choosing domain names, there are at least more than twenty very important factors to bear in mind. Some of these factors deal with the economics of the name itself and its future re-sale value. Examples are:

- potential (user/visitor) market size if developed
- purchasing power and number of corporations who may be eventually interested in buying that name from us
- potential number of small businesses or sole traders who may eventually be interested in buying that name from us (e.g. plumbersAustin)

Other aspects to bear in mind when choosing a name are those related to the way the public searches for information. At this point we have to get into the public’s mind, and think about the

- uniqueness and sense of the name (collegefun or collegeparties?, date or dating?)
in order to choose a name with the widest appeal, or a name that appropriately targets the market in which we are interested.

…yet others things to bear in mind are a range of more with intrinsic qualities of the domain name itself that can make it easy to spell and remember, ensuring repeat visits:

- sound
- number of letters
- potential and uniqueness of mental associations with that name (whatever name that creates a strong image in your prospect’s mind will be easier to remember. Examples could be woodenCross, and flyingPig)

In any case, the very best domain names not only pass with flying colors the test of the conditions outlined above and many more (singular/plural, neutral term, users’ high purchasing power, wide demographic appeal…) but also have an important meaning in different languages and are generic enough as not to step into anybody’s copyrighted term or brand. Examples could be “amor”, “hotel”, “diamante” and “bar”.

But of all the factors that a domainer should bear in mind when registering names, there is one that is crucial, perhaps as to be the single most important factor on deciding which domain name to buy, and yet often ignored by thousands of domainers time and time again:

The probability of a huge corporation coming soon or buying their way out into exactly the niche that we are trying to target with our name.

You see, if we are to liken domain names to a game, most people would associate it to the roulette. However, I think buying domain names could be more accurately associated with the game of poker. Why poker? because up to a point, more than luck, domaining is a “game” of strategy and probability, a game in which is very important to keep one’s cards hidden, but to know as much as possible about the competition’s cards and next moves. Professional domaining is not a cross-fingers business, or at least, it should not be.

In fact with domain names, much more easily than in roulette, most of the times we can certainly calculate the probabilities of certain events happening, like the coming of a huge player into our market. It only takes being informed about the big picture.

Some of these domains may appear very attractive to the untrained eye: connectwithfriends, meetnewpeople, datingadvice…but yet, what can these names do against Facebook, Match.com and Hotornot.com?

Of course we could make some reasonable money on parking payments from them, as long as there are direct navigation visitors, and only until the day parking doesn’t work anymore (how far are we from that? My asnwer may surprise you)

But in a domain market that is slowly maturing and coming to its senses, we should never dream of realistically selling these names for a huge sum of money, let alone developing them to compete with certain companies that can pour a thousand times more money in marketing and PR than we can.

A good strategist must know when to accept defeat, keeping its best resources for future battles, instead of fighting to the last soldier against an army ten times his army’s size.

Examples of sectors in which this can happen are maps, social networking, and payment systems, to name a few. A domainer that tries to be successful in these niches would face the perfect storm, made up of international, mature, cash rich, multilingual, billions-worth companies from different sectors pursuing an active and urgent strategy to enter or improve their presence in the niche.

If we get into maps, we’ll compete with Google, Yahoo, Microsoft and Nokia, to name a few.
If we get into social networking, mySpace and Facebook will be our main competitors.
If we get into payment systems, Paypal, Visa and dozens of powerful financial institutions arond the world will try to stop us.

The time when corporations come into the digital age with full force is slowly but surely arriving ladies and gentlemen, so things have gotten a lot more complex than just having a good, descriptive domain name, and those who are not able to keep up with these changes will perish wondering why there are not having any offers for their “superb” domain name.

If that is your case, wonder no more, for here is the rule you forgot:

Don’t waste your time, money and energy. Stay away from “the giant’s niches”.

More information:
http://valleywag.com/tech/exclusive/screenshots-of-first-googlephone-app-320226.php
http://www.legiontech.net/node/26120
http://news.bbc.co.uk/1/hi/business/7022527.stm
http://news.bbc.co.uk/1/hi/technology/5164350.stm
http://www.download.com/Google-Maps-for-Mobile/3000-2641_4-10528447.html
http://blog.seattletimes.nwsource.com/brierdudley/2007/11/microsoft_buys_toutonghis_seat_1.html

Online payment market is worth around $15 billion

November 8, 2007 · Filed Under Analysis, Business, Domains, E-business, Future, Internet, Marketing

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The fastest way to find new customers

Full article, by Brad Sugars, here

If you’re a startup, the fastest way to get the cash registers ringing is a little-used method that involves forming “host-beneficiary” relationships with established businesses that cater to a target audience similar to yours. Then you promote yourself to their database with a special offer presented as a gift from the older business.

1. Precisely define your target audience.

2. Identify local businesses that serve the same market segments.

3. Develop a clear offer for each prospective partner.

4. Pitch the plan, highlighting the benefits to the host business.

5. Supply a letter for the host’s use.

6. Develop a strategy to convert redeemers to repeat customers.

November 7, 2007 · Filed Under Business, Interesting tidbits, Internet, Marketing

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Facebook, the social networking valuation bubble and the need for better marketing

jm_small_55.jpgI have heard that Facebook Click Through Rate is a meagre 0.27%…can you believe it?! At the same time, the site is valued in the range of +$15 billions…

“Boom…correction…boom…correction again…”
The more I hear about Facebook and billions in valuations for a social networking website, the more the .com bubble and its consequences come to my mind.

But why? Where is the relationship? Well, you see what happens…if you compare that CTR to average CTR in other parts of the industry, Facebook advertiser’s CTR is ridiculous. At the same time, Facebook management is working hard on figuring out ways to improve the advertising power of their platform. Will they succeed? I don’t think so.

In fact, no matter how much Facebook “thinks” about it, it is going to be difficult to monetize a website/social service like this to justify such high valuation. And as time goes by, more and more people will realize this.
And then -in a few months probably- we’ll see a huge correction that will not only affect Facebook’s valuation, but the perceived value of social networking sites in general.

When a startup shows an estimated $150 million in revenue, isn’t wildly profitable, and doesn’t have a clear revenue model, no company in its right mind would give it a $15 billion valuation — except, it seems, if we’re talking about Facebook.

Google has not yet found a way to properly monetize youTube, and Facebook looks like they won’t find a way to monetize their service (properly, big $) either.
Some of these social sites are working on the long tail theory (0.25 of XXX million of people is a lot of money!) and who can blame them?

However, as much as you can earn from so many potential “clickers”, it is not enough to justify today’s Facebook valuation. (And don’t forget the Google and others are after them too, but that’s another matter, and the low technical barriers to reproduction and improvement on their idea)

SO I think that in the coming months, investors will start asking Facebook to monetize better and fb won’t be able to do it. Then is when we’ll see the correction that we saw on the internet in general, but about social websites. And only later will emerge the real leaders, that may have a smaller audience, but higher profits than today’s companies.
Without thinking too much about it, I see at least (there are many more) two reasons why Facebook and similar are hard to monetize:

1) people go there for a reason, and it is not to click on ads. The more complete the platform, the more “interesting” things people can do, and the last thing in their mind is to click on an ad

2) Facebook is at the moment catered to the younger demographic (<35). This is a generation that is far less likely to click on ads than previous generations. They don’t click on ads almost out of principle. They know very well what ads are, they are highly skeptical about ads claims and they have developed an unconscious habit that let them not even notice the ads on websites. It is not that tehy don’t click on them…they don’t even see them!

But don’t get me wrong, I am not saying that CTR cannot be improved upon. Far from it.
However, as long as marketers try to attract this people without really knowing them, CTR will stay as low as it is today, and we are heading for a collapse of social network’s valuations.

The real problem here is not the audience, but the ads being served to this audience. If you want to attract them, play on their “weaknesses”

1) make ads look like they are not ads (some people are successfully already doing this through Facebook applications)

2) appeal to their core values: they NEED to feel important (much more than their parents), they are insecure, they are gossipy, they multitask and pay little attention to any individual thing for too long (+1 min!). They feel they have high ethics and are think of themselves as altruistic…

Now…read those two points carefully again, serve them ads that don’t look like ads and will appeal to them (create facebook campaigns that align with your company’s interests, reach them through their blogs and fb profiles, use Digg, post in forums, improve your PR efforts, publicly support charity…) and CTR will increase.

Marketing has changed, and marketers need to adapt. Mark Zuckerberg(?), from Facebook, is clever if we look at the VC capital he is funneling in right now - and although valuations are exaggerated, it is true that a lot of money can be made selling to the youth in the right way.

But is not really Facebook’s fault if we -marketers, consultants, strategic advisors- are not able monetize the medium properly. Facebook is bundling them all up in one place, in one homogeneous group, where is easy for us to target them. They are serving them to us in a silver plate.

And yet we are targeting them with pre-historic, adsense looking ads and banners?!
IN a few months, when the correction comes, people will blame Facebook as being overrated, and they’ll swing to the other extreme for some time, undervaluing future opportunities in the sector.

That would be a good moment -as it is today- to come to our senses and realise that what we need are not necessarily new and shiny platforms, but rather a deeper understading of the psychological motivations of our young potential buyers.

Once we have that and start to pump out better marketing to them (notice: marketing in general, yes, the four Ps…not only ads)…then we’ll be able to increase our CTR from a pitiful 0.27 to something more in line with the potential of the platform, and only in that moment we’ll be able to asses the REAL value of the company behind it.

Until then…it seems we have a lot to learn!

PS/ by the way Mark. Now it is a great moment to sell, unless you come up *soon* with great ways to improve CTR.
You may want to cash up and go before the bubble deflates! The clock is ticking fast.

November 6, 2007 · Filed Under Analysis, Business, E-business, Internet

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