Category: business (Page 3 of 6)

Parallels in Internet history

May 17, 2013 /

April 1999: Yahoo! buys GeoCities.

“A $3.6 billion deal that will further solidify Yahoo!’s position as a frontrunner in the online popularity contest. …

“GeoCities (GCTY) is the third most visited site on the Web behind AOL and Yahoo!, with 19 million unique visitors in December, according to Web research company Media Metrix.

“GeoCities sets up communities of people who share similar interests and allows customers to create their own home page on the Internet.

“A deal would likely propel Yahoo! to the top rated site in terms of traffic, but it’s not clear how much the two sites’ individual audience overlap. …

“Through GeoCities, Yahoo! will be able to distribute a range of editing tools and content published through personal homepages in an array of services. …”

May 2013: Will Yahoo Try to Get Its “Cool Again” by Doing a Deal for Tumblr?

“CFO Ken Goldman … said Yahoo needed to be ‘cool again.’ …

“Tumblr … focuses heavily on user-generated content, largely text and photos, although there is an increasing use of video on the site. …

“Any kind of deal with Tumblr could certainly bring Yahoo a big, young audience. Its worldwide traffic was at 117 million visitors in April, according to comScore. On its home page, Tumblr claims it has 107.8 million blogs and 50.6 billion posts.”

At the time of its acquisition, GeoCities posted a net loss for the year of $19.8 million alongside a $2.3 billion pre-Yahoo market cap. Tumblr generated $13 million in revenue last year and has a reported valuation of $800 million.

Timely Demise: Where are they now?

May 16, 2013 /

A friend recently discovered and fell in love with Timely Demise, my chronicle of the compression of American retailing in the last recession. I hadn’t really looked at the site since it closed, and as I started poking through the archives, I got curious about the final outcomes of the activities we tracked in the moment.

Researching the bankruptcies and acquisitions chronicled in the blog, I was able to get concrete updates on 40 of the larger entities. Here’s how they wound up:

Eighteen of them (45%) are gone, either through Chapter 7 liquidations or just closing up shop. Extrapolated across the hundreds of companies we covered, this percentage would undoubtedly be higher, given the amount of smaller brands and mom-and-pop stores we wrote about.
Seven (18%) were acquired and continue operating, including individual brands (Stila, J. Jill), retail brands (Crabtree & Evelyn) and multi-store chains (Better Bedding).
Four firms continued operating but encountered more trouble after their appearances in Timely Demise, including Fortunoff (which ended up closing all its stores, then reopening a few more targeted stores) and Reader’s Digest (which has returned to bankruptcy but continues to publish).
Now to the good news. Five companies emerged cleanly from bankruptcy and continue operations.
Four firms shrunk but are still in business in some form.
And four firms we wrote about look as though it’s business as usual for them, having weathered the recession and resumed their growth trajectories in recent years, some with admirable results. La-Z-Boy, we recline in a toast to you.

How industry consolidation affects you: rental cars

January 2, 2013 /

Renting a car? These are the major domestic options by brand name:

Enterprise
National
Hertz
Alamo
Avis
Budget
Thrifty
Dollar
Zipcar

But this is the corporate landscape, pending FTC approval of two recent deals:

Hertz Global Holdings (Hertz, Thrifty, Dollar)
Avis Budget Group (Avis, Budget, Zipcar)
Enterprise Holdings (Enterprise, Alamo, National)

Nine brands, three car companies. Remember that next time you try threatening the guy at the airport that you’ll walk over to the next counter.

This is the first in a series of summaries of industries whose corporate consolidation has led to a small number of players controlling the majority of the market, creating oligopolies in the mass market.

Words I learned today

March 28, 2012 /

A Veblen good is a product whose demand curve shifts in proportion to its expense. The more it costs, the more desirable it becomes, such as the Hermes Birkin Bag, on which you can spend $124,750 (well, in theory you could).
A Giffen good is a product whose consumption increases as costs increase, defying typical supply-and-demand curves. Giffen goods are inferior goods whose demand disregards quality.
(Via the wonderful Felix Salmon, who actually used the latter term incorrectly–my Prada shoes are Veblen, not Giffen, goods, although I find them most desirable at 60% off.)

The shifting media landscape

March 14, 2012 /

Few visualizations of the transition from old media to new media (to which I’ve long been contributing, as both a digital media veteran and a reader) are as stark as the sales trend of the Encyclopaedia Brittanica, which ceased print publishing this week (edited for clarity):

Sales of the Britannica peaked in 1990, when 120,000 sets were sold in the United States. … Only 8,000 sets of the 2010 edition have been sold, and the remaining 4,000 have been stored in a warehouse until they are bought. … Now print encyclopedias account for less than 1 percent of the Britannica’s revenue.

Brittanica’s been in print for 244 years. (It has the New York Times and The Economist beat by nearly a century.) But in a relatively brief 22 year span, the print encyclopedia’s distribution dropped by 93% and the share of the publisher’s revenue from those books dropped by 99%.

I continue to read many publications in print form, atop the multitude of web pages I consume. But I suspect it won’t be long before my only practical reading option is a tablet.

Something new

February 28, 2012 /

I am excited to announce that I have joined Proof Integrated Communications as Chief Strategy Officer, effective yesterday. I am a managing director at parent company Burson-Marsteller as well.
It’s a compelling next step in my career, as I’m charged with defining a variety of roles in an environment much different than the autonomous, scrappy startup I’d built at Canopy. From business development to corporate strategy, internal evangelism to organizational details, I’m going to have my hands in a lot of things, working with 70 colleagues in three offices to build upon their successes to date.
I leave behind a bustling agency in Canopy that has become a trusted destination for ecommerce and user experience projects, and an expanded Alexander Interactive that just moved its award-winning organization (and the Canopy team) to huge new digs on my last day at work.
Departing a nice environment is always strange, especially after four years of collaborative, impactful project work. But having successfully built something new for Ai–twice–I am ready for another set of challenges, starting with the ping-pong table directly outside my office. All in a day’s work.

Trends versus perspective

November 15, 2011 /

November 2: Syms and Filene’s Basement file for bankruptcy.

Company CEO Marcy Syms said in statement the two discount chains were burdened by increasing competition from department stores offering the same brands at similar discounts and by a rising number of private label discounters. She also said there was less overstock for her company to buy as businesses continue to manage their inventory carefully during the tough economy.

September 22: Century 21 opens a 60,000 square foot store on the Upper West Side.

“The expansion is giving another area of the city a chance for everyone to look good all the time,” said Director of Organizational Effectiveness Boyd Howell. … “Brand-driven guests can come in and find their brand instead of having to dig through hoping they’ll find something.”

Shhh. Don’t let my customers hear that

November 1, 2011 /

“The thing you do with [reports of studies] is just ride them out, and literally we see no impact on our business.”
–GNC CEO Joseph Fortunato, reacting to reports that the health pills he sells aren’t healthy after all, October 25 (via Brandsinger)

What I learned today, September 20

September 20, 2011 /

McDonald’s currently commands 49.5 percent of the fast-food burger market in the U.S. Burger King and Wendy’s combined grab 26%. The burger wars of a generation ago have largely been won, Shake Shack notwithstanding.
This evolution, by the way, is not unlike what has happened in the cola market, where Coca-Cola possesses nearly twice the market share of Pepsi-Cola, 17% to 9.5%. Pepsi has actually dropped to third place, behind Diet Coke at 9.9%.
Addendum, October 5: the same thing is happening with beer, where #1 seller Bud Light outsells #2 Budweiser by better than a 2-to-1 margin, 19.1% to 8.7%.

Steve Jobs

August 25, 2011 /

I am enough of a traditionalist that I still gauge the importance of news by its placement on the front page of the printed New York Times. (I still get a copy on my doorstep every morning.) So it was not lost on me that the lead in today’s paper was Steve Jobs’ decision to step down as CEO of Apple.
CEO transitions are often news, but not front page news, much less the story that carries the day. (As of this writing the story has already become a secondary item on nytimes.com, making the print edition the final record of the day’s priorities.) Such is the impact and presence of the genius behind one of history’s most remarkable companies.
While the Times is my guide, I first learned of Jobs’ decision last night–on my iPhone. I could run down a list of Apple devices I’ve used in the last seven days alone but to do so would be almost too obvious. Jobs’ vision has transformed how we consider, use and appreciate technology, all for the better.
I’ve enjoyed Apple products since the days of the ][e. I look forward to many years of continued innovation and successes by the company. Today, like the rest of the world, I tip my cap to Steve, in thanks and in admiration.