Archive for the ‘Internet’ Category

Twitter’s Business Model

April 27, 2010

Twitter has been one of the Internet’s great success stories. It is very popular, the brand has international recognition and three years after its launching it has an incredible traffic: in the first quarter of 2010, 4 billion tweets per quarter were posted. So far, this microblogging service has shared the culture of freedom, participation and lack of profit orientation that characterizes the Internet.

But on April 13, 2010, Twitter announced a plan for including advertising on the site. Some users fear that this decission will “polute” the conversations with “promotional tweets”. On the other hand, the venture capitalists that have backed the company are looking for some returns on their investments. Therefore, the key issue is how to make money without disturbing Twitter’s subscribers to much.

The business model based on advertising could work if Twitter’s managers introduce commercial information gradually. They need to listen to the users: their complaints should be a reason for a quick change about how advertising is delivered. Other media outlets teaches us people’s opinion about advertising: they love it if it is not “excesive”, or “intrusive” and if it is focused to their special interests and consumer behaviours.


Internet as a Battlefield for Media Companies

January 12, 2010

Internet has changed the “rules of the game” for media companies: it has destoyed the big music companies’ distribution advantages; it has allowed the launching of online news services which means more competition for newspapers and magazines; it has increased the windows for audiovisual services; it has fostered the launching of new offers in the market like social networks, blogs and other user generated contents.

Managers of media companies should pay attention to this new battlefield: they should understand who are the winners and what are the reasons for their success.

Amazon, Google, Facebook, eBay, Yahoo, BBC News Online, YouTube… do they have any similar key success factors? We suggest here some “Internet winners’s” common values: they have highly motivated people; innovative culture; long-term focus; attitude of embracing uncertainty; lack of ties with past experences; openess to learn from experiments and from errors; strategic foresight which combines different methods and perspectives.

All together to the Web

November 27, 2009

It is interesting this article from The New York Times in which the author writes about the merger of several companies for the Web. That means two things:

Firstly, as we said in a previous post, media are trying to fight against economic crisis through joint ventures. Advertising investment is still decreasing and does not seem that is going to stop in short term. Companies have to save costs and sharing expenses is a way to do it. If media enterprises work together they will be better afterwards.

Secondly, print circulations are going down and this is not only a temporary situation but a very deep structural damage related with new technologies. More and more people are getting used to obtain the information on Internet through iPhones, BlackBerrys and e-book. Now publications have to develop not only contents for Internet, but software standards for contents viewing on these platforms.

52% would pay for online contents

November 19, 2009

Yesterday I asked some students if they would be disposed to pay for online contents. They said “no”. But today I read that a Boston Consulting Group research affirms that, in Spain, 52% of Internet users would pay for those contents.

Rupert Murdoch, who is convinced that the future of Internet depends on charging for the contents, is gaining more and more supporters. London Times already charges for their contents in its portal and many other editors are planning to do the same.

Boston Consulting Group has studied nine countries and in every one of them the results have been positive in favor of paying. The nature of the contents for which people would pay is especially local, although in EE.UU and U.K. Internet users prefer to pay for the breaking news service.

However, Boston Consulting Group research explains that even though a lot of people would give money for those contents, they are not disposed to pay a lot. In Spain, people would pay four Euros per month for “premium contents” on Internet, and only 11.3% of the Internet users would reach to ten Euros for them.

One of the walls that difficult the operations is that people do not like online transactions through credit card, because they have to give some bank details.