Yahoo; Searching for eyeballs
After the stellar reaction on Wall Street to Googles results last week – the share price popped 16% - the bar was set quite high for Yahoo. And despite healthy performance on revenue and interesting products – like streaming the NFL game – the cost of attracting traffic pushed them into a loss. With few of their apps winning really big audiences getting eyeballs remains their key challenge
Interestingly Marissa Mayer wants to invest in search;
“I actually think that desktop search is a reasonably well-understood problem,” “It has good solutions available in market, and it comes with a lot of user expectations. There is not a lot of room left for innovation in our estimation. We think that all of the interesting innovation is going happen on the mobile search side.”
Their agreement with Bing changed substantially this year and they have been experimenting with Google powered search. But it’s hard to see that ex Googler Mayer wants to hand her search back to Mountain View. Instead its clear she has her eye on the big prize in mobile – all those eyeballs generated by being the search default in the iPhone safari browser. Rumoured to be up for renewal anytime now, what better way to polish your pitch than run a series of experiments on Google search to look for ways of improving results? And soon to be flush with cash from the Aabaco spin off that reflects their Alibaba investment could she also go after Bing? Does that business really sit well with the new direction at Microsoft?
Upset? The Apple Car
Impressive sales results just weren’t enough for Apple – their apparent reliance on China has spooked some investors and the price dropped. In the UK Apple Pay seems to have got off to a good start – buying our coffee at Pret was quick and painless - and Money looks like the next industry they could dominate.
Their ability to enter, disrupt and upset new markets continues to fascinate, with news they have hired a veteran of the Auto industry. On the record as saying the car is the ultimate mobile device, Apple have the brand and the tech to go into this new space. This piece looks forward to Silicon Valley 4.0 with Apple dominating the market for electric driverless cars.
With Google and Uber already focusing on this space the traditional car companies are starting to respond; Ford have partnered with our friends at EasyCarClub, Daimler want to drive the Paris AutoLib programme (a Boris Bike scheme for cars) and BMW have their Drive Now cars all over Hackney. Now Audi, BMW and Daimler are clubbing together to buy the Nokia Here Maps – a defensive move as you don’t want the sat nav etc of all your cars running in Google or Apple maps, if they now compete with your cars.
There is one potential problem that keeps coming back in various jokes – when your smartphone or laptop gets a glitch rebooting isn't that much of an issue. Needing to reboot your car in the outside lane of the M25 may well be. Wired demonstrated how hacking a car is now relatively simple. If anyone can reassure people a connected car – driverless or not – is safe it would be Apple.
With share price at an all time high Google the competition is increasingly keen to talk with regulators. In Europe a number of adtech firms are arguing that Google is distorting the market by insisting customers buy a bundle of their products.
Given just how over supplied this market is we think it is competitive pressure that will drive consolidation rather than the regulators.
With their results out next Wednesday attention now shifts to Facebook. With their shareprice at an all time high and $100 not that far away how they do compared to Google will be scrutinised. This video of VC Jason Calcanis being interviewed by CNBC is a good summary of the positive view on Facebook
The excellent new teaser for the upcoming Bond movie Spectre shows why; the YouTube video had just over 5 million views when we watched whilst the native Facebook one showed around 1.7m. Now this isn’t too scientific as there may be other listings and these counters are not that accurate – and its only a few days in.
We think the key selling point for mobile adblocking is going to be the amount of bandwidth data it hoovers up. The smart people at Monday Note have looked into this with their usual vigour and find some pages have 500 trackers loaded.
So how long will publishers accept all this tracking from adtech? Does the downside outweigh any upside? Do the people running these businesses really understand what’s happening? Are they using their smartphones to look at their mobile sites and are they happy with the experience?
It feels like another case where our Missing Metric is needed – if publishers could measure how many people they were pissing off would things quickly change.
Of course its possible Google could be penalising those with bloated sites for a slow download time and it’s almost certain site visitors are giving up on waiting and clicking back.
As mentioned above we think competitive forces will drive consolidation rather than the regulators. Given that Paretos principle almost certainly applies to ad tech an audit of just who has added what to your content could lead to a dramatic slimming down. Both of your pages and that infamous Luma chart.
Amazon is rumoured to be launching their Fresh grocery delivery service in the UK as soon as September. No-one makes money from this service but Amazon care less about profit than Tesco, Sainsbury et al. Tesco were probably better prepared than most to fight Amazon, but their retreat from content and digital etc so they can battle their more traditional rivals has weakened them.
The big question is whether they could buy Ocado to accelerate their progress - like they did with video and their purchase of Lovefilm? Ocado is valued at £2.5bn with the share price 25% off its peak in Feb 2014, so isn’t ridiculously expensive.
The FT have been bought by Japanese media giant Nikkei – who also invested in UK media outfit Monocle recently. Having worked on the launch of FT.com back in the dotcom boom I have great affection for a good company with an outstanding product. Their Saturday newspaper is one of my favourite media experiences – best enjoyed on pink newsprint.
Given the summer is here we are resting over the next couple of weeks and our next Fix will be on August 14. Enjoy the sunshine.
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