Your eMail Address as Currency

In advance of its much anticipated Initial Public Offering, Facebook entered into a settlement agreement with the Federal Trade Commission that bars the company from being deceptive about how it uses customers’ personal information, and Facebook is now required to get permission from customers before changing how personal information is shared.


Some estimates indicate the IPO value of the company will approach $100 billion.

By any standards, that’s a whole lot of money.


It was all made possible by the 800 million Facebook users who unwittingly shared their personal information without their explicit consent—all of whom have played a crucial role to make this marvelous payday for Mark Zuckerberg, his investors and his employees.

So, where’s your cut?

As the New York Times reported, even younger users are abandoning Facebook amid concerns over privacy and information overload. Does this evidence the beginnings of a Wall of Resistance to data mining? Or is an entrepreneurial play developing for those with the vision to skate for the open ice.

Monetizing the Value of Your Personal Data

Upward of $2 billion a year is spent on third-party data about individuals in the U.S., according to a Forrester report. Erosion of personal privacy ranks second only to fear over the financial crisis deepening, according to a McCann Worldgroup global study on consumer concerns.

And, while the vast majority of those surveyed indicated they perceived major benefits associated with sharing data with businesses online, many consumers appear to be beginning to realize just how much value to businesses is associated with their personal data.

A slew of new internet startups including (DC-based) Personal and Singly (Locker Project), are betting that personal "data lockers" designed to be the digital equivalent of a bank with security infrastructure in place can offer consumers considerably more leverage in realizing fair value for agreeing to share. The market convergence of cconsumer demand and government regulation could ultimately even compel existing data vendors, like Experian, to adopt the data locker model in order to remain competitive.

 
 
 
 
Best wishes to you and yours for a peaceful, festive and healthy holiday.
 
Paul

Darwin's Digital EcoSystem

Strap on your skates! 
What exactly is that unique quality that separates brands that fall to digital evolution from those that excel?  The ability of visionary leaders to recognize the need for change who then blaze a path toward renewed relevance among a new generation of consumers?

Survival of the Fittest?

Charles Darwin "adapted" this phrase (actually coined by British philosopher and sociologist Herbert Spencer) for use in later editions of The Origin of Species to refer to his Theory of Evolution..

"Fittest" is often misunderstood to refer to the physical sense - as in indomitable. 

Survival of the Most Adaptable would be a more accurate rendering of Darwin's theory.

Digital Darwinism

The demise of once formidable brands like Circuit City, Borders Books, Wherehouse, Tower Records, Pontiac, Saturn, and Palm serve as painful examples of companies that fail to accurately read technological tea leaves.

A Thanksgiving Day Washington Post article defined Digital Darwinism as the evolution of consumer behavior when society and technology evolve faster than some companies’ ability to adapt.

The brands that survive this latest era of cyclical and secular disruption will be those that are best able to evolve through Adaptive Innovation, making for the open ice before the competition is any wiser.

Ketchup on their Face?

And you thought you had post-Thanksgiving ajita?

That pre-TDay Heinz FaceBook only line extension launch hit a few speeds bumps early in the game. But the consumer packaged goods (CPG) giant managed to make lemonade anyway, according to Clickz.

Anybody try this stuff yet?
 
 
In Memorium
 

Outside the world of high-finance, Ted Forstmann was perhaps best known for dating Diana Spencer for a time, and more recently reality show hostess Padma Lakshmi.


Forrstmann was regarded as a philanthropist and a pioneer of the leveraged buyout through Forstmann Little & Co , the private equity firm he co-founded.. Dr. Pepper, Gulfstream Aerospace and Citadel Broadcasting are notable in this respect. He was also chairman and CEO of global sports and entertainment company IMG.

Forstmann passed away on Sunday November 21st at the age of 71.

Condolences to family and friends.

Dawn of the Post App Era

“Skate where the puck's going, not where it's been".


In the book “Total Gretsky”, author Bob McKenzie credits The Great One’s father, Walter with this sage advice. The ability to quickly find the open ice is critical to this type of strategic thinking. Successful entrepreneurs and their ivestors are expert at this.

Dawn of the Post-App Era?

When it comes to mobile investing, seasoned VC’s are thinking tools and platforms, not the next Angry Birds.

Last month during the Annual Silicon Valley App Conference, Jay Jamison a venture partner at BlueRun Ventures indicated how hard it is to zero in on the right investment by opining “I think the bar is raising”.

Jamison says he looks hard for tools and platforms that support the development and deployment of applications.

Somewhere out there Steve Jobs has a Cheshire Cat Grin on his face.

Jobs stubbornly insisted that the widely-used Flash technology wasn’t good enough for the iPhone and iPad, and instead favored the newer HTML5 standard, which is iOS, Android, RIM and MS Mobile compatible.

And HTML5 allows web developers to deliver a better SmartPhone experience than an app . . . without an app. Check your current browser’s (SmartPhone or Desktop) HTML5 supportability rating here.  You may be shocked.

Gone in a Flash?

ZD Net reports (Flash is dead. Long live HTML5) that “Adobe’s love affair with its Flash format has come to an end.” The report goes on to note that Microsoft is bailing on its Flash competitor Silverlight.

Will this result in a huge boost in rates of adoption (market penetration) for HTML5?

One camp argues a slow path to adoption primarily because the HTML5 standards are still in the development stage. The WC3 Working Group estimates final recommendations on standards will be issued in 2014.

But Elevations Partners’ incredibly tech savvy co-Founder and Director Roger McNamee has already made a bee-line for the open ice.  Watch his recent presentation at a Paley Center for Media Conference from FORA TV .

Unlocking Value

A Line Extension Roll Out in the New Media Eco-System


An insanely great concept or product virtually sells itself. It is something so extraordinary that critical masses of people are anxious to be first to spread the word to peers they want to impress..

And all that is necessary is for the originator is to get the concept or product into the hands of a select group of opinion-leaders who are likely to care.

If your product or concept is exceptional, constant social networking - interactive hype – all the new media stuff the “experts” tell you is absolutely necessary really isn’t. Because most everyone who matters (even my octogenarian uncle) is already connected, everybody's online; there are now more cell phones than people in the United States. If an idea or a product is “insanely great”, the public will rush to spread the word for you.

The guy whose last name was the same as what this country needs more of got it!

Brand building is an “S-L-O-W” process.

Everything with enduring worth develops slowly.

Now, I can’t tell you if HJ Heinz has developed an insanely great product-line extension, but their marketing strategy has already proven buzz-worthy.


On November 14th the company will roll-out Heinz Tomato Ketchup Blended with Balsamic Vinegar - but only on Facebook.

It costs markedly more than the high-fructose original and you pay $2 for shipping. But you can bet there are a bunch of budget foodies out there who lust for a sample…. The “anticipation” is palpable. To them, this exotic product blend represents a self-satiating luxury on the cheap that represents an early adopters’ “status” acquisition. Conceivably, Heinz has come up with a formula to market a product that “fans” will love so much that they will be anxious to recommend it to like-minded “friends”.

This is a great example of “Adaptive Innovation” in an effort to elevate a line extension to insanely great status.   This is not a product endorsement, but a tip of the hat to an innovative approach to marketing an otherwise conventional business decision.

Click and Clack

Just when radio appeared to be regaining a little respect (at least in the financial community) – on St. Patrick’s Day the US House voted to de-fund National Public Radio.

Chris Ensley at Investment Banking firm Coady Diemar Partners says the deal market could be loosening up in general – “with banks lending on attractive terms for larger station groups, we believe it is mostly a matter of time before lending on attractive terms trickles down to smaller entities.”

In “Radio M&A Roars Back to Life” Ensley writes that the industry has “been waiting for the last two years for a bellwether transaction that would help redefine” current trading market multiples. Ensley’s analysis suggests that recent deals involving Hubbard/Bonneville, Cumulus/CMP and Cumulus/Citadel “firmly establish multiples in the 8x-9x range.” One could argue that in truth the major market properties involved were assigned the highest multiples for valuation purposes.

Both trading and financial markets instinctively embrace signs of stability. So, these three deals are valuable in terms of providing a real-time empirical basis for reasonable valuation assumptions.

Total cost of Citadel/CMS acquisition - $3.14B – Crestview Partners - $500m – 2.6b in debt?

Recall that unable to service $2.5 in debt, Citadel filed for bankruptcy protection in December of 2009.

Management at both Citadel and Cumulus embarked upon aggressive operating cost cutting initiatives to compensate for shrinking advertising revenues. It would appear that the merged entity will have to rely heavily upon organic sales growth (and perhaps some divestitures) as opposed to further cost containment in order to effectively deleverage. “Scale” alone might not be enough of a catalyst given the glut of competitive marketing platforms.

Which gets us back to Click and Clack.

In his clever rant during the NPR de-funding debate, NY Rep Anthony Weiner mocked Republicans for ignoring issues a whole lot more important to this country than National Public Radio. Weiner’s clever stand-up belittled the importance of radio in general as it pertains to vital community service. Our preeminent NPR affiliates here in Baltimore (WTMD and WYPR) provide exemplary service to their Baltimore area advocates.

If Cumulus is ultimately proven successful with its consolidation/economies of scale business model, management would do well to follow the NPR community service example. In fact, radio operators everywhere should follow NPR’s lead – in most markets this is a beloved brand, irrespective of politics.