Category: Reviews

Google has announced a new service today which allows its advertisers to publish print media ads from its adwords interface. Here is how google says it will work: Advertisers and agencies access Google Print Ads through the AdWords interface and interactively plan a targeted media buy-in up to hundreds of newspapers across the United States. Once they have identified target newspapers, they enter a bid for the available ad space and upload a creative. Newspaper publishers then view the bids, and either approve or reject them, with an option to provide direct feedback to the advertisers. Detailed reports and electronic tear-sheets provide accountability, and Google automates billing and payments for further transactional efficiency Unfortunately this service is available for US advertisers only. I can’t seem to follow the reason or see the constraint which locked print ads to US based advertisers only. We can be organizations which has advertising dollars, and who want to advertise in local newspapers, why should we prevented from doing that? We would have been very happy if the service was available in India, not that we would use it but we will be happy to know that we can use it 😉 Another striking thing is that, aren’t newspapers supposed to have a standard rate card for purchasing ads? Given this and the fact that newspaper advertising is already declining (notice that the papers are thinner?), what benefit is there for the consumer to bid for ads when they can buy it at list price from the newspapers directly? The only way to force customer to bid is when Google has exclusive contracts with these newspapers which I think is not possible as it will lead to anti-trust. Clearly, a benefit to newspapers is that they can lower the buying rates based on the current inventory and thus they have better chances of 100% booking. One more thing, Haven’t Google already killed or atleast seriously injured the newspaper advertising business? Why suddenly venture into non-internet based revenue model? It was the nemesis to newspaper advertising and this new model is bewildering! I guess we will soon see more about how this story unfolds – my message to newspapers is simple – If you can’t beat em, join em!

There is a lot of discussion around the internet where people are speculating that Apple has already sold 700, 000 iPhone within the 1st week of its launch. I find it very easy to digest but what is difficult to believe is that they have already made $200 – $266 million dollars in profit. Here is what a recent post in TechCrunch said: Based on the cost of manufacturing an iPhone (see post July 2), Apple would have made a profit of between $200million and $266 million in 3 days (not including marketing costs), on sales somewhere between $350million and $420million, significantly more than earlier estimates of Apple having a $300million weekend Here is what one of the commenters had to say in response: Anyone with any business sense applies all costs to determine a break-even point for a product before counting profits. Apple executives indicated that the iPhone was in development for 3 years. Apple’s R&D budget is on average 1.5B/year. Lets say a third of that budget was expended each year for the iPhone, iPod+itunes, and Mac (the three lines) – not counting Apple TV which is basically a torn down mac mini – we are talking about at least 1.5B in R&D spend over three years on the iPhone. A lot of iPhone advertising was Viral and blogs (aka FREE) but they did have a massive TV campaign which probably cost at least $25-$50M. Total Parts cost is a little more than 2 bills ($250) per iPhone, and manufacturing costs, Import costs, packaging, shipping and duties, based on my experience, should be around $75-$100 per handset. Lets assume there is NO retail markup since the iPhone is being sold ONLY in Apple Stores (ZERO Margin paid to self!) and ATT Stores (Assume zero margin to retail partner). Since 95% of models sold are the 8GB (based on surveys), we will ignore the lower price point ($499) for this exercise. The total GROSS profit per phone is about $275 (Revenue – Cost of Goods). Figuring in R&D Spend plus marketing, you’re looking at a break even point of 5.6 Million (5,600,000) iPhones! We’ve only sold a Tenth of that. When Jobs estimates 10 million iPhones in 18 months, he HAS to sell that many to recoup the massive investment put forth over the last several years. Lets start making business sense rather than writing a horribly inaccurate post that shows no sense of what “profit” means in GAAP I think that hits the problem right on its head. Another point that I would add is , sooner or later it will make no sense for people to buy an apple device for listening to music and another apple device to make calls. There is an integration required and when that happens any other differentiation apart from glitzy design will be lost !  Thus it will be interesting to watch how the growth momentum for both iPhone and iPod continue.

Wikipedia, the world’s largest online encyclopedia relies on millions on users for its content and likewise millions of users worldwide now rely on wikipedia on information about just any topic. On the other hand, ‘Wikiality’ is the method of making something up, but getting enough people to agree with you so that it becomes reality. Click here to read how Stephen Colbert caused chaos on Wikipedia and got banned for it. Here are other articles related to wikipedia: The Guardian: Can You Trust Wikipedia? (click here) The Register: Who owns your Wikipedia bio? (click here) The Register: Wikipedia: magic, monkeys and typewriters (click here) Why Wikipedia sucks. Big time (click here) My Point: 90% of the time what you get at Wikipedia is a great information, its the remaining 10% thats concerning. So, readers discretion is advised!