Tag Archives: Company coverage
by Liz Hester
Google Inc. is trying something new with their advertising – having it feature you. Users of Google+, the social media site, may now have their photos pop up next to advertisements in an attempt to make them even more personal.
Here’s the story from ABC News:
Google+ users may now see their pictures plastered next to advertisements for a range of products, without compensation.
The company announced on Friday that users’ names, profile photos and endorsements may appear on “reviews, advertising and other commercial contexts” by default, under the new terms of its service that kick in on Nov. 11.
The policy changes mean that every time a user over 18 reviews an album or bakery online for example, they may become brand ambassadors for their recommendations, which are then broadcast to others within their Google+ network.
Google explained that “shared endorsements” help people “save time” and improve results.
“We want to give you — and your friends and connections — the most useful information. Recommendations from people you know can really help,” the company said on its website.
But the move has raised a host of concerns about privacy and the use of unlicensed advertisements, The Wall Street Journal reported:
Many of Silicon Valley’s most popular sites say that such social-context ads are more useful—and maybe even less annoying—than traditional types of online advertising. But they have raised the hackles of privacy advocates, and advertisers have yet to fully buy into their effectiveness.
Even before Google’s latest privacy change, when users clicked the “+1″ button—Google’s equivalent of Facebook Inc.’s “like” button—their endorsement might have appeared in an ad.
Now it is expanding the type of content that may appear in ads—for example, ratings of songs in the Google Play store, or restaurant reviews posted to its Google+ social network.
Moreover, users who sign into third-party applications using their Google account may also see their activity used in Google ads. The company hasn’t specified which apps, what actions or where such ads might appear.
“We think it’s a problem,” says Marc Rotenberg, executive director of the Electronic Privacy Information Center. “It’s a commercial endorsement without consent and that is not permissible in most states in the U.S.”
In response, Google said in a statement: “The privacy and security of our users is one of our top priorities. We believe our Terms of Service updates are a positive step forward in clarifying important privacy and security details for our users, and are in full compliance with the law.”
The Washington Post pointed out that the Federal Trade Commission would look at the use of sponsored stories — once the government re-opens:
Last month, the Federal Trade Commission said it would review whether Facebook’s push into sponsored stories violated the company’s 2011 privacy settlement with the federal government. That agreement required Facebook to give adequate notice of changes in privacy policies and to make sure users aren’t misled about how their data is being used.
Due to the government shutdown, the FTC said it could not respond to a question on whether its investigators would also examine Google’s new advertising practice.
Google said its new advertising policy would apply only to the 390 million people who have signed up for Google Plus, the company’s social network. The company can also draw on endorsements made with Google’s +1 button, which is similar to Facebook’s “like” button and appears on sites across the Web.
A user who wants to limit the reach of his or her advertising endorsements could adjust settings so that a positive review for, say, a car is shared only with a small circle of friends on Google Plus, the company said.
Some privacy experts commended the way Google is rolling out the feature by giving users a month’s notice of the changes and options to decline.
CNN also makes an interesting point that only positive reviews and endorsements show up in the advertisements, since obviously companies won’t pay for negative press:
Other social media companies have toyed with featuring their users’ photos in ads. If you Like a company on Facebook or post a positive review on its page, that can be used in that company’s Facebook ads.
You may have noticed a sponsored post in your News Feed that shows which of your friends have liked a particular brand. As with Google+ reviews, the key to not appearing in these types of ads is not endorsing brands. (Unlike Google, there’s no opt-out option for sponsored stories on Facebook.)
The idea of promoting a brand and sharing positive opinions could appeal to many Google+ users who are already actively leaving reviews. Some people just really love brands, whether they’re sports drinks, smartphone makers, movies or video games. They want to broadcast that love to the world, sharing their positive opinions wide and far.
Negative opinions can be equally useful information for their friends and families, but those bad reviews are not usable by advertisers. And for now, there’s no -1 button on Google+ or Dislike button for Facebook.
At least Google is giving users some time to think about how they’d like their information shared and the ability to opt-out. It’s another way for companies to make money off the vast troves of personal information they collect and store via social media tools. Who needs a secret anyway?
by Chris Roush
Chicago Tribune next week will launch new coverage of corporate innovation in Chicago’s business community, whether at start-ups or larger established companies, according to sources familiar with the plans, reports Lynn Marek of Crain’s Chicago Business.
Marek writes, “The content will appear in print and online with the more extensive treatment on the paper’s website, as part of its business section. The effort, developed by Editor Gerould Kern, will have its own dedicated resources and reporters to produce content and host related events, a source said.
“The move comes as the newspaper’s parent company, Chicago-based Tribune Co., is planning to spin off its publishing group, which includes eight major dailies, to separate it from the more profitable broadcast division. The newspaper group had been put up for sale earlier this year, but those plans were put on hold.
“The papers, which also include the Los Angeles Times and Baltimore Sun, also have been bracing for cost reductions, including possibly job cuts, that Tribune CEO Peter Liguori has said the company is contemplating.
“The new business coverage is slated to begin on Oct. 15 and will be exclusively sponsored, at least initially, by Chicago-based United Airlines, which telegraphed its sponsorship in a half-page ad in the paper on Oct. 11 that declared: Chicago Tribune Blue Sky Innovation — coming soon.”
Read more here.
by Chris Roush
A news release saying Samsung was purchasing a Swedish tech company for $650 million was published on Dow Jones before it was discovered to be false.
Sven Grundberg of The Wall Street Journal writes, “Dow Jones & Co.’s newswires republished the release from the Cision news release service. The release was removed from the Dow Jones service and a correction was published. Dow Jones, owned by News Corp., is the publisher of The Wall Street Journal.
“It is the latest in a string of bogus releases. In April, a fake news release was distributed that said Chinese search giant Baidu Inc. made an offer to acquire social-gaming company Zynga Inc. And in November last year, a fake news release posted on PRWeb.com said that Google Inc. had acquired wireless provider IOCA Inc. for $400 million. Both companies quickly debunked the news.
“In an interview Friday afternoon, Cision CEO Magnus Thell said ‘we’ve got a control system, but in this case it was breached.’ Cision’s shares closed down 5.4% on Friday.”
Read more here.
by Chris Roush
The Wall Street Journal is looking for an experienced investigative journalist to do deeply reported stories about American companies. The ideal candidate will be extremely comfortable with the full range of company filings and have a demonstrated facility in finding and analyzing data.
The job involves unearthing and reporting out the clues hiding in the thousands of pages of typical companies’ securities filings, as well as turning up newsworthy patterns in cleverly assembled data sets. Our interests for this job include taxes, regulations and compensation, but aren’t limited to those areas, and the successful candidate will be encouraged to identify areas of their own to investigate.
The job is based in New York, but alternative locations wouldn’t be ruled out.
Please attach a resume, cover letter and three to five published clips to your online application.
Dow Jones: Making Careers Newsworthy
At Dow Jones our Managers work to meet our equal opportunity and affirmative action objectives and our Employees help to foster a professional, welcoming and encouraging environment. EOE/AA/M/F/D/V
To apply, go here.
by Chris Roush
Jill Krasny of Inc. magazine takes a look at “C-Suite,” a new show premiering Tuesday on Bloomberg Television.
Krasny writes, “Before filming each episode, Hayzlett pulled stories from Bloomberg’s terminals and local reports. ‘Everything we could get our hands on,’ he says. Before setting foot at Dunkin HQ, Hayzlett boned up on the company’s financials and its two failed expansions in California.
“‘We know those things walking in so that we can get right to the questions,’ he says. ‘They’re not just in the business of making donuts, they’re in the business of growing their franchises. And 99 percent of their leadership is new. I ask, What makes you think you’re going to get it right this time?’
“Most companies on the show should appeal to viewers because of their recognizable brand names, but Hayzlett says he gravitated toward those with a different approach to business and massive reach. ‘A company like Dunkin touches people all over the country in myriad ways,’ he says. Others include CrossFit, MGM, and the Seattle Sounders, a minor league soccer team.
“The hope is that small business owners will come away from the show feeling their companies aren’t so different from those in the big leagues.”
Read more here.
by Liz Hester
Looking through the weekend’s business coverage, most of the stories seemed to be about Twitter and its initial public offering. There were management stories, technology stories and rival stories. But a couple of the most interesting were about data mining.
Here’s one from the New York Times:
Once, only hairdressers and bartenders knew people’s secrets.
Privacy advocates fear that consumers do not realize just how much of their private information is on their phones and how much is made vulnerable simply by downloading and using apps, searching the mobile Web or even just going about daily life with a phone in your pocket. And this new focus on tracking users through their devices and online habits comes against the backdrop of a spirited public debate on privacy and government surveillance.
On Wednesday, the National Security Agency confirmed it had collected data from cellphone towers in 2010 and 2011 to locate Americans’ cellphones, though it said it never used the information.
Selling information is apparently a good business for Twitter, according to the Wall Street Journal:
In its IPO filing Thursday, Twitter Inc. disclosed how much the microblogging platform earned from a lesser-known side business: $47.5 million came from selling off its data to a fast-growing group of companies that analyze the data for insights into news events and trends.
That is a small amount compared with the revenue generated from advertising, but Twitter’s data business has rippled across the economy. The site’s constant stream of experiences, opinions and sentiments has spawned a vast commercial ecosystem, serving up putative insights to product developers, Hollywood studios, major retailers and—potentially most profitably—hedge funds and other investors. Backed by millions of dollars in venture capital, hundreds of “social listening” firms have emerged.
“The economic impact of Twitter is massively bigger than whatever lies in their [IPO] filing,” says Rob Bailey, chief executive of Data Sift, a London-based social-data analytics company.
Social-data firms spot trends that it would take a long time for humans to see on their own. The United Nations is using algorithms derived from Twitter to pinpoint hot spots of social unrest. DirecTV uses Twitter data as an early-warning system to spot power outages based on customer complaints. Human-resources departments analyze the data to evaluate job candidates.
One opportunity may be on Wall Street. Dataminr Inc., which has raised $30 million in funding this year alone, has made serving traders its core business. It uses algorithms similar to those employed by hedge funds to conduct high-speed trading. Five minutes before news of last week’s Capitol Hill shooting broke on TV, Dataminr subscribers got an alert to take action—giving them a leg up on the news that led the S&P Index to drop by 20 points five minutes later.
Ad Age wrote the story last week about Twitter’s ability and potential to capitalize on data mining:
When thinking about Twitter’s future, almost all the focus is on advertising. After all, 85% of its sales came from ads in the second quarter. But some observers believe Twitter has lots of room to expand its other revenue stream: data.
In the first half of this year, Twitter collected $32.2 million through its data licensing deals with authorized resellers, an increase of 53% from a year earlier. That kind of growth is nothing to scoff at, but it was overshadowed by ad revenue, which more than doubled over the same period to $221.4 million.
Twitter said in its IPO filing that it expects data’s contribution as a percentage of revenue to continue to decline, presumably as ad revenue continues to blossom.
Still, Twitter is treating data like a precious commodity. In 2011, for instance, Twitter turned off the spigot that pumped tweet-data into Google‘s Realtime search.
Going public could raise Twitter’s status with advertisers and agencies, and more media spending will prompt more demand for its data, said Craig Elimeliah, VP of creative technology at agency RAPP. “There’s definitely a lot more planned around integrating Twitter into various aspects of campaigns and not just for the vanity of integrating Twitter,” he said.
While most people don’t seem to worry about where their data is going and who is getting it, yet another company with access to information going public raises several questions about where it should go.
What will be the most important is how companies, like Twitter, that can make a significant amount of revenue by selling information will chose to balance money and privacy.
by Chris Roush
Bloomberg News and Warburg Pincus are among those considering buying Pearson’s financial news provider Mergermarket ahead of an Oct. 7 deadline for first-round bids, several industry sources close to the deal told Reuters.
Anjuli Davies and Sophie Sassard of Reuters write, “Pearson put subscription-based Mergermarket on the block in July saying it no longer had a place in a group increasingly focused on education, digital services and emerging markets.
“Information has been sent to over 50 potential bidders in total including 25 leverage buyout funds in what is seen as a highly competitive auction, the sources said.
“Trade rival Bloomberg as well as Euromoney and McGraw Hill Financial, which lost to Pearson in a 2006 bid battle for Mergermarket, may be interested in the business, they said.
“News and information company Thomson Reuters is not interested in the business, the sources said. Thomson Reuters declined to comment.
“Private equity firms that could be interested in Mergermarket include Warburg Pincus, which has teamed up with the founder of Mergermarket, Caspar Hobbs, Blackstone, Advent, Exponent, HG capital, Charterhouse, and BC Partners.”
Read more here.
by Liz Hester
Twitter is hoping to turn its 140 character social information-sharing network into $1 billion by selling shares to the public. While the offering has been expected, an official filing with the Securities and Exchange Commission typically reveals some of a company’s finances and inner workings. The business press was definitely paying attention.
Here are the initial details from Wired:
Twitter has filed to go public, saying it will sell shares under the name TWTR. The IPO will initially seek to raise up to $1 billion.
In its first public disclosure of financial performance, Twitter revealed it is growing revenue fast but losing money. In a registration filing with the Securities and Exchange Commission, known as a “form S-1,” Twitter says its revenue increased to $316.9 million in 2012, from $106 million in 2011. Its net loss for 2012 was $79 million.
In the first six months of this year, according to the filing, it pulled in $253.7 million in revenue, up from $122 million in the first six months of 2012. But its losses appear to be widening. The company lost $69 million in the first six months of this year, not far from its total loss for all of last year.
The company said it had 218.3 million users per month, on average, for the three-month period ended in June. That’s up from 85 million users per month in the same period last year.
The New York Times took a much more entertaining approach to the story, invoking Lady Gaga in the lead:
Twitter, which was built on messages so short they could be texted on a cellphone, revealed on Thursday just how central smartphones and tablets are to its business — underscoring the technology industry’s rapid transition to a mobile world.
But despite the evidence that it is increasing its revenue from mobile advertising, the company also disclosed that it has not yet turned a profit, and has been steadily losing money, and that its user growth has been slowing significantly since the end of last year.
The Wall Street Journal added this context and background about the highly anticipated offering, noting that Twitter has a lot more room to grow than Facebook:
In seven years, Twitter has grown from a wobbly startup to a social phenomenon where in just 140 characters its 215 million monthly active users tap out more than 500 million messages each day.
The short-message service serves as a global forum in which users break news, organize protests and gripe about what they ate for lunch. As early as 2008, Twitter turned eyewitnesses into “citizen journalists” who reported on a terrorist attack in Mumbai.
Now, once-elusive public figures including the pope, Warren Buffett and Kanye West “tweet” their thoughts and interact with other users. Twitter CEO Dick Costolo uses the service to answer users’ troubleshooting queries. Businesses, stock pickers and politicians alike analyze the sentiments expressed on Twitter as important indicators.
Despite its ubiquity, Twitter remains an immature business. The filing showed Twitter has far fewer users and generates less revenue per user than Facebook .
When Facebook filed for a public offering, the company revealed sales of $3.7 billion and a profit of $1 billion for 2011. It also had 845 million monthly active users, a huge bragging point as it pitched itself to investors.
Twitter’s growth is also a question. The majority of Twitter’s revenue, about 75%, is from the U.S., even though three-quarters of monthly users are outside the U.S. Facebook also has a wide gap between its usage and its ad revenue outside the U.S., where advertising businesses typically are less mature.
Bloomberg Businessweek had a great piece that analyzed several key points in the S-1, including the advertising information:
Tallying the Advertising Haul: Twitter says it made $253 million in the first six months of this year. Since advertisers spend more around the holidays, if we use last year as a proportional guide, it seems reasonable to project that Twitter will make somewhere around $655 million in total revenue over all of 2013. The vast majority of that revenue—87 percent—currently comes from advertising, with the rest tied to licensing deals with marketing services for Twitter data. So that would means Twitter is set to make $570 million from advertising this year—slightly less than the widely cited eMarketer estimate of $582 million.
But as it makes more money, Twitter also spends more money. The company reported a 41 percent larger loss in the first six months of 2013, compared to the year before. It is spending more than twice as much on sales and marketing than it did last year. Ditto for research and development. So far in 2013, the company says it has lost $69.3 million. —JB
Big name IPOs are always exciting, generating much buzz. While Facebook has finally climbed above its initial offering price, many retail investors may be wary of getting into another hot name. It remains to be seen how Twitter prices, but I’d wager the banks on the deal will also be more careful after several admitted mistakes on the Facebook offering. Twitter may end up looking smart by letting Facebook go first and work out all the kinks in the process, giving investors a better sense of how to evaluate the revenue potential for the company.
by Chris Roush
Bloomberg Television announced Thursday the debut of “C-Suite with Jeffrey Hayzlett,” a prime time series that features an inside look at companies that are shaping the global business landscape.
The first episode will air on Tuesday, Oct. 8.
In each week’s 30-minute episode, Hayzlett, a contributing editor for Bloomberg Television and former c-suite executive who has led strategy on Wall Street and Main Street, will spend time with the executive team of a company to discover what makes them tick. “C-Suite” profiles different business models, from big companies to insurgent start-ups that are disrupting their industry, offering new perspective on boardroom decision-making by top executives leading the way.
In the Oct. 8 premiere, Hayzlett visits Dunkin’ Donuts headquarters in Canton, Mass., and gets access to the global food chain’s leadership, including Chairman and CEO Nigel Travis, President Paul Twohig and CFO Paul Carbone, who discuss Dunkin’s business philosophy and its brand refresh. Hayzlett also tours the never-before-seen R&D kitchen to see how the food giant develops new products and researches potential flavors.
Upcoming episodes of Bloomberg Television’s “C-Suite” will feature MGM, Domino’s Pizza, Crossfit, Major League Soccer and Heineken, among others.
by Liz Hester
Pharmaceutical giant Merck & Co. is cutting jobs and research in a move that will likely hurt innovation and drugs. As revenue declines across the industry, companies are looking for ways to increase the bottom line.
Reuters had this story:
Merck & Co, taking a cue from rival drugmakers that have slashed research spending to bolster earnings, said it will cut annual operating costs by $2.5 billion and eliminate 8,500 jobs, or more than 10 percent of its global workforce.
Merck, whose shares rose 2.3 percent, said it aims to narrow its focus to products with the best chance of winning regulatory approval and achieving substantial sales.
It will jettison research products with less likelihood of success. It plans to pull the plug on some drugs already in late-stage trials, and will license some products to other companies.
The job cuts would be in addition to expected remaining cuts of 7,500 positions from a 2011 restructuring that involved elimination of 13,000 positions – largely of administrative personnel but also related to sale or closure of manufacturing sites.
Merck, like Pfizer Inc, AstraZeneca Plc and Sanofi in recent years, is reaching again for its axe because of competition from generic medicines, stalled sales growth of its important drugs and failures or delays for high-profile experimental drugs.
But half the job cuts from Merck’s new restructuring will come from research and development, which has been a protected sphere for the drugmaker, which has long been renowned for its research prowess but has stumbled in recent years.
The Wall Street Journal added this context about the cuts, saying that despite recent revenue gains Merck is still behind on developing new drugs:
Advancements in the understanding of genetics and biology have increasingly fueled drug development in recent decades, and many of the most promising new drugs have been aimed at niche disease populations, developed in the labs of biotechnology competitors considered closer to the cutting edge of science. Merck has begun to catch up, most recently with an experimental cancer drug that harnesses the immune system to fight tumor cells. But some former executives worry that the company wasn’t quick enough to adapt and that its declining size mirrors the shrinking ambitions of other large drug makers.
“Merck and lot of the big companies wrongly tried to target blockbusters for major, mega-conditions, and that strategy failed,” said Eve Slater, a former research and development executive who left Merck in 2002. Now, “they make small acquisitions and have risk absorbed by the smaller biotechs that are populated by their former scientists.”
Merck Chief Executive Kenneth Frazier said in an interview Tuesday that the changes should help it improve its return on investment, focusing on diseases like cancer, Alzheimer’s disease and the hepatitis C virus. Mr. Frazier said that, despite the cuts, Merck was committed to research and development and would continue to invest for the long term.
USA Today noted that Merck also planned to relocate its headquarters:
The overhaul is part of a broader strategy being set by the company’s R&D chief Roger Perlmutter. Frazier hired Perlmutter in April as a replacement for Peter Kim, following developmental setbacks for experimental drugs in cardiovascular, surgery and osteoporosis.
The company also said, on Tuesday, in a separate news release, that it will move its global headquarters from Whitehouse Station to its existing facilities in Kenilworth, N.J. The company had previously announced that it would close its Whitehouse Station building and relocate its global headquarters to Summit, N.J.
But after re-evaluating its real estate needs in the state, Merck determined that it could achieve greater cost savings and operational synergies by closing both its Summit campus and its main Whitehouse facility, according to the Merck release.
The transition is expected to begin next year and be completed in 2015.
The Journal also highlighted Merck’s shift in strategy toward acquiring experimental drugs:
On Tuesday, the company said it would discontinue or out-license certain drugs in late-stage development, and put greater emphasis on acquiring experimental drugs from outside the company, which could help minimize exposure to costly research flops. Such a strategy is a departure from the days when large firms prided themselves on developing new drugs internally, said Dr. Slater, the former Merck executive.
“They’re sitting 30,000 feet in the clouds waiting for the biotechs to develop the good targets,” said Dr. Slater, now an associate clinical professor of medicine at Columbia University. “Merck is trying to reorient itself as a biotech [venture capitalist].”
Merck said it would continue its focus in areas like vaccines and diabetes, where it already has sizable footprints with drugs like Januvia, which had sales of $1.07 billion in the quarter ended June 30.
What is troubling about this development is what will happen to innovation and finding new ways to cure diseases. Discovering new treatments and funding for the research is difficult enough. For many ailments, drugs only come from big companies with the resources to find them. If one of the largest in the business is cutting research it doesn’t bode well for those hoping for new ways to cure their diseases.
I’d like to see some follow-up stories on how this move will affect patients and their families, particularly given the new health care laws and reimbursement programs.