Time Warner's AOL division began a 100-person layoff Friday, the Wall Street Journal reported.
The cuts came from the Platform-A group formed last September to offer ad inventory on its own and third-party Web sites. It will cut its employee count to about 1,500, the newspaper said. It quoted an AOL representative who said some people held redundant jobs from the consolidation of several groups into the division.
New eBay CEO John Donahoe told the Financial Times the online auctioneer will consider selling Skype if it can't find a way to make the service better help eBay's e-commerce business.
"What we're testing this year are the synergies," Donahoe told the Financial Times. "If the synergies are strong, we'll keep it in our portfolio. If not, we'll reassess it."
Donahoe did say Skype is doing well. It generated $126 million in the first quarter, up 61 percent from a year ago. This year, it's expected to generate $500 million in revenue and be profitable. Overall, first-quarter eBay revenues reported Wednesday were up 24 percent from a year ago to $2.19 billion. Profit was $460 million, up 22 percent from the same quarter a year ago.
But the question about Skype, which eBay acquired for $2.5 billion in 2005, has never been whether it's a decent business, it's whether it's a good fit for eBay. By the end of the year, the company will finally be closer to that answer.
If you're still wondering why the media world is getting turned on its head, consider the following anecdote.
A few years back, representatives from the Industry Standard, Wired, and Upside were invited to a public-relations gathering to talk about how they decide what to cover. After they finished their prepared remarks, a young woman in the audience stood up to ask a question.
"You talk a lot about tricks and tips on what we should do," she said. "But I've done all that and I still can't get you to cover my clients."
The reporter from Upside recognized the opening and rammed a Mack Truck right through it. "Ma'am," he replied, "you need better clients."
So much for winning hearts and minds.
When I heard that story, I bolted upright. Talk about tone-deaf arrogance. Would it surprise anyone if that woman is still seething today? So it is that she may take belated pleasure in knowing how the PR industry has since found ways to go around the gatekeepers.
On Thursday, I put up a post commenting on how raw PR releases increasingly rank higher on feeds and Web aggregation sites than reports from professional reporters and bloggers. In the subsequent 24 hours, my in-box filled up with messages from public-relations pros weighing in on my blog. The Reader's Digest version? I don't know the half of it.
"The truth is that there are fewer and fewer of you guys," said a veteran PR-meister I know who works for one of the bigger technology companies. "You can't call the same reporter and expect him to do five stories on your company in the same month. So we have to have other ways to get out that information."
"Search engine optimization and other tools we have are better than they used to be and we're just taking advantage of the technology," this person continued. "We can go direct to audiences and bypass the filters--like the media--and have it picked up."
Rick Sharga, a marketing consultant who relayed to me the anecdote at the top of this story, also left a talkback on my post pointing out that it's worse than I thought--both from a "news" and press release standpoint.
"One of the reasons you see press releases ranked higher in Web measurement surveys is that an increasing number of releases are written not for the press, or even for consumers, but for search engines. Instead of focusing on the news value of the content, the writers are focusing on keyword density. Writers who focus on actual news don't really have that luxury.
Secondly, after being frustrated for so long by being excluded from media coverage by writers who deemed their stories "unworthy," many PR pros just decided to leverage the Internet medium and disintermediate the journalist entirely--the intersection of direct marketing and PR, if you will.
This approach lacks the credibility given by a third party--always a benefit of good press coverage--but at least ensures that the message gets out. And finally, a lot of your fellow journalists are making the transition entirely too easy. Take a look at what passes for "news reporting" on a lot of sites--and in a lot of publications--and decide for yourself how much of what you're reading has been taken verbatim from the press releases themselves.
Intelligent readers who can now find exactly the same content on a "legitimate" publication site, a blog, and on a search engine figure this out pretty quickly. You're right that the lines between what's news and what's hype (or at least what's corporate-speak) are blurring pretty rapidly. Journalists now have the duel challenge of actually competing with the press release, and staying relevant enough that readers will value their perspective more than the company-issued draft. Interesting times, indeed."
Sharga, who these days is a vice president at Realty Track, later told me that in the last couple of years PR firms have tried to saturate their press releases with keywords that get Internet spiders to push their releases up the rankings. It's all about keyword density.
"You even have a category of releases that may never go out on the wires but the spiders still recognize them and can push them up into the rankings," he said.
Talk about reaping what you sow. For PR pros who have been ignored by the media, this is an extra scoop of schadenfreude to enjoy.
Peter Gabriel a fan of Radiohead-esque Internet efforts
Peter Gabriel
(Credit: Martin Klimek)
Peter Gabriel, the Grammy award-winning performer, this week applauded attempts by some artists to experiment with new ways to sell music.
Since October, the bands Radiohead and Nine Inch Nails have generated plenty of notoriety after distributing their own albums--without the backing of any music label--through heavy use of the Internet.
"I think it's fantastic that these new models are appearing," said Gabriel, one of the founders of the band Genesis, told me on Monday. "You don't need very many people to make a project economically viable if you're distributing yourself."
When it comes to musicians knitting together musical and technological interests, Gabriel was one of the pioneers. In 1999, he cofounded one of the first music download stores in Europe, On Demand Distribution, which was later sold to Loudeye.
On Tuesday, The Filter, a company that Gabriel has invested in, went into beta and is due to open to the public next month. The Filter is a recommendation engine designed to help improve people's chances of finding digital music, video, film and literature they like on the Web.
Gabriel says he's working on a couple of new tech projects. "They could be quite interesting if we get them right," he said. "One has something to do with a visual language...tech is fun as long as it doesn't bankrupt me in the meantime."
As for the changes in the music industry, Gabriel also was intrigued about Live Nation, the concert-promotion company that is agreeing to pay huge upfront money to sign marquee artists, such as Jay-Z and Madonna. In exchange, Live Nation shares in the profits from sales of records, concerts, downloads, and merchandise.
"I'm not someone who really is out to destroy the record business," Gabriel said. "But I think it has to reinvent itself as a service industry and be competitive with other entities...what I don't like is the old model where (the labels) own you and can ignore you and you're just put up on a shelf. That model is gone or should be...unless you get that big Live Nation-type deal where they are paying you so much that it's a very comfortable prison that you're in."
The company announced Thursday on its Yahoo Search Marketing blog that the gradual change has begun. Yahoo said the move is designed to improve ad relevance while opening up options to some advertisers who previously couldn't afford to participate. For example, making some advertisers bid more for an ad should help screen out bidders who aren't serious, the company said.
Another factor is advertiser quality. Those whom Yahoo esteems, on the basis of factors such as the rates that searchers click on their ads, potentially could be offered lower minimum bids.
Ad relevance is important because low-grade ads discourage searchers from clicking and from trusting ads in general. Conversely, high-quality ads, with attributes such as a useful "landing page" Web site that appears after a person clicks, lead to more clicks and a better image for advertisers overall.
But not everybody is happy. Search Engine Roundtable noted some forum posts in which people complained that their minimum prices were increasing by factors of two, three, or four.
"Yahoo just raised my minimum bids by 3-4 times on many keywords. They must be out of their minds," said one. Added another, "They have increased my bids by 2-3 times. Small business advertisers like me will be highly affected by this. We just can't increase our prices to such highs--it won't work on our ROI."
A problem this week hampered some Gmail users trying to use their PayPal accounts.
The problem caused Gmail to reject some legitimate PayPal service e-mails, Google confirmed in a statement Friday. The problem, reported Tuesday, prevented people from using Gmail to receive confirmation e-mails, set up new accounts, or reset passwords for eBay's online payment system.
The problem "affected a very limited number of users," Google said. "We worked quickly to fix the problem, and we apologize for any inconvenience this issue may have caused." The company encourages those with technical difficulties to report them to the Gmail Help Center.
Psystar's store remained down on Friday, as its former payment-processing company expanded its explanation of why it pulled its services from the computer maker's site.
My colleague Richard Koman, at ZDNet, obtained a statement from Powerpay's CEO, explaining the reasons why his company pulled Psystar's account.
"PowerPay initially suspended and subsequently terminated the merchant-processing account of Psystar for three primary reasons: product/services not as represented in application, sales volumes grossly exceeded, (and) no address verification utilized," Steven Goodrich said in the statement.
Merchant service accounts are set up based on the volume of transactions expected to flow through an online store, Goodrich said. Psystar went well over its expected volume for the year in just a couple of days, as Open Computer orders poured in.
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Lessons learned from the Psystar soap opera It's been one rough week for the online retailer of Mac clones; there's a congressional vote for free broadband; the countdown starts for a pro-China Internet protest. Download MP3 (13:45)
"In this case, the applicant processed almost 200 percent of his anticipated annual volume over just a few days. In doing so, the applicant never used AVS (address verification services), which is a vital part of validating cardholder consent," Goodrich said in the statement. "This, coupled with the fact that product was substantially different from what was described in the application, left PowerPay no choice but to suspend services. The discrepancy in addresses and other info only add to our discomfort with the account."
After Powerpay pulled its support, Psystar resumed sales of the Open Computer through PayPal, which processed my transaction on Wednesday. I contacted a PayPal representative on Thursday after learning that Powerpay had pulled its services to see what PayPal's policies were regarding these types of issues.
Thursday evening, PayPal sent me this statement: "At PayPal, we take rights infringement very seriously. PayPal's Acceptable Use Policy prohibits the use of our services for 'items that infringe or violate any copyright, trademark, right of publicity or privacy, or any other proprietary right under the laws of any jurisdiction.' We use internal guidelines, as well as reports from rights owners, to determine violations of this policy. We would apply these standards to any products being sold from the Psystar.com site - currently, there are none."
Psystar's Mac OS X-based Open Computer is again unavailable for purchase, after a site outage.
(Credit: Psystar)
The curious tagline at the end was put there because a PayPal spokesman said the company was unable to actually verify what was for sale on Psystar's site, since it was down when the company checked it out Thursday.
Charles Arthur at The Guardian, who kicked off some of the skeptical coverage regarding Psystar's ever-changing addresses, wonders if Psystar simply overestimated its ability to run an efficient supply chain.
Right now, it's really hard to know exactly what to make of Psystar. To be fair, there are red flags galore, but it's quite possible that this is a company way over its head, when it comes to running a product distribution operation. It's not hard to find all kinds of coverage this week suggesting that Psystar is an out-and-out scam, but there is little proof to support that conclusion. Absence of detail is not proof of wrongdoing, though it does (and should) raise suspicions.
It seems that one way or another, we're getting closer to figuring out the true nature of Psystar's operation. I called PayPal again this morning to find out if it is behind the current outage, and if so, whether it will allow Psystar to resume business. I also checked in with Apple to see if it has assembled an army of lawyers yet, but I have yet to hear back.
