operating

Samsung Now Makes Much More Money On Mobile Than Google Makes Overall (GOOG)

Source: http://www.businessinsider.com/chart-of-the-day-google-vs-samsung-2012-11

Pretty insane chart from Horace Dediu at Asymco. He compares Samsung’s mobile operating income to Google’s overall operating income.

As you can see, Samsung’s mobile operating income will soon be twice as much as Google’s overall operating income. Samsung’s operating income is almost entirely because of Google’s Android.

chart of the day, google vs samsung income from operations, november 2012

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Wednesday, November 14th, 2012 news No Comments

Samsung Now Makes Much More Money On Mobile Than Google Makes Overall (GOOG)

Source: http://www.businessinsider.com/chart-of-the-day-google-vs-samsung-2012-11

Pretty insane chart from Horace Dediu at Asymco. He compares Samsung’s mobile operating income to Google’s overall operating income.

As you can see, Samsung’s mobile operating income will soon be twice as much as Google’s overall operating income. Samsung’s operating income is almost entirely because of Google’s Android.

chart of the day, google vs samsung income from operations, november 2012

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Wednesday, November 14th, 2012 news No Comments

Analysts, PC industry cool on Windows 8

Source: http://phys.org/news/2012-10-analysts-pc-industry-cool-windows.html

While Microsoft is touting next week’s launch of Windows 8 as the savior of the computer industry, PC makers and analysts are increasingly skeptical that the new operating system will lure consumers away from tablets and smartphones.

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Thursday, October 18th, 2012 news No Comments

Groupon’s Growth Bounces Back (GRPN)

Source: http://www.businessinsider.com/chart-of-the-day-groupons-growth-bounces-back-2012-2

Groupon’s sequential growth had been screeching to a halt, but the company managed to bounce back a little in the fourth quarter. That’s good news. Even better news, which is not shown here, the company  turned an operating profit.

chart of the day, groupon, quarter over quarter growth. feb 9 2012

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Thursday, February 9th, 2012 news No Comments

Source: http://gizmodo.com/5882173/the-dominos-super-bowl-pizza-war-room-oozes-pepperoni-cheese-and-sadness

The Domino's Super Bowl Pizza War Room Oozes Pepperoni, Cheese, and SadnessOn Super Bowl Sunday, 55 IT specialists will huddle together in a dark room to keep their company’s website afloat on the biggest day of its entire year, since it’s going to be bombarded by millions of ravenous fans. But the company they work for isn’t the NFL.

It’s freaking Domino’s.

Here’s how Domino’s social media specialist explained the roles of who’s in the room to The Atlantic:

* Application owners check the initial code of our applications, making up our defensive line.
* Those watching our operating systems are our second line of defense, or “line backers”… who react to every situation on the “field.”
* Those observing the network will jump in and “cover” if anything looks dicey on a larger scale, serving as our “cornerbacks.”
* In case someone tries a “Hail Mary” play to hack into part of our system, we have our Security team there as our “safeties” – our last line of defense!

Which is about the caliber of sports metaphor you’d expect from a social media specialist. But it doesn’t make it any less cool that Dominos stuffs bunch of nerds into a room during the super bowl to make sure you get your pizza. [Dominos via The Atlantic]

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Sunday, February 5th, 2012 Uncategorized No Comments

Hate To Be Rude, But Facebook Is Not The Next Google. It’s Not Even Close (GOOG)

Source: http://www.businessinsider.com/chart-of-the-day-hate-to-be-rude-but-facebook-is-not-the-next-google-its-not-even-close-2012-1

Information about Facebook’s 2011 revenues and operating profits leaked last week, just ahead of this week’s expected IPO filing.

If CNBC’s reporting is accurate, the numbers are disappointing for a company that’s supposed to be valued at $75 billion to $100 billion when its shares start trading.

Revenues came in at $3.8 billion, less than an expected $4+ billion. Operating profits were $1.5 billion, less than an expected $2 billion.

Facebook’s results look particularly disappointing in comparison to Google’s first seven years of business. We’ve drawn out that comparison below. 

The comparison is actually worse than it looks. Remember, Google was born at time when Internet usage, and online ad spending, wasn’t even half of what it is today. 

The fact is, Facebook is a huge consumer hit – 850 million people us the site each month – but it’s ad products are not, really. 

Google’s ad products are business magic. Consumers see ads for products that they literally want to see. 

So far, Facebook hasn’t found that kind of magic. Investors looking at Facebook’s S1 filing this week will have to wonder if it ever will.

chart of the day, revenue after launch for tech companies, 01/31/12

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Wednesday, February 1st, 2012 news No Comments

One Of The Most Impressive Cases Of Efficiency Growth We’ve Ever Seen

Source: http://www.businessinsider.com/chart-of-the-day-one-of-the-most-impressive-cases-of-efficiency-growth-weve-ever-seen-2012-1

Airlines don’t deserve credit for much — they’re notoriously loss-making, bankruptcy-prone, and customer-aggravating.

But with oil prices elevated for much of the past decade, they have done a great job battling the need for more fuel.

The below chart shows the massive divergence over the past decade between traffic growth (as measured by passenger miles) and jet fuel demand.

Says Barclays

According to Airbus and CERA, although cumulative growth in air traffic has totaled roughly 45% since 2000, fuel consumed by the global fleet of aircraft is up less than 5% over the same period, as airlines have accelerated aircraft parking/retirements of older airplane models and ordered newer more efficient replacements at a record pace. Greater efficiency (i.e. load factors) and fleet renewal are at the heart of an airline’s competitiveness in a world where fuel is now an airline’s largest single operating cost; this became the case mid-last-decade for the first time since the late 1970’s US deregulation.

chart of the day, jet traffic vs. fuel consumption, jan 17 2012

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Tuesday, January 17th, 2012 news No Comments

Mobile Advertising Comes Of Age

Source: http://www.businessinsider.com/millennial-media-ipo-2012-1

 

millennial media ad impressionsMillennial Media, a mobile advertising network, filed for an IPO last week. We were waiting for this, as we’d predicted this would happen this year (though we didn’t think it would happen so soon).

How is Millennial Media’s business?

Pretty good, actually.

Here are the highlights:

  • The company generated $70 million in revenue in the first nine months of 2011, from just $6.2 million in 2008;
  • The company has never had a profitable quarter and is still losing money, $4 million for the first nine months of 2011.
  • It’s pretty big and growing pretty fast: it processed 40 billion ad impressions in December 2011, and impressions are growing fast (see chart); Millennial Media has 16.7% marketshare according to IDC.

The Business

millennial media revenues and lossesYou’ll almost certainly see plenty of headlines about Millennial “never turning in a profit” throughout its road show. That’s correct. It’s also irrelevant.

Millennial is growing fast and into an enormous market opportunity–mobile advertising. It should not be profitable. Gartner thinks mobile advertising will be a $20.6 billion market by 2015, which may be conservative. That’s the opportunity Millennial is going after.

What’s more, Millennial Media seems to be gaining both market and operating leverage.

millennial media advertisersMillennial Media’s gross margin, which is roughly the amount it keeps after payments to publishers, improved from 34% to 39% in the first nine months of 2011 compared to the same period in 2010. This is happening as Millennial is growing both advertisers and spending per advertisers, as you can see in the chart at right.

What’s more, Millennial’s losses are narrowing, as you can see in the chart above.

All of this suggests that Millennial is gaining both market leverage–as it gets more established it can keep more of the revenue it generates for publishers–and operating leverage–gaining operational efficiencies as it scales up.

The Market

Mobile Advertising RevenueOne thing people might be worried about is competition from Apple and Google. We’re not. Here’s why:

  • Even though Google is much bigger than Millennial (see chart at right, using data aggregated and estimated by Business Insider Intelligence), most of that is on owned-and-operated properties. Google’s AdMob network is bigger than Millennial’s but it is not dominant.
  • Apple’s online advertising format/network, iAds, has struggled in the marketplace.
  • Ad networks are not a winner take all market. On the web, there are a few giants, and many profitable smaller players. There’s no reason why it couldn’t be the same on mobile, and Millennial, as the biggest independent player, is well positioned.

THE BOTTOM LINE: Millennial Media looks like a strong business scaling up nicely in an exciting, fast-growing market. It’s kind of a boring business–an ad network, but it seems to be executing well. More importantly, don’t trust the media reports that will inevitably bang on about how Millennial has never been profitable. Yes, that’s true, but it doesn’t matter.

 

 

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Tuesday, January 10th, 2012 news No Comments

Will Groupon Thrive Or Tank In Q4? This Chart Holds The Key (GRPN)

Source: http://www.businessinsider.com/this-chart-tells-you-whether-groupon-will-thrive-or-tank-in-q4-2011-12


groupon girl

Groupon’s Q4 2011 couldn’t be more crucial: Will it see the revenue bump it needs from holiday shoppers to justify its business model? Or will sales collapse following CEO Andrew Mason’s promised pullback on marketing and customer acquisition spending?

The Wall Street Journal reports that gross billings at the company rose just 1.5 percent from September to October, and not 22 percent as previously estimated.

Has the company reached a plateau before falling of a cliff? Or is it merely taking a pre-Thanksgiving breather before continuing its climb up the Christmas sales ladder?

The company could go either way. Until recently, the company has been dependent on a cash float (and the money it raised in its IPO, of course) to stay in business. Groupon generally makes a loss each quarter. It funds its operations by taking revenues from customers’ credit cards immediately and then delaying for 30 days or so the share of those sales it owes to the merchants who made the offers. As long as there is a greater amount of new money coming in than old money owed, Groupon continues to function.

But what happens if Groupon enters a period in which its revenues decline? At most companies that isn’t too problematic — management can cut expenses to remain profitable. But at Groupon the company’s marketing and customer acquisition expenses are closely related to its revenues. It is not at all clear whether Groupon’s revenues will continue to rise if Mason cuts costs. ! Here’s a chart showing Groupon’s net revenues plotted against its total operating expenses:

groupon

As you can see, in Q3 Mason pulled back on expenses (the green line) in hopes of seeing a profit, but revenue growth (the red line) began to lose steam. The WSJ report suggests it hasn’t regained momentum since, but the October sales period doesn’t include the Christmas run-up.

In Q4, this chart is all you will need to understand whether Groupon can mature into a business that isn’t funded by stock sales. If Mason can get the red line above the green line, or if he can keep the red line moving upward, then he should be congratulated.

If he cannot, then the company — and its investors — will need to do some serious thinking about whether their daily deal business model is viable or not.

SEE ALSO: Groupon Allegedly Hacked Merchant’s Email To Alter Contract

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Monday, December 12th, 2011 news No Comments

The End Of Google Search Is In The Palm Of Your Hand (GOOG, AAPL)

Source: http://www.businessinsider.com/the-end-of-google-search-is-in-the-palm-of-your-hand-2011-12


The funny thing about anti-trust cases against technology businesses is that technology businesses may sometimes monopolize a platform – but the platforms they monopolize are always on fire.

In the 1990s, Microsoft came under attack because Windows dominated the PC. 

But then the Internet made the operating system you use to access it from your PC irrelevant.

Now Google is getting scrutiny in Washington and in Europe because it owns so much of the search market.

But did you know that you hold the end of Google search is already in the palm of your hand?

Google makes money because people search the Web for stuff they want to buy (or for information about stuff they want to buy). Google brings them back a list of Web pages and ads. The ads are often as relevant to these commercial Web searches and the links, and so users click on them, ringing Google’s cash register.

But here’s the thing. I buy lots of stuff on the Internet, almost. I buy groceries. I buy movie tickets. I buy plane tickets. I book golf tee times. I order pizza. I buy Christmas presents from Amazon.

Google doesn’t take part in any of the transactions at all.

That’s because I do all this commerce not through the Web or through Google search; I do it through apps on my phone.

Check it out:

]iphone home screen

Now, at some point, I do search for these apps, just like I would search for Web pages. But I don’t use Google search to find them. I use Apple’s Apple Store.

My search results look like this. 

iphone home screen

Right now, Apple isn’t showing any ads in them, but that’ll change. When it does, it will mean less money for Google ads.

The good news for Google is that its mobile operating system, Android, owns a healthy slice of the smartphone market. It will be able to put ads in its own app store.

The bad news is that share is much smaller than its market share in search, where it also faces much weaker competition.

SplatF’s Dan Frommer made an awesome chart illustrating this:

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Monday, December 12th, 2011 news No Comments

Dr. Augustine Fou is Digital Consigliere to marketing executives, advising them on digital strategy and Unified Marketing(tm). Dr Fou has over 17 years of in-the-trenches, hands-on experience, which enables him to provide objective, in-depth assessments of their current marketing programs and recommendations for improving business impact and ROI using digital insights.

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