AIG revisited - when is a bonus not a bonus? When it's a retention plan.

You'll recall how I started my Tuesday post:

I'll be the first to admit that AIG's compensation structure is apparently divorced from reality. A compensation structure is supposed to reward employees who contribute positively to a company's income, and if a division is responsible for unprecedented losses, it's impossible to see how ANYONE in the division should deserve compensation.

When I wrote this, I failed to explicitly state my underlying assumptions behind my statement - namely, that the compensation I was talking about was a bonus.

I am familiar with a bonus structure in which the employee is awarded the bonus based upon multiple factors, including individual accomplishment, division performance, and overall corporate performance. Specifically, the bonus is calculated via a multiplier effect, when several factors are multiplied together, and then multiplied against your salary, to calculate your bonus. Now when you multiply things together, if any of the factors is equal to zero, then you get nothing.

Thus my underlying assumption, based upon the scenario listed above, is that if AIG had...um...less than optimal performance, one of the multipliers for the bonus formula would be 0, and therefore no one would get a bonus.

Obviously, AIG's compensation structure used a different method of calculation, and I was wondering how these bonuses were calculated.

But perhaps I was misled by the common use of the word "bonus" in descriptions of this issue. What if these bonuses truly weren't bonuses?

I shared my Tuesday post on Google Reader, which resulted in the post showing up in my Empoprises FriendFeed stream. And Stephen Mack (who was, at the time of the comment, known as Stephen O'Mack) said the following:

Part of the problem is the word "bonus," which implies it's awarded for good performance, when the reality is in many cases the bonuses are to be awarded no matter what (or for staying on the job, regardless of performance). I bet we'll see different terminology (such as "retention compensation") and pay practices in the future, where more will be rolled into salary instead of bonuses.

So what exactly is the AIG plan? First off, at least according to Andrew Cuomo, it's not a bonus plan per se. Here's an excerpt from Cuomo's Monday letter:

We were disturbed to learn over the weekend of AIG's plans to pay millions of dollars to members of the Financial Products subsidiary through its Financial Products Retention Plan. Financial Products was, of course, the division of AIG that led to its meltdown and the huge infusion of taxpayer funds to save the firm. Previously, AIG had agreed at our request to make no payments out of its $600 million Financial Products deferred compensation pool.

So you can see that the plan is referred to with the words "retention" and "deferred compensation." Initially, I was unable to locate any other details about AIG's Financial Products Retention plan, although presumably people in New York's state government and the U.S. Federal government have an understanding of the plan.

So I took a look at some other entity's deferred compensation plan. Let's look at, for example...the State of New York itself:

The New York State Deferred Compensation Plan (the "Plan") is a State sponsored voluntary retirement savings plan that is offered to State employees and employees of approximately 880 local government jurisdictions that have adopted the Plan. Its mission is to help State and local public employees achieve their retirement savings goals by providing high quality, cost effective investment products, investment educational programs and related services.

After doing a bit more search, however, I found some documentation on the AIG plan via Fox Business.

AIGFP Employee Retention Plan

Publish at Scribd or explore others: Other Business & Legal planning template

Here's a quote from the first page of the plan, courtesy Empty Wheel.

In the first quarter of 2008, AIGFP adopted a retention plan for about 400 employees that provided guaranteed payments to employees if they worked through specified payment dates (or either resigned for good reason or was terminated without cause before the relevant dates). At the time, AIGFP was expected to have a valuable, on-going role at AIG. The plan was implemented because there was a significant risk of departures among employees at AIGFP, and given the $2.7 trillion of derivative positions at AIGFP at that time, retention incentives appeared to be in the best interest of all of AIG’s stakeholders.

AIGFP, by the way, stands for American Investment Group Financial Products.

So, while the language above isn't the true language of the plan, a few things become clear:

• The purpose of the plan was to retain people who were, at the time, identified as key people who were critical to AIG's success.


• For whatever reason, AIG decided that it was so critical to retain these people that they would get paid for staying, and possibly even get paid if the left (provided they didn't leave for cause).

What this means is that the only way that someone wouldn't get the retention money - or what has been called a bonus - would be if they were terminated WITH cause.

And before you exclaim that AIG was filled with a bunch of conniving crooks anyway, remember that any employee that is terminated with cause may have some avenues to contest the termination - something that could take months, or years.

So now I understand this a bit better. AIG was willing to do almost anything to keep these people back when times are good, and at least presently isn't able, or willing, to abrogate the agreement when times are bad.

But what would happen to the agreement if AIG were to land in bankruptcy court? Would its obligations to pay these "bonuses" cease?

European patent reform, or a political turf battle?

Not as cool as killing mosquitoes with lasers, but HS Daily Wire did carry this significant story:

The European Commission has just reiterated its demand for the creation of a single European patent. It said the absence of such a protection is hindering the growth of technology companies in the European Union....

"The framework conditions for regulation, standardization and intellectual property right (IPR) regimes need to be adapted to new realities," said its proposal to the European Parliament and Council. "Standardization structures and processes must become more agile and reactive, and with a clearer distinction between missions requiring public intervention and those more related to market dynamics." It added: "The IPR system also needs to be improved by the creation of a Community patent for innovative ICT companies to protect their inventions in the single market."

However, HS Daily Wire links to a Register post that clarifies that Europe-wide patents do exist. They're just not controlled by the EU itself:

Patents covering much of Europe do exist, but they are operated by the European Patent Office (EPO), which is not a part of EU government. If the EPO gives a patent application its approval then it is granted only in the countries specified in the patent application, not automatically in all the countries signed up to its governing principles, the European Patent Convention.

For its part, the European Patent Office says the following about itself:

The European Patent Office (EPO) provides a uniform application procedure for individual inventors and companies seeking patent protection in up to 38 European countries. It is the executive arm of the European Patent Organisation and is supervised by the Administrative Council.

Its origins are traced to the European Patent Convention (EPC) signed in Munich, Germany in 1973, placing it outside of the scope of European Union governance.

Remember what I said on Monday?

There are people that truly believe that Big Brother really looms among us, and that multiple government agencies (or other entities) are secretly conspiring against us for evil purposes. Frankly, I don't believe it, because I've been around government people. The whole conspiracy idea depends upon the notion that people from agency A will conspire with people from agency B. That isn't going to happen, because they hate each other.

So this whole push for "European patent reform" may be nothing more than a power play of one super-governmental agency against another super-governmental agency.

You know a guy invented this - killing mosquitoes by laser

I read this, and immediately decided it was really cool. From HS Daily Wire:

In an effort to prevent the spread of malaria, scientists have built a laser that shoots and kills mosquitoes.

More information is contained in this Wall Street Journal article:

In a lab in this Seattle suburb [Bellevue], researchers in long white coats recently stood watching a small glass box of bugs. Every few seconds, a contraption 100 feet away shot a beam that hit the buzzing mosquitoes, one by one, with a spot of red light....

Nathan Myhrvold [is] a former Microsoft Corp. executive who now runs Intellectual Ventures LLC., a company that collects patents and funds inventions. His old boss, Mr. Gates, had asked him to explore new ways of combating malaria. At a brainstorming session in 2007, Dr. [Lowell] Wood, the Star Wars architect, suggested using lasers on mosquitoes.

Soon Dr. Wood, Dr. Kare and another Star Wars scientist teamed with an entomologist with a Ph.D in mosquito behavior and other experts. They killed their first mosquito with a hand-held laser in early 2008.

This is the advantage of knowing someone with a few billion dollars. I'm sure the Dr. Wood acted all serious in the meetings, talking about combating malaria and saving the world, but once he got away from the money people, he jumped up in joy and started talking about really kewl laser action!

Why politicians should be kept far away from AIG

I'll be the first to admit that AIG's compensation structure is apparently divorced from reality. A compensation structure is supposed to reward employees who contribute positively to a company's income, and if a division is responsible for unprecedented losses, it's impossible to see how ANYONE in the division should deserve compensation. If nothing else, it's hoped that AIG's compensation formula is exposed, and that AIG and other companies use this as an example of what NOT to do.

But the anger over AIG's bonuses is getting into dangerous territory. On the local news this morning, I saw the results of a poll in which over 40% of those surveyed said that the AIG employees should return their bonuses.

50% of those surveyed said that the AIG employees should return their bonuses, and people should lose their jobs.

When people respond in such a way, politicians follow. Some of my readers from the right side of the aisle are probably predicting that the House of Representatives and the White House, both of which are headed by closet Marxists Pelosi and Obama, are drooling over the chance to punish AIG, clear out the employees, and mount a government-run takeover. And sure enough, you have a politician making statements like this about AIG:

"The first thing that would make me feel a little bit better toward them (is) if they'd follow the Japanese example and come before the American people and take that deep bow and say, I'm sorry, and then either do one of two things: resign or go commit suicide."

Incidentally, that statement was not made by someone from the House of Representatives, the part of Congress that supposedly sways whichever way the people are blowing. That statement was made by a U.S. Senator, who is supposedly immune to such pressure.

Oh, and that statement was not made by a Democrat. As you may have heard, it was Republican Senator Charles Grassley of Iowa who made that helpful suggestion to AIG.

To his credit, Obama hasn't yet demanded that AIG executives resign en masse. But there's a possibility that both parties may force us to adopt the attitude "These people messed things up; can't we do better without them?"

We can't. Perhaps there's some idea that you can get a bunch of people off the street and mount a "Hey, kids, let's run a financial services company!" effort. (Airing on VH1 Thursdays, 9:00 Eastern.) Or perhaps Barney Frank and Charles Grassley dispatch their economic advisors up to AIG and run the show themselves.

Or, better yet, you lure people from other, profitable financial services firms - oh, wait - OK, so you lure people from other financial services firms.

And if you can't get enough that way, then you lure some of the AIG people back.

And how do you lure them back?

By promising a bonus.

Back to square one...

Looking at the bailout in marketing terms

The whole bailout issue has been considered in terms of dollars and cents (mostly dollars), and has also been considered in terms of politics.

But the bailout issue could also be considered in marketing terms, independent of the dollars and cents (mostly dollars) generated by bailout funds themselves, or the political ramifications.

Local Inland Empire, California real estate blog Housing Kaboom has understandably taken a negative view toward the Inland Empire real estate market. But it recently expanded its negative view by taking a look at other parts of the economy.

In the process, it printed a telling quote from this Los Angeles Times article:

"It was supposed to be a badge of honor if you were able to get this money, but now it's a badge of honor if you didn't take it, with all the bad publicity it has attracted," said Alan Rothenberg, chairman of 1st Century Bank in Century City.

Rothenberg's bank took a look at the Treasury program and decided to avoid it.

Another bank official was quoted:

"The TARP money is tainted and we don't want it," said Jason Korstange, a spokesman for Minnesota-based TCF Financial Corp., which received $361 million and announced this month that it wanted to pay it back. "The perception is that any bank that took this money is weak. Well, that isn't our case. We were asked to take this money."

The bank issued a toughly worded statement earlier this year, saying that the money had put the financially strong banking chain at a "competitive disadvantage" and that the bank now believed it was "in the best interest of shareholders" to return it.

Now I'll grant that there are additional factors at work, such as the increased public scrutiny of firms that accept the bailout money and then perform actions that anger taxpayers. But in some cases, the mere perception of taking bailout money has become more toxic than the "toxic" loans that the banks themselves may be holding.

Facebook censoring mentions of Twitter? I doubt it.

On Sunday, Louis Gray shared a post from Ari Herzog that referenced a tweet by Craig Thomler.

Thomler and Herzog suspected that Facebook was censoring mentions of Twitter. In fact, Herzog conducted a test in which he issued a series of status updates, most of which mentioned Twitter.

When he was done, none of the status updates that mentioned Twitter showed up, so Herzog wrote his post and called it "Proof That Facebook is Censoring You."

After I saw Louis Gray's share of the post, I decided to conduct my own experiment, which consisted of five status updates that I entered via my mobile phone. The first and fifth status updates did not mention any service whatsoever, while the second, third, and fourth mentioned FriendFeed, Google Reader, and Twitter respectively.

After the test was done, I saw that Facebook only reprinted selected status updates. Specifically, it only reprinted the first, fourth, and fifth status updates. Which meant that Facebook didn't "censor" mentions of Twitter, but did "censor" mentions of FriendFeed and Google Reader.

Or perhaps something else is going on. Here's what I said in the Louis Gray thread in FriendFeed:

I made five rapid-fire status updates in Facebook, only three of which have made it to FriendFeed as I type this. 1 of those 3 did mention Twitter. My guess is that Facebook just gets overwhelmed by frequent status updates, regardless of content, and loses the middle updates. More testing is needed.

I was performing my experiments on Sunday night, but if you look at the comments to Herzog's post, some people were performing the same experiment on Friday.

Jeff Anderson 03.13.09 at 10:22 PM Twitter: @maxofacto

Ari, FB regularly deletes my updates no matter the comment when made that close in succession - only the last one sticks. Tried it on my FB and it seems to be just fine. As do curse words…

In an update to the original post, Herzog acknowledges this, but goes on to say:

However, as Adriel refers below, there were other people over the course of several hours who witnessed Facebook censoring the word “Twitter” in updates.

Yet Ari's post is still entitled "Proof That Facebook is Censoring You," and still reproduces the rapid-fire experiment that has been shown to have another explanation.

So let's see what Adriel said, again on March 13:

Tonight Facebook revealed its true colors, aping Twitter in its design, then censoring mentions of the competitor in status updates. Damn you, Facebook.

Update: For several hours today, the word Twitter was censored in Facebook’s new stream, or at least delayed.

I guess the question remains - does it pass the sense test?

It may help if I state my major theory on government, and then we can proceed from there. There are people that truly believe that Big Brother really looms among us, and that multiple government agencies (or other entities) are secretly conspiring against us for evil purposes. Frankly, I don't believe it, because I've been around government people. The whole conspiracy idea depends upon the notion that people from agency A will conspire with people from agency B. That isn't going to happen, because they hate each other. For example, anyone who thinks that the Marines and the Army will gang up to enslave us should spend a few hours listening to Marines talk about the Army, or people from the Army talking about the Marines. They HATE each other. In fact, I once knew two people from the same agency who were on a committee together, and those two people couldn't stop sniping at each other.

So to suggest that Facebook's marketing people commanded Facebook's technical people to modify the service to censor mentions of Twitter is, in my view, absurd. Imagine the scenario (I'll place myself in the role of the marketer):

JOHN: Hey, Jane!

JANE: Yes?

JOHN: I have orders from Mark and need you to make a change.

JANE: (rolls eyes) What is it this time?

JOHN: Jane, if any of our users mention Twitter, I'd like for the service to...um...just lose the message or something. Or delay it.

JANE: And why would you want me to do that?

JOHN: Well, we can't be promoting Twitter here, can we?

JANE: John, let me tell you something. My compensation is not based on how well I implement your silly little marketing ideas. My compensation is based upon uptime, which means that I need to minimize service calls and negative press. So if you think I'm going to jeopardize my paycheck and sabotage the system just to enable your silly little marketing idea, then you got another think coming! Oh, and by the way, that stupid report you wanted ASAP yesterday? It's...lost. Now get out of here!

Sorry, but Facebook censoring mentions of Twitter doesn't pass the sense test. Perhaps something like that could happen at a very small company, but by the time you grow to Facebook size, you're going to have competing factions that negate each other.

The perils of sponsorship - will the Samsungs have the last laugh over the AIGs?

I am an occasional follower of football (soccer) in England, and I find it amusing when someone raises the occasional complaint that English football is not English enough. While the complaint is usually aired when a non-English manager comes to town (most of the leading managers in English football are not English), you can also, if you wish, complain about foreign players on English football teams, and foreign owners of English football teams.

But I rarely, if ever, hear complaints about foreign sponsorships of English football teams.

It seems like a wonderful idea at the time, and not just in England. There are many large city governments in my own country that dream of the riches that will accrue to them if they grant naming rights to their city facilities, or let some company be the exclusive sponsor of something or another. My late grandmother would be horrified if she knew that some schools were signing exclusive deals with soft drink manufacturers - the schools get money or some other compensation, while the soft drink company keeps the competition out of the school.

English football practices sponsorship to the extreme. American football and baseball teams may have a swoosh here or there, but you can tell that the team is the Redskins or the Dodgers or whoever. NASCAR certainly believes in sponsorship, but you can often detect that Jeff Gordon or Dale Earnhardt Jr. or whoever is somewhere beneath all the ads. But if you take a look at a Chelsea or Liverpool or Manchester United jersey, there's no way for the casual fan to know that they're watching Chelsea or Liverpool or Manchester United. Instead, you see the Samsungs, in the case of Chelsea, or the Carlsbergs, in the case of Liverpool.

Or, in the case of Manchester United, AIG.

Now perhaps you've heard of AIG recently, and not in the sports pages. This article ran today:

Key lawmakers are calling for the government to crack down on American International Group after learning the bailed-out insurance giant is going ahead with plans to pay $165 million dollars in bonuses to its executives.

Though AIG Chairman Edward Liddy claims his hands are contractually tied, Rep. Barney Frank, D-Mass., said Monday he's not convinced.

(An aside: while I clearly believe that companies have the right to pay bonuses, I'd love to see the bonus calculator that determined that AIG executives were eligible for bonuses. I confess that I haven't examined AIG's financials, but if AIG met its financial goals last year, then I'm an Olympian.)

And you know you're company's in trouble when the Chairman of the Federal Reserve, in a rare interview, says that he's angry about your firm:

Bernanke's optimism didn't take away from his anger over AIG's spending of $165 million in bonuses.

He told CBS' "60 Minutes" Sunday that out of all the events in the last 18 months, the federal government's intervention with AIG makes him the angriest, saying the company made "unconscionable bets."

The ironic part is that while AIG is the poster child for financial failure, Manchester United is the poster child for football success. Last season Manchester United won the Premier League, Champions League, Club World Cup, and probably some other awards here and there, and they are performing well again this year.

But the problems of Manchester United's principal sponsor aren't confined to its American home:

The Serious Fraud Office (SFO) announced...that it has launched a "preliminary inquiry" into the UK operations of AIG Financial Products, which is owned by America's American International Group (AIG).

And Manchester United itself is affected:

AIG announced that it would not renew its sponsorship deal with Manchester United Football Club when the contract runs out in 2010.

Ironically, if Manchester United wanted to be associated with a good brand, the best sponsor for Manchester United would be...Manchester United.

But no...there's money to be made.

Are you thirsty, or are you hungry?

One morning on the radio, I heard a commercial expressing the plight of the California farmer.

Before continuing, I should explain something to those of you who do not live in the southwestern United States. You might think that our economy is shaped by oil and petroleum products, but in reality there's a liquid that's even more valuable to us southwesterners - water. Water has influenced the development of the southwestern United States for over a century, and will continue to influence it far into the future.

For example, California is a huge agricultural producer. However, you need water to grow crops, and that can be an issue - especially when California is heading toward drought conditions like it is now. If you want to hear heart-warming stories about the plight of the California farmer, go to farmwater.org. Example:

California family farms and rural communities depend on a reliable supply of agricultural water. Without water, farms cannot survive, small businesses that provide material and services to farms are hurt and communities suffer. Many of the farms and communities in the San Joaquin Valley rely on water from the Central Valley Project.

The implied message here is that we don't have enough water, and that water for the farms may run out.

Actually, that's only partially correct. In reality, the issue is that water for the farms may not be available at the current price.

Ah, the current price. Or, as the Environmental Working Group puts it:

At a time when California water is scarce and expensive, taxpayers guarantee Central Valley farms a cheap and abundant supply worth up to $416 million a year.

But isn't that water needed for farming? Umm...:

In a state where water has become an increasingly scarce commodity, a growing number of farmers are betting they can make more money selling their water supplies to thirsty cities and farms to the south than by growing crops....

"It just makes dollars and sense right now," said Bruce Rolen, a third-generation farmer in Northern California's lush Sacramento Valley. "There's more economic advantage to fallowing than raising a crop."

So farmers get water on the cheap, then resell it at a profit. Needless to say, the Environmental Working Group isn't pleased.

Some environmental groups say...[t]he problem should be fixed by retooling a decades-old formula that gives farmers a break on their contracted water, even in times of scarcity, they say.

"Essentially these farmers are getting water for a subsidized price and selling it to taxpayers at an elevated rate," said Renee Sharp, senior analyst with the Environmental Working Group, an Oakland-based nonprofit that tracks farm subsidies. "On the other hand, the more often water agencies are scrambling to buy water, the more they get interested in some creative solutions, like conservation."

But on the other hand, Californians depend upon food, and any move to remove the subsidies for California farmers would more than likely result in a grocery price increase for Californians, as well as reduced demand from Californians and others throughout the world which could exacerbate employment issues in the Central Valley.

But on the other hand, if this reduces the illegal immigrant population in California as jobless workers return to their home countries, then there will be a reduced demand for public services, which could save Californians tax money.

As you can see, it's a complex issue.

Ignoring the environmental and homeland security issues for the moment, it pretty much boils down to a simple question: is it more important to quench your thirst by providing cheap water, or is it more important to satisfy your hunger by providing cheap food? Even in the magical land of California, you can't do both.

Empoprise-BI temporarily focuses on self-referentialism

The Empoprises-BI blog has often taken a look at various businesses. But now I'm going to take a look at the Empoprises business itself - or, more accurately, the person behind Empoprises.

As some Empoprise-BI readers may know, the whole "Empoprises" series of blogs is a relatively new phenomenon for me. In fact, before the creating the Empoprises blogs under my own name, I have blogged for several years under the pseudonym "Ontario Emperor." I have continued this practice while also blogging as John Bredehoft, which sometimes results in some split personality situations.

For example, on Friday morning I was reading my Google Reader feeds for my Ontario Emperor account (I have parallel Google, FriendFeed, Twitter, StumbleUpon, and other accounts for both personas.) While reading as Ontario Emperor, I found a story that would be ideal for the Empoprises-MU blog. When I shared the story on Google Reader and FriendFeed, I subsequently made the comment:

Since this is a music issue, I'm discussing it more on my Empoprises account http://friendfeed.com/empoprises

Enter Shey Smith, a blogger and FriendFeed user who hails from Ontario. No, not the real Ontario in California; the older one in Canada. So anyways, Shey asked a reasonable question:

Why 2 accounts?

Ever since Friday, I've been thinking about that question.

The answer to the question goes back several decades, but let me start around 1990 or so, when I started BBS'ing. I initially logged on to boards as John Bredehoft, but several BBS people suggested that I come up with a BBS handle. Since many BBS'ers came from the CB radio ranks, the whole idea of having handles was natural to them. (I still think of the BBS people by their BBS names - Bloose, Starfish, etc.) So, since I was renting a house at the time, and I was part of a particular cultural background, I came up with the handle "Wasp the Houseboy."

As the years passed, I eventually replaced that handle with the handle "Theo Tres Thr3," which was based upon "Theatres Three," a pseudonym I had invented in my college days. Finally, around 1998, I settled upon the pseudonym "Ontario Emperor" for my online dealings. I even posted a biography that began as follows:

The Inland Empire needs an emperor. The "Inland Emperors" are a band signed to a Seattle label. Hence, I am the Ontario Emperor. This is my virtual domain.

I kept that pseudonym as I moved around on Tripod, Yahoo, mp3.com, and other services of the time, and by the time I began blogging on October 14, 2003, the handle was fairly well established. Over the years, through several blogs and through a number of other services, the pseudonym became fairly well known. For example, at one point "ontarioemperor" was the 250th most followed person on FriendFeed.

But the popularity of my pseudonym created its own issues, which still exist today. There have been many situations (Oracle OpenWorld, LinkedIn, etc.) where I have had to introduce myself with the words, "My name is John Bredehoft, but you probably know me as Ontario Emperor." To tell the truth, that was one of the reasons that I created the Empoprises project in the first place - if Ontario Emperor can get all of this credit for social media whatevers, why not let John Bredehoft get some of that credit also?

Yet despite this new Empoprises project, I have still continued to maintain "Ontario Emperor" as my primary online identity. A couple of examples will suffice to demonstrate this:

• The oemperor Twitter account has, as I write this, 8853 updates. Empoprises currently has 471.


• The ontarioemperor FriendFeed account has liked 17068 items and commented on 11101. Meanwhile, empoprises has liked 87 items and commented on 157.

And the differences in volume continue through my other parallel accounts.

Now part of this is due to the different focuses of the two personas. Empoprises focuses on four topics - business, the Inland Empire, music, and NTN Buzztime. Ontario Emperor focuses on just about anything, and in fact used to focus on the other four topics also until I carved them out and let Empoprises focus on them.

But then again, it gets a little muddy when you look at the details. The lastfmfeeds FriendFeed music room is under the ontarioemperor name. And there are other issues.

But a lot of it boils down to the fact that my primary interface with the online world is under the "Ontario Emperor" name.

Well, until Saturday afternoon. I made one of those snap decisions and decided to change the precedence of the two personas, and formally make Empoprises (and thus John Bredehoft) my primary persona.

I'm not quite sure what this means yet. It probably means that some of the stuff that "Ontario Emperor" would do will now be done by Empoprises. It could mean a sharp decrease in "Ontario Emperor" activity. And it may also mean that I will spend less time looking at things like technology (unless there is a business focus), politics, and religion.

Less time, but not "no time." I already have an Ontario Emperor post scheduled for the mrontemp blog in a couple of days. And even if I wanted to "kill" Ontario Emperor, I wouldn't delete the accounts - my personal belief that deletion of a popular account only gives a spammer an excuse to move in, and I don't want the Ontario Emperor name to be used to sell envelope stuffing or whatever.

Anyway, this was a long post, but I figured that it needed to be said, and we'll see what happens from here. It will probably surprise all of us.

A little too desperate for customers?

I forget where I read it, but someone once said that very good advertising is so good that you don't perceive it as "advertising" at all. That's because the ads expertly respond to your particular needs at any given time. We obviously have not reached that level of perfection yet.

Despite the changes in the publishing industry, there are still a lot of magazines that are still around, and they're still trying to get subscribers. A few days ago I received a subscription request from Defense Daily. Why? Because in my day job I work with biometric systems...and some marketer somewhere decided that if I'm interested in biometric systems, I may also be interested in defense. So they spent money on postage (albeit at a reduced bulk rate) and printing to send me a subscription request to subscribe to Defense Daily.

Yes, that's Defense Daily, as in Daily. 245 issues a year of "unparalleled coverage of the people and programs driving the defense industry." Sounds somewhat interesting, although I'd only be interested in a very small portion of what Defense Daily has to offer. So I guess you could say I'd be a casual reader at best. Which is good, because I couldn't afford to pay the full rate for this magazine, and my company probably wouldn't authorize it either.

Luckily, I qualify for the Professional Courtesy Rate, which includes a $200 discount on an annual subscription. Yes, my subscription rate is reduced $200 - from $2297 to $2097.

Ouch.

Now obviously a solicitation doesn't always have a high rate of return, but it needs to be high enough to justify the costs of the solitication. But when you are trying to market a $2097 product to casual readers, isn't it difficult to get enough subscribers to justify the cost of the solitication?

But then again, if they're grossing $2097 off of a single subscriber, they don't need that many subscribers to make the solicitation pay off.

Although they do have the costs of the "Free Defense Daily 1GB USB Drive with your paid subscription." But presumably the $2097 will cover that too.

Now if you're a Beltway bandit who's highly interested in this publication and you didn't get the mailing, just go here to subscribe online.

Postscript

Upon further research, I discovered that Defense Daily is a bargain. 14sandwiches reports that Mobile Industry Review is switching to a different model:

On the 27th of March, we’re turning subscription-only here at Mobile Industry Review (”MIR”).

One company has bought our entire output exclusively, on-going. We are, in effect, becoming a private research company.

Our new client is unwilling to subsidise our existing audience of readers (300-400k last month) so the content that we’ll be creating — reports, video interviews and day-to-day industry news and analysis — will become proprietary from 27th of March. After this date, the public version of MIR will no longer be updated.

The nature of our agreement allows for corporate subscriptions to our content at £12,000 per annum, plus applicable taxes.

But Mobile Industry Review has a deal for you:

I’m able to offer the first 10 subscriptions at half price until the end of the month.

So from 2000 dollars to 12000 pounds - what will I run across next?

This reminds me of a fake news story that I read years and years ago (it may have been in the Like a Rolling Stone parody of Rolling Stone) which claimed that the Eagles were going to have a retail price of US$5 million for their next LP. According to the story, when asked how many people would buy the album at such an outrageous price, one of the Eagles supposedly said, "We only need one."

My take on the Stewart-Cramer discussion

I had a chance to watch the unedited Jon Stewart interview of Jim Cramer, and I personally believe that both of them acquitted themselves well. While people are concentrating on the points that Stewart made, to his credit Cramer did mount a defense and did explain his position.

On the other hand, Boing Boing disagrees:

Cramer was especially upset about being included in a segment TDS produced on the horrible and almost criminal reporting CNBC has been airing as THE go-to business network after CNBC's Rick Santelli attacked average working-class people who got caught up in the sub-prime mortgage crisis. Santelli dubbed them as "losers." Well, the only loser tonight was Cramer and CNBC.

Jim basically sat there, starry-eyed like a lost puppy, and was virtually silent throughout the three-segment show featuring him. He basically waved the white flag and said, "You got me."

But judge for yourself.

Part One

Part Two

Part Three

Sometimes you look for a job, and sometimes you look for a job

To my mind, I would have thought that looking for a job is pretty much the same regardless of the economy.

BusinessWeek begs to differ:

Looking for a job is tough when there isn’t a recession. When searching for a job in a recession, you need to take special care in how you present yourself to potential employers.

So BusinessWeek has created a business exchange devoted to "recession job search."

One of the most popular items that's been shared there is Lindsay Olson's "5 things you should never put on your resume." And there are many other items at Recession Job Search. Check it out.

Customer service done right

We hear so many horror stories about customer service done wrong that it's good to feature the other side of the issue every once in a while.

As I write this post, General Motors is an automotive company that is based in the United States. (I recognize that this reality may have changed by the time that you read this.) One of the services that they provide is the OnStar service, which (among other things) supports communications in emergency situations, including Automatic Crash Response that initiates even when you can't initiate it yourself. And there are a number of OnStar radio ads that tout this service.

In most of the ads, you hear an actual OnStar user reporting some type of emergency to the operator, followed by the operator contacting a local 911 dispatcher to the scene of the accident. In most cases, the OnStar operator then asks, "Would you like me to stay on the line?"

So anyways, I just heard another OnStar commercial in which the car occupant was scared. Really, really scared. It doesn't sound like the occupant was injured, but the occupant was so scared that you couldn't really tell.

In this case, the OnStar operator deviated from script and said, "I'll stay on the line with you."

Good call, in a manner of speaking.

P.S. I am forced to admit, however, that OnStar selects the calls that they share in their radio commercials. John Warner has, um, discovered several calls that the advertising agency chose not to broadcast.

OnStar: Hello, OnStar.

Customer: My ice cream, it’s locked in the car, and it’s melting.

OnStar: Your ice cream is melting?

Customer: Yes, please hurry! It’s like 200 degrees in there!

OnStar: What kind of ice cream is it, ma’am?

Customer: Rocky road!

The rest of this transcript, as well as several other transcripts, can be found here.

We need more letters in the alphabet - here's why

On my drive to work one morning, I passed a truck with the words "OMG Roofing Products" on it. If you go to the company's website, you can see that "OMG" is a registered trademark, and you can learn about OMG.

This company is not to be confused with the OM Group, which has the NYSE ticker symbol OMG.

Nor is it to be confused with the Object Management Group, which uses "OMG" as a non-registered trademark.

Meanwhile, there are a number of people such as myself who are snickering at the abbreviation used by all of these organizations. You see, in online chat and related uses, "OMG" stands for "Oh My Gosh." Or something like that.

In fact, Acronym Finder documents 23 meanings for the acronym OMG. In addition to "Object Management Group" and some variants on the one I listed (and implied) above, here are a few others:

Omega (gaming)
Old Magazines (pulp and paper industry)
Oh Em Gee (clothing business)
Outlaw Motorcycle Gang
Operational Maneuver Group

Now I happen to be a LOA (lover of acronyms), but even I am forced to admit that acronyms can lead to confusion when used outside of context. What happens if I decide to order some roofing fasteners, and a bunch of bikers show up at my door instead?

Now if we had more than 26 letters in the English alphabet, perhaps we could avoid these collisions. But I suspect we'd need a LOT more letters.

So my advice to you? SIO (spell it out).

Words aren't only cool, they make you money

OK, so maybe you're not Red Hat and you have to figure out how to make money. Part of your strategy might lie in the words you use.

A few years ago, you could attract venture capital funds by talking about service oriented architectures. Those days may have ended:

The fact of the matter is that SOA is now middle-aged when you consider the maturation of the SOA hype cycle, and at this point most of the better smaller players have either figured out how to become profitable -- thus don't need VC -- or have been purchased....The VC guys have a tendency to spend in areas they collectively consider "emerging"...and thus I'm sure many VC pitches talking about "SOA," "agility," and "reuse" just are not getting the play these days. Moreover, many existing VC-backed SOA companies may find that the money they need just won't be there....

So where is the money going?

[T]here has a been a lot of blogging out there around the shift to cloud computing by the VC, and how everyone who has something resembling software is making a play for the clouds, no matter if they have a legitimate offering or not. Indeed, I'm getting inundated with requests for briefings around "new cloud computing" offerings, typically from companies selling on-premise software just looking to become more relevant.

Well, why don't the SOA companies tell their marketing folks to just re-brand their products as cloud computing solutions? There's a good reason:

Personally, I'm seeing a lot of product management and product marketing people out on the street now, laid off from venture-based SOA startups.

Perhaps I have a personal bias here, but maybe if you kept the marketers on staff, you may continue to be relevant in the future.

A novel take on the "How's my driving?" bumper sticker

Companies with fleets of cars and trucks have often monitored the behavior of their drivers by allowing other commuters to report on the driving of their employees. Usually, there will be a bumper sticker or other signage on the truck, saying something like this:

How's my driving?
Call 1-877-555-5555
Vehicle # TR02

These have become common enough that they are now parodied, with people putting bumper stickers on their trucks that say something like "If you don't like my driving, you can kindly convey your concerns elsewhere." Or something like that.

This morning, I saw a novel take on the idea.

Is my driving bugging you?

Which company has vehicles with that statement? Lloyd Pest Control.

When you can turn one of these notices into an advertising message, you're one step ahead.

The Standard

If one thinks of the large companies that have existed throughout history, Standard Oil is bound to end up on one's list.

The website us-highways.com includes a section devoted to Standard Oil and its successor companies. If the name doesn't ring a...bell, here's a little information:

John D. Rockefeller's Standard Oil Trust is one of the most famous industrial organizations ever. The Trust controlled a lion's share of the production, transport, refining, and marketing of petroleum products in the United States and many other countries. Originally, this Trust was an attempt to cash in on the lucrative home lighting market which was converting from whale oil to kerosene. The emergence of the automobile and its thirst for the formerly near worthless refining by-product called gasoline brought dizzying wealth to this industrial group. The 1911 decision to break up the Trust had the result of making the seperate pieces more valubale than the whole was, and stock prices rose sharply.

In some respects, the breakup of Standard Oil parallels the subsequent breakup of AT&T ("Ma Bell"):

Both developed ubiquitous brand names: Bell for telephone service, Standard for oil. Like the "Baby Bells", many of the "Baby Standards" kept the old company identity as they went into business for themselves.

Back to Standard Oil. The website traces the "Baby Standards" throughout history, up to the present day. It turns out that many of the Baby Standards (like many of the Baby Bells) have gone through a period of consolidation, resulting in three major players: BP (including Arco), Chevron, and ExxonMobil.

More here.

In the business of making money

While looking at Red Hat, InfoWorld's Savio Rodrigues made an interesting discovery:

Over the past two years, 48 percent of Red Hat's income before taxes has come from "Other Income," specifically interest income and capital gains on investments. For comparison, "Other Income" drives well under 10 percent of Microsoft's, Oracle's, and IBM's income before taxes.

For example, when Red Hat reported its third quarter results in December 2008, it included the following figures:

Three months ended November 30, 2008: income from operations $20,970,000; other income (net) $13,795,000

Three months ended November 30, 2007: income from operations $19,453,000; other income (net) $14,440,000

Nine months ended November 30, 2008: income from operations $62,284,000; other income (net) $38,593,000

Nine months ended November 30, 2007: income from operations $52,201,000; other income (net) $42,048,000

Perhaps the high non-operating activity may be tangentially related to Red Hat's subscription model, or perhaps not. If I find out more, I'll share it.

Other TVs

On a recent visit to fastcompany.com, I was peeking at the advertisements and saw an ad for NEC Online TV.

NEC Online TV presents the NEC group vision, innovation and global case stories in video. Please enjoy the experience.

Certainly a competing business model to the one-sponsor, many-stories fastcompany.tv concept, and NEC certainly isn't unique in doing this. While some companies may prefer to put their content on other platforms, such as YouTube, there will be companies that prefer to set up their own channel.

Increase your revenue by widening your views?

Everyone is convinced that everyone is against them. Those of the left are convinced that Fox News is working against them, while those of the right are convinced that...oh, just about everybody is against them.

For example, take Matt Munson's comments on the Los Angeles Times' non-coverage of a large rally:

It is unfortunate that the Los Angeles Times forsake the John and Ken Taxpayer Revolt in the city of Fullerton on March 7th. Although the newspaper and the talk show hosts have not had cordial relations, having over 15 thousand supporters gather together to show the people of California that the movement for fiscal responsibility has momentum.

But then, implicitly citing the paper's financial troubles, Munson made the following statement:

This newspaper cannot survive with left leaning readers alone.

While one can debate whether or not the Times wants right-leaning readers, there are media groups such as the Daily Kos that truly target the left, just as there are those that target the right. Would the Daily Kos get more readers if Newt Gingrich wrote a column for them? Or would they end up with fewer readers as people searched for a media service that was more in line with their views?

I suspect that this can be answered on a case-by-case basis, just as it can with any business. Do you expand your product line, or contract it to "focus on the basics"?

Or perhaps I am outrageous - an opposing view on disclosure and pay per post

Yesterday I posted an item entitled "Payola, pay per post, or the 1984 commercial? An inconsistency of moral outrage re product placement business practices." Toward the end of the post, I stated:

AS LONG AS THERE IS DISCLOSURE, there is no difference between a pay-per-post item in a blog, a sponsored song on a website, a freebie at a trade show, a special report in a news program, or any other variant of a "product placement" business model.

However, I recognize that my view is a minority view, and I wanted to explore the other side. Unfortunately, I missed the first few years of the conversation, so at this point much of the online conversion about pay per post is along the lines of "Pay per post is bad. I believe it. It's good enough for me."

You'll recall that I cited Stowe Boyd's post on a pay per post poll - the post is entitled "Poll: Pay For Post Concept Is Radioactive." I've been conversing with him in the comments, and specifically asked him:

What do you see as the difference between pay per post and tradeshow sponsorships? Is it a difference of expectation (i.e. people expect trade show giveaways to be sponsored, but expect blog posts to be non-sponsored)?

Boyd was gracious enough to provide a lengthy reply. I encourage you to read his entire reply, but here's a piece of it:

There is a well-known and understood relationship between vendors sponsoring tradeshows. No attendees are confused by an IBM logo on a tradeshow bag. They don't interpret that logo as the tradeshow's endorsement of IBM's products and services.

However, the model of blogging has been quite different. In general, blog posts are written based on the interests of the blogger and buzzworthiness of the topics. There has been a convenient cultural firebreak between the blogger's agenda and the payola of vendors. And because of that historical firebreak there is an expectation by readers that the opinions offered by bloggers have not been influenced by payola.

So, it causes confusion in the community to start accepting money to fill the 'news hole' with sponsored posts. And I maintain that it does so even when bloggers state explicitly that they are being paid.

Again, this is just part of his reply; the entire reply is here.

I'll probably explore this issue in the future, and I certainly welcome your comments, from any position, on this topic.

P.S. For another perspective on this, here's part of what TechCrunch had to say back in February about a disclosed pay per post practice being used by Google in Japan:

[T]he Japanese blogosphere...is filled with reports about Google hiring Cyberbuzz, a Tokyo-based Internet marketing company to promote the keyword feature (its widget version) with a pay-per-post campaign. And in fact, the search string “Google Hot Keywords Ranking+Blog Widget+CyberBuzz” in Japanese in Google’s own Blog Search leads to a few dozen results, indicating the reports aren’t made up of thin air....All postings end with a disclosure that says: “I am taking part in the Cyberbuzz campaign”.

It’s interesting to see that Google, a company that not too long ago radically took action against PayPerPost bloggers in the US, today thinks the concept is suitable as long as it helps them advance in Japan (even though in Japan, pay-per-post isn’t regarded nearly as obnoxious as in the US).

Dating an MBA

The website ABC for MBAs includes a list of 15 Ways to Know You're Dating an MBA. Here are the first two:

1. Calls the first month of your relationship a "preliminary assessment period.".
2. Talks to the waiter about process flows when dinner arrives late.

Read the rest here.

Payola, pay per post, or the 1984 commercial? An inconsistency of moral outrage re product placement business practices

When we choose the words that we use to describe something, we know very well that the words we choose often affect how we look at the item being described.

Let's take the word "payola," used to describe a 1950s practice in which radio stations would be paid to play particular songs.

Writing in the Inquisitr, Steven Hodson noted that payola has returned, albeit with a different name.

[L]et’s fast forward to today and find that once again payola is once again rearing its ugly head, This time though it isn’t the record companies behind what is being termed as pay-for-play but rather web companies suggesting that this is the ideal outlet for up and coming artists.

Hodson specifically cites the example of Jango and its Artist Airplay service.

Earlier this week, Jango introduced a new program called Artist Airplay that offers a very straightforward proposition: the more you pay, the more you’ll get played on Jango’s Web radio stations.

But then Hodson notes that we're not just talking about radio here:

[O]ne should point out that this is no different than the pay-for-post idea that has been plaguing the tech blogosphere and prompted more than bitchmeme. Just as with the blogosphere this kind of buying of content is wrong....

More here.

And Hodson isn't the only one who is negative about the practice. Stowe Boyd talked about a poll launched by Sarah Evans.

POLL What do U think about concept of 3rd party charging a pay per post soc media structure 4 a biz? http://twtpoll.com/7ttg24 #payperpost

Notice that the term "pay per post" is used in the poll (and, for what it's worth, in the accompanying hashtag that one sees before taking the poll).

By the time Boyd collected the results, 57% of those surveyed chose the response "Yuck. I don't like this concept at all."

I haven't voted yet, but if I'm still able to, I'm going to choose one of the alternate options: "It's not a problem as long as there is full disclosure." However, at least as of the time that Boyd checked the results, this was not a popular choice, with only 13% of the votes.

The way that I see it (and as I've mentioned, under my superhero name, in comments to both the Hodson and Boyd posts), this type of product placement activity is rampant not only in the two industries mentioned, but in other industries.

• If you go down to the Sunset Strip, the band that you see might be in the club because they paid for the privilege of being there.


• If you then leave the club and go home to watch TV, you may notice that your favorite sitcom character is drinking a popular soft drink. Perhaps the soft drink company paid for the privilege.


• Then there are the more obvious examples that, for some reason, don't cause moral outrage. Perhaps you leave the Sunset Strip and to to Vegas, the Silicon Valley, or Austin for your favorite trade show. When you arrive, you get a handy carrying bag with the logo of a company emblazoned on it.


• Later that evening, you go to a party associated with the trade show, and people give you food and drink and you don't have to pay for it! Wonder how they did that?


• After an exhausting night of eating and drinking stuff that you didn't pay for, you go back to your hotel room. Realizing the moral issues involved in watching certain sitcoms, you decide to watch the local news instead, and are treated to a fine, high-quality special report from the station that just might mention a product or two.


• Thoroughly disgusted with the sleaziness of the world, you walk out the next morning and buy a newspaper. (For my younger readers, I should explain that "newspapers," which still exist in some places, were items that were printed on paper that somewhat approximated what you get with Google News.) You pay 25 cents for the paper, even though that 25 cents doesn't cover all of the costs of the paper. Then, as you read through the paper, you see all these non-news items talking about clothing sales at department stores. Why did the newspaper print junk like that?

I think you get the drift of how I feel about this. AS LONG AS THERE IS DISCLOSURE, there is no difference between a pay-per-post item in a blog, a sponsored song on a website, a freebie at a trade show, a special report in a news program, or any other variant of a "product placement" business model.

Now we can attach words to it, but if we're going to criticize "payola" or "pay per post" in one model, then we'd better be equally willing to criticize the television networks for all of the advertisements that they ran during the Super Bowl - including that evil and morally reprehensible advertisement with the woman smashing the big blue screen that ran during the 1984 Super Bowl.

Danged Apple Computer, trying to foist its views on us during a football game...

Where you've been may help you get where you're going

Perhaps some of you have heard of the new service Likaholix, which is now in private beta. My verdict so far - a good service which is of special interest for those who like to like, which includes capabilities not found in general purpose "liking" applications such as FriendFeed. But I want to see how it scales.

So anyways, I first heard about Likaholix from one of the principals. In the communication, the principal took great care to note one thing - the principal was an ex-Google employee.

Why would someone do this? A person would only mention a former employer if the mention would benefit the person's current endeavor. In this case, the fact that the principal was an ex-Google employee had the desired effect, and made me interested in learning more about Likaholix.

Needless to say, such a strategy won't work with every former employer, for several reasons:

• Perhaps the target hasn't heard of your company. For example, I've worked for mostly small companies, and most people haven't heard of any of them, while a few people may have heard of one or the other of them. If I'm contacting a biometrics person, it probably isn't beneficial to mention the licensed novelty company where I used to work.


• Perhaps the target doesn't care about your company. Let's say that Barry Williams decides to start a B2B software service firm, and he introduces himself to people by saying, "Hi, I used to play Greg on the Brady Bunch." In many cases, this is not sufficient for a business to open the door, since it does not address the business' current concern.


• Perhaps the target has heard of your company, does care about it, and hates it. Perhaps this is not the best time for a Merrill Lynch wannabe to approach the firm and say, "Hi, I used to work for Enron." Or for a swimmer to approach the Olympic team and say, "Hi, I used to be a lobbyist for NORML."

So, before you mention your ex-employer to the target of a sales pitch, make sure the target knows the ex-employer, respects the ex-employer, and...um...likes the ex-employer. (So to speak.)

A gaming chair?

XRocker Pedestal, wireless sound, it can "bring games, movies and music to life."

$149.00 at the Wal Mart in Chino, California.

Marketing Challenges - The Broadstone Foothills and Real Estate-ese

Man, I thought I was so smart when I noted that the reports about the Broadcrest Foothill Apartments were using the wrong name for the complex. I suspected that the development was actually called the Broadstone Foothill Apartments, and I was eventually proven right when a big-time journalistic newspaper thing used that particular phrase to identify the complex.

Long-time readers, I'm cueing Jim Bakker here. Yes, I was wrong.

It turns out that the official name for the complex is the Broadstone Foothills (plural, no "apartments"), which is what is listed on the complex's website at the http://www.broadstonefoothills.com/ URL.

I've lived in the area for over a quarter century, so I have some familiarity with the neighborhood. I remember Benjie's, the place where I used to drink cold brown thingies with BBS friends. I remember that there used to be two strip clubs in the area...and that there is still one strip club in the area today.

Strangely enough, that particular feature isn't mentioned on the Broadstone Foothills website. I've already quoted text from another place; here's the story from the equine mouth.

A remarkable new apartment community set in an idyllic location, situated between the quaint towns of Claremont, Upland, and Montclair, in western San Bernadino (sic) County, and only a half mile east of LA County!

Technically there is only one lie in the paragraph above, since there is no county called "San Bernadino" in California. (It's "San Bernardino"; think "St. Bernard" and you'll get it right.)

Now this type of flowery language isn't restricted to apartment communities who evict the kids of murder victims. This writing style, also known as advertising, is practiced throughout real estate-dom. Take this description of a New York apartment complex that caters to post-grads and is known as "Dormandie":

It is..., at least in official real estate-ese, a luxury property, though the bright teal apartment doors in the halls and maroon Fleur de Lys carpeting don't exactly evoke the Four Seasons.

Now I should note that I consider a difference between flowery writing (which is, after all, putting your best foot forward) and outright lying. And you can lie with pictures as well as with words:

My department leader and I encountered a bait-and-switch method...when we went looking at a house he was thinking of buying. The house was pictured in a magazine but, when we drove to the address given, we noticed some glaring differences. While the house itself looked the same, the land around it did not. The real estate agent had obviously paid someone to edit the photo to remove the cattle fencing around the property and remove the huge, slopping hill in the front yard.

Joel Nash presents his view in a post that he wrote. He notes (point 2) that there's a difference between disclosing a problem such as a leaky faucet, and bringing attention to it in your real estate ad. He also notes (point 9) that you should not oversell your property.

Then again, overselling is in the eye of the beholder.

I am going to try an experiment right now. I am going to find a random ad for a home for sale in East St. Louis, Illinois and reprint it here.

5450 State St East St Louis, IL 62203

Located By New School, Close To Downtown, New Library, Walgreens Drugstore And Other Office Buildings. Has All Utilities Available.

I like it. It states the positives, and definitely doesn't oversell.

But if you run across an ad that's a little more flowery, Joshua Dorkin tells you how to translate it. Here are a few examples:

Old charmer - an old and ugly house
Stunning house - the house is not ugly
Tudor - two bedrooms are in the attic which is not insulated; very hot in summer and very cold in winter

Read the rest here.

The Mexican economy in 2008 and early 2009

So how is Mexico doing from an economic perspective?

For months, Mexican officials boasted their country was shielded from the worst ravages of the global economic crisis. Although President Felipe Calderon periodically rails against "doomsayers," reality is beginning to slap Mexico City in the face. Daily media reports detail the extent and depth of the economic problems descending on the nation.

According to the National Institute of Statistics, Geography, and Informatics, Mexico shed 750,000 jobs in 2008 alone, bringing the always officially low unemployment rate to its highest level since 2005....

The daily La Jornada reports $50 billion in foreign capital fled the country last year, and for the first time in recent years Mexican treasury bonds are losing their investment attractiveness. Mexico's banking sector has so far not exhibited the fatal weaknesses afflicting counterparts in the United States and Europe, but plenty of warning signs abound. According to Mexico's Banking and Securities Commission, the value of bad credit card debt shot up from $1.3 billion in November 2007 to more than $3 billion in November 2008.

But there is a lot of activity in one sector of the economy:

Although long operating in the shadows of Mexican society, the narco underworld is becoming more and more public. In big cities and small towns, messages against rivals that amount to political propaganda are draped from overpasses. An imprisoned old-school capo, Miguel Felix Gallardo, has his own website complete with Elvis-like photos. Allegedly, recent street demonstrations against the Mexican Army in a broad geographic swath of the country were financed by the narco.

Mexico's legions of struggling farmers, countless army deserters, and idle youth provide constant fodder for a narco-economy packed with hundreds of thousands of small-scale producers, processors, transporters, street dealers, look-outs, and hitmen. Jobs remain plentiful in the narco-economy, but the average life span of its workers is getting shorter and shorter.

More here.

Cheap (for me)

$1.939 at BP, 5816 Washington (at Levering), Elkridge, MD.

Whither FastCompany.TV post-Scoble, Rocky, and Seagate?

Michael Arrington, who has returned from his sabbatical, reported at TechCrunch that Robert Scoble is leaving FastCompany.tv. Arrington wrote:

Part of the reason behind his departure: His long time sponsor, Seagate, hasn’t renewed their $1 millionish/year contract, he says.

This news comes about one month after Scoble reported on FriendFeed that Rocky Barbanica had been laid off.

As of this morning, the FastCompany.tv web site still includes an undated declaration from Robert Scoble about the then-new venture.

Doing this work isn't cheap - you've gotta take the cameras on location around the world, not to mention hire great production talent like Rocky Barbanica, who helps arrange interviews, runs cameras, and edits the videos, and Seagate has dedicated a large amount of resources to this effort, which we greatly appreciate.

After the TechCrunch story was published, Scoble wrote a post of his own, in which he thanked two people at FastCompany (Bob Safian and David Lidsky), Rocky Barbanica, and Seagate.

But one thing has, to my knowledge, not yet been explicitly addressed. If your managing director leaves, and your producer leaves, and your sponsor reportedly has not renewed...what happens to FastCompany.tv?

I have sent an email to Robert Safian at Fast Company asking him that very question about the future plans for FastCompany.tv. No guarantee that he'll respond - it's not like I'm a Steven Hodson or anything like that - but if I do hear something, either directly from Safian or otherwise, I'll share it in the blog. (Because I'm flying across the country today, and because my 8-bit rotary phone doesn't have full editing capabilities, any update today will of necessity be short.)

Why regular iPhones are really, really cheap

If there's been one complaint about Apple's iPhone, it's been the cost. Even after the cost came down, people complained that the purchase price, coupled with the service commitment, was just too steep.

I am going to argue that Apple's iPhones are really, really cheap.

Relatively.

CNET:

[T]he undoubtedly enterprising Austrian jewelry designer Peter Aloisson [makes] gadgets that might remind lesser beings of trinkets from the artist formerly known as Saddam Hussein.

The latest of Mr. Aloisson's creations is a $2.5 million iPhone. May I quote some of the forbiddingly florid language from Mr. Aloisson's alluring Web site: "Made of solid 18-carat yellow gold, white gold, and rose gold. A fabulous combination. The white gold line is encrusted with a total of 138 brilliant cut diamonds of the best quality."

But wait, this touching work of art has a unique feature. No, it does not polish your shoes while you talk on the phone. And no, it doesn't have a built-in vibrator to massage your ear. It does, however, have a "home button" that carries a rare 6.6-carat diamond.

More here, or go to Peter Aloisson's web site here.

Sorry, honey (1979 technology issues)

I've joined Facebook and connected with a lot of high school and college friends, and find that I'm doing a lot of reminiscing. Because of this, I thought I'd go back to my senior year in high school and see what was happening in the business world on March 5, 1979.

Luckily for me, TIME Magazine published an issue on that day, and an article addressed a pressing technological issue - namely, the newfangled Personal Business Exchanges (PBXs) and Computerized Business Exchanges (CBXs) that were beginning to appear.

Sometimes they didn't work due to computer problems (yes, you could have a computer in your telephone!), and sometimes they didn't work due to operator error:

Even when operating smoothly, the phones' increased capabilities can create headaches. One Manhattan office worker who had called his wife at home later tried to get through to a secretary in his office. Accidentally pressing the code that redials the previously called outside number, he was again connected with his wife. Not realizing whom he was talking to, he called her by the secretary's name. Before he became aware of the situation, his wife recognized his voice. A rather strained round of apologies and explanations followed.

One unusual feature of the new systems is that businesses would...get ready for this...buy them:

Because customers buy the systems outright rather than leasing them, simple functions like moving phones and changing numbers can be performed easily by company employees at minimal cost.

But the PBX market was still dominated by Ma Bell. The AT&T breakup hadn't happened yet.

More on the Quiznos offer fallout

Last Friday, Lutheran Lucciola posted Quiznos "Free Sub" Giveaway: SCAM! The post began as follows:

Yes, the folks at Quiznos have pulled a fast one. With an advertisement for a giant free sub giveaway, where one can fill a form, give an email, and then download a coupon made out to your name only, it sounds good, right? Well, apparently it's a scam. I drove around to three different Bay Area locations over two days, and not one place would honor the coupon.

Lutheran Lucciola linked to a Main Street post on the issue, which arose all over the country.

There appears to be some miscommunication between the Quiznos marketing department responsible for the campaign and the franchise owners manning the registers and interacting with customers.

When an individual store manager’s policy differs from the official Quiznos advertising line, questions arise as to whether the entire promotion was a traffic-driving ploy. An every man for himself approach to fast food giveaways probably doesn’t translate to a positive image from your customers.

But the Quiznos rep who responded to Main Street was positive:

“The response to the Quiznos Millions Subs Giveaway has been nothing short of overwhelming. That’s great, right? Right... but given that we have had over a million consumers respond in only three days, there are a handful of people who have reported some problem redeeming their free sandwich. If you’re one of them, please let us know right away by emailing millionsubs@quiznos.com. We’re working hard to address every issue very quickly....And, if you weren’t quite fast enough the first time around, there’s still a chance to win a free-subs-for-a-year gift card through our Hometown Heroes promotion throughout the month of March.”

Or, as Walletpop put it:

Essentially, in addition to seizing this moment to send out an ad for a sweepstakes Quiznos wants you to tell on the managers that won't play ball. And yet locations are apparently permitted to opt out.

What does the Quiznos website (or, more specifically, the millionsubs.com website) say?



But why would someone trust a Quiznos promotion in the future?

P.S. Apparently there are no Quiznos in my newly-adopted community of Lakeaway, Texas 78734.

For some, cable and satellite have become irrelevant

On Monday, I wrote about the difficulties that I had in figuring out what AT&T's U-Verse is.

But what about the people who figure out what U-Verse is, and then decide that they don't need it?

In another blog, I have written extensively about the issues surrounding cable and satellite pricing - basically, a whole mishmash of issues that emanate from both the cable/satellite services and the content providers. See my 11/28/2007, 1/12/2008 [1] [2] [3], and 8/5/2008 posts on the topic.

Most importantly, look at my 11/1/2008 post, which detailed how one could dump cable/satellite altogether. At the time, I wondered if this would cause the cable/satellite companies to react:

Is it possible that a move away from cable and satellite to online viewing will cause the cable and satellite companies to offer a la carte pricing?

Well, the cable/satellite companies took action, but it was slightly different. Baratunde Thurston in a follow-up:

Since Ken [of the New York Times] interviewed me, Boxee had to remove the Hulu service from it’s software. Boxee has acted as my primary cable TV replacement, allowing me to sit on my couch and use an apple remote to watch video, much like… television!

It seems like many cable companies pressured Hulu into blocking boxee, hoping to force us back to their monopolistic teet.

But Baratunde isn't going back, and made this telling comment:

A business model built on exclusive access can only last so long.

Read the rest here.

Denver International Airport

Shopping in Concourse B.

Wanna buy a plane?

OK, this is another of those scheduled pre-written posts that are just like all the other scheduled pre-written posts that appear in my blogs.

In this case, I'm purposely scheduling this post for the 3rd because I anticipate that I'll be at an airport at the time you read this. (Yeah, I'll be at an airport at 5:00. Yay.)

It's no secret that companies are trying to divest themselves of divisions and workers, but they're also trying to divest themselves of capital equipment:

Going cheap, one Boeing 747-400, 20 years old, offers over $10 million, seats not included.

Air New Zealand grounded the jumbo jet in November as the airline slashed capacity on its long-haul international network by 15 per cent to cope with falling demand.

So they want to sell it, but it may not sell quickly:

[C]hief financial officer Rob McDonald said the prospects for selling the 747 sitting at Auckland airport "aren't huge" in a market where it joined 1000 other aircraft, expected by some to reach 3000 by the end of the year, already parked around the world.

Did the Jack Box campaign not have a payoff?

I've already noted that from a consumer aspect, the month-long "Jack got hit by a bus" Jack in the Box campaign didn't seem satisfying.

Sign On San Diego noted that it may not have been satisfying from a financial aspect either.

Several advertising professionals wonder whether Jack in the Box will get a return on its investment in the campaign. Shel Horowitz, who runs FrugalMarketing.com, estimated that if half of the people following Jack's woes on Twitter became new customers, each would have to buy 850 burgers to cover the cost of the campaign.

“I don't see it paying off,” Horowitz said.

And Dan Curran of NGAGE stated that the campaign had all of the surface veneer of a social media campaign, but none of the substance. (As a competitor once said, "Where the beef?")

Curran, who has conducted online campaigns for Hanes underwear and Scottrade, said Jack in the Box and other companies are rushing into social media campaigns to appear hip by throwing money at buzzwords.

“Pushing content at consumers from a Web site or using social media is still utilizing a 50-year-old business model,” he said. “It's Web 1.0, not Web 2.0.”

More here.

Jack Box awakes from coma - a long campaign with a poor payoff

You may recall that Jack Box of Jack in the Box got hit by a bus. I've mentioned it previously.

Well, a new YouTube video was released earlier today.



After watching this and some of the other things that have appeared, it seems that the creative point of the campaign (not to be confused with the marketing message of the campaign, the ability to get anything at any time of day) was to establish Phil as the anti-Jack.

Sometimes anti-characters can work. Sit 'n Sleep's Irwin ("you're killing me Larry!") worked so well that Sit 'n Sleep responded to customer demand had to bring him back for its advertisements.

But Phil was just too bland. Smoothie sandwiches? Yawn.

It appears that Jack Box likes yes-men on his executive staff.

Get me the information I want, not the information you want

I signed up for Facebook last Thursday, and as a result I am learning all sorts of things about people I haven't seen in decades, as well as people who work in the same building with me.

One of my co-workers just had AT&T U-verse installed, and being the curious type, I wanted to see what AT&T U-verse was. So I went to the AT&T U-verse site, and this is what I saw:



So before I can find out anything about AT&T's service, they want to find out something about me. Presumably their argument is that only certain services are available in certain areas, but why do I have to fork over information before you'll even start to sell me anything?

Then I read the screen more carefully, and they provided an example zip code. I have no idea where zip code 78734 is, but I entered it anyway.

Then, and only then, could I see a button "What is AT&T U-verse?"



At this point, my only choices are to view one, two, or three demos. Apparently the question "What is AT&T U-verse?" is too difficult to easily answer.

Unless you Google it. And, at least as of today, when I skipped over the AT&T sites (which don't to be all that informative) and the Wikipedia sites, I ended up at the blog post AT&T U-verse Doomed?. And, while the post was written in Febuary 2007, it does detail problems at the time, such as problems with Microsoft set-top boxes (disclosure: I work for Motorola, who offers a competing product).

Moral of the story - because AT&T made it difficult to get information about their service, I ended up looking elsewhere, and getting information that AT&T probably would not want me to get.

P.S. AT&T Wireless is no better.

P.P.S. It looks like my newly adopted 78734 community (Lakeaway, TX) is a nice one.


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When the economy is snowed in

It's now March 2 (even though my watch says it's February 30; gotta reset it!), and I'm avidly following weather reports from the East Coast of the United States, since I'll be flying there tomorrow. But as I write this, schools are closing and airline flights are being cancelled.

A snowstorm can have adverse effects on the economy, unless you sell snowplows or road salt. I haven't found economic damage estimates from this storm, but I did find some from a storm in Britain in early February.

On February 2, beginning estimates on economic damage were beginning to roll in:

London business leaders said the estimated cost to the British capital alone could be as much as 48 million pounds ($69 million) in lost productivity. The country’s Federation of Small Businesses estimated that continuing bad weather on Tuesday could cost the British economy more than one billion pounds.

By February 4, as ill effects continued, one estimate was revised upwards:

With further heavy snow forecast, the Federation of Small Businesses estimated that the economy could lose £3.5 billion in productivity by the end of the week.

Then again, if no one is buying, one could argue that a temporary shutdown in production is a good thing. However, our entire economy is predicated on growth, and if we begin to assume a lack of growth, the implications could be shattering.

Remember the small business

There's been so much emphasis on the news on big business that some people forget that there are a lot of small businesses out there too.

But there's a blog called Small Business Labs that didn't forget. In fact, at the end of last year, the blog posted its 2009 Top 10 Small Business Trends. Number one:

1. The Recession Drives Small Business Innovation

The basic claim is that small businesses will be forced to "re-evaluate, re-design and refine." And if they do it right, that's a good thing.

2. Government Plays an Increasing Role in the Economy

My initial reaction to this point was, Duh. My second reaction was, But will the impact reach to small businesses? The blog is certain that it will: "Small businesses will need to be aware of federal, state and local government policy and program changes and their impacts."

Read the other eight points here.