Archive for September, 2006
Apple has enjoyed so much success recently that it’s easy to forget that was not always the case. Ten years ago, working at one of Apple’s PR agencies, we considered it a major victory if an article did not apply the epithet ‘ailing’ to the company. Back then, Gil Amelio (who famously compared the Apple brand to Maglite) was CEO and Apple’s computers looked like everyone else’s.
This week’s BusinessWeek features a profile of Apple’s senior vice president for industrial design, Jonathan Ive, calling him the “man behind Apple’s design magic.” Ive actually joined the company in 1992, but wasn’t really allowed to strut his stuff until after The Return of Jobs in 1997. According to BusinessWeek, Jobs scoured the industry looking for a superstar industrial designer until he realized that he already had one within the company. That was the start of a beautiful partnership that has produced such design icons as the iMac, the titanium Powerbook and, of course, iPod.
Says BusinessWeek: “While Jobs sets the direction and provides the inspiration, Ive melds Apple’s unique creativity with the nuts-and-bolts required to make beautiful things. Apple’s innovation success is due greatly to this alchemy between chief designer and powerful boss.”
Steve Jobs deserves every ounce of credit he has received for turning around Apple’s fortunes through bold, uncompromising vision. Jonathan Ive prefers, as BusinessWeek puts it, to be “Apple’s Man Behind the Curtain.” Nevertheless, credit is due, and I for one would like to thank him for my iPod and the beautiful machine I am currently typing on.
Patricia Dunn, the executive in charge of Hewlett-Packard’s dubious investigation into board leaks, resigned Friday from the board with immediate effect. From a public relations perspective, this was the right thing to do – two weeks ago.
Had Dunn fallen on her sword sooner, HP might have been able to preempt some of the public flogging it is now receiving, not to mention the current speculation that CEO Mark Hurd was somehow involved in the scandal. Instead, the company chose the half-measure of Dunn stepping down as chairman of the board at the end of her term. Whether by design or lack of information, it also was not particularly proactive in its communications, but rather tended to react to news as it came out – which only served to fuel speculation.
The company needed to be seen to have moved swiftly, plus it needed to distance the CEO – crucial to its continued turnaround – from the scandal. Whether or not Dunn was aware of the highly questionable tactics employed, she was responsible for the investigation and therefore, in my opinion, should have taken the rap. It might not be fair, but that’s the responsibility that comes with a leadership position.
According to a new report by Dow Jones VentureOne, investment in Web 2.0 start-ups is set to double last year’s levels. $263m was invested in the first half of 2006, compared to $199m in 2005. Matt Marshall of VentureBeat analyzes the figures and puts them into context here.
Here are some of the nuggets:
- Web 2.0 investment, while growing fast, is still a small proportion of overall VC funding: a total of $13 billion was invested in 1,213 U.S. venture-backed companies in the first half of this year
- Web 2.0 deal sizes are also smaller than the average: $4.4 million, compared to $7.5 million for venture financing overall. According to Matt, this partly explains the increasing popularity, since “it takes smaller amounts of money to experiment.”
- Web 2.0 financing is still mostly early stage – 65% of deals were seed or first round this year, down slightly from 75% last year
- More than half the companies receiving investments in 2006 were generating revenue, and three were profitable
- The three most active investors are Accel Partners, General Catalyst Partners and Draper Fisher Jurvetson
- Facebook received the biggest investment so far this year, with $25m in second round financing
Let’s hope that these investments were in Wired’s list of the best Web 2.0 companies, not the ones that plumb “the depths of suckitude.” Among the winners: Flickr, Odeo, Writely, del.icio.us and NetVibes. Topping the list of losers was Web 2.0 posterchild MySpace. You can also check out Wired readers’ pick of the “champs” and “stinkers” here. Interestingly, MySpace, YouTube and del.icio.us made it into both categories.
Microsoft today announced beta availability of its video-sharing service, Soapbox – described by Good Morning Silicon Valley as “exactly what you’d expect from a Microsoft service — late to market, imitative and uninspired.” Of course, that’s not necessarily going to stop it from being successful. There is also a whole host of other wannabe YouTubes, including Google, Yahoo!, MySpace, Revver and VideoEgg.
Earlier this week, Mark Cuban predicted “the coming dramatic decline of YouTube.” Seeing real parallels with Napster, Mark thinks that YouTube is going to get clobbered by copyright owners any day now. As Matt Marshall of VentureBeat put it: “If you read the comments on Cuban’s blog, you will see that outright confusion prevails about YouTube’s prospects.”
Sure, YouTube has first-mover-advantage and brand recognition, but we only have to look at what happened to NetScape to know that’s not enough. With its Warner Music deal, YouTube is heading in the right direction – although details of how it will actually work are scarce. Other content owners such as Universal Music Group have yet to decide whether to sue YouTube or join it.
Why is this market suddenly so hot? According to Matt Marshall, “it is where movies, music and advertising meet — and billions are at stake.” Nobody knows which way the wind will blow for YouTube, but everyone’s going to be watching.
QUICK UPDATE: YouTube has just announced a promotion with Good Morning America and Cingular to find the best unsigned bands. TechCrunch described the move as “stylistically antiquated” and a step toward the gentrification of YouTube. Is YouTube losing its hipster edge already?
That was the question asked by Don Bates of Media Distribution Services in a contributed article to the Bulldog Reporter. And he’s not wrong.
He posits the following reasons:
- The writers don’t have anything newsworthy to write about. Either the story isn’t there to begin with or—and this is more likely—they haven’t figured out what the story is. But since they have to write something in order to justify their fees, they plow ahead with promotional puff, which may not please the press but always pleases the client. Instead of waiting until they have a newsworthy story to tell, they fall back on good old “spin.”
- The writers don’t know how to write for the press. If they did, why would they send soapsuds instead of substance? Why wouldn’t they give the media what they want: real story not made-up stuff, simple language not jargon, short copy not long, substantive not gratuitous quotes, journalistic not idiosyncratic style, and so forth? What’s to fear in meeting your target audience’s needs?
- The writers are often told what and how to write by bosses who themselves don’t know how to write good news releases. As a result, the writers are caught between a rock and a hard place. Rather than risk their jobs fighting for what they know would be better, they do what they’re told and hope for the best.
I’d like to add a few of my own:
- The culture of hyperbole is so ingrained that it is just expected. Often, the person who approves the press release is not a PR person and feels that only overblown claims and marketing cliches can do their product/offering/service justice. And they see everyone else doing it – so it must be right! As an agency PR person, I was constantly pushing back on clients who insisted on inserting words such as “leading,” “unique,” and “pioneering” into press releases.
- These days, the press release is written for every audience other than journalists. Companies post press releases on their web sites and issue them on the wire as a way to demonstrate corporate momentum to customers, partners and investors.
I have long said that the press release is dead as a way to communicate with reporters. The scattergun approach to PR has not been effective for a long time. In a similar vein, a former colleague recently described the press release as the “obituary of a story” – ie by the time you issue the press release, you’ve already briefed reporters, and their stories will probably appear at the same time the release crosses the wire.
Is there a solution? Or will the press release just wither away? Companies need to issue some form of approved communication when they make an announcement, so I don’t suppose the press release will disappear any time soon. It may, however, evolve. Todd Defren of Shift Communications is proposing a new format: the social media press release, which presents information in accessible chunks and includes RSS feeds, links to del.icio.us and tags. Of course, a different format won’t automatically make PR writing good, but maybe, just maybe, it might establish a new style of writing that relies less on hyperbole and more on facts.
News Corp. COO Peter Chernin made some bold statements yesterday at the Merrill Lynch Media & Entertainment Conference about MySpace‘s future plans. According to MultiChannel News, Chernin asserted that 60-70% of YouTube traffic comes from MySpace and hinted strongly that his company was going to do something about that: “Given that most of their [YouTube] traffic comes from us, if we build adequate, if not superior, competitors, I think we ought to be able to match them, if not exceed them.”
TechCrunch’s Marshall Kirkpatrick came out fighting: “the COO of News Corp. says that Web 2.0 is leaching traffic off of MySpace, that they can build their own services to compete with any of it and that there’s going to be an increasingly aggresive commercial push on the site. That sounds both dangerously arrogant and like a real validation of fears that MySpace dependency is too risky for outside developers.”
Marshall raised the issue of MySpace’s openness – or lack of it. While competitor Facebook has opened its APIs to developers, MySpace is going in the opposite direction and blocking external links in widgets.
Chernin’s comments sparked fears that News Corp.’s attempts at commercializing MySpace will alienate users and destroy the essence of what it paid $580m for. They may also have heartened the many competitors out there – Facebook for one – who would just love to get their hands on MySpace’s 80m users. One TechCrunch reader suggested that Facebook should start “a ‘we’re widget-friendly’ campaign” immediately. Not a bad idea.
We can all debate whether MySpace’s actions are in keeping with the spirit of Web 2.0. From what I know of Rupert Murdoch, I imagine he doesn’t care two hoots about that as long he wins. The real question will be whether MySpace’s users care.
At its TechEd event today, SAP made a big point of inviting bloggers to its press and analyst conference. The bloggers were all from companies in SAP’s developer network and included Robert Scoble, now at Podtech. Sources tell me the bloggers in the pack stuck to softball questions – such as what the SAP developer of the future would look like – and left the tougher questions to the journalists.
So should SAP be applauded for embracing bloggers in this way? In this case, I think not. The bloggers in question were all part of SAP’s ecosystem and therefore not impartial. Surrounding yourself with a sympathetic audience might seem attractive, but you’ll end up isolated from reality. Love them or hate them, journalists perform an important role in asking the hard questions that force companies to substantiate claims and confront the facts.
I’m not saying that SAP shouldn’t embrace its blogging partners, but don’t confuse them with the media. I can’t imagine that the journalists in the audience were happy with the situation. And I reiterate my point from an earlier posting: “citizen journalism is no substitute for the traditional media with professional writers, editors and codes of conduct.”