Weekly Digest Issue No. 550
LinkedIn, Facebook make ad moves | Foursquare popularity rockets in 2010
Google posts solid figures, announces hiring spree
As financial results continued to trickle in, it was the turn this week of internet giant Google to announce its fourth quarter figures. And a healthy set of figures they were: net income rose 29 percent to USD2.54 billion, or USD7.81 a share, from USD1.97 billion, or USD6.13, a year earlier. Profit excluding some items was USD8.75 a share, exceeding the USD8.08 average analyst estimate. Meanwhile, revenue jumped 26 percent to USD8.44 billion from USD6.67 billion in the fourth quarter in 2009.
Eric Schmidt said the results "marked a terrific end to a stellar year" for Google. His comments were among the last he made as CEO of the search firm, with Google announcing that co-founder Larry Page would step into Schmidt's shoes as CEO, while Schmidt becomes executive chairman.
As well as the management shuffle, Google also announced plans to hire as many as 6,200 new staff -- product managers and engineers -- in 2011. While the company didn't say where all these new jobs would be based, in a keynote speech at Germany's DLD conference last Tuesday, Schmidt said Google would be recruiting 1,000 staff in Europe during the year.
Yahoo doubles profit, posts weak outlook
On the flip side of the coin, Google's one-time main rival Yahoo this week confirmed it would be cutting 1 percent of its global workforce. The news followed better-than-expected fourth quarter results from the search firm. Yahoo posted revenue of USD1.2 billion, down 4 percent from the USD1.26 billion reported in the year-ago quarter. However, profit for the quarter more than doubled to USD312 million, or USD0.24 a share, from USD153.million, or USD0.11 per share, and ahead of the USD0.22 a share expected by market analysts.
"We just completed a very encouraging quarter and year for Yahoo, where we saw our plans to turn round the company gain momentum," said Carol Bartz, chief executive. Despite what Bartz called an encouraging quarter for Yahoo, the firm worried investors with a weak outlook for the upcoming quarter. Yahoo expects revenue for the first quarter to be in the range of USD1,020 million to USD1,080 million, below analysts' estimates of USD1,130 million.
LinkedIn, Facebook make ad moves
There were some interesting advertising moves by two social media heavyweights this week. First up, business networking site LinkedIn revealed plans to give advertisers more ways to deliver targeted ads. The site, which has over 90 million members, has updated its marketing tools to allow advertisers target people based on job titles, company name or LinkedIn Group.
According to LinkedIn, customers that have launched campaigns with these new targeting options report click-through rates three to four times higher than those for other campaigns. The networking site also said it plans to release an application programming interface (API) to allow large-scale advertising agencies to easily connect to the site.
On the social networking side, Facebook this week revealed 'sponsored stories', which essentially turns some user posts into ads. Through the initiative advertisers will be able to buy and re-publish Facebook messages that users voluntarily post about brands, such as a check-in at a local coffee shop or a 'Like' clicked about a product on a shopping site. The sponsored stories are exact copies of the likes, comments and location check-ins that users already post to their own walls, and already show up in their friends' home page news feeds. The key difference is that sponsored posts will get posted again on the top right-hand column of the home page next to other ads. The user's name and photo will appear in the ad.
Privacy groups have reacted angrily to 'sponsored stories', particularly given that there is no way for users to opt out of the service. In a marketing video to launch the initiative, Facebook stressed that only your friends will see ads based on your posts.
Foursquare popularity rockets in 2010
Elsewhere, another social media player announced this week that it is making great strides. During 2010, location-based network Foursquare said the number of 'check-ins', people logging their locations, grew by an incredible 3,400 percent to over 381 million. Foursquare said people have checked in from every country in the world. According to figures released by CEO Dennis Crowley at Le Web conference in December, every day Foursquare records 2 million check-ins.
At the same conference, Crowley said users are increasing by 25,000 per day. In its stats released this week, Foursquare said its registered user base has hit 6 million, growing by 1 million over the past month and a half.
Separately, at MIDEM 2011 in Cannes, France last Saturday, Foursquare co-founder Naveen Selvadurai said the company is now valued at USD250 million, a significant rise on the USD95 million valuation last June after it received funding of USD20 million. Selvadurai said the site may look for additional investment this year, according to a report in Information Week.
Though Foursquare has shown phenomenal growth, it faces increasing competition from big guns Facebook and Twitter with their location-based services, as well as other players like Gowalla. However, judging by its latest figures, it looks like Foursquare is up for the fight.
Apple hits app milestone, market set for growth
Apple passed quite the milestone this week. The iPhone maker announced that over 10 billion apps have been downloaded from its App Store in the past two and a half years, with over 7 billion being downloaded in the past year alone. The 10 billionth app was a free game app called Paper Glider, downloaded by Gail Davis of Orpington, Kent, in the UK, who will receive a USD10,000 iTunes gift card from Apple.
The App Store's rapid growth reflects a general market trend; according to Gartner figures released on Thursday, global mobile app store downloads will reach 17.7 billion in 2011, a 117 percent increase from an estimated 8.2 billion in 2010. Looking ahead to 2014, Gartner forecasts over 185 billion applications will have been downloaded from mobile app stores.
Separately this week, reports circulated about potential new features for the iPhone 5 and iPad 2. A Bloomberg report, which quotes Richard Doherty, director of the consulting firm Envisioneering Group, said the upcoming devices could be equipped with near-field communications technology, enabling consumers to use them as electronic wallets. Near-field communications facilitates short-range wireless data transmissions for a range of activities, including mobile payments. Doherty cites engineers who he said are working on the hardware for the Apple project. Apple hasn't commented on the reports.