AOL CEO Tim Armstrong (right) speaks with Fortune's David Kirkpatrick at the Brainstorm: Tech conference on Thursday.
(Credit: Ina Fried/CNET)PASADENA, Calif.--The Tim Armstrong road show continued on Thursday, with the AOL chief executive dropping by the Fortune Brainstorm: Tech conference.
Armstrong made many of the same arguments he has been making--namely that the Internet is still in its infancy and that AOL represents one of the biggest opportunities and challenges in the Internet arena.
The former Google executive laid out the areas where AOL plans to focus--display advertising, content, messaging and local services, including the once-leading one--MapQuest. In that last area Armstrong acknowledged that the company has fallen behind.
"We probably missed a generation of technology which we are working on right now," he said.
Armstrong said that the company doesn't have to dominate these areas to be successful, but it does need to be one of the leaders. In addition to existing areas, Armstrong said there are significant "white spaces" on the Internet where AOL can build a business.
However, Armstrong was short on specifics on how the company will improve its existing businesses or which new areas it will tackle.
The company is looking at buying some businesses and selling others of its units. However, Armstrong said it isn't the same list of acquisition targets or divestitures that the company was planning when he arrived.
Armstrong said that some of the units that the company planned to get rid of are actually some of the areas he says have become key to its new strategy. He also said that on his first day there was a "$400 million check" that the company wanted him to sign; Armstrong said he didn't make that purchase.
The audience was asked to vote whether AOL would slowly run out of juice, stay profitable but not a leader, or return to health as a major Internet player. Nearly half of respondents chose "run out of juice" before Armstrong's talk and only about 30 percent said so after the panel wrapped up.
"So you are a good presenter," said moderator and Fortune writer David Kirkpatrick.
Update at 9:08 a.m. PDT, with a statement from Phorm.
Amazon.com has reportedly blocked the use of the controversial behavioral-advertising system Phorm on its British site, according to a BBC report.
The move comes as the European Commission takes action against the United Kingdom, alleging that the country failed to adequately comply with data protection laws in Europe.
In the case involving the United Kingdom, the Commission initiated action after complaints arose over Phorm trials British Telecom launched in 2006 and 2007, in which it allowed Phorm's behaviorial-tracking technology onto its network without users' consent, according to a ZDNet UK report.
Amazon was not immediately available for comment Wednesday morning.
Phorm, however, said in a statement
There is a process in place to allow publishers to contact Phorm and opt out of the system, but we do not comment on individual cases.
Phorm's technology is designed to allow its customers to observe a user's behavior while online, such as Web sites visited or keywords entered, and then serve up relevant advertisements based on that behavior. The controversy over Phorm's technology revolves largely around privacy issues.
In the case of Amazon.co.uk, the BBC reported that the online e-commerce giant issued a statement that it had contacted British Telecom's Webwise, which markets the Phorm platform, and requested that all of its domains be opted-out of the program. According to the BBC report, Phorm noted that it has policies that allow customers to opt out of its system.
And that is what The Open Rights Group is hoping a number of major Web site publishers will do. Last month, the organization called upon Google, Yahoo, Microsoft, eBay, and Amazon to opt out of the Phorm system, according to the BBC report.
And from that group, Amazon marks the first company to give an indication that it is taking such action, the BBC noted.
Updated at 11:36 a.m. PST with information on Google's share price performance and an analyst note.
Yahoo shares rose in morning trading on Monday on reports that the company is in preliminary talks for an advertising partnership with Microsoft.
Yahoo's stock was up as much as 7.6 percent to $14.49 in early-morning trading, a level it hasn't seen since early October. Yahoo's gains also went against the tide of the broader markets, which were down in morning trading.
The bump in Yahoo's share price follows reports on Friday that the Internet search pioneer has had discussions with Microsoft recently about such a deal.
Microsoft CEO Steve Ballmer reportedly remains focused on a search-advertising deal with Yahoo, but one that only goes so far and falls short of his .
Nonetheless, investors apparently were pleased at the notion that the two companies are at least sitting down and speaking with each other about a search-advertising deal or partnership.
The reported talks come at a time when Microsoft and Yahoo are seeking ways to narrow the gap with Google, which has a substantial lead over its competitors.
Google's slice of the U.S. paid search-advertising market is expected to perform on par or better than Wall Street expects, when it reports its first-quarter results on Thursday, according to a research report released on Monday by an Oppenheimer analyst.
In his report, Jason Helfstein notes:
We believe the Street expects U.S. paid clicks to decline; however, third-party data suggests first-quarter U.S. paid clicks increased 10 percent year over year, and coupled with recent cost initiatives, should result in upside to our and Street estimates.
Helfstein noted that he expects Google to report a 5 percent year-over-year decline in first-quarter paid-click revenues while third-party data indicates a 10 percent increase in year-over-year paid click revenues.
Shares of Google rose a modest 1.8 percent to $379.10 a share on Monday, while the broader markets remained under pressure.
Internet advertising revenues reached a record $23 billion last year, rising modestly during the fourth quarter as the economy headed further south, according to an Interactive Advertising Bureau report released Monday.
During the fourth quarter, Internet advertising rose a modest 2.6 percent to $6.1 billion during the three-month period, according to the bureau.
"Though some categories in the fourth quarter slowed or even dipped, reflecting the current economic challenges, the overall performance is up, confirming interactive's ever-growing importance to the successful marketing mix," David Silverman, a partner with PricewaterhouseCoopers, said in a statement. PricewatershouseCoopers conducted the study on behalf of the IAB.
(Credit:
Interactive Advertising Bureau)
Last year, Internet advertising revenues rose 10.6 percent to $23 billion over the previous year, according to the report.
Retail, financial services, computing, and automotive were the largest industries to capture the attention of online advertisers.
Search advertising continued to drive growth, with a 19.8 percent increase last year over the previous year. And while digital video accounted for only a $734 million slice of the entire Interactive advertising pie, it posted steep growth--more than doubling.
Google is seeking to turn its TV advertising program into a one-stop shop.
The Internet search giant is currently testing Google TV Ads Online, an interface designed to enable advertisers to purchase ads through its nearly one-year-old Google TV Ads program, its YouTube site, and, eventually, Internet sites running video, according to a report in The Wall Street Journal.
A limited group of advertisers is currently testing the service, which could debut in the months to come, the Journal noted.
Google's move to develop a one-stop system for TV and video advertising comes at a time when consumers are increasingly using the Internet to view television shows and full-feature films. Where consumers go, advertisers tend to follow.
Last May, Google turned the switch on for its TV ad program, which is designed to enable advertisers to bid on TV ads, and pay for those ads when they are actually clicked on and delivered. In September, five months after its official debut of Google TV Ads, the company announced partnerships with Bloomberg TV, as well as NBC Universal, to supply television advertising over its system.
Microsoft CEO Steve Ballmer once again publicly declared his interest in a Yahoo search deal, during a keynote speech at the 2009 Media Summit in New York.
And as with his past declarations of interest, Yahoo's stock responded. Yahoo climbed 4.84 percent to $14.07 a share in early morning trading.
Ballmer, according to a post in AllThingsD, had this to say about Yahoo and new CEO Carol Bartz:
I'm sure when it's appropriate, we'll have a chance to sit down and talk.
...Whether a deal gets done or not, who knows.
...There are a lot of things that are fairly compelling economically in trying to put our two search efforts together in a partnership.
AllThingsD points out as well that Bartz is also in New York this week.
With the economy taking a toll on even social-networking sites, eMarketer reduced its global forecast for advertising in the sector this year to $2.3 billion, according to a report in The Wall Street Journal.
Social networks, on a worldwide basis, are expected to post advertising growth of 17 percent this year, compared with eMarketer's earlier projections of a 32 percent growth rate, the Journal noted.
The revised forecast follows a cut eMarketer made in December, when it reduced its U.S. projections for social-network advertising spending in 2009 to $1.3 billion.
That 2009 revision translated into a U.S. growth rate of 10.2 percent for social networks, compared with its earlier forecast of a 53 percent growth rate.
In some regards, the revised global forecast comes as no surprise, given that the United States accounts for a little more than half of the total advertising spending on social networks worldwide.
Greystripe announced Wednesday it raised $5.5 million in a third round of venture capital funding as it seeks to gain traction for its ad-supported mobile game advertising network.
Incubic Venture capital led the round, which included additional existing investors Monitor Ventures and Walt Disney Co.-backed Steamboat Ventures.
Greystripe has raised a total of $15.6 million to date, last raising a second round of $8.9 million in May 2007 and a $1.2 million first round in October 2006. The company declined to discuss whether its latest round was at a higher or lower valuation.
The start-up has developed technology designed to allow advertising agencies to click on a mobile option to extend their existing online advertising campaigns beyond computer screens or TV. Greystripe aims to take flash advertisement and extend it beyond its online format to a mobile format. Flash advertisements have predominantly appeared online, rather than on mobile devices.
Michael Chang, Greystripe chief executive, said in a statement:
For too long the mobile advertising world has built a silo approach to their business.
Those days are over. It's time to join the online advertising world and bring new value in terms of reach, targeting and interactivity.
Among the smartphones that Greystripe works with, it delivers rich media flash ads on Apple's iPhone.
A collection of nearly two dozen online publishers plan to offer advertisers at least one of three new display advertising formats beginning in July, the Online Publishers Association announced Tuesday.
The ad units are designed to be larger than banner ads, offer interactivity, and comprise a greater proportion of the advertising-to-editorial ratio that most publications operate under.
The move by online publishers comes at a time when the economy is in a recession and advertisers are pulling back on their spending.
"Agencies are looking for new ways to integrate their clients' brand experiences with more interactivity on the page, and these new units provide a way for them to accomplish this," said Pam Horan, association president, said in a statement.
The nearly two dozen online publishers represent approximately 66 percent of the U.S. Internet audience, according to the association. And they include FOXNews, NBC Universal, CBS Interactive (publisher of CNET News), ESPN, Time Inc., and The Wall Street Journal Digital Network.
The three advertising units include:
A pushdown ad that runs the width of a page but retracts to the top of the page, as well as offering a second ad on the right hand column.
(Credit:
Online Publishers Association)
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(Credit:
Online Publishers Association)
A second ad unit, XXL Box, will feature page-turn functionality, as well as the ability to run video ads on the 468 wide x 648 tall size panel.
The fixed panel ad, 336 wide x 860 tall, remains stationary and users scroll up and down to view the ad.
The British newspaper the Guardian announced Tuesday it's launching an open platform designed to offer third parties free access to its content and data, in exchange for carrying the publication's advertising.
With the platform, the Guardian aims to ease the process for third-party developers to design applications and services using free Guardian articles, videos, photo galleries, and other content.
One partner, for example, has developed a service to encourage Guardian readers to geotag all of the publication's content, with the goal of making it easier for readers to find news, video, and other related information in their area.
The Guardian is also offering a free data service to third parties, allowing them to use the publication's statistics and data for use on their own Web sites.
In exchange for the free content and data, users would be required to carry Guardian advertising.
Newspapers and magazines have seen a pullback in advertising revenue over the years, as readership has dropped. Advertising rates are tied to circulation levels, which reflect the number of readers who subscribe to a publication.
The recession has compounded the problem for the newspaper and magazine industry, which has seen an acceleration in the rate of decline for advertising revenue.
