24 March, 2012



Is this the end of marketing’s nirvana, and the beginning of a Washington nightmare?

Posted: 24 Mar 2012 09:12 AM PDT

privacy sign

Marketers have been increasingly enamored with the power of "Big Data," and Washington has clearly taken notice. If you've been living under a rock and haven't heard the growing buzz around consumer privacy, such as "Do Not Track," let me quickly get you up to speed.

The proliferation and love of Big Data

We all know that people are interacting online and sharing content with friends, “Liking” their favorite brands, and clicking on interactive ads on a larger scale than they could have years ago. Naturally, this shift has provided publisher and marketer brands an opportunity to better understand who their readers and consumers are, and how to reach them in the most relevant and effective way.

As a result of the massive volume of online interactions, today’s marketers — as well as what we might call "Big Data Architects" such as FacebookGoogleAmazonQuantcast, and now my firm, 33Across — have various forms of anonymous and registered data on billions of users around the world as a guiding resource. While this has garnered a lot of Washington attention, what gets publishers and marketers even more nervous (trust me) is the prospect of losing access to the rich data derived from social engagement, influence, and interest—perhaps the most advanced form of social research known to man.

Without these insights, we undoubtedly risk a much dreaded regression back to the pre-social targeting days of arbitrarily placed, blinking, monkey ads. (This was not that long ago, so I'm sure we can all recall how painful that was.)

Big Data is at an inflection point

Make no mistake: there is a grave concern that the Federal Government will make potentially devastating changes to our industry. The growing interest and tsunami of national media coverage around Do Not Track speaks to the need to make sure users' privacy is protected, as well as to give them easy access to see and opt-out of how they are tracked online. These initiatives are top of mind for the FTC, which is looking to groups like the World Wide Web Consortium (W3C), for example, as a forum to discuss these issues.

Data has become the lifeblood for researchers and brands that want to understand peoples' attributes and online behavior. And, if we don't provide users with adequate control over their online privacy; government will. Let's not let it get to that point.

Integrity-driven data

We've heard about the flap over Path uploading phone address books to its servers without first getting users' permission, and how Google side-stepped privacy cookie settings to track users for ad serving. These glaring missteps have sadly cast a dark shadow over our entire industry and misrepresented how data is universally used. This type of conduct is bad for consumers and brands alike. If we don't adequately regulate ourselves and address public privacy concerns in a more transparent, aggressive manner, it's only a matter of time before our government imposes legislation. As we all know, government regulation could prove far more severe than if we were to take action on our own.
As an industry, the faster we progress towards heightened responsibility, the better. Consumers should not have to ask for greater control over the ways in which ads are targeted to them, but instead should be assured that privacy standards are high and consistent with the FTC's principles. By implementing multiple solutions to ensure safe data handling, publishers and brands can promote accountability at every stage of interaction — from consumer notification to internal data management.

Dr. Drew Data Intervention

Now, here's the good news. There are already several active organizations that are taking the appropriate steps on our behalf to provide a greater level of transparency and control to consumers. Leading the way are organizations such as the NAI, IAB, AAAAs, AAF, ANA, BBB, and DMA. These groups are making concerted efforts to protect businesses and consumers with legally-sound, self-regulatory programs. These organizations stand at the forefront of numerous privacy and educational initiatives, acting as both a global informants and full-service compliance platforms.

Lessons learned from our friends overseas

Political interventions on online advertising have already fundamentally changed the Internet user experience by prompting users to opt-out on every page, as seen in some European countries. Not only is it remarkably annoying, this new dynamic disrupts the natural online experience, but more importantly, it compels people to question whether they should navigate to the Web site of a smaller, less familiar publisher or brand. We could potentially be left with a homogenous Web, in which we default to browsing only on the sites of the largest companies. Doing so would undoubtedly cripple the efforts of smaller businesses and diverse information sources—to the detriment of our field that thrives on innovation, accessibility, and entrepreneurialism.

Data is a huge driver of our economy

Furthermore, we shouldn't systematically dismantle one of the only industries that has successfully endured the tumultuous financial crisis and continues to keep many global economies afloat with its steady hiring streak.

According to IAB, digital advertising revenues in the United States were $7.88 billion for the third quarter of 2011, a 22 percent increase over the same period in 2010. Needless to say, innumerable jobs would be put on the line of fire—a risk that no one in 2012 wishes to take. In fact, few of us could stand where we are today if such a restrictive structure existed. Simply put, in our current economic climate, we literally and figuratively cannot afford to let advertising be 100% regulated by those who do not understand it as intimately as those who have built it.

Get your house in order

Whether you are a staunch supporter of consumer rights, universal access to free content, passionate about supporting our global economy, or all of the above, now is the time to put your privacy practices under a microscope.

Every digital advertiser and Big Data Architect should implement the highest level of privacy standards and publicly display the industry's commitment to both privacy and growth of our increasingly innovative field. Now is the time to crawl out from under the rock and conduct ourselves with an unequivocal focus on consumer respect and privacy, alongside a fantastic online media experience. This issue is critical and timely; everything in our capacity must be done to meet consumer and governmental expectations.

By giving consumers greater control of their online privacy, we likewise ensure that we retain the right to flourish one of the fastest, most successful industries in history.

Image via Rob Pongsajapan/Flickr

Matt Arkin is the President of 33Across. Most recently, he served as Chief Revenue Officer for Sojern, and previously headed sales and operations at TACODA for three years.

Filed under: VentureBeat

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iPhone 5 rumors will be a snoozefest this year

Posted: 24 Mar 2012 08:04 AM PDT

iPhone 4S 1

Now that the new iPad is out, the tech world is beginning to anxiously report on details about Apple’s next iPhone (let’s just call it the iPhone 5 for now).

But while it’s sometimes fun to dive into rumors, I can’t help but notice that this time around, the iPhone 5 rumor-mill is particularly boring. And it’ll likely remain yawn-inducing until the next iPhone’s launch.

Why, you ask? Because we’ve already gone through this last year. In the run-up to the iPhone 4S’ release, there were multiple reports from trusted sites about a new iPhone with a slimmer design and a larger screen. We saw legitimate-looking iPhone 5 cases, and some fans even created a semi-realistic iPhone 5 mockup. And thanks to the new iPad, we can predict some of the features  — in particular, LTE 4G –  that the new iPhone will sport.

Aside from revealing a new naming scheme (and after the new iPad, we’re sort of expecting that as well), there seems to be little room left for iPhone 5 rumors to truly surprise us.

Take the latest rumor from iMore, for example. The site reports that the iPhone 5 will have a mini-dock connector that’ll allow more room for internal components  (it already reported this back in February), LTE 4G (no surprise here), and a release in October (again, what pretty much everyone is expecting). iMore’s big revealation: the iPhone 5 may have a screen that’s the same 3.5-inch size as its predecessors (I’m hoping this one isn’t true), but iMore also notes that the decision hasn’t been finalized yet.

Earlier last week, we saw a far sketchier rumor from Reuters (via a South Korean newspaper) that claimed the next iPhone would sport a 4.6-inch screen and be released in the second quarter (get real folks). While an extremely large iPhone screen seems interesting, everything else about that report rang false.

Those iPhone 5 rumors from last year didn’t just come out of thin air — they were likely just a year too early. Based on the past rumors, we expect a new iPhone with a radical redesign, a slightly larger screen, LTE (for sure), and a faster processor than the new iPad’s A5X (hopefully quad-core).

Like any iPhone owner, I’m excited to see what Apple comes up with next — but I’m far less amped for several months of rehashed rumors.

Filed under: mobile, VentureBeat

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The new iPad is for gaming

Posted: 24 Mar 2012 06:00 AM PDT

iPad Journey

The new iPad, third generation, iPad 3, whatever you call it, is a serious gaming machine. For some games, it even rivals a console like the Playstation 3. We’re going to see more and more gaming done on the iPad in the months to come. And we’re going to like it.

In fact, I think this new iPad is going to replace game consoles. Here’s why:

Due to some unexpected monies in my hot little hands this past month, I was able to acquire a PSVita. I’d sworn off dedicated gaming devices (you can read the previous link on your own), so  suffice it to say I took some ribbing from my gaming friends for the purchase.

The touchscreen on the thing is fantastic, while the app icons are very iOS-inspired. My first impression? It’s an iPhone with buttons. Sweet! Of course, I’d heard all the griping online about how the touchscreen, front and back, was merely a gimmick to bring smartphone gamers back to the warm embrace of a Sony-created handheld device. I’m sure that was part of it, but not all. The touchscreen, especially the front, makes navigating menus, buttons, and typing super simple and intuitive. Which in turn makes the PS Vita more accessible to gaming newbies. Just like the iPad, right?

I also picked up a game called Escape Plan that makes extensive use of the touchscreen. A game that looks a lot like the iOS game Numberlys, at least in the art and character design arena. This is a game that is expressly designed for the touchscreen, as mentioned on the splash-screen when the game starts up. Wait, what?

Escape Plan, selling for $15, is essentially a touchscreen experience that plays so much like an iPhone game that I keep wondering why it’s not on iOS. Granted, there is a a rear touchpad mechanic that wouldn’t work as is on the iPhone or iPad, but still. It’s hard not to compare the two systems and wonder whether it’s worth buying a very expensive handheld gaming system and a $15 game that otherwise might start at around $2.99 on the App Store.

Let’s also remember that the iPad has the very same graphic chip the Vita has. The. Very. Same. Chip. How does that not impress gamers? There aren’t buttons on the iPad, I get that. Some games really do work better with analog sticks and physical buttons that we need to find by feel so we can concentrate on things happening on the screen. Right, yes, ok. But for games that don’t require that? The iPad is an incredibly fantastic gaming machine in its own right.

Journey, by Thatgamecompany, came out for $15 on the Playstation 3. It’s a downloadable game, the same as Escape Plan above, and every other iOS game out there. It’s a brilliant, incredible, emotionally engaging experience with beautiful art design and heart-achingly affecting music. A friend of mine called it a “cinematic experience,” and while I disagree with that for more technical reasons, I think it’s a valid descriptor most non-gaming folks would identify with.

But, I told that very same friend, Journey could very well be played on an iPad. Especially the new iPad. And, if the big screen TV and surround sound system is really the point of the game (and I don’t believe it is; not entirely), then remember that the new iPad can stream anything to the new AppleTV in 1080p. Do we need a button-laden controller? No! Journey is a one button game, with some tilt for camera action. Isn’t the iPad the perfect fit for that?

Bottom line here — do all the games we play truly require a controller and a console? Can’t the iPad that I buy for work and checking email and web surfing on the go also become my home console for many of these games? How about if we look at any number of currently available and future-planned peripheral joysticks and controllers for the iPad? Let’s imagine a scenario in which I’m playing a game like Journey via a console-style controller that connects to my iPad via Bluetooth, streaming a game in 1080p to my giant HDTV. Wait, we don’t even have to imagine that (except maybe the Bluetooth bit) at all. It can happen now.

The new iPad (and iOS in general, really) is for gaming. Plain and simple. I believe more people are going to see that, and the days of a robust, high-end, dedicated handheld market, as it stands today, are numbered. As are, perhaps farther in the future, the days of the console market. Heresy!

What do you think? Let me know in the comments below. Feel free to disagree entirely as long as you’re nice about it.

Filed under: games

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Angel Investing evolves through Crowdfunding at Microventures

Posted: 24 Mar 2012 02:00 AM PDT

MicroVenturesThis sponsored post is produced by Microventures.

Way back in 2011 if you wanted to invest in startups you needed to have about $250,000 in capital to spread out between several investments which made investing in Tech startups an exclusive club for the rich. Not only did you need the capital but you also needed to know the right people to get access to good deal flow. Those factors left many interested investors on the sidelines.

But today, it's a lot easier to become an angel investor due investment sites like MicroVentures which uses a model that is similar to crowdfunding which allows you to invest smaller sums alongside others and to invest in deals stretching from Boston to Silicon Valley.

Gone are the days where you have to risk $50,000 or more, receive a personal invitation to invest from a friend and only see a limited number of deals from the few available in your area.

MicroVentures helps investors learn about companies they may never have heard of, and to invest smaller sums, which is virtually unheard of with traditional investing.

The service matches companies seeking money with investors looking to invest anywhere from $1,000 to $30,000 or more. MicroVentures helps investors with the initial due diligence process by filtering startups and then providing documents to help investors conduct their own due diligence prior to making a final investment decision.

The key to becoming a successful angel investor, of course, is to invest in the right startups. To get there, you need:

1) Good deal flow, allowing you to spot potential winners from many potential options.

2) The ability to invest in multiple deals so you gain experience.

3) A knack for spotting potentially successful companies, and more importantly, management teams and entrepreneurs that will succeed.

Getting good deal flow is often the stumbling block for the average person looking to get started in angel investing. And it's one of the reasons Bill Clark launched MicroVentures. He wanted to begin investing, but didn't have access to good deals.

Like others thinking about becoming angels, Clark wanted to invest smaller sums in more companies, allowing him to spread his risk and also increase his chances of picking a winner. And he wanted access to great companies outside of Austin, his hometown.

Today, Clark invests alongside the more than 2,000 investors from 20 states that have joined MicroVentures. To date, investors have put more than $2 million into 15 companies.

If you'd like to join the more than 2,000 angel investors getting in on new deals via the MicroVentures platform, be sure to put "VentureBeat" in the referral code when you sign up and we will send you a $100 gift card after you make your first investment.

Filed under: Entrepreneur, VentureBeat

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Dear AT&T, it’s crap like this that killed the T-Mobile merger

Posted: 23 Mar 2012 08:01 PM PDT

Like an obnoxious school child that can’t help but point out when it thinks it’s right (note: this is never cute), AT&T said earlier today that T-Mobile’s massive layoffs wouldn’t have happened if the FCC allowed it to purchase the smaller carrier.

“Normally, we'd not comment on something like this,” wrote AT&T’s Jim Cicconi,  Senior Executive Vice President of External and Legislative Affairs, on the company’s public policy blog. “But I feel this is an exception for one big reason – only a few months ago AT&T promised to preserve these very same call centers and jobs if our merger was approved. We also predicted that if the merger failed, T-Mobile would be forced into major layoffs.”

Cicconi then goes on to rail against the FCC’s decision to block the $39 billion merger, saying (with a certain amount of glee), “The FCC may consider itself an expert agency on telecom, but it is not omniscient.”

The blog post is worth a read, if only for Cicconi’s glaring lack of self-awareness. It’s exactly this sort of swagger and sense of  self-entitlement that played a big role in the T-Mobile merger falling apart. From the beginning, AT&T acted like it was doing consumers a favor by gobbling up one of its biggest competitors and reducing the amount of wireless choice in the U.S. (of course, AT&T claimed it was helping the wireless market).

But then the FCC issued a report that took issue with pretty much all of the benefits AT&T claimed the merger would deliver. Notably (and particularly relevant to today’s news), the report found that the merger would cause significant job losses, even though AT&T said that it would create jobs. AT&T also claimed that it wouldn't be able to build out its 4G LTE network without the acquisition, but the FCC found that the company would have had no issue achieving nationwide LTE coverage on its own.

Instead of addressing the issues the FCC brought up, AT&T said the report was merely a “draft” with no legal standing. The carrier never apologized for lying to consumers and regulators — so it’s particularly offensive to see it rubbing salt into T-Mobile’s wounds today.

Not surprisingly, AT&T eventually gave up on its merger plans because of the intense opposition from the FCC and the Department of Justice.

AT&T thought it could power through the merger with little effort, and it likely didn’t see the regulatory opposition coming. (Let’s not forget that the Comcast/NBC Universal merger was approved just a year ago.) Instead, it ended up paying a $4 billion breakup fee to T-Mobile parent Deutsche Telekom (in addition to spectrum and other assets).

To its credit, the FCC isn’t letting AT&T have the last word. "In a short period of time, T-Mobile has re-emerged as a vibrant competitor in the mobile marketplace," an FCC representative told AllThingsD. "Competition benefits all wireless consumers. The bottom line is that AT&T's proposal to acquire a major competitor was unprecedented in scope and the company's own confidential documents showed that the merger would have resulted in significant job losses."

VB Mobile SummitVentureBeat is holding its second annual MobileSummit this April 2-3 in Sausalito, Calif. The invitation-only event will debate the five key business and technology challenges facing the mobile industry today, and participants — 180 mobile executives, investors, and policymakers — will develop concrete, actionable solutions that will shape the future of themobile industry. You can find out more at our Mobile Summit site.

Filed under: mobile, VentureBeat

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Tech companies that will give you the highest dividend yields (infographic)

Posted: 23 Mar 2012 06:54 PM PDT


Talk of dividends has been in the air ever since Apple announced it would give its shareholders the bonus. But which technology stocks will give you the biggest yield?

Companies across Silicon Valley offer incentives for shareholders in the form of dividends. HP upped its dividend 10 percent today to 22 cents a share. But not every dividend is made equal. This week Apple announced it would give out a $2.65 per share quarterly dividend to its shareholders, the first time it has offered one since 1995.

While this was a big move for Apple, some people were underwhelmed with the amount. The company has been sitting on nearly $100 billion in cash, and with the stock reaching almost $600 a share, owners will only see a .36 percent yield on their investment over five years. The company does, however, say it will also spend the money to buy back some of its stock from the open market.

We took a look at the average yield of a dividend for a number of U.S. companies over a five year period of time. Check out which techies will give you the best returns based on dividend alone:

Statista dividends chart

Infographic via Statista; Top image via Shutterstock

Filed under: deals

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Pinterest revises terms of service, gives up right to sell your content

Posted: 23 Mar 2012 05:42 PM PDT

The providers of an inspiration service turned inward for some much-needed inspiration of their own, and have updated their terms of service following feedback from community members.

Run-away social sensation Pinterest has, after consulting with members, revised its terms of service Friday in light of growing scrutiny. It has removed terms that would allow it to sell content posted to the site. The new policies will go into effect on April 6, two weeks from today.

Pinterest, as you likely know, is the digital inspiration board site where arts, crafts, fashion, and food enthusiasts “pin” products to collections called “boards.” The site has emerged as a top 10 social network and grew its unique visitor count by 52 percent to 17.8 million people in February.

The changes to Pinterest’s terms of service represent a necessary step considering the company’s transition from a tiny upstart to the talk of the entire Internet. The previously generic terms have been replaced with language more appropriate for where Pinterest is headed.

Most notably, Pinterest has eliminated the clause that would have allowed it to sell content pinned to the site. “Selling content was never our intention and we removed this from our updated Terms,” co-founder Ben Silbermann said in blog post on the updated policies.

Language has also been added to the acceptable use policy that will allow the company to wipe out pins that encourage self-harm or self-abuse. Silbermann also briefly touched on revised language that should cover the site as it releases new features such as a coming-soon API and private boards.

Friday’s changes, however, fail to address many of the copyright infringement concerns outlined by the photographer community.

Lawyer and one-time Pinterest-lover Kirten Kowalski, for instance, ostentatiously deleted her boards after learning that Pinterest’s terms of service could leave her vulnerable to copyright litigation. The new terms of service still state the user is “solely responsible” for the content they pin to the site.

Filed under: security, VentureBeat

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Former Lolapps CEO leaves after acquirer lays off its developers

Posted: 23 Mar 2012 05:32 PM PDT

Former Lolapps chief executive Arjun Sethi is leaving the recently merged 6Waves Lolapps after a number of the social gaming company’s developers were laid off.

Sethi, who was with Lolapps for four years, announced his departure in a blog post this afternoon, saying:

“Most important to me is the culture we built together. Everyone we have hired is an entrepreneur and a leader in their own way. I hope to see multiple new ideas and startups emerge because of the type of people and culture we have created over the years. It's a culture that is seen as among the strongest! I am very proud of each and every one [of] this team and will miss you most of all.”

6Waves Lolapps recently cut a significant portion (nearly 80 percent) of its developers after merging with Hong Kong based 6Waves in July. Prior to the merger, 6Waves focused solely on placing third-party developed games on Facebook, as opposed to developing games in-house. Lolapps, on the other hand, produced games such as Ravenwood Fair and Ravensky City, which together amassed over 50 million players, according to Sethi. The merged companies, now called 6L, are taking on 6Waves’ original model for the time being. The company released this statement after the layoffs:

“6waves Lolapps will now focus on working with independent developers to launch and grow their mobile and social games. As a result we have restructured the company to focus on key functions which include developer outreach, product advisory, user growth initiatives and our publishing platform. The re-structuring means that we will have more resources to continue our leadership in the social and mobile game publishing space.”
At the time of the layoffs, it looked like Sethi was going to stay on board and continue as a chief product officer. Clearly, that is no longer the case. It’s unusual that an executive would leave the company so soon after an acquisition, so it’s easy to imagine the recent layoffs played a role in his decision to leave.

Filed under: games, social

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Groupon buys FeeFighters to support merchant community

Posted: 23 Mar 2012 03:58 PM PDT

Three-year-old business services provider FeeFighters has been acquired by daily deals giant Groupon for an undisclosed sum.

“Our goals have always been to help small businesses run more efficiently, and by teaming up with Groupon, a pioneer in local e-commerce, we are able to execute on that goal even better than we were as an independent company,” FeeFighters co-founder and CEO Sean Harper said Friday in statement.

Chicago-based FeeFighters operates a reverse auction marketplace where small business owners can pick a merchant for credit card processing. The company also offers its own payment gateway. The products will remain operable, Harper said.

The obvious connection between the two companies is their joint interest in catering to the needs of small business owners. Groupon has, of late, demonstrated a strong interest in developing tools for its merchant community and just launched a scheduling tool (the product of a previous acquisition) for taking online reservations. In theory, Groupon could employ FeeFighters to help merchants process payments when customers book appointments.

FeeFighters had raised more than $1.5 million in Angel and seed funding prior to its sale. Groupon confirmed the acquisition to VentureBeat but did not disclose terms of the deal and declined to provide additional comment.

[via TechCrunch]

Photo credit: swanksalot/Flickr

Filed under: deals, VentureBeat

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Camera+ maker Tap Tap Tap hits 10M app sales

Posted: 23 Mar 2012 02:25 PM PDT

The makers of seven iOS-only paid applications, including the sophisticated photo capture and edit application Camera+, have sold more than 10 million applications by way of the App Store.

Tap Tap Tap, a hobby-project turned accidental big-business, crossed the 10 million paid application sales milestone for all of its apps, the company announced Friday.

The iPhone and iPad app developer previously announced that it had made more than $6 million in revenue alone from Camera+-related purchases, which includes paid downloads and in-app purchases.

“We've been very fortunate so far in that all of the apps we've launched to date have made it into the top 10,” Tap Tap Tap founder John Casasanta told VentureBeat last month. “Each of them has had varying levels of success with Camera+ obviously being the most significant.”

Camera+ attracts a growing pool of iPhoneographers looking for robust mobile photo-editing tools. Its sales have climbed as the iPhone's camera quality has improved, and the 10 million total app sales figure was surely pushed forward by the feature-packed new version released recently.

But all might not be smooth sailing ahead for the small app shop. Apple has caused a tidal wave effect by entering the mobile photo-editing space with a $4.99 iPhoto application for iOS devices. The application reached one million users in 10 days.

Photo credit: theqspeaks/Flickr

Filed under: mobile, VentureBeat

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Are you BI-Curious? A look at business intelligence (Infographic)

Posted: 23 Mar 2012 02:04 PM PDT

With the mountainous wastelands of data that dot the landscape of today's business, we're sure glad that business intelligence exists.  To those familiar with business intelligence, it's tools such as Domo, Bime, GoodData, and Jaspersoft. For the uninitiated, it's just another buzzword. Really though, it's not difficult to understand: think of it as a dashboard of all your key business metrics all in a neat operations center-like screen.

So what makes business intelligence special? Humans can perform the incredible when interpreting the right data, as long as it's presented in a useful way.

A recent infographic courtesy of DSquared Media calls out some interesting facts: Today, 86% of people will use some form of technology while shopping, or to assist in shopping. Around 49% of people used two pieces of technology while shopping in 2010. When it comes to business intelligence, 40% of companies believe they are better than 50% of their competitors, while less than 10% have no idea where they stand.

Business intelligence has even made its way into mainstream culture — decisions reached in the movie Moneyball were the result of BI. Not everything is fun and games though; initiating business intelligence before a corporate disaster will cost significantly less money and reduce a lot of stress on key players and those who publicly represent the company. However, most companies do not implement this method until after a disaster occurs, possibly causing significant damage to their reputation and costing them more than they ever planned to spend.

Are you already using business intelligence for your own shop? Thinking of doing so? The comments are yours.

Brian WallaceBrian Wallace is the President of NowSourcing, a social media firm specializing in infographic design, development, and content marketing promotion. 

Infographic via DSquared Media (Click image to enlarge)

business intelligence infographic

Filed under: VentureBeat

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And now, the VentureBeat staff will do a blind taste test of Pepsi’s newest soft drink

Posted: 23 Mar 2012 01:26 PM PDT

This week, we cover a smattering of tech news in our weekly video round-up — but first, we conduct a blind taste test of Pepsi’s newest soda pop-style beverage.

Irrelevant? Perhaps. But we were so excited that Pepsi picked us to taste the new hotness that we’re overlooking the irrelevance in order to secure ourselves some bragging rights and a six-pack of semi-diet cola.

Here are the news stories we covered this week:

That’s all for this week, folks. Have a great weekend!

Filed under: video

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Facebook logout page ads said to cost $700k per day

Posted: 23 Mar 2012 12:31 PM PDT

Advertisers desirous of taking of advantage of Facebook’s newest placement opportunity, the logout page, might need to prepare for a little sticker shock. The digital billboard space is rumored to require a minimum daily ad spend of $710,000.

Logout page placement alone costs $160,000 per day in the U.S., but the option is only available to advertisers who spend $550,000 per day or more on News Feed ads, an anonymous source told AdAge.

Facebook logout page ads were first introduced at Facebook’s marketing conference in late February. The social network demoed the placements to marketers as a new, optional fourth placement and touted them as a way for advertisers to put giant, interactive ads in front of the 37 million U.S. users who log out of Facebook each day.

Bing, Ford, and Titanic ads have made appearances on Facebook’s logout page since the new placement was announced.

“This is a fairly traditional play in the ad world," Mindjet head of marketing Jascha Kaykas-Wolff told VentureBeat at the time. “It's a natural progression for them… it's clearly a huge amount of inventory, and I don't think people are going to turn [the ads] down, but it's not a silver bullet by any stretch of the imagination.”

The ads, Kaykas-Wolff said, are nothing new in the world of advertising and will flop with Facebook members. Still, Kaykas-Wolff thinks buyers will snatch them up anyway.

“This is another indication that Facebook is a larger network and that it does have different types of inventory that, as a buyer, you can think about in concert with buying on CBSi, Yahoo, or MSN,” he said.

The exorbitant price point, however, will narrow the pool of potential buyers to just big brands with large advertising budgets, especially considering that the $700,000 commitment is in the same ballpark as the cost for single-day homepage ads on Yahoo or YouTube.

When reached for comment, a Facebook spokesperson said the social network doesn't discuss the terms of its advertiser agreements.

Filed under: media, social

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Apple only sells 2% more iPhones than Best Buy

Posted: 23 Mar 2012 12:22 PM PDT

Best Buy iPhones

How important is Best Buy to Apple’s iPhone sales strategy? Possibly more than Apple’s own retail shops, according to a new study from Consumer Intelligence Research Partners.

The research firm surveyed shoppers for a three-month period from December 2011 to February 2012 about where they purchased their iPhones. The study found that Best Buy accounts for 13 percent of all iPhone sales — a mere two percent lower than Apple’s share.

Surprisingly, 76 percent of all respondents said they purchased their iPhones from a brick-and-mortar retail store. And as the largest national electronics retail store chain, it’s no wonder Best Buy is selling nearly as many iPhones as Apple.

Of the five outlets that accounted for at least one percent of iPhone sales, three are U.S. wireless carriers. Considering that every phone needs a wireless service subscription, it’s understandable that AT&T, Verizon, and Sprint accounted for 32 percent, 30 percent, and 7 percent of the iPhone sales respectively. The same is true for Apple’s 15 percent of total iPhone sales since it manufactures and markets the device. Best Buy, however, is the only outlet without a direct tie to either the hardware or the wireless service it requires.

With Apple rumored to start setting up “mini Apple Stores” inside of retail chains like Sam’s Club and Target, it’ll be interesting to see if Best Buy can hold its ground.

Via AllThingsD; Photo via PB Central

Filed under: mobile

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GamesBeat Weekly Roundup

Posted: 23 Mar 2012 11:47 AM PDT

Here are some of the stories that ran on GamesBeat this week. We're running more articles exclusively in the GamesBeat section of VentureBeat, particularly when they're mainly of interest to our game readers. The broader-interest posts will continue to run on VentureBeat as well. Please visit the GamesBeat section to catch up on the latest game news. We're ramping up our game coverage, so you'll find a larger amount of deeper news at GamesBeat.

Here are the best stories that appeared exclusively on GamesBeat this week:

Survive the real zombie apocalypse, in an abandoned UK shopping mall

Darksiders II is a competent blend of Prince of Persia, Devil May Cry, and Castlevania (preview)

Blizzard launches World of Warcraft: Mists of Pandaria beta

4JStudios readying Minecraft for May 9 release on XBox 360

Free-to-play games catching MMO subscribers' attention (and wallets)

Gamers held the line: Mass Effect 3 ending is being addressed

Waveform proves you don't need guns to save the galaxy (review)

EA server shutdowns another example of why online passes are a bad idea (editorial)

Street Fighter X Tekken on-disc content will reportedly cost over $100 to unlock

Pre-Mortem: King's Bounty project lead introduces new race and units (exclusive)

And here are some of the big game stories of the week:

No Angry Birds Space on Windows Phone is a troubling sign for Nokia

Are casino games hot? Mobile Deluxe thinks so (exclusive)

With 6,000 followers, Zipline launches Moai game-dev platform

Digital game sales reach $3.3B in U.S. and Europe in Q4

Nvidia reclaims title of world's fastest graphics chip with Kepler launch

After 35 draws, OMGPOP finally got it right (interview)

OMGPOP chief revenue officer talks turkey on numbers and scaling [exclusive video]

Zynga buys OMGPOP for a reported $200M

Zoosk integrates gamification into its online dating community (interview)

Filed under: games, VentureBeat

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Speed-networking site 85by55 makes meeting new business contacts slightly creepier

Posted: 23 Mar 2012 11:44 AM PDT

Those crazy Brits. Today, British company 85by55 is launching as a mashup of two different services that should probably never be combined: LinkedIn and Chatroulette.

First of all, you’re probably wondering, “Why would someone name their company 85by55?” Co-founders Shed Simove and Jonathan Fren chose it because the standard business card is 85 by 55 millimeters in size.

What does a company that describes itself as “Chatroulette meets LinkedIn” look like? It’s a video chat “speed-networking” service that connects complete strangers to discuss business opportunities or whatever strikes a businessperson’s fancy.

The video chat “meets” are only two minutes long, just enough time to cut down on the painful awkwardness of chatting with a stranger. 85by55 claims that two minutes is just enough time to for a “meaningful conversation” without cutting into your tight schedule.

Chat partners are chosen at random, but there is an emphasis on what and whom you have in common based on your LinkedIn profiles. To expand the network of people you can connect with, you can add your Twitter and Facebook friends. You can also filter potential new contacts by industry or location.

Given Chatroulette’s often X-rated nature, we really hope these business folks keep it clean. Even if they do, and people are actually able to gain some real benefit for 85by55, I can’t help but think this is networking for the people who can’t be pried away from their computers long enough to meet people in the real world. What do you think? Would you use this tool to meet new business contacts?

Chatroulette image via Flickr user Matthew Burpee

Filed under: social, VentureBeat

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ValCom sues Megaupload for millions over copyright infringement

Posted: 23 Mar 2012 11:42 AM PDT

The New Zoo Review

What will happen to file-sharing company Megaupload’s $42 million in seized assets? Founder Kim Dotcom is scraping by on a monthly stipend of $48,500 (taken from the interest on Dotcom’s $10 million in New Zealand government bonds) but the rest of the company’s warchest is a tempting target for companies that can prove copyright infringement.

Enter Florida-based entertainment production company ValCom. ValCom announced Friday it is suing Megaupload for millions in damages for 6,000 of its audio and video titles that were allegedly pirated on Megaupload.com. The public company (VLCO, currently trading at $0.04 a share) is asking for between $750 and $150,000 per title in back-due royalties and damages. If successful, it could rake in anywhere from $4.5 million all the way up to $90 million in the suit.

“These are revenues that belong to ValCom, and we’re securing them for the benefit of the company and to increase value for our shareholders,” ValCom president Vince Vellardita said in a statement.

ValCom mostly rents studios and equipment to entertainment companies such as CBS and Disney, but it also has its own library of titles, including fitness video “In the House with Shari Layne” and 1970s children’s show “The New Zoo Review” (pictured above).

Filed under: media, VentureBeat

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Entrepreneurs, are you solving real problems?

Posted: 23 Mar 2012 11:00 AM PDT

“Are you solving a real problem?”

That’s a question I frequently ask entrepreneurs I meet with. Too often, companies focus on a technology instead of the customer’s problem. Here’s an example to illustrate the difference:

A new trend in hotel design is to use RFID-enabled key cards. I’ve seen this in three hotels in the last 18 months. Instead of the standard magnetic-stripe key card, guests use a key with a chip in it. Instead of swiping or dipping a key, you simply hold it against the reader.

That solves two problems:

  • Orientation. With a magnetic stripe key card, you need to ensure that the card is aligned with the reader. If it’s not, you can’t get into your room and you have to re-orient the card.
  • Speed of swipe. Swipe it too fast and you won’t get in. Swipe it too slow and you won’t get in. This can take a few swipes if the lock is particularly finicky.

The RFID technology solves these two problems. But so what? At best, it fixes a minor inconvenience.

Starwood Hotels is testing a variant of the RFID technology at some of its Aloft properties. Smart Check-In goes beyond simply fixing small inconveniences into solving real problems. As a Starwood loyalty program member, you get a permanent card. On the day of your reservation, you get a text message with your assigned room number. When you get to the hotel, you can go straight to your room.

In addition to the two problems above, this solves several real problems:

  • No waiting in line at the front desk. I often get to a hotel at 11 p.m. Inevitably, there’s someone in line in front of me and all I want to do is go to sleep. This eliminates that wait.
  • Forgotten room numbers. As a frequent traveler, I often forget what room I’m assigned to because I might be in 4 different hotels in a week. (When I can remember to, I’ll take a picture of the room number.) The current process is that I have to stop by the front desk, wait in line, show ID and have a key re-issued. With a room number in my text messages, I could just look it up and go straight to the room.
  • Bad room assignments. Sometimes I’ll get to my room and find that I don’t like the room I’m in. This means I have to schlep my stuff down to the front desk, wait in line, show ID, get a new room assignment and then schlep my stuff back up to the new room. With the new system, I could just call the front desk and have someone assign a new room and go straight there.
  • Environmental impact and cost of key cards. Although the RFID key card is more expensive, guests won’t have stacks of them piling up.

A system like this not only benefits the most frequent travelers who use it; it benefits everyone else by taking those people out of the lines. It can also be implemented in phases: there’s no reason the entire hotel has to be converted at once. A select number of rooms could be set aside for the most frequent guests. This could also be positioned as a benefit to loyal guests: use our new system and you’re guaranteed one of our nicest rooms.

All of a sudden, something that addressed a minor inconvenience is turned into something that solves problems and drives loyalty.

This is also a much more compelling sales pitch. Instead of saying, “We can make your guest’s entry marginally more convenient,” you can say “We can reduce your staffing costs and deliver a much better experience for guests.”

At this point, you may be thinking, “There’s nothing specific to RFID in those problems. You could do exactly the same thing with magnetic-stripe readers that were networked.”

That’s exactly my point. That’s why it’s important to focus on the consumer problems and not the technology.

Rocky Agrawal is an analyst focused on the intersection of local, social, and mobile. He is a principal analyst at reDesign mobile. Previously, he launched local and mobile products for Microsoft and AOL. He blogs at http://blog.agrawals.org and tweets at @rakeshlobster.

[Rubik's cube image c/o recultured.com]

Filed under: VentureBeat

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Fresh off a successful exit, Citrix Startup Accelerator looks for new investments

Posted: 23 Mar 2012 10:46 AM PDT

Nukona sign at the Citrix Startup AcceleratorThis post is sponsored by Citrix.

When Nukona, an early-stage startup focused on mobile app management, got acquired by Symantec this week, it was the conclusion of a rapid development and launch cycle helped in large part by an investment from the Citrix Startup Accelerator.

“It takes a community to help ideas grow and bloom into successful businesses,” said Nukona founder and chief executive Chris Perrett. Citrix helped provide that community, Perrett said, as well as “social credibility” that gave the startup a leg up in securing business deals.

Nukona was founded in July, 2010, hired its first employees in December of that year, and launched in January, 2011. A little more than a year later, the company was acquired by Symantec (terms were not disclosed).

Nukona raised about $1 million in overall capital from various angels as well as the Citrix Startup Accelerator. The Accelerator provided more than just working capital, however: Citrix provides the portfolio companies with shared office space in Santa Clara and access to Citrix experts who can help advise the fledgling companies, make introductions, and in some cases lead them to their next investment rounds or to acquisition.

Nukona moved into the Accelerator in July, 2011. From that time on, Perrett said, Citrix advisors spent time with the company, asked questions that helped shape their business strategy, and shared contacts that opened doors for them.

The company was one of a dozen startups picked last year to join the first class in the Citrix Startup Accelerator. Each one received between $100,000 and $400,000 in investment from the company, office space, and access to the Citrix customer base.

“This is our external innovation engine,” said Jeremiah Shackleford of Citrix.

The company is currently accepting applications for the next round of investments, and hopes to place 12 more by the end of year. Qualifying companies do not need to be closely aligned with the Citrix business of virtualization, but they do need to be enterprise-oriented, early-stage companies that could benefit from a strategic alignment with Citrix.

Interested companies can apply to the Citrix Startup Accelerator online. In addition, Citrix is sponsoring a startup competition called the Startup.Synergy Challenge, at its upcoming Synergy 2012 conference. That competition offers a $100,000 prize to the winning company. The event will also include demos from the current crop of Accelerator companies, so you can see some of the fruits of Citrix’s investments.

Sponsored posts are content that has been produced by a company, which is either paying for the post or has a business relationship with VentureBeat, and they’re always clearly marked. The content of news stories produced by our editorial team is never influenced by advertisers or sponsors in any way. For more information, contact garrett@venturebeat.com.

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Smartphone, tablet usage spikes during NCAA Tournament

Posted: 23 Mar 2012 10:42 AM PDT

Beginning last Thursday, men (and women) everywhere hit pause on their lives to press play on March Madness, gravitating to mobile screens more than ever before to watch as would-be Cinderellas challenged top-ceded teams in the NCAA Men’s Basketball Tournament.

Consumers considerably increased their access to sports content across web, smartphone, and tablet screens this year, according to analytics firm comScore.

Day one of the NCAA Tournament saw a 79 percent spike in sports-related content compared to the average of the previous three opening-day Thursdays, but tablet and smartphone usage showed the highest gain over previous years. Sports content consumption on tablets shot up 94 percent on Thursday, and consumption on smartphones jumped 83 percent.

click to enlarge

Altogether, 20 percent of sports content devoured during the first two days of the NCAA Tournament was enjoyed by way of smartphone or tablet.

What’s happening here? Does the data tell the story of a subset of the population so hungry for basketball that they can’t go without a single minute of the action? Or, is this just another sign that we’re living in modern mobile times when smartphones and tablets have given us a way to remain connected at all times? comScore’s calculations indicate that the former is the case, for now, as nearly double the percentage of sports content was consumed on tablets and smartphones as other content categories on the same days.

These massive mobile sports consumption figures certainly weren’t hurt by the fact that NCAA offers all 67 March Madness games live on iPhone, iPad, and Android to ravenous basketball fans. But these hyper-connected sports enthusiasts are just the early adopters of a trend in the making.

“When the content is highly time-sensitive — such as with news or sports scores — there's a greater likelihood of it being consumed on-the-go via mobile devices,” comScore senior director Debbie Bradley said.

Photo credit: Mario Sixtus/Flickr

Filed under: mobile, VentureBeat

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Verizon comes out strong against wireless net neutrality vote

Posted: 23 Mar 2012 10:41 AM PDT


Not surprisingly, Verizon continues to be vehemently opposed to wireless net neutrality — so much so that it’s urging investors to vote against a new resolution that presses the issue.

Following an SEC ruling last month that wireless carriers must let their shareholders vote on net neutrality — the notion that web traffic should be treated equally, no matter its origin or destination — Verizon has included a resolution about it in its latest proxy statement.

“The open (non-discriminatory) architecture of the Internet is critical to the prosperity of our economy and society,” the company wrote in the resolution. “We believe this economic and social value is an important factor in the growth of our economy and widely diversified investment portfolios… Shareholders request the company publicly commit (while not conceding or forfeiting any issue in litigation related to network neutrality) to operate voluntarily its wireless broadband network consistent with network neutrality principles.”

But Verizon’s board isn’t letting the resolution pass without a fight, urging shareholders to vote against it with a blistering response. The board writes that the proposal “will harm Verizon's ability to provide robust and secure wireless broadband service to its customers.”

It’s an old argument, but one that the board backs up by pointing out that even the FCC doesn’t approve wireless net neutrality yet (it only supports wireline net neutrality). A wireless proposal “was rejected by the FCC in its recently adopted rules addressing net neutrality issues,” Verizon’s board writes. “The FCC recognized that managing a broadband network in "non-neutral" ways was critical to ensuring network integrity, providing security capabilities and reducing congestion.”

This certainly isn’t a black and white argument. Wireless and wireline networks differ drastically when it comes to their infrastructure and management — and as more consumers jump to smartphones and 4G data plans, the difference between the two will become all the more clear. I’m personally all for net neutrality, but when it comes to wireless networks, we may need to find a middle ground that both activists and carriers can live with.

Here’s the full response from Verizon’s board:

The Board of Directors strongly believes that by requiring the Company to "not privilege, degrade or prioritize any packet transmitted over its wireless infrastructure based on its source, ownership or destination" this proposal will harm Verizon's ability to provide robust and secure wireless broadband service to its customers. The delivery of high-quality and safe wireless Internet access services is a highly complex, technical undertaking. The proponents appear to have no concept of the negative technical and operational ramifications of requiring purely "neutral" routing of Internet traffic. This proposal would substantially interfere with the technical operation of Verizon's wireless broadband network and have a wide-ranging and significant impact on Verizon's business and operations. Among other things, the proposal would prevent Verizon from engaging in reasonable network management practices designed to address potential congestion, security and other wireless network problems and make the network more efficient and more widely available to all customers. The proposal would also prevent Verizon from giving priority to police, fire and military communications over its wireless broadband network in the event of natural disasters or terrorist attacks.

Importantly, this very proposal was rejected by the FCC in its recently adopted rules addressing net neutrality issues. The FCC recognized that managing a broadband network in "non-neutral" ways was critical to ensuring network integrity, providing security capabilities and reducing congestion. It further concluded that wireless networks in particular present unique operational issues and expressly permitted providers to develop
differentiated services that this proposal would prevent. The proposal disregards the FCC's conclusions about the importance of network management and would impede Verizon's ability to manage its networks and offer services to meet the needs of its customers.

Finally, Verizon is committed to maintaining an open and vibrant Internet. Verizon already complies with the FCC's net neutrality rules and voluntarily operates its wireless broadband networks in accordance with additional openness principles published on its website. The Board believes that the rigid operational requirements of this
proposal will not further the "openness" of the Internet; to the contrary, it would expose Verizon's wireless broadband customers to reduced service quality and security.

For these reasons, the Board strongly opposes the proposal.

The Board of Directors recommends that you vote AGAINST this proposal.

VB Mobile SummitVentureBeat is holding its second annual MobileSummit this April 2-3 in Sausalito, Calif. The invitation-only event will debate the five key business and technology challenges facing the mobile industry today, and participants — 180 mobile executives, investors, and policymakers — will develop concrete, actionable solutions that will shape the future of themobile industry. You can find out more at our Mobile Summit site.

Filed under: mobile, VentureBeat

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New round could make Spotify sing for a $3.5B valuation

Posted: 23 Mar 2012 10:38 AM PDT

Nearly every aspect of music startup Spotify is growing, including its total active users, paying subscribers, its music library, and the number of international markets it reaches. So it seems reasonable that the company’s valuation should do the same.

The music service is rumored to be seeking a huge new round of funding that could push its total valuation up to a whopping $3.5 billion, according to a BusinessInsider report that cities multiple anonymous sources familiar with the matter. If true, that valuation would mean the company was $2.5 billion more valuable than its estimated worth after closing its previous $100 million round in June 2011.

Spotify is a streaming music service that’s built on a freemium business model, bringing in both advertising-based and subscription-based revenue. Because of its social features, which allow people to share playlists and listen and share tunes through Facebook, Spotify has been able to grow like a weed in the face of heavy competition from the likes of Pandora, Last.fm, Rdio, MOG, and others. The company attained 3 million paying subscribers back in January, with at least a million of those subscribers in the U.S. alone.

However, Spotify’s lack of ownership when it comes to the music it streams might be making potential investors nervous about participating in the high-valuation round.

Unlike the streaming video services, Spotify doesn’t have exclusive access to specific libraries of content, which means competitors can theoretically mimic everything Spotify is doing well while streaming nearly the same exact library of music to their own users. For companies like Hulu and Netflix, competitive advantage means developing their own exclusive video programming. For a music service, however, it might not be so easy.

The report indicates that both TCV and Andreessen-Horowitz have passed on the new round, which hasn’t stopped Spotify from seeking out other investors.

Founded in 2009, the Sweden-based startup has raised a total of $189 million to date.

Filed under: deals, media

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Untapped Opportunities in Singapore

Posted: 23 Mar 2012 10:00 AM PDT

Steven LeeWhen people think of Singapore, they probably think of a bustling financial center.  What many people do not realize, however, is that Singapore is also developing a thriving software ecosystem that makes it a perfect place for companies large and small to set up software development centers.

Underpinning this quickly developing ecosystem are top notch colleges and universities that are magnets for top students throughout Asia and produce a steady stream of talent for local companies.  NUS and NTU, the two largest universities in Singapore, are ranked among the best in Asia, and the world.  Companies such as Google, HP, and eBay are among the tech companies that have tapped into this talent, fueling the rapid expansion of the ecosystem.

Beyond talent, the same reasons that make Singapore a bustling financial center also make it an easy place to set up software development centers.  For starters, there are familiar laws and order.  It is rated one of the easiest countries to operate in by the World Bank.  Infrastructure is unmatched, with wifi and fiber-optics set-up throughout the city.  Internet penetration is over 99%.

Finally, Singapore is simply much more cost efficient than the US.  Starting salaries for engineers are 30-40% less than they are in the US.  In addition, various government agencies including EDB and IDA provide incentives in the way of grants to companies that conduct R&D and inject growth into the Singapore economy.  While other countries may have even lower operating costs, it is difficult to match the quality to price ratio offered by Singapore.

For all these reasons, when Tremor Video was looking to scale our development team over 2 years ago, we looked to Singapore.  We looked for a partner with strong connections in and local knowledge of the region that can guide us in this process.  We found such a partner in EDBI, a strategic global investor, and the corporate investment arm of EDB.  EDBI took an equity stake in Tremor Video (ScanScout at the time), and has been an invaluable resource in helping to provide strategic as well as operational advice.  EDBI's industry knowledge and wide network gave us access to additional non-dilutive funding sources including grants from EDB and IDA.  EDBI has also been instrumental in our recruitment efforts and in helping us integrate into the local ecosystem by introducing us to key business leaders in our industry and beyond.  Today our team in Singapore is over a dozen strong and growing, and has become integral to the development of our VideoHub platform.  For us, this could not have worked out any better.  If you are looking to efficiently scale your development team, Singapore is a truly hidden gem to consider.

IDA — the Infocomm Development Authority of Singapore — has teamed up with VentureBeat to explore Singapore's potential as an Asian launchpad in a series of posts that will culminate in a live video webinar. This post is part of that series. To read the full series and sign up for the webinar, go here.

About Tremor Video:
Tremor Video provides in-stream video advertising solutions to Fortune 1000 brand advertisers and top tier publishers. Widely regarded as the leader in online video advertising technology, the company leverages its award-winning decisioning engine, innovative video ad formats and publisher technology to deliver the campaign results and scale advertisers should expect from digital video. Tremor Video is the only video ad platform that can provide 100% brand safety by scanning and categorizing every single video stream before an ad is ever served. In addition, Tremor Video's award-winning SE2 technology gets smarter at finding and engaging viewers with every ad served, enabling the company to welcome and encourage pay-per-engagement pricing. Founded in 2005, Tremor Video is backed by top-tier investors, including Canaan Partners, Draper Fisher Jurvetson Growth, General Catalyst, Keating Capital, Meritech Capital Partners, Time Warner Investments, and W Capital Partners.

Filed under: Entrepreneur, media, VentureBeat

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2012: The year of the App-ocalypse?

Posted: 23 Mar 2012 09:48 AM PDT

In the past week, two high-profile mobile apps were effectively shut down and acquired – Hipster by Aol and Oink by Google. Both had big PR buildups, rave reviews from the tech press, and strong usage from the digerati.

What they did not get was traction beyond that, and the teams went on to be acqui-hired. Even apps that seemed to define new categories, such as GroupMe for group chat and Foursquare for check-in, have failed to gain popularity with the general public. GroupMe sold to Skype and Foursquare is shifting from the check-in model to the reviews/discovery space dominated by Yelp. Highlight, the latest digerati darling, drained batteries and fizzled at South by Southwest.

Why do even well-funded apps with successful founders fail — as happened to Peter Pham with Color, Kevin Rose with Oink, and many others? The reality is that even if you’re a proven entrepreneur, any consumer-facing product is hard — be it Web sites, movies, books, music, or toys. Consumers are fickle and have a ton of entertainment options; predicting what they want is incredibly challenging.

On the face of it, well-funded apps like Color and Oink should have had an easy time achieving app stardom. But in today’s world, independents have as much chance of taking off as pedigreed players. Having a large Twitter following and getting written up in tech blogs gives you only a small leg up — not a huge leap over the competition.

At CBS Interactive (where I work as chief technology officer), we offer a bunch of apps, including very popular ones like 60 Minutes and CNET. Our apps are an additional channel for branded, popular content, and even we sometimes struggle to get traction.

Making an app successful is a two-part problem. The first part is getting people to install the app. You do that by promoting it on your Web site, advertising  it, and promoting installs on Android via offer networks such as Tapjoy. (Disclosure: I am on the advisory board of Tapjoy). It’s also critical to nail the initial user experience so that the app gets good reviews.

But achieving a decent number of downloads is just the beginning. Apps need to be relevant to consumers’ lives so that users return to them regularly. They need fresh content, useful features, and reminders for users in the form of notifications and emails. The vast majority of apps, especially games, see their usage plummet not long after download.

The iPhone and Android home screens have space for only 16 icons, and many of those spots are already taken by core features such as the phone, messaging, and map icons. Ask random, non-techie friends to pull out their phones, and chances are that their home screens will be populated by ComScore top 50 properties such as Yelp and The Huffington Post. Actually, I always ask techies pitching me an awesome new app to show me their phones, and usually they don’t have anything other than ComScore 50 properties either.

So are apps over? Of course not. But the initial scrum is over, and apps are now just another form of entertainment vying for consumers’ fickle attention. And just like other mass media, they area subject to a power law, where a few apps get almost all the attention.

This story also appears on CNET and is published here with permission.

Peter Yared is the CTO of CBS Interactive and has founded four e-commerce and marketing infrastructure companies that were acquired by Sun, VMware, Webtrends and TigerLogic. You can follow him at @peteryared.

VB Mobile SummitVentureBeat is holding its second annual Mobile Summit this April 2-3 in Sausalito, Calif. The invitation-only event will debate the five key business and technology challenges facing the mobile industry today, and participants — 180 mobile executives, investors, and policymakers — will develop concrete, actionable solutions that will shape the future of the mobile industry. You can find out more at our Mobile Summit site.

Filed under: mobile

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