CMO Survey Shows Market...

Every year the CMO Survey is produced by Christine Moorman who is the Director of The CMO Survey and the T. Austin Finch, Sr. Professor of Business Administration, The Fuqua School of Business, Duke University. I put the credentials at the top of this post to indicate that this information is coming from one of the most respected business schools in the world. This hopefully keeps the likelihood of “research as PR syndrome” to a minimum. That said, the February 2012 CMO Survey (which you can get here in PDF form without filling out anything) is pretty fascinating. It shows that CMO’s are optimistic about the economy while also showing that it is important to break down this analysis into 4 sectors of B2B and B2C Products or Services to truly see who is the happiest of the bunch (spoiler alert: it’s B2B marketers). Budgets are increasing although there is a bit of a drop from the numbers of last August. What is interesting is that despite this increase in budgets there is not a rush to hire additional staff. One note to consider is that with the phasing out of more traditional marketing elements the need for digital specialists is there but CMO’s could be looking for existing employees to pick up the digital skills because they have something that most young new hires will not which is industry and particular company experience. That’s valuable. Here is the data on hiring. As you can see, outside of B2B services there is a considerable drop in hiring planned from the August 2011 survey. The survey is very comprehensive (I do recommend you take a closer look because there is a ton of insight in the survey as a whole) and does a great job of showing the view of the marketing world from the top seat in larger companies. Does this data translate to the smaller companies that make up the vast majority of businesses in the US? That’s something that only those businesses and their stakeholders can answer. What are your thoughts?

So Much For Bouncer: Ne...

Even though Google recently introduced a malware-blocking system called Bouncer to keep the Android Market safe from malicious software, crafty spammers and fraudsters are still managing to find ways around the restrictions to get their software onto users’ phones. The latest example? A malware program disguised, innocuously, as an Android app called “any_name.apk.” And it appears the malware is using Facebook’s app on Android phones in order to spread. The software was discovered by security firm  Sophos , which came across the malware after receiving a Facebook friend request. When checking out the user’s profile, the researcher, Vanja Svajcer, found a link posted to the requester’s Facebook profile page that, when clicked, directed the browser to a webpage which started an automatic download of an unknown software application to the device. The software installed and downloaded immediately, without any request for authorization or input from the end user. However, although Svajcer doesn’t mention this in his analysis, for software to automatically install from outside the Google Android Market, the phone’s default settings must have been changed. Typically, Android phones are shipped with a setting switched on that prevents mobile apps from installing from sources besides the official Android Market. Many savvy Android users switch this setting off, though, because they enjoy the freedom that Android provides in discovering apps from alternative app stores and download locations – like the treasure trove that is the XDA Developers forum , for example. Unfortunately, malware like this is the nasty side effect. And there’s nothing Bouncer can do about it. The link the researcher clicked did not appear to be an APK file by nature of its URL, just a typical website. And it was placed into the user’s About Me section on Facebook, as if it was a link to that person’s homepage. Of course, many folks would simply ignore a friend request from someone they didn’t know, but curiosity often gets the better of us. ( Do I know them? Did we meet at some point, and I forgot?) One errant click, and oops, you’re infected. In this particular case, the malware in question appears to be a program designed to earn money for fraudsters through premium rate phone services, a scam popular outside the U.S. for the most part, which involves having unsuspecting users send out text messages to premium rate numbers (those that charge). The scammers, who are operating the numbers, end up collecting the money from the victims’ accounts. The app attempts to associate itself with the Opera browser, and an encrypted configuration file contains the dialing codes for all the supported countries where the premium rate numbers are hosted. As a side note: a few days later, the researcher visited the same URL, but was directed to an all-new website where another APK file was automatically downloaded (hilariously called “allnew.apk”). This one was functionally similar, but different on the binary level, indicating it was a new variant of the same malware. Maybe it’s time for Android’s Bouncer guy to get pre-installed on handsets, too?

CrunchBase: Social, Mob...

In case it wasn’t already clear to you that later-stage social, mobile and deal-oriented companies led venture fundraising last year, here’s some analysis of CrunchBase data that drives the point home, courtesy of Alexey Tolkachiov at BuzzSparks.org . 421 Companies with the “social” tag in CrunchBase raised a total of $5.2 billion over the year. Out of this, Facebook alone was $1.5 billion; out of the 1,941 companies that were included in this analysis, Facebook alone raised 7.3% of the $20.5 billion total. A few other social companies, including Twitter, Zynga, LivingSocial, Kabam, along with Chinese sites 55tuan and Lashou, count for another $2.29 billion. We’ll see how this category looks in 2012 — that is, look for a drop in private funding considering that so many of the leading companies in the category have already raised late-stage capital. But wait, aren’t some of these companies not only social but also deals sites, or game developers? Yes, and this analysis in some cases double-counts ones that could fit in more than one category. The goal in doing so is to show how companies that are in multiple areas area impacting each of those areas. In any case, this type of categorization problem exists with any such data set; share your recommendations for how to make this clearer in the comments. And click on the categories in the graphic above to see each of the companies included. Moving along… “Mobile” comes in second, with 393 companies raising a total of $2.3 billion. The fundings are relatively less concentrated at the top — InMobi, Square and Rearden Commerce all raised above $100 million, but that’s it. The third-largest category, Deals, is even more unbalanced than social. Groupon alone makes up more than half of the $1.9 billion total. Mouse over the dots below to see the number of companies and total funding for all the various tags we have in the system. Finally, the caveat you’ve all been waiting for. CrunchBase is a wiki-style database about startups, and while it seeks to be complete as possible, the data tends to skew towards Silicon Valley web companies. It’s also the largest free site of its kind, and worth analyzing despite any imperfections. In fact, you can help improve it by adding and editing entries about you and your company or venture firm.

How Facebook Really Sta...

Now that Facebook is preparing the biggest tech IPO in history, it is possible to compare its financials and potential market value to Google’s when it went public. At first glance, all of Facebook’s numbers look bigger. Its pre-IPO revenues of $3.7 billion in 2011 are more than two and a half times larger than Google’s 2003 revenues of $1.5 billion (Google’s IPO was in 2004). Facebook’s $1 billion in profits is ten times larger than Google’s pre-IPO profits of $106 million. And its expected market cap of between $85 billion and $100 billion will dwarf Google’s IPO market cap of $23 billion. Facebook, no doubt, will be emphasizing these differences. But in many ways it is a false comparison. Facebook is going public after 8 years as a private company. Google went public much earlier in its development, after 5 full years. So, yes, Facebook at Year 8 is much bigger than Google was at Year 5 of its trajectory. A better way to see how the two companies stack up is to compare their revenues and profits at the same points in their histories. In 2008, Facebook’s fifth year of existence, its revenues were only $272 million, and it lost $56 million. If you chart Facebook’s revenues for the past five years and compare them to Google’s for the five-year period preceding its IPO (see below), a truer picture emerges of each company’s size at similar points in time. You need to compare Facebook as a 5-year-old to Google as a 5-year-old. Matching both companies year-for-year, its is clear that Google grew faster and was always substantially bigger no matter what year you look at. Year 8 for Google was 2006, when its revenues were $10.6 billion and its profits were $3.5 billion. As an 8-year-old, Google’s profits were almost as large as Facebook’s revenues as an 8-year-old. (Google was incorporated in September, 1998, so I am using 1999 as Year 1 for the purposes of this analysis. Facebook started in January, 2004, which I am counting as it’s first full year). But which company grew faster? It turns out that the 5-year compound annual growth rate for each one’s revenues during these comparable periods (2002-2006 for Google, and 2007-2011 for Facebook) was almost exactly the same: 89 percent a year (Facebook grew a smidgen faster at 89.22 percent a year versus 88.96 percent for Google, but Google started with almost twice the revenue and thus ended up much larger five years later). Facebook’s growth is astounding, but it is important to keep it in perspective. In many ways, it is still trying to catch up to Google’s past.

Analyst: All These Conc...

So, there’s been some hubbub around Electronic Arts over the last few days, as the company ramps up for the release of its third quarter earnings on February 1st. Yesterday, EA’s stock closed at $17.54 per share, which, in context, meant that the gaming goliath’s stock was down 30 percent since hitting its 52-week high in early November. This drop was mostly due to the collective shock relating to the news concerning its recently released title, Star Wars: The Old Republic , which now has a ridiculous price tag attached to it — as Wall Street is estimating the cost to be between $150 and $200 million. EA’s studio responsible for creating the much-touted online game, BioWare, spent some six-odd years developing Star Wars, and obviously there are concerns over whether or not the game will be able to satisfy the geeky desires and high expectations of both Star Wars fans and the avid World of Warcraft-playing, MMO gaming fans — especially as they’ll need to sell millions. Not always an easy audience to satisfy, but an eager and quick-to-spend audience if the game meets expectations — as the LA Times points out . (Though Trion has been having some serious success in this arena — see our post from yesterday .) Some are saying that it could be the most expensive online game in history, and at $60 a pop, obviously there are those concerned that the deficit will be too great. However, analysts at Macquerie Equities Research today said that they believe initial sales of Star Wars will still be relatively good, and are still on track to hit their target of 1.5 million. It also helps that the costs were already absorbed into EAs financials. Macquerie said that how the stock will perform will be largely affected by Star Wars’ sales, but if sales get close to their projection of 1.5 million, the firm expects the stock to make a bounce-back. While some are saying that, because EA hasn’t announced sales numbers yet, the likelihood is that sales have been not-so-good. Instead, EA has only said that it’s in a “quiet period” and will not be commenting as a result. Fair enough. Others have said that the analysis of the game’s server loads show that there isn’t as much activity, but Macquerie would like to remind those people that it’s not easy to make accurate estimates of the numbers of users based on server loads — especially without knowledge of how they’re allocating server loads. Glitches and mechanical problems have also been mentioned as influencing poor sales and low excitement, but, again, Macquerie defends EA, saying that, while this could affect the long-term outlook for the game, these kinds of problems are expected at initial release, and may not have as big of an affect as some might believe. Thus, Macquerie isn’t having any of this nay-saying, and is expecting EA’s stock to outperform — and be on the rise. The game will need about 500,000 subscribers to get close to even, and, of course, the other side is that, they could be way ahead of the ball, and if they were to get several million, well than what one analyst called “the single largest bet” of the EA CEO’s career might just turn out to be an enormous, money-raining win. What do you think?