Tag: Facebook

Job Hunting? Reach Out and Touch Somebody

Posted on September 2, 2011

When it comes to job-hunting advice, look no further than the past. A recent Wall Street Journal story profiled several depression-era job seekers who found work the old-fashioned way: by forging personal connections. Some went looking door-to-door; others asked neighbors for job leads or had friends and relatives advocate on their behalf for open positions. 

Showing up at offices unannounced with a resume in hand would probably not fly in this age of electronic communication and lowered face-to-face interaction, and most applicants are careful to heed the “no phone calls” addendum on nearly every job posting. Still, there is something to be said for maintaining — or forging — personal connections that might give one job seeker the edge over another, less visible “virtual” applicant.

That may seem obvious, but the Journal story cites a Brookings Institution paper which found that “today’s job seekers devote little time to their networks: Only 9% of their job search is spent contacting friends and relatives to find work, while 51% is devoted to finding ads and sending out applications.”

“It is certainly the case that personal connections play a huge role in finding jobs,” says Wharton management professor Matthew Bidwell. “A classic study in the 1970s concluded that over half of professional and technical workers had found employment through personal connections. We recently surveyed Wharton MBA alumni and [learned] that when they moved jobs after graduation, around 50% of those jobs were [landed] through personal contacts.”

The Journal story points out that those connections often entail social networking tools such as Twitter and Facebook — today’s version of going door to door, only faster. “Social networking tools can help by providing a way for information to move quickly through people’s networks,” says Bidwell. “A friend of mine found her job after her sister saw a request for potential hires that someone posted on Facebook. Because people update their status regularly, sites like LinkedIn can provide an easy way to check which of your friends are in positions where they might be able to help. Indeed, LinkedIn markets itself substantially as a resource for looking for jobs and for hiring.” That said, Bidwell adds, “it remains an open question whether the ease of contacting people over these sites limits the sense of obligation people have to their contacts, or makes people less ready to help them.”

Job seekers also should not underestimate the power of their connections to get them in the door of a company that might not hire them otherwise. “Most research on hiring suggests that employee referrals are taken very seriously,” Bidwell notes. “The big problem that employers face is learning how good candidates really are. Sure, they have the resume, but it tells them little about the intangible characteristics that they really care about, such as attitude, ability to work with others, etc. Recommendations from previous employers are supposed to help provide this information, but given concerns about litigation, those recommendations are often hard to obtain and even harder to trust. Against this background, employers are likely to take employee recommendations seriously.”

And, because employees will often have to work with the new hire, they are likely to be careful about whom they recommend, Bidwell adds. “That gives employers more confidence in what [these employees] say.”

 

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Will Google+ Help the Search Giant Succeed at Social Networking?

Posted on July 1, 2011

With this week’s “invitation-only” launch of Google+, the search giant unleashed its latest attempt to stake a claim in the social networking space. But can Google successfully take on Facebook?

Critics point to Google’s underwhelming experiences with previous social networking applications, including Buzz and Orkut, as examples of the company’s inability to accurately assess market needs and respond effectively. But others point to Google’s deep pockets, previous successes in search and strengthening Android mobile platform as reason to believe the company can make an impact in the social media sector as well. Google+ also has the advantage of learning from Facebook’s shortcomings — for example, the new service allows users to be selective about which information is shared with different groups of followers.

“Just because it is Google doesn’t mean that [Google+] will have instantaneous success,” says Wharton marketing professor David Reibstein. He points to some of Google’s previous failures, including Google Wave, which was intended to take on Microsoft Outlook and instant messaging services by offering a mix between chat and email. Then there was Google Buzz, which was seen as an attempt to go after Twitter and Facebook. Reibstein says those misses came because Google did not fully understand “what all is involved in those businesses … basically, not understanding the customer well enough.”

Kartik Hosanagar, a Wharton professor of operations and information management feels differently. ”Google’s advantage is that it has a lot of cash and it can afford to build, learn, fail and restart,” he notes. “Clearly, Orkut and Buzz have not worked out as well as planned. But Google can afford to restart. More importantly, as a late entrant, Google+ has the advantage of learning from Facebook’s mistakes and delivering a product without those deficiencies.” Hosanagar says that the biggest user frustrations with Facebook have revolved around privacy concerns and contacts management. “Google+ is specifically focused on fixing these issues.”

Features of Google+ include the ability to create groups or “circles” of contacts, such as circles for friends, family and acquaintances; users can choose what  information and updates they share with each circle. In addition, Google+ offers video chat and group-texting applications, and allows users to instantly upload photos and videos from Android smartphones. The service also has a “+1” button that is similar to Facebook’s “Like” feature. (For more, CBS has compiled a roundup of Google+ reviews from across the web.)

But Google is moving forward cautiously with its latest effort. Vic Gundotra, a Google senior vice president, told the Wall Street Journal that “fundamentally we believe online sharing is broken.” He continued, “We’re not going to nail it on our first attempt, but we’ll work as long as it takes.”

Google, of course, seems to have a penchant for launching beta products. Soon after opening the invitational rollout for Google+, it temporarily discontinued new registrations, citing “insane demand.”

According to Reibstein, Facebook “ought to be able to very easily respond” to the Google+ “circle” feature, if not others. “The question is how sustainable is any advantage coming out of Google+, which means something not easily replicable.” He adds that with its video chat capabilities, Google+ may deliver a strong challenge to Internet phone service Skype, a possibility also noted by Om Malik, founder and senior writer for technology trends site GigaOm.

“Google has to play to its strengths — that is, tap into its DNA of being an engineering-driven culture that can leverage its immense infrastructure,” Malik wrote. “It needs to look at Android and see if it can build a layer of services that get to the very essence of social experience: communication.” He predicts that Facebook is safe for now, arguing that “the only way to beat Facebook is through a thousand cuts.”

During a discussion on social media at last week’s Wharton Global Alumni Forum in San Francisco, panelists were asked why Google has had such difficulty in developing a social networking application with staying power. Panelist Ethan Beard, Facebook’s director of platform partnerships and former director of social media and head of new business development at Google, noted that the companies have two distinct cultures.

“There’s a fundamental difference [between Google and Facebook] in how the products are designed and in how the design process takes place,” Beard said. “Google is very academic…. Some of the greatest thinkers in computer science now work at Google. The design process … is focused on building a really cool back end that sifts through the data and pops out the result.”

On the other hand, Beard described Facebook as having more of a “hacker culture,” in the sense that “instead of working on the back end and throwing up any front end, we start with the designers and say, ‘What if a user saw this [on the front end]?’ and then ‘OK, that’s good, now go build the back end as fast as you can so we can start to play with it.’”

Cultural challenges aside, Hosanagar is optimistic about the prospects of Google+. “There’s nothing in Google’s DNA that prevents it from building a good social product,” says Hosanagar. “Given how big the social space is, and how much bigger it will be, Google is doing the right thing by trying for a third time.”

In the end, much depends on how many “+1s” Google+ gets from users. “Whether Google+ will stick will depend to some extent on the whims and fancies of unpredictable consumers,” Hosanagar notes. But Reibstein says the imponderables lie elsewhere: “I am not at all confident [Google] has a real feel for understanding what the marketplace needs.”

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For Apple’s iCloud, the Sky’s the Limit

Posted on June 8, 2011

Apple’s iCloud begins a new era of cloud wars, in which companies like Amazon and Google vie for what may be a one-time, land-rush opportunity to attract new customers and cement their loyalty. Once a consumer stores their music, photos and other files with a service, it can create a high level of “stickiness.”

More directly, Apple’s move offers a compelling new level of convenience for gadget users. For those using strictly Apple products, at least, there will be no more relentless synchronizing of gadgets – smartphones, tablets, laptops – to keep music, photos, files and applications up to date on each. Since everything will simply sync wirelessly to a central server warehouse, updating one device becomes an instant update of every other device upon connection.

“It’s about time,” says Wharton marketing professor Peter Fader. Imagine if when you went to pick up your car at the repair shop the mechanic handed you a wrench and asked if you wouldn’t mind cranking on those last few bolts yourself. It’s almost as if we’ve been “brainwashed” into doing the tedious upkeep in synchronizing our electronic devices ourselves. Or, as Apple’s Steve Jobs put it in making the iCloud announcement: “Keeping these devices in sync is driving us crazy.”

For Fader, “This signals a whole new ballgame for everyone with a vested interest in music, ranging from Apple’s direct competitors — most notably Google and Amazon — to up-and-comers such as Pandora and Spotify.”

Apple’s announcement Monday came a few weeks after Amazon announced its new Cloud Drive and Cloud Player, which allow customers to store music and other content remotely on Amazon’s servers. In early May, Google launched its own cloud music-management service called Music Beta. Like Amazon and Apple, Google wants to manage music libraries and deliver them through the cloud. Many observers expect Facebook to jump into the market, too.

There is one big difference with Apple’s service, however: Consumers can “match” their entire music collection via the Internet with Apple’s catalogue of more than 18 million songs. iTunes Match will scan every song in users’ libraries and match them with an Apple duplicate copy already stored on Apple’s servers (in the cloud). That eliminates the need to tediously upload a whole music collection, often song by song. Apple alone can do this because of existing agreements with four major record labels. Apple will charge users $24.99 per year for the service, and the record companies earn 70% of that fee.

Some analysts point out that by distributing those revenues to recording companies, Apple in effect will allow them to recoup some fees for songs that had been copied or shared illegally among users.

“It will be fascinating to see how all of these firms will start changing their strategies and tactics to compete in the cloud, but the clear winner is the consumer – who will have a far better music consumption experience than ever before,” Fader says.

The move by Apple comes at a time when increasing attention is being devoted to the cloud by corporations that also want to simplify the process of endlessly updating applications that reside on computers and other devices. One of the biggest challenges in that effort involves security.

For more information on the future of remote music storage and players, including insight into the Amazon and Google strategies, see this Knowledge@Wharton story: With Its New Music Storage and Player, Can Amazon Deliver in the Cloud?

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Red Flags over Groupon?

Posted on June 3, 2011

On the heels of LinkedIn’s stunning debut on the stock market last month, Groupon — the popular group buying site — has thrown its hat into the tech-valuation ring by officially filing for an IPO on Thursday. According to the Wall Street Journal, the deal “could value the e-commerce company at as much as $20 billion” as well as “test the strength of a tech-investing frenzy.”

Last year, Forbes called Groupon “the fastest growing company ever.” Indeed, according to the Journal, the company’s revenues grew from $30.47 million in 2009 to $713.4 million in 2010. Revenues for the first quarter of this year alone were $644.7 million. At the end of March, Groupon’s subscriber base reached 83.1 million — up from 152,203 in June 2009.

The Journal notes that there are some red flags for potential investors — particularly that “the company has been spending a fortune” to fuel its growth. (Recorded losses were $413.4 million last year.) Meanwhile, some heavyweight competitors — notably Google and Facebook — are entering the group buying space, which clouds the company’s future.

In a recent interview with Knowledge@Wharton, marketing professor David Reibstein said that the group buying site business model itself is flawed and will ultimately leave customers and suppliers disenchanted — and it could bring ruin to investors.

Given the pitfalls, is Groupon’s IPO merely one in a series of pile-on filings from tech companies hoping to match LinkedIn’s success? (Internet radio company Pandora and online real estate evaluator Zillow both filed earlier this year as well.) According to Wharton marketing professor David Hsu, “I do think that firms pay attention to market sentiment in order to try to capitalize on the appetite for new listings. Coming off a cold IPO market over the last few years, private firms may be eager to try to tap the public markets in response to recent signals such as the LinkedIn IPO.”

Still, Hsu says, Groupon’s IPO makes sense in terms of timing — for marketing and corporate development reasons. “My perception is that the company is eager to raise public funds in order to extend its lead against the plethora of competitors in the daily deal space. In addition to funding [Groupon's] rapid growth in sales and marketing efforts, I suspect that the company is trying to develop offerings which will provide additional value to consumers and merchants. For example, the Groupon Now product, which is a mobile platform for offering on-the-fly deals, would seem to be a capital-intensive development effort, but one which might be important in keeping ahead of competitors.” He adds that international markets would be a natural place for the company to extend its efforts as well.

Although no date has been set for the IPO, all eyes are sure to be on Groupon both during and after its debut on the market. Adding fuel to the speculation that we are witnessing a new tech bubble, LinkedIn’s shares have already dropped about 18% since their initial closing price.

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All About LinkedIn

Posted on May 20, 2011

LinkedIn, the social networking site for professionals, made a stunning debut on the stock market on Thursday, when its shares more than doubled in price — from an initial public offering of $45 to a closing price of $94.25. It was the largest U.S. Internet IPO since Google debuted in 2004, when the company raised $1.67 billion.

According to the Wall Street Journal, LinkedIn’s valuation by the end of Thursday was $8.9 billion — a figure that some analysts believe is far too inflated for a company that made $243 million in revenues last year. Forbes columnist Eric Savitz points out that at one point during its opening day, LinkedIn’s shares were trading at 41 times the firm’s 2010 revenues. If Apple’s shares were trading at the same level, for example, it would be valued at $2.7 trillion, Savitz notes.

What’s behind LinkedIn’s skyrocketing value? According to Wharton management professor David Hsu, the run-up reflects “optimism about the scalability and value of the company’s business model,” but also the “scarce public access to investing in this category.” He adds that “this is great news” for Facebook, Twitter and others, “from the standpoint of understanding demand for these elite social media companies and associated valuations.”

Wharton finance professor Luke Taylor agrees. “For a long time, no one has really known how much these social media companies are really worth. The secondary markets have given us some noisy signals, but they’re just that. The market has finally told us how much LinkedIn is worth, which tells us something about how much similar companies like Facebook and Twitter are worth…. I’ll speculate that this news will make their IPOs happen sooner and happen bigger.”

In fact, Taylor notes, LinkedIn’s IPO must have surprised even its underwriters, who likely didn’t foresee the level of investor interest and therefore didn’t price the IPO as aggressively as they could have. By not pricing the stock at, say, $85 a share, instead of $45, “the underwriters ended up leaving roughly $300 million on the table during the IPO. Is that a lot of money for LinkedIn? Well, it’s more than LinkedIn’s revenue last year. However, if the company is currently worth $10 billion, then $300 million is just 3% of the company’s value.” One overriding benefit of the IPO, he adds “is that it brought LinkedIn lots of media hype, which may help them win more customers.”

Many analysts fear that LinkedIn’s current valuation is a sure sign that a second tech bubble is emerging, but Taylor doubts that is true. “It’s hard to know whether there is a bubble, even after the fact. I’m still not convinced there was a bubble in 2000.” According to Hsu, however, “a lot hinges on whether these [numbers] truly reflect the value that these companies have or will create. In the case of LinkedIn, for example, will labor and employment markets become more efficient in ways which would not otherwise take place in the absence of the company? And is the company well positioned to capture that value it has created? Time will tell.”

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Let’s Make a (Facebook) Deal

Posted on April 28, 2011

With the introduction earlier this week of Deals on Facebook, the social networking behemoth is bringing its extensive user base and powerful framework to the group buying sector. But can it conquer Groupon?

Deals on Facebook, which is initially launching in the San Francisco, San Diego, Atlanta, Austin and Dallas areas, has the “bargain of the day” format familiar to any veteran of group buying sites. The company is trying to differentiate itself by focusing on “interesting experiences around you to do with friends,” Emily White, director of local at Facebook, wrote in a blog post. For example, Texas music venue Austin City Limits Live is offering vouchers that include concert tickets, backstage passes, sound check access and a catered dinner.

Since launching in 2008, Groupon’s growth has skyrocketed. When Google made an ultimately unsuccessful bid to buy the company in December, experts placed its value at $6 billion. By March, Bloomberg had upped the IPO price tag to $25 billion.

Perhaps more impressive than those figures, however, is the sheer number of Groupon competitors that have proliferated. The boom in group buying has spread to India and Latin America. After failing to buy the site, Google started a group buying service of its own. So have many media companies, such as AOL and Cox Media Group. That’s in addition to dozens of standalone sites including LivingSocial (The Huffington Post has a slideshow of some of the more obscure players.)

In a Knowledge@Wharton story on group buying, Wharton information and operations management professor Kartik Hosanagar cited brand name and reputation as key to standing out in a sea of copycats. Businesses will want to partner with the site that will get their name out to the greatest number of consumers; consumers, in turn, will pick the site with the best and most diverse deals. “Groupon has a significant head start there,” he said. “The others are going to struggle with the issue of very few differentiators.”

Facebook comes into the game with familiarity and a convenience factor. The site’s millions of users are accustomed to using it for anything and everything, including staying in touch with friends, planning events, selling used cars or furniture and making recommendations about products, services and content.

But Facebook also faces the same long-term challenges as Groupon, including personalizing the deals in line with individual consumer preferences. “If customers are flooded with e-mails from group buying sites and private sales sites, they key question is which ones they will bother to read,” Hosanagar noted.

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Can Hoover Give Soap Operas Another Life to Live?

Posted on April 21, 2011

Back in the days of radio, daytime dramas were called soap operas because of the household goods promoted on the shows. Procter & Gamble, Pillsbury and General Foods were happy to feature their products alongside the daily travails of Helen Trent, Ma Perkins and the Bauers of The Guiding Light because they knew that legions of housewives were listening.

Fast forward 70 years and we live in an era with more women working, a seemingly endless buffet of television choices and far fewer soap operas. In 1940, serialized daytime dramas made up 90% of all commercially-sponsored daytime broadcast hours, according to the Museum of Broadcast Communications. Today, American soap operas number at six and are dwindling following last week’s announcement that ABC will end All My Children in September and One Life to Live in January in favor of airing cheaper-to-produce lifestyle programs.

There are plenty of people out there who grew up watching All My Children and One Life to Live, and plenty of now-adult young girls (and boys) who spent their allowance money on contraband copies of Soap Opera Digest and skipped college classes to watch Luke and Laura get married on General Hospital. But most would be the first to admit that they don’t watch much anymore. They grew up, and life got more complicated. Maybe they kicked the habit when O.J. Simpson’s murder trial preempted the soaps in 1994 and 1995. The Chicago Tribune reported that soap operas routinely attracted more than five million viewers per episode in 1996; today, only The Young and the Restless draws that kind of audience.

Despite those smaller numbers, there was still a sizable impact earlier this week when Hoover marketing vice president Brian Kirkendall — whose mother and wife are diehard All My Children and One Life to Live fans — announced in a Facebook note that the vacuum company would pull its advertising from ABC in protest starting tomorrow. And the company didn’t stop there — Hoover also set up a dedicated e-mail address where fans could make their case for a change of heart by ABC and promised to send those letters to the television network.

Will it work? Probably not, at least not on its own (see this K@W story for more on the effectiveness of boycotts). But Hoover won the hearts of millions of soap fans who are targeting everyone from advertisers to Oprah (and her fledgling cable channel) in an effort to save their shows. “It’s all about brand awareness, particularly with their target customers, who are women,” notes Wharton marketing professor Deborah Small. “Think about it — the company is supporting this cause and it’s something [fans] care deeply about, something that is personally very important to them…. That’s going to have some positive effect.”

So far, Kirkendall’s original Facebook post has drawn more than 700 “likes” and hundreds more messages thanking Hoover for taking a stand and pledging loyalty in return. Carolyn Hinsey, a columnist for Soap Opera Digest, even wrote a blog post asking fans to declare tomorrow “Buy a Hoover Day.” (For anyone considering actually doing so, Consumer Reports is highlighting its annual product rankings for vacuums.)

 

And Hoover may not be taking as much of a hit from this move as some might think. Advertising Age‘s Brian Steinberg notes that the vacuum company’s overall ad spending on ABC is relatively small, around $353,000 in 2010. He also argues that pulling the advertising dollars that support the programs is not the most effective way to keep them on air.

What would keep soap operas on TV? In a blog post for Fast Company, Sam Ford, co-author of the book, The Survival of Soap Opera, says advertisers, networks and producers have created a self-fulfilling prophecy for the genre by declaring it dead and irrelevant, rather than collaborating to create a long-term plan for its viability. Financial Times media editor Andrew Edgecliffe-Johnson likens soap operas to other orphan brands abandoned by the consumer products companies that once depended on serialized dramas to make them household names. “In television terms, this means that shows that no longer pay their way on broadcast networks could profitably anchor a cable channel’s daytime line-up, with its dual revenue streams of advertising and cable system fees,” Edgecliffe-Johnson writes. “The Discovery-backed Oprah Winfrey Network, after a sluggish start, could be an ideal home for another daytime TV exile.”

In reality, this is a problem that all content creators, from television networks to newspapers, are struggling with: How do you keep old media viable in the eyes of consumers — and earn enough money to pay for it — in a new media world? That’s one soap opera that is not in danger of cancellation anytime soon.

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Google’s Shake Up: Why Now?

Posted on January 21, 2011

Search “Google” today and you will come up with wide-ranging coverage and speculation concerning the Internet giant’s decision to name company co-founder Larry Page as its new CEO, replacing the firm’s current chief executive, Eric Schmidt.

Schmidt, who will become the company’s executive chairman, said in a post on Google’s blog that the decision to restructure is based on the increasingly complex nature of managing the company’s growth. According to an article in The Wall Street Journal, Google said that it aims to “streamline decision making and create clearer lines of responsibility and accountability.”

Official accounts aside, however, observers are speculating about the motives behind what the Journal calls “the biggest management shake-up since the Internet search giant was an obscure California start-up.” While some cite an increasingly tense relationship between Page and Schmidt, others note that recent failed acquisitions — such as Google’s attempt to purchase group buying site Groupon — and growing competition from social networking site Facebook are signs that the company is ripe for change. In fact, Facebook presents a particularly pressing challenge: According to Internet analytics firm Hitwise, the social networking site usurped Google’s position as the most-visited site in the U.S. in 2010.

According to Wharton operations and information management professor Eric Clemons, “there is a perception on the street that Schmidt has been more of a care taker/administrator than a visionary leader.” He notes that this particular assessment is not necessarily “fair,” given the experiments in search the company has undertaken during Schmidt’s tenure, and other advances, including Google’s expansion into Japan and the successful promotion of its Android operating system.

However, he agrees that Google is facing particular threats. “There is some danger that Google’s ‘don’t be evil’ image is going to collapse, some danger that search will be regulated, and some danger that Facebook will be the next player in search.” He adds that although search “will never lose its dominance” on the web, a site like Facebook — or perhaps Facebook combined with Microsoft’s Bing — could make paid search obsolete with “a better form of social search.”

What, then, should Page focus on when he takes over as CEO in April? According to Clemons, “Control the cowboys…. Google’s behavior was cute when it was a tiny company headed by a group of committed techies; it’s now increasingly seen as rapacious and dangerous, defensive and monopolistic. Set some limits on corporate behavior, truly stop accepting evil and do so before regulators in the E.U. and the U.S. come down really hard.”

According to the Journal, Schmidt tweeted the following after the changes in leadership were announced: “Day-to-day adult supervision no longer needed!”

“The boys are back in charge, this time with a much more powerful toy,” Clemons says. “Anything goes. Be afraid, be very afraid.”

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