Nokia - Skype: Jinxed as partners?

The MWC (Mobile world Congress) was a spectacle this year as well (as every year!). The Mobile world had a sneak peek into New Technologies, new devices, new services and new partnerships happening around.

One of the most promising partnerships annpounced was that of Nokia and Skype.According to this partnerships, Nokia would integrate the Skype VoIP software with its N Series flagship N 97 on the S 60 platform for its consumers in Q3,2009. This would enable consumers to sync their phone address book with their Skype contacts and make calls over VoIP to them. A computer call would be free and users will pay Skype for voice calls to Cell phones or landlines. Skype as an application is free for download to cell phones. However it would require a 3G service or a Wi Fi zone to allow this service better.

This is a classic case of convergence media being offered to consumers (who now have a choice of making a call through their cellular operator as well as VoIP). Skype is the biggest beneficiary of this partnership as it piggy backs Nokia's reach in geographies where the lap top will take some more time to estanblish itself. Thus Skype, Internet and VoIP will leap frog emergence of lap tops to tap into the VoIP technology.

However there is an unexpected backlash from UK operators, O2 and Orange who obviously view this partnership and the technology ofered being disruptive in nature. The sources cited state that the partnership of Nokia and Skype would wrest away control of their consumers by offering easy access to an application that could hurt their call revenues.

To quote verbatim:

Mobiletoday.co.uk’s source said to them that this was yet “another example of [Nokia] trying to build an ecosystem that is all about Nokia and reduces the operator to a dumb pipe…But if you spend upwards of £40 million per year building your brand, you don’t want to be just a dumb pipe do you?” The source added, “Nokia have tried several ways to own the customer over the years and operators have had to say no.”

The adjectives to describe the operator outrage are "furious" and "venting their anger" amongst others. Operators have also stated that they wouldnot stock up Nokia devices if Nokia doesnot strip the application. Thus we have an interesting situation out here, since Nokia wouldnot want to walk back on its MWC partnership with Skype for fear of a loss of face. However inability to do so, may jinx the N 97, a device where Nokia is betting a lot to fight back on the smartphone platform. It doesnot have a US carrier for N 97. Not having a UK carrier could be worse for them. It needs the operators to subsidize the N 97 for the smartphone users. We may see Nokia walking back on the Skype partnership after all, at the end of it.

PS: One would remember Nokia's earlier attempts at trying to have a eco system of consumers all for itself without sharing it with its eco systems partners. An earlier example was the Comes with Music service which it started short circuiting the operators (who also saw this as a competition to their own music stores).

Social Networks on Mobile

Mark Zuckerberg, founder CEO of Facebook has gone on accord saying that 2009 will be "serious business". This was in reference to the oft asked question: How will the social networking sites monetize their traffic? ( I plan to cover that topic squarely in one of the Facebook posts). Therefore it was only time before entry into the mobile platforms were considered as the next big thing given that mobile advertisement market was worth $2.8 billion in 2008.

The latest in the context of entry to mobile ads market space is the entry of Facebook following Google and Bebo (read report here http://www.indiantelevision.com/headlines/y2k9/feb/feb69.php). The entry of these heavyweights into the mobile advertisement space significantly alters the battle scene, which was so longer dominated by smaller and local companies. It makes sense for Facebook to enter the mobile adspace because surveys have proven that a significant portion of Facebook users access the website through their mobiles. This is validated by Jon S. von Tetzchner CEO, Opera Software in his web report http://www.opera.com/smw/2008/12/.

Thus Facebook is seriously considering a tie up with Nokia to include Facebook features in its devices. Nokia on the other hand is also considering options in its own mobile social networking service. Facebook's alliance with Nokia at this point oif time would include allowing users to merge their phone contacts with their Facebook friends and combining Facebook profile pictures with users’ address books and a whole host of features including photo and video upload options are also being considered. If this partnership works out, Facebook will have widgets on Nokia mobiles linking users to Facebook. This is the third mobile major after RIM and Apple, where Facebook features in Mobile aps. Facebook is also in talks with Motorola and Palm to integrate Facebook into its suit of services.

Indian Telecom Story (Part VI): What downturn? The party continues...

TRAI's report  dated 20th February 2009 has the following updates on the Indian Telecom market.

• Subscribers base crosses 400 million
  
• 15.41 million wireless subscribers added in January 2009
  
• 5.65 million subscribers in Broadband segment
  
• Teledensity reaches 34.50% mark!
  

Interestingly, 15.41 million new mobile subscribers takes the mobile connectivity number to 362.30 million. Comin on the back of a downturn and economic meltdown, the subscriber additions dont show any slow down as they beat the sub-adds in December 2008 (10.81 Million) by almost 50%. While the stock indices ove

r the world are flatering, here is one index that is still going and growing strong. Broadband penetration statistics pale in comparison as it registered an increase of .2 million over a December base of 5.45 million in January (3.6% growth).

The other significant bit in here is the launch of Reliance GSM services.  http://technologyandtelecom.blogspot.com/2009/02/ada-reliance-telecom-exercising-muscle.html. 

The link in here is an earlier post on how the competitive scene was heating up between Reliance and Bharti with the launch of Reliance GSM services in the country. Reliance muscled its way in January 2009 adding 4.95 million subscribers compared to Bharti Airtel's 2.73 million subscriber additions and Vodafone's 2.4 million subscriber additions. Certainly Reliance got a super start and has got it 4.95 million subscribers into its network in the first month of operation. At this rate, Reliance will beat Vodafone's no 2 market share position by March 2009. There is no surprise that Airtel feels threatened!

Already there is a renewed push to register more and more users into the Post paid services. (By Vodafone). The idea here is by reducing call, SMS, data browsing, VAS and STD charges on Post Paid, customers are lured to Post paid connections which is supposed more sticky and loyal than the Pre Paid option.

It is going to be an interesting battle for the top honours in Indian Telecom market. Watch this space.

Profiling Facebook: The Google of Social networking (Part I)

I intended a study on Facebook to be a one blog post initially. However, the literature, reserach and comments on the subject is staggering and hence i feel compelled to give more than one post. Here is the firt one on the phenomemon of social networking and profiling Facebook, the one company which has revolutionalized the power of social networking.

Facebook is accorded a status of being the second wunderkid of the web world. The first web wunderkid is Google!



Consider this:

• Barack Hussein Obama, used Facebook as a cornerstone for his path breaking presidential election last year.
  
• Dell is recruiting new hires from Facebook audience.
  
• Windows 7 "borrows" networking features from it.
  
• It is a 175 million users community..
  
• ...adding 5 million new users everyweek.
  
• If Facebook, were a country, it would be greater than the population of the whole of Brazil
  
• It edges out USs greatest sporting event Superbowl XLIII with a record 152 million eye balls
  
• One of the most addictive sites, users spend an average of 169 minutes per month (compare it with 13 minutes in Google news and 10 minutes in New York Times)
  
• The Maine democratic party uses it to organize regular meetings
  
• Ernst and Young uses this site to recruit new hires
  
• Sometime in October November 2008, Facebook edged past Myspace to become the largest networking site in US.
• In a 2006 survey conducted by student monitor, a New Jersey based company specializing in college student market, Facebook tied with Beer as the second most popular thing among undergraduates, ranked lower than iPod.

At the heart of the Facebook phenomenon is what is now being termed as Conversational marketing (Word of mouth marketing). The underlying insight is that consumers are more liley to trust a pitch from friends rather than paid commercials and other promotions from the company! Thus
Users become product promoters...

1. ..and are encouraged tp spread the word about things they buy and use --> thereby endorsing the product.
   

What Facebook has been successful in doing is blending E - Commerce with WOrd of mouth marketing for results which at this stage are more promising than anyother in the Web 2.0 space. While advertising online as we know it today may be a good profit engine for social networking companies, the FaceBook avatar of e-commerce selling is looked upon with some hope in terms of bringing results.

While a Amazon or a e-Bay uses a rating system to throw up results on relevant products basis current purchases, Face Book ratifies products by adding rating and recommendations from friends. They call this Social Graphs. Thus when a user buys something online through Facebook, Facebook will seek a permission for sharing the purchase with the user's social network, with a product endorsement by the current user. For instance is a user browses through New York Times editorial section using a Facebook application, Facebook prompts the user when he is leaving to rate his experience. Depending upon the users feedback, Facebook flashes a status update to the users social network saying "... has read the editorial in NYT and thinks it rocks! Check it out."

In terms of Online marketing, Facebook thus shifts the focus from ads to consumers to promte purchase (and earning revenues by the clicks on the ad widget) to making people endorse the products they buy and tell it to their friends (Facebook earns from the users endorsement of the company product).

To that effect this strategy has been voted to be one of the boldest moves on the internet!.

Apart from user endorsements, Facebook has three other sources of revenue:

1. Business pages: Where they host the company and its offerings for consumer/users of a particular profile. Thus it creates a platform for companies to talk to their ideal profile consumers and promote its product. A 100,000 of such hosted company profiles are found in Facebook at this point.

2. Social Ads: Ads targeted by user profile data! This source also hosts the Beacon which uses personal information of users (which they would like to share only with their network) for targeting marketing campaigns. There have been privacy concerns around the Beacon, which mined implicit data (which the consumer doesnot want to share with other outside his network). Google and others used Explicit data, which the user has voluntarily disclosed about himself to be used for marketing campaigns. Amidst outrages on privacy, Beacon was made an "opt in" service for users instead of being an "auto enrollment".

3. Insight: Facebook also has a data of usage metrics for advertisers (trends etc) and also sells data on targeting/focussing and clicks.

According to Facebook's own books of account, they value themselves at $3.7 Billion (June 23rd, 2008). However Microsoft, in 2007 bought 1.6% of Facebook stake at $240 million, thus giving Facebook a valuation of $15 Billion. It made $280 million in revenues in 2009 and is yet to break even.

Touch Phones: To be or not to be!

A mobile phone user survey by Reevoo, the online product comparison site, has "almost " damned the touch screen bally-hoo. In a survey that happened across 19000 respondents , they featured 226 handsets and the result that they have come out with defies the accepted standards, trends and beliefs in the devices market today. 5 out of the top 10 least popular phones are touch phones with big marquee names such as HTC Diamond, Samsung Armani, Blackberry Storm, Samsung Omnia being least in terms of popularity. Many of the phones have been drubbed on the basis of poor battery life, "nightmare" touch-screen interface, and virtual buttons that "aren't big enough for male fingers". A hit to Convergence as a upcoming principle, Web Browsing and E mail functionality are not that highly favoured by consumers!

On the other hand Nokia devices with its traditional 12 key pad gets a thumbs up by most users as Nokia swamps the most popular phones list! Style was the most important factor when choosing a phone (15.3 per cent), while size (14.1 per cent), a good camera (10.4 per cent) and decent music capabilities (7.7 per cent) make the 4 most important factors that influence the purchase!

The way it sees, there are a few vital take outs from here:

1. Many of the manufacturers have been inspired by the iPhone. But it is not all the hardware, for UI forms the bedrock for consumer experience which in this case has dulled out the sheen off a few marquees.

2. Users do take refuge in the tried and tested and that is why you will find all Nokias out there. They are not necessarily the best phones but the most reliable ones that consumers seem to prefer.

3. Convergence is still a mile away as people havent really gone infavour of the swanky, technology edge. So tech marketers have some work to do to make convergence mainstream!

4. Price of the handset is an important factor when people think of its utility and usefulness and value. That is probably why mid ranged handsets occur with regularity in the most popular list.

5. People also would probably like to have a reliable handset rather than a flashy one. Nothing otherwise puts in context, why Nokia scores so heavily while a few of the Big names failed so miserably.

Top 25 Social Networks: US

Compete.com put up the top honours for social networking sites in US sometime back. No one expected the result to to be anywhere different than featuring Facebook and MySpace at No.1 and No.2 ranks. Tweeter completes the top honours at No.3! A massive 1.1 Billion hits at Facebook with 68 million unique visitors does justice to the massiveness that Facebook is achieving. It has edged past myspace.com, last years no1.

The statistic doesnot just stop there, Facebook has also reported an exponential increase in sessions per monthly unique visitor!

Twitter, may be the one to watch next year, as it has galloped through to No 3 rank from a no.22 last year. The number on Twitter can be significantly higher especially because often it is browsed through third party applications where as the study is based on browser data.

Interestingly Orkut which was buzzing loud till some time back and is still the no 1 networking site in India doesnot feature in the top 20. This is probably because in terms of innovative applications, Orkut has not kept pace with the social networking scene. Do we see Google beginning to loose steam here as well?

Positioning: Still relevant in the digital age

http://www.contentsutra.com/entry/419-big-adda-to-break-even-in-3-years-says-rajesh-sawhney-president-relianc/

in 2008, ADAG backed Big Adda spend money on advertisement campaigns to get eyes balls. Not stopping at that they hosted Amitabh Bachchan's blog and ran promotions. The cost of all the spends on advertisements and promotions was about 5 crores. The other prominent spender in the social networking space in 2008 was iBiBo.com with its "Balti nahi Bolti" campaign.  The spends were budgeted at 60% on the traditional mass media and 40% on the online audiences. The results of those efforts is that while total internet audience in India surged by 22% and the Social networking numbers surged by 51%,  BigAdda lost 25% of its audience and iBibo lost 50% of its audience.

On the contrary sites like Bharat Student, Linked In, Orkut, Face Book,hi 5 and others didnot invest in any marketing activities and yet they registered significant growth beating the median (growth of the market). 

Does this lend credence to the fact that online marketing is more than eyeballs. Probably it is content related, probably more features to do more things, probably the No 1 social networking website Orkut is riding a threshold mass. Probably it is do to with being "in", as in Facebook. I have a inkling that while in 2008 Orkut rode Threshold and Facebook was "in", in 2009, Orkut will saturate, Facebook will ride the threshold and Twitter will be "in". Probably it is to do with your positioning, e.g Bharat Student or serving a speciality, LinkedIn.

In absence of a clear hook, IBibo and BigAdda spent a lot creating awareness, but were after all not able to make a clear and uncontested spot in the mind of the user (positioning themselves effectively). That could lead them to a "aslo ran" status. That could be one of the reasons of their negative inspite of the social networking scene being in 50%+ positive.

Lessons from the day

1. Dont try to be too many things to every consumer. He will seek you out if you deliver the benefits.

2. Traditional media vehicles may create awareness. But if the offering is not sticky enough, you cannot get your consumers to stay back. (I believe in.com is headed the same way)

3. Postioning is as relevant as ever.

One important thing is Monetization bit. How do you monetize the 3.3 millions users on your books.