Quarterly Earnings Update
A few search- and social-driven companies have reported their earnings this quarter. An update:
- Overstock.com had weak sales growth and lower gross margins, with a drop in sales and marketing expenses and an increase in technology spending. The press release has details. Early in the quarter, they were penalized by Google, which may be reflected in their weak sales growth. However, the classic response to a Google penalty is to shift more money into AdWords and affiliate payouts, in order to keep sales stable. OverStock apparently chose not to do this.
- Yandex grew revenue at a 60% annual rate, and grew profits more slowly. This is roughly in line with what analysts expected.
- Constant Contact, an email marketing firm, reported solid growth in revenue and EBITDA, though their profits are still unexceptional. Their new product initiatives seem to focus entirely on social and mobile—which is fine for getting attention, even though smart VCs think that email is undervalued compared to social, rather than the other way around.
- Monster grew revenue and turned a profit, but still disappointed. Apparently their #1 ranking for the term ‘jobs isn’t worth what it used to be.
AirBNB Update
The AirBNB customer whose house was ransacked has written an update on the situation. The story behind the story is that good writers often make terrible customers. For example, most people would be impressed if their main customer service contact at a billion-dollar company happened to be the CEO; in this case, the writer is distressed that the first customer service person she spoke to is no longer available. This story is very gradually turning into a PR crisis for AirBNB. There’s not much they can do besides their previously mentioned plan to double support staff, offer insurance, and improve verification options.
LinkedIn Makes a Run for their IPO Price
The “LinkedIn got screwed by their bankers” theory: LinkedIn is now back to a post-IPO high, closing at just over $100 after briefly reaching $115 per share. It remainsfundamentally difficult for Wall Street to value startups, so the stock should stay volatile until the company gets boring.
Yahoo and Alipay Reach an Agreement
Yahoo and Alipay have just announced a settlement on their Alipay unit. Essentially, the plan is for Alipay to provide payment services to Alibaba, Alipay will license some technologies from Alibaba, and Alibaba “will receive no less than $2 billion and no more than $6 billion in proceeds from an IPO of Alipay or other liquidity event.” Ahead of the open, Yahoo is up about 5%.
Yelp Hires a New CFO with Public Company Experience
Yelp has hired former Move.com CFO Rob Krolik. This is a strong indicator that they’re preparing to file for an IPO soon. And not a moment too soon, either: Google is aggressively targeting local search, which is one of Yelp’s key sources of new users.
New Twitter Ad Product: Promoted Tweets in Timelines
Twitter has launched promoted tweets in timelines; here’s more information from their chief revenue officer. This is not quite the long-awaited Twitter revenue product that investors have been hoping for. In fact, its main use may be to condition Twitter users to get a bit more used to ads. Twitter ad case studies remain anemic. Aside from the now-ancient Dell direct sales case study, Twitter can cite a Super 8 campaign that sold $1.5 million tickets.
This may say more about how measurable Twitter ads are than about how effective they are: Twitter advertising is usually more analogous to banners than to paid search ads. But it remains a concern.
Yext Raises $10mm to Fund Local Listings Management Software
Aggregators attack—again! Yext has raised an inside round to focus on a new software product, which helps businesses manage listings across Yelp, Yahoo Local, etc. Unfortunately, this is more often a pain point for local marketing agencies, rather than the businesses themselves—many local business owners aren’t aware of problems in their local listings in the first place. But the sales graph Yext shared indicates that there’s some sort of demand there.
Google Offers to Silently Optimize Sites for Speed
Google has a new page speed service which essentially caches a website on Google’s servers, optimizes it, and then displays it to users. It’s basically hosting, but provided in a roundabout way. This could end up being significant; if Google decides that their hosting will improve the overall web experience, they may price it in such a way that they get dominant market share fast. And that means they won’t have to spider the web in order to index new content; they’ll see it on their own servers first.
Skype / Facebook Integration Has Started
Skype users can now IM their Facebook friends directly through the Skype app. As the linked blog post indicates, this is also a sign that Skype will be able to communicate across more protocols in the future.
Google Testing Longer AdWords Copy
SEOBook reports on Google AdWords allowing 150-character ads. This is one more way that paid ads will take up more screen real estate and user attention on search results pages.
Other Google news:
- Google is testing a hotel search service. This could be a disaster for travel lead-gen companies: flight search is a loss-leader that companies use in order to get hotel-search business, which is quite profitable. If Google finds a way to get that business instead, it will be bad news for many of the larger travel players.
- Google+ friendships influence search results. +1s and social sharing activity already have an impact, but attributing rankings changes to friends, not specific sharing activity, is new.
Trulia Follows Realtor.com in Integrating Social Recommendations
A few days ago, Realtor.com announced their acquisition of SocialBios. Trulia has somewhat more sensibly integrated social recommendations into their realtor searchwithout an acquisition. Since the realtor business is already so referral-based, this is probably an effective move.
Digital Due Diligence Daily—Your Thoughts?
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