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Consumers 2, Big Corporations 0


It’s times like these (read: major global financial crisis) that companies should know that it’s wiser to cultivate their relationships with existing customers, rather than attempt to isolate them.  Further, ever since the Occupy Wall Street movement has gained sympathizers, it seems like the average US citizen’s voice has been found.  And s/he is not afraid to use it.

Consumer 1, Corporation 0
On September 19th, I received an email from Netflix CEO – Reed Hastings, alerting me of some major company changes. Namely, the renaming their bread and butter – DVD by mail service – to “Qwikster”. 

Unless you’ve been living under a rock, you know that Netflix Kill[ed]s, its DVD-only business before [its] launch.

The people (customers) had spoken, and in a smart, yet rash decision, Netflix decided to retreat.

Hastings admits now: “In hindsight, it is hard to justify. Having separate brands can in theory make sense. However after the price increase, Qwikster became the symbol of Netflix not listening.”

As of September 14th, NFLX stood at $208.71/share, and today it’s at $80.09.  That’s a 60%+ drop!  Ouch.

Consumer 2, Corporation 0

On November 1, Bank of America announced that they’ve eliminated their plan for [the] $5 debt card fee.  This AFTER backlash from existing customers.

The bank canceled the fee, which would have started in January, after listening “to our customers very closely,” David Darnell, co-chief operating officer, said in a statement today.

As a non-CEO of a publicly traded company, maybe my views are skewed, but I’ve always believed that a company should strive to maintain its relationships with existing customers, regardless of the state of the economy.   Happy customers tell their friends = more customers (that’s the best kind of marketing).

Let’s hope that “third time’s a charm”, isn’t relevant here, and big corporations have taken note.

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Filed under: Business, Finance, Marketing, World, , , , , , ,

It’s raining (social-networking) IPOs


The Oracle has spoken… with his thoughts on social-networking IPOs:

Most of them will be overpriced,” [Warren] Buffett, chairman and chief executive officer of Berkshire Hathaway Inc., said… ”It’s extremely difficult to value social- networking-site companies… Some will be huge winners, which will make up for the rest.”   Bloomberg BusinessWeek, 3/25/11

But that hasn’t stopped a parade of social-networking companies from preparing themselves to go public.

Renren Inc., China’s equivalent to Facebook, went public on May 4th.  It’s the first social-networking site to do so.

The stock rose as high as $21.93, or almost 56.6 percent above its $14 IPO price in its first day of trading on the New York Stock Exchange before closing at $18.01, or 28.6 percent, above the IPO price.            Reuters, 5/4/11

Not to be the bearer of bad news, but as of end-of-day/closing bell Wednesday (May 11th), RENN‘s stock stood at $13.49.  That’s lower than the initial price.

What does this mean for Facebook, which is planning to go public next year?  And don’t forget LinkedIn, which is planning to join RENN with its own stock – LNKD – later this month.

On March 10, 2000, the dot-com bubble burst…is the social-networking IPO bubble going to burst in late 2011/early 2012?

Filed under: Business, Finance, Marketing, Social Media, Tech, , , , , , ,

2011 Holiday Party in Liechtenstein?


While Americans are quite pessimistic about the current state of the economy and the future…

CNN Money:

In 2010, chief executives at some of the nation’s largest companies earned an average of $11.4 million in total pay — 343 times more than a typical American worker, according to the AFL-CIO.

What’s a CEO to do with all this extra cash?

First they should hire more people…and then to celebrate, why not rent the country of Liechtenstein for a night or two?

Airbnb, a Couchsurfing-like website for properties, has partnered with an event company in the tiny but gorgeous principality of Liechtenstein to offer, well, the country itself for rent.

What’s the price tag?

Renting Liechtenstein, which sports also great skiing, magnificent castles and offshore banks, will set you back about $70,000 a night, but, understandably, the minimum stay is two nights.

Click on the shirt to brush up on your Liechtenstein knowledge. (Wikipedia)

Filed under: Business, Finance, Random, World, , , ,

ATMs dispensing cash are so passé


Last week, a mall in Florida debuted a new ATM machine.  Just swipe your credit card, and poof, out comes a 24-karat bar or coin.

Thomas Geissler, the inventor of the Gold to go machines says:

“Instead of buying flowers or chocolates, which is gone after two or three minutes, this will stay for the next few hundred years,” Geissler told the Associated Press. But he also envisions that the machine, which is making its North American debut at the upscale Town Center Mall in Boca Raton, will draw “serious investors” who don’t want to buy gold at pawnshops or over the Internet.

I’m wondering if there will be a security escort for customers?  The ATM vestibule was designed and created for a reason.  Just because the ATMs will be placed in upscale areas, doesn’t mean that it’s necessarily safer to purchase your gold bars and coins out in the open.

Well, not to take away from the excitement,  I recommend you keep this link handy, so that you can be best prepared when the GoldtoGo machines debut in your area.

Filed under: Business, Finance, , , , , , , , ,

Breaking News: The Recession has been over since June 2009 (who knew?)


The Business Cycle Dating Committee of the NBER (National Bureau of Economic Research) formally announced today that the U.S. recession that started December 2007, actually ended on June 2009.

And that

The recession lasted 18 months, which makes it the longest of any recession since World War II. Previously the longest postwar recessions were those of 1973-75 and 1981-82, both of which lasted 16 months.

According to the actual report from the NBER site

the committee determined that a trough in business activity occurred in the U.S. economy in June 2009. The trough marks the end of the recession that began in December 2007 and the beginning of an expansion.

As of Friday, 124 U.S. banks have failed, unemployment rate (as of August 2010) is 9.6%, foreclosures are at an all time high, and here’s a fun fact – ‘U.S. poverty rate hits highest level since 1994’.  Is it just me, or does this breaking news not really mean anything at all?

This is how the NBER defines recession:

It’s more accurate to say that a recession—the way we use the word—is a period of diminishing activity rather than diminished activity. We identify a month when the economy reached a peak of activity and a later month when the economy reached a trough. The time in between is a recession, a period when economic activity is contracting. The following period is an expansion. As of September 2010, when we decided that a trough had occurred in June 2009, the economy was still weak, with lingering high unemployment, but had expanded considerably from its trough 15 months earlier.

So I guess it’s too early to say that we’re in the clear, but it’s possibly on the up?  No double-dip…hopefully.

Filed under: Business, Finance, , , , , , , , , , , , , ,

Attending a for-profit university, good decision or bad decision?


I’ll admit it, when I first learned about the University of Phoenix, my first thought was “there’s a University of Phoenix in Arizona”??  All skepticism aside, of the for-profit university, the organization (for lack of a better term) is trying to re-brand the public’s perception.

While University of Phoenix is one of the internet’s biggest advertisers, it is first and foremost an educator.  Now, the Fortune 1000 company has tasked itself with re-branding American education, transforming it from an expensive and exclusive club to a high-quality, affordable, and scalable academic experience.

I would like to call your attention, dear reader, to the 2nd sentence in the quote above.  Specifically – a high-quality, affordable, and scalable academic experience. In a random coincidence, I read an interesting (and depressing) article today about how student loan defaults are on the rise.

The default rate on loans for for-profit schools rose from 11 percent in 2007 to 11.6 percent in 2008, while the rate for public institutions went from 5.9 percent to 6 percent and the rate for private schools went from 3.7 percent to 4 percent.

Right, so for-profit schools have the highest default rate.  And…

“While for-profit schools have profited, some of their students have not. Far too many for-profit schools are saddling students with debt they cannot afford in exchange for degrees and certificates they cannot use. This is a disservice to students and taxpayers, and undermines the valuable work being done by the for-profit education industry as a whole.”

The article doesn’t specify which for-profit school the defaulted students have attended, BUT I think it’s safe to say that it will probably behoove the powers to be at University of Phoenix, and other similar schools, to focus on their current students.

Just like companies, in this economy, are focusing on retaining and pleasing their current clients, I think that ensuring that their most recent graduates can use their certificates and degrees to secure jobs in this marketplace, should rank first on their agendas.

Filed under: Business, Finance, Marketing, , , , , , , , , , , , , ,

The more you bank a year does not mean you’re necessarily happier…


…richer, maybe, but not happier.

According to a study in the Proceedings of the National Academy of Sciences (right, I looked it up… founded in 1914, the PNAS reports on biological, physical, and social sciences),

Beyond household income of $75,000 a year, money “does nothing for happiness, enjoyment, sadness or stress”.

The data was comprised from a sample of 450,000 randomly selected Americans.  While the study found that the individuals’ self assessment of their own lives was strongly correlated to higher salaries, their day-to-day happiness was not equally affected.

“Many people want to make a lot of money, but the benefits of having a high income are ambiguous,” said Professor Kahneman, who is also a Nobel laureate in economics. When you are wealthy you are able to buy more pleasures, he said, but a recent study suggests that wealthier people “seem to be less able to savor the small things in life.”

What is the moral of the story?

In the end, people should pursue what they’re interested in, said Daniel H. Pink, author.

We’re taught that money-makes-the-world-go-round… and to save money for when we’ve retired,… While I understand that the researchers are trying to say that money doesn’t buy happiness, I actually would like to add a personal addendum… it certainly helps.

Filed under: Business, Finance, Random, , , , , , , , , , , , , ,

The billionaires club


If you recall, at the end of last year, a group of Germany’s upper echelon (of wealth), came up with an ingenious plan – have the government increase taxes on the wealthy.  This group petitioned that simply donating to charity was not enough to bring about change to the economy.

“Germany could raise 100bn euros (£91bn) if the richest people paid a 5% wealth tax for two years, they say.”

Well, let’s fast forward to the present.

Bill Gates and Warren Buffett have formally announced this past week, that they are asking American billionaires to give away 50% of their wealth to charity during their lifetime, or after their death. Their new campaign is called the Giving Pledge, which isn’t accepting money, just a ‘moral commitment’.

I hope that instead of donating to any charity around the world, these billionaires choose to spend their wealth here at home.

Filed under: Business, Finance, , , ,

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