Tech getting the jitters from the economic hammering

Last week I touched on the impact of the US financial issues on tech stocks.

http://mimelbourne.blogspot.com/2008/09/no-vote-on-700b-bailout-impacts-tech.html

Now there is finally talk on how this will impact the advertising market ... with some sentiment that digital will probably benefit from any economic turmoil as it offers a perception of more accountability than other media.

Some have stated Google will benefit - which is interesting. I'm not so sure it should - Google is about demand fulfillment, not demand creation. In times like this brands need to create more demand - not look at making fulfillment more efficient. I sometimes feel most misunderstand the role of SEM in a marketing mix and the variables that impact what search can do for a company. For almost all categories, search relies on 'ATL' media (for want of a better term) to drive demand for brand and category terms ... by taking money out of brand building activity, it will impact the amount of traffic you can funnel using search. If advertising is a mix of art and science (magic and logic or whatever other analogy ppl use), then I am not sure it makes much sense to lean more towards straight science in leaner times.

Locally it will be interesting to see what happens. The first half of 08 was very flat ... however the environment has rallied in the second half and we should see approx. 20% YOY growth in the online advertising sector.

However, it's not clear yet what will happen in Q1 and Q2 of 2009 - which I think would be making the local players nervous given how soft the same period was in 08 without such powerful economic factors at play. In the US the past few months have seen layoffs at a lot of key players, the same situation is entirely possible here - I wouldn't be surprised to see layoffs in product/editorial areas over the next 2-3 months in AU. Either that or we will see publishers trim the fat off their offerings - ie, get rid of the elements of their portfolio which on their own are not viable. It's not the time to be carrying excess baggage.

So lets check in with 6 key stocks I looked at last week and see how they faired over the past 7 days.

Yahoo! - market cap down 2.18b in past 7 days
Google - market cap down 5.87b in past 7 days
Microsoft - market cap down 1.56b in past 7 days
Research In Motion - market cap down 1.84b in past 7 days
Apple - market cap down 6.86b in past 7 days
Time Warner - market cap down 6.07b in past 7 days

A bogus heart attack, Steve Jobs and Citizen Journalism

It was the first weekend I'd had without AFL for 6 months, so luckily something interesting happened over the weekend that I could follow in between trying to save my garden from the weeds

It occured in the developing world of 'citizen journalism', and the star players were Apple Chief Steve Jobs and CNN's 'citizen journalism' initiative, CNNi.

On Friday night I was home enjoying some red wine, watching Goodfellas for the 20th time, when I quickly logged onto Silicon Valley Insider. Henry Blodget the sites editor started with, "Citizen journalism" gets its first real test. A story of major consequence that, thus far, no one else has reported"

It then went onto report that CNN's CNNi had run a story on it's front page that Apple head, Steve Jobs, had suffered a heart attack and had been taken to hospital. This happened around 11pm EST ... so just before trading opened in Wall St. SAI merely reported the story and linked out to CNNi - it claimed it was following up Apple sources to see if the story was legitimate as the rest of the media world didn't seem to be following the story at the time.

But Twitter was ablaze with chatter regarding the alleged heart attack. Apple stock dived - but nowhere near as much as one would expect.

SAI also stated "Meanwhile, very interesting that this report appears on CNN's site. If it proves correct, CNN will look great. If it is wrong, CNN's credibility will likely be hit."

The whole situation is outlined here - http://www.alleyinsider.com/2008/10/why-we-published-that-steve-jobs-heart-attack-report

So ... a few hours later it turned out the post on CNNi was bogus. SAI amended the story and CNN took the post down. It apppeared that in this case, the initiative had failed. Apple stock rallied and now the hunt is on to find out who the culprit was.

Blodget is getting absolutely hammered for posting the story as news - I don't think he has anything to answer for. Jobs is the biggest name is tech without a doubt and his health is an often discussed issue almost to the point that when Jobs gets up and launches a new product there is often more discussion about his weight (or lack of) than the products.

It will be interesting to see how CNN approach this - an error this large with a personality as big as Jobs is a real stumble ... and will this impact on other traditional media experiments into letting their readers contribute editorial?

'No' vote on $700b bailout impacts tech stocks bigtime

The US House of Representitives 'no' vote on the proposed $700b bailout of Wall Street has as expected impacted the stock market - with tech stocks also vulnerable.

Lets have a look at what the last day has done to the value of some of the biggies.

Yahoo! - down 10.6% (market cap $23.4b)
Google - down 9.5% (market cap $122.6b)
Microsoft - down 8.39% (market cap $229b)
Research In Motion - down 11.07% (market cap $35.58)
Apple - down 17.4% (market cap $93.8b)
Time Warner - down 8.8% (market cap $46.3b)

That's in excess of $55b USD wiped off the value of the above 6 companies in 1 day. The fun starts locally in a few minutes

iPhone 3G: In AU July 11

iPhone 3G hits AU on Friday 11 July.

http://www.apple.com/au/iphone/

No word on pricing as yet. Right now in the US you can get the 3G iphone for $199 upfront on a 24 month contract.

Jobs keynote - http://www.apple.com/quicktime/qtv/wwdc08/

Apple to launch iTunes Movie Service

Ambitious, sure, but Apple changed the music industry ... and now it's announced an iTunes movie service.

http://afp.google.com/article/ALeqM5hvMegd0reWWr2UEJKaYIS-mc5Puw

Sony, Universal, Paramount, Walt Disney, Warner Brothers, and 20th Century have already signed up. (Walt Disney is a client of MindShare Interaction)

They will launch with 1,000 titles, new releases are $3.99 USD and older titles $2.99 USD.

From the article ..

"People will be able to view films on any make of home computer as well as on video-enabled iPods and iPhones. After downloading rented films, people will have 30 days to begin watching them.

"Once someone has started watching a film, they can view it as many times as they want for 24 hours.

""We've never offered a rental model in music because we think people don't want to rent their favorite music, they want to own it," Jobs said. "But, your favorite movie you watch maybe once.""

Whilst the launch is US only, Jobs is 'dying' to roll this out internationally.

The clincher for Apple is Apple TV ... which allows this VOD model to push right into the users living room. It has essentially taken the PC out of the picture.

VOD has been sluggish (especially in AU) but if anyone can nail this, it is Apple. After all, they have already sold 4b songs on iTunes.