links for 2008-11-17
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If you’re interested in online service pricing, this Long Tail blog post itemizes several examples of companies (Club Pengui, Habbo, Rumescape) that are able to charge for premium services. Under the topic of “freemium”, it also talks a bit about Ning’s hybrid model where 3% of users pay for premium services, but the other 97% are monetized through advertising. Perhaps the most compelling “freemium” exmpple is TurboTax, which apparently gives away the Federal tax filing charging for the sate filing. Fully 70% of filers opt-in.
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Eves dropping on a luxury goods marketers is like studying penguins. They’re exotic w/ a perspective shaped by living in a very special place. W/ belt tightening expected to cleave of whole segments of aspirational buyers (particularly personal luxury shoppers (shoes, jewelry, clothing)), what does Gucci, Prada and Ford do? Focus on customer service (euphemism for mining segments resistant to downturn). Example: Prada where 50% of sales come from 5% of customers. 2. Downsize selling perfume in smaller bottles making it price-accessible. 3. Shift distribution where customers are e.g., CVS for beauty products. Discount? No, there’s no bottom. Chase customers and find you’ve discounted the brand’s future. Focus on the BRICs? Global downturn to affect even high-growth countries. Best quotes: “Women are shopping in their own closets” – Faith Popcorn (her real name). "A customer could always use another purse." – Abouchalache (not a student of demand elasticities).
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Sixteen years after Windows beat OS/2 making Microsoft the dominant PC operating system player, Microsoft has co-opted the “integrative” strategy online. This Wednesday MSFT will release a version of Live that will eventually integrate e-mail, instant messaging, photos and Web applications from 50 other companies. Objective: keep Live (optimistically quoted at 460 million users) in front of MSFT-backed applications longer.
Why it won’t work: 1. They’re late: The Portal 2.0 party started over a year ago on social networking sites such as Facebook and MySpace, 2. It’s a “me too” move now with every major online property including Yahoo adding social networking functionality, 3. They don’t have the traffic, and 4. They have a history abusing partners having driven literally hundreds of firms out of business by co-opting functionality into their operating system during the ’95 – ’05 period.
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