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  • Archive for the ‘Featured’ Category

    Why does Budweiser taste so good?

    Sunday, July 20th, 2008

    Yesterday a few friends of mine got together and headed down to the St. Louis world headquarters (at the moment, anyway) of Anheuser-Busch for a tour of the brewing facilities.  I took along my camera and snapped a bunch of photos for my out-of-town friends and family (and you, the random visitor who probably entered my site via a Google Search).

    A lot of people rag on Budweiser and Bud Light for being, for lack of a better term, “swill.”  I’ll admit that I was one of those people, but that was before enjoing delicous same-day Budweiser in the hospitality room at the end of the tour.  When I asked our tour guide what made it so damn tasty, he replied - “it’s the water.”

    The secret is in the St. Louis City water.

    It’s a fact that St. Louis has the best water in the country (kiss it, New York!), so it only makes sense that Anheuser-Busch’s overall quality is directly tied to the fluids that quench the gateway city’s thirst.

    As an aside, I thought that it was interesting that the tour guide kept bringing up Anheuser-Busch’s sustainability efforts.  I was unaware that Anheuser-Busch recycles 5 cans for every 4 they produce and that by using alternative energy sources, they are able to power roughly 10% of U.S. production.  It’s a far cry from the sustainability efforts of New Belgium Brewing, but it’s a great start.

    You can view 47 photos of the St. Louis brewery as a Flickr photoset here.  Enjoy!

    Free your feed

    Thursday, May 29th, 2008

    Full feeds, please.

    There’s nothing I dislike more than firing up my Google Reader and finding either summaries of articles (New York Times) or truncated posts containing one paragraph (or less) of content (St. Louis Post-Dispatch, Baltimore Sun). Site owners will be quick to tell you that the main reason they provide snippets of posts/stories/etc. in their feeds is to load up your browsing experience with ad views when you are forced to leave the sanctity of your feed reader.

    I think that’s a real crappy way to treat your readers.

    Free those RSS feeds!

    Free the feed.

    Look, if it’s money you need, that’s one thing. Throw your feed through Feedburner and use their monetization tools. You may not be able to register the insanely high impressions that make your CPC campaigns tick, but you’ll at least be able to recoup a little bit of revenue while not hackin’ off your sophisticated readership.

    Please?

    Why the Kindle will fail

    Thursday, May 15th, 2008

    Before Amazon launched the Kindle, I was asked if the Sports Cartel would like to participate as a launch partner with Amazon and provide RSS feeds from our sports blogs for Kindle subscribers.  I spoke with a very enthusiastic Amazon Kindle team member who explained the pricing model, the device and what kind of revenue we could expect to receive in return for the per subscriber model.

    When I hung up the phone, I started to run the numbers:

    Kindle MSRP:  $399.00

    Subscriptions, per month:

    • Cost per syndicated blog: up to $.99
    • Cost per newspaper: $9.99 - $13.99 (major papers)
    • Cost per magazine: $1.25 - $2.49 (major magazines)
    • Cost per book: $9.99

    It just didn’t add up.  I couldn’t figure out how these devices would actually sell.  You pay $400 for the privilege to lug around a fairly ugly 4-color grayscale device that displays blog feeds, newspapers, magazines and books that you still have to pay for?  No thanks.  The Kindle is, to all intents and purposes, a one-dimensional device.  A one-dimensional device with a hefty price tag.

    You can imagine my surprise when I saw a Michael Arrington post on TechCruch, where Citigroup Analyst Mark Mahaney forecasted that Amazon could generate $400M to $750M in revenue from the Kindle by 2010.

    Those figures would represent roughly 1% - 3% of Amazon’s total yearly revenue.

    In my humble opinion, there’s no way that Amazon will sell that many Kindles and generate that kind of revenue.  

    No. Way.  

    For starters, there’s the subscription-based model.  While I can certainly understand why someone would want to load up a Kindle with blog feeds, newspapers and e-books (really, who are we trying to fool?), the recurring cost becomes a serious barrier after months of use.

    Just looking at my Google Reader, I subscribe to about 60 blogs.  Take that times $.99, and I’m suddenly spending $59.40 per month to read things I already get for free.  Keep in mind this is only blog usage.  Let’s say I want to order the new Kurt Vonnegut book at $9.99 and read the New York Times at $13.99 per month in addition to the blog feeds… I would have just spent $482.38 ($83.38 for the content and $399.00 for the Kindle) in the first month of owning the device, of which $73.39 was subscription-based.  Subscriptions that I could have pulled up on an iPhone (in color, no less) for the flat-rate cost of the rate plan and iPhone.  

    But what of this Apple technology, you say?

    In order to make the “up to $750M!” prediction somewhat valid, Citigroup’s Mahaney applied some *extremely* fuzzy logic, as pointed out by Arrington:

    Citi took this indirect sales data and built a model based on the adoption curve of the iPod “Here’s what’s known. Launched in CQ4:01, the iPod went from 129,000 unit sales in its first quarter to becoming a mass market phenomenon, with a current installed base of approximately 100MM.”

    They apply similar adoption rates to the Kindle that the iPod saw (starting at a much lower base: 129,000 iPods v. 10,000 - 30,000 Kindles in first three months on the market) and then discount the entire model by 50% - 75% to hedge risk in coming up with the three year revenue model. “So perhaps, if Amazon executes right with its Kindle product and marketing strategy, the iPod analogy for the Kindle won’t be too far stretched,” Mahaney says.

    Let me make one thing abundantly clear: the Kindle is no iPod.  And it’s not even close.  Discount the model all you want, but the math is still very, very fuzzy.  As Spock would say, that’s highly illogical.  Hopefully the potential AMZN shareholders think so, too.

    What would you do with $50b?

    Wednesday, May 7th, 2008

    In his latest Alertbox e-mail, usability expert Jakob Nielsen has some unusually great ideas for Steve Ballmer, Microsoft and the $50B they saved from walking out on the Yahoo! deal:

    a) Give back to the websites that create the content that search engines currently scrape for free: pay sites for only being indexed in one search engine and refuse the other engines. In particular, allow access to deep link archives of value-added content for users entering from your search engine. Value proportion to users: When you search on engine X, you find stuff that’s otherwise not available.

    b) Give back to the users. For example, pay IT departments for redirecting all searches emanating from their company to engine X. Value prop to advertisers: if you want to reach the B2B audience, you need placement on our SERPs because that’s all business users see in 70% of the Fortune 500.

    Finally, and most importantly: improve basic search performance. For example by creating human-readable summaries of the search results instead of the horrible 2-line snippets currently used.

    One idea is to hire a million people (probably no more than ~$1B/year) to use an instrumented browser that requires them to pass judgment on the usefulness of every search hit they visit. This data could allow sorting the SERP by usefulness instead of popularity and thus vastly improve the quality of searches.

    All great ideas, to be sure.  If you’re not already subscribing to the Alertbox e-mails, you should be.