Category Archives: Technology

AOL’s Sale to Verizon: All Eyes on Mobile and Video

Verizon’s announcement today that it will buy AOL for $4.4 billion is a bid to get beyond dumb pipes and airwaves to get deeply into mobile and video. By doing so, Verizon, a $200 Billion company,  hopes to play on more of a level playing field with other major telecom players combining access to content and personalization services, especially Comcast (with NBC U) and  AT&T (with Direct TV.)

The all-cash deal provides a 150 percent return for shareholders in AOL from when CEO Tim Armstrong came on board in 2009. The price is 17 percent above the current stock price. And at the lower price – which may ultimately be even lower if some of the content properties are sold – a lot less is riding on it.

Have you seen this movie before in 2000, when AOL was disastrously sold to Time Warner for $165 Billion?  A lot of the same synergies are being discussed:  video on demand, personalized content and subscription revenue.

But this time, it is really all about mobile; video on mobile; and the prospect of converting (or selling) 2.1 million dialup subscribers that continue to be AOL’s biggest moneymaker. Indeed,  AOL has built or bought a powerful arsenal of mobile ad serving and video tech, especially LTE Multicast, which uses its cellular network to broadcast live video.

In our view, content is not likely to be an important factor here.  It would have been more important if AOL had merged with Yahoo, or with Microsoft.  The biggest “what if” probably involves MapQuest, which has technically lagged behind mapping leaders but retains a powerful, verb-like brand in that space.  Given Uber’s $3 Billion bid to buy Nokia’s HERE, it may ultimately emerge as an important factor in the deal – much more so than Huffington Post.  AOL’s sizable effort to make Huffington Post into a super content portal, including a major local dimension, failed dramatically last year. Similarly, Armstrong’s huge, multi-hundred million dollar effort with hyperlocal site Patch amounted to very little.

To some degree, we also see Verizon’s acquisition of AOL as an acqui-hire. Verizon has  stumbled around advertising for several years but not had an impact. It also has made some small investments in content and classified properties, but hasn’t been confident enough to really spend. Its biggest effort was a promotional program with the NFL to broadcast games for free.

We like the statement issued in the name of Verizon CEO Lowell McAdam, who we note, has long had his eye on geotargeted advertising. “Verizon’s vision is to provide customers with a premium digital experience based on a global multi-screen network platform. This acquisition supports our strategy to provide a cross-screen connection for consumers, creators and advertisers to deliver that premium customer experience.”

Bookshelf: ‘The Internet of Things’


Last year, like millions of others, I bought a Nest thermostat. It is connected to my WiFi, and I can use its iPhone app to turn off the heat from the Airport. It also knows if we aren’t home, and shuts down to 58 degrees when we don’t walk by it every two hours.

A few weeks ago, I went a little further, and bought a Rachio, a lawn sprinkling system that integrates with the Nest. It tracks the weather via the Web, and adjusts my backyard watering stations based on precipitation and heat. And then I jiggered it, so that I can use its iPhone app to turn on the lights on my stairway when I am arriving home after dark.

I don’t have a self-driving car yet, or keyless home entry. And I don’t get too close to the military’s drone program. But those are all in the family, too. As are the Apple Watch and Google Glasses.

The Family, of course, is known as “The Internet of Things.” What it consists of are devices that combine tools with automation and radio sensors and data from the Cloud and the Web.

The Nest story became especially interesting to us in business when Google bought it for $3.2 Billion last February, and its leaders became the head of Google’s new Internet of Things division. At the time, it seemed like a stretch. But the Nest division keeps growing (Carbon Monoxide detectors, etc.) IoT might just be driving the next generation of efficiencies. Intel and other tech giants have similarly- named divisions.

Samuel Greengard, a writer for CMO.com and other thought-leader publications, has penned a handy new book for MIT Press called “The Internet of Things.” It nicely covers the history of IoT’s development from the Industrial Internet to the Internet of Humans to the Internet of Everything. The book connects the dots on where IoT can go, and also provides fair warning on the things that can go wrong (and we aren’t just talking about Google car crashes in San Francisco).

The 210 page paperback ($12.93 on Amazon) has a good glossary, a nice bibliography and is a fast read. And you’ll see why BIA/Kelsey conference speakers in coming years are perhaps as likely to come from Honeywell and Rain Bird as they are from NBC-U, Comcast, Google, Facebook,Intel and Microsoft.

(Here’s a question: If you worked for Google, would you rather work for Nest, or AdWords?)

ReachLocal Now Captures SMB Leads from Across the Web

Leads are coming from everywhere, and the digital marketing firms have adjusted to this reality. ReachLocal, for one, has now opened up its ReachEdge lead conversion and marketing automation software. It now has the capability to track leads and other activity from a wide variety of unassociated marketing sources.

Chief Product Officer Kris Barton briefed BIA/Kelsey on the ReachEdge’s evolution, noting that the company’s efforts to increase transparency and simplicity will ultimately boost conversion rates. Barton says that “decoupling” the software is the direct result of customer input. Some customers, for instance, had invested in redesigned website and didn’t want to have to abandon it in order to sign up with Reach.

The new version of ReachEdge is $149 a month and includes a free trial. It also features plug-ins for publishing systems such as WordPress and Drupal. The software has also been enhanced for mobile. Customers can use their phones to receive emails and text alerts. It also has integrated reports that are “focused entirely on ROI” and are much clearer than Google Analytics, says Barton.

Pingup’s Mark Slater: Why ‘Task Completion’ Scheduling is Key for LODE

More than 75 companies are now providing scheduling solutions, resulting in a super fragmented marketplace where no single company has even five percent of the existing market. One by-product of the glut: the need for a one stop, API-driven product that can confirm bookings across the different platforms.

MyTime, which has been developed by Red Beacon founder Ethan Anderson, is one aggregator. Another is Avalon Ventures-funded Pingup, which has been in development for two years and just announced a deal with CityGrid Networks’ Citysearch and InsiderPages to embed task completion on their pages.

Pingup CEO Mark Slater talked with BIA/Kelsey about the space. He says it has become especially critical with the development of the Local On Demand Economy (LODE), which allows consumers to set up appointments on an on-demand basis (and is also the subject of BIA/Kelsey’s June 12 LODE conference in San Francisco.)

“We want to be the platform that powers LODE,” he says, noting that the traffic that had once been focused entirely on search has now broadened to also include task completion. Services such as Pingup are “an extremely efficient way to provide access to businesses,” he adds.

Pingup, which is based in Boston and has 19 employees, is “only about integrating the software,” says Slater. It has no aspirations of its own to be a media player or a destination in its own right. “We don’t represent a competitive threat to the demand side or the supply side,” he says.

Slater adds that its deal with CityGrid Networks’ Citysearch and InsiderPages will bring in thousands of businesses on the appointment supplier side. The company expects to name at least five more publisher announcements in 2015, potentially including listings partners, search engines, ecommerce companies and messaging companies.

Booker Software Raises $35 Million; CEO Josh McCarter Talks to BIA/Kelsey

Booker Software announced today that it has raised $35 Million, which it will use to invest in sales and marketing capabilities and in developing vertical-specific products that “drive more value to merchants,” said CEO Josh McCarter, in a discussion with BIA/Kelsey.

McCarter noted that 9,000 locations are under contract and over 60,000 business users. These are users who are “logging in every day. They are not just signing on once a month” to create a promotion or similar feature. They use Booker’s services as an integral part of their business.

Next steps for the company will further leverage all the trends impacting services-based SMB marketing, including CRM; retention marketing; Point of Sales services; scheduling; and mobile apps via a partnership with Como.

“Last year, we refocused on things that help you grow and operate more efficiently,” said McCarter, noting that the company rebranded from Gramercy One to specifically focus on the SMB space, which now accounts for 80 percent of its revenue. “The data that Booker can aggregate really powers the growth engine,” he said. Services such as email and CRM are only as powerful as the data they can use.

While spas and salons continue to account for a significant portion of the company’s business (dating to its origins as SpaFinder), a number of verticals hold great promise, said McCarter. Pet services, daycare and after-school services (music lessons, art lessons) are doing “very well.” Another area of growth is a JV with The Golf Channel that enables customers to book tee times and other services.

The new round of funding is on top of $40 million previously raised. Several mid-sized funders that specialize in SMB services were included in the round, including Signal Peak (InfusionSoft) and Jump Capital (Swift Pages). The round was led by Medina Capital, a cloud infrastructure specialist.

Other investors included Revolution (Steve Case and Ted Leonsis), Bain Capital, TDF Ventures and Grotech Ventures. In addition, a “strategic investment” was made by First Data, the payment processing giant, who will be announcing details of its relationship with Booker in coming months.

McCarter noted that each investor brings a unique appreciation of Booker’s goals in serving the SMB community, which has been “underserved” by larger VCs, which McCarter called “SMB-averse.” But there is a definite need for SMB services, which focus less on return policies or other ecommerce issues. They are more about everything that a business needs, from scheduling services to POS innovation to equipment rentals. It is a $2.4 trillion space, he argued.

Booker Software CEO Josh McCarter

Our New Study: Momentum for Card-Linked Offers

BIA/Kelsey is out with my new paper on the status of card-linked offers, which is based on detailed discussions with 14 leaders of the card linking ecosystem, including credit card firms, tech vendors, payment processors, publishers and merchants. Most of the respondents are members of The CardLinx Association.

This week, I presented report highlights to The CardLinx Association’s Mobile Summit in San Mateo. Among the findings: universal agreement that card linking is seeing momentum among merchants; that some budgets for card-linked offers have begun to move from experimental to seven-figure spending; and that many key categories are participating, including Quick Service and Fast Casual restaurants, specialty retail and subscription services.

Challenges remain, however. Once seen in simple terms as a successor to the prepaid model pioneered by Groupon and Living Social, there have been some slow-downs in the business. As Coupons.com SVP Bruce Sattley noted at The CardLinx Summit, “There is not as much fervor among retailers as I would have thought a year ago.”

Clearly, the ultimate success of card-linked offers will be linked to better coordination among the various segments of the CLO ecosystem; the development of a constant stream of attractive offers; greater awareness of CLOs; the elimination of structural sales blockages; and the development of industry standards for card-linked transactions.

More information about the report, including purchase information, may be accessed here.

A Few Quick Thoughts on Apple’s Big Announcements

A lot of us were glued to our screens today to watch or catch the feeds on the Apple announcements re iPhone 6, iPhone 6 Plus, Apple Pay and Apple Watch. What will the new announcements mean to our local ecosystem? To date, Apple’s focus on local has mostly been geared to Apple Maps. But here are a few things:

1. More content for larger screens. When the iPad was introduced, vendors such as Matchbin bet the bank that it would lead to higher paid subscriptions and new types of advertising. It didn’t really happen. But more content is behind the firewall now than before. The intro of the larger iPhone 6 and the really big iPhone 6 Plus – on top of other Phablets by Samsung et al might push this evolution further – and spur the develop of new tablet-ready and phablet-ready local content.

2. A jumpstart for Digital Payments. Apple Pay is being launched as an NFC wireless payment mechanism. Unlike the struggling Google Wallet, it is being supported by most of the industry’s payment processors and financial institutions; allowing consumers to tie their payment cards to their phones. The introduction of Apple Pay won’t turn plastic extinct overnight – the payments card infrastructure is extremely deep. But it does validate NFC as a wireless payments technology, and should help build acceptance for digital payments. The challenge here: It is not converting Apple users. It is converting Millenials.

3. Enter the Apple Watch. It may take a while for iWatch and other wearables to really catch on beyond the early adopters, who do not really impact local outside of tech centers such as San Francisco. But combined with Apple Pay, the Apple Watch should help build acceptance for local store payments, public transport and other services (and impulse cash less buying.) Again, their immediate importance is in Apple’s validation of both wearables and NFC. See how LevelUp is excited about the prospect .

Apple’s system appears to be overloaded, but don’t forget to download the free U2 album, Songs of Innocence, which will be available on iTunes until 9/13.