Search results matching tag 'AOL'

Cybercrime on Facebook

Douglas McIntyre — Tue, 30 Jun 2009 10:49:00 GMT

Facebook is becoming one of the most dangerous places on the Internet. According to Reuters, “scammers break into accounts posing as friends of users, sending spam that directs them to Web sites that steal personal information and spread viruses.”

Since Facebook has, by some measures, more than 200 million members, the problem is extremely serious and could undermine the growth of the social network and cut into the time that current members spend on the site.

The cybercrime issue could also damage Facebook’s reputation with marketers, a reputation is just beginning to build in the hope of increasing its modest revenue by bringing in large national advertisers. Industry sources suppose that Facebook will lose a modest sum of money on $500 million of revenue this year, a tiny sum compared to the size of its audience.

Facebook is already struggling to get advertisers to pay attention. It is hard for marketers to target discrete demographics and behavior patterns, which is what large companies have grown accustomed to being able to do on Web portals like MSN, AOL and Yahoo! (YHOO). Facebook’s tens of millions for friends are often leery about giving out private information, and the cybercrime attacks are likely to increase concerns, making their behavior patterns even more impenetrable for advertisers.

Facebook’s success may lead to its failure. A huge collection of unruly people, some of whom have sinister intentions, is not the place that major marketers want to build or maintain their valuable brands.

MSN is a service of Microsoft.

Top Stocks blogger Douglas A. McIntyre is an editor at 24/7 Wall St.

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The customer service hall of shame

Kim Peterson — Wed, 10 Jun 2009 17:08:00 GMT

I love MSN Money's annual "customer service hall of shame" survey. The newest survey is out today, and all the usual suspects are on it: Comcast, Citigroup, Qwest, Sprint and Bank of America.

I also see my No. 1 pick for worst-ever customer service: AOL. When my father-in-law's Alzheimer's disease had progressed to the point where he couldn't remember anything, or even speak coherently, his wife called AOL to cancel his account. But AOL refused because she wasn't the primary account holder, and continued billing for years despite numerous phone calls, letters and threats of legal action. Nice one, AOL.

I'm glad MSN gives people a place to share these kinds of experiences, because these companies deserve to be talked about. Bad customer service should not be rewarded with silence and inaction. And some companies do change after being pummeled for the way they treat customers.

Sprint, for all its flaws, is trying hard to improve. Comcast is working with customers affected in the economic downturn, offering discounted packages and other compromises to hold on to subscribers.

MSN Money's Karen Aho writes that discount retailers and grocers are getting higher customer service marks in the recession. Even Wal-Mart received better grades. We rave about Wal-Mart's management here on Top Stocks, so the improvement in customer service is no surprise.

Times like these are a true test of corporate customer service. The companies that step up now will keep customer loyalty even when the economy improves.

Image credit: Tom Grill/Corbis

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U.S. families lose $11 trillion in net worth

Bernhard Warner and Matthew Yeomans — Fri, 13 Mar 2009 10:03:00 GMT

This post is from partner site The Big Money.

Your pockets no doubt feel a bit lighter these days, but just how much wealth has been lost in the tumult of the economic downturn? The Federal Reserve has the answer, releasing a calculation of the incredible shrinking income of the American family on Thursday.

Citing the Fed figures, the Wall Street Journal says last year the wealth of American families fell nearly 18%, "the biggest loss since the Federal Reserve began keeping track after World War II." American families, the engine of the global economy, saw their net worth slip by a remarkable $11 trillion, or, the WSJ points out, "a decline in a single year that equals the combined annual output of Germany, Japan and the U.K."

Even those at the top will be (if they haven't already) feeling the pinch. According to a front page WSJ article, New York Attorney General Andrew Cuomo is talking with Rep. Barney Frank and other lawmakers to devise "a plan to tie Wall Street pay to the long-term performance of the firms."

There is not yet any new legislation targeting fat-cat compensation, but Frank told the newspaper to expect something soon. "We plan to put laws into effect, no question," he said. "We have to address this 'heads I win, tails I break even' issue."

Yesterday's plea hearing for Bernard Madoff once again put in focus the growing venom the public feels toward dodgy businessmen. The New York Times reports celebrity gossip programs like Extra, Inside Edition and gossip blog TMZ have been following the Madoff case closely and are now "expanding their coverage of starlets and Hollywood break-ups to include billion-dollar business scandals and the economic collapse."

Uh oh, America's biggest creditor is not happy. This morning, China's Wen Jiabao said he was "worried" about the security of China's massive holdings of U.S. Treasuries and called on the U.S. "to provide assurances that the investment was safe," the NYT reports.

It is believed as much as $1 trillion worth of China's foreign currency reserve is invested in U.S. Treasuries and related notes backed by Uncle Sam, a sum that literally underpins the Treasuries market. Now Wen wants added assurances, asking the U.S. to "maintain its good credit, to honor its promises and to guarantee the safety of China’s assets."

The Chinese premier also demonstrated a little of China's economic might, saying the country can and would introduce new economic stimulus packages should it become necessary, the WSJ reports.

Wen's comments could put Europe in an awkward position. On Thursday, European leaders said the economic recovery measures they've already introduced are enough, rejecting calls by President Obama for the rest of the world's biggest economies to start introducing "American-sized spending programs," Time reports.

The markets got an unlikely lift Thursday from one of America's most beaten-up sectors. Revised retail sales for January actually showed a spending increase, the latest Commerce Department statistics show.

The WSJ says the report indicates "last year's sharp declines in consumer spending appear to be easing, though other factors continue to weigh on economic growth." Retail sales did fall slightly in February, the Financial Times points out, but less than economists were expecting.

With 70% of U.S. GDP coming from consumer spending, the numbers were viewed with a modicum of hope. "Clearly the consumer is not completely knocked out," an analyst told the FT. "The difficulty, though, is we still need jobs growth and credit markets to thaw out before we can have a normal recovery, and we don’t have that yet." The news helped the markets extend their rally for a third straight day, with the Dow now up 9.5% since Monday, the WSJ writes.

One of Thursday's biggest gainers was General Electric (GE), which climbed 13% on news that it was downgraded only a single notch to AA by Standard & Poor's. The rating agencies weren't done there. Fitch downgraded Warren Buffett's Berkshire Hathaway (BRK.A), knocking it from "a prized short list of the healthiest corporations," the Washington Post writes.

The Triple-A rating, the gold standard of fiscal fitness, is rapidly becoming extinct, BusinessWeek warns. The magazine says that after GE's downgrade, there are just five U.S. nonfinancial companies holding the top mark, including Johnson & Johnson, Exxon Mobil, Microsoft, and Automatic Data Processing. A fifth, Pfizer, is now "on watch for a possible downgrade, after Pfizer said it would borrow $22.5 billion to buy rival Wyeth."

And finally, there's now a Googler at the helm of long-suffering AOL. On Thursday, Time Warner chief Jeffrey Bewkes announced that Google senior vice president Tim Armstrong will take over as new chairman and chief executive of "the famously troubled" AOL, as BusinessWeek puts it.

The magazine is speculating that naming Armstrong will revive plans to spin off the online property. The appointment of Armstrong, who headed Google's advertising sales efforts in North America and Latin America, is meeting with some skepticism though.

"I'm not sure AOL's problem is something that you can fix with a body," Rob Enderle, a tech industry forecaster told the Washington Post.

This post was written by Bernhard Warner of The Big Money.

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Google: Display ads that don't suck?

Minyanville — Wed, 11 Mar 2009 17:31:00 GMT

The Internet gutted newspaper classifieds with text ads - and things may get worse in a hurry for the dead-tree industry.

Google (GOOG) plans to sell display advertising pegged to users’ interests, making illustrated ads the next to move online.

Surprisingly, Google is playing catch-up. Yahoo (YHOO) and Time Warner’s AOL (TWX) offer similar services. Google may have been slow to enter the field because it’s wary of privacy advocates who gripe that the search leader already compiles too much information on users. Furthermore, CEO Eric Schmidt said there were 3 major problems facing display ads:

"1. If you have a display property, it's very difficult to figure out which ad to show... We're in the process of building the equivalent of an ad exchange which will allow you to do that automatically and do it with scientific measurements. So today what people do is they use heuristics, and the heuristics in that space are terrible.

"2. The standardization of ad formats. There's not agreement at the level that it needs to be on the standardization of the delivery of the display, and especially around interactive and video ads. The future of display ads is not a static picture, but an ad that brings you in. That tells you a narrative."

"3. In our case is the construction of the business relationships with the large advertisers, which we're still working on."

Like other major webmail services, Google now scans the text of Gmail messages to detect viruses and spam. Google also uses its scanning technology to deliver targeted text ads that appear next to the message box. The text ads are served automatically, and no one reads the content of e-mails.

Individual users won’t be tracked by name, and they'll be able to opt out of Google’s new display advertising service. Google won’t draw information from users’ search requests, but from browser cookies. The cookies won’t be assigned to a user’s email account or documents that contain personal information.

Users who want to participate will be able to select from about 25 special interests, such as finance, cars, computers and sports - and (annoyingly) must update their options on each computer and browser used.

“Behavioral advertising” has prompted yelps from lawmakers and privacy advocates. The Federal Trade Commission last month said companies delivering ads keyed to users’ interests should clearly state how the program works and allow users to decline to participate.

The upside: Targeted advertising probably means that most general content on the Internet will remain free. It will have no affect on paid content offered by some websites.

Google is expected to launch its new advertising effort in stages as the company moves into display advertising worldwide. Google serves display ads to its subsidiary, YouTube, but only grabs about 1% of the US display advertising market. That will change - probably in a hurry.

Top Stocks blogging partner Todd Harrison is founder & CEO of Minyanville.com. This post was written by Minyanville Contributor Scott Reeves.

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The golden parachute takes flak

Bernhard Warner and Matthew Yeomans — Thu, 05 Feb 2009 12:15:00 GMT

This post comes from partner site The Big Money.

Fat cats, you've been warned. From here on in, pay packages for the executives of those stricken firms on taxpayer support must show "common sense," President Barack Obama chided yesterday from the White House.

The Obama administration is calling for a $500,000 cap on executive pay, and for restrictions on "golden parachute" payouts and when stock incentives can be cashed in (now, who would be foolish enough to do such a thing these days?) until the government assistance is repaid.

The limits run deep. As the New York Times reports, even "luxury perquisites like private jets and country club memberships" are to be scrutinized. The Wall Street Journal calls it "the most aggressive assault on executive pay by federal officials," one that shows Washington is determined to take greater control of the companies it bails out.

The moves are not retroactive, the WSJ points out, sparing, for now, the John Thains of the world. But the effects could have deep implications, even for healthy companies. Boards realize they can't "reward behavior that doesn't also reward shareholders," Arthur Martinez, a former CEO of Sears Roebuck & Co. and a member of compensation committees of other blue-chip firms, tells the WSJ. "That's on everybody's lips right now."

The NYT is not so sure, noting that the rules do afford clever compensation pros some leeway. For example, the newspaper writes, "the rules do not place limits on the size of [certain bonuses], which have become the biggest part of many compensation packages."

Bank of America (BAC) chief executive Kenneth Lewis is perhaps the best suited to tell you about Washington's new tough-love stance. According to the WSJ, Lewis flew to Washington in mid-December to inform Fed chief Ben Bernanke and then-Treasury Secretary Henry Paulson that he was throwing in the towel on Merrill Lynch.

Its books were that scary, sources told the newspaper. Lewis was talked out of the move by Paulson and Bernanke, but not before he left thinking he had won his bank some concessions for swallowing the toxic firm. Not so. In a follow-up call, Lewis was told the bank not only had no justification for walking away from the Merrill deal, but that if it made a stink it might find it hard to receive federal bailout funds in the future.

And, he was told, the government might play hard ball: forcing out Bank of America execs. "The threats left no doubt: The federal government saw itself as firmly in charge of U.S. financial institutions propped up since October by infusions of taxpayer-funded capital," the WSJ writes.

The list of duped Bernie Madoff clients was revealed yesterday, the WSJ reports, and one thing is becoming clearer: Even his biggest supporters have fallen victim to the scheme. On top of the list is Ira Sorkin, Madoff's own lawyer, "the man defending him on charges that he ran a $50 billion Ponzi scheme." His sons, brother, employees, and business partners show up on the list, too.

There are other big names as well: Hall of Fame pitcher Sandy Koufax; real estate developer Larry Silverstein; and HSBC, UBS, JPMorgan Chase Bank, Bank of America, BNP Paribas, and Citigroup. In Washington, meanwhile, Harry Markopolos, a private fraud investigator from Boston who tried to blow the whistle on Madoff 10 years ago, had his day on Capitol Hill.

House financial services subcommittee officials and Markopolos piled on Securities and Exchange Commission officials for failing to identify the Madoff fraud years earlier. They made little progress, the NYT reports. "In the torrent of criticism that Mr. Markopolos and lawmakers heaped on the S.E.C. and its senior staff members, some complaints were serious -- that the agency lacked the expertise to tackle major frauds by big players and had no systematic way of dealing with whistle-blowers," the NYT writes. "Others were sarcastic, with Mr. Markopolos saying regulators seated in Fenway Park in Boston would have trouble finding first base."

The competency of the SEC may be firmly in doubt, but some good news emerged from the hearing. According to the Financial Times, Markopolos testified that "the losses linked to Bernard Madoff may be closer to $15bn-$25bn rather than the $50bn the New York broker allegedly told US investigators."

Visa (V) shocked investors on Wednesday, posting a 35% quarterly profit surge on the strength of surprisingly solid card usage outside the U.S. Shares in the company soared in after-hours trading, TheStreet.com reports. But Visa may just be a blip in an endless flow of corporate bad news.

Time Warner (TWX) reported a $16 billion fourth-quarter net loss after writing down, as expected, the value of its AOL and Time Inc. units, Dow Jones reports. The lack of confidence in AOL was once again the theme of the day after it was revealed that Google (GOOG) presented Time Warner brass with an ultimatum: either they buy back Google's 5% stake in AOL or spin it off into a separate public company, paidContent.org writes in the Washington Post.

There is a fair bit of uncharacteristic gloom coming from the usually buoyant tech sector these days. First, tech bellwether (CSCO) said Wednesday Cisco Systemsit expects a revenue decrease of 15% to 20% this quarter, a sign that vital network infrastructure build-out is being put on hold around the world, CNNMoney.com reports.

If there is no quick recovery, CEO John Chambers warns, the company will be forced to consider significant layoffs, but he hastened to add that the company is considering no such cuts at the moment. Meanwhile, Microsoft (MSFT) founder Bill Gates is bracing everyone for a possible recession that goes far beyond what the leading economists are saying. "I think we have three, four, five years here that will be very tough," Gates said at the annual TED Conference, the San Francisco Chronicle reports.

Finally, even vanity is taking a hit these days. The NYT writes that there are signs the world's most pampered are cutting back on anti-wrinkle shots like Botox. "Wrinkled faces may be the latest example of recession chic," the newspaper reports, noting that Botox-maker Allergan reported a 3% sales decline last quarter.

This post was written by Bernhard Warner of The Big Money.

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Who are the naughty and nice CEOs?

Kim Peterson — Tue, 30 Dec 2008 17:52:00 GMT

Thousands of employees have gone to Glassdoor's site to rant and rave (but mostly rant) about their jobs and share salary information. They also have plenty to say about their CEOs, and Glassdoor reviewed the CEO ratings to find out who's been naughty and nice this year.

According to the reviews, the CEO that Santa should have rewarded the most this year is Art Levinson of Genentech, who was praised for making great products and taking care of his employees. Apple's Steve Jobs came in second place, followed by Lloyd Blankfein of Goldman Sachs.

Who was the naughtiest of them all? Steve Odland of Office Depot, who is accused of stifling retail stores with failed business programs and allowing underperforming workers to stay on board. Others on the list include AOL's Randy Falco and Greg Brown of Motorola.

Here are the full naughty and nice lists:

Naughty:

Steve Odland of Office Depot
Anthony LaFetra of Rain Bird, a private irrigation company in California
Randy Falco of AOL
Greg Brown of Motorola
Ron Rittenmeyer of EDS, which was acquired by HP this year
James Pouliot of CSAA Inter-Insurance Bureau, a car insurer in California
Kevin Sharer of Amgen
Lynn Blodgett of Affiliated Computer Services
Jonathan Schwartz of Sun Microsystems
John Donahoe of eBay

Nice:

Art Levinson of Genentech
Steve Jobs of Apple
Lloyd Blankfein of Goldman Sachs
Eric Schmidt of Google
A.G. Lafley of Procter & Gamble
Ian Davis of McKinsey & Co.
Ken Chenault of American Express
Jen-Hsun Huang of Nvidia
Shantanu Narayen of Adobe
Dan Warmenhoven of NetApp

EarthLink eyeing AOL's dial-up business

Kim Peterson — Wed, 20 Aug 2008 18:14:00 GMT

Time Warner plans to separate AOL's dial-up business from the rest of the company next year. The next step would be to sell it off, and EarthLink is the most likely buyer. But is it in EarthLink's best interest to invest in a dying business?

EarthLink CEO says that buying AOL's business is a possibility, according to the Wall Street Journal. The buy would allow EarthLink to scale up the business, which means more cash and opportunities to cut costs. Already, EarthLink's ongoing cost-cutting has lifted its share price from $7 a year ago to $9.09 today.

But EarthLink trades at only five times earnings, compared with 28 for the rest of the industry, the Journal notes. There's a lot of uncertainty about the potential of the dial-up business. At EarthLink's last big venture, citywide Wi-Fi networks, was a huge bust.

People are abandoning dial-up in droves. EarthLink's subscribers are down 30% from a year ago. But the hope is that the business will eventually stabilize with a core customer base that is perfectly happy with this slow, but less expensive, way of connecting to the Internet.

Right now, EarthLink's $10 monthly fee is a fraction of what cable and telecom companies charge for high-speed access. But what happens to EarthLink when those competing services get cheaper, as analysts are expecting?

At any rate, dial-up is still a short-term business play. And EarthLink's long-term strategy is unclear, the Journal says.

Related reading:

Citywide Wi-Fi goes bust

AOL being prepped for sale; will EarthLink bite?

Is EarthLink-AOL deal feasible, or prudent?

AOL cutting underperforming properties

Kim Peterson — Fri, 25 Jul 2008 19:13:00 GMT

AOL is cutting back some blogs and closing down its Bluestring, Xdrive and AOL Pictures properties. Some people are speculating the division is trying to pretty itself up for a sale, but I think it's going to take a lot more than that to prep AOL. This sounds more like all-around trimming of underperforming sites in an economy that no longer allows those indulgences.

Shares of AOL parent Time Warner are up 1% today to $14.63. Time Warner has reportedly been trying to shop AOL to the likes of Microsoft and Yahoo, but so far no one is biting.

AOL exec Kevin Conroy seems to lay it out straight in an email about the changes, which was posted at TechCrunch.

"There was a time at AOL when the strengths of our aggregate portfolio of products more than compensated for the weakness of an underperforming product," Conroy wrote. "The realities of the industry and market shifts in online advertising no longer make that possible. Simply put, every product makes a direct impact on our bottom line."

So AOL can't afford to subsidize its less-popular products. Makes sense. Keep in mind that AOL has rolled out a number of new properties this year as well, including WalletPop and Pixcetera, so a little house-cleaning may be in order.

Related reading:

AOL shopping itself to Yahoo, Microsoft

Time Warner separating AOL's dialup business

AOL shopping itself to Yahoo, Microsoft

Kim Peterson — Wed, 16 Jul 2008 18:06:00 GMT

The back-and-forth competitive drama between Microsoft and Yahoo has opened a perfect opportunity for Time Warner to once again shop its AOL unit. Time Warner is reportedly looking at either merging AOL with Yahoo (with Time Warner getting a minority stake) or selling it outright to Microsoft. Time Warner shares have risen more than 2% today to $14.26 on the news, with Yahoo shares up nearly 4% to $22.38 and Microsoft shares up nearly 3% to $26.90.

Time Warner has wanted to offload AOL for a while, but now Microsoft and Yahoo are scrambling for Plan B's in the aftermath of failed buyout talks. AOL has a growing ad network and an aggressive new strategy, and could be a decent acquisition for either company. The question is, where should it end up?

AOL is strong in display advertising, and it's bulking up its family of Web properties with a number of new sites. Yesterday brought the launch of a personal finance site called WalletPop and a photography site called Pixcetera. It's part of a new strategy to sell advertising: roll out lots of small, niche sites and let them grow or fail on their own.

Silicon Alley Insider argues that AOL is a better fit with Yahoo, since both companies' content sites and e-mail/IM systems complement each other. Yahoo's display advertising would get a boost as well. But Microsoft will offer more money, SAI says.

Kara Swisher suggests Microsoft could make good use of AOL's ad capabilities and Web properties.

paidContent says that Yahoo could appease angry shareholders with an AOL merger and show that the company can grow without Microsoft. On the other hand, Microsoft could use AOL to gain more traffic and become stronger in advertising.

Search Engine Land comes out of left field with this idea: Microsoft could buy AOL and then buy Yahoo's search business.

Disclosures: I don't own shares of any companies mentioned in this post. And while Microsoft owns this blog, Microsoft does not control, censor or otherwise have any editorial influence over what I write.

News worth reading today

Kim Peterson — Wed, 28 May 2008 17:53:00 GMT

Some headlines that caught my eye today:

Who has the worst customer service? MSN Money went snooping, and Time Warner's AOL topped the list. I agree, having seen AOL's horrible service firsthand. Short version of a long story: A family member with Alzheimer's could no longer speak -- let alone remember his AOL password -- and AOL wouldn't let his wife discontinue the service because she wasn't the primary account holder. His wife had to pay for years, and threaten legal action, before AOL canceled the account. Thanks, AOL.

Delaware has the best broadband. A new report says Delaware tops the country when it comes to the number of Internet connections using "high broadband" -- meaning speeds exceeding 5 Mbps. About 60% of Delaware's Internet connections fall into this category. Rhode Island and New York round out the top three. I was surprised to see Nevada and Oklahoma next on the list, given that vast rural areas aren't the best environment for fast broadband.

Google admits MySpace isn't the cash cow it expected. CEO Eric Schmidt tells a German reporter that the social network isn't monetizing as well as he thought. MySpacers are too busy socializing to click on ads. "When you are in a social network, it is not likely that you'll buy a washing machine," he said.

TiVo adds Disney movie rentals. Score for TiVo, whose stock is down 3% today in anticipation of its Q1 earnings announcement this afternoon. The company has partnered with Amazon's Unbox service to offer movie rentals, but Disney movies aren't available on Unbox. TiVo went out on its own to get Disney, and has worked out an arrangement with CinemaNow.

Review. Analyst Michael Gartenberg reviews the Netflix/Roku set-top box. "This was the easiest box I have ever configured. It was a matter of plugging into the wall and then the TV."