The Top Five Social Media Mistakes

           Here's a list of the biggest mistakes I've seen business owners make with social media and how to avoid them.

1. Talking One-Way: Many business owners start posting status updates because they think that is all they need to do to grow their company online. But the way they do it cuts off any chance of having a two-way conversation. In today's messaging marketplace, consumers want to be heard. If you are just talking to customers but not letting them to talk back and engage with you, then you are wasting considerable time and effort online.

When you go online and post in a status update area, do not just talk at people; speak with them. Tag people in a post and ask them a question. Tagging simply means that you write directly to a person on his or her Facebook wall or Twitter feed. On Facebook you put the "@" sign in front of their profile name. For Twitter, this sign would go in front of their username.

Related: 20 Ways to Make the Most of Your Social Media Marketing

Also, take a few minutes to stop by the "neighborhood" of each social site that you frequent and say hello, find out what your neighbors are up to and post a quick reply. By actively engaging in these spheres, you keep your business top of mind.

2. Not Knowing When to Ask for Business: Many online businesses have conducted conversations with their connections for quite some time now, without translating this dialogue into any sales. Some companies fail to ask for business online or they ask for it too soon. You need to build some rapport first. People will buy from you only as much as they trust you. Set up a rule to convert conversation into clients or customers.

I follow the 3/3 rule, whereby I speak with someone no more than three times, for not more than three minutes on each occasion, freely offering tips, exploring another company's branding or directly helping them, before I ask that person for some business. When I do the asking, I send the prospective customer a closing script or a post to indicate how I can help further.

3. Shiny Object Syndrome: With all the flashy new websites and with social networking capabilities changing by the minute, no wonder you are swept up in checking out a new site or a fresh feature when you go online. But instead of spending countless hours exploring new dazzlers, devote only a set amount of time each day or week to review the new happenings online. Otherwise you will be sucked into a vortex of shiny objects and before you know it your week is over and you have not converted any online relationships into profits. Flag interesting sites or novel capabilities in a folder or on your calendar to revisit later for research and development.

4. Poor Messaging: A consumer can become overwhelmed by dealing with all the wrong messages that are crowding the Internet lately. Company owners are projecting the wrong image through what they say online. In some cases, their posts have absolutely nothing to do with their company, brand or personality.

Too many entrepreneurs do what I call panic posting -- just posting for the sake of posting and sharing ideas that do not highlight their overall brand image. If you have a serious company, don't post jokes and funny videos. Instead, post statistics and updates about your company's team members. If your business has a relaxed image, inject humor into your posts. A funny YouTube video can go a long way.

Related: 10 Laws of Social Media Marketing

5. Sales Faux Pas: Writing how much your products or services cost in a status update or post is not only a time waste, it is plain wrong. Would you walk up to someone before you have even introduced yourself and say that your latest product is now available at a certain price for a limited time? If so, you would probably end up not only talking to yourself (the person would walk away), but also you likely would lose the entire room of people as customers.

Try sharing the pros and cons about your industry or product category and ask people to provide feedback and participate. This is one way to bridge the distance between you and your prospects and get them involved with your company's brand. Ultimately newfound fans will promote you without being asked because they feel included. The fact that you asked and listened goes a long way.

Whether yours is a one-person business or it has 150 employees, take time every month or quarter to examine your social media practices. You could save thousands of dollars and hours -- and have more to show for it.

Five Truths About Social Media Marketing

Size matters. It just does. Much like the size of a company's email list has obvious importance to a brand, so does the distribution a brand has on Facebook. Of course, quality of userbase is of utmost importance. Having a large, engaged group of self-identified "fans" or "followers" on Facebook represents a highly valuable distribution channel. Take, for example, American Express. They have over 2 million Facebook fans, or 2 million people to whom they can deliver customer service, notify about new offers and engage with on a recurring basis.

Ultimately, social media is about sharing, and sharing to a vacuum is useless. The more people signing up to view your message, the more likely you'll be able to effectively cultivate and monetize these relationships.

The medium is the message. The medium is completely tied to the message in social media -- the two are inextricably linked. This isn't an issue of substituting technology in place of relevant brand messaging. Rather, this amazing "new media" (we'll get to that point later) has given brands and marketers an opportunity to position their products and messaging in a unique way. The best brands are doing a phenomenal job of seamlessly integrating the two, and the best and largest platform, Facebook, is working tirelessly to empower brands in every way possible. (Check out facebook.com/marketing, facebook-studio.com, and Facebook communities like Clinique, Starbucks, Audi and American Express.)

Social media gurus really do exist. They certainly do. I'd qualify many of the talented social-media marketers and Facebook employees I've interacted with as social media gurus. And if you need names, consider Gary Vaynerchuck from Wine Library TV and Nick O'Neill from AllFacebook.com. If you're suggesting that too many people are trying to own the title of social media guru, then I can agree with that. However, there are incredibly bright people innovating within social media. Consider these folks; they're gurus and worth engaging with.

Social media is 'new' media. Yes, textbook-marketing principles (the 4 P's, Porter's 5 Forces, etc.) are still the backbone of brand marketing, and still hold significant weight today -- as they should. However, the past few years have proven that certain traditional forms of marketing and advertising are yielding way to this wild and crazy "new media" (see the magazine, newspaper and radio industries for more info.) The best social-media marketers are expertly displaying the basics of marketing and their corporate goals within this "new media" -- be it with likes, hashtags or check-ins.

Social media can be effectively outsourced to a PR firm. If you want to qualify that statement by saying that hiring a PR firm doesn't necessarily equal social-media success, then I would agree. However, there are many PR firms and social-media agencies that consistently make sure they understand a client's values and goals before publishing to the social-media ecosystem on their behalf. We really like what Rockfish Interactive is doing Bicycle Playing Cards, for instance. Rockfish, a digital-marketing agency that's based in Rogers, Ark., recently helped the 143 year-old playing-card maker relaunch its online social presence on Facebook, Twitter and YouTube. These firms are doing amazing things to harness the power of social media for their clients.

How to Build a Winning Brand?

Of all the startup brands, Starbucks still represents the gold standard.

Starbucks made the mundane act of buying a cup of coffee into an experience. 

It did so by creating a memorable brand: a unique name and a memorable logo that made coffee not just coffee, but a welcoming, comfortable place to go and be seen.

The Starbucks brand created a culture. 

Here's a look at how yours can do the same.

Step 1: Craft your image

Creating a brand perception requires intrusion. You are trying to position yourself with people who don't want to change their purchasing decisions. 

Your brand must be powerful enough to force them out of their routines.

It all starts with a name. With enough frequency of the message, any name can become memorable. That could be a name that explains, like Jiffy Lube or Toys"R"Us. 

Maybe it's a made-up word or obscure reference, but one with the power to create a lasting emotional connection (think Starbucks again). 

Obscure brand names are unique from their competition and often become among the most memorable. It could also be a family name, which implies the person behind the brand name has a credibility to be in this business, a pride of workmanship and a moral standard.

Your logo is just as important as your name. 

The logo is the first visceral connection the consumer makes with the brand. It triggers the brand perception. 

The first measure of a logo is that it answers questions: 

1. Who are you? 
2. What do you do? 
3. What's in it for me?

There are other practical considerations in logo design:

1. It must reproduce well in various sizes and media.
2. It should reflect the sensibilities of the target audience.
3. Its intention and message should be perfectly clear.
4. It should be easily and uniquely recognizable.

At its best, a logo should convey an emotional connection as well as personality. The cleverness in a conceptual logo should get a reaction--an "aha!" --while conveying what you do and capturing the personality of your business.

Step 2: Get Known

Branding happens in the minds of consumers. The promises behind the brand create its appeal, but getting the word out is still what brings in the customers.

Traditional media exposure--advertising, promotion, trade shows, direct marketing, events, directories and even search-engine marketing--costs money, and most startups don't have much. Social media is a great equalizer for the cash-strapped entrepreneur. 

Here are some fundamental guidelines for building your brand online effectively using Twitter, Facebook, YouTube, blogs and other social media outlets:

1. Listen, don't just talk. The days of saying anything that comes to mind or reporting what you're having for dinner are over. Hear the conversation first, then participate.
2. Ask, don't tell. The goal is developing an exchange. Force your opinion and you'll end conversations before they begin.
3. Be real, and have a story. Behave in the character of the brand. Give the character depth and be genuine.
4. Be interesting, and give. Add to the conversation by offering up whatever knowledge you have.
5. Be interested, and respond. Hear a person's need, then share expertise in a personal way that has no motivation other than to help.
6. Have a payoff, and say thank you. Reward your followers with something special and exclusive. Appreciate them for following your brand and letting you into their world.

Step 3: Know What the Customer Wants

In launching a business with limited funding, the potential for successfully establishing a brand is far too often based on the zeal of the entrepreneur's belief in the disruptiveness of the unique business idea rather than market intelligence. That doesn't usually work.

To increase your brand's chances for success, you need to know five things:

1. How strong is the perception of your brand, and what would make it stronger?
2. What is the true level of consumer satisfaction for competitor brands?
3. Will your brand introduce emotional connections with consumers who do not currently exist in the market segment?
4. What percent of the market will consider change because of the disruptiveness of your product?
5. How much awareness can you gain for the brand?

Brands that Delight

One of the observations of market research firm Brand Keys, which compiles the annual Customer Loyalty Engagement Index, is that "delight is the new differentiator." 

Here are the index's top 10 brands for evoking customer delight:

1. Netflix

2. Apple

3. Walgreens

4. Discover

5. Hyundai

6. Mary Kay

7. McDonald's

8. J. Crew

9. Samsung

10. Nikon

The answers to those five questions will determine your chances for successfully branding your product. There are various methods for conducting consumer research, like focus groups and e-mail surveys, that determine what would make a consumer recommend your brand to a friend. If cost is a crippling concern, you must at least go out into the market, observe consumer behavior over a relevant period of time and keep tallies of each type of consumer behavior.

To succeed, you need to know what is the true perception of your brand, how many people hate it, how many it appeals to strongly enough that they would advocate for it and how that acceptance stacks up against the competition. The most successful companies pick a competitive position from which they know their brands can win.

Brand Win: Go Daddy

Branding experts groan every time they see a Go Daddy Girl in a tight white tank top appear on their TV screens, which happens between 500 and 900 times a week on cable. The company's edgy branding strategy has little to do with the very unsexy business of domain registration and website hosting, and Go Daddy acknowledges that its suggestive marketing alienates part of its potential customer base.

But it's hard to argue with the results. The company had 16 percent of the new domain name market. After Go Daddy aired its first Super Bowl commercial that year spoofing Janet Jackson's wardrobe malfunction in the previous Super Bowl, its share jumped to 25 percent within weeks. Six years later, Go Daddy owns more than 50 percent of the market of new domain names, and the company is a household name--even if a big chunk of people still don't know exactly what it does.

"It sounds so simple, but if something works, I keep doing it, and when it doesn't work, I stop," says Bob Parsons, Go Daddy's founder and CEO, and the brains behind the brand strategy. "The edgier the brand is, the better it works. The point is to keep it fun."

In reality, though, Go Daddy's branding--including the unusual name and the child-like logo of a man with sunglasses and a star on his head--is classic advertising. It creates curiosity and promotes name recognition, something most tech services have never done well. But what really defines the company's success is what customers discover once they are enticed to learn more.

"None of this stuff with branding is going to work if you can't deliver," says Parsons, noting that of the 3,000 people on the payroll, 1,800 work in customer service. "We provide the best service of anyone in the world. We even call customers to thank them for $10 purchases."

Go Daddy has tried other advertising routes, including one appealing to busy moms and another touting its U.S.-based call centers. Neither pushed people to the site like the edgier Go Daddy Girl commercials, which this year feature NASCAR's Danica Patrick and fitness guru Jillian Michaels. Parsons says when the provocative advertising stops working, he'll try something different. Until then, his girls will keep teasing NFL fans and late-night cable watchers.

"We've taken domains and websites, which is about as exciting as a cup of sawdust," Parsons says, "and made people pay attention."

Brand Fail: Fit Fuel

Major magazines were featuring Sean Kelly and Luke Burgis as two of America's entrepreneurial wunderkinds. The duo's business, Fit Fuel, was on the fast track to becoming the next big online retailer. The next big brand in fitness was no longer even a brand. Somewhere between the accolades and fast growth, the company lost its way, and a big piece of the downfall was bad branding.

Fit Fuel was conceived as a service to help vending machine companies stock their slots with healthy choices instead of chips and soda. But soon after launch, Kelly and Burgis realized the majority of their customers were not other businesses, but regular Joes looking for good prices on PowerBars and trail mix. They ran with it, reshaping the company into a fitness product e-tailer. Growth was exponential, bringing in $5 million per year at its height, and they moved to a giant warehouse in Las Vegas and jumped from five employees to 20.

That ramp-up proved to be the downfall. Fit Fuel was shifting from selling nutrition products to stocking all things fitness, including books, exercise equipment, apparel and sexual enhancement products. "We were like the Amazon.com of fitness," Burgis says. "But people were confused about who we were, and we didn't have capital. We couldn't survive a price war."

Sean Kelly left Fit Fuel to focus on the healthy vending machine concept, and Burgis was left to figure out the company's direction. He started modeling his business on shoe e-tailer Zappos, thinking a hip, service-oriented company culture could define his brand. Burgis renegotiated his contracts so they could offer two-day shipping. Customer service was impeccable. But it didn't resonate with shoppers.

"It was what I wanted the company to be, not what customers wanted," he says. "We put our marketing energy into the wrong things, and we were carrying way too many products."

After failed takeover negotiations with Zappos the year before, Burgis declared bankruptcy, and Fit Fuel was shuttered. But the experience didn't go to waste. Now at his new venture ActivPrayer, a company that trains coaches to run Christian-focused group fitness classes, Burgis is very keen on what his customers want, and the brand lines up with his strengths.

"Customers are very interested in who we are and in how we do business," Burgis says. "At Fit Fuel, they just wanted their product in a reasonable amount of time. They didn't care if I was a good guy or not."

~ Jai Krishna Ponnappan

Find Jai on Twitter | LinkedIn | Instagram

Five Reasons Why Websites Still Matter

           You know you must leverage Facebook, Twitter and word-of-mouth marketing to increase awareness of your brand. But the fact is, websites remain infinitely more popular with consumers than all of the business pages on social media sites combined.

Only 22 percent of those of us online in the U.S. visit a branded social networking page such as those found on Facebook, while 62 percent of us regularly visit branded websites, according to the latest Global Web Index report. If you were starting to let your site become outdated or haggard, consider a refresh. After all, as these figures note, websites still matter.

Here are five reasons why you shouldn't ignore yours:

1. Branding: Since it's your site, you set the design, which affords you the flexibility to optimize the user experience in ways that directly support your business model and brand-related goals. There's no competition on your website, just a branded experience that you direct yourself.

2. IT and Engineering Jurisdiction: When you control your own site, you have complete jurisdiction over its code, hosting environment, page count, content, plug-ins and more. Just as I mentioned above with regard to branding -- here too you have the elasticity required to make small or sweeping adjustments at will, an advantage you don't get with third-party websites. With sites like Facebook, you can change minor graphics and some content but not code, navigation scheme, server speed or the graphic user interface.

3. Content: Speaking of content, more of it can be found on your own website than on a third-party utility or platform, and none of it competes side-by-side for your visitor's attention. Create compelling and useful content that speaks to why someone is visiting your site and you stand a higher chance of that visitor taking action with respect to your products or services. And since inventory (i.e., web pages) is virtually unlimited on a site under your control, you have ample opportunity to add additional content and calls-to-action in the format you deem most appropriate.

4. Search Engine Optimization (SEO): If garnering multiple, relevant and highly positioned placements in the SERPs (search engine result pages) is part of your sales and marketing strategy, a website is a must. When properly coded and managed, your site delivers natural and sustaining search results that drive qualified traffic to the exact pages on your site where you want visitors to be.

5. Analytics: While many social utilities, platforms and networks provide access to data related to demographics associated with who accesses your profile and how often they do so, website analytic tools go much deeper. They can provide you with the type of business intelligence you need to determine in real-time how your online marketing performs and stacks up against the competition.

Don't think for a moment that I'm suggesting you drop social in favor of your own website. What I'm advocating is that you lead first with your website, followed by leveraging social, email marketing, point of purchase, mobile, apps and other forms of marketing and outreach to drive traffic to your website where you can generate qualified leads who convert to paying customers.

Pivot or Persevere? The Key to Startup Success

The decision of whether to pivot and when to persist is the primary issue that every entrepreneur ultimately encounters in creating a successful product. 

A pivot is a planned course adjustment created to test a brand-new core theory about the product, company strategy, and growth driver. 

Entrepreneurs must regularly ask themselves an apparently straightforward question: 

Do we need to make a significant adjustment or are we making enough progress to assume that our initial strategic premise is true?

The erroneous choice to persist is the biggest destructor of creative potential. Companies that are unwilling to change course in response to market input risk being stranded in the land of the living dead, where they consume resources, the dedication of workers, and other stakeholders without making any progress.

It's not about producing additional features or widgets to increase startup productivity. 

It involves directing our efforts toward a company and a product that are actively trying to provide value and spur growth. 

In other words, effective pivots lead us in the direction of expanding a long-lasting company.

Failure is a necessary component of learning. 

The issue with releasing a product and then waiting to see what occurs is that you are sure to succeed in waiting to see what happens. 

But what follows? You'll probably have five ideas on what to do next after you have a few clients. Which one ought you to hear? 

In order to pivot, we must have one foot firmly planted in what we have learnt so far while fundamentally altering our approach in order to pursue even more verified learning.

The majority of business owners who have chosen to pivot will tell you that they regret not acting sooner. There are three explanations for why this occurs.

Entrepreneurs may draw erroneous conclusions and live in their own private universe thanks to vanity metrics.

It's almost hard for an entrepreneur to really fail while their premise is uncertain, and without failure, there is often little motivation to make the drastic changes necessary for a pivot.

Many business owners are terrified. Failure recognition might result in dangerously low morale. 

The greatest concern of most business owners is not that their vision will turn out to be incorrect. The possibility that the idea would be rejected before having a chance to stand its own is even more terrible.

Entrepreneurs must confront their anxieties and be prepared to fail—often in front of others. 

In reality, an extreme form of this issue affects business owners who have a high profile, whether due to their own notoriety or the fact that they work for a well-known company.

A clear-eyed and objective perspective is necessary for making the pivotal choice. For any startup, it is usually emotionally charged and has to be dealt with in a methodical manner. 

Setting up the meeting in advance is one strategy to address this issue. Every company need to have frequent "pivot or persist" meetings, in my opinion. 

In my opinion, less than a few weeks or more than a few months between encounters is excessive. Every new business must choose its own speed.

~ Jai Krishna Ponnappan

Find Jai on Twitter | LinkedIn | Instagram

From Grad Student to Social Media Millionaire

         Skeptics say social media hasn't existed long enough to produce experts. Clearly, those folks haven't met Shama Kabani. The 26-year-old wrote her master's thesis for the University of Texas at Austin about Twitter--when it had only 2,000 users, not the 175 million it has today. She hosts a web TV show about technology. Her 2010 book, The Zen of Social Media Marketing: An Easier Way to Build Credibility, Generate Buzz and Increase Revenue, is the No. 4 seller about web marketing on Amazon.com.

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And those are just the side projects. In 2009, at 24, Kabani founded The Marketing Zen Group, a social media marketing firm in Dallas. The company, which she launched with $1,500 of her own money, specializes in all aspects of web marketing for clients--from Facebook and Twitter to blogs and video.

"We are in an age where people are tired of the faceless corporate culture," the Texas native says. "Every day, I ask myself the same question: What can I do today to increase value for our trusted audience (blog readers, TV watchers, Twitter followers, etc.), for our team and for our clients?"

That value means different things for different clients. For k9cuisine.com, a Paris, Ill.-based online retailer of dog food, Marketing Zen established blog and Twitter presences and cultivated relationships with pet-related bloggers. For Arthur Murray Dance Studios in Boston, the company optimized a website to generate more targeted sales leads.

Marketing Zen wasn't always about social media. Kabani says her original plan was to start a general consulting agency. But she quickly realized her passions--and all the best gigs, for that matter--were in the social media space, so she tweaked her strategy.

This modified approach was about consulting with clients, telling them how to better market their businesses online and letting them run with it. Meanwhile, Kabani learned two things: Clients wanted not just a consultant, but also a firm that could implement ideas; and social media is only part of a larger marketing puzzle that includes building solid websites and developing smart search engine optimization.

"That is how we went from being a consulting company to a company that takes over web marketing for our clients," she says. "Our value proposition is simpler now: We drive inbound leads for our clients and increase their online brand visibility."

Related: How to Grow a Business Organically

That thinking appears to be working. Kabani declines to share specifics, but she notes revenues grew more than 400 percent last year alone, and she expects Marketing Zen to be a "multimillion-dollar company" by the end of 2014.

One of the secrets to Kabani's profit model is low overhead. She hired almost all her 30 employees virtually, and many key people work remotely. At least a dozen Marketing Zen employees are in the Philippines.

Another key differentiator: legitimate engagement. Kabani prides herself on having her clients engage with followers, rather than simply talking at them. For Dave Kerpen, CEO and co-founder of competitor Likeable Media, this is a distinguishing characteristic. "She understands the true meaning of community engagement," Kerpen says. "She gets that the conversation must go both ways in order to satisfy customers."

Kabani is also giving back: Earlier this year, she was part of a delegation of businesspeople from the U.S. and Denmark that traveled to Egypt to educate young entrepreneurs. It's all part of her far-reaching quest for enterprising youth to tackle the new global business market.

"The world we live in today is not the world of our grandparents, or even that of our parents," Kabani says. "A college degree does not guarantee success. Young entrepreneurs have to create their own opportunities. The economy needs fresh blood and bold new ideas."

Why You Don't Want to Be the Low-Cost Leader

           When you select a pricing strategy--that is, decide how you wish to price your products or services--what is your goal? The first answer that comes to mind may be to maximize profits, but that isn't a good enough answer.

Think about it this way: When your company develops new products or invests in a new marketing campaign, what's the goal? To maximize profits. But that doesn't tell you what types of products to develop or which customers to target or what message to deliver.

Both Ikea and Mercedes want to maximize profits--and they use very different pricing strategies to do so--but we don't think of Ikea and Mercedes in terms of their pricing strategies. We think of them in terms of their products and positioning. Ikea is a fun, designer, starter furniture store; Mercedes is a luxury automobile manufacturer.

Both companies set their pricing strategies to be consistent with their overall goals and the vision of who they are. Price follows their corporate strategy--not the other way around.

What is your overall strategy? It's the general description of how you compete in the market. It is your sustainable competitive advantage. Your strategy should be based on how your product or service differs from your competition, from product features or location to marketing or the breadth or focus of your offering. It can be many things, but it shouldn't be price.

Related: How Pricing Can Power a Turnaround

Why not? Because pricing is not a sustainable competitive advantage. Prices can change almost instantly. Your competitor can change prices just as quickly as you can. What if you find that optimal price, that psychologically perfect price that magically makes all customers want to buy from you? Your competitors will copy it--immediately. Any competitive advantage you may gain with pricing is not sustainable.

The one time that pricing can be a corporate strategy is when the company is positioned as the low-price leader. That's Walmart. If you adopt low price as your strategy, then your business must be continually focused on lowering and controlling costs--like Walmart. You are attracting the price buyers, customers who are not loyal, but are looking for the lowest price. Once a competitor figures out how to sell a similar product for less, they will charge lower prices and you will struggle. If another company figures out how to sell products for less than Walmart, Walmart will be in trouble. Knowing this, Walmart maintains a laser-sharp focus on keeping costs down. If you make low price your strategy, you have to be like Walmart, continuously lowering your costs so your competitors don't catch up.

You may be thinking about a different price-based strategy. "My product is as good as a Lexus, but less expensive. I'm going to make that my strategy." Don't do it. You may be able to have that product positioning for a short while, but it's not sustainable. The market will morph, and your position may or may not exist in a few years. You have competitors on both sides of you, above and below, either of which may be able to steal your position, because your position is just price.

Related: Five Signs It's Time to Change Your Prices

Consider Walmart's discount retail competition. Kmart is having a difficult time competing with Walmart. Same-store sales continue to decline even as they come out of the 2010 recession. On the other hand, Target's same-store sales figures are growing rapidly. What's the difference? Although there are many factors, one is that Target has a unique positioning. It is described as "trendy," "cool" and "a hip discounter." Kmart may have the Martha Stewart brand, but the company as a whole doesn't own a position. There doesn't seem to be any real differentiation between Kmart and Walmart--other than price, which Walmart wins.

Target's success isn't based on price. They could not beat Walmart in a low price battle. Target's success is because they own the unique positioning of "hip discounter." There is only room for one company with lowest prices, and that company is Walmart, at least for now.

The strategy of low-cost leader is a rough-and-tumble position. Everything is done without frills. Once you get too comfortable, someone else hungrier than you will do it with less and steal your position. This is not a fun position to defend.

Even for companies that aren't low-cost leaders, you must still focus some of your energy and resources on costs. Target, Kmart and every company in a competitive situation still win and lose customers based on their prices. And to have competitive prices, they must maintain relatively low costs. Price is a factor in every customer's decision, and if one company's costs are much higher than another's, then they run the risk of losing on price.

Richard Branson on Why Biggest Doesn't Mean Best

           Editor's Note: Entrepreneur Richard Branson regularly shares his business experience and advice with readers. What follows is the latest edited round of insightful responses. Ask him a question and your query might be the inspiration for a future column.

Q: Do you deliberately pitch the Virgin brand as good value? If your prices are competitive, is it still possible for the public to regard your products as "the best in the world"?
-- Bobby Hall, Australia
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A: Not only can a small company be the best, but it has to be the best to stand a good chance of thriving in today's competitive world. Then, once it reaches the top spot, it has to strive to do better every day, to ensure customers buy its products or services. Large scale can bring a company many advantages: a hefty marketing budget, established brand awareness in target markets and dependable distribution networks. But, luckily for the smaller players, a business's size does not guarantee better products or great service.

Twenty-seven years ago, when Virgin Atlantic had just one secondhand 747, we were able to compete with British Airways, which had a large fleet, a massive marketing budget and the dominant position at Heathrow, the U.K.'s leading airport.

Related: Richard Branson on Finding and Selecting Investors for Your Startup

We set out to be the cheapest on the block, but only in our specialized niche. I had learned from the collapse of Laker Airways, the British budget airline, that competing on price alone was not a good strategy in the aviation industry. Since its profit margin was meager, the company was vulnerable to larger competitors' price attacks. Instead, we provided "first-class service at a business-class price," which allowed us to generate the profit margin we needed to continue investing in the business while earning a reasonable return.This strategy made a virtue of our airline's small size and modest start, shaping a very strong culture based on great customer service and our not being afraid to try new things. Virgin Atlantic's size was an asset: We were nimble and could innovate quickly, whether we were introducing new entertainment systems, better food, chauffeur-driven cars or our quirky lounges. There was no bureaucracy to slow us down, so we could direct money and resources to the right areas quickly and effectively.

Our small size also meant that we built close relationships with our customers. A business's key asset in this area (size brings no benefit) is its people. Back then, many great people applied to work for us because we were a small group and had more fun. They were so important to our success that we quickly learned to focus on staff retention, and this paid off. Our employees knew from experience how to provide the best possible service.

Without a large frequent-flyer scheme or network on our side, we learned to rely on our two strengths: customer service and personality. We drew attention to our unique offering through our famously cheeky ads, which were topical, timely and often poked fun at our competitors. This attracted notoriety and generated brand recognition.

Overall, we made sure we provided great value for money, building a loyal base of customers who identified with the Virgin brand. Our company soon won market share from British Airways; in essence, we had used a small business's budget to create a big brand. And in the long run, Virgin Atlantic has become one of the strongest brands in aviation.

Related: Richard Branson on Managing Experienced Workers

We applied what we had learned when we started up Virgin Blue in Australia and Virgin America in San Francisco. Virgin's culture was now firmly focused on developing products and services from the customer's point of view and trying to do things better than anyone had done them before. We always try to shake up an industry by showing just how high standards ought to be.

Virgin America will never be the same size as American Airlines or United Airlines -- two of the biggest players in the industry -- but we can out-maneuver and out-think them. The onboard experience we provide to our customers is very different from that of the legacy carriers: we provide great entertainment, free wireless Internet service and great food.

Since its inaugural flight in August 2007, Virgin America has won a number of awards for service and quality. During Virgin Atlantic's first years, we would have been obliged to launch a massive newspaper, television and billboard campaign to draw attention to these achievements, but advertising has changed a great deal over the past decade. Now we can use the power of social media -- with the help of clever viral campaigns, e-mail communications and online advertising -- to generate support, coverage and sales.

This change means that a company's large size is no longer a guarantee of its continuing success. With the playing field more level, big brands can no longer rely merely on expensive marketing campaigns to generate sales. Smaller players can build their global presence by using social media and word-of-mouth to promote their services without spending a lot of money.
This has helped smaller players to punch above their weight. Biggest does not mean best, and it never has. Now, even if they don't have the biggest wallets, small companies can achieve recognition as the best in the world.

Ways to Build Online Traffic and Boost SEO

           "If you build it, they will come." It worked in the movies, but just putting up a website is no guarantee that it will draw traffic. You could buy ads, but if you're unable or unwilling to "pay to play," you're likely facing the increasingly daunting challenge of attracting customers to your website on your own.

Millions of sites are competing for users' shrinking time and attention. The hard truth is that the top three unpaid positions on the first page of Google search results receive about 58% of all clicks, according to online-marketing service Optify. Websites that appear on the second page? An average of 1.5%.

Your best bet for attracting potential customers without spending money on advertising is creating content of such value that audiences can't help but feel compelled to seek it out or pass it along -- on a site that makes sharing it easy.

But how? Here are ideas for getting started publishing content that can help you increase online traffic, improve search-engine optimization and possibly go viral in the process.

Original Articles -- Time investment aside, online articles cost little, can be easy to generate, and provide a way to brand company representatives as experts. Your articles could offer instructional learning, new methods for tackling problems or insight into best practices or industry leaders' views. Here are just a few article formats to consider:

Essays
How-to articles
Tip sheets
Checklists
Guidebooks
Interviews

Grab readers with arresting headlines, bold statements and an authoritative voice. Use humor and catchy hooks (for example, "5 Ways to Torture and Infuriate Your Employees" or "The Wrong Way to Do Downsizing").

For maximum impact, build content around popular search-engine keywords, dilemmas and industry memes. Avoid terms or references that might date your articles.

Keep in mind that less can be more. Be succinct and summarize wherever possible.

Videos and Podcasts -- Barriers to entering the online "broadcasting" business are lower than ever. Armed with a portable digital video camera ($100-$600), USB microphone ($20-$200) and a spare hour of time, nearly anyone can create compelling short or extended-length shows. Ideally, videos are best kept under three minutes and audio recordings to five to 15 minutes. You'd be amazed how quickly content can be built and distributed. Even a simple webcam can provide a ready vehicle for recording.

Here are a few ideas for videos or podcasts:

Behind-the-scenes footage from your office
Making-of style documentaries
Product demonstrations
Customer testimonials
Webinars
Q&As
Panel discussions
Uniquely-branded video programs ("Engineering 101")
Custom training segments ("Launch Your Leadership Career")
Exclusive sit-down interviews ("A Conversation with Seth Godin")

All should be stamped with your logo, prominently feature business contact information and be promoted on aggregators like YouTube, Vimeo and Metacafe. It's also vital that users be allowed to pass along links and embed them on their own websites, as well as access and download audio recordings through popular online distribution services such as iTunes and Podcast.com.

Blogs, Forums and Online Communities -- Your company wouldn't be in business if it didn't employ subject-matter experts in your field. A simple way to build trust, cement credibility and grow both reach and renown is to allow customers ready access to these individuals and their hard-won knowledge. Similarly, courtesy of their own education and experiences, customers may have additional insights, input and suggestions that they're happy to share with colleagues and peers. Tap into a wellspring of ideas, and prospective publishing material, by providing blogs, newsgroups, communities, message boards, polls and other forums where ideas are readily exchanged.

Such solutions can foster creativity and discussion, provide enhanced user support and allow prospective partners or buyers to communicate with and grow trust in you and your team. They also can offer a two-way channel for conversation that helps you get to better know your customers, understand their needs and stay on top of new trends or interests. The activity and continuously updated content can keep users regularly clicking on your website.

Charts, Diagrams and Infographics -- Computer generated or hand-drawn, these visually rich pieces can make data easy for anyone to understand and digest at a glance. And fun to share. Need ideas? Consider illustrating customer preferences, buying habits or population distributions.

Fun facts and especially interesting or one-of-a-kind information won't just draw audiences' attention. They may also provide a ready platform for publicity that can lead to newspaper, magazine, radio and TV coverage.

Books and Online Guides -- Everyone has a problem that needs solving: That's why businesses exist. Providing expert advice, hints, strategies and answers to perennial questions is an excellent way to establish yourself as a leading industry source and even gain media exposure. In addition to ebooks, you could consider publishing your work in PDFs or sharable online slideshow presentations.

While you may opt to charge for full or more detailed manuscripts, at least a small initial installment should always be given away free. Just be certain to include information of value. Customers won't want to pass along a glorified sales pitch.

PostSecret's social network of secrets

          As part of an art project, Frank Warren posted his home address online and asked people to anonymously mail him their secrets on handmade postcards. His idea: post those secrets online, giving people an outlet to say to the world what's on their minds.

"They can make you laugh, they can break your heart -- but you think when you read all 20 to 25 every Sunday," says Warren, who launched PostSecret six years ago. "It leaves you someplace a little different emotionally than where you were."

PostSecret's confessions range from everyday exasperations with humorous twists -- like a coffee barista threatening to serve demanding customers decaf -- to disclosures of life-threatening problems such as eating disorders or suicidal thoughts.

PostSecret isn't just an art project these days. It's now the cornerstone of a business franchise, encompassing a book series, speaking engagements, and a new mobile app that launched last week.

"I was a small business owner for 20 years," Warren says. "I feel as though not having a background in art but rather in business was helpful for me to, when this website became very popular, grow it and develop it in a way that it could self-sustain itself and find these other platforms of expression."

Warren, who says the site sees more than 4 million hits a month, attributes much of PostSecret's popularity and longetivity to his commitment to the project's core value: allowing people to share their secrets without exploiting them. That means no ads.

"If we did have ads, we could generate a pretty good revenue stream," he says. "But I feel one of the reasons so many people -- over half a million -- have trusted me with their secrets is because they know that their secrets won't be exploited or commercialized."

But Warren's newest venture -- an iPhone app that debuted last week -- carries a price tag. The $1.99 allows users to read and share secrets on the go. The app adds a location layer to PostSecret's confessional network: Users can "pin" an anonymous secret to a location.

The app has already cracked Apple's top-20 list of bestselling paid applications. More than 100,000 mobile secrets have been shared, says Warren, who is working on an Android app next.

Like many startup ventures, PostSecret's mobile move is an evolving experiment.

"It's super organic, so we don't know what kind of conversations are going to emerge," Warren says. "We don't know how people are going to use it."

He envisions the app as an alternative social network -- "a way of shining light on these hidden parts of ourselves, and in some ways sharing secrets as commerce and currency."

Some of those secrets are also cries for help. From this week's batch of postcards: "I'm considering death as a solution to the problems that will emerge when my unemployment runs out. All of the people in my life who think I'm handling this so well will realize how wrong they were."

Warren -- who spent several years answering phone calls overnight at a suicide prevention hotline -- is exploring ways to use PostSecret's growing community for advocacy and aid. The app could help shine a light on data clusters that would otherwise stay hidden, he suggests.

"We notice at a certain campus, perhaps, a lot of students are struggling with issues of abuse or eating disorder or stress ... there's a way we can talk to that school and have them offer more of their resources to students, or make them aware of what's available to help," he says.

But even for the solipsistic, PostSecret can be an illuminating mirror.

"One of the things I've learned form this project are there are two kinds of secrets. There are the ones we keep from others, and the secrets we hide from ourselves," Warren says. "Sometimes the more exposure you have to other peoples authentic secrets, the more you're able to look inside yourself and understand some parts of your life you need to deal with."
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Amazon: No California sales tax collection til 2012

           Amazon has struck a deal with lawmakers that will give the company one more year before it must start collecting sales tax on purchases made in California.

As part of the agreement, which was reached late Wednesday, Amazon has promised to back off fighting a new state law that would have compelled it to collect the tax.

Now Amazon has until July 31, 2012, to lobby Congress for a federal solution.

Right now, online retailers face a patchwork of local laws, requiring them to collect sales tax in some states but letting them skip it in others. Amazon has fought hard against local levies but says it would support a "simple, nationwide system of state and local sales tax collection."

California's sales tax kerfuffle started back in June, when California Governor Jerry Brown approved an $86 billion budget that imposed deep spending cuts. Under that law, Amazon and other out-of-state online retailers would be required to collect California sales taxes if they had affiliates, offices, workers or other ties to the state.

Amazon's affiliates program provides a commission to website or blog operators who refer shoppers to the retailer's site. Amazon, which has had associates in California for more than a decade, works with 10,000 affiliates there.

Brown's measure was expected to add $200 million to California coffers. But the same day the bill was signed into law, Amazon (AMZN, Fortune 500) announced it would terminate its relationship with its California associate. It called the legislation "unconstitutional and counterproductive."

Instead, Seattle-based Amazon wrote up a referendum challenging the law and spent boatloads of cash collecting signatures for it. Last week, the company sweetened the pot: It offered to build distribution centers in California and hire workers in the state.

"Amazon throws around a lot of money," said Assemblyman Charles Calderon, a Democrat, who helped broker the agreement. "It's not your typical corporate community. They floated their own proposal. They have an aggressive business plan, and they are wiling to take risks."

Calderon calls the 12-month push down the road a "grace period," and he said "a national solution" from Congress would make things simpler for everyone.

Amazon hasn't said whether or not it will reinstate its California affiliates. The company did not return a call seeking comment.

Meanwhile, other states have passed the so-called "Amazon tax" in recent years. Those include Connecticut, Illinois, New York, North Carolina, Arkansas and Rhode Island. Amazon dropped its associates program in all those states, except New York, where it has a brought a lawsuit against the state. To top of page
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Analysts scramble to raise their iPhone and iPad estimates

            It happens every three months. As the end of Apple's (AAPL) fiscal quarter approaches, the small army of analysts that cover the stock dusts off its spreadsheets, finds them overly conservative and starts issuing revisions. If history is any guide, the numbers will be revised again -- upward -- when the company reports its Q4 2011 earnings in mid-October.

Here are the reports we've seen so far this week:

Sterne Agee's Shaw Wu: Sees "remarkable" strength in iPhone 4 sales despite expected release of iPhone 5 in October. Ups iPhone estimate to 18.5 million (from 15.7 million), iPads to 12 million (from 10.4 million) and gross margin to 41% (from 39%). Staying pat on Macs at 4.1 million.
Jeffries' Peter Misek: iPhone sales are "surprisingly strong" he says, but back-to-school demand for Macs was "weaker than expected." Ups iPhone estimate to 18.9 (from 18.4), lowers Mac to 4.4 million (from 4.9 million).
BMO's Keith Backman: Raises iPhones to 20.4 million (from 19.5 million), Macs to 4.31 (from 4.27 million) and iPads to 11.0 million (from 10.5), adding that he "sees upside tension to 11.5 million units," whatever that means.
Pacific Crest's Andy Hargreaves: Sees "significant upside" to the numbers in his spreadsheet but doesn't seem quite ready to change them. Could easily imagine iPhone sales going to 24.05 million (from the 18.7 million in his model) and iPad sales going to 16.5 million (from 11.1 million).

For the record, the estimates we've seen so far from independent analysts (whose track record is considerably better than Wall Street's) are higher on iPhones and Macs and lower on iPads. On average, they're calling for 24.9 million iPhones, 4.85 million Macs and 10.5 million iPads.
Posted in: Analysts, Apple, iPad, iPhone, Mac, Macintosh, Mobile, Tablets
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IBM's 'Jeopardy' computer lands health care job

           IBM's Watson computer thrilled "Jeopardy" audiences in February by vanquishing two human champs in a three-day match. It's an impressive resume, and now Watson has landed a plum job.

IBM is partnering with WellPoint, a large health insurance plan provider with around 34 million subscribers, to bring Watson technology to the health care sector, the companies said Monday.

It will be the first commercial application of Watson, which is a computing system that aims to "understand" language as humans naturally speak it. IBM (IBM, Fortune 500) has been working on Watson for more than six years.

The goal is for Watson to help medical professionals diagnose and sort out treatment options for complicated health issues. Think of the system as an electronic Dr. House.Click here to visit the site

"Imagine having the ability to take in all the information around a patient's medical care -- symptoms, findings, patient interviews and diagnostic studies," Dr. Sam Nussbaum, WellPoint's (WLP, Fortune 500) chief medical officer, said in a prepared statement.

"Then, imagine using Watson analytic capabilities to consider all of the prior cases, the state-of-the-art clinical knowledge in the medical literature and clinical best practices to help a physician advance a diagnosis and guide a course of treatment," he added.

WellPoint plans to begin deploying Watson technology in small clinical pilot tests in early 2012.

Speed and natural language: Watson can sift through 200 million pages of data and provide a response in less than three seconds. But perhaps even more impressive than Watson's speed is its ability to process natural language, the way that humans speak it.

That's no easy feat for a computer. Human language is full of subtleties, irony and words with multiple meanings.

Take the "Jeopardy" example. Watson studies the questions by considering many factors, ranging from straightforward keyword matching to more complex challenges like homonyms (the bark of a tree is not the same as a dog's bark) and paraphrasing ("Big Blue" is the same thing as "IBM").

Watson is able to do this quickly thanks to software that runs on 10 refrigerator-sized racks of IBM Power7 systems. The machine is a grandkid to Deep Blue, the chess-playing IBM supercomputer that trounced world champion Garry Kasparov in 1997.

IBM said early on that health care is a field where it anticipated commercialization opportunities for Watson. Other markets IBM is eying include online self-service help desks, tourist information centers and customer hotlines.

Watson's "Jeopardy" face-off against champs Ken Jennings and Brad Rutter, which first aired February 14-16, will be re-broadcast starting on Monday. To top of page

8 Fastest-Growing tech companies

Baidu
1 of 8
100 Fastest-Growing rank: 4 (Previous rank: N.A.)
CEO: Robin Li
Address: 10 Shangdi 10th St., Beijing, China

Founded by Robin Li and Eric Xu in 2000, Baidu has evolved into the largest search engine portal in China with a market share of nearly 75%. Its services let more than 300 million Chinese users find news, web sites, audio files and images and targeted marketing tools like P4P, which lets companies pay for and generate ads that appear in search listings.

Recently, Baidu struck a two-year deal with One-Stop China, a local joint venture owned by Universal Music, Warner Music and Sony Music. It will let users legally download and stream over 500,000 songs for free. Aggressive moves such as these goes a long way to explaining why the search portal saw three-year annualized earnings-per-share growth of 78%.

Cirrus Logic
2 of 8
Cirrus Logic
100 Fastest-Growing rank: 11 (Previous rank: N.A.)
CEO: Jason Rhode
Address: 2901 Via Fortuna, Austin, Texas

This semiconductor company, which supplies integrated circuit products to a variety of consumer and commercial applications, saw huge three-year annualized earnings-per-share gains of 340%.

During 2010, it focused on its Digital Energy Control initiative with an LED lighting controller that it says is more effective than the competition, not to mention compatible with more LED light bulbs. But the largest driver of revenue over the last few years remains its portable audio business. Its products are used in everything from smartphones and tablets to Blu-ray players, bringing in $265 million during fiscal 2011, or nearly 70% of the company's annual revenue.

Priceline.com
3 of 8
Priceline.com
100 Fastest-Growing rank: 12 (Previous rank: 11)
CEO: Jeffery H. Boyd
Address: 800 Connecticut Ave., Norwalk, Connecticut

It was another great year for the travel booking service, which saw profits climb to $528 million last year on sales of nearly $3.1 billion. That uptick was driven largely by international sales, which accounted for 69% of the company's overall bookings and Booking.com, the Connecticut-based international hotel reservations site it bought back in 2004.


Mercado Libre
4 of 8
Mercado Libre
100 Fastest-Growing rank: 15 (Previous rank: N.A.)
CEO: Marcos Galperin
Address: Arias 3751 7th Floor, Buenos Aires, Argentina

With more than 53 million registered users, eBay's Latin American partner is the largest e-commerce platform in the region. More than half of its business comes from Brazil. Last year, revenues climbed to $217 million from $172 million -- more than double what it was three years prior. The company also launched MercadoShops, a service that lets users set up, manage and promote their own online stores.

Ebix
5 of 8
Ebix
100 Fastest-Growing rank: 19 (Previous rank: 3)
CEO: Robin Raina
Address: 5 Concourse Pkwy NE Ste 3200, Atlanta, Georgia

The IT consulting and outsourcing company provides software solutions like carrier and agency systems to insurance companies and also runs online insurance data exchanges which account for nearly 71% of all revenues. The goal: become the leader in back-end insurance transactions.

If its performance in 2010 was any indication, it's certainly on track to achieve that. The company made three acquisitions last year and wrapped up a merger with ADAM, a health technology services company last February. Meanwhile, profits climbed 66% to $59 million, compared with the year before, on sales of $132 million.

Apple
6 of 8
Apple
100 Fastest-Growing rank: 21 (Previous rank: N.A.)
CEO: Tim Cook
Address: 1 Infinite Loop, Cupertino, California

It may be a no-brainer, but Apple is on a roll. Last year, it launched two products to great success: the iPhone 4 sold 1.7 million units during its first three days on shelves; the iPad moved nearly 14.7 million units by the end of the year. That momentum carried over into 2011. During the company's most recent quarter, iPhone sales grew 142%, while iPad sales expanded a whopping 183% thanks to a major hardware update. All that contributed to profits of $7.3 billion on revenues of $28.6 billion, a record on both fronts.

Acme Packet
7 of 8
Acme Packet
100 Fastest-Growing rank: 25 (Previous rank: N.A.)
CEO: Andrew Ory
Address: 100 Crosby St., Bedford, Massachusetts

Catering to over 1,440 clients in 105 countries, Acme Packet manufactures session border controllers, multi-service security gateways and session routing proxies, all of which enable the delivery of voice, video and other types of multimedia sessions across different Internet protocol -- or IP -- networks. From 2008 to 2010, revenues nearly doubled to $231 million and profits almost quadrupled to $43 million, a company record. And as companies continue to replace older legacy technologies with IP-based solutions, Acme Packet expects to have a bigger role in what it in envisions as a multi-billion dollar market.

Riverbed Technology
8 of 8
Riverbed Technology
100 Fastest-Growing rank: 27 (Previous rank: N.A.)
CEO: Jerry M. Kennelly
Address: 199 Fremont St., San Francisco, California

This IT-focused company is concentrated on the wide-area network (WAN) market, selling a range of products that optimize network performance and data access, boosting network transmission speeds by as much as 100 times in some cases. To that end, profits jumped from $7 million to $34 million 2010 on sales of $552 million due to increased customer demand, with nearly half those sales coming internationally.

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Does Intel's ultrabook stand a chance?

            When Apple launched the MacBook Air, it got flack: not fast enough, not enough ports, too pricey, the optional external optical disc drive had as much portable appeal as a brick. Fast-forward three years, and the current version of the Air has become an industry example of what consumers want in mobile computing. Though Apple won't break down figures, an executive recently told Fortune that the lightweight notebook had been outselling its entry-level white MacBook earlier this year. (That model was ultimately discontinued.) Meanwhile, Gartner research reports Apple's overall growth in the mobile computing space outpaced PC makers -- for the last five quarters.

So what's a Windows PC maker to do? Fight fire with fire. That's partly why Intel (INTC) created the so-called "ultrabook," a new, svelte notebook category. The new name comes with a checklist of required hardware features attached: a model must be 0.8 inches thick or less, weigh under 3.1 pounds, use a solid-state flash drive, get five-plus hours of battery life in between charges and start at a price of $1,000. The chipset maker also set up the Intel Capital Ultrabook Fund, a $300 million fund for investing in companies working on ultrabook hardware and software, aiming foster technical improvements in battery life and storage for example.

If successful, Intel's prodding of PC makers to more diligently chase Apple (AAPL) could be a big boost to the Windows ecosystem as the surge in tablets threatens to take a bite out of notebook sales. (Apple reportedly threatened to walk away from Intel if the chip maker didn't make bigger gains in its technology.) But manufacturers like Toshiba, Lenovo, Asus and Acer -- all of which roll out ultrabooks this fall -- have plenty of obstacles that may be difficult to overcome.

Like design. While Toshiba's upcoming 2.5-pound Portege Z830, due in November, sports a look in line with the company's past products, Asus's offerings have drawn some criticism for looking too much like the Air, right down to the way that sheet of aluminum tapers in the corner. Comparisons in the looks department may be inevitable, though. "They're similar, but it's not hard to be similar," says Van Baker, an analyst with Garter Research. "You need the metal case for the structural strength, and they have to be thin because that's one of the requirements for the ultrabook brand. So when you say it's an all-metal case and thin, well guess what? It's gonna start looking like a MacBook Air."

Baker also points out the differences remain significant. There's the operating system for one; Microsoft's (MSFT) Windows still dominates in market share. Some of the aesthetic flourishes Apple is best known for may be hard to duplicate, meanwhile, such as backlit keyboards that light up in the dark. Such features may not make their way into ultrabooks for some time, if at all. Manufacturing such a thin chassis is a challenge, too, something Asus' own CEO Jerry Shen told The Financial Times, pointing to possible heat problems due to the processor.

Pricing will also be extremely important. Apple has never been considered "cheap," but the Air's recent $999 pricing scheme is reportedly a hassle for some PC makers who are dealing with higher production costs. Analysts Fortune spoke to indicate that, for ultrabooks to be competitive in the marketplace, they need to be priced below $1,000 and somewhere in between $700 and $750. This year, there will be few models that hit that sweet spot -- most of them have price tags starting at $1000 and climbing up to $2,000.

Intel and company will also have to do some savvy marketing. The chipset maker forecast that ultrabooks will own 40% of the global consumer notebook market by the end of next year, and 60% come 2013. That's an extremely aggressive prediction that some PC makers and analysts wonder is realistic. "That's going to take a lot of spend on Intel's part, to take a term that they invented and that consumers aren't aware of and get to the point where they go to a Wal-Mart (WMT) or Best Buy (BBY) and ask for an ultrabook," explains Baker, who remains skeptical.

Intel also has a mixed track record pushing specific types of computing tied to its chips. In 2004, the company sponsored an effective media campaign extolling the Centrino, which popularized the benefits of wireless Internet mobility. Other campaigns haven't fared so well. In 2006 for instance, Intel marketed Viiv to boost awareness of PCs designed as living room-friendly media centers. Viiv as a brand went nowhere and eventually died quietly, though the idea of the "media PC" lives on.

PC makers also have to fully commit. According to DigiTimes, Acer, Lenovo, Toshiba and Asustek may produce less than 50,000 units, too conservative to really make a dent in public awareness. And while Asus, for example, is technically capable of producing quadruple that each month, scaling beyond will require substantial investments in the company's supply chain, an investment that will likely be needed to take this category mainstream. Otherwise, the vaunted ultrabook may become just another uneventful blip on Intel's vast, expanding product roadmap.Click here to visit the site

Angry Birds: 350 million downloads and counting

           Angry Birds is the game franchise that just keeps on giving.

Some wonder whether the casual video game's popularity has peaked. Rovio's General Manager for North America, Andrew Stalbow, thinks otherwise. Today, Stalbow revealed that there have been 350 million Angry Birds downloads since the game's launch in December 2009. PLayers are putting in an astonishing 300 million minutes of gameplay -- every day. That's 150 million more downloads than when Fortune checked in on Rovio back in June and more than triple the number of downloads reported last March.

More surprising may be how big the merchandise side has become. As of last June, the company had sold three million plush toys, but now Stalbow says they're selling one million a month, in addition to selling one million t-shirts each month.
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The news bodes well for Rovio, which is capitalizing on Angry Birds' success in every way possible, with more than 25 ways to get it across multiple platforms -- iOS, Android, Nook, Chrome Web app -- to talks of an Angry Birds movie that would likely be developed in-house thanks to the acquisition of Helsinki-based animation studio Kombo earlier this summer. On the subject of Amazon's (AMZN) reported Kindle tablet, due out later this year, Stalbow wouldn't confirm an app, but given the companies' close relationship -- the two collaborated on the exclusive distribution of Angry Birds Rio -- Rovio's presence on the new platform seems inevitable, sooner rather than later.

And as we'd previously reported, expect two new Angry Birds experiences by the end of the year with new kinds of gameplay entirely unlike the current crop using buzzy new features like geolocation, something the company is tinkering with to draw foot traffic to stores and restaurants. In other words, there's lots more to come.

The gloom about tech IPOs

               Tech startups hoping to find an exit strategy in the public stock market might reconsider. First, market turbulence and the prospect of a double-dip recession led the likes of Zynga and Groupon to consider delaying their debuts. Now it seems 2011 is proving to be not just an unkind year for IPOs in general. It's especially unkind to tech.

Tableau Software, a Seattle-based data-analytics software company, looked at 24 technology IPOs that have listed on U.S. exchanges so far in 2011 and found that, as a group, they are significantly underperforming other sectors. Tech IPOs are on average trading 11.5% below their offering prices, while compared with a 5% decline in business and financial services IPOs, a 7% decline in real estate IPOs and a 8% decline in industrial and consumer product IPOs.

Many IPOs are down from their offering prices because most went public in the first half of the year, before a summer swoon brought nearly all stock prices down (since mid-July, the S&P 500 Index has dropped 14%). But even so, tech IPOs are being hit especially hard. Only IPOs in the energy industry, which are down an aggregate 12% from their offering prices, have performed more poorly than tech.


Only a third of the 24 tech IPOs Tableau tracked closed Monday above their offering prices, led by social network LinkedIn (LNKD), up 84%; business-software maker ServiceSource International (SREV), up 61%; and web-security company Qihoo 360 Technology (QIHU), up 49%. Those gains are comparable to the better performing IPOs in other industries: CVR Partners (UAN), a fertilizer company, is up 55% and cancer-drug developer Endocyte (ECYT) is up 80%.

But viewed from a different angle, tech performance isn't so stellar. LinkedIn and Qihoo saw their stock prices double on their first day of trading. LinkedIn is down 12% from its first-day closing price and Qihoo is down 37%. So many of the gains that were fleetingly available on the hottest tech IPOs evaporated quickly.Click here to visit the site

Turntable.fm lands $7 million for 24/7 streaming music club

              Turntable.fm, one of the tech scene's most-buzzed about startups, has opened its online music venue to the public.

The addictive site took Silicon Valley by storm when it launched in January to a select group of invited participants. Tech insiders like Mark Zuckerberg and music celebrities flocked to the site to play with its 24/7 social streaming music service.

That means they've been spending time in virtual rooms, represented by an avatar, spinning music for a crowd or listening to other virtual DJ's play songs.

It was a strange concept for a music-sharing site: Everyone gets an avatar, enters a music venue, and DJs for their friends. There's also gaming element: Users who like the song click "awesome," while those who dislike the DJ's tune vote it "lame."

The concept caught on quickly, with early adapters raving about it and investors -- who in the past have steered clear of music startups because of their swampy legal challenges -- throwing money their way.

The site is now streaming a million songs a day at Turntable.fm, with 40% of the 600,000 people who have signed up using the service actively.

"I think this really taps into something deep," co-founder Seth Goldstein said at the TechCrunch Disrupt conference in San Francisco. "People really want to experience music together."

At the show Goldstein announced a $7 million funding round led by Union Square Ventures. The round also includes some non-traditional investors -- Lady Gaga's manager Troy Carter and musician Questlove, to name a few.

The Turntable.fm crew released a free iPhone app on Tuesday that gives people the ability to take Turntable on the road.

It's addictive and growing fast -- but is there a business model here?

Not yet, but Goldstein is exploring options.

"There's a number of models," he said. "There's sponsorship, virtual goods, there's affiliate fees. Today we've been very successful and lucky to have such an engaged audience. They're telling us and they're leading us towards product iterations and product development and monetization techniques."

Next question: is it legal? It took another splashy new streaming music service, Spotify, years to negotiate licensing deals.

Goldstein says he's in talks with all the major records, but right now, the site is operating in the gray zone.

"The answer as to whether Turntable.fm is legal is not necessarily an easy answer," entertainment and new media attorney Barry Heyman said. "It's very fact-specific, and arguments can be made for either side."

The Digital Millenium Copyright Act lets "non-interactive" streaming music services operate like radio stations, without striking licensing deals. That's how Pandora (P) operates, paying per-song royalties for the tracks it streams.

Turntable.fm could pursue a similar path. The same labels that blasted Napster into oblivion a decade ago are now more open to the idea that digital music is invevitable and partnerships can deliver a better payoff than legal standoffs.

The idea of music discovery makes the site appealing to the traditional labels, Goldstein said. If people like the music their friends play, they might, for example, one day be able to click a button and purchase it from Apple's (AAPL, Fortune 500) iTunes.

That would deliver an immediate payoff to the rights-holders -- and, perhaps, the start of a business model for Turntable.fm. To top of page

Google bid against itself for Motorola Mobility

          Almost immediately after Google lost the bidding for a package of Nortel patents that the search giant dearly wanted, it moved on to Plan B and contacted Motorola to see what it had for sale. Less than six weeks later, Google's blockbuster acquisition came together -- but only after Google raised its purchase price. Twice.

In a regulatory filing submitted Tuesday, Motorola Mobility breaks down in startling detail the timeline and milestones of Google's $12.5 billion takeover deal. Patents were what originally piqued Google's interest because it wants to arm up for Silicon Valley's ongoing patent war. But it didn't take long for Google to come around to Motorola's view that if Google wanted the patents, it should buy the whole company.

After a month-long series of meetings among the two companies' top executives -- initiated by Andy Rubin, Google's senior vice president of mobile -- Google decided to make its move on Aug. 1. It sent Motorola an acquisition offer for $30 a share.

Four days later, Motorola rejected that bid and suggested Google open its wallet a bit further. Google obligated: It came back on Aug. 9 offering $37 per share.

But in a sign of just how badly and how quickly Google wanted this deal done, it raised its offer again later that same day. After Motorola CEO Sanjay Jha told Google he would back a slightly higher proposed price, Google upped its all-cash offer to $40 a share -- kicking in an extra $3 billion over its initial bid even though Motorola was not in talks with any other potential buyers.

Google (GOOG, Fortune 500) told Motorola it wanted an answer within 24 hours. This time, Motorola (MMI) said yes. After a week of hammering out the fine print, the two companies stuck a final deal the morning of Aug. 15, and fired off their press release soon after.

Throughout the discussions, Motorola's board stayed in touch with Carl Icahn, a famously hands-on shareholder who owned 11% of Motorola Mobility's stock. He was sniffing around for a deal: In late July, he sent Motorola a letter suggesting it shop around its patent portfolio. Once Google's takeover bid hit $40 a share, Icahn threw his support behind it.

Motorola took advantage of Google's eagerness to extract some additional deal-sweeteners, including the steep $2.5 billion breakup fee Google will owe Motorola if it can't get antitrust clearances.

That regulatory review is ongoing. To top of pageClick here to visit the site

Gojee wants to plan your meal tonight

            When it comes to online recipes, readers' eyes are just as vital as their stomachs. Gojee, which launched in July, offers recipes in a slideshow format, with stunning photos of the finished product splashed across the screen. Clicking on a dish directs readers to the web page of an individual food blogger with the recipe's full details. The site just nabbed its first major funding, a $1.2 million seed round led by Kapor Capital.

Gojee CEO Michael LaValle, a West Point graduate who joined the infantry and spent a year in Afghanistan, returned to his hometown New York City in 2006 and spent three years at Morgan Stanley in the technology investing group. There he met co-founder Tian He, now Gojee's VP of Engineering, and the two hatched a plan to start the company together. The goal: use data to offer a new experience in online recipe hunting. Says LaValle, "No one was doing anything intelligent around harnessing food data to deliver something cool and useful."

Gojee makes use of data by linking up with supermarket loyalty cards to learn which items have been purchased, customizing recipes it displays by what ingredients are actually in the fridge or pantry. Currently, Gojee is only partnered with D'Agostino's, a Manhattan-based grocer, but users can also manually enter ingredients they have on hand or generally prefer to use.

The potential interest to supermarkets is obvious. "We have seen recipes on the Internet becoming a monster thing that customers are interested in," says Nick D'Agostino III, CEO of the eponymous chain. "I can provide you with a hell of a lot of recipes that meet your requirements, but that you'd never eat. You'd have to tell us 'Okay, I don't like salt, but I also don't like kumquats.'" D'Agostino's customers are an ideal test population for Gojee to find out what works and what doesn't.

What works, LaValle believes, is the way Gojee personalizes the experience, more so than sites like Epicurious, Yummly or the Food Network, big recipe outlets that make up Gojee's main competition. "Their sites always give the same experience," he says. Sounding annoyed, he ticks off a long list of similarities he perceives between his competitors – their layouts, search function and their tone.

Gojee, he says, is the only site responding to changes in Web usage. "The entire way of navigating the web is going to evolve in the next three years, so that led us to fullscreen photos and being able to swipe on a tablet or click left to right on a keyboard."

Perhaps Gojee's most surprising feature is that its recipes are hand-selected from chef blogs that the staff (seven full-time employees) vets. "Every blog we feature has to have great pictures, obviously, but also a unique perspective," LaValle says. "You get to step into their world. If you want to find good food bloggers, there's only our site."

Joshua Stokes is one of those food bloggers. A private chef in New York, Stokes has had a number of his recipes featured on Gojee and says that he's noticed a spike in traffic thanks to the site. He sees both advantages and challenges in Gojee's efforts to take on the larger recipe sites. "A flaw with, say, the Food Network site is that if Bobby Flay throws up a recipe, people will try it no matter what, because it's his," says Stokes. Stokes adds that if these recipes from brand-name chefs disappoint, users tend to abandon them, feeling defeated. They might not try cooking it again.

Still, sites like Food Network have the advantage of built-in audience and traffic dominance. "I've tried all the big recipe sites, mostly because, when I Google a recipe, they're the first to come up," admits Stokes. "It's hard to take on the Google (GOOG) factor."

Stephen DeBerry of Kapor says they invested in Gojee because the VC firm is increasingly interested in healthy food and in startups with a social impact. "We want to help get out of this wagging a finger at the consumer for lifestyle choices, and Gojee does it in a beautiful, fun way," he says. "On the back-end, there are some great opportunities once you learn what people are eating and connect it to retail. The data dimension is what really impressed us." Gojee is the first food-related startup Kapor has invested in directly.

If Gojee is going to grow, it'll need to aggressively announce its presence. Even with its creative features, it's starting from the bottom of a steep hill, at the top of which sit the more established recipe sites. Though Gojee won't disclose its traffic, the company says it has members in 199 different countries, and in has just doubled its stable of food writers, from 80 to 160. Its Google Chrome app has nearly 30,000 users.

"Food is a changing market," says Stokes. "Those other sites have the resources to change, but not always the wherewithal to see what changes are going to happen or should."
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