Marketing Biz: What Does 1 Billion Dollars Buy?

One Billion Dollars

The drama has subsided this week and instead we find out just how far 1 billion dollars can go in today’s economy. But if you really need your feuding fix, look no further than the torrid triangle between Amazon, Apple and book publishers.

Here is why Facebook bought Instagram

Facebook was scared shitless and knew that for first time in its life it arguably had a competitor that could not only eat its lunch, but also destroy its future prospects. Why? Because Facebook is essentially about photos, and Instagram had found and attacked Facebook’s achilles heel — mobile photo sharing.

Om Malik hits the nail on the head. Sure, 1 billion dollars is a hefty price to pay. But why have a plucky start-up nipping at your heels as you’re trying to impress the street after going public? This is just more pre-IPO maneuvering.

Microsoft buys Netscape Web patents from AOL to attack Google

So what will Microsoft do with these core Web patents? My bet is that they’ll use them, or threaten to use them anyway, against their top rival: Google. Consider, Chrome is on its way to overtaking Internet Explorer as the world’s most popular Web browser. Microsoft wants Windows 8 to be a major player on tablets and smartphones, and Google’s Android is one of the leaders there. What better way to try to trip their opponent than that early 21st century business favorite tactic: the patent lawsuit?

1 billion dollars gives Microsoft a raft of patents from AOL. Sadly, I’m similarly jaded and have to believe that the acquisition is part of a patent strategy to slow down competitors. The new motto seems to be: if you can’t beat them, sue them.

AT&T Is Selling Its Stake In Yellow Pages For Nearly $1 Billion

The sale is part of AT&T’s strategy to jettison shrinking parts of its business so it can focus on segments that are growing, particularly its wireless business. Revenue from the Yellow Pages unit has shrunk 30 percent in two years, as consumers continue to shun phone books in favor of the Web.

Private-equity firm Cerberus Capital picks up the Yellow Pages for 1 billion dollars (give or take.) It’s a dying and dwindling business but one that still generates a healthy bit of revenue ($3.3 billion last year) and profit. As the old local model shrinks we begin to understand why so many are racing to establish dominance in the new local world.

PayPal’s VP of Product Sam Shrauger Resigns — Is He Headed for Yahoo?

Shrauger’s last day at the company will be as soon as tomorrow. In an interesting bit of timing, Yahoo’s new CEO — and Shrauger’s former boss at PayPal — is announcing a new restructuring of the Internet giant tomorrow. Sources said that could include Shrauger in a new senior role at Yahoo, given its former product head Blake Irving just resigned last week.

New Yahoo CEO Scott Thompson is getting the band back together. It seems likely that Shrauger will be going to Yahoo, following the recent migration of Amanda Pires from PayPal.

Perhaps they’re all talented, but PayPal and Yahoo are in very different market positions. Yahoo lost a dominant position in their own niche and is struggling for a new identity. PayPal is just now navigating those waters with the acceleration of mobile payments.

U.S. Sues Apple, Macmillan, Penguin for Price-Fixing

Apple, Macmillan and Penguin want to protect the agency model that lets publishers — not vendors — set e-book prices, said people familiar with the matter, who declined to be identified because they weren’t authorized to speak publicly.

It looks like Apple may skate on this one because they weren’t present in the meetings. That doesn’t mean Apple didn’t know what was going on though. Or that it didn’t fully understand that they could use publisher disgust with ‘vendors’ (aka Amazon) to their advantage.

Some big-six publishers refuse to sign new contracts with Amazon

Book publishers traditionally paid bricks-and-mortar bookstores co-op fees on print books in order to ensure promotion of those books in stores. The concept is murkier when applied to e-books being sold via websites. Publishers have accepted co-op on e-books as the price of doing business with Amazon, but now the company appears to be requesting much higher co-op fees.

Did I mention that publishers really don’t like Amazon? Publishers have been criminally slow in adopting to new technology but Amazon has also been increasingly greedy. It can do so because of their dominant position in the market. So does this improve or weaken the DOJ price-fixing suit?

Amazon CloudSearch – Start Searching in One Hour for Less Than $100 / Month

You don’t have to write your own indexing, query parsing, query processing, results handling, or any of that other stuff. You don’t need to worry about running out of disk space or processing power, and you don’t need to keep rewriting your code to add more features.

With CloudSearch, you can focus on your application layer. You upload your documents, CloudSearch indexes them, and you can build a search experience that is custom-tailored to the needs of your customers.

One of the overlooked areas of search is on-site or enterprise search. Sure you can use Solr, Google Enterprise Search or a host of other vendors but it is often viewed as being difficult and time-consuming. (And no one likes a grumpy engineer.) The CloudSearch pitch is smart and is squarely aimed at reducing the friction of enterprise search.

Opinions expressed in the article are those of the guest author and not necessarily Marketing Land.

Related Topics: Channel: Industry | Marketing Biz


About The Author: is Owner of Blind Five Year Old, a San Francisco Internet Marketing firm specializing in search. An experienced marketing executive with a successful track record spanning 20 years, AJ combines a deep understanding of search marketing with a passion for product strategy and iterative product development, fusing design and user experience with quantitative analysis.


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  • erikeric

    Nice perspectives. I think you summarize the ebooks debate very succinctly with “Publishers have been criminally slow in adopting to new technology but Amazon has also been increasingly greedy.” 

    The only thing I think you’re far off on is Amazon’s CloudSearch being more attractive than Google Enterprise/Site Search. Who are these mythical engineers that feel Google’s solution is “difficult and time-consuming”? I’ve experienced exactly the opposite sentiment with engineers who’ve implemented Google’s solution upon my recommendation.

  • Jeff Downer Indianapolis IN

    Well, I don’t exactly what a billion dollars buysthese days, but I do know it doesn’t buy as much as it used to.  With the Micrsoft-AOL deal at least the lawyers aren’t going to starve.

  • AJ Kohn

    Thanks for the comment Erik. I have a soft spot for the book space given my background. There’s a lot more going on in that vertical than meets the eye.

    Perhaps I’ve run into persnickety engineers. I think it’s a combination of not wanting to go through the implementation and a penchant for rolling their own with something like Solr. So ‘difficult’ might be the wrong word, or maybe I should apply it to the person and not the product.

  • AJ Kohn

    I’m not sure the lawyers will ever starve Jeff. But you’re right, a billion dollars doesn’t seem to go as far as it used to: a product without a revenue stream, a bunch of patents that can be used to thwart a competitor and a dying but profitable business. 


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