Following Apple’s and Google’s Lead, Amazon Enables In-App Purchases

After a relatively short test period, Amazon announced Tuesday that developers can now set up in-app purchases within apps offered in the Amazon Appstore.
The move gives the developers an opportunity to earn more money through in-app upgrades, expansions, subscriptions (essential to publishers) and virtual good purchases. It also makes Amazon’s Appstore more competitive with Apple’s and Google’s app stores, both of which have enabled in-app purchasing since spring 2009 and spring 2011, respectively.
Like Apple and Google, Amazon will keep 30% of all revenue generated through in-app purchases.
Developers and publishers including Disney, Gameloft, G5 Entertainment, Conde Nast and Dow Jones were given early access to Amazon’s in-app purchasing API, and will begin offering in-app purchases Tuesday. In a statement, Larissa McCleary, director of marketing at G5 Entertainment, noted that enabling in-app purchases upped conversion rates and revenue in all of the games G5 offers in the Amazon Appstore.
In-app purchases are becoming an increasingly important source of revenue for developers. According to a study conducted by IHS, in-app purchases generated $970 million in revenue in 2011, accounting for 39% of all smartphone app revenue that year. Those figures are only expected to grow, bringing in $5.6 billion — 64% of all smartphone app revenue — in 2015.



Amazon released the above video to introduce developers to its new, in-app purchasing service.

16:27 by Robert dawne · 0

Eyeing An IPO, Kayak 2011 Revenue Up 32 Percent To $225M; Net Income Up 21 Percent

Travel search giant Kayak just posted new revenue numbers for the fourth quarter and full year 2011 in a new S-1 filing with the SEC. As we heard last September, Kayak put its IPO plans on hold until market conditions improve. Now that the markets are more stabilized, it should be interesting to see when Kayak makes the push to become a public company. For the year, Kayak generated $224.5 million of revenues, up 32 percent from 2010.
Net income for the year was $9.7 million, up 21 percent from 2010′s net income of $8 million For the fourth quarter, Kayak saw a 27 percent increase in quarterly revenue, posting $53.9 million in Q4 2011 sales. In contrast, revenue grew 28 percent in the third quarter.
But the company says that typically its highest revenue quarters are the second and third quarters.
Kayak says it finished 2011 with 899 million user queries processes for travel information, representing growth of 42 percent from 2010. For 2011, Kayak had 7 million downloads, up over 70 percent from 2010.
Despite the IPO being on hold, Kayak has been consistently trying to improve its core product and add additional functionality. The company has been heads down on product development and improving customer experience over the past few months, as the company battles with Google in the travel search space.
In December, Kayak redesigned its iPad app and consolidated the app with its iPhone cousin. The company’s website most recently got a big UI upgrade, creating a more universal and comprehensive consumer experience across all Kayak platforms: web, mobile web and apps. And the search engine just debuted direct booking for flights.

13:17 by Robert dawne · 0

HP Q1 Revenue Down 7 Percent To $30B, Net Income Down 44 Percent, Software Sales Up 30 Percent

HP just reported mixed first quarter earnings. The company posted non-GAAP diluted earnings per share of $0.92, down 32 percent from the prior-year period (GAAP diluted earnings per share were $0.73, down 38 percent from the prior-year period). First quarter net revenue came in at $30 billion, down 7 percent from the previous year. Analysts expected earnings of $0.87 cents a share on revenue of $30.7 billion. GAAP Net Income was down 44 percent to $1.5 billion.
“In the first quarter, we delivered on our Q1 outlook and remained focused on the fundamentals to drive long-term sustainable returns,” Meg Whitman, HP president and chief executive officer, said in a statement. “We are taking the necessary steps to improve execution, increase effectiveness and capitalize on emerging opportunities to reassert HP’s technology leadership.”
In the Americas, first quarter revenue was $13.2 billion, down 9 percent year over year. Europe, the Middle East and Africa revenue of $11.7 billion was down 4 percent year over year, and revenue in Asia Pacific was $5.2 billion, representing a 10 percent decrease year over year.
Revenue from outside of the United States in the first quarter accounted for 66 percent of total HP revenue. BRIC countries (Brazil, Russia, India and China) generated revenue of $3.1 billion, down 13 percent from the year-ago period, and representing 10 percent of total HP revenue. Revenue in HP’s commercial businesses declined 4 percent year over year. Revenue in HP’s consumer businesses, within PSG and IPG, was collectively down 23 percent year over year.
In terms of specific product lines, the Personal Systems Group (PSG) revenue declined 15 percent year over year, and services revenue of $8.6 billion grew 1 percent year over year with a 10.5 percent operating margin. Imaging and Printing Group revenue declined 7 percent year over year. Consumer hardware revenue was down 15 percent year over year.Enterprise Servers, Storage and Networking (ESSN) revenue declined 10 percent year over year.
On the bright side, software revenue grew 30 percent year over year with a 17.1 percent. HP says software revenue was driven by 12 percent license growth, 22 percent support growth and 108 percent growth in services.

17:58 by Robert dawne · 0

Mobile Advertising Is The Baby Huey Of The Media World (And Apple Is Taking The Low Road)

Editor’s Note: This guest post was written by Frank Barbieri, a serial entrepreneur and sometime blogger. You can follow him @frankba.
I had dinner last week with a senior exec from a global advertising holding company who asked what I often get asked these days, “What’s going on with mobile advertising?” it’s a timely question as last week Apple announced they were lowering the buy-in price for iAds from $500,000 to $100,000 and increasing the publisher revenue share from 60% to 70%. The move seems innocent enough, but with a little inspection is actually very worrying for a segment still struggling to shake off its inferiority complex, and potentially chilling for many innovators and entrepreneurs.
You would think that the Flurry data posted late last year on exponential mobile adverting inventory growth late last year would correlate with an industry finally reaching maturity. But a couple weeks after that data posted I had a conversation with a Fortune 100 senior media buyer who became bearish on mobile ad spending in 2011.
This person has a total media budget in the tens of millions annually, and for the first time since she started buying mobile, she decreased her spend over the previous two quarters and expects to decrease even more in 2012. Why? Perceptual and brand attitudinal data consistently comes back as not even outperforming search engine marketing.
Mobile advertising has become the Baby Huey of the media world: it’s huge and lumbering, but not mature. Analytics, measurement and targeting have not caught up to where online is, exactly when we’re hearing inventory volume is set to surpass online. Neither Comscore nor Nielsen rank the top mobile apps like they rank the top online properties by category and unique users. Nor do they rank ad networks. Phone and operating system manufacturers as well as the carriers have created fragmented and feature poor cookie environments on phones. What is seen as standard operating procedure online, the use of cookies to target users and understand usage, is treated as heresy in mobile.
This lack of basic advertising infrastructure means it’s hard to manage and measure brand campaigns. Performance is a different story as you just spray massive volume and pay for the converted. But with brand advertising you have to tune the campaign to give the right audience the right message the right amount of times in the right context to move the needle on campaign objectives. All this becomes near impossible without the simple help of a cookie. Only in isolated cases is buying brand advertising on mobile valuable. For instance buying direct from content brands with huge audiences and registered targeting data, like Pandora and The Weather Channel. Or buying video where brand studies still consistently show attitudinal value. Otherwise it’s just too hard to buy quality at scale.
Look at the somersaults Millennial Media, the largest North American “independent” ad network undergoes just to try and replicate simple cookie functionality to target a unique user (from their S1 filing):

MYDAS then runs a proprietary set of algorithms to analyze multiple data points from the device, carrier and app to statistically determine, on an anonymous basis, the likely unique user of the device and the app requesting the ad.

Seriously. Enter hoop, commence jumping. Ad platform managers I’ve spoken with are now worried that even this will get worse as Apple deprecated unique phone identifiers in iOS 5 and is poised to cloak UDIDs from apps in iOS 6. This is one of the data points Millennial surely uses as do many ad platforms and it means there will be one less credible way to ensure a unique user is targeted. This means brand advertisers will again buy less at lower prices.
No doubt consumers have strong opinions about companies using and storing data on their phones, and they should have controls and transparency. But shouldn’t the browsers at least shoot for parity with the web? Isn’t that a better experience for consumers in the end? Where cookie infrastructure feeds a revenue model and users always have the option to turn cookies off. That revenue model in turn allows great content and apps to flow. Simple unique user targeting is foundational to online ad spending and in mobile we’re using magic potions to describe a “likely” unique user. Ad spend will never catch up to online with these constraints. That will eventually hurt developers and end users’ access to great content and apps.
Apple’s strategy now is to help itself while it hurts the industry. iAds can identify unique users through iTunes registration and maybe they’ll even reserve UDID information for themselves as a trusted steward of consumer privacy. It just so happens that that stewardship creates an unfair advantage in the ad network space where networks will have trouble competing. Machiavelli would have noted with glee the timing of the announcement and Millennial Media’s expected upcoming IPO.
Frankly Apple doesn’t care as much about advertising revenue as they do about happy publishers. As the lack of ad infrastructure depreciates the value of developer inventory, Apple is providing a life support alternative in the form of higher revenue shares. This is a short-term fix and bad for the industry as buyers like the one referenced at the beginning of this post want to see a vibrant ecosystem of sellers and selling technology to increase their spend to online levels. The move is bad for most publishers no matter what the revenue share.
Apple could have easily taken a position to build quality and value in the mobile brand advertising ecosystem by addressing the infrastructure problems rather than pretending that they alone can support the segment. As one platform product manager put it to me, They could have designed a “reliable, and privacy conscious third-party tracking mechanism” that all networks and developers could use. This would help networks and brands to better track and target users and ad usage across properties, web and app. It would lead to a well spring of new ad innovation on iOS devices. This would have started to build the infrastructure for brand buying at scale with confidence and credibility. Users would get higher quality advertising. Developers get more dollars and Apple wins by having happy developers.
What they did instead is tell advertisers they are slashing prices and opening up the bargain bin. And they told developers that they’ll be happy with the new benevolent ad dictatorship and sole innovator. Shame. Mobile advertising was very close to its Cinderella moment, and Apple just decided to keep the glass slipper and close the ballroom doors.

16:05 by Robert dawne · 0

LinkedIn Revenue Surges Over Analyst Expectations; Stock Jumps

LinkedIn has announced that revenue has more than doubled in the last quarter and they’ve increased their 2012 revenues, and the stock has jumped accordingly.  The social network reported $167.7 million in revenue for the fourth quarter, beating the average analyst estimate of $159.8 million in the quarter.  The good news also comes at a time where people are piling into social media stocks, with Zynga hovering around 30% higher than it’s IPO price and LinkedIn now almost 200% over it’s $45 IPO price, placing it’s market cap at $8.67 billion.
The non-GAAP net income for the quarter was $13.3 million which represents an increase in profitability.  For the fourth quarter of 2010 the net income was $5.2 million.  LinkedIn earns it’s revenue from a variety of products.  They have Hiring Solutions, Marketing Solutions and Premium Subscriptions.  Looking at the fiscal report, we can see that revenue increased in all three areas.  A promising factor here is also that they are a diversified company: they are increasing revenue on all fronts.
Hiring solutions, which are their tools which help recruiters find solid candidates using the network, increased over Q42010 by 136% to $84.9 million.  Marketing solutions increased 77% to $49.5 million.  Revenue from Premium subscriptions increased 87% to $33.3 million.
This is incredible news for LinkedIn but also for the social sector as a whole.  It’s clear that revenue is a real possibility, and LinkedIn is demonstrating that.  Facebook’s IPO is gaining steam and recently broke the $100B valuation mark, and with news like this investors are all going to believe in the power of the network.  The one factor here is that LinkedIn is a professional network who have excelled at keeping their user base professional and keeping distractions out of the way — it’s a great place to find quality people.  LinkedIn also focuses on hiring products that they are explicitly selling to companies which is not part of Facebook’s arsenal at this point.
However, Facebook has Facebook credits in the wings, and if they’re able to launch that it could become a huge force on the web for e-commerce.  That may be a driving force that could help Facebook increase their revenues in place of having a specific product.
LinkedIn has also announced it hit 150 million members and is continuing to grow at a staggering pace.

16:00 by Robert dawne · 0

Facebook’s Amended S-1 Exhibits Zynga Agreement Filed Last Year

Facebook has just filed an amendment to its S-1 that exhibits the agreements between it and Zynga. These 2 developer agreement documents are the same as those filed in Zynga’s own S-1 amendment from last year and don’t include significant new information.
The exhibits do spell out how Facebook has promised to help Zynga with advertising on Zynga sites such as FarmVille.com, and share revenue from such a partnership. This should not be confused to mean sharing ad revenue from Zynga’s games on Facebook.com. Facebook also included its 2005 stock plan, and employment letters to key executives.
The developer agreement documents appear to have the same redactions as when Zynga filed them. Last year, TechCrunch writer Eric Eldon reported on these docs explaining how they show that:

Facebook also appears to have guaranteed Zynga certain growth targets in exchange for continuing to invest in games on the platform, whether web or mobile. Facebook has given Zynga permission to create some sort of “Zynga Platform”. It also has given the developer access to new features, including a proposed “Game Friends Protocol” API, apparently offering a new way for social gamers to find and play together.

Regarding ad revenue sharing:

At first glance, the terms read as if Zynga had a special deal with Facebook, where it gets a portion of the ad revenue from Facebook ad units that run alongside its games in canvas apps. However, the terms specified that it is not canvas app ad revenue — instead, it’s referring to Zynga web sites [also known as Zynga Game Pages, which do not include Canvas Pages or any other pages on www.faceboook.com.].
We asked Facebook about the matter and got this response: “We don’t have agreements with any developers, including Zynga, to share revenue from ads next to their Facebook canvas apps. We did agree with Zynga to work together in the future on providing ads on their properties beyond Facebook, but we have no current timeline for when we might start working on that.”

This could be the first sign of a future Facebook off-site ad network, in which sites could host ads that employ Facebook’s own targeting system to present relevant ads to visitors that are currently logged in to Facebook. This could become a huge revenue stream for Facebook if it ever rolls the system out to sites beyond Zynga’s.
Some specific points from the agreement:

• Zynga is responsible for “all content and materials, maintenance and operation” of its own gaming websites, except for the Facebook ads it hosts
• Zynga will not “remove, minimize, frame, or otherwise inhibit the full and complete display of any Page” such that it could obscure ads or overlays that pop up when ads are clicked.
• Zynga will exclusively use Facebook Credits as its in-game purchase processing method on all its “Covered Zynga Services”, including Mafia  Wars, FarmVille, and any other games that utilize Facebook data.

15:08 by Robert dawne · 0