Peter Fader - Faculty Research in Knowledge@Wharton

Bing Gives Microsoft a Boost, but Can It Compete with Google?

Wed, 05 Aug 2009 16:41:52 EST

Early reports show that Microsoft's new search engine, Bing, has managed to draw more users than its predecessor, Live Search. According to Wharton faculty, however, while Microsoft's campaign to promote Bing has been successful so far, it is unclear whether its well-funded effort will make significant inroads in a market dominated by Google. On the other hand, they believe the campaign helped pressure Yahoo into an important partnership agreement after months of fitful negotiations.

Cable TV Follows Its Subscribers to the Internet

Wed, 22 Jul 2009 15:41:58 EST

The cable television industry's answer to the increasing threat from Internet video sites such as YouTube and Hulu focuses on a clear-cut strategy: Make cable subscriptions portable to any Internet accessible device, such as a laptop computer or even a mobile phone, for no additional charge. Experts at Wharton say the move is a promising early step in meeting the Internet video challenge, but they expect more such experimentation ahead.

Leaving 'Friendprints': How Online Social Networks Are Redefining Privacy and Personal Security

Wed, 10 Jun 2009 17:08:51 EST

A generation is growing up with social networking web sites such as Facebook and MySpace, casually posting accounts of their lives for their friends -- and the world -- to see. Few of these users realize that the information they post, when combined with new technologies for gathering and compiling data, can create a fingerprint-like pattern of behavior. The information provides opportunities not only for legitimate businesses, but also for identity thieves and other predators, according to faculty at Wharton and elsewhere.

Advertising Yourself: Building a Personal Brand through Social Networks

Wed, 15 Apr 2009 15:21:37 EST

With the economy mired in a recession, even some full-time employees are joining independent consultants, writers and musicians in learning how to use online social networking tools such as Facebook and Twitter to increase their contacts and tap into possible customers or clients. Indeed, according to Wharton experts and others, developing a personal brand can be as important for a financial advisor as for a rock musician.

All That Twitters Isn't Gold: A Popular Web Application in Search of a Business Plan

Wed, 15 Apr 2009 15:21:37 EST

The world may be buzzing about Twitter, but will the San Francisco-based messaging service with the high cool factor ever be a money maker? Or will it operate at a perpetual loss, as one Wall Street analyst suggested, "until the next cool Web 2.0 social networking concept comes along and Twitter tweets no more."

Best Buy vs. Wal-Mart: Is There Room for Both, and Others?

Wed, 01 Apr 2009 17:13:39 EST

With the demise of electronics retailer Circuit City in March, Best Buy and Wal-Mart Stores are ramping up their struggle to capture added share of the consumer electronics market. Best Buy is positioning itself as the provider of quality service and sales help; Wal-Mart is using its dominance across all retail categories to position itself as the low-price option in consumer electronics. Wharton faculty and industry analysts say instead of fighting to the death, both stores can coexist if they follow clearly defined strategies focusing on service and price.

Time for a Data Diet? Deciding What Customer Information to Keep -- and What to Toss

Wed, 18 Mar 2009 16:34:51 EST

Heartland Payment Systems, a credit card processor, may have had up to 100 million records exposed to malicious hackers. Payment processors CheckFree and RBS Worldpay, and employment site Monster.com have all reported data breaches in recent months, as have universities and government agencies. Experts at Wharton say that personal data is increasingly a liability for companies, and suggest that part of the solution may be minimizing the customer information these companies keep.

Urgent Deadline for Newspapers: Find a New Business Plan before You Vanish

Wed, 07 Jan 2009 16:53:55 EST

It was a tough year for newspapers. The owner of The Los Angeles Times and Chicago Tribune declared bankruptcy; The New York Times borrowed against its headquarters and even accepted ads on its front page. Detroit's two dailies announced the end of home delivery on all but three days of the week. According to Wharton faculty, if newspapers can't find a new business model quickly, they may soon be printing final editions.

When the Going Gets Tough, the Tough Don't Skimp on Their Ad Budgets

Wed, 26 Nov 2008 12:18:24 EST

With corporate managers under enormous pressure to control costs and maintain liquidity in the current credit crisis, advertising budgets often appear to be a dispensable luxury in the struggle to survive. According to Wharton faculty and marketing experts, that attitude can result in short-term gains, but long-term trouble.

Opportunities -- and Obstacles -- for the B2B Market in Tough Economic Times

Wed, 29 Oct 2008 13:34:46 EST

While discussion at the recent Erin Anderson B2B Research Conference at Wharton focused on cutting-edge research in the field of business-to-business relationships, participants also acknowledged the impact on marketers of the ongoing financial meltdown. Along those lines, three university professors and a moderator took part in a panel that analyzed the effect of the economic downturn on the B2B global marketplace. The Conference, sponsored by the Wharton INSEAD Alliance, was held in honor of Erin Anderson, a marketing professor at Wharton from 1981 to 1994, and at INSEAD from 1994 until her death in 2007.

Tuning in a Post-merger Strategy: Sirius XM Must Cut Costs and Build Its Case

Wed, 03 Sep 2008 17:03:03 EST

Now that the FCC has approved a merger of the two satellite radio companies, Sirius XM's big challenges are to stop the flow of red ink and settle on a strategy to compete with the myriad of other portable music providers. Says one Wharton professor: "They may have one more shot at a Hail Mary pass."

War of the Words: Scrabulous Is off Facebook, but Did Hasbro Win the Game?

Wed, 06 Aug 2008 17:34:27 EST

Scrabble -- the board game in which you compete with other players in making words -- has become a familiar household name since it was introduced in 1948. Its unofficial online double, Scrabulous, has become one of the most popular applications on Facebook since it was launched in July 2007. Now, both games are making waves as Hasbro, the copyright holder for Scrabble in the U.S. and Canada, has filed a lawsuit against the creators of Scrabulous -- following which Scrabulous was yanked off Facebook in late July. But in today's fast-changing social networking environment, Hasbro's lawsuit and its attempt to control its online image may not be the right move, Wharton faculty say.

Fast Forward: Tech Giants Scramble For Bigger Piece of Growing Online Ad Market

Wed, 23 Jul 2008 13:40:28 EST

Microsoft, Google and Yahoo have been talking about -- and making -- deals that each believes will help secure its future in the fast-growing market for online advertising. No matter how their maneuvering concludes, advertising and marketing firms must get ready to adapt to new technology that promises to speed the migration of ads from traditional media to the web.

Will Technology Firms Bridge the Chasm Between Computer and TV?

Wed, 25 Jun 2008 15:40:07 EST

Hewlett-Packard, Netflix, Apple and others want to move content from the Internet to that big flat-screen TV in the living room. Wharton experts wonder if there is a market for this and indeed, whether consumers are even willing to accept interactive television. The best advice to companies for now: Hedge your bets.

Gold May Glitter, but It Doesn't Stack up as a Long-term Investment

Wed, 30 Apr 2008 17:36:16 EST

Call it a gold rush, of sorts. Gold topped out at more than $1,000 an ounce in mid-March, up from about $680 a year ago. Although it dipped to just under $900 late in April, it has had a tremendous run, up from $350 five years ago. What has driven these price gains? What does gold tell us about the economy's future? Should ordinary investors buy it? Knowledge@Wharton talks to the experts.

Gadgets at Work: The Blurring Boundary between Consumer and Corporate Technologies

Wed, 16 Apr 2008 16:43:25 EST

The boundaries between work and play are beginning to disappear as consumer technologies -- including social networking tools, user generated content and wikis -- are increasingly adopted by corporate America. For technology companies, this emerging "consumerization" trend represents an opportunity, but it also brings new management challenges as companies struggle to embrace these technologies in a way that doesn't limit their usefulness but also doesn't result in lost time or money. And while there may be productivity gains for corporations that experiment with integrating the latest consumer gadgets, security remains the deal breaker, say experts at Wharton.

The Experts vs. the Amateurs: A Tug of War over the Future of Media

Wed, 19 Mar 2008 14:57:40 EST

A tug of war over the future of media may be brewing between so-called user-generated content -- including amateurs who produce blogs, video and audio for public consumption -- and professional journalists, movie makers and record labels, along with the deep-pocketed companies that back them. The ultimate outcome: a hybrid approach that features entirely new business models, say experts at Wharton.

If Online Marketing Is the Future, Why Are Some CMOs Stuck in the Past?

Wed, 06 Feb 2008 15:51:11 EST

Americans spend an average of 14 hours a week online and 14 hours watching TV. But marketers spend 22% of their advertising dollars on TV and only 6% online, according to data compiled and analyzed by Google. Why are some chief marketing officers and major advertisers reluctant to add digital technology to the marketing mix, despite the Internet's ability to help target huge audiences and build brand awareness? Wharton faculty and marketing experts offer a number of answers, but they also note that CMOs and others will soon have no choice but to start taking advantage of an increasing number of online advertising options.

Scrabulous and the New Social Operating System: How Facebook Gave Birth to an Industry

Wed, 23 Jan 2008 16:49:57 EST

Most industries do not begin on a single day, but it's easy to see Facebook CEO Mark Zuckerberg's presentation on May 24, 2007, as the starting gun in an entrepreneurial race that some have dubbed "the Facebook Economy." Zuckerberg announced that the social networking site would open to third-party developers, transforming itself into a platform on which other businesses can operate. Eight months later, more than 14,000 applications from third-party developers are live on Facebook, including Scrabulous, an online version of the word game Scrabble. But Scrabulous, one of Facebook's biggest hits, may also become a victim of its own success.

Digital Rights Management: Dead or Just Evolving?

Wed, 23 Jan 2008 16:49:57 EST

On January 10, Amazon.com announced a partnership with Sony BMG Music Entertainment to offer music downloads without digital rights management software, which typically limits how content can be used. Amazon now has all four major music labels, along with thousands of independent ones, selling songs without DRM technology. While DRM may be all but dead in the music industry, experts at Wharton point out that it is still widely used in the online video industry due to what one faculty member calls "a different market dynamic."

Marrying Marketing Science with the Front Lines: One Book Publisher's Winning Combination

Wed, 12 Dec 2007 14:42:26 EST

The event was a contest designed to highlight the ways that advanced marketing science can improve the bottom line. The place was the recent Practice and Impact of Marketing Science 2007 conference held at Wharton. And the winner was the National Academies Press (NAP), the book-publishing arm of the National Academy of Sciences, which presented information on how marketing research had helped it realize a common but often elusive goal -- reaching as many customers as possible at the highest attainable price.

Getting a Read on Amazon's New Kindle

Wed, 28 Nov 2007 15:54:07 EST

On November 19, Amazon.com CEO Jeff Bezos announced the launch of an e-book device called Kindle. It weighs 10.3 ounces, costs $399 and can be used without a computer, offering instead a free, high-speed wireless data network from Sprint. Users can download books in less than 60 seconds, as well as newspapers, magazines and blogs (for a fee). The device uses an eye-friendly screen and lets readers increase the type size as needed. Will it be a hit, even though most other e-book efforts have been unsuccessful? We asked marketing professor Peter Fader, Don Huesman, senior director of information technology, and management professor Dan Raff to give us their reviews.

Polling the Polling Experts: How Accurate and Useful Are Polls These Days?

Wed, 14 Nov 2007 15:20:43 EST

Turn on the Internet, pick up your telephone or cell phone, read a newspaper or watch television: No matter what the communication vehicle is, polls and the reporting of poll results are ubiquitous. Yet how accurate are polls? Can they be manipulated? How do the Internet and the proliferation of cell phone users affect both marketing and political polls? And which polls are the most reliable? Knowledge@Wharton interviewed the experts.

Radiohead's Free-for-all: Performance Art or New Business Model?

Wed, 17 Oct 2007 15:24:43 EST

Radiohead, the British rock band, sent shock waves through the music industry recently when it announced that it would release its latest album online, without a record label, and let fans pay whatever they wanted to for it -- including nothing at all. For Radiohead, this means that the group gets to keep the entire price of each album sold, not just a small fraction of it. But what are the implications for the industry in general? In this video podcast, Wharton marketing professor Peter Fader and Don Huesman, senior director of information technology at Wharton, offer their reactions to Radiohead's move.

In the Growing Market for Online Video, TV Networks Want a Piece of the Action

Wed, 03 Oct 2007 14:47:58 EST

CBS launches an online editing studio called EyeLab so fans can edit short versions of video programming. ABC distributes full versions of its television shows on its own site and via AOL for free. NBC Universal teams up with Amazon.com to distribute its shows. The frenetic wheeling and dealing for digital distribution of TV programs -- just as the fall season is gearing up -- reflects the television networks' attempts to find Internet business models that can be profitable and still protect both their intellectual property and brand identity.

Who's the Winner in the Tug-of-War between 'Walled Garden' and 'Open Plain' Strategies?

Wed, 05 Sep 2007 15:46:23 EST

In August, less than three months after the introduction of Apple's iPhone, a New Jersey teen announced that he had "hacked" into the mobile-communications device. The hacker was clearly expressing the frustration that many consumers feel towards Apple for adopting a "walled garden" -- as opposed to an "open architecture" or "open plain" -- corporate strategy. While the walled garden approach often restricts consumers' ability to modify devices or marry them with other firms' products and services, the open architecture approach has its drawbacks as well. Wharton faculty and others look at the advantages and disadvantages -- for both consumers and companies -- of these two strategies.

Beware the 'Walking Dead': Analyzing Customer Data from a Multi-Service Firm

Wed, 13 Jun 2007 14:33:58 EST

Think of them as the "walking dead," a type of customer who currently maintains service with a particular company, but whose next action will most likely be to discontinue that relationship, according to a new study that examines how the customers of a telecommunications firm acquire and discard services over time. The paper -- "Modeling the Evolution of Customers' Service Portfolios," by Wharton marketing professors Peter Fader and Eric Bradlow and a former Wharton PhD student -- focuses in part on whether it is possible to predict future purchasing patterns by looking at past buying behavior.

Media Moves: Will the New Online Advertising Models Click?

Wed, 30 May 2007 15:38:15 EST

Microsoft buys aQuantive; Google acquires DoubleClick for $3.1 billion; Yahoo purchases the 80% of Right Media it doesn't already own, and ad firm WPP gets 24/7 Real Media for $649 million. And that's just in the last six weeks. The common thread: All the takeover targets are online advertising companies. The race to consolidate the online advertising industry is heating up at the same time that advertisers are demanding more return on their marketing dollars. Wharton professors and others analyze how this will play out for tech companies, ad companies and consumers.

Web vs. Print: Online Successes at One Newspaper Raise More Questions Than They Answer

Wed, 04 Apr 2007 15:13:23 EST

The newsroom at washingtonpost.com, the website of The Washington Post, is not so different from that of a print newspaper, with one notable exception: At a time when newsrooms across the country have empty desks from recent buyouts and layoffs, staff numbers here are expanding to fill every available nook and cranny. Washingtonpost.com is a success story in an industry where the divide between vibrant online ventures and shrinking print products is increasingly sharp. But even the Post has no idea how long that success will last, how much money it can make from the venture, or who exactly its competition is.

At Google, the Search Is On for a New Approach to Old Media

Wed, 07 Mar 2007 14:51:20 EST

Viacom and CBS have pulled videos from Google's YouTube. The Academy of Motion Picture Arts and Sciences recently requested that some Oscar footage be taken down from YouTube as well. And Google's efforts to sell radio and print advertising have not met expectations. In short, Google's ability to navigate the traditional media landscape doesn't seem to be going particularly well. What's the problem? While Google has the resources to create deals with content companies, it still must contend with a number of confounding crosscurrents, including content owners' concerns over intellectual property and a clash of advertising models.

Steve Jobs' Most Recent Vision for the Future: A World without DRM

Thu, 01 Mar 2007 13:59:46 EST

The issue of using hardware- or software-based digital rights management, or "DRM", to restrict how music and movies can be copied or shared has spurred fierce debate between those who think DRM is essential to protect content from unauthorized use, and those who believe it undermines consumers' rights to do whatever they want with the content they purchase. On February 6, Apple CEO Steve Jobs added to the controversy by posting an open letter on Apple's web site in which he proposes that the recording industry simply do away with DRM all together. Knowledge@Wharton asked marketing professor Peter Fader, and Don Huesman, senior director of information technology, for their views on the subject.

Sirius and XM: Can Two Archrivals Sing the Same Tune?

Wed, 21 Feb 2007 15:01:25 EST

On Monday, the country's two satellite radio services -- Sirius and XM -- announced that they had finally agreed to merge. The move raises a number of questions, not the least of which is whether they can get this deal approved by the Federal Communications Commission and the Justice Department. But regulatory issues aside, what prompted these two archrivals to embrace each other, what do they expect to get out of it, and what does a combined company mean for consumers who currently pay a subscription fee of $12.95 a month? Knowledge@Wharton asked for comments from Wharton marketing professor Peter Fader, whom we talked with first, and business and public policy professor Gerald Faulhaber.

Peter Fader on the New iPhone and Matching Technology to Consumer Demand

Wed, 24 Jan 2007 15:12:24 EST

Announcements at the Consumer Electronics Show and Apple's MacWorld conference, both held earlier this month, heralded the arrival of a number of products at the center of technology convergence trends. Among the most eagerly awaited are Apple's iPhone -- which brings together the capabilities of a cell phone and an iPod music player, along with other features associated with personal computers -- and Apple TV, which allows users to play the movies and TV shows they download from iTunes on their big-screen TVs. But are computer companies like Apple hitting the right notes? Wharton marketing professor Peter Fader spoke with Knowledge@Wharton about whether iPhone, Apple TV and other products are delivering features that consumers really want, or if this is simply technology in search of a market.

What's in a Name? For Apple, a Focus on the Digital Living Room

Wed, 24 Jan 2007 15:12:24 EST

Apple's name change from Apple Computer to Apple on January 9 highlights the company's new reality: CEO Steve Jobs' strategy today revolves around converged consumer devices much more than around personal computers. How successful will this new strategy be in the face of competition from Microsoft, Sony, Motorola, Samsung, Nokia and others who are looking to dominate the digital convergence domain?

Online Companies Want a Piece of Old-style Media Business

Wed, 29 Nov 2006 15:45:38 EST

After conquering the advertising frontier in cyberspace, Google, Yahoo and eBay are now turning to traditional media for future growth by brokering ad sales for offline media like radio, television and print. The Internet players' foray into offline advertising could drive down rates, but advertisers and media companies may not completely abandon the current system of relationship-based sales for Internet auctions, according to Wharton faculty and industry executives.

The 'Traveling Salesman' Goes Shopping: The Efficiency of Purchasing Patterns in the Grocery Store

Wed, 29 Nov 2006 15:45:38 EST

If a traveling salesman has to visit a set number of cities in a set number of days, what is the shortest route he can take to cover all his stops and then return home? And does the answer to this question relate in any way to the manner in which a shopper navigates her way through a grocery store? In a new paper, Wharton marketing professors Peter S. Fader and Eric T. Bradlow and doctoral student Sam K. Hui use a concept known as the "Traveling Salesman Problem" to study the efficiencies -- and inefficiencies -- of grocery shoppers.

What's Next for Netflix?

Wed, 01 Nov 2006 15:04:42 EST

Ever since Netflix launched its online video rental service in 1999, conventional wisdom has suggested that the clock was ticking on its business model. First, there were worries that Blockbuster would squash Netflix. Then it was Wal-Mart's DVD rental service, which Netflix absorbed in a partnership arrangement last year. Today, Netflix is under fire from movie download services offered by powerhouses such as Amazon.com and Apple. Looking ahead, what kind of sequel is likely for Netflix?

Dot-Com Bubble, Part II? Why It's So Hard to Value Social Networking Sites

Wed, 04 Oct 2006 15:16:03 EST

Less than three years after emerging from nowhere, the hot social networking website MySpace is on pace to be worth a whopping $15 billion in just three more years. Or is it? And is the much smaller Facebook really worth the $900 million or more Yahoo is reported to have offered for it? The problem, say Wharton experts, is a dearth of information -- including data on expected revenue generation and cost structure -- to plug into the standard valuation models.

Coming Attraction: YouTube's Business Model

Wed, 04 Oct 2006 14:39:32 EST

A deal between YouTube and Warner Music Group to share music videos and revenue could usher in an era where the interests of content copyright holders and freebie-loving consumers align. Or it could wind up being just another stab at a business model for YouTube. The outcome will be determined by how the revenue between copyright holders and distributors like YouTube gets shared, say experts at Wharton.

Podcast: Online Music and Movies: Which of the New Digital Entertainment Models Offers the Best Value?

Wed, 20 Sep 2006 15:52:35 EST

It's been an exciting couple weeks for fans of digital downloads of music and movies, with Microsoft's official announcement of its Zune portable music player along with the Zune Marketplace download service; Apple's announcement of several new models of its iPod music player and the new availability of movie downloads from iTunes; and Amazon.com's introduction of its "Unbox" service offering rent-or-own movie downloads. Knowledge@Wharton spoke with Wharton marketing professor Peter Fader and legal studies and business ethics professor Kevin Werbach to find out which of these approaches will deliver the best entertainment options to consumers and the most value for their companies' shareholders.

The Move to Vertical Product Integration: Can Microsoft Succeed Here, Too?

Wed, 06 Sep 2006 14:30:41 EST

Given Microsoft's efforts to create a music player and service, dubbed "Zune," and its offer of design assistance to PC makers in preparation for the company's new Vista operating system, it appears that the software giant is increasingly dabbling in hardware and playing a bigger role in product design. The big question is: Why? While some analysts dismiss Microsoft's efforts as Apple envy, experts at Wharton say there is a bigger picture. Microsoft wants more control over integrating its software with the gadgets that could open new markets. Its real mission: Find new vertical markets to dominate so it can continue to grow even if its Windows monopoly erodes.

From Confrontation to Experimentation: The Music Industry Is Playing a New Tune

Wed, 26 Jul 2006 12:06:19 EST

EMI Music backs a label that turns the traditional economics of the recording industry on its head. Vivendi's Universal Music Group creates multiple pricing schemes for CDs. Sony BMG Music Entertainment and Yahoo decide to sell a single without digital rights restrictions. These moves typify a flurry of experimentation by major record labels in recent weeks, and stand in stark contrast to earlier behavior by an industry that six years ago was best known for launching anti-piracy lawsuits against Napster -- a network that originally swapped music files for free -- and individual users. Today, according to experts at Wharton, the recording industry is actively trying to create new business models as it navigates the emerging Internet-enabled landscape.

Will the New Nike+iPod Sport Kit Hit the Ground Running, or Hit the Wall?

Wed, 26 Jul 2006 12:03:13 EST

Music, physical movement, technology and being cool have long gone hand in hand. Now, two iconic brands, Apple Computer and Nike, are collaborating on a new system of gizmos that take exercising and digital-music players to a new level. The Nike+iPod Sport Kit allows runners and walkers to listen to songs and to record, store and share information (such as speed, distance covered and calories burned) with others about their exercise sessions. The system also "talks" to runners in real time, providing information as they jog along. Members of Wharton's marketing department say it's a winning combination that will bolster each company's image and open the door to other co-branding opportunities. But they disagree as to whether the joint effort will actually sell more iPods and Nike shoes.

Online Video: The Market Is Hot, but Business Models Are Fuzzy

Wed, 12 Jul 2006 17:28:21 EST

On July 11, Sony Pictures Home Entertainment became just the latest media giant to put its heft behind a small startup, as the white-hot online video market has players both big and small placing bets on digital distribution. Add up the venture capital dollars funding online video startups, the technology advances, the willingness of established players like ABC, CBS and NBC to try new distribution models and the increasing web viewership, and it's clear that the video market is at an inflection point, say experts at Wharton and media research firms. However, several questions remain: What will ultimately become of all the wheeling and dealing in the online video market? What are the most important technologies needed to expand online video? Can online video startups find viable business models? And aren't all parties simply hedging their bets since it's unclear which online video distribution models will win?

MySpace, Facebook and Other Social Networking Sites: Hot Today, Gone Tomorrow?

Wed, 03 May 2006 15:07:25 EST

Popular social network sites, including MySpace and Facebook, are changing the human fabric of the Internet and have the potential to pay off big for investors, but -- given their youthful user base -- they are unusually vulnerable to the next new fad. As quickly as users flock to one trendy Internet site, they can just as quickly move on to another with no advance warning, according to Wharton faculty and Internet analysts, who offer some ideas on how these new sites can both increase user loyalty and generate revenues.

TV on the Web: Is the Model Shifting?

Mon, 24 Apr 2006 21:22:24 EST

Disney, the media giant, announced earlier this month that the company would provide several major shows -- Desperate Housewives, Lost, Commander-in-Chief and Alias -- as free streaming video through the ABC network's website. Also this month, the Wall Street Journal reported that the Fox network has signed agreements with 187 of its affiliated stations to share revenues from reruns of its programs on the web. What is behind these moves? Wharton marketing professor Peter Fader spoke with Mukul Pandya, editor-in-chief of Knowledge@Wharton, and Kendall Whitehouse, Knowledge@Wharton's contributing editor in technology, about these developments and what they mean for the media industry.

The Coffee Wars Heat Up: New Strategies to Jolt the Caffeine-Conscious Consumer

Wed, 19 Apr 2006 16:18:31 EST

Consumers' love affair with expensive, customized cups of coffee shows no signs of abating, even though most orders consist of little more than a cup of water, a splash of milk, a spoonful of coffee grinds and 30 seconds of labor. Indeed, Starbucks has managed to turn its customers' craving for caffeine into a $6.4 billion a year business, with close to 6,000 company-owned coffeehouses already up and running, and five new ones opening each day. All of which explains why so many coffee sellers seem intent on taking away some of Starbucks' highly profitable market share. Yet according to Wharton marketing professors, some companies are so obsessed with swiping business from Starbucks, or losing customers to it, that they may be abandoning a niche that has already proved profitable.

Talking Chimps, Subservient Chickens And Others Blend Entertainment and Advertising

Wed, 05 Apr 2006 17:06:25 EST

A talking chimp arriving in e-mail inboxes speaks in its sender's voice through a telephone connection or recites a pre-recorded joke for the boss. Burger King's ad campaign offers a "subservient chicken" site where viewers can type in commands to a person in a chicken suit with red garters. JibJab is developing a new site called JokeBox, where consumers and corporations can post and share funny videos or jokes online. These are among the latest viral marketing campaigns that blend advertisement and interactive entertainment across informal consumer networks. The convergence may be inevitable, say Wharton faculty and others, but it remains unclear whether such an approach is sustainable and measurable, and whether it will actually generate new business.

All the News That's Fit to ... Aggregate, Download, Blog: Are Newspapers Yesterday's News?

Wed, 22 Mar 2006 15:54:43 EST

The recent sale of Knight Ridder, the country's second-largest newspaper chain, to McClatchy follows one of the most difficult years the industry has had -- declining circulation, job losses and falling stock prices. Newspapers, it would seem, have two big strikes against them: They are in a mature industry and they are a textbook example (stockbrokers are another) of an intermediary between sources of information and customers -- a role that is being increasingly challenged by the Internet. To remain competitive in the coming years, say Wharton faculty and others, daily newspapers will have to strengthen their efforts to attract younger readers, make more imaginative use of the Internet, and develop stories, mostly local in nature, that better meet the needs of time-pressed subscribers.

Entertainment Tonight, and Tomorrow: The Media Industry's New Channels, New Content, New CEOs

Wed, 08 Mar 2006 08:42:38 EST

Numerous American industries are being battered by lower-cost competition from abroad. But the U.S. entertainment sector is poised to profit amid the onslaught, say Hollywood executive Jeff Berg and Wall Street investor Suhail Rizvi. Berg, chairman of International Creative Management talent agency, has made his career in Hollywood; Rizvi, head of a private equity firm, recently invested (along with Merrill Lynch) about $100 million in ICM. But Berg and Rizvi's partnership rests on clear-eyed strategic reasoning, not a shared fascination with the glitter. "The production of media may go to other places, but the content will still be owned by U.S. companies, and that's where the value lies," Rizvi says. He and Berg spoke last month at the inaugural meeting of the Wharton undergraduate media and entertainment club.

Sirius Satellite Radio and Howard Stern Go Ear to Ear with XM

Wed, 22 Feb 2006 16:56:24 EST

Since announcing on October 6, 2004, that it had signed Howard Stern to a five-year deal, Sirius Satellite Radio has added approximately 2.7 million subscribers and become a household name in the satellite radio world. The tab: Close to $700 million. Is Stern worth it? Can the popular and raunchy talk show host catapult Sirius ahead of rival XM Satellite Radio, or are there other issues to consider, such as the threat of new technologies, the need to provide good content, and the continuing popularity of conventional radio? Wharton faculty and others debate the different strategies of Sirius and XM and the challenges that both face.

Is the Disney-Pixar Deal Overhyped?

Wed, 08 Feb 2006 16:47:20 EST

Walt Disney announced yesterday that it is acquiring Pixar, the animated film studio that has made such hits as The Incredibles, Finding Nemo and Toy Story. As part of the $7.4 billion deal, Pixar's founder, Steve Jobs, will become a Disney board member and also its biggest shareholder. In an audio-only interview, Wharton marketing professor Peter Fader speaks with Mukul Pandya, editor-in-chief of Knowledge@Wharton, and Robbie Shell, editorial director, about the implications of this deal, not just for the two companies involved but for the whole media and entertainment industry.

Digital Rights Management (DRM): Media Companies' Next Flop?

Wed, 08 Feb 2006 16:31:18 EST

Big media players are accustomed to watching the ratings for the most popular music, video and book content, but perhaps they should pay more attention to how consumers feel about three letters at the bottom of most charts -- DRM, which stands for digital rights management. Broadly defined, DRM encompasses multiple technologies that control the use of software, music, movies or any other piece of digital content. But media companies are risking a consumer backlash by deploying overzealous systems with draconian restrictions, say experts at Wharton, who also question whether DRM is worth the effort, whether it will survive, and what the best approach is for balancing the rights of consumers with the rights of content creators.

Can Wikipedia Survive Its Own Success?

Wed, 25 Jan 2006 15:13:16 EST

It's not easy being Wikipedia, a free web encyclopedia created and edited by anonymous contributors. Just ask founder Jimmy Wales, who has seen his creation come under fire in just a few short months as the site fends off vandalism and charges of inaccurate entries. But Wikipedia, founded in 2001 as a non-profit organization, has become a big enough presence that it raises a number of interesting questions, including: Just how accurate is free content, given recent events at Wikipedia? Does the aggregate 'wisdom of the crowd' trump the expertise of knowledgeable individuals? Does Wikipedia's policing mechanism work? And does the controversy over Wikipedia merely reflect further tension between old and new media? Wharton experts, along with Wales, offer some answers.

The 2006 Gadget Parade: A New Era of Convergence and Convenience

Wed, 08 Feb 2006 16:48:22 EST

Apple's iPod again ruled beneath the Christmas tree in 2005 after the latest model of the iconic music player was outfitted with a video screen. And as the new year begins, a long-anticipated era of convergence in consumer technology products draws closer, according to Wharton faculty and technology analysts. Meanwhile, cell phones that play video, e-mail delivered to handheld computers, telephone conversations over the PC -- and hundreds of other glimpses into Christmas future -- were on display at the annual Consumer Electronics Show in Las Vegas last week where the stepped-up presence of digital giants, including Microsoft, Google, Yahoo and Intel, signaled their ever-increasing interest in expanding from the office into consumers' living rooms.

Will the Online Book Publishing Flap Rewrite Copyright Law?

Wed, 08 Feb 2006 16:49:25 EST

The latest frontier in the digital content revolution -- efforts by Google, Amazon and others to turn millions of books into bytes that can be easily searched, accessed and sold by the page -- could redefine copyright law and change the way knowledge is shared around the world, say experts at Wharton. Prompted by Google's controversial move to scan copyrighted works, the issue leaves many unresolved questions: Does the greater good of putting books online outweigh current copyright law? Is Google's complete scanning a violation of copyright law even if the end user doesn't get much more than a small excerpt of the work in a search result? Should Google be required to get publishers' permission before scanning content? Perhaps most importantly, is copyright law designed for printed materials still valid in the digital age?

AOL: In Search of a New Strategy

Wed, 02 Nov 2005 16:31:57 EST

America Online is once again the center of Time Warner's growth strategy, and this go around there are a number of potential partners -- ranging from Microsoft and Google to Yahoo and Comcast -- reportedly interested in buying a minority stake. Yet to be determined is how the latest AOL business model, which includes both dial-up Internet access and advertising, will evolve. For example, what can AOL create that's unique? How can it reap profits from its instant messaging dominance? How will it convince its customers to stick with AOL as broadband Internet access grows in popularity? And why is Time Warner looking to sell a stake in AOL? Wharton and other experts weigh in on AOL's future.

Why Is Microsoft Afraid of Google?

Wed, 19 Oct 2005 16:43:39 EST

In the few short years of its existence, Google has come a long way, simultaneously striking fear in the hearts of major players in the computer industry and also arousing their curiosity. While the company is keeping all competitors on their toes, it poses a special threat to one particular company -- Microsoft. Why? Because Google's existing and potential products -- as well as those of other firms -- raise the specter that Microsoft may witness an erosion of its control over the platform for the next generation of software application development, according to Wharton faculty members who follow the technology sector. Just how serious is this threat and what is Microsoft doing to combat it?

As Sony Gets a Tune-up, Samsung Zooms Ahead

Wed, 19 Oct 2005 16:43:39 EST

In the same month that Sony laid off 10,000 workers amid a restructuring, Samsung announced a memory chip that will double the capacity of digital cameras and music devices, a new line of 50-inch plasma television sets and plans to create a new mobile phone design. The contrast between the two companies is stark. Sony, based in Tokyo, announced on September 22 that it is retooling to better integrate its media and electronics businesses. Meanwhile, Seoul-based Samsung remains focused on a key goal: To become the next Sony.

The Upgraded Digital Divide: Are We Developing New Technologies Faster than Consumers Can Use Them?

Wed, 05 Oct 2005 16:04:41 EST

TiVos and Treos and BlackBerrys. Wi-Fi and HDTV and plasma screens. Picture phones, digital cameras, iPods and now iPod cell phones. Complexity among consumer technology products has never been greater -- a good thing if the complexity means product improvement. But Wharton experts say new bells and whistles pose challenges to businesses and consumers alike. Complexity -- along with choice -- can have a big impact on how firms make and market new and improved gizmos, and on the decision processes of the people expected to buy them. Are we at a point, one commentator asks, where the next innovation will actually be the idea that ease of use is the most compelling feature of tech products?

Sony's Next Act: Will It Play?

Wed, 21 Sep 2005 15:26:48 EST

At the end of the month, Sony CEO Howard Stringer intends to release his grand plan to help the struggling Japanese consumer electronics and media giant regain its past glory. The big question is whether the company - whose sales totaled $66.9 billion in 2004 - has the corporate will to make a comeback. No one denies that Stringer has his work cut out for him. On July 28, the company reported its second consecutive quarterly net loss, a deficit of $66 million for the first quarter ending June 30, and substantially cut its profit outlook for the current fiscal year. Wharton experts and others discuss what caused Sony to stumble and what the company needs to do to get back in the game.

What Consumers -- and Retailers -- Should Know about Dynamic Pricing

Wed, 27 Jul 2005 16:50:59 EST

According to a recent study, 64% of consumers who shop on the Internet do not know that "it is legal for an online store to charge different people different prices at the same time of day." Yet dynamic pricing is not new. Retailers have been using it for years in ways that benefit not just themselves but also their customers. The challenge is to establish dynamic pricing in ways that lead to profitability rather than price wars. As one expert noted, companies should "engage in flexible pricing practices in order to honor their responsibilities to their shareholders. If retailers charge a flat, low price to make everyone happy, they're leaving a lot of money on the table."

Podcasting: Can This New Medium Make Money?

Wed, 27 Jul 2005 16:50:59 EST

Conservative commentator Rush Limbaugh and his nemesis, Al Franken, are podcasting. As are ESPN, former MTV video jockey Adam Curry and thousands of others. Podcasting, a way to broadcast audio over the Internet, has become the latest web movement to get everyone's attention. Indeed, a recent survey found that more than six million people out of the 22 million who own iPods or MP3 players have listened to a podcast. Such activity begs the question: Is podcasting here to stay? Experts at Wharton and elsewhere answer with a resounding yes. Is there a viable business model for these broadcasts? That's not as clear, although some observers suggest that advertising and paid subscriptions are possible sources of revenue.

Tune in Tomorrow for the Digital Living Room?

Wed, 15 Jun 2005 15:46:04 EST

When Microsoft introduced its long-awaited Xbox 360 console on May 12 in an MTV special, its intentions went beyond just fun and games. The company called the long-awaited product a "future-generation game and entertainment system." Its market? The increasingly crowded living room. Keeping in step with Microsoft, a long parade of technology companies is targeting home entertainment and selling wares that were typically offered by consumer electronic giants such as Sony. Is the so-called digital living room fact or fantasy? Who will the winners ultimately be? Wharton experts say the digital living room is becoming a reality -- slowly.

Tag Team: Tracking the Patterns of Supermarket Shoppers

Wed, 01 Jun 2005 17:22:46 EST

To the untrained eye, the presentation looks like little more than a child's randomly drawn zigzag pattern. But to Wharton marketing professor Peter S. Fader, those seemingly random lines represent a new dataset showing the paths taken by individual shoppers in an actual grocery store. The data -- charted for the first time by radio frequency identification (RFID) tags located on consumers' shopping carts -- has the potential to change the way retailers in general think about customers and their shopping patterns. Fader, Wharton marketing professor Eric T. Bradlow and doctoral candidate Jeffrey S. Larson analyze this data in a new research paper entitled "An Exploratory Look at Supermarket Shopping Paths."

Blogs, Everyone? Weblogs Are Here to Stay, but Where Are They Headed?

Wed, 06 Apr 2005 17:18:11 EST

Recently, blogs have been credited with everything from CBS News anchorman Dan Rather's departure, to unauthorized previews of the latest Apple Computer products, to new transparency in presidential campaigns. The big question is whether blogs, short for weblogs, have the staying power to become more than just online diaries. Will bloggers upend the mainstream media? What legal protections should bloggers have? Is there a blogger business model? While no definitive answers exist just yet, experts at Wharton advise questioners to be patient. Blogging, they note, will be around for a long time.

Browser Wars: Will Firefox Burn Explorer?

Wed, 23 Mar 2005 12:10:33 EST

Battling browsers are back. Just as in the 1990s, when Microsoft's Internet Explorer (IE) and Netscape's Navigator fought each other for supremacy, today Mozilla's Firefox browser is trying to gain traction over IE. This latest skirmish, however, goes beyond just browsing the web. Microsoft's security problems have left an opening for upstarts like Firefox and could lead to other products taking market share from the software giant, say experts at Wharton. Will Microsoft customers actively look for alternatives to IE? Or can the giant software company capture Firefox's best features and then blow this upstart competitor out of the water?

In eBay's Success May Lie Hints of Trouble Ahead

Wed, 09 Mar 2005 16:03:13 EST

When eBay reported its 2004 financial results on January 19, it looked like business as usual. Annual revenue was up 51% from a year ago, and net income jumped 76%. But then the company cut its outlook for 2005 and rankled customers with a fee increase. On Wall Street the Internet darling got panned as shares tumbled 19% in one day (January 20). Are these issues short-term growing pains or the beginning of something worse? Is eBay becoming a mature company that won't be able to keep up its heady growth? And what competitors are targeting eBay? Wharton experts say there's no need to get too worried about eBay's prospects right now. In the future, however, things may become more interesting.

What's the Buzz About Buzz Marketing?

Wed, 12 Jan 2005 15:15:21 EST

There's a new marketing catchphrase that's getting rave word-of-mouth reviews. From articles in the popular press to conversations in the classroom, huge companies to boutique marketing firms, suddenly it seems you can't talk about new products without addressing 'buzz marketing.' "People are buzzing about buzzing," says Wharton marketing professor Barbara Kahn who adds, along with others, that word-of-mouth marketing has long been recognized as a way to influence consumer behavior. What's new about buzz marketing is the structure and hype surrounding it and the attempts to measure its effectiveness on sales.

James Bond's BMW and Other Product Placements: New, Racier Ways to Advertise

Wed, 15 Dec 2004 15:34:52 EST

The 30-second television spot, once the mainstay of mass marketing, is waning in influence as new technology, including the Internet, cable television and TiVo, fractures the viewing audience. Consequently, advertisers are turning to alternative forms of promotion to reach consumers, according to Wharton faculty and advertising executives. One strategy: Blur the lines between advertising and entertainment in order to build an emotional bond with the consumer. Think "Lion King."

Amazon's Multiple Personalities

Fri, 14 Jan 2005 14:58:50 EST

Given the 86 million consumers that Jupiter Research predicts will be buying gifts online this holiday season, Amazon should be throwing off good cheer all around, right? Not exactly. Wall Street is acting like Scrooge as it frets about slowing revenue growth and diminishing profit margins in 2005. The big problem: Analysts are belatedly coming around to the idea that Amazon may be just a retailer, not some Internet high-flier that will dominate e-commerce. That means Amazon shares should be valued lower. Wharton experts, however, say these short-term worries are overblown although Amazon's business model does raise some concerns. Is being viewed as a retailer really so bad?

The Beat Goes On: This Recording Industry Bill Would Trap More than Just Illegal File-sharers

Wed, 03 Nov 2004 15:18:15 EST

In its latest assault on piracy, the recording industry is pushing legislation that would extend liability for illegal file-sharing beyond individuals and renegade software-makers to firms with a less direct role in downloading, such as Internet service providers (ISPs) and computer hardware manufacturers. Wharton faculty and technology companies, however, argue that such a move would stifle innovation and investment in technology. The proposed legislation, which probably won't be acted on by this year's Congress but is likely to reappear next year, "goes against a lot of court decisions and common sense," says one Wharton professor.

Satellite Radio: Wave of the Future or Niche Play?

Wed, 03 Nov 2004 16:54:05 EST

Two major deals involving satellite radio have been announced this month. In early October, Sirius Satellite Radio said it had signed a $500 million contract with controversial disk jockey Howard Stern, moving his show to its network for five years. On Oct. 20, XM Satellite Radio confirmed it had struck an 11-year, $650 million agreement enabling it to broadcast all Major League Baseball games starting from the 2005 season. Is satellite radio going mainstream at last? Experts at Wharton and elsewhere say there's little doubt that satellite radio will eventually become big business. The question, though, is when.

Combat in High C: Microsoft vs. Apple

Wed, 20 Oct 2004 15:04:06 EST

Last week Microsoft unveiled the new version of its Windows Media Player, firing the opening shots in a long-anticipated battle against Apple Computer for supremacy in the online music business. Both companies are targeting the fast-growing market, whose sales are expected to be $270 million this year but could grow to $1.7 billion by 2009. Experts at Wharton and elsewhere say that for now, Apple, whose iTunes music service commands a 70% market share, has an impressive lead. Over time, however, two strategic issues make Apple vulnerable to being dislodged by Microsoft or other rivals.

Lessons from Google's IPO

Wed, 20 Oct 2004 15:04:30 EST

Google's initial public offering, on the surface, seems to be a success. The company did raise $1.67 billion by going public at $85 a share, and the stock went up 15% on the first day of trading. Experts at Wharton and elsewhere say, however, that it's too early to issue a verdict. They add that Google's IPOs offers useful lessons to company executives and investors alike.

Why Capital Spending -- and Corporate Confidence -- Are Low

Wed, 25 Aug 2004 14:35:51 EST

Technology buyers hit the brakes toward the end of the second quarter 2004 and it’s worth asking whether spending on software and hardware – not to mention capital spending overall – is being hampered by gun-shy corporate executives. Experts at Wharton say the June lull that resulted in a slew of technology profit warnings is probably a soft patch, but they are reserving judgment for now. Yet given that capital spending from corporations has largely been absent during a consumer-fueled economic rebound, one wonders whether executives are becoming unnecessarily risk averse.

Creating the Buzz Behind Bill's Blockbuster

Wed, 14 Jul 2004 17:18:02 EST

He’s been called Elvis, Bubba, the Comeback Kid and Slick Willie. Now Bill Clinton can add another moniker to that list: Laydown King. In the world of publishing, the laydown date is a book’s official release day, the focal point upon which a publisher brings to bear all the marketing prowess it can muster in order to generate a blockbuster. Yet according to Wharton faculty and others, executives at Knopf Publishing Group, which paid the former president a reported $10 million advance to produce My Life, did nothing special and broke no new ground in launching their marketing blitz. Rather, their success has come from making the most of tried and true marketing tactics – and Bill’s celebrity.

Dot-Com IPOs: They're Baaaaack

Wed, 14 Jul 2004 15:04:46 EST

In a seeming replay of the dot-com boom scenarios of the late 1990s, Salesforce.com saw a first-day increase of 56% in its stock price when the software company went public last week. What does this mean for other technology and Internet companies, some of which are waiting to go public? Experts at Wharton and elsewhere say that rather than signaling the beginning of another technology bubble, the ability of firms like Salesforce.com and Google to raise capital may be a sign of a healthier stock market. Tech companies that are tapping Wall Street now differ from the 1990s dot-coms in another key aspect: They are profitable.

SAP, Microsoft and the Coming Consolidation in Software

Wed, 14 Jul 2004 17:19:54 EST

Even the most jaded journalists ‑ who scorn press releases ‑ knew there was a hot story in the separate handouts issued June 7 by Microsoft and SAP. Microsoft, the world’s largest maker of software for personal computers, last year had approached Germany’s SAP, a leading enterprise software company, about a potential merger, but the preliminary talks were discontinued this spring, said the dry-as-dust announcements. The news sparked a buzz throughout the technology world, and for good reason. Wharton faculty members and other academics say that it was as good an indication as any that the software industry is ripe for consolidation. They differ, however, on whether SAP needs to link up with a major partner in order to thrive. And some suggest that a SAP-Microsoft merger may not be a dead issue.

The Buzz on Google's IPO

Wed, 19 May 2004 14:34:20 EST

By any measure, there is much to admire about Google - its business model, its laser-like customer-focus, its ability to generate revenues and profit. And yet, with the company’s recently announced plans to go public, Google-watchers also see some formidable obstacles ahead, such as increased competitive challenges from Microsoft, Yahoo! and others. Even the act of going public, observers say, is not without possible drawbacks: a relinquishment of some managerial control, for example, and the need to devise ways to generate more revenue without alienating legions of loyal users. In short, the hottest show in Silicon Valley is ready to roll, and its long-term future is anybody’s guess.

Need a Job? How about a Date? Networking Services Want to Help

Wed, 19 May 2004 13:59:30 EST

Networking services – Internet companies that let users share personal profiles as a way to make social and professional contacts – are the hot e-businesses of the moment. Close to two dozen of these online communities are furiously recruiting members who, in turn, recruit their friends, relatives, co-workers and just about anyone seeking an introduction to, or reference from, someone who might matter. But it’s still too early to measure how successful these sites are at matchmaking – or making money.

Getting Close to the Customer: Quantitative vs. Qualitative Approaches

Wed, 05 May 2004 13:10:03 EST

After adapting information technology to develop ever more sophisticated research methods, marketers are taking a second look at more human, qualitative approaches to tapping into the hearts and minds of consumers. As one Wharton marketing professor says: “We can put each customer’s order on a microchip, but as far as having a sense of what’s inside making him tick,” the answers remain elusive. He and others suggest that companies use both quantitative methods – such as data mining – and qualitative methods, ranging from “concept banks” to “brand communities” to customer advisory boards, always keeping in mind the cost-effectiveness of these varied approaches.

State-of-the Art in Direct Mail: Getting Ever Closer to the Customer

Wed, 24 Mar 2004 16:24:15 EST

After adapting to the Internet and now facing a backlash against spam, direct marketers and traditional retailers are fine-tuning their advertising mix, searching for new strategies and technologies to build customer relationships. Wharton marketing experts and others look at what works, and what doesn’t, in the competitive race for more sophisticated and demanding consumers.

Comcast vs. Disney: Facts and Fantasia

Wed, 10 Mar 2004 16:03:37 EST

For Brian Roberts, CEO of cable giant Comcast, the problem may boil down to this: What do you do with the Magic Kingdom? Two weeks ago, Roberts made a $49 billion bid for the embattled Walt Disney Co. Disney's board rejected the offer, but no one expects Roberts' effort to end there. Chances are, he will bid again. Whether he should is another matter. Will buying Disney give Comcast much-needed leverage as it negotiates with competitors such as Rupert Murdoch's News Corp.?

Which Online Music Service Will Have the Longest Playing Time?

Wed, 14 Jan 2004 13:38:57 EST

Since May 2003, when Apple’s online music service, iTunes, opened its digital doors, the drums announcing other online music services – new enterprises as well as existing music services spruced up and recharged – have been beating steadily. Indications are strong that profits can be made in online music. But profits for whom? Some experts are already betting that the ranks of the online music vendors will thin out because technology, consumer preferences and costs will eventually create a dominant business model. It’s just not clear yet what that model will be.

What Is Google Worth?

Wed, 03 Dec 2003 14:56:54 EST

The prospect of uber-search engine firm Google Inc.'s considering an initial public offering seems to have Wall Street salivating. But how sound is Google's business model in the face of partners-turned-possible-competitors? Can Google emerge as a viable company with sustainable long-term revenues? Experts at Wharton weigh in on whether Google's strengths -- its technology and brand -- can offset economic and financial risks.

CEOs Are Ridiculed for Huge Salaries: Why Aren't Athletes and Entertainers?

Wed, 19 Nov 2003 14:50:39 EST

Actors, athletes and executives are among the most populous inhabitants of the rarified atmosphere of multimillion dollar incomes. Why is it, then, that corporate executives are coming under fire for excessive pay when athletes like Michael Jordan and entertainers like Oprah Winfrey seem to stir no such feelings of resentment? Part of the answer, suggest Wharton faculty and others, is that people see – and get – a direct benefit from what athletes and entertainers provide.

Mobile Telephones: Can Nokia Keep Ringing Up Sales?

Wed, 05 Nov 2003 13:40:57 EST

Nokia, the innovative Finnish company, dominates the mobile phone market with more than $30 billion in annual sales. But growth is slowing, and with the announcement of the new Microsoft-Vodafone alliance, the competitive landscape is changing. Will Nokia's bet on innovative products such as N-Gage -- a phone that bundles music, video and interactive gaming -- help it retain its lead? Experts at Wharton and elsewhere say the company has great strengths but also faces huge challenges.

Selling Content on the Internet: It's Happening, But Is It Profitable?

Wed, 05 Nov 2003 13:40:57 EST

If you look at the latest report from the Online Publishers Association covering online paid content, you might well think that online information is a hot commodity. Surfing around the reaches of the Internet, consumers spent $748 million for content during the first and second quarters of 2003, a jump of 23% over the same six months in 2002, the OPA says. But what do people mean by ‘paid content’ and who is actually making money offering it? Critics question some of the figures used by those who claim to be benefiting from consumers’ alleged willingness to pay for what was once free.

It's Showtime: Will the GE-Vivendi Deal Please the Critics?

Wed, 10 Sep 2003 00:00:00 EST

Vivendi Universal's agreement to sell its Hollywood assets to General Electric�s NBC entertainment division would further consolidate the global market, creating a sixth major media conglomerate with the creative horsepower of Seabiscuit and the reach of Friends. The pending deal has so far received some favorable reviews although not everyone is a fan. One question: How will GE�s nuts-and-bolts management style mesh with a hip Hollywood culture where predictability is rarely part of the program?

Which Customers Are Worth Keeping and Which Ones Aren't? Managerial Uses of CLV

Wed, 30 Jul 2003 00:00:00 EST

Managers have long been interested in weeding out customers that they consider to be less profitable than others. The question is, how do managers determine who belongs in that group? According to several Wharton marketing professors, there is no easy answer, despite new and increasingly sophisticated efforts to measure what is called �Customer Lifetime Value� (CLV) � the present value of the likely future income stream generated by an individual purchaser. CLV, it turns out, is hard to calculate and harder to use.

Online Music Wings its Way to the Celestial Jukebox

Wed, 02 Jul 2003 00:00:00 EST

Music companies want college students and other Internet users to pay to download music instead of swapping it for free. But that is hardly easy, for a simple reason: If music is available for nothing, why pay? The music industry has tried various options to limit piracy, with mixed success. Experts at Wharton and elsewhere say that new models are now emerging that could help reconcile the industry's interests with those of listeners.

Ways to Slam Spam

Wed, 02 Jul 2003 00:00:00 EST

Bill Gates calls it a plague and his company is suing to stop it. Ferris Research says it collectively costs businesses $10 billion a year. Wharton legal studies professor Dan Hunter labels it a cancer on the Internet. Whatever you call spam, it�s everywhere and it�s spreading fast. Estimates of the amount of spam � a colloquial term for unsolicited commercial e-mail � vary but they range from 50% to 80% of all messages zipping across the Internet. The question is, what should be done to stop it?

What's Behind Oracle's Unwelcome Bid for PeopleSoft?

Tue, 17 Jun 2003 00:00:00 EST

Oracle�s Larry Ellison, a chief executive not known for being timid, has thrown a big boulder into a small pond with his company�s hostile takeover bid for PeopleSoft. The ripples will be rocking companies in the business software industry for some time to come. What are the reasons for Ellison�s move, what does he expect to accomplish and how likely is it that his strategy will fail? Wharton faculty look at the players in this clubby, and highly competitive, industry.

Newer Web Companies Aim to Change Consumer Buying Habits

Wed, 07 May 2003 00:00:00 EST

While conventional wisdom suggests that the Internet these days creates pain, not profits, for investors, there are still a few successful, or at least promising, companies that have recently been hatched on the web. Executives from three such ventures spoke at a May 1 conference titled, �Catching Our Breath: Reorienting Strategy during the Internet�s Quiet Time,� sponsored by the Reginald H. Jones Center and the Wharton eBusiness Initiative.

Is It time to Give Up on AOL Time Warner?

Wed, 26 Feb 2003 00:00:00 EST

When America Online bought Time Warner for $103.5 billion in January 2001, the plan was to meld new-economy Internet prowess with old-economy content and cutting-edge broadband delivery. The scheme�s designers boasted they would create the world�s largest corporation. Now, just over two years later, AOL Time Warner is a shambles. Was this just bad luck? Was the merger ill-conceived to begin with? And will the company now resort to selling off major assets in an attempt to reduce its enormous debt?

Can Holiday Shoppers Save the Economy?

Tue, 03 Dec 2002 00:00:00 EST

November's Black Friday ritual � which begins with shoppers lining up outside shopping malls at dawn and ends with left-over merchandise strewn up and down store aisles � has become an integral part of the Thanksgiving weekend. This year the stakes for retailers are higher than usual. Can consumers, who are credited with keeping the economy afloat during a nearly two-year stock market slump, spend enough this holiday season to tip retailers� books from red ink to black? Or will too many discounts, sales and specials drain off much-needed retail profits?

Peer-to-Peer Music Trading: Good Publicity or Bad Precedent?

Wed, 09 Oct 2002 00:00:00 EST

If advance publicity is key to a record album�s success, then shouldn�t peer-to-peer music networks boost sales through creating buzz? Isn�t music downloading an effective �form of advertising?� asks Wharton marketing professor Pete Fader. No, say record companies and others who contend that cheap MP3 knockoffs of popular songs lead to lower CD purchases.

In E-mail Marketing, Consumers Weed Out the Weakest Links

Wed, 31 Jul 2002 00:00:00 EST

It�s time for e-mail marketers to shape up. At least that seems to be the message suggested by a new round of research measuring click-through rates. E-mail lists, which once looked like a cheap silver bullet for marketers and publishers, are proving to be less effective than once thought. But that doesn�t mean the strategy should be abandoned.

The Mega-media Business Model: Doomed to Fail, or Just Ahead of its Time?

Wed, 31 Jul 2002 00:00:00 EST

With its drastically lower stock price and an SEC investigation into its accounting practices, AOL Time Warner appears to be the latest poster child of America's mega-corporate meltdown. What happened to the once-talked-of synergies between �old media� and �new media� and between content and delivery that these mergers once trumpeted? Is the mega-media concept flawed, poorly-executed, or just not quite ready for prime time?

Sony vs. Sony

Wed, 05 Jun 2002 00:00:00 EST

As the recording and electronics industries face off over digital music, one company has had the uniquely uncomfortable position of standing on both sides of the issue: Sony. The only company to own a major music label, a major computer manufacturer and a major consumer electronics business, Sony has been insulted by its own trade associations and has even sued a company that Sony itself had invested in. Wharton professors and others suggest a new business model to help Sony out.

Napster�s New Boss � and Uncertain Future

Wed, 22 May 2002 00:00:00 EST

German media giant Bertelsmann has given Napster a chance for an encore by agreeing to acquire its assets. But two Wharton researchers say it may not matter much because the Napster brand name has been damaged and the company may be yesterday�s news.

Tom Siebel on CRM, ERM and Homeland Security

Wed, 22 May 2002 00:00:00 EST

Tom Siebel, founder and CEO of Siebel Systems, is known for focusing on Customer Relationship Management products � a field that continues to have its skeptics � but recently the company has made a leap into the lucrative area of employee relationship management. Siebel talked about both, answered criticism for suggesting that his software can sniff out terrorist plots, and shared some insights into leadership during a meeting last month with participants in the Wharton Fellows Program.

The Failure of Customization: Or Why People Don�t Buy Jeans Online

Wed, 27 Mar 2002 00:00:00 EST

Ever since the Internet emerged as a sales channel in the 1990s, it has been thought that one of the chief advantages of e-commerce would be its ability to facilitate the customization of goods and services for consumers. That promise, however, is not yet close to being realized, according to experts at Wharton and an e-commerce research firm.

Kmart�s 20-Year Identity Crisis

Wed, 30 Jan 2002 00:00:00 EST

Kmart shoppers may have been surprised at the decision by the 40-year-old discount chain to file for bankruptcy-court protection on January 22. But the company�s decline was anything but sudden and its future is anything but certain, say three members of Wharton�s marketing department. They point to a long history of poor marketing decisions and an ill-advised acquisitions strategy.

So Far, the AOL Time Warner Merger Gets Mixed Reviews

Wed, 30 Jan 2002 00:00:00 EST

It�s already shaping up to be quite a year for AOL Time Warner. Last week, Netscape, the Web browsing company now owned by AOL Time Warner, filed suit against Microsoft claiming antitrust violations. Meanwhile the media giant has a new CEO, scaled back its anticipated revenue growth for 2002 and is still trying to reap the benefits predicted from its high profile merger.

No Crystal Ball � or Historical Precedent � Can Help Predict Consumer Confidence

Wed, 26 Sep 2001 00:00:00 EST

How the events of September 11 will affect consumer spending and saving is anyone�s guess, although in the short-term at least, the arrows seem to be pointing down. Whether consumers regain their confidence depends on a number of factors, say Wharton faculty and industry representatives. A stable stock market, a return to routine and a restored sense of security could all help generate a rebound.

Dotcom Bomb Hits the Publications That Covered It

Wed, 29 Aug 2001 00:00:00 EST

The Industry Standard, a respected chronicler of the New Economy, shut down earlier this month following a serious decline in technology advertising. Other Internet-oriented publications are facing similar difficulties. Their problems, note some industry observers and Wharton faculty, shouldn�t come as any surprise. The tell-tale signs of trouble were there all along.

Can Priceline Remain Profitable?

Wed, 15 Aug 2001 00:00:00 EST

Priceline, the online travel company, once seemed to be headed for disaster like dot-coms such as Webvan and eToys. Instead, two weeks ago the company announced that it had made a small profit in the second quarter. Was this a flash in the pan? Will Priceline be able to keep up this performance? Experts at Wharton say the company is doing some things right, but it still faces massive challenges and growth will be hard to sustain.

How Companies Sponsor, Listen in and Learn From Chat Rooms

Wed, 01 Aug 2001 00:00:00 EST

When Chrysler wanted to promote interest in its new stylized PT Cruiser, the company set up chat rooms and discussion boards on its own corporate website where customers could share information about the product and create that all important buzz. Yes, there are downsides to corporate chat rooms/discussion boards, but for certain companies the benefits can be substantial.

Making Customer Relationship Management Work

Wed, 04 Jul 2001 00:00:00 EST

Customer relationship management, or CRM, is the buzzword du jour in business circles. To hear some proponents talk about it, all a company needs to do is buy and install a sophisticated CRM software package to maximize its returns from customers. Wharton faculty members point out, however, that making CRM work involves doing a lot more.

Clicking With Customers: New Challenges in Online Conversion

Wed, 23 May 2001 00:00:00 EST

Imagine a new restaurant that has customers lined around the block to get in. But after they sit down and read the menu, 19 in 20 walk out without ordering even an appetizer. No traditional business could survive such a disaster � but on the Internet, this happens all the time. Shoppers browse through websites and leave without buying anything. As websites run by both dot-coms and established companies struggle towards self-sufficiency, converting casual browsers into committed buyers represents a significant challenge. A workshop at Wharton on May 30 will explore the issues involved.

Why Disney and AT&T Went Astray in Dot-comland

Wed, 09 May 2001 00:00:00 EST

Pure-play Internet companies aren�t the only ones to have lost millions as a result of the bursting of the dot-com bubble. Ambitious Fortune 500 companies, which once saw the web as a short cut to nirvana, have also suffered major setbacks. Knowledge@Wharton explores two such efforts by large companies to establish Internet portals � Disney�s initiative with Go.com, and AT&T�s attempt to forge ahead with Excite@Home. One warning for those who enter these waters: Watch your assumptions.

Are There Lessons to Be Learned from Internet Porn Sites?

Wed, 09 May 2001 00:00:00 EST

Given that pornographic sites have long been considered one of the few moneymakers on the Internet, it was easy to understand why Yahoo recently tried to improve access to its adult offerings. The move backfired, but it did raise questions about the pervasiveness of adult material on the web and its relationship to more mainstream sites.

Can You Learn Anything From These Sites' XXXpertise?

Wed, 25 Apr 2001 00:00:00 EST

Is Your Website Working Well for You? Check its e-Performance

Wed, 28 Mar 2001 00:00:00 EST

The dot-com epidemic has abated. Companies no longer have millions of VC-funded dollars to throw at attracting eyeballs. At such times, it is more important than ever to ensure that a company�s website works efficiently to convert casual web browsers into buyers and then into repeat customers. Knowledge@Wharton spoke recently to executives at McKinsey, the consulting firm, which has studied these questions and uncovered valuable insights.

Webvan Finds that Shopping for Food Online Hasn�t Clicked with Consumers

Mon, 19 Mar 2001 14:05:38 EST

Given the dismal record of American companies that offer online grocery shopping, it should come as no surprise that the last big player, Webvan Group Inc., is on the ropes as well. Is this a business that simply cannot work, or did Webvan just do it wrong? Wharton faculty offer some opinions.

U.S. Economic Outlook: Unclear, but Keep Lowering Those Interest Rates

Wed, 31 Jan 2001 16:24:30 EST

The U.S. Federal Reserve lowered the federal funds target rate on January 3. Stocks surged. Then they plunged. Then they rose a little. A further rate reduction may come on Jan 30. Or it may not. Are we most worried about consumer confidence, corporate spending, the stock market, the technology sector, the telecom sector, the spread on high-yield bonds, or all of the above? Wharton professors offer some thoughts.

Can Yahoo Remain a Winner?

Wed, 17 Jan 2001 15:20:26 EST

Yahoo has long been one of the Internet�s best-known success stories. It is among the most heavily visited sites on the web, and it has been in the black for 16 quarters. But all is not perfect. Yahoo�s stock has tumbled to below $30 from a peak of $250, and some observers worry that a slowing economy and vanishing advertisers as a result of the carnage in dot-com land could hurt its prospects. Will Yahoo�s future be as bright as its past?

The Problem with Priceline

Mon, 16 Oct 2000 07:58:08 EST

Priceline may be one of the best-known shopping sites on the Internet, but with its stock price dropping sharply on Sept. 27 and profits still non-existent, some are beginning to wonder about the company�s viability. Knowledge@Wharton takes a look at Priceline�s strategy, market appeal, competitors and customer base.

Online Conversion Behavior: The New Frontier of Internet Marketing

Mon, 16 Oct 2000 07:57:28 EST

Despite a tough year for online retailers, many observers still believe that online sites are an economically efficient medium because of their ability to draw millions of customers to browse through thousands of products. But just how and when do online visitors become online purchasers? The question has taken on new urgency with just about everyone, from corporate managers in department store chains to hotshot web-site developers. A new Wharton research paper entitled, �Which Visits Lead to Purchases?: Dynamic Conversion Behavior at E-Commerce Sites,� analyzes conversion rates based on visit and purchase data at Amazon.com and offers a conversion model to better understand the buying process.

Can Amazon Survive?

Wed, 30 Aug 2000 13:27:32 EST

Amazon.com is arguably the biggest name in online shopping, the gold standard against which all dotcoms are judged. Is it really possible, then, that someday we will be forced to live in a virtual world without this mammoth bookseller? Certainly, it�s too soon to write a eulogy. But on the savage frontier of Internet commerce, even the biggest and toughest � though they may have been the first to stake the choicest claim � are not assured survival. Knowledge@Wharton discussed the company's future with Wharton faculty members and industry experts.

The Beat Goes On at CDNow as Most Investors Take a Beating

Wed, 16 Aug 2000 12:10:25 EST

The CD Now home page, with its picture of Ella Fitzgerald and hotlinks to a Stone Temple Pilots interview, looks like the hottest thing in online shopping. But the online music retailer�s bright website belies the troubles at the company behind it. Last month CDNow announced it was selling itself to Bertelsmann, the giant German media company, for about $141 million in cash and assumed debt, in a deal expected to close this fall. The sale came after the Ft. Washington, Pa., company had tallied losses of $212 million since 1994. While IPO investors who gobbled up shares at $16 will lose heavily�Bertelsmann is paying just $3 a share�and 400 employees are stuck with worthless stock options, the founders, twin brothers Jason and Matthew Olim, will get $17 million from the sale. What went wrong at CD Now? Pete Fader, a Wharton marketing professor, helps answer that question.

Hit and Miss: Why High Traffic Streams Need not Lead to More Online Business

Wed, 19 Jul 2000 14:03:06 EST

If your web store is getting zillions of hits a month, business must be skyrocketing, right? Not necessarily. Many online retailers monitor visitor traffic as a measure of their stores� success. But two Wharton researchers explain why high traffic streams to a website need not necessarily mean an increase in business, in a study that they assert is one of the first in-depth analyses of online visiting behavior using Internet clickstream data. In their paper �Capturing Evolving Visit Behavior in Clickstream Data,� Peter Fader, a professor of marketing, and Ph.D. student Wendy Moe point out that commonly used measures of web store success�such as number of hits, page views, and average time spent at a site�provide only generalized information about customers.

Looney Times at Time Warner and Disney

Wed, 24 May 2000 14:45:31 EST

The recent clash between Time Warner�s cable division and Disney�s television networks made a lot of viewers very unhappy when they couldn�t watch ABC�s �Who Wants to Be a Millionaire?� and other network programming. Although the two mega-businesses made temporary peace the next day, the questions remain: Could this happen again? What caused it? Are these media powerhouses � and the egos that run them - simply too big? Knowledge@Wharton asked three Wharton professors--Gerald Faulhaber, Peter Fader and Harbir Singh--to preview the next installment of Bugs Bunny vs. Mickey Mouse.

A Matter of Metrics: Using Web Data to Improve Sales Performance

Wed, 29 Mar 2000 15:05:25 EST

Internet-based retailers often spend millions of dollars on advertising, but how well do they use website log data to track their own performance in turning random browsers into buyers? And buyers into repeat buyers? And repeat buyers into big spenders? Not well at all, claims Peter Fader of Wharton�s marketing department. As disturbing signs emerge that online purchasing may be starting to stall, Internet-based merchants must do a better job of establishing performance benchmarks and basing marketing strategies on real numbers. They can learn lots of lessons, says Fader, from the humble grocery store.

Christmas E-tailers: Will It Be Ho-Ho or So-So?

Fri, 10 Dec 1999 09:12:52 EST

If you build it, they will come. That may be true for baseball fans, but what about for holiday shoppers? For many e-tailers who have spent millions building and advertising their web sites, it�s a make-or-break month. And for consumers, it will either be an exercise in frustration, or a very merry way to shop �til they drop.

Making CD Sales Sing

Wed, 10 Nov 1999 13:08:02 EST

Nine out of 10 new CDs don�t pay back their production costs. It�s a failure rate that Wharton marketing professor Peter Fader and doctoral student Wendy Moe address in a new paper demonstrating how the pooled information available from a set of existing CDs can be used to make early and accurate predictions about the sales of a new album.