Archive for August 17, 2011

AT&T planning to keep unlimited messaging plan and axe others

Tipped off by an anonymous tipster, Engadget brings word that ATT is planning to axe its Messaging 1000 plan for individual users and leave behind just the unlimited plan, in a bid to simplify its offerings. The new plans are supposed to go into effect starting on August 21, 2011.

Come Sunday, Ma Bell intends to offer just the current Messaging Unlimited plan, where you get unlimited texting for $20 per month, and the pay-as-you-go plans, where you shell out 20¢ for every text message you send and 30¢ for every MMS. The $30 Family Messaging Unlimited plan, in all its unlimited texting glory, will also remain intact.

According to the accompanying screenshot in the Engadget article, the company believes that “the vast majority of our messaging customers prefer” the unlimited plan. For those of you who take an exception to that statement, however, it does intend to grandfather in those users who are currently on the Messaging 1000 plan.

For our sensor heavy future, IBM cooks up a new silicon brain

Far right is the new chip on a board.

What you are about to read is not science fiction. IBM, the 100-year-old company that started out making old-fashioned cash registers and “business tabulating machines” has come up with a new chip that marries our brain’s architecture with silicon guts. Like people, it learns instead of being programmed and like a good semiconductor, it’s easy to make based on today’s chip production technologies. While it might have started out as a research project seeking to develop chips that deliver mor oomph while being stingy about power consumption, today it is a radical idea that takes computing to more places and in doing so potentially unleashes new waves of innovation.

A soup-to-nuts approach.

That’s the hope anyway, although IBM isn’t alone in its efforts to rethink the way computers are built. HP has a different initiative aimed at creating chips that can process more data more power efficiently by changing the basic building blocks inside the chip. Other companies and labs are eyeing quantum computing and other far-fetched ideas (GigaOM Pro sub req’d). But IBM being IBM has both the money and the vision to bring an entirely new way of computing forward — in fact it has been laying the groundwork for years.

Remember these commercials where IBM can tell someone in corporate HQ where a single item is on a truck out in the middle of nowhere? These commercials are from 2005, and ever since IBM has been building the infrastructure in terms of its services business, its software and even with hardware designed to process massive amounts of information on the fly. Watson, the Jeopardy-playing computer is a wonderful example of how far IBM was willing to take the hardware. But most people there knew the hardware was never going to get to the place where IBM’s customers could not only locate one of thousands of trucks to tell it that it was lost, but to the point where the customers could measure everything about that truck from its speed to the temperature inside the containers it held and than send alerts based on those variables. And the system could do all this while consuming a kilowatt of power and in a box the size of a shoebox.

Using brainpower to solve architecture problems.

A cognitive computer playing Pong.

That’s where this new silicon comes in. IBM calls them neurosynaptic chips, and it’s architected in a completely different way than current semiconductors. Instead of creating silicon that has a processing core, a bus and a memory cache, IBM has taken a page from the human brain. The integrated memory is represented by synapses, computation by neurons and communication by axons. The current version is far less impressive than the human brain which has billion of neurons — this chip has 256. But the breakthrough here is not just about the new architecture but what that architecture means and where it fits in with the future of computing.

Today’s chips run into a problem called the Von Neumann bottleneck, which is when the chip cannot feed the data in the memory to the processing core fast enough. Without the data the chip idles and the incredible clock speeds we’ve built into chips are somewhat wasted. The neurosynaptic chip throws that model away and relies instead on tracking relationships between events and determining if those events lead to action. When the “neurons” on the chip fire, it sets of a binary response that the processors in each neuron evaluate. When enough feedback comes from that neuron or neurons nearby the system then “understands” where that information fits in, and the chip can make a decision to react to that series of stimuli. Fundamentally, this chip learns.

Dharmendra Modha, project leader for IBM Research, explains that most programmers write code that delivers a lot of instructions to the processor followed by a few if/then statements that describe actions. The neurosynaptic chip doesn’t need those if/then statements because it’s making those correlations itself based on how often it’s “neurons” fire off ones or zeros. This means that IBM’s new chip requires a completely different type of programming (and that it’s suited to completely different types of jobs than today’s chips).

Cognitive Computing and why it matters.

IBM calls this new computing cognitive computing and the goal is to take today’s itty-bitty neurosynaptic chip, which can today play Pong or steer a toy race car around a track, and create a machine that can combine the equivalent of 10 billion neurons all in the size of a shoebox that consumes less than a kilowatt of power. Such a machine would be cable of doing much more, although perhaps one would need multiple machines to create Modha’s vision of a sensor network in every ocean tracking ambient temperature, water turbidity and other metrics to warn folks of an upcoming storm or tsunami. Today’s chip in addition to playing Pong, might be useful if attached to a door where it could “learn when to open the door to let the cat out,” suggested Modha.

“The goal is not to replace today’s computers. It’s to really take the road less traveled and build new generation of computers with a totally new approach to problems in business and science and government,” Modha says. “If today’s computers are left brained, rational and sequential then cognitive computing is intuitive and right-brained and slow, but the two together can become the future of our civilization’s computing stack.”

That’s a big vision, but IBM’s a big company and one that has managed to influence the course of computing before. For more on the science check out the video I shot last year with Modha in his newly built lab at IBM’s Alamaden Research Lab in California.

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Ask.com gets smarter with help from Lonely Planet, others

Exclusive: Ask.com is amping up its star power. The QA search engine — which provides a mix of user-generated and algorithmically sourced content — has added several heavyweight partnerships to make sure it answers users’ questions in the best way possible.

Ask has inked new partnerships with Lonely Planet, Sports Network, Weather Underground, Lyrics.com and others to power its new “Smart Answers” initiative. In an interview Wednesday, Ask’s director of partnerships Dave Amato told me the Smart Answers feature is aimed at providing a highly relevant and useful answer from a source with “high integrity.” Ask has 25 Smart Answer partners up and live right now, and plans to add at least three or four new partners every few months going forward.

The company has found that these types of answers are exactly what their users want — a blend of personality and accuracy. “We’re the only QA service that combines search with answers from real people,” Amato said. “We know for a fact that users love Smart Answers because they tell us.” Another big focus for Smart Answers is its usefulness for Ask’s mobile site. “When you’re on mobile, that is definitely when you don’t want to wade through blue links.”

Ask has been especially choosy about the partners it has picked for the Smart Answers initiative. “We get approached all the time from content providers and brands who want to be an answer provider, and when we find out what they really want is an ad, we turn down those immediately,” Amato said.

In all, Ask seems to be firing at all cylinders to fend off competition from hot new QA sites such as Quora. Adding new big-name friends to answer users’ commonly asked questions — such as how many calories are in a bagel — this seems like a smart move indeed.

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Accel Leads $10.5M Round In Cosmetics Discovery Platform Birchbox

birch

Birchbox, a startup that serves as a makeup discovery retail platform, has raised $10.5 million in Series A round of funding, led by Accel Partners with First Round Capital, Harrison Metal, Forerunner Ventures, Lerer Ventures, Sam Lessin, Consigliere, Gary Vaynerchuck, Dave Morin, Stanford University Endowment and Andy Dunn participating in the round.

Similar to Foodzie, Blissmobox, BeachMint and Babbaco; Birchbox has adopted a subscription, box of the month model where members receive curated makeup and beauty products. Each month, users receive at least four premium samples of cosmetics, shipped to their homes from over 80 high end beauty retailers like Kiehl’s, Laura Mercier, Smashbox, Nars and Cargo.

The website supplements these monthly packages by providing pertinent tips and tutorials on its website for the featured samples. If a user wants to purchase the full-size version, they can buy it on Birchbox, which will earn them points for future discounts (inviting new members will also help you rack up points). The idea is help consumers discover new brands and products at an affordable price, while also driving sales.

One of the unique aspects of Birchbox is that it offers a personalized suite of products each month that are customized to users’ preferences and profiles. Each users fills out a beauty survey, and creates a profile, which is then used to curate picks for each individual customer.

Birchbox, which was founded by Harvard Business School grads Hayley Barna and Katia Beauchamp, launched nearly a year ago and already has a subscriber base of 45,000 customers (all of whom are paying up to $10 per month for a box or $110 for a year). Subscribers are up 50 percent month-over-month and

Accel partner Theresia Gouw Ranzetta says of the startup, “The team has forged partnerships with some of the world’s leading cosmetic brands to give consumers a fun, monthly beauty sampling experience. We believe Birchbox has many opportunities for continued growth, and we look forward to aiding their success.”

Beauchamp tells us that the site aims to be a mix of both niche and more well-known products. In the end, she explains that Birchbox is trying to make the cosmetics shopping process easier for women and help brands get products in the hands of consumers.

Beauchamp says the new funding will be used for further product development and for hiring. And the company is considering expanding to other verticals.

While many retailers seemed to have jumped on the ‘box of the month’ bandwagon, the cosmetics industry is especially suited for the sampling experience. Many women (including myself) want to try beauty products (regardless of the price), whether it be makeup, shampoo, lotions, or face cream; first before investing in them. Birchbox not only accomplishes this, but also helps women discover new products and adds an editorial element.



BirchBox is a monthly subscription service that delivers beauty product samples to users on a monthly basis. The site offers relevant editorial content and a e-commerce site.

Learn more

Don’t Mean To Be Alarmist, But Groupon Is Running Low On Cash

Andrew Mason

We owe $304 million more than we have…but don’t tell anyone, okay?

See Also:

BOMBSHELL: Groupon's North American Merchant Pool DECLINED In Q2

chart of the day groupon revenue per merchant

andrew mason groupon


One of the fastest-growing companies in the history of the world, Groupon, is now running seriously low on cash.

The company is not broke, by any means. It can also presumably raise additional capital in the private markets if its IPO gets further delayed.

But Groupon’s cash cushion relative to its liabilities is small–and the gap between the two is going the wrong way fast.

As of last quarter, Groupon was still cash-flow positive. If it remains that way until after the IPO, the cash situation won’t become critical. If the company stumbles, however, or the economy suddenly turns south, Groupon could get into serious trouble in a hurry.

Here are the details…

On the surface, things look great: As of June 30, Groupon had $225 million of cash. Despite losing $103 million in Q2, moreover, the company actually generated about $25 million of free cash flow in the quarter. So a cash crisis would seem to be the last thing the company needs to worry about.

But the devil–and danger–is in the details.

Groupon is able to generate cash while losing money because it collects cash from Groupons the moment it sells them and doesn’t have to pay some of the cash to merchants until 60 days later. When the company is growing rapidly, it generates a lot more cash from new Groupon sales than it has to pay out to redeem old Groupons. Right now, Groupon is growing so quickly that this “float” creates positive cash flow even though the company is losing money.

The trouble is that the cash Groupon generates from the Groupon sales is not all Groupon’s to keep. It owes a big chunk of that cash to the merchants it sells Groupons for. And at the end of Q2, Groupon owed a lot more cash to merchants than it had on hand.

Specifically, as of June 30, Groupon owed $392 million to merchants for old Groupons–way more than the $225 million of cash the company had on hand.

And merchant bills aren’t the only bills Groupon has to pay.

As of June 30, Groupon had $680 million in current liabilities–bills the company has to pay. Meanwhile, Groupon only had $376 million of current assets with which to pay them (composed mainly of cash and receivables).

Another way of looking at this is that, if Groupon had been liquidated as of June 30, the company would have had a net of $304 million of bills that it would have been unable to pay.

The technical accounting term for this is a “working capital deficit” or “negative working capital.” A company has a working capital deficit when it owes more in near-term bills than it has cash available to pay. Companies can operate with a working capital deficit as long as they have another source of cash to cover the bills as they come due.

Right now, Groupon has this source of cash: rapidly growing Groupon sales. As long as Groupon sells enough new Groupons in one quarter to pay all the bills it racked up in the prior quarter, it will not need additional cash.

But if the company’s growth stumbles, or if competitive pressure leads to Groupon’s gross profit margin getting squeezed, look out.  Under those scenarios, the company may not be able to sell enough new Groupons to pay off its old bills, and then it will face a serious cash crunch.

Meanwhile, the longer Groupon goes without raising additional capital, the more its working capital deficit will increase–even if its growth doesn’t slow.

In the past three quarters, for example, Groupon’s working capital deficit has grown rapidly, as follows:

Q4 2010: -$197 million
Q1 2011: -$229 million
Q2: 2011: -$304 million

The simplest way to think about this working capital deficit is as a short-term loan. In Groupon’s case, the loan is being extended mainly by Groupon’s merchant partners.  (Importantly, the amount of this loan factors in the $225 million of cash Groupon has. This is what Groupon owes after netting out that cash.)

Another way of looking at this situation is that the first $304 million of cash Groupon raises from its IPO will go to paying off Groupon’s creditors.

Does Groupon have enough cash to make it to its IPO?

Yes, if the company’s torrid growth rate can be sustained.

If Groupon’s growth slows sharply, however, the company could quickly face a cash crunch–as those $300+ million of bills come due before Groupon accrues the cash necessary to pay them.  And this would be a good time to note that some of the fundamental metrics in Groupon’s second quarter were not encouraging.

SEE ALSO: Believe It Or Not, Groupon Is Cash-Flow Positive

YouTube Makes Peace With Music Publishers, Will Continue to Host Songs

The National Music Publishers Association (NMPA), a group that represents hundreds of songwriters and music publishers, has backed out of four-year-old litigation against YouTube after reaching a settlement with the video-hosting giant.

The agreement, which the Google-owned video site struck with the NMPA and its subsidiary Harry Fox Agency, will allow music publishers and songwriters to start getting royalties from songs posted to YouTube, whether the post includes the original music video or a user-generated one.

Evan Weaver, the man who helped save Twitter from its Fail Whale, has resigned.

Remember when the Fail Whale was so common place that “Fail Whale” would find a home on Twitter’s trending topics?

At one point it really was that bad folks; and there were endless repetitive questions about whether Twitter would manage to resolve its uptime issues and, more importantly, whether it would be too late by the time it did.

Fortunately we now know the answer to the first question is ‘yes’ and the second ‘no’.

One Twitter engineer is credited with being instrumental in helping Twitter leave its Fail Whale behind, his name is Evan Weaver, Twitter’s “Other Evan”.

Joining in May 2008, Twitter’s co-founder Biz Stone introduced him to the world in a blog post in December of that year.

His words; full of acclaim for Weaver’s involvement in working to resolve Twitter’s performance problems:

“Evan [Weaver] very quickly became a leader on our infrastructure and performance initiatives. Thanks to his contributions, technical vision, systems experience, and pragmatic optimization strategies Twitter’s Engineering and Operations team has made significant progress moving away from early scaling problems.”

Biz continued:

“Evan represents the unique brand of talent we hope to continue to attract at Twitter. None of the founders of Twitter have college degrees but Evan’s Master’s degree and combined study of philosophy, computer science, jazz, piano, poetry, and bioinformatics more than makes up for that fact. Plus, his strangely offbeat sense of humor regularly cracks everyone up. Please join us in belatedly welcoming Evan and thanking him for his enormous contributions to Twitter’s recent and continued success.”

Today however, over three years on, Weaver officially announces his resignation from (and on) Twitter.

We’ve contacted him for comment to hopefully learn more about his motivations for leaving the company. It’s not often you hear someone state so boldly that they’ve resigned, let alone on the product they helped build.

With competition for engineers as competitive as its ever been, Weaver is bound to have a promising venture or company to move on to, the big question is what, and whether this says anything about the current internal operations at Twitter. In a year that’s seen two co-founders leave the and one return to support a new CEO, the dynamics within the company will inevitably have changed…but for the better? We hope so.

The Land Rush: Why Google Won’t Bless Motorola As Its Favorite Android

landrushshot

The basics: Google is buying Motorola, pending government approval. Everyone and their editor-at-large has written about it. Now I’ll take my shot at the soapbox.

I don’t know why Google acquired Motorola as opposed to simply licensing its trove of patents. My hunch is that it had more to do with fending off a threat from Microsoft than it had to do with Google’s hitherto unforeseen hardware ambitions.

But while I don’t know the why, I have some guesses as to what’s next. And I think that one of the prevailing theories — that Google is going to turn Motorola into its chosen House of Android, blessed with the latest and greatest releases before its competitors as it attempts to mirror Apple — is completely wrong.

Google CEO Larry Page, they say, has been inspired by Steve Jobs. He wants to completely own the Android experience, controlling both the hardware and the software from the ground up. Apple has reaped huge benefits with this strategy, and Google wants in on the action.

From where I’m sitting, the aforementioned scenario doesn’t make a lick of sense.

The way I see it, Android — and the smartphone industry in general — is still very much in a land grab mode. There are billions of people who are going to buy smartphones in the next five to ten years. Billions. Take every Android phone sold thus far, then multiply it by a factor of 10. Or 30. These phones will combine computing power and affordability in a way that has never been seen before. An $80 handset is selling like hotcakes in Kenya with no contract. Give it a few years and they’ll be selling for a fraction of that.

And that’s just the phones. Google allotted plenty of time at its recent I/O conference to discuss the future of Android — a future that includes Android-powered speakers, hardware accessories, and home appliances. There’ll be Android-powered car consoles, refrigerators, dishwashers, and clock radios. If it has an LCD screen, there isn’t much reason why it can’t be powered by Android.

But if Google wants to see this Android-powered future come to fruition, time is of the essence.

The Clock Is Ticking

All of the smartphone platforms have a strong lock-in effect. Those movies and apps you’ve purchased on your iPhone? They’re not going to work on Android or Windows Phone any time soon, and vice versa. Switching between one of these platforms is painful for your wallet, and it’s only going to get worse as your growing library of DRMed content weighs you down.

And then there are the hardware ecosystems. Apple TV already runs on iOS; Google TV runs on Android. Xbox has Windows Phone integration. Each of these operating systems is going to get more promiscuous and spread to more devices. The mobile phones of today are hooks, luring you into the comfort of iOS or Android or Windows — and each of these devices is only friendly with other devices in the same ecosystem.

The point being, all of the of the customers who get snatched up by iOS, Web OS, or Windows today are going to be much harder for Google to convert down the line. Which is why it needs to get as many of them as it can, right now.

Which brings us back to the Motorola deal.

The Nexus Advantage?

HTC, Samsung, and the other OEMs have done an excellent job thus far at creating a diverse ecosystem of Android devices that have given Google’s OS a huge market share remarkably quickly. Yes, a few of the devices stink. But you know what? Most people don’t really care. Or, rather, they don’t know they should care, which is all the same to Google. And even the mediocre Android phones are still a huge leap over the ‘feature phones’ many people are transitioning away from.

In short, the system is doing exactly what Google needs it to. Android is spreading like wildfire. If the premature launch of the Xoom proved nothing else, it’s that Google cares far more about getting a solid foothold in the market than it does about the user experience.

Which is why it won’t be using Motorola to one-up the existing fleet of Android partners. There’s just no reason to release a suite of superior devices, because Android isn’t struggling. And besides, Google couldn’t pull it off even if they wanted to: being Apple is harder than it looks.

But what, you say? Hasn’t Google already proven that it can produce superior phones when it designs both the hardware and the software, as it has with its Nexus line?

Except, err, the Nexus phones aren’t that much better than their ‘normal’ counterparts. I’ve used both the Nexus One and the Nexus S extensively. From a hardware perspective, they’re good, but hardly revolutionary. The real reason people think these phones are superior has everything to do with their software. They have ‘vanilla’ Android installed and they receive system updates relatively quickly. Most people couldn’t care less about either of these things. And eventually the other OEMs may be able to make skins that are actually improvements over vanilla Android.

Of course, Google could still get ambitious and try to make a completely integrated fleet of Motorola Android devices that blow everything else (including the iPhone) out of the water. But it would only get one shot at it — such a move would infuriate its partners to the point that they would abandon the platform, or at the very least, begin to seek alternatives. I don’t think Google is going to take that chance.

Which is why, for the foreseeable future, Google is going to do everything it can to make Samsung, HTC, and other major OEMs happy. They will receive previews of upcoming releases of Android at the same time as Motorola. They will be chosen for Nexus releases when Motorola won’t be. And they will help ensure that Android permeates into every market and cranny it can.

So what changes will Google make to Motorola, if any? My guess is that we’ll see it start pushing the boundaries on what can be done with Android. Motorola will start aggressively testing the waters with new form factors and entirely new devices. The hits will be quickly copied by the other OEMs, who will enjoy the benefits of expanding into new markets. And Android will spread even further.

Of course, this land rush wouldn’t be possible if OEMs were concerned about Android’s future because of patent issues — and it could take years for these to be resolved. Which is why Google was willing to throw down $12.5 billion to make sure they’re no longer a problem.

You Know What’s Cool?

Finally, I want to address the argument — if you can even call it that — that’s irked me most about recent analysis in Android-land. Namely, the notion that Android needs to start making more money immediately in order to justify this huge investment on Google’s part.

Any attempts by Google now to seriously monetize Android would be akin to Facebook doing a major ad push circa 2005. As I said earlier, this is still very much the land grab stage. Once it has billions of users on Android, Google will have plenty of opportunities to monetize them.

They’ll know where their users are, who they’re friends with, and where they’re going — and plenty of other information that’s both a little creepy and very valuable. AdWords won’t be the answer here, but I’m guessing Google will be able to turn this information into some lucrative products. But just like Facebook, they can figure out the specifics later. At this point, it’s more important that they figure out how to boost their user base by an order of magnitude — before they miss their chance.


Twitter users are more likely to impact your brand than any other social network

Now, more than ever, is the time for brands and companies to begin understanding how the chaotic and real-time world of Twitter can massively influence the ways in which consumers perceive them.

With so many different channels of communication and new social networks popping up every other day, it’s not difficult to see why brands tend to miss the mark when it comes to efficiently using individual marketing platforms for their intended purpose. For example, although Facebook is obviously a social networking tool, the majority of consumers who use Facebook are not quite the same as Twitter users when it comes to influencing the general public about a brand.

Twitter users are an entirely different breed of consumers and need to be treated as such if a brand hopes to succeed on the platform.

How do I figure?

In a recent report from Exact Target (a global Software as a Service leader that connects customers with organizations through marketing), it’s been found that daily active Twitter users — AKA, the consumers who actually reach out to or follow brands via Twitter — are 3x more likely to amplify the influence of that brand than, say, a Facebook user would.

Who are Twitter users and why are they so important to your brand?

Of the users who are active on Twitter daily:

  • 72% publish blog posts at least once a month
  • 70% comment on others’ blog posts
  • 61% write at least one product review a month
  • 61% comment on news sites
  • 56% write articles for third-party sites
  • 53% post videos online
  • 50% make contributions to wiki sites
  • 48% share deals found through coupon forums

In essence: What happens on Twitter doesn’t stay on Twitter.

Discussions that begin on the platform are more likely to appear elsewhere on the web than they are from any other network. Brands need to begin paying attention to their Twitter Followers as these consumers represent the most influential online users. Brands should be treating Twitter as an entirely different ecosystem of users, rather than directing brand messages on Twitter towards the majority of their consumers.

Active Twitter users count themselves as those who actually want to influence others. In fact, 73% of Twitter users have said that it is their goal on the platform to accumulate larger audiences, and are incredibly selective about who they choose to follow.

When it comes to identifying a group of consumers who are most likely to impact your brand’s online reputation, get to know your Twitter FOLLOWERS. These consumers are three times more likely than the average consumer to publish to a blog at least once per month (53% compared to 18%), and the content might mention your brand. From submitting product reviews and commenting on news stories to participating in discussion forums and maintaining personal websites, FOLLOWERS represent the most influential online consumer. And while many passive Twitter users are decreasing their use of this channel, the highly-influential daily Twitter users (a.k.a. Megaphones—download The Social Profile for more information) continue to increase their use. These consumers blog, comment, write online articles, and post to wikis more often than any other online consumer.

Twitter’s power to influence extends beyond the actual service.

Of course, Twitter isn’t for everyone — not every consumer (especially new adopters) can handle the overwhelming surge of incoming real-time information on the platform. Luckily, you don’t actually have to use Twitter to know what’s happening on Twitter.

Twitter’s extremely flexible API allows third parties to easily build applications on top of its infrastructure. Also, tweets can be read by absolutely anyone — you don’t need to create an account to read a tweet. This means that while only a fraction of users are actually reading tweets on Twitter itself, the platform is still able to effectively double its reach.

Followers aren’t the only ones listening to your brand on Twitter.

Search engines are listening as well.

Since search engines like Google or Bing are able to index your individual tweets, consumers will be able to find your previous updates during their own queries. What this means is what brands post from their Twitter account will effectively represent them for the remainder of Internet history and most likely will be found by those who are either watching for or stumbling onto them.

So how exactly should brands be interacting with their followers on Twitter? The beauty of the platform is that there is absolutely no right way to go about doing this. Twitter is a place for personality — a place to help give brands a voice — where users don’t expect every single company to interact with them in any specific way (except respectfully, of course). This provides ample opportunity for more creative ways to engage consumers.

Twitter users appreciate the important stuff your brand has to say.

While some consumers might turn to Facebook for more in depth discussion, most agree that Twitter facilitates quick and concise communication due to its 140 character limit. The amazing thing about Twitter is that it forces us to shrink down all of the nonsense we want to say about ourselves and present it in a single shot. It’s like a resume — you want to cut out the “fluff” and only offer the most relevant information to your target audience.

In this way, consumers understand that they are only getting the most important and critical information from brands or those they choose to follow on the platform. This, of course, means that brands need to find a way to embrace their voice on the service in a manner that quickly and effectively communicates the message they want to deliver.

The brevity of the platform isn’t the only thing that keeps followers tuned into what brands want to say — it’s also the fact that Twitter is both game, add-on, and advertisement free. By cutting out all of the distractions that we normally see while using any other channel, Twitter effectively narrows the focus for users only looking to find information. This means that whatever they are using Twitter for (whether it’s to receive news updates or interact with brands) gets their complete attention.

Twitter users aren’t  just following brands for news or product updates.

Consumers that seek out brands on Twitter are looking for perspectives from those companies that they won’t be able to find anywhere else. The level of accessibility of a brand or celebrity as well as their tendency to interact with followers often determines how successful that company or person will be in terms of making a meaningful impact on consumers.

For example, an angry consumer is more likely to Tweet about a failed experience with a company than they are to dial in their aggression as, oftentimes, they feel that the company will have more of a tendency to react (especially since the service is real-time).

Also due to the real-time nature of Twitter is the tendency for consumers to follow brands because they are looking for current promotions, special deals and coupons. Exact Target recommends engaging brand users with real time contests or giveaways, as Twitter followers tend to enjoy the entertaining aspect of these types of promotions.

The bottom line

Twitter, whether you like it or not, is a communication channel unique in and of itself. Understanding how to integrate the service into your marketing strategy can have a huge effect on the long term success of your company or brand, and it is important that you are aware of the differences between marketing to users on Twitter and reaching out to consumers on social networks.

Twitter users are blogger, vloggers, community members and active online participants in Internet culture. They are collaborators and contributors who need to be treated as such if a brand hopes to excel on Twitter’s unique channel. Take a moment to comprehend what exactly it is that your consumers want from you on the platform, and how to deliver that to them in a way that is uniquely capable of being amplified across all channels.

Settlement with FTC in First Test of COPPA Law for Kids Online

federal-trade-commission-ftc-logo_jpg.pngA maker of iPhone games targeted to kids has settled a case brought against it just last Friday by the U.S. Federal Trade Commission. The case concerned use of child players’ personal information without parental consent.

Broken Thumbs Apps is the maker of Emily’s Girl World, and a series of spinoff games, primarily for the iOS platform, that center around the fun and fashionable world of young ladies. Kids can dress up virtual models in their choice of clothes and make-up. It sounds innocuous enough, but apparently those choices were being kept on file, and perhaps analyzed.

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