Netbooks are on the rise. The bare-bones laptops, which typically cost under $500 and are designed for web surfing and email, are increasingly the focus of major PC makers looking for growth.

And for good reason.

According to Gartner and DisplaySearch, 5.6mn netbooks were sold in Q3 2008. To put things in perspective, 4.7mn iPhones were sold during that same period. 14mn netbooks were sold in all of 2008 and already netbooks account for 10% of the total PC market in Europe.

Two of the leading netbook manufacturers, Acer and ASUS, expect to sell 12-13mn and 7mn units in 2009, respectively, leading Ari Allyn-Feuer of Ars Technica to speculate that 30mn might be purchased in 2009.

Obviously, netbooks are changing the market.

While many have remained skeptical about the real potential of the mobile internet and many web designers and online publishers have not felt the need to make their websites mobile-friendly, the numbers demonstrate that the netbook is for real. In fact, one might argue that when consumers can purchase a basic model for about the same price as a smartphone, the netbook is the mobile internet.
This raises two big issues for web designers to consider.

• Screen resolution. Most netbooks have a 1024x600 resolution. The most widely-used screen resolution is 1024x768. While this means that web designers shouldn't have to fret about the width of the pages they design, the increasing prevalence of widescreen monitors with higher resolutions is going to be problematic. Combined, 1280x800 and 1280x1024 have almost as much market share as 1024x600 and at some point it seems inevitable that 1024x768 will be passed by these higher resolutions.

  As such, designers will, sooner than later, have a familiar dilemma - how to create designs that maximize the space provided by increasingly popular large widescreen desktop monitors while not leaving a substantial audience of netbook users behind.

• Processing power and memory. Most netbooks have modest processing power and a limited amount of memory (the most affordable netbooks come with 1GB of RAM). While this should be sufficient for most web browsing, the growing trend of pushing processing from the server to the client using AJAX and technologies like Google Gears could create problems since netbooks are not ideally suited to such burdens.

  Rich media applications, such as Flash, can also quickly strain machines with modest specs. An instructive experiment - open up several websites that use Flash video (i.e. YouTube) in separate tabs and watch the impact on memory usage.

  As netbooks grow in popularity, web designers will need to weigh how much resource consumption they're causing on the client side and how much rich media, such as Flash, they really should make use of.

That's the type of audience smart designers won't ignore and there are different approaches available to serve the netbook audience. The use of multiple websites (one designed for desktops and laptops with higher resolutions and greater power and the other for netbooks), for instance, is obviously not ideal. The use of fixed widths and designs that still display core content elegantly when other content gets cut off are probably more viable options.

The on-and-off again rumors of a Microsoft-Yahoo deal are back in the news.

TechCrunch's Michael Arrington, citing unnamed sources, reported on Wednesday that a group of "well known Silicon Valley executives and top investment bankers" was working to arrange an acquisition of Yahoo that would value the company at $20bn.

That would represent about a 20% premium to Yahoo's value currently but still far less than the value Microsoft placed on the company before its original acquisition offer was rejected.

The interesting part of this rumor: according to Arrington, Microsoft would provide most of the financing for the deal "in return for a fixed return on the debt that is tied to Yahoo’s future cash flow."

Arrington's sources indicated that Yahoo's search business would be sold to Microsoft after the acquisition was completed and new management installed. Microsoft currently has a cash pile of $23bn and while it could finance a good part of a $20bn acquisition, the question is - why would it?

And so it is that like many of the Microsoft-Yahoo rumors before it, this rumor appears to be just that - a rumor.

Bloomberg cited sources close to Microsoft who are familiar with its plans as stating that Microsoft was not in discussions to finance a Yahoo acquisition.

AllThingsDigital's Kara Swisher spoke to one of her sources close to Microsoft, who told her the same thing:

"We can deal directly with Yahoo, which is moving through a process to get a new CEO, and when the time is right, we will deal with their leadership. Getting involved in some convoluted deal with others in control…it’s idiotic."

In short, this is one rumor that doesn't make a lot of sense for Microsoft. And, as analysts quoted by Bloomberg pointed out, at this point such an offer wouldn't make a whole lot of sense for Yahoo shareholders either. Most would probably demand a more significant premium given the hammering Yahoo's shares have taken following Microsoft's failed bid and the collapse of its deal with Google. And with a new CEO on the way, they have real reason to hope that change is on the way. After all they've been through, waiting to see what happens probably doesn't seem all that bad.

In short, it appears that bloggers and the news media are still far more interested in a Microsoft-Yahoo hook-up than Microsoft and Yahoo are. My suspicion is that there's still interest in some sort of marriage on both sides but given the circumstances and the economy, both companies realize that they need to spend some time apart before they revisit their relationship. That's probably for the best.

There has been a lot of talk about the decline of the traditional entertainment industry the past several years.

As a growing and maturing Internet has become a much more powerful medium for the distribution of media, traditional entertainment enterprises, from television networks to record labels, have increasingly faced new challenges that many argued threaten their survival.

But has the decline of the entertainment establishment been overblown? Is the entertainment industry actually experiencing a sort of revival?

Two recent news items hint at the possibility.

David Chartier of Ars Technica recently reported on the fact that the movie industry experienced record profits in 2007 and despite a slight decrease in tickets sold in 2008 in the US and Canada, realized slightly higher box office earnings in 2008 thanks to higher ticket prices.

Despite the Motion Picture Association of America's worries over piracy, 2008 proved that Hollywood is still able to produce blockbuster hits that consumers will pay to see.

The Dark Knight was the second highest-grossing release in history, taking in a whopping $531 million. Warner Bros. alone took in $1.79 billion thanks to The Dark Knight and other hits like Sex in the City and Get Smart.

In the UK, the Entertainment Retailers Association just reported a strong year for home entertainment sales.

Game sales were up 17% thanks to strong growth in console buying.

Sales of digital music grew an impressive 41.5%, propelling total single sales to a 3.3% increase over 2007 figures despite a 43% decline in physical single sales. Digital album sales were up 65% and despite the weakness in physical music, CD sales were actually up in Q4 2008.

The entertainment industry's 2008 was so impressive that even the Electronic Frontier Foundation, which has often been a legal foe of entertainment companies in the debate over piracy, couldn't help but point out how well the industry is doing.

So what gives? Has the entertainment industry, with its complaints about the threats of piracy, played the boy who cried wolf? Have tough economic times helped the entertainment industry as they have done in the past? Or is it something else?

The biggest question - are these bright spots temporary anomalies or do they indicate that the entertainment industry is still on solid ground?

I think the answer to the former questions is - a bit of everything. And I think the answer to whether or not the entertainment industry still has its footing is 'maybe'.

While there's no doubt that piracy is a threat to the entertainment industry, I think many, including the industry itself, were fooled into believing that piracy should be a primary focus.

Take for instance the RIAA's recent decision to stop suing individual file sharers and to instead turn to ISPs for policing. This move is nothing other than an admission that its approach to dealing with the issue of piracy was misguided and, most importantly, a waste of resources. While the record labels do have a lot of issues to grapple with, including piracy, I think it's evident that record labels are making changes that should be beneficial over the long term. From the licensing of music for use in new markets like video games to aggressive deal making with digital distributors like Apple, the record labels are clearly doing more than just complaining.

Although they'd be loathe to admit it, we cannot rule out the possibility that all that 'piracy' (or 'sharing' depending on your perspective) has actually served a promotional purpose, as many have argued. As entertainment companies develop new revenue streams online, some might go so far as to argue that the revenue lost to piracy was going to be lost anyway and that piracy, regardless of morality, will benefit entertainment companies in some fashion as they get better at monetizing their digital initiatives.

When it comes to the economic environment, we shouldn't discount the possibility that this is helping the entertainment industry. As Ray Waddell of Billboard told the Associated Press recently in an article reporting on the record 2008 experienced by the concert industry, "[A concert is] not something you can get a fix for somewhere else. There's no other substitute for it, and compared to other things, it's pretty affordable."

From concerts to movies to video games, entertainment does provide an escape from the bleak economic environment and while a long downturn won't be good for anyone, entertainment is one of those industries that has proven time and time again that bad times aren't bad for every industry, even if we believe that past results aren't guarantees of future performance.

But beyond the overblown piracy concerns which shifted focus and made things look far worse than they were and the benefits the entertainment industry may be realized from the economy, I think we have to recognize that the entertainment industry is finally adapting.

The fact that traditional entertainment companies like record labels are increasingly embracing digital, experimenting with new approaches and recognizing that they don't have the leverage they used to reminds me a little bit of the evolution of online retail. In the first .com boom, many called the death of major offline retailers, who seemed slow and clueless when it came to ecommerce. Yet after the bust, many brick and mortar retailers became successful multi-channel retailers with powerful internet presences. It simply takes big companies longer to adapt to new markets.

I think we're starting to see this with the entertainment companies online. Whether they are willing 'to go all the way' and, most importantly, can realign their cost structures with changing economics remains to be seen. No doubt we can expect to see hard times for some players and not all may survive. But those who do will likely emerge as stronger and more diverse businesses.

Given the fact that the business of entertainment had a better 2008 than might have been expected, hopefully in 2009 we'll see a continued trend - less complaining from the entertainment industry, less doomsaying from entertainment industry critics and more of the great entertainment that everybody loves.

There is an ever-urgent need for companies to both acquire and retain online users, especially in today’s economic environment. Our new Usability and User Experience Trends Briefing highlights this, but which is best for achieving reliable results - internal or external testing?

Econsultancy estimates that client-side companies spent around £214m on usability and accessibility during 2008, which demonstrated a massive year-on-year growth rate of around 20%. This is due to an ever-increasing realisation that a commitment to the user experience is a key element to online success.

A recent trend that we've noticed is the development of internal testing departments within client companies, rather than outsourcing to agencies. It sounds like a forward-thinking move, but should we be questioning the benefits of this approach?

In-house testing is less expensive than outsourcing in the long run, assuming you do enough of it, and it helps any company to understand how usability fits into their business model. But, although data can generally be collected quickly, there are many barriers to success, such as a lack of industry knowledge (which can make a thorough assessment or understanding of results extremely difficult). Equally, other restrictions such as time, internal issues and conflicts, and a lack of specific technology can hinder a company’s efforts.

By contrast, outsourcing user testing to specialist agencies can deliver the benefit of results being generated in an unbiased environment, with industry specialists who usually have far greater experience and knowledge (along with better resources and the latest testing equipment and related technology). External testing generally has no restrictions placed upon it by the client and as such, results can be gathered quickly and presented accurately.

While internal testing can save money, it sometimes inadvertently cuts corners, meaning that results can easily be affected. Inaccurate data, upon which important decisions are based, which may ultimately damage any overall online performance.

We recognise the value of outsourcing in order to maximise testing, and know that some of the more savvy companies employ usability agencies on a retainer basis to guarantee ongoing testing of their websites. But there's still some doubt as to whether bringing user testing in-house is a shrewd move. It certainly sounds like a good idea, and many e-commerce managers we know would surely drool at the prospect of their very own testing lab, but is it the smart thing to do?

Travel operator Thomas Cook introduced a number of improvements before Christmas, including an improved holiday search function, and the addition of more multimedia content.

Since I had written a post last year listing ten different problems with the Thomas Cook website which were affecting the user experience, it seems only fair to give credit for some of the improvements that have been made since then.

These are the ten criticisms I made of the Thomas Cook website last year; some have now been fixed, and some haven't:

Returning no results

Last time, I encountered a number of 'amend search' messages advising that there were no holidays matching my search criteria, which can get annoying after a while. Now, when there are no results that exactly fit my original departure date I get a different message, informing me that there are no holidays on that day, but offering similar holidays a few days later. A big improvement:

Lack of user reviews

Thomas Cook recently added over 300,000 reviews to the site, giving ratings for destinations and hotels. Hotels and resorts always sound good from the travel agent's description, but customers would be much more confident in booking a holiday having seen recommendations from other holiday makers.

A reviews section allows users to search for reviews by destination, so they can find the hotels and resorts with the best scores. Average ratings are also displayed on holiday search results, though some more detail beyond just a mark out of five may be more useful.

Slow loading search results

This is still a bit of a problem at times; it can take 10-20 for search results to load, which isn't great for impatient web users like me. When searching and comparing a number of holidays this can become frustrating.

Hidden charges

Still an issue, and this is something that annoys web users and makes it difficult for them to compare prices. For instance, when I search for a flight to and hotel in Milan for two people, I'm quoted a price of £612.88:

However, once I select 'add to cart' the price changes to £865.96:

At least this time a reason is given; the extra is a £250 charge for a private transfer from the airport to the hotel, which is a staggering sum for a 15km journey. Hidden charges irritate customers, especially when they are as steep as this one.

Not saving searches for return visits

Many web shoppers will take their time to decide on a holiday purchase, and will want to do some research before they buy, looking at a number of different websites before booking. Saving previous searches and results (though these may be subject to change) will help customers to continue their searches and eventually buy a holiday.

Thomas Cook has now added 'My Thomas Cook', which allow you to shortlist holidays for later visits. Also, forms on the site are pre-populated with the address details you added when signing up, speeding up the checkout process.

Providing a contact number during the search / booking process

Booking a holiday can be a relatively complex transaction, and some users may feel the need to talk to a customer service representative to answer some questions about their booking. Providing this reassurance to customers can make the difference and encourage the customer to buy a holiday.

Ideally, a clear contact number should be available during the search and booking process, but this is not the case. There is a contact number on the site, but customers have to first find the tiny 'customer support' link at the top of the page, then find the answer in one of the FAQs. This is making it far too difficult.

Displaying unavailable flights

I found a few examples of this last time I looked at Thomas Cook, but didn't come across any unavailable flights this time around.

Providing information on airports and destinations

People need to know some background information beyond just the hotel description and flight times, such as the proximity of local facilities, beaches, tourist attractions and so on. This is what they have come to expect from sites like TripAdvisor, and background detail helps reassure customers about the holiday they are thinking of booking.

More information is now provided via an interactive map or a drop down menu:

This is fine, but joining everything up by linking to the relevant information when customers are looking at holidays from the a particular country or resort would be more useful. Also, a number of the videos I selected were unavailable to view.

Calendar

The calendar function, rather than opening in a pop-up window as before, now appears just next to the booking form and is now both easier to use and quicker to load.

Flexible search options

For people without a fixed date in mind, having the option of searching for holidays three days either side of the date entered is a good option, and can avoid the need for entering different dates again and again.

Holidays for the following week are displayed as an alternative when none are available on the selected date, which is an improvement, but people may want to see holidays either side of the date entered. This kind of flexible search is a feature of other travel sites, and Thomas Cook should consider adding this function.

This week we’ve gone live with our 2009 Affiliate Census surveys which are aimed at producing comprehensive overviews of both the US and UK affiliate marketplaces, from the perspective of publishers.

This research follows our inaugural Affiliate Census published in 2007 which gave some much-needed insight into affiliate businesses, the affiliate lifestyle and relationships between publishers and networks.

This year, we have set up separate surveys for UK-based affiliates and US-based affiliates, and we are excited about the prospect of comparing the findings from both pieces of research.

The surveys cover most of the areas we focused on for the first census, but we have also included various new questions, some of which relate to current market trends and issues such as the rise of voucher sites, the recession and the involvement of Google in the performance arena.

It will be fascinating to see the balance between different types of affiliate and how the mix is changing between areas such as PPC, True Content and Email.

This year the sponsors of the affiliate Census are Affiliate Window in the UK and MediaTrust in the US.

As was the case last time, we’ve also worked in conjunction with Jess Luthi at AffiliateProgramAdvice.com to help get this research off the ground. 

Watch out for the reports which will be published in the spring. US affiliates and UK affiliates can take the survey now and get a free, advance version of the report in return for their efforts.

The study will compliment survey-based affiliate research aimed at merchants and agencies which we carried out last summer in association with R.O.EYE, and which will repeated later this year.

Instant results are always the most appealing. When it comes to SEO, climbing up the SERPs can take a lot of time, effort and money.

A popular technique amongst some marketers for acquiring the inbound links that search engines like Google love has been to pay for them.

But getting results from this approach is increasingly difficult as Google becomes more adept and identifying paid links and penalizing those websites that are buying them.

Given that the logic behind Google's PageRank algorithm is that a website should be receiving inbound links because that website deserves them, Google's efforts to blunt paid links is not surprising.

Unfortunately, while an argument could be made that paying for links, when done appropriately, is a legitimate tactic, paid links have been on Google's radar for years now and have been discussed on Econsultancy in the past.

Yet recent discussions of paid links on Search Engine Watch make for interesting reads and highlight the fact that there's still a lot of debate on the subject, although Google does seem to be imposing its will quite effectively.

Search Engine Watch's Mark Jackson notes that while Google's wrath seems to come down on some while avoiding others who still profit greatly by purchasing links, he advises his clients to be very mindful of Google's stance on the issue and has seen firsthand the negative impact a Google penalty can have on websites.

In a recent post, Eric Enge of Search Engine Watch details a panel discussion that he participated in. Both white and black hat SEOs came to largely the same conclusion - don't risk too much if you go the paid links route; invest in building real results over the long-term.
 
And Jim Boykin of We Build Pages, previously a heavy buyer of paid links, recently announced that he was throwing in the towel on them, stating:

"Years ago I used to worry about Google finding my links through connections in their algorithms...today, I’d worry more about my competitors 'turning me in' to Google."

Clearly, the overall sentiment has shifted towards a growing consensus that paid links are risky, if not outright no-nos.

Personally, I have mixed feelings on the issue. Large-scale, indiscriminate purchasing of links, especially as part of an outright attempt to 'manipulate' SERPs, is worthy of contempt, but as Marty Weintraub of the aimClear Blog pointed out in June 2008, Google's stance is conveniently aligned with its financial interests, namely making sure that the only results that can be 'bought' are those that are purchased through AdWords.

But I also think there's another issue that doesn't get discussed much on this subject - the impact of Google's policies on publishers.

If a publisher sells a 'sponsorship' to a company, does the link that comes with it put the buyer's website at risk? It just might if that buyer has competitors who report the 'paid link' to Google.

Google's guidelines acknowledge that "buying and selling links is a normal part of the economy of the web when done for advertising purposes, and not for manipulation of search results" but goes on to instruct publishers to add a nofollow attribute to these links or to redirect links to an intermediate page that is blocked from search engines using robots.txt.

This highlights that despite all the amazing things Google's algorithms can do, it still wants and expects publishers to help it out.

For the many publishers and advertisers who don't even know about Google's guidelines, a lack of awareness could be very costly.

For those who are aware of Google's guidelines but don't feel like going out of their way to help Google do its job, the anecdotal evidence seems to indicate that erring on the side of caution is a prudent thing when it comes to paid links, even if it's not fair. In other words, caveat emptor.

Facing perhaps the toughest retail environment in decades, multi-channel retailers in the United States turned to paid search in the run up to the holiday shopping season in an effort to boost sales.

SearchIgnite, a search management provider, today reported that US multi-channel retailers increased their spending on paid search by 12% in Q4 2008 as compared to Q4 2007.

According to SearchIgnite's report (PDF), most of the increased spend took place leading up to Black Friday. After Black Friday, however, spend decreased from the same period in 2007.

All told, paid search spend, year over year, was up 15% in October and 43% in November but down 14% in December.

SearchIgnite found that consumers are still opening their wallets but are taking out less money:

"On average, consumers continue to purchase online at a steady rate (i.e. Conversion Rate), although they are spending 10% less on average per transaction (Average Order Value)."

This is not exactly great news for retailers. While conversion rates are important, increased spend producing lower total dollar sales logically means many retailers likely faced tighter margins this holiday season, especially given the hefty discounts many offered in an effort to lure shoppers and the increased competition that may have resulted from more retailers upping their spend.

When Amazon reported its "best ever" holiday season last month, some noted that Amazon was mum on key metrics such as average order value and profit margins. Yet these are the true measures of success.

SearchIgnite's report does provide a bit of welcome news for companies in the business of paid search, as the increased spend during the holiday season does seem to provide some validation that paid search is more appealing in tough times. Many have predicted that search marketing will do quite well in this economy.

But there are limits. The decreased spending in December is a reminder that a sinking tide lowers all ships and the increased spend on paid search before 2008's difficult Black Friday is likely something we'll see less of from retailers going forward until consumers start spending like they used to.

Two years ago, Cisco raised some eyebrows by purchasing two social networking companies - Five Across and Tribe.net.

The acquisitions were curious because Cisco is best known as a manufacturer of networking and telecommunications equipment.

Why would Cisco get into the social network game? The Cisco executive behind the acquisitions, Dan Scheinman, told the New York Times, "Part of our job is to form a relationship with media companies and deliver technologies and services to them, so consumers can consume what they want online."

While some, like GigaOm's Om Malik, called Cisco's foray into social networking the "wrong bet", others pointed out that there are indirect synergies created by the fact that the large amount of bandwidth required to support all of the content sharing that takes place on social networks has been a boon for Cisco's hardware business.

Whatever the rationale, Cisco continues to move forward with its social networking strategy in 2009.

Despite the economic situation and the questions some have raised about the financial prospects of hugely popular social networks like Facebook and MySpace, Cisco will today announce a new social networking product at the Consumer Electronics Show (CES).

News.com's Marguerite Reardon describes Eos as "a hosted software platform that allows media and entertainment companies to create, manage and grow online communities."

Cisco's goal is to "allow media companies to build interactive Web sites so that fans can connect with musicians, TV shows, movies, or whatever brand a media company wants to promote."

Warner Music Group (WMG) will be Cisco's first major client, and has used Eos to create websites for two of its recording artists: Laura Izibor and Sean Paul.

Michael Nash of WMG stated that partnering with Cisco was a logical choice because WMG isn't a technology company, but also admitted that WMG had no shortage of other possible vendors who could have provided something similar.

I find Cisco's launch of Eos at this time intriguing. For a corporation that has made lots of money providing equipment that is ubiquitous to the internet backbone, it's quite unclear whether or not selling social networking software, on its own, makes any financial sense. There is plenty of competition in this market and one would have to believe that the amount of money in the market is a rounding error when it comes to a multi-billion dollar company like Cisco.

Additionally, it seems that now is an odd time for a big push in this area given the economic situation. While media companies still need to build websites that could leverage Eos, the downturn has certainly forced many companies to cut back on projects and this trend will likely continue into 2009. Given this, it seems like Cisco would have done better to make a big push in the social networking market two years ago when it first entered the market.

On the other hand, it's clear that social networking isn't going anywhere. Facebook recorded record traffic on Christmas Eve 2008, demonstrating just how prominent a fixture online social networking has become in many people's lives. And the interest marketers and media companies have in the potential to use social networks to reach elusive consumers online doesn't appear to be waning, even if the economy is forcing them to curtail their spending in this area.

So will Eos succeed? Time will tell. In the meantime, it's clear that Cisco is one company that isn't afraid to place a bet on something far outside of its core business, social networking, in very tough times. Perhaps other big technology companies should take note.

US clothing retailer Gap.com launched a nice new e-commerce site in June last year, but it seems the decision to integrate its four brands into one checkout function hasn't worked as well as it hoped.

The retailer has designed its site so that users can shop from Banana Republic, Old Navy, and Piperlime, as well as Gap itself, and checkout at the same time, but this has had the unintential effect of undermining perception of the brand, according to Foresee Results.

Foresee's Online Retail Satisfaction Index states that:

"This feature may not have been important to Gap’s online customers to begin with because they may view the other brands differently in terms of price, quality, and style"

The revamped Gap website was reviewed on the blog when it launched, and was an improvement on the previous version, which had too much Flash and was almost invisible to the search engines, as well as not providing a site search function for customers.

Some improvements were made to the site; simpler navigation, site search was finally added, and product pages were enhanced (though key information remains AWOL). At any rate, the finished article was a more usable site, which makes it surprising that - despite these improvements - the addition of a joint checkout has been enough to damage the customer satisfaction score.

Yet the site remains far from perfect as there are a number of problem areas which may frustrate customers. Using the tabs to move between the four brands can be slow, and often produces a dastardly pop up window asking for email subscribers; there are better ways to do this. Delivery details and charges are not shown on product pages, forcing consumers into the checkout to find out about shipping costs. The side effect here is that it provides Gap with an inflated checkout abandonment rate in the process. The checkout itself can be painfully slow to load and update.

While it needs to consider the point about brand perception, Gap should also look at these remaining usability and information-based issues to improve customer satisfaction with its website. It should also start selling online in Europe and the UK, where it has a significant number of stores and brand presence, but no transactional e-commerce offering. Why leave money on the table in the current economic climate?

But Gap's website aside, perhaps the declining satisfaction score (in the face of website improvements) says more about the demands of the typical online shopper. Since shopping via the internet is now a habitual pastime for many consumers we can only imagine that they are becoming more demanding. Or maybe that should read 'less forgiving'. 

Kevin Kelleher of GigaOM believes that: "2009 may smile on disruptive startups." In his opinion, "There is, however, a way for startups to not only stand out in this recession, but thrive in it: By being as disruptive as possible."

'Disruption' is one of those words Silicon Valley entrepreneurs, VCs and observers have come to love.

The appeal of the concept is laid out nicely in Clayton M. Christensen's best-selling book, The Innovator's Dilemma: When New Technologies Cause Great Firms to Fail. Christensen, a professor of Business Administration at Harvard Business School, coined the term 'disruptive technology' and his basic thesis is simple: companies that are able to create a product, service or business model that either brings new customers into an existing market or creates a new application within an existing market can 'disrupt' even the best big companies in that market.

Christensen's thesis seems plausible enough on the surface and his book explains in greater detail the criteria he uses to quality disruptive technologies. Using these criteria, Christensen provides examples of the technologies that he considers disruptive.

In 2004, PC Mag's John C. Dvorak wrote an interesting piece that called the "the concept of disruptive technology...the biggest crock of the new millennium."

Dvorak's argument isn't altogether unreasonable. While I enjoyed reading The Innovator's Dilemma, quite a bit of it reminded me of other business books (by authors such as Malcolm Gladwell and Chris Anderson) that present sexy theoretical narratives but leave the discerning reader asking, "Ok so what? Is this really valid or practically applied in the real world?"

Frankly, I don't really care to discuss the validity of Christensen's ideas. What I do think is worth discussing is how meaningless the concept of disruption has become in Silicon Valley.

Kelleher's statement that "2009 may smile on disruptive startups" is just one of many examples of this and I'd argue that such inane comments reflect how misguided Silicon Valley has become.

First, it's important to understand what disruption really is. Again, Christensen's interesting book puts forth a set of criteria from which to judge whether or not a product, service or business model is disruptive. While one is not obligated to agree with Christensen, his criteria are his criteria and when using the term he coined, one should maintain some intellectual honesty by adhering to his criteria.

By Christensen's standards, it is obvious that not every innovation is a disruptive one. There are, for instance, revolutionary and evolutionary technologies, both of which have propelled companies to great success.

Many people in Silicon Valley don't understand the difference between disruptive, evolutionary and revolutionary technologies. For instance, when TechCrunch's Michael Arrington sat down with PC Mag to discuss disruptive technologies, he classified the iPhone as one. Why?

"I think that if you look at, in Silicon Valley, and you look around in say, the average street in Palo Alto, iPhone has like 70 percent market share. I mean, it's disrupting the telephone market and the definition of what a telephone is. So, I just think that's incredibly cool. It's setting completely new standards of what a cell phone needs to be, both from design and functionality stand point."

This, of course, fails to meet the criteria laid out by Christensen (the iPhone has not disrupted the telephone market) and Arrington demonstrates just how easily new products, services and business models are miscategorized as being disruptive.

When Kelleher states "...there is reason to believe that 2009 will allow original ideas, and companies behind them to come forth" he, like so many others stuck in Silicon Valley, seems to ignore the fact that original ideas are not in and of themselves disruptive.

Second, disruptive technologies are never 'frowned upon'. Startups that are able to enter a market and expand it by opening it up to new customers or creating new applications that increase its size can logically emerge in both up and down markets. Disruption has little to do with the economic environment and everything to do with how a new product, service or business model impacts the market it targets.

Different economic environments obviously offer unique challenges and opportunities that can make it more or less difficult for new companies to succeed but when it comes to the pure concept of disruption, disruption is not either in vogue or out of style at any given time. It's not a trend, it's a concept.

Finally, and most importantly, disruption shouldn't be a new company's singular goal. As Christensen pointed out in an interview, "I don't feel that this concept of disruptive technology is the solution for everybody."

Touché.

Real entrepreneurs create new products, services and business models because they see an opportunity to profit from them. They do not try to 'engineer' disruption because it's cool or fashionable. Whether a new product or technology is evolutionary, revolutionary or disruptive does not matter - its creator should be focused on successfully entering the market and creating value in the form of profit. Period. There's nothing else to it.

Real entrepreneurs do not wake up in the morning and say to themselves, "Disruptive technologies are hot this year. Evolutionary technologies are so last year. I think I'll try to create something disruptive."

From this perspective, I'd argue that Silicon Valley places far too much emphasis on semantics and spends far too much time on pointless pontification that typically does little more than serve a self-congratulatory purpose. If Silicon Valley entrepreneurs and investors had spent the last several years focused on creating companies that profitably produce technologies people want, need and are willing to pay for, perhaps we would have seen the creation of far more Silicon Valley upstarts that were today viable, self-sustaining businesses.

When Silicon Valley insiders and observers call every hot new product disruptive, treat disruption like a fashion trend and make statements such as "[it's] safer to build disruptive innovation from scratch than defend an incumbent position" it should be clear that Silicon Valley has lost the plot.

Silicon Valley's job is to produce new technologies that benefit their users. It should leave the categorization of those technologies to business school professors.

In denying a motion for summary judgment requested by Universal Music Group (UMG) against online video service Veoh, a Los Angeles court became the latest court to interpret the Digital Millennium Copyright Act (DMCA) in favor of a web service that offers user-generated video content.

At issue is whether or not Veoh was eligible for the Safe Harbor provisions of the DMCA. Veoh, like YouTube, transcodes videos its users upload into the Flash Video Format (FLV). Universal Music Group argued that this made Veoh ineligible for DMCA protection because this transcoding essentially made Veoh an active party to the copyright infringement alleged.

A. Howard Matz of the United States District Court, Central District of California, did not find this argument persuasive and instead found that, since Veoh's transcoding took place in an automated format and "at the direction of a user", Veoh was protected by the DMCA.

In doing so, Matz agreed with another recent court ruling that favored Veoh on the same subject.

The argument that online video services which transcode video should not be eligible for DMCA protection is one that Viacom has made in its $1bn lawsuit against Google and YouTube.

The Veoh court rulings seem to be setting a precedent against this argument, however there are other issues in the Viacom lawsuit, such as the scale of the alleged infringement and YouTube's knowledge of the infringement, that make the final outcome of that case less certain if a settlement isn't reached before it goes to trial.

But barring some sort of higher court reversal of the reasoning Matz and other judges seem to be taking, the good news for the average, moderately-popular US-based online service relying on user-generated content is that the mere application of some sort of process to uploaded files, such as the transcoding of video, alone seems very unlikely to persuade US courts to remove DMCA protections.

comScore reported yesterday that Americans watched 34% more online videos this past November than they did a year ago in November 2007. This amounts to a whopping 12.7bn videos watched in a single month.

Google properties, which include YouTube, remained the top online video destinations, drawing nearly 98m unique viewers and accounting for just over 40% of videos watched.

Following Google in the rankings are properties owned by two mainstream media companies: Fox Interactive Media and Viacom Digital. Hulu, the joint venture between NBC Universal and News Corp., was the sixth most popular online video destination in the United States.

According to comScore, 77% of the total internet population in the United States viewed online video in November 2008 and the average viewer watched 273 minutes of video.

The numbers are quite impressive but the popularity of online video today is hardly surprising to most given the rapid rise of services like YouTube and Hulu.

What may be surprising to some is that there are bearish sentiments about the nascent market for online video advertising.

JP Morgan analyst Imran Khan believes that the market for video ads will slow because the market is based on the CPM model. In his report, Nothing But Net: Outlook for Global Internet Stocks in 2009, he predicts that performance-based search ads will experience more robust growth in 2009 than display advertising amidst the global economic downturn.

As PaidContent.org's David Kaplan notes, unlike television, "online video can’t guarantee viewership for any specific video the way TV does in the upfront model."

Khan cites the unpredictable nature of video popularity, the wide range of quality and copyright issues as other reasons the video ad market will have a less-than-stellar next several years.

For online video providers, he is instead interested in other avenues of monetization, such as ecommerce, which has been discussed previously on Econsultancy.

Apple has reached a deal with the three largest music labels - Sony BMG, Universal and Warner Music - to offer their music DRM-free on iTunes, according to reports.

As part of the deal, Apple will give the labels something that they have wanted for some time - flexibility on pricing.

According to News.com's sources, pricing for catalog music will fall to 79 cents per song but the labels will gain the ability to charge more than this for for some hit songs. Meanwhile, AllThingsDigital's Peter Kafka reports that he has been told there will be three pricing tiers - 79 cents, 99 cents and $1.29.

After some time, News.com indicates that hit songs would fall to the 79 cent price in the US. 

An announcement of this deal could come as early as today at the Macworld Expo and Conference in San Francisco. This deal, assuming it goes through, appears to be a win-win arrangement for both Apple and the record labels.

While Apple has been offering DRM-free music from EMI for over a year, EMI has marginal market share in the United States. The expansion of a DRM-free offering to the three largest labels is therefore good news for iTunes. Competitors such as Amazon already offer DRM-free music and while consumers haven't exactly abandoned iTunes for Amazon in droves, all indications are that the future is going to be DRM-free. 

On the pricing side, Apple's willingness to give labels flexibility on pricing for hit songs should help reduce some of distaste the record labels have held when it comes to their relationship with Apple. Pricing has always been a touchy subject and the fact that labels have hard feelings over their past inability to push Apple into giving them what they felt was more equitable pricing power is no secret.

Assuming that News.com's sources are correct and the details of this deal are accurate, the big question will be whether or not consumers take kindly to paying more than 99 cents for some hit songs.

Given that many songs will now be priced 20 cents lower, it seems to me that most consumers will generally come out ahead or 'break even' depending on their tastes.

Yet with iTunes facing more competition in the digital music space, especially from companies such as Amazon, it will be interesting to see if variable pricing pushes some iTunes customers to services like Amazon's. After all, many hit songs are currently available for 79 cents on Amazon. 

It will also be interesting to see whether the record labels eventually push Amazon into a pricing arrangement similar in nature to the one reportedly struck with Apple. One has to believe that, given their financial situation, they will try. It's no secret that the record labels believe their music is worth more than it's often sold for.

Clearly, if this deal does come to pass, it will signal that the digital music space is evolving and maturing. Record labels are becoming more flexible but their ability to win back some control over pricing from Apple would indicate that they also know exactly what they want in return for this flexibility.

The good news for consumers is that all of this means greater choice. DRM-free music is becoming and mainstream reality and competition between digital music retailers is finally reaching a meaningful level.

As the economic crisis continues, the paid search market is becoming increasingly competitive. Despite the outlook for search marketing looking relatively positive during 2009, managing - and extracting value from - campaigns will become more and more challenging.

Econsultancy's first PPC Bid Management Technology Buyer’s Guide provides a valuable insight into both the suppliers and the tools that currently exist to help marketers manage paid search more effectively. 

The digital industry continues to flourish because of its ability to drive return on investment, especially in the face of a recession. For many advertisers, their most efficient channel is paid search, and the technology for managing this is typically a crucial component for maximising the success of any campaign.

The advantages afforded to advertisers using such management tools are numerous. Certainly we've found that marketers can operate more aggressively online, stretch budgets further and increase conversion rates. This is about working smarter, not harder, and is incredibly important for those clients managing hundreds of thousands of keyphrases a month. 

The strengths that bid management technology can provide include:

-) 24-hour functionality (by using an automated system which requires minimum human contact)

-) Operation in real-time (eliminating time-lags)

-) Allowing thousands of keywords to be monitored and optimised at enormous speeds

-) Giving any campaign an extra level of security

-) Providing a rapid-response solution if any urgent changes are needed

Profiling 16 leading suppliers and their products, our guide details the issues and trends surrounding bid management tools, as well as discussing the on-going industry question of whether or not technology may eventually replace PPC account managers/handlers.

Of course, paid search campaigns will always require the human touch: no matter how intelligent the software, somebody will need to set the rules. But we can see that bid management technology is undoubtedly a market which will continue to prosper as savvy marketers increasingly adopt this kind of technology to improve their search strategies (and their ROI).

With marketers currently facing the issues surrounding intensifying competition – such as CPC inflation caused by competition and search engines attempting to maximise their profits – it seems that management technology could provide a welcome solution to some of the problems.

The report contains profiles of the following vendors: Ad Director (WebTrends), AdLearn (Platform-A), Atlas (Microsoft Advertiser Suite), Coremetrics, DART Search (DoubleClick), DC Storm, Efficient Frontier, Kenshoo, MakeMeTop, Marin, Quant (Greenlight), SearchAdvisor (ChannelAdvisor), SearchCenter (Omniture), SearchForce, Searchware (TradeDoubler), VCCP.

Microsoft announced yesterday that it enjoyed its most successful year ever for the Xbox in 2008, with the number of users growing to 28m worldwide, increasing its lead over Sony's rival PS3 console to 8m units.

More significantly perhaps, is the 84% year on year increase in sales via Xbox Live, which suggests that, despite lagging behind the Wii in terms of the number of consoles sold, its online strategy is paying dividends.

Some bloggers had even suggested that the Xbox was doomed to fail thanks partly to the success of the Wii, as well the 'red ring of death' hardware problems experienced by many Xbox owners. I wrote a post at the time taking issue with this view, and it seems that Microsoft is now doing pretty well in The Battle For The Living Room.

Microsoft dealt neatly with the PR disaster of console issues in one stroke, by guaranteeing and paying for all repairs to faulty units, at an estimated cost to the company of £1bn.

And, while there's no doubting the success of the Wii, especially in appealing to families, its online experience so far lags behind that of Xbox Live, which now numbers some 17m 'active' members who have spent more than $1bn (£685m) online in the last three years.

With this userbase continuing to grow thanks in part to price cuts on the Xbox 360, it represents an impressive revenue stream for Microsoft which looks set to continue as it adds more downloadable movies, TV shows, arcade games and add-ons for existing games.

What's more, it has amassed a huge slice of the lucrative gaming market from nothing a few years ago, and leads both Sony and Nintendo in terms of online experience and online user numbers.

Microsoft may still be waiting to make a profit from the Xbox, but with the income from Xbox Live users, it looks like its long-term strategy is paying off, and that the company is now in a position to prove some of the doubters wrong.

Some of the UK's leading high street names have been revealing their retail figures for the Christmas period so far this week, and though high street sales have been affected by the credit crunch, e-commerce is still a growth area for these companies.

Today, Next and Debenhams both reported a drop in their like-for-like sales for the period up to and including Christmas, and both reported a rise in online revenues.

For Next, its retail sales were down 3% from July to December, but Next Directory, its combined internet and mail order arm, increased sales in this period by 1.1%. 

The success of Debenhams online was clearer from its interim statement; like-for-like sales for the 18 weeks up to January 3 were down by 3.5%, but online sales rose over the year. Year to date visitors numbers and sales on its website grew by 39.2% and 37.4% respectively, despite the website crashing during its pre-Xmas sale.

Yesterday, John Lewis reported that sales were flat in the five weeks to January, but didn't mention a separate figure for online, though it did have its busiest ever hour online as its sale began on Christmas Eve. The company's web sales were looking promising before Christmas though.

One definite online success story was pure-play etailer Play.com, which reported a 24% increase in like-for-like sales over the Christmas period.

Facing dire financial circumstances that have it selling assets to survive, The New York Times is doing something it had previously refused to do throughout its 157 year history; placing ads on its front page.

The January 5, 2009 issue of one of the world's most storied dailies contains a modest ad, two-and-a-half inches high, at the bottom of its front page that promotes CBS.

The ad is hardly intrusive (one might even miss it altogether) but it does highlight the fact that more and more newspapers are doing everything they can to make money as print revenue continues to free-fall.

Other major newspapers, including The Wall Street Journal and USA Today, have sold ads on their front pages for some time and, as AllThingsDigital's Peter Kafka points out, the Washington Post is now the only major newspaper holding out on the practice.

Given this, some might question the significance of The New York Times' move. I believe, however, that the decision reflects not only the financial desperation present at major newspapers but the realization that they'll need to adopt an approach that is already present on the Internet.

Just like a website's homepage, the front page of a newspaper obviously provides the most valuable, high-impact real estate for advertisers. When times were good and newspapers were one of the few games in town, they could use their leverage over advertisers to make lots of money selling ads on their terms, setting boundaries when it came to the real estate they believed to be sacred.

But that leverage is now gone and to sell ads at a premium, it's logical that newspapers will be creating and selling premium slots, just as most online publishers do.

The real question now is: will The New York Times and other major newspapers go further than this? Would the Times, for instance, consider maximizing its front page real estate by selling an ad above-the-fold? Would it ever go so far as to brand a brand 'take over' the front page (i.e. offer a 'brand wrap')?

Online, selling ads above-the-fold is a necessity for publishers and brand wraps are increasingly popular with advertisers looking to get more out of their online ad spend. As I write this, The Huffington Post features a brand wrap for AT&T and the Blackberry Bold.

It's quite possible that major newspapers will have to do what online publishers have been doing for years;  creating, and selling, the inventory advertisers demand. The only negotiable is price.

This raises a whole host of questions. Will offering prime ad real estate really help newspapers compete? Will it compromise their editorial standards? Will newspapers need to change their formats and layouts to make a new ad strategy work? Will subscribers be turned off by the prospect of spending money on newspapers that are increasingly filled with more intrusive ads?

Newspaper advertising trends will be something to watch closely in 2009. The New York Times and other major newspapers are not only entering uncharted financial territory, they're entering uncharted advertising territory as well.

On the heels of a phishing scheme that lured unsuspecting Twitter users to a website that was designed to steal their passwords, the Twitter accounts of well-known individuals, including United States President-Elect Barack Obama, have been compromised.

TechCrunch's Michael Arrington and others noticed unusual tweets on the official accounts of the United States President-Elect, CNN's Rick Sanchez, FOX News' Bill O'Reilly and Britney Spears. Companies such as Facebook and The Huffington Post have seen their official Twitter accounts compromised as well.

While it is not clear if these attacks are related to the phishing scheme that was widely reported in the past week, there is clearly either a coordinated attack taking place or some vulnerability in the Twitter service has been discovered and knowledge of it is circulating rapidly.

The situation is no doubt not only an embarrassment for Twitter but for those whose accounts have been hijacked. It highlights some of the risks that should be taken into consideration when evaluating a social media strategy.

Because of the large followings popular individuals and brands can acquire on social media websites and the ease with which information can be distributed to followers, individuals and brands need to understand that there is a real risk if their accounts are compromised.

As this incident on Twitter demonstrates, a compromised account can lead to damaging messages being sent to tens of thousands of people from accounts that are otherwise established as official, legitimate sources.

From consumer confusion to lost brand equity, there are potential consequences here.

Given this, individuals and brands need to include security considerations when implementing their strategies on these services. Who has access to accounts? What safety protocols can be established to reduce the risk that passwords are compromised? What plans are in place if something happens and action needs to be taken to respond to negative incidents?

Beyond this, however, individuals and brands need to understand that there are a lot of things they cannot control when using services like Twitter, Facebook and MySpace. These services not guaranteed to be secure and a security vulnerability that is discovered could place thousands of your customers, users and followers in the hands of malicious individuals and groups. In some sense, it is almost as if the individuals or groups that compromised Twitter accounts today had compromised valuable email and customer lists.

The lesson here: just as many prominent individuals and brands spend a considerable amount of time evaluating hosting and email vendors, individuals and brands need to invest time evaluating the services they'll use to interact with their 'followers' on the web.

Hopefully today's Twitter attack will serve as a wakeup call.

When Steve Jobs announced that he would not be speaking at this year's MacWorld, the blogosphere was rife with rumors that Apple's superstar CEO was battling serious health issues.

Jobs is a survivor of pancreatic cancer and therefore concerns over his health are a constant issue. In recent times, Jobs has appeared noticeably thin, prompting some to speculate that all was not well. His decision not to speak at the next MacWorld, which will be the company's last appearance at the show, only fueled further speculation and caused a drop in Apple's share price.

Today, Jobs announced that he does have a health issue but that it is not as serious as some had believed.

According to an announcement released by Jobs through Apple, Jobs' noticeable weight loss is due to "a hormone imbalance that has been 'robbing' me of the proteins my body needs to be healthy."

Jobs says that the diagnosis has been confirmed by "sophisticated blood tests" and that the "the remedy for this nutritional problem is relatively simple and straightforward." He has already begun treatment and expects to have a clean bill of health by late Spring.

Jobs has decided to maintain his role as Apple's CEO through that time.

The news that Jobs is not suffering from a serious illness is no doubt good news, especially for Apple customers, employees and shareholders. Shares of Apple stock rose more than 4% after the announcement was released as investor uncertainty over Jobs' health has now been resolved.

But the impact of the rumors that Jobs might be on his deathbed revealed that Apple faces a unique situation that does not exist at most companies.

Despite the fact that Apple no doubt has top talent, Steve Jobs really has become Apple. Since his return to the helm in 1997, Apple has reached new heights with its computers as well as consumer devices, namely the iPod and iPhone.

Jobs' is largely credited with providing the design and marketing savvy that has led to Apple's recent success.

Obviously, Apple would not cease being a great company capable of producing great products if Jobs were to leave and Jobs' announcement makes it clear that Apple isn't facing the specter of losing him but the company does face the challenge of preparing for the inevitable day when Jobs once again retires.

Will the company be able to maintain the incredible brand equity Jobs has helped it acquire? Will Apple be able to replace Jobs' personality with something that is equally appealing to Apple's most loyal customers? Will Apple's talented employees be able to innovate and rise to challenges as much without Jobs' imagination leading the way?

Perhaps no major technology company is as dependent on its CEO as Apple. From Oracle to Google, both of which have strong CEOs who are very important to the company's future, few companies seem to rely on their CEOs as much as Apple does. Steve Jobs is Apple's best salesman and few other CEOs hold as much sway with consumers and their company's stakeholders when they speak.

Even Bill Gates, whose name is still synonymous with Microsoft despite the fact that he is not involved in the company's day-to-day operations, became increasingly irrelevant to Microsoft's brand and positioning in the marketplace in the years before his de facto retirement.

That was a good thing for Microsoft, in my opinion, and while Apple should be thankful that Steve Jobs looks to be its leader for the foreseeable future, the company's long-term success may be dependent upon proving to itself that it has some mojo of its own that will still be around once Jobs isn't.

High street retailer Matalan unveiled its first e-commerce website just before Christmas, though the company is just selling its women's clothing range online at the moment.

I've been having a look at the new website, designed by Code Computerlove and using BT Fresca's e-commerce platform, to see how it shapes up from a user experience perspective.

Homepage

Search for Matalan on Google and the first page you will come to is not the e-commerce site, but Matalan.co.uk, which advises you to 'browse online and shop in store'. There is a link to buy online at the e-commerce site, which is hosted at matalanonline.co.uk, but this is not the most prominent link on the page. Why not just have the e-commerce site on the main page to make it easier for customers to buy?

The actual e-commerce site, Matalan online, has a well laid out and appealing homepage, but many people may miss this after searching for the brand name on Google. It could do a better job of promoting the fact that the company is now selling online.

Search / Navigation

The navigation options are clear enough; users can shop by brand and department or view offers and exclusives by using the links on the left of the page, while the top navigation menu provides drop-downs with the same options. Crucially, these navigation options remain the same throughout the site, making it easier for users to find their way around.

The site search function needs some work though; the terms entered have to be specific or it will not return any results. For instance, entering 'jeans' will provide no matching products, but 'jean' will, as this is how the item has been labelled. Even then, it still shows just one item. More flexibility is required here, while an auto-suggest feature can also be useful.

Though most customers will choose to browse a site through links, an effective site search function is still worth having for users that arrive with a specific product in mind, or that have failed to find what they are looking for by browsing the site.

Product pages

The product pages are decent, and provide most of the information that customers will be looking for, though there are some omissions.

Information about delivery, returns policies, a size guide, and care instructions are provided via links on the right hand side of the page, and a pop out window:

The delivery information provided is far too vague, stating that it 'will take no more than 5 days from the day you order', and doesn't provide details of charges. Delivery is a key factor in customers' purchase decisions so etailers need to be upfront about charges and delivery options. Prices should be included on product pages, instead of making customers wait until they have added items to their basket.

Shopping basket / checkout process

The basket provides a good summary of items and total cost, and customers will find out the cost of delivery here. It is easy to remove items or choose to continue shopping, while the call to action is prominent.

The checkout process was easy to use and quick to load and no registration was required beforehand,  though it did require some scrolling down the page to complete address and payment details. This means that some important links, 'proceed to payment' etc are below the fold. I'm sure most people will still manage to complete their purchases, but it makes it slightly more difficult than it needs to be.

On the final step in the checkout, for instance, the 'make payment' button is right at the bottom of the page:

Other than this, the checkout process has not been enclosed, so the drop down menu and other navigation links that might take customers out of the process are still available.

Conclusion

The site is well designed and usable, though it could be made better with a few, relatively small alterations. These include a better site search function,  more information about delivery times and charges, and changes to the checkout process.

The design team has done a good job here though and, when Matalan gets more of its product range online and promotes its e-commerce site more effectively, it should start to pick up more customers.

ITV has been busy promoting its newly rebranded video player lately, as it attempts to improve take up of its online catch up service.

While video views on ITV.com have risen over the past year, it still lags behind the iPlayer. It has updated again though, and now the ITV Player looks more of a match for the BBC's online video offering.

I've criticised the ITV online video offering in the past as it has failed to match the BBC in terms of usability; it previously lacked a dedicated homepage which made finding content hard work, while the small size of the video player was not well suited to viewing full TV programmes.

Both these things have been improved: a menu page was added a few months ago, which means users can search for programmes through an A to Z menu, by most popular, and a drop down menu featuring all content:

More importantly, the video player screen, which now uses Microsoft's Silverlight technology, has been enlarged. Though still not as big as the iPlayer's video, it is almost twice the size of the previous version, much better for viewing programming online. The picture quality on the full screen option has been improved as well, but it is still far from perfect.

ITV Player now has a couple of advantages over the iPlayer: it is not restricted by the same conditions as the BBC, so it can offer a 30 day catch up service, while much iPlayer content is available for only seven days after broadcast, unless you download it. This means viewers can get a whole month's worth of content on ITV.com.

Also, now that ITV has the rights to broadcast the FA Cup, it can offer football highlights online, something the BBC is unable to do with Match of the Day:

The iPlayer is still the one to beat in terms of usability, but ITV has a good range of video content on its site, and has now made it much more accessible for users.

In the last twelve months, Econsultancy has started to get more involved in the social media space, with a presence now on several social networking sites, including Slideshare, Twitter, and YouTube. Here, we share learnings and best practices from twelve months of tweeting.  

It's true that there is an awful lot of hype and some scepticism about using Twitter for business, but here at Econsultancy, we've definitely got a lot out of using the channel. It's clear that the immediacy and ease of contact can provide tremendous benefits for companies looking to form closer relationships with customers, partners, and other key stakeholders.

1. Monitor Twitter first

For companies who aren't yet ready to dip their social media toe into the Twitter stream, monitoring for your brand name is essential. Just as companies should be monitoring what the blogosphere is saying about you, understanding what the Twitterati are saying is also highly important. There are several tools to monitor tweets, including Twitter Search and Tweetscan. Econsultancy has a dedicated member of staff monitoring tweets, but alternatively, an RSS feed can be set up on Twitter Search to manage the process. Tweet Scan also allows users to download tweets as a CSV file for further analysis and set up email alerts.

Using services such as Tweet Scan in combination with Twitter can provide a powerful additional customer service tool, as companies can see if someone is complaining about their product or service, and resolve their issue accordingly.

2. Don't get "brand-jacked" online

It is surprising how many companies do not own the Twitter URL for their brand name, and if you don't get there quickly enough, then inevitably, someone else will. Even if your company is not using Twitter yet, it's likely that they may do so at some point later on. For example, something tells me that HMV's Twitter account is unlikely to be owned by the music retailer.

Earlier this year, "Janet" (supposedly from Exxon Mobil) aptly demonstrated what could happen when companies don't secure their Twitter domain name. Perhaps your company might not be ready to start using Twitter, but unless you want a third party talking to your customers as you, register your brand name on Twitter as soon as possible.

3. Understand your audience

Twelve months ago, Twitter was right at the beginning of the adoption curve, with the average user base consisting of technologists, social media strategists and early adopters. However, with an increasing number of politicians, celebrities, and musicians on Twitter, the channel is gradually crossing over to the mainstream. Despite this, it is important to understand that the majority of people on Twitter are technology savvy and sceptical of traditional marketing messages. Therefore, it is important for companies to be as open, transparent and honest on Twitter as possible. 

4. Follow and be followed

It is important to strike a balance between the number of people you are following and the number of Twitter users following you. A good rule of thumb is roughly follow the same number of people who are following you: if you follow too many people, you may be accused of spamming or trying to accelerate your network too quickly, given that a higher number of followers usually indicates influence. Sites such as Twitterati.Alltop are a good guide for beginners in terms of understanding who to follow, whilst Econsultancy usually follow users who mention us or our products and services in their tweets.  It is also worth occasionally doing a bit of "house-keeping" using sites such as Twitter Karma to make sure you're roughly maintaining a 1:1 ratio. However, while it's usually a good idea to follow everyone who follows you, beware of rogue Twitter accounts and spammers, which have begun to spring more frequently in recent months. 

5. Don't auto-Tweet

Tools such as Tweet Later allow users to automatically send a direct message welcoming new followers. Opinion is divided over the effectiveness of these tools: some say it is courtesy to welcome each new follower, but given that the Twitter is about the ease of individual communication, such methods seem slightly redundant. In addition, auto-DMs could be perceived as spam.

6. Company or individuals?

An important question for companies is whether they microblog using their own branded Twitter account or whether their employees tweet on their behalf, but in general it is important to strike a balance between both approaches. Here at Econsultancy, we have our branded Twitter account, but our editor-in-chief, Chris Lake, Senior Reporter, Graham Charlton, and our Head of Research, Linus Gregoriadis also have their own individual Twitter accounts. It is important to remember that employees may leave the company, so having a branded Twitter account is essential for representing the company in the long-term, whilst individuals provide a "human face," and add a greater degree of personalisation. 

7. Understand when (and when not) to respond

Having senior people in the organisation using Twitter will increase the influence of the channel for your customers. Given that Twitter is about increasing the ease of individual communication, it is important to respond to each tweet directed at the company. Savvy companies can use this as an extra customer service channel in addition to traditional lines of communication. Econsultancy's subscribers have used Twitter to get in touch with us regarding customer service, questions and other issues.

On the other hand, whilst it is important for companies to monitor what their customers are saying about them, organisations must be careful not to be perceived as too intrusive, or as a corporate "Big Brother." Identifying personalities is helpful in this, as it reduces the "creep factor."

8. Don't appear be too opportunistic

It is important to think of Twitter as another means of PR networking: if you're engaging anyway and creating conversations, then the opportunities will emerge naturally, whereas appearing opportunistic in the first place can create mistrust amongst your followers.

9. Use bit.ly to analyse traffic

If you use Twitterfeed to tweet your blog through Twitter, it is worth using the URL shortening tool, bit.ly.  Using bit.ly/info will allow you to gain visibility on how many people clicked on your link, their geographical location, as well as additional Twitter conversations around your tweet.

10. Add value

Twitter is about creating mutual value for you and for people following you, so use links and additional resources to create insights for your followers. It's also important to remember that Twitter is ultimately a social tool, so use the channel to connect, create dialogue and conversation, and reach out to the wider community.


In summary, whilst more companies have incorporated social channels into their online strategy, 2009 will be more about establishing best practices, understanding the sources of ROI and tangibly measuring success using metrics. Econsultancy will be hosting the first MeasurementCamp of 2009, on 15th January at BSG House, which is essential to attend for anyone hoping to learn more about measuring social media success.

Follow Econsultancy on Twitter and we'll follow you back. Aliya Zaidi can be found Twittering on her personal account here.

It has been interesting watching and taking part in discussions about our recent Online PR Industry Benchmarking Report. Over 300 UK marketers and PR professionals working for both in-house company teams and for agencies were surveyed.

Here are a few key report findings and opinions from those working at the coal face who blogged or commented...

Online PR/social media ‘ownership’

Online PR is clearly not ‘owned’ by PR specialists. The results show that when companies outsource online PR to agencies or specialists, 51% of companies are using PR agencies but a significant percentage are using search marketing agencies (29%) and web development agencies (22%) to develop and deliver online PR strategy.

Flash-heavy websites continue to massively annoy and disappoint. The UNIQLO site is a fantastic example of a website that appears to be well designed, but which is actually a tour de force in frustration.

I was reading Contagious magazine’s ‘most contagious’ review of the year, which is a useful digest of trends for the past year. UNIQLO was cited as a trendsetter in digital, having won various prestigious awards for its efforts, so I thought I’d check it out.

While the UNIQLO website is doing some things well, there are areas of concern, and I think it would benefit from toning down some of the more whizzy Flash elements in favour of best practice basics.

• Too much movement. Visit the website and the eye is drawn towards the middle of the page with the attention-deficit animations that change every three seconds. Already, it’s too in your face.

• Ridiculous use of colour. The first thing that greets the shopper is a wash of animated red as a background with ‘SALE’ splashed all over the page in white text. On top of this, and barely visible, are two white on red navigation elements for ‘Women’ and ‘Men’. What is this, a lesson in camouflage? Talk about breaking the rules.

  

• Rollovers are painful. Aim for one of those two navigation units. In my case I went for ‘Men’, but in doing so accidentally hovered over ‘Women’. Cue some stupid rollover rules. Menus expand without warning, making it incredibly difficult to navigate. In addition, the designers thought it would be a great idea to jumble up the labelling, with the user forced to wait before the menu labels are properly displayed. Dumb, dumb, dumb.

  

• Mystery navigation. Since this central navigation painfully fails it seems sensible to find some other way to get to where I want to go. Thankfully a top navigation bar seems to want to help. But why, when I click on ‘Men’, does it direct me to a sub-channel – ‘knitwear’ – rather than a ‘men’ homepage. Maybe this works, or maybe it’s just a reminder of how cold it is outside?

• Where are the delivery charges? You will find them part of the way through the checkout process, but they should be on product pages, or on the shopping basket page at the very least, while the link in the help section for this information doesn't work. People need to know these things before making a purchase decision...

• Lame product search. There is a ‘product search’ function that allows me to search by keyword. However if I type in ‘knitwear’ it refuses to show me any knitwear, despite the website’s knitwear fetish. Ah, but it’s a category! Ok, so how about ‘jumper’? Nope, nothing. ‘Sweater’ works, but clearly synonyms are out of fashion at UNIQLO.

• Poor product pages. Product display and zoom functions are good, but the page is let down by some basics, such as failing to display shipping details (timings and costs). As mentioned previously, I have to enter the checkout to see this information. No biggie, you might think, but consider the checkout ‘abandonment’ rate. These ‘dropouts’ send the wrong message to UNIQLO’s e-commerce team.

• Pointless links. For whatever reason a Christmas Delivery message displayed on the homepage links to the homepage. Better to link to the Sale page?

• Bad product photos. Displaying clothes can be tricky online, as these are products that people like to try on first, so quality photos from a range of angles that fully display garments are essential. Sadly, Uniglo only lets you see two thirds of the items, making it unnecessarily difficult to see how they look.

  

• Confusing checkout. The different stages of the process refresh in a jarring way that hurts the eyes, if the homepage hasn't already given you a migraine. Forms in general aren't bad, though it asks for 'CVV' instead of card security code, which may be enough to confuse some shoppers. It also seems to delete the contents of my shopping basket after about ten minutes...
  

Recently, it was the TechCrunchTalk and ChristmasCrunch Party, which focused upon how the online startup community is being affected by the looming recession.

Some 400 people attended the event to hear how the landscape currently looks for new internet businesses, and to try to understand what will happen in the near future.
 
Econsultancy caught up with Mike Butcher, who was hosting the occasion, to gain further understanding as to what the thoughts are amongst the influential investors, current companies and the digital experts, including Mike’s own thoughts and impressions.

After a good few years of optimism, the general thought seems to be that internet startups are once again being affected by limited opportunities to raise finance. Given the economic environment, what's the startup landscape really looking like?

It is absolutely the case that the market will be affected, but what will happen, as happened during the last slump, is that business models will change again.

This time, startups will bootstrap from the word go, rather than raise finance first. They will have to get revenue faster, which means they will introduce monetisation faster; whether it be premium services, performance based advertising, white-labelling, you name it. We will also see the rise of more lightweight e-commerce startups in new niches.

There have been some great new startups that have deserved to win the backing of investors. Which ones in the UK and Europe do you particularly rate or admire?

I go with both the startups and the entrepreneurs. Really standing out in the UK are: Huddle, Rummble, Skimbit, Groupspaces, TheFilter, Coull, Trampoline Systems, Hubdub and WAYN, amongst others. And in Europe, Qype, Netlog, AskMarkets and Soundcloud.

Do entirely new startups have a chance, or will ideas have to be put on the backburner until the 'crunch' softens?

There's nothing to stop a really great idea, but if you can't get to revenue fast in this market, then you will have to be so good the VCs will fund you.

However, VCs will be less interested in early stage startups and watching the ones that can make it to revenue with a close eye. The equity gap is about to return and only professional Angel investors, dedicated tech Angels, will stay around. But many of them have been left exposed to the downturn.

That leads nicely into the next question. To what extent has the downturn affected the VCs? Are they nervous, or have they been hit financially? They’re hunkering down again, it seems.

The top tier VCs like Accel, Balderton, Index, Wellington, DFJ Espirit and Atlas all look robust,  but mid-tier and smaller VCs have been hit and will have trouble raising funds. Hedge funds and private equity are in bad shape, for obvious reasons.

Supposing the main threat to startups, or at least the ones that have taken money, is being unable to preserve cash and being forced into making layoff, is there an argument that many VC-backed startups didn't learn from the lessons of the first dotcom crash?

No, not really. Each business runs on its own merits and there is enough experience in the market now to hedge against many of these problems. However, it's the startups that were encouraged to grow prior to funding that are feeling the most pain, especially when the term sheet was not signed, after all.

To what degree did any of these guys jump on the Web 2.0 bandwagon? Have you got any examples of obvious stupidity?

Naked is a prime example. They were a social messaging start-up that went into administration back in May this year, after only launching in February with private beta testers. It’s well worth reading about what happened.

At this point in time, do you believe that bootstrapping is the way forward?

Yes. But also startups should never have forgotten things like public sector grants. It sounds dull, but it's money after all.

How do you think London compares to the likes of Silicon Valley, in terms of tech culture, risk-taking approach, and the whole entrepreneur scene?

It's much smaller, but alongside Berlin, it has one of the most vibrant scenes.

London’s also become a great stopping off point for both Europe and the US startup and VC elite. However, it remains very expensive to set anything up in London, in comparison to the rest of Europe.

Are there any other places in the UK where we see a similar buzz of startup activity?

There is always a lot of chatter about other places. Leeds, Manchester and Brighton you hear about lots. The scenes there are smaller than London, but just as enthusiastic.

Following on from this, you travel a lot in your role at TechCrunch; are there any other areas around the world where we see internet startups thrive?

China definitely, due to low cost and talent. I would say Berlin is going to be a hot-house going forward, but many business models will have to change. Equally though, places in Eastern Europe, like Slovenia, are becoming interesting… 

So finally, what does 2009 hold for TechCrunch UK?

Lots. We'll be running more events in the UK and around Europe, taking the travelling circus of entrepreneurs and investors with us.

We'll also be maintaining our editorial position, going after the best stories out there.

With Christmas only a few days away, many online retailers have already passed their deadline for delivery before Christmas, though some are still offering the chance for last minute shoppers to buy online in time for the big day.

So how are retailers keeping customers informed of this? Those that are still offering Christmas delivery should be making it clear to customers, as this gives them a big advantage over rivals for the next few days, and should see them picking up sales from last minute shoppers.

On the other hand, sites that cannot guarantee getting goods to customers in time for the big day should also be making this clear, to avoid frustrating shoppers who might have been expecting delivery in time for Christmas.

So how are some UK retailers handling this issue?

You can still order from Amazon with express delivery today and get goods by Christmas Eve, and the retailer has added a notice at the top right of the screen to make this clear, with a link to more information. This could have been larger and in a more prominent position though, to encourage more shoppers:



Tesco also offers delivery up to the 23rd, though not for all departments. A link to delivery information is displayed on the home page, just above the fold:



The retailer also provides a chart detailing which departments you can order from, and on which days:



However, Argos does a better job here than its two rivals, making the delivery information unmissable, while the promise of Christmas delivery if orders are placed by 12pm today is a good incentive for shoppers:



For retailers that cannot guarantee delivery in time for the big day, keeping customers informed is essential, as many will not forgive retailers for letting them down. Therefore, a notice on the homepage, or at least at some point in the basket / checkout process is vital.

HMV may disappoint a few customers this year as, though it doesn't guarantee Christmas delivery, it doesn't tell customers this on the homepage, the shopping basket page, or at any point in the ordering process. PC World also fails to inform customers on its website.

Both Marks and Spencer and John Lewis provide good examples of how it should be done, with clear notices on their homepages informing customers that last delivery dates for Xmas have passed:



Comet does the same, and also uses the opportunity to promote its collect in store service:



I think offering such last minute delivery offers a clear advantage for some retailers, as there are always plenty of people who will leave their Christmas shopping late. More important though, is managing customer expectations, which means making it clear whether or not they can expect to have their goods by Christmas Day.

With the end of 2008 nearly upon us, it seems that a great number of analysts have become very quiet after any earlier notion that digital would be recession-proof has now been crushed.

Riding out the storm

Unfortunately, no matter how powerful online is as a medium, a downturn still means there will be cut-backs, and the internet is not immune to this, especially where marketing planning is concerned.

Only a few weeks ago, eMarketer quietly revised their original 2009 online ad-spending forecast, pushing the growth rate to less than 8%; quite a way off the 14.5% they had predicted back in May.

The general feeling is to agree with a revision of 2009 estimates, but perhaps not so pessimistically. Digital continues to grow, albeit at a slower rate, and this is to be expected given the circumstances.