Following my last post, just a quick heads-up note on Yahoo (YHOO) rebound. Apparently things are moving in the right direction again for Yahoo , reports Business Week, as Merrill Lynch changed their rating. The stock rose 3.3% in one day.
Assumptions are mixed from a possible AOL acquisition, Project Panama, designed to better match ads with search results, expected to generate over $500 million in revenue (25 cents in EPS) over two years and the pure speculation on Yahoo’s stock which lost 35% year to date.
I could not resist to highlight the Dell exploding batteries sequel. As probably most of you could not miss, Dell has decided to recall 4.1 Millions of its products, at Sony’s expense though. As we discussed here previously, the consequences of such a flaw could be devastating. Imagine a poor Dell customer working on a plane…
Such things are of course scary, but what did scare me as a marketer, was the way Dell initially ignored it from a Marketing 2.0 perspective. They finally posted something very “corporate” about it on July 13, see here. While they were launching a corporate blog Direct2Dell, to supposedly let directly their customers discuss their product experience, Dell demonstrated how not genuine consumer generated content can ruin a reputation and in the end generate more negative buzz than if nothing had been attempted. You’ll see, if you follow the Direct2Dell link, that now this flaming battery episode is all over their corporate blog (we are mid August!).
This could not happen at a worse time for Dell, which reputation and stock is under pressure as highlights eWeek. As Dell Q2 results just have been released, reported by AP as “Dell Posts Disappointing 2Q Amid Probe“, let’s see how this computer giant can overcome this difficult time. To be continued…
Another poor hero of our Marketing 2.0 series is AOL – read here. I’m not chasing bad news, believe me, but AOL just happen to make another giant step in making sure their customers will walk away: their research division revealed a list of about 658,000 users and the Web searches they made. USA Today is asking today :”Could the end be near for America Online?“, and this is only the start of a new negative buzz.
Well fellow marketers, let’s hope there’s a way out of ignoring Marketing 2.0 or Marketing 2.0 beginners mistakes. After all, this is part of our job as well. And don’t take me wrong, I wish Dell and AOL to recover quickly.
Another big brand is jumping in the Free is good for our marketing syndrome. Time Warner (TWX) just announced yesterday that AOL will offer its e-mail and web services for free. The goal is to move heavily to a pure advertising revenue and stop the subscribers churn: they’ve been loosing 30% of their 26.7 million U.S. customers from Sept 2002, now down to 18.6 million. AOL expects to save more than $1B in marketing costs by the end of 2007 in doing so, placing their bet on the recent surge of advertising revenue – 40% up in one year to $449M. AOL is also risking its dial-up subscribers business, representing 80% of their income, which was $2B in the last quarter alone.
What are they doing to retain these customers?
Given the impressive churn rate AOL is suffering, I asked myself if AOL was not getting Dell’d as well. Not to mention of course that dial-up Internet access is not geared to expand in the future but they offer high-speed access.
Well, you know me by now, me writing this post is a strong indication that the answer is probably close to a YES. Here is an interesting experience of Vinny trying to cancel his AOL dial-up account. Do yourself a favor and have a good smile on your face, listen to Vinny’s recorded phone conversation with the AOL representative when trying to cancel. It is just amazing. The Consumerist then posted the apparently real AOL retention manual, a strong indication that what Vinnie recorded is not at all isolated. And of course bloggers started to buzz about it.
What is AOL answer to this negative buzz: FREE. We will give you more for free so you don’t go away or even better, you’ll subscribe to AOL as your boradband ISP.
Once the Internet king and now stumbling, AOL is to me a very good candidate to get Dell’d. I’d be curious to read about your Get Dell’d brand candidate list and stories about it. Feel free to post it here.