Monday, September 10, 2012

AOL: THE HOUSE THAT TIM IS BUILDING

Former Google key man Tim Armstrong is cutting deadwood, exploring new businesses and being trigger happy like how. But his current assignment at AOL could prove to be a career killer. 

But when on September 29, 2010, AOL acquired three Internet startups – namely TechCrunch Inc., 5Min and Thing Labs – reportedly for an amount of over $100 million, it had even the most supportive analysts questioning Tim’s logic in the acquisition. Apparently, this is a move on the part of AOL to become a pure content based entity. According to Armstrong, even though the subscription business still generates a major chunk of their revenue, it is mostly on a decline. As the new content strategy is supposed to work on the mechanism of affiliating advertisers to the content, AOL is planning to invite marketers to work with its editorial team and produce customised content. With this, Tim hopes that ad money will follow suit.

Unfortunately, even if this does work, the fact is that Tim is relocating resources in a suspiciously unproductive manner, and even a seat-of-the-pants analysis is enough to give the reasoning.

After the Time de-merger, AOL was and is basically left with two businesses – subscription and advertising. Subscription, the business responsible for generating almost all of the company’s profits (as per the latest SEC filings by AOL) is alarmingly declining by 30% per annum. It constitutes almost 25-50% of AOL’s web traffic. The advertising business, which consists of a $600 million deal with Google and is powered by the subscription business (due to w


Source : IIPM Editorial, 2012.
For More IIPM Info, Visit below mentioned IIPM articles.
 
IIPM : The B-School with a Human Face
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Saturday, September 08, 2012

For the win!

This one, to the mother of all Blah-Blah forums: Twitter! The microblogging service that reminded us of brevity being the soul of wit, with its 140-character limit on messages, is where you get to witness ‘change’, in real time. Recently Twitter got itself a new CEO, Dick Costolo, and even primped up its interface to make for a richer media experience. #CheckItOut!


Source : IIPM Editorial, 2012.
For More IIPM Info, Visit below mentioned IIPM articles.
 
IIPM : The B-School with a Human Face
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Tuesday, September 04, 2012

This Have-a-Cake Government!

The pink papers have been going ga ga over the spanking new Wholesale Price Index (WPI). First, the new index shows that the rate of inflation is 8.5% while the old index would have it at about 9.5%. Conjure and juggle numbers and voila, you have taken care of the aam aadmi! Second, the new index (admittedly) better reflects the changing structure of the Indian economy where citizens now consume a larger basket of products and services. More than 220 new product and service categories have been added to make the index more representative. That’s compelling logic no doubt.

But take a quick look at the kind of new product and service categories added and you will immediately realize how this government – thanks to a hopelessly ineffective opposition and a virtually supine and servile media – is getting away by fooling all the people almost all the time. Some of the new products that are part of this ‘more representative’ index are beer (a weight of 0.155), ice cream, mineral water (I am sure distressed farmers rush off to buy a bottle of Bisleri along with pesticides when they see suicide as the only option), blended liquor, gold (a weight of 0.364), computers, washing machines and refrigerators (a weight of 0.194). How many of the 500 odd million Indians who live in abject and degrading poverty drink beer & mineral water and go to swanky malls to buy computers and refrigerators?

Sure, some might argue that the presence of 500 million poor Indians does not mean that we don’t need a ‘better’ and ‘bigger’ WPI. After all, the consuming classes too are Indian citizens. Fair enough. But how about an honest attempt to create a new consumer price index that reflects the consumption patterns of the really poor and of families hovering on the edges of poverty? Of course, we have consumer price indices of various kinds – for industrial workers and even for agricultural workers. But when was the last time you heard about this government spending time, money and energy on committees to upgrade those indices? The point is simple: for the really poor, more than 80% of income is spent on food. And with rampaging food inflation, you can well imagine their plight. Nobody talks about it anymore because the vocal middle class which also consumes the media has been virtually insulated against inflation because of a rapid rise in family incomes – both in the private and the government sector. And yet, imagine the hungama that is created when the price of LPG cylinders is raised by a relatively meager amount. Really, this is unparalleled hypocrisy for a society that claims to be democratic and a government that claims to think mainly of the aam aadmi.

Food-grains rotting while the poor are starving? This government ticks off the Supreme Court for interfering in policy matters. Vocal and politically powerful groups demand more reservations? Give it to them: most of them will not go to a college anyway. The poor dying of malaria and tuberculosis by the tens of thousands and their families going bankrupt due to medical expenses? Give more ‘subsidised’ land for corporate hospitals.
 
 

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Monday, September 03, 2012

UTV’s Global Broadcasting

UTV’s Global Broadcasting division posted a remarkable turnaround in the last year. CEO M. K. Anand speaks to B&E on the favouring factors and future expansion

B&E: UTV Entertainment Ltd. (a part of UTV Global Broadcasting) posted a profit of approx `355 million as opposed to last year’s loss of `820 million. How did you manage the turnaround?
MK: There has been a big write down that has happened on the inventory side, there has been some consolidation and all movies in the movie library have been taken in and written off. Right now we are sitting on a library which has zero cost on our profit and loss account. So our programming cost has significantly reduced because of that. In general, there has been an operational efficiency improvement between Q3 last year and Q1 this year by absolutely 100%. We were operating at `110 crore; this year our target was `220 crore. In order to achieve those numbers we needed to get `55 crore of revenue. In the year which ended at `110 crore, you would expect that the quarter would have made 27 crore, so the one ending at `220 crore should make somewhere about `35 crore in Q1 but we actually did around `50 crore. So we have already set the run rate for Q4 in Q1 and that’s how we move forward. The GRP increase happened in Q3 last year after a lag of 3 months. We were anyway planning to monetize. In Q4 we did significant marketing; we became sponsors of Goafest, which is the biggest ad event for the advertising fraternity and our ad rates have substantially increased over the last year after that. Also, all the channels were operating at 50% inventory utilization and right now we are operating at 100%.

B&E: UTV has been toying with various genres with Bindass, 3 movie channels and a news channel. What further expansions are expected now?
MK: A movie business is required as a portfolio player. It is better to have flanking businesses, like a movie business, which are bulk driven in nature so that it becomes easier for you to negotiate business with distributors and advertisers, as long as they are profitable, obviously. But our network will concentrate on the 15-24 target group and we will not push ourselves into the GEC (General Entertainment Channels) business. We are at a life-cycle where the GEC business will go lower. It’s like the mainframe business of the 1990s. If you already had it, it was good; but if you didn’t, it was better to have a desktop business rather then a mainframe one.


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Saturday, September 01, 2012

The company saw sales & profits surge phenomenally

It was a stellar year for M&M, as the company saw sales & profits surge phenomenally. But M&M is now equally concerned about where its numbers come from, as it diversifies into new segments & geographies via M&As and alliances. by Pawan Chabra

Cash-strapped c auto major SsangYong Motors has provided the company a lucrative opportunity to enter the global SUV market. Besides acquisitions, the deal with Renault for Logan and the JV with Navistar for its commercial vehicle ventures are noteworthy. For the record, while the partnership with Renault wasn’t that fruitful as initially predicted by M&M, the company now has a 100% sake in the JV and is now planning to relaunch the model in the small-car segment.

Anand Mahindra recently said at the 50th annual convention of the Society of Indian Automobile Manufacturers, “The comics and novels that I used to read in the 1960-70s surely showed the use of mobile phones as a technology & laptops as devices, but the girls in the pictures were still blondes and men were still the same old gentlemen. The imagination of the author never had guys with pierced ears or girls with tattoos.”

Indeed, it’s a mantra he lives by now – that one has to be visionary enough to look at future possibilities and enterprising enough to place a bet on them. The investments being made and their possible impact on profitability do raise the question of whether M&M will be able to raise its position even further on the B&E Power 100 next year. But from the perspective of Mahindra’s vision to be a larger player on the global platform and to have a strong play in green vehicles, the course correction is unavoidable.


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