Phil did his usual, incredible job of helping great athletes focus and perform. He did it for Michael Jordan and he’s done it for Kobe. Congrats on #10.

Orlando put up a great fight. They played hard all the way through, but in the end just did not have the depth to beat the Lakers.

Pau showed how tough he really is, going up against Dwight Howard. He could not have faced a stronger challenger.

Kobe showed some amazing leadership. It is his time.

Goooooo Lakers. It’s celebration time.

Here’s my list.  I’ve ordered the list from the what may be the most obvious ideas to the not so obvious ideas.  Read to the end to find something you may not have thought about.

If you have another idea add it with a comment.  Or you can comment on these ideas.

1.  Sell your content

This seems like it should be the most obvious idea of all.  Make content, sell content.  The execution however may be somewhat more difficult.  The easiest way to do this is to put your content onto CDs or DVDs and sell them on your site, like Ask A Ninja and Will It Blend.

Another way is to sell some or all of your content via a subscription basis.  This can be accomplished by making members only sections of a website or using a service like PremiumCast.  If you want a members only section to a website, there are ways to do it using Wordpress, or you can use a forum or a membership website from someone like Wild Apricot.

NOTE: If someone buys something, get them to sign up for your mailing list so they can get your PodZine Newsletter.  Don’t have a list?  START NOW.  DO NOT WAIT. DO NOT PASS GO.  GO DIRECTLY TO START A MAILING LIST.  IT COULD BE YOUR MOST VALUABLE ASSET.   Ok, enough screaming about getting a list.  I use Aweber.  It’s inexpensive, easy and works great.

2.  Donations

Think NPR.  Think Public Television.  Ask people to donate money or buy you things from an Amazon Wish List.  Both of these ideas are easy to execute.  You can get donation button code from Paypal and Amazon Wish Lists are really easy to make an publish.  Here’s my Wish List.

And if you want to make a donation to Digital Podcast you can do so using my PayPal Donation Button.

If someone donates, give them a free subscription to your PodZine with some bonus, like a personal thank you picture or some other creative thing.  See mailing list comment in idea number 1.

3.  Run ads within your podcast

Another obvious idea.  But you have to sell some ads.  Bummer.  This is often where this becomes a problem for podcasters.  Selling ads is hard work.  There are some Podcast ad networks you can join, although I have no idea how much they pay.  If this is for you try here or here or here.

If you want to run ads, but don’t want to sell ads or use an ad network stay tuned, because the last two ideas on the list may be what you need.

Make sure you have an ad in your podcast with instructions on how to sign up for your free PodZine subscription. See mailing list comment in idea number 1.

4.  Promote a sponsor within your podcast

This is one of my favorites.  Leo Laporte does a great job of this.  He has some deal with Audible and promotes a book each week. I have seen presentations where people behind Grape Radio and Endurance Radio talked about selling sponsorships for decent amounts of money.  To execute this, find someone who would really benefit from some exposure and sell them on how great it would be to promote them to your audience.

Give people who sign up for you free PodZine some bonus from your sponsor as another way to promote your sponsor.  See mailing list comment in idea number 1.

5.  Run ads on your webpage and use your podcast to drive traffic

This should be easy to do, if you don’t mind low CPM rates.  Adsense and Yahoo Publisher are worth trying.  Other Adsense like programs include Adbrite and Adengage. You can also set these up as a way to sell ads on your site.  Adbrite and Adengage will also work with explicit content.  Just be careful not to run Adsense on the same page as something similar.  That’s against the Google rules.

Chitka is another option.  They run ads on your site with specific products within categories.

There are also online ad networks that have lots of banners you can run.  Adsense can be set up just to run banners and you can find lots of other banner ad networks such as ValueClick and ClickHype out there.  CPM rates tend to be very low however.

If you want higher CPMs, you will have to get busy selling your own ads or get creative in creating your own high paying ads which I will explore in the last two ideas on the list.

Don’t forget to advertise your PodZine on your webpage. See mailing list comment in idea number 1.

6.  Sell your own product

Maybe you make blenders or some other widget.  Use your podcast to sell your widget.  Don’t make a widget?  Make and sell an ebook that would appeal to your audience.  You can also set up affiliates to sell your ebook using something lick Clickbank.

If you want to sell your own T-shirts, cups etc. get a CafePress store.

Or maybe even sell a premium version of your PodZine with special content. See mailing list comment in idea number 1.

7.  Sell Professional Services

If you don’t make stuff, you can sell time.  Not very scalable if it’s just you, but depending on what you do you may be able to make good money.

Create a contest for people who sign up for your podzine subscription.  Winner gets 30 minutes on the phone with you.  Or some such thing.

8.  Sell Training

Training is another great way to make money selling time.  If you don’t know how to build a training course, then take a course about building a paid membership training site.  If you are looking for some help in making an online course or a information product Bill Myers Online is a good resource for developing online products.

Promote a 30 minute training session contest for people who sign up for your PodZine.

9.  Affliate Sales

This is where things get really interesting.  You don’t have to sell you own products, services, ads, ebooks or time.

You can make money selling other people’s products, services,  ebooks or time.  You can find an affiliate program for selling just about everything.

An affiliate program is where you make a commission or a fixed payment when someone buys something that you linked them to. If it can be sold, you can probably find an affiliate program for it.

For example, here’s an affiliate link to a book, a record, and a microphone.  You can even use these tools to build yourself an online store for you site.

I’m working on a page with affiliate sales links that would work for different podcast categories. I will post it when I’m done.

Even better, if you don’t want to sell ads, you can run ads on your podcast or website to promote your affliate store or the products you are selling via the affiliate program.  This way you have sales cost, you control the ads, you control the presentation and you get the full commission.

Good affiliate programs to check out for products are Commission Junction, Amazon, and  ShareASale.   There are lots more if you look around.

You can also sell ebooks if you want.  ClickBank is the king of ebook sales.  Just be careful in there as they also have a lot dubious quality products.  I’ve found I have to buy the product first to make sure it’s not bogus or some consumer rip off.

Many companies also have their own affiliate programs.  You can usually find a link to the program at the bottom of websites if they have a program, although sometimes you have to ask via an email.  If there is something you think you can sell, get in contact with the maker and cut a deal.  For example, I wanted a sound effects package for podcasters and got the link by asking.

Don’t forget to tell your PodZine subscribers about the great products you’re now selling.

10.  Affliate Lead Generation

Selling stuff can be hard.  The good news is you don’t have to sell to get paid.  You can get paid for just providing a lead.  There are tons of programs that pay you for providing traffic that turns into leads.  Some are great, while others can be a bit dubious so beware.

What kinds of leads can you make money on? If a lead is worth something to someone, you can probably find a way to get paid for providing it.

For example, here are lead generation programs for

• Controlling diabetes
• Controlling sleep apnea
• Selling timeshares
• 1 Cent Business Cards
• Free gift cards from Walmart, etc
• and the list goes on and on.

Some of these,like the control diabetes offer, are really good offers for consumers , others are not so clearly good for consumers. For example, the free gift card offers harvest lots of info and funnel the consumer into a lead generation process which sends them off to some other affliate program without ever giving the consumer a gift card.  So be careful with what you recommend.  My recommendation is to only recommend what you would use and what your audience will find truly valuable.

I’m also working on a page with affiliate lead generation links that would work for different podcast categories. I will post it when I’m done.

If you are interested in this kind of program, here are links to programs to lead generation programs I’ve used:

• MaxBounty, RevenueLoop, Advaliant, and you can Google for many more.  By the way, those are affiliate links too.

Bonus: Mine Your Podzine

If done correctly, your PodZine list could turn into one of your biggest assets.  First, you get a direct channel to your audience in addition to your podcast.  Second, unlike your podcast, your PodZine can carry links.  Links to the products and services you recommend.  If you like something, make it a habit to tell your audience - put it in your PodZine.  Be sure to check to see if there’s an affiliate program for it, because then you will get paid to promote stuff you like.  I suggest only promoting stuff you really like.  It’s more fun, more genuine and probably works better over the long haul.

And some programs are email only.  For example, there is a free business card campaign that pays our $12 per lead, but is email only.  This is something that might fit nicely on a business oriented podcast’s PodZine.

If you need help setting up your PodZine, I recommend Aweber.  If you want an alternative, I’ve also seen people use Constant Contact, but have not tried it myself.

Let me know what you think.  Which of these pays your bills?  Got other ideas.  Post a comment and let me know.

Get laid off, no tax deduction for you.  You pay taxes on your health insurance bill.

Work for yourself.   You pay taxes on your health insurance bill.

To me, this is one of the biggest problems with our health care system.

It makes people captive to working for big companies and captive to the health care plans the company decides on.

It means the unemployed and the entrepreneurs pay much more for health insurance.

The current system is bad policy, bad for business, bad for personal choice and totally BS.

The American Medical Association is asking people to tell their representatives to change this bad policy.

I’ve read their proposal and it seems good.

Tell the bozos in Washington to fix it.  I did and I hope you will too.

Here’s a short cut http://ta.gg/2v9

Alex

If you want health care fixed, pass it on.

1. The strong financial performance of the game industry continues despite the bad economy
2. The rise of free to play - see FreeRealms.com as an example
3. The power of virtual currency, goods, commerce to monetize play and turn communities into economies (Got to wonder when will Facebook and Myspace figure this out?)
4. Apple doubled the mobile games market almost overnight
5. Phones will become one of the interfaces for games
6. Mobile applications are emerging as a new ad unit
7. The mobile game/iPhone application market is creating a huge merchandising problem
8. Integration of games/real world - See Nolan Bushnell
9. Rise of electronic Distribution - Steam
10. Emergence of cloud based distribution - Onlive

Some memorable quotes from Ashton:

I found it astonishing that one person can have as big a voice as an entire media company on Twitter.

In response to being invited to talk about it on the Larry King Show,

This is a message to Larry. Why don’t you come on my Qik show? We’ll put it on Twitter and then maybe we’ll get Ted Turner to call. Let’s do it on the internet. This is a saga for the internet. See, I love how CNN wants we to come on their program and promote their thing which only gets them more views.

If you’re an author, info marketer or publisher and your sick and tired of producing events or content that only a few people consume and you would like to make more money podcasting, then you should learn about Podcast Secrets.  Podcast Secrets is a system for monetizing podcasts developed by Paul Colligan and Alex Mandossian.

Paul Colligan and Alex Mandossian have taken the Podcast concept to new heights because their new and improved system for Podcast Monetization lets you connect directly with your readers and audiences with nothing more than a telephone in your hand!

To introduce Podcast Secrets, Paul and Alex are having a special teleseminar, where they will be covering

• The 8 reasons why Podcasting brings them, and can bring you, a critical business (and profit) advantage.
• 7 secrets to producing profitable Podcasting content in the fastest possible time.
• 9 marketing channels for the Podcasters … and how to leverage each one.
• The 6-Step Podcast Monetization Roadmap
• How to part-the-curtain on the listening habits of your audience, and leverage that knowledge to produce profitable audience action.
• At least 5 things, you can implement today that will integrate your Podcast content into your business structure … and how to see results almost instantly.
• 7 steps to getting your Podcast audience to take the very actions you want them to take.

The guys were kind enough to provide me with a discount code that will save you $79.

Sign up quick - the call is Thursday, April 9, 2009 @ 6p Pacific / 9p Eastern

You can still get the recording of the call at the link below.

Click here now to register for the teleseminar.

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(Saves you $79 from the normal $99 tuition)

Click Here to See the Full Podcast Secrets Class

How is the business different today?

When Kevin started at NBC in 1988, he started to see articles being written about how network TV was a dinosaur. The articles we see today are similar. The death of TV is greatly exaggerated. Back then you could see that cable would grow and network TV would lose share to cable.

There was no discussion of how the business model would change back then. TV was the greatest advertising mechanism every invented. While the media mix will change, there is so much information coming out now that people actually miss ads when they get pulled out of shows. People want to know about products and ads play a useful role.

People will declare TV dead. While there is no turning back the clock, there will be TV networks in the future.

What are the fundamentals that will always apply?

Kevin says he’s really shocked to see how much sometimes nobody knows anything.

We can’t make declarations about what will work and what won’t. He tells the story of how everybody passed on the Sopranos, how Law & Order was not seen as the great show and the same thing applies to the media and the business model. There is massive change going on, but when people declare something to be the “way things will be” it’s more often wrong. He says the one constant is quality content.

If we were at this conference 2 years ago everybody would be saying long form video won’t work on the web. Now, we see it as one of the leading drivers of video on the web.

Where are you on UGC?

We all love a polished production, but great entertainment can be some 5 minutes of truly entertaining content. He’s all for it if we can make a living with it.

What experiments have worked and what haven’t?

This is not like trying to re-tool the auto industry. He says the media business is very responsive. It’s all about the risk takers. He points to Rupert Murdoch as someone who has challenged the status quo and its one of the traits of News Corp.

Talk about year round development

The more things stay the same, the more they stay the same. The old network model was a license to print money. The cycle worked. It wasn’t very efficient. Peaks and valleys in work were huge.

It seemed to outlive it’s usefulness, but people kept doing it. When we came out to the strike, it seemed like an opportunity to move to a year round basis. It’s a risk, but it creates opportunity to use highly viewed shows at the end of their season to promote new shows.

Talk about the Remote Free TV idea.

The idea is an experiment. Last year they were setting the schedule and they decided they needed to do something different. They had been stuffing more and more commercials into shows. Advertisers had come to view the commercial load as clutter. They decided to cut the ads in half and charge twice as much per ad. Fringe was the first experiment. It was really received well by the audience. The rub was that the advertisers who would pay the premium were few in number.

Not sure whether this will be the model for the future, but it may be the way to go. (My note: he should read the Innovators Dilemma. TV is in segment retreat to the high end. Higher quality ads at higher prices. Same move as the steel industry etc. Worth reading if you care about this stuff.)

What about the relationship with Cable Networks.

We are at a saturation point with cable. People have 118 networks and watch 16. It’s no longer good to add more networks. They are negotiating with cable networks to take cash for their network broadcasts, but it may mean a reduction in the number of cable networks that companies like Fox have.

When things are available online via Hulu, how does that change the relationship with cable companies?

We have to create legitimate models before illegitimate ones pop up, like they did in music industry. Fox makes high end content which need 10 minutes of premium advertising to support. When people watch 24 on Hulu we make less money. How we balance this is important. Windowing might help this. Cable companies have a 7 day delay before it goes online. It’s just one of many challenges we are dealing with.

For example, the way we finance these shows has changed as well. It used to be getting to re-run syndication. That market has seriously contracted. We need to figure out new revenue models.

What’s popped culture?

Pop culture and mass media had a symbiotic relationship. It was a great robust time for media. Now we’re living in the era of Moore’s law. Everything is moving much faster. Managing the relationship with pop culture is challenging when things are moving so fast. Media is not moving in lock step with pop culture. It’s the beginning of a really big transition. Even in a forest fire, there is rebirth after the fire.

Why is a successful producer even dealing with the Internet?

Stan says he has a son who was just not watching TV. He says his son asked him about CSI which he saw on YouTube. His son’s generation just doesn’t know about networks.

The Internet is just growing and growing.

What does it take to make a successful show on the internet?

Principally, it starts with a simple thing - a great idea that the audience will embrace. If you don’t have that nothing else matters, no matter what channel of distribution you use.

The difficulty of making a 3 minute episode with a beginning, middle and an end, with a cliff hanger to bring people back is very hard. Some writers figure that out, some don’t. It’s very challenging to make that short format work.

The other thing that is becoming very important is the social networks into account. They are different and they will evolve into places where different type of entertainment will migrate to different places.

The challenge is to stay ahead of the curve. It changes always.

One of Stan’s partners spent two years working on games. They see the game aspects of the core piece of entertainment is important and growing in importance.

How did you get Rosario to do the show?

One of the writers of Afterworld is a friend of hers. She did one of the voices on Afterglow and it turns out she’s a sci-fi fan. We asked if we could do something with her and she said yes. Finding an artist that thinks the internet is cool and wants to be there, is what it takes.

Where’s the money?

Gemini Division has different model. They are using product integration with 5 different brands that are very organic. Microsoft, Intel, Cisco, UPS. They talked to the brands to find what was really cool about their stuff. They then could integrate the product features into the show.

The show starts with Rosario talking into the PDA, they had her talking into the Windows Mobile software. They created a new interface which was not the traditional Windows Mobile interface. Microsoft let them go ahead and it got really good reviews. Now waiting to see what Microsoft does with the interface.

They have not done pre-rolls - but they are open to experimenting. They believe there is more value in product integration, but traditional media buyers still want the things they know.

What about distribution?

Phase 1 was tied to NBC for the first 50 episodes. Phase 2 will be opened up to much wider distribution. There are lots of people who love the show now, but it can be opened up to many more people with wider distribution.

What can be learned from Quarterlife?

Internet entertainment is internet entertainment and TV entertainment is TV entertainment. They will re-cut the web version to make a DVD, but the TV version is a different thing as is a game version of the show.

Hulu has been a great consumer success. But it’s not clear how it plays out for the traditional distributors like cable and the content producers.

The traditional distributors are saying hold on, we’re paying to distribute this content and you are giving it away for free online.

The content producers are used to the TV load of advertising revenues which is much higher than the ad load at Hulu. We may not be talking about trading analog dollars for digital pennies, but it may be analog dollars for digital dimes.

If the cost per thousand impressions doesn’t change, it’s a hard to see how things progress quickly. It just doesn’t make economic sense for Madison Avenue.

One of the things that technology allows to do is to target ads much more effectively, which may be a way to increase the digital revenue without the same advertising load. There is some certainty that advertising will remain a major component of the revenue model.

There’s a tendency to lump music, TV and movies into an entertainment bucket. Movies have two primary sources of revenue. Renting a night at the movies which represent about 30% of revenues and then the sales of DVDs and the like representing the bulk of the revenue.

Cloud computing based movie distribution will begin to substitute for DVD’s as rental on demand grows. For example, while DVD sales may be down 30%, Xbox video on demand revenues have roughly doubled.

Looking at TV, before DVRs, TV viewers would watch about 2 out of 4 episodes of shows. With DVRs, that number has increased to the average viewer watching 3 out of 4 episodes. Cloud based access could play a role in further increasing the viewing ratio.

Is the next step the Netflix subscription model? Fewer and fewer movies are being distributed via the ad supported model. The Netflix model is not new. HBO has been around for a long time and is the premier movie channel. Netflix is a different time window than HBO. It’s offering access to the library. One in ten Netflix subscribers use the Xbox Live service to access movies to consume billions of minutes of media.

The two models that seem to make the most sense are subscription and ad supported distribution.

What’s been the impact on the rental market? The VOD market should see strong growth. The average consumer only watches a movie a couple of times which makes rental a sensible alternative.

However, the switch to online will take longer than people expect. It won’t be one model for everyone.

Westlake looks at the audience and see different segments. The older audiences will be stay wedded to the traditional channels. The younger generation will be different. Just like they prefer cell phones, they will be looking at it with a very different set of eyes. They will drive the change.

The bottom line - the internet has caught up with TV for entertainment use. TV viewing is down by about 2 hours from last year, with most of the increase being in watching online video.

The interesting thing is that there is lots of data to suggest that TV and Internet media reinforce each other. Much of the online activity revolves around catching up with what’s going on with TV shows. Watching shows you missed is a highly popular use of online video.

There appears to be a future for TV, but one quite different from that of the past. TV won’t be the single dominant entertainment channel. It’s going to have to share prime time with the Internet.

You can follow what’s going on via Twitter search.  Just search for #FOTV.

UPDATE:

# Mike Vorhaus (Magid Advisors) Presentation:
Nielsen versus Consumers - They Say Canabilization Happening
# Seth Geiger (SmithGeiger) Presentation:
Digital Media Trends and the Future of Television

The post is an interview with MizFit Online who’s a fitness blogger. Reading the post however did not get me too far, other than MizFit’s avid blog reading and commenting herself and a key phrase “commentversation” which tried to capture her approach. Even MizFit seems unsure of what drives the comments saying “If only I knew. It varies wildly.”

I wanted to know more and decided to do some real analysis on MizFit’s blog. It seems like a great blog. True to her personality. Quite personal. And it seems she’s got a strong following. She also has a theme/category of the day: Monday Faceday, Tuesday Trends, View Mail Food, Glorious Food and Link Love.

I started by looking at every post she made in November. I looked at the title of the post, the theme, the length of the post, text vs. video, the number of outbound links in the post and the number of links to other pages on the blog.

The only thing that seemed to matter was whether the blog post was part of a theme. Uncategorized posts did very poorly incomparison. Post length, other than extremely short posts, had no impact. Number of links had no impact either. Video performed as well as text.

I decided to dig in further. I took the last 10 posts for each theme and for uncategorized posts (note: I screened out the uncategorized posts that were very short announcements).

Here are the results of the analysis of the last 10 posts by theme/catagory:

The results are facinating, at least to me.  If you factor out contests, four of the themes average about 100 comments per post.  Food Glorious Food does a little less well averaging 89.6 comments per post, which may be due to a heavier reliance on guest posts in this theme.

The pattern I saw with the uncategorized posts held true.  These types of posts only averaged 48.4 comments per post.

Contests also play a big role in making the numbers fluctuate.  They seem to add about 45 extra comments to a post on average.  More when the contest was enticing and less when it was not so enticing.

I dug further into the best performing and worst performing non-contest posts to see if I could find some other qualitative reasons for the variances. Indeed there seemed to be more going on qualitatitively.

When I looked deeper at the strongest performing posts based upon comments, I saw that these posts tended to stand out for one or more of the following reasons: Challenges, very personal stories, strenuous exercise video, or lots of questions (3-5) to audience at the end of the post.

In contrast the poorest performing posts were missing these elements.  The poorest performing posts where guest posts without questions to the readers. These posts dropped to 66-79 comments.  Guest posts with questions did a little better running in the mid 80s.  MizFit’s poorest performers in themed posts tended not to have as much passion and had no questions for the audience.

My take aways if you want to generate comments:

• Be personal
• Be passionate
• Post questions not answers
• Set up themes by day and be consistent
• Make sure guest posters have lots of questions for readers
• Use small contests to motivate your commentors

So what do you think?  What kind of posts get people to comment?  Is it this list or some other factors?  Who else gets lots of comments and what do they do?

Comment away:)

Update with ideas from comments about what drives comments:

• commentversation
• taking the time to personally respond to comments

podcasting
A very new word, for a recent phenomenon, and a great example of how technological change, especially that relating to the Internet and the media, can be a driving force not only in generating new words, but in determining whether they survive and succeed. In this case the rapid adoption of podcasting (the technology) as a means of making audio material available has seen podcasting (the word) move quickly from its first tentative steps in 2004, as only one of a number of suggested names for the process, to near-ubiquity in 2008. The current OED quarterly release also includes other members of the same family: podcast as a noun and a verb, podcaster, and even the somewhat ungainly adjective podcasted.

Michael Geoghegan pointed to the provenance of the word, which dates back to a post by Dannie Gregoire in Yahoo group ipodder-dev in September of 2004.  Here’s the post with bolding added:

I can see there being the desire of users in some instances to be able
to easily subscribe and get older posts/episodes/shows (what are we
calling these things anyway? How about pode or sode for short?) that no longer
appear on the rss feed. Right now if for example someone wanted to listen to
all the Daily Source Codes back to sode #1, they would have to manually
go through the archives and download any sodes not automagically received,
somewhat defeating the purpose of an ipodder. Not too much of a problem
now but…

I guess one could argue that this is simply an rss/server side issue, and that
the “podcaster” (yes, I like making up new words) should be responsible enough
to offer a page of seperate feeds of old sodes by month/year/season/etc.
However, if you have a site with many thousands of sodes this could be very
time consuming and awkward means of getting older content, with no standard
means of organization between different sites. In addition listing gobs
of old contnet could produce a tremendous load on the download servers
getting everything in large batches or all at once.

So first, do we need a more standard means of storing/retrieving older
content?

Second, how to limit the amount of data fed to the user at a time and
prevent server overloading? Is the communication with iTunes two way?
Is there a means of seeing which shows have been listend to by the user?
Perhaps give the user the option of starting where ever in the show’s
history they like then only download x number of hours at a time till
they clean their plate. Then, let them come back for another helping?

–dannie

The site has been quite successful recruiting members and now has 2 million users.

Tom and I had a great conversation about Gather and what they are doing to make the site a success.  I was especially intrigued by their use of social campaigns as a way to monetize the social network.  In these campaigns, users are recruited to try products and then write about them.  Tom describes how that leads other people in the network to also get involved, try the product and write about it.  It’s an interesting idea that looks like it could be adopted by other people who have built communities.

This is an example of one more great way to turn a community into an economy.

Let us know what you think.

The Seven Trends of the Current Economic Storm

1. Recognition by everyone that this is a severe economic crisis.
   We are experiencing a massive economic disruption. The mortgage meltdown, the credit default swap market meltdown, and the freezing of the commercial credit markets are causing massive turmoil in the financial markets. It’s driving a self reinforcing cycle of fear and chaos. Jobs are being cut, consumer credit is maxing out, foreclosures are accelerating, pension plans devastated. This is a bad, bad, bad situation and people everywhere are going to know and feel its impact.
2. Consumers will/have started making cost cutting a priority.
   We will be buying Mac and Cheese from Wal-Mart, instead of eating out. Discretionary cash will be in very short supply. They will spend even more time looking for bargains.
3. Demand has stalled for high end purchases by the mass market.
   The auto market is down by 30+%. That’s a huge drop. I was speaking with someone from a major car company earlier this week and he described how $10 billion in revenue just disappeared. Factories that were working hard are coming to a screeching halt. This will mean even more job loss and consumer distress.
4. Businesses are making cost reduction an urgent priority.
   Layoffs are beginning to gain momentum and will continue. Discretionary projects will be put on hold. The cost pressure will be so severe that we will see some radical, but very disruptive innovation.
5. Businesses will slow/put the brakes on capital spending and payables.
   Hording cash will be a key to survival. Businesses will react by slowing and cutting the spending on capital projects, and like consumers they will stretch out their payables as long as possible.
6. People and organizations with cash to invest will buy distressed assets at bargain prices
   Just look at Warren Buffet and his actions recently. He knows that when times are bad, it’s time to get greedy. There will be lots of cash strapped asset owners desperate enough to cut really attractive deals for investors. This will shift money from investment in new growth opportunities to investment in cash producing assets. This is really bad for start ups and anyone who needs venture capital. There will be very little money going to new things in the next 12 months.
7. The government reaction will increase substantially
   The problems we are facing will require even more government action.  There will be increased government deficit spending, cuts to interest rates, stimulus checks to the mass market, big government infrastructure projects and maybe even broad tax cuts. Given the current political trends, friends of Democrats (unions, trial lawyers, Hollywood, etc) are likely see more money coming their way and friends of Republicans (oil, pharma, Halliburton, etc) are likely to be punished as being the bad guys. As the government settles down, they will start putting in incentives to get businesses to invest and spend cash. 

Some preliminary thoughts on what this means

I think that these trends will definitely sway the financial rebound of different companies.

It is clear to me that delays and cut backs in discretionary, high end purchases are bad for the auto, consumer electronics, consumer durables, restaurants and other sectors that depend on these types of purchases. It is time to stay away from this stuff until consumers catch their breath and start feeling some job/financial security.

Companies that can help us cut costs, work out our debt, shop more effectively and help us get credit should be advantaged in this market. Experian looks like a company that should be able to take advantage of this. This is also an attractive potential area for social networking and media to the extent it can help people work out their problems together.

Companies that offer the ability to get results at much lower costs will rebound much more quickly. For example, the extraordinary cost effectiveness of search and online advertising will accelerate the share shift from offline to online. We may not see huge growth online, but offline advertising will get hammered, especially given the importance of the financial and automotive industries to ad spending. Stay away from offline publishers. On the flip side, this makes Google look more interesting and maybe even Yahoo.

This need for much lower costs will also accelerate share shift from costly physical channels to internet based channels.  This may be good for eBay and Amazon, but I’m interested in finding companies that are earlier in the process.  I’m not sure who to look at here.

Given the extraordinary cost cutting we will see in businesses, they will need ways to keep their businesses running with many fewer employees. This is probably good for effective productivity tools and outsource service providers. I think this is particualarly good for collaborative communication tools that really work, like Go To Meeting.  Companies that have cash will spend it very strategically and if you can get in front of  that trend it could be a good thing.

If you have cash to invest, it also makes sense to keep some dry powder waiting for opportunistic investment opportunities in distressed assets.

On the government front, it’s less clear to me which investment opportunities are worth exploring. I need to see the outcome of the election to really know who the winners and losers will be. I think I’m going to take a look at donations to each party to see who looks interesting.

Lastly, for those of you looking for venture capital, it is going to be a serious dry spell. It is time to hunker down hard.

My caveat on all this is that I’m not a stock picker. I think good investments are as much about buying at the right valuation as they are about picking the right areas. I have no perspective on whether or not the companies I’ve talked about have attractive valuations or not. At the time I write this, I don’t own stock in any of the companies I’ve written about, but that may change by the end of the day.

I would love to hear you’re thoughts on other major trends that are in play right now and what it all means. Leave a comment.

On the positive side, their internet revenues grew 6.7% to reach $87 million.  The bad news, however, is the continued plunge in print advertising which was down by 15.9%.  The net result is that overall revenues dropped by 8.9% to $687 million.  They have cut costs by 6.7%, but the death spiral continues.

According to Henry Blodget of Silicon Alley Insider they only have $46 million in cash left.

At the end of the quarter, cash and cash equivalents were approximately $46 million and total debt was approximately $1.1 billion. The Company’s current source of short-term funding is its revolving credit agreements under which it had approximately $398 million in borrowings outstanding at the end of the quarter.

So what should they do?  A reporter from ZDNet suggests that they should talk to Yahoo, which might be interesting way for Yahoo to tank further.  No, I don’t think that’s the way to go.

What the NY Times needs to do is to start thinking about radical innovation.  They need to think so completely differently about their business that they may not be able to do it.

They need to start thinking about how they increase their productivity by 50 to 100 times (note: not percent, but a multiple of 50 to 100 times their current output with the same cost structure).   At the same time, they need to be thinking about how they increase their exposure by the same multiple of  50 to 100x.  They need to be thinking about how they become a news gathering and distribution platform for the web.  They can’t do it alone, but if they embrace their audience and open their content they might have a chance.  It will take radical innovation, but that’s what they need.

Some months ago Mr. Calacanis decided to stop blogging and communicate with his readers through an email newsletter.  The newsletter has grown to many thousands of followers.He has written about the impact of the financial crisis on startups and done a good job telling it like it is.His most recent email went into deep detail about the cuts he has made at his own company, the logic behind it and how he dealt with the situation.

I think he was right to make the cuts he did, as painful as they have been.  It is his responsibility to make those decisions and I know from first hand experience how hard those decisions and actions can be, but given the economic conditions every company should be taking similar actions.

While the content of his email is strategically correct, his style comes across as finding humor in the darkness of the situation which makes the email tough to swallow for anyone who has been hit by the swift turn in the market.  This makes it naturally link bait for the technology bloggers.
Mr. Calacanis has made it a point to make his entire life a marketing tool for his companies and rarely misses an opportunity to market himself or his company. In this case, he managed to turn layoffs into a personal and maybe a company marketing tool.

While he clearly stated his wishes that his email not be republished, it was ok to forward it on to others.  Mr. Calacanis is clearly a sophisticated blogger who knows that republishing his words would be irresistible to the blogger community. The result would be a huge kerfuffle not only over the content of his email, but his rights to protect his content in this way.  And so, it has been republished here, here and here along with others with an explosion of comment and links.

He has managed to turn the layoffs in his company into a big discussion on the web, and that means more links to Mahalo and more marketing for Mr. Calacanis. It means he has exchanged the layoffs in his business for the currency of the web, links. More links equals more page rank and that means better search engine optimization. I never thought that someone could turn this downturn into link juice, but Mr. Calacanis seems to have made that work, either though Machiavellian insight or through some less devious intentions.

I don’t know Mr. Calacanis, but have heard him speak his mind many times.  He is not a shy man and he is very, very good at promotion. I have agreed with his points much more often than I have disagreed. I think he is a smart, aggressive make money kind of guy who is good at building $50 to $100 million companies.

Sending out the email reflects his very nature. It’s the problem or perhaps the insight of his email. He found a way to turn the bad stuff into a marketing opportunity.

So what do you say?  Did Mr. Calacanis do a good job of making lemonade out of lemons, or did he overstep the bounds of decency?

BTW.  I can’t but find the irony in the company’s tagline “We’re here to help”

I thought the web page loaded incorrectly, so I reloaded. Still nothing. Then the light bulb went off. I tried “$200,000-$250,000″, clicked “CALCULATE NOW”, and instantly I was saving $800.

Yes, the site is called “Obama Taxcut”, but when my taxes are going up, is it honest to pretend to malfunction?

I know that my taxes will increase if Obama wins, but personally, I’d prefer to find out how much and receive a thank you for my prospective support than to be ignored.

What do you think? Is this a legitimate website design or a liability for the Obama campaign?

ADDENDUM:
Thanks for your comment, DM. I rechecked and sure enough, the Obama site is working and returns “You probably won’t receive a tax cut under Obama.” So perhaps the site wasn’t working when I checked, or perhaps I was not sufficiently observant. Either way, Barack still gets my vote.

I was impressed by their use of social media. It’s good to see social media doing some good things for the world. She sent me a link to their social media news release that was chock full of ways to learn about the project.

In short the project goal is saving the lives of malnourished children.  And they need your vote to help them increase the amount of funding they can get for the project.

“Saving the Lives of Malnourished Children” is now guaranteed a share of $2.5 million in prize money. The project with the most votes receives $1.5 million, 2nd receives $500,000, 3rd $300,000, and 4th and 5th $100,000. The funding – made possible by your votes – would bring a vital lifeline to hungry and malnourished children around the world.

But we need your help between now and October 13. Voting is easy and doesn’t cost a thing! In just a click, you can save the lives of thousands of malnourished children. Click here to vote:

For severely malnourished children, we offer a step-by-step treatment program that gives them what they need to recover, including nutrient-dense food supplements like the peanut-based product, Plumpy’Nut. Our comprehensive monitoring system saves more than 90 percent of children being treated in our feeding centers. Being one of the Top 5 would mean our nutrition could reach more children around the world who need our help.

Save Some Kids — Vote Now

Time is short - so Vote NOW!

This is a great example of how social media can be used to increase awareness and do good in the world. These kids need our help, so GO VOTE NOW.

The problem is that the hedge funds are both buying and selling this stuff, making money on the spread between what they can buy it for and what they can sell it for. To make the spread bigger, they buy insurance on a company’s debt, then short sell the stock to put the debt in danger, and then sell insurance at a higher price to cover the their position. Making boatloads of money in the process.

Add leverage and we now have a mountain of “fake debt” that inflates the debt market from a real debt market of about $10 trillion to a leveraged debt market of $55 trillion, which basically means that there is something like $45 trillion of this fake debt where the collateral is an insurance policy on some other piece of debt.

This is a money making machine, until the daisy chain breaks somewhere and they have to unwind their positions. That creates huge requirements for cash throughout the system at a time when no one wants to lend cash. That means more players go belly up and amplify the problem.

This is a long podcast, but if you want to understand why the market is crashing, why you can’t get credit and why the government was panicked enough to do the bailout you should listen to this.