Ready, Fire, Aim! - Mihail's Public Blog

Online sales and discounts are getting harder to find this holiday season but some are still there if you look carefully according to this New York Times story (registration required):

According to an annual survey that Lehman Brothers conducted in August, prices for merchandise sold online rose 6 percent this year, compared with an increase of 0.8 percent last year. Prices were essentially unchanged for merchandise sold in brick-and-mortar stores. The survey, which has been conducted since 1999, compares prices at online sites, including shipping charges, with prices at traditional stores in New York City. It looks at more than 100 products, from toothpaste to videocassette recorders.

...Over the three-day Thanksgiving shopping weekend, consumers spent $453.4 million online, excluding spending on travel, a 67 percent gain over the period last year, according to a report by comScore Media Metrix, which measures buying from a cross section of 1.5 million Internet users. E-commerce continued to gather momentum on the Monday after Thanksgiving, with sales totaling $231.5 million, up 37 percent from the corresponding day last year. "Black Monday," as that day is known in the retail industry, is the busiest online shopping day of the year, because it is the first day back at work, where many people do their online buying.

Dell is thriving in Japan via its website sales, and has rapidly risen to the #5 position (overtaking IBM recently) with 7.7% of the $20 billion Japanese computer market, according to this New York Times story (registration required). While overall sales of PCs fell for the first time last year, Dell's profit grew 31% in the 3rd Quarter -- part of the reason was its strong performance in Asia where Dell sales will surpass Europe by 2003.

It was perhaps the biggest non-event in the history of Dell Computer. Hiroshi Hamada, the head of Dell's consumer computer sales unit in Japan, designed a Web site to supplement the company's fledgling telephone sales here. It was 1997, after all, and the Internet was fast becoming a viable sales channel in the United States.

...To almost everyone's surprise, Mr. Hamada's little project turned into a tsunami. With little advertising, 35 people ordered computers the first day, three times more than he had expected. In six months, customers were buying $500,000 of equipment a day on the site. Today, Dell books 80 percent of its consumer sales in Japan online, the highest rate of any country in which it operates.

Madonna's husband Guy Ritchie showed up in a velour track suit coupled with nice shoes (in what is called  "athleisure" -- the mixing of athletic wear with better separates) at the premiere of Swept Away, a good indication of how hip this material has become these days according to this New York Times story (registration required):

Velour -- whose name derives from the Latin word villus, for "shaggy hair" -- is a closely woven or knit fabric whose fibers and fluffy pile distinguish it from velvet and velveteen. It traces back as far as 18th century French royalty. Napoleon favored a gold-studded velour robe. It leapt into the 20th century as a staple of the "Star Trek" cast, as well as performers such as Elvis Presley and Andy Gibb. In the '70s, athletic companies such as Adidas brought it to the masses, causing some folks to disdain its main style, the jogging suit, as tacky disco leisurewear.

Velour's current revival sprang from urban precincts, as hip-hop lines such as Phat Farm and Fubu took to dressing rotund rappers in baggy velour pants and long, loose tunics. The fabric's insouciant drape made it easy to move and dance in. Its distinctive sheen played well both to the camera and club lights.

While Asian countries like Hong Kong and South Korea have over half the population already using broadband, only 15 percent of American households subscribe to broadband service (out of a potential 70 percent of households that could potentially subscribe at this point) according to this New York Times story (registration required).

Even though the number of subscribers rose 50% over the last year, that rate of increase will continue to slow since only the richer households feel they can afford broadband (about twice the cost of regular dial-up) in the face of few killer applications so far...even many technology-savvy Silicon Valley friends of mine refuse to make the switch because of the cost difference.

So far, a crucial limit on demand has been price. Whether provided by the telephone company or the cable company, broadband costs about $40 to $50 a month — too steep, evidently, for a large contingent of Internet users who are not convinced of the value of faster Web connections. And many, presumably, are deterred by horror stories of how difficult it can sometimes be to have broadband service installed.

...And so, only about one-third of households are expected to have broadband by the end of 2006, with the great majority of those subscribing to the service through cable modems and digital subscriber lines.

...Out of the estimated 16 million household broadband subscribers in this country, 10.6 million use cable modems and 5.1 million use D.S.L., according to the Yankee Group research firm. The others use one of various alternatives that include satellite service and so-called fixed-wireless service.

....More than 28 percent of households with income above $100,000 have broadband access, compared with only 4 percent of households with incomes below $35,000, according to a study by the Leichtman Research Group. The figures suggest that the price of broadband service must decline before it can become more widely available.

Overture wins won over Google by signing up CNN to an exclusive 3-year contract according to this Wall Street Journal story (subscription required):

By allowing advertisers to target customers using any word or phrase, these services -- Overture and closely held Google Inc. are the two best-known providers -- have allowed niche advertisers to find an audience on the Internet.

For next year, Overture has projected earnings per share between 90 cents and $1.05 on revenue between $875 million and $925 million for 2003. Last year, revenue totaled $288.1 million. Its advertisers paid an average of 34 cents per click in the third quarter, up from an average of 21 cents a year earlier.

With San Francisco being ground zero for the busted dotcom economy and thousands of former dotcome employees out of work (at least the ones that still live in the Bay Area and haven't fled back to where they came from), many businesses are providing a break according to this Wall Street Journal story (subscription required). In fact, I've even seen discounts on dentist's and massage appointments, and even therapy sessions!

During a visit to her gym last month, Jeanette Jones was pulled aside by a staffer who knew Ms. Jones was recently laid off from her investment-banking job. "Talk to the manager," the employee whispered to Ms. Jones. "There's a special rate for people like you."

...Indeed, thousands of laid-off white-collar workers are enjoying a yuppie brand of charity. In little acts of kindness, local fitness centers, yoga teachers, professional associations and many others are coming up with laid-off discounts so that the jobless can continue their favorite hobbies and activities.

As part of its announcements this week AOL is also now going to push AOL services as the front end to cobranded cable broadband services since DSL providers already have strong relationships with Yahoo and MSN according to this New York Times story (registration required)

In the first of those deals, with Comcast, AOL will price the bundled service at $55 a month, $6 less than the combined price of Comcast's broadband service and AOL's bring-your-own-access plan.

Still, that is about $10 a month more than other providers are charging. That premium is how AOL actually makes a profit on its broadband service when Earthlink loses money charging $42 to $50 a month.

According to this New York Times story (registration required) even Mary Meeker is unconvinced that the new plan outlined by the AOL management this week will do much to reignite growth, and that it may mean that AOL will have to drop its prices to reach the growing broadband market of which it has a very small share:

She wrote that management outlined the right plan — improve service, move customers to higher-speed broadband connections and create new revenue opportunities. But the plan, she said, was two years too late, and AOL may be so far behind that it may not catch up.

"We can't recall seeing a business in a dynamic/competitive consumer-oriented technology-related market with so much opportunity and such a powerful customer base and business model cede so much relative ground over a two-plus-year period and recover to sustainable growth," she wrote in a note to clients.

One sign of how far AOL is behind, Ms. Meeker said, was that in the third quarter the service added only a net 129,000 customers. That was fewer than the 269,000 subscribers added by MSN from Microsoft or the 141,000 added by the discount-price United Online, which operates Juno.

Lee Gomes is posting stories from Amman, Jordan for the Wall Street Journal, including this one about the holy month of Ramadan (subscription required) which is beginning to look more like a month-long New Year's Eve. He asks, "Isn't all this flouting the strictures of Islam?" In response, Hanna Sawalha, manager of the Ammon Hotel, says, "This is a business."

...in Westernized Middle Eastern cities such as this one, where many of the more urbane families have sent sons and daughters to universities in Europe and the U.S., Ramadan is beginning to look a lot like Christmas.

Stores sell electric Ramadan lights in the shape of an Islamic crescent moon. Many Muslims hang them in their windows, much as Christmas stars and Chanukah menorahs are displayed by Christians and Jews. In the affluent shopping districts of western Amman, winter wonderland-style strings of twinkling lights decorate the fronts of many shops. The local McDonald's restaurants have some of the most elaborate displays. There are Ramadan cards Muslims can send to wish one another "Ramadan kareem" or seasons greetings. In stores, special Ramadan posters extend holiday wishes to shoppers.

...This evolution of Ramadan shows how the Muslim world is far more complex than many Westerners appreciate. While large numbers of Muslims are rejecting the West and embracing an ultraconservative version of Islam, others are leading largely secular lives shaped by the same forces of globalization at work everywhere.

According to this New York Times story (registration required):

Already, Smith Barney, the investment banking firm, has paid $500,000 to settle a lawsuit brought by the family of a motorcyclist killed in Pennsylvania by one of its brokers who was talking on the phone while driving, according to a lawyer for the victim's family. But in Minnesota, where a psychiatric nurse reached for her cellphone while driving home and rammed another car, the jury concluded that answering the call was not part of her job.

According to this New York Times story (registration required):

AOL Time Warner yesterday presented a new strategy for its AOL division to compete for high-speed Internet users, acknowledging that the service that helped make the Internet a mass medium is now in danger of falling behind as consumers seek faster connections online.

AOL Time Warner said AOL was redirecting its efforts toward marketing an upgraded version of its high-speed service intended to take advantage of the elaborate multimedia potential of high-speed Internet connections, partly by offering music and videos from its sister companies. AOL said it would seek to persuade high-speed users to pay an additional monthly fee of about $15 for its service even after buying broadband access from another company for as much as $50 a month.

The latest reports on how online shopping is shaping up this year according to this New York Times story (registration required):

Although the online forecasts vary widely and some have not been revised, the main research firms that track Internet retail sales are all predicting double-digit percentage growth this holiday season. If even the most cautious numbers are borne out, this will be the biggest holiday period yet for online shopping, topping the $11.2 billion that Jupiter Research counted for the 2001 season.

Through the first three weeks of November, online sales of nontravel goods were $4.5 billion, up 29 percent from the comparable period last year, according to the Internet monitoring firm Nielsen/NetRatings. Another research firm, comScore Media Metrix, says that 9 million to 10 million people bought something online in November, up from about 7 million a year earlier

A New York Times story on the San Francisco Chronicle's mixed results in trying to create a world-class newspaper:

Hearst's takeover of The Chronicle coincided with the free fall of the Bay Area's economy, from which the region still has not recovered. The Chronicle does not release its advertising revenue, but help-wanted classified revenues — an important indicator of a newspaper's financial vitality — fell about $60 million, or 75 percent, from 2000 to 2002, Chronicle executives confirmed.

The trend that has reinvigorated the jeans business ($10.5 billion in size but a whopping 89% of jeans sold are at the sub-$50 price point) is that of replica vintage jeans (made to look worn or distressed and priced in the $100s, even $1000s) that started in the early 1990s with the Japanese beginning to seek out used older jeans according to this New York Times story (registration required):

The ''discovery'' of jeans as antiques required a society that could aestheticize the ordinary. ''The Japanese see everything,'' says Rogan Gregory, a TriBeCa-based clothing designer who sells a line of signature distressed denim pants and work wear domestically and to Europe and Japan. ''If I send my Japanese distributors something that is a shade off what they saw before -- even if it's better -- they're like, 'This is different; we don't want it,''' he says. ''It's a pain, but it's beautiful.'' Even appreciating flaws of vintage clothing is part of the Zen tradition of wabi/sabi -- the idea that the value of an object comes from its imperfections. It's as if jeans are the answer to a society steeped in simulacra. ''There's so much plastic in Japan,'' Gregory says. ''People were starving for the real thing.''

Vertu, a wholly owned subsidiary of Nokia (just like Lexus is of Toyota) aims to bring cellphones into the realm of luxury products. Soft sell events were held across the world all year to introduce its new $19,500 platinum cellphone that shipped in August (the cheapest version is $4,900!) according to this New York Times story (registration required):

The aim was to generate a buzz among Vertu's most likely customers, members of a rarefied market segment that Ekaterina Walsh, an analyst at the consulting firm Forrester Research, who studies high-net-worth consumers, calls ''splurging millionaires.'' Of the four million millionaire households in the United States, Walsh says, 41 percent tend, to one degree or another, to spend beyond their means. (Vertu's surest audience, Walsh confides, is the 3 percent of millionaire households that she characterizes as ''high-asset delegator splurging millionaires,'' with assets of more than $2.5 million, little interest in managing their own money and an inclination toward self-indulgence.) ''If any technology product were to be marketed as a luxury product, the cellphone is it,'' Walsh surmises. ''A large number of millionaires aren't technology savvy, and the cellphone is an established, unthreatening technology. Everyone has one. Vertu doesn't even see itself as a technology company. Pretty much all the splurgers among millionaires will be interested in a luxury phone. Vertu's timing is perfect.''

While the market for these luxury cellphones may be small, the idea is to get prominent celebrities adopting the Vertu thus encouraging, by association, other consumers to spend maybe an additional $10 for a fancy new Nokia phone.

Increased awareness and sensitivity to other religious and ethnic affiliations is resulting in a visible change in the advertising and marketing campaigns this holiday season according to this New York Times story (registration required). However, this trend is fraught with perils as my sister found when my nephew's school tried to make the holiday more inclusive by replacing some of the Christmas symbols with others.

The trading of sugarplums and Santa for dreidels and Kwanzaa candles dovetails with marked changes in the demographic makeup of the country. According to a 2001 study released by the City University of New York, 76.5 percent of the country classifies itself as Christian. A decade ago, that number was 86 percent.

African Americans, who as a group posted a 21.5 percent increase, make up 12.3 percent of the population. And the number of people with some Hispanic background has grown to 12.5 percent, a 57.9 percent increase since the 1990 Census. Whites make up 75.1 percent.

According to the results of a study published in the current issue of Science in this Reuters story in the New York Times (registration required):

"If you decrease the level of [the Rpd3 histone deacetylase] enzyme without eating less, you still get life span extension," said Stewart Frankel, a scientist at Yale and the senior author of the study.

In the study, flies with genetic mutations that brought lower levels of the enzyme lived significantly longer than normal. With a low-calorie diet as well, they lived 41 percent longer.

However, a drug that could stimulate this effect is years away. Rats!

According to a New York Times review (registration required) of some interesting recent patents comes this one that I sure could use on some days:

The most expensive watches are those crafted to tell time precisely. James Logan has won a patent for a timepiece that deliberately runs fast at random intervals during the day. His invention can be a wristwatch, pocket watch, clock or computer clock. It intermittently displays a time of day that is several minutes fast to encourage punctuality. The watch can be set so the person who consults it does not know whether it is fast or not at any given time. This feature can also be used only on days "when promptness is particularly important." Mr. Logan won patent 6,411,568.

Disney has a new hit on its hands with Lizzie McGuire according to this New York Times story (registration required) that delivers parody in an irreverent, fun format:

In 2000, Disney decided to develop "Lizzie McGuire." To give Ms. McGuire's character tween authenticity, the creators devised the counterintuitive approach of using the cartoon alter ego to pop up from time to time to express Lizzie's inner thoughts.

...Ms. Sweeney, referring to the pop-up cartoon, added: "This generation of kids have grown up with instant messaging, so it doesn't bother them. It engages them. It reflects what they are thinking when they watch."

The Britain-based Broadcast Advertising Clearance Center, an advertising watchdog, has banned a commercial for a British animated comedy series called "2DTV" (that makes fun of politicians and celebrities) featuring George W., wanting to watch a video but placing it in his toaster to burn it by mistake, according to this AP story in the New York Times (registration required):

The clearance center monitors compliance with rules governing advertising on British television. One of its guidelines says that living people should not be caricatured or referred to in advertisements without their permission.

...The producer of "2DTV," Giles Pilbrow, said requiring satirists to seek permission from their targets was "an idiotic request" that would mean asking Osama bin Laden or Saddam Hussein if it was all right to caricature them.

"I doubt we could get bin Laden's permission — he's a bit tricky to track down at the moment," Mr. Pilbrow said.