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Wednesday, 16 October 2013
Yahoo CEO Mayer has advertisers' attention, but can she get their dollars?
New York/San Francisco - Three weeks ago, Yahoo Inc Chief Executive Marissa Mayer strode into a Manhattan hotel and was greeted like a rock star by hundreds of advertising executives who snapped pictures as she sat down for an interview with journalist Charlie Rose.
That same audience a year ago would have been grousing that Mayer had not done enough to engage Madison Avenue, which is arguably Yahoo's most important constituent since the Internet company derives more than 75 percent of its revenue from ad sales.
"I think that Marissa has gotten a bit of a bad rap," said David Cohen, the chief media officer at UM, the global media arm of Interpublic Group.
The industry perceived Mayer as not caring about advertising, choosing instead to focus solely on products, Cohen said.
Ad agency executives say that over the past six months Mayer and her team have been working hard to change that perception, courting advertisers at key industry events, hosting lunches and attending meetings with agency representatives that include Yahoo executives like Chief Operating Officer Henrique de Castro, Senior Vice President and head of Americas Ned Brody and Chief Marketing Officer Kathy Savitt.
The charm offensive has impressed many on Madison Avenue, but getting advertisers to actually spend more on Yahoo's Web properties will not happen overnight, industry experts said.
The shift to advertising exchanges, which allow marketers to instantly buy placement for their ads across a broad constellation of websites, has pushed down the prices that online publishers such as Yahoo can charge.
That was painfully apparent in the second quarter of this year, when Yahoo's display advertising revenue slid 11 percent due in part to a double-digit decline in ad prices.
"Advertisers will become more excited if there's clear evidence that Yahoo is growing again in terms of its users and its engagement," said Mark Mahaney, an analyst at RBC Capital Markets.
Since Mayer became CEO, Yahoo's stock has more than doubled, recently reaching a near 8-year high of $35.06. But analysts say the gains are mostly due to aggressive share buybacks and the impending initial public offering of Chinese e-commerce giant Alibaba Group, in which Yahoo owns a 24 percent stake.
More than a year into Mayer's tenure, Yahoo's core business remains stagnant. Revenue has been flat or down for the past four years and Wall Street does not expect the situation to improve when Yahoo reports its third-quarter results on Tuesday.
Analysts are expecting third-quarter revenue to decline around 1 percent to $1.08 billion, according to Thomson Reuters I/B/E/S.
A Yahoo representative said the company has built a team to specifically focus on agency relationships and has recently realigned its sales force according to industry expertise.
Yahoo is "working closely with our advertisers to develop opportunities in a more integrated way across our full suite of media, programmatic, video and mobile properties," Yahoo said in an emailed comment.
Mobile Target
Yahoo is trying to play catch-up to Facebook Inc, Twitter Inc and Google Inc in the fast-growing mobile advertising business, as consumers increasingly access the Web on smartphones instead of PCs, and flock to social media websites that require novel ad formats.
Spending on mobile ads grew 145 percent year over year to $3 billion in the first six months of 2013, according to the Internet Advertising Bureau.
Mayer has revamped many of Yahoo's mobile apps to make them more attractive to consumers and advertisers. In May she spent $1.1 billion to acquire Tumblr, a popular blogging and social media website.
"There's a promise there but it's not ready for prime time today," said Ritu Trivedi, managing director, digital marketplace at MediaVest, a Publicis media agency, referring to Yahoo's mobile ad efforts.
Mayer has said that turning Yahoo's business around will be a multi-year process. She has accelerated the pace of product development, and added workplace perks such as free food and top-of-the-line smartphones for employees.
But even as the CEO tries to forge closer ties with advertisers, she has made it clear that Yahoo's users come first. That is a big change from the old Yahoo, which was famous for loading its websites with advertising that critics said were overly intrusive and detrimental to the user experience.
For instance, Yahoo's new mobile weather app, which takes basic weather feeds and links them with the Flickr photo-sharing service, has sparked interest from advertisers. The app could be particularly appealing to hotel and retail marketers, said Peter Stein, CEO of Razorfish, a digital marketing agency.
So far however, Yahoo has kept the weather app ad-free.
"There message has been very direct and on point, they are definitely focused on the consumer," said Ari Bluman, chief digital investment officer in North America for WPP's media buying arm GroupM.
Consumers First
Some ad experts say Mayer's prioritization of users before advertisers is a smart move that could ultimately pay off by increasing Yahoo's popularity with consumers. But others say it may not go over well on Madison Avenue in the short term.
For instance, Yahoo did a major overhaul of its popular sports home page to coincide with the start of the NFL season this year. One advertising agency executive said they found out about the change a week before the launch, and so the agency had to scramble to re-design ads that would fit with the new format.
"Our client was very upset," said the executive, who did not want to be identified because the agency works closely with Yahoo. "I have a six-page typed memo about the problems we had with Yahoo and this one client."
A Yahoo representative said that the company has "moved faster in the past year than anytime in our recent history" to launch better products and to "evolve" the ads on its websites. "We think this will improve performance for our advertisers over time, and we're working closely with our advertising partners."
Still, the overall assessment of Mayer is positive.
Tamara Bousquet, senior vice president of media at digital marketing agency DigitasLBi, recalled a dinner she attended in late September with other advertising executives where Yahoo was the topic of conversation. "Every single person around that table thought the company was handled better since Marissa came on board," she said.
Cyber warrior shortage hits anti-hacker fightback
London - For the governments and corporations facing increasing computer attacks, the biggest challenge is finding the right cyber warriors to fight back.
Hostile computer activity from spies, saboteurs, competitors and criminals has spawned a growing industry of corporate defenders who can attract the best talent from government cyber units.
The US military's Cyber Command is due to quadruple in size by 2015 with 4,000 new personnel while Britain announced a new Joint Cyber Reserve last month. From Brazil to Indonesia, similar forces have been set up.
But demand for specialists has far outpaced the number of those qualified to do the job, leading to a staffing crunch as talent is poached by competitors offering big salaries.
"As with anything, it really comes down to human capital and there simply isn't enough of it," says Chris Finan, White House director for cyber security from 2011-12, who is now a senior fellow at the Truman National Security Project and working for a start-up in Silicon Valley.
"They will choose where they work based on salary, lifestyle and the lack of an interfering bureaucracy and that makes it particularly hard to get them into government."
Cyber attacks can be expensive: one unidentified London-listed company incurred losses of 800 million pounds ($1.29 billion) in a cyber attack several years ago, according to the British security services.
Global losses are in the range of $80 billion to $400 billion a year, according to research by the Washington-based Center for Strategic and International Studies that was sponsored by Intel Corp's McAfee anti-virus division.
There is a whole range of attacks. Some involve simply transferring money, but more often clients' credit card details are stolen. There is also intellectual property theft or theft of commercially sensitive information for business advantage.
Victims can also suffer a "hacktivist" attack, such as a directed denial of service to bring a website down, which can cost a lot of money to fix.
Quantifying the exact damage is almost impossible, especially when secrets and money are not the only targets.
While no government has taken responsibility for the Stuxnet computer virus that destroyed centrifuges at Iran's Natanz uranium enrichment facility, it was widely reported to have been a US-Israeli project.
Britain says it blocked 400,000 advanced cyber threats to the government's secure intranet last year while a virus unleashed against Saudi Arabia's energy group Aramco, likely to be the world's most valuable company, destroyed data on thousands of computers and put an image of a burning American flag onto screens.
Going Viral?
Most cyber expertise remains in the private sector where companies are seeing an steep increase in spending on security products and services.
Depending on the cyber threat, a variety of firms are bidding for cyber talent. Google is currently advertising 129 IT security jobs, while defense companies such as Lockheed Martin Corp and BAE Systems are looking to hire in this area.
Anti-virus maker Symantec Corp is also doing good business. "The threat environment is exploding," Chief Executive Steve Bennett told Reuters in an interview in July.
The perception of an increased threat, has also led to explosive demand for the best talent.
The US Bureau of Labour Statistics says the number of Information Technology security roles in the US will increase by some 22 percent in the decade to 2020, creating 65,700 new jobs. Experts say it is a similar situation globally, with salaries often rising 5-7 percent a year.
"Recruitment and retention in cyber is a challenge for everybody working in this area," says Mike Bradshaw, head of security and smart systems at Finmeccanica IT unit Selex. "It's an area where demand exceeds supply ... it's going to take a while for supply to catch up."
A growing number of security firms - such as UK-based Protection Group International (PGI) - now also offer cyber services. PGI started out providing armed guards to protect merchant ships against pirates but has now hired former staff from Britain's GCHQ eavesdropping agency.
Country or Cash?
A graduate with a good computer studies degree can walk into a $100,000 salary with a similar amount upfront as a golden handshake, several times what the US National Security Agency would be likely to offer.
Western universities turn out far too few graduates with the necessary computer skills while some students complain that many of the courses on offer are too theoretical for the challenges of cyber warfare.
But applicants need not have a computer science degree to get lucrative jobs as long as they can do the hardest-to-fill jobs such as finding bugs in software, identifying elusive infections and reverse engineering computer viruses that are found on computers, said Alan Paller, founder of the non-profit SANS Institute in Washington.
SANS has worked with officials in Illinois, Massachusetts, New Jersey and other states to sponsor hacking contests that test skills in those and other areas. Educational background does not necessarily help in these contests.
Those who have "very good" skills in the most-needed areas can earn $110,000 to $140,000, while the very top get paid as much as $200,000 in private sector jobs, according to Paller.
While the private sector offers big cash, the government is still able to retain some talent by appealing to people's sense of public service and patriotism.
"I want to serve my country. What I am doing is important," one hacker who conducts classified research for the US military told Reuters at the Def Con hacking conference in July. He declined to provide his name because he was not authorized to speak to the press.
There is also an expectation that government workers can move to more lucrative jobs in the private sector after several years in public service.
But some senior officers in Western militaries still fear they may struggle to attract the requisite talent, citing both cultural and administrative problems.
General Keith Alexander, head of both the NSA and Cyber Command, told Reuters earlier this year finding the right talent was a priority. He has attended events such as the Def Con hacker conference, trading his uniform for a black T-shirt.
Hiring outsiders has long been thought to be a tactic employed by the United States as well as China and Russia.
Western security officials believe Russia, China and other emerging cyber powers such as Iran and North Korea have cut deals with their own criminal hacker community to borrow their expertise to assist with attacks.
Russia and China, which have been accused by the West of mounting repeated attacks on government and commercial interests, deny direct involvement in hacking.
"We are at the very beginning of this process and we are building it brick by brick," says Colonel Gregory Conti, head of the cyber Security Department at the US Military Academy, West Point. "It's going to be like the creation of the air force - a process of several decades getting the right people and structure
Twitter pays engineer $10 million as Silicon Valley tussles for talent
San Francisco,Oct 13, 2013 - Among Twitter Inc's highest-paid executives, Christopher Fry's name stands out.
The senior vice president of engineering raked in $10.3 million last year, just behind Twitter Chief Executive Dick Costolo's $11.5 million, according to Twitter's IPO documents. That is more than the paychecks of executives such as Chief Technology Officer Adam Messinger, Chief Financial Officer Mike Gupta and Chief Operating Officer Ali Rowghani.
Welcome to Silicon Valley, where a shortage of top engineering talent amid an explosion of venture capital-backed start-ups is inflating paychecks.
"The number of A-players in Silicon Valley hasn't grown," said Iain Grant, a recruiter at Riviera Partners, which specializes in placing engineers at venture-capital backed start-ups. "But the demand for them has gone through the roof."
Stories abound about the lengths to which employers will go to attract engineering talent - in addition to the free cafeterias, laundry services and shuttle buses that the Googles and Facebooks of the world are already famous for.
One start-up offered a coveted engineer a year's lease on a Tesla sedan, which costs in the neighborhood of $1,000 a month, said venture capitalist Venky Ganesan. He declined to identify the company, which his firm has invested in.
At Hotel Tonight, which offers a mobile app for last-minute hotel bookings, CEO Sam Shank described staging the office to appear extra lively for a prospective hire. He roped in two employees for a game of ping-pong and positioned another group right by the bar.
It worked: the recruit signed on and built a key piece of the company's software.
In Fry's case, his compensation came mostly in the form of stock awards, valued last year at $10.1 million, according to Twitter's IPO documents registered with securities regulators. He drew a salary of $145,513 and a bonus of $100,000.
Some might call that underpaid. Facebook Inc's VP of engineering, Mike Schroepfer, took in $24.4 million in stock awards the year before the social network's 2012 initial public offering. He also drew a salary of $270,833 and a bonus of $140,344. But Facebook that year posted revenue of $3.71 billion, 10 times more than Twitter's $317 million.
Grant said more than three-quarters of candidates who took VP of engineering roles at his client companies over the last two years drew total cash compensation in excess of $250,000. Many also received equity grants totaling 1 to 2 percent of the company, the recruiter added.
Lore of 10x
The hot demand for engineers is driven in part by a growing number of start-ups, venture capitalists say. Some 242 Bay Area companies received early-stage funding - known as a seed round - in the first half of this year, according to consultancy CB Insights. That is more than the number for all of 2010.
Another factor is the increasing complexity of technology. Many in Silicon Valley like to discuss the lore of the "10x" engineer, who is a person so talented that he or she does the work of 10 merely competent engineers.
"Having 10x engineers at the top is the only way to recruit other 10x engineers," said Aileen Lee, founder of Cowboy Ventures, an early-stage venture fund.
Former colleagues said Fry, who joined Twitter earlier this year, fits the bill. The messaging service poached him from software giant Salesforce.com Inc, where Fry had worked in various positions since 2005, rising from engineering manager in the Web Services team to senior VP of development.
Perhaps most attractive to Twitter is the fact that Fry joined Salesforce when it was also a 6-year-old company with big ambitions of taking on the software establishment. At that time, Salesforce's product development needed help, Fry has said in previous interviews. He whipped them into shape, helping build the company into one of the hottest enterprise-software providers in the industry today.
Twitter has had its share of technical problems, such as the notorious "fail whale" that regularly appeared on screens during outages. That made Fry's experience all the more valuable.
"All it takes is a couple of bad incidents where Twitter is down, or there's a security breach. That could be the end of the company," said Chuck Ganapathi, an entrepreneur who previously worked with Fry at Salesforce, where he was senior vice president for products.
"You need somebody of this caliber to run it."
Neither Twitter nor Fry responded to requests for comment.
Personal drum studio
Today, even entry-level engineers can draw lucrative salaries in the Valley. Google Inc offered $150,000 in annual wages plus $250,000 in restricted stock options to snag a recent PhD graduate who had been considering a job at Apple Inc, according to a person familiar with the situation.
The average software engineer commands a salary of $100,049 in Silicon Valley, according to Dice, a technology-recruitment service. That is down from $113,488 last year, due to an increase in hiring of less experienced engineers, said a Dice spokeswoman.
By comparison, the average salary for all professions in San Francisco's Bay Area is $66,070, according to the Bureau of Labor Statistics. Other jobs in the area can command higher wages - physicians make $133,530, a lawyer about $174,440 and a civil engineer makes $107,440 - but the tech industry often offers restricted stock or options on top of salaries.
Even for plain-vanilla engineers, competition is intense, said Dice CEO Mike Durney, leading companies to go to great lengths to attract and hold onto the right people.
Accommodation-search service ApartmentList rents a drum studio on an ongoing basis to help retain a key engineer, said CEO John Kobs.
In one of the better-known examples, Google famously allowed engineers to devote 20 percent of their time on personal projects. It is worth it, many recruiters and industry executives say.
Many of the most talented engineers bring more than programming chops, promoting the sort of career diversity prized in Silicon Valley.
Take Fry, who earned a PhD in cognitive science from the University of California at San Diego in 1998. He is a surfer, a sailor and a snowboarder, according to his personal website.
In a fitting twist for Twitter, known for its blue bird mascot, Fry also has avian expertise. His postdoctoral fellowship at the University of California, Berkeley, focused on the auditory cortex of zebra finches.
Two million pilgrims converge on Mina
MINA: Some two million pilgrims streamed into Mina Valley from the holy city of Makkah on Sunday, marking the beginning of Haj.
Authorities announced at noon that all the pilgrims had reached Mina from Makkah. Saudi Interior Minister Prince Mohammed bin Nayef said the number of pilgrims from outside the country totalled 1,379,531, down 21 per cent on last year’s 1.75m. Around 1.29m of them had flown to Saudi Arabia from 188 countries, he said, without giving a figure for pilgrims residing in the kingdom whose number is believed to have been halved.
The kingdom cut by 20 per cent the quotas for pilgrims allowed in from abroad over fears of MERS virus and because of massive projects to expand the capacity of the Grand Mosque.
Saudi Health Minister Abdullah al-Rabia told reporters late on Saturday the authorities had so far detected no cases among the pilgrims of the MERS virus which has killed 60 people worldwide, 51 of them in Saudi Arabia.
Authorities have stepped up measures to curb ‘illegal’ pilgrims who sneak into Makkah through desert roads.
Security officials have said that as many as 31,000 Saudi and expatriate pilgrims were turned back for not carrying legal permits, while around 12,600 others were arrested.—AFP
Sony Cyber-shot DSC-RX10: Potentially great $1,300 camera or overpriced misstep?
Well, no one can accuse Sony's digital-imaging division of risk aversion these days; it takes a lot of chutzpah to come out with an oversize enthusiast camera for $1,300.
True, there are a variety of sensible reasons for the pricing, but this still represents another push of the envelope for Sony. True, the Cyber-shot DSC-RX10 has a lot of attractive features, including the same 1-inch BSI sensor that's in the RX100 II -- but with the more powerful, updated Bionz X image processor that's in the new A7 and A7R -- a fixed 24-200mm f2.8 Zeiss T*-coated lens, 10fps continuous-shooting with autofocus, and a dust-and-moisture-resistant magnesium alloy body. And true, most people don't use anything other than the kit lens that ships with their dSLR; the equivalent-quality lens would likely run at least $1,000.
But I suspect that there are some psychological hurdles to overcome here, not the least of which is that the camera size and lens make it look like a megazoom but it's not, and one of the markets that Sony sees for this camera is as a step-up choice for those current users. But megazooms are popular because of the long, relatively compact lenses, not because of the terrific photo quality or the big size, and I don't think a lot of folks would want to give them up.Panasonic's FZ200 has an f2.8 lens as well, but it's 24x and the camera is less than half the price of the RX10, and lots of people are willing to accept the less-than-perfect photos in exchange. (One notable advantage the RX10's lens has over the FZ200's is that it can focus at just under a foot at 200mm, while the FZ200 can't focus closer than 3.3 feet at the same focal length.) The Nikon Coolpix P7800 has a reasonably fast zoom lens that comes close in range, and the camera is a lot smaller and also less than half the price.
What about as an alternative or supplement to a dSLR? It's certainly smaller than one equipped with an equivalent lens. But as an alternative it lacks the interchangeable-lens capability, APS-C size sensor, and optical viewfinder; as a supplement, if I were planning to take something that big I'd probably just schlep the dSLR.
Sony's betting that people will appreciate the subtleties that have the potential to make the RX10 stand out from the crowd and be willing to accept the trade-offs necessitated by technological constraints. Pairing the larger sensor required for improved photo quality with a lens with a FZ200-like zoom range and large lens aperture would make the camera even huger and clunkier, or possibly prohibitively expensive. Despite its appearance, it's really just a bigger, more feature-packed alternative to the RX100 II.
In addition to a fast aperture, the lens uses a Direct-Drive SSM (Super Sonic Wave Motor) that in theory enables the lens to move and stop more rapidly than you typically find in fixed-lens cameras, with less overshoot and therefore more accurate control. The lens has zoom and aperture rings. While the zoom ring does feel nicer than similar designs, I really don't like the feel of the servoelectronic zooms. The aperture ring has a switch that toggles it between smooth and clicky. It does have a built-in three-stop neutral density filter, a pretty essential feature for lenses like these.
The image processing is ostensibly improved over the RX100 II with improved detail rendering and updates to the noise reduction algorithms. The increased processing power of the Bionz X chip also delivers sufficient bandwidth to enable improved tracking and eye-detection autofocus (humans only!), as well as pixel binning (aggregation rather than line dropping) for better video quality. It allows full manual controls in video and supports Sony's XLR adapter accessory as well as clean HDMI output.
It also has a nicer OLED viewfinder than you typically find on megazooms, bright with high magnification and a high eyepoint.
Apple Sends Invitations for Oct. 22 Event to Unveil New IPads
The Oct. 22 function will start at 10 a.m. local time at the Yerba Buena Center for the Arts Theater in San Francisco, Cupertino, California-based Apple said today in a note to members of the media. The venue is where Apple has held many previous product introductions.
Apple, which last month unveiled two iPhone models, is introducing a batch of new products ahead of the holiday shopping season. Next week’s event will include an update to the iPad mini with a high-definition screen, as well as design changes to make the larger iPad thinner, people with knowledge of the plans have said. Apple also is expected to show its Mac software upgrade, called Mavericks, as well as a revamped Mac Pro high-end computer.
“We still have a lot to cover,” Apple said in the invitation.
In the absence of a new iPad, the tablet market shrank in the second quarter, suggesting pent-up demand for the new models. Global tablet unit sales fell 9.7 percent to 45.1 million, with iPad shipments falling to 14.6 million units from 19.5 million in the first quarter, according to researcher IDC.
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