Official Transcript from Steve Ballmer and Rupert Murdoch's meeting

On Wednesday, the Internet was buzzing with the news that Steve Ballmer of Microsoft, and Rupert Murdoch or News Corp, were discussing an agreement that would allow Microsoft exclusive access to News Corp content. Here is the transcript from the Ballmer / Murdoch conversation that led to this announcement.

Ballmer:   "Rupert, we both have a problem and I think we can help each other. Google is leaching your revenues away by indexing your content for free. If you let it go on much longer, your Media Empire will be as profitable as a bunch of high-school newspapers. Google is a thorn in our side as well. I am okay with giving them search advertising, but they are using those revenues to compete with Office, Outlook, Windows Mobile, IE and everything else we do. So here's my idea - let's cut the legs out from under Google. I will buy the exclusive rights to index your News Corp content, and then show it as online search results. It reduces the value of Google's results, you make money, and we benefit. Frankly, were making no money on search advertising now and can only improve by having better content."

Murdoch: "I like the idea. We will charge search engine providers to index our content. No pay - no content. Hey, I spend a fortune on all those Wall Street Journal people and Google simply goes ahead and indexes the content, and then charges for ads on the search results pages. This way, I make money and you reduce Google's value and associated revenues. If Microsoft gets my Wall Street Journal content and maybe a couple of other Financial site's content, why would anybody with interest in financial information, every use Google? Brilliant."

Ballmer: "So Rupert, here is where we get a bit of revenge as well. Google and the other search engines will be forced to pay for premium content, and then either pass the costs on to their advertisers, or they will need to take a hit in their margins. If this idea reduces the market value of all search providers, too bad. Either way, I don't care. Advertising in over 90% of their revenues and under 10% of ours. Let's see them try come into our business sectors without their big advertising revenue stream."

Okay - so the transcript is not the official one from the Ballmer and Murdoch meetings, but you have got to admit, it does make business sense for both of them. It will be interesting to see how the discussions continue, and how Google counters.

Social Marketing Apps - Clutter Buster Daily Tweet

New Social Marketing apps are popping up every day, and it is tough to keep track of all the different players. So, starting today, I am sending a once-a-day Tweet highlighting an innovative Social Marketing app. Here's the general format: [AppName]-[Bit.ly URL]-[Type] #socmktgapps.

Break through the clutter.....click the "I Tweet Follow Me on Twitter button" and hear about the best and most innovative Social Marketing applications available on the market. 1 app will be highlighted Monday through Friday. So, sign-up and follow me on Twitter. My Twitter id is  http://twitter.com/grahamlubie. You may get a couple of other tweets occasionally, but only a handful at most.

See today's Tweet about a great, real-time conversation monitoring application. It's very cool.

(BTW - I am tagging these as Social Marketing vs. Social Media apps since they are specifically related to the marketing function. I believe that "Social Media" is broader in range and can address functions outside of just marketing and PR).

Outside The Box Thinking - Improv Training For Your Marketing Team

A recent Facebook post by Hubspot (inbound marketing SaaS provider) described how their marketing team was going through improve training. My first reaction was "Huh, improve training?" Could I understanding send a Product manager to a Pragmatic Marketing class? Yes. Would I send a Direct Marketer to a Marketing Sherpa Lead Gen Summit? Yes. But improve training?

After thinking about it a bit more, it makes sense. Given Hubspot's "inbound marketing" philosophy and their hypothesis that content is king, training your employees to improvise and create great content is valuable. Producing great content isn't easy and Hubspot produces a LOT of content like webinars, slideshares, podcasts, articles, whitepapers, videos, etc. So, given the large amount of content being created and the value of keeping that content fresh, it makes sense. It is also a great team building exercise.

Hubspot is not the only company that has tried comedy as a way to get their message recognized. About a year ago, Serena (developer of an enterprise mashup server) launched a video titled "Is Mashup a dirty word?". It has gotten over 1.2 million views on YouTube. IBM has also started doing humorous videos to push Mainframes. Yes - MAINFRAMES, and they have gotten almost 250,000 views of their YouTube skits.

So, while the videos are humorous, I do wonder about the value of them. How many of the viewers of these videos are actually in a position to buy a million dollar mainframe or mashup server? Probably a very, very, very small percentage. Do these videos makes sense from a marketing $ allocation standpoint or are they just another form of shotgun advertising? I don't know the answer for any of these three organizations, but I would suspect that their web analytical teams can tell if there is value, and if there wasn't any, they wouldn't continue to do them.

Micro ISVs are the Garage Bands of technology

Balsamiq (see prior post) bills itself as a Micro ISV. Until a couple of weeks ago, I had never heard the term "Micro ISV" so I decided to dig a bit deeper. My findings in a nutshell: Micro ISVs are a very interesting concept and are viable because of the seismic changes that we are experiencing in marketing and technology.

Here's a basic definition: "A Micro ISV is an Independent Software Vendor (ISV) that has just a handful of employees and is bootstrapped. Typically the software is distributed online and has a Freemium or Try-Then-Buy business model". The appeal of Micro ISVs is pretty much like being part of a Garage Band. You work on your songs, get a couple of gigs a month, and next thing you know, Rolling Stones is calling for interviews.

The cost of being a Micro ISV is now lower than ever before. Rather than spending a lot of $$s upfront, it is possible to deliver great software using a combination of open-source plus SaaS offerings. Here are some of the components, by function, that a Micro ISV can draw upon:

Product Development

• Open Source development stack (Linux, MySQL, etc.). Free
• Source control, issue tracking, roadmap management, test automation, etc. (Altassian)  $10 a month.

Operations:

• Virtual Instances of the application on Amazon (EC2, S3, SQS, RDS). There is no upfront hardware to buy and it covers both website hosting and operations. Nominal fee. Usage based.

Support:

• Community driven support forums, wikis, peer2peer support (GetSatisfacition + ZenDesk) <$30 a month.

Finance

• Online sales and subscription management (Spreedly). $20 a month + 1 to 3% of billings

Sales & Marketing:
Lastly, but most importantly is marketing and sales. Most Micro ISVs sell either single user software or SaaS, and have either a Freemium (ie. basic app is free, but premium features cost more) or Try-Then-Buy (ie. get 30 days free and then start paying) business model. So, the basic marketing and sales strategy is to (1) connect online with high volumes of users, and (2) get them to try the software. There are no sales teams out in the field, and marketing needs to leverage inbound interest, rather than traditional (read costly) outbound lead generation. To accomplish this, Inbound Marketing is key. By using social media (eg. blogs, SEM, Facebook groups, Twitter, etc.), viral marketing (eg. tell a friend options in the app, etc.), and online advertising (eg. PPC), it is possible to get tremendous exposure and generate revenues on a shoestring budget.

Balsamiq is a poster child of Micro ISVs. They have embraced system thinking and have generated tremendous online exposure. Within 12 months, they were generating over $1m in revenue with just 4 employees. Pretty impressive.

BTW: [I am currently advising a Micro ISV on their go to market strategy and product marketing approach. Expect to hear a lot more about them, and our Social Media techniques over the next few months.]

A Good Wireframe's Worth More Than A 1,000 Words

If you've ever designed a software product or built a complex website, you've gone through at least some of the following steps:

1. Gather Requirements
2. Brainstorm & Conceptualize using Wireframes
3. Do the Design
4. Develop
5. Test
6. Deploy

Well, step #2 of creating wireframes has gotten a whole lot easier with Balsamiq. It's a great tool for quickly creating wireframes and mockups. Balsamiq has a pallet of design components that allows you to do traditional client software, web-apps and mobile app wireframes. I recently used it to brainstorm an iPhone mobile app with a client. In just a couple of hours we were able to collaboratively do 80% of the screens and evolve how the different components would interact with one another.  Having predefined iPhone images made life so much easier than having to create them one by one. Here's an example of how a screen gets laid out in Balsamiq.

Balsamiq is definitely a keeper.

The Best Marketed Software Ever!

I have recently been advising a client on how to improve their marketing and sales effectiveness. The company is a very innovative manufacturer of industrial equipment and despite the economy, they are in rapid expansion mode. One of their key goals is to implement an integrated marketing and sales platform to more quantitatively manage direct sales, channel sales and marketing activities. The company has decided to move forward with Salesforce.com, a decision I wholly endorse, and a platform that I have led the implementation of twice in the past. But I digress, this post is not about the criteria for selecting an integrated sales and marketing platform, rather it is about excellent marketing. 


After (re)evaluating the current features of a handful of CRM competitors like SugarCRM and Microsoft Dynamics CRM, Salesforce.com takes the cake. Their feature checklist keeps them in the game, but it is their marketing, sales and positioning that really makes them standout. Can't say it's surprising. Since Salesforce.com burst onto the enterprise software scene in the late 90's, they have year-in and year-out done an excellent job of positioning their solutions, defining value props and making it easy to try then buy. First, it was "No More Software" and "Lower TCO", then it was extendability within their ecosystem with AppExchange, now it is about "the Cloud" and the volume of success stories (1.5million success stories and counting) using their service.


Effective Positioning (Product Marketing & Product Management) is obviously critical, but the Promotion (PR, Product Marketing and Field Marketing) then Sales (Direct Sales / Indirect Sales) is where Salesforce.com really shines versus their competitors. They are the company getting the awards, driving the industry buzz, showing up everywhere and growing at an industry leading rate.


I guess if you are the segment leader in CRM, it is almost expected. So how could you replicate Salesforce.com's success? A good team and strategy is important, but Marketing & Sales spending is where the difference really comes in. Microsoft, CA and Intuit all have strong teams, sound strategies and are certainly no slouches on the Marketing & Sales front, but the discrepancy in marketing spend is astounding:


Sales & Marketing as a % of Total Revenues From Most Recent Financials:
Microsoft spent $12,879m on $58,437m [22%]
Intuit spent $927m on  $3,183m [29%]
CA spent $1,214 on $4,271m [28%]
Salesforce.com  $534m on $1,076m [49%]


What is even more remarkable, is that Salesforce.com is essentially a one trick pony (i.e. CRM). All the others have broad portfolios of products and services.


Bottom Line:  While business success requires excellent Marketing and Sales execution, outspending your competition and blowing the doors off of industry spend comparables, certainly doesn't hurt.

Good list of social media Do's and Don'ts

Dave Nelsen of Vistage has written a good list of the 10 Do's and Don'ts of Social Media. I highly recommend it for anybody thinking about getting started in Social Media. Check it out.