SEBASTOPOL, Calif. -- The Amazon Kindle has sparked huge media interest in e-books and has seemingly jump-started the market. Its instant wireless access to hundreds of thousands of e-books and seamless one-click purchasing process would seem to give it an enormous edge over other dedicated e-book platforms. Yet I have a bold prediction: Unless Amazon embraces open e-book standards like epub, which allow readers to read books on a variety of devices, the Kindle will be gone within two or three years.
To understand why I say that, I'll need to share a bit of history.
In 1994, at an industry conference, I had an exchange with Nathan Myhrvold, then Microsoft's (nasdaq: MSFT - news - people ) chief technology officer. Myhrvold had just shown a graph that prefigured Chris Anderson's famous "long tail" graph by well over a decade. Here's what I remember him saying: "Very few documents are read by millions of people. Millions of documents--notes to yourself, your spouse, your friends--are read by only a few people. There's an entire space in the middle, though, that will be the basis of a new information economy. That's the space that we are making accessible with the Microsoft Network." (These aren't Myhrvold's exact words but the gist of his remarks as I remember them.)
You see, I'd recently been approached by the folks at the Microsoft Network. They'd identified O'Reilly as an interesting specialty publisher, just the kind of target that they hoped would embrace the Microsoft Network (or MSN, as it came to be called). The offer was simple: Pay Microsoft a $50,000 fee plus a share of any revenue, and in return it would provide this great platform for publishing, with proprietary publishing tools and file formats that would restrict our content to users of the Microsoft platform.
The only problem was we'd already embraced the alternative: We had downloaded free Web server software and published documents using an open standards format. That meant anyone could read them using a free browser.
While MSN had better tools and interfaces than the primitive World Wide Web, it was clear to us that the Web's low barriers to entry would help it to evolve more quickly, would bring in more competition and innovation, and would eventually win the day.
In fact, the year before, we'd launched The Global Network Navigator, or GNN, the world's first Web portal and the first Web site supported by advertising. To jump-start GNN, we hosted and sponsored the further development of the free Viola web browser, as a kind of demonstration project. We weren't a software company, but we wanted to show what was possible.
Sure enough, the Mosaic Web browser was launched shortly thereafter. The Web took off, and MSN, which later abandoned its proprietary architecture, never quite caught up.
For our part, we recognized that the Web was growing faster than we could, particularly as a private company uninterested in outside financing. So we sold GNN to America Online in June 1995. Big mistake. Despite telling us that they wanted to embrace the Web, they kept GNN as an "off brand," continuing to focus on their proprietary AOL platform and allowing Yahoo!(nasdaq: YHOO - news - people ) to dominate the new online information platform.
The economic slump is prompting airline consolidation on a truly global scale. On Tuesday, British Airways confirmed it was in merger talks with an airline on the other side of the world, Australia's Qantas, adding yet another potential tie-up to its list of deals under discussion with American Airlines and Spain's Iberia.
The merged entity would have a "dual-listed" company structure, said British Airways(other-otc: BAIRY - news - people ), though it stressed that there was no guarantee a deal would be forthcoming. It also said that talks were still ongoing with Spanish airline Iberia, referring to a proposed all-share merger plan that was publicly confirmed back in July. (See "BA, Iberia Fly Closer Together.")
"This continues the trend of global consolidation to save costs and maximize revenues," said Neil Glynn, an analyst with NCB Stockbrokers. He told Forbes.com there would be synergies from aircraft purchases and maintenance, as well as potentially from routes between Britain and Australia. The two airlines co-chair flights between Britain and Australia, known as the "kangaroo route."
The Australian press had speculated that Qantas(other-otc: QUBSF - news - people ) and British Airways were in equity-swap talks, prompted by the Australian government's proposal on Monday to relax ownership restrictions on Qantas. The government now seeks to stop foreign airlines owning more than 49.0% of Qantas, whereas previously the limit was set at 35.0%.
The
economic downturn is renewing interest on Madison Avenue in a marketing
mainstay that is particularly popular during tough times: cash
giveaways.
Contests and sweepstakes with money prizes rather than
merchandise like cars, furniture or trips are appearing more frequently
as the financial crisis continues. In some instances, the dollar
amounts are as high as seven figures, as in a contest with a $1 million
bonus being sponsored by the Doritos brand of snack chips sold by
Frito-Lay.
Who wants to be a millionaire? These days, just about everyone -- even people who a few months ago were billionaires.
"Everyone is trying to get you to buy
something at a time when no one is buying," said Michael Watras,
president at Straightline International, a brand consultancy in New
York. "They've got to do what they can."
The trend includes these other examples:
"Secret
Millionaire," which Fox Broadcasting will introduce on Dec. 3. The
reality series features wealthy men and women who live incognito in
everyday neighborhoods, deciding whether to give up to $100,000 of
their own money to deserving residents.
Although Fox, part of the
News Corporation, announced the show in May -- when the Dow Jones
industrial average was about a million points higher than today -- "it
comes on at a time when people are more attuned to the fact many of our
fellow citizens are having a hard time," said Chris Coelen, chief
executive of RDF USA in Santa Monica, Calif., which is producing the
series.
Dubai Duty Free is dangling a $5 million prize in a
raffle that is being called "the world's biggest duty-free promotion."
The winner will be chosen from among the purchasers of 5,000 tickets,
each costing about $1,360.
"Wheel of Fortune," the game show
syndicated by a unit of the Sony Corporation of America, is celebrating
5,000 episodes by giving away $5,000 a day through May 24, 2009, to
members of the Wheel Watchers Club. There is also a "Spin ID
sweepstakes," with a $50,000 prize, for viewers who have Sony Card Visa
credit cards.
The trend echoes what took place during the
Depression, when marketers eagerly gave away cash prizes on radio quiz
shows and in contests advertised in magazines and newspapers. Some,
like a puzzle contest sponsored by Old Gold cigarettes, which offered
what Time magazine described as an "unprecedented $100,000 first
prize," became national crazes.
Two decades later, when
television supplanted radio, the dollar amounts ballooned; the radio
quiz "The $64 Question" became "The $64,000 Question" on TV. More
recently, the money multiplied again, with shows like "Who Wants to Be
a Millionaire" and "Deal or No Deal."
"Money has been an
incentive for a long time," said Andrew Keller, vice president and
co-executive creative director of Crispin Porter & Bogusky, part of
MDC Partners. "Certainly the notion of offering money at a time like
this is more appealing."
For a client, Volkswagen of America,
Crispin Porter worked with @Radical.Media on a series for the Speed
cable channel that chronicled a race among 30 drivers, ages 16 to 26,
featuring Volkswagen Jetta TDI clean-diesel cars. In a 90-minute
documentary, "Racing Under Green," that Speed showed on Saturday, the
winner of the race, Josh Hurley, 23, of Cooper City, Fla., won $100,000
from Volkswagen to begin his racing career; he will win another
$150,000 if he lands a berth with a professional team.
"For young
people getting into racing, they've experienced for some time what
might be termed a financial crisis," Mr. Keller said, "because it's an
expensive sport."
However, at a time when many companies have
less to spend on marketing, Mr. Keller wondered whether giving cash to
consumers amounts to " 'renting' them to participate in your
advertising."
That thought was echoed by David Melançon, chief
executive at the Ito Partnership, a brand consulting company in New
York, who warned about the long-term implications of what he described
as "selling out your brand for a couple quarters of growth."
"While
you can say, 'If I don't make it through the next two quarters, there
is no long term,' certain marketing tactics are like taking a mortgage
against your brand," Mr. Melançon said, "and mortgages are what got us
into this."
A cash giveaway can make sense "when it connects in
the consumer's mind to the brand's purpose," he added, citing a contest
sponsored by CNBC called the CNBC.com Million Dollar Portfolio
Challenge. The first prize is $500,000 in cash, the second prize is
$200,000, and the third prize is $100,000.
"The prize money is
certainly attractive," said Tom Clendenin, vice president for marketing
at CNBC, part of the NBC Universal division of the General Electric
Company. "But people like the opportunity to learn more about the
market and about the cnbc.com site."
This is the third time for
the contest, which was first played in spring 2007 and returned in
spring 2008. The fall run began its make-believe trading on Nov. 17 and
ends on Feb. 6, 2009.
"We're trying to capitalize on the traffic to
the site," Mr. Clendenin said, referring to the increasing number of
visitors to cnbc.com, "as well as drive people to the site." The
contest has "thousands of players," he added, declining to be more
specific.
For the Doritos contest, Frito-Lay, a unit of PepsiCo,
is somewhat more forthcoming with statistics. The $1 million bonus has
resulted in "a pretty significant increase" in entries, said a
spokesman for Frito-Lay in Plano, Tex., Chris Kuechenmeister to more
than 1,700 from about 1,100 for a previous contest.
The Crash the
Super Bowl contest asks consumers to create commercials for Doritos for
a 30-second time slot during Super Bowl XLIII on Feb. 1, 2009. Five
finalists will be announced in January; each wins $25,000. Computer
users will be able to vote online from among the five spots for the
commercial they want to see during the game.
If that commercial is ranked first in the annual Ad Meter poll conducted by USA Today, the creator gets the $1 million bonus.
Although
the idea for the bonus came well before the financial crisis began,
"certainly the $1 million prize is something we thought people would
find attractive," Mr. Kuechenmeister said.
Asked whether a
million dollars seemed more valuable today than when the idea was
developed, he replied, laughing, that even "a dollar seems more
valuable today."
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