Business Model

Most women’s sites earn money mainly from ad revenues, and also from subscriptions and products sold through their sites. According to comScore Media Metrix, advertisement revenues for the women’s sites are forecasted to grow at 19% in 2007 but iVillage has grown its ad revenues by 46% in 1Q 2007 and 40% in 2Q 2007.

Ad rates for most of the women’s sites vary between $5 to $40 CPM with quality sites like iVillage, Glam, etc. commanding a premium.

Niche positioning, premium and highly targeted content allows web properties like Glam Media attract premium brand advertisers such as Lacoste, H&M, Max Factor, Reebok, and Maybelline and garner high CPMs of $20 to $35, depending on placement and reach.

Glam Media, in addition, also sells/places Ads on other women-focused web properties including blogs, as part of the Glam Publisher’s Network. This is an example of the rapidly developing Vertical Ad Network business model that I have discussed before. To recap, you can read the following articles:

• Defying Google: Adify CEO Russ Fradin
• Monetizing Blogs via Ad Networks
• Time Warner’s Ad Network Move

In fact, Adify, profiled in this article, is also powering a women-focused vertical ad network on behalf of iVillage.

(To be Continued)

[Part 1] [Part 2]

I have, so far, refrained from joining the hype machine around Facebook. However, things are plain out-of-control right now, with rumors about them turning down $6 Billion acquisition offer from Microsoft, and more recently, that $10 Billion is what they think they’re worth.

All this, on an annualized revenue of how much? $150 Million, right?

So, I want to discuss the obvious question: how does Facebook monetize?

To answer this question, I will bring you back to the two fundamental articles I have written about what I see as Web 3.0: Web 3.0 = (4C + P + VS) and Web 3.0 & the Semantic Web. In these two articles, I articulated my vision of a Verticalized, Personalized web, organized by Context.

So with that assumption as Exhibit A, let’s ask the question what do Facebook’s users do online? The answer is, the same things that the rest of the web universe does. They try to find a mate, look for a job, look for a car or a house, shop, download music, share videos, photos, etc. Notice, all these activities align with the big verticals online that have so far generated large chunks of online revenues.

Let’s take the example of the Online Jobs vertical. Yahoo bought Hotjobs, thwarting Monster’s effort to consolidate the space. Today, Jobs is one of the top online segments in the US with $5.9 billion online advertising revenues, which constitutes around 25% of Internet ad revenues in the US. The top players in the online jobs market are CareerBuilder, Monster, Yahoo! HotJobs and vertical search engines like Indeed, Jobster and SimplyHired. According to Hitwise, CareerBuilder is the leading job site in terms of web visits with 13.73% visits, followed by Monster (11.51%) and Yahoo! Hot Jobs (5.33%).

Monster is an independent public company with a 2006 revenue of $1.1 Billion, and a market cap of $5.37 Billion. You can read about the Online Job Industry on my site. and reviews of the strengths and weaknesses of the top 3 properties for the segment: CareerBuilder, Monster, and HotJobs, based on the Web 3.0 framework described above.

So, explain to me, why Facebook should not become a major player in the Online Jobs area, and pick up a large chunk of $6 Billion Total Available Market for that segment? Considering that it has in its database the cream of the US educational institutions, Facebook’s Online Job / Career Management offering is one that is a no-brainer!

(to be continued)

I have, so far, refrained from joining the hype machine around Facebook. However, things are plain out-of-control right now, with rumors about them turning down $6 Billion acquisition offer from Microsoft, and more recently, that $10 Billion is what they think they’re worth.

All this, on an annualized revenue of how much? $150 Million, right?

So, I want to discuss the obvious question: how does Facebook monetize?

To answer this question, I will bring you back to the two fundamental articles I have written about what I see as Web 3.0: Web 3.0 = (4C + P + VS) and Web 3.0 & the Semantic Web. In these two articles, I articulated my vision of a Verticalized, Personalized web, organized by Context.

So with that assumption as Exhibit A, let’s ask the question what do Facebook’s users do online? The answer is, the same things that the rest of the web universe does. They try to find a mate, look for a job, look for a car or a house, shop, download music, share videos, photos, etc. Notice, all these activities align with the big verticals online that have so far generated large chunks of online revenues.

Let?s take the example of the Online Jobs vertical. Yahoo bought Hotjobs, thwarting Monster?s effort to consolidate the space. Today, Jobs is one of the top online segments in the US with $5.9 billion online advertising revenues, which constitutes around 25% of Internet ad revenues in the US. The top players in the online jobs market are CareerBuilder, Monster, Yahoo! HotJobs and vertical search engines like Indeed, Jobster and SimplyHired. According to Hitwise, CareerBuilder is the leading job site in terms of web visits with 13.73% visits, followed by Monster (11.51%) and Yahoo! Hot Jobs (5.33%).

Monster is an independent public company with a 2006 revenue of $1.1 Billion, and a market cap of $5.37 Billion. You can read about the Online Job Industry on my site. and reviews of the strengths and weaknesses of the top 3 properties for the segment: CareerBuilder, Monster, and HotJobs, based on the Web 3.0 framework described above.

So, explain to me, why Facebook should not become a major player in the Online Jobs area, and pick up a large chunk of $6 Billion Total Available Market for that segment? Considering that it has in its database the cream of the US educational institutions, Facebook’s Online Job / Career Management offering is one that is a no-brainer!

(to be continued)

In this post, we will be analyzing Intel as part of the series on the major players in the iPhone’s component ecosystem. In the iPhone, Intel provides a wireless flash with 32 Mbytes of NOR coupled with 16 Mbytes of SRAM for code execution.

Intel Corp. (Nasdaq: INTC) is the world’s largest chip manufacturer with revenues of $35.4 billion and 94,100 employees in 2006. Its core products include microprocessors, chip-sets, motherboards, flash memory, wired and wireless connectivity products, and communications infrastructure components. Its operations are organized into Digital Enterprise Group, Mobility Group, Flash Memory Group, Digital Home Group, Digital Health Group, and Channel Platforms Group.

Digital Enterprise Group accounted for 56% of its consolidated net revenue in 2006 and sales from microprocessors within the group accounted for 41% of its consolidated net revenue.

Mobility Group accounted for 35% of consolidated net revenue in 2006 and the sales of microprocessors within the Mobility Group made up 26% of consolidated net revenue. To focus on its core businesses, Intel sold its Xscale communications-chip division in the Mobility Group for $600 million to Marvell Technology Group, Ltd (MRVL) in Q4 2006.

Flash Memory Group made up 6% of its consolidated net revenue in 2006 and most of this revenue came in from the NOR flash memory products. It formed a joint venture, IM Flash Technologies, LLC, in 2006 with Micron (MU) for manufacturing its NAND flash memory products. It invested $1.3 billion in 2006 for a 49% in the venture. Earlier this year, Intel, STMicroelectronics (STM), and private equity firm Francisco Partners announced an agreement to form a new independent company by combining Intel’s NOR flash memory business and STMicroelectronics’ NOR and NAND flash businesses.

Another investment that Intel made in 2006 is worth $600 million in Clearwire Corporation (CLWR), a wireless Internet provider.

For its second quarter of fiscal 2007, Intel reported revenues of $8.7 billion, operating income of $1.35 billion, and earnings per share of 22 cents. This is a year-over year increase of 8% over the revenues in Q2 2006 and a decline of 2% compared to the previous quarter revenues. For the third quarter of fiscal 2007, Intel expects revenues of $9 to $9.6 billion.

Following the launch of the iPhone and release of teardown reports, Intel’s stock rose 53 cents, or more than 2 percent, to $24.27 on July 2nd. It is currently trading at $24.72.

Intel lost out on the processor design win in the iPhone but is working on a low-power, high-performance chip that could be used by iPhone’s competitors. In the long run, Apple shaking up the convergence device marketplace will play in Intel’s favor, as PC and laptop makers prepare their own counter to the iPhone’s ambition as a laptop replacement device. At the moment, the main issue that I have with the iPhone as a laptop replacement is the keyboard.

Intel’s Ultra Mobile PC initiative is the one to watch as these trends start taking shape. As I mentioned earlier, with extreme miniaturization, Power becomes a massive problem, and there are only a few companies with more low-power design capabilities than Intel. Of course, TI is another.

At the end of the day, Intel’s big win will come not from providing a piece of Flash to Apple, but more from the iPhone’s positive impact on the Ultra Mobile PC movement. [Related reading: iPhone and the Future]

As a final point, I would note that after a somewhat schizophrenic stance on the issue, Intel has recently joined MIT’s Nicholas Negroponte’s non-profit One Laptop Per Child (OLPC) initiative. The viability of this project, also, has major power supply and power consumption related concerns, and uses a processor from competitor, AMD. My guess is, Intel will learn from this project, and figure out its own for-profit strategy for the Ultra Mobile, Ultra Low Cost PC market.