Decoding the new economy

First steps in an online journey

Getting your business online shouldn’t require a doctorate says domain registrar GoDaddy’s international boss

“The days of getting a PhD to get your businesses online are over” declared James Carroll, GoDaddy’s International Executive Vice President last week on a visit to Sydney.

GoDaddy is the world’s biggest internet domain name registration service and Carroll was in Australia to promote the expansion of the company’s local operations.

Australia’s a prime target for the company with nearly half the nation’s two million businesses not having a web presence. “I think there’s an awareness issue about the skill that are needed to get online,” says Carroll.

GoDaddy’s Australia and New Zealand country manager Tara Commerford suggested two reasons why small businesses aren’t going online, “I think it’s lack of awareness and people don’t know how to do it”.

Commerford suggests that simplified online tools are making it easier along with the easy access to other platforms like social media and location online services.

The problem though is these tools are not new, this blog has been discussing how companies need to get online for years and yet the proportion of small businesses getting a web presence has remained fixed around the fifty percent mark.

One of the barriers to getting online is confusion and the new top level domains haven’t helped this by muddying the message about which domains they should be registering under. This is only increasing the fear among small business owners that going online is complex, expensive and risky.

It’s understandable that domain registrars like GoDaddy would push the new domains given the industry’s low margins and need for scale, but that’s not the problem for smaller operators.

The problem for small businesses is getting the basics right with with a mobile friendly website, particularly for hospitality and tourism operators. Having the right domain name is an important first start of an important journey for most businesses.

Internet adoption and wealth

US internet adoption rates tell us much about affluence between different groups

With 85 percent of Americans now online it’s safe to say the internet has reached saturation point in North America.

However not all groups have been as quick to get online and the Pew Internet Survey has a detailed analysis of adoption rates across different demographic segments.

The results aren’t particularly surprising with lower adoption rates reflecting class, race and education differences although older age groups are the fastest growing segment.

Ultimately adoption comes down to affluence with the key chart being the connection rates across income groups.

What the Pew report does illustrate is how critical the internet is to income levels and why it’s important for the disadvantaged to be connected for them to participate in the new economy.

For countries following affluent nations in internet adoption, getting disadvantaged communities connected might be one of the easiest ways they can improve national income, education and well being.

Social media and the changing media landscape

A Reuters report looks at the changing media landscape and how the older news industries’ decline has some way to go yet.

“We seek news on Twitter but bump into it on Facebook” points out the Reuters’ 2015 Digital News Report in its analysis of global media consumption.

The broad trends from surveying over 20,000 online news consumers in the US, UK, Ireland, Germany, France, Italy, Spain, Denmark, Finland, Brazil, Japan and Australia are clear – social media is becoming the main way people are finding their news while television is slowly declining.

Probably most concerning for the television networks how younger viewers have turned away from TV with only a quarter of those aged between 18 and 25 tuning in as opposed to two thirds of those aged over 65.

Given the aging of television network audiences it’s not surprising that last week Australia’s Network Ten, part owned by Lachlan Murdoch, found a lifeline from the country’s main cable network as the broadcaster is finding revenues declining.

The question is how long advertisers are going to stick with television as audiences increasingly move online creating a revenue gap estimated by analyst Mary Meeker to be worth around thirty billion dollars a year.

For the moment, the great hope for the online world is Facebook with Reuters finding the service is dominating users’ time. In that light it’s not surprising the company has such a huge market valuation.

The competing social media services are still facing challenges, particularly with Twitter showing a far lower level of penetration with the general public, leading Harvard professor Bill George to speculate the company risked becoming the new BlackBerry.

While the online services struggle for supremacy and television slowly declines, the real pain continues to felt by the newspapers who continue to find their relevance erode and few of their readers prepared to pay for their content.

The Reuters report confirms the trends we already know while giving insights into the unique peculiarities of each market.

Building local brands

TripAdvisor is showing how the travel industry is adapting to the new world for brands

Last week this site looked at the idea from Colonial First State Funds Management economists James White and Stephen Halmarick that brands are doomed in a world of perfect information.

Forecasting the end of brands is a big call despite the massive changes the internet is bringing to industries. One of the things I suggested is that the concept of the brand – which was largely born out of Twentieth Century mass communications – is evolving with the social media and online world.

This view is born out by Tom Vanderbilt in an article in Outsideonline where he describes how TripAdvisor is changing the way people travel.

In Ireland Vanderbilt claims the hotel industry found TripAdvisor to be a harsh wakeup call that saw local hospitality businesses lift their game as they realised customers were now far better informed.

Across the Atlantic on Mexico’s Yucatan peninsula Vanderbilt describes how hotel owners in the town of Tulum had to realign their listings and marketing when TripAdvisor changed how they were grouped in the region. It shows how users are searching and finding accommodation.

Importantly for guests, hotel managers are using online reviews to measure how their premises are measuring up to expectations through social tools and using the results to justify capital expenses on upgrades.

This could justify White and Halmarick’s view that the major global brands such as the Marriots, Hiltons and Sheratons are in decline however it more likely shows those chains are having to raise their game to maintain their worldwide position.

What Vanderbilt, White and Halmarick indicate though is social channels are changing the way the hospitality industry works. This is an opportunity for smaller operators to build strong brands in their own niche or region.

The Internet’s Pax Americana

The US dominates the Internet but will it do so forever?

Tech journalist Kara Swisher has a twenty-five minute interview with President Obama on his relationship with the technology industry and Silicon Valley, it’s an interesting snapshot on how the United States sees its role as custodian of the internet.

In talking about European agencies’ efforts to reign in the power of companies like Google the President is dismissive; “we have owned the Internet. Our companies have created it, expanded it, perfected it, in ways they can’t compete. And oftentimes what is portrayed as high-minded positions on issues sometimes is designed to carve out their commercial interests.”

Obama is absolutely correct to say the Internet currently belongs to the United States, it was the US that developed the technologies and built the initial infrastructure for the global network in a similar way it did for the GPS system.

The internet probably won’t remain the US’s sole domain as China, Indian, Russia and other powers find control of the global communication network resting with the US isn’t in their interests and develop work arounds or rival technologies.

Just as Spain and then the English once dominated the world’s shipping and communications, it may well be the US’s dominance of the Internet is not permanent.

Google’s Microsoft problem

Google’s key revenue source is slowing, where do they go next to avoid falling into Microsoft’s trap?

The one factor that saw Microsoft become the biggest computer software company was the rise of the personal computer, similarly the decline of the PC has seen Microsoft stagnate.

One of the companies that benefited from the forces that pushed Microsoft into stagnation was Google and now it appears they could be suffering the same fate.

Yesterday Google released their quarterly results which showed the rate of growth in online advertising is slowing, which is a worry for the company as internet marketing accounts for 90% of the firm’s income.

Like Microsoft, Google has to diversify. Whether it’s the internet of things, smartphones, apps, driverless cars or something else remains to be seen but the pressure is building. Should the shift to mobile or other advertising mediums accelerate, Google could be looking at a declining market and the same problems as Microsoft.

Daily links – Chinese property developers go onto internet

Chinese internet use and smart phone manufacturers dominate today’s links along with Microsoft and Uber’s latest business changes

Today’s links have a distinctly Chinese flavour around them with a look at how the country’s smartphone manufacturers are coming to dominate their market, Tencent’s plans for global domination and how property developers are looking to the internet to save their falling sales.

Uber and Microsoft make their regular appearances to round out the links in their changes to billing and security.

In his Q&A, S. Y. Lau discusses how Chinese communities are seeing their incomes rise due to the internet. One of the famous case studies of connectivity are India’s Kerala fishermen who used SMS to arbitrage their market. We may be seeing a similar story with Chinese tea farmers.

Microsoft restrict warning of patches to paying customers

In a short term money grabbing exercise, Microsoft have unveiled a plan to only inform enterprise customers of upcoming security patches. My prediction is this won’t last.

Uber cuts prices

Car hiring service Uber has cut its fares in thirty US cities while guaranteeing drivers their incomes. This is probably a move to keep competitors like Lyft at bay.

Tag: internet

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