KnowNOW!

Global Economic Watch

Syndication

Recent Posts

Tags

View more

Other Useful Blogs

Archives

  • Global Business Case Study: Wal-Mart's Push to Become Relevant Online

    Wal-Mart is investing resources into trying be more competitive online, where the retail giant has struggled to be relevant against Web-focused Amazon and EBay. Businessweek 's Matthew Boyle and Douglas MacMillan report that while Wal-Mart CEO Mike Duke is making a big push with @WalMartLabs, the company may be too far behind its competitors to become more relevant in the online shopping business. Wal-Mart’s lackluster online history has deep cultural roots. The organization has long been dominated by store managers who feared e-commerce could cannibalize in-store sales, and thus their bonuses, according to a former Walmart.com senior executive. In Walmart.com’s first few years, store managers fought against putting the site’s Web address on shopping bags. Among physical retail outlets, Wal-Mart generally has the lowest prices on the broadest assortment of goods. The company has struggled to replicate that advantage online. A March report from William Blair found that Amazon was the “clear leader” in online pricing. Amazon also has 14 times as many products. In digital camcorders, for instance, Amazon offers 2,016 varieties, vs. Walmart.com’s 96, according to a February report from Wells Fargo Securities (WFC). Shoppers have noticed. Internet traffic researcher comScore reports that Walmart.com saw 35.8 million visitors in June, a little more than a third of Amazon.com’s traffic and half of EBay’s. It seems as though this next year will be a big test for Wal-Mart's online ambitions. Whether the company is successful or not, its approach will make for one interesting case study in Twenty-First Century global business strategies. Read Wal-Mart’s Rocky Path from Bricks to Clicks here .

  • Facebook's Status as a Business Gets a Thumbs Up as Revenue Starts to Outpace Costs

    September 2009 should go down as an historic turning point for social media, as Facebook is now bringing more money in than it is paying out. That doesn't necessarily mean that is is profitable yet, as Douglas MacMillan writes in BusinessWeek : Rather, the cash it generates from advertising and other forms of revenue now exceed the cost of servers and other capital expenditures required to keep Facebook running. One-time costs, like the reported $50 million acquisition of Friendfeed last month, and operational expenses like personnel, are not included in this equation. Outside investments in the company, like the $200 million it raised from Digital Sky Technologies in May, are not accounted for either. Facebook has never disclosed its revenues, but board member Marc Andreessen recently told Rueters that the site is on track to generate over $500 million in revenues this year. The same day it announced its cash flow milestone, Facebook said it has added 50 million users in the past two months — bringing its total user base to 300 million and its signup rate to roughly 806,000 users per day. That’s a huge amount of traffic to support, and the site’s accumulating stockpile of photos, videos, and other content requires an ever greater number of expensive servers. This was a serious problem for Facebook as recently as March, when my colleague Spencer Ante reported that it was seeking $100 million in debt financing directly related to server costs. Now, it appears that economies of scale are working in the company’s favor: the more members it attracts, the less it has to pay to support each one. Read the full article here . And listen to, or download, Marketplace radio's coverage of the news here .

  • Breaking Down the Three Levels of Social Networks

    Search and social networking giants from Facebook to Microsoft are acting as social scientists, examining user behavior and how we all interact with others online. The ultimate goal is to try to figure out what ads will make us click, read, and buy. Microsoft researcher Danah Boyd breaks social networks into three different categories: "personal networks", "behavioral social networks", and "articulated public networks." She explains the groups in this video from BusinessWeek ( click here to view ) :

  • BusinessWeek and ZoomProspector on Finding Best Small Cities for Startups

    GIS Planning , a geographic data company that bills itself as "the world leader in online solutions for economic development," has an online tool designed to help entrpreneurs find the best place to locate new companies. At ZoomProspector.com , you enter the criteria that is most important to you about a location, and you get regional data designed to help you make your decision. BusinessWeek recently used ZoomProspector to find the best small city in each state to start a company. And the first thing you learn in John Tozzi 's article is that bigger cities do not necessarily make better places to start a business. In high-growth and more conventional businesses, many entrepreneurs find that bigger isn't always better when it comes to selecting a place to start a company. "People are being drawn by lower cost of living and better quality of life," says Jack Schultz, founder and CEO of industrial developer Agracel of Effingham, Ill., and author of Boomtown USA: The 7½ Keys to Big Success in Small Towns. He also says states and cities are beginning to recognize entrepreneurs as a "third leg" of economic development, as important as retaining existing jobs and attracting large corporations. While startup meccas like the Bay Area offer concentrations of talent and investors, new companies there face plenty of competition for those resources, and the cost of doing business is high. In smaller cities, new businesses enjoy lower costs and a higher profile to attract workers, and may be able to get government incentives to create jobs. The below heat map from ZoomProspector shows startups per capita across the country. (The darker the red, the more startups per capita). Read the full BusinessWeek article here . And look at a slide show of each state's best small startup city here .