Windows Is Cheaper, but There’s Danger There

The Wall Street Journal profiles the new installment of Windows and Microsoft’s efforts to strike back at Apple and its enormously successful John Hodgman and Justin Long “Get a Mac” campaign.

In a new chapter to its ad campaign that will begin airing during the NCAA basketball playoffs on CBS Thursday evening, Microsoft will begin hammering on a theme that could resonate in these times of economic hardship: how much less expensive Windows PCs are than Macs. For the commercials, Microsoft’s advertising agency, Crispin Porter + Boguksy, recruited prospective computer shoppers in the Los Angeles area through Craigslist and other sites, with a tantalizing offer to give them between $700 and $2,000 to purchase a new PC.

According to Brad Brooks, corporate vice president for Windows consumer product marketing at Microsoft, the agency told recruits it was a market research firm and didn’t mention it was working with Microsoft. The recruits were told they could keep whatever money they didn’t spend on a PC so they had incentives to look for good values.

The first installment using Jerry Seinfeld was apparently confusing (though I liked the ads). The next set of commercials “I’m a PC” were bland and disappeared into the background.

As the WSJ excerpt above says, this time the agency is using cost as a hook during the recession. The ad is relatively effective; the message is “you can get a Windows PC for much less than a Mac.” With sarcasm the ad also “disses” Mac owners’ arrogance (as perceived by Microsoft and its agency): “I’m not cool enough to be a Mac person.” 

However, there are two potential problems with this “price” campaign as I see it:

• The message that Windows machines are “cheaper” could reinforce the product’s lower quality image in the market
• Taking the argument to its logical conclusion takes us to netbooks. The WSJ article, though not the ad itself, mentions that you can get a netbook for $300 (or less).

The least expensive Windows machines are indeed netbooks, which are trendy, offer utility and even a “cool” dimension (overcoming the “low-quality perception” issue with more conventional laptops). But Microsoft is ambivalent about netbooks and doesn’t really want people buying that many netbooks because they cut into margins. 

Still the campaign has a decent chance during this recession to make some gains with consumers, more of whom are shopping price than before. If I were at Microsoft’s agency for the campaign, Crispin Porter + Boguksy, I would emphasize the value one gets for the money rather than focusing largely on “cheaper.” (Could also focus on data like this.)

Landlines That Do More

Verizon has introduced a device called the Verizon Hub in a bid to make the home phone more dynamic and prevent further declines of the wireline (wireless only households in the US are estimated to be at about 18% or so). It uses both a wireline and wireless broadband Internet connection.

According to the press release:

Information will be at a family’s fingertips, literally from an easy-to-navigate touch screen with clear icons on the Verizon Hub. Families will start and end their days with nuggets of customized information from the Verizon Hub:

• Check local traffic and weather in the morning before leaving the house
• Update your calendar and automatically receive a text when an appointment changes or as a reminder not to be late
• Get directions to the new site when the location for soccer practice is moved
• Find the number of the new pizza parlor to order a pie
• Preview the trailers from an upcoming movie that you might want to take the family to over the weekend, then purchase tickets using the Verizon Hub

The Hub is quite similar in intention and design (touch screen) to the AT&T Home Manager (a landline phone with a touch screen), which has received mixed reviews.

I haven’t used the Verizon Hub and it’s not clear how much the device costs — that will be a driver of success or failure. The “closed universe” of the AT&T Home Manager will be mostly unsatisfying. Beyond cost, the success or failure of these devices, will be the degree to which their screens offer real utility and something that approaches genuine Internet access.

Interesting: AT&T ‘HomeManager’

It apparently costs $299 and is built by Samsung: the AT&T “HomeManager”:

Conceptually, this is a very compelling device and from what I can tell, it seems to do lots of stuff. However it still may be perceived as unnecessary; it’s not a phone, a laptop or TV and doesn’t appear to offer radio. You don’t seem to be able to search on it (there’s “Internet snacking”), although there’s a touch screen interface that will allow browsing of certain content categories. 

This is similar to what I always thought the old Commoca would be: a substitute for a laptop in the kitchen that permitted Internet access, would offer news, address book, a calendar, etc.  Apple in fact has created this hypothetical device in the iPhone (Internet plus applications) but on a form factor that isn’t right in the Kitchen. AT&T should’ve worked with Apple to create this, although Apple would potentially have resisted. 

Yellow pages is one of the functions in the HomeManager, which is another measurable distribution medium for AT&T advertisers. 

If this device, which I haven’t held in my hand, were slightly larger, could function as a “video phone,” radio and/or had more true Internet functionality it could probably justify the $299 price tag. As such it probably needs to come down in price to less than $150 to gain acceptance and/or evolve to offer more than it currently does.

It’s available in selected US cities now.

Update: I stand corrected, it is a phone

Dueling Mac-PC Campaigns Mirror Election

The NY Times has a longish article about the next phase of the Microsoft “take back the brand” campaign. Gone is Seinfeld and up next are ordinary people, a range of celebs and a John Hodgman lookalike:

One new Microsoft commercial even begins with a company engineer who resembles John Hodgman, the comedian portraying the loser PC character in the Apple campaign. “Hello, I’m a PC,” the engineer says, echoing Mr. Hodgman’s recurring line, “and I’ve been made into a stereotype.”

The strategy to use the Apple attack as the basis for a counterstrike is typical for the agency behind the campaign, Crispin Porter & Bogusky.

What’s fascinating about this — as the Times points out — is that it resembles the fall election campaign: PC has been “defined” by the “I’m a Mac” campaign and now Microsoft is trying to “regain control of the narrative.”

I liked the Seinfeld ads, though most did not.

In the earlier Democratic primaries Hillary Clinton was a PC to Obama’s Mac. Now Microsoft appears to be taking a more “populist” approach in its ads, taking “offense” at the impliedly elitist Mac campaign. In this way these dueling ad campaigns shadow what’s going on with the US presidential election.

How will the Mac campaign respond?

New Reader the Future of Newspapers?

Newspaper subscriptions have been falling steadily for several years. Amazon’s Kindle, which appears to be a hit, held out the promise of reviving them for the Internet generation. The Kindle offers subscriptions to popular newspapers but (in my view) is an awkward device for several reasons.

Enter a new newspaper reader that appears much more elegant than the Kindle, with better resolution, from a company called Plastic Logic. The NY Times covers the device, which goes on sale next year. No price has been announced to date.

According to the article in the Times the device is updated through a wireless connection and “can store hundreds of pages.” It’s unclear whether the device is flexible but Plastic Logic has demo’d a range of flexible screen products. This one features a newspaper:

This device appears to have great screen resolution (not sure about color or touch screen capabilities). Priced right I predict it would be a big success and could boost newspaper subscriptions. It’s like print yet delivered electronically with all or most of the capabilities of a newspaper site.

It also raises the intriguing question about this as a general Internet access device.

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Esquire issues magazine with “electronic ink” cover:

GPS and Triangulation in Laptops

One of the developments that may boost location on the Internet is GPS and other location aware technologies in the computer itself. Dell is integrating Sprint EVDO into its laptops, with GPS. Laptops are outselling bulkier desktop PCs and that trend will only increase.

Skyhook Wireless just announced a “hybrid positioning system” that uses GPS, cell tower and WiFi triangulation in mobile handsets to complement and compensate for the deficiencies of one another. Those combined technologies will probably equally make their way into laptop hardware eventually. Skyhook has also been working on trying to get location into the browser, something that Mozilla is interested in for future versions of Firefox.

The challenge of the hardware/EVDO solution is that the information needs to be conveyed to the publisher or the browser or ad server to take advantage of it. How that might happen is beyond my technical understanding, but I’m sure it could happen.

The point here is that there are an increasing numbers of ways that location will be disambiguated, accordingly.

Local Stores Caused Me to Buy a Mac

This past week I bought a Mac. Way back in the old days (a decade ago) I was a Mac user. My wife has been loyal to Apple all along and now has a 24 inch iMac. But in my world, first as a lawyer and later in other professional incarnations, a Mac was incompatible with colleagues’ machines and inconvenient. When I left Kelsey in April of 2006 I decided to buy a Toshiba laptop after a fair amount of online research. The model I got was well reviewed and reasonably priced. In the end it turned out to be a mediocre gray box.

The trackpad failed after about a year. And three months ago I got a virus (despite anti-virus software that compromised the machine’s performance). That was a horrible episode, which mortally wounded the computer. I managed finally to extricate the machine from the grip of the virus but then other things started happening. Finally, the machine started spontaneously quitting on me last week.

I literally use my computer 24/7 so there was no time to go out and find someone to diagnose and potentially fix it. It was pointless also to try and contact the manufacturer. (I know from experience.) I was assuming the need for a new hard drive, etc. and a couple hundred dollars at least in repair costs. I also expected that I would also have to replace the machine soon anyway even if it could be repaired. So I cut to the chase, so to speak, and decided simply to replace the machine.

Several friends were somewhat relentlessly lobbying for me to get a Mac. I was open to that but also assuming I would buy a new PC. My thoughts were divided between buying a higher end machine that was presumably more reliable or a cheap PC that I wouldn’t really care about and would last a couple of years: sort of a “beater” to invoke a used car analogy. I decided on the latter category. I fixed my gaze on well-reviewed, but inexpensive boxes from Lenovo and Dell. My conclusion was that it makes no sense to spend more than $2K on a PC because they need to be replaced every two years.

But here’s the rub: neither machine was available immediately. There was no store I could go to to buy either computer. I had to buy them online; and the earliest I could expect to get them was “3 to 5 business days.” That means about a week in reality. I couldn’t wait that long.

Enter the Apple store.

Here’s where the personal story dovetails with my analyst coverage. The Mac’s reputation for quality, the availability of local techs (in store) to service the machine, but especially the fact that I could walk in and buy it today, all trumped the PC’s lower price. Also the fact that there are several ways now to run Windows on a Mac (Parallels, Boot Camp, Fusion) removed the final barrier for me. In addition, I had familiarized myself with the various models up close, by visiting the Apple store many times in the past couple years. The “feel” of the keyboard on the Macbook was especially appealing to me. That’s not something I could have readily experienced but for the Apple stores.

Honestly, had there been local stores where I could have purchased the Lenovo or Dell models I identified I probably would have bought one of them. But there weren’t so once again I’m a Mac user.

Stepping back, my process exemplified consumer purchase behavior at large:

• I did lots of online research, reading reviews at “trusted” vertical sites like PC World and CNET.
• I used search engines to search on “generic” phrases like “Best PCs for under $1000″ and “top rated laptops.”
• I searched on brands and branded models to compare prices.
• I went to shopping engines to look at prices.
• I also visited manufacturer websites.

This is what consumers do now as a matter of routine:

Source: Etailing Group/Krillion, 2008

In the end, I bought the machine at a local store because I could get it today and didn’t have to wait. I also had recourse locally to the Apple store, if the machine had a problem or needed service in the future.

Other than in the Travel category, product-related e-commerce in its original form (buying online from a no-name etailer) is an endangered species. Exceptions include trusted sites such as eBay and Amazon and the emerging trend “buy/reserve online and pick up in store.” But the coming, mass syndication of local inventory data will put immense pressure on pure-play, non-branded etailers and e-commerce only shopping engines.

Indeed, e-commerce is dying. Long live Internet-enabled offline commerce.

Eye-Fi Uses Skyhook for Auto Photo Geotagging

Eye-Fi, which makes memory cards for digital cameras, has introduced new cards that allow wireless uploading of photos and automatic geotagging, using Skyhook Wireless’ WiFi triangulation technology. The premium card includes WiFi hotspot access for a year.

From the press release:

Eye-Fi Explore allows users to automatically send photos directly from their camera to their PC or Mac, and to one of 25 online photo sharing, printing, social networking, or blogging sites using their home wireless network. Eye-Fi partnered with Skyhook Wireless to provide geotagging capabilities and Wayport to enable hotspot connectivity for the Eye-Fi Explore.

Through a partnership with Skyhook Wireless, the Eye-Fi Explore will allow users to map where their photos were captured with automatic geotagging. The card uses built-in wireless technology to locate nearby Wi-Fi access points when pictures are captured within the Skyhook coverage area. The Eye-Fi service uses this information to encode each photo with geographic locations, and the images arrive on the user’s computer and online sharing account automatically tagged.

The Eye-Fi Explore wireless memory card will also give users the freedom to upload photos while away from home at one of Wayport’s 10,000+ hotspot locations. By simply turning on the camera in a Wayport location, the card will automatically connect to the Wi-Fi network and begin uploading photos to the Web and the user’s PC or Mac.

Flickr, Panaramio and other services that overlay images on maps will immediately benefit from this kind of capability. Indeed, cameras so equipped could be used to automatically create databases of place specific images, local business storefronts and so on with comparative ease. Most digital cameras will have WiFi in the next year or two.

Mobile News from 3GSM

I’m trying to get a bunch of work done so not posting as much this week. But here are some stories from today and yesterday over at Local Mobile Search, mostly news coming out of Barcelona:

• Yahoo! Becomes Mobile Social Net with ‘oneConnect’
• Nokia Adds Google Search, Yahoo! Bounces Google at T-Mobile
• AOL Joins the ‘Open Platform’ Club
• Microsoft Gets into Danger (Inc.)
• Garmin Showing Nuvifone at 3GSM
• Boingo Bringing Cheap Wi-Fi to Handsets
• Nokia Rebrands, Relaunches Its Ad Network
• Sony’s XPERIA X1: iPhone Envy or Revenge of the Walkman?

Google, Apple, Google, Apple . . .

Over at LocalMobileSearch, I round up several stories today about Google’s self-interested love affair with the iPhone and how the iPhone is “making the world safe” for the Android platform.

I also discuss the Eric Schmidt conflict of interest (as a member of Apple’s board) in my post at SEL on these same issues.

Home Phone as Internet Access Device

Engadget has an interesting write-up of a new “home phone” that offers content and presumably Internet access via a touch screen. This is something that Commoca tried to build a couple of years ago (with an emphasis on advertising). The idea was an IYP on the phone and/or to offer a kind of alternative to the PC in the kitchen, for those without one. Commoca appears to be defunct even though a site still exists.

photo credit: Engadget

This phone appears to offer a much broader range of capabilities. Most people don’t have wireless networks in their home and would want Internet access in the kitchen (or elsewhere) to read email, look up recipes, address/phone numbers and so on. One could imagine a broad range of functionality and capabilities on such a phone. It would also be a potentially powerful advertising vehicle for direct mail/couponers and other categories of (local) businesses.

I would imagine that there would be consumer demand; the only issue is price: how much would it cost and would consumers have to pay separately for a service that provides Internet/content access?

Apple vs. Sprint: A Tale of Two Stores

Yesterday I was in both the Apple and Sprint stores in the SF Bay Area, where I live. What a contrast.

The Apple store was jam packed with people fondling the various devices and computers. Roving customer service reps where checking out people standing in line with handheld “mobile registers” to minimize wait times. In general the mood was friendly and upbeat.

Just a few blocks away was the Sprint store where I had to return, for the second time, after technicians failed to fix both my phones (despite saying they had). There were only a few customers in the store, outnumbered by sales people. Yet there was still a wait to be helped. Many of the reps were talking to each other or playing with their personal phones. Customer service there was generally dull, defensive or indifferent.

I’ve been in this Sprint store previously and witnessed customers having rage episodes in front of the reps. It’s not pretty but I can see why it happens: poorly trained reps frequently provide incomplete or inaccurate information creating false or unfulfilled expectations.

What Sprint at a corporate level doesn’t seem to get is that there’s a connection between service and churn. The Sprint shopping experience is also totally sub-optimized. The stores could be a much more lively and interesting place and could help Sprint attract and retain customers, rather than being a dreary place that people are compelled to go to get work done on their phones.

For example I asked about the new Palm Centro, which Sprint has an exclusive on for a scant 90 days: “When are you guys going to get the Centro?” The response I got from a numb and almost totally indifferent salesperson was, “I don’t know.” Not, “We haven’t received them yet, but I can put you on a list and notify you when we do have them” or “I’m not certain but I’ll check for you.” I’m a lead that they don’t recognize, nor is there any incentive to do so.

This is the kind of complacency that’s occurs when the corporate types are essentially asleep at the wheel and/or companies are insulated from competition. That’s not entirely true in the U.S. but there are obvious barriers to switching that protect carriers to a degree here.

The Apple Store has been a huge part of the company’s recent success; the ability to go in and play with the products only makes people want them more. The ability to check your email and get on the Internet there too is another reason some people go into the store. (I checked into my flight for SMX Local & Mobile in the Apple Store.)

Sprint could have a similar competitive advantage if it really took customer service seriously and revamped its stores to make them more interesting and engaging places. But alas, while some get it, others obviously don’t.

Peter Norvig Says No ‘GPhone’ Device

Google’s Peter Norvig says that there’s no GPhone (proprietary hardware device) in the works. The on-again, off-again rumors are perplexing, especially given that a number of people claim to have seen an actual device:

Dan Roth, president of VoiceSignal, a division of Nuance Communications Inc. which makes speech recognition technology for cellphones, is under NDA. Mike Phillips, founder of Vlingo Inc., a speech recognition start-up, has seen the phone – but neither company would say whether they’re working with Google. Paul Ferri, a founder of the Waltham venture capital firm Matrix Partners, has seen it, as has Murali Aravamudan, founder of a start-up called Veveo that is building a video search engine especially for phones. “We’d love to support a Google phone, if and when it becomes available,” Aravamudan says, adding that there isn’t yet a deal in the works.

There’s more at Local Mobile Search.

WSJ: The ‘GPhone’ Is Real

The Wall Street Journal (sub req’d) is reporting that Google is making a push to court wireless carriers in an effort to accelerate mobile ad distribution and revenue growth. The article also contends that Google is actively working a mobile handset, the so-called “Google Phone” or “GPhone,” and possibly envisions itself an operator one day of an ad-supported free mobile service.

According to the WSJ:

[Google] is drafting specifications for phones that can display all of Google’s mobile applications at their best, and it is developing new software to run on them. The company is conducting much of the development work at a facility in Boston, and is working on a sophisticated new Web browser for cellphones, people familiar with the plans say.

The prize for Google: the potential to broker ads on the mobile phones, complementing the huge ad business it has built online. Google even envisions a phone service one day that is free of monthly subscription charges and supported entirely through ad revenue, people familiar with the matter say…

The rest of my post is at SEL.

iPhone: Now Over 1 Million Served

Wall Street analysts had variously estimated that the iPhone sold somewhere between 500K and 750K units in the several days since its June 29 launch. Now comes news that there were, in fact, more than one million activations of the iPhone already. That means, obviously, more than one million were sold.

Read the rest of this post on LocalMobileSearch.

My Five Minutes with the iPhone

After taking my seven year old daughter to Ratatouille this weekend (excellent) I had to stop by the Apple store and get my hands on an iPhone. I waited with the throng to actually hold and manipulate one. I eventually got to use one for about five minutes. Although that is hardly enough time to evaluate the device, I did have some preliminary reactions:

• It’s a beautiful piece of hardware and much more elegant and captivating than any other cellphone on the market
• The screen resolution is amazing
• Internet browsing is not entirely intuitive (”how do you bring up the keyboard to enter a URL?”). But once I got it it was a much better experience than any other phone I’ve used to date. It was on a wifi network and so much faster than on AT&T’s EDGE network
• The phone is packed with features and is generally more fun and intuitive to use, accordingly, than conventional mobile phones
• I didn’t test out the iPod aspect of the phone
• The keyboard does take some practice. Mossberg characterized it as a “non issue.” However, I would say that it does have a learning curve
• The interest level among people in the store was very high

The rest of this post is on LocalMobileSearch.

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Related: For those looking to spend an hour with the most exhaustive discussion of the iPhone yet, read Engadget’s mixed review.

iPhone Countdown Ends

The iPhone goes on sale today at 6 p.m. local time at Apple and AT&T stores. Just as the iPod didn’t invest the MP3 player but significantly improved the overall user experience, the iPhone looks poised to do the same thing in mobile.

Here are reviews and coverage from the past 24 or so hours:

• David Pogue’s entertaining video demo of the phone from the NY Times
• Interviews with Steve Jobs and AT&T CEO and Chairman Randall Stephenson at the Wall Street Journal (subscription required) and USAToday.
• The NY Times’ John Markoff writes about the decision behind putting the iPhone on AT&T’s slow EDGE Network
• The WSJ writes about the impact of the iPhone (so far) on Apple and AT&T shares and AT&T’s carrier competitors.

The rest of this post is at LocalMobileSearch.net.

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Related: By earlier this March a million people (2/3 of whom aren’t AT&T subscribers) had asked to be notified of the iPhone’s release. By mid June the demand had grown to roughly 10% of the U.S. mobile market.

Also: Eric Auchard (Reuters) writes about the lines outside the Apple Store in San Francisco and Matt Marshall at Venture Beat talks about third-party development efforts for the iPhone.

iPhone Frenzy Now Begins in Earnest

Mossberg’s and David Pogue’s reviews are in and they essentially say that the iPhone does deliver despite unprecedented hype. Here’s Mossberg from the WSJ:

We have been testing the iPhone for two weeks, in multiple usage scenarios, in cities across the country. Our verdict is that, despite some flaws and feature omissions, the iPhone is, on balance, a beautiful and breakthrough handheld computer. Its software, especially, sets a new bar for the smart-phone industry, and its clever finger-touch interface, which dispenses with a stylus and most buttons, works well, though it sometimes adds steps to common functions . . .

The iPhone’s most controversial feature, the omission of a physical keyboard in favor of a virtual keyboard on the screen, turned out in our tests to be a nonissue, despite our deep initial skepticism. After five days of use, Walt — who did most of the testing for this review — was able to type on it as quickly and accurately as he could on the Palm Treo he has used for years. This was partly because of smart software that corrects typing errors on the fly.

Here’s Pogue:

As it turns out, much of the hype and some of the criticisms are justified. The iPhone is revolutionary; it’s flawed. It’s substance; it’s style. It does things no phone has ever done before; it lacks features found even on the most basic phones. . . . But even in version 1.0, the iPhone is still the most sophisticated, outlook-changing piece of electronics to come along in years. It does so many things so well, and so pleasurably, that you tend to forgive its foibles.

The main flaw say both is the AT&T infrastructure and slow speeds of its EDGE network. Later iPhones will work on the 3G network and be faster. Apparently its WiFi capabilities are something of a saving grace here.

The lines have already started and will longer as the hype now intensifies. It’s like a blockbuster movie opening.

All along the frenzy surrounding the iPhone has been partly about fashion but mostly about function — and perceived usability. Everyone wants a better mobile device and a way to get online content easily on their phones. This is finally it.

And it’s a watershed moment for the mobile Internet as a result.

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More reviews from USAToday and Newsweek.

Caliber: Closing the Loop between Online and Offline Purchases

A few months ago I did some consulting work for a startup in the Seattle area called Caliber Data. At the time they literally swore me to secrecy (with NDAs) about what they were doing. They brought me in to kick the tires of their model and give them some outside perspective on aspects of the local search market.

In a post in late March I alluded to them obliquely as a company that had developed a provocative system for closing the loop between online advertising and offline transactions. (In fact the post is so obscure that I can’t find it now!)

Regardless, these guys are now out in the world talking to potential partners and I’ve been told that people won’t show up at my house if I write about them now.

Mike Orren of Pegasus News guessed what it was when I did that original post. He inferred that there was a loyalty card at the center of the system. At the time I could neither confirm nor deny the guess but I told Mike he was a very smart guy.

Caliber’s system ties online advertising to the point-of-sale with a consumer loyalty card (but can also capture cash transactions). The merchant pays a marketing/success fee upon an actual consumer transaction. This is true CPA for the merchant – a sale rather than a click, even a call, which is a proxy for a potential sale.

The risk is transferred – on the continuum from CPM to CPA – from the merchant to the publisher or distributor. This is going to be scary to some publishers but it’s consistent with other moves in the local market (e.g., pay per booking). Google is testing CPA and Snap, Jellyfish and others have been using CPA models for some time. E-commerce affiliate models have existed since the beginning of the Internet.

I previously speculated about some benefits of CPA models for locally oriented publishers:

There are differences among all these models but they’re essentially seeking to deliver better prospects or actual sales with correspondingly higher ad/commission rates. What you can get for a click and what you can get for an actual customer are quite different.

(Citysearch EVP Scott Morrow spoke to me awhile ago about moving to a model that charges different rates based on “lead quality.” There’s a sales challenge there perhaps but it’s interesting to consider the continuum: clicks on the left and commission-based CPA on the right, with email, lead gen, chat and calls in between.)

Generally, there’s less of a sales challenge with CPA (unless its definition is variable) because the business understands it’ll pay only upon customer acquisition or its near equivalent. It also addresses click fraud, although I don’t think most SMBs think about click fraud that much. The issue is really “what is a click?”

Widespread adoption of a CPA model could potentially boost local online revenues and make the disparity between online and offline ad rates, if the publisher is also a traditional company, less than they are today with print vs. clicks for example. It also eases the pressure on publishers to have so much traffic volume to make money.

Back to Caliber.

When I first heard about what they were doing, the thing that really captured my imagination, beyond the CPA dimension, was the idea that you really could track online ads to the point of sale. Coupons, which have been around forever, also do this. But for reasons that are not entirely clear, the online coupon market is still immature.

There is something inevitable or inexorable about what Caliber is trying to do for small businesses. The challenge is bringing all the moving parts elegantly together – overcoming the “chicken and egg problem” that plagues many such new ideas. You need the distribution online to interest the merchants and you need merchant participation to get consumers interested, etc. This was a problem with local search itself in the beginning.

Caliber has told me it is currently in discussions with a number of companies – household names and lesser known players — to address these issues, including one major Credit Card issuer. Caliber’s folks say they’ve got the major pieces of the system (and related IP) in place.

I’ve argued relentlessly that the future of online shopping is offline: meaning that the dominant “going forward” model is the Internet driving in-store transactions. That’s always been true for service business and traditional yellow pages advertisers. (Given that fulfillment has to happen locally.) But it’s also true for retail. See, for example, this piece in the NY Times about e-commerce growth slowing. That doesn’t mean that the Internet’s influence is waning – exactly the opposite – it means online purchasing is not going to take over as once thought.

As the Internet’s influence grows but e-commerce slows, the central challenge for everyone in online advertising is how to track that online influence on offline buying. Aside from coupons and calls (to a lesser degree) there’s a “cliff,” after which the consumer becomes invisible and nobody really knows what happens in the local market where the transaction inevitably takes place. While there are convoluted ways to draw inferences and after-the-fact consumer surveys, there’s no real-time tracking beyond what I’ve mentioned.

Caliber’s system makes that entirely visible for both the publisher and the small business advertiser (maybe nationals too). It offers the potential to track the entire process from the search engine or directory or other online consumer destination site right to the local cash register itself.

Microsoft ‘Surface’ and the Ubiquitous Internet

A couple of days ago Ask’s Gary Price posted about Microsoft “Surface” and asked the question: What is it? Yesterday at the Wall Street Journal’s “All Things D” conference that question was apparently answered. Here’s the WSJ article (sub req’d):

. . . a computer designed like a table with a touch-screen. The system, called Surface and aimed initially for use in hotels and casinos, includes features that allow users to buy tickets to events, wirelessly retrieve and display photos and play games. It goes on sale later this year.

I have long been fascinated by Internet kiosks, tablets, microPCs and other devices that allow the extension of the fullness of the Internet experience into other places than home or office. I’ve often talked about a “two device scenario” in mobile, where one device is a phone and the other device is something that makes the Internet more generally accessible than the conventional mobile phone — or even smartphone — would.

Kiosks have been around for a long time and many people are skeptical of them. More recently, NearbyNow has put its shopping-search kiosks in malls and RippleTV is putting display screens in lots of locations. Neither of these is the Internet per se, but these examples and Microsoft Surface point they way to something very interesting in my mind.

Forget for a moment about all the “smart appliances” in the home that are supposed to one day have screens. Let’s talk about the “out of home” Internet. Mobile is crystallizing around a range of things: wifi Internet access on a laptop or other portable PC-type device, mobile phones, in-car/personal navigation devices and, maybe, another category . . . represented by the ability to put a low-cost touch screen almost anywhere.

Yahoo a few years ago to promote the launch of some of its new, dynamic mapping features put some kiosks around New York and San Francisco so people could do map-based lookups at bus stops and other public places. These were essentially mounted touch-screen panels. This captured my imagination and has stayed with me. I imaged a scenario where in the urban core of major cities people could access touch screens with Internet access or some more controlled version of Internet access and get generally the same experience and information they could get online from home or work.

(At various points over the past year or two, I’ve heard two pitches related to variations on this idea.) Or what about ubiquitous bank ATM machines offering Internet access or some form of it?

The local content and ad implications (even e-commerce) are obvious. None of this may ever come to pass — who’s going to bear the costs of setting up the infrastructure (Microsoft?) — but I think there’s something very intriguing to think about in all this . . .

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Related: Sony’s new flexible screens offer interesting possibilities . . .

… and here’s a Today Show video re Surface.