2010's Dumbest Moments in Business
Each day, Inc.'s reporters scour the Web for the most important and interesting news to entrepreneurs. Here's what we found today:
The year in business worsts. It was the year of antennagate, leaked earnings reports, and "potty-mouthed" CEOs. Fortune's dumbest moments in business looks back at 2010's highlights. Among the foibles? Disgraced BP CEO Tony Hayward's verbal spill—"I want my life back"—after the April oil spill in the Gulf Coast that became a months-long environmental disaster and media circus. On the tech world, the magazine calls out Google's "cumbersome TV venture," the pesky Google Buzz, and Steve Jobs' snippy note to an unhappy iPhone 4 customer: "Just avoid holding it in that way." And Gap's bungled logo redesign—a fashion mistake the clothing retailer will have a hard time living down.
Google fires back. After the fallout from Groupon's $6 billion rejection, Google will now look to buy smaller, less successful online coupon sites, the New York Post reports. Google believes it can rival Groupon, which has an 80 percent coupon market share, by acquiring companies like LivingSocial and BuyWithMe, which are both vying for that left over 20 percent. But backing from Google could push expansion into the 300 markets Groupon currently dominates. Such speculation caps off a year in which Google has acquired 23 companies, raising antitrust concerns about the company's breadth. Yet as the Post points out, Google might want to buy up the emerging coupon space rather than grow organically, a strategy that failed when it missed the chance to buy Facebook in 2006.
Holiday high for Mad Men? With many of the country's largest companies concerned the slight economic recovery won't last long, they're holding back on hiring. Who's gaining? Madison Avenue, where advertising firms' payrolls have jumped 6 percent in 2010. Much of that work is "attributable to agencies taking on tasks that used to be handled in-house by their clients," the New York Post reports. Also, if you're a fan of the show Mad Men it's worth a click just for the Post's oddly photoshopped infographic. Another sign of ad recovery? A report by investment firm BIA/Kelsey yesterday noted that local TV ad revenue will soar 17 percent in 2010, showing a dramatic increase in spending on advertising.
The Internet police have arrived. The Wall Street Journal is reporting that the FCC will approve new rules to maintain net neutrality, a hot topic among many online activists. "Net neutrality has become a contentious issue as worries grow that large phone and cable companies are growing too powerful as Internet gatekeepers," the article noted. "Start-ups and small businesses that rely on the Internet to provide shopping, information or other services to consumers are particularly concerned." The proposed restrictions have drawn praise from many, but some liberal activists say the new rules will do very little to actually protect businesses and consumers. Sen. Al Franken, writing in a blog post, noted that "grassroots supporters of net neutrality are beginning to wonder if we've been had."
Skype assesses its bottom line. After filing an IPO in August, Skype's CEO, Tony Bates, is now looking for ways to attract more paying customers to the company, The New York Times reports. According to the story, Skype made $406 million in revenue during the first six months of this year, a 25 percent increase compared to 2009. Still, however, only 6.5 percent of Skype users pay for service; the rest use Skype to make free online calls to other Skype users. One analyst from Forrester Research tells the Times stats like that will make going public difficult. "I find it hard to understand why an investor would feel enthusiastic about owning that stock when the prospects for revenue growth are dim," he says. "They may be growing revenue, but it's not like its growing to billions of dollars." In an effort to boost revenue, Bates is looking to partner with corporate phone systems, including Avaya, and is also hoping to reach agreements with mobile phone carriers, including AT&T, which has, so far, been reluctant to allow Skype calls on the iPhone.
The myth of "the overnight success." Being an entrepreneur isn't easy. That's the lesson VentureBeat is hoping to get across to any naive, young entrepreneurs out there with dreams of becoming the next overnight success. In a post that discusses six harsh realities of being an entrepreneur, Jason L. Baptiste, himself an entrepreneur, dispels some of the popular myths surrounding running a new start-up. As Baptiste explains, entrepreneurs can't do it all themselves, they will have to deal with frustrating customers, and there is no such thing as an overnight success. "Be prepared to work on your start-up for many, many years," he says. "Overnight success, as defined by the press, is often the result of entrepreneurs who have spent many years shaping and building the company."
SBA gets an online facelift The U.S. Small Business Administration today unveiled a new website, featuring a handy personalization tool that allows users to receive customized information for their small business. The tool, called SBA direct, generates business-specific information on several factors including business type and geography. "Transforming the SBA into a proactive, responsive and 'customer-centric' organization that better serves the needs of the nation's more than 29 million small businesses is an exciting, yet enormous effort," says Karen Mills, the SBA's administrator.
Can a voodoo doll save this company? Connie Pentek of Santa Clarita, California, has been selling homemade French-countryside inspired items for more than a decade—but sales have been slipping during the recession. That is, until Pentek created a small muslin doll meant to be pricked with a pin. It's not consistent with the rest of the product line, but should Pentek transition into making novelty products, like the voodoo doll? Cathering Grooms of the Small Business Development Center at College of the Canyons, offers advice in the Los Angeles Times on keeping the small business afloat.
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CHRISTINE LAGORIO-CHAFKIN | Staff Writer | Senior Writer
Christine Lagorio-Chafkin is a writer, editor, and reporter whose work has appeared in The New York Times, The Washington Post, The San Francisco Chronicle, The Village Voice, and The Believer, among other publications. She is a senior writer at Inc.