The Problem With Paid Search
Ad visionary ducks out. He built the hippest ad agency in the country, and now Alex Bogusky is resigning from MDC Partners. If advertising had celebrities, Bogusky would easily qualify, having been a founding partner of Crispin Porter & Bogusky, which Ad Age calls "one of the country's most talked about - at times lauded and hated in equal measures - shops." Even to those not in ad circles, Bogusky might be known for resurrecting the Burger King "king" figure, as well as Orville Redenbacher, and creating the anti-smoking "Truth" campaign. In 2008, Fast Company wrote: "There is no more adept a mechanic of cool, and Bogusky can give it - and take it away." Now he's stepping away from his unofficial role as chairman of cool to pursue his own projects, which recently have included books like "The 9-Inch Diet" and "Baked In." Watch Bogusky talk about the 10 levers his firm uses to lead, rather than follow pop culture trends.
Buying the right keyword. Last year, 365 Inc., an online retailer based in Birmingham bet big that once the World Cup started people would search online to find out more about vuvuzelas, the horns blasting from the stands during the games. With minimal competition, reports the Wall Street Journal, they bought the keywords "soccer horn" and "stadium horn" and purchased several thousand horns, raising $240,000 in sales. But other small businesses, which spent a combined $5.4 billion on pay-per-click ads last year, don't always make out as well. Anticipate what consumers will type into a search box to try to find your product while your competitors do the same is tricky. Modern Brands, another online retailer, had to buy "steak branding iron" instead of "branding iron," if it wanted to attract grillmasters instead of ranchers. One search marketing CEO told the Journal that he stops buying the terms "AWOL" or "Don't Ask, Don't Tell" on behalf of his military law firm client when the terms are mentioned in the news because the prices get prohibitive.
What a Supreme Court decision means for start-ups. Patent reform supporters like Fred Wilson were hoping that a Supreme Court decision handed down this week would help limit the often vague "business method" patents and software patents that they say stifle innovation. That result did not come. "[T]he Supreme Court basically punted on taking any stand on business method patents," Wilson writes on his blog, avc.com. "While patents are often thought of as protection for 'the little guy,'" he continues, "the truth is most patents are owned by large companies and increasingly by patent trolls." For sure, Wilson has a bit of an agenda as he admits that nearly a third of his portfolio companies are being attacked by what he refers to as "patent trolls." He does, however, have at least one supporter in Congress. "[T]he justices needlessly left the door open for business method patents to issue in the future," Senator Patrick Leahy said in a release, "and I am concerned that it will lead to more unnecessary litigation...and it is time for Congress to act."
How to pay your employees when you're just getting started. Founders might be willing to work days and nights unpaid to build their company. Employees--maybe not so much. Business Insider suggests five alternatives to compensate employees at a start-up when you're strapped for cash, namely: offering them stock, tying raises to achieving milestones, hiring interns, hiring folks with a "cash cushion," who might temporarily be willing to work for less, and sticking with independent contractors over full-time staff.
How to earn tax deductions while on vacation. On the eve of the long Fourth of July holiday weekend, the Los Angeles Times has an interesting article on how some vacation expenses can be written off as tax deductions. No, it's not cheating. The trick is to incorporate some aspects of charitable work into your vacation plans. For example, the Times tells the story of an accountant who is an avid cyclist who was able to write off a weeklong bike-trip from Burlington, Vermont to Portland, Maine, since it was part of a charity ride for AIDS research. Sound too good to be true? As IRS Publication 526 explains, "The deduction for travel expenses will not be denied simply because you enjoy providing services to the charitable organization." As with all tax issues, the devil is in the details, so it's probably a good idea to discuss your plans with a tax consultant and keep meticulous records.
High hopes for clean tech IPOs. Venture capitalists' fondness for the clean technology sector is nothing new, but news that first-day Tesla shares closed more than 40 percent above their original IPO price is bringing renewed optimism for additional clean tech IPOs. One industry executive told BusinessWeek that the Tesla IPO "is a real confidence builder, proving that things are moving in the clean tech sector and that there's real deliverables," in an otherwise bleak period for the IPO market.
iPhone 4 gets slapped with a suit. We all saw it coming. First came the slew of customer complaints about the iPhone 4's faulty reception, then Apple's scripted response to the phone's inherent issues, and now, (another) class-action lawsuit. Gizmodo reports that two Maryland natives, Kevin McCaffrey and Linda Wrenn, are charging Apple and AT&T with, among other things, general negligence, breach of implied warranty, deceptive trade practices and fraud by concealment. The issue at hand is the gadget's all-around antenna design. Holding the phone a natural way interrupts reception, and while consumers see this as a defect, Apple CEO Steve Jobs recently claimed users are just holding it wrong. Just days ago, another law firm that previously sued both Facebook and Zynga announced it is in the process of pursuing a similar suit.
Angel investing by the numbers. Culling data from the Kauffman Foundation's Angel Investor Performance Project, peHUB sees grim returns for angel investors. With a focus on first round investments in early-stage high tech companies the post reviews 56 angels with exits from 112 companies. Of the angels in this data set 66 percent made less than what they invested and 45 percent saw no return at all. Though an angel will likely have a lot of questions about your company, here are 5 you should ask them and some tools to help you locate an angel.
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