Wednesday, December 27, 2006
More Mergers, Vistaprint Gets a Web (of the Internet Kind), and a Software Lament
Mergers & acquisitions in a mature business is the last refuge of big companies who have trouble adapting to the new marketplace. It's also a great place to make money if you're an investment banker. It's not the stocks, it's the fees.
Remember, more than half of all acquisitions fail to deliver on the expectations held at the time of the deal. Markets change, management has to deal with unexpected events, and management cultures and styles take two or three times as long as expected to mesh. These transition costs are almost always underestimated, and don't always appear as lines on financial statements. They're often work undone, customers ignored, new inititatives that are delayed, executives unavailable to direct their workers because they are doing transitional "things."
And don't forget the upheaval among the employees... many of them leave and go to smaller companies and often do well there, bringing a level of experience that the smaller companies could not normally attract. Because management can't give them a straight answer about the viability of their jobs, they start looking elsewhere. It's not that management doesn't want to give a straight yes or no answer about the jobs of their underlings... it's that there is rampant uncertainty for all jobs, including the managers themselves.
That uncertainty also weighs on the customers. It's hard to have demovitated employees working with wary or confused customers. It's not the kind of situation that breeds confidence. What's worse, customers may lose printing company employees they like working with in the process.
As in most markets, their vibrance and innovation comes from the upstarts. In the printing industry's case, the upstarts are not necessarily other printers but purveyors of media alternatives who are competing for the same dollars.
Note that these recent mergers are defensive, they are not to create new markets or new opportunities or to ride new waves of demographic, economic, or technological change. They are a search for ways to adapt the same old tools to new problems. Most times they not work out anywhere close to what they hope. When they do, they are financially successful, but not strategically. There is a point where all the financial clean-up and straightening out has significant rewards and is complete. Then there's the next step: facing a changing marketplace with a winning long-term strategy. That's normally two years or so into a merger that it gets properly addressed, and often the company gets sold again to someone else who can supply that when the financial gurus can't.
Biggest issue? Starting out with a vision for what that newly merged company looks like in a marketplace at least five years from now and the working the reorganization toward that. If cuts are coming, better to make them swift and hard so that the new business gains a footing, even an uncertain one, early. There's nothing worse than a constant parade of "black Fridays" where people look in their check envelopes for the legendary pink slip.
And, just a reminder of what not to do... Radio Shack's mishandled dismissal by e-mail of this year:
John Harland, check printer, is being bought by Ron Perleman's investment group.
Near and dear to my childhood heart is Marvel Comics. Perelman bought that business and killed it, or at least he almost did. It's detailed in a good book called Comic Wars: How Two Tycoons Battled over the Marvel Comics Empire -- And Both Lost.
3Q-06 GDP was revised down to 2.0%, as was expected. My expectation was based on the ISM manufacturing index heading down. Latest reports are that retail sales have started to surge the past few days... makes me wonder if 4Q-GDP may hit 3.0% which would be quite a surprise and would support the Fed's sense that the economy is still quite strong. Based on the heavy discounting going on, I would suspect that the inflation numbers would look pretty good.
What was really funny the past two days was the reports from MasterCard and Visa about how retail sales were down so much from last year. Ugh!!! When you adjust for inflation, this year was about the same as last year! Inflation is 1.8 percentage points lower than last year's increase, so you have to add that to the percentage increase to get a similar comparison. On top of that, I can't remember any year when retailers weren't complaining about holiday season sales not being what they expected. Of course, Amazon broke records again, and that's why the MasterCard and Visa numbers are so important, because they include e-commerce.
How did this slip away from me? A few months ago, VistaPrint announced it was working on some web site products for small business. http://www.vistaprint.com/vp/about/list_press_detail.aspx?pid=294
Then, today, this e-mail shows up:
Are these folks reading Dr. Joe? Seems like that :) What's next for them? I suspect it will be direct mail campaigns as is being marketed by InfoUSA http://www.zipmailusa.com/ and perhaps a business like www.constantcontact.com
When you get a file and it has an unfamiliar file entension, sometimes operating systems can't detect what program should open them. Those mysterious extensions can be deciphered or narrowed-down at http://filext.com/
I ran across a floppy disk that had a ".pre" file on it. The site reminded me that it was a Lotus Freelance file. Gosh, it's been 12 years since I used Lotus Freelance? Amazing... and yet again, another great Lotus product left to die, just like my once-beloved word processor, Lotus Manuscript. Equally amazing is that the files (DOS) can still be downloaded http://www2.support.lotus.com/ftp/pub/desktop/Manuscript/ . Lotus killed Manuscript and bought Ami from Samna Corporation, and it would later become WordPro (which had something akin to the "ribbon" that MSFT is making such a big deal about... except WordPro had it in 1995. Manuscript never made it to Windows. There are still features in there I miss.
Yes, there are others who lament the demise of Manuscript.
Lotus Manuscript was a desktop computer tool way ahead of its time. It was the first desktop-based word processor that catered to the needs of technical documents. In an age when MS Word and Word Perfect were mere document-creating tools, Lotus Manuscript went beyond simplicity. It offered excellent technical word processing capability never before seen at the desktop computer level. The software was so far advanced ahead of its peers that it failed miserably in the market. Its demise after Version 2.0 in 1987 probably fueled the need for its competitors (Word and WordPerfect) to scramble to incorporate technical word processing capabilities... Some of the technically oriented functions offered by Manuscript in 1987 included Screen Capture, Keyboard Stroke Capture, Versatile Common-Language Thesaurus and Embedded Graphics. Most word-processing users of that era did not need those types of capabilities. So, the software mostly languished on the shelves of software stores. The software, however, found ready users among technical professionals — engineers, scientists and researchers. For the few years that it lasted, Manuscript was the word processor of choice for university professors in engineering and science. The technical orientation of the software made it complicated to learn and use. Even trainers cursed the software as they struggled to learn it well enough to teach it to others.
Lotus was a very sad story. They believed that IBM would have the stamina to stick with OS/2 against MSFT Windows, and they didn't. So Lotus Freelance, which was years ahead of Powerpoint, died from neglect, as did Lotus Organizer, which was killed by MSFT Outlook and Palm Pilots.
Wednesday, December 20, 2006
Media Mix, Electronic Billboard, E-Paper, You Are a Fool and an Imbecile, and Other Stuff
Who says cholesterol is bad? Not if it's used to create electronic billboards
The company is Maginx of Israel http://www.magink.com/index.php
e-paper story about Hearst newspapers interest in the technology
Time magazine's selection of "You" as person of the year is not going over well. One of the better comments about the topic is called "The Blog Mob" with the subtitle "Written by fools to be read by imbeciles." The commentary was probably written before the Time selection but is consistent with some of the other comments I have read the past couple of days.
The bloggers, for their part, produce minimal reportage. Instead, they ride along with the MSM like remora fish on the bellies of sharks, picking at the scraps... Most of them are pretty awful. Many, even some with large followings, are downright appalling... Every conceivable belief is on the scene, but the collective prose, by and large, is homogeneous: A tone of careless informality prevails; posts oscillate between the uselessly brief and the uselessly logorrheic; complexity and complication are eschewed; the humor is cringe-making, with irony present only in its conspicuous absence; arguments are solipsistic; writers traffic more in pronouncement than persuasion.
Yeah, what he said...
Dell Computer has named former American Airlines CEO Donald Carty as their CFO. You'd think Carty's name would be mud. He's the guy who negotiated with the unions claiming poverty, then when the deal was signed gave huge bonuses to himself and upper execs. The outrage was so strong that he was forced to resign. Why would Dell even want him on their Board?
This is not meant to pick on NAPL, because I've had my share of gaffes... On the web page that promotes a seminar about "decommoditizing the printing business", there is this sentence in the opening paragraph:
NAPL members enjoy deep discounts on a wide array of events...
Ummmm... maybe attending a "decommoditizing the seminar business" seminar would help?
In today's world everything is a commodity, it seems, because of the near-perfect information that buyers have. But "commodity" has a real dictionary meaning, and it is constantly abused in common language. "Print is NOT a Commodity" was the posting on 5/11/2006 in PrintForecast Perspective and it's worth reading, if I may say so myself, based on the comments I received about it.
A note to those for whom statins have had serious side effects, such as yours truly. My side effects led me to my low carb diet and karate. But the side effects are a sign that your liver may be sensitive to other things. The FDA today has asked for new warnings on products like Tylenol and other products that contain acetaminophen.
They are concerned about the combination of acetaminophen and alcohol, since both are metabolized in the liver. Because of my statin history, it was suggested that I not use acetaminophen, though there are no studies about the topic, just that if I had liver toxicity (with statins and niacin as well), it was probably wise to be judicious. As far as the warning about ibuprofen in the same release, that is less of an issue, especially if taken after eating something. At my age, taking karate with 20-year olds and 30-year olds, sometimes you just need what we 50-year olds call "vitamin I".
Tuesday, December 19, 2006
PPI Malarchy, Iraq's Economy, MSFT Hates Open Source
The PPI is an index, and November 2006 was 159.7. In August, the reading was 162.1. So, since then the PPI has dropped by -1.5%. Seven of the previous 10 months were higher than November's 159.7.
It's just another reminder of these headlines that you'll never see because they won't sell papers and won't get people to tune into the 11pm news:
- No Inflation
- Full Employment
- Wages Up
- Household Weath Rising
- Britney Spears Renounces Her Past
Iraq's economy is booming! Starting from nothing creates high growth rates, but it shows that even a smidgen of economic freedom can go a long way.
Microsoft identifies open source software as a significant business threat
Our business model has been based upon customers paying a fee to license software that we developed and distributed.
Very few people realize this, but when you buy WIndows or Office, you technically do not own it, and MSFT has every intent of reminding you of that as often as possible with Vista and Office 2007.
Under this license-based software model, software developers bear the costs of converting original ideas into software products through investments in research and development, offsetting these costs with the revenue received from the distribution of their products. We believe the license-based software model has had substantial benefits for users of software, allowing them to rely on our expertise and the expertise of other software developers that have powerful incentives to develop innovative software that is useful, reliable, andcompatible with other software and hardware.
Then why does my computer crash or software lock up so often? Is that a feature?
In recent years certain “open source” software business models have evolved into a growing challenge to our license-based software model. Open source commonly refers to software whose source code is subject to a license allowing it to be modified, combined with other software and redistributed, subject to restrictions set forth in the license. A number of commercial firms compete with us using an open source business model by modifying and then distributing open source software to end users at nominal cost and earning revenue on complementary services and products. These firms do not have to bear the full costs of research and development for the software.
Liar liar pants on fire. OpenOffice is a good example. Sun Microsystems has put big money behind OOo, and in return, gets to sell it as StarOffice. They have R&D costs. Just because they found a unique way to get more out of them, last I heard, was called "innovation."
A prominent example of open source software is the Linux operating system. While we believe our products provide customers with significant advantages in security and productivity, and generally have a lower total cost of ownership than open source software, the popularization of the open source software model continues to pose a significant challenge to our business model, including continuing efforts by proponents of open source software to convince governments worldwide to mandate the use of open source software in their purchase and deployment of software products. To the extent open source software gains increasing market acceptance, sales of our products may decline, we may have to reduce the prices we charge for our products, and revenue and operating margins may consequently decline.
Consumers have not really seen reduced prices unless they buy MSFT software as part of a new computer, where the OEM licenses are comparatively cheap. But there, there is no competition for that market. Just try to buy a Linux computer from a major PC manufacturer. You have to go to one of the small custom builders to get that. A consumer building a computer on their own will end up paying $700-800 for Vista and Office2007, often more than the components they will use to build a decent computer itself.
Buying software except for the most narrow of specialty applications is starting to become dumb.
Monday, December 18, 2006
You are the Person of the Year; Online Retail Up; Santa Cookie Document; Reynolds Explains Income
Information consumers are in charge, and they use the 'net in more and different ways than before. It there ever was a time to understand what marketing is, it's now. "We're in the publishing business" used to mean print, always. "We're in the content-creation business" doesn't even capture the sea change. I still think of publishing today as the content deployment business.
Online retail sales are very strong
How radio broadcasters are coping with the Internet
Skype founders using their money on Internet TV
This will undermine broadcasters, of course, and open up significant new markets for micro audiences and microsegmentation of markets
Essential legal document if you are leaving any cookies for Santa
Commentator Rich Lowery talks about Lou Dobbs
"Ninety-six percent of our clothing is imported. This nation cannot even clothe itself." But if we literally couldn't clothe ourselves, we'd be naked. Dobbs' line is like saying we can't feed ourselves because we buy groceries from supermarkets. Textiles inherently are not an advanced, high-paid industry, and it is no wonder that an economic superpower doesn't do a lot of textile production. Would Dobbs prefer that more of us were hunched over sewing machines rather than employed in industries like software development, financial services, law, accounting, biotech and pharmaceuticals?
It's a reminder of the Wall Street Journal article "We Think, They Sweat" http://online.wsj.com/article/SB110376349870907921.html?mod=opinion_main_commentaries
And Lou Dobbs won't want to read Alan Reynold's analysis of income data
Biggest problem? Not including transfer payments to low income earners. I do remember back in 1995 that the four most common and simultaneously provided programs together for families was the equivalent of a $40,000 taxable income. I have not seen any data that make the adjustment for taxation to determine what the equivalent income would be for a wage earner in 2006.
There was an excellent book a few years ago about this called "Myths of Rich and Poor" cited in Thomas Sowell's 2/8/06 column http://www.jewishworldreview.com/cols/sowell020806.asp
The book does a worldwide comparison of economies and populations, and is more fascinating that one would think.
Friday, December 15, 2006
Profit windfalls, Statistical Abstract, Lou & Mises, OpenOffice resource
Goldman Sachs 23.1%
So let me get this straight... we want to have a windfall profits tax on.... Exxon?
The Commerce Department has published the 2007 U.S. Statistical Abstract, one of the most fascinating documents for data geeks ever produced. It's got something for everyone, and has lots of international data. Sections are downloadable as PDFs.
Good article titled "Lou Dobbs Thinks You're a Fool" on the Mises economics site.
If you're using OpenOffice, there is a downloadable free manual now available
Thursday, December 14, 2006
Profits, Excel, Traditional Media, and How Inflation Distorts the Movies!
Got a note on my blog the other day about the Excel bug, suggesting I try online spreadsheet program EditGrid http://www.editgrid.com/home It failed the test as well. For those who want the latest "score" or who want to try the spreadsheet again, I have uploaded it to http://download.yousendit.com/F1B2CB416BF827CF where it will be available until 12/26/06. Lotus 1-2-3 passed. In total, 14 spreadsheet programs were tested and only 9 passed. The final tally:
602PC Suite = PASSED
Ability Office = FAILED
EditGrid online spreadsheet =PASSED
Evermore Office spreadsheet = FAILED
GNUmeric open source spreadsheet = FAILED
goBeProductive Suite = PASSED
Google online spreadsheet = PASSED
Lotus 1-2-3 = PASSED
OpenOffice/StarOffice = PASSED
Softmaker Planmaker = FAILED
Thinkfree online spreadsheet = PASSED
WordPerfect Office Quattro Pro = PASSED
Zoho online spreadsheet = PASSED
Good B2BOnline article about how traditional media still lead among consumers
According to the survey of more than 300 online shoppers, more “traditional” holiday gift-idea sources such as window shopping (46%) and catalogs (45%) still beat Web sites (32%), online advertisements (15%) and e-mails (14%). Going directly to the source (for instance, asking the recipient what they would like) (67%) is what most survey takers planned to do. “What really surprised me is that this was an online sample—these are people who are doing their buying online,” said Scott Bailey, exec VP-strategy at Targetbase. “I expected that they would prefer online, but they don’t.” ... Bailey said that catalogs are on the rise, but changing drastically. “These aren’t the 1,000-page Sears behemoths anymore,” he said. “They’re kind of sexy now.” He said that L.L. Bean’s catalog has a mountain-climbing story in it that’s written by a company employee. If the reader wants more information on the climb, they are directed to the Web site. “They’ve achieved the goal,” Bailey said. “The Web site is where the purchases take place. It doesn’t matter how people get there. Catalogs aren’t out of vogue; they simply serve a different role than they used to.”... To Bailey, the lesson to direct marketers from the survey is that “the old channels don’t get thrown away,” he said. “No matter how many new channels get created, they all need to be integrated and used.”
I've always wondered what the differentiation is between online print businesses. One may be the kinds of files that they accept. According to the Kim Komando computer newsletter..."Lulu, iUniverse and Cafepress are three print-on-demand services that can create your book. Lulu and iUniverse accept Word files. Cafepress requires a PDF file. Prices vary, depending on the number of pages and the binding selected." Last I checked, Blurb.com did not accept Word files.
Funny headline on a computer site re: MSFT Vista
"Vista won't be worth buying until after the first 500MB service pack"
Inflation distorts our perceptions about all types of historic events. One of my favorites is movie hype about how much a certain picture did over a weekend and whether or not it was a record first weekend, etc. etc. This page lists the top movies on an inflation adjusted basis and puts many things in perspective.
Titanic is considered the biggest grossing movie of all time, at $600 million. Sorry, it's actually #6, with less than half the revenue of Gone With the Wind. Also ahead of it are Star Wars, The Sound of Music, The Ten Commandments, and E.T. Last year's top movie, Pirates of the Carribean: Dead Man's Chest is #44 on the list.
Tuesday, December 12, 2006
Profits Improve; MSFT Exec Wants a Mac, Musicians Behind the Curve
The four-quarter moving annualized total of inflation-adjusted industry profits is now $4.59 billion. The profits for the quarter itself were $1.27 billion, highest since Q3-2004 when it was $1.36 billion. The profits before interest and taxes were 5.7%, highest since Q3-2003, when it was 6%. This is the best industry profits performance in three years, and the data are slowly getting better and better. We are still about 1/3 of what profits were in 2000. This is a minor rise, but it's a good rise. Expect more cost cutting ahead, often from consolidation. We're in the right direction, finally
Article in ComputerWorld how MSFT development officer says that he would buy a Mac.
I'm not buying a Mac because I'm an Ubuntu man!
The headline was "Musicians Oppose Media Consolidation" so I figured I had to read this. Talk about being behind the curve! The complaint is about so many stations sounding alike as you drive along for miles and miles. This is coming at a time when radio properties are going up for sale because their future does look pretty bleak. They're attacked by streaming media, commercial free satellite radio, iPods, all kinds of recorded music, and any variety of things. The Internet is making location meaningless. Radio was a local medium. Its high maintenance costs led it to carrying national programming, which in turn, led it to consider local presence except for drive time as a real revenue problem. The companies may be consolidating, but the sources of content are clearly not, and radio is not the place to be.
The musicians doing the most complaining in this article are country-western artists. I always loved David Allen Coe's perfect country song, and the lyrics can be found here:
The key verse is
WELL, I WAS DRUNK THE DAY MY MOM GOT OUT OF PRISON
AND I WENT TO PICK HER UP IN THE RAIN
BUT BEFORE I COULD GET TO THE STATION IN MY PICKUP TRUCK
SHE GOT RUN NED OVER BY A DAMNED OLD TRAIN
There's the old joke about playing country music backwards: you get your house back, your girlfriend or spouse returns, and you get sober again.
The big "villain" has been ClearChannel, which was just sold to some private equity investors and will be partially dismantled. The economics of the industry changed and they weren't ready.
Monday, December 11, 2006
Digital Divide, Digital Magazines, Newspaper Death Spiral, Other Stuff, and My Adventure Getting to Atlanta
Digital magazines not doing as well as originally thought they would.
B2BOnline article discusses newspapers' imminent "death spiral"
The economics of social media will chip away at the newspaper business model just as readers are taking flight. The number of households in the U.S. has grown by 40 million in the last 30 years while newspaper circulation has actually declined. About half as many people under 25 read newspapers as people over 65. Readership is declining in all age groups... History has taught us that businesses based on scarcity collapse in the face of abundance. Ten years ago, information was expensive to gather and disseminate. Today, we're overwhelmed by information. Newspapers still operate as if they were the gatekeepers of news, but that gate has swung wide open... Over the next 20 years or so, most of America's 1,450 daily newspapers will die or be merged out of existence. They will be replaced by many thousands of special-interest online communities. The craft of journalism will change fundamentally in the process.
A longer article titled "The coming collapse and rebirth of newspaper journalism"is at http://www.btobonline.com/article.cms?articleId=30158
The author has a blog at http://www.paulgillin.com/
And they call me "Dr. Doom"
Margie Dana of the Boston Print Buyers was interviewed about small and micro-businesses using print
Wharton's Jeremy Siegel writes about Milton Friedman
Anyone using OpenOffice may benefit from the free manuals that are at
A discussion about incomes that Lou Dobbs doesn't want to hear. It reviews changes in spending, income, and as they relate to family size and other demographics.
Below is what is more typically called a blog, about my trip to Atlanta last week. My blog is usually reminder notes, mainly to myself, so that I have a central place to keep links to articles and thoughts that I can use and expand upon should I desire at some other time. I've described my blog as my refrigerator with an infinite number of cybermagnets holding notes onto its front door. Most blogs are personal, as this entry is below. But before we get there, I've been updating my personal blog http://karateafter40.blogspot.com/ about my study of karate and its assistance to me in living with and sometimes conquering prostatitis and chronic pelvic pain syndrome. I'm still working on some more current posts for that as I get the chance. Anyway, below is my blog of my most recent business travel adventure...
Victim of the Bean Counters
Companies are often fond of saying that theirs is a numbers business. They set up processes and structures and then get very good at measuring them, correcting as they go along. Then they teach people how to manage by the numbers, setting parameters that identify when processes are in or out of a controlled range, and when they are out, then they act. The business news of the past few years have been filled with stories of executive financial improprieties, but those improprieties are widely known only because they involve money. There are many other numbers that are abused in organizations.
The tyranny of numbers caught me the other day as I was attempting to make connections in Philadelphia to my flight to Atlanta. I'll leave names out of this, but this airline is large enough to make a bid for Greek Letter Signifying Change Airlines, and is otherwise USeless. It lived up to its reputation that it should be avoided whenever possible. It is possible to manipulate non-financial measures to make it look like things are in control but they are not.
My 6:00pm flight left early from Providence, as all passengers were on board. After we were in the air for a few minutes, we were told that Philly was in a landing delay, but it appeared that it would be lifted in time for our arrival. It wasn't. We ended up circling and touched down 20 minutes late. The position of the aircraft upon landing was such that we basically drove the full length of the airport to get to our gate. Blocked for about five minutes by the movements of another taxiing aircraft near our gate, we finally pulled up. The bell rang in the cabin that it was now safe to unbuckle, stand, grab our things, and prepare to disembark.
We stood. We waited. After another five minutes, the pilot announced that no one was there to move the jetway to the plane. A union jurisdiction issue, I imagined. He didn't say. We waited.
Finally, the problem was solved, and we began to leave. I had five minutes to go from gate B6 to C17, which I did. People movers certainly helped. I was confident I could do it.
I arrived at the ramp and an attendant was trying to solve a problem with another passenger's boarding pass. She seemed flustered as she poked at her keyboard and kept coming up empty. Some other Providence passengers arrived. We waited while she was helping the passenger. One of us asked if we could get on and we were told to wait. A door opened near the gate and another attendant walked in and said the plane had pulled away. I said, “but it's 7:55 and we were here from the Providence flight that just got in.” I explained the delay and the jetway problem. I asked why the plane was not held, since every passenger I've known has been on flights where we waited for “connecting passengers,” especially on the last flight of the day. She explained that the FAA made them do that (didn't Flip Wilson have a routine that sounded something like that?) and that it was out of the airline's control. I explained that I had been on many flights that were held for passengers. The deer was paralyzed, standing majestically over the faded double yellow line of the winding country road, the reflection of my headlights shining like bright stars in its eyes. We were told to go to the customer service counter a few gates away.
Told that there were no more flights to Atlanta, nor a way of getting me to a closer city that might have a very early flight the next morning, we were “offered” the opportunity to stay in a nearby hotel at a reduced rate. I called Marriott and found that all their properties were full. I accepted the “invitation” to stay at the Ramada Inn for $75 rather than sleep in the airport. I was told my baggage would be down at zone 4.
So much time had passed that I figured I'd get something to eat and let more time pass to let the bag get to where it should be downstairs. Stressful times require comfort food and a break to my low carb routine. Sbarro pepperoni pizza and a diet Coke were in order. I guess I could have eaten just the cheese and pepperoni and stayed loyal; I gave in and enjoyed the lush slice in the fullness its designer intended.
I went downstairs and saw the hotel phone bank at the bottom of the escalator and called the Ramada. When asked if I had my bags, I said no and was told to call back when I did. When the operator asked me, I immediately knew I should have done that, but I figured so much time had passed it just had to be there. I had waited long times for many “courtesy” vans before (the drivers are all trained to say “you didn't see me when I passed the first time, sir?”; adding “sir” to insults makes it a “courtesy” van). So I went looking for my bags and found the Providence carousel. The bag was not there. I walked up to the “baggage information” counter where there were four people sitting, and two other employees on the customer side chatting with them. I asked for help and was directed to the baggage service office at the other end of the baggage area. I guess that was the only information they were trusted with.
I went to the baggage service office, and a cheerful new employee, untainted by the intensive company training efforts she was to eventually endure, asked me a few questions. She made a call asking about the location of my B22 bag with Southwest Airlines ID tag, TSA lock, and blue tape on its feet. Ten minutes later, the call came that my bag was nowhere to be found. Another customer came in that my cheerful attendant started to assist. I chatted the more grizzled and methodical, but not unpleasant second attendant. She explained that the bag probably made the Atlanta flight. That was strange, I always thought because I could run faster than a Samsonite bag, even if it had the advantage of wheels. She checked her screen and said it indicated that the Atlanta flight had actually left at 8:30, not at its scheduled 7:55. The hair on the back of my neck stood up.
It was then clear what had happened. It was more important to shut the door of the plane, and possibly roll back (though if my bag made it, they probably closed the door and pulled the jetway back) just to claim that the flight left on time. Bean counters, I thought. The flight and bag left on time, but the passenger did not. Doesn't matter, the plane was on time; they don't report missed passengers, just bags and planes, it seems. She gave me an overnight pack with shaving cream in some foil packs, a short-handle toothbrush, and other essentials. I asked for a food voucher. She said I'd have to go to the baggage information counter. I thanked her and left, with the excited anticipation of finding out what those four people really did at that counter.
I asked for some help and said I was directed there because I needed a meal voucher. I was told she would have to go to another office to get it. I asked for two, and she said “two?” with great disbelief. She started to walk to the office. I interrupted one of the other employees, engrossed in a novel and asked if I could talk to a manager. She told me to follow the one who was working on my vouchers. I caught up to her and asked if she could find a manager for me, and she said she would. It was now clear what the four people at the baggage information counter do: they specialize in telling dissatisfied passengers to go somewhere else so they could get back to their novel.
We got to the office and she disappeared into a door behind the counter, emerging a few minutes later with a manager who listened to my story. I explained how I thought it was quite interesting that my bag could make a flight but I couldn't, and he agreed that they probably held the flight at the gate to load bags. The dumbness of the whole thing just seemed to get grow, and he knew it wasn't worth defending, only apologizing. I asked them to pick up my hotel cost, and he said he couldn't, but would try. He came back about 10 minutes later with a coupon for discounts on a future Bankrupt Airways flight. I said I never had these kinds of problems on Southwest, which I have flown almost exclusively for four years. I've never missed a connection, and usually arrive early. As I mentioned Southwest I thought about a line from one business book that the best customer service is to have a product that requires none, and that's what Southwest seems to have figured out, though they are not exempt from problems, they just seem to have reduced the frequency to be far less than others.
He told me I could give the discount coupon to anyone, which was a relief. Perhaps there is someone I don't like for whom it would make a nice meaningless gesture of friendship. I had already gotten my meal vouchers: $5 for breakfast, $10 for dinner. I thanked him for his help and called the Ramada again. I realized that I could have been at the hotel an hour before because I had no bag to wait for anyway, and perhaps this was all the Ramada person's fault... nah, they'd have to be really in tight with Foreclosure Airways to do that, and I was learning that was impossible. The operator said they still had plenty of rooms. Great, I thought, a hotel that no one wants to stay at.
The courtesy van arrived and we piled in. It smelled like a smoky bar, but it was getting me where I was going, and that was to sleep, so it was tolerable. Five minutes later we got to the hotel and I could see through the doors that the line for registration was about 10 or 15 deep. Luckily, there were three people working the counter. There are good airport hotels and there are bad ones. This was close to the latter, needing renovation about 10 or so years ago. But it had free wireless, it turned out. Kind of like someone pulling a rickshaw while wearing a Bluetooth headset to chatter on their cell phone. This was one of those places that specialized in “missed flight” stayovers and airline crews who are being punished. While I was at the counter, someone who had just checked in and came back down and said that their room had not been made up. Having that happen to me would certainly have made my day complete, I thought.
I got up to my non-smoking room by walking through the smoking hallway, and opened the door. It was in good order, right out of the set for My Name is Earl, on NBC every Thursday night. Their so called “distressed” rate for the room was a premium price for its condition. The rug was in decent condition because of its protective layer of dust. “Anyone can stay in a bad hotel for one night,” I remember being told early in my career. Since my computer charger was in my suitcase, soon to land in Atlanta, I hoped, I checked out the free wireless, which was slow, but still free, and reliable. My cell phone battery was dying, so I called home and asked Mrs. Webb to call back, and we reviewed the events of the last hour or so. She had canceled my hotel at Atlanta airport, for which they waived the cancellation fee, the only thing that had gone right in the last few hours, it seemed (though I am always grateful for landing safely, even if late).
I woke up about 4am and decided that getting the 5am van was probably a good idea, figuring the chance of bedbugs in an airport terminal was lower than at the My Name is Earl. The mildewed shower and its faulty drain compelled me to push up my scheduled exit from the hotel. The foil-packed shaving cream and imitation Trac-II razor did their work with a minimum of grimace, and bloodlessly. I left the room and headed downstairs for the van, and got to the airport in time.
The Forced Liquidation Airways kiosk did not let me check in, but the attendant at the counter figured out the problem, assigning me seats for my new flight and my return. What was supposed to be 18 hours in Atlanta was going to be seven, and I would miss my plant tours that I was so looking forward to making. I asked him to also check where my bag was, and he said that it was definitely in Atlanta waiting for me at the baggage services office. Good, I thought, I'll head straight there and then find a men's room and be spared of staring longingly at a moving luggage carousel.
I deplaned and made may way through the escalators and legendary Hartsfield Airport subway. I bumped into one of the other Providence passengers and we walked to the baggage office together. He did the talking this time. I was surprised we were in the right place at all without the Philadelphia baggage information desk to advise us. He told the smiling lady behind the counter that we had been bumped from the Philly flight last night but our bags were on that flight. She said that she had no bags for us, and that the only bags leftover from last night were by the window, and it was clear it was not mine or his. She got out from behind the counter and started to check the room next door, but stopped. “Can you check the carousel once more?” As I was about to ask why, there was my bag rounding the turn. The bag never made the flight last night, the Philly baggage handling crew had it all along. I could have had it with me at the Ramada Inn had someone found it. We thanked her and went on our merry separate ways.
After my consulting engagement, I returned to the airport and rather quick work of checking my bag and getting through security. My dinner voucher found me at Sbarro again... the lines were too long elsewhere. I camped out and did some more writing and then it came time to board my flight to Charlotte. All went well until we got to the runway when we learned we were being held 15 minutes as a traffic hold. Here we go again, I thought to myself, but we landed only 10 minutes late and I made my way from Terminal E (which looks disturbingly like the commuter gates at Dulles) to Terminal D and found my way to the flight to Providence. It's quite a difference going from a packed commuter jet to a half-full 757. I appreciate the latter, but I was impressed with the two commuter jets I had on this trip. We were all on board when we were informed that Charlotte had imposed a 15 minute wait to make sure everyone's bags made it to the plane. Gosh, that sounded familiar. This was after the door was closed. I wonder if anyone was stranded like I was. All I knew was I was headed home, supposedly with a tailwind that would make up the time we lost on the ground.
Well, so much for making the bean counters happy at literally the expense of the clients. I could have been in Atlanta on time, but my bag could have sitting in Philly. But I would not have been subject to the My Name is Earl Inn. That would have actually been better.
In the whole process I remembered the line Flip Wilson used more than 30 years ago while in his character of Geraldine: “If you can fly six hours in the dark from Los Angeles to New York, you can find my bags.”
I've had some odd reactions when I tell people I prefer to fly Southwest; some clients actually volunteer to pay more for my expenses so I could fly something else. I know the Southwest system quite well and how to get my “first class” seat most of the time (the emergency window seat 10A where I have real leg room). The airline has really transformed Providence, and everyone thinks it's their pricing. It's not; that's how they get you the first time. It's the fact that things work and you get where you need to be, and if you don't get there, they will find a way for it to happen. The expectations are set by what they do: it's a no frills airline but because they don't pretend to be anything else, you focus on whether they get you to where you need to be. You get the sense that the Southwest employees actually like working for their company, and that it's infectious. Their jovial manner comes from a confidence that they know what they are doing and that they like doing it. They are not there for the jobs, but to there for those jobs at Southwest. Back in the late 1990s when I was on the road more often and for more extended trips, I was always dealing with delays and missed connections, no matter what airline I took. Southwest had limited service in Providence, but was growing little by little every few months. Their system was not capable of supporting what I needed at the time. Now it is. Three cheers for Herb Kelleher's grand idea of an airline that works.
This airline annoyance capped off a week where a major multinational bank bungled the merchant services account for our new business, getting everything wrong including the most basic contact information, spelling of the name, phone numbers, addresses, which credit cards we would use, equipment, and other items, even opening a business Visa account we specifically said we did not want, despite filing of all of the proper forms with all of the information correctly supplied. None of these problems appeared all at once; they became evident a little at a time, the drip drip drip of a water torture. I asked the account manager who was so skilled at setting up the account incorrectly to close it for me. That, I was informed, could only be done by customer service. I told him that I was miffed that an assistant VP could open the account, but an 800 number clerk was the only one who could close it. He insisted; I complied. I called and immediately asked for a supervisor; there was no resistance to my request.
It turned out that the only thing that went well in the entire fiasco was how quickly and efficiently she was able to close the account, and ensure that it could not ever be used. I remarked to the person handling it that she was the only person who knew what she was doing, and that I really appreciated it. She apologized on behalf of the bank, sent me a confirming e-mail, and that was it: it was over. I wondered if I should consider opening another account so that she could close it because it was so refreshing and unfortunately odd to have someone do their job so well. Did I mention that the bank branch we use had ordered three sets of checks, and the format and style was wrong each time? We ended up ordering directly from Deluxe. They had also gotten the endorsement rubber stamp wrong; that only took one time to fix.
The big shots are all there for the glory of the sale, but you hear crickets in the corner office when something goes wrong. I think I'd insist that a VP close an account once in a while just to find out why it happened and what led up to it. That's just me. It reminded me of the bad resort stay that our family had one time, and when I asked the president of it when the last time was that he or anyone on his team stayed at their own resort he asked “Why would I want to do that?” Exactly my point.
Sunday, December 10, 2006
Dr. Doom is Up to No Good, Take The New Media Test, Economics, Postal Reform, Ubuntu
The economic webinar from 12/6/06 can now be accessed online
(I got a 12; you score well if you have the right cell phone)
Good Thomas Sowell column about worldwide economics
Universal McCann’s Bob Coen’s Advertising Forecast
Tips about offshoring book printing successfully
Article in praise of Ubuntu Linux
Economist Walter Williams' article about Milton Friedman
Tuesday, December 05, 2006
October Printing Shipments Up +$259 million, +$155 million on Real Basis
Printing shipments in October were up a strong +$259 million on a current dollar basis, and up +$155 on an inflation-adjusted basis. Real printing shipments have been up three consecutive months.
An increase of this size has not been seen since July 2004, when real shipments were up +$206 million. September's shipments were revised down -$21 million on a current dollar basis.
For the year, real shipments are now slightly better than last year; it had been negative until October.
The increase may be due to the highly contentious local political races, where print was considered more effective than new media, since local digital media does not have the presence nor the interest among Internet users that global, national, and topical web sites attract.
The first two months of the most important quarter for printing are up +$436 million compared to last year, and +$170 on a real basis. While some print categories, such as magazines, are still having problems, it is clear that other sectors are now picking up the slack. Direct mail probably had a good run because of the political advertising, especially.
Some historical stuff:
- The last year there was a full year of months with real increases compared to the prior year was 1995.
- The last time we had three months of consecutive real increases was actually a four-month run from May to August 2000.
- The biggest one-month rise compared to a prior year (our data only go back to 1993) was +$897 million in December 1995.
- The biggest one-month decrease compared to a prior year was September 2001's -$1.5 billion. No one should assume that was the result of 9/11. Every month of 2001 prior to that had a real decline averaging -$557 million. 9/11 didn't help, but the industry had declined 12 consecutive months before that.
Is this the bottom of the market? I am not bullish in the long term as broadband is still growing and more really cool gadgets with more reliable connectivity are on the horizon. They're not just staying on the horizon... they're starting to march toward us. Let us not forget that for the past 13 years, the average change in monthly printing shipments is actually a decline of -$155 million. One has to wonder if the bulge in political printing that we got this time was actually a last gasp of large scale local political printing. The national elections of 2008 will have coattails that local and state elections can ride, and then the next local-only elections are 2010. I suspect that local Internet and digital media will be in a quite different position at that time than they were this past November.
Monday, December 04, 2006
Newspapers, Digital Future, Brands as Destination Sites, and more
...print editions of newspapers, which saw the endgame coming 30 years ago and did everything they could to forestall it, need to figure out what they're best at and double down in those realms. To give one example, if newspapers think they're in the editorial business, the slimming of the business pages at most dailies indicates that the standard business section is doomed and the copy should be folded into the rest of the paper to make room for a section the masses really want to read. Sports sections that refuse to retool themselves as the smart supplement to ESPN can kiss their pages goodbye.
Newspapers have neglected local news for quite a while, and have been scooped by non-dailies. The Internet does not "do local" very well, and newspapers have realized that this is an area where they can leverage some expertise. Gannett is experimenting with "hyper-local" news.
The USC-Annenberg Digital Future Project has just released their latest report, highlighted in a press release.
“More than a decade after the portals of the Worldwide Web opened to the public, we are now witnessing the true emergence of the Internet as the powerful personal and social phenomenon we knew it would become,” said Jeffrey I. Cole, director of the USC Annenberg School Center for the Digital Future. “The Internet has been a source of entertainment, information, and communication since the Web became available to the American public in 1994,” said Cole. “However, we are now beginning to measure real growth and discover new directions for the Internet as a comprehensive tool that Americans are using to touch the world.”
What's really interesting is that Cole is giving presentations titled: "Just an Essential Part of Everyday Life." And I still run into Internet deniers...
P&G's marketing mix is a subject of a Cincinnati Enquirer article
It's all part of the gradual transformation of the advertising industry from one dependent on television commercials and print ads to electronic, promotional and word-of-mouth marketing campaigns that try to catch you at the moment you're making your purchase decision. Companies and consumers alike are increasingly relying less on mass media and more on targeted messages that meet the industry mantra of "relevance."...The transformation has spread well beyond P&G. In a region known for its branding companies - in part because of P&G's presence and spinoff business here - every marketer, every media buyer and every advertising agency is trying to plot its impact. Companies increasingly are putting more messages in more places in your daily life, whether it's your mobile phone or the soccer field where your child plays on Saturday morning.
The article includes a link to a video that makes one think: gosh, i certainly miss those people teaching the world to sing about the real thing... can't we get big budget commercials back again?
Brand sites are getting heavy Internet traffic. P&G and Unilever get about 9 million unique visitors monthly.
The combined monthly traffic of unique visitors to the P&G and Unilever websites is more than 9 million, according to ComScore Media Metrix. And part of what's driving the traffic is old-fashioned web display advertising and e-mail pushes. Corporate and brand websites -- once derided as "brochureware" in a digital marketing world that quickly moved to sexier applications -- are getting a rehabilitation of sorts as their traffic numbers vie with those of many consumer sites in the web's long tail. Such package-goods marketers as Procter & Gamble Co. and Unilever don't sell many products directly online. Their low-cost, low-involvement brands tend not to generate much search. Yet the websites of P&G and Unilever now reach nearly 6 million and 3 million unique visitors, respectively, in the U.S. each month, according to ComScore Media Metrix.
WSJ article about media growth in 2007 that summarizes data from GroupM, Zenith, and Merrill Lynch
Merrill and GroupM see a slight cooling of online advertising's red-hot growth next year, though it will retain double-digit percentage rates that would be the envy of older media. Zenith, however, sees online ad-spending growth rising to 29% from 25% this year, fueled by online video advertising, which has taken off this year. Merrill notes that the pace of online video advertising and ads on popular social-networking sites could affect its prediction.
Washington Post has article about the blending of TV and Internet
Barron's economist Gene Epstein has an excellent column about why the ISM report of Friday is not dire, and also takes real aim at CNN's Lou Dobbs for what is basically journalistic malpractice. I used to really like Lou Dobbs until about 15 or so years ago, and his sloppy work is just a real turn-off now. Epstein disected his work in Econospinning and this column just updates some of the latest problems with Dobbs-isms.
Because Microsoft Word knows that I have been saying bad things about it, it decided to crash at an inopportune time. I didn't remember whether I had saved after entering a few paragraphs of text, so I wanted to make sure that I didn't lose what I had written. I obviously could not print it out. Luckily the computer had not locked up, so I hit the PrtScn (print screen) key to save an image of my screen and then pasted it into Microsoft Paint and saved the image as a bitmap file. When I restarted Word, I realized I was missing only two paragraphs. I opened the bitmap in Paint, grabbed those two paragraphs, and saved them as a separate .BMP. I then ran my OCR software on the image, and I had text back with some minor corrections to be made. And that was my big entertainment for the weekend.
Novell and MSFT made a deal re: Novell's SuSE Linux product that has the open source community in an uproar. This CNet article has an interesting perspective on it.
Friday, December 01, 2006
BULLETIN: ISM Manufacturing Index Turns Negative
It fell below 50 for the first time in 41 months, and the employment indicator turned negative as well. The Fed has overtightened, and we may get a rate decrease in the first quarter rather than the second quarter of 2007 if more negative months are reported. The ISM non-manufacturing is reported on Tuesday, all of this just in time for the webinar on Wednesday.
If you have not signed up, do so at http://members.whattheythink.com/home/webinarregistrationform2.cfm Needless to say, my next few days updating economic forecasts will be .... interesting....