Less than 24 hours after the jarring revelation that Apple’s revered leader, Steve Jobs, would be stepping down from his post as CEO, his replacement has set the stage for the beloved company’s continued growth and success.
Tim Cook, who previously served as Apple’s COO and as interim CEO during Jobs’ previous medical leaves of absence, sent a note to all Apple employees today promising them the company they knew under Steve Jobs won’t change under his leadership.
The note, originally obtained by Ars Technica, reaffirms Jobs’ commitment in his resignation letter that Apple will continue to be a successful and innovative leader in the always-competitive tech sector:
I am looking forward to the amazing opportunity of serving as CEO of the most innovative company in the world. Joining Apple was the best decision I’ve ever made and it’s been the privilege of a lifetime to work for Apple and Steve for over 13 years. I share Steve’s optimism for Apple’s bright future.
Steve has been an incredible leader and mentor to me, as well as to the entire executive team and our amazing employees. We are really looking forward to Steve’s ongoing guidance and inspiration as our Chairman.
I want you to be confident that Apple is not going to change. I cherish and celebrate Apple’s unique principles and values. Steve built a company and culture that is unlike any other in the world and we are going to stay true to that—it is in our DNA. We are going to continue to make the best products in the world that delight our customers and make our employees incredibly proud of what they do.
I love Apple and I am looking forward to diving into my new role. All of the incredible support from the Board, the executive team and many of you has been inspiring. I am confident our best years lie ahead of us and that together we will continue to make Apple the magical place that it is.
Cook is no stranger to the tech community, often appearing alongside Steve Jobs at Apple events and giving important keynote speeches in Jobs’ absence. Cook has been a part of the Apple team since 1998, joining as Senior Vice President of Global Operations, and rising to his previously-held position of Chief Operating Officer in 2005.
Cook’s execution of supplier contract negotiations has made it virtually impossible for competing firms to deliver comparable products at a competitive price. Cook previously held executive positions at Compaq and IBM.
With Jobs remaining as Chairman, and a suite of Jobs-era products in the pipeline, Apple likely won’t even see a hiccup for the next few years. Jobs created a system of excellence and creativity and instilled these values in every Apple employee, and Tim Cook will continue to execute Apple’s mission of innovation and growth. Investors and insiders are confident in Cook’s ability to lead – Apple stock is down just 1 percent through midday trading Thursday.
Trading of Apple shares was halted late Wednesday pending the major breaking news that Steve Jobs, the company’s iconoclast leader has resigned from his long-held position as CEO. Below is the note Mr. Jobs sent to the Apple board and to the Apple community:
To the Apple Board of Directors and the Apple Community:
I have always said if there ever came a day when I could no longer meet my duties and expectations as Apple’s CEO, I would be the first to let you know. Unfortunately, that day has come.
I hereby resign as CEO of Apple. I would like to serve, if the Board sees fit, as Chairman of the Board, director and Apple employee.
As far as my successor goes, I strongly recommend that we execute our succession plan and name Tim Cook as CEO of Apple.
I believe Apple’s brightest and most innovative days are ahead of it. And I look forward to watching and contributing to its success in a new role.
I have made some of the best friends of my life at Apple, and I thank you all for the many years of being able to work alongside you.
After-hours trading of $AAPL resumed shortly thereafter, sending Apple shares down a relatively modest 5 percent. The move would likely have had much greater impact two years ago, as investors have recently priced Jobs’ impending departure into the stock. Business Insider’s Henry Blodget projected the announcement would have sent Apple shares tumbling 25 percent or more just two years ago.
Art Levinson, Chairman of Genentech, released a statement on behalf of Apple’s board: “Steve’s extraordinary vision and leadership saved Apple and guided it to its position as the world’s most innovative and valuable technology company.”
“Steve has made countless contributions to Apple’s success, and he has attracted and inspired Apple’s immensely creative employees and world class executive team. In his new role as Chairman of the Board, Steve will continue to serve Apple with his unique insights, creativity and inspiration.”
Following the announcement of Steve Jobs’ resignation, Apple promptly named COO Tim Cook as the new CEO. Cook led Apple in 2004 and 2009 during Jobs’ medical leave. Cook is known for his calm demeanor, astonishing work ethic and tendency to challenge subordinates with impossible-to-answer questions.
“The Board has complete confidence that Tim is the right person to be our next CEO,” added Levinson. “Tim’s 13 years of service to Apple have been marked by outstanding performance, and he has demonstrated remarkable talent and sound judgment in everything he does.”
Our thoughts are with Steve Jobs and his family, and we wish him well during these challenging times. As a small token of appreciation, we direct you toward Business Insider’s “The Life and Awesomeness of Steve Jobs.”
In the wake of the explosive LinkedIn IPO, which saw a 109% first day gain that valued the nine-year old company with over 100 million users at $8.9 billion, an intense spotlight has been focused on the new wave of Web-based companies that have taken venture capitalists and private and secondary markets by storm. The highly anticipated and inevitable IPOs of Web titans Facebook and Groupon have – rightly or wrongly – brought up fears of a “bubble” reminiscent of the dot-com bust that wiped away the fortunes of millions and oversaw the collapse of hundreds of “companies” that rushed to go public without revenues, not to mention profits.
(My take? We’re not in a bubble. Not yet. The lessons from a decade ago are fresh enough in the minds of VCs and investors, and the simple fact that we are being cautious and asking questions proves we are eons away from the insanity of 2000.)
The promise of the new media era is dependent on a new era of advertising, one that is integrated across many platforms, channels and formats. The booming success of Google and others dependent on online advertising may lead some to think that the market is saturated, leaving little opportunity for new entrants or growth for existing players. However, the data paints a dramatically different picture. The IAB projects double-digit growth in global online advertising spending for each of the next four years, reaching nearly $100 billion by 2014, or 17.4% of combined global ad spending.
There is a significant trend that one doesn’t need to dive through troves of data to recognize: people across the world are spending more time online. The time spent online on computers, tablets and smartphones is dramatically increasing year over year, but even these markets are relatively under-served. Just 82 million of more than 330 million Americans access the Internet on their mobile phones, and just 31% of wireless subscribers own a smartphone. Even with the billions of dollars in profits enjoyed by Apple, Google, Nokia and Microsoft in the mobile sector, the market is just getting started. More users with more Web-enabled smartphones means more ad dollars flowing to Web companies from the world’s biggest spenders.
So does this mean the tens of billions of dollars spent on television advertising will magically flow online? No. New value is created by reaching consumers online, and that means new dollars will be spent. Television advertising offers benefits that the hottest social media and branded content companies could never provide, and vice versa. It is the value of connecting and conversing with consumers in the new media era that will entice advertisers to direct new dollars from their ad budgets toward online campaigns.
The power to connect brands and consumers where the conversations are happening (social) and at the point of intent (branded content, action-oriented content) provides the opportunity for companies that offer these services to capitalize on the significant upside potential in the online advertising market. Online advertising isn’t just text links and banner ads. The new formats enabled by tablet and mobile technology and revolutionary business models ensure Silicon Valley’s best executors will reap the rewards of a booming online advertising market in the coming years.
Hat Tip: AdWeek – The Changing Scope of Online Advertising
IAB Report: 2010 Internet Advertising Reveneus Increase 15% to $26 Billion, A New Record
Under the tutelage of Bill Gates, Microsoft exploded into one of the world’s largest and most valuable companies, generating billions of dollars in profits annually for shareholders. The dot-com boom made many employees and investors millionaires, and the company appeared unstoppable.
As the company matured, growth stabilized and new tech darlings like Google stole the spotlight. Delayed product launches of centerpiece operating systems, failed products and advertising campaigns, broken acquisition deals and an apparent lack of internal innovation gave Microsoft a reputation as a “has been” that had passed its prime, and current CEO Steve Ballmer lost the confidence of many investors.
However, new data is showing that Microsoft may be experiencing a reversal of fortunes, as the company’s investments in search are beginning to pay off. The brutally competitive search engine market has had one dominant player for the last decade – Google – which has held as much as 80 percent of the United States search market.
In October 2010, the U.S. search marketshare breakdown was as follows: Google (72.15%); Yahoo + Bing (23.64%). The most recent Hitwise data shows Bing has made substantial gains at the expense of Google and Yahoo. Bing-powered search now controls 30.01% of the U.S. search market, while Google’s share has fallen to 64.42%. (See below: Image courtesy of Mashable.)
These gains may be the result of a major multi-platform ad push by Microsoft for Bing, but the trend is a positive sign for investors and spectators that have remained loyal to the company.
Strong performance in search, high expectations for tablet and PC versions of the upcoming Windows 8 platform, new developer confidence in the Windows Phone platform following the recent Nokia partnership announcement, the smashing success of Kinect and Xbox 360 and widespread adoption of Microsoft’s iPhone and iPad apps are powerful indicators of a possible Microsoft mindshare and marketshare resurgence.
Less than a decade after Wall Street and Silicon Valley critics alike pronounced the death of Apple as a legitimate player in the lucrative personal computer market, the world has witnessed the resurgence of the Cupertino-based company as the dominant force in the rapidly-growing world of consumer electronics. Could we be seeing the beginning of an Apple-esque Microsoft turnaround? Critics will call it wishful thinking, but with Google in the process of a massive leadership change, Yahoo! undergoing a drawn-out transition phase and the tenure of Apple CEO Steve Jobs uncertain, the competitive landscape is changing and Microsoft has substantial opportunities in search, PCs and mobile.
In a surprising Sunday afternoon announcement, Seeking Alpha founder and CEO, David Jackson, revealed several new initiatives that will dramatically revolutionize the content creation landscape at the highly-regarded investment research site.
The most critical was the announcement that, for the first time in the site’s history, it will pay its contributors for the exclusive content they create for Seeking Alpha. For years, contributors have submitted and published articles on Seeking Alpha to increase their online exposure, develop their personal and professional brand, and drive traffic and leads to their businesses. However, not all contributors have business to drive leads to, and Seeking Alpha is now confident it can share “meaningful revenue” with its writers as an additional incentive.
Contributors will receive $10.00USD for every thousand pageviews, and payments will be distributed quarterly. Any of the site’s 4,000 contributors may choose not to keep their content exclusive to Seeking Alpha, and the site will continue publish their non-exclusive articles in the same manner it always has. (Full program details here.)
This announcement prompted an obvious question: why would Seeking Alpha pay for content that it used to obtain and publish for free? The site has long been praised in many circles for its high-quality content and well-respected army of contributors. This reputation has been converted into more than 630,000 registered users and 40,000 comments a month. But is this audience enough to sustain the business in this new model?
With a stated average of 2,500 to 20,000 pageviews for each article on Seeking Alpha, the site will be shelling out an average of $25 to $200 per article. Even with the premium rates the site has been able to charge advertisers and the prolonged payment cycles that reduce overhead, that is a significant capital outlay for an uncertain return.
The argument for Seeking Alpha‘s bet is that by investing heavily in its valued contributors, the site is building mutually beneficial relationships that drive reciprocal traffic and continue to develop the reputation of the site and its contributors.
New content creation and distribution systems are often met with skepticism and criticism – especially when it involves paying for content that used to be obtained for free. Incentivized crowdsourced content almost always carries the risk of decreasing quality as quantity increases. VentureBeat also noted that pageview-driven financial incentives may encourage link bait and sensationalism, decreasing the value of the premium content that has built a highly sought-after audience at Seeking Alpha.
To combat this undesirable transition, Seeking Alpha announced a coinciding rollout of an expanded community ranking and contributor reputation system that qualifies writers based on a number of reader engagement metrics.
The long-tail content model often relies on fixed-fee payments and the cumulative value of evergreen content to produce sustainable returns. Pieces of content with longer usable lives have greater lifetime values, so after the fixed cost is covered, the returns are astronomical on quality content created in this model. However, the predictive and reactive nature of Seeking Alpha content largely prohibits the site from utilizing this fixed payment model.
Some of the fundamentals-based articles on Seeking Alpha covering general investment techniques and strategies may have longer life cycles and greater lifetime values, but the high daily turnover of the majority of investment and trading related content virtually eliminates the value of this strategy. Revenue sharing allows Seeking Alpha to compensate its contributors for the content they create while minimizing the risk of paying for content that has become obsolete before the fixed cost has been covered.
After more than a year of exponential user and pageview growth, Seeking Alpha is betting “all-in” that the quality of its content won’t decrease as submissions shoot through the roof, ensuring advertisers will still pay premium rates to advertise on the site.
Will Seeking Alpha’s new strategy succeed? Share your thoughts in a comment below.
[UPDATE 10/14/10] Google shares soar as the company reports impressive 23% YoY growth after the closing bell. CEO Eric Schmidt attributes growth to strength of Google’s core businesses and “significant momentum” in its newer display and mobile advertising businesses. For the full report from Google, click here.
In a move intended to diversify their revenue stream, Silicon Valley giant Google launched a sprawling multimedia campaign named “Watch This Space”, announcing their increased efforts to grow their business in the display advertising sector.
There was a time when Google could do no wrong, and investors witnessed the search engine’s share price rocket into the stratosphere, reaching its peak at $741.79 in November 2007. Google shares are down approximately 16% YTD ($525.62) and many indicate this is the result of growing concern over the company’s dependence on search. As the New York Times highlighted in September, over 90% of Google’s revenues come from text ads.
The new campaign includes a massive interactive billboard in Manhattan and seemingly omnipresent display ads across the web displaying bold messages: “This Space Can Be Smarter” and “Display ads are big. They’re gonna be huge.” The ads often occupy every open display ad slot on their platform sites, making it difficult for readers to miss.
Earlier this year, Facebook surpassed long-time industry leader Yahoo! to become the leading publisher of display ads in the United States with 16.2% of the market. Yahoo! sits in second with 12.1%, and Microsoft has a 5.5% share to hold third place. (It is critical to note that comScore does not include ads from Yahoo! and Microsoft’s partner networks, which would undoubtedly vault Yahoo! beyond Facebook as number one, and advertisers pay significantly less to display ads on Facebook than Yahoo! and Microsoft.)
Notice the glaring omission? Google is nowhere to be found. Back in 2007, when Yahoo! acquired Right Media for a total of $725 million, the display ad market was growing but the future of success was not set in stone. The fear was that with a wealth of new websites competing for visitors and advertisers, the average price of display ads would decrease. As it turned out, the fear was not to be realized, as ad exchange services like Right Media and Google’s DoubleClick increased the average price of ads as a result of the tracking information and user behavior metrics they were able to provide.
With display advertising now solidified as a powerful revenue source, growing faster than the overall ad market, Google is at a key competitive disadvantage by not having a meaningful presence in the market. These new efforts indicate Google’s recognition that they can capitalize on a rapidly growing advertising sector by leveraging their incredibly talented human resources, expansive networks, and powerful financial position. Its search dominance not in doubt, Google needs a blockbuster new business unit to reassure investors that they aren’t a one-trick pony.
Will Google become a major player in the display advertising sector? Share your thoughts with a comment below.
Earlier this year, after two short months on the market, Microsoft decided to retire its “Kin”, a social media-centered mobile phone. In spite of strong reviews, the phone sold poorly, and Microsoft faced a key decision for its future in a market they had experienced relatively little success. On Thursday, a key executive in Microsoft’s mobile business revealed that the company will no longer pursue development of a new smartphone device.
The statement from Tivanka Ellawala, Microsoft’s CFO of mobile communications, comes at a critical juncture for the company’s efforts to become a true player in the mobile industry. Microsoft has developed Windows Phone 7 software, which has been promised to be a drastic improvement upon earlier versions of Windows’ mobile OS. Microsoft has thus far refused to reveal the manufacturers of the phones that will utilize the Windows Phone 7 software, but the company included hardware specifications, which Ellawala allows for “more predictability in what it takes to make the hardware work with the software.”
One of the crucial elements that the success of Windows Phone 7 hinges on is the adoption by the developer community. In an effort to stimulate development of mobile applications for WP7, Microsoft released a software development kit intended to help developers maximize revenue earned from advertisements.
To many investors, the shuttering of the failed Kin line was indicative of Steve Ballmer’s willingness to move on from products and projects that are losing money. In the past, Ballmer has been criticized for holding on too long to projects that were outside of Microsoft’s areas of expertise and were bleeding money. As Ellawala noted, Microsoft is in the software business, and that is where they need to maintain their focus. When one explores Microsoft’s efforts in mobile, the slang term “diworseification” comes to mind.
In spite of record cash flows and revenues, Microsoft’s stock price has remained relatively flat over a five-year period, getting lapped by competitors like Apple and Google. With the booming success of Halo: Reach, growing anticipation for Windows Phone 7, and the enticing prospects of an enterprise PC refresh cycle, Microsoft is in a healthy position moving forward.
After tripling profits during his tenure at his previous company, the powerful men and women of Wall Street praised him. After slashing 50,000 jobs in five years and cutting costs across the board, he was the most hated man in tech. Now, he makes his move to a company whose own CEO came to his defense when most wouldn’t dare.
In a move that was widely speculated upon in recent days, ex-HP CEO Mark Hurd joined the Oracle executive team as co-president and gained a seat on the board of directors. This comes alongside news that Charles Phillips, another Oracle co-president and director, resigned.
Larry Ellison, the billionaire founder and CEO of Oracle, was one of the few who stood up for Hurd during the scandal that forced the HP CEO to resign, said Monday that “Mark did a brilliant job at HP, and I expect he’ll do even better at Oracle. There is no executive in the IT world with more relevant experience than Mark.” More than anything, this proves that Ellison’s early comments defending Hurd weren’t just lip service.
Hurd’s track record at HP is indisputable. He took over the struggling tech giant, cut costs mercilessly, and oversaw a 300% increase in profits during his tenure as CEO. For this, he gained respect among investors on Wall Street, and HP’s share price recovered from the failed Carly Fiorina era and steadily rose. For this, Hurd’s reputation took a heavy hit among employees.
According to a Glassdoor.com report, Hurd was the most hated CEO in tech. He had a 34% approval rating, and a 66% disapproval rating. His approval rating dipped as low as 19% in the second quarter of 2009. In comparison, Apple CEO Steve Jobs had a 98% approval, 2% disapproval rating, and Cisco CEO John Chambers had an 81% approval, 19% disapproval rating. Oracle CEO, Larry Ellison, who is Hurd’s new boss, had a 78% approval, 22% disapproval rating.
Image Credit: TechCrunch, Glassdoor.com
The reasons behind these numbers aren’t exactly a mystery. As Mark Hurd made drastic cost cuts at HP, employees at the tech company were stripped of many of the benefits and luxuries they had grown accustomed to. Let’s not forget to mention the 50,000 employees Hurd cut, many of whom surely had friends still at HP who weren’t too happy with the extra workload they now were responsible for. Anytime a manager requires more productivity and revenues from fewer employees and resources, stress will skyrocket and employee morale is likely to plummet. With employee satisfaction being a significant factor in productivity at any company, this situation begs the question many managers face on a daily basis: “How can I squeeze the greatest profits from the fewest resources?”
Hurd left his old employer disgraced and hated, but success in his new position at Oracle may redeem him among detractors. The balance between cost-cutting and employee satisfaction is a fine line, and it will be intriguing to see how Hurd chooses to fulfill his new role as co-president.
Have you ever faced this dilemma? Did you hold cost-cutting measures personally against your boss, or do you recognize it as their duty to maximize profits at any cost? Share in a comment below.