Living social lost $558mm in 2011 on revenues of $245mm

Living Social may not be under the same level of public financial scrutiny of the now public Groupon, but performance data is out there and it makes for interesting reading. All Things D have posted a summary of the Living Social results and sales for 2011 as drawn from Amazon filings (Amazon owns 31% of Living Social). Here are the main numbers for 2011

• Revenues: $245mm
• Net Loss: $558mm
• Total value of sales (gross bookings): $750-800mm (not including some foreign investments)
• Current valuations: $4-5 billion based on Amazon's book value of it's 31% stake in Living Social at $208mm

For more and comparisons to Groupon's results check out the full post at All Things D

2012 Predictions: Part 3 - The promise of social media and the rise of the ecosystem

Third and final part in my three part “Predictions for 2012” post. Part 1 here, part 2 here.

Part 3 - The promise of social media

Good News: We know where to go to find people in social

The good news is that where to find people on social is known. There might be a 1,001 social media sites but as Om Malik confirms in this recent piece on some comScore data Facebook is dominant followed by well known names like Twitter, Linkedin, Google+ and Tumblr. [as an interesting side note, it looks like MySpace still has a decent amount of traffic (more than Googe+ though no activity or time on site to speak of) and the hot to trot pinterest is gaining followers fast.]

Marketing platforms are emerging for each of the leading sites. Meaning the marketing departments at travel companies (suppliers and intermediaries) have suites of tools to work with in attracting social audiences. There maybe a lot of debate around whether or not social is a fad or meaningful (underhyped, overhyped or somewhere in the middle) but the tools to take advantage are known. The easy prediction (and good news for the large social media companies) is that advertising dollars will flood into social media in 2012.

The more detailed good news, I predict that money can actually be made with smart advertising on social media. It was thought in 2011 that social media was just for brand building and customer engagement. In 2012 we will see the first hints of sales and direct marketing activity on social media. Get ready and prepared to see and buy ads on Facebook, Linkedin etc that look like ads on Google.

[side note – here is a link to my 5 tips for launching a social media strategy]

Bad news: four eco-systems, four business models

While the growth of social means more opportunities for brand building, customer engagement and (I predict) sales, it has also been part of fracturing of the web media and content worlds into a series of different ecosystems with different content and revenue models. Google, Facebook, Youtube, Apple and maybe even Amazon. In each ecosystem the means of gaining prominence and then generating revenue is very different – so different that it takes more than just an adjustment or tweak to do it properly. Instead it takes a full-scale effort.

In Google you get prominence from inbound links, quality of content, site structure, bidding capability and dollars spent. The reward is traffic that may or may not results in sales depending on how good you are at monetisation. The ecosystem is completely open. Content is created or published on web pages, open for the world to see and search.

On Facebook prominence comes from customer engagement. Getting customers to like you, use your app and then continue to read you and hopefully comment. To stay engaged for a very long time. The potential rewards are a long spectrum of possibilities from the warm and fuzzy (customers engaging with the brand) to direct response (clicks onto booking engines). But the big money inside the ecosystem is restricted to Facebook and some gaming companies. Everyone else is at the warm and fuzzy side of the spectrum. The ecosystem is closed. Consumers may screw up and put public content intended to be private but inside social media there are terabytes of content excluded from the Google and the general public.

For Apple prominence comes from developing an app. A good app is very very different to a good website (or a good Facebook page). Not only does an app need to work on a smaller screen, in a perfect world it should work offline and online. The best are purpose built and targeted to people in different states of mind. But the rewards can be more immediate. Customers are happy to pay money upfront for apps and content from Apple. Less so in travel than in pure entertainment and games worlds but there is money being spent on Apple for language guides, local transport planners, destination guides and more. The ecosystem is closed.

Finally inside Youtube prominence comes from video content. The production quality does not have to be expert but the content needs to be entertaining. Great videos can generate numbers that make TV executives want to cry. Viral hits can out-rate the best of Hollywood. But - there is no formula or rule book (yet if ever) for a YouTube hit. The rewards are…..not sure. There is some advertising and there maybe some brand improvements but the dollars are small and outside of a megahit the brand benefits low. For a travel company there is no answer yet to either “how to make money on YouTube?” or even “how to build a brand on YouTube?”. In short there is an ecosystem in YouTube with monstrous amounts of traffic but no one knows how to use it other than to post and hope for a viral hit.

The bad news here is that for now you need to pick. Need to pick which ecosystem you are in and hit it hard. You can flirt with others (ie hit Google hard and flirt with Facebook). But you need to pick the main one and double down efforts. I predict that a lot of money is going to be spent and wasted by companies trying to play in all four to the same level.

[for more on this see these articles. Interview with Phil Simon on the “Age of the Platform”, post by Jason Calacanis on “Founders defining reality” and Nigam Arora’s post on the recent Google earnings announcement for the stock consequences]

Thanks to jooyoung.kim from Flickr for the image

2012 Predictions: Part 2 - The Promise of the mobile web

Second part in my three part “Predictions for 2012” post. Part 1 the promise of recovery is here

Part 2- The Promise of the mobile web

The Good news – mobile is DONE in major markets

The mobile internet is effectively ubiquitous in the major online markets of the world. The stats on iPhone, android, blackberry and Windows mobile phones tell a story of enough smart phones in pockets to drive the promised 10% of online travel business that was mentioned at conferences throughout 2010 and ‘11.

We also know that mobile no longer means on the move. Studies show that people are sitting in-front of their televisions, eschewing their laptops for tablets and smartphones as a means of consuming multiple forms of content simultaneously. This is great news for travel content companies (all types such as TripAdvisor, Lonely Planet and Travelfish). With smart phone customers are looking for the mobile to fill in the scores of daily “gap moments”. Those brief periods of time when nothing is happening and pockets of boredom set in such as commuting, television advertisement breaks, waiting for a food order etc. The default for people in that moment is to pick up the phone and start surfing. Smart travel content companies will take advantage.

Expect to see content companies devoting more energy to mobile through even more apps (if that is possible). Also expect to see content broken up into more and more chunks or small pieces and quick reads. This is so that content can be in short enough forms to meet the small amounts of time that are available during the “gap moments”.

[for more on this keep a regular watch on Norm Rose’s site TravelTechnology – here is a great recent post on mobile including an well crafted infographic]

The Bad news – mobile will help intermediaries over suppliers

The back half of the 2000s/naughties in online travel was dominated by hotels and airlines clawing back online share from online travel agents. Particularly airlines and chain hotels.

Intermediaries have an advantage in mobile as it is much harder to look at more than one screen. Customers are looking on mobile for one app or site to provide the answer. This favours the intermediaries. Expect to see the intermediaries run hard with this by launching more and more sophisticated apps and upgrading them regularly. Expect to see suppliers spend lots of money trying to figure out what to do to regain share. They will look at better booking apps for searching and booking. They will also spend money on apps and services for on-property activity, They will try new (maybe recycled) business models including ideas like RoomKey. And – they will try to launch content and destination business. Unfortunately for them a lot of that money will be wasted. As the mobile web is now and will be through all of 2012 there is a natural advantage for intermediaries. Barring a mobile web technology or platform shift, suppliers are going to need to innovate unlike they ever have before to maintain their web based share in the mobile web.

thanks to m for matthjis via Flickr for the photo

2012 Predictions: the BOOT has good news and bad news. Part 1 - the recovery

2011. 2011. 2011. I have to type it three times, to remind myself how big year it was. So big, it has taken me almost a month to get over the end of it and publish my predictions for 2012. I turned 40, which makes me about 100 in Internet years. I started a new job and launched a new business. Meanwhile the online travel world ignored my aging and changing - it just kept powering on. Smashing through a world economy that can’t decide if it is in boom or bust. But what of 2012? Here is what a 40 year BOOT thinks will happen in 2012. There are three exciting things about 2012: the promise of economic recovery, the promise of the mobile web and the promise of social media growth. Like all wizened old grouches, I have good news and bad news about these three promises. And.. like those aging bloggers who are writing less than they used to I have split these predictions into 3 parts.

Part 1 - The promise of recovery

The Good news - another wave of online demand is coming online

Next year will mark the year that everyone born in 1994 turns 18. This is more insightful that it sounds. It is significant because 1994 marks the year the world wide web was born, meaning 2012 is the year the first true 100% internet generation comes of age.

By coming of age they become economic entities that get jobs and make their own decisions on where to spend money and when to go on holidays. This generation and those three to five years older than them will fuel another burst of growth in online travel spending.

Combined with the growth of middle classes in China and India, 2012 will see a greater shift in offline to online than we saw in 2011. I predict products will continue emerge/grow online to catch this wave (ie P2P travel such as Airbnb).

The Bad new - It is 2008/2009 all over again

2012 will not deliver the economic growth and renewal that has been hoped and predicted. As a result we will see a general drop in travel demand even as online share increases.

This drop will not be as bad as – but will be a reminder of – the declines in 2008/9. I expect this to drive a drop in travel supply prices (hotel, air, cruise).

Unfortunately I predict that we will see some further announcements by suppliers in the areas of bankruptcy, closing of brands and disbanding of joint ventures.

It will however give deals a big push – both for dedicated deals sites and for the general online travel agent market. Watch the deal market and businesses grow (even if we lose some players along the way).

[FYI - here are my 2011 predictions]

Thanks to merwing on Flickr for the photo

Taiwan Tourism trying to sell snow to eskimos

I cam across this advertisement by Taiwan Tourism while catching a train in Sydney. They can also be found in buses all over the city.

I am all for promoting Taiwan as a destination and am happy for them that Lonely Planet named the on of the top 10 countries to visit in 2012. But this is an absolutely stupid campaign idea. If the target market is Australia, especially Sydney siders, then here are probably 107 things you should promote about Taiwan ahead of surfing. I showed this advert to my 9 year old son and asked him "what do you think?". His reply "waves look crap, Dad". Hardly a great tag line to inspire travellers. My marketing tip for Taiwan tourism - selling surf to Australians is like selling snow to eskimos. You better be very very very good at it before you try. Have a look at the below and tell me what you think.

The BOOT (and Lounge) at WebInTravel and ITB Oct 16-21

I will be in Singapore next week (Oct 16-21) to attend WebInTravel and ITB asia. Send me an email if you are interested in meeting up.

I am running a series of sessions and presentations across the WebIntravel program (both the main program and the Boot Camp). Here are the sessions I will be in

At the WIT Boot Camp I am on at the following times (Monday 17 Oct)

11.00-11.50 Innovation Across Asia, Part 2
Facilitating a series of presentations on innovation and what's news across Asia. Presenting will be:

• Australia: Ian Cumming, Founder, GetFlight
• Singapore/Malaysia/Thailand: Brett Henry, Vice President Marketing, Abacus International
• Vietnam: Tran Trong Kien, CEO, Buffalo Tours, Vietnam
• Facilitator: Timothy Hughes, CEO, Getaway Lounge, Australia

12.30-12.40 The WIT Bootcamp Debate: Old People Suck At Start-Ups
Standing in between two entreprenuers and they battle it out over whether or not old people belong in start ups.

• For: Wong Bi Ying, Content Strategist, Savant Degrees, Singapore
• Against: Timothy O'Neil-Dunne, Managing Partner, T2Impact

At the Main WIT show

Tuesday 18 Oct

12.40-13.00 The first two presentations of the inaugural WITovation Awards 2011

I will be presenting the Winner of the Mobile Groover section

15.00-15.45 The WIT Groove Debate 2 + Panel

Debate: A debate on the value of deals. I will be head to head against a Sabre representative on the value of the deal sector

• For: Patrick Andres, Vice President, Sabre Hospitality Solutions, Asia Pacific

• Against: Timothy Hughes, CEO, Getaway Lounge, Australia

Will then join a panel to discuss further with

• Bryan Lewis, Chief Commercial Officer, Agoda

• Tai Parata, Managing Director, Travel,
• Ensogo
Patrick Linden, Co-founder and CEO, Dealguru Holdings, Singapore
• 
Remy Merckx, VP e-Commerce Sales & Distribution, Accor
• 
Tom Gallagher, Executive Vice President, Revenue Generation, Pegasus Solutions
• 
Mohamed Yusof, Director of Business Strategies, Royal Plaza on Scotts, Singapore

All moderatored by Yeoh Siew Hoon, Editor & Founder, Web In Travel

On the 19th

Oct 19, 16.10-16.40 Get Into The Groove – The Future of Social

• Jakob Riegger, Co-Founder & Managing Director, TrustYou, Germany

• Danny Oei Wirianto, CEO, Mindtalk, Indonesia

• Margery Lynn, Dachis Group South-east Asia
• 
Abrar Ahmad, Partner, Travel Capitalist Ventures

Mobile Search Still has a long way to go...about 17,000kms

In 2008 and early 2009 I was a mobile skeptic. I argued on a number of posts that that true mobile Internet was still years away. Then in Nov 2009 Google bought AdMob and I ate humble pie - admitting that the mobile Internet was here to stay. As a convert I became a near fanatic writing a two part piece on Tnooz (part 1 here, part 2 here) on the mobile revolution and what to expect next. I also predicted that this year mobile would "die" as a separate category and simply be subsumed into the "regular" internet.

But yesterday I was brought down to earth again and reminded how there is still so much that needs to be done to make the mobile Internet ubiquitous and universally useful.

I found myself yesterday at the TRAVELtech conference with a problem. The sole of my shoe was beginning to fall off. Rapidly. I was about to go on stage to present but became worried that between the audience and the stage my sole would fall off completely making me look more hobo and hopeless than serious and CEO like. So I did want any normal exec of the second decade of the 21st century would do. I pulled out my iphone and Googled "shoe repairs sussex st" (with sussex st being the major downtown city street behind me). I then followed up by prompting Google to accept and read my location using the GPS and manually accept that I was in "Sydney,NSW". Below is a screenshot of the search results

If you are on a device that cant see the image above, let me type out the text for you. It says

"Did you mean A B & C Shoe Repairs, Croft Rd, Crowborough, Sussex TN6 1DL United Kingdom"

A quick follow up Google search indicates that this particular shoe store is about 17,000km from my current location. Clearly the word Sussex confused the search algorithm. But how? How did the world "sussex" override that Google new exactly where I was via the GPS and new the broad region through by selection of Sydney. Either way, I was forced to put down the phone and try to find some double sided tape to save the day. I am still a mobile fan and believer but am reminded that there is much to doo before the shoe and the BOOT are fully satisfied by the phone.

BOOT at TRAVELtech 2011: Sydney August 29

I will be at TRAVELtech 2011 presenting in my role as CEO of travel deal site Getaway Lounge. The session is titled

Daily Deal Websites – A New Distribution Channel or A Flash In The Pan?

Wow, two years ago this sector hardly existed now it is white hot. Travel was slow to get on board – leaving the playing field to restaurants, spas and hairdressers - but not it is full steam ahead with several purpose built companies emerging and big incumbents getting also getting involved. Overview from industry analyst followed by panel discussion.

I am on the panel with a who's of deal site execs in Australia

• Tim Hughes, Getaway Lounge
• James Gilbert, Living Social
• Sam Friend, TravelCandy
• Sam Yip, Senior Research Manager, Telsyte
• Dean McEvoy, Founder, Spreets

Registrations are still available here.

Let me know if you will be there and want to meetup.

Thursday - tweeting about Stayz, Fairfax, Occupancy and Vacation rentals in OZ

Tomorrow (Thursday 21 July) I will be at a press event for the Stayz Group (called a holiday rental summit). That is the collectioPublish Postn of companies that Fairfax (media coy) have put together that allow booking of vacation rentals, holiday homes and short lets. Will be tweeting from 830am-1030 or so (Australian eastern time) under the hastag #stayz

For background on the sector check out these posts. More on this interesting sector soon

• Fairfax buys Occupancy.com - owns online vacation rental market in Australia
• Australian Online Market for Short-Lets and Holiday Rentals: Interview with Occupancy.com joint-CEO Justin Butterworth Part 1
• Australian Online Market for Short-Lets and Holiday Rentals: Interview with Occupancy.com joint-CEO Justin Butterworth Part 2

BOOT speaking at Pricing For Growth conference Sheraton on the Park Sydney 25 July

I will be at the Pricing For Growth conference at the Sheraton on the Park on July 25. My session is at 945am on the Monday. Topic is:

Case study Competing effectively in an online world

• Keeping up with the changing business models that are being borne out of the growing online world
• Tailoring and strengthening your online pricing strategy to withstand both local and global competition
• Having an agile pricing strategy in place that can quickly respond to market changes when time is of the essence
• Transparency, opacity, flash sales, closed loops, geo targeting and the complexities of selling in a world where everything can be discovered

Let me know if you are attending and want to meet up.

WebInTravel 2011: WITovation Awards and Nominations

The deservedly popular WebInTravel conference is schedule for October 18-19 in Singapore. As part of this year's conference organiser Yeoh Siew Hoon is running a series of Awards called the WITovation Awards. These award will "recognize companies or individuals which have made a difference in a chosen field, either through a specific marketing campaign or an overall strategy, in the digital travel space in 2011.". Four cateogories - social media, mobile, niche/specialist and customer focus. Details here and nominations through this PDF form.

Seat Review - Pacific Blue International Economy Class (Virgin Australia)

Virgin Australia (nee Blue) may have rebranded and retargeted itself in a flurry of fancy press events and well crafted media releases, but when it comes to the product there is nothing fancy or well crafted about Virgin Australia’s Pacific Blue international economy class. It is a flight that gets you where you are going with a smile but the bare minimum of extras. It is low cost seat, nothing more. The BOOT rating for Virgin Australia / Blue International Economy is 1.5 stars out of 6 or "Bad Seat". Here is the detailed (other reviews and scoring system for airline seat reviews here)
Getting on board	Score 0
I am Velocity Gold (Virgin’s frequent flyer program), Qantas Gold, United Gold and Singapore Airlines Gold. But none of that matters or means anything when flying Pac Blue. There is no lounge access for anyone in any status or any class no matter what. I put a post on Australian frequent flyer hoping that someone knew a trick or twist…but had nothing but crickets in response. On the Virgin website under the lounge section they mention how for every other international flight they do on V Australia, Virgin Atlantic, Etihad etc. Velocity Gold is enough to get lounge access. If flying from NZ there was mention of some lounge with names I'd never heard of. But in ex-Sydney on Pac Blue nothing. This is a significant weakness in this product. Lounge access is a critical value to a top tier flyer. The absence of it is felt and sets the tone for this product. I did get access to a priority check in queue which saved about half an hour on the land side (but then without lounge access what am I actually going to do with that extra time airside). Pac Blue is pure low cost carrier in approach but does have assigned seats. However, they have not initiated online check-in for international departures. By phone they will not set aside seats for groups/families sitting together. I asked over the phone “can you guarantee that all four of us will be seated together.” The useless reply was “we cant guarantee but you will probably be able to sit together.” This means we had to be at the airport 2 hours ahead of time to guarantee being together which mean 1.5 hours in the airport with no lounge access. Pure LCC. Note - DJ have announced a tie up with Singapore Airlines which may deliver lounge access but press releases of future luxury do not remove the sting of having to pay $5 for a luke-warm coffee on a hard bench in an overpriced airport.
The Seat	Score 0
It is a economy seat on a low cost carrier so you expect it to be small and narrow. It meets that expectation. To be fair, the seat is a reasonable size for a economy class seat. The tray table is a fair size and adjustable. The arm rests lift, allowing children to easily sleep on the laps of parents. The seats are leather and pleasant on the eye. All acceptable stuff. What is not acceptable is how dirty the area is in and around the seats. Carpets stained with what I hope is food. Seats covered in what I hope is dust and seat back pouches filled with tissues, dirt, wrappings and what I hope is not human waste. Filthy and unacceptable. If is fine for low cost seat to mean small but it is unacceptable for it to mean unhygienic. What is also not acceptable is the slant. For some reason the head rest slants forward not back. It is understandable that the LCC economy class seat does not recline much but it is unacceptable that the headrest pushes forward - not lean backward. By pushing forward it makes sleeping impossible. If it could lean back just a few inches it would go from impossible to bearable.
Entertainment	Score 0
Virgin’s live2air service combines a live feed from Australian cable television companies Foxtel and Austar. Means 24 cable channels covering sport, comedy, drama and kids programs. There is also a movie channel with 3 movies running on a loop (set start times). Cost is $9.90. That is fair and reasonable for a low cost carrier but I am not sure why they chose live TV vs on demand TV. For live TV to be attractive there has to be something on at the time you are on. Taking a day-time flight means the TV channels are full of...well…day time television. Hardly appealing stuff. The decision to use live TV goes from strange to ridiculous on the return trip starting in international waters. Clearly Virgin or Foxtel have not secured rights to broadcasts starting in non-Australian waters. As a result return trips to Australia involve a number of hours of "service not available" until Australian territorial waters appear. Virgin should replace this as soon as possible with an on demand service
Food	Score 0.5
There is lots of food on board provided you are happy to pay. Again -completely acceptable on a low cost carrier. But it is completely unacceptable that there is no free water option. The only water available is $3 for 330ml. It is well accepted that you should drink a lot of water on planes. The official recommendation is to drink two litres per day. For a flight you should increase this 50%. Means for each hour of flying time you need to drink between 125-200ml of water. To do this on DJ long haul adds a minimum $12-13 to the price of the price of each ticket. It should be a regulatory requirement that airlines provide water. Regulations aside Virgin must immediately change this position and make water available for free. Another peculiarity of the food is the timing of the hot food service. My flight was a day flight lasting 7 hours. The first cart came passed a few moments after take off (ie in the morning Sydney time). It was only made clear to me later (maybe I missed it) that this was the only time hot food would be served. This does not work for me (and probably for most people) to get on a plane first thing and have to eat the only hot meal. As Sydney dinner time approached all that was available was day old wraps and cheese and crackers That all said, the quality of the food on offer is better than low cost carriers I have flown in Europe through the sourcing of snacks from higher quality providers.
Service	Score 1.0
The staff were fantastic. They out-shined all other elements of the product. The staff were pleasant and lively despite a flight at horror hours and children running everywhere. A tribute to air crew. The plane was full of children running everywhere yet the staff dealt with all with a smile, a sense of encouragement and filled with great humour
BOOT Factor	Score 0
The flight is factor-less. There is not a bell or a whistle or a twist.
Final Score	1.5

BOOT and Getaway Lounge profile piece on WebInTravel

Over at the WebInTravel site there is a profile piece on me and my new venture - Getaway Lounge. Title of the post is "Give me a deal, and I will give you brand, sales and customers"

Tnooz: why the Baidu / Qunar deal is a moment in Chinese economic history

New post now live on Tnooz titled "Unhappy Fourth of July – Why summer 2011 is a big moment in Chinese online travel". In it I analyse the $306mm investment by Chinese search giant Baidu in Chinese meta-search giant Qunar. Check out the full story and analysis here.