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Strategy report
TO: Proximity Social Networking Team FROM: Brigitte Stanley DATE: 27 October 2009 SUBJECT: Skype Strategy Analysis

This is my Skype strategy analysis for the Proximity Survey. Skype pioneered as social networking software that enables users to make low-cost telephone calls over the internet, as well as enabling features such as file transfer, instant messaging and video conferencing.


 * Profile**

Skype was founded in 2003 by Niklas Zennström and Janus Friis and was first established as a Kazaa company. It was then bought by eBay and currently holds its headquarters in Luxembourg. Skype has become one of the largest international voice carriers, and was reported that as of May 2009, there were over 17 million concurrent online users. Computer-to-computer traffic between Skype users was 2.9% of international carrier traffic in 2005, growing to 4.4% in 2006 and 8% in 2008 (Wikipedia).

Skype’s revenue results from two sources:

· Skype-In: This program allows people using landline phones to reach a Skype user on their computer using a regular telephone number. The telephone number can be assigned at 3 months at a time for $12, or double the cost for an entire year. (Watrous 1) · Calls made to and from land line or cell phones are charged at a per minute rate. An unlimited fee of $2.95 per month allows unlimited calling in the U.S. (Watrous 1)

However, Skype is only a marginally profitable company, which fueled eBay’s most recent business decision that sold 65% of its stakes for $1.9 billion in cash to lead investor Silver Lake, along with Index Ventures, Andreessen Horowitz, and the Canada Pension Plan investment board.


 * Competitive Landscape**

The core force driving competition is the technology advanced consumer base. The current usage of VoIP (Voice over internet protocol) technologies has been shaped by this base, offering services to focus on its technology thriving clientele.

Yahoo, Jahjah and Lycos are other companies that have all started using this technology to draw in users and enhance security within the company. All offer either low or no-cost online calling services to their users, as well as similar abilities available to contact PC-to-PC, like that of Skype.


 * Skype’s Strategy: SIP**

Skype’s strategy will draw in small businesses along with its individual users. SIP Beta is formulated to help its users connect your existing standards-based (SIP) communications to the Skype community.

Small businesses and consumers benefit from this feature in these three ways: · Allowing companies to place a gateway to Skype on their website · Enable viewers to call directly to the company’s landline or mobile by simply a click of a button. · A U.S. user may call an out-of-country company directly online and through this process, long-distance calling charges will be avoided.

This social networking tool is an efficient way to connect businesses with consumers through the use of one sole media source.


 * Gen-Y Implications**

Enabling the communication with businesses that are halfway around the world by simply accessing their website is definitely a beneficial new feature. This ease of communication will create a foundation for establishing connections between both buyers and sellers.

Skype’s biggest challenge will be to convince Gen-Y users to use this feature, along with convincing more companies use this VoIP channel on their websites.


 * References**

Abell, John, C. (1 September 2009). “EBay Sells 65% of Skype for $1.9 Billion, Andreessen Among Investors.” Wired Epicenter, New York Times, Retrieved September 22, 2009 from [].

“Skype.” (March 2009), Wikipedia, Retrieved September 20, 2009 from [].

“Skype for SIP Beta.” (2009). Skype Official Website, Retrieved September 21, 2009 from [].

Watrous, Lucinda. (1 September 2008). “A Brief History of Skype.” Bright Hub, Retrieved September 21, 2009 from [].

Blog proposal
TO: Proximity Social Networking Team FROM: Brigitte Stanley (ENGL 317 Miers) SUBJECT: Blog Post Proposal DATE: 26 October 2009

I propose that we do our Proximity blog post on business’ current usage of the social media as a way to advertise and sell their products. This post can be used to attract Gen Y, the most prevalent users of social networking, and to determine how advertisements on social networking websites have affected their buying decisions.  Social networking site are increasingly becoming the main portal for communication between major companies and Gen Y to attract these users to new brands and products in the market place.
 * Rationale **

Advertisements on these sites can benefit Gen Y and social media in two ways: · Providing the free social media sites with a source of income · Informing social media users of the newest brands and products on the market.

It only makes sense to advertise in this way due to the fact that social networking websites are some of the most visited sites online. Communication between companies and consumers using this method will increase marginal profits as well as keep this population up-to-date with trends in the market.  I recommend that we organize the post around Peter Metzinger’s blog: __Social Networking Sites Grab Big Slice of Web Ads__ run by Wordpress.com. We can embed the graph that shows the top online display ad publishers in the social networking category.
 * Sources **

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Report proposal
TO: Proximity Media Teams FROM: Brigitte Stanley: 1:00 Social Networking DATE: November 25, 2009 SUBJECT: Final Report Proposal

Social networking sites have dominated in the telecommunications field with innovative technologies that allow users the ability to connect online with others around the world. Individual sites such as Facebook, MySpace, Twitter, LinkIn and Skype now seek to dominate the thriving social media market, allowing businesses to use them as prime advertising outlets to reach potential buyers. I propose to write a report on how these sites are positioning themselves to make their resources essential components in this market.

The once sharp distinction between the professional and personal realm of consumers is slowly beginning to blur. · According to a new report, about one of every five Internet display ads in the United States is viewed on a social networking Web site like MySpace and Facebook. · Businesses use information from user’s recent searches and topics of interest to formulate ads on popular social networking sites that specifically target their audience. · Illustrate the increasing competition between social media sites and established Internet companies like Yahoo and AOL which have long claimed themselves as the top online destinations for brand advertisers. · Businesses are readily using these sites not only to inform consumers about upcoming products but have also become a foundation in order to target prime candidates for job opportunities. Businesses need to find the most cost-efficient method to actively reach their potential consumers. With the use of social networking as an advertising outlet, they can deliver a high reach and frequency against target segments at a sufficiently low cost.
 * Need**

Clients of Proximity who wish to target Gen-Y consumers need this report to understand the role that these social media sites will play in housing the most targeted advertising tactics to meet consumer needs.

The proposed report, “Social Networking as an Advertising Outlet,” will cover the following topics: · Current businesses involved in social media site advertising; · The convergence of advertising on broad online portals to ads on specific networking sites; · The need for business to switch to social media site advertising to gain higher reach and frequency for their target consumer; · The future of social media site advertising.
 * Topics**

The report will also include attachments that outline social media site’s current interaction with businesses and compare functionality of each of the main site’s prime advertisements.

The following items are key sources for the report:
 * Sources**

Lipsman, Andrew. Social Networking Sites Grab Big Slice of Web Ads. 3 September 2009. //comScore, Inc.// Retreived 25 October 2009 from: [] Lipsman reports on efforts of advertisers that have switched to the use of the social media as a effective vehicle for their campaigns. Advertising on sites such as MySpace and Facebook has shown to reach a highly targeted audience, which is desired to the success of their messages. “As social networking sites innovate on their existing ad offerings, the category should continue to grow in ad volume, while CPMs could also increase if the sites can demonstrate a high campaign ROI.” (Jeff Hackett, comScore senior vice president)

Simbora, Jessica. Watch Out LinkIn, Facebook is Gaining on You. 10 September 2009. //CNN, Fortune Brainstorm Tech//, Retrieved 20 October 2009 from: [] Simbora reports on how Facebook has become a prime outlet for businesses to gain information about potential clients and of individuals that would be the most suitable for job positions. Sites such as Facebook provide recruiters with better targeted means to spread the word concerning job openings via site advertising.

Stross, Randall. Advertisers Face Hurdles on Social Networking Sites. 13 December 2008. //The New York Times.// Retrieved 20 November 2009 from: [] Stross reports on the negative side of social media site advertising and the difficulties that entail when making this a main source of online ads. Major advertisers such as Procter and Gamble have utilized Facebook for their ads but have not seen much return on their investment. They have seen that although this is a cheap way to reach a lot of people, they receive little attention from users who logged onto the site to socialize with friends, rather than brands. This brings up a problem for the future of advertising on these popular sites.

[|www.facebook.com/ads], [|www.twitter.com], [|www.advertise.myspace.com] Visibly seeing the layout of these main social media sites and how advertisements are displayed is a definite resource to view how businesses utilize the space and can formulate more direct advertising. Also, through this source you can discover the process in which advertisers must go about getting an ad on the website for users to see.

Team conference presentation proposal
//paste team conference presentation here//

Sales letter and report prospectus
December 21, 2009

Brian Recher, Joint Owner Recher Theatre 512 York Road Towson, MD 21204

Dear Mr. Recher,

I enjoyed talking with you yesterday at Proximity’s //Next Generation Media Seminar// regarding Recher Theatre’s need to more efficiently promote its talent to Gen-Y consumers. Enclosed you will find a prospectus for the report I mentioned describing the ability to use currently flourishing social networking sites to promoting what your theatre has to offer to Gen-Y.

As you spoke of yesterday, in order to get Gen-Y to come to The Recher Theatre you must be able to reach them through marketing. Social networking sites are the most used by this generation and would be a fundamental tool in getting the attention of Gen-Y users. I believe Proximity can aid in devising a comprehensive advertising campaign that uses on-demand media and social networking sites to obtain your marketing goals.

Facebook is currently the top social networking site and would enable heightened advertising feedback in its ability to reach Gen-Y users in Towson and its surrounding areas. “Brandlift”, Facebook’s new advertising solution that will help market The Recher Theatre as a hip place for teens to listen to live music from local and big name bands and be able to network with others of the same taste in music. Facebook users often show they are fans of certain bands or types of music and with this information; you will more effectively be able to selectively target Gen-Y users that would be the most receptive to your ads with updates on upcoming bands.

I would like to extend a personal invitation for you and your staff to join us at Proximity’s Towson office for a specialized meeting to determine how we can best aid in marketing The Recher Theatre more readily to Gen-Y. Thank you for your time.

Sincerely, Brigitte Stanley Associate Media Analyst

**//PROXIMITY Reports//** || || //Connecting with Gen Y using on-demand media// ||^  || ** Viral Marketing to Gen-Y ** Brigitte Stanley // Social Networking Site Trends Supplement Business Advertising // || **//__The Problem__//** Businesses and marketers need to find the best way to reach the Gen-Y user population without spending unnecessary amounts of money in markets that won’t meet their advertising goals. || **//__Proximity’s on-demand media solution__//** Proximity reveal to businesses ways to utilize the marketing trends in social media sites to effectively reach their target public and well as get the word out concerning their products or services. || **Available now at www.proximity.edu**