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How to Weather a Recession: The Case for Preserving Destination Marketing Funding

A380_ek_designAs millions of ordinary Americans rethink their priorities, neighborhoods and local communities find themselves on the front line of preserving their local way of life.

The Los Angeles Times reports the bad news that international travel is going down. Air India plans to eliminate its six flights a week between LAX and Frankfurt, with connecting flights to New Delhi and Mumbai. In late October, Thai Airways will no longer offer nonstop flights to Bangkok and Cathay Pacific Airways Ltd.said it was suspending one of three daily flights between Hong Kong and LAX. In all, at least 11% of international flights at LAX will disappear in November compared with the same time last year, wiping out nearly a decade's worth of traffic gains.

Everyone is affected by fuel costs and the state of the economy. But too often, domestic airports are held up by 655 radical groups who are trying to stop international flights like the A380 (pictured above, right) from their community.

As I've blogged before, airports are a key indicator of a city's health. You can only recirculate the combined income of your citizens so many times: a vibrant community needs a regular influx of dollars, people and commerce from elsewhere. To attract outside resources, you need a concerted community effort, which is where destination marketing comes in.

Lawmakers regularly take destination marketing for granted as their memories of successes fade. Today, 85% of travel funding comes through the destination occupancy tax, which some people know as the hotel tax. In a weak economy, there are many that covet those monies for traditional purposes that are unrelated to tourism.

As is the case with internet taxation, municipalities are reaching their breaking point in budgeting for police, fire, schools, and other critical infrastructure. People need to think harder about what it really takes to fund the places where they want to live.

Microsoft Surface + Sheraton: Implications for Hotels and Social Media

Surface Almost fourteen months after the initial announcement, the Starwood hotel unit Sheraton has finally announced the launch of Microsoft's Surface product at five Sheraton hotels: the Sheraton New York Hotel & Towers, Sheraton Boston Hotel, Sheraton Chicago Hotel & Towers, Sheraton Seattle Hotel & Towers, and the Sheraton Gateway Hotel in San Francisco.

Surface acts as a sophisticated kiosk: it's placed in common areas, to  encourage collaboration and exploration. Surface uses haptic technology to let guests control the interface using gestures. The Surface unit comes pre-programmed with a virtual concierge that suggests places to go as well as a  Sony-branded music experience featuring selected Sony BMG artists.

Much has changed in the last fourteen months. The iPhone has gone through two versions, and I'm betting that a $499-$599 Apple netbook will come out by October 2008, essentially providing the same Surface experience but with a larger base of applications and better portability.

Whatever Microsoft has spent on Surface to date pales in comparison to the $200 million Rearden Commerce has spent trying to put together a similar web-based product. The challenge that both services will face won't be developing fun marketing, but rather keeping information up-to-date: how would guests feel if Surface directed them to a restaurant that closed down months ago?

I tried to search for Palomino in Denver, which shut down on January 20, 2008. Eight months later, only Microsoft and Yahoo appear to be on top of such matters, as Google and Citysearch both fail to convey that small but important fact.

Let's hope that Sheraton's collaboration with Microsoft yields better results for the consumer.

Here's the promotional video for Sheraton's launch of Surface:

Video: Microsoft Surface at Sheraton Hotel & Resorts

Cool New Tools: Balsamiq, Friendfeed and Lijit

Mockup_2_3 If you're one of those companies that are looking at updating your website or blog, you should check out Balsamiq, Friendfeed and Lijit.

After reading the "Future of Blogging" from ReadWriteWeb, I was pretty inspired to try something different. In the past, it would take days or longer to put anything together. 

But this time, it only took me about 10 minutes to put together a wireframe (above right) using Balsamiq, and from there a little over an hour to get the domain name, and collect all the widgets necessary to build the DNC Blogger page.

Long ago, I learned I could save a lot of time by working with the client to develop wireframes -- basically storyboards for web sites. Balsamiq is the first web tool to really simplify the construction of wireframes.

Julia_allison_blog The goal with the page was to provide "eventstreaming" -- highlight the breaking news and storylines as reported by the 54 or so "official" bloggers of the Democratic National Committee Convention to be held here in Denver at the end of the month. After looking at ReadWriteWeb's analysis of the design of Julia Allison (left) and Alan Cheslow, I decided to roll with Alan's approach.

Friendfeed provides a "river" of the latest posts in a single feed. Next to it is our version of the blogroll -- rather than providing just the names of the blogs, why not give them a bit of color and the last five or so posts? I think that RSS feeds often depersonalize blogs and rob them of the idiosyncracies that make each blog so memorable.

I included the blog search widget from Lijit.com. I think all political blogs should use these guys. I asked Lijit's bizdev guy Micah Baldwin (MEE-hah BALD-win) to create a custom version of the search for DNC blogs. This search was different in that it provided two levels of search:

  1. Search the blog itself. This is the search people are used to. 
  2. Search the blog and all blogs in its blogroll. This is what I think is really interesting -- it returns search results based on the blog and its "kindred spirits", as defined by the preferences of the blog editors.

The Lijit widget provides a search term cloud that lets you see the most frequently searched terms.

Plus, if you discovered the blog by using Google to search for a specific term, Lijit remembers that and suggests blog posts that contain that same search term.

Lastly, I put in a feed that contains the last 15 or so Twitter "tweets" that relate to Denver and the DNC. Twitter is like CB radio -- you can tune in to specific channels and get a never-ending narrative about what people are doing. For the DNC, Twitter will let us provide a backchannel much like a mobile phone tour guide: people will be able to find out what's going on, ask questions, and as a result, make smarter decisions about where to go and what to do.

The #1 Source of Consumer Aggravation: What Happens When Maps Aren't Accurate?

NeworleansFirst, reviewers (New York Times, Seattle P-I) started discovering inaccuracies in local city guides for the iPhone.

Then, in the wake of Hurricane Katrina, map accuracy is being called into question. Peter Zollman, writing for Poynter, shows how the Lakeview residential area (shown to the left), is actually filled with houses "...(that) are either restored, gutted and awaiting restoration, or demolished."

Peter should know, he lives there.

So I checked this against some construction taking place across the street from the Colorado Convention Center. Looking at Yahoo, Google, and Microsoft (note these three links display the same area on the various services), Yahoo and Microsoft both show the area as a parking lot. Only Google shows any construction, which actually broke ground on May 15, 2007. The image below shows the same area as of January 2008: clearly not a parking lot!

In other words, the satellite views for all three services are at least 15 months old.

Spire_today I really did like Microsoft's bird's eye view here, but wrong is wrong. Local search should be accurate, whether it is search, video, or maps. No one likes going online, driving a few miles to go somewhere, only to find the place is either closed or no longer exists.

Years ago, it was easy to underestimate the value of TVGuide. Analysts would ask, if you had relationships with all of the television networks, how hard could it be to recreate the enterprise? The fact of the matter was that TV stations' programming was often out of local control. Print products could take days to get to market versus hours for electronic programming guides (EPG), but if the EPG showed television shows that weren't going to air, even the slickest EPG wasn't really going to be worth much.

It appears that investors have a strong interest in local applications, which will only intensify if Apple releases a $499 netbook in September. Given these developments, it will be interesting to see what investors in local media will choose to do in order to to ensure their investments feature accurate, up-to-date information.

More Support for the $499 iPad: Inside Orange Telecom's Free Laptop Offer

OrangelogoThe International Herald Tribune reports that Orange Telecom is offering a new twist on the "free hardware with two year service contract" program: a laptop computer, not a mobile phone.

The "Connected Laptop" offer includes a free laptop from Asus or Hewlett Packard, a USB modem and up to five gigabytes of downloads for £25 to £45 pounds, or $49 to $88, per month. As mobile operators start giving away devices other than cellphones, experts say, the industry is entering a new phase. It reflects market realities: people simply are not calling each other as often, so they're looking at new and exciting ways to lock in data traffic growth.

This echoes a comment I made earlier -- there are reasons other than pure price point for Apple to build an incredibly cheap netpad (to the tune of $499). They see, as AT&T does, how the wired consumer is changing before their eyes.

Meanwhile, the rumors of the Apple iPad - or iPhone Touch, MacBook Air II or whatever you want to call it - are growing. Macosrumors responded to my prediction of a $499 Apple netpad product, saying:

"...Nonetheless, this new bridge between Macs & iDevices will be only the beginning of a huge move on Apple’s part to compete aggressively on value and further diversify its offerings... expect several new products this year, along with aggressive revisions of its high-end systems like the Mac Pro & Xserve to start pulling in major large-scale projects that can help offset its aggressive margin-shrinking moves."

With cheap, internet-connected notebooks, we see a tremendous opportunity for video yellow pages. Just imagine: see a video for a hotel, and if you're interested, you're automagically connected.

Looking In on The 10 Richest Streets in the World

I was once told that 40% of the world's real estate value was tied up in less than 1% of the actual land mass. I took today's "Wealth Report" and turned it into an interactive map so you could actually see where these streets are and get a sense of the actual topography. This mashup will let you zoom in on the cities, then switch from "Road" to "Aerial". Click on the balloons and you'll see sample real estate prices for that area. Seeing the data this way lets you marvel at the size of the swimming pools in Monaco...or gasp at the land values in Mumbai, India.

If you believe the comments, just missing the cut are places like Tuckers Town Road in Bermuda or Sandbanks in the city of Dorset, England.

With the changes in fuel prices, the world's value topography will be reshaped as it gets more expensive to move physical product. The value of these streets increases along with access to public transportation, availability of fine dining options, and of course, ready access to world shipping lanes. I'd expect real estate values near public transportation to go up by 2-3x, even as the overall real estate industry experiences the estimated $16 billion of deleveraging that has to take place, somehow.

WWJMD? Some Corporate VC Advice for David Drummond

GooglevcToday, noted VC Fred Wilson chimed in on Google's venture capital aspirations. Fred is a Google investor and points out some of the major disconnects between corporate and entrepreneurial venturing. I'd encourage you to read his post in its entirety, he raises some important points. But as David Drummond and William Maris sort out the pros and cons of corporate VC, I thought I'd share a few observations.

First, I should point out that I'm not a venture capitalist. But I had a short but meteoric career at the nation's largest cable TV company in their fledgling VC group, and I think I had a good opportunity to see what was and wasn't successful.

Perhaps some history would be in order.

Cable operator Tele-Communications Inc. created Liberty Media in 1991 and hired Peter Barton to whip things into shape after his successful stint at Cable Value Network. Liberty's entrepreneurial culture flourished in the entertainment mecca that was Cheyenne WY, far away from the parent company. This set the tone, as each investment kept its management and corporate culture intact. Over the next few years, Liberty Media helped a lot of today's cable channels got started, thanks in part to its recurring revenue model: for every cable subscriber, the network would get anywhere from a penny to a quarter, every month.

Strong, predictable cash flow covered up a multitude of sins, and early cable networks gained access to the resources they needed to grow. For example, ESPN soon stopped airing ping pong and tractor pulls and landed lucrative contracts with the NFL, NBA, MLB and college football. It got to the point that the major leagues today depend on television revenues for their livelihood, something I've blogged about here. (I should note that Peter left the year after I left TCI, and passed away entirely too early in 2002 at the tender age of 51.)

Now, Dr. John Malone and Peter understood pop culture intersected with technology. TV networks, like Microsoft, understand that the key to their profitability is the ability to obsolete their own products. That might may have been one reason why they invested in a slightly eccentric billboard executive's vision of a 24-hour news network.

If you buy into that premise, it means that future web service development may look more like television programming, where a TV network might manage production risk by investing in 10 pilots and only committing to making 2 of them into a series. For example, a few weeks back we had reports that eBay's growth had stalled, growing only 8 percent from the year-ago quarter, a steep decline compared with its robust double-digit growth in previous quarters. Consumers have become price sensitive and the auction model has failed to find the same traction as fixed price. I believe eBay will become increasingly irrelevant because it continues to hold onto a transient business model and has failed to identify the logical successor to its auction product.

Once, Google leapfrogged Yahoo! by combining a great technology vision with pop culture - people loved Google's clean interface more than Yahoo's cluttered interface. But history has a habit of repeating itself, and as Microsoft and IBM can tell you, nothing lasts forever.

Google might want to get into VC, if only to place strategic bets on emerging utility computing concepts that have a shot at obsoleting its search utility model.

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