Time for a Break

I am having a break from posting to allow me time to recharge. I expect to be back on-line end February or early March.

Google's growing market share

In October I carried a post discussing the dangers posed by Google's growing market dominance. Recently there was an interesting article in the Australian Financial Review - I cannot give a link - providing more data.

According to the US firm Hitwise, Google's share of the US search market rose from 58.3% in March 2006 to 61.8% in November 2006 to 65.1% in November 2007. Each one per cent shift in market share appears to be worth about $US100 million ($A113.8 million) in extra advertising revenue.

According to Scott Kessler from Standard & Poor's, Google's growth will slow in 2008 because of a maturing search market together with improved service from competitors. Mr Kessler also feels that there is a risk that Google might get distracted by its non-search projects.

I have always been fascinated by the way Google's business model fits together. Yes, Google search is the jewel in the crown, but there is more than that.

Bogspot is a good example.

By providing a free blogging platform, Google has attracted millions of bloggers. I tried to find an actual number, but without success. These provide a platform for Google products such as adsense, search and referral. In parallel, Google blog search provides an increasingly used tool for searching the blogosphere, one that has I think now over-taken Technorati in popularity.

Many of the blogs have very limited traffic, so the actual revenue to Google per blog from its products is low. However, the sheer number of blogs makes for high aggregate numbers. Further, Google does not pay its publishers until their earnings reach $US100. This provides a handy source of working capital.

Google is constantly fine-tuning its services to try to increase revenue from its existing base. This is not always successful - the company is withdrawing support for its referral product in Australia, presumably because of lack of profitability.

Low cost management of large numbers is critical to Google's success. I have not tried to analyse Google's accounts, but successful product management in the blogging environment requires a large base to spread fixed costs with very tight control of variable costs. So the whole system depends upon effective automation.

Introductory Blogging Tips

Photo: Will Owen Munupi Arts

Will Owen's Aboriginal Art & Culture: an American eye is one of the most interesting blogs I know dealing with the art of Australia's indigenous people.

Will wrote a post on Arts Centres and the Business of Blogging discussing in part the new use of blogs by Aboriginal arts communities as a promotional device. In it, he asked a couple of us whether we had any tips.

I decided to respond on this rather than my personal blog because over the last year or so I have been trying to get the message across about the important role that blogging can play in supporting business and community objectives.

I have kept the tips that follow as simple as possible, writing from the perspective of those with limited money and technical skills new to the blogging game.

Introduction

The blogosphere is a crowded place.

I am not sure how many blogs are out there now, although I know that the number passed 75 million some time ago. All these blogs compete for attention.

Do not despair, however. All blogs can achieve their place by following a few simple rules.

Rule One: Keep it all as Simple as Possible

I have put this as rule one because I know how hard it is to maintain a blog in the face of other pressures. The simpler you keep things, the easier it is to keep going.

Rule Two: Be Clear on your Objective

Rule two is to be clear on the purpose of your blog. Why are you doing it? What do you hope to achieve?

Write this down, because it determines your entire approach.

Rule Three: Be Clear on your Target Audience

Rule three follows from rule two. Who do you want to reach and why? Again, write it down.

Rule Four: What does your Target Audience need to know, What will attract them?

Now that you know target audience, what will attract them, what do they need to know? Write it down.

This rule guides what you write, what visual material you include.

An example to illustrate all this.

Assume that your objective is to promote local talent, to support art sales and to promote the community and encourage visitors to the community. So a mix of community and business objectives.

At broadest level, you want to reach all those who might buy your art works or come to visit. This is just too big. We need to break it up a bit.

One group might be those who have already bought a piece of art or who have visited. This group might include gallery owners, agents, tour promoters.

You know that they are already interested, may buy again, may come back, will promote your story to others. This group is likely to be interested in what is going on, new developments. Use your blog to keep in touch with them.

Then you have those who might be interested. I will talk about ways of reaching them, of attracting traffic to blogs in a moment. For the moment, just two key principles.

First, you have to write in a way that they will understand. Explain things. If you use local terms and refer to local things without any explanation, people will not understand what you are saying.

Secondly, give people the information they need. How can they buy? How can they come to visit?

Rule Five: Short but Regular Posts

With time, your blog will build four broad groups of readers:

1. those who visit on a regular basis because they are very interested
2. those who drop in every so often to check what is new
3. those who use your blog as a reference point for information when they need it. A tour operator might be an example.
4. those who come to the site via search engines or referrals, including referrals from other blogs. You hope that some of these will visit again.

Short but regular posts is the best way of building all four groups.

Why short? This links to purpose.

I often write very long posts on some of my blogs because I am exploring ideas, putting down material for later reference. But I do so knowing that this will reduce my readership.

Reading material on screen is harder than reading a printed page. People have limited time - they scan and move on. So if you keep your posts short people are more likely to read and, having read, come back. And that is what you want.

Why regular? We are all creatures of habit. We like to know what we are getting, when to come back. You cannot achieve this without regular posting. A good blog becomes a friend that we visit when we know that there is likely to be something new, to find out what is happening.

Okay, regular is fine, but how often should you post?

There is a fair bit of debate about this in the blogging community. Again, it depends upon purpose as well as your time.

I try to post daily on my personal blog because that blog is in part an on-going dialogue between me and certain of my regular readers. They expect daily posts.

However, there is no point in aiming for daily posts if you cannot maintain this on a regular basis, nor is it necessary or even desirable for a business related blog.

As a general rule of thumb, once a week is about the minimum if you want to build a consistent return readership over time.

Rule Six: Allow Time

Things don't happen overnight. It takes time to build a blog. It also takes time to learn about blogging. So if you are going to build a blog, you have to be prepared to keep going even when initial results seem slow.

This post is long enough. In a later post, I will provide some more advanced tips. In the meantime, if you follow these few simple rules you will get initial results.

Welcome to 2008

Welcome to 2008. I am looking forward to this year. Just so much is happening.

The above graphic shows traffic to this blog by country of origin. Australia still stands out first on 31%, closely followed by the US on 27%. Then come a range of countries.

This blog necessarily has an Australian focus simply because there are so many Ndarala Australian members. However, I do welcome the broad country spread because the world is a global place.

Sounds a bit silly I know put in that way. But we do need to understand the broader world if we are to operate and expand in a globalising society.

Season's Greetings to All

Christmas Eve

I am now signing off until after the Christmas break.

This has been a troubled year in many parts of the world. May you and yours have a very happy festive season and a peaceful and prosperous new year.

The Balance of Payments, Australia and the sub-prime crisis

One of the things that has been puzzling me about the US sub-prime crisis is just why it should have such effects on Australia. Our direct US exposure is minimal, while there is no evidence at this point that the local low-docs loan equivalents suffer from the same problems, yet the effects continue to reverberate.

I could understand it when local home lender RAMS struck trouble because this otherwise solvent firm depended directly on shorter term US borrowings. But why was the US crisis creating domestic liquidity problems, forcing Australia's Reserve Bank to pump funds into the economy?

Thanks to an article by Brian Toohey in the Australian Financial Review (17 December) quoting HSBC Chief Economist John Edwards, I now understand. The answer proved simple but, I think, very serious.

Australia has long had a substantial deficit on the balance of payments current account, a deficit funded by capital flows, mainly through international borrowings by Australian financial institutions. The sub-prime crisis has largely stopped those borrowings.

This created a ricochet effect.

Borrowers such as RAMS dependent on offshore borrowings tried to borrow locally, increasing local demands for funds. More broadly, reduced capital inflows meant that cash stopped coming in to fund the current account deficit, draining cash from the Australian economy. Then, too, there was a reduction in lending between local financial institutions, further reducing the supply of loanable funds.

In normal circumstances, this would have been accommodated in part by a rise in interest rates rationing credit, in part by a fall in the value of the Australian dollar thus choking of imports. However, because of the scale of impacts, the Reserve Bank chose to push liquidity into the Australian economy. This meant, among other things, that we were funding the deficit on the current by reducing the RBA's holdings of foreign currencies. As a consequence, the RBA's official reserve assets fell from $A79.7 billion at the end of June to $A32.7 billion at the end of November.

This is unsustainable in the longer term. If it continues, the RBA will have to borrow internationally to fund the current account deficit, let the currency fall to a new equilibrium level, or some combination of the two. Whichever way it goes, Australia is in a degree of trouble.

When Trust Fails 1 - Introduction

Corruption problems with the NSW Government owned RailCorp have been highlighted during a four week public hearing by the NSW Independent Commission Against Corruption.

Corruption examples included a contracts relationship manager who manipulated the electronic procurement system to steal more than $A500,000; a second contracts scam is alleged to have cost the organisation more than $A4 million; while a third involved secret payments for work of more than $A1 million.

The current inquiry is one a series since 1992 that together suggest major systemic problems within the State owned corporation.

According to the barrister assisting the Commission, Chris Ronalds SC quoted in the Sydney Morning Herald, the core problem lies in the organisation's culture:

The prevailing culture is one of indifference or possibly intimidation, with minimal attempt to investigate.

Where serious breaches of conduct have been exposed....the disciplinary tone has been a slap on the wrist. This approach breeds an entrenched culture of condonation of unethical behaviour, with various scams being able to be run by different people in silos, and a failure of internal system robustness, the culture of cover up is entrenched.

I do not pretend to be expert on RailCorp. However, I do find the case interesting as an example of what appears to be systemic failure. I also find it interesting because I had formed the view that that the approach to the control of corruption in NSW is fundamentally flawed and indeed creates its own problems.

Given this, I thought that it might be interesting to explore some of these issues in a series of irregular posts.

A pause because of travel

Because of travel I am going to be away from my desk for a period. I will continue my demographic series upon my return.

Global Demographic Trends - Asia

Continuing our series on global demographic trends, in 2007 the top ten Asian countries by population excluding South Asia were:

1. China - 1.32 billion
2. Indonesia - 235 million
3. Japan - 127 million
4. Philippines - 91 million
5. Vietnam - 85 million
6. Thailand - 65 million
7. South Korea - 49 million
8. Burma - 47 million
9. Malaysia - 25 million
10. North Korea - 23 million

Jumping forward, the 2050 projections are:

1. China - 1.42 billion
2. Indonesia - 313 million
3. Philippines - 148 million
4. Vietnam - 108 million
5. Japan - 94 million
6. Thailand - 69 million
7. Burma - 54 million
8. South Korea - 45 million
9. Malaysia - 43 million
10. North Korea - 26 million

In the Asian case, we can clearly see the way in which population trends are diverging.

Japan and South Korea face population declines, while the populations of China and Thailand have begun to plateau. The size of the projected Malaysian increase came as a surprise. We would have expected it to be lower, given the country's level of economic development.

Indonesia, the Philippines and Vietnam all reflect current levels of economic development.

In the next post we will look at the Americas.

Note on Sources

Source data can be found at the introductory post.

Posts in Series

Introductory post. Last post. Next post.

Global Demographic Trends - the rise of Africa

In 2007, the top ten African countries were:

1. Nigeria - 127 million
2. Egypt - 80 million
3. Ethiopia - 77 million
4. Congo (Kinshasa) - 66 million
5. South Africa - 44 million
6. Tanzania - 39 million
7. Sudan - 39 million
8. Kenya - 39 million
9. Morocco - 34 million
10. Algeria - 33 million.

In 2007, the top ten African countries are projected to be:

1. Nigeria - 357 million
2. Congo (Kinshasa) - 203 million
3. Ethiopia - 145 million
4. Uganda - 128 million
5. Egypt - 128 million
6. Sudan - 88 million
7. Tanzania - 67 million
8. Kenya - 65 million
9. Madagascar - 56 million
10. Morocco - 51 million

These are very large increases indeed. They could well be larger if African life expectancies increase significantly.

Note that South Africa has vanished from the list, with a projected decline in population from 44 to just 33 million.

The size of the African increases has significant implications for economic development and political stability. How will these extra people be employed, fed and housed? What are the implications for Africa of projected climate change, given the projected population increases?

Note on Sources

Source data can be found at the introductory post.

Posts in Series

Introductory post. Last post. Next post.