Internet Marketing Weekly News Update #080 January 5, 2011

China's warning is seen as a shot across Skype's bow.
China's Ministry of Industry and Information Technology has given notice that it intends to fight what it deems are illegal Internet phone services. This is considered an attempt to head off Skype's growth in the country, partly to protect China's state-owned telecommunications companies, and partly to hinder communication among dissidents.
The New York Times

Groupon pursues new financing alternatives.
Having turned down a reported $6 billion takeover offer from Google, Groupon is said to be in negotiations for a round of private equity financing which could amount to as much as $950 million. Fidelity, T. Rowe Price, and Morgan Stanley are thought to be the investment firms in discussions with Groupon. This stage of financing could be a stepping stone to an eventual initial public offering.
The New York Times

YouTube is fast becoming the new frontier of product placement.
With advertisers already spending $26.5 billion annually on product placement in traditional media, the technique is starting to spill over into YouTube. TubeMogul estimates that at least 10 popular YouTube performers are able to make $100,000 or more by including specific products in their videos.

Firefox makes user privacy a priority.
Firefox developer Mozilla has announced that the next version of the Internet browser will include a do-not-track tool, following a similar announcement from Microsoft with regard to plans for Internet Explorer 9. Mozilla also hopes to eventually gain the upper hand in privacy protection by creating a more comprehensive solution that goes beyond do-not-track capability.

Users flock to Twitter, but activity levels vary greatly.
The momentum of the Twitter phenomenon is evident in new figures from Sysomons which show that 95 percent of active Twitter accounts were created since January of 2009. However, not everybody goes much beyond creating an account, since 90 percent of all posts on Twitter are generated by just 22.5 percent of the accounts.
Marketing Pilgrim

New funding for Facebook is just a fraction of its valuation.
Goldman Sachs has announced a $450 million investment in Facebook as the precursor to an effort to raise a total of $2 billion in capital for the firm. Significant though that is, with $2 billion representing just 4 percent of Facebook's estimated $50 billion valuation, the move should not have a material effect on the control of Facebook.
Marketing Pilgrim

Similar portions of the online audience purchase content and goods.
A new study by the Pew Internet & American Life Project found that 65 percent of the online audience had purchased digital content via the Internet, a similar portion to the 66 percent that had earlier reported having purchased physical goods via the Internet. These digital content purchases are spread widely over a range of different content types, including music, software, apps, games, news, movies, and ringtones.

Online advertising bounced back strongly in 2010, and looks to continue double-digit growth.
Online advertising is recovering more quickly than the economy as a whole, in part because it is capturing a greater share of advertising budgets. The Interactive Advertising Bureau and PricewaterhouseCoopers reported that online ad spending bounced back from 2009's decline with 13.9 percent growth in 2010 to reach a record $25.8 billion. Continued strong growth is expected to take online ad spending past the $30 billion mark in 2012, and past the $40 billion mark in 2014.

Sign of the times: Facebook dominates 2010 online activity measures.
According to Hitwise, Facebook supplanted Google as the most visited website last year, leapfrogging both Google and Yahoo to rise from number three to number one. Facebook was also the most commonly used search term. As a sign of the declining fortunes of MySpace, it fell out of the top ten most visited sites in 2010 after ranking fifth in 2009, and as a search term it fell from second to fifth.
Search Engine Land

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