Hits & Misses
(Business 2.0) – [HIT] Having it their way. With 20-something men tuning out prime-time TV, how can advertisers reach them? Burger King has a new recipe: late-night TV and the Web. BK's new campaign, by hot Miami ad agency Crispin Porter & Bogusky, revived its "Have It Your Way" slogan with spots showing workers in a dreary office fighting for bragging rights over the most creative burger. Then, to introduce the TenderCrisp chicken sandwich, CPB created a vaguely seedy website where users can make demands of a person dressed as a chicken; the site garnered 168 million hits in just 17 days. So far, the campaign seems to be working: TenderCrisp sales have been rising 9 percent per week.
[MISS] Shut up and sue. SCO Group has won few friends with its anti-Linux litigation jihad. Now it's alienated a key backer too. BayStar Capital, which invested $20 million in the company, sent a letter asking for its money back, saying SCO had violated terms of their agreement. BayStar managing partner Lawrence Goldfarb criticized SCO management for losing focus on its legal strategy and spending too much energy and money traveling to publicize its claims. While the sides might yet settle, the fracas underlines concerns that SCO lacks the wherewithal to sustain a legal battle (see "The Perils of Prosecuting the Penguin," May).
[MISS] Still not clicking? The Internet ad market is back, but industry pioneer DoubleClick seems unable to keep pace. First-quarter earnings came in shy of Wall Street estimates, even as Yahoo and Google are raking in hundreds of millions of dollars from the boom in paid search. Can DoubleClick catch up? CEO Kevin Ryan has said the company will start cashing in on paid search this year with technology that helps advertisers bid for keywords more efficiently.
[HIT] As the world downloads. Sony has found the right audience for testing plans to sell video on the Web: devotees of daytime drama. Since early 2003, more than 350,000 episodes of As the World Turns, Days of Our Lives, and The Young and the Restless have been downloaded from SoapCity.com. Interest is rising, with the number of users growing at a rate of 80 percent a year. True, at $9.99 a month or $1.99 per show, the revenue doesn't add up to much. Noteworthy, though, is the feat Sony pulled off in Internet-wary Hollywood: For the first time, the producers, networks, and advertisers agreed to make commercial-free shows available online the same day they're broadcast.
[MISS] Flipped off. A roaring cell-phone market must be good news for Nokia, right? Wrong. Even as sales grew 25 percent industrywide in the first quarter, Nokia's revenue and market share fell 2 percent. The problem? While its execs were sneering at competitors' "look-alike" silver clamshells, LG and Samsung saw their revenues rise 43 and 52 percent, respectively, on the strength of flip-phones. Now Nokia's doing some flips of its own. Its new clamshell hit the market in March, and it has also revamped its widely scorned N-Gage phone/videogame console. The new design corrects two egregious flaws: The previous iteration required users to talk into the side of the phone and to remove the battery in order to insert a new game cartridge.
[HIT] Bright new wares. EMC is known for its storage hardware--hulking equipment that stores massive amounts of data. But after losing market share to cheap commodity hardware and realizing the need for its proprietary systems to play well with others, it's been betting big on software. And winning. After spending $3.6 billion to buy Documentum, Legato, and VMware, EMC saw year-over-year software sales leap 62 percent and earnings quadruple to $140 million. Even without the acquisitions, EMC's older software lines grew 26 percent.
[HIT] How the profits stack up. PepsiCo CEO Steve Reinemund has pledged to make his company a "wellness leader." But the healthiest thing at Pepsi these days seems to be its junk-food profits. Taking on Procter & Gamble's Pringles, Pepsi rolled out Lay's Stax potato chips, which, like Pringles, come in a container that looks meant to hold tennis balls. When Pepsi reported a 15 percent rise in quarterly earnings and its biggest revenue jump in two years, it pointed to its $2.1 billion snack business--and, in particular, hot demand for its stacking chips.