Hits & Misses
(Business 2.0) – [HIT] Why it pays to get in touch with your feminine side. Harley-Davidson is firing on all cylinders. In January the motorcycle maker reported a record $890 million in profits for fiscal 2004, with U.S. retail sales up 7 percent year over year. The secret to the revved-up performance? Marketing hogs to women. The company added a section called "Women and Motorcycling" to its website, featured female riders in its custom-published magazine, and even licensed its name to makers of women's shoes. As a result, the fairer sex now accounts for 10 percent of all Harley purchases, up by about a quarter since 2002.
[MISS] Rejected! Usually as smooth as a LeBron James jumper, Nike is throwing up bricks in the industry's fastest-growing market: China. The first misfire was a TV spot that showed James schooling a series of martial arts masters. Chinese officials called the ad insulting to national dignity and banned it in early December. Later that month a Beijing court fined Nike $36,000 for copying a figure drawn by a 28-year-old Chinese cartoonist for use in its "Creativity in Sports" campaign. But the costliest turnover came in January, when Nike's chief competitor, Adidas, locked up sponsorship rights to the 2008 Olympic Games in Beijing. Says Susquehanna Financial Group analyst John Shanley, "Nike's already a distant second to Adidas in this market, and when you're playing catch-up, mistakes like these don't help."
[HIT] Banner results. It doesn't take much effort for Yahoo to sell search ads--any, uh, yahoo with a credit card can just sign up. But selling display ads takes something more, such as a salesperson with a network of contacts in a given industry. Though perhaps a bit late, Yahoo figured this out over the past two years, appointing nine "category development officers" to woo customers in industries like retail, travel, and automotive. The down-in-the-trenches approach paid off in January, when the company announced its profits had quintupled in the fourth quarter, largely owing to a 39 percent rise in sales of conventional online ads.
[HIT] Not by Dsine. When Cisco bought wireless-networking startup Airespace for $450 million, cheers could be heard throughout Silicon Valley: Airespace's 200 employees could finally cash in their options, and the company's investors saw the value of their stakes rise by as much as 600 percent. But while harder to hear, champagne corks were popping in Israel, too, at the offices of PowerDsine, a maker of chips that allow electrical current to flow across Ethernet cables to power things like VOIP phones and wireless access points. PowerDsine had been wooing Cisco for years with little luck--though it had persuaded smaller companies to use its technology. Among its biggest customers: Airespace. As a result of the new alliance, PowerDsine stands to more than double its sales to Airespace over the next two years.
[MISS] Surly adopters. When TiVo unveiled its TiVoToGo service in January, its execs soon found themselves longing for a real-life instant-replay button. TiVoToGo ostensibly allows users to transfer recorded shows to their laptops, but at launch many subscribers couldn't use the new service, as TiVo had neglected to update their machines. Those who could use it declared it a bust, citing awkward passwords, nannylike antipiracy admonishments, and slow file transfers. On the heels of continued losses, co-founder Mike Ramsay said he would step down as CEO.
[HIT] Gone in a flash. After an ill-conceived price hike that all but handed the flash-memory market to rival AMD, Intel retooled its line of chips for cell phones to make them smaller and less power-hungry while cutting prices by more than 15 percent. The result: Intel regained its market-share lead and saw flash revenue jump 61 percent to $643 million in the fourth quarter. While small beer to a giant like Intel, it meant big problems for AMD: The smaller chipmaker reported a 6.5 percent decline in flash sales and a quarterly loss of $30 million.