Hits & Misses

7-Eleven jolts its coffee sales with an energy-drink-inspired blend, a Second Life rival finds a way to be more than a second fiddle, Budweiser flops in its attempt to create a YouTube for beer drinkers, and more.

By David Jacobson, Business 2.0 Magazine

(Business 2.0 Magazine) -- [HIT] There's a There there. Like Second Life, virtual world There.com launched back in 2003. Unfortunately for its owner, Makena Technologies, that's where the similarities end: Second Life now has 5.8 million users; There.com, only the point-8. Now, however, Makena has its first hit -- not with a site of its own, but as the platform for a trio of worlds developed for MTV. Last September, Makena and MTV unveiled Virtual Laguna Beach, where the show's fans can socialize, zip around on hoverboards, and engage with sponsors' products (11,500 cans of digital Pepsi quaffed to date). Recently expanded to include Virtual Hills and Virtual Pimp My Ride, MTV's online worlds have already drawn 600,000 users and are projected to reach 3 million by year's end.

[HIT] A new jolt for joe. It's no secret that the energy-drink market has been buzzing. Sales rose nearly 50 percent last year -- which was enough to make 7-Eleven wake up and smell the opportunity for its traditional bottom-line pick-me-up, coffee. In February the convenience-store chain -- which relies on hot beverages for 12 percent of its profit -- rolled out Fusion Energy coffee, a blend of imported arabica beans and the herbal ingredients found in energy drinks (ginseng, guarana, and yerba mat). Thanks largely to the new offering, 7-Eleven's coffee sales jumped nearly 9 percent for the first half of April.

[MISS] The king of flops. What do you get when you cross Mad TV with ESPN and YouTube? If you're a beer company trying to hook the young-male demographic, the answer is not as much as you'd hoped. Though execs at Anheuser-Busch (Charts, Fortune 500) expected that its Bud.TV online network would draw 2 million monthly unique viewers within its first year, only 152,000 stopped by in March, according to ComScore, a 40 percent drop from February. Among the problems: As a beer marketer, AB makes users jump through age-verification hoops, which severely limits the odds that its videos will go viral. Then again, perhaps the site simply needs some content infused with irony, like this gem: AB has received a letter signed by the attorneys general of 21 states, charging that the brewer isn't doing enough to keep kids out.

[HIT] Penny arcade. By late 2005, WildTangent had its virtual videogame console preloaded on 85 percent of PCs sold in the United States. But while millions of gamers took advantage of an introductory hour of free play, when they were asked to fork out $20 to buy a game, fewer than 3 percent did. So last summer WildTangent began offering a micro-payment option, letting players buy "WildCoins" good for up to 24 hours of gaming for as little as 25 cents. Then, in November, the company took the idea to the next level, offering sessions in which sponsors pick up the tab for players willing to view ads as their games load. So far, the move looks like a win-win: WildTangent says advertisers like Procter & Gamble and Warner Bros. are seeing average click-through rates of 12 per cent, while its own unique-visitors tally soared more than sevenfold to 6.3 million in March.

[HIT] Slimy little fellow. In the last three years, Mucinex has soared like loosened phlegm to the No. 2 spot in the cold-medicine market. The success is largely due to memorably gross advertising that personifies congestion as "Mr. Mucus," but another factor is the cagey use of an FDA policy that allows companies to take compounds that have been on the market for decades -- since before the agency had regulatory authority -- and get them approved as "new" drugs. The FDA must then pull the older, unapproved products. Mucinex gained its foothold in the market from the removal of 60 such competitors. Now, having added a decongestant and cough suppressant to its original formula, it stands to score again: RBC Capital Markets says the removal of similar drugs could add $81 million to the annual revenue of parent company Adams Respiratory Therapeutics.  Top of page

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