Microsoft acquires digital marketing firm for $6 billion

In a $6-billion deal that Microsoft believes would strengthen its internet business, the software giant has acquired digital marketing firm Aquantive in its biggest ever acquisition.
Aquantive advises agencies and website publishers on putting adverts online, connecting buyers and sellers. The media company, which has over 2,600 employees, will continue to operate from Seattle as part of Microsoft's online operations.
The all-cash takeover will allow Microsoft to expand into the highly lucrative internet advertising market, also being pursued by its archrival Google and Yahoo. The $66.50 per share offer is 85 per cent higher than Aquantive's closing price of $35.87 on Thursday.
Microsoft has justified paying the price, which represents 2 per cent of its market value, by arguing the complementary technology of Aquantive was worth the price and the deal would help it broaden the scope of services its MSN consumer internet unit can offer. Kevin Johnson, head of Microsoft's platforms and services division, said, "This deal takes our advertising business to a new level." Johnson also said that Microsoft was committed to earning a bigger slice of growing online advertising business, currently estimated at around $55 billion.
Analysts, however, suspect the price paid by the software giant reflects its anxiety to make a significant acquisition in the shrinking independent online advertising segment in which its rivals are seen to be strengthening their stake.
For instance, last month search engine giant Google agreed to buy DoubleClick for $3.1 billion, while Yahoo grabbed the 80 per cent of the equity of Right Media Exchange that it did not previously own for $680 million.
The deal is expected to be completed in the first half of 2008, subject to regulation.

Google dethrones Microsoft as top global brand

Silicon Valley: Silicon Valley-based search engine firm Google, Inc, with a brand value of $66.4 billion, has overtaken Microsoft as the most powerful global brand, says the UK market research firm, Millward Brown Optimor in its latest annual ranking survey.
Microsoft, with a brand value of $54.9 billion is ranked third behind General Electric, which had a brand value of $61.8 billion.
Coca-Cola, for years the most powerful global brand, ranked fourth with an estimated valued of $44.1 billion.
The study, Brandz Top 100, by Millward Brown said that the search engine's brand value had increased by 77 per cent since in the last one year.
Joanna Seddon, chief executive, Millward Brown, said that success stories from this year's Brandz Top 100 demonstrated that winning brands leverage major market trends effectively to create business value.
"Strong brands are capable of extending into areas of opportunity to access new revenue streams and to help businesses respond to market changes," Brown said.
The ranking attempts to put a dollar value on a brand based on current and expected future earnings. The figure is generated from hard economic data as well as softer variables such as intangible consumer loyalty and perceived growth potential.

Global study reveals customer service remains critical to profitability

Mumbai: Is customer service getting better or worse? Despite the conventional wisdom of customer "no-service" as the norm, over 61 per cent of consumers see call centers as doing a better job than three years ago.
An international survey of more than 4,300 consumers found that, despite some continued pockets of frustration, 23 per cent of all consumers found their experience "significantly better," and an additional 38 per cent felt it was "somewhat better" while only 12 per cent thought it was worse.
In addition, the survey revealed that customer service is a critical driver of profitability and satisfaction, with more than 75 per cent of consumers saying they would give more business to a company based on a great contact center experience.
And, 50 per cent of consumers say the last time they stopped doing business with a company was partly or wholly due to a poor customer service experience.The survey, which measures consumers likes, dislikes and frustrations with contact centers and automated customer service systems, was commissioned by Genesys Telecommunications Laboratories, Inc., an Alcatel-Lucent company. Its findings indicate that, while investments in technology and self-service are starting to pay off, consumers increasingly want better multi-channel service, through SMS, e-mail and other new media.
The biggest causes of customer frustration:
In 2003, Genesys created the pioneer study in customer frustration and has followed in each of the past four years. Globally, the major sources of customer frustration are consistent with findings over the past four years:

• Long hold times - 67 per cent of consumers are frustrated by long hold times, and 88 per cent would prefer to receive a call-back in 10 minutes than to be on hold for that long.
• Poor automation - 57 per cent of consumers are frustrated by IVRs with too many or incorrect options and 76 per cent of consumers feel that companies are pushing them to use self-service systems instead of talking to live people.
• Customer Repetition - 52 per cent of consumers are frustrated by having to repeat information they've already provided.

"Given the direct impact of contact center performance on customer loyalty, successful companies must take every opportunity to connect with their customers to create a positive experience," said Wes Hayden, president and CEO of Genesys.
Hayden explains, "Customer service is improving, but the expectations of consumers are going up as well. As the world market becomes more competitive, the most successful companies are ones that make the best use of every channel and every interaction. Companies should engage their customers with a well-planned and executed contact center strategy."
Survey respondents indicated that a good way to create a positive experience is to address consumers' basic frustrations. For example, the survey results indicated that companies can eliminate long hold times by including a call-back option in their IVR systems. Rather than waiting on hold, 74 per cent of customers would like to have the option to ask for a call back when they feel the wait would be too long.
Emerging Trends - proactive contactThe hottest new emerging trends in customer service are the desire for proactive contact and the need for better support for a broader set of communication channels, such as SMS, web chat and e-mail.
When it comes to new channels, 86 per cent of consumers want e-mail communication and more than 45 per cent of consumers would like e-mail to become their primary communication vehicle.
Speed of communication is critical, however, with 21 per cent expecting a one hour response time - up from 6 per cent with that expectation in 2003. An additional 17 per cent of consumers expect an e-mail response within 4 hours, and 47 per cent within 24 hours. In addition, 19 per cent would like web chat (instant messaging) and 17 per cent want SMS text messages.
Surprisingly, over 89 per cent of consumers would like to receive proactive communications from companies, by phone or text, to keep them informed about service delivery and/or other products and services that may be of interest to them. Proactive communications offer a way of creating a positive image with customers. According to the survey, 87 per cent of customers would have a more positive opinion of a supplier after receiving a courtesy call to thank them for their business or to ask about their satisfaction; however, only 43 per cent have received such a call. Substantial regional differences:While consumers agreed on most core customer service issues, substantial, regional differences are emerging that offer some of the most striking findings from the survey. Europeans are 10 times more likely to want SMS text messages sent to their mobile phones than Americans (21 per cent for Europe versus 2 per cent for the US).
Similarly, 19 per cent of consumers from Asia Pacific and 7 per cent from Japan also want SMS messages sent to them. Meanwhile, more than 28 per cent of U.S. consumers want instant web chat capabilities, compared to 19 per cent in Europe, 18 per cent in APAC and 11 per cent in Japan.

Coke eyes market for fruit juices, energy drinks

Mumbai: Coca-Cola India plans to enter new beverage segments such as fruit juices in addition to sports and energy drinks in tune with its global strategy to promote healthy beverages.
Coke in India already has a presence in carbonated drinks, tea, coffee, mineral water and fruit-based drinks. The company's mango-flavoured drink, `Maza', is already well established in the market, while it launched its 100 per cent fruit-based drink,`Minute Maid' - an orange-flavoured drink - in February.
The soft drink major said it would put in place a supply-chain system before entering the 100 per cent juice segment.
The 100 per cent packaged juice segment in India, estimated to be worth around Rs500 crore, is currently dominated by brands such as Dabur Foods' Real, Activ and Coolers, PepsiCo's Tropicana and Ladakh Foods' Leh Berry.
Coca-Cola officials said the company was assessing the market potential of its energy drink, Burn, and sports drink, Powerade, in India. Burn and Powerade are already available in international markets such as the US.
Coke is also trying out the pulp-based drink which is not 100 per cent juice, Coca-Cola India's regional operations vice president Milind Sathe said.
Coca-Cola had earlier tried to enter the energy drinks segment with, Shock, brand.
At present, Red Bull and Gatorade are some of the energy and sports drinks available in India.