ADOTAS

• In other news of things that make sense, Facebook‘s blog today mentions a Journal of Consumer Research study that says people identify more personally with brands whose ads pop up on their own Facebook pages than they do with brands whose ads appear on strangers’ pages. To take it a step farther, the higher a person’s self esteem, the more they’ll identify with those brands advertised on their own pages. The concept this hinges on is implicit self-referencing, and the premise goes like this: If you have healthy self esteem, you’ll feel positive emotions when you look at your own Facebook profile. That lends itself to a positive association with the brands whose ads show on up your profile, especially if those brands have some connection to your self-identity.

• Google’s being sued for patent infringement, and the way buySAFE, the company bringing the suit, puts it, it sounds strikingly personal. Here’s the gist: buySAFE offers a secure online shopping service, which the company says is unique and protected by patent law. Since 2006, the lawsuit says, Google had tried to partner with buySAFE. buySAFE eventually shelved those talks, but, says the suit, those discussions plus Google’s 2010 recruitment of the then-COO of a buySAFE client company granted Google enough proprietary information to launch its own copycat service. You know it as Google Trusted Stores. Or maybe you don’t — Google Trusted Stores just launched in October. And yet, the lawsuit goes on to accuse Google of timing its launch of Trusted Stores to “impede buySAFE’s effort to raise additional capital,” as well as giving retailers that participate in Trusted Stores a higher search ranking and telling retailers they could use either Trusted Stores or buySAFE, but not both. Here’s a copy of the lawsuit. If buySAFE is right about this, Google pulled a few pretty brazen maneuvers. And if buySAFE isn’t right, it at least put in a good hustle: They’re laying the smack down on Google Trusted Sites before the latter is even remotely a household name.

• On Dec. 10, Amazon gave shoppers discounts if they used the Amazon price-comparison app in a brick-and-mortar store. This week, Groupon took the inverse tack — they’re offering $10 in Groupon Bucks to Groupon users who buy any of the site’s daily deals in a physical store. The Wall Street Journal quotes Groupon senior vice president of global marketing Rich Williams as saying, “We think it’s unfortunate that there’s this meme that people believe they have to make a difficult choice between supporting local businesses and great price.” … Zing?

• Speaking of “zings,” we came across a couple across the web today, in which commentators took advertisers to task for creating online ads that, they say, relay the wrong message or the wrong part of the message about a company. At MediaPost, Larry Dobrow gives it to GE for a recent promotional video in which, he says, a feel-good take on the culture of the company comes through more clearly than most information about what the company makes. (For example, Dobrow refers to a bit in which an “enormous Jenbacher gas engine generates no excitement, focusing on environmentally sensitive tomato wrangling rather than on rockets and turbowheelies and all the cool stuff it can surely fuel.”) Meanwhile, at ZDNet, “SEO Whistleblower” Stephen Chapman lays down a warning about online reputation management, relating it to an ad he’d seen frequently on Facebook that featured a confounding bit of text next to a preposterous image. He uses, admittedly, an extreme, hyperbolic case, but the underlying issue seems to be about how placement is still nothing without useful content. But what do you think about the cases Dobrow and Chapman call out?

• Google Chrome has become the most widely used version of a browser, according to StatCounter. It was a close shave; Chrome 15 came in at 24 percent, with Explorer 8 at 22.9 percent. Firefox 8 weighed in at 14 percent. Taken with all versions lumped together, Explorer still comes out on top, though, at 39.5 percent to Chrome’s 26.5 percent.

• Pretarget has come out with a new infographic. It’s called “Trading Desks Are the Stock Market of Digital Advertising.” Check it out:

• Data protection provider Nasuni has been testing the internet’s 16 largest cloud storage providers since April 2009, and Amazon’s S3 Simple Storage Service beat out everyone else in the field when it came to performance (speed), stability and availability, and scalability (capacity). Only six of the 16 “passed” the test (Amazon, Microsoft, Nirvanix, Rackspace, AT&T Synaptic and Peer 1 Hosting). Microsoft Azure made a strong showing alongside Amazon (in fact, the study found Microsoft to be slightly faster than Amazon), but the victor had, according to Nasuni’s report, ”the fewest outages and best uptime, and was the only CSP to post a 0.0 percent error rate in both writing and reading objects during scalability testing.” Click here for the full report.

• On Friday, we reported the U.S. Justice Department was delaying its antitrust case against AT&T, further frustrating the company’s efforts to acquire T-Mobile, and today the two telecom companies have joined the Justice Department in requesting a federal judge make such a delay. This is perhaps unexpected, because AT&T had argued for a quick resolution up until Friday. The two telecoms are expected to file a report by Jan. 12 explaining their plans for any proposed acquisition, and they’ve asked for a conference to gauge any further legal proceedings on Jan. 18.

• Just as we’ve published Peter Koeppel’s analysis of how Netflix damaged its goodwill among subscribers (and lost valuable market share) in 2011, there are rumors from anonymous sources that Verizon might have expressed interest in acquiring the troubled video service. Verizon reportedly wants to launch a streaming video service and would rather pick up one that already exists than develop its own. The rumors, at the very least, boosted Netflix stock value.

• As part of a collection of predictions for 2012, AdExchanger quotes American Association of Advertising Agencies (4As) president Nancy Hill as speculating, “I think we will finally see agencies reaping the benefits of behaving more like Silicon Valley than Madison Avenue… We are seeing true partnerships form that gives everyone the ability to look at a problem from many points of view. Most of the start-up agencies over the last two years are built on this tenet and are flourishing nicely.”

Google’s not looking explicitly to become a retailer, or to build stores or warehouses, according to those sources. The new service would lean on Google’s product search feature, and a partnering company or companies would handle shipping. The idea is that the service would provide incentive for customers to use Google’s product search. Amazon right now is the reigning go-to spot for online shopping — according to ComScore statistics, Amazon’s website has handled three to four times as many product-related searches as Google’s product search has over the past year. Amazon has reported a 42 percent increase in sales for the first nine months of 2011, compared to 2010, and Amazon Prime certainly had something to do with that. Google obviously has a lot to gain by honing in on the action, or at least it would be well served to strike back and protect its position as the web’s top seller of online advertising. Google’s made some inroads towards a burlier product search function lately, launching Google Trusted Stores in October for retailers that meet certain customer service standards (and share shipping and customer service data with Google) and offering customer ratings and reviews (a la Amazon). Today’s reports indicate more clearly where Google is going with this.

ADOTAS – While we were writing some blogs at SocialNuggets, we thought of adding thumbnails of various tablets. Then started our search on Google and Yahoo! for images of various tablets. What we found was an utter lack of branding in the tablet marketplace — except in the case of Apple.

Here is a chart we produced with thumbnails of various tablets. Can you really recognize any of the tablets? Well, I can only recognize Apple’s iPad and none else. When I asked people who own non-iPad tablets to tell me which thumbnails pointed to their Android based tablets, most of them failed in this exercise.

How About Smartphones?

Just having an Android label to kick start the market was a great idea and it worked for smartphones. However, if you ever see an HTC phone, it does have a clock image that can be differentiated even in the smallest of the thumbnails. BlackBerry has a very unique image that distinguishes it. Samsung doesn’t have a consistent image but with the launch of Galaxy II, it is getting better at it.

So What Happened to Tablets?

Needless to say Apple is the only manufacturer whose iPad tablets have a very differentiating look no matter which angle you look at. For some reason every other tablet (sorry HTC, clock is not enough to differentiate your tablet) manufacturer went with generic Android look except for some minor differences. Even RIM chose the generic look for its Playbook, leaving it no differentiation in appearance.

Oh yes, HP folks probably recognize their blue screen which became the blue screen of death for the device. It seems Amazon has learned that lesson already and has a distinguishing image for itself. This may not be sufficient but will contribute to its success.

Rethinking Product Looks in the Age of Internet

In the age of the Internet, products are typically evaluated online first. If your product doesn’t have a unique look, it will be lost in the crowd and all of your branding exercises will merely go to waste. So before you put out a product in the market, see what its thumbnail looks like on the web when your customers search for it.

ADOTAS

Interestingly, Amazon’s recent Kindle Fire announcement is likely to reshape the market. While the previous Kindle was a pure eReader, the Kindle Fire is a real game changer. Its price point and added functionality should prove extremely appealing and not only does Amazon have access to masses of content, but it also operates a well-oiled sales and marketing machine (not to mention their 120,000,000 paying users) that will no doubt position it as a very significant player in the space overnight. Developers are certainly taking notice of the broader tablet market, and starting to look beyond the iPad.

In a Fragmented Market…

When evaluating the current issues that tablet developers face, there are clear trends and all too familiar hurdles that first popped up in the pure smartphone market. When the iPhone launched, there was really only one form factor and one place to sell an application, but that quickly changed as the market developed and the competition launched their own offerings.

In the tablet market, with the Kindle Fire release, developers would soon be forced to tackle the different operating systems and understand multiple form factors and varying hardware capabilities as fragmentation increases significantly. Windows 8 tablets, due to enter the fray late next year, could potentially further fragment the market.

One way to approach app development is to create an app per device. As a result, it takes a lot of time to initially develop, and then considerable effort must be spent to keep the content fresh – this is particularly important.

A developer cannot simply launch an app and forget about it, as it is likely to fall behind the competition. If the app has been developed across multiple platforms, all updates should be rolled out simultaneously on all platforms to ensure that users on any device share the same experience.

Another important hurdle that should be noted is the increasingly “connected” nature of mobile content. Many apps link multiple users, who expect to interact with others regardless of which device they use. The user experience needs to be a fluid and seamless. Tablets are putting an added strain on this requirement and increasing the complexities significantly.

Also, if a developer only focuses on one or two devices, they run the risk of marginalizing appeal as they are ruling out people that want to connect with users on other platforms. Apple’s FaceTime hasn’t been as successful as hoped, as the limitation of only being able to talk to other iOS users has hindered its adoption in comparison to competing solutions that support cross-platform interaction.

Unfortunately, most developers cannot create and manage apps for more than one or two platforms, they simply don’t have the manpower. Consequently, they lose masses of opportunities and monetization becomes a bigger challenge, as they are ultimately missing revenue opportunities as well.

The obvious solution is to go cross-platform.

One Platform to Service Them All

For the past 20 years, developers have been spoilt as Windows did a fairly good job at handling the different technology specification of the OEMs and one code tended to work across all desktops as Microsoft took care of hiding the discrepancies. To many, today’s issues are a new problem.

The significant interest surrounding HTML5 is testament to the fact that people are aware of the problem and are trying to address it. Obviously, the technology is still in its infancy, the standards aren’t yet complete and it suffers from other inherent limitations.

Ideally, developers should be able to focus on creating the best apps and games possible, and cross-platform development and distribution platforms — such as my company Marmalade — exist to help them save time, money and go far and wide with their offerings. Through these services developers only need to create (and update) one main app, removing the need to develop in multiple languages and platforms, and resolving the concurrency issue that many developers face – how can we target all major platforms with limited resources?

A word of caution for developers when choosing a cross-platform provider: note that some can prove restrictive and frustrating, not to mention levy significant performance penalties on the app. Look for openness, flexibility and the ability to maximum utilization of the devices’ capabilities, allowing developers to focus on what they do best – creating compelling content.

The real question that today’s developers should be asking themselves is, can they afford not to go cross-platform?

Leading the opposition is eBay, which has quite a stake in the legislation as it serves as a transaction platform for thousands of small businesses and affiliates. Brian Bieron, senior director of federal government relations and global public policy, had some none-too-kind words about the bill, calling it “outdated.”

eBay has a coalition of industry groups backing it up, and sent us statements from a whole lotta people that disapprove of the bill.

American Homeowners Grassroots Alliance (AHGA) President Bruce Hahn:

“The Main Street Fairness Act takes us in the wrong direction. The AHGA believes that Congress should ban the collection of state and local Internet sales taxes rather than expand the collection of sales taxes on Internet purchases.”

Computer and Communications Industry Association (CCIA) President & CEO Ed Black:

“Penalizing businesses for utilizing technology and innovation is not fairness, but merely a shortsighted targeting of new revenue models, while protecting existing business models at the expense of consumers and growth.”

The Electronic Retailing Association (ERA) President and CEO Julie Coons:

“New and misguided remote tax schemes will represent a dramatic blow to electronic retailers struggling to survive in these harsh economic times. New regulatory burdens and draconian cost increases would significantly damage both the marketplace and the consumers who rely on it.”

The Information Technology Industry Council (ITI) released the following statement:

“Forcing online retailers to take on the same costs and tax burdens as national retailers is unrealistic and will unbalance the playing field between the ‘brick and mortar’ businesses and the smaller online retailers on the Internet. Congress has an opportunity to pursue a pro-growth, pro-jobs agenda, but the Main Street Fairness Act will set America back at a time when we can’t afford to lose momentum.”

National Taxpayers Union (NTU) Executive Vice President Pete Sepp:

“Giving governments even more sweeping powers to tax won’t restore any part of the private sector to health, especially the small businesses Americans are counting on to lead a resurgence in job and income growth.”

NetChoice Executive Director Steve DelBianco:

“Congress often says that small businesses are the backbone of the economic recovery, but these new collection costs will break the backs of many small online businesses. This legislation fails to define safe harbors for small businesses, virtually guaranteeing that small and medium retailers will receive little help in complying with thousands of state and local tax jurisdictions.”

TechNet President and CEO Rey Ramsey:

“The Main Street Fairness Act bills will make it more complicated, expensive and onerous to conduct business on the Internet. During these difficult economic times, the last thing we need are additional burdens on this growing economic sector.”

Care to share your opinion below?

Senators Dick Durbin (D-IL), Tim Johnson (D-SD) and Sen. Jack Reed (D-RI) cosponsored the bill in the Sentate while Reps. John Conyers (D-MI), Peter Welch (D-VT) and Heath Schuler (D-NC) did the same in the House.

“In 2012, states across the country, including Illinois, are expected to lose as much as $24 billion in uncollected state and local taxes on Internet and catalogue sales,” Durbin commented in a statement. “From 2005 to 2010 the state of Illinois estimated it lost $153 million each year. The Main Street Fairness Act doesn’t ask anyone to pay a single penny more in taxes. Instead, it would help governors and mayors collect taxes that are already owed.”

Amazon, which is fighting California legislation and shut down its 10,000 or so affiliates in protest, has commented before they believe the sales tax framework should be built on a federal level. Last week at the company’s second-quarter earnings call, CFO Thomas J. Szkutak said, “We support a federal simplified approach, as we have for more than 10 years.”

Paul Misener, Amazon vice president for global public policy, wrote a letter to Durbin giving Amazon’s support, suggesting that the Supreme Court views Congress as the “appropriate forum to resolve the issue.”

eBay’s Brian Bieron, senior director of federal government relations and global public policy, didn’t mince words: ”A collection of state tax commissioners have again been able to get an outdated Internet sales tax bill introduced in Congress, but we are confident that it will be rejected because it would harm small Internet retailers…. Forcing small businesses to take on the same costs and tax burdens as national retail businesses is unrealistic, unfair and will unbalance the playing field between giant retailers and small business retailers on the Internet,”

eBay instead has put its support behind House Resolution 95 by Reps. Dan Lungren (R-CA) and Zoe Lofgren (D-CA), which allows Congress to deny states the right to impose “unfair tax collecting requirements on small online businesses.”

And if you’re scratching your head and thinking this is just a little unfair, you’re not alone. When a similar law passed in New York, Amazon was quick to cry “Unconstitutional!” But it looks like they might be able to make a change in California, where the corp wants to turn the vote over to the people.

This process, the referendum, could be a turning point. As Mike Allen noted in Feedfront, business based in states that enact the so-called “Amazon tax” can end up facing two drastic options: Remain in-state and risk the cut in revenue or move to nearby states with more lenient tax laws.

Back in January, Chicagoist’s Prescott Carlson noted, “What that means is that if out-of-state online retailers continue business as usual, the total increase in use tax collected will be zero. Also, those affiliate dollars earned are taxable, so the state loses out on that income tax as well, resulting in a net loss in revenue. ”

Furthermore, it looks like the pretenses that versions of the Amazon tax are being enacted — 12 states have passed it into law — are being sold on are less than honest. Rebecca Madigan, President of the Performance Marketing Association, writes:

The Affiliate Nexus Tax law was passed under a shadow of misinformation and powerful lobbying by aggressive retailers who used this legislation for competitive gains. The public needs to learn the truth and decide with their votes.

With details of the referendum due next week, sign up for updates from the PMA now to stay current on this issue. While a referendum on the Amazon tax in California doesn’t equal a victory, it is an effective way to gauge what small businesses–those inside the affiliate community and out–think about the Amazon tax as a whole.

Back in June, the PMA sued the state of Illinois over the passage of a similar tax law.

Cross-published at the Blue Phoenix Network blog.

Time and time again these new laws being proposed are called “Amazon Taxes”  for the sole purpose of ignoring the rest of the companies that will be affected when these taxes are passed. The real truth behind the Affiliate Tax debate is that these laws will have a profound and significant affect on almost every company in the industry, from the largest to the smallest – but will have the greatest impact on small companies.

This is not an “Amazon” tax, or an “Overstock” tax, but instead a “Small Business Tax” that has been labeled incorrectly in order that the general media might ignore the reality of what these taxes will do to small businesses. I’ve actually met a few attorneys who don’t quite understand the real problems with these laws. Let’s quickly look at what most of these tax laws will do, and explain it simply:

The laws specify that if there is any affiliate of any company making revenue for a product in that state, then the company itself has to pay taxes for any transaction in those states.

My explanation is purposefully obtuse and vague, because in many cases so are the laws that are being passed. The definition of a transaction or purchase is not very specific and thus is extremely problematic.  This means that anyone engaged in any sort of e-commerce, whether it is sale of a product, promotion of a program, signups to site, in theory could be forced to pay those states taxes.

Thus if you are CPA network promoting a product and you have affiliates in those states, you may be liable for taxes in those states. Why? Because as anyone who is in this industry knows, the definition of who is selling the product, versus what a network is and even what a publisher is, is often difficult to pin down.

Sometimes affiliates of CPA Networks are the publisher, sometimes they are just a PPC buyer, and sometimes the network is a publisher of another network. With all the connections, who is to say what establishes the nexus?

Don’t expect states that are desperate for money to actually define this for you, but instead send any company that has any affiliates in that state, anyone that reports that their money is made from marketing, tax bills. We are their new “banks.”

Even if we knew the answer definitively to the different questions, many companies, from lead gen firms to dating sites are going to start avoiding CPA networks in those States for that specific reason. They do not want to risk that working with a company in a certain State will somehow cause a nexus and thus require them to file paperwork, file additional taxes. They’d rather make it easy and work with someone else.

Thus, as I started, the victims here are not the Amazons of the world. They are the small businesses. Most CPA networks are just that: Small businesses, with a few employees, working hand in hand with their affiliates to create valuable opportunities for their advertisers. They, along with their affiliates will suffer the most.

These taxes are aimed at our industry, our friends, our community and our businesses. If we continue to allow them continue without standing up, supporting those people who are fighting, it is very possible in a few years we all will wish we did.