He also killed Apple's wireless mouse development because he claimed that "nobody wants a wireless mouse." That's why Apple was one of the last to release a wireless mouse.
He was right most of the time, but not all of the time.
Huge only in the sense that a billion dollars is a lot regular people...Apple spends a fraction of what its competitors spend. Plus up until 2011 I think they spent about half of what they spend now.
Apple spends less than Microsoft, but it is almost entirely on a single product (the iPhone). Product for product, Apple's marketing budget is immensely larger than other similar companies.
And the iPhone is a bigger business than ALL of Microsoft's offerings combined
Per Vanity Fair:
"Exhibit A: today the iPhone brings in more revenue than the entirety of Microsoft.
No, really.
One Apple product, something that didn’t exist five years ago, has higher sales than everything Microsoft has to offer. More than Windows, Office, Xbox, Bing, Windows Phone, and every other product that Microsoft has created since 1975. In the quarter ended March 31, 2012, iPhone had sales of $22.7 billion; Microsoft Corporation, $17.4 billion."
FWIW, because of your comment about "before 2011", I was purposely looking at data from 2008, to help control for that (when the iPhone wasn't yet that popular as the original device kind of sucked; the 3G had just come out, however, as had the App Store, so things were already on an uptick).
Looking at data from 2007, it seems like Apple was spending a third what Microsoft was on marketing, and had half the revenue; arguably then, Apple was spending 33% less than Microsoft on advertising per revenue, not really "a fraction".
However, you seem to be correct about now: I pulled some 10Q's from this year, and it seems Microsoft is spending $3.4b/Q for $17b/Q in sales ($6b/Q profit) while Apple is spending Apple is spending peanuts (although I honestly couldn't find the data I needed to verify this from the 10Q) for about $35b/Q in sales ($9b/Q profit).
While looking into that further (as I was especially bothered that I couldn't find the exact advertising numbers), I then came across this article, which looks at yearly data and comes to the same conclusion.
The problem is that it isn't a craze. Very few PEOPLE are clamoring for them. Unless by people you mean a handful of city and state officials who think it's an awesome way to spend millions of dollars of money they don't really have on smiley vanity projects.
That would be a pretty bad sign. I sure as hell wouldn't invest in a company that's going to turn around and spend the money they raise on ads. They should be building a war chest and their biz dev and legal teams to get some leverage on the labels. Regular radio pays $0 of their revenue to labels, Pandora pays $.50 of every $1.
Radio stations pay annual fees for the license of broadcasting music, which is why stations have to report every song they play (this data is sampled to divvy up royalty payments to labels and artists.)
Pandora commands higher than average ad rates. Remnant (which is bargin basement inventory) is somewhere around $5cpm and I don't think they sell to networks for display to keep demand high. It's actually hard to get inventory there unless you are a premium buyer. For those of you who don't know or care much about online ads, all this basically means is that almost every other publisher (Huffpost, whatever) would kill to Pandora's rates. The fact that they aren't incredibly profitable shows how tough the business is. God knows how Grooveshark makes any money.
I wonder if they pay lower royalties on live music and that's why they try to jam it into my playlists all the time. In the last year or so I've felt there like there was something just a little off about it some of the song choices and I'd be curious to know if different artists/labels/genres command different rates and if that impacts the song choice.
But it is more than that. In my opinion there is kind of a nasty aversion in start up culture to permanence. Think food trucks vs opening a restaurant, outsourcing vs managing in house, renting a space vs building one, tele-commuting vs a vibrant office. It's not evil or anything, but in the aggregate I think it does lead to less commitment--building the type of foundation that other brick and mortar business do. Kind of a sad example is Amazon and their crazy Amazon Associates schemes to avoid paying taxes. Does it make sense from a maximizing shareholder value sense? Definitely. Does it maybe skirt some ethical obligations as a business and as people? Maybe.
It's because HN doesn't have to show pgview growth to investors or sell it to advertisers that they're able to make a decision like this that ultimately improves the quality of the site (probably at the expense of drives of traffic)
It's more impressive when companies add people to their board who add a perspective other than the entrenched (dare I say evil) mindset of their competition. An example: Chipotle adding Bill Niman, an advocate against factory farming, fast food and cheap meat. A good move for Groupon would be to add someone who speaks for small businesses--the main Groupon customers--instead of a major corporation.
