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Wednesday, May 19, 2010

Google Readies Its E-Book Plan, Bringing in a New Sales Approach

By JESSICA E. VASCELLARO And JEFFREY A. TRACHTENBERG

Google Inc. plans to begin selling digital books in late June or July, a company official said Tuesday, throwing the search giant into a battle that already involves Amazon.com Inc., Apple Inc. and Barnes & Noble Inc.

Google has been discussing its vision for distributing books online for several years and for months has been evangelizing about its new service, called Google Editions. The company is hoping to distinguish Google Editions in the marketplace by allowing users to access books from a broad range of websites using an array of devices, unlike rivals that are focused on proprietary devices and software.

Chris Palma, Google's manager for strategic-partner development, announced the timetable for Google's plans on Tuesday at a publishing- industry panel in New York.

Jeff Trachtenberg discusses Google plan to start selling digital books this summer, setting the stage for a battle of the online behemoth booksellers. Plus, Apple attracts antitrust scrutiny from regulators and Congress drafts a web-ad privacy bill.

Google says users will be able to buy digital copies of books they discover through its book-search service. It will also allow book retailers—even independent shops—to sell Google Editions on their own sites, giving partners the bulk of the revenue.

The company would have copies on its servers for works it strikes agreements to sell. Google is still deciding whether it will follow the model where publishers set the retail price or whether Google sets the price.

While Mr. Palma didn't go into details, users of Google Editions would be able to read books from a web browser—meaning that the type of e-reader device wouldn't matter. The company also could build software to optimize reading on certain devices like an iPhone or iPad but hasn't announced any specific plans.

By contrast, Amazon's digital book business is largely focused on its Kindle e-reader and Kindle software that runs on some other hardware.

The project is Google's attempt to crack into the market of distributing current and backlist works.

Publishers have yet to publicly commit to participate in the service but Google isn't expected to run into much trouble getting them to join. Publishers tend to believe the more outlets to sell books the better. Even the smallest independent bookstore will have access to a sophisticated electronic-book sales service with a vast selection of titles.

"This levels the retail playing field," said Evan Schnittman, vice president of global business development for Oxford University Press. "And as a publisher, what I like is that I won't have to think about audiences based on devices. This is an electronic product that consumers can get anywhere as long as they have a Google account."

Google says users will be able to buy digital copies of books they discover through its book-search service.

He said Google Editions will also be critical because it represents "the ultimate test" of whether the ability to search, find and instantly buy content will generate significant gains in revenue. "This tears down barriers," he added.

Retail isn't Google's calling card, but the company has an online store for Android apps, sells software for businesses and it sells a phone.

Google may struggle to build awareness about the service. It is hoping users click to buy books through its Book Search product, which has a relatively small following compared to its overall search service. It is also betting on other book resellers to push and promote Google Editions themselves. Whether they do so will probably depend on how much revenue they are generating.

The online sales effort is separate from Google's fight to win rights to distribute millions of out-of-print books through its digital book settlement with authors and publishers. U.S. District Court Judge Denny Chin is expected to rule in that case soon.

Tuesday, May 18, 2010

Too Fat for Hooters?

Employee says she was told to lose weight or lose her job

Tuesday, May 11, 2010

RadioShack

The Lost Tribes of RadioShack: Tinkerers Search for New Spiritual Home

* By Jon Mooallem
Andy Cohen waves his arm at the electrical miscellany hanging around him, showing off his tubular lugs and a box labeled “81-piece terminal assortment”. Cohen is holding court at the back of the RadioShack store he owns in Sebastopol, California. To his left, a tattooed kid fishes through a metal chest of drawers labeled “fast-acting/slow-blow 3ag-type”. Another cabinet is labeled “capacitors: electrolytic, radial (pcb-mount) leads, axial (in-line) leads”. Behind him, a spinning rack is hung with baggies containing dozens of different brass and gold solderless connectors. They’re the little widgets you think of when you think of RadioShack — the sort of electronic parts the company once had a near monopoly on but that are increasingly hard to find there. Cohen gets much of his supply direct from China. “Where are you going to find all these different kinds of solder? A selection of five soldering irons? All these connectors?” Cohen says. “Other RadioShacks, they hide this stuff or don’t buy enough of it anymore. We go out of our way to show you these things.”

Cohen is 54, with a gruff voice and the intense, deep-set eyes of an older Joaquin Phoenix. As a kid, he built computers, yammered on ham radios, and took special trips to the electronics shops in Lower Manhattan with his dad. He also pored over the RadioShack catalog the day it arrived, studying up on what was then cutting-edge technology — reel-to-reel tape decks, fax machines — and the pages and pages of arcane electronic components.

Cohen bought this store in 2003 after 25 years as a project manager at companies like Hughes Aircraft and Hewlett-Packard. Housed in a strip mall between a pet supply shop and a dry cleaner, it is not among RadioShack’s 4,470 corporate-owned stores but one of about 1,400 franchised dealerships. In exchange for using the RadioShack name, Cohen is required to buy a certain amount of his inventory from the company. Otherwise, he has a lot of leeway. And he has used it to fashion his shop into something like the eccentric, mad-scientist RadioShacks he grew up with. But he knows that he’s largely on his own in this, fighting a battle for the soul of the company that’s pretty much been decided everywhere else.

Recently, RadioShack has been forcefully rebranding itself, trying to shed its image as a temple of transistors, parts, and cables. Polished executives have parachuted in from the boardrooms of Safeway, Kmart, and Coca-Cola to turn the iconic American retailer around after years of underperformance and uncertainty. (In 2007, The Onion summed up the brand’s decline with the satiric headline “Even CEO Can’t Figure Out How Radioshack Still in Business.”)

The plan? The new bosses want to turn RadioShack into a hipper, more mainstream place for “mobility” — which is what they insist on calling the cell phone market. (In an interview, RadioShack’s marketing chief used the word mobility an average of once every 105 seconds.) Selling phones is central to the new RadioShack. And so far, it seems to be working. Per-store sales are up, and corporate profits jumped 26 percent in the fourth quarter of 2009.

Wall Street seems to like the strategy. After Apple finally deigned to let the chain sell iPhones late last year, the same Morgan Stanley analyst who in 2008 had described RadioShack as “a decaying business model” lauded its “growing relevancy as a wireless destination.” And in early March, the company’s stock price was pumped up by unsubstantiated rumors that it might be taken over by an investment firm. If nothing else, the gossip could suggest that RadioShack has whipped itself back into respectable-enough shape to be a plausible investment target.

But a small subculture of RadioShack nostalgics, including many former employees, have watched all this unfold with sorrow — if not a feeling of betrayal, then at least loss. The last nails are being hammered into the coffin of the little electronics hobby shop they once loved. And the cell phone seems to be an apt symbol for the superficiality and ordinariness they feel are taking its place.

“You walk into a regular RadioShack and it’s become like a neurosis,” Cohen says. “‘Sir, can I sell you a cell phone today? How old is your cell phone? What about your family, do they have cell phones?’”

The story of RadioShack’s evolution over the past half century turns out to be the story of America’s changing relationship with technology. The RadioShacks of old catered to customers who could diagnose a busted TV on their basement workbench. They might be messing around with some project on a Saturday afternoon, find that they were missing a part, and hustle out to the nearest RadioShack for some of the very gear Cohen still stocks.

But his shop is a lone outpost; in a single generation, the American who built, repaired, and tinkered with technology has evolved into an entirely new species: the American who prefers to slip that technology out of his pocket and show off its killer apps. Once, we were makers. Now most of us are users.
“We are not looking for the guy who wants to spend his entire paycheck on a sound system,” RadioShack’s chair, Charles Tandy, bragged to analysts in the mid-1970s. “We are in the do-it-yourself business.”

Craftiness was in Tandy’s bloodline. He cut his teeth helming the family business, the Tandy Leather Company, which sold leather and leatherworking tools to veterans’ hospitals and Boy Scouts. The cigar-chomping Texan was the kind of eccentric, larger-than-life executive that any modern PR handler would keep tightly muzzled. He celebrated his 60th birthday by riding a rented elephant around the grounds of his mansion, and he kept a plastic breast on his desk that made a gong sound when he pressed the nipple. It was how he called for more coffee.

Tandy recognized that leatherworking was probably not a growth industry, and in 1963 he strong-armed his board of directors into buying and pouring money into RadioShack, then a 42-year-old company with nine stores. RadioShack quickly ballooned into a chain of more than 6,000 locations, becoming a kind of cluttered general store for the pioneers of the electronic age. That growth was spurred on in the mid-’70s, when the company smartly got in front of one particular technological fad: the CB radio craze. At the peak of the boom, RadioShack was opening three new stores a day. (”Americans sure like to jabber,” a befuddled executive told the press.)

This is not to say Charles Tandy himself was an early adopter or technogical visionary. According to the book Tandy’s Money Machine, by Irvin Farman, when a RadioShack vice president rushed down to Tandy’s departing Lincoln Continental to tell him they had created a promising prototype of a computer, Tandy shot back, “A computer? Who needs a computer?” Nevertheless, by 1977, the company was preparing to unveil the TRS-80, the world’s first mass-produced, fully assembled PC.

“I remember the TRS-80 very well,” says Forrest Mims. At the time, Mims had already begun his career writing how-to books like Getting Started in Electronics and Engineer’s Notebook, definitive editions in the world of hobby electronics that have sold more than 2 million copies. The books were written exclusively for RadioShack and were offered in stores for a few dollars each. They were essentially giveaways; the real money came from all the diodes, transistors, and tools that hobbyists needed to build the circuits he diagrammed. It was a shrewd tactic. Those little parts and pieces had huge markups — some as high as 500 percent — and RadioShack could fit lots of them in its relatively small stores.

Mims was invited to take a look at the TRS-80, before it went on sale, at a RadioShack R&D unit located in a warehouse in downtown Fort Worth. The two young engineers who had developed the machine led him around. “They escorted me into this room,” Mims recalls. “It was all hush-hush.” Inside, arrayed on long tables, were two dozen TRS-80s, with cassette decks for data storage and 12-inch RCA monitors. They were being tested, and each had an image on its screen of a waving American flag. “It was really a shock,” Mims says. He had never seen 24 computers in a room before; in those days, if you wanted a personal computer, you pretty much had to build it yourself.

One of the engineers invited Mims to sit down and try out the TRS-80 — just fool around on it a little. He declined. “I didn’t have a clue how to use the thing,” he says. Mims was an expert engineer, but he didn’t know anything about the machine’s programming language, Basic.

A new era was beginning. Computers, and all consumer electronic goods, were on their way to becoming what they are today: slick low-cost commodities heaped in the aisles of big-box stores. When they break, it’s cheaper to throw them out than open them up and repair them, and most can’t be sold for the kind of profit margins required by small stores like RadioShack. In retrospect, the launch of the TRS-80 was probably the most promising moment in RadioShack’s history — and the start of its decline.

“Let’s put it this way,” Mims says. “Hobby electronics peaked with the advent of the ready-made PC. There was no longer a need for anyone to build digital displays and TTL processors in their garage or spend time messing with circuitry. Now you could spend time at a keyboard, working on an actual computer.” It was a fulfillment of a dream. But it also served as a portent that the hands-on way of life RadioShack embodied would become irrelevant.

Mims couldn’t use the TRS-80 that day because he knew much more about how that piece of technology was wired on the inside than how to do anything with it. In other words, he was the exact opposite of today’s typical consumer. And that cultural shift is what RadioShack has been struggling with ever since.

The TRS-80 may have signaled the arrival of modern consumer electronics, but that revolution largely failed to transform RadioShack. The company, with its roots stuck deep in the DIY business, sold electronic products under the Tandy and Realistic brands, but they suffered in comparison with brands like Sony and Panasonic. Now the company is trying to engineer a dramatic change of course. Last August, it launched a $200 million “brand transformation” effort — not changing its name, exactly, but instead asking America to call it by a nickname: the Shack.

The company ran bizarre animated television spots. In one, a gaggle of Albert Einsteins scampered into a dump truck; in another, cell phones in Nordic attire sang in the native tongue of “Phonelandia.” (The message: “The Shack sells more phones than the population of Scandinavia.”) An outdoor party called the Summer Netogether was held simultaneously in San Francisco and New York City in front of two 17-foot laptop mock-ups and streamed live on the Web. But as the hours crawled on, the event started to feel like a painfully long red-carpet party with no main event to follow. At one point, there was a dance contest. One entrant whipped off his prosthetic leg and air-guitared with it.
Chief marketing officer ` says the aim has been to make RadioShack synonymous with mobile phones and “unwind decades of brand misconception.” The problem, in short, was that Americans didn’t think RadioShack was cool. To the extent that most people thought about RadioShack at all, it was as a convenient place to grab some printer ink or a hearing-aid battery.

Between 2004 and 2009, the company’s profits fell by 39 percent. It had gotten to the point where, early last year, executives were putting a little too much hope on the nationwide switch-over to digital TV, imagining that folks coming in to buy conversion boxes could be seduced into other, more expensive purchases, too. But the little old ladies with coupons for government-subsidized antennas were resistant to impulse buys.

Still, where giant specialty retailers like the Good Guys and Circuit City rode the electronics boom and bust right into bankruptcy, RadioShack has survived, although that survival was less a matter of salesmanship than cost-cutting. Around the time new CEO Julian Day took over in 2006, the company liquidated poorly selling inventory, closed 481 stores, and squeezed $100 million out of administrative expenses; even the houseplants in RadioShack stores were sold — to employees for $5 each — to save on the cost of watering them.

One of Day’s other priorities has been to meticulously homogenize RadioShack stores, รก la McDonald’s and Starbucks. Whereas the company once gave store managers an astounding amount of autonomy, a recently distributed internal handbook provides precise instructions for everything from organizing merchandise on the show floor to which cleaning fluid they must use to shine their metallic lower shelves. (Armor All Original formula, if you’re wondering.) Another page presents, with a series of painstakingly annotated photographs, the head-to-toe elements of the only two acceptable styles of dress for salespeople: Traditional Business (tie, optional vest or blazer, light-colored shirt, dress shoes) and RadioShack Casual (black, white, or red shirt, no tie, dress loafers).

Day’s efforts have made the company look better on paper, but it was only when it began to sell itself as a place to comparison-shop for wireless phones and calling plans that RadioShack began to seem viable again.

It may seem strange that, finding themselves in a financial morass, executives decided their best option was to compete head-to-head with both the wireless carriers’ own stores and the cell phone departments of giants like Walmart and Best Buy. But they may have had little choice: The average RadioShack store is only 2,500 square feet and can’t possibly stock a competitive selection of large appliances like flatscreen TVs. (Managers have had to stash merchandise in the rafters or rent off-site storage units in the run-up to Christmas.) Cell phones, on the other hand, like the parts and pieces the company once thrived on, are small products with exceptionally high profit margins. There’s the handset and the accessories, but most important, there’s the commission that wireless carriers pay to cell phone retailers for every new contract on a phone. A phone is like a tiny slot machine that pays off month after month.

The logic is hard to resist, and in fact, RadioShack’s focus on wireless has been building gradually for at least the past decade — always at the direct expense of hobbyists, says Tim Oldham, a former corporate buyer at the company. “They intentionally decided to downsize the product offering for hobbyists, all the capacitors and resistors and connectors,” in order to cram in more phones, Oldham says. “It’s not coincidental. The money was just too big.”

Applbaum says he doesn’t want to “disenfranchise” hobbyists, but his job is to bust RadioShack out of that niche and reintroduce it to people as a competitive, mainstream retailer of consumer electronics. Especially mobility. Applbaum wants to send a message: “The RadioShack of yesterday … is not the RadioShack of today.”

Andy Cohen is not an unreasonable man. He’s willing to admit — begrudgingly — that he doesn’t totally disagree with what RadioShack is doing. “As a stockholder at a lot of other companies, I look at what Julian Day is doing and I think, actually, that looks like the right thing to do.” His shop is an anomaly, Cohen says — a product of its idiosyncratic community. He doesn’t pretend it’s some kind of concept store RadioShack ought to roll out nationwide.

Cohen takes pride in the fact that his store carries only a single model of cell phone: a bulbous white handset called the Jitterbug. It has no features to speak of — it’s basically the mom jeans of mobility.

Cohen and his store manager, Steven Muscarelli, have made the centerpiece of their shop something they call the Make Case. Make magazine, the quirky bible of the DIY community, happens to be headquartered down the street, and in a glass showcase right under the register, Cohen and Muscarelli have an exhibit of back issues, tools, printed circuit boards, kits, and a slew of components to screw around with: ultrasonic range finders, dual-axis accelerometers, microbots. (There are also a bunch of Star Wars action figures in the Make Case, just because.) Muscarelli says people will come in, pick up an issue of Make, buy all the stuff they’ll need to build a particular project or hack outlined in the magazine — like a TV-B-Gone or a USB device charger made from an Altoids box — then head off to their garages. “They come back in later and say, ‘Look what I made!’”

But elsewhere, it’s a grim time for old RadioShack diehards. Mike D’Alessio, a once-devoted customer in Illinois who grew up playing with crystal radios and electronics kits he bought at his local RadioShack, tells me, “We’re living in a disposable world. It’s just not worth it to repair things; it’s not worth it to build things from scratch. The magic of that seems to have passed.” For reasons he can’t fully articulate, D’Alessio felt moved to scan 67 years’ worth of old RadioShack catalogs, page by page, and post them online. He often gets grateful emails from wistful or disenfranchised former customers and employees.

“Some people say RadioShack is just a store,” D’Alessio says. “But to me it was an idea — a learning and resource center that really shaped people’s lives.” D’Alessio has started talking about the company in the past tense.