Gates and Visas

Bill Gates recently went on a lobbying visit to Washington and when asked what he'd do if he were in charge, one answer that seems to have surprised some in the media is that he'd advocate removing the limit on H1B visas. Gates views this limit as crazy and in essence said we are capping the number of smart people allowed to work in the US. A few politicians took issue with his view saying that tech jobs are not being created in US right now and thus the cap made sense. Of course what these politicians failed to say was what type of jobs were not being created. While many engineering jobs have found there way to places like India, the largest shift in recent years has been in areas such as customer support and customer service. The people who do these jobs are not the ones Gates is talking about. He wants programmers and software engineers so that the US can maintain its position as world leader in the tech arena. If we keep the cap places like India and China is where these engineers will wind up being employed - and there's a good chance they won't be employed by US companies. As you may tell by my tone, I tend to side with Bill on this one. I think it's crazy that the US limits how many scientists and engineers come in to the US to work. The future of the US will not be determined by call centers, it will be determined by people developing great new products that people want or need to buy. So please, let's focus on the destination not the current economic situation.

Business Week and Blogs

The May 2nd issue has, as I'm sure you've noticed, a cover story on Blogs and how they're going to change business, specifically your business. The article makes some excellent observations as well as some more obvious ones. That said as a piece aimed at the average business person that has yet to really discover the world of blogging it does a good job of getting you at least up to speed with this phenomena. The piece points out how blogs are changing various businesses and gives some examples of how blogs can be applied to a range of comms activities. Not surprisingly perhaps, the blog devotes a lot of space to talking about how blogs will change the media and of course to promoting a new Business Week blog - blogspotting.net. I would have loved to see this piece look more at how it's really shaping business communication and thus business structures but perhaps that will come as they delve into things deeper. Anyway, if you have not read the piece I would, if only so you can comment on it when your clients ask about the piece.

Recession or Growth Market?

Mixed results from technology companies in recent weeks have people speculating that the tech market is still in or perhaps heading for another recession. A closer examination of the data does of course tell a different story. Indeed close examination can tell you almost any story you want it to. In recent weeks we saw Intel raise guidance on profits and Apple again exceed expectations. We then saw IBM miss its numbers due to weakness in some of its markets in Europe followed by Lexmark that missing its profit forecasts. These contradictory results have been attributed to economic cycles, business management and simple poor forecasting. What’s clear however, in almost all cases is that sales have actually been rising. Even IBM, which has sales that rival the GDP of some countries, saw an increase that would satisfy Alan Greenspan. Wall Street, however, doesn’t care about sales that much. Wall Street cares about margins and of course earnings - and most importantly future earnings. It’s this last point that still seems to be where the tech industry is struggling. The bumpy state of world markets is making it hard for most businesses to project with certainty. The good news is that almost all the trends in tech sales are up. Of course there are sectors that are struggling but the encouraging news is that in general sales are trending in the right direction. The real challenge for the tech industry would however appear to be how to break out of low GDP-like growth and get back to the high growth rates achieved in the late 90s. Companies like Oracle are saying that growth will only come by acquiring market share. That seems rather a defeatist approach but who am I to argue with Larry Ellison. Actually I will argue with him on this point. The tech industry has a great chance to break out of GDP level growth but only if it wants to. I think the drivers of potential change exist. For example the growth in wireless technologies that make infrastructure way simpler for businesses and individuals to deal with. This growth is fuelling the opportunity for millions of people to access technology and technologies previously available only to the likes of the Fortune 500. At the same time the success of On Demand software such as Salesforce.com is showing that if you make it easier for people to access the technology they’ll buy it. At this point both of these areas of technology are relatively small when compared to the large traditional enterprise software and hardware markets. But I’d argue that if the industry really does focus on reducing barriers to technology in the same ways these markets have then growth could once again be quite explosive. Look hard at all the small businesses you know and ask if they use all the technology they could. The answer is no in almost all cases. Of course most businesses now own a computer but an alarming percentage of companies still don’t have a meaningful online presence. Add to that the unsophisticated approaches to distribution and purchasing that most small companies use and you see how big the potential opportunity is for just a few areas of the small business market. Getting to this market is of course easier said than done. Barriers such as affordability, accessibility and reliability still need to be adequately addressed but again examples such as the OnDemand software solutions from Siebel and Salesforce show that when you tackle these issues markets open up. So in closing I guess the message I want to leave is one of optimism about the long term opportunities facing the tech industry. This optimism, however, rests on the tech industry’s ability to create new markets by tackling the barriers that exist rather than simply fighting over existing market share.

Can Apple prevail?

The saying goes that you can win the war but not the peace. You only have to look at Iraq to see the truth in that. I have been wondering if Apple may also face a similar fate after it decided to take legal action against the bloggers that revealed some of its recent product news a bit earlier than planned. Apple duly won the first round of the legal battle but of course the case has been appealed. While victorious they have outraged many Apple loyalists, which let's face it isn't a good thing for a brand known for its cult like following. I'm sure Apple's view is that it has to fight for what it believes to be right but the cost of this suit could be a lot greater than the legal fees.

Do blogs need a new style of PR firm?

Blogging has emerged as either the biggest change to the way the media works or just web sites with a bit more personality depending on who you talk to. For the PR profession the challenge is how to deal with this channel. Should agencies and in-house groups have people focused on blogs like HP and Cisco I believe now have? Or should blogging become something embedded into the way everyone does PR? This is of course reminiscent of the challenge the dot com revolution posed. Back in the 90s lots of PR firms set up dot com divisions, or even separate businesses in a bid to win lots of dot com clients. Of course these divisions and businesses were no more than a facade. The people in them knew little more about eCommerce than any other tech PR folk but at the time it was what the market wanted so they did it. The question right now is should the profession do the same thing for blogs? Looking back at the dot com PR era there are some interesting lessons to learn:

1. Most dot com agencies didn't develop specific dot com products. Instead of using the Internet to create new types of PR products most simply adapted traditional products. Ask yourself, can you think of five new ways to do PR because of blogs?
2. The skills of most dot com agencies didn't really change. Instead of hiring a new type of consultant with a new skill set, most agencies simply transferred people to the new agency. This is of course why most of the dot com divisions never really stood out. Again, ask the question, should you hire a different kind of person to focus on blogs?
3. The business models of most dot com agencies didn't change. Sure some agencies took stock instead of cash (most of course now regret that) but that wasn't a new model. A new model would have been a totally new pricing and staffing model. I think you can guess the question that comes here.

What does all this say? It says that unless as agencies we really plan on offering a totally new kind of service for those companies tackling the blogsphere then we shouldn't even consider the option of creating a new division or agency. Instead we should simply add the blogsphere to our audiences. If, however, we are prepared to offer something truly different then I can see every argument for the creation of a new vehicle to offer a new way of communicating.

Blogs

I've had a few compaints that I don't update my blog enough. Well I do update it at least weekly but for some reason it seems my blog has become stuck in some time warp and to the outside world it has become mired somewhere back in February. I'm told this is probably just engines like Google and Yahoo that fail to crawl through blogs frequently enough. I was also told it could simply be that people have realized my blog isn't worth updating. I was also advised to use pingomatic which I've now done. Whatever the problem is, I'd like people to know that my blog is still alive. I do, of course, promise to make sure nothing interesting appears here.

The Valley’s Positive Outlook

Silicon Valley is an odd place. There are places like Portola Valley where there are more patents filed per capita than anywhere else on the planet. There are places like Atherton where house prices are such that even lotto winners can’t buy in to their dream house. There’s Sand Hill road where Venture Capitalists and Investment banks pay a premium not to have any noticeable amenities other than good access to I280. It is home to industry icons including John Chambers, Craig Barrett, Larry Ellison and Steve Jobs. Yet for all the brains and the money that are crammed in to the thin strip of land that goes south from San Francisco to San Jose, the ingredient that appears to be most valuable is (drum role please) optimism.

I first moved to the Valley just as the bubble burst (no I am not to blame). Yet even as house prices dropped and the layoffs mounted talk was of the turn around, the next wave, the new thing. Everyone I spoke to said it was a correction but don’t worry things will sort themselves out. It seems that optimism was often misplaced as the turn around has taken far longer than those conversations suggested. However, that optimism never seemed to wane. Instead it seemed to grow, even though the tech industry every one either worked in or worked around seemed to be struggling.

This wonderful optimism is evident in the series the San Jose Mercury News is writing on life after the bubble burst. While I know some in the Valley hate these pieces (in part because they don’t want reminding of the dark days), I’d recommend them to anyone wanting to get a handle on the Valley. They may of course be a touch self serving and optimistic but hey this is Silicon Valley, what do you expect?

http://www.mercurynews.com/mld/mercurynews/business/special_packages/techbubble/11079435.htm

The media industry and the tech industry….same fate?

When I started working in the tech sector in the early 80’s the dinosaurs (as they were known) still roamed the land. These were old style giants of computing such as Unisys, NCR and the old style IBM. These companies did everything. They made their own chips, designed their own hardware and networks; and wrote their own software operating systems and applications. Within five years the old order was being replaced by what the Economist described as the ‘New Computer Industry.’ This industry was made up of specialists. These were smaller more focused businesses like Intel, Microsoft and at the time Novell and Lotus. They each did one thing really well and brought about a revolution in the industry that brought the dinosaurs to their knees. Of course years later the so-called ‘new companies’ are becoming the giants.

I can’t help but see a parallel in the entertainment/media industry. For years we’ve had the giants of the media world. Companies like Disney and AOL Time Warner. In recent years, however, we’ve seen that thanks to technology just about anyone can set up a media business. It’s now common for a low budget movie to at least get nominated for an Oscar and we only have to look at the troubles the TV networks gave faced in recent years to see that this world is a changing. So who are the Microsoft’s and Intel’s of the media world? I don’t know and I wish I did as I’d surely buy their stock!

Is the tech industry doing good PR?

Every day I see some great coverage of one tech company or other. In recent times Apple has received much of the positive press following its launch of the Shuffle and the new iMac mini. Indeed Jobs grinning face on the cover of Fortune was a tremendous piece of PR. Yet for all this great PR, confidence in the tech sector, at least from Wall Street, is still lacking. Looking at the sales of the top tech players such as IBM, Microsoft, Intel, HP, Dell, Oracle, Apple and Cisco, you see some impressive improvements in sales and profits overall. Indeed sales growth of over 10% is the norm. Yet if you chart the stock prices of these players for the last year you see IBM, Microsoft and Oracle all down around 5% on the year, HP down 12% on the year; Intel down 20% and Cisco down 25%. Only Dell and Apple have shown improvements. Dell is up 25% and Apple almost 300%. What does this tell us? Does the market think the rest of the tech industry stinks? Not if you read the analyst reports. Most of the major tech stocks are listed as a buy… yet nobody is clearly buying.

The conclusion you have to draw here is that following the bursting of the dotcom bubble, the market doesn’t trust the tech sector in general. The accepted wisdom seems to be that the industry is still overvalued and rather than going through a wholesale correction, the market is letting the tech stocks gradually slide into to the right price range as their earnings improve. Of course the other way of looking at it is to say the tech industry, which is the most competitive industry on the planet, needs to do better PR not for each company but for the industry itself. The tech industry is huge and will get a heck of a lot bigger in the next decade. Growth rates may not be in the 100% range but it will outgrow the GDP of every developed nation of that I’m sure. With such a healthy long term outlook the market ought to be backing the industry. In the coming months the larger tech companies should, in my view, start to consider doing PR not just for themselves but the industry at large. Perhaps then Wall Street will start to pay some positive attention.

The other side of the pond

This weekend's UK business press broke the news that Incepta (Holding company for the Citigate agencies) and Huntsworth a sizeable UK holding company also in the PR space, are in advanced talks to merge. The merger could create a group with a market cap of around 200m sterling. There is tremendous commercial logic in such a transaction. Both companies have suffered from being 'too small' in the eyes of the UK stock markets and have often been encouraged to 'get big.' It's therefore interesting to see the media and analysts be less than enthusiastic about the proposed deal. It's also puzzling to see the stock prices of both firms go if anything backwards. I guess it shows that when the market gets what it wants, they want even more.

Where will blogs end up?

As the blogging phenomena takes off it's great to see all the tech players salivate as they imagine a vast new piece of Internet real estate being built. Indeed their eyes positively pop at the opportunity of owning land where the user has to do all the construction. All they have to do is figure out how to collect the rent. For the communications pros the interesting challenge is how to work with a community that is pure in thought and is keen to protect the blogsphere from becoming commercial. Of course we all know that if the blogsphere has real commercial value then it will get exploited by big business just like everything else. The challenge is of course how to take advantage of the blogsphere so that we don't destroy its value. Right now the value of the blogsphere is that enables anyone at any time to post commentary or perspective on anything. The discussions such information create and the transparency it promotes for companies and organizations is tremendous. Will this continue? Right now few companies effectively track the blogsphere, thus enabling issues to bubble and for truth to emerge long before an affected company takes action. That will change in the next few months. Tools such as Technorati's will enable all companies to monitor what's said and take action. Over time blogs will find it harder to attack companies, people or organizations. To use the real estate metaphor, as soon as someone sticks up a building they'll get surrounded by skyscrapers thus blocking out the view. Do I expect this to kill blogs? No. Instead Blogs will evolve. Just like the media the blogsphere is starting to replace (for some people at least), the blogsphere has already created its heroes. These heroes are creating a new form of media, where discussion and community are central. Over time the blogsphere will evolve from a world where content is created randomly across a broad and often new playing field, to a place where content is channeled and where people can easily join communities and discussion. Of course some will argue you can do this now. I'd argue that it's still way too hard and that the very nature of the blogsphere today means we're still marking out the territory. Only once the infrastructure is in place will the real blogsphere come to life and boy will that set up some interesting communications challenges.

What now for HP?

So Carly has gone and HP has a bunch of questions to answer. Will it truly remain one company or will it get carved up in ways that will excite the investment bankers and in the short term Wall Street? Will there be any, albeit subtle shift in strategy as people internally try and position themselves for whomever will become the new head of the business or businesses?

Forbes have published like crazy on this news today as have many other business publications. CNBC even had a special always on HP ticker. Interestingly I overheard lots of chatter on this in a coffee shop in HP's home town, Palo Alto today. Most were shocked by the news. The general feeling seemed to be that Carly had got through the truly tough period. And while HP's stock has hardly performed well under her leadership, neither it seems have any of the other major tech stocks during the same period. In other words, they can't say she's managed Wall Street any worse than anyone else has. If anything the chattering masses of Palo Alto were more concerned about how rudderless this news might make the company while the search for a new CEO went on. One guy put it well when he said: "if you were a big corporate customer weighing a deal between HP and IBM right now, you'd be a fool to go with HP. You have no idea what business they'll be in in six months."

So confusion is going to reign for some time as I gather the board's decision was only reached late yesterday. This has left HP with a stand-in CEO. I'm sure HP will perform its day to day duties just fine but customers, especially big ones, care about the future of a business and with a stand in at the helm, that is going to make a lot of people nervous for some time to come.

The trouble with blogging

It might sound odd to write a piece for a blog that in effect says blogging isn't that great but that's exactly what I need to do. I've recently been spending a lot of time on blogs and on the Internet researching the blogging phenomena. Blogging is of course still in its infancy. Tools to create blogs are now easily available. Tools to find blogs are starting to appear, though they're far from great. Indeed the technology around blogging is not my beef. My beef is with the content and unreliable nature of that content. First there is the frequency issue. Most blogs don't get updated that frequently, mainly because most blogs are written by real people with real lives and they simply don't have time to keep them populated with gripping content. Second, there is the reliability of the content. Blogging's greatest asset is its weakness. There is no policing of the content which means anyone can write pretty much what they want and it's unlikely there'll be any problem even if they've made some huge factual error. If you translated these issues and put them into the traditional publishing world, you'd have chaos. Imagine a magazine that came out when its editor felt like it. Imagine that same magazine never checked its facts and went simply from memory. It frankly wouldn't work and any magazine that tried to run that way would either die a natural death or be litigated out of existence. The only reason this isn't yet a major issue for blogs is that people put out the content for free. Of course if it's free then you can argue you get what you pay for. But of course we all know that we need blogging not to be second rate journalism but liberated journalism. We want it to provide a fresh perspective and to create dynamic new communities (I'm not altogether sure I know what a dynamic new community is btw - but it sounds good). I truly think some blogs are doing this but they are the exception rather than the rule. Perhaps that's the price we have to pay. Perhaps those of us who want to hang out in the blogsphere need to accept that there will be a ton of poor blogs (this one included) and a few great ones. My worry with this situation is that sadly under these circumstances we will only attract the truly dedicated to our world. The rest will take the easy route and sign up for MyYahoo as their trusted source for content, and who'd really blame them.

State of the Internet

As President Bush stood up to address the nation and those parts of the world that are interested in his views on the State of the American union, my mind quickly turned to other things. Most notably the irritating crashes I had been experiencing a few minutes earlier on a travel web site (which will remain nameless but let's just say it's a big one). I thought then about the first time I really started using the Internet using a dial up connection. I remembered the first iteration of MSN and how.. terrible it was. As my mind drifted away from the President and the incessant clapping, I thought about how I use the Internet today versus even five years ago. Like many, I'm now hooked. My Treo has a terrible web capability - but I still use it. I get depressed when I can't access email and my wife goes insane when instead of using a newspaper I insist on using the Internet to find out what movie's are playing. For birthdays, holidays etc I use the Net to shop for all those people that are miles away so I don't need to think about shipping anything. For travel I wouldn't dream of calling a travel agent unless I was stranded somewhere. Put simply the Net has become a part of my life. I can't put an absolute percentage on it but my best guess is that at least 50% of my work life involves the Internet and about 10% of my private life. That's a lot given my parents spent zero time on the Internet when they were my age (for obvious reasons). So did the technology that is changing society even get a mention in the President's State of the Union speech? I don't think so, but then I did rather switch off for most of it. I do remember thinking that it was probably a good thing that the government doesn't have to run the Internet. If they did it would no doubt be heading for bankruptcy by 2052.

Chav

The British among you will have heard this expression. Essentially 'chav' has become a word that even my 72 year old mother uses. As the web site Chavworld.com says: 'chav' (slang) - a young person, often without a high level of education, who follows a particular fashion; Chavs usually wear designer labels including the chav favorite 'Burberry', and if they are girls, very short skirts, large hoop earrings and stilettos. Chavs see branded baseball caps as a status symbol and wear them at every opportunity. Normally found hanging around shopping centres.

So what is so interesting about this expression and why should anyone in, or connected to, Silicon Valley care? Well, I was struck when in the UK that Burberry is already having to defend itself against the 'chav' status. It seems young people that had been flocking to own a piece of clothing with Burberry tartan are now unstitching the tartan from items they own and they certainly won't be buying anything new that attaches them to the brand. All of this shows how quickly brands can be built and then destroyed. In this instance this is not some natural disaster, this is someone, somewhere taking the brand down. What if Apple's products were suddenly deemed chav? Would the iPod suddenly be hidden from view and would Creative's Zen replace it? I noticed on one of the sites that people were already identifying certain cell phones as Chav. Of course it could be said that all that's happening here is that the natural order of fashion is taking its course and that Burberry which came (back) onto the scene from nowhere is now about to go back into obscurity (at least in the UK). The shocking aspect is how fast it's happening and the role the Internet is playing. For example there are now dozens of web sites such as the rather down market Chavscum.co.uk that even offers suggestions for those looking for chav baby names (or perhaps the chance for people to make sure the name they are about to choose isn't chav).

Of course the whole 'chav' concept has yet to make its way across the Atlantic. But when it does I can just imagine what the consumer marketers will make of it. Until then you can go on buying Burberry... If you really want to.

Will we do things differently this time?

Google has been credited with putting the fire back in to the IPO market again. Indeed the San Jose Mercury News recently described last year as being split in to two eras - BG and AG... Before Google and After Google. Such was the impact of the Google IPO that it has put IPOs and more importantly tech IPOs back on the map. The Merc's article went on to say that Nationally, last year's IPO crop was the largest since 2000, just before the painful bursting of the Internet stock bubble. More than 230 companies in a wide array of industries took the IPO plunge, raising a total of $44.5 billion, typically used to build their businesses, cash out insiders or pay down debt. That was nearly triple 2003's 81 deals, not counting some top-performing deals out of China in 2004, such as job-search company 51Job, online game company Shanda Interactive Entertainment and telecom company China Netcom.

The rush of IPOs is perhaps not that surprising given that the number of startups didn't decline as much as the stock market and the need for capital from public markets didn't vanish. So at some point all that pent up demand had to be fulfilled. Whether this last does of course remain to be seen.

The piece that interests me is whether the resurgence of the IPOs will change the way people deal with benefits such IPOs bring. In the boom years people rode their companies stock to the moon and most then clung on as they hurtled back to earth. I've noted a few people quietly leaving Google lately (A Google employee with 10,000 options priced at $30 will have made a cool $1.6m profit at today's stock price). Not all IPOs have been as succesful as Google's but will the recovery of IPOs mean that this time people are simply going to cash out and get out as soon as some value has been built? I suspect many will do this, especially those who lost their paper millionaire status in the crash. After all when the market was always going up we all knew we'd be mad to sell. When things crashed???

So what will this mean? Well if it does act out as I suggest then we'll see a very unstable market. We'll see people getting out as soon as stocks float and hit any of the projected prices analysts are forecasting. Is there a way around this? Well of course we could all become practical and take a more analytical view of the world and hold on to the stock we are sure will continue to rise.

Now if only we knew for certain which one that was....

2005 is already over

I was unfortunate enough to be ill on Monday. This was not the after effects of too much celebration over the New Year but rather a stomach bug that confined me to my bed for 24 hours. During my vaguely awake moments I surfed through the news channels on TV as my wife and children passed messages under the door - messages like: "are you hungry?" and "hello daddy, are you alive?" I didn't reposnd to any of these in a bid to see if any of them would dare open the door.

During my day-time TV surfing I was relieved to learn that 2005 was essentially all over from a financial perspective. The stock watchers on CNN and CNBC both made confident calls on what would happen to the market overall for the full year and cited many notable economists to back their perspectives. Of course I'm not going to share these predictions for the simple reason that they were total BS. Even the reporter on CNBC giving the predictions admitted that when they did the same piece a year ago they'd made a hash of it. So it occurred to me, why do this piece if you know it's garbage? The answer is of course that we all want to know what will happen in the future and we want someone with authority to tell us so we can tell others. And of course when we meet our friends and say "according to CNN the stock market is going to see a rise of x% this year," we'll sound like we know what we're talking about. But then again, if we'd actually watched the piece we'd know that they used so many caveats in their reports that they could have said the market was going to do anything.

All of which poses a question in my mind. Is the media just trying to fulfill the role we want it to in our lives or does it have a serious agenda? Surely we don't want flakey content just to support interesting issues so we ca sound intelligent to our friends and colleagues? OK, I'm being silly here I know. Of course the media is trying to respond to our wishes, after all it's a business and businesses do want their customers want (most of the time). I just thought I'd raise the flag at the start of a New Year and remind us all that the media could do so much more. Instead of meaningless star gazing and speculation the media could do real analysis of events so we learn. If they did that more then perhaps Donald Trump would be forced to go back to being a businessman instead of a TV personality and instead of the Apprentice we'd get some real TV.

Happy New Year!

And the award goes to...

It's that time of year when children get excited about the holidays and the judges gather in New York to try and figure out who is going to win the much coveted PR Week Awards. For the second time now I'm one of those judges and for the second time I have to trawl through a huge binder full of submissions. It is a tough job - not least because of the volume of submissions. It reminds me how an editor must feel when he gets a mountain of press releases to read to see if any is worthy of a news item.

Let me be very clear. There are some great pieces of work covered in the entries. Sadly when you have a binder full to read it's hard to make sure you give all the entries the attention they probably deserve. Instead you start to develop a system, whereby you look to make sure everyone has included basic items like measurement. Sadly even some of the good campaigns seem not to have covered such a basic item properly. I also looked to see if anyone actually took the trouble to justify why they chose the strategies and tactics they selected. Again most seemed not to bother. Using these and a few other criteria I was able to select my top two or three entries. While my approach to the task was solid enough, I would say that I'd really encourage people entering these awards to try and put themselves in the shoes of the judges before they even bother to start writing the entry. I couldn't help be reminded when reading some entries of resumes I'd seen over the years from people who clearly didn't know what the job was but had applied all the same just in case.

I would like to say that judging the entries was fun. It wasn't. People had crammed so much content onto two sides of paper it took an age to read them all and 'entry fatigue' was definitely setting in by the last few in the pile. So next year when it's award time again, give a little thought to the poor judges and try and think of what would help you give the submission a high score if you were a judge.

Of course I can't reveal what category I'm judging or who my chosen few were. That said I'm one of several judges for the category so my votes my end up being irrelevant anyway. All will be revealed when the awards are made in March. Let's just hope the other judges stayed the course and managed to get through all those entries. After all, buried in that pile of entries are some good campaigns that truly do deserve awards.

The serious side of PR

Last night Text 100 held a party in San Francisco to show off its new offices in Maiden Lane. These are impressive premises for a business that only opened its doors in this part of the world in the late 90s. But then this is the agency that can boast IBM, Cadence, NEC, Xerox, FujiFilm and Earthlink as clients. So they you'd expect them to located in great space right? Well such premises would have been cost prohibitive only a few years ago. Indeed it may seem sad to say but the cost of accommodation has been one of the major drivers of the success and failure of te PR agency business in the last few years. I know of at least three firms that went out of business because greedy landlords had pushed them into office rents their businesses couldn't support. If I look at the San Francisco market as an example, relatively small firms were being asked to pay $80-90/sq ft only three years ago. Today that same space is a mere $25/sq ft - and you'll likely get all the office furniture you'll ever need thrown in. What does all this mean and why have I taken the trouble to write about it? Well it means that the fiscal fundamentals of running a PR business are starting to come back into line. First came salaries, which like rent had been out of control. This bodes well for the sector and should mean that PR professionals will be able to run much better businesses. That is until the next economic bubble bursts - which hopefully isn't for a very long time! Until then the Text 100 staff are going to work in one of the coolest spaces in the city, something that would have been unthinkable only a short while ago.

Winter? But it feels like Spring already

Winter has come early to Silicon Valley, at least in terms of the weather. The normally blue skies have been replaced by a more Seattle like gray. Of course winter in this part of the world is traditionally a short affair. By March people can feel quite confident that their morning latte can be consumed outside. While winter weather has arrived a little sooner than expected, spring like conditions appear to have come early to the tech PR industry. Agencies are once again hiring as new business opportunities abound and client spending rises.

Such conditions have not been the norm in the last few years. Indeed the market has been heavily in favor of the client. Knowing agencies needed the work clients have been able to place high demands on their external teams. That balance of power has, however, started to shift. While it would be unhealthy for a service industry like PR to dictate to clients, it is nice to see a more balanced relationship starting to develop between clients and their consultancies.

Of course this improvement in market conditions for agencies is not to be unexpected. Sales of the major tech firms have been on the rise, taking with them the marketing budgets of these businesses. At the same time VCs have been starting to pump large amounts of money into a wide range of startups - much of which needs to be used to get them recognized by the market. Of course not everyone is benefiting. In recent weeks I've heard on the grapevine that Fitzgerald is closing down its local office and that Golin Harris's tech business is down to less than a handful of people (if this information is wrong please let me know and I'll happily update the piece). Such was the strength of the downturn that we can expect some players to continue to suffer even as things improve.

Of course the PR industry still has some way to go to get back to the position it held in the late 90s. But I think on reflection most PR agency heads would now admit that they've learned some great lessons through these last few years and that they are now running much better businesses. If I look at my own businesses (Text 100 and Bite) I know for sure that we have a better list of clients and a better group of consultants to support them. We are also much more aware of the need to stay focused on what the client really needs and not be distracted by the corporate vanity that had started to creep in just before the downturn.

Anyway, as an Englishman I can't wait for the rain clouds to go - I lived under clouds just like these for far too long. But I hope that when they do, the spring-like conditions in the PR industry don't go with them.