This development should be a concern for Google but in no ways spells doom for the on-line search giant. Market share comes and goes, and this is not a unique event. We all remember the huge splash MySpace made in early 2000 with all the pundits heralding this social networking site. As MySpace grew in popularity, near 100 million unique visits, Rupert Murdoch purchased the on-line site for $580 million dollars. With this acquisition MySpace was supposedly positioned to dominate the on-line experience for businesses and consumers. But MySpace never was able to leverage all the assets of its parent company, News Corp. Digital Media and lost the momentum it had gained in the early 2000s. MySpace shares some of the some problems that Facebook has or is currently experiencing, poor site lay-out (information architecture), inadequate on-line security and lack of content.

The public is fickle and what is a hit today is a failure tomorrow and while Facebook has on-line user numbers far greater than MySpace it still must find a way to keep the attention of its users while producing a revenue model that does not offend its users. The jury is still out on if Facebook’s management can find this balance and not face user abandonment over the next 5 years. Facebook must greatly improve their software code development and overall IT security (even Mark Zuckerberg’s account was hacked) and find other revenue streams that do not bombard their users with endless advertisements. Revenue producing ideas could include partnerships with Smartphone manufacturers, on-line payment processing like PayPal, service provider for travel services and Email and storage.

Google on the other hand continues to build their on-line search brand by providing their customers with even faster results but has expanded its business revenue model to include the hugely successful Google phone (Android), creation of a Linux based operating system called Google Chrome, Google TV and the purchase of AdMobs a leading on-line mobile advertising company. Google is also planning to enter the hospitality business by purchasing ITA Software, a business that provides travel related information to various web sites and search engines such as Yahoo and Bing. The $700 million acquisition is pending regulatory approval. Travel is one of the world’s top “keywords” and with this purchase Google will now be providing content in a major way.

In conclusion Facebook has a long way to go to catch Google and prove that they can sustain their current success. But if their management can develop a long term revenue model; it has a real chance to be a dominate on-line business. And with a 600 million users everyone is looking to see what Mark Zuckerberg and his management team will do next.

David L. Hughes is President & CEO of DL Hughes Consulting a leading Technology and Internet Consulting firm located in Nashville, TN. David has over 25 years experience in Business Development, Public Accounting and Information Technology. David can be reached atdavid@dlhughesconsulting.com

The site’s architecture was often maligned by so-called experts but users saw past the crowded front page and concluded that they liked the content. The Post’s charming founder, Ms. Huffington, persuaded many of her celebrity friends like Walter Cronkite to blog free of charge. In essence the Post created an incredible business model that operated at a low cost due to free content development and low infrastructure costs. One of those so-called experts, a NYU Journalism professors, commented that “Barry Diller doesn’t have time to hunt down juicy links for his readers.” As we all know Backlinks as known as juicy links is a must in order to drive traffic to one’s website. This is exactly what the executives at Huffington Post understood; web linking and being linked to other sites creates on-line visibility and drives internet traffic (in this case to the tune of 25 million visitors per month).

The AOL/Huffington Post marriage will allow the Post to access and leverage previously unavailable resources. In turn this should accelerate an already profitable operation and drive advertising revenue to new heights. It’s a $315 million dollar gamble but if AOL/Huffington Post stick with the ABCs of the internet they are well positioned to assume a leadership role in what is being discussed on the information highway.

In its ruling the NLRB concluded that AMRC went too far in prohibiting the private use of the internet to discuss employment/workplace issues. The company’s policy clearly interfered with longstanding case law that established legal protections on what is free speech and its relation to the workplace. It should also be noted that this does not allow employees free rein to discuss anything that they want to on social media. Discretion must be exercised and balance be established between employers and employees regarding the use of the internet (social media).

As a result of this ruling DL Hughes Consulting recommends:

• Examine all Internet usage policies and procedures with Legal counsel
• Seek input from employees and incorporate their thoughts in any final work product
• Established revised rules and clearly communicate to all levels
• Do not delay in re-establishing policies to be in compliance and avoid costly lawsuits

So what is driving these operational changes? The current depressed economy (from 2008 through present) plays a role but my guess is also the Internet. Through its on-line retail stores Penny’s saw a dramatic increase in theird 2010 holiday sales. As they strategize for the future, Pennys sees an even larger role for internet sales in the future. The surge in Penny’s on-line sales started its ramp-up in 2008 and continues to enhance the profitability of the firm’s operation. As their physical stores and the bricks and click site becomes more intertwined, the Internet has become a cost effective way to provide their customers more product, more shopping convenience and of course better profit margins.

Penney’s online success reflects a broader trend among traditional retailers: using the Net not only as a place to make a sale but also as a tool to lure shoppers to stores. Penney led the way, though, in encouraging cooperation between its Web site and its stores. “Most retailers fought territorial battles as the Internet started to eat into store sales,” says Jim Okamura, senior partner at J.C. Williams Group. “Penney embraced the Internet from the outset.”

So why are retailers flocking in droves to create e-commerce? The obvious answer is it is an easy way to distribute product in a cost effective manner without having to invest in all the capital start-up costs that are involved in a store front build-out. Additionally more companies are eschewing the traditional advertising (television) and taking product launches straight to the internet via virtual stores and social media like Facebook and YouTube. Companies like Pizza Hut and Pepsi Cola are not purchasing TV time for this year’s Super Bowl but instead are concentrating on fully implementing their digital strategies. I am not suggesting that television advertising is going away anytime soon but more and more individuals are choosing to turn off their TVs and log-on to their computers or Smartphones. In what was a surprise NY Times survey revealed that the fasting growing segment of users on-line were Senior citizens (65+), and with the 2009 global internet usage at 24.7% the growth opportunities are truly amazing.

The Internet is quickly becoming the new bricks and mortar store for retailers small and large. If you are considering building an on-line store DL Hughes Consulting recommends:

• Carefully consider both your Infrastructure and Application platforms to ensure web services and technology security
• Create “trusted” sites by purchasing SSL certificates from reputable organizations such as VeriSign or Better Business Bureau
• Design e-commerce site that is easy for users to navigate, find information and quickly purchase product (Do not violate the 3 click rule)
• Make returns easy and hassle free by offering in-store returns
• Learn to Blog and attract customers by NOT talking about your store
• Get Social and be innovate (delivering value to your customers not email spam)

David L. Hughes is President & CEO of DL Hughes Consulting a leading Technology and Internet Consulting firm located in Nashville, TN. David has over 25 years experience in Public Accounting and Information Technology. David can be reached at david@dlhughesconsulting.com