Facebook Sued Over Privacy Concerns…and Maybe More

Facebook Sued Over Privacy Concerns…and Maybe More
Mashable Raises $13 Million, Its First Ever Outside Investment
5 Business Structures: Find the Right One for Your Small Business
Postage Rates Go Up Jan. 26: Stamps, Bulk Mail, Packages
How to Manage Offline Versus Online Leads

Posted: 08 Jan 2014 04:00 PM PST

It’s not the first time and it probably won’t be the last. Social media giant Facebook has been named in another class action suit for its oft criticized treatment of user data.

This part of the story may not be all that surprising. Concerns about online privacy, especially where social media is concerned, are old news.

So the question becomes, why has there been so much buzz over the latest case? Well, ultimately it may be because Facebook is again really being sued over its business model.

After all, there are lots of businesses these days that use customer data…including small ones. And in the end, that’s what the suit filed on behalf of about 160 plaintiffs really boils down to.

Facebook Suit Focuses on Company’s Data Use

Specifically, Facebook is accused of violating California privacy laws and the Electronic Communication Privacy Act. The suit says the company scanned users’ private messages. It then sold information it collected to advertisers and data aggregators, reports AdWeek and other news sources.

Though the fact that Facebook and other businesses use customer data isn’t that surprising, the amount of data used and the disclosure to customers is the real issue here.

In a recent post on LinkedIn, Bernard Marr, an enterprise performance expert from the UK observes:

“In principle, there is nothing wrong with Facebook using our data to make commercial gains. In the end, the service is free and Facebook has to make money somehow. However, my biggest concern is that the data mining activities are not as transparent as they should be.”

In another class action suit filed last year, Facebook was accused of sharing members’ “likes” on sponsored posts without their permission. The company ultimately settled in that case.

Many Companies Use Customer Data

Certainly many companies today large and small use customer data. What’s important is for these businesses to think carefully about how they are using this data, and to be aware of the risks.

For example, Pam Nelson, co-owner of Butter Lane, which operates two specialties bakeries in New York, says her business tracks customers by their credit card number to separate first time and repeat customers. More recently, the company has begun tracking more detailed data using a new customer loyalty program.

Nelson says that by signing up for the program, customers are allowing the business to track them by name with each credit card transaction.

Customers are then given cash back or other rewards depending upon the amount of money they spend. The program allows Butter Lane to cater to their best customers, reward their patronage and encourage them to spend more.

Consider How You Use Customer Data

Of course, it’s important to seek legal counsel when determining whether your use of customer data fits the rules. But there are some things to consider in the meantime:

Consider whether you have customer consent. In the case of Butter Lane, customers are asked to provide their names so that their buying behavior can be tracked and rewarded.
Consider whether you’ve been transparent. As Marr points out, the greatest concern in the most recent Facebook case is whether users were made aware that data from their private messages would be shared.
Consider whether the data you are collecting is aggregate or personal. Data that follows customer behavior as opposed to data that identifies customers individually is very different, Tom Lefroy, chief executive of the U.K.-based Advertising Association told the Financial Times recently. Are your customers more comfortable with you using one than the other?

Bottom line: The answers to these questions will not guarantee whether your company is safe in its use of customer data in the rapidly changing digital economy. But it may get you thinking about the risks you face and how to minimize them in the future.

Dislike Concept Photo via Shutterstock

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Mashable Raises $13 Million, Its First Ever Outside Investment

Posted: 08 Jan 2014 01:30 PM PST

We’ve all heard of huge investments and acquisitions in the world of tech startups.

Last year alone saw Yahoo’s $1 billion acquisition of publishing platform Tumblr. And there was also news of accounting software company Xero raising $150 million in capital for further expansion.

In fact, we even saw some failed attempts like Facebook’s two unsuccessful attempts to acquire photo sharing app Snapchat. (Perhaps they wouldn’t have been so eager had they known something like this was brewing.)

Anyway, many small business owners online don’t happen to be developing the next great iPhone app. Instead, a blog or other website with unique niche news or other content is more likely to be their product.

And though big investments and acquisitions in the world of independent news brands may be somewhat unsung, it turns out they are no less prevalent.

Business Insider, Huff Po Show News Brand Value

In fact, big investments and acquisitions in the world of independent news brands is kind of old news. Remember when Amazon CEO Jeff Brazos’ personal investment firm Brazos Explorations led a $5 million round of funding for Business Insider last year?

It turns out as recently as late 2013, AOL had offered to pay between 100 and 150 million for the business news site. But talks eventually broke down over price, Fox News reports.

And, of course, most memorable of all might be AOL’s other big news acquisition. In 2011, the online media giant acquired the Huffington Post for what then seemed a hefty $315 million.

Though AOL’s other investments, most notably its group of local news sites known collectively as Patch, have not fared nearly as well.

Lessons to Take From Mashable Success

So it should be no surprise to learn that Mashable has raised $13 million in private equity funding — even if its the first funding the news site has received in its near decade of existence.

CNN News says investors include Updata Partners, New Markets Venture Partners, Social Starts, Buddy Media Co-Founders Michael and Kass Lazerow, Iglo Group Chief Executive Elio Leoni Sceti, and Havas global CEO David Jones.

There are some simple lessons other independent news brands can take from Mashable’s success:

News Sites Can Wait Longer for Investment

Mashable CEO Pete Cashmore founded the company at age 19 as a blog he ran from his home in Aberdeen, Scotland. From there it has survived and thrived into a news site that now claims to receive 30 million unique visitors per day.

With the digital publishing tools available now, independent news publishers need little more than unique content to start them out. So money for expansion can wait until later.

Growth Comes From Broadening and Deepening Coverage

Mashable started as a blog about technology and matured into a news site dedicated to the social media space. But since then, its coverage has expanded to include business, entertainment and other subjects. While early coverage was largely regurgitation of material already on the Web, the company continues to do more original reporting.

Hiring additional editorial talent like Jim Roberts, a veteran of both The New York Times and Reuters, shows a commitment to more of the same.

Technology is Used to Improve Experience

Certainly most online publishers can start today with very little investment using available tools. But that doesn’t mean independent news sites should ignore investing in new tech solutions.

At a social media summit, Cashmore observed that the greatest challenge faced by online publishers was lack of control over reader experience. (Is your reader coming to your site using an iPad or Kindle tablet? What difference does this make in his or her experience?) To address the issue, Mashable has built products like its Google Glass app. The company also has a special products division aimed at creating technology to help readers consume its content in a variety of ways.

See the video of Cashmore and Mashable CEO, Robyn Peterson, at Internet Week New York 2013:

Bottom line: Mashable shows independent news brands may require a more gradual, long-term growth plan than some other tech businesses, but investments are low to start and rewards can be significant.

Image: Wikipedia

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5 Business Structures: Find the Right One for Your Small Business

Posted: 08 Jan 2014 11:00 AM PST

common business structures

If you're getting started in your business ventures, one of the first things you might be thinking about is how to structure your business. Will you be going solo or will you form a partnership?

5 Common Business Structures

1. Sole Proprietorship

A sole proprietorship is the most basic – and easiest – type of business to establish. There's no distinction between the business and you, the owner. You're entitled to all profits and are responsible for all your business's debts, losses and liabilities.

You don't have to take any formal action to form a sole proprietorship, but you do need to obtain any necessary licenses and permits, like all businesses.

2. Partnership

A partnership is a single business where two or more people share ownership. Each partner contributes to all aspects of the business, including money, property, labor or skill. In return, each partner shares in the profits and losses of the business.

Because partnerships involve more than one person in the decision making process, it's important to discuss a wide variety of issues up front and develop a legal partnership agreement. They're not legally required, but they're encouraged so that you know from the beginning how you'll make future business decisions.

3. Corporation

A corporation (sometimes referred to as a C Corporation) is an independent legal entity owned by shareholders. This means that the corporation itself – not the shareholders who own it – is held legally liable for the actions and debts the business incurs.

Corporations are more complex than other business structures because they tend to have costly administrative fees and complex tax and legal requirements. Because of these issues, corporations are generally suggested for established, larger companies with multiple employees.

4. Limited Liability Company (LLC)

A limited liability company (LLC) is a hybrid type of legal structure that provides the limited liability features of a corporation and the tax efficiencies and operational flexibility of a partnership.

The “owners” of an LLC are referred to as “members.” Depending on the state, the members can be a single individual (one owner), two or more individuals, corporations or other LLCs.

Unlike shareholders in a corporation, LLCs aren't taxed as a separate business entity. Instead, all profits and losses are passed through the business to each member of the LLC. LLC members report profits and losses on their personal federal tax returns, just like the owners of a partnership would.

5. Cooperative

A cooperative is a business or organization owned by and operated for the benefit of those using its services. They're common in healthcare, retail, agriculture, art and restaurant industries. Profits and earnings generated by the cooperative are distributed among the members, also known as user-owners.

Typically, an elected board of directors and officers run the cooperative while regular members have voting power to control the direction of the cooperative. Members can become part of the cooperative by purchasing shares, though the amount of shares they hold does not affect the weight of their vote.

So now that you've got the basics about business structure, which one is right for your small business?

If you're looking for some additional guidance, consider reaching out to a mentor who can help you decide what may be best for you.

Business Structures Photo via Shutterstock

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Postage Rates Go Up Jan. 26: Stamps, Bulk Mail, Packages

Posted: 08 Jan 2014 08:00 AM PST

USPS postage rates 2014

The U.S. Postal Service will be charging higher postage rates effective later this month, starting Jan. 26, 2014. Following is a summary of some of the increases likely to affect small businesses.

Letters and Postcards

Regular 1st class letter stamps, such as the Forever stamp, will increase from 46 to 49 cents. A single stamp covers a one ounce letter (typically 4 to 5 sheets of paper plus an envelope).
Additional ounces will cost a penny more, at 21 cents each.
Postcard rates also go up a penny, to 34 cents.
Bulk mail rates and the cost of mailing periodicals such as magazines, will go up by 6%.

Packages

Packages will see a number of increases:

First class package rate (used for domestic mail up to 13 ounces) goes up an average of 5%. For instance, there’s a flat rate for the first 3 ounce, and it goes up 24 cents, to $1.93.
Media mail rate (used for books, DVDs and CDs) goes up an average of 6.3%.
Most flat rate Priority remains the same. Exceptions are the small flat rate box which goes up 10 cents, and the large flat rate box, which goes up 50 cents.
Priority Express (formerly called Express mail) will increase on average 3%. There will also be a new option for 10:30 am delivery, costing an extra $5 — so if it absolutely must get there by the morning, you now have this option as long as you are willing to pay extra.

In a few sizes, Priority Express package rates and Priority Regional box rates may actually go down slightly. But taken as a whole, the rates are increasing.

The rates for packages are complex. Stamps.com has a good series of charts showing various increases and decreases.

Back in September the Postal Service requested the rate hikes as “exigent” (emergency) increases needed to make up for losses due to the Great Recession of 2008-2009. The Postal Regulatory Commission, which has oversight, approved the changes in a 2 to 1 split decision, but refused to make them permanent. However, it’s not clear how long “temporary” will be.

The US Postal Service website as of this writing is not yet showing the new postage rates for 2014. Any mailings up through January 25th will be at the old rates.

What can you do to save money on 2014 postage?

Many small businesses have already moved toward electronic communications. Electronic invoicing, direct payroll deposit, electronic bill payment, email marketing instead of printed mailers, and other techniques cut down on paper and attendant postage costs.

But electronic is not always feasible. Here are a few other techniques to consider, in order to guard your bottom line. While not always big savings, they may help a bit:

Stock up on Forever stamps, if you mostly do onesy-twosy mailings. The Forever stamp will be good for a 1st class letter, no matter what you paid for it or when you use it. Example: if you purchased 5,000 Forever stamps before the rate hike kicks in (at a cost of $2,450) you’d save $150.
Use a postage meter or online postage. The changes include a new category, called the “First-Class Meter.” You get a one-cent discount off the single-piece rate for all First-Class letters, up to 3.5 ounces. That equates to a 2% savings. But you must use a postage meter, online postage or a commercial mailing permit.
Adjust your shipping and handling costs to recoup the rate hikes from end customers, if you are an e-commerce seller. Make sure shipping calculators take the increases into account, especially on heavier packages where costs really add up.

Image: USPS

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How to Manage Offline Versus Online Leads

Posted: 08 Jan 2014 05:00 AM PST

It almost doesn’t matter what type of industry you are in today – sales leads typically derive from two very important but vastly different sources. I’m referring to offline leads (non-Internet) and online leads (Internet). While both of these types of leads are vital to the success of business, many companies are managing sales leads in a "one size fits all" manner – and that is not always the best practice.

We already know that search marketing is much different than traditional marketing in that traditional marketing is trying to “grab the attention” of a person and convince them that they cannot live without this product and/or service. Whereas those searching are already in a frame of mind to buy, or at least learn more about a product and/or service.

So wouldn’t it be common sense that the behaviors of offline and online sales leads would be different as well?

The folks at Salesforce have created the following sales leads infographic which looks at this in more detail and provides easy-to-follow directions for managing sales leads of each type.