Internet: Did anything 'CHANGE' because of it.

Today when I opened my mail, I had a mail from Infomedia Yellow pages, and the first thing that came to my mind was, " Did internet actually CHANGE anything?"

You can see that the stress here is on the word change, why is it, will be explained later in the post.

So let me tell everything from the beginning. First of all, what is Infomedia. Infomedia is an online yellow pages co. They have various listings for different services, for eg. you can find the nearest mall, cab services etc. Nothing unique, right, there are many such services viz. just dial, ask laila, sulekha.

Now let me explain what did I mean when I said CHANGE.

Well what would you say, are the 2 biggest changes happened due to internet. If you asked me an hour before writing the post, I would have said that

1. It has reduced the information asymmetry, which was so dominant in our society that poor became poorer and rich became richer, and
2. It removed the middlemen, the person who ate a big chunk of your profit and made things dearer for your customer.

But did it really happen, if you are saying yes, than think again. Which is the website you visit the most or which others visit the most. Is it your mail, your blog, your picture and video sharing website. I don't think so, according to me the most visited website on world wide web is Google.com. And it is a search engine. So how is Google being the search engine is related to the two problems.

Well, if you look again you will find that on one hand Google is helping people to reduce information asymmetry but on the other hand it itself is becoming rich and richer day by day because it has the highest amount of information, so who is becoming poor? Those who are paying Google and other such search engines for listing their product and services.

Also, in this whole process of people searching things and products on these search engines, don't these search engines work as a middlemen. They do and they still charge a heavy amount for it, the only thing that has been MODIFIED and not CHANGED is that earlier the middlemen use to earn without giving information but now they earn by giving it.

Hence we can see that nothing has CHANGED here, it is the same as it was in pre-internet era. But why talk about it, yes it has happened and we can't change it, we are so ADDICTED to search engines and yellow pages that whenever we need anything we simply go to a search engine.

Well it is simple, those who thought that the time of middlemen is over because of internet wake up, the middlemen is still here and he is more powerful than ever before. So why lose the opportunity, information is the new power and if you have it, being a middlemen can be the best profession one can ever have.

Celebrity Endorsements

Today, while reading Warren Buffett's letters to his shareholders, the first thing that struck my mind was the characteristics of a celebrity endorser.

Read the letters @ http://www.berkshirehathaway.com/letters/2009ltr.pdf

Who would be a better endorser than the CEO of the company himself. He is the most credible person in the company. He has highest knowledge about the company's products and knows the needs that those products fulfill.

Now this brings us to the question, that if such a celebrity is already present than why do companies go for actors and players.

Well, there can be many reasons, but the two most important reasons I can think of are:

Product characteristics and Awareness in general public.

By product characteristic I mean that, if you want Celebrity for a sport shoe ad, it will definitely be a sport person and not a fat CEO. Similarly for a beauty product it would be a good looking model and not a person with big, fat glasses.

Another important point here is awareness in public, this is important because we believe only them whom we know. If we don't know someone how can we believe him, what will be the basis of credibility.

But, the second problem can be solved; by giving more and better exposure to the CEO a company's PR department can have a potent tool. This can be done in many ways, depending on the business again and this will increase the credibility of business as a whole which might positively effect the perception towards products.

Its not a completely new idea. Many CEOs are doing it, unknowingly though.

For eg. can't a person say that Kingfisher's products will fall in premium category just by knowing about Vijay Mallya or Virgin's products will attract the younger audiences by knowing about Richard Branson. Or can't people just invest in the stocks Warren Buffet invests in, they can and they do.

But still there are only very few examples, the reason being, CEOs are infamous for filling their pockets and leaving shareholders and customers empty handed.

This is perfectly described in the famous joke :

there were 3 CEOs in a plane. To test them, they were told that the engine in this plane was made by their company. 2 of them immediately got down out of fear, but one didn't. When he was appreciated about his confidence in his company's products, he said: Well, yes I have full confidence in my company's products, I knew if it was from my company, it would never have started.

So, if companies are able to develop trust in public for their CEOs, they can be an effective and efficient tool to not only attract customers but also shareholders.