Monday, June 25, 2012

This will be big news by tomorrow...

This will likely seem like old news by the time you get to read the story on my blog but the story that has come out tonight on the Wall Street Journal's website regarding Apple users and Orbitz is going to be a big story.

"Orbitz executives confirmed that the company is experimenting with showing different hotel offers to Mac and PC visitors, but said the company isn't showing the same room to different users at different prices. They also pointed out that users can opt to rank results by price.

Orbitz found Mac users on average spend $20 to $30 more a night on hotels than their PC counterparts, a significant margin given the site's average nightly hotel booking is around $100, chief scientist Wai Gen Yee said. Mac users are 40% more likely to book a four- or five-star hotel than PC users, Mr. Yee said, and when Mac and PC users book the same hotel, Mac users tend to stay in more expensive rooms.

"We had the intuition, and we were able to confirm it based on the data," Orbitz Chief Technology Officer Roger Liew said."

So, to translate if you surf to Orbitz from an Apple product, Orbitz believes you are more brand conscious and less price sensitive so you should see a different set of rooms and some times a different price.  For a little offline perspective that's like checking a woman's purse before she pays and saying "Oh, I see you're carrying Chanel today.  That $89 chair is on sale today for you at just $119."

There will be two quick impacts: 1) Orbitz will have to abandon this plan in my opinion and 2) Apple is going to have to do some fast damage control to convince their legions of followers that they are not going to get overcharged at Amazon or any other etailer.

Companies are just beginning to grasp the power of the data you are sharing with them.  This is the future of commerce with individualized pricing.  Yikes.

Well, the market has shown signs of life at times in the past week or so, but every step forward is met with multiple steps backward.  Europe remains a trouble spot (Moody's downgrade of Spanish banks certainly won't help matters) but the focus on a slowdown in North America has become a hot button issue as well. 

There are a couple of catalysts in the near-term that could help the markets:

1) The Facebook quiet period is about the end which means lots of banks that sold stock to the public at $38 are going to have to formulate an opinion with the stock trading at $32.  Hmmm, if they thought you should buy the IPO at $38 what do you think they'll say with the stock at $32?  If you guessed "buy, buy, buy....." you'd be in the right ballpark (again, that's not my opinion, but that will likely be the banker's opinion).

2) The quarter end is upon us.  Last year as people realigned their portfolios at the end of June stocks surged nearly 5% on little news in 3-4 days.  There are many major pension funds that are sitting on flat 2011-2012 performance right now.  A little 5% run would soften the blow of those "dear pension plan participant" letters.


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