January 24, 2022

You’re the Boss Blog: Critiquing a Web Site That Tries to Keep It Simple

Site Insight

What’s wrong with this site?

It sounds easy. Sell your product online. Design it to tempt every visitor into becoming a buyer. Add an easy-to-use self-service interface that lets customers get answers without interacting with a salesclerk. Everything seems to happen magically, and everything goes smoothly, without any issues. There may be businesses that manage to accomplish this, but rarely without a few struggles. In this post, we look at one company, Recruiterbox, and its attempt to attract customers and interact with them seemlessly.

Raj Sheth and his two partners created Recruiterbox to help companies organize their recruiting and hiring processes. An entrepreneur from India, Mr. Sheth understood that at many growing companies, the résumés, interviews and internal feedback live “all over the place,” buried in any number of in-boxes, spreadsheets and side conversations. In 2011, Recruiterbox which is based in Boston and Bangalore and has a team of 12 people, introduced a Web-based tool that automates the entire process. Hiring managers can try the service for free for a single job opening; the fee jumps to $60, $120 or $200 per month for three, six or 10 openings, respectively.

When Recruiterbox was introduced, the company stayed away from outbound marketing like e-mail or telemarketing, opting instead to rely on word-of-mouth, postings to human resources and recruitment blogs and a presence in app stores (like Google Apps). This netted their first 100 or so customers (as well as a few media mentions). Still, attracting visitors to the site was slow, and customer growth, while consistent, remained humble — in the low hundreds at the end of the first year. In 2012, the customer base grew to 500.

Mr. Sheth has found that he can generate traffic by answering media queries on HelpAReporterOut.com and by crafting frequent blog and video posts that address important H.R. issues. He also has found that including a transcript with the videos helps boost Recruiterbox’s organic search rankings on Google.

Still, revenue grew only slightly after a few months, so Mr. Sheth created a paid Google AdWords campaign. While the quality of customers that came through this channel was high, larger competitors drove up the bids for popular keywords. As a result, each click cost from $7 to $15 – making AdWords an expensive customer-acquisition channel. The Recruiterbox team kept a fixed budget on their campaign and tweaked the ads, but the cost per paying customer remained high, as much as $500.

After a year, the team began analyzing customer reactions to the sign-up process and pricing structure, which resulted in the company offering more service options. Recruiterbox now handles start-ups and smaller companies — those with fewer jobs to fill — through a self-service tool. The site has found that most of the companies that try the service end up completing the 14-day free trial and electing to continue with the monthly subscription.

But Recruiterbox wants to help larger companies, too — those looking to fill as many as 50 openings. And that’s the challenge: larger clients that want to fill 10 to 25 jobs are much more likely to require an initial service walk-through over the phone to understand how the software works. That of course is a time-consuming burden for a small company.

So the questions facing Mr. Sheth and Recruiterbox are:

Does it make sense for Recruiterbox to focus more attention on one particular customer segment?

• Would concentrating on self-service customers allow Recruiterbox to stick with its original goals and get more business?

• Is that market — companies with fewer positions to fill — large enough?

• Should Recruiterbox add more inside sales people to attract and retain larger companies or is that splintering the business focus?

Some questions for readers to think about while looking at Recruiterbox.com:

• Is it easy to understand?

• Can you tell what it’s offering within 15 seconds of landing on the site?

• Would you register without contacting customer support?

• What are your thoughts on tiered service fees?

• Do those fees represent the right value for the cost?

Next week, we’ll follow up with highlights from your comments and I’ll offer my own impressions along with Mr. Sheth’s response.

Would you like to have your business’s Web site or mobile app reviewed? This is an opportunity for companies looking for an honest (and free) appraisal of their online presence and marketing efforts.

To be considered, please tell us  about your experiences — why you started your site, what works, what doesn’t and why you would like to have the site reviewed — in an e-mail to youretheboss@abesmarket.com.

Richard Demb is co-founder of Abe’s Market, an online marketplace for natural products that is based in Chicago.

Article source: http://boss.blogs.nytimes.com/2013/02/26/a-web-site-tries-to-keep-it-simple/?partner=rss&emc=rss

Ericsson to Take $1.2 Billion Charge on Writedown of Cellphone Venture

In announcing the charge of 8 billion Swedish kronor, or $1.2 billion, Ericsson told investors Thursday that the charge would reduce its earnings in the fourth quarter by a corresponding 8 billion kronor. Shares of Ericsson fell 1.8 percent to 63.15 kronor in Stockholm trading.

ST-Ericsson, created in February 2009 with ST Microelectronics, a French semiconductor maker, has generated $2.7 billion in losses since its start. On Dec. 10, ST Microelectronics said it intended to “exit” the venture after an unspecified transition period.

Ericsson said it did not plan to buy its French partner’s 50 percent stake in ST-Ericsson — a decision that could cast further doubt on the future of the business, which is based in Geneva and employs 5,090 workers.

Bengt Nordstrom, the chief executive of Northstream, a Stockholm-based industry consultant to mobile operators, said that Ericsson, based in Stockholm, could eventually shut down ST-Ericsson after trying to sell it off wholly or in parts. “That is certainly a possibility,” Mr. Nordstrom said.

At the time the venture was announced in August 2008, the two partners predicted that the new company, which combined Ericsson’s mobile platforms business and ST Microelectronic’s ST-NXP wireless businesses, would become a world leader in supplying chips and components to Samsung, Nokia, Sony Ericsson, LG and Sharp.

But ST-Ericsson, which attempted to exploit the value of both partners’ intellectual property and patents on components for 2G and 3G handsets and modems using Long Term Evolution or LTE technology, has never made a profit as it attempted to woo business from industry leaders in Asia and the U.S. component maker Qualcomm.

“We don’t have the kind of silicon industry in Europe that exists in the United States and Asia so this was always a difficult attempt,” Mr. Nordstrom said.

ST-Ericsson’s prospects also deteriorated, Mr. Nordstrom added, after the chief executive of Nokia, Stephen Elop, announced in February 2011 that Nokia would abandon its Symbian smartphone operating system for Microsoft’s Windows system.

ST-Ericsson had supplied components for Nokia’s Symbian handsets and had been one of the venture’s biggest customers, Mr. Nordstrom said.

One of the early pioneers in the mobile industry, Ericsson, whose researchers contributed essential patents to the GSM and 3G wireless standards, retreated from the handset business to focus on network gear. It remains the global leader but faces a challenge from Huawei, its fast-growing Chinese rival.

Ericsson completed its departure from the handset business last January, when it sold its 50 percent stake in the cellphone maker Sony Ericsson to its venture partner, Sony.

In the third quarter, Ericsson said that its profit plunged 42 percent to 2.2 billion kronor with a 600 million-kronor loss attributable to ST-Ericsson.

Ericsson said Thursday that about 5 billion kronor of the earnings charge reflected Ericsson’s new lower valuation of ST-Ericsson, while the remaining 3 billion kronor would be applied in 2013 to cover continued commitments to ST-Ericsson.

“During the process of exploring options, Ericsson will not speculate on the possible outcomes, timelines, and future strategic alternatives for ST-Ericsson assets,” the company said.

Article source: http://www.nytimes.com/2012/12/21/business/global/ericsson-to-take-1-2-billion-charge-on-writedown-of-cellphone-venture.html?partner=rss&emc=rss

Square Feet: Real Estate Firms Learn to Do Business in China

But developing in China can be fraught with obstacles. In 2005, the Simon Property Group, the largest shopping center owner and operator in the United States, announced with some fanfare that it would begin developing malls with two partners.

Four malls were built in so-called second-tier cities, like Hangzhou, which has 5.5 million people according to its municipal Web site. But in 2009 — before three of the malls had opened — Simon sold its interest and left China. The company told analysts that the cities lacked enough middle-income consumers to make the centers profitable. Simon said it lost $20 million in the venture.

But in October, Simon’s chief executive, David Simon, disclosed that his company was in “serious discussions” about opening outlet centers in China with a joint-venture partner, and would make a decision in a couple of months.

Another major American mall company, Taubman Centers, the developer of the only major mall currently under construction in the United States (City Creek Center in Salt Lake City), is planning a foray into China. Last summer, Taubman bought TCBL, a retail consulting company based in Beijing. Robert S. Taubman, the chief executive, said the company planned to build, acquire and update malls throughout China. “It will be the full spectrum of what we do here,” said Mr. Taubman.

Other well-known names in North American real estate, including Hines Interests of Houston, Tishman Speyer of New York and Ivanhoé Cambridge of Montreal, are developing projects in China, all with Chinese partners.

To gain access to the huge Chinese market, they have had to brave significant language and cultural barriers, nurture close relationships with receptive local partners, and deal with layers of bureaucratic complexity as well as opaque and unpredictable regulatory and legal systems.

“You don’t want to get involved in a legal action because it won’t go anywhere,” said Daniel Winey, a managing principal at Gensler, an international architectural firm with a long track record in China. Gensler was the design architect for the Shanghai Tower, a supersize 121-story office, hotel and retail building now under construction in the architecturally striking Pudong section of Shanghai.

Many private equity investors that flocked to China in 2007, when real estate prices in the United States were soaring, have since left the country.

In China, real estate specialists point out, what gets built depends more on the government’s current goals and policies than on market forces. “It’s such a policy-driven market that you have to time not just the market cycles but also the policy cycles,” said Martin Lamb, the director of Asia Pacific real estate investment for Russell Investments. In recent months, the government has been trying to bring down home prices by tightening credit (though lately this policy appears to be easing). The Chinese have also been encouraging more development of mixed-use communities outside the urban cores and more consumer spending — and developers have been responding accordingly.

Hines, the developer of the Galleria malls in Houston and Dallas, completed the first phase of one mixed-use development — the 45-acre California Place in New Jiangwan Town in Shanghai — before selling its stake last year to two Hong Kong developers. In June, Tishman Speyer, whose properties include Rockefeller Center, began development of the Springs, an even larger project north of Pudong.

Portman Holdings of Atlanta and its partners have nearly finished transforming Jian Ye Li, a cluster of 1930s traditional-style residential buildings in Shanghai, into a mix of luxury apartments and furnished housing for temporary stays. Portman was the designer and one of the developers of China’s first mixed-use development, the 1990 Shanghai Center, where the Portman Ritz-Carlton hotel is located.

Of the commercial property sectors, retail seems to offer the greatest opportunities for foreign investors. American developers have played only a minimal role in the tightening office market in Beijing and Shanghai. Hines developed the new 21st Century Tower, a 49-story office building in Pudong with a Four Seasons Hotel, but sold its stake last year to a Hong Kong company.

Western hotel brands are rapidly adding to their management contracts in China, but few foreign companies are developing or investing in the hotels themselves, said David Ling, in charge of China and Southeast Asia for the consulting company HVS Global Hospitality Services.

But some foreign retail developers are venturing into second- or even third-tier cities — populous places where the modern shopping center is often a novelty. That strategy is not without risks. “There’s not a lot of historical data to do your planning,” said Sanjay Verma, Cushman Wakefield’s chief executive for Asia and the Pacific.

Retailing specialists say local mall developers are not currently seeking foreign capital but can profit from Western expertise in design, merchandising and attracting the right mix of tenants. “Partnering with somebody with experience will help them on leasing and builds up the confidence of the retailer,” said Siu Wing Chu, a senior director at the international brokerage Savills.

Ivanhoé Cambridge, the Canadian firm that developed Mary Brickell Village in downtown Miami, says it has had success in teaming up with the Bailian Group, the Chinese department store chain, to redevelop La Nova, a lackluster 861,000-square-foot shopping center in Changsha, the capital of Hunan Province. Ivanhoé Cambridge made the center more inviting and persuaded its partners to focus on so-called fast fashion.

When the center opened last April, 129,000 people showed up, said Richard Vogel, a senior vice president at Ivanhoé Cambridge. In the first week, shoppers virtually emptied the HM and Zara stores, said Mr. Vogel, who is based in Shanghai. “They had to schedule additional deliveries to keep their shelves filled,” he said.

In 2008, the private equity firm Blackstone bought a vacant shopping mall in Shanghai, called Channel One, and brought in tenants like HM, Zara and Sephora before selling it to a Hong Kong investment company.

“Private equity companies have been net sellers over the past 12 months,” said Chris Brooke, the president and chief executive of CBRE in China. Though Simon blamed the absence of a mature consumer market for its frustrating experiences in China, other retail specialists say the giant mall company encountered other problems that are common there, including a difficult relationship with its state-owned partner. (Simon declined to be interviewed for this article.)

Before joining Russell Investments, Mr. Lamb was in China to develop shopping centers anchored by Walmart stores. Just getting a copier was an exercise in frustration that required three different licenses, he said. “Once we had Chinese employees, one of them said, ‘You should have asked me. My brother would have gotten it for you,’ ” Mr. Lamb said.

In China, he said, a contract is considered more of a guide than a legally binding document “We were always told, ‘If you have a dispute with your tenant, take them out to dinner,’ ” he said.

Despite the potential pitfalls, companies with the breadth of a Simon or a Taubman have the potential to succeed in China, but others may face insurmountable challenges, because China’s fast-growing development companies see no need to share their profits, said Jack Portman, a vice chairman of his family’s company. “If you’re not already there with existing relationships, it’s probably too late,” he said. “Unless you have something special to contribute, they don’t need it.”

Article source: http://feeds.nytimes.com/click.phdo?i=56eb7e7f8e1d46ff90f5cd6a779f36f7

Indian Accounting Firm Is Fined $7.5 Million Over Fraud at Satyam

The S.E.C. and the Public Company Accounting Oversight Board fined the affiliate, PW India, $7.5 million in what was described as the largest American penalty ever against a foreign accounting firm.

The Satyam fraud, which was exposed in early 2009 when the company’s chairman admitted it, stunned India and American investors who had relied upon the company’s statements. The company’s securities traded on the New York Stock Exchange, as well as in Indian markets. Former Satyam officials, as well as two partners in PW India, face criminal charges in a trial under way in India.

The S.E.C. said the auditors had failed to independently confirm cash balances in bank accounts that supposedly rose to over $1 billion by the time the fraud ended. Had the balances been real, they would have accounted for more than half the company’s assets. The company later said that its actual cash balances at the end of September 2008 were $66 million, not the more than $1 billion it claimed.

The auditors, legally part of five separate firms that, together with five others, do business as PW India, did not seek confirmation of cash balances from the banks involved, but instead relied on management to provide them, the S.E.C. said, adding that that was a violation of auditing standards.

“The failures in the confirmation process on the Satyam audit were not limited to that engagement,” the S.E.C. stated in a cease-and-desist order issued against the firm, “but were indicative of a quality control failure throughout PW India.” The commission added that audit “engagement teams throughout PW India routinely relinquished control of the delivery and receipt of cash confirmations to their audit clients and rarely, if ever, questioned the integrity of the confirmation responses they received from the clients.”

In some cases, banks sent confirmations to the audit firm directly — despite not being asked to do so — and those statements differed markedly from the ones the management provided. BNP Paribas advised the auditors that Satyam had a cash balance on March 31, 2007, of $11.2 million, while the company claimed $108.6 million. A year later, Citibank reported $330,172 in its Satyam account, only 2 percent of the $152.9 million Satyam claimed. The audit firm did not follow up on the discrepancies.

“PW India violated its most fundamental duty as a public watchdog by failing to comply with some of the most elementary auditing standards and procedures in conducting the Satyam audits,” said Robert Khuzami, the commission’s director of enforcement.

Although audit firms around the world use similar names and are part of global networks, the firms say they are legally independent. The international networks say they have procedures to assure that their affiliates perform high-quality audits, but those procedures appear to have broken down in this case.

Those procedures include having partners from different firms in the network review audits. While the 2008 audit was being conducted, the S.E.C. said, a partner from a different PwC firm “alerted members of the Satyam engagement team that its cash confirmation procedures appeared substantially deficient,” but the Indian firm did nothing to correct the procedures.

Had the firm done as the foreign partner advised was proper, the commission said, “Satyam’s fraud could have been uncovered in the summer of 2008.”

Satyam is now under new management and continues in business. It agreed to pay a $10 million fine to settle a related S.E.C. case regarding the fraud.

The Public Company Accounting Oversight Board, which licenses and inspects audit firms, was established by the Sarbanes-Oxley Act in 2002 after the Enron and WorldCom scandals. It fined PW India $1.5 million, in addition to the $6 million penalty levied by the S.E.C.

In a statement, PW India said that it had neither admitted nor denied wrongdoing and emphasized that neither of the American regulators “found that PW India or any of its professionals engaged in any intentional wrongdoing or was otherwise involved in the fraud perpetrated by Satyam management.”

The accounting board barred two PW India accountants from taking part in audits of American companies but said it did so because they had refused to cooperate with its investigation.

An official in PwC’s global network, Donald A. McGovern Jr., said that after the Satyam fraud was revealed, the PwC network took steps “to verify that professional standards relating to confirmations were being met” throughout the network. Mr. McGovern, whose title is global assurance leader, said the firm also “instituted an enhanced assurance quality review process for all network firms.”

Article source: http://feeds.nytimes.com/click.phdo?i=094e9f8194af450546ff5bf003bbf0ed

DealBook: Vodafone to Buy Essar Stake in Indian Joint Venture for $5 Billion

Vodafone, the giant British mobile phone company, said on Thursday that it would pay $5 billion in cash for the Essar Group’s one-third stake of an Indian joint venture owned by the two companies.

The deal will increase Vodafone’s exposure to one of its most important and fastest-growing markets.

“We’re adding about 3 million customers a month,” said Ben Padovan, a Vodafone spokesman. “India has a population of 1.2 billion, and penetration is about 60 percent, so there’s a lot of market share to go for.”

The move resolves many months of conflict between the companies, as Essar, a conglomerate with interests in steel, power and shipping, has sought to determine the value of its interest and explored the possibility of an initial public offering for its shares.

This year, the two partners quarreled over Essar’s plans to reverse list its stake in the venture by merging some of its shares into India Securities, already a public company — a deal that Vodafone argued would have inflated the value of its stake.

Vodafone is exercising a call option on 11 percent of the joint venture, and Essar a complementary put for 22 percent of the shares. The transaction is expected to settle by November, but will not affect Vodafone’s recently published net debt figures, the company said.

Vodafone currently has a direct equity interest in 42 percent of the company, and the Essar deal will give it 75 percent, Mr. Padovan said.

The rest is in the hands of entities controlled by Indian parters. Indian regulations prohibit foreign investors from owning more than 74 percent of domestic telecommunications companies, and Vodafone plans to divest about 1.3 percent of its stake to remain within the law.

Vodafone has also been embroiled in a lengthy tax dispute regarding its initial stake in the joint venture, which it acquired in 2007 from the Hong Kong billionaire Li Ka-shing’s Hutchison Telecommunications International.

The case is to come before the Supreme Court of India in July, and could leave the company on the hook for up to $2.5 billion in capital gains, in a deal where, paradoxically, it was the buyer.

Last year in May, Vodafone took a $3.5 billion write-down on the value of its Indian business, which has been battered by fierce competition from rivals like Bharti Airtel and Reliance Communications.

The Indian mobile telecommunications market is the second-largest in the world, after China’s, and one of the fastest growing. But the sector is crowded, with more than a dozen companies vying for customers and driving down prices.

Most countries have between three and four major telecommunications operators, and if Indian law were changed to let rival telecoms to conduct takeovers, the sector might see a wave of consolidation.

A representative for Essar was not immediately available for comment.

Article source: http://dealbook.nytimes.com/2011/03/31/vodafone-to-buy-out-essar-stake-for-5-billion/?partner=rss&emc=rss