By Natasha Barr

Google yesterday received a shot in the arm in its attempt to publish text from seven million books when European Union’s media commissioner, Viviane Reding, gave the service her full support.

Google Books has proved controversial for Google from the off. It fought a number of legal battles in 2005 and has been waiting to see its Google Books Settlement Agreement (GBSA) reviewed by the US District Court in New York for over a year, while the US Department of Justice has also opened a separate anti-trust investigation.

In Europe, Germany has made a complaint against Google Books, while The Open Book Alliance has been formed to voice opposition from retailers, publishers and anti-Google sympathisers including Microsoft, Yahoo and The Internet Archive with Amazon reported to be the next to sign-up.

"Google is trying to monopolise the library system," is the argument put forward by The Internet Archive founder Brewster Kahle.

Not so, argues Google, unsurprisingly. It proudly displays the Google Books Settlement Agreement here - but for those of you who’re prepared to take our word for it, the agreement works like this:

Google Books gets the rights to digitalise all copyrighted books in the USA and create The Book Rights Registry. The Registry would allow the publishers that don’t opt out of the Registry to claim 70% of anything bought as a result of the service, with Google retaining the remainder.

Google would also get the rights to publish ‘orphan books’, which are out of print and copyrighted, but where the right holders are unknown or cannot be found. There are many of these books in libraries across the USA, and Google would almost claim exclusivity of their online publishing.

The European Commission is tackling the agreement first and is holding a public hearing on the 7th September, so news that big cheese Reding is likely to give her backing will come as a much-needed boost.

“It is good to see that new business models are evolving which could allow bringing more content to an increasing number of consumers,” she said with a glowing thumbs-up.

And therein lies the crux of the issue: is Google building a monopoly and bullying traditional publishers into submission or is it simply innovating and disrupting a tired, staid market to the advantage of the consumer? And, either way, does Microsoft really need to get involved?

The American review will take place in New York on October 7 and looks set to have huge implications for the future of publishing - but Google will read Reding’s comments as a small battle won, if not the war.
 

Riddle us this, readers: why has a massive proportion of the premises left empty by Woolworths, a chain which had no discernible target market and sold, well, everything, been filled by discount shops – an industry exclusively devoted to having no discernible target market and selling, well, everything?

According to research by commercial property company CBRE, almost 40% of the 800 former Woolworths stores have been taken over by pound shops or discount retailers, which also cater to the ‘three pans, some JML cleaning products and a Barbie doll’ market.

The difference, of course, is branding. Woolworths’ products were all heavily branded – Barbie dolls, the newest DVDs and electronics from well-known manufacturers, whereas a store such as Poundland or 99p Stores sells similar products, but without the branding: think Bessie dolls, DVDs of forgettable series released circa 1987 (Dan Ackroyd in ‘Dragnet’, anyone?) and electronics made by manufacturers no-one has ever heard of.

This policy doesn’t trouble the stores’ customers – for £1, they wouldn’t expect anything else – but does allow the stores to charge rock-bottom prices; whereas Woolworths charged, for example, £14.99 for a DVD. And when you’re in a horrible shop filled with screaming, sugar-filled kids and their equally screaming, sugar-filled mothers, you really don’t want to stick around to browse if it’s going to cost you more than £15.

The moral here? Find your target market’s common denominator – in this case, the target market is, well, everyone, and everyone wants low, low prices – and manage their expectations. No one walks into a pound shop expecting Barbie dolls or the latest Harry Potter DVD, but they do expect low prices. At Woolworths, everyone expected the best products at the lowest prices – which is precisely where it fell down.

Hey there – you with the cocktail sausage. Put that down. And take off that party hat, too, for new figures have shown if you thought all this talk of business confidence and  bullishness meant the recession was over, you were sadly, sadly mistaken.

While ‘experts’ have been harping on about green shoots and ‘recovery’, the boffins at the Office for National Statistics (ONS) have been doing some sums – and, according to figures released today, it turns out things weren’t quite as rosy as we thought: business investment in things like computer equipment and new building projects has actually dropped. Quite a lot. The largest quarterly drop in 24 years, to be exact.

Yes, it turns out businesses haven’t been quite as committed to supporting the economy as they have to whining about how no-one is committed to supporting them, which means, essentially, that investment has dropped by more than 10% and the economy has lost £3.5bn in the last quarter.

The British Chambers of Commerce (BCC) has reacted to the news with characteristic optimism.

“[This] signals serious threats to Britain’s long-term recovery,” chirped its chief economist, David Kern.

“Unless this trend can be reversed, the long-term productive capacity of the economy will be damaged, and the country will lack the necessary capital stock to sustain a recovery, paving the way for a zombie invasion, overthrow of the government, riots, and the eventual downfall of humanity.”

We may have exaggerated his words slightly – but Smarta really thinks it’s time to ease up on the pessimism. It was a recession – obviously businesses were going to spend less.

Let’s all try and raise the BCC out of their miserable little torpor with a song. All together now – ‘always look on the bri-ight side of life...’

Two deals forged in the den this week – and, interestingly, both resulting from an ability to see uses for a product in different markets.

First up is Kay Russell, a horse trainer and breeder by trade, who endearingly gets to the end of her pitch then realises she’s missed the most important bit out – what her product actually is. But no worry – her idea and a hearty laugh soon regain the Dragons’ respect.

Kay has developed a cooling bandage that allows a gentle drop of temperature on an injury and sustains it for two to three hours – after which a patented spray can be used to top up the lowered-temperature effect.

She says she originally put it on sale with the sports market in mind, but, to her surprise, it’s mainly the medical industry that’s buying it up. She wants £100,000 for 20% of her business Physicool. Having achieved a £30,000 turnover in the first quarter of only the third year of the company’s lifespan, as well as meaty contracts in Chile, India, Australia and Poland, the Dragons actually have no quibbles with her financial projections.

What does cause some friction, though, is a late admission from Kay that she has been using the exact same product under completely different branding as part of an entirely separate company. For five or six years, she’s been selling the cooling bandage as Equi-N-icE, catering for injuries to horses' legs.

James Caan doesn’t like this at all, and, with his lower lip protruding just a little, declares it’s unfair he would only be able to invest in one business and not the other. Three other Dragons nod along in a grumbly-murmur way, but Deborah Meaden has a little glimmer in her eye.

She thinks, in fact, it’s completely right to separate the two businesses – after all, who’d want to use a bandage that horses use? Kay says that was exactly her point – plus the fact that the equine market is relatively miniscule, and not many people are into it. Deborah gets this – and, to some furious eyebrow-raising from Peter Jones, makes Kay an offer of all the cash, but for a 30% stake in both business. Kay likes it. Deal done.

After a little interlude in which we mainly learn that half a million is in no way enough to market a new car – the big players, it transpires, put aside about £12m for getting the word out there (always have a realistic marketing budget for your product) – we meet Michael Pritchard.

Micheal comes across as, frankly, pretty smarmy at first: the David Brent of pitching, using half-rhymes and dramatic pauses to illustrate the magical powers of a plastic tube he’s come up with that allows consumers to get every last drop out of their spray bottles. (“A spray... that can be used... any way,” he chimes, somewhat eerily, like an enchanted imp trying to hypnotise you.)

Michael wants a pretty staggering £125,000 for 5% equity, with a plan to charge manufacturers 1p royalty per bottle the tube is used (they can produce it themselves). So far, he’s spent £100,000 on patents in 24 different countries, and after two years still hasn’t received a single one back. He’s approached five companies about using the tube, and has been battling away with them for nine months, but still hasn’t received a single order.

It’s not looking too hot for old wide-eyed Michael. And things don’t exactly warm up when James Caan asks if there is really any need for this product anyway? After all, who really cares if there’s half a millimetre's worth of toilet spray at the bottom of the bottle?

But just as him, Duncan and Deborah have ducked out, and Peter is about to do the same, Michael pulls a little something out of the bag. A pretty large something, actually. His design can also used in spray cans, and means that companies could simply use compressed air rather than flammable and unenvironmentally friendly butane or propane. Resultantly, manufacturers would save four to six pence per can, and councils could vastly reduce the cost of disposing of the waste cans.

Peter and Theo suddenly sit a little more upright – and before we know it, they’ve both offered half the money for 20% of the business each. But Michael, in another shock turn, pushes them even further – he doesn’t want either of them to have more than 7.5%! It’s really hotting up now! The two Dragons bashfully say they’ll go 10% each lowest (just half of their original ask).

Michael accepts. They shake.

Always explore the possibility of your product in every market you can think of, people! It might just be that last one that comes to mind where your real value lies.
 

Microsoft has managed to do even more damage to its already-staid image by causing its very own racism row.

The software company, which has already suffered at the hands of competitor Apple, whose ‘I’m an Apple’ ad campaign poked fun at Microsoft’s dull, corporate image, has been accused of racism after a black man was replaced by a white man in a photograph on the polish version of its website.

Unfortunately for Microsoft, not only did bloggers notice the move almost immediately, but whoever made the alteration also forgot to change the colour of the hand – leaving the white man, whose neck is already sitting at a very odd angle, looking as though he has been subject to an unfortunate incident in a tanning salon. 

Bloggers have been engaged in speculation over the reasons for the move. While some have blamed Poland’s ‘ethnic homogeneity’, others have chosen to see it as something altogether more cerebral: “The white head and black hand actually symbolise interracial harmony,” one blogger has been quoted as saying. “It is supposed to show that a person can be white and black, old and young at the same time."

Microsoft, for its part, has apologised profusely over the episode, promising to investigate who is responsible for what’s happened – but it doesn’t really make any difference. Not only has the company now alienated a huge percentage of its customer base, but it’s taken a dramatic PR hit too – scoring the sort of own goal even the likes of Apple couldn't have hoped for.

Wednesday is, so the research goes, the most depressing day of the week. Deepening this one-in-seven calendar black hole yet further comes more news of job losses, youth unemployment rates, and oversupplied universities which have been forced to close their doors to 13 of the 14 candidates applying for each place they can offer.

But there is a way forward. And entrepreneur and entrepreneurial motivator Oli Barrett teamed up with business-starting encouragers Make Your Mark and the British Library last night to prove it.

‘Passion into Profits’ was all about showing people who had found themselves without job and struggling to find one that, actually, creating a business out of something you truly love can a sensible stop-gap source of income while you find your next employer – it can even become a whole new career. And, often, you end up enjoying it more than anything you’ve done before or would have gone on to do.

Oli wrote on his blog last night: “The thinking behind the event was simply that at a time when thousands are being made redundant or are unable to find their first job, perhaps working for yourself is a good option.”

He was quick to point out, though, that it’s not just as easy as setting up shop with your dream idea and everything falling into place, bringing in millions and you suddenly becoming happier than a Blue Peter presenter surrounded by golden Labradors in a toilet roll factory. There are complications.

“Firstly, when should you turn a passion into a profit, and when should it remain just a passion?  Secondly, at what point does someone who has decided to set up a venture cease to enjoy their activities, precisely because their business has taken off, meaning that they are drawn away from their original passion.  Thirdly, is talk of starting a business in a recession absolute nonsense?”

Expanding on this third question, Oli points to some pretty sound arguments. Firstly, that during economic downturns, consumers want discounts and great deals. Because startups are more nimble and flexible than larger companies, they’re able to offer this while their more established competitors struggle to.

Secondly, with so many people being made redundant, there’s huge pools of fantastic talent out there ready to be sucked up and injected into your team. Oli argues that staff taken on now are likely to be more loyal and focused than in more comfortable economic times.

And, of course, if you start a business now you’re going to be more aware than ever of the need to keep all costs as absolutely micro as possible. Which isn’t as hard as it sounds, since there are lots of great deals out there with landlords and suppliers being forced to drop prices to keep business rolling. “It can’t be too difficult to argue that if a venture can survive in a recession, its prospects in a boom must be rosy,” he adds.

“I look at it this way; our speakers this evening [who have each started their own businesses out of a passion having been made redundant] have multiple customers. Multiple clients. Multiple sources of income. By contrast, even the best paid of corporate employees in the room were reliant on just one cash provider. At a time when talent is waiting to be snapped up by entrepreneurial spirits, problems ready to be solved and customers ready for a change, who are the REAL risk takers now?”

Find out about future ‘Passions into Profits’ events by emailing matthew at makeyourmark dot org dot uk.
 

• Read our feature on turning your passion into a business and the challenges and rewards it can throw up.

It’s August, folks – Parliament is in recess, venture capitalists are all safely ensconced in their South of France retreats, and in newsrooms across the country, journalists are clambering over one another in a desperate search for something – anything – to write about.

It is presumably in this spirit of the silly season, then, that the concept for the Pomegranate NS08, a disarmingly undulating clover-shaped phone which claims to be the ‘ultimate all-in-one device’, going ‘where no phone has gone before’. It includes a projector, a ‘global voice translator’, a coffee brewer, and even a harmonica.

This could have been the most exciting development in mobile telecommunications since, well, the mobile phone, but sadly, it isn’t: rather, the NS08 is just another one of history’s more dubious marketing ploys.

Enticing though the phone seems, once you click on ‘release date’, suddenly, an advert for Canadian province Nova Scotia appears. “Someday you’ll be able to get everything you want in one device,” advises some flying text. “Today you can get everything you want in one place.” Eh? What does that have to do with anything?

We can picture the board meeting now:

“Ok, chaps: Nova Scotia. It’s wet, it’s cold, it’s alarmingly close to the North Pole – what USPs do we have to work with here?”

“Well, sir, none really spring immediately to mind – but it doesn’t really matter, let’s just invent something really cool, market that and make up a really tenuous link to Nova Scotia.”

“Cripes, Grimes – you’re a genius. What fantastic idea. Someone give this man a promotion.”

We can’t help but think some rather lazy marketing has gone into this particular campaign. The fact they have had to invent something to convince people of the value of the product they’re trying to sell rather undermines it, don’t you think? Next time, try harder, Nova Scotia. See us after class.

We’re not sure whether it’s borne from a deep-set fear of swine flu, or the ensuing speculation about how much various drugs manufacturers are making from Tamiflu, or even because in dark economic times everyone starts feeling a bit sorry for themselves and indulges even the faintest flickers of ill-health - but there’s definitely a lot of coverage of the pharmaceuticals industry in the press at the moment.

The latest news is that Lloydspharmacy is going to be rebranding itself as a ‘healthcare provider’. Which means it’s trying to go some way to becoming more like a GP surgery/pharmacy all-in-one.

Patients will be able to consult doctors remotely in-store using newly installed computers – prescriptions will be available for a selection of conditions as a result. The ‘virtual GPs’ are in 300 stores, alongside consultation rooms where patients can also get vaccinations and check-ups.

This is some great innovative thinking from the company. It’s done a good job of capitalising on trends and leading its industry into new waters recently. In September last year, for example, it allowed men to order viagra online after filling out an online questionnaire, realising that many felt too embarrassed to go to their GP about erectile dysfunction – all part of its move to play a more active role in diagnosing and treating problems, rather than just dispensing medication.

It’s an initiative that’s been working, too – sales went up by 7.2% in the three months to the end of March this year.

The innovativeness doesn’t just keep it abreast of competition – which has been increasingly fierce since new regulation in 2005 has allowed supermarkets to sell a wider range of drugs. It also ensures a healthy amount of PR. This latest venture has again attracted national coverage.

It shows that just because there’s a recession on, you should by no means stop innovating and trying to move into new markets. This is probably the best time to do so, in fact – any ground you make will leave competitors who are focusing wholeheartedly on surviving straggling miles behind.

And if you can solve a huge market problem at the same time, you’re onto a real winner. As Lloydpharmacy MD Richard Smith explained in The Times today: “If the Government wants people to take responsibility for their own health, it should be about checking if you have got high blood pressure, checking for diabetes. You should be able to do it in the home. We’re trying to position our pharmacy as a healthcare company that can check you for diabetes, check you for heart disease.”

By making itself the company that spearheads improvements to the whole healthcare system, Lloydspharmacy not only ensures a massive market share – in markets it is itself creating and disrupting – but also does it in a way that hugely boosts the strength of its brand.

Good business thinking indeed.
 

Good news, everyone: Britain is out of recession. Well, sort of.

You see, according to a quarterly survey by the rather pompously-titled Institute of Chartered Accountants in England and Wales (ICAEW), confidence among businesses has shown a record rise this quarter, from -28% to +5%, with 41% of ‘senior business professionals’ saying they are confident about the economic prospects facing them in the next year.

According to this article on the BBC website, the surge ‘suggest[s] the recession is at an end’. But is that actually true? How much can business confidence affect how the economy reacts?

Well, quite a lot. Along with consumer confidence, the collective reactions of business people, who pay close attention to what is going on in their industry, often predict the state of the economy well before anything is confirmed by the numbers.

Business confidence tends to rise or fall in line with the UK’s GDP, although certain industries may be more or less optimistic than others. The property market, for example, still hasn’t recovered from the downturn, while health and education both saw low levels of optimism this quarter due to fears of government spending cuts.

Smarta supposes it all goes to show the power of positive thinking – or at the very least, that there’s safety in numbers. While the UK may not quite be out of the woods yet, the country’s business owners can at the very least afford to have some confidence recession is coming to an end – just as long as their friends think so too.

Monday morning, time for a news round-up thinks Smarta. So off we go to the website of trusted business freesheet City A.M. only to find the scamps have decided to shut up shop and swan off on holiday for a week.

Go to www.cityam.com today or any day until next Tuesday and you’ll be met by the following announcement:

City A.M. on holiday until Tuesday September 1st
Saturday, 22nd August 2009
ANNOUNCEMENT
City A.M.
City A.M. editorial staff are taking a well earned break this week.  The next issue of the newspaper is out on Tuesday September 1st when the online news stories will also be updated ... [read more]

Smarta didn’t bother to ‘read more’ and clicked elsewhere for its updates – as no doubt thousands of other users will over the 11 days City A.M. considers it OK to stop producing content.

Now you’d think, given publishing is in such a state even Rupert Murdoch is searching for new revenue models, the last thing any content producer could afford to do is stop producing content. You’d also think a title that’s rumoured to be increasingly propped-up by spread-betting advertising would be looking to spread its revenue streams a little wider and keep online users switched on not switched off.

Not that Smarta’s own weary band of writers doubts the need for City A.M. editorial’s ‘well earned break’, but surely there’s a cleverer way of managing staff holiday? Does everybody need to down tools at once for an old school manufacturing-style shut down?

Feels a bit archaic and makes you wonder how serious City A.M. really is about having a web audience. I know if I was the marketing manager at Dell or William Hill, the ads currently being served on City A.M.’s homepage, I’d be questioning the wisdom of spending on a site that doesn’t update for over a week.

There’s a broader issue here, of course. City A.M. doesn’t really have an excuse for shutting up shop, but what about all of you running shops, small factories, home businesses, start-ups who simply can’t fathom how to tear yourselves away?

It’s claimed small business owners take on average just 13 days a year holiday and I’d suggest the reality is it’s probably fewer. With business as tough as it is at the moment and when there’s nobody obvious to hold the fort, it can seem impossible to escape even for a few days.

If you’re in that situation, you have our sympathy. For some the solution is trust and letting go. Allowing someone else to share responsibility for opening and locking up, running the books, cashing-up and going to the bank, making orders, chasing invoices etc might seem a huge risk but it could be a massive opportunity as well – not just for a much-needed rest, but to let you focus on growing the business not just being its full-time babysitter.

Whatever you do this summer, our advice would be that you don’t follow City A.M.’s example and simply shut up shop.