Exclusive: Anti-Facebook Social Networking Site Ello Is In Deep Trouble

Ello Sad Logo

Ello, the ad-free social networking site, may not exist for much longer in its current form, The Michael Report has exclusively learned after talking to several people (including investors) familiar with Ello’s current situation and future plans. Launched with great fanfare in August last year after being billed as the “anti-Facebook competitor” by the press, the company has since struggled to stay relevant in the increasingly saturated social network business.

Ello’s entire existence hinges only on one idea: that users are willing to try a completely new social network site in exchange for more privacy and control. With that manifesto, the site went on to raise $435,000 in January last year and a $5.5 million Series A round a few months later, in October. For a while, everything seemed great: the site was getting tens of thousands of requests to join per hour (it is currently in beta and the only way to join is to request an invite).

But that initial hyper-growth stage did not last very long.

These days, the requests for invites have dropped dramatically since Ello’s peak in October last year, and even worse still, the site is suffering from what is commonly referred to as the “Twitter Syndrome” – a user-retention problem.

While Ello may be doubling its user base every few days, internal metrics show that only a tiny percentage (our source pegs this number at 3-8%) of the users who got an invite went back to visit the site regularly, after the initial interaction. Most just never returned. After a week of signing up, only 10-15% of Ello’s members returned, according to people familiar with situation.

Some of the sources we talked to have likened Ello’s fate to what happened with App.net, a doomed social networking site launched by entrepreneur Dalton Caldwell in 2012.

App.net, which promised developers more control over the site by going open-source, was made public at the height of the anti-Twitter sentiment after Twitter announced that it was going to restrict much of the privileges developers have enjoyed since the site’s inception. Many suspected that Twitter did this to fatten their bottom line in preparation for a future IPO, which came in late-November of 2013. But after riding the anti-Twitter wave for a few months, App.net began to realize that growth fueled by hatred for another company wasn’t a viable business model, as its users slowly returned to Twitter. The founders of the site has since announced that the site is no longer in active development, and no new features will be introduced in the future – in other words, it’s dead.

The parallels between Ello and App.net cannot be more obvious: both sites were created as a reaction to other bigger, and much more successful sites’ problems (Facebook’s ads in Ello’s case and Twitter’s developer strategy in App.net’s case) and both sites aren’t exactly better (feature-wise) than the more established sites it’s trying to compete against… at least not good enough to warrant an exodus from the more popular sites.

In short, there’s no way a site like Ello can beat Facebook at its own game. Maybe Ello could have, but at the same time, the company is also almost a decade late into the game so unless it could bring something revolutionary on to the table, it is more or less doomed to fail.

Ello, in light of the gradual decline in user interest, has taken several stop-gap measures, including introducing the ability for users to share music and videos on its feed (a feature Facebook introduced years ago), a “NSFW Month” feature (the company justifies this by saying users shouldn’t have to self-censor on social media just to please advertisers; sources we talked to says this “feature” will eventually devolve Ello into “nothing more than a porn blog”) and the hiring of Chief Marketing Officer Rene Alegira, whose previous stint was leading Mamiverse – a digital platform for Latina mothers and their families.

Beyond these stop-gap measures, however, Ello seems to have a pretty robust plan for the future.

Sources reveal that Ello plans to launch an app store in the near future, where users can purchase more products and features for a small sum of money (think of this as more of like a web version of WeChat/LINE’s mobile app store rather than Apple’s App Store). This app store, we were told, was a huge selling point to investors during its fund raising pitches. Ello also plans to release a mobile app in the next few months and introduce a huge website overhaul, which would take the service out of its current beta stage.

No one knows if these measures will turn around Ello’s fate – and by extension, save its future. But at least the game for Ello isn’t over yet.

“NO! I’m Not Doing That!”: How Steve Jobs Responded When Tim Cook Offered His Liver To Save Jobs’ Life

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By late-2008, Steve Jobs was so sick that he had stopped coming into office to supervise Apple’s day-to-day operations. The then-Apple CEO could hardly get out of his bed every morning, due to a medical condition called ascites – a gastroenterological side effect of cancer that caused his belly to swell.

The situation was dire, and it was getting worse by the minute.

The few who got to saw Jobs described him as “sick, gaunt [and] frail.”

As months passed, Jobs’ need to have a liver transplant became more and more urgent… until someone unexpected appeared at the door, offering his liver to save Jobs’ life: his future successor, Tim Cook.

Veteran technology reporter Brent Schlender and Rick Tetzeli chronicled this intense episode that occurred just a few short years before Jobs’ eventual death in their new book, Becoming Steve Jobs (available on March 24, via Fast Company):

One afternoon, Cook left the house feeling so upset that he had his own blood tested. He found out that he, like Steve, had a rare blood type, and guessed that it might be the same. He started doing research, and learned that it is possible to transfer a portion of a living person’s liver to someone in need of a transplant. About 6,000 living-donor transplants are performed every year in the United States, and the rate of success for both donor and recipient is high. The liver is a regenerative organ. The portion transplanted into the recipient will grow to a functional size, and the portion of the liver that the donor gives up will also grow back.

After going through a series of tests to determine whether a partial transplant was even feasible—it was—he stopped by Jobs’s home in Palo Alto to tell him the good news; Jobs refused. “He cut me off at the legs, almost before the words were out of my mouth,” said Cook. “‘No,’ he said. ‘I’ll never let you do that. I’ll never do that.'”

“Somebody that’s selfish,” Cook continues, “doesn’t reply like that. I mean, here’s a guy, he’s dying, he’s very close to death because of his liver issue, and here’s someone healthy offering a way out. I said, ‘Steve, I’m perfectly healthy, I’ve been checked out. Here’s the medical report. I can do this and I’m not putting myself at risk, I’ll be fine.’ And he doesn’t think about it. It was not, ‘Are you sure you want to do this?’ It was not, ‘I’ll think about it.’ It was not, ‘Oh, the condition I’m in . . .’ It was, ‘No, I’m not doing that!’ He kind of popped up in bed and said that. And this was during a time when things were just terrible. Steve only yelled at me four or five times during the 13 years I knew him, and this was one of them.”

Jobs would later on travel to Memphis, Tennessee to receive his liver transplant which extended his life for two-and-a-half years, according to Walter Isaacson’s biography on Steve Jobs.

Becoming Steve Jobs has received glowing reviews from Apple critics, with well-known Apple blogger John Gruber calling it “the book about Steve Jobs that the world deserves.”

What China Means For The Gold Apple Watch, In One Word: Everything

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Yesterday, we said not to focus too much on the gold Apple Watch (officially called the “Collection Edition”) the company is due to announce in a couple of hours for one main reason: you most probably can’t afford it. Instead, Apple wants you to focus on the other (more affordable) editions, so that even if the company can’t sell you its most expensive toy, it can still sell you something.

The truth is, the gold Apple Watch’s target market is not – and never will be –  the United States.

It is China.

Many people have expressed skepticism that Apple might charge $10,000 for a product that is made in, of all places, China. The audacity!

But a HSBC analyst The Michael Report talked to earlier today said something very different: Apple is making the gold Apple Watch in China precisely because the company knows that China is where most of their gold Watches are going to be sold.

While we may scoff at the pricing of the gold Watch, many in China can’t wait for it: the gold Watch, when released will be the ultimate symbol of status in China.

China is a country crazy for anything Apple made, and the statistics prove it: Apple hasn’t been in China for more than half a decade, yet money that comes from Greater China accounts for 22% of the company’s overall revenues.

For a company that makes as much revenue as Apple does every year, that’s virtually unprecedented.

The “new money” in China (those who make their money from the property boom and stocks) is the perfect target market for the gold Apple Watch: they’re known to flaunt their wealth, love Apple products, but hate accessories that may lump them in the same group as the “old money” (i.e., gold Rolexes).

Apple, regardless of what we think of the gold Watch’s pricing, will have absolutely no problem selling them in China. In fact, that might be one of the more important reasons why the Apple Watch is made in China, and not anywhere else – to be as close as possible to the potential customer base.

Here’s another interesting point the HSBC analyst we spoke to brought up: when the Apple Watches are finally released in China (assuming that it gets released into China the same time it does into the U.S. market), there will be so many people clamoring for it that there will be a supply shortage. Whoever gets to have an Apple Watch in the first wave of supplies will (most likely) put it on the black market to make some quick profits… but that’s not where it ends. Not in China. Those who get the Watches from the black market will either use it for themselves… or give it away as bribes.

Giving an Apple Watch away when no one around you has got one is a very powerful and symbolic act, according to the analyst: it shows deep respect (“you’re more important than me, I can wait”) and gratitude (“you and I both know how hard I have to work to get this Watch because it’s not available anywhere”).

So, at the end of the day, it doesn’t matter if the average Joe in America hates the gold Apple Watch – it was never meant for them anyway.


This Is The Real Reason Why Apple Doesn’t Want You To Focus On The Gold Watch’s Pricing

The Michael Report Apple Watch Cost

This coming Monday, March the 9th, Apple is expected to reveal more information about the Apple Watch in their “Spring Forward” event. The Michael Report previously reported that Apple also plans to unveil the long-awaited Retina MacBook Air at the same event after talking to multiple sources… but if you’re more interested in the Apple Watch bit, then you’re in luck!

To be sure, no one who isn’t working for Apple currently knows how much the Apple Watches will retail for… but we now know enough to make come up with a couple (educated) predictions.

There’s one thing we know for sure right now: the cheapest Apple Watch, from the Sports Collection, will cost $349. The Sports Collection is meant to be the mass-market version of the Apple Watch – it will feature the same software as the most expensive Edition Collection Watches, but it will come at a very accessible price point. The reason for this is obvious: with the Apple Watch, it’s easier than ever to see who is rich and who is poor – what color are their Watches?

The only thing that unifies all the Watches together is the software – this means that people who decide choose the cheaper Watches will get the same experience as those who could afford the more expensive versions.

So if the Apple Watch Sports Collection starts at $349… how much will the rest cost?

Read the entire story…

EXCLUSIVE: Apple To Unveil The Long-Awaited Retina MacBook Air At Its “Spring Forward” Event

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Last week, Apple sent out the invites for its “Spring Forward” event, slated to be held at the Yerba Buena Center for the Arts in San Francisco on March 9th.

Many are expecting Apple talk more about the Apple Watch. However, sources familiar with the matter within Apple have exclusively told The Michael Report that Apple plans to unveil the long-awaited Retina MacBook Air at the same event. The Michael Report has independently verified this information to be highly credible.

We should note that this information falls in line with what Apple analysts such as KGI Securities’ Ming-Chi Kuo and Oppenheimer’s Andrew Uerkwitz have been predicting for months. Supply chain sources who spoke to the press have also said that Apple ramped up their production in late 2014 and entered the mass production stage in December, with the goal of producing enough units for an early-2015 debut.

Apple’s MacBook Air line, which got upgraded in April last year (the only real upgrade being a small speed bump), still features a non-Retina screen with the same screen resolution that hasn’t been updated since late 2010. This is a stark contrast from the rest of the Apple computer lineup, which have been steadily upgraded to a Retina (or at least, a version of it is offered) screen since the first Retina MacBook Pro was unveiled in 2012.

The upcoming Retina MacBook Air, if earlier reports are to be believed, will come in an ultra slim design that combines the productivity of the current larger-screened 13-inch MacBook Air with the portability of the 11-inch MacBook Air.

Internally, the new Retina MacBook Air is said to feature Intel’s next-generation Broadwell Core M low-power processors, which would allow Apple to strip the computer of its fan assembly to create an even thinner profile. Other compromises Apple reportedly made in exchange for a thinner and lighter body includes the full-sized USB ports, MagSafe connectors and SD card slots.

The Retina MacBook Air, currently codenamed “MacBook Stealth” internally, will also come with a modest price decrease according to previous reports.

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Here’s How Many Watches Apple Will Sell In 2015…

Yesterday, Fortune asked a bunch of well-known analysts how many Watches they think Apple will sell in 2015. Their responses ranged from 8 million to 41 million, averaging at 2.5 million per month.

apple watch analyst estimates

Interestingly, analysts have gotten more bearish on the sales of the Apple Watch with each passing month. When the same number of analysts (including Morgan Stanley Katy Huberty’s ultra-bullish 60 million figure, which isn’t included in the table above because she hasn’t repeated it since) were surveyed last September, the average came out to be 22.6 million – 130,000 more than yesterday’s estimates.

This presents the inevitable questions: once the hype dies, are people less excited about the Apple Watch?

Did reality – that they might end up paying thousands for a product they’ve never seen a successful version of before – dawn upon them?

And how harmful is that realization for the Apple stock?

Apple is expected to show off the Apple Watches’ most exciting features in next week’s Spring Forward event, along with the apps that will be available at launch.

Bonus: Many Apple observers are freaking out about an Oppenheimer analyst’s decision to boost Apple’s price target from $130 to $155 today. The analyst, Andrew Uerkwitz, reiterated an Outperform rating, citing his bullishness on the Apple Watch.

“The Watch is firstly an efficient extension of the smartphone, second a facilitator of intimate personal communications, and lastly a high margin product that provides substantial revenue and margin upside to AAPL,” Uerkwitz wrote.

The Bill O’Reilly Vacuum

Bill O'Reilly

In the last few weeks, reporters have begun to reluctantly accept a depressing axiom: a war against Bill O’Reilly is a war you can’t win.

In fact, you’ll almost certainly lose.

As reports over the last few weeks that ranged from Fox News anchor Bill O’Reilly exaggerating (in some cases, downright lying) to physically threatening other reporters piled up, the credibility of the anchor hasn’t diminished in the eyes of his audience: just last week, the O’Reilly Factor’s viewership increased by 11% amidst the onslaught of accusations.

True to O’Reilly’s persona, the host did not once apologize for the inaccuracies and threats (which at one point, suggested that David Corn – the same reporter who exposed Romney’s 47% video and who first published the charges against O’Reilly on the Mother Jones magazine – should be placed in the “kill zone”) and instead of offering any sort of defense, went on a full-on offensive strike, often calling reporters insults that belonged in the 1990’s (“far-left guttersnipe”, “zealots”, “smear merchant”).

It should be noted that the charges against O’Reilly aren’t disputable: they were words that O’Reilly wrote and words that O’Reilly spoke himself, and as far as The Michael Report has verified the information, it did not seem to us as though they were taken out of context (intentionally or not).

In other words, the evidence against O’Reilly were solid and indisputable.

But, of course, that’s not what O’Reilly is interested in! O’Reilly is first a performer for his audience, then a journalist.

A journalist would’ve addressed those concerns.

A performer, on the other hand, would ignore the cold, hard facts for the chance to blast the opposition and fire up the fan base… which was exactly what O’Reilly did. And it worked.

However, there’s another factor at work here that made all of this possible: Fox News – and their audience.

Fox News’ audience is unlike that of other cable networks’ in that they see Fox News as their refuge – refuge from the onslaught of liberal propaganda, spewing Obama’s talking points 24/7.

When Mother Jones published those accusations, Fox News’ audience could see the fear they’ve had concocted in their minds play out in reality: the far-left zealots are attacking Bill O’Reilly, one of the very few people who are still telling the truth! In their minds, O’Reilly isn’t the accused – he’s the martyr who had sacrificed his reputation for the greater good of the country.

Fox News knows that kind of audience is indispensable. Whereas Glenn Beck’s conspiracy theories and ramblings cost Fox News their reputation, Bill O’Reilly’s pointed attacks continue to further the brand’s image as the underdog in a world filled with pro-Obama rhetoric. It is so successful that in fact, it has been reported that O’Reilly’s The Factor brings in $100 million in advertising revenues to Fox News’ war chest.

Perhaps the greatest indication that O’Reilly have won this war – and will never have to apologize for his blunders – is the fact that Fox News’ upper-echelons are fully in his support. Officially, this is the statement issued by Fox News when the New York Times asked them to comment on the allegations: “Fox News Chairman and C.E.O. Roger Ailes and all senior management are in full support of Bill O’Reilly.”

Behind the scenes, however, here’s the clearest indication yet that the war is already over… even before the liberal media thought it had begun: in Gabriel Sherman’s book on the founding of Fox News titled The Loudest Voice in the Room, he chronicled the 2004 episode whereby a Fox News associate producer named Andrea Mackris sued Fox News, accusing  O’Reilly of having lurid phone sex with her (the details were quite… interesting).

Fox News founder Roger Ailes and News Corp. CEO Rupert Murdoch were furious at O’Reilly for bringing public humiliation to the company, and ordered him to keep his mouth shut or risk losing his show. O’Reilly kept his mouth shut, and later settled out of court (consequently, employees at Fox News had to undergo workplace sexual harassment training – thanks Bill!). The event quickly ended two weeks later, and O’Reilly’s ratings went up by 30%.

This time around, not only did no one tell O’Reilly to shut up, the entire Fox News executive team also gave O’Reilly their implicit permission to fire at the mainstream media, pedal to the metal with their full support.

The war is over, and O’Reilly has won.

This is the new reality.