Get Ready for Internet Sales Taxes

July 23, 2014July 23, 2014 Phillip Nones Business, Economics, Government, Sales Business, David French, Internet, Internet Tax Freedom Act, Marketplace and Internet Tax Freedom Act, Marketplace Fairness Act, National Retail Federation, Nones, NRF, Retail Industry, sales tax legislation, Taxation

Are sales taxes finally coming to the Internet?

After years of fruitless attempts, it would seem so.

On July 15^th, five senators introduced legislation on a bipartisan basis to make taxation of purchases made over the Internet a reality.

The legislation is called the Marketplace and Internet Tax Freedom Act, and it combines the efforts of two initiatives that had been separate before: The Marketplace Fairness Act and the Internet Tax Freedom Act.

On the one hand, the legislation would keep access to the Internet tax-free by limiting what state and local governments can do to impose Internet access fees – at least for the coming decade.

On the other hand, it gives states the unambiguous ability to enforce their sales tax laws on businesses selling to buyers located within their borders – including if those purchases are made online.

In other words, the 44 states that currently have sales tax laws on their books will be able to collect online sales taxes.

Not surprisingly, the National Retail Federation and other trade groups that represent brick-and-mortar retailing are lauding the actions of the five senators in introducing the legislation.

David French, the NRF’s senior vice president for government relations, noted that it’s high time “for Congress to eliminate the sales tax disparity, which disproportionally impacts community and independent retailers.”

Unlike in prior years when Senate and House lawmakers seemed incapable of coming together in support of sales tax legislation, this time appears different.

Why?

I think part of the reason is the sense that, at the end of the day, it just isn’t fair for offline retailers to shoulder the burden of collecting taxes – along with being at a competitive disadvantage – versus online retailers who benefit from being able to offer lower the same products at a lower overall cost, while also benefiting from lower overhead costs in most cases.

The fact that the current legislative bill is being introduced by senators from across the political spectrum as well as a diverse geography (the Northeast, South and Midwest) — tells me that the legislation will go through — and that the days of tax-free online shopping are numbered.

It will be interesting to see what the ramifications might be if and when the legislation passes. Will 24/7 armchair convenience trump the sudden 5%-7% higher cost to online consumers?

Those consumers can be notoriously price-sensitive … but they’re also creatures of habit and great lovers of convenience.

My prediction is that the new regulations will turn out to have little or no impact on the broader retail buying behaviors. If you concur — or if you have a different opinion — please share your thoughts with other readers here.

The most respected brands in 2014: Who’s up … who’s down.

July 21, 2014July 21, 2014 Phillip Nones Advertising, Branding, Business, Marketing Communications Brand Image, Brand Respect, Branding, Business, CBI, CoreBrand, Corporate Branding Index, marketing

In recent years, there’s been more press than ever about “brand respect.” Building on this interest, brand strategy firm CoreBrand decided to use historical survey data to attempt to determine the sentiment behind the world’s best-known brands.

CoreBrand uses proprietary Corporate Branding Index data – 23 years’ worth – that it has been compiling through consumer surveys covering nearly 1,000 of most famous brands.

CoreBrand’s 2014 Brand Respect Study covers the 100 brands (limited to publicly traded companies) in the CBI that chart the highest levels of market familiarity among all of the brands tracked.

CoreBrand’s scoring mechanism is pretty straightforward: Brands with the highest familiarity and favorability are defined as “most respected,” while brands that have high familiarity but low favorability levels are the “least respected.”

For the record, here are the most respected brands as determined from the 2014 CoreBrand research:

#1: Coca-Cola – the most respected
#2: PepsiCo
#3: Hershey
#4: Bayer
#5: Johnson & Johnson
#6: Harley-Davidson
#7: IBM
#8: Apple
#9: Kellogg
#10: General Electric

In comparing 2014’s results to the previous year, Coke and Pepsi remain at the top of the heap – although they traded places from one year to the next. Moreover, both brands’ favorability scores declined slightly – perhaps due to the burgeoning “better for you” foods movement that seems to be souring some consumers on soft drinks and related beverages.

New on the “Top Ten” most-respected listing this year are IBM, Apple and GE.

At the other end of the scale, these ten brands came up as the ones that are the least respected – with Delta Airlines earning the Booby Prize as “the worst of the worst”:

#1: Delta Airlines – the least respected
#2: H&R Block
#3: Big Lots
#4: Denny’s
#5: Best Buy
#6: Rite Aid
#7: J.C. Penney
#8: Capital One Financial
#9: Family Dollar Stores
#10: Sprint Nextel

While it’s certainly no fun to be on the “least respected” list, two of the brands – Denny’s and Family Dollar — have actually seen their scores improve significantly this year compared to last. So at least they’re headed in the right direction.

Two other brands – Philip Morris and Foot Locker – have gone off the list. In the case of Foot Locker, it’s because its brand favorability ratings have improved significantly enough to lift them off the list.

For Philip Morris, the reason is far more mundane: it’s simply because its familiarity level has deteriorated so much, the brand no longer even qualifies to be part of the annual CoreBrand Brand Respect evaluation.

And finally … we come to Delta Airlines. It’s the air carrier everyone loves to hate — and it’s dead last in the brand respect rankings.

There’s some consolation for Delta, though: The only two other U.S.-based air carriers that qualify for inclusion in the study based on their familiarity levels (United and American) also score on the low end, although they (just) miss being on the “least respected list.”

Evidently, the airlines in general could benefit from earning more brand respect. Good luck with that.

Charting Social Media’s “Maturity Continuum”

July 13, 2014July 14, 2014 Phillip Nones Advertising, Business, Marketing Communications, Social Commentary Business, Communications, Gord Hotchkiss, Marcomm, marketing, Maturity Continuum, Social Media, Social Platform, Social Platforms

As social media has crept more and more into the fabric of life for so many people, it’s only natural that social scientists and marketers are thinking about the wider implications.

One of these thinkers is someone whose viewpoints I respect a good deal. Social media and online/search über-strategist Gord Hotchkiss has come up with a way of looking at social media vehicles that he dubs the “Maturity Continuum.”

According to Hotchkiss, the Maturity Continuum is made up of four levels of increasing social media “stickiness” — meaning how relevant and important the social platforms are to people’s daily lives and routines.

Specifically, these four levels are:

The Fad Phase — This is when people start using a social media platform because it’s the bright shiny thing … and “everyone else” in their circle is doing so, too. This dynamic is commonly found among early adopters — you know, the folks who try out new things because … they’re new.

Of course, early adopters don’t necessarily stick around. A new social platform has to have some sort of “there there” – to deliver some measure of functional benefit – or else it won’t keep fad users around for long.

Also important at this early stage is the aspect of uniqueness and novelty — which is always important among this group of people who tend to be higher on the ego and narcissism scale.

Making a Statement — If a social platform makes it through the pure novelty gauntlet, it continues to be used because it makes a statement about the user. In the case of social media, it’s often as much about the technology as it is the functionality.

Thinking about a platform like FourSquare, here you have social tool that’s probably at this level of maturity. With FourSquare, there may be a few utilitarian reasons for using it — getting vouchers or other “free stuff” from restaurants and bars — but it’s probably a lot more about “making that statement.”

A Useful Tool — At this point on the Maturity Continuum, here’s where a social platform breaks into a more practical realm. Going beyond the novelty and ego aspects, users find that the platform is a highly beneficial tool from a functionality standpoint — perhaps better than any other one out there for facilitating certain activities.

Thinking about a social platform like LinkedIn in this context, it’s easy to see how that particular one has done so well.

A Platform of Choice — This is the highest level of social media maturity, where users engage — and continue to engage — with a social platform because they have become so familiar with it.

At this level, it becomes quite a challenge to dislodge a social platform, even if “newer, better” choices come along. Once social habits have become established and a large critical mass of users is established, it can be very difficult to change the behavior.

Facebook is “Exhibit A” in this regard: Despite near-weekly reports of issues and controversies about the platform, people continue to hang in there with it.

Thinking about other social platforms like Instagram, YouTube, Twitter, SnapChat and Pinterest, it’s interesting to speculate on where they currently fall on the “maturity meter.”

I’d venture to say that YouTube has made it to the highest level … SnapChat is still residing in the early “fad” stage … while Pinterest and Instagram are transitioning between “making a statement” and being “a useful tool.”

Where Twitter resides … is anyone’s guess. I for one am still wondering just how Twitter fits into the greater scheme of social — and how truly “consequential” it is in the fabric of most people’s social lives.

What are your perspectives on the Maturity Continuum in social media? If you have opinions one way or the other about the long-term staying power of certain platforms, please share them with other readers here.

Work/family gender roles are changing … even if the media portrayals of them aren’t.

July 9, 2014July 10, 2014 Phillip Nones Business, Demographics, Employment, Human Resources, Social Commentary Business, Careers, Employment, Gender Roles, Gender Stereotypes, GM, Insights in Marketing, Mary Barra, Matt Lauer, Work Family Balance, Work-Life Balance

It may be the year 2014, but many people continue to wander gracelessly through the gender minefield when it comes to the workplace.

We saw this in spades two weeks ago, when the Today Show’s Matt Lauer asked General Motors Chief Executive Mary Barra how she successfully balanced her role as CEO of a large corporation with that of being a Mom.

Mr. Lauer was excoriated for asking the question, with criticism coming from all quarters (left and right). He was accused of sexist questioning. Several commentators pointed out that he had never asked such a question of the male top executives he had interviewed earlier at GM and Chrysler.

Mr. Lauer correctly noted that Ms. Barra had addressed this very issue proactively in a magazine article, and hence he thought the line of questioning was fair game.

Still, the fact that a flurry of controversy was stirred up at all reminds us how emotionally charged questions about gender roles continue to be, several generations after the birth of the feminist movement.

In point of fact, gender roles have been evolving pretty rapidly in the past two or three decades. Sparked by economic and employment forces as well as changes in social norms, more men than ever are choosing to stay home with family, even as the participation of women in the workforce has reached all-time highs.

And field research conducted in May 2014 by consulting firm Insights in Marketing suggests that it’s men more than women who now feel that they’re facing struggles and stigmas associated with achieving a good work/family balance. To wit:

Among men surveyed who have children under the age of 18, ~35% report that they are “feeling more torn between work and family” … whereas with women with children under the age of 18, only ~26% report the same feelings.

Here’s another result from the same survey: By a 57% to 41% margin, men are more likely than women to agree with the following statement: “A man’s primary duty is to financially provide for his family.”

Those figures may not come as a surprise.

By contrast, nearly the same percentages of men (78%) and women (74%) disagree with the statement that “A woman’s primary duty is to be a full-time caretaker for her family.”

According to the research summary issued by Insights in Marketing, these findings suggest that certain gender stereotypes are no longer accurate: Society truly accepts (and even expects) women to be a part of the workforce, while expecting men to care only about their careers.

Instead, the survey reveals much more similarities than differences in how women and men see their family and work roles:

~81% of women surveyed feel that their first obligation is to their home and family … and ~75% of the men surveyed feel the same way.
~48% of men surveyed feel that their career gives their lives purpose … but ~40% of the women surveyed also reported the same feeling.

Even though real change is happening on the ground, it’ll probably take more time before we start seeing the change being reflected in popular culture — and so that Matt Lauer can ask a question without incurring the wrath of a thousand baying wolves.

Remember that, too, the next time you see a TV commercial for laundry detergent. You know — the one where Dad is some doofus who puts way too much soap in the washing machine and then can’t figure out when to add the fabric softener …

More findings from the Insights in Marketing report are available here.

Business Bust? Lead Nurturing Efforts Coming Up Short

July 6, 2014July 7, 2014 Phillip Nones Advertising, Business, Marketing Communications, Sales Bizo, Business, E-Mail Marketing, Forrester, Lead Nurturing, marketing, Oracle, Oracle Eloqua, Sales Management, Selling, Web Marketing

When it comes to e-mail lead nurturing in the business world, it turns out there’s a whole lot of mediocrity — or worse — going on.

In discussions with my company’s clients, it seems that most of them are dissatisfied with what they consider, at best, only “middling” engagement levels that they’re achieving on their e-nurturing campaigns.

On top of that, many of them suspect that they’re underperforming their counterparts in the market.

I don’t think that’s the case. Since we work with a variety of clients and thus hear about the results from a group of firms, not just one or two, we can see that most everyone is in the same boat.

Even so, it’s anecdotal evidence rather than statistically quantifiable data.

But now we have the results from a new B-to-B survey conducted by Bizo and Oracle Eloqua … and what they’ve found is that many companies are struggling like most everyone else when it comes to developing comprehensive lead nurturing programs that perform well.

This survey of ~500 B-to-B marketing executives revealed that nearly 95% of all companies have some form of lead nurturing program in place. But having such a program in place doesn’t mean it’s all that effective.

How challenged are these marketers? Consider these key findings from the research:

Nearly 80% of respondents report that their e-mail open rates don’t exceed 20% on average.
~45% report that only 1% to 4% of known contacts develop into marketing-qualified leads.
Only ~5% of buyers on business websites are willing to provide detailed information on a “gated” contact offer form.

The implications of these findings are varied:

E-mail databases that are built from website visits tend to have significant omissions (and errors) regarding contact information.
Only a smallish fraction of e-mail subscribers are reading the e-mails they receive … and by definition, no anonymous prospects are, either.
Because e-mail marketing relies on having access to prospects’ e-mail addresses, the e-marketing approach provides no opportunity to engage with a potentially much larger audience of customers who may be in the market for a company’s products and services at any given point in time.

The chances are likely, too, that those prospects are visiting relevant websites. We know this because Forrester Research reports that the typical B-to-B buyer’s “journey” is nearly complete by the time he or she contacts a vendor’s sales department.

With so much useful information so available online, websites is where research can occur without have to deal with pesky sales personnel until “the time is right.”

It’s also why, despite the well-known negative aspects and limitations of web display advertising, nearly half of the respondents in the Bizo/Oracle Eloqua survey feel that online display advertising plays a role in attracting anonymous prospects and nurturing those leads through the sales funnel.

But marketers are also showing interest in multi-channel nurturing, and are receptive to adopting techniques that support the ability to nurture known and anonymous prospects without using e-mail. Those tactics will probably the next new wave in lead nurturing practices going forward … provided people know where they can access the tools to make it happen.

More details on the Bizo/Oracle report can be found via this link.

Tough Nut: Shoehorning Social Media Practices into an Existing Corporate Culture

July 2, 2014July 2, 2014 Phillip Nones Advertising, Branding, Business, Marketing Communications, Social Commentary Advertising, Business Insider, Marcomm, marketing, President Cheese, Social Media

In late May 2014, Business Insider published an article about the processes by which corporations and their brands plan and manage their social media efforts.

It elicited derision and snorts of laughter in response.

Why? For starters, the story sported this irreverent headline: “We Got a Look Inside the 45-day Planning Process that Goes Into Creating a Single Corporate Tweet.”

And inside the article, it was revealed that it took the four-person agency team that handles the social media program for the Président Cheese brand 45 days to take a single tweet from conception to published reality.

For the record, here is the tweet as it finally appeared on Twitter:

On the one hand, it seems patently ridiculous that a single tweet should take so long to germinate, come to fruition and be published. At that pace, the Président Cheese brand is going to be left in the dust.

[To add further insult, the social media accounts in question had only ~100 Twitter followers and ~220 Facebook likes at the time.]

But let’s look more closely. The tweet is recommending serving camembert cheese at room temperature for better flavor, rather than straight out of the refrigerator.

It’s a mild enough suggestion … but it has potential negative implications concerning food safety — or at least the perception of such.

When one is a brand sold nationally, such considerations aren’t merely theoretical; a simple tweet can be turned into a cudgel to beat over the head of the brand in the case of a lawsuit over food sanitation.

Considered in those terms, it no longer seems quite so strange that it took the MarComm agency so many days to go from ideation through the review-and-approval process to get to publication.

And the four agency people involved? They’re the team assigned to the brand’s social media account, and the full group’s involvement was a single meeting to discuss the upcoming month’s social media topics.

It turns out that “planned” topics represent about one-third of the Président Cheese activity on social media platforms; the rest of the postings are done on the fly, responding to customer chatter, answering questions or weighing in on other comments, and responding to food trend news or other developments that tie in with the world of food, hospitality and entertaining.

So, like so many other factors in the business world and in life, the 45-day tweet isn’t a black-and-white issue of failure; it’s shades of gray.

Now that we’ve seen both sides of the coin, I think it’s still legitimate to question the length of time and the amount of energy required to post a single tweet.

Several ways to correct this come to mind. One is for brands to stay away from any topics that might expose them to the risk of public relations problems or potential legal repercussions.

But in a world where brands are competing against an endless crowd of other social posters … that seems like a pretty sure ticket to irrelevance and social media oblivion.

At the same time, any MarComm agency or in-house social media department needs to adhere to some practical standards of vetting so that some ill-conceived post doesn’t blow up in the company’s face.

The sweet spot — or at least the proper balance between interest, efficiency and prudence — would be creating a streamlined client approval process involving only one or two people (plus backups) who are sufficiently attuned to the brand’s market position and the best ways to advance it and protect it.

Oh, and the team assigned to the responsibility needs to be available 24/7 for vetting purposes (hence the need for backup personnel who are at-the-ready).

It may be a pesky responsibility, but in the “always-on” world of marketing today, it’s really the only way to go if one wishes to participate on the interactive playing field.

The alternative is a tweet that takes weeks to be published … and I doubt anyone is ever going to be satisfied with that.

Are Company Growth Strategies Behind the Curve?

June 29, 2014 Phillip Nones Business, Economics Business, business strategy consulting, Business Transformation, Growth Strategies, Innosight, Scott D. Anthony, Strategic Planning, Strategy

Most businesspeople recognize the value of planning and implementing long-term growth strategies.

So it may be a surprise to learn that only a minority of companies are actually doing anything extensive along those lines.

That’s what the results from a January 2014 survey of ~825 senior executives seem to be saying. The research was carried out by business strategy consulting firm Innosight, and included respondents active in 20 industry segments ranging from manufacturing and consumer goods to financial, healthcare and telecommunications firms.

There is near-unanimous agreement among the execs in the survey that their organizations need to be continually chang their core offerings, or their business models, in response to rapidly changing market dynamics.

As to whether those changes are actually happening — well, that’s another matter.

In fact, only ~42% of the respondents expressed confidence that their companies are setting the table for any sort of “transformation” at all within a 5- or 10-year horizon.

And here’s an interesting twist the research revealed. One would typically think that the smaller the company, the less confident those execs would be about sufficient planning for future growth.

But the Innosight survey found exactly the opposite finding. The confidence level is actually lower among those respondents who work at the largest companies in the research sample: Only about one-third of respondents with $1-billion revenue companies expressed confidence.

The problem is that many companies are changing at a slower pace than the markets in which they operate.

Or at least that’s the perception. About 40% of the survey respondents feel that their organizations are changing at a rate that’s slower than the market’s evolution. (It’s the case with roughly half of the large company respondents.)

Tied to this concern is another finding that the Innosight research uncovered: Only about one in ten of the respondents reported that their companies have formal growth strategies covering at least a 5-year horizon.

The rest have either no formal growth strategy at all, or one that’s extremely short-term and mainly tactical in character.

The reason for this lack of growth planning is the sense that markets are way too unpredictable in today’s business environment. Long-term strategizing in such an environment seems more like a theoretical exercise and less of a practical use of time to many of the execs in the survey.

On top of that, pressing issues that crop up on a daily basis are prone to suck most of the planning oxygen out of the room.

Scott D. Anthony Innosight — Scott D. Anthony

As part of its report, Innosight managing partner Scott D. Anthony pointed out that despite its shortcomings, transformational innovation has an important role to play, even though it takes time to pay off — sometimes as long as five or ten years.

“Companies that invest in planning methods that help align senior leaders on long-term growth strategies are probably at a real advantage to develop new business models and open new growth markets,” Anthony contends.

And this:

“If you have a long-term strategy, you don’t have many competitors — a good thing — because most companies want a return on investment within three years. In other words, a switch in timeline can e a real competitive advantage.”

By contrast, companies that are always working in the “here and now,” are usually facing multiple market players and a much more competitive environment.

You can review further survey findings in an executive summary of the Innosight report here.

Personality and Productivity in the Workplace: When Grumpy is Good

June 25, 2014June 25, 2014 Phillip Nones Business, Employment, Human Resources, Social Commentary Business, Business Management, Employee Satisfaction, Human Resources, Hyper Island, personality traits, Personnel Management, positive attitude, Worker Productivity, Working Environment, Workplace

When it comes to which characteristics people consider the most important for being successful in the working world, we hear same traits cited so often, it becomes like a litany.

A recent survey of ~500 business managers in the communications and technology fields, conducted by digital education company Hyper Island, confirms it yet again.

When the survey respondents were asked to identify which traits were most important, here were their top answers:

A winning personality (e.g., creative, open-minded, positive): ~78% identified as among the most desirable traits.
Cultural alignment (making decisions that reflect the values shared with their organization): ~53% identified as among the most desirable traits.
The skill-sets of the worker: Only ~39% identified this as the most important trait.

Regarding skill-sets, it seems that despite the inexorable increase in technical expertise and acumen required of workers in nearly every business discipline, many people continue to believe that personality, attitude and a team mentality trump capabilities and expertise.

In other words, it’s the notion that it’s easier to educate someone with a positive attitude than it is to work with someone who really knows his or her stuff, but has a bad attitude, is a wet dishrag, or whatever.

Well, hold that thought. Because now we have new research from analysts at the University of Pennsylvania and the University of Illinois which is giving us another angle to consider.

In their studies, these researchers have found that workers with “net-negative” personality traits appear to be more efficient in their jobs than those who possess “net-positive” personalities.

What’s going on?

To come to this conclusion, the university researchers had their study participants meticulously document all of their activities over a prescribed period of time, along with completing a survey that measured attitudes about their jobs, their workplace and their colleagues.

As it turns out, it’s not that one group puts in more time than the other at the office. It’s that workers with “sunnier” dispositions are more open to performing tasks that may be outside of their comfort zone.

They’re more inclined to “have a go” at different activities, because they’re naturally more curious … and more willing to step in and support the larger work team.

… Especially if their boss requests it.

By contrast, grumpier employees are less open to novelty … more suspicious of taking on other tasks … and more likely to put up subtle (or not-so-subtle) psychological barriers when it comes to being approachable about taking on those tasks.

By their behavior and body language, they may often be successful in dissuading their superiors from even asking them to take on new and different job tasks.

And if they’re asked, they’re less likely to acquiesce.

As a result, these employees tend to spend more time on a fewer variety of tasks – the ones they already know. Which, in turn, makes them more likely to further hone their skills in those areas.

I don’t think these new findings challenge the underlying idea that employees with a positive attitude are a strong asset to companies.

But perhaps a smidgeon more credit may be due to the employees who are on the other end of the scale. When you find them sitting alone in the break room, or avoiding gathering around the water cooler, they may be investing more amount of time in their work tasks — and developing a higher level of skill as a result.

I guess every cloud has a silver lining …

Amazon’s (Somewhat) Surprising Shopping Stats

June 22, 2014June 23, 2014 Phillip Nones Advertising, Business, Sales, Social Commentary Amazon, Amazon Fresh, Business, Consumer Intelligence Research Partners, Consumer Sales, E-Commerce, Internet, marketing, Online Shopping, Web

Over the years, Amazon has branched out greatly from its original focus on books and other media to offer all sorts of other merchandise.

In fact, these days people can buy pretty much anything on Amazon — assuming it’s legal.

Even so, I was somewhat surprised to read the tea leaves on some new findings released by Chicago-based Consumer Intelligence Research Partners. This research firm surveyed ~1,100 Amazon customers, asking them about their most recent purchases on Amazon.

Categorizing the responses by type of merchandise, CIRP found that books are no longer the most popular products sold on Amazon.

Instead, pride of place now goes to top-ranked electronics products, with ~33% of the survey respondents reporting that those types of products were their most recent purchase on the site.

Books still maintain their high ranking; the category comes in second at ~20% of respondents. (Incidentally, approximately one-third of those book purchases are e-books.)

Amazon’s Fresh service, which delivers groceries within 24 hours of ordering, has been operating in select West Coast cities for some time now — and it appears that the company has latched onto a winning formula.

In fact, the grocery category ranked third in the survey.

This surprised me: Call me old school, but I still prefer to select my fresh meats and produce on my own, instead of relying on some anonymous “picker” to do it for me.

What were the bottom three merchandise categories found in the CIRP survey? Sports-related purchases were low … and music purchases were lower still (about half of them being music downloads, by the way).

Dead last is the automotive category. No real surprise here, I don’t think.

Personally, I don’t know anyone who would feel comfortable purchasing a car online. And since the vast majority of consumers don’t work on their cars either, it seems natural that most of them will continue to rely on their repair shops to procure the replacement parts and consumables they need for servicing their vehicles.

If you have particular merchandise you like to buy through Amazon — or if there is something really unusual that you’ve purchased from the site, please share your experiences with other readers here.

Software and security flaws: Even mighty Google isn’t immune.

June 18, 2014June 18, 2014 Phillip Nones Business, Social Commentary Business, Cyber Security, DirBuster, Email Security, Gmail, Google, Hacking, Oren Hafif, security researchers

Here’s a bit of news that doesn’t make one feel very reassured about cyber-security.

It turns out that a major flaw has existed in the security of Google’s Gmail service for an extended period of time.

And that flaw could have been exploited to extract millions of Gmail addresses – potentially every single one of them, in fact.

What’s even more unnerving is that this flaw wasn’t uncovered by Google’s own engineers, but instead by security researchers in Israel who were kind enough to bring it to the company’s attention.

Thankfully, it was the “good guys” rather than the “bad” who made the discovery.

Evidently, the flaw resided in the sharing feature of Gmail that allows each user to delegate access to his or her Gmail account.

By “tweaking” the web address, the security researchers were able to reveal a random user’s e-mail address.

Once this procedure was proved out, scaling the hack was relatively easy. By automating character changes using a software tool called DirBuster, the researchers were able to harvest approximately 37,000 Gmail address inside of two hours.

Oren Hafif, one of the security researchers involved in the exercise, blogged recently about the potential scope of the flaw:

“I brute-forced a token in a Gmail URL to extract all of the e-mail addresses hosted on Google. I could have done this potentially endlessly. I have every reason to believe every Gmail address could have been mined.”

While the hack would not have exposed passwords explcitly, it could have left email accounts open to password-guessing attacks — not to mention unwanted spam mail or phishing.

Potentially, the breach could have affected not only personal users, but also businesses that use Google to host their email platforms.

Helpfully, the Israeli security researchers decided to inform Google of their discovery, preferring to be part of the solution rather than let the company twist in the wind.

So … are you ready for the kicker?

Reportedly, it took Google one full month to fix the software bug after being informed about it.

For a core service like email that is so central to the entire Google experience, one wonders why it took one of the world’s largest and most powerful companies weeks rather than just days to fix the problem.

If you’re looking for a redeeming or staisfying finale to this story … there really isn’t one.

Why? Because in its infinite generosity, Google decided to reward Mr. Hafif for bringing the software flaw to its attention, in the form of a cash award.

One that really, really expressed thanks and appreciation for what he did.

Reportedly, the award amounted to US$500.