"Blockbuster Inc., swung to a first-quarter profit amid prior-year termination fees as domestic same-store sales grew for the first time in five years, though total revenue fell amid a decrease in company-owned stores."

The domestic Blockbuster results -- which have improved for the first time in the last five years -- were driven by a 20% jump in same-store merchandise sales.

Not rentals. Not through-the-mail rentals, even. By in-store merchandise sales.

Which makes sense. Nowadays if you want to buy a DVD and you want to get it now, where do you go? Wal-Mart or Target? Or Blockbuster, where they always seem to have things on sale because they're selling lightly used rental disks for $5-$8/each? (heck, I've bought DVDs at Blockbuster for $1.99, which is cheaper than renting the movie for a week!)

Anyway, fascinating news. Thoughts?

[On a story about a party gone wrong at the University of Colorado] "CU Meat heads. Like trash in the streets, the cretins can always be counted upon to show up and leave their greasy residues."

[On a story about an apartment building burning down] "Wow, a burning bush. If you look closely at the smoke on the wall, you can see a face looking back at you. This whole thing is divine."

"Is it Clinton's fault yet? I just got here."

"Wow, there are a lot of jerks posting tonight."

These are tame. The Daily Camera staff has to be rather vigilant, and it's quite common to see a discussion where 25% or more of the comments are "(This comment was removed by the site staff.)"

Nonetheless, it's a fine line between having coherent editorial control, managing the content of a site and its tone and censorship, and it's darn difficult to impose any sort of discourse quality metrics. Imagine a site that said "Note: sarcasm is not allowed."

That's a cause of frustration and too many people I talk with here in Boulder tell me that they skip the comments attached to articles on the Daily Camera's Web site because of the tone, hostility and generally poor discourse.

And that's too bad - though understandable - because they wouldn't see the great example of participatory citizen media in one of the latest stories on the site, a story about a boy being knocked off his bike by an RV just up the street from my place. A terrible story with a good ending: the boy is actually in good shape and his primary injury appears to be abrasion wounds from being dragged by the vehicle.

Within all the asinine comments about how bikers in Boulder are arrogant and don't follow the rules of the road are two comments worth pulling out, however:

"Thanks to those who have showed support. I am the boys father, and I want to report that he is currently in the hospital, and he is going to be okay. He fractured an ankle, has a nice quarter sized chunk missing from his right elbow, and has MASSIVE road rash, mostly on his back and shoulders. Will probably be in there for a couple days. He didn't stop at the stop sign, he looked right, there was a truck with a trailer parked to the left (possibly illegally that close to an intersection) that he pulled past and was hit. Frankly, they thought the helmet saved his life."

"I wish to second the fact that the driver was NOT going 40 mph. I spoke to a witness-I am not sure about a parked truck with trailer. I think that person stopped AFTER the accident to try and help. Thank you, people for all the help received at the time. The boy was at my house when this happened."

Imagine this ability to reach out to the local community and get candid supplemental information from key players with other stories too. The ability for story subjects to add their own commentary is a terrific feedback mechanism and can not only ensure stories are accurate but also help keep journalists honest too.

It's participatory mainstream media. With all its warts.

Welcome to Journalism 2.0.

I find this entire sequence of vigilante justice, as embodied in the concept of "outing" being applied to this situation, ridiculous. On the one hand, I constantly hear bloggers and other so-called new media journalists complaining that corporations and public relations firms aren't taking them seriously and then we get this sort of daft misbegotten idea where if a PR firm doesn't meet the ideal of interaction with a blogger, they can be digitally tarred and feathered.

I also get a lot of email from PR agencies, some of which is lame and poorly targeted, but much of which is interesting and worth receiving. When I get something I don't like, I send a one line note akin to "Not my beat, please drop me from this list" and it's done, no problem, no foul, no tar, no feathers.

When I get a query that attracts my attention, I appreciate the ability to type in a quick reply without having to dig up a contact person (they've already sent the message) and engage in a dialog with the pr agent or company representative. I'm candid and polite, and sometimes will point out how poorly their PR represents the company and other times take the apparently huge leap of forgiving them for not being perfect and focus on the message - the product or service they're promoting - rather than the contact query.

As a result, I dare say that I have an excellent relationship with just about every major PR agency in the United States, and a lot of smaller ones too.

The difference? I'm not out to change the world and I'm not arrogant enough to think that I should dictate how they should communicate with me, I just accept that there are inherent limitations in the system and try to make the best of it nonetheless.

This appears to be a minority perspectively, however, as embodied by comments like this one from Stowe:

"The root cause here is the delusion on the part of the clients that this sort of PR carpet bombing works, that mass media messages embedded in a press release or press release-ish email work, and that we, the bloggers, actually react positively to this junk."

If I hire a PR firm to represent my company, I don't want them telling me all this hooha about "fostering the conversation" as a justification for why they only contacted seven people after billing me for 30 hours work, rather than contacting a few hundred targeted contacts. Further, I'm confident that a good PR agent can get me more visibility with their few hundred qualified contacts than a one-on-one twitter conversation with seven "perfect targets".

As someone with a foot in each camp (I write columns for both a monthly magazine and local newspaper but I also run very popular weblogs) I know that while it's not maximally efficient for the burden of selecting what's interesting to be dumped onto me as a journalist or citizen blogger, it's still far better than me never seeing the "offbeat" releases that might just catch my attention because they're not on "my beat".

Among other things, this boils down to a problem that most information researchers are familiar with: serendipitous resource discovery. You encounter it each time you pick up a printed dictionary to look up a word, just to find yourself browsing other words and enjoying the wealth of our language, or, what I did as a child, look up something in an encyclopaedia and find yourself immersed for hours in the tome.

What bothers me isn't that there are some self-important bloggers who are trying to "fix" a system that I don't really think is broken, but that there's a fundamental incongruity between wanting PR people to pay attention to them and view them as legitimate media outlets AND a desire to simultaneously change the rules of interaction without consideration of the full picture.

Rick offers a pithy retort to Stowe, Gina, and the blogger vigilantes:

"Will you occasionally get pitched something that is irrelevant to you or that is personally uninteresting to you? Of course. Too bad. Get over it or get a new job."

However you spin it, I think that if you want to play in the world of mainstream media, journalism and public relations, you would do well to understand the dynamics and communications channels (especially the efficiencies of the system) and learn how to maximize your results rather than jump into digital yellow journalism and try to blacklist or humiliate PR professionals who might just view their job differently to your average blogger.

Me? I prefer not being part of a lynch mob, whether I knew I was being shanghaied into it or not...

The workshops are going to be terrific:

• Financing 101
• Building a Winning Team
• Venture Labor: Don’t Confuse Stock Options with “Monopoly Money” to Grow Your Company
• Marketing 2.0 – Buzz and Social Media
• Making your Company Capital Attractive: How to Get from Here to There
• Revenue Generation: The Life Blood of Growing Business
• Valuations: The Key to It All
• How to Expand Your Overseas Sales

We won't just be talking about new media and social networking as avenues for promoting your entrepreneurial venture or startup, however, we'll be developing a specific set of strategies and tactics for an organization to follow to maximize the benefit of modern marketing tactics while minimizing the associated cost. What company? Well, you'll have to join us to find out!

I hope you can join us. I know it'll be a day well spent and I'm excited about being able to participate in this event. Join us: register for the Colorado Capital Conference today (and take advantage of early bird pricing until May 9th)

I gave him a pithy answer and thought it'd be interesting to also post it here and see if we can garner some additional thoughts and ideas about how entrepreneurs, startups and small companies can get some (positive) notoriety online.

Here's what I said to him in my email:

I think that I can offer you some help with your upcoming article. I actually work with small companies all the time to help them create buzz and visibility in their marketplaces, and my general response is:

do something goofy but interesting and of relevance to your market

For example, a gas station might run a promo where people submit their funniest stories about meeting people at the pump, and every week a winner gets a free fillup. Or they could be videos posted on YouTube, etc.

The point is to be a bit out of the box: small businesses that use traditional mainstream PR are competing with big corporations using the exact same channels, and will inevitably have poor results. It's hard to shine when you're in the shadow of someone much, much bigger.

What smart ways would you utilize to help your company - or client's company - gain visibility and buzz?

Lots of companies in Boulder have the customer loyalty device in question: a frequent buyer punch card or similar. I have about a dozen of them in my wallet or car glove compartment and they're all generally the same: get ten punches and the eleventh is on the house. Whether it's an expensive coffee drink, a burrito, a smoothie or even a sandwich, companies from Safeway to Wahoo's Fish Tacos have these ubiquitous cards.

According to the paper, Vic's owes the city approximately $3,000 in unpaid sales tax, which is being labeled "use tax". Rather than just pay it or register a complaint through the chamber of commerce, Vic's has brought its fight public by putting up a Web site and hosting a fund raiser for its legal fund. You can check out the site at Vic's Espresso.com.

I'm torn on this issue because on the one hand, I really like the loyalty card idea and it does help me decide to return to my favorite haunts on a regular basis, but tax revenue from commercial transactions are also an important source of funds for the city and the myriad of services I enjoy as a resident too.

Vic's basic argument is that the sales tax for the paid portion of the loyalty transactions (e.g., the ten cups you have to buy to get the eleventh free) are sufficient and that the cost of the eleventh cup is already factored into the price of the ten paid cups, so the city's already received the sales tax in advance for that freebie cup.

If you think about the economics of running a business, that must be true because however inexpensive the cost of a free burrito, sandwich or latte, it's still non-zero and that money has to come from somewhere, but I have to admit that it makes me feel a tiny bit squeamish that the price of goods is artificially inflated to pay for freebies that I might not every enjoy if I'm not a regular patron of the establishment.

At some level I think it's a pragmatic issue: both residents and visitors to Boulder clearly demonstrate the effectiveness of loyalty programs through their shopping and eating habits, and anything that keeps customers coming back to a local business must be good -- in the long term -- for Boulder's tax coffers.

My conclusion: the city should be happy with the tax collected by the paid portion of the loyalty program and happy that local businesses have such an effective tool to help generate more business and revenue.

The alternative really can cripple smaller businesses in particular. No "10% discount for frequent customers", no "buy three get one free", none of that, not even down by CU, where these programs are omnipresent. The end result is to take away an effective retail business tool, and that could prove a greater cost to the city than any potential tax revenue from these loyalty programs.

Except for one problem: NewsGator has very sophisticated search capabilities that are neatly integrated into their RSS reader, and after years of successive refinement, my current search query is the unwieldy:

NewsGator: Keyword search for intuitive.com or askdavetaylor.com or blogsmart or findability.info or "dave taylor" -hockey -kings -wwe -wrestling -alberta -government -"Best MLM Company"

I could use Google Alerts for the task, and I do have some Google Alerts running, but it doesn't search as big a pool of information as NewsGator does.

Nonetheless, using NewsGator Online in addition to Google Reader is tedious at best, so when I had a chance to sit down this afternoon with my friend Ari Newman, head of Filtrbox, and get a quick demo from him, I was struck at how incredibly easy they're going to make it for all of us to have -- and continually tweak and improve -- highly sophisticated searches.

The most important part: Not only is Filtrbox stepping through more information sources, but I can easily create an RSS feed and -- and here's the kicker -- subscribe to that feed in Google Reader.

Now, finally, a way to have everything integrated into a single place.

As I said when I started, sorry Greg, I'm leaving NewsGator Online after many years, and can finally centralize everything in Google Reader, thanks to the powerful filtering capabilities of Filtrbox.

Note: Filtrbox is not yet open to the public, but Ari assures me it'll be ready for everyone in just a few weeks...

Q: Tell me about your Web site, first off. What's your main topic and why?

My topic is electronics, but I'm trying to focus on things that you can customize. I want to help people through the process of customizing whatever it might be that they have. Later on I would like to be able to sell the things that people want most that are customizable.

Q: Your site looks great. Where did you learn how to design a Web site?

Thank you, I never took a class or anything on this, I was always interested in photo designing and editing and stuff like that. My Mom is really artistic and I guess I inherited that artisticness because I definitely didn't get it from my Dad. I have just been interested in doing that sort of thing and I just got better and better at it I guess.

Q: Remind me, you're 15, right? Awesome. When I was fifteen I think I spent most of my time just reading science fiction novels, certainly not doing anything in the online realm (of course, back then online = dial up BBS systems, but that's another story). When did you get interested in doing something online?

I think I got interested in doing things online when I started doing a lot of research. Before I started my business' I only used to go online for IMing people and occasionally, an email or two, but mostly for online games. Then I got interested in hacking websites and stuff. I never wanted to do anything to hurt anyone's websites I just wanted to be able to say that I could hack a website. I never accomplished this because I didn't want to get into any trouble so that sort of scared me off. I got into modding and customizing things when my cousin told me about hacking my psp. I just like the whole idea of being able to make the items that I purchased perform at its maximum capability, after all I did spend the money for it and I think that everything should be able to be customized.

That still didn't really answer the question so I'll just say another sentence or two for the answer. My Dad had a big part in me getting online as well. He didn't really get me into using the internet, just making money on the internet. He would always come up with ways for me and my sister to make some money and when I started learning about how to make money online I just thought that, that is the ultimate lifestyle. Being able to build your website or websites whenever you wanted, in your underwear and make money from it.

Just the other day I was slacking off as usual, and was playing Guitar Hero 3 for almost the whole day. Then later on when I went back to my computer I had money waiting for me from orders.

Q: Okay, you have more social bookmark icons than any site I've ever seen. Why so many and which of these many services do you actually use?

The main reason for this is because I was planning on taking a poll from visitors to my site of the top 10 or 15 social bookmark sites that they use and just having those up there. As you can see I haven't gotten around to this yet, mostly because my site is new and not many people know about it yet.

Q: Are you on MySpace? FaceBook? What sites do you and your friends actually use with frequency and what appeals to you about them?

Well, almost all of my friends from school still use MySpace. I was never allowed to have a MySpace or a FaceBook because that's what my parents said. This was kind of a bummer at some points because everyone was talking about it all the time, but I got over it. I still am not allowed to have a personnel one. I have a business MySpace and a business FaceBook, but I don't really use them that much. I definitely prefer FaceBook over MySpace mainly because I think FaceBook looks a lot cleaner and organizes things in a better way.

I usually just call them or talk to them through AIM, or other instant messaging services.

Q: I see you have the donation form on your home page. Are you planning any other ways of making money from your Web site?

Yes, I am planning on selling the customizable electronics that are of the highest interest of my viewers. Later on I might sell T-shirts or something along those lines.

Q: I have to ask, since my kids bug me about this stuff: how old were you when you got your first iPod or Mp3 player? Your first computer? Your own email address? Your own cellphone?

I got my first iPod nano when I was 13. I ended up having to buy another one, but that's another story.

I don't remember when I got my first computer, I think I was about 13 as well. Being as I still have the same computer now, I need to get some money so I can get off windows 2000.

I think I got my own email address when I was 11 or 12. That took a while of bugging my dad to set one up for me. I went through a year or two of being just about the only kid in the class who didn't have an email when the kids used to pass around the email lists. I really never used it then, I just wanted one to be like everyone else.

Last, but not least, my cellphone. Well I got my first cellphone, which is also my current one, a month after I turned 15. This took an even longer time of bugging my Dad to get. When I finally convinced him to let me get one, I had to pay for the phone and the bill. At this point I am still paying for it, which I don't really have a problem with since I'm making money with my businesses.

Q: What's next for KRS Marketing, your online development business?

Well, I think in the future I might start another site for magic. I really like to do street magic, but I don't get a lot of time to practice it. If I do make a magic site I think that would push me to practice more.

Thanks for sharing, Kyle. I can only imagine how much you'll have accomplished by the time you're in your late 20's.... :-)

While I generally hang around executives and startup entrepreneurs, I also have quite a few friends in the Internet marketing space, including the Stompernet team, and I even occasionally speak at an Internet marketing event, though I generally don't have the right kind of products for those to be profitable for me.

Another "IM" guy who lives just a few miles from me and has helped me out quite a bit over the years with inspiration regarding making money online is Joel Comm. He really made a name for himself in the AdSense space, but he also created The Next Internet Millionaire and many other creative online properties.

More importantly, Joel wrote what is still one of the very best books on how to actually make money with Google AdSense, his The AdSense Code book. I have a copy (signed, natch!) and found it a great reference for different ways you can integrate AdSense into your site to maximize your earnings.

The big news is that he's just released the fourth edition of this book (now titled AdSense Secrets) and he's priced it sufficiently low that it's crazy for you not to just click on the link and buy a copy: $9.95.

I will note that this is an ebook, so you'll be able to drop this onto your iPhone, PDA or other portable device and absorb the information in bite-size chunks as you have the time. Or, better, sit down one afternoon, pad in hand, and go through the entire book, writing action items and to-do items as you go. It'll definitely pay for itself!

The market analysis is that the deal would be less than stellar for Blockbuster, but would be a needed shot in the arm for Circuit City. At least, that's what the change in share price seems to suggest.

But it's actually a darn interesting idea, one that is a clear and logical partnership if you have walked into an outlet of the more successful Best Buy (NYSE:BBY) chain: Best Buy devotes a good 50% of its floor space to DVDs and music CDs. It's an interesting mix because it shows the company focusing on both players and content, whereas Circuit City has barely any space devoted to movies and therefore is missing out on the "blade" part of the old adage that you give away the razor and sell the blades (or, the modern equivalent, lose money on the printer but make a killing on the cartridges)

Further, Blockbuster stores now stock limited hardware too and it would make so much sense for Blockbuster to expand to having a store-within-a-store where people could, for example, buy a Playstation 3 and rent a half-dozen games to go with it, or buy a low-end Blu-Ray player and get a few free rentals on the spot so they can enjoy the marvelous world of high-def TV.

Co-branding offers great potential too: For example, why not have a "Blockbuster Video Central" located within Circuit City, denoted with a different design, color scheme, and even an employee or two in Blockbuster uniform, and -- a key idea -- allow people to rent movies while they're in Circuit City.

Vice-versa works too, of course. Imagine walking into Blockbuster and there's a 500sf corner where they're selling the ten hottest items from Circuit City's video inventory, along with special in-store promotions. Have one well trained Circuit City employee (yes, I now that's an Achilles heel of modern retail consumer electronics stores) on site and now the Blockbuster folk can focus on recommending movies and games, while the Circuit City person can answer compatibility and capability questions.

Just as critical, the two chains need to act as one in all but brands, so if I were to buy a DVD player at Blockbuster, I could take it into Circuit City for repairs, and if I rented a few movies while at Circuit City buying a new phone, I could drop them off at the local Blockbuster and they'd magically find their way back to the correct location. For that matter, buy a DVD player or TV at Circuit City and get three months of free membership in the Blockbuster online video rental service that competes directly with Netflix.

I'm excited at this prospect and think it holds great potential for mutual benefit in a way that most potential acquisitions/mergers don't seem to truly offer benefit to both the acquirer and the acquired.

Yes, there are storm clouds on the horizon, most notably the razor-thin margins of consumer electronics which has been what hobbled Circuit City in the first place and the imposing recent entry of Wal-Mart into consumer electronics, but there's a logic to this partnership that makes me puzzled why the Journal is reporting that Blockbuster is bringing its offer public because "[Circuit City] has failed to give the "due diligence necessary to allow Blockbuster to make a definitive proposal."

I think Blockbuster + Circuit City is a solid pairing. Now let's see what the market thinks and how it all unfolds...

• NewTeeVee: Blockbuster tries to buy Circuit City
• GigaOm: Blockbuster Bids for Circuit City
• Hacking Netflix: Blockbuster Trying to Buy Netflix
• Between the Lines: Blockbuster sees media convergence
• Gearlog: Blockbuster offers to buy Circuit City

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What's interesting is that we recorded this by utilizing Skype Video conferencing and on my end, I was using the video camera built in to my Macbook Air. No advanced tech, no $700 studio lights, and, as you can see, no set either (that's my living room fan in the background). Nonetheless, pretty good, pretty darn good.

Having spent years in the blogging space and having been a speaker or participant at most of the major new media conferences in the last few years, I'm privileged to know just about everyone on the so-called blogging "A list". They're a good bunch, all in all, not too many that are snooty, though their egos are, uh, well, 'nuf said on that! :-)

A surprising number of these folk have leveraged their online visibility into success in other areas or grown their weblog into a "blogging network" or multi-author, multi-site empire. For the rest of us, the bloggers who prefer to have things stay simple and small, most are still trying to figure out how to realize the magic of traffic --> revenue rather than traffic just producing hosting headaches and larger ISP bills.

A couple of people have done just that, however, turned an avocation into a vocation, gone from casual hobbyist bloggers into professional online writers, producing great content day after day, week after week, gaining a following and understanding how to turn the dream of revenue-from-traffic into reality.

One of the best at this is Darren Rowse, who runs Problogger.com. We've never actually had the pleasure of meeting (logistics are a bit more tricky since he's based in Australia), but every time I read another of his blog entries my respect for him goes up another notch. If you're not reading his site, you're missing a gold mine of ideas and blog revenue info.

Darren's a "six figure blogger", someone who has mastered the science (it's not an art) of building significant traffic, producing top-notch content, and transforming it all into a veritable river of income. Sounds good, doesn't it?

Now, let me also talk about my friend Andy Wibbels, who runs the ingeniously named Andy Wibbels.com, consults to a lot of companies about how to use blogs and social media, and has written one of the best primers on the jargon and concepts behind blogging too, Blogwild! A Guide for Small Business Blogging. In a very different way, Andy also gets how to leverage visibility online into a very comfortable living too.

Given their backgrounds and position in the blogosphere and new media business world, it's not an exaggeration to say that when Darren and Andy put out a course on how you can become a six figure blogger, you should pay attention.

If you're still trying to figure out how writing about a subject you've a passion about can be lucrative, you're the perfect student for this course.

I chatted with 'em about the course (which starts in just a few days!) and learned quite a bit more about it. More importantly, I found out that it costs less than what you'll probably pay for airfare alone to your next Internet conference. You'll have access to both of these sharp guys and a chance to learn their insider secrets, something that'll undoubtedly pay for itself within just a few weeks.

I don't like just promoting something without some sort of special deal for you, my readers, so I am making this very special offer:

Register for their six figure blogging course through my affiliate link (below), email me your registration receipt, and I'll send you a signed copy of my popular book Growing Your Business with Google as supplemental reading. That's a good deal, I'd say!

I'm confident in their ability to deliver top-notch material and you should be too.

To Our Valued Customers:

A few days ago redbox detected and removed an illegal credit card skimming device at one of our 7,400 locations. At the same time, redbox also discovered evidence of skimming attempts in two other locations. Skimming involves the placement of an illegal device above the credit/debit card reader on a vending machine, ATM, or in this case a redbox. These devices are used to illegally read or store personal credit card information.

Even if your redbox was not targeted, it never hurts to pay a little extra attention and check for any unusual activities or changes at your local redbox. If you suspect your redbox has been tampered with (click this link to see pictures of skimmer devices: http://www.redbox.com/creditcardsecurity/ ) please call 866-REDBOX3, e-mail alerts@redbox.com , or notify the store/restaurant manager of your concerns immediately.

Although there is no evidence currently that these skimming attempts were successful, consumer security is a top priority for redbox. Reviewing transaction records, there is a possibility that up to 150 customers may have been affected. Although only a small percentage of the millions of customers who use redbox each month, redbox has notified the major credit card companies so that they can monitor the situation. The redbox team is also working with local authorities to investigate the incidents and ensure your security.

Skimming is not new (click this link for more details: http://www.uboc.com/ ). It has been attempted numerous times on ATMs, gas station pumps, and now redbox has been targeted. Redbox has been aware of these industry threats and has spent significant time and resources to prepare for them. The 7,400 redbox locations are visited frequently by redbox associates to maintain smooth operations and an optimum customer experience. In this case, a redbox associate found evidence of skimming attempts and initiated the actions in the team's response plan (including this e-mail message).

Redbox greatly values our customer relationships. As a result, redbox is open and direct in our communications about this type of situation. The redbox team also utilizes industry-leading technology to ensure you have a safe shopping experience and aggressively combats attempts by criminals to defraud customers. Please see the questions and answers below for some additional details on skimming and how redbox ensures the safety of your account information.

Sincerely,
Trina Graham-Hodo
Director, Customer Service

Bill Caputo
Director, Security

Additional Questions / Answers:

Q. What is credit card skimming?

A. Skimming is the theft of credit card information used in an otherwise legitimate transaction. It often involves the placement of an illegal device above the credit/debit card reader on a vending machine, ATM, or in this case a redbox. For more info click these links:
http://en.wikipedia.org/wiki/Credit_card_fraud#Skimming
http://www.uboc.com/about/main/0,,2485_703976951,00.html

Q. What does redbox do to protect consumer credit card information?

A. Redbox employs state-of-the-art security technology to ensure the privacy and security of our customers' data before, during, and after their visit to our kiosks. Customer credit card information is encrypted the moment it's swiped through our readers. Redbox uses further layers of encryption to protect all data transfers, too. Kiosks are also actively monitored and regularly inspected both on-site and remotely. Redbox never moves or stores unencrypted customer information. Credit card information can not be accessed by outsiders or even by redbox employees once the card is swiped at a kiosk.

Q. Where can I get more information on credit card skimmers?

A. Please use these links to get more information on credit card skimmers:
http://en.wikipedia.org/wiki/Credit_card_fraud#Skimming
http://www.usatoday.com/tech/news/computersecurity/infotheft/2007-07-31-gift-cards_N.htm
http://www.uboc.com/about/main/0,,2485_703976951,00.html

Q. How do I know if a skimmer is on my redbox?

A. Redbox credit/debit card readers are standardized for all locations. Click this link for pictures of the two approved readers and some examples of skimmer devices: http://www.redbox.com/creditcardsecurity/

Q. Who should I call if I have questions?
If you suspect your credit card information was improperly used, contact your financial institution immediately. If you have specific concerns related to this incident and redbox, please visit http://www.redbox.com/creditcardsecurity/ or call 866-REDBOX3. Please do not reply to this email.

So what do you think? Did they address the situation calmly, professionally, thoughtfully and effectively? I think so.

As reported by the Wall Street Journal, the dissident shareholder group, Wattles Capital Management (led by Mark Wattles), has a 6.5% share in the corporation (which, at the current depressed share value, is worth 50.8 million dollars. 12 months ago it was worth over $200 million. I'd be upset too!)

6.5% doesn't sound like much, certainly less than a controlling interest, but in the way of publicly traded companies, Wattles is bringing its proxy battle to the annual Circuit City shareholder's meeting and not only is pushing for a replacement for Phil Schoonover, but also has a proposed new lineup of five Directors for the corporation.

What I find interesting about this story is that I share the concerns and criticisms of Schoonover. In fact, I wrote on this very blog quite a while ago about Circuit City downgrades employees, guarantees eventual demise. The Journal reporting in this latest story parallels exactly:

"Wattles said Mr. Schoonover and his senior management team appear to have focused on cost-cutting measures with little or no consideration for their negative impact on revenue and gross profit, referring to the company's year-ago layoff of 3,400 workers. To much criticism, Circuit City replaced them with lower-paid staff."

On the other hand... a recent report in Twice shares the result of a consumer survey that notes "price was the leading factor [in consumer preference for one store over another], cited by 70.8 percent of respondents. Selection was cited by 55.6 percent, followed by location (45.9 percent), "quality" (36.5 percent) and service (26.4 percent)." Most important to this discussion of Circuit City: "Knowledgeable salespeople were the least important factor, cited by 20.2 percent of respondents."

Savvy consumer electronics industry watchers have seen this coming for years, but the same report also indicates that more people would rather buy their CE at Wal*Mart (NYSE: WMT) than Circuit City, which is a death knell if I ever heard one. I mean, Wal*Mart? Have you gone into a Wal*Mart and tried to buy any electronics? Target (NYSE: TGT) maybe, but Wal*Mart?

Wattles is right in being unhappy with the performance of Schoonover and his Board of Directors. Circuit City has reacted stupidly to the challenges of the current consumer electronics industry. But what I haven't seen mentioned in any of the stories I've read about the proposed changes to the Board is the threat of online retailers like Amazon.com (Nasdaq: AMZN), where the lack of physical storefronts means that they can have a significantly lower overhead. If indeed almost 71% of people consider price the most important factor in a consumer electronics purchase, I suggest that the cost of physical stores -- and stores that aren't well run and efficient -- is far more of a problem than anything else.

Overhead, that's what can kill a retail company in this new century, and even a comparison of Circuit City and Best Buy is revealing: Circuit City's overhead (sales, general and administrative expenses) is $25 per $100 in sales while more nimble competitor Best Buy pays $15 per $100 in sales. That's a massive difference!

There are two reasons I find this situation interesting, obviously. The first is that I like Circuit City and have been distressed to see the obvious mismanagement by the executive team, but the other reason is the demonstration of how a vocal minority can have a significant effect on a corporation. Think about it: this is all coming to pass because a shareholder with less than 10% of the stock is, in the immortal words of Peter Finch, "mad as hell and not going to take it any more!"

I sent in a bug report (which wasn't easy to figure out: they don't really want to hear from customers as far as I can tell):

"03/30/2008 01:41 PM: Got a problem: My photo album AlbumID=21902554 has a picture set as the cover image but it's a picture I subsequently deleted. Now I can't change it. A bug?"

"Hi Dave,

Thank you for writing to us.

Please be informed you that our records indicate that you had 6 Albums in your Snapfish account under this email address: d1taylor@ gmail.com. We suggest you once again check your albums in your account."

This sort of pleasant, but completely pointless interchange reminds me why people hate tech support and are constantly frustrated with their gadgets, gizmos and software systems. And sometimes I am too. Go figure. :-)