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Has Carbonite accepted responsibility?

Has Carbonite accepted responsibility?

Carbonite has been flying below the radar the past few weeks, as companies like Arby’s have incurred the wrath of conservatives for pandering to the Media Matters inspired and coordinated attempt to drive Rush Limbaugh from the airwaves.

Carbonite was the most visible and self-righteous of the advertisers to drop Limbaugh in the first few days after his comments about Sandra Fluke.  Carbonite’s CEO David Friend invoked concern for his daughters as the reason Carbonite was dropping Limbaugh.

Yet Carbonite continued to advertise on Howard Stern (notorious for his demeaning antics towards women, including calling Sarah Palin the “C” word) and Ed Schultz (who called Laura Ingraham a “slut,” for which he apologized, and regularly attacks conservatives in extremely nasty terms).

Media Matters still is touting Limbaugh’s loss of Carbonite:

If we just look at Carbonite, which probably had the strongest relationship with Rush, their departure is still visible on the front page of Rush’s website – there’s now an empty space where there used to be a permanent Carbonite ad. Carbonite also issued one of the strongest statements in their explanation for excluding ads from Rush’s show. So it seems especially unlikely that they will return.

So how has Carbonite been doing the past month?

Its stock price has recovered and as of the close of the markets yesterday was almost exactly where it was before Carbonite dropped Limbaugh.

Several top insiders have sold shares recently, although not in numbers large enough to indicate an exit strategy, yet.  Carbonite also experienced an embarrasing service outage in late March just after announcing‘World Backup Day’.

The real test, however, will come when Carbonite makes its next quarterly SEC filing, which should reveal how Carbonite has fared in its key measures of subscriber growth and retention:

Once we acquire a customer, keeping them is of the utmost importance. Our quarterly retention rate has been strong historically, running around 96% to 97%. Retention is essential to profitability since we make most of our money after the first year, which was burdened by customer acquisition costs and initial support costs.

As I documented before, Limbaugh was a key part of Carbonite’s model.  Carbonite has taken to television and is heavily promoting discounts on its products to bring in new subscribers.

Has Carbonite accepted responsibility?  We’ll find out.

Carbonite’s Twitter account is @carbonite, and it has a Facebook page.

Update 4-11-2012 – Carbonite’s 1st Q 2012 results will be announced after the close of the markets on May 1, and there will be an open telephone conference call with David Friend at 5 p.m. Eastern that day, call in number 877-329-7568.


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“Once we acquire a customer, keeping them is of the utmost importance.”

Perhaps they should have practiced their own policy.

But continuing to advertise on Stern and MSNBC seems to beg the word “hypocrisy.”

    wodiej in reply to Scorpio51. | April 10, 2012 at 9:37 am

    As does Limbaugh since he preaches conservatism and then talks filthy about women on his show. Hypocrisy indeed.

      Ragspierre in reply to wodiej. | April 10, 2012 at 9:51 am

      I was listening…in context…and what Rush said was not “filthy”.

      But I have recently realized there are some really puritanical people commenting on conservative sites.

      Scorpio51 in reply to wodiej. | April 10, 2012 at 10:16 am

      Rush talks filthy about women? I must have missed that.

      Or perhaps, it was just “tongue firmly planted in cheek.”

      SmokeVanThorn in reply to wodiej. | April 10, 2012 at 1:03 pm

      What’s Soros paying you troll nowadays, wodiej?

      Mosonny in reply to wodiej. | April 10, 2012 at 1:09 pm

      wodiej, Rush did NOT “talk filthy” about women. He used a word and some language about the liar Sandra Fluke..and she is a proven liar, who claimed that she was going broke on contraception, claimed to really not know that she could get the pill for 9 dollars per month, spoke of how hundreds of her friends at the 41k/year school were also going broke on BCP prescriptions…sheesh. And then was shown to have taken a trip overseas with her fantastically rich boyfriend. The woman was a TOOL. Oh, and they presented her as she was 23, but she turned out to be a more mature 30.

      But that’s not the point, right? Rush used some harsh words to describe her. And…Rush apologized. He didn’t back down from his assertions about her, which he should not have, as he was correct. But the language itself wasn’t right and he DID apologize for acting like the liberals who have been far nastier and obscene in their use of foul language, and then try to say it’s ok because they are not spokespeople for anyone, as if Rush was the de factor head of the Republican party. Or they are mere entertainers and Rush is…what the hell IS Rush but an entertainer/pundit.

      So, conservatives are the hypocrites. Where are the apologies for the use of the words C**t, and many variations thereof? The lies about so many of the female Republican or conservative women? The nastiness….

      Not a single apology from any of the trolls of the Liberal punditocracy or “entertainment” complex or the politicians themselves.

      In the meantime…let’s talk about who walks the talk.

      One simple example.

      Who gives more money to charity, Dem/liberals or Repub/Conservatives?

      Dems are cheap and stingy. Hey, they pay taxes, that’s enough! Conservatives give and give and give, ON TOP of onerous taxes. Someone wrote a whole book about it and studies continue to support that.

      So, libs lie, curse, hypocritically are much nastier in language and are miserly with real charity to boot. And, defend the sickening language and tight hold on their wallets.

      Conservatives just give freely, and gosh, Rush apologized for his use of some over-the-top language even though I don’t believe he ever feared losing so much business, and in fact, of course, he’s doing better than ever since the Left tried to do this phony boycott on him.

      JackRussellTerrierist in reply to wodiej. | April 10, 2012 at 4:27 pm

      So….”slut” is only a filthy word when uttered by a conservative? Where was your lefty outrage when your comrades were having a field day calling Sarah Palin every foul name they could conjure, including “c__t”, saying all manner of foul things about her daughter, her infant son and grandchild? Where was your voice when your comrades were calling Tea Party people “teabaggers”? How about the things said about Michelle Bachman? Niki Haley? Christine O’Donnell? When it comes to conservative women, all you commies do is attack their sexuality and private lives. The left is a bunch of belly-crawling pit vipers, foul and evil.

      sablegsd in reply to wodiej. | April 10, 2012 at 7:10 pm

      What would you call an idiot that goes national with a lie about not being able to afford enough contraception to keep her skanky self from being punished with a baby?

      I call her a lying slut.
      Oh, her end game? Free gender change surgery!

Don’t excuse bad behavior with bad behavior. Limbaugh is reaping what he sowed. And if Carbonite has no integrity about where they advertise, why would Limbaugh be allowing them to advertise on his almighty show? Because like most celebrities and entertainers, it’s about the almighty dollar. This is an example of why liberalism is taking over the country. Conservatives dont’ practice what they preach.

    Scorpio51 in reply to wodiej. | April 10, 2012 at 10:19 am

    You are painting with a very broad brush in saying conservatives don’t practice what they preach.

    Care to give any examples? It’s not fair to lump up all together.

    Scorpio51 in reply to wodiej. | April 10, 2012 at 10:24 am

    Wodie, perhaps you should share your thoughts with Rush if that’s the way you feel.

    I don’t want someone else speaking on my behalf that I’m acting like a liberal.

    Milhouse in reply to wodiej. | April 10, 2012 at 2:05 pm

    What bad behaviour? The analogy between subsidising contraceptives and paying for sex was strained, and he withdrew it, but what exactly was “bad” about it? Fluke is still a whore, even if she doesn’t literally charge money for sex. Or maybe the correct analogy is to a pimp, since that is how she treated her lesbian friend (assuming this friend actually exists and the story she told is true).

“Has Carbonite accepted responsibility?”

Not certain what you mean there, Prof.

They can’t AVOID consequences, though being of a Collectivist bent, they can deny they exist.

The world of delusion is a lousy business environment, however.

Carbonite: the place people store back up copies of their data files so that anyone anywhere can look at them with ease….or with a court order in the case of criminal investigation.

Call me paranoid, but I was one of AOL’s first FTP and storage site customers. They they decided to quit that business per se … and notified none of their customers. In short, the files I had there disappeared into the ether.

I now use a FTP site that erases files after 14 days … and I only use it for non-personal business, just in case they don’t really erase anything.

If you choose to run around naked, don’t be surprised if people laugh and point ….

    Jake Blues in reply to Aridog. | April 10, 2012 at 11:57 am

    Carbonite uses 128-bit Blowfish encryption, which to my knowledge has never been cracked. I’m no expert, but that’s pretty good security. None of the off-site backup storage companies are unencrypted. I’m not a fan of Carbonite anymore, and when my subscription is up, I’ll be out of there, but it’s not fair to say “anyone anywhere can look at them with ease….or with a court order in the case of criminal investigation.”

      Aridog in reply to Jake Blues. | April 10, 2012 at 1:43 pm

      And if they discard the files or sell them, or use weak permissions & roles protocols and management? Or a renegade employee decides to make use of the information. Nothing is impervious to a handing if the key is provided or acquired.

      One is far better “protected” by a Raid Array of 1 or 2 levels, such as provided without additional software required by the Dell 390 series Precision Desktops, using specific Raid Array Intel Chip Set, plus a remotely located household backup drive via USB.

      If you job out your back up of critical data, to strangers, be prepared to lose it or have it compromised. You might be lucky, or not … it’s at best a crap shoot.

Midwest Rhino | April 10, 2012 at 10:20 am

Carbonite got a lot of publicity, and perhaps a few new liberal customers. But they certainly lost a lot of the customers they had paid good money to win over on Rush’s show.

I have to wonder if CARB didn’t get the stock bounce from a short covering rally, after the big drop. Or some rich liberals came in to save the stock, because they were so bold as to drop Rush. But they can’t go on losing a dollar a share, so they will need real customers at some point.

Excellent observation regarding the importance of customer retention in this now commoditized business. I quit Carbonite after the Rush fiasco (still in the trial period) and found better options elsewhere.

Nearly all Carbonite’s customers pay for one year up front due to substantial pre-pay discounts, and are reluctant to change mid-stream with the time-consuming initial data backup completed.

The true test will come when as customer’s pre-paid periods expires. Many Rush fans will be looking elsewhere and will find better bargains, as I did.

Carbonite also needs to invest heavily to keep up with more nimble competition (and potential deep-pocketed future competitors). Problem is, they’re still losing money big time and don’t have it to spend…

JimMtnViewCaUSA | April 10, 2012 at 11:33 am

Typo: “has faired” should be “has fared”.

Don’t forget to avoid Caesar’s Pizza, too. An easy task since their pizza is cr*ppy.

    William A. Jacobson in reply to JimMtnViewCaUSA. | April 10, 2012 at 11:41 am

    thanks, fixed

    1 percenters Illitch and family are of course sponsors of Obama, as are multiple 1 percenters across the country … Obaama is the man man looking out for the 1%, with key advice from other 1 percenters like Warren Buffet and Jeffy Immelt … and they all know his campaign rhetoric is bullshit for the 99%, and they’ll get their favored treatment if the Messiah is re-elected.

    Vis a vis Detroit … Illitch, Karmanos, Gilbert, Fisher, various Fords, et al have actually done some good things for Detroit, but you can bet your heiny that none of them live there or anywhere near close by.

JackRussellTerrierist | April 10, 2012 at 4:36 pm

I think it’s a little early to call the game in favor of Carbonite. It’s a subscription service. Let’s see what happens over time/through attrition as those subscriptions come due. My husband and I were considering a Carbonite account. Of course we no longer are. We refuse to feed the beast. A friend of ours who is an engineer told us about two weeks ago that he just closed his Carbonite account/let it lapse because of the Rush boycott.

Carbonite’s gaffe may impact them more deeply than is momentarily evident.

David Friend’s Carbonite business plan appears to be to dream of a pot-of-gold at the end-of-the-rainbow — sure that eventually he will cash in.

But Carbonite will run completely out of money in 2015 unless it stops losing $2 million per month.

The next four quarterly reports will tell the market what it needs to know about the “Limbaugh effect” … that is, the magnitude of the flight from Carbonite by Limbaugh listeners.

Carbonite spends a fortune on advertising. They could break even if they stopped all advertising. But could they hold their subscriber base?

CARB investors have already lost $100+ million. After seven years in business, isn’t it time for this company to begin to make some money? Otherwise, why buy NASDAQ:CARB when there are other companies that do not lose money?

Carbonite will lose another $100,000 today, as it did every business day during 2010-2011.

During 2007-2009, the daily losses were smaller … but not by much.

The average for the past 7 years has been about $60,000 per business day, so Carbonite’s losses have been accelerating.

Carbonite’s grand total cumulative losses are greater than $100 million.

Inquiring minds want to know: When will this stop?