Wharton Tech Blog

In light of recent gas pump sticker shocks, alternative fuel technologies are gaining in prominence. Toyota has hit the ball out of park with Prius hybrids and most of US manufacturers are announcing flexible fuel vehicles that can run on fuel containing 85% of ethanol (aka E85 formulation).

In general this is a good news for the environment, but in the short run, the brunt of the cost seems to fall on the consumer. Recently I have contemplated purchase of a new car, and as a part of decision making process I have traded off the variants of vehicles with conventional technology, hybrid technology and E85 flexible technology. Hybrids generally carry the price premium and with (my) average 5-year mileage become price compelling choice at average gas prices of $3.25. Your break-even may vary based on number of miles and highway/city mix. So, looking at future of high gas prices, this is a price compelling variant. Hey, and it makes me feel good that I am doing something to reduce the carbon emissions (even though I am a Terrapass member and hence drive emission-neutral vehicles).

E85 solution seems not nearly as price compelling. Flexible fuel vehicles are comparably priced to those running on regular gas. While E85 is generally lower priced than regular gasoline, it packs lower amount of energy per unit volume, so car consumption goes up by about 30%. Recent survey of Illinois gas stations (only Mid-Western states seem to publish E85 price survey data - if you know of a national price database, let me know) reveals that price discount for E85 relative to regular gas is only 11.5%. So, at $3.00 regular price, you’d be paying about $2.67 for E85. But, if you get 20 miles out of a gallon of regular gas, you’d get only about 14 out of E85. Thus E85 effective price per gallon is actually 26% higher than that of regular gas. In terms of carbon pollution, you can claim that you are releasing only 15% of new emissions (if you assume 100% of E85 emissions come from previously released carbon emissions captured by plants).

By eschewing conventional banner ads and flashy, er, Flash campaigns, Google has historically trailed Yahoo! in catering to the needs of traditional advertisers looking to increase brand awareness or improve positioning.

However, it looks like that is about to change.

Google’s personalized homepage offers a new module promoting the upcoming “The Da Vinci Code” movie that is part brainteaser, part contest, and all advertising.
It cleverly ties into Google’s history of creative recruiting, and it manages to promote both Google and the movie at the same time. I think we can expect to see more types of this opt-in branding from Google in the coming months.

At least it’s better having Pontiac co-opt your brand…