Tuesday, December 21, 2010

The Latest from TechCrunch

The Latest from TechCrunch

Link to TechCrunch

Google: Over 4 Million Users Have Downloaded At Least One Marketplace App

Posted: 20 Dec 2010 09:08 AM PST

Google just put up a post with a few interesting details and statistics about how its recently launched Apps Marketplace is performing amongst Google Apps users. Google says that 4 million Google Apps users have at least one Marketplace app installed on their domains. What’s interesting is that Google published the same number four months ago, so perhaps the marketplace isn’t growing by leaps and bounds.

Launched in March, the idea behind the marketplace was fairly simple—using a set of APIs, third-party apps could deeply integrate their products within Google Apps and offer these free or paid apps to the productivity suite's users. Google offers over 250 enterprise apps to users including Zoho, Socialwok, Aviary, Bantam Live and more.

Google says the Top Installed Categories on the App Marketplace include Project Management, CRM, and Accounting and Finance. The top ten apps downloaded in order are Manymoon, Insightly, Zoho CRM, Aviary Design Suite, Mavenlink, Outright, MailChimp, RapidTask, Insync and myERP.com.

As we wrote a few months ago, there are mixed reviews on how apps are actually performing on the marketplace. As a whole developers seem happy to be associated with Google, but some developers who were pilot partners told us that downloads dropped after the initial launch of the marketplace. Others complained about the massive amount of noise on the marketplace in terms of a large amount of applications to choose from.

It’s still unclear how much money developers can actually make from the marketplace. All the apps on the list offer a free plan; some charge if you exceed a certain number of users. I’d be interested in seeing what percentage of users are downloading paid apps vs. free apps on the marketplace. And of course, one telling data point would be how actively the apps are being used in the marketplace once they are downloaded.



A Little Bling For Your Holiday: Hands On With Ulysee Nardin’s $1.1 Million Watch

Posted: 20 Dec 2010 08:50 AM PST

Only a few more days ’til Christmas and time’s running out! This year, instead of mucking about with a pasta maker or a handsome bathrobe, why not tell the one you love how you really feel – with a violently expensive diamond-studded watch. This $1.1 million timepiece is covered in pave diamonds and sapphires and the entire torubillon movement is suspended on a plate of pure sapphire. While you and I can laugh at the price tag, the fact that they were able to drill and attach all of the moving parts to a sheet of gemstone is pretty darn impressive, at least from a technical perspective.

Presumably those in the market for this handsome and stylish timepiece aren’t thinking about cost but, if I may be so bold, I’d recommend that you also hire full-time security for the SO who will be receiving this item this year. Perhaps you can slash a bit of the caviar budget and let the cats go a bit hungry this year.

Click through for video.



Under Arrest: The Author Of That Pedophilia Book Amazon Banned

Posted: 20 Dec 2010 08:34 AM PST

Remember that vile ebook “The Pedophile's Guide to Love and Pleasure: A Child-Lover’s Code of Conduct” that briefly topped Amazon’s top 100 bestsellers lists, only to be pulled following massive customer and media pressure on the Internet retailer?

Well, according to Florida’s News 13, the author of the book, Phillip R. Greaves II, was arrested today for violation of obscenity laws.

According to the news outlet, Polk County Sheriff’s Office, along with authorities in Pueblo, Colorado, have arrested the mentally unstable man on third-degree felony charges, which are punishable by up to 30 years in prison in the state of Florida.

Polk Sheriff Grady Judd told News 13 that detectives who were investigating the case researched the book and inquired about receiving a copy, ultimately leading to the arrest.

“He wrote this book specifically to teach people how to molest and rape children,” Judd said. “You cannot engage in or depict children in a harmful light.”

Greaves could be extradited to Polk County as soon as today.

(Thanks to Auston Bunsen for the tip)



12 Days Of Christmas: Boxee Box Giveaway

Posted: 20 Dec 2010 08:15 AM PST

The Boxee Box will certainly bring joy and merriment to your holiday. It is with out question one of my favorite gadgets of 2010 and so I’m really excited that we can give one away to a lucky reader. It’s a wonderful device that while not without faults, is still pleasing and fun to use. So how do you win one of these wonderful devices? Click through for the rules and instructions.

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WITN: Yeah, We’re Getting Some Annoying Feedback From The Mike…

Posted: 20 Dec 2010 07:55 AM PST

You can always rely on Mike Arrington to liven up a dull editon of Why Is This News. There we were, gamely ploughing through the taping of this week’s episode, only slightly hindered by the fact that Paul had chosen the world’s least interesting subject – Rupert Murdoch’s forthcoming digital newspaper – to talk about, when all hell suddenly broke loose.

Mike, with his trademark disregard for the sanctity of the studio, had decided to walk in and take over the role of makeup artist and cameraman. Not since our ill-fated interview with Vineet Devaiah has TCTV seen such chaos. Surely TechCrunch’s gain is the Vaudeville’s  loss.

So, anyway, yes, a slightly odd Christmas edition of WITN. As ever, do feel free to demand an apology from Mike, Paul, Sarah or all of the above in the comments. After all, we serve at your pleasure, loyal viewers.

Merry Christmas!



Conversation Sharing Platform Bnter Opens Up API

Posted: 20 Dec 2010 07:50 AM PST

Conversation sharing platform Bnter, which initially launched in November, is opening up its API today. Since the web and mobile app’s launch, Bnter has seen thousands of users share their conversations.

Initially launched as a way to post and share your text message conversations with friends, Bnter has broadened its scope from SMS to include any sort of conversation, including GChat, in-person chat, email and more. The app itself allows you to copy and past messages, and then creates a dialogue.

You can share the conversations with your friends and users can follow other friends to see their text updates (you can find friends via Facebook Connect and Twitter). And you can comment on other message exchanges and tag conversations by subject matter and user.

Bnter’s API will be free for developers and co-founder Lauren Leto says that the startup is in talks to integrate the platform into a number of services but can’t reveal who the services are yet. Bnter has raised seed funding from a number of high-profile investors including Founder Collective (Chris Dixon), SV Angel (David Lee), High Line Venture Partners (Shana Fisher).



Amazon Vet Jason Child Joins Groupon As CFO

Posted: 20 Dec 2010 07:11 AM PST

A major steal for Groupon: after roughly 12 years at Amazon, Jason Child is joining the red hot social commerce startup as chief financial officer.

Child was most recently Vice President of Finance for Amazon.com’s $14 billion International business.

Previously, Jason held key finance leadership roles for Amazon in Germany and Japan, also serving in Investor Relations, Technology, Marketing and as Worldwide Corporate Controller.

Prior to Amazon, he spent more than seven years at Arthur Andersen where he was a CPA and Consulting Manager.

Here’s Child’s comment on his move:

"Groupon is one of the most amazing businesses I have ever seen. I am thrilled to join a great team that is attacking one of the biggest opportunities in e-commerce today."

Child and his family have relocated from Seattle to Chicago, where Groupon is based.

Groupon of course just spurned a $6 billion buy-out offer from Google, which means they’re likely to go for a home run and turn to the public markets in the near future.

The recruitment of a seasoned exec like Child further solidifies these predictions.

Bloomberg recently reported that Groupon may, however, raise more funding before taking the IPO route, seeking several hundreds of millions of dollars in financing that would value the company at south of $6 billion.



2010 In Review: Videos Where We Hoon Around In Cars

Posted: 20 Dec 2010 06:45 AM PST

2010 marked the year where we here at CrunchGear finally started taking the technology in today’s hottest vehicles seriously. And why not, really? The infotainment stack and in-car technology systems within some vehicles are stunning. It’s remarkable to think that just nine years ago, XM Radio alone was considered the best you could get in a car. Now it’s nearly standard along with Bluetooth streaming and GPS navigation. It’s systems like 4-wheel steer, customizable dash clusters and electronically-controlled terrain management that are leading the pack.

We’re gearing up for even more coverage next year, but until then, click through for our favorite auto-themed videos of the year.

Read More



Steve Jobs, Jeff Bezos And Priceline CEO Jeff Boyd In Top 5 “Wealth Creators” List

Posted: 20 Dec 2010 06:20 AM PST

Chief Executive magazine and Applied Finance Group have published their third annual ranking of CEO “wealth creators” and “wealth destroyers”.

In the former category, the list of top 5 performers includes Priceline.com CEO Jeff Boyd, Apple CEO Steve Jobs and Amazon.com CEO Jeff Bezos (see full list here).

What does that tell us, apart from the fact that it apparently helps being named Jeffrey?

The wealth creation index put together by Chief Executive and AFG attempts to identify those business leaders who have performed best in creating true economic value as measured by GAAP metrics – as opposed to mere accounting value. It leans heavily on the concept of economic margin (aka EM), measuring the degree to which a company makes money in excess of its risk-adjusted cost of capital.

The ranking focuses on the performance of companies (and their chief execs) in the S&P 500 index for the three years that ended on June 30, 2010. It’s based on reported results during that period and estimates for the next 12 months.

Here’s what makes Priceline, which entered the S&P 500 this year, stand out:

The company’s EM had been dragged down in earlier years, but was consistently high in more recent years. It has also had tremendous success in moving its U.S. business model to international markets, with non-U.S. revenue doubling last year to top U.S. revenue.

In addition, Priceline kept its operating costs in check, limiting them to 20 percent of year-on-year growth while pursuing an industry-leading growth in revenues of 27 percent. This allowed the firm to take market share from Expedia, another high scorer.

Less stellar performances in the technology/media space were logged by Computer Sciences’ Michael W. Laphen and Washington Post’s Donald E. Graham.



Foursquare Checks In Comments And Pictures; Instagram, PicPlz, Foodspotting On Board

Posted: 20 Dec 2010 06:15 AM PST

Earlier this month, location-based service Gowalla went on the offensive against rival Foursquareby linking up with them. Yes, they created a way for you to use Gowalla to check-in on Foursquare (and Facebook). Why would they do that? Because they said that users told them they felt the Gowalla experience was better, but many of their friends were already using Foursquare. So what did that Gowalla experience include that Foursquare didn’t? Well, comments and pictures, for starters. Well, you can strike both of those off the list today.

Yes, Foursquare is finally adding both highly requested features to the service. At first, they’ll be available on the iPhone app and the website, but the plan is to quickly get them to Android (next week, we’re told) and BlackBerry (next month). And the service has three other high-profile startups on board at launch to help with the picture element: Instagram, PicPlz, and Foodspotting.

So how will it all work? Well, now when you check-in to a venue on Foursquare, you can also take a picture and attach it to that venue. You can also attach pictures to the Tips area of a venue. These pictures will be public. Or you can actually actually check-in with a photo, and that photo will only be visibile to your friends on the service (or other services if you choose to tweet them out or post them to Facebook).

Comments are a bit different. Those can be left on a check-in in your stream and are only visible to your friends and to their friends (so it doesn’t look like they’re talking to no one). Foursquare envisions that this feature will allow the service to become even more social both online and offline as there will obviously be some fun discussions on odd check-ins, and you’ll also now be able to see friends who are nearby and comment on their check-ins to set up a meetup.

And now that Foursquare supports photos, you can use Instagram, PicPlz, and Foodspotting to send them directly while at the same time checking-in. PicPlz should work right away for Android and iPhone, while Instagram and Foodspotting will be iPhone-only for now (as both are currently only available on the iPhone). The Foodspotting integration could be particularly interesting since the point of that service is to show the best food at various venues.

Foursquare plans to flesh-out these features a bit more alongside their developer community early next year. One other feature due soon is the ability to export your Foursquare pictures to both Facebook and Flickr, we’re told. They’re also planning a better way to keep track of comments coming in on your check-ins, and thinking about a way to upload and store older photos that you’d like tagged to specific place.

Look for the latest Foursquare iPhone app (and the other apps mentioned) with these new features in the App Store shortly.



Hotel Tonight Fulfills Some of Paul Carr’s Fantasies (Actually Safe for Work)

Posted: 20 Dec 2010 06:01 AM PST

A few weeks ago Paul Carr and I had one of our many bitch sessions about the woeful state of the online travel industry– particularly as it pertains to hotels. My dream company was one that gave you an envelope of essentials upon arrival in a new country– things like a local burner phone with your hotel number programmed in, a metro card and small local bills for tipping. Paul’s dream company was a place where you could book very last minute hotel rooms all for one set price.

Hotel Tonight is almost Paul’s dream company. In fact, I like it better. It quietly launched on the iPhone and is a simple way to do just what the name says, book a bargin hotel at the last minute for one night. So far it is live in New York, San Francisco and Los Angeles and groups its hotels into three categories: Hip, elegant or basic. I was hard pressed to come up with a hotel that didn’t fit in one of those three categories– and they’re so much clearer than “luxury” which everyone in the hotel industry throws around but few truly posses.

Because it’s a last minute buy and it’s only for one night, you can get some great deals– roughly what you’d get on Priceline or HotWire, and you get to see the names before booking. Right now there are more than fifty hotels in the system and some current deals include $159/night at Ace NYC, San Francisco’s Nikko for $120 a  night, and the Thompson Beverly Hills in Hollywood for $149 a night.

Hotel Tonight was incubated in a company called DealBase, a competitor to Kayak. Hotel Tonight founder CEO Sam Shank originally was just looking to build an iPhone version for the site. But he found for it to really utilize the mobile medium, he needed something built from the ground up in a different way– even building a new backend system. Interestingly Hotel Tonight isn’t much of an aggregator, it’s a throwback to the online travel agents that aggregators like Kayak and DealBase disrupted.

Hotel Tonight doesn’t flood you with information, rather it gives you the basics you’d need to know when you are headed to a hotel for the night. Things like whether it offers roomservice and how much the cheeseburger is, or whether there’s a mini-bar and what’s in it. (Too pricey and you might run by an In-and-Out and a liquor store on the way.) Staff members have stayed in all the hotels and written the simple editorial content themselves.

Shank has measured that it takes 80 taps the first time you set up an account and book a room, versus 300 taps for a computer-based online travel agency. On a second visit it takes just four taps and under ten seconds, versus 100 taps for a computer-based online travel agency.

The most obvious question is how many people want to book a hotel at the last minute, but Priceline says it’s a whopping 80% of their bookings. Shank expects more staycations and last minute local hotel purhcases, say if your in-laws are driving you nuts or you’ve had too much to drink at that Holiday party. Just like other iPhone apps have convinced people it’s ok to be spontaeous with entertainment and dining, he’s hoping the app will encourage people to be more spontaneous travelers.

Of course, for that to happen Hotel Tonight has to have very solid inventory and always have good deals in stock for every city in which it operates. If someone gets burned once at the last minute and has to scramble for a place to sleep, they won’t want to rely on the service again.

What would worry me more is how much money and time it’ll take Hotel Tonight to expand to a meaningful enough number of cities to make it a popular, well-known default app when someone needs a good deal at the last minute. I can think of a hundred times in the last year I would have used this service, but none of the examples were in New York, San Francisco or LA. Like OpenTable or Yelp learned, building local network effects can be a long slog. But I love to see anyone solving the hotel market with more than aggregation and crowd sourcing.



Professional Social Network LinkedIn Takes Groups Public

Posted: 20 Dec 2010 06:00 AM PST

Launched in August of 2009, LinkedIn Groups allows anyone on the professional social network to create a forum around a specific subject or profession where users can comment and share news and information. In June, LinkedIn spruced up the Groups feature, adding the ability to like a discussion, follow a group and more. As of today, LinkedIn had over 750,000 groups on the platform.

Today, the social network, which now has 85 million users, is opening up Groups to the public, allowing administrators to make discussions searchable on the web and on LinkedIn. For public groups, any LinkedInmember can view a group’s discussion if he or she is not a member of the particular group. LinkedIn is also allowing users to share links to discussions from Groups on Twitter and Facebook.

Admins can also restrict a Group’s privacy. If an admin switches to an Open Group, LinkedIn will let all members know about the change and future discussions will be viewable online. Past discussions from the private time period will be accessible to the group’s members, through a members-only archive.

The Groups feature already resembled a Facebook-like interface, aiming to bring social conversations to the professional network. But by opening Groups to the public, LinkedIn is allowing users to spread the conversation around the web, which could help the network become more of a social destination as opposed to simply a networking hub. Here’s an example of TED’s open Group.



The Nightmare Of Anti-Net Neutrality: Carriers Mull Charging Fees Per Service

Posted: 20 Dec 2010 05:45 AM PST


This story is a bit old by now but it’s a doozy. Essentially, what you see here is a presentation slide from Allot and the ironically-named Openet handed out at FierceWireless describing a potential wireless money-maker – tiered, fee-based access to web services on a subscriber basis. Want YouTube? That costs a few pennies per megabyte. Love you some Facebook? Five dollars a month, please! The upside, as they say, is endless!

Although no one is currently considering implementing these features, this has been a long-time dream for many carriers and is probably the first step in the slow erosion of user’s rights.



Mint.com Hits The Books; Offers Personal Finance Curriculum To Students

Posted: 20 Dec 2010 05:00 AM PST

Intuit-owned Mint.com is heading to schools today with the launch of a free, online program designed to educate middle-school students about personal finance and financial management.

Mint has partnered with educational publisher Scholastic to develop materials that parents and teachers can use to teach children the ins and outs of personal finance management. The materials includes lesson plans as well as an interactive game, to teach children money management, budgeting and goals.

For example, the program teaches children the concept of compound interest with real-life math problems, and encourages children to set goals and budgets with their own current work opportunities (i.e. babysitting).

Mint says the curriculum will be expanded to 30,000 classrooms nationwide early next year. Considering the state of the economy and credit, teaching children financial literacy and sounds personal finance practices at an early edge is an incredibly important initiative. In terms of branding, this is a big win for Mint, which can start building awareness of its tools among students at an early age.



Mass Relevance Raises $1.7 Million For Brand-Focused Social Syndication Service

Posted: 20 Dec 2010 04:58 AM PST

Newly launched startup Mass Relevance has raised $1.7 million in Series A Funding from FLOODGATE and Austin Ventures.

Mass Relevance is a cloud-based platform for managing and broadcasting content via social platforms. The company says that it aggregates and curates content with social context to help brands deliver “actionable results.” The company’s first product, TweetRiver, is a social syndication platform for Twitter that allows brands to curate and filter Tweets around content.

So marketers could present a particular video and the platform will analyze the content and build conversations from Twitter around the content. The application is already being tested by NBC Sports, Samsung, Cisco and RIM.

As more brands and media companies turn to Twitter and other social platforms to tune into consumer conversations, Mass Relevance will no doubt find an audience for its products. But this is a crowded space where a number of players, including Twitter, are offering analytics and curation tools for brands. That being said, Mass Relevance has the experience (its co-founder was the former CMO of Bazaarvoice and a Dell exec previously) and a few big-name clients under its belt.



Qualcomm To Sell Spectrum Licenses To AT&T For $2B, Kill FLO TV In March 2011

Posted: 20 Dec 2010 04:45 AM PST

Qualcomm has just announced that it has agreed to sell its Lower 700 MHz D and E Block U.S. spectrum licenses to AT&T for a whopping $1.925 billion, following its previously announced plan to restructure and evaluate strategic options related to its FLO TV business. The company expects to shutter its FLO TV business and network in March 2011.


EarthLink Buys Telecom Services Company One Communications For $370 Million

Posted: 20 Dec 2010 04:36 AM PST

EarthLink this morning announced that it will acquire telecom services provider One Communications for $370 million, which includes payment of roughly $285 million of the latter's net debt. One Comm stockholders have the right to elect to receive the net merger consideration in the form of cash or EarthLink common stock. The merger has been approved by the Boards of Directors of both companies and the stockholders of One Communications.


Report: Blogger Most Reliable Blogging Platform As Tumblr Tumbles On

Posted: 20 Dec 2010 02:24 AM PST

Uptime monitoring service Pingdom has tested five major blogging services for their reliability. Unsurprisingly given its recent woes, micro-blogging startup Tumblr received a disastrous score, while Google’s Blogger came up on top with not a second of downtime.

Pingdom’s tests were performed once a minute over a period of two months, from October 15 to December 15, from multiple locations in both North America and Europe. Included in the tests were Blogger, WordPress.com, Typepad, Tumblr and Posterous. Not only the uptime of the blogging platform’s homepage was monitored, but also four individual blogs.

Pingdom found that Blogger didn’t seem to display any downtime whatsoever in the two months of testing, while WordPress.com also showed an ability to remain available most of the time. Typepad came up third, but not with a lot of difference from the two former blogging service.

When you look at the upstart, basic blogging services, the differences become more clear. Posterous showed mixed results in terms of reliability, but Tumblr clearly takes the downtime cake on that level.

According to Pingdom, some of the Tumblr blogs it monitored during the two-month window were unavailable for more than two days, beating the general downtime of the platform of 24+ hours Tumblr struggled with last week.

Clearly, the startup can use the recent capital injection to improve reliability quite a bit:

However, it should be noted that Tumblr's problems haven't just been a few big outages, but a large number of smaller ones. The Tumblr blogs we monitored had an average of more than 300 outages during these two months, some very brief, indicating an ongoing performance issue with the service.



Breaking: eBay Acquires Brands4Friends Private Sales Site For $200 Million

Posted: 20 Dec 2010 01:39 AM PST

Germany’s largest fashion club has just been acquired by eBay for a whopping $200 million (€150 million). Although eBay’s acquisitions have almost stalled since the failed take-over of Skype, this strategic transaction makes sense.

brands4friends, founded in 2007, has seen strong growth over the past few years and has operations in multiple European countries. Mangrove Capital Partners and Partech have been among the investors and its Berlin office employees around 200 people.



Dear Facebook, Please Return Our Social Networking Space

Posted: 19 Dec 2010 07:31 PM PST

The following is a guest post by David Dalka. Dalka is a digital business strategist and keynote speaker who was a member of BlackRock (BLK) during its hyper-growth phase of 80 to 800 people. He is a top ten contributor to CrunchBase, strategist to senior executives on how digital marketing tactics are transforming business strategy and revenue generation, blogger and is currently working on a nonfiction business book proposal. According to TechCrunch Editor Michael Arrington, Dalka currently lives in a location of "horrendous weather eight months out of the year". (Editor's note: Maybe you can entice him to move somewhere else? Seriously, we really do pity him.) Photo courtesy of 2010 Internet Hungary conference.

About a month ago there was a loud outcry when Facebook inexplicably introduced a smaller font size to its News Feed. The lack of communication from Facebook while making a significant change is sadly nothing new. You could tell that the angry and highly upset Facebook users that day knew instinctively that this event was not in their best interest.

A month later, hidden behind all the public relations hoopla regarding Mark Zuckerberg's chat with former President Bush and appearance on 60 Minutes, I finally realized the motive for last month's text size reduction. It appears that the smaller text size was set up to pre-condition users for the larger coverage area of ads on the screen by making the ad columns wider, thus allowing more ads to be shown above the fold and closer to your newsstream. Do they actually disrespect your personal space that much? Is this how little (pun totally intended) Facebook thinks of you, their userbase? Unfortunately, the answer seems to be yes.

This conversation is about much, much more than Facebook. Linkedin reducing your ability to search your social network, Yelp reportedly using high pressure tactics to sell ads, Twitter's promoted tweets, etc. Only you have the power to end this cycle of abuse by social networks and it is time for the web community to stand up and shout that they are sick and tired of constant terms of service changes, privacy changes, steps backward in usability that degrade our mutual experience, comfort level with the sites we use and our enjoyment of the web. Some people like Shel Israel have asked that Mark Zuckerberg step down as CEO of Facebook. That is not the point of this post. The point of this post is to help social media users understand how startups lacking well thought out and viable data, business and revenue models are the root cause of the symptom of constantly oscillating user experiences. It is my hope that you will reject the new profiles.

It appears that the changes in screen real estate usage are between the old Facebook profile and the new Facebook profile are significant. TechCrunch techs estimated the pixel usage changes for this purpose. It’s tricky to measure the differences — with the new profile Facebook has actually adjusted the total size of the profile (increased by around 20 pixels), and has tweaked all of the profile elements, including photos and the Wall, and there’s also the issue of how much whitespace to measure. But what is clear is that there has been a significant reduction in your social media experiences with your friends.

In the old version, the ads had a photo with text underneath and now the text is alongside the photo. The old edition had an ad width of about 160 pixels while the new edition now clocks in around 245 pixels, a ~53% increase in ad width – yikes! The ads are now around 140 pixels high compared to around 230 pixels previously. While the overall size of the ads has not changed very much, they appear denser and more of them can now be seen above the fold. Amazingly, the new ad sizes have been mentioned favorably in certain circles.


Even more interesting is that the ad text size is the same as before while your wall font is smaller, which means you are more likely to be distracted by the ads. An offline analogy might be when a television channel turns down the volume of their shows, while keeping the volume of commercials higher.

As I stated in a recent podcast interview with Peter Clayton, regardless of whether you are an individual or managing a business, you do not own your terms of service on a social networking site. Think of it this way, a social networking profile is like an apartment, while a web site built on a domain you own is property that belongs to you. You don't see too many people rent an apartment and then invest $20,000 in remodeling the kitchen do you? This is because the improvement in property is not owned by the individual and the future values of the improvements are highly uncertain.

The same is true of social networking sites. This is typically not seen as a problem by individuals. It also goes unnoticed by most traditional brand marketers as they are used to expiring, non-measurable media in the pre-Internet era of marketing and often not held accountable by senior management. Once fully understood by senior business executives, the microeconomics of marketing channels has emerging implications for enterprise business strategy, marketing budget resource allocation and eventual redefinition of the skill sets required to lead businesses into the future successfully.


The first phase of the web focused too much on business ideas without technology execution, the web 2.0 phase was skewed towards technology without a tight correlation with business results. For our economy to thrive and the USA's standard of living to be maintained, it is important that the proper balance between business monetization model and technology to ultimately occur sooner rather than later.

Here is a brief list of concepts that should be considered to make our society conserve scarce capital and allocate funding resources efficiently:

- Users should demand that social networks stop abusing their rights – with constant nontransparent terms of service and user experience changes, social media users are being whipsawed. This is not sustainable. It starts with you demanding better treatment not only from Facebook but also from all social networks.

- Venture capital should require viable revenue model path explanations – The Businessweek article, The "Lost Decade" for Venture Capital states,

Unfortunately, they ran into a giant negative coin flip—everything was delayed a lot longer than they expected. Thus all the money-eating startups, and the general reluctance of VCs to stick their neck out.

It is my belief that is a symptom of certain venture capital professionals not focusing tightly enough on data models and potential revenue models prior to funding rounds. If I'm ever a limited partner at a venture capital fund, one of the questions I'll be asking is "Please explain three to five potential revenue model paths that could work with your concept?" I don't expect them to be right and I don't actually expect them to be the one that works out. What I would expect is for the entrepreneur to have a focus on executing with low cash burn rates and have a passion for solving the monetization problem.

Stated another way, if they aren't focused on building a sustainable revenue model as a core passion before the venture capitalist writes a check, when will they ever be? Think about more companies like TC40 company mint.com. Companies should have their data and potential monetization paths organized prior to funding events occurring. To be clear, these do not need to be implemented on day one; however the infrastructure of the startup should be properly designed to enable this data and revenue generation vision from day one.
Yes, there are exceptions to this rule. For example, Sergei and Larry likely never envisioned Adwords when they started Google, but that was a one in a billion exception. My point is that it is the exception, not the norm. Valuations not based on actual cash flows and/or audited revenue numbers need to be viewed with a much higher level of scrutiny.

"Google, Yahoo!, Microsoft, Ebay will buy it " is likely NOT a valid business model any longer – eBay bought stumbleupon.com for $75 Million then spun it off for $29 million two years later. eBay also disposed of a large chunk of Skype after not meeting the acquisition objectives for it. TechCrunch has written in detail about this previously. Kudos to eBay CEO John Donahue for recognizing the issues and having his management team take swift action to put closure on the issues. It would appear that the days of eBay buying things without revenue models is now behind it.

The ongoing drama involving MyBlogLog and Delicious could also be attributed to lack of a viable monetization model before acquisition or Yahoo’s inability to change the data model to create one after acquisition. Delicious, once the data was normalized and reconfigured, had realistic potential to be an awesome blog content relevancy engine. Unless something major changes, it would appear that Yahoo! will not be buying any non-revenue generating start ups anytime soon.
Google walked away from buying Digg as reported by TechCrunch. Could it be that Google's acquisition team saw a Stumbleupon or Delicious type scenario on the horizon? We'll never know for sure, but it's an interesting question to revisit at this juncture.

To prevent future situations like this, the startup community should encourage the design and funding of companies with long term sustainable data and revenue models that respect the user experiences, companies capable of standing on their own two legs and having viable initial public offering (IPO) potential that could withstand the test of a financial audit.

- For the same reasons, Google should resist overreacting to social media – To be clear, this problem affects many established companies investing in new projects.

Nick O'Neil wrote a post in August entitled, The Center of the Google vs. Facebook War: The Like Button, he stated,

By now it has become well known that Google is planning a competitor to Facebook. While many believe that it may be too little too late for Google, the reality is that it's a matter of survival for the company at this point.

Sometimes social media hype prevents analysis of the actual facts. Google appears on track to exceed $8 Billion dollars in net income, an increase over 2009's $6.52 Billion in net income audited by Ernst & Young. One of Google's risks is new innovation from within that disrupts its primary cash cow and as such, Google will likely survive just fine regardless of anything Facebook does and Google doesn’t match with a reaction. In fact, it likely has a higher chance of survival.

To be clear, investments in startups without a focus on monetization from the start are having cross over effects in the mainstream business community. Executive leadership teams in companies both large and small need to align their business strategy and marketing budgets to the new realities of content and communication in our society to prevent future business failure. Corporate marketing budget allocation and executive team skill selection are way behind these emerging realities. This needs to change.

When a start up focuses on viable revenue models and provide a valuable, long term service from inception everyone wins – users, businesses, investors and the overall economy. It is vital to a focus on funding concepts with potential long-term revenue models capable of creating sustainable value to customers and long term cash flows that can withstand a financial audit, provide a valuation based on valid fundamentals of finance and capable of becoming companies capable of initial public stock offerings. The alternative path is a never ending cycle of takeover, heartbreak and destruction.



Flirting Social Network Likealittle Hits 20M Pageviews In 6 Weeks

Posted: 19 Dec 2010 06:29 PM PST

If you were paying attention to Hacker News this weekend, you may have seen both the following post advertising “YC W11 Startup Social Network, 20M Pageviews in 6 Wks, Hiring Hackers/Designers” and the subsequent thread trying to determine which startup it was both go popular within hours of each other.

Since the job post, amateur and not so amateur Internet sleuths (myself included) have put together the various pieces of the puzzle and figured out that the startup in question is Likealittle, a YC-backed “flirting-facilitator platform” launched  by former Googlers and Microsofties Evan ReasPrasanna Sankaranarayanan and Shubham Mittal on October 27th. I’ve also verified this with a source close to the matter.

The original Hacker News thread grabbed our attention with following impressive growth statistic “In just 6 weeks since launch, we have over 20M pageviews (now over 1M a day and growing fast) and hundreds of thousands of daily uniques. Our virality index is higher than Facebook’s in their fastest growth stage.” While Likealittle’s “virality index” claim might be a little hard to prove, hundreds of thousands of daily uniques is formidable, adding up to likely over one million monthly uniques in my estimate.

A Craigslist “Missed Connections” for the college set, Likealittle works by letting you post flirty descriptions and comments anonymously or login to start an account. I’m thinking the anonymous element is why the pageviews are so high and why the HN post didn’t focus on unique users. What keeps people keep coming back to Likealittle is the compulsion to check the discussion around their updates and comments as well as check whether or not someone has mentioned somebody that looks like them.

The advantages to having a Likealittle account over being anonymous include being able to follow a certain location, like a dorm, library or a class that you’re in and keep track of what you’re following. Users can also send and receive messages and take down any comments or updates they feel are abusive just by confirming their school email address. To keep up the positive environment, all randomly generated usernames are fruit-based like “Apple” or “Pomegranate.”

When I emailed the relentlesshackers@gmail.com email address associated with the original HN post it wasn’t very helpful, responding “Trying to be stealthy for the moment.” But founders Reas, Sankaranarayanan and Mittal have given multiple in-depth interviews to a campus publications and it seems like avoiding the tech press is just another part of the viral campus infiltration strategy.

Reas recently told The Stanford Review that he hopes Likealittle “Can be a huge business, can change the world, and affect a lot of people at the same time." Hmm … Kind of reminds me of another social network that blew up on campus.




Why Sunsetting Delicious Matters

Posted: 19 Dec 2010 03:26 PM PST

Yahoo, which earned $1.6 billion in revenue last quarter, is “sunsetting” Delicious because the unprofitable acquisition “is not a strategic fit“. The tech and blogger community, along with Delicious fans, are crying ‘no.’ Michael Arrington says Yahoo is in “absolute disarray“. Even though Yahoo’s Delicious home page says it’s “the biggest collection of bookmarks in the universe”, many most internet users have probably never heard of the social bookmarking site. So, what’s the big deal? Forget all the PR blunders for a moment and the significant damage its done to consumer confidence. Here’s why it matters.

Yahoo bought Delicious in 2005. At the time, a post on the Delicious blog said:

We’re proud to announce that del.icio.us has joined the Yahoo! family. Together we’ll continue to improve how people discover, remember and share on the Internet, with a big emphasis on the power of community. We’re excited to be working with the Yahoo! Search team – they definitely get social systems and their potential to change the web. (We’re also excited to be joining our fraternal twin Flickr!)

I look forward to continuing my vision of social and community memory, and taking it to the next level with the del.icio.us community and Yahoo!

Note: The original blog post, cited when TechCrunch story broke the story, is of course dead. But thanks to web.archive.org, it’s still available.

Well, that part about taking it to the next level didn’t quite work out.

At the time of the acquisition, Delicious was one of the first exciting Web 2.0 companies. A product that could help the Web 1.0 portals, like Yahoo and AOL, evolve and take advantage of the soon-to-be tsunami of social. Techcrunch wrote “Yahoo, in addition to launching a flurry of new products in the last few months (and the pace seems to be accelerating), now owns the two most important tagging properties on the web – flickr and del.icio.us.”

When I first learned about Delicious, pre-Yahoo acquisition, I was very impressed. I thought it was great and even told friends about it. But, the service didn’t innovate much. Somehow, I learned about Diigo, which took social bookmarking to a new level, with many new and useful features. So, i exported my bookmarks to Diigo. Turns out, there are now many alternatives to Delicious.

It’s kind of shocking that a company with the resources of Yahoo couldn’t innovate and turn the site into a success. The founder of delicious, Joshua Schachter left Yahoo in 2008. He wrote a comment on the TechCrunch blog saying:

I was largely sidelined by the decisions of my management. So that was mostly the result rather than the cause, if that makes sense. It was an incredibly frustrating experience.

It’s not unusual for a founder to leave a few years after being acquired. And it’s pretty common to hear from current and former Yahoos that internal innovation efforts can be frustrating, despite some corporate initiatives to change that. To be fair, innovation can be frustrating experience at any company, big or small. When you own the company, of course, it’s much easier to get over the frustrations and focus on your vision and the reward.

But, here’s the problem.

In defending its decision to sunset Delicious, Yahoo wrote:

We believe there is a ideal home for Delicious outside of the company where it can be resourced to the level where it can be competitive… We believe there is a home outside the company that would make more sense for the service and our users.

Why can’t there be a home for Delicious (and potentially others like it) at Yahoo. There’s a whole slew of startups, without the power or baggage of Yahoo trying to compete in this space, or close to this space. Some of them, and their investors must think it can be profitable.

Why couldn’t Yahoo have a small team devoted to this and keep on innovating? Or at Yahoo, would there need to be tons of managers, VP’s, GM’s etc for such a project, with many levels of approval needed to get anything done. It can’t be as complex as search. (See Microsoft-Yahoo search deal, where Microsoft powers Yahoo search.)

A small team of developers should be able to run the system and make improvements. It could be done for a million or so a year in headcount. Then, probably a couple million more in infrastructure. To put that in perspective, in the last fiscal year, Yahoo spent $1.2 billion on product development.

After this week’s 4% staff layoffs, they still have around 13,540 worldwide employees. That presumably includes some staff at “Yahoo For Good,” whose mission is to empower people to make a positive impact.” Perhaps, it’s wildly profitable. I don’t really want to knock a site that encourages going green or spreading kindness. If you ran Yahoo!, which would be your priority, a social bookmarking site or spreading kindness?

Perhaps, one reason why Yahoo doesn’t innovate is the current culture. As former Yahoo-er Chad Dickerson wrote, “Yahoo! often got stuck doing PowerPoints about strategy instead of writing code and shipping products.” When Jerry and David started Yahoo, it was much more about writing code and innovation. When you have 600 million users, that gets harder.

There is still a lot of potential for a site like Delicious. Kevin Rose, founder of Digg, tweeted this week “I’d really like to buy del.icio.us and make a seriously rad social bookmarking site, screenshot archives of bookmarks/audio annotations etc.”

Some argue that sunsetting Delicious “makes eminent sense.” Of course, a company is wise to “stanch the bleeding” and shut down assets and re-focus on a new strategy (if it has a new strategy.) But, when you have ‘the biggest collection of bookmarks in the universe” in a potentially very social product and you can’t figure out how to run it in a lean, innovative and profitable way, it’s a real sign you are in trouble.

Disclosure: The author worked at Yahoo from 1999 to 2004, bled purple, and really wanted the company to succeed. But, he resigned Yahoo partly due to frustrations trying to launch new initiatives.



Pizza Superiority Determined In Massive Geek Eating Binge

Posted: 19 Dec 2010 02:04 PM PST

Lots of people argue about which place has the best pizza. But only a geek’s geek would get so obsessed that they spend a whole weekend determining as scientifically as possible exactly who’s right and who’s wrong.

Enter David Shamma, a research scientist and Chicago style pizza snob. He argued with former Yahoo product guru Daniel Raffel about which Chicago joint had the best pizza.

They failed to find common ground. So (of course) they asked a scientist and cognitive psychologist specializing in human-computer interaction to create and conduct an experiment to settle things.

They dragged a dozen more people into the experiment (“entrepreneurs, product managers, engineers, scientists, designers, a pizzaiolo, a librarian and a lawyer”) got to work:

On December 12th, we gathered our 12 testers in total. Entrepreneurs, product managers, engineers, scientists, designers, a pizzaiolo, a librarian and a lawyer rounded out our collection of people from around the bay area; half of these testers identified themselves as those who prefer New York pizza over Chicago. Three cheese Chicago-style pizzas were brought in locally from: Little Star, Patxi's, and Zachary's. The 2 shipped frozen and reheated from Chicago were Lou's and Gino's. All these pizzas were of Chicago Deep Dish style—not the "stuffed" variety. Dr. Churchill, who was not taking the test herself, designed a 'pizza score card' to measure peoples judgement on each pizza on a 1-5 scale: Appearance, Smell, Texture, Taste, Finish, and Overall-loving-feeling. Each pizza was presented unbranded on a standard pizza board labeled only with a number. Each taster drew numbers from a hat to determine the order in which they tasted pizzas. This helps to control the error of the pizzas getting cold as they sat out.

Which pizza won? Who cares? New York style pizza is superior in every way to the Chicago slop they tested. But it’s absolutely hilarious to see how obsessed these guys get over pizza.

Nerds! I love em. Read the whole story here.

Photo Credit.



Thanks In Part To Free Shipping Offers, Online Holiday Spending Up 12 Percent To $27.5B

Posted: 19 Dec 2010 11:14 AM PST

We know that online holiday spending is reaching highs this year, as consumers are looking to the web for deals this season. To date, comScore is reporting that $27.46 billion has been spent online, which is a 12 percent increase versus the same period of time last year. This past week ending December 17, reached $5.15 billion in spending, which is an increase of 14 percent.

In fact, four individual days this past week surpassing $900 million, led by Green Monday (Monday, December 13) with $954 million and Free Shipping Day (Friday, December 17) with $942 million.

It looks like more retailers are using free shipping as an incentive and consumers are responding positively to this trend. comScore’s data shows that sales on Free Shipping Day increased by 61 percent thanks to retailers promoting the deal. The company says that more than 1,500 online merchants offered free shipping this year, including Amazon, Walmart and others.

Each of the past five weeks has seen free shipping on at least half of transactions, while that benchmark was reached only once during the 2009 season. For the five-day week ending with Free Shipping Day, the percentage of transactions with free shipping reached 52.7 percent, up 12 percent from last year.

In terms of actual categories, spending on Computer Hardware is at the top of the list with a 25 percent increase versus last year. Interestingly, comScore says that purchases of handheld devices (such as Apple iPads and e-readers) and laptop computers are most popular and is driving this sales growth. Consumer electronics came in second, growing 22 percent; followed by Books & Magazines (up 21 percent), Computer Software excluding PC Games (up 16 percent) and Toys (up 15 percent).

While we won’t know the final tally of overall spending this holiday season, all signs point to online retailers seeing healthy sales. Total spending is expect to rise 11 percent to $32.4 billion this year, so we still have a few billion to go. It’s always a good sign to see record breaking Cyber Monday and Black Friday sales; but it’s even better when consumers are continuing to spend following these peak days.



NSFW: Hey, Assange’s Celeb Supporters, What Time’s Your Protest Outside Quantico? Oh.

Posted: 19 Dec 2010 10:39 AM PST

I think we can all agree that the one thing the world needs right now is another column about Julian Assange.

I'm sitting in a hotel bar about an hour north of London, and spread out on the table in front of me are all of today's British newspapers – from the Mail on Sunday to the Observer. Every single one of them contains – within the first few pages – a news story or opinion about the antipodean face of Wikileaks.

Online, it's a similar state of affairs. You can't move your mouse pointer today without rolling over an Assange fanboy blogger, either propounding conspiracy theories on the real reason for his imprisonment, or demanding to know why Time cruelly overlooked their man for "Person of the Year". (My theory: Time is wisely sticking to its policy of waiting for controversial people's stories to play out a bit before putting them on the cover. The whole Hitler thing back in '38 rather bit them on the ass.)

With a few traditionally skeptical exceptions, the media mood – online and off – is one of satisfaction for a job well done. Assange is out; free to spend a cosy Christmas tucked up in a grand old English stately home, as opposed to – say – voluntarily returning to Sweden to face the allegations made against him.

His reluctance to go to Sweden voluntarily is odd, by the way, given that a) his supporters are so convinced of his innocence and b) current legal opinion suggests that it would be even harder for the Americans to extradite him from there than from the UK. Maybe being held accountable only swings one way, like a kitchen door. Or perhaps Assange just likes the idea of spending yuletide in a nice big castle which, we're told, boasts an excellent Internet connection. Watch out, kids, he'll be leaking the contents of your letters to Santa before the day is out. THE PUBLIC HAS A RIGHT TO KNOW!

Anyway. For now at least, Assange's high profile supporters (including Jemima Khan, above, and Michael Moore) in both the media and the world of celebrity have put down their placards, returned to their luxury homes and are looking forward to taking a couple of weeks off to sing Christmas songs and bask in the glow of victory. And as for Julian himself…

"Assange said today his nine days in solitary confinement in a British jail had made him angrier than ever and steeled his resolve to continue the WikiLeaks project… His strong rhetoric came just moments before entering the plush Ellingham Hall, his place of “mansion arrest” in the British countryside."  - The Australian

Let's leave them, then – Dickensian narrator style – and fly away from London, across the Atlantic ocean, and down to the walls of a heavily guarded military prison in Virginia. Where, if the brig at Quantico had windows – which is doesn't – we might just catch a glimpse of young Bradley Manning, as he prepares to spend Christmas slowly rotting in solitary confinement.

In case you've forgotten, Private First Class Manning – surely the most comically inappropriate honorific since the McChicken Supreme – is the 23-year-old soldier accused of passing thousands of diplomatic cables to Wikileaks in the first place. Specifically he's accused of downloading 260,000 documents onto a CD, before disguising the disc as a Lady Gaga album and passing it on to Assange. He’s also accused of passing on the infamous “Collateral Murder” video. Thanks to the splendid reporting of Salon’s Glen Greenwald, we know that Manning spends 23 hours a day in his cell, where he is banned from exercising or doing anything else which might help prevent him going mad. He's already been there for five months (plus two prior months in prison in Kuwait) and it doesn't look like he'll be leaving any time soon.

Whether Manning is innocent or guilty (he is yet to be tried, although Greenwald quotes chat logs in which Manning apparently admits to being Wikileaks' source) is really beside the point. The point is he's in prison because the American government believes him to be Assange's cable dealer; the person without who's assistance Julian Assange would still be working as a waitress in a cocktail bar (and possibly sexually assaulting himself). Assange himself rarely – if ever – mentions Manning, citing Wikileaks' policy of neither confirming nor denying its sources. That this policy also allows Assange to keep the media's spotlight pointed squarely at his own face is surely just a coincidence.

(It's worth noting that Assange's statement from prison included a call for the world to "protect my work and my people from these illegal and immoral attacks" – emphasis mine – which might lead a cynic to conclude that Wikileaks is nothing more than a huge self-aggrandising stunt by someone who can’t even write an OKCupid profile without sounding like a less GSOH version of Marx and Engels.)

The contrast between Assange's current situation and that of Manning couldn't be more stark. Nor could the difference in certainty regarding the men’s fates: we're told Assange might be extradited to America, where he could face a grand jury, a high profile trial and possibly-maybe a lengthy jail sentence. For Manning, jail is the definite starting point: the crap-calm before the shit-storm. And yet it's Assange – the alleged sex pest with a website – rather than Manning – the apparent actual leaker of secret documents – who is the cause célèbre, gurning out from the world's front pages every day. Could there be a more damning indictment of our celebrity-driven culture than that?

I've made clear since the beginning of this sorry story that I have very little sympathy for Wikileaks, and I have even less sympathy for a junior soldier who, it is alleged, took it upon himself to leak information that was already shared amongst hundreds of thousands of trusted Americans. As I wrote here, the inevitable result of Wikileaks is less, not more, diplomatic openness.

And yet for all my cynicism, I would dearly love to see Assange's celebrity supporters marching on Manning's jailers with the same furious cries of “Habeus Corpus!” with which they demanded their media-friendly hero's release. It would certainly show that they were serious in their convictions: unlike springing Assange from Wandsworth prison – which simply involved throwing money at the problem – getting Manning out of Quantico would put campaigners directly at odds with the might of the US military, and would drag them into a case that will take years – maybe even decades – to resolve, mostly away from the glare of the TV cameras.

But then again, where would be the fun, or the glamour, in that?



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