January 31, 2006

A chink (no pun intended) - in Google's armour

One day we may look back at the brand that is Google and point to the PR bluder that China has become. I was reading Andy Kessler's blog today and he had this great post on Google's entry into China:

January 31, 2006

WSJ: Sellout.com

Americans have a long history of selling out - think Warren Beatty and “Ishtar” or politicians and Indian casinos. The public is trusting until proven otherwise, then turns on icons like rats on garbage. Never more so with culture: Being “cool,” “tight” or “wicked excellent” is a hard image to keep and one boneheaded move can send you to tomorrow’s cut-out bin. Ask Michael Jackson. Or Madonna.

Which brings us to Google. As a company, even more so than Ian Schrager’s hotels, it reeks of cool—Google Maps and Google Earth and gmail bring a kind of geek chic to the dull old media world. Plus, there are those lofty ideals like “organizing the world’s information and make it universally accessible and useful.” It’s why we all use them. Google should do everything to stay cool. GM is spending millions on ads that say “Just Google Pontiac” to get in on the zeitgeist.

And now, poof.

a billion soon-to-be-online Chinese will forever associate Google with lame and censored search results

One of the ways urbandictionary.com defines “sellout” is to alienate core fans by changing one’s style to appeal to a broader audience—and becoming what one’s fans were rebelling against in the first place. The U.S. government wanted search history to help fight child porn and Google said no way, to cheers from their Big Brother-hating constituency. But for its search service in China, Google caved to the communists, removing offending results for “Human Rights” and “Things that are Democratic.” Tough choice. Founder Sergey Brin is quoted by Fortune as saying, “it will be better for Chinese Web users, because ultimately they would get more information, though not quite all of it.” There will be no staring down tanks in Tiananmen Square.

Will it matter? Trust and cool are in the eye of the beholder. “Piano Man” Billy Joel never recovered from “Uptown Girl.” Rocco DiSpirito may end up as a waiter. Kevin Costner can barely get arrested in Hollywood since “Waterworld.” Heck, Wall Street analysts sold out to bankers, and look what happened to them. Then again, Sinatra, Springsteen and the Grateful Dead all sold out at some point, but kept their reputations.

Look, there’s a wrong way to sell out—rappers pitching for Chrysler, anything Vegas—and a right way. Puff Daddy’s soundtrack for “Godzilla” could have been a disaster to his fans, but he chose to do a hip-hop remix of Led Zeppelin’s “Kashmir,” providing someone else to blame for the sellout. Or the Jimi Hendrix strategy. Story has it that, despite using Gibson guitars on his albums, he signed a deal with Fender Guitars for cash and as many Stratocasters as he needed, as long as he appeared exclusively in concert and photos with Fenders. He took the deal, and with his unlimited supply of Fenders, began smashing them at the end of every concert, for fans who never knew he sold out.

Google could have kept their cool and trusted image if they’d just worked with someone else in China, someone they could smash. Perhaps Eggroll.com - powered by Google. Someone else to blame for those unsearchable keywords. Users in the West may not desert them, but a billion soon-to-be-online Chinese will forever associate Google with lame and censored search results - tools of the state. That just dumb. And totally uncool.

Mr. Kessler is the author of “Running Money” (HarperBusiness, 2005).

Year of the Metals

The credit for my conviction comes from the research and writing of Bill Cara.

His website has chronicled the run and his buy the dip mentality as the run in gold and silver escalate.


My new favorite Apple toy

The .Mac account is pretty awesome and a great value. Having panicked over losing my flash drive, the size of a thumb, I resolved myself to risk internet file thievery. I love it. Files get posted to the ineternet .Mac account and I can update one file from everywhere.

I love the toolbar syncing feature as well. Very handy for a big bookmarker like me.

Lot's of competition in the storage world when it comes to Explorer, but .Mac is good enough for me.

Another sleeper long term revenue source for the Apple machine.

I won't sell my Apple stock until Lanny buys some damn stock for his grandchild - harry or henry ( I can never remember)!

Letterman - goofing on blogging

It's now mainstream.

State of the Union

I didn't watch, but that doesnt mean I was not thinking of the State of The Union.

Here is what I am thinking-

Alternative Energy - gone but not forgotten. I am buying BLDP tomorrow.

Alaska - drill and drill some more and when you are finished - lay some pipe! Dennis Miller says and I agree - build an Alaska theme hotel in Vegas!

Greenpeace - same guys who did wedgies in high school - they are killing all of us.

Clinton, Bush - both putz's

Hilary - should just do interviews for Bryant Gumbel on real Sports

Wasted spending - stop already - We need border control, health care subsidies for everyone, and real rewards for proper education across the nation, more expensive weapons (seriously).

Cuts - Space program, subsidies for bad businesses.

Revenue - legalize marijuana already - except for Nate newton. He is just an idiot.

Airlines - pleeeease! I should get paid to fly America West, US Air and United - not them.

Be Careful - protectionist policies

By the way - Exxon earned 40 billion this quarter. wowoooowhhhhhhowwwww!!!!! Oil is not a bubble for fuc(&&_&_&(&((&&+((+)&kkk sakes.

Alternative energy stocks will bubble before oil stocks do.


For those that just can't get enough of my writing, I have taken my skills and applied them to the golf world. A solid 8 handicap, 10 for money games, I can't wait to blog away on golf for our great tee time company - golfnow.com

As a favor, please keep your nasty comments and email to this site only. Golfnow.com is actually a real business.

Joel Bernick - please stop reading me!

I may have to start making stories up if he keeps reading this. The family get togethers are getting just too hard to keep track of the truth!

Choices, Choices!

State of the Union or Real Sports

Democratic response or Dennis Miller

You guessed it both times! I don't even like Real Sports (spend an hour with has been freaky looking reporters), and Dennis Miller seems rather angry after about 10 minutes. Tonight, I don't know if it was faced with the alternative, but they both were fine given the choices.

Couple of things. What the hell is Bryant Gumbel writing while he talks to the interviewer at the end of a segment. Bryant - the segment is over! Maybe the notes would have helped - during the interview? He looks like an America West check-in person typing away, but really doing nothing. I can't even get close to imagining what a pompous yutz he must be like in person. He reminds me of Michael Jackson as a reporter. Frank Deford - is there a person more in need of a complete makeover? One interview - 11 clothing changes (all worse than the last). It was like Michael Irvin threw up.

Dennis Miller, though I am not a huge fan, had a pretty damn good HBO special from Vegas. You need to listen a few times, but the writing and delivery are awesome. He thinks, therefore, it is bearable to listen and watch. A worthy watch if you are flipping channels.

By the way, who was that guy talking for the Democratic party? Man I need to start watching CSPAN.

Google earnings - Ignore the noise - Think

At least there ARE earnings. The only news here is that if Google can drop 125 points in a week and they are making money hand over fist, why is Overstock.com even trading. Oh yeah, bargain hunters. Problem is for Overstock.com, the bargain hunters will prevent the company from ever making money.

Who knows what Google is worth, but any time the best growth company drops 25 percent it pays to watch closely and if you believe, start to nibble or sell puts.

If you are scared - don't watch CNBC for three days - it will pass. Like a bad gyro sandwich!

January 30, 2006

United Airlines - cleaned up shit

OK - so US Air and America West merge and become shit squared. Sprinkle a little Delta and you get shit cubed. Hey wait, forgot about United Airlines. I need to trademark something for shit home run or shit grand slam.

Not joking. Pat Riley trademarked threepeat!

Maybe start a reward program with the Denny's Grand Slam breakfast - "If your travel experience does'nt make you sick, maybe the grand slam breakfast will!"

This United Airlines scam is unbelieveable. Ben Stein may look goofy and has a strange voice - "Bueller, Bueller", but he is serious about business and ethics:

January 29, 2006
Everybody's Business
When You Fly in First Class, It's Easy to Forget the Dots

ONE of the best conspiracy movies ever made is the perfect British classic, "The Third Man." In the most haunting scene, the villain, played adroitly by Orson Welles, takes Joseph Cotten, the good guy, up in a Ferris wheel. The villain, named Harry Lime, has been selling adulterated penicillin in postwar Vienna, making a fortune and causing children to become paralyzed and die.

Mr. Cotten's character, a pulp fiction writer named Holly Martins, asks him how he could do such an evil thing for money. The two men are at the top of the Ferris wheel, and the people below them look like tiny dots. Mr. Welles's villain looks down and says, "Tell me, would you really feel any pity if one of those dots stopped moving forever? If I offered you £20,000 for every dot that stopped, would you really, old man, tell me to keep my money, or would you calculate how many dots you could afford to spare?"

This scene comes to mind when I think of Glenn F. Tilton and other executives of the UAL Corporation and the hapless employees of its primary business, United Airlines. Its history is a perfect text for the ethical morass in which American business often finds itself.

United is one of the proudest names in airline history. It has long been a synonym for fine service and extensive, convenient routes. In the early 1990's, when some investment bankers were casting around for a way to make tens of millions of dollars, they came up with a doozy: the employees of UAL would give up some of their salaries and benefits in exchange for stock in UAL, eventually becoming UAL's largest owner through an employee stock ownership plan.

The deal went through — with staggering compensation to Wall Street — and in 1994 the American employees of UAL, as a group, became its largest owners. Within a few years, overseas personnel were allowed the privilege of tossing their life savings into UAL, too.

Trouble was not far behind. The employees found management demanding pay cuts, big (and, for passengers, inconvenient) changes and cuts in scheduling and services, and even silly changes in their once-great flight attendant uniforms. Then came the blows of 9/11 and a recession, and then rising fuel costs. There were demands for more cuts in pay and benefits and more layoffs. That was not enough. About three years ago, UAL was "forced" to enter bankruptcy to stay alive.

This step meant that UAL could drastically cut workers' pay — and it did. Pensions were simply jettisoned and made the burden of the federal government's Pension Benefit Guaranty Corporation, which meant cuts of close to two-thirds in some pilots' pension payments. And, of course, the bankruptcy simply eliminated all of that equity in UAL that the employees had bought with their hard-earned savings.

Thus, in a series of evil events, management of UAL basically ruined the lives of the employee-owners, if that is not putting too fine a point on it, by taking away their savings, incomes and pensions. (I am indebted to my pal, Phil DeMuth, for much of this research.)

All right, you might say. What else could management have done amid high fuel costs and a deregulated, supercompetitive market? That's "creative destruction," and it's good for the economy, some of my fellow Republicans and admirers of the free market might say. But what about the rules of law and common decency? Because, you see, there is a bit more to the story.

Now UAL has been reorganized. It is preparing to emerge from bankruptcy. It will soon have a stock offering. This offering is expected to raise very roughly $6 billion. It is presumably worth that because UAL now has such low labor costs that it may actually make a profit of some size. (I'll believe it when I see it.)

Here comes the good part: management has asked the bankruptcy court to let it have — free — roughly 15 percent of the stock in the new company, or about $900 million. Mr. Tilton, the chief executive, who plays the Orson Welles character in this drama, would get about $90 million personally for his hard work shepherding UAL through bankruptcy (for which he was already paid multiple millions of dollars).

The bankruptcy court, instead of ordering Mr. Tilton's arrest, instead cut the management share to about 8 percent, so he will get more than $40 million, more or less. That is more than Lee R. Raymond, the chief executive of Exxon Mobil, one of the most successful companies of all time, was paid in 2004 (not counting Mr. Raymond's 28 million shares of restricted stock).

So here it is in a nutshell: employees are goaded into investing a big chunk of their wages and benefits in UAL stock. They lose that. Then they lose big parts of their pay and pensions. They become peons of UAL. Management gets $480 million, more or less. "Creative destruction?" Or looting?

Wait, Mr. Tilton and Mr. Bankruptcy Judge. The employees were the owners of UAL. They were the trustors, and Mr. Tilton and his pals were trustees for them. How were the trustors wiped out while the trustees, the fiduciaries, became fantastically rich? Is this the way capitalism is supposed to work? Trustors save up, and their agents just take their savings away from them?

If the company is worth so much that management has hundreds of millions coming to them, shouldn't the employee-owners get a taste? Does capitalism mean anything if the owners of the capital can be wiped out while their agents grow wealthy? Is this a way to encourage savings and the ownership society? Or is this a matter of to him who hath shall be given?

I know that this is basically the same story I described recently concerning the Delphi Corporation, where something similar is going on. But that's exactly the point. Management is using competition, higher fuel costs and every other cost complaint to cut the pay and pensions of its own employees while enriching itself.

And I can well imagine what goes through Mr. Tilton's mind as he does it: "Hey, I'm a great executive. Great executives in private-equity firms make more than I do. Why shouldn't I get the moolah? Basically, I've worked it so UAL is now a private-equity deal anyway. That's what it's all about now, isn't it? Who's got the most at the end of the day at Bighorn or the Reserve or whatever golf course I choose to retire at? And, anyway, wouldn't you take $48 million for a few of those dots we used to call our employees and owners to stop moving?"

Ben Stein is a lawyer, writer, actor and economist. E-mail: ebiz@nytimes.com.

Ben Stein - Not a putz. This management and private equity mini bubble based on reorganizations, and in Canada, Income Trusts, needs to stop. Period!

January 28, 2006

Power of smart blogging - revisited

I am sure that the blogging world has it's fair share of lunatics. Myself included I guess. But, I am in search of great thinkers and investors so I am not searching for radical thinking unless it is financial.

In response to the Dave Winer post on the changes necessary at the venture level, response was swift from other connected, smart people. An insider at Microsoft, the "scobleizer", added this post, which had some great venture ideas:

"One thing before I start thinking, I always thought it was bizarre that entrepreneurs couldn’t get funded when they needed it (when the economy sucked and they needed a little revenue to get them through the rough patch). Anyway…

…then I started thinking. Yeah, I know, that’s dangerous.

What are the “ventures” the entrepreneurs actually need?

See, in the 1980s, they needed money. Why? Cause the growth was in computers and other electronics goods. I worked on an assembly line at Hewlett Packard one summer in the early 1980s. Why did these (and smaller startups like Apple or Atari back in the early 80s) need money? Cause building physical machines costs money. Assembly lines. People. Materials. There was a high marginal cost of goods.

But today’s world isn’t money constrained. You don’t need much money to build software or services.

Today’s world is mostly an audience aggregation one. At least that’s where the money is. Think about it. What does Google do? Gather audiences! How about Yahoo’s Flickr? Or Microsoft’s Live.com? (More on that in the next post about guitarist Robert Fripp, don’t miss that one).

So, if money isn’t in short supply (it’s not, which is why being a venture capitalist right now is actually very tough work) what is? Here’s some ideas of “ventures” that we need:

1) Venture USERS. How do you build a Flickr? Get half a million users. But how do you get there? After all, there are hundreds of services vying for our attention right now. So, anyone who can provide a network of users is going to be valued. Got a network of users that listen to you? You’ll be sought after.

2) Venture Search Juicers. If you are an audience starved startup how do you exist if you aren’t in the first page of Google results for what you want to be known for? So, how do you get there? You gotta get people who have search engine juice to link to you. You need “Venture SJ’s” (for search juicers) to be in your network. You think you can just get a few bloggers to link to you? That’s increasingly going to be difficult. Wanna come and look at my “blog this” folder? It has 2321 items in it. So, how you gonna get noticed in that kind of world?

3) Venture advertising. You’re in the audience aggregation business now, remember? How do you get an audience? Well, you won’t get one if no one has heard of you. So, if you can advertise services (say, if you’re particularly talented in front of a video camera, like, Amanda Congdon of Rocketboom) you’ll be sought after.

4) Venture offices and IT. If you’re a geek who can build cool things in Ruby on Rails what’s the last thing you want to worry about? Having an office in which to work and all that entails (stocking the frige, answering the email and phones, paying the bills). Got a way to bring those services to a number of startups for less than anyone else? (I saw such an operation working in a house on Sand Hill Road) Then you’ll be sought after.

5) Venture deep technical help. Let’s be honest. The skills to get a prototype service up and working are far different than making it work for 10 million users. Building UI’s in Ruby on Rails is a lot easier than building a server farm that can handle exponentially-growing loads. So, can you build a network where you share one tech team among a group of startups? Then you’ll add value to the whole network and be sought after. I saw just this happening at startups in Silicon Valley where one deeply-skilled tech guy was shared among three or four startups.

6) Venture marketing. Hey, every entrepreneur needs a logo, business cards, stickers and swag to hand out at shows, and other things. But, you don’t need a full-time graphic artist. So, the new Venture capitalist who has a graphic designer shared among his or her network will add value and be sought after. At Microsoft I’m really a “venture marketer.” Every team doesn’t need a guy who can get 100,000 views on a video shot with a camcorder. So, I’m shared among many teams. Same skill is gonna be needed at every startup (but only an hour at a time).

7) Venture ideas. I’ve hung around the industry now to realize that there are a few people who generate far better and far more ideas than anyone else. Microsoft has one of those guys. His name is Eric Horvitz. He owns the most patents at Microsoft and I believe he has about twice the number of the person who is in the #2 spot. Now, you probably couldn’t afford him full time (I’m sure that other multi-billion-dollar companies even regularly bid against us for his time) but you might be able to, say, rent Dave Winer or Steve Wozniak or, even, Matt Mullenweg, to come out and give you some ideas for a day. So, “venture IG’s” (Idea Generators) will be sought after.

8) Venture PR. I remember the days when startups would need to hire a PR company for something like $15,000 per month (and that was for a low-cost set of services, some services would run many times higher than that and often required handing over some of your equity to get really great services). But, in today’s world of blogs the skills needed aren’t as big. You need someone who can deal with the new PR (even the big companies are realizing this, Nokia has a program to send phones out to bloggers so they can try them out). Get a new set of PR skills which can help you build an audience fast and you’ll be sought after.

9) Venture testers. You just spent four years at Carnegie Mellon coming up with a great robotic or speech recognition idea. But now you need testers and other people to help you finish off your project. The network that can help you with those will be sought after.

10) Venture management. You’re two kids from Stanford. You’ve built a team of 20 geeks. Some in SF, some in London or Cork, some in China. But just keeping 20 people working together is not your core skill and it’s making you unhappy. So, you need some really great managers to help you out. The network that can help you will be sought after.

11) Venture evangelists. Hey, I’ll be honest, when I see something that excites me I want to have a piece of the company. It makes me even more evangelistic if I know my own bucks are on the line. Ahh, sorry, Dave Winer already made that point. So, I guess I should have stopped at 10 “ventures” that are needed.

You got any others? If you’re an entrepreneur, which ones are you willing to give up some equity to get?"

Reforming the charity donation process

Tonight, at the diabetes fundraiser, I heard a Mr. Greenbaum give an eloquent speech about his parallel reasons for giving so big to the cause.

He talked about the three groups in attendance and one being the investor. As an investor, it would be a little more exciting to invest in something that could take my small donation and make it something big. Than, tonight, i am reading Dave Winer's blog about the changes that should happen in the Venture Capital world.

Why not combine the two - Venture and Donation reform.

Here is his post - which is just an awesome idea. Mine is goofy and maybe reckless, but somewhat interesting and if the idea is right, may raise more than just from selling a horse.

"How to reform the VC industry
Posted in Venture Capital, Philosophy at 6:56 pm by Dave Winer
There’s a wisp of a discussion materializing in the tech blogosphere about reforming the VC industry. I have been thinking about this for many many years. It’s an exciting time because I think it might actually happen now. Here’s the rough outline of my plan to reshape the VC industry around the philosophy of the web.

1. One word: disintermediate. Take out the middleman. We don’t need the partners, limited or general, they gum up the works. We need money to start new ventures. Luckily we know the people with the money, they’re the users. And we need people to validate the ideas. Same people, the users.

2. It’s not actually a new idea. That’s how Netscape and the dotcommers that followed went through the roof of the stock market. People who traded could see the raw power of the Internet and knew, one way or the other, that this was going to change how everything was done, from business to romance, travel, gambling, everything. So the users of the Internet bid the stock of the Internet up. And up. And up. And so on.

3. So what did the middlemen do exactly? They invested in all kinds of idiotic things. Anyone could have made the bets they did. The users hadn’t had time to fully absorb the Internet in the 1990s so they bought all the garbage the middlemen shipped, leading to online pet food companies with market caps exceeding the largest industrial companies.

4. So now we’re in the middle of the next decade, and the users are caught up, and we’ve got a pipeline going, from entrepreneur to user, and maybe not much inbetween. Matt Mullenweg hasn’t taken on any VC to start wordpress.com. Who knows how far he can go without having to sell stock? I don’t want to say how he’s paying the bills, I’ll leave that up to Matt, but suffice it to say it’s honest, sustainable, and legal.

5. In any case, I’m sure there will be startups that need capital. Let’s assume so. So let’s start a new company, with Rick Segal as the CEO (if he’ll do it) called User Internet Capital Corp or something catchier. File all the right paper with the SEC, and do an IPO. You have to, because we’re going to be selling shares to the public right at the start. This thing will be public from day one. The purpose of the company will be to invest in promising young Internet companies, chosen by the users, nurture them through startup, get them liquid through acquisition or IPO and distribute dividends to the shareholders accordingly. Retain some cash for overhead and (I insist on this) a small percentage for pure technology research and development, so there will be new ideas to base the startups of 2009 and 2011 on.

That’s it. Never stop investing. All you have to do is listen to the users, who also happen to be the owners. How about that?"

My idea -

instead of the bankers making all the money off the users, include the charities.

The diabetes fundraiser tonight in Phoenix raised $2 million from the fantastic, generous crowd. How about take 25 percent of that and take a shot on the user picked group of promising picked internet companies so that the next google of the world’s profits go to great causes directly.

A huge win for terrorists

Andy Monfried, who lives in New Jersey, has this post on Hamas winning control of Palestine.

Friday, January 27, 2006

Israel and the PA Elections....

In a weird way, most of us knew we had this coming. Hamas winning the elections, and a majority control in Palestinian life. A terror organization running the government of the PA.

We had it coming.

Lisa (my gorgeous, loving wife) and I were involved in a suicide bombing on Sept 4, 1997. We were vacationing in Israel, spent time in the North in the Galilee, Tel Aviv, and our first day in the city of Jerusalem.

We were eating falafel in a restaraunt on Ben Yehuda Street....the heart of Jerusalem, and a pedestrian mall. Shops, Retailers, stands, McDonalds, and all the standards you would find in a mall....(but outdoor)

It was nearly 3 ' clock -- and the school children were just arriving with their backpacks in tow, to hang out on a sunny day, eat,sitting on the chairs, benches, and chatting....and just as 12-13 year old kids do...."chilling" - it was about 75 degrees.

We walked past them all, and into the restaraunt... I took special notice of all the smiles, giggling, and the familiarity of being back home...

Once we got in BANG-- the loudest noise I have ever heard....

The roof fell on us.

Darkness *

Silence *

Then another BANG --- the 2nd loudest noise I have ever heard -- (it was 15 feet away at the front of the establishment)

Silence *

From "The Bombing" a movie about the suicide bombers of that day........

" On September 4, 1997, three Palestinian youths blew themselves up on Ben Yehuda street in crowded central Jerusalem. Among the victims were three 14 year - old Israeli girls - Sivann Zarka, Yael Botwin and Smadar Elhanan. The suicide bombers, Tawfiq Yassine, Bashar Sawalha and Youssef Shouli, were young Palestinians from the same Israeli-occupied West Bank village - ranging in age from 22 to 25 years old. "

I heard moaning, it was Lisa - with the most frightening look I have ever witnesses - "is there more coming?"

We waited, I huddled on top of her, and the restaraunts roof was fallen top of us, roof particles, roofing, electrical wires -- ALL ON TOP OF US.

Slowly after 30 seconds--- but it felt like 10 years...we got up. There was alot of smoke.


Glass, books, food, wood, and then.......all the children, we had passed on our way in.

Lying Dead. Mangled.

Their bookbags were still on their backs, and some of the clothes had literally melted (been fused into their skin) -- it was surreal.

We were in shock.

We helped a few people, but in a matter of minutes we were out of there. Shocked scared, blood splattered on us, dirty -- and most of us in shock, and not knowing where to turn.

But, I took pictures. (a bizarre moment, but I had my camera on my shoulder - as many of us do on vacation -- I took a roll of carange--why? I dont know, but I did...)

I have only shown possibly 10 people these shots. Body parts, dead kids, and destruction.

I looked at them today, because I watched the PR guy for Hamas on the TV, at the victory rally for the victors.

This is Hamas. This is the new face of the PA.

We had it coming.

( I plan on writing more extensively on this subject down the road, and will get into more detail, it is part of my plan for this blog as I have outlined what I want to eventually "get into" -- there is a TON more detail, but the HAMAS election victory stirred something up in me that is really beyond words... )

We had it coming.

The 2006 inside skinny on what Yahoo is thinking

Longtime blogger and tech guru Dave Winer has posted the following on his invite and meetings offsite with Yahoo. This is great stuff:

Yahoo game-changers for 2006
Posted in Yahoo, BitTorrent, RSS at 9:35 am by Dave Winer
Yesterday I participated in a Yahoo management offsite at the spectacular Ritz-Carlton Hotel in Half Moon Bay. They invited two outsiders, myself and Om Malik, to come discuss the new ideas of 2006 with them. They asked what I thought would be the game-changers. They were interested not only in ways they could change the game on their competitors, but how a smaller upstart could be the Choice of a new generation and unseat them as king of whatever hills they’re king of.

Microsoft used to ask us to events like this, Google and Apple never have (except briefly while Amelio was in charge, but that went nowhere). Yahoo continues to impress as the exception to the rule of Silicon Valley. They don’t have the usual arrogance, they’re more inquisitive like the old Microsoft was. Refreshing.

So what did I talk about? Three things.

1. Of course I gave them an abbreviated Clone the Google API schpiel. No need to repeat it here. Search must become a developer platform. If you can’t make the current search engine do it, then hire a new team and build one that can.

2. BitTorrent. There’s no doubt that when we write the year-end pieces for 2006, BitTorrent is going to be at or near the top of the list of technologies that made a difference. Yahoo can make it two-way. Right now BT is largely serving as an (unwilling) channel of distribution for Hollywood, but now we have podcasting and videoblogging, and that stuff is just going to get bigger, and along with that the bandwidth bills for users will keep going up. Ordinary users should get the BitTorrent service for free (after all it doesn’t cost very much to provide) and Yahoo should charge advertisers to distribute their infomercials, ones that users subscribe to, willingly. This is the model for commercialization of the Internet as we go forward. It also is a game-changer on Google, which is going the DRM, appease-Hollywood sell-to-couch-potato approach. I said whereever you’re doing something to make another industry happy at the expense of users, switch polarity, immediately, and get on the side of the users. That in itself is the biggest game-change possible.

3. P2P webcasting. I wrote about this vaguely the other day, and no one apparently understood what I meant by Skype for webcasting. Come on guys, it’s pretty simple. Suppose we’re having a conversation, and I decide “Wow, this would be great for Scripting News, let’s do a webcast of this right now.” So I whip out my laptop, get onto the net (there’s wifi everywhere of course, heh) and launch my Yahoo Webcaster desktop app for the Mac. I choose New Webcast from the File menu. A window opens. There’s a button that says “Copy URL to clipboard.” I click it. Go over to my outliner, paste it into a post on Scripting News. “Tune into this webcast I’m about to do with Bull Mancuso about intellectual property and organized crime.” I highlight the word webcast and click on Add Link. Save. Then I go back to the Yahoo app and click Start. We talk for ten minutes, all the while people tune into the stream, which is managed via a realtime BitTorrent-like P2P connection. And of course when it’s all done it’s automatically archived to an MP3 and included in my RSS 2.0 feed for people who subscribe. If you’ve ever done a webcast, you know how much better this would be. And it’s ready to go, we know how to do all the bits.

PS: I’m a cheap date, probably too cheap. Today, to get me to cough up these ideas all you have to do is put me up in a swanky hotel with a Pacific Ocean view, and feed me. I sing for my dinner, so to speak.

January 27, 2006

Oil vs. General Electric - I take oil!

There are 35 stocks in the Oil Service Holders ETF (OIH), which may be the most popular ETF with traders right now. The companies are worth about $300 billion combined, which is still less than General Electric (GE).

I mean with Cheney and Bush in the White house and Haliburton in the index - who would you take?

No brainer - even though OIH is up from 80 not too long ago. Wish I would have seen that OIH/GE statistic a year ago with oil at 40 bucks.

If oil is headed higher or stays in the 60's - 150 looks cheap.

Beverly Hillbillies will be the number 1 ITunes download before we reaqch a top!

Nikkei new highs led by Sony

From my blog post ten days ago - January 17

"""Nikkei mini crash

It does not matter what the news really is - panic is panic. i have neen talking about taking profits in tech and the japan index for a few weeks.

If you didn't, the last few days in japan have seen months of gains taken away and the Nasdaq will be the same in the morning.

I like japan down here again and will nibble on EWJ in the morning.

This could be the last big selloff in the Nikkei for a while. A close below 13,000 would change my mind."""

Flash forward to January 27th - the Nikkei is up 500 today with Sony - another of my faves - up 15 percent. The Nikkei is up to 16,500 - a cool 1300 points in 10 days if you bought into the panic. If you did, good for you. I only nibbled. Rat farts!

January 26, 2006

What a week

Been all over lately - not much time to post.

First a sit down with uberblogger Steve Rubel from Cooper Katz and blog fame www.micropersuasion.com - a great site to learn and link to marketing on the web.

Next off, I had the great pleasure of spending a few hours with Bill Cara in Toronto. That was a treat. His must read financial blog - www.billcara.com is simply the best. Don't take my word for it - take Barron's and Forbe's.

Next was a meeting with Rent.com's founder Scott Ingraham. Only built the largest online apartment leasing company from scratch and sold to my favorite company (next to Apple) - Ebay. A cool $450 million give or take. Cash! Extra treat to hang with my buddies in LA for Abe's 40th. Man we are getting old. Seem's like yesterday we met in Brindisi on our Eurotrip!

Next it was off to Orlando for the PGA show. A long trip but always fun to see what's new - and old. Used to do these golf shows every year when we were selling The Gripp and it was good to see some old friends.

Good to be home in beautiful Phoenix as always.

Apple bites Dell

With a little time to ponder the Disney/Pixar deal, it is obvious to me who the winner is - Apple. Steve Job's, now the largest Disney shareholder will no doubt use the Disney distribution to attract a new generation of Apple followers right from the crib.

No doubt you will see the world's largest computer and music store, an Apple store, in the heart of Disneyland.

Combined with the Intel processor Mac computer it is slice em and dice em time for Apple for the forseeable future.

Buy any weakness and if you hate the market - Dell could be a teenager at their expense. I am reading and hearing about the nightmare that is Dell customer service.


I knew it was a screamer but never expected this. You can't ever trust the bankers. This pricing is a perfect example of the games played by these criminals. Their pricing, screws Chipolte's, costing them a few hundred million in cash and screws the small investor who now has to pay up a rediculous premium. The large funds that got allocations and the bankers, make out like bandits. Really disgusting behaviour. So soon after the bubble and back to the same games.

Almost as pathetic is the media with their headlines - "Fiesta for Chipolte's", "Spicy opening day...".


January 23, 2006

Chipotle's Mexican Food

I can't wait to get my hands on this IPO. It is sure to be a major winner over the next 10 years.

You will have to pay up for this one, but it is the best restaurant going. Great margins and great food.

I like it and I have shunned Mexican food my whole life.

My friend Cole says this is the next Starbucks and that is a stretch. But, I have been eating the food consistently for a few years and the food is always great and the lunch and dinner crowds are crazy.

The menu is thin, but on the other hand focused.


January 22, 2006

Information and Logistics - two trends for the forseeable future

I have long talked about the internet stocks and the information trend and its main benefactors.

I have failed to mention the other benefactor - logistics. I have noted Federal Express as one of my top five favorite companies to own. Despite rising oil costs, the world marches onward as e-tailers and growth in Asia, India and South America explode.

I just came across a great article in Slate that summarizes the reason to own this space. A great article to begin research:

One Word: Logistics
The unheralded key to the New Economy.
By Daniel Gross
Posted Friday, Jan. 20, 2006, at 4:57 PM ET

In a classic scene from The Graduate, Mr. McGuire (Walter Brooke), buttonholes young Benjamin Braddock (Dustin Hoffman) and dispenses some career advice:

Mr. McGuire: I just want to say one word to you—just one word.
Ben: Yes sir.
Mr. McGuire: Are you listening?
Ben: Yes I am.
Mr. McGuire: Plastics.
Ben: Exactly how do you mean?
Mr. McGuire: There's a great future in plastics. Think about it. Will you think about it?
Ben: Yes I will.
Mr. McGuire: Shh! Enough said. That's a deal.

To Dustin Hoffman's character, plastics represented everything awful about the future into which he was unwillingly thrust: a soulless, boring, and unsexy industry; one no 21-year-old college graduate would willingly go into. And yet plastics was simultaneously a ubiquitous material that helped define the age and a hugely important economic force. In the 1960s, as it is today, plastics was a huge manufacturing industry that created jobs at every level—executive, middle management, labor—all over the world.

Continue Article

I haven't seen the new Jennifer Aniston vehicle Rumor Has It, whose plot is based on one of the central conceits of The Graduate, but if there were a similar scene, Mr. McGuire wouldn't be talking about plastics. He'd be talking about another seemingly soulless, boring, and unsexy industry: logistics.

The work of moving stuff through supply chains is the ultimate behind-the-scenes, unglamorous corporate function. (Quick: Name a famous logistician!) The prospect of spending your life helping to move cargo, commodities, people, packages, finished goods, raw materials, liquids and solids, grains and fruit, pig iron, and coal from one part of the globe to another may not appeal to many hotshot undergraduates. And yet, as plastics did a generation ago, logistics helps define our age and is a hugely important economic force. In fact, it's the unheralded key to the New Economy. As a result, logistics is smokin' hot.


1. Exploding global trade. The movement of goods and services around the world is expanding rapidly thanks to a series of factors: outsourcing, the rise of manufacturing in new centers (China), the rise of new producers of raw materials and commodities (Brazil and Russia), the rise of new consumers (India), and greater economic integration among trading blocs in Europe, North America, and South America. As the International Monetary Fund reports (click here and see Table 20 on Page 233), the volume of global trade in goods and services has risen at a projected annual rate of 6.6 percent over the years 1997-2006. For goods alone, the growth rate is higher, and it has been particularly robust in recent years: 10.9 percent in 2004 and an estimated 7 percent and 7.6 percent in 2005 and 2006, respectively.

2. The spread of just-in-time inventory management. Manufacturers have long realized that carrying a larger inventory of parts or components than they absolutely need is a waste of time, space, and resources—and it ties up cash that could otherwise be earning interest. But in recent years, this mentality has increasingly spread from car manufacturers to service companies: retailers of all stripes, hospitals, grocery stores. All of which means businesses today increasingly rely on systems, companies, and people who make sure that precise amounts of materials get to where they need to be at precisely the right time. In industries where margins are thin and competition is intense, the ability to handle logistics effectively is a huge competitive advantage. For titans like Wal-Mart and Dell, logistics isn't just a necessary back-office function, it's the heart of the business and the root of their competitive advantage.

3. The e-tailing revolution. Every online retailer, by definition, possesses national (if not international) reach. So, they rely on their own logistics systems—and those of delivery companies like FedEx, UPS, and DHL. In the most recent Christmas season, Amazon.com took orders for 108 million items, including 3.6 million items ordered Dec. 12. On the peak day, the company shipped 2.7 million units to more than 200 countries. These figures were up sharply from last year, when the largest one-day order total was 2.8 million units and the largest one-day shipping total was "over two million units." How does Amazon manage to delight so many customers? Logistics.

As a result of these megatrends, the demand for the infrastructure—the physical and intellectual capital that can manage logistics—is growing. There's a shortage of truck drivers in the United States, for example. And while airlines servicing consumers have generally eaten higher gasoline costs, logistics companies have shown that they can successfully pass higher costs on to their customers. Railroad Union Pacific reported a good quarter because it was able to pass along higher fuel costs as it handled record freight volumes. The same holds for FedEx, which, as this chart shows, has outpaced the S&P 500 over the last three years.

Meanwhile, the market for logistics-related mergers and acquisitions is heating up. Last November, Brink's agreed to sell BAX Global, its logistics unit, to German railroad Deutsche Bahn for $1.1 billion. Last December, Deutsche Post, the German postal company that bought DHL in phases in 2001 and 2002, completed its $7.3 billion acquisition of British logistics firm Exel. P & O Group, a United Kingdom-based firm that operates container ports, accepted a $5.75 billion takeover offer from DP World, based in Dubai, in November. Now Singapore's PSA International, the world's third-largest container-port operator, is jumping in.

The good news for logistics is that the megatrends driving the growth show no sign of dampening. If anything, in fact, they're accelerating. The bad news is that, despite the growth, it is doubtful kids will be reading Logistics Management the way young go-getters read the Financial Times in the 1980s or Wired in the 1990s. At the end of the day, it's still an inherently less sexy—and less New York- and San Francisco-centric—industry than Wall Street or venture capital. Still, if you're young and directionless, and if the job market and macroeconomic climate make you think it's a terrible time to be young, I want to say one word to you, just one word: logistics.

Daniel Gross (www.danielgross.net) writes Slate's "Moneybox" column. You can e-mail him at moneybox@slate.com.
Photograph of truck on the Slate home page by PictureArts.

Southwest Airlines

America West sucks. Everyone knows that.

Southwest is a different story. Many hate the herding. Never bothered me. For over 20 years I have flown this airline with cheap tickets, ontime travel, a great rewards program and a birthday card like clockwork.

My first Southwest problem - ever - occurred this September when a few buddies and I headed to Ireland for my 40th. They lost my bag on the flight out of Phoenix and I did not receive the bag until day three of my trip.

Although it was a major inconvenience, I bought some clothes and today was surprised to find a check for $719, which reimburses me for the purchases I had to make in Ireland. Add in $200 in vouchers and $100 in LUV coupons (their ticker symbol on the NYSE) - great idea by the way and you have a happy customer.

It is a shitty business to be in, but someone has to do it. At least they do it well.

Too bad oil is going much higher or it would be my favorite stock. It is a shame that American West and US Air get to keep coming back out of bankruptcy and fight an unfair fight much like MCI was allowed just recently as well in the telecom sector.

The bankers win and the customers and shareholders lose in the long run. On that note, please read www.billcara.com and his coverage on the debacle of a ripoff carried out by the Stelco management team.

Barron's has voted him the best financial read and so do I.

January 21, 2006

America West - SUCKS

Here is a great idea. Let's take our shitty airline (America Worst) that has been saved way too many times, with a bankrupt airline. Genius. Nobody loses, just the old shareholders, the new shareholders (eventually) and a miserable, underqualified underpaid (?) workforce.

Shazam - America West/US Air. Shit Squared. Maybe they will partner with Delta and call themselves ShitCubed.

Now - to be fair. They are wonderful typists. It seems like they are always typing. What the fuc&^&*%%^&*&* that is, I do not know. I imagine, the same stuff a catcher and pitcher talk about on the mound. type - I am talking to Mr. Lindzon - he is yelling at me. I hate my job. I hate my job and he is not getting on this flight. I hope he is not looking over my shoulder. he is kinda cute. - "yes Mr. Lindzon just checking"

I don't care if anyone nice works there. They just suck. They should not be allowed to compete. I would pay more every time, double even, to avoid them going forward. They have seen my last mile. EVER!

In my opinions, policies are a guideline, not a steadfast rule. The 2 hour rule is a joke. I have travelled for 20 years on a heavy basis and never had the rule enforced. Ever. I honor a one hour rule as it would be stupid to show up later than that. I agree. Especially with customs.

Today, America West lost a customer forever. i will now take every opportunity to disparage them.

Snowing in Toronto and over one hour early to my flight from Toronto to Phoenix. Two people working the counter. Twenty minute wait. No Mr. Lindzon, you needed to be here 2 hours before.

Me - "Let's say the whole flight showed up at 2 hours before - exactly - and it just took until now to get to me. Let's please assume that happened - as a favor to me and my wife and my children that have not seen their parents in five days. Please. The airport nor customs is busy this morning and the flight is delayed due to weather.

America Worst - Let me call my supervisor

Downhill from there. Sorry Rachel and Max.

By the way. The point of this story - America West SUCKS.

Oil prices will finish them off. Oil is going a higher and they will not survive unless they partner with God. Problem is - they have probably bumped him and fuc^&*%% up his miles program.

January 18, 2006

Blodget knows a little more than me

A worthy read on Yahoo and Google from ex Merrill analyst Henry Blodget

Implications of Yahoo! Underwhelm

The key question is whether the revenue deceleration (from 51% in Q2 and 46% in Q3 to 39% in Q4) is:

1) the result of a broader industry slowdown, in which case Google is screwed, too, or

2) the result of Google eating Yahoo!'s lunch, in which case Google will probably have another strong quarter or two.

In any case, the global online advertising industry no longer seems to be growing fast enough to justify the sector multiples--Google's included. One lesson from 2000 is that, when the rest of the industry is grinding to a halt, the market leader can't keep going like a bat out of hell forever, no matter how much share it steals.

Posted by Henry Blodget on January 17, 2006 at 05:16 PM | Permalink | Comments (13) | TrackBack (0)

Google Radio Buy A Big Deal

Okay, this is another big step for Google toward revenue diversification and dominance of all media. Google is buying dMarc Media Networks, which provides an electronic dashboard that allows advertisers to research, buy, and manage radio campaigns on a market by market basis. Depending on dMarc's performance, Google might end up paying $1.1 billion for it--a boatload of money for most mortal companies, chump change for Google.

So let's extrapolate: If there aren't already, there will soon be companies like dMarc for all media: Television, newspapers, magazines, telemarketing, outdoor advertising, etc. Google will buy the leading player in each market. Advertisers will go to Google to design and manage coordinated advertising campaigns across all media--with Google, presumably, taking a cut of every dollar spent on other companies' media properties (the TV and newspaper equivalent of AdWords for Google Network Partners). Other media companies will continue to manage the expensive hassle of creating content, and Google will monetize it.

The profit equation, in other words, will look similar to the current one on the web: Other companies create the content, Google helps users find it and advertisers find them. In exchange for this service, Google keeps a fat cut of the profits.

Not a bad business if you can build it (which Google seems well on its way to doing).

Too bad nobody reads me

This post from my blog on January 11th turns out to be a real Nostradamos looking forecast:

Maybe a switch out of tech is due?

Apple is up 10 bucks in 2 days, Google heading to $2,000 and even Microsoft rallying.

Maybe it's time to switch out of tech.

Meanwhile, nobody is talking about oil these days. I think I like those stocks better until the plus $60 price per gallon becomes front page news again. It should be!

Lot's of oil stocks breaking out again and they are not in a price war (just benefitting from one) and territory war like Yahoo, Google, Appple, Microsoft, Dell and the other tech behemoths.

Tech stocks shouldn't be this easy to own.

If I could do this all the time that would be awesome - oh and back it up with real money too!

Read the Tea Leaves

The euphoric signs in the tech market have been discussed here ad nauseum. It is important to keep learning from all the selloffs, they generally come from the same issue - complacency.

It is not just technology. The medical industry is seeing it. Mergers are wild and wooly but they should be long supported by a strong underlying commodity. Don't let that fool you. I think the commodity boom still has a way to go based on all the skepticism - especially on CNBC.

Jeff Matthews covers another story well that outlines a warning sign - management stupidity. These Boston Scientific guys sound like real assholes by the way and history should play out much like he says RJR's did. Buy JNJ is the best way to play these Yahoo's. Here is the post:

“Vince, It Looks Like Jim and Larry are Going All In! Incredible!”

Mr. Tobin suggested a dramatic new offer at $78 a share -- then headed out to a Rolling Stones concert… —Wall Street Journal

Thus the CEO of Boston Scientific raises the price of his company’s bid for Guidant by $1.5 billion, and then goes out to see Mick and Keith play “Satisfaction” for the zillionth time.

But wait—Boston Scientific’s CFO had an even better idea! Read on!

Over the weekend, Chief Financial Officer Larry Best suggested an even bolder bid of $80 a share…

And so it was that Boston Scientific, which had just weeks before, metaphorically speaking, emerged from the crowd, bellied up to the poker table opposite J&J, and audaciously starting bidding for the Guidant pot, went “all-in” with an $80 a share bid for Guidant, as described in today’s Wall Street Journal.

That kind of mano-a-mano bid-hiking might make great ratings for Mike and Vince covering a match at the Mohegan Sun casino, but it is not necessarily the way to spend $27 billion on a company that needs serious attention to recover its leadership in a notoriously complex business.

I have no idea who’s going to “win” the bidding war for Guidant, and I have no idea if in the long run the “winner’s” shareholders will come to celebrate or regret this kind of testosterone-charged deal-making.

But the last headline-splashing, high-stakes takeover-poker-match I recall was RJR. And after the initial thrill of walking away from the table with all the chips, KKR spent years living it down.

Trump - asshole?

I mean no doubt he is a marketing genius.


Gouda is less cheesy than him. He is more shameless than Cramer and CNBC. His hair is the most real thing about him.

Now, the revolutionary book called - TRUMP - HOW TO GET RICH

I wish I could have written this one.

Page one - My dad was rich. Hope this helped. The Trumpster!

No kidding - here is one gem - "Do what you love"

I love porn and trading stocks can't make a buck. Do I get a refund? There is no e-mail address in this book.

All in all, it is worth buying the book to stick in a dark room. The glow of the painted on white teeth are kinda cool in the dark.

He's moved past putz and yutz with this one - just an ASS.

Seagate and Storage

Had a post a few weeks past on Sun Micro's rise from the dead and you should therefore look at storage. the lead came from smart hedge fund manager - Jeff Matthews.

Despite a quick 5 percent selloff in the nasdaq, Seagate has risen another 10 percent.

Storage is underowned and not well undersatood as our needs increase. This is one area of tech that remains bullish.

Apple, Ebay, Yahoo, Google- fasten your seat belt

All the numbers now in - all the stocks are down big.

The writing was on the wall as I wrote in this blog the last few weeks.

Cramer - just way to popular for there to be any real long-term rally in stocks.

CNBC - continued criminal operation

Nasdaq - too big a rally into earnings. This is always the easiest tell. I mean, what a gift when the stocks all hit all-time highs going into a big earning of a great fourth quarter. Small investors get stuck with the hype.

I would love to see more carnage but bought Yahoo today, love to buy back some Apple in the 60's, better yet the 50's, Google - no opinion and Ebay is likely a gift. i like selling puts here on Yahoo and Google into the weakness.

Ebay's Paypal numbers are enormous and the Skype numbers are good and just will get so much better. Ebay still my favorite.

January 17, 2006

"Bueller, Bueller?"

Ferris Bueller remains one of my favorite movies and soon to be one of my son's.

I had the opportunity to see Broderick on Braodway tonight in "The Odd Couple"

Not a great production, but cool to see him up so close and acting.

Little paunch creeping in - welcome to fatherhood.

More on Google vs. Yahoo

The Yahoo miss (whatever) puts more focus on the real battle playing out between yahoo and google.

Fred Wilson - a successful venture capitalist made this recent post. At minimum, it shows how much more Yahoo really offers than Google:

Google vs. Yahoo!

My New Year's Resolution #9 is:

To reduce Google's share of my web clickstream and my blog real estate.

Many readers have taken that to be some kind of Google hating on my part. That's not true at all. I think Google is great and is clearly the most important player on the web right now.

But I have had this sneaking suspicion that much of Google's leadership comes from its brand and positioning and not from superior services. So I have resolved to get off my Google addiction and try the rest of the web, starting with the obvious choice, Yahoo!

I often think of the Avis slogan when I think of Yahoo! It seems to me that Yahoo! tries harder. They try harder to be open and inclusive. They try harder to work with other companies. They try harder to acquire interesting web services (Flickr, Upcoming, and Delicious for example). Of course they have to try harder because they are number two, at least in the mind of web users when it comes to search, which is the starting point for most everything on the web today.

But let's look beyond search. Who is the leader in CPM advertising - Yahoo! Who is the leader in personalization - Yahoo! Who is the leader in behavioral advertising - Yahoo! Who has the best web based RSS platform - Yahoo! I could go on and on. I like where Yahoo! sits and so I am going to give them some run to see how their services compare with Google.

I have started with search as I blogged about a week ago. I have been using Yahoo! search exclusively since New Year's Day. And I have yet to see a reason why Google is a better search experience for me.

About a week ago, I added Yahoo!'s site search to this blog and put it above the fold. I have been using it exclusively for the past week to search my blog and I can say with certainty that Yahoo!'s site search is a lot better than Google's. I often found myself having to get very specific with searches to find old blog posts with Google site search. I find that Yahoo! gets the job done with much less work on my part. So today I am taking Google site search off my blog and going solo with Yahoo!. If my readers don't like the Yahoo! search experience, let me know, and I'll add Google back.

The next step for me is replacing Google's Adsense with Yahoo!'s Publisher Network. I intend to do that this week at some point. I think this will be the hardest comparison for Yahoo! Google has a very impressive business in contextual advertising, based largely on the strength of its Adwords service which used to be linked to Adsense.

But the fact is that Adsense doesn't perform very well on my blog. I earned about $1200 last year, roughly $100 per month, which all went to a non-profit called The Grameen Foundation which supports microlending in the developing world. My eCPM averages about $0.60.

I think the audience that reads my blog ought to be more valuable than $0.60 per thousand impressions and so I am going to see if Yahoo! can do better. My bet is that they won't. But it will be interesting to see what they can do.

I have long said that this blog is a laboratory for me and so I am putting it to work to see whether Google's leadership is more than perception. As always, I'll keep you posted as I learn.

Nikkei mini crash

It does not matter what the news really is - panic is panic. i have neen talking about taking profits in tech and the japan index for a few weeks.

If you didn't, the last few days in japan have seen months of gains taken away and the Nasdaq will be the same in the morning.

I like japan down here again and will nibble on EWJ in the morning.

This could be the last big selloff in the Nikkei for a while. A close below 13,000 would change my mind.

Pricegrabber.com - lighting in a bottle

Came across this analysis of pricegrabbers.com from Nial Kennedy's Weblog.

It is a must read for any entrepreneur:

The story of PriceGrabber part 1: Grabware

Successful companies can be formed out of the failure of a dream and a side project created for friends and family growing into much more. This is the story of the birth of PriceGrabber.com, a shopping comparison search company that grew from a side project into a half-billion dollar sale in about five years.

Grabware was envisioned as a software distribution company providing on-demand distribution of software through store kiosks. A buyer would approach the terminal, choose a few shareware titles or full versions of the software, and an in-store fulfillment service would burn a CD and print a user manual. The same hardware could also be repurposed for custom music selections.

I loved the idea because it allowed more developers a place on the virtual shelf, more frequent release opportunities through downloads to the kiosk, and no more wasteful display boxes the size of a large dictionary holding a 20 MB installer. Retailers could reduce their total software display area, or be more creative with their layout, while stocking a wider selection of titles.

We built a database of shareware titles and opened up shop online, selling custom collections of shareware and freeware CDs shipped anywhere in the world within days. The online commerce site was a demonstration of what in-store kiosks could do with the right retail and software partners.

The company set two pie-in-the-sky measures of success. If we could convince Microsoft to participate as a software manufacturer and CompUSA to sign on as a retail partner the business will have made it and all of the other companies in both spaces would soon clamor to do business with us.

After about 4 months of weekly calls we eventually had our first meeting with Microsoft. Unfortunately they were not as excited about our market-changing idea as we were. Microsoft's products are popular enough to command prime display locations in stores across the country. They essentially receive free advertising on the shelf, stocking bundles such as Office, individual programs such as Word and Excel, or games such as Flight Simulator. Why would any established retailer want to give up their free shelf advertising for a small spot on a 19" screen?

Electronic Arts had a similar answer, although the gaming industry did downsize their packaging a few years later and started including demo versions of games in compilation disks distributed with gaming magazines. CompUSA could manage to staff and maintain rows of cardboard boxes a lot easier than a new fulfillment device. It looked like the dream had died.

Grabware.com, the online marketplace and software showcase continued to do well. Software titles such as Winamp, ICQ, and Audiograbber became must have applications for every computer user. Linux desktops began to take off around the same time but the variety of distributions and extra bundles overwhelmed Internet connections on servers and workstations alike. Grabware was able to monitor the downloads of these hot pieces of software immediately after they were released and make them available to people around the world and take away the tiresome process of trying to get the right archive from the right server at the right time. Grabware was back, powered by the Web and the U.S. Postal Service.

A new business started to take off about the same time as software manufacturers turned down Grabware as a distribution platform. As a side project a few Grabware employees built a web spider designed to discover pricing information on thousands of items from online retailers. The project was called PriceGrabber because we were literally grabbing prices off of the merchant site and placing them in our own database.

It was time for a tough choice. Both Grabware and PriceGrabber had potential to succeed, but with the original Grabware vision dead PriceGrabber held a lot more opportunity and excitement for everyone involved. It was time to focus on just one product and do it really well.

Grabware was lucky enough to find another entrepreneur interested in taking on the business and acquiring our technology. It helps when your potential acquirer is in the same office building too! We moved out of our existing offices into a larger space in the same building, hired a few employees, and started working on building PriceGrabber and new shopping search features full-time.

The story of PriceGrabber part 2: Funding with a zip

This post is part 2 of a series about the early days of shopping comparison site PriceGrabber.com. You may want to read part 1 before continuing.

PriceGrabber was created in 1999, at the height of the Internet boom, with only about $1.5 million in seed money. The company was able to raise a sizable amount of capital using the tools it had created for the general Internet marketplace of expert users and enthusiasts. By tracking exceptional deals from merchant crawls performed multiple times a day PriceGrabber was able to turn bubble-worthy goofs of other companies into seed money for a company built with a founder's vision.

PriceGrabber's first feature retrieved prices from online retailers such as Buy.com or PC Mall and compared those prices against the prices charged by wholesale distributers Ingram Micro or TechData. Most online retailers simply drop-shipped from a wholesale distribution warehouse using automated fulfillment software. The business environment of the go-go 90s and the level of computing automation created pricing mistakes and mismatches throughout retail systems creating bargains at hundreds, if not thousands of dollars off regular prices.

The Internet Archive happens to have captured PriceGrabber's homepage the day I made a few thousand dollars in five minutes. A ViewSonic PJL855 LCD projector normally sold for over $3000 but on October 7,1999 Buy.com had five projectors for sale at around $300 a piece: 90% off the normal sale price. A few clicks later and the order passed through Buy.com's payment system and was passed along to Ingram Micro's warehouse for fulfillment. A week later a few of the projectors showed up on eBay and sold for a profit of about $2500 each. Not a bad day.

Our favorite discounted item was the Iomega Zip 250 drive introduced in 1999. The $200 Zip 250 was extremely popular and well-stocked by all wholesale distributors. It was not uncommon to discover Zip 250 drives for sale in large quantities for under $50 each and resold for a profit of about $100 each. The team bought Zip drives by the truck netting what must have been six-digit profits.

CompUSA -- the same company that had turned away Grabware -- had a very liberal return policy even if you did not purchase an item from their stores. We swapped a few Zip drives for computer workstations, commodity server hardware, and office supplies and sold the rest through auction sites.

In the beginning PriceGrabber did not charge merchants for leads as we were still growing our user base. The "best deals" feature of PriceGrabber.com was eventually pulled from the site as these errors and oversights caused too many embarrassing headaches for merchants paying PriceGrabber for thousands of click-throughs a day.

The name PriceGrabber was meant to represent a spider grabbing an item based on price. PriceGrabber's early days turned well-funded goofs into bootstrapped capital, allowing the founders to retain more control over the business and build for the long-term.

Yahoo or BooHoo

I think the pounding down to 35 here today will be a gift over the long run. Picking some up for the kiddies tomorrow for sure.

Intel is another story. The brain drain will continue as options are a useless incentive to key people for this Company. Stock is where it was over 5 years ago so employees are easily lured.

Earnings, Earnings - "Let's get it started in here"

Earnings alert - Intel misses - duh

Yahoo - huge numbers - ignore the noise, this company just gets it. Weakness is a gift if you have kids you want to give a real gift.

Google - upping the stake and putting some of their cash hoard to work in a big way. Lot's more to come from them.

Google Radio

Google's just-announced decision to buy dMarc Broadcasting for as much as $1.2-billion is the largest acquisition in the company's history. It is particularly interesting that the acquisition is happening in advertising, not search:
The company, dMarc Broadcasting Inc. of Newport Beach, Calif., creates an automated platform that lets advertisers more easily schedule and deliver ads over radio and keep track of when they air. On the broadcaster side, the dMarc technology automatically schedules and places such advertising, helping stations minimize costs.
Under the deal, announced Tuesday, Google would pay dMarc at least $102 million in cash. If performance targets are met, Google would make additional payments of up to $1.14 billion over three years.

Google said it plans to integrate the dMarc technology with its highly successful Google AdWords platform, in which third-party Web sites share revenues with Google for carrying the Mountain View., Calif., company's highly profitable search ads.

The Ipod war?

More proof that it is over comes from a missive I read in www.crossingwallstreet.com:

Recently, I ordered a new laptop from Dell (DELL). A few days later, a small brown box arrived. I thought "man, these laptops are getting tiny." Then I was terrified that there might be "some assembly required." Let’s just say that outside of gin and tonic, I don’t assemble well.

Turns out, it was a free Dell iPod which I got as part of the order. The laptop came the next day.

Just to show you the power of the Apple (AAPL) brand, I don’t even know what the Dell electronic musical device machine is called. Me? I’m calling it my Dell iPod. I think "iPod" is now the generic name as well as a brand name. As the proud owner of many shares of Dell, I have to concede that this thing is the hydrox of the industry.

Well yesterday, the UPS (UPS) guy shows up and gives me another small brown box. Lucky day! I rip it open (like I’m 12) and Ameritrade (AMTD) sent me a video iPod!

How cool is that? In no time, I went from being an iPodless American to having two iPods. Both un-frickin-expected!! I’m now a multiPod! A wePod?

So, the way I seee it is the hardware war is lost on any new players. It is now a download war and that war will get tougher and deeper. I still see Apple as the winner as no other company in the race can be trusted yet. There will be lot's oh hype though.

In the meantime, open an Ameritrade account if you want an IPOD!

Broken Blackberry

Oh the sadness. Travelling for a week with a broken Blackberry - freaked out.

As another example of the shitty customer service from Verizon. They now have 100's of Verizon's store, yet you walk into one and you get treated with the most awful attitude.

I try and get a new one. Nope. Full retail. "How about a loaner, you know, to build a little customer rapport?"


"How about you take a look at this and maybe kick it around in the back room and rub it on your ass for a little good luck"

weird look back

'Well, we are not allowed to handle those because of the liability......on and on.

I can't wait till I can Skype wirelessly! Verizon sucks big time!

January 16, 2006

Blog Revenue

I have been searching for a way to understand the potential monetizing of blogs. I found this great piece from www.buzzmachine.com. It is a good start.

Me and my ads
Read More: Ad
I am trying to learn how ads are working on blogs and so I’m trying to be promiscuous with nearly every method out there. I’m doing this for a lot of reasons: pure curiosity and pure greed among them, but I also want to inform some thoughts on the need for open ad marketplaces to support this new, distributed world. I also have joined with Burst’s Jarvis Coffin to work on a citizens’ media trade association (more on that later). And I want to learn lessons to teach in a journalistic entrepreneurial course I’ll be teaching at CUNY. So, a few tales thus far….

: The most effective means for me has been Henry Copeland’s Blogads. I put them up in the summer and every time I sold an ad, I raised my rates and I still got ads — not a landrush, but some of them included ads for movies and TV shows, which amazed me. I made a few grand and it works well from my end; I don’t know how it works from the advertisers’ end, buying sites at varying rates and efficiencies. But since especially entertainment advertisers keep coming back, I have to figure it’s working, measured either on value or buzz. I just took down my Blogads for now, but only so I could keep playing the field.

: I just joined up with John Battelle’s Federated Media, which is putting together an impressive network (if I can say that) of “author-driven” blogs. FM has a sales staff that promises to sell major advertisers. So far, I’ve had one ad, for the Wall Street Journal (and Fred Wilson made fun of me for that). This is a different model, where the sales negotiation process will determine the cost-per-thousand or cost-per-click rate. Time will tell how it works and who buys. (By the way, please take my survey so advertisers can see how damned smart… and rich… and profligate you all are.)

: I use both Google AdSense and Yahoo Publisher Network targeted text ads, trading them off in the space. See Bill Burnham’s quarterly financial report; he has done better than I have with these methods. There have to be ways to improve the targeting and efficiency of these ads (and Mark Pincus’ Tagsense project has found some ways). But right now, it’s not worth much.

: I have ads on my Feedburner feeds and can’t get to the stats for those, but I am not quitting the day job. Well, actually, I did quit the day job, so I suppose I should regret that now.

: Here’s the tale that amuses me most: Out of nowhere, sometime ago, I got an RFP (request for proposal) from Warner Brothers asking me to bid to get ads on Buzzmachine for the movie North Country. I could not understand a word of the thing. It was filled with jargon: ad-agency media-buyer and ad-technology buzzwords and acroynms aplenty. I had no frigging idea what to do with it. Mind you, I have been in the internet publishing business since practically the start — even sold my first online ad in 1995 — but I had no idea what to do; I can’t imagine what most bloggers would think of this.

Luckily, I happened to be seeing Jarvis Coffin, who’s a good guy and, unlike me, knows what he’s talking about. He said that Burst, the large ad network serving niche-interest sites he founded, would rescue me. So the good folks at Burst responded to the WB RFP with yet more jargon. One email flew buy asking whether Buzzmachine had “100 percent SOV.” I asked what the heck SOV meant. They explained that it’s “share of voice.” I still didn’t understand. But I soon learned it’s something about being the only ad on the page.

The tale continues: WB included Buzzmachine in its buy. But they wanted one of those fancy-t0-them, annoying-to-us ads that pops onto the page for a few seconds. I was willing to go with that. But there were problems. First, because of that SOV thing, I couldn’t have another ad, which meant that Burst had to serve its filler ads on my page and I heard from readers who wondered what was going on. The other problem was that the advertiser’s technology didn’t work; they said it would serve once per user session but instead they apparently set a cookie that said that users would get the ad only once in this lifetime in this or any parallel universe. As a result, I never saw the ad on my site and no one saw it more than once, which meant that Buzzmachine was, as they say, underserving. And that meant that the ad stayed up forever but all anyone ever saw were the filler banners.

And the net result of my first big studio advertising RFP was that I made next to no money and couldn’t put up other ads for weeks.

: No conclusions to all this…. yet.

January 15, 2006

YTod Deals

GolfNow.com  - Phoenix Top Deals

Lojack revisited - you will soon need it to protect your gold coins.

Earnings coming and they should be smoking. Stock is thin and is for the faint of heart, but the Company has been building momentum with great leadership for three years. The installed police just makes me a believer and a buyer on strength and weakness.

GPS is not a real threat unless you want to track the car and thieves yourself. I would prefer a cop.

I think they need a better distribution model, one I plan to present to them shortly but they are a name that will have much to say in asset protection. Perfect acquisition for many companies - even after they quadruple from here. Stock could be had for 3 bucks a few years ago and after a close near 29 a few weeks back, Business Week thought it may be tme to article their rising revenues. Nice journalis, AGAIN.

To be fair, they could be early, just a little late for my liking.

Motorcycles, Cellular tracking, freight tracking and deeper Lojack penetration.

Any thoughts would be appreciated.

Voice recognition

I have been blogging about it before and I keep reading about the developments and sense some big things happening. It is still early and a pain in the ass if you need to rely on it, but you can't type and drive. Well, I do.

One thing Blackberry has really done - eliminate the want for a stick shift. If my Blackberry had Itunes (and could dispense Ambien) - I could die almost happy!

Voice recognition is inevitable and eventually will be standard. Much like GPS has been around for a while, has slowly become mainstream and soon to be standard because of cost.

Mainstream Media sucks

I Just read this from Fortune magazine. Why pay these guys. They are useless. I can write the same drivel for free. I have a few posts ago, actually every post.

First of all, as I have said before, the only thing that makes sense is a hostile takeover OF APPLE. Any head on competition - other than maybe Google, is a waste of time and money. Here is the boring, lame, hype article just the same:

A Google-Microsoft alliance?
Could Apple-envy force tech's archenemies to join forces?

By David Kirkpatrick, FORTUNE senior editor
January 13, 2006: 8:23 AM EST

NEW YORK (FORTUNE) - It seems absurd to say they could become allies -- Google and Microsoft are increasingly archenemies. But there is one company both envy, one whose growing success could change everything -- Apple.

Its integrated software-device-store model for media is so far ahead of everyone else that there is no number two. Microsoft (Research) cites the iTunes/iPod combination as a paradigm for the kind of product set it wants to offer going forward, in which a service generates ongoing revenue in combination with software on a PC, and a mobile device.

And Google (Research)'s big news at last week's CES show was its so-far underwhelming video downloading service. Apple (Research) is already way ahead -- transitioning deftly to add video to its music offerings, including the popular video iPod.

I don't really expect Google and Microsoft to fall into one another's arms any time soon, but Apple CEO Steve Jobs' continuing ability to dazzle not only customers but also Wall Street and beyond has ramifications throughout the tech world.

Expect the unexpected
Alliances will shift to counter the growing influence of this unique company, as they have in the past. After all, Jobs Tuesday launched the new Intel-based Macintoshes -- who would have guessed before the two companies announced their alliance last June that such a thing might happen? It's a consummately unpredictable industry.

Now that the Mac is on Intel chips, the entire landscape shifts. Michael Dell told FORTUNE last June that his company would sell computers with Apple's Mac operating system if it could. His interest must be heightened by now -- analysts believe some of Apple's sales gains are coming at the expense of Dell.

Jobs said Tuesday he won't impede individual users who want to run Windows on the Intel-based Macs, though he's shown no interest, at least publicly, in licensing the Mac OS to companies like Dell. But now customers will no longer have to make a painful choice between Windows and Mac. If you need to run Windows but love the Mac you will be able to use one. And every PC company will, in effect, begin to compete head-on with Apple in PCs. Since none come close to matching Apple's industrial design and software, that could be challenging.

Apple's business today is a unique synthesis of fashion and function. That is a powerful combination so long as both parts can be sustained. It is astonishingly easy and enjoyable to use the Mac and Apple's other hardware and software products, all of which are tightly integrated. And that is exactly what potentially threatens not only Google and Microsoft, but Yahoo, AOL, MySpace, and even Comcast, Verizon Wireless and Tivo -- any company that aims to build electronic entertainment or productivity-related services for consumers.

If Microsoft and Google were ever to work together, it would likely be in hopes that they could better develop such services on Windows-based PCs together, to build allure approaching Apple's on the Mac. If I were at Microsoft, I'd see Google as my best potential partner in such an effort. It is the only company whose coolness matches Apple's.

Of course there's always a possibility that Apple itself might mess up. In an interview with Business Week, Harvard Business School professor and author Clayton Christensen recently said that he thinks Apple is poised for a fall. His main argument: "during the early stages of an industry," customers want proprietary solutions like Apple's today, which "knit" all the parts of a problem together. But he thinks with the further emergence of standards, over time Apple's businesses will mostly turn commodity-like and the solutions more modular. That might erase Apple's advantage, he believes.

But Christensen's error is in thinking that there is an "industry" in which Apple operates. Since Jobs returned to the company, its innovations have increasingly been across conventional industry lines, creating aggregate products that simply serve customers better. Tech's role in our lives is now so fluid that a company like Apple which has a clear understanding of what works for customers is likely to retain an advantage.

The iPod is the centerpiece of Apple's current surge. But it is helping further revive the Mac, which itself is at least as different from Windows-based PCs as the iPod is from its music-player competitors. It remains to be seen whether other tech players can do what it takes to fight back.

How to sell a presentation

I have attended MacWorld for three years and have looked forward to it each time. This year, I had to line up at 5 AM, even held spots in line for my buddy Ian who can't recover even though he is 8 years younger and in much better shape. Wimp.

I digress. Anyways, Guy Kawasaki, a venture capitalist and former Apple employee summarizes the process well on how to give a powerful presentation, big or small:

Lessons from Steve's Keynote
"I attended Steve's keynote address at Macworld Expo San Francisco this morning, and I took a picture of most of the slides that he used. I couldn't capture them all because of the special effects he was using. You can read about these announcements all over the place, but here's a good summary on MacNN.

Admittedly, from a photographic sense, my pictures will win no awards. However, I put them in a loop, so that people can see how one of the world's greatest speakers uses a presentation product (ie, Keynote). Click here to get the loop.

As opposed to the 10/20/30 Rule of PowerPoint, Steve uses the 125 (or so) slides/90 minutes/60 point font rule. :-) But then again, the rules are different for Steve. Here are ten lessons to learn from his keynote:

Minimal text. Many slides had only one or two words.

Extremely large font. If you were the 3,000th person at the back of the room, you could still read the slides.

A handful of bullet items, and he “built” the bullets. They weren't all on screen to start with.

Many, many beautiful screen shots (it helps to have a beautiful OS to take screen shots of, but I digress).

Many, many beautiful images.

Demos of software by the man himself--not calling upon some dweeb because the CEO isn't capable of using his own products.

Powerful use of guests: for example, the CEO of Intel (who was a very good sport and came on stage wearing a clean-room suit) and the head honcho of Microsoft's Macintosh unit.

“Eye candy” use of video. These videos were about a minute or two but captivating. When most speakers incorporate video, they use a a five to ten minute video of a talking head that's just stringing together adjectives like “strategic,” “secure,” “scalable,” and “powerful.”

Near the end, he threw in two “but wait, there's more” moments: he had been using an Intel-based iMac for the whole presentation, and there was a new laptop to announce. (This laptop isn't exactly the answer to my prayers, but God has lots to worry about. It does require a new power adapter, but for a very cool and useful reason called MagSafe. A magnet holds the adapter plug to the laptop, so you can't kick the cord and send your laptop flying.)

Ending on a very human touch of asking the Apple employees who worked in the new products to stand and be recognized. He also acknowledged the Intel employees who worked on the new hardware."

Guy does a good job capturing how he does it!

It is really a powerful 2 hour show. The stock is up 10 points since he began talking just a few days ago. Now that I have had time to load Ilife 2006 and think further about the products, their seems to be more flash than substance this year. Next year should be a big one - Tablet MAC, HD TV, more from the mini and more from Ipod.

I would expect a serious hiccup at some point this year both in the market and the stock, but it will be a great buying opportunity. The retail experience and advances in technology put them in a killer position for the end of the decade and beyond.

Another way to make money?

indeed.com has an interesting way of showing job trends:

In 2005, we gathered over 35 million jobs from thousands of websites. We are allowing anyone to search this archive in order to plot job trends over time.

This is from their website.

The trend is obvious here - good web businesses are allowing anyone to create "mashups" the buzz word for API's that allow small web businesses to use the tools of big web businesses.

As an example, golfnoe.com, uses google maps to pinpoint golf course locations and add value to it's golf business.

In Indeed's case, I see their service of use in the financial markets as we gauge the mobility of people and the job trends in different parts of the country. Well done, indeed!

"Feed mayo to the Tuna"

Marketing is not rocket science. Michael Arrington - creator of www.techcrunch.com and serial entrepreneur throws conflicts to the wind and uses his connections to create buzz in his area of experise - start-ups.

He also is successful in his blog because he has picked a focus. What he calls - Web 2.0 companies.

His barbeque and makeshift meetings can be duplicate din any major city where tech start-ups thrive.

Posted on Sun, Jan. 15, 2006
Web 2.0: `a read and write mechanism'
By Matt Marshall
Mercury News
Michael Arrington, founder and writer of TechCrunch, has become a go-to person for many of the new Silicon Valley Internet companies hoping to strike it big.

Foremost for the companies is to get featured in TechCrunch (www.TechCrunch.com), a blog devoted exclusively to so-called Web 2.0 companies that seek to use the Internet in ways that are more interactive than the previous generation of Internet companies. The new wave of Internet companies also often use more sophisticated Web technologies.

TechCrunch, which launched in June, has more than 20,000 daily visitors, according to Arrington.

Arrington got the idea for the blog while he was doing research for creating Edgeio -- a search engine blog for classified ads posted on blogs -- that he hopes to launch within the next month. In the process, he looked at all types of Internet start-ups because he wanted to track the competition and look at how new, cheap Internet tools such as AJAX and programming languages such as Ruby are being used to launch businesses.

The former corporate lawyer has become an impresario of sorts for Silicon Valley's latest Internet companies.

He opens up his home in Atherton for regular barbecues, where entrepreneurs, geeks and other Internet players gather to network and present ideas and businesses. The gatherings have become a source of buzz about Silicon Valley's start-up scene.

Take start-up Riya, which is developing technology to help identify people in digital photographs for easier sorting. It sponsored a party at Arrington's house in November, paying for pizza for the 250 or so guests that showed up. An early rumor that Google wanted to buy the company was amplified at the party, in part because Riya Chief Executive Munjal Shah, who gave a talk there, didn't deny it.

Google ended up not buying Riya, but the start-up drew attention, and the company recently announced a $15 million round of fresh venture capital.

Some observers have questioned how objective Arrington's TechCrunch blog can be when he writes about companies that have sponsored his parties and when he himself invests in and serves as a consultant to Web 2.0 companies.

But Arrington says he's conscious of these entanglements. ``I'm nervous about conflicts,'' he says, noting that he has a policy of disclosing his consulting relationships when he writes about those companies.

The number of people wanting to come to his barbecues has grown. He has another one scheduled for next month, and for the first time he is having to think about hiring security guards to monitor the door.

Last time, he shut down the Web site where people signed up for the party, drawing the line at 250 attendees, the maximum his house can handle. ``If more people show up, it'll just break,'' he said.

Arrington recently spoke with the Mercury News. Here are edited excerpts from the interview:

Q Why did you start TechCrunch?

A I met (technologist) Dave Winer for the first time last year. We started talking about Web 2.0 companies in general. Everyone was building companies with their heads down, and weren't bothering to locate all of the competition out there.

I was looking to start a company and wanted to know what was out there. But there was no single blog dedicated to all the new start-ups. Since I was doing due diligence on all these companies anyway, it wasn't much harder to write about them.

Q What gave you the idea for the barbecues?

A I had a couple of guys staying here at my place. We said, ``Let's do a barbecue.'' We all called a couple of people. Twenty-five people showed up impromptu. The guys from (video hosting Web site) YouTube showed up. I posted about it on TechCrunch and put up pictures.

So I get all these comments from people saying, ``If you do another one, invite me next time.'' So I did a second one, and 100 people showed up. Then a third one, 200 people.

Q You focus exclusively on Web 2.0 companies. How do you define Web 2.0?

A It's the conversation piece, the interactive piece. It's not just a television-like experience, where you are looking at stuff online and occasionally filling out forms to buy stuff. It's very much a read and write mechanism.

And there's a platform for this -- the new programming tools that are available to people. Look at AJAX and Ruby (new programming tools for creating Web sites), which make it so much easier and cheaper for people to execute on an idea.

The other thing is the rise of the ``edge,'' which (venture capitalist) Fred Wilson has spoken about on his blog. There is so much content being created at the edge of the network -- outside of centralized Web sites. And much of it is useless, but the people who are able to exploit that, format it, and make it structured and mash it up, are going to be really important.

Q Lots of these new Internet companies have been funded by venture capitalists. Is there a bubble now in Web 2.0?

A I don't know. SearchFox (a company that lets you subscribe to online content) closed down. They hadn't raised any money. It's so easy to start companies, and products, and most of them will fail. I don't think that necessarily means there's a bubble.

Things are different. The public isn't paying the price. In the late 1990s companies were going public on Nasdaq. Now, they're getting acquired by Google, AOL, Yahoo and Microsoft. As long as that happens, venture capitalists keep investing.

How long will that continue? It may depend on whether market valuations of Google and others continue to rise. Their appetite might be based on their market capitalization.

Q What areas are overheated?

A The RSS (really simple syndication, which is a protocol that allows people to subscribe to online content) area is ridiculous. Attensa just raised $9 million. Dave Winer just launched an RSS reader (a way to collect your subscribed online content). And that's happening as other guys, with quality products, like SearchFox, are just flat-out shutting down.

Another area one is AJAX home pages. These guys are just launching left and right. Microsoft, Yahoo and Google all have comparable products. They're not going to buy new ones. Another one are the (community-oriented) review sites. They are all funded. But I think their business model is terrible.

January 14, 2006

Skype - latest disruptive technology - Ebay is the one!

I have written on this in the past. I can't believe how low our phone bills are at golfnow.com

Vonage has cool ads, but at $24.99 or whatever, IT IS NOT FREE, therefore, not disruptive. People want to exchange infrmation for free and Skype is the closest thing.

This from a long time CTO - Todd Vernon

FP...on the Internet Application Tipping Point

A few weeks back the world crossed a tipping point. Did you feel it? It was when the world of connected applications started and the age of browser dominance ended…

From this point on, all the killer applications will be connected ones. They won’t be boring web based applications with webpage user interfaces, although AJAX will breath new life into those. They will be fully immersive experiences in code that gets installed onto your desktop. The pendulum is now officially swinging back the other way..If there is one thing consistent in computer science, its that the user experience will move from server, to client, to server, to client.. Only now... its moved into the network..

The tipping point happened when Skype agreed to be purchased by EBay. Not only was this the tipping point of the connected application generation, it was also in my opinion the first acquisition misstep of Google. Interestingly, google has seen the connected revolution coming for quite a while with Google Earth and Picasa being the first of the new world order.

Like all things disruptive, Skype happened on its own terms. Why can’t I talk to anyone in the world over IP using just my computer and broadband connection? And why can’t it happen peer-to-peer sometimes and client server other times? And thanks for the years of ‘standards’ work that the internet telco nerds thought up… but they really don’t serve our needs here.. I LOVE DISRUPTIVE BUSINESSES AND TECHNOLOGIES!!

Still others slightly missed the mark. Vonage a breakthrough company that seemed to ride high a few months ago is now on uncomfortable footing. Why? Their business model is uncomfortably close to the establishment and the use case to the end user is totally replacement. You can’t create a revolution with a new frying pan..