Category Archives: companies

Facebook to everybody: “We’re sorry”

Posted on by
1

Mark Zuckerberg is profusely apologizing for Beacon’s shortcomings.  

I’m not proud of the way we’ve handled this situation and I know we can do better …

It sure looks sincere to me and I don’t think sincerity even matters all that much in this case.  They srewed up, they are fixing things fast, time to move on.

Like many I’ve been cynical of Facebook valuations and some of the ridiculous hyperbole, but this whole fiasco was a great study in now quickly you go from being tauted as “the next big thing” to tauted as being “dead”.    Also an example of how major media still does not quite get the web thing – just yesterday we read “Facebook RIP” which foolishly suggested this could be a major event for them.    

Google social is a major stumbling block for Facebook, but Beacon is just a tiny bump in the road to more riches.    That said I still think 15 billion dollar valuation is absurd.   But, I thought Google was overvalued too and I was sure wrong about that…. so far at least.

Scoble to Zuckerberg “Say Something!”

Posted on by
Reply

Robert’s got a post wondering what a lot of people are wondering right now.  Why is Facebook handling the beacon advertising fiasco so quietly, poorly, and stupidly?   However, I think they are right to lay low and wait for this to die down, then suck up with their advertisers and be back at the bank within a week.

1)  Sure, overall there is arrogance here, though Facebook has some reason to puff out their chest given the number of takers at their recent 15 billion valuation (well, it was only 2 takers, but …) 

2) Mark Z is a young buck, and Facebook is a young company.    They went from handling the claims they were the next big thing and would beat out Google to claims they are the antichrist company, stealing users souls.   They are neither, they know this, and it’s hard to react to all that crap so they are not reacting much.

3) BlogOsphere exaggerates problems to a degree that is absurd, and this will mostly go away soon unless users leave Facebook in droves.    Users leaving is unlikely.   Bloggers forgetting about the beacon fiasco is … less than 10 days away.

4) Advertisers don’t really care much about this.  Credibility is an issue but that will be addressed privately.   Probably Zuckerberg will need to step down as commander given this, and that may be a significant development.     If Facebook wants an IPO they’ll want to pull a Google and hire an old guard CEO to manage the kids in the office.    If they don’t – sell that puppy short.

OMG – Facebook scandals are totally boring already.    Can’t we talk about interesting things in Technology?

Oban Scotch for Christmas

Posted on by
6

I owed a friend a pretty good bottle of Scotch for a favor, and knew he liked Oban Scotch.   Unfortunately I had not checked the local price which is consistently $69.95.   Not bad, but I was shooting for a $50 “thank you” gift.   Enter the internet shopping thingie at Google which offered up Turnpike spirits way out east as having the best price by far on Oban – $42 plus shipping.    Unfortunately the website showed “not available” so I called them and got excellent help.  He had some bottles and I managed to order 4 of them.   With shipping I’m going to be under $50, and have a few more nice gifts to give.   Hey Dad – don’t read this post!

Shopping for scotch shows that the internet has not stabilized pricing at all – at least for Oban Scotch.   This single product has dozens of different online prices, which is especially interesting given that locally the price seems almost “fixed”.    I’m guessing few people buy liquor online – perhaps it is an impulse or very-close-to-Christmas purchase usually and therefore people go local?  However it would seem this price inefficiency could be monetized somehow by matching  low online pricing to high priced areas.    I’m guessing that our local liquore store paid more for the bottle they are selling at $69.95 than I just paid Turnpike, so somewhere in here there is a business.

Amazon unearths some great startups

Posted on by
Reply

The Amazon startup contest here has a video profile of the seven finalists in their contest which I think was to showcase users of Amazon Web Services (AWS).   I think  Jeff Barr  will have more about this on his blog or on Amazon’s blog.

These look like some really interesting companies.    One is measuring brain networking, another is providing 19 usability testing (this is brilliant for the small website market!)  One is optimizing PPC campaigns (hmmm – but won’t Google analytics do that extremely well?.)

Facebook’s Brandee Barker – the web’s most thankless job?

Posted on by
Reply

Kara Swisher noted the challenges facing Facebook’s PR head Brandee Barker these days, suggesting she might have one of the most thankless jobs on the web, navigating as she must the frigid and hazardous storm water still swirling in the wake of Facebook’s many recent challenges.

First, Facebook launched “Beacon”, which they foolishly tauted as some sort of landmark in the history of advertising.   Beacon turned out to be more a nasty stain mark as bloggers roundly criticized the approach, and then the New York Times and major advertisers like Coca Cola basically said they were lied to by Facebook.

As if that wasn’t enough bad news, Facebook managed to look like the ultimate hypocrite when they sued a news site for posting too much information about Facebook founder Mark Zuckerberg.    This from a site that had just started an ad campaign to capitalize on the profile information Facebookers provide at sign up, information Facebook had promised to respect and protect from prurient commercialization.

Of course they lost the court case, so now Facebook is maintaining a very high and negative news profile across the board for misleading Facebookers, misleading advertisers, and hypocritically wanting to be treated differently from the way they treat others.

So, hats off to Brandee Barker, PR director at Facebook.   If you make it through this you deserve every penny of your Facebook options value, which hopefully won’t be the next big scandal.

Associated Content monetizing plagiarized content.

Posted on by
Reply

update:  I’ve rewritten this post after realizing Mashable is not saying AC did anything illegal.

Mashable is falling just short of charging Associated Content, a well-funded content distribution portal, with plagiarism.   Apparently an AC contributor has lifted a lot of Mashable articles verbatim and posted them at AC.     Mashable argues that since AC claims to edit contributions they should have caught this. 

As Mashable notes what makes this scraping and stealing more conspicuous is that AC is a relatively big online publishing player, not a junky run of the mill “made for adsense” site that would soon be delisted from Google and abandoned.

Of course, few sites screen contributors fairly carefully.  In the rush to create profitable social communities, many sites are willing to turn a blind eye to who is posting what and from whom.    Google’s getting better at delisting plagiarized content, but it’s still a big problem.    The solution is fairly simple but so far few are willing to implement better screening of publishers and writers.   Google adsense, for example, is often run on the lowliest of scraped content websites.   Since Google has a record of payments to those publishers  I find it hard to believe they are doing a careful job of deleting them from the system.    I have not even heard Google claim that they do anything much to ban people from the Adsense program.     With adsense as a prime monetizer of online content both legitimate and plagiarized, it would be nice to see Google blacklist abusers and pass this along to other advertising networks.

However based on my experiences as an advertiser Google is probably the best at following up and creating at least a minimal level of accountability for publishers.   I bought cheap traffic from Enhance and the number of junk sites was very conspicuous in the logs.  Conversion was close to zero and I discontinued the campaign.  

Venture Capital: Fred rules but his 3x rule is too optimistic! ?

Posted on by
6

Fred Wilson’s got a fascinating post about his history of investments over at Union Square Ventures.   Of course he’s got every reason to post his results, which appear to be exceptional although he has left out a key factor in his little analysis, which is time.  I note over there:

Fred, these are impressive results and to my understanding much better than average VC returns, which are negative, right? Don Dodge posted min-analysis some time ago where he wound up concluding there was a lot more VC failure than is normally thought.

There are elite guys like you and Jeff Clavier who “beat the averages”, but isn’t “making money” with startups an unrealistic expectation, since those VCs and companies that succeed are still around to talk, but those who fail are not blogging about the burgers they now flip to pay the bills?

I’m also noting that without “time” as a factor the return is not meaningful. 3x is easy….if you use a 15 year horizon!

At a very modest annual return of 7.33% one would expect to triple an investment in 15 years.     A 10% return will leave you with 4.5x your initial investment in that same time frame.    More dramatically, if time is not a factor then I’m happy to guarantee you a return of, say, a million percent.  It’ll just take a while.

This isn’t to suggest Fred isn’t a great investor because I think he is the exception to the normal rule in Venture Capital, which are low returns.   After I wrote about Don Dodge’s suggestion that average VC returns appear to be negative  Jeff Clavier also suggested in a blog comment here that only the top 25% of VC firms are averaging positive returns, and this really shook up my understanding of things.

Yahoo! WAKE UP!

Posted on by
3

It’s very frustrating being a Yahoo shareholder.

Not because Yahoo isn’t a good company, in fact Yahoo is a *great* company.

Not because Yahoo doesn’t seem to “get it”, Yahoo arguably “gets it” better than almost all other companies in terms of Web 2.0, the social networking space, and in terms of the importance of open architectures and developer support.

Not because Yahoo doesn’t have any of the lucrative search market share. They are the clear 2nd place in search with huge search activity and over 20% of global internet search traffic.

It’s frustrating because despite all the advantages, Yahoo just can’t seem to capitalize on all these advantagesto turn a good buck, monetize the site to full potential, and increase my share price. Google, with total traffic levels about the same as Yahoo, has a stock capitalization some *FIVE TIMES* that of the company with arguably very similar potential for profits.

Little internet companies and even many very big ones have a good excuse for failing in profitability – online biz is a cold and cruel world and for all the but the huge players everything can turn on a dime. Yahoo, on the other hand, has no good excuse for failing. They are a market maker in terms of online search, global internet reach, online video, and …. this just in for me …. they are HUGE in the Social Networking space. Yes, that would be the social networking space everybody is so excited about. What do I mean by HUGE? Let’s review this graph from Compete.com via TechCrunch.

First we need to note that Compete.com is not even remotely a perfect measure, and also adding “unique visitors” in this fashion is counting some folks twice. Also, they are listing sites like Geocities that are arguably not social sites, though I’d argue they could be “open socialed” quickly with an effort in that direction. Since the overlap at these traffic levels is probably not a very big deal, and also assuming they spend time as if the Yahoo properties are separate sites their ad potential may be the same as if they were different folks, these numbers are important and relevant.

So, the big players first:

Myspace: 72 million unique visits in October

Facebook: 33 million

Yahoo: 38 million …..

<screeching reverse halt noise here>

What? Yahoo has more social traffic than Facebook?! Yes they do if you add Flickr and Geocities and Yahoo Groups.

Aside from the fact that Caterina and Stuart and the Flickr gang are probably thinking they sold out a bit too cheap at only 20 million, Flickr is an astounding success with some 14 million users and growing. Personally, I’d rather hang out at Flickr than Facebook anyway.

So, where does this huge number of users in the Yahoo social networking juggernaut leave us?

Frustrated baby, frustrated……

Bhatia’s battle to give you free software … Game ON!?

Posted on by
1

Over at Webguild I noted a really interesting quote from Sabeer Bhatia, co-founder of HotMail, who suggested very recently that shrinkwrapped software is dead and everybody is going to go online for their office and other applications by 2010.    Consistent with this hypothesis and blustering claim, Bhatia has just launched a new online suite of MS office-like tools.   

Sridhar over at Zoho blogs is really taking Bhatia to task for suggesting that the new product, Instacoll, might capture 1% of the market.   Of course Zoho is not exactly a fan of Instacoll which is a very direct competitor to their offerings, but Sridhar’s point is that venture capital people don’t want companies to shoot for 1% of a market – they want it all.

Frankly, I’m not convinced by any of these points.  People are stubborn with changes.  So first, I think Microsoft will keep plugging along and shrinkwrap will die a slow, not quick, death.   Microsoft’s version of online office tools will be in the best position to win in this game because if they do it cleverly they will slowly transition a huge customer base from Word and Excel and Access over to the online environments and find ways to make money during and after the transition.    

Second, only Microsoft and Google with maybe Yahoo as a distant runner up shot, are likely to capture the online document market.   Why will people choose Instacall or Zoho when they can go with the big guys?    Assume you have three free parties and you are invited to all of them.   They all have a nice dinner for you with similar food, and all are just around the block.   One is at my house, the other at your friend’s house,  and the other at Bratt Pitt and Angelina Jolie’s place.    You are going to Brangelinas, just like you are going to use Google docs.    1% of the office market?   Maybe, but what are you having for dinner again?

Seybold on wireless = early senility?

Posted on by
2

Update:  Andrew Seybold’s reply:  http://www.andrewseybold.com/blog.asp?ID=132

Tonight PBS covered the smart phone market, and asked for input from Andrew Seybold.   He should have been a great choice and clearly has an insider view, so how could he say something this transparently absurd? 

ANDREW SEYBOLD: As much as I respect Google, the wireless industry can’t be an extension of the Internet because wireless bandwidth is finite. It’s a fixed resource, and it is shared bandwidth. The more people who use it in a given area, the less data speed they have.

Andrew, with all due respect – and considerable respect is due, I think you’ve missed something profound here.    Sure, wireless capacity must increase to accommodate all the data, and it certainly will.    There are already technologies like WIMAX and EVDO that will scale up to meet demand, and it’s likely that improvements and new technologies will emerge very fast in response to this cash rich, market.   In any case, it is now *crystal clear* that all players in this space are moving to converge the phone experience with the internet experience.    It is not clear exactly how that will shake out and eventually become seamless, but you are suggesting this is not even the *direction* in which things are moving.  

ERIC SCHMIDT: I completely disagree with the characterization that somehow the wireless network is going to be any different than the wired network, because there’s enormous spectrum becoming available through licensing programs, better radio design, faster computers, and so forth.

Thank you Eric, you are absolutely right.  In fact I expect you already have several plans in place to make the higher speed and broader bands available to prospective gPhones and Google Phones and Android equipped phones.