To Prosper or NOT to Prosper.com ?

Posted on November 14, 2011 by JoeDuck

Last year I began an experiment with PROSPER peer to peer lending. The concept is great – cut out the banking middlemen and middlewomen, delivering higher returns to lenders and more borrowing power to investors. Years ago PROSPER struggled with its initial implementation, running into SEC issues which, I think, related to them effectively overreporting the interest PROSPER lenders could reasonably expect to get. Part of the trick here is that as far as I can tell their are a LOT of borrowers on Prosper who have no plans to ever repay the loans. They are assuming, perhaps reasonably, that collections on these small, unsecured loans in this wild online environment will be inadequate and they’ll simply default on them without much consequence.

My strategy last year was to start by lending a total of $500 to the “higher risk, higher return” types of loans. After noting that the return appeared positive I added $2000 to this amount for a better test of the overall return.

I pretty much forgot about this experiment until last week when I logged in to see what was going on with my PROSPER investment. Unfortunately it’s very hard to tell if the return is even positive. They provide me with several numbers but they are confusing. The 4% return they cite seems like the return I’m getting so far – clearly NOT good enough to hassle with this and take the risks, even though it appears I also have an extra 2% from “bonuses” that are given for investing in certain loans at certain times.

All that said, it’s possible I’m going to start to make a much higher return now that the “bad loans” appear to have defaulted. I intentionally picked risky loans that said they’d have a much higher net return and I’m still not clear if Prosper reflects this in the current stats. The average “expected” return on my loans per Prosper would have been well over 10%, so if I wind up with 4% it would seem Prosper could be up to their old trick of under-reporting the risks and/or inflating the expected returns.

Note that with fairly small investments – like my $2,500 in this Prosper Experiment – your TIME starts to matter more than extra money. Making an extra 1% on 2500 is only $25 per year, so it’s worth an hour or two of hassle time but NOT WORTH many hours of hassling, extra tax issues, etc.

I’m skeptical that Prosper offers more than a few extra percent if even that much. THUS thus it would only be worth hassling with if you were investing tens of thousands. In THAT case there is some serious uninsured risk involved, so I’m leaning against Prosper until I see more results from others who, like me, have tested them out and hopefully, unlike me, can figure out the Prosper reporting.

Prosper loans are often paid early or defaulted, which complicates the earnings calculations a lot. They also do NOT pay interest on the ‘float’, or time between funds going into your account and getting invested. Thus you’ll always have some days – perhaps months – where you earn 0% interest. Not a big deal in the current interest environment but even a few weeks at 0% will trim a total rate down quickly. I think there are “auto invest” options to lower this float time and I don’t think it’s scandalous – but it’s not a good thing.

Also, the tax issues alone appear like they may be a major hassle with Prosper. I think one may need to report the total interest and then deduct the “bad loans” as capital losses or gains to avoid overpaying on interest received. This is NOT a simple deal since one generally funds dozens of notes per year. I’m still confused by this part of the PROSPER adventure.

Of course if LENDING is a bad idea at Prosper, Borrowing may be a GOOD idea, though I’m wondering if those who simply default immediately are the big beneficiaries here. The interest rates on borrowing seem incredibly high with Prosper – much higher than a home equity line or even many auto borrowing situations, so if you pay it all off you are going to be paying … a fairly high rate of interest on these small loans.

Overall I’m thinking this may be a “high risk” loan environment and therefore not all that Prosperous one for anybody.

I’ll have more in another post where I’ll show my statement to see if others can figure it out.

Are you practicing censorship? Yes. Just ask Caesar.

Posted on January 29, 2010 by JoeDuck

Interesting debate going on at one of our websites about how to handle advertising coming in from Google adsense with themes that are presented in misleading, stupid, sensational ways. Often these ads are political and tend to be from the frothing-at-the-mouth right wing websites like NewsMax, where they routinely parody Obama.

Since we’ve had complaints about these ads (ie they offend some people and often annoy us), the question arises about what to do. This question is complicated by the fact that it was a *prospective advertiser* who complained to us, so I’m a bit concerned that our incentives in this case are getting aligned with one point of view over another. We don’t want political advertisers having a say in what their political opponents can or can’t say at our site.

I think my partner has come to a good compromise position which is to shut off the images and use the text only ads. He thinks this is NOT a form of censorship but I’d say it is – albeit an acceptable kind of censorship in cases like ours:

I also would say that if one narrows things to the censorship protections defined by free speech provisions of US Constitution the game changes since the supreme court generally argues that for legal purposes we are generally concerned with political censorship and not commercial speech or “hate” speech. Both of those are legally (and I think usually appropriately) censored.

Your definition of censorship is too narrow, a common frustration of mine. This lets people argue – totally speciously – that THEY don’t ever censor but OTHER people do.

Virtually everybody believes in some censorship – in fact I would argue emphatically that “zero censorship” is a sociopathic condition (e.g. child pornographers should be shot or imprisoned, people who routinely shout loud obscenities in public should generally be stifled).

So, is it censorship to limit the choices of people practicing free speech *in any way whatsoever* ? Of course it is!

Why? I direct you to the origins of the word “censor”.

Etymology: Latin, Roman magistrate, from censēre to give as one’s opinion, assess; perhaps akin to Sanskrit śaṁsati he praises

Date: 1526

1 : a person who supervises conduct and morals: as a : an official who examines materials (as publications or films) for objectionable matter b : an official (as in time of war) who reads communications (as letters) and deletes material considered sensitive or harmful
2 : one of two magistrates of early Rome acting as census takers, assessors, and inspectors of morals and conduct

Auth Code Help. Authorization Code Instructions for Domain Name Transfers from Godaddy, Moniker, and more.

Posted on July 30, 2009 by JoeDuck

Skip to highlighted text below for Auth Code Instructions

Even after thousands of domain name transactions over the years I’m always pulling my hair out with domain name transfer process which, like many mixtures of bureaucratic bungling and private sector greed, is about as frustrating, cumbersome, and potentially catastrophic. You can even lose domain names – a key hallmark of many businesses – to scammers, inept registrars, or simple bad luck. This post will be my attempt to help people figure out some of the quirks in the process.

First, recognize that you should not be paying more than about $10 per year for registration unless you are ALSO getting some local help/service/ etc from a webmaster. I use GoDaddy but there are many others that have reasonable fees.

Second, if you have a domain name(s) for your business or other valuable names you should register them for at least 5 years to decrease the chance you’ll lose the name. Also, some believe search algorithms like to see longer registration times as a sign of authenticity, meaning it might help you rank a bit better all other things equal.

Third, BEWARE of the letters in the mail trying to pretend you need to renew a domain name that are really attempts to get you to switch to that registrar. These are often legal forms of scams where they are a real service but are not the registrar you have now.

Generally you will find it easy to initiate a TRANSFER IN to an account, and hard to nearly impossible to TRANSFER OUT. Registrars generally make it very, very difficult to figure out the transfer out process because this will help keep people with them and even if you get angry they are losing your money and business anyway.

Unfortunately you’ll often need to do BOTH of these procedures to move a domain name from one registrar to another. If you focus on the “TRANSFER OUT” and the required “AUTH CODES” and you’ll probably have success.

GODADDY Auth Codes:

Godaddy’s process is cumbersome but fairly straightforward. Full details here from Godaddy. Short version:

Log in to your GoDaddy Account Manager.
In the My Products section, click Domain Manager.
Click the domain for which you want to retrieve the authorization code.
In the Authorization Code field, click the Send by Email hyperlink.
Click OK.
Click OK again.

Moniker Auth Codes.

Moniker is the current front runner in my “diabolically difficult” online routine contest. However once you know the secret you’ll be fine. Be sure to put away ANY guns you have in the house before using their online help system or you’ll be using one on yourself.

The secret: You obtain the Moniker Auth code to do external transfers as follows:

1. Log into your Moniker Account, select “my domains”.

2. Now check the domain(s) you want to transfer out and click “transfer out”

3. Complete the “transfer out” dialog.

4. You should very shortly receive two emails. You want the one that looks like the one below with domain name followed by a comma and a string that is the Auth code for that domain for the next 10 days.

5. If the process fails you may have to repeat this again (and again!) until the transfer “takes”. Often if you purchase a domain from a third party they have *recently* registered that name and you won’t be able to transfer it for 60 days. You’ll thus need to mark your calendar and start the process then as well as make sure the domain is registered at least through the transfer date (usually it will be as a year is usually added during the new registration)

THIS IS ONLY half the transfer process, now you’ll need to follow the instructions from your new registrar to transfer the domain *IN*, but those are usually straightforward if you have the Auth Code.

Example Moniker Tranfer Out email:

[NOTICE] Account: 99999 Requesting Domains For Transfer Away From Moniker

As part of our standard transfer-out procedure, a notification has been submitted to Moniker notifying us of an intent to transfer the following domain(s) away from Moniker

This email serves as confirmation that we have received your notification.

This request will be valid for 10 days (240 hours).

The Reason Given For Transfer Was: changeOwnership

Domain Name,Epp AuthInfo (if applicable)
———– —————————-

2ILLINOIS.COM, 9999999CDC9
2MISSISSIPPI.COM, 9A9999B999EE

How to find your Enom Auth Code:
How to obtain the authorization code and unlock a domain name on eNom

Log in.

In the “Registered domains” row, click “Manage Domains”.

Click the domain you want to unlock.

In the “Manage Domain” menu, click “General Settings”.

To retrieve the EPP key, click “Email Auth Code to Registrant”.

A message confirms that the authorization code has been emailed.

To unlock the domain, go to the “Registrar-Lock” row and select “Disable”, and then click “save”.

A message confirms that the update was successful.

Financial Planning in Southern California

Posted on July 27, 2009 by JoeDuck

It’s always fun to do a shout out to friends and family who have great services and/or online resources. I’m sometimes reluctant because this blog has my own quirky views which may not line up with their prospective clients, but I think everybody here is sharp enough to know that a “shout out” and endorsement at a personal blog does not tell you anything about the politics of anybody.

Today I wanted to note my cousin Ginita Wall in Southern California. She’s a CPA who has been writing books and specializing for many years in helping her clients manage their resources effectively. Although I’ve got a good grip on the basics of personal finance it is always impressive to talk with real experts like Ginita who understand many of the specialized tax and legal nuances you encounter when managing the portfolios of clients.

Her website is: Plan for Wealth She also co-manages a project that focuses on helping women learn about financial planning called WIFE for Women’s Institute for Financial Education. Even today, many women find after a divorce or death of a spouse that they’d left much of the financial management and planning to their husband. This can have serious negative impact.

Another reason to pay more attention to your personal finances today is that there seem to me to be more scams around than ever – I think it’s one of the down sides of the rise of online activity. Even trusted family and friends may lead you astray if they fall into the trap of the many online “get rich quick” schemes which are in my experience *always* a waste of time and money. Ginita’s books offer common sense approaches that help people protect and build wealth over the long haul and manage their finances into post-retirement.

Comscore: Twitter Traffic Explodes

Posted on April 7, 2009 by JoeDuck

Twitter continues to soar in terms of traffic and Comscore reports on some of the reasons Twitter is one of the most interesting applications to come around in a long time. I think the demographics analysis helps us understand why “Twitter is different”. For the first time in Social Media history the earliest adopters of the application are not the youngsters, but rather a very representative cross section of America. This is important because it’s an indication Twitter will have considerable staying power and also is appealing to a crowd that has the resources to make it more valuable than otherwise, and potentially more valuable than Myspace or Facebook, the clear 800 pound social media gorilla that remains the most significant player by far in the social media space. However at Twitter’s current rate of growth it will surpass Myspace by next year and Facebook within a few years, though it’s not clear from this the data that Twitter will continue at the current phenomenal growth rates.

From my own experiences I do think Twitter represents something really different and superior to the Facebook experience, and that is the real time large group interaction. On Facebook I usually don’t have enough friends online at the same time to interact, and more importantly I usually just want to say “hi”, trade a bit of news, and eavedrop on other conversations. This is easier on Twitter. Much like a large party filled with interesting people where you know “some” people and are learning to meet others, Twitter allows you to follow interesting threads and then hop over to some other one, in the meantime dropping notes or your own quips as you hop around. It matches will with the short attention spans that are natural to our human conditions but also allows detailed follows ups with experts or company representatives or close friends.

Watch Twitter – it is the most significant new online application in many years.

The Social Networking Generation(s) enter online “adolescence”

Posted on March 15, 2009 by JoeDuck

Although Social Networking has been around for some time it has not seen anything like the widespread use until fairly recently. Where technologists and early adopters are trying to figure out the importance of the Twitter explosion to the social networking landscape, millions of regular folks are just now starting to come to grips with how social media is changing our relationships and our personal identities in ways we’re only beginning to understand.

Peggy Orenstein has a thoughtful article at the New York Times today about the how Facebook social networking has affected her and also her concerns about how it will change the way kids grow up. She notes how a Facebooker’s post of a picture of her at 16, and her own Facebook account, brought up many items from her past, even including what appeared to be an inappropriate encounter with a high school teacher who now wants to be a Facebook friend.

She asks:

As a survivor of the postage-stamp era, college was my big chance to doff the roles in my family and community that I had outgrown, to reinvent myself, to get busy with the embarrassing, exciting, muddy, wonderful work of creating an adult identity. Can you really do that with your 450 closest friends watching, all tweeting to affirm ad nauseam your present self?

The answer, as anybody who has been socially networking for long knows, is “sure, Peggy, no problem”. I’d argue that the benefits of what we might call socially “‘transparent living” probably far outweigh the costs, though it’ll be years before we understand how all of this will shake out. From a sociological point of view the most intriguing aspect to me is that the technologies are allowing us to expand our “social networks” well beyond the limits that nature intended.

Evolution works too slowly to anticipate most technological changes so our “tribal” genetics has prepared us well to deal with “hundreds” of personal associations rather than the “thousands” we have with even a modest level of socializing online. I suppose you could argue that a “letter to the editor” in a local paper reaches thousands of people, and in this case can even label you for some time depending on how you express your concerns, but most people don’t write these letters where even in rural communities there are many thousands of people using social networks, creating huge numbers of individual interactions every day.

If biological and social evolution really do limit us to only about 150 close personal associations as some have suggested we’ll probably see that social networks will eventually sort of “implode” as people reduce their connections to more manageable numbers of friends. However I don’t really see this – my guess is that we’ll see humans expand their numbers of contacts well beyond the 150 number, reaching a new plateau that will likely be defined as much by our personal history of real associations as by any biological limits. In fact there’s a lot for the Facebooks and Twitters of the world to do to make it easier to manage our growing social networks, and I’d guess we’ll soon see a lot more slicing and dicing of contacts than we have to date into “close friends”, “family”, “business associates”, etc. As in real life we’ll eventually want to control access to our information from different groups in several ways.

Another intriguing aspect of social networking is what we might call the Social Networking “all your base are belong to us” problem. Even if a person despises the internet, social interaction, and everything technological they are already likely to appear in some internet venues and will eventually appear in many social networks. Phone records, your home and real estate, business associations and records, permits, and most importantly photographs and videos are flowing online at a rate of billions and billions of bytes per second. This information is increasingly “tagged” by people you may not even know with information about you, usually without your consent or even your knowledge. Reclusive old curmudgeons beware – you could be all over the place in no time by simply owning a home or phone or attending a family function, Community BBQ, or Shriner’s parade.

Assume that a person on Facebook or Twitter has 200 people who read about them and who they read about. Assuming each person in this network creates a *single item* for *private* review – a photo or short comment. This small level of activity – under a minute of action per person – in one sense explodes to generate 200 x 200=40,000 different personal interactions. Although obviously every participant won’t review every possible interaction which would not be possible without a rash of exploding heads, the total amount of interactions in the total Social-Network-O-Sphere is, literally, mind boggling.

How this will affect our feeble human condition? I don’t know, but you can bet your Twitter we’ll all be dealing with it for some time.

DIGG Losing Money Despite Huge Traffic

Posted on December 20, 2008 by JoeDuck

I was floored to see that DIGG, a key darling of Silicon Valley and arguably one of the key forces that has shaped online social media, is losing a lot of money on abysmal revenues.

These numbers are from Silicon Alley Insider quoting a BusinessWeek article:

Last year the company lost $2.8 million on $4.8 million of revenue
In the first three quarters of 2008, Digg lost $4 million on $6.4 million of revenue.
Digg wanted to sell for $300 million last year, but took funding this fall to set its valuation at $167 million

All this when DIGG sees about 23 million unique visits per month according to QuantCast and some 30 million according to DIGG. Silicon Alley reports that DIGG’s expenses are some 14 million annually and wonders where all that goes. Me too because unlike, say, YouTube I do not think DIGG’s hosting infrastructure would have to be all that massive, and with content from users one has to wonder where the big money goes at DIGG.

More interesting however is that modest revenue number. $4.8 million in revenue on some 250-360 million visits. If we assume only 2.0 page views per visit and 250 million visits over the year DIGG is making about 5 million total on 500 million page views, or just about a penny per page view or $10 CPM.

This is probably overly generous (DIGG says they have 30 million uniques and they probably have more than 2 pageviews per unique). However if true that’s actually a fantastic CPM given that the DIGG audience trends very young and presumably is not the key demographic for most advertisers. Although many prestigious and highly targeted websites tend to charge $30 CPM and up I’m confident that number will decline as advertisers realize how unlikely they are to have positive ROI at that CPM. DIGG appears to be doing better than other youth focused gaming sites where advertising can often run below $1 CPM, in some cases even challenging sites to even break even on server and bandwidth costs.

Microsoft to Aquire Yahoo Search for 20 Billion… or not?

Posted on November 29, 2008 by JoeDuck

While the Times of London is reporting that Microsoft is close to announcing a Yahoo search aquisition at 20 billion with a slew of details suggesting they have a lot of inside information, Venture Beat is suggesting this might be a bogus report as they’ve been told by a key player in the deal, Ross Levinsohn, that he knows nothing of this. Although it’s possible Levinsohn is … covering for the deal it seems odd he’d issue a flat denial if there was something to the rumors.

My wild guess is that the Times had a hot tip about one of the dozens of potential deals that are surely percolating around Yahoo as the stock (and thus buyout value) dips to very low levels, and that they ran with it rather than spend much time researching. This has become a major pitfall of “real time” media, where there is increasing pressure to shoot first and hope your story is correct later. Another possibility is that this is a carefully contrived rumor to pump and dump the stock on Monday – without more denials this is likely to spike Yahoo a few bucks or even more Monday morning.

Disclosure: Long on Yahoo

Mashup Camp and Convergence08

Posted on November 7, 2008 by JoeDuck

Looking forward to two upcoming conferences – Mashup Camp and the very first Convergence 08 conference.

Mashup Camps have been coming to Mountain View for over two years, bringing great startups for their product launches as well as lively discussions about innovations and new products to help the mashup community. There also will be mashup experts from Google, Yahoo, Microsoft, Amazon, and many more key players. Programmable Web has the best coverage of the Mashup topic.

Convergence will have even more provocative content as the first conference to address the intersection of four technologies likely to shape the world in extraordinary ways: Nanotechnology, Biological technologies (gene splicing, stem cells, DNS mapping, life extension) , Information technologies (internet and computing) and Cognitive technologies. This last would, I think, broadly include everything from brain enhancing drugs and devices to artificial intelligence. AI is the most exciting category for me, and I remain convinced that we’ll see conscious computers within about 20 years – hopefully and very possibly less. Conscious computing is likely to change the entire planetary game to such a degree it’s nearly impossible to predict what will happen *after that*, which is one of the issues that will be discussed at the conference.

My main concern is that proponents and predictions keep things real and this does not become a sort of brainstorming session for half-baked ideas and ideologies.

After millions of years of very slow biological evolution we’ve now entered a new age where technology is likely to eclipse most and probably all of our human abilities. Even that fairly obvious idea – which simply is an extension of current developments – leaves many people skeptical, cold to the idea, or even antagonistic about the changes that are coming. Like it or not … we are all in this together and it’s best to keep it that way as much as possible.

Joe Duck

Have Blog. Will Travel. Vaccinate!

Category Archives: internet