Industry Standard Unique Content

Briefly: Niche advertising meets the PR world

Jordan Golson — Fri, 05 Sep 2008 12:46:48 -0700

In one of yesterday's HARO newsletters, Peter Shankman ran an advertisement for a condo which is for sale in midtown Manhattan. Shankman's newsletter reaches more than 25,000 readers now -- it just broke that mark this week -- many of whom likely live in New York, given the PR-focus of the newsletter and the glut of PR flacks in NYC. The apartment, which has its own website, is a great example of a non-traditional way to sell a property. The full listing is below:

Today's HARO is sponsored by an apartment in NYC. Seriously. Why not? A fabulous loft like Midtown/Turtle Bay apartment is a large one bedroom with den (used as a children's room) featuring 14 ft ceilings, a storage "attic" (approximately 250 cu.ft.), marble bath with Jacuzzi tub, updated kitchen with granite countertops, huge wall of windows and Chrysler Building views. This cond-op building was recently renovated and has full time doormen, a roof deck and bike room/storage area. Only 10% down, easy board, liberal sublet and pet policy - $685,000. Info: http://www.NycAptForSale.com

HARO runs a variety of advertisements, some from people looking for work and others from employers looking to fill empty spots. Others are for more general products like American Apparel. No word from Shankman on how much he charges, but in a profile of HARO earlier this year, Shankman told The Standard that he makes "way over $100 CPMs." At more than 25,000 readers and 3 newsletters a day, that's not bad for something that started as a mere hobby.

More news, commentary, and predictions from The Industry Standard:

QR codes: The next CueCat, or destined for U.S. success?

Jordan Golson — Fri, 05 Sep 2008 12:40:14 -0700

You may have seen them in airports or on billboards, especially in Japan or Europe: Small, box-shaped graphics with seemingly random arrangements of pixels scattered across the center. You may even have observed some people pointing their mobile phones at them.

The boxes are 2D barcodes, or QR codes (quick response). They are a next-generation barcode technology, pioneered by a Japanese company, Denso-Wave, in the 1990s. A QR code is a small box with a nonsensical-to-the-human-eye series of dots and marks inside. However, to a computer, it can represent up to thousands of characters of information -- far more than the standard line-based barcodes used on most retail goods here.

In Japan, QR codes are frequently put on advertisements or business cards, which can then be photographed with mobile phones and quickly present users with a website, without the user ever needing to type in a URL. The codes can be used to set up one-click purchases (like iTunes downloads by taking a picture of a barcode on an album at a store) or authenticated boarding passes for airplane flights (which you can already do with barcodes on BlackBerrys). The barcode above left would redirect users to the Industry Standard's homepage.

QR codes are very popular in Japan where many cell phones support their use, but haven't taken off in the United States. Though there are aftermarket programs, like this one for the iPhone, that enable QR code reading, they aren't really out in the wild. I have seen them, however, in industrial settings. At a hospital I was at recently, QR codes were put on every patient's ID wristbands, allowing each nurse to scan them when dispensing medicine or taking vital signs.

Will QR codes take off with consumers in the States? I doubt it. It reminds me a lot of the ill-fated CueCat barcode reader which was highly touted during the first tech bubble -- and then disappeared with nary a whimper. However, for industrial applications, QR code makes for a nice alternative to RFID tags, which have come under fire because of privacy concerns over nefarious people "sniffing" RFID tag contents out of the air.

More news, commentary, and predictions fromThe Industry Standard:

Special Feature: The Digital Home of 2013: 10 consumer technologies that will succeed, and five that will fail
Special Feature: Where are they now? The Industry Standard tracks down 10 dot-coms from the Web bubble of the late 1990s
Special Feature: The Industry Standard's Top 25 B-to-Z List Blogs

The TechCrunch50 and DEMO sponsor-off

Jordan Golson — Fri, 05 Sep 2008 09:51:08 -0700

Competing startup-focused conferences DEMO and the upstart TechCrunch50 share a lot of similarities. They share a similar goal -- bring deserving startups some much-needed press. They even occur at the same time: DEMO takes place from September 7th to 9th in San Diego and TC50 is from September 8th to 10th in San Francisco.

One place the conferences differ significantly, however, is on the sponsor roster. DEMO is owned by IDG (disclosure: The Industry Standard is also owned by IDG) and TechCrunch50 is owned and run by TechCrunch editor Michael Arrington and bulldog aficionado Jason Calacanis, founder of several well-known companies in tech, including Weblogs, Inc. and Mahalo. Let's see what companies these conferences managed to snag as sponsoring "partners" (in order they are listed on DEMO and TC50's respective websites):

DEMO: Granite Financial Group, IDC Private Vendor Watch Service, Institute for Information Industry, MicrosoftStartupZone.com, PlugandPlayTechCenter.com, Porter Novelli, Qualcomm, Sun Startup Essentials, Mashable, PRNewswire, ReadWriteWeb, TechConfidential, TheDeal, Übergizmo, VCJ, and VentureBeat. (Update: A complete list of DEMO partners and sponsors appears at the end of this article)

TechCrunch50: Sequoia Capital, Google, Mayfield Fund, Microsoft, Clearstone Venture Partners, Fenwick & West LLP, Charles River Ventures, Perkins Coie, Yahoo, MSN Money, Founders Fund, Salesforce.com, MySpace, Norton, Thomson Reuters, and Seesmic.

On its face, TechCrunch50's partners' list seems more impressive, especially to hopeful startups. Besides having Internet giants Google and Yahoo on the list, Arrington and Calacanis have snagged some big VC firms that will make the TC50 a great networking event for entrepreneurs. Sequoia was the lead investor in Calacanis's Mahalo search engine and has invested in (and made serious money from) some of the biggest names in the Valley. Fenwick & West, one of the most well-known Valley law firms, is offering $10,000 off legal fees for one unfunded TC50 company's first round of financing.

Only one company -- Microsoft -- is represented on both lists.

Update: The complete list of DEMO sponsors and partners is on this page, and includes the following:

GFG Financial Group, IDC Private Vendor Watch Service, Institute for Information Industry, PlugandPlayTechCenter.com, Porter Novelli, Sun Startup Essentials, Qualcomm, MicrosoftStartupZone.com, Cooley Godward Kronish LLP, Connect Public Relations, Comerica Bank, Forum Nokia, NEC, Merrill Corporation, Silicon Valley Bank, UBS, VCNetwork, Angelsoft, IDG Ventures, OpSource, Wilson Sonsini Goodrich & Rosati, Arx, DataEssence, Ethos Networks, Sentrigo, Tufin Technologies, mPortico, Digsu.com, FunP, HomeIT.com, memode, More Management, ppolis, jMap.cc, Wacanai, GuidewireGroup, IDC, Israel Venture Association, GigaOM, Mashable, PR Newswire, ReadWriteWeb, TechConfidential, The Deal, Pulse 2.0, ubergizmo, VCJ, VentureBeat, Atlanta Venture Forum, Band of Angels, BoogarLists, Conference Guru, CornerstoneAngels, Emerging Tech Accelerator, CVCA, EyeToEye, Financing Partners, FundingUniverse, Golden Capital Venture Events, IVCA, Investors Cirle, Kansas Women's Business Center, Microarts Creative Agency, Missouri Venture Forum, National Venture Capital Association, GoldMail, Keiretsu Forum, Newfoundland and Labrador Angel Network, Rocky Mountain Venture Capital Association, OCVG, Tech Coast Angels, Start, wireless industry partnership, VentureDeal, New England Venture Network, Octane, SFNewTech, San Diego Venture Group, and the National Science Foundation.

More news, commentary, and predictions fromThe Industry Standard:

Special Feature: The Digital Home of 2013: 10 consumer technologies that will succeed, and five that will fail
Special Feature: Where are they now? The Industry Standard tracks down 10 dot-coms from the Web bubble of the late 1990s
Special Feature: The Industry Standard's Top 25 B-to-Z List Blogs

Web-based Joost player in closed beta, no word on public release date

Ian Lamont — Fri, 05 Sep 2008 08:48:26 -0700

The long-rumored Web-based Joost player is getting closer to release. Yesterday, two participants in the Industry Standard's prediction market described receiving invitations for a "closed beta" that enables Joost to work in a Web browser, and this morning the company confirmed that a small number of people are testing a "new product." However, the company declined to give more details about the product or the release schedule unless The Industry Standard agreed to refrain from reporting the news until a date determined by the company.

Regular Industry Standard prediction market participant David Kuan said that the new Web-based Joost player renders videos within a browser after a 7.43 MB plugin is installed. Kuan confirmed that it worked in IE 7, but also said there were bugs. He and another user described the test in a comment thread for an Industry Standard prediction that forecast Joost would be forced to announce a Web-based player by November 1. The prediction was made in March, after The Standard noted that Joost's standalone client application was losing ground to Web-based video services such as Hulu and YouTube.

Rumors of a Web-based Joost have been circulating for months. In mid-June, the Silicon Alley Insider said that Joost CEO Mike Volpi stated a Web-based service was weeks away from launch, but the product never materialized over the summer.

More news, commentary, and predictions from The Industry Standard:

Prediction: Joost will announce a Web-based viewer by November 1, 2008
Opinion: 10 'Net services that will succeed (and 10 that will probably fail)
Ian Lamont: Techmeme analysis, part II: 15% of sources account for more than 70% of headlines
Ian Lamont: The real problem with Google's Blogger service: Neglect
Jordan Golson: Intel continues the WiMAX/LTE war of words
Jordan Golson: The TechCrunch50 and DEMO sponsor-off

Briefly: JP Morgan lops $600 million off '09 display ad projection

Ian Lamont — Fri, 05 Sep 2008 08:05:37 -0700

JP Morgan analyst Imran Khan has throttled back earlier growth projections for the Internet display advertising market, changing his 2009 projection from $10 billion to $9.4 billion. He also cut his 2008 forecast to $8.2 billion from $8.6 billion, meaning that annual growth this year would be 14%, compared to the earlier 20% projection.

However, Khan also said search ad growth would remain relatively strong, given long-tail advertisers' "preference for performance-based advertising." His analysis projected search ad growth rates of 27% for 2008 and 26% for fiscal 2009.

More news, commentary, and predictions from The Industry Standard:

Virtual goods and micropayments destined to replace advertising

Cyndy Aleo-Carreira — Fri, 05 Sep 2008 06:52:32 -0700

Earlier this week, Jordan Golson took a look at the analysis by Lightspeed Venture Partners that showed that the sale of virtual goods, or those silly little gifts people seem bent on sending to friends on Facebook, are accounting for approximately 10% of the site's estimated $350 million revenue stream. His claim was that since it's such a small fraction of Facebook's revenue stream, it won't put a dent in advertising, and companies that depend on advertising -- such as Google -- will not consider virtual goods as a serious contender. I respectfully disagree.

While many others in the current Web 2.0 climate would also disagree with me, you need look no further than gaming to see where revenue trends are headed. The Next Big Thing is clearly going to be micropayments for virtual goods. Back in January, BusinessWeek noted that Electronic Arts (EA) had given up trying to sell its FIFA soccer game in South Korea. The game's sales were at a standstill because of the rampant pirating, so they changed the business model. Rather than dig its heels in and cling to the old model, EA gave up selling the game itself. Rather, the company offered free online access to the game, but began charging customers for performance enhancements for virtual players and in-game items like outfits, pricing items at $1.60 each. The result? An average revenue stream of $1 million a month for the game over the previous two years. This from a game that had dropped from 250,000 copies sold there to a mere 10,000 copies in four years due to pirating.

Those clinging to the ad-supported model insist that people don't want to pay for content of any kind, but gaming had consistently proved that false, and it makes sense that Internet companies would follow that lead. The music industry argues that iTunes and other online music retailers are cutting into the former album-oriented sales structure, but all these sites really change with the $0.99 song structure is allowing people to spend the same amount of money on music (or more!) while sampling a larger number of artists. How many people think twice before spending $1 here or $1 there on a song or two, when a full album would require more thought?

Naturally, Google must be looking at micro-payments as a possible alternative revenue stream to advertising. Why would any company bet its entire existence on one model? Any money coming in is a good thing, and it's fairly safe to assume that companies like Google (and Facebook) are looking beyond the typical CPM-dependent ad revenue model to alternate methods of collecting those nickels and dimes consumers aren't afraid of dropping, even in a faltering economy.

More news, commentary, and predictions from The Industry Standard:

Analysis: Facebook makes millions from the sale of virtual goods, but can it rival advertising?
Analysis: Facebook vs. MySpace: The battle for global social network dominance
Analysis: How MySpace Music could beat iTunes
Analysis: 10 cool Facebook applications that you've probably never heard of -- but should

Slinkset downplays custom reddits, announces anonymous functionality

Ian Lamont — Thu, 04 Sep 2008 14:34:38 -0700

Reddit's recent announcement that it will allow users to create custom reddits -- user-moderated news aggregators associated with a unique domain and stylesheet -- made me wonder about the impact on Slinkset. I interviewed the founders of the Y Combinator startup earlier in the summer, and found that one of Slinkset's main selling points was the ability for users create niche aggregators which could be integrated with existing websites. Now that reddit is moving into this area, how will Slinkset be impacted? I pinged co-founder Brett Gibson about the reddit announcement, and he responded with this:

Reddit's announcement certainly makes them a closer competitor, but we still have different goals and are targeting a different audience. While reddit is a destination site looking to grow their user base, we are not a destination site and our immediate focus is on being a tool for creating adjunct voting sites that integrate tightly with existing web pages. There is still plenty of room for us in this market especially among those who would like to create a voting site but aren't interested in giving more users to Condé Nast.

Today, Gibson told me that the company will shortly roll out a feature that lets Slinkset site owners enable anonymous users to vote, comment, and submit items to their sites. The tentative target date for the feature launch is September 16.

It's a bold move. Digg, reddit, and other user-moderated news aggregators have stayed away from anonymous user participation, which can introduce spam, interfere with ranking algorithms, and increase trolls and flames. By opening the gates to anonymous users, Slinkset and its customers will have to contend with these issues. On the other hand, the anonymous functionality will set Slinkset apart from the competition, and potentially boost its userbase in a field dominated by several established companies.

More news, commentary, and predictions from The Industry Standard:

Breaking news, and managing leaks: Online demands changing offline publishing

Cyndy Aleo-Carreira — Thu, 04 Sep 2008 12:56:07 -0700

While the death knell is sounded several times a day for traditional publishing, including mainstream media, we have yet to see any actual industry sector keel over dead yet. Instead, there are signs that the changes in how people consume everything from news to fiction online are driving changes in the offline industry as well. Some changes will obviously improve the way companies do business, but will the consumer always win?

In an interview with Staci Kramer at PaidContent, the AP's chief revenue officer Tom Brettigen talks about changes to the AP's pricing for member outlets. While he notes that the changes amount to a savings for most of its members, budget constraints are still forcing some very painful decisions, including the choice between licensing the AP's syndicated news and retaining local reporters:

“Clearly, we understand that some papers are facing decisions. I can have you or this many local reporters ... hard decisions are being made."

If the number of local reporters declines, does the news become homogenized from market to market?

The speed of the news cycle online seems to be slowly eroding the ability of traditional media sources to break news. Barack Obama's campaign was forced to announce his candidate choice for vice president after news leaked online, and Google's announcement of Chrome was bumped a day due to the company's oversight in mail service: Google Blogoscoped author Philip Lenssen lives in Germany and had mail service on Monday when the U.S. was celebrating a Federal holiday. However, as Owen Thomas at Valleywag noted, Wired had the details about Chrome weeks ago, and managed to keep the story under wraps until the official announcement. In a print journalism world where everyone from the writer to the copy editor to the print manager has access to stories, it's a monumental task to keep secrets. As Wired's executive editor Bob Cohn noted, keeping the story secret involved a change in how the magazine operates, including keeping most of the staff in the dark about the story, a 180-degree change from the magazine's usual routine of informing all the writing staff of each month's content.

So much Internet news and content is based on being first that the demand for leaked content is enormous, as author Stephanie Meyer discovered. At work on a version of her popular novel Twilight told from another' character's point of view, she discovered that 12 draft chapters of the work-in-progress, called Midnight Sun, were leaked online. Knowing which draft version was given out to any particular person or agency made it simple to discover where the link had occurred, but it didn't reverse the damage from her perspective: 12 unfinished chapters were still out of her control. She finally made the decision to release them herself, publishing them on her own Web site, but she has also indefinitely postponed the novel's completion, having the opposite effect. While the reality of links has created the tracking of drafts such as Meyer's, the reaction may cause some backlash when it comes to demand for leaked content, at least in the publishing world. If the choice is between incomplete content obtained quickly and a completed work, most would probably agree that a completed effort is preferred. If more content providers followed Meyer's lead by scrapping or indefinitely postponing a work's completion after a leak, the demand for leaked content may decrease.

More news, commentary, and predictions from The Industry Standard:

Special Feature: The Digital Home of 2013: 10 consumer technologies that will succeed, and five that will fail
Special Feature: Where are they now? The Industry Standard tracks down 10 dot-coms from the Web bubble of the late 1990s
Special Feature: The Industry Standard's Top 25 B-to-Z List Blogs

Five things to love about Google Chrome

Chris Tompkins — Thu, 04 Sep 2008 11:09:47 -0700

Google’s new browser has been a sensation since it launched this week, and for good reason -- it’s a great product. Here are five things you might just learn to love about Google Chrome.

1. It’s fast.

Chrome’s new JavaScript engine is significantly faster than other browsers when it comes to loading Ajax-heavy websites like Digg. On top of that, many other Web-based services and software load in a flash with Chrome.

2. It’s simple.

Everything about Chrome’s interface is efficient. Tabs are presented on top, which subtly highlight which Web pages are open. The UI only has three buttons, rather than endless pull-down menus for unneeded options which clutter up space. Preferences are explained in simple, easy to understand terms to help the uninitiated Web user. And finally, the theme is aesthetically appealing, yet visually neutral, keeping distractions to a minimum. All these things combine to make the uncomplicated browser we’ve always wanted.

3. It has just the right features, and no gimmicks

Chrome sports a number of features which are useful without becoming gimmicky. Some are original while others are obviously cannibalized from other browsers like Opera. Separating tabs is a personal favorite if mine because I work with many Web-based services. The ability to pull away a tab from its parent window to compare Web pages side by side is very useful when data needs to be copied from one tab to another. The second feature that comes in handy is the most-visited thumbnails. These display when a new tab is opened and are adaptive bookmarks which me quickly what sites I was likely to visit. Finally, a small feature that caught my eye is the combined search and address box. While it’s not a new feature, it demonstrates Chrome’s ability to reduce the number of boxes and buttons needed to perform a multitude of functions.

4. It’s more efficient.

After loading up Firefox and Chrome side by side with the same six tabs, Firefox took over 100 megabytes of RAM, while Chrome’s combined processes took a mere 61. Chrome was also about 20 percent more efficient than Internet Explorer 7 in the same side by side comparison.

5. It’s just the beginning.

Google has just released Chrome and it is already a significant competitor to all other established browsers. As Google continues to develop and refine Chrome in subsequent releases, it will only get better, faster, and more efficient.

Even if these five things haven’t convinced you to swear your undying allegiance to Chrome, they do give you a good reason to take a peek at the new browser. Who knows, you just might find you like it a bit more than you expected. You can download it here (Windows XP and Vista only) and after giving it a spin, tell us what you think of Chrome below.

More news, commentary, and predictions fromThe Industry Standard:

Special Feature: The Digital Home of 2013: 10 consumer technologies that will succeed, and five that will fail
Special Feature: Where are they now? The Industry Standard tracks down 10 dot-coms from the Web bubble of the late 1990s
Special Feature: The Industry Standard's Top 25 B-to-Z List Blogs

Niche social network eCirkit quietly disappears

Jordan Golson — Thu, 04 Sep 2008 10:39:17 -0700

Earlier this year, The Industry Standard tagged social networking startup eCirkit as one of 10 net services that would probably fail. Now, that prediction seems to have come true. In August, eCirkit disappeared and the domain was replaced by a holding page with media quotes (including one from Red Herring!) and an invitation to contact the company for "licensing opportunities".

We contacted the company and were promised a response from the CEO, but never heard back. It's unclear how many users the company had, but given the the fact no one commented on the disappearance on blogs or online forums, it's unlikely many people were impacted or even cared.

Not every social network turns into Facebook or Bebo -- eCirkit should be a cautionary tale for anyone trying to get into the social networking business.

More news, commentary, and predictions fromThe Industry Standard:

Special Feature: The Digital Home of 2013: 10 consumer technologies that will succeed, and five that will fail
Special Feature: Where are they now? The Industry Standard tracks down 10 dot-coms from the Web bubble of the late 1990s
Special Feature: The Industry Standard's Top 25 B-to-Z List Blogs

Search advertising: Branding, sales channel, or a waste of money?

Jordan Golson — Thu, 04 Sep 2008 09:45:44 -0700

Two headlines, five days apart: "Search is no longer an after thought for brands" and "Why search doesn't really matter". Confused? Both headlines came from digital marketing site ClickZ, and illustrate the two sides of the search ad coin.

Search is a driver of intent-driven traffic -- "two thirds of people ... were driven to perform a search [after being exposed to an advertising message]. Then 39 percent of those people made a purchase," ">said Robert Murray, president of search-marketing firm iProspect. Sure, he's a little biased, but I'm much more likely to drop a product or brand name into Google to find more information than to go to a manufacturer's website directly. To ensure that sort of traffic ends up in the right place requires some marketing dollars be spent on search -- but only when tied to offline marketing and branding.

And that's where search -- and Internet advertising in general -- falls down.

To move customers down the "purchase funnel" from "I want X product" to "I bought X product" to "You should buy X product too" requires a wide variety of ad purchases on a wide variety of platforms. TV, radio, billboards and the like are great at driving brand awareness, but not as good at driving actual purchases and customer retention.

Search advertising is very effective at driving actual purchases, but there simply isn't enough inventory to drive every sale an advertiser needs. On top of that, without the TV and billboard advertisements, customers wouldn't be doing the searches needed to drive the sales. Search is an important advertising method, but it doesn't drive enough sales directly to be the one ad type used. As the ClickZ article points out, "if one were to ask the largest advertisers in the world to shift $1 billion of their budget into search, they simply couldn't. There isn't enough inventory to buy."

So, what is the answer? A balanced mix of ad spend, spread across a number of ad platforms, but not forgetting that search ads can be the final nail to seal a purchase -- which is good news for Google. Since search ads are so effective at actually driving sales, search ads should -- if advertisers are smart -- continue to drive significant revenue for Google. That's important, because Google makes 97 percent of its revenue from advertising -- and a huge chunk of that from search ads.

More news, commentary, and predictions fromThe Industry Standard:

Special Feature: The Digital Home of 2013: 10 consumer technologies that will succeed, and five that will fail
Special Feature: Where are they now? The Industry Standard tracks down 10 dot-coms from the Web bubble of the late 1990s
Special Feature: The Industry Standard's Top 25 B-to-Z List Blogs

Yahoo's search share down, MySpace and Facebook soar

Cyndy Aleo-Carreira — Thu, 04 Sep 2008 07:42:03 -0700

ClickZ notes that comScore's latest search figures show some trends that some companies may find worrisome, especially beleaguered Yahoo. In evaluating the almost 12 billion online searches conducted in July, Google dominated (as expected), with the site owning 61.9 percent of online searches (up from 61.5 percent in June).

However, while the failed Microsoft-Yahoo deal may be old news, the fallout from the dragged-out negotiations may not be. With an overall growth in number of searches of 3 percent, Yahoo sites saw a 1 percent drop overall, with a startling 10 percent drop across Yahoo sites other than the main portal site. Microsoft saw a 1 percent increase on its MSN/Windows Live site, but the 3 percent drop across other Microsoft properties saw their overall search percentage drop by 1 point.

The biggest climbers in search share? MySpace and Facebook. The two social networking sites both saw huge jumps in number of searches, with MySpace gaining 20 percent and Facebook gaining 10 percent. Neither, however, is showing any sign of threatening Yahoo or Google, at least not yet: Facebook had 173 million searches, and MySpace 539 million searches. Compare that to Yahoo's 2.5 billion searches and Microsoft's 1.1 billion searches, and it's obvious that Facebook and MySpace are not imminent threats to traditional search engines .

More news, commentary, and predictions from The Industry Standard:

Prediction: Yahoo!/Google ad deal fails regulatory muster
Prediction: Jerry Yang ousted as CEO of Yahoo!
News: Picture This: Yahoo wants you to Digg its Buzz
News: Some advice for Yahoo: focus on your strengths

Twitter claims 99.88% uptime for August

Ian Lamont — Wed, 03 Sep 2008 14:28:21 -0700

Has the Twitter Fail Whale finally been tamed? Maybe not, but Twitter HQ reports that it has rarely been sighted in the past four-and-a-half weeks. According to today's Twitter newsletter, the messaging service experienced 99.88% uptime in August, and so far this month the service is showing 99.96% availability. It's not the "five nines" that most communications services shoot for, but it's surely a lot better than the situation earlier in the year, when Twitter downtime was a regular fact of life for many users.

On the other hand, Twitter did not have to contend with major technology conferences or news events in August. That won't last. Everyone is back from vacation, and soon it will be MacWorld again. While it's too early to predict how Twitter will scale, another "Thar she blows!" episode is not out of the question.

More news, commentary, and predictions from The Industry Standard:

Prediction: Twitter attracts 2 million U.S. visitors per month by July '08
Analysis: Is Twitter worth $75 million? $150 million? How about none of the above?
Analysis: Just 200,000 active Twitter users?
Analysis: Twitter: Fanatical users help build the brand, but not revenue
Special Feature: The Industry Standard's Top 25 B-to-Z List Blogs
Special Feature: 10 'Net services that will succeed (and 10 that will probably fail)

Picture This: Yahoo wants you to Digg its Buzz

Jordan Golson — Wed, 03 Sep 2008 13:45:18 -0700

Yahoo is embracing social networking and link-sharing more than its breatheren -- so much so that it's referring users of Digg-clone Yahoo Buzz to competing sites like Digg, Stumbleupon and Facebook. Nothing like a social link voting site referring users to another social link voting site to create some circular traffic flow. I did something like that with Fark and Digg once -- thank goodness, the Internet didn't blow up.

More news, commentary, and predictions fromThe Industry Standard:

Special Feature: The Digital Home of 2013: 10 consumer technologies that will succeed, and five that will fail
Special Feature: Where are they now? The Industry Standard tracks down 10 dot-coms from the Web bubble of the late 1990s
Special Feature: The Industry Standard's Top 25 B-to-Z List Blogs

Some advice for Yahoo: focus on your strengths

Jordan Golson — Wed, 03 Sep 2008 13:37:27 -0700

If I were to ask 100 people on the street what business Google is in, I bet most of them would say "search". If I asked the same 100 people what business Yahoo is in, I bet they would say "search". They'd be wrong on both counts.

Google is first and foremost an ad company, with 97% of its revenue coming from advertising. Yahoo has, more or less, always been in the content business. It has recently begun portraying itself as a "news organization," but there is some question about how far it intends to go with original news.

Through its early days as a directory of links (which is still around); its ultra-high traffic Yahoo News and Yahoo Finance sites; Yahoo Mail and Yahoo IM communications platforms; or new projects like the Yahoo live videocasting service or the Digg-like Yahoo! Buzz -- the company has always offered readers an abundance of information both onsite and offsite. Much of it is licensed, non-original content. The company has syndication deals with a number of news organizations including the Associated Press, Reuters, Agence France Presse, The Huffington Post, The New York Times, and many more. As a result of these deals, Yahoo keeps a huge number of readers within the Yahoo family of sites, rather than redirecting them back to individual news websites.

In the same vein, Yahoo licenses a wide variety of financial information to keep users within the Yahoo! Finance site, rather than redirecting to partner sites like Google Finance does. Yahoo also licenses sports scores, TV listings, and movie reviews and showtimes -- all done so the company can keep users on-site, and generating a truly staggering number of page views.

Google, on the other hand, barely generate any original content, excepting the occasional Google corporate blog post and only licenses content from a few sources, mostly for its News and Finance sites. Google runs its ads next to scraped (search engine and, mostly, Google News) or user-uploaded/generated content (Blogger/YouTube). As a result, the company has gotten in legal hot water several times over what Google claims is its fair use right to reuse otherwise copyrighted information. These cases have been decided, for the most part, in Google's favor.

So, Google runs advertising against other people's content -- that it doesn't pay for. Yahoo runs ads (less effectively, natch) against other people's content -- that it does pay for. But, not always. Yahoo is trying to pick up the ball as a content company, once again. Yahoo interviewed South Korean president Lee Myung-bak and worked with Politico to run a pair of exclusive internet-only interviews with George W. Bush and Condoleezza Rice. Yahoo and Politico also paired up for coverage of the Democratic and Republican National Conventions.

How does Yahoo get these "exclusives"? Simply put, the company reaches more readers than just about any other content provider. "We get these interviews because we have this global audience of 500 million viewers," director of editorial programming Jessica Barron told the AFP. "Yahoo News is a news organization."

Really? If syndicating AP stories makes you a news organization, OK -- but I don't see Yahoo moving extensively into content creation. The company's limited resources are much better spent doing what Ms. Barron suggested: utilizing the company's global reach to grab super-high profile one-offs that it can promote heavily across the network, generating massive traffic and media coverage.

Yahoo needs to focus on things like this that it does well: generating massive traffic and reaching a huge number of users instead of trying to force things that it does less well, like search. The company's much publicized search-ad deal with Google is a good start, as are new ventures like Yahoo Buzz that hugely leverage Yahoo's massive front page traffic with the potential for stories to get promoted there.

I wouldn't be surprised if Yahoo started quietly spending money to roll up big-name blogs, like Michael Arrington suggested last year. Yahoo has the reach to get the content in front of more eyeballs and the spare cash to snatch up blogging companies. As for Google, let them make their billions with ads.

Carat's layoff plans revealed by botched email

Ian Lamont — Wed, 03 Sep 2008 12:28:25 -0700

Misdirected email has been around for decades. Still, many people have yet to realize that sensitive messages should be treated with extreme care -- one fatuous click can result in confidential information being distributed to the wrong people, leading to disaster. Carat's New York HR chief found this out the hard way, after forwarding a list of upcoming layoff talking points intended for senior management to all of the marketing agency's staff in the United States, according to AdAge:

"While the documents don't detail how many employees will be laid off, they do say the agency plans to consolidate its buying team in New York and that the changes will be announced later this month. Repeatedly describing the moves as a "right-sizing" of the agency, the documents also indicate that offices including Boston, Chicago, Dallas, Los Angeles and San Francisco are affected, and that the changes are a response to the loss of key pieces of business and reduction in client spending. "

AdAge reports that the agency's "chief people officer" in New York was responsible. The company's IT group attempted to halt distribution of the message and its attachments, but it was not in time.

Carat focuses on "interactive television" and the Internet for its clients but AdAge notes that the firm has recently lost several important clients, including Hyndai and New Line Cinema.

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Facebook makes millions from the sale of virtual goods, but can it rival advertising?

Jordan Golson — Wed, 03 Sep 2008 12:07:49 -0700

Facebook is making around $35 million a year from digital gift sales, according to an analysis by Lightspeed Venture Partners. That's a significant amount -- about 10 percent of the $300-350 million in revenue that Facebook expects to book this year.

The "gifts" -- things like a "box of chocolates" or "birthday cake" -- can be given from one user to another for $1 on special occasions -- or "just because." Thirty-five million dollars is not chump change, and as Facebook's userbase grows, I expect this incremental revenue will continue to rise.

However, virtual good sales are no match for advertising. I don't have precise numbers to reference, but Lightspeed's research found that the most popular Facebook gifts by far are the "free" gifts that are paid for by advertisers -- a bottle of Sprite, for example.

The money to be made from advertising is far greater -- and more consistent -- than virtual goods sales. Looking at these numbers, an associate asked if virtual goods had piqued Google's interest as the company moves into virtual worlds like Lively. My reaction? Highly doubtful.

E-Flowers may generate a few million dollars for Facebook, but for a multibillion dollar company like Google, it's small potatoes -- not even worth handling. Google is an advertising company and there aren't enough virtual goods in the world to make it more compelling than advertising. Google's 3D initiatives like Lively are merely Google flinging the proverbial poo at the wall to see what sticks (so it can sell more advertising on it).

Mark Zuckerberg may like the virtual goods adding some money to his bottom line (for just about zero cost), but it definitely doesn't make Facebook worth $15 billion -- the value that Microsoft assigned to the company after its investment last year. Facebook has a unique platform to reach a lot of discretionary income -- it best focus on getting advertisers in touch with its users, and not get too excited over virtual goods sales. I've put in a request to Facebook for more information on its virtual gifts, but haven't heard back yet.

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Where are they now: Net Perceptions

David Cotriss — Wed, 03 Sep 2008 09:21:26 -0700

Since the Web entered mainstream usage, retailers have been intrigued -- some would say obsessed -- with the idea of using the Internet to attract customers and sell goods. However, companies quickly realized that customers couldn't always find the right products using site navigation, drill-down menus, and search. Many turned to the "recommendation engine" developed by Net Perceptions. In this installment of Where Are They Now, we'll examine the history of the company, from its early Web-focused roots to its eventual shift into manufacturing.

Founding: Net Perceptions launched in 1996, with a mission to sell its recommendation engine technology to e-commerce websites. It was co-founded by CEO Steven Snyder, previously a vice president at employee talent management company Personnel Decisions International. Other co-founders included John Riedl, Brad Miller, Joe Konstan, and David Gardiner. The company raised $12 million from investors including Hummer Winblad Venture Partners, St. Paul Venture Capital (now Split Rock), Jafco (now Globespan Capital Partners), Paul Allen's Vulcan Ventures, and Berkeley International Capital.

History: During the infancy of e-commerce, vendors would place products in an online store and hope that buyers would be able to find and buy the products that best suited them, using navigation, search, or promotions. As the field became more competitive, a new technology appeared. It was called "collaborative filtering," and was created by John Riedl through a research program he started at the University of Minnesota in 1992. Collaborative filtering let websites make product recommendations to site visitors. Riedl was a co-founder of Net Perceptions, and became known as the "father of collaborative filtering" according to its former CEO, Steven Snyder.

Snyder describes the technology in an email interview with The Industry Standard. "We called our product a 'recommendation engine' because it allowed a site (like Amazon) to make personalized recommendations to each of their customers," says Snyder. "These recommendations were uncannily accurate -- and customers found them very useful. Recommendations were made by finding a group of 'similar others' within an online community. The engine would use these similarities to make recommendations of what a person might find interesting or appealing. This facilitated the type of one-to-one marketing that was greatly discussed in the early days of the Internet."

Snyder says the technology offered two important benefits -- increased revenues, and improved customer experiences. The company's recommendation engine was sold to over 250 sites. "We also expanded our customer base to large catalog merchants who used our technology to achieve add-on sales in their inbound call centers," he adds.

The company's pioneering technology led to a successful IPO in April 1999, which raised $40 million, along with another $85 million in a secondary offering in March 2000. The company reached its highest valuation of $1.5 billion in February 2000.

According to Snyder, the biggest challenge was growing Net Perceptions' internal infrastructure to support its growing base of customers. For e-commerce sites, integrating personalization technology with legacy systems often proved challenging.

While hype helped boost Net Perceptions, the fallout from the bursting of the Internet bubble was brutal. The price of the company's stock plummeted from $57 in March 2000 to less than $1 in March 2001, and the company cut approximately three-quarters of its workforce. Snyder states that the company's problems mostly arose from market forces, and is sharply critical of the investor mentality at the time. "I think that the biggest ‘failure' was a failure of the capital market system," Snyder says. "Many stakeholders contributed to this failure -- overhyping by investment bankers, statements by Alan Greenspan, and of course, the desire of investors to ‘get in' on a hot investment. All these players contributed to what is now called the ‘Internet bubble'. Essentially, the market became so overhyped that the system was destined to collapse. That's what happened beginning in October 2000. This was not specific to our company -- but, instead was systematic throughout the entire industry."

What Happened: Net Perceptions never turned a profit in the early years, but it did manage to conserve its cash and investments, which helped it survive the bursting of the tech bubble. According to Snyder, the board considered multiple acquisition offers as late as 2003, but ultimately decided to do the following: Return the remaining money to the shareholders, sell its patent portfolio to Intellectual Adventures, sell the corporate shell of the company for the tax loss that could be carried forward, and allow a core group of developers to continue to service customers on a consulting basis.

Where Are They Now? Steven Snyder now runs Snyder Leadership Group, which provides leadership and organizational consulting. He also teaches Business Ethics at the Carlson School of Management at the University of Minnesota. John Riedl is back on the faculty of the University of Minnesota, where he still does research on collaborative filtering along with Joe Konstan. Brad Miller now teaches computer science at Luther College in Iowa.

While Net Perceptions may no longer exist, it certainly left a legacy. "The good news is that the [type of] technology we invented -- collaborative filtering -- is now ubiquitous," Snyder states. "All the major platforms (IBM, Microsoft, Oracle, and so forth) have some flavor of collaborative filtering. And Amazon continues to make personalized recommendations to tens of millions of customers using their own blend of collaborative filtering and other recommendation technologies." He says that several of the company's developers now work for Amazon.

Net Perceptions changed its name to the Stamford Industrial Group in 2007. SIG describes itself as "a leading independent manufacturer of steel counter-weights and structural weldments that are incorporated into a variety of industrial equipment, including aerial work platforms, cranes, elevators and material handling equipment." The Net Perceptions website now serves as the SIG homepage.

Other companies profiled in Where Are They Now:

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Picture This: Did Google release Chrome or something?

Cyndy Aleo-Carreira — Tue, 02 Sep 2008 19:38:08 -0700

Apparently, Google released some sort of browser Tuesday? But those who have Macs may not even care (Google says a Mac version is in development). Twitter and FriendFeed users apparently seem to care a good bit, however.

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Linden Lab positions Second Life as cost-effective telepresence

Cyndy Aleo-Carreira — Tue, 02 Sep 2008 19:17:11 -0700

In an interview with CNet's Dan Farber, Linden Lab VP of platforms and technology development Joe Miller discusses business applications for Second Life, including meetings, interviews, and project collaboration. The biggest issue with the interview (and the associated controversial headline) is that Second Life can't, and shouldn't be, compared with a product like Cisco TelePresence.

Stacking one up against the other in terms of performance is a moot point; Cisco's product would win hands-down when it comes to quality of communication, the ability to have full HD video for any virtual meeting, and the assurance that any interactions would be completely griefer-free.

However, when it comes to providing a solution for small companies and any business use that needs to stay within the confines of a tight budget, especially in today's economy, it's obvious that Second Life wins handily. Sure, there is always the possibility that a prospective employee will forget to remove his or her wings before showing up for a job interview, but as a cost-effective solution, Second Life can be an improvement over phone interviews or travel costs.

TelePresence has long suffered from the "if you have to ask you can't afford it" syndrome, and unless you were a large company, the costs and bandwidth requirements were prohibitive. Our sister publication, Network Word, looked at Proctor & Gamble's struggles as a TelePresence early adopter, and Proctor & Gamble is an $83 billion company with over 40 set-ups installed (which cost somewhere in the neighborhood of $300,000 per set-up).

In comparison, Second Life probably looks a lot better, especially for smaller companies. A private region costs $1000 to purchase, and a monthly maintenance fee of $295, a more cost-effective solution than relying on TelePresence providers or purchasing set-ups. With voice capabilities and the ability to add anyone in to a collaborative session who has a PC without requiring any specific set-up, it's also a far more inclusive solution, especially when looking for something between a phone interview or webcam chat and flying a candidate in for an interview.

TelePresence demo:

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Briefly: Hulu gets fall premieres first

Chris Tompkins — Tue, 02 Sep 2008 14:02:34 -0700

Hulu announced today that the fall premieres of Knight Rider, Lipstick Jungle, Chuck and Life will debut on Hulu first, before hitting network television. Viewers will also be able to see season premieres of Heroes, The Office and 30 Rock as well as other NBC and FOX shows when they are broadcast on network television. The move to debut season premieres on Hulu is a radical change from last season’s schedule where it was rare to be able to watch shows within a week of their original airing.

Debuting shows online first isn’t new, though. Tudors is shown on YouTube before being aired, and the premiere of Battlestar Galactica was shown earlier on NBCU than on television but later slinked back into a seven-day delay before weekly shows were shown on Hulu.

This announcement comes after Hulu also began a $50 million television advertising campaign to attract more viewers to the FOX and NBC joint website.

More news, commentary, and predictions from The Industry Standard:

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Real Dan Lyons to bring back Fake Steve Jobs for Newsweek?

Jordan Golson — Tue, 02 Sep 2008 13:10:06 -0700

Dan Lyons, recently hired as a technology editor at Newsweek, may bring his Fake Steve Jobs blog back to life on the mag's website according to an email Lyons sent to a blogger at MacSoda.com.

I’m starting at Newsweek tomorrow and Fake Steve was supposed to be part of my job. So we’re going to discuss whether to revive the blog.

The Fake Steve Jobs blog shuttered earlier this year because of Lyons's concerns over Real Steve's health -- he didn't feel comfortable blogging as Fake Steve with questions about Jobs's actual health looming.

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Briefly: Judge denies request to maintain e-Bullion's computer systems

Ian Lamont — Tue, 02 Sep 2008 12:17:52 -0700

A motion filed by lawyers for James Fayed and e-Bullion to maintain the company's computer systems has been turned down, according to a report in the Ventura County Star.

Lawyers had requested that authorities release $300,000 out of approximately $24 million in assets that had been seized from e-Bullion's offices and Fayed's home by FBI and IRS agents on August 5, after Fayed was charged with operating a money transmittal business without a license. U.S. District Court Judge Philip Gutierrez was quoted as saying the motion to release the funds "seems more like it's preserving a business rather than preserving data" that could serve as evidence in the trial.

Background:

Drudge logs busiest month ever, averaging 20 million page views per day

Jordan Golson — Tue, 02 Sep 2008 10:03:38 -0700

Matt Drudge's über-news site Drudge Report said today in an email to subscribers that August was the site's best month ever.

MANY THANKS FOR MAKING AUGUST 2008 THE MOST-VISITED MONTH IN DRUDGEREPORT'S 13 YEAR-HISTORY!... THE PAGE LOADED 614,577,960 TIMES WITH 14,163,025 UNIQUES, SMASHING PREVIOUS HIGH, SET IN MARCH...

That's just under 20,000,000 page views per day. Combine this with the latest Hitwise report that logs the Drudge Report as the sixth most popular News and Media site in the United States, just above the New York Times, with 1.78% market share -- and it reaffirms just what a force Drudge is.

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Rumor: Microsoft says "goodbye to laser" and launches "Blue Track" mouse

Jordan Golson — Tue, 02 Sep 2008 07:58:41 -0700

Microsoft is promoting what some gadget sites think is a new type of mouse tracking technology. The tagline "Say Goodbye to Laser" appeared on Microsoft's hardware site with a previously unseen logo. Commenters on Engadget found a now-removed page on Amazon Germany's website, which gave more information.

The new technology, called "Blue Track" is based on a "blue LED combined with a wide-angle lens that's supposed to work on more surfaces than laser and optical." All that is neat, I suppose, but I don't know if it's really "goodbye to laser."

The new mouse will likely be introduced at a September 9th event where Microsoft will roll out its latest product line.

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