Is Mark Cuban the Sith Lord?

Sorry folks. Took a break to enjoy the holidays (and wrap up the quarter as well). Here's a funny post by Mark Cuban... well maybe more sad than funny ;)

More free money

From Siliconbeat, Gravee is a new meta search engine that shares ad revenue with content owners and publishers (up to 70% of the ad revenue generated is divided up between the 10 sites in the natural search results on the page). Gravee hopes the payments would drive content owners and publishers to provide previously inaccessible/richer results to its search engine. It's a different take from what Bill Gates had referenced - revenue share with actual searchers - but accomplishes the same end goal, increasing commoditization and competition in ad-based search. Gravee obviously has a user awareness issue to contend with, but it's potentially another tack for MSN, Yahoo or Ask to take...

GoogAOL II

Huh? According to the NY Times, AOL has 'coaxed' Google to adopt flashier ads. What the heck is happening over in Googland? It's like Yoko came onto the scene... I should have titled this post AOLGoogle.

Office Space > GYM

This is one of the funniest internal memos I've read. Thanks Cindy :)

Btw, Office Space is one of the best movies ever.

Touchable

At least I'm not the only one (opinion on Google/AOL deal from Techdirt). While there's been a lot of hearsay on the details of the deal, I don't comprehend why an AOL deal is such a boon for Google (up 3% today on the news). Buying a 5% share represents a $20B valuation for AOL (with most analysts valuing AOL at $12-$14B as a separate entity), for a company with falling subcriptions and revenue at general risk. Normally slowing/falling revenue wouldn't translate to a 60-80% premium.

At the end of the day, I think Microsoft walks away from this fairly smug. Rumors regarding the deal state AOL not only received preferred placement on Google (which some find fairly heretical to Google's mission) but also ceded advertising inventory to AOL's sales team (on both AOL, Google and Google publishers' sites). MS ultimately forced Google to buy their own ad revenue at a premium, cede at least partial control of ad sales to AOL, reduce the algorithmic 'neutral' status of Google ad results and distance themselves from at least some of their customers (with AOL as a middleman).

Reminds me of a scene from The Untouchables when the mob shot one of Eliott Ness' FBI agents and scrawled 'Touchable' on the wall of an elevator. Microsoft making Google respond to its competitive pressure makes Google touchable as well. You can only assume this is the first of many strikes by MS on Google going forward...

Update: Marissa Mayer clarifies some of the finer points of the AOL deal on the Google blog (post_here). She states that AOL will not receive preferential treatment on ads (I'm not sure how giving a $300MM credit to AOL doesn't equate to 'preferential treatment' on advertising). Marissa states AOL will continue to have Onebox access (she doesn't clarify if AOL will receive more visibility in Onebox or not). She denies that Google will 'ever' have banner or flashy ads on the homepage or on search results (I assume that doesn't exclude other pages beyond these).

GoogAOL

Yuck. From the NY Times on the upcoming AOL and Google deal:

"Finally, around 9 p.m., Richard D. Parsons, chief executive of Time Warner told Eric E. Schmidt, chief executive of Google, that he would accept Google's recently sweetened offer. Google, which prides itself on the purity of its search results, agreed to give favored placement to content from AOL throughout its site, something it has never done before."

Favored placement for AOL? Nuff said...

It's elementary Watson

Quick post. Intellext just launched a free version of Watson integrated to eBay (redherring_article). Watson is a sidebar application that automatically conducts relevant contextual searches related to the content within a word doc, presentation, email, browser window, or anything else that a user is looking at. The app includes a shopping tab that conducts real-time searches of products on eBay, Amazon and other channels when viewing a product description online. Watson also searches other resources including news, blogs and (for a premium) subscription services like Forrester, Gartner and others. Pretty cool compared to the reactive search norm (enter search term, get results, etc). Intellext is using eBay's Affiliate program to help offer Watson free-of-charge for consumers.

Also, for those of you who haven't already heard about it, check out Meebo. It's an Ajax-enabled web-interface for IM. There are a few other players out there providing web access to IM (e-messenger.net and webmessenger.msn.com) but neither is as slick. Meebo's traffic has been skyrocketing and rumor has it they just raised a round from Sequioa a whole 3 months after going live. You know we are truly in a new Internet boom when 3 Stanford grads can bring a service to life relying on open source, cheap bandwidth and commoditized hardware. Put Ajax into the mix onto a concept already launched by other players and kaboom :)

Alexa - Rocky I or Rocky VI?

I've posted in the past about Alexa and its lost potential. I also posted that Microsoft should launch a white-labeled API-driven search platform via Start.com. Looks like I got the concept right, if not the company (story_here) with Amazon launching a near-free Alexa search platform. Amazon had already been offering an API to Alexa, but now has increased the stake by white-labeling the whole service and charging a small usage fee for access and hosting ($1 per gig storage used, $1 per 50 gigs of data processed, and $1 per gig uploaded). You've got to admire the folks at Amazon for their aggressiveness (if not yet the success of their non-book offerings).

The possibilities here are endless. One of the largest barrier to building competitors in search had been the data costs in spidering and caching the billions of pages needed to drive a useful search engine. Now that cost is essentially immaterial. Amazon's version of Web 2.0 (search as web service) could be game changing... We should start seeing a whole lot of competitors in this space as a result, helping drive the commoditization of search, ultimately reducing advertising margins. Imagine if Alexa (or one of the developers building off their platform) offered an Adsense program where it only took 1-5% of the search proceeds and gave publishers 95-99% of the revenue. :) You get the drift.

So here's hoping Alexa is more Rocky I (makes a great comeback) than Rocky VI (should be retired indefinitely). Regardless, kudos to team Amazon for taking that risk.

Yahoo! vs Skype

Another good analysis from Henry Blodget on Yahoo! vs Skype (click_here). He summarizes that we should see in 3 months whether Yahoo! has any pick up in VOIP or not. The clock starts now...

Strength in numbers v2

Josh Scott from eBay's Business & Industrial team just started up his own blog (http://twostepsatatime.blogspot.com/). Great post Josh. I couldn't agree more :) Now if we could only convince every Category and Product Manager to start their own, we would have a damn army...

It's actually an interesting notion. If you have a lot of folks at a company blogging a shared discussion (if not vision)and interlinking blogs, I can't think of a better way to evangelize said discussion (if not vision) both externally and within said company. Hmm :)

Slinging mud

Innovation can be a funny thing. I've worked with ~300 companies, mostly startups, in the last couple of years at eBay. They span from the individual with a great idea whose wife was his entire board of directors, to massive wireless carriers, to truly game-changing technology plays (if still early in their adoption). If there's anything I've learned working on the business development side of technology in the past 6 years, innovation is almost always a long-shot and often serendipitous. I've heard so many great ideas go nowhere, or great teams with great ideas fall just short. It's uncommon when the stars align and a company is actually able to sustain itself (i.e. pay a salary to the founders and employees) and unbelievably rare when said company actually scales. Regardless of the odds, entrepreneurs will continue at it, because often the reward of starting a company or chasing innovation is in the expertise or skill picked up during the process of the chase.

The same thing could be said about innovation within organizations. Yes, even at eBay there are features or innovations which are launched and don't meet their targets. eBay actually tends to put a ton of foresight into what targets to go after, reducing that risk. But ultimately eBay falls to what I'll call the law of slinging mud on a wall.

Most mud (i.e. innovative ideas) will fall away and what sticks often isn't what's expected.

Hence when I read about companies whose seeming goal is to pursue innovation lauded for each and every launch as successful, I have to chuckle. It just doesn't work that way. Take VOIP as an example. Does anyone really understand the LUCK and effort it took for Skype to reach its position of leadership in this space? Yahoo or MSN or Google launching their own VOIP feature will take similar if not more LUCK and effort to even get close to what Skype currently manages. Compare Skype with more than 4million concurrent users of its voice technology vs thousands (maybe hundreds of thousands) on any of the other IM providers. This isn't to say the IM providers couldn't throw money at the situation, lower price or bundle products and ultimately be successful. But just introducing functionality (which btw ALREADY existed in most cases) means little. If these companies DIDN'T introduce this functionality, that would actually be a surprise.

The same could be said for any of the myriad of new innovations which supposedly will conquer the Internet as we know it. Believe me, I'm all for innovation. In fact, my job and my enjoyment of my job is centered around discovering and supporting it. But we need to put the hype aside and stop prognosticating that this or that new technology ultimately will be the winner or grand disruptor. Until that mud sticks, I'm waiting to see what shakes out as truly paradigm shifting (and what's really a threat). Meanwhile I'll be continuing to hurl as much up there as quicky as possible for eBay.

Free money

So just when you think Microsoft has lost some of that competitive zest, Bill Gates surprises you with something like this.

"Google's business model is not based on free software," Gates said. "Their business model is based on advertisements from which they make a lot of money. But they don't share these advertising revenues with the end users who help them get the revenue... Google keeps all of the money with itself"

Bill followed that up saying Microsoft would potentially give free software or even cash to users... Nice! Now giving away free (if beta) software is at the heart of Google (Urchin, Base, Desktop, etc) but cash is a different thing altogether. It's hard to beat free, unless you actually go beyond free and give money away. MS is back like Jack from The Shining. If anyone knows how to take a loss in order to gain share (Explorer, Windows CE, Media Center and Xbox to name a few) its Microsoft. Incenting users to add content, register or search on MSN at the very least has the potential to undercut the margins in search advertising while at best may turn users' loyalties between comparable search services.

So in a time when Google and its vaunted engineering can do no wrong, here's one for all MBA, ex-consultant marketing managers out there. Sometimes aggressive marketing can make a difference.

Meanwhile, Yahoo just acquired del.icio.us. When you add Flickr, Answers, Shoposphere and other social networking/tagging/ community-generated content sites from Yahoo, they're clearly taking better advantage of their massive registered user base. Hate to say it, but its ridiculously simple to participate across these various services as a Yahoo member, driving more targeted user-content, viral usage and an increased sense of community. Integrate search and ads to these properties, and Yahoo is building an effective foil for Google's strength in search as well...

Riddle me this...

Yahoo launches Answers. (gotta give props to Jason_Steinhorn for the update). Another take on user generated content (competing with Fremont and Base) which is actually pretty damn cool. I don't see any folksonomy here, but Yahoo Answers integrates some of Digg's features, with users voting for answers which surface to the top. It's a reverse take on Google Base's approach, and honestly I think it's a better strategy. eBay learned a while ago that ultimately demand drives supply. Bring the buyers and the sellers will come. The reverse doesn't work as well when there's alternative channels for supply available.

Google Base's initial take is trying to drive supply before linking in demand. The system works great if there's massive usage. Listings on Base, however, have hovered in the 12-17MM range the past several weeks. In addition, without the social networking angle, there's no driving reason to return to the site if supply is limited. Yahoo Answers' integration of social networking, participation points and usage levels help drive increased response rates. Ultimately all those answers deliver what Base is targeting, a rich database of searchable user-generated content. All that said, the lack of folksonomy is an issue. Probably something that was cut out in the rush to launch...

Buy my blog for $5K!

Apparently my_blog is worth 4 times as much as Rick_Watson's_blog (my buddy from ChannelAdvisor). Sorry Rick... sad but true ;)

Trailblazing Web 0.35

Funny (for most) article from The Register on Overstock.com. Remember that at one point analysts actually were tracking Overstock and the potential 'migration' of sellers from eBay to the big O. A year a half later, all of O's auction listings equals eBay's Entertainment and Music Memorabilia categories (200K). As I've posted in the past, sometimes perception gets way out of hand...

Another breakdown

I had to do it I'm sorry... a fascinating post from John Batelle looking at when Microsoft 'jumped the shark' and comparing MS then to Google now. Article here. All that being said, even after 'jumping the shark', public perception of MS as an ill-intentioned monopolist didn't seem to impact MS' performance very much...

More poker references...

I formally forgive Henry Blodget for any of his past indiscretions... he's someone who gets it. Sorry Om, you don't. Here's Henry's perspective:

"WSJ's gadget titan Walt Mossberg reviews Skype 2.0 and predicts it is ready to blast into the mainstream. Along these lines, I spoke with an experienced Internet CEO yesterday who runs two small companies, both of which are Skype-only, neither of which has a single land-line phone. Skype is doing what it needs to do to keep VOIP synonymous with Skype (a strategy whose wisdom is nicely illustrated by the power of the equations "Google = search," "Kleenex = tissue" etc), and as long as it can keep doing so, eBay looks smart. What most observers missed about the Skype acquisition, in fact, was that the price eBay paid was irrelevant.

"The outcome for Skype is likely to be binary: home run or bagel. In the bagel scenario, eBay will lose 100% (or 5% its market cap). Although not inconsequential, companies have made riskier bets (Time Warner, for example).

"In the home run scenario, meanwhile, eBay will make at least 10X. (I don't want to rush to hyperbole here, but this is not a small market opportunity we're dealing with, and the idea that the leading global VOIP player could someday be worth 1/5th of Google's current value, 1/3rd of Verizon's current value, or 1/2 of Yahoo!'s current value is not far-fetched.) Quibbling about whether eBay should have paid $1 billion, $2 billion, or $4 billion, therefore, is a waste of time."

How to Detect a Lie

Ah finally... a useful post. I'm a big fan of poker. It's a great testbed for quick-thinking, gut-checking and general risk tolerance. Reminds me of the daily startup grind. For fellow poker players out there, here's a great review to detecting_lies. The quick summary if you hate redirects: Right-handed people look to the right when they are remembering things. They look to the left when they are constructing things. An example would be "Who is Overstock's Sith Lord?". If you ask that question to a right-handed person, they would look to the left to 'construct' an answer (after looking straight at you wondering if you were deranged. My answer would be Patrick Byrne btw - and yes I did look down and to the left). If you asked "What color was the first house you lived in?", the person would look up and to the right, remembering the response.

Based on this, when a right-handed person looks to the left answering a question, there's a higher likelihood they're lying since he/she is 'constructing' a response rather than recollecting from memory. It's the exact opposite for a left-handed person (right=lying). Too bad I normally play online poker (the free kind of course) :)