Ad sales on eBay... the real kind.

(Up late night playing a little online poker and in between hands... chip leader right now :)) Thanks to Juan-Lopez Valcarcel on this story from Digital Media Review. Apparently a leading video blogging startup, Rocketboom, has put one week of ad space up for auction at eBay. Bidding is currently over $2K (though reserve hasn't been met) with 20+ bids. Nice to see actual ad sales on eBay vs elsewhere...

Not so fresh off the press...

Went to Entrepreneur 27 on the Stanford campus this weekend to listen to pitches from nine up and coming start-ups founded by recent college dropouts - their words not mine :) (Box.net, Skobee and PlaceSite are some examples). Robert Scoble of Microsoft fame and Michael Arrington from TechCrunch were both there taking stock as well. Both of them do a great job summarizing the event on their blogs, so I'll avoid re-iterating the obvious. That said, some general observations from the event:

1) I was surprised by how young the entrepreneurs were (given Entrepreneur 27 is all about founders below age 27 that shouldn't have surprised me) but also with the quality of their business models. It wasn't just all me2 Web 2.0 (UTOSLOW!) plays... there were actual strong points of differentiation. Here's a good example of that. Box.net at first blush feels very circa 1999. They offer free and premium online hosting (1G->15g). That said, they showed me a little Box.net Ajax-enabled app on their Google homepage. It allows you to access your files directly from an Ajax window (files automatically backed up from your harddrive), essentially porting your files to any site/point of access. The service also integrates RSS, sharing, tagging... the general Web 2.0 paradigm. It's online file storage with a web service layer... Cool.

2) Some of the concepts could actually be materially impactful to eBay. Spoke with one company, LicketyShip, that's integrating retail availability with courier services to generate immediate pick-up and delivery for products. Imagine combining this service with the 500M items on eBay and what impact that would have on local search and purchase of those items.

3) Web 2.0 apps are now going off-road, with services from Flagr and Skobee respectively integrating wireless and email directly to on-site tagging. Flagr lets you build map concepts (like "San Jose Hot Spots" - no I've never been to one), share them with friends and build tags to specific locations, all via phone. Skobee is taking the online invitation downstream, converting email responses on invites into tags on the site. These guys get that the ultimate premise of web services isn't to lock users to a specific site, but to allow them to access and write data from any modality or from any source.

I've essentially done exactly what I said I wouldn't do, repeat more detailed summaries, so I'll stop. It's great to see, however, how web services in general are continuing to shape up (especially in relation to eBay). One good example of this is Saved Search Pro (to be clear they weren't at the event, I just think the endgame is interesting). It's a fairly simple concept (saving favorite searches) but integrates tagging, shared searches, and popularity ranking (via helpfulness ratings). With enough saved searches this could ultimately drive very refined searches for end-users that key on tags and popularity rather than just general keyword matching algorithms. Think Digg for eBay...

Anyways, thats the wrap on the new start-ups. Robert wrote his blog summary during the event, me a couple days after. So... if you like 2 day old news, you're at the right place ;)

"Web 2.0 = UTOSLW" Catchphrase for 2006.

Had a conversation with Kate Green (who was very cool - her love of mid-range red lasers notwithstanding) from MIT Technology Review at a media dinner last night. She remarked that the increasing use of acronyms by business folks is plain ridiculous (even when compared to scientific acronyms). Made me wonder what the new acronym for "Web 2.0" should be, whose use has become too all-encompassing. So here's the drill down on some Web 2.0 trends to help define a new acronym for the genre...

User-generated content (U)
Tagging (T)
Open-platform (O)
Social-networks (S)
Long-tail distribution (L)
Web-services (W)

So there you go... UTOSLW. Easy to remember that... hmm. Guess Kate was right :(

I think the sky is falling... no really.

Hard to believe, but Om Malik (a writer from Business 2.0 in case you have no clue who Om is) actually said something nice about Skype. Well, it's sort of a muted nice, but I'll take whatever I can get...

Google: Porno or bust!

Well, I've managed to not mention Google for a whole couple of weeks or so... but this government fight preserving privacy on behalf of porno searchers was just too ridiculous to not comment on. At first blush, I can envision that Google feels 1) seriously committed to protecting user privacy which is a very good thing and 2) that by protecting user privacy Google can retain some of the "Do No Evil" ethic that has been questioned lately.

However, when I mentioned this to my wife (Lisa), she said she was unmoved by Google's fight against the government because of the subject material. Quote: "Who wants to defend the right to watch porno?" Duh. While protecting privacy at all costs against Big Brother would normally be viewed in a very positive light, doing so for the sake of pornography would umm... not. I'm certain there's a cross-section of 18-50 year old men/women who vehemently disagree - that's why I'm starting a petition on this blog (not that I support it). So go ahead and leave a comment in support of porno privacy in the comment field, but leave your full name otherwise it doesn't count :P

Amazon Fishbowl with Bill Maher

That just rolls off the tongue doesn't it? Apparently Bill Maher is going to do infomercials on Amazon. From the AP article:

"All of the guests on 'Amazon Fishbowl With Bill Maher' will be promoting a new release, such as a book, DVD or CD, and Savitt said the shows will include ways for people to immediately buy the products the performers are touting."

You can't say Amazon isn't trying to diversify its business... You also can't say this is something I would watch :)

My Prediction for 2006

Jeffrey McManus from Yahoo (headshot from from his eBay days) blogged about Robert Cringely predictions for 2006, including a reference to eBay and Skype. He then rolls out the red carpet for me to respond ;) Being as highly objective and unbiased as possible, below was my response.

"Wow the red carpet :) Thanks Jeffrey! I think its interesting Cringely states "Skype won't contribute much to the company in 2006/2007". That's like predicting "Jeffrey McManus will do a better job this year"... completely ambiguous. (And in this case you and I know Jeffrey it's not true ;))

When your contribution margin is over a billion growing at ~30%, a $50-$100MM impact could be viewed as 'not much'. So I call foul. What I predict is that Skype will maintain global leadership in VOIP and VOIP will become the predominant form of communication for C2C, B2C, B2B. The last two companies my wife and I started enabled VOIP services, so I do know a little about this.

"Ultimately, what Skype does enabling its platform will drive its success (which is already fairly massive). Consider how many companies have 60MM users? I bet even Yahoo wouldn't mind figuring out how to monetize that community. It's this user community which will drive a large, thriving developer community (all of which are figuring out interesting new ways of monetizing said community over and above SkypeOut/SkypeIn). I also recall people wondering how the heck to monetize online search (which is a free service folks). Hmm. What eBay/Paypal does with Skype is great for eBay/Paypal, but ultimately just the cherry on top for the opportunity at Skype. So even if Cringely comes close to whatever his prediction even means, I predict he'll be dead wrong when it comes to the ultimate success Skype as a market leader in VOIP. Was it worth $2.7-$4B dollars? Absolutely. Waiting for your counter Jeffrey ;)"

When I pressed 'Post' on Jeffrey's blog, I realized a second later that the Yahoo Ads to the right of my commentary proved my point. There were Skype ads from four different developers advertising to the Skype community. :) To add to the commentary above, becoming the VOIP platform of choice is the endgame. Monetizing via SkypeOut should be only the very base of revenue for Skype. With 60+MM users, either by partnering, acquiring or emulating concepts driven by the developer community, other revenue streams will naturally surface. Paypal is a great example of this. Paypal's original service for consumers was absolutely free. It's business/enterprise service was not however. Could Skype introduce an enterprise-level or premium service once it's taken outright leadership in the VOIP space with a low-cost or free consumer service? Could that be worth billions of dollars in revenue? The answer for both is unequivocally yes. It happened with eBay, with Paypal and soon with Skype...

Is it really "My"Space now?

So apparently MySpace banned even mentioning Revver (video sharing service) on MySpace for competitive reasons. So is it me or does this and the past banning of YouTube go diametrically against "MySpace"'s namesake? MySpace's success is driven by its community of users, probably moreso than any other company including eBay. Playing Big Brother (especially if the reason is for competitive reasons) will undoubtably alienate some material number of users.

Obviously eBay has its own policies for users on our site, but for the most part these policies are meant to reduce buyer confusion, secure user privacy/trust and eliminate fraud. Almost all of our sellers' view item pages have links to 3rd party services, many of which are competitive to eBay's own transactional tools. Heck we even redirect buyers to sellers' own checkout flows if they opt for that.

In my humble opinion, user communities are driven by five factors - 1) a shared purpose or goal 2) trust between members 3) communication between members 4) repetition of interactions and 5) freedom of expression. The last point is the most tenuous to maintain. If a some subsection of users disallow members to express themselves freely, ultimately those members will disassociate themselves from said community and form their own. If the actual platform for communication (i.e. MySpace or eBay) disallows freedom of expression for an individual, that user will abandon the platform. Sometimes constraints to this freedom are put in place to ameliorate the larger community (i.e. no $#%! words or vitriolic statements against a specific user), but force-feeding a particular solution prior to even launching its substitute, while banning its mere mention, doesn't sit well.

eBay went down this road before with Billpoint and Paypal. The community voted with its feet and we hopefully have taken the hint. Let's hope MySpace will as well...

Hollywood... CES Style

Well, I was intending to post a long diatribe on the prerequisites of community-building given the increasing importance of user-generated content. But then I realized it was Friday afternoon, so I'll leave you with this news item from CES regarding Yahoo instead. (Sorry GBetts :)) I wonder if Tom and Ellen are available for my upcoming preso at Evans Data Developer Relations Conference...

(Here's an interesting breakdown on community in the meantime "The 12 Principles of Collaboration")

Easy like Sunday morning

Yesterday I tried to send out a 12MB presentation to a workmate via company email. Not surprisingly Outlook threw up all over the attempt. Check out www.yousendit.com. It's a free service that lets you send massive files (up to 1G) to someone's email account. Apparently they're monetizing through advertising and upgrades for business... alrighty then. Still, it's a great tool when you're hurting for a large file transfer.

Bidpay out for the count

Looks like Western Union pulled the plug on BidPay. You would think Western Union would have had a clear understanding of how to make the service go. This just reinforces the fact that the online payment business isn't easy...

Wilting flower?

Here's a Henry Blodget post on FTD and the expense of search marketing (some interesting comments there as well). Ultimately I think the fact that FTD (or any other retailer) finds keywords too expensive is nothing more than the market establishing a supply/demand equilibrium - while FTD may find it too rich, one or more of its competitors doesn't. It's (unfortunately) not the harbringer of lower pricing for search marketing. So long as the number of new advertisers jumping on board is net positive, prices will increase... On top of that, all the major players in this space are also continuing to experiment with value-add data to advertisers. Whether its demographics, geo-location or keyword user-tagging, pricing will continue to rise based on incremental perceived value and results by individual advertiser.

However, as search marketing nears an equilibrium per keyword, its market based pricing will trend to a fairly unlevel playing field. Consider a Dell case-scenario. A few large volume companies could effectively squeeze out competitive ad placements by keyword, based on their effectiveness to measure and manage cost and revenue generated, making it prohibitely expensive for less efficient (ala FTD) and smaller companies to engage. Hence why you don't see your corner El Burrito commercials during an episode of House on Fox. Limited inventory is funny that way...