Posts from January 2009

There are a lot of playlist services on the web these days. Muxtape got shut down, but imeem, playlist.com, and 8tracks are all alive and kicking. And I am sure there a bunch of others too. All of these services let one person create a playlist. But yesterday, I wanted to do something a bit different.

It all started when I was coming back from getting bagels in the morning and listening to Animal Collective's For Reverend Green

I thought to myself that Animal Collective's lead singer Avey Tare is pretty good at the primal scream and then I started to think about other great primal screamers, like Caleb Followill of Kings Of Leon, and of course, John Lennon. So I twittered the thought:

i love lead singers who've mastered the primal scream like caleb followhill, avey tare and john lennon. any others?

And I literally got dozens of replies which you can see in this set of search results going back to yesterday morning.

So I decided to make a "primal scream" playlist on 8tracks which I did yesterday afternoon and this morning. I wish I could embed it, but I can't. If you click on this link, you'll be taken to 8tracks where you can listen to it.

During the process of building the primal scream playlist, I suggested to all the people sending me suggestions on twitter that they go to fredwilson.fm and upload additional tracks for the playlist to the soundcloud dropbox that I have on fredwilson.fm. A bunch of people did that and I've included two tracks so far that I got that way.

So basically we collaborated on this playlist and are still doing so because I am still getting suggestions of tracks to add. The best ones are going to get added to the playlist.

But this collaboration required a lot of "overhead" and three different web services, twitter, 8tracks, and soundcloud.

It would be great if we could use one or more of these playlisting services in "group" mode and easily collaborate on playlists. Sharing music is one of the great uses of the internet but sharing can work two ways and I'd love to see someone enable that.

I was asked at some point early last year to sit for an interview with a woman named Ondi Timoner. I wasn't exactly sure what it was for but I knew it had to do with the NYC Internet scene in the late 90s and Josh Harris. So I found myself sitting in a tiny greenwich village apartment with a camera on me answering questions from Ondi. It was an interesting experience but I quickly forgot about it.

Then when I was getting ready for the web 2.0 keynote on the history of the NYC web business, Josh Harris contacted me and suggested I use some of Ondi's footage in my talk which you can see here. When I first saw that footage I knew that Ondi had something special on her hands.

Yesterday I saw the news, via twitter, that Ondi's film, called We Live In Public, won the Sundance award for best documentary. That's fantastic news for Ondi and Josh who really wanted to see this movie made.

Here's the trailer for the film:

We Live In Public TRAILER from We Live in Public on Vimeo.

I am certainly going to see this film when it plays in NYC. If you are interested in the early days of the Internet and the guy who invented a lot of the stuff we now take for granted (streaming audio, streaming video, self publishing, etc), then you might also enjoy the film.

Image by Getty Images via DaylifeSo we have a new senator here in NY, replacing Hillary Clinton. Her name is Kirsten Gillibrand and honestly, I've never heard of her before the announcement yesterday. Fortunately, The NY Times did a long piece on her today and I learned quite a bit about our new senator.

She's a "centrist democrat" (good) from a largely republican district (also good). I don't agree with everything she's for (she gets a 100% approval rating from the NRA), but I agree with her on most stuff.

But when I read this, I knew I am going to like her:

I sure hope the "sunlight report" survives her move from the House to the Senate. Making her colleagues look bad is the first step to making them copy her.

We need people in government who aren't afraid to be transparent and tell everyone who cares what they think, who is lobbying them, and why.

I think I'm going to like our new senator. I hope I get a chance to meet her soon.

I sold all of my Google and Apple stock recently and explained that I was selling Apple because I felt that Jobs and Apple's PR were lying to shareholders about Jobs' health (they were). I explained that I was selling Google because I was getting conflicting signals about the health of their core keyword advertising business and wanted to see some actual results. I sold Apple at $91.36 and Google at $330.

This week we got earnings from both Apple and Google. And I thought I'd talk a bit about what we learned.

Apple had a killer quarter. They surpassed $10bn in quarterly revenue for the first time and had net income of $1.6bn. Macbooks did great and so did the iPod and iPhone franchises. This is a company that is firing on all cylinders and beating the competition in every market they are in. And yet the company carries a market value of less than $80bn. When you take out the cash of $25bn, the company has an enteprise value of $55bn. That is something like 7x EBITDA for probably the best franchise in the computer hardware and CE business. So on fundamentals, Apple is a screaming buy and I'd be buying it if it were not for the fact that I am very uncomfortable with Apple's lack of transparency on key issues like options backdating and the CEO's health. So I'll stay on the sidelines on this one.

Google's quarter was not "killer" but they did well enough to calm a lot of fears on the street. Gross revenue, before rev share with partners, rose 18% over the fourth quarter of 2007 to $5.7bn and earnings before one time charges were about $1.5bn, also up about 20% from the fourth quarter of 2007. I've felt that Google's core CPC keyword ad business is fairly recession proof and these results certainly indicate that there is validity to that view. That said, this year will be tough for Google. But they have a lot of excess cost that they have just started to take a look at and I think they'll be able to grow earnings throughout the downturn with a combination of revenue initiatives and continued cost cutting.

I'd like to get back into Google at the right price. If think anytime you can buy Google below $300, you have to do that. I'll put some orders in this morning to do just that. I'd also like to try selling some puts on Google and I'd love some advice in the comments about the best strategy for that.

The team at Boxee has been scrambling all week to get ABC.com working in Boxee and today they finally were able to release a new version that does just that. The news is on the Boxee blog. CEO Avner Ronen announced:

Of course, the frantic effort by the team was all about getting ABC on Boxee in time for the new season of Lost. They missed that goal by a day, but since most people who watch on the web time shift, not all was lost (pun intended).

Once again, Boxee did all of this without any help from the networks. As Bob Lefsetz said on his blog yesterday about Boxee:

What's great about Boxee is that they maintain the network's player experience including all the monetization. So this is pure distribution goodness for the networks and while they may not be helping Boxee do all of this, they are certainly benefiting from it.

So if you are a Lost fan, you can now watch it on Boxee. You can download the Mac version here.

We are in such a negative/bearish environment and it seems like all the economic news, including individual company earnings news, is bad these days. But it's always worth noting the exceptions to the rule and thinking about why that is.

Yesterday IBM announced it's fourth quarter earnings and it's net income was up 12% over the fourth quarter of 2007. Revenues were down slightly as hardware was down 20% and higher margin software and services were up a similar amount. But most interesting was IBM's move to increase the expectations for earnings in 2009 and 2010. IBM said that the company "was ahead of pace to increase earnings to $10 to $11/share by 2010".

What's going on at IBM is an ongoing transition from a hardware oriented business to a software and services business which is driving margins up combined with a still healthy book of business from its clients all over the world combined with an ongoing ability to reduce costs and become more efficient.

And also yesterday, I saw a report from Jeffries and Company that said this about Google:  

Positive ad-coverage and acceleration in paid clicks growth in
   Oct/Nov/Dec. give us more confidence in Google's ability to meet our
   and consensus 4Q estimates despite the severe ad climate. We reiterate
   our Buy based on ad budget migration to Search, Google's relatively
   resilient model and its newfound cost discipline.

   comScore released ad-coverage data for December after market close
   yesterday, which we use to derive Y/Y paid clicks growth.

As we've discussed on this blog recently, Google has the ability to drive paid clicks (which is what generates revenue for Google) in a number of ways, including by increasing ads per page and total ad views, and they may well be doing exactly that.

Moving away from tech and internet, there's Abbott Labs which just announced "double digit sales and earnings growth in the fourth quarter". This is largely a new products story around stents and a new arthritis drug.

I found all of this good earnings news (the Google info is not actual, just projected) in about ten minutes this morning and I am sure there is a lot more out there.

We are in a bad economy for sure and many sectors like banks, financial services of all kinds, real estate, oil and gas, automotive, etc, etc are hurting big time.

But there are companies that are doing well in this environment, including many small companies like the ones we have in our portfolio. You have to be very careful investing in this environment and must understand what the companies you invest in do, you must make sure their balance sheets are strong and the can self finance, and you must look for businesses that are "recession proof" in one way or another. My point is simply that they are out there and you don't have to look that hard to find them.

The Gotham Gal and I have t-shirts that say '1.20.09' on them. We've been wearing them for the past year. At first, as a sign of protest against an administration whose values, strategies, and people we did not believe in from day one.

Then as the election grew near, we wore them in anticipation of today, a day when we inaugurate a president whose values, strategies, and people we do believe in.

I am excited for today like most americans. But I am also already a bit disappointed in our new president. This inaugurapalooza (term courtesy of kurt andersen) that has been going on for the past couple days is not my idea of the best launching pad for this terribly important administration.

This reminds me of every other inaugural celebration in my lifetime. The black tie galas, the celebratory tone, and the lavish partying that is going down in washington is more of the same. It turns me off.

But Obama has an opportunity to get me back on the train with his speech today and his actions tomorrow and the rest of this month.

We need a new way of operating in this country. We need to be more selfless and we need to say no more often. We need to accept and allow failure and we need to facilitate rebirth. That's what has made us great in the past and that's what will keep us great

There are those who comment on this blog like kidmercury who think we're already toast and our corrupt government and society needs a complete reboot. I don't subscribe to that kind of absolutism, but I know where that feeling comes from. Our country is in trouble because we are in denial and I would love to hear some admonishment from our new president on that score today. Some tough love in additon to, or even instead of, uplifting soaring words would play well in my ears.

I'll be watching like most of america and twittering my thoughts. I hope you will too. Most of all I hope Barack Obamna tells America to pull up our pants today.

This week, Thursday at 4:30pm eastern to be exact, we’ll get some important information about the search market when Google announces it’s fourth quarter results. I recently sold my Google stock because I didn’t want to be long until we get more information about the underlying fundamentals of Google’s core business. I’d like to get back into Google at the right time and the right price and their fourth quarter results will be telling.

Jessica Vascellaro has a story in today’s WSJ that paints the contrasting views on the search ad market. One one hand:

U.S. search advertising spending fell 8% in the fourth quarter of 2008
from the same period in 2007, according to a new study from search
advertising firm Efficient Frontier, which had been tracking mostly
flat growth for 2008.

On the other hand:

Industry research firm eMarketer recently projected that, despite the
recession, U.S. search advertising will still grow 14.9% in 2009, down
from a 2008 growth rate of 21.4%.

The Efficient Frontier study is based on actual data whereas the eMarketer numbers are projections (presumably based on real data too). But they paint very different pictures.

I’ve heard a lot of anecdotal evidence that suggests that marketers are moving their budgets to performance oriented channels and that bodes well for search. I’ve also heard anecdotal evidence that online retailers maintained a strong search spend during the holiday season, and that was mentioned in Jessica’s WSJ piece.

So the fourth quarter results from Google will not tell us everything we need to know about the search market because they will be heavily influenced by the holiday season. It could well be that a decent fourth quarter could be followed by an awful first quarter. That is often the case in the advertising business and I’ve seen it enough to be worried about it this year.

And, of course, the US search market is only half of the story. The search market is global and Google, in particular, has been making up for slow growth in the US with good growth overseas. If overseas growth slows, that will be bad news as well.

So in addition to everything else going on this week, we’ll be getting some numbers that are important to Google’s investors and everyone who is invested in the Internet economy. I’ll blog some more about this when the data is out.

Image by Arkadyevna via Flickr

Obama’s first order of business will be to get his stimulus plan approved by congress and signed into law. It’s current form is $825bn, including $275bn of tax cuts and $550bn of "infrastructure" spending.

And over the past several weeks, I’ve seen a number of emails and been privy to some conversations where people have been strategizing how to get some of that money for their pet project. That’s exactly the wrong approach. It’s like we are pigs eating from a trough. The US is going to be totally screwed if this $550bn is spent on everyone’s pet projects. It has to be spent on the projects that will deliver the biggest bang for the buck in terms of future economic activity.

I’m not that thrilled about the $250bn of tax cuts because I don’t think they’ll do much to stimulate economic activity, but I realize why they are in the plan. First, because Obama promised them in his campaign. And second, because it’s key to getting the republicans, both the repulicans in washington and the republicans on main street, on board.

Deciding how we spend the $550bn is really hard because it needs to be spent on projects that are ready to go now, not in 3-5 years, and most importantly, it needs to be spent on super high return on investment projects that will make this country a stronger economic player in the years to come.

And so when I see people plotting on how they can get their hands on some of that money, it makes me mad. It’s time for america to be a little more selfless. We’ve seen what the greed/me first approach has resulted in. And it sucks. We have to put our own individual needs and desires aside just a little bit and think about what the best projects are.

I realize that it’s a good idea to allow everyone to throw out their ideas and suggestions. I’m all for that. But when people are plotting about how they can "spin" their pet project as "infrastructure" spending, it’s gone too far. And we know that congress is susceptible to being lobbied successfully by people, institutions, cities, states, and corporations. So I’m quite worried that this $550bn is not going to get spent in the right ways because it’s seen as a big pot of money to get your hands on.

Maybe Obama and his team are good enough and principled enough to sift through all the requests for funds and filter out the pork. I sure hope so. But it would help a lot if everyone involved in the process of spending this $550bn would just take a step back and ask themselves if they are really acting in the best interests of our country or in their own self interests. A little selflessness right now could go a long way to improving our situation.