Posts from 2004

John Batelle has written two very interesting posts on the subject of Yahoo! and Google.   He attempts to dig into their core DNA and understand what makes each of them unique and different.  He also tries to divine where each of them may be headed.

I think Yahoo! and Google are two of the most important companies in the technology and media business today.  They aren’t pure media companies and they aren’t pure tech companies.  But they represent a model that is going to become more prevalent over time and they are important and must be understood by anyone working in either business.

So, with that prelude, I will send you to John’s two posts on the topic.

First Post

Second Post

I am still at the Majestic Conference. 

I am listening to a good panel featuring large marketers/retailers who purchase a lot of paid search advertising.

The one big "elephant in the room" is click fraud, which these buyers indicate is a growing problem in the paid search market and its getting worse, not better.

I’d be interested in hearing from the readers on this topic.

Is click fraud a big deal?

Can it be solved?

Do we have to get past the click and all the way to the transaction to make pay for performance advertising really work long term?

I am at the Majestic Internet Conference today.

Majestic is a wall street research company that uses proprietary data to project the performance of companies and their stocks.

We got a preview of some data that includes holiday shopping data through yesterday from Gian Fulgoni, Chairman of Comscore, one of my portfolio companies.

We also got a history lesson from our friend Howard Morgan, of Idealab.  Howard showed us the basic economic equation for online commerce, which is:

RPC – CPC = Profit

RPC is revenue per click

CPC is cost per click

The Comscore data seems to indicate that this formula may no longer hold because two big things are happening this holiday season that portend big changes in ecommerce and search.

Trend 1 is the emergence (finally) of the multi-channel retailer (retail, catalog, online, etc) as a major player in online commerce.  Walmart, Target, BestBuy, and others are having huge holiday seasons this year.  They finally got the web right!

Trend 2 is the latency of online searches (the searcher often buys as long as 30-60 days after doing the search) and the fact that over 90% of searchers actually make the purchase offline.

If revenue per click is recognized in the Best Buy store in the mall three weeks later, then cost per click is going to go up and may go way past immediate online revenue per click.

This portends well for Google, Yahoo!, etc and very well for the multi-channel retailers.  It’s going to be a challenge for the single channel online retailers.

So I got an education in my ancestry and a little of Brooklyn history this weekend.

Regular blog readers might recall the post I did of a bike ride I did about a month ago where I visited and photographed a couple of townhouses in Park Slope.

One of them, at the intersection of 7th Avenue and St. John’s Place, was built and lived in by William Engeman, my mom’s great uncle. 

Here’s the picture I posted of that house.

After showing these photos to my mom, she and I decided we should to a trip (by car this time) to visit the houses during our Christmas weekend (this past weekend).

We did that yesterday.

It was a real education for me.  It turns out this guy William Engeman (my mom’s Great Uncle) was a serious entrepreneur and businessman.  He came over from Germany in the mid 1800s and settled originally in Minnesota and eventually made his way to Brooklyn.

In 1868, William Engeman bought some land in the Coney Island section of Brooklyn and named it Brighton Beach after the famous british resort.

Around the mid 1870s, he decided to open a luxury hotel on Coney Island.  It was opened in 1878.  Here’s some text from a guy named Jeffrey Stanton who has a whole site on the history of Coney Island.

"Engeman constructed his Brighton Beach Hotel in time for the 1878 season. This vast wooden hotel, 460 x 210 feet and several stories high, with accommodations for nearly 5000, could also feed 20,000 people per day. He also constructed an Iron Pier nearby and the 400 foot wide, two story Brighton Beach Pavilion. His resort was connected to New York by railroad and was frequented by the upper middle class rather than the wealthy because its location in Brighton was too close to Coney Island’s seedier section immediately west of it. "

Here is a picture of the Brighton Beach Hotel, also taken from Stanton’s site.

In 1888, this hotel was moved inland to protect it from the eroding beach.  It was a feat of engineering using six locomotives and over 120 railroad cars.

In 1879, Engeman opened a one mile rack track, the first of its kind in Brooklyn, called Brighton Beach Race Track.  It was used for horse racing and dog racing off season.

The track was constructed in an area now occupied by Brighton 10^th Street, adjoining streets and elevated train line.  The race track was converted for auto racing in 1911, but due to numerous racing deaths and laws against gambling, the track was sold, razed and is now mostly private homes.

Sometime in the late 1880s, William asked his two brothers, George and John, to come help him run the business.  John, who was a carpenter, relocated from Minnesota to do this.  He raised his family in Flatbush, on the other side of Prospect Park from his two brothers.  We visited his house yesterday, but it has been torn down.

Our final stop on our tour of brooklyn and family history yesterday was Greenwood Cemetary, a massive plot of land started in the 1860s to house Brooklyn’s dead.  We wanted to visit the graves of William, George, and John, who are all buried there.

Time was running out so we only visited our nearest relative, my mom’s great grandfather, William’s brother, John Engeman.  It’s clear that these guys had money by their burial sites.

John Engeman, my great, great grandfather and William Engeman’s brother and business partner, was born in Germany in 1833, and died in Brooklyn in 1908.  He must have lived an interesting life.  And it’s really cool to discover it.

CORRECTIONS:  Courtesy of my mom, here are the things I got wrong in this post.  John, George and William (their order of birth) were born on the lower east side of New York.  Their father Anthony Engeman ( born abt 1800) was the immigrant he came to NYC on a ship and arrived June 1, 1826.  He died a very poor man but his children went on to do well.  John being my great-grandfather that would make George and William my great-great uncles.

Continuing in the holiday theme, started by last week’s MP3 of the Week, I am going with the first song on Rilo Kiley’s More Adventurous.

On this song, Jenny Lewis sings:

"I’m a holiday for hanging, I’m a holiday yeah"

By the end of this week, I’ll be hanging on my own holiday. 

So the MP3 of the week is It’s A Hit . 

Enjoy.

This is not a post about the movie Old School.  However, if you have not seen that movie, I strongly recommend you rent the DVD.  It’s hilarious.

This is about a trend I am seeing in my kids and their friends.  They are into "old school" stuff these days.  They don’t want to wear a Stephon Marbury or Kobe Bryant jersey, they want to wear a Dr. J or Kareem Abdul-Jabbar jersey.

The best example of this is a hanukkah gift The Gotham Gal got Josh. 

He loves his game boy and his playstation. 

But this weekend he is obsessed with this portable video football game that was around when I was a kid. 

I remember playing this game for hours!

Open source is a metaphor for the way innovation works best in all ways of life.

Rarely does brilliance come out of nowhere.  It usually comes from being inspired by something and taking that inspiration and adding a little more. 

That’s how open source software works.  That’s how blogging works.  That’s how a lot of things work.

So with that thought rattling around in my brain, I came upon the Trickster’s discussion of bluesman Robert Johnson this weekend.  Robert Johnson is an inspiration to many of the great musicians of our times, Bob Dylan, Keith Richards, Eric Clapton, etc.  But many debate his contribution to the world of music and claim he was a "minor figure" in the development of the blues.

Well I have tried to get into Robert Johson more than a couple times, but his music is too sparse and too thinly recorded for my enjoyment.

That said, Trickster’s post is worth reading because in it he asserts the exact same point that I was making about the open source metaphor.

To qoute from Trickster’s post:

"Johnson did what hundreds of great artists have done–he took folk material from around him in the world and through an act of creative molding, turned that material into something more than just found stuff. He turned it into literature."

This is how open source works.  It is how blogging works.  And with the digital revolution upon us, I believe this is how much of the innovation that will result from the digital revolution will work.

In principal it sounds like such a good idea.  Read the words on a page and run ads that fit contextually with those words.  In practice, it often doesn’t work or worse, the context backfires.

A good example is the post I did on Firefox popups.  I was commenting/complaining about a popup ad for a Panasonic product.  If you read that post in an RSS reader, you got an ad for a Panasonic product.

I doubt that’s a context Panasonic would be happy with.  And I am not so happy with it either.

The Gotham Gal posted her technique so I’ll leave that alone. 

Go read her post you want to make one like this.

The best part is buying the candy with the kids and eating half of it while we decorate the house.