Posts from October 2006

I don’t own Google stock. I never have. That has been a mistake.

And so now I ask myself, should I correct that mistake?

I have sat on the sidelines and watched Google put up amazing quarter after amazing quarter.

It is clear that Google is executing well on its core business, search and text advertising.

And it is also clear that they build great products that users love.

And they are now showing with the acquisition of YouTube that they are willing to step up and buy more than developers.

People say that Google is expensive. The lack of stock splits and the $460/share price is part of that. So is the market cap at $140bn. But if you annualize the third quarter earnings, Google is earning net after tax income at the rate of $3bn per year. So the stock is trading at about 50x net income.

That’s a nice multiple, but I remember when tech stocks like Microsoft and Oracle traded at closer to 100x earnings and still went up.

Google’s net income doubled year over year. If you think it can double again, then 50x earnings is cheap.

I don’t think it can double year over year again, but I’ve been wrong about this stock from the day it went public.

I am thinking about buying some tomorrow. Just to own it. Schmuck insurance. I was like the guy in this Wallstrip video who said he doesn’t own Google, but he owns Yahoo! I think it’s time to try the other shoe on to see how it fits.

UPDATE: HipMojo says that Google could pass Microsoft’s valuation (that being $284bn) by 2010. His logic is simple. If Microsoft cannot grow anymore and Google grows its top line at the rates analysts are predicting, and if their operating margins stay at 25%, and if the PE drops to mid 30s, it will happen. A lot of ifs there, but it’s worth reading. Could be a peak into a crystal ball.

Well the Mets are done for the year so it’s time to move on.

In my case, that means the Jets.

I know that nobody expects the Jets to make the playoffs this year, but I do.

I like the new coach. I like the new running backs. I like Vilma in the middle of the defense and I like Chad at the helm of the offense.

Most of all, I like being in the stands with other Jets fans cheering Gang Green on.

Today it worked out great.

Randall Stross suggests in today’s New York Times that Silicon Valley remains "mecca" for tech startups. And he cites data that Silicon Valley has consistently drawn about 1/3 of all venture capital dollars in a given year. Randall is right that Silicon Valley is the biggest venture capital center in the world.

But his implication that you really can’t do a startup as easily elsewhere demands a response.

Where is the other 2/3 of the capital being invested? Boston, New York, Los Angeles/San Diego, Seattle, Denver/Boulder, Austin, Chicago, DC, Atlanta, London, Tel Aviv, Banglore, Beijing, Shanghai, etc, etc.

The venture business is alive and well all over the world. And it’s getting easier to do startups outside of Silicon Valley every day.

Randall cites the fact that 43% of "web 2.0 deals" were in the bay area. Well that may be true. But as someone who invests in "web 2.0 deals", I can tell you that we are seeing really interesting "web 2.0" deals coming from all over the world. And in many cases, the most interesting ones are not coming from Silicon Valley.

Let’s look at the three biggest Internet deals of the past three years, Skype, MySpace, and YouTube. Only one of them came from Silicon Valley.

I think entrepreneurship is going global. It’s a flat world in the venture capital business. The best developers are not only in Silicon Valley. They are in Siberia, Israel, Australia, Argentina, and Canada as much as they are anywhere else these days.

And the comment by Seth Sternberg that:

“In New York, it would
be extremely difficult to find a law firm willing to defer the first
$20,000 of your legal fees,” Mr. Sternberg said. “Here, we got that.
It’s a pretty standard thing in Silicon Valley.”

is dead wrong. I can name three firms that we work with regularly in NYC that are more than willing to do work for free or at a loss in order to get a company going.

Same with this comment:

He did end up needing Silicon Valley for something else: technical
talent that would be willing to accept equity in place of any salary.
Six weeks ago, he moved to Silicon Valley to recruit more people like
his chief technical officer, who has been working full time since Jan.
1 for equity only.

Working for equity in lieu of cash is not somthing that is limited to Silicon Valley. It happens all the time in NYC and every other place that there is a startup culture.

Randall is a professor at San Jose State. Maybe he should get out of Silicon Valley and see what goes on elswhere. I’ll give him a tour of the startup scene in NYC, and I am sure there are people in Tel Aviv, London, Seattle, and Toronto who will do the same.

I am not predicting the Valley’s demise. It’s a wonderful place to do a startup. But it’s by far NOT the only place.

The other night at the Red Hot Chili Peppers show I noticed a bunch of cameramen with super high end video cameras right in front of the stage recording the show. And then I noticed thousands of people with cell phones and digital cameras doing the same thing.

And a thought popped into my mind. The super high quality video that was being shot either by the band or with the permission of the band may never see the light of day. But the video being shot by the audience was going to be up on Flickr, YouTube, Google, etc within hours.

Earlier this year I asked a friend of mine in the music business about a business plan I had gotten. I don’t want to go into the details of that plan here (confidential is confidential), but my friend in the music business said to me "artists will never allow recordings of their live shows to be released without their permission and they aren’t going to allow much of it to get out with their permission because they won’t like the way they looked or the way the sounded that night".

And that is why so little of the live music that is played every night ever gets released. And it seems the best "live albums" are really studio engineered versions of live recordings. Jackson tells me the only thing live on Thin Lizzy "Live and Dangerous" is the drums.

But the artists are quickly losing control of this. The day after the Ben Kweller show there were dozens of photos on Flickr of that show.

Audience captured video is even more powerful. Check out this stuff, all captured in the past month as Ben Kweller toured around the country promoting his new record.

Ben in a record store singing Wasted and Ready (1 min 47 secs):

Ben in Atlanta on 10/15/06 singing Walk On Me (3 min 47 secs):

Now neither of those is a particularly good recording, but they certainly captured the moment up close and personal.

I almost got my Sanyo Xacti camera confiscated by security at the Chili Peppers show. Cameras aren’t allowed in the Continental Arena. But that rule is nutty because they aren’t going to confiscate cell phones and the cameras (video and still) that are in cell phones are getting better every day. I bet one or or both of those Ben Kweller videos was captured on a cell phone.

We are living in a world where everyone is walking around with a camera in their pocket, increasingly a high res video camera. And in that world, everyone is a cameraman. We are witnessing hyper recording and I think its pretty cool.

Chris Gilbey over at Perceptric Forum wrote last week:

Have you noticed recently how media – and by that I mean movies – is invading the blogoshpere?

Whereever I go on the web there is a new proliferation of embedded movies. Go to the Fred Wilson blog and movies are everywhere – underpinning an argument, sharing some humour….

Here too.

The ability for people to share media is changing again the way the web works, and the way that people respond.

It
is very early days in this quiet revolution of ideas at the moment. But
there is a wave front building that is going to be enormous.
Communication via images rather than via text is coming down the road
like a Mac truck.

And this will be the thing that is the great change maker.

Chris is right. I have no intention of turning this blog into a video blog, but photos and videos help tell the story, whatever story it is that I am telling.

So you are going to see more video, not less, on this blog going forward.

A lot of people ask me why I care about the Senate race in Missouri (or Tennessee or Virginia for that matter). Well all politics is not local as Michael J Fox explains in this ad for Claire McCaskill.

I haven’t posted much this week about technology, the web, venture capital, etc (ie the stuff that most people read this blog for). I’ve been busy rocking out at night with my kids, watching the mets, and working on a variety of deals.

But something has been rumbling around in my brain and my life this week and Marc Canter started it with this post where he said he liked my new icon (thanks Marc) and more importantly, he said:

Faces are a key component of social media and networking – and any
software that doesn’t display a user’s face – is uncomplete

Yes!

It doesn’t matter if its a face or an avatar or an icon. But I want to know that somebody is there. Web delivered software is social by definition. There are other people using it too (in real time or asynchronously). And what those people are doing is connected to what you are doing. Anyone who doesn’t get this simple fact is missing the point about web technology. At the end of the day it’s about people.

Now I’ve been reading a lot about MyBlogLog this week. MyBlogLog relaunched their service this  week and are now emphasizing reader rolls in addition to outbound click tracking. Techcrunch wrote about MyBlogLog which is always a source of increased buzz. But writing about MyBlogLog isn’t really what Techcrunch needs to do. They need to put a MyBlogLog reader roll on the front page (or something like it). Add some faces to Techcrunch. A huge community has been buit at Techcrunch. But we can’t see each other. I want faces! I want to see the other people that are there (in real time or after the fact, it doesnt’ really matter).

People have said that YouTube is all about pirated content. I say it’s about community. I posted some videos I took at the Flaming Lips show several weeks ago and within a couple days I was emailing and sending site messages with several other people who were at that show. One of them was one of the people dressed up as Santa Claus on the right side of the stage. How cool is that? Then the other day I got a comment from a girl who was also at the show and she saw herself in this video that I posted.

I went to see Ben Kweller last night and posted on the show this morning. I forgot to bring my camera so I wanted to gank some photos from Flickr. I found some great ones and I left a comment for each of the people whose photos I embedded in my post (with links and attribution). One of them, Kevin, sent me this message about an hour later.

Feel free to use any photo you like.  I read
your VC Blog all of the time, and actually decided to go
see the concert after reading your story of Ben Kweller’s
last NYC performance.
I posted a few videos of the show here if you want them:

I’ll end this post with one of Kevin’s videos. But not without finishing my point. The web is a social environment. Sure it’s about content, apps, services, communication, etc. But at the heart of it all is people. And that’s what makes it so great.

Here’s Kevin’s video. Later.

I got a fantastic suggestion (and an obvious one) on my slow page load post by Fred at WeBreakStuff:

Hey fred,

The thing causing the slow page load is the amount of widgets
running on both sides of your page (particularly on the left). The way
things are coded in this blog layout, content is read (by the browser)
first down, then to the right. This means, the browser needs to load
all the widgets on the left, then your content, then the widgets on the
right.

A bit technical, now: the fact is, the whole page load is around 144
requests (and way over 1.5mb) on a VC. If you look at the difference,
our blog (at http://blog.webreakstuff.com) is around 14 requests and
not over 120kb, meaning it loads in less than 1 second. There are other
reasons, but to put it simple: you have megs and megs of stuff on both
sides of the page that nobody really looks at, while the content is
given no real impact.

Hope that helped!

Posted by: Fred

Well you all know how I feel about my bling. It may be heavy. It may slow me down. But I am not going to go without it.

But I do have a new rule about my widgets. Heavy widgets will be on the right. Light ones will be one the left. I’ve already moved my video widgets to the right. And the page loads much faster.

Obvious. But I missed it. Thanks Fred!

Readers of this blog know that I am a big fan of Ben Kweller. He played a show last night at Webster Hall and I went with Jessica and her friend Lola and their music teacher Vin who is also the coach of the Four Fellas.

I didn’t take a camera (still or video) but there are tons of photos from the show on Flickr already. So I"ll showcase a few of the ones I like best in this post.

Ben is a talented musician (he played every instrument on his new record). He also has great musical range, and during the concert he goes from alt-country, to meatloaf style piano songs, to straight up rock and roll. We saw all of that and more last night.

But most of all, Ben Kweller writes great songs, the kind you can’t help but sing along with. And the crowd sang along a lot last night.

Ben finished the show with a rocking version of his best song (in my opinion), Wasted and Ready. This photo was taken during that number.

Afterwards we hung around until after the crowd had left and then went upstairs and Ben was hanging out in the VIP section with his label, ATO, and friends. We walked right in, nobody stopped us and talked to Ben. I’d met him at Austin City Limits and Vin knew him too. The girls asked Ben to come play at their school when his tour is over and he’s back in NYC. He said he’d consider it. What a great guy!

Ben’s playing another show tonight at Webster Hall. I don’t think the show was completely sold out last night (although it was certainly pretty full). So if you want to see a great show and great musician, go over there around 8:30pm and get yourself some tickets. Maybe he’ll play I Gotta Move and I Don’t Know Why (my two favorites from the new record). He didn’t play either of them last night.