Posts from 2008

I am heading to Paris tonight for three days. The main purpose of this trip is to attend the Le Web conference in Paris on Tuesday and Wednesday. I am speaking on a panel at Le Web Tuesday at 5:15pm (17:15 on the 24 hour clock). Here are the details:

17h15 – 17h55


Money Talks: Getting Financed in a Recession – Panel

Panelists:


• Eric Archambeau – General Partner, Wellington Partners

• Jeff Clavier – Founder & Managing Partner, SoftTech VC
• Martin Varsavsky – Founder & CEO, Fon
• Fred Wilson – Partner, Union Square Ventures

• Moderator: Ouriel Ohayon – General Manager, LgiLab, Editor, TechCrunch France

As part of the preparation for Le Web, Nicole Simon interviewed me last week for a pre-conference podcast. It came out pretty well and she got me to talk about a lot more than just Le Web. I started out with a long description of what I am thinking about these days and what we are looking to invest in. Gradually we made our way to europe and what we are looking to do there. It’s roughly 20mins long and you can skip the first couple minutes of intro if you want.

You can listen to the podcast by clicking this link.

I just realized that in the redesign of AVC, we lost the delicious playtagger and the yahoo music player. I’ll try to get one of them back up on AVC asap so you can listen right here.

If you had the opportunity to watch the congressional Detroit 3 hearings last week, there was a very interesting comment made by Waggoner (GM CEO) that somehow went under everybody’s radar. When quarried about their 09 expenditures Wagganer very specifically stated "We will move a SUBSTANTIAL portion of our ($500 million) advertising budget to online (Internet).  The way he said it (so adamantly and definitely) made me almost fall out of my chair. 

Originally posted as a comment by AndyFinkle on A VC using Disqus.

From where I sit, it appears that the online advertising business has not yet fallen off a cliff. But what happens when ad buyers start spending 2009 ad budgets instead of working off the end of 2008 ad budgets that were set in a different economic environment? That’s a question I’ve been pondering for months and have mentioned once or twice on this blog.

Yesterday, I saw my friend Andy Monfried, founder and CEO of social ad network Lotame, had done a quick twitter poll on the subject. I decided to follow his lead and do the same:

twitterpoll: agency, mktg & ad sales
ppl replies only pls: will ONLINE ad budgets in 2009 be flat, up, or
down from 2008? tag w/ #2009budget

I got 16 responses that were tagged #2009budget and a few more replies directly to me. Here’s the summary of the replies.

So it seems that most people working in the online ad business are expecting online ad budgets to be up slightly in 2009. I tried to quantify everyone’s comment and then I took the average of all of those guesses and it works out to be about up 2%.

It’s worth noting that there are a few people who believe online ad budgets will be down pretty large amounts in 2009 and it’s also true that several of the people who commented were more specific about the ad budgets they were talking about. One area that is clearly more healthy than the entire sector is health care related online advertising which is expected to have a strong year.

And it’s also worth noting that words like measurabe, ROI, search, and CPC were all cited as stronger growth areas. I think it’s pretty well understood that money is going to move from less measurable (branding) to more measurable (remnant banner and search).

It’s not entirely clear where emerging forms of media will come out in 2009. This includes all sorts of engagement oriented marketing and of course, social media advertising. I suspect if it’s not proven to achieve key performance metrics, it’s at risk in 2009.

Anyway, this exercise was very helpful to me. I’ve thought for a while now that the mantra for 2009 is "flat is the up 20%" and that appears to be the case in online advertising too.

I knew Boxee was going to announce Netflix support this week and I guess I should have waited and written one post instead of two, but the timing didn’t work out.

So in addition to the video of Avner’s interview that I posted this morning, here’s the Netflix news:

you can now access Netflix on boxee,  get your Instant Queue and
Recommendations, browse Recently Added and Most Popular, sift through
the entire Netflix Watch Instantly selection by Genre and  Search.

This is a fast running small company trying to give the users what they want as rapidly as possible and so Netflix isn’t working everywhere yet:

the bad news: we could not make it run on Apple TV ☹ . we tried real
hard. vulkanr was almost able to tame it, but he was bucked by the
Apple TV’s 1Gz processor.  it screamed back at him in thick Scots
brogue, “I can’t do it captain, I just don’t have the power!” we’re
still working on it, but don’t have a solution, yet.. also there is no
Netflix for Ubuntu, yet (i believe Netflix mentioned they will support
Linux later in 2009).

And as many Boxee fans know, none of this is available for Windows yet. Today was a milestone in that effort too, because:

Windows user? we have not forgotten you. also released today is the
pre-alpha of the Windows version. a select group of 214 users (no idea
how we came up with this number) is starting to test our Windows
release. based on their feedback we’re going to start opening it up for
more testers.

So that’s the short summary of the exciting news coming from Boxee today. The post I linked to is from the Boxee blog and is much longer and you should click thru and read it if you are following this sector closely.

If you want an invite to try Boxee, go here and as a friend of this blog, you’ll get an invite within 24 hours.

Boxee’s CEO Avner Ronen sat down with Tech Confidential this week and answered some interesting questions about his company Boxee, how he raised money in this environment (from Union Square Ventures and Spark), and how he plans to compete with the likes of Apple, Microsoft, Sony, and others. The video is about 5 1/2 mins long and if you don’t have that much time, fast forward to 5:15 to see the answer to the last question. I think he nailed it.

I’ve had a ringside seat for a number of reasons and it’s been fun to watch the team at CBS Radio quietly putting together a streaming audio powerhouse. Earlier this year, CBS acquired the rights to operate AOL Radio and yesterday they announced that they had done the same with Yahoo!’s internet radio business.

If you combine the audio streams that CBS’ owned and operated radio stations (like 1010 WINS, WFAN, KROCK, etc) generate with the AOL and Yahoo! streams, you’ll realize that they are a bigger streamer than almost anyone on the web, with the exception of YouTube.

As Tameeka Kee of Paid Content points out in the blog post I linked to above:

They’ve made the investment in the infrastructure, the platform and the sales force to operate in a sustainable way.”

CBS Radio’s ad sales expertise is a big plus: it has a 1,600-member
sales team, can sell ads on national and local levels, and has a vested interest
in TargetSpot, the ad technology firm that can serve hypertargeted ads
into various types of streaming media. CBS also has experience with a
partnership of this size, as it merged its online radio network with AOL’s back in March. 

Our portfolio company, Targetspot, is indeed part of the equation here. Monetizing this huge listener base is the end game and highly targeted audio advertising is going to be a big part of the internet radio/streaming audio opportunity.

When we talk about internet media, so much attention is paid to web publishing (including blogs and social media) and web video. Not much attention is paid to online listening. But it is exploding, possibly at a faster rate than text or video. I know that I listen to at least an hour or two of streaming audio every day. And very little of that is monetized currently. That will change and I expect Targetspot and our friends at CBS Radio to be big beneficiaries of that trend.

Verizon is running an interesting campaign for their new Blackberry Storm and this blog is carrying the ad banners right now (right sidebar). You can click on a link in the banner and turn the banner into a video on the new Blackberry Storm.

This is interesting to me for several reasons. First, it’s running for two days, yesterday and today, and I believe for these two days, it’s the only campaign running on this blog. Second, it’s generating a nice chunk of change to a good cause because all the ad revenue on this blog goes to charity. And third, it’s running on a blog that was openly critical of the Storm just last week. In fact, that post which is critical of the Storm is still on the front page of this blog where the ad is running. And this blog has been no friend to wireless carriers and their abusive business models like demanding exclusives from device manufacturers.

Conversational media and conversational marketing is coming of age. Marketers are understanding that you have to be part of the conversation even if it isn’t flattering about you and your products and services. And participants in conversational media are starting to recognize that marketers and their brands have a seat at the table and a role in the conversation. In this case, they are helping to fund it (sort of).

Kudos to Verizon for understanding that you can’t control the content your campaign runs next to. And kudos to Federated Media for evangelizing conversational marketing and for putting an interesting and relevant campaign in front of this blog’s readers.

I read Maureen Dowd’s piece yesterday on a website that is covering local news in Pasadena California using stringers in India and I thought the whole idea was really nutty. How is it possible that people living half way across the world could know much about what’s going on in my neighborhood?

As Mark Josephson, CEO of our portfolio company, Outside.in, said in his post on the topic yesterday:

But why is everyone focused on trying to make the old model of
newspapers and reporting survive as opposed to innovating and embracing
new forms of news, like participatory journalism or hyperlocal bloggers?

The unfortunate events in Mumbai showed that witnesses can be a
great source of news.  And, you don’t have to look any further than our
weekly Blogiology 101 posts to see that there is incredible coverage
happening at the hyperlocal level.

These are new forms of news gathering and they cost a heck of a lot
less than even offshore operations.  News organizations should embrace
their community of readers to find new ways to help cover their news.
Use your brand, traffic and salesforce to drive traffic and revenue to
new groups of people who are already writing about their own
communities.  Hey, they already live there and actually really care
about it too!

I am convinced that the future of local news is on the web, not on paper, and I am equally convinced it will be written largely by the people who are making the news or experiencing the news first hand and not by traditional journalists or their replacements somewhere where cheaper labor can be found.

My friend Steve Kane left an interesting comment on yesterday’s post about analog dollars and digital pennies. In it he noted the following:

any case, i’m not sure what comscore is counting, but most other
measurements services give youtube roughly 65 million *unique* visitors
per month

http://siteanalytics.compete.com/youtube.com/?m…

by
contrast, the CBS network alone amalgamates nearly 200 million viewers
— in just one week, and just in the three evening hours of prime time!

http://tv.zap2it.com/tveditorial/tve_main/1,100…

i’ve
never seen nielsen de-duplicate viewers numbers within a network, but
let’s say 50% of those 200MM are duplicated. heck, lets say 75%

regardless,
just one network, CBS, equals or betters youtube’s entire monthly
audience in just 21 hours (one week of three hour slots)

That caused me to go back to comscore get the exact numbers. YouTube’s monthly worldwide audience was 344mm in October according to comscore and 55mm visited each day. I don’t know what the weekly numbers are but I bet that they are about what CBS gets.

But this post is not about rebutting Steve. His comments are spot on and contributed to the discussion, which is a very good one.

What I hadn’t realized when I wrote the post yesterday is how large YouTube’s global audience is and how much of it is outside of the US. Here’s the raw stats:

YouTube’s audience maps pretty closely to the web’s audience around the world. It’s most popular (on a relative basis to worldwide audience) in europe and slightly less popular (on a relative basis) in asia and latin america. But it is signficant to note that YouTube’s audience in asia-pacific is roughly the same as it is in the US.

Unlike the CBS network, YouTube is a global media property and it reaches every corner of this planet. While many of the videos are in english, a growing number are in other languages.

What is also true about YouTube is that the size of the audiences for individual shows can be as large as a network TV show. CSI was viewed by 18.5mm viewers last week. YouTube has five pages of videos (20 videos per page) that have been viewed more than 25mm times.

I am not arguing here that network style television (long form, story driven) is not a superior form of entertainment. I think the succcess of Hulu to date proves that is. And we know that Hulu will be a much more attractive venue for advertisers for at least a few more years.

But I am amazed at the scale and reach of YouTube and what it tells us about video entertainment delivered over the Internet. If CBS wants CSI to reach 100mm viewers instead of 20mm each week, it can do that on the Internet with worldwide distribution. And I am sure that’s going to happen someday, hopefully soon.