Posts from VC & Technology

Dave Winer’s got a post up talking about the concerns he has about FeedBurner that have grown since the acquistion by Google. Dave’s a smart guy and is a big reason we have RSS in the first place. So you have to take his concerns seriously.

But as a former investor in FeedBurner and an active user of the service, I don’t share his concerns. I point you all to this post on the FeedBurner blog from June 2005 where FeedBurner explained how easy it is to leave the service if you ever decide to do that.

That gives me all the comfort in the world. I love it when services make it easy to leave. When they do that, I tend to stay.

That’s a John Doerr quote that I often use. And this post reeks of conflict of interest. So I’ll disclose that right upfront. I am an investor in both Indeed and comScore.

TechCrunch has a post up about Indeed’s competitor Simply Hired’s use of WhenU to drive traffic to it’s service. Until recently, Indeed had about three times the audience of Simply Hired. In the past couple months, Simply Hired’s numbers have been on a sharp increase. Now there are a bunch of services in the jobs space on the web. So it’s not necessarily a good thing to focus on just Simply Hired and Indeed. There are a lot of places to go to find jobs on the web. But I personally think the job search services like Indeed are the best way to find a new job.

What’s most interesting to me about this post is not the question of whether popups/popunders are a good audience acquisition strategy (it is not). It’s whether UVs seen by virtue of popups/popunders should count in a service’s UV count.

It seems that Compete, Alexa, Hitwise, and possibly other third party tracking services count that kind of traffic. And it seems that comScore doesn’t. If that is in fact true, then it’s one more reason why comScore’s data is better.

From today’s front page story in the New York Times about Google’s $4.6bn wireless bid.

In the Internet giant’s view of the future, consumers would buy a
wireless phone at a store, but instead of being forced to use a
specific carrier, they would be free to pick any carrier they wanted.
Instead of wireless carriers choosing what software goes on their
phones, users would be free to put any software they want on them.

Hell yeah!  This is the way it must be. Open devices, open services, open spectrum.

What would be really cool is if Google paid $4.6bn for the spectrum and then opened it up for the world to use as we see fit, just like Facebook opened up their platform.

It’s gonna happen. I can feel it.

Facebook continues to impress, buying one of the most interesting Bay Area startups, a company called Parakey that has developed technology for persistent web apps.

Persistent web apps are certainly one of the next big things. If the technology works, the web will be like desktop software. Imagine using gmail like you can use thunderbird or outlook on your desktop. Google is developing something called Google Gears that is similar. Google describes Gears as "enabling offline web apps".

Adobe has developed a technology called AIR that also promises to provide persistence to web apps. I am not technical enough to describe how all these various technologies differ from each other. I am sure there are important differences between them.

But what’s important here is that the web is going to be an operating system with direct access to your device and you’ll be able to use your web apps even when you aren’t connected to the web. This is going to result in a whole new wave of innovation. And that’s a big deal.

Back to Facebook and Parakey. I said Facebook would sit tight in an earlier post this week. Clearly they aren’t going to sit tight. But it’s also clear to me that they are thinking like Google not MySpace. They are building a big platform play here. And I just don’t think that kind of thinking leads to a sale transaction anytime soon.

The founders of Parakey include Blake Ross, who is credited with much of the seminal work on the Firefox open source browser. Parakey is also open source. So does that mean Facebook is going to open source its "social operating system"? I think so. Cool. Put your seatbelts on. This is going to be a fun ride.

I am headed up to westchester county this morning to participate in a panel discussion on "consumer behavior on the internet – behavioral targeting and lead generation". It’s an area I’ve written extensively on over the years but not much lately.

In thinking about the topic in the shower this morning, my mind latched onto this comment that Adrian left to my recent Facebook post:

Facebook doesn’t seem to have tried too hard yet to maximize the value
that they can get from ads. They know so much about me that they could
do as well or better than google with targeting; most of the ads shown are inane

Of course that is true. It’s the "new media deal" as Matt Blumberg coined the phrase in this post from August 2004.

The New Media deal is that … consumers are willing to
share a certain amount of personal information in exchange for even
better content, more personalized services, or even more targeted
marketing — again, as long as those things aren’t too intrusive and
provide adequate value.

The thing that is so interesting to me is that the Facebook generation doesn’t resist the new media deal for privacy concerns, they embrace it. They don’t fear the targetting, but they sure hate the "inane ads". I do too.

At the iMeme panel last week I had the opportunity to sit next to Jim Breyer and watch him take some tough questions from Adam Lashinsky about why Facebook doesn’t sell at the huge numbers that are being whispered in the blogs and on the street.

Jim said something important that really wasn’t picked up in the chatter about his comments. He said that all this attention on what Facebook is worth isn’t doing the company any good. I commend Mark, Jim, and Peter for their obvious intentions to keep Facebook independent and private for now. I think Facebook will make a great public company at some point, maybe in the next year.

But selling the Company would be a huge mistake. First and foremost for the users. Any buyer will screw up Facebook. It’s greatness comes from the fact that the people who run the company live inside the service, they built if for themselves and it works because of that. They have their pulse on the community and they are not likely to screw it up too badly.

If you look at most web services that have been bought, they’ve lost their mojo once they were acquired. What has YouTube done lately that is so great? Skype? MySpace? Delcious? Flickr?

I really don’t see what a large portal/media company does for a web service and its users. I totally see what a large portal/media company does for a "monetization service" like FeedBurner or Right Media. Look at how successful the advertising.com transaction was for Time Warner/AOL.  But social web services/social media is different. I believe these services do better as independent entities.

So why do companies sell? Because of fear, boredom, and personal financial issues. It seems to me that Skype’s founders got bored and wanted to do something else. Billions of dollars and boredom is a good reason to sell. YouTube’s founders knew the copyright issues were going to be a huge distraction and that Google was a much better entity to fight that battle. Fear and billions of dollars is a good reason to sell.

Personal financial issues lead a lot of companies to sell. But in Facebook’s instance, that’s not an issue. If Zuckerberg wanted to sell a piece of his company, I’d buy it. So would any number of people. They’d be lined up. But it’s unlikely that his shares would go any further than Peter Thiel, Accel, or Greylock who would likely snap them up at any reasonable price. So if Zuckerberg had personal financial issues, and I suspect he doesn’t being so young, he could easily deal with those in a private sale transaction.

Bottom line is everyone should stop wondering about how much Facebook is worth in a sale transaction. Because it’s not going to happen. Look for the IPO next year.

I’ve never even heard this term before. Streamripping. I guess it means digitally recording an mp3 stream (ie internet radio) to build up a music library. I am sure it’s technically possible, but I’ve never heard of anyone doing it. I know lots of people who acquire music via torrents, p2p networks, iPod sharing, pando, pownce, IM etc. But not one single person who has ever engaged in "streamripping".

And yet apparently SoundExchange is willing to make a deal with internet radio broadcasters to alter the proposed new net radio royalties if they will use some sort of protection scheme to stop "streamripping".

This irritates me on many levels. First, this is an example of lawyers run amok. I know that lawyers are supposed to worry about "what if" situations, but there are so many better ways to steal music than streamripping that I just don’t see this as a major threat.

But my bigger problem with this is that internet radio is the future of radio. Because we are beginning to see the emergence new connected devices, from smartphones, iPhones, Sonos, Squeezebox, and soon products from Cisco and others that will replace the CD player in our home music system and the iPod in our car. These devices play internet radio and subscription services like Rhapsody, Napster, etc.

They pull the stream over the wired or wireless Internet and play it directly on the device. They key to all of this is that the streams are easily brought onto these devices. When you buy one of these devices, you want to know that it will play whatever stream you want.

This is a huge opportunity for the music industry and this was what I thought the SoundExchange fight was all about, getting as big a piece of this emerging new revenue stream for the rights holders. And at some level, I am OK with the give and take of that negotiation.

But the introduction of DRM into the mix is frightening. This is shooting yourself in the foot after you’ve already done it to yourself once. The introduction of DRM into the file based digital music business effectively gave Apple a monopoly over that business.

The music industry needs to learn from that lesson. The next big thing is music streamed to your living room, your cell phone, and your car directly from the Internet. There is a huge amount of revenue in that business for the rights holders. But if the streams are "protected" in some way, we will never get the innovation and choice in devices that will make the streaming music market the most vibrant.

This is a faustian bargain that radio broadcasters of all shapes and sizes must resist. Because the music industry still doesn’t get the fact that open is good and closed is bad.

My new year’s resolution this year was to get completely off of Microsoft products and it’s been an abysmal failure. I have not been able to get off of Entourage which is the worst software product I have ever used because I am locked into a Microsoft Exchange platform at work for sharing contacts, calendars, and email. And we are locked into it because it works so flawlessly with our Blackberries. It’s a killer combo. It’s funny that its RIM’s technology that’s keeping me on Microsoft technology.

So I am caveing in, which many of you predicted, and going back to Windows and Office. I am getting a new MacBook Pro and pre-installing Parallels and Windows and Office on it.

I’ll use Windows/Office for work stuff and OSX for everything else.

But I am hopeful that soon we’ll leave Exchange for Google’s platform, gmail and gcal primarily. All Google needs to do is build a client for Windows and OSX and Blackberry and iPhone. And I’ll be gone from Microsoft for good.

And it couldn’t happen too soon.

Weeks go by where I don’t pick up the paper. We get both The Post and The Times at home and we get both the Journal and The Times at the office. But I can’t be bothered. My news is coming at me all day long and prefer to get it on my phone and laptop than in paper form.

But I’ve been travelling today. From Naples Maine to Amagansett New York. You do that by driving, flying, and then taking a bus. I am on the bus portion, happily connected to mobile broadband.

I read the Times and The Journal today. Here are some stories I found interesting.

Happy Blogiversary – WSJ – Blogs are ten years old this week according to the WSJ. So they celebrated by getting 12 people to tell us what they make of blogs. First of all I am shocked that Dick Costolo didn’t mention this blog as one of his three favorties. I guess now that he’s at Google, he doesn’t have to pretend to like this blog anymore! Second, I think Tom Wolfe’s section was written tongue in cheek. He can’t be that much of a luddite. It’s an entertaining read and I had no idea that Mia Farrow is a blogger. I’ll have to check that one out.

A Patent’s Worth Having, Not! – NYT – Ok, I bastardized the headline. But not the point of the column by Michael Fitzgerald in the Sunday business section. He covers some research that shows that patents are a huge waste of money and are stifling innovation. All you need to do is listen to most of the people working on software and Internet technology and they’ll tell you the same thing. Patents are absurd. But you know I felt that way a while ago. I think patents are like nuclear bombs, if others have them you have to have them as well. Fortunately we can eliminate patents. Unfortunately we cannot eliminate nuclear bombs.

The Boat Is About To Rock In Internet Video – NYT- This is Brad Stone’s piece on Veoh’s new software for watching web video. First, I like the sound of Dmitry. He’s a nimble russian technologist/entrepreneur. I’ve made money with guys like him before. Veoh came in as an also ran in the web video sweepstakes. We all know that YouTube won that one going away. But instead of giving up, they’ve copied Joost and build a client side app that acts as a set-top box style interface to video. But, and this is a big but, instead of going and asking permission from the content ownes like Joost is doing, Veoh is just pulling all the stuff that’s already on the web. That’s the way to do it. Nobody wants a closed system anymore other than the content owners. Open wins, closed fails.  My only beef is with Todd Dagres’s quote (Todd is a friend who sits on Veoh’s board). Todd says:

“We are going to try to be friendly to content owners,” said Todd
Dagres, a partner at Spark Capital who serves on the Veoh board. “We
are going to try to be the white-hat company.”

Not exactly Todd. Joost is the while hat company. That’s why Veoh is going to win and they are going to lose.

Sushi For Two – NYT- If you love sushi, read this. I’ve gotten to the point that I don’t want to eat sushi anywhere other than the bar talking to the chef.