I talked about the suspicious movement in the eBay stock price before the Skype acquisition in this post.

Apparently this is what happened (maybe ) according to Janus . . .

Something wacko — the news was apparently known to some New York taxi drivers way before the announcement. I kid you not — the week before the announcement, we received a comment in our Customer Support from some NYC taxi driver about eBay acquiring Skype, and we downplayed this as a rumor, which is what it still was for us at that time. The taxi driver replied “look gentlemen, you may disregard it all you want, but I know the facts since I just gave a ride to some eBay execs who discussed exactly what would be happening”. Can’t validate if the story is really true, but looking back, it turned out to be true and funny nevertheless.

Tom has a good post on Skype’s acquisition value. The golden nugget is Tom’s historical re-telling of communication networks industry history (mainly e-mail) which can be applied to any type of network effects or platform effects driven businesses. Anyone who has taken an micro-economics class knows that in a perfectively competitive market, Price=Marginal Cost, and that if MC = 0 (in this case), Price will become 0 too. . . This also means that open network inter-operativity potentially creates perfect competition, and thus price will eventually drives down to 0. Openness might be good for customers but not so good for companies . . . (see Microsoft and its desktop monopoly) . . . In the world of open source, this is probably not such a “pc” statement but its exceedingly true. . .

If you want to know the future of voice communication, look at the history of email. Once upon a time email was offered on closed networks. MCI Mail even charged by the “MCI ounce” – a thousand characters. AT&T bought Western Union EasyLink so that Ma Bell could become the post office of commercial email. Trouble is that email doesn’t require a post office. It travels over the Internet between sending and receiving server directly. Enterprises own their own sending and receiving servers. Individuals share the sending and receiving servers of their ISPs or of Yahoo, MSN, or Google (you can usually tell whose server someone is using by their email address, of course). We think of email as being free because there is no incremental cost per message.

Another good analogy and perhaps more recent is what the Internet did to EDI. Per 1,000 character prices when from over $1.00 to $.07 or lower in a matter of 5 years. It used to be that connectivity and cross network integration were the main reasons for getting EDI. (ie, you are on GE but your supplier is on Sterling) But since the Internet commoditized those “functionalities” (no need for dial up or ISDN VPN connection to an EDI network, an ubiquitous IP address will do) EDI networks has been struggling to provide “value added” services to their network such as in-network translation/XML mapping. The pricing pressure has been so bad that the new age web services networks (see grand central) are having a hard time justifying their price points as well (lets not forget XML=ASCII=EDI). So what does this say to me? That connectivity is overwhelmingly the main value proposition of any communication platform, once that is commoditized/(compromised?), the value of the network is reduced by an magnitude. . . and there is very little that an network operator can do to regain that value through providing incremental none network effects services.

Once in a while, a virtual blog thread, starting with a single blog post, reverbrates around the blogosphere to create a web of posts, comments and re-posts. It is a unique form of knowledge creation, sharing, and amplification that speaks to the distinctiveness and longevity of this medium for its relevance and utility to its participants. Much more than a single drop of water in a pool creating a concentric system of waves; each post, comment, and trackback is in of itself a drop in the knowledge pool, together, creating an intertwined pattern of waves which cooperatively presents a picture that uniquely conveys the thoughts of the “collective” that no single person or blogger could ever hope to achieve. Even more amazing are the ways which clusters of consensus are formed through a repeating pattern of point and counter-points. Like a pendulum, each cluster seems to find a steady state (if only for a short time). Unlike message boards which are often driven by the madness of mobs (slasholes), blog threads seem to promote more diversity of opinions through higher number of consensus clusters despite of the pendulum effect. That alone, makes “this time” so much more different and better than the “last time” (web 2.0?).

Unless one actively participate in this medium, there is no way one can truly understand and comprehend the power and relevancy of immersing oneself in the middle or even periphery a “blogquake.” Why the random thought? I was going through my blogroll before the 49ers game and found an interesting set of posts that occupied me for the better part of the morning. Much more than interesting actually, I think I am better prepared for the challenges of my Monday morning reviews than I was last week . . . the true definition of relevancy. . .

(BTW random idea, be great if google or technorati can augment pagerank with algorithm which takes into consideration

1) “speed” of propagation to a cluster of posts
2) “originality/epicenter-ness” for a single post

Plus create a GUI for navigating around consensus clusters of blogs)

Below are the initial set of posts that got me started exploring the topic around “user-centricity.”

User triangulation: how to listen to customers
Getting Real: Forget feature requests
Listening to users considered harmful?
It Matters Who You Ask
Joe Wilcox on MSN Spaces
Innovation and listening to customers

Got the below email through one of my Stanford distro lists. . . was actually quite disturbed by it. Now, I’m not affiliated politically. . . but I’m probably more right leaning than left . . . a typical California Republican (i.e. social democrat + laisez faire economic republican). Still, I find this uncalled for - a children’s book making fun of a specific ideology or groups of people. Granted I haven’t read the book (and not about to spend money on it), the concept of the book is kinda sad. I’m not sure imposing our religious, societal, and political views in such a mean spirited manner (the social democrat part of me) on our children is such a great idea.

Rather, I believe belittling something you simply don’t believe in or belong to teaches close mindedness and bigotry. Morality and ethics (family values . . . eek hate that word) is not the exclusive domain of any one group of people . . be it race, nationality, religion, or political affiliation. Trying to present it as such is amoral in of itself.

I know it’s really a novelty book and not meant to be consumed by children but cant people stick to political cartoons making fun of each other on Time or Newsweek? I certainly enjoy caricatures of GW or Hillary. But using seemingly innocuous and innocent mediums to spread hate or disparagement seems a little low. Its almost like hijacking a religious sermon to rant on about politics. . . oh wait. . . that’s actually pretty normal practice for both sides . . . forget it, I’m just way too thin skinned for politics.

This is a humor book that my company is putting out — it actually hit
#1 on Barnes & Noble’s website at one point today. The subject matter
speaks for itself so feel free to disregard this notice if it’s not your
cup of tea.

Best wishes,
Eric

http://news.yahoo.com/news?tmpl=story&u=/prweb/20050922/bs_prweb/prweb288598_1

Conservative Kid’s Book Challenges Harry Potter for #1 Amazon Spot

Los Angeles, CA (PRWEB) September 22, 2005 — An unlikely children’s
book has stepped forward to challenge “Harry Potter” for the #1 ranking
on Amazon.com’s bestseller list, and its portrayal of left-wing icons
Hillary Clinton and Ted Kennedy as cartoon villains has provoked a
firestorm of controversy in the process.

“Help! Mom! There Are Liberals Under My Bed” (Kids Ahead; hardcover
$15.95; ISBN 0976726904) by Katharine DeBrecht soared to #6 in Amazon’s
overall rankings on Wednesday afternoon after being praised by talk radio
king Rush Limbaugh on his national radio show. The illustrated book
ranked second only to J.K. Rowling’s “Harry Potter and the Half-Blood
Prince” in Amazon’s children’s book category, and was also ranked as #8
overall on Barnes & Noble’s site.

Should the book go on to topple “Harry Potter” for the top spot, it
would be a major upset by a most unlikely underdog. Not only have the
leading publications in the publishing industry such as Publisher’s Weekly
and The New York Times Book Review ignored the book, it has also been
fiercely denounced by liberal pundits and bloggers. The average customer
review for “Liberals Under My Bed” on Amazon stood at only one star out
of five earlier this week as liberals flocked to the site to criticize
the controversial book. But its fortunes dramatically reversed as word
of the book spread in conservative circles.

“Our hat is off here to Katharine DeBrecht, the author of ‘Help! Mom!
There Are Liberals Under My Bed,’” Limbaugh proclaimed to his audience,
adding that left-wing critics were upset about DeBrecht’s book because
of its accurate parody of the liberal movement. “I’m telling you, the
liberals cringe — they go ape! — when you dare be honest about them.
They call it an attack!” Limbaugh added.

Limbaugh recounted that Ron Reagan — whom he playfully referred to as
an MSNBC “quasi-host” — scolded DeBrecht on his cable television
show, and that Alan Colmes, the liberal co-host of “Hannity & Colmes,”
claimed her book existed for the purpose of brainwashing. Limbaugh went on
to note that the popular Democratic Underground website named DeBrecht
to its “Top 10 Conservative Idiots” list, and that the highly
trafficked left-wing blog Daily Kos likened her book to Nazi propaganda.

“Help! Mom! There Are Liberals Under My Bed” — which features
full-color illustrations by award winning artist Jim Hummel — tells of two
brothers who open a lemonade stand. Their plans to save up their
hard-earned profits to buy a swing set go awry when a Ted Kennedy character
taxes away their proceeds and a pants-suit clad Hillary Clinton look-alike
outlaws sugary drinks. The book is being hailed by traditional values
advocates as an alternative to liberal books such as “Rainbow Fish”
(where a fish is hectored into giving away his beautiful scales so that all
the fish look the same) and “King & King” (where two princes marry each
other and adopt a little girl), which are often found in our nation’s
classrooms.

About Kids Ahead: Kids Ahead is an imprint of Los Angeles-based World
Ahead Publishing, the West Coast’s premier publisher of conservative and
libertarian books. To learn more, visit www.worldahead.com .

Contact Information: To interview author Katharine DeBrecht, contact
Special Guests at (630) 848-0750.

# # #

The Soul of a New Company

VCs tend to approach start-ups with cool, analytical rigor to get to the bottom line answer: “Will this make me and my limited partners money?”. Entrepreneurs tend to approach start-ups with extreme emotional attachment beyond any rational borders, seeking the answer to the question: “Will anyone love and appreciate my [professional] baby (which, by the way, I hope makes me money so I can retire and get back to spending time with my family)?” Anyone who’s been involved in starting a company knows what an incredibly emotional adventure it can be. The ups and downs are incredibly exhilirating yet terrifying. One moment you’re king of the world, the next you’re afraid you’re going to run out of money, and then it flips again. The tension between that emotional roller-coaster that the founders/insiders are feelings as compared to the cool, analytical perspective of the rational VC/outsiders is an extremely healthy one - over-weighting one side or the other will result in a sub-optimal company-creation process.

so true. . . so true. . . reminded me of the Monk and the Riddle. You look for passion first in your founders and analytical abilities second. . . You look for analytical abilities in your VC and employees first and passion second . . . obviously both are 1,2 on the list of qualities you would want for anyone to share the next 3 years of your life with.

Getting a lot of email questions from the last post. . . so I dug around try to figure it out. . . found this but didnt help too much so I asked around for a no bullshit answer. This is basically what I gathered, there are two kinds of behavioral ad targeting

1) Bullshit Behavioral - Basically what Claria is doing, serving ads to you when you are surfing another website. Using the content/category of another site you are on to serve you relevant ads. Some times this might include serving you travel ads two or three pages after you left Expedia. More sophisticated ones combine a few websites and do some calculationg around what that means as far as your likelihood to click on an ad (silicon.com + travelocity = United Ticket to SJC). No even a simple implementation of a logit model, mostly hardcoded.

2) Wanna Be Amazon Behavioral - Think of the way Amazon serves you up product recommendation, but instead serve up banner or text ads instead. Using (People who bought product X also bought product Y) and applying it for ads (People who clicked on ad X also clicked on ad Y).

So there you go, I’m sure other people have their own secret sauce they dont want to share with me, but at this point doesnt seem like such a black box, rocket science, or breakthrough at all.

It’s been a while since I wrote something of substance and since I’m on a plane back from the shop.org conference . . . might as well try to tackle this idea that’s been bounced around in my head for about a month . . .

I believe browse is making a comeback. While search has grabbed the headlines for past 4 years, browse is surely but silently gaining grounds on search as a navigation tool, information retrieval methodology, as well as viable business model. Browse’ importance is often under appreciated because while most of us “do it,” we are often not aware of our actions. We know when we are “searching” on the web because we are actively interacting with a search engine. Browsing, on the other hand, is by definition a “passive” activity from the perspective of the server processing & logic as well as “open” because there is no definite third party that is creating the experience for us – we are the drivers of our own destiny/click stream across multiple websites. . .

So what exactly is the difference between search and browse?

Search is a targeted way to retrieve information. Users enter a query (most likely a keyword) and a set of results are returned. Example include Google, Froogle, Yahoo Search, and eBay’s search box. . . pretty simple, I think everyone understands this. . .

Browse, however, is a link to link navigation through the web. Despite its missing place in the popular web terminology as the foil to search, “browse” has been around much longer (in the short history of the web) than search. For one, Netscape and IE are called “browsers” for a reason. It’s a tool that let users navigate through the hyperlinking structures of the web, one page at a time, sequentially.

There are several reasons browse is making a come back.

-Social Networking. Before the rise of social networking and social web services, the hyperlink structures on the web were mostly determined by corporations which linked to each other. As a result, personal relevancy of these link structures was little to none. Big giant corporations (or even small corporations) determined the “adjacency” of the webpages for you. However, as the personal web arose, link to link structures between web pages became highly personalized. Social networking applications created link structures which were highly personalized (between you and your friends, and FOAF for example). As a result, to “find” content which appealed to you no longer required a search engine with its shot gun approach to information retrieval. Certainly by following links in MySpace the contents are highly relevant to you either in lifestyle, topic, or simply relationship closeness. One of the most amazing stats I saw in the last few months was that Myspace has overtook Google in pageviews.

- Blogs. Perhaps simply an extension of social networking web sites or even really the same thing, blogs has forever changed the inter-site link structure of the internet. Blogrolls, permalinks, and trackbacks allowed users to go from link to link, discoverying content that perfectly balances serendipity and relevancy. Hornik at VentureBlog as a great post on this experience and its relevancy.

- Replication of offline experience. Barry Diller spoke extensively on this subject during his keynote (although more specifically on e-tailing). Essentially, as a big believer in brands, he doesn’t believe the search experience creates a “natural” analogy to the offline browsing experience. To his point, while search allows a much more targeted experience (and is desirable and useful for what it is) it does nothing to truly capture the intangibles of “why people shop/explore,” “how people feel about shopping, travel, and exploration.” Search does nothing to create experiential existence in the offline world via context, design, and serendipity, and creativity. In many ways, he argues that websites are simply “utilities” and not brands. He doesn’t know what the future is but he believes we are only at the beginnings of enabling such an experience. I would argue that “browse” as a foil to search is a better starting point for creating such an experience.

- Behavioral ad targeting. The reason search has became such a big deal was because search traffic was highly monetizable compared to regular site traffic. Before search advertising came along, the online advertising industry was struggling with low click through rates on CPM banner ads. The travails of Doubleclick versus Google was an perfect contrast in the relative success of the two models. However, as behavioral ad targeting became a mature, operational, and almost as “profitable” as search advertising; “browse” traffic is now becoming more valuable than ever (but probably will never be as valuable as search page views). The high valuation of thefacebook.com and Myspace is a direct result of the recognition of that fact by venture capitalists and investment banker.

So while the world frets over search and its various incarnations (product, vertical, social blah blah) . . . someone should take a look at the alternate reality of the browse economy and realize that as much money is being and will be made (and lost) in it as the search economy. Being the contrarian, I believe getting into “browse” now would be like getting into “search” 3 years ago. The runway is is much longer for improving the browse experience of the Internet than there is for search. (flock? not even quite sure what it is but sounds interesting)

Some point as my last post. . . but backed up with more numbers

Pundits who dub bloggers as wannabe journalists or budding political commentators may be off the mark, according to a new survey.

here it is. . .

As part of his keynote speech during Shop.org, Barry Diller essentially gave blogging the thumbs down as both a phenomenon as well as a marketing channel. He jokingly pointed out that the bloggers are not people and that 99.999% of blogs are pretty much worthless. Essentially he argued that writing is hard and it takes special talent to create a “voice” and since most people do not have that talent, most blogs suck. Giving blogging its due, Barry went on to say that as a purveyor of facts to the masses in cases where time is extremely sensitive, blogs do have an important but small role in the landscape of publishing.

What Barry Diller said is hard to refute since I know I’ve never been a good writer and that my blog is and will never be massively consumed. However, I think Barry and the general public do not really know what blogging is. Most people seem to think the dominant form of blogging is similar to theonion.com, Gawker.com, BoingBoing, or even this particular blog, but they are wrong. I hate to beat this point to death, but as I wrote before, most form of blogging is not some guy massaging his own ego by espousing his random ideas in the hopes gaining some audience where there is none (read me ). Most bloggers do not need a “voice” (or good spelling or grammar for that matter) because they are not blogging for the masses. Instead they are writing for their circle of friends and family to keep them updated on their lives without having to spam everyone with an obviously impersonal email. Sometimes they are hoping to make some friends along the way that share their love of music or lifestyle. This is what blogging really is, not some glorified way to make a name for yourself but simple new way to communicate your thoughts and life happenings to a not too distant circle of friends.

I don’t blame Barry, he is mostly right after all. Most blogs are 99.999% useless to the general population. All the blogger cares about are the .0001% of people who are in his virtual or physical social circle that do think it’s useful.

So here I am standing in the middle of a convention floor at some random internet kiosk that I finally hacked to let me out to the ‘net to type this out. . .

More interesting posts to come, but for now, just blogging just to take a break.

Shop.org has to be the “best looking” tech conference I’ve ever been to. For one, the male/female ratio is close to 50%. Furthermore, since majority of the conference goers are far from the valley geek types like me, the demographics are very different beyond gender as well. I say half of the people here are internet or multi-channel executives of major offline brands like Gap, Tommy Hilfilger, Polo, Anthropology, Tiffany’s, etc. . . Given their back ground in fashion and luxury goods, it was not surprising the amount of “good-looking” people here on the convention floor. And Just in case someone accuse me of being sexist, this applies equally to the male and female gender. For example, I’ve never seen this many pairs of flat front khakis, fitted trousers, and multi-colored stripped bottom shirt in one convention floor . . ever . . . I almost feel like I’m walking around SOHO shopping for shoes . . .