I got the following email in almost ALL my email accounts. . .you name it. . . yahoo, gmail, ebay, wharton, stanford . . . every single one. . . this is an incredibly organized and expensive stock manipulation scheme. To buy a big enough list to reach that many people, somebody had paid fortune to make this pump and dump work.

I dont know how many other people got it, but it seems to be a lot. . . here and onTechcrunch. The Techcrunch post is interesting in that its a post from Oct of last year yet it was re-activated with a huge thread regarding this spam issue from people searching for “ikarma” on google or yahoo. Even the CEO came on comments section to defend the company. A lot of the positive comments though, seemed a little planted (IMHO, when they write too much).

So did the pump and dump scheme work? Hell ya. . . The spam started on Tuesday, by Wednesday the stock went up almost 50%. It looks like someone was acumulating a big position before Monday, then waited till Tuesday to send out the spam. A bunch of fools jumped in on Wednesday and Thursday while whoever was manipulating the stock ended up selling all of it after the price popped on Thursday. The selling then spread to the fools that jumped in on Wednesday (buyers remorse) and the stock ended today at a price lower than when it all started on Monday . . . a cautionary tale for sure. . .

The other question is that whether iKarma is involved in this scheme. The huge caveat here is that I have no idea, this is pure speculation. But pink sheet companies are generally pretty sketchy and closely held by a few major shareholders. Many times these comapnies had went through multiple business models, business name, and ticker symbols. Almost all cant even tell you what GAAP stands for.

iKarma, themselves, have been putting out a lot of press releases in the wire hoping to pump up the stock and generate buzz. . . not exactly the best thing to focus on when you are an early stage company. Furthermore, in these press releases, iKarma seemed to be determined to get the attention of day traders by including these keywords: (press releases here)

Keywords: Reputation Management, Financial Advisor, Registered Rep, Securities Broker, Stock Broker, Financial Planner, Trust

Again, sketchy as hell. . . having almost nothing to do with the actual service they are offering. . . Next I did a zoominfo search on the President of the company and got this. . . Not sure if this Pitchford guy for “stockbroker shop” is the same as iKarma Scott Pitchford. BUT if they are the same person, this Scott Pitchford must be pretty familiar with the brokerage industry and how “pump and dump” schemes work. Seems entirely possible that iKarma was built as a a way to sell stock rather than a real service.

I can’t say if these guys personally responsible for the pump and dump or not, but their past behaviour doesn’t seem so innocent. If they are responsible, Techcrunch, news.com, and whole host of journalists/bloggers were unwilling accomplices by helping iKarma raise their profile. Which brings out another question on how much due dilligience bloggers should do before writing about a company . . . in the end . . . with big readership comes great responsibilities. . .

Om Malik is known as the blogger that loves to rag on eBay. Exhibit A, B, C, D, and E . . . . . . . (somebody’s got to keep eBay honest right?)

Most recently Om suggests

1. Come up with eBay 2.0 and figure out a role for the company in the digital future.
2. Focus on core strengths. Buy Intuit (Quicken) to give eBay buyers and sellers accounting features.
3. Focus of the company should be Paypal and turning it into Citibank of online world. (Very Very Important.)
4. Figure out a way to get into shareware sales business. Perhaps acquire eSellerate. This is where Ebay can put its heft to good use.
5. Get into digital media sales. The recent Skype-EMI deal could be a good start.

I havent yet seen a journalist turned CEO become successful (turning VC’s works some time . .. Moritz for one) but I think Om is well on his way . . . (as you guys can tell, I’m exercising a huge amount of self control not to write a retort). So the only thing I’ll write is that some of these ideas are obvious, others too vague, and the rest are simply financially infeasible (to be honest, I do like one of them though). . ie not much better or worse than a McKinsey deck

This is from Google’s corporate overview webpage circa June of 2004:

Google does search. Google does not do horoscopes, financial advice or chat.

More of it at web archive

So the question from me is . . . when is Google Horoscopes’s coming? I see that someone in Australia has already taken the www.googlehoroscopes.com URL. I hope he makes a ton of money re-directing traffic to Google.

more here from siliconvalley.com here

A couple weeks back a “friend” of mine ( ) tried eHarmony based on a friend’s suggestion and got the following message:

eHarmony is based upon a complex matching system developed through extensive research with married couples. One of the requirements for successful matching is that participants to fall within certain defined profiles. If we find that we will not be able to match a user using these profiles, we feel it is only fair to inform them early in the process.

We are so convinced of the importance of creating compatible matches to help people establish happy, lasting relationships that we sometimes choose not to provide service rather than risk an uncertain match.

Unfortunately, we are not able to make our profiles work for you. Our matching model could not accurately predict with whom you would be best matched. This occurs for about 20% of potential users, so 1 in 5 people simply will not benefit from our service. We hope that you understand, and we regret our inability to provide service for you at this time.

What can I say? These eHarmony guys are simply brilliant. . . they understood that they are a network effects business and as such “nodes” in their network (ie people) must fit an exact profile/segment in order to add value to its network. The wrong people (saying nothing about my friend’s eligibility ) will not only NOT add any value but could potentially SUBTRACT value from its network.

Also, by rejecting people which it doesnt think it can serve efficiently, profitably, or satisfactorily eHarmony is reducing negative word of mouth. Progressive Auto insurance does this by not only sending customer away but to directly a competitor. If it doesnt believe it can produce the lowest insurance quote for that customer, it has the confidence that its competitors will LOSE money serving that particular person.

Furthermore, by simply rejecting a small percentage of applicants, eHarmony can create a falese (?) sense of exclusiveness and furthre reduce churn once an user is acquired. Its an age old technique employed by fraternities and the military to instill a sense of pride and ownerhsip which in turn translates to dedication and committment to the community he/she is finally inducted into.

It takes balls for an internet company to turn away users, but eHarmony is successful for a reason. . .

From MTV . . . Can eBay’s Taylor Tees, Paris Pins Predict ‘Idol’ Winner?

You can sell a house or buy a Paris Hilton Garbage Pail Kids card on eBay — and now you can find out who’s going to win “American Idol.”

OK, so it’s not foolproof, but the auction site seems to have found a semi-accurate formula.

Like DialIdol.com, eBay not only predicted Mandisa’s departure last week, but the entire bottom three.
Using their eBay Marketplace Research program, the company discovered fewer than 10 Mandisa-related items had sold over
the past month, compared to hundreds of items related to other singers.

“We thought it’d be interesting to see if there was any correlation between what people were voting for on ‘American Idol’ and what they were buying on eBay,” eBay spokesperson Dean Jutilla explained. “And what we found was that they directly mirrored each other.”

Well, not exactly (eBay had Elliott Yamin’s and Paris Bennett’s positions in the bottom three flopped), but it’s fascinating nonetheless.

According to eBay’s figures, Taylor Hicks has a strong lead, with 388 items sold, followed by Chris Daughtry (309), Ace Young (224), Kellie Pickler (120), Katharine McPhee (80), Bucky Covington (73), Yamin (23) and Bennett (10). The items range from pre-”Idol” CDs (for Hicks and some of the others) to a variety of homemade T-shirts, pins and even earrings.
“As eBay has gone more mainstream, with hundreds of millions of users, it’s become a real barometer of what’s in the pop culture,” Jutilla said. “It’s like a little stock market, and we’re seeing that with ‘Idol’ right now. Taylor’s stock is really high now, but Katharine may have a really good performance and get more investors next week. You see the market fluctuate.”
eBay Marketplace Research was designed to help businesses and also spits out average selling prices (Taylor is tops again with $19.70), but “Idol” fans are welcome to join the $25-a-month subscription service.

And, of course, research is available far beyond “Idol.” For instance, after Sunday’s Masters golf tournament, eBay sold more than four times the usual Phil Mickelson items, and although he lost, Tiger Woods items still doubled.

After calculating the “Idol” contestant numbers, eBay also tested the popularity of host Ryan Seacrest and the judges. Simon Cowell was at the top with 75 items, followed by Paula Abdul (42), Seacrest (18) and Randy Jackson (six).
Jutilla’s not ready to place bets on Hicks just yet, but he’ll be watching the sales figures closely.

“The question, I guess, is: Is America looking for a whole marketing package?” he said. “I think Americans want to be a part of someone’s career early on. They want to get in on the ground floor, so to speak, thinking they are going to make it big. And that’s what these sales represent.”

Ever wonder how much you should pay yourself or how much equity stake you deserve after getting that shiny new check from your favorite VC? Professor Noam Wasserman of HBS plus a host of consulting firms puts together an survey pretty much every year called Compensation and Entrepreneurship Report in Information Technology. You can find it at www.compstudy.com. Here are some of the interesting parts. . .

Most non-CEO founders end up in “Business Development” which quickly translate to “out of a job” within a year (j/k)

Blue is median, red is mean. Not sure if the number is total founder stake or for a single founder . . . but I’m guessing its a total number but the average # of founder is less than 2 . . .

Dark blue is non-founder, light blue is founder . . . founder equity share does vary with position . . .

The first graph is the average the second graph is founder who also holds the title. . . take away? Dont let VC’s convince you to take more than 15% less cash just because you have more equity . . . get what you deserve at market rate.

Catering the vanities of consumers has always been a tried and trued marketing technique – liquor, luxury goods, automobiles, . . . hell . . . even cigarettes (and airlines!). However, the web had been slow to adopt these techniques until the rise of “web 2.0” companies. A lot has been talked about regarding community contributed content as the bedrock of the web 2.0 ethos. Little, however, has been written about how web 2.0 companies leverages vanity marketing as the feedback loop that creates incentives for increasing community contributions.

In the offline world, vanity marketing does a few things

1) creates a sense of exclusiveness which
a. improves retention
b. enables self segmentation
c. reduces customer acquisition cost
2) Attempts to invert the price elasticity curve which
a. Enable service provider to raise prices
i. Or even better, get users to contribute something valuable for nothing
b. Improves margins
3) Encourages “homogeneity” within the target segment which
a. Creates community and network effects
b. Creates barriers to entry by preventing segment fragmentation
c. Allows tightly targeted messaging and product marketing without undeserving sub segments

In the online world where member to member contact is real-time and intimate, these effects are even more pronounced. Some companies like Myspace are masters at vanity marketing – letting users modify their own profile pages and encouraging “celebrity” profiles (ever heard of Tila Tequila?). Tagworld wasn’t far behind when it promised one of its members their own billboard in LA. Pierre understood this when he realized the eBay feedback score (and ebay star system) is not just about trust and safety BUT also pride and vanity. Yahoo Answers and Korea’s naver.com was successful for that one reason – they allowed heavy contributors a platform to flaunt their expertise and gain standing within the community. Even Pluck’s new BlogBurst leverages (take advantage?) the vanity of bloggers to give their content away for free.

So what do you do if you want to leverage vanity marketing for your own web 2.0 project? Off the top of my head. . .

1) On your homepage prominently feature a few “top users”
2) Enable consumers to customize their presence to show off their tenure
3) Create reputation systems that give graphical prominence to top users
4) In a related point, create “casts” system for your user base
5) Create new functionality and services only for your highest “cast”
a. And a way for the lower cast members to taste these services temporary
6) Create functionalities for users to measure and compare their progress through the cast system
a. Clearly publish metrics with which they can see and act on to improve their standing in the community
7) Allow the maximum possible transparency for member to member communication and interaction
a. Which enables socialization of these vanity norms
8) Create a jargon/language system for your community
9) And lastly, don’t be afraid of kicking out or refusing entry members who does not contribute positively to your network or does not fit your target segment (defined broadly)

Just when I was getting into the daily routines of work, eat, sleep . . . something happened 2 weeks ago and hit the pause button on my life. As sad and troubling the experience was for me, my friends, and those around us . . . I treasured it for giving me perspective on life and especially work. How important is getting those extra engineering resources to build a particular feature versus treasuring life itself, chasing a not a objective but a dream, reaching out to a friend, and holding on to everything that made us who we were . . . ? When everything could end so quickly, the “deferred life plan” doesnt seem so attractive, thoughtful, or “strategic”. How important is the future, when we can loose our past so quickly and easily.

Things change . . . and it changed for the worst for sure but with opportunity for the better . .. and perhaps that trade-off is worth the suffering and pain to get there. So in the end, I want to wish my friend (you know who you are) my support, love, and . . . really. . . my thanks. . . I will always be there for you and lets try to make it a turning point for the both of us . . .