Please don't get a 404 error

...as Amazon has been awarded a U.S. patent on how to redirect a user to a more relevant page than a standard 404: page not found page. I imagine that it will likely not be a problem to find prior art and have the patent invalidated.

New personal favorites

I got asked by a friend which Internet services I've started using on a, more or less, daily basis in the last year. A pretty smart way if one want to capture changes in usage behavior. I might have missed some service, but these are the ones I didn't use, or didn't use very often, before 2007.

* Jaiku. I'm hooked on Jyri & co's microblogging service. Posting everything from a Good morning on the way to work to co-ordinating activities with friends. Use of mobile and computer-based web versions.

* Techmeme. A great way to discover the latest chatter in the tech blogosphere.

* Wall Street Journal. Paid for a subscription sometime last year and check the news at least once a day.

* Spotify. 10 years, or so, with Winamp is over. Listening to music = Spotify.

* Gmail. Redirected my @torstensson.com e-mails to Gmail and, naturally, use it a lot, both in a traditional web browser and from my mobile. Honorable mention: Google Calendar.

Witch Internet/web services did you start using daily, or at least several times per week, last year?


Nokia acquires Trolltech for 842 million NOK

Nokia will acquire Norwegian Trolltech, makers of cross-platform development tools, for about 842 million Norwegian kroner (about $150 million). It seems like the 800 pound gorillas of tech decided it was time to snap up Nordic high tech companies a few weeks back, as today's deal follows Microsoft's $1.2 billion acquisition of FAST and Sun's $1 billion acquisition of MySQL.


Who to meet in Los Angeles?

I'm going to Los Angeles in a week. If you can recommend any people to meet, please ping me. Good places to visit in LA are also appreciated.

Meg Whitman to leave eBay

Meg Whitman will leave the role as CEO of eBay on March 31st. Read an interview with her and the new CEO John Donahoe at TechCrunch.

While eBay is not be the hottest Internet company at the moment, it is one of the ten most used web sites overall and has an annual revenue of $7.67 billion. Which puts eBay third in size to only Google and Amazon among the pure-play Internet companies.

WSJ not going free (read: ad supported)

Make it advertising supported! seemed to be obvious (?!) answer in the discussion about online business models last fall. Now it seems like Rupert Murdoch won't make the Wall Street Journal completely advertising supported after all. I'm not that surprised.


Layoffs coming at Yahoo?

It seems like Yahoo, which hasn't really been operating at peak the last few years, will lay off between 1500 and 2500 of its about 12 000 employees at the end of January, if PaidContent's sources are to be believed. At the same time the talk about how Yahoo! could improve its stock performance has increased in, among other places, the Wall Street Journal. Yahoo's stakes in Yahoo Japan, co-owned with Softbank, and Chinese Internet company Alibaba represents almost half the market capitalization of Yahoo.

With regards to the discussion about outsourcing its search engine to Google or Microsoft, there are some strategic issues for Yahoo. Using Google would make Google even more dominant, which could lead to a tricky situation when it is time to renegotiate the deal as there probably would be fewer alternatives to chose from. As for going with Microsoft, apart from a potential big lump of money upfront, there will likely be no improvement in neither search quality nor monetization in the foreseeable future. Which makes a potential switch less interesting.

Slide.com raises another $50 million, valued at $550 million

Slide.com, developer of some of the most popular Facebook applications, has raised another $50 million, putting the valuation of the company at $550 million.

Both the cash put into the company and the valuation are significant as just a few consumer Internet companies have the same or a higher valuation. Proven team, co-founder of Paypal, and popular product goes a long way, even though the actual revenues are not at the level of a $550 million valuation yet. Raising a significant amount of cash at this time, gives Slide flexibility even if the business cycle goes south the next few years.

Wikipedia is 7 years old

On January 15th Wikipedia turned seven years old. In that time, created by unpaid volunteers and with a small budget for operations it has become the 6th largest web site in the world (according to Comscore, December 2007).

Maybe the nature of the Internet changes some of the fundamental assumptions we have about how great works get created and financed? Related is Jonathan Fried's article Välkommen till Internet (Welcome to the Internet) in Fokus.


Sun acquires MySQL for $1 billion

Sun is acquiring Sweden-founded open source database company MySQL. The price: $1 billion. I might have more to say about the deal another day.


Kanal 5 to use VideoPlaza's video ad platform

Kanal 5 will be the first publisher to use VideoPlaza's ad platform to provide overlay video advertising. Ad sales will be done by Kanal 5's current ad sales operation, which apparently has sold out its video inventory the last couple of months. Adding in-video advertising, in addition to pre- and post-rolls, is a way to increase inventory. Hopefully the overlays won't come too often and be reasonably relevant (even though I don't think that the in-video ads are generally going to be more relevant than general ads).

The ad format is similar to some of the tests YouTube have done and to the format Videoegg offers internationally.

What's good about the format is that it is a part of the video, which makes it easier to realize a business model where the video is embedded on other sites than Kanal 5's.

Sorosh writes about the deal on VideoPlaza's blog (in Swedish).

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Product Focus Doesn't Equal User Focus

If I had more time to blog I'd write half as good blog posts as Andrew Chen. :) His latest post on product fanaticism (a.k.a. Steve Jobs and not Jeff Bezos is my hero) is a good read for all Mac loving web elitists.

This post was written on a MacBook in Firefox by a Gmail using web elitist. ;)


Recommended: Sramana Mitra on Strategy

Sramana Mitra on Strategy is a really nice blog with original, quality posts on Internet business, software as a service, media and related sectors. And yes, Sramana has been very kind to Stardoll at times in her blogging.

Opera passing 300 MNOK in revenue in 2007

When I had a quick look at FAST two days ago, I was remembered of the other Norwegian Internet company: browser-maker Opera.

The company is smaller than Fast with a market capitalization of about 1.5 billion NOK. Revenue for the first 9 months of 2007 was 222 MNOK, with a EBITDA margin of 6 %. For the full year it seems like the company will make a small net profit, unless the falling dollar worsens margins.

Opera, like Firefox, has found a way to monetize their 'free' browser. Revenue for the desktop client went from 18 MNOK to 48 MNOK in the first nine months, and growing well over 100 % year-on-year in the third quarter. Worth noticing that growth came both from additional users and growing ARPU (i.e. more money per user).

Still the majority of revenue comes from license sales of Opera's browser for Internet Devices (primarily mobile, from what I understand), which brought in 174 MNOK between January and September of 2007.


Microsoft bids $1.2 billion for FAST enterprise search

Microsoft will very likely acquire Norwegian enterprise search firm FAST for $1.2 billion. I dug a little deeper and found that $1.2 billion is about six times FAST's annual revenue. FAST hasn't, yet, reached the level where revenue translates into big profits, but the company estimated a net margin of about 10 % for 2008 in early December.

Apparently it is likely that Microsoft will integrate FAST's entreprise search into Sharpoint. Worth noticing is that FAST sold its consumer-oriented web search to Overture back in 2003, when the dollar was worth slightly more, for $100 million.

Bill Gates leaving Microsoft video

[via: Morten Lund]

Swedish Digg-clones consolidate, step 1

Swedish Digg-clone Pusha has acquired Swedish Digg-clone Färskpressad. Neither have gained real traction, but hopefully merging can push them closer to critical mass. The next logical step for the combined entity is to merge with Hypa. I don't see room for more than, maximum, one successful Swedish Digg-clone, and creating one I think is really tough. As long as there are several clones, they are likely to hurt each other as everyone have a really hard time reaching critical mass.

If you want to build a service in Swedish, I don't think you should build a niche geek service when there is a really strong competitor in English if it isn't a labor of love.


No crystal ball for 2008

I'm fresh out of a recording session of the podcast What's Next. The show was all about "What is going to happen in 2008?". One of the things I'm not completely at ease with is that I held the directly opposite opinion of Nikolaj Nyholm on one occasion. That is not something a plan making a habit. Even though I think it was called for this time. ;)

Below are my notes on six themes I think will be important in 2008. Not among my notes, even though I think a lot will happen in the area in 2008, is Internet in the pocket, mobile Internet, Internet in the mobile or whatever you choose to name it. Big in early adopter circles, absolutely. But I think it is likely we will be drifting into 2009 before there is a big bang.

- Flash 9 "Moviestar", with H.264 encoding, will make online video more attractive and will lead to publishers stop using WMA/QT and make life really difficult for Joost.
- Better advertising targeting (interest/behavioral/contextual) makes remnant inventory more valuable and adds significant revenue to communities, social networks and other non-premium media. For premium media sites advertising revenue will increase as advertising spending shifts online, but it will be sold based on demographics like in offline media.
- Social Graph turns out to be more buzz than biz in 2008. Facebook will gain no major advertising advantage from knowing who knows who, but will use its internal interest-based targeting advertising system with quite some success.
- Google will still, deservedly, be king.
- Search traffic, Web 2.0 features and web analytics will make non-hyped e-commerce companies increase sales and margins in 2008. I.e. companies will be driven as much by increased 'marketing productivity' as market growth. This is an area where there will be a lot of money.
- Spotify. If Spotify gets the label deals, it is going to be big.

Update Dec 20th 2008: Report card.



Staying with English

For better or worse, I'm making the switch to English permanent and as a result I have translated the fixed texts, primarily the menu, from Swedish to English.


It is simple but not easy

There have been quite some discussion about business models, Twitter's specifically, and value of size (number of users) on the blogs of, among others, Allan Stern, Jason Calacanis and Mathew Ingram. It is the "Dollars always follow eyeballs" mantra of former-former Yahoo CEO Tim Koogle vs "You need to bring in revenue now" mantra of the bust all over again.

The basic business models, or rather revenue models, of Internet companies are pretty simple. Either you finance your business with advertising or you have users pay for your service.

However, in the implementation of a specific business model the devil is in the details.

There are big differences between having a model driven by selling high-CPM advertising to large brand advertisers, a model reliant on primarily low-CPM advertising networks and a model selling highly relevant traffic on a CPC basis.

If you charge your users, do you charge for access or for enhancing the experience? Do you charge an upfront membership fee or have a pay-as-you-go system? How can members pay?

Do you have a pure model with just one of these options or a mixed one bringing in different types of revenue?

A large general or social network-type web site with a pretty standard advertising revenue model (a mix of premium and run of site ads from advertising networks) will likely, in the near-term, bring in about $5-10 per year and unique user once the sales operation is up and running (I looked at Fox Interactive, Yahoo, Viacom and Aftonbladet for a ballpark revenue per user figure).

If you are able to increase the value of your visitors to advertisers, for example by having a lot of search activity or good targeting, you could increase revenue per user significantly.

Given revenue per user of $5-10 for social network-esque sites, building companies worth hundreds of millions of dollars, which is what most venture capitalists are aiming for, with less than 5-10 million users is really difficult. Thus the talk about getting to scale before finding the specific implementation of a business model.

If you haven't seeked VC financing, having a site, driven by non-paid for traffic, with a few hundred thousand to a couple of millions users bringing in anything near 10 dollars per user would, of course, make a really nice business.


Happy New Year

I hope everyone will have a great 2008.