2008-02-19

Investor invests 47 MSEK in Keybroker

Investor Growth Capital has invested 47 million SEK in Swedish search marketing firm Keybroker. The funds are to be used for funding growth, technology development and European expansion.

2008-02-18

Stardoll ego-blogging

New York Times wrote an article about Stardoll in its Sunday magazine today (it looks better in the paper magazine than online, though). The article gives a good overview of Stardoll. As a result of the New York Times article Mashable, once again, wrote some friendly words about us a Mark Evans wrote that he might have been wrong about calling Index Ventures investment in Stardoll "the sign of the Web 2.0 apocalypse".

2008-02-16

Going to San Francisco

I'm going to be in San Francisco early next week for the Game Developers Conference (leaving noon on Wedensday). If you are going to GDC or are in San Francisco and want to meet up, e-mail (henrik@torstensson.com) or call me (+46-708-105742).

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2008-02-11

Kevin Kelly on Better than free

Kevin Kelly:"When copies are free, you need to sell things which can not be copied."

1. Immediacy
2. Personalization
3. Interpretation
4. Authenticity
5. Accessibility
6. Embodiment
7. Patronage
8. Findability

"These eight qualities require a new skill set. Success in the free-copy world is not derived from the skills of distribution since the Great Copy Machine in the Sky takes care of that. Nor are legal skills surrounding Intellectual Property and Copyright very useful anymore. Nor are the skills of hoarding and scarcity. Rather, these new eight generatives demand an understanding of how abundance breeds a sharing mindset, how generosity is a business model, how vital it has become to cultivate and nurture qualities that can't be replicated with a click of the mouse."

Does advertising scale?

Google = search a.k.a. direct marketing for the web a.k.a. Yellow Pages 2.0. Amazon = retail. Ebay = transaction fees. Paypal = transaction fees. InteractiveCorp = retail/memberships/Yellow Pages 2.0. Yahoo = advertising/Yellow Pages 2.0. AOL = advertising/Yellow Pages 2.0/subscriptions (ISP). MSN = advertising/subscriptions (ISP).

I just cannot fully let go that advertising, in the traditional media sense a.k.a. not direct marketing, doesn't seem to be the dominant business model among the big, revenue-wise, Internet companies.

Social networks and advertising revenue

Despite all the talk about how better advertising-targeting will improve the economics of online publishers, advertising networks and experience of users, reality that it still much talk (some of it by me) and little to show for. Some datapoints:

* Social network Tagged allegedly makes about $600 000 on a billion pageviews per month from search and banner networks. That is about $0.6 CPM. It makes Tagged profitable, but not many web sites have a billion page views per month. Unless your site offers significantly more targeted traffic than a general social network, you are unlikely to make much money from AdSense or advertising networks. You should figure out a direct sales/branded advertising strategy for your site.

* Google pointed out in their latest earning call that they have problems with (improving) monetization of social network inventory.

* MySpace still says its Hyper-Targeting program is improving the rates the site can charge. "What is an issue - making sure that MySpace's hyper-targeting system, designed to match up advertisers with users based on profile data, continues to work. News Corp. continues to boast that advertisers who use the system have seen click-through rates increase up to 300%; yesterday they also said that they've been able to raise rates for those ads by up to 50%, and that advertisers who use the system spend twice as much on the site."

If there is a point with this post, I think it is this: It is hard to make much money on a social site if the majority of your sales is handled by an advertising network (even if that network is Google). There is quite a bit of work being done in improving the relevancy of advertisements shown to individul users and thus, in the end, the revenue for the social network. However, the code hasn't been cracked and shown to scale for advertisers. Today's and future's realities are two very different things.

Four posts that might be of interest

I cleaned out the posts marked "Keep new" in Bloglines. Quite a few of them went into my del.icio.us account, but a few I think are worth highlighting in this post.

Andrew Chen's post on MySpace's development as a platform ended with a highly interesting observation: "It strikes me that there are many situations in which companies are being treated like platforms, but don't realize that's what they are. And as a result, they end up being very aggressive against developers when in fact they should probably be embracing them and trying to figure out the next generation of their business."

Umair argues that Google has it in its DNA to reinvent brand advertising, Jerry Neumann doesn't agree. A good description of the differences between sales and brand advertising. If your company's revenue is driven by advertising, you should read the post.

Silicon Alley Insider thinks Microsoft has misread the situation when it believes it has to be in online advertising. "Corporations are shifting to cloud-computing platforms--Software as a Service vendors like Salesforce.com and NetSuite, Google Apps, etc--but, for the most part, they are not shifting to "free software supported by advertising." On the contrary, they continue to pay fat, per-employee license fees. Even some corporations running Google Apps pay license fees. The fees are lower than the per-seat costs charged by Microsoft, but they're in the same same ballpark (according to the NYT, big companies pay about $75 per Office seat per year vs. $50 for Google Apps)."

The media agencies are accumulating a lot of data on online usage. Good read in Fortune on GroupM's Irwin Gotlieb.

2008-02-09

Swedish OpenSocial developers?

Are there any Swedes developing for OpenSocial out there? Please leave a comment or send me an e-mail.

2008-02-07

Lunarstorm and Bilddagboken for sale

LunarWorks, the owner of popular Swedish youth sites like Lunarstorm (community) and Bilddagboken (photo-sharing), is for sale, according to Dagens Nyheter. With an assumed asking price of about ?55 million, there are not that many acquirers with both an interest in the Swedish/Nordic market and the financial strength to make it happen.

Jaycut has raised venture capital

Update: I've now learnt that this is not true. Jaycut has apparently raised some angel financing from London-based investors, but not a formal venture capital round.

According to an article in Ekonominyheterna, Swedish-based online video editing service Jaycut has raised capital from a undisclosed British venture capital firm.

Skype developers invest in Kindo

Kindo, a site where people can build their family trees, has raised additional capital from Ambient Sound Investment, the investment vehicle of some of the original Skype developers. The Skype connections to Kindo are several, Kindo co-founder Nils Hammar worked at Skype as product manager and former Skype VP Marketing Saul Klein has previously invested in Kindo.

The size of ASI's investment hasn't been disclosed, but I would guess it is between 0.5 and 2 million euros. Geni, a U.S. based competitor to Kindo, raised $10 million on a valuation of $100 million in early 2007.

Nils Hammar has written more about the funding on Kindo's blog.

2008-02-05

Corporate affairs and community communications

A week or so ago Etsy, the place to sell and buy handmade things, accepted an additional investment of $27 million from Union Square Ventures, Hubert Burda Media and Accel Partners. If you work with a community-driven web site you can probably learn something from how Etsy communicated the news to its community. It likely won't work perfectly, but to me it seems like an honest attempt to give the community insight into the development of the company. One of the soft factors of running a community site.

Dancing Ballmer meets iPod

2008-02-01

Microsoft bids $44.6 billion for Yahoo

Microsoft wants to acquire Yahoo for $44.6 billion. Huge deal if it goes through. One little thing in Microsoft's letter to Yahoo's board: "Our proposal is not subject to any financing condition."