2009-04-29

On a lighter note, but the blog really is good

If his blog posts are anything to go by, it is soon going to be pretty obvious who is the smarter Stockholm-based guy at Good Old. On a related note, Happy Birthday Björn! :)

2009-04-26

Twitter truly entering the big leagues

In February I wrote that "If one believes the numbers, the real action currently is with Facebook and not with Twitter." After that comment traffic to Twitter.com has exploded growing about 100 % per month in February and March resulting in 19.1 million unique visitors to the site in March. The numbers now say that there is a lot of real action with Twitter as well.

If you're using Twitter, feel free to follow me twitter.com/henrikt.

"You really seem to like your blog"

"You really seem to like your blog", a good friend told me today. I do like my blog and even though there are periods of time when I don't blog very much, I keep coming back to the blog (the result is almost 3000 posts in seven years). The two big reasons I keep on blogging are 1) the luxury, and following mental calmness for the lack of a better way to describe it, of putting my thought on pixels and 2) that blogging is a way to meet people with similar interests.

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How to stay effective and creative?

Dolly Parton's 9 To 5 is playing on Spotify, which is almost a bit spooky as I'm going to write a little about working hours. Working nine to five usually isn't enough when you are building a company. However, it is important not to always work, work, work all day and half the night on daily operations as that will make you less effective and creative.

Finnish serial entrepreneur Taneli Tikka on "lifestyle business bullshit". "Also; great ideas, innovation and valuable views are often born from the grey areas in between and from cross-disciplinary space. And they are born from sleeping well; having your brain in shape and in an alert state to be creative, freely associating (combining seemingly random things), and open minded. You can't have any of this if you are too busy putting in long hours to your operations."

A similar tune to the Van Gogh quote on what it takes to produce good work: "you have to eat well, be well housed, have a screw from time to time, smoke your pipe and drink your coffee in peace."

What are your favorite ways to stay creative and effective even when there are lots of stuff to do and taking a six month sabbatical or a week off in the Alps is not an option?

Nothing should become too big to fail

In what now feels like waaaay back in the summer of 2007 I read Nassim Nicholas Talebs books Fooled by Randomness och The Black Swan. Given the meltdown of the global financial system since, Nassim's 10 Ten principles for a Black Swan-proof world published in the Financial Times is a good read when looking forward to a new regulatory system. Click through to read the entire piece, three of the principles below.

1. What is fragile should break early while it is still small. Nothing should ever become too big to fail.
2. No socialisation of losses and privatisation of gains. Whatever may need to be bailed out should be nationalised; whatever does not need a bail-out should be free, small and risk-bearing.
5. Counter-balance complexity with simplicity. Complexity from globalisation and highly networked economic life needs to be countered by simplicity in financial products. The complex economy is already a form of leverage: the leverage of efficiency. Such systems survive thanks to slack and redundancy; adding debt produces wild and dangerous gyrations and leaves no room for error. Capitalism cannot avoid fads and bubbles: equity bubbles (as in 2000) have proved to be mild; debt bubbles are vicious.

When the VCs make a killing

As Geocities will be closed later this year, Fred Wilson looks back at his fund investment in Geocities. A very good read on how a venture investment in a company can play out. The comments, 91 at the time of me writing this, are a good read too.

2009-04-22

The three habits of highly effective pirates



Matt Mason's keynote on The Pirate's Dilemma. Good video that gives context to former News Corp COO Peter Chermin's comment that piracy is a business and not a legal problem.

Two takeaways:

The three habits of highly effective pirates

- Pirates look for gaps outside the market
- Create a vehicle/medium that is sending a message to people
- Harness the power of the audience and get a society behind them (get a debate going on what's right and wrong)

The combination of The Pirate Bay, Piratbyrån and Piratpartiet is probably the example of highly effective pirates.

Business responses to piracy

- Fight when pirates are not adding value (pirate goods hurt consumers, like poisonous food, toothpaste, toys etc)
- Compete with when pirates are adding value (piracy is a signal of market demand) or when obscurity is a threat ("Obscurity is a far greater threat to authors and creative artists than piracy.")

2009-04-20

Oracle to acquire Sun - WTF!

Oracle is to acquire Sun for $5.6 billion, net of cash and debt. GigaOM has a longer analysis. As a smart guy I know said when he heard the news: WTF!

Personally I'm really surprised, as I saw Oracle as a software/services company and not a hardware company. Either IBM or Cisco would have made more sense to me. And as for most people running a big site on LAMP, the first question was: What will happen to MySQL?

On another note, Oracle paid 3.6 % of Sun's highest ever market capitalization (reached in September 2000).

2009-04-19

Editors to Google: It is your fault! But the editors are wrong

I don't understand why editors of serious newspapers cannot stand news aggregators in general and Google News in particular. Two examples: 1) Today's editorial in Dagens Nyheter by Peter Wolodarski. 2) Kauppalehti's Editor-in-Chief Hannu Leinonen focusing the interview of Petri Kokko, Head of Google Finland, at SIME Helsinki last fall on Google News.

For whatever it's worth, Google News is not the interesting thing about Google and is not the reason newspapers make less money on a competitive Internet than they did 25 years ago with local newspaper monopolies.

On the web you want to be linked to as links bring traffic, and traffic is the foundation for advertising revenue. Using a sentence or two to describe something when linking to it is not an evil form of parasitism, but rather a symbiotic relationship more akin to mycorrhiza.

The Pirate Bay operators sentenced (a note to myself)

As a note to myself, as I guess no-one has missed it, this Friday The Pirate Bay founders were found guilty of assisting copyright infringement and each sentenced to 1 year in jail and ordered to collectively pay $3.6 million in damages.

Google Q1: Printing money, but feels the recession

Google's first quarter report showed a few different things:

* $5.51 billion in revenue. 6 % growth year-on-year and a decrease of 3 % from Q4 2008, the first ever quarter-on-quarter decrease
* Net profit of $1.42 billion (25.7 %) and free cash flow $1.99 billion
* Goolge is obviously highly profitable and one of the best businesses around today, but Google's profits have been depressed by a lot of initiatives in the last few years so cost-cutting is a good (and effective) way for the company to improve its margins in the short-run
* The economy is impacting Google, resulting in the first ever quarter-on-quarter revenue decline and the average cost-per-click declining 9.4 % (17 % more clicks for a 6 % increase in revenue)

Business models for consumer web sites

Very nice summary of the three main revenue models for consumer web sites and what drives each model. Each model is pretty hard to do well, not only the third.

Laserlike: Microeconomics of the Consumer Web. "If you are working on a revenue model for an online business, you either need to:

(1) have a very high quality segmented audience that fits traditional brand advertising buying patterns; this usually requires cultivating content, which is hard to scale but is a known quantity by ad buyers

(2) develop the capacity to generate massive quantities of leads at a very low cost; the "next Google" will likely fit this model

(3) charge customers directly through subscriptions or virtual transactions; this is very hard to do as consumers so easily substitute one product for another (leading to a very steep demand curve in most markets)"

2009-04-15

Soundcloud raises 2.5 million euro

TechCrunch: SoundCloud Raises ?2.5 Million For Professional Music Collaboration Hub.

Massive congrats to Eric, Alex and several other friends who have their fingerprints all over Soundcloud. You rock!

Update: Tomas Wennström of What's Next has an interview, in Swedish, with Eric Wahlforss of SoundCloud.

2009-04-14

Skype to IPO in 2010

Ebay will spin out Skype and Skype will go public in 2010. With expected revenues of more than $1 billion in 2011 and segment margins (don't know if that's operating or EBITDA) of 21 %, going public could turn out to be a pretty smart move for Skype. Skype certainly has the size to be public and a huge market that allows for double-digit growth for years to come.

Press release.

eBay Inc. Announces Plan for 2010 Initial Public Offering of Skype

SAN JOSE ? April 14, 2009 ? eBay Inc. (Nasdaq: EBAY) today announced that it plans to separate Skype from the company, beginning with an initial public offering that is intended to be completed in the first half of 2010. Specific timing of the IPO will be based on market conditions. "Skype is a great stand-alone business with strong fundamentals and accelerating momentum," said eBay Inc.'s President and CEO, John Donahoe. "But it's clear that Skype has limited synergies with eBay and PayPal. We believe operating Skype as a stand-alone publicly traded company is the best path for maximizing its potential. This will give Skype the focus and resources required to continue its growth and effectively compete in online voice and video communications. In addition, separating Skype will allow eBay to focus entirely on our two core growth engines?e-commerce and online payments?and deliver long-term value to our stockholders."

The decision to separate Skype is based on a timeline outlined by Donahoe when he became eBay's CEO in April 2008. At the time, the company said it would spend a year evaluating Skype and its potential synergies within the eBay Inc. portfolio before making any decisions about Skype's future. Donahoe also installed a new management team at Skype led by Josh Silverman, which has driven stronger momentum and improved performance. In 2008, Skype generated revenues of $551 million, up 44 percent from 2007, and segment margins of approximately 21 percent. Registered users reached 405 million by the end of 2008, up 47 percent from 2007, and user metrics improved significantly throughout the year. The company recently announced that it expects Skype to top $1 billion in revenue in 2011, nearly doubling 2008 revenues.

"Under the leadership of Josh Silverman and his management team, Skype has become a stronger business in the past year, and I expect it will be even stronger a year from now," Donahoe said. "Skype has accelerating global user growth and strong fundamentals, diversified revenue streams and is competitively positioned in a large market. We expect Josh and his team to continue delivering results as we prepare Skype for an IPO."

Most recently, the release of the Skype for iPhone application has generated a great response. More than one million people downloaded Skype for iPhone in the first 36 hours after it became available?and Skype immediately became the No. 1 downloaded free iPhone application in more than 40 markets, including the U.S., UK and Japan. In just over a week, downloads passed the two million mark, putting Skype on more than 6 percent of all iPhones and iPod Touch ? and adding almost half a million new Skype users.

About eBay Inc.
Founded in 1995, eBay Inc. connects hundreds of millions of people around the world every day, empowering them to explore new opportunities and innovate together. eBay Inc. does this by providing the Internet platforms of choice for global commerce, payments and communications. Since its inception, eBay Inc. has expanded to include some of the strongest brands in the world, including eBay, PayPal, Skype, StubHub, Shopping.com, and others. eBay Inc. is headquartered in San Jose, California.

About Skype
Skype is software that enables the world's conversations. Millions of individuals and businesses use Skype to make free video and voice calls, send instant messages and share files with other Skype users. Everyday, people everywhere also use Skype to make low-cost calls to landlines and mobiles.

Skype is an eBay company (NASDAQ: EBAY).

Access to a broadband internet connection is required. Skype is not a replacement for your traditional telephone service and cannot be used for emergency calling.

Skype, associated trademarks and logos and the "S" symbol are trademarks of Skype Limited.

Forward-Looking Statements and Other Matters
This press release contains forward-looking statements relating to the planned initial public offering of Skype and its future performance that are based on our current expectations, forecasts and assumptions. These forward-looking statements include statements regarding the planned IPO, the anticipated continuation of Skype's growth, Skype's anticipated effective competition in its markets, and Skype's anticipated future revenues and other elements of financial and business performance. These forward-looking statements involve risks and uncertainties, and actual results could differ materially from those projected in the forward-looking statements as a result of certain risk factors, including but not limited to: the impact of the credit crisis, economic downturn and other changes in political, business and economic conditions; the regulatory, intellectual property, competitive and other risks specific to Skype; the inability to manage successfully and complete the IPO, including the ability to retain and attract key employees, the risk that the IPO of Skype may not occur in its expected timeframe or at all, and other events and other important factors disclosed previously and from time to time in eBay's filings with the U.S. Securities and Exchange Commission. eBay disclaims any obligation to update any such forward-looking statements after the date of this release.

A registration statement relating to the common shares to be sold in the contemplated Skype initial public offering is expected to be filed with the Securities and Exchange Commission but has not been filed or become effective. The common shares may not be sold and offers may not be accepted prior to the time the registration statement becomes effective. This release does not constitute an offer to sell or the solicitation of any offer to buy, and there shall not be any sale of the common shares in any state in which such offer, solicitation or sale would be unlawful prior the registration or qualification under the securities laws of any such state.

Media Contact:
Alan Marks
eBay, Inc.
408.376.7458

Advertsing and virtual goods

Some articles that caught my eye among all the blog posts in my RSS-reader in the last week or two.

Futuristic Play: Stealing MySpace. Andrew Chen is back as the greatest tech blogger. Must read for anyone who wants to talk about advertising on social networks like Facebook and Twitter. Good comment on search monetization in the comments, as well.

Plus Eight Star: Virtual goods in Asia: it?s even more than you think! (25 times USA?) "We?ll try and clarify what is actually going on in Asia with virtual goods, and how we evaluated the market at 5 billion USD". Advertising is a big revenue opportunity in the western world, but there is a lot of money in figuring out how to get paid by users. Trying to get paid for access to commodity information is not a good strategy.

Futuristic Play: Will social payment platforms really work long-term? (Guest post by Jay Weintraub). "The not so eloquent answer as to why they won't die comes from the world the world they mirror at some level - the good ol' incentive promotion space. It is an industry that just won't die, and it continues to morph as the audience and traffic sources change. If it can survive, how is it that the offer platforms, with their much higher intent, would not?"

Lightspeed Venture Partners: More ad networks or less? "One trend reversal we saw was in the concentration of spend amongst the top five ad networks dropping to 62% from 76% in 2007. A few things contributed to this change in direction. The first is a rise in spend outside the U.S. and the development of branded networks such as Forbes, Turner Entertainment and Fox Audience Network, and the move of many premium advertisers away from general networks. Additionally, the rise of specialty vertical networks like the community sites BuzzLogic, Six Apart, Lotame and BlogHer has further fragmented this category and put a refocus on testing the emergent opportunities." Big publishers are smart to build their own ad networks (if they chose to sell low-priced ads that get little value-add through targeting).

Bronte Media: Newspapers: A Failure of Ambition."The newspapers missed the boat on eBay. They missed the boat in not becoming more aggressive in online classifieds in all categories. They missed the boat in trying to create Wikipedia-like resources on everything in the local community. They missed the boat on creating Citysearch/Yelp/Zagat for their local markets. This missed the boat in going deeper on coverage and stats on things like local sports. And so on and so forth.

In each case, the company lacked ambition or desire despite having huge profit margins to help them experiment and enter those markets. And it's not even as if they recognized they lacked ambition and paid out huge dividends to share holders. No instead they built skyscrapers and largely acquired other companies just like themselves. They quite simply lacked ambition."

New York Times: Consumer Spending: Look Out Below. Great chart on how borrowing against one's house drove U.S. consumption growth a lot 2000-2007.

2009-04-13

Vecka.nu meets SMHI

I really like Tomas and Axel Wennström's new weather site Vackert Väder. In Hollywood pitching lingo: "Vecka.nu meets SMHI".

Some of the things I find they do very well:

* Focus. It is all about the weather.
* Customization. Using geo-IP data to make an educated guess and customize the service for each user.
* Simplicity (the weather today on the first screen) combined with depth (the weather for more than 25,000 places for up to ten days)

Come to think about it, focus, customization, simplicity and depth are four character traits many good web sites share.

2009-04-08

SvD.se shows how video blogging should be done

I like Utvecklingsbloggen's video interviews with people in the Swedish Internet and online media scene. Good stuff and if you like this blog you should head over.

A couple of things that a publisher can learn from Utvecklingsbloggen and apply to other niches:

* Production can be, relatively, cheap (Pelle is a one-man show doing the interviews). Quite similar to blogging.
* Being interesting beats production values. By keeping the format simple, filming the person being interviewed, the production value is still good enough.
* Video can be used to differentiate a blog and improve the experience. In the case of Utvecklingsbloggen video makes the person being interviewed come alive.
* Parts of the interviews are transcribed in the blog post in addition to the video content. Gives context to the user and text for search engines.


Topplistan med Kristin Heinonen from Pelle Sten on Vimeo.