New Capital Connections For Entrepreneurs: Person-to-Person Lending

February 17, 2008

Credit-market carnage makes it all the more important for small businesses to understand the full range of potential sources for capital. A growing alternative to traditional sources: person-to-person lending Web sites.

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Turning Innovation Into Cash

February 17, 2008

Ideas are good, but if they don’t make money, they’re useless. That’s the premise of Payback: Reaping the Rewards of Innovation, by James P. Andrew and Harold L. Sirkin, who have seen the best and worst innovation practices from their perch as senior vice presidents of the Boston Consulting Group. Their new book is a helpful “how-to” for companies looking to refine their innovation process.

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5 Steps To Disruption

February 14, 2008

The concepts of disruptive innovation are powerful tools with which to spot high-potential opportunities. But while many companies come up with innovative ideas, often, nothing happens. Why? Managers returned to their desks, stepped back into the daily grind, and the optimistic feelings generated in the session slowly disappeared or were consumed by near-term priorities. So we developed a simple, five-step process that can help companies go from a desire to disrupt to a funded disruptive business plan in less than 100 days.


Forbes: Eight Trends For A Mobile World

February 14, 2008

A 10-year veteran of Nokia, Lindholm has done stints with its famed user interface group. He also directed Yahoo!’s mobile group from 2005 to 2007. These days, Lindholm heads London-based design consultancy Fjord.

Lindholm recently spoke with about the eight mobile trends he’s identified for 2008.


Microsoft-Yahoo Deal: Link for Feb 14, 2008

February 14, 2008

News and analysis about Microsoft’s bid for Yahoo! from Business Week, New York Times, Market Watch, Forbes, Fortune, ZDnet, wired

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Microsoft-Yahoo deal: links for Feb 13, 2008

February 13, 2008

Updated links relating to Microsoft’s bid for Yahoo! from eweek, zdnet, forbes and fortune.
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Widget Master

November 2, 2007

By Victoria Murphy Barret

RockYou is Silicon Valley’s latest Web sensation. It exists solely thanks to the recent rise in social networking sites. RockYou creates frivolous, mini Web applications that exist on social networking sites such as MySpace and Facebook. RockYou’s popular Superwall, for instance, lets Facebook folks put graffiti–words, photos, videos–on their “walls,” which are public sites where members post messages. Another, called Zombies, encourages people to “bite” friends. Virtually, of course. No joke.

Since RockYou’s founding two years ago, 90 million social networkers have downloaded its applications. For this, RockYou is making more than $100,000 a month in revenues showing ads alongside its mini-applications for brands like AT&T and Sony, as well as by plugging other developers’ mini-apps (for a fee). The pitch to advertisers: We are where the kids hang out. Yet RockYou doesn’t know much else about its customers. Facebook doesn’t share data about members’ ages, locations, education or anything else it might know.

Jia Shen, the 27-year-old co-founder of RockYou, sat down with recently to talk about how to make money selling snack-size software and what Google’s new open platform means for Facebook and MySpace. How did RockYou begin?

Jia Shen: We started two years ago noticing that everyone on MySpace was trying to “bling out” their pages. But there was no easy way to do it. We decided to put together a slide show tool. It took one week to build. I worked while I was on vacation in Japan. In one month, we had 100,000 people using it. Then in three months there were one million.

Impressive growth. But were you making any money?

None. You can’t advertise on MySpace. Facebook changed that. So now we’re like any other Web site: We make money on page views. Sony Pictures wanted to promote the film Resident Evil and used our Zombies application for a sweepstakes event.

We also advertise other applications and take a cut. Yahoo! created an application that lets you post music videos on your Facebook profile page. Yahoo! had 8,000 downloads after one month, which is pretty slow. We started promoting the application in banners above our own applications. In a single day on our network of applications, Yahoo! got 120,000 downloads.

What is your initial reaction to Google’s new open platform for social networks?

We’ve been helping Google for a while on this. In theory, it should be very cool. We tested it out with an application called Emote (This is a collection of happy, sad, flirty smiley faces). Before all these networks required different code, and it took us three days to re-write the same application for Facebook to get it to work on Orkut. With the new standards, it took us just 30 minutes to make the same application work on Plaxo. The real test comes two months from now. How many companies will really give us real estate on their Web sites?

Will Google’s open platform give a boost to less popular social networks like Orkut, Friendster and the Hi5?

Sure, if it yields them more applications, it gives people more reasons to flock to their sites. Web traffic isn’t yet a zero-sum game

Is this bad news for Facebook? Will developers spend less time on Facebook apps?

People are making real money on Facebook. So there’s risk in going elsewhere. Am I really going to spend time going after Orkut’s Brazilian audience? I’m more likely to focus on the U.S. market. Facebook is still growing nicely.

Do you worry that the social networking sites, particularly Facebook, will start launching their own applications and compete with outside developers?

It is always a worry, but something that we’ve lived with since day one. MySpace eventually built a competing slideshow, but we already had big penetration, with a diverse set of widgets. Facebook does do little feature creeps here and there. But everything they’ve done so far has been non-competitive.

What will Microsoft get from its deal with Facebook? (Microsoft announced in October a $240 million investment for a 1.6% stake in Facebook, and is serving ads on the site.)

This isn’t traditional brand advertising. But my belief is that Microsoft didn’t want only access to the ad network. Microsoft wanted to make sure no one else got Facebook. (Google was reportedly bidding.)

What were you doing before RockYou?

I came to Silicon Valley in 2000 after majoring in computer science and electrical engineering at Johns Hopkins. The first start-up I landed at failed in three months, so did the second. I thought I was the kiss of death.

But I have a short attention span, so it was fine by me. This company is changing so much I may as well be working at a different place every three months.


Take That, Facebook!

November 2, 2007

By Wendy Tanaka

Google got back at Facebook on Thursday, announcing that MySpace has joined the growing ranks of social networks that have committed to use its new platform for developers of applications for the sites.

The addition of the News Corp. social network heaps pressure on Facebook–which recently chose Microsoft over Google to be an equity holder in the company–to sign on to the new set of standards, dubbed OpenSocial. With MySpace, developers gain instant access to the world’s largest social network with 115 million users. Facebook, which rolled out its own developer platform last spring, has 51 million users, less than half of MySpace’s members.

At a press conference to announce the partnership, Google and MySpace executives declined to comment on whether Facebook will join OpenSocial. Vic Gundotra, vice president of engineering at Google, assured reporters gathered at the Internet giant’s Mountain View, Calif., headquarters that the company has reached out to every major social network. “We want to see it adopted by everyone,” he said. “We’re not announcing further partnerships now. We anticipate more momentum now.”

MySpace Chief Executive Chris DeWolfe is confident the new platform will “become the de facto standard” for application developers.

Google had been expected to officially announce the OpenSocial platform Thursday, but reports about it surfaced Wednesday.

OpenSocial will allow developers to build tiny applications that can be used across many social networks, boosting traffic and advertising on their sites. Google and MySpace said the main benefit of the platform to developers is that it standardizes how applications are created.

“Not rebuilding and rebuilding on different standards … will be great for developers and end users,” said DeWolfe, who took part in the press conference at Google’s Mountain View, Calif., headquarters. “One of the big trends on the Internet is that users want to consume content when they want it and how they want it.”

Google Chief Executive Eric Schmidt said Google and MySpace have been working together on the platform for more than a year. It had been rumored, however, that MySpace would launch its own developer platform.

Executives declined to comment on how all the companies that have said they will use the standards, which include Friendster, Hi5, LinkedIn and more than a dozen other social networks, will make money from the platform.

At the conference, Joe Kraus of Google’s JotSpot wiki product said applications embedded on MySpace Web pages, for example, will foster “more interaction on MySpace, which means more time spent on the site and more ad revenues.”

Questions about privacy were also raised. Joe Greenstein, chief executive of applications developer Flixster, another partner, said Google doesn’t have access to partners’ user data. “Google is spearheading the initiative, but Google doesn’t touch the data, doesn’t own it.”

Developers were expected to gather at the Googleplex on Thursday night to test their applications on Google’s Orkut social network.

Some of these developers might also be building applications for Facebook. But if Google’s platform is easy to use, these developers might be tempted to pour their hearts and energies into one platform more than another.

Mark Zuckerberg, are you paying attention?


Searching For A Way To The Top

November 1, 2007

By Rachel Rosmarin

You know you’re watching the early days of an industry when entrepreneurs still think they have a chance to be David in a contest with the current Goliath.

In one corner of the search engine business, you have Google with 16,000 employees and a current market valuation of $217 billion. In September, Google conducted 64% of all searches conducted on the Internet in the U.S.

Then there’s tiny Mahalo. Jason McCabe Calacanis is chief executive and founder of the fledgling search engine company, which relies on hand-compiled data. Mahalo has an undisclosed amount of venture capital funding and fewer than 100 human editors who pick and choose what information searchers receive at

Or there’s Yahoo! , a behemoth in its own right but still a distant No. 2 to Google. Not just anybody can enter the search game, asserts Vish Makhijani, Yahoo! senior vice president and general manager of Yahoo! Search. “There’s a scarcity of capital, and of talent,” he says. Yahoo! trails Google by a wide margin, but it’s easy to forget that the company brought in $1.8 billion in its most recent quarter, based largely on search engine advertising.

Makhijani believes that Yahoo! has room to grow in search, but after many months of criticism from Wall Street and consumer defections to Google, he’s reluctant to share many details of Yahoo!’s battle plan, a choice that makes Yahoo!’s public statements a bit hazy and bureaucratic.

Calacanis, by contrast, is dreaming big–and he’s not shy about bragging about it. He thinks his human-powered search engine will be a breath of fresh air to consumers sick of spammy search results offered up by Google and Yahoo!.

“No offense, but those guys in senior vice president positions at big companies don’t have the vision to realize this could be successful,” he says. “They think it can’t be done. That’s what creates a market for delusional people like me.”

Both Yahoo! and Mahalo believe there is more than enough room in search for them to both make a good living. But both companies have a long–and likely impossible–slog ahead of them if they plan to knock out Google’s Goliath.

We asked Makhijani and Calacanis to lay out their vision of the future of search, opinions on Google’s weak spots, the sustainability of search engine advertising, and the chances for tiny search start-ups.

And both men are bold enough to argue why their companies will be the search engine leader in five years.

Forbes: Google is the leader in your industry. But everyone makes mistakes. What is Google’s weakness?

Vish Makhijani: Doing search is hard. It’s billions of documents with a millisecond response time. Only a few companies can do this well. Even throwing tons and tons of money at it, like [Microsoft in] Redmond does, isn’t a formula for doing it well.

But the industry is diverging. The notion of “10 blue links” is going away. If you cover up “Google” or “Yahoo!” on the 10 blue link search-results pages, a user can’t tell the difference between us.

Jason McCabe Calacanis: The people who run Google are very smart, and they hire incredibly smart people. They’ve done a great job building elegantly simple products that users intuitively understand. When a company gets too distanced from its founders, the emphasis on product isn’t there. Yahoo! is going to have a massive resurgence because Jerry Yang is now engaged as CEO.

Google’s greatest weakness will be maintaining focus and retaining their talent. They’ve been so successful that maybe some of those talented people who’ve been there since early on don’t need to work any more.

Yahoo! started as a “human-powered” directory in 1994. Mahalo’s search results are handwritten by people. Will we see a mainstream return to edited search results?

Makhijani: It’s a notion of trust. Jerry and David built the directory, they did all the work. Then comprehensiveness became super-important, but you forsake the trust that a real person said, “We’re going to put this here.” Things are coming full circle, but a “today’s version” of Jerry and David’s directory is not going to fly.

Calacanis: In fairness, all the big guys use human gestures to determine relevance. But they don’t rank the stuff with human input. [Mahalo] will appeal to a certain group of people, and Google’s machine search will appeal to another group of people. There’s a perception in our industry and our business that winner takes all, but the truth is, there’s a lot of fragmentation.

The odds seem slim that either of you will beat Google and become the top search engine within five years. Convince me otherwise.

Makhijani: There’s nothing about search today that locks somebody in as No. 1 for years and years.

We are not the leader, and we’re going to attack and solve as many problems as we can to become the leader. We take tons of chances. We can take an iterative approach to trying new ideas. We are blessed with a really good lab-testing environment. We just launched [search advertising system] Panama, and we take a lot of that revenue and pour it back into [research and development] of our search product. Luckily, search advertising is a great business model to have.

Calacanis: I fully believe we will become one of the top three search engines. More than 1 million people visited us in the last 30 days, and we just launched. People like to surf around a directory–it is discovery. Maybe people stopped doing that on the other search engines because there’s so much spam on those sites. Our site is not really game-able.

I think we can get to that top level, and I wouldn’t be doing this if I didn’t think we could. Google is going to be very hard to displace, but it is still possible. You never know. Google became No. 1 in five years, so why can’t we? It will be a lot of hard work, and it will take five years. In that time we could get double-digit market share.

Is “search engine fatigue” a real problem? It is hard to believe that people give up on what they’re looking for so easily.

Makhijani: When you look at customer satisfaction numbers, they’re high, but if you peel the onion you see a fair amount of lack of success. We see abandoned and failed searches. We see users go check their e-mail instead. They blame themselves for bad queries when they don’t exceed. That’s garbage. There’s opportunity for improvement here.

Calacanis: Search engine fatigue is very real. Almost anything can be found, but you get into a needle in a haystack problem. And now there’s a cottage industry of people who try to intercept you as you search. We’ve done testing in our lab, and all the Mahalo users give up on searches. Some of the problem has to do with the person–it takes two to tango. There are spelling error issues and ambiguity issues. People don’t know enough to type in the words that would help.

Search engine advertising is big business, but it is getting messy. How long can that business model last?

Makhijani: A significant population doesn’t always distinguish when something is advertising or a search result. The notion of trust is super-important, and we take that very seriously. But we continue to deliver value in that advertising as well. The same team of scientists works on the relevancy of ads as on search results. And if you force lower-quality ads, people will choose another search engine. We’ve seen that. Will that business model change over time? Who knows? I see keyword advertising continuing to disrupt legacy advertising, so it will last a long time.

Calacanis: If you’re using machines, they’re going to be game-able. It is like IRS or credit card fraud. Some people will cheat. There are good “search-engine optimization” techniques, but 90% of it is black hat and smarmy. The people who are looking for loopholes and looking for ways to increase their ranking require a policing effort from Google. It is not going to end.

Source: Launches Private Beta, Makes Very Good First Impressions

October 29, 2007

News Corp. and NBC Universal are certainly banking on it.

After seven months of preparations, delays and wisecracks about its quirky name, the two companies are finally lifting the veil Monday on their new Internet video service, Hulu.

Hulu programming will begin appearing Monday at the Web sites of its distribution partners, such as News Corp.’s MySpace, Yahoo!, Time Warner portal AOL, Microsoft site MSN and Comcast.

And, which will have additional features that won’t be available at the partner sites, is launching a private beta test Monday. The beta will start with a few thousand users who register their e-mail addresses at the site and will gradually expand its reach in the coming months.

It’s the latest and most ambitious effort by the television industry to reach viewers online. But in some respects, it’s also the most perplexing.

In addition to distributing content at leading portal sites, Hulu is also establishing a brand-new destination site at – not a simple task in an increasingly crowded online video market. Moreover, it will be competing for traffic with its owners’ other Internet properties, such as and

Finally, Hulu will be run as a joint venture between two hard-nosed competitors, raising inevitable questions about whether or how News Corp. and NBC Universal, which is owned by General Electric, will play nice with each other.

But such concerns don’t appear to bother private-equity firm Providence Equity Partners, which has just invested $100 million in Hulu. And Hulu Chief Executive Jason Kilar, a former senior executive at, downplayed potential worries about the JV dynamic.

“This could not happen without their commitment,” Kilar said. “I feel very proud to say how they’ve come together.”

Hulu provides a vivid illustration of how much TV network attitudes have changed – and not changed – since YouTube crash-landed on the entertainment landscape two years ago.

While the networks were initially hesitant about making their programming available online, Fox, NBC, CBS, Disney’s ABC and Viacom all do so today to varying degrees. Hulu represents the latest step in these efforts.

Hulu and its distribution partners will feature streaming video of full-length prime-time programming and clips from Fox and NBC, as well as content from sibling networks such as Bravo, Sci Fi, FX and Fuel TV and USA Network. CNET, E! Entertainment Television and Sundance Channel will also provide programming.

All Hulu content, including movies, will be viewable free of charge and supported by advertising. Full-length TV shows and movies will open with a “brought to you by” title card that will appear for several seconds. Once the programming gets under way, a banner ad will rest at the top of the screen unless a viewer chooses the full-screen video option. In addition, about two minutes of video advertising will be inserted every 22 minutes or so.Clips and other short-form video will also feature a banner ad at the top of the screen, as well as overlay ads that will periodically appear at the bottom of the screen but won’t interrupt the flow of the programming. The overlay ads can be clicked for more information about the sponsor. will have extra features not initially available at its distribution partners’ sites, including the ability to e-mail links to full episodes and whatever portion of an episode a viewer chooses to share. visitors will also be able to embed full episodes and clips on their own Web sites and blogs. Embedded programming will retain all advertising. It’s a somewhat daring move, given the potential squeamishness that advertisers may feel about where their marketing messages will end up appearing.

All of these features illustrate how eager News Corp. and NBC are to reach viewers online. But in other ways, Hulu also demonstrates the degree to which the companies want to retain control over how consumers view and make use of their content.

For instance, contrary to what News Corp. and NBC indicated when they first announced their plans in March, Hulu won’t enable viewers to create mashups of its programming. Nor will it accept uploads of user-generated videos. Instead, Hulu has assigned part of its team to create clips and video “montages” for users.

Why impose such restrictions? “We’re very focused on premium content,” Hulu’s Kilar said.”We’re not seeking to have a user-generated content service. There are many other services out there. …We want to [break] new ground, as opposed to ground already being served by other companies.”

But shifting more power to consumers has been part of the core appeal of YouTube and other video sites. Differentiation from the competition is fine, but when the competition is eating your lunch in terms of traffic, taking a page from their playbook probably wouldn’t hurt either.


Hulu is still a joint venture exclusively between NBC Universal and News Corporation. It exists as a website through which users can stream a collection of TV shows, movies, and short clips on-demand for free without any limits on how many times you can view each video. Hulu also exists as a distribution network of premium content for several partner websites – AOL, MSN, MySpace, Comcast, and Yahoo – that will display Hulu’s videos for free but in their own branded players. In addition to these partnerships, users themselves form a viral distribution network of sorts since Hulu allows its videos to be embedded in any website and shared via email. Hulu makes money in all cases from advertising, which it displays in and around the videos it serves.

A couple of things that Hulu is not: a repository of user generated content like YouTube or a download service like iTunes Store. All of the video on Hulu is premium content and users don’t have access to any uploading capabilities. TV shows and movies can only be streamed through Hulu or one of its partners’ Flash players, not downloaded to your desktop or portable media player. While it’s understandable that NBC and News Corp. want to focus exclusively on premium content, it’s a shame that we can’t (yet) download videos from Hulu (either in an ad-supported format or for a fee). Perhaps this is something to look for in the future, although company representatives were mum on whether they had plans for it.

As for the content on Hulu, TV shows will come from Fox and NBC, and over fifteen cable channels including Bravo, E!, FX, SciFi, Sundance, and USA. Movies will come from Fox and Universal, and following a deal signed just this Friday, from Sony and MGM as well. Hulu says many of its short clips will come from independent content providers, and it’s also signing licensing deals with others such as Smithsonian and the WWE. Overall, Hulu’s collection is impressive and we can anticipate seeing it grow even more in the coming months. Representatives say that they will listen to consumer demand to determine which shows and movies to add next. Click here to view a full list of the videos currently in Hulu’s collection.

In terms of availability, Hulu as a website will not be available to the public for another few months. Its collection, however, will be rolled out on its partners’ websites over this coming week so we can expect to see most, if not all, of Hulu’s content on AOL, MSN, MySpace, Comcast, and Yahoo very soon. Just when particular videos will be available through Hulu – and how long we can expect them to stay on Hulu – will vary from video to video. However, as a general rule TV shows will be available on Hulu by midnight Hawaii time after they debut on normal television. As another general rule, Hulu will keep distributing TV shows until five weeks of newer episodes have passed, at which point older shows will presumably just disappear from the site.

This is Hulu’s greatest weakness. Try as it might, it has not yet escaped the programming mentality of broadcast television. Hulu still imposes a schedule of sorts on Web viewers, even if that schedule comes with a five-week window of flexibility. But on the Web, five weeks may not be enough. Appointment TV just doesn’t make sense in a medium where time slots are thrown out the window and the available inventory of videos is counted in the millions. Hulu may be limiting its appeal by not keeping all of its videos up indefinitely (who knows when a particular video clip could take off as the next viral hit?). It also will be interesting to see how this limit affects embedded TV shows, which may just stop functioning after too much time. Similarly, movies and short clips will be added and removed from the site in an undisclosed (or uncertain) manner, although Hulu reps say they will try to add movies that are in demand. Hulu will not only have new releases but older movies as well, and only ten movies will be available to start.

Now for the design and features of itself. First of all, the experience is entirely browser-based so there is no software to install beyond Flash player, which you probably already have. Hulu has done a good job keeping the user interface simple and highlighting the actual content of the site. The homepage highlights a given video and lists the most popular episodes, the most popular clips, and recently added videos. You can also search Hulu’s entire collection from the homepage. Other sections of the site list the available episodes for particular shows and let you browse videos by network/studio, alphabetical order, or popularity. On your user profile page, you can create a video playlist and check your viewing history. Both your viewing history and playlist can be shared via RSS which, in addition to user reviews that you can leave at the bottom of video pages, form pretty much the extent to which incorporates social features.

The videos themselves are streamed at either 480kbps or 700kbps depending on your bandwidth, and Hulu is working with Adobe to provide even higher resolutions through Flash Player 9.2 by the end of the year. Hulu’s video player sports all the basic features we see in embeddable players these days: sharing via email, embedding via HTML, video details, full screen, seeking, and volume. It also has buttons with which users can submit feedback directly to Hulu, pop the video out into its own window, darken the rest of the page for better viewing, and vote the video up or down. Perhaps the coolest feature of the player is the ability to select just a segment of the video to share with friends or embed on your website. Embedded videos have fewer features, but users can still share and embed videos that have already been embedded, which should really help to spread Hulu’s videos virally (and make it less popular to embed low-quality versions hosted on YouTube). But, again, if the embedded video expires or is replaced with new content that the embedder did not choose, that could end up backfiring on Hulu.

Finally, some important information about how Hulu plans to advertise. Advertising will be much less intrusive than on actual television. Ads will be served in a variety of ways: banners that display alongside videos, text blurbs that overlay the bottom of videos, and in-video clips that play before, within, and after videos. Shorter videos will tend to have overlays and banner ads, whereas longer videos will tend to play in-video commercials. Hulu says that for longer videos, the total playback time dedicated to advertisements will be drastically lowered, perhaps constituting only 25% of the time you’d spend watching ads on TV. Thus, for every 30 minutes of video, you may only see 2 minutes of ads, whereas on TV you would see 8 minutes. If this is true, then Hulu will certainly be more consumer-friendly than TV. However, that is still probably more commercials than people are used to when watching video on the Web.