Web Trends

Top 10 Semantic Web Products of 2009

2009-12-02T20:56:00.001-08:00

2009 has seen a lot of Semantic Web and structured data activity. Much of it has been driven by Linked Data, a W3C project which gained momentum this year. According to Sir Tim Berners-Lee, the inventor of the Web, Linked Data is a sea change akin to the invention of the WWW itself. We've gone from a Web of documents to a Web of data.

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Google Acquires Teracent: Wants to Offer Smarter Display Ads

2009-11-23T21:04:00.001-08:00

Google just announced that it has acquired Teracent, a display ad company that specializes in creating customized display ads in real-time based on machine-learning algorithms. While regular display ads always look the same for every user, Teracent's ads are automatically created from multiple creative elements and can change according to factors like geographic location and language, as well as the content of the website, time of day, and the past performance of different ads. As Andy Beal describes it, this is basically "multi-variate testing for your banner ads."

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Pearltrees: A Design Interface for Remapping the Web

2009-11-17T19:34:00.001-08:00

It's rare to look at a bookmarking tool and feel convinced that it's going to win a design award. Pearltrees is such a product. The French site offers us a new way to explore and contextualize the web. In what looks like a mind map structure, users collect "pearls" (links to articles, videos and web pages) and drag and drop them to form a body of knowledge that folds and expands upon itself. In an interview with Pearltrees CEO Patrice Lamothe, ReadWriteWeb found that company already has a loyal user base including our friends at ReadWriteFrance.

Said Lamothe, "We wanted a type of game play that was playful to use and map the web...and the fact that you can group and ungroup content easily means that you can re-catalogue it and keep it current."

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AdMob Is “Approaching A $100 Million” Revenue Run-Rate. Google Thinks It Can Be Billions.

2009-11-09T20:49:00.001-08:00

When Google CEO Eric Schmidt mentioned a few weeks ago that the M&A spigot is now back on at the search giant, he wasn’t talking about a trickle. Today’s announced deal to by mobile ad startup AdMob for $750 million is Google’s largest acquisition since its $3.1 billion purchase of DoubleClick in March, 2008, and its third-largest ever after the $1.65 billion YouTube acquisition in 2006.

Why such a big bet? Because Google is gunning hard to dominate mobile Web advertising and AdMob has an early foothold in the display side. By focusing on the needs of mobile app developers, AdMob has “built what is approaching a $100 million business in three years,” says Jim Goetz, the partner at Sequoia Capital who sits on AdMob’s board, referring to the annualized revenue run-rate of the company. Since AdMob splits its revenues 60/40 with publishers, that implies AdMob is on course to see $40 million of that $100 million gross. The company is also cash-flow positive, with 140 employees.

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Not Playing Around. EA Buys Playfish For $300 Million, Plus a $100 Million Earnout.

2009-11-09T20:47:00.001-08:00

After lengthy negotiations, Electronic Arts closed it’s anticipated acquisition of social gaming startup Playfish for $275 million in cash. An additional $25 million in stock will be set aside for retaining the top talent at the startup, and another $100 million in earnouts are part of the deal as well if the business hits certain milestones. So the total value of the deal could amount to as much as $400 million when all is said and done. Although, earnouts have a tendency to come up short (see Skype).

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Noticings: Geotagging Photo Game Powered by Flickr API

2009-11-08T18:54:00.001-08:00

One app we didn't find - and one that brilliantly appropriates the Flickr API in a delightful, infectious user experience - is Noticings. Part game, part geotagging app, part photoblog, Noticings asks users to upload geotagged photos of interesting artifacts to Flickr. Users tag the photos "noticings;" those photos are then imported, analyzed, and scored, with extra points being awarded for those who post every day in a given week, who post photos of lost objects, or who post the first pic from a certain neighborhood. It is, as the site states, "a game of noticing the world around you."

"Many of us are moving so fast through the urban landscape we don't take in the things around us," the site reads.

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Myth: Entrepreneurship Will Make You Rich

2009-10-18T20:33:00.001-07:00

One of the unfortunate side effects of all the publicity and hype surrounding startups is the idea that entrepreneurship is a guaranteed path to fame and riches. It isn’t. Building a startup is incredibly hard, stressful, chaotic and –- more often than not –- results in failure. That doesn’t mean it’s not a worthwhile thing to do, just that it’s not a good way to make money.

A more rational career path for money-making is one that rewards effort, in the form of promotions, increased security, salary and status. Startups, unfortunately, punish effort that doesn’t yield results. In fact, the biggest source of waste in a startup is building something nobody wants. While in an academic R&D lab, creation for creation’s sake will often get you praise, in a startup, it will often put you out of business.

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YouTube Integrates Promoted Videos With AdWords, Launches Them Abroad

2009-10-15T10:33:00.001-07:00

As the most popular video site on the planet, YouTube has a lot of content to present to users at any given time (the site says that 20 hours of footage are uploaded every minute). That poses a challenge to premium content owners and other content creators looking to attract attention, which is why YouTube also offers a premium ‘Promoted Videos’ feature that lets you pay to expose your video to other users. And today, it’s making it easier to launch a Promoted Video campaign: users will now be able to manage their Promoted Videos directly from the AdWords platform.

The news comes soon after a number of other significant improvements to the Promoted Videos program, which has seen a 500% increase in clicks since the beginning of the year. In August, YouTube began integrating ads for Promoted Video directly into the site’s ‘Watch’ page (before that they would appear in search results, but not where users actually viewed content). And earlier this month the site began allowing the sponsored videos to appear in AdSense units across the web, where they compete in standard ad auctions. All of this is part of YouTube’s push to monetize the site, and to make it more appealing to its growing list of premium content providers.

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Half as many clickers in 2009 vs 2007

2009-10-12T12:50:00.001-07:00

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The Evolution Of Click Fraud: Massive Chinese Operation DormRing1 Uncovered

2009-10-12T12:16:00.001-07:00

Anchor Intelligence identified a click fraud ring being run out of China which involved 200,000 different IP addresses and racked up more than $3 million worth of fraudulent clicks across 2,000 advertisers in a two-week period. That money was never paid out and the ring has now dissipated (or moved onto another scam), but who knows how long the ring was in operation before Anchor noticed. The operation was called DormRing1 because it was centered in dorms at technical universities in China such as the Shanghai Technology Institute.

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Web Ads Hidden Under Cloak of Invisibility

2009-10-12T11:18:00.001-07:00

Kraft Foods, Greyhound Lines and Capital One Financial have bought some strange ads on the Internet lately. What's so strange about them is that they're invisible.

The companies might not have known about their invisible display ads—the kind that are supposed to appear alongside content on Web pages—if not for Ben Edelman, an assistant professor at Harvard Business School who studies Internet advertising.

Mr. Edelman says his research shows that all three marketers, and many others, have fallen victim to Web sites that use such ads as a way to sell more ad space than they have.

The Web sites can get away with it, he says, because online advertisers don't always audit their campaigns for proof their ads are appearing. It isn't clear how common these ads are or how much they cost marketers.

Verifying that ads appear is an issue that has long plagued traditional media, particularly commercials on local TV stations. But a single online ad campaign can appear on thousands of Web sites, making verification even harder.

Advertisers often buy display ads based on the number of times they are loaded onto a page, rather than the number of clicks they get. Over the past, year, an increasing number of scams have sought to take advantage of that pricing system as advertisers have started buying more of their online ads via middlemen called ad networks, instead of directly from the Web sites themselves. These networks sell ad space at cheap rates across thousands of sites, and they don't always weed out illegitimate players.

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Everything You Wanted To Know About Startup Building But Were Afraid To Ask

2009-10-08T20:52:00.001-07:00

Let’s say you have an idea for a startup. How do you begin the process of finding cofounders and employees, creating a corporation, handing investors, growing the company, etc.? There are lots of details about building a startyp that are usually a mystery to the newly initiated founder. Usually you have to learn this stuff on the job, making mistakes along the way.

But not anymore. Last night I saw a 45 minute presentation by Mint CEO Aaron Patzer at a startup competition event called Juice Pitcher on the Microsoft campus. The event, which is put on by TheFunded and Vator.tv, put a handful of new startups on stage to show their stuff and compete for a top prize. Between pitches, Patzer took the stage and told the story of Mint, in detail. His company just sold for $170 million to Intuit.

Patzer takes the audience (and now you) from the beginning of Mint, and gives some incredibly useful device. He talks about the early days of Mint, where he lived on $30,000/yr and hired engineers at just a little more salary by offering them significant equity. He also says that, as a rule of thumb, every engineer in a pre-revenue startup adds $500,000 in valuation. Every business guy lowers the valuation by $250,000, he half jokingly quipped. In its earliest days, Mint was burning $150,000/year, he says, for 2 founders and 1 engineer/contractor.

Patzer also spoke about financial modeling, keeping costs low throughout the life cycle of the company, and Mint’s revenue model. He also gives suggested goals and milestones for each successive funding round. One interesting fact – today Mint, which is free, generates $30/year/user from various offers and value added services.

There are lots of additional details, including, for example, various hidden costs in financings (mostly legal).

If you are a startup founder, you’ll want to bookmark this and refer back to it. It’s absolute gold.

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Uncovering Connections on Twitter Could Become Big Business

2009-10-07T14:36:00.001-07:00

f there's a hard-to-reach person you want to meet, one of the best ways to do so is through their friends. That's true in the offline world and the increasingly social nature of the internet may make discovery of the social circles of key influencers a powerful business practice online.

A new class of tools intended to surface influencers and the people they are influenced by are focusing on a hub of rapid, connected conversation that's wide open for analysis - Twitter. Could analysis of individual behavior on Twitter become a valuable tool for business development and marketing? A growing number of startup companies are making a case that it could.

Last week Twitter announced that it will soon allow users to create lists of friends that they can share with others. It's an attempt to make user discovery easier and it's cute, but it looks pretty rudimentary at a time when some companies are building enterprise-scale software for real-time discovery and analysis of circles of Twitter users, their expertise, influence and sentiment on topics.

On the margins of the developing Twitter-as-business tool ecosystem are startups building light-weight influencer discovery and analysis tools. Two of the most interesting yet have launched in the last 24 hours, in fact.

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Mobile Advertising Is Shaping Up To Be All Search

2009-10-07T13:41:00.001-07:00

WIth the rise of Web phones like the iPhone, Android, Blackberry, and Palm (Verizon’s CEO says that 40% of its new phone sales are such smartphones), mobile advertising promises to be a huge growth area. The Kelsey Group, a market research firm, projects that the mobile advertising market will balloon from $160 million in 2008 to $3.1 billion in 2013.

Of course, that is just an educated guess which will turn out wrong. But there is no doubt that mobile advertising will be much bigger in four years, perhaps even ten to 20 times bigger than it is today. Where will all of that mobile ad money go to? Here I think the Kelsey group is more on target. It projects that mobile search will go from 24 percent of the total mobile ad market last year to 73 percent of the much larger pie in 2013, according to a recent research note put out by Citi analyst Mark Mahaney, which is where I’m getting all of these numbers.

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On the Internet, Everyone's a Critic But They're Not Very Critical

2009-10-05T22:32:00.001-07:00

Average Review Is 4.3 Out of Five Stars; Jerkface Fights Back and Gets Bounced

Mr. Luster is part of a movement on the Web that's taking aim at 4.3, a figure reported as the average by companies like Bazaarvoice Inc., which provides review software used by nearly 600 sites. Amazon.com Inc. says its average is similar.
Many companies have noticed serious grade inflation. Google Inc.'s YouTube says the videos on its site average 4.6 stars, because viewers use five-star ratings to "give props" to video makers. Buzzillions.com, which aggregates reviews from 3,000 sites, has tracked millions of reviews and has spotted particular exuberance for products such as printer paper (average: 4.4 stars), boots (4.4) and dog food (4.7).

Culture may play a role in the positivism: Ratings in the U.K. average an even higher 4.4, reports Bazaarvoice. But the largest contributor may be human nature. Marketing research firm Keller Fay Group surveys 100 consumers each week to ask them about what products they mentioned to friends in conversation. "There is an urban myth that people are far more likely to express negatives than positives," says Ed Keller, the company's chief executive. But on average, he finds that 65% of the word-of-mouth reviews are positive and only 8% are negative.

The vast majority of reviewers on Amazon "are a bunch of brown-nosing cheerleaders," says Mr. Schenker, who reviews under pseudonyms including Jerkface. "In an online store selling millions of items, there's bound to be many, many awful ones," he says.

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U.S. Internet Ad Revenues Decline 5.3% In First Half 2009

2009-10-05T16:04:00.001-07:00

The IAB and PricewaterhouseCoopers released U.S. Internet advertising stats today for the first half of 2009. The tally – $10.9 billion total, a 5.3% decline from the same period in 2008. This is in line with the 3.4 decline in worldwide ad revenues among four largest Web companies during the same period.

Search continues to take nearly half of all Internet advertising, with 47% of the total ($5.1 billion). Display ads, classified listings, lead generation and email took 34%, 10%, 7% and 1%, respectively. Search took just 44% of total advertising revenue in the first half of 2008.

Digital video jumped from 3% to 4% of the total in the first half of 2009, to $477 million.

2008 was the peak year so far for Internet advertising in the U.S., with $23.4 billion in total revenues. That’s up from just $6 billion in 2002.

Retail advertisers represented the largest category of spending, at 20%. Telecom (16%), Leisure Travel (6%), Financial Services (12%), Automotive (11%), Computing (10%), Consumer Packaged Goods/Food Products (6%), Entertainment (4%) and Media (4%) made up most of the rest.

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AOL, Yahoo Face Off to Impress Madison Avenue

2009-09-24T18:36:00.001-07:00

The rivalry between AOL and Yahoo is on prominent display this week, as the two struggling Internet companies compete for advertising dollars on Madison Avenue.

They are pouring on the glitz as they vie for the attention of
thousands of ad-industry professionals at the Advertising Week
conference in New York.

Marketers typically don't negotiate specific deals to buy ad space
or time during the annual event. But media companies use it to tout
themselves to the many ad agencies and advertisers in attendance,
including Coca-Cola, Procter & Gamble, Verizon Communications, Bank of America and MasterCard Worldwide. The aim is to establish relationships and secure business down the road.

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Facebook Sets Deal to Provide Ad Data to Nielsen

2009-09-22T18:31:00.001-07:00

acebook Inc. plans to announce a deal with online measurement
company Nielsen Co., in a step to address advertisers' frustration with
measuring how ads perform on the social network.

Facebook will provide that data, including responses from those who
didn't see an ad, to Nielsen, which will package it for advertisers,
say the companies.

Facebook Chief Operating Officer Sheryl Sandberg is planning to
introduce the product, called Nielsen Brand Lift, in a keynote address
at an advertising conference Tuesday and to pitch it to marketers this
week in New York.

Facebook had a 9.1% share of display-ad views in the U.S. in July,
up from 6.8% in January, according to comScore Inc. That put it in
second place behind Yahoo and ahead of Microsoft Corp. and Time Warner Inc.'s AOL, comScore said.

The number of advertisers using Facebook's online system has also
tripled to tens of thousands in the past year, according to the
company. Advertisers say they are often spending more than $1 million
on campaigns on the Web site

In recent months, the site has launched new ad formats that prompt
people to take an action -- such as a forthcoming ad that allows people
to sign up to receive a free sample of what's being advertised.

It has also overhauled a tool that allows brands to build pages to
communicate with their fans and has rolled out a targeted-ad feature
that gives advertisers more control and guarantees over who sees their
ads.

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Case Study of Contexa at ReadWriteWeb: Context Improves CTR

2009-09-21T22:37:00.001-07:00

The preliminary aggregated statistics of the six participating
sponsors (excluding Hakia), covering a 40-day period, demonstrate that
the Contexa system has met ReadWriteWeb's objectives:

The Contexa system increased ad clicks by 14% (i.e. advertiser received, on average, 14% more ad clicks).
The click-through rate (CTR) for Contexa was more than twice that of ReadWriteWeb's 125 x 125 banner ads.

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Pricing Tensions Shake Up Web Display-Ad Market

2009-09-21T22:35:00.001-07:00

The market for online display ads -- those with text and pictures that
border a Web page -- has dwindled amid the ad recession to an estimated
$20.8 billion in 2009 from $23 billion in 2008

Some big Internet companies, such as Google, Microsoft and Time Warner's
AOL and Yahoo, are looking to profit from the discord. They are trying
to cut out the ad networks altogether by developing ad exchanges, which
allow advertisers to bid directly on the ad space available on a large
group of Web sites. Google unveiled its ad exchange Friday.

"Advertising networks are big aggregators. We have to emphasize that
we are premium," says Nada Stirratt, executive vice president of
digital ad sales for Viacom's MTV Networks. "We produce original content and attract fans, not just fly-by-night users."

In a bid to appeal more to advertisers and visitors, Web sites have
added pages of news or entertainment during the current downturn,
expanding their ad space and thus their reliance on ad networks.

At the same time, many big advertisers, eager to save money, have
shifted more online business to the networks. Ford now buys about 40%
of its display ads through ad networks, up from about 5% three years
ago, in part because it is "more efficient," says Scott Kelly, Ford's
digital marketing manager.

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The Dirty Little Secret About the "Wisdom of the Crowds" - There is No Crowd

2009-09-17T13:40:00.001-07:00

Recent research by Carnegie Mellon University (CMU) professor Vassilis
Kostakos pokes a big hole in the prevailing wisdom that the "wisdom of
crowds" is a trustworthy force on today's web. His research focused on
studying the voting patterns across several sites featuring
user-generated reviews including Amazon, IMDb, and BookCrossing.
The findings showed that a small group of users accounted for a large
number of ratings. In other words, as many have already begun to
suspect, small but powerful groups can easily distort what the "crowd"
really thinks, leading online reviews to often end up appearing
extremely positive or extremely negative.

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The Dirty Little Secret About the "Wisdom of the Crowds" - There is No Crowd

2009-09-17T10:41:00.001-07:00

5to1 Lets Publishers Regain Control Over Unsold Ad Inventory

2009-09-15T13:49:00.001-07:00

5to1, a startup with a high-profile founding team that includes former Fox Interactive execs Jim Heckman and Ross Levinsohn, has raised $4.5 million
in seed funding to work on a solution that can turn remnant advertising
into premium advertising. The company’s breaking out of stealth mode
today at TechCrunch50 with a service that could rid both publishers and advertisers of the extremely ineffective ad campaigns that are basically only beneficial to the networks selling them.

The 5to1 system allows publishers to get in between the remnant
networks and the ad inventory to give them more control over what will
appear on the site, where and when. The company’s founder and CEO Jim
Heckman dubs it a “Match.com meets iTunes for advertising” because it
allows publishers to dynamically create ‘playlists’ of ad units of
sorts and easily run both proper ads and potentially placeable remnant
ads on variable places on their website(s).

Ultimately, the goal is to make it easier for content publishers to
increase the quality of – and with it, the revenue that comes from –
the ads that appear on unsold inventory without too much hassle. And if
it takes off we’ll see a lot less of these horrible screaming ads that
you’d never click on even if they held you at gunpoint.

Q – Paul Graham: Humans can only do worse than the best optimization, right?

A: Pages are dynamic. What we found is that a vast majority of ads are not contextual, and we can fix that.

DataXu Optimizes Ad Bidding, Buying Across Exchange Platforms In Real-Time

2009-09-15T13:42:00.001-07:00

The DataXu platform values, bid manages and buys ads on an
impression-by-impression basis, across the major ad exchanges and based
on smart algorithms. The platform is said to be capable of processing
hundreds of thousands of “ad decisions” a second, each returned in
under 100 milliseconds, through automated, campaign-specific algorithms.

Expert panel Q&A:

Q – Marissa Mayer: On a technology level, it looks impressive. My questions is: are you targetting people?

Ad buyers can build their own data profiles, so you can tweak it to
fit your core audience. The Internet is becoming more dynamic, and what
we’re doing fundamentally is make decisions quickly, change campaigns
in real-time and learn from past behavior.

Q – Paul Graham: What’s the rocket science behind it, the core engine?

A: Our system is designed to find the features that matters for
brand, really custom. Advertising is not a one-size-fits-all, you need
dynamic, intelligent algorithms.

Q – Tony Hsieh: We’ve dealt with third-party pixels at Zappos, and it causes problems. How do you deal with that?

A: As soon as we can tie data together, we can work, so it doesn’t have to be pixel ads.

Q – Marc Andreessen: What’s your sales model?

A: we can paid on a CPM basis, like an ad server, but a percentage on the lift.

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The Internet Is Killing Itself Softly With Remnant Ads

2009-09-15T13:22:00.001-07:00

Ross Levinhson: AT Fox Sports, 70% of the inventory
was sold. If we sold out all the remaining inventory, I think in 2003,
it meant only $250,000 in revenues. We made a determination that a
quarter of a million dollars at that time wasn’t worth the hassle of
policing it.

On MySpace, we had to create scarcity where there was no scarcity.
So we had the homepage, ad networks were arbitraging. Tom shut that
down, no more ad networks on that inventory. If you have a site like
Hi5 or MySpace or Facebook, creating billions of impressions a month,
you have to find a way to create some scarce inventory so you can talk
to the Best Buys. They don’t want to be next to [remnant ads]

In many ways I think the Internet has killed itself to a degree
because there was a notion that I will just add another page without
maximizing the premium spots.

Video

The Value of TechCrunch50: Mint Acquired by Intuit for $170m Two Years After Winning TC40

2009-09-14T19:10:00.001-07:00

Our technology was all open source, and essentially all free: MySQL
at the bottom, Hibernate to avoid the need to hire a DBA, Tomcat on
Apache, Yahoo’s YUI served as the base for our AJAXy goodness.

We didn’t have money for a lawyer, but no fewer than three offered
to help us incorporate and accrue $25k in legal fees for a little bit
of the company. We shared office space in a type of incubator, renting
by the cube to avoid a long-term lease.

We didn’t have money for advertising, so we started a blog. We
didn’t have money for writers, so most of our original blog content
then was guest posts from other personal finance blogs, plus a couple
of columns on people’s worst financial disasters.

To build demand, we started asking for email addresses for our alpha
9 months in advance of launch. Then when we had too many people sign
up, we asked people to put a little badge that said “I want Mint” on
their blogs to get priority access. We got free advertising and 600
link backs which raised our SEO juice.

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Mobile data show friend networks

2009-08-22T20:19:00.001-07:00

Friendships can be inferred with 95% accuracy from call records and the proximity of users, says a new report.

Researchers fitted 94 mobiles in the US with logging software to gather data.

The
results also showed that those with friends near work were happier,
while those who called friends while at work were less satisfied.

The
data, published in Proceedings of the National Academy of Sciences,
showed a marked contrast with answers reported by the users themselves.

"We gave out a set of phones that were installed
with a piece of 'uber-spyware'," said the study's lead author Nathan
Eagle, now at the Santa Fe Institute.

"It's invisible to the
user but logs everything: communication, users' locations, people's
proximity by doing continuous Bluetooth scans."

The researchers
then compared the data with results from standard surveys given to the
mobile users - and found, as the social sciences have found time and
again, that people reported different behaviour than the mobile data
revealed.

"What we found was that people's responses were wildly inaccurate," Dr Eagle told BBC News.

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Brazil’s boo-box Aims to Customize Online Ads

2009-08-11T20:57:00.001-07:00

Some $65 billion in advertising is expected to disappear from traditional media outlets in 2009, according to a recent report from Outsell Inc.,
a media research and advisory company. Companies will instead focus
their investments on their own web sites and other forms of online
marketing, where they can make a direct connection with consumers.
While for publishers, this is just the latest dark forecast, for boo-box, a Sao Paulo-based online ad startup looking to break into the North American market, it represents a possible point of entry.

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Kontera Raises $15.5M For Annoying In-Text Advertising Technology

2009-07-26T11:42:00.001-07:00

In-text advertising technology provider Kontera has raised $15.5 million from its current investors Sequoia Capital, Carmel Ventures and Tenaya Capital, the former venture capital arm of Lehman Brothers. This is the second Israeli startup to announce multi-million VC rounds today after 5min informed the public about its $7.5 million Series B round, and once again first reported by business news site Globes.

Kontera provides publishers with real-time semantic analysis
technology that can enhance content and other information to
dynamically link terms that most accurately represent and predict
user-intent and engagement. This is known as in-text advertising,
and you might recognize the double-underlined words on some sites that
make display ads pop up when you hover your mouse over them. Other
market players include Vibrant Media and Infolinks.

Personally, I find this type of contextual advertising annoying from
a reader perspective, and I don’t think I’ve ever clicked on any ads
launched by in-text advertisements, unless it was by accident. But I
keep hearing from publishers and advertisers who have implemented
campaigns using in-text advertising that it’s actually a highly
effective way of pay-per-click promotion, and you wouldn’t be the first
to tell they were skeptical at first but lauding the technology
afterwards.

With the fresh injection, the total amount of capital pumped into the company has now reached $32.8 million. The $10.3 million Series B round now dates back nearly two years.

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Image Licensing Network GumGum Grabs $2.6 Million And Is Growing Fast

2009-07-08T22:38:00.001-07:00

Image licensing network GumGum has raised $2.6 million in and extended Series A funding round led by GRP Venture Partners with First Round Capital participating. This brings GumGum’s total funding to close to $4 million.

GumGum has been seeing fast growth since its launch
last year. Measured as an advertising network (but for images), GumGum
became a Quantcast Top 100 site, reaching 13.7 million people in the
U.S. and 23.5 million worldwide in February. Currently, GumGum reaches
29.8 million people in the U.S. and 50 million people worldwide,
according to Quantcast’s lastest stats. More than 2,000 Web publishers
license images through GumGum, which allows them to pay based on how
many people see the image or use them for free with embedded
advertising.

GumGum current clients include B5Media, gossip site DailyFill, Glam Media,
MTV, TMZ, New York Post and Gawker. Sites contract directly with photo
agencies, and GumGum keeps track of who is using what images and how
many times they are viewed. That is what those Quantcast numbers are
counting, thus GumGum acts like an ad network for images. GumGum’s
founder Ophir Tanz
says the new round of funding will be used to develop additional
solutions around image licensing as well as drive new revenue
opportunities to publishing partners.

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Quantcast Shakes Up Ad-Targeting Model

2009-07-07T08:08:00.001-07:00

In 2006, it started out by offering a free service that allowed Web
publishers to track the types of people visiting their sites through
software code it placed on the sites.

The service put Quantcast in competition with Nielsen and comScore,
which track audiences based on the Web-surfing behaviors of panels of
Internet users, among other methods.

Now Quantcast plans to translate the technology it has installed on
more than 10 million Web sites into revenue. Its new media-buying
service, known as Quantcast Media Program, begins by allowing
advertisers to create a detailed profile of the types of people they
want to reach. Then Quantcast finds Web sites using its measurement
technology that are attracting those types of people. It takes a cut of
the revenue from the resulting ads sold by the Web sites.

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Advertising During The Simpsons More Expensive on Hulu than TV

2009-06-25T15:29:00.001-07:00

We'll laugh at this headline in the not so distant future, but for
the first time, buying a 30-second ad during a Fox broadcast of The Simpsons costs less than buying the same ad on Hulu.

Television broadcast ads during The Simpsons cost $20-$40 per thousand viewers. On the web, the rate jumps to $60.

Shows like The Simpsons and CSI are now commanding
higher ad rates on Hulu and TV.com than on television. It's a byproduct
viewers being twice as likely to recall web ads than TV ads, according
to Neilsen. (Which I would argue is a byproduct of Hulu showing us far
fewer ads.)

But before we all declare TV dead, remember that Hulu has only 37
seconds of ads per "30-minute" show while a Fox broadcast includes a
whopping 9 minutes of sales pitches. So there's still technically more
money in TV, which will change as soon as Hulu begins cramming 9
minutes of ads into each program.

Article Link

Opportunities For Entrepreneurs, New Venture Intermediaries

2009-06-21T19:49:00.001-07:00

If AdSense is in decline, that leaves open a big market for
entrepreneurs. Publishing is not a winner-take-all market. Google will
not control all online inventory. Advertisers and their agencies like
choice. And users click on whatever is relevant.

We see two plays in this environment:

Match relevance. Match relevance means parsing
content to deliver more relevant ads. This is easy to say and hard to
do. A lot of smart semantic tech ventures are focusing on this problem.
This is smarter use of search technology than Quixotic tilting at
Google's search bar dominance.
Connecting CPM to CPA. This is another hard
problem to solve but promises a huge payoff for the winner. Publishers
like selling CPM (cost per mille): it is easy for them, and the burden
of performing lies with the advertiser. Advertisers, on the other hand,
like CPA (cost per action or acquisition): it is easy for them,
and the burden of performing lies with the publisher. Both parties look
at the CPC (cost per click), because that is trackable from both sides
of the transaction. But CPC is just a proxy for what each really wants:
CPM and CPA, respectively. Any venture that brings publishers and
advertisers together with a deal that satisfies the needs of both will
do very well. There is a huge opportunity here. High-quality websites
that really engage with their audience will certainly do well by CPA
metrics, but the solution will have to be really easy to implement.

Article link

The State of the Market in Semantic Technologies

2009-06-16T14:44:00.001-07:00

Tools

Semantic data mgmt
Semantic data generation
Databases
Integration and workflow

Tague said that tools are important, particularly in the enterprise.
He sounded a note of caution to tools vendors: they need to simplify
their stories, along with have "simple basic tools."

Social

Semantics-powered link sharing
Network mining
News sharing
Tweet mining

Tague said that we shouldn't focus on providing "frosting" on top of
current social Web tools. He advised to focus on commercial
imperatives, such as the categories above.

Advertising

Semantic ad placement
Contextual ad placement
Semantically driven landing pages
Mashup ads

There are clearly opportunities to improve advertising using semantic technology, said Tague.

Search

Tague noted that semantic search may be "the answer to the question
nobody is asking." He said that we should look at general "semantic
search" vs domain specific semantically-enhanced search. The latter is
where the commercial opportunity actually is, but he questioned the
economics of general semantic search.

Publishing

He put this into 3 sub-categories:

A-Content Producers - from back office to user experience
B-Editorial + Aggregation Publishing Models
C-Robotic publishing - aggregation only

Tague explained that Calais has really focused on this over the last
8-9 months. He said that classic publishers can get an enormous amount
of value from this. Right now the big focus is "back in the bolier
room," for example to cut editors from 3 to 2. He expects that later on
more focus will go on enhancing the user experience.

Tague thinks that B is the biggest opportunity, using Huffington
Post as an example. He said that it gives a "near newspaper like
experience" at perhaps a 5th of the cost. It's an area where they're
seeing adoption of Calais.

Interface

Tague noted that gaming is a huge industry that the semantic technology industry can learn from. He listed these attributes:

Great story line
High interactivity, immediate responsiveness
No interuptions
Graphically engaging
Seamless
Fun

So he asked who out there is trying to really change the user
experience in semantic technology? He listed 4 companies (all of whom
we've profiled on ReadWriteWeb):

Zemanta
Apture
Feedly
Glue

Tague told the audience that the next big innovation in interface
will be something that stays with the user where they are, which will
be mobile and in the browser.

Article Link

Report on Mobile Web Use Displays Apple/Android Usability Issues, Successes

2009-06-06T21:36:00.001-07:00

According to the Admob release, "While Gartner estimated global
smartphone sales represented 12 percent of total device sales in 2008,
35 percent of AdMob's worldwide ad requests in April 2009 came from
smartphones. This means that smartphones accounted for nearly three
times more usage than their relative market share." This might seem a
bit of a no-brainer; mobile web browsing on traditional handsets is
nothing short of torture and leaves the user less in the mood for
checking out ads and more in the mood for bloodsport.

Article Link

Mobile Ad Spending to Grow to $5.7 Billion

2009-06-03T14:19:00.001-07:00

Advertising budgets for spending on mobile channels will hit $5.7 billion by 2014, according to UK-based market research firm Juniper Research. That will be just 1.5 percent of global ad spend, the firm predicts. Still, it looks like a good enough opportunity for Google and upstarts such as AdMob.

Article Link

Reid Hoffman: My Rule of Three for Investing

2009-04-20T09:51:00.001-07:00

1. How will you reach a massive audience?

In real estate the wisdom says “location, location, location.” In
consumer Internet, think “distribution, distribution, distribution.”
Thousands of products launch every month on hundreds of thousands of
new Web pages. How does a company rise above the noise to attract
massive discovery and adoption? YouTube did it through existing
channels like MySpace, which already reached millions. Yelp had strong
SEO, which found them a mass audience searching for restaurants and
nightlife. Facebook’s University-centric approach landed them 80%
adoption across a campus within 60 days of launch. Every Net
entrepreneur should answer these questions: How do we get to one
million users? Then how do we get to 10 million users? Then how will
you get deep engagement by your users.

2. What is your unique value proposition?

The Internet space is crowded. A product needs to be sufficiently
innovative to distinguish itself from the pack, but not so forward
thinking as to alienate the user. Many entrepreneurs create incremental
improvements on existing products. This can be big – Google
revolutionized search when AOL and Yahoo! were presumed to have it
locked up – but more often, the pitch sounds like, “It’s a dating site,
but for senior citizens…” I want to see innovation that is
categorically distinct from existing propositions. Digg lets users
decide which headlines are newsworthy. Last.fm tracks music listening
with an iTunes plugin and buffer great music discovery. Flickr enables
users to share and tag photos in new ways.

3. Will your business be capital efficient?

This may be the most important of the three. Even if you have a mass
audience and unique value prop, a business fails without cash flow. An
initial round of financing is important, but how reliable is later
financing? Will investors see the right elements in the next stage?
Your product must scale intelligently – this is why I like software. A
well-coded site can adapt to mass demand without its capital
expenditures scaling out of control. A product like TypePad can grow to
10 million users without half the growing pains of a service like
WebVan, the Web 1.0 startup that attempted to deliver groceries to
users’ doorsteps. Try reaching Facebook scale with a service like that.

With these three elements in place – mass audience, unique value,
stable funding – a startup has time to discover where it can make
money. Few business plans ever pan out like their owners intend. PayPal
started as a plan to beam payments between Palm Pilots. Google raised
funds with a vision to capitalize on enterprise search and ended up in
advertising. The formula is to build an audience with a great product –
then secure enough funding to figure out how to make it pay.

Since I’m focused on building LinkedIn, I’m not currently investing
in new projects, but I firmly believe now is the time to take smart
risks as entrepreneurs and investors. I hope these criteria help
startups make better pitches as they fundraise, and maybe even
encourage others to take the plunge. Good ideas need good strategy to
realize their potential, and if these criteria help a few more
companies find capital, it’s a win for everyone.

Article Link

ouTube Quietly Rolls Out AdSense For Video To Claimed Copyrighted Content

2009-04-09T06:43:00.001-07:00

Article link

Tags Is The Organization Tool For Mac Users Who Have Obsessive Compulsive Disorder

2009-03-23T09:07:00.001-07:00

Tagging can be the super-organizers dream tool. Apple application developer, Gravity Applications, recently launched a tagging software, Tags,
that allows Mac users to tag all their files, including emails,
bookmarks, pictures and files. The tags allow users to assign keywords
for files, grouping many different files that have something in common.
The tagging feature also allows you to apply many different types of
tags to a single file or apply the same tag to multiple files, giving
the user a little more flexibility than just the file/folder system.
The software costs $29 but you can set up a 30-day free trial to see if
the application works for you.

Article Link

Twine Could Soon Surpass Delicious, Prepares Ontology Authoring Tool

2009-03-17T06:39:00.001-07:00

Nova Spivack's semantic web company Twine
is developing a free service to write and host semantic ontologies; the
classification trees that enable machines to put concepts in topical
context. Ready to play Aristotle and create an ontology of cheese,
model airplanes, global anti-hunger organizations or any other topic?

What blogging was to publishing, a simple tool that made far more
people able to participate, Twine's new ontology writing and hosting
service could be to the act of teaching machines about new topics.

The company wouldn't let
us publish the new service's name but says it is aiming for a launch
date this year, as soon as a go-to-market strategy and appropriate
partnerships are lined up. The ontologies created won't only work on
Twine; they will be referenceable by semantic apps anywhere around the
web.

Article Link

GumGum Wants To Turn Celebrity Pics Into Shopping Sprees With ShopThisLook

2009-03-17T02:26:00.001-07:00

Image licensing startup GumGum
is introducing a new ad unit to go along with all of those celebrity
pics that it helps to distribute. Next time you come across a paparazzi
shot of Lindsay Lohan
on the Web, you might see a ShopThisLook badge next to the image
courtesy of GumGum. Click on the badge and window will pop up with
shopping links for clothes and accessories similar to what Lohan is
wearing in the picture. When possible, GumGum tries to match the exact
same pair of jeans, dress, or shirt.

GumGum tracks images that reach 25 million people a month across the
Web. It has data on which images are spread around and viewed the most.
Using a combination of image recognition technology and human editors,
it adds tags to the most popular celebrity photos. These tags then
trigger cost-per-click (CPC) links with images from Shopzilla and Shopstyle.
There is a lot of human editing that goes into this process. Image
recognition techniques are simply not good enough yet to completely
automate the process. But all GumGum has to do is tag the most widely
distributed images of the most popular celebrities to see if the
concept has legs.

Websites that license images through GumGum can either pay for them
or use them free with advertising. The ShopThisLook badges will appear
in place of the ads for certain images. Website publishers who pay for
the images can also opt in to show the badges, in which case they will
receive 30 percent of any CPC revenues.

GumGum CEO Ophir Tanz says that in early testing, the badges are
clicked on about one percent of the time, but that the click-through
rate to an actual item after that is 29 percent. That implies a blended
click-through rate of 0.29 percent, and the effective CPM is 90 cents.
These numbers are based on a limited sample, and before any effort to
optimize them.

(Read our previous coverage of GumGum here and here).

Article Link

he Semantic Web: A Treasure Trove for Marketers

2009-03-15T09:51:00.001-07:00

Natural-Language Search

Consumer-generated content gives companies an opportunity to
understand their customers' concerns and conversations. Yet because so
much content is out there, companies need filters to find the most
relevant conversations. Natural-language processing can provide this
function by automatically summarizing online content for useful
analysis by filtering compiled conversations.

Content Enhancement

While natural-language search helps companies interpret data and see
deeper into the trends in the conversations of their customers and
prospects, think of content enhancement as a way for companies to make
their existing content more valuable. As "social marketing" -- or the
practice of deeply engaging customers through content and social tools
-- becomes increasingly important, so too is finding ways of giving
that content life and context.

Article Link

The Semantic Web: A Treasure Trove for Marketers

2009-03-12T09:51:00.001-07:00

Two technologies in
particular (natural-language search and content enhancement) promise to
bring companies much closer to their customers and deliver to consumers
more relevant content than ever before.

Semantic technology enables consumers and companies to find
information that is difficult to discover using traditional search
technology. Companies can use the results of this technology to improve
their marketing intelligence and provide more relevant content to their
customers.

With the cost of monitoring and providing relevant value to consumers lowered, the stage is now set for the development
of semantic technology: building out a customer engagement
infrastructure. Technology for finding relevant data may still be new,
but the deployment of semantic technology is giving a boost to the next
stage of development for mapping the engagement workflow to customers,
in which opportunities that appear on the web are brought to people who
can take advantage of them, whether marketers or consumers.

In essence, semantic technology will help marketers listen easily to
the increasing volume of content, sort through the clutter, and find
what's relevant to companies and consumers.

Article Link

Online Ads: Even the Evangelists Turning Bearish

2009-02-26T08:43:00.001-08:00

A lot of people criticize newspapers for just putting their stories
online, the same way they’d dummy them up on the printed page, rather
than really utilizing the two-way medium. I think you could argue the
same about the way many sites think about display ads. Too often it
seems a cat and mouse game where I’m chasing an ad around a page
looking for the close button so I can read some content. Sure, maybe I
look at your message more than I would in a banner. But it’s also
annoyed me enough that I will never buy your product. In many cases,
even a back-to-basics approach works better, as I wrote about in my
BusinessWeek column today that highlights some of the shockingly high CPM rates that un-high-tech email newsletters are getting.

Like so many things in the recession, it’s ultimately a good sign
that marketers are panicked. We might actually see some innovation here.

Article Link

Paid Search Just Got Visual: SearchMe Launches AdView Beta (Free Ads For First 500 Signups)

2009-02-24T18:23:00.001-08:00

What happens when you make paid search ads both relevant and visual? Searchme,
the search engine startup which presents results as a stack of
full-page previews that you can flip through, is hoping to find out
with the beta launch of AdView. Its first foray into advertising,
AdView is SearchMe’s version of AdWords, except that instead of selling
of paid text links it will be interspersing into its results clickable
previews of entire Webpages, videos, or other visual advertising.

Article Link

GumGum Adds B5Media, DailyFill To Its Image-Licensing Network

2009-02-23T23:10:00.001-08:00

Image-licensing network GumGum is growing by leaps and bounds. Measured as an advertising network, it is now a Quantcast Top 100 site,
reaching 13.7 million people in the U.S. and 23.5 million worldwide.
More than 1,000 Web publishers are licensing images through GumGum,
which allows them to pay based on how many people see the image or use
them for free with embedded advertising.

Today, GumGum is adding blog network B5Media and gossip site DailyFill to its customer list. They join Glam Media, MTV, and Gawker. Sites that rely on celebrity pics particularly like GumGum’s model.

Sites contract directly with photo agencies, and GumGum keeps track
of who is using what images and how many times they are viewed. That is
what those Quantcast numbers are counting, thus GumGum acts like an ad
network for images. Typical CPMs (cost per thousand views) are $0.15 -
$1.00 per image for sites that opt to pay instead of accepting ads in
their images. This kind of licensing model makes much more sense on the
Web, where small sites want the same quality images as large sites but
don’t have the resources to pay the same rates.

Article Link

Tagging The Real World: Sekai Camera For The iPhone Is Alive And Very Cool

2009-02-19T08:24:00.001-08:00

A total of 52 companies launched at last year’s TechCrunch50 conference. Five of them got jury selection prizes, there was one big winner and a very special crowd pleaser: Japan-based Tonchidot’s Sekai Camera, an iPhone app that presents tagged information in the form of a graphical layer over images in the iPhone camera.

Charismatic CEO Takahito Iguchi delivered a memorable demonstration,
making the audience go crazy by fending off questions of TC50 judges
such as Tim O’Reilly if Sekai Camera really works with the words “Join
us!” or “We have a patent!”. The reason for the skepticism: Iguchi’s
on-stage show mainly centered on a pre-produced video clip, not an
actual product demo. This left people wondering if Sekai Camera isn’t
just vaporware for almost half a year during which it seemed like
nothing happened. But today I saw the app is real and working - on an
iPhone.

Tonchidot organized an invitation-only event at an exhibition in
Tokyo today, showcasing a working prototype for the first time. Sekai
Camera’s basic concept is still intact: Use the iPhone camera to
overlay tags and information onto any object in the real world. Users
then need to look through the camera to see icons pop up that contain
information on buildings, stores, sightseeing spots or objects.

The prototype I tried out today was a bit buggy but worked as
promised, showing tags with information (sounds, pictures and text) on
other booths installed in the exhibition hall. Many people speculated
how Sekai Camera works technically. The answer is simple: The user’s
location is identified through GPS (no cell-tower triangulation or
image recognition technology is being used). As the iPhone doesn’t have
an internal compass, the direction of where the viewfinder is pointed
at can’t be measured: Users need to flick fingers left or right to find
relevant tags that are around them (as demonstrated in the video I took
below). Tap a tag and the information it contains appears in the form
of a window, for example a picture with a comment box below it or a
voice message someone left earlier.

Tonchidot today showed they were rightfully chosen as a TechCrunch50
finalist. Sekai Camera is incredibly cool technology even though the
prototype version didn’t look as flashy as the previous one shown on
video. For a massive land grab, Sekai Camera will have to come up with
a viable business model, achieve a critical mass of tags to make the
app worthwhile and optimize the technology.

But Tonchidot is working on it. Iguchi said he is in talks with
companies interested in contributing commercial tags that could contain
anything from ads, coupons to product information for a fee. Tags are
also being scraped from various web services such as Yahoo Japan’s Wai Wai Mappu
(a community-style map information service). But Sekai Camera also
needs user-generated tags - lots of them. While a compass built into a
future iPhone model might solve the directional alignment issue, GPS
within buildings will most likely remain a problem for quite some time.
(For tagging the exhibition hall today, locations were measured through
Wi-Fi signals an external service called PlaceEngine provided.).

According to Tonchidot, Japan will be covered with social tags
first, followed by the rest of the world. Asked when Sekai Camera will
be available for everyone to buy, Tonchidot fellow Masayuki Akamatsu
told me: “In 2009, sometime when it’s warm!”. We will stay tuned.

Article Link

Where Do Mobile Ads Work Best? On the iPhone!

2009-02-06T23:21:00.001-08:00

Seeing Ads

One in ten mobile phone users in the U.S. used a
location-based service such as a map, friend or restaurant finder in
Q4, 2008. The 25 - 34 age group saw the highest levels of interest in
this type of offering, with 22 percent penetration.
One
in seven mobile phone users visit a mobile Web site, the second most
popular response; this rises to one in five for iPhone users

Recalling Ads

iPhone users are four times as likely to recall LBS (location-based service) ads as non-iPhone users.
33 percent of mobile consumers recall seeing mobile advertisements this quarter, compared to 41 percent of iPhone users.
One in three consumers that recall seeing a mobile ad responded in some way; this rises to one in two for iPhone users
While
men and women are equally likely to recall mobile advertising, women
are 85 percent more likely to respond to ads than men

Responding to Ads

Calling a toll free phone number published in the ads is the
most common means of response; iPhone users called twice as much as
non-iPhone users
One in seven consumers reported buying a
product or visiting a store as a result of seeing a mobile
advertisement; for iPhone users, more than one in four bought something
as a result of seeing an ad

Article Link

MySpace Begins Monetizing Music Videos With Impressive Results

2009-02-06T22:24:00.001-08:00

In an effort to monetize the growing number of music videos on its site, MySpace
has just launched a new pilot advertising initiative that places
attractive overlays at the bottom of some clips, allowing users to buy
the song they’re listening to or immediately jump to the artist’s
homepage.

The new initiative stems from MySpace’s partnership with Auditude,
a content detection and management company that can identify
copyrighted content and serve relevant advertising, even on
user-submitted video. Now Auditude is applying the technology to music
videos, which in the past have largely relied on banner ads and static
text links to music stores for monetization.

On Wednesday the site, in a partnership with Warner Music Group, placed
an overlay ad on a video for My Chemical Romance’s cover of Desolation Row.
Users were presented with the option to buy the song either on Amazon,
or (in an interesting twist) on a vinyl disc. Over the 24 hours that
the ad ran it posted an impressive 1.2% click-through-rate
(significantly higher than rates seen on typical banner ads),
encouraging MySpace and Auditude to expand the program to more videos.
Today the site began displaying advertising on U2’s new single Get On Your Boots, with plans to expand the program more broadly in the near future.

Article Link

Online Ad Revenues Pick Up In The Fourth Quarter.

2009-02-06T22:16:00.001-08:00

Article Link

Article Link

Stake Your Claim? Technorati Opens Goldrush-Inspired Tag Directory

2009-02-03T22:56:00.001-08:00

Technorati has just launched a new directory of ‘tag’ pages, offering brief overviews of a variety of tech-related topics. Tag pages range from broad subjects like ‘internet’
to individual companies, with each page offering links to relevant
articles, blog posts, user-written summaries, and related topics on
Technorati (in some ways the pages are reminiscent of Mahalo’s
topical overviews). Unfortunately, while these tags could eventually
serve as a handy glossary to the web, it seems that in an effort to
quickly build up content Technorati is openly inviting users to submit
articles that are less than objective.

Article Link

How Software Entrepreneurs can be Successful Presenters to Investors

2009-02-02T23:39:00.001-08:00

Some general, presentation-at-large, dos and don'ts.

Do
challenge yourself to deliver an 'easy-to-understand' story. Could I,
your listener, replay to another person the very basics of your venture
and how your target customers will benefit from using your product?

Do infuse passion throughout your delivery. Engage me with your story.

Do focus on the benefits to customers of acquiring/using your
product. Does it simplify? Make-money? Save money? Open new markets?

Do differentiate your business in some way from the competition - market channel, service, technical features, etc.

Don't give me unclear, irrelevant, or unnecessary information.
It is extremely important to your success that you winnow the full
amount of information into the particular subset that is required for
this presentation. If you are concerned about leaving out 'necessary'
information prepare a more detailed slide for the Q&A period in
case it comes up.

Don't try to impress me with a lot of jargon.

Article Link

Google: "We're Not Doing a Good Job with Structured Data"

2009-02-02T23:18:00.001-08:00

During a talk at the New England Database Day conference at the Massachusetts Institute of Technology, Google's Alon Halevy admitted that the search giant has "not been doing a good job"
presenting the structured data found on the web to its users. By
"structured data," Halevy was referring to the databases of the "deep
web" - those internet resources that sit behind forms and site-specific
search boxes, unable to be indexed through passive means.

Google's Deep Web Search

Halevy, who heads the "Deep Web" search initiative at Google,
described the "Shallow Web" as containing about 5 million web pages
while the "Deep Web" is estimated to be 500 times the size. This hidden
web is currently being indexed in part by Google's automated systems
that submit queries to various databases, retrieving the content found
for indexing. In addition to that aspect of the Deep Web - dubbed "vertical searching" - Halevy also referenced two other types of Deep Web Search: semantic search and product search.

Google wants to also be able to retrieve the data found in
structured tables on the web, said Halevy, citing a table on a page
listing the U.S. presidents as an example. There are 14 billion such
tables on the web, and, after filtering, about 154 million of them are
interesting enough to be worth indexing.

Can Google Dig into the Deep Web?

The
question that remains is whether or not Google's current search engine
technology is going to be adept at doing all the different types of
Deep Web indexing or if they will need to come up with something new.
As of now, Google uses the Big Table database and MapReduce framework for everything search related, notes Alex Esterkin, Chief Architect at Infobright, Inc.,
a company delivering open source data warehousing solutions. During the
talk, Halevy listed a number of analytical database application
challenges that Google is currently dealing with: schema auto-complete,
synonym discovery, creating entity lists, association between instances
and aspects, and data level synonyms discovery. These challenges are
addressed by Infobright's technology, said Esterkin, but "Google will have to solve these problems the hard way."

Also mentioned during the speech was how Google plans to organize
"aspects" of search queries. The company wants to be able to separate
exploratory queries (e.g., "Vietnam travel") from ones where a user is
in search of a particular fact ("Vietnam population"). The former query
should deliver information about visa requirements, weather and tour
packages, etc. In a way, this is like what the search service offered
by Kosmix is doing. But Google
wants to go further, said Halevy. "Kosmix will give you an 'aspect,'
but it's attached to an information source. In our case, all the
aspects might be just Web search results, but we'd organize them
differently."

Yahoo Working on Similar Structured Data Retrieval

The challenges facing Google today are also being addressed by their nearest competitor in search, Yahoo. In December, Yahoo announced that they were taking their SearchMonkey technology in-house
to automate the extraction of structured information from large classes
of web sites. The results of that in-house extraction technique will
allow Yahoo to augment their Yahoo Search results with key information
returned alongside the URLs.

In this aspect of web search, it's clear that no single company has
yet to dominate. However, even if a non-Google company surges ahead, it
may not be enough to get people to switch engines. Today, "Google" has
become synonymous with web search, just like "Kleenex" is a tissue,
"Band-Aid" is an adhesive bandage, and "Xerox" is a way to make
photocopies. Once that psychological mark has been made into our
collective psyches and the habit formed, people tend to stick with what
they know, regardless of who does it better. That's something that's a
bit troublesome - if better search technology for indexing the Deep Web
comes into existence outside of Google, the world may not end up using
it until such point Google either duplicates or acquires the invention.

Still, it's far too soon to write Google off yet. They clearly have
a lead when it comes to search and that came from hard work, incredibly
smart people, and innovative technical achievements. No doubt they can
figure out this Deep Web thing, too. (We hope).

Article Link

Shoring Up The Online Advertising Biz

2009-01-30T23:02:00.001-08:00

comScore estimates that 4.5 trillion ads were served to U.S. consumers last year. That comes to 2,000 ads per month per person.

Article Link

ComScore Report: Fastest-Growing Sites And Top-Ten Advertising Magnets

2009-01-28T22:58:00.001-08:00

Fastest-Growing Sites

Break Media* (+279%)
Glam Media* (+144%)
Infospace Network (+134%)
NetShelter Technology* (+131%)
Everyday Health* (+121%)
CBS Corporation* (+111%)
WildTangent Network* (+74%)
Discovery Digital Media (+68%)
WordPress (+64%)
Demand Media* (+59%)
Weatherbug Property (+59%)
Answers.com Sites (+58%)
Facebook (+57%)
Yellow Book Network* (+51%)
Ask Network* (+48%)
AT&T Interactive Network* (+47%)
JPMorgan Chase Property* (+45%)
Hearst Digital Media (+42%)
The Mozilla Organization (+40%)
Sprint Nextel (+36%)

Top-Ten Display Ad Publishers

Yahoo Sites (37.1 billion)
Fox Interactive Media (34.9 billion)
AOL (18.2 billion)
Facebook (13.7 billion)
Microsoft Sites (13.4 billion)
Google Sites (4.1 billion)
eBay (2.7 billion)
Viacom Digital (2.2 billion)
Glam Media (2.1 billion)
United Online (1.8 billion)

Article Link

Glam Snaps Up AdaptiveAds

2009-01-28T22:57:00.001-08:00

Glam Media has acquired AdaptiveAds,
a startup based in Mumbai, India that serves display ads targetable by
the demographic characteristics brand advertisers understand (such as
“Women 24-40, Fashionista, Beauty”). It calls its contextual display
ads BrandWords. They will now be called Glam AdaptAds.

In addition to the ad targeting, AdaptiveAds brings a self-serve ad
server for ad agencies, as well as “brand engagement” tracking and
reporting tools.

Article Link

Ad Network Optimization Service Beta - Let OpenX SHOW YOU THE MONEY!

2009-01-28T11:39:00.001-08:00

how does this program differ from the many other existing ad network
optimization services out there? The simple answer is that OpenX is
taking a completely new and unique approach to the problem of how to
drive maximum value for ad inventory. Perhaps the most unique aspect of
the OpenX optimization approach is that we work with multiple ad
networks in combination with our own OpenX Market to get the best price
for publisher inventory. This approach to inventory yield optimization
combines the OpenX Market ad impression auction with the Artmore
traditional method of working with ad networks (where publishers “look
back” to review their ad performance from each ad network from the
previous day and make changes based old performance data). This hybrid
model allows multiple classes of ad buyers (ad networks, agencies and
direct advertisers) to bid for OpenX publisher inventory in real time,
while also allowing some ad networks to access inventory in a more
traditional way. In addition, OpenX will pool inventory from our
network of more than 150,000 websites, which will help us drive more
scale for ad networks, which should in turn drive higher prices for our
publishers.

Article Link

BooRah Now Selling Semantic Yelp, CitySearch Report Cards

2009-01-28T11:30:00.001-08:00

When we say that semantic technology has a
whole lot of awesome potential, this is a fun example of what we're
talking about. If it can be done for restaurants, we expect similar
analysis of online sentiment can be sold for all kinds of different
real-world sectors.

The idea is that BooRah
tracks positive and negative reviews of food, service and ambiance at
restaurants across hundreds of online review sites. The service
monitors trends toward negative and positive reviews, pulls out key
quotes from users and offers other value adds based on its technology.

Now restaurant owners can subscribe to receive a PDF of their
monthly reports for an introductory price of $15 and a regular price of
$25 per month. (Here's a sample report, in PDF format.)

Simple charts and a straightforward presentation can offer
restaurant owners nervous about the Wild West of online opinion a
bird's eye view of what's really going on, month by month. On the down
side, the reports may enable those business owners to spot and track
down negative reviewers to hassle them for the injustices they've no
doubt done to a fine eatery.

Article link

Report: Click Fraud At Record High

2009-01-27T23:32:00.001-08:00

17.1% of all clickthroughs on web advertising are the result of click fraud - the act of clicking on a web ad to artificially increase its click-through rate - according to the latest report from Click Forensics,
a company that specializes in monitoring and preventing internet crime.
The level of clickfraud is the highest the company has seen since it
started monitoring for it in 2006, dashing our hopes that it might hold steady in 2008. The company recorded a rate of 16.3% in Q1 2008.

Also alarming is the fact that over 30% of click fraud is now coming
from automated bots - a 14% increase from last quarter and the highest
rate Click Forensics has seen since it started collecting data. Click
fraud for ads on content networks like Google AdSense and Yahoo
Publisher Network was up to 28.2% from 27.1% last quarter, though that
figure has decreased since Q4 2007, when it was at 28.3%. Outside of
the US, Click Forensics reports that the most click fraud came from
Canada (which contributed 7.4%), Germany (3%), and China (2.3%).

Click Forensics also notes that it has seen a reemergence with some
old-hat tricks, like link farms. The company speculates that the
increase may be tied to the poor economy, which has spurred a rise in
activity like phishing and other cybercrime.

Article Link

OpenX Feeling Bullish - Ad Server Company Announces Strong Growth

2008-12-15T07:23:00.001-08:00

OpenX, an open source ad server
for web publishers, released statistics today to show its strong recent
growth - especially in the last 6 months. We interviewed the CEO of
OpenX, Tim Cadogan, about the data. We also wanted to know how OpenX
compares with Google's competitor Ad Manager, and we discovered how
exactly OpenX will make money.

According to OpenX, as of December 2008 more than 300 billion ad
impressions now run through its software every month. Its core product
is still the open source OpenX Ad Server - version 2.6 was launched
August 2008 and included a new API. This product has had more than
10,000 active downloads and is getting a 25 billion monthly ad
impression run rate.

Article Link

OpenX Shows Impressive Growth, Ramps Up Revenue Streams

2008-12-15T07:11:00.001-08:00

OpenX (which used to be called Openads),
provider of an open-source ad serving solution for web publishers - we
use it at TechCrunch -, is growing like weed under the leadership of
former AOL CEO Jonathan Miller, who is the company’s chairman, and ex-Yahoo executive Tim Cadogan
who is CEO. According to the company, they’re serving well over 300
billion ad impressions through its software as of this month, while its
Hosted product line has achieved a more than 1 billion monthly ad impression run rate.

Article Link

Freebase Parallax Taunts Us With Awesome Semantic Web Video

2008-08-14T10:02:00.001-07:00

Staff researcher David François Huynh has created an interesting tool for browsing semantic database Freebase, called Freebase Parallax. Written up by ZDNet's Oliver Marks, the video Huynh recorded demonstrating Parallax (below) will knock your socks off.

Unfortunately, actually using Parallax demonstrates just how far
from solid Freebase, one of the semantic web's poster children, really
is. The idea is to allow you to apply multiple filters for your
searches and embed live charts in a blog. It's a beautiful idea, check
out the video.

Here's the video below, if you find yourself saying "get to the point already," then skip to about 1:30 in the timeline.

Freebase Parallax: A new way to browse and explore data from David Huynh on Vimeo.

Unfortunately, when we tried out a number of searches in Parallax,
very few subjects were well populated at all. We found duplicate
subject titles where one held solid data and the other didn't, but even
that was a best case scenario. In search after search, we found next to
nothing in Freebase.

The example above is nice, but let's say I want to find out
something about black women scientists. No luck. History of the
internet? Not much information there. Venture Capitalists? Blank
profile pages.

This ought to work. Freebase has taken more than
$50 million in venture investments, they have a small army of volunteer
and computer scientist contributors, they've got robots pumping their
database with information automatically. There are now 60% more articles in Freebase than there are in English Wikipedia. So what's the problem?

We wrote last week about ontological concerns about the semantic web,
but Parallax shows that there are more superficial problems. An
unfriendly UI has been Freebase's excuse for a long time, despite
recent improvements to it. We love the idea of the semantic web, but
give it's grand daddy website a usable UI like Parallax and we're left
questioning just how much there really is inside Freebase anyway.

For an alternate view see Alex Iskold's Freebase: Dispelling the Skepticism,
and some fault here may lay in the coolness ratio of the video to the
Parallax app, but for now - we feel inclined to look elsewhere for the
"semantic web killer app."

Article Link

Lehman’s Online U.S. Advertising Forecast: Another $20 Billion In Growth By 2012 And Online Video Takes Off

2008-08-13T13:21:00.001-07:00

I was (digitally) leafing through the latest Lehman Brothers
Internet Data Book for August this morning, and came across these
forecasts for total U.S. Internet online ad spending and online video
ad spending.

Video ads are the hottest area of growth. Analyst Doug Anmuth thinks
that online video ad spending will reach $1.1 billion this year (up 63
percent), and more than double to $2.4 billion over the next two years.

He also thinks that total advertising spending in the U.S. will go
from $26.1 billion this year to $45.5 billion in 2012 (consequently
increasing from 8.8 percent of total advertising spending to 13.7
percent).

Here are some tables with his estimates:

Also, to give some perspective on where online advertising is
compared to TV advertising, he offers this comparison chart of the
first decade of broadcast TV advertising VS. cable TV advertising Vs.
Internet Advertising. The 30 percent growth rate for Internet
advertising is double the rate of where cable advertising was at the
same point in its history, and triple the rate of broadcast TV
advertising. There, don’t you feel better already?

Article Link

Y Combinator To Offer Standardized Funding Legal Docs

2008-08-13T13:19:00.001-07:00

Early stage venture firm Y Combinator,
which has funded over 102 young startups, has “open sourced” the legal
documents that they provide to their startups to use as they seek
additional funding beyond what they’ve gotten from Y Combinator. The
documents were created with their law firm, Wilson Sonsini Goodrich
& Rosati and are available here.

The goal, says Y Combinator cofounder Paul Graham,
is to help young startups avoid at least some of the legal costs
associated with that first round of financing. The lawyering fees don’t
vary much based on the size of the round, and so a significant portion
of small rounds can go directly to the lawyers on the deal. Companies
are routinely forced to pay the legal bills of the investors, too,
making the situation worse.

Jeff Clavier, the founder of early stage fund SoftTechVC, told me yesterday that the average legal bills on a deal are $20-$30k. Other angel investors gave estimates in the same range.

The Y Combinator documents are designed to have “terms close to neutral, in the sense that

they favor neither the investor nor the startup,” said Graham in an email.

We’re hoping that this will cause there to be a lot more
startups. I know (because for many years I was one) that there are a
lot of rich technology people who would do angel investing but don’t
because it seems like a schlep. And obviously there are lots of
startups desperate for funding. We’re hoping this document will bring a
lot more of them together.

Is Y Combinator helping their competitors by making the legal process easier? Absolutely. And Graham doesn’t seem to mind.

On a related note, earlier this year TheFunded started allowing entrepreneurs to publish the various term sheet clauses that venture capitalists were asking for.

Article Link

How to Demo your Startup

2008-08-11T12:06:00.001-07:00

1.Show product in first 60 sec
2.The best products take less than five minutes to demo
3.Leave people wanting more
4.Talk about what you've done, not what you're going to do
5.Understand your competitive landscape -current and historical
6.Short answers are best
7.Powerpoint bullet slides are death
8.How to use this device call the phone
9.How to handle questions you don't know the to
10. Always confirm the time of your meeting/call, and always be 15 minutes early
Article Link

MySpace Banks On ‘Hypertargeting,’ But Plain Targeted Ads Continue To Suffice

2008-08-04T15:39:00.001-07:00

Although MySpace continues to maintain that its hypertargeting
solution will ultimately lead to higher revenues, significant hurdles
remain. A day before the Fox Interactive Media unit’s parent News Corp (NYSE: NWS). releases its Q2 earnings, WSJ outlines the challenges to greater ad spending on MySpace.

-- Engagement: While there’s little question that users of
social net sites like MySpace and its rivals are engaged while they’re
on the site, it is uncertain whether they are too focused on changing
their profile pages and sending messages to friends to pay attention to
ads. And so, basic targeting placements are considered perfectly
adequate for media buyers and their clients’ needs.

-- Privacy: The rumblings from the Federal Trade Commission,
Congress, state lawmakers and digital rights advocates have spooked
some advertisers who don’t want their marketing efforts to turn into an
embarrassing footnote in a legal case. While there wasn’t much backlash
against participants in Facebook’s Beacon ad targeting program last
fall, the initiative still has many marketers and agencies wary of
being associated with the kind of negative publicity it drew.

-- Looking long-term: While FIM has touted the importance of
hypertargeting, executives are taking care not to talk it up too much.
Keeping investors in mind, the company often highlights its $900
million, three-year deal with Google (NSDQ: GOOG)
for featuring sponsored links on MySpace. And ads that take over the
site’s home page are also a source of value. Executives also argue that
the hypertargeting program is beyond being able to charge high ad
rates. Placing the emphasis on the long-term benefits for advertisers
who use the program over time, by offering broader insights into
consumers’ offline behavior beyond the basic targeting on the site.

Article Link

Text Messaging Huge with Young Adults

2008-07-14T08:04:00.001-07:00

Text messaging is especially popular with US adults ages 18 to 34, according to Universal McCann's 2008 "Media in Mind" study. Respondents from that age group sent an average of 13 text messages every week.

In last year's survey, nearly one-half of all US adults said
they had never sent a text message. This year only 41% said so. Among
18 to 34 year-olds surveyed this year, just 22% had never sent a text
message, down from the 38% the prior year.

Need data for presentations? eMarketer subscribers can
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"The great unwashed—those people who have never sent a
text message—is getting smaller all the time," said Graeme
Hutton, senior vice president at Universal McCann, in a MediaPost article.

Text messaging is still new for many marketers, as evidenced by a February 2008 ExactTarget
study. The proportion of Internet users surveyed who owned a mobile
phone and had made a purchase after receiving a text message was a
paltry 6%. That percentage was higher among younger users, but still
mostly in the single digits.

Such low numbers could be interpreted to mean that text
messages are not a very effective way to market, but they might also
just reflect that such marketing is still relatively rare.

A December 2007 BIGresearch
study of US Internet users found similarly low text message influence:
6.4% of respondents said they had bought electronics because of text
messages, and still fewer said they had influenced purchases of other
types of goods.

If mobile marketing is to move beyond the experimental budget stage,
text messaging is likely to be part of the mix, in part since the
messages lend themselves to existing terminology and benchmarks,
according to John du Pre Gauntt, senior analyst at eMarketer.

"Mobile messaging is tailor-made for getting mobile marketing past the
early adopter stage and into the mainstream," Mr. Gauntt said. "Messaging has a clear currency—that is, messages
sent, received, opened or acted upon—for all parts of the mobile
marketing chain to use."

The eMarketer Mobile Music report will be published this month. Click here to be notified when it is released.

Article Link

MSFT’s acquisition of Powerset is not about search

2008-07-10T10:34:00.001-07:00

The recent $100 million acquisition of Powerset,
the semantic search engine company, by Microsoft looks to be more to do
with advertising than beefing up the software giants’ search
capabilities.

So far, Powerset has only demonstrated its technology against
Wikipedia. It’s a neat exhibit but it is highly computer intensive. You
would need a massive amount of computer power to run that semantic
search technology across the entire Internet.

Also, how many searches would benefit from a semantic component? Not many. Most searches are fairly direct in my experience.

Where Powerset’s technology could prove its usefulness is in
contextual advertising. That’s a much smaller semantic problem to
handle, and it is a semantic problem that would result in the largest
payoff.

The reason Yahoo is outsourcing some of its advertising to Google is
that GOOG is better at contextual advertising in than Yahoo. GOOG can
monetise those searches better than anybody else–at least for now.

If Microsoft can improve contextual advertising then maybe it can
win that type of business from Yahoo and others. If advertisers through
MSFT get better conversions than through Google then Microsoft wins,
imho.

Article Link

iRobot Eyes Your Lawn With Their Latest Bot

2008-07-08T09:57:00.001-07:00

One of the more useful consumer bots to come out in the last
several years is the Roomba. Who wouldn’t want a robot that sweeps
their floor automatically? It’s a great gadget and all, however, we
need more robots around the house. According to a recent patent filing,
iRobot is eying your lawn with their next creation.

The 84-page patent filing shows us several new designs for a bot
whose sole purpose is to trim your lawn. They seem to be looking at
both an electric and a gasoline hybrid motor for power, and want to
include a variety of features such as an edge trimmer, and the ability
to remember the layout of your lawn for future mowings. What I wouldn’t
have given for one of these as a kid. Then again I’m not sure it would
be quite up to mowing 3 acres of land.
Article Link

Metaweb's Freebase Now 60% Larger Than English Wikipedia

2008-07-08T09:52:00.001-07:00

Wikipedia
is an incredible monument to human creativity and collaboration, but as
one era of innovation passes into another - semantic web advocates want
to augment the huge human input into the web with machine learning. The
semantically enriched common database Freebase announced today that it will soon reach the milestone of 4 million topics added to its collection.
That's 60% more than English Wikipedia's 2,445,041 articles and almost
half the size of Wikipedia's full 10 million articles in 250 different
languages.

What is Freebase? It's a database of information that's organized by
people and machines and is particularly well suited for machine
reading. You're not a machine - so why should you care? Read on.

What You Can Do With Freebase

Semantic web expert and RWW contributor Alex Iskold spelled out the value of Freebase in great detail
here in May. The long and short of it though is that Freebase learns
fast through a combination of automated information harvesting and
machine and human organization. It collects information from sources
like Wikipedia and MusicBrainz and from user uploads and edits.

Programmatic access to that now structured data allows all kinds of
mashups to be built that "know things." Check out, for example:

Taught or Not - a cute little game that tests your knowledge of who influenced who throughout the history of thinkers.

Shot or Not - another game that tests your knowledge of the causes of death of various famous people throughout history.

Random Walk Through Influences - a little app that displays the chain of historical influence around any artist whose name you enter.

Pull Quotes - If you have any interest in politics, check this out - it's awesome!

Powerset - the Natural Language search engine acquired by Microsoft last week uses Freebase, too.

Seriously, Though

Obviously most of these are relatively frivolous use cases. Are
there serious powerful use cases for Freebase yet? We're not entirely
sure. There are big gaps in the data, which is understandable, but the
interface is so much harder to use than Wikipedia's that there's reason
to be concerned about expectations of substantial human editing. The
interface was much improved this summer and is now far more usable, but
it's still harder than it needs to be.

We've certainly got our questions about Freebase, but we're excited
about what Metaweb is doing with it. They are smart, well funded and
aiming high. The community there deserves congratulations on growing to
4 million reusable articles, something that the the celebrated English
Wikipedia community can only aspire to.

Article Link

Microsoft’s Powerset Acquisition: Integration By End Of Year

2008-07-02T09:22:00.001-07:00

I spoke with Powerset cofounder/CEO Barney Pell and Microsoft’s Live Search General Program Manager Ramez Naam shortly after Microsoft’s announcement of their acquisition of Powerset earlier today.

Microsoft intends to use Powerset’s natural language search
technology as a major differentiating factor v. no. 1 search player
Google (see our recent coverage of Live Search Cashback, a another Microsoft search effort aimed at getting more market share).

TechCrunchIT goes into detail
on how effective Powerset may be as a weapon. But a few things are
clear - the resource limitations (cash and computing resources) that
slowed Powerset’s development are now history. The relevance problem is
less important since Microsoft core search relevance is quite good. And
users really seem to like the beta launch of Powerset even with the limited dataset.

Naam says 5% of searches contain elements of natural language that
keyword based search algorithms don’t handle well, and there’s an
assumption that as better results are returned, more people may start
to simply type a normal sentence instead of a couple of keywords.
Microsoft will integrate at least parts of Powerset technology into
Microsoft Live Search by the end of the year, Naam says. I expect we’ll
be hearing a lot more about natural language search coming out of
Microsoft shortly.

Article Link

Powerset - iPhone Interface

2008-07-01T22:16:00.001-07:00

Powerset is a semantic search engine scanning Wikipedia and open
database site, Freebase. The company created an iPhone version of its
site in May after execs realized that a third of its employees owned
iPhones, and they wanted a simpler, faster version of the site for
mobile browsing. Powerset allows users to type in questions such as,
"Who won the NBA Championship in 2008?" Linguistic technology parses
every sentence in a Wikipedia or Freebase entry and provides condensed,
text-based results with links on key search words to the full entries
for further clarification
.

Online Ads’ Global Share To Break 10 Percent Mark In ‘08; Internet Ads To Rise 26.7 Percent: Zenith

2008-06-30T15:45:00.001-07:00

ZenithOptimedia’s optimistic predictions for online is holding
steady. The Publicis Groupe media buyer’s latest forecast expects
global internet ad spend to grow 26.7 percent and break through the
10 percent share barrier this year—a year earlier than Zenith predicted
just three months ago. By 2010 Zenith predicts online will attract
13.6 percent of all advertising, well ahead of the company’s previous
prediction of 12.3 percent. As for actual dollar amounts, Zenith sees worldwide online ad spend this year of $52.2 billion, $64 billion in 2009 and $78.1 billion in 2010.

The sunny views for online advertising are included in a report that
expects darkening clouds for growth in North America and Europe: Zenith
has downgraded its forecast for the former to 3.5 from 3.7 percent,
while growth for the latter is expected to end up 3.7 percent higher
instead the earlier prediction of 3.9 percent. But thanks to developing
world’s growing ad spend, Zenith has nevertheless upgraded its overall
spending forecast slightly, expecting a 6.6 boost in 2008, up slightly
from the 6.5 percent growth predicted in its March forecast.

The increasing economic uncertainty that Zenith notes is swirling in
Europe and the North America will accelerate the shift to online,
Zenith said. Aside from that, the report cited improved online video
and targeting abilities as further reasons for marketers to shift more
of their budgets to the web. Still, Zenith’s positive predictions for
online ad spend comes after several other, less sanguine industry
reports. Just over a month ago, Lehman Brothers analyst Doug Anmuth said
online ad spending in the U.S. will be up 23 percent, down from his
previous call for 24 percent growth. Meanwhile, display growth has been
trending lower, according to TNS’ look at Q1, when display gained only 8.5 percent compared to the previous year’s doubly-digit quarterly growth rates.

Article Link

Why Web 2.0 Is No Bubble: Corporations Are Willing to Pay for It

2008-06-27T17:19:00.001-07:00

Everyone
seems to want an answer to the question "When will Web 2.0 startups
start making money?" The implication is that unless we can answer the
question, the "bubble" of Web 2.0 will burst and all of us who believe
in this stuff will be revealed as fantasists.

The fact is, it's incredibly hard to make money as a Web 2.0 startup aimed at consumers.

There are hundreds of these companies, and they all clamor to brief
us at Forrester. Each has its own twist on blogs, social networks,
ratings, user generated video, or whatever. It's hard to get people to
pay attention to a new tool, and the value of the tool depends on lots
of participation -- the classic chicken-and-egg problem. Your
competitor is always one twist ahead of you. Some of these startups
will succeed but the odds are one in a thousand -- you need just the
right idea, at the right time, with the right push or set of potential
customers, and you need to take off with such velocity that you leave
the competition in the dust.

Once a startup like this does take off, there's that other
pesky little problem -- monetizing the success. Google transformed the
online world by first generating huge traffic, then finding a business
model. But Google's success was based on a fantastically clever
advertising mechanism that was automated, attracted new advertisers,
and served searchers nearly as well as it served advertisers. Facebook
hasn't yet unlocked that advertising gold mine, and flubbed up its most
prominent try with Beacon. Twitter has no business model yet. Ning has
hundreds of thousands of visitors, but still runs Google AdSense ads. And these are the successes. No wonder people are skeptical.

A few of these companies may (and likely will) unlock that genie as
Google did and take off. But for any given startup, the odds are
astronomical.

The amazing thing is that there are a class of startup companies
making good money right now from Web 2.0. They're not flashy and they
don't grow like mushrooms. But they've got all the business they can
handle and they are growing. I am talking about companies
that serve corporate social application needs. This isn't the typical
Web 2.0 business paradigm, since serving corporate customers means lots
of client service, which is people-intensive -- it doesn't lift off
miraculously like a pure technology startup. In fact, in many of these
companies, the technology itself is positively mundane. But the
startups grow because they deliver value for which they can charge a
premium and get customer loyalty. The customers of these companies
don't defect when something shiny and new comes along, because they
like the service they're getting.

Here are some examples, listed by the objectives they help companies
accomplish (for more on these objectives see Chapters 4 through 9 of Groundswell).

Listening. Communispace
now has hundreds of private communities that its client companies are
using to learn about their customers. It succeeds because it's unlocked
the key to running and moderating these communities effectively, and
grows despite charging $150K or more per year per community. The other
class of listening companies are the brand monitoring companies, and
the track record here is great. Research giant Nielsen bought BuzzMetrics. Another research giant, TNS, bought Cymfony. J.D. Power & Associates bought Umbria. MotiveQuest, which is still independent, has typical clients happily paying $30K and up to work with it.

Talking. Talking with the Groundswell is tricky,
but there are plenty of agencies ready to help you with it. After
building dozens of campaigns and sites, Blast Radius was bought by mega-agency Wunderman. Brains on Fire ignited the spectacular success of Fiskateers. The digital divisions of companies like Edelman also compete in this space, as do the big Web service companies like Avenue A/Razorfish (now part of Microsoft).

Energizing. Ratings and reviews are the easiest way
to energize customers to sell others, and the companies that provide
them are taking off. Bazaarvoice's clients have generated over 10 billion customer reviews. PowerReviews works with over 200 retailers. And ExpoTV has built a business around consumers creating reviews on video.

Supporting. Support forums work -- they please customers and they reduce costs. Lithium
has an impressive client list including Dell, AT&T, Comcast, and
Sprint. The community space is crowded, but other companies with
growing client lists include Jive Software, Awareness, and Mzinga/Prospero.

Embracing. Startups that enable clients to source
ideas from their customers have a bright future, because
customer-generated innovation is hot right now. Salesforce.com bought
Crispy News and turned it into Salesforce Ideas, which powers idea sites for Dell and Starbucks. And Innocentive
is growing rapidly, with 50 companies including Procter & Gamble
offering prizes of $10,000 or more to innovators that can solve their
problems.

While many were distracted by sparkly consumer-facing startups,
these companies were building and growing solid businesses. Look how
many of them were acquired! This is no bubble, because companies that
deliver business value to clients have durable growth potential. Could
this be the Web 2.0 business model everyone is looking for?

Article Link

Microsoft Acquiring Semantic Searcher Powerset For $100 Million: Report

2008-06-27T14:24:00.001-07:00

Well if it can’t get Yahoo’s (NSDQ: YHOO) search business… Microsoft (NSDQ: MSFT) will acquire semantic search engine Powerset for more than $100 million, according to Matt Marshall at VentureBeat.
His exact language is that the company “has agreed to acquire” the
company and that it will be announced next month. SF-based Powerset has
been something of a media darling, despite the fact that it hasn’t
taken off yet. In 2006 it raised a $12.5 million first round from
Foundation Capital and The Founders Fund, as well as various angels,
including Esther Dyson and PayPal founder Luke Nosek. Despite years of
interest in “semantic” or “natural language” search, this area is a
long way from proving that it works much better than current search
technology. VentureBeat also reports that its first round valued the
company at $42.5 million, so this wouldn’t be a huge win for the
investors. But given the uncertainty of this area, and the cash
requirements of an independent search engine, this might’ve looked like
a pretty attractive outcome.

For Microsoft, this deal would be a drop in the bucket—a tuck-in,
really. And by buying what’s basically a technology company, not one
with much market traction, it’s a sign that in the absence of Yahoo, it
still wants to compete with Google (NSDQ: GOOG) by out-engineering it.

Article Link

Microsoft To Buy Powerset? Not Just Yet.

2008-06-27T07:29:00.001-07:00

VentureBeat is reporting that Microsoft has agreed to buy semantic search engine Powerset for somewhere around $100 million, which is the price we previously reported was being offered to the company.

Our sources have been saying this deal is highly likely since May,
but hasn’t actually been signed yet and could still be disrupted by the
ongoing Microsoft-Yahoo negotiations. Dave Wehner, a Managing Director at investment bank Allen & Co. (he’s the guy who sold Bebo for $850 million to AOL), is representing Powerset in the deal.

Powerset debuted at TechCrunch40 last fall and opened a showcase of its technology to the public just last month.

Powerset has raised around $12.5 million in venture capital, and is rumored to have taken another $8 million or so in convertible debt as bridge financing.

Article Link

Learning from Flickr's Co-founders on Their Way Out of Yahoo

2008-06-19T12:22:00.001-07:00

In June 2005 Yahoo! acquired upstart Canadian photosharing web site Flickr
and the web hasn't been the same since. Yahoo, on the other hand,
didn't change nearly as much as everyone expected it to. Pre-CEO Jerry
Yang told
then-Business 2.0 writer Erick Schonfeld six months after the deal "I
look at Flickr with envy, it feels like where the Web is going."

Flickr co-founders Caterina Fake and Stewart Butterfield have now cashed out and officially left the company.
Though Yahoo! doesn't appear to have internalized many of the lessons
of Flickr, it's not too late for the rest of us to look at those same
key lessons for inspiration in our work on the web.

Industry Context

There's a lot of photo sharing services on the web, but here's where
Flickr stood. Flickr was the trailblazer, the high-profile media
darling and one of the first major Web 2.0 acquisitions. Webshots
was much older, had been bought and sold for twice as much money but
never embodied the social media ethos the way Flickr did. PhotoBucket
is a year older than Flickr, has always been much larger and was
acquired by Fox for almost 10X Flickr's pricetag in the same week that
Flickr was pegged to replace the entire Yahoo! Photos property.

We've been critical of some of Flickr's strategies around everything
from censorship to data portability, but the big picture is that the
service is fantastic. Even though it wasn't the first and it wasn't
purchased for a particularly large sum (est. $35m) Flickr is still the
beacon of innovation in this sector. Here's why.

Customer Service is The New Marketing

One of the most important elements of Flickr's early success was its
incredible engagement with its users. Flickr management spent what
might have seemed like a totally unreasonable amount of time welcoming
new users to the site, participating actively and promptly in forums
and highlighting the best photos uploaded.

That kind of engagement can turn passing early adopters into ongoing
community stakeholders and advocates. It's something that any startup
could benefit from emulating and a role we're seeing formalized in an
increasing number of companies hiring community liaisons.

The Bleeding Edge Can Go Mainstream

Flickr proved that experimental, bleeding edge web 2.0 features
didn't have to be limited to early adopters. When Flickr brought
geo-tagging, the addition of location data to photo metadata, onto the
site - more than 1 million photos were geotagged in the first 24 hours.
Now that location aware services are heating up, who's in one of the
best positions to serve media up in that environment? Flickr is.

Flickr's APIs have been wildly successful. Mashup and API directory site ProgrammableWeb
lists more mashups using Flickr APIs than any other API on the web,
short of Google Maps. More than Amazon, more than eBay, more than
YouTube.

Flickr's FlickrAuth user authentication API was a key model for the standards based oAuth protocal - now employed by Google's OpenSocial and hopefully soon by countless other applications.

Flickr broke new ground in numerous ways and proved that technical
experimentation didn't have to remain in the early adopter niche.

Being a Freak Will Not Kill Your Business

Butterfield wrote a great letter of resignation,
which was leaked to the bottom feeders at Valleywag but is a great
little read none the less. All parties say it's hardly out of character
and indeed, in my own passing interactions with the man, he was never a
fakely-nice typical business type worried about what might come around
someday from being nasty to any little blogging piss-ant that got in
his way.

Flickr came from Vancouver, British Columbia - in Canada. They must
be the national web 2.0 pride and joy of that freakishly wonderful
country.

The next time someone gives you a hard time for being a freak at work, just cluck at them knowingly and think about Flickr.

Other Lessons

Other people have raised other issues that they think are key to
learn from the situation as well. Flickr power user and exec at rival
startup Zooomr Thomas Hawk offered some obviously heart-felt feelings about what the Flickr story said about acquisition and innovation.

"[They] developed an amazing product. Cashed out (smart).
[They] could have had incredible impact on the future of social search
and innovation at Yahoo but were thwarted by a band of disorganized
bumbling executive idiots who wouldn't recognize talent if it hit them
in the face. Most important opportunities to innovate came under Terry
Semel's watch who was more concerned with being the highest paid CEO in
America than either innovation or shareholder value."

(In response to Hawk's comment, Robert Scoble humorously replied
that Yahoo! "reminds me of Podtech. Had lots of superstars under their
roof and then couldn't listen to them to make things happen.")

Dave Winer told us that the move
makes him concerned about all the data that users have entrusted to
Yahoo! "Whatever emerges from this, the new company should immediately
embark on a program to make users' data portable," Winer said. "Users
have been an abstract thing to Silicon Valley, it would be great if now
that the superstars are leaving Yahoo, the industry could turn to the
users for inspiration, and start to trust them with their own work."

Flickr's handling of user data was generally accepted as a fairly
good work in progress. Now that the original minds behind the company
have left the building, it would be great for the new leaders there to
cement user trust in regards to their data by instituting some formal,
easy-to-use measures for users to make sure their photos are safe and
secure.

Conclusions

It would be fantastic to see Fake and Butterfield start something
new but they're certainly due all the relaxation time they want, too.
Once you've got a few million dollars in the bank, though, starting
more internet businesses may be a sign of limited imagination more than
anything else. For the rest of us still plugging away, Flickr offers
some great inspiration.

We're sure there are readers here who have been much more engaged in
the Flickr community than we have. What kinds of business lessons have
you learned from the company?

Display Ads Grew 8.5 Percent In Q1, Down From Last Year’s 16.7 Percent Gain: TNS

2008-06-11T11:14:00.001-07:00

Display ad dollars in Q1 were way down from last year’s double-digit
growth rates, but the segment still managed to reach a healthy 8.5
percent gain, TNS Media Intelligence reported. In Q107, TNS said that display ads grew 16.7 percent, coming in $2.7 billion. TNS, which does not look at search ad spending, did not release dollar figures this time out.

Still, considering that ad spend overall was essentially flat at 0.6
percent and the tepid growth of segments like cable TV (+4.1 percent)
and outdoor (+2.5 percent) compared to their stellar periods last year,
display isn’t doing too badly. To put display’s Q1 in further context,
consider that network TV expenditures were up 0.8 percent—its best quarterly performance in two full years.
Looking at the year ahead, there was no update one way or the other on
TNS’ January forecast, which predicted display ad revenue growth of
14.4 percent, down slightly from its 2007 tally of 15.9 percent gains. Release

-- Online reach grows 66.6 percent: Since April 2007, the
internet’s reach has grown 66.6 percent, according to a report by
Publicis’ media agency ZenithOptimedia. While most people use the
internet at home, during business hours, Zenith found that over 201
billion pages were viewed in April 2008. Other findings from the
Zenith’s web analytics after the jump:

-- Portals not dead yet: Yahoo (NSDQ: YHOO), Google (NSDQ: GOOG),
and MSN remain the most visited web destinations. YouTube’s reach has
gained 76.9 percent in since April 2007—impressive numbers, since the
top ten sites saw reach grow by just 6.8 percent; time spent on the top
10 was up 31.3 percent during the same period.

-- Uniques: In terms of unique visitors, online questions
and answers site Wikianswers was the top gainer (520 percent) and jobs
site Monster saw the largest decline (-26 percent) among the top 100
visited websites.

-- Reach by category: TV sites’ reach were up 8 percent,
“multimedia sites” grew 15.5 percent, time spent 14.6 percent; blogs
increased 15.6 percent, and online gaming sites climbed 12.3 percent.
And, no shocker to anyone, Google remains the online search leader as
of April 2008 with a 56.5 percent total share of searches.
Article Link

Internet Display Advertising Slowed In First Quarter

2008-06-11T10:58:00.001-07:00

In the first quarter of 2008, the growth in spending on Internet
display advertising slowed to 8.5 percent from 16.7 percent growth last
year, according to estimates put out today
by TNS Media Intelligence. Even with the slowdown Internet ad spending
still grew faster than that for TV (1.7 percent), magazines (0.8
percent), newspapers (-5.2 percent), radio (-4.5 percent), and outdoor
(2.5 percent). The overall growth of all advertising spending that TNS
measures was flat at 0.6 percent growth over the first quarter of 2007.

TNS’s Internet numbers do not include search advertising, only
display ads. The quarterly total for all Internet advertising is closer to $6 billion.
But this data point is evidence that the Web may not be immune to
weakness in advertising spending overall. If the industry dives into a
full-blown advertising recession, many Web companies could feel the
impact.

This year, TNS only provided the percentage changes. Since it provided absolute dollar values last year,
I did my own math and put together the table below. In the first
quarter of 2008, $2.9 billion was spent on Internet display ads in the
U.S., representing an 8.3 percent share of the $35.1 billion total.
That puts Internet display advertising ahead of radio ($2.2 billion),
but behind newspapers ($6.0 billion), magazines ($6.8 billion), and TV
($15.9 billion). My figures are rounded, and the percent changes are
year-over-year.

Article Link

Powerset vs. Cognition: A Semantic Search Shoot-out

2008-06-09T08:37:00.001-07:00

Powerset vs. Cognition: A Semantic Search Shoot-out

Nitin Karandikar,
Saturday, June 7, 2008 at 9:00 AM PT Comments (10)

Related Stories

Back in the day, when PC stocks were kings on Wall
Does the World Need Another Way to Search?
Google’s Achilles Heel

Powered by Sphere

Powerset, which implements
semantic search, recently released a public beta based on the limited
data set of Wikipedia. But while there is no question that Powerset has
some interesting and valuable semantic search technology — many of
their demo queries produce meaningful summary pages and reference pages
with information extracted from Wikipedia content — there are other
semantic search engines that produce equally meaningful and relevant
results.

In this post, we compare Powerset results with those of a demo implementation from one such search engine, Cognition Technologies. And we compare them both with the current gold standard in web search, Google (again, limited to the Wikipedia data set).

Example 1: Powerset

There are some classes of queries in which Powerset shines, such as
whenever the query involves extracting concepts or aggregation of data
from a given data set.

For example, check out the beautifully presented results for the
following queries that extract key information the user is looking for
and provide it in summary format:

“military intelligence”

“teams in the NFL”

Example 2: Cognition Technologies

On the other hand, there are other types of queries — especially
where hardcore semantic parsing is involved — where the Powerset
algorithms get confused, and Cognition gives better results:

“rare wildlife of the Amazon”

“football players who went to jail”

Example 3: Google

There are still queries (especially when semantic parsing is not
involved) in which Google results are much better than either Powerset
or Cognition:

“helicopter carrier Iwo Jima class”

Here, surprisingly, Google has the best results. Powerset has
related results, Cognition gets totally confused, but Google nails it!

Disambiguation

One area where both Powerset and Cognition improve on Google is the
disambiguation of query terms. This is always a significant issue for
search engines; for example, when a user types in the keyword Java,
does she mean the island, the programming language, or the coffee?

Google has recently tried some experiments in this area, but these new search engines go one better.

When Powerset sees an ambiguous topic, it uses tabs to provide both sets of results:

Cognition handles it in a different way, by letting the user select from among different semantic meanings for each term:

User Impact

For most common searches, Google search works just fine. We’ve all
gotten used to the ubiquitous “keyword-ese,” currently the universal
language of web search. With Google’s unlimited resources,
comprehensive index and formidable prowess in finding relevant results
using the PageRank algorithm, it’s going to be difficult for any other
search engine to match those results. Users may have to work just a
little bit harder for unusual queries or specialized searches, but most
users will accept that trade-off in return for using their familiar and
beloved search engine. Indeed, the word Google has come to represent
web search in the same way that the word Xerox had once come to
symbolize the process of photocopying.

Future Competition

So what can Powerset (and Cognition) do to gain traction and capture users?

In their recent book, “The Innovator’s Solution,”
Clayton Christensen and Michael Raynor discuss how upstart companies
challenging market leaders and entrenched incumbents can position new
technologies for a reasonable chance of success. One approach that they
believe is guaranteed to fail is when these smaller upstarts try to
make evolutionary improvements to get and stay ahead of the major
players.

Instead, they suggest shaping the new technology into a disruptive innovation, along either of the following two major axes:

1. New-market strategy: Leveraging the innovation to attract users
who do not typically participate in using the product or service, and
thus growing the market as a whole.

2. Low-end strategy: If there are price-sensitive, over-served
users who would be willing to trade some of the advanced functionality
in return for a lower price point, then the smaller players have an
opportunity to enter the market — that is, if they can figure out a way
to make a profit.

In other words, the new players entering the market have to find
profitable business opportunities in segments of the market that are
not attractive to market leaders.

Using this model, it is apparent that a strategy of challenging
Google head-on for control of the mainstream web search market has
little hope of success, regardless of the new technologies or search
innovations that are applied. Google would have no choice but to fight
back with everything it’s got to catch up to or leapfrog this “better
search” alternative.

Similarly, since Google search is free for users, there is really no
viable low-end strategy, no way to outdo the existing search leader by
offering a lower price point.

What about non-participant users? Practically everyone online
already uses a web search engine (with Google being the overwhelming
favorite). However, Google search follows a specific, consistent set of
guidelines: simplicity of UI, speed of response, and relevance based on
incoming links. These design parameters take top priority over all
other considerations.

By challenging these assumptions, we can discover new use cases in
search that are underserved (or not served at all) by Google. Some
examples include:

1. UI Simplicity: Google’s minimal UI is trivially simple to use
and ideal for a one-size-fits-all model, but it may be less than
optimal for complex semantic searches. As Alex Iskold points out in his
recent article on the myth and reality of semantic search,
a richer user interface would allow power users to express
semantically-rich search queries and get back better results. Notably,
Powerset and Cognition excel at these types of queries.

2. Speed: For some types of advanced searches, users might be
willing to wait, perhaps even as long as a day, in order to get back
semantically complex results. Imagine a software agent that acts as a
virtual search assistant - once the user specifies a query with
multiple levels of complexity and dependency, the agent goes off and
returns the next day with a list of possible results/options. Queries
that require the coordination of complex tasks fall into this category,
such as planning a trip that requires coordinating air travel, hotel
and car, and minimizing the cost of the whole trip while taking some
additional factors into consideration.

3. Relevance: Although all the mainstream search engines use similar
criteria to evaluate relevance (mainly, the evidence of incoming
links), other relevance algorithms are certainly feasible and may work
better for certain classes of queries. Social relevance is an obvious
example; reputable premium content is another.

This post is in no way meant to discredit Powerset — they’re in
early beta and are doing a fine job of building semantic search.
Instead, the examples above clearly demonstrate that the jury is still
out on semantic search; other search engines are also contenders in
this space, and the race is far from won.
Article Link

Thinkbase: Mapping the World's Brain

2008-06-05T22:38:00.001-07:00

If Freebase is an "open shared database of the world's knowledge," then Thinkbase (found via information aesthetics)
is a mind map of the world's knowledge. The interesting and incredibly
addictive Freebase visualization and search tool is the brainchild of
master's degree student Christian Hirsch at the University of Auckland.
Thinkbase is one of the cool proof of concept applications built on top
of Freebase that we mentioned last week.

As we've mentioned here on RWW, Freebase is best suited for complex
inferencing queries -- the type that expose relationships between
various entities to figure out an answer. Things like, "What's the name
of the actor who was in both "The Lord of the Rings" and "From Hell?"
(Answer: Ian Holm)

Thinkbase doesn't necessarily answer those questions -- at least not
directly, but it does allow people to visually explore the
relationships that Freebase can expose. Thinkbase employs the Thinkmap
visualization software to visually represent the semantic relationships
between objects on Freebase as an interactive mind map. Each object on
the map is represented by an icon that corresponds to the type of
object it is. For example, person, place, movie, song, or artwork.

The site uses a two-pane display, putting the relationship map in
the left pane, and the Freebase entry for the active node in the right
pane. Every node on a Thinkbase map and be expanded to see concepts
related to that object, or collapsed to clean the graph of
relationships you're unconcerned with. Every map you create can also be
linked to via a dynamic share URL.

Thinkbase is a really fun visual front end to the Freebase database
that exposes the semantic relationships that such a database can reveal
in a compelling way. Alex Iskold wrote last week
that the problem with semantic search is that we're asking the wrong
questions. Tools like Thinkbase can help us start to think about what
type of questions we should be asking by clearly showing the type of semantic relationships that databases like Freebase excel at finding

Article Link

Google Search Ads Rile Its Big Customers

2008-06-03T22:10:00.001-07:00

As Google Inc. pushes to sell ads crucial to its
revenue growth, some of its largest advertisers are growing angry with
the way the company oversees its sponsored searches.

Frederick
Felman, chief marketing officer for Mark Monitor, speaks to WSJ's Emily
Steel about a new, deceptive form of search advertising. (June 2)

The problem is a tactic known as "piggybacking," in
which smaller advertisers use major players' brand names, slogans or
other trademarked words in the text of search ads to lure Web surfers
to their own sites.

While Google
and other search engines have policies against this maneuver, some
marketers say the practice often goes unchecked. The brick-and-mortar
world has long-established laws in this area, but the legal situation
is less clear for the Internet and has only recently started to be
tested in the courts.

Tensions over piggybacking have been simmering for a couple of years. Companies such as Marriott International Inc., InterContinental Hotels Group PLC, AMR Corp.'s American Airlines and Northwest Airlines
Corp. say the use of their names and slogans in the text of other
companies' search ads confuses potential customers and increases their
cost of doing business. They are particularly upset with Google, which
is the dominant player in the search business. It controlled 71.2% of
the search market last year, according to research firm eMarketer Inc.

As a result, Google could face a backlash as it
attempts to grab a bigger share of other advertising niches, including
display advertising and video ads. Big advertisers say they may punish
Google if they aren't satisfied with the way the piggybacking dispute
is dealt with. "This does play into our decision of overall spending --
it has to," says Michael Menis, vice president of global marketing
services at InterContinental.

Google
Some Google advertisers are upset their names are in ads for other sites.

Adds John Gustafson, director of distribution and
Internet strategy at Northwest Airlines: "If Google has an inability to
help us resolve issues about abuses of our brand, that would impact our
decision to participate in future forms of advertising."

Last August, American Airlines filed a suit against
Google in federal court in Fort Worth, Texas, seeking restitution for
damages caused by trademark infringement on the search engine. The
airline is asking Google to stop selling its trademarked terms to other
advertisers. This practice is "utilizing our brand that we've built for
more than 80 years for the benefit of someone else," says American
Airlines spokesman Billy Sanez.

Google says it is disappointed that the court denied
its motion to dismiss the lawsuit. It believes the suit lacks merit.
"Google's trademark policy strikes a proper balance between trademark
owners' interests and consumer choice and has been validated by prior
court decisions," a Google spokeswoman says.

Google acknowledges that piggybacking occurs and says
that when it gets complaints, it investigates the claims and tries to
stop the practice. "We have a long-running policy where we don't allow
advertisers to use trademarked terms in ad text to avoid creating any
user confusion," says Richard Holden, a product-management director at
Google.

The other main players in the search-advertising market are Yahoo Inc. and Microsoft Corp. Both say they have policies similar to Google's.

The way search-engine advertising works, marketers bid
on key words in a continuous auction. InterContinental, for example,
bids on millions of key words a day from Google in 11 different
languages. Among them are its own brand names, such as "Holiday Inn
Express" and "Crowne Plaza Los Angeles." When a consumer searches for
any of the words, the company's ad appears above or next to the
results, depending on the amount the company bids and an algorithm
Google uses to determine an ad's relevance to a search.

Companies only pay Google for the key words if someone clicks on their search ad.

For large companies, the frustration comes when their
names and other well-known phrases are used in the text of a search ad
leading to an unrelated site. A recent Google search using the words
"Marriott Atlanta," for instance, brought up an advertiser-paid link
labeled "Marriott Atlanta." That led to www.hoteltravel.com, a discount
hotel-reservations site. But a link on the site for a Marriott hotel
room in Atlanta ultimately led to an error page. Marriott says the site
isn't authorized to use the Marriott name in its online text.

Hoteltravel.com didn't respond to requests for a comment. The link on Google has since disappeared.

The piggybacking that Marriott, American and others
are complaining about is not to be confused with another practice known
as "conquest buys," in which marketers buy a competitor's term so that
an ad for their own product appears when a consumer searches for the
other brand. The difference is, the text of the ad doesn't contain the
competitors' name or slogan. While companies have also protested this
practice, Google's policies allow it, unlike piggybacking.

Piggybacking is a big problem for marketers that do a
significant amount of business online, experts say. If it is allowed to
continue, companies seeking online visitors will be forced to pay more
to advertise in search engines because rising demand will force up the
cost of key words, says Eric Clemons, a professor at the University of
Pennsylvania's Wharton School who follows the search-ad business.

The companies interviewed for this article say they
aren't able to put a dollar amount on their claims of lost business as
a result of the piggybacking. But concerns like InterContinental, which
spends more than half of its online marketing budget on search ads, say
they depend on these ads to generate sales. "Any research will tell you
search is the place where people research travel," Mr. Menis says.

A recent Google search with the words "Holiday Inn
Orlando" brought up a sponsored link labeled "Holiday Inn Orlando." It
led to LowFares.com, an online travel comparison-shopping site.
InterContinental Hotels, which owns Holiday Inn, says LowFares.com is
not authorized to advertise using the Holiday Inn name.

LowFares.com says it bids on millions of search terms
at any given time and often uses Google's automatic system to generate
its advertising copy. "What we rely on Google to do is to essentially
stay within its own policies so that if a given key word or a search
term that we are bidding on should not show up in the search ad, it
doesn't," says Steve Yi, senior vice president of Oversee Marketing
Services, which owns LowFares.com. LowFares.com says if it is notified
of a violation, it immediately takes down the ad.

Some advertisers are demanding that Google and other
search engines create an automatic system that will only allow
advertisers to use other companies' names and slogans in the text of
search ads if they have permission.

But Google says its system works. "We are trying to
balance advertisers and trademark owners and user interests," Mr.
Holden says.
Article Link

Ad Network Collective Media Acquires Audience Targeter Personifi

2008-06-03T12:48:00.001-07:00

Online ad network Collective Media has bought ad targeter Personifi,
the company told paidContent. Specific terms weren’t disclosed,
although a Collective Media rep said it was “an eight-figure deal” in
cash and stock. Last October, New York-based Collective Media raised an
undisclosed first round from Greycroft Partners and iNovia Capital. At
the same time, Collective began collaborating with Fort Worth,
Tx.-based Personifi on audience targeting and “content classification.”
It currently uses Personifi on 50 percent of its campaigns. Collective
scored its most notable assignment in February, when it was chosen to power QuadrantOne, the online newspaper advertising alliance backed by The Tribune Company, Gannett (NYSE: GCI), Hearst and the New York Times (NYSE: NYT) Company
Article Link

Freebase: Dispelling The Skepticism

2008-05-28T23:38:00.001-07:00

Freebase the first product of semantic web company Metaweb, is an open, semantically marked up database of information that we called one of the "10 semantic apps to watch" last year. With $57.4 million in funding, a smart team, and a tech legend in Danny Hillis at the helm, Metaweb is considered to be one of the most serious players in the Semantic Web space. Yet the company's
efforts to date have been met with skepticism. Particularly, people have asked how is Freebase different to Wikipedia? Jamie Taylor, the Minister of Information at Metaweb, spoke at the SemTech 2008 Conference that took place in San Jose last week in an effort to dispel some of that skepticism.

What is Freebase?

Jamie has an interesting title: Minister of Information, and his
primary responsibility is to seed Freebase with information and ensure
the quality of the data. According to Jamie, Freebase is "open shared
database of the world's knowledge."
This sounds the same as Wikipedia, but it is really quite different,
because at the heart of Freebase are the ideas of semantics and
openness via API.

Unlike Wikipedia, which is a free form database, Freebase is structured, where concepts and relationships
are interlinked into a gigantic network or graph. Another important difference is that Freebase is all about its API.
Any information contained inside the database is accessible and can be retrieved via queries. In addition, the data
in Freebase is under a Creative Commons license - meaning that is readily exportable and useful by others.

When it comes to defining the meanings of things, Freebase is focused on community, with collective editing, attribution,
and collaboratively built semantics. This last point is quite crucial - the founders of Freebase believe that meaning
has to emerge from the collaboration between users. As such, Freebase is one of the first experiments of web-scale
social contracts. The site is really focused on the notion that information is not encumbered by licenses and is free to use.

What is in Freebase Today?

Data comes into Freebase from many sources: Wikipedia, Flickr, the
US Department of Commerce, Music Brainz, the USGS,
SFMOMA, the US Exchange Commission, Chef Moz, and many other places.
Right now the information is mostly about people and places, but the
system
is engineered to have a wide range of data types. As an example of
"People" information, there
is a lot of information in Freebase about artists along with their
artwork and place in history.
More esoteric types of information you might find in the database
include airplanes, french cheese, tropical storms in the 90s,
oil companies, and candies.

Freebase also contains lots of other kinds of data and has:

3.4 Million Subjects
750K People
450K Locations
50K Companies
40K Movies
... Over 1K Data Types with over 3K Properties

Data Representation in Freebase

While Freebase certainly has long way to go before it can claim
completeness of information,
its core idea of object representation and linking seems very solid.
Each object in Freebase is unique.
As more information comes into the system about an object, more links
are created about it in the system.
It is particularly interesting how Freebase establishes object identity
and decides that two concepts (or subjects) are the same.

The diagram above illustrates the idea. When a new source of information is added to Freebase, it is parsed into
entities and facts. The new information is then cleaned up and is merged with the existing system. But
the merge only occurs if the system determines that the two bits of information are really about the same subject (in
this case Leonardo Da Vinci). This is a powerful approach which allows Freebase to grow the knowledge around individual
subjects. What is also interesting is that Freebase allows human editing to reconcile situations when the system
is unable to automatically link the two concepts together.

Each permanent object in the system has a GUID - a unique
identifier, something like this: #9202a8c040000064.....
The identifier can be used to refer to the object via URL and via
queries. In addition to the GUID, there are other
ways to refer to the object, for example,
http://www.freebase.com/view/en/leonardo_da_vinci. Beyond that, there
are even other
aliases, for example, you can refer to a public company by its stock
ticker symbol. But regardless of the reference, the key point is that
you end up with the same, unique node in the system.

Freebase also has the ability to create new domains and types that describe new concepts, for example, science fiction movies.
There is a way to attach new data types to the existing domains, and then these types can be shared and used by other users.
The idea is that you can model things with the fine grained resolution that you need and then you can invite people
to help you refine and evolve your models. An example is the motorcycle community, which evolved out of an effort led by
one guy and who was then joined by others, and has since been promoted to the top level. The community process
is about merging private types to build common models.

What Can You Do With Freebase?

Freebase is not a formal system, it is not a reasoning engine, it is just a knowledge repository, a database.
To query Freebase you use the Metaweb Query Language (MQL), which is based on JSON. The language is meant to be very simple
and it is actually very interesting as well. The idea is that you fill out a tree which represents a partial
graph with pieces that you know and then the system basically fills in all the slots that you left blank
and delivers back all possible subgraphs.

For example, say you are watching a movie and you can't tell what it
is.
You know that the movie stars Patrick Swayze and an actress who was
also in "Tank Girl." So you create a movie query and express all these
facts, using JSON-style syntax.
And when you run the query you get back that the actress is Lory Petty
and the movie
is "Point Break" and you also get links to IMDB. So the query and the
results have the
same structure and to find matches you simply traverse the set of
results that is returned.

Building on this example, Freebase is really meant for complex inferencing queries, the sorts
of questions that Google has no way of answering using its statistical frequency algorithms.
For example, what US senators took money from a foreign entity? Turns out that both Barak
Obama and Hillary Clinton received donations from UBS AG, based in Switzerland. That is a complex
inferencing query that needs to be expressed in a query language before it can be answered
and so questions of this nature are outside of the reach of any search engine -- and Wikipedia too, for that matter.

Resources

There is quite a lot of activity going on around Freebase today.
Many enthusiasts are building small proof of concept applications
showcasing what can be done
in the future with this powerful database. You can stay on top of the
cutting edge stuff coming both from the Freebase team and community at:
http://download.freebase.com and
http://research.freebase.com

Article Link

You Play a Game, Computers Get Smarter, AI Starts to Work

2008-05-23T11:12:00.001-07:00

Last week a new site called Gwap was launched by Carnegie Mellon's School of Computer Science.
The site offers an array of multi-player games that have a benefit
beyond just that of momentary distraction or amusement. These games are
helping improve image and audio searches, teaching computers to see,
and enhancing AI. However, all that won't matter to the players
because, as it turns out, these games are actually fun.

About Gwap

Nicholas Carr blogged about Gwap
a couple of days after its launch, noting that "one thing the Internet
enables, which wasn't possible before, at least not on anywhere near
the same scale, is the transfer of human intelligence into machine
intelligence." In Gwap, which stands
for "Games With a Purpose," that transfer of intelligence is done by
getting people to do the routine chores that computers don't know how
to do - chores like tagging photos, describing songs, and outlining
objects, as well as transferring a good bit of human common sense to
the machine. The trick to getting people to do these things is to make
the work fun. Hence the games.

The creator of these games is Luis von Ahn, winner of a 2006
MacArthur Foundation "genius grant" and a pioneer in the field of human
computation. Ahn is most notable for helping to develop CAPTCHAs
(Completely Automated Public Turing Test to Tell Computers and Humans
Apart), those somewhat annoying but rather effective distorted letter
puzzles used millions of times each day. Last year, he also introduced
the "reCAPTCHA," where CAPTCHAs were used to gain access to a web site while also helping digitize old books.

Gwap homepage

The Games

Gwap currently features five games, one of which is an old classic called the ESP Game.
In the ESP game, two players view the same image and try to guess words
that the other player would use to describe it. Google licensed this
technology and launched Google Image Labeler to help improve the quality of their image search results.

The four new games include:

• Matchin, a
game in which players judge which of two images is more appealing, is
designed to eventually enable image searches to rank images based on
which ones look the best.
• Tag a Tune,
in which players describe songs so that computers can search for music
other than by title - such as happy songs or love songs.
• Verbosity, a test of common sense knowledge that will amass facts for use by artificial intelligence programs.
• Squigl,
a game in which players trace the outlines of objects in photographs to
help teach computers to more readily recognize objects.
According to the Carnegie Mellon announcement, von Ahn plans to add a lot of games to the site, saying "we have three more that we'll be launching in the coming months."
He hopes that by having all the games on the same site it will
encourage players to try several different ones. Players also have a
single sign-on and password, Top Player rankings, and online chats,
said von Ahn.
The Human Processor

In his whitepaper entitled "Invisible Computing," von Ahn compared game design to to algorithm creation, saying:

"...it must be proven correct, its efficiency can be
analyzed, a more efficient version can supersede a less efficient one,
and so on. Instead of using a silicon processor, these "algorithms" run
on a processor consisting of ordinary humans interacting with computers
over the Internet."

In other words, we're the processor. The machine is us.

This concept isn't entirely new - Amazon's Mechanical Turk,
for example, pays people to contribute their time to work on small,
simple tasks called "Human Intelligence Tasks," or HITs. However,
unlike HITs, which can sometimes be boring or tedious, the games on
Gawp are actually fun - and they don't feel like work.

Some believe that human powered processing is the next big wave for computing. You could argue that Mahalo, the human-powered search engine is an example of this. (Though others call it a human-powered link farm.) Perhaps a better example is ChaCha,
the mobile Q&A service that uses human guides to respond to
questions called or texted in from your cell phone. We've also covered
other human-powered services on RWW in the past, like the Galaxy Zoo
and Stardust@Home project, among other (our coverage here). Many of these efforts have tried to incorporate an element of "fun" into what is actually work.

Whether Gwap will actually gain
momentum and get a large number of people involved is yet to be seen,
but it is definitely has potential to help teach computers the things
they can't do for themselves....yet.

Article Link

Goldman Internet: Google: New Sources Of Ad Growth; Mobile Complements Desktop; No Cash-Back Plans

2008-05-22T18:18:00.001-07:00

Google’s (NSDQ: GOOG)
growth rate and all that entails—click through rates, query growth, ad
quality, etc.—continues to be the subject of a lot of disagreement and
debate. Q1 turned out solid, but there’s not going to be a letup in the
key question facing the company: are its heady growth days done for?
Speaking at the Goldman Sachs Ninth Annual Internet Conference, Nick
Fox, Director of Business Product Management at Google tried to to pull
back the thicket: “There are significant opportunities across the
board. “He ticked off four drivers of revenue: query volume, ads per
query, quality, price per lead, and noted for example that many queries
still don’t have ads running against them: ”A small portion of our queries have ads… we see that as a pretty significant opportunity.”
The challenge is to convince advertisers that they could be making
money by bidding on more keywords than they are. Other opportunities
include helping companies improve the quality of their landing pages
(so they get more value from their ads) and rethinking the ads that go
next to each query. Fox’s example: Amazon.com (NSDQ: AMZN) ads for the book Harry Potter don’t generate many clickthroughs because searchers often are looking for something other than the book itself.

-- Social networks: “What I would say on social networks…
the whole industry has been surprised at the difficulty of monetizing
social networks.” “We found it more challenging than we expected it
would be.” The difference: “On search you have this amazing thing: the
query… on a social network, you don’t really know (what the user is
looking for).” Other problems: users are doing a lot of non-commercial
things on social networks (he mentioned throwing sheep and playing
Scrabble). Those who are making money: “scummy things” like pyramid
schemes and things that trick users into downloading ringtones.

-- Mobile: “Mobile is much more similar to search than a
social network is… mobile actually monetizes quite well.” New devices
are key: iPhone users search at a rate of 50x normal users. Also, on
mobile, there’s high volume on weekends and days when volume is low on
desktop. So the mobile business complements the core business.

-- DoubleClick: Neal Mohan, Director of Product Management
for Ad Serving Platforms, discussed how DoubleClick (Mohan came in via
the acquisition) would complement the core business. The main goal:
more choice. Through the integration, Google can help publishers figure
out how best to monetize a page, whether it’s through text or display…
though the primary focus is on bringing more monetization choices to
publishers on the display side.

-- Microsoft’s (NSDQ: MSFT) cash back: Fox: “A lot of demand from advertisers to advertise on a CPA basis.” For consumers: ”No
plans to pay users to use our products… our fundamdental belief is that
we should compete by building a great user experience.... that’s the
focus, rather than paying users nickels and dimes.”

-- User targeting: Not focused on building up profiles of
users for better ad serving. But there are opportunities to improve
yield by looking at query patterns. For example: If you search for
‘Italy Vacations’ and then search ‘weather’ you can improve yield on
the latter search by taking into account the former.

-- Google’s apex: A questioner (representing investors)
wanted to know about the talent issues and whether we’d seen Google’s
corporate apex (arguably the biggest question there is): “We’ve seen
extremely low turnover and churn in employees… they tend to get a lot
of attention cause it’s Google.” Reality: level of churn is actually
low. Mohan: No key DoubleClick employees have left.

Article Link

SemTech Panel: Investor Opportunities and Pitfalls

2008-05-22T18:14:00.001-07:00

Eghosa Omoigui (Intel): Intel Capital is the investment arm of the Intel Corporation,
and it has $3 billion under management. 93 invest professionals are working with 422 companies on deals ranging
in size from seed stage investments to hundreds of millions of dollars. The most recent investment was in Endeca, which specializes in content aggregation and management for enterprises. We have a lot of interest in the
semantic space and have been following it for over five years. There are several deals that are currently pending
that I can't name. One is doing dynamic, large-scale ontologies - taking content and overlaying dynamic
ontologies. The company is based out of Asia and will be announced soon.
Question: How do you expect to make money on the Semantic Web? What are the monetization strategies that you are seeing?

Stephen Hall (Vulcan): It really depends on the
company and the business model. Twine will be partially
monetized via advertising, but there will be other components. In
general, Vulcan quite likes the advertising space, which will be
doubling to
$40B with room still for growth. Semantic technologies that are
impacting ad quality is another interesting area.
There are companies in that space, for example Dapper, that are leveraging semantics to deliver
more targeted, more contextual advertising.
Amanda Reed (Palomar): There are several business
models that we are seeing out there.
Most often, it is a web service or service offering. There are licenses
in the enterprises as well, of course.
In addition, we are seeing new models where services are packaged into
boxes and bundled with software. This is
a hybrid model that seems to be interesting to many enterprises because
of the finer control. It is important for startups to figure out how to
match the value proposition to the business model.
Article Link

Casual Games Get Ad-Driven Widget For All

2008-05-14T11:54:00.001-07:00

The thumbnail on the left depicts a service that, if it fully
delivers as promised, has a decent chance to transform the web as
profoundly as AdSense. Launching today, it’s the NeoEdge Game Channel,
an ad-driven game widget from NeoEdge, the Mountain View startup we wrote about last November.
Its Game Channel is a kind of videogame jukebox offering a selection of
titles from several genres; when you click to play, NeoEdge’s
advertising feed kicks in as the game loads.
Here’s the thing that excites me most: Pretty much any web
owner (including bloggers) can install this plug-and-play widget on
their site, and share advertising revenue with NeoEdge. (Hence the
comparison to AdSense, only fun and interactive.) The social network
PerfSpot is using the Channel, so you can go here to get a sense of what it’s like.

For site owners, NeoEdge Marketing VP Ty Levine told me, “This is a
way of keeping people on your site.” It also gives them a new revenue
stream; a site with 200,000 unique users, Levine estimated, could earn
$1,000 to 5,000 a month, depending on the owner’s sponsorship deal and
revenue share. With some 400 titles in the NeoEdge library, the channel
can be customized with selections that fit a site’s demographics and
branding.

As with AdSense, the Game Channel widget gives site owners far and
wide an incentive to install it — and gives casual-game developers
reason to keep creating content for it. Whether NeoEdge can capture and
hold this market depends on its ability to deliver a diverse and
compelling library of games — and to stay ahead of its competitors.
With so many players rushing into the ad-driven casual game space, I
wouldn’t be surprised to see similar services, purporting to offer
better titles and/or revenue shares, launched by NeoEdge’s rivals. Let
the casual game wars begin!

Article Link

BrandTags - Half Hot Or Not, Half Poetry - About Brands

2008-05-13T08:11:00.001-07:00

Marketing consultant and web connoisseur Noah Brier has launched a simple but fascinating project called BrandTags.net.
The idea is that visitors are shown a logo, we respond with a word or
very short phrase that we associate with the corresponding brand and
then we're given the option to view all the "tags" given a brand in a
big tag cloud.

It's a simple but elegant and interesting experiment. The tag cloud
for Walmart, for example, shows that the word "evil" is pretty big -
but "cheap" is even bigger! We've embedded the site below in an iframe
if you want to try it out yourself.

Nice Touches

One of the nicest touches here is how Brier displays the tags in
oversized font. By requiring users to scroll down the page, we get to
enjoy thinking to ourselves "surely this is the largest tag for this
brand" - only to scroll on and find that another term is even more
frequently associated with that company!

One thing that would be nice would be to have comments be enabled at
the bottom of the tag cloud screens. That way people could explain to
those who don't know why, for example, the word "racist" is so large on
Tommy Hilfiger's page.

BrandTags may not be the kind of site that consumers regularly
return to, but it's fun to try out once. Obviously it's something that
companies would have a real interest in checking out, especially if it
takes off. Brier reports that it's recieved over 77,000 tags in the first weekend it was live.

We've got it in an iframe below, just because if iframes are good enough for Google Friend Connect
then gosh darn it, they're good enough for us too. Click through some
brands on there...you just might find ours and get to offer a little
feedback!
Article Link

Metrics: Trouble in Online Adland

2008-05-13T08:08:00.001-07:00

PubMatic, a Palo Alto, Calif.-based start-up focused on online just released its PubMatic AdPrice Index
based on data from over 3,000 publishers and billions of ad
impressions. The findings of this month’s report: the US economic
slowdown is beginning to impact online advertising in a big way, with
overall monetization dropping by 23% - 38 cents eCPM in March vs 49
cents eCPM in March. Not a big surprise since housing related
advertising was big on the web. Even electronics retailers are feeling
the pinch and cutting back.

* eCPMs for large Web sites (more than 100 million page views per
month) dropped dramatically by 52% from 38 cents in March to 18 cents
in April 2008.

* Medium Web sites (1 million to 100 million page views per month) were
nearly flat, with monetization dropping from 34 cents in March to 33
cents in April.

* Small Web sites managed to improve their monetization, increasing from $1.17 in March to $1.29 in April.

The overall trends you pick up from report are not that surprising.
For instance, the improved monetization of small websites because they
have more focused content presents more targeted advertising
opportunity. Again no surprise that Social Networking led the plunge
with monetization dropping 47% from 37 cents in March to 19 cents in
April, below January lows of 22 cents. Too much damn inventory.

Article Link

Powerset Launches Showcase For User Search Experience

2008-05-12T11:31:00.001-07:00

Today marks another milestone for San Francisco based contextual search engine Powerset.
They’ve launched a showcase for their user search experience -
effectively the search engine minus the web crawl. For now, Powerset
queries only Wikipedia and augments results with data from Freebase. The product launch comes just a day after reports that the company is being shopped to potential buyers by investment bank Allen & Co.

I have been able to test Powerset via their labs site for the last
few weeks. I wrote about it last month, and the version that just
launched is very similar.

There is no way to look at Powerset today and determine if it can be
as disruptive to search as Google was when it launched almost a decade
ago. That’s because it only queries Wikipedia, and so there is little
need for proper ranking algorithms to sort the good from the bad
results.

But what user can see is how effective a way it is to gather
information quickly. For someone doing research, Powerset effectively
removes a number of steps towards getting to the final information. It
is particularly effective when the information needed is on many
different web pages.

For example, a query on Powerset of “when did earthquakes hit tokyo”
yields stunning results. Try this query at Google or even wikipedia to
compare - instead of just picking out keywords that are in your query
and on a web page, Powerset is actually making some sense of the
content included in the wikipedia pages:

The way that Powerset returns queries means that answers are often
found in the result snips, as above. They are also structuring a lot of
the Wikipedia and (and already structured Freebase) data and inserting
it into results. So a search for “Bill Clinton” shows results, but also
shows Freebase structured data along with additional query refinements
to get to more information. The important thing below isn’t the
structured data in the results, its the fact that you can click on the
action words and drill down into very specific queries (to find, for
example, what bills he signed, or which Supreme Court justices he
nominated, or who he slept with).

Powerset is indexing web pages much differently than normal search
engines, which generally just record content to match against keyword
queries. Instead, Powerset is trying to understand the content on the
page so that it can be matched meaningfully to queries later. Even
queries that don’t use matching words.

Indexing the web is expensive, though, and Powerset’s way of doing it requires even more time and computing power dedicated to a web page. That’s why they say they aren’t indexing the entire web yet - the company has raised just $12.5 million
(plus another $8 million or so in bridge loans from investors). To
index the web will require a new round of financing (see the first
paragraph above about their sale/financing efforts).

Powerset is has taken a lot of criticism for their goal of trying to redefine how people search the web (including from us).
But their lofty goals are what makes Silicon Valley so great - succeed
or fail, Powerset is trying to do something pretty spectacular.

Article Link

Decoding the VC Poker Face

2008-05-10T17:49:00.001-07:00

There are a lot of different words that can be used to describe the
venture capital community and its relationship with entrepreneurs. Many
of them, however, cannot be printed. For example, I once heard a VC say
to an entrepreneur: “It would be easier to build a nuclear reactor at
[UC] Berkeley than to execute on this idea.” And I once heard an
entrepreneur say of a VC: “If I ever see that guy in a parking lot, I
will speed up to hit him.” You get the idea.
The Sand Hill Road crowd does have a reputation. In an unscientific
opinion poll, the collective sentiment was probably best described by a
friend of mine this way: “Let’s just say you probably don’t want to
grab a beer with a venture guy, or want your sister to marry one.”
Yikes, I am a VC. No one wants to have a beer with me? Where did this
rap come from? I think it all starts with the clumsy poker that gets
played out in pitch meetings.

VCs are trying to get big returns for
their limited partners. That’s all. If they can save the world or cure
cancer in the process, even better — but that’s not their goal.
Entrepreneurs, on the other hand, are trying to convert their dreams
into reality. We all have deeply “vested interests” and all these
intents converge in the pitch meeting, where everyone shows their
proverbial “poker face.” (According to Joe Navarro, a former FBI counterintelligence agent and author who specializes in decoding nonverbal communication, “double-thumbs” is the “tell” for a player happy with the cards he’s seeing.)

Pitch meetings go something like this: Entrepreneurs bound into a
conference room, show their PowerPoint deck, bear their souls, ask for
a few million dollars and leave, not quite knowing where they really
stand. And so they wait. And wait. And wait. Some receive the big
checks to get their company off the ground, but more often than not,
they wait only to be rejected. Worse, they never hear anything at all.
Big checks are rare, so this scene of deafening silence is played out a
hundred times a day in the venture world.

But from what I’ve observed on my end of the table, VCs can respond
to a pitch in one of three ways — each of which is fraught with peril:

Enthusiasm: If the VC is excited about the idea
and the prospects for the company, the entrepreneur believes the money
is sure to come. If the company is funded, hallelujah, but if the money
doesn’t come, the entrepreneur feels betrayed and led on — pins in the
proverbial VC voodoo doll.
Criticism: When a VC tries to make recommendations
or give feedback, it can be like telling the entrepreneur the baby is
ugly. Often there is a sense that the VC, who probably doesn’t know
much about this business, just criticized the best idea since alligator
clips.
Stoicism: If the VC doesn’t say much or react at
all, the assumption is that the VC didn’t pay attention and doesn’t
care., prompting the entrepreneur to think, “What a waste of time,
money and stress.”

It’s a quandary that every VC has to deal with. Other than handing
over a term sheet straight away, any response risks damaging the
VC-entrepreneur relationship. Can you blame us for sitting still and
saying little?

Even Warren Buffett once famously said: “When the phone don’t ring,
you’ll know it’s me.” Of course, even if the phone don’t ring right
away, it doesn’t mean we’re going to say no. But saying as little as
possible is still the most efficient, and benign, option we have —which
is why it’s the response most entrepreneurs get, most often.

So, in your next pitch meeting, expect the VC poker face. We might
appear indifferent, or stoic, but don’t read too much into our
immediate reactions. (Except maybe those double thumbs.) Like the old
saying goes, “Patience is a virtue.” And champagne gets better with
time. Meanwhile, I will be careful in parking lots.
Article Link

Powerset’s Dilemma: Go For It, Or Sell

2008-05-10T17:19:00.001-07:00

San Francisco based search startup Powerset will be launching shortly. For now, Powerset will query only Wikipedia and Freebase. But as I said when the product was demo’d to me a few weeks ago, it is compelling nonetheless: “When
I tested the service I had something very similar to the “Aha!” feeling
that ran through me the first time I ever used Google. In short, it is
an evolutionary, and possibly revolutionary, step forward in search.”
But now the company may have to make a hard decision: sell now to
one of the big Internet players looking for a point of differentiation
in search, or take the risk of going it alone and possibly getting a
huge, multi-billion dollar payoff down the road.

According to our sources, Powerset is exploring both options. They hired Dave Wehner, a Managing Director at investment bank Allen & Co. (he’s the guy who sold Bebo for $850 million to AOL, and is working on LinkedIn’s huge financing), to represent them in a possible sale or financing.

CNET is reporting
today that Microsoft may be bidding for the company. According to our
sources, those discussions have been going on for well over a month,
and their most recent bid is “around $100 million.”

That probably won’t be enough to convince Powerset and their investors
to sell. The big question is whether Google will step in to try and
keep Powerset out of Microsoft’s hands, and start a real bidding war.
That could drive the price significantly higher. Google, however, has publicly dismissed the notion of contextual search as a revolutionary step forward.

Whether that’s true or not is yet to be seen. But Powerset may find
itself as a valuable chess piece in the emerging search war between
Google and Microsoft. And if Google bets wrong, they could find their
commanding lead in search eroded over time. A relatively small
acquisition to keep Powerset of of Microsoft’s hands, even if just a
hedging move, may suddenly be attractive to them

Article Link

i360 Adds Semantics to Everything

2008-05-06T15:20:00.001-07:00

Tony Sukiennik believes the power of the
people trumps the power of the algorithm when it comes to the
development of semantic technology. His company, infoGenome,
a startup that has been in stealth mode for about four and half years,
wants to harness that power by making semantics easy via its innovative
drag-and-drop functionality. The i360 software he's developed is
essentially the "Mahalo of semantic apps," relying on human knowledge
to add meaningful layers of metadata to the information we work with
every day. With i360, you can add semantics to everything.

People-Powered Semantics

When you're doing a web search, you instantly know what information
is relevant and which isn't. At i360, they call this flash of
understanding an "instant of information insight." In
a split second you can identify something as being useful, but the
problem in today's world is that there are too many ways to store that
information - you can tag it, bookmark it, save it to file, email it,
blog about it, share it with others, and so on. Overwhelmed by choices,
busy people often choose to "just remember it," a decision that leads
to the inevitable: forgetting. The human mind is already
overloaded with input, so isn't the ideal repository for storing all
the complexities of our information-filled lives.

Instead, software should be doing the remembering for us. That's
where i360 comes in. The application itself, self-funded but seeded by Bill Campbell,
Google advisor and chairman of Intuit, is really just a prototype of
this conceptual idea, but one that Tony hopes Google might be
interested in. Or maybe Microsoft. (He plans on proposing his ideas to
both companies to see who bites.)

What the i360 software does is provide a way quickly add mark up and
add meaning to the data you're working with - be it a link on the web,
an email, a file, or anything - with semantics. This process is done
via a quick drag-and-drop into the app.

That isn't to say that this technology is using semantics in the
technical sense of the word - it's not about converting everything into
machine-readable formats for use on the semantic web; what it is doing,
though, is adding semantics to everything by
assigning meaning to that email, that PDF, that link, that note, that
spreadsheet, etc. Meaning that only you, and not a computer or an
algorithm, could know. In doing so, the technology is not focused on a
semantic web per se, but a semantic database of your own, made up of
not only web links, but also files, contacts, emails, keywords, and
more, and knowing how they all are associated with each other.

Although Tony believes that we shouldn't give up on the algorithm -
by all means, research should continue in that area - he feels strongly
that his technology, which taps into the power of the human brain,
gives people the ability to organize and assign value to information in
a way that a machine cannot.

How It Works

What i360 does is complex and sort of hard to understand if you're
not working with it directly. In fact, it's easier to understand if you
work backwards from the end result of using the technology.

For example, imagine you do a Google Desktop Search or a Google
Enterprise Search, and, instead of just links to items that match
keywords, you get something a little more like this:

Augmented Search Results

You can see that by using the software, you've managed to associate people, documents, notes, and more with the original file.

The process of making these associations is via a "fire and move on"
drag-and-drop methodology. See a useful link? Drag-and-drop it into
i360. Highlight some text and drag and drop that as the item's
description. Click a button and a screenshot is added automatically.
Now associate that link with a person. That person with a Word
document. That document with a search and an email...and so forth, and
so on.

Saving a Web Page

Within a company, the i360 technology can also be used to work with
internally running applications, like Microsoft's SharePoint, for
example...or any other application to which you have the cooperation of
the vendor or access to the app's code base. With 100 lines of code,
information from these applications can pass data from the app itself
back to the i360 environment as just another informational nugget that
can be associated with a person, a file, or anything else.

There's more this application can do, too. For example, searches
themselves could begin in a more structured format - focusing on just
what you're interested in finding (see example below). Each item you're
researching can be available with one click from a sidebar - no saving
to del.icio.us required.

Focused Searching

The results of your searches can then be transformed into a new file
with links (see below), retaining the same structure of your own
headings and listed items, and that file can then be emailed to someone
else or published as a page available publicly on the web. If you find
something new to add to it, be it another link or a file or anything
else, you can just drag-and-drop that new item to i360 to update the
results on the fly.

Formatted Results Can Be Shared With Others

A project team in the workplace could use the application together,
associating people and emails and files and searches with each other,
creating a database of content surrounding their project. A year later,
an employee in another department could search via their company's
enterprise search and find all the information in that project and how
it all interrelates, even if all the original team members had moved on
to other jobs in other companies. No more would "everything is stored
in that one guy's head" be the norm. Employees could move on, but the
data they created or found, and the way that data relates to other
data, would remain.

Where It Needs Improvement

As a concept - simple drag-and-drop semantics - the technology is
fascinating. In practice though, it's still very rough. You couldn't
install i360 and be off and running in minutes - you would still need
training to know how to use it as it exists in its present form. It
today's world of bubbly web apps, anything that isn't immediately
intuitive isn't going to be adopted by the majority of users. The whole
Enterprise 2.0 trend is about bringing the simplicity of consumer
applications into the corporate world, and, although that is this
software's goal, unfortunately, I can't say that it achieves it.

The UI itself is confusing. They've made some interesting choices -
the address bar is at the bottom, for example; buttons are labeled with
things like "E+" - a reference to the name of a portion of the software
suite, but one that is meaningless to the new user. The graphics and
fonts used look ancient.

The UI

Conclusion

However, that being said, if you can look past the UI to the
underlying idea, there's something about this concept - human-powered
semantics - semantics over everything - that could be great, if someone
could just make it pretty. It could even be the future.

Article Link

Tagging Goes Semantic With Zigtag

2008-05-06T08:23:00.001-07:00

Bookmarking and tagging websites can be a messy business. Zigtag,
a new sidebar-based plugin currently in private beta, is looking to
offer clean and streamlined bookmarking and tagging. The plugin
differentiates itself from the multitude of other tagging services by
introducing a semantic dictionary of over two million tags. The basic
idea: each tag will be defined, and that synonymous tags (say, New York
City and Big Apple) will be linked together automatically. That should
make finding your bookmarks easier later on.

After entering an appropriate tag for a page, the user is presented
with a list of matching keywords, each of which has been defined in
Zigtag’s database. For example, after entering “Apple” into the search
field, I was able to choose from “the computer company”, “the pomaceous
fruit”, and “the record company”, among others. The process is painless
and the integrated dictionary is fairly comprehensive. If you happen to
stumble across a term that isn’t defined, you can easily request to
have it added to the dictionary (and can place your own temporary tag).

Besides the tagging functionality, Zigtag also offers a Digg-like
thumbs up/down system, which influences a list of popular bookmarked
sites on the Zigtag homepage. The site also has some basic social
networking features, allowing for group-specific privacy settings and
sharing with friends. There are a number of other handy features,
including “Share Page” that lets you send snippets of images and text
on a page to friends through email.

My experience with Zigtag was promising, but the plugin still needs
some work. Using the sidebar can be pretty unintuitive, especially when
you’re searching for something using multiple tags. And many of the
synonyms I tried weren’t in the database yet (No mention of Bruce
Springsteen for “The Boss”).

Zigtag’s biggest obstacle is the slew of other social bookmarking sites already available (Delicious, Diigo, and Twine,
to name a few). The semantic tagging feature is fairly unique, but its
appeal is still untested, especially against automated semantic taggers
like Twine. Frankly, a lot of people are just going to stick with the
simple but effective Delicious interface.

Article Link

Eric Schmidt: Google Has Secret Plan To Mint Money With YouTube (GOOG)

2008-04-30T22:25:00.001-07:00

CNBC is hyping a Eric Schmidt/Maria Bartiromo interview that airs today at 4pm, but they're already released the transcript from the chat, taped yesterday.

Predictably, there are no shockers: Eric stays on message about
Google's growth opportunities, costs, etc. He says the DoubleClick
integration will take about six months. And he says he doesn't have any
idea what will happen with Microsoft-Yahoo, but sure hopes Steve
Ballmer doesn't get his way. Etc.

Most interesting to us: His allusion to new, previously undisclosed
plans to extract money out of YouTube, which cost Google (GOOG) $1.65
billion in 2006 but hasn't generated more than a trickle of cash to
date:

BARTIROMO: Which is a huge priority,
clearly. A lot of people feel like this is an amazing opportunity for
you. So, as far as monetizing that business on YouTube, do you think
that takes a year? Does it take the next five years? What's your time
frame on that?

Dr. SCHMIDT: We believe the best products are coming out this year. And they're new products. They're not announced. They're not just putting in-line ads in the things that people are trying.
But we have a number--and, of course, Google is an innovative place.
The Yahoo! team are trying various new forms of advertising, ones which
are much more participative, much more creative, much more--much more
interesting in and of themselves. Google believes that advertising
itself has value. The ads literally are valuable to consumers. Not just
to the advertisers, but the consumers.

Article Link

AOL Dumps Ad.com Targeting Tech For Tacoda

2008-04-30T22:24:00.001-07:00

Tacoda's top execs are gone,
but AOL still likes its behavioral targeting technology enough to adopt
it across all of its ad sales unit, Platform A. That means dumping
competing technology from Advertising.com. "We'll replace all of
Advertising.com's existing behavioral technology with Tacoda's
behavioral product," says Platform A president Lynda Clarizio, a former Advertising.com exec.
We were previously under the impression that AOL meant to integrate Ad.com behavioral tech with Tacoda's, and didn't think that much of the idea. So this move, at least, makes sense to us.

The shift to Tacoda will be complete in June, part of the
integration of $1 billion in advertising acquisitions including Quigo
and AdTech. AOL acquired Tacoda in September. Clarizio called the
adoption of Tacoda "a small step forward" in the integration, which
remains an issue for the company.

Time Warner CEO Jeff Bewkes blamed slow integration for AOL's drop-off in display ad revenue in Q1.

Article Link

LinkedIn: We're Selling Ads For $75 CPM

2008-04-30T22:23:00.001-07:00

LinkedIn (SAI 25 #8) may have been trampled by the likes of Facebook (SAI 25 #1) and MySpace in terms of users, but at least it can sell advertising. Kevin Eyres, LinkedIn's managing director for Europe, told IDG
the social network for careerists is earning $75 CPMs (cost paid per
thousand viewers) for advertising in the US and $50 CPMs in the U.K.
Prime reason: the site's average user is 41 and makes $110,000.
Since LinkedIn knows the professional histories of its users, and
can target sales execs, c-level managers, or certain industries, we can
imagine high ad rates for advertisers looking for a business niche.
Still, we have a hard time believing this is an average CPM for
LInkedIn. But we don't have a hard time believing that LinkedIn's
average CPM crushes that of Facebook, MySpace and other social networks
who routinely struggle to get CPMS above a buck.

Facebook (70 million) and MySpace (200 million) have an enormous
scale advantage over LinkedIn (17 million); Facebook in particular is
encroaching on its user base. But if LinkedIn can profitably establish
its niche of working professionals, which advertisers covet, they have
a franchise.
Article Link

What makes a design "Googley"?

2008-04-28T21:55:00.001-07:00
A small team gathered to discuss these questions and define the Googley Design Principles:

1. Focus on people—their lives, their work, their dreams.
2. Every millisecond counts.
3. Simplicity is powerful.
4. Engage beginners and attract experts.
5. Dare to innovate.
6. Design for the world.
7. Plan for today's and tomorrow's business.
8. Delight the eye without distracting the mind.
9. Be worthy of people's trust.
10. Add a human touch.
Article Link

Google Experiments With Next Generation Image Search

2008-04-28T14:34:00.000-07:00
Two Google scientists presented a paper (pdf embedded below) at the World Wide Web Conference in Beijing last week that outlines their vision for the future of image search.

Notably, the new image search technology doesn’t just index text associated with an image in determining what’s in it. Google is now talking about using computers to analyze the stuff in photos, and using that to associate it in a ranked way with keyword queries. In effect, they’re talking about something similar to PageRank for images (but without the linking behavior).

Today when we talk about search all we really mean is text search. That’s sort of like only being able to see in one color. And when we search for image, video and audio content, the only data that search engines use to do those searches is the text that is associated with those files. That’s like trying to describe the color green when you can only see in red.

To date Google and others have spent a significant amount of effort on making the metadata around rich content better. One example of this is Google’s Image Labeler game that uses human labor to properly tag images. Innovative, yes. But it’s still trying to “describe green” when you you can’t actually see it.

Once computers are able to analyze rich content as easily as they can analyze text, a whole new dimension to search will emerge. Humans will no longer be needed to do the heavy lifting in describing what is included in rich content, and that means that content will no longer be invisible on the Internet.

PageRank For Image Search

Googlers Yushi Jing and Shumeet Baluja argue that Google is now ready to see beyond text. In their paper they talk about their efforts to apply state of the art image recognition software to figure out what stuff is in an image. “Commercial search-engines often solely rely on the text clues of the pages in which images are embedded to rank images, and often entirely ignore the content of the images themselves as a ranking signal,” they say. Their experiments in actually digging into the images themselves “show significant improvement, in terms of user satisfaction and relevancy, in comparison to the most recent Google Image Search results.”

Google is looking at the visual characteristics of popular images and then determining rank based on similarities between images. In the figure below, the largest two images contain the highest rank.

Article link