Wednesday, January 31, 2007

Yahoo Update

Newspapers are all reporting today on Yahoo's announcement to launch 100 brand specific websites. This is a step in line with a vertical content strategy wrapped into search that i was discussing yesterday and in previous posts (here and here). It is intriguing that they made this foray using brands such as Harry Potter rather than vertical categories such as Medical or Finance. I guess their assumption is that the brand sites are highly monetizable with CPC and comparison shopping type tools.

This excerpt from Seeking Alpha's (Benchmark invested) Morning news summary says it all.

"Yahoo plans to unveil 100 sites as part of its new initiative called "Brand Universe," Yahoo's head of games, entertainment and youth properties, Vince Broady, said yesterday.yhoo The sites will be part of Yahoo's expansive network of online content and will draw on already existing content as well as content created specifically for the new sites. The company has already built a Brand Universe site around the newly released Nintendo Wii; yesterday it announced plans for six more themed sites on Harry Potter, video games Halo and the Sims, television shows “The Office” and “Lost” and Transformers toy line, TV show, comic books and the upcoming movie. In terms of cooperation with the companies Yahoo will be promoting through Brand Universe and hopefully (for its sake) monetizing through targeted advertising, Broady says: "We'd like to work with brand owners... but we don't necessarily need [them].""

The Kiss Everyone Is Waiting For

Israel is in a pathetic political state. Today, the courts will decide whether former Justice Minister Chaim Ramon is guilty of sexual harassment for kissing a soldier. The media has laid out the claims. All agree there was a kiss, the question is whether she asked for it (figuratively) and whether he thrusted his tongue. Sounds pretty silly. Like a high school romance question. Well it would be, were it not for the fact that our next three years of government will be determined by whether Ramon did or did not thrust his tongue. (Sodom and Gamorrah I ask you?)

Prime Minister Olmert is hoping that a victorious Ramon will kick off a turn around in his plunging approval ratings and more importantly enable him to shuffle his ministers. Yes, MK Ramon's tongue will determine who is the best candidate to be the Defense Minister, Welfare Minister and, of course, Justice Minister for the State of Israel. What is more remarkable is that none of the media thinks that this tragicomedy is obscene!

Tuesday, January 30, 2007

Are Content Companies synergistic with Search and Portals?

Interesting post by Bill Tancer at Hitwise looking at the increase in YouTube traffic following integration with Google Video Search. Here is an excerpt (see the post for the nice charts):

"To what Degree was Google Video responsible for that 18.5% Increase? On Wednesday January 24th, the day before the index integration went live, Google Video was responsible for .73% of all of YouTube's traffic, by Saturday Google Video was responsible for 8.68% of all of YouTube's upstream traffic (MySpace is still the #1 upstream provider of traffic to YouTube @ 17.54% of all traffic for that same day)."

I think this potentially points to a broader opportunity for the search/portal companies. If you bring in quality content (participatory media especially) into a search context and deeply integrate it, you can reap amazing synergies. If you think about this from a Yahoo perspective (something I have blogged about before), If they grabbed some vertical content companies and deeply embedded them in their search results and other parts of the network, they might yet see a big increase in page views. Now if they could monetize the time spent on their site better (see this very interesting post on Seeking Alpha (Benchmark invested) about time spent on the top 20 internet sites).

From a start up and a Google perspective, these kind of synergies certainly expand the scope of types of properties that Google could acquire to include interesting, hyper-growth content businesses. It will be interesting to see if this is an anomaly or portends something for the future.

Thursday, January 25, 2007

Scoop Journalist Get Together - Citizen Journalism Goes Mainstream!


Scoop.co.il, Israel's citizen journalism site, (where I am deeply involved) will be holding its first ever get together of all its citizen journalists from throughout Israel. In not a small bit of irony and vision of the future, the get together will be held at the "Journalist House" in Tel Aviv which is the anchor of Israel's mainstream press. I posted the schedule for the conference below in Hebrew (since the gathering will be in Hebrew). If anyone would like to attend (space is very limited), just let me know in the comments section or by sending me an email.


כנס הכתבים הראשון של אתר "סקופ" ייערך ביום שלישי, ה-6.2.07, בין השעות 16:30-20:00, בבית העיתונאים על שם נחום סוקולוב בת"א, רחוב קפלן 4 (פינת אבן-גבירול).

לוח הזמנים לכנס


16:30-17:00 – התכנסות ורישום

17:00-17:30 – דברי פתיחה וברכות

הצגת תוכנית האתר ל-2007

17:30-18:00 – דבורית שרגל ("ולווט אנדרגראונד"), עיתונאית ובעלת הבלוג הנקרא ביותר על התקשורת בישראל, תספר על להיות "עיתונאית ממוסדת ביום" ו"בלוגרית נטולת עכבות בלילה"

18:00-18:30 – רביב דרוקר, הכתב המדיני של ערוץ 10 ומגיש היומן "שישי", יסקור את התקשורת בישראל מנקודת מבטו ככתב בעל רקע עשיר גם בתקשורת הכתובה וגם בתקשורת האלקטרונית

18:30-18:45 – הפסקה

18:45-19:00 – סיפורה של ידיעה: מצגת אינטראקטיבית משעשעת על מאחורי הקלעים בעבודת האתר

19:00-19:30 – "לעשות חדשות": פאנל כתבים בו יוצגו ידיעות חדשותיות בולטות שפורסמו באתר במהלך השנה האחרונה

19:30-20:00 – חלוקת תעודות הערכה לכתבות וכתב

Yossi Vardi and the Internet


Nice article in today's Globes (Hebrew) about Yossi Vardi's impact on Israel's internet industry and on promoting Israeli tech in general. Compliments do not abound in the Israeli press so this is truly a great piece and well-deserved.

Update: I tried a new link on articles. I also copied part of the article below.

כאורח בוועידת DLD, שוורדי הוא אחד משני היו"ר שלה, אתה נוחת במינכן עם מטען עודף אך מתבקש של פרגון לאיש ההיפראקטיבי הזה. בגיל 70, פחות או יותר, הוא קורע את כולכם, ובלי עזרת מקררי הרד-בול המגניבים שפוזרו בכל אולמות DLD במינכן. ואז אתה נתקל, לראשונה, ביזם, איש תקשורת או איש הון סיכון אפור פנים, שמכלה את זמנו בדאגה אמיתית ליחסיו עם יוסי ורדי. "מה עשיתי לו שהוא כועס עליי ככה?" מה באמת. בטח עשית משהו.

אחר-כך מופיעים מודאגים ב', ג' וד', ובאיזשהו שלב אתה פשוט מפסיק לספור. אתה קולט שלפניך תופעה מעניינת. הנה העדר והנה הרועה; והכבשים, במקרה שלנו, לא נוטות להתעטף בשתיקה. הן מדברות בלי הרף, ובעיקר על הרועה. תרשמו את זה לחובת הרעלת הרד-בול שקיבלתי ב-DLD, אבל זה מזכיר לי, יותר מהכול, דפוסי התנהגות של כתות.

סחורה ברורה ומיידית

ורדי, אל תטעו, אינו רק סופרסטאר שיווקי. הוא מספק, במקביל, סחורה ברורה ומיידית. יזמי ההיי-טק הישראלים שראיתי ב-DLD פשוט לא הפסיקו לעבוד, להתמנגל, לצלול לעמקי הנטוורקינג ולשלות משם עוד ועוד לידים לעבודה משותפת, אפשרויות אקזיט או עוד חברים חדשים חשובים, שיגידו פעם מלה חשובה במקום חשוב, ובעיתוי קריטי. ושלא תטעו, מדובר בקליברים ישראלים אחד-אחד, יחידת העילית של הווב 2.0 כחול-לבן.

Wednesday, January 24, 2007

Google Earth as a Virtual World

Heard an interesting rumor today from an academic who heard through the PhD grapevine...Google is working on turning Google Earth into a virtual world a la SecondLife (full disclosure: Benchmark investment) . That would be an interesting development both for Google. After hearing this, I was struck by the language on the Google Earth website: "One more step to creating a life-like 3-D model of the whole planet.."

Tuesday, January 23, 2007

Jimmy Carter - Too Good To Pass Up

This was passed to me by a friend and was done by a student at Brandeis. So true. Carter was a subpar president, a mirage of a Nobel Peace Prize winner and, as his recent book has shown, not the most intellectually honest peanut in town.

Sunday, January 21, 2007

Israeli Politics - A Second Generation Family Business

I have been racking my brains to try to figure out how Israel's politics and the Israeli army have gotten so bad so fast. Between the corruption, President Katsav's and Justice Minister Ramon's sex and kissing scandals, the resignation of the Chief of Staff due to the military's failure in the war this summer, politically motivated appointments of incompetent ministers (read Amir Peretz) and bureaucrats and so and so on, the situation has become positively dreadful. The Prime Minister has an approval rating lower than any I can remember and is only thought of positively in context of the more pathetic standing of Defense Minister Peretz.

What is stunning is that political appointments and corruption have been around as long as politics have been around and certainly Israeli politics yet, somehow, it seems much worse now. I thought about this for a while and came to what I believe is an interesting perspective. Today's political situation in Israel resembles a family business.

The first generation of a family business, often an immigrant generation, is steeped in values of hard work, passion for a job or a mission and grew up in relatively simple surroundings. The pioneering generation of Israeli leaders were very similar. Formed in the melting pot of physical survival and the agricultural work ethic, they were salt of the earth and born leaders. From Ben Gurion and Menachem Begin to Ariel Sharon and Yitzchak Rabin (whatever you think of their individual political views), they were molded in a rag tag army that quickly became the envy of the Middle East and earned the admiration of generals everywhere due to their leadership. They made the desert bloom under incredibly difficult economic conditions and through financial hardship. They persevered, persuaded and, most importantly, inspired Israelis and Jews the world over to build our land. They were born leaders who knew the struggle of physical and economic survival. These great visionaries, leaders and icons were not corruption-free but they could escape scandal or brush it aside by force of personality or the overall greatness they personified. More importantly, they led through it. Great people, visionaries and executers can overcome the challenges and stigmas of scandal.

However, we are now suffering through the second generation of the family business. These people were once called the princes of Israeli politics. In fact what we have are leaders who were given their positions due to their name or influence and not true leaders. They have tasted wealth and hobnobbed with the wealthy and influential their entire life. They have been brought up in the system. I read this morning an Op-ed by Gideon Levy in Haaretz where he correctly points out that there is no difference between any of the candidates for Chief of Staff. They have no distinctions, nor has any Chief of Staff in recent memory except for Ehud Barak (I disagree with other parts of the op-ed). So true!

We have not escaped the statistics. Just like 65% of family businesses fail in the second generation so too Israeli second generation politicians are failing us. Worse, if we do not wake up soon we will find ourselves in a worse problem, 90% of third generation family businesses fail. And, Israeli politics is a family (mapai) business.

What to do? Metaphorically, sell the business. We need to bring in new management - from the outside. We need an entirely new generation of politicians and army leaders. People whose foremost character trait is leadership and not the environment they grew up in. We need to aspire to greatness, not mediocrity and accommodated corruption. I just finished reading a monograph by Jim Collins, author of Good To Great. In this monograph, he applies the lessons of Good to Great to the social sectors (not for profit). In his words:
"The critical distinction is not between business and social, but between great and good. We need to reject the naïve imposition of the “language of business” on the social sectors, and instead jointly embrace a language of greatness."
The conclusions are the same as in Collin's book on business (check out his website). You need to get the right people (managment) on the bus and the wrong people off. Well, we need to pack up many of the politicians and throw them off the bus before we get bitten by the 3rd generation bug. Let's bring in new leadership from the outside.

Friday, January 12, 2007

Tax Authority Corruption - The System is to blame

I have waited a couple of weeks before writing anything on the Current Israeli Police investigation into senior officials in the Israel Tax Authority (ITA) including Jackie Matza, Head of the ITA and many others. In all over 100 people have been questioned in the corruption allegations.

I have no idea whether they are guilty or whether this is another high profile police announcement that will result in no indictments. What I do know is that the system is so screwed up that it is easy for the police to make allegations and easy for tax collectors or appraisers to abuse the system.

You see, the ITA essentially runs on Assessments made by local assessors, rulings and pre-rulings. There is so little tax code that is codified in law that the system invites abuses and suspicions of abuse. If rulings and pre-rulings are a rare exception in the US, in Israel they are everyday occurrences. The entire venture capital industry rests on pre-rulings and not laws. Many export businesses that have complex global operations get individual rulings. It almost feels in this country like every person and business has their own personal deal with the ITA. In an environment like that, is it any wonder that there is abuse? If you can negotiate an individual deal with the ITA, why not go for the gusto? And, since so much is left up to the assessors and commissioner's discretion, the opportunity for abuse or "generous interpretations" is ever-present. Further, any decision with that much discretion can be interpreted differently by the police and the tax commissioner.

I think this corruption scandal, independent of its individual conclusions, is a clarion call for reform of Israeli tax system. It is about time that we grow up as a country and codify a full tax code much like the USA.

So you see, the system has more holes that Swiss cheese which opens it to corruption or suspicion of abuse. I fear that while the media (albeit meekly) points a finger at the "corrupt" officials or at the over-zealous police, we are overlooking the tax system which is in desperate need of condification.

Jim Clark and Sarbannes Oxley

Over on Seeking Alpha (Full Dislcosure: Benchmark Investment) Jack Ciesielski posts a critical comment on Jim Clark's resignation from Shutterfly's board (you should read the whole posts including excertps from Clark's letter). He essentially accuses Clark of using SOX as a cover up for his real reasons for resigning.

Says Ciesielski,

"A couple of things to note. His first reason is this: the man calls himself a technologist, and uninterested in a manufacturing environment. He’s just got little to offer a manufacturing concern. And if that’s so, and it makes sense to him not to be at Shutterfly on those grounds - why be so concerned about constraints imposed by Sarbanes-Oxley? Seems like just an opportunity to vent on the law, if the first reason is the most important one. And the one that makes leaving a sensible thing to do for a fellow like him.

If there’s “little that I can offer to guide what has become a manufacturing company” - why, then, is SarbOx such a constraint? Why is it necessary for Mr. Clark to be chairing any of the various committees? In truth, what he’s doing may well be the right thing for the company, but for the wrong reasons. This shows how SarbOx is sapping entrepreneurship? Be serious: how material do you think his interest in Shutterfly may be to Clark’s portfolio? Think he’d be sweating long nights writing code if he stayed? He may be more beneficial to the company on the outside as a resource - both financial and networking - than staying on the inside as chairman and “chief manufacturing officer.”

This is the comment I posted on Seeking Alpha.
"Say what you want about Jim Clark's true motives but he is completely right about SarBox (a.k.a the Universal Accountant Employment Act) . It is hurting the American economy, the US stock markets and empowering Stock Markets like AIM and the LSE at a time when the US economy, shareholder and tax payer can ill afford it.

SOX is too expensive and unwieldy, especially for small companies; SOX makes it difficult and expensive to recruit talented outside board members; It is filled with paranoia about conflicts of interest like the ones Clark described.

Jim Clark has been a very important entreprneur for our economy (do you remember Netscape? SGI). I suggest that instead of looking for ways to undermine his credibility, the new Congress and the investor community should heed his warning. "

Wednesday, January 10, 2007

Why I am Disappointed by Apple's Iphone and why Investors should be wary

I never bet against Steve Jobs. The man is a master but I am disappointed by the iPhone announcement for one reason. It is not OPEN. Ask yourself why there has been such a frenetic pace of innovation on the web and such a slow pace on the cell phone?

In my opinion, it comes down to one reason: the cell phone is a closed platform. The phones are locked; the carriers wall off the gardens and control the pipe; and innovators are, in most cases, forced to launch apps and services through carriers and their IT bureaucracies and share a huge amount of the revenues with the carriers.

On the other hand, the web is open. It is a paradise of innovation and you can talk directly to your users, get feedback and make your products better and more appealing.

One more slightly orthogonal note: Apple's stock is flying. Don't bet against Jobs. But....the cellphone world is a cut-throat margin business where margins decline virtually overnight. Music Player business is ironically more defensible. I wonder if apple will succeed in maintaining margins as Motorola (see their recent announcement) and Nokia cut prices on all new phones. This is not a trivial shift even for the man who declared the end of the PC era.

Sunday, January 07, 2007

Big media buys Citizen Journalism

In big news for Scoop.co.il, last week big media company Mcclatchy corporation (remember: the guys who bought Knight Ridder and own the Fresno Bee newspaper) bought FresnoFamous.com and ModestoFamous.com, two California-based leaders in Citizen Journalism.

Here is my favorite quote from Mcclatchy on the topic:
“Purchasing a strong franchise such as FresnoFamous.com gives The Bee another way in which to reach younger readers with information they seek," said Valerie Bender, vice president of custom publications for The Bee. “Our intention is to keep the high standard of blogging and information that has led to the success of FresnoFamous.com and to, over time, continue to grow the content and opportunities for citizen journalism on the site."
I wonder how the oligarch world of Israeli newspapers will react to the growth of Scoop and Citizen Journalism in Israel. Something tells me that giving readers a say in the public agenda that the newspapers now control is not something they will be hurrying to do. :(

Tuesday, January 02, 2007

Transient

Yesterday, I posted about New Years (update: 83+ people were hospitalized due to drunkenness or drunk driving accidents on "New Years" in Israel - what a "great" holiday...). One of the themes of the Jewish New Year is the transient nature of life. The famous prayer for the Jewish New Year, "unetaneh tokef" finishes with comparisons of man to disappearing clouds and the disappearing/floating dust. While not wanting to compare the mundane internet with sacred prayers, I still found this piece from Skrentablog on Google (entitled winner Take All) fascinating in that context, particularly when viewed in the context of Steve Rubel's April 20th post on the transient nature of the web and the fickleness of web visitors. I encourage you to read both pieces in their entirety. Below are some excerpts:

From Skrentablog post entitled "Winner-Take-All"
"To paraphrase an old comment about IBM, made during its 30 year dominance of the enterprise mainframe market, Google is not your competition, Google is the environment. Online businesses which struggle against this new reality will pay opportunity costs both in online advertising revenue as well as product success.

Competitors such as Yahoo should quickly move to align themselves with this inevitability. Yahoo could add an extra $1.5B to their revenue overnight by conceding monetization to Google and becoming a distribution partner for Adwords, as Ask Jeeves did.

Google is the start page for the Internet

The net isn't a directed graph. It's not a tree. It's a single point labeled G connected to 10 billion destination pages.

If the Internet were a monolithic product, say the work of some alternate-future AT&T that hadn't been broken up, then you'd turn it on and it would have a start page. From there you'd be able to reach all of the destination services, however many there were.

Well, that's how the net has organized itself after all.

From this position, Google derives immense and amazing power. And they make money, but not only for themselves. Google makes advertisers money. Google makes publishers money. Google drives multi-billion dollar industries profiting from Google SEM/SEO."


From Steve Rubel

"Eight years ago you read your personal email in Outlook Express. Now you read it on the Web.

Nine years ago we played Acrophobia online. Today we play Xbox Live or Second Life.

Ten years ago we formed communities on GeoCities. Today we form communities through connected spaces like the blogosphere.

The moral of the story is if you look back at your browsing habits over the past ten years, it's highly likely that some of the sites you visit frequently now are not the same ones you visited two, four or six years ago. The Web is a transient place. People move around a lot."

**Update: Om Malik also has a post on this topic today. Have a look.

Monday, January 01, 2007

Digg Bibi

There has been a lot of questions on Digg, the social news site, both about its business model and about its ability to scale out of the Technology vertical that it started in. The core of Digg is still the main tech pane. Ashkan Karbasfrooshan has been critiquing this space and Digg in particular for a couple of days on Seeking Alpha (Full disclosure: Benchmark is invested) in a post entitled Would You Invest 8.5MM in Digg? and one titled Raw Sugar is Toast, Is Digg Next?

I saw an interesting use of the Digg rating and ranking engine today on Bibi Netanyahu's blog which I have written about before. They are using "Diggs" to determine the order of questions for Bibi left on the site (screenshot below). This is a great way to really get at the questions the mass of the body politic wants answered rather than the questions the politicians feel comfortable answering. It is a bold move by Bibi to expose this. In fact one of the questions that rose high was whether his economic policy hurt the lower socio-economic levels (Bibi is also using YouTube to get video messages out). That is democracy that you can't run away from right on your blog and with a score attached to it defining how many readers are concerned about this issue. Come to think of it, it is actually a great way for politicians to figure out what is on the minds of voters. No need for polls.

Which brings me back to Digg. Why should rating be on Digg's site. It should be federated to any kind of site.

Whose New Year?

The radio is awash (as are some of the people :) ) this morning with stories on the drinking last night to celebrate the Gregorian new year. It was never clear to me why a country like Israel with its own New Year (actually 4 New Years according to the Talmud) needs to adopt the New Year of other cultures. We should be proud of our own heritage and focus on enriching those holidays rather than borrowing from other cultures.

Ghost Town Update

Thanks to Daniel for forwarding this NYT article on the lack of affordable housing in Jerusalem. FYI, I also received an email yesterday from a Kol Hair (Jerusalem Local paper) journalist regarding my posts on this topic. It included a suggestion for a plan to "save Jerusalem." Maybe the people buying these homes don't read my blog posts on this topic (here and here and here) but they are now reading the NYT. Come to think of it, maybe given the prices, we need to get an article in the Wall Street Journal.