Bronte Media

Freakonomics has triggered an interesting conversation around reviews and user participation. The first, the percentage of people who participate, I don’t think is that interesting, but the points they highlight around whether a review is 1 or 5 are very interesting.

At Homethinking, the experience has been much the same: users either love or hate a realtor.

Makes you wonder whether reviews should simply go with a thumbs up or thumbs down style rather than the historical 1-5 stars.

Vonage, after pissing off their customers with an IPO that has dropped like patchy VoIP call, is now going to pick up the tab on shares that customers don’t want to pay for. Which, if you are anything but stupid, every investor would take and then if they really wanted to own the stock would buy on the open market at the dramatically reduced price.

But still, what exactly are the underwriters - Deutsche Bank, Citigroup and UBS - doing for their money if they are not even picking up the tab when people pull out?

Another market (besides real estate) where the magic 6% is getting harder to justify.

Credit, where credit is due. Tribune is borrowing as much as $2bn to buy back 25% of the firm in reaction to investors who have stood steadfastly critical and cynical of its prospects. A buy back is basically a signal from management that they think shares are undervalued. Borrowing money to buy back shares is a stronger sign.

However, that’s not the jewel of the announcement. This is:

“Tribune said it expects to complete sales of certain noncore broadcasting and publishing assets, as well as real estate and securities in the company, in six to 12 months. Mr. FitzSimons said Tribune expected to increase its 33% stake in CareerBuilder.com, a classified-ad site. He indicated that the stake likely would come from McClatchy, but that McClatchy would continue to be a partner in the site.”

Faithful readers know that I think Careerbuilder is one of the most valuable and fast-growing Internet assets; a kind-of Monster.com on steroids. I haven’t been kind to Tribune but this time they are spot on the money.

Marchex announced today that it has acquired Openlist for $6m in cash, $5m in stock and $2m in restricted stock that vests if the employees stay on and I assume hit performance targets.

Openlist was co-founded by Matthew Berk, a good friend and former Jup colleague, in 2003. In the nearly three years (it’s hard to believe that it has been that long) since founding it, Matthew and his partner Bejul, have endured a roller coaster ride through a CEO that came on and didn’t work out, a round of venture financing from a top tier VC that they ended up declining and finally the sale to Marchex (who regular readers will know I am also a fan of). The transaction is a fantastic outcome for Matthew and a fantastic outcome for Marchex, which is leading the direct navigation industry.

Brian Smith and Greg Sterling had the scoop.

The price of fame. Google now has a very slippery slope to walk, having agreed to police and monitor its Orkut social networking service in Brazil (the only place it is popular).

The problem with popularity is that increasingly, activity reflects the behavior of society, which includes drug dealing and organized riots.

MySpace is undergoing a similar PR challenge here in the states. I remember in the mid nineties when the Internet=porn/email=criminal activity memme’s were floating strong in the press, which makes me think that similar hurdles will be overcome with social networks.

Technology will always be used for good and bad, but it will always be more exciting to write about social networks as drugs and sex than teenage girls endlessly pontificating on the meaning of life. That’s not to say that the former represents 2% of activity and the latter 98% though.

I have been playing around with a few sites, as I am trying to hire a part-time java (with a little AJAX) developer to help on our UI (i.e. non-crawling), and one of the sites I used is GoJobby.com.

Despite being slang for ’shit’ in Scottish, the site turned out to be quite useful and out of all the means I used (craigslist, friends, gojobby, NYU+Columbia CS depts and a few Google Groups I belong to) it has produced by far the best quality stream of applicants.

Randomly, the company was ‘bought’ by Jobster today, a larger startup. I say bought, because with venture funding, it looks more like a lego add-on, with perhaps a small hiring bonus, than an exit that lets the founders buy Carribean islands.

Back to my original point: the reason why I posted this was that in the Techcrunch comments there are a few morons citing the “bubble is back” meme. Let’s take score: The site was not venture backed. The acquirer is obviously paying a small subset of their own venture capital raised. So where is the bubble? This isn’t webvan raising $300m, it’s two guys proving that have the smarts to go out and do something themselves that provides value (at least a few hundred dollars in my case). For Jobster, they have lowered their risk on two smart employees that might help them build a great company.

That said, the site does have the ultimate ‘techcrunch’ Alexa graph. Take a look at this beauty:

Lesson of the story? Techcrunch should build a place where their readers can upload their resumes and employees can pay say $10 a pop to contact those that are interested in looking for work. The profit center for newspapers has always been employment classifieds (and real estate and autos to a lesser extent, at least historically). Mr Arrington: Why do you think Dice.com are buying up all the ads on your site?

And that’s not just based on a sample size of one.

Via the folks at Zillow (who should be used as a model for corporate blogging by the way):

The top four worldwide cities who search for real estate, according to Google Trends, are Australian: Brisbane, Sydney, Perth (!) and Melbourne.

It doesn’t matter one bit that Google Notebook is a poor man’s version of delicious or FURL. Or that Google Calendar is not quite as good as 30boxes, or perhaps any of the other 20 AJAX calendar startups. Startups in those spaces probably wont even see that much of a hit to their usage growth trajectories. But the loud and clear message from Google is that they will not buy those companies.

Google is always mistakenly mentioned as an acquisitive firm but in reality has done a few ‘hiring bonus’ deals with small teams of engineers at startups. Yahoo and Microsoft, not to mention firms like Experian, IAC and Scripps acquire Internet companies; Google acquires small teams.

It is one of the misunderstood cultural nuances of the company - an almost early nineties Microsoft-like approach that they will get it right by version 3 and everything will take care of itself.

That was the case in Google’s core success, but that was in an industry that was asleep at the wheel at a time where it was a cost rather than profit center. But there are relatively few markets where that is the case now. Take email for instance.

Gmail is one of the most fantastic email applications and I cannot wait for the corporate version to roll out. But if you zoom out into the real world, Gmail is irrelevant and stagnant, and shitty services like Yahoo mail and even Hotmail still dominate and are growing nicely. The best product doesn’t win. Much akin to the world of laptops where Apple continues to amaze, releasing better and better products only to see it’s market share flat and even declining.

Google Base will not make any difference to eBay . Don’t get me wrong, Google Base helps the company index and search more of the web, by taking structured feeds on pages that are highly perishable, but to hear that it is a competitor to eBay is laughable.

I doubt Google will ever admit Gmail is a failure - technically it is the best and most elegant product available, yet the usage scoreboard tells a sombre tale.

So copycat products like Notebook and Co-Op and Calendar and whatever else will continue to make their way through the pipeline - after all, all those new employees have to *do something*. But until the company admits there are more to markets than technology and product, and that audiences and human behavior matter, Google wont come out to play in the outside world and will continue to tinker away at the computer in the dark, making boatloads in core search and finding it impossible to dominate large markets outside of it.

This, from the most recent disappointing quarter from Expedia:

“The company’s new marketing campaign didn’t draw enough incremental users and shoppers to the site, Mr. Khosrowshahi said. Also, customer traffic from the new deal Expedia inked with MSN was “significantly lower” than the company expected and was less than in the past, he said. Expedia will continue to work with MSN on the matter, but it won’t change overnight, Mr. Khosrowshahi said.”

Looks like MSN is not just losing share in search…

Monster, who remains one of the most undercovered media firms in the world and whose stock price has been one of the best performing, announced that it has acquired an education lead generation firm PWP who had revenues last year of $5m.

From the press release:

“PWP owns thousands of education-related domain names and generates more than one hundred thousand ’student to school/college’ referrals per month as well as having more than one million unique users per month who visit for the highly-relevant content and extensive listings of colleges and courses across a wide range of educational subjects and locations. PWP generated approximately $5 million in revenue in 2005 and was profitable - largely on the strength of its leading directory brands such as ArtSchools.com, BusinessSchools.com and CookingSchools.com.”

Doing the math and connecting the dots: 100k leads per month annualized is 1.2m leads which amounts to a little over $4 a lead for a $5m revenue figure. Most likely they are lying about the leads.

Another interesting stat is to calculate the eCPM of the site. Lead generation sites rarely hold their users for more than 3 pages. So let’s assume 3m pages a month or 36m pages a year. That’s 36,000 blocks of CPM. $5m / 36,000 = $139 eCPM.

You can start to see the reason why they can buy so much media.