Bronte Media

LATimes article on RedEnvelope’s art of timing:

“RedEnvelope’s site, which handles most of the gift retailer’s business, was down for more than three hours. The outage happened the same day that 365 Main distributed a news release announcing that RedEnvelope had shut down its “redundant” data center in the Midwest and was thrilled with 365 Main after “two years of continuous uptime.”"

Cool new real estate site covered by Joel over at FoREM that aims to measure a home’s ‘walkability’. That is, the ease in which you can walk to life’s necessities: wine, beer, porcini mushroom and good coffee.

The metric pretty much sums up New York and my 450 sq ft mansion scored a 100 / 100.

An interesting post on Fotolog’s deal with Google by Silicon Alley Insider (p.s. great blog) got me thinking: do the grand-sounding multi-hundred million revenue deals make financial sense?

The deals, signed mainly by Google, sometimes by Microsoft and almost never by Yahoo have large press-release numbers that journalists eat like candy, but are the social networking firms taking the online ad giants for a ride or vice versa?

Let’s dig more into the Facebook-Microsoft deal to see more. Peter Thiel, an investor in Facebook, estimates that about half of this year’s $150m will come from the Microsoft ad deal, or $75m. Since it’s July and halfway through the year, we can roughly break that down into a monthly number of $6.25m.

From the latest comScore numbers, which are traditionally very conservative, but less so as the numbers get bigger, we can see that Facebook did about 15 billion page views in June - or roughly 15m units of CPM.

Because the comScore numbers are conservative, I wont apply a discount to the page views to get at a number of available impressions Microsoft can show. Let’s just assume they cancel each other out.

That means that Microsoft has to earn more than 42 cents CPM to make money from the deal.

Basically, we can masturbate over Facebook being the future of advertising and being able to be infinitely targetable but the reality is, no one is targeting all that smartly today. Or at any other social networking site for that matter. And so the money changes hands at around 10 cents CPM when the ad networks come in.

Direct buyers of advertising also have done poorly in their initial campaigns - as much their fault as the audience Facebook has built.

So I don’t think Microsoft is making money on its deal in 2007 but its probably not losing that much either ($1-3m / mo) and has the option through 2009 to get the targeting and ads relevant.

The problem for GYM is that as soon as the targeting and ads do work, the guarantees go away but the share of the upside increasingly goes to MySpace/Friendster/Facebook/Fotolog.

The billions GYM are promising will only generate very small incremental profits for them. For Google that is OK but they are selling the advertisers on Google.com anyway but for Yahoo and Microsoft they will bog themselves down in AdCenter/Panama and hiring truckloads of sales people and diverting their attention away from what really matters to them as companies: their own sites’ usage. So I don’t think it makes sense for them to chase these deals even though they make headlines and infer that they are ’still relevant’ in a world of Google domination.

Worst segway ever:

“many Googlers have been working to identify the obstacles that prevent the Internet from being available to everyone on the planet. It strikes us as unfair that some people should enjoy such abundant access to this rich resource while billions of others aren’t so lucky.”

“For instance, we wrote […] about Google’s interest […] in the broadband market here in the U.S., to help ensure that as many Americans as possible can access the Internet.”

Maybe - just maybe - there is room to apply the pareto principle in tackling the billions of those who don’t have access rather than to the minuscule numbers of Americans who dont have Internet access?

Fantastic stuff:

More classic Hollinger (you need to pay ESPN.com the $30/year to read him but it is worth it if you love basketball):

“I’ll bump up this rating a little if they can nab Steve Francis. But only a little, because Elton Brand would never see the ball again. He’d just wave his hand helplessly in the post while Francis and Cuttino Mobley relive their monogamous passing routine from their Houston days (”Francis, back to Mobley … over to Francis … change sides and dishes to Mobley … back over to Francis who dribbles out top … two on the shot clock … Francis kicks to Mobley, his jumper from the corner is up and …”). The other three guys might as well play with their arms inside their jerseys.”

Oops. A letter from two hedge funds related to sub-prime mortgages totaling around $1.5bn from Bear Stearns:

“Let me take this opportunity to provide you with an update on the status of the High-Grade Structured Credit Strategies and High-Grade Structured Credit Strategies Enhanced Leveraged Funds managed by Bear Stearns Asset Management… The preliminary estimates show there is effectively no value left for the investors in the Enhanced Leverage Fund and very little value left for the investors in the High-Grade Fund”

Thanks for the update!

Yahoo didn’t disappoint more than expected in the second quarter. They made the move of breaking out affiliate revenue with owned and operated traffic to be more comparable with Google and to show that core Yahoo properties are doing average and affiliates are falling off a cliff.

Henry Blodget has the best wrap of the quarter so far:

“Panama is working. Revenue per search is up 15%-20% year-over-year. This is crucial, as search is still the industry’s largest and most profitable revenue stream. Alas, the counter problem is that Yahoo appears to be continuing to lose search query share to Google (and in the latest month, god forbid, Microsoft). With fewer search queries, improving RPS won’t make a lick of difference.”

What I am puzzled about is who exactly Yahoo’s affiliates are? I thought it was SBC/AT&T and other broadband providers. But Jerry Yang specifically answered a question and said that those sites were included in the ‘owned and operated’ section, which is quite a liberal definition.

Anyone know differently?

UPDATE 2: Sold for $25,000!

UPDATE: Turns out to be useful too. I put my name down for iminlikewithyou.com and asmallworld.net and an hour after I registered I got an iminlikewithyou.com invite.

Techcrunch writes a story about a site, Inviteshare.com, that allows you to trade invites to web 2.0 beta programs. They also admit to building the exact same site (currently unlaunched).

Inviteshare then puts itself up for sale on SitePoint and the auction ends in 3 days. The current price is $1,250.

What is fascinating is that the Techcrunch traffic actually seems to have gone past the front page. From the 14,500 unique visitors in the last 3 days, there has been 500,000 page views or roughly 35 pages per visitor. Usually readers from Techcrunch average closer to 1 page per session.

“I like Mackey’s haircut,” Rahodeb said. “I think he looks cute!”

Wholefoods co-founder and CEO John Mackey caught commenting on Yahoo Forums, negatively about Wild Oats, an acquisition target, and positively about his own firm (and himself).