Bronte Media

I am giddy like a teenage girl in anticipation.

Back in March when Spotrunner raised a monster round I was more than a little skeptical. So many things I had seen and heard about the company didn’t add up. The premise was wonderful but I think that the company simply hadn’t achieved any meaningful traction. And pumping their valuation up and raising wads of cash wasn’t going to solve that.

Valleywag reports (god can I even say that?) that the firm is about to layoff 100 people and re-focus on selling online advertising to small firms. Like that market is under-served.

The company joins other well-funded startups like ReachLocal and Yodle and then not to mention other huge companies like Dex who are making a move in the same direction.

The business is horrible from a margin point of view: You sell other people’s things and have to build out a huge sales force. But I guess you can show fast revenue growth and for troubled investors in the company the hope may be that a greater fool in the room may take it off their hands (desperate companies like Microsoft or someone like Comcast).

Mark Macguire and fellow Jellyfish co-founder Brian Wiegand, have left Microsoft to start up another company. And this time they are going to try their best to blog the process. Mark and Brian genuinely had some innovative ideas around the performance marketing space first with their search engine that was ordered by cashback (which now powers Microsoft’s efforts in the area) and perhaps less followed, their Shopping Game shows, where folks would guess the lowest price an item would drop to before someone bought it. Be sure to add the blog to your reader if you are interested in the world of startups.

From success to failure. Go check out Jason Goldberg’s post on his first 7 months in his new company, socialmedian.com. Jason was the former CEO of Jobster and was certainly hung out to dry by many (and many for justified concerns). But you can’t help but love someone who jumps right back into the startup game and also is so transparent about recognizing mistakes and not making them again. He has instantly earned my respect.

Another flat quarter and more or less break even but there was this nugget, which is encouraging:

“Through May 2008 our sales and renewals, net of cancellations, were flat compared to 2007. However, in June and July we saw an increase of net sales of $1.2 million, or 11% in each month, compared to 2007.”

Today’s quote of the day comes from a memo from Oak Tree Capital Chairman Howard Marks. This can be applied to so many situations in life that I had to republish it:

“The current debate over the role of speculators in oil pricing reminds me of Rep. Noah Sweat’s classic answer when asked in 1952 what he thought about whiskey:

If you mean whiskey, the devil’s brew, the poison scourge, the bloody monster that defiles innocence, dethrones reason, destroys the home, creates misery and poverty, yea, literally takes the bread from the mouths of little children; if you mean that evil drink that topples Christian men and women from the pinnacles of righteous and gracious living into the bottomless pits of degradation, shame, despair, helplessness, and hopelessness, then, my friend, I am opposed to it with every fiber of my being.

However, if by whiskey you mean the oil of conversation, the philosophic wine, the elixir of life, the ale that is consumed when good fellows get together, that puts a song in their hearts and the warm glow of contentment in their eyes; if you mean Christmas cheer, the stimulating sip that puts a little spring in the step of an elderly gentleman on a frosty morning; if you mean that drink that enables man to magnify his joy, and to forget life’s great tragedies and heartbreaks and sorrow; if you mean that drink the sale of which pours into our treasuries untold millions of dollars each year, that provides tender care for our little crippled children, our blind, our deaf, our dumb, our pitifully aged and infirm, to build the finest highways, hospitals, universities, and community colleges in this nation, then my friend, I am absolutely, unequivocally in favor of it.

This is my position, and as always, I refuse to be compromised on matters of principle.”

Perhaps in no other corner of the online advertising industry (maybe SEO) is their as much navel gazing and inner struggles as Affiliate Marketing. The industry itself is hyper sensitive to being called shady, as evidenced by how well Jason Calacanis managed to play the industry like a concerto fiddle. And there are no shortage of folks who tirelessly defend that the industry is innovative.

The problem, I think, stems from one of terminology and expectations. Affiliate marketing houses the unwashed masses, all trying to establish their success. Very few succeed and many fail. Because of the distribution of few successes and many failures, the outside public sees an ‘average’ of someone who is very poor, which pisses off the few who succeed.

Further, affiliate marketing, like ad networks, are like minor leagues: breeding grounds for tomorrow’s superstars. But like top prospects, affiliate marketers don’t stay affiliate marketers - they become ‘publishers’ and ‘partners’. So that positive affiliation (no pun intended) of the successes does not pass down to the word ‘affiliate marketers’.

Affiliate marketing however is a wonderful way for companies to do business development. Offer as much creative freedom as you can, within set boundaries, and see which people do the best. Then talk with the people that matter.

Honestly, if I was in the marketing department at a large company and the scores of providers who were trying to woo me with their promises I would send a form email back:

“Thank you for your inquiry. We’d love to work with you if you can prove yourself in our affiliate marketing program. Nothing is negotiable but I can say if you succeed we’re open to negotiation after that”

Which brings to expectations. Just like successful partners of an ad network will leave the second they get scale, the successful affiliate marketers will become real media companies and because of the countless failures of other affiliate marketers, prefer to be called a publisher or an online media company. For the others in the industry when this happens, just don’t take it personally.

If you follow the incompetence at Cablevision, you’ll know what a big deal this is. Hell hath frozen over:

“Top executives of Cablevision Systems Corp. are expected to meet with some of the company’s biggest shareholders next week as part of a campaign to patch up relations with Wall Street and test the waters for its strategic options, according to investors and analysts.”

Let’s just hope they sell the Knicks to someone with a clue.

The chapter closes for the battle of Marvel:

“Billionaire financier and Revlon Inc. chairman Ronald Perelman has agreed to pay $80 million to settle longstanding litigation with trustees for the comic-book publisher formerly known as Marvel Entertainment Group Inc.”

Those interested in the formation of the ’super-hero’ movie business should read the book Comic Wars, which essentially details the fall of Marvel, the comic book company, the fight between Perelman and Icahn over the scraps, and then the rise of the company formed by the vision of Avi Arat, whose company used to profitably make toys based upon the characters while the comic books lost money.

It’s probably an even better read now that the formula of super hero movies is so proven and as low risk in the movie business as franchise sequels.

A Y Combinator company Popcuts, has recently launched on the premise that early buyers of a product should be rewarded if they buy when the product is new/unpopular and it eventually becomes popular.

This is one of the most innovative incentives I have seen in a while. They are using music as their initial product but there are any number of other things that this would make complete sense for.

For instance, event and conference producers are at the mercy of conference goers who prefer the convenience of registering the day before or the week before the event but need to make big investments (locking in the venue etc.) in the hope that people are just waiting to register the week before rather than not registering at all.

That’s why there is an early bird discount: To encourage people to show their intent as early as possible. Using the compounding model of rewards, being able to go free or at 30% of the cost if the conference is a sell out would be huge (you’d still pay the fee up front and take the risk).

By it’s very nature this would only work for undiscovered products. There would be no point in doing this for the NBA Finals or the new Madonna CD, but there is something here that is quite powerful in getting people to take a chance on untested things. Will be fascinated to see where it goes.

Honestly, at this stage you just have to cry.

One nail among thousands being hammered into the coffin:
“Broadridge Financial Solutions’ corrected tabulation of the vote at the Yahoo annual meeting on Aug. 1, without the “truncation errors,” came out and, it seems, shareholders are actually mighty irked at Yahoo leadership.

Most glaringly, the new result shows Yahoo CEO Jerry Yang’s disapproval more than double what was previously reported, rising from 14.6 percent votes withheld to 33.7 percent. Yahoo Chairman Roy Bostock saw his shares withheld rise from 20.5 percent to 39.5 percent.”