Tech Coast Review

History Repeats with Yahoo Google (Microsoft) Search Deal

2008-06-13T10:24:00.000-07:00

This is a guest post by southern california based entrepreneur Jeremy Almond:

Many of us in the tech industry today are too young to have seen first hand the days when Apple, Micorosft and IBM set the stage for the personal computer revolution, but of course the story has been documented well. Whether it was through watching Pirates of Silicon Valley, or reading Accidental Empires, we know well that the strategic decisions of the industry pillars then have had profound impacts for the 20 years since.

The news that was widely reported yesterday through TechCrunch, Mashable, and more that Yahoo is outsourcing some portion of search to Google is very likely to be a milestone of the same type of far reaching ramifications as those that occurred in the old Apple, Microsoft, and IBM wranglings of 20 years ago. One might ask, why do we care about who powers the technology behind Yahoo's search advertising business? Well directly, maybe we don't; unlike many of the "experts", I actually don't think that Yahoo outsourcing search is the big issue. If Yahoo can find someone to power some piece of their business better then them and they can make more money at it, more power to them. Classic build versus by decision, and at least for technology, it might not be much of a big deal. What IS a big deal is Yahoo fundamentally not recognizing who the enemy is.

I empathize with Yahoo, back in my own corporate days, I remember the strong disdain we had for Microsoft, locking in companies with poor technology, nonexistent interoperability, and shoddy business practices. Microsoft WAS the enemy no doubt about it. But come on Yahoo, you are supposed to be leading the industry, so let's have some vision here and not confuse what WAS and what WILL BE. In fact, lets not forget history. What was it that took Apple from dominating the original PC industry to letting Bill Gates and Co take the reigns and rule for the next 20 years while Apple got relegated to it's token 2% of the market share (recent iPod and iPhone success not withstanding)? Obviously there were lots of Apple mistakes, but at it's core, Apple fundamentally thought that their enemy was IBM and not Microsoft. At least back then Apple had a lot more in common with Microsoft then IBM and they let the cultural differences cloud their judgment to think the historical juggernaut of IBM was a bigger threat then emerging ambitions of Microsoft.

The parallels here are too obvious, if Yahoo was going to play hardball with Microsoft's takeover bid, because they had some far reaching vision on independence that could have gone head to head with Google that's one thing. But yesterday's announcement show's they had no clue, and fought off Microsoft's bid because of emotion. Where Apple once gave Microsoft the "keys to the kingdom" because they (thought they) needed a killer app to beat the IBM platform, so too we have just watched history repeat itself as Yahoo has given away it's own key's to the new kingdom.

Jeremy Almond is the founder of the San Diego based startup company Travature a personalization and recommendation platform for travel information. Before starting Travature, Jeremy was the enterprise architect at Veeco Instruments, the leading provider of nanotech equipment.

mTraks gets 500k for music social network store

2008-04-08T20:33:00.000-07:00

San Diego based mTracks, today received another 500k in funding from angel investors, making their total funding up to 1M. Not too shabby of a start without getting VCs involved. Though to be honest until I saw their press release, I hadn't heard of them. And looking at their traffic, not too many people have either.

So what is mtrack, well is basically a music social network, combined with a music storefront. Sort of like a combination of imeem and the itunes store. Its got all the usual groovy social features that meld well with music, as well as storefront that has a whole bunch of basically indie music. They don't have the major labels, but it doesn't seem like thats what they are going for.

They have quite a few things going for it, particularly a really really good interface. I also like that their music is all encoded in 192k DRM free mp3s (which would have been a huge thing a year ago, but is now becoming sort of a norm). Businesswise I also think they have a good thing going building a site that basically musicians can circumvent labels and in the long run self sell (ala cdbaby). This is definetly good for the artists, giving them more control financially as well as allow them to market better with the social network.

I did have some problems though, first the site was occasionally slow, though its hard to say if it was a basic hiccup on their end or a larger problem. The other thing was that although they say they have about 800,000 I (and I'm assuming most 'common' music listeners) weren't entirely familiar with much of the library. Thats cool, and part of the indie music discovery process, but a couple of things need to be tweaked a little to help people like me find my way. First, I really like that if you put in the name of a common band, if mTraks doesnt have the band, it will suggest similar sounding artists in the library. This is exactly what is needed, however my experience is that the suggestions weren't all that close. The premise is good, they just need to tweak the algorithm more. The other thing, is that while I don't mind 30 second clips on Itunes that much, I find that I have a feel for the band better, so its not much of a problem. Here, since I was discovering a lot of new bands for the first time, I really wanted to hear more of the song. Of course I realize a lot of that is up to the negotiations with labels and artists, but for indie stuff, 45 or 60 seconds would have been a lot more helpful.

Overall, though I really like the site, the question is just how to make it stand out. These guys need traffic in a serious way. They've done pretty well on the tech side and really now its a matter of figuring out how to standout in a very crowded space. This is no easy task, and I'm assuming thats in large part what this next chunk of funding will go towards. Maybe some kind of killer facebook or myspace app might do them some good.

Website: www.mtraks.com

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Internet Brands Cant Stop Buying Websites

2008-04-08T20:14:00.000-07:00

Los Angeles based, Interent Brands (who we covered last when they went public) today bought a bunch more companies:

FitDay.com a community to log diet and weight loss info
HighDefForums.com a community forum about HDTV stuff;
HighDefDigest.com Blu-ray and HD-DVD Reviews;
AVRev.com Audio Video home theater site
VetInfo.com information for pet health

A quick browse of these sites shows that the all have strong niche traffic, though none are doing anything particularly interesting. This seems to continue to follow IBs strategy (or lack there of), of buying community driven sites with little technological innovation. While having a slick web 2.0 feel is not a prerequisite, I still wonder if IB is buying assets that ultimately are going to lose their community to cooler places. Maybe the intention is supposed to be that IB will bring the funding in, so these new acquisitions have some financial flexibility to grow, but frankly a look at IBs portfolio, just doesn't show that happening.

Community Next and the Mashmeet LA 2.0

2008-03-31T22:33:00.000-07:00

Yes, I know I've been covering a lot of conferences and events lately and haven't had a chance to do any in-depth startup profiles recently. But I've got to say a lot of the events we've had lately have been fairly top notch, and remind me more of the scene up in Silicon Valley, then the typical scene down here in Socal. CommunityNext I thought was pretty good, particulary the Robert Scoble and Pete Cashmore conversation. Then the MashMeet after party with Pete and crew was one of the best LA mixers we've had to date. This is all further proof, of how hot the southern california scene is; clearly starting to organize in a meaninful way, now that we are largely recognized as being the largest area for venture capital in the country, second only to silicon valley.

Anyways, in the next couple of days, I'll be catching up and be back to digging into a bunch of companies in the socal 2.0 scene, but for now heres a list of a couple more local companies that I ran into this weekend that are worthy of some mention:

Medmania: a new media company with a network of vertical media web properties.

Girlgamer: an online community and zine for girl gamers.

Mego: digital expression by way of an interative portable profile (basically cool avatars).

Streamy: social news aggegator with a great interface.

DealMaker LA

2008-03-28T18:08:00.001-07:00

I attended Dealmaker LA event last night and would like to say that it was a very good event. There were tons of startups, VCs, angels, attorneys, bloggers, high profile tech gurus (Pete Cashmore of Mashable), and advisers in attendance, which is no surprise seeing as the event was hosted in Santa Monica's Clear Stone Venture Partners.

The premise behind the event was a small and select group of startups were able to run their pitches by 10 different VC's in a "speed dating" session where each session lasted 5 minutes. After that it was a typical tech schmoozing party that was open to the public where everyone exchanged business cards and talked...and talked.

I will be reviewing some of the following companies in the weeks to come but here is a short list of some of the presenters I found to be interesting:

Black Closet: A fashion site that lets you see what designer clothes looked like matched together on a model, there business model was the most intriguing part of their business.

Call Fire: A VOIP company that has already surpassed $1 million in revenue.

Travature: A travel startup with an intriguing value add proposition.

French Maid TV: A true Hollywood take on how to make money on web commercials and other media. A series of How To's done by scantly dressed French Maids.

HeavyBag Media: A Marketing firm whose goal is to build community around a company or product.

Overall I had a great time here and thought this event was a notch above many of the other events that have been going on in LA this week. For now I am going to take a break until the next big LA tech event. Which incidentally starts in 15 minutes.

Lookout Facebook Myspace Opensocial Apps Go Live

2008-03-13T13:38:00.000-07:00

Los Angeles Based Myspace is finally trying to catch back up on the innovation curve by releasing their apps platform today. These apps, much like the Facebook, apps, allow social widgets on your myspace profile. And while Facebook has beaten Myspace by almost a year with this functionality, there are some things to applaud Myspace over. Most of important of which is that they are the first container to go live with the much touted OpenSocial specs.

There are a number of apps that are live today (well over a hundred with more being added every moment). Here are a list of some of the cooler ones I played with:

Playlist.com
Social Music Playlist that help you discover new music and broadcast it to your friends on your profile.
Flixter Movies
Helps you discover movies by showing you what your friends thought.
Where I've Traveled
Create an interactive world map, to show off all of the cities, states, and countries you've traveled to.
(Incidentally this app is made by San Diego based Travature.com, a travel 2.0 company we'll probably review in the next couple of weeks).
Twitter Sync
Sync your myspace mood status or other updates with twitter.

Overall, while I'm usually a Myspace hater, I'm actually impressed with how they came out of the gates here. While theres been pleanty of opensocial hype, myspace didn't send out big press releases about launching soon like some other containers, they just built the development community, got the apps working with opensocial and then just launched. Thats the way to do it. And at least for the moment, the apps not only work pretty well, they seem free of the facebook spam. Now thats a change, Myspace being solid, and better at spam then Facebook. We'll see how long this lasts.

Website: apps.myspace.com

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Graphing Social Patterns

2008-03-11T11:57:00.000-07:00

Last week one of the bigger web 2.0ish conferences was in Southern California: The Oreilly Graphing Social Patterns, held in San Diego. I had some passing involvement there and after digesting it a bit, one of the things that I came across thinking was that it never ceeses to amaze me how traditional companies are clueless to what the social web is all about.

So many companies are not sure that they "get" social, but are being told by people in the know that they "need" social. What this often means to them seems to be two extremes: either you must be a company knee deep in community by becoming some up and coming niche social networking site (enter pitch for online community of garbage men here) or that social should just be haphazardly bolted onto the top of your existing product (your chair company makes a vampire biting facebook app that eats chairs). But clearly neither extreme is a way to add value to your product/service. And maybe even more importantly, social on its own, doesn't necessarily monitize.

What does add value AND monetizes, is the notion that social is the new and obvious enabler, of existing markets. Most business are not likely to fundamentally change by being social, they just become better at the business of connecting with and between customers. Movie sites like Blockbuster or Netflix are great examples of this. The companies are still fundamentally about movies, but social takes the customer experience to a different level because you can show off the movies you're watching, connect with friends who have similar taste in movies, review what you've seen so you get better suggestions for new movies, etc. Regardless of whether you are on one of their facebook or opensocial apps, or you are in the community section of their own site, the social graph has become a core enabler of movie watching. These activities enhance the entire video business because you now are not just watching the movie, but you also are stay engaged before and after. In this way community doesn't change the business, but instead drastically creates more value to the lifecyle of the business.

In this way as we move forward, social to me becomes less about being the next cornerstone block of a company, and more about being a fundamental component entrenched in nearly all online activity.

Social Vibe is Almost Monetizing Social

2008-03-07T12:28:00.001-08:00

Social Vibe, recently closed over $4 Million in their series A funding round last month. They are located in Hollywood and have the two things every good web 2.0 start up needs; 1) a slick looking site and 2) a very interesting idea.

The main premise behind their idea is having users of Myspace and Facebook get their social networking pages sponsored and in return they get a chance to win prizes or give money to charities. You get points according to how active you are on a social network, how popular you are, and how many people you get to join the social vibe community. If you think about this for a second you will see that if you have a very active social vibe community it would be very very viral. Also on the plus side they did a good job of making the ads or "sponsorships" cool looking (ie they are not blinking banners for saying you are the 837,487 customer and have won and new laptop), and as a bonus they allow you to donate your points to charity.

I do reserve some questions for their business model the first being; why entries to win a prize? I get offers to enter contests for free all the time, whether it is dropping my business card in the free lunch bowl or the previously mentioned ad for my chance to win a laptop and I know one thing...I don't go near any of them. I realize that here the odds are better, but I do not like working for a chance to win a prize, I think it would be more motivating if this worked in a fashion where you can exchange your points for definitive prizes even if it would take longer to get to the good prizes. Or maybe an even more novel idea just let the people exchange their points for some cool hard cash (although I do realize this could be difficult to implement legally if minors wanted to use the service).

My next bone to pick is with the charities, people love all sorts of charities for different reasons whether it is Save the Whales or Safe Haven for Donkeys in the Holy Land (click the link I did not make that up). The point here is that people like charities for different reasons, I am sure Socialvibe knows exactly how much a point converts to monetarily so why not just let the user donate to whatever charity they desire. However I will admit that they do have a wide range of quality charities covered.

My overall impression here is that this could be huge, everything Social Vibe does looks slick and I could really see people adding these advertisements, widgets, and videos to their social network pages in order to gain a chance at some prizes. Furthermore if this does catch on and people are not as anti-raffle type contests as me the whole scheme is viral enough to spread all over the most popular social networks in no time at all.

PreCYdent setting the Precedent

2008-03-06T18:07:00.000-08:00

PreCYdent is a legal research tool that I am very excited was submitted for review. The idea behind the site is to enable everyone (not just the legal community) to search and find both case law and statutes for all matters. They are headquartered in San Diego, CA and have recently opened up the early alpha version of their software. Funding for the company is undisclosed.

The current state of legal research has two major players Westlaw and LexisNexis, Westlaw being the dominant force. It is practically necessary to have access to one of these two software programs to do useful legal research and both of these services individually license their product using heavy price discrimination which is downright exorbitant at times (often). Furthermore while the traditional software of Westlaw and LexisNexus is great at looking up cases which you have the citation to (a citation is generally how you find a case) as well as following the cases subsequent history (was the ruling upheld?, overruled?, is there conflicting law?) it is borderline useless in a generic word search (i.e. it is difficult to type in "lemon vehicle private party" and find out cases or statutes pertaining to lemon laws and private sellers of automobiles). In summary most lay people could not afford or efficiently use the major tools for legal research.

PreCYdent seems to be running on 2 main platforms, making their service able to effectively understand searches for words and to be free for all. These are both lofty targets to set your site on for this industry, with that said they both need to be accomplished ASAP. To make their word search tool understand what you are looking for they use a combination of an algorithm and user response (almost like Mahalo but with a defined niche for legal cases and statutes). In the few searches I ran I had significantly better search results with PerCYdent than that of Westlaw or LexusNexis, however my results were far from perfect. This can probably be attributed to PreCYdent only having indexed U.S. Supreme Court cases, and Court of Appeals cases.

There are other features offered on the site such as "finding lawyers," and "answering legal questions," but the community does not appear to be developed enough to make this useful, yet (they are still in Alpha mode so I will give them time). In short PreCYdent offers a very innovative idea and a useful tool which could enable all people to find the law and use it themselves. However if they are to become a dominant player in the market they have a lot of hard work ahead of them (including the active indexing of ALL cases). If PreCYdent can make legal searching both better and free they will have the ability to revolutionize legal search as we know it not to mention monetize their search traffic rapidly. All in all they have a great concept the only question will be if they can pull it off.

Divx loses mind, shuts down high quality video site Stage6

2008-02-26T15:46:00.000-08:00

San Diego based, Divx, best known for the popular mpeg4 licensing business, today announced that they are shutting down their Stage6 video sharing website. This has rightly gotten a good bit of play in the blog technosphere (see Techcrunch, Gizmodo, GigaOM, Webware, Mashable, Etc), as Stage6 was a pretty popular service. I personally used Stage6 all the time as it was a good source of content (both original and piratted), and felt quite superior to your typical Youtube knockoff, both in terms quality and speed.

According to their official blog response the reason for the shutdown was "that the continued operation of Stage6 is a very expensive enterprise that requires an enormous amount of attention and resources that [they]are not in a position to continue to provide." Of course as Techcrunch and some of the other blogs have dug into, when they passingly mention that "there are a lot of other details involved" what they really mean is that a rediculously stupid power trip originating from the Divx board over how to properly spin off the new company was a huge problem.

As Arrington put it, "throwing the baby out with the bath water" was certainly the case here. Stage6 had impressive funding to branch off and a business model that was actually working. Throwing out the revenue that Stage6 was making, as well the positive consumer impact it had on the Divx brand because they didnt have the resources to devote to it or the stomach to pound through the internal politics is amazingly short cited on their own. Even just considering Stage6 as its own entity its pretty easy to see that they come out of the gates with great traction and a semi niche, both of which any one of the new video sharing sites we see pop up daily would kill to have.

Overall on the business end this whole thing just exemplifies bad leadership and decision making. Plus as a consumer, I have just got to say I'll be sad to see Stage6 go.

Getting Jacked on Widgets!

2008-02-21T15:54:00.000-08:00

The hype and popularity of sports is something I may never understand but that being said I hear coworkers, friends, strangers, family, and the guy who sits next to me at the bar drone on and on about their favorite sports team. Moreover it seems that everyone of them can give me a detailed analysis why Shaq going to the Suns is a good/bad trade, comments on Joe Torrey's weight, and a strong opinion with reasons why Rodger Clemens should/should not be let into the hall of fame. So needless to say I realize this market is huge and there is a huge potential for growth with anything that allows sports nuts personalize, customize, and shout out their opinions to the world.

Jacked is taking a stab at this by making customizable widget pages so you can keep your eye on all of the sports games going on. The widgets vary from play by play to you tube videos of the teams playing. They are VC funded with at least $6.5 Million and are based in Santa Monica, CA.

The Good: There web site is about a slick as it gets and even better than that the whole site is very easy to use, navigate, and customize. Also to their credit they have a ton of money and make it apparent that they have more sports related offerings (besides the widget platform) on the way. Most importantly the widgets they offer are rich in information and gave me more than I ever wanted to know about the games I was widgeting in on.

The Bad: I understand that this is supposed to be something you look at in addition to watching TV but why does it have to be that way? I would find Jacked much more useful if they had a live stream of the game(s) you are receiving information on. My idea here is that when I am watching a game on TV I really do not want to be checking my computer for other information, however if I am on my computer watching sports (ie no TV) I would gladly watch the game on my computer surrounded with the loads of data that all of these widgets can give me. Bottom line is that I want to see the actually game live broadcast along with the widgets!

Also there should be some sort of communication with other fans that getting the same information so there is a meaningful interaction going on. Let everyone share their so called sports knowledge and see what unfolds. This seems natural to me, most people have strong opinions about every aspect of sports so let them let loose, I could see a very dedicated (and violent) community developing from connecting sports users.

Overall: There is certainly room for some money to be made in this arena and Jacked.com might just be the one to do it, but until they add more user interaction and live streaming videos I do not see their idea gaining significant traction.

Answerbag or is it Opinionbag?

2008-02-19T16:52:00.000-08:00

is what I would call an enhanced social Q & A site, the idea is that you ask questions to the community and get answers back. They are based in Santa Monica, California and are part of parent company Demand Media. If Demand Media does not ring a bell their CEO Richard Rosenblatt has had a hand in some major internet acquisitions in the last 10 years including but not limited to Myspace and iMall.

Wouldn't it be nice if there was a site with an extremely active community dedicated to answering one another's questions? It is a great idea that answerbag is executing as well as I can imagine but that being said answerbag is far from perfect.

The Good: Well if you are an investor or just a speculator Answerbag has just about everything going for it, they have money from their parent corporation, strong management (see above), and a very strong growth pattern. As for the site the utility is high, they do a nice job of letting everyone rate both the questioners and the answerers so you get a sense of who you can trust on the site. More importantly they only archive unique questions with good answers which means that you do not have to sift through 15 similar posts to find the best answer. Finally the community responds to most questions rather efficiently (however I have been waiting over and hour with no answer to my question).

The Bad: To harness the power, energy, and utility of their many thousands of users there will be some evil and this evil takes the form of endless opinions. One thing I do not want on a site dedicated to answers are endless opinions about religion and politics. If there is factual information that one can contribute to a political or religious question that is great but there is a whole lot of annoying (and useless) opinions on the site about democrats, conservatives, immigration, and everything in between.

Summary: Although it can be a pain sorting through all of the opinions when I am looking for an answer they do a good job of having an easily searchable archive of questions and answers which can provide a high level of utility to just about anyone (I found out the best way to remove dog poop from a carpet in seconds!) so I will not be surprised if Answerbag's strong growth continues.

Evo.com Gives Consumers an Online Place to Buy EcoFriendly Stuff

2008-02-13T15:55:00.001-08:00

So everyone seems to have recognized how hot funding green tech companies were in the venture capital space last year (and it looks to be continuing this year). So how does that trickle down in to the consumer facing web 2.0 space? Well what you get is Evo.com, a Santa Monica based, aggregator site of all things environmentally friendly.

Evo.com hasn't been out long, but it's likely to become a leader in the emerging sector of an online green marketplace. The audiences of tech savvy and green friendly are a very big overlapping demographic, so the business definitely makes sense, and Evo being one of the first in the segment, will probably do well. From just spending a bit of time with Evo I was pretty happy with the experience. The site is laid out well (in of course predictable green color schemes) and their general technology platform seems pretty solid. They programmatically scrape partner sites and assess a green rating on potential products based on environmental friendliness. If the product makes the cut, it gets on their site, along with the evo score and the relevant details. Pressuming Evo gets some traction they have a pretty good business model as well, in that they charges their partners a healthy sized referral fee based on the retail price of the product.

Overall as someone who is trying to do my part in purchasing more eco friendly products, Evo's niche hits a personal itch for me, and I'm guessing I'm not the only one.

Website: http://www.evo.com

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Wonderhowto Self Help Video Directory Lands Series A Funding

2008-02-12T19:53:00.000-08:00

Last week Santa Monica based Wonderhowto.com announced that the received an undisclosed investment from General Catalyst Partners. The site is basically an aggregation service for "how-to" type videos. Apparently self-help 2.0 sites are all the rage right now, as TechCrunch just covered yesterday First30Days (not socal based) which similarly focuses on positive self help articles during "the first 30 days of a major life change". And while the two companies don't exactly overlap, being funded at the same time, does imply that the venture community is recognizing the value in sites that focus on the self help niche.

So how is Wonderhowto.com? It's actually pretty cool, and they definitely index a lot of content. I ran across a few bugs while using the site, but nothing show stopping, and overall I was impressed with how thorough the indexing/aggregation of their content was.

So far in the recent months since the site has launched, Wonderhowto hasn't garnered much traffic yet, but the NY Times recently did a profile of

them (and their excentric founder), so maybe they'll pickup steam. On the otherhand picking up steam maybe harder for this type of business, because although clearly their is a huge market for self-help related stuff (just browse a bookstore to see how much we Americans gobble the stuff up), the videos and Wonderhowto itself is not nearly as viral as other video sites. Because lets face it, as lame as some stupid funny stunt video on Youtube is, people love to forward them around and thus they get a lot of play. Companies like Break.com do really well with that. But Wonderhowto doesn't have that growth advantage, I mean, who forwards how-to videos?

Of course the founder of Wonderhowto is known for his antics, so maybe we'll see some unuasual marketting strategies from his team to gain the viral traffic that they want. And because of that, I'd be surprised to see Wonderhowto not pickup some decent traction. Though I do have to say, guys couldn't you have picked a shorter name?

Website: http://www.wonderhowto.com

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Myspace Releases Developer API supporting Googles Opensocial

2008-02-06T15:35:00.000-08:00

We are not a big fan of Los Angeles based social network king, Myspace. Sure they helped take the social network world to the mainstream and are now the incumbent player in the space, but in the fast paced tech world, they are (at least from an innovation perspective) constantly being surpassed by upstarts as well as their key competitor: Facebook. But yesterday, Myspace finally made some huge strides to regain some confidence, by releasing their developer API.

While the results of the Myspace development platform to consumers won't be available until the first of March, developers can now get a head start building widgets and apps for the social network. This of course is great news for both consumers who will get all kinds of cool extensions to their social graph (ala facebook apps), and also great for developers who will likely be able to build a whole ecosystem of easy to make apps with a giant user base ready to get their hands on them.

While Myspace is late to the game in terms of opening up their platform, they seem to be doing a few things better then Facebook's earlier API release. For one thing Myspace is basically building their API over the top of Google's Open Social, meaning that developers can fairly easily port their apps between most social network platforms. This increased interoperability is not only a show of good faith, but also means more developers are likely to contribute, which is obviously good for everyone involved. Besides OpenSocial, the other thing that Myspace seems to have a better leg on is helping developers monetize their apps. Facebook is basically hands off in this case, and more then a few developers have made high trafficked apps that have return very little money for their efforts. Myspace seems to have an eye to help developers out in this area, which again is good for everyone involved.

Overall it seems Myspace is doing many things right with this move. It'll be interesting to see how things go with the full consumer release next month.

Goowy the cool widget company gets bought by AOL

2008-02-04T12:17:00.000-08:00

San Diego based Goowy is a virtual desktop for office productivity as well as widgets. They were founded in 2004 so they've been at it a while and it shows. Originally funded by Mark Cuban in a seed round, today they announced that they have been purchased by and will become a wholly owned subsidirary of AOL.

From the start Goowy, has delivered a great experience and received sold feedback from the users and press alike (Techcrunch, ReadWriteWeb, Mashable, etc). Their widget platform is similar and useful to the mac widgets (though flash based) and the virtual desktop suite (also flash based) which includes email, calendaring, and more is surprisingly good. For a web app thats based on flash its impressive both how fast Goowy performs and also how good the UI is (it reminds me a bit of a cross-up of Outlook, mac Mail and iCal).

So what does AOL want with them? Well Goowy already provides widgets via the myAOL portal and as AOL continues to shift from a subscription based business model, to a media channel with revenue mainly from advertising, Goowy becomes a nice delivery platform. By using Goowy's technology, AOL can create a form of widget based advertising, that becomes more interactive (but hopefully not more annoying as well), as well as extend the myAOL services. How much, AOL guts the technology, versus lets Goowy continue on building what their virtual office productivity desktop out will remain to be seen, but regardless I'm sure this is great news for the Goowy folks who have ran a impressively lean operation.

Local.com fancy public company with patent and no real content

2008-01-31T11:26:00.000-08:00

Irvine based Local.com is an interesting public company. It is a local content and search aggregator, that launched back in 2005. They've been making headlines in the last few months with a major patent approved for local search, as well as partnerships to aggregate business review content from the two biggest user generated content sites: Citysearch and Yelp.

Between the domain name and the fact that their poring millions into advertising to buy users to their site, they have great traffic, with at least 5 million monthly users. Now here lies the rub, local.com is essentially just a geographically focused search engine, and in some ways competes against the likes of almighty Google. For example if you are looking for a mexican restaurant in Los Angeles, they will give you indexed results of mexican restaurants in LA. Google similarly does this in their business map section. In both cases they are search focused, meaning that the actual content doesn't originate from Google or Local, it merely is indexed from other sites like CitySearch or Yelp. What makes this interesting, is that Google can run local search as an extension of regular search and can afford to build a similar product, without having to 'buy' customers. Local.com can't do that, and has to resort to paying a hefty chunk in advertising to get people to its site. But being that its a search engine, people are leaving the site as soon as they find what they are looking for. Those people are then spending their time on a place like citysearch where the real content is. Ultimately, this makes Local.com's business model questionable, they are paying for people who are not really engaging their site.

While I'd be the first to agree about the huge advertising potential in local revenue, local.com is bleeding far to much money, to really make geographic advertising work. Further, as a company that doesn't offer its own unique content, its pinned up to fight against Google. Now I know theirs chinks in Googles armour, but you have to have a far more revolutionary product if you are going to go up against them in the search space. While locals resuts are maybe a bit better then Googles, its certainly not enough to convert users. At least not this user anyways.

ThisNext gets more VC funding

2008-01-30T12:00:00.000-08:00

Santa Monica based shopping 2.0 site, ThisNext, recently received another 5M in a series B round from their previous investors Clearstone Venture Partners and Anthem Venture Partners (according to Techcrunch) . This backs up their Series A round of 3.5M. They also may raise another 2-3M in debt financing (according to socalTECH).

We have already profiled thisnext here, and the general mixed review still stands. They've also received mixed reviews from others, so the real question is whats up with total 11 Million+ these guys could potentially be sitting on? Apparently its for growth capital and more employees, but geez it seems like a crazy burn rate to me. Sure they have steady traffic growth, but I'm still not convinced they are doing anything so revolutionary to justify the valuation. Much like mahalo, I think these guys are probably just doing well making the funding rounds because of their connection with Jason Calacanis. Sometimes I wonder if VCs just seem to throw gobs of money at companies connected with serial entrepreneurs, and throw out the level of scrutiny they extend to unproven startups. In many ways, this is a shame, serial entrepreneurs many times have mediocre ideas the second time around, whereas there are many good startups that struggle to get funding because of their inherent unproven nature. And while understand the value of mitigating risk, the current trend of extending strong funding to serial entrepreneurs because of their track record, not their idea, maybe tipping the risk balance the wrong way.

A Love Hate Relationship With eCost

2008-01-29T15:00:00.000-08:00

eCost is an El Segundo based whole seller of new, refurbished, and discontinued merchandise. They are a publicly traded company (Nasdaq: PFSW), and have been around since the early 2000's, this review has come in the wake of my holiday season and not being sure where to get the best deal on all sorts of electronics. So here is a brief overview:

You get on the site and there a too much going on from blazing fires in the corner to 10 large ads trying to sell me on the newest gizmos. In reality this is not all bad, I did come here looking to purchase stuff so I was ready for the visual barrage. Next I ran a few searches and noticed that they seem to carry just about every electronic gadget on the market and best of all their prices were usually cheaper than the vast majority of the stores on Google Shopping (I still miss the catchy name of Froogle).

Upon checkout you come to realize you must have an account, this annoys me but I do realize the utility in storing user information. Right before attempting to complete the transaction I get an offer for "Platinum Premium" membership where they assure me that I will get better deals for only $39.95/year! If this doesn't irritate me enough it says that if I am upgrading from their old Platinum membership I only have to pay $8.95 to become a Platinum Premium member. This leaves me wondering how excited will eCost be when a new element more valuable than Platinum is invented so they can charge even more for "member benefits." And how long will it take eCost to change form "New Element Membership" to "New Element Premium Membership?"

I am never a fan of buying something (ie membership) before buying something (ie digital camera). Overall I could have see eCost being a solid site and a major competitor for the new meta-search technology of sites like Google Shopping but with memberships alienating their users I have doubt eCost will ever have a major impact on how we buy our electronics...

I wonder what Woot.com is selling today?

Break.com becomes mini google with mens ad network

2008-01-28T08:58:00.000-08:00

Beverly Hills based, Break.com is a video sharing social site that targets 18-30 male demographic. They basically focus on funny, crazy, stupid guy humor. As a hypertargeted Youtube clone, they have been doing well for themselves, steadily climbing to traffic upwards of 18 million uniques per month. Today they announced an ad network that extends their strong inventory reach to smaller web publishers.

While I'm not a big fan of Break, because they don't do anything fundamentally innovative (other than taking social video to an obvious niche), they are executing rather well. A year and half ago, they announced that they were going to pay publishers a semi flat rate for uploaded videos that make it to the front page. This has worked well for them because it gives an incentive for common bread and butter users who upload good (though often fake) videos to the site but aren't necessarily people who are trying to make full-time money off of it (ala Revver). They also have extended many partnerships with traditional tv publishers, clearly extending their reach further.

Now that Break.com has a good base, its incredibly smart move to sell/partner their ad inventory to smaller publishers. They have a strong sales and distribution channel that some stupid guy humor website would probably benefit well from compared to just throwing something like Adsense up. According to Techcrunch, they have 15 dedicated sales reps and have decent rates falling between $10 - $30 CPMs. So if you are small-medium sized website that sits in the mens or humor category that might pair well, partnering with Break is likely a much better deal then you'd do on your own.

As someone who falls into Breaks exact demographic and yet have very little interest in their site, I would have likely been not so kind in profiling them during their early stages. However Break continues to grow and execute well, and at the end of the day, that's what matters.

Stickam the controversial web cam enabled social network

2008-01-22T10:40:00.000-08:00

I just ran across a video based social network company called stickam thats based out of LA. What I found particularly amusing was the contraversy it caused a few months ago. Stickam launched in 2006 as basicaly another myspace except it has live web cam functionality. The streaming video is actually pretty cool, and lends itself to the myspace crowd quite well. In fact particularly, at launch for the high school kids that weren't leaving Myspace for Facebook, there was a decent chunk that were leaving for Stickam.

Now here lies the problem, Stickam is owned by a parent company that also owns a few major porn sites. Of course if you stop and think about it, it sort of make sense, who better to scale web cams to large social networking audiences, but porn site experts? Clearly the issue here is the morality conflict that minors are likely the target demographic of Stickam, and obviously you want minors no where near the porn industry. Though the truth is, besides a sort of handsoff relationship with the owner, its really hard to tell whether or not there is any real intermingling. The New York Times article that originally broke the story, is mostly based off a disgruntled ex employee. Obvisiously there was a bit of sensationalism, and its a hard call to know how big of an issue this really was.

In the few months since the NY Times article broke, Stickam's traffic has remained flat. Did the article hamper the growth, or has the in crowd moved on to something else? Is Stickam's chances of success done for? Who knows, but I actually found watching people transfixed to the computer, while they were playing on stickam kind of interesting. But then again, I'm not a minor, or a parent either.

Thembid combines Craigslist Gigs with Ebay

2008-01-21T12:12:00.000-08:00

Riverside based Thembid is a reverse auction marketplace, where you post a service need and let businesses bid on the job. They have been live to the public since early summer of 2007, and have notably demoed at the TechCrunch40 and recently at Twiistup.

The Good

Thembid is an interesting concept that sort of takes the idea of the popular Craigslists classified section: gigs and refines it to a bidding process ala Ebay or LendingTree. Besides bidding, you can also post regular classified ads. They also have a rudimentary local directory that has basic business information, google map location, and the ability to rate and review the business.

Just recently they extended all of these services via a whitelabel solution for even more niche areas of job bidding (such as construction). If they can do a good job marketing that service, I imagine the whitelabel alone should help grow their customer base quite well.

The Bad

As with many web startups, until Thembid gets some traction, its not super useful. Right now the jobs posted are very few and far between. Thembid needs to figure out how to get more jobs up or else consumers and businesses alike aren't likely to tune in. If I was to give them a suggestion, I'd say to figure out how to aggregate content from something like craigslist or maybe even monster, until they have enough unique content on their own to be self sustaining. Also I'm not particularly confident with Thembid's business model. Right now they are charging businesses 40 dollars to upgrade their profile, with the notion that more people are likely to choose a premium business over someone else. Frankly though, right now theres not much of a bidding war, with the lack of activity on Thembid, and even if their was, I think most consumers are going to choose business with the lowest price and the best ratings, so I have a hard time seeing what businesses will pay for this. Even still, many successful websites take awhile to figure out their exact business model, so if this premium service doesn't work out, assuming Thembid can gain traffic they'll probably be able to figure something out.

Conclusion:

Really its the traffic pattern that concerns me with Thembid. From their initial release on to about three months after they were able to grow traffic to roughly 100k monthly users. Not too shabby and definitely a good trend. But then after the first three months, they've dropped down less then 5k users. I'm not sure what exactly is going on here, but this is a bad bad sign. Hopefully whatever Thembid is doing wrong traffic wise, they figure out, because they have a semi interesting service that I'd like to see continue to evolve.

Website: http://www.thembid.com

Screenshot:

TechForward Online Gadget Pawn Shop Insurance

2008-01-18T17:43:00.000-08:00

Where do you go to get rid of your hot gadget gear from two years ago? Well besides ebay. Los Angeles based TechForward apparently is the place. These guys, closed a Series A round from First Round Capital last year, with the semi unique idea of a buy-back/recycling site focused on tech gear.

So how does it work? Well basically you buy a device (mainly a laptop or ipod) pay a one-time fee, and you are guaranteed to be able to sell back to them and some rate. A sort of trade in insurance for product that experience rapid changes in technology.

At first glance, I actually think TechForward is a good idea, but under the hood there is some problems. They have virtually no traffic to their website, probably because people perceive that its sort of a rip off. For example I just got a new macbook and they are saying that for 29 dollars I can get the insurance and sell it back to them guaranteed for 400 dollars a year from now. Thats crazy, year old macbooks could easily be sold on either ebay or craigslist for twice that. So about the only thing this appeals to is some lazy guy who wants some money, from his gadgets, but not all the money. Now that same lazy guy still has to go through the trouble of signing up for TechForward in the first place, and frankly that doesn't seem to add up.

Website: http://www.techforward.com

Uber bland myspace 2.0

2008-01-17T12:30:00.000-08:00

Los Angeles based Uber.com is yet another social network that tries to bring Myspace's artistic base in to the "uber-cool" web 2.o world. Uber focuses on using the social graph to make your own website. Which to me seems like doing nothing more then rewording customized profile page to make you think your getting something special.

The one thing that would have been cool about Uber is the ability to bring in media from other social sources (such as youtube, flickr, etc) , which I guess you could use to create the ultimate aggregated website (profile) about yourself. Unfortunately the way to do that wasn't particularly intuitive, and thus I'm left with nothing of interest to say about Uber. Maybe the one surprise is that Uber some how seems to be gaining credible traffic (250K last month) despite the fact that no ones heard of it. For the life of me, I can't figure out why they'd be gaining such decent traffic in such short time, so clearly someone sees something in Uber that I don't.

Website: http://www.uber.com

Dreamhost Overbilling shows how to start shit storm

2008-01-16T22:38:00.000-08:00

They say that no press, is bad press, especially in the Internet world, where links are gold. However even then I don't think, Los Angeles based DreamHost is very happy that they are getting coverage all over the net (ref: TechCrunch, Infoworld, SocalTech DownloadSquad, etc, etc). So what is Dreamhost? Well basically just your everyday web hosting company.

There is nothing particularly noteworthy about Dreamhost, EXCEPT that they have lit a fire in the technosphere for overbilling ALL of their customers an entire year - adding up to a whopping $7,500,000.00 in overcharges.

Ok so understandable right, I mean humans make mistakes all the time, and companies certainly aren't immune (heck most startup companies are just a series of mistakes until they stumble on to something thats not a mistake). The real problem, that is going to rake Dreamhost over the coals for the foreseeable future is the PR message they delivered. In these days of new media, where companies try to have a hip blog that oozes their personality behind the machine, transparency becomes a double edged sword. In Dreamhost's case their blog normally shows their funny, light-hearted nature, which appeals well to the techno geek looking for a good cheap hosting service. Unfortunately, today when it means they screwed up with peoples money, light hearted joking is not the tone customers were wanting. A sincere apology would have calmed a lot of the storm, but a lack of "official email notification" and instead just a blog post that references Homer Simpson, was not exactly what the doctor ordered. Now 600 comments later (which are almost all negative), I'm sure Dreamhost's is feeling particularly sheepish.

But to me though the crazy part wasn't even the tone that everyone is drilling them on. Honestly I can write the tone off as another mistake, that was human error from the heat of the moment. I'm sure they were just as surprised as everyone else to find the overbilling problem, and they probably just were overzealous in writing something quick on their blog to be as transparent as possible. In this case though people weren't looking for transparency, but reassurance, and Dreamhost would have been better off stopping for a minute and putting a little PR face on.

To me the crazy part is that this kind of glass transparency showed us something, that I think will be hard to recover from: lack of leadership. Because despite the tonal problems, what to me is the core issue is how they tried to blame the problem on someone else. The claim was that it was the "programmers" fault because the system was built too flexible. This frankly is about as lame as an excuse gets. And even if it wasn't, it doesnt matter whos fault it is, as the public head of a company, you take the blame - simple as that.

Ultimately if mistakes are measured by how you recover from them, DreamHost failed miserably.