Entries Tagged 'Technology' ↓

Microsoft will announce a new search advertising model tomorrow at the Advance08 Conference in Bellvue, Washington, we’ve learned from sources with knowledge of the new offering. The core of the new service will be a new set of 18 new vertical search offerings that will give users cash back on any purchases made from advertisers who bid to participate.

A number of high profile ecommerce sites are participating in the early stages of the program, which is being dubbed “Live Search Cashback” and is based at least partially on technology developed from Jellyfish, a company Microsoft acquired in 2007. A message on the Jellyfish site says the site is down “currently offline to perform necessary service upgrades and enhancements.”

The goal, of course, is to lure high value searches away from Google. Only a small percentage of total searches are highly valuable, usually because advertisers are right on the cusp of selling something to the searcher (searches for books, for example, or mortgages).

Microsoft’s hope is to lure advertisers with a promise to pay only if a purchase is made, unlike Google’s pay-per-click model that carries more risk because a searcher may not complete a transaction. And by offering a percentage of the fee collected from advertisers, Microsoft hopes to convince searchers to take the last mile to a transaction through the Live.com search engine, generating more advertising revenue for Microsoft and simultaneously hurting arch-rival Google.

The new product will be announced tomorrow morning by Kevin Johnson, the President of Microsoft’s Platforms & Services Division. We will be live blogging the event.

Microsoft has been quietly building up to this for some time. Farecast, a company they acquired last month, will likely power travel, one of the 18 verticals.

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We’ve been getting a number of tips that say Grandcentral.com has been down for some users, and that their domain name is set to expire today.

We’ve done our best to confirm, and we believe that these rumors have some merit:

a) EasyDNS is the registrar of record for Grandcentral.com
b) EasyDNS’s WHOIS record shows that Grandcentral.com’s domain expires today, May 20th
c) EasyDNS has already taken over the DNS for the domain
d) The DNS server does not have an IP address for Grandcentral.com
e) For many people, Grandcentral.com isn’t working
f) Grandcentral seems to be working for users that access the site through its IP address: http://216.239.37.52

While some users may still be able to access the site, this may be because of a delay in DNS propagation. If Google has let the domain expire, then these users won’t be able to use the site by this time tomorrow.

We should note that even if the domain has expired, Google will still have a grace period to remedy the situation. That said, if the lapse proves to be real, it would be an embarrassing move on Google’s part.

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Skype has partnered with Jaman, an internet movie service, to provide users with thousands of embeddable film scenes that can be added to their chats, profiles, and “mood messages”. The service is still in development, and Skype plans to have it available within the next couple of months.

Jaman’s licensed collection consists almost entirely of independent and foreign films, which will appeal to Skype’s international audience but may put off its American users. Skype has yet to finalize the available clip catalog, but at launch it expects most of the videos offered will be movie trailers as opposed to actual scenes. This limited library doesn’t sound particularly enticing - Skype will need to include more engaging content if they want this to catch on.

It seems that everyone just realized that people like to chat while they’re watching videos. In the last few weeks, we’ve seen new products from Lycos, Videophlow, and Userplane that plan to offer similar features. The trick will be to offer content that people actually want to talk about, which some of these companies don’t seem to have covered yet.

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Sugar Inc., the company behind PopSugar and a number of other blogs geared towards women, has acquired StarBrand Media. StarBrand provides an online marketplace for a number of major television shows, allowing viewers to purchase the clothes and props they see on TV.

Los Angeles based StarBrand will help expand Sugar’s ShopStyle, an ecommerce site that they acquired last September. StarBrand’s current partners include CBS, Warner Bros., The CW, Showtime, Alcon, and Lionsgate. The company will continue as a standalone property, and will now feature a destination site that combines their ecommerce offerings with Sugar’s editorial and community assets. Financial details of the deal have not been disclosed.

ShopStyle and StarBrand both offer targeted advertising that is much more effective than traditional web ads, leading to CPMs that are 3-5 times higher. In effect, they turn every article of clothing that appears in a magazine or television show into an advertisement, endorsed by whichever celebrity is wearing it. And Sugar’s audience tends to be interested (and sometimes obsessive) about celebrity culture - it’s no surprise that they’re keen on dressing like their favorite idols too.

StarBrands sees competition from a number of sites that profile celebrity outfits: SeenOn has a number of television partnerships and offers a very similar service, while Coolspotters offers a wiki-like community surrounding celebrity styles.

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MySpace may once again start to take action against third party applications that disrupt the user experience (or their revenue streams), it seems. Back before MySpace Platform this was limited to the occasional widget provider that got out of line. But third parties now have a broad arsenal of features to attack users and get additional installations and clicks. Messaging users is among the most effective, and most annoying.

Cofounder Tom Anderson is making a rare blogging appearance on the MySpace Developer blog this evening - outlining changes to their developer guidelines regarding how third party applications can communicate with users.

This is a a problem that Facebook has had to deal with extensively, including early changes to their platform to limit what we called “black hat” activity by application developers. Facebook has continued to refine the rules over time, but has also shown that they are willing to break their own rules when revenue is at stake.

MySpace has added a new section the guidelines called “Application Communications.” Specifically, applications are now restricted

• No incentives may be given to a member for sending a message, bulletin, comment, or any other form of communication. This includes “points,” “bucks,” increased standing, or even features within the app.
• It must be very clear to a member what they are sending, when they are sending communication. “Share with friends” is not sufficient messaging, the link must state “send comment,” “send bulletin,” and so on.
• The “no popups” rule we have had in place since day one applies to messaging windows. This means no more popping up a messaging window the first time someone tries to use an app. No popping up messaging windows without a user clicking on a very clearly marked link.

Applications that are already live have two weeks to comply.

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This post was written by guest contributor Paul Bragiel, founder of Meetro, a location-aware instant messaging platform that was DeadPooled last month. Bragiel is also the founder hosted forum solution Lefora. See our coverage of these two companies here, along with our first post on Meetro in August 2005. Also see our post titled What To Do With Failed Startup IP?.

In the spirit of openness, I write this post on what we did wrong at Meetro - a post mortem of sorts. You don’t see this often enough in the startup world even though the majority of startups go belly-up. Hell, there are probably a few today that will go away with a whimper. So much knowledge is lost. If you’ve had similar experiences, I encourage you to share them over at Lefora.

To those of you not familiar with Meetro, we were one of the first location-based social networks. We figured out where you were physically and then we would tell you else was around you in real-time. You would then be able to instant message with them, check out their profiles, and hopefully meet up. Other functionality included telling you about restaurants close by, media created nearby, and various local information that pertained to your location. We also supported all your various instant messaging protocols (AIM, MSN, Yahoo) and a slew of other social features.

Even with a robust product we simply couldn’t capture enough market share. So here are the major problems we had that, in the end, we couldn’t overcome. There were, of course, mini fires and random things but every startup goes through those. I have a feeling some of the other location-based startups out there right now are experiencing the same things.

Most importantly, there was a “location problem”. It’s really hard to grow a product that’s 100% focused on where you physically are. Tons of companies have tried this before and most of them have died. We, of course, were cocky and had to give it a try. There was just something so sexy about the idea that you could load up a piece of software and it would tell you about someone nearby who was interesting to you. Someone will crack this and make billions of dollars on it. I can only hope to be involved in some shape or form, since it’s an itch that hasn’t gone away for me.

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There’s no shortage of video sites that let bloggers embed movies into their posts. But until now, bloggers have typically had to rely on others to capture, edit, and upload this content - there hasn’t been an easy way to create your own clips from recently broadcasted media.

RedLasso is looking to change this. The site, which is currently in private beta, has created a useful (and potentially problematic) system that allows bloggers to sift through recent television broadcasts and extract their own clips.

The site captures content from big-name media sites (CNN, Comedy Central, and the BBC) within an hour after airing. RedLasso then creates an index of each file using closed captioning transcripts and phonetic audio detection (the company says that using phonetics instead of dictionary-based detection works better for proper names and places).

This index is searchable for relevant broadcasts, presented in their entirety. After finding a desired portion, the user can set the endpoints and a clip is generated and ready to be embedded.

The system sounds useful, but it also seems ripe for abuse. Because shows are captured in their entirety, RedLasso could easily be used as virtual (and free) Tivo. To combat this RedLasso is taking a proactive approach: they’re screening every applicant to the beta to ensure that they are actually bloggers. They’re also monitoring video usage, so if they notice that someone’s been watching a bit too much of The Daily Show, they’ll terminate their account. This may work well enough in a closed beta, but the company might not be able to handle an increase in abuse once the service goes public.

And then there’s the copyright issue. RedLasso has been in talks with a number of networks, but they have yet to establish any content deals. This is going to be the deal-breaker for the site. The company’s COO, Al McGowan, says that the short clips they generate fall under fair-use, but we’ve seen that argument fail countless times. And what about the full shows that are being hosted on RedLasso servers? If the site has a hope at long-term success, it’s going to need to establish those licensing deals.

RedLasso held a Series A funding round of $6.5 million last November, and they are looking for $10-15 million in a Series B round. Another player in this space is Blinkx.tv (which features audio detection), though users can’t define their own clips.

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Yesterday, I reported a strong rumor that Sequoia Capital had invested in image-hosting site ImageShack. Today, I spoke with CEO and founder Jack Levin. He would not comment specifically on the funding rumor other than to say that over the past few months he’s been in discussions with a variety of VCs. So he may still be in the late stages of discussions, or he may have closed the round. He really wouldn’t say. But at the very least, he is definitely looking for funding.

He was, however, very forthcoming on other aspects of his business. And outlined a grand ambition befitting an early employee of Google (his claim to fame is the clustering architecture that Google is based on).

Levin did want to correct a few things from the original post, in which I said he has self-funded the startup until now. “I never put a single dime into the company,” he says. Unless you count the $80 for the first month of server hosting back in November, 2003 when he was still working at Google. But that month the company made $200, so it has been profitable from the start. His secret:

We were profitable for the last three years. The most different thing about our company is that it would take 7 to 8 million dollars in opex [operating expenses] per year to run a media hosting company like ours if you were using traditional non-off-the-shelf clustering technology, where we use a tiny fraction of that amount, which allows us to be profitable and take risks other companies can’t.

Because of the way he designed his back-end architecture, he can serve two terabytes of images from a single $1,000, Linux server. So he spends only about $200,000 a year on capital expenditures and now has about 500 servers. He was also able to leverage his industry connections to get really cheap bandwidth rates.

Also, subscriptions make up a tiny portion of revenues. Most of the revenues come from advertising on the site. ImageShack serves about 10 million ads a day, mostly to people who go to the site to upload their images. Although the site also attracts 500,000 brand new visitors every single day. Levin also notes that it is “unlikely we will ever modify the image” with ads because “that would be like spamming the Internet.”

Rather than put ads in or around the images it hosts, Levin is working on harnessing all the data his service generates about content consumption (perhaps to better target advertising on ImageShack or to syndicate that targetting data to ad networks). Like Google and Yahoo, he is deploying the open-source Hadoop software to create a massive distributed supercomputer, but he is using it to analyze all the data he is collecting. Levin is vague about how he plans to make money from this data, but it is clear he is convinced the data is pretty valuable. He explains the opportunity in broad strokes:

We are like a broadcasting company that broadcasts in every country, in every language, on every topic. There are a lot of misconceptions in the Valley hat the Internet is just two or three companies. But that is not true.

Don’t you think it is ridiculous to see business plans based on how many Facebook widget users you have? We have millions of Websites using our services. It doesn’t matter what Facebook does.

So I am still not sure if Sequoia funded his startup, but I can see why it would want to.

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The Google of Russia is Yandex, and it is preparing for an IPO on Nasdaq in the fall with the hopes of raising $1.5 billion to $2 billion, reports Reuters. That would give the company a $5 billion valuation. Yandex was founded 15 years ago and the last funding I can find was only $5.3 million back in 2000, according to Quintura CEO Yakov Sadchikov (Quintura is a smaller search engine also based in Russia). If that is all the company raised, it will be a huge payday for investors ru-Net Holdings, Baring Vostok Capital Partners, and Tiger Technologies.

Yandex has a bigger search market share in Russia than Google (it is the biggest site in Russia overall). And in Europe it is the No. 3 search engine, ahead of Yahoo and Microsoft. Globally, it is in the top 10.

Its revenues, though, are not that large, considering its ranking. In 2007 it reported only $167 million in revenues, which was a 130 percent increase from 2006. Founders Arkady Volozh (CEO) and Ilya Segalovich (CTO) still run the company.

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CBS President & CEO Leslie Moonves paid a visit to CNET headquarters in San Francisco today, we’re hearing.

He came alone. No Quincy Smith, No Michael Marquez (the guys who did the deal). No entourage of any kind. The goal? Address the troops (all of CNET, in person and via a webcast) and let everyone know how this $1.8 billion merger is going to play out.

The main message: CNET is now the cornerstone (or one of the cornerstones of CBS’ online strategy. Neil Ashe, CNET’s CEO, will report to Smith, and CBS Interactive’s various properties (such as Last.fm, CBSSports.com, etc.) will all become one big family, moving traffic and leveraging “deep relationships with big advertisers (auto, pharma, tech, etc.).” Expect lots of interaction points between the the TV and online properties.

Will they succeed in their grand integration plan? First they have to close the merger, which isn’t a done deal. This was a hurried negotiaton, in reaction to the looming threat from a activist shareholder group, led by Jana Partners, with ambitious goals of overhauling the company.

CNET signed a confidentiality agreement with CBS on May 7, according to the merger agreement (Section 8.02(c)), just one week before the deal was announced. CNET’s investment bank, Morgan Stanley, certainly didn’t shop the deal much to other likely buyers before CNET signed.

Other bidders may still come to the table. And if they bid more, CNET has to pay a relatively paltry $35 million breakup fee (good analysis of this here). Perhaps now that CNET is engaged, other suitors (see Microsoft) may suddenly find it a lot more attractive than it was a couple of months ago.

Still, all signs are positive for CNET right now. The merger price, which works out to $11.50/share, is, coincidentally, $.50/share more than Jana Partners said they could expect to get for the company by 2009. So the only question left is, does anyone want CNET more than CBS does?

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