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« November 2006 | Main | January 2007 »

December 28, 2006

Apple, Stock Options and the Beatles

Apple_logo1 Apple wants to be what the Beatles were.  I've heard this a number of times, and it is true.  The Beatles were immesely popular and with their music, defined a generation.  Apple is doing the same.  Beatles kept renewing themselves, trying different kinds of music.  So did Apple.  Just when people thought the Beatles were out, they came back strongly.  So did Apple.  Even the iPod looks curiously similar to the Beatles' White Album.  Masses loved the Beatles, and if a company can ever be loved, Apple is one of them.

But this new fake document allegations regarding stock options, surrounding Apple and Steve Jobs is bothering me.  I can't help but think, how would I feel about the Beatles if I found out that John Lennon made a fortune in illegal diamond and drug trade? 

Apple has a lot to lose here.

December 20, 2006

Big News For Turkish Americans In The Valley

Tunc Doluca has become the CEO of Maxim.   The news was expected and welcome.  Maxim stock is up 6% this morning at $10B market cap.  Tebrikler Tunc, gurur duyuyoruz!

Maxim Integrated CEO to Retire
Tuesday December 19, 4:49 pm ET

Maxim Integrated Chief John Gifford to Retire; Tunc Doluca Named As Replacement

SUNNYVALE, Calif. (AP) -- Chip maker Maxim Integrated Products Inc. said Tuesday its chief executive, John Gifford, is retiring for health reasons.

The company named Tunc Doluca president and CEO effective Jan. 1. Independent board member B. Kipling Hagopian was elected interim chairman until a permanent one is found.

Gifford, 65, will stay on as a part time advisor. He is the company's founder. He has served as CEO since 1983.

Doluca, 49, has served as the company's group president overseeing its Portable, Computing and Instrumentation Electronics segment since May 2005.

December 14, 2006

What is Yahoo Doing?

I have many friends at Yahoo who I respect a lot and hence I don't want to write negative things about the company, but what they just pulled off on this poor consumer is unbelievable.

I came back from the Microsoft briefing I wrote about below, and docked my laptop.  Started Yahoo IM, and got a message saying "Yahoo can automatically load updates, would you like it?"  I said yes, then I got a window popping up saying "now Yahoo toolbar has Yahoo Messenger embedded, would you like it?"  I said yes, and Yahoo did three things.

1) The toolbar they updated is now twice as thick as the old one and take up a lot more space on the top of my browser, and a lot of the space they take is blank.  I can't collapse it.  This ridiculous.

2) They change my homepage to www.yahoo.com.  Hijacking somebody's homepage is what sketchy sites do, not the #2 site on the Internet.  But here is the sad part, the page they hijacked was http://my.yahoo.com, one of their pages.  That's the page that's been customized by me, and that's hard to switch out of.  It's their best property that serves their best ads. They take that away and put a generic one in its stead.  How's that for shooting yourself in the foot? 

3) To add insult to injury, I try to load an image in my blog post, and this time the Yahoo toolbar popup blocker is blocking pages typepad is trying to serve me.  Now I have to turn that off as well.

How much pain do they think users can take before they get to the benefits of their product.  Answer, not a lot.  My Yahoo toolbar is gone...

Microsoft adCenter

Logo_adcentersoph1 This morning, I attended a briefing at Microsoft that was meant to introduce what's new with MSN/Windows Live.  Overall the event was well attended and well organized by Microsoft.  The first session, the one I was most interested, was about what Microsoft was doing in the advertising space.

We were shown a bunch of slides as to what Microsoft's version of Adsense would do for advertisers and publishers.  It was a lot of marketing on how it would have better targeting and relevance.  There were a lot of words, but there was not stake in the ground as to what it would do better.  I couldn't stand it for long so I asked a question point blank:  "Can you give us the bottom line?  How much more money will publishers make using Microsoft as opposed to your competition?"  (Google of course).  The answer was surprising, and so were the follow on questions:

The answer I got was; "Google is doing a great job with adsense, and we cannot match the revenue a publisher will make with adsense, but we will give a lot more control to the publisher as to the kinds of ads that get shown on their page".  This was shocking, I thought, for sure, Microsoft would start by making publishers more money.

Immediately after this answer, another question was asked by Ken Gullickson sitting on my left: "How much of a discount will publishers have to take vs. Google to get the benefit of controlling the ads?"  The answer was "it will be a very very small discount to what you get from Google on some of your inventory, but not all of your inventory".  The answer was not satisfying, and Bill Gurley, sitting on my right went straight to the jugular and asked: "How's that going to work with Google's exclusivity clause, if you don't offer ads on all the inventory?"

Three questions by VC's and that was it for Microsoft adCenter.  There was one great piece of advice offered though from our table.  "Why don't you guys (Microsoft) dramatically change the revenue split, say keep 10% and make it transparent to disrupt Google's game?"  That was a great suggestion, but the sideways answer made it clear that Microsoft could not do that at all.  If they did, it would sure affect Google's share price.

Here is where I come out of this as a VC and publisher.  On my ads, I pretty much only care for the dollars it brings in, given there is some broad editorial control over the kinds of ads (adult, gambling etc.).  If I get clickthroughs, then the ads are relevant.  I don't want more relevant ads if come with less clickthroughs.  So I don't get why a publisher would accept less revenue for more relevant ads?  If publishers could make more money, they would definitely switch out of Google, and I think Microsoft needs to understand that fast.

December 12, 2006

A New Kind of Zoo

Lion_2VC’s see all kinds of wacky, crazy ideas, and that’s the fun part of our job. But rarely do we see an idea as crazy as the one I am about to mention. It’s a new and very unusual kind of zoo. You read it right, a new kind of zoo. It’s so unusual, I need the blogosphere’s help on thinking through whether it will work. I must say though that, one of the founders is a well known crypto zoologist, and the other has built and operated many zoos profitably before. I’d like to describe what they do and ask you whether it’s a good idea.

However, before I get into the details of the business I need to talk a little about how we see and interact with animals. Most of us in developed countries don’t live near animals. We barely even know where on earth each animal lives. We don’t know much about them except for what we see on TV. Today, you have to travel to Africa to see kangaroos in their natural habitat. Likewise, to see elephants you have to go to the Amazon basin. The point is that we almost exclusively see animals on TV or in a zoo. And there is a big difference between those two experiences.

On TV, we see the lions crawl in stealth to chase down a wildebeest, we see eagles dive to catch fish and we see giant anacondas ensnare capybaras. Good stuff. You go to the zoo, and you are lucky if you see a lion that doesn’t want to die. They are declawed, neutered and eat minced meat from a plastic bucket. Often times they seem cute to us, but they are in some sort of silent delirium circling in a cage and repeatedly hitting the glass, not ever accepting that they got hit by thin air. Eagles don’t have it any better. In good zoos they live outdoors but their wings are clipped so they don’t fly. In worse zoos, they hide terrified in their cage in the dark, and all you see is a glitter in their eyes and what looks like a beak. And for the anacondas, don’t get me started with them. I’ve been visiting the rainforest section of the San   Francisco zoo for years, and what they show us for an anaconda is a snake that never moves. For all we know it’s a fantastic work of taxidermy (next time I go, I am going to take a picture, save it in my camera, and if in the following visit a month later that snake hasn’t moved, I am going to expose the scam but I digress…).

Same goes for the Koala in the San Francisco zoo. It doesn’t move. OK, fine it is a slow moving animal; after all it eats eucalyptus leaves (read, not so nourishing), but still, can’t we once see it do something we want.

This is the problem that this startup solves. The animals are stimulated by the visitors. It’s called EAS; Electrical Animal Stimulation. The animals are all tagged by small, indistinguishable wireless actuators and as the visitors press the buttons a mild electric current is given to the animals. This makes them do the things the guests want. Before you guys all jump in and say “that’s cruel” let me cut and paste a bit from the company FAQ. I cannot link to it because I need to respect the teams desire to remain anonymous.

What is EAS?
EAS stands for Electrical Animal Stimulation. It’s how we allow our guests to stimulate animals to show their characteristic behaviors.

Why EAS?
Animals in zoos need stimulation, because they don’t get to do three things that are important to them. They don’t find their food, they don’t run away from predators and they don’t find mates. This doesn’t leave much left for them to do. Sitting idly, they lack exercise and often lose these abilities. EAS keeps them always active and provides for education to our guests.

Is EAS safe?
Absolutely. Animals have evolved in environments far harsher than a zoo. They naturally get poked, cut and bitten. The electric currents we use create sensations similar to what they normally feel living in the wild.

It sounds inhumane, doesn’t it?
It does, but it isn’t. EAS gives the animals an environment closer to what they are used to. Animals don’t long for a “better life” in a zoo where they are free from enemies. They are programmed to do what they do in nature. We simply provide a more realistic environment for them.

But surely, electrocuting animals can’t be sustainable?
This is temporary. As technology advances we will eliminate using electric current and put more realistic ways to stimulate animals. For example, when a child presses the “predator” button in the prairie dog exhibit, a mechanical eagle will soar and scare the dogs away. In the case of Koala’s, the “move the Koala button” will stimulate the slow bending of the branch the animal is sleeping on, thereby stimulating the animal to climb to a more comfortable branch.

What if these buttons get pressed too often?
Our patent pending artificial intelligence engine will prevent that. If the “predator” button has been pressed, it will wait a while before it can be pressed safely again.

Still, it just doesn’t feel right, does it?
Animals don’t know what’s right. Is keeping them in a cage, right? How about eating them?

OK, I am convinced that this is safe, what other exhibits are you planning?
Soon we will unveil our newest exhibit architecture. With this architecture, we keep the predator and prey in the same physical location. The zebras and lions will share the same exhibit area, they will be separated by tall walls whose transparency can be electrically controlled. They won’t see each other most of the time. But every now and then, the wall will become transparent, and for a split second the lion will be next to the zebra and they will see each other. During that period they will display behavior patterns previously unseen in zoos.

Can I buy tickets online?
Not only can you buy tickets online, at the time of purchase you can let us know what kind of behaviors you want to see, and depending on the votes of our ticket-holders we can dynamically alter the overall zoo experience so that every visit is a different excitement.

So there you have it. These guys have thought this through. In the small scale beta zoo that they’ve built (they request we don’t mention where), they’ve noticed that the park was routinely at max capacity, and the more important metric, visits per user, has averaged once a month as opposed to the once every six months for other zoos. Operating this way, the zoo pays for itself in two years.

So my question to the blogosphere is this. Would you go to this zoo? Is this a good idea or a crazy one to invest in?

December 07, 2006

2nd Life's Biggest Competitor

Why pay 2nd Life to be somebody else in a virtual world, when you can be paid to be somebody else in the real world?

How can that be?  Well, suspend disbelief for a second and look at the these two sites. 

Untitled_1The first is payperpost.com.  I signed up for them long time ago and didn't do anything with it until I heard they got funded by a VC firm I know and respect.  This site offers bloggers cash from advertisers if they write on the topic of interest for the advertiser.  It's a really cool idea and the company calls itself rightfully the "Consumer Generated Advertising Network".  For example here is what one advertiser will pay you $10 for:

"We want you to make a short video asking Megaglobe to hurry up and launch their search engine Megaglobe.com .

We want you to have fun and to create any scenario that you can think of. The video must be at least 1 minute.

Once the video is done, please post it on Youtube. "

This really strikes a nerve with me because if it works soon everybody will be putting themselves in ads saying things for money that they don't believe.  But that's what ads are.

Quick digression...I used to hate the pain reliever commercials.  Imagine this ad:  A tough looking elderly man, in his fifties or sixties, waring a squared shirt, outdoors, well-built, tough face, white hair, maybe an NFL coach, overall totally respectable and in one word, SOLID, goes on TV looks straight in your eyes ands says "For my really tough headaches, I take Tylenol".   He doesn't, he's an actor, he's paid to lie. I've for years had the wet fantasy to track down this actor in his home break down his door and throw the bottle of Tylenol at him and say "you liar...I took the Tylenol but it didn't do me no good!" but I digress..

WwwSo you make money by making ads, then you take that money and give it to FakeYourSpace.com.  That's the second site I am talking about.  This site went up 5000% on Alexa recently from 260K to 6800.  What they do is that they create a fake myspace (or any other SN site) profile for you where you use the pictures of a model that looks really hot to represent yourself.  You buy popularity.  They also give you 2 comments per week on your profile, also from good looking people.  Am I kidding?  Read for yourself on their FAQ:

How Much Does The Service Cost?
It all depends on what you want. You have the option of picking how many friends you want to have, how often they comment, and what kinds of comments they leave. Our basic service starts at $1.99/month but until further notice we will cut this price in half to only $.99/month.

Can I Pick My Friends?
Of course you can! This is what Fake Your Space is all about. You can pick the hottest looking friends to leave you messages. We have a wide selection of men and women of all ethnic backgrounds .

So here is how this arbitrage works.  You write about something and get paid, they you create a fake page and fake traffic to get more traffic and you write more on this site to get paid more.  By doing that, what have you done?  You've become somebody else in the real world, and kept that hidden. 

Now, I ask you, isn't this better than paying to become an avatar in a computer simulated world?

December 06, 2006

Susan Decker to Take On Google

I911It's not clear to see what's going on at Yahoo, because frankly the focus of the Internet is on Google.  But two things come out clearly enough to share:

1) Terry Semel has picked his top gun, Susan Decker, to take on Google.  She will be running the Advertiser & Publisher group.  The Technology group is not taking on Google, that battle has been lost.  The Audience group is not taking on Google because that's where they have a lead (albeit diminishing).  But the real fight, the fight for dollars, is in getting advertisers.  Susan Decker is no longer in charge of reporting Yahoo's numbers but making them.  And she has to win market share from Google.  This will be fun to see.

2) How come they could not name a person to run the Audience group when they have this many Vice Presidents?  My knee-jerk reaction is that it will be almost impossible to find a person to parachute in and make an impact in the time that matters.  Yahoo is a big and slow moving company.   If this person is not in the ranks, then a massive clean up is needed.

December 05, 2006

Nobody is Immune To Wishful Thinking

Another classic from TED.  A very entertaining video that shows clearly, that if you want to believe, you can believe in just about anything. 

There is also a very interesting piece in there that tests one's attention span in a video.  It is gender biased and shows a difference between men and women.  A must see.

Enjoy.

If you can't see the video...the link is here...

http://tedblog.typepad.com/tedblog/2006/11/skeptic_founder.html

December 03, 2006

Constituo, ergo sum

I used to think that blogs were just, "Myspace for adults", a place for adults to show off what they know.  Lately, I think it is your resume, updated constantly by you and your network, much the same way Wikipedia updates itself.  So why do we blog?

Fred Wilson has a fantastic post explaining why he blogs.  It captures very well why, I do it too.  It is highly relevant for VCs.  Here is the part that resonates with me:

"But most of all, I am getting to know entrepreneurs of all kinds via my blog. Entrepreneurs in India, Australia, England, China, Silicon Valley, and of course, New York.

They read my blog. Correct me when I am wrong. Pound the table when they agree with me. I get to know them. And they get to know me. And when it comes time for them to raise money, they come to me. But only if they think what they are doing will be interesting to me. And how do they know that? Because they read my blog where I talk incessantly about what is interesting to me.
So my blog acts as an amplifier and a filter. I see many more opportunities, but they are also way more relevant. It makes me a better investor. "

VC's have to lead with their ideas.  They can no longer sit back and pontificate, spill their wisdom about the subject AFTER the entrepreneur is done with his or her pitch.  They have to do it before they take the meeting.  They have to get out there out on a limb.  Why do they have to?  Because those who do, will force the others to do it.  Let's face it, there is not all that much that differentiates VCs.  Many entrepreneurs I meet already know a lot about me and what I think about issues important to them before they meet me.  Same is true apparently for Fred Wilson.  It goes the other way too. I often find myself reading the "company blog" of a potential investment.  There is usually good information there.

I suspect what's true for VC's to be true in all professions.  You have to get yourself be known, and lead with your ideas.  Where do you stand?  Most professionals will have to have a blog.  It will soon go from being a nice to a have to a must have.  Because your blog is your resume 2.0.  It answers the question; "what have you done lately?"

Constituo, ergo sum.  I read that in Wired Magazine.  It means "I post, therefore I am".  I bet it's not  too far from the truth.

Fred Wilson's entire post can be found here.

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