The Praized Blog

Techcrunch reports on a rumor this morning that would have Google either buy Skype from eBay or Google partner with Skype.  According to the site,

“Skype, acquired in late 2005 for $3.1 billion, has been a financial albatross around Ebay’s neck. eBay removed Skype co-founder and CEO Niklas Zennstrom in October 2007, reportedly due to frustration at the financial performance of Skype. Ebay also negotiated down the huge earnout due to Skype stockholders and took a $936 million one-time loss around the transaction.  It’s clear that eBay wants to either unload Skype, or significantly drive performance.  Google, by contrast, is just beginning to think about how to dominate the voice space. They have a VOIP service through GTalk, a free 411 service and GrandCentral, a telephone management service they acquired last year for $50 million.”

What it means: I think this potential acquisition/partnership makes complete sense. IMHO, call tracking and pay-per-call represents a large portion of future local search revenues and Google clearly sees that local search is where they will get tremendous growth in the next 5-10 years.  By buying the Skype infrastructure (and user base) and combining it with the GrandCentral technology and expertise, they instantly get core assets to execute that strategy globally.

This morning, at the Web 2.0 Summit, Max Mancini from eBay was talking about “The Hows and Whys of Distributing Your Content and Services”. He discussed the importance for companies of opening up their content and services to the rest of the web and of avoiding the walled garden mentality. In passing, he mentioned the following platform statistics:

• Facebook: 90,000 developers, and 5,000 applications since May 24, 2007
• Google: “tens of thousands of active gadget developers”
• Salesforce.com: 55,0000+ developers
• eBay: 60,000 developers, 9,000 applications

He also said that in Q2 2007, of all new listings posted on eBay, over 55% of them came from web services tools. And a third of those came from third-party built applications.

What it means: by opening up their platforms to third party developers, these various players have increased their speed of innovation by “outsourcing” some of it to outside players. eBay is often too big to go after niche markets but developers can make a profit because they’re smaller/quicker. In return, the ecosystem gets stronger and customers/consumers benefit from it. Can you also imagine the cost to build all those applications? eBay takes a look at which applications are being used and will acquire smaller tech firms when third-party developed tools become core. So, more innovation, speed to market, cost savings and a stronger ecosystem. Can you ask for more?

(via SpringWise)

What do you get when you cross online classified ads with web-based video? Realpeoplerealstuff.com is equal parts Craigslist and YouTube—a whole new way for customers to reach out to one another to sell their used appliances, automobiles, collectibles, concert tickets and countless other goods and services. “Realpeoplerealstuff.com combines the hottest internet trends in one, easy-to-use site: e-commerce, snarky writing, funny videos, everyone’s desire to be a star and video sharing.”

With a few clicks of a mouse, customers can upload their own video commercials, recorded on their camcorders, webcams, digital cameras or cameraphones. Ads are organized by category and location, and users can enter text descriptions, prices, thumbnail photos and tags along with their video clips. For best results, users are encouraged to engage their personality, creativity and sense of humour when filming their commercials. And who knows? One may well turn out to be the next average Joe or Jane launched into internet stardom. The service is entirely free—for now at least, though there may come a day when, like Craigslist, modest charges apply to select portions.

What it means: I really like the concept as I’m very visual. But I wonder about the quantity of energy needed to produce a video vs. taking a simple picture, even if there are many video-capture devices out there. I remember when I started selling stuff on eBay in 2002. There used to be some barrier to entry if you wanted to post a product picture. Then, eBay introduced one of their coolest seller function: the UPC code product finder. When listing a product in some categories (like videogames), you just need to enter the product’s UPC code to instantly get the default image attached to the product, usually a cover shot. By removing friction, eBay got me to post more stuff for sale. I think Realpeoplerealstuff.com will have to think about how they can remove some of that friction.

I also think that classified advertising is all about local. Right now, local seems to be a second thought to the whole site. They need to embrace local much more to eventually be successful. There’s also a chicken & egg problem with local content. You need local content to make your site relevant to local users. I think Realpeoplerealstuff.com should be looking at doing backfill content deals (maybe with Oodle.com) to improve their local content breadth and depth.

Google and eBay had a staring contest in the last few days, which resulted in eBay winning a round against Google.

TechCrunch has a great summary of what happened:

1. eBay doesn’t allow merchants to use Google Checkout to settle eBay transactions. Google invited eBay online sellers attending eBay Live! in Boston this week to a party that they called the Google Checkout Freedom Party.
2. eBay decides to pull all U.S. advertising on Google.
3. Google backs down, cancels the party.

What it means: eBay is the biggest Google AdWords advertiser (which might be worth more than $100 million in revenues for Google). According to this SF Chronicle article, “EBay’s ads showed up on Google 188.3 million times in March, according to comScore Networks, more than double the number run by Target, the No. 2 Google advertiser.” and I think that does not include Shopping.com numbers. You should never underestimate the power of any of your coopetitors. If you’re coopeting with another large organization, be careful not to disrupt the delicate equilibrium, unless you’re prepared to go to war.

My friend Mat just sent me this news regarding the acquisition of LiveDeal.com by YP Corp., the owner of YP.com.

Under the terms of the acquisition, LiveDeal shareholders received 15,968,514 shares of YP common stock. LiveDeal will remain an independent entity and a wholly owned subsidiary of YP and the two companies will leverage one another’s content, sales teams and technology to strengthen their individual product offerings. YP plans to use LiveDeal’s innovative technology platform to converge its four principal marketing channels – directories, mobile services, classifieds and advertising/distribution networks into a first-of-its–kind, hyper-local marketing solution for businesses and consumers.

After listening to the analyst call, here are additional nuggets of information:

• They want to become “eBay without the auction”
• They claim they will be the “first player to fuse classifieds and YP online” (which is not true as most international directory players, like Yellow Pages Group, who have acquired classifieds companies in the past have integrated both together already)
• Livedeal Inc.’s revenues have grown 300% in the last two years and will reach $5M this year. Breakeven will also be attained this year and current burn rate is $100K per month. Its gross margin is 85%.
• Livedeal currently has 1M unique visitors
• Livedeal.com’s will become YP.com’s technology platform.
• Investors in LiveDeal Inc. will now own 11.5% of YP Corp.
• LiveDeal’s business model: running newspaper publishers’ classifieds and directory section and sharing revenues with them. The Philadelphia Enquirer, The Toronto Star and Montreal’s La Presse are all customers.

What it means: like my friend Greg, that’s certainly a deal I was not expecting. I’ve said for a few years that directory and classifieds are a natural fit together and I think that acquisition signals more consolidation in the marketplace. For example, Oodle is likely to be acquired by a newspaper publisher this year. As for YP Corp, it looks like they are morphing into a platform play. Hopefully, their past legal troubles won’t impair their ability to sell to large media companies.

From the press release:

YellowPages.com , a subsidiary of AT&T Inc., today announced it has rolled out user reviews to its national site, enabling consumers to share opinions on local and national businesses

The service allows consumers who register with the site to rate businesses from one to five stars, with five stars representing an “exceptional” rating. Site visitors can also write original text recapping their experience with businesses.

YellowPages.com visitors will automatically see the average rating of businesses to the right of listings, with the number of total ratings and reviews for the listing indicated in parentheses. A “Read Reviews” link allows visitors to read reviews in full, which are posted alongside the username of the reviewer and the date the review was submitted.

Update: Greg Sterling says that initial user reviews are coming from Judy’s Book their own beta test.

What it means: user reviews are now definitely a key element of any local search site. In this implementation, I like the fact that the merchant can interact with the reviews and comment back in the site a la eBay or Citysearch. I think that’s the right way to integrate user reviews.

Meta-Praized is a collection of links & stories we’ve “dugg” on Digg.com in the last few weeks. By clicking on that link, you can always follow what’s currently on our mind:

• “Google plans street advertising presence” via Engadget
• “Google Talk to Interoperate with AIM This Year” via the Google Operating System blog
• “Microsoft Hits 100 Million IE7 Installs” via BetaNews
• “Privately, Hollywood admits DRM isn’t about piracy” via Ars Technica
• “Small Town News Station Heads to YouTube” via SplashCast Media
• “MTV to buy RateMyProfessors.com” in News.com
• “Asterisk: The Future of Telephony” via linux.inet.hr
• “Google (Google Checkout) breaks ceasefire with eBay” via Valleywag
• “Big Media’s Crush on Social Networking” in the New York Times
• “Google Inc. is currently in negotiations to purchase Adscape Media (videogame advertising)” in CNN Money
• “Traffic to newspaper blogs soars” via MarketWatch

Since the acquisition of MyBlogLog by Yahoo, I’ve had many questions regarding blog widgets. Today’s New York Times (found via GigaOM) brings some light to that phenomenon.

What are they?

“Widgets are elements, often in the left or right columns of a blog, that enhance its usefulness or aesthetic appeal. (The term “widgets,” confusingly, can also refer to compact applications that operate on a computer’s desktop.) “Widgets pull content or services from some other place on the Web, and put it into your personal page,” said Fred Wilson, a venture capitalist at Union Square Ventures in Manhattan. Typically, they’re built with Flash software from Adobe, or the JavaScript programming language, which ensures that they work with most Web browsers.”

Three categories:

“Ed Anuff, a co-founder of Widgetbox.com, divides widgets into three categories. “One is self-expression widgets, like photo galleries, games or YouTube videos that you like,” he said. The second category includes widgets that generate revenue for a blogger, like a box that displays auctions from a particular eBay category, or a blogger’s favorite DVDs from Amazon.com. The third category, Mr. Anuff said, encompasses “site-enhancement widgets, like discussion forums, news feeds or a guest book, which provide better utility for your Web site.”

Popular ones:

“According to Widgetbox, its most popular widget allows bloggers to incorporate an updated feed of news items from the site Digg into their blogs. Matt Mullenweg, creator of the WordPress blogging software, says the widgets that his users have been incorporating into their sites lately include Meebo, an instant-messaging application that allows blog authors to chat with their visitors. “One of my favorites,” Mr. Mullenweg said, “is the Sphere It widget, which pops up a window to show you articles and other blog posts related to what you’re reading.”

Business Models:

“Most widgets are available free, though they usually carry links or logos that promote the site that supplies them, and they sometimes have advertising. As with other phenomena that make up the wave known as Web 2.0, blog widgets don’t always have clear revenue potential. “As a widget user, it’s not my problem to worry about how they’re going to make money,” said Guy Kawasaki, an author, blogger and venture capitalist. “But as an investor, would I invest in a widget company giving things away for free? It’s hard to see a business model for it, other than to hope that Google buys you.” Mr. Anuff predicted, however, that “by the second half of 2007, some widgets will shift to a subscription basis.” For some sites that offer fee-based services, widgets can act as roadside billboards that help lure traffic. ”

What it means: widgets are part of the atomization of the Web that I listed in my 2007 predictions. They allow decentralization of content, features and functionalities. Widgets are also available for Microsoft Vista (called gadgets) or the various start pages like the Google home page (also called gadgets) or NetVibes (called modules). The MySpace ecosystem has also seen an explosion of plug-ins and widgets. All are interesting way to propagate your content in other web sites, while maintaining control of it.

This article by Bambi Francisco in MarketWatch recaps 2006 and sets the stage for 2007 in terms of the impact of user-generated content:

“Given our obsession with users, and ourselves, I’ve highlighted what will be in demand or wanted in 2007 as the audience is increasingly relied upon as the voice, the experts, the supporting actors and/or virtual stars of tomorrow. These bottoms-up celebrities combined with traditional top-down stars will increasingly dominate the new media landscape of 2007.

Wanted: Your contribution

The concept of a wiki — a site that essentially enables egalitarian editing and collaboration of everyone from experts to novices — has been around for many years. The best-known example is Wikipedia, an encyclopedia that anyone can edit. Today, Wikipedia has 725 million page views per month, up more than 400% from last year, according to Nielsen//NetRatings. And, the beauty of Wikipedia is that it has about 6 employees. This year, the wiki model exploded to the point that now a book is being written in wiki style. Barry Libert is spearheading the first book project to be written in such a manner. (…)

Wanted: Your expertise

“Everyone is an expert [in something],” according to Richard Rosenblatt, who was the former chairman of MySpace and who sold the social network to News Corp last year for $580 million. Today, Rosenblatt is heading up Demand Media, which he calls a new media site. Demand Media is looking for professional, expert content on any topic since the core of its strategy is to start with trusted, professional content and then provide the tools to let people contribute related content or opinions. Some of Demand Media’s sites that use expert commentary include eHow, trails.com, gardenguides.com and golflink.com.

Yahoo Answers is probably the most popular of services that rely on volunteer experts to give people answers to their questions. (…) Yahoo Answers, which now has 60 million users and 160 million answers, marked its one-year anniversary in early December. Those answers helped drive Yahoo Answers traffic from practically zero in November 2005 to 14.5 million this November, according to Nielsen//NetRatings. In a survey conducted by Yahoo Answers and Harris Interactive, a third of online adults have used a Q&A site. (…)

Wanted: Your opinions and comments

Wanted: Your history

User-generated content can come in the form of a users’ history. As long as people can know your history, it can help form recommendations that drive sales of products, movie rentals, or news articles. In the past, roughly 5% of Amazon’s book sales came from recommendations, as estimated by analysts. According to Netflix members select approximately 60 percent of their movies based on movie recommendations tailored to their individual tastes.

Wanted: Your reviews, ratings

Wanted: Your profiles and journals

Wanted: Your video creations

What it means: this is a great summary of the major pillars of user-generated content. Still looking for a good New Year’s resolution? Make sure you open the conversation with your users. They want to tell you something!

Meta-Praized is a collection of links & stories we’ve “dugg” on Digg.com in the last 7 days. Feel free to add us as a friend: PraizedDotCom .

• “How Much Privacy?” (re: ComScore MediaMetrix) in Forbes Magazine
• “Fox, Viacom, CBS and NBC discuss YouTube rival” via Reuters
• Google adds new layers to Google Earth via TechCrunch
• BidNearBy.com: a cool eBay, Craiglist and Google Maps mash-up via ProgrammableWeb.com
• “Google’s Click Fraud Rate is Less than 2%” via Marketing Pilgrim
• “Google Base Has a New Interface” via the Google Operating System blog
• Google adds “+ box” to show Google Maps in regular search results via Search Engine Journal
• “LiveDeal.com Adds Yellow Pages to its Online Local Marketplace” via PrNewswire
• ” Consumers Prefer Movie Rentals To Downloads By A Wide Margin” via TechWeb
• Yahoo’s business case for acquiring Facebook.com pops-up on the Web via TechCrunch
• Skype reorg, eBay people now in place via GigaOM