ReadWriteWeb

The Daily is back, now that I'm over my jet lag :-)

- Scoble: I’m not an edge case (If you listen carefully, you'll hear me whoop near the end of Scoble's excellent outburst. I've never whooped in my entire life - yet here I am carrying on like I'm on the Oprah Show...)

- Alex Barnett's 'Edge Case' series on Flickr (caption to pic on left: "If someone calls me an edge case....")

- Dion Hinchcliffe on Live Labs (Microsoft's think tank and incubator is indeed an interesting project -- the best part for me is that they're going to invite external people, and not just scientists either, to play a part)

- Product Development: TV Guide will roll their own (cool - I did some analysis work on this...)

- Rumors of a Google homepage makeover (here's a screenshot c/- Flickr... I like the look of it)

- Google misses Street targets, shares tumble ("[this] ended the uninterrupted winning streak Google has had since its August 2004 public offering.")

- Apple analyst predicts big things (sees "potential for new iBooks by April [...], a potential "media hub" product (and more services), new iPods into year-end (including a new media player) and even a new cell phone within a year.")

- Ben has details of Aussie 2.0 action (Yahoo7, NewsCorp's truelocal.com.au, Fairfax - all ramping up for a Web media battle)

- The Online Storage Gang (TechCrunch has an excellent reference and analysis piece on online storage solutions, sure to be one of the key products on the Web by the end of this year. Great to see aussie company OmniDrive as their #1 pick!)

- Mining the Two Types of User-Supplied Content (Josh ponders the data mining efforts of Yahoo and Google)

- Internet Explorer 7 Beta 2 Preview released ( Dave Winer says it's significant because it's "the first Microsoft release that includes comprehensive support for RSS not only on the producing side, but also on the consuming side.")

Flickr pic by Alex Barnett

Curious comment from famous VC Michael Moritz of Sequoia Capital, he who invested heavily in Google in 1999. He also got a piece of Yahoo and Paypal -- also Webvan and eToys, it has to be said. He's listed as number 1 in the 2006 Forbes Midas List (via Jeff Clavier). Interesting then to note that Moritz thinks the consumer tech fad is "played out" (Forbes' words):

"Consumer-tech businesses, he says, are a pit of "muck and mire." They have low margins, require massive marketing budgets, compete with monster retailers' house brands and face Asian copycats. Though he has helped fuel the consumer craze, he laments the rise of handheld gadgetry: "The march of consumer technology will spell an end to tranquility," he says. "Most of the venture money going into consumer-related companies will be squandered, and the rest will be lost. It will be brutal."

These days Moritz is focused on less flashy investments such as newfangled batteries (via an outfit called A123), training software (Saba) and 24/7 Customer, a tech outsourcing shop in India."

I'm not sure what to make of this, because near the end of the same article two other VCs are quoted as being very bullish on 'consumer tech'.

Kenneth Lawler, a partner at Battery Ventures and number 41 on the Midas list, says: "The driver of tech innovation has moved drastically from the enterprise to the consumer. It's all about enabling the digital lifestyle." And then David Chao, number 10, says "If there is any one engine that is going to drive the next bubble--good and bad--it will be those billion handheld devices that will be sold in 2007."

I suspect Moritz is being disingenuous with his statement that consumer tech is played out. But he could also be saying that the real value has gone 'up the stack' (to use a trendy term). In other words, the value won't be in the consumer tech devices - but what is built on top of that platform. Another interpretation is that Moritz thinks consumer tech is just too mainstream amongst VCs now and so he's looking to the 'next wave'. He's obviously a very clever and forward-thinking fellow, as evidenced by this quote from a Feb 2004 Harbus Online article (dredged up via a bit of Googling):

"Harbus: What could you tell us about Google and the excitement around the company?

MM: I could tell you a lot, but then I would have to shoot you!"

NB: he said that two years ago, before the Google IPO and Gmail and lots of other Google innovation surfaced.

The latest comScore Networks report states that total Internet spending reached $143.2 billion for the full year 2005, an increase of 22 percent from 2004. What's more, comScore Networks chairman Gian Fulgoni is quoted as saying: "It's clear based on what we're seeing so far in 2006 that the strength in online sales will not wane anytime soon."

Yahoo continues to be the top Web property, with 127 million unique visitors in December to its sites. MSN-Microsoft registered 116 M uniques, Time-Warner about the same, while Google was 4th with 93 M. Others in the top 10 were: eBay, Amazon, Ask Jeeves, Wal-Mart, Viacom Online, NY Times Digital. MySpace just missed out on the top 10, coming in at number 11 with 32 million uniques in December.

One thing that caught my eye: Wikipedia came in at number 37 with 17 M uniques - the only non-commercial site to make the top 50. On the other side of the coin -- retail sites such as Wal-Mart and Best Buy performed strongly in December, due to holiday purchases. Of course, these numbers have to be taken with a grain of salt (someone always pipes up in the comments about the accuracy of this type of data, but I always say - well show me better data then!).

Current Alexa data tells a similar story: Yahoo number 1, MSN-Microsoft number 2, Google number 3. AOL, Time-Warner's biggest Web property, is number 21. Which indicates that Time-Warner has a diverse set of big Web properties, as they're number 3 in comScore's list.

Todd Bishop from Seattle PI newspaper speculates whether Wellington filmmaker Peter Jackson was in Seattle and Microsoft last week... at the same time a certain Wellington blogger was in town.

Pete and me (nb: pic of me by Alex Barnett)

Todd wrote:

"Filmmaker Peter Jackson, best known as the "Lord of the Rings" trilogy's director, was spotted in Seattle last week, touring the Museum of Flight near Boeing Field. See today's Insider column for details. As the column notes, there's a lingering question: Was he also at Microsoft working out details on the "Halo" movie that he's producing? No word on that from the company."

Two Wellingtonians in Seattle and Redmond in the same week? It's got to be more than coincidence. Admittedly one of them is slightly more famous and richer... and slimmer.

I'm still in transit from my flight back from Microsoft Search Champs in Seattle. Due to foggy weather in my home city of Wellington, I've had cancelled and delayed flights to deal with. And to top it all off, the airline lost my luggage!! I'm currently in Auckland and will be off to Wellington within a couple of hours. Let's hope my luggage isn't too far behind.

I had a great time in Seattle and briefly in San Francisco on the way back. Microsoft Search Champs was fantastic and well run. There were nearly 60 people invited and the discussions were very enjoyable. Thanks to Microsoft for inviting me over -- and I look forward to seeing all their very promising web-based products released to the public over 2006 and beyond.

I also got the opportunity to meet with the Robot Coop and Blue Favor, two little local Seattle web companies. Plus I got to spend time with some of the Workgroup and other Web types. It was great fun all round. I believe there's a drunken podcast around somewhere that me and a bunch of the workgroup recorded late one night. Compelling listening, I'm sure (not!) :-)

Photo by Dan Farber, via Marc Canter. A pic from a dinner Marc organized at Max's Opera House. Some of the people there, seated L-R: Jeff Clavier, Jennifer Allen, Michael Arrington, Chris Alden and me.

On the way back I met with Marc Canter and his family, to discuss plans for 2006 with Marc's company BBM. He has lots of exciting things in store for BBM, so it's fantastic to be a part of that! Generally speaking I'm at a kind of crossroads with my career... I've established myself as an independent analyst/writer in the Web industry, but freelance work is very seat-of-the-pants and subject to a lot of changes and variables. I'd ideally like some more stable and ongoing work, being a family man and all. I'm thinking about whether to move to the US (if I can - I've had little luck so far with that goal), or moving to Aussie, or staying here in New Zealand. 2006 is going to be an interesting year, for me personally as well as Internet companies like BBM and Microsoft.

Also check out Dave Winer's How to reform the VC industry post, which I've only had time to glance over today. But as soon as I get home (please let it be today!) I plan to read it more thoroughly and contribute my thoughts. I had the pleasure of chatting on the phone to Dave briefly while at Marc's house. Both he and Marc have a lot of history with web stuff and that's why I always listen closely to what both of them say. It's also why I feel like Silicon Valley is my spiritual home, because lots of fascinating people and companies live there.

But right now, I just want to get back to my real home! :-)

Today I was at the Redmond office of Microsoft and it was an interesting day of discussions about... well I'm not allowed to say due to NDA. But most of the last hour of presentations was bloggable. TechCrunch has a good summary post, to which I'll add a few more details. 

Live.com is preparing for more improvements. Program Manager Sanaz Shari wants it to be "the best place to search" and they are pinning a lot of their hopes on "gadgets" - which are mini applications, or "snippets of data" as Sanaz described it. The themes of Live.com being a "desktop on the web" and making the Web feel like a desktop app -- were hammered home again. 

The most interesting part was the announcement of an upcoming tv recommendations gadget, which talks to your Media Center box in order to program tv shows. It also has a nice ratings system. This is an example of some of the "advanced gadgets" that will be coming soon from Microsoft's Live.com team and which will hopefully make it a more compelling experience. 

Another new Live.com feature, that is actually being released tomorrow, is images integrated within live.com RSS feeds. It's just a minor enhancement, to make the current bland homepage a little more colorful. Which it needs :-)

Also discussed in the 'bloggable' part was MSN's new Adcenter, which is apparently strong on demographic data. And the demo I saw did have some impressive charting and analysis tools. So where do they get the demographic data from? From Passport and lots of other "touchpoints".

An online classified offering called Fremont was also discussed. It's a craigslist-like, localized app based on an internal Microsoft service called Micronews. Its business model is (what else) contextual advertising and premium listings.

Oh and there was also a lot of passionate debate during the day about recent US government requests for the major search engines to provide search records - and specifically MSN's decision to comply. There's a bunch of Search Champers doing a podcast, as I write this, about the privacy issues. It seemed to get people fairly excited.

That's a wrap of the non-NDA issues that were discussed at Microsoft Search Champs today. It's been a full-on two days in Seattle so far - and tomorrow won't be any different!

UPDATE: Alex Barnett and Josh Porter have the privacy debate podcast up on their blogs now. Robert Scoble also covered the issue.

In a few hours I'll be on a plane to Seattle, for the Microsoft Search Champs V4. My second trip to the US and my first to Seattle. It'll be 15.5 hours of flying time from New Zealand (not including waiting around for connecting flights etc), but luckily for me I'm flying business class - another first :-)

I'm honoured to be invited by Microsoft and I'm really looking forward to seeing the Redmond campus. A slice of Microserfs for this kiwi :-) I hope my feedback on their upcoming web-based products proves useful, to repay them for this exciting trip.

I'm looking forward to meeting lots of new people at Search Champs, plus I'll be catching up with a good number of the Web 2.0 Workgroup. Also there are some Seattle folks whose blogs I've been following for a long time, like Erik Benson and his Robot Co-op colleagues and Jay Feinberg. So I'm hoping to get a chance to meet them.

The famed Seattle Public library, built by leading architect Rem Koolhaas, is high on my list of things to see. As it is for Fred and others. The pic below from Flickr is from Niall Kennedy, taken during a Gnomedex party at the library.

No doubt I'll be taking lots of my own photos during my time there!

Next time I post to this blog, I'll be over in Seattle. In the meantime I'll leave you with a few good links, seeing as I'll be in mid-air when the next Daily is due ;-)

- The Web Is the Platform (good dev-focused article from Application Development Trend magazine - via John Musser)

- How Do You Become An Industry Analyst? (two-part series by James Governor of Redmonk. I think I'm probably a good example of a blogger turned career industry analyst...)

- Millennials & media (NYTimes article about kids born between 1980 and 2000 and their media habits)

Aggregating and filtering the latest Web Tech and Media news, so you don't have to! This is a 5 or 6 day a week feature and feel free to email me interesting links for inclusion: readwriteweb AT gmail.com.

- PodTech coverage of the Sundance Film Festival (as usual, John Furrier is providing outstanding audio coverage of Web and Media events -- this post is called 'Think Mobile - Movies on the Go')

- Sundance + imeem photoblog (Photos, blog posts and some vids from this 'behind the scenes' Sundance blog)

- Starbucks goes Hollywood ("It is, to be sure, a death of a thousand cuts: a brand extension here, an ill advised partnership there.")

- Dan Gillmor on Citizen Media (podcast by Berkman Center at Harvard, in which Dan discusses some interesting points raised about the future of big media, gatekeepers, and international citizen journalists. Thanks Tim Lynch for the link)

- The Blooker Prize 2006 ("The Lulu Blooker Prize is the world's first literary prize devoted to "blooks": books based on blogs or websites." Entries close 30 Jan.)

- Apple Chief Set for Disney Role ("Steven P. Jobs could be considered the Walt Disney of his era"... Pixar being sold to Disney for $6.8 billion according to NYTimes sources)

- Who can challenge Apple's iPod/iTunes? ("...competing directly with the iTunes Music Store is too much to ask of even Microsoft")

- RSS came from the publishing industry (Dave Winer: the tipping point for RSS was the adoption of the format by the New York Times in 2002)

- nothing like a trashing to get the day started (Ning developer responds to yesterday's TechCrunch review)

Flickr pic by matchity

From the Martin Scorsese DVD bio about Bob Dylan, called No Direction Home. This shot is right at the end (from a 1966 concert) after audience members booed him for playing electric and one guy yelled out "Judas!".

Dedicated to all those Web developers who are building things out of the ordinary -- and anyone else who does their own thing :-)

I've been following Umair Haque's fascinating articles on new media economics and 'edge competencies' - and I've noticed he prefers Google's media strategy to Yahoo's. I've been curious to understand why, because the common wisdom over the past year or so is that Yahoo has been making all the right moves in this new world of Internet-powered media. Whereas Google often seems to be more experimental and lacking in a grand strategy for their products. Which is not to say that Google isn't effective in this new landscape - far from it. Just that Yahoo has seemed to me to be leading the charge into 21st century media.

Well Umair has now posted about Yahoo's recent earnings call and on first reading, I have to say his dismissal of Yahoo came across as general and lacking in specifics. So I left a comment, which Umair replied to and IMHO it's more useful than his original post. Umair commented:

"I'm not trying to bust on Yahoo, nor do I have a bee in my bonnet - I'm just pointing out the obvious.

Let me try and simplify.

1) There's a new value chain emerging. Think reconstructors.

2) Industry boundaries are blurring. Think Google + radio.

3) The value equation is being rewritten. Think Pay-per-x.

In all these cases, Yahoo is an imitator. Why? They don't have a real competence - they don't know how to create value at the edge.

This is an economic trap. They acquire companies to learn how to do better, but can't touch them for fear of messing them up. No learning is built. More acquisitions are made...

Back to the 3 points above, this translates into a strategic trap. They're forced to try and dominate the old value chain (this is what aggregation, licensing, etc really mean), and can't build the new one.

Of course, YMMV."

I don't claim to be as smart as Umair on this topic - clearly he's put a lot of thought into this and his new media economic theories (which btw I wish he'd stop calling Media 2.0). And I see where he's coming from... Google is creating new markets at 'the edge' with products like Adsense and perhaps with this new radio play they're doing now. Yahoo is putting a lot of effort into social software and user-generated content, but are they actually creating new 'value chains' like Google? Or are they, as I think Umair is saying, using new methods to dominate old markets?

I'm unsure of the answer at this point, but I wanted to a) throw the question out there and see what others think (please leave a comment), and b) recognize the thought-provoking work that Umair is doing at the Bubblegen lab.