07: Cautious Optimism and Cynical Buzz (also published on ZDNet)
07: Discussion: Prosumer Media Mena Trott, Mark Fletcher, Rich Skrenta
07: Conversation: Sergey Brin of Google
07: Search engine stats: Jim Lanzone from Ask.com
07: Zimbra UI Minute
07: 3D Web Services
07: The Alumni Report Joe Kraus , Kim Polese
07: Google RSS Reader announced at Web 2.0
06: A Conversation with AOL CEO Jonathan Miller
06: Discussion: Open vs. Closed Models
06: Bubble or Bubble-let?
06: Mary Meeker talk
06: Yahoo CEO Terry Semel conversation
06: ZDNet post on the Terry Semel conversation
06: Flurry of Web 2.0 Business Activity
05: Web 2.0 Conference, first day impressions - ZDNet
05: Web 2.0 Conference coverage notes - Wed afternoon
05: Barry Diller conversation
05: Web 2.0 Conference Introduction
05: Web 2.0 Conference: Yahoo - What's New in the Search Ecosystem: Users, Publishers, and Advertisers
05: Web 2.0 Conference: Ad Models: A New Approach to Marketing?

Plus I took paper notes for the following, which I will turn into blog posts at some point:

05: Open Source Infrastructure workshop
05: Mash-ups 2.0: Where's the Business Model? workshop

John Battelle just asked (as I type this) eBay founder Pierre Omidyar if we're "getting to another bubble". Pierre says there are so many creative people inventing innovative things - and the barriers are much lower. Fundamentally that's a good thing, he says, but there'll be much more competition. So he sounds positive (but then that's his job, because he's investing in this stuff). So...grain of salt and all that.

Fred Wilson is taking a careful approach to investing in 2.0. He wrote today of "seeing second derivatives" in Web 2.0. For example Fred heard a business described as "Google Maps meets delicious, and another described as Skype meets MySpace." He concludes:

"When the first derivative hasn't fully figured its long term business model (other than getting bought), the second derivatives are pretty scary. I am a contrarian at heart. This situation bothers me."

Fair comment. In all the conversations I've had, the main business models I've heard are getting acquired or contextual advertising. There are other business models though - e.g. subscriptions, premium content. Some of the successes so far of Web 2.0 - e.g. topix.net and Bloglines (I met and chatted with the founders of both today) - have profited greatly from those business models. But how many others can/will? Are we too reliant on Google, Yahoo and the other bigco's for acquisitions or advertising revenue?

Henry Blodget, (in)famous former Wall Street Internet analyst, has just started blogging. He had this to say on the first dotcom era, what he learned and how it could be applied in the current era:

"One reason for my success in the boom years is that I was optimistic about the prospects for a handful of Internet companies at the right time [...] The first stage of my own personal dotcom bust came when, along with many others, I stayed optimistic too long."

So that's why we're seeing cautious optimism - and cynical buzz. We don't want to be optimistic for too long, but we certainly want to enjoy the sun while we can. I certainly do, being a fresh face in the Valley and wanting to take the opportunities before me while the time is right. And the time is right/ripe, no question. Actually I think there may be another bubble when mobile technologies take off in the western world, but I'm talking for now about Web 2.0 and social software stuff.

I'm wrapping up this post now, just as Tim and John are wrapping up the conference. It's been a fantastic 3 days, very very busy and bustling, and hugely enjoyable. I'm buzzing - but trying my best to be just a little cynical ;-)

Mark: started bloglines to scratch my own itch. other people must have this problem too, that was genesis.

Rich: folks in newspaper companies surprisingly savvy about the Web. more and more content every day - our job direct people to that.

Mena: the day we took funding, wanted to be more than lifestyle business.

John: google weather, feed reader

Mark: google joining long list of companies doing feed reader - "one more data point that validates our original vision". bloglines changes the way people use the internet, so will be very important in future (ref: google feed reader, but framing it in bloglines terms]

Rich: doesn't have to be all or nothing, win-win, etc.

Mena: competing with all the big players...

John: re creating content - do you have populist vision, celebrity culture.

Mena: project comet... it's about communication more than publishing for her Mum, but are limited numbers of publishing. communications first and foremost for sixapart.

John: all have built platform on top of roiling conversations

Rich: we're really early. like web in 93-94. over next 2-5 years, going from bloggers writing "real content" to much more about discoverability for people on topics they're interested in.

Mena: it's about privacy, writing to specific audiences. no scale expectations.

John: video, audio in bloglines etc.

Mark: video, audio not as easy to consume. search technology isn't there. text will be king for forseeable future. use internet as it matures for different types of communication - more nuanced forms of communications. different mediums, more segmentation.

Mena: should be counting how active people are, how are they engaged, what are they doing.

John: spam, what do you do about it? threat or will we manage?

Mark: we have natural barrier - we only crawl sites our users subscribe to.

Rich: created opportunity for google, relevancy.

Q1: bloglines hasn't changed much recently [that sounds familiar!]

Mark: challenge for us is one of scaling, keeping up with huge recent growth. #1 priority is to keep the trains running on time and keep decent user experience. has most of that solved, so soon will see more innovation.

Q from Jason Calacanis: monetize for RSS for bloglines.

Mark: we haven't settled on a business model yet. couple of diff ways we could go - e.g. one option is we never monetize it. if we monetize, you the content owners are partners. so if we go down that route, we'll talk with publishers.

Rich: has to be publisher tie-in.

Q: only business model among entrepreneurs seem to be to be acquired. are there business models?

Rich: there are business models (they didn't take investment). ad-targetting, ads on sites etc brought in revenue. business model innovation required.

Mena: could've flipped two years ago. it's a long game.

Sergey: attributes success to luck. followed our hearts in terms of research areas. found they had something useful and impactful. early on talked about open sourcing, but eventually started the company. exciting and wild ride. starting to get used to it.

John: brings up terry semel conversation, how he said judge google as a portal and being #4.

Sergey: makes google the underdog. humourous aside about how google cafe ranks against other silicon valley cafes. audience laughs.

John: Microsoft said "we're the underdog now".

Sergey: would be exited to be viewed as #1 in technology. in tech development, we are a leader. from technical pov, likes to think they're #1.

John: stock price and expectation of being a public company

Sergey: in terms of search market share, delighted. primarily come to google - and stay - due to search experience.

John: interface - clean blank page - will it continue as a portal

Sergey: hopes it continues to be clean. re gmail, great user experience has helped other email systems (others have increased storage etc). there are areas that have been overlooked in industry, much as search was overlooked in the 90's. thinks they have technology, distribution infrastructure to address those things.

John: competition with microsoft. now has feed reader, platform of innovation. how do you make decisions about what to do next and make decisions about what to add to the google suite.

Sergey: Historically people who have feed reader companies may expect a lot of M&A activities. they care about "enabling other businesses". re adsense: the idea that other companies need to make lots of money. extended technology to serve many web pages. They were worried about content being lost on the Web, one of the big motivations of adsense was to create and maintain online businesses.

John: semel, diller, miller all made user-generated and professional content as important part of what they will do on web. your view?

Sergey: we fundamentally believe in sending users to other sites (for content). so our philosphy is quite different. we want to send people to best sites (uses eg yahoo finance). we're not about creating all of our own content, we send them off to other sites.

Questions:

Q1: google office

Sergey: i don't really think that trying to take previous technologies in our generation and port them directly [...] always makes sense. the web and 2.0 technologies give opportunity to do new and better things - some of what is done in past [on pc] and more. if there's some combination of office type functionality, then would consider it. [nb: not verbatim - esp that last sentence]

Q2: click fraud

Sergey: something we have to work on, spend a lot of work on detecting etc. long list of protections for click fraud. a lot of our advertisers - in fact most - care about getting conversions and making sales. they know exact roi they're getting. also ad fraud is quite complex.

Q3: what areas are you focusing on? safe to invest in?

Sergey: in general, have several kinds of projects. ones that are core and be strategic about. surprises - most successes. from engineers. some of most successful products haven't been directed from top-level mgmt.

I feel like a lot of portals have just taken everything they see. so want to do different.

Q4: google's vision for communications and user-gen content

Sergey: we have focused where people spend a lot of time - eg email. google made it more efficient etc. put up lot of things on labs because it's really hard to predict. eg wikipedia many years ago - not many people would've believed it would work. need to experiment.

Q5: personal level, where will video search is going?

Sergey: people underestimate quality of info present in video. key not so much format, but so much effort went into preparation. some of best quality content we have is in video form - make it searchable.

Long tail of searches - 95%. eg head queries: hurricane rita, maps, song lyrics.

Long tail of verticals (or categories). Also long tail of revenue - "most of revenue still made in the head". 30% of searches drive 70% of search revenue. "still very very early" in the marketplace.

Head query: 1.57 keywords, tail is 5.01 keywords. More compeition (obviously) for head keywords.

25% of clicks on Ask index went to only 330k URLs. 50% clicks went to very small head (search results).

Only 1% of users use advanced search. Instead users iterate.

UI. 2% use the tabs. header 15% CTR. 35% CTR for image bar. 45% CTR for main search area. 15% CTR on right-hand vertical bar (where Google puts their ads, but Ask puts content). Jim says it's a 1-2% CTR for Google ads on right, by comparison.

Jim will put all this data on their site later today.

APIs are open, can write mash-ups. Has the ajax magic going on. Fully indexed backend and search, a la Gmail. Including filter by calendar, attachment type, etc.

Group scheduling, calendaring - drag and drop etc.

"web services enabled platform" - can write different clients. e.g. mobile client. open source project.

Sounds great, I've gotta check this out.

Thinks there's need for 3D on the Web. e.g. 3D online entertainment, e-commerce, product stuff, mobile.

Very heavy data - gigabytes. Current approach to 3D client-based, requires plug-ins, lossy, etc.

Server-based 3D --> RealityServer is their product. Let all computation happen on the server --> broadband will allow this in HD (high def). Mobile devices big driver.

Only need html browser on client side, because everything happens on the server. Need a lot of bandwidth to send commands down to the browser. very light clients possible, multiple users can collaborate, open and scalable, secure, standards compatible. Data complexity is terabytes.

e.g. satellite images - working with data set; architectural simulations; consumer designing car.

This is all browser-based, only constraint is bandwidth.

Joe: talking about Jotspot, "DIY publishing" - wikis next step after blogs for web publishing. Jotspot heading towards "DIY apps".

Joe talking about Jotspot mistakes this year - not focusing on revenue. "Jotspot was in beta for way too long" --> not measuring the right things; refers to Google being in betas for so long --> people want feeling of reward which betas don't provide. Joe now wants to skip beta phase in his products.

John: both of you have grown quickly, have you gotten to point where you lose community etc of the culture?

Kim: not yet grown that big.

Joe: everyone can still see each other. want little bit of "standing room only" so has energy etc. Inspired by Google's hiring philosophy. Jotspot's hiring philosophy is "no false positives" --> everyone you get in the company will be "great".

John: what about contracters?

Kim: development team is distributed --> set up offshore operations in India.

John: venture capital. what's the profile re financing?

Joe: myth of entrepreneurship - some people need VC backing, some don't. clear matter of economics, supply and demand. lot of companies are "features wrapped up in company's clothing" - those ones shouldn't take VC capital. need to get to $30-40million to get a decent return, which is rare. The VC is not the prize, wrong thing to focus on.

John: arc of kleiner-backed start-up (potential for billion dollar company etc)

Kim: not trying to do that. "let's get this right", scaling correctly etc.

John: excite going public - did you enjoy that (as goal of company)?

Joe: "private piece of the market feels very frothy right now"... "bootstrap froth" - can be a good thing, but if inject lots of money and pump up the valuations, it can be a problem ("venture froth")

John: death by bootstrap "fratricide"

Joe: it's so cheap to start a company these days. jotspot took $100k to go to market, much cheaper than excite. cheap infrastructure, offshore development. Tons of angel or bootstrap companies - "you'll see a ton more entrepreneurship". Will cause its own set of problems, but it's fantastic.

John: is it different this time personally?

Kim: more calm experience, people have families so not burning midnight oil, don't have to kill yourself to build a company - still long hours, but exciting.

Joe: is equally "paranoid, neurotic"; the desire, drive, nervousness - he's "wired that way". Wants to make it successful. Joe thinks he's "no more calm than I was in Excite."

"Google Reader is a browser-based application that works with virtually all popular browsers on Windows, Mac and Linux platforms.

More later...

Jonathan: "we're the largest swing voter".

John: "exactly, you hold a lot of power."

But Jonathan doesn't say any more about this. So John turns to question of weblogsinc deal. He says weblogs are in the middle of user-generated and professional content. They have a whole spectrum of content and "we need to be a place where all of that coexists."

John asks what will we see from AOL in a year or two.

Jonathan: weblogs business "we will greatly expand." more content partnerships, hollywood plays, user-generated content, video content on the web.

John: AOL has a lot of video, tell me about AOL and video.

Jonathan: two main players: Yahoo and AOL. "we're sitting side by side" but AOL does more than anyone else - and will continue to.

John: how is "the open thing" going?

Jonathan: was one of the hardest parts of the job, to change that [old proprietary] mentality. Get in synch with the market - which propietary walled gardens are not. "We're past that point."

John: but you're not abandoning the isp business?

Jonathan: not at all, they're different. [...] talks about subscribers and the Web. Do you want to be limited by subscribers, or embrace the world wide web on worldwide basis.

Talks about really big brands on the Web - he would make the argument that only one has been made in last 10 years: Google. AOL is one too, but "the worst thing you can do is limit it to dial-up" etc. Most important thing to be is to be expansive as possible.

John: what about China? (America Online)

Jonathan: We're today officially changing the name of the company from America Online to AOL. We believe it's a brand that will go worldwide.

Think worldwide. Looking into China and a couple of other countries - "active exploration" - for Web business.

Word associations from Jonathan:

Google = money
Yahoo = smart
ebay = platform
barry diller = hardest to soundbite. "Barry pays attention."
newscorp = directed (when rupert decides to do something, he goes and does it)

[stuff about Time Warner and investment]

Questions:

On why they didn't buy Jeeves and let Diller get it: "I couldn't make the math work." And he doesn't want to fight a battle on search. However video and "certain verticals" they will.

Qst on weblogsinc: person thinks they bought it for content instead of conversations. what will happen when blogosphere doubles in size and weblogsinc doesn't look so valuable? Answer was they will figure it out (or something like that).

Summary: I thought Jonathan Miller came across as a very smart and on-the-ball CEO. Sounds like AOL is back in business in Web 2.0, although I'm skeptical of the weblogsinc value to AOL. Why? Because I had high hopes AOL would roll out a more 'loosely-formed' network, in which unique user brands could bloom. I think Yahoo will definitely do that, which is why I like Y! more when it comes to user-generated content.

Tim: what do you actually own?

Jeff from Amazon: we own customer db and namespace of products (Tim's summary).

Toni from Yahoo!: different answer for each product; but Y! owns "user's trust".

Tim asks Toni whether Y! lets people export data?

Toni: community of people connected via the data, so value of the data is in that. [RM: as far as I know, a user still can't export their data from Yahoo My Web 2.0. With del.icio.us, users can export as XML - which is the more open thing to do]

Tim asks about metadata.

Toni: several ways Y! can add value to data - layer services on top, mix data, etc.

Amazon guy gives same answer as Y! - value of data is the community and so taking it away/exporting [from Amazon] will devalue it.

Danny (a VC on board of Skype): can easily interoperate with other services (no real details though)

video guy (sorry don't have his name currently): other services can innovate on top of them

Tim: intelligence of masses vs centralized control

Toni: believes in open model, but when you open things up "don't just throw it out there". Talk with developers, where does it make sense to open up, learn from them.

Tim: where to draw the line about where the services are located? eg putting data on Y!, or syndicating it out / inbound-outbound.

Toni: openness goes both ways. some developers don't want to host it, so Y! has to keep options open.

Danny: innovation not just happening in Silicon Valley. Don't need to be here to experience the "ecosystem effect". So their bet: not just focusing on this geography. Companies they're backing have services offered to free to users.

Tim: services with no idea about business model / exit is to be acquired. what's the rationale?

Toni: Big part of Y!'s strategy - easier to bring platforms in. Last year the ideas emerged, this year products are emerging, next year businesses will have to emerge [RM: great observation]. e.g. he thinks Amazon affiliate programs built on Amazon WS are "not that interesting".

Danny: a few blessed brands will try to scoop up as much talent as they can. Acquisitions are a cheap way to lock in some innovative developers, rather than face potential competitors down the road. [RM: good point, which I've heard from others too. I suppose the measure of this is how many of these acquisitions get developed and backed further once they're in the bigco]

Tim asks Danny: why eBay (as buyer of Skype)

Danny: Skype creators want to continue to be revolutionary; so ebay locking in that innovation.

Tim: do ebay want to be bigger platform player?

Danny: yes he thinks so.

qst: thinks there are a lot of opportunities in affiliate businesses - e.g. Amazon and eBay.

Toni: yes, but those programs primarily designed to support developer platform. For true innovation to happen, need to open things up and create new things on the platform.

And that's the end of the discussion.

"Korea is goto place to figure out where the Internet is going"

Innovation coming out of China - 5,6,7 yrs time

we're at "boom-let" stage now (after boom and bust)

market valuations of top 5 companies huge (google, yahoo, ebay, yahoo japan, amazon), compared to 2000.

entering 2 most profound cycles ever: PC Internet (broadband) --> Mobile Internet

3G won't hit big until 2009

3.6-1 mobile phone to internet user ratio in Japan (0.8-1 in US). The point is "we're [US] not leading in this space"]

87% Skype usage is outside North America

70% revenue from mobile comes from sms and mms. Content will be revenue earner on bb Internet. So when mobile and bb collide, it will be interesting to see how it plays out.

LOTS of data in this talk!

"essence of this presentation is how important communications is" and convergence of bb and mobile etc.

Mobile-PC becoming new client-server model?

SFO (search / find / obtain) as future role of Google/Yahoo?

Power of Google/Yahoo ecosystems --> "importance of these two players in the marketplace" [advertising]

Internet ad spend will increase (currently last among other media) as internet usage increases

low-priced content, make it easy to SFO, can make it up on volume. "wish that more media companies with great content would figure that out - and make our Internet experience better."

first 10 years of Web (95-05) just the warm-up act for what will happen!

Update: here's Mary's presentation.

- Yahoo! is both a media and tech company and Semel said *both* are required for a 21st C media company.

- "Yahoo is all about content" --> user-generated, professional, and the future of what content may be (which Yahoo will try to take a leadership position in designing).

- on competing with Diller. They will compete in some verticals, but Yahoo will have a much broader selection.

- Y! is "creating a whole new experience" in media and Semel will judge Lloyd Braun on results in 12-18mths (i.e. not rushing to judgement)

- Lot of interesting talk on Y! competing with Google. Semel says Google has done great with search, but they don't have the pillars of Y! --> content, personalization, communications, shopping, etc.

- even though Google is "starting to look like more of a portal" (referencing all the things Google is doing currently), Semel rates Google as the #4 portal.

- mentions Google has lots of beta products and "so far don't seem to have a real plan"

- Y! monetizing better than Google, says Semel --> communications products and content are the 2 main forms of monetization

- "we'll always be more open than they [Google] are" --> Y! has/will have open platform; incl ability for people to publish on the Web

- big change on the Internet; deeper engagement, more time spent, more user satisfaction

- personalization, community, content on platforms, search --> Y! has "much richer experience" [than Goog search]

qst from audience (Dare from MSN): what's Y!'s biggest strength and competitors biggest weakness: Semel said Y! has much more diversified model, well-positioned for user-generated content, community, etc. Other companies [he meant Goog!] weakness is not positioning for that.

Next qst re user-generated content. Semel said that user-generated content is "of utmost importance" to Y! - "gigantic piece of what we do". He says "content in general is going to be more and more important"

- new media requires new paradigms, going forward. And Y! won't have to choose between user-generated and professional content - market/users will decide and Y!'s goal is to monetize as much as possible.

On a personal level, I met lots of people I've communicated with or worked with for a long time - e.g. Marc Canter, Josh Porter, Dick Costolo. It's been fantastic. And of course I've been to a bunch of workshops, two of which I've yet to write up (Open Source Infrastructure and Mash-up business models). The formal intro show is very professional and engaging. More later...

John: Google is leader in the space and isn't losing share. What comes to mind when you think of Google?

Barry: they were first ones to clean the page up - it was a kind of genius. [this is not verbatim btw]. Basically says they're a great product.

John asks a question about being an "Internet Mogal". Barry talks about being "distribution agnostic". Things will come through the search box / convergence will create a potential total change-up of the players.

John asks about user-generated content and Barry's position on that. Barry says "there's not that much talent in the world". Talks about "editorship", people who have talent and expertise in entertainment space not going to be displaced by 18 million people making home videos (!!). John segues to Rupert Murdoch - "he's bought these things very cheap or they're worthless". Says Murdoch takes risk and is a risk-taker.

John asks his reaction on eBay buying Skype. Not the kind of deal he would make for his company. He says eBay's buy is speculative, but won't elaborate.

John asks about "net neutrality". Barry says it's about doing anything you want (re services), but can't get in the way of anyone else doing services.

qst: is future of IAC increasing distribution or increasing breadth?

Barry: we have lots of brands, could screw it up. Innovate. Only constrained by their own ideas.

qst: re dismissing microcontent, user-generated content. Speaking as a Media Mogal, not Internet Mogal?

Barry: we're talking about mass audiences, a system of entertainment. Entertainment, making tv or movie or game - going to be relatively few people doing that, due to not enough talent.

qst: how can minor internet players transform in new media world?

Barry: if you have a good idea on the internet, you have "so much more runway", more opportunities. Good ideas resonate. Nothing really stands in the way - unlike other forms of media, which have gatekeepers etc.