John Donahoe made the very reasonable point that online e-commerce will look like offline commerce: fragmented. Consumers will buy from eBay, Amazon, Walmart.com, Zappos, whatever gets their attention and has the right product at the right price. That rings of common sense.

To illustrate this fragmentation, he told us that the mighty Walmart has only 4% of the market.

For a more extensive discussion of the problems facing eBay's core service, read this very well-reasoned (but long) post on SeekingAlpha.

When queried on these issues, Donahoe simply indicated that the problems did not originate on his watch, that he was aware of them, and that they were complex to solve. That does not seem enough. The bits of insight above may be great, but eBay needs to fix its core service to regain its stature as a leader and give investors a good return. You don't transform a company without fixing the core, and investors clearly feel that eBay needs transforming; that is the message behind a stock price that in the last 12 months trails the NASDAQ and peers like Google and Amazon. eBay is actually in the rather miserable club with Yahoo, as perceived by investors.

PayPal: Jewel in the Crown?

Donahoe contrasted the fragmented e-commerce business with the highly consolidated payments business. Clearly, the latter has greater appeal. One can see why. The payments business is global and dominated by a few players: Visa, MasterCard, and Amex. As the low-cost player best suited to the web, PayPal has enormous potential.

I'm pretty sure I even heard Donahoe say, "PayPal should be bigger than eBay." As he spoke about the global payments system, one could see why.

He described the national banking regulatory challenges, a major barrier to entry. Taking money online is the easy bit, he said. Moving that money in and out of the traditional banking system is hard, because the banking system has to adhere to a maze of local regulations. Donahoe told us that eBay works on penetrating something like 5 to 15 new countries each year. Some, like Japan, remain a challenge.

This is clearly a huge opportunity, but these local regulations are a big barrier to entry. Anyone who has done a lot of international business can attest to how archaic some of the processes are. Wiring money is bad enough, but the processes around letters of credit seem positively arcane, almost 19th-century.

Oh, and a $500 million High-Growth Skype Business

Skype is the eBay business I am most familiar with as a user. We use it all the time here at ReadWriteWeb. It is a core tool for running a small business in which colleagues, clients, audience, partners, and everybody else in the community are all over the world. For entirely selfish reasons, I evangelize Skype to everybody. Now, I want Skype on my cell phone to cut my mobile bills; it is definitely ready for prime-time.

And yes, Skype is a real business. Donahoe told us that Skype generated $500 million in revenue last year, with "high-teen margins" and growth rates of 30% to 40%. Saying "That's not a bad business" got a wry laugh from the audience (all of whom would consider it a totally amazing business). In any other market, that would be a red-hot IPO.

Skype is perfectly positioned for a long recession, too. That already shows in the numbers. In the last quarter, Donahoe told us that Skype-to-Skype grew 73% and Skype Out grew 63%. I can personally attest to seeing many smart people, who had not used Skype previously, see it and say, "OMG, it's amazing."

$500 million was only 6% of eBay's total $8.5 billion revenue in 2008. But with Skype growing at 30% to 40% and eBay's core service hurt by a slow-down in consumer spending, this percentage could change significantly in 2009.

How much could eBay get for Skype, a business that already has scale, good revenue growth, decent margins, and a model and technology that are disrupting the massive telecom market globally? It is not entirely outrageous to think that Skype could become the biggest telecom company in the world at some not-too-distant point in the future. At some point, the IPO market will come back. All of eBay (including PayPal and Skype) is currently valued by the market at $15 billion. How much would the market value of Skype as an independent entity be? More than 6% of $15 billion? I think so.

eBay spinning off Skype was one of the three web-tech market events that I wished for (not predicted) for 2009. It looks possible. Methinks it is simply a matter of timing and market conditions.

The VC Portfolio

As well as being a collection of great but unrelated businesses, a kind of online conglomerate, eBay also looks like a VC with a strange but interesting mix of minority stakes. The most interesting and oft-discussed is its 28% stake in Craigslist. It is clearly not a happy relationship. But that 28% must be worth something.

The Economic Question

The underlying question for everybody at the Accel Symposium was, "What about the effect of the economy on your business?" Donahoe pointed out that they saw the downturn in their PayPal and eBay lines as early as May. Signals from millions of small buyers and sellers are far more reliable than any GDP numbers. So they were able to take corrective action early.

eBay's biggest action was to offer coupons to buyers, to help sellers. As he pointed out, small sellers have weak balance sheets, so a downturn can make them vanish quickly. eBay moved quickly to support its sellers.

Asked if eBay was recession-proof, Donahoe pointed to Skype as being perfectly positioned, but he noted that if consumer spending slows, then even e-commerce is affected. And e-commerce is down.

Time to Fix E-Commerce While it's Down

eBay needs to have a compelling core proposition for e-commerce that unites auction, fixed price, and classified ads. Donahoe pointed out that search is the obvious unifier. But it is not clear how eBay can use this to its advantage.

E-commerce still makes up only 7% of retail. Given the amount of time we spend online and the obvious opportunities, this could grow to 15% to 20%. A big prize awaits here when the economy turns around. eBay has the financial strength to build through the downturn.

Donahoe also painted a vision of mobile e-commerce. It is one that others have painted before: you go into a real-world retail store; see an item you like; scan the barcode to get the price; find a better price online; then decide whether to buy it in the store or online, depending on whether you prefer convenience or lower price.

As he pointed out, this could encounter a bit of resistance. I can envision videos popping up on YouTube of irate shopkeepers throwing out barcode-swiping bargain hunters! Physical retailers will have to adapt, but online folks such as eBay will have to be sensitive to their needs. This will be interesting to watch.

While systems and software used to be very "behind the scenes" and often transaction-based, that is the case no longer. Consumers and businesses alike buy differently, consume differently, and recommend differently. Trends such as social networking, video on demand, and e-commerce will continue to force businesses to adapt to keep up with their customers. They cannot rely on systems that take years to implement, and most don't have the budgets to make large investments, at least they won't for the next couple of years.

The growing focus on SaaS, cloud computing, application platforms, etc. are all responses to this growing trend in the market. There will be other solutions in the future for mobile, etc. that we haven't even imagined. They all drive businesses to use systems that they can deploy, change, and retire quickly. In my main job, I remember meeting a venture capitalist who talked about how his firm looks for opportunities in which it sees lots of "wiggling." He couldn't describe what that really meant, or how one gets paid for wiggling. I thought he was a lunatic.

In retrospect, he does make a good point. Things happen quickly on the Internet and in this changing global economy. When a business sees wiggling (or opportunities), either positive or negative, they need agile systems to respond. One-size-fits-all software and packaging are going the way of the VCR. I think this will continue to grow in importance and focus as enterprises evaluate new systems and invest in new technology. What do you think?

According to a study done by the Sand Hill Group and Neochange, the most critical factor (70% listed it as number 1) for software success and return-on-investment is effective user adoption.

You can have the best software in the world, with the most sophisticated features, analytics and integration, blah blah blah - but if people don't use it, it isn't going to add value. I can't tell you how many RFPs and software selection processes I've been involved with in prior lives that focus almost exclusively on tiny little features that few people will ever use. This study shows that focusing so much on features is missing the boat entirely.

This finding is very interesting for all kinds of applications, particularly enterprise apps but also consumer apps. Features very rarely make someone take to an application or not. Moreover, I doubt most software companies really take user adoption as a holistic approach into account when designing their applications.

If this trend is accurate (and my experience tells me it is), then I think it has very interesting ramifications on how software should be designed, sold and implemented. User adoption is typically something that comes at the end of a cycle. This says it should be one of the most important elements of the entire process. Please share any opinions or war stories that either confirm or refute this conclusion.

Jott moved to a paid model following a successful free beta. I spoke with Jott CEO John Pollard to learn how they did it and how it is working out for them.

Jott still has free service, but it's been put together such that if you are a frequent Jott user, you'll be very tempted to upgrade. The upgrade itself is less than $4 so I suspect many people will go for it. Jott has a variety of plans to choose from including free, basic, pro, pay-as-you-go, etc.

The company based these plans largely on user behavior and lots of data. When they started the company, they knew they would ultimately have a free and paid version, but had to learn the rest along the way. For example, they had to find out if their customers were home makers, road warriors, students, professionals, etc.

Some of the factors they experimented with during the beta program included turnaround times, length of recordings, and features. By collecting data around user behavior and usage, they were able to model scenarios and identify trends. They then used focus groups, the Jott user group, and conjoint analysis (a very cool survey technique requiring users to make trade-offs on product features versus price) to come up with the different packages. They were very confident that some professionals wouldn't want an ad-supported service, and the research confirmed it.

As you can imagine, they overcame significant challenges along the way. While many users understand that Jott has to put food on the table, there were users who were shocked that a company dare ask for money. Personal note: this is both a common and ridiculous sentiment that has grown as more "free" things pelt us, but that is a conversation for another day.

John and company decided to be extremely transparent about the process and spent significant time in their forums, hitting the blogs, and using other marketing mechanisms to tell their story and let users know what was going on. John admitted they could improve on the communication front, but they did a solid job. The communication philosophy was to tell the users what was coming, tell them when it was coming, and explain why - as many times and in as many places as they could.

The company is very pleased with the conversion process so far. They are apparently hitting their goals and on plan. One pleasant surprise according to Jott is the percentage of people selecting annual plans; John said they are getting 10 times the number of annual subscribers that they expected. I'm not surprised as I'm sure a large percentage of Jott users are business customers, and this is the most efficient way to get something expensed; although this is pure speculation on my part.

John has good advice for other companies embarking on this journey. First, talk to your customers as much as possible. Really talk to them and understand the problem you are trying to solve and how they use the product or service. Second, utilize web-based tools like conjoint analysis to gather quantitative information to make decisions. Finally, try to be transparent and don't surprise your customers; they hate that. If you build something that people want and value, you can ask them for money and it is good business.

Borders Site Design

The site design may remind users of Shelfari, a social book sharing service to connect readers with similar interests. On the homepage of Borders, the latest books are displayed on a virtual shelf called "The Magic Shelf". When you first head to the site, users can interact with the shelf to see the latest book releases and more. For registered users, the magic shelf is customizable with the option to view books, DVDs, and music from select genres. The shelf design also extends over to the recommendations page for easy browsing. All in all, the interface is clean and doesn't appear to be cluttered. Borders design UI beats Amazon's by a mile and provides customers with a clean and unique experience instead of clouding the front page with recommendations and news.

Borders Media

Borders also dives into media with Borders Media. Borders Media provides a section for customers to watch live store performances on Borders Live at 01, famous chefs at work in the Borders Kitchen, and living room book discussions with authors on the Borders Book Club. The user interface is consistent with the homepage design, making the site easy to navigate.

Stiff Competition

Borders supplies a host of deals and discounts for those that shop at the retailer's site. We think this will be one of the key strategies against giant competitors such as Amazon and Barnes and Nobles along with their competitive pricings. With their competitors already well established online, it will be interesting to see what else Borders cooks up. Another thing we appreciate is the direction Borders took with their site design. Borders made a very smart move by not competing with Amazon and Barnes and Nobles when it comes to site design, and opted for something users may find refreshing. So far, Borders has made a lot of the right moves in order to compete.

The Atlantic follows other old guard US media properties that have recently set their online content free.

In September, the New York Times removed the pay wall on the majority of its archives, as well as its TimesSelect service, which included non-news content like editorials by Frank Rich and Maureen Dowd. By removing pay walls, magazines and newspaper create more pages on which to sell advertising, and can theoretically increase traffic and improve search rankings (due to the influx of new content that can then be returned in search results). When the Times stopped charging, some bloggers estimated that it would see an uptick in pageviews by as much as 14%.

In Novemember, Rupert Murdoch followed suit and announced that the Wall Street Journal would stop charging for content. The Journal operates one of the most successful online subscription news sites, with subscribers bringing in $50 million per year in revenue, but Murdoch is hoping that by dropping the pay requirements on its content, the site's traffic will balloon and allow the paper to recoup the lost subscription revenue via advertising. Not having a pay wall would allow the paper to reach readers "in every corner of the earth," said Murdoch in November.

The Atlantic has long operated a successful web operation, including some of the most cited political blogs on the web. In fact, three of the magazine's blogs currently appear in the Memeorandum top 20 -- the only mainstream media source to accomplish that feat. Removing the magazine's online pay wall should help to cement its web site as a leader in its market.

Update: Looks like we spoke too soon. At the World Economic Forum in Davos, Switzerland today, News Corp. chairman Rupert Murdoch said that the Wall Street Journal would not be going free online after all. "We are going to greatly expand and improve the free part of the Wall Street Journal online, but there will still be a strong offering" for subscribers, Mr. Murdoch said according to the WSJ. "The really special things will still be a subscription service, and, sorry to tell you, probably more expensive."

That sort of growth and success is phenomenal, and for profit businesses could learn a thing or two from how Kiva conducts its business to achieve such staggering results. Entrepreneur and author Guy Kawasaki summed up six lessons business owners can learn from Kiva in a great post on his blog today.

Below are his six lessons, but I've left out the great additional commentary that he provides on his site, so be sure to check out his original post for that:

1. Create meaningful partnerships.
2. Catalyze and support evangelism.
3. Find a business model.
4. "Bank" on unproven people.
5. Focus on free marketing.
6. Ignore the naysayers.

These are some great lessons that any entrepreneur should pay attention to. And as Kawasaki suggests, why not visit Kiva.org and help fund a loan to someone who really needs it?

"With its easily identifiable name, thousands of people are visiting the site daily without the aid of a search tool, signaling increasing interest in the technology and the value of a domain that drives natural traffic."

Apparently 500 people signed up in the first five hours to wiki.com.

Then earlier this week a PR person from Wikia contacted me, saying there is a rumor that all wikis on wiki.com will be removed this week - and that Wikia intended to "rescue" those wiki.com customers. Wikia you may recall is the company co-founded by Wikipedia founder Jimmy Wales.

Right now Wikia has a wiki page up saying that MindTouch is shutting down by January 25, 2007 (see Message from Mindtouch). Wikia's page currently reads:

"Wiki.com is not affiliated in any way with Wikia.com. Wikia has no control or ownership of the domain wiki.com. This rescued wiki was created following rumors that wiki.com was closing down. At the time, there was no indication whether wiki.com wikis would disappear or not, so Wikia made plans to migrate these sites to Wikia. Since then, MindTouch have said that they have begun migrating the wiki.com wikis to new servers and that the content of these sites will be made available on a new domain in future."

What is confusing me here is that currently wiki.com actually re-directs to Wikia! But how is that possible if Wikia has no control over the domain wiki.com?

Anyway this morning I received an email from MindTouch, stating that MindTouch will officially take over all hosting and support of Wiki.com no later than January 25. However it seems that MindTouch will not get control over the domain, wiki.com. They note: "The Wiki.com domain name will not convey - all customer content will now be available at www.wik.is."

So what is going on here! What is happening to the domain wiki.com, for which such a princely sum was paid, and how does Wikia have control over the wiki.com domain currently? What seems to have happened is that MindTouch and Gotts have gone their separate ways. The domain name wrangling suggests that Gotts may've done a deal with Wikia for it. But it's all very confusing and wiki.com users must be scratching their heads and wondering where they stand.

So why has Talkr decided to put itself up for sale? Founder Chris Brooks explained in a blog post that he hasn't been able to monetize the product, resulting in him not being able to introduce new features. He wrote:

"I began work on Talkr in March of 2005, and after nearly two years of banging on this idea, I have decided to try to find it a permanent corporate home. I strongly believe that Talkr will thrive as methods of monetizing podcasts become simpler and more robust. Bloggers will provide content and distribution and Talkr will provide increasingly sophisticated text to speech, and ad integration."

This is a sign of the times unfortunately, that a lot of web 2.0 startups haven't been able to achieve network effects and/or monetize their services. In Talkr's case, I think the technology itself has great potential - so hopefully it gets a buyer. Also, as Chris points out in the eBay sale page, there is a growing market for audio advertisements in podcasts - in December Google released a product called "Audio Ads", which allows advertisers to place audio advertisements in radio.

MP3 downloads from blogs that use Talkr have shown steady growth:

Sep 2006: 21,576
Oct 2006: 31,098
Nov 2006: 32,087
Dec 2006: 38,783
(Excludes major bots)

Chris also reveals some useful stats about his revenue and expenses:

Talkr's Expenses:

Talk currently uses 3 servers, one, which hosts the web application, the crawler, and stores the actual audio files, a second which hosts the text-to-speech server, and a third which hosts the images displayed on blogs. Those costs run $313 a month.
DNS hosting runs $25 a year
Site monitoring runs $5 a month
Recurring annual Text-to-speech server licenses (will be disclosed to bidders upon request).

Talkr's Revenue:

I have experimented with Google AdSense, Referral partnership with Audible.com (via cj.com) and Text Link Ads. The link ads have been the most successful, generating $42.50 in revenue in December 2006."

So it seems both expenses and revenue are pretty low right now. It sounds like the undisclosed "Recurring annual Text-to-speech server licenses" is the biggest expense.

How many more web 2.0 startups are going to put themselves up for sale or stop development? It seems like a bit of a trend right now...

Top 20 Domain Transactions of 2006

1.  Red.org (8) - $50,000 [note: this is Product Red's domain name]

2.  Football.us (4) - $18,510

3.  Brown.com (5) - $300,000

4.  NewYork.info (2) - $46,392

5.  XS.net (2) - $13,000

6.  Fun.mobi (0) - $100,000

7.  CD.com (0) - $277,750 

8.  Blue.com (1) - $500,000

9.  Stockquotes.mobi (0) - $27,000

10.  Sex.net (0) - $454,500

11.  Wifi.com (2) - $225,000

12.  Cameras.com (1) - $1,500,000

13.  SexEducation.com (1) - $120,000

14.  Prize.com (0) - $70,000

15.  Wrestling.com (1) - $500,000

16.  CD.net (0) - $20,000 

17.  Flowers.mobi (2) - $200,000

18.  20.com (0) - $75,000

19.  Scouts.com (1) - $107,000

20.  Bike.com (0) - $500,000

* First place votes in ( )

While I'm no expert in domain names, it's interesting that 3 .mobi domains are in this list - the mobile Web coming up. Also 9 of the domains are not .com. There are 3 domain names for colors and 3 sex-related domains (some things never change).

Only 1 seven-figure domain in this list though (cameras.com went for $1.5M), so the market isn't as bubble-ish as it was in the dot com era.

To give you an idea of what we're looking for, last year 37Signals was Best Web LittleCo and Memeorandum & Digg.com were Most Promising. The latter category is designed for companies or services that have burst onto the scene this year, but probably won't reach their potential until next year or in the near future. That has certainly been the case with Digg and (the re-named) Techmeme in 2006.

In 2004, R/WW named Ludicorp (the then independent company that created Flickr) as Best Web LittleCo, and Feedburner as Most Promising.

For Best Web LittleCo this year, already someone has suggested Meebo. I'd love to get more suggestions from the community on this - so please leave a comment. Try and think of startups or small companies that have had a particular impact this year - and why.

We've already gotten a great idea of who you think is best Bigco of 2006, via our poll earlier this week. The poll is still open, but as of now the results are overwhelmingly in favor of one company: Google. 55% of you think Google has been the most impressive BigCo this year. Followed by Apple on 15% and Amazon on 14%. Yahoo (last year's winner) and Microsoft have only 7% and 5% respectively! The big question when deciding the R/WW winner is the balance between bigco innovation and the impact it has on a mass market.

So what are your thoughts, especially on Best Web LittleCo for 2006 and most Promising Web Company/Innovator? Also let us know if you'd like us to do a category-by-category breakdown of the year's best Web products.

Paul Graham, as a combination of investor and uber geek, is a unique figure in the web industry. There's an increasing trend of entrepreneur-friendly blogging among investors; Guy Kawasaki, Baris Karadogan and Fred Wilson are perhaps the best examples of this. But Paul Graham has always been seamlessly close to the entrepreneurs, especially young and inexperienced ones. His essays and books have been the best friends of wannabes and his seminars enlighten many students with entrepreneurial flame. Possibly that's why his investment company, Y Combinator, specifically targets young entrepreneurs - albeit their investment size is generally much lower than the standard. In this article, we look closer at Paul Graham and examine the current status of his investments, his investment patterns and discuss some of the effects of his essays.

Paul Graham is an interesting personality. He became well known after his startup Viaweb was sold to Yahoo in 1998, for the neat sum of $50M . Viaweb later became Yahoo Stores. Paul is a Harvard grad who spent some of his youth in Florence, Italy, studying painting. He's a great Lisp hacker who is creating an alternative Lisp dialect, Arc [Wikipedia fact: Lisp is the second-oldest high-level programming language in widespread use today; only Fortran is older].

Y Combinator is the investment company Graham co-founded with hackers like himself - Trevor Blackwell, Jessica Livingston, Robert Morris. Y Combinator makes seasonal investments twice a year and their investment size is initially lower than $30,000. 

Y Combinator Investment Pattern

Their recent investments indicate that Y Combinator invests not in the next Googles or YouTubes, but in the next Flickrs and OddPosts. In other words, they don't invest in ventures with high intellectual property or which require heavy investments. This is also because these kinds of ventures probably don't prefer Y Combinator and demand higher valuations. In general, the barrier to entry in their investment areas are low; Paul seems to believe in good marketing and originality, aka the Aspirin effect. Y Combinator loves to invest in simple ideas.

First and foremost, you need to be in your early twenties to receive Paul's funding. Because according to him, web businesses are risky and require real commitment, so it's best to start them while you have less to lose.

Also if you are not studying at an Ivy League college or Stanford, your chances of getting funded are lower.  If you are a single founder or outside the USA, it's again very difficult. Finally, Y Combinator prefers real geeks who have a history with open source.

And now let's check out some of their previous investments...

Investments

reddit has been the most successful investment of Y Combinator so far. The team consisted of 2 University of Virginia, 1 Harvard and 1 Stanford grads/drop-outs. The personalized news site quickly became popular in the geek community. They licensed their code and finally sold their company to Conde Nast for an undisclosed sum - apparently under $5M. The site was criticized by some because its personalization engine did not appear to work properly. See Read/WriteWeb's article Personalized News: A Market Overview for more details on this.

Kiko is an online calendar and was one of Y Combinator's first investments. It was redesigned several times and ended up being sold on eBay for $260K - which probably covered their expenses.

YouOS was founded by 2 MIT, 1 Cal-Tech, 1 Stanford grads. YouOS aims to create the leading WebOS - and it has received a lot of attention from geeks for this reason. However, like most of the other sites in Graham's portfolio, YouOS lacks stability and is currently an early stage product.

Flagr is a mapping startup and is a very good example of what Paul Graham's investment pattern is. The idea is simple and the site is trying to create a new consumer behaviour - which is to map and write about places you visit. A noteworthy marketing tactic of Flagr was to send free stickers to their fans. The founders dropped out of college to pursue their dreams.

Wufoo is another typical Paul Graham investment with a talented team (Particletree and TreeHouse), focused on a very simple and narrow idea - form building.

Other investments include:

• loopt - a mobile service that was subsequently co-invested in by Sequoia Capital, the leading VC company.
• snipshot - a very nice, but currently too basic, online picture editing site.
• clickfacts - fraud protection.
• thinkature - real time collaboration board.

Although there has been no big decisive success so far in the Y Combinator portfolio, there have been no big losses either. Most sites have good potential and are growing fast. The full list of their investments can be seen here.

Criticism

There are a few general criticisms that have followed Paul Graham and Y Combinator.

Firstly, in his essays Paul Graham calls for young smart people to start their own startups. So in some sense, he's offering quick cash dreams against a long academic career. These dreams may cause young people to drop out of college for a very risky web business.

Another criticism Graham gets is the high equity stake he typically takes in return for a very low investment, like $20K. But the Paul Graham name is more than enough for most startups to be taken more seriously - so besides the money he puts in, he also injects his business and marketing power to these startups.

And the final criticism some people throw at Graham is a perceived lack of quality in many of his Y Combinator ventures - due to inexperienced, very young teams. This could also be a result of Graham's "release early, release often" principle.

Conclusion

Paul Graham's model is now being taken on by many others. For example Charles River Ventures offers a CRV QuickStart Seed Funding Program (essentially a loan of up to $250k, but with equity options). VC companies have started to make small but many investments, instead of just spending millions on a few high risk ventures. The reasoning behind this is the decreasing development costs of new startups. This is arguable though, because from another point of view the costs are increasing - due to technologies getting more complex and the increasing cost of things like video streaming.

All in all, if you are a young entrepreneur, bookmark this: http://paulgraham.com. Paul Graham's company may not satisfy your investment needs, but his theories and wise words can help you a lot.

Ken told me that ChinesePod has exploded in popularity over the past year - it's had approximately 10 million lesson downloads and currently occupies a prominent position in places like Yahoo Podcasts.

Visiting the ChinesePod site is a pleasure, as it is very well designed and a visual treat. And the business model is surprisingly simple - subscriptions to language-learning materials. This complements the free offerings - basically, the Mandarin podcasts - very nicely. For example, if you want to dive into learning Mandarin straight away: select one of the episodes, plus you can participate in the discussions. The first level subscription is called 'Basic' and gets you a PDF transcript of the podcast. If you want get really serious about learning Mandarin, sign up to the premium subscription service and receive learning resources such as Review Materials and Lesson Plans.

I think ChinesePod beautifully illustrates how you can run a small, niche - but successful and moneymaking - business on the Web. ChinesePod offers enough free material to make it worthwhile for the casual visitor, but offers real value too if you're willing to pay a subscription fee for tools and resources that help you learn Mandarin.

The community aspect of ChinesePod also shows what can be done with read/write Web technologies. Check out the Community page - which has a forum, wiki, blogs, photos, rss feeds. All the usual pieces, but what I like about it is that each has a practical purpose. The wiki has extra links and information, the forum is well-used by users, the photos are lovely (of China), and there are a lot of great rss feeds to choose from.

Unfortunately I don't have time to learn Mandarin right now, but if I did ChinesePod would be my first port of call.

A pure TechCrunch goodness has descended on New York on this rainy evening. Ignoring the rain, hundreds of web 2.0 fans, venture capitalists and sponsors rushed to the sought after New York venue called B.E.D.

The venue is famous for serving out-of-this-world food to lavish and spoiled New Yorkers, but this is not why the crowds piled in this evening. The crowds sought to be in B.E.D. with TechCrunch, and this is exactly what they got as the 8th TechCrunch party took place.

The party occupied the entire 6th floor - which featured bar, music and slide shows on the walls. 15 presenting companies got a chance to showcase their products to a lively crowd that made a point to show up despite the rain. I got lucky and had a chance to attend, because AdaptiveBlue was one of the sponsors. The party turned out to be pretty good, I made a round through the presenters and here is what stood out for me.

The alleged Alexa killer Compete.com, one of the sponsors of the party, was showing off their latest traffic tracking tool. Although at present there is little data for some smaller sites, the tool looks promising. First of, the interface is cleaner, simpler and faster than the one offered by Alexa. But what gets me excited is the ability to create and track competitive portfolios, which is going to be opened to the public in about a month.

Multiply.com

Multiply.com, the social networking site that we have covered here before, has re-launched a brand new site. With this re-launch Multiply is focusing on the unique value that they deliver - a user centric site oriented towards aggregating and prioritizing information for the end user. The new site is definitely simpler and easier to use. Multiply's focus on the individual seems right on. We are not aware of any other site that would aggregate and prioritize an individual's information in quite the same way.

Snap.com

The makers of the Snap search engine showcased a new product called SnapPreview anywhere. This is a simple idea of previewing the page via a link that has been done many times before, but there is a nice implementation here that is noteworthy. Snap's claim to fame is the preview. If you search for a term on Snap.com you get results in two frames - one lists the matches, the other one shows a preview of a selected match.

The makers of Snap have taken the idea of a preview one step further. They create the infrastructure for bloggers and companies to embed a small snippet of code into their pages, in exchange for some preview magic. Once the code is installed, all the users of the blog can hover over any link to get a preview of the page. This service is completely free, but here is where it gets clever. The preview also shows the Snap.com search box, which allows the user to perform an instant search. This is a nice touch and should get Snap a lot of traffic, if they manage to sign people up to use their preview technology.

Me.dium

Last, but certainly not least, we want to profile a new social browsing startup called Medium. This company has created a browser add-on that allows users to collaborate and chat about the sites they are browsing. There are a few companies that do this already, but this one seems to implement it in a very nice way that might become viral.

The service is implemented as a browser sidebar. As you browse, you see a visualization (a graph to be precise) of people who are also visiting this site. The people are presented based on their proximity score relative to you. For example, someone who is in your network will get a high score, but also someone who has been visiting similar sites as you have, will get a high promity score as well. So basically, you see the relevant people who are also browsing this page. You can also chat with these people, which is quite handy. The use case that I was given was shopping. As you are looking at a product, you can shout to the crowd for tips. If someone has found a better deal, they have the chance to send you the link. Overall, I felt that if the UI is simplified a bit (like having an option to show relevant people as a list), this has potential - because having the opportunity to exchange ideas and tips with people while browsing specific sites, is valuable.

Wrap up

Whew, so there you have it - four Blue Moon beers later. It was nice to meet some people I knew virtually in person. And I got to shake the hand of the man himself. I guess I can now say, I was in B.E.D. with Mike Arrington. Not that there is anything wrong with that... [Editor's note: did I mention that Alex wrote this ;-)]

IBM has just announced the 10th anniversary of alphaWorks - their showcase website for emerging technology. At the same time they've launched alphaWorks Services, an online initiative which will let the outside world view work done by IBM's R&D labs - by highlighting the company's most cutting-edge work and providing it for free download. alphaWorks Services will also let external people provide regular feedback to IBM's R&D labs, in hopes of creating a more collaborative community environment.

There's a video released on YouTube that explains more. In it IBM VP of Technical Strategy and Innovation Irving Wladawsky-Berger says that alphaWorks will keep IBM young, moving fast and in tune with the marketplace. He said it will let IBM "keep innovating where it counts".

I kept thinking though... isn't this supposed to be a showcase of emerging technology? So where's the show?

Note to IBM: Bring Sexy Back

Examples of alphaWorks success stories in the past 10 years are Autonomic computing, the Eclipse platform and Servlet Express. Others currently in the works include ADIEU, WebRB and Deep Thunder. None of these are 'sexy' consumer web 2.0 apps, which is one reason I'm a bit skeptical of how the alphaWorks Services initiative will play out.

The metaphor used in the press release of alphaWorks being "a window for users to get a sneak peek into our R&D labs" is a fitting one... it conjures up the image of white-coated scientists doing important stuff in the IBM labs. Universities and a lot of developers will certainly find this interesting - but it's not going to capture the imagination of consumers, like Google labs does... or even Microsoft's Windows Live.

Perhaps I'm being unfair. It may not be in IBM's interests to capture the public's imagination like Google or Microsoft, because after all IBM is an enterprise software company and not a consumer one. Nevertheless with the trend of 'the consumerization of the enterprise' happening at lightening pace, plus all the Web Office (aka office 2.0) developments, I think there are opportunities for IBM to reach out more to early adopters in the consumer market.

For a start alphaWorks Services is designed to showcase interactive online services, so how about making it a bit more interesting for the Web users in enterprises - rather than just the developers? Just a suggestion, and maybe a wrongheaded one. But personally I'd like to see IBM sex it up some more!

Slightly adjusted (just the first word) opening lyrics from Justin Timberlake's Sexy Back:

"IBM bringing sexy back;
them other boys don’t know how to act.
I think it’s special, what’s behind your back?
so turn around and I’ll pick up the slack."