Forward Looking Statements

meebo rooms

2007-05-14T22:10:46-07:00

we launched meebo rooms tonight.

the result of about 4 months work, many meals of takeout, lots of afternoon 4 square, and I have to think about 5,000 testing cycles.

Sandy had a great blog post on it here.

Danny and I worked for the last month solid putting the partners together, and I think the final tally was 14 for launch, including CNET, Capital Records, NBC and a bunch of other great content partners.

Below is a room on fast cars - my previous hobby before I became a father and started commuting to mountain view (100 miles/day). I used to have a 1971 porsche 911T, then a 1975 aston martin V8, and second to last, a 1994 porsche RS America. Now, I drive a 2007 prius...and I love it.

Feel free to contribute.

watch the yen

2007-02-27T22:26:22-08:00

We all saw the china sell-off ripple through the world today, shaving 3.5% of the S&P500.

As everyone knows, there's been a lot of money sloshing around. Many know that a lot of that liquidity was provided by the carry trade, with funds borrowing in yen to make purchases elsewhere, including in the US. Those activities pushed the yen even lower, and roughly speaking, made it seemingly more attractive for the next fund to borrow in yen, to buy in dollars.

The Economist is looking very smart today, having run this article on Feb 8, 2007, with the title:

"Japan's currency, Carry on living dangerously. Speculators and low interest rates have helped cheapen the yen, putting the world economy at risk."

The Economist thinks the yen may be undervalued by 40% and notes in the article that according to "record net “short” positions in yen futures on the Chicago Mercantile Exchange...estimates of the total size of the carry trade range as high as $1 trillion." that's a lot of money that's relying on an un-appreciating yen.

I think there were two very important news items today.

1) No one has identified the reason behind the sell off, which simply says that we don't know what might be next and how people might react. The unknown unknowns just increased, and the risk premium just went up.

2) But the most important news item isn't the 3.5% drop in the S&P 500. It's the the fact that we saw yen based trades were being unwound - people were buying Yen to cover the carry trade. As far as I can tell, the yen appreciated less than 2.5% on tuesday, and opened weaker Wed Feb 28th - looks like we dodged a bullet today because the Japanese government reports showed a drop in industrial production and retail sales - if those reports had been different..

What happens over the next week will be very telling. If some good news about Japan's economy comes out, you could see the yen appreciate. And if bad news happens in the US, then certain funds might have to unwind their yen borrowings, which would also drive up the yen. And either of these could drive the yen to rise significantly, like a stock when the shorts need to cover. In 1998, the yen appreciated 13% in a very short period of time, the carry trade was hurt, and it wasn't pretty. A repeat could dry up a ton of liquidity, and that could lessen demand for shares around the world. And a few funds that were reliant on the carry trade could blow up, triggering more supply. That would be bad for equity prices everywhere.

Watch the yen, to find out what's going to happen to the US stock market.

UI words to live by

2007-01-16T13:43:53-08:00

UI words of wisdom here

Google: cheap at a 27x forward PE?

2006-12-30T15:55:28-08:00

Rick Munarriz at The Motley Fool has this to say about Google's valuation.

It's one of the most intelligently thought through articles on Google's valuation I've read.

Nice one - thanks go to Rick for making the discussion about purchasing expected future cashflow - many articles these days are arguments about the company, not the investment.

Decades of Growth?

2006-12-25T18:54:43-08:00

Thought this was a good article worth reading - which suggests that a slow down of the US economy is not imminent.

The global economy, it asserts, is on the threshold of a decades-long deflationary boom that will lift America and much of the world to unprecedented prosperity. Its optimism stems from a theory that profound economic changes have and are taking place that have been ignored by most commentators -- specifically a business model it calls the "platform company."

Read more about the platform companies at Seeking Alpha and citing such "platform companies" such as Apple, Motorola, HP, Dell, and Danaher, among others.

My view is that the author is bang on the money for platform companies but that he extrapolates into hyperbole on two points: 1) specific companies vs. the economy and 2) the time horizon.

1) I don't see a compelling argument that platform companies constitute a large enough portion of GDP to create a systematic decades long deflationary boom. GM?, McDonalds? there are many, many non platform companies in the S&P 500 and the broader market indexes.

2) Decades? Maybe if you're a stock picker (I'm not) - then perhaps you can get quarters (maybe years) of good alpha from factoring in platform companies, but decades?
puhlease. these platform companies are predominantly growth companies and therefore trading at high multiples - NOT the 17x PE of the S&P500. Example, Apple, a platform company, trades at a 36x PE - the implied growth and cash flow implied cannot reasonable be expected for decades. There is such a thing as competition, business cycles and reversion to the mean.

That said, there are some very good points raised in the article. I think we've got another good year in 2007 and then absolute returns are going to get harder to come by. Maybe, just maybe, I'll rethink my bias toward index funds (or not).

RIP page views?

2006-12-20T13:56:16-08:00

Are page views and unique user metrics passe? - a question recently posed by CNET News.com

Page views, along with unique-visitor counts, are currently the main way to measure Web site traffic. But new technologies like AJAX allow users to get more information from a Web page without reloading, which can throw off traffic data. Now, some industry figures are calling for new metrics.

I think there's an even more important issue: when did page views/impressions and monthly unique users become relevant? who decided that? because it's not very closely matched to marketer needs compared with the measurement your average radio station can deliver.

My view is that before the interactive industry collectively votes on the next new wave of measurement, we should seek to understand the objectives of marketers and then meet and beat the measurement capability of offline media - the places where marketers currently spend 10x what they spend online.

I was chatting with David Smith of Mediasmith last week about this very topic - he's been working with clients since 1989 on cross media planning, from TV through to search, so he's about as good a person to opine on this topic as anyone. If you're a start up with an ad supported web site, you should read his material or listen to him or hire his firm. The money he represents is more important long term than the VC money you covet :)

Before online publishers collectively decide on some alternative metric like "sessions" or "duration" to pitch clients, it might do us some good to get to the root of what our customers are looking for:

By and large, brand marketers are looking for reach, frequency and engagement: (this is clearly different than a direct marketer who's looking to drive immediate sales).

reach measures the number of individual people (not cookies, not sessions) (more is better given a target group of influencers or a desired demographic segment)

frequency is the number of times a viewer sees the advertisers' messages (Dave reminded me of a major disconnect here - more below)

engagement is the action taken as a result of the message that moves a viewer from awareness to consideration or from consideration to preference or from preference to sale.

There are tens of billions of dollars currently spent by marketers seeking to influence brand preferences and sales - those dollars are spent in broadcast, newspapers, radio, outdoor and magazines.

Most, if not all of the money spent outside of the web is given reach and frequency measurements while most web sites cannot and instead offer up impressions.

Marketers are wanting us to deliver solutions that:

a) take advantage of the interactivity, integration and innovation that the web has to offer,

b) they are able to buy in scale (as much as we all love the long tail and influential bloggers, few marketers want to spend $50 million in units of $20k - it doesn't work well)

c) come with measurements that are comparable with the rest of their budgeting (reach and frequency).

Dave's reminder is that on web sites, most ad systems are set up to "rotate" advertisers, which means that unless an advertiser buys all of the impressions, they aren't getting the reach of the site, they are getting the reach and frequency of their campaign.

So it stands to reason that figuring out a dependable, 3rd party system for measuring campaign level reach and frequency should be a major priority.

Then our next challenge would need to be how we measure engagment.

If our industry can deliver something simple and better than other media, and we can be more effective and innovative and deliver optimization etc, without the confusion and complexity and ineffiency that clouds online spending today - then we deserve the next $20 billion.

However, if we simply vote on other metrics that don't match marketers' needs, then we don't deserve a dime.

I'm going to try to figure out who's doing what More posts as I learn more. Comments are welcome.

Marin is not Colorado

2006-12-16T21:18:37-08:00

It rained heavily this week. However, no one around here needed a winch.

2006-12-09 rollins pass.wmv

James Kim found deceased

2006-12-06T14:19:08-08:00

We've been hoping against hope that this wouldn't happen, my heart is so heavy. James Kim was found deceased.

Those kids are so lucky to have parents like Kati and James - they did everything they could to ensure their children are safe. And finally, James gave his life trying to make sure his family would be found. As I father, I hope he knows they are safe, and therefore he knows he did his job as well as any of us could hope to do in his situation.

Our thoughts and prayers are with Kati, Penelope Sabine and the entire family. Our entire company is grieving today.

UPDATE: I've overheard many questions in the news this afternoon about the decisions James took to go search last Saturday instead of staying with Kati, the kids and the car, and also his decision to leave the road.

I am simply speculating here, but here's a theory that makes sense to me, and those decisions strike me as incredibly heroic and amazingly thoughtful for two people who're out in the wilderness fighting for the lives of their kids.

If you think about this in terms of ensuring Penelope and Sabine come out ok, something quite amazing comes out : in both cases James and Kati did the things that would increase the probability of the kids being found, even though in each case, the choice lowered James' own chance of survival and would have been heartbreaking to make.

After 7 days of staying with the car and being together, the fact that James leaves to search for help increases the chances of *either* him or kati and kids being found. And if he's found or gets help, he can direct help back to the kids. If the kids are found, then that's the outcome they are hoping for. So his leaving increases the probability of the kids coming out ok. The decision to the leave the road is the same - if James continues along the same road it wouldn't necessarily increase the chance that *either* he or Kati and the kids are found, because someone finding James would likely also then find the car. So he left the road, hoping to increase the total odds in his kids favor.

James and Kati made the heartbreaking decisions to help increase the odds for their kids survival, and they did this after keeping it together for a week in the freezing cold. They are both heroes.

If you'd like to donate, please go here. http://www.jamesandkati.com/

Mobile Revolution needed ASAP

2006-12-06T11:58:08-08:00

These good gentlemen are happily chatting away on their cells in Nepal.

by daske

Nice. I'm happy for them.

Everyone else on the planet is able to watch full length feature films, check the latest news, pay for their groceries, text with their children and play world of warcraft on their phone.

Here in the nest of global innovation: California USA, I lose cell reception on my drive home in Marin County, California - *EVERY SINGLE* time.

Sprint's generated something like three quarters of a billion dollars in EBITDA last quarter. You'd think they could find a few bucks to put a cell tower in a major commute area like 101 North out of San Francisco around Sausalito? After all, there are only 38 million crossings per year.

wild kingdom on your computer

2006-11-17T19:03:40-08:00

we just launched video sharing on webshots.

MVI_2151

our development approach was to integrate videos into the experience and workflow for people sharing their photos. most of our members are using webshots to tell stories and they can now do that in text, image and video.

we are *not* attempting to build a competitor to youtube.

we have launched a service that's really helpful for the following activity:

you return home from an event (birthday party, hike, mountain bike ride, car show, trip, bird watching, or just messing about with your friends)
you download the images and videos to your pc/mac to edit/organize/tag them.
you want to share them with your friends, family or other bird watchers.
you get stuck, 'cause you can't put videos and photos in an album to tell the story, mark it private and send to 10 friends, or make it public and post on your blog or in webshots so other orchid lovers can see what you just saw.

This video was part of of an album uploaded yesterday containing 280 images and 7 videos from a trip to africa by member hvdbrink55. thanks for sharing.

by Hvdbrink55