The Vision

Cloud Computing Lowering Startup Barriers To Entry

noreply@blogger.com (Jeff) — Fri, 02 May 2008 03:24:00 +0000

Encoding, Storage, Load Balancing and many other web infrastructure services are now all accessible to just about any businesses in bite sizes. Previously startups had to purchase servers, load balances, routers, write some code and hire a hosting company to house and manage all of the hardware and software infrastructure. All of which requires many weeks of time, effort and lots of up front money to get your web company off the ground. Now entrepreneurs can write some code and purchase bandwidth, encoding, storage and many other services in bite sizes at a fraction of the cost and time. Companies like RightScale (Santa Barbara company recently funded by Benchmark) are providing a critical management console for cloud computing services to insure availability and reliability. I predict a bright future in Southern California for cloud computing software companies who are providing the "picks" and "shovels" to media companies.

Ad Tech SF Wrap Up

noreply@blogger.com (Jeff) — Sat, 26 Apr 2008 20:08:00 +0000

Optimization, lift, in-text advertising, social targeting, mashup ads, geo targeting and out of home advertising were key buzz themes. I would estimate that about 1/3 of the exhibiting companies where from Southern California which further validates the growing advertising ecosystem here. Here are some companies that I spent some time with that had very differentiated offerings amongst the rest of the noise at the conference. www.dapper.net, www.lotame.com, www.keibitech.com, www.scenecaster.com , www.triggit.com and www.kontera.com

Great Web Services Need Great Distribution

noreply@blogger.com (Jeff) — Fri, 11 Apr 2008 22:45:00 +0000

I am becoming increasingly frustrated with entrepreneurs who focus too much on product design without careful consideration of how to get distribution. In the current web 2.0 world of interrelated web services it seems the widget is the answer for today's lazy entrepreneur who is trying to get user distribution. Facebook is not likely going to buy your company and you are probably going to have to monetize your service through advertising eventually. 99% of startups need and exit through acquisition so why not stay focused and build product in partnership with an industry or customer who might buy you. Advertising dollars can be spent in lots of creative ways when true marketing value is created!

Uncovering The Opportunities Created By Google Android

noreply@blogger.com (Jeff) — Mon, 31 Mar 2008 21:15:00 +0000

Android is an Open Handset Alliance, a group of currently 30 technology and mobile companies, is developing the first complete, open, and free mobile platform. I will be spending this week in Las Vegas to attend CTIA 2008 Wireless and LeadsCon to learn more about opportunities this platform will create for the industry, especially around mobile advertising. Southern California has a large ecosystem of online advertising management talent that will eventually participate in the growth of this emerging industry. My primary mission is to learn more about developers using Google Android are planning for the future and the related opportunities it creates. I think the largest opportunities in the space for entrepreneurs will emerge around applications that perform "passive search" enabled by GPS. See the Phandroid Blog for a conference preview. Stay tuned for my comments on the Google Android subject.

Top Publishers Adopting Direct vs. Automated Ad Network Sales

noreply@blogger.com (Jeff) — Wed, 26 Mar 2008 17:53:00 +0000

ESPN becomes one of the first major publishers to drop ad networks as a means of selling advertising and not likely the last. Two sides have formed in the online advertising world - those who want to protect traditional, direct selling of premium content brands and the math-loving crowd that favors automation and data. Direct ad sales can attribute to a 2 to 3X premium on revenue and usually benefits the advertiser with tighter ad integration into the content. I think there is a clear opportunity for more publishers to capitalize on this direct ad sales trend and we will likely see this phenomenon move further down the tail into smaller and smaller niche publishers. See the Media Week article with further details on the story.

Google Ad Manager Will Make Publishers More Money

noreply@blogger.com (Jeff) — Mon, 17 Mar 2008 22:09:00 +0000

Google's new Ad Manager technology will soon enable premium ad banners to be sold directly to advertisers by publishers and when the clicks are used up on the premium ads it will revert automatically to use Google Adsense. This is a brilliant move and will further accelerate the gap between premium content and generic publishers who don't provide any unique content value. I have always felt that quality advertisers will find quality content and now there is one single platform to consummate these relationships. Today premium content publishers sell clicks direct at a huge premium using 3rd party billing and click tracking systems. Clicks are usually sold via banners and text ads at a 2x to 4x premium cutting out Google. I think this bad news for most ad networks who will soon need to specialize and/or be selling remnant inventory only. However, this theory assumes that most quality publishers want and know how to sell ads directly. I think hard working publishers and agencies will be rewarded and we will soon see lots of companies like the Rubicon Project and Gorilla Nation. Los Angeles has a vast ecosystem of advertising management talent to draw upon and will naturally be the beneficiary of this industry boom.

Most Investors and Entrepreneurs Don't Understand Online Advertising

noreply@blogger.com (Jeff) — Thu, 28 Feb 2008 18:55:00 +0000

Before you take an investment to start your Web 2.0 company that relies on advertising for revenue make sure you hire and partner with the right investors. Here is some vernacular you or someone on your team should clearly understand: CPM, CPA, CPL, CPC, Intext, Run of Network, Fixed Rate, Affiliates, Contextual, Remnant, Display, Behavioral, Retargeting and Demographic. There are over 300+ advertising networks with very little differentiation in a very complicated online advertising world. It is critical that Web 2.0 entrepreneurs and investors (including most VC's) rely on qualified advertising executives with relevant domain expertise. Southern California has an enormous ecosystem of former executives from Overture, Yahoo, Google, PriceGrabber, LowerMyBills, Oversee.net, Shopzilla, ValueClick, Business.com, Vendare, Vantage Media, Shopping.com, Advertising.com and Nextag. We can help you validate business plans and find these individuals who can help add credibility and value to your team.

Silicon Valley vs. Southern California

noreply@blogger.com (Jeff) — Thu, 21 Feb 2008 18:06:00 +0000

IPO vs. Acquisition, Band of Angels vs. Tech Coast Angels, Facebook vs. MySpace, Stanford vs. CalTech, Polished vs. Scrappy, 3rd time CEO vs. 1st time CEO, 10M Pre vs. 3M Pre-Money Valuation are some of the many common characteristics of Bay Area Companies vs. Southern California Companies. However, Southern California is catching up to its big brother and now accounts for two-thirds of the state's GDP, making it the 15th largest economy in the world? In 2007, the region saw the second highest level of capital investment in the U.S. (beat only by Silicon Valley) with 1.10 billion invested over 66 deals, the first time investments have topped $1 billion in a single quarter since 2000, reports VentureOne.

Contextual vs. Direct Advertising

noreply@blogger.com (Jeff) — Thu, 21 Feb 2008 00:03:00 +0000

Is contextual advertising starting to lose some steam? I have always assumed that most quality content publishers know exactly who their potential advertisers are and should sell ads directly to them for lots of reasons. If AdSense pays publishers on average $.25 cents per click, could you sell it directly to the advertiser for $.75-$1 profitably and provide more value? I would like to find a company that provides the best click management software to the small publisher and helps us get back to the basics of business and building relationships. I am looking for a software as a service company and not an ad network or ad server. Don't ask me how does it scales or makes money either as I want to solve the problem first. I think in the next couple of years we are going to see a lot of successful companies built that attack entrenched businesses that use the KISS philosophy. Keep it simple software or stupid.

Open Ads + Direct Advertising + Transparency = $

noreply@blogger.com (Jeff) — Sat, 16 Feb 2008 20:57:00 +0000

A real opportunity is finally emerging for a disruptive ad solution and not an ad network that focuses on enabling publishers to sell ads direct to advertisers. Google Ad Words has conditioned lazy ad agencies, publishers & advertisers to rely on content network syndication that has zero transparency. I believe good content attracts good advertisers and a simple solution is needed to manage these direct adverting relationships. Below is a overview of the current online advertising world if you are unfamiliar with this complex and often confusing industry.

From: openads, 3 days ago

Quantcast Revolutionizing The Advertising Industry

noreply@blogger.com (Jeff) — Fri, 15 Feb 2008 17:10:00 +0000

Have you ever asked yourself why Nielsen, Comscore, Alexa and Compete only give approximate viewer numbers for a specific TV shows or web site visitors? The answer is pretty simple . . . because its not in the publishers best interest to give the actual numbers because it would cannibalize the advertising that was sold against the inventory. With the technology that is available in 2008 I consider the current advertising tracking methods a scam to the entire industry. Enter Quantcast who is creating a new currency for advertisers to purchase ad inventory against more qualified demographics and actual traffic numbers. Click here for an example of how Quantcast provides free information to potential advertisers on my network of web sites. Stay tuned as I am following this one closely!

Could Google Become The Next Wireless Giant?

noreply@blogger.com (Jeff) — Thu, 14 Feb 2008 20:54:00 +0000

Range of and capacitiy have been major limitations for existing cell tower solutions. I am not an engineer but it would seem that if a cell down can only reach customers over a few square miles than the technology is probably old. I have heard Wifi and Wimax tests have proven to work up to 100 miles. I also know how to make a phone call using VOIP. So if you add 1+1 together you get a Wifi / VOIP mobile phone. Is it going to take an innovator like Google to enter the wireless carrier business before existing carriers will wakeup and invest in the future? Google does know how to provide a good service to its customers and monetize that experience through advertising profitably. Why can't the same be done with free mobile phones?

Could Amazon Become The Next Software Giant?

noreply@blogger.com (Jeff) — Wed, 13 Feb 2008 16:40:00 +0000

Who would have thought 10 years ago when online retailers Webvan, Etoys and Amazon were founded that one of these companies could eventually rival Microsoft, Oracle and Sun? During this 10 year period enterprise software licenses have been reduced by 1/10 from around $250,000 to $25,000 while bandwidth capacity has increased 100X from dial up speeds of 56k to greater than 5GB. Amazon has quietly become the world leader at selling high volume products at thin margins with zero customer service. Why not take that same level of quality service learned from selling millions of books at thin margins and start selling hosting application services at similar margins? The financial industry has given a sophisticated name to this new industry and we call it "Cloud Computing". Stay tuned!