Monthly Archives: December 2009

The importance of job listings to Craigslist

The way the contracts were structured between eBay and Craigslist shows just how important job listings were at the time for Craigslist.

Craigslist on eBay: “Untrustworthy”; eBay on Craigslist: “Amateurish” – GigaOM.

Craig Newmark testified that then-eBay CEO Meg Whitman assured him that eBay would not use the confidential information about Craigslist it had access to as a shareholder to compete with the site, however the contract the two companies signed in August 2004 for 28 percent of the company at a price of $32 million did allow eBay to compete, with the exception that it would lose shareholder rights if it offered online jobs postings in the U.S.

The safe assessment of online media

Ben Schacter provides the safest and most likely story for big online media, via Sorry, AOL’s Stock Is A Dog (AOL):

For investors looking for an attractive potential turn-around story, we favor YHOO shares over AOL. YHOO user metrics have remained much stronger than AOL’s, and we believe that YHOO is better positioned for margin improvement. We reiterate the three key reasons why we like YHOO shares: 1) Macro turn-around, 2) Margin transformation, and 3) Asia assets. Additionally, GOOG remains our top pick in the space as it should benefit from significant monetization improvements, share gains, an improvement in the macro environment, as well as upside from display and mobile.

I do– 4 Out of 5 Viewers Leave If a Stream Buffers Once

What makes this interesting is that the degree of this impatience probably differs among various online video sites.  I’m sure it’s more pervasive on a site like Youtube than on a site like Hulu because they attract different types of viewers.

Whatever happened to patience? More than 81 percent of all online video viewers click away if they encounter a clip rebuffering, according to a new study by Tubemogul.

via 4 Out of 5 Viewers Leave If a Stream Buffers Once.

All Hail the iPod touch – GigaOM

All Hail the iPod touch – GigaOM.

I’ve seen some posts about the value of the iPod touch as the training wheels that prep kids to go on an purchase an iPhone.   That’s valuable but I think the most important contribution of the touch is how it expands the OS platform.  I would argue that the iPhone would have matured at a much slower pace were it not for the iPod touch.

VC Investors Worry About The Emperor’s New Clothes – Venture Capital Dispatch – WSJ

…a new wave of venture investors, particularly sovereign wealth funds and other international LPs, have stepped in to help fill the gap, changing LP dynamics

The famous tale tells the story of an emperor who is conned by a unscrupulous tailor, who tells him that his new clothes are only visible to those that are clever and worthy of their positions. Neither the emperor nor his subjects want to admit that he is naked for fear that they will seem ignorant or incompetent.

“The composition of the investors does make me a bit nervous,” said Piette. “There are certain new investors flooding in that are afraid to admit that they can’t see the emperor’s new clothes.”

via VC Investors Worry About The Emperor’s New Clothes – Venture Capital Dispatch – WSJ.

Here are a few specific examples of things VC boards should do, and management teams should openly encourage:

via Seeing Both Sides: Trust, But Verify.

These three measures are a few I’ve tried to implement throughout our portfolio.  I’m sure others out there can come up with more.  The subtle point is that CEOs need to get out in front of this rather than have their board impose these things on them in a forced fashion.  Like on many critical issues, CEOs need to be ahead of their boards and leading them towards good governance, not dragging along behind them.

Key points in an HR Acquisition

from Fred Wilson:

When you do a HR acquisition, you are going to pay a premium over what the team would cost if you hired them. And sometimes that premium can be significant. Here's how I like to think about it:

1) figure out how much equity in options it would cost you to hire the team

2) figure out how much of a premium over that number you will pay to get them in one fell swoop, a pre-built team that has shown it can work well together. I've seen premiums of 100% and I've even seen a few that are higher than that.

3) value that equity at what your company would be able to sell for right now

4) pay off the investors in the company in cash if you can

5) make the stock you are paying the team vest over the same period that your employees stock vests

6) no matter what you do, you must make sure the team is incented to stay for a three or four year period. if you can't do that, you shouldn't do the deal.

via The HR Acquisition.

iPhone’s App Store and the important of the quantity of apps

This is a really interesting topic for me because of Apple’s roots.  Apple wasn’t a platform play in the beginning.  Remember once they initially kicked out Steve Jobs, all the analysts said they had to license their OS and copy Microsoft.  Compete head to head with them and that’s the only way Apple can survive.  Apple did that and they failed.

Steve Jobs came back in, bought their licenses back and basically did the opposite of a platform strategy and won.  This is what defines Apple.  This is why I always believed that platform economics were secondary to quality of the user experience for Steve Jobs.  So when you ask me if it’s the quantity of apps that makes the iPhone important, I say no, because Steve Jobs won against the platform by not competing for it, and I believe he built the iPhone so that it would succeed even if it didn’t become the dominant phone platform.

Niche apps are what make the iPhone special and, in my opinion, still the best general-purpose device.

via For the iPhone’s App Store, Quantity Really Does Matter Gadget Lab