Silicon Valley Shutdowns Mean Quieter Business This Week

The global recession has not spared Silicon Valley, or of course, the state of California, which stares in the face of bankruptcy, forced to grapple with an unprecedented budget shortfall. With a statewide unemployment rate exceeding 11 percent, the nexus for much of the world's tech innovation has been severely strained. The unemployment rate for Santa Clara County stands at 10.8 percent, with San Mateo County looking a bit healthier, at 8.1 percent, according to the U.S. Bureau of Labor Statistics.

In an attempt to reduce fulltime job losses, companies throughout the Valley have turned to every play in the book to reduce costs - stopping and slowing projects, eliminating contractors, reducing pay for both rank and file and executives, forcing vacations, and the ever-popular move of company shutdowns (which we also saw in the 2002-03 recession following the crushing death of the first dot com era).

With Fourth of July looming, this week will see many companies in the Bay Area have their doors closed to non-essential, non-customer support facing employees. Among the known companies shutting down this week are Adobe, Autodesk, NetApp, and a number of other firms, both public and private, who are looking to draw down on company vacation during a time when some employees' thoughts are toward the beach and barbecues.

(See details from Autodesk and one Adobe contractor)

And for those companies that are staying open at a time when their counterparts are sleeping in, there's no doubt many employees are opting to take the week themselves, so you can expect fewer phone calls, reduced Web traffic, and yes, reduced real world traffic as well. So maybe that drive up the peninsula that used to take 45 minutes in morning rush hour just might take 25.

So if you drove into the office today and wondered why you didn't see the usual hustle and bustle, the shutdowns are why. It's a solution that makes the finance guys on one side of the building happy, and possibly the other side of the building isn't complaining much either, with a much-needed respite from the daily grind.

See Also:

• Good People, Bad Companies: The Intersection of Skill and Luck
• Which Companies Will Blink First and Lead Us Out of The Depths?

Know of any other Silicon Valley companies that are taking the week off? Let me know in the comments.

eTrade Delivers Long-Awaited iPhone Application for Stock Trading

No matter how many iPhone applications I have downloaded over the last year or so, I have known there has always been a big gap - that of a dedicated eTrade application, set up to let me trade stocks, transfer funds and check balances while on the go. But eTrade, until now, has stuck with an exclusive contract with BlackBerry (which we discussed in March), leaving those of us with iPhones on the outside looking in. But in the quiet shadows of Apple's iPhone 3.0 operating system release, eTrade finally rolled out their app - and even though the markets were closed tonight, my testing of the application shows it delivers exactly what I would expect, in a clear and intuitive way.


eTrade's iPhone App Highlights the Market and My Accounts
For most traders, sites like eTrade offer an important combination of both company news and trading activity. The iPhone application is no different, featuring near real-time stock prices for the markets at large, and the top news for those stocks any time you query a specific ticker symbol.


eTrade's iPhone App Lets Me Highlight Stock Charts and Trades
eTrade's iPhone application gains me access to all of my account data, from my stock portfolio to my checking account, showing balances, gains and losses, and of course, making it very easy to make stock trades - off which eTrade makes good money.

Just like on the standard eTrade site, I was able to set up alerts that would notify me if individual stocks reached a certain milestone. I could check individual stock charts for durations of days, months and years, and I could place trades from any quote.


I Can Get Detailed Quote Data and Set Up Alerts
Placing a trade on the iPhone is very easy. Testing with Apple, Google and others, I could make a bid for a stock at a limit, and could enter the number of shares of stock, assuming I had available funs to see the trade execute. I could even set up my quote data to be streaming, which I assume will push the real time upticks and downticks straight to my iPhone.

eTrade's iPhone application is one that I've personally been calling for since the first day I got my iPhone. Now that it's here, I can be ordering stock trades from my phone as easily as sending an e-mail.

RakedIn Takes On Portals With Focused Finance Site

Today, a good amount of the news we get about businesses and the individuals at these companies comes from horizontal portals and news organizations that have other priorities - be it search at Yahoo! and Google, or politics and entertainment, like at CNN. Meanwhile, social sites like LinkedIn and business tools like Jigsaw and Hoovers are accruing personal details about many companies. A new site, debuting today, called RakedIn, has launched, trying to interweave the personalities behind the businesses you watch with up to date stock and financial information, as well as company overviews, with key leaders and board members.

RakedIn, launched by Mike Yavonditte, the former CEO of Quigo, who left AOL following that company's $340 million acquisition at the end of 2007, says it now has a collection of more than 200,000 companies and half a million people covered on its site, on day one, a number it anticipates to continue growing over time.


RakedIn's Search Engine Finds Data On LinkedIn


RakedIn's Profile of Twitter, the Company
The site's front page displays featured headlines and an update on the day's stock markets, headlines from across a wide range of industries, and the day's biggest losers or gainers. Aiming to have the most up to date information available, you can dice the information by industry, or even by press releases, company filings, or other news. The site even helpfully tells you if there are more headlines that have loaded as you read the current news - saying they have "raked in" new updates.


A Sample from RakedIn's Financial Data Headlines


RakedIn Also Shows Detail On Individuals Across Companies
Like Yahoo! Finance and Google Finance, you can dive down into any specific company, such as Microsoft, Google, Yahoo! or any of the Dow components. A company page, assuming it is public, will highlight the latest news, insider trades, employee compensation and other personnel highlights - as well as where the company ranks versus its peers. (For example, Microsoft has the highest earnings in Washington State and is the 88th largest employer overall tracked)


RakedIn's Profile of Microsoft's Steve Ballmer
One of the biggest aspects of RakedIn is the benefits of near real-time. During market hours, you can see stocks rise and fall, and headlines slot their way in to company pages. And the site even tracks your most recently viewed pages, giving you fast access should you want to return.


My Recent Activity on RakedIn Is Tracked
And for the largest companies, you can see how their extended families operate. For example, for EMC Corporation, you can see its related businesses, including VMware, Iomega and Documentum, as well as their estimated revenues, profits and employee counts.

RakedIn has a wealth of information, especially for a inaugural debut. And their focus might give people a very real alternative to the portals who are simply aggregating data from everywhere. Check it out at www.rakedin.com.

Income Down, Refund Up - Refreshing All the Way to the Bank

I don't like anything to take too much longer than it has to. I tend to write blog posts from beginning to end in one sitting. I don't like to stop TV shows and watch the second half later. And I really don't want to have to make doing my taxes an ordeal. That's why for the last several years, I've jumped onto TurboTax Online and powered my way through the year's data. Last night, the entire process took me less than two hours, including my wife and my W-2s, deductions for our various donations to charities and the church, by way of tithing, and synchronizing the results of my gains and losses (mostly losses) in investments through eTrade over the last year.

I've mentioned my using TurboTax a few times previously on this blog, including writeups after 2005 and 2006 taxes. But given the readership of the blog is ever-changing, and given the significant changes we're all seeing in terms of the economy, I thought I would share our experience again.

As an existing TurboTax user, all the year's previous data is saved for me. Rather than have to tell them every year where I work and where my wife works, it simply asks me if that data has not changed, and can automatically import the correct information. The automatic import of data from my brokerage account is also a dramatic timesaver compared to printing all my records out and hoping I get the data right.

As you know, 2008 changed a lot of things in our family. For one, we added two new dependents, with Matthew and Sarah joining us in the year. Also, as my wife stopped working in the middle of the year, her income decreased quite a bit. Lastly, and most importantly, as far as Uncle Sam was concerned, the gains I had seen in previous years on the stock market turned into losses, as they did for everybody else.


TurboTax Helpfully Shows Results vs. The Previous Year
The result? As expected, our household income went down by a good margin, but not so much that we're in dire straights. Yes, we're lower on cash than we'd like, but we have avoided debt, and I still have my job. And after last night's two-hour effort, this year's refund should help things quite a bit, especially as I have to strongly consider replacing my car, on its last legs, thanks to trouble with the transmission. (See FriendFeed thread here)

As it turns out, thanks to the drop in income, our new family status, and our being good citizens and tax payers, our refund grew by about 50 percent compared to last year. Even though it won't make up for the losses in the market, and our reduced income, it's something, and it's been great to just be able to log on to TurboTax and take care of the whole process in one evening. Now, I just have to check in with my bank every morning and see if the government has given us our share back. After all, three years ago, it only took ten days.

False Alarm on Credit Fraud Solved by My E-mail Hoarding

This evening, my wife handed me the phone, saying "It's Chase bank. They say there is suspicious activity on your account and to call them." Having never run into issues with fraud or identity theft, I've been lucky so far, despite liberally spreading my credit card details all over the Web, in a myriad of e-commerce sites and online services. With our recent travels, and my wife's own activity on the card, I thought there was a good chance this would be a false positive, which it was, but I came extremely close to canceling my card, and would have, had it not been for my often-mentioned e-mail pack rate behavior.

When I called into the fraud center, after identifying myself, the automated voice asked about some "odd" activities - one from a "record store" and another from an online eMarketing firm. Both sounded odd, so I ended up with an operator. As she explained to me, the "record store" was actually Apple's iTunes, to the tune of $.99. No problem. But the other one? It turned out it was based in South Africa, and had charged me $1.07. That was an odd number, but small, and I didn't recognize the firm. It sounded like "Quirky Marketing" or "Quirk iMarketing". Something...

When I said I didn't recognize the name of the service, the operator strongly advised me to cancel the card immediately. But I wasn't so sure. There was still the possibility I had made a mistake, and $1.07 didn't seem like a big deal. She again pushed me to cancel the card, saying if somebody in South Africa had my data, the next purchase could be a big one.

I asked her not to cancel the card, but after asking people on Twitter what they thought I should do, and seeing a near-unanimous response that I should follow the bank's advice, I was feeling like my smug naivete was going to catch up to me.

Searching Google for the firm name I thought she had mentioned found nothing memorable. And the South African connection sounded very weird. But there was one last place I could look - in my e-mail. As mentioned many times, I've saved practically all my useful e-mail going back more than a decade - making it an extremely deep personal database. So I searched for the term the woman had mentioned on the phone: "Quirk".

It turned up an e-mail confirmation from Quirk eMarketing from September 2008, for a product I had checked out called "BrandsEye". BrandsEye I would have remembered, but the "Quirk eMarketing" I'd largely forgotten. Their site left much to be desired, but my e-mail showed I'd signed up to a service that would charge 7 South African Rands a month to monitor online mentions. Depending on the exchange rate, one month's bill would be $1.01, and another would be $1.07. And while that didn't trigger any fraud alerts in September through February, today, it did. (Likely due to some other activity my wife initiated)

When I had gotten the online confirmation of my purchase back on September 28th of 2008, I moved the e-mail to my "Commerce" folder and saved it. I didn't know if I would ever need it again, but today, it came in extremely handy, and I won't be canceling my credit card. Phew!

Rackspace Stock Undergoes the Scoble Effect Following Robert's Hire

In the two weeks following Robert Scoble's official announcement that he was to be joining Rackspace, Inc. and embarking on a new project called Building 43, the company's stock has jumped by more than 30 percent, rising at a pace three times that of the NASDAQ, as the broader market tries to recover from a horrific year. And while yes, the argument should be made the two are not connected, the rise in the company's stock has added approximately $300 million to Rackspace's market cap. If Robert were responsible for even 1% of the jump, he would already have delivered $3 million of net value to the company.


Rackspace's 2-week Rise Has Been Impressive
While Scoble hasn't been blogging as much as he used to, in his most-impactful years, simply getting linked to would deliver what smaller bloggers called "The Scoble Effect", as new visitors to the site could dramatically outnumber their regulars. And it's fun to think just maybe he can do the same for the Web hosting firm.

At the close of trading on Friday, March 13th, the last day before Scoble's news was unveiled, Rackspace stock closed at $5.98 a share. At the end of trading today, the shares closed at $7.81 apiece, a move up of 30.6% in two weeks. In fact, according to Google Finance, Rackspace stock has been up on 8 of the 10 trading days following his announcement.


Meanwhile, Microsoft Has Been Slowly Sinking
In contrast, Microsoft, the last public company where Scoble worked, having left their offices in June of 2006, has seen their stock decline more than 15 percent since he left. Of course, so has just about everyone else...

The Downward Spiral - As Companies Slow, So Do Their People

Yesterday, IBM said they were laying off 5,000 people. Today, Google said they were laying off another 200. Unemployment in Silicon Valley is easily above 10 percent, and for the remaining job owners, many have seen salary cuts, forced furloughs and mandatory vacation. Companies have cut estimates and forecasts, or reduced spending. And even as the stock market has had some up days of late, the feeling out there is still not good - a lot more AIG than IPO, for example. But in many offices and cubicles around the Valley and beyond, workers are exercising their own slowdowns, their spirits dulled, as they gradually get less and less productive, waiting for more bad news, and being numb to it when it finally arrives.

For many, while the dire times should drive a newfound sense of urgency, it never comes. Instead of putting in extra hours, these desk zombies float through their business days, murmuring in the hallways about how they heard rumors even more cuts might come, and refreshing the company sales dashboard to see if anything has changed since when they last looked at it twenty minutes ago. It hasn't. They might come in just a bit later than they used to. They might take longer lunches - spending less, but they'll be out of the office. And by three o'clock, they're either thinking about shutting down for the day, or in some cases, finally getting up the energy to clear their to-do list, having killed more than half their time filing e-mail and browsing the Web.

The office, once a bustling energy-filled environment interrupted by phone calls, fast-paced strategic discussions and the occasional peal of laughter, instead resembles an unpopular library, with the most activity being the frequent visits to the printer or copy machine, and the creaks of the restroom doors opening and closing. If there are ringing phones, they are either from vendors demanding to be paid, or employees' personal cell phones, as they take the call and then rush out to the back, or to a conference room.

These companies are dying. Not necessarily IBM or Google, of course - but there are companies strewn throughout the Valley and beyond that were set up to capitalize on momentum that disappeared and then reversed over the last 18 months. Dreams were blasted away as the public markets closed, acquisition offers never appeared, and customers started to say no in a big way. And inside, many employees gave up. They're still coming to work. They even might put on a game face when in meetings or talking with their boss. But their will and drive to be a success and make things happen is all but gone.

I speak to this because I've seen it and I've heard it - not just in this recession, but in those before as well. One friend of mine confided to me by phone a few weeks ago that he probably works a solid 2-3 hours a day in his software engineering job, frittering the rest of the day away. He doesn't believe his company has a chance, and he doesn't care - citing their move to cut staff and move other jobs to India. But he isn't doing anything to change it, and the putrid job market has him just barely treading water, let alone seeking other options.

Yet another friend of mine talked to me yesterday about how his company is winding down, trying to convince two potential acquirers to find something of value in the little that's left.

In a previous company where I worked during the dotcom bust, I distinctly remember seeing one of the business development management team members spending more time playing video games and updating his resume than trying to close deals - as I gnashed my teeth, wondering why I was working so hard at something that meant so little to others.

If you read many of the tomes that were written about the Silicon Valley's successes, from the earliest days of semiconductors and the Internet, to Sarah Lacy's "Once You're Lucky, Twice You're Good", you can be regaled with stories of people who didn't give up, who didn't take no for an answer, and who put in twelve-plus hour shifts, putting the company ahead of themselves. But you're not hearing the stories of those who went the other way - as frequent as they no doubt are.

A recent satirical post blamed Twitter for the down economy, noting a correlation between Twitter's popularity and the Dow's plummet. And as silly as that is, many of these frustrated desk zombies are likely turning to social networking sites to kill time, to feel busy, and to chat with others around the world about their shared annoyances. Amidst calls for ways to deliver a social media ROI, the fatigued masses are sucking the ROI out of their companies, as their productivity drops down to almost nothing.

Now, don't get me wrong. Every company has its heroes, even those that aren't doing well. Even the biggest failures of companies that are roundly mocked starred impressive people with aggressive work ethics, and success amid despair. As I once asked a potential job candidate during an interview, "With your record showing a string of failed company after failed company, how can we be certain you won't bring that failure here as well?" Luckily for this gentleman, he had a good answer. But for some, the culture of failure around them becomes so internalized that they push it forward and it becomes self-fulfilling.

There's a reason that turn-around stories are so rare. Once momentum is going in a certain direction, a troubled company's best assets, the best employees, find a way out. And the ones that remain, those who couldn't attract another offer, are the ones who just might be plodding through and praying they get a severance package, or that the next round of cuts spares them as they muddle along. You know these people. They're the ones not making the headlines. But in reality, they are. They just don't know it - and maybe, their company doesn't know it either.

TwitPay.me - Twitter Payments in 140 Characters or Less

By Jesse Stay of Stay N' Alive (Twitter/FriendFeed)

I recently returned from a new event called "Launchup" here in Utah, where several startups were enabled to pitch their business in front of an audience, get critiqued, and share with the world an idea. After the presentations, the audience was given the opportunity to each pitch their own products, each with just 30 seconds to share their idea. I was amazed to find that with just 30 seconds one product in particular, TwitPay.me really stood out, with little to no explanation necessary.

TwitPay.me reads simplicity across the board. The product, which aims to allow you to easily send payments to your friends on Twitter, accomplishes that with no need to sign up, and doesn't even need your credit card to make that happen. The service uses Amazon Payment Services to send and receive payments, which means all you need is an Amazon account. So basically anyone who has ever purchased something on Amazon is already set up to use this.

I was reminded of the product when its co-founder, >Jeremy Raines (@jraines, from Park City, Utah), sent me $1.40 via a Tweet, "@jesse twitpay $1.40 to check out http://twitpay.me :-)". I do have to admit it's one of the coolest (and most simple) pitches I have ever received! I went to http://twitpay.me, gave them my Twitter username, they then sent me a pin number via DM which claimed my Twitter account - no login or authorization at all necessary! Inside my account, I just had to associate my Amazon Payments account (a total of 3 clicks) with TwitPay, and I had the money I was promised.

To send a payment to anyone, no account is necessary (until you want to actually pay the person). Simply send the words "@username twitpay $dollar_amount for reason", username being your Twitter screen name, $dollar_amount being the actual amount to send to the user, and reason being the reason for why you are sending the money. I tried this myself sending Louis Gray my 2 cents with "@louisgray twitpay $.02 for your love of bacon". He just needs to log into TwitPay and approve the payment through Amazon now to receive his $.02.

The Potential

About a year ago I worked with Phil Burns and several others to start a service such as this. The potential was screaming at us - with Social Networks and cell phones, we now had the potential to completely get rid of cash in peoples' pockets. The idea never really took off for us, but I'm glad to see others embracing it.

Up until now there has been nothing really to replace the cash, the small amounts of money, which we keep in our pockets for those moments we only need to pay small amounts of money. Imagine going to a vending machine and being able to Tweet a particular Twitter account listed on the vending machine with your payment. Imagine making a bet with a friend and being able to Tweet them their winnings. Or what if you could "Tweet" your waitress their Tip?

TwitPay may have just seriously challenged services such as Paypal's business models with this innovative new way to send payments. The service is plain, simple, 140 characters or less, Social, and requires no account to use. Social Payments have yet to be breached, but I believe TwitPay.me may have just breached it with the ideal Twitter payment environment. Are we at the beginning of the end for the need of actual cash in our pockets?

Read more by Jesse Stay at Stay N' Alive.

Did eTrade Blow It By Making Their Mobile App A BlackBerry Exclusive?

As Apple's iTunes application store continues to grow, it is becoming an increasing rarity to find needs unmet by the company or its wide array of third party developers. But one clear vacancy is in the real-time stock information and trading department. I've been waiting for eTrade, my broker of choice, to develop an application for the iPhone for quite some time, but the company hasn't publicly made any strides to meet my needs. In fact, after rolling out a specialized application for the BlackBerry platform in June of 2008, we've had nine months of silence, and I'm left to believe the company is sticking with Research In Motion as their partner for the long haul.

The stereotypical image one has of today's Wall Street movers and shakers has evolved beyond the neatly pressed suits and ties, and sharp shoes, to include a hyper-obsessed BlackBerry addict, who can't look up in fear of missing an e-mail. But beyond the trading floor, consumers far from New York and other bustling metropolises are making updates to their portfolios - even in times of recession. And what eTrade has done by partnering up exclusively with BlackBerry on the mobile side is shut out the very real growing population who have selected other platforms, be they the iPhone, Google's Android, or even the Palm Pre.


eTrade Highlights Its Exclusive BlackBerry Deal
Today, using eTrade on the iPhone is barely passable. One simply has to log in through the standard Safari browser and use the non-optimized interface. It's good enough to get a near real-time update for portfolio holdings and balances, but too limiting to do much else. I'm certainly not using the Web site on the iPhone for researching stocks, reading news, making trades or seeing real-time updates.

I'm not saying the iPhone will kill the BlackBerry and render eTrade's move an abject failure, but even with BlackBerry's latest models, they don't seem to have the inside track on growth and innovation. They seem to have lost the swagger that made them a market leader for the last five or so years, while Apple and Google (to a lesser extent) have taken their place.

The iPhone is growing up to the point it's not just a game platform or a music device. I use the Mint.com application to see my up to date financial numbers, aggregated from many accounts. And Apple helpfully offers a basic stock price app. But they're no substitute for real trading.

An eTrade application for the iPhone should include:

• Real-time stock quotes
• Porfolio updates including gains and losses or trends
• Stock trading
• Company news and information
• Market overviews

For a company like eTrade, which is so broad in terms of its reach to consumers, to limit itself to a single mobile platform, especially one that seems to be on its way to being eclipsed by more nimble competitors, seems wrong. As an eTrade customer, I know I would use this application, and regardless the cost for it to be developed, eTrade would make up the amount in very little time, from the hordes of iPhone users who could start making trades on the go, from anywhere.

eTrade, your own stock is barely over a buck. I know you have other issues on your mind. But every day that goes by where I don't have an eTrade application on my iPhone means less revenue for you. Call BlackBerry up and tell them you want to see other people.

Which Companies Will Blink First and Lead Us Out of The Depths?

Graphic via Dreamstime.com
One of the scariest things about the type of economic slowdown we are in today is that it breeds yet more slowdown. If you see the headlines, you can read that as companies anticipate lower revenues and diminished profits, or expanded losses, they are turning to layoffs, and in parallel, reducing their own spending, from program and infrastructure costs, to employee costs. Just this week, for example, HP announced 5 percent pay cuts for its massive salaried employee base, across the board, and the Mercury News reports more than 100 public companies in all industries have reported executive pay cuts since the recession began.

While this helps the company in the immediate term, the ripple effects downstream are quantifiable - which, in my opinion, could make the problems worse.

Assuming lower revenues is one thing. Lowering spending costs impacts all the company's vendors, in reducing their own revenues, spreading the pain around. And of course, reducing the number of paid employees, and reducing the pay to those employees who are left, impacts them such that they are less willing to spend.

It's a high-stakes game of chicken, for if companies expect the market to turn around, and want dollars to flow again, they have to contribute to the economy themselves, and all actions we have recently seen in the press point to companies simply trying to survive what for many is the deepest downturn in memory. But there cannot be survival if every company reduces its spend so that every company downstream, and its employees, fails as well.

During the 2001 to 2003 recession, there were a few bright spots of hope and prosperity here in the Valley, from Google, who rocketed to market-share nirvana in the face of strong competition, to Apple, who rebuilt themselves from a PC company to one built around electronic gadgets and digital sales, following the introduction of the iPod in 2001, and later, the iTunes Music Store, in 2003.

Also during the 2001 to 2003 downturn, government leaders told consumers that the patriotic thing to do would be to open up their wallets and shop - to help keep the economy humming - even as spirits were broken. Of course, the resulting debts and the issues that surround people spending above their means were main contributors to the stark realities we see today, from credit crunches to home foreclosures. But this time, consumers have (hopefully) wisened up, and they are likely more reluctant to spend their way out of this deep recession, especially if they are one of the unfortunate millions who are drawing unemployment benefits or see their bi-weekly paystub reduced.

On this blog, many of the companies and services we talk about have very little to do with capital creation and distribution. Some of the products are fun widgets or sites that enable people to connect in new ways, not so much finding new places to spend money or even have revenue themselves. We recognize that - and hold to the line that for the most part, this blog caters toward early adopters, and it is not necessarily our role to gauge every company's business acumen and prospects - best left to others. But surrounding those people are real businesses with real, tangible products and a real-life balance sheet - and many entrepreneurs and fellow bloggers work for these companies that have been impacted - including some of my peers who write on this site.

Silicon Valley is not immune to this financial crisis. Companies big and small have reduced forecasts and results. Companies big and small have reduced headcount, and many more have reduced their operating expenses, without drawing headlines. Down the food chain, many start-ups have found the VC well to be dry, and will either be shutting down or changing their prospects. But as 90 percent of start-ups fail, this shakeout could violently separate the good ideas from the bad - faster than they had ever desired.

So as practically every business has reacted to the downturn and closed the spigot on spending, which ones will be the first to reverse the trend and say, 'Enough!', instead, taking advantage of competitive weaknesses to seize market share, and approach a more-wary consumer base? We can't sit on our hands and expect Google and Apple to be the names that rise to the top again.

Outbrain Gets Five Stars (And $12 Million) in Round B

While venture capital is said to be very expensive these days, hard to obtain, and with questionable potential returns given a closed market for public offerings and multiples for mergers and acquisitions, companies on the periphery of blogging appear to still be hot. We saw Auttomatic acquire Intense Debate late last year. You also remember strong funding rounds for my personal favorites, Lijit and Disqus, who are adding strong search and commenting functionality to sites like mine. Now, you can add Outbrain to the list, following this morning's announcement the company scored a $12 million round to expand its blog rating and recommendation platform.

Now, before you cry foul and ask where the money is in such a little widget, as is tempting, you can read between the lines in today's release to see that Outbrain has bigger plans - ones they no doubt shared with their VC partners, and not necessarily with me.

Outbrain is talking less about a widget, and more about finding great content across the Web. As one VC partner said, "Finding great content is getting both more difficult and more important... Outbrain's personalized recommended links offer great value to readers by combining their collective wisdom..."

If you think about it, Lijit and Outbrain are solving similar issues, from different angles. Lijit scours your personal blog and your social network of approved sites to find content you are searching for. Outbrain analyzes your individual posts, your previous blog entries and other blogs in their network to provide recommendations of what to read next. Both are useful, and both are getting traction. And it's good to see that good ideas are going to be rewarded, even when times are more difficult.

Sirius Radio Now Looks Like an Outer Space WebVan

WebVan's debut in the 1990s as a way to order groceries online and have them shipped to your home or business sounded like a fantastic way to leverage the power of the Web. But as we all know now, the costs of deploying expensive, expansive warehouses in many metropolitan areas, not to mention the costs of delivery and promotion, were way beyond what was sustainable. Hundreds of millions of dollars in venture capital, not to mention stock holders after the firm went public, went up in smoke, as the company spiraled into bankruptcy.

The idea may have been ahead of its time or just poorly implemented, but it stands as a tragic example of where hope came ahead of logic. And now we're seeing it again - with all the news around Sirius XM Radio's potentially filing for bankruptcy, after the struggling satellite radio company found that slowed growth in the face of lower native car installations, competition from iPod/iTunes/iPhone, and the inability to pay massive accumulated debt, have combined to make the current plan unsustainable.

And again we have what looked like a very cool idea, costing billions of dollars to deploy, on the brink of failure. And again, we see shareholders who believed in the idea, ahead of the reality, getting wiped out. In what's already been a horrific last year for the stock market, Sirius' freefall has been notable - especially considering it's not involved in banking or real estate.

A few months ago, in a podcast with Wayne Sutton and Kipp Bodnar, I said we "knew" Sirius would pull through because it had a compelling offering, and that threats to its business were overblown. Boy, was I wrong. I may have been looking forward to getting Sirius Radio with my next car, whenever that happened, but it doesn't look like that's going to happen any sooner than my dialing up WebVan for some eggs and milk.

Eight Forms of Social Networking Depression: Are You Suffering?

Even if you have been staring at your computer screen all day, you've likely figured out it's a scary world out there right now. Scads of people are being laid off, in practically every market - including, very likely, people you know, work with, or even you.

Companies that you used to rely on as a standard are begging for bailout money, going out of business, or being purchased at prices well below what they would have received six months or six years ago. Savings and investment accounts are being decimated as credit card debt rises and retirement plans are mere fractions of what they used to be. And all that bad news piles up - making some of the more frivolous things we do online seem even less important than they used to be, giving some of us a sharper edge and making us a lot more irritable. The result can send some folks into what I'm calling social network depression - the manifestation of these frustrations, spilling over from the real world and into the virtual world.

There are many different ways you can see social networking depression illustrate itself. Here are a few cases:

1) The Depression of Getting Less Attention

The individual will claim to see less activity on a site than there used to be, even if they haven't changed the way they use it. (Example)

This suggests that the site itself might not be growing, that other users are spending time elsewhere, or that the service may have peaked, starting its inevitable slide downward. What as the interpretation is subjective, it may be random, incorrect, or the result of other areas on the site being more interesting.

2) The Depression of Repetition

The individual will grow bored of a network, saying the newness has worn off as the same jokes, stories and pictures get spread time and again. (Example)

The suggestion could be that as people fall into a routine, their sheer repetitiveness grows dull, and the social aspects are diminished. But it is not clear if the individual themselves is seeing shifting tastes or if external pressures are changing their outlook.

3) The Depression Of Despised Popularity

The individual can start to question whether what we do online is more a herd mentality than one derived based on our own preferences, and questions the popular users' value. (Example)

The suggestion is that as lists are created, the same names are repeated time and again - whether they are bringing real value, or not adding much from their presumed areas of expertise. But as with #2, even if a person's original value was extremely clear, by the time you've run into them multiple times, across networks, their own value to you is likely diminished.

4) The Depression of False Prophets

The individual will openly complain about some of the social aspects themselves, such as popularity contests and self-proclaimed experts. (Example)

That popularity contests were annoying in high school doesn't mean they don't replicate themselves online. But, depending on the month, the individual complaining probably participated, or would do so more often if they were included or winning.

5) The Depression of Absence

The individual can take a self-imposed vacation from social networking, or can turn their blog over to the resume gods, hoping to land a job, instead of landing the next dozen followers and friend connections.

6) The Depression of Lost Focus

The individual can claim that all social networking tools are distractions and should be turned off, to maintain focus on "real work". (Example)

The updating "ping" of TweetDeck can be a big draw for the popular Twitter user. But there is the potential to operate under what I've termed continuous parallel attention, letting you complete your work tasks, stay on top of social aspects, and listen to music all at once.

7) The Depression of Snarkiness

The individual can change the tone of their comment streams on Twitter and other networks, moving away from promoting people, sites and links, to instead, getting sarcastic, passing around the meme of the day, and generally acting in contrary to their typical personality.

8) The Depression of Lost Value

The individual can declare the world of social networking and social media a waste of time, and swear they're quitting, to focus on things with "real value".

So what can you do? Maybe you've suffered a hint of social networking depression yourself, and find you are blogging less, sharing less, commenting less and simply having less fun online than you used to. Maybe instead you've seen your friends go through various stages - taking what used to be a fun, collaborative environment, and make it something where you can hardly tolerate what they've become.

In my opinion, the very worst aspects of social networking come from the very things we of course enjoy, leaderboards and statistics. In August I asked bloggers to relax, saying "nobody is keeping score", warning of blogging burnout and the self-imposed guilt that comes from gaps. The same push to relax should be applied with social networking.

Why did you start social networking in the first place? It wasn't to count friends or to participate in memes of the day, I would bet. Instead, it was more likely to find out news quickly, and find people with whom you share common interests. Now that times are tough, and people are questioning how they are spending their time, offline and online, it's no surprise that those things which don't have a clear, defined, line to revenue are being discarded, or at least, seeing strain.

The truth is that the social networks are mirrors for ourselves. When we are stressed about work, about money, about relationships, these strains will impact who were online as well.

On Monday, I spoke with a great friend about how I'd seen them change from an aggressive go-getter and evangelist, to a bitter, depressed introvert over the space of a few months. It so happened the kids were making noise in the background of our call, and they later texted me to my iPhone:

"Just talking to you helped and hearing the kiddies. There's more to life than this crap."

And it's true! I'm lucky that I've got two built-in distractions I can come home to. Maybe you don't. But while many people are grousing about the social networks themselves, the way people behave, and rank themselves, letting the offline trials seep into their online personas, the products underneath are actually getting a lot better.

Please do question social networking in general. Try and find out what it is that you're doing online and how you are spending your time. Think about whether you have a good work/play balance, or if the time you are spending in front of your computer monitor is detrimental to your offline and online health. But be aware that if you're getting negative and lashing out at your followers, your communities, and the very platforms that let you do it, you could be exhibiting signs of social networking depression. And it's not likely the tools. It's you.

There's No Way Twitter Is Worth $250 Million Today

See Also: Twitter Is Worth A Lot More Than $250 Million

In the Web 2.0 space, it would be extremely difficult to find a more-successful, faster-growing service than Twitter, who has carved out a significant niche for itself in the microupdates space, as people from around the world tell you what they're doing, right now, even if you didn't ask. The service has an estimated 6 million active users, and recently surpassed the 1 billion "Tweet" mark, if you count all updates. But the company hasn't yet made a buck in traditional revenues. (Although I can't claim to be privy to their books, and they just might have recognized something somewhere) Word comes this weekend, via TechCrunch and others, that Twitter is embarking on a new funding round that could see the company valued at $250 million. And while I already made the case that Twitter will get its funding, and could end up being worth a lot more than that number in short order, it is pretty easy to also poke holes in that analysis.

Quite simply, now is a very difficult time to attain a high valuation. Venture funding is dropping dramatically, and positive exits for companies are rare. Practically nobody is talking about going public, so to make money, you would have to do it the old fashioned way, through profits. And Twitter has grown its user base rapidly, but has done so on the backs of users who are used to getting something for nothing. We've already seen users revolt when Magpie launched with the possibility of inserting ads in one's tweets, and you could expect to see the user base shudder when being asked to shoulder any of the revenue themselves - so you can practically forget about monthly fees. Given that scenario, site ads and ads inserted in third party applications, like TweetDeck, would have to be one option, but an unattractive one, as the ad market itself is tailing downward.

Additionally, what Twitter does is incredibly basic. It's sole functionality is one that it is easily replicated. You can provide status updates on Facebook, on GMail, on FriendFeed, and the whole process rolls back to AOL instant Messenger, when you would set an "Away" status to say you were "At Lunch" or "In a Meeting". So that's not hard.

A recent post by Paul Buchheit of FriendFeed, called Communicating with Code, showcased a prototype offering of FriendFeed that borrowed heavily from the look and feel of Twitter. Given FriendFeed updates include those from Twitter, and then build on with additional services, it can be considered a superset, while Twitter is simply one service of many. So the barrier to entry to compete with Twitter is not that hard, leaving the company's major assets as the community and its developers.

But communities are incredibly fickle. None of Twitter's six million users were using the service five years ago, and maybe, five years from now, they will be doing something else. If people use Twitter for conversation, they can replace that with e-mail, with IM, with FriendFeed, Facebook or other social destinations. I've talked about the five stages of being an early adopter before. One of the final stages is when you grow tired of an environment, and leave, begging your followers to come along. It happens with news groups. It happens with e-mail lists, and it just might happen with social networking tools, including Facebook, FriendFeed, Twitter and others.

Today, Twitter is among the hottest, fastest-growing brands out there. But no matter how you multiply its current revenue to try and guess at a market capitalization, the answer is still zero. At a time when real brick and mortar businesses are seeing their own valuations decimated, how can a virtual company with a free user base and a low barrier to competition expect to be valued so richly? Whoever does invest should exercise extreme caution.

Twitter Is Worth A Lot More Than $250 Million

See Also: There's No Way Twitter Is Worth $250 Million Today

Michael Arrington of TechCrunch led the weekend news cycle Saturday evening after revealing Twitter is in the middle of a funding round that could see the still pre-revenue company valued a cool quarter-billion dollars. Not only do I believe the company will end up getting the money they are looking for, but whatever investors choose to pony up could eventually be seen as having gotten a bargain - because Twitter, with the increased investment, looks prepared to 'double down' and become a must-use utility in our increasingly realtime, increasingly connected, digital world.

Despite the company's many failings, be it with uptime, developer relations, or seemingly blaming its most active users for aggressive activity, Twitter has, over the space of 24 months, cemented itself in a position where it is a critical part of the way we share information, communicate with others, and in times of news and change, can learn from the firehose of tweets from all corners of the world.

Twitter's rise to prominence has been largely in part due to its simplicity. It does two things - let you send short updates to followers, and let you see updates from those you follow. The addition of many third party services, including the since-acquired search capabilities, and scads of desktop or Web tools, have only served to let people consume and distribute the data as they wish, as Tweets can be issued automatically from mobile phones broadcasting location info, sent from blogs using RSS, or from a host of updating services, including Ping.fm and FriendFeed.

Twitter, amid pressure from users and developers to add the ability to display photos and video, to extend the number of characters to beyond 140, to add threaded comments, and to find a business model - any business model - has simply continued doing what it does, even as competition has faltered. Pownce shut down altogether. Jaiku disappeared into the Google black hole. And FriendFeed dances to its own drummer, acting as a great complement for Twitter even as people occasionally say it could knock Twitter off its pedestal. Facebook's status updates are probably the closest thing to being a head to head fighter to Twitter out there today, and many simply pull their updates from Twitter to the social network, as I do.

Twitter will find a business model. It will very likely include some form of advertising, even in a tough economy for ads. It may also charge for premium options to users, and might find a way to break into the enterprise, eliminating the need for Yammer and other copies. And investing in Twitter today means you're buying into a company that already is #1, by a long shot, in its self-built market, before it has truly hit the mainstream, and among the Web 2.0 set, Twitter is the closest to do so - being featured frequently on CNN and used by prominent figures, including the new president's team as part of his social Web strategy.

And don't be fooled into thinking Twitter is just for consumers. Savvy business users are recognizing that Twitter is a vital audience to be communicated to and to listen to, for product mentions, feedback and competitive updates. Twitter is part of the noise, and you can either embrace it, or ignore it, to your own peril.

How can Twitter be worth 1/4 billion today without any revenue? Take a look at the market capitalizations of Web companies today, even after the stock market blowout. Yahoo! is worth nearly $16 billion. Google is worth more than $100 billion. And in traditional media, even the very damaged New York Times is worth more than $800 million at its current price. As I have mentioned many times on this blog, I find Twitter's search capability to be even more important than that of Google for breaking news. Given the company's incredible momentum, and inability to get knocked off its pedestal, we would be foolish to think Twitter can't continue to grow and increase its user base and offerings, and be worth more than $1 billion in very short order.

If I had cash sitting around to put into Twitter and they came knocking on my door, I would ask plenty of questions, but at the end of the day, I would be investing. This will be a deal to watch for sure.

The Global Recession Is Crushing Web Ads. Expect it to Get Worse.

That I am not a fan of Web advertising on Web services and blogs is not a big secret. I was roundly pummeled for my over the top comments in April that tried to divorce authors from the idea that they could publish a blog, add AdSense and then wait for the money to roll in. But recent developments make it look like the Web advertising crunch is becoming critical. Inventories are not being sold, prices are dropping dramatically, and it's very likely more and more services reliant on ads are going to feel the pinch, forcing them to rapidly change their business models or close altogether. And they won't be alone. I'd look for many multi-author blogs you've grown to rely on to start thinning the ranks of reporters as ad returns weaken, and some have already started to make such cuts.

Back in December of 2007, I expressed my concerns in a piece called "The Web Advertising Bubble Has Got to Pop", where I said:

"The more I think about it, the more obvious it becomes to me that the ad-driven economy, both offline and on, could soon be in dire straights, and companies hoping to cash in need to think of new revenue targets - quick."

The reasons I gave for decreasing ad revenues, at the time, stemmed largely from audiences learning to avoid ads, or to use software to block them. I mentioned that even the mighty Google would be susceptible to a crunch, if was to happen, in the online ad market. Like others, I didn't forecast a massive global recession, but as the financial markets have spiked lower, and public markets have been closed to innovative companies, the drive to reach a profit, and do so without relying solely on ads, is stronger than ever.

Last night, Duncan Riley of the Inquisitr summed it up in what had to be a tough piece for him to write, "The Web Ad Apocalypse". He, being one of those bloggers who is heavily reliant on ad revenue, said advertising inventory at his providers has dramatically dropped. He adds, as I did more than a year ago:

"Advertising in blogging and 2.0 services/ apps is on the downward march, and companies that rely on advertising that were marginally profitable, or running at a loss are about to find life that much harder."

Duncan's comments are not in isolation. TechCrunch reported today that video ad rates dropped 25% in the last quarter. Be it in video, in banners, or in text ads, the trend is downward.

It is my belief that this problem, while exacerbated by the financial downturn, has been a long time coming. While Google made money hand over fist by pushing sponsored ads alongside native search results, their AdSense product, beloved by many bloggers, is often way off the mark when it comes to contextual advertising - and practically the only memorable online ads are those polluted by nonsensical dancing and misleading graphics that make you think you have a computer virus, or lie to you and say you've won an iPhone by being the 1 millionth visitor. I'd say we've come a long way from the late 90s when we were asked to "Punch the Monkey", but we haven't.

Online ad successes in Web services and blogging are not non-existent, but they are incredibly rare, and they are going to get rarer still. If you're trying to make money on the Web, it's time to think of a different way. If you have a service, get users to pay for it. Find a way to deliver value through premium offerings. Charge monthly fees. But the whole "free plus ads" mantra is going to get worse - and not worth the effort in many cases. That's a major reason I've never run ads here. I knew the trade-off for mucking up the site wasn't going to be worth the pennies. Now it's clear that's likely all I'd ever get.

Does a Service Need a Business Model to Have You as a Customer?

Yesterday, following on to our discussion from earlier in the month on what further efforts FriendFeed could make to attract and keep new users, a commenter wrote:

"I'm a little nervous about investing a lot of time and effort in, or become reliant on, a product that has no business model - whether it's FriendFeed or Twitter. Sure it has plenty of VC money, but who knows when they'll pull the plug."

Given the uncertainty we've all seen in the greater business market, and with Silicon Valley in particular, there is no question that some Web services are in dicey positions. Pownce recently closed after its acquisition by Six Apart, and users weren't given a whole lot of time to extract their information. So, for some, it makes sense not to take a risk with their time and their data.

I tend to be of the opinion that as consumers, we should use those products that give us the best experience, community or enable us to do things that no other sites do. I feel that it's not typically our role to choose what sites are going to be successful and which ones are not. We don't always know the financial underpinnings of a company. We can't forecast whether something will succeed or fail. And often, if you like a product, so will many others like you, meaning that if the time comes to eventually shut the site down, there will be a buyer, and more likely than not, the service, and your data, will be retained.

As much fun as it can be for us to try and predict if Twitter will go mainstream, and much of the conversation in the echo chamber today was around the company's hiring of a new business development manager, seen as the first step toward getting revenue, I don't really care all that much what these companies' business models are - so long as my data isn't being sold or manipulated, or ads don't obscure the product itself. But that's my less conservative side showing - and maybe my position is wrong.

Have you ever liked a product, but steered clear of it because you didn't want to get attached in the event you might later have a costly breakup?

Some Things Are Worth Paying for Online and Others are Not

A month or so ago, following my review of the new Price Is Right application for the iPhone, the always conversational, if not controversial, Allen Stern of CenterNetworks asked "why people are so quickly willing to drop massive dollars on iphone apps" but will do whatever they can to avoid paying for content, including the use of ad blockers. As with offline purchases, everyone's rationale for purchasing can vary, but here's some of the thinking behind my own behavior:

Worth Buying: Something Tangible You Can Keep

The "Commerce" folder in my e-mail box is flooded with iTunes Store purchase receipts going back years, thanks to the Apple offering me thousands of songs I can purchase, films, television shows, and now applications for the iPhone. With hard drive capacities ever increasing, I have very little need to ever throw away a song, so purchasing it for keeps makes sense.

I also purchase software applications for my computer online, which when downloaded, are essentially there forever. Also, as downloadable software applications are typically the same content as retail boxes of software, I know they have equivalent value.

Not Worth Buying: Something You Don't Keep

Even if it would likely save me money over the long run, I won't pay for a subscription model of music. If I ever chose to stop paying, I would have no assets. So that doesn't make sense.

Not Worth Buying: Something Useless Tomorrow

Practically everything has a shelf life. Information and news ages faster than just about anything else out there. News that was breaking this morning is old news this evening and ancient by tomorrow. That's why I am no longer paying for Newsweek's print edition, or Sports Illustrated, Macworld, or even the Wall Street Journal online edition, as their content had already been discovered somewhere else closer to real time.

Worth Buying: Unique Insight and Direct Access

Thought it's unusual, some subscription models work, if online consumers believe they are getting more of the story, or get additional tips that free users are not getting. ESPN.com's Insider feature, though maligned by many, has been a must-renew each year, because much of their quality content is behind the paywall. Similarly, at times I have been a Wall Street Journal online subscriber, and previously a subscriber to TheStreet.com. The last two are particularly important because they deal with finance and many believe that the money they will make back off their content will more than outweigh the initial spend.

Not Worth Buying: Duplicate, Non-Unique Items

The "for pay" content successes are few and far between. Much of that is because it is getting easier and easier to publish content quickly these days, and if one source doesn't cover a story, another one will. In television, all the news networks and cable channels cover the big stories. In the blogosphere, most of the brand names echo each others' content, driving down the average quality, and practically making every single one of them replaceable. With very little unique content and access, none derive enough value for users to pay, except maybe out of pity.

Worth Buying: Time Wasters and Entertainment

It's a lot more fun to play cards or video games than it is to pay bills. And while office productivity applications might be among the most useful applications you have, the number of games you have on your PC or your mobile phone may outnumber these tools by a factor of 3-1 or more. For every Microsoft Office I have, I also have a handful of card games, board games or arcade games at the ready, each of which is probably in the $5 to $20 range to buy.

Not Worth Buying: Access to Social Communities

The very nature of social communities is that they rely on the people themselves to deliver the value, and on the Web, those communities are extremely mobile. As much fun as you may be having on Facebook, Twitter, LinkedIn, FriendFeed or other networks, you know you were probably spending the same amount of social capital somewhere else a few years ago, and you'll likely be spending it somewhere else in a few years. Given the entire community can move, you don't want to find out the last thing people will remember you by is your credit card number.

Worth Buying: Items With Offline World Equivalents

Lest I be seen as overlooking the entire world of e-commerce, yes, buying real-world goods and services online has value, so long as it correlates nicely with offline costs and deliverables. Online purchases of tickets, apparel, food, and services make sense. I'll pay for Quicken Online. I'll pay for Netflix videos. I'll pay for MLB.com broadcasts, and I'll buy physical items on eBay, Amazon and other merchants.

Not Worth Buying: Content

Content itself is not king as once was thought. With the advent of wire services and RSS, content created in one place can move to another in rapid speed. Syndicated content can build up a shell of a site and make it a destination. Bloggers can niche themselves and create original content, or they can be repeaters and post many times a day, putting quality in the wind. Building a Web site is very cheap right now, and creating content is very cheap as well. While consumers are suffering with a reduction in the availability of great content by those who practice their craft well, the amount of content available is overwhelming, and if one publication disappears, another can rise up almost instantly to take its place. Even the biggest brands we know today in content can be replaced.

For many content producers who have made this their craft, the realization can be very frustrating, as they know their efforts have value, but as consumers, we don't always recognize it. I may be perfectly okay in shelling out $8 to play the Price Is Right on my iPhone, or I'll pay $10 to download an album from iTunes, but ask for $1 an RSS feed, and I'll say no. Cognitively, that is broken. But that is where we are.

Any other thoughts? There's no way my list is complete. And Allen, I expect to hear from you on what I'm missing.

I'm Getting So Tired Of The Non-Instant Web

Tap... Tap... Is this thing on? (Reloads)

At the end of 2008, my #1 prediction for 2009 in the world of tech was that the real-time Web was going to grow in awareness and importance - and that a growing number of early adopters and fast followers were going to turn to sites that delivered instant updates, without waiting for filtered analysis. But there are other aspects of the Web that seemingly should be instant, and are nothing but. Brick and mortar institutions that have moved to the Web still have the delays common with their offline institutions. Pure online plays can't manage to update their data as months and years change. And the result is frustrating. As I find some services doing a fantastic job of updating instantly, it's those that lag that drive me absolutely nuts.

Back in 2006, when this blog had maybe three total readers, myself being counted twice, I encountered an issue where eTrade took seemingly ages to send from my account to a third party bank. As the two posts on the matter, from August 20, 2006 and August 24, 2006, show, a simple process of selling stock, converting it to cash and shipping it to Bank of America, that should have happened practically immediately, took about a week. While at the time I was mostly just annoyed, near the end of the year, in what looked like an instant replay, I actually bounced checks for this very reason.

As I've written about a few times on the blog, I opened up a checking account with eTrade near the end of 2007. Given the crisis at many financial institutions in 2008, it seemed a good move to have some of my cash at Wells Fargo and some at eTrade, in case one had issues. But at the end of 2007, I had to write a check that exceeded the amount of my holdings at either bank, but was less than the total amount between the two. So, planning ahead, or so I thought, I transfered money from Wells Fargo to eTrade. Days later, I wrote the check, knowing I had enough cash to cover it. But days later, I got notification my check had bounced, and eTrade did me the favor of charging me a $25 overdraft fee.

Meanwhile, I substituted the old check with a new one for the same amount, and resubmitted, as the deposit made its way through. But instead of the second one going through, and the first begin canceled, eTrade billed me a second overdraft charge, saying now that the first check had passed through, and the second had bounced. Freakin' brilliant.

So... we're dealing with that. Meanwhile, with my eTrade bank account in a thinned-state, the mortgage came due, automatically debiting from my wife's B of A account (we're working on closing that out). I wrote her a check to cover the amount, while at the same time, selling stock on eTrade's brokerage side to transfer to the checking side to give the appropriate cushion. That was done at the end of last week, but only just tonight did I get the chance to transfer the funds to the right place. Annoying. The last thing I wanted to do was bounce, yes, a third check, and then have my wife bounce her own account and have us in trouble with the mortgage company, when in fact, we did have the money, but just didn't have access to it.

I know financial institutions have these old-fashioned rules that allow a certain number of business days to make funds available, and that things aren't as easy as simply dragging and dropping money from one account to another, but given the seeming simplicity of the Web, I've got to believe there is a better way. Why should I have had to check in with eTrade first thing every morning, multiple times during the day and again at night to see if their system would let me have access to my own money? The Web should remove the restrictions not just of physical limitations, but of time as well. Just get it done.

Which gets me to my next item...

It's January 7th, right? So why, oh why, is there any reason that Compete.com's data still stops at November of 2008? Are they still waiting for those year-end reports to trickle in from December? It makes absolutely no sense. At 12:01 a.m. on January 1st, I could have given you the exact statistics for this site. Sitemeter just checks in with real-time data, and it keeps going. But Compete.com, the Web's easy way out when it comes to getting comparative traffic stats, is asleep. Call Alexa all the names you want, but at least they show December and the first part of January. Ridiculous.

But those services aren't alone...

Web digerati from Steve Gillmor to Gabe Rivera have been slamming FeedBurner's slow pickup of news and translation to RSS. RSS is practically the lifebood of today's connected, always updated, mobile content world, and the Google-owned property has put innovation on hold by hitting the snooze button.

I've seen this many times myself, as I go through Google Reader, seeing posts that took place hours and hours ago. I used to blame Google Reader for the issue... (See: Warning: Google Reader Congestion of Up to Five Hours) but now it's clear the offender is FeedBurner. If FeedBurner is destroying the capability of the real-time Web, there needs to be an alternative. There's really no good reason with so much technology at Google, and on the Web in general, that we can't find a real real-time solution.

I could keep going... but I am going to reward those services and companies that get the real-time instant Web right. There's no reason I should have to wait for my money, my data, my feeds, or any of that. I'm done with waiting.

I Didn't Hold an End of Year Stock Sale in 2008

In January, amid some scorn, I admitted one of my yearly traditions has been to zero out my stock holdings in eTrade at the end of the calendar year, primarily to simplify that April's tax returns. Not having to span investment holdings over multiple years makes tabulating my profits or loss the following year that much easier, and also gives me a chance come January to start over with stocks I believe are primed for a big year. (See: My Empty Stock Drawer)

But as has been mentioned here several times, and in every media you prefer to consume, 2008 has been very, very different, and I just couldn't stomach the idea of selling some of the stocks I own at their near-historic lows this time around. While I certainly could use the write-off, instead of clearing the deck as 2008 comes to a close, I am standing pat. Part of me says it's because I'm sure these stocks will eventually rebound, and another part admits it is pure numbness and potentially the equivalent of being in shock. Maybe instead it's post-traumatic stress syndrome.

Of course, holding on to stocks this low doesn't guarantee they won't go even lower. If you had asked me 30, 60 or 90 days ago about some stocks, I'd have remarked they couldn't possibly dip further. But nobody is an expert when it comes to what we are seeing in the financial markets today, and I don't claim to be one at all. I am even lowering my own expectations.

2008 broke a tradition of the financial markets practically making sense, and we're breaking our own tradition as well. We're either going to have a nice bounce in 2009, or we're going down with the ship.

Social Media Advertising: Crossing the Streams

By Eric Berlin of Online Media Cultist (FriendFeed/Twitter)

Can you hear it? That's the sound of social media companies scrambling, hustling, and scraping to find new revenue-generating models to beat back the hounds of this wacky economy.

Most recently, we're starting to see talk of experimenting with the insertion of advertisements into what users normally expect to be ad-free content streams. In movie metaphor terms, it's time to look to Ghostbusters for inspiration.

As we all know, Dr. Peter Venkman (played by the amazing Bill Murray) advised that the streams of the ghostbusting team's Proton Packs were not to be crossed… right up until the end of the movie, when they had run out of ideas in defeating the Stay Puft Marshmallow Man. It was a classic "it's so crazy it just might work" movie moment.

Are some social media companies reaching a similar "crossing the streams" decision point? For instance, Techmeme, the well-known technology news aggregator, has actually employed the practice of inserting "sponsored posts" into its stream of algorithmically generated story and blog post clusters for some time.


Techmeme Interweaves Sponsors' Posts With News
With a clear label of "sponsored post" and a different colored background on what is essentially an "advertorial" ad unit, Techmeme is leading out a new form of online advertising that other social media companies might be looking to adapt.

A story on TechCrunch this week called Digg's Sorry Revenue Stream, And Rumors Of An Experimental Ad Product was illuminating in a number of ways.

Key takeaway:

One experiment Digg is working on, says one source close to the company, is a self service advertising product that will be somewhat similar to Google Adwords, but with a twist. The product would insert advertisements into the Digg news stream (presumably clearly marked). Where those ads end up, and how much an advertiser pays per click, would be based on user feedback.

So users would have the ability to vote on advertisements in the same way they vote on stories. The better ads, as determined by Digg users, will get more prominent placement and a lower cost-per-click.

I think allowing users to vote on ads that they like and have them "bubble up" to the top, social news-style, might be a rather clever addition to the Digg platform. That said, we can imagine that some of Digg's famously rowdy commenters would be incensed at the prospect of any advertising inserted into an area previously set aside for user generated story submissions.

How incensed is hard to say, but we can look at the reception that ad network Magpie received on Twitter to get an indication. To be fair, Magpie is an independent service - it has no formal affiliation with Twitter - that offers to sell "tweets" on Twitter user profiles. So its revenue model aims to cut microbloggers in on revenue, and not Twitter itself. The reaction thus far from the Twitter community has been pretty negative, and indeed signs are that Magpie is gaining very little traction.

That said, it's perhaps doubly interesting that Twitter CEO and co-founder Evan Williams would mention inserting ads into Twitter streams as a potential revenue option during a recent interview. However, he noted that they are "looking into other options." Maybe it'll come down to a "don't cross the streams" decision?

It's worth considering if Internet audiences will be generally more accepting of seeing "sponsored posts" on Techmeme – or indeed inserted into the "blog stream" on well known tech blogs such as Mashable – versus user generated content-driven platforms like Digg and Twitter.

In any event, social media companies are going to be looking for new ways to keep the lights on and servers humming, and that will likely mean seeing more forays into previously ad free content zones.

What's your opinion on crossing the streams?

Read more by Eric Berlin at Online Media Cultist

Fidelity Puts Lipstick On My Investment Pigs

Given the stock market's nonsense, it's a rare person who is happy with their 401k's performance, and I'm no exception. While my return has increased a good 10 percent or so from hitting bottom about a month ago, every dollar put into my Fidelity fund through the year has essentially been turned into sixty cents. With Americans feeling the pinch and looking to preserve cash and stay conservative, Fidelity e-mailed today to say they're changing the name of some of the funds I've been part of. The main change? Removing the word "Aggressive".

As the screenshot below shows, Fidelity is changing the "Fidelity Aggressive International Fund" to "Fidelity International Capital Appreciation Fund" and the "Fidelity Aggressive Growth Fund" to "Fidelity Growth Strategies Fund".


The reason, they write in an e-mail is to "create more consistency across the equity fund product line" although no changes are expected in the funds' objectives, strategy or management, an odd note, considering the Aggressive Growth Fund is down 43.85% this year, and the Aggressive International Fund is down a similar amount.

So... should I feel my money is safer, now that the word "Aggressive" has been replaced with "Capital Appreciation" and "Strategies"? I'm just hoping this isn't the first step, leading from "Aggressive" to "Capital Appreciation" to "Maintaining" to "Losing Slightly" to "Bankruptcy Quickening".

Thanks Fidelity! Good to know my money, or what's left of it, is safe and secure.

Resume Donkey: Don't Donkey Around With Your Resume

By Mike Fruchter of MichaelFruchter.com (Twitter/FriendFeed)

We are living in dire economic times right now. The economy has been crushed, the housing market has tanked and the unemployment rate has skyrocketed. In November alone US employers axed more than 500,000 payroll jobs, the most in 34 years. No job sector is immune, Yahoo recently laid off close to 2,000 people last week. AT&T is cutting 12,000 positions. Sony is planning on laying off 16,000 workers in the oncoming weeks. The picture is not pretty, and surely is expected to get worse. Let's not talk about the big three US automakers, their fate is yet to be determined.

There is no denying it, we are in a recession. While it's going to be that much harder to find a new job in the current market, jobs are scarce but available. Having a polished and professional resume is crucial now more than ever. You are now competing against a much larger applicant pool than ever before. You may have the skills that can pay the bills, but if you have a poorly formatted resume, or it's missing the crucial components that employers are looking for, your chances of getting your foot in the door for an interview are slim at best. Now is not the time to be gambling with your resume. If you are not getting any callbacks, your resume is probably the culprit. It's imperative that it grabs the attention of the person making the hire.

Resume Donkey, an online resume review service that launched today, wants to help you stand out from the crowd. Despite the funny name, they are serious in helping you perfect and get your resume in top notch shape for potential employers. The concept is very simple and straight forward. Resume Donkey provides a thorough and detailed review of your resume, using a team of professional HR representatives, publicists and copywriters to ensure that your employment history is reflected on in an engaging, effective, compelling, and accurate manner.

The difference between a good resume and a great one is making your personal objectives stand out, clearly highlighting your accomplishments, using attention-grabbing phrases, keywords, and actions words, and of course spelling accuracy. This is what Resume Donkey does once they receive your resume. They re-craft your resume by making recommendations, revising the phrasing, revising the wording of your objective/mission/skills etc, and all of the other critical components of your resume. Resume Donkey does not write resumes from scratch, they enhance them and provide the crucial feedback that is needed to get your foot in the front door for an interview.

The reason that I like the service and would use them is simple. I'm currently looking for a new job, and my resume is far from polished. I'm tired of constantly tweaking it and hoping it will work. For someone like me, who recently became unemployed, I cant afford for my resume not to work. I have looked at and compared other resume review services, but they are costly compared to Resume Donkey. Their pricing is very reasonable, especially for someone like me now, who is trying to watch every dollar spent more closely then I ever did.

They charge half what the competition charges, $39.95 for a standard resume review with turnaround in one business week. They also offer an express resume review for $59.95, with turnaround in 48 hours. If you are not happy with the feedback, they will work with you until you are satisfied. If that's not good enough they will refund you back your money. Seriously folks, you have nothing to lose and everything to gain. Try them out and let us know what you think.

Read more by Mike Fruchter at MichaelFruchter.com.

Is Simplicity the Silver Lining?

By Ken Stewart of ChangeForge (Twitter/FriendFeed)

With job losses rising to the highest levels since 1993, an estimated 6.7 percent, or 10.3 million, Americans now find themselves unemployed. In the month of November alone, 533,000 jobs were slashed from payrolls – the worst cuts since 1974. With everyone focused on industry after industry needing government assistance, economists are predicting the unemployment rate to reach a staggering eight percent.

When will it all end?

A more immediate question everyone is asking is, “When will it end?”

The Business Cycle Dating Committee of the National Bureau of Economic Research (NBER), a committee responsible for maintaining records of the start and finish of each recession, deemed the economy began an official decline in December 2007.

That is little surprise to those hit hardest by this recession. Most complain of business being sluggish, while those interviewing for positions that may still be open are quite openly stating, “It’s a tough job market out there.”

What does it all mean?

Friends of mine have lost their jobs, but are finding ways to continue working though not necessarily in their career field. While out, we see shoppers everywhere, restaurant goers enjoying meals, and lots of traffic on the road. So the signals do not necessarily line up, for me at least?

Are we simply adjusting our expectations back to where they should be? Are we simply – well – simplifying?

With everyone busier than ever, a focus on what is important might already be underway. One Nielsen study suggests:

• Parents are busier than they were in the past. Many more are single parents, and two-parent families have seen a dramatic increase in women’s participation in the labor force.
• Total workloads (counting paid jobs and unpaid work at home for both moms and dads) have risen and remain high - parents average up to a 9.5-hour workday every day of the week.
• Despite more hours on average going into paid work, parents’ time with their children has not decreased over the past several decades, and in fact has risen for married mothers and married fathers, and for single mothers for certain kinds of care.
• It is not sleep or free time that has been compressed to enable parents both to work more outside the home and to spend more time with their children - it is housework that has been sacrificed.
• The pattern of increased time spent with children is not only a U.S. phenomenon, but also appears in many countries in Western Europe.

A harsh reality.

It is a harsh reality we live in, with one of the most massive economic “bubbles” bursting in our lifetimes. Whereas the “Dot-Com” bubble mainly impacted the technology sector, this has struck much closer to our homes, and our hearts.

President-elect Obama, promises a stimulus package, but even he predicts things are going to get worse before they get better.

“There are no quick or easy fixes to this crisis, which has been many years in the making, and it's likely to get worse before it gets better," Obama warned.

Perhaps this recession serves as a harsh wake-up call, perhaps this nation’s spending habits were not sound, and perhaps we allowed ourselves to be lulled into a false sense of security, leaving oversight in the hands of those we thought we could trust.

All of this matters little to friends and family left jobless during this holiday season. Reality is a cruel teacher, often times. While we may all long for a return to simpler times, simplicity may not be had for those trying to cope with how to wrap a lump of coal.

---

Ken Stewart’s blog, ChangeForge.com, focuses on the collision between the constantly changing worlds of business and technology. To learn more about Ken, visit his about page. You may also find Ken on FriendFeed, Twitter, and LinkedIn.

---

Introducing Exchange Rates for Blog Comments and Interactions

Editor's Note: Allen Stern and CenterNetworks are not affiliated with this post or the exchange rates table -- yet. The CN logo has been helpfully borrowed.

In May, Mathew Ingram, Fred Wilson and others said that for non-professional bloggers, comments were how they got paid. The interaction and discussion that takes place on blogs, between the author and the consumer, is what most write for - the conversation. But recent tools that let people comment elsewhere, or interact on the original content in other ways has some saying users' actions simply aren't enough. As much of the conversation moves off the original blog, or people are sharing items in Google Reader or hitting "like" in FriendFeed, they are showing interest, but not engaging, causing some to wish for a simpler time when those services didn't allow users to show passive approval.

One of the more outspoken voices on this topic has been Allen Stern of CenterNetworks, who wrote on this blog earlier this month:

"early adopters are screwing early adopter blogs - period. Clicking share on google reader is not like leaving a comment on the source. Clicking like on ff or retweeting on twitter is not the same as leaving a comment on the source. I will have more on this soon as I think that lazyness has slowly ruined what was something beautiful."

And while he and I don't always line up with our beliefs on the same spot in the blog evolution chart, there is no question that some activities do more to encourage the original author and their content than do others.

In that spirit, here is the first attempt at an exchange rate for interacting with blogs. As Allen has been a chief proponent of giving original authors their due, I believe the unit of metric is best labeled as a "CN", in honor of CenterNetworks. It's also no coincidence you could call these "C Notes" or "Comment Notes".

To start, I argue that a comment on the original author's blog post should be counted as "1 CN", to establish a baseline.


Actions that are worth more than 1 CN, depending on one's network size and influence, include:

• Making a comment on the original blog, then blogging about that discussion on your own blog. (10 CN)
  
• Writing a new blog post on the same topic and linking back to the original author as the source. (5 CN)
  
• Submitting the blog post to StumbleUpon with a strong description and good tagging. (3 CN)
  
• Submitting the blog post to Digg, Reddit, or Hacker News. (2 CN)

Actions that are worth between 1/2 CN and 1 CN, depending on one's network size and influence, include:

• Retweeting the item on Twitter. (.8 CN)
  
• Digging an already submitted story. (.6 CN)
  
• Adding a vote on Reddit, Hacker News, or Mixx. (.5 CN)

Actions that are worth less than 1/2 CN, depending on one's network size or influence, include:

• Posting the item natively to FriendFeed. (.4 CN)
  
• Posting the item to Socialmedian or Strands. (.3 CN)
  
• Posting the item to Facebook. (.25 CN)
  
• Adding the item to your Tumblr blog. (.25 CN)
  
• Sharing the item in Google Reader. (.25 CN)
  
• Adding the item to your Delicious. (.2 CN)
  
• Adding a comment on the original item on FriendFeed. (.2 CN)
  
• Liking the item on FriendFeed. (.1 CN)
  
• Adding a comment to a reshare of the item on FriendFeed. (.1 CN)
  
• Liking a reshare of the item on FriendFeed. (.05 CN)
  
• Adding a comment on the item in Shyftr. (.05 CN)
  
• Adding a comment on the item in Facebook. (.05 CN)

These exchange rates show current market valuations, and are subject to change, based on the increase and decrease in popularity of associated networks and the sway of conventional opinion. Rates quoted are valid as of November 23rd, 2008, and were determined by a non-scientific measure of effort, influence and reach of the aforementioned external sites and activities.

As your activity gets further and further away from the original blog post, and the blog post becomes less of the story, but the third-party service gets to be more of the story or the destination, it delivers less perceived value to the original author, be it psychological, social, or in some cases, actually financial. While some of us early adopters are all too happy to expand a blog post's reach through our various social networks, and enjoy the new communities that are built there, it's not surprising that those who are seeing less activity on the original source of their stories are feeling something's amiss. I know that as I've gotten busier, I've taken less time to comment on the many blog posts out there, even as I'm making comments on the various social media sites, and sharing like I always have through Google Reader.

So if you want to show your appreciation to the author of a blog you've found particularly insightful of late, or who has opened your eyes to a new topic, don't just take the easy way out and hit "share" as the item flows through your RSS reader, or hit "like" on your social site, but take the extra time to rise up the CN chart and put some food on that blogger's table by making a comment and engaging. Allen and many others will be happy you did.

Mint.com Says I'll Be Bankrupt In Sixty Days At This Pace

When Mint.com first integrated the tracking of investments alongside bank records and credit cards this May, I was really excited to have a one-stop destination to see all my activity. But now, my weekly e-mails coming from the site are nothing short of a cross between a thrill ride and horror film, as one line stares me in the face: TOTAL. And peeking at the last three weeks' worth of updates shows that if I were to lose the average amount of money I lost each of the last three updates, my net worth would hit zero sometime in January of 2009. (Not on a percentage basis, but on an absolute value basis)

While I don't believe every stock I own will hit zero, and that I will have emptied all of my accounts, taking on more credit card bills than my actual assets, what was once trivial is eye-opening. While many say the smartest thing to do during this trying time is to not look at all, for me it's like a horrible accident on the highway. You can't help but slow down and take a peek. But unlike most of those accidents, there's actually more blood than expected.


My Holdings Are a Complete Disaster this Year (FriendFeed Discussion)
After a mild Spring and Summer that had my investments slightly trending downward, we all know what happened next - a massive cratering that has seen nearly everybody's financial situation turned upside down. 401ks and mutual funds that used to be stable and trusted are actually performing worse than the very worst individual stocks I've picked. One of the funds I am in dropped 24 percent last week, and another fell by more than 17 percent.

In six months, names that used to have the word "Trusted" next to their name are anything but. Fidelity. Citibank. Washington Mutual? Lehman? And yes, we know other companies in the news were less safe - General Motors, Sirius, eTrade itself... but as my own holdings are plummeting, it seems there is no safe place to turn, no "safe" investment to hold the money until things improve, be it in six months, two years, or more. Forget about Web 2.0 companies being shaky. Everybody's shaky.

For me personally, in years past, in the occasional case where I've needed to spend more money than I've had in my Wells Fargo Account, whether it be to pay year-end tithing for church, or to pay taxes, I've always known I can dip into my eTrade account and move money around as a backup. Now, that safety net has been eroded to the point I don't know that I can do that if I need to. I don't believe I'm going bankrupt, whether Mint.com thinks so or not, but unless something changes soon, we're definitely going to be putting off purchases, getting more frugal and settling for something less than we really want a whole lot more often.

And maybe I won't be logging into Mint.com all that often just to prove how bad things are.

Social Median Stares Downturn In the Face By Staying Small

In a sliding economic time, the easy thing to do is to report on the failures of companies, the potential for layoffs, quarterly financial warnings and misses, and reduced valuations. Some entrepreneurs will see the potential for trials and get cold feet, choosing to postpone starting their business. Others might reduce expectations by slowing hires, extending product roadmaps or opting out by merging with a bigger firm. But having learned from the trials of the Web 1.0 boom and crash, Jason Goldberg of Social Median is looking to survive and grow his company through the financial crisis, as long as it takes.

In a post yesterday titled How One Small Scrappy Startup Is Surviving (And Growing) During The Financial Crisis, Jason said keys to survival are to be "(1) small, (2) fast, and (3) listen to users". The team developing Social Median started small and remains small, with software development performed in Pune, India, making them much less expensive than if they were based in the Silicon Valley. Having endured some very public and very visible trials during his time as CEO at Jobster, Goldberg knew, from the beginning, to stay lean and mean.

As we've chronicled here over the last six months, Social Median is growing and becoming an increasingly common source for Web users to find their news and participate with peers. And that's been without the benefit of traditional venture capital. As Jason writes, "One VC asked me a month ago what I would do with $2M. I said I'd take $500k of it, give you back $1.5M, and keep doing exactly what I'm doing."

So his plans going forward are really focused on a single mantra: "Keep it small and focus entirely on the product and delivering features which engage our users."

But, as with Twitter, FriendFeed and others, Social Median is still what companies these days are calling "pre-revenue". Jason even says that "priority #1 is product and users, not revenue." But we shouldn't expect that to be permanent. He says, "Every month -- while we spend very little -- we still are spending and not bringing in revenues to offset the costs..." adding, "If we build a great service that people love and want to use and recommend, revenues will come in time."

So while other companies grew quickly, and are now looking at ways to cut costs to reduce their burn rate as times turn dark, Social Median's plan is to keep churning along and do what they've always done. If they do crash and burn, it's not because they were throwing parties and hiring expensive PR firms or advertising. They're going to be heads-down, working to create a community which has already seen a doubling of page views week over week, and more new registered users in the last week than in the previous four combined. Jason and his team are not scared. Some might say they're foolhardy. But they're not going to be making headlines for cutting staff and scaling back any time soon.

See the full post here:
How One Small Scrappy Startup Is Surviving (And Growing) During The Financial Crisis

As always, you can find me, and my activity, on Social Median, here: http://www.socialmedian.com/louisgray

Podcast: Interview With Talk Social News on Innovation, Startups

Sunday morning, I had the opportunity to participate in a podcast with Wayne Sutton and Kipp Bodnarf for their Talk Social News broadcast. During the discussion, we talked about how the economy could possibly be impacting Web companies, whether or not living in Silicon Valley has its benefits for tech bloggers, how to use multiple social media networks, and to still find time to take care of family and work obligations. The conversation also touched on what could be coming next in terms of social media innovations, and the accumulating pressure to perform as you become more visible. The duo also, less successfully, tried to get me to pick which companies might be in real trouble during a global economy downturn.

As I find it's good practice to listen to podcasts you participated in, to learn from them and do better in the next round, I found myself listening to the Talk Social News recording yesterday, while on the plane from San Jose to Texas, where I am staying through Thursday. Luckily, I still found the discussion interesting as an audience member.

You can download the podcast here or read their recap on their Web site. The interview with me starts about 10 minutes in after Wayne and Kipp do some upfront work.

After you've listened, let me know if you think my opinions were wrong or off base. And we're always looking for feedback. On the next podcast, what do you think I should try and get discussed?

The Valley's Proponents Become Its Critics in Hard Times

Friday's stock market roller coaster was one to remember. With the Dow Jones Industrial Average at one point down more than 500 points early in the session, again, a colleague and I headed to lunch just before noon with the market down more than 400. As we ate, the TV screens alerted us to a market rally that saw the market reverse course, racing beyond the break-even mark to crest at almost 200 points up, only to fall back down to a loss of more than 100. In between bites and conversation, I'd pass along a report: "Down 200. Down 100. Even. Up 50. Up 150. Even again." My latest position in Apple, created just Friday morning, at one point was up 10 percent in the space of hours - making me feel good, if just for a day.

The rise and fall euphoria and despair that we've all seen as the market rises and falls (and falls and falls in recent weeks) is not uncommon. The crowd mentality sees us piling on to negativity when things are bad, and blocking out risks when things are good. But even as things have gotten a lot more tight in our own personal financial accounts and 401ks, banks have gotten wobbly, and credit has gotten unstable, many of the major tenets that saw the Web 2.0 world lauded just a few months ago are still there - namely the ability to start a new company for much less, to attract a solid user base, and reduce burn rates to a level that wouldn't require significant funding. This means that even in times of scarcity, there's room for innovative ideas. And for those companies that already raised sufficient funds, or who have achieved profitability, their major focus should be hitting product milestones and gaining revenue, rather than worrying about keeping the doors open.

With the near extinguishing of companies entering the public markets in the last twelve months, combined with VCs saying funding will be tight going forward, and valuations lighter, the squeeze will be most noticed by companies looking to get the next series of capital, or those who find acquirers won't be offering the big numbers they had hoped. Many companies will be proposing hiring freezes to slow the burn, or letting non-essential people go.

But with that said, the technology advances that have let companies get off the ground for less mean the pressure from VCs and board members to turn thousands into millions and millions into billions is less than it was five years ago, when we saw a similar slowdown. Even Twitter, which has one of the highest profiles of "pre-revenue" companies, has only raised $15 million, a small fraction of the hundreds of millions given to Webvan, Kozmo.com and other high-profile Web 1.0 flameouts. Seesmic, which visibly laid off seven yesterday, also has raised a conservative $12 million or so in two rounds, and Silicon Valley darling, FriendFeed, has only raised $5 million in its initial round.

It has only taken a few months of bad news on Wall Street to see some of the most visible proponents of Web 2.0 startups start to pick on them and demand significant changes. But the calls for a route to revenue and product quality should have been there when times were good, not just now.

Most of today's Web companies don't need staffs of hundreds. They don't need seven-figure marketing budgets. And many are cutting costs on their technology infrastructures by turning to services like Amazon's S3. So the burn rates of years ago have lessened dramatically.

What recessions do is weed out the bad ideas from the good and move timetables. Great ideas continue to be supported and funded. During the last recession, LinkedIn was founded, in 2002. Google went from being a curiosity to a world leader, going public in 2004 after years of slowness for Web companies looking to reach the market. And in 2003, MySpace was started, following Friendster's 2002 debut.

That the economy's struggles will have far-reaching impact is not under dispute. But for Web companies that have been smart about keeping their costs low, and their revenue and profits in sight, they will power through. To prematurely call for their demise and dance on the grave of those that don't survive is not the way to go.

See also:

Dare Obasanjo: TechCrunch Turns Into F-----Company 2.0
The Inquisitr: Paging Chicken Little - The Sky Isn’t Falling

A Recession's Impact: Lower Expectations Across the Board

The stock market is a disaster.

Banks are going under, and massive financial institutions are being bailed out. Companies are announcing hiring freezes and layoffs. And just about everybody has less money now than they did last month, or the one before that. While many of these perceived losses are quantifiable (on paper), more widespread are the losses that cannot be quantified, as people and companies cast off their optimism, and exchange it with a dark reality.

Those of us who made it through the last recession have seen this play out before, and others, a few times as bust follows boom, and back again. This time, the bust just might be deeper, and its impact further felt. I made a handy chart to see how people here in the Silicon Valley might be adjusting their expectations - from personal goals to family, possessions and career. In every aspect, I think it's safe to say that many are choosing door number three.


How a market changes one's goals - in chart form...
(Feel free to reuse the image on your blog)
With all the bad news out there, have you already made some of these choices? I'll likely be keeping my 1998 Mercury Tracer going just a bit longer, and despite the twins, I don't see us moving out any time soon, as demand for housing has cratered. Stocks I held just last week are worth 80 cents on the dollar today, and it could be time to buckle down unless things turn around soon.

Tech Employees' Political Contributions Dramatically Favor Obama

That the San Francisco Bay Area, surrounding Silicon Valley, is left-leaning is no surprise. With rare exceptions, including eBay's Meg Whitman and former HP CEO Carly Fiorina, the majority of tech titans have traditionally leaned in favor of the Democratic Party. Recently, you also saw Google join the fray, joining Democrats in standing against Proposition 8, the California proposition that would restrict marriage to heterosexual couples. This comes despite Republicans' traditional strength in more affluent communities, which certainly describes parts of Silicon Valley. Looking a level deeper, by searching public political donation records, the gap between donations to Republican candidates and Democratic candidates from tech company employees in the 2008 campaign is massive.

Utilizing The Huffington Post's FundRace 2008 site, I looked at many household tech names, from traditional hardware companies like Apple and Cisco to newer online brands, including Facebook and LinkedIn. The list is by no means exhaustive, but provides a starting point, should you choose to do more research. Also, despite The Huffington Post's left-leaning foundation, I do not believe their editorial slant had any impact on the database. In fact, the site says, "All calculations are based on public records filed with the FEC of contributions by all individuals totaling more than $200 (and some totaling less than $200) to a single Republican or Democratic presidential campaign or national committee for the 2004 and 2008 election cycles."

Donations to the 2008 election cycle by prominent tech companies:

---

Employer: Adobe (Donations)
$10,649 was given by people who identified their employer as "Adobe".
$2,900 from 5 people to Republicans
$7,749 from 18 people to Democrats

% of donations going to Democrats from Adobe: 72.7%

---

Employer: Amazon.com (Donations)
$123,703 was given by people who identified their employer as "Amazon.com".
$9,660 from 6 people to Republicans
$114,043 from 132 people to Democrats

% of donations going to Democrats from Amazon.com: 92.2%

---

Employer: America Online OR AOL (Results Combined) (Donations)
$190,220 was given by people who identified their employer as "America Online" or "AOL".
$11,835 from 12 people to Republicans
$178,385 from 110 people to Democrats

% of donations going to Democrats from AOL: 93.8%

---

Employer: Apple (Donations)
$61,817 was given by people who identified their employer as "Apple".
$6,856 from 9 people to Republicans
$54,961 from 73 people to Democrats

% of donations going to Democrats from Apple: 88.9%

---

Employer: Cisco (Donations)
$119,469 was given by people who identified their employer as "Cisco".
$28,975 from 24 people to Republicans
$90,494 from 103 people to Democrats

% of donations going to Democrats from Cisco: 75.7%

---

Employer: Digg (Donations)
$750 was given by people who identified their employer as "Digg".
$0 to Republicans
$750 from 2 people to Democrats

% of donations going to Democrats from Digg: 100%

---

Employer: eBay (Donations)
$68,942 was given by people who identified their employer as "eBay".
$7,565 from 9 people to Republicans
$61,377 from 67 people to Democrats

% of donations going to Democrats from eBay: 89%

---

Employer: Facebook (Donations)
$2,700 was given by people who identified their employer as "Facebook".
$250 from 1 person to Republicans
$2,450 from 4 people to Democrats

% of donations going to Democrats from Facebook: 90.7%

---

Employer: Friendster (Donations)
$563 was given by people who identified their employer as "Friendster".
$0 to Republicans
$563 from 2 people to Democrats

% of donations going to Democrats from Friendster: 100%

---

Employer: Google (Donations)
$474,863 was given by people who identified their employer as "Google".
$51,677 from 42 people to Republicans
$423,186 from 306 people to Democrats

% of donations going to Democrats from Google: 89.1%

---

Employer: HP OR Hewlett Packard (Results Combined) (Donations)
$278,123 was given by people who identified their employer as "HP" or "Hewlett Packard").
$44,586 from 83 people to Republicans
$233,537 from 351 people to Democrats

% of donations going to Democrats from HP: 83.9%

---

Employer: LinkedIn (Donations)
$3,375 was given by people who identified their employer as "LinkedIn".
$0 to Republicans
$3,375 from 4 people to Democrats

% of donations going to Democrats from LinkedIn: 100%

---

Employer: Microsoft (Donations)
$1,195,146 was given by people who identified their employer as "Microsoft".
$247,090 from 180 people to Republicans
$948,056 from 854 people to Democrats

% of donations going to Democrats from Microsoft: 79.3%

---

Employer: Mozilla (Donations)
$750 was given by people who identified their employer as "Mozilla".
$0 to Republicans
$750 from 2 people to Democrats

% of donations going to Democrats from Mozilla: 100%

---

Employer: MySpace (Donations)
$3,989 was given by people who identified their employer as "MySpace".
$0 to Republicans
$3,989 from 5 people to Democrats

% of donations going to Democrats from MySpace: 100%

---

Employer: PayPal (Donations)
$4,502 was given by people who identified their employer as "PayPal".
$1,000 from 2 people to Republicans
$3,502 from 7 people to Democrats

% of donations going to Democrats from PayPal: 77.8%

---

Employer: Sun OR Sun Microsystems (Results Combined) (Donations)
$179,871 was given by people who identified their employer as "Sun".
$30,164 from 37 people to Republicans
$149,707 from 214 people to Democrats

% of donations going to Democrats from Sun: 83.2%

---

Employer: Yahoo! (Donations)
$62,282 was given by people who identified their employer as "Yahoo".
$3,815 from 3 people to Republicans
$58,467 from 69 people to Democrats

% of donations going to Democrats from Yahoo!: 93.9%

---

Employer: YouTube (Donations)
older results
$5,135 was given by people who identified their employer as "YouTube".
$0 to Republicans
$5,135 from 5 people to Democrats

% of donations going to Democrats from YouTube: 100%

---

There's no question this is by no means an exhaustive list of tech companies, but this sample alone shows the overwhelming leanings the employees of these firms have, and where they have opted to put their money in this year's election campaign. Perusing the lists shows not just support for Barack Obama, but additional funds supporting Hillary Clinton's efforts during the primary season. On the Republican side, you also see some occasional support for Mitt Romney and Ron Paul, in addition to John McCain.

All told, of these 19 companies (including eBay's PayPal and Google's YouTube as separate entities), employees are listed as having donated $2,786,849 to the 2008 election cycle, more than $1 million of that coming from Microsoft. Of the nearly $2.8 million from these select companies, more than $2.3 million was donated to Democratic candidates, representing 84% of all donations.

Also of interest, searches for employees at many Web 2.0 companies didn't show any donations, including SmugMug, Twitter, or Technorati. Since I left so many out, feel free to head to the FundRace page and pass along the results you find.

This Financial Scenario Says There Are No Experts

The go-go days of the 1990s stock market, combined with the ease of online brokerages like eTrade, brought the world of Wall Street home for many people who previously saw it as a world outside their own, with high-priced brokers and a busy exchange floor. Along with the debut of CNBC, and the consumerization of financial news, including TheStreet.com and CBS Marketwatch, the potential world of day trading was brought home for millions. While the dotcom crash killed off many people's hopes at retiring rich from behind their computer monitors, most everyone has at least a passing understanding of the stock market, and many see themselves as experts - offering advice to any who will listen, even as we enter what looks like a scenario never seen before in our history, a time that will bring new challenges. Some "tried and true" solutions could work again in this trying time, and others will undoubtedly fail.

Today, after using the same methods I've used in the last seven years following the dotcom crash, I saw my personal portfolio take a hit of almost eight percent in one trading session. I've always typically invested in stocks where I feel I know the companies well, which typically sees me overweighted in the technology sector - Apple included. Of course, Apple took more than its fair share of the dive today, losing almost 20 percent of its value - which didn't help matters.

• To some, today's dive marks yet another milestone in a long, steep drop downward. The word "depression" is even being thrown around.
• To others, today's dive is a buying opportunity, giving you a chance to get stocks for cheap, down ten or twenty percent from where they were just a few short weeks ago.
• To some, buying stocks on the way down constitutes trying to "catch a falling knife", a move fraught with risk.
• To others, buying falling stocks allows them to "average down".

So now, we get advice from all sides. Buy stocks before Congress passes any version of the bailout bill, which is sure to raise stocks. Sell all your stocks and go to cash, as it's the only "safe" place. Get your cash out of the bank and into gold. You name a theory, and it's out there.

After being bitten by holding stocks long term around the beginning of the decade, I changed my methodology, holding stocks for days, or only weeks, tops. While others worried about taxes for short-term sales, I just tried to make a small portfolio larger. Often, this trading has worked, like it did when I bought AIG at $3.10 on September 16th and sold it for $4.84 on September 22nd, or when I bought Sirius Radio for 74 cents and sold it for 95 cents on those same dates. But, many other times, it hasn't, as the expected bump hasn't taken place. My bull-headedness typically sees me holding onto those losers for way too long, until those losses approach the accumulated gains from winning trades. So, despite my experience, I know I'm no expert. And the current market situation is unprecedented.

The fact that so many factors are coming into play at one time means that no single person has all the data. It's not clear who will be bailed out when, how much it will cost, how the presumed crisis will effect consumer or enterprise spending, and how it will change things in the short term or the long term. But it's not too uncommon for people to give advice without qualifications. You can see it when they say "buying on the way down will be profitable in the long run", or "get ready to buy, buy, buy" or that "smart investors (will) clean house and get ready for this amazing buying opportunity". I've seen every single one of these comments just on FriendFeed alone - which in theory wouldn't be where I'd head for investment advice.

The very tenets of what many of us have used to guide our buying and selling should always be in question. Even the concept of making a profit on every single trade is flawed, as it could make sense to sell one lot of shares at a loss to free up cash to make even more on another stock. And while I look at today's portfolio and see a bunch of red, it's not clear if tomorrow will be the beginning of a turn-around, or more of the same. With twins now, and my wife not working, at least this year, the idea would be to accumulate as much cash as I can, to prepare for tomorrow's expenses, but when I see an entire year's college tuition evaporate in a week, it's got me thinking I need to start making new approaches to guide my behavior in a time when nobody has the rule book. This could be a long learning process for all of us.

The Financial Markets' Downturn Hitting Home

When the raging bull markets of the late 90s and early part of this decade ended, they fell with a tremendous thud. With the Web 1.0 boom turning to bust, combined with heightened fears over terrorism and world instability, the idea that one's investments would forever increase was dashed almost overnight. In 2008, we have a situation that's arguably even worse. Housing prices and demand for homes has plummeted. Energy prices are sky high. Financial institutions, having made many bad bets, are declaring bankruptcy and getting government bailouts. And unfortunately, the only near-guaranteed part of trickle-down economics is that the individuals at the bottom always feel the pain - and few are immune, myself included.

I've been lucky enough to hold down the same job from before the first recession through today. I saw Silicon Valley freeways go from being a gridlocked mess to easy driving, and back to a mess again. I saw billboards go from being plastered with dotcom ads to being "Available", only to return with a wider variety of advertising. And I've seen personal investments go from guaranteed profits to nearly pulling it all into cash, and later, getting back in, but trying not to be too exposed.

This ebb and flow is reaching a low point again. The entrance into our complex of condos is littered with "For Sale" signs, and more than one has a note of "Reduced Price", signaling the owner's desperation to move out and move on. Popular area lunchtime restaurants that used to have long lines out the door can now be visited without too much concern for parking. And, yes, my stock portfolios are bleeding out, seemingly getting worse by the day.

I thought I learned from some big losses the last time around, to not be invested in companies I didn't feel I knew very well, and not to hold stocks for a long time. I've become much more of a "flipper" who holds stocks for days or weeks, looking for what could be momentum. And at times, this has worked great. I recently played TiVo stock for a few days, and made enough profit to buy a new fridge we needed. At times, I've played Apple stock around earnings, essentially keeping me in Cupertino gadgets for free. And earlier this year, I even invested in some of the energy stocks, making money on them as the price of gas continued to climb.


eTrade Shows the Q1 Losses Are Keeping Me in the Red
But, despite these wins, right now both my personal portfolio on eTrade and my 401k are pretty hosed. On my 401k, I've lost more than half the money I've added through donations this year. And on eTrade, I've accumulated enough losses in the stocks I'm holding now that the total deficit would essentially represent lost months of work.


The 401k Says My Rate of Return is In the Cellar
Now, we're not bankrupt. And we haven't made any big purchases of late (aside from that fridge). We don't have credit card debt, and we're paying our mortgage. So we're doing quite well, compared to others who have much greater problems.

But there seems to be an air of uncertainty and discontent that comes with having less money than you had just a few months ago, and knowing what you do have isn't going quite as far. It feels like people's fuses are shorter and they're more stressed. And at times like these, it's hard to think what's going to change things. Alternative fuels? A massive change of heart in the stock markets? Probably not. This just could mean we're in the beginning of needing to buckle down, hang on and be even more judicious about what we do with our money, before things get worse.

Blogs' Never-Ending Battle of Page Views vs. Conversation

In a perfect blogging world, the very best writers with the very best content would get the most visitors, page views and subscribers. Every visitor would leave comments, send the links to friends, click through ads, and engage in thoughtful dialog with the author. And authors would be more than happy to pass along credit to other blogs for finding stories early, link to lesser-known voices, and admit when they got things wrong. But, alas, this theoretical utopia doesn't exist, and as a result, there's always a gap between what authors expect from readers and vice versa. And this gap can at times send even the best among us muttering to ourselves or launching into screeds when wronged.

The truth is, if you ask just about any blogger who has been active for a while, they could tell you some of their best posts withered into the dustbin of history, while a quick post that took no thought grabbed completely unexpected attention.

A couple examples on either side were visible this weekend:

On the up side: Adam Ostrow of Mashable posted to Twitter:

"looks like I posted one of my most successful (in terms of traffic ... thanks digg) posts ever on 2 hrs of sleep from Vegas hotel room."

On the down side: Marshall Kirkpatrick of ReadWriteWeb also posted to Twitter:

"omg pageviews are SO low on both of the posts I've put up today. dreadful. must write a big one next. i try to do 1 fabulous thing each day"

Adam and Marshall are among the most visible authors to post to their very popular blogs. ReadWriteWeb and Mashable are professional blogs with a staff of reporters, that rely on ad revenue to make money - making the battle for page views much more important for them than for those of us who look at blogging as a hobby, or at least, not the prime source of income.

Whether they receive a small handful of visits, or thousands per day, it's a rare blogger who doesn't look at their statistics, or at least at broad trends that tell which posts were the most popular, and whether visits are trending up and down. For the better part of the last year, I even took to posting my statistics at the beginning of each month, only recently having chosen not to as some people misinterpreted my goals as being promotional, as the numbers increased over time.

But statistics aren't why I blog. (See: Why Do I Blog? An Introspective Look and What I Believe: My 10 Web and Blogging Expectations for more about that.) For me, I like engaging in conversations about technology, trends, and business, and providing commentary, while learning from smart folks around the Web. That's why it's less important to me whether comments take place here or on Friendfeed and other aggregation services, and that's why you don't typically see me begging for Digg votes.

In fact, the only time I ever made the Digg front page, back in April 2007, was when I noted that Google's Earth Day logo was an homage to global warming. It was a post that took maybe 15 minutes, and got a lot more attention than I ever had anticipated. Since then, the closest I ever got to the Digg front page was when in July, I announced the introduction of TweetDeck. It actually reached the precarious top position of "Upcoming" before dying on the vine.

Knowing one's statistics and caring about writing articles that find an audience aren't bad things at all. Seeing which articles are most-widely read, and which topics spur engagement are often key ways to let your readers guide what you should be covering. But when page views drive ad dollars, and income, the entire foundation of why people blog changes - as blogging moves away from conversations and more toward revenue creation.

Following Marshall's comments on Friday, there was a short discussion on FriendFeed that covered the push-pull of conversations versus page views. After I asked if it was "really about pageviews or about getting a good story and discussion", Marshall answered, "it is about good stories and discussion generally - but pageviews are also important. I do this for a living..." which had Svetlana Gladkova of Profy hoping for a long thread on "blogging for a living vs. blogging for passion", which she saw as core to the debate. The debate wasn't settled.

If all ads on all blogs disappeared tomorrow, cutting off the revenue air supply to professional bloggers, it would be interesting to see how many of them would keep going in their spare time. How many of them would change what they cover, or change the way they write headlines, or link to other peers, once money was removed from the equation, assuming they kept writing? Tom Foremski of Silicon Valley Watcher, in a Monday article, quoted Gabe Rivera of Techmeme as saying that in today's competitive landscape where page views are king, that sites like "Techcrunch and the others used to link to each other and now they don't--they only link if they have to." Linking is part of the conversation, something we talked about at some length this time last year, when I said Internal Linking On Some Tech Blogs Is Out of Control.

It seems the only way to take page views out of the equation, and reduce the number of Shouts I get from Digg on a daily basis from authors trying to promote their own blogs' articles, would be to find ways to compensate writers that are not linked to advertising. But trends seem to be going in the opposite direction. Gawker Media has famously offered to pay reporters by the page view, a practice that came under fire from many corners of the Web, but continues, even as those who question the landscape are some of its biggest practitioners. In fact, back in 2006, ReadWriteWeb's Richard MacManus, in an article called Page Views 2.0, wrote, "It's funny that this page views model is at its foundation almost identical to the Dot Com days (bubble 1.0). Drive as many users to your site as humanly possible."

We all know how the Dot Com days and bubble 1.0 ended. We've already debated whether ads and blogs are a good mix. But the idea that conversations and commentary can trump the importance of the almighty page view looks to be losing out. It's no wonder that blogs looking to keep their costs low in a time when users are clicking on ads a lot less than they had hoped are often hiring inexperienced, inexpensive, young journalists looking to take a bite out of old media.

I know I couldn't quit my day job and try to make money from blogging, and I wouldn't want to be a slave to the page view. But for those who lay awake at night designing Google AdWords copy and trying to think of the next big headline that will take Reddit, Digg and Yahoo! Buzz by storm, sending a swarm of readers that send page views through the roof, I wonder if they miss the simpler time when they could write more for themselves and engage with their readers to share a story and ideas, before feeling pushed to get their next article out the door in an assembly line of online copy or finding themselves redesigning the site to optimize for page views and increased ad displays. That's worth having a conversation about.

DISCLOSURE: In addition to his work at Mashable, Adam Ostrow is also the CEO of ReadBurner, where I am an advisor, and hold a small equity position.

The iPhone App Store Should Let You Try Before You Buy

With only a few exceptions, it's been universally accepted that Apple's move to sell iPhone applications on its iTunes store is an unqualified success. In fact, it's widely believed that Microsoft will soon follow suit, offering a centralized place to acquire and download applications for Windows Mobile. But in speaking with other iPhone users, I've heard concerns voiced that there is no way to use an application on a trial basis. We know Apple has the capability to use DRM to limit the amount of time a customer can rent a movie, so why not use the same technology to let users try apps for days or weeks?

Software developers outside the world of the iPhone have a number of ways to try and gain compensation for their work. Some give it away via freeware. Others use what's called donationware, which essentially means the product is free, but they provide a way for you to donate money, should you want to. Even more popular is shareware, which has a listed price, but lets you download it for free, and pay later, often limited to a number of users, or through repeat annoyances that make you want to upgrade. And, of course, you have software that's only available at full price, or in retail packages.

But so far, Apple's iPhone App Store only offers two options - free, and paid. And if you've paid for a premium application, and it turns out you don't like it, tough luck.

Practically the only way an application developer can offer users a way to "try before they buy" is to offer a free "lite" version on the iTunes App Store in addition to a premium version. Customers who want the additional features of the paid application would try the lite version and then buy a second, parallel, application, and need to delete the old.

This inflexibility is unnecessary given Apple's experience with setting DRM to give users a limit to how many times they can burn playlists to CDs and how long they have to watch movies rented from iTunes. Given that a text description and small pictures displayed on the iTunes store isn't always a great representation of the user's experience with the software app, it makes sense for the company to work with developers to offer time or use-based limits to software, which would first be free and later prompt to be paid for. The ability to try applications before buying them wold reduce consumers' concerns and still offer developers a way to make a return on their investment. DRM doesn't always have to be bad - it can help both users and content creators.

If You Look Hard Enough, Conflicts of Interest Are Everywhere

Cyndy Aleo-Carreira, contributing editor at The Industry Standard and professional guest poster in a number of Web sites, including this blog and Duncan Riley's The Inquisitr, has a great discussion starter this evening on bloggers and their conflicts of interest. The piece, titled Out of the Navels and Into the Mirrors, asks specifically if bloggers should talk about companies where they have a financial investment, any kind of part-time or full-time role, or if they should become friends with those they cover. Though broad, her questions likely resonate with many of us involved in blogging and reporting in general, and it's very likely you'll find a wide array of answers, depending who is polled. But each of us comes in with specific likes and dislikes, or personal history, which impacts everything we do, and displays our underlying bias, financial or not.

First, she asks, "Should bloggers cover companies they invest in?"

I almost immediately want to say no. But in actuality, investors in a company usually know it very well, especially if it's an early-stage situation, where they will know it better than the general public. It's no secret they'll likely be more positive on the company, but if they're fair and disclose the relationship, you may learn a great deal.

Good examples of people who talk about companies they are invested in include Fred Wilson of AVC, and Mark Cuban of Blog Maverick.

Second, she asks, "Should bloggers continue blogging once they join boards, take day-job positions with a company, or start/buy a company?"

Again, disclosure is needed. There are many official company blogs that are written by employees, openly. There are other blogs, like Mini-Microsoft, written anonymously, by an employee who is not an approved representative of the company who has unique insight as a full-time employee.

In a more close to home case, Adam Ostrow, CEO of ReadBurner, stopped blogging about ReadBurner on Mashable when he helped acquired the site. (See also: Did ReadBurner Acquisition Cause Conflict of Interest for Mashable?) When I joined the team to help as an advisor, I spelled out my hope to be transparent, and will disclose the role any time I get close to talking about the space.

Finally, she asks, "Should bloggers make friends with people from the companies they cover?"

I think this is absolutely human nature. I have a tendency to be positive on this blog. I talk about companies I like, services I use, and others I have big hopes for. In the process of investigating these services, often I trade a lot e-mails and phone calls with entrepreneurs, which can get to knowing them well or considering them friends. Most of the time, it's not the same kind of friend you can watch a baseball game with or catch a movie, but you do end up rooting for them and may at times gloss over some bugs in hopes they'll suceeed. (See also: My Double Standard for Web Services and Does Negativity Deliver Credibility? If So, That's Nuts.)

Being friendly can lead to a more collaborative environment, where you can both get information early, but also lend a helping hand to those who need it. I've never shied away from playing an informal QA role for services that need aid, and I want to instill a level of trust with those I do engage so they know they can trust me with confidential data.

Beyond these questions, my biases are everywhere, and they impact how I write and my opinions, which do show up. I happen to prefer Apple Mac OS X to Windows, even with the occasional glitch that impacts my Apple experience. I happen to be LDS and wasn't too excited about the rumors spread last week. I like sports, I tend to think Cal is better than Stanford at just about everything, even when it's clear I'm wrong, and I do have friends in the blogosphere - some of whom I've done podcasts with or traded e-mails with or phone calls. I will link to them more often, I will interact with them on social sites more often, and I will comment on their posts more often. (Cyndy and Duncan included)

On rare occasions, interactions with people behind services also results in free stuff, which for some, could lead to bias. I have free t-shirts from Disqus, FriendFeed, and Browzmi, for instance, all which came after I wrote about them a few times. I have a world-famous CenterNetworks sticker, and my babies have schwag from ReadBurner, Shyftr, NewsCred and other places (largely because I asked for it). I also represent standard demographics. I'm male in my early 30s. I live in California, in the Bay Area specifically. I work in the tech sector for a private company, and have since 1998. I have two young kids. Each of these things impacts my view of the world and what I like or don't like.

Rather than setting hard and fast rules about bloggers going out of their way to avoid topics they likely know well, or asking them to be friendless automatons, we should ask them to be more transparent and clear if they are acting with real bias. It's that which will make the difference between trusted and untrustworthy - and enable bloggers to look in the mirrors comfortably again.

Specialized Perceived Value Trumps Real World Value

If you've attended college, or at least know somebody who has, you know that students are willing to pay hundreds of dollars a term for some of the most mind-numbing texts alive. Students will wait in line for hours, or go store to store to acquire these textbooks, which might only be available in one location, knowing that to not pay these exorbitant prices and, therefore, miss out on the texts, could lead to lower marks, and potentially, decreased success in school and just maybe post-school, could be disastrous.

But these same books, worth hundreds of dollars to an individual, are worth absolutely nothing to me. You couldn't get me to take those blasted tomes for free - because to me, they have no value. They would clutter up my house, and I'd probably never open them up. (Of course, I didn't open most of them in college, and that's a different story.)

Outside of the world of publicly traded companies and market caps, the value of a service is very much like these same textbooks. What might have ultimate value to one person may have no value to another.

Just imagine dropping off iPhones in the Amazonian jungle or Sub-Saharan Africa, where 3G is a lot less important than three meals a day. Think about the plans of the last few decades of delivering one computer per classroom, when class capacities were ballooning to nearly forty students. After a while, it's clear, there's a gap between one person's perceived value, and that item's actual value. The same, is of course true with online services.

Ever try to explain social media or social networking services to people who don't rapidly take to putting their lives online? It's a tough road, especially if they don't have friends who use those services, and see keeping their online life updated as a significant time sink. But to someone who is fully engaged and has thousands of followers or friends at some of the popular services, even minutes of downtime are alarming.

Students who buy these overpriced, one time use only textbooks, and actually read them, are doing so with the expectation that their future lives will be bettered through investment today.

Similarly, I believe that taking the time to blog, or read RSS feeds, and engage with peers on Twitter or FriendFeed or SocialMedian can improve my experience today and tomorrow. Through these services, I've learned new things, I've shared ideas, and helped others. I've found new friends and peers.

It's not always clear how investment of time and energy in social media will benefit you in the long run. As Robert Seidman mentioned in a post here over the weekend, activity on social media landed friend Hutch Carpenter a new job. And since engaging on this blog, I've started receiving a good number of opportunities to meet interesting people, to speak at or attend conferences, and to help contribute to some cutting-edge services.

This weekend, I walked my mother through some of the services I use, and while there was some interest, most of the response was "why would I do that?" or "how would I find other friends who use these things?" Not every service is built for every individual. It's likely the Facebook application developers who are finding themselves snapped up for nine-figure sums would never have gained traction with a significant portion of the market, who saw their products had no value. It's likely many of the services I use every day won't be seen as having value to others. But the important thing is that to some portion of the population, they are crucial. The game is finding out which part of the population it is, and working to make that target larger.

Is There Less Funding Or Are Startups Just Cheaper?

By Rob Diana of Regular Geek (Twitter/FriendFeed)


As an early adopter, I have an interest in startups. As a software developer and a developer of Web sites and services, I have additional interest in funding and the whole entrepreneur idea. Because of this, I tend to read a few "business" blogs as well as the usual technical fare. One of these blogs is A VC. Recently, Fred Wilson started writing a series of posts on the venture fund economics that is amazing. If you are trying your hand at a startup, I highly recommend you start looking at these posts. Just getting a fundamental understanding of the VC process is helpful in determining whether VC funding is worthwhile to your startup. In his Venture Fund Economics post he concludes with a very interesting point:

Some will read this and suggest that our business is all about swinging for the fences. But I don't think so. There are hitters in baseball, the best hitters in fact, that hit balls out of the park when they are just trying to make good contact. That's how you have to do it in the venture business. You try to make 20 great investments and you work with them closely in hopes that four years in you have six or seven that have home run potential, and after ten years, you maybe hit one or two out of the park. If you try to hit every one out of the park day one, you'll strike out way too much and the fund won't work out very well.

I think this logic can also be applied to startups in general. If you always try to do something that will turn out to be a home run, you will strike out too much. In the technology world, a home run would be a Google competitor, an iPhone competitor or even a Facebook competitor.

So, what if you are just trying to make contact? We have already heard in various places that venture funding is hard to get in general, and even harder in today's economy. Is this discouraging startups? Or are the startups focusing on the "major" technical hub cities? Paul Kedrosky must have been thinking this recently when he found that California is not a big entrepreneur state. Granted this is just an analysis using Google Insights for Search, but it does yield some interesting information. I was not enamored with the search terms that Paul used, so I tried a different set (entrepreneur, startup, venture capital and funding) and found some really interesting results.


Google Insight: Entrepreneur, Startup, Venture Capital and Funding
Interestingly enough, entrepreneur is not a big search term compare to startup or funding. Initially I thought this could be due to the generic nature of these terms, but the locations tend to match up with significant technical presences. As you can see from the chart, there is an obvious downward trend for all of the search terms. We can assume that this is due to the economy because if you read TechCrunch, Mashable or ReadWriteWeb, you will see plenty of Web sites getting initial startup coverage. In any economy like the one we are in currently, investments suffer and people invest less. Therefore it is likely that venture capitalists are being much more careful regarding what they invest in. Many people wanting to be an entrepreneur are probably taking less risks as well. So, we could be seeing a rise in startups being a weekend job until revenue or major funding becomes a reality.

However, some of these startups do require some significant money in order to operate on a daily basis because cloud computing is not free. Are people getting more angel funding? Following the same logic as the entrepreneur search, I compared the search terms angel investor and angel funding.


Google Insight: Angel Investor and Angel Funding
Here you can see that angel investor and funding have flat or slightly rising trends. Again there is a definite relation to the major technical locations and the "interest" of searches. Given the trend lines for the "angel" search terms and the comparison to the previously explained trends, it does look like there is more interest in angel funding.

Why would we be seeing this difference in trends, besides the economy? Well, many of the newer web services do not require major hardware infrastructure in order to get started. Cloud computing and even cheap hosting make the hardware investment something that can be put off until there is a true need. Using the cloud is also very cost effective initially because you do not need to hire a server or network administrator. This is all handled for you by the cloud provider. The cloud also gives you the ability to handle spikes in traffic signifcantly better than with a traditional hosting provider. Given these reduced costs, a good round of $100,000 of angel financing could fund a startup for two years. At that point, there could be real revenue being generated or even a venture captial funding round. Money is easier to raise when you are a somewhat proven startup compared to when you first start and only have a few thousand page views per month.

It looks like the combination of the economy, cloud computing and the generally lower technical barrier for new services is creating a new environment for startups. People are finding cheaper ways to get started. Startups are also using the existing information on the web to define more interesting services. So, what is coming next and where do we go from here?

Stupid eTrade, Are You Trying to Bankrupt Me?

I've been a loyal eTrade customer since February of 2000, and during the height of their instabilities last fall, I actually went against the grain, moving my checking account to the service, away from Wells Fargo, and even flipping their stock a few times for short-term sales when many thought they were headed to zero. But that's not to say the relationship is perfect. Over the years, there have been occasional annoyances, and today, errors on their part make it look like I'm about to file for Chapter 11.

This morning, Rackspace went public, the first technology company to IPO in quite some time in what's been a quiet year. And while, so far, their debut hasn't been all that amazing, I did manage to get some shares through gaining early access via my eTrade account, a usual sign that the stock would be headed down and not up, given my spotty track record.

(See also: Top Eight Worst Stock Moves I Ever Made)

But the fact Rackspace hasn't gone through the roof isn't the issue. The bigger issue is that prior to 5 a.m. this morning, I not only received confirmation from eTrade that my bid was accepted, but I received confirmation six times in the space of two minutes. And checking in with my account online, eTrade, despite only allocating to me the shares I had requested, actually looks like it withdrew the total amount of the stock buy for each confirmation. This means that instead of being cash-positive in my brokerage account, I show a deficit of more than $36,000.


eTrade Confirmed I Received Shares. And Again. And Again!
While I tend to believe this will be sorted out without any intervention on my part, I'm sure that this "glitch" will impact my ability to make trades if I wanted to. Not only is the actual cash I believe I should have unavailable, but if I sold other stocks in the account, I wouldn't have that cash available for different trades, as it would undoubtedly look like it was being used to pay down my debt.


eTrade Tells Me I Owe Them Some Serious Dough
eTrade doesn't get to participate in IPOs all that often, and it looks like they haven't quite gotten the process down. I just hope I don't start getting notice after notice that my account is "on margin" or that I get locked out. It's happened before due to stupid clerical errors like this, and I'm not interested in playing that game again. So eTrade, please get your act together and give me my money back. Thanks!

AssetBar Launches Fanflow for Premium Messaging and Content

One of the major issues hindering the growth of many Web services today is that users are not willing to pay. We don't want to pay for using their service, we don't want to pay for content, and we usually don't want to see or click through ads. Yet, free services, like Twitter, Google Reader, or any other Web activity aggregator have a cost of creating an infrastructure to support user growth. The more popular the service, the more expensive it can be to develop and deploy the underlying technology. And if they don't get it right, outages and slowness are inevitable, as we've seen many times.

So, how can this be solved? Is it possible to try and make money from a Web microblogging and messaging service, when everyone else out there is giving away the store for free? AssetBar is working to find out.


AssetBar first reached my radar about nine months ago, when they were in the process of developing a next-generation RSS feed reader, with all the bells and whistles thought needed to compete with Google Reader. But in the months they worked to release their initial product, a rising number of external services became hooked into Google Reader shared link blogs, and other social aggregation sites, like FriendFeed, debuted, making their social RSS feed reading experience less differentiated and less appealing. Combined with some slowness and an unpolished GUI, the product didn't take off, despite early promise, and it was officially closed last week, even for the small handful of us who kept checking in.

But through this fast failure, the team learned a few things, including the need to build an infrastructure that could scale, and the need, especially, to monetize. And they think they've found a way to monetize content and microblogging, with a service called Fanflow.

Fanflow lets anybody who believes their content has value sell it directly to those who would like to subscribe. Fanflow lets people sell anything, from pictures, to messages, videos, or even MP3s and PDFs directly to paying users, while also maintaining access controls. In its first iteration, Fanflow is targeting those who have "fans", who are willing to pay a premium for content directly from the originator, be they celebrities, sports personalities, or musicians.


As they write in their launch post, The Profit Equation of Twitter-style Messages, today's Twitter users are focused on sending status updates, but their content has not yet been monetized, as Apple has done with iTunes. Fanflow is aiming to separate free messaging from premium messaging, and helping to create an opt-in "fan club" that brings fans together and lets them share and discuss the content with other fans.

Are they on to something? They certainly talk a big game, and they've already got paying customers. As their initial post says:

"Bringing payments and commerce to twitter-style messaging is too large to ignore. You just can’t have mobile + web this close together and ignore the great potent for fans and stars with lightweight commerce. There’s zero doubt that a secure commerce solution would enhance the value of Twitter and chart a path to profitability."

Their first test site is a comic strip called Achewood, which has been running on AssetBar's engine for more than a year.

As creator Israel LHeureux wrote me yesterday, there is a market for paid services over a Twitter-like engine. He writes:

"We started selling premium twitter-style messages a few hours ago, and our first customer literally signed up and paid for a 3 month subscription 2 minutes after we posted the banner... it feels SO FANTASTIC to be able to help fans and stars make some money, and help them connect in new ways."

Assetbar is looking to do more than become a micro-payments engine for Twitter-like services. They talked about being a proxy for Twitter back in February, and their initial attempt at a feed reader amassed 20 million unique assets from 100,000 publishers, but as they write, they're "bored of free", and want to turn the Web on its ear, from relying on cost centers, instead developing a way to leverage their infrastructure and make a digital sales system for anybody making content to make money. And they're not afraid. As they wrote, "It would be a shame to not take a shot at this beast and try for something better than free. I would rather try–and fail hard– than to not try."

We'll be watching.

Crowdsource Software Payments to Reward Alert Developers

Not all software is free, and not all of it should be. Unless you are the type who can break out your C and Python manuals with ease, the time may come where you have an idea for a great application, and you're going to need someone else to do it. Why not leverage others who have the same need, and combine to provide a bounty, by which, if your solution is delivered to satisfaction, the developer or developers can reap the rewards directly from the end-users who will benefit from their product?

As a visible, active, FriendFeed user, I grew jealous by the success WordPress bloggers were having with Glenn Saven's nifty plug-in to show if items had received comments or "likes" from the popular social lifestreaming service. He had single-handedly developed a tool to unify conversations from disparate sources in an elegant way. But, for me, a long-time Blogger user, I was basically faced with a rock and a hard place. Migrate to WordPress, or keep my conversations separate.


This clearly wouldn't do. So, on May 25th, I said I needed a solution, writing:

Needed: FriendFeed Comments + Likes for Blogger (Old and New)

Thomas Hawk and I need your help. The WordPress bloggers are having way too much fun with getting FriendFeed likes and comments into their blog, and we using Blogger (both the old or new) can't yet do it. I am offering a $250 bounty to the developer of a solution good enough I can integrate into my blog. This would not replace Disqus, but go alongside it, as seen at the Inquisitr. Thomas and others, feel free to add to the bounty...

As much as the WordPress advocates wanted me to just switch blogging platforms (and I respect their views), I was looking for somebody to develop a solution that could help other FriendFeed users in the same predicament I was. After all, what was more likely? That you would see a lot of people make an exodus to a new platform for want of a widget, or that many people on Blogger would find the FriendFeed widget useful? I was willing to pay $250 to make this happen, and I wanted others to pay as well.

By June 16th, Pat Hawks had a solution worth paying money for, and Thomas Hawk agreed. He wrote, "I'm good for a match."


In the space of less than 30 days, I had helped spur an alert developer to create a fantastic solution which I have in place today, and one that continues to improve. Pat, for his efforts, not only gained at least the $500 from Thomas and me, but now has a great deal more awareness and respect across the FriendFeed community and the blogosphere at large. I bet that with platforms like FriendFeed, Twitter and others having direct, immediate, connections to people on the "demand" and "supply" side of the fence, this won't be the last time you see a crowdsourced method for getting software developed.


I am all too happy to give Pat $250, and I'm headed to PayPal now. In this age when you have developers trying to compete with free software and Web services, why not encourage them to build something that you would use, and offer them real cash? If you get enough friends together, you could end up with a serious code competition on your hands.

See also: WinExtra: Crowdsourcing a tech interview

Mint's Latest Additions Make It My One Stop Financial Hub

For years, I've manually edited a custom portfolio in Yahoo! Finance in an attempt to track all my financial details in a single place. That meant copying and pasting trade details from eTrade and checking in with Fidelity every two weeks to get an update from my 401k. But even then, it wouldn't have bank data from Wells Fargo, or credit card debts, so I haven't had a perfect picture on a single page - until now. With the addition of investment tracking capabilities at the end of April, Mint has now morphed from a simple curiosity to becoming my long sought after single point for financial details.

Mint came to my attention last year, like it did for many people, when it won the best presenting company award at the inaugural TechCrunch40 event.

While some have said storing financial login data on a 3rd party site makes them nervous, I've always erred on the side of trusting the Web, and I registered right away. But site slowness, and Mint's initially not offering support for my investment accounts at eTrade and Fidelity meant it wasn't all that useful for me. I wasn't interested in following their little tips on how to save a few bucks here and there by switching my bank or credit cards, so I largely left my account dormant.

But now, Mint shows me everything in one place. After synchronizing my Checking and Savings accounts, my investments and my credit cards, I now get a perfect picture of available funds. And Mint, having more than 200 days history of my activity since I first signed up, also has some educated guesses on where I spend my money most frequently, trends on whether I'm spending more than others in my geographic area, and even records of which vendors.

Now, according to Mint, I can see I've spent $155 on iTunes since October 1st of last year, in 16 different purchases, I've spent $798 at Safeway in 9 tracked purchases, and $332 at Chevron in the same number of visits. Of course, with more than 1/3 of my spending being marked as "No Category", I have some work to do to get the data even better, and there are some amusing bugs, like the one showing I've spent $6,891 at "Louis Shoe Shop", in four transactions. My guess is that's supposed to be where I've made credit card payments, and I have no idea why it's called "Louis Shoe Shop". Are they confusing me with Imelda Marcos?


One month's financial tracking within Mint.
Regardless of those rare oddities, the simple fact that Mint shows me all my activity in one place means that I don't have to go to each of the individual financial sites to get my data. On occasion in the past, I've gotten hit with late fees on my credit card just because I had forgotten to log in before the bills were due. Now, if I can just log in to Mint instead, I can not only see when money comes in, but when money needs to go out. And I'm done messing around with Yahoo! Finance, manually entering owned shares data and estimated per share costs. Now, Mint does all the hard work for me. It's the way Web finance tracking was supposed to be.

Most Bloggers Don't Deserve Any Ad Revenue

It's routinely shocking to me that so many bloggers think they should try and make a profit from their Web site.

Urged on by the success of mega blog networks like TechCrunch and spurred forward by stories from ProBlogger, or corner cases like Dooce.com, Daily Kos and others, an inordinate amount of people are hoisting ads on their blogs, from Google AdSense, from AdBrite or Federated Media, in the hope of turning their daily rantings into big dollars that could possibly change their life. It's no surprise that blogging for many has the shiny look of a "get rich quick" scheme, when actuality is far different.

Their hopes are misguided, and for most, a serious reality adjustment is needed.

(Also: The Web Advertising Bubble Has Got to Pop, Advertising for Bloggers Has to Change)

Why and Where Do Advertisers Advertise?

Advertisers post ads where their potential customers may be lurking. If the demographic you serve doesn't match the demographic the advertiser is looking for, then it doesn't do either of you any good to hustle for leads that won't close.

Advertisers are looking for high traffic areas so their ads can be seen by a wide audience, giving them the highest number of impressions and potential for brand recognition.

Advertisers will pay a premium, be it cost per impression, cost per click or cost per conversion for those sites that can bring the highest quality customer, often found on sites that offer significant differentiation, whether that be popularity, reputation, quality of content, or ownership of a specific niche that nobody else has covered.

Where Bloggers Are Going At it Wrong

Most sites are not big enough, traffic-wise, to generate significant revenue. Assuming a mid-size blog gets about 1,000 unique visitors per day, and an ad delivers 1 cent per impression, you're only talking ten dollars a day. If you're instead getting 25 cents for a click-through, you would need 4 percent of your visitors to click on an ad to achieve that same ten bucks. And advertising click through rates are usually in the low tenths of a percent, let alone full percents, so most numbers would actually be much less than this. Even if you move any of the dials up by a factor of ten, you're not talking about life-changing money. The Web is full of stories around bloggers who took months to get their first $100 check from Google, the barrier for payment.

Most sites don't have real significant differentiation interesting to an advertiser. If you look in the tech world, just how many tech bloggers do we really need? How many of them are breaking stories or offering a unique angle for a unique audience that nobody would serve if they completely pulled up stakes and disappeared? Not too many. With the exception of about the top five or ten blog networks, no tech blog offers enough of a pull that an advertiser would consider them a must to invest with. And even among the top networks, the rush to publish is becoming silly to watch, as my RSS feed reader will fill up with near-identical stories, usually written by people who haven't done any original reporting beyond reading a press release, other blogs, or listening to a financial earnings call, if they're really serious. (See the graphic on today's acquisition of FareCast by Microsoft, for example)

On the E-Consultancy Web site, this issue is bluntly addressed:
"Most bloggers don't make a cent from blogging and the global demand for mostly poorly-written blogs about technology news pales in comparison to the global demand for music."

Yet, some bloggers act as if it's their God-given right to write, post a few ads and start raking in cash. In my opinion, content is absolutely cheap. It costs nothing, except time, to put text on paper or computer screen. In the world of journalism, finding willing reporters for newspapers hasn't really been much of a problem. Instead, there's a dearth of readers, and advertisers, which the Web has helped accelerate, as paper circulations dive and reporters are laid off. And while Google is reporting great earnings, the same rules will hold true online. Bloggers are a dime a dozen in most cases. Those that offer non-unique blogs without significant audience or differentiation might as well not exist as far as ads are concerned. Delivering more posts per day won't fix that. Following the big, successful networks won't do that. Spamming and trackback abuse won't fix that.

Services Offer Real Value, Bloggers Don't

Sometimes bloggers on the periphery of an industry get jealousy over seeing the dollars thrown around from mergers and acquisitions, or funding. It is human nature to see when a service might be bought for millions, that fans of the service or bloggers covering it feel they are entitled to a "share". But Web services like Facebook, Digg, or TechMeme are in themselves destination sites that are sticky, pulling in consistent viewers and repeat visits, made even better when these sites have personal, demographic information that helps tailor ads and messaging. These Web services are adding real value to the Web by changing the way we interact and communicate. Bloggers, myself included, are not. We are more like consumers than producers in this case, and the last time I checked, consumers pay, they don't get paid, no matter how excited we might be about a product.

The Focus Must Be Away from Ads

In a recent discussion on this topic, a blogging peer of mine said, "What's "fair" to me is making enough to cover hosting costs and buy myself some toys every once in a while. I do that, which is enough. But if I couldn't even cover hosting costs, I'd stop blogging."

And to me, I don't possibly see how the word "fair" can come into play. As bloggers, the ad industry, and our readers, truly owe us nothing. If we have opted to start writing, it is on our own choice. What we write about? Again, our choice. Where we opt to be hosted? Usually our choice. Our page layouts? Our choice. Our blogging platform or schedule? Our choice. So how does "fair" come into it? The goals must be somewhere else, whatever they may be for the individual, be it a hobby, setting up for the "next" job, continued writing practice, or enjoying the community.

There are millions of bloggers out there today, screaming for their "fair" share of the advertising pie. And while Google rakes in cash from vendors by the billions, some smaller bloggers are crying foul at the perceived inequalities. But it's more likely they are getting exactly what they deserve when it comes to ads - pennies. They would be better served to pull the ads off their site altogether and find different ways to make money, because for most, blogging will never get them what they want.

February 29th's Leap Day Robs Us All

The idea of February 29th is a cute concept in some ways. It's quadrennial appearance has notoriety, and is a date often targeted by expectant mothers and fathers who think they can keep their children artificially young, by limiting the number of birthdays over their lifetime. But if you think about it, if you're a salaried employee, the very fact we have a February 29th this year means your employer gets this day for free. In fact, every single paycheck you get this year is less because of February 29th, and they never even asked your permission to dock your pay!

What do I mean by this? Well, in 2007, we had 365 days, in 2008, we have 366, and next year, we will have 365. Yet you're paid the same this year, if you're on salary, even though you put in the extra effort!

To make the math easy, let's pretend your salary is such that you take home exactly $73,000 a year. Under this scenario, in 2007, you would take home $200.00 even per day, but in 2008, for the same amount of work, you'd only be taking home $199.45. And those 55 cents can add up. Over the 366-day calendar, your employer has taken away a full day's pay from you. If instead you take home $109,500, that number jumps to $300 in lost pay for similar productivity! (See below chart)


Over time, a few cents a day starts to add up...
And you can see this in every single one of your paychecks. If you get paid over a 14-day pay period, at the $73,000 rate noted above, you would see only $2,792.30 coming home every two weeks, instead of the $2,800.00 you would have received in either 2007 or 2009. That's messed up, right? You think we want to be reminded 26 times this year that employers worldwide have asked us to come into the office and work for free?

I propose that from now on, all salaried employees should have the option of taking February 29th off. After all, if we aren't getting paid, why show up?

My Empty Stock Drawer

At the end of the calendar year, we have a little tradition when it comes to the stock market. Sell everything, and go completely into cash as the calendar switches from December 31 and starts again with January 1st. This year was no exception.

The reason behind my annual sell-off isn't the result of some chart-reading that tells me the market usually takes early January off (though sometimes it does). It also isn't because I have an innate need for a challenge, and see the move as starting the new year from scratch. Instead, it's simply that I do my own taxes every year, and don't want the hassle of tracking down individual trades that bridge a calendar year.

By making sure all my stock trades both begin and end in the same year, Intuit's TurboTax service can easily tabulate the gains and losses for each trade, and doesn't force me to dig through my eTrade records to see when a particular stock was purchased. Also, as I often buy and sell a single stock symbol multiple times in a year, I'm not left scratching my head and guessing where I should appropriately report I paid commissions. After all, if I have confusion, it's likely someone in the IRS will have confusion too, and might later ask me to clarify... leading to pain.

Clearing out my stock drawer (so to speak) also helps clarify what went well and what didn't over the year. There's no ambiguity as to whether one trade hasn't panned out yet or not.

So how'd we do?

Index	Q1	Q2	Q3	Q4
Me	+2%	+4%	+8%	+35%
NASDAQ	+<1%	+8%	+4%	-2%

That looks pretty good on its face. We were up more than 50% on the year. But if I dig deeper, it's clear I could have done significantly better if I completely ditched my quick trade strategy and had instead put all my money into Apple and slept on it.

Index	Q1	Q2	Q3	Q4
Me	+2%	+4%	+8%	+35%
AAPL	+8%	+31%	+26%	+29%

Being such an Apple guy, you'd think I'd have done the right thing, the smart thing, and given all I had to Cupertino. But I didn't. And while others have no doubt made out like bandits, I've ended up looking pretty silly, as the Mac and iPod maker more than doubled its market cap on the year.

I think a lot of people are looking pretty silly when it comes to AAPL. Even the most aggressive, pro-Mac guys, like me, couldn't have anticipated the kind of success Steve Jobs and team have delivered. But now, with Macworld approaching, and having cash on hand, maybe, just maybe, I'll do my part, and get back in the game. If I do, I promise I'll let you know.

Also See:

2005 Taxes in the Bag
The Stock Market Is Bleeding Us Dry
I Bet Wrong On AAPL, Again
Apple Stock Pays for AppleTV, New Airport Extreme
Taxes Completed Online, As Always
Top Eight Worst Stock Moves I Ever Made
Two Hours Of Apple Stock Plenty Profitable

My Contrarian Move to eTrade Bank

It seems nary a day goes by without getting a new story from Silicon Alley Insider or another financial pub commenting on eTrade's woes. While the company's recent struggles have been well documented, many are waiting for the other shoe to drop - the declaration of bankruptcy, the report of massive losses, or a stream of customers heading for the exits. (See: E*Trade Tries to Instill Confidence, Fails)

Amid the din of bad news, I've already said I'm not leaving.

In fact, I'm doubling down, not only by staying with the firm on the brokerage side, but in a new development, I've opened up an account with eTrade's bank as well. Now, from one institution, I can have my stock activity, as well as checking and savings. And I've picked eTrade.

Why? It's actually quite simple. eTrade offers 4% or greater interest in checking, while my Wells Fargo account counters with 1/2 of 1 percent - eight times less. Also, instead of waiting days to transfer money from my bank to the brokerage, it should take minutes. And with eTrade, I don't have to pay ATM fees anywhere. Effectively, every ATM on the planet is now my bank's branch. No more hunting down Wells Fargo and avoiding Bank of America, or requesting cash back at the supermarket.

Essentially, my money is now easier to get to, easier to move and easier to see grow. While eTrade takes its time to sort out its own financial issues, I've got mine solved.

The Web Advertising Bubble Has Got to Pop

A few weeks ago, while having breakfast with well-known Silicon Valley author, Emanuel Rosen, in Palo Alto (more on that later), I said that I was very concerned that all the companies chasing after advertising dollars, from blogs carrying AdSense to startups, all the way to the mighty Google, will be dramatically impacted by what I see as an obvious crunch in the online ad market. The more I think about it, the more obvious it becomes to me that the ad-driven economy, both offline and on, could soon be in dire straights, and companies hoping to cash in need to think of new revenue targets - quick.

I can't remember the last time I clicked on an online ad. Whenever possible, I am running ad blocking software on my browsers. I've learned to ignore AdSense blurbs that sneak through, and any time I'm forced to see an interstitial ad before reading a story, I'm clicking "Skip this Ad", or right-clicking it and adding to my ad blocker's memory.

Meanwhile, I find it painful to watch television without my TiVo. If watching something live, we mute the commercials, and either get something elsewhere in the house, go back to the Web, or pick up a magazine. I just do not want to be sold to.

To me, the most effective way to reach me as a consumer is through buzz, to hear genuine excitement from others who are trying a product early. If they like it, I'll see it in their blogs, in their Del.icio.us links, Google Reader shared items and FriendFeed. I'll see it on Digg or TechMeme. I'll see people using it and showing it off at the office. But I'm not more likely to purchase a product because they purchased some run of site banner ad space.

As I'm doing my very best to avoid advertising, I have to believe a significant number of others like me are doing the same thing. If you (safely) assume that the more educated, more technologically-savvy among us will be the first to block Web ads, then one of the most prized demographics for marketers will be unavailable. Then, as others latch on, the click through rates on ads will dry up. Total revenue from pay per click ads, from Google and elsewhere, will go soft and then crater. Advertisers will decrease their rates per click, and decrease their total ad budgets, moving money somewhere else, to more viral, buzz-driven, targeted campaigns. And while the Web has done a fantastic job about turning a per impression model to a per action model, proactively shunning the medium altogether makes you a deaf audience.

I'm waiting for a major browser manufacturer, like Firefox, or a smaller one, like Flock, to come bundled with ad blocking software, making it even easier for the non-tech savvy customers to start blocking banners from day one, not just stuffing the pop-up variety. It might not ever happen. It might be that there's too much pressure from advertisers and marketers to keep things status quo. I certainly don't expect Microsoft to be the first to adopt it with IE, for example. But can you imagine what would happen if they did, and the unwashed masses found their default browsers blocked ads out of the box? Euphoria.

Think I'm nuts? Look at what's happening out there. While many Web 2.0 companies are making ads their sole revenue target, eschewing subscriptions or chargeable paywalls, see all the news about how the ad-driven economy is showing cracks.

Center Networks: I Want My Slice of the Pie: A Look at Startups and Ad Spending

"We have thousands of sites competing for a piece of the advertising pie today… the problem is, innovation is outpacing ad spending at this point".

Read/Write Web: There's No Money In The Long Tail of the Blogosphere

"Whatever monetization means the blogger in the long tail settled on, be it Google AdSense or Amazon affiliate codes, it can only work on large volumes of traffic. AdSense works for Google because the odds are in its favor - it is aggregating small amounts of traffic across the entire web. The math works for them because it is based on the massive scale of the web. It similarly works reasonably well for the sites with large amounts of traffic, but it fails for smaller publishers who have low visitor counts."

Mashable: 15 Reasons Facebook Isn’t Worth $15 Billion

"Research firm eMarketer projects that by 2011, ad spending in the United States on social networks will reach only $2.5 billion. While I personally believe that most projections from research firms are BS, it’s worth noting that most of the time, these projections actually exceed the numbers that are realized."

Silicon Valley Watcher: Reasons Why Media and Bloggers Should Not Run Google AdSense

"Running Google AdSense will return pennies per click, you cannot make a living off of AdSense. But by running AdSense you are undermining your own efforts to charge a meaningful amount for online advertising. By running Google AdSense you have to accept the pricing of the advertising as determined by Google's AdWords advertising network."

eMarketer: Online Ad Spend to Hit $42 Billion by 2011

"While the current total media ad spending forecasts reflect economic anxiety, a downturn will affect online ad spending... (and) because of the credit crunch and related economic fallout, Internet ad spending will not increase as much in 2007 and 2008 as analysts previously expected"

As a consumer, I recognize Web properties and media need revenue. I'm willing to pay for access in many cases. I don't always assume things are free. But if you're running ads, it's very likely I'm not seeing them, and neither are a lot of people I know. The question is, will there be enough of us and enough innovative tools built to avoid ads that the big giants like Google, who to date has lived almost exclusively through ads, without monetizing its other products, start to have serious revenue trouble? And if they do, how far does that domino effect go? If I were running an ad-driven startup or media company, that question would be keeping me up at night.

Wrapping Up the eTrade Stock Story

Last week, after many, many acquisition rumors turned out to not come to fruition, eTrade announced the company had received a $2.5 billion cash infusion from an investment group, aimed to eliminate customer concerns over potential bankruptcy. At the same time, the company's CEO stepped down.

Thursday's news initially saw the stock jump from its depressed levels, touching briefly above $6 a share, up dramatically from its nadir in the $3.80 range just a few days before. But as soon as it hit $6, investors holding out for a bigger return from a potential buy from Ameritrade or Schwab saw this as their last hope to cash in, and a rash of sellers hit the exits.

I was one of them. As soon as I saw the cash infusion would be all the news we could expect for awhile, I got out, selling all I had at $5.73 a share. Most of the shares I had purchased on November 21st at $3.89 a share, but I had doubled down on Wednesday, the day before the news, with a big buy at $5.35 a share. All told, the week's earnings, just in eTrade stock, were more than $5,600 profit. Not bad.

Of course, any time I buy or sell as quickly as I did, my brokerage (eTrade, of course) doesn't like it, but I'd rather sell and worry about tax on profits than write-downs from losses.

Was the $5.73 sale a good idea? Apparently so. By the end of day Thursday, eTrade stock had fallen down to $4.82 a share. Those 91 cents a share to me meant a difference of $4,777.50 by selling in the morning rather than waiting until the afternoon. And on Friday, eTrade fell again, down to $4.60. But this time around, despite the low price, I don't think I'll be buying. As I see it, the big news has come and gone for a while.

Now I get to figure out whether I take this newfound cash and put it into Christmas presents, or if I put it back in the market.

Reality Check: When Good Cars Go Bad

Obviously, given last night's post, I've been giving some thought to upgrading my car. But as much as I dream, I'm honestly nowhere near making that kind of jump. Today, I belatedly took my car into the shop, and found it will cost more than $2,000 to get it back to speed, and while that astronomical number had me momentarily thinking it'd be best to drive it off the face of a cliff toward an unpopulated area, I recognized a "small" financial hit now will save me money in the long run.

As noted yesterday, the car was telling me to "Service Engine Soon", was reporting "Low Coolant" and the "Brake" light tended to be on longer than usual, even when the brake was released. Combined with the oil last being changed over 4,000 miles ago, it was time to take it in.

I started the expedition by putting water in the car, solving the immediate issue. Dropping the car off at Midas, they took a look and found:

1. The Service Engine Soon light was coming on due to a bad O2 sensor.
2. The Brake light was coming on as my front brake pads were extremely low.
3. The Low Coolant light was happening all too frequently as it turns out the radiator's cracked.

Add on an old belt here, a worn-out spark plug there, and pretty soon, you're talking about a pretty serious sum of money - just enough to basically make my eTrade investment unprofitable, once you take out the government's share of profits for taxes.

Given Midas takes Sundays off, I definitely won't be seeing my junky old dirty car until at least Monday night. Hopefully, although this is certainly inconvenient, and expensive, it'll be better to put $2k into this heap of metal and grease now than putting $20k, $30k or $40k into something right away. Nothing like a spur of the moment big decision to foul things up long term, after all.

But if this keeps happening... the only thing you'll be hearing about my 1998 Mercury Tracer will be in the past tense.

I Am Tired of Being Rational About Cars

Doesn't it say... Buy me?
Since 1999, I've had one boring, American-built, cheap, not impressive, dirty, car. As I've watched the miles pile up, to more than 130,000 at this point, the car's held up, for the most part, but in the go-go Silicon Valley, I'm simply not measuring up. It seems, incorrectly or not, that everybody else has a nice car. A BMW. A Lexus. A Porsche. Or they got kids and traded up to an SUV, often a massive bulk of a beast with all the bells and whistles, including satellite radio, GPS, in-seat DVD players... you name it.

Meanwhile, the only "upgrade" my car's had in the last 8 years was when I put in a 10-disc CD changer in the trunk no less than six months after I got it. Wheeee....

At this moment, my car's sitting parked on the street, in the gutter, appropriately. If I turned it on, two warning lights would display: "Service Engine Soon" and "Low Coolant". Service engine soon, huh? How soon? Two days? Two weeks? What happens if I don't?

On two separate occasions in the last few months, that light came on, only to go off again by the time I reached a service station, and they couldn't do anything. Flipping brilliant.

So, I've started to poke around the Web and look for cars I can't afford. I can rationalize ditching my 1998 Mercury Tracer. I can even think about making monthly payments for a car again, after years of not having to do so. I might even stomach a down payment, if I take money out of eTrade. But the sticker shock is a sight to behold. It's around $40k to get anything I really want, like an Audi A4 Convertible or a BMW 3-series. And yes, I know maybe I should get a Prius or a Hybrid Camry, but that sounds boring, and after a decade of boring, cheap, cars, I am ready to waste my money and have some fun, before that window closes.

So... I want a nice-looking car, with deep dark blue coloring. I want a car that has GPS navigation and Sirius/XM Radio pre-installed. I want a car that won't have the brake light on the first 10 minutes I drive it every morning like mine does now. I want a car that doesn't look like I am the hired help every time I visit Palo Alto, Woodside or Menlo Park. I want to have a car that's as good looking as my MacBook Pro or flat screen TV. A car that's more iPhone than rotary phone, one that's good enough I'll have to park two parking spaces away from anyone to worry about dings.

Think I should do it? Part of me wants to hit the buy button and damn the consequences.

eTrade's Losses Are Investors' Gain

The last time I mentioned eTrade's issues, I said I had bought in to the stock around $5.50, following a small recovery after bad news swirling around the company had decimated its market value. Not seeing the kind of continued growth I had expected right away, I sold my position a few days later around $5.65. I'd made a few hundred bucks, but nothing to write home about. But now I'm back in, and it's a different story - one that could be much more profitable.

After I sold on November 16th, eTrade stock resumed its collapse, falling below $4 a share - signaling to me the right opportunity to resume my eTrade gamble (Partly due to this article). So on Wednesday morning, I put a sizable chunk back into the stock, now at $3.89 a share. It looks like it may have been the right move, as while rumors of a potential merger with Schwab.com or TD Ameritrade have been swirling, the stock jumped about 25% today, ending at $5.33 a share, giving me a 37% gain in a two day period, and an "on paper" profit of more than $3,500 so far.

Why play eTrade? Because I believe they have the best brand among online brokerages, and that their customer base will be a valuable commodity, even if they are sold or merge with a competitor. It's also likely the eTrade name would be kept, if not too damaged. After all, who wants a new name like TDAmerE*Trade or SchwabTrade.com? An eTrade customer can only benefit from this.

As an investor, I believe my funds are safe, and that the value of the company is higher than it is today. I've made more than my fair share of bad stock trades in the past, whether from premature selling or simply bad buying, but I'll be watching this one close, hoping it turns out well.

(Also see: Silicon Alley Insider: E*Trade On The Blocks? Probably., BusinessWeek: E*Trade: The Merger Buzz Grows, or E-Trade Shares Spike on Takeover Talk)

Back on the Road (In the Air) Again

Not too long after getting back from the last trip (to Colorado), we're taking off again, this time straying further from home by heading out to the East Coast, taking in New York and Boston. Early prospects show the weather in New York to be mild, not cold, but showers are anticipated on Thursday, and we might see snow flurries in Boston on Friday.

Regardless of the weather, this will be yet another test for how quickly I can adjust to jet lag. As my typical tendency is to stay up way too late on the West Coast, padding three hours on the clock isn't going to do us any favors tonight, as I'll probably be staring at the ceiling or reading RSS feeds in Google Reader around 2 a.m., rather than getting some much-needed rest. All part of the travel experience, I guess.

Of note, we're flying Delta instead of United, my typical carrier. My prior experiences with Delta were pretty good (as noted here), so I'm optimistic, but we'll see.

Also of note, I literally put my money where my mouth is this morning. Before leaving the house, I put a significant chunk of cash into eTrade stock. While I wish I had done so below $4, which was the opportunity on Monday, I think this trade (not investment... trade...) will pay off well. We're averaged in around $5.50 a share.

The Run on eTrade Won't Have My Footsteps

Mob mentality, especially on the market, can be a dangerous thing. I've found that often, the best thing to do long term is to avoid the one-day panics as groups jump out of one stock or another, whether based on rumors, or even hard news. This week's activity in eTrade just may be exactly that, as I've seen the viability of my long-term broker put in question.

As speculation and analyst commentary stated, eTrade will likely be writing off massive loans that have gone unpaid, to the tune of multiple billions of dollars. Some have speculated the company could go bankrupt, or even be at risk of closure.

Obviously, given all my discretionary market funds are tied up in eTrade, and have been since the beginning of the decade, the thought has crossed my mind to transfer my cash out of eTrade, back into the bank, for later investment in another brokerage. Any of them. But even more than my thoughts of going with the crowd by giving into the panic, I've considered going against the grain by buying eTrade stock, which just might be oversold. Maybe I could even actually profit from the short-term timidity of others?

Regardless of that choice, which I haven't acted on, I'm not leaving eTrade. The brokerage has given strong service for a long time for me, and I have close to zero expectations that I'd find my funds were completely gone. That would be a scandal of epic proportions, one I don't see happening.

Apple Analysis Analysis - Earnings Call Extra

Following today's earnings announcement from Apple, the company held a conference call with analysts, which is typical. Thanks to Seeking Alpha, we have the full transcript from the call, and can see how often analysts and the company talked about specific aspects of the company's business.

As you can see in the below chart, despite having revenue of more than 60% of the company's business, the Mac, by all accounts, growing in market share, played the poor second cousin to the continued buzz around iPhone and iPod.


Click to Enlarge Image

Using Safari 3's "find matches" tally, we see the call featured the following terms the following number of times:

iPhone: 51 times
iPod: 41 times
Mac: 25 times
AT&T: 12 times
iTunes: 8 times
Leopard: 7 times
Macbook: 4 times
iMac: 4 times
Macintosh: 3 times
iPod Touch: 2 times
iLife: 2 times
Apple TV: 1 time
iWork: 1 time

** The two iPod Touch mentions are also included in the larger iPod number.

While Apple reported that Mac products and services were 62% of total revenue, in contrast to 36% for Music products and services, iPod and iPhone total mentions outpaced Mac mentions by a combined 92 to 36. Throw in AT&T and iTunes, and Music outpaces Mac by a whopping 112 to 36. Who cares about actual revenue when you've got buzz?

Also, the laggards in Apple's portfolio, iWork and Apple TV, got just about the amount of attention I would have expected - one mention apiece. It's not as fun to talk about those aspects of the business that aren't gracing magazine covers and becoming the must-have items of 2007.

To listen to the call yourself, check out Apple's archive on their Web site.

Mid-Day Apple Notes, Post Earnings

As anticipated, Apple blew past analysts' earnings estimates this afternoon, as has now become commonplace for the company. Apple sold more than 1.1 million iPhones in the quarter, partially explaining why I see them everywhere now. Seems every good tech geek has one except me! The company also is seeing continued Mac sales growth. With those results, Apple stock jumped more than $10 a share, and is now trading after hours in the $184 range.

As I noted earlier, I took the opportunity for a quick one-day trade, getting in around $170 at 6:30 this morning, and getting out at $183.7 after hours. I don't have the patience to watch the stock accumulate, even with all the long-term opportunities I've missed in Apple, Google and others in the last few years. Sometimes, you just have to accept the fact it was time to take profits, and look for the next quick momentum pop.

Obviously, that trade easily more than pays for my near-term acquisition of Apple's new operating system release, Leopard, which hits stores on Friday. I watched a helpful guide to the new operating system last night, and posted my comments over on The Apple Blog (Leopard Is Coming, and I Want It). Mac OS X is just extending its lead over Microsoft Vista, and the innovation from Cupertino continues to reaffirm that I made the right choice for my OS. Hopefully, more will continue to make the switch in quarters to come.

Ready to Gamble on Apple Earnings Today

After hours today, Apple is set to announce earnings for the most recent fiscal quarter. And for me, month after month after month of seeing Apple stock go up, without my being involved, ends now. While I still believe the stock is highly priced, it seems that there are enough investors out there to push the price ever higher, and so long as that is true, it's a worthwhile investment.

Apple has some incredible momentum behind it. The iPhone is an unqualified hit, even with the AT&T boat anchor holding it back. Microsoft continues to make missteps, around Windows Vista, around MSN Live Search, and around the Zune. Apple is days away from introducing Leopard, the latest iteration of the company's rock-solid Mac OS. And market share continues to climb.

I've been wrong on AAPL before, in the short term, but looking at my eTrade records, no stock has more reliably made me money in just about every trade over the last three to four years. A look at the chart in this post shows why. Apple stock has outpaced just about every technology stock out there, and doesn't show much sign of slowing down. I only wish I had been even less diversified than I already am, and had put it all on Apple in the first place, best practices be damned.

Today, I just might roll the dice and take my chances. We'll see by this afternoon if that was the right choice.

Two Hours Of Apple Stock Plenty Profitable

For all the noise I made a few weeks ago about my eight worst stock trades ever, you might have the impression I'm the worst stock investor of all time. And while I've certainly had my share of bad calls, the occasional wins here and there keep me trying. Today, I bet big on Apple, hoping the company's earnings report would do us well, and it paid off in a big way.

I very publicly dumped my 200 shares of Apple stock in the low 90s per share earlier this year, and with the stock approaching $140 a share today, it's clear that was a mistake. But as the hours ticked down toward Apple's earning announcement this afternoon, I knew I had to give it one more shot to make money off the Cupertino juggernaut. So I did something crazy...

At 12:48 p.m., I put in enough cash to pick up 250 shares of Apple at $137.43 apiece, less than 15 minutes before market closure. As you likely already know, Apple walloped analyst guesstimates and the stock shot up in after-hours trading. My big bet started to look better and better as the stock rose past $140, then $142, $145 and beyond. By the time it peaked above $148, I knew I'd seen enough. At 2:38 p.m., I had sold it all, at $148.48, clearing more than $2,700 for less than two hours "work".

While that doesn't make up for missed potential earnings from my previous trade, I was fairly pleased. In fact, looking at my eTrade account, Apple has been the one stock I've consistently had success with over the years. While I at times feel too much like an Apple fanboy to tie up a good portion of my portfolio in the company, the truth is that it simply makes sense. The company continues to execute on all cylinders, and surpass expectations, and that's the best type of company to put your money on. It's just too bad I have such a short attention span that I can't stick it out.

If, like my colleagues, you see my trades as a contrarian indicator, now would be the best time to get into Apple, because I'm out. For all I know, the stock could be headed to $150, $160, $180 or beyond. Then you'll be hearing whining from me for certain. But for today at least, I'm content.

More coverage on the Apple earnings boom: Webomatica, Parislemon, Engadget

South Bay Search for Nintendo Wii Comes Up Empty

After openly contemplating the acquisition of Nintendo's incredibly popular Wii game console on this blog a month or so ago, I was surprised last week when my wife said she too had come to the conclusion our home needed one. Typically, I quickly recognize the need to upgrade, whether that be to a new wireless network, a new plasma TV or a new laptop, and she is more conservative, but she's catching up. Unfortunately, thanks to the much-discussed Wii shortages, even if I were ready to spring and buy one today, I'd be completely out of luck, as yesterday's journeys showed.

Yesterday, during lunch, I drove to the nearby Best Buy in Milpitas, and was told they had sold out their shipment of 25 consoles between the previous afternoon and the previous evening. They had no guess as to when the next shipment would arrive, but said they were being distributed on a first come, first serve basis. Microsoft's XBox 360 and Sony's Playstation 3 sat idly by, but I wasn't interested.

Not to be stopped, I drove a block or so further, to Wal-Mart. Yes, Wal-Mart. They too had a similar story. No Wiis were in stock. They get shipments every two weeks or so, but didn't have a clue when the next one would be.

After work, I continued my search, going to the Best Buy in Sunnyvale, near home. Again, no Wii for sale, and no knowledge of the next shipment. While I could buy replacement controllers, video game consoles, and even carrying cases for my non-existent WIi, I couldn't buy the machine itself.

So, I headed down to the Valley Fair mall in San Jose, which just so happened to be next to a Best Buy - my third on the day. I ducked in to the store at 8:57 p.m. (Store hours closed at 9 p.m.), knowing I had three minutes to ask the same questions and get the same results. Sure enough, plenty of advertising, but no Nintendo Wii. This time, I was told they expected shipment this upcoming Sunday, which led to some bickering with the sales staff, who disagreed on whether they get new consoles each week, or each month.

At this point, I'd worked myself into a consumer demand froth, ready to buy one if it were available. It wasn't a situation of trying it out, or watching someone else play. If it were there, my next move would be to grab the Visa card. But none of the stores got my money, and I didn't get my Wii. The question is - will I keep looking and showing up to random Best Buys to chat with annoyed teenagers, or should I let it go? I'm not sure yet. I also don't think I'm desperate enough to go the eBay route. It's a fun idea, but not critical. Yet.

Our Car Insurance Debacle (a.k.a. Online Billing, Please)

Over the years, I've made a whole-hearted effort to avoid paper as much as manageably possible. 95% of all postal mail to our address is for my wife, with the exception of Sports Illustrated, ESPN, Newsweek and Business 2.0 magazines, and all bills I can move online I do. For the most part, any mail that comes to the house with my name on it is junk, to be ignored. But this last month, I realized I hadn't moved exactly everything over, and as a result, we've been on the shady side of the law for about six weeks. Oops.

In late June, my wife said she needed to register her car, but upon readying to do so, she said her car insurance had expired. As we are jointly registered on one account, that of course meant that mine too would have been past due.

Scrambling through the condo, I found the reminder from our insurance agency, from May, stating the expiry was upcoming if we didn't pay immediately. As of May 23rd, it turned out we were driving uninsured, a big no-no, for obvious reasons.

Calling the 1-800 line to pay via credit card also failed, as we were just over 30 days late, and I would have to go through a broker to reestablish our insurance. This later led to calling the agency during work hours, getting more than 20 pages in PDF to add dozens of signatures, and faxes to and from our insurance carrier just to get our status back in good graces. And, even after all this, plus paying a small penalty for turning our insurance back on, I don't yet have new insurance cards for my wife or me, so if anything were to happen between now and when they arrive, it will require a little bit of explanation.

While there's clearly egg on my face for the oversight and ignorance of standard billing, I'm a bit annoyed that there was no other warning of my impending illegality. I pay all my credit cards online, the phone bill and even old world tech like our gas and electricity from PG&E is paid online, and I receive a monthly e-mail from them, instead of snail mail, reminding me gently to log in and pay up.

Had I received a single e-mail, I would have logged in, posted my credit card data, and we'd be good to go. Instead, I'm an outlaw, and menace to society. As a side benefit, my wife is ticked off and can't figure out how she married such a dolt. The good news there is nobody else can figure it out either, so she's in good company.

Bay Area Real Estate Like a Hamster Wheel

There's no secret that the San Francisco Bay Area is one of the most expensive places in the world to live. Homes that would be less than $200k or $300k in most areas of the United States commonly price well above $1 million here, and elements that most families hold as expected in a home, such as a backyard, a basement, or a lack of congestion, are considered luxuries. And for anybody trying to start out their career in the Silicon Valley, having not yet struck it rich (as many try and few do), the ever-increasing cost of living can have you wondering if you will ever catch up.

Jeff of Narduzzi Nation captures the plight in a note yesterday where he said, "Unfortunately, just about every house we would want to buy in our area is out of our price range, and as much as we want to stretch ourselves to buy our dream home, we don't want to be 'house poor'."

Two income families, even without the expense of children, can't always be assumed to have enough cash to move up the real estate ladder here in the Bay Area. Barring a tremendous income for each, a good chunk of the money coming home is going back into the mortgage, or the rent, some going to principal, but a great deal just going to the interest - your monthly thank you note to the bank for letting you live in their place...

It's obviously a catch-22. If you buy a $400k home and watch it appreciate, to $500k or $600k, the added equity you achieve doesn't even match the corresponding increase in that $600k or $800k home you were eyeing. If one assumes that mid-level market home prices are increasing at the same rate as more expensive homes, you don't get closer to the next rung up in the ladder by hoping for increased equity. Instead, you'll get further away. The difference can only be made up in three ways:

1. Increased savings overall, in parallel with limited spending
   
2. A dramatic increase in income, which in turn, allows for #1
   
3. Simply moving out of the area to a place more affordable

But if you believe in the Silicon Valley, and you want to make a life here, rather than leave the area in the hopes to achieving the American Dream of a two-story house, two car garage, and more than an acre of green grass, you just might be stuck on this hamster wheel of sorts, running in place, while not getting any more near to your goal. At church, I've seen many couples, once they start having children, realize they can't afford to grow a family in the Bay Area, and can't take on a larger home with more bedrooms for the kids. I know many families who have left, headed for less-costly pastures in Texas and the Mountain states (Colorado, Utah, etc.)

My wife and I own a 2-bedroom condo, which is good enough for the two of us, and our 17+ year old beagle, and we've watched as the value of the home, and those in the complex have increased, but I don't feel as if we are any closer to leaving the condo and getting a stand-alone home this year than we were last year, or the one before that, or the one before that. The only way our lifestyle will change is if either of us see points #2 (a dramatic increase in income) or #3 (we move out). We don't intend to go anywhere, but if it came down it, we would have to exchange one dream for another, and become new residents somewhere else. Somewhere without the brain power of the Valley. Somewhere away from the action. Somewhere with a slower, less expensive way of life.

Is there a way out of this issue? How can we expect the value of our own home to increase beyond the rate our target home is increasing? Seems like we can't win.

Top Eight Worst Stock Moves I Ever Made

While the NASDAQ and DOW averages have done alright for themselves in 2007, my eTrade account isn't keeping up. In fact, with almost six full months through the year, I took a look at the online brokerage and it looks like I'm not too far from where I started. This got me thinking about how I had sold my Apple stock way too early this year, and that in turn reminded me of all the missteps I've made financially over the last decade or so. I thought I'd share some of the lowlights. Why only eight and not the typical ten? Let's just say that in this case, eight is enough.

1. My Not Investing in the Google IPO.

Long story short - I had the option to participate in the Dutch auction of Google stock as the company prepared to go public. In fact, I had put in a bid for 100 shares, but seeing the price debut at $85 - $90 made me think there was only one direction for the stock to go... down. Boy was I ever wrong. A quick search in my GMail reminds me of that blunder, with messages like "We are sending this notice to everyone who obtained a bidder ID, regardless of whether you have been allocated shares of Google's Class A common stock in the offering." The $9,000 or so I could have put in at the end of 2004 would be worth more than $51,000 today.

2. Getting Fleeced by WorldCom's Lies

It wasn't just the employees of Enron, Adelphia, WorldCom and others who were hit by the financial scandals that rocked thsoe firms. Years ago, as the shine started to come off the Internet bubble, we were looking for value stocks that looked like they were a cheap buy with possible near-guaranteed returns. As one friend began to hype Worldcom's amazingly low price/earnings ratio, I bought in to the hype. In May of 2002, I started accumulating Worldcom (WCOM) with 525 shares at $2.25, and dove in headfirst with 1,160 more shares a month and a half later at $1.38, as the stock dove downward. Then the scandal hit, and we were left holding the bag. By July, my 1,685 shares of Worldcom were sold away at 20 cents apiece, getting me a loss of nearly $2,500. That money loomed much larger for me five years ago, but still sticks in my craw.

3. Getting Ownage from Vonage

In June of 2006, after publicly questioning my own sanity, I opted to play the Vonage IPO. Still hurting from my missed opportunity at the Google IPO (see above), I jumped into this longshot, which was a dead duck from day one. In a week's time, I saw my 600 shares drop from a value of nearly $10,000 to just under $7,000, costing me almost $3,000. (I already chastised myself publicly here)

4. Rack 'Em Up, Stack Up the Losses

See a trend? I think I can outsmart the market by buying low and selling high. The trick is that everybody else keeps selling, and usually what goes down, must go down some more. Earlier this year, I fell for that trap again. In the first half of this year, I bought into 500 shares of Rackable at 21.15. By the end of April, I was out entirely at 12.72 a share, and it's even lower now. My total loss? More than $4,200 by the end of April. That's worse than taxes for a mid-April surprise.

5. Burst My Bubble

In January of 2006, I thought I could buy low and sell high again by riding the hype around a small stock with shaky but potentially profitable ambitions. I purchased 6000 shares of Burst (BRST) around $2 and sold for $1.60. I thought the company might actually make some cash off its suing Apple for patent infringements, but the stock had already jumped and I lost my shirt to the tune of about $2,500 in the space of 2 days. I'd rather I lost that money playing slots in Vegas somewhere.

6. Sun Rise, Sun Set

While the total value lost here wasn't tremendous, around $1,000, it sure is embarrassing for my setting a record in bad timing. From July to September of 2002, I was accumulating Sun Microsystems stock at low, low prices, first at $4.75, and later at $3.65. But the stock was in freefall after nobody wanted "the dot in dotcom". I gave up on the stock on October 4 of 2002, selling all 655 shares at $2.50 apiece. Not only is the stock more than twice as high now, nearly five years later, but $2.50 was just about as low as it ever went. (Reference: Google Finance)

7. An Apple a Day Keeps Debt Away

At the end of April, following delays in Apple's Mac OS X Leopard operating system, and concerns around iPod sell-throughs, I thought the best thing was to get out of Apple altogether. Very publicly, I sold my 200 shares of Apple stock at $94 apiece, making about $1,600 on the deal. But if you take a look at Apple stock now, just two months later, you'll see the stock is around $124 a share. Quick math says I left $6,000 on the table. (This wasn't my first wrong guess on AAPL)

8. A Half Hour Will Cost You a Grand

On September 28, 2005, Incyte Corporation had taken a big one-day dive, from the $7 range to just under $5. Looking for the inevitable bounce, I put in for 1,500 shares, with a stop loss that would prevent me from getting too fleeced. I literally took a shower, and came back to find my sale executed at $4.25 a share. All told, I had lost $1,000+ from 6:49 a.m. to 7:12 a.m. and I hadn't even had breakfast. That's a horrible way to start the day. The stock now trades around $6.38 a share.

So that's about $20,000 in real losses and $60,000 in unrealized gains. They say you're not supposed to have buyer's remorse or seller's remorse, but I just can't help it. What are some of the worst stock trades you've ever made?

SF Chronicle Editor: Newspaper Business Model "Broken"

One day after Neil Henry lit up the mediasphere with his stark comments on the world of journalism in a brave new world of instant, independent media, more bombshells continue to drop at the San Francisco Chronicle, as the beleaguered paper saw its managing editor quit yesterday, despite not having a new job. In his leaving, he said the business model in the newspaper business "is clearly broken."

Not too long ago, San Francisco was a two-paper town, with the Chronicle and Examiner publishing every day. The Examiner functioned as an afternoon paper, including the closing day's stock prices, and the Chronicle was the paper of record. In a series of missteps, the Examiner cut back the number of editions, went to tabloid format, and all but disappeared. The Chronicle, the seeming victor in the race, has seen its own struggles, and is circling the drain in an extremely wired, connected landscape that is turning elsewhere for its media intake.

I was once a newspaper addict. I read the paper daily from the age of 12, scoured for newspaper headlines and editorials all over the nation when the Internet evolved, and seriously considered journalism as a profession, becoming a charter subscriber to the defunct Brill's Content, and making myself a student of the craft. But the landscape changed under my feet, and I was lucky enough to make the jump to a more forward-looking, aggressive environment. If others in the newspaper business don't make similar moves, many will find themselves starting their careers over, voluntarily or not.

Intellequity: A VC-like Concept to Tackle Higher Education Debt

With June right around the corner, college campuses around the country are seeing commencement exercises and graduation ceremonies filled with pomp and circumstance, as they hand thousands of students pieces of paper that exit most of them from the campus and into the world of earning a living. Some may already have started new jobs. Others may just be starting that search now. But for many, the years of schooling have already put them deep in the hole financially. While the mood on the day of graduation is a gleeful one, the issue of debt is very real, one that could be haunting some for a very long time.

Uber-blogger Chris Pirillo highlighted this issue in a two-parter today on Student Loan Solutions and Student Loan Debt, concluding that he doesn't know if student loans are "more of a hindrance than a help." The major issue, he writes, is that forward-looking young adults are expected to get an education, whether we can afford it or not, meaning some are weighed down "with tens of thousands of dollars in student loan debt before we’ve even had a chance to see whether or not our higher education was actually worth the price of admission."

While I was in college, I occupied an odd middle ground where my parents' collective income was too high to qualify me for financial aid, but their month to month struggles meant that the tuition checks going home weren't always covered on time. Some months, the way I'd find I was negligent was that my meal card for on-campus dining would simply stop working, sending me to nearby eateries in Berkeley, bleeding away my already low cash on hand. But the good news was that I managed to pull through, getting a degree in four years without establishing debt. Other friends of mine, also entering their early 30s, did qualify for financial aid, but also racked up debt, some into the six-figure range, and to date, haven't made much headway. In fact, one of my best friends, whom I've known for half my life, may have to file for personal bankruptcy just to clear the deck and start over.

In the heady dot-com mania of the late 1990s, when everybody had a business plan sure to make millions, I had come up with what I saw would be a sure solution - a program I had dubbed "Intellequity". The concept was that instead of basing loan agreements on current cash on hand or current income levels, I would set up a company that doled out loans to promising students or recent graduates. The better the prospects seemed for a student, the better the loan terms would be. Effectively, based on a detailed matrix of experience, grade point average, major, brand name of the attended school, and a small battery of aptitude tests, and interview, we would offer loans that would not come due until the applicant began their first salaried job.

The student would not incur a specific dollar value of debt at all. Instead, the way the "Intellequity" project would be funded was through asking for a small percentage of future income over a set period. For example, if $10,000 were the loan amount, and the candidate were to have established a 2% payback rate over an 8 year period, they would pay Intellequity 2 percent off the top for 8 years. Assuming the applicant made $500,000 in salary over the 8 year period, the pay back would be the same $10,000. But if they made more, the company would gain a profit. If they made less, it would be our loss. If the payback rate were higher, say at 3% or 4%, the return would be that much greater as well.

Those applicants who didn't see their career paths pan out they way they had planned would not be equally burdened as those who had skyrocketed, those who we had taken a chance on. The risk would have been transferred away from the student who started accruing interest right away, but instead, to those of us funding the individual. In effect, it would be acting like a VC firm, not for a business, but for an individual. Some investments, as with VCs, would be duds. Others could make millions. And Intellequity would become a partner with the student, finding them better paying jobs and opportunities, hoping to push the individual toward a route that would make them more money in the end.

Would bringing a VC-like environment to the student loan process work for everybody? Of course not. But it sure would make things interesting, and it would eliminate the problem that some students find themselves in from the day they walk the stage and throw their mortarboards in the air - one of being alone and in debt from the very beginning.

Register.com Laptop Stolen, With My Credit Card Data

With all the stories in the news over the last few years of misplaced laptops and lost data tapes containing personal information, including financial details, such as credit card and social security numbers, it figures that is has now come time for me to finally be the victim. Register.com sent me an e-mail this evening saying that "while less than 2%" of the company's customers were believed to have their account and credit card data on a stolen laptop, that I was one of the lucky ones to be impacted.

As the company's customer service director writes, "you are receiving this letter because we believe that your customer data and credit card information was on this laptop."

Register.com, the domain name service by which I registered louisgray.com and host the site, says that the company has no evidence my data has been misused, that there is a low likelihood of my information being compromised, and that "appropriate third parties and law enforcement agencies have been notified." Yet, despite all of these things, the company still recommends I notify my credit card company, and enroll in an identity theft protection service from Equifax. Helpfully, Register.com is offering me the first 12 months free, though I have no doubts I'd be asked to pay up come a year from now.

Beyond the obvious annoyances this poses, the timing of the e-mail is extremely suspicious. The e-mail was sent after 4 p.m. on a Friday just before an extended holiday weekend. If there were ever a time to try and hide a major security incident from the press, now would be a great time to do so. And despite the potential for identity theft, mysterious charges and significant hassle, the company wraps up the e-mail by saying, "thank you for your continued business partnership with Register.com."

They can only hope so. We'll be watching this situation very closely. Have you ever been the target of identity theft or been alerted your data was at risk?

I Missed the Apple Stock Buying Opp

There's one thing to be said about being in meetings all day - sometimes I can miss all the noise around an event until after the mess has been sorted out. Today, I missed all the drama around rumored Apple product delays until the hubbub was history. In case you were in meetings all day as I was, or live under a rock, but somehow maintain great Web access, the gist of the story was that a fake e-mail warning of delays to the iPhone and Leopard OS made its way around Apple internally, and was forwarded to tech news blog Engadget. The resulting story forced Apple stock to sharply dive, cutting away $4 billion in market value, only to see it eventually recover for the most part when the rumor was rescinded.

Had I not already sold all my Apple stock (prematurely) a few weeks ago, I might have seen the intraday dive down from $107 to $103. I might have gritted my teeth over a potential loss of hundreds or even thousands of dollars. If I were paying attention and knew the rumors were false, maybe I would have even debated buying at the new "on sale" price. But neither of those things happened. It looke like it was truly much ado about nothing.

In the aftermath, we can be sure to see debate around what standard blogs should need in order to post rumors, and there will be investigations at Apple to see how their e-mail got compromised. There are already calls for an SEC inquiry and concerns over who could have benefited from the shenanigan. Even Valleywag, usually the villain in today's tech blogosphere, comes out looking like a rose in comparison to the normally excellent Engadget. They note, "Someone, who bought on the panic, made a serious profit on today's little blog embarrassment."

If only I had been the one to see through it.

Microsoft to Buy Yahoo! ... Really?

Just a few years ago, it would have been hard to believe Microsoft would be on the run from a Silicon Valley innovator like Google, but that's what's happened. As Microsoft and Google have played the #2 and #3 roles in search and portals, it's clear neither company has enjoyed their challenger position in recent years. Now, the industry scuttlebutt has it that Microsoft is looking to buy up Yahoo! and that the companies' combined forces could challenge Google's throne.

I for one don't think they would beat Google even if they did merge, and truth be told, I would move the heck away from My Yahoo! in favor of iGoogle if this did happen. Not much good comes from services typically when they fall under the Redmond fold.

However, there has already been one positive from the rumors. That Yahoo! stock I purchased a few weeks ago on a dip is up nearly 20% today. Wow - that trade looks good in hindsight now, doesn't it! (See: Buying on the Dips Can Kill Your Finances)

Yahoo/Microsoft news from My Link Blog:

* Internet Outsider: Microsoft To Buy (Swallow) Yahoo...Again? Please, God, No.
* Jeremy Zadowny: Microsoft and Yahoo (again)... I couldn't tell you if I knew.

All is Not Quiet With Apple Before Earnings

As an Apple (NASDAQ: AAPL) shareholder, these are the times that try men's souls. While remaining very positive on the company's long term goals and product trajectory, the latest spat of news coming out of nearby Cupertino has me thinking as to whether tomorrow would be an excellent time to get out of my Apple stock position, at least for the short term.

Apple announces quarterly earnings an hour after the NASDAQ market's close, and of late, the company's stock has been steadily climbing upward. Despite today's pullback of less than a quarter of one percent, the stock is above $93 a share, up 4% from last week, and more than 12% over the last three months. For me, I'm up just under 10% in this most recent short-term buy.

But in the midst of this, in the last few weeks, Apple has confirmed their next generation operating system, Mac OS X 10.5 (Leopard) will be delayed until the fall, rumors have arisen that the much-awaited iPhone is suffering from stability and battery issues, and the SEC's inquiries into stock manipulation and backdating continue. Today's well-documented news reported former CFO Fred Anderson's settling by paying fines of more than $3 million, and issuing a press release that CEO Steve Jobs instructed him to institute the irregularities in the first place. (See: GMSV)

Whether true or not, any suggestion that Jobs could be at risk sets shudders down the spine of any good Apple investor or Macintosh fan. As the company's business and marketing leader, Jobs represents the soul of the company, and is given the lion's share of the credit for all good things that have come to pass at Apple in the last decade. On the news of Anderson's finger-pointing, some in the media admitted to having cold feet, and selling all their Apple stock.

I've bitten the poisoned Apple a few times myself over the years, holding when I should have sold, yet also selling just before a rally. Even if the company reports stellar earnings, with all these questions, will the Street be satisfied? I'm not so sure. Come this time tomorrow, I just might not own any Apple stock. And truth be told, I might not be happy with my decision either way.

Buying on the Dips Can Kill Your Finances

In order to outperform the market, it's a required element that you take a contrarian bent - either through buying into a stock early, shorting one at its apex before an eventual descent, or buying stocks on the cheap, if you feel they have been cut down to size unnecessarily, or by too much, effectively meaning you're betting on a near-term rebound. While I definitely subscribe to a buy and hold strategy for some stocks of reputable companies with serious short and long term upside, I have fallen victim at times by trying too hard to be a contrarian.

Take Yahoo! (NASDAQ: YHOO) for example. Outside of my 401k, I have never been a Yahoo! investor, until yesterday. While I've written previously that I think Yahoo! has lost significant market share and mind share to Google in the search and online ads arena, the company is no slouch. Following Tuesday's quarterly announcements which disappointed analysts, the stock took a significant haircut Wednesday, dropping more than 10 percent. Effectively, the company's stock was on sale for more than 10 percent off. (Unless you start getting picky and looking at current or future P/E)

So, given I had some available cash in eTrade, I added Yahoo! to my portfolio for the first time. If the stock regains half its one-day loss, I'll be up 5%. But, as sometimes happens, the first day's losses continue the next day or even further. Not only did yesterday's pummeling not include a late-day bounce, but Thursday's trading has seen Yahoo! go down an additional 2 1/2%, meaning instead of being up a few hundred bucks, I'm down a few hundred bucks, and I have to root for the stock to rebound just to break even, let alone make money.

This isn't the first time I've lost money on hoping to catch a bounce. It's called "catching a falling knife". If you see a stock taking a dive, and you're trying to accurately pick the bottom, wrong guesses can draw blood, just as much as they can if you, like I once did in 2002, sold Sun Microsystems at 2 1/2 bucks a share. (It now trades at nearly $6)

The question is, will I wait for Yahoo! to rebound, and make money, sell quickly to cut losses, or hold on until I lose even more? Those are the three choices. For now, I'm holding and waiting for an eventual retracing.

Taxes Completed Online, As Always

Intuit's TurboTax is a life saver. Every year around this time, and often earlier, my wife and I take all the last year's financial papers, sort them and then push them through the TurboTax program online, counting income statements and then (crossing our fingers), hoping we have enough deductions so that the government finds itself needing to send us a quick check and thank us for our efforts.

Every year, it seems to get just a bit easier. TurboTax stores our prior year's data, and imports it so I don't have to go through the mundane tasks of telling it where I live, where I work, what my name is, etc. It assumes nothing has changed from the previous year, and gives me the option to update. Additionally, the ability to import my brokerage account data from eTrade is dramatically easier than saving the data into Excel or Quicken or some other tool, then going one by one to add my gains and subtract my losses. (Funny how all year I root for gains, and come tax time, I root for losses...)

This year's efforts took the better part of the afternoon. I had two piles - the "To Do" and the "Done" piles, and I methodically moved from one to the next, with the A's spring training game playing on the radio in the background. By mid-afternoon, we were all done for yet another year, and can store away our papers until the IRS comes calling later to see if we got it all right. But that hasn't happened yet, and we've relied solely on the Web version of TurboTax for more than 5 years. I can't imagine going any other way.

Now, in the next few weeks, I expect an e-mail to confirm everything went through, and a quick bump in the bank as the refund goes through via direct deposit. It just works!

Rich Man, Poor Man - Stocks and Shocks

The week's stock swings could make one nauseous, if they weren't almost entirely to the downside. Some people are calling this the first sign of a recession, the end of the Web 2.0 bubble, and saying the long bull run for the market may be coming to an end.

All I know is that my 401k is taking a beating. Siphoning off a percentage every two weeks to Fidelity, we're fairly heavily leveraged in some of their broad funds. While mutual funds are supposed to protect your risk from the ups and downs of individual stocks, they pretty much guarantee you will get hammered when the market goes for a dive. And that's proven to be the case this week. (See: FCNTX, FDGRX, FDEGX, FCPVX, FEXPX)

Both Wednesday and Friday saw me lose thousands. I lost more money on Wednesday and Friday combined than I take home in a month's pay. Even my quick Apple investment I was so proud of just yesterday is already down a few hundred bucks. There's really nothing good to talk about in the market right now, but it's my hope that this is more of a one or two time bump than an overall trend.

The market has seen bigger hits before, and keeps coming. But today, going into the weekend, it hurts.

Playing the Super Bowl Like a Betting Fool

It's often said that watching the Big Game is much better if you have a few bucks on the line. Putting money down on the Super Bowl is big business, not just in Las Vegas and Atlantic City, but across the country, as many people make side bets at work or with friends, whether it be simple wagers over who will win the game, or on specific statistics.

For the last three years, my father-in-law and I have had a friendly tradition to bet one against another on a series of more than 100 questions, alternating picks. While in theory, the loser could be out more than $500, the law of averages tends to bring the final total to the mean, making the eventual margin of victory or loss in the much more manageable range of $5 to $50. As I always tend to come close to winning, but never do, the first question he always tends to ask me, before we get started, is "When can I expect the check?" Today, we laughingly decided I can pay him in monthly installments, with a low-low interest rate of about 17%, if I can't come up with the needed cash.

It's a fun tradition, so long as I don't get too wrapped up in who wins the game's opening coin toss, who makes the first first down, whether there will be an onside kick, or if the winning team's kicker will score more than 9 1/2 points. But it definitely puts some new wrinkles in the game. If I go over my answers, I think I should be rooting for Chicago more than Indianapolis, but it's fairly convoluted. Nobody's getting rich off this.

I mentioned our Super Bowl tradition a year ago, last February 4th, in "Miss a Week, Miss a Lot". Regardless of what the final outcome is, we're looking forward to the game.

Long Term Investments Are Out of the Question

Of late, I've found my attention span in the stock market is decreasing rapidly. I used to be of the standard "buy and hold" mentality, picking great companies with potentially great stocks. But the seeming inevitability of the buy and hold strategy was that eventually, the stock would go down - sometimes in a big way, thanks to a profit miss or product issue.

The result is that my investment strategy has morphed, first from holding stocks for the better part of a year to instead a few months, down to a month or two at longest, and most recently, it's been unusual for me to even hold a specific stock for even a week. Instead, I've been looking for momentum plays, with specific actions that would temporarily boost a stock or stem a drop. This change in strategy has made it easier to turn money over and better regulate the potential spikes.

By turning into more of a day trader, per se, I don't fall emotionally for stocks, but instead look at them as faceless entities with ticker symbols, whether it's AAPL, GOOG, TIVO, or others. In fact, I even prey on companies that have fallen on hard times to benefit from their eventual rebound. Even a 3 percent jump in a day or two might be enough for me to sell. As a result, I've made more in stock profits in January already than I did in December, and more in December than I did in all of 2006 prior.

I don't know if this is a recent stroke of luck or the result of good planning. But for now, we'll keep trading off CES and MacWorld, and earnings hit or misses. It's working.

Listening to ''Walk Down (KVA Club Mix)'', by Kyau & Albert (Play Count: 2)

Apple Stock Pays for AppleTV, New Airport Extreme

There's nothing more assured from a MacWorld Expo keynote than AAPL stock volatility. We took the bet last week that the rumors around Apple were true - that Steve Jobs could surprise us all and set the stock higher. We also bet that ahead of CES, TiVo, still undervalued, would pull of some tricks to elicit interest in their stock. So we overweighted the portfolio in a big way.

Thank goodness we were right. We're not wealthy by any means, but we cleared about $2k from 5 days of trades in the two, and that was more than enough to treat ourselves to the new $299 AppleTV and new Airport Extreme wireless base station, sporting 802.11n connectivity. The AppleTV will be a welcome addition to our new setup, including new DVD players and plasma screen, as we catch up with Silicon Valley expectations. The new Airport should get our wireless a bit more regular, faster and reach further. And as far as I'm concerned, they were free, and we have more than $1,500 in profits left over, to point somewhere else.

Listening to ''It's My Turn'', by Pete Tong (Play Count: 3)

401k Cap Rule Confuses Paycheck Reality

Quickly glancing at the direct deposit data in my bank would show you that over the last three pay periods, my take-home amount had steadily increased - without my knowledge of any raise, paid expense reports or even a holiday or end of quarter bonus. Having grown accustomed to the same number chiming in every two weeks, this variation, first two weeks ago, and even more odd this most recent Friday, caught my eye. Upon further investigation, it turns out I'm still the same old schmuck, and an obscure footnote on our 401k plan had kicked in.

I recognize the need to save for the future, and to start early is the best policy. Therefore, at the beginning of the year, I engineered my givings to the company 401k plan to be a good percentage, but not so high as to leave us short each month. Every two weeks, my paycheck is split in a dozen pieces, with the biggest chunks going to me, federal and state governments, and to the 401k. But our corporate plan, through Fidelity, is capped at a contribution amount of $15k annually. So, even if you jack up your contribution level to 20, 30 or even 50 percent of your salary, once you reach $15k in donations to the plan, it stops cold, leaving your future paychecks at the mercy of Uncle Sam, instead of being held for your future retrieval, tax-free.

At the rate I had elected to shuttle cash to the 401k, I hit my cap in early November, when only a portion of the usual amount was excised from my take home pay. This Friday's check, seemingly too high, had not taken out a single dime, and we won't see any further donations until the beginning of 2007. It may be an arcane rule, and somewhat confusing, but I plan to simply recognize it as something resembling a holiday bonus, and will forget about the future for a full month or so.

Listening to ''Rendezvous'', by Paul Oakenfold (Play Count: 6)

It's Hard to Pay BIlls With Eyeballs

In the late 1990s, during dot com mania, the Media Metrix rankings ruled the business world. Geocities fought with Yahoo!, AOL, MSN, Excite and others to show they had the most unique visitors, the most click-throughs, and the most eyeballs. Talking heads on CNBC were ecstatic when a company with major eyeball momentum was readying to go public. But, as we know, the only way your eyeballs will see a lot of these dot mania companies now is if you look in the obituaries or in the history books.

So, if you're not yet ready to focus on profit/loss statements, but think your company has some serious wind behind its back, how do you value yourself? Is it done through the number of users, the number of hits on your Web page? The number of units shipped, or megabytes served, and downloads or views?

Robert Scoble says in this new world, a new audience metric is needed, which he terms "engagement", or how actively participatory the audience is. It's not just about the raw number of eyeballs, but how involved they are - does coverage in said media result in click-throughs? Does a post generate comments and further linkage?

In case you think this is a bunch of flim-flammery disguised as new economy logic, the debate over statistics can make or break company valuations. Recently, Digg has been rumored in TechCrunch to be in discussions with News Corporation for a potential acquisition, to the tune of $150 million. But VentureBeat says that conflicting statistics on the site's reach may kill the acquisition altogether. After all, if you can't agree just how many eyeballs are on the site, then how can you decide how much each eyeball is worth, and eventually, what the purchase price should be?

There isn't a quick fix easy answer, but if a business model isn't sustainable to the point of profitability, then regardless of how popular a service is, it may never be worth it to an acquiring company, for whom the newly acquired service will just be a future drag on EPS and P&L. Just look at Time Warner/AOL. AOL had an incredible user base, but there was no synergy there. Time Warner didn't see the popularity of its content skyrocket, but instead, it eroded from within as AOL became a massive boat anchor. Trying to make a business based on click throughs, page views, user count, downloads, video plays and eyeballs doesn't work any better in 2006 than it did in 2001. I thought we had learned this by now.

Listening to ''Never Knew Love'', by Stella Browne (Play Count: 8)

I Bet Wrong On AAPL, Again

This afternoon, Apple announced blowout numbers, including profits of $546 million on 1.6 million Macs sold (1 million portables) and nearly 9 million iPods in the just-concluded quarter. As a result, the stock is up more than five percent after hours, to $79 a share, and I'm not benefitting, as I sold all of my AAPL shares at a measly $72.87 a week ago Wednesday.

I have followed Apple Computer stock closely for the better part of a decade, and started investing with a measly 25-share pickup in 1999. Though not always invested in AAPL, it's always been on my watch list. I thought I had the stock figured out. In 2005, along with my Google (GOOG) stock, I had made a good profit, but the heady times where I could expect a 2-3x improvement are long behind us. As a result, I've bought and sold the stock frequently, hoping to cash in by timing the dips and the peaks.

In the last two weeks, with CEOs losing their jobs over accounting stock options issues, I believed that Apple was still at risk for yet more bad news. I thought that even if they had a strong quarter, the uncertainty and potential restatement of previous quarters would be a drag on the stock. Beyond that, anyone who watches AAPL closely knows that even the slightest hint of weakness can cause a tidal wave of financial negativity. With a product transition to Intel processors, and the occasional analyst note regarding slowing iPod sales, I thought I was the smart one by selling my stock for a profit and getting out below $73. Maybe a decrease after earnings would get me a chance to buy in again in the mid to high 60s?

Clearly, I was wrong. Again. And now, while my money sits in cash at eTrade, those who kept the faith and tried not to game the stock are reaping the rewards. I still love my Macs, but I'd love them even more if I wasn't such an idiot investor.

Online Window Shopping: A New Macbook!

When it comes to technology at the office, I feel like the smallest child at the table who looks around for scraps and grabs whatever the big guys didn't take already. It may not be the best stuff, but it gets the job done.

My cubicle consists of two computers - one six-year-old desktop Mac (Dual G4 450), and a Dell laptop which likely has some kind of hardware defect that has the hard drive make a random clicking noise every few minutes or so. Similarly, each Blackberry I've had, since my first one in 2002, has been taken from someone who left the company, for whatever reason. Even the cell phone number I feature here on the site is one that used to belong to someone else. When I took it away, I simply e-mailed everybody and asked them to update their address books, but even today, after using it for 18 months, I get his calls.

That being said, I think it's time to make an upgrade - to a new laptop that works well on both Mac OS X and Windows. There's no need to be tethered to a slow, clunky, desktop, and no need to have two machines. Keeping our tradition of online window shopping, I headed to Apple.com to design the machine I want - now, and yes, I admit to choosing design over speed. I simply want a black one, and only the consumer level lets me do so.

The full setup, including 2 GB of RAM and a 120 GB hard drive, sets me back just over $2,200, plus tax. It's enough to make me buy it and issue an expense report, if only I knew it would be approved... see below.



Listening to ''Twin Town (Nick Warren Mix)'', by Ian Wilie Vs Timo Maas (Play Count: 3)

Online Window Shopping: A New Car!

It's often said that one of the biggest concerns any e-commerce Web site has is that too many people are filling shopping carts, and then abandoning them before the sale is complete. While some point to slow page loads, or difficulty in page navigation, I'd argue the Web is a fantastic way to go window shopping, both to compare prices, and to fantasize spending