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