Category: The Internet

Why YouTube’s Losses Are Much Smaller Than Expected

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Picture 3There’s been a lot of buzz about a month ago about how YouTube loses money and is a horrible business.  Most of these articles came after Credit Suisse’s published an estimate of YouTube’s losses at $470M a year.  This is a large number and people pounced on it. However, there is a good report i just read (PDF only and downloadable here) that challenges Credit Suisse’s assumptions with some more accurate numbers.  For instance, Amazon Web Services could provide storage for 50% of the costs included in CS’s study.  The survey ends with:

Regardless of what you may hear, YouTube costs are a fraction of any other company running similar operations. Most of Google’s bandwidth is free or near-free; its hardware is cost-optimized; and its data center costs are mostly committed or sunk. The top customers of our sourcing advisory service, whose prices are on average 20% better than the average market level, cannot deliver content as cheaply as Google’s massively scaled operation. Surprisingly enough, the ones that come closest are often thosethat leverage the scale of others through using cloud services.
But even if a fair accounting of its costs showed a loss, YouTube gives Google the ability to achieve needed improvements in lowering cost of other operations. Loud stories about YouTube’s losses can only help deter copyright lawsuits and demands from content owners. Skepticism is warranted — but be ready for surprise news of profitability in the future.

The article does explore the upside of allowing the market to believe the YouTube business is quick unprofitable.  With license-holders eager to renogotiate and reap larger profits, it’s better to all them to perceive that it’s much too expensive to host and deliver these files and thus license payments should be low.

But this is clearly wrong.  In yesterday’s earnings call, Google had this to say about YouTube:

“Monetized views” on YouTube have more than tripled over the last year, said SVP Jonathan Rosenberg. Executives would not say whether YouTube was profitable, although they did say it was on a trajectory to become a “very profitable business for us” in the “not too distant future,” giving a collective heart attack to analysts who have speculated about how much money the site is losing. In a follow-up call with analysts, CFO Patrick Pichette said that the company wanted to reaffirm that YouTube’s business model was credible. “There’s been so much press with all these documentations of massive costs and no business model,” he said.

Interesting to think about next time someone speaks up about how horrible the YouTube business is.

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Spying on Myself and LifeTracker

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Picture 3Fred Wilson had a post this weekend about MyWare and his love of it. I couldn’t agree more as i’m a huge proponent of tracking my own activity. For instance,

Fred wrote that he likes to keep this data because, “I am interested in this sector of implicit behavior data. I believe that publishing the things I do on the web will allow web services to get smarter about me and give me better experiences.” I keep track for different reasons.  I actually like to keep data about myself. I find it interesting and i use to remember events of my life.

But i see it going even further.  What i wrote was:

When i look at the web, i see people trying to capture experiences. They capture photos on flickr, videos on youtube, and notes with people on email. Their life is being tracked but not in a comprehensive way.

I could imagine a site – call it “Lifetracker.com” which tracks all the things you do. You plug in last.fm, gmail (or other email), google voice, flickr/picassa, twitter, credit card (mint), youtube and other web services. I then matches 3 things: the data, the contacts, and the time. It creates a timeline for you and marks who you’ve been interacting with and when. There’s an API so each new web service you start using you can plug into it.

There are several benefits: (1) as you mentioned, you can give this data to services for recommendations; (2) you can search your life. If google is web search, twitter is real-time search, this would be “me search”; (3) just like we don’t remember phone numbers anymore b/c we put them into our phone to retrieve any time we want, we can start throwing information into lifetracker such as meeting notes, audio recordings of phone calls, etc. so we don’t have to write stuff down and remember it. Use the cloud as a memory storage instead of your brain

I see this coming and it’s really exciting to think about it.

I do think it will happen.  What do you think?

Marc Canter’s Big Plan

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I last saw Marc in Paris
I last saw Marc in Paris

Over the past 8 years i’ve become friends with Marc Canter. I first met him while working at AOL as we needed new and fresh ideas there and boy did he have them.  We asked him again to come and help us out at Ruckus and he delivered again.

Marc lives in the San Francisco area – or at least he did. Marc has announced that he’s leaving heading to Ohio. You heard that right – OHIO. Why? Because he has big ideas and sometimes the best place to do them is not in the Bay Area. He’s also planning on tapping into some US resources that haven’t been utilized – unemployed people. His plan involves the unemployed force, a non=profit, private equity, grants, and lots of new ideas. You can read about it more here

I wish him the best of luck and hope to drop into OH soon to hear more about it.

Let's Talk About Revolutions (in media)

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Pop!Tech 2008 - Clay Shirky

I reread this morning Clay Shirky’s great SXSW piece about the media business and i wanted to share some of his thoughts here.  Let me go through the end of the article a bit.  He starts:

Elizabeth Eisenstein’s magisterial treatment of Gutenberg’s invention, The Printing Press as an Agent of Change, opens with a recounting of her research into the early history of the printing press. She was able to find many descriptions of life in the early 1400s, the era before movable type. Literacy was limited, the Catholic Church was the pan-European political force, Mass was in Latin, and the average book was the Bible. She was also able to find endless descriptions of life in the late 1500s, after Gutenberg’s invention had started to spread. Literacy was on the rise, as were books written in contemporary languages, Copernicus had published his epochal work on astronomy, and Martin Luther’s use of the press to reform the Church was upending both religious and political stability.

I want to draw the obvious parallel to today’s revolution in publishing and in technology. I belive that just having email and IM has increased the literacy in America (maybe the world).  Not 15 years ago no kids were daily expressing themselves in written words, now they do all the time.  In 1996, i would frequently get emails in ALL CAPS and poorly written.  Now it’s a must-have skill.  But let’s continue with the speech….

What Eisenstein focused on, though, was how many historians ignored the transition from one era to the other. To describe the world before or after the spread of print was child’s play; those dates were safely distanced from upheaval. But what was happening in 1500? The hard question Eisenstein’s book asks is “How did we get from the world before the printing press to the world after it? What was the revolution itself like?”

Chaotic, as it turns out. The Bible was translated into local languages; was this an educational boon or the work of the devil? Erotic novels appeared, prompting the same set of questions. Copies of Aristotle and Galen circulated widely, but direct encounter with the relevant texts revealed that the two sources clashed, tarnishing faith in the Ancients. As novelty spread, old institutions seemed exhausted while new ones seemed untrustworthy; as a result, people almost literally didn’t know what to think. If you can’t trust Aristotle, who can you trust?

I find this same thing is happening with columnist and journalism.  Poor articles just get overlooked or debunked in comments.  The threshhold for well researched facts is higher as the audience is double-checking you every step of the way.  What happened with Aristotle is happenign today with every sports, politcal, and news writer in the world.

During the wrenching transition to print, experiments were only revealed in retrospect to be turning points. Aldus Manutius, the Venetian printer and publisher, invented the smaller octavo volume along with italic type. What seemed like a minor change — take a book and shrink it — was in retrospect a key innovation in the democratization of the printed word. As books became cheaper, more portable, and therefore more desirable, they expanded the market for all publishers, heightening the value of literacy still further.

Sound familiar to anyone? Can you say BLOG or TWITTER – such a simple concept.  Take publishing an article on a web page and shrink it to a blog or 140 characters.  What seems like a minor change has some profound responses.

That is what real revolutions are like. The old stuff gets broken faster than the new stuff is put in its place. The importance of any given experiment isn’t apparent at the moment it appears; big changes stall, small changes spread. Even the revolutionaries can’t predict what will happen.

Old stuff is indeed getting broken. Newspapers are gone or going fast.  Magazines are next.  Paper is being replaced by netbooks, iPhones and Kindles.  These devices are embracing different technologies and shorter-form content.  This is the real revolution that’s happening in front our face.  That Time Magazine you have in your mailbox will be a story you tell your grandkids about, “hey kids, get this, i used to walk to the mailbox and pick up a ‘magazine’ that had stories in it written down, printed once a week and sent to me.” and they will look at you the same way i look at my grandparents when they talk about a world with radio programs only and no TV.   Our new world has more content, better content, that is more easily shared and discussed – and it’s a beautiful thing.

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4 Reasons Twitter Makes My Life Better

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Image representing Twitter as depicted in Crun...
Image via CrunchBase

There’s an article i read today (thanks to Lizard) about how Twitter can you a better and happier person.  The reasons listed in the article are:

  1. Transparency & Values: Twitter constantly reminds me of who I want to be, and what I want to stand for
  2. Reframing Reality: Twitter encourages me to search for ways to view reality in a funnier and/or more positive way
  3. Helping Others: Twitter makes me think about how to make a positive impact on other people’s lives
  4. Gratitude: Twitter helps me notice and appreciate the little things in life

I find all of these true.  Sometimes i want to post a tweet about my life and i have to reflect about what i’m really doing and how it’s interesting to others.  It often makes me adjust what i’m actually doing – and if i don’t do that then it makes me realize how i’m actually living my life.  In that respect, it’s quite helpful.

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Ze Frank Video

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Last night i watched this video of Ze Frank (below).  He’s a kooky guy but totally entertaining. I do like that he takes common elements of the internet and uses them to better connect people and to create social happenings and actual events and items.   Instead of people trying to create products and platforms, he’s actually trying to create content in innovative ways – which i find both interesting and refreshing.  I think some of the things he posted in here were just awesome.

Picture 8

First, he found this song on the internet that a dad was singing for his daughter called “I’m going to whoop somebody’s ass”.  He took the song asked his fans to sign along and interact. The fans did that and more.  This song spawned countless numbers of remixes. A video was created. A video was story boarded by a member of the “audience”, then another member offered portrait sketches to anyone who would help fill in the video. The video was made.  The remix appeared in a movie, in a car commercial and countless other places and suddenly the creator – a unsuspecting PhD-turned-preacher nammed Ray, now finds the trajectory of his life shifted, as he is inundated with countless versions of his song, in audio and even video format.  Awesome.  (below is a video remix of Ray’s song)

[youtube=http://www.youtube.com/watch?v=sbGtefy_Uqw]

Ze does a lot with songs.  Another intance, he created a song for a woman who wrote in that she was scared of the dark and he made up a song for her.  You can hear that song by clicking on the image below

Picture 2Another fun thing that he did was called “youngme / nowme” where people take picturs of themselves when they were young and recreate those pictures now.  It’s hilarious to see what people have done.  Some are simple, some are very involved.  In both cases, they are fun to look at.  He’s got a whole site with the submissions here 2gfdyuszhp

Picture 3Picture 5

Picture 6

There are lots of examples of cool things Ze has done in his talk.  These are just a few.  I always enjoy his creativity and if you have some time, it’s worth checking out.

The iPhone and the world of computers

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I’m an iPhone users and i love it.  It has transformed my mobile phone usage and dare i say, my life.  With the internet at my fingertips, i no longer go more than 10 seconds without knowing the answer to a question.   I have come to realize that the world of computers and the internet will always be with me, following me around and enriching my life.  It also makes me realize that my relationship with my computer is going to change.  Because i can Google, email, YouTube, Facebook, and check sports scores from my cell – my desire to have my computer near me is dwindling.

The new iPhone 3GS makes me think about the landscape of the computers out there.  If you don’t know it, there’s a new type of machine that’s becoming popular called The Netbook.  It’s a $200-400 machine that is quite small and sometimes comes attached to a wireless contract so it can be connected at all times.  In this regard, it is very similar to a cell phone purchase except in a bigger form factor. (click here to check out HP’s 200 dollar machine)

When i think about the machines out there, i think of this continuum:

Picture 8One thing that is interesting is how Apple is has high priced machines in their Macbook Pro’s and Air devices and “lowend” machines in their iPhone.  Whatever market you’re at, Apple will have the slickest machine.  Microsoft, on the other hand, has less slick highend machines, and netbooks on the lowend.  Personally, i like Apple’s direction more but it’d be even better if they had a tablet or smaller sized laptop that was an iPhone/laptop hybrid for $400. I think the regular PC starts to disappear and all sales are Netbook sales.  Why would anyone pay $1000 when they can get a decently powerful machine for $200?

Picture 9

What will be great is the day day when all i have is my cell phone and i just plug it into monitors and keyboards when i want to work at a desk.  My iPhone cradle gets a lot more functional and my need for a second machine disappears.

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Newspapers & Craigslist

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As everyone talks about the death of newspapers, i’d like to remark on one of the majors elements in this death spiral: Craigslist.  To me the two major killers of the newspaper are:

  1. Decrease of authority & differentiation
  2. Lack of classified revenue

First, the decrease in authority and differentiation.  Every web site and publication needs to be an authority on something, anything.  Newspapers in the past were authorities for:

  • local news
  • international news
  • sports
  • entertainment

Over the past 8 years, they have no become the authority for only one of those: local news.  International news is dominated by CNN, Reuters and others who focus explicitly on that area.  Similarly, sports is dominated by ESPN and Fox News and Entertainment has a variety of outlets that provide much more in depth coverage and reviews than newspapers ever did.    This decrease in authority minimizes the importance of newspapers to readers.  For most categories listed above, it’s a nice piece of reading material to have but by no means necessary.

CraigslistRevenue_270x224

The second piece is Craigslist.  In 2000, newspapers pulled in $20 billion in revenue from classifieds. That went to $10 billion in 2008.  So, in 8 years revenues for newspapers got chopped in half (stats here).  Where did this money go, most of those services are now free on Craigslist.   Craigslist took $10 billion out of the industry and pocketed about $100 million of it.  To be exact, Craigslist is pulled in $80 million as of April ’08 (stats).  Who knows what that will be for 2009 but prob at or around $100k.  With a  staff of 28 people so that’s pretty damn good.

Imagine that, a staff of 28 people is decimating an entire industry.  That is the true power of the internet.

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