$how me the money!

So its been 2 1/2 years, and still no business model from Twitter (even with a co-founder by the name BIZ Stone...c'mon!). Obviously this method isn't anything new for the Web 2.0 pioneers in social media...Facebook has tested the limits of this practice, and still hasn't released a viable model. This youthful style of ready-fire-aim has been questioned by the critics and traditional business analysts time and again, the response always being (in either an aggravated or snobbish tone), "we'll figure it out!" And its hard to argue with, seeing as how Larry and Sergey did it 9 years ago with Google. But search is certainly different than social media, and the latter has only been mildly validated by MySpace, who actually entered the space with the intention of becoming a PROFITABLE enterprise.

Twitter has maintained that it does in fact have dollar-earning plans for its micro-blogging community, and they "plan" to announce those next quarter (they've already hired their very first head of Product Development). But they should really stop outright dodging the question, especially co-founder Evan Williams. Every time he's asked, he makes it seem like they're a bunch of kids who got too much money and scaled to a point where their out of their league. For the record, I still very much believe in Twitter's viability; they have a very loyal and outspoken user base that is growing very healthily, their distribution has continued to open up all across the social stratosphere (they've just partnered with Facebook Connect, MySpace ID and Google Friend Connect), and their application is being used in hundreds of different contexts to increasingly valuable niches. One niche in particular is the socially apt finance world. While the industry itself may be the Grinch that stole Christmas (and its bonuses), StockTwit, a recent startup, just raised $800k in a Series A this month (via CrunchBase). Its web applications like these that spread Twitter's utility around in healthy doses. The virtual infrastructure is certainly in place, it is simply a matter of solving the monetization problem. And I really hope its not ad-based, because the most recent attempts companies have executed on Twitter in hopes of connecting on a more personal level with their customers have been all but disgusting and inauthentic.

look daddy, straight a's!

What the son isn't pointing out is that the classes are workshop, home ec, and Enligh as a Second Language. And herein lies the problem currently facing the advertising and marketing world. With the country now officially in a recession, advertising budgets are the first to get cut, specifically experimental and unquantifiable media. This means companies are looking to areas such as direct response ads (which have grown 27% YTD while most other ad products have decelerated), which have easily derived ROI's. This is basically an attempt for the marketing department of a company to prove itself to the board so the VP's don't get chopped as just another gangreined limb.

Unfortunately, we are in a time when companies need to reach their customers in the most cost-effective and relevant way possible, and more often then not that does not include media with easily derived ROI's. We are beginning to see this take effect in the digital ads space, specifically in display ad sales and the declining rate of CPM's. Firms are simply realizing these impression metrics simply aren't as valuable as everyone has been thinking. What needs to happen is the emergence of an entirely new online advertising model (or a paradigm shift to something like mobile), but unfortunately for the next however many months, companies simply won't have the cash to experiment and execute. Ad networks and advertisers alike should really begin (or should have already begun) rethinking their traditional models and find a way to monetize on alternative forms of digital media or, God forbid, without the reliance on advertising altogether. Either way, the model's broken and no one has the tools or manpower to fix it. We'll see a significant drop in the online advertising market over the following year as a result, but hopefully the old sayance "necessity breeds invention" will hold true and we'll see a beaute emerge.

Until til, keep your heads low and keep posting those A's.

Neilson online advertising spending breakdown (via AlleyInsider)

ad [hoc] irony

Well, the most recent advertising forecasts are out...and we all wish it was the 60's on Madison Avenue, because even if the industry was in the same state it is now, at least we could pound some scotch at the office.

John Janedis from Wachovia cut his forecast from 1.5% growth to a 0.8% decline in ad spending this coming year. Most of the big ad firms are cutting jobs. Two WPP subsidiaries (Landor and Brand Union) announced cuts last week, as did Starcom MediaVest and TBWA/Chiat/Day (150 and 20 people, respectively).

One silver lining I see to this mess in the ad world is the completely necessary disruption of failing business models, and the forcing of creative, economical and valuable ad models to emerge. And its about time. Right now I'm looking to Hulu to lead the charge on web-based video content, they've definitely got something. And with more people viewing the Thursday night SNL special after the broadcast (via DVR or online) rather than live, that "guaranteed" audience TV networks once relied on are migrating from 10 ft to 2 ft experiences in a hurry.

It is a bit ironic how one of the most popular shows at the moment depicts a dated (albeit glamorized) advertising age that is run on a network (AMC) barely scraping by on the advertising it runs during the show's breaks. I think that's too many levels to even be funny, its just confusing and hurts my head. Need more scotch.

ohh, apple's STOCK is dying, not its ceo. gotcha.

While Steve wittingly quashed the rumors of his terminal illness once again to open his keynote address today, the delivery of his new products was underwhelming...mainly because the products themselves weren't the mind-blowing, industry-altering gadgets the public was expecting. And their stock suffered; down nearly 4% today, hitting lows not seen since April.

The products revealed were a slimmer, sleeker iPod Nano, update v2.1 for iPhone (coming Friday...fingers crossed for copy/paste function), and HDTV availability on iTunes. See what I mean? Nothing too fancy or too interesting. But hey, they have really cool colors for Nano, so at least your iPod won't look as depressed as you, Apple shareholder!

Full video of the keynote here.

spider with a viral bite (oh, and its enormous)

So, like, I know the Brits are weird and all...but this? A giant robotic spider repelling down the side of an office building in Liverpool? I don't quite follow. There are speculations on Engadget's comments section that its a viral campaign for Ghost in the Shell, a popular anime program (it resembles one of the characters).

Whatever it is, its certainly viral. Just like that full-sized UFO crashing near London Bridge promoting the Vauxhall Insignia car in the UK, its another attention-grabbing installation...not sure if its directing people towards cars or anime, but hey, its certainly interesting.

buffer.me from shitty design

As reported on TechCrunch this morning, Buffer.me has launched a private beta site, bringing sleek and intuitive design to the Youtube experience. And its about damn time...the Youtube site has become less and less appealing (search function, video UI, cluttered layout, etc), and has caused me to revert much more to watching Youtube videos only when they are embedded on third-party blogs, news or websites. The other video sites out there have a sleek, appealing layout and UI (Hulu, Vimeo), why can't Youtube? Well, wish no more. By the way, this whole site was concieved and designed by one dude.

Buffer.me

aza raskin, superman for UI

Ubiquity for Firefox from Aza Raskin on Vimeo.

Aza Raskin, the boy-genius son of famed "human-computer interface" developer Jef Raskin--responsible for Apple Pascal and the Macintosh Project for Apple Computer (and a few other remarkable things)--has struck a chord within the relationship between language and the Web. He has created an interface that allows you to use natural, informal language to call upon certain Web services in a very organic fashion. "twit this," "map this location," "translate this," "highlight." Very good stuff.

Aza, by the way, gave his first UI talk when he was 10 years old. He dropped out of middle school and high school, went to the University of Chicago to study math and physics, and researched Dark Matter (which he followed into an ultimately abandoned PhD program at CalTech). He also studied at the University of Tokyo, though U. Chicago was his only fully completed stint. He is also the founder of Algorithm Ink and Songza. Yeah, he's kind of a big deal.

update: students who hacked the MBTA get gag order lifted

Via SlashDot:

"Judge O'Toole said he disagreed with the basic premise of the MBTA's argument: That the students' presentation was a likely violation of the Computer Fraud and Abuse Act, a 1986 federal law meant to protect computers from malicious attacks such as worms and viruses. Many had expected Tuesday's hearing to hinge on First Amendment issues and what amounts to responsible disclosure on the part of computer security researchers. Instead, O'Toole based his ruling on the narrow grounds of what constitutes a violation of the CFAA. On that basis, he said MBTA lawyers failed to convince him on two points: The students' presentation was meant to be delivered to people, and was not a computer-to-computer 'transmission.' Second, the MBTA couldn't prove the students had caused at least $5,000 damage to the transit system."

Nice.

weekly diy: ceral box to gift box

So you bought the perfect gift for your buddy's birthday, but realize a half hour before the party that the nicest thing you have to wrap it in is a Duane Reed grocery bag. I feel your pain (and embarrassment). Well, with this DIY you can cut open your favorite cereal box and a couple of folds later you've got yourself a box. Bueno.

The folding steps are relatively precise, so I'm sending you over to instructables.com to check out the exact method. There are about 8 folds, then a gluing step. That's it.

Materials needed: cereal box, sharpie (to decorate).

Tools needed: glue gun, dexterity.

Instructables step-by-step.
J.J. Abrams talk @TED on box design that seemed to inspire our DIY-er.

walmart noticing nobody wants to buy cd's...bingo

WalMart may have the exclusive release of ACDC's new album dropping this fall, but that might be some of the last music the retailer will carry. Like everyone else, they have finally realized the lack of demand of music through mediums such as WalMart (the decline began at those obsolete brick and mortar music stores like Tower Records, Sam Goody, etc). And the demand curve for music at WalMart is even more kooky, because it is based on the impulse purchase demand and not music listener demand. That's how WalMart, Target and Best Buy sell the vast majority of music in the US. People who want to buy music use iTunes and Amazon, people who want to buy dishwasher detergent and cereal and happen to walk past the music section and see Tim McGraw on the shelf for $6.99 buy music at WalMart. As soon as they start to take away that inventory, people will obviously stop buying, but those sales won't carry over to online music stores...they'll just kind of die.

Somber, just like to music industry. Bronfasauras, take note.

aside: aapl worth more than goog

Bam. For at least this moment, Aug. 14, 2008 @12:01pm, Apple's market cap is $158.93B, which just happens to be slightly more than Google's $158.61B. Ouch. They both look pretty shocked to learn it, too.

schmidt to cramer: mobile's gonna kick desktop's ass

Everybody has been talking about mobile advertising like its going to blow everything else out of the water. That talk's about ten years tired now, and still...nothing. Its a tough problem, one that faces all forms of advertising: how do we not annoy the crap out of our consumers? There have been examples of mediums that didn't solve this problem (who in fact used its existence as a means of accessing consumers). Those would be pop-up ads on your browser. The endless sea of pornography and gaming sites covering your entire screen...yeah, that builds great brand image.

So when Eric Schmidt goes on Cramer and says that Google will eventually make more money from mobile ads than desktop? Big statement, especially considering that the problem is still, well, a problem. Schmidt went on CNBC's "Mad Money" last night to discuss the mobile ad concept with Cramer (full transcript here), and was quite optimistic of the role mobile will play in Google's future. He also reiterated that, even though www.google.com is ranked #2 on the web in traffic (behind Yahoo), there will (hopefully) never be any ads littering the site's real estate. "We absolutely are not going to sell that page," Schmidt told Cramer. I think we can all understand the value of keeping that page, and by extension the company's image, clean.

But how to make money in mobile? Cramer poses the question with regard to the greed of wireless carriers (maybe Android is the answer??). Even if Google figures out a smart and non-invasive way of placing targeted ads (as they most certainly will), is it possible to structure the economics in a way that makes enough money (at least comparably to their desktop model)? AlleyInsider also brings up a good point: if Google were to make more money in mobile than desktop (currently bringing in over $20B for the company), the mobile ad market would have to grow from less than $1B to over $50B (SAI is assuming that Google takes about 50% of the market). That's a lot of growth. Just please, no location-based coupons like that hairbrained Starbuck's example.

weekly diy: time hater work around for VMware licensing bug

So this week's DIY is kind of an excuse to post on VMware's big licensing bug that is prohibiting users running their enterprise virtual ESX server from accessing their systems, but its a good lesson in workarounds and where to find them.

This morning it was discovered that anybody powering up their VM servers on ESX 3.5U2 in enterprise configs will be met with a brick wall. That's a big uh oh for companies running their systems nearly entirely over the virtual servers provided by the software (ESX doesn't require an underlying OS, it simply runs directly on the server hardware). So, when you go to boot up, and you get a general error message and have no idea what to do? First, talk to your IT guy. But if he doesn't know? Go to the community forums for the company producing your software. In this case, its VMware Inc, and their community boards today are buzzing with this bug. The workaround comes courtesy of LeoKurz2, and has to do simply with setting the date back to any day prior to August 12 (today). Apparently the licensing bug runs an expiration error once it hits August 12, so you can set the date of all ESX 3.5U2 hosts back to the 10th, or even 11th of August, and it should work just fine. There are a couple of ways to do this outlined on the forum.

The lesson is to always go to the source. IT help desks aren't always the most efficient (certainly with regard to time) way to fix a technology problem, so go to a discussion directly related to the issue: forums hosted by the software provider. You'll usually find a lot of people with the same problem as you, and solutions provided by intelligent people who don't get paid to sit on phones all day. Of course, the problem itself is usually fixed with a patch released to users within a day or so (sometimes within hours), but if you need that "quick fix," so to speak, go forth and forum.

virtual turnstile jumpers met with physical restraining order

So everybody knows kids from MIT are wicked smart. And when they hack systems, they usually like to brag about it and get as many eyes on the security flaw (embarrassing the architect) as possible. But these three kids who hacked the MBTA fare system? They're holding a conference on their hack.

DefCon, the world's largest "hacker conference," which takes place in Las Vegas this week, is host to the planet's most brilliant minds in computers. Late last week, Zack Anderson, R.J. Ryan and Alessandro Chisea announced they were holding a talk entitled "The Anatomy of a Subway Hack: Breaking Crypto RFIEDs & Magstripes of Ticketing Systems." Unfortunately, they hadn't quite warned the Massachusetts mass transit system authority--who operates the fifth largest transit system in the US--about their intentions. So they were essentially going to teach people how to hack their way out of subway fares, and not give the transit boys enough time to reengineer their system.

How did they halt the talk? Not through circuits and internet connections, but through a restraining order limiting their physical presence. Pretty sneaky, even for government boys.

According to Wired's Threat Level blog, the three students had figured out a way to reverse engineer the magnetic stripe on paper passenger tickets (called the CharlieTicket), and cracked the smartcard tickets, or CharlieCards (which accounts for almost $500,000 in revenue per weekday).

Maybe the kids shouldn't have taglined the talk "Want free subway rides for life?" Slightly conspicuous. Sidenote: the NY Transit Authority just upped the fine for jumping turnstiles to $200 (up from $100).

what does 60M downloads mean? its not a device, its a platform!

Though there may be a few rotten apples in the bunch (ahem, I Am Rich), what the App Store has proven is that iPhone is not just a device, a handheld, smartphone, or any other name for a mobile; it is an entirely new software platform. Steve Jobs is predicting "half a billion in sales...soon. Who knows, maybe it will be a $1 billion marketplace at some point in time," he told the WSJ this morning.

According to Silicon Alley Insider, App Store sales are up to $30M, with the top ten developers netting $9M. Remember, Apple keeps a third of that for placing your app on their platform and marketing it through the App Store, as well as providing the tools to develop (if you haven't played around with the new iPhone SDK, you certainly should).

As these web and mobile applications become more readily accessible for the average consumer (not that iPhone consumers are average), they become more pervasive. Twitter, Loopt, Evernote, who cares how they monetize? Google didn't know at first either. Once these guys can access a broad market, they'll have the customer base and data to do great things, whether its in advertising or whatever other business model they stumble upon. One thing is certain: the opportunity in the mobile device market is only just being realized, there's still a whole lot more to discover.

Some cool non-iPhone exclusive apps: BaseCamp, LiveJournal, GrandCentral, LiteFeeds, NextBus.