Nat Turner

Corporate domain assets

I came across an interesting post today from Paul Kedrosky. It's pretty well known that every good domain name is basically taken, but what's even more intriguing is that a many of them are owned by large corporations.  I've come across this several times.  When thinking about names of a previous company, several times I kept running into public companies listed as the owner in the WHOIS.  This is the worst, as you know they'll both be impossible to buy from (countless red tape, no one knows who has say over the name) and they'll most likely never use. It sure does make you think about how they should either figure out how to use them or let someone else (could take in plans, the domain name is the prize, they keep some ownership).  Either way, there definitely is a lot of unused potential in these assets.

Congrats to YouTube

Congratulations to the entire YouTube team on what must be a very exciting day. As I'm sure everybody has seen, YouTube has finally been acquired by Google. The price tag was $1.65 billion, all in Google stock. I'm a big fan of this deal. I actually had the chance to meet Chad just over a year ago when YouTube was in its infancy (barely into the Alexa Top 100,000!). We met at a small cafe in the Valley before I even knew what online video was all about. I'll always remember the conversation.

I'm very excited to see what transpires from the merger, especially in regards to advertising. Will Google implement an AdWords-type platform to sell short video ads against YouTube traffic? A lot of fun questions are yet to be answered.

Is Facebook next?

Is there a bubble?

Is the internet in a new bubble? I think so. Before I get in too deep, let me first begin by saying that I was by no stretch of the imagination plugged into the first bubble. I was both too young and too out of touch to have experienced it all. But at the end of the day, I can't help but notice what's going on around me, and what I think this may lead to.

This summer I have experienced many extraordinary things. I met some amazing people, gained a ton of experience, and had a lot of fun doing so. Yet I can't help but notice that many people have been completely consumed by this "Web 2.0" phenomenon. They live it, breath it, and work in it. Some quit there jobs to join the crowd. Sure, like last time, a handful of well-built companies will break out of their startup shell (no pun intended for VideoEgg) and remain. But, just like last time, hundreds more will fail.

This time around though, I think we will experience a cultural bubble more so than an economic bubble. By definition, an economic bubble "refers to a market condition, where the prices of commodities or asset classes increase to absurd levels (that no longer reflect utility of usage and purchasing power)" (Wikipedia). Sure, this time around people will lose money, but this time around we also don't have IPO's from countless internet rockstars with only ideas (yet). In other words, I believe startups launched in 1999 had further to fall than startups launched in 2006, on average. The platform seems to be inherently lower. Some of this most certainly stems from VC's remembering the sting of the last bubble, and second-guessing their basic market reactions. This time around, the blunt of the fall will land mostly on the startup owners themselves, and not on the mass market. If "Web 2.0" as we know it crashed tomorrow, my neighbors back home probably would never hear about it, yet they sure as hell lost money last time around.

I think this is a key distinction of this latest craze. People left and right are launching companies based only on features and tools, and not on economically-viable business models. Most provide small conveniences at best. This can also be characterized as almost natural, as the barriers to starting a business have been greatly reduced. Some have received venture funding, and the common exit strategy for most is acquisition. Companies become the talk of the party when it’s rumored that they may be picked up by Google. Yet at the end of the day, it seems as though nearly every “Web 2.0” acquisition up to this point has been a recruiting tool more than it was a purchase of technology or customers. For example, I may be wrong, but it appears that Yahoo! purchased nearly identical userbases between flickr and del.icio.us, yet they added several new internet darlings to their team. This trend can only last so long, and only time will tell if their influence will justify the price tag. Just like last time, there are only so many great entrepreneurs and visionaries to go around. There’s a reason the most successful venture capital firms invest in teams, and there’s also a reason why there are only so many successful venture capital firms. I think in this next inevitable "crash," many people will wake up one morning and realize they don't have another "Web 2.0" party to attend. A large component of it will be this cultural shock (Disclaimer: I did attend several of the Bowling 2.0 matches for VideoEgg :) ). Web 2.0 has taken on a culture of which I have never seen.

Video is a great example of the new bubble, and I think is the most logical place to look for it to start bursting. I remember reading that there were over 170 internet video startups at one point (if anyone has a link to this article, would love the link). Most are simply “me too” companies that sprouted up once YouTube surprised everyone. It also goes without saying that internet video is also the most expensive new internet segment to operate in, with YouTube rumored to be hemorrhaging millions in bandwidth costs per month. Most of these websites will get to a point where they either have to start charging their users or blast ads on their videos. And unfortunately for them, the former will result in their users moving on to the next service that doesn’t charge, and in the latter the market for video ads just doesn’t exist yet. In the first bubble, it turned out that companies with “brilliant” ideas weren’t practical and couldn’t get market adoption. In this next bubble, it looks like the players have the consumer adoption (to a degree), but will struggle with monetizing that traffic. I bet a domino-rally will ensue once the first venture-backed video startup folds under the pressure.

Thoughts welcome. And up next, my thoughts on the future of video ads.

Corporate Web 2.0

So yesterday I got to visit the Sony headquarters in San Diego, California. One great moment came out of it. This sign was posted on the door before we went into the presentation. Hilarious ending to an interesting day. I guess this sums up what these corporate beasts think of the newest bubble.

On a similar note, while I certainly love and enjoy many sites that are dubbed as being "2.0 (Flickr, del.icio.us, and digg to name a few), I think that there are hundreds of others that just don't make the cut. They are either fads, outrageous ideas that the mainstream community just won't use (aside from the readers of TechCrunch), or simply a mashup of so-called "next generation internet tools," with no real concept or business model. Sony, just like many other large corporations, is simply trying to figure out what this all means for their business and business in general. Whether or not these sites stand the test of time is going to be an interesting question in the next year or so to come, and one that I think many will find to be false.