Google’s senior executive exodus continues. YouTube’s head of monetization, Shashi Seth, has now left the company to become the chief revenue officer of Menlo Park, Calif.-based startup Cooliris. In his new job at the startup, which has raised some $3 million in Series A funding from Kleiner Perkins Caufield & Byers, Seth is going to help develop a new business and advertising model.
“I think part of being a Googler is that you like smaller environments, and I think Google got a little big for me,” says Seth. He was appointed as YouTube’s head of monetization in January 2007. It has been a thankless job.
Despite being the largest video-sharing web site, YouTube is still finding it hard to make money. My sources say that YouTube made around $80 million in 2007, a number that could grow by more than 50 percent this year to around $125 million. A Bear Stearns report estimated YouTube revenues at around $90 million for 2008. I’m not sure if $120 million-$125 million is going to make Google CEO Eric Schmidt, who has been publicly talking about YouTube and its money-making potential, happy.
What stands between YouTube and money is the lawsuit by Viacom, as it makes owners of legitimate content a tad nervous. There’s clearly money in partnership content. I was recently talking to some folks that are close to Hulu.com, and they pointed out that thanks to all the legit content, the demand for ads on the site is pretty high; the company, they said, could easily do about $25 million in revenues. Given how little traffic they have in comparison to YouTube, that’s an impressive number. Of course it doesn’t move the needle for its primary backers, NBC and News Corp.
In comparison, the number of visitors to YouTube continues to rise, making it by far the most dominant player in the market. So much so that even Hulu decided to set up a channel on YouTube to attract traffic to their site.

Glitchy software isn’t just annoying, as more and more objects get electronic brains in the form of chips, it can be deadly. Automatic drug injection patches to the steering systems on advanced cars are powered by semiconductors that rely on software to tell them what to do and when. That’s why Coverity expects to make between $25 million and $30 million in 2008 selling software that spots potentially bad code during programming.
The five-year-old San Francisco-based startup has raised $22 million to expand beyond its core source code analysis product. The money, from Foundation Capital and Benchmark Capital, will allow Coverity to start selling its more than 400 customers products, which help developers reduce the mistakes made during the software coding and architect process.
Coverity CEO Seth Hallem tells me the products will compliment existing application lifecycle management products from Mercury Interactive and Rational Software (bought by H-P and IBM respectively). So far, the company’s discipline in waiting to take venture capital is unusual and is certainly responsible for its decision to sell its software not as a service, but in an old-school package. Hopefully its decision to let the venture guys in will help it continue its impressive growth.

I was talking to a friend who had commissioned some web-based market research recently. He is an eminent, big brained technologist whose team is building a service for affluent consumers who own multiple computers and connected devices.
He was kind of amazed at the techniques used to pull together a sample, and how skews in the population were adjusted to compose a group of people that mirrored a hypothetical target audience. If the researchers know the incidence of that audience within the general population, they can perhaps estimate a market size as well.
This got me thinking about how literally every market research carries bias, some of it intentional, as in this case, but more often hidden. I remember one market researcher I worked with sitting me down early in a project and asking “Which sacred cows are you goring this time?” a sly way to get at my agenda and identify the biases I was carrying into the project. There were several.
In my friend’s project, a deliberately skewed sample was constructed to profile a population’s interests and behaviors. It sounded like the first step was to glean a homogeneous population out of a (non-random) group of web surfers, do some profiling on that population and then recruit focus groups out of it to validate their interests in prospective offerings. The precision of the study depends on the existence of a population that one can identify (consumers making >$150,000/year who own 3 or more connected devices) and reach (Adwords? Walt Mossberg?) with a new product or service.
This kind of market research project exists to validate somebody’s ideas or existing plans, i.e. buying courage and resolve. Or in organizations where purse strings need to be loosened, buying putative evidence. (”The research came back and they loved it!”)
A good demo presented with well, by an enthusiastic junior product manager can almost force people to say they love your idea (i.e. can introduce a powerful skew). And how seductive is the focus group ritual! The voyeurism of the one way mirror, the ruthless, puppetmaster culling of possible competitor plants and trouble makers from the participant’s list, the catering, the darkened room and the swanky chairs!
As Seth Godin says in Free Prize Inside “The reason for focus groups, market research, and the like is the continuing mirage that somehow, if we do enough work, we can figure out in advance whether we have the right idea or not.”
Fortune telling seems to always be conducted in a darkened room.
I think market research can be really risky, particularly when desired results are already known. The energy and dollars put into the project almost always exaggerate the perception of the research instrument’s accuracy and precision.
There are a lot of reasons to hire third parties to help manage research projects, but for me the most important one is to identify and document the effects of research biases. Unfortunately epistemological discussions tend to distract from organizational resolve, which is, in fact, what we usually pay research contractors for.
So: know thy skew. Which sacred cows you are turning into hamburger, this time?
Microsoft Launches Unified Communications Portfolio. Jeff Raikes, President of Microsoft’s Business Division tells CNET “The era of dialing blind, the era of playing phone tag, the era of voice-mail jam…that era is ending.” Good sound byte but far from truth. Aswath rightfully points out that problem is not that of technology but of social behavior. Anyway lets sit back and watch them duke it out with Cisco Systems.
Vyke, another VoIP Client for Nokia S60 phone. The options for making VoIP calls from Nokia S60 phones with WiFi keep on increasing. Vyke is the latest to join the party. I still like Truphone.
Why CD Baby popped a Snocap. Derek Sivers, CD Baby CEO outlines why his company cut the cord with Shawn Fanning’s start-up, Snocap. It seems like a case of too much expectations from a Silicon Valley company that seems to have drink too much of its own kool aid. Sivers didn’t say that, but should have.
Jim Robbins, former CEO of Cox passes away.
Life imitates art: The bizzare saga around the death of Seth Tobian, a hedge fund manager who often appeared on CNBC. He was found dead last month in his pool in Florida. It was then said, it was a heart attack. But now seems like foul play.
Who’s an innovator? Motorola CTO Padmasree Warrior (my interview) has some thoughts on innovators and innovation on her blog. My favorite bit about her post is this bit of sage advise: Know when and what to stop doing. This is probably the hardest thing to do…it is next to impossible to get people to think about what not to do.
microsoft
motorola
voice
warrior
seth
asides
Technology-News