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Inside the Cloud: 9 Sectors to Watch
There’s already a ton of activity taking place in the cloud computing space, so much so that it can be hard to know who to watch. In many cases, it’s too early to pick winners. But there are distinct sectors of the IT industry that are particularly well suited to the on-demand, pay-as-you-go economics of cloud computing. Here are eight segments — and one company that’s a segment all its own — that we’re tracking closely.
Hosting companies that make the jump: When it comes to reliable managed hosting, Rackspace leads the pack. (Its VMware-based Mosso offering may appeal more to enterprises trying the cloud for the first time.) Clouds like XCalibre’s Flexiscale and Joyent are already there, but don’t have Rackspace’s installed base.
Stack-specific clouds: While Google and Amazon get the headlines, Engine Yard is heavily involved in the Ruby on Rails development community. Competitor Heroku is also Rails-focused, but relies on Amazon for its hosting platform.
Tools to wrangle virtual machines: To manage your EC2 machines, you’re going to need help. RightScale makes software for managing machines in the cloud; its tight focus on Amazon has made it an early favorite. Elastra, Enomalism and others have similar solutions.
Testing sandboxes: For many enterprises, a testing sandbox is the perfect way to start using on-demand infrastructure. CohesiveFT’s Skytap (a sister to Flexiscale) spins up testing machines in a cloud, but incumbent Surgient and recent entrant StackSafe aren’t far behind. And once you’ve tested a machine and seen that it works, why not leave it in the cloud?
Cloud-based development platforms: Companies like Rollbase and Coghead let non-developers build data-driven applications of any sort (as opposed to more specialized platforms like those of Salesforce and Ning.) But Intuit’s Quickbase, which now has access to Quickbooks data, has a head start: Millions of small businesses. Is this how SMB gets cloud?
Scaling frameworks: Wall Street needed fast, reliable applications that grew easily. Instead of adding more, bigger servers, they used Gigaspaces to bundle whole server clusters into discrete “processing units” that can be cloned to add capacity. In addition to being faster and scaling better, these units don’t care whether they’re in a private data center or a cloud.
Application delivery networks: What has tens of thousands of servers worldwide, a global network connecting them, and isn’t Google? Akamai. What was once a way of getting bits to far-flung corners of the Net is an often-overlooked cloud: Akamai has been able to run code at the edge since 2000. Its 2007 acquisition of Netli made it matter to enterprises even more. Akamai can weather heavy load and may be able to withstand attacks better than centralized clouds.
Cloud builders: 3Tera lets companies get into the cloud business. Enterprises can make in-house clouds on existing data centers; or service providerscan build their own cloud offeringsin the way Enki and others have. In 3Tera’s model, subscribers drag and drop the firewalls, servers and appliances they need. The company’s software then maps these virtual application stacks to servers and network segments. The results are impressive: On seeing 3Tera for the first time, ESM guru John Willis was so impressed he insisted on logging in to the icons on his screen to verify that it wasn’t just a demo.
The obvious one: Of the three big virtualization firms, only one (Microsoft) also has millions of desktops, two handset platforms, licensing for desktops, servers and applications, synchronization, and a huge online presence. Up until now, the Redmond giant has been treading carefully; it has to convert billions of dollars of shrink-wrap sales to on-demand revenue streams. But Microsoft’s going to be a huge player in the cloud.
For more insights into cloud computing trends, check out the recent GigaOM/Bitcurrent briefing on cloud computing that was launched at Structure 08.
Mippin Brings the Web to Mobiles
Mippin (formerly Refresh Mobile), whose browser-based site presents content specially designed for mobile consumption, says it has named a new CEO and reached a milestone of 500,000 users. But I question its ability to survive.
The London-based startup’s service also learns what users like and recommends stories based on their previous interests. I call it a mobile portal analogous to Yahoo, MSN, Netvibes or PageFlakes, but Judy Gibbons, the new CEO, has a different definition. She says it’s a mobile media services company, in that it optimizes PC content for consumption on a mobile device. “We believe there is only one Internet - there is not a separate mobile one,” Gibbons told me via email. “But mobile presents different challenges and opportunities and there is real user value to having all this content in one place in the same consistent format with a great fast user experience.”
Whatever you call it, Mippin needs to gain wide adoption in a crowded area to support its advertising-based revenue model. The market includes efforts by Yahoo, Microsoft and Google, and according to ad network AdMob — which does business with Mippin — the number of mobile portals is steadily rising (see graph). Obviously the mobile world cannot support 500 varying portals. Even in the PC web world, portals have problems.
Despite impressive growth from its October 2007 launch, averaging 110 page views per user and advertising click-through rates of 3 percent and 15 percent for contextual ads, (way better than the .5 percent rates on other mobile sites), I’m not sure Mippin will deliver the audience advertisers need given the amount of competition fighting for consumers’ eyes. It’s a nice service, but unfortunately that doesn’t always win out.
Mippin Brings the Web to Mobiles
Mippin (formerly Refresh Mobile), whose browser-based site presents content specially designed for mobile consumption, says it has named a new CEO and reached a milestone of 500,000 users. But I question its ability to survive.
The London-based startup’s service also learns what users like and recommends stories based on their previous interests. I call it a mobile portal analogous to Yahoo, MSN, Netvibes or PageFlakes, but Judy Gibbons, the new CEO, has a different definition. She says it’s a mobile media services company, in that it optimizes PC content for consumption on a mobile device. “We believe there is only one Internet - there is not a separate mobile one,” Gibbons told me via email. “But mobile presents different challenges and opportunities and there is real user value to having all this content in one place in the same consistent format with a great fast user experience.”
Whatever you call it, Mippin needs to gain wide adoption in a crowded area to support its advertising-based revenue model. The market includes efforts by Yahoo, Microsoft and Google, and according to ad network AdMob — which does business with Mippin — the number of mobile portals is steadily rising (see graph). Obviously the mobile world cannot support 500 varying portals. Even in the PC web world, portals have problems.
Despite impressive growth from its October 2007 launch, averaging 110 page views per user and advertising click-through rates of 3 percent and 15 percent for contextual ads, (way better than the .5 percent rates on other mobile sites), I’m not sure Mippin will deliver the audience advertisers need given the amount of competition fighting for consumers’ eyes. It’s a nice service, but unfortunately that doesn’t always win out.
A Two-part Rule for Naming Your Startup
What’s in a company name? Plenty. It’s your first opportunity to brand yourself. Get it right and you’ll stand out as clever, useful, and memorable to potential users and investors — even if your product isn’t any good. But get it wrong and you’ll flame out before your product even gets out of beta.
So, what makes Brightmail, PayPal and IronPort great names, but Lycos, Xobni and Vidoop really lousy? It turns out there’s a formula for effective naming and it’s surprisingly simple.
Look at many of the most successful brands and you’ll notice they’re often compound names, consistently made up of two components:
- a word that relates to the company product in a direct, literal sense, establishing a clear association between the brand and what the company does.
- a word not literally related to the product, but rather a metaphorical adjective to evoke a differentiating characteristic or “feeling” about the company’s product.
Our minds are built to make connections, mostly at a subconscious level. When a metaphor is detected, it triggers a process in our brains that associates the metaphor with the next object or reference. This naming system forces the mind to take the cognitive step of associating the metaphor to the product it represents, thus forming a positive association to the brand. And once your brain has woven the connection, it sticks, so there’s a great chance your company name won’t be forgotten.
So when we break down the name Brightmail, we see that “mail” indicates what the product does — they make email — while “bright” is metaphorical, framing their product in a positive light. This same logic applies to PayPal; “pay” is literal, “pal” is metaphorical. Ditto with IronPort, a provider of email and web security products — “iron” is a metaphor for strength and “port” is a literal reference to what the company product protects: network ports.
Search company Lycos tried a made-up word, to ill effect. After all, what’s a lycos? Xobni makes a cool email service, but someone had to tell me that xobni is “inbox” spelled backwards. Vidoop is just yucky. Reminds me of, well, you know.
Of course there are startups that get so far out in front of their competitive fields, or whose products are so exemplary, that names which ought to have been tricky are nevertheless well received.
Consider Twitter. If you had asked me a year-and-a-half ago, I’d have said it was a terrible name — all I could think of was “twit.” But people’s associations with Twitter are good because its communication tool is first-in-class and offers a great experience.
I was recently asked to consult with a startup that is considering re-naming itself. It’s a good thing, because the name they’re using now is totally confusing. It’s one of those Google-wannabe made-up words that sounds vaguely Latin, but isn’t. Worst of all, it doesn’t tell users like me anything about the company’s product (they archive web pages). When the company explained the name to me, I got even more confused.
In my view, while site archiving is useful (and they do it well), this probably isn’t a broad-based enough service to be elevated to the level of a consumer utility, as search or micro-blogging (Twitter) have been. This means their made-up name is unlikely to ever be turned into a verb (like “to google” or “to tweet”).
I suggested some new names, based on the two-part formula:
ArchiText: Archi sounds like architect, a good association. It also refers to archive. “Arch” as a prefix is “chief,” so metaphorically it evokes priority. Text is literal for content. Combined you might get: “storage for vital web content.”
PermaPage: “Perma” evokes impermeability. “Page” is literal.
ArchWeb: “Arch” for “archive,” and the metaphorical “priority.” Web is web.
Evan Paull is software engineer for Mark Logic and a startup consultant.
Jason Shellen Returns With Plinky
On Friday I caught up with Jason Shellen, one of the members of the original Blogger team. Following Google’s February 2003 acquisition of PyraLabs, the company behind Blogger, Shellen joined the search engine giant, working first on Blogger and later on other projects, including Google Reader.
In July 2007, he became a member of the ex-Googler club, joining Six Apart spinoff LiveJournal for a brief stint as VP of product development. He has since left that gig and is now focused on a new startup, Plinky, which doesn’t have a web site just yet. (Now there’s a Web 2.0 name if there ever was one!)
Shellen has co-founded Plinky with CTO Simeon Simeonov, formerly chief architect of both Macromedia and Allaire, but now a partner with Polaris Ventures in Boston. Polaris has invested $1.5 million in the company; a handful of angel investors are looking to join this investment round as well, Shellen said. The company currently has four employees, though it plans to hire a whole slew of engineers as soon as it finds permanent digs in Berkeley.
“I think a lot of attention is being paid to the aggregation and new kinds of social media tools but not enough attention (has been paid) to creation (of the social media),” he said. “When blogging was getting going, there were lot of interesting ideas, and now the technology has progressed enough that we can try out those ideas.” So what’s the plan? Shellen wouldn’t offer any details other than to say that he’s working on “content encouragement.” In other words, they’re building something aimed at getting people who aren’t bloggers or content creators to participate and create.
How? I don’t really know, and he wouldn’t say. One thing I do know: Shellen is a smart guy and having known him for a long time, I trust that he has something interesting up his sleeve. I guess we’ll have to wait and find out when the company launches its first offering this fall.
MySpace Uses Gears to Grind Down Server Costs
Today at Google’s developer conference, MySpace said it would use Google Gears to power search and sort functions for its email, giving users a highly sought-after functionality at little cost to MySpace infrastructure. The move is a great one for MySpace, which is really pulling out all the stops in its rivalry with Facebook.
Making social networking email more user-friendly and searchable was a top concern among Facebook users who questioned Mark Zuckerberg during his keynote at the South by Southwest event in March, so I’m guessing MySpace users also felt pain in that area, since the inbox functions are so similar. So MySpace is clearly following user demand with this announcement. It’s now left up to users to decide if they will use Gears. They will receive a prompt on their MySpace pages letting them know about the option.
Gears is an open-source development platform that an individual user downloads for free. The program then allows applications running in the web browser to access the user’s own CPU and storage. The enables offline access to web applications and richer web applications without breaking the site owner’s infrastructure. Sites need to be optimized to work with Gears, which MySpace has done. Other sites using Gears include Google’s Reader and Docs, as well as Zoho.
Because it offloads some of the processing power and caching to the user’s desktop, MySpace’s decision to use Gears has the added bonus of reducing some of the hardware demands required for MySpace to improve its email. I’ll offer more details on that aspect of after I chat with MySpace this afternoon.
Update: Allen Hurff, SVP of engineering at MySpace, talked a bit about the bandwidth and server savings for the social network, but also pointed out that using Google Gears or Adobe Air could allow for new services such as keeping months or years worth of status updates on a user’s computer or lead to an off-browser email client.
As for the user experience, he emphasized that one of the results of off loading processing to the user’s computer means information loads faster because the user isn’t waiting for it to hit a server and come back. He pointed out that most computers don’t use all of their processing power and memory right now, which means this isn’t an intrusive service on a machine.
As for questions about security and keeping email on public machines, he said MySpace could one day choose to offer an encrypted version of the data stored on machines, but said it would slow down the service. However, for those deciding to check email on public computers, and are worried their email will linger, users are given the option to wipe their data.
3 Ways to Win the David vs. Googliath Fight
In 1999, half a dozen venture capitalists turned me down for financing because the business plan for my company, BlueTie, put me in direct competition with Microsoft. There simply was no point, they said; between its desktop monopoly, ranks of talent and outsized bank account, Microsoft was a guaranteed startup-killer. Instead, they advised us to “pick a market Microsoft doesn’t care about.”
Fortunately my team and I did not listen, and went ahead with our plan. BlueTie is an SaaS company with two revenue streams: We host customized email and collaboration software for enterprises; we also have an ad platform that pushes third-party services and promotions into your email, calendar, or social networking application, so you can make dinner reservations or book travel without interrupting your workflow (see the screenshot below).
BlueTie eventually did get funded. Today we have 3 million users and 250,000 business clients, and we’ll exit 2008 with a revenue run rate of more than $20 million. We’re undoubtedly benefiting from a new reality; the revenue model for web-based applications is advertising, not subscriptions. Online advertising is forecasted to climb to more than $100 billion by 2011 from $43 billion in 2007. It’s a prize too big to ignore.
Despite our growth, as we talk to investors about expanding into new markets, I hear the same warning I heard back in 1999, only this time it’s not about Microsoft, but Google. One Sand Hill VC recently told me not to enter a market “because Google will own it in nine months.” Indeed, today Google is the Goliath, so big that it’s awarded victory before the battle is even fought.
But we all know how the fight between David and Goliath turned out. So if you’re the David, here are three ways to swing the pendulum in your favor:
1. Be a spoiler. Companies consistently make poor strategy decisions when they’re busy trying to defend existing revenue streams. But just because you’re small doesn’t mean you can’t squeeze the market. Create a product at a tenth of the price of Goliath’s. This forces all vendors, including Goliath, to cannibalize their own revenues to stay competitive. And while it will shrink the dollar size of the overall market, you will end up capturing share.
For example, we built our software largely on open source, so we were able to offer BlueTie’s email and collaboration products at a 90 percent discount to Google Apps or Microsoft Hosted Exchange — and still make money. If we cut prices further, it will hurt Google and Microsoft far more than it hurts us (or other, less-entrenched firms like us).
2. Change the yard stick. Advertisers ultimately care about revenue, not eyeballs, page views, or clicks. Today’s ad measurement tools are a long way from giving advertisers end-to-end transparency. Advertisers want to see how spend translates into revenue. You can argue you are providing brand advertising until you are blue in the face, but in a recession, marketers are going to look for results. Even brand advertising has the goal of enhancing the brand to drive long-term customer preference and revenue.
If you create a new way to measure the flow from ad spend to revenue that reduces advertisers’ risk, they will flock to it, and force your competitors to change as well. Even Google will be ultimately forced to adopt the model that advertisers demand.
There is a huge need for better yard sticks to measure advertising effectiveness. If you can raise the bar, you will force everyone else to change focus to match you.
3. Obliterate the business model. There is nothing that is more painful to a market Goliath than a shift in the underlying business model. Selling your product at only a marginal discount is not a new business model. Forging a new distribution channel is, and Blockbuster has yet to fully recover from Netflix. Can you change the product strategy to commoditize the market and make money on add-ons? Think Go Daddy. Can you change the distribution model? Think FriendFeed.
Competing in a David vs. Goliath battle is the most interesting of chess matches. Speed of execution is important, though, as Goliaths will eventually catch up to you. Unless of course, you changed the game so much that there’s nothing to catch up to.
David Koretz is a serial founder. Prior to BlueTie, he founded Network Marketing International, an early web-based sales lead provider. Read more from David on his blog.
(”David vs. Goliath” photo credit: www.funnyjunk.com.)
Powerset Is Live
It has been a long time coming, but Powerset, a San Francisco-based contextual-semantic search engine has finally launched. I urge you to try it out, for this is quite an impressive search effort, despite the fact it is currently limited to searching Wikipedia along with some supplementary results from Metaweb’s Freebase. I think it has made Wikipedia much easier to use. I like how you can do more topic-based searches and get a holistic view of the information you’re looking for. Danny Sullivan over on Search Engine Land has an elaborate and fantastic indepth review of Powerset, and that frankly obviates the need for any other review.
That said, Powerset faces an uphill climb, especially when it comes to consumer mindshare. I think Google has become so synonymous with search that it is virtually impossible for a newcomer to establish a toehold. Powerset’s approach is different, and its tactic of applying its technology to specific content repositories such as Wikipedia is smart. But will they (web searchers) come and use Powerset?
At our recent GigaOM PM event, Chad Walters, director of engineering, search and platform at Powerset, gave a talk about how his company was using Hadoop and other clever technologies to meet its immense infrastructure needs. Here are some bits from OStatic’s live blog coverage of the event:
Powerset applies deep natural language processing (based on technology licensed from Xerox PARC), which means the company needs 100 times more processing horsepower than a simple keyword searching and indexing. Powerset uses a distributed database system called HBase in tandem with Coral, its Document Processing System. Coral uses Hadoop as its job control machine. Powerset uses 92 eight-core machines to do processing.
Google Claims Less is More on Click-Throughs
Google isn’t evil and it isn’t being beaten down by the recession or fewer click-throughs on its ads. At least that’s the message CEO Eric Schmidt tried to convey during an interview with Maria Bartiromo that will air on CNBC after the close of markets today.
The grown-up Googler sat down with the Money Honey for a frank talk about Google’s most recent earnings, its plans to move into more enterprise applications, its hopes for monetizing YouTube, mobile phones — even its particpation in the 700MHz auction. Oh and how it’s still trying to avoid being evil.
The good news is that Google is still focused first and foremost on advertising, in particular on gaining as much share of that market as possible. The bad news is the click-throughs rates for search advertising in the U.S. are down, which prompted investors to shear some 40 percent off the firm’s market cap from the beginning of the year through mid-March, when numbers showing poor U.S. click through data surfaced. Schmidt argues that the lowered click-throughs will actually result in higher revenue because the quality of the ad viewer is higher — there is less casual clicking. He also points out that recessions drive advertisers to spend money on ad formats such as search because they can tell how effective those ads are.
Recessions do tend to drive advertisers toward measurable campaigns, and Google will likely benefit. However, the decreased click-through rates are something those not just Google’s investors are watching, but many in the startup community as well. Are consumers becoming more leery of search ads and tuning them out or are they really getting better at determining which ads are relevant to them, resulting in fewer, but higher-quality, clicks? The answer to that question could determine the success of many of the web-based consumer service providers hoping to make money on new ad formats — and on Google AdWords.
The Cloud Grows Up
The cloud is growing up. Its rite of passage comes this morning with the announcement that Amazon Web Services will now provide support for users of its Simple Storage Solution, Elastic Compute Cloud and Simple Queue Services products. Amazon, with its launch last week of persistent storage, was clearly wooing enterprise users, and the offer to provide support signals a formal courtship.
This is a romance that’s been played out across technology for decades, most recently in the open-source market. New technology gets launched and academics, hobbyists, and other early adopters play with them. Eventually businesses start wondering if they might be able to play, too. But downtime, glitches and the sense that you’re on your own are big turnoffs for corporate buyers.
Amazon Web Services has decided it’s time to grow up and play nice with business. It’s offering two different service levels: One starting at $100 a month and the other, at $400. While smaller companies such as Nirvanix already offer support and better usability for business users, the Amazon brand will bring cachet to its offerings, no matter what else is out there.
Syncplicity Makes Offline Syncing Possible
We get all giddy over here at GigaOM when it comes to storage and backup products, so it’s worth noting that today a service called Syncplicity launches in public beta. What’s nice about the service is it offers both storage and backup as well as automatic syncing across PCs. What makes it better than most is its ability to sync offline documents.
Right now, the bridging feature that syncs your offline work when you get online is only available for Google Docs/Word files and Facebook photos. However, Leonard Chung, co-founder of the service, says more offline syncing options will come soon. So will a Mac product. Because my PC is wonky at the moment (hey, it’s four years old,) I didn’t get a chance to try out the software, but if you guys do, please leave us a note in the comments section with your thoughts.
Initially the service is free, but Syncplicity plans to charge somewhere around $20 a month for unlimited storage and access. When compared to a backup service like Carbonite, which charges $50 a year, that seems pricey, but it does offer the syncing, backup and offline access all in one package. The company is using a combination of their own servers hosted by Rackspace and Amazon Web Services to support Syncplicity.
More GigaOM backup and syncing reviews are here:
- SugarSynch and Capzules
- FolderShare vs. Dropbox
- Drop it Like it’s Dropbox
- For Mac Users Some Backup Option
And for reviews from Web Worker Daily see here:
- 9 Free Online Storage Backup Solutions
- Who Protects Your Cloud Data?
- When Services Fail: Relying on Web Email Services for Work
Vlingo Gets $20M and Exclusive Yahoo Deal
Speech recognition company Vligno has scored a $20 million second round of funding led by Yahoo, and through a relationship with the search company, access to 600 million cell phone subscribers worldwide. As I noted earlier, Yahoo said today it will use Vlingo to power the voice recognition for its oneSearch mobile search product.
“We like the technology so much we made sure our competitors can’t use it,” explained Marco Boerries, president of Yahoo Mobile. Boerries declined to say how much Yahoo put into Vlingo, but said the company had exclusive use of the technology for mobile search.
Hooking its star to Yahoo puts Vlingo in the same league as Microsoft — which offers mobile carriers speech recognition technology derived from its TellMe acquisition — and singlespeech-focused search company Nuance Communications, which is cultivating carrier relationships as well.
Google Takes on OpenX
This morning, Google said it was launching a hosted ad server program for small- to medium-sized web publishers called Ad Manager. As it happens, I was on the phone with James Bilefield, CEO of open-source ad-serving company OpenX (formerly Openads). Bilefield gave the usual this-validates-our-market spiel heard from entrepreneurs whenever a large competitor enters his company’s space, but he was also eager to point out that Google’s version is hosted, whereas OpenX can be downloaded and run on a publisher’s own servers — keeping their revenue and ad information in-house.
Right now, OpenX serves about 30,000 mostly small- to medium-sized publishers with “billions of ads per day,” according to Bilefield. Google’s recent buy of DoubleClick gives it an ad server for the large sites, but Bilefield says that now that the deal has closed, OpenX is winning a few customers based on worries that Google, which is both a publisher and an ad server, might compete against some of DoubleClick’s clients. It’s a similar argument made in the OpenX blog today.
Bilefield is nonplussed by this argument announcement, noting that Ad Manager has been in trials for a year and is now opening up only in public beta (to be fair, that’s how Google does things). OpenX recently scored $15.5 million in a second round of funding, and announced its own hosted ad server. OpenX makes most of its money helping ad networks source publishers. If Google Ad Manager takes off in the smaller publisher markets that OpenX services, advertisers may turn to Google for that service, or see OpenX as second-tier.
MySpace Developer Platform Launches in Beta
Almost a year after Facebook opened up its social network to developers, MySpace is launching its own developer platform in public beta with an application Gallery Page available to users. It’s based on Google’s OpenSocial platform, which MySpace helped develop. MySpace announced the platform in late January and said it would be ready in early March. It may be a tiny bit late, but that may be because each application is being approved by hand.
Joe Heitzeberg, founder and CEO of voice widget service SnapVine, has a Photo Shout app already on the site. He said developing on the platform was sometimes a challenge since the code kept changing, but pointed out that the MySpace team was responsive to questions via email and instant messaging. For more on how the developer platform works, check out our chat with MySpace CTO Aber Whitcomb.
Zuckerberg and Facebook Both Have Growing Pains
Today’s Wall Street Journal devotes 2,400 words to Mark Zuckerberg’s hiring of former Google exec Sheryl Sandberg as Facebook’s COO, and his attempts to mature into the CEO role at a large company. After reading the article I decided to sum it up in haiku form for our readers.
Growing up is hard
Doing it in public sucks
Facebook needs money
All levity aside, as a young founder Zuckerberg is treading on the worn footsteps of entrepreneurs everywhere. College is one of the best times to start a company because you don’t need to be mature. You have the ability to spend all hours obsessing over your creation, not paying rent and generally avoiding other responsibilities. Bill Gates, Michael Dell, Marc Andreessen, Sergey Brin and Larry Page all began their efforts in or immediately after college.
Zuckerberg is lucky, his collegiate startup has soared. And he now has the unenviable task of growing from a self-absorbed adolescent into a gracious adult in public. Not everyone makes this transition and no one does it without a few awkward moments. He’s also hampered by a point of view that’s unique to entrepreneurs.
Like many entrepreneurs, he’s recognized his flubs and is seeking to address them. Also like a true entrepreneur, he doesn’t spend a lot of time apologizing for his mistakes, but opts to go out and act differently. Those of us in the real world can fault him for that, but that mindset isn’t as much a function of age as it is a hallmark of an entrepreneur. As Zuckerberg matures, he’ll still have that mindset, but he’ll likely hide it a bit better.
T-Mobile Backs Femtocell Startup
T-Mobile International, which is currently using Wi-Fi for its convergence offering in the U.S., has disclosed an investment in Ubiquisys, a maker of femtocells. T-Mobile also said it was trialling the startup’s femtocells in Europe. Femtocells, which plug into an existing broadband connection to provide a signal in places where mobile network coverage is poor, are getting their day in the sun. Google, Accel Partners and Advent Ventures are also investors in Ubiquisys, which has raised $37 million.
Sometimes It’s Just Semantics
As someone whose job involves understanding how certain people and things relate to one another, the idea of the semantic web is both compelling and scary. It could make my job that much easier, or it could make me as redundant as switchboard operators are today.
Coding information in a standard way so that machines can see how one person relates to another, or how a string of words could alternately be a movie or a book title, is a challenge. But plenty of companies are taking little bits and pieces of the problem and solving them. One such startup, Radar Networks, the maker of Twine, today received $13 million in funding from Velocity Capital, Vulcan Capital and DFJ. Other startups such as EVRI and Freebase have also benefited from VC interest in the semantic web.
Some of the companies are following the standards offered by the W3C, which is pushing RDF as a standard data structure to underlie the semantic web. But not all companies working on helping machines figure out the relationships and categories that most humans have learned use that standard.
Nor are all the companies interested in making the semantic web work startups. Yahoo uses RDF in some of its offerings and Google’s efforts with its social graph API initiative resembles the semantic web in its goals. Instead of using RDF, however, it’s using XFM and FOAF tags.
Reuters is another company that sees potential is getting machines to understand relationships. Earlier this month its CEO laid out a pretty compelling vision (at least to Tim O’Reilly) about how Reuters would rely less on delivering information and more on packaging its information in a way that could be used by analysts and computers to quickly delineate relationships.
Reuters would then be able to take its content, make it programmable and offer that data to users, who could then do with it what they will. Things like making relationship charts that currently can take a journalist and graphics department a couple of days to complete, and must then be monitored and changed manually, become easy.
The effort to render all of the data on the web into a semantic form will take a while. Nova Spivack, CEO of Radar Networks, believes that semantic web applications are currently in the early adopter phase. Twine will unveil its efforts in March through a private beta and another startup, AdaptiveBlue launched a semantic plug-in called Blue Organizer earlier this month. Spivack believes that in 2010 mass adoption will take place as people start to expect machines to make “intelligent” connections between people and things.
All of this is interesting, but putting a layer of semantic code over the existing web raises some concerns. One is the danger of inaccurate or at the very least less nuanced sense of relationships between people. Another is the everlasting nature of information on the web. How will coded tags be able to follow the intricacies of human relationships as fights ensue, jobs shift and even names change?
Another issue that we’ll have to deal with is confusion as people try to figure out what the semantic web really is. I’m thinking of it as code added to existing and new web content that helps determine and maybe track relationships between people and contexts for objects. I’m not married to the W3C standards, however, and others are doing this without using those particular programming tools.
There are also plenty of other definitions and hopes for the next phase of the web that may play out before we get an intelligent Internet. It’s already apparent that the web will continue to become more useful over time, but won’t ever replace the benefits of human interactions. If you doubt me, just recall your most fulfilling customer service call with a person compared with your most fulfilling experience with an automated agent. While both are helpful, sometimes you need a real, live human being.
Triggit Makes Grabbing Internet Content Even Easier
Triggit, a new toolbar application which launches today, is a nifty feature trying to make it as business. Triggit the company, which was founded two years ago with the goal of connecting wine bloggers with merchants that have inventory to sell online, has branched out into other shopping sites and functionalities.
But at the end of my interview with CEO Zach Coelius, I found myself more frustrated than excited. Triggit is following the same mistake made by many other Internet startups: sacrificing revenue in lieu of growing the number of users.
I get that a four-person startup has limited resources, and Triggit is coming out of alpha, where it’s hard to charge money for what is essentially a work in progress, but Triggit doesn’t have plans for sales, it has plans for growth. And one does not necessarily translate into the other.
“There is significant revenue flowing through the system, but of all the deals we’ve done we’re not charging anyone,” Coelius told me. “We’re more interested in growing virally and getting users before we are interested in taking in revenue. We know how many ads are placed in our system and how much content is placed. Given rates [at which ads are placed] it would be trivial to get those deals signed.”
I want to believe him, but until you ask someone to pay, you don’t really know if they’ll pay. That’s the danger of focusing on growth rather than revenue. Facebook has a slightly different model, but it’s also going through hell of figuring out how to make money from its growth without alienating users. Others who have failed to monetize users while focusing on growth include defunct companies Skinnyr and AGLOCO.
The Triggit toolbar does two things. First it makes it easy for the lay blogger to embed photos, video, ads or widgets into their site. No more cutting and pasting an embed code; three or four clicks, a search and suddenly your blog is hosting a YouTube video relevant to your content.
The other thing Triggit does is make it easy to link a product mentioned on a blog to a merchant who has that particular item available. This is nice for affiliates, but not essential, as many of the major blogging platforms have similar services through plug-ins. On WordPress the aLinks plug-in does it with no highlighting or clicking. But it might be too much for Triggit’s target audience to find, download and set up that plug-in. Still, Triggit would make a nice addition to a blog publisher or even a portal company such as Google or Yahoo!
Triggit will be a distribution platform for advertisers, widget makers, merchants and content makers to reach the lay blogger who isn’t technically adept enough to do any of this now. Coming out of alpha, Coelius says 100,000 people are reached through the bloggers currently using the toolbar, which should excite people trying to get attention for their products or services.
With patents protecting the Triggit software, it has a slight barrier to entry and with a $500,000 convertible note from Bay Partners, it has some powerful backers. I hope that’s enough to keep Triggit in business.
Triggit it offering up 300 beta invites to GigaOM readers; just type gigaom as the invite code.
Can Ribbit Finally Bring Web & Voice Together?
For a long time, I had this belief that the worlds of web and voice would converge, unleashing upon us a whole new class of voice-web mashups. Instead all we got were some marginal ideas and rarely-used widgets. Voice, in particular, remained too difficult for web developers. In the end the two turned out to be awkward roommates, never really comfortable with each other.
Lately, VoIP insiders have started talking about taking a platform approach -– a way to add voice to web applications easily while leaving complex tasks such as peering and billing in the background. Ribbit, a Mountain View, Calif.-based startup, is the latest to join the fray, and it has perhaps the most audacious (and equally risky) strategy for bringing web and voice together.
If you strip away the hype (meaningless blather such as the company’s claim of being Silicon Valley’s first phone company), what they have done is built their own Class 5 softswitch and back-end infrastructure and married it to front-end technologies like Flash and Flex from Adobe Systems (ADBE).
Furthermore, the platform is able to take inputs from different communication tools — XMPP, Skype, Yahoo Messenger, MSN and Flash Media Server –- and make them talk to their “switch.” The platform uses SIP protocol for all voice communication.
Accordingly, Ribbit is offering API (Application Protocol Interface) access to much of our switch today, allowing third party developers to create rich integrated telephony applications without previous knowledge of telephony. Currently, the Ribbit API is optimized for Flash / Flex developers because of the pervasiveness of the technology (Flash is resident on 98% of the world’s computers). This means that Ribbit communication applications written in Flash will run without the need of a client download.
“What we have done is made voice an object that you embed into your workflow (or software),” said Ted Griggs, chief executive officer of the company. “We didn’t want to change how people did things, like communicate via Skype, and wanted to integrate the platform to work with any phone.”
Developers just have to write apps, Griggs said, and worry about the back-end telephony stuff. In exchange, Ribbit will take between 5 percent and 15 percent of the revenues generated by an application.
Briggs showed off a few applications, including one specifically targeting subscribers of Salesforce.com. Built by an independent developer, it was quite impressive. Another application worth checking out is AIRphone, developed by Joe Johnson of Knoware, that acts like an iPhone on your desktop.
The technological approach the company has taken is sound and has merit. It is the strategy and execution part that raises doubts about Ribbit and its future. For instance, I have on good authority that Adobe will be making a big splash with its VoIP plans sometime next spring, and is working furiously to put finishing touches on its offerings. This would make Adobe Ribbit’s biggest competitor. And there are others, like Lypp, who are following a similar strategy. Meanwhile Google, which owns GrandCentral, could easily roll out its own version of a voice-web platform.
The biggest challenge for Ribbit will be building and nurturing a developer ecosystem. It needs patience and a lot of money. Ribbit claims it already has about 600 developers involved in its platform, but will the $13 million the company has raised from venture capitalists be enough? I don’t know.
Nevertheless, Ribbit seems to be rising to the challenge posed by Daniel Berninger, who in a column here wrote:
The death of the telecom business remains a standard prediction, but telephone bills continue to arrive…aside from price, the telecom business remains largely unchanged by VoIP…although improved performance and falling costs usually combine to produce new applications, this does not seem to be the case for VoIP and the voice business. If the infocom sector can move beyond cheap telephone calls, it might finally represent the threat to the status quo imagined by my AT&T colleagues.
Online Ads Still the New Black as AdBrite Raises $23M
Update: The buzz on Sand Hill Road these days is all about online advertising plays. Never mind the fact that most of the “online ad” business is living on scraps compared with the Godzilla-like Google (GOOG). The latest testimony to this craze: $23 million in new funding for AdBrite, a company started by Phil “Pud” Kaplan, well-known for his escapades and his iconic site, F–kedCompany.
PE Hub reports that the three-year-old AdBrite got cash from Sequoia Capital and their quasi-affiliate hedge fund, Artis Management. With this new infusion, the company has raised a total of $35 million. We suspect there may be more cash coming their way, as this round might not be closed just yet.
Adbrite issued a press release that lists DAG Ventures and Mitsui Ventures as new investors. BritePic, Full Page Ad, and Facebook App Channel – have fueled AdBrite’s rapid growth, Ignacio Fanlo, CEO of AdBrite said and claimed that company was the third largest ad-network behind Google and Advertising.com. The round the company says is closed at $23 million.
Is Yedda The Answer For AOL?
In the game of Internet Q&A, only Yahoo (and not Google) seems to have all the answers. But that doesn’t stop others from trying. AOL, a division of Time Warner is buying Israeli-start-up Yedda, betting that it can get traction in the “answers” game. Q&A is about asking internet for help and getting it and given AOL’s mostly mainstream user base, this seems like a calculated bet by AOL. More on Yedda here.