New Mediapost Article: Reality Bites Hard

There's something rotten in the Internet Economy, and I'm mad as hell that more people aren't even talking about it. My latest, angst-ridden rant from MediaPost.

New Mediapost Article: Pennies From Heaven

The U.S. economy is in shambles, our collective future is in doubt, and many of us lucky enough to be employed in tech may soon be looking for jobs. I've survived a few recessions (barely): here's some advice for surviving what may be the worst time in your professional life.

Say Goodbye to Scrabulous.com

Looks like the wildly popular online game and Facebook application Scrabulous will soon disappear as quickly as it rose to preeminence, thanks to a lawsuit filed today by Hasbro, which owns Scrabble, from which Scrabulous is obviously derived. Enjoy it while you can -- frankly, I expect Facebook to be next in Hasbro's crosshairs if it doesn't immediately disable the Scrabulous application. I'm no lawyer but I've read the complaint and am completely convinced that Scrabulous is a flagrant rip-off of the classic Scrabble game. How could two bright developers have been so stupid as to think that they could simply reverse-engineer Scrabble, put it online, gain hundreds of thousands of users, and expect the rights holders to behave like doormats? It boggles the mind. You can read more about this at the New York Times excellent Bits Blog.

New Mediapost Article: No Time For Gloom or Doom!

Believe it or not, I'm optimistic about the online advertising industry's chances of weathering the current economic downturn. While there will be plenty of losers in the months ahead, the industry isn't going to implode as it did in 2000-01. Read more at MediaPost.com.

New Mediapost Article: Inside Microsoft's War Room

Latest MediaPost article by yours truly, on how Microsoft (with or without Yahoo) plans to ultimately dominate the post-desktop computing environment. In a nutshell, victory for MSFT means dominating the air and completing control of the home.

Microsoft's Windows Live Expo Scrapped

Much has been made of the complicated problems that have prevented Microsoft from dominating the online space, and the failure of Windows Live Expo supports the notion that MSFT really doesn't have a clue. I've long been of the view that Microsoft will eventually succeed because it's got more cash than Saudi Arabia, possesses major engineering talent, and is infused with exactly the kind of killer spirit required to win in the online space.

But lately I'm beginning to have my doubts. MSFT keeps demonstrating a failure to master the simplest principles of Internet Marketing 101, including the principle stating that you must have a catchy name whose meaning bears some close resemblance to what the function of your property is. The name "Live Expo" sounds like some kind of virtual trade show, not a classified site. "Live Marketplace" or "Live Classified" would have been a far better choice, but even the word "Live" (used by its flagship search engine, "Live Search") is practically meaningless, unless what you're selling is longevity products.

Do us all a favor, MSFT, and name your products with terms that can be used as verb. Nobody "Lives" anything, they "Yahoo" it (rarely) or "Google" it (ubiquitously). Let go of the ridiculous notion that you have to globally brand everything under a single, meaningless moniker, and you might get a few insights about the online world. Hell, even "SteveBallmersFavoriteSearchEngine.com" would have a better chance of gaining traction than your crazy "Live" empire.

Microsoft - Yahoo: A Big Gaudy Sideshow

I've weighed in this week over on MediaPost on the Yahoo-Microsoft Deal That Wasn't. The skinny: Microsoft has much bigger fish to fry than to fritter with the likes of Yahoo: its strategy (post-DOJ settlement) is to outflank, not to confront directly, its main nemesis in the online ad space.

BestOffersNetwork.com Makes Its Last Offer

MediaPost's Wendy Davis reports that "infamous adware purveyer" Direct Revenue, which ran the site BestOffersNetwork.com, is now out of business. As Davis notes, Direct Revenue would never have made millions by infiltrating its ad-serving/user tracking software onto hundreds of thousands of clients without the willingness of big clients to underwrite its nefarious business model. These clients included Cingular Wireless, Travelocity and Priceline (it is not clear from the article whether they were unwilling participants or knew in advance about what Direct Revenue actually did).

Only the active intervention of the Federal Trade Commission was able to stop Direct Revenue, but as Davis correctly observes, the people behind it are still at large and more than likely to pop up again soon on a computer near you.

Wikipedia has a good page on Direct Revenue with a timeline of legal actions against the company, plus a list of programs created to exploit computer users for profit.

Web 2.0 Bubble Ready to Burst?

Looks as if people are finally beginning to wise up to the fact that today's Web 2.0 economy may soon go kerflouie. The New York Times is finally writing about the reality of today's tech economy, in a front-page article entitled Silicon Valley Start-Ups Awash in Dollars, Again (Breathtaking Sums Hint at Revival of Dotcom Bubble). Industry insiders are raising the alarm that the Online Ad Industry is Partying Like It's 1999.

I'm glad that people are waking up to the craziness of today's online valuations, which are based not on fundamentals, but on speculative craziness. Companies are being given all the wrong incentives, VC's don't even care which players they're placing bets on, and the whole industry is poised to plunge into the abyss.

The bubble is real. The only question is when it's going to burst: next week, next month, or next quarter. Keep your heads down, people.

The New York Times' "Times Select": Personal Edition Redux?

I am a reader of both the offline and online versions of the New York Times, and I am horrified at the newspaper's recent decision to put much of its contents behind a paid firewall called Times Select.

The wisdom of this decision has been called into question by a good article by Jay Rosen on the Huffington Post. I have little to add to Rosen's piece, except to note that I once worked for a globally dominant news and entertainment empire which bet all its chips on a paid, subscription-based content service. It was called Personal Edition, and was a complete and utter disaster. When it failed, it was only a matter of time before Time-Warner fell into the treacherous arms of AOL.

Only time will tell whether Times Select achieves its subscribership targets, which according to Rosen number in the hundreds of thousands. But history has not been kind to subscription-based schemes which lock up a newspaper's best assets behind a firewall. Personal Edition, the Interchange Online Network, the Washington Post's Digital Ink weren't projects aimed at increasing the breadth or quality of online information. They were retrograde efforts born of fear. Their aim was to control access in order to staunch the flow of red ink, and each failed miserably because they eviscerated the content that users went there for (which in the Times' case certainly include the columnists Paul Krugman, Bob Herbert, and Maureen Dowd). And once users realized that the "free areas" had been gutted, they left and never came back.

It is impossible for me to read the Times' move as anything less than a desperate act which never would have been taken had the newspaper studied the record of Internet failure and the extremely poor record that subscription-based services have. Only porn services and the Wall Street Journal have been successful at evading the odds against such paid services. Why? Because in the hierarchies of human needs, sex and money rank high: far above Tom Friedman and David Brooks, whose words most of us can simply do without.

Is there a bright side to the Times misstep? You bet there is. More and more people will simply eschew the NYT columnists and extra features, and turn to the ever-growing, ever-improving Blogosphere for intelligence and wit. I'm sure this is not the result the Times intends, but for underfinanced and underrecognized opinion Blogs, Times Select couldn't have come along at a better time.