Saturday, August 21, 2010

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Chop-Shop Workers and Bootstrappers: Chile Really Wants You

Posted: 21 Aug 2010 07:00 AM PDT

Silicon Valley's vitality depends on a constant influx of bright people who challenge its inhabitants to work harder and think smarter. And, as I noted in my last post, America's economy depends on startups to create jobs and innovation. Skilled immigrants have provided both. So, given the miserable state of the economy, we should be laying out the welcome mat for the world's best and brightest.  Yet we're doing the exact opposite. Meanwhile other countries have figured out the secret of the Valley's success and are laying out their red carpets and welcome mats, not only for the foreign skilled workers we're turning away but also for our techies.

Fifty-two percent of Silicon Valley's startups from 1995 to 2005 were founded by foreign-born workers. And in 2006, 26% of America's global patents—including 40% of those filed by the U.S. government, 72% of Qualcomm’s, 65% of Merck & Co.’s, and 64% of General Electric’s—were invented wholly or partly by foreign nationals residing in the U.S. You would think that we would develop policies to bring in more of these people. Yet, sadly, the only immigration legislation our political leaders have been able to agree on, unanimously, is to hire 1000 more border-patrol agents and to fly drones on the Mexico border—like the ones we use to kill terrorists in Pakistan—to keep the nannies, gardeners, and farm workers out. Ironically, to pay for all this, the new border-security law levies taxes on companies that the bill's sponsor, Senator Schumer (D-NY), calls "chop shops"—because they bring in tech workers who compete with Americans and supposedly "take their jobs away". These "chop shops" are Indian companies such as Infosys, Tata Consulting Services, and Wipro—which have the best employee-training and -development programs, and are amongst the best-managed companies, in the world. They compete head to head with American "chop shops" such as IBM Global Services and Accenture, and increasingly with management consultants such as McKinsey & Co and The Boston Consulting Group.

I am opposed to illegal immigration and believe that H1-B visas should be abolished. (If we need skilled workers, bring them in as permanent residents, so that they have the same rights as Americans and can switch jobs if an employer underpays them.) But the political debate has degenerated into nothing but racism and xenophobia. Some politicians are simply pandering to uninformed sectors of their electorates.

Meanwhile, countries such as Russia, Singapore, and Chile are doing what they can to build their own Silicon Valleys. Russian President Dmitri Medvedev visited Silicon Valley last month, to let American techies know that they are welcome to move to his new science park. Singapore has long been offering visas and incentives to any skilled worker who moves there. And Chile has launched the most ambitious program of all.

In addition to the incentives that Chile has been offering established tech companies, it took my advice and announced an ambitious new program for bootstrappers, called Startup Chile.  In return for hanging out in one of the most beautiful places on this planet, Chile will provide fledgling entrepreneurs with a grant of $40,000 to help them cover expenses for six months ($40,000 goes a long way in South America, by the way). As well, they'll provide the entrepreneurs free temporary office space; connect them with mentors, VCs, and angels; and help them settle in. They are also pumping money into local VC funds to ensure that the capital is there for the most promising companies.

A handful of entrepreneurs have already signed up for the program, and Chile's  minister of Economy, Juan Andres Fontaine, is coming to Silicon Valley on Sept 21 to meet two dozen more entrepreneurs who he hopes will return to Chile with him. (Here is the link to apply.) Chile wants to lure hundreds of entrepreneurs, eventually.

Seems too good to be true, doesn't it? No obligation to stay; no equity ownership in return for the money; no onerous contracts that promise a pound of flesh—as VCs typically demand. Why would Chile do this? Because they're betting that if they get enough smart, talented people there, three things will happen: first, many of the entrepreneurs going there will fall in love with the country and decide to stay; second, they will enrich the local ecosystem by teaching local entrepreneurs about global markets; and third, their tech community will develop stronger links to the world. Who knows, a couple of startups may also hit home runs. After all, isn't this how Silicon Valley left tech centers like Boston in the dust and became the world's tech leader?

Chile's strategy of attracting skilled immigrants makes a lot of sense when you consider that it costs practically nothing compared with the billions that regions invest in creating industry clusters. The fact is that smart people, when given the education and means to innovate, make the magic happen. And that's what makes the American immigration policies so troubling: we're chasing away the highly educated and experienced workers who could be boosting our economy. They are instead turning countries like China and India into major tech centers.

America won't always be the place to which the world's best and brightest flock—they will go where they feel the most welcome. And it won't be long before Senator Schumer or his successor has to sponsor legislation to offer "chop-shops" incentives, like those Chile is offering, to bring skilled workers to the U.S.

Editor's note: Guest writer Vivek Wadhwa  is an entrepreneur turned academic. He is a Visiting Scholar at the School of Information at UC-Berkeley, Senior Research Associate at Harvard Law School and Director of Research at the Center for Entrepreneurship and Research Commercialization at Duke University. You can follow him on Twitter at @vwadhwaand find his research at www.wadhwa.com.

Foursquare’s Crowley: The Giants Are “Generic,” We Are Fun. I Wonder Who He’s Referring To…

Posted: 21 Aug 2010 02:58 AM PDT


Foursquare may have a tenuous partnership with Facebook Places— but don’t let the Kumbaya presentation fool you, these frenemies are gunning for the ultimate mayorship and Dennis Crowley is feeling very confident.

On Friday’s taping of Gillmor Gang with former TechCrunchIT Editor Steve Gillmor, Kevin Marks and John Taschek, Crowley discussed the opportunity for places, outlined his plan for the next iteration of Foursquare and knocked Google for its social awkwardness. While his disgust with Google’s mismanagement of the ill-fated Dodgeball is well documented, in his explanation you don’t need to read between the lines to understand he’s also talking about Facebook and how he plans to beat Goliath.

“It’s difficult to build services that are supposed to scale to you know 30, 50, 100 million users right off the bat, because they got to be kind of tailored down, by definition they have to be a little bit generic to speak to that large of an audience. And one of the benefits that we get from starting from scratch and starting as a mobile, social, local startup is that we start with zero users and we can put whatever personality and whatever face we want to on the product… Part of what you see on Foursquare, which is the game mechanics and the snarkiness and really more importantly like the fun and the playfulness that we build into the product, because I think that’s the stuff that most people relate to. And you can poo-poo how like those touchy-feely things don’t mean too much to users but I really think that’s the core and kind of the soul of the service and people identify with that.”

Still not convinced that Crowley’s painting the picture of Facebook as a generic-borderline-boring service, versus Foursquare, the hip, edgy, playful alternative? Let’s step back and consider recent evidence. Earlier this week, Crowley blasted a seemingly harmless tweet: “Call from my 86 yr old grandma: ‘Hello. I want to know if this Face-Book is like yours. It sounds like Four-Squared, but without the fun.’”

In a word, that’s what Crowley has brought to this undercover dogfight: fun.

Although it may sound silly, Crowley’s argument is logically sound. The core of “fun” is his most potent weapon to staying relevant.

Facebook is so huge (500 million large versus Foursquare’s 2.8 million) that its check-in service has to be simple and minimal to accommodate such a huge and diverse group— anything too quirky or outlandish runs the risk of alienating factions. While Foursquare cannot dream to compete with Facebook’s installed base, the startup can certainly differentiate itself by offering a creative, more dynamic product that is less utilitarian and more personality-driven.

As Crowley explains on the Gillmor gang show, he does believe that Facebook has a major role to play in the location ecosystem. Facebook can aggregate check-ins from different services and introduce new users (millions upon millions of them) to the world of check-ins. Thus, if Facebook stays in its corner, the relationship could be a very symbiotic one for Foursquare, which saw a record number of sign-ups on Thursday.

In the meantime, Foursquare is certainly not content to just wait and watch this play out. The rapidly expanding team is working hard to push out the new version within the next two weeks. Crowley, who says he’s “embarrassed” by Foursquare’s current game mechanics, says the next iterations of Foursquare will focus on “reworking and rethinking…the way the tips and the to-dos work, because that’s going to be core of the system.”

In other words, when it comes to the basic check-in, Facebook can be the king of the hill, but when it comes to creating the most engaging, valuable location experience, Crowley is ready for a fight.

Below are highlights from the Gillmor Gang show/ or see video above:

On the opportunities with Places
“I think there’s been a lot of folks who’ve tried to do… check-in aggregation services in the past and ultimately I think that’s going to be, that’s probably a good thing for the industry just so it’s not as fragmented…We’ve been looking at their API and playing with it a little bit, there’s a good chance we’re going to push our check-ins into the facebook feed and there’s a good chance we’re going to pull their check-ins out of it. But I think the big win here, just as Twitter and Facebook taught the world how to share things online photos and status updates and social commentary, I think Facebook is going to teach the world what check-ins are all about.”

On the differences between Places/Foursquare
“We don’t ignore the past. I think one of the great things about Foursquare is that we got a critical mass of users that interact with us two or three minutes every day. Like they do three or five check-ins, on a daily basis that’s not a lot of content, not a lot of data that we’re getting…but over the course of weeks and months it ends up being a lot interesting data about the types of places that people go, the types of things they enjoy doing, the types of people they hang out with. You can cut that stuff up and recycle it back to the users in…lots of interesting ways and I think that’s going to be a big opportunity for us.”

On the problem with Foursquare’s game mechanics
“I think the game mechanics, they really need a lot of work. They really need a lot of improvement, there’s a lot of stuff in the product that we’re not happy about, there’s a lot of stuff I’m kind of like embarrassed about, there’s a lot of things that we need to fix. And people love it as it is. Another big push that you’re going to see from us in the next couple of months is redefining and redeveloping a lot of these game mechanics. Just because we’ve gotten much smarter about it. And I think once we start applying a lot of the stuff we’ve learned to the stuff we’ve already built, then we’ll really start to blow people away.”

The next iteration
“The next version of the Foursquare app comes out in probably like two weeks or so and we’re really reworking and rethinking like the way the tips and the to-dos work, because that’s going to be core of the system. …We’ve been thinking for awhile, what’s act two for us? And act two is OK let’s take all this information about what people are doing, what people want to do, and let’s build this back into the app in a way that’s manageable for people and easy to share.”

On Google’s location/social strategy
“I think they’ve just always struggled with social. That could be an entire different, an hour long conversation over what is it with social that they don’t get… My belief has always been that in order for services to take off in the near term, in order for them to develop that passionate user base of people that go out and turn into advocates. The services need to have some kind of personality to them and some kind of identity to them and I think it’s really difficult and I felt like we ran into some of this when we were at Google. It’s difficult to build services that are supposed to scale to you know 30, 50, 100 million users right off the bat, because they got to be kind of tailored down, by definition they have to be a little bit generic to speak to that large of an audience. And one of the benefits that we get from starting from scratch and starting as a mobile, social, local startup is that we start with zero users and we can put whatever personality and whatever face we want to on the product. Part of what you see on Foursquare, which is the game mechanics and the snarkiness and really more importantly like the fun and the playfulness that we build into the product, because I think that’s the stuff that most people relate to. And you can poo-poo how like those touchy-feely things don’t mean too much to users but I really think that’s the core and kind of the soul of the service and people identify with that.”

On why the world needs more than one social graph

Our social graph is more representative of the people that you meet in the real world. I am starting to believe, if you asked me a year ago, Why would you ever need more than one social graph? You need representation of a couple of them. Between the three, Facebook is literally everyone I've ever shaken hands with at a conference or kissed on the cheek at Easter. Twitter seems to be everyone I am entertained by or I wish to meet some day. Foursquare seems to be everyone I run into on a regular basis. All three of those social graphs are powerful in their own

Facebook Connect came along and it really made the social graph open to everyone and makes building social apps easier. We think, oh, we are just building our social graphs on top of Facebook . But Facebook could benefit from our social graph, and Facebook could benefit from Twitter's social graph. You maybe are not just sucking data out of one, and that is the end of it, but maybe sucking data out of one and putting it in another and they are all working to make each other a little more powerful and a little more accurate.

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Facebook Kept Thousands Of Check-Ins On Lockdown For Months. Impressive.

Posted: 20 Aug 2010 08:02 PM PDT

As we noted a couple days ago, the video Facebook made to explain their new Places feature was a bit Apple-esque. But something else they pulled off recently was even more Apple-esque: the secrecy surrounding their location launch.

Sure, we spotted the code for it months ago when an overzealous engineer likely pushed the code (but not the actual feature) to the touch.facebook.com version of the site a bit early. And everyone generally knew that something in the space was coming from them. But what’s odd is that we hadn’t heard from anyone who was actually using it out in the wild in the past several months. The best we got was all the way back in March when someone saw a very early beta of it. As we noted at the time:

One person who has seen it notes that the icon for the location feature has a pushpin on a map. This was apparently a beta version of an app, but the functionality, if Facebook chooses to go with it, would likely be built into the massively popular Facebook iPhone app.

That person also told us the feature was built so that it could bring in check-ins from Foursquare and Gowalla. Obviously, all of that ended up being very close to what actually launched — but that was five months ago! Not a peep since.

With a company the size of Facebook, that kind of secrecy is rare — well, outside of that company at One Infinite Loop, of course.

During their event, Facebook revealed that they had been working on Places in earnest for about 8 months. And if you look at the Facebook HQ Places page on Facebook, you’ll see that there have been something around 7,000 check-ins from various employees over those past several months.

For some context, on Foursquare, AT&T Park in San Francisco is a place of massive activity. So how many total check-ins have there been there? 20,000 — and that’s over 18 months. Facebook HQ got 7,000+ check-ins through Places in just a few months. Clearly, a lot of employees were using it.

And yet, we saw no actual leaks in all that time from any of the nearly 1,500 employees. Not about the app, and not even about the Facebook Place pages.

Yes, plenty of us knew what was likely to come (like me, for example), but besides that one source five months ago (well, and that code), it was all from second-hand whispers and straight-up good guesses. I had no knowledge of the product from anyone who was actually using it in these past five months. And I don’t know of anyone who did outside of Facebook. That’s fairly amazing. And it would seem to speak to a company that is in control and has a healthy (or at least fear-inspiring) relationship with their employees.

(As a side note: it looks as if Facebook may be doing some data scrubbing on these previous check-ins as the numbers are hopping around and sometimes check-ins before a few weeks ago don’t show up at all.)

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Lady Java Video Marks Exact Point Where Geek Culture Jumped The Shark

Posted: 20 Aug 2010 07:19 PM PDT

Lady Java, whose whiny drone is making me pretty nostalgic for the days when non-developers thought Java was a kind of coffee, is the creation of the supremely dorky folks over at JavaZone in Oslo, Norway. And while you might argue that the Java developer community is still small and tight knit, that thing is currently rounding out 100,000 views on the originally posted YouTube video and countless others on repost.

“I want to program like they do at Oracle …”

I personally blame Twitter for killing geek culture. You know who else has a combined love for coding and Lady Gaga? Google CEO Eric Schmidt, who yes, follows her on Twitter. You know how I know that? Yes, again Twitter.

“Some people prefer other languages, but that’s okay if you’re retarded I guess.”

In case you’re confused, I don’t mean “jumped the shark” and “killing” in the traditional “lose popularity” sense, just that nerd culture is now officially mass culture with whatever decline in quality that implies.

But it’s not entirely Twitter’s fault. Hollywood should at least share part of the blame for making nerd life look somewhat glamorous in the hype surrounding David Fincher’s The Social Network and whatever that newest Google movie is. And for letting Ashton Kutcher weigh in on tech news.

Okay maybe that one is Twitter’s fault.

Tracing the blame is hard, but tracing the tipping point is not (Hint: It’s this video).

However smarter people influencing the machinations of mainstream is not entirely a bad thing; Maybe U.S. teens will finally consider engineering cool, and at least nerds know that Lady Gaga is not her actual name.

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Weekend Giveaway: A 1TB ioSafe SoloPRO Rugged Hard Drive

Posted: 20 Aug 2010 06:58 PM PDT


In honor of the launch of ioSafe’s new SoloPRO rugged fireproof/waterproof hard drive I present to you the “Win a 1TB Hard Drive Plus Nirvana Weekend Giveaway.” What can you win? Well, a 1TB hard drive, for starters, and you can choose either the eSATA or USB 3.0 model. You also win true happiness and enlightenment, although the attainment of these things requires years of right practice.

Continue reading…

AP Tries Its Hardest To Tie Rand Paul To Porn Industry

Posted: 20 Aug 2010 06:04 PM PDT

Kentucky senate candidate Rand Paul is being partially bankrolled by the porn industry, apparently. At least that’s the story that the AP’s Bruce Schreiner is pushing today. This is what appears to be the AP’s most recent hit job on Paul. Schreiner in particular has been accused of subtle bias (compare the headline to the text) in his Rand Paul reporting even before this story today.

What’s the evidence for today’s story? Zivity cofounders Cyan Banister and Scott Banister made personal donations to the Rand Paul campaign totalling $4,800. The Paul campaign has raised a total of over $3.5 million. Donors must state where they work, so they wrote down Zivity, says Cyan.

Despite the fact that the donations weren’t from Zivity, and that Zivity would barely fall under the definition of pornography, people are calling for Rand to return the money. Says someone who has no idea what he’s talking about:

“A lot of Kentuckians would have a problem with a candidate accepting money from organizations that are tearing down the culture,” said Martin Cothran, a policy analyst for The Family Foundation of Kentucky. “And we assume that the Paul campaign understands that.”

Schreiner himself seems to have little knowledge of Zivity either. By phone yesterday he asked me if I could tell him more about the site. He had not, apparently, ventured farther than the home page.

The fact is Zivity is nowhere near as graphic as mainstream television. Sexual acts are never shown, and often the models aren’t even undressed. A typical Saturday evening on Showtime or HBO would be far more likely to “tear down our culture,” in the words of whoever that guy is. And I doubt the AP would be trying to make a big deal out of a HBO employee making a donation to a campaign.

Meanwhile, the story has hit TV, although without Zivity being mentioned. Viewers must be imaging some really hot adult action bankrolling the Rand campaign.

This is a textbook example of hidden bias in the mainstream press. If the AP dislikes Rand Paul they should just come out and say it. Getting some crazy idiots in Kentucky to give them uninformed quotes instead is just so lame.

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Forget Ads In Books, Lit-Lovers Face An Even More Hideous Prospect

Posted: 20 Aug 2010 05:55 PM PDT

It's a pity readers don't want to pay for stories about the death of traditional media, because otherwise journalists and commentators would be riding a big fat cash cow.

In recent months it's been impossible to open a newspaper or magazine without being drenched by a tidal wave of "waaaaah"s and "woah"s and "oh my God we're all doomed"s from those of us who make our living selling words. If it's not newspapers – the fall of advertising! the rise of paywalls! the death of columnists! the birth of citizen journalists! – then it's magazines – no more long-form writing! the iPad! – or movies – piracy! Netflix! – or cable news – Twitter! YouTube!

This week it's books (again), and a stark warning from the Wall Street Journal's Ron Adner and William Vincent to anyone who prefers literature unsullied by full-page ads for SUVs and tobacco.

"With e-reader prices dropping like a stone and major tech players jumping into the book retail business, what room is left for publishers’ profits? The surprising answer: ads. They’re coming soon to a book near you."

Oh no! Lock up your Little Women! The Mad Men are coming!

The crux of the argument is this: books are the only word-based medium currently free of advertising (unless you count the pages full of ads for other books at the back of most mass market paperbacks). This isn't – as you might think – because ads kill our enjoyment of literature (many magazines publish fiction surrounded by commercial messages) but rather because until now it's been difficult to sell ad space in books. The lead times in publishing – and the shelf-life of paperbacks – are simply too long to deliver timely commercial offerings: who hasn't experienced the amusement of picking up an old paperback and being invited to send off for the previous title in the series for just 25c?

But now, thanks to e-readers, all that is changing. With electronic books, ads can be served dynamically, just like they are online – not only does that remove the problem of out-of-date ads being stuck in old books, but it also allows messages to be tailored to the individual reader. Those reading the Twilight books at the age of 14 can be sold make-up and shoes and all of the other things teenage girls need to attract their very own Edward. Meanwhile, those still reading the books at 35 can be sold cat food. Lots and lots of cat food.

And, so, goes the argument in the WSJ, with publishers desperate to make up the money they've lost thanks to the declining cost of ebooks (never mind that distribution and storage costs are dropping at precisely the same rates), we're soon going to see books chock-full of ads.

It's a compelling argument, but like so many compelling arguments made about the future of books, it's also hampered by consisting almost entirely of bullshit. For one thing, publishers are really not geared up to sell ads: they'd have to recruit armies of ad sales people who would be forced to actually sit down and read the novels and historical memoirs and chick-lit-churn-outs that they'd be selling against. Not going to happen.

And even if publishers do hire these crack ad teams, they'd be asking them to perform an almost impossible task: to accurately predict the readership of forthcoming books. Magazines and newspapers are able to tell advertisers weeks or months in advance what their circulation is likely to be, and so how much bang brands can expect to get for their buck. By contrast, even publishers with decades of experience have no idea whether a given title is going to sell one copy or a million. Which advertiser would have bought ads in the niche-niche prospect 'Eats, Shoots and Leaves' when the book was published in late 2003? And yet by January 2004 it had become an international bestseller. Traditional ad sales people would be constantly chasing their tails to try to keep up with such an unpredictable industry.

More importantly, though, any direct comparison between books and magazines (or newspapers) is completely misguided. Yes,  both formats deliver words to readers’ eyes but where a magazine is designed for light reading – something one skims in a doctor's waiting room, fully expecting to be interrupted at any moment -  a book is a fully immersive experience in which the readers expects to be transported completely to another world.

It’s much more appropriate to draw a parallel between books and film. There's a reason why movie theatres don't show commercials in the middle of films: advertising jars you away from the narrative, like a boxing glove on a telescopic arm suddenly punching through the fourth wall. People go to the cinema, or slip in a DVD, to escape from the commercially saturated real world; much the same reason as they crack open a good book. Putting an ad in the middle of a book is a great way to kill a reader’s enjoyment of the product, and ensure they won’t buy another one.

And yet, and yet… advertising is a supremely powerful force. And its operatives are sneaky – managing to come up with ever more cunning ways to infiltrate movies with their sales pitches, much like Leonardo Di Caprio's character does to his victim’s dreams in ‘Inception‘ (a rare movie, incidentally, during which a boxing glove to the face would have provided blessed relief). The most cunningly effective weapon in their arsenal is product placement: bribing filmmakers to ensure that their heroes and heroines are seen drinking a particular brand of beer or getting married wearing a particular designer's dress. It's the perfect crime: barely noticed when executed well, highly profitable and with the alibi of "adding realism" to modern characters.

And for precisely  those same reasons, it’s product placement – not straightforward, accountable, cordoned off display advertising  – that I  can see looming like a shadow on the publishing industry’s future x-rays. Not least because the practice has been with us for at least a decade. Back in 2001, Fay Weldon’s 'The Bulgari Connection' caused a stir amongst the literati when the publisher and author received a five figure sum from jewelers Bulgari in exchange for mentioning the company twelve times in the book’s narrative.

Since then the practice has become ever more prevalent, particularly in teen fiction – presumably because it’s easier to slip Pepsi into a book about modern teenagers than it is to wedge Burger King into ‘Oryx and Crake‘. In Sean Stewart and Jordan Weisman's novel ‘Cathy’s Book: If Found Call 650-266-8233‘, a character is described as wearing  Cover Girl ‘Lipslicks’ makeup. The mention was part of a cross-promotional deal with Proctor and Gamble, which saw the book promoted across the brand’s teen websites. As the New York Times reveals, an early galley of the book described the same character wearing instead "Clinique #11 ‘Black Violet’ lipstick" – the change being made ahead of publication, after the deal with P&G was signed.

But, cynical as that arrangement was, ‘Cathy’s Book…’ was published in the dark ages of 2006, way before the Kindle and the Nook and other mass-market e-readers opened up the possibility of what can be done with dynamically generate content. Imagine if such a deal were inked today (which it surely is being). Thanks to leaps forward in technology, P&G's ‘Lipslicks’ placement could be limited to, say, 10,000 reads of the book, after which the character suddenly starts wearing something different – either a newer Cover Girl sub-brand, or perhaps something from a rival manufacturer. Whoever makes the highest bid defines the character for the next batch of readers.

Since Ian Fleming defined James Bond by the Rolex on his wrist, many of our most popular literary heroes have been characterised as much by the products they use as by the lines they say. Once those key traits are perpetually being altered at the whim of the highest bidder – a prospect that technology has made very real indeed – well, that's when the misty-eyed defenders of old media will really have something to write about.

Pingg Studio Lets Artists Create And Share Invite Designs

Posted: 20 Aug 2010 05:40 PM PDT

Have the failures of Evite turned you off online invites entirely? Don’t despair, the other, prettier invite service Pingg has launched a Threadless-type Pingg Studio platform for artists and designers. And while the crowd-sourced content model is one of those that everyone is eager to copy, courting the design community is an interesting move for Pingg, which competes with Evite, Facebook Events, and My Punchbowl in the crowded online events marketplace.

“In terms of a service where anyone can load their profile and send traffic to their e-card. We’re the only ones doing this,” says co-founder Lorien Gabel.

What’s even more interesting is that Pingg is currently doling out cash to its community of designers, with a rewards program that pays designers $50 if they’re chosen for a Staff Pick, $100 as Top Designer, and other sums if they win the Pingg Design Challenge. Gabel says he’s considering eventually expanding the bonus program into full store model, “You inevitably pay for really good content.”

Pingg’s business model is currently freemium, and its core service is ad supported, but unlike Evite there’s only one ad. The Pingg premium feature, which comprises about 15% of all invites on Pingg, means increased functionality for large guest lists, no advertising, as well as a custom event URL.

In addition, Pingg has a print service where 2-5%  of all events are print integrated.  Right now printing postcards of any Pingg design costs $1.50 plus postage, and the cards can be sent internationally. Gabel is also planning a feature so that designers can turn off the print component, and also plans a possible profit share of the print sales with the Pingg Studio community.

A focus on building a designer and host community is a good move for Pingg which prides itself on focusing on development simplicity and design vs. chasing down every last cent. Gabel remains humble, “Initially some friends said ‘I’d love to do some designs and would love the publicity.’ And now we’re driving traffic and bringing awareness to artists.”

The implementation of a community platform is also a savvy move considering how passionate and grass roots the design community is. Gabel says, “It’s a little bit more than letting people know where and when. It’s about getting the feel of print as much as possible.”

Gabel reveals that there are about 200 designers utilizing the Pingg Studio platform so far. His future plans include a folded card print option, recruiting more designers, working on the business model and possibly implementing a a widget.

Pingg was founded by Gabel and his brother Matt Harrop in 2008 and is largely self funded, and most recently raising a round of Angel with Martha Stewart’s Omnimedia as a lead investor.


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OMG/JK: Facebook Places Is Here. Let’s Locate The Dead Bodies.

Posted: 20 Aug 2010 05:30 PM PDT

This week for OMG/JK, the show on TechCrunch TV that I do with fellow writer Jason Kincaid, we decided to switch things up a bit. Because there was a major announcement, Facebook Places, that we both covered, we decided to devote the entire show to that one topic. Yes, it’s a little longer than usual (about 20 minutes), but I think the conversation is pretty interesting and dynamic.

Obviously, we talk about what Facebook’s entry into the location space means for all the other players that are already there — namely, Foursquare, Gowalla, Google, and Twitter. Are Foursquare and Gowalla dead? Are Google and Twitter screwed? Has Facebook already screwed up the privacy aspect of this? Watch us debate it above.

You can also watch us and subscribe to us on iTunes here.

Here are some relevant links for the show this week:

It’s Official: Google Acquires Like.com

Posted: 20 Aug 2010 04:44 PM PDT

It’s official. Google has acquired Like.com. In a post on Like.com’s homepage, the company’s CEO and Founder Munjal Shah writes that the visual search engine has been bought by Google. We originally reported the acquisition last weekend. While terms of the deal were not disclosed, we’ve heard it’s valued at upwards of $100 million.

Shah’s message doesn’t really give us any hints as to what Google will be doing with Like.com but he alludes to the fact that he (and his team) will continue to work on visual search and cross-matching in e-commerce for the search giant.

The history behind Like.com and Google is complicated. In late 2005 Google was on the verge of acquiring a company called Riya, which was Shah’s first attempt at image facial recognition and tagging for consumers. Google eventually walked away from Riya.

In 2009, Riya was shut down, but the company had already refocused its efforts on ecommerce – using the Riya core technology to let people search visually by seeing images that are similar to other images. Like.com was born. And the company raised nearly $50 million in venture capital since 2006 and has revenue in the $50 million/year range.

From the product standpoint, Like.com operated its visual search engine and then went on to launch a number of smaller sites devotes to fashion and e-commerce. The company launched shopping personalization engine Covet.com; acquired street style social network Weardrobe, and rolled out visual styling tool Couturious. Most recently, Like.com launched a fashion Q&A site, What To Wear, which takes on a model similar to Q&A site Quora.

But there was a question as to what these verticals did for Like.com. The site's traffic seemed to stagnate over the past few months. And the other sites in the family don't have nearly as much traffic as Like.com

I doubt that Google wants to become a mini-fashion e-commerce empire so it’s unclear what Google wants with Like.com. It could be that Google, which has experimented with visual search, likes what it sees.

In the end, it seems like one thing stands clear. If at first you don’t succeed, try, try again.

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TinyChat Jumps To 1 Million Users, Adds Broadcast Feature And Facebook Chat

Posted: 20 Aug 2010 04:40 PM PDT

TinyChat, a straightforward chat platform that lets you create a throw-away chat room in a few clicks, is on a roll. The company has surpassed 1 million members in the 75 days since it began accepting user registrations, and is adding around 12,000 new members a day according to cofounder Martin Redmond (the service has been around for much longer than 75 days — it just didn’t promote user registration before then). Registration is optional, but it affords features like the ability to ‘follow’ other users and to tweak your site layout. And today TinyChat is launching a feature that will likely see that growth jump even more.

It’s hard to believe, but cofounder Dan Blake says that TinyChat has had almost no social features to speak of beyond its core text and video chatrooms. You’ve been able to ‘follow’ other users on the service which allowed you to send them private messages, but before now there hasn’t been a notion of presence — if you wanted to know which room your friend was chatting in, you’d have to ask them. Today that’s changing, as TinyChat is launching a broadcasting feature (which is essentially a Twitter clone built into the site) that lets users tell all of their followers when they’re joining a new chat room. This should help boost engagement and create a stronger sense of community, which will lead to even more growth.

Today the service is also adding support for the Facebook Chat protocol (you can now interact with users on Facebook from a TinyChat window and vice versa). Blake says that a TinyChat downloadable client based off of the Pidgin framework is also in the works and will support additional chat protocols, and an iPhone app is on the way as well.  Asked what’s driving this growth, Blake says that he can’t point to anything in particular, other than the fact that it’s just “really easy” to create a chat room with the service.

TinyChat is profitable and is still completely bootstrapped (it won the Crunchie for best bootstrapped startup at this year’s award show) with a team of six.

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InfoAxe Raises $3 Million For The Search Engine For Your Web History

Posted: 20 Aug 2010 04:30 PM PDT

Contextual search startup InfoAxe has raised $3 million in Series A funding today from Stephen
Oskoui, CEO of online advertising company Smiley Media. The startup had previously raised $900,000 in seed funding from Draper Fisher Jurvetson, Labrador Ventures, Band of Angels and Amidzad Partners. Gokul Rajaram, the “godfather of Google AdSense, has joined InfoAxe’s board.

InfoAxe, which launched in 2008, offers an alternative search engine that focuses on indexing your own browsing history to provide you more contextual results in searches. The site essentially delivers personalized recommendations based on your past browsing history. The site also offers a toolbar that allows users to 'record' public web browsing sessions, which they can search through their personal history from the toolbar itself or the Infoaxe website.

In two years, InfoAxe says that it has gained 4 million users and is bookmarking 20 million webpages based on user browsing on the platform per day. The startup’s co-founder Jonathan Siddharth says Infoaxe is approaching profitability and is currently looking to hire more engineers.

Last fall, the startup launched a real time search engine that relies on attention data generated by InfoAxe’s web history search engine.

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Flixster Hits 20 Million App Downloads. Top Movie App On iPhone, Android, And BlackBerry

Posted: 20 Aug 2010 04:20 PM PDT

It was almost exactly two years ago that Flixster bought one of the original popular movie apps for the iPhone from a college sophomore. Now, two years later, their Flixster iPhone app is the top movie application on the platform. It’s also the top movie app on the Android and BlackBerry platforms as well. All told, the app has just crossed a massive 20 million installs.

What’s perhaps even more incredible is that among these users, 70% of them are active in the past 90 days. CEO Joe Greenstein credits the companies combination with popular movie review aggregator Rotten Tomatoes (which they acquired from News Corp. in January).

“The combination of Flixster and RottenTomatoes has helped us pull away as the go-to application in the movie category – bringing together everything you need from critics, other users and your own friends to make the best decision about which movie to see," Greenstein tells us.

But Flixster isn’t sitting around content with their mobile success. The company has been working hard on experiences for other devices as well. They have an iPad app that just crossed 500,000 downloads. “iPad is our most heavily used app yet with over 5 visits per user per month,” Greenstein says.

He also notes that they just launched their first simple apps for the Roku box and for Sony TVs. So far, those have garnered 30,000 users in just 10 days, according to Greenstein.

In terms of what’s next, it’s something I’m very excited for: Rotten Tomatoes 2.0. It will have “some major new features and improvements,” is all Greenstein will say.

They’ll also be working on bringing Flixster to at four more platforms this year, Greenstein says.

We also just launched our first tiptoe into the Connected TV devices with simple apps for Roku boxes & Sony TVs.  Over 30,000 users in the first 10 days!

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Groupon’s Rob Solomon: “Over Time We’ll Figure Out China, And We’ll Be There”

Posted: 20 Aug 2010 03:34 PM PDT

With Groupon now expanding into Japan and Russia, the company’s plans for world domination continue apace.

In this week’s episode of our (newly retitled) show, we spoke to Chairman and COO, Rob Solomon about the strategy of expansion-by-acquisition, the risks of fraud, what keeps Solomon awake at night — and why China is conspicuous by its absence amongst the company’s recent launches.

Video below.

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IDC: U.S. Internet Advertising Rose 15 Percent In Second Quarter

Posted: 20 Aug 2010 03:17 PM PDT

Internet advertising is making a comeback from last year’s outright recession. According to new estimates from IDC analyst Karsten Weide, Internet advertising revenues in the U.S. grew 15 percent in the second quarter to $7.2 billion. This is the third rising quarter of year-over-year growth (10.5 percent growth in the first quarter and 2.2 percent growth in the fourth quarter of 2009), after three consecutive down quarters.

The second quarter matches last year’s fourth quarter (which is generally the strongest in the year for advertising), and was slightly above last quarter’s $7.0 billion, meaning the last three quarters have been flat sequentially, but growing on an annual basis.

IDC expects growth to slow slightly in the current third quarter to 14.4 percent, and then pick up to 16.4 percent in the fourth quarter, bringing the total for the year to $30.1 billion, up from $26.3 billion last year.

And IDC’s estimates concur with my earlier post that the growth in online video advertising is accelerating. IDC estimates that online video advertising revenues grew 114 percent in the second quarter to $476 million, compared to 94 percent annual growth in the first quarter and 48 percent growth in the fourth quarter of last year.

Rotating Solar House Generates Five Times The Energy It Consumes

Posted: 20 Aug 2010 02:56 PM PDT


What’s cooler than a rotating house? One whose solar panels produce five times the energy the house uses. That’s pretty incredible, considering that even zero-energy structures are rare.

German architect Rolf Disch built the home, called Heliotrope, to follow the sun throughout the day. The structure features triple panes of thermally insulated glass to strike a balance between letting light in and keeping the house cooler inside.

A giant 6.6-kilowatt-capacity rooftop solar panel called the Sun Sail slurps up the rays of energy, pumping them into the home and grid. Solar thermal collectors on balcony railings act as water heaters and radiators. On cloudy days, the house can be heated with wood chips and solar thermal heating.

The Sun Sail itself rotates separately from the house, adjusting itself to the best possible position at all times. This gives it a 30% to 40% advantage in energy production over traditional rooftop solar panels.

The house is green inside as well. Waste water goes through a purification system for reuse, and rain water collects in a rooftop basin. The toilet system turns human waste into compost.

Is it nice to live in? Disch must think so, as he resides in the prototype himself. Two other Heliotropes have been built to date, each costing about $2 million to build.

This video tours the house inside and out. Be warned: it’s in German and the time lapse at the beginning is set to some rocking techno music:

Hat tip to Inhabitat

The LG Optimus Tablet Won The Internet Today

Posted: 20 Aug 2010 02:49 PM PDT

You know what? The LG Marketing VP should get a raise. Stating the LG Optimus Tablet will be better than the iPad to the Wall Street Journal won the Internet today. It is without a doubt one of the most talked about tech stories of the day, which means the VP of Marketing simply did his job.

Our post on the tablet is today’s most commented story across the entire TechCrunch network. It’s Engadget’s second most commented post of the day and one of the highest visited posts on Gizmodo so far today. It even occupied the top spot on Techmeme for most of the day with 25 blogs joining in on the conversation. All because of a silly little quote.

LinkedIn’s iPhone App Gets Retina Display Support, Improved UI For Profiles

Posted: 20 Aug 2010 02:40 PM PDT

LinkedIn has upgraded its iPhone app today with Retina Display support, an improved UI for viewing profiles and more. Profile updates have been tweaked by highlighting changes and allowing you to see more information about what exactly was changed in a connection’s profile. From a profile update, you can also tap on your connection's name to go to the top of their profile, or tap on any section to jump right to that section. You can find the app here.

In addition to profile changes, the app will also now let you know when a connection adds a Twitter account, changes their address or phone number, or add their birthday. And the app will now show you how many people you have in common with a connection directly from the main profile screen.

The new version of LinkedIn’s iPhone also includes new icons and images, and is customized for Retina Display on the iPhone 4.

Linkedin, which now counts over 75 million members worldwide, has been looking to boost its mobile offerings and team, recently hiring senior Android engineer Cedric Beust. The company also launched a native BlackBerry app earlier this year.

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Foursquare Nabs Another Former Googler To Lead Marketing

Posted: 20 Aug 2010 02:30 PM PDT

As we noted a couple days ago, just because Facebook Places is out in the wild, Foursquare is not sitting around doing nothing. Aside from getting some space for employees in San Francisco, Foursquare has made another key hire — a director of marketing.

Jon Steinback is joining the location-based startup from Associated Content where he was Director of Product. Prior to that he had been at Google for a little over four years. At Google he did a range of things, first working on new AdWords features and then Google Video. Then he moved to London to run marketing across Europe for Google. His last year with the search giant, Steinback says he focused on policy issues, building out new privacy and child protection centers.

Steinback is the latest in a series of ex-Google employees now at Foursquare. Co-founder Dennis Crowley spent some time there after Google bought his previous startup, Dodgeball. His Dodgeball co-founder, Alex Rainert, was also at Google and is now with Foursquare as head of product. Harry Heymann, Foursquare’s engineering lead, spent five years at Google before making the move. Erin Gleason, who heads communications for Foursquare, came over a few months ago. And most recently, Siobhan Quinn, a product manager for Blogger made the jump to fill the same role at Foursquare.

In other words, Steinback should feel right at home. Though I’m not sure Google CEO Eric Schmidt will be pleased with all these defections.

In May, Associated Content was purchased by Yahoo, but Steinback says this opportunity was too good to pass up. He’ll get to return to New York, “where the tech scene is absolutely blowing up.“

“Talking with the Foursquare team reminds me of Google is 2004,” Steinback tells us. “Just so much energy and excitement.“

With Steinback’s hire, Foursquare is nearing 30 employees.

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Twitter Fills Tiniest Hole Yet With An Official Bookmarklet

Posted: 20 Aug 2010 02:24 PM PDT


Twitter continues to round out its collection of official widgets, buttons, and apps with a new addition today: an official Share Bookmarklet, which lets you share a webpage using Twitter’s official t.co link shortening service. You can grab the bookmarklet right here.

It works as you’d expect: you install the bookmarklet by dragging it into your browser shortcuts, then hit it whenever you want to tweet about the page you’re currently viewing. This brings up a Twitter-themed popup window pre-populated with a shortened link. It also has one other neat trick: the bookmarklet will sometimes offer recommended Twitter users for you to follow depending on what page you’re sharing.

This continues Twitter’s relatively recent trend of offering officially branded features beyond what’s available on Twitter.com — and filling the holes that third party apps and services previously occupied. Of course, there aren’t many Twitter-related startups built around a Twitter bookmarklet alone, so this is a relatively minor hole that Twitter is filling. Twitter did fill a big one last week, though, when it took over TweetMeme’s Tweet button, which is integrated on sites across the web (including TechCrunch).

Given the current trend, I wouldn’t be surprised if Twitter eventually begins offering its own browser extensions as well. Update: Turns out they already have an official extension for Safari (thanks to Miguel Rios for the heads up).

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Fewer Americans Need TVs, But Only Because More Need Flat Screen TVs

Posted: 20 Aug 2010 12:41 PM PDT

In the hierarchy of American Needs, the TV used to be paramount. But fewer and fewer Americans feel that they need a TV anymore. A headline-grabbing report from the Pew Research center titled “The Fading Glory of the Television and the Telephone” shows that more Americans surveyed say that they need their home computers (49 percent), cell phones (47 percent), and even microwave ovens (45 percent) than their TV sets (42 percent). The number of people who consider the TV to be an essential item dropped from 52 percent last year.

This is a stunning drop in a single year, and surely it shows that more people have their faces glued to their computer screens and cell phones, which is taking away from how they feel about their TVs. Except that is not what the data shows at all. The survey breaks out TV sets and flat screen TVs. Guess how many people consider a flat screen TV essential? It is 10 percent, which when you combine it with the regular TV sets, brings you back to 52 percent.

Only 5 percent of people said that they absolutely need a flat screen TV last year. So the total combined need for TVs still went down a bit (by 5 percent), but it is not quite as dramatic as the headline would lead you to believe. That’s about the same difference as the amount of people who no longer say the need a landline phone, which dropped 6 points last year to 62 percent.

And what product do Americans say they need the most? The good old American car, of course, with 86 percent saying so (but even that is down by 2 points).



Foursquare Has Been Trying (And Failing) To Trademark “Check-In”

Posted: 20 Aug 2010 12:34 PM PDT

You’d be hard-pressed to find a hotter term in technology right now than “check-in.” Following Facebook’s entry into the location space with Places, it will soon be a term that hundreds of million of web users know well. But millions already do know it well thanks to Foursquare. While it seems likely that they weren’t the first to use it, they are the ones that made it ubiquitous among the location-based services. As such, they’ve been trying to apply for a trademark on the term.

Foursquare (technically Foursquare Labs, Inc.) filed the trademark application on March 11 of this year. But in June, the USPTO turned down the trademark request stating that “the applied-for mark, as used on the specimen of record, is merely informational matter; it does not function as a service mark to identify and distinguish applicant's services from those of others and to indicate the source of applicant's services.“

Further, the USPTO wrote that:

The applied-for mark, as shown on the specimen, is merely informational matter because the word "check-in" appears on the applicant's website page as merely a part of the informational phrase "check-in find your friends." Consumers seeing the mark as it is used on the specimens of use would not conclude that the mark functions as a service mark to identify and distinguish the applicant's services from those of others

But Foursquare was allowed to respond to the ruling and did so nine days later clarifying the wording a bit. But a couple weeks later, some unnamed company apparently sent a letter of protest stating that the term “check in” was generic.

Three days after that, the USPTO once again turned down Foursquare’s request, this time stating that “registration is refused because the applied-for mark merely describes a feature and the purpose of applicant's goods.” Further, the attorney on the case included several Google searches for “check-in apps” to show that more than just Foursquare was identified with the term.

That said, the USPTO has once again given Foursquare up to six month to respond to the refusal. It appears they haven’t done so yet, but I’ve reached out to the company to see if that is their intention.

Foursquare’s filing for the check-in trademark identifies it as “downloadable software in the nature of a mobile application for displaying and sharing a user’s location and finding, locating, and interacting with other users and places.“

Interestingly enough, Foursquare is also having a difficult time trademarking their name. In June, the USPTO also turned down for a trademark on the name. But in that case it appears to be because Fourquare only sent a screenshot of their site and not the actual application for the USPTO to review. “The specimen is not acceptable as evidence of actual trademark use because it is an advertisement for the applicant's website.  Thus, it fails to show proper use on actual downloadable software,” they noted. Foursquare also has six months to respond to that.

It’s worth noting that a lot of companies are attempting to trademark the term “foursquare” but all seemingly for different reasons.

Foursquare has also tried to trademark the term “Foursquare Check-In” but are having a hard time there because of the “check-in” aspect for the reasons stated above.

One trademark that it appears Foursquare was granted was for the term “4sq.” Notably, this is the .com name that Foursquare uses for its URL shortener.

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Horror Film Finds Actual Business Use For Chatroulette

Posted: 20 Aug 2010 12:03 PM PDT

Remember the Blair Witch Project? With its campaign for The Last Exorcism, Lionsgate Films has taken the amateur video horror film idea to the next level, proving that there’s a way to use Chatroulette as more than just a medium where you can see strangers get naked and watch Ben Fold’s covers.

The ad (which has received 339, 743 views thus far), cleverly spoofs Chatroulette’s propensity for nudity, luring unsuspecting viewers in with the temptation of a cute girl about to take off her clothes.

Once again, it seems as though the horror genre is light years ahead of the Hollywood curve when it comes to grassroots viral marketing and you know, using the Internet. The tactic seems to be working, as IMDB’s Movie Meter is plotting a 23% rise in the film’s popularity in the past week, caused by links on sites like Gizmodo and this one.

From the YouTube comments:

“You know what this proves? That men can easily be lured to their brutal deaths with sex. That’s both sad and hilarious.”

The decision to spotlight Chatroulette is made even more interesting by the fact that the film is rated PG-13.

Founded by Andrey Ternovskiy, Chatroulette’s been trying to clean up its act in a bid to appeal to advertisers and investors. In the sense that eyeballs eventually translate into cash for at least some of the parties involved, The Last Exorcism campaign is a small, albeit meta, step in the right direction.

Update: Representatives from Lionsgate PR would not give me a straight yes or no answer when I asked if the reaction shots on the left were videos of Chatroulette users i.e. “real.” Hmmm …

Update 2: Danielle DePalma from Lionsgate confirms that the reactions are in fact real. Nice.

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GinzaMetrics Aims To Bring Simplicity To SEO Software

Posted: 20 Aug 2010 11:30 AM PDT

There’s no doubt that SEO can be a confusing, yet incredibly important task for businesses both big and small. Enter Y Combinator-backed GinzaMetrics, which is unveiling its “pro-sumer” SEO software today.

GinzaMetrics’ software, which is in private beta, is aimed at being an easy-to-use application that lets companies bring SEO in-house instead of paying agencies do it, which can be costly. Not only does GinzaMetrics save money for companies, but it automates reporting and analytics involved in SEO and promises the same results as an agency.

GinzaMetrics, which can be set up in five minutes or less, allows site owners do per-page SEO instead of just driving traffic to the frontpage. Within the application, users will be able to access ranking data, see how each individual keyword performs on organic search. The software tracks Google and Yahoo! (Bing is coming soon), every day for the top 100 results on the user’s selected keywords.

The startup plans to add paid search support at a later date. And GinzaMetrics integrates with all the major analytics tools including Google Analytics, Omniture SiteCatalyst, Webtrends, and Coremetrics.

Another interesting tidbit— because the company’s founder lived in Japan previously, the software handles Japanese as well as English; and already has a number of Japanese customers.

While GinzaMetrics competes with a number of other software products that automate SEO such as Bright Edge and Conductor, the startup is hoping to differentiate itself as a cost-effective and easy to use alternative. GinzaMetrics offers a free plan, with paid plans starting at $49 per month.

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Industry Insiders Say Online Video Advertising Is Reaching A “Frenzy Point”

Posted: 20 Aug 2010 09:38 AM PDT

With the flood, comes the feast. Advertising dollars are pouring into online video. Some of the largest online video ad networks are seeing revenue growth accelerating this quarter, and expect the fourth quarter to be even bigger. “Last year we grew 40%, this year we are growing 90%,” says Keith Richman, CEO of Break Media. He expects Break’s total revenues in the third quarter, which include more than just video advertising, to be well above $10 million for the first time.

Tremor Media, which is one of the largest video ad networks and second only to Hulu in the number of video ads it serves, is also seeing a doubling of ad revenues. “It has reached a frenzy point over last three quarters.” CEO Jason Glickman tells me. “We see television dollars moving to online video,” he declares. The fourth quarter “is lining up to be a monster,” and next year Tremor’s revenues are on track to top $100 million for the year.

TV advertising still dwarfs online video, with about $70 billion spent on there in the U.S. Online video advertising is estimated to reach $1.5 billion this year, up from $1 billion last year, according to eMarketer. “Our share of the $1 billion or $2 billion pie for online video is insignificant compared to the budgets that are coming over,” says Glickman.

Relatively small shifts in advertising budgets from TV to online can create huge swings in growth for online video. eMarketer estimates that online video advertising will grow 48 percent in 2010, accelerating from 39 percent growth last year (which was a weak year compared to the 127 percent hypergrowth in 2008). But judging by what Tremor and Break are seeing that $1.5 billion estimate might prove to be conservative. Glickman expects revenues next year to top $100 million. Caveat: treat their experience as anecdotal snapshots of the industry which happen to match.

It very well may just be the big ad networks and properties like Hulu that are seeing the vast majority of new ad dollars. “If you are not in the top 10 on comScore you will have a tough time, notes” Richman, “money goes to the guys who are big.” TV advertisers want to match their reach on TV, and online video that is deemed to be safe, professional content is starting to get to those levels. It is not American Idol,” says Glickman, “but it is like a large cable network.” Advertisers can’t yet reach 30 million people in an hour with a single media buy online, but they can reach that many people over the course of a week, and they can target to specific demographics and get some feedback on how the ads are performing, which TV advertising still can’t do very well.

Advertisers are becoming increasingly comfortable with putting their video ads online. Hulu, which may be filing for an IPO, is the largest beneficiary of this trend. If an advertiser already puts ads against House or The Office on TV, it is a no-brainer to match that online on Hulu. But they are also beginning to trust the larger video ad networks like Tremor and Break, which put ads against a wider range of professionally-produced video from guy videos to sports clips and movie trailers.

“I have never seen test budgets that start at half a million dollars,” says Glickman. Usually ad agencies start testing with one tenth as much. Also, he is seeing about a dozen larger commitments in the double-digit millions over the course of the year, deals he calls “online video upfronts” because they are negotiated in advance like regular TV upfronts. According to comScore, Hulu showed the most video ads in July with 783 million, but Tremor came in second with 452 million video ad views.

Video is definitely shaping up to be a large and growing business for the bigger players and ad networks, but will those advertising dollars trickle down to the smaller guys as well?

Photo Credit: Flickr/ Cathy Stanley-Erickson.

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