Saturday, September 11, 2010

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A Massive War Is Approaching As The Tablet Market Cannot Sustain Six Separate Platforms

Posted: 11 Sep 2010 09:02 AM PDT

Can you hear that? It’s the sound of war. Better choose your side soon, too. The tablet wars are going to get nasty.

Apple’s army is prepped, already backed by over 3 million zealous iPad owners. But the Google Android horde is quickly banding together and will soon offer countless weapons from several major CE houses and dozens of smaller camps. Google is also quietly forming the stealthy Chrome OS platoon that will likely enter the battle a bit late, but shouldn’t be forgotten, ether.

Then there’s the suit & tie brigade with their trusty BlackBerry holstered on their hips, ready to be tethered to the coming BlackPad. Don’t forget about the wildcard: The HP-produced, webOS-powered PalmPad no doubt has a couple of tricks, enough to put up a decent fight. Then there’s the battle-tested Windows that might still be able to fire a few direct shots.

The tablet wars are coming and not everyone is going to survive. There simply isn’t enough market share to support the five or more upcoming tablet platforms.

Yahoo Mimics Facebook With Groups Update; Users Retaliate

Posted: 11 Sep 2010 08:27 AM PDT

A few weeks ago, Yahoo updated Groups, the company’s online discussion board and forum offering, with a UI makeover, chat funcionality, easier photo sharing and more. The result ended with a more sleek, Facebook-like interface for each Group that resembles a Facebook news feed. Apparently, Yahoo’s millions of Groups users (which is surprising, by the way), aren’t happy with the changes.

New features include a stream-like view of messages and updates in a group, and a “Post Something” box, which resembles the Facebook status update box. According to the 400-plus comments on this Yahoo forum, users hate the new interface for a number of reasons, but the most apparent complaint was that the interface resembled a social network. Here a few choice comments from the forum:

Hate this already, I checked out the new format and its horrible. I don’t want facebook, I don’t want all this stuff, it isn’t why I love Yahoo! Groups or what I want from the groups. If there isn’t a classic group option I will without a doubt leave. I need a group description section for one thing. The new format is horrible, please let us keep the original format if we choose too. I don’t want to go through this change at all, it isn’t that I am not for updating, but you’re giving up everything that makes Yahoo! Groups a great place to meet online and making it into every other piece of crap already available to me elsewhere on the internet.

Unfortunately, Yahoo in their drive to become a “social network” and integrate with Facebook, have failed to understand why people use Yahoo groups and the function Yahoo groups play. If they insist on going ahead with this integration, they will destroy one of Yahoo’s best assets. If they are smart they will sit up and listen, and leverage this difference with Facebook. Yahoo needs to ask itself – Why did Yahoo group moderators/members not set-up/migrate to Facebook but instead stayed on Yahoo?

I run a swap group for miniaturists. That is what we use the group for; not for general social networking. And in particular, we use the database tables for organising our swaps. It seems that these are likely to go. Without these, I cannot run our group. We don’t need a social networking site; we want one with the tools that we need to organise our group’s specific interests. And we have that in the group as it is. Please don’t make these huge changes.

Yahoo has been making a considerable effort to make its products more social, outsourcing this to Facebook at times. But clearly not all users are ready for this transition to social-at what point does Yahoo have to forgo its strategy for certain products to please users?

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Yahoo!
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Don’t Waste Money on a New Computer for College

Posted: 11 Sep 2010 07:49 AM PDT

Heading off to college? Here’s my suggestion: buy a used laptop from Craigslist and install Ubuntu onto it. Seriously. You don’t need a new computer for college. If you’re pursuing a liberal arts degree, you really don’t need a brand new computer just to write all the papers you’ll write. If you’re pursuing an engineering degree, the chances are high that your department’s computer labs are better than anything you can buy for yourself.

TC Teardown: Etsy, It’s Crafty

Posted: 11 Sep 2010 07:11 AM PDT

Editor’s note: Engineers love to take things apart to learn how they work. They call this a teardown. In his ongoing series of TC Teardowns guest author Steven Carpenter takes apart popular business models to see how they work. He’s done this with Groupon, Chegg, and Zynga. This time, he looks at handmade goods marketplace Etsy.

A few weeks ago, Etsy, the New York-based marketplace for handmade goods around the world, raised $20 million in new capital at a $300 million valuation—3 times the valuation of its last round in January, 2008. In contrast to the meteor-like rise of Groupon and Zynga, Etsy's revenues have grown consistently since its launch in 2005, while establishing a trusted brand and international platform for makers of all kinds of wares to sell their products. Based on my analysis, Etsy will do $380 million in gross merchandise volume (GMV) and generate $30 million in revenues this year, up from $180 million in GMV and $15 million in revenue in 2009. This implies a 10X revenue multiple in the company's latest valuation, compared to EBay's 3.6 multiple.

The two key questions for Etsy are: How big is the market for handmade products? And can it continue to take share from eBay's marketplace business?

Let's take a look at how Etsy makes money and how it can reach $100 million in revenues.

What is Etsy?

Etsy provides an online marketplace where artisans can sell their wares to people looking for one-of-a-kind, handmade goods. Unlike sites such as eBay, Etsy does not run any auctions. All goods are for sale at a fixed-price.

Based on data from Compete, 5.6 million people visit the site each month, up from 4.4 million a year ago, and that is after rebounding from a rapid fall-off in traffic following the holiday shopping season. (Click on charts to enlarge). The good news appears to be that Etsy is able to retain new buyers and sellers who try it out, presumably due to a great shopping experience.

Etsy has over 6.7 million products listed for sale, half of which fall into just three categories: jewelry, art supplies, and vintage. Jewelry alone, with 1.5 million listings, accounts for nearly 25% of all of Etsy's products.

While this is trivial compared to eBay's 117 million listings, Etsy's 6.7 million products are more than double eBay's 3.2 million listings for similar handmade goods. Ebay's largest crafts categories appear to center more on hobbies such as sewing and scrapbooking, suggesting Etsy is attracting new sellers into the market.

In a little over four years, Etsy has firmly established itself as the place to buy and sell items such as art, glass, jewelry and art supplies, among others. This suggests further that eBay continues to be vulnerable across other categories where 1) community is a core part of the selling-buying experience, and 2) the company has been unable to attract higher-end sellers.

For a company of its age, Etsy has gone international exceptionally fast. It has sellers in over 150 countries and supports 23 currencies. It is rare for a startup to have garnered international demand so quickly and it is operationally very difficult to support. This is a huge competitive advantage.

How is Etsy Doing?

Etsy makes money in two ways: it charges sellers $0.20 to list a product for 4 months, regardless of the price of the item, and then it receives a flat 3.5% commission for each completed transaction. This contrasts starkly with eBay's complex listing and commission structure.

I compiled and analyzed the data Etsy releases in its monthly "Weather Report" since 2008. Based upon my projections for the upcoming quarter, Etsy will do close to $30 million in revenues this year, up 80% year-over-year. (This is on the low end of the $30 million to $50 million range CEO Rob Kalin himself projects)

When you look at my estimates of where Etsy derives its revenue from on a monthly basis, two interesting things emerge. One, similar to other retailers, Etsy generates a disproportionate percentage of its revenues during the fourth quarter, suggesting the company is largely seen as a site for gifts. And two, while the business is driven by commissions, Etsy is seeing incremental revenue by keeping listing fees low so that sellers keep products on the system longer (ie, "Legacy Listing Revenue").

Let's look a little deeper at each of Etsy's revenue components. Gross merchandise value (GMV) is the total value of goods sold. Looking at this metric each month since January, 2008, this has been steadily growing, with December witnessing the largest sales volume. Last December, Etsy achieved its highest total of $25.6 million. After reaching a new plateau, the company sold $25.6 million worth of good. This holiday season should see 2X-2.5X last year's sales.

Etsy is achieving these gains by increasing both the volume of transactions as well as seeing a higher average price point. The number of items sold each month has risen steadily from under 400,000 in January, 2008 to 1.4 million in August, 2010. Meanwhile, Etsy’s average sale price has increased from $12.25 to $18.16 in that same time period

Etsy is also seeing steady growth in attracting new listings. As evidenced in the data, new listings are growing at a much faster rate than new members joining the site. This suggests that legacy sellers are continuing to value Etsy as a sales platform, but that it has to do more to attract both newbie sellers and buyers. Once consumers interact with the site and find something to either buy or sell, they seem to become loyal customers.

In terms of the team and profitability, Etsy has not had to spend resources on advertising and marketing. Etsy is an engineering and support-driven company, 90% of the people are either building the platform or supporting buyers and sellers. To put a fine point on this, Etsy has more people dedicated to its community (12) than it does to marketing (8). This suggests the company should be able to scale the business profitably without an outsized investment in customer acquisition.

If you look at Etsy's online marketing efforts, it spends next to nothing on customer acquisition.

Etsy’s Growth Opportunities

While eBay saw its marketplace growth stagnate at just over $1 billion, I see several areas Etsy must optimize just to pass $100 million in business:

  1. Expand Internationally with localized platforms. Etsy experienced unusual organic international demand from the outset. While the majority of usage still occurs in the US, Etsy needs to take a page from Groupon and get into the local markets and establish a strong local presence quickly. Scaling and supporting an international platform is difficult so if it can figure it out over the next 12 months, it will provide a strong competitive advantage
  2. Attract More Sellers and Listings. As I discussed above, new users are not keeping pace with new listings. The company is already running local meetups, which is a smart strategy to take from eBay's playbook. I am not sure if Etsy yet has an annual awards ceremony or eBay Live equivalent but there are many incentives the company could employ to encourage current power sellers to bring in new sellers and perhaps get a cut of their sales.
  3. Increase Merchandise Value. Etsy has done a good job of providing a trusted platform for sellers, which will naturally lead to higher-priced goods. It needs to continue in this direction and explore additional categories than are consistent with its brand position.
  4. Better matching of local supply-demand to avoid shipping charges. One of the biggest challenges to additional sales is expensive shipping rates. Etsy has to match local supply and demand and act as a matchmaker for similar or related products by geographic area.
  5. Improve Discovery On Site and Personalization. Etsy has a common problem for marketplaces in that it is very difficult to find certain products. I anticipate that the company will continue to improve in this area as well as in personalizing product and artisan recommendations. Last December, the company acquired a company called Adtuitive to presumably spearhead these efforts.
  6. Leverage Community Self-Selling and Sellers Groups. Etsy's competitive advantage is that it has now reached the inflection point of a community of artisans. The company needs to allow those artisans to form collective seller's groups and merchandise and advertise their wares together. The more Etsy can distribute its marketing efforts to the sellers themselves, the more it reinforces the community ethos and its economics.
  7. Address Seasonal Nature. With nearly 50% of gross sales come during Q4, Etsy needs to merchandise products around other gift-giving occasions, such as birthdays and holidays, and have its sellers market them.
  8. Create Additional Value and Revenue Streams. In May, 2008, Etsy launched a compelling service called Alchemy, that allows customers to put out a bid for custom-made goods. I looked at two random days over the past 2 weeks and counted 193 and 192 respective bids for goods. Right now Etsy allows this to be done for free, but this is an area where I can see a lot of promise. Furthermore, at some point in the near future it might make sense, given its international footprint, to create its own payment method.

Bugatti teardown photo credit: Flickr/David Villarreal Fernández

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Etsy
Steven Carpenter
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Google Maps, Like YouTube, Get Instantized

Posted: 11 Sep 2010 03:26 AM PDT

So Gmail Instant would actually be useful, but seriously what’s next, Google Calendar Instant? Google Image Search Instant? Okay, maybe those would be helpful too. In fact it’s really difficult to think of a Google service that wouldn’t benefit at least slightly from Instantization.

Inspired by Google Instant and the story of engineer Feross Aboukhadijeh, who got a YouTube job offer via his YouTube Instant experiment, Alabama-based developer Michael Hart used jQuery and the Google Maps API to build Google Maps Instant, a pretty nifty Google Maps updating search for anywhere in the world. Much like Feross, Hart is also looking for a job.

According to Hart, the Instant interface, which “instantly” travels to the place it auto predicts you’re looking for, was created in 193 revisions and 4 hours (he’s still working on the Maps pins and the iPhone/Android functionality). But, while being able to instantly watch the permutations of where you’d like to go is kind of cool, I don’t think Google Maps Instant has the potential for YouTube Instant-level moments of serendipity, yet. My most recent YouTube Instant “moment,” below.

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Google
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Microsoft To Shut Down Disaster Communication Service Vine

Posted: 10 Sep 2010 08:39 PM PDT

It’s ironic that Microsoft chose the day before the anniversary of the 9/11 disaster to announce the shuttering of Vine – the service was built to help people in exactly those types of situations. We first wrote about Vine in April 2009 – it was an ambitious new service to help keep friends and family in touch during emergencies:

Vine is designed to keep family and friends in touch when other communication methods are either broken or not particularly efficient. Times of crisis usually involve a breakdown in mobile phone or other key communication infrastructures, and Vine is designed to be as hardy as possible to keep people connected. Vine can be accessed via a desktop client (Windows only for now), text message or email.

Here’s the email Microsoft sent out announcing the shutdown of the service on October 11:

Subject: Important Notice: Microsoft Vine beta service will be available only until October 11, 2010

Thank you for your valuable collaboration and participation in the Microsoft Vine beta program over the past year.

Releasing products and services in beta form gives us a way to learn and adapt our technologies in a real world environment, to gather valuable feedback from our customers and partners and ensure that new models are sustainable. And more specifically, the Microsoft Vine invitation-only beta program was designed to garner participation and subsequent feedback from consumers, communities and governments about the challenges they face today and explore how technology can improve and enhance communications.

Despite positive feedback from customers like you over the course of Vine’s private beta, Microsoft has made the decision to discontinue Microsoft Vine effective October 11, 2010. After this date, you will no longer be able to access Microsoft Vine. We suggest that you record any contact information currently stored in Vine, prior to October 11th.

The decision to discontinue future development of Microsoft Vine was not easily made. Multiple options were thoroughly explored and evaluated with rigor and in the end it was determined that Microsoft Vine is not sustainable as a standalone offering.

Thank you again for your valuable feedback on this product. The key learnings acquired over the past year from the Vine beta will be used to inform and strengthen future product concepts and offerings. If you have any questions or concerns, please email vinemail@microsoft.com.

We’ve added Microsoft Vine to the TechCrunch DeadPool.

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Microsoft
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Fitness Tracker Fitbit Gains Another $8 Million

Posted: 10 Sep 2010 07:34 PM PDT

Fitness technology startup and TC 50 finalist Fitbit just raised $8 million in funding, judging by this recent SEC Form D filing. According to information gleaned from the document, the $8 million looks to be part of a Series B round that the company hopes will eventually top out at $9 million.

The filing also lists The Foundry’s Brad Feld as joining the board as part of the financing, but has no details as to the extent of the The Foundry’s involvement. With no major milestones since its last $2 million round of Series A (lead by True Ventures) in October of 2008, one can only speculate about the driving force behind Fitbit’s latest bit of financing.

The company’s current key product thrusts are the Fitbit Tracker and its web-based fitness data aggregation technologies that track weight, nutrition, exercise schedules and other health related data.

Update: We’ve found Brad Feld’s FitBit profile, and it looks like he’s been using it everyday this past month.

Thanks: FormDs.com

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Fitbit
Brad Feld
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Apple Starts Evicting App Store Name Squatters

Posted: 10 Sep 2010 06:40 PM PDT

As you’ve probably heard, Apple has been taking steps to make whole iPhone/iPad/iPod touch app development process a bit more orderly. They actually now have some (quirky) guidelines in place to help developers, and they’ve un-banned the use of some third-party development tools. It appears they’ve also quietly done something else: ended App Store name squatting.

This issue was talked about quite a bit last October, when a developer learned someone had secured the rights for the name he wanted to use for his app in iTunes Connect, but hadn’t actually made an app to go along with it. The situation, as described by PC World last year:

But a developer doesn’t need to actually go through the entire process of developing an application in order to register a name. The submission process can be completed only halfway and left pending pretty much forever, leaving the name stuck in limbo. Plus, you can do this multiple times for different names, without ever having to write a single line of code.

But now, Apple has begun emailing developers if they’ve failed to upload their binary for 90 days after first starting the app creation process. Apple warns the developer that they have another 30 days to do so, or the record will be deleted from iTunes Connect. And the key point: “The app name will then be available for another developer to use.”

Now, name squatting wasn’t without a barrier to entry before — you still needed to pay the $99 yearly fee to be an official developer. But that $99 ensured you could basically squat on as many names as you wanted (though Apple would take back names that were proven to be trademarked).

This is a long overdue good move to stop such behavior. Below, find the email Apple is sending out (names of people and apps have obviously been changed).

[photo: flickr/psd]

[thanks Peter]

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App Store
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TechCrunch Has Breached Your Right To Free Speech? Yeah, Shut Up

Posted: 10 Sep 2010 06:06 PM PDT

You know something I love? The US Constitution.

Not because it's one of the most artfully drafted pieces of legislation on the planet (covering the whole spectrum of rights due to every man, woman and child in the United States and yet still with less legalese than the average EULA). Not because of the wonderful stories that surround its creation (I love that there were three  years between the ratification of the Constitution and the ratification of the Bill of Rights because the framers got tired and wanted to go home).

No.

The reason I love the US Constitution is that it’s written down, so anyone can read it.

Back in the UK, we have what's laughingly referred to as an "unwritten constitution", which is as logical a construction as "inedible food" or "dry water". Really what we Brits have is a rag-tag collection of case law, treaties, Royal prerogative and convention that, taken as a towering whole, define the relationship between the British state and her Majesty's subjects. It's no wonder, really, that you people wanted to throw it out and write your own.

And yet, given how comparatively accessible your rights are – a core document of seven articles, the ten main amendments comprising the Bill of Rights plus seventeen more to tidy up things you should have got right in the first place – it's franky amazing to me as a Brit that so few Americans appear to have read them.

No more alarming is the lack of knowledge than when it comes to "freedom of speech". Barely a day goes past without a (usually anonymous) troll in the comments section criticising TechCrunch for deleting their abusive, inaccurate, trollish comment on the basis that we're attacking their “right to free speech”.

And it’s not limited to TechCrunch: the story is similar across much of the Internet. Take this post by Michelle Greer, on her blog. Michelle is a TechCrunch reader who was subject to a barrage of abuse – largely focussing on her gender – when she wrote a comment on Mike's post about female entrepreneurs. The post itself makes disheartening reading, but its the comments that made me so frustrated I wanted to punch the screen.

One particularly ignorant dick of a commenter accused Greer of wanting to "ban all free speech for men" while a more measured response suggested that "freedom of speech has limits". Meanwhile a Business Insider post on the same subject, a commenter (claiming to be a woman) took the side of the trolls, saying "I’ll fight for anyone’s right to freedom of speech, even if I don’t agree with (nor resemble) it." Whatever that means.

Meanwhile, Rackspace's decision to deactivate the hosting account of hate-preacher Terry Jones (who by the way was much more fun when he was part of Monty Python) sparked a similar debate, using similar language. Hilariously, given the site in question was promoting the burning of books, Jones was quoted in multiple news outlets saying that "We feel that [Rackspace's move is] definitely an indirect attack on our freedom of speech".

Even elected officials are at it, with Sarah Palin recently taking to Twitter to support "Dr" Laura dr Schlessinger's decision to quit her radio show because "her 1st Amend.rights ceased 2exist "

Hell's teeth, she even used the "1st A" word.

Enough. It pains me that I – a Brit – have to lecture Americans – particularly those of you who would be President – on your own laws, but here's the stark truth of the matter… You do not have a blanket right to freedom of speech: not in stores, not in bars, not in other people's private homes and not – in almost all cases – on the Internet.

And you certainly don't have that right enshrined in the 1st Amendment, which reads….

"Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances."

Read that again. The clue is right there in the first word of the first amendment. CONGRESS shall make no law. Not TechCrunch shall make no law, or Rackspace shall make no law or talk radio shall make no law or I shall make no law or you shall make no law, but CONGRESS.

Which is to say, the US government shall not arrest you or otherwise prevent you from exercising your right to say whatever batshit crazy bullshit pops into your head. That's why David Petraeus and Robert Gates and the FBI were reduced to begging Jones to stop his book burning nonsense, but why Rackspace – by virtue of not being a branch of the Federal government – could yank Jones's site without so much as a with-your-leave or a by-your-leave. Rackspace's relationship with Jones was contractual, not constitutional – and their contract is clear…

You may not publish, transmit or store on or via the Rackspace Cloud’s network and equipment any content or links to any content that the Rackspace Cloud reasonably believes:

  • Constitutes, depicts, fosters, promotes or relates in any manner to child pornography, bestiality, or non-consensual sex acts;
  • is excessively violent, incites violence, threatens violence or contains harassing content or hate speech;

*Click* BurnAKoranDay.com gone.

In TechCrunch comments – or just about any other comments system online – there isn't even a contract. You are here as our guests, and if you can't behave yourself – or even if we just feel like it – you're gone. No, we can't call in the Feds to back us up (unless you start making physical threats – which, amazingly, some of you do from time to time)  but fortunately we don't have to.

*Click* Gone.

This power was demonstrated perfectly this very week when Mike decided to block all commenters originating from Reddit users after the site decided to encourage its readers to troll us. Of course the usual chorus of "freedom of speech" began in earnest but as usual those shouting the loudest were those the most ignorant of what they were talking about. The only thing TechCrunch is guilty of in blocking Reddit users is – arguably – an un-appreciation of irony, given that not long ago we berated Digg for caving to the demands of the mob, and then we went ahead and cancelled our 50 days of logos because of… well… quite.

Clearly though, as the founding fathers understood back in 1789, freedom of expression is – generally speaking a good thing. Just because there isn't currently a bill of rights that extends to private citizens using private websites in the online sphere doesn't mean there shouldn’t be. In fact the events of the past few days – the Terry Jones madness, the Reddit debacle, the abuse directed towards female commenters on TechCrunch – have prompted an odd idea to pop into my head. An idea that someone might want to pick up and run with.

What I have in mind is a voluntary Bill Of Rights for private websites and online communities. Maybe half a dozen principles that signatory sites agree to abide by, in return for similarly codified standards of behaviour they expect from their users. Sites who want to opt-in would display a clear link to those rights somewhere on each page, and users would be able to read them and understand the circumstances in which their comments – or similar content – are likely to be deleted, and those in which they will remain. Perhaps the idea could be expanded to include some kind of democratically elected panel – representatives of publishers, hosting companies, freedom of speech advocates – to settle disputes. Or maybe that’s over-complicating things.

Whatever the format, it seems fitting that the first right would concern freedom of speech: explaining (in clearer terms than these) that in most cases users can expect to have their comments left intact, even when they are critical of the site they're commenting on. However, ad hominem attacks will not be tolerated, nor will comments that disparage others based on race, gender, sexuality or nationality.

Another right might concern inter-site trolling. It would seem sensible for signatory sites to agree not to encourage their users to troll other sites. The spectacle of Reddit encouraging its users to troll TechCrunch made neither side look dignified.

I'm sure there are plenty of others, but like all good bills of rights, it should really be crowdsourced. Perhaps you could use the comments below to make suggestions and I'll group them all together in a future post.

Or you could ignore me. Or tell me it's a terrible idea. Or call me an idiot who should go back to Britain and stop telling Americans what to do. That's your privilege. But it isn't your right. Not yet at least.

[Update: For those looking for one, here's a good example of a real first amendment issue.]

Apple May Be Planning A Holiday Release For Next iPad

Posted: 10 Sep 2010 05:31 PM PDT

Some rumors are swirling, quite unsubstantiated, that Apple may be breaking its own yearly release cycle by pushing for a holiday release for the next iPad. Traditionally, of course, Apple has its products on more or less yearly cycles, spreading the fun out over several events or sometimes furtively updating specs in the night. It’s worked well for them, because though it may be grueling for their engineers, it’s a known variable for them and the customers. It’s been a sort of assumption that the iPad would be subject to this same scheduled update, but that never sat well with me, especially after the introduction of the iPhone 4.

So these rumors come as no surprise; if I had “a person with proven knowledge,” I would have cited them with such a rumor months ago, whether they said so or not. It makes sense for a number of reasons.

Continue reading this article…

All You Did Was Weaken A Country Today

Posted: 10 Sep 2010 05:03 PM PDT

Everyone is talking about Craigslist finally folding and taking down its adult services section. Earlier this month they took it down on the U.S. Craigslist sites without public comment, replacing it with a “censored” logo. A couple of days ago even that censored logo was removed. The debate is centered around prostitution. And in particular around sex slavery, sex crimes and underage prostitution. Nasty stuff, which is probably why Craigslist eventually surrendered. It’s hard to debate that kind of emotion with logic, even when the law is on your side.

And on Craigslist’s side the law is. The EFF rightly sees this as nothing but a freedom of speech issue, saying “Through this now years-long struggle, Craigslist’s legal position has been and remains absolutely, unequivocally correct…The federal statutory immunity upon which Craigslist relies is not some clever loophole. Rather…a conscious policy decision by Congress to protect individuals and companies who would otherwise be vulnerable targets to litigants who want to silence speech to which they object, illegal or not.”

But Craigslist folded anyway. And in the words of Jack Nicholson in A Few Good Men, “You fuckin’ people. You have no idea how to defend a nation. All you did was weaken a country today, Kaffee. That’s all you did. You put people’s lives in danger. Sweet dreams, son. “

Blame then? Absolutely not. How long could we really expect them to stand up to the righteous indignation of the masses as well as the political ambitions of no less than 17 state attorneys general. It doesn’t matter that Craigslist had already won one case in Federal court and humiliated the South Carolina AG. This cause plays well to many of their constituents, and it’s an election year after all.

Craigslist’s defense was straightforward and logical – they complied with the law and they went beyond the law in moderating and tracking harmful listings. When it came to prostitution on Craigslist, it was far more likely that it was the victimless mutually consenting adults type prostitution. Now that it’s down and driven underground again, the really awful stuff will blossom. And as Danah Boyd says, having everything so visible on Craigslist made it easier for police to conduct sting operations. So much for that.

Craigslist was always unapologetic in their approach to the situation, making it too easy to take shots at them. It was shooting fish in a barrel for the smooth talking politicians, with big media lapping it up. Sex crimes are boring. But sex crimes that had anything to do with Craigslist were front page stories for weeks on end.

They could have continued to fight, risking even personal criminal charges, but they didn’t. And none of us really stood by them, either. When they folded it we all took a hit. And the world became a less safe place to live.

I’ll always admire Craigslist for taking such an unpopular but important stand in defense of free speech. And when more dominoes fall in the future, censoring all of us, we can look back at this and realize that Jack Nicholson was right. All we did was weaken a country today, and ensure that more women will be victimized by sex crimes.

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Craigslist
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Where Was Android In Microsoft’s iPhone Funeral Procession? Taking The Pictures

Posted: 10 Sep 2010 04:29 PM PDT

Microsoft is a company that doesn’t seem to be too concerned with saying outlandish things that may or may not result in the company having to remove a foot from its own mouth. This happens from the top on down. But this is ballsy even for them.

Today, to celebrate the release of Windows Phone 7 to manufacturing, Microsoft employees had a parade at their headquarters in Redmond, WA. That’s nice, a parade to celebrate a lot of hard work, right? Well, it wasn’t just about that. Also featured in the parade were hearses and coffins for both the iPhone and BlackBerry phones. Yes, Microsoft has anointed itself as the next “iPhone killer” — they didn’t even need to wait for the press to do it.

These next few months are going to be fun to watch.

The faux-funeral today follows the comments by Microsoft COO Kevin Turner in July, "It looks like the iPhone 4 might be their Vista, and I'm okay with that." Yeah, how is that working out so far?

The real highlight of the parade though may have been when everyone broke into a rendition of Michael Jackson’s “Thriller” music video. That dance itself was great (check out the video below), but better may be what certainly sounds like CEO Steve Ballmer in the background going wild — as he’s known to do from time to time.

Also interesting is that Android was nowhere to be seen in this whole ordeal. Well, unless you count Microsoft employee “Carl J,” who captured the whole event and put the pictures on his Flickr page.  His camera? An EVO 4G running Android.

Also, what’s up with this picture? Win Phone sex? The killer app?

[photos: flickr/trioculous]

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iPhone
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Another Way To View Zuckerberg’s Comments About Going Public

Posted: 10 Sep 2010 04:09 PM PDT

Facebook CEO Mark Zuckerberg proclaimed to all that the social giant was not pursuing an IPO on a Facebook Questions page earlier today. TechCrunch web developer Ben Schaechter has an alternate take on Zuckerberg’s response, above, “I really don’t see how it could be any clearer. Really.”

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Mark Zuckerberg: Facebook Will Not Go Public Anytime Soon

Posted: 10 Sep 2010 03:04 PM PDT

Taking a cue from Quora’s very engaged CEO Adam D’Angelo, Facebook founder Mark Zuckerberg recently used Facebook Questions to weigh in on the ETA for a possible Facebook IPO. Zuckerberg’s thoughtful take? That upcoming product developments might put a kibosh on a public offering this or next year, despite what some incoming employees may hope, “I tend to think that being private is better for us right now because of some of the big risks we want to take in developing new products.” Full text:

“We aren’t planning to go public anytime soon. As a company, I think we look at going public differently than many other companies do. For a lot of companies, going public is the end goal and they shoot for and optimize around it. For us, going public isn’t a goal in itself; it’s just something we’ll do when it makes sense for us. Since we compensate people at Facebook with stock and we took investment, I view it as my responsibility to eventually make that stock liquid for people, but that doesn’t have to happen in the short term and our primary responsibility is still just to make sure Facebook develops to its full potential.

I tend to think that being private is better for us right now because of some of the big risks we want to take in developing new products. For example, products like News Feed, Platform, Connect and so on were all fairly controversial early on but have proven to be valuable services. The experience of managing the company through launching controversial services is tricky, but I can only imagine it would be even more difficult if we had a public stock price bouncing around. There are a lot more new things left to build like the examples I mentioned above, and I’d rather focus on building them than on going public right now.”

Our very own Mike Arrington responded to Zuckerberg, on the same Facebook Questions page, “I remember when Steve Jobs said Apple would never build a phone.”

Apple isn’t the only valley behemoth who doth protest too much, Google co-founder Sergey Brin also echoed Zuckerberg’s “hell no we won’t IPO” sentiments soon before Google, yes, went public.

If what Zuckerberg’s saying is that an IPO would put too much pressure on Facebook with regards to product releases, the case of Google is also apropo, as the search company’s stock seems to have weathered the releases of controversial products like Buzz and Streetview.

Update: Commenter Dav Yaginuma points out the pretty hilarious unintentional lineup of  ”going public, going public, going public” in Zuckerberg’s paragraph layout.

Thanks: Jonny Anderson

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Ask a VC: Fred Wilson Gives Blunt Answers to Your Questions (TCTV)

Posted: 10 Sep 2010 03:01 PM PDT

I think this show is going to be a winner. That’s not as arrogant of a statement as it sounds, because the content has little to do with me. Your questions elicited great answers from one of the most powerful consumer Web investors on the planet, Fred Wilson of Union Square Ventures. What’s not to like?

It’s a long video, so here are some of the topics we cover: Whether venture capital still a home run business; why Wilson says “I won’t do (a convertible debt deal) I never have and I hope I never will;” his view on whether crowd sourcing funding will disrupt the industry; whether Twitter appreciates its developers enough; advice for entrepreneurs in other countries looking for US funding and how much salary a founder should ask for. Hands-down my favorite moment is around the five minute mark when I ask what his wish for the venture industry is by the end of the year.

Next week, we have Satish Dharmaraj of Redpoint Ventures in the hot seat so send in your questions now to askaVC(at)techcrunch(dot)com.


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Android 2.2 Finally Starts To See Wide Adoption, Now On 28.7% Of Handsets

Posted: 10 Sep 2010 03:01 PM PDT

Slowly but surely, Android users are getting their first taste of Froyo, the latest version of Google’s mobile OS, which was announced in May and began broadly rolling out to select handsets (namely, Google’s Nexus One) in June. The OS includes a number of key new features like Flash and big speed gains, but has only been available on a tiny fraction of Android devices for months. Now Google has just updated its Platform Versions chart which shows there has recently been a surge in the number of devices running Android 2.2: it’s now running on 28.7% of handsets.

That may not sound like much, but it’s a huge gain over the 4.5% Google’s dashboard was showing just a few days ago. The reason for the surge? Some of Android’s most popular phones, including the Verizon Droid, have been upgraded to 2.2 in the last month.

Still, there’s a long way to go. Over 70% of handsets are now running Android 2.1 or higher, which is a major improvement over five months ago when that figure was only 27.3%. But carriers and handset manufacturers are taking their sweet time in rolling out upgrades, which leads to frustrated users (and developers who can’t leverage the latest-and-greatest features because many handsets can’t use them yet).

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Google Instant Inspires Lyric Search Music Videos

Posted: 10 Sep 2010 02:51 PM PDT

After the tens of thousands of blog posts about the ultimate usefulness of Google Instant, the inevitable crows of people who hate change, and the valid complaints people with slightly NSFW names who can no longer find themselves on live updating search, we can all agree that the above videos of Tom Lehrer’s “Elements” song and Billy Joel’s “We Didn’t Start The Fire” via Urlesque are pretty much the perfect end to an Instant-filled week.

The original Apple-inspired Instant video, below. Can’t wait until someone makes one for Mary Poppins’ Supercalifragilisticexpialidocious.

Business Heats Up For Recipe Site And Search Engine Cookstr

Posted: 10 Sep 2010 01:48 PM PDT

Business is heating up for Cookstr, a New York City startup that publishes recipes from top cookbook authors, and provides foodie-oriented search functionality to other branded websites. The company announced a deal with the AARP today, an advocacy group for retired people that will use Cookstr’s content and search engine to help AARP.org visitors find recipes that fit their preferences, health and dietary concerns.

AARP is the largest membership organization in the U.S. The chief executive and founder of Cookstr, Will Schwalbe, said cooking is a top hobby and interest for this 50-years-and-older demographic. The company’s search technology and website, Cookstr.com was originally developed with Pivotal Labs. Schwalbe thinks of it as a "Pandora of recipes," for chefs at any level.

Cookstr is a Tipping Point Partners incubator company, backed by angel investors including: Dorothy Cann Hamilton the founder and CEO of the International Culinary Center which includes the French Culinary Institute (FCI) and the Italian Culinary Academy (ICA); Tailwind Capital managing partner and JetBlue board member Frank V. Sica; and top executives at eMarketer.com, Terry Chabrowe and Crystal Gurin.

On target to become profitable this year, according to Schwalbe, Cookstr.com generated over 20 million page views in the last twelve months. Among 400 culinary authors featured by Cookstr are celebrity chefs and culinary educators: Jamie Oliver, Mario Batali and Nigella Lawson.

The company's first major client was Bravo TV online, whose "Recipe Finder" is still powered by Cookstr.

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Super Angel/VC SMACKDOWN: What’s so Great about Convertible Debt? (TCTV)

Posted: 10 Sep 2010 12:16 PM PDT

We’ve come to the last installment of the Super Angel v. VC SMACKDOWN and we’ve saved the wonkiest, nerdiest topic for last: Should entrepreneurs swap investor cash for convertible debt or equity?

Somehow, this is the topic that generates the most passion. If you don’t understand the basics, August Capital’s David Hornik– a former lawyer– breaks them down: “It’s about price and control.” Angels are saying that convertible debt deals are more entrepreneur friendly, but Hornik says there’s an easier way to make sure you don’t get screwed: “Don’t take money from people you don’t trust and like.” And then, Super Angel Dave McClure invokes Allah….yeah it doesn’t make a lot of sense in the video either.

The best moment of the entire series had to be in the 8 minute range when Hornik tells McClure to “shut up so he can agree with him.” Feel the love, people.

Beyond the nitty-gritty issues discussed this week, it’s fascinating to step back and look at what’s going on here from a cultural point of view. Venture capital has long been a private clubby world where people have grudges, but they’re kept “within the family” because everyone needs each other to do business. In a world where one homerun can make or break your career and your firm, no one wants to call anyone out.

That has utterly changed over the course of the summer, and it’s not because everyone just cares so much about convertible debt or any other issue the Davids argued about this week. It’s because this industry has under-performed for ten years and is on the verge of something seismic– whether it’s a shake-out or a reinvention or both. As a journalist who has covered this space for more than ten years, it’s going to be a fascinating year to watch and for great entrepreneurs, it’s a great time to make hay while these two groups continue to spar.

Reminder, there’s a live show of the debate at Orrick tonight, but I think it sold out on Tuesday. Our earlier segments were on “Why the Hate?” “Are Super Angels Just a Fad?” “Are Angels Just about the Flip?” and “Is Silicon Valley Getting Disrupted as the Center of Early Stage Funding?”

[NOTE: Was sick of sweaty wrestlers so I opted for a cuter smackdown photo today.]

Apple Says iPhone 4 Antenna Issue “Even Smaller Than We Originally Thought”

Posted: 10 Sep 2010 12:02 PM PDT

Remember Antennagate? You probably do, but no one seems to talk about it anymore. Since Apple held a press conference to address the iPhone 4′s attenuation issues in July, undoubtedly millions more units have been sold. More units, more problems, right? Maybe not.

“We now know that the iPhone 4 antenna attenuation issue is even smaller than we originally thought,” Apple says in a statement on their site today announcing a formal end to the iPhone 4 Case Program. That program, which gave a free case to any iPhone 4 owner that requested one (or gave a refund to those who bought one), will formally end on September 30. Though Apple does note that any user who is still experiencing a problem can call AppleCare to request a free bumper (and one would have to assume they’ll get one).

So if you do feel like you want a free case for the iPhone, get your order in fast. The directions for that are still on the site. They do note that if you bought your iPhone 4 before July 23, you would have had to apply by August 22 for the case — otherwise you have to apply within 30 days of the purchase. But again, for this formal program, the free bumpers will stopped being handled through Apple’s website (and iPhone app) for people who buy iPhone 4s after September 30.

Apple also notes that for units sold after September 30, they’ll be returning to their normal returns policy.

Apple is not sharing any specific statistics on the antenna issue, but during the July conference, CEO Steve Jobs noted that only a half of one percent of iPhone 4 owners had called Apple Care to complain about the issue. He also said that the return rate for the iPhone 4 was much lower than the iPhone 3GS at 1.7 percent. But he did note that the dropped call rate for the new device was slightly higher — by less than one more call per one hundred calls. At the time, he indicated that the iPhone 4 case may correct that.

If Apple is now saying the problem is “even smaller than we originally thought,” one has to assume that some or all of those numbers have actually decreased. But specifically, Apple is only saying is that, “a small percentage of iPhone 4 users need a case.”

My experience remains the same. As I’ve noted, the issue is real, but it’s not really an issue. I’ve now been carrying around the iPhone 4 for about three months, AT&T is still awful in San Francisco, but the iPhone 4 actually seems to work a bit better than the iPhone 3GS did. The antenna issue hasn’t hampered my daily use of the phone at all — and I don’t use a case.

Some will claim that’s the fanboy in me talking — but if a device is broken, I’m not going to use it. That’s just reality. And the reality is that it’s not broken. Like so many things, this issue was overblown.

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Make A Real Donation To Fight Cancer With Facebook Credits

Posted: 10 Sep 2010 10:25 AM PDT

For the first time, Facebook Credits will be used towards a large-scale philanthropic movement at tonight’s Stand Up To Cancer event. The star-studded live fundraiser and telethon will be broadcast across a number of major television channels as a way to raise money towards cancer research.

While generally these events usually focus on getting people to call in to donate money towards a cause, now viewers will be able to make donations via Facebook’s virtual currency Facebook Credits, with 100 percent of the donation going towards the cause. Members can donate with Facebook Credits on Stand Up To Cancer’s Facebook page. In the past, the Stand Up To Cancer telethon has raised over $100 million.

Facebook has been aggressively marketing Credits over the past few months. Considering the massive exposure of the event, it seems like a win for Facebook Credits and a good way for Facebook to broaden the use of the virtual currency beyond just within games (and a easy way to raise money for a worthy cause). And it’s dead simple way for users to raise money for charity.

Target now sells gift cards for Credits, and recently struck a deal with Malaysian payments company MOL Global (the company that bought Friendster) to sell gift cards for credits at retail stores in Malaysia and Singapore.

Facebook has scored a number of deals with gaming companies to allow its members to use Facebook Credits to buy virtual goods through Facebook credits, including partnerships with Zynga, Crowdstar, LOLapps, and RockYou.

Credits expected to make up one-third of Facebook’s revenue in the next year.

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Reserve Your Name At About.Me

Posted: 10 Sep 2010 10:06 AM PDT

Early this year we wrote about Pumkpinhead, the working name for new startup About.me being created by repeat entrepreneurs/investors Tony Conrad and Tim Young. We didn’t know much about the startup except that it had top angel investors involved: True Ventures, Ron Conway, AOL Ventures, Scott Kurnit, Founders Collective, Radar Partners (Doug Mackenzie & Kevin Compton) and David Mahoney. Freestyle Capital has also invested since then.

The company is still in stealth, but they’ve given out a few beta accounts to friends and advisors, they say. Part of the product is a personal profile page that points people to your content around the Internet, allowing you to pull all this information together to build a single online identity. So these beta users are creating very noticeable splash pages. Examples: Founder Tony Conrad, AOL CEO Tim Armstrong, Typekit founder Jeffrey Veen and author Ellen Hopkins. You can see my About.me page here.

There’s a lot more to the product on the back end to help users understand how many people see your profile, where they’re coming from and what they do on your page.

You can’t sign up for it just yet, but you can reserve your username. Over the last couple of years we’ve all learned the importance of securing your name on services like Twitter and Facebook. If this seems like a product you’ll use, you will want to grab your name now. I’m pretty stoked I got /Mike myself.

Just go to About.me and type in your email and the username you want. If it confirms the name is yours. If not it’s already taken or reserved. Just about everything is wide open right now.

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Exclusive: IAC Finally Kills Off Bloglines

Posted: 10 Sep 2010 09:48 AM PDT

It’s finally happened. Bloglines,the troubled RSS feed reader owned by IAC, will officially be shut down, the company has told TechCrunch exclusively. The site has had a tumultuous history, so it’s unsurprising that IAC has finally put the platform out of its misery. Bloglines, which is actually operated by IAC Q&A property Ask.com, will be informing users of the news today and will officially be shut down on October 1.

Bought by IAC’s Ask.com in February 2005 for around $10 million, the site has been in jeopardy ever since the launch of Google Reader long ago, compounded by the shift from RSS to realtime news streams. Over the past few years, the site hasn’t launched any new or innovative features to boost usage. While we’ve heard in the past that IAC was considering shutting down the site, the company held off on killing the site permanently and was looking for ways to refurbish Bloglines.

Doug Leeds, President of Ask.com tells us that the reasoning behind closing Bloglines came down to the fact that the market for people who use Bloglines (and RSS readers, he adds) isn’t growing, and is actually shrinking as people shift to realtime news streams such as Twitter to consume content on the web. In IAC’s market research, according to Leeds, there has been a 20 percent decline in people who are consuming RSS feeds as a whole. He says that Ask.com will continue to focus on drive traffic to and enhance its question and answer site.

Bloglines isn’t the first RSS reader to throw in the towel; Newsgator shut down its online newsreader last year. Now, Google Reader is all we have left; though even that product is slowly being replaced. We’ve put Bloglines in the TechCrunch Deadpool.

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