Insider Chatter by Donna Bogatin

YAY! “Make ad changes without replacing code” is the latest greatest AdSense invention. “Fancy,” Google pats itself on the back, heralding “simplify the process of optimizing ad units.”

Nevertheless, while AdSense blog publishing partners hail Google for “Wow, reading my mind,” AdSense advertisers are lamenting that the click fraud rates for the Google content network AND the Yahoo Publisher Network have grown to 28%, according to Tom Cuthbert, CEO, ClickForensics.

I spoke with Cuthbert about the current state of click fraud in the pay-per-click (PPC) search advertising market: “Click fraud activity continues to grow,” Cuthbert told me, underscoring “advertisers and agencies continue to be deeply concerned about the issue of click fraud.”

ClickForensics describes itself as “the leading provider of click fraud management solutions for identifying and eliminating click fraud.” The company also runs the Click Fraud Network (CFN), founded 18 months ago and now claiming 4000 plus online advertiser and agency members. The CFN collects and tracks data on PPC ad campaigns, correlating information from both the search providers and the advertisers’ own Web sites, for “the industry’s most accurate view of click fraud to date.”

The latest Click Fraud Index (CFI) data reported by the CFN shows click fraud has grown, with dramatic increases in the content networks, particularly on “parked domains” and “made for ads” sites.

Cuthbert told me: “Content networks are becoming the fastest growing source of click fraud.”

Specifically, the average click fraud rate of PPC advertisements appearing on search engine content networks, including Google AdSense and Yahoo Publisher Network, was 28.1% in Q3, 2007, up from 25.6% for Q2 2007, 21.9% for Q1 2007 and 19.2 percent for Q4 of 2006, as calculated by the CFI.

What’s more, the CFN reports over 60% of traffic from parked domains and made for ad sites was click fraud.

How can ClickForensics be so sure? Cuthbert described to me how a “heuristics engine” scores each click recorded and tracked based on multiple attributes, such as visitor behavioral data, technical data, economic data, country of origin, whether or not the traffic is from bots, botnets or click frams, or other types of unwanted traffic.

Cuthbert told me well over 60% of clicks in made-for-ad sites and parked domains are “fraud or clicks that the advertiser shouldn’t have paid for.”

I pointed out to Cuthbert that Yahoo is claiming a dramatic decrease in advertiser complaints; SEE my interview with Reggie Davis, Yahoo Vice President, Marketplace Quality, Reggie Davis: Yahoo Click Fraud Claims Plummet, INTERVIEW.

Cutherbert told me that while a Yahoo VP overseeing advertiser quality initiiatives demonstrates the number two search engine is taking the click fraud problem seriously, he believes an onerous advertiser claims submission system results in an under estimation of actual damages.

What about number one search engine Google? “Trust us,” Cutherbert indicated to be the reigning unsatisfactory advertiser facing modus operandi of the Googleplex.

Advertisers ought not uniquely trust Google or Yahoo to fully solve the click fraud problem, is the core message of ClickForensics. After all, the search engines even have “a financial incentive to allow it to occur,” Cuthbert told me.

(Google CEO Eric Schmidt did once famously say about click fraud, ‘let it happen’ is perfect economic solution; Google’s public facing comments have radically changed since.)

In the words of Cuthbert’s ClickForensics: “Does your bank balance your checkbook? (We didn’t think so)…”

ALSO: NBC Still Booming on YouTube: Google Lawsuit Next? and How Google Library Hamstrings Librarians: Book Search (not so) Fine Print

PLUS: Google Nielsen TV Ads STILL Blurry: NOT AdWords for Television

CONTACT DONNA BOGATIN

Poor LinkedIn? Not only doesn’t the blogosphere “get” the leading online professional network “use case,” The Boston Globe is also mixing up Web 2.0 social and business metaphors!

To describe a new online version of an offline organization that declares itself to be “dedicated to fostering relationships among young venture capitalists in New england by building a strong industry community through networking events,” Carolyn Johnson calls the impending online “network” a social one and juxtaposes it to Facebook and MySpace, NOT LinkedIn!

The New England Venture Network (NEVN) heralds itself in fact to be an “educational platform and communications vehicle for different topics in the VC comunity” and is particulalry proud of providing ”outstanding opportunities for leading private equity service providers to connect with their clients.”

As LinkedIn CEO Dan Nye suggested re LinkedIn, it is safe to wager then that there will be no hamburger slinging at the NEVN online offshot, like there is at Facebook!

Should LinkedIn be worried? After all, the new niche professional network will aim to provide LinkedIn style functionality, such as an “Answers” feature and a jobs offering.

The online professional networking vertical is itself getting the vertical treatment! What’s more, some online networks are even promising to monetize our rolodexes for us.

I spoke with the founder and CEO of the latest niche professional network to launch online: Salesconx.

Evan Sohn is a veteran sales and marketing exec; He told me he created Salesconx to bring word of mouth referrals to the Web by enabling sales execs to efficiently and professionaly monetize their rolodexes.

Billed as a “Web portal for brokering relationships between sales associates and buyers,” Salesconx promises to help the dedicated sales person “monetize existing business contacts and establish brand new relationships with all types of potential customers.”

Why now? Sohn: “Sales pros have been sharing contacts forever. Voice and spam filters, and reduced face-to-face networking make it more difficult for salespoeple to find appropriate contacts of late.”

How it works: Members pay a $100 fee for each introduction (a personal email referral), or $25 for a contact name without introduction. Salesconx takes 20% of each transaction.

Sohn proudly underscored to me that Salesconx is one of the rare Web 2.0 startups that can boast revenues of any amount right out of the gate. Launched last month, Salesconx has 619 members and has facilitated 171 deals (the buying and selling of connections).

So, do YOU know how much YOUR rolodex could be worth? Ready to cash in???

ALSO~Facebook, the Web’s State Fair vs. LinkedIn, the Chamber of Commerce and CED Tech 2007: 30 Cool Startups, But NO Facebook Apps

PLUS EXCLUSIVE INTERVIEW: Reid Hoffman On How LinkedIn Beats Facebook for Business

AND: Startups: Who Needs Business Plans? Draper Fisher Jurvetson, Mayfield, Sequoia…

CONTACT DONNA BOGATIN

Fred Wilson to Jason Calacanis: Web 3.0 is nonsense, and so is Web 2.0!

Nevertheless, Mint CEO Aaron Patzer IS thrilled that his online personal finance brainchild, Mint.com, took first place honors at the first ever foray into DEMO conferencing land by Web 2.0 champion TechCrunch. However, please DO NOT consider Mint merely a Web 2.0 play, Patzer underscored to me in New York City, the financial capital of the world!

Mint may have played up its refreshing, Ajaxy goodness in Silicon Valley demo territory, but in the Silicon Alley and Walll Street demo world, it was all about the money, serious money, at the serious FINOVATE on Tuesday.

I chatted with Patzer at the conference about his business model, life after TechCrunch40 fame and the chiding from competitor Wesabe’s Union Square Ventures backers that Mint ought to step up to the online finance plate for a bigger and better financial data “Bill of Rights.”

Why did Mint demo at Finnovate on the heels of TechCrunch40? Patzer told me he does not want Mint to be perceived as merely a consumer friendly cool Web 2.0 money app; He proudly notes Mint’s high-end, patent-pending Web-based financial application. By going head-to-head against the likes of Intuit’s Digital Insight, also demoing at Finovate, Mint helps establish itself as a big league finacial services player, Patzer indicated.

What does Mint aim to do with the $50,000 it pocketed from the coffers of Michael Arrington and Jason Calacanis? “Something yielding maximum PR value,” Patzer teased.

Did Mint recover from the server overload consequences of the TechCrunch phenomenon? Mint’s servers never actually went down, Patzer assured. While the sudden influx of registrants–three to five people per second–caused a backlog in pulling user data from third-party financial institutions, causing Mint user accounts to “time out,” the integrity of all user account information remained intact, Patzer indicated. To prevent a reoccurence, Mint has since procured greater server capacity and further optimized the database query process.

What is the Mint revenue model? Lead referral fees, in the $20 to $50 range, from financial services providers such as ING and HSBC. Patzer is most proud that indivdual Mint users are only presented offers if they really represent cost savings opportunities for the particular person. For example, if Patzer has already optimized his own financial transactions, he would not be presented a third-party promotion.

Why did Wasabe investor Fred Wilson, Union Square Ventures partner, greet the Mint TechCrunch40 win by headling at his A VC blog “Who (really) owns your financial data”? Competitive sour grapes, perhaps? Patzer told me Union Square Ventures expressed interest in investing in Mint, but Patzer decided to go with other funding opportunities. Following the decline by Mint, Union Square Ventures invested in Wesabe, Patzer said.

Is Mint lacking from a financial “data bill of rights” perspective as was implied by the A VC post about Wesabe? “I don’t know what he was talking about,” Patzer mused. After all, Mint does have a publicly available four prong “How Mint Keeps You Safe” data policy.

What about Mint vs. Wesabe? NO CONTEST! Patzer conveyed.

“Put your finances on auto pilot” is the Mint slogan, and a reality for the Patzer vision. “Automatic and effortless” is how Patzer described the Mint registration process to me: “It takes two minutes to setup an account and automatic synchronization is done on a daily basis.”

Wesabe, on the other hand, requires multiple, manual, time consuming steps that must be repeated at each visit to the platform, Patzer indicated.

Who needs Wesabe then? “Unusable” was how another CEO presenter characterized such an individually labor intensive online financial services platform.

Who needs Mint? Patzer told me the site has been retaining new registrants over the last few weeks at a rate of about 75%.

PS: Is Web 2.0-3.0 really nonsense as Fred Wilson laments, today. His prognosis may actually be short lived. After all, last month he didn’t like the term “social graph.” Now, he does.

ALSO: Y Combinator to Hackers: Dream SMALL and Code for Google on the Cheap and Social Fireworks Alert: LinkedIn vs. ‘Loud Mouth McClure’?

CONTACT DONNA BOGATIN

Hey guys, if you are looking for a little intellectual stimulation this Labor day weekend after all the parades, barbecues, end of summer beach parties, TURN to the Scobleizer AND Insider Chatter for a big, bad jolt back into blogosphere goodness, courtesy of unique tech and CEO insights.

Robert Scoble has been lamenting that his controversial video confessions get all the link love/hate at the expense of his video profiles of top techies at IBM, Plaxo, VMWare…:

Adario Strange, of Wired Online, jumps in with a late whipping of my Sunday videos. It’s interesting that Wired chose to link to this and jump on the “Scoble is an idiot” pile.

It’s sad, because in the past year I’ve put up more than three hundred videos, most of which are far more deserving of your attention than the ones I put up on Sunday.

For our Labor Day weekend video viewing pleasure he talks with Mehran Sahami, who “runs Stanford University’s undergraduate computer science department,” underscoring:

You might think I’m stupid. Dumb. Lame. Irrelevant. Arrogant. Or worse.

But this guy is none of those things. In fact, he’s the opposite of all those things.

I know where Scoble is coming from; I also post many exclusive insider chats with cutting-edge CEOs that merit more exposure as well.

Got time this weekend? My personal picks are:

Lending Club $108 billion Market Opp ex Facebook: Goodbye Banks!

Office 2.0 Enterprise Showdown: Zoho vs. Google Apps vs. Microsoft

How Pegasus News Fuels Local Media Business Model for Fisher Communications

Craigslist Q & A: Classifieds Community NO ‘Walled Garden’ 

Qmecom Mass Personalized Video Ad Platform: Yahoo SmartAds, Digitas Beware

ENJOY! See you after the holiday, with more good (insider) stuff!

ALSO: Mark Zuckerberg is NO Facebook Visionary: Aaron Greenspan on Veritas, and Free PR

CONTACT DONNA BOGATIN

Microsoft is acquring Parlano, aimed at “strengthening its unified communications portfolio with leading enterprise group chat provider” for a new feature of Microsoft Office Communications Server and Microsoft Office Communicator.

Meanwhile, at LinuxWorld three weeks ago, Projty unleashed its OpenProj free, open source Microsoft Office Project “complete replacement.”

Who needs Microsoft Office Word, Excel, (soon) PowerPoint? Google Apps wants to know! BUT where is Google on the Projects front? Projity to the rescue, BIG TIME.

How is OpenProj being received? I spoke with Marc O’Brien, Projity co-founder and CEO, to find out.

O’Brien told me 28 million Microsoft customers are “impacted” by the insertion of OpenProj into the open source ecosystem:

Since over 28 million users have Microsoft Project installed on their computers, OpenProj offers another opportunity for project manageers and anyone trying to manage any type of project. Instead of a $1000 license fee for Microsoft project, Projity custoemrs can download OpenProj for free and use it anytime they want from their machine.

O’Brien projects Projity will capture 7-11 million users for OpenProj all told:

Microsoft has noted that 7% of all Office desktops run Project. Project is part of the Office suite.  There are over 100 million users of OpenOffice alone (a stat from Johanthan Schwartz,  Sun CEO). In just the OpenOffice community that gives a 7 million user count. However, we see an  enormous opportunity in the general market so are anticipating  between  7-11 million users.

Is it doable? Since launching at LinuxWorld, OpenProj has been downloaded more than 50,000 times, O’Brien told me; He expects to hit the 100,000 mark in September.

OpenProj downloads are good, very good, but Projity ’s business model is dependent upon an “upsell from the free, open source dessktop solution” to its for-fee, Web-based, Project-ON-Demand SaaS product.

The “small monthly fee” for Project-ON-Demand ranges from $7.99 to $19.99. The pitch:

Extend “the project” with our unique architecture: External partners and customers can now work together on projects by simply logging into their browsers. Project-ON-Demand can also be integrated with Salesforce.com. When integrated with Salesforce.com, project teams can complete their tasks either within Project-ON-Demand or Salesforce.com. In both instances there is a simple interface for updating tasks. Projity’s Gantt Chart is revolutionary for a browser: users graphically extend durations, establish links between tasks and even link tasks between different projects. Project-ON-Demand also contains Network Diagrams (PERT Charts), WBS & RBS Charts, Earned Value costing, Multi-Project Portfolio management, and Advanced Multi-Project Reporting. If you have existing Project files you can open them in Project-ON-Demand and continue working.

OpenProj is available on Linux, Unix, Mac or Windows. O’Brien happily told me OpenProj is “taking a direct hit on Microsoft Office Project” because “the majority of all downloads have been on Windows machines.”

O’Brien will be evangelizing more “direct hits” at Microsoft next week at the Office 2.0 Conference.

I predicted yesterday: Office 2.0 Enterprise Showdown: Zoho vs. Google Apps vs. Microsoft

Add OpenProj and Project-ON-Demand to the disruptive SaaS mix, big time.

ALSO: Lending Club $108 billion Market Opp ex Facebook: Goodbye Banks! EXCLUSIVE INTERVIEW

PLUS: CNN Declares Google Dependence, BUT Reuters Independence

CONTACT DONNA BOGATIN

Mike Orren began the New Year at his Pegasus News blog by proudly declaring “we aren’t hyperlocal” and laying claim to a “panlocal” moniker instead. 

Orren even posted a New Year’s resolution for Pegasus, the online “local news and information service” he founded and leads: “In theory, panlocal should be a big business. We’ll be doing our damnedest to prove that in practice in the New Year.”

Orren did prove panlocal’s “big business” potential this year, to Fisher Communications; One week ago, the Seattle-based, NASDAQ traded, tradtional media company–owner/operator of 19 television stations and eight radio stations in the Pacific Northwest–announced it acquired Pegasus to “expand its online local news strategy.”

Why is Fisher embarking on a new online media trajectory? Why did Fisher choose Dallas-based Pegasus to help fuel its new local news focus?

I spoke today with Rob Dunlop, SVP Emerging Media, Fisher Communications, to find out.

Dunlop leads the Fisher Interactive Network, of which Pegasus News is currently the key component.

Collen Brown, Fisher CEO, announced the company’s online AND local intentions to shareholders earlier in the year:

Launching new Internet businesses, repositioning and realigning our company for success and growth in the new media world. As consumers and advertisers shift their behavior in this digitally driven enviornment, it is expected that we become more innovative, responsive and competively daring, to better serve our customers’ needs and drive our future as a local media company.

Dunlop told me that the panlocal focus of Pegasus supports Fisher’s goal of reaching the local consumer that typically wants a view of “the marketplace as a whole” and not simply information on “my neighborhood only.”

The hyperlocal, user-focused approach employed by Backfence is too narrow to drive sustainable community involvement and of limited appeal to local advertisers, Dunlop indicated.

The broader interest of the Pegasus local media model is multi-faceted, Dunlop told me:

1) User Generated Content friendly, but not just User Generated Content,

2) Aggregation of news from Professional Content Partners,

3) Original editorial contributions, wth a point of view,

4) “The Daily You” customization of content presentation for readers…

What is the Pegasus News “secret sauce” then? The pooling and personalized filtering of a myriad of local, national and world information data sources that speak to the affinities of individual users within a broader, more universal context, Dunlop indicated.

Does Fisher have a “secret sauce” to monetize the Pegasus local news strategy? I asked Dunlop just that. After all, in announcing the sale of his company to Fisher, Orren acknowledged Pegasus “ran out of cash” months ago.

Dunlop told me Fisher envisages a three-prong business model for the monetization of Pegasus:

1) Targeted, local merchant advertising leveraging the local media sales know-how and clientele of Fisher’s TV and radio stations,

2) Traditional database marketing leveraging Pegasus’ relationships with its registered users,

3) Licensing of the new Fisher-Pegasus panlocal Internet media model to offer prosepctive partners “speed to market” entry into the online local news business.

Orren welcomed Fisher by saying Pegasus looks forward to “reaching more cities, towns and neighborhoods over the coming year.”

Will Fisher’s home base of Seattle be the first Pegasus roll-out city? Not necesarily, Dunlop told me. For now, Dunlop plans on being a “commuter” to Pegasus’ home base, Dallas. What’s more, Fisher CEO Brown is a former Dallas resident.

Do all the Fisher Communications connections with Dallas mean a new Texas television or radio property is in the works for the heretofore Pacific Nortrhwest focused Fisher? I asked Dunlop if the Fisher geographical diversification via online local media would lead to future geographical expansion in its traditional media operations.

While not getting state specific, Dunlop concurred that geographic expansion via radio and/or tv properties would not be inconsistent with the Fisher 2006 Strategic Plan targeting a diversification of its “geographic and network portfolio.”

Dunlop did confirm to me that but one week out of the acquisition gate, Fisher is already fielding expressions of interest in the Pegasus local media model from prospective partners; In other words, the licensing component of the Fisher-Pegasus business model appears to be bearing prospective fruits.

ALSO: Backfence.com and Google: Money Can’t Buy Local Love and Local Matters: Backfence Farewell NO Real Back Story

CONTACT DONNA BOGATIN