Insider Chatter by Donna Bogatin

Why is ’screwed’ Henry Blodget’s favorite headline at his Kevin Ryan co-production, “Silicon Alley Insider” (SAI)? Perhaps it is because he made his (bad) mark by screwing investors, just ask the SEC!

Recent not-so-elegant Blodget prognostications:

“Newspapers Are Screwed”
“Cable Screwed”
“Hulu Is Screwed”

NEWS FLASH: Henry, unwittingly, just screwed himself, and coconspirator Ryan: “US Economy Screwed,” the SAI weekend dispatch declares, piggybacking (in typical NOT SO INSIDER Blodget fashion) off of original reporting done by the New York Times.

The Blodget SAI value add? ”Digital business executives” will be facing a screwing themselves. So much for the big plans of the digital advertising supported Blodget-Ryan SAI, then!:

We expect advertising spending to start slowing (or even dropping) within a couple of months. We think all the major Internet and media companies will get hit. We expect the downturn will dampen VC and angel financings, which, in turn, will dampen entrepreneurial activity. So we continue to suggest that digital business executives brace for harder times.

Blodget is apparently aware that his signature headline grabbing (phony) stock boosting from his first Internet go around will not sell during his latest attempt to rehabilitate himself, so he is trying another extreme: How about giddy short selling “analysis,” ad nauseum.

Insider Chatter is NOT fooled. SEE: Henry Blodget Slams eBay’s Whitman: Yahoo’s Yang Next? and Blodget & Ryan: Cool, or Suck? WHAT Silicon Alley ‘Insider’! and Henry Blodget Has Internet Boom Lessons For NBC

The New York Times is on the Blodget hypocrisy case as well. Harry Hurt “trashed” “That Henry Blodget”’s book, “Most, if not all, of the promotional value is based on his career in white-collar deception”:

He is legally prohibited from offering investment advice to specific individuals, and yet he markets advice to mass audiences about the very industry that barred him for life.

During his three years at Merrill, he earned upwards of $18 million in salary. The fine he paid was $4 million. That leaves him a whopping $14 million ahead of the game, not counting taxes and the legal fees attendant to his settlement agreement.  As luck and some high-priced lawyers would have it, Mr. Blodget wound up negotiating a settlement in which he neither admitted nor denied any wrongdoing.

The current Blodget “white collar deception” spurs an Internet downturn:

After blowing the last downturn, we’ve been on the right side of this one since last summer.

Really, Blodget and Ryan? Odd then, that you bankrolled the launch of SAI, an online, advertising supported digital media business, last summer!

Up or down, Blodget continues to be bad for Internet investors. 

ALSO: Business Plans Help the Web 2.0 Kool-Aid Go Down

CONTACT DONNA BOGATIN

News Years Resolution? Grow your startup into a billion dollar business, NO business model required! NO problem, in Jason Calacanis’ entrepreneurial rule book, as long as you are as capital connected as him!

Calacanis has a $20 million capital kitty in the VC bank for his latest venture, Mahalo, undoubetdly much more than Twitter is working with from Union Square Ventures. So, when will Calacanis see his first Mahalo billion? After all, Calacanis guarantees billions for Twitter within 12-24 months.

At Mahalo, though, Calacanis is counting on his VC money to give him a five year ride, and he is getting his money’s worth: Claim to the title of “the world’s first human-powered search engine” costs a pretty penny. The expense side of the startup equation is ignored, however, in Calacanis’ feel-good, throw out your business model on the way to the startup lottery window world.

Mahalo nevertheless pays dearly in human capital costs costs for its no-algorithms-here branding. Twitter’s free-to-Twitterers largesse is also costing its investors dearly, as Twitter has acknowledged:

We’ve negotiated for good bulk rates but we still pay for this SMS traffic just like we pay for storage, hosting..

Twitter appears nevertheless to be firmly in accord with Calacanis’ exhortation to “get to tens of millions of users and forget about money”:

The idea has been floated that Twitter somehow earns money from your texting while in fact the opposite is true.

WHEW! What a relief? If Calacanis’ wild and crazy musings about Twitter’s growth trajectory were actually to come to pass, what an expensive Tweet Twitter and company would be in!

Calacanis’s throwing startup caution to the wind advice is eerily similar to Web 1.0 style eyeball snatching, VC busting, grow traffic, not profitable sales, “business models.”

Startups beware: Calcanis’ billions can be had for the “critical mass” taking entrepreneurial “strategy” is the venture equivalent of playing the lottery. As millions know, though, there is NO “smart” lottery money.

MORE: Edgeio Web 2.0 Bomb: Michael TechCrunch Arrington Cheers $5 million Startup Loss and Web 2.0 Startups: Will Geek Chumby ‘Fade Away’ in 2008? and Loic Le Meur Seesmic Formula? NO (Big) Idea, NO (Marketing) Plan, NO (Revenue) Model 

PLUS: Startups: Who Needs Business Plans? Draper Fisher Jurvetson, Mayfield, Sequoia… and Want Sequoia Funding? Submit a Business Plan: Here’s How AND Kleiner Perkins Venture Capital: Business Plans Please

WANT TO SUBMIT YOUR BUSINESS PLAN?: Draper Fisher Jurvetson ~ Mayfield Fund  ~ Sequoia Capital ~ Kleiner Perkins Caufield & Byers

NEED HELP IN DEVELOPING A BUSINESS PLAN? CONTACT DONNA BOGATIN

Fred Wilson seconds The Guradian’s Web picks for 2008. No surprise, of course, given that two of author Bobbie Johnson’s “hits” are Wilson funded companies, via his Union Square Ventures: Etsy and Twitter.

Wilson’s A VC blog is a promo fest for his portfoilio companies.

Wilson wants his A VC readers to buy a $30 oil spot vase, a $88 retro camera and a $500, 15 inch wire Harley-Davidson, all via his Etsy storefront.

Wilson wants his A VC readers to “Get a Voiki now!,” the latest animated product of his portfolio company, Oddcast.

Wilson wants all to “follow” him at Twitter.

A VC masterfully uses his “personal” blog to showcase his own USV portfolio companies. The A VC treatment, though, is not a guranteed win for funded companies. Wesabe, for example. Wilson on the runner-up Wesabe case:

Our portfolio company Wesabe was the first company to market in the web-based personal finance sector, which has gotten quite hot lately with the launch of competitors Mint and Geezeo. Wesabe’s taken a bit of a backseat on the visibility front in light of its competitor’s launches…

Wilson nevertheless is (publicly) upbeat: “This is a very big market opportunity and we think there is room for more than one large company in this category.”

But what about the “what are you doing category?,” aka Twitter? When Jaiku went to Google, the blogosphere was ablaze wondering “Why not Twitter?”

Why did Twitter miss out on Google acqusition love? How could a U.S. brand, adored by the tech blogosphere and founded by the founder of Google acquired Blogger be passed over for Finnish Jaiku?

We will most likely never know. We do know, however, that Twitter continues to frustrate its most ardent Tweeters. Dave Winer, for example. In September, he increduously annoited Twitter, a free consumer service, “mission critical.” 

I pointed out to Winer, however: Is it really prudent, though, for any professional or business to abdicate control over “misssion critical” operations to a new, unproven, consumer facing, free Web 2.0 tool that is offered on an “as is” basis to be used “at your own risk.”

The Twitter non-performance “guarantee”:

We reserve the right to modify or terminate the Twitter.com service for any reason, without notice at any time.

Winer has since had his fill of Twitter’s non-performance,” lamenting now: “What other basic form of communication goes down for 12 hours at a time?”

Winer is so perturbed that his no-cost “mission critical” Twitter is not performing up to his non-paid expectations that he has put out specs for the Twitter clone he would like produced:

It’s fairly amazing that there isn’t a viable Twitter clone out there yet, one that does exactly what Twitter oes, and runs all its applications. I’d also like to see something much more decentralized, based on static files, available to any Twitter-like system. It doesn’t seem that far out of reach. With all the scaling troubles Twitter has had it’s surprising that there haven’t yet been any entrepreneurs willing to enter the space to compete with Twitter.

Despite Winer’s belief that there are no Twitter-worthy alternatives already on the Web, Jaiku and Pownce are indeed deemed by many to be Twitter competitors.

Pownce is a Kevin Rose co-production. Pownce is not open to the public and Rose’s Digg is being buried alive by its once greatest booster: Michael Arrington’s TechCrunch.

What about Twitter? Will it also soon be deemed a has-been by the very crowd that put it on a pedestal?

Twitter is massively used by the tech blogosphere for self-promotion, same as Digg. The Twitter team includes a geek celebrity, same as Digg. Twitter is hard-pressed to realize its crossover dreams, same as Digg.

Are Twitter’s tech glory days numbered?

ALSO: Mint CEO on Web 2.0 Nonsense AND Who Needs Wesabe: INTERVIEW and Wesabe USV: YOUR Financial Data Belongs on the Web!

AND: Digg: TechCrunch Bails on Arrington Web 2.0 Fave and Twitter and Facebook: The BIG Illusions of Friendship and Influence and Mahalo: Will Calacanis Win the Billion Dollar Startup Lottery in 2008?

CONTACT DONNA BOGATIN

NEWS FLASH: Kevin Rose is a Digg has been, pedaling a “used” Digg, but no takers!  

Michael TechCrunch Arrington began the year by piling on the Digg worship, he closes it though by bailing on the Web 2.0 turnkey startup that he famously warned would disintermediate the New York Times!

Arrington shared that he “couldn’t live without Digg” in January. He confided:

Anyone who reads this blog knows my position on Digg, where users pick what news makes it to the home page. It’s the future of news, and the most disruptive force to mainstream media since blogs were born. Digg has to continue to battle spam while pleasing its most active users, which won’t be easy. But I use the Digg site every day.

Digg battles spam? Like the 10 Digg accounts Arrington himself has fessed up to?

At the 2006 Future of Web Apps Summit, Arrington glowed that Digg was the Web 2.0 startup he would most like to be join the executive ranks of.

In March of 2006, Arrington signaled “the power of Digg” as a “significant social force.” In congratulating Digg on its 2nd birthday last December, Arrington consulted his crystal ball to announce: “Digg investors are going to make a boatload of money.”

Last summer, on the eve of the launch of Digg 3.0, Arrington declared “Digg is looking more and more like the newspaper of the Web and is challenging even the New York Times on page views.” I challenged Arrington on THAT comparison!

Last March, Arrington went to bat for the Kevin Rose phenomenon,” asserting “Wired Magazine seems hell bent on convincing the world that Digg is falling apart”:

My problem is Wired isn’t simply reporting news about Digg. They’re making the news. And they’re going negative. Wired isn’t just reporting Digg news - they are actively engaged in using Wired to undermine Digg.

Arrington’s handy chameleon Web personality, however, has been jumping on the “negative” Digg boat as well, though, as I chronicle in Who Needs Digg? We Got Twitter, Stumpleupon, Facebook…

Today’s who needs Digg TechCrunch post, penned by lieutenant Riley, takes the about face Digg cake: “For sale, used social voting site, asking price $300 million, goes by the name of Digg”:

If anybody has a spare $300 million and would like to buy Digg, Allen & Company’s contact details are here.

Arrington is “obsessive” about profiling Web 2.0 startups, but carefree in annointing Web 2.0 winners, even those he himself founds and puts money in. The Arrington track record is on a (bad) roll.

What TechCrunch effect? Edgeio, anyone? SEE: Edgeio Web 2.0 Bomb: Michael TechCrunch Arrington Cheers $5 million Startup Loss

ALSO: Gawker: Will Nick Denton PAY For Media Respectability? and Google Knol: The End of Google.com, NOT Wikipedia and Google Zeitgeist: $200 University Payola AdWords Scam and Google Warning: How GOOG 411 Tricks Consumers and Why Facebook Will NEVER Kill LinkedIn

CONTACT DONNA BOGATIN

All of a sudden Nick Denton wants a seat at the media table, instead of scrounging for table scraps?

Did Gawker Media chief Nick Denton heed my recent blogging warning about the sustainability of a media model relying on the regurgitating of the oriiginal journalism of others?

During the Q & A of the IAB MIXX panel in September, “Users vs. Journalists vs. Advertisers: Does Web 2.0 Destroy or Enhance the Marketing-Media Ecosystem?” I asked Denton and his fellow panelists if mainstream media would eventually reject the link economy and therby unravel the not so virtuous, online copyright infringing Web conent ecosystem.

After all, shouldn’t old fashioned cold cash, aka licensing fees, be the end game for news organizations that DO put their own money on the line to pay for the real “news” that bloggers of all genres, shapes and sizes end up piggybacking off of and selling ads against for their own accounts?

At the end of the Web 2.0 day, will the shaky economic foundations of the derivitave blogosphere implode, I asked Denton and the New York Time’s About.com’s, Scott Meyer.

Speaking from his New York Times experience, Scott Meyer responded that mainstream media is OK with the (not so) quid pro quo, echoing a familar refrain that it is all about Google PageRank link love building. Denton, proud implementer of the VIA link at Gizmodo, did not have an opportunity to respond during the panel Q & A, but acknowledged to me that the “question” is a good one.

Such a good question, in fact, that Denton is now heeding my warning of a low-value, link-o-rama based blog fest: “It’s no longer enough to take stories from The New York Times, and add a dash of snark. Gawker needs to break and develop more stories,” a Gawker job listing stated, according to the New York Times.

The Times: “That dash of snark — the hallmark of Gawker since it was introduced in 2002 — is less valuable in a Web clogged with Gawker clones. Mr. Denton was apparently not impressed by any of the initial job applicants; within days he had decided to name himself managing editor.”

Not impressed? Denton perfectionism, or Denton slave driving??? If Gawker Media REALLY wants to compete with The New York Times, it will have to step up to the PAY plate! Real journalism does not come easily, or cheaply, as this professional blogger has long been originally reporting and analysing. SEE:

Does Huffington Post Exploit Bloggers AND Mainstream Media? and
If ‘We the Media’ Poaches Content, Who Pays for News Production? and
AP Sues VeriSign: News Aggregation ‘Business Model’ at Risk and
Tom Curley AP Crusade: Google AdSense Lawsuit Near? Thanks to Attributor and
Nielsen, Digimarc, Attributor: Free Internet Content Ride Is OVER!

New York Magazine recently turned the snark tables on Denton, billed “the attractive, upper-class gay Jewish Briton who owns almost all of Gawker Media,” in the expose: “Gawker and the rage of the underclass.” Author Vanessa Girgoriadis:

Like most journalists, I tend to have a defeatist attitude about Gawker, dismissing it as the Mystery Science Theater 3000 of journalism, or accepting its vague put-downs under the principle that any press is good press. After all, there aren’t lots of other news outlets that cover the minutiae of our lives, and we’re all happy for any smidge of attention and desperate for its pickups of our stories, which are increasingly essential to getting our work read. The prospect and high probability of revenge makes one think twice about retaliation. Plus, only pansies get upset about Gawker, and no real journalist considers himself a pansy. But there is a cost to this way of thinking, a cost that can be as high as getting mocked on your wedding day.

The cost of such a way of writing to Denton, though, is apparently very low:

Pinched nerves, carpal tunnel, swollen feet—it’s all part of the dastardly job, which at the top level can involve editing one post every fifteen minutes for nine hours a day, scanning 500 Websites via RSS for news every half-hour, and on “off-hours” keeping up with the news to prepare for tomorrow.

In the media world, publishers often get what they pay for, or don’t. Denton’s Valleywag, for big example. SEE:

Valleywag Breakdown: Drunken Imagination and Valleywag: Lots of Ham, Where’s the Beef?

What is Valleywag “Managing Editor’ Owen Thomas managing? NOT verifiable truths in “reporting” on actual, tragic events.

“A drunk employee kills all of the Websites you care about,” Thomas headlined in the heat of the Summer in good Digg-bait fashion, without caring to backup the accusation with reliable sourcing. A “tipster” was “credited,” as usual, but who knows, Thomas may even be “tipping” himself.

In his (not so) hard-hitting investigative series on the ripple effects of San Francicso power outages, Thomas also headlined “Angry mob gathers outside SF datacenter,” with photographic “proof”: eight mild mannered techies in casual business attire chatting on their cells while queing up patiently to enter an office building.

Thomas proudly takes his lack of credibility on the chin, literally, and even promises more! But, why shouldn’t he, with equally unprofessional new competitor Henry Blodget and his Kevin Ryan financed (not so) Silicon Alley Insider eagerly reguritating every bit of non-verified “SCOOP” that Valleywag poops out. SEE:

Henry Blodget Slams eBay’s Whitman: Yahoo’s Yang Next? and Henry Blodget 2.0: Silicon Alley Outsider Trolls Again and Blodget & Ryan: Cool, or Suck? WHAT Silicon Alley ‘Insider’!

Valleywag’s Thomas earlier this month: “I was duped on a Scoop. This isn’t the first rumor I got wrong. It won’t be the last one. All I can promise is that when I hear something, you’ll hear about it.”

YAY? Public inivtation for manipulation! Before Denton gets all media noble, he ought to get his existing journalism ducks in order.

PLUS: Google Knol: The End of Google.com, NOT Wikipedia and Google Zeitgeist: $200 University Payola AdWords Scam and Why Facebook Will NEVER Kill LinkedIn

ALSO: Reid Hoffman: LinkedIn About Face (book) and Digg: TechCrunch Bails on Arrington Web 2.0 Fave

CONTACT DONNA BOGATIN

Google VP Engineering Udi Manber is no longer sleepless in Seattle, but thanks to who, exactly? The ex-Amazon search guru has apparently taken up the thankless Adam Bosworth VP Engineering slack, waxing (not so) poetic about Google’s “fuzzy” $216 billion market cap number one search engine.

The Google multi-billionaire triumvirate continues to believe it can get away with doing, and saying, anything, logic and common sense be damned:

The web contains an enormous amount of information, and Google has helped to make that information more easily accessible by providing pretty good search facilities. But not everything is written nor is everything well organized to make it easily discoverable. There are millions of people who possess useful knowledge that they would love to share, and there are billions of people who can benefit from it. We believe that many do not share that knowledge today simply because it is not easy enough to do that. The challenge posed to us by Larry, Sergey and Eric was to find a way to help people share their knowledge. This is our main goal.

Poor Google SERPs? Lousy, non-targeted Google AdWords? Larry, Sergey and Eric have fall-guy Manber lamenting about a lack of Web-based knowledge about ”insomnia.” So much so, that Mrs. Manber is called in to rehabilitate (no good) Google SERPs and revive Google’s high-ticket advertising (not better than content) AdWords, with her own signature Google-hosted “knol” page. 

Is Google suffering from insomnia itself? After all, a Google search for “insomnia” at Google.com yields 21,300,017, Google PageRank derived, Matt Cutts approved, co-op enhanced, AdWords fueled, Web pages all about insomnia!

Where does Google come off doing an about SERP face that it all of a sudden the Googleplex is unable to successfully crawl the Web to “discover” and rank quality content?

Is Udi Manber so enamored by the talents of his own wife, that he is unable to appreciate first-page Google SERP and AdWords results the likes of: U.S. Department of Health and Human Services, Wikipedia, American Insomnia Association, Mayo Clinic, Steve Case’s Revolution Health…and the world famous Stanford University, from which Mrs. Manber herself hails!

Google is hardly “encouraging people to contribute knowledge.” Google.com continues to maneuver to be in control of whatever it wants, however it wants it, always.

FOR BIG EXAMPLE: Google Zeitgeist: $200 University Payola AdWords Scam

ALSO:There Is NO Google Apps Love in the Enterprise and Google Knol: The End of Google.com, NOT Wikipedia and Google Warning: How GOOG 411 Tricks Consumers 

PLUS: Twitter and Facebook: The BIG Illusions of Friendship and Influence

CONTACT DONNA BOGATIN