Category: web

  • 2015 and the internet of desperate valuations

    2015 and the internet of desperate valuations

    2015 will feature more boneheaded moves as over valued companies try to meet investors’ expectations, a good example is Twitter adding sponsored accounts to its lists service.

    The move by Twitter, reported by Search Engine Land’s Danny Sullivan, is another attempt by the service to get revenues that justify the company’s ten billion dollar valuation. While adding little income, the move further erodes trust in the service.

    Illustrating the investment mania home delivery service Instacart announced it had raised $220 million, an amount that values the company at two billion dollars.

    That home delivery services are again the investment flavour of the time is a worry given similar stakes marked the peak of the first Dot Com Boom in 2000. Whether today’s equivalents are any more sustainable will be one of the questions for 2015.

    Another question for 2015 will be whether Twitter can crack the magic code and justify its valuation.

    Happy New Year.

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  • Yahoo! Directory comes to an early end

    Yahoo! Directory comes to an early end

    After twenty years the Yahoo! Directory closed down five days early reports Search Engine Land.

    The rise and and fall of Yahoo!’s core product illustrates both the volatility of the web and how the underlying dynamics of the internet has changed; at the time Yahoo! Directory was launched, we were struggling the task of keeping track of all the information being posted online.

    Even in those early days it was clear that task was becoming unmanageable and this was the problem Google set out to solve and its success destroyed the directory business along with a whole range of other industries.

    Yahoo! Directories’ demise needs to be noted by today’s web and social media giants; just as these technologies are disrupting old industries, new businesses aren’t immune to those changes.

     

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  • Spreading the good news – Canva’s Guy Kawasaki

    Spreading the good news – Canva’s Guy Kawasaki

    “My job is to spread good news,” says Guy Kawasaki of his role as Canva’s Chief Evangelist.

    Kawasaki was speaking to Decoding the New Economy about his role in popularising the online design tool which he sees as democratising force in the same way that Apple was to computers and Google to search.

    Democratisation is a theme consistently raised by startups and businesses disrupting existing industries and Kawasaki continues this theme.

    “The world is becoming a meritocracy; it’s not about your pedigree, it’s about your competence,” states Kawasaki.

    Falling barriers to entry

    What excites Kawasaki about the present business climate are the falling barriers to starting a venture. “Things are getting cheaper and cheaper, in technology you had to buy a room full of servers, have IT staff in multiple cities. Today you call Amazon or Rackspace and host it in the sky.”

    “Before you had to buy advertising for a concert, now if you’re adept at using social media – with Google Plus, Facebook,Twitter, Pinterest and Instagram – you have a marketing platform that fast, ubiquitous and cheap.”

    “What excites me is there are going to be more technologies, more products and more services because the barriers are so low.”

    Creating a valued and viable product

    For those businesses starting into this new environment, Kawasaki believes the most important thing a startup should focus on is getting a prototype to market; “at that point you will know you’re truly onto something.”

    “If you build a prototype that works you may never have to write a business plan,” says Kawasaki. “You’d never have to make a Powerpoint, you may never have to raise money as you could probably bootstrap.”

    Kawasaki view is the MVP – Minimum Viable Product – model of lean product development should have another two ‘V’s added for ‘Valuable’ and “Validated’.

    “You can create a product that’s viable, ie you could make money, but is it valuable in that it changes the world?”

    “Is your first product going to validate your vision? If it’s not then why are doing it?”

    The story Kawasaki tells is the tools to deliver valued and viable products are more accessible than ever before; that’s good news for entrepreneurs and consumers but bad for stodgy incumbents.

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  • Outage

    Outage

    A 16 hour outage by hosting service Bluehost knocks the wind out of this site’s sails.

    There’s much to say about customer engagement, engineering and management but it will have to wait for another day.

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  • Valuing Twitter

    Valuing Twitter

    Now microblogging service Twitter has released documents ahead of a stock market float, it’s possible to start looking at the viability and stock market valuation of the company.

    When Facebook’s float was first mooted in early 2011, we looked at how the social media service stacked up against Google a decade earlier. The question was ‘is Facebook worth $50 billion?’

    The stockmarket answer was resounding ‘yes’ despite an initial fall that saw investors face a 50% loss in the early days of Facebook being a public company. Today the stock has a market valuation of $122 billion, with an eye popping price/earnings ratio of 122.

    So how does Twitter stack up at the valuations being discussed? Quite well it appears when we put it against Google, Facebook and LinkedIn.

    Company Google Facebook LinkedIn Twitter
    Market Cap 288 123 27 13
    P/E 25 288 901 29

    For Twitter, the real challenge is making money from the service and their latest idea is marketing the service as an essential companion to watching TV.

    The discussion over how Twitter makes money exposes another problem for the service in it has no obvious revenue stream which makes comparing the platform to Facebook or LinkedIn rather problematic.

    Facebook has advertising while LinkedIn has premium subscriber services both of which are problematic.

    Not having an obvious revenue model may not turn out to be a problem – as LinkedIn’s P/E shows – and Twitter’s founders are probably more likely than anyway to be the digital media industry’s David Sarnoff.

    It may be Twitter makes its money from giving advertisers, marketers and others access to the massive stores of data the company is accumulating.

    Whatever way it turns out, Twitter’s going to be the hot IPO news for the tech industry for the rest of the year. At current prices, the investors will be lining up to buy the stock.

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