Tim Oren's Due Diligence

Rant: Gung Hay Fat Choy, Google...

...and may you live in interesting times. Its unsurprising decision to acquiesce to government mandated censorship in its Chinese language site appears to mark the completion of a watershed transition for Google: from being the darling of the digirati and bien pensant, into bete noire. Somewhere along the line the cuddly little non-portal grew up to be a big, public, capitalist success. Can't have that, should be a publicly regulated utility. Having been inside a similarly positioned company, Apple, as it was periodically trashed as "selling out" for the indecent act of creating computers that businesses wanted to buy, I'm well equipped to view this hyperventilating with some mix of indifference and scorn.

To be sure, Larry Page more or less stuck out his chin and said "Hit me" with the "Don't be evil" thing. We can't even seem to agree that feeding people into shredders is evil, let alone turn that word into a commonly understood bright line for corporate behavior. What Page created was a shining mirror for projection by the perennially outraged, for whom 'evil' is whatever behavior offends their sensibilities but appears to benefit a corporate bottom line.

And they are out, in force. Not that they aren't entitled to their opinions. They just shouldn't be taken seriously until they propose an alternative. AdSense boycotts and pathetic Google-bombs don't count. They won't change the facts of life for Google or for Chinese citizens, no matter how good they make their proponents feel.

Here's a specific suggestion. Over here is a perfectly good, scalable, open source search engine. It's not available in Chinese, that I know of. Over here, are a bunch of international bloggers, some with relevant motivations and language skills, being either coders or with connections to coders. A possibility suggests itself. Nutch may not be Google, but then it wouldn't have to organize all the world's information, only that part the Chinese government thinks is evil. Nonetheless, as I've noted before, an index is a process, and someone will have to defend that index against the attacks that will occur if it's successful. That means people and money. A business model might have to wait, but here is someone with money, whose rationale might just align with this project. So, will someone put up?

The Best Apple Announcement...

...isn't from Apple. It's Google Earth for the Mac. Very cool. Runs fine on my rather dog-eared Titanium 1GHz with a T-1 equiv DSL connection. Navigational interface easy to use, lots of hooks back to Google content. Had no problem searching for Palo Alto, finding and zooming down my office window (since the photos of the old Mayfield section were somewhat oblique). From there zoomed out, 'drove' down 280 and 85 and revisited the sections of Almaden Quicksilver Park that I'd hiked on Sunday.

We had actually looked at Keyhole, the company that originated this technology, prior to the Google acquisition. The discussion never went far, as they were visibly struggling with the go-to-market issues associated with using the technology as a point solution. As an element of an information organization and management platform, however, it's come into its own. A case of real synergy in an acquisition, Google is to be commended for both insight and execution. (Now why haven't they done so well with Blogger, one wonders...)

HT: 'Cicero'

VC Blogs as People Journalism?

Well, maybe if Jeff Jarvis has his way. After dissing most VC blogs as 'abstracted' and 'cliched', he suggests:

VC gossip, catty VC valuation badmouthing, anonymous confessions of the top 10 ways VCs blow off venture beggars, sex tips of the nearly wealthy...

Now I'm not actually sure if he's serious or tongue in cheek, but since Jeff won his spurs starting up Entertainment Weekly, let's take him at his word for the duration of a post, and forecast the chances of VC bloggers turning into People style dish artists.

Ain't. Gonna. Happen. 100%. Here are a few of the reasons why the Valley scene will never be like Hollywood journalism.

Hollywood thrives on publicity. To some extent 'brand awareness' is the only asset of an entertainment celebrity, from actor to news anchor to director. Just make sure the name is spelled right, even if it is the Enquirer or ET. General press notice just gets a VC a batch of dumb proposals and dumb questions.

The VC thrives on word of mouth. What we crave is a good reputation in the trust network that connects up good ideas, smart people, and money. And dishing your deals would do what to that?

The value VCs add is highly specific, taken in both the vernacular and transaction cost economics senses of the word. In most cases, the deal analysis and ongoing business direction will require a good deal of analysis of (variously) the technology involved, the market entry tactics, competitor's capabilities, strengths and holes in the team, fund raising environment, and so on. Particularly early stage deals tend to be 'one-offs' (and if they aren't, you've got to wonder about competitive barriers).

So given that we aren't going to dish on specific deals, and that each of them is likely an oddball in some way, it's hard to come up with pithy and often applicable rules that aren't so high level as to be banal. The comment by Jeff's contrarian friend that "I’d rather see VCs talk about situations where they *didn’t* follow the business cliches" is therefore astute.

So to answer one of Jeff's queries, no, most VCs don't talk in slogans amongst themselves (and those who do are scary). You might call if carefully calibrated and highly motivated gossip, if you want, but it's part of how VCs do a job of putting together ventures in the face of great uncertainty. And there's no motivation at all for that gossip function to be publicly visible.

Citizens' Media: Emerging Patterns

"The Internet detects censorship as damage and routes around it." This old net warrior's proverb is a good one to keep in mind when looking for patterns as citizens' media emerge from truly embryonic stage and begin to develop specialization. Some straws in the wind:

• Blogger Bill Roggio gets an invite from military acquaintances to cover operations in Iraq, passes the electronic hat to raise funding, goes there and does that. On his return he is attacked by an MSM story insinuating that he is variously part of a military information war operation, or a partisan tool.


• Michael Yon returns from his own citizens' media reporting stint in Mosul and other parts of Iraq. He calls for retired military volunteers to help him review stories from the troops and other in theatre. These stories will feed into a 'Frontline Forum'. Interestingly, the e-mail address for response is 'michaelyonmagazine'.


• The U.S. Army's PR agency begins contacting bloggers to provide them direct access to DOD editorial content.


• Pajamas Media continues to morph, seemingly into an hybrid of blog content aggregator and ad placement network. Business model and fortunes unknown at this point, but its skyscraper sidebar adverts are becoming familiar around the blogosphere and feature some big names.


• Robert Cringley, grizzled veteran of media from hot type to blog, analyzes the impact of pay-per-click advertising on traditional media, and finds it deadly, implying not only a burden of accountability not possible in the MSM, but a reduction in the total cash flow through the media industry.

Along with that Internet mantra, it's worth pondering some startup wisdom. Effective market entry occurs where the differentiating value of an innovation is the greatest, not necessarily where it will deliver the greatest value in the long run.

There is a non-accidental pattern in the cited events. Information sources and users are beginning to connect to each other around the incumbent media, motivated by the media's inability or unwillingness to carry their messages. A modicum of advertising revenue is beginning to flow in that direction, though not enough to move large numbers of partipants to full-time professional status. The new media are evolving away from a sharp line between audience and commentariat. With the old media's status as gatekeeper discredited to the initial audience, this is not seen as a disadvantage.

It's not going far out on the limb to suggest that these events of the past month will one day be viewed as harbingers of the new media roles and institutions that eventually evolve. The place to watch in the next 12-24 months is the role and effectiveness of advertising in blogs and other citizens' media organs. Is brand exposure still relevant, or is Cringely right in suggesting that PPC rules all? What motivates viewers to notice or act in an often high charged context? What types of advertisers do best in narrowcasting venues? Which in aggregators? Is there one uber-algorithm for placement, as with AdSense, or will effectiveness require specialization? Answers to questions like these will be determining how high is the sky for the new media, and how low the fall for the old.