Author: Mathew Ingram

I watched this clip of Mike Arrington on the Fox Business show Happy Hour, with Cody Willard and Rebecca Gomez, and the one thing that struck me was how smart and reasonable Mike seemed compared with the frenetic — almost manic — Willard and his sidekick.

[youtube https://www.youtube.com/watch?v=_-og4F6eNko&rel=1&border=1&w=425&h=373]

More to the point, I think Mike’s long-range outlook on Yahoo is correct: the company has to figure out how to grow its online-advertising business, or surrender it to someone who can.

As expected by just about everyone, Yahoo released fairly lacklustre numbers late Tuesday — and also used a word that you should try never to use in an earnings outlook: “headwinds.” As Rob Hof notes at BusinessWeek, this is code for “results are going to suck until further notice.” The stock was off about 10 per cent in after-hours trading, and that took it down near $20, or 40 per cent lower than it was three months ago.

Henry “I used to be a famous Wall Street analyst” Blodget has a pretty good rundown of the numbers at Silicon Alley Insider (although I must admit that every time he does that kind of thing I wonder whether he isn’t getting a little close to the line, given his settlement with the SEC). The fact is that Yahoo is cutting 1,000 people — as was widely rumoured last week — and its future guidance was so-so at best.

Share of the search market flat or falling, profit margins lower, new deals with cable companies bringing in lower revenue — not a pretty picture. but Yahoo still has high hopes, according to Sue Decker. Unfortunately, Yahoo shareholders have had some pretty high hopes as well, and about all they have to show for them so far is a share price that has been sliding down the slippery slope for the past year.

“It’s such a fine line between stupid and clever.”
David St. Hubbins, This is Spinal Tap

Google is apparently experimenting with tiny barcodes that will sit next to newspaper advertisements and be scannable by mobile phone, so that you can “read” the code and be whisked to some website where you can get an interactive coupon, a special deal on Star Wars memorabilia, etc. Apparently I’m not the only one who immediately had visions of the CueCat, an ungainly handheld scanner gizmo that some ridiculous company tried to foist on newspaper readers back in the first bubble.

In the comments on a Silicon Alley Insider post about the Google experiment, Henry Blodget says that CueCat was the single worst idea he ever heard during Bubble 1.0 — and that’s saying a lot. I would have to agree (Allen Stern of Centernetworks, however, says that he thought it was a pretty good idea, and still has one in his closet). If you want some technical information, there’s some at the Google FAQ.

I know that there are a lot of people who are going to point out that they use barcodes like this all the time to buy things in Japan, but I would like to point out that not everything that is popular in Japan is good, and in support of that I would offer this and most of these.

Adam Ostrow has the news that Digg has joined the Data Portability group — the same one that Facebook and Google joined not that long ago — and will also adopt OpenID. Steve Williams at Digg has more on the news, saying the site wants to help users do whatever they want with their data, and is always looking for ways to help Digg interact with other sites better:

Want to sync your Digg friends network with another service? We want to help you do that. Want to use your Digg activity to get recommendations from another web site? We’re working on that, too.

This may not be a huge development, but it’s nice to see some of the big social networks lining up behind both of these initiatives. And Digg is definitely one of the big boys now — according to John Graham-Cumming, who apparently did some sleuthing, the social network is closing in on 3 million registered users.

Just came across this, thanks to a Twitter post from Jason Calacanis: it’s a hilarious parody of the Tom Cruise video from a week or two ago, the one in which he was selling Scientology as the cure for all of mankind’s ills — the video that Scientology has been trying to get Gawker (among others) to remove, which I wrote about here. Actor Jerry O’Connell does a pretty good job of channeling Cruise, complete with slicked-back hair and a black turtleneck. The hand movements are right on, and the maniacal laughter is probably the best part. Be sure to check out the out-takes as well.

http://www2.funnyordie.com/public/flash/fodplayer.swf?1200035364the parody video Tom Cruise WANTS you to see! on FunnyOrDie.com

Last time I checked, the video -had been viewed about 1.7 million times. Not bad, considering it’s only been up there for a week.

The chorus of voices clamoring for someone else to fix the music business continues to grow. The latest installment was a speech at the Midem music industry conference by U2’s longtime manager Paul McGuinness, in which he called on ISPs — and pretty much every major company in Silicon Valley, including Apple, Google and Facebook — to drop whatever they’re doing and come to the rescue of the recorded music business. As Mike Masnick notes over at Techdirt, his arguments are so wrong-headed that it’s difficult to know where to start in critiquing them.

Mike mentions the first thing that popped into my head when I read McGuinness’s speech: this is exactly the same argument that the newspaper industry has made on several occasions, about how Google and Yahoo and other companies are “stealing” their content or making money “off their backs,” or some such nonsense. The various newspaper industry groups haven’t mentioned ISPs specifically, but probably because they didn’t think of it. I’m sure they’re kicking themselves now.

By McGuinness’s logic (read the full text of his speech), ISPs should be blocking every pirated copy of a song — i.e., every one that doesn’t bear some kind of watermark (the U2 manager also happens to be an investor in a company that does just that). If you try to download or upload a pirated file three times, he says, your Internet account should be suspended. But why stop at music? I could see the movie business getting on board — not to mention every other content business.

And what about other types of illegal content, such as pornography or bomb-making materials, or even just a short story about someone who wants to kill the President? Maybe ISPs should block those as well, and cut off the Internet accounts of anyone who shares such material. Maybe we should extend it to any type of hate speech, including blog posts about Muslims, or Catholics, or women, or homosexuals. McGuinness would probably say that sounds like a great idea.

After all, who wants freedom of information or freedom of speech? That’s right — hippies. McGuinness drops the blame for virtually all of the music industry’s problems at the feet of the hippies who started this whole Internet thing in the first place. I’m sure as far as he’s concerned we’d all be a lot better off if it had never been invented. Then people could listen to the radio and buy overpriced CDs, the way that God intended.

Further reading:

— Farhad Manjoo at Salon.
— Nate Anderson at Ars Technica.

A Twitter post (fittingly enough) caught my eye and sent me to a WordPress post in which newly-enriched founder Matt Mullenweg announced a Twitter-style group blog theme for WordPress called Prologue. Although I’m sure some will see this as Automattic going after Twitter, I see it more as a tribute to the power of the viral messaging app. In effect, the theme is an attempt to replicate the kind of group activity stream and messaging function that Twitter does so well in the form of a blog.

I could see this being hugely useful for a group working on a project, as Matt describes in his post, as a way of keeping track of what everyone is doing — complete with tags that users can follow and RSS feeds built in. It doesn’t benefit from the same kind of network effects as Twitter does, of course, because it’s restricted to a group of people who all use the same blog. But what if there was a way to tie those types of posts together with others from other Twitter-style blogs?

As Mark Hopkins notes in a post over at Mashable, this kind of thing is particularly interesting in light of what Dave Winer and some others have been saying about replicating Twitter in a more distributed fashion, to prevent the kind of outage it saw during Macworld. Now that I think about it, maybe Matt is thinking about going after Twitter 🙂

There’s lots of commentary today about my friend Clive Thompson’s piece in Fast Company magazine on researcher Duncan Watts, who argues that much of author Malcolm Gladwell’s book The Tipping Point just isn’t true — that is, the idea that there are “influencers” who can make products or services succeed or fail simply by adopting or recommending them. But I think that many of those who are writing about this are missing the point.

Guy Kawasaki, for example, says that Watts’ argument means the “A-list” is dead, and that companies don’t have to pitch certain bloggers or journalists or experts any more, or go to trade shows or whatever. But Watts isn’t saying that media — blogs, newspapers, magazines, etc. — don’t matter any more. He’s saying that there aren’t specific individuals who can recommend products and have a disproportionate impact on the prospective market. There’s a big difference.

It doesn’t mean that bloggers and media aren’t important. In fact, they might just be more important, because if Watts is right then companies have to get the word out about their products to as many people as possible, simply because there’s no way of telling who the person is that might become the accidental Patient Zero of a viral marketing bonanza. If you believe Gladwell, then you only have to target certain people in certain markets, but Watts is saying it could be anyone.

I actually don’t think there’s as much of a clash between what Gladwell is arguing and what Watts says is the case. Anyone might be able to play the role of an influencer if the market happens to be ready for whatever the product or service or new development is (which is the whole meaning of the term “tipping point”) but there are likely to be certain people who are more connected to those kinds of things than others, which increases the likelihood that they will be the ones to start the trend.

This one could go down as one of the most bungled launches in Web 2.0 history — and that’s saying a lot. Qtrax, the legal ad-supported p2p network that has been in the works for more than four years now, came out on Sunday with much fanfare at the Midem music industry conference in Cannes, and said that it had the backing of all four major record labels, and would launch with 25 million tracks available for download. And then the wheels started to come off.

First, Silicon Alley Insider quoted a spokesman for Warner Music as saying the label had no agreement with Qtrax; then a spokesman for Universal said that they didn’t either; then someone at EMI said that it had no such deal either. Finally, a spokesman for Sony BMG said it had not signed anything with Qtrax either. So from being “the first legal p2p network backed by all four labels,” Qtrax quickly became a p2p network without official backing from any of the major labels.

The company says that this is all just a misunderstanding, and that it is close to finalizing deals with all the majors — but that’s not what its press releases and comments implied on Sunday. They said the service would be launching on Monday with 25 million tracks and the support of all the labels. That led to glowing articles like this one in many publications about the launch of this incredible network.

According to a report in Wired magazine, Qtrax had agreements several years ago with the major labels to do trials of an ad-supported music service, but most of those deals have since expired, and the kind of network the company is currently talking about is different from that described in the original agreements.

In addition to the “misunderstandings” with the labels over whether they support the idea or not, Qtrax has apparently been unable to start even a limited version of the service as promised. The site was unavailable off and on Monday, and said that as a result of demand the launch would occur “in stages.” A download link on the launch page was disabled. If Qtrax can somehow survive this botched launch and actually become a useful alternative, it will be the equivalent of Lazarus rising from the dead and then getting his own prime-time TV show.

Update:

Matt posted a comment here with a link to Silicon Alley Insider, which notes that a Warner Music rep says the label has not licensed its music to Qtrax, and Universal hasn’t signed a deal either but is reportedly talking to the company. Sounds like even more reasons to be skeptical.

Original post:

Qtrax finally launched on the weekend at the Midem music conference in Cannes — although the service is currently down, with a page telling users it is unavailable “due to overwhelming demand” and to return in 24 hours. The service, which used to be a Kazaa-style p2p app, has spent the past four or five years now trying to become what it claims is the first legal peer-to-peer music service.

There are more than a few reasons to be skeptical about its chances. One is that Qtrax has already missed several launch dates, most recently in October. And while Wired magazine says that the company has more than 25 million tracks, other reports say that includes all the songs available on Limewire and other p2p networks, and it’s not clear how many of those will actually be available to Qtrax users.

The fact that it has taken this long for the service to even launch is a sign of how hard it is to build a business that suits the demands of the record industry and the needs of users. It’s also not clear whether the company’s business model – music paid for by advertising – will even work or not. Several other companies, including SpiralFrog.com, are looking to do the same thing, but have yet to show much success (several SpiralFrog executives left last year). Note: See the comment from Brian below for a link to some numbers about SpiralFrog.

While the songs are free, you have to use the Qtrax music player software — a specialized version of the Songbird music browser, which is itself based on Firefox — in order to play them, so that the browser can show you the ads that are supposed to pay for everything. In other words, no iTunes. And while the company says it is working on iPod support, at the moment it appears that Qtrax files won’t play on iPods.

It’s bad enough that the files include digital-rights controls that prevent them from being burned to CD. If they won’t play on the world’s most popular music device, that would be a killer. Meanwhile, Amazon says it is rolling out its giant music service internationally — and it is completely DRM free. Will users prefer DRM-free music that costs money, or free music that comes with all kinds of restrictions?

TorrentFreak has the news that The Pirate Bay has passed a somewhat amazing landmark: 10 million “peers,” or individual BitTorrent servers that are indexed by the site’s “tracker.” Although it’s not directly comparable to The Pirate Bay because of the way that BitTorrent works, I started wondering how those numbers stacked up against Napster, the first widespread peer-to-peer file-sharing app.

According to a retrospective from former Napster vice-president Don Dodge, the network at its peak had more than 50 million registered users. But those were just people who signed up, and may have only used the service once or twice. How many simultaneous users did it have at its peak? According to several articles I found, the file-sharing network topped out at about 1.6 million simultaneous users.

(I know that 10 million isn’t quite ten times 1.6 million, but TorrentFreak notes that the number of peers tracked by The Pirate Bay jumped from 8 million to 10 million in a month, so I think it’s likely that the service will be tracking 15 million peers or so fairly soon).

Anyway, you look at it — and Slyck has a bunch of things to compare it to, including the entire population of New York and then some — that is a gigantic number. Does that mean millions and millions of people have suddenly decided to renounce morality and become dirty, thieving pirates? I don’t think so. I think that media industries of all kinds are dealing with what author Matt Mason calls The Pirate’s Dilemma.

In other words, The Pirate Bay is a gigantic, flashing sign pointed at the entertainment industry as a whole, and in a nutshell what it is saying is: you need to change. Not soon — now.

AllFacebook is reporting that Facebook has now made it even easier for developers to create Facebook apps and widgets that will run just about anywhere on the Web. According to the description at ZDNet, developers have been able to get Facebook widgets to run elsewhere since the platform launched, but it took some server-side scripting and knowledge. Now apparently all it takes is a little bit of Javascript.

Whether you think this is a good thing or not probably depends a lot on your view of Facebook widgets and apps, but what I find interesting is how Facebook is trying to straddle the line between control and the open Web — to find some middle ground between the “walled garden” approach and the totally open. The site would no doubt really like it if everyone who created an app used it only on the site, and every user of that app had to come to the site to use it. At the same time, however, Zuckerberg and his team have to recognize that’s probably not going to happen.

Can Facebook continue to be a kind of gatekeeper of the social graph, and yet still allow bits and pieces of its platform to live elsewhere on the Web? I think the fact that it is even trying to do so is worth noting — even though it seems like the site is trying to have its cake and eat it too.

Allen Stern of Centernetworks has a provocative post in which he asks whether people would be willing to pay $1 for a full-text RSS feed, or to pay $4.95 for a bundle of 10 feeds, etc. His point (I’m pretty sure) is that advertising in RSS feeds doesn’t really work that well, and that it’s hard to monetize a blog if no one ever comes to the website and looks at the feeds. Allen has very kindly suggested that my feed could be part of the tech-blog “bundle,” but I don’t think his idea is going to work.

Many of the commenters on Allen’s blog argue that this would be good value, that full feeds without ads would be better than either partial feeds or feeds with advertising, and so on. MG Siegler at ParisLemon says that he thought the idea was ridiculous at first, but that he has warmed up to it. I’ve given it some time and thought about it a fair bit, but I’m not warming up to it at all. If anything, I’m getting colder towards the idea. I just don’t think making people pay for feeds makes any sense.

If any of the blogs that Allen has in mind were producing content that was highly valuable — inside information, valuable tips — then you might be able to argue that charging for them would make sense. But I can only think of a few blogs that fall into that category (and no, I’m not including my own), and here’s the thing: most of them are already making money from those things, just not through their blogs. As Rex Hammock said, my blog doesn’t carry advertising, my blog is advertising.

I can totally understand the desire for something like a paid-feed model — I just don’t think it would work, and it kind of goes against what I see as the whole point of having a blog. Sorry Allen.

We can all debate the wisdom of the Wall Street Journal maintaining a pay wall (or at least part of one — see my recent post), and even the wisdom of newspapers and media sites having registration walls. But surely we’ve gotten beyond the point where anyone would argue that publications should try to control where and how you link to them, right? Wrong. According to a post by Don McAskill, CEO of image-sharing site SmugMug, BusinessWeek specifically asked him not to link directly to a recent article they wrote about his company.

When I first read that, I confess that my jaw dropped open in amazement. Did I go through a time warp of some kind that put me back in the mid-1990s? No. But reading through BusinessWeek’s bizarre and long-winded “user agreement” is like going back a decade or more, to a time when traditional media — and companies of all kinds — thought they could control how users accessed or made use of the material on their websites, right down to preventing them from linking to certain things.

In fact, if you read through the part of the policy that covers “deep-linking,” which is made to sound like something heinous and clearly illegal, it also forbids “bots” from going through the site, which would seem to cover what Google and pretty much every other search engine on earth does. That’s smart. Don’t just try to block people from linking to your articles — try to prevent them from ever being found at all! Brilliant. (The BusinessWeek article is here, in case you want to read it).

Don also writes about how a story the L.A. Times wrote about SmugMug isn’t available easily either, because of the site’s registration wall. I know I’ve been stopped short before by the Times wall (check the comment at that link — the registration wall pops up after a certain number of visits), and each time I go away and never read the article that has been linked to. I know I could just use BugMeNot, but I just can’t be bothered, and so the story goes unread. How is that doing anyone any good? That’s pretty dumb — but BusinessWeek takes the cake.

Fred von Lohmann of the Electronic Frontier Foundation has the details on a lawsuit that Warner Music has launched against Seeqpod, a music search engine that has become popular over the past few months — largely because it is super-fast, and allows users to play songs directly in their browser after they find them. Songza.com is another similar music-search engine, although the user interface is much more stripped down (it was developed by Aza Raskin, the 24-year-old son of legendary Apple designer Jef Raskin), and it recently announced a deal with Seeqpod.

As Fred notes in his post, this lawsuit is just the latest attempt by the music and content industries to go after anything that functions as a search engine, on the argument that if they allow people to search for copyright-infringing files then they are contributing to that copyright infringement (which was the central point of the Napster and Grokster cases). What makes Seeqpod.com and Songza a little different is that they actually allow you to play the file, even though it resides somewhere else.

It will be interesting to see where this one goes, if only because it has implications not just for search engines but also for other music-related services, such as the Yahoo Music built-in mp3 player the company launched not long ago — part of Yahoo exec Ian Rogers’ vision of a distributed music network that finds content wherever it is and makes it playable. There are other services as well, including G2p.org, that let you find music easily (and I just found another one about 10 minutes ago called FindTheTunes.com). Can the record industry stop them all?