Month: May 2006

And so we return to our story, to find our hero — the plucky little (or not so little) voice-over-Internet company Vonage — finally going public, after much back-and-forthing over the past year about when to issue stock and for how much, or whether to try and convince someone to take the company over. And what happens? The stock tanks, dropping by as much as 15 per cent at one point on Wednesday. Needless to say, that’s not what most IPOs are supposed to do (as Mark points out), especially since underwriters of initial offerings usually try hard to underprice the issue so that they get a little “pop” on opening day.

Well, Vonage definitely got a pop, but it was more like the sound a balloon makes before it deflates. Why? as Paul Kedrosky notes, it isn’t much of a surprise. While the term VOIP may be hot, industry watchers such as Om Malik have been warning for some time that Vonage is caught between a rock and a hard place — it has the name-brand value (courtesy of a very expensive marketing campaign) but it is being squeezed by free VOIP provider Skype on one hand and by cable providers on the other.

It’s true that by selling shares at $17 (U.S.) each, Vonage managed to raise a little over $500-million, giving the entire company a combined market value of over $2.5-billion. So we shouldn’t be holding any charity drives for CEO Jeffrey Citron, whose stake is likely worth about $1-billion or so. But at the same time, Vonage needs all that money to try and plug the gigantic hole in its balance sheet, which continues to drain money at a furious pace. Last year, the company lost $261-million, which was almost as much as it had in revenue.

The worst part is that Vonage’s costs are likely to remain roughly the same, or even increase, as the market gets more competitive — and yet its chances of becoming profitable are likely to fall, as Skype and the cable companies both put pressure on prices. Sound like a good recipe for an investment to you? Then Vonage would like to hear from you. Better use Skype to call your broker though, it’s cheaper. (Henry Blodget has a great anecdote from an AP story about a Vonage user who got some stock as part of the issue).

Here’s another roundup of stuff that I haven’t had time to write about. Someday I hope to (find time, that is):

• Vonage has finally completed its IPO — one that was reportedly put off several times as the company searched for a buyer — and has raised $500-million, despite the fact that it is hemorrhaging money and facing increased competitive pressures from cable VOIP.
• paidcontent.org notes the launch of something called indiestore.com in the UK — a website for unsigned musicians that includes blogs, events listings, photos and video downloads, and also allows artists to sell their songs and get 70 per cent of any sales.
• Anne Zelenka of Anne 2.0 has a great post about how content has filed for divorce from advertising, and cites two other smart people on the subject, namely Scott Karp of Publishing 2.0 and Stowe Boyd of /Message.
• Jeff “resident philistine” Jarvis takes a few jabs at Nick “resident curmudgeon” Carr, over the idea that books might not be the ne plus ultra of intellectual life.
• PlagiarismToday looks at whether quoting large sections of other blogs — even if you source them properly — is (or should be) considered plagiarism.

For a company that has only been around a few months, Sphere.com seems to have already made quite a mark, including signing on for a trial with Time magazine that involves putting “Sphere It” links on Time stories. Clicking the link does the same thing as the Sphere It bookmarklet — that is, it searches the blogosphere for posts that are relevant to the story or page being viewed.

To me, the fact that Sphere has managed to strike such a deal when Technorati.com is already well-established in that area (it has arrangements with the Washington Post and Newsweek, among others) is indicative of how wide-open the whole field of blog search still is. Remember when Google’s blog search launched, and how excited everyone was? And yet, Google’s size and might doesn’t seem to have translated into dominance — in fact, its blog search is distinctly underwhelming. Icerocket.com, formerly owned by Mark Cuban, is a little better but not much.

Even Technorati.com, the kingpin of the field, often produces results that aren’t particularly relevant. Although my own demo of Sphere over the past while has been hit and miss, there have been several occasions in which it came up with distinctly more useful links than Technorati. The reason for this appears to be that Sphere — which uses software from predecessor companies Waypath and Yodel — does a “semantic analysis” of the text in a page and uses that to judge relevance, rather than just tracking raw links as Technorati.com does.

Susan Mernit is no doubt right that being in the right place at the right time and having a cool widget also makes a difference, but I think the search technology matters too. Sphere may not be perfect, but it’s better than we had before, and it’s certainly better than what we get from the king of search — Google — which seems like a real missed opportunity. Maybe Google is too busy launching things like Google Notebook and Google (chicken) Coop.

It seems like ages ago now that Mark and Stuart and Rob and Mike and I were all standing around nervously waiting for mesh to begin, but it was only a week ago. I have to say that even though I am a bigshot columnist at a big-city newspaper, I was a little starstruck at the calibre of Web 2.0 talent in the room at MaRS, including Om Malik, Matt Mullenweg from WordPress.com, Andrew Baron from Rocketboom, Jason Fried from 37signals.com, Paul Kedrosky, Steve Rubel, Tara Hunt and Chris Messina.

In case you haven’t seen any of the posts by Tris Hussey of Qumana or my new pal Scott Karp at Publishing 2.0, it was by all accounts a smashing success. And much of the success was due to all the meshing that happened between participants and panelists and speakers in the atrium and at the cocktail party afterward — and also at The Drake, where many fascinating conversations were had, including Andrew Coyne talking with Tom Williams of Givemeaning.com about a market-based approach to charitable donations.

If you missed the photos that are up at Flickr.com (tag “mesh06”), I’ve got some here — which I put together using Bubbleshare, fittingly enough, since Albert Lai of Bubbleshare.com was at mesh on a panel with Malgosia Green of Nuvvo.com and Mike McDerment of FreshBooks.com. Included in this series are some of us nerve-wracked organizers, one of Amber MacArthur and Joey “Accordion Guy” DeVilla, and some of Om and Paul and Matt and Jason yakking — including the now infamous shot of Eliott Noss of Tucows.com getting introduced to Matt Mullenweg of WordPress (Tucows has a competing blog platform called Blogware).

Mark’s column reminded me that I had been meaning to post something about the financings announced at mesh, including the seed capital that Michael Tippett and his team at NowPublic.com got (Michael was on a panel at mesh), and the $6.5-million combination of seed and venture capital that Colin How and the gang over at Pixpo.com recently got (Colin was one of our “15 Minutes of Fame winners). Coincidentally enough, both are based in British Columbia — which makes one wonder if Web 2.0 ideas flourish better in warm weather.

The funds for Pixpo came from Madrona Venture Group, a VC based in the Pacific Northwest that specializes in early-stage companies, as well as Canadian VC group GrowthWorks, a Canadian fund called Yaletown Venture Partners that focuses on Western Canada, and a Calgary-based early-stage fund called Springbank TechVentures (started by one of the early investors in MetroNet, which was sold to AT&T in 1999 for $7-billion).

Pixpo’s software — a modified version of “peer-to-peer” software — allows computer users to share their photos, music, video and other media without having to upload it all to some external site such as YouTube.com or Flickr.com. Instead, the user just leaves the photos or music or videos where they are, and gives outside Web surfers access to those files on the PC, while keeping that access secure enough that the user doesn’t have to worry about hackers messing around with other files.

Hosting all the files on your home PC can pose its own problems, however, including the strain that gets put on both the PC and your home Internet connection if your video clip of your cat falling into the bathtub happens to get linked on BoingBoing.net and millions of people try to access it at the same time. Mr. How says that Pixpo uses a combination of a modified P2P network and a hosted-server network so that if certain files become particularly popular, they can be cached or hosted on Pixpo’s own servers. He also said that in contrast to other streaming-media software such as Orb Networks, Pixpo is more flexible, faster and provides a better quality video feed.

I originally wrote this for the Globe and Mail — and Mark even linked to it, which I thought was quite nice of him — but I thought I would reproduce it here for people who might not get to the Globe that often. For you tech-savvy blog readers out there, please ignore the dumbed-down parts designed for non tech-savvy newspaper readers 🙂

The bare-knuckle bout for VoIP supremacy is still in the opening round, but Skype has thrown what could be a haymaker punch. The voice-over-Internet pioneer that eBay acquired from founder Niklas Zennstrom last year for a mind-boggling $2.4-billion (U.S.) – and up to $4.1-billion if Skype meets certain performance targets – is now allowing users to make VoIP calls from their computers to any landline number for free.

The freebie for what the company calls “SkypeOut” calls is only a short-term offer, however. It expires at the end of the year, and is clearly designed to suck new users into the Skype vortex. But is it a smart move by eBay to build a customer base and take on Vonage, or a desperate move to justify that multibillion-dollar cheque it cut?

Skype said in its release that “completely free calling in the U.S. and Canada will expand Skype’s increasing penetration in North America and solidify Skype’s position as the Internet’s voice communication tool of choice.” And there are those who believe it will make the service – which is based on P2P or “peer-to-peer” technology originally developed for the Kazaa file-sharing network – a lot more appealing to non-geeks, since the previous free VoIP service only included PC-to-PC calls.

Continue reading “Skype lands a blow in VoIP battle”

Well, mesh is a wrap, as the TV folks like to say, after a few months of brain-storming and occasional head-pounding, and an awful lot of hard work by a lot of people — particularly Sheri and her team of miracle workers at MCC planners — not to mention a lot of patience on the part of the “significant others,” i.e. my wife Rebecca, Stuart’s wife Anna, Rob’s wife Victoria and Mark’s wife Pamela, who didn’t even blink when we effectively took on second (or third) jobs putting this crazy thing together.

As Rob has mentioned, it was really an amazing and gratifying thing for us — five guys with absolutely no experience at this kind of thing whatsoever — to get the kind of comments we did from people as they came out of the various panels, or left at the end of the day. I lost count of the number of people who told me that it was one of the best conferences they had ever been to, or thanked us for putting it on in Toronto and getting people fired up about Web 2.0, or said that they really enjoyed the lack of eye-glazing PowerPoints and the focus on conversation and discussion.

That is exactly what we were shooting for, and it sounds like we achieved it. And more than anything else, the part that I enjoyed the most was watching people connecting in the atrium during lunch or the networking breaks, or at the cocktail social upstairs after the first day, or at The Drake later that night. Lots of fascinating discussions with Andrew Baron from Rocketboom.com, the incomparable Om Malik, my pal and Ottawa Valley homeboy Paul Kedrosky, Matt Mullenweg and Chris Messina and a whole pile of other amazing speakers. They were the stars, and we were just the roadies.

If you want to check out some of the spinoff effects from mesh, there are several hundred photos already at Flickr.com tagged “mesh06,” and I haven’t even uploaded my hundred or so yet (there’s also the mesh pool). And plenty of people have been live-blogging along the way, including my buddy Scott Karp from Publishing 2.0, who has a gigantic synopsis of the conference that is truly a sight to behold. Tris Hussey of Qumana also has some here, and so does John Ounpuu, and Sacha Chua — who also volunteered at the conference, and even handled a bunch of the IRC backchannel that got running on day two (thanks, Sacha) — has a bunch as well. And Connie Crosby did some, and so did Lieutenant Dan. Mark even managed to work in a couple of podcasts.

What can I say? Awesome couple of days. And more than anything else, I’d like to thank Mark and Stuart and Rob and Mike for making it possible. You guys rock.

Still a couple of panels and workshops left to go at meshconference.com, but we can see the finish line approaching after what seems like a nine-week marathon run, and the worst part about it is that everyone seems to be having such a great time we don’t want it to come to an end — but unfortunately they’re going to kick us out at some point, or charge us more money 🙂 We’ve had some great discussions this morning, including the keynote with Stuart MacDonald and Steve Rubel — Tris Hussey of Qumana posted about that here — and I had a one-on-one with my friend Paul Kedrosky, in which he talked about Maxthon, the front-end to Internet Explorer, getting millions of dollars in financing, which he argued (and I agreed) was stupid, bordering on insane.

There were also some great panels with Stuart and Jim Coudal of Coudal Partners, Jonathan Ehrlich of Chapters Online and Bruce Philp of GWP Brandengineeering; Mark talking with Rick Segal of J.L. Albright and Jason Fried of 37signals.com; Leila Boujnane of Idee Inc. talking with Albert Lai of Bubbleshare.com, Mike McDerment of FreshBooks and Malgosia Green of Nuvvo.com — a panel that was all about what mistakes they had made, and what they learned from them — and some really interesting workshops, including one with Tony Chapman of Capital C, which was blogged about here. And to finish off the day we had Matt Mullenweg of WordPress.com and Stowe Boyd and Chris Messina (ex of Flock.com) talking about software and Web 2.0.

A long journey, but definitely worth it — and gigantic thanks are due not just to the sponsors, and MaRS and the MCC gang who helped keep us from tearing our hair out, but to the audience and participants, and most of all to people like Jason and Rick and Matt and Tara and Paul and Scott and, well, too many to name. A fantastic mesh experience.

Just a quick post, on the morning of the second day of mesh in Toronto, to say what an amazing day we had down at MaRS, with keynotes from Om Malik and Michael Geist — both of whom have been getting rave reviews for the ideas they generated, at least from the people I talked to — and then panels involving the politics and media streams, including the ones I was involved in on the future of newspapers and whether bloggers are journalists.

We got a great discussion going in the latter panel with Om Malik and Michael Tippett from NowPublic.com, as well as my friend Scott Karp from Publishing 2.0 — and I’d like to thank all of them again for coming. The mark of a great panel for me is when I find myself wishing it could have gone on longer because we were getting such a great debate going, and I certainly felt that — and others who attended told me they did too.

There was plenty of discussion going on at the mesh breaks and the cocktail social after the day’s events too, which was really nice to see, and at The Drake there was much meshing going on as well. That’s a big part of what we were hoping to achieve with the conference — just getting people who are excited by and interested in Web 2.0 into a room so they could throw ideas around and talk about some of the things that are going on. Plenty of people made use of the “unconference room,” which was fantastic, and a couple of the workshops I saw were also packed.

Thanks again to Sheri and everyone at MCC for all the work they’ve done to keep us organized and make things really hum, and to all the volunteers as well. Mark has also done a shout-out on his blog — and thanks to everyone who asked all those great questions.

Now on to day two of mesh!

Just a quick post, on the morning of the second day of mesh in Toronto, to say what an amazing day we had down at MaRS, with keynotes from Om Malik and Michael Geist — both of whom have been getting rave reviews for the ideas they generated, at least from the people I talked to — and then panels involving the politics and media streams, including the ones I was involved in on the future of newspapers and whether bloggers are journalists. We got a great discussion going in the latter panel with Om Malik and Michael Tippett from NowPublic.com, as well as my friend Scott Karp from Publishing 2.0 — and I’d like to thank all of them again for coming. The mark of a great panel for me is when I find myself wishing it could have gone on longer because we were getting such a great debate going, and I certainly felt that — and others who attendedtold me they did too.

There was plenty of discussion going on at the mesh breaks and the cocktail social after the day’s events too, which was really nice to see, and at The Drake there was much meshing going on as well. That’s a big part of what we were hoping to achieve with mesh — just getting people who are excited by and interested in Web 2.0 into a room so they could throw ideas around and talk about some of the things that are going on. And thanks again to Sheri and everyone at MCC for all the work they’ve done to keep us organized and make things really hum, and to all the volunteers as well. Mark has also done a shout-out on his blog — and thanks to everyone who asked all those great questions.

Now on to day two of mesh!