Month: July 2006

Does one red paper clip equal a house? It does if you give it a year, and a lot of trades back and forth, and some word of mouth marketing that starts on the blogosphere and moves into the so-called “mainstream media.” Kyle MacDonald of Montreal, who decided in a moment of boredom to try and trade his way up from a red paper clip to a house, got his wish last week when the mayor of tiny Kipling, Saskatchewan offered him a house in return for a role in a movie with Corbin Bernson (a role that will go to the winner of an American Idol-style contest).

I like the red paper clip story for a bunch of reasons. For one thing, it’s just plain weird, and I like that. I also think there’s a lot of power in what some call “lateral thinking” or ideas that come out of the blue, like Kyle’s. And I think it’s an amazing testament to his own innate marketing ability that he was able to pull the thing off, and a testament to the power of blogs to “seed” ideas — even weird ones — that are in turn picked up by the regular old media.

But on a deeper level, as Kyle has also pointed out, the red paper clip idea is about what I like to call the theory of economic relativity. As Einstein reportedly said, relativity is easy to understand: put your hand on a hot stove for a minute and it seems like an hour, but sit beside a pretty girl for an hour and it seems like a minute. That’s relativity. And it affects our economic behaviour too. Is a walk-on role in a movie worth the same as a KISS snow globe? It is to Corbin Bernson, who has been in lots of movies but has a passion for collecting snow globes.

Now that he has his house, it will be interesting to see what Kyle does next. One of the first things he is doing is having what he’s calling the largest housewarming party in Saskatchewan — inviting anyone in the world who wants to come for a giant Labour Day party. If I wasn’t busy, I would think about going.

I can’t quite remember how I wound up there — I think I was following a thread through the blogosphere about Dave Winer’s brief set-to with Firefox developer Blake Ross at Gnomedex — but I came across Boris Mann’s blog a little while back, and he mentioned that one of the highlights of Gnomedex was a presentation by Ethan Kaplan, who blogs at a site called blackrimglasses.com. Ethan was talking about the music business and the Web, since he is the director of technology at Warner Brothers Records.

I’ve had a soft spot for blackrimglasses for awhile now, ever since Ethan (who I didn’t realize worked for Warner Bros.) wrote something I liked a lot about how to remake a newsroom. And what Warner Brothers has been doing with a band it represents called Head Automatica is at least as great a disruption of the traditional process as what Ethan proposed for newspapers. The result can be seen at headautomatica.com.

According to Boris, the site uses the “hall of fame” module for Drupal (a website publishing platform) to allow fans to effectively create the band’s website for it on the fly. There are the usual news releases from the band, and dates for tours, but there is also a user forum prominently displayed on the front page, a Digg.com-style news section that allows fans to vote stories that mention the band up or down, and sections for photos and videos.

All fans have to do is tag things they post to their blogs with HA and they are picked up automatically, and there are prizes that can be won for the best material. Very smart. And in case you’re interested, Head Automatica is quite listenable as well — sort of like early Elvis Costello mixed with some Strokes and maybe some Dandy Warhols.

I realize there are plenty of people out there who either don’t know or don’t care about the video-blog known as Rocketboom or the sordid tale of Amanda Congdon’s sudden departure as host — or who believe, like my friend Stuart, that the fuss over it is a sign that the Web 2.0 bubble is about to pop. But there must be plenty who do care, because the posts I’ve written about it over the past few days have produced traffic levels on this blog that are orders of magnitude larger than I have ever seen before. And not just from the U.S., but from Singapore, Italy, Great Britain, Germany, Israel and Finland.

But I’m not interested in writing about it because of the traffic (honest). I’m interested because as several people have pointed out, this is the kind of thing that happens all the time — creative differences between producer and host, controlling shareholder and employee, manager and talent, or however you want to describe it — but we hardly ever hear about it except in Variety magazine or years later in some tell-all book. Is it just sordid gossip and dirty-laundry airing? Maybe. But it’s also, as Jason Calacanis has noted, a hard-core lesson in how to handle a creative business, and a small startup, and it is all being played out in public.

To that end (and yes, also because it’s the weekend and I’m bored), I watched this video clip of Rocketboom founder Andrew Baron speaking here in Toronto at Eli Singer’s Casecamp, in which he spends almost half an hour talking about the events of the past few weeks, including the morning he woke up to find an email with a link to Amanda’s tearful farewell video.

For what it’s worth, he is not defensive at all, nor does he make Amanda out to be a bad person — but he does make it clear that she pulled the trigger and (as far as he is concerned) misrepresented what was happening behind the scenes. It’s also interesting to hear his thoughts about how to handle it — how he wanted to tell his side of the story right away but his sister told him not to, how he tried to come up with a plan to keep the show going, how he went through several different scenarios and which ones he rejected. Fascinating stuff.

Update:

Bryce Johnson of Chicken Test says he took the video down because Andrew asked him to, but he has since put it back up. I’m glad Andrew reconsidered, because I thought he told his side of the story in a very honest and engaging way. Oh yes — and if you feel the need to go back and relive some of those past shows with Amanda, they are here. And just to set the record straight, Andrew has also posted a brief note about his contributions to the show here.

Bloggers talk a lot about how they do it for the love or whatever, but at the same time there’s a lot of interest in how (or if) you can generate a little income from a blog. There’s Google’s AdSense, of course, which I run here on my blog mostly out of interest — since I think I’ve made a grand total of about $3.15 (U.S.) in the past month — and there are things like BlogAds.com and Text Link Ads, (those hyperlink ads that pretend to be links but are really ads inserted into the body of a blog post, which I despise with a passion bordering on the pathological) and AdBrite.com and Industry Brains and so on.

eBay is getting in on the action — or trying to — with its recently announced (okay, it was about a month ago) eBay AdContext program, which looks a lot like a fancier version of Google’s AdSense, and even has a Flash module, which would presumably work better with MySpace blogs. It links to auctions that are relevant to the context in your post, and the blogger gets a cut of any transactions. But will bloggers take to it? Some say they want to try it out, others say they aren’t so sure.

One of the most interesting solutions I’ve seen in awhile is called MeCommerce, from a company called Good Storm (and no, I have not been compensated for this post, in case any PayPerPost critics are reading this). The coolest thing about it is how it integrates into the sidebar of your blog, can be customized to fit into your theme, and allows readers to make a transaction without even leaving the widget, or your blog. Click on the item, fill in the details and away you go — and the whole thing is verified by VeriSign. There’s a good example on the blog of co-founder Marc Scheff (who also turns out to be a gifted artist).

Will MeCommerce take off? Hard to say. It’s an elegant solution, but the products it offers so far are relatively limited (books, CDs, DVDs and T-shirts). There’s some more info on it in the comments section of this TechCrunch post, and the Motley Fool wrote about it too.

Someone over at The Deal, a site that tracks venture capital activity, sent me their latest scoop: a move by Google to enter the health field in a major way is in the works (although as the site points out, “the product is in developmental stages now and there is no certainty that it will be launched”), with something codenamed Google Health Scrapbook. This would gogo well beyond the Google Co-op targeted search-functions that were revealed earlier this year.

According to The Deal, Google executives have already met with WebMD in New York to bring them in as a partner for the new service (with plans for other partners in the future), and the company has also been talking with Intuit, the software company, which has a program that lets users keep track of their medical expenses. The idea appears to be that users would be able to log in with their Google account information and do things such as adding a new medical provider, tracking their medical records or even paying their medical bills.

The Deal says that Google Health Scrapbook would also provide information about hospitals such as the frequency that a hospital performs a specific type of procedure. And the person in charge of the rollout appears to be Missy Krasner, a project manager who joined Google earlier this year and before that was a senior official in the U.S. Office of the National Coordinator for Health Information Technology.

Search results and even email might be one thing, but are consumers prepared to have a Web giant like Google track and maintain their entire health records? I think health information and tax data are the two hotspots for many people, and it’s a bit of a stretch to think that they would want to send all that over the Web just because Google says it’s going to add value to it somehow. It will be interesting to see how this one flies — or if it flies. More comment at Inside Google and Google Blogoscoped.

There are a number of themes going on in the Digg vs. New York Times discussion that has reared its head again. The latest trigger was numbers from Hitwise that tend to deflate the earlier “Digg is as big as the NYT” meme, which I wrote about here. While the Alexa figures from the original TechCrunch post tended to suggest that Digg’s traffic was getting close to that of the Times, the Hitwise numbers are far less impressive.

One of the obvious takeaways is that Alexa numbers are flawed in many respects, in part because they rely on users who have installed a toolbar, and other built-in biases. Rightly or wrongly, many Web watchers either take Alexa numbers with a huge shaker of salt, or dismiss them altogether. Is Hitwise.com better, or ComScore Media Metrix, or Neilsen/Net Ratings? I’m sure they all have their flaws — some because of the technology they use, some because they rely on what people say rather than what they actually do, and some because of the inherent difficulty of getting a handle on something like Web traffic.

One common reaction to the issue has been to scoff at the idea that something like Digg could take the place of the New York Times — and it’s quite reasonable to scoff at this idea, since no one in their right mind (including Kevin Rose and other Digg types, I would wager) would ever make such a ridiculous claim. My friend Rob Hyndman, who like me is a newspaper addict, is quite right that nothing will ever take the place of the New York Times.

But I also agree with my former old-media colleague Om Malik — that is is foolish to dismiss Digg as a toy that has no relevance whatsoever. Replace the NYT? No. Change it, and other traditional media? Already happening.

America Online — what a long, strange trip it’s been. One of the first to make the jump from the old bulletin board days to the new visual Web, back when Netscape was just a toy that Mark Andreesen came up with at university, America Online was like the Google of its time. Sure, it was annoying, and it blanketed the globe in free signup disks, but for many people just getting used to the Internet it was friendly and safe; the “You’ve got mail!” tagline became so famous it became a movie. Then AOL hit the peak — it effectively acquired one of the largest media companies in the world for hundreds of billions of dollars.

Since then, it’s been pretty much downhill all the way. The bubble burst within minutes of the Time Warner deal being signed, the market value of the two companies disappeared like a ghost in the night, and TW has spent the past few years trying desperately to figure out what the hell to do with AOL — as millions of people have deserted the once mighty service. According to the latest figures, more than 15 million people have signed off and never signed on again since 2001 (although AOL still has 18 million left). The company has taken down much of the “walled garden” approach that it became famous for, but it hasn’t helped all that much.

Now there are reports that Time Warner is considering radical surgery: namely, making all (or virtually all) of the service’s content free, with the hope that increased traffic and advertising-related strategies will compensate for the loss of revenue. But will it? That’s a multibillion-dollar question. According to one estimate, TW could be giving up in the range of $2-billion in revenue by going free. Can it make enough deals that bring in new dollars to fill that hole? Maybe the real question is whether the company has any real choice.

The only other option is to spin the thing off and hope someone else wants it (at one point, there was talk that founder Steve Case might), or watch it continue to shrink until someone puts a bullet in its head. More coverage in the Washington Post and Fortune magazine, which notes that there is already a company pursuing the strategy AOL has in mind — it’s called Yahoo.

It appears that the gloves are off in the battle for online-payment supremacy, one which pits Google’s new payment feature Google Checkout against PayPal, owned by auction giant eBay. According to a report on Thursday, eBay has added its competitor’s service to the list of payment networks that eBay sellers are not supposed to use (a list that also includes AnyPay.com, FastCash.com and MoneyGram.com).

According to eBay’s “Accepted Payments Policy” the company “wants to ensure that the marketplace offers buyers an array of safe, appropriate and convenient payment choices for the marketplace. As described in our safe buying guide, eBay strongly encourages sellers to offer payments through PayPal – PayPal is not only convenient to use, but it also offers buyers and sellers industry leading protection against fraud, chargebacks and theft of financial data.”

So is adding Google Checkout to the banned services list an anti-competitive act designed to favour its own in-house solution or is eBay just looking out for its sellers? The company says in its policy that “as new payment services arise, eBay will evaluate them to determine whether they are appropriate for the marketplace. Payment services that are not permitted on eBay may, in fact, be outstanding services for consumers in other contexts. eBay’s evaluation relates only to whether a particular service is appropriate for the eBay marketplace.”

The company says that it considers a number of factors when it approves a payment scheme, including whether it offers privacy and anti-fraud systems, whether it has a track record of providing safe and reliable services, and the background of the payment service. For its part, Google said that it has “a long history in billing and payments for AdWords and for premium services, such as Google Video.” And what services does the auction giant approve of, other than PayPal? Well, there’s Bidpay, Certapay, Checkfree and, yes — Canadian Tire money, believe it or not.

As I expected (or feared), the Rocketboom saga continues to deteriorate. First came the tearful farewell video from Amanda Congdon, the vivacious host and sometime swimwear model, saying she had to part company with Andrew Baron, the co-founder of the popular video-blog/online TV show. The implication was that she had been fired, because her partner owned 51 per cent of the company. Then came a response from Andrew — to me, as well as others, and on the Yahoo video-blogging group — that suggested he had been blind-sided by the video farewell, and that Amanda had wanted to move to L.A. to pursue her dreams.

The latest instalment came from Amanda in a lengthy discussion on her blog, in which she posted the contents of an email from Andrew discussing her plans, and interspersed his comments with her rebuttals (never a good sign). Despite the often repeated statements on both sides about how much each cares for the other and respects the other’s various talents, it is clear that there is a substantial amount of bad blood beneath the surface of this ongoing blogosphere drama (which has also been picked up by the Washington Post and Business Week). Amanda also suggests that Andrew is trying to take her 49-per-cent stake from her.

As Stowe Boyd notes, there are a number of useful lessons here — not the least of which is that the 51-49 ownership split is probably a bad idea for a startup, even between friends. My suspicion from Amanda’s lengthy post is that Andrew acted a lot like an owner and perhaps treated Amanda like the hired help, whereas Amanda clearly saw herself as a co-owner. There also appears to be another player, named Mario, who is an unknown quantity, but may have played a sort of Yoko Ono-type role. In the end, as Chartreuse points out, the battle between producer and talent is an age-old one, and it is rarely pretty.

Here’s hoping that Andrew and Amanda can both find a way out of this that allows them to keep their dignity, and to make the most of their respective talents. Rocketboom was a great thing in many ways, and it would be a shame to see it implode. Jason Calacanis, who has offered Amanda a job on her own terms, has some useful advice for talent-related startups.

An update to my previous post about Amanda Congdon, the popular star of the video-blog Rocketboom: As I mentioned, I sent an email to Andrew Baron, co-founder of Rocketboom, after the news broke that Amanda was leaving the show (Andrew was on a panel at our mesh conference in May) and he just sent a response in which he suggested that Amanda’s departure was partly her own doing — and also that he found out about it from the video clip on her blog.

According to Andrew, Amanda wanted to move to Los Angeles, but Andrew and the rest of the Rocketboom team wanted her to wait until they figured out how that would affect the show. “Amanda decided she was not able to stay in NYC any longer and informed me, the Rocketboom business and the rest of the team via her videoblog post this morning that she was moving on,” he said in his email to me.

“We wanted her to get to L.A. to pursue her personal opportunities as soon as possible, but her demand to move this week without waiting any longer, without a justification, and without an adequate proposal for a plan for how the show itself would work, we were unable to uproot Rocketboom from NYC at this time.”

Andrew said that he wishes Amanda well, and that while he is “nervous for the near term because this was an unexpected fork in the road,” he and the team are excited for the future. What that future will hold, Andrew didn’t say, but there seem to be a lot of people who felt Amanda was the main draw for Rocketboom — including Mike Arrington (who says that she *was* Rocketboom and that her leaving is “an unmitigated disaster for the show”) and a lot of commenters on Digg.

Andrew has also posted comments on the Yahoo videoblogging group. And Jason Calacanis of Weblogs Inc. (now AOL) has offered Amanda a job at Netscape.

Update:

Amanda has posted a lengthy response to Andrew’s version of events, in which she says that the move to L.A. was always in the plan, and that Andrew reneged on their deal and is trying to take her stake in Rocketboom away from her. This one could get worse before it gets better.

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