Facebook blocks Google, for your own good

The “whose data is it anyway” wars seem to have flared up again, judging by what’s going on with Google and Facebook over the data-sharing issue: Facebook has blocked Google’s new Google Connect feature from pulling your “social graph” data out of Facebook. But it’s not because Facebook recently launched a competing feature called Friend Connect, of course — why would you think that? No, it’s because Facebook is concerned about protecting your privacy.

As Mike Arrington notes in another post, this is a pretty flimsy argument at best. Facebook says that it’s worried that the information about you and your profile will somehow go astray during its journey through Google’s connect feature to some third-party site, and that you can’t disconnect that third-party site from within Facebook — which is true. But Google notes that it gives Google Connect users complete control over which sites see their info, so that isn’t a problem.

Robert Scoble has a post up that seems to argue that Facebook is right and Mike is wrong — a debate that continues in the comments on Arrington’s post — but to be honest I lost track of what Scoble’s argument actually was somewhere in there. To me it seems obvious that I should have the ability to move data that is attached to my profile (photos, phone numbers, addresses, emails, etc.) to some other site — in a way that didn’t involve screen-scraping.

If those sites were connected somehow so that the data could be updated in both places at once, so much the better. I don’t particularly care whether it’s Google’s OpenSocial or Google’s Connect, or Facebook’s Friend Connect, or whatever the hell MySpace’s thing is called — or whether it’s through some agreed-upon standard that everyone adheres to, like RSS or HTML. It seems obvious that while everyone is saying they want to be open, they still want to control my data. Umair Haque says it’s more proof that Facebook is fundamentally evil.

What is Mark Mahaney smoking?

Whatever it is, I would like some. According to Henry Blodget, the Citigroup analyst seems to think that Amazon will be selling $750-million worth of its Kindle e-book readers within two years. What actual data is this analysis based on, you ask? Absolutely none whatsoever, as Kevin Maney points out at Portfolio, since the company has refused to give any details about Kindle sales. In other words, it’s just a bald-ass guess. And as far as I can tell, it’s a howler.

As Henry himself knows all too well, making outlandish claims about what stocks and/or products will do in the future can get you noticed pretty quickly — so maybe that’s what Mark is after here. Or maybe it’s a kind of thought experiment, in which you run some theoretical numbers in order to get a rough sense of what might happen. In any case, while Henry seems to think Mahaney’s estimates are reasonable and even likely in some cases, the whole thing seems off base to me.

The Citigroup analyst figures that Amazon will see the same kind of sales growth for its e-book readers as Apple saw for its iPods, but will only sell about half as many. That seems hugely inflated. Like Mahaney, I have absolutely no figures to back me up, but I would guess that the market for e-book readers is less than one-tenth the size of the market for portable music players, perhaps even smaller. And the idea that users will buy a book a month just seems insane. And there’s also the Apple factor, as Rex and others have pointed out.

The only aspect that Henry seems to agree is “optimistic” is the idea that Amazon will make the same kind of revenue from e-books as it does from printed books. As Blodget notes, that doesn’t seem likely to happen anytime soon — since publishers will need to be convinced to sell them, and readers will need to be convinced to buy them, and that means they need to be cheap — and may never happen at all. I don’t know what Mark Mahaney was trying to do with his Kindle analysis, but if he was trying to make a credible argument, he failed.

CBS and CNET: Vision, or desperation?

So CBS — an “old” media giant that hasn’t been doing so well lately — plunks down $1.8-billion for CNET, a “new” media giant that hasn’t been doing so well lately. Does this sound like something to get excited about? Not to me. In fact, it sounds a little like desperation on both sides — CNET to get a deal done that would get it out of the clutches of some disgruntled shareholders, and CBS to get some kind of coherent online strategy going in the ninth inning. Some others seem to disagree, however. In fact, it’s interesting to see the polarized opinion on the deal when you look at some of the opinion out there.

Fred Wilson of A VC probably came closest to my thoughts on it when he sent a Twitter message right after the news broke, and said that he didn’t really care about the deal because it was “all about yesterday, not tomorrow.” Mike Arrington, who has been a relentless critic of CNET — and even wrote a post about how some of the top blogs should get together and destroy it — says that:

“CNET failed to disrupt the old guard, and will find itself to be a footnote in Internet history rather than the headline it should have been.”

Others seem to think the deal makes tremendous sense: Marshall Kirkpatrick at Read/Write Web says that CNET is “as stable an online collection of brands as anyone out there” and that:

“What gets validated here is this: great online ad sales, high production value, serious talent, company maturity and breadth in both content and distribution.”

Paul Kafka at Silicon Alley Insider is another fan, saying that while “there’s almost no synergy, operationally or brand-wise” between the two companies, and CBS doesn’t have much of a digital platform:

“That’s as good an argument for making the deal as any — rather than trying to build your way on to the Web, why not buy it? And if the JANA guys are right, CNET isn’t a dying asset — it’s just one that needs to be revitalized.”

In a comment on Kafka’s post, Henry Blodget says:

“I actually think it’s smart. CBS is a dying business with strong cash flow–it’s about time they used it to make some big bets. More importantly, there ought to be a lot of ways these companies can work together. The size is far more manageable than AOL – Time Warner, the cultures are more compatible, etc. Strikes me as a bold but sound bet.”

So why would I say it feels like desperation? As Megan Barnett at Portfolio mag points out, CNET hardly fits the profile of what CBS said it was after when Les Moonves said that it was looking for “the next YouTube.” CNET isn’t even the last YouTube. It’s a pile of underwhelming assets that mostly make money because they aggregate eyeballs and have some good domain names. To me it feels like CBS just decided to buy something big and to hell with whether it made any sense or not.

I think Doug Macintyre at 24/7 Wall St does a good job of laying out why this is a bad deal, one that he says could be “the worst M&A deal of the year.” He says that “the high price CBS is paying borders on being irresponsible” given the kind of condition CNET is in, and that when it comes to financial performance, CBS “is almost as bad off as CNET, but on a larger scale.” Bingo. Nice job, Quincy.

Video comments: Actually not so bad

So Disqus has enabled support for video comments from Seesmic, which launched the feature on TechCrunch awhile back. Even Fred Wilson of A VC — who is an investor in Disqus — admits in his post that he isn’t sure about whether video comments work or not. And there are lots of people who are pretty sure that they don’t work, because you can’t scan them as easily as you can text, because they clutter up a blog and make it slow to load, and so on. And I must admit that when TechCrunch first launched them, I wasn’t too crazy about the idea either.

As I’ve said before on several occasions, I’m not really a video guy. I don’t think it adds that much to have video, unless (as Scoble notes in Fred’s comment section) you are showing someone something that relies on the visual element, like a new gadget or a new baby. But when I wrote my earlier post on the topic, I was mostly talking about video blogs — the ones that are exclusively video. Unless you’re Loren Feldman of 1938media (and let’s face it, who is?) that kind of thing reminds me of the Seinfeld episode when Kramer bought an old talk-show set and turned his living room into a fake talk show, but no one would go on.

That said, I’m actually thinking that video comments aren’t such a bad idea (some people continue to disagree). I don’t want everyone to use them, and I don’t want all the comments on a blog to be video — but in some cases it’s kind of fun to see Mike Arrington talking about Wired magazine, or to see Fred in person chatting into his web-cam. It is much more personal (which is why some people will probably never do it). But I actually don’t think it’s that bad. I think it adds a little variety — and if you don’t want to watch them, then you don’t have to. For an alternate (and hilarious) view, see this overview by Scrivs at Expert Idiot.

Arrington and Wired: Keyboards at dawn

I know everyone is tsk-tsk-ing and waggling their forefingers disapprovingly at Mike Arrington for his response to Wired magazine’s drive-by blog attack on TechCrunch and its Washington Post partnership, but I for one am quite enjoying it. I actually thought Mike was pretty restrained in his latest post — and for what it’s worth, I took his Twitter message saying “eff you” to Wired as largely a joke (and apparently one fueled by drinks at the Time 100 party).

For whatever reason, Betsy Schiffman (who as far as I can tell used to be a Forbes real estate writer, and before that was at Associated Press) either has a grudge of some kind or has been implicitly or explicitly told to go after TechCrunch. I mean, come on: a “Butt Munch” category? As far as I can tell, the category applies specifically to Arrington — and Dylan Tweney of Epicenter has effectively confirmed that.

In any case, the Washington Post thing was totally offside, especially since Epicenter is clearly a competitor to TechCrunch. In my view, it was a mean-spirited jab, and I don’t blame Mike for responding the way he did. As far as I can tell, opinion seems split on whether it’s Mike’s fault for escalating things or whether Wired was in the wrong — and some people seem to be voting for both.

The “Twitter ain’t all that” backlash

In the wake of blog posts and news articles about the use of Twitter during the earthquake in China (including one by me), there has been a fairly predictable backlash response — about how Twitter is just one of many tools that people can use to stay updated on news events, that it gets more attention because the “digerati” are enamored with it, and that the praise for Twitter is largely overdone. You can see aspects of these arguments in comments from Eric Rice on my post (as well as here), and in a recent post by Kaiser Kuo of Ogilvy’s Digital Watch.

All of these criticisms have some validity to them. Plenty of people have stayed informed about the Virginia Tech shootings or the tsunamis in Indonesia or similar events by using cellphone text messages, Facebook posts, Wikipedia entries and even the good old radio. I don’t think anyone is saying — as Kaiser puts it at the end of his post — that this episode saw Twitter “drive a nail in the coffin of traditional media.” If anyone is saying that, then they are stupid or being inflammatory. The point is not that anything is driving a nail into something else; it’s that new tools are emerging that can be used to some benefit.

No one is suggesting that Twitter replace the emergency broadcast system, or that Twitterers should be thought of in the same breath as “first responders” such as search & rescue personnel, which is what Eric seems concerned about. That’s ridiculous. But why shouldn’t we talk about how Twitter can be used to get information out about disasters? Kaiser Kuo himself spends much of his post talking about how Twitter “proved very useful as a means of quickly disseminating information gleaned from the mainstream media on the scene,” and how the broadcast nature of the service “made it better than simple IM.”

That’s the point, not whether Twitter is better than something else, or replacing something else, or the best thing ever.

Hey Jerry: Welcome to the big-time

“Smokey, my friend, you are entering a world of pain.” — John Goodman as Walter Sobchak, in The Big Lebowski

Yahoo CEO Jerry Yang might be feeling pretty good about winning Round One with Microsoft CEO Steve Ballmer, the former basketball coach with the Young Frankenstein-style features and the pit-bull reputation. Unfortunately for Jerry, however, this appears to be a tag-team match, and Steve may have unwittingly tagged in The Terminator, otherwise known as Carl Icahn — a guy who was waging all-out proxy wars when Jerry Yang and David Filo were still shoving quarters into the Space Invaders machine down at the local video-game parlor.

According to several reports, including one in the Wall Street Journal, Carl has acquired about 50 million shares or so of the Internet giant, and may be planning to start a proxy battle so that he can shove Yahoo into the arms of Microsoft and get a nice pop for his trouble. That kind of thing is like falling off a log for Carl, a guy who helped define the term “corporate raider” and has gone after companies like RJR Nabisco, Texaco, Time Warner and Motorola. Carl has taken over companies — or been bought out by companies — in between lunch and dinner.

Ballmer apparently gave up on Yahoo in part because he was afraid of a proxy war, and/or was concerned that the company might do a deal with Google or otherwise muddy the waters and make it harder to establish a value for the company that Microsoft could live with. For Icahn, that kind of thing is like chum in the water — it means that there is something bleeding nearby, something vulnerable, something worth taking a run at. In other words, just the kind of scenario that my friend Kara Swisher describes so vividly in her post. If Jerry thought that Microsoft was his biggest problem, he may have another think coming.

Craigslist returns fire in eBay suit

After being hit with an eBay legal missile last month, Craigslist has responded with a projectile of its own: the company has filed a countersuit accusing the online auction company — which owns a 25-per-cent stake in Craigslist — with “unlawful and unfair competition, misappropriation of proprietary information, deceptive passing-off, business interference, false advertising, phishing attacks, free-riding, trademark infringement, trademark dilution, and breaches of fiduciary duty.” According to the blog post by CEO Jim Buckmaster:

“We respectfully ask the Superior Court in San Francisco to enjoin this conduct and order eBay to (1) make full restitution to craigslist, (2) disgorge their related profits (3) restore to craigslist all shares of the company acquired by means of, or for the purpose of unfair competition, and (4) pay punitive damages for their malicious behavior.”

As you may recall, eBay sued Craigslist last month alleging a variety of behaviour on the part of co-founders — and controlling shareholders — Craig Newmark and Jim Buckmaster, including the issuance of shares that diluted eBay’s stake below the 25-per-cent mark, as well as the creation of an even more dilutive “shareholder rights” agreement, otherwise known as a “poison pill” that had the effect of making it impossible for eBay to sell its stake to anyone other than Craig and/or Jim. Craigslist later made the statement public.

They’ve now done the same thing with their countersuit by posting the entire thing online. Among other things, the suit alleges that eBay tried twice to put executives from its Kijiji unit — which now competes head-to-head with Craigslist in the U.S. — on the board of the classified site. The lawsuit also says that eBay “has used Craigslist’s mark and name in commerce to confuse the public and illegally divert Internet traffic from Craigslist to eBay and its Kijiji site,” which appears to involve the buying of Google ads that linked to the eBay site but used Craigslist’s name.

The bulk of the suit seems concerned with what Craigslist says is eBay’s desire to gain access to “proprietary competitive information” to help Kijiji. My friend and fellow mesh organizer Rob Hyndman, a lawyer who specializes in technology startups, says that the lawsuit seems to be an attempt by Craigslist to “accomplish by litigation what it failed to accomplish by business planning and sensible precautions.”

mesh 2008: We are sold out

Just a quick note to announce that if you were hoping to get a ticket to mesh ’08 next week in Toronto, you waited too long. We are officially sold out. If you’re still looking to attend meshU, however — the one-day workshop series focused on Web development and design that takes place the day before mesh — there are still some tickets available, although they are going quickly. You can register here, and there are more details at the meshU site. And even if you can’t come to the conference, you are still more than welcome to attend the mesh party, which is on Wednesday night and is being held at the Rockwood Club.

Cambrian House: Failure or evolution?

Erick Schonfeld put up a post at TechCrunch last night about Cambrian House — the Calgary-based crowdsourcing software company — and how it was heading for the dead pool after failing to raise financing and being forced into a “fire sale” of its intellectual property and other assets. Since I know co-founder and CEO Michael Sikorsky, having interviewed him a few times (he was also on a panel at the mesh conference last year), I thought I would give him a chance to respond before jumping on the “Cambrian House is dead” bandwagon. According to Erick’s description in the TC post, what happened is that:

“After unsuccessfully trying to raise a new round of capital, it is our understanding that the startup has negotiated a fire sale of its intellectual property, assets, Website (and whatever community remains after the sale) to Spencer Trask, an old money, New York venture firm.”

Erick goes on to say that the Cambrian deal started with talk of an investment, then devolved into a simple asset sale. He adds that Spencer Trask is “basically buying the Cambrian House platform and its community for a fraction of the $7.75 million that investors have already put into the company” and plans on taking the assets and rolling them into VenCorps.com, a startup that is planning to take a crowdsourcing approach to venture capital, and that Toronto venture consultant Sean Wise will run VenCorps and “whatever is left of Cambrian House.”

The story Michael tells — which he has also put in a comment on TechCrunch — is different in several key ways: For one thing, he says Cambrian was able to raise money, and that the company turned down Spencer Trask’s original offer, not the other way around (as far as I can tell, Spencer Trask also isn’t related to the financier who backed Thomas Edison, although the company says it was “inspired” by him). He also says that Cambrian hasn’t sold any of its intellectual property, and will continue to develop the assets that it has, including several of the ventures that came out of the Cambrian fold.

At the same time, however, the Cambrian CEO admits that “our model failed,” in the sense that while Cambrian came up with lots of good ideas, there wasn’t enough follow-through in terms of developing them and turning them into companies or products, primarily because the crowd never stepped forward to do the developing. That’s the idea behind hooking up with Spencer Trask and Vencorps, he says — so that the venture company can locate willing entrepreneurs and match them up with worthwhile ideas, or at least that’s the theory.

Does this mean that crowdsourcing startup ideas doesn’t work? I don’t think so — but it shows that simply coming up with good ideas isn’t always enough. Someone has to execute them.


I got some more responses from Michael in an email, so I thought I would add them. Aidan Henry has also posted on Cambrian, as have others.

Q. There has been an asset sale to Vencorps/Spencer Trask of some of Cambrian’s assets?
A. YES. In particular: we sold a specific instance of our platform targeted exclusively at the Venture Capital industry.

Q. But not the IP or the existing community?
A. YES. However, we are encouraging our community to move to VenCorps because it represents the next iteration of the model. And, we obviously have a vested interest in it.

Q. And the idea is that Vencorps can better find teams to follow through on some of the ideas that the CH model brings forward?
A. YES. By evolving the model to VenCorps we accomplished the following: a) a scrub of our CH brand. a lot of people found it hard to type, hated the vikings, etc. b) no ideas without teams will be funded.

Q. Does CH continue as a corporate entity and if so what does it do?
A. YES. CH INC. continues, almost looking more like a VC or a holding company – take your pick. We have our handful of portfolio companies to manage which all use crowdsourcing, and one of them, chaordix is all about licensing/selling crowdsourcing platforms.