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Catherine Holahan has a piece in Business Week about eBay and the decline of the company’s traditional auction business — or rather, the increasing growth of its non-auction “Buy It Now” business, which she says currently generates almost half of the company’s revenue. Nick Carr (always eager to pronounce something dead) asks whether eBay was “just a fad.” Some fad: eBay has a market cap of about $40-billion and year-over-year quarterly revenue growth of about 24 per cent. But it’s certainly worth asking whether its business model is evolving toward something non-auction based.

If anything was a fad, it was probably the idea that the eBay auction model could be applied to almost anything — that online auctions could solve virtually any problem, from disposing of human organs to getting rid of all your life’s possessions after a divorce. In that sense, eBay was seen as a giant hammer, and everything started looking like a nail. But it’s been known for some time that the auction model works for some things and doesn’t work for other things. And if you think about it, one of the main downsides to the auction model — as my friend Mark Evans notes — is that it can be a gigantic pain in the ass.

The auction — whether it’s the English style (used by Sotheby’s, etc.) or the Dutch style (known as a “reverse auction” because the price starts high and comes down) — is a method that is best used for goods that are scarce and for which there is plenty of demand, such as paintings by the Group of Seven or tulip bulbs in the 17th century. Some products on eBay might fall into that category, but certainly not every single one. And the other requirement for an auction model is time — something many prospective eBay buyers don’t have a lot of.

Does the increasing interest in the Buy It Now option mean the online auction is dead? Hardly. But not everything is a nail.

So Mixx — a Digg-like social news app — has been bragging to anyone who will listen that its traffic has doubled to a million uniques a month in May, and it is getting lots of love from its mainstream-media partners, including USA Today, Los Angeles Times, the New York Times, Reuters and Slate. But is a million uniques good or bad? That depends on who you ask (or whom, if you’re going to get all grammatical on me). Marshall Kirkpatrick at Read/Write Web isn’t impressed, since that’s a lot less than the 26 million uniques that Digg gets every month. Erick Schonfeld at TechCrunch seems a little more impressed, and Nick O’Neill over at the Social Times blog says that it’s nothing to sneeze at.

Nick has a point when he says that 200-per-cent growth in a single month is pretty impressive, although it’s worth noting that such growth rates aren’t unheard of when a site is coming from a small base. My ability to bench-press 350 pounds increased by 200 per cent last month as well, but that’s because I was able to do three of them instead of just one. Marshall’s point seems to be that Mixx should be seeing even more growth given some of the top-tier names that are adding Mixx links to their news stories. As the Washington Post notes, many of those connections come from Mixx founder Chris McGill’s former ties to Yahoo and USA Today (McGill has responded to Marshall’s post).

Drew Curtis, the founder of Fark, makes an interesting point in the Washington Post story: he says he doesn’t think social-news services such as Digg and Mixx are a great fit with mainstream media sites. “Most people don’t bother with them because they’re either lazy or they just don’t care,” he says. A little harsh, but pretty close to the truth, I would argue. Mixx may have no trouble attracting social-news junkies — although I find it cluttered and don’t see much in the way of community there (something Tony Hung mentions as well) — but will many of those come from the links at CNN or USA Today? I’m not so sure.

Some details of the back-and-forth between Microsoft and Yahoo have come to light as a result of the unsealing of documents in a shareholder lawsuit against the battered Internet giant, as Eric Savitz details at Tech Trader Daily. One of my favourite moments is where it emerges that Microsoft offered Yahoo a whopping $40 a share back in January of last year, but then CEO Terry Semel turned the deal down. Nice call, Terry — that’s right up there with taking a pass on buying Google in 2002. Of course, Terry still has most of his $71-million in options or whatever, so he’s probably doing OK. Other shareholders, not so much.

In a nutshell, the complaint argues that Yahoo co-founder and CEO Jerry Yang and the board of directors deliberately created blockades aimed at resisting Microsoft’s offer, rather than taking a deal that was clearly the best one available — and arguably fully valued as well. One of the big sources of criticism is the fact that Yahoo planned to sweeten its severance package system so as to create a giant poison pill, one that would have added billions in extra costs should Microsoft have been successful. Microsoft supremo Steve Ballmer cited similar fears as one of the main reasons he withdrew the takeover bid.

I don’t want to get into a whole song-and-dance about copyright and the merits of the “fair use” principle (for that, you can see this post and related posts), but I thought it was interesting to read about the response by cartoonist Jim Davis — creator of the Garfield comic strip and the associated merchandising empire — to a site called Garfield Minus Garfield, where panels from the original strip are posted with the central character removed. According to the New York Times story about the site, Davis thinks it is fascinating:

“Davis, the cartoonist who created “Garfield,” calls himself an occasional reader of the site, which he calls “fascinating.” He says he is flattered rather than peeved by the imitation. “Some of them really work, and some of them work better,” Mr. Davis said.

In fact, the Times goes on to say that the cartoonist, who has been drawing Garfield for about 30 years, found that the site (which was created by Dan Walsh of Dublin) prompted him to take a different look at his body of work. In a Washington Post piece from a couple of months ago, Davis thanked Walsh for doing what he did. Obviously, he has become a gazillionaire from Garfield and can afford to be magnanimous, but it’s still a refreshing response in an age where artists like Prince are sending out C&D letters by the boat-load trying to lock down their content and prevent anyone from altering or using it.

I don’t do this a lot, but I just thought I would point out for those who might be interested that the Globe and Mail — which happens to be my employer — has removed the pay wall that used to block access to a lot of the paper’s online content. All of the columnists are now free to all readers, as are the horoscope and the crossword puzzle (which, as most journalists know, are the features that most readers really want). As the announcement on the Globe’s home page describes it, this means that all of the paper’s columnists “can join the fray and add their talented voices to the freewheeling conversations of the Internet era.”

Why did the paper decide to drop the wall? Without going into too much detail, my understanding is that we did it for the same reason the New York Times did: while the Insider Edition (as we called it) made money for the paper, the number of subscribers who were opting to pay for that content wasn’t growing, or at least wasn’t growing quickly enough to make it a very attractive business. Eventually, I think, senior editors decided that we would be a lot better off opening the doors and allowing people to link to our pay-walled content.

I haven’t seen recent numbers, but within a few months of the NYT dropping its wall, traffic to the site appeared to have surged. Whether the Times has been able to monetize all of that new traffic — and thus make up for the lack of a pay wall — is something I don’t know. But at least now they have a chance to grow that instead of managing what had become a slow or no-growth business, and so do we (the Globe continues to have a subscription product online, now known as Globe Plus, which includes the finance site GlobeInvestorGold and an “e-Edition” of the paper; access to the archives will also still cost a fee).

It’s interesting to look at some of the more than 180 comments that have been posted on the story since it went up first thing this morning: while most are of the “thank God you finally saw the light” variety, there are some who are less than enthused. One commenter says:

“I’ve long since found online alternatives to the Globe’s old ‘insider’ features. You can’t shut us out for a few years and then expect us to come back just because it’s free. You’re not the only game in town, and you’re going to have to offer us something genuinely new and original to get us to come back on a regular basis.”

Some commenters wish that we would go even further.

The Twitter guys have been getting a lot of flak over the past few months (and rightly so, in many cases) for the unreliability of their app. But I think they should get some props for opening up and talking about what’s going on over there. Granted, this newfound desire to engage in dialogue (or damage control) should have come a lot earlier, at least in my opinion, but at least they are doing it now. They’ve even managed to foil Mike Arrington’s attempt to start a late-weekend bitchmeme by asking some rather pointed questions of the company.

Although they kind of dance around the specifics a little in their responses, Jack Dorsey and Biz Stone of Twitter seem to more or less confirm many of Mike’s suspicions about their architecture — they admit, for example, that the company is restructuring the way that the system functions, and have brought in some big brains in order to do so:

“We are currently taking a new approach to the way Twitter functions technically with the help of a recently enhanced staff of amazing systems engineers formerly of Google, IBM, and other high-profile technology companies added to our core team.”

I’m not a database guy or a system analyst, but it seems pretty obvious that the structure Twitter has isn’t capable of keeping up with the company’s growth, and may not have been designed properly in the first place to support what has become a gigantic multi-user chat service. In one of the posts on the Twitter dev blog, the company effectively admitted as much. Is that former chief technologist Blaine Cook’s fault? Who knows. But it has to change, and quickly, or Twitter could wind up losing much of the momentum is has gained so far (Michael Krigsman has some good advice on how to proceed).

I was talking with a friend of mine (who is a systems and database expert) about Twitter on the weekend, and he made the point that while startups shouldn’t try to forecast all the ways in which people might use their service — a point that Daniel Burka of Digg made during his recent design presentation at meshU — they still need to pick the right architecture early, or they will be in for a world of pain. In other words, remaining flexible is a good way to approach user-interface design, but not necessarily a good way to approach the design of the actual system structure that makes your service work.

This is one for the irony file, right up there with the news that Napster is trying to remake itself (a third time) as a no-DRM download service, about half a decade too late. It seems that Metallica — the band that, more than any other, became known for its opposition to Napster and everything that the Web stood for — just launched a new site called Mission Metallica, which offers fans all kinds of special features, including the ability to hear tracks from the new album before it comes out. The site was developed by Ethan Kaplan, the head of technology at Warner Brothers Records, and his team there.

Ethan, as some of you may recall, was one of the “keynote conversations” at mesh 2008 a couple of weeks ago, where I talked with him about the future of music and the Web — and he talked about the idea that music is no longer primarily about selling an artifact (i.e., a plastic disc) but is more about the experience (if you want to read more about mesh, including Ethan’s keynote, check the links here and also this post). Not long after leaving Toronto, Ethan said he was working on the launch of a really major site and a few days later the record company launched Mission Metallica, and Ethan posted a message to Twitter saying:

For those that read my keynote coverage: Mission Metallica is one of the things along the lines of “experience” vs. “artifact”

Fans who sign up for Mission Metallica (and presumably are added to some sort of mailing list) get access to a host of special features, including video of the band writing and recording the band’s ninth album — which is due out in the fall — as well as what are described as “riffs and excerpts” from the album, new and archived photos of the band in the studio, “unique live tracks,” commentary from the band members and the chance to win tickets and passes to every show. All of this is free, according to the release. As the band describes it in a post at Metallica.com, it is:

“our way to bring you in and share with you not only the writing and recording process that’s been taking place in the last 18 months, but also what’s ahead between now and when the record is in your hands. And instead of waiting and releasing some “making of the record” additional DVD in a bullshit deluxe package when the album comes out, we figured why not let you be part of it up front?”

If you sign up for the Platinum level membership, you get: early access to the album on midnight of the release date, with a CD or vinyl album, along with high-quality (320kbps) mp3 files of every track, as well as the ability to download video clips of entire live shows, contests and so on. The high-quality downloads can be bought for $11.99, the CD plus the downloads is $19.99, the downloads plus the Platinum package is $24.99 and the CD plus the downloads plus the Platinum features is $32.99. If that’s still not enough, you can get a limited-edition package of five LPs, along with the CD, the high-quality downloads, a special lithograph and the Platinum features — all for just $124.99.

This tiered approach is similar to that taken by Nine Inch Nails frontman and mastermind Trent Reznor, who offered his recent Ghosts I-IV album as a series of downloads-plus-CD packages, along with a deluxe boxed set that included a Blu-Ray DVD, a CD, autographed items and other features for $300. Reznor later said that he sold 2,500 of the special sets, pulling in about $750,000 — almost half of the total $1.6-million he made on the album. Take that, Radiohead.

So Twitter has been up and down more than a (insert not-safe-for-work metaphor here) over the past few months, senior technology managers have suddenly departed, and fingers of blame have been pointed at the service’s architecture, including the use of Ruby on Rails. But the real problem, it seems, is Robert Scoble. Well, maybe not Scoble specifically, but “super users” like him who have tens of thousands of followers and follow tens of thousands of people (Leo Laporte of This Week in Tech is another one). On the Twitter development blog, Alex Payne says:

“The events that hit our system the hardest are generally when “popular” users – that is, users with large numbers of followers and people they’re following – perform a number of actions in rapid succession.”

The Scobleizer isn’t taking all this well, however. On FriendFeed (which seems to be his new social network of choice), he says that Twitter blaming him is “bulls**t,” and that the service was having problems long before he came along with his thousands of friends:

FriendFeed is 1000 times more reliable. Twitter was going down before I even got popular on the service. Their architecture has always sucked and everyone knows it. They’ve never been able to get a handle on the quality of their service and now it looks like they are blaming their top users.

To be fair, the comments from Alex Payne don’t seem to be pointing the finger of blame. It sounds like a simple explanation of why the system goes down so much. Although he says Ruby isn’t to blame, it seems fairly obvious that the service’s architecture has had “scaling” problems, where handling hundreds of thousands of events ties it in knots. As MG Siegler notes in the VentureBeat post, Twitter has to effectively rebuild its system while it is still running — something that other companies have described as “repairing an airplane in mid-air.”

Maybe the $15-million that the company is said to have raised from Spark Capital and other venture funds will help with that task. So should Twitter limit the number of friends you can have, the way Facebook does? Some people seem to think they should.

There seems to be a theme developing around the topic of comments, whether they appear on a blog or on FriendFeed. It sort of started with a conversation about the ongoing issue of fragmentation — in which comments appear on blog posts but then also appear at FriendFeed (and in multiple places on FriendFeed, as commenters on my post noted). Then Hank Williams (no, not that Hank Williams) wrote a post about how comments might even be considered copyrightable content, and Josh Catone wrote one at Read/Write Web about comment ownership — at which point, Steven “Winextra” Hodson launched into one of his trademark rants about how comments are not content.

I’m going to have to disagree with Steven on this one, however, at least from a legal standpoint (although I am not a lawyer, and don’t even play one on TV). As some of the commenters on his post at FriendFeed note, comments on blogs meet many of the tests that would likely be required to qualify as copyrighted content. Whether anyone would be dumb enough — or stubborn enough — to actually pursue such a claim is a separate question, of course. Still, as Mark Trapp points out, most mainstream media sites have a “terms of use” policy that says you effectively allow the site to use your comments, which they wouldn’t have to do if they weren’t legally required to.

I think Steven’s point was more that comments shouldn’t be thought of as copyrighted content, and that they should function more like a conversation in a bar or on a street corner — and I would agree. Legally though, I’m pretty sure they would be considered published content, and are therefore “owned” by their creator, unless he or she gives up that right to the blog or service that hosts them. So could Robert Scoble sue Rob La Gesse for deleting his from FriendFeed?

Update:

Michael Beck points out (on FriendFeed) that these questions have come up before, and points to a discussion here, and also here and here. Meanwhile, Daniel Ha of Disqus — the comment aggregation system I use here — has drawn up a prototype for a “commenters’ bill of rights.”

We’ve all heard of some boneheaded moves on the part of the record industry when it comes to dealing with the rampant downloading of music. Take the Sony rootkit, for example, not to mention suing 12-year-olds and then wondering why the PR outcome is less than desirable. But I have to say that this incident really takes the cake. According to Jim Louderback of Revision3, the TV arm of the Digg empire, the company’s BitTorrent server was taken down by what amounts to a denial-of-service attack — an attack that appears to have come from MediaDefender, an “anti-piracy” company whose major clients are the global record companies, TV networks and Hollywood movie studios.

It’s actually even more devious than just that, however. According to a couple of execs at MediaDefender, the flood of SYN requests that overloaded the server came about because the anti-piracy group’s network was actually trying to reconnect to Torrent files that it had stored on the Revision3 server — without the company’s permission or knowledge. According to MediaDefender, the company was only trying to re-establish contact with its own files, which Revision3 had shut off access to. As Louderback describes it:

It’s as if McGruff the Crime Dog snuck into our basement, enlisted an army of cellar rats to eat up all of our cheese, and then burned the house down when we finally locked him out – instead of just knocking on the front door to tell us the window was open.

I know I said that this particular idiotic move takes the cake, but there’s plenty of cake to go around where MediaDefender is concerned. There’s the whole debacle involving Miivi, for example — a file-sharing network that was set up by MediaDefender as a kind of honey trap for P2P users, whose user info was then turned over to the RIAA and others. And speaking of turning data over to the authorities, Louderback says that the FBI is looking into MediaDefender’s use of what amounts to a DOS attack, something that is illegal in most states.

Nicholas Negroponte has the One Laptop Per Child effort, which is trying to give children in developing countries a stripped-down laptop to help improve literacy and access to technology (and according to some isn’t doing all that well). Toronto has its own version: a non-profit effort called Little Geeks. It is a charitable foundation aimed at getting refurbished computers (and in some cases donated Internet access) into the hands of kids in Toronto. According to Ben Lucier, who has been spearheading the campaign, on June 12th Little Geeks will be delivering 100 computers — loaded with Windows 2000 and Microsoft Office — to families with underprivileged children, and hopes to expand the program throughout Canada and even into other countries in the future. Props to Ben and the Little Geeks Foundation.

Matt Marshall over at VentureBeat is reporting that Glam Media — an advertising/content network focused on sites that appeal primarily to women — has turned down a $1.3-billion acquisition offer from an unnamed party. Like Caroline McCarthy at Webware, I assume that this offer likely came from an “old media” company such as CBS or possibly a large advertising player (Ash has some theories too). But seriously, $1.3-billion? And Duncan Riley at Inquisitr says this isn’t even that great an offer when you consider that Glam has gotten four rounds of financing totaling about $115-million.

There’s no question that the Glam Media story is an appealing one: the company says that it has more than 65 million unique visitors across its network — although as Mike Arrington has pointed out in the past, that figure is an aggregation of all the visitors who come to any of Glam’s partner sites. He also noted in that post that Glam owns a bunch of pure SEO plays such as free-beauty-tips.com and so on. In a previous VentureBeat story, one critic called Glam “Boo 2.0,” referring to the Bubble 1.0 shopping site — and Matt Marshall noted that half of Glam’s total pageviews came from a single site (MyYearbook.com).

Still, the network has grown at a fairly impressive rate, and counts some prominent sites like E Online as partners — and has just launched a fairly sophisticated video content/advertising system as well. According to PaidContent, the company gets a whopping $50 CPM on some of its video ads. But to turn down a $1.3-billion takeover offer? As Erick Schonfeld notes at TechCrunch, that’s almost 9 times estimated revenues and 33 times estimated profit. Either Glam’s financial backers have gotten greedy, or someone has been drinking an awful lot of Web 2.0 Kool-Aid.

The debate over fragmentation of blog comments has been around for awhile — I’ve written about it, and so have people like Louis Gray and MG Siegler and others — and I don’t think it’s going away any time soon. Some argue that having comments at places like FriendFeed (or Shyftr, or a number of other sites) isn’t really that big a deal, and that it’s no different than people discussing your blog post via email or some other place that you can’t see it. But Fred Wilson had an interesting take on it in one of his blog posts today, about a blog post by his brother Jackson: he said as far as he’s concerned, bloggers effectively get “paid” by people commenting on their posts:

So here’s the deal. Jackson instigated the conversation with that post. His reward is the comments it generates. That’s how bloggers get paid. And he’s not getting his due on this one.

I think that’s an interesting way of looking at it. Obviously, comments don’t actually pay bloggers for their posts (although the tip-jar model is pretty close). And I’m sure some bloggers would rather get paid with actual money. But I still think Fred is onto something — comments, and other interaction with readers, are one of the ways in which bloggers are rewarded for their effort, along with links from other bloggers, high ranking on sites like Techmeme, etc. It would be nice to think that the sheer joy of crafting an awesome blog post was enough, but some feedback is nice too, even if it’s not completely positive. (Note: For what it’s worth, I agree with Jackson — Mott the Hoople was awesome).

That’s why, like Fred, I am hopeful that comments in all kinds of places can be aggregated in more ways. I’ve got Disqus on my blog (as Fred does) and that helps — and now I have the FriendFeed plugin working as well, so any comments that appear there show up here as well. I don’t mind people commenting somewhere else, but I like the idea that I (or anyone else) can see them all in one place if I want to do that.

Steven Hodson thinks WordPress should buy Disqus, and Broadstuff has some thoughts too about what he calls “dis-aggregating the aggregators.” Allen Stern of Centernetworks has a video response. And Hutch Carpenter of I’m Not Actually a Geek thinks that fragmented conversations can actually be a good thing.

Hugh McLeod’s latest GapingVoid cartoon probably sums up what many Twitter users have been thinking of late. The service, which hasn’t exactly been known for its reliable uptime, has been effectively crippled for almost a week now, with no ability to page back through previous messages and no support for using it through instant messaging. For many Twitter users, including me, the inability to see previous messages makes the service effectively useless, since the only messages you see are the ones that happen to be there when you look at the site, or @ replies sent directly to you. Some people are giving up or considering it.

Mike Arrington and others have written that whether Twitter is up or down doesn’t really matter any more because people are addicted to the service, and therefore will put up with anything — but I’m starting to wonder about that, to be honest. And while I have said in the past (during the whole “FriendFeed is going to kill Twitter” hysteria) that Twitter and FriendFeed aren’t really competitors, I’m not so sure of that either any more. I see more and more people saying they are giving up on Twitter and moving their conversations to FriendFeed. Will they come back? Some think they will. Not really sure of that either.

Despite the headline on this post, I have nothing against Belgium as a country. I am a big fan of their waffles, for example, not to mention their chocolate — and Brueghels is pretty cool as well. Still, they are inescapably intertwined in my mind with one of the stupidest lawsuits I can think of in the “new media” sphere (and that includes Viacom’s lawsuit against YouTube): a Belgian media agency, Copiepresse — which represents some of the country’s French papers — is suing Google for linking to its content, and is asking for $77-million in damages. I am not making this up.

The lawsuit was filed in 2006, and Google lost the case in Belgium — as well as a subsequent appeal — and had to remove links to some Belgian newspaper content from its Google News index. At some point after that, it seemed as though the geniuses at Copiepresse realized how their “victory” was anything but, and talks between Google and the agency aimed at a settlement of some kind took place for awhile. Those talks have apparently fallen through and the group is now pressing forward with its suit, like someone who is determined to saw through the tree branch that they happen to be sitting on.

I know that some people are probably going to start arguing with me in the comments, so before you do, I encourage you to read up about the case — including some of my previous posts on the topic. As far as I can tell, Google’s use of excerpts from news stories meets (or should meet) every test of “fair use” imaginable — except perhaps in Belgium — especially since the company makes no money from advertising on Google News pages. On top of all that, linking enhances the value of newspaper content by exposing it to a broader audience. Belgium’s French newspapers should be thanking Google, not suing it.