Recombinant Web

Dan Farber writes:

A story on ZDNet today by Martin LaMonica connected me back to that BW story, compelling me to add another technology to the list: the recombinant Web. Martin refers to what I'm calling the recombinant Web (I'm probably not the first to utter the phrase) as Web mash-ups in his story. It's not exactly the same as the music-related definition of mashing together a few pre-existing songs into something new, but it has the same flavor. Sometimes referred to as Web 2.0 (and there is debate in the blog echochamber about that name), the recombinant Web, Web mash-ups, Web 2.0 or just the next phase of Web evolution heralds the use of the Web as a platform for creating new kinds of user experiences and businesses. Jon Udell calls it remixable Web applications. Martin gives the example of Cheap Gas, which mashes GoogleMaps and GasBuddy together to locate gas stations with the lowest prices.

Content and Conversation

Jeff Jarvis writes:

Distribution is not king.

Content is not king.

Conversation is the kingdom.

The war is over and the army that wasn’t even fighting — the army of all of us, the ones who weren’t in charge, the ones without the arms — won. The big guys who owned the big guns still don’t know it. But they lost.

In our media 2.0, web 2.0, post-media, post-scarcity, small-is-the-new-big, open-source, gift-economy world of the empowered and connected individual, the value is no longer in maintaining an exclusive hold on things. The value is no longer in owning content or distribution.

The value is in relationships. The value is in trust.

Meeting The Numbers

Brad Feld writes:

I’ve been involved in over 100 startups at this point and have seen many more. I can only remember a few instances where the company exceeded its revenue numbers in its first year of product ship. Many companies make their expense, EBITDA, and cash forecasts by adjusting spending, but that’s fundamentally different than making the top line and the bottom line numbers early in the life of the business (again – let’s focus on year 1 of product ship – not after the company has had several years of products in the market.) I’ve found that for year 1, the correlation between the sales plan and reality is completely random.

As a result, I generally take a different approach to year 1 of sales / revenue. Rather than hold a company to a revenue plan in year 1, I try to focus on the cash spend in year 1 (Fred highlights cash flow as the “ultimate measure” – and focusing on managing the negative cash flow is equally effective as managing the positive cash flow.) An early stage company needs to spend a certain amount to make progress, but managing the expense line should be straightforward. As revenue comes in (especially high gross margin revenue), it becomes easy to step up the spending, especially on variable cost (more demand generation) or highly leveraged items (more sales people) that impact future sales.

Hunch Engine

David Weinberger writes: "Eric Bonabeau, of Icosystem, says that there's much in life we recognize without being able to explain why. He says we're great at detecting patterns but terrible at exploring alternatives. Let computers search and the humans do the evaluation. The computer then generates new alternatives reflecting the humans' choices. He gives examples from car companies creating new designs, pharmaceuticals generating new drugs, etc. He also shows live demos of interaction with flickr and then Amazon: Select the closest results from a search and it generates returns that are closer and closer to what you want. E.g., if you select the Eiffel Tower photos that get returned from a search for Paris, it starts showing you more photos with the Tower. (It's working on tags, not on the images.)...He ends with the question: Can this become a consumer application? Is it a new way of browsing?"

Mobility Future

Sadagopan points to Antoine Wright who writes:

It is a forgone conclusion now that computer buyers are more likely to purchase a notebook than a desktop. And for many corporate types, a BlackBerry or Treo has become their main tether to the office community. Therefore, seeing the advancing state of wireless acceptance is something that we will see more often in the workplace, and even public places. It's true that in many major cities, and increasingly so in smaller ones, you can walk into places like coffee shops, restaurants and libraries and be treated to a free (or low cost) wireless Hotspot. My guess is within 2 years wireless standards such as 802.11n and WiMax will enable these connections to happen over a larger area, and even eliminate Internet inaccessibility in some areas.

Wireless technologies will continue to compete for your wallet and air space...In terms of devices, the competitive wireless landscape will push fringe devices to the lower rungs of usage (meaning non-connected PDAs, phones that cannot access the Internet and act as a modem, and notebooks/tablets that have only limited versions of WiFi). We have seen, and will continue to see PDAs morph into handheld connected terminals (GPS and VoIP probably being the next main features). Notebooks will continue to get smaller, and convertible TabletPCs may take a larger slice of the traditional notebook market share

TECH TALK: Internet Tea Leaves: China Internet Potential

A Bloomberg commentary in the International Herald Tribune lays out the challenges for the Alibaba-Yahoo combo:

The question is whether Yahoo can overtake eBay, China's leading online auctioneer, and win more search-engine customers in the second-biggest Internet market after the United States.

"The Alibaba purchase gives Yahoo a strong local entrepreneur, a heavyweight in the industry, who can drive the company to success," says Duncan Clark, managing director of BDA China, a technology consultant in Beijing. "China is a high-maintenance market. It is highly regulated, highly sensitive and difficult to manage from 15 hours' time difference away."

Yahoo controls just 3 percent of China's online auction market and ranks second among search engines. To turn the company into a leader, Ma must win the loyalty of Yahoo's 600 China-based employees and attract customers in a relatively undeveloped electronic-commerce market.

"Chinese Internet users tend to focus on online games and spend a lot less on e-commerce," says Frank Shi, an analyst at CLSA in Hong Kong. "The Chinese market is still immature."

The battle for the China Internet market has been joined in earnest. Google may have a small stake (2.5%) in Baidu but will no doubt be looking for a bigger slice. eBay, which was also rumoured to be in the race to acquire or partner with Alibaba, will be contemplating its next move – hoping to ensure that the history in Japan (where Yahoo is the leader in the auctions space) does not play out again in China.

For now, at least, the two events together put the spotlight firmly on the potential of the Chinese Internet. There are over 100 million Internet surfers and broadband penetration is increasingly rapidly. Baidu joins the likes of Sina, Sohu, Netease and Shanda in monetising the growing user base. The mobile users base in China is at over 350 million. [By contrast, the Indian numbers are about 25 million for the Internet and 60 million for mobiles.]

As a side-effect of the China interest, Indian portal Rediff saw its stock nearly double to $14 (giving it a market cap of over $350 million). On a related note, Indiatimes (of the Times of India group) raised $36 million selling a 15% stake to Sequoia and Westbridge. (It is probably looking forward to a Baidu-like IPO in the next year given its entrenched position across the Internet and mobile spaces in India.)

Soon, India will join China as one of the world’s largest Internet markets. How soon that happens depends very much on the speed with which we can get broadband rolled out at affordable price points for the mass-market. What is clear about the two August events related to China is that finally the East is starting to come of age and the global Internet leaders are paying attention.

Tomorrow: Google’s Googlies

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