Archive for July, 2008

Article By:Sean Weinberg (Sean@aclion.com)

Source Article Found In New York Times:
Leftover Ad Space? Exchanges Handle the Remnants
I read an interesting article in the NYTimes today….

Joe Zawadzki’s traders spend their days in front of two computer screens, feeding their systems with data and trying to perfect their trading algorithms.
But they are not analyzing stocks. They are analyzing advertising.
What they are measuring is activity on advertising exchanges, where companies bid to place their online ads on space provided by publishers. As advertising exchanges gain popularity — Yahoo, Google and Microsoft have all moved into this arena recently — Madison Avenue is borrowing tactics from Wall Street. [...]For now, Mr. Zawadzki is using the exchanges to buy and sell ads instantaneously as opportunities arise — a spot market, in Wall Street lingo — but he is working on more complex trading strategies.

Of course they’re only about a year late on these developments; but the article does a nice job of explaining the exchange space, and more significantly, pointing out the future of internet advertising, namely Media Trading. Conceptually there’s no reason this won’t work. But, media trading will require a loosening of control that publishers have historically been loath to part with. And the exchanges are time consuming and still bulky. It’s noteworthy to point out…

In 2007, exchanges sold about 15 percent of the remnant inventory, and about 5 percent of online display advertising overall, according to ThinkPanmure, a research and financial services company. Most of the other 85 percent was sold through networks.

For 2008-2009, we’ll see how this plays out….

Article By: Dan Goldsmith (Dan@aclion.com)

I was initially very very concerned about yesterday’s article in AdvertisingAge by Abbey Klaassen “$80 Billion? Online Display Market Is Being Overhyped”. The last time I read a headline to an article of similar tone was July 2000 when the WSJ was reporting (well back in section B) that Visa Card was scaling back its online banner ad spend due to poor ROI. That story was a leading indicator of what eventually became the dot.Com implosion (March Madness? Maul Street? Anybody? Bueller…..Bueller……..) So to say the least my heart skipped a beat as I wondered just what had happened to inspire such an alarmist headline. The answer………NOTHING! Operative word being – alarmist.
Ms. Klassen’s initially makes dramatic statements like…

• “The exuberance isn’t so rational this time, either”. She seems to suggest that the current state of online advertising is as unfounded as it was in’00-’01.
• “Its déjà vu all over again…” as she critiques Google’s acquisition of DoubleClick which most experts seem to agree was a great acquisition for Google and MSFT’s attempt at Yahoo which is based on MSFT’s desire to compete along a different vein of online spend (search – not banner as the article would eventual try addressing).

Ms. Klassen must have a personal issue with……well…..facts as she doesn’t really use them to make her points in this article. I’m not pointing fingers saying “this is a poorly written piece”, but unless there’s evidence to support her claims, I just see her post as an attempt to gain more readers. Oh, and the “simply fabulous” quotes continue…

• “….And we know by now that measured-media growth has pretty much ground to a halt as marketers continue to increase their dollars in unmeasured disciplines such as web development, public relations, and database marketing at the expense of paid advertising.” NO SOURCE! NO FACT! NO NUMBERS. This is one’s simple opinion.
• “…and digital is faring better than its more traditional counterparts, bit its impossible to say its growing at the rate it would have were the economy booming or even normal.” I don’t quite know what her point here was. She seems to suggest that internet growth is stumbling but doesn’t care to source 1 fact behind her opinion. As well, she seems to suggest that our inability to compare current growth rates and economic factors to economic factors that don’t exist as a valid reason to be concerned about the overall value impact and sustainability of the internet advertising space.
• “And jobs in the space? They declined last month too” Sure would love to see some numbers behind that too because we are wrapping up a fantastic July!

She wraps up this article by suggesting that in 5 and 10 yrs display advertising will be only one segment of a more diversified online pie, but that’s just a basic reality that anyone in the space understands, not really a point and certainly not a conclusion that Online Display is “overhyped”

Article By: Josh Marmer (Josh@aclion.com)

Who wants to take on the big boys? Microsoft and Yahoo have tried to partner up to challenge them – and there are many other really cool search engines who have a neat gimmick or logo that vertically target, horizontally target, industry target, subject matter target, Target, Walmart, and more. So what makes this Cuil (pronounced Cool) search engine think they can really be bigger and better than the biggest and baddest boys on the block? Well, they aren’t just upping the GPA requirement it takes to qualify to get an interview…

Cuil is a new search engine launched by ex-Googlers – that alone turns the heads of most internet savvy users. Mention Google, and it’s a good start. Add to that $33 million in two rounds of funding from Greylock & Tugboat Ventures and Madrone Capital Partners, and they look like there’s something good going on.
So how is Cuil different? Size – it boasts 120 Billion webpages indexed in their “world wide web” – about triple that of Google. So Cuil is in fact, bigger. Since Cuil does not rank based on popularity of clicks, but more heavily on relevant content, there is no need for them (at this point) to store personal usage history. So, Cuil is, it claims, safer.
Also there are neat tabs, drilldown menus to breakdown categories, and rollover definitions – so it may actually be “cooler.” Also, they have an awesome logo, black background on the homepage, and aesthetically pretty pages…but that’s just me. I did always like the pictures.
So my first few test searches have been a great experience, but it remains to be seen if the appeal of Cuil will hold with the public who somehow magnetically drew to Google faster that the Millenium Falcon got pulled toward the DeathStar by the tractor beam. In fact, once I was done surfing on Cuil – I went right back to my Google Toolbar to look for a restaurant for my wife and I to go to tonight.
We’ll see. A more user friendly, more relevant engine will be welcomed – but it will need to pull some great results from that 120 Billion index in order to sway the public’s habits. Exciting – let’s see what happens. Will we use it? Will Google just buy it? And another question that comes to mind: Why didn’t they just buy www.cool.com? Maybe making new words is part of the gig…

Article By: Joshua ‘The Red’ Russak (Red@aclion.com)

I was looking for a healthy post and noticed the word FREE on one of my favorite blog’s “AlleyInsider“. Posted by Eric Krangel at 8am today, the article titled Free Pass To Web 2.0 Expo, Get It Here writes about how you can easily gain free access to the Web2.0 Expo/Conference in September (which, if you’re reading this blog, you BETTER be going.) I’m still getting over my surgery and a bit loopy from the pain med’s so I’ll simply “quote” the blog-post and you can go ahead and get yourself some FREE passes:

The Web 2.0 Conference is coming to New York from Sept 16 – 19. Henry Blodget will be moderating a panel called “Cashing Out: When, How, and How Much.”

We know: your company is a labor of love. But let’s be serious. It’s also a labor of capitalism. And at some point you’re going to want to turn that labor into wealth. Dividends? Sale? IPO? Henry Blodget and our expert panel will reveal the secrets to cashing out.

Want to hear this and other Web 2.0 speakers including Arianna Huffington of the Huffington Post, Marc Benioff of Salesforce.com and Tim O’Reilly of O’Reilly Media? We have a pass to the event, valued at $1095 a pop.
Leave a comment on this post, telling us you want in. (Be sure to register for a Silicon Alley Insider account with your email, which gives you an alleyinsider.com URL with all of your comments in one place, as well as more nifty things to come). At 5:00 pm EST on August 1, we’ll pick a number between 1 and the total number of comments. If it’s your number, you win.
Feel free to comment as many times as you like. But if you don’t win, you can at least get $100 off your Web 2.0 Expo registration with code “webny08bm7.”

So what are you waiting for? Head over to AlleyInsider now, and as they mentioned – “if you don’t win, you can at least get $100 off your Web 2.0 Expo registration with code webny08bm7.”

Article By: Joshua ‘The Red’ Russak (Red@aclion.com)

Following the recent trend of CollegeHumor.com going fromOnline User-Gen to MTV, it seems FunnyOrDie.com falls into that same category. I think this is going to be a recurring theme and figured I’d bring readers up-to-speed on FunnyOrDie.com’s progress:

Without a question, FunnyorDie.com is hilarious and has a future in the Online Video business. They even have a Wikipedia Page, Funny Or Die. “Funny or Die is a comedy video website founded by Will Ferrell and Adam McKay’s production company, Gary Sanchez Productions with original and user generated content. Funny or Die is also unique in that it contains a good deal of exclusive material from a number of famous contributors (e.g. Judd Apatow, James Franco) and has its own Funny or Die Team (FOD Team) which creates original material for the site. Michael Kvamme, an aspiring young comedian, came up with a concept for a new kind of comedy site and the site was developed by Randy Adams. Videos are voted on by users of the site; those that are deemed funny stay, but those that are not “die” and are relegated to the site’s “crypt”.”

The site’s first video, The Landlord, has received over 55 million views and features Ferrell confronted by a swearing, beer-drinking two-year-old landlord.[1] In June 2007, they received venture capital funding from Sequoia Capital,[2] and in June 2008, they announced a partnership with HBO.[3]

I first knew about the Investment back in April when I came across a Mashable.com article FunnyorDie.com: Will Ferrell Takes Sequoia Investment. Then In June 2008, I read an article that insured my belief that they’ve made their place in the Online Video business, avoiding the User-Gen approch (in a way) and uploading professional content. As quoted from WikiPedia:
HBO and FunnyorDie announced that HBO had purchased a stake of less than 10% in Funny Or Die. With this, Funny or Die will be responsible for developing at least 10 half-hour episodes for HBO, and the companies may organize future comedy tours together. Regarding the agreement, Will Ferrell said, “I don’t want to overstate the importance of this deal, but this is the missing link moment where TV and Internet finally merge. It will change the way we as human beings perceive and interact with reality. Okay, I overstated it. But it is an exciting deal.”[4]
This is very similar to CollegeHumor.com’s step from Online Video to MTV. I wrote about that earlier this week: CollegeHumor: From Online User-Gen to MTV
I’d keep a close eye on FunnyOrDie and see what Will Ferrell is fully capable of. Hats off to them! Now go and check out their latest footage (b/c most of it is not exactly censored for me to post on this blog): FunnyOrDie.com

Article By: Joshua ‘The Red’ Russak (Red@aclion.com)

So my 1 year post-college in NYC is complete and guess what? I’M STAYING FOR ANOTHER YEAR+…but I have to stay true to my Seattle roots and pay homage. Well in truth I am making a vacation out of this while at the same time getting a “Septoplasty” (seriously….Wikipedia Septoplasty). So for this month I’ll be checking out the Seattle Online Marketing Events scene (once I recover). I’ll check out Meetup.com’s offerings, maybe hit up a few tech groups, but I’m definitely locked in for the Online Marketing Summit which has been traveling the country as a go-to-conference for, well…you guessed it! ONLINE MARKETING! Check out the info below and also note “SCORE”, another company hosting a very worthy event for budding entrepreneurs. Check it out:

• Online Marketing Summit (OMS) – Seattle
• 8/7/2008; 8am-6:30pm; $175

• SCORE – Starting a New Business
• 8/6/2008; 8am-4:30pm; $85.00

…here are some other events, but due to my recent “Septoplasty” I’m not hitting them ALL up. Check them out at this link: Seattle24x7 Events. If you know of any other events, or you’re considering heading out to OMS, let me know and drop me a line at Red@aclion.com.
PS: If you want to know how my surgery went, feel free to friend me and comment on my FaceBook wall. Facebook me!

Article By: Joshua ‘The Red’ Russak (Red@aclion.com)

InterActiveCorp (IAC) are the proud owners of such businesses as Ask.com, Match.com and today’s topic: CollegeHumor.com. That and many more properties to boast. But what makes CollegeHumor stand out is the recent news of CollegeHumor/Connected Ventures guys finally moving from online to having a syndicated TV show on MTV. As written on the about page of CollegeHumor.com, it “was founded in 1999 by two high school friends from Baltimore, Maryland who went to different colleges as a way to share all of the pictures, videos, and links their friends would IM and e-mail each other. Now it’s a lot bigger.” AND NOW, according to the MediaPost article MTV Buys CollegeHumor.com Show ,they have at least a six-episode commitment for this fall. According to MediaPost “No financial or content details were disclosed”. So stay tuned for updates…
That’s big news for the world of User-Gen Video!! According to Comscore in my article Online Video: Q2 Tells All: According to ComScore, Internet users in the U.S. watched 11.5 billion online videos in March 2008, up 13% over February 2008 and 64% year-over-year. This bridge of Online to Traditional-TV could mean one of 2 things: Either an increase of online fan-base migrating back to TV or…TV beginning to adopt online content and monetization and a slow migration from traditional TV to a new version of Online Integrated TV Platforms.
…these are just my thoughts, but considering nobody else has voiced them, I figured I’d be the first to say “THIS IS SIMPLY…HUGE!” Stay tuned for further updates loyal readers and fans…and while you’re waiting check out one of my favorite videos from the site:

Article By: Joshua ‘The Red’ Russak (Red@aclion.com)

It’s time to take this blog public with Technorati. The first and simplest step for publicizing any blog is to set up Technorati Profile and to post that exact link for the spiders to crawl and index this site.
After which it’s just a matter of time before we make the TopBlog 150. So here it is, the true beginning and now you can say “I was there…”
Good luck to us!

Article By: Michael Adler (Mike@aclion.com)

I am the Managing Partner at AC Lion and I bring over 12 years of investment banking, venture capital and sales experience to AC Lion. I recently received a newsletter from Rutberg & Company that so perfectly laid out a concise summary and perspective on the key digital media industry events relevant to private equity firms and companies. The newsletter implications included Rutberg & Company’s perspectives, adding their own observations, hypotheses, and investment theses. A lot of that information should be respected as exclusive Business Intelligence of which they have requested to remain confidential. Below, I’ve included some of the more relevant info to our space and leave room for you to formulate your own hypothesis:

• During the one month period from June 1 through June 30, 62 private digital media companies announced $416.7 million in venture capital financings.
• Investments were primarily in the Applications, Content Publishers, and Advertising Infrastructure sectors.
• There were also 37 M&A transactions announced during the period, including Verizon Wireless’ acquisition of Alltel, Bain Capital’s acquisition of D&M Holdings, and Microsoft’s acquisition of Navic Networks.

Here are a few graphs that depict and analyze venture capital and M&A activity for digital media during the first half of 2008….

Article By: Joshua ‘The Red’ Russak (Red@aclion.com)

That’s right…AC Lion’s very own Dan Goldsmith has officially made search “SEXY” for job seekers. And just to confirm your suspicions, he has the support of Sara Holoubek the contributing editor of the DM News' SearchBuzz newsletter and a regular author of the DM News Optimized column. And I quote Sarah from her DMNews article below.:

“Search has returned as a must-have for Fall 2008.”
In 2008 Ms. Holoubek was elected to the Search Engine Marketing Professionals Organization (SEMPO) board of directors for a third term and co-founded the SEMPO NY Working Group. She is also an active board member of CampInteractive, a non profit dedicated to bridging the digital and leadership divide among inner city youth From 2003-2005, Ms. Holoubek served as iCrossing's Chief Strategy Officer, building the firm's New York office, repositioning the iCrossing brand as it raised an early VC round of $13 million.
…so if Sara thinks search “sexy”, then Dan can’t be wrong! Feel free to check out the article for yourself below (or simply click here: