Content Matters

I think I've figured out the solution to Twitter's scaling problem.
For the remainder of this week, please refrain from posting tweets on any of the following topics:

5. The Apple (NASD:AAPL) WWDC and the iPhone 3g
4. Lehman and it's (in)solvency
3. Yahoo (NASD:YHOO), Jerry Yang, Carl Icahn and Microsoft (NASD:MSFT)
2. Whether the crash at Amazon (NASD:AMZN) cost them $1 million, $2 million or a fraction thereof since most users came back an hour or two later and made their purchase

and, the number one topic to avoid in order to keep Twitter from crashing:
1. Whether Twitter is up or down

If any time you feel like posting a tweet on one of these subjects you instead take a 2 minute coffee break, Biz and the Twitter team should be able to keep servers humming along. And you'll probably feel better about yourself. 

Many of us have been saying for a long while that print is on its deathbed. But, then again, most of us don't have the soapbox that Microsoft's Steve Ballmer has. So, it was interesting to see Ballmer's interview with the Washington Post earlier this week.

So, for those whose heads remain buried deeply in the sand (you know who you are), here's the killer quote (pun sort of intended) from the interview:

There will be no media consumption left in 10 years that is not delivered over an IP network. There will be no newspapers, no magazines that are delivered in paper form. Everything gets delivered in an electronic form.

Note: the text was probably printed in the Wednesday edition of the newspaper for those of you who prefer to consume news via paper.

Last night's Content Next mixer at the IAC/Interactive Corp building was great. I'd say that the crowd and the ambience was clearly the best they've had yet.  The turnout was strong - somewhere north of 600 people registered, probably due to curiosity about the venue. Last night's mixer celebrated the 6th anniversary of the launch of PaidContent, so congratulations to Rafat and the team.

I got the chance to reconnect with some people I'd not spoken with in a while and met some new ones as well. So, as a networking event, it was clearly a success.

For those who did not attend but are curious about the inside of the IAC/Interactive building, here's a brief clip from last night. Rafat has posted some photos from the mixer to PaidContent. Of course, for those who really want to know about the building, IAC has a website with a 360-degree spin around it.

Ever wonder what the inside of the Frank Gehry-designed IAC/Interactive Corp building looks like?  That's just one more reason to stop by tonight's Paid Content NYC mixer. Of course, the better reason is to congratulate Rafat and the PaidContent team on their sixth anniversary.
Hope that you registered when I first posted about this a few weeks ago because I'm pretty sure that it's sold out.

Hope to see you there.

Google (NASD:GOOG) and Amazon (NASD:AMZN) are the two big winners in the Internet race, while Yahoo and IAC/Interactive Corp are also-rans. That’s the conclusion of the new Sanford Bernstein Black Book, U.S. Internet: the End of the Beginning.

The report looks at the ultimate winners and losers during this next phase of the Internet, as well as the potential impact of the current economic slowdown on the online segment.



Bernstein suggests that the Internet is somewhat recession resistant.  Compared to the burst of the bubble in 2001, they feel the sector is strongly positioned. Online advertising accounts for 8% of all U.S. advertising and is growing at a 20% annual rate.  In fact, as the economy sours, they expect more offline advertising to move online, where metrics allow advertisers to quantify the ROI on their investment.  With Bernstein estimating offline advertising revenues in the US of $299 billion in 2008, each 1% that moves online is roughly $3 billion. On a global basis, Bernstein forecasts online advertising, estimated at $55 billion for 2008, to grow to $97 billion in 2012, at which time it will account for 13.1% of all advertising spend.

Breaking down the individual components of online advertising, they remain most bullish on paid search (CPC), continuing to strengthen Google’s dominance.  Paid search should generate $19.1 billion in 2008, according to their model, growing to more than $36 billion in 2012, a 20% annual growth rate.

Bernstein projects hyper growth for the nascent IP video and mobile advertising markets, with mobile growing from $4.7 billion in 2008 to $17.5 billion in 2012 while video grows from $2.8 billion to $10 billion over the same period.

At greatest risk from economic pressures is CPM-based display advertising, used more for brand awareness than driving specific actions. Brand advertising online is likely to behave similarly to traditional media advertising, with advertisers pulling back during difficult markets. That won’t be comforting to Yahoo nor to the ad networks that were the target of last year’s M&A frenzy, such as DoubleClick, Right Media and aQuantive.

Meanwhile, consumer comfort with eCommerce is strong, and Bernstein expects etailers to be the beneficiary of consumers moving more of their retail spend online. For 2008, Bernstein projects online retail revenues of $362 billion, less than 3% of the total retail spending of $13.2 trillion. They project the online spend growing to $692 billion in 2012, more than 4.2% of their $16 trillion global retail forecast.

The report explores other factors, such as whether U.S.-based internet players will be able to penetrate Asia, the impact of regulatory issues (online sales tax, net neutrality) and the future for video and mobile.

So, how will it all shake out?
No real surprises here. Bernstein views Google and Amazon as the big winners. They also see eBay as a bit of a comeback story, while projecting it’s eventual acquisition. The losers in the segment – Yahoo (NASD:YHOO), which they still believe may be acquired by Microsoft, and IAC/Interactive Corp (NASD:IACI), though they seem optimistic that the restructuring and divestitures could give IAC the kick it needs to get back on track.

 Starting 12:01am today, Amazon (NASD:AMZN) is forced to collect and remit sales tax from buyers in New York State.

I previously blogged about how ridiculous this affiliate tax is and how NYS should repeal it. If we, as a society, want to enforce sales tax on the Internet, we should do it on a national level (by Congress) and not use some arbitrary data point, such as suggesting an affiliate program should constitute a tax nexus. Amazon and other eCommerce sites aren't using the local services that sales taxes are supposed to fund.

The tax won't stop me from using Amazon - I probably order from Amazon at least 5-6 times per month, and it's the excellent service and competitive pricing that keeps me coming back. But seeing that sales tax line item during checkout will annoy me each time I see it. Overstock has filed a lawsuit challenging the law, as has Amazon, so let's hope they're successful in getting this thrown out.

Barry Ritholtz shares an email response from Missouri realtor and builder Ron Stenger to a post on mortgage delinquencies rising, from his blog The Big Picture.
Apparently, Stenger is none too pleased with the state of the real estate market. Certainly, he's not pleased with Barry Ritholtz' suggestion that the market has not yet neared a bottom. So displeased that he replied to the Big Picture post with a two-word email (and the two words weren't happy birthday).

Ritholtz then did the simplest thing for a blogger to do - he wrote a post and shared Stenger's note. And, of course, since the Big Picture has a great Google page rank, that post now shows up 4th in the Google SERP when you search for the name Ron Stenger. So, Mr. Stenger now has a permanent link to his response, which anyone Googling him or his companies in the future will no doubt see. Good way to promote your business, Mr. Stenger.

I'm fascinated by the people who pick fights with bloggers. Haven't they ever heard the Mark Twain quote "never pick a fight with a man who buys ink by the barrel"? Today's bloggers are yesterday's newspapers, but with less editorial oversight. Mr. Stenger, I hope your market comes back faster than your reputation will.