Netly News

Why I'm Rooting for the Kid

I’m rooting for the kid.

It’s not an easy decision—it never makes sense to be on the other side of Google (GOOG), and I am all for open standards. But on this one, I can’t help myself, I am rooting for the kid.

Imagine starting a business that, within 18 months, goes from nothing to 50 million members. You do everything right. You take a bit of seed capital and you make all the correct decisions, you play a scratch game, you innovate, you make a big bet, and bam! You create a product that’s so compelling, you make a market where none existed.

And now imagine that a far bigger company—no, the fifth biggest company in the U.S.!—comes along and simply copies your idea. It bigfoots you and says, you know that beautiful thing you figured out? Well we’re going to do it, too. And good luck competing with us because we’re going to take your great idea, and give it away for free to our market, which happens to be twice as large as yours before we even get started here.

In so doing, it (seemingly) neutralizes you, robs you of all the value you created.

How can you NOT root for the kid on this one?

A lot of this reminds me of the Browser Wars, when Microsoft took a similar tactic with Netscape. (“You know that cool browser you created? You know how your business model hinges on selling it to people? and want to sell? Well we’re copying it and giving it away for free.”) Of course, Microsoft also made the mistake of tying it to its operating system, which cost it billions. No one can scream “monopoly!” here.

So I’m rooting for the kid. I don’t care that, in this case, ironically, he has Microsoft (MSFT) in his corner. He is still the underdog.

I hope Dave Winer is right and that tech companies who promulgate standards to undermine other tech companies usually fail. I don’t believe him in this case. The “standard” that Google is foisting on its partners is open. It’s HTML and Javascript. Facebook has the proprietary code here.

But still I am rooting for the kid. He has momentum on his side—50 million people, and so far, Google’s ploy isn’t a good reason for any of them to leave. And that means the developers will stay. I am hoping that come next Tuesday, when he lets Madison Avenue see what Facebook can do with social ads, he’ll change the game yet again. God this is fun. That’s why I’m rooting for the kid.

Facebook for the Blackberry

Printed with permission of Keith Bilous

Finally! The best gadget I've purchased this year in my Blackberry 8830. I love it. SO much better than the Treo, that dumbest of smartphones, which I lugged around for the last three years.

At today's CTIA, Facebook unveiled Facebook Mobile—and a new download for the Blackberry which is supposed to make it easier to access the social network.

That's the good news. The bad news: Though I was able to download the application (point your BB browser here) and install it without problems, when I try to connect I get "There was an error contacting Facebook." Possibly too many people are attempting to login at once? Or what? Anyone else having trouble (or have you gotten in?)

Update: I'm still locked out, but some readers are getting in: See comments.

Update at 7:45 p.m. PST: Still no luck. Other readers complaining of problems.

Update at 8:45 p.m. PST: Looks like a ton of people are having trouble. See Facebook's Blackberry page here.

Final update: I got the RIM guys to debug the problem. Turns out that the people affected are corporate users whose IT departments limited browser access. Here's the fix.

Sonos Sonata

It amazes me that people still buy music. Though I love it above all other forms of entertainment, I've not bought a single CD, nor iTunes tune, for the past 18 months. Instead, I rent music from the streaming music site Rhapsody, and play it over my wireless Sonos network at home.

It costs me $10.99 a month. That's the annual pre-pay; it's $12.99 a month if you pay as you go, and $14.99 if you also want to download anything you want to virtually any portable MP3 player except the iPod. For that fee, you get access to most of the world's great music—Rhapsody is vague on the numbers, though it was 2.5 million songs the last time they advertised it on their home page. My colleague at Fortune, David Kirkpatrick, smartly refers to this setup—Sonos hardare + Rhapsody subscription service—as "music dial tone." I can't imagine life without it. In fact, take my real dial tone and cable TV service. You can have my Sonos remote control if you pry it from my cold dead fingers.

That said, both the Sonos system and Rhapsody aren't perfect. But today, the Santa Monica Barbara, California-based Sonos unveiled a number of improvements that  moved them much closer to the Platonic ideal. I wish the same could be said for Rhapsody.

Prime Time for Amazon

Don't these people know the economy is in the tank? Amazon (AMZN) today reported one of its best quarters ever, with revenue growing 41% and profit quadrupling from a year ago.

Nonetheless, Wall Street punished the online retail giant after hours, partly because Amazon reported diminished gross margins. (One good reason to think that was a blip, not a trend:  Amazon sold 2.5 million copies of Harry Potter VII, which had ghastly, wafer-thin margins. What the boy wizard giveth, he take awayeth.) The news out of Seattle was pretty good today, and Amazon is predicting, in the words of CFO Tom Szkutak, "our best holiday season ever."  With consumers in a dither about the housing meltdown in general and Chinese toys in particular, how is this possible?

Facebook's Move To Madison Avenue

Why bother to rob banks? Facebook is where the real money is—and the young social network has not yet begun to tap into it. But that will change within the next few months, says Mark Zuckerberg.

The lead-off batter at Day One of the Web 2.0 Summit in San Francisco today, Zuckerberg turned in his usual deadpan performance, and yet managed to divulge a lot in what little he said. The most interesting stuff had to do with where the young "it" company is headed in the near term. Moderator John Battelle asked Zuckerberg if he could let the audience know about any "places that Facebook might want to colonize"—an important question for developers who presumably steer clear of competing with its host.

Rethinking Online Ads 2.0

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Henry Blodget, who's been truly brilliant at Silicon Alley Insider, posts intelligently about Nielsen's report Wednesday that online advertising fell from August to September.

We continue to believe that we may be in the first stages of a cyclical downturn for advertising and the Internet sector--one that could affect not only start-ups and second-tier players but majors like Google (GOOG), Yahoo (YHOO), AOL, et al.  Such downturns do not begin suddenly, and they are not instantly obvious (except in hindsight).

I see you and raise you one, Henry: I think this could be a particularly nasty downturn in online advertising—very similar to the first time online ads crashed at the high middle of the last bubble. I also think this is the best opportunity for social networks like Facebook because if someone can figure out how to make ads work in that environment, it's game over. Hence the Facebook mania these days. But I'm getting ahead of myself...

Myspace Case

Yesterday, Techcrunch had a scoop: That Myspace was at long last following Facebook's lead, and creating an open platform for developers. Mike Arrington cited "information that suggests" the company could well unveil its platform at the Web 2.0 Summit next week.

Today, Valleywag pooh-poohed the story, quoting a "source close to the company."

Last night, I bumped into a pal who does a significant amount of third-party apps work for a variety of social networks, and he confirmed the VW take. (And if ths isn't the laziest, most third-hand reporting I've ever done, I don't know what is. God blogging is fun.)

According to my friend, who spoke his connection at Myspace: Myspace was fielding calls all day from excited developers yesterday, and telling them the same thing: Sorry folks, nothing new to report here. While Myspace is continuing to say it will open up its network and share the bounty with apps makers, no deal is imminent, and no timetable has been posted. Instead, the company will be unveiling a "directory of apps"--essentially a PR move to show Joe Myspace that Myspace has a bunch of nifty programs for users to use, too.

More Google Brass Head for the Exits

Bigshots from around the world are converging on Google HQ tomorrow for Zeitgeist, the faithful’s annual mecca to the Googleplex. But at least one of Google’s top brass is heading for the exits: Benjamin Ling, a high-ranking engineer described by Google (GOOG) watchers as one of “Larry and Sergey’s golden boys” has defected—to Facebook.

Reached in his Google office late yesterday, Ling confirmed the move, but declined further comment. His last day at Google is Friday.

A Ph.D in computer science educated at Stanford University, Ling was product-management director for Google where he oversaw all of the search goliath’s ecommerce efforts. Among other things, he created and ran its payment service, Google Checkout, as well as Google SMS, which delivers search services via text messages to cellphones. Ling will be heading the Facebook platform, the software architecture upon which the popular social network is built.

Ling follows ex-Googler Gideon Yu, who was the Chief Financial Officer of Google’s YouTube, to Facebook. Yu left for the CFO’s slot at the Palo Alto startup in August.

Google’s stock has surged to over $600 a share recently, which, ironically, is making it harder to keep top talent on board. Silicon Valley pundits believe that Facebook is headed for an IPO in the near future—a much faster path to riches for early stage employees.——Lindsay Blakey contributed to this post

Secrets of the Facebook Economy: Secret #1: How to make money by throwing crap at people.

Nevermind all the fanciful Facebook applications that developers are busily crafting. It's actually shockingly easy to get in on the Facebook goldrush, 400 attendees learned today at "Graphing Social Patterns," a two-day conference on the business and technology of Facebook applications.

Indeed, Seth Goldstein, president and founder of SocialMedia.com, appears to have found the killer app. Or maybe it's the killer crap. Goldstein's company created "Food Fight," one of the first apps to strike a chord among millions of Facebook users. The app allowed users to use virtual bucks to buy virtual food, which they could "throw" at friends. After the fad began to slow, Goldstein, asked one of his developers to create "a pile of poop," which he then threw at a VC pal.

Not surprisingly, it kept the Food Fight roaring. Until the virtual poop, most food items could be purchased for $1 (virtual). Facebook users earn money to buy virtual food by answering questions submitted by other users and market researchers; that in turn, creates real market research that can be sold for real money. Goldstein decided to charge $25 per pile for his newest creation. Demand was uncanny, he said in an interview.

Hundreds of thousands of users bought the item, answering reams of questions about their lives. "It was far and away our most popular item ever," he said.

The Battle for the Innernet

The Internet—a great place to visit but I don’t want to live there. I used to, of course. Who didn’t? But now, the crowds, the noise, the parking… It’s become kind of hostile to tell you the truth.

That’s why the stakes are so high to build the Innernet. Errrm, the Innernet?