Author Archive - Emily Ko
Business.com Sold for $345M to R.H. Donnelley
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Written By Emily Koh | July 26, 2007 | Share This
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We reported earlier last month that Business.com was up for sale, and it looks like someone’s finally bitten: the business search engine and directory was sold for $345 million to R.H. Donnelley, the yellow pages and local search firm.
From the press release:
“With this transaction RH. Donnelley takes another significant step forward in the online local commercial search marketplace,” said David C. Swanson, chairman and CEO of R.H. Donnelley Corporation. “Upon closing, we will immediately gain a profitable business-to-business vertical that is widely recognized as one of the leaders in the market. We will also gain technology and talent that will accelerate our capabilities with DexKnows.com and other aspects of our digital strategy.”
The deal states that R.H. Donnelley will pay the $345 million in cash and the rest in deferred purchase consideration. PaidContent reports that they beat out several notable competitors in a heated auction, including IAC, Dow Jones, the New York Times and News Corp.
Under the terms of the deal, Business.com’s CEO Jake Winebaum will become the president of R.H. Donnelley’s interactive operations and will oversee its online properties, including DexKnows.com, LocalLaunch, Business.com, Work.com and the Business.com Ad network.
R.H. Donnelley is a directory and online local comercial search company that publishes yellow and white pages for AT&T, Dex and Embarq, among others. They have been making gains into online advertising recently, having re-launched its online local search site, DexKnows.com, last month.
Facebook’s Legal Woes: Did Zuckerberg Steal From ConnectU?
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Written By Emily Koh | July 25, 2007 | Share This
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Facebook has been on a roll, but it looks like the social networking site has hit a bump in the road. Facebook founder Mark Zuckerberg will appear in court today in Boston to face copyright infringement allegations in a lawsuit filed by the three founders of ConnectU, who claim that Zuckerberg stole the idea for the social-networking site.
Originally filed in 2004, the complaint was dismissed due to a technicality, but was refiled earlier this year in March at the U.S. District Court in Boston.
The founders say they began developing a networking site for Harvard University in late 2002. A then-sophomore Zuckerberg was recruited to work on some back-end coding for the site in late 2003. The suit alleges that Zuckerberg intentionally stalled his work on ConnectU for more than 2 months so that he could lift the idea and give Facebook an earlier release in February 2004, versus ConnectU’s launch in May 2004. ConnectU is claiming that this gave Facebook a “crucial competitive advantage.” (Consider this: Facebook today has about 31 million users while ConnectU languishes behind with only 70,000 users, according Courier Mail.)
Brothers Cameron and Tyler Winklevoss, and Divya Narenda, the founders of ConnectU and former Harvard classmates of Zuckerberg’s, are pushing for the shutdown of Facebook, as well as all profits and control to be handed to them.
It’s not all just hot air either — ConnectU’s founders have said they have a record of 52 e-mail exchanges and three meetings between their team and Zuckerberg where they discussed the details of the social networking site. Zuckerberg, however, maintains his innocence, according to the Daily Tech:
Zuckerberg says that he voluntarily agreed to contribute six hours of coding for the ConnectU site, but denies that he had knowledge of it being a social networking system. Instead, he claims that he believed it to be a personal site to connect students, alumni and employers.
“I’ve never really understood their product, but it was not a social networking site,” Zuckerberg said in a previous Stanford Daily story.
It should come as no surprise that this lawsuit reared its head again, considering there’s a lot more at stake now than three years ago. Facebook famously turned down Yahoo’s $1 billion buy-out offer last year, and experts are saying that it could worth at least double that these days. And according to the Wall Street Journal, the social networking giant is expected to earn $30 million this year on revenue of $150 million from advertising, says Portfolio.com.
Still, it does beg the question of whether or not there really is any weight to the suit — after all, can you copyright social networking? Deep Jive Interests probes the subject a bit further:
Granted, I have non-existent legal knowledge, but doesn’t something have to merit some kind of minimum standard of originality to ensure copyright? While these standards may be actually low, to think that some flavour of social networking constitutes “original” is actually a little absurd.
I think the outcome of this lawsuit is interesting, if for no other reason than that it might establish precedent for future lawsuits against established social networks — and who knows who will pop out of the woodwork, claiming that they had the first “social networking site for business contacts” (linkedin.com), “social networking for high school students” (myspace.com), or even a “social networking site for families” (geni.com)?
Let’s hope it doesn’t get that over the top.
Search Engines Beefing Up Privacy Policies
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Written By Emily Koh | July 23, 2007 | Share This
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With Google having announced new privacy measures regarding search retention policies, it was only a matter of time before the other big names in search jumped on board as well. Now both Microsoft and Yahoo are overhauling their data retention policies, reports the Wall Street Journal.
From Microsoft’s press release:
The principles outline new, enhanced steps to help protect the privacy of Microsoft Windows Live users, including making search query data anonymous after 18 months by permanently removing cookie IDs, the entire IP address and other identifiers from search terms. Microsoft will also work to give customers more control over what information it uses to personalize their online search experience. In connection with its efforts to support a common industry approach to privacy issues, Microsoft also announced that it will join the Network Advertising Initiative (NAI) later this year when it begins to offer third-party ad serving broadly.
In addition, Microsoft will also be teaming up with Ask.com in a call for an industry-wide effort to establish standards in protecting consumer privacy in search and online advertising and data retention. An update will follow in September.
Meanwhile, Yahoo promised to make search data anonymous after 13 months unless users request longer retention, or if the company is required to retain it for law enforcement or legal processes, according to Yahoo spokesman Jim Cullinan.
Everyone seems to be re-examining their privacy policies nowadays. It started with Google, who announced recently that they would expire cookies on their servers after 18 months. Last week, Ask.com unveiled AskEraser, which will give users control of how their search data is managed, and gives them the option of nuking their search histories completely.
Why all these measures now? TechCrunch offers its take:
The Wall Street Journal correctly notes that in part, growing concerns among consumers and privacy groups is driving the move towards improved user policy. It then goes on to cynically suggest that with Microsoft and Ask it may be a case of the search minnows trying to find a marketing edge over the much larger Google and Yahoo.
A stronger reason lies with government pressure. In Europe, Google is currently being probed by an Independent EU panel that is investigating possible breaches of EU Privacy Laws. Although the probe is currently focusing on Google, it’s not an unreasonable assumption to make that it could easily be extended to other search companies. The FTC probe into Google’s acquisition of DoubleClick may also consider privacy issues relating to the acquisition along with anti-trust considerations.
At any rate, it’s good to hear that privacy concerns are at least being addressed, even if these new policies don’t end up making a significant impact. User data does have its usefulness to marketers and advertisers, but the amount and length of information being stored has been making people uneasy about just exactly how much privacy there is to their online habits.
Facebook’s First Acquisition is Parakey
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Written By Emily Koh | July 23, 2007 | Share This
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Inside Facebook reported yesterday that Facebook has bought Parakey, an Internet startup founded by Blake Ross and Joe Hewitt, developers of Mozilla Firefox. Financial terms of the agreement were not disclosed.
From the press release:
“Blake and Joe built the Firefox web browser and then turned to the developer community to build on top of the foundation they’d established, not unlike what we’ve done with Facebook Platform,” said Mark Zuckerberg, founder and CEO of Facebook. “The work they’ve done with Firefox and Parakey and their approach to building products fit right in at Facebook.”
Parakey has been kept under wraps for two years, but it appears to be an online document manager of sorts — it’s described as “a platform bridging the gap between information on the web and desktop.” According to what Ross told IEEE Spectrum last year, it synchronizes documents and files from online and one’s home computer.
What’s interesting to note here is that the press release further states that “Ross and Hewitt will join Facebook’s team to work on the development of Facebook Platform and the company’s website.” Facebook has made a huge overhaul to its site ever since it introduced the F8 platform, but now it appears more and more that Facebook isn’t just content with expanding its platform — in fact, many think Facebook is aiming to become an online OS, or as Read/WriteWeb notes, “the operating system period.”
Michael Arrington at TechCrunch agrees and says Facebook’s approach is to become the number one destination on the Internet for content and interaction. Google too has long shifted gears from being a mere search engine company and into yet another destination site for users by providing a number of useful applications like Gmail, Google Docs, Google Maps, and iGoogle. However, the difference, Arrington points out, is this:
The difference with Facebook will be how the various applications are glued together, and this is where Facebook already has the advantage: Facebook’s origins as a social networking site means that everything they launch is linked in to that central one. Google has great products, but very little to tie them all together. People use Gmail or Reader as stand alone offerings, by comparison everything in Facebook is interlinked.
Yahoo Acquires Stake in Indian Ad Company Tyroo
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Written By Emily Koh | July 19, 2007 | Share This
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Yahoo might still be vying with Google to acquire Rediff.com, but they’re clearly not waiting around to dig their heels deep into India: Yahoo recently acquired between 35 to 50 percent stake in Indian Internet ad company Tyroo Media, reports InfoWorld. Terms of the deal weren’t disclosed, according to George Zacharias, managing director of Yahoo India. From the article:
The deal with Tyroo will allow Yahoo to grow its business with third-party publishers in India while it prepares to bring its revamped advertising system, code-named Panama, into the country, along with technology it acquired from Right Media, Zacharias said.
Both companies will also integrate their back-end systems so that advertisers on both Yahoo and Tyroo have access to each other’s networks.
Tyroo Media, which places targeted ads on a network of around 1,200 sites, is geared towards smaller businesses. Motley Fool points out that since less than 2% of India’s population has regular computer access, online advertising lacks critical significance at this point. In fact, most of the sponsors on Tyroo don’t have and are not required to have a website — Tyroo will send messages via e-mail or SMS to advertisers when a consumer expresses interest.
Yahoo hasn’t been slacking when it comes to putting their roots in India’s developing market. Beta-testing of their search-based ad business began in India over a year ago, and since its public launch eight months ago, it now has “several thousand small advertisers,” according to Zacharias.
Still, considering Yahoo’s less-than-stellar financial reports, it’s interesting how many companies they’ve been snapping up, as Justin Mann over at TechSpot.com notes:
Considering the financial difficulties Yahoo has faced the past year, it is surprising they are so gung-ho about snagging up other services. Taking the Google approach with buying everything you can see might work — if you are Google. Does Yahoo have something planned?
Google Looking Into Mobile Search
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Written By Emily Koh | July 18, 2007 | Share This
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The Wall Street Journal reports that Google is working on a mobile search engine that will help consumers find and buy mobile content such as ringtones and games. From the article:
With the new system, users would search for a piece of content — say, a U2 ringtone — and get back a list of providers as well as links enabling them to easily purchase the material. Eventually, Google would charge companies for high placement in the search results, much the way it offers “sponsored links” on computer Web searches, the people familiar with the plans say.
The project has apparently been in development for months, with Google collaborating with various content providers, but it’s been delayed significantly due to technical issues. The WSJ adds that Google is also considering implementing social networking functionality that will allow users of Gmail to exchange content with one another.
This gradual transition of services from the desktop to the handset makes it clear that mobile is the next Big Thing to watch. Global sales of mobile content were $27.4 billion last year, and are expected to reach $59.3 billion by 2011, according to the Yankee Group.
Google, for its part, has slowly been entering the field: testing recently began on a new AdSense-like system that will broker ads for other mobile sites, and it also has a deal with Apple to provide YouTube access on the iPhone.
In fact, everyone’s trying to make sure they don’t end up playing catch-up:
- Yahoo launched their own mobile search app, Go oneSearch, back in May, and also has a partnership with Vodafone to show banner ads on cellphones for companies like Ford and Nissan
- Microsoft has multiple deals with handset providers to integrate the phone system with their Windows Mobile OS
- Time Warner Inc.’s AOL acquired mobile advertising provider Third Screen Media back in May
- Ask.com collaborated with Sprint-Nextel on a GPS powered phone app
While it’s a logical starting point, mobile search is most likely just the first of a series of projects Google has planned for the mobile market, and the rest of the industry is hot on their heels. This should all make for an interesting couple of months, as mobile services should be expanding rapidly.
Google, Yahoo Looking to Acquire Rediff.com?
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Written By Emily Koh | July 16, 2007 | Share This
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The Hindustan Times reports today that Google and Yahoo are looking to snap up Rediff.com, India’s third-largest web portal providing news, information, communication, entertainment and shopping services. The potential deal is being valued at close to $1 billion.
At this point, it’s nothing more than an unsubstantiated rumor, with Hindustan Times relying on “investment banking sources,” and Ajit Balakrishnan, Rediff.com’s founder and CEO, came out with a statement saying that the news as “completely untrue,” according to AlooTechie. Speculation of a takeover has been in the works, however, with investment journal Barrons having suggested the same thing earlier this month. Rediff’s stock on NASDAQ also saw a sharp increase last week after launching a website allowing consumers to upload user-generated content for free.
India’s growing global and economic value has everyone trying to gain a foothold there, and acquiring Rediff.com would be a significant move to further penetrate the Indian search market. Other possible players looking into the Rediff deal are rumored to be AOL and MSN, but Mashable thinks that “with a reach in nearly every form of Internet-based communication and entertainment as well as consumer commerce services, Yahoo seems to be the company that would have the most direct interest, though Google’s plans to dominate in as many areas as possible would also hint at its interest in taking over Rediff.”
New Ad Networks Leveraging Facebook Apps
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Written By Emily Koh | July 12, 2007 | Share This
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The minds behind the online calendar 30Boxes are coming out with fbExchange, the first ad network for Facebook applications. An application will display links to other applications, and you collect credits when users click on them. Other apps will link back to your app as you continue earning credits, creating a link exchange or ring of sorts.
Popular apps like Free Gifts, Twitter, and Slide — which includes the number one Facebook app, Top Friends — have already signed up for it. Judging from the design of the system, it seems like fbExchange will help more with general app promotion than actual revenue generating, but nothing can be said for sure until the service goes live.
However, fbExchange won’t be alone. Scott Rafer, founder of MyBlogLog and Feedster, and David Cancel, co-founder of Compete.com, announced that they are working on their own Facebook application ad network called Lookery. No details are available yet on how it will work, but it is expected to go live sometime next week.
(more…)
AOL Releases myAOL In Beta
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Written By Emily Koh | July 11, 2007 | Share This
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Yesterday AOL launched into beta its personalization suite myAOL, made up of three services that allows users to customize and organize their online content, reports TechCrunch.
Frank Gruber, Product Manager of myAOL, gives a detailed rundown of myAOL’s new features: (more…)
Bay Partners Launch Seed Fund for Facebook-Only Apps
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Written By Emily Koh | July 10, 2007 | Share This
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Bay Partners, a Silicon Valley venture capital fund, announced today the launch of AppFactory, a new seed program that will fund developers creating Facebook applications. The program, headed by Salil Deshpande and Angela Strange, aims to help entrepreneurs monetize Facebook applications and will make up to 50 investments ranging from $25,000 to $250,000. Bay Partners will also provide additional technical and business assistance.
The question on everyone’s minds: is it so wise for Bay Partners to put all their eggs in one basket? True, Facebook’s new F8 platform has been hugely popular since its release in May; Deshpande told TechCrunch that 40,000 developers have requested keys from Facebook to create applications, and there are already over 1,600 on Facebook. However, as Read/WriteWeb points out, Bay Partners is taking a “significant risk,” considering that thus far, no application developer has demonstrated a successful F8 business model.
Bay Partners, however, thinks that Facebook’s “Social Operating System” will spawn a new economy. Said Deshpande to Ajaxian:
We will definitely see the open Facebook platform resulting in real, valuable applications. We believe that the Facebook apps of the future will be deep and sophisticated and will strike the right balance between adding value to the Facebook fabric, and having value independent of Facebook…
… Incorrect conclusions are being drawn from the unmonetizability of some apps that have spread fast on Facebook to date. Some apps are like jokes that get forwarded around by e-mail — and will always be unmonetizable. But meaningful apps will be monetizable just as meaningful web 2.0 websites are monetizable. We are interested in backing entrepreneurs that will be imaginative about what types of applications can be built on Facebook’s Social OS.