Twitter World

The Twitter phenomenon has been truly amazing. I wrote last year that I thought Twitter would be bought or dead in 2009. Well they are not bought or dead. Since then Twitter has been embraced by the media, celebrities, and any other narcissistic individual that wants to tell the world in 144 characters or less what they are doing. What is even more interesting is they still have not found a business model or solved their infrastructure problems. It is down so often that the Twitter fail whale should be their homepage.

I was recently at Web 2.0 and I heard Ev’s conversation with John Battelle. Not much has changed. He seemed very coy about his plans to figure out a business model or solve Twitter’s scalability issues. Even during his talk I could see several people in the audience getting the Twitter Fail Whale trying the access Twitter. But one of Ev’s problems might be solved sooner rather than later. The two search titans Microsoft and Google struck deals with Twitter to get access to its valuable real time data. Both Microsoft and Google most certainly had to pay for it. Sheryl Sandberg made it a point to say she didnt believe in charging for data. Early this year Ev closed another round of financing putting the total at $100 million with a whopping $1 billion valuation. With all this hype Twitter is seeing their growth plateau  and they are getting more and more competition from Facebook.

T-Mobile Sidekick Disaster

In 1928 twenty-seven cars filled with gasoline exploded outside Zyba, Kansas. The explosion could be seen from miles away. The chaos and horror of this event was cemented in peoples’ memories for decades.

The T-Mobile Sidekick disasteris turning into one of the biggest train wrecks in recent years. In the era of cloud computing and people dependent on their mobile phones Microsoft is in the middle of  a PR disasters.

Its not everyday Perez Hilton breaks a tech story wide open by ranting on his blog how for seven days he has not been able to access email or contacts on his T-Mobile Sidekick. He immediately ignited the twitt-o-sphere by telling all his loyal fans to tweet #TmobileStillSucks. What came next was so unbelievable it had to be considered a sick joke to Sidekick customers. T-Mobile issued a letter to all of its Sidekick customers saying that based on Microsoft/Danger’s recovery assessment, they basically lost all of peoples’ data. And to make matters worse they have no backup.

Update: T-Mobile halted selling Sidekick devices. T-Mobile is now saying that “Recent efforts indicate the prospects of recovering some lost content may now be possible.” CNet reported that those who do suffer permanent data loss will get a $100 “customer appreciation card” good toward T-Mobile service or products.

Google Docs Privacy Scare

Google has a certain bravado when it comes to how it runs its cloud based services. However they have recently suffered a privacy glitch that might make people think twice about the security and privacy of their information in cloud based services.

Google said, “We’ve identified and fixed a bug which may have caused you to share some of your documents without your knowledge. This inadvertent sharing was limited to people with whom you, or a collaborator with sharing rights, had previously shared a document.”

This is a huge debacle for Google and they seem to be less than transparent about the impact. Google responded to a TechCrunch inquiry, by saying that it was an isolated incident affecting less than .05% of all documents. The damage may not be widespread, but it’s still an unsettling lapse in security.  

Google has a tendacy to keep these types of things very quite. Like when Gmail goes down it takes them forever to admit something is wrong. There have been several mishaps in the last year that should call into question Google’s coding and testing practices.

Google Takes Gmail Offline

Google announced on their blog that Gmail can now be taken offline with Google Gears, a free open source browser extension. This is one of the most obvious moves for Google as they try and make Windows more and more obsolete by building more capability into the browser.

Gmail which is still in beta after more than 5 years has been having a huge growth spurt. Over the last year Gmail has grown over 43% and with offline access I am sure the growth will continue. Gmail is one of Google’s only success stories out of their core search business. If I was Yahoo or Microsoft I would be more concerned than ever about Google taking more market share and more effectively monetizing those new users.

Twitter Flutters With New Money

Twitter has been one of the most over hyped web 2.0 companies out there. They have failed to create anything that resembles a business model and have only convinced the technorati to be users. I wrote in earlier post that Twitter would be dead or bought in 2009.

Now Twitter is raising more money to keep afloat after turning down a rumored $500 million offer to be bought by Facebook. Twitter’s new valuation is $250 million and IVP has given them $20 million. This should keep the lights on a little longer as they try to scale their user base and find a business model. Erick Schonfeld of TechCruch, pointed out that Twitter’s user base is growing fast and by some metrics Twitter passed Digg in number of users. Regardless, Twitter is destined for the dead pool or it will get bought by either Facebook, Microsoft, or Google. There is nothing they have which is a real competitive advantage. Twitter is nothing more than a feature in someone else’s product.

Google Kills Print Advertising

More bad news for newpapers. Google is exiting the printed advertising business. Today Google announced on their blog that they would be cutting the project entirely, Spencer Spinnel, Director of Google Print Ads, writes:

 

In the last few months, we’ve been taking a long, hard look at all the things we are doing to ensure we are investing our resources in the projects that will have the biggest impact for our users and partners. While we hoped that Print Ads would create a new revenue stream for newspapers and produce more relevant advertising for consumers, the product has not created the impact that we – or our partners – wanted. As a result, we will stop offering Print Ads on February 28. For advertisers who have campaigns already booked, we will place their ads through March 31.

Bloggers Rebel Against Federated Media

Over the last year John Battle’s Federated Media (FM), which sells advertising for some of the most popular blog sites has been shrouded in controversy. First FM was trying to raise capital or cash out on a crazy valuation of $400 million. They eventually rasied $50 million from Oak Investment Partners on a valuation of $200 million. But In November Giga Om canceled their advertising deal with Federated Media and went with IDG. Last week Federated Media announced layoffs and said they were going to move away from display advertising.

Perhaps the dagger in the heart was when FM’s crown jewel TechCrunch gave a hint that they are considering alternatives. Michael Arrington wrote in his blog post, “I’m nervous about our ad partner Federated Media, which supplies about a third of our total revenue. They’re going through layoffs and payments from them have dipped substantially in recent months.” He goes on to say that they give FM a 40% cut on their advertising revenue. For one of the leading tech blogs this seems like a steep price to pay for driving a bulk of FM’s revenue. If TechCrunch bolts from FM like Giga Om and Digg did then I would say that FM’s days are numbered.

Michael, I think you deserve to keep more of your money and I think FM is getting greedy. FM will soon find themseleves going out of business if they don’t keep their best partners happy.

Google Cuts Projects and People

Google is human and not immune to the downturn in the economy. Google announced that they are cutting 100 recruiters and ending deals with several contractors. Now they are cutting several projects like Dodgeball, Jaiku, Mashup Editor, Notebook, Catalog Search, and Google Video. 

I am sure this is the start of a bigger trend to re-focus and prioritize engineering resources across the company. Some of the lavish perks I am sure will also be on the chopping block as Google positions itself to weather the tough economic storm ahead. Google’s quarter looks to be under pressure according to Piper Jaffray analyst Gene Munster, who said in a research note that “Google’s paid clicks are tracking down in December, and that may put pressure on the fourth quarter.”

Regardless of what happens anyone who is in the advertising bsuiness will suffer in this economic down turn. The easiest thing for a CEO to cut in tough times is the marketing budget.

Facebook Loses $14 Billion In Value

Facebook has lost $14 billion in value in less than a year. With a 140 million users and growing Mark Zuckerberg’s social network company has gotten a reality check.The value of Facebook has been a hotly debated topic.

Last October Microsoft solidified Facebook’s value to the world, $15 billion. Microsoft got a paltry 1.6% stake in the company for $240 million.  Some thought that Steve Ballmer had lost his mind. But what people didn’t realize is how smart he really was. To Microsoft, $240 million is a rounding error, so if they were really crazy they would have bought more of Facebook at an insane valuation. What was brilliant about this move was it established a public valuation for Facebook that was so high and unjustified no one on the planet would touch them. Unless you are Li Ka-shing the Chinese billionarie that put up $60 million at that valuation. Essentially it was a poison pill for anyone that would try to acquire them. (hint, hint, Google)

Even Facebook internally didn’t believe the $15 billion valuation. According to inside sources they were offering employees options at $10 billion and some employees got options at $5 billion. Mark Zuckerberg recently canceled a employee stock buying program when no company would agree that Facebook was worth $4 billion. So what is it worth now? Valleywag was reporting rumors of of people willing to sell their stock at $2.50-4.00, that would put Facebook’s valuation at $1.3 billion. If you look at the numbers Facebook is worth much less.  Read more

Google Apps Has No Future

For a little more than two years Google (GOOG) has been in the productivity apps business, trying to chip away at Microsoft’s Office dominance with over 500 million users. First they went out and bought a bunch of start-ups including Writely, Tonic, XL2Web, and JotSpot. Then Google gave them a new paint job and duck taped them together calling them Google Docs & Spreadsheets.

For the past two years they have been trying every strategy in the book to try and get traction in the market. First it was consumer free then it was an enterprise paid model. With all the P/R hype, all the data points to Google Apps being an utter failure. According to Compete, Google only gets 4M unique vistors to their Google Docs & Spreadsheets Web sites. Still the irony is while jouranlists were busy predicting web based apps would make Microsoft Office obsolete, they were busy typing away using Microsoft Word. Google even got on the feature treadmill and started banging out must have features like “print” and “charting”. Still no one is showing up to their party. Read more

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