Don’t get me wrong — I think Twhirl is great, and I use it all the time. It’s a great example of an app built using Adobe’s AIR platform, and it has a lot of cool features. But why should I care whether Seesmic owns it now or not? I know Marshall thinks that this is a vision of the Web’s future, but I have to say I remain skeptical on that front (and it seems like others, including my friend Om Malik, share some of that skepticism). If what this deal means is that I get more “I’m streaming — come chat!” invitations every 10 minutes on Twitter, then count me out.
The New York Times story on the deal says that it is likely to help morale in the media division at Yahoo, whose future has been somewhat up in the air since Lloyd Braun left and the company said it no longer wanted to create its own content. But personally, I don’t find the deal all that interesting. I still think, like many others, that Yahoo needs something dramatic to really shift the focus of the company — something like a Facebook.com acquisition (although it will undoubtedly cost a lot more than the $1-billion Yahoo reportedly offered last year). Tony Hung at Deep Jive Interests asks “Where’s the peanut butter?”
Even if it did buy Facebook, however, I’m not convinced Yahoo would even know what to do with it. The company has bought social networks like Flickr and del.icio.us, but apart from doing some work on the back end to integrate them with Yahoo’s server farms, I fail to see what benefit the company has gotten from them. I think the bottom line is that Yahoo is just too safe, too tentative and too boring. It needs to blow itself up somehow.
For a great look at some more practical things Yahoo and Jerry Yang could do, have a read of Marc Andreesen’s tips on turning around a large company. Damn that Andreesen. Like my friend Paul Kedrosky, I find the fact that he continues to write such excellent blog posts irritating in the extreme.
As Mike Arrington points out with a tiny bit of understatement, the numbers that Yahoo used to justify its valuation — at one point it offered a deal valuing Facebook at a YouTube-ilicious $1.6-billion — look to be based on “robust” user growth. How robust? By 2010, the company projected that the social-networking site could be attracting almost 50 million users, or more than 50 per cent of the combined high school and young-adult population of about 83 million.
And that’s not the only thing that is “robust” about Yahoo’s numbers, as Fred Stutzman notes on his blog. He points out that the projections for Facebook’s revenue — from which the purchase price is derived, as in “6 times revenue at a discount rate of X” — assume that more than 90 per cent of the site’s users are “active users.” That’s not just an aggressive target, it’s right up there in wishful-thinking land.
Was it those kinds of nose-bleed projections that made Yahoo pause in its all-out pursuit of Facebook? Or was it the fact that the Internet giant was being held at arm’s length by Mark Zuckerberg, a guy who won’t get up at 8 a.m. even for a conference call with Microsoft, and who wears sandals to venture capital conferences? Or did weird old Uncle Terry finally put the kibosh on the deal?
The MyBlogLog deal (if there is one) interests me most, if only because I have some familiarity with it. If you don’t know it, MyBlogLog is a tool that makes it easy to create communities around blogs — my community, or at least some of it, appears in the left-hand rail of my blog. That’s how I know that Zoli Erdos comes by from time to time (thanks Zoli) and that Marshall Kirkpatrick also drops by (thanks, Marshall) as does Howard Lindzon or “Bones,” (thanks, Howard) and Scott Karp of Publishing 2.0 (thanks Scott).
MyBlogLog actually started as a traffic-measurement tool, which counts clicks and then tells you when you hover over a link how many times that link has been clicked (you can choose either that or to see which is the top link, or 2nd-most clicked, etc.). Much like other traffic tools, you can see where people came to your blog from, how many visits per day and so on. The CEO of MyBlogLog is Scott Rafer, who used to work at Feedster.com.
But it was the addition of the community that really pushed MyBlogLog in a new direction — a smart move, in my view. I wasn’t sure it would work, in part because I figured that many people like to surf anonymously, but it seems to have taken off in recent months. And there’s no question that adding the community features put a different spin on MyBlogLog that set it apart from the other analytical tool companies.
The big question, of course, is what the heck Yahoo is going to do with it — or with Bix or Kenet for that matter. What has it done with del.icio.us since it acquired it? Virtually nothing except move it to new servers and give it a few nips and tucks here and there, as far as I can tell. And what about Flickr.com? Same thing. You could argue that leaving them alone makes sense, but in that case why buy them?
Presumably there should be “synergies” there somewhere, but I have yet to see Yahoo taking advantage of any. Tony Hung over at Deep Jive Interests has some thoughts about what they might have in mind — let’s hope the folks at Yahoo are as smart as Tony is. Eric Jackson has written an open letter to Jerry Yang and David Filo about what he thinks Yahoo should do. And Brian Balfour of Zoominfo makes a good point about the MyBlogLog acquisition here.
One response might be “Why should anyone be next?” The purchase of SA is one of the largest acquisitions Cisco has ever done. The idea that it’s going to rush out and buy something else right away is more than a little wacky. But a better response might be “Why TiVo?” As much as everyone seems to want to see TiVo get snapped up by either Yahoo, Google or Microsoft, I’m not sure that’s as likely as TiVo fans might want it to be — and I think a purchase by Cisco is probably even less likely (The Stalwart isn’t convinced either).
Why? Because — as Rafat Ali also points out at PaidContent.org — TiVo doesn’t really bring anything to the table that Cisco doesn’t already have with Scientific-Atlanta. Yes, it’s true that TiVo (and Replay TV) pioneered the DVR business, and the company has a small legion of devoted fans who love the extra features it provides. But when it gets right down to it, DVRs are a commodity, SA already makes them — including ones that do high-definition, and have interactive features for integration with the Internet (or the ability to add them) — and so there is little or no reason to pay the $500-million or whatever it would take to buy TiVo. For what it’s worth, I think the idea of Cisco buying Nintendo makes even less sense, but maybe that’s just me.