The Dollar Factory

The problem with Silicon Valley

It is unfortunate that I am employed in the high-tech sector because I have to hear about Silicon Valley on a daily basis. The main issue is that the people and companies housed in the area that has become synonymous with high-tech innovation are really, really stupid. The problem with Silicon Valley is that even though some of the engineers there are smart people, most of them aren’t but they think that they are. Reading the leading technology blog TechCrunch is a prime indication of the lack of talent and innovative ideas in Silicon Valley.

A recent startup covered yesterday on TechCrunch is Posterous which is essentially a blogging platform that allows users to post by sending email. This is what passes as innovation these days! A service that more established outfits such as Google’s Blogger have offered since forever as nothing more than just another feature but not as the main feature. It should be, of course, no surprise for any of us that Posterous is a Y-Combinator startup. Paul Graham’s Y-Combinator has produced an unbelievably high number of rubbish Web 2.0 companies with no hope of ever becoming anything more than the day’s darling for TechCrunch’s Michael Arrington.

Silicon Valley is in a sad state at the moment and I don’t see it getting any better in the near future. Maybe one day all these untalented and moronic people will move away and allow real entrepreneurs with innovative ideas and business plans to take over. One can only wish!

Tags: innovation, Posterous, Silicon Valley, TechCrunch, Y-Combinator

Posted in General | 1 Comment »

Internet geeks grow up already

It has been a while since I wrote a post on the topic of Internet geekdom, but recent articles on TechCrunch have prompted me once again to revisit this category. I visit TechCrunch at least once daily to check out the news about new Internet startups and keep track of the performance of some older ones. The only problem is that TechCrunch founder Michael Arrington has slowly been changing his blog from one that tracks new and promising startups to nothing more than a Silicon Valley trash magazine.

First of all, let me say that it is his blog and he can write about anything he likes and so I am not saying here that he should change it on my behalf. I do have other options and I could get my startup news from other credible sources. That said, I keep going back to TechCrunch because I find the Web 2.0 drama to be as ridiculous as it can be. If this blog is considered the cornerstone of Web 2.0 culture then one can learn much about the people working in this sector by visiting TechCrunch. And the lesson to be learned here is that geeks (and I use this characterization in a positive way to mean intelligent engineers) need to finally grow up.

The most recent drama on TechCrunch centers around Twitter and the large number of service interruptions due to technical difficulties that have resulted from the unexpectedly high grow rate that the service has received over the last few months. Anyone would be upset if a service they use daily stops working as frequently as Twitter has. The only issue here is that Twitter is, first of all, a free service and as the company need make no guarantees to the users in terms of uptime or any other variable. If I could get my phone for free instead of paying $50 per month then if it happened to be unavailable for a few hours every few months, I would not really complain about it; would you? Other than the fact that Twitter is free and as such one should expect to get what one pays for, there is another more significant reason why Twitter outages and Web 2.0 drama such as that often found on TechCrunch is stupid to say the least.

It seems that Twitter users, who some happen to be very influential people in Silicon Valley and many are computer “hackers” who work in the Valley, have convinced themselves that this service is more important than National Security! I mean, seriously people, if a simple text messaging or micro-blogging application as I believe people call it goes down for a few hours, it is not such a big deal. So a few insignificant people won’t be able to inform other insignificant people about what they are having for breakfast or which coffee shop they are about to enter. Bid deal! Get over yourselves. If you want attention, try to do something important in your lifetime; something that will make people remember you for it. Crack the atom or invent something new that will have a real impact in people’s lives. Don’t waste your life bitching about Twitter being down. Think, what would Einstein do if he was in your place? I bet he would not be wasting his time on trivial things like a Twitter outage when some of the bigger and most important questions out there remain unanswered.

Honestly, you need to grow up!

Tags: Nerds, Silicon Valley, TechCrunch, Twitter, Twitter outages, Twitter problems

Posted in Nerds | No Comments »

Why the Microsoft and Yahoo merger makes sense for webmasters and web users

Microsoft has been trying for more than a year now to acquire Yahoo without much success. Yahoo executives refuse to sell their online portal to the Gates’ evil empire and the dance continues. Everything about the possibility of merging the two giant companies has been said already by everyone in online and print media. It is not my intention to repeat all that with this post so I will keep it brief and to the point.

What I want to focus on when it comes to the possible merger between Microsoft and Yahoo is the overall impact this will have to the online marketplace. In my opinion, this impact will be mostly positive and it will not lead to another Microsoft monopoly as many believe. The way I see it, currently there is an online monopoly and that is Google.

Google has the best search engine returning the most relevant results for all user queries. There is no doubt that as far as online search engines go, Google takes the cake. And this is after thousands of people spam its Web index in hopes of making easy money. Google’s advertising products including AdSense, AdWords and the recently acquired DoubleClick are definitely the best ones available today. Many webmasters and affiliate marketers make a good living because of Google’s advertising products.

Google being a monopoly is, however, bad news for both those trying to make money online and Web users. Why?

For regular Web users the problem is that little innovation in search engine technology is currently occurring. The fact that Google dominates the market and that they are very large and slow to make changes to their search algorithms means that little happens in improving the underlining search engine. Yahoo and Microsoft have been unable to create a competitive search engine on their own. A merger would make sense in terms of giving users an alternative search engine and at the same time forcing all parties to innovate at a higher pace. One way that Google’s monopoly is hurting the Web is their refusal to support the move towards the Semantic Web.

For webmasters having two large companies competing with each other for displaying ads on their online properties can only be good news. At the moment, everyone knows that if for any reason Google terminates their account, it is next to impossible to properly monetize a low to medium traffic site. Large sites can make money with a second or third tier advertising network and affiliate marketing but this is not the case for the smaller publishers. Google can be very vigilant when it comes to terminating accounts simply because they have a monopoly with AdSense; of course, in many cases it doesn’t help when webmasters violate the program’s TOS just to make a few extra dollars but there are a good number of innocent publishers that are terminated with no good reason. Yahoo and Microsoft have not been able to create advertising programs that are as good as those offered by Google. A merger should create some good competition to Google giving webmasters a good alternative way for monetizing their web sites and at the same time forcing Google to respect publishers more.

There are probably other reasons why a Microsoft-Yahoo merger makes sense. I wrote this article simply to focus on the fact that said merger would create real competition to Google taking away the monopoly the latter have enjoyed in recent years. Both web users and web masters will benefit from such a merger. I just wish Yahoo was not so stubborn!

Tags: Google monopoly, Microsoft, Microsoft-Yahoo merger, Yahoo

Posted in Search Engines | No Comments »

YouTUBE CPM is really low says the data

Trying to make a living by producing and posting video content on YouTube? It might be a while before the big fat paycheck that you are hoping for comes in the mail. Recent data of Google payouts for YouTube producers show that advertising on the video site cannot manage more than $1 CPM. This CPM is very low compared to text advertising. Essentially, you video has to receive many million views before it actually generates some revenue and even then, the revenue isn’t anything to write home about. Let’s look at one example as reported on Silicon Alley Insider.

Break a Leg’s Yuri Baranovsky said he’d collected $1,600 for more than 2 million views on YouTube. So if that means $800 for a million views (which it doesn’t exactly, but just to get an idea), user partners have been responsible for 1.25 billion paid views so far.

And yes, Break a Leg is a decent quality video involving many actors. Even if over time the video is seen another two million times, it is not likely that it will generate enough revenue to seriously compensate any of the people involved. User generated video content is not easy to monetize. This content has very little value. Silicon Alley Insider further reports on the estimated CPM for video content on YouTube.

As SAI’s Vas Sridharan reports, YouTube proudly reported that it has shelled out…ONE MIIIIIILLLLLLLION DOLLARS…to producer partners in the past four months. The producer of one video, the 2-million-view smash hit “Break a Leg,” got a check for $1,600–which equates to a net $0.80 CPM.

What can we learn from this? First, it is a good thing that Google owns YouTube because the latter will continue to barely pay the bills until a better way to monetize all that user generated content is found. This brings me to my second point. There is lots of room for some entrepreneurs to come up with a way to monetize user generated video content and make it big. Will this person be you?

Lastly, I want to say, don’t give up on your blogs because they still are the best way to make money online from textual user generated content. Of course, there is also affiliate marketing but that is an entirely different revenue stream.

Tags: Google, user generated video, YouTube

Posted in Online Video | No Comments »

Watch out for falling debris

Watch out for falling debris this weekend. We are going to be upgrading our WordPress software to the newest version, i.e., 2.5, and also we will be moving to a new server which hopefully will make the site load faster. In the process, we will be changing the front page to something better that does not use an ancient version of Xoops. I’m also going to be removing the interstitial advertisements because these ads are more of a nuisance than anything else.

Thank you!

Update: We have moved to the new server and upgraded to WP 2.5 (the newest version of the software.) We have also updated the theme to something more modern. The front page is gone and it will be soon replaced with a single link to the blog until we figure out something better to place on it.

Posted in The Dollar Factory | No Comments »