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Category: economics

Frank’s Back

Published September 1, 2007 by cgerrish

Frank Quattrone made a lot of people a lot of money. He was the i-banker of Web 1.0. Now he’s beaten the charges related to the IPOs he ran for CSFB during the Internet boom. Of course, those who actually remember ancient history (back around the turn of the millenium), would know that Quattrone was never charged directly with the securities violations everyone knew he committed. He was charged with the cover up. He beat that rap.

Bubbles

So now in this new era of Web 2.x, Frank’s back. But things have changed, there’s Sarbanes Oxley, start ups are trying get by without VC funding, and the “first day IPO pop” has been revealed to be the most expensive advertising a company could possible do (as well as an opportunity for the kind of securities violations that Quattrone was originally suspected of). It was the difference between the IPO price and the first trade price that traditional bankers like Quattrone were able to parlay into a network of favors, and a pipeline of deals.

Here in the Bay area, we think the new crop of Web businesses are probably due for a shake out. But it’s also acknowledged that there are some better business models out there that really organically fit into the Web. If there’s a bubble today, it’s a much smaller one. It’ll be interesting to see how Frank will emerge. He wants to get back into the scene, maybe it’ll be M&A this time.

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iTunes as Directory and Browser

Published August 31, 2007 by cgerrish

NBC Peacock

Media outlets report that NBC will not renew its contract with Apple’s iTunes. The stated reason was control over pricing. Apple likes simple pricing that everyone can understand. Traditional networks and record companies want to maximize revenue even if it means confusing users. They seem to have forgotten all about the original Napster.

Apple created the legal market for media downloads, and iTunes has become the hub for all downloadable content. That’s a nice position. The Networks and record companies will try and create an alternative hub with a terrible user interface, confusing pricing and lots of strings use of content. Users will revert to Bit Torrent. People use iTunes because it’s a very usable director and content browser.

Ultimately pricing will probably become more complex, but you should be able to buy and download NBC content from mulitple sources. May the best directory, browser and e-commerce interaction win.

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The Small Internet: Bell’occhio

Published August 29, 2007 by cgerrish

french pen nib

As has been previously established, the Internet is dead and boring. Some say it’s because we don’t have enough bandwidth, and that the network isn’t ubiquitous. Without question, more will make more possible. But will it make better possible? Sure, it’ll destroy television as we know it, but that’s really already happened. Once the distribution system got beyond 3 major networks, it was the beginning of the end for the economy of scarcity.

The real problem is that there’s not enough quality content to be distributed through 800 cable channels, zillions of Web sites and your phone. And even if there was, you wouldn’t have enough time to consume it. The reality is, you need to filter out 99.9% of the crap people are aiming at you. Your friendly local venture capitalist hopes that social networking sites will provide that filter for you. You and your “friends” can collectively filter the vast wasteland of the Web to something that’s actually interesting. But even that may be too much, people may have to stop sleeping to keep up with the river of “interesting stuff” their friends have dugg.

While gossip can be amusing, can the Internet also introduce us to the small, the original, the unique and the beautiful? Small shops like Bell’occhio are much better in person, but I love seeing them on the Web. No VC invested in this company, but it’s more interesting than all the Web 2.x companies missing vowels from their names.

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Feudalism & Automating Web Polution

Published August 27, 2007 by cgerrish

Scoble writes that Mahalo, Facebook and TechMeme will “kick Google’s ass” in 4 years. Actually, he both writes and videos his prediction.

We live in a polluted environment on the Web. We destroyed the value of the Meta Keyword tag, and with spam we’ve made email a pain and with SEO spam, we’re poluting Web search results. And our poluters use automation for the purpose of polution. No wonder the internet is boring. We’ve fouled our nest, and now we retreat to the walled gardens, gated communities and da club.  The Web begins to organize itself into feudal kingdoms.

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