Cyrillic Partners

A group of journalists/tech consultants has set up a site soliciting ideas to save the classified advertisement section that used to be a mainstay of print revenue.

This idea seems DOA to my mind though. Why would anyone with a good idea actually throw it away by sharing it? So far, the “experts” have come up with ideas insufficient to resurrect a decade-dead advertising medium. It all feels very “well sonny, back in my day…”

It’s a well meaning effort though, with some interesting tidbits on the design and evolution of classifieds, but it’s like trying to bandage a wounded leg just as newspapers are going into cardiac arrest.

Wikipedia offers some interesting stats on the business of classifieds:

In 2003, the market for classified ads in the United States was $15.9 billion (newspapers), $14.1 billion (online) according to market researcher Classified Intelligence. The worldwide market for classified ads in 2003 was estimated at over $100 billion. Perhaps due to a lack of reporting solidarity Market Statistics vary concerning the total market for internet classified ads. The Kelsey Research Group lists online classified ads as being worth $13.3 billion, while Jupiter Research provides a conservative appraisal of $2.6 billion (2005) and the Interactive Advertising Bureau lists the net worth of online classified revenue at $2.1 billion (April 2006).

Newspapers have continued their downward trend in classifieds revenue as internet classifieds grow. Classified advertising at some of the larger newspaper chains has dropped 14% to 20% in 2007 while traffic to classified sites has grown 23%.

A quick peek into the technologies of tomorrow from the staff at MIT suggest that some of the problems we deal with today may be solved, or at least mitigated substantially, over the next decade.

My favorite was the prediction that autism will be licked. It’s a health issue that affects 1 in every 150 American children and results in some $35 billion in lost productivity and health care costs each year. I hope its days are numbered.

See the entire list here.

I haven’t been a big fan of Dell computers since the company sold me one that has chronic overheating problems. My dad came to hate Dell after it jerked him around over a cable it never sent.

Now Dell is getting whacked by the NY Attorney General for “fraud, false advertising, and deceptive business practices.” My buddy Brian Caulfield has the story for Forbes.com. He also points out that Dell shares are off 11% for the year.

The number of patents awarded to the top 200 research universities increased more than 45% from 1995 to 2005, but I’m not sure what to make of that. Are universities waking up to the potential for commercialization of their work? Are they changing the focus of their research? Are their tech transfer teams bulking up? Data from the U.S. Patent Office.

It’s illegal to sue the University of California for patent infringements because the school is protected under the doctrine of sovereign immunity.

I’ve been hearing how frustrating this can be from entrepreneurs who have dealt with the school first hand.

I’m no strict constructionist, but I have to agree with this assessment of the silly protection, excerpted from the WSJ:

Stanford Law School professor Mark Lemley: “The underlying problem is that the Supreme Court is applying an antiquated doctrine — the 11th Amendment — to circumstances in which it was never intended to apply,” he says. “The Framers never contemplated states suing people for patent infringement.”

Google announced it would add tracking software to its YouTube video product, a move that will give users a raft of data on who sees their videos, when they watch, and from where. The NYT has the story. Tracking software is a big deal to site designers, and will likely be just as important to video uploaders looking to test their marketing message or develop a clearer sense of their audience.

Six Apart, owners of popular advertising-supported blog site LiveJournal, sold the service to Russian Internet media company SUP for an undisclosed amount. BlogNation Russia puts the deal value at $30 million.

The service counts 14.3 million blog accounts and roughly 20 million visitors a month. Its writers publish more than 150,000 new posts a day. [Data from Reuters]

“The deal will allow LiveJournal to get the attention, and frankly, the investment, to allow it to flourish,” Andrew Paulson, SUP’s chief executive, said in a phone interview with Reuters.

CEO Chris Alden stated “This allows Six Apart to focus on their remaining three brands, Vox, TypePad, and Moveable Type. We have very ambitious plans for our remaining brand going forward.”

Eric Eldon points out the deal’s political implications at VentureBeat.

Microsoft has decided to open a datacenter in the northern-most regions of Russia, a smart move, designed, no doubt, to take advantage of inexpensive energy the region can afford.

The New York Times has the story. The company has yet to choose a site for its operations there.

The country is working through its e-government strategy, an initiative designed to deploy information technologies in government agencies.

Technology companies will increasingly see gains from operations in Russia, and inexpensive electricity to run datacenters is just the beginning. There’s a great wealth of human capital just waiting to find good opportunities.

The Nasdaq exchange has launched an index that tracks Internet-related companies, including everything from destination sites and eCommerce platforms, to hosting services and website customization services. TechCrunch has the story, but still no word on whether the Index will be price-weighted or market-weighted.

The difference is important. The Dow Jones Industrial Average, for example, is a price-weighted average portfolio, where the degree of holding represented in the portfolio is proportional to each company’s share price. The Dow-style portfolio has four times as much invested in stock XYZ than ABC just because XYZ’s share price is four times that of ABC and XYZ dominates the average. For an Internet index, that spells Google (see why V ditched the stock).

A market-value-weighted index, such as the S&P500, weighs each company in the portfolio based on its market capitalization–which makes a heck of a lot more sense given the propensity of companies to do stock splits. Google would still be an 800-pound gorilla in this system, but not quite as badly as under a price-weighted.

[Picture from PascalRossini.com]

Finally there’s a new software service that simplifies the stupefying world of foreign exchange trading. TechCrunch has the story on eToro and a comprehensive review.

The takeaway? It looks and feels like online gambling, despite the company’s best efforts to eschew such comparisons. From Roi Carthy’s story:

The one thing I found odd about eToro is its rigid insistence on the lack of parallels when comparing it to online gaming operators. This is a rather naïve point-of-view for several reasons: First, one of the company’s co-founders and its CTO is David Ring who was a key R&D leader at Israeli-based 888.com (a major online casino and poker room operator). Second, eToro’s client application is strikingly similar to gambling apps, and this cannot be a pure coincidence. Third, eToro is a BVI company, (a.k.a., a British Virgin Islands company)—classic tax strategy by gambling operators. Fourth, the company’s affiliate marketing offering is extremely reminiscent of gaming operators, “Receive 25% of eToro’s Revenues or Get $2 per every free registered user.”

It’s hard to imagine serious traders jumping onto eToro to make their investments. It’s similarly hard to imagine the casually interested getting involved. Still, with the falling dollar driving interest in currency issues, the company may have a niche to fill.

[Image from TechCrunch]

I got out of my Google stock just before the end of October, at the beginning of what would later be a $100 slide in share price. I just had a feeling that the super returns I had gotten over the last two years were about to evaporate.

Now I don’t pour over the Google earnings announcements, or go stalking the company’s Mountain View HQ, but my hunch about the stock seemed to be right (for once) so I’ve been looking for justification for the move since.

I finally found it at VesTopia, where one writer explains why he too ditched the stock. The takeaway is two-fold: Google was gearing up for a mean-reversion for its performance and inflation of its keyword rates was driving earnings faster than new products.

The mean-reversion argument is of particular interest to an economist. The idea is that any performer that exhibits an above-average return or outcome will eventually end up performing about the same as everyone else.

I’m not sure I totally buy it from a statistical perspective, but my gut surely agrees. The real question is when exactly a company will begin executing its mean-reversion. I wish I knew better!

[Image from SciFi Blog]

Two startups in Silicon Valley are launching a service that will sequence your DNA and report back on the probability you face of contracting certain diseases. VentureBeat has a good summary story of the services.

Such services could turn the insurance industry on its head. Although each profile might be private for each user, meta data might be sold to insurance companies looking for a better profile. The meta data might suggest, for example, that men between 40 and 45 who grew up in a specific town have a higher risk of certain types of cancer. That would allow an insurance company to adjust its premiums for anyone who fit those criteria.

The other side of the meta-data coin is the chance to remedy public health problems before they hurt people. But that still seems a ways off.

For more on each company, check out 23andMe and Navagenics.