The Gong Show

Back on Jan 19th 2006, the DOJ subpoenaed Google to turn over search records in support of their child pornography case they were building. The headlines were horrible: stuff like “Google Sued over Child Porn.” It was a PR mess, and Google stock slipped ~10% to 399.

I felt confident that it was a temporary blip, so I bought some GOOG. It was a whim and probably not an intelligent investment decision considering the risk. Plus, I thought it would be interesting to get all the voting papers for the upcoming annual shareholders meeting. I never bought an individual stock before, so needless to say I was pretty clueless going in (and I still am now).

I figured at the time that the stock would hit 500 in a few months, so I set that as my target price. I was down on myself in March when Google sunk as low as 331, but as many sources reported today: GOOG hit 500 yesterday. It’s my target, so I sold at 509.

Will GOOG go higher? I think it’s likely, but I’m happy with 27% growth over 10 months, so I’m not going to stick around to find out how high it can go.

This chart compares GOOG to the S&P500 from the day I bought to the day I sold:

The main conclusion to draw here is you couldn’t go wrong investing over the time period I did considering the S&P500 performance.

That was fun. Maybe I should take a stock tip from yesterday’s Wallstrip episode for my next purchase:

I rolled my eyes hard this morning as I peered over the sholder of a fellow subway rider to see the New York Times front page headline: In Web World, Rich Now Envy the Superrich. Boo hoo for Reid Hoffman and his paltry $1.5 billion exit to eBay in the boom hayday.

I really shouldn’t knock Reid though because he had, by far, the best quote in the article. Reid said in the context of investing in web startups:

It’s the big wins that keep everyone diving off the cliff.

Don’t know that I agree, but it made me laugh.

I spent a large chunk of my time at Stanford studying Product Design. I studied a combination of mechanical engineering, human-computer interaction, psychology, cognitive science, and computer sciences classes to develop an intradisciplinary program which suited me well for my first job: Product Design at Homestead.

Yet, despite a wide range of classes, I feel like my product design education is going to be made obsolete much quicker than I expected. Community design (epitomized at Threadless.com) is going to replace over-educated people like me.

I only learned about Threadless recently, but I have been a big fan since then. I recently gave my sister a gift certificate to Threadless for her birthday.

Also, because I work in venture capital, people often ask me what is the most interesting idea that I have seen. The Threadless model is usually the most interesting example I have to offer and the first one I describe.

Tim O’Reilly recently wrote about the implications that Threadless.com will have on the design of physical goods in the (near) future. I agree with Tim’s analysis of the implications; here’s a choice quote that really rang true:

Right now, threadless is just making t-shirts. But custom fabrication devices like laser-cutters, water-jets, and 3D printers are currently at about the price points of typesetting machines back when desktop publishing took off in the early 80’s. Even traditional manufacturing techniques can now be harnessed by small companies and individuals, who can hire overseas factories to make short runs of custom designs. How far off is a future in which the creative economy overflows the thin boundary that separates “information” from “stuff”?

My question in the context of Tim’s post is: will Threadless-style community design be a decentralized long tail play with a bunch of small Threadless-style sites cropping up in different verticals OR will Threadless (or CafePress, or some other well-positioned existing service) develop communities across verticals to become the defacto community design site? My guess is decentralization, but I see compelling reasons why both outcomes are possible.

The NYTimes posits that any potential buyers for Yahoo will wait for early returns on Project Panama first.

Students of Yahoo say that while the company may be acquired, no deal is likely before Project Panama begins to show results, one way or another. Merrill Lynch figures that the project will raise Yahoo’s revenue $250 million to $500 million in 2008 — and warned that investors could be “too late” if they waited to buy until Panama’s rollout risks had passed. [Link added by me for those unfamiliar with Project Panama]

It was a bold statement for a number of reasons:

So, someone may acquire Yahoo? Who?

• I can’t picture an Old Media making the Time Warner/AOL mistake again. While Old Media companies writhe in their inability to establish themselves online, buying an expensive company isn’t the solution. People are the solution, and Yahoo’s key managers are fleeing like rats from a sinking ship.
• How about Microsoft? The corporate culture and stance on open collaboration with other services are very different. There significant compatibility issues. But who else can afford the 36.6 billion dollar market cap today?
• How about the carriers like Comcast or AT&T. This sounds far more likely to me as it would allow a carrier to be the consumer-facing brand on both the data lines and the services the leverage the lines. It would also be a way to kick the “net neutrality” debate in favor of the carriers by not only silencing a major proponent of “net neutrality,” but even going so far as turning that proponent into an evangelist for the carriers. But, the carriers are currently sitting pretty as a platform that everyone has to pay to participate on… why ruin that nice position and get involved in content? It’s certainly not within their domain of expertise.

Also, why would an acquirer wait until after Project Panama is released? Yahoo’s biggest problem right now is their inability to monetize their traffic. Any acquirer would be making a significant bet that they can do a better job at monetizing traffic than Yahoo can.

So, why wait until Project Panama succeeds or fails? If it succeeds, then you lose out on today’s bargain price. If it fails, you just wasted a year watching Yahoo fail when the potential acquirer could have been spending that time implementing their own monetization strategy. It seems to me that if Yahoo is going to be acquired it will be sooner rather than later.

Fred’s got some great traffic visuals on Yahoo to further prove my point. Traffic growth on Yahoo has reduced to single digit percentages year-over-year. Yahoo has reached maturity in growth. Any acquisition is going to be an acquisition of eyeballs as Yahoo’s profit wanes, and traffic is at a plateau, so acquire now while the stock is a bargain (unless you think it can go lower than the 52-week low its barely floating above right now… that’s pretty damn low).

I made a nice looking image mosaic of myself. You can make one of any picture you provide. The image consists of Flickr images. Very cool!

I just received my first piece of ASCII-Art spam. It’s an inventive way to bypass spam filters. Perhaps this is an old tactic that never hit my radar before, but this is new to me. Pretty interesting. I am tempted to go to the URL to see what the author is spamming me for, but I don’t want to reward the spam tactic. Has anyone else seen much ASCII-Art spam?

This reminds me of Textmode-Quake, an ASCII-Art rendering of the game Quake that can be played in real-time. This is very old, nothing novel, but if you have not seen it yet, check out some screenshots.

I was about to leave for work this morning when I found this post by Blake Ross on the tasering of a UCLA student for not showing proper ID (and being generally unresponsive to police requests). It’s really sobering and the YouTube video is sickening. I really don’t know who is at fault here, or how to gauge this… but I do think its worth bringing peoples’ attention to it. The Memeorandum coverage is available at this timestamped version of the page.

YouTube is very powerful. Even if all the copyrighted material is removed from the site, YouTube will live on strong as a political forum for eye-witness video. First “Macaca,” and now this tasering… YouTube will continue to play an increasingly larger role in our political conversation.

Brad and I attended the TechCrunch Meetup 8 tonight. The venue was BED (warning: obnoxious website). I think BED is going to need an exorcist to clense the venue of the level of nerdiness it encountered tonight. There were companies everywhere running demos on sexy, thin Mac monitors.

The New York area had flood warnings, and it was pouring out, so the crowd was fairly small. I prefer it that way; it lets you walk around a bit more and gives the party some room to breathe.

I met a few interesting entrepreneurs, a lot of PR firm reps, and some biz dev people. But, the highlight was the atmosphere and the odd match of sexy venue juxtaposed with techie geeks. Thank god there weren’t any booth babes.

The quote of the night for me was tasteless, but nonetheless entertaining in the way that I find trash tv entertaining (offensive, yet you can’t turn away). An attractive girl passed in front of a few guys I was talking to. One guy says, “That has to be user-generated content.” Another says, “I bet she’s viral.” Everyone cringed.

I hope TechCrunch comes back to NYC soon. It was a pretty fun time.

Check out this video about Etsy, an online service for buying and selling handmade goods. It’s very entertaining and has great art style.

Buy handmade!