The Gong Show

As a meme, outsourcing IT to India seems to have died down significantly in the last year. Recently, Riya’s CEO Munjal Shah wrote that he is closing Riya’s India office. The reason: cost. It’s no longer cost-effective to outsource their IT anymore. Here’s one key paragraph to show the effect of the IT outsourcing on labor costs in India:

Bangalore wages have just been growing like crazy. To give you an example, there is an employee of ours who took the first 5 years of his career to get from 1% to 10% of his equivalent US counterpart. He then jumped from 10% to 20% of his US counterpart in the next 1 year. During his time with us (less than 2 years) he jumped to 55% of the US wage. In the next few months we would have had to move him to 75% just to “keep him at market.”

So, India is quickly catching up with the US with respect to labor costs. I wonder if other companies will pull out of India too in the near future?

I’m sitting on the couch flipping between the NFL Draft and the Red Sox game on TV. I wanted to learn more about Brady Quinn’s background, so I went to his Wikipedia page. To say it’s “current” is an understatement. It’s predicting the future. Brady has yet to negotiate his contract with the Browns (because he was drafted less than an hour ago), and yet, this is what I read:

Brayden Tyler “Brady” Quinn (born on October 27, 1984 in Dublin, Ohio) is an American football quarterback who plays for the Cleveland Browns. Collegiately, he played for the University of Notre Dame football team through the 2006 season. Quinn graduated from Notre Dame with the degree of Bachelors in Business Administration (finance)

Wild. I guess Wikipedians stalk ESPN ;)

Furthermore, the Wikipedia page on the 2007 NFL Draft is being updated in real-time. Picks are up within minutes of being made.

I kicked my SongBird installation back into gear today. I have a few takeaways:

1. The Add-Ons community is buzzing. SongBird itself has a few interesting features, but the support through Add-Ons for Wikipedia, Hype Machine, iPod, and Scrobbling (and other cool hacks) is excellent. I’m impressed that this young project has already generated such a rich community of Add-Ons. I suspect the fact that they used the Mozilla Add-On implementation (XUL) was helpful because developers didn’t have to learn some new proprietary system in order to start scratching their own itches.
2. Maybe this is already obvious to people, but the internet is quickly becoming just a pile of data. It is the “Model” in the MVC architecture. SongBird is a new “View” on the Model. Instead of viewing websites as rendered by Mozilla Gecko in Firefox, SongBird has additional View modes such as Playlist View (which is a list of all MP3 linked from the rendered page) and Download View (where you can grab songs off a site to keep). This smells like the promise of the Semantic Web. The web is a database (Model), and you can unlock new value from an existing Model by designing new Views of the Model.
3. SongBird’s UI make me think that my own music library should be the least common listening experience. 90% of the left sidebar is used by bookmarks for various blogs, music stores, sites, and search engines. The remaining 10% is associated with my local music (iPod, local library, download history). That’s a radical shift from every other stand-alone music client, where 90% of the experience and UI revolves around managing your local files. SongBird wants to sing songs from The Cloud, and I dig it. It’s really expanding my listening habits.

Looking forward to watching SongBird develop.

…should be erased from the map. Another painful abuse of software patents is happening.

Outside.in tracks over 3,000 US neighborhoods for geotagged blog posts and placebloggers. They have aggregated a lot of interesting data, and recently released a taste of this information back to the public. They released a report called Inside America’s Top 10 Bloggiest Neighborhoods.

I was surprised to find that Newton, MA (a small, predominantly-Jewish community in Massachusetts which was one town over from where I grew up) ranked above tech centers like Potrero Hill, SF. Their brief description of Newton was pretty entertaining:

Comprised of 13 villages that form a bedroom community of nearby Boston. Home to the various campuses of Boston College, Newton has graced the top of the FBI’s annual “Safest City” study for the last five years.

That’s not the Newton I remember. When I think of Newton, I think of two things: they have the closest Mac store to my hometown and they have a great art-house cinema.

Update: I just noticed that on my Solar System Read a Mat in my apartment, Pluto is in the Solar System… but on the image on my blog below (taken from the Read a Mat site) Pluto is gone! Glad to see the Read a Mat company is keeping up with the times.

Original Post: Did anyone else have “Read a Mat” growing up? I bet a lot of readers of this blog did. For those who are unfamiliar, they are educational plastic placemats for kids.

I still use them, seriously. I think it’s a nice retro throwback in my otherwise modern Manhattan apt, but I bet some people see them and wonder: “does he have illegitimate children..?!”

Here are the two mats on my table:

Ebay’s potential acquisition of StumbleUpon is fun to play with.

The Value of a StumbleUpon User:

2.1mm users for $45mm dollars = ~$21/user. Now, that might sound like a lot of money, but one should look at comparable acquisitions to understand what a user is worth.

• Flickr had about 270,000 users one month before being acquired by Yahoo, and the price was rumored to be $35mm… lets round up the users to 300k to make up for the month gap, which come out to ~$117/user. Some of Flickr’s members pay for their service (unlike StumbleUpon) so it makes sense that a Flick user would be worth more than a StumbleUpon user
• At the time of the acquisition, Skype had 52mm users and the purchase price was $2.6B, which results in $50/user. 2mm of the Skype users were paying users, so again, it makes sense that Skype users are worth more than StumbleUpon users.
• MySpace had about 22mm users when it was acquired for $580mm. Therefore, a MySpace user was worth ~$26/user back in 2005. I think the reason that MySpace users are considered to be worth more than StumbleUpon users is because of the massive number of users that MySpace had (10x the number of users on StumbleUpon at the time of acquisition).

So, one can see how StumbleUpon fits into this landscape of user values.

The Value of a StumbleUpon Unique Monthly Visitor:

Let’s try the same exercise with Unique Monthly Visitors instead of Total Users…

According to comScore, StumbleUpon has 900k Unique Monthly Visitors. Fred Destin created a universe of comps for Uniques a few months ago based on market caps, biz dev deals, and rumors:

The Value of a Unique Monthly Visitor by site around Q2-Q3 2006:

• YouTube $23
• CNET $16
• MySpace as valued by the Google ad deal: $11.25
• Facebook at 1bn: $67
• Google: $272 !
• Yahoo $48

At StumbleUpon a Unique is worth $50 (which is $45mm / 900k Uniques ). That looks about right compared to Fred Destin’s universe of comps (right in between Yahoo and Facebook).

Strategically, I think Om’s on the money. Popular client-side software can be a Trojan Horse for other, more-profitable services. Try installing any Google or Yahoo software (Earth, Picasa, Y! Messenger, etc) and see how aggressively they push their browser toolbar along with it. So, Ebay owning more real-estate on the users’ browser toolbars is a valuable position to be in. They could partner with the search engine of their choice (for the right price), roll their own engine, or find other ways to monetize the space… whatever maximizes $/pixel of toolbar space.

Note: in this playful analysis, these are piss poor universes of comparables for StumbleUpon. I really should be using companies in the same sector (search, discovery, bookmarking, etc). But, there’s a significant lack of public data when it comes to total user numbers and even acquisition prices, so I had to make due with what’s available. Also, this analysis doesn’t take into account the future value creation at StumbleUpon or any of the comparables, which is unrealistic, but at least it’s an apples to apples comparison with respect to that inaccuracy.

I dig the recent meme of OpenCoffee Club sprouting up on both sides of the Pond. And, a big thanks to Nicholas Butterworth for taking the initiative to start the NY OpenCoffee Club.

I really like the personal interaction; I’m a big fan of the Meetup ideal of getting out from behind the computer.

Thursday’s at 9:15 AM @ the Starbucks in Astor Place. Hope to see you all there.

Jon Stewart almost completely avoided talking about the Virgina Tech shooting today. He basically said, “I’m not going to talk about it.” It’s a good choice, but the rest of the show leaves an achy feeling in my stomach thinking about all that he’s ignoring. I guess that’s part of the irony that the Daily Show is my primary source of non-tech news.

The shooting is just awful… and to happen in an academic institution, a place which strives to perpetuate the highest goals, integrity, dreams… ughhh. Sickening.

My thoughts are with the students and their families tonight.