The Gong Show

Greg Yardley recently published the following breakdown of Apple’s iPhone App Store applications listed at various pricing tiers. His insight was that “free” was no longer the most popular application price. Instead, $0.99 was the most popular application price. See below:

Many of the companies in the Union Square Ventures portfolio offer their services for free to end-users and find other ways to monetize usage. A significant part of the reason for this pricing decision is that any price (even one penny) is a significantly greater hurdle to jump when converting a visiting into an active user than giving away a service for free. Josh Koppelman best articulated this hurdle in his post on The Penny Gap.

I’ve talked about The Penny Gap on this blog before, and to summarize my thoughts: The Penny Gap is not an problem of economics, it’s an internet usability problem. The act of paying for something online (regardless of the cost) requires collecting so much more information (CC#, Paypal Acct, Exp Date, etc) which is subject to data entry errors and form fatigue… If paying $0.01 for a service had the same barriers to entry as paying nothing for a service, then I think The Penny Gap would almost completely vanish.

Returning to Yardley’s finding that “free” is no longer the most popular application price, the cause of this observation is that Apple has significantly improved the usability of paying for an application. Apple has made it drop dead simple for developers to charge for applications and for consumers to purchase applications. For developers, there’s no need to build a billing system, register for a payment processor, deal with chargebacks, etc; Apple makes charging for an application as easy as deciding on a price. For consumers, there’s no need to find your wallet, enter your CC#, create an account, etc when purchasing an app on the app store; all that info is stored in your Apple Account after your first purchase. That’s why “free” is no longer the most popular price on the App Store, because Apple has solved many of the usability problems that previous caused the friction which created The Penny Gap.

The terrible reviews across the board for The Love Guru made me wonder where it ranks on the list of the worst rated movies of all time. I decided to use Metacritic to find out.

Here’s a list of the all-time low scores for movies on Metacritic. The Love Guru is in a tie with a bunch of other movies as the 184th worst movie of all time. Granted, Metacritic doesn’t go that far back in time (the oldest movie on the list is from 1983), but it’s still fun to see how bad The Love Guru is relative to other movies over the last few decades. Also, note that Metacritic only takes into account professional critics opinions. Consumer reviews are not incorporated into the ratings on this list.

Once I found the all-time low scores list on Metacritic, I made up a simple game: find the worst rated movie that I can genuinely say I think is fantastic. I ended up choosing Billy Madison in a tie for 66th place as the most critically-panned movie that I genuinely love. What would you choose?

I’m surprised at the poor quality of @valleywag and @gawker on Twitter. These users are just links to the most recent blog posts on these respective properties. Why doesn’t Gawker Media empower their editors to create original content that runs over the Twitter accounts for their various blogs?

Are there any real attempts at create Twitter media properties? @KevinRose is the Twitter user with the most followers according to Twitterholic, but he is not a media property IMHO because his Twitter presence is not his business. The closest thing to a media property in the Top 10 on Twitterholic is @MacRumors, but @MacRumors does not contain any monetization in their Twitter stream or on their Twitter page, so it’s really just a distribution channel for the REAL media property, which is MacRumor’s website.

A skeptic might ask, how do you monetize a Twitter page? Well, you could sell your background image, you could sell your avatar image, or you could offer sponsored updates to be injected into your stream of updates. Perhaps an example would make the value proposition more clear:

Sample sales are short windows of time where high-end designer fashion labels get rid of excess inventory at deep discounts. It’s hard to discover when sample sales are available (they are intentionally underground and exclusive), and because the window of time when they are open is short, information about sample sales is very time sensitive (which is perfect for Twitter). One could imagine a Twitter media property that send updates about sample sales when they are first announced and again when they are actually taking place. The property would be a great way to engage the target demographic that like sample sales: wealthy, 18 – 35 yr old, more commonly female, fashion conscious. You could reach this audience through sponsored updates or selling background images.

This example is a little bit contrived because there isn’t a significant overlap between Twitter users and sample sale connoisseurs. But, I bet that as Twitter grows in popularity, we’ll start to see media channels with models similar to this example start to pop up.

I am fairly good about keeping my LinkedIn info up to date and adding contacts as appropriate. I just approved two new connections today. After doing those approvals, I decided to take a quick browse through the People You May Know section. It’s always interesting to see what LinkedIn thinks are the holes in my social graph, and since I keep my profile data and connections pretty clean in the system, the results of LinkedIn’s recommendations are often spooky in their accuracy.

So, I was really surprised to find a recommendation to connect with my old buddy “Jack Mehoff — Owner, internet porn for the blind.” Jack is a social animal with a grand total of 0 network connections, and he’s always boasting about the wild times he had at Armstrong University.

WTF? How is this a recommendation for me? Did LinkedIn get hacked? Is anyone else seeing this?

See screenshots below:

Turning to the blogosphere for style decisions is a terrible idea. If I asked bloggers how to dress, I’d end up in a blue shirt and khakis every day.

That said, I’m trying on new shoes today that I got for sale online. I’m not sure if I want to keep them. I like the color, they’re comfy, and they’re good for work, but I think the toe is weird, perhaps too dressy… sorta elf-ish. Should I keep them or no?

Here are the pics:

At the end of his post, Bijan asked an interesting question today: “What do you want from your browser?” I commented there in response, and then realized I’d written a post, so I’m reblogging here. I said:

I think there’s a lot of room for innovation left in the browser. I find that a lot of the actions I take in the process of browsing the web are redundant (the pages I visit frequently, registration processes, sourcing/importing media for content creation, the disconnected sites I use for search and discovery for different verticals). These are all sets of actions that could be improved or even radically redefined by a hacker willing to step out of the bounds of the traditional browser paradigm we’ve been using since the mid 90s.

Flock was a nice first step, but it was not quite different enough from Firefox to justify leaving behind my incompatible extensions. Besides, Flock was an incremental step forward. I’d love to see someone blow the doors off the barn and really challenge what I think of a browser today.

PS: Hey Disqus, there should be a dropdead simple way to reblog a comment I made elsewhere on my own blog. Like, as simple as blogging a photo from Flickr. I think very interesting behavior could emerge from such a simple feature (much like the behavior behind the simple “@” feature in Twitter).

To briefly review recent news: Microsoft is going to allow advertisers to set a “cashback” reward to consumers for purchases that originate from ads on Microsoft Live Search.

Think about the quality of companies that currently incentivize users to participate in advertising:

• AllAdvantage
• InboxDollars
• ClixSense
• Bux.to

Microsoft should be embarrassed to join that list of companies.

Some naysayers might argue that the list above is about CPC arbitrage; whereas, Microsoft’s new offering is essentially cutting consumers into the loop on CPA revenue. Ok, then we should change the list to the “Big Three” companies that dominate the Affiliate Network world:

• Comission Junction
• Performics
• Linkshare

Again, Microsoft should be embarrassed to join that list. These are ad networks of last resort for publishers, and they end up powering a lot of product-oriented splogs. Is joining this list seriously Microsoft’s silver bullet to beating Google?

Granted, Performics is technically a part of Google at this point, but I don’t believe that the Performics asset was a motivating factor in the DoubleClick acquisition. Google acquired DoubleClick because it was the fastest way to get a foothold in the display ad world. Considering Google’s recent aggressive actions to either lower the pagerank or de-index spammy affiliate network driven splogs, I think Google recognizes that paying anyone other than publishers is a slippery slope towards inauthentic engagement with ads.

Yet, I feel like I’m taking crazy pills. Based on the relatively positive (or at least curious) initial reception to Microsoft’s new CPA strategy in the blogosphere, it’s not obvious to others how silly this idea is. I can’t think of an example on the web where paying an end-user (the consumer, the browser)
has ever turned into a big business.

Paying end-users to do anything online consistently results in people gaming the system, automating clicks, or developing arbitrages that pollute the online ecosystem. Why should we expect Microsoft’s latest CPA initiative to be any different?

Google launched online health records. I was instantly reminded of the movie Gattaca. Gattaca took a pessimistic tone towards the nature vs nurture argument, assuming that everyone has an upper-limit to his potential for success predefined by his genes. In the movie corporations used this information to select the “most qualified candidates.” There is a passing reference to how this prejudicial practice is illegal, but, of course, corporations disregard for these laws and use rationalizations to mask their genetic biases.

We can’t parse DNA with Gattaca-esque accuracy yet, but we can see the expression of DNA in phenotypes and can make biased judgments based on those phenotypes. Some phenotypes (race, gender, etc) are obvious based on a quick visual scan, but many phenotypes require access to medical health records to know for certain.

With Google’s release of online health records today, I wonder if we are opening an opportunity for entities (individuals, corporations, governments, etc…) to access people’s health records with unprecedented ease. Could I download my neighbor’s health records as easily as I can download a copy of Gattaca? Fred mentioned he’s trying to make his health records public. I’m not quite there yet. Yet, at the same time, I feel a sense of inevitability about this whole process. Five years from now, I can’t imagine toting a file of paper medical records from one doctor to another.

Mark Cuban writes in his post “Beating Google” that one way to beat Google is to pay the owners of sites in the top 5 slots of the results page for the most popular keywords to remove their sites from the Google index. Thus, Microsoft (or Yahoo or a new competitor) could claim “I’m the only search engine with results from Engadget, Techcrunch, WSJ, etc….”

There’s a whole industry built up around doing exactly the opposite. It’s called SEO. People pay other people ridiculous sums of money in order to make their site rank as high as possible on results pages for as many relevant keywords as possible in Google.

Furthermore, SEM is a similar industry that has grown up directly in contrast with Mark’s idea. People see ranking highly in Google to be SO valuable, that they will pay to rank higher than their competitors for relevant keywords, and will pay on a performance basis per click (which, unlike SEO, is a marginal cost, not a fixed cost — read: blackhole on your bottom line).

If the Search market is currently setup such that people are paying in order to get into Google, you have a rough sense of how valuable it is to be highly ranked in Google. So, the amount of money it would take a competitive search engine to incentivize websites to leave Google would be something like:

(Total SEO Spent by Top-Ranking Sites) + (Total SEM Spent by Top-Ranking Sites)

Which, considering Google’s market cap (which only approximates the SEM side of this summation), is a ton of money. And this is just a calculation of the allowable of acquiring an internet visitor! The actual calculation that Mark is proposing is:

(value of a single visitor to a Top-Ranking Site) * (# of visitors driven by Google to a Top-Ranking Site)

which, is greater than the total SEM spend and SEO spend combined…. I just used the SEM/SEO spend combo to show you how large a sum of money Mark is talking about.

Time to go back to the drawing board on beating Google.