peanut butter. 
  Originally uploaded by megamommatron.

The blogoshere is abuzz with a leaked memo written in October by Yahoo senior VP Brad Garlinghouse dubbed the Peanut Butter Manifesto.  In it he warns that Yahoo is spread too thin and is all over the place.  Excerpt:

We lack a focused, cohesive vision for our company. We want to do everything and be everything — to everyone. We are scared to be left out. We are reactive instead of charting an unwavering course. We are separated into silos that far too frequently don’t talk to each other. And when we do talk, it isn’t to collaborate on a clearly focused strategy, but rather to argue and fight about ownership, strategies and tactics.

Our inclination and proclivity to repeatedly hire leaders from outside the company results in disparate visions of what winning looks like — rather than a leadership team rallying around a single cohesive strategy.

I’ve heard our strategy described as spreading peanut butter across the myriad opportunities that continue to evolve in the online world. The result: a thin layer of investment spread across everything we do and thus we focus on nothing in particular.

I hate peanut butter. We all should.

We lack clarity of ownership and accountability. The most painful manifestation of this is the massive redundancy that exists throughout the organization.

We lack decisiveness. Combine a lack of focus
with unclear ownership, and the result is that decisions are either not
made or are made when it is already too late.

We end up with competing (or redundant) initiatives and synergistic opportunities living in the different silos of our company.

• YME vs. Musicmatch
 
• Flickr vs. Photos
 
• YMG video vs. Search video
 
• Deli.cio.us vs. myweb
 
• Messenger and plug-ins vs. Sidebar and widgets
 
• Social media vs. 360 and Groups
 
• Front page vs. YMG
 
• Global strategy from BU’vs. Global strategy from Int’l
 
We
have lost our passion to win. Far too many employees are "phoning" it
in, lacking the passion and commitment to be a part of the solution. We
sit idly by while — at all levels — employees are enabled to "hang
around". Where is the accountability?

He goes
on to suggest how to remedy these issues, principally by picking its
best bets and getting rid of everything else. "Heads must roll," he
writes, as many as 15% to 20% of employees, and Yahoo needs to stop
managing by committee. These are all good (and somewhat obvious)
suggestions. The question is, will Yahoo follow them?

Yahoo has
done a good job of identifying and acquiring hot startups on the cheap
(Flickr, del,icio.us, Bix, MyBlogLog) but then fails to integrate them
with the rest of Yahoo, creating all those redundant properties
Garlinghouse lists. By leaving them alone, Yahoo has at least succeeded
in not screwing them up, but it also has succeeded in creating a lot of
silos.

Yahoo is in a tough spot. It needs to stay on top of the
latest Web fashions, but at the same time not alienate mass audience of
hundreds of millions of people who visit it each month. In an interview
I did with Garlinghouse a few weeks ago, he told me:

It
is certainly not a simple thing to do. The first thing is you have to
fundamentally understand what users care about the most. Too often
business people try to deliver the coolest, whiz-bang widget they can
do that will appeal to 1% of users. You have to understand what the
mainstream users care about the most. I think it helps that I am from
Kansas.

The Yahoo home page is the number one homepage, with 300
million monthly unique visitors. How do we appeal and exceed the
expectations of all of those users? Therein lies the crux of a delicate
balance between delivering what the users expect , and anticipating
what will Wow them. How do we make a user say, ‘Wow, I did not even
know you could do that.’ Some companies over-invest in the table
stakes, and then they become mundane. The secret sauce is effectively
balancing excellence in the table stakes with Wow.

My
guess is that Garlinghouse’s next move is to start tying different
parts of Yahoo together in a more cohesive fashion. And communications
products like Yahoo Mail and Messenger will be the string. It’s no
coincidence that Google is similarly trying to pull its various
products together instead of launching five million different ones a
day. People like to be Wowed with simplicity.

  March 28, 2006 - 17:19 
  Originally uploaded by Hugo*.

Universal Music made good on its promise to sue MySpace, filing a lawsuit yesterday claiming copyright infringement by MySpace members.  The two companies had been in negotiations to enter a licensing deal similar to the one Universal had struck earlier with YouTube, but Universal apparently also wanted to be paid for past infringements and the number MySpace put on the table wasnot high enough.  That’s when Universal and reached for its legal stick.

Is this just another negotiating tactic, or is Universal willing to take this copyfight to the courts?

One person, Fox Interactive Media’s Ross Levinsohn (the News Corp. exec originally responsible for buying MySpace), isn’t sticking around to find out.

The promise of Web-based enterprise software has been a long time coming.  But for the past few years the only real standout in this category has been Salesforce.com, which now has more than half a million paying corporate subscribers and is on track to hit nearly $500 million in revenues this year. 

But lately I’ve noticed that some newcomers are gaining traction delivering Web 2.0 software to corporations.  These include Zimbra, Success Factors, and Rearden Commerce (which just got a $22.5 million investment from American Express).

Zimbra (an original Next Net company) now has about 4.5 million individual paying subscribers using its Web-based corporate e-mail, contact, and calendar software. And it only just launched last February. At a bare minimum, Zimbra is getting $1/user/month, CEO Satish Dhamaraj tells me, noting that the vast majority of his subscribers come from bulk deals through ISPs, and for corporate customers he gets $28/user/month or more.  So Zimbra is making at least $4.5 million per month (or about $50 million a year) in revenues.   Dhamaraj told me last week that his startup is not yet profitable, but it is “pretty close.”  He added:  “We are growing more than 100 percent in both revenues and customers, quarter over quarter.”  That’s sequentially.  “Next quarter we are going to double,”  he affirmed.  (Dhamaraj didn’t show me any audited financial statements to back up this claim, so I am taking him at his word).

SuccessFactors,
which is an on-demand, Web-based performance-review application, is
also growing like a weed.  It started three years after Salesforce.com,
and already has 2 million users spread across nearly 900 companies,
including Kimberly-Clark, Marriott, and Wachovia.  At $50 a pop, that
suggests revenues of at least $100 million (of course, with volume
discounts it could be less).  CEO Lars Dalgaard wouldn’t confirm the
exact number for me when we spoke recently, but he did say, “In 2005 we
grew exactly 99 percent and in 2006 it will be over 130 percent."  He
says the company was profitable it’s first four years, but it is not at
the moment as he plows more money back into growth even more
opportunities.

And then there is Rearden,
which has been struggling to gain traction for the past six years for
its Web marketplace for business services.  With the Amex deal, Rearden
will power a part of American Express Business Travel’s Website for
booking things like cars, airport parking, package shipping, restaurant
reservations, tickets, and conference calls.  Think of Rearden as an
eBay for corporate services that lets each company customize what their
employees see based on the contracts and expense policies each one has
in place.  But—like Salesforce or Zimbra or SuccessFactors—the software
is hosted on the Web, making all the complexity and integration go away
for the companies using it.

Even when customers are given a choice between a hosted Web app and
the old-fahshioned client-server app that sits in their data centers,
they are now opting more and more for the hosted app.  Zimbra, for
instance offers both because some companies for compliance and other
reasons simply need to host their own e-mail.  "We don’t want to go to
the extreme Benioff position of saying, ‘If you don’t want it hosted,
don’t talk to us,’" says Dhamaraj.  Yet 80 percent of his customers
would rather that he deal with all the hassles of running e-mail
servers.  (And since the software is hosted, he can keep adding features, like spreadsheets and a word processor and the ability soon for compliance officers to search through multiple mailboxes at the same time).

Those enterprise IT folks are finally catching on.

In the last issue of B2.0, I wrote about a startup called Critical Mention that is doing some amazing things with video search (through CriticalTV) and syndicating clips (through ClipSyndicate) of local TV news on the Web.  Excerpt:

By indexing the
closed captions for all the video stored on CriticalTV, the service
creates searchable transcripts on the fly.

And the service is still getting smarter.  Using
speech-to-text software recently licensed from IBM Research, CriticalTV
will soon monitor video that isn’t closed-captioned and also search
Arabic-language TV and translate it into English. Customers ranging
from corporate PR officers to FBI analysts to oil executives will
continue to be alerted via e-mail (with a link to the video clip)
minutes after a company, product, or terrorist name is mentioned on TV
here or abroad.

But while CriticalTV pays the bills, [CEO Sean] Morgan’s ambitions go beyond mere monitoring. In an era when TV stations are losing their audience to channel
surfing, commercial skipping, and the Web, the ClipSyndicate site
promises to find a better audience for news broadcasts. Morgan has
already struck deals with more than 65 affiliates and is in discussions
with all the major station groups to host clips from their local news
and other shows.

Once
the video is on ClipSyndicate, publishers can search for segments,
splice them, and stream them through their own sites. In effect, Morgan
is turning one-time TV broadcasts into media chunks that can be remixed
for more exacting online audiences.

ClipSyndicate will insert
15-second ads in front of each video stream and split revenue 50/30/20
with the affiliate and the web site, a model similar to NBC’s new
business, the National Broadband Co.

The party is still rockin’.  But how long before the growth starts to peter?

Photo-sharing startup Slide received a new round of venture capital today from Khosla Ventures and Mayfield.  I chatted with Slide founder Max Levchin (also a co-founder of PayPal) about the company.  He was tight-lipped about the actual amount he raised (speculation puts it at north of the $8 million he got in his last round, or more than a total of $20 million raised so far).  He was also tight-lipped about exactly how many people are using Slide. 

But the numbers must be pretty good if ex-Kleiner rainmaker Vinod Khosla decided to invest (moreover, Khosla does not typically invest in consumer plays).  comScore ranks Slide as the No. 11 most visited photo site with 3.9 million visitors in October, after Shutterfly (No. 10), SnapFish (No. 9), Flickr (No. 6), and Photobucket (No. 1).  Even Slide’s Alexa graph shows steep growth.  But Levchin does not see Slide as competing with other photo-sharing sites.  He tells me:

The service is fundamentally about self-expression, about letting people express themselves online.  It gets confused with photo sharing. What we do is give you the ability to customize your photos—and perhaps other forms of media in the future—by letting you take what you produce and turn it into a story.  You can think of a slide show as the poor man’s video.

Slide lets you take your digital pictures and present them as a slide show on the Web or your desktop.  The slide shows (which can be either private or public) are all available on Slide.com, but you can also show them on other Websites such as your blog or MySpace page.  What Levchin really wants you to do, though, is download Slide’s desktop software, which lets you make your slide shows into a screen saver.  (Convince your mother to download it and she can get streaming pics of the kids all day long). 

Explains Levchin:

The business model is rooted in this desktop strategy.
The thing we had in mind in the beginning was to build a system that
lives on your desktop that you really want to see. It is
consumer-centric, person-to-person. But it does not need to stop with
what I made for my parents. RSS has made it possible for me to see any
stream of content. 

We are trying to understand what our users are trying to do.  Ultimately, we are building a discovery engine that helps people find
all kinds of content on the Web and deliver it to them.  We
want it to become a delivery engine for content you did not know even existed.

The way this discovery engine will work basically is to look at what slideshows you watch, see who else watches those same slideshows, and then recommend slideshows the other people watch but you don’t.  It will be like Amazon’s "People who bought this book also bought that book" feature, which Levchin says someone from Amazon once told him was the "single best revenue-enhancing feature they ever had."

Okay, but how does Levchin eexpect to make money?  There are no traditional ads on Slide today.  But there is nothing stopping marketers from creating their own slideshows.  And about 80 or 90 of these are featured on the site’s directory and the desktop software, where they function essentially as visual catalogs.   But in order to work as advertising, they must work first as content because no one is forced to watch them.  Once people who are looking for them do find them, reports Levchin:

The odds of you actually buying something from one of these after you choose to go to it is 9 out of 10.  By the time you find the Zappos shoe catalog you are probably in the mood to buy shoes. 

That’s the same attitude YouTube CEO Chad Hurley (another former PayPaler) has about advertising.  I interviewed Hurley a few weeks ago, and he told me almost the exact same thing:

What ads are becoming, even the Superbowl ads, are great pieces of content potentially, if done the right way. If people enjoy those ads it should rise to the top like any other piece of content.

It is a much more organic way to market yourself. We really believe you don’t need to force your message on the community, With all of these ads, with what Wendy is doing, advertisers are putting these videos into our system like a piece of content. If the viewer does not want to watch it, they don’t have to watch it.  It is a democratic way for the community to determine what is interesting to them and what will continue to rise to the top. Advertising in the past has not been optional.

I like the idea of optional advertising.  But where Levchin and Hurley need to be careful with is to make sure the proportion of advertising to content never gets out of hand.  Otherwise, people using these services will stumble upon advertising thinking it is something else and feel cheated when they realize what they are watching is just a dumb ad for Wendy’s (or Zappos).

The conference business is back, and now there is a Website where you can search and review more than 16,000 different conference options.   It’s called Confabb.  The site has lots of features—everything from speaker ratings to tags to social networking (i.e, finding out where the best after-parties will be held).  Confabb competes with more general event database sites like Eventful, which has its own conference category.