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July 31, 2006

Millionaire File-Sharer To Fight Music Industry Law Suit

The Recording Industry Association of America (RIAA) has filed thousands of copyright infringement lawsuits against filer sharers on networks like Kazaa and Napster, who have all accepted to pay damages to avoid going to court.

The recording industry has artfully developed a variation of the "John Doe" lawsuit program that offers plaintiffs the opportunity to settle. After learning the identity of an illegal file sharer through a "John Doe" lawsuit, but prior to amending the complaint to reflect the infringer's name and address, the RIAA offers the opportunity to settle the case before proceeding further with the litigation. So far, all the accused Kazaa and Napster users have had no recourse but to settle, paying $2000-$3000 to the RIAA.

Enter Shawn Hogan.

Shawn is founder and CEO of Digital Point Solutions, and with clients like Disney, he is not short of a buck or two. Last November Shawn got a call from a lawyer at the Motion Pictures Associaiont of America (MPAA), in which he was accused of downloading a film on BitTorrent, another file sharing network. He was given warning that he was to be taken to court unless he paid $2500.

Shawn denied any wrong doing, and has evidence that he had already purchased the DVD in question. After some careful thought, Shawn has decided to set aside a hundred thousand dollars to pursue the case through the courts. Shawn has to countersue and win damages so it sets a legal precident for a class action lawsuit against the MPAA.

The MPAA has responded, "Mr. Hogan has said, he is absolutely going to go to trial, and that is his prerogative" says John G. Malcolm, the MPAA's head of antipiracy. "We look forward to addressing his issues in a court of law".

If Shawn wins the case, the MPAA will have stop its terror campaign on the millions of file-sharers. Morever, they will have to pay damages to many of the people from which they extorted a settlement, typically children, students and pensioners. A heroic deed.

Wired article reported the case as Shawn Hogan Hero. Shawn insists on his blog that he is not a hero, and he directs the thousands of donation offers to the Electronic Frontier Foundation which fights the copyright abuse by the music and film industry.

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July 28, 2006

Google In Skirmish With W3C's World Wide Web Architecture

The incident ocurred at the annual conference of the American Association for Artificial Intelligence (AAAI) where Tim Berners-Lee, the founder of the Internet, got tough questions from Google's Director of Research after his keynote speech. The disagreement was on the Semantic Web, or the future of information on the Internet.

Tim Berners-Lee's proposal of the Semantic Web is, put simply, that each website provide structured information, i.e. a data feed, of its contents. Same as blogs provide RSS files of their information.

Data feeds are becoming increasingly important ways to transferring information. Witness the rise of RSS as a means of transferring news and blog information. Similarly, online ecommerce is reliant on structured product data feeds to transfer information to and from merchants, shopping portals, suppliers and customers.

Tim Berners-Lee, the inventor of world wide web originally conceived the Semantic web vision, an architecture design for the web where data feeds follow a universal standard, and the World Wide Consortium (W3C) is working currently on this under his direction.

The aim of Dr Berner-Lees vision is that all the information on the web be universally machine readable and understandable. Such that generation and processing of ecommerce data feeds, and Gooblebot spidering of the internet, will be disappear and be an automatic part of the internet infrastructure.

Unfortunately, commercial interests are about to intrude on Dr Berner-Lees and the W3C consoritum's work. Already, online retailers are attempting to agree on standards for the product data feeds used to transfer product and price information between suppliers, ecommerce merchants and online shopping portals.

Enter Google and its already heavy investment in data feed standards, namespace and its own Google Semantic Web - Google Base has an intricate semantic definition for its bulk upload feeds.

Peter Norvig, Director of Research at Google challenged Dr Berners-Lee over problems with his Semantic Web . Dr Norvig's problem is over cheating and incompetent webmasters:

What I get a lot is: 'Why are you against the Semantic Web?' I am not against the Semantic Web. But from Google's point of view, there are a few things you need to overcome, incompetence being the first," Norvig said. Norvig clarified that it was not Berners-Lee or his group that he was referring to as incompetent, but the general user.

"We deal with millions of Web masters who can't configure a server, can't write HTML. It's hard for them to go to the next step. The second problem is competition. Some commercial providers say, 'I'm the leader. Why should I standardize?' The third problem is one of deception. We deal every day with people who try to rank higher in the results and then try to sell someone Viagra when that's not what they are looking for. With less human oversight with the Semantic Web, we are worried about it being easier to be deceptive," Norvig said.

"While you own the data that's fine, but when somebody breaks and says, 'If you use our enterprise system, we will have all your data in RDF. We care because we've got the best database.' That is much more powerful," Berners-Lee said. To illustrate his stance, he used the example of bookstores initially withholding information on stock levels and purchase price but then breaking them as others did.

Dr. Berners-Lee agreed with Norvig that deception on the Internet is a problem, but he argued that his design for the Semantic Web was complete and also solves the problems of identify the originator of information, and trusted and secure feeds. Dr. Berners-Lee concluded that

"Google is in a situation to do wonderful things, as it did with the Web in general, and add a whole other facet to the graphs--the rules that are testing which data source. It will be a much richer environment

Like it or not, the World Wide Web consortium, will have to keep Google happy with its Internet Information Architecture, as Google is currently the biggest single consumer and provider of information on the Web.

[EUCAP is invested in Enclick Data Feed Service: Enclick data feed service for ecommerce merchants and its shopping portal]

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July 27, 2006

First Napster and Now Kazaa

The peer-to-peer network has also agreed to pay $100m (53m) in damages to the record industry. damages to the record industry.

The large size of the settlement indicates how much Kazaa is earning from its advertising and distribution deals. Thanks for contacting Sharman Networks Limited, the company that exploits the Kazaa network offers the following services:

  • The distribution and promotion of licensed content; deliver games, music, software and video securely through Altnet.
  • Advertising inventory is sold by ad-partners. all sorts of campaigns, subject to our code of practice, using the most powerful worldwide ad-serving technologies.

At its peak the site had more than four million simultaneous users. The Kazaa software has been downloaded 239 million times. With such a reach the advertising model of the business has obviously been very lucrative. It has taken 5 years of legal chasing for the RIAA to bring enough pressure to bear on the elusive company.

The chief executive of Sharman Networks, Nikki Hemming, said the settlement "marks the dawn of a new age of cooperation" between file-sharing services and the entertainment industry. "This settlement ensures that we will be working together with the content providers to the benefit of consumers, businesses and artists," she said.

Their profit margins will no doubt suffer as they shut down their network of hundreds of millions music downloaders, and start living on wafer thin profit margins that the music industry allows legal music download sites.

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July 25, 2006

Data Feed Standards Conflict Looming Between Google, Amazon and Shopping.com

The National Association of Retail Technology Standards (ARTS) has embarked on the Unified Data Feed Standard Project. The standard aims to unify the data feed templates used by all the shopping comparator sites.


yahoo Shopping



The problem is that merchants looking to be included in these engines need to handcraft a data feed of product information and price for each shopping portal. The work adds a considerable overhead since each of the shopping portals has a widely different template for the data feeds.

But an overview of the data feed standards at Amazon and Google Base shows each has considerable investment in disparate systems. Unifying data feed standards will require considerable investment, and disruption of current partners and affiliate networks for all shopping portals, and price comparators.

In the mean time, many merchants are currently opting to outsource generation, optimisation and submissions of data feeds for their ecommerce site to specialist players like Enclick Online Solutions.

[Disclosure: EUCAP Partners is invested in Enclick Ltd - data feed provider and its shopping portal]

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July 24, 2006

Scoble Reaches Mainstream Readers Finally

Robert Scoble, famous Microsoft blogger finally sees his book "Naked Conversations" selling in numbers. Published in January, with great blogosphere A-list support and promotion, it is only now selling in numbers, ranking 500th in Amazon. His explanation, I am reaching the mainstream

Back in January, our publisher, Robert and I were hearing a phenomenal amount of praise and we thought we had hit it out of the park. In fact, we were hearing the amplification of an echo chamber that we had warned about in Naked Conversations and we had merely made it to first base.

What's happening now is that the word of mouth engine has motored past blogging's inner circle. And that is helping us tremendously. What I also think is impacting us is a Long Tail factor, a book who's strong takeoff is anything but long ail behavior.

From Naked Conversations: Naked Conversations: A Long Tail Case Study?.

Scoble's book is finally reaching its intended audience the mainstream company PR teams who are starting to experiment with blogging as a corporate communication tool.

ADDENDUM CORRECTION: The blog entry regarding sales of "Naked Conversations" was penned by Shel Israel (co-author), and not the-famous-one Robert.

(Sorry Shel)

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July 20, 2006

Achilles Heel of Web2.0 and A-List Blogs: Attracting the Mainstream

Many web2.0 companies, blog networks, and even A-list bloggers are struggling to generate sales. But, being popular among bloggers is not generating the wished for revenues. Enthusiast bloggers are currently too few, notoriously fickle, and do not buy everything they sample.

The essentials to keep in mind for web2.0 ventures are three, in order of importance

  • Provide value to the Client: a value proposition for the client - makes or saves him money
  • Clients have money and an immediate need
  • Be Unline the rest - better than the alternatives in some way

Early adopters, unfortunately, do not behave like Clients with Money - often on a sampling spree as they delight in trying free samples of many different products

crossing chasm

A mainstream niche, shown in the figure, must be part of a startups vision right from the beginning. A startup's initial clients will likely be early adopters who help bootstrap the company, and do the viral marketing, but at some stage the startup must cross into a mainstream customer segment, and leave early adopters behind.

Enthusiast blog readers and early adopters are essential for viral marketing, but are ultimately a means to an end, before maintream readers arrive.

Another much debated issue is uniqueness: Differentiation is essential for strong growth. But if demand outweighs supply, differentiation can be secondary. Many a life-style company makes a living, and provides employment for its staff, without significant differentiation.

A good breakdown of 11 Suggestions For Not Being a Dot-Bomb 2.0

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July 18, 2006

Google to Locate its Mobile Innovation in London

London is to be the hub for mobile innovation for Google, Deep Nishar, Google's director of wireless told Times Online. Mr Nishar has no doubts about the size of the global mobile market:

“You only have to look at the global trends for mobile use and PC use to see where our business is going,” said Mr Nishar. “In India, mobile-phone ownership outweighs PC ownership by a ratio of two to one. And there are five million more mobile-phone users coming online every month. By the end of this year there will be more mobile phones in India than in America.

In Britain there is one mobile phone for every person, while in some parts of Scandinavia mobile ownership is almost double that rate. “Looking at these numbers, it becomes very obvious that in the future people will want to access information on the web with a device they carry with them.

According to Mr Nishar, Google is reorganising the way it presents search results on the internet to conform better with mobiles. The research is badly needed as Google's current mobile search service lags behind others in quality.

Google's biggest problem is that the mobile search index is not populated with native xhtml (WAP 2.0), mobile content, but rather by wap 2.0 translations of normal web pages. The resulting mobile content served from Google caches is poor to the point of unusable.

Enclick provides mobile weather forecast service, which is one of only a handful in the world. Yet Google has trouble ranking and prioritizing a quality weather forecast in its mobile search, serving a cached translation of html content instead.

It is time to move onto the full WAP2.0 standard.

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July 17, 2006

Make a donation to Yellowiki

Yell Limited have accused Yellowikis of "Passing Off". The largest publisher of yellow pages directories in the world have written to Paul Youlten (co-founder of Yellowikis) saying they believe Yellowikis is

"plainly purporting to be associated with (Yell)" and "this amounts to a misrepresentaion... which may result in third parties associating (Yellowikis) with our client (Yell)" ... "The continued presence in the market of your website will cause substantial damage to (Yell's) good will and reputation".

Yell's solicitors are demanding that:
  • the Yellowikis site is shut down
  • control and ownership of the domain name is passed to Yell
  • compensation is paid to Yell for loss of profits
  • Paul and Rosa agree never to set up another competitor to Yell

In true creative commons style, Rosa & Paul Rousen are raising funds to cover the legal fees to fight yell.com's cease and desist threat. As of today, they have covered over £1000 of the £1750 needed to cover.

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July 14, 2006

Nick Denton Struggling to Monetise with the Early Adopter Market

Nick Denton's closure of two of his blogs in his blog media network has caused outrage among some of the blogosphere purists. A classic response from early adopters, who often ignore profit-loss concerns in the object of their affection.

We have had similar responses among our online communities, for instace the enthusiast members of our online financial information forum.

Many web2.0 companies, blog networks, and even A-list bloggers are struggling to monetise their brand asset. But, being popular among the early adopter consumer segment rarely generates the wished for revenues. Early adopters are too few, notoriously fickle, and do not buy everything they sample.

Crossing the chasm between the enthusiast and the mainstream users is an exercise in targeting, sub-segmenting and lots of patience.

It may take a year or two for blogosphere early adopters to be outnumbered by arriving mainstream users. Then the blogosphere will cease to be shocked by the reality of a profit-loss statement. Even smartmobs need to eat.

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July 10, 2006

Huge turnout at Chris Anderson's Long Tail Talk

Over 80 people turned up to hear Chris Anderson talk on his "Long Tail" theme. A testament to how many people earn a living from the "Long Tail" - which includes several of our investment portfolio companies; i.e. product feeds to promote your long tail and dynamic page indexer for your product catalogue long tail.

Thanks to Ian Forrester for organizing the event.

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July 7, 2006

Yell.com Threatens to Shutdown Yellowikis

David versus Goliath story; an example of monster corporation taking advantage of the current pro trademark and copyright legislation to kill off a startup. Picked up from Ross Mayfield's Weblog: Yell Threatens to Shut Down Yellowikis.

Yell.com is already under investigations for monopoly abuse of the directories market in the UK. Yell.com recently bought TPI, yellow-pages Spain, to maintain market growth in spite of Office of Fair Trading investigations in the UK. The architypal incumbent ex-state monopoly.

Yellowikis is a yellow page service in wiki format. Rosa Blaus suggested to her father, Paul Youlten, that they set up Yellowikis after she noticed small businesses were deleted from Wikipedia for not being "encyclopaedic".Yellowikis has been growing at 8.7% month-on-month and has 494 editors and about 5,000 articles listed.

Yell is demanding that Paul and Rosa close down the website, transfer the domain names to Yell and agree to pay damages to Yell for loss of profits. Yell made $2.4bn in 2005, whereas Yellowikis had a loss of $500. The $500 was used to print T-shirts promoting Yellowikis at the Wikimania conference in Frankfurt.

Yellowiki can argue jurisdiction, since Yellow Pages is not a trademark in the U.S. It is, however, a trademark in the U.K. It would be interesting to see the verdict on geographic jurisdiction from whatever international court arbitrates this case. I hope WIPO does not get involved since, from past experience, they bias towards encumbents.

Given the dubious nature of the yell.com case, Paul and Rosa may survive the cease-and-desist and its subsequent arbitration with a little legal help from a Creative Commons institution, and digital rights activitists at the EFF.

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July 4, 2006

Lifestyle Companies - The Scourge of VC Portfolios

In a moment of weakness marketing guru Seth Godin muses that "So, what's wrong with small business?". In VC culture, stable no growth companies - or lifestyle companies - are disaster investments little better than bankruptcies.

Barings Bank observed in a recent review of startup investments that 20% of companies developed into substantial profitable businesses, 20% failed and lost all equity, and 60% drifted sideways often regressing to life-style businesses for a small group of owner-managers.

The fact is that an investor, bank or VC fund, does not inject money into a business to improve the founders life-style and status. A VC fund usually has a 5 to 7 year window in which to realize the value of their investment. Investors want growth, preferably in multiples of 10. Life-style companies clutter up a portfolio, and require investors to negotiate a buy-out with managers. Not quite bankruptcy, but not much better.

However, ultra-growth comes at a price always. No pain, no gain. Or in financial notation, no volatility - no return. Startup owners have to suffer through extreme risk and volatility in order to accomplish growth. Life is easier and safer for the small business owner, happy with his place in the status quo.

But is safe not risky ? With increasingly dynamic markets, globalization, a stable life-style company can have some nasty surprises as competitors, with greater economies of scale, descend on its little niche. Everybody has to acquire an appetite for change, either gradual or in big lumps. Small companies are not what they used to be.

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July 2, 2006

Net Neutrality Threat Puts Central Internet Hubs Under Pressure

Sovereign House in Docklands, one of the Enclick server sites, also houses the London Internet Exchange (LINX). The biggest internet hub, or Internet exchange point (IXP), in the world. The internet traffic resulting from 95% of UK internet users shunts through the LINX IXP as it transits to and from 200 ISP companies. Traffic peaks routinely exceed 100 Gbits.
Enclick Shopping channel Server Racks

Almost half of the total Internet routing table is available by peering at LINX. The LINX "collector" router contains some 57,000 routes which are obtained purely by peering with LINX members.

The Docklands Internet Exchange Point is the most central internet hub in the world, with least degrees of separation from any server or user on the internet.

LINX is a mutual, not-for-profit organization jointly owned by more than 200 members, both ISPs and content delivery service providers, from the UK, mainland Europe, the USA, Africa and the Far East. The picture shows the view outside its Sovereign House datacenter. Docklands Datacenter

As a common infrastructure point, LINX also acts a common discussion and regulation point between content and telecom companies. For the good of the internet is one of its central tenets. An example of this vision is LINX lowering of fees for small ISP to connect to the central internet hub.

LINX's future is in peril though, whether it survives will depend on how it navigates the Net Neutrality debacle. Telecom companies are to acquire the right to charge for transit as well as delivery of internet traffic.. Transit points like LINX have so far been exempt from commercial interests, as all traffic was treated equally. From the moment tariffs can be levied legitimately on traffic transit, internet hubs become commercial battlefields.

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