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October 31, 2006

Lemonde Newspaper Moves Its Blogs to Open Source Software

lemonde

Formerly powered by "All Rights Reserved" software, TypePad, Le monde's blog service is now powered by WordPress Open Source software.

Loic Le Meur, European Director for TypePad, must be smarting from the loss of such a reference client. An ultra conservative staunch old world newspaper joining the Free Open Source Software party. There must be some mistake.

[Via Le Monde moves to WordPress Toni’s Garage]

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Why is Entrepreneur a Dirty Word in Europe ?

Such are the questions that bemuse the 2006 Nobel Prize winner in Economics, Edmund Phelps. In his opinion, Europe's experiment with "social market economy", which creates economic growth through market intervention rather than startups, is failing.

The introduction of institutions to protect "stakeholders" and "social partners" of the free market economy is resulting in low GDP growth and high unemployment. The employer confederations, trade unions and monopolistic banks are giving rise to "high context" political environments, where the individual entrepreneur's dynamism and creativity are being shut down.

In attempting to correct the free markets excesses, seen in the America capitalist system, the European interventionist policy is killing off its efficient market economy. The European market favours established players and dampens the input of independents and outliers. In a top 10 list of startup friendly countries, Europe has one of the most hostile environments for startups, which deprives it of its essential seed bed of growth, the startups and entrepreneurs.

Our economy is more dependent on true free enterprise and the work of real entrepreneurs than it has been in over one hundred years. This is no time for us to embrace the kind of socialized entrepreneurship we see in much of Western Europe. [Prof. Phelps]

Eastern Promise: Asian Entrepreneurs

Other economies are harnessing and empowering individual entrepreneurs. In third world countries entrepreneurs are the key tools for economic recovery of nations, as signaled by the 2006 Nobel Economic Prize to Dr. Muhammad Yunus and the Grameen Bank. Their revolutionary micro-credit loan programs empower third world entrepreneurs to enter Global Trade Markets. According to the Norwegian Nobel Committee

Every single individual on earth has both the potential and the right to live a decent life. Across cultures and civilizations, Yunus and Grameen Bank have shown that even the poorest of the poor can work to bring about their own development.

My few experiences with people in harsh economic environments is that they demand the opportunity to earn a living in dignity, and feed their families; not free hand-outs. They want to trade, and a chance to take part in a capitalist market. Their choice path to a sustainable high standard of living.

Social entrepreneurship is the new Peace Corps.

The best way to give back to a community: become an entrepreneur on its behalf. Social entrepreneur association Ashoka defines a social entrepreneur fellow as follows

Ashoka Fellows are leading social entrepreneurs who we recognize to have innovative solutions to social problems and the potential to change patterns across society. They demonstrate unrivaled commitment to bold new ideas and prove that compassion, creativity, and collaboration are tremendous forces for change. Ashoka Fellows work in over 60 countries around the globe in every area of human need.

unitus microfinance

Bhagyamma Vadla, left, started a dairy with $674 from Unitus Global Microfinance. She is the kind of entrepreneur eBay founder Pierre Omidyar is hoping to fund with his $100m donation to Tufts University microfinance program.

The American Dream

In the US, entrepreneurs are seen as wealth and employment creators. Culturally the entrepreneurial dream is deeply entrenched in everybody's lives. How many taxi drivers in New York, Los Angeles, Boston or Chicago, inflict their startup dream on their rides; be it private jet company, general services firm, limousine services, they all have a dream and are not ashamed to pitch it.

Professor Phelps is quick to trace the excesses of the American capitalist market to a failing of the American electoral politics, not the free market itself.

Only the Brave Declare Themselves Entrepreneurs in Europe

I remember negotiating hard to omit details of my company acquisition in the Libertysurf IPO filing in 2000. Where else in the world does an entrepreneur seek less press coverage of a good outcome ?

Professor Phelps speculates that Europeans associate entrepreneurs with entrenched wealth and power...

....it appears that the recent street protesters associate business with established wealth; in their minds, giving greater latitude to businesses would increase the privileges of old wealth. By an "entrepreneur" they appear to mean a rich owner of a bank or factory, while for Schumpeter and Knight it meant a newcomer, a parvenu who is an outsider. A tremendous confusion is created by associating "capitalism" with entrenched wealth and power.
from "Dynamic Capitalism: Entrepreneurship is lucrative--and Just", Edmund Phelps

As my company's communication director can attest, pushing company founders to interact with the media is more akin to herding cats than advising a company officer. Few places in the world have an entrepreneurial community so intent on discretion, and less self promoting than Europe.

Cultural change is inevitable though; American trained entrepreneurs are spreading all over the world, and rattling European cages. Martin Varsavsky is an excellent role model, with his irrepressible baiting of established and "high-context" European institutions. Spanish Telecoms giant, Telefonica, might have won the first battle against Varsavsky's Jazztel telecom challenge in 2000. But he is back for round two of his fight against incumbent state backed monopolists. He describes the progress of his free wifi networking company FON in his ebullient blog entries.

loic le meur

Another European entrepreneurship standard bearer is Loc Le Meur, a successful entrepreneur and political lobbyist. His blog is a great source on the political state of affairs for entrepreneu's in France. His recent endorsement of Nicolas Sarkozy at the next 2007 presidential elections has caused controversy in France. Loc explains

The reason I did that is that Nicolas Sarkozy, currently #2 in Government and future candidate is the only politician in France to my knowledge to say he wants to transform France into a "nation of entrepreneurs" when entrepreneurs are often seen as "enemies of the State" these days, so I can only support him. Of course, many people disagree.. Loc Le Meur

Even I find myself blogging freely about entrepreneurs. Then again, I am now based in the UK, which embraces unfettered entrepreneurship.

[Via | Business Blogs - RSS Feeds - Business Case Studies | Business Thought Leadership | BNET]

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Lycos Acquires German Online Shopping Technology

Lycos Europe, european online portal has acquired Mentasys, shopping software provider, for €30m and an additional performance related €14m. Mentasys software connects sales networks with intelligent product advisors. The software facilitates the sales process. Mentasys' 60 staff doubles Lycos' shopping technology development team. According to Antoine Boulin, MD of Pangora HQ in France.

Pangora and Mentasys competencies are very complementary. Pangora brings its expertise in front-end technologies, sales and international distribution. With this new partnership, Mentasys brings know-how in back-end technology, product data and reviews... [Free translation]

Lycos, european online portal, is investing in its white brand shopping portal Pangora. Christoph Mohn, CEO de Lycos Europe declares

We are convinced that more and more purchasing will be done online. European online shopping sector has double digit growth every year. Lycos Europe has a strong position in the sector and is constantly improving its performace thanks notably by its Mentasys acquisition. It's strong expertise, specially in B to B, and its white brand shopping solutions will help us in more than our German market. We forecast these sales figures in other markets like UK, France and Italy. [Free translation]

Pangora's own brand shopping site is evita.de, which has a small market share in Germany; the site is yet to top 500,000 unique users a month. Lycos is pushing the eVita brand to France and UK. Though not part of the top 10 shopping sites in UK, Europe's top market, the eVita is expected to contribute significantly to Lycos' struggle for positive cash-flow.

[Via euro adhoc: The European Investor Relations Service]

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October 30, 2006

Comparison Shopping Engines Contributing More to Online Retail Shopping

Moneysupermarket.com, leading loans and insurance comparator, received 13.55% of total traffic from organic search, and 20% from paid search (PPC) campaigns. Hitwise's Bill Tancer reports that 4.2% of traffic to retail sites are now being sent by comparison shopping engines. For certain products, 90% of online shoppers use comparison shopping engines to research a purchase.

.....read more

[Disclosure: EUCAP is invested in Enclick Comparison Shopping and data feed marketing service.

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October 27, 2006

Open Source Browser Firefox Upgrade Released

firefox 2

Mozilla foundation has just released a major update to Firefox, Microsoft's biggest browser competitor.

The new firefox version is available for free here. The speed at which it displays pages has increased, and it improves the tabs used to view many web pages in one browser window. Microsoft has copied the tab feature in its latest release of Internet Explorer.

The open license Firefox is claimed to have close to 15% of the browser market, while Microsoft's market share has declined by 10% in the last year, as shown in the Google Trend graph below Microsoft Internet Explorer, Firefox

firefox IE trend

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October 24, 2006

Net Neutrality Slow to Enter into European Telecom Regulations Debate

eu

Net Neutrality is overshadowed by wider regulatory problems in Europe. In the most recent EU Telecom regulations review, net neutrality was alluded to only indirectly. The leading issues in EU telecoms debate at present are

  • Unifying Regulatory body accross Europe; debate is dominated by the compromise between a central regulatory body and decentralized powers at national level
  • Curbing the Mobile roaming charge abuse; mobile phone operators currently operate non-competitive tariff arrangements for roaming service
  • Transfer to new technologies , notably IP technology
  • Improved Spectrum Management in recognition of the inefficiency of the current spectrum licence assignment model. The spectrum debate will hopeful give rise to increased ranges assigned to unregulated and market players, which extract huge value with the neutral "end-to-end" data comms technologies like bluetooth and wimax.
  • Reduction of the regulatory burden on companies; if anything the European market is over-regulated and EU commission is charged with increasing freedom of the market gradually.

Net neutrality has entered the debate; finding the right balance between regulation and competitive market mechanisms for the IP data transit services is acknowledged as important by the EU Telecom Commissioner. Alex Blowers, International Director of UK Telecoms Regulator OFCOM, raised the issue in EU Regulatory framework consultation seminar. But the work on assuring the best net-neutrality solution is very much secondary to agreeing on the final EU regulatory bodies. Whom will be charged with investigating and legislating net neutrality in Europe is still an open question.

Regulatory development on net neutrality needs a push lest the markets implement layered net services without waiting for any regulations.

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October 23, 2006

Judge Denies Bulk Emailers Motion Against Spamhaus

spamhaus anti-spam

Following on from Illinois Courts verdict against anti-spamming organization, Spamhaus, Judge Charles Kocoras has rejected the bulk emailer's motion to shutdown the spamhaus.org domain. The shutdown was deemed "too broad to be warranted in this case", and that unproportional effects could be caused by suspending Spamhaus' service.

In a Court statement, Kocoras said,

"The suspension would cut off all lawful online activities of Spamhaus via its existing domain name, not just those that are in contravention of this Court's order."

"While we will not condone or tolerate noncompliance with a valid order of this court, neither will we impose a sanction that does not correspond to the gravity of the offending conduct,"

The amount of spam being stopped through Spamhaus' widely used ROCSO spammer list tops 50 billion messages a day. The estimate is based on the spam filtered by ISP and webmail services using the ROCSO list of spammer IP addresses. Suspension of Spamhaus' ROCSO service would seriously jepordize internet's anti-spam infrastructure.

The bulk email defendant was dissappointed by the rejection of one of his motions. e360 chief David Linhardt branded Spamhaus as "a fanatical, vigilante organisation that operates in the United States with blatant disregard for US law".

Meanwhile the rest of the interent community stands relieved by the courts accounting for the international context of the case. The case continues.

[Via SecuriTeam Blogs Spamhaus Update: Judge Denies e360’s Requested Relief

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October 21, 2006

Shopping Feeds Standards Fight is On

association for retail technology standards

The Association of Retail Technology Standards (ARTS) has issued its first proposal for a data feeds standards. The standard is aimed squarely at Comparison Shopping Engines, like shopping.com, kelkoo.com and enclick.com. The goal of the standard is to allow ecommerce merchants to generate a single data feed valid for all affiliate networks and shopping sites, instead of the dozen odd data feeds which are necessary at present.

Jay Heavilon of MARS, who chairs the committee for the standard states

"The current situation is a digital tower-of-Babel, where different online shopping search and shopping engines take SKU [Stock Keeping Unit] data in different formats. These specs allow advertisers, engines, and agencies to exchange product data more efficiently,

[National Retail Federation Press Release]

Google, w3c.org (world wide web consortium) and ARTs have competing standards for ecommece data feeds. Google has published the GData API which is a simple focused standard, concentrating exclusively on getting merchant's products into Google Base. With Google Checkout interface adding the transaction backend interface.

The ARTS standards is a more comprehensive definition of vocabulary which ties into ART's other standards for the communication along entire retail value chain. The W3C's RDF schema is also comprehensive, but the retail category XML schema is still not complete.

There Can be Only One

The three data feed standards clearly overlap in scope. Which one attains critical mass first is still very much an open question. Each standard has pros and cons.

ARTS has buy-in from Yahoo, AOL and Microsoft, and other major players in the online retail sector.

Google Data is now the way for merchants to get their products into Google Search Results. Since Google dominates the retail clickthrough market, its search is typically the origin of 25% of all ecommerce related clickthrough. If Google keeps this lock on retail related traffic, Google Data will be an obligatory data feed for all online shops.

The W3C's XML standards have the advantage of having public domain licences. W3C waives the right to demand fees for the use of its schemas. Contrary to ARTS and Google, who reserve all rights on the use of their standard; either organization has a right to demand fees and royalties on the use of their standard in the future. All W3C's standards use forms of creative commons licences, and are therefore truely for the benefit of the retail community.

Public Licence Standards

The public licence issue over the standard is central here. Viral marketing tenets for mass adoption recommend zero fees and minimum friction on use of the schemas. But Already Google has attracted strong criticism from internet leaders over their commercial lock-in tactics of the Google Data standard. Similarly, ARTS already levies fees for use of some of their standard; a disaster in viral marketing terms.

Meanwhile retail merchants observe in hope, as they are forced to produce half a dozen data feeds for submitting their product list to price comparison engines.

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October 12, 2006

Ridiculous Court Ruling Against Spamhaus Anti-spam Organization

spamhaus anti-spam

Spamhaus is non-profit organization set up by Steve Linford in 1998 whose mission is to track the worst of organized spam operators. It provides anti-spam intelligence to internet services, Law Enforcement Agencies, and government anti-spam legislation. The organization is staffed by the world's foremost anti-spam specialists whose "spammer blacklist" (ROKSO) is widely used in anti-spam filters by ISPs and webmail companies, including hotmail.com.

In an astonishingly misguided ruling, e360 Insight LLC a Chicago bulk-emailer won damages against spamhaus for being included in the Spamhaus blacklist. Spamhaus disagree on the facts of the case and on the jurisdiction, but did not appear at the US district court of Illinois; non-profit organizations of limited means cannot defend against disputes in all worldwide jurisdictions.

The bulk mailer won the $11.7m compensation, and Spamhaus was found to be in contempt of court after it failed to pay or remove the company's name from its blacklist.

Furthermore, the order, which is being considered by district judge Charles P Kocoras, proposed that ICANN suspend spamhaus.org's domain name until spamhaus comes to rule. ICANN has refused the request,

.... ICANN cannot comply with any order requiring it to suspend or place a client hold on Spamhaus.org or any specific domain name because ICANN does not have either the ability or the authority to do so. Only the Internet registrar with whom the registrant has a contractual relationship - and in certain instances the Internet registry - can suspend an individual domain name.

And since the internet registrar in question is likely to be outside the Illinois court jurisdiction, Spamhaus should be safe from the courts ridiculous verdict.

Geographical Jurisdiction over the Internet

The issue of geographical and national jurisdiction over the internet is central, again. It is absurd that the Illinois court claim legal jurisdiction over a worldwide case. Few organizations have the legal budget to fight hostile legal claims worldwide. Some form of supra-national organization should be given legal juridiction for this type of internet based conflict. Spamhaus' states

Spamhaus is however concerned at how far a U.S. court will go before asking itself if it has jurisdiction, and is intending to appeal the ruling in order to stamp out further attempts by spammers to abuse the U.S. court system in this way

The particulars of the case exaggerate how badly some local courts approach internet based disputes. A not-for-profit organization like Spamhaus is funded through low service fees from their users, and voluntary contributions by internet companies. Such limited funds do not provide for fighting legal cases in all country and state jurisdictions.

Illinois Court's Competence on Internet Issues

The courts's competence seems dubious also. The authority and competence of spamhaus over their anti-spam blacklist has been praised widely by many instititutions. Spamhaus itself states

....The Illinois ruling shows that U.S. courts can be bamboozled by spammers with ease, and that no proof is required in order to obtain judgments over clearly foreign entities...

Resources to Fight Spam

It is annoying to Spamhaus contributors how funds and resources are wasted at the expense of the internet community as a whole. Spamhaus' non-appearance at the court case is a logical response.

The case mirrors how easily commercial interests manipulate government on Net Neutrality legislation. How Judge Charles Kocoras and the Illinois court fail to balance the bulk mailer's arguments against pressing public interests, as expressed by the CAN-SPAM act, is beyond me.

[Via

Spamhaus domain name may be suspended - ZDNet UK News,

Illinois local legal commentary of the case here

ICANN Grants Temporary Reprieve to Spamhaus]

[Disclosure: Eucap portfolio companies invest heavily in anti-spam mechanisms. Plus I hate spam]

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October 11, 2006

PayPerPost: More Social Spam

Intrusive advertising has become the norm, to the point that most of us learn to filter 99% of unwanted intrusion on our limited attention span. The influence of standard advertising, TV spot reach, direct mailing hit rates, telemarketing conversion rates, email delivery and open rates have all dropped accordingly. The assault on our attention continues, though, through new channels.

In the age of web2.0, social networks provide openness, conversation, community and connectedness; the perfect spam medium. Firstly, professional social networks are coming down with an unfortunate form of spam, social spam. Commercial proposals delivered to you personally by other network participants.

Social events and interaction on networks like friendster.com, linkedin.com, openbc.com and ecademy.com are often hampered by a too high percentage of call-to-action requests. At worst, some participants who pride themselves on their salesmanship, their ability to close sales in one, resort to a percentage approach to their sales conversion, no qualifying, no sales pipeline. The result is a high degree of rubbish proposals being inflicted on the community; social spam. Perfect way to destroy the communities credibility.

Social spam is finding its way into the blog world also. Most blogs earn their influence by being credible, truthful and informative. Technorati's top 100 blogs have a reach and impact because of hard earned credibility. In an attempt to monetise their influence further, authors are being lured into posting a commercial plugs for product and services. Rather than a clearly marked product advert, Payperpost is paying higher sums for personal recommendations from authors. Perfect way to destroy your blog's credibility.

Like spam's damage to email interaction, social spam damages the new social networks and the new found web2.0 interaction. As online users start acquiring attention filters against this new form of deceitful intrusion, the open and receptive attitude in the blogosphere will be lost. Interaction becomes guarded and filtered; isolation wins out.

My experience with social spam is that communities become ultra-vigilant, almost vigilante like when abused by social spam. For instance, even the community platform providers on the labolsa.com financial community are roughly criticized for any commercial activity. The cost of such vigilance and filtering is a lack openness and more gated-community attitude.

Each community comes up with antidotes and filters to deceitful sales and advertising. Let's hope the cost to the community of said antidotes is not too high.

[Via Center for Citizen Media: Blog Blog Archive PayPerPost: A Cancer on the Blogosphere, or Merely Semi-Sleazy? and

Stowe Boyd: PayPerPost: Another Chance To Monetize (And Destroy) Trust]

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October 10, 2006

Google Acquires YouTube at $82 per Unique User

youtube google

Staggering price paid by Google, way over average current portal valuations. Youtube has 20 million unique users a month, so the acquisition price is $82 per unique users, which is high compared to most portals. Yahoo, a high value brand company, only achieves an $86 per unique user valuation.

At the $1650m the YouTube acquisition on its own will not provide Google with a Return On Investment. Though they declare they will keep the Youtube brand separate, extensive "synergies" will have to be found and exploited for the acquisition to create value for Google.

Brin, Schmidt and Page must have a specific monetisation strategy in mind to extract some positive ROI from this acquisition. Straight forward adsense has difficulty achieving high CPMs from the current YouTube design given the lack of effective context for Adsense to detect the right keyword phrases or traffic segmentation.

In spite of extolling the virtuous of internal innovation, Google has succumbed to buying a successful service. As ever, acquiring a successful business comes with a price tag; it is now up to Google to improve Youtube and generate value. This is not the first time Google has found ways to monetize a superior service though; Google Search had no superior business model, originally.

[Via Google Press Center: Press Release]

[Via John Battelle]

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October 7, 2006

Google Changes Innovation Approach: "More Features, Less Products"

google's sergey brin

Maturity is slowly creeping up on Google as it reaches its eighth birthday and its stock market valuation exceeds $100 billion. Disruptive innovation is giving way to incremental improvement; "more features and less products".

Circumstances have forced Sergey Brin, the master mind behind Google's 70-20-10 innovation strategy, to move to a 90-10 approach. Ninety percent standard incremental development, and 10 percent disruptive original products. The problem being that the continuous stream of new products have been badly integrated and are confusing to users. Moreover, Sergey Brin states

"It's worse than that, it's that I was getting lost in the sheer volume of the products that we were releasing.", [Via Los Angeles Times]

As any innovation professional knows, there comes a time when spells of green-hat lateral thinking have to be balanced out with black hat rational ordering. Fertile creative class lists of provocative disruptive ideas, projects and possibilities have to be balanced with a black hat rational execution of ideas. At the end of the day, as corporate management consultants like to point out, it is in the execution, realization and monetization of ideas that companies reach the market.

Even with over 8000 development staff, Google is coming up with more ideas than they can develop and successfully launch. Hacker has to give way to structured software development teams. Like all modern factory production techniques, the structured approach is more productive when it comes to delivering specific projects. Even Linux Open Source development often has a core of hierarchically ordered developers to maintain basic order and quality.

According to Eric Schmidt, Google's CEO,

"The result occurred precisely because we told these incredible engineering teams to run as fast as possible to solve new problems. But then that created this other problem."

Sounds like Boston Consultancy Group matrices are to make an appearance at Google, and introduce heavy rationality in their project selection. What next ? Suit and tie instead of T-shirts ?

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October 5, 2006

UK Online Advertising to Top €3000m for 2006

Internet advertising nears 1 billion (€1500m) for the first six months of 2006. Though the figure is lower than the US $7900m for the equivalent period, UK spend is higher on a per capita basis than the US. The figure below shows online advertising revenue growth for the US

ad revenue

On a per capita basis, the UK leads the way with €50 per capita, followed by the US and France with around €40 per capita. Scandinavia follows with high €30 values. But online advertising has yet to reach the tipping point in southern Europe; Italy, Portugal and Spain have single digit per capita online spend values, typically €5 per capita. But growth is 30-50 percent in all countries.

The UK growth has been 40 percent year on year, taking online advertising to 10.5 percent of the UK's advertising market, almost equal to the National Press' market share. UK advertising is now shared among the different medium as follows

  1. TV 22.7% market share
  2. National Press 11.4 %
  3. Online 10.5 %
  4. Outdoor 5.1%
  5. Consumer magazines 4.6%
  6. radio advertising 3.4%

The study by IAB and Price WaterHouse shows online advertising is split as follows

  1. Paid-for search takes 57.9%
  2. Online display (banners and skyscrapers) 23.5%
  3. online classified advertising 17.7%
  4. Interruptive formats, including 'pop ups', declined to 0.7%
  5. Email marketing and others taking the remaining 0.8%
CPA vs CPM stats

The US IAB study shows that performance based advertising, the Cost-per-Action (CPA) model is rising over the Cost-per-Click (CPC) models, as shown in the table left.

The sector ranking in online advertsing spend is as follows:

  1. Recruitment and finance account for over half the spend
  2. Automotive 13.8%
  3. Entertainment and Media 8.9%
  4. Consumer Goods, which includes FMCG, rose to 4.6%,
  5. Retail increases to 3%

The trend is for adspend to even out across categories, retail increasing its share by 30% as ecommerce takes off.

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October 3, 2006

Tesco.com Online Retailer Increases Sales by Another 30%

The number one online supermarket has announced 28.7% growth for the first half of 2006. Having topped £1000m in turnover in 2005, growth is down slightly from 32% for the year ending 2005, but profits are now over 6% as economies of scale have a bigger impact. Likely sales for 2006 are £1300m (topping €2000m), only behind Amazon for the UK. With full company revenues being £22.7billion, online sales contribute 6% to overall sales.

Tesco has piloted specialized order fulfillment centers, which use state of the art Operational Research Software to optimize a order filler's pick up route along specialized pallets and shelfs. In addition to advanced automation to manage shelf stock. Order filler staff follow instructions on a wrist worn PDA, to fill several orders at the same time, with a minimum of movement along ailes.

Tesco is rivalling shops like Argos and Ikea by offering home delivery in two-hour slots, instead of half-day ones, and also the option to collect directly from stores.

Tesco has increased the number of CDs and DVDs it offers online to 280,000. With an additional 8,000 products in the lucrative electronics and household appliances sectors. In fact, Tesco is the highest selling household appliances retailer on the Enclick price comparator site. With close to 300,000 products, Tesco has one of the most comprehensive product data feeds on offer among online merchants.

[Via Guardian Online]

[Disclosure: EUCAP is invested in Enclick Ltd]

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