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]

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.

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

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.

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]

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]

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 ?

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]