GS Internet Conference 2007

I attended the Goldman Sachs Internet Conference in Las Vegas this week. Anthony Noto, the lead research analyst at Goldman, puts together a great conference. He's whip-smart, gets great people to attend and present, and balances it all very nicely.

Over the two days, I saw presentations from Microsoft, Getty Images, Linden Lab, eBay, Tencent, LinkedIn, Viacom, Disney, Amazon, Glu Mobile, IAC, DemandMedia and Shanda. A very diverse and interesting group of public and private companies. The themes I noticed were obviously influenced by the presentations I chose to attend (media heavy, to say the least).

Some of the big themes:

• Advertising. Display vs. search. How to crack mobile advertising/location? Diverging CPMs for premium vs. junk inventory. In-game ads. The DoubleClick and aQuantive deals where on everybody's mind. 
  
• Fragmentation. Big sites losing traffic to more targeted small sites (sites with over 15 million monthly uniques were down 7.5% year-over-year). Usage is flat. Overall visits are down. The proverbial long tail is getting longer. Web 2.0 tools and Google Ad Sense are making it more frictionless for start-ups to get started up. DemandMedia's whole strategy is essentially an arb on internet ad platforms (particularly domains), monetizing fragmentation and pools of enthusiasm in verticals.
  
• Access Platforms. As I discussed in my last post, the access platforms are getting stronger and stronger. Email, search, shopping, news, weather and maps are aggregating a larger and larger portion of overall traffic and therefore ads. Value of video search as explanation of Google/YouTube premium -- can't index video same way as HTML.
  
• Games & Entertainment. Between Microsoft, Linden, Tencent, Viacom, Disney, DemandMedia, Shanda and Glu, gaming and entertainment was everywhere. High customer engagement is a very sought-after commodity, and games produce high engagement. Also, lure of in-game advertising.
  
• Virtual Worlds & Avatar Chat. Everybody had a play. Viacom (Laguna Beach), Disney (Pirates, Fairies, ToonTown), even IAC (Zwingy). And of course, Shanda and Linden. And Tencent's QQ avatar chat.
  

Why Silicon Valley Doesn't Get Mobile

Since I've started at my new job, I have looked at a number of mobile products and services. While I've had some amusing meetings where entrepreneurs show me their hot new "mobile marketing" concept that's essentially crude, circa-2003 SMS/WAP Push, the more interesting conversations relate to the current and future role of the mobile operators, or carriers, in the mobile content and commerce equation.

I can't tell you how many times I've been asked: how long will it be before the carriers are inevitably relegated to "dumb pipe" status and the mobile internet opens up like the wired internet? How long until we can safely route around the carrier? My answer - "a long time, or never, unless we see a disruptive technology replace cellular" - always confuses people. How could it not happen in the next 12-18 months?

This is, unfortunately, a major blind spot of the web-centric -- a blind spot that has worked to my advantage in the past. For example, at JAMDAT we supported BREW even though it was "closed" and built a great business; meanwhile the "open" Java Community Process for J2ME failed to produce a competitive offering in a timely manner. Sure, J2ME ended up being an important and widely adopted technology, but avoiding BREW because it was not "open" was a stupid business decision that my competitors came to regret.

Shawn Conahan, the CEO of InterCasting, summarized it pretty well:

... I talked to a VC who said he would not invest in any company that includes “working with wireless carriers” in its pitch. Worse in my opinion would be investing in any company that includes “going around the wireless carriers” in its pitch. While the former is a difficult path, the latter practically ensures failure.

Shawn's point is completely lost on many venture capitalists in the Valley, who don't understand the need to create symbiotic businesses in mobile. They are so intent on creating disruption, they miss the forest for the trees.

It's not going to win me any popularity contests here, but I would argue that the mobile business may be more a model for the future of the internet than vice versa. Look at MySpace/Photobucket, or Windows Live, or Facebook, and you'll see access platforms asserting their supremacy in the value chain ... just like the big, bad mobile carriers.

FA Cup Final

Tomorrow morning (7am pacific, PPV), Chelsea and Man United play the FA Cup final. Just a few weeks ago, it looked like we were headed for a trio of classic Chelsea/Man U. matches -- the second-to-last match of the Premiership season, which could have been a decider; the FA Cup final; and, most importantly, the Champions League final in Athens.

Instead, we'll have an injury-weakened Chelsea (no Carvalho, Shevchenko, or Ballack), seeking their only chance at a trophy (unless you count the Carling Cup), against a full-strength Man United looking to complete the English double.

The Premiership "decider" turned out to be a meaningless 0-0 bore, with Manchester United already in possession of the league title. Both teams are out of the Champions League despite making it to the final four. Liverpool took Chelsea out in one semi-final, AC Milan took Man U. out in the other, setting up a rematch of last year's final.

So it's down to the FA Cup. Chelsea's defense, anchored by Carvalho and Essien, is normally amazing -- they allowed only 24 goals in 38 league matches, the lowest number of any team. But without Carvalho they will be really vulnerable to Man U.'s deep attack (Rooney, Ronaldo, Saha, Scholes and Solskjaer have a combined 52 goals).

If Didier Drogba comes to play, Chelsea has a shot. He's one of the most amazing strikers I have ever seen. Incredibly strong and athletic. His 20-goal highlight reel for the 2006/7 Premiership season is off the hook -- he can score insane, impossible goals. They'll have the London crowd at Wembley. I'm predicting they go down 2-1, but I'll still be watching.

UPDATE: Chelsea 1, Manchester United 0 (Drogba 116'). Well, I was happily wrong about the result. Got the Chelsea goal-scorer, though. A great volleyed one-two with Lampard, and Drogba was through for a balletic tap-in, his 33rd goal of the season across all competitions. Just as the match seemed inevitably headed for the dreaded penalty shoot-out, Chelsea pulls a rabbit out of the hat to win it.

Paso Robles

Over the Christmas break, our whole family (10 of us) drove up to the central coast for a vacation. We spent a few nights in Paso Robles and a few nights in Santa Barbara.

Paso Robles and the Edna Valley, to the south of San Luis Obispo, have really become extraordinary wine regions. I actually prefer it to the more hyped Los Olivos/Santa Inez regions outside Santa Barbara.

We tasted at 17 wineries during the trip. The Rhone-style wines from this region are really getting good: the weird and wonderful Linne Calodo wines; the ersatz Chateauneuf du Papes at Tablas Creek; the single-vineyard Syrahs from Adelaida; and the huge, chocolatey Syrahs from Alban. Also picked up some unique Roussannes, Marsannes, and Viogners, as well as the obligatory Santa Barbara/Santa Maria Pinot Noirs.

This part of the central coast feels to me like Napa or Sonoma 25 years ago, before the wine tourism. At many of the Paso Robles and Edna Valley wineries, the owner/wine-maker was there, in rubber boots, making wine. Totally unpretentious.

Santa Clara Presentation

My speech on the JAMDAT story from the Santa Clara University entrepreneurship series is up on the web. This presentation was influenced by the style of Lawrence Lessig, well-summarized at Presentation Zen. It's perhaps a bit wordier than the classic Lessig style, but it's still pretty iconic and sparse. The audience seemed to really enjoy it.

Goodbye, Sleater-Kinney

During the summer of 2006, while I was on a hiatus from blogging, the amazing band Sleater-Kinney announced the sad news that they were no longer going to record or tour as a group.

From my perspective, there have been three truly great "alternative" guitar bands in the last 25 years: Husker Du, Sonic Youth, and Sleater-Kinney. These bands produced a diverse catalog of music over many recordings and many years, but always with a signature sound -- complex and musical, but unmistakably punk in inspiration.

Like Thurston Moore's guitar feedback, Corin and Carrie's screechy vocals put a lot of people off. Their queer politics put others off. They never really got mainstream recognition - although some indy radio stations did put "Entertain," from S-K's final album, The Wood, in rotation.

To me, the unbridled punk lyricism of their guitar playing was magical. Check out "Not What You Want" on Dig Me Out, or "Light Rail Coyote" on One Beat, or "Far Away" - one of the best post-9/11 songs ever - or the classic rock-inspired tunes on The Wood. You'll see what I mean.

Comics

My 10 year old daughter, who is an avid reader, started getting into comics. The gateway comic for kids her age is Archie, which she devoured. Then she started reading the comics page of the LA Times. Then she started drawing her own comics.

Being the geek dad, I got her a copy of Scott McCloud's classic Understanding Comics: The Invisible Art. If you haven't read this book, and you work in a creative field, you are in for a treat. She didn't get everything, but she understood and internalized a lot of it.

Around the same time, I came across this story about important recent comics and graphic novels. And there was the success of 300, based on the Frank Miller comic. So I ordered a bunch of the ones that looked interesting.

One thing that has struck me is how much modern American comics owe to Heavy Metal. My brother and I used to read Heavy Metal in high school -- they had some great artists working during the late 70's. You can really see the influence of guys like Moebius in the art styles, and there's a lot of the nihilism of RanXerox in the Spider Jerusalem character in Transmetropolitan.

Beyond & Back

I'm back after a long hiatus from blogging, necessitated by my job change. I've got some catching up to do -- a backlog of posts about pop culture and business.