October 07, 2006

Amazon.com The OverLooked Giant - S3 Makes Backups Cheap

posted by MR WAVETHEORY at 10/07/2006 06:00:00 AM
It seems no one is paying attention to Amazon.com, Inc. (Nasdaq AMZN) while everyone is talking about Google (Nasdaq GOOG) and eBay Inc. (Nasdaq EBAY). Jeremy Zawodny who works for Yahoo has a great article about how he replaced his home backup server with Amazon S3 storage. Amazon S3 is providing cheap utility computing - bandwith is $.20/GB and storage is $.15/GB per month. Jeremy is saving over $500 by switching. Maybe Amazon.com ought to get more credit for innovating. I wrote about Amazon's other service Elastic Computing Cloud earlier and I think it's a great service like S3.

How Much Would Founders and VCs Make on A YouTube Sale? Plus News Corporation Passed on YouTube

posted by MR WAVETHEORY at 10/07/2006 12:47:00 AM
FinancialTimes says that News Corporation (NYSE NWS) looked at YouTube but passed when the valuation went to $1.6 billion.
However, they said the media group decided not to make an offer for YouTube because of a $1.5bn minimum price tag being demanded by YouTube’s backers, and because News Corp had decided it could develop YouTube’s features on MySpace. News Corp declined to comment.

It looks like alot of posturing. Alot of times, potential buyers just use it as an excuse to look under the hood of a company and open up the kimono of a competitor. News Corporation probably wanted to figure out how YouTube was doing and gather some competitie statistics.

YouTube may be wanting to sell because there are so many questions about its future.

How much would everyone make if YouTube sold today?
If the company sold at $1.5 billion, assuming the rule of 3, i.e. VCs own 1/3 and Founders own 1/3 and employees own 1/3, then here is what everyone would make:

Sequoia Capital - $500 million. They invested about $30 million So, that would be 16x their money. Not bad. Not a Google homerun, but great for less than two years worth of work.
Founders (Chad Hurley, Steve Chen, Jawed Karim) - $500 million. Assume the split is equal (probably not). But just to simplify, they would each carry home $166 million. You can read more about the founders here.
Employees - $500 million. There are 60 employees. Assume equal split, that means the janitor would make $8.3 million. Of course, equity is not divided equally among employees. You get the picture though! Even the secretary would make a couple of million. If you're a gigolo, then go marry that YouTube admin that's been hanging out at the office!

OK. That was a fun exercise. I think the founders should sell. But hey, who am I to tell them what to do? In 12 months, if MySpace kicks YouTube off their site, then YouTube would be worth how much? How much? Ummmm. Let me guess. $0. YouTube founders, it's better to end up like the founders of Skype - rich rather than in jail for copyright infringement.

So, yes, Google should buy YouTube. Make everyone in the valley rich and happy. Google, you know you want to.

October 06, 2006

Rumor - Google Inc to Buy YouTube for $1.6 Billion - Very Cheap

posted by MR WAVETHEORY at 10/06/2006 03:25:00 AM
Michael at TechCrunch is reporting that Google Inc. (Nasdaq GOOG) is about to buy YouTube for $1.6 billion. That would be cheap if indeed, YouTube is on tract to generate $63 million in revenues and $45 million in profits as I argued yesterday. That would be 30x earnings for a company growing at a breakneck pace. Google trades at 40x forward earnings and isn't growing nearly as fast, so the acquisition would be immediately accretive.

Skype Founders Launch The Venice Project - A YouTube Killer? Skipping Out on eBay Inc.

posted by MR WAVETHEORY at 10/06/2006 02:05:00 AM
The Skype founders are incredible entrepreneurs - adaptive, malleable, big thinkers. They are notorious for skirting the law, earning back their good grace, and making billions all in the last 10 years. There was great controversy in their first success, Kazaa. If anything, Janus Friis and Niklaus Zennstrom are the quintessential Internet entrepreneur of the late 90s - except they ended up with the big bucks and their big dreams while everyone else lost their shirts. Now, they are skipping out on eBay Inc. (NASDAQ EBAY) and launching The Venice Project. The Venice Project is supposed to do for video sharing what Skype and Kazaa did for VOIP and music sharing. Om Malik did a wonderful interview with Janus and Niklaus. You can sign up for the beta by visiting the home page of the Venice Project. But before doing so, I would read the privacy policy. Kazaa was notorious for installing spyware on users' computers and it looks like The Venice Project will be making great efforts to do data collection on users. This is just the boilerplate from the web site on what the software will collect:

When you register to become a user of a TVP website, service or software, TVP collects certain information such as your first and last name, e-mail address, location, and birth date, as
well as information about your use of TVP features and contributions of content.

Also, The Venice Project may not be appropriate for your kids:

TVP websites, software and services are designed and maintained for an audience at 16 years old and above. For this reason every user registration asks for date of birth and our best efforts are made to ensure the integrity of our minimum age policy. Accordingly, we will not knowingly collect personal information from any child under 16 years of age.

It doesn't sound like it is child safe. I wonder what kind of content they intend to serve up. Hmmm.

MySpace Founder Accuses News Corporation of $20 Billion Fraud

posted by MR WAVETHEORY at 10/06/2006 01:46:00 AM
Brad Greenspan, the founder of MySpace.com, accused executives of Intermix Media of defrauding shareholders of $20 billion by selling to News Corporation (NYSE NWS) for too low of a purchase price. Brad accuses Richard Rosenblatt, then the CEO of MySpace.com, of hiding $250 million in revenues from shareholders prior to the closing of the deal. Specifically,
Rosenblatts scheme was helped in large part because Intermix hid Myspace revenue from shareholders in a blatant violation of FAS 131 (segment reporting disclosure). Shareholders were not aware that Myspaces revenue was growing at a 1200 percent annualized rate and increasing. Shareholders were forced to trust the recommendation of Intermixs Board and were under the impression Myspace was unable to turn its massive traffic into revenues.
Brad believes MySpace was well on its way of achieving $250 million in revenues in 2005 but Rosenblatt plotted with Ross Levinson of News Corporation to sell Intermix Media, which was the parent of MySpace, cheaply in return for a share of the $20 billion bounty.
Intermix board members and senior executives, led by Rosenblatt, blatantly deceived shareholders into voting for a quick sale to News Corp. in exchange for broad protection from a string of prior corporate misdeeds and Rosenblatts understanding that he would share in $20 billion in value post-transaction via his new role at News Corp.
This kind of corporate cloak and dagger is not unheard of, but it certainly is one of the most controversial statements that I have heard. I can understand why Brad is upset.

Most venture capitalists, including those at Redpoint and Vantagepoint Venture Partners, would probably agree with that they sold MySpace too early. However, you can't blame them.
After 4 years of lackluster returns (no exits in fact) from their portfolios, Redpoint and VantagePoint were probably ecstatic to show any exit to their limited partners. VCs have bosses too! They are public pension funds and corporate investment funds that rely on these investments to pay for your retirement.

If Rosenblatt did strike a secret deal with Fox, then I think this would effectively annull any secret payment that has yet to be paid. Who knows. Maybe the Fox people leaked this secret deal to Brad so they can still Rosenblatt. On other hand, I must add that Brad may be underestimating the role that Fox played in promoting MySpace into the number social networking brand.

October 05, 2006

Who Made Money Off Amaranth's Collapse?

posted by MR WAVETHEORY at 10/05/2006 03:45:00 PM
Thirty-two years old John Arnold, a former Enron trader, is up 200% this year at Centaurus Capital.Arnold manages $3 billion. Who gave him all that free money? Brian Hunter, also 32 years old, of Amaranth Advisors. While Hunter was long natural gas, Arnold was short. Arnold earned $100 million last year. Hunter gained notoriety for making $750 million singlehandedly at Enron in 2001 using Enron Online, an internet based trading network. Not bad. John got a bonus of $7 million for his efforts which he used to start Centaurus. He struck out on his own when Enron liquidated - proving that what was bad for Enron shareholders wasn't necessarily bad for Enron employees. In 2004, his fund of $1 billion earned $800 in profits according to John D. Arnold's bio on Wikipedia.

From Google Map, John Arnold's office appears to be sitting next to a lake front resort or a golf course.

Mamma.com Powers AOL OpenRide Desktop Search

posted by MR WAVETHEORY at 10/05/2006 10:08:00 AM
It may be time to take another look at Mamma.com Inc. (Nasdaq MAMA), the mother of all search engines. AOL OpenRide bundles Mamma.com Inc. Desktop Search rather than Google Desktop Search. That is a big vote of confidence considering Google Inc. (Nasdaq GOOG) dominates the search market.

By being bundled with AOL OpenRide, Mamma.com can expect to see millions of installations of the Copernic Desktop Search 2.0 software on computers worldwide. The revenue potential is huge. The deal puts Mamma in the lead for desktop search.

The search advertising revenue that Mamma can generate from the users is huge. AOL OpenRide is being downloaded at a brisk pace as users try it out for the first time. Assuming 10 million downloads of OpenRide and revenue per user of $1 per user in the first 3 months, that could be an incremental $10 million in revenues in the first three months of this deal. Revenues could double easily, and earnings potential much much more. I expect to hear good news from Mamma.com, because the AOL deal really turns things around. There is no incremental costs to serving an additional user.

Prior to partnering with AOL, Mamma.com was really falling behind. Revenues were down in the latest quarter from $2.5 million to $1.9 million, the company was burning cash at the rate of roughly $2 million per quarter and cash balances were down to less than $10 million. The AOL deal changes everything.

At $2.00, the stock is a screaming buy if it executes on plan. The market cap is less than $30 million and the market has all but discounted Mamma.com out of existence. Even at half the valuation of search engines like Google, the company could be worth $8-10.

Another Hedge Fund Breaks the Law - HBK Caught Short Selling Ahead of PIPES

posted by MR WAVETHEORY at 10/05/2006 12:34:00 AM
HBK is the latest hedge fund to be nailed by the Feds. The fund was caught short selling stocks ahead of their PIPEs. PIPEs are private investments in public equities - they are private stock offerings which means that investors agree not to short sell the stock ahead of the offering, because investors get access to private information. HBK abused the knowledge and short sold stocks of Plug Power Inc (Nasdaq PLUG).

In a typical PIPE deal, a small, cash-strapped company raises cash by selling discounted stock, or a bond that converts into discounted shares. Shares of the seller usually decline as investors anticipate a flood of discounted stock coming into the market. HBK got in trouble when it shorted shares of Plug Power Inc ahead of a PIPE in which it invested $58 million.

Over the past 5 1/2 years, HBK has invested $598 million in 104 PIPE deals, according to PlacementTracker. People familiar with HBK and the PIPEs market say it's reasonable to assume that HBK made between $50 million and $75 million from those investments.

The fund based in Dallas, Texas, manages $10 billion and employs 200 people. It was founded by Harlan B. Korenvaes, former Managing Director of Merrill Lynch in charge of the firm's convertible arbitrage trading and sales.

October 04, 2006

Gizmondo - How Nordic Mafia Embezzled $382 Million While Creating The Next Cool Gaming Device

posted by MR WAVETHEORY at 10/04/2006 11:17:00 PM
Wired writes a great investigative report about Gizmondo - the cool gaming device with MP3 and video player, gyroscopes for motion sensing, multimedia messaging, and Bluetooth wireless networking for multiplayer games - that never was. It was supposed to overtake the Sony PSP and the Nintendo DS. Wired traces the company from how it was founded by Nordic Mafia leader, Carl Freer, and his cohort Bo Stefan Ericksson, who transformed a flooring company into Tiger Telematics, and how it all spectacularly unfolded.

For his efforts as managing director, Freer was awarded a compensation package that totaled nearly $2.2 million in 2004, his first full year on the job. He and his wife (who was paid $174,000 by Gizmondo for "consultancy services") moved with their children onto a huge estate in Hampshire and filled the garage with expensive autos. On weekends, Freer could combine the two passions he shared with Eriksson - expensive jewelry and flashy vehicles - by roaring around on a Harley-Davidson with a diamond-etched crankcase.

His partner in 2004 Eriksson was rewarded with an annual compensation package that included $867,465 in salary, $1,365,456 in bonuses, and 884,024 shares of stock, along with an "automobile allowance" of $104,095.

Before launching the gaming device, the company bought a modeling agency to support its modeling efforts. "To add to the glitter, in 2004 Gizmondo purchased a 75 percent interest in a London modeling agency called Isis, ensuring that there would be plenty of beautiful young women at its parties and events." Even flashier than the Gizmondo were the booth babes and dollies hawking the device.

Tiger launched Gizmondo in Europe and the US and the company swiftly went bankrupt. In the end, the company's "SEC filings show "sustained net losses aggregating over $382.5 million" in the 45 months preceding the resignations of Freer and Eriksson." Gizmondo leaves many questions of who these people were. The company's first 10-K SEC filing described Freer as a "co-founder of software company VXtreme," but Freer had never been involved with VXtreme (which Microsoft purchased in 1997). "A minor typo," Carrender explained when a reporter at the San Jose Mercury News pointed out the discrepancy: Freer had actually founded Weextreme, which Carrender described as an "offshore-based Internet consulting company that ceased to operate in the late 1990s." (Wired has been unable to verify that such a company existed.) Official papers also said that Freer once served as a trustee of London's prestigious King's Medical Research Trust. He never has.

The scheme unfolded when, "On February 21, 2006, Eriksson lost control of a million dollar Ferrari Enzo sports car which he allegedly drove while drunk on the road in California. Eriksson claimed to have been a passenger in the car, but this claim was not supported by forensic evidence. The car itself was not owned by Eriksson, but was claimed by the Bank of Scotland during the bankruptcy of Tiger Telematics."

Alan Meckler - ShutterFly Makes No Money, Reminds Me of IPOs of the 1990-2000 era

posted by MR WAVETHEORY at 10/04/2006 07:53:00 PM
Alan Meckler, CEO of Jupitermedia Corporation (Nasdaq JUPM), compares his company to ShutterFly, Inc. (Nasdaq SFLY) and seems to be posturing that Jupitermedia ought to be worth more than ShutterFly, which makes no money (via).

The company is moving in on $80 million a year of revenue and makes no money. The business is fiercely competitive. And today, after an IPO, the company has a market cap of over $300 million.

This IPO reminds me of IPOs of the 1999-2000 era. In those days companies went public on ideas with no revenue. Shutterfly has revenue but I would doubt that it can ever be profitable. I can understand why the prospectus uses the "joy" word after studying the financials and the business model.

As a CEO of a public company I realize that this post might draw criticism. I am used to criticism and realize that if my own company's financial results do not satisfy The Street then I will be condemned and reminded of this post. However we do make money - lots of it. And our market cap is now significantly lower than the market cap of Shutterfly (Nasdaq:SFLY).

It sounds alot like sour grapes. The truth is that Jupitermedia is not growing that fast either.

I wrote earlier about ShutterFly in the post Will the ShutterFly IPO Fly? in which I wrote that it wouldn't. ShutterFly broke its IPO price just two days after the offering.

I wonder if Meckler is trying to say that a private equity firm should make a bid for Jupitermedia. He won't have trouble stirring interest if that's the case. The buyout guys have bilions

YouTube is Hugely Profitable - $63 million in Revenues, $45 million in profits

posted by MR WAVETHEORY at 10/04/2006 05:46:00 PM
Fortune magazine recently reported that YouTube is selling homepage placement for $175,000 per day. You got that right - it's per day. That home page costs mucho mulah. From that homepage ad alone, YouTube is making major profits.

In fact, extrapolating that to 365 days with simply multiplication, YouTube is making:


$175,000 X 365 = $63,875,000 million in annual revenues

Wow! YouTube is hugely profitable! So, how much is YouTube making in profits? Let's say the main costs are bandwidth and people. Bandwidth is rumored to be $1 million per month so $12 million in a year. People cost about $100,000 per employee and there are 60 employees so that is $6 million. So, there you have it.

$63 million Annual Revenues
-$12 million (bandwidth cost)
- $6 million (people)
--------------------------
$45 million profit

YouTube is making $45 million per year! Oops, I spilled the beans. The dirty secret is out. Big media company - eat your heart out! Maybe the figure is a bit high. After all, YouTube is probably spending millions on PR and public relations firms to get articles planted in every trade rag, but so what?

Why is YouTube so profitable? Oh, did I forget to mention that YouTube doesn't create content? Unlike ABC, NBC, and CBS, it doesn't pay actors, actresses, and doesn't have distribution costs except bandwidth. Why? Because you are making it for them. I wish I were in this business. It's about you, making content, so they can can make money. YouTube is making tons of money off You!
Tags:

StubHub on the Block - eBay a Buyer? eBay Inc.

posted by MR WAVETHEORY at 10/04/2006 02:58:00 PM
Bambi writes that StubHub is on the block. eBay Inc (Nasdaq EBAY) may be a bidder because it needs the growth. The price: $300 million. They expect $100 million in revenues. StubHub is an interesting concept : List your tickets on StubHub, get paid, StubHub does the rest. Queries for StubHub seems to be rising very fast. I think that the company charges too much - 15% commission from the seller, 10% from the buyer. Ouch!
StubHub raised $12 million earlier this year and competes against RazorGator. As you can see, StubHub is kicking RazorGator's A** in terms of traffic.

RazorGator has a different business model. It actually buys and sells tickets itself although it recently decided to serve large ticket sellers with TicketOS. It's just a fancy software that enables you to manage your inventory online. RazorGator did about $50 million revenues in 2005. RazorGator is backed by Kleiner Perkins with $26 million and another $22 million this year.

Why It's Time to Speculate in China Technology Development Group Corp.

posted by MR WAVETHEORY at 10/04/2006 01:26:00 PM
The difference between speculators and investors is this: speculators care about returns that can generate 5-10x their money, investors care about preserving their capital. Venture capitalists are speculators, because they bet on ideas that have a 1 in 10 chance of succeeding. Speculation makes sense when the odds are good. Mutual fund managers want to make 5% with 80% certainty - and even at that, alot of them fail. I wrote about how to invest in China stocks and the difference between speculating in small China companies and investing in large ones. I will dive into speculation today. Why then is it time to buy China Technology Development (Nasdaq CTDC) also known as China Development Group Corp? Two reasons: China is hot and technology is in vogue again.

China is Hot
Just yesterday, Morgan Stanley (NYSE MS) bought out a small commercial lender in China called Nan Tung Bank, which was an affiliate branch of Bank of China (HKY 3988). You won't find big banks making small acquisitions like Nan Tung (who's heard of Nan Tung?) unless there is big opportunity. It has 30 employees and 1 branch. Morgan Stanley, shall I say, is speculating. When China is that hot, you have to buy.

Technology is in Vogue Again
When tech is hot, you know it. Just look at the Nasdaq which gained 47 points today or 2.11% to close the day at 2290.95. The Nasdaq hasn't seen this level since a long time. The previous high was April 20, 2006 when it hit 2375.54. When Google gains more than 10 points in a day, I smell speculators and investors and big money jumping in.

China Technology Development Group Corp Is a Speculative China Tech Play
When you combine the two hottest concepts, China and technology, you have a winner. I say that somewhat facetiously, but never underestimate the power of a runaway bull market. I am wearing my speculator / venture capitalist hat, when I say that China Development Group Corp is a great play. Why? Consider the following:

Market Cap
- $40 million
Cash - $3.7 million
Float - 1.95 million
Today's Trading volume - 4.06 million
Total Shares outstanding - 6.89 million

Why A Small Market Cap is Good
When you are speculating, you are betting on supply and demand. When a company is small like $40 million, then you have a small supply of dollars you are dealing. When you have big money behind a small company, that is good. Consider that there are only 1.95 million shares of CTDC outstanding, this means its shares are limited. You want to find scarce stocks to buy when you speculate. Scarcity creates value.


The Math Makes Sense
China Development has a float 1.95 million shares. Considering today's
volume of 4.06 million, that means almost every share turned over 2 times. That's alot of demand for a small company. When you have 2 trades for every trade available, you know it is in demand. I would also add that most of the shares in this company are not available for trading which is good if you are a speculator. After all, who wants to be the victim of a pump and dump.

The Risks are Great But Potentially the Rewards as Well
You can read my previous post on why I think China Technology Is Poised for a Rise when the stock was trading at $3.15. The timing looks good now because not only has the stock confirmed the view which is crucial as a speculator. It closed today above two previous highs - $5.62.
That means there is little overhead. So, consider putting your speculator hat on. There just maybe a chance it will go to $20!

October 03, 2006

AOL Opens Up With OpenRide

posted by MR WAVETHEORY at 10/03/2006 10:15:00 PM
AOL, the ugly step child of Time Warner Inc. (NYSE TWX), just got a much needed and long awaited makeover. AOL is officially opening up its walled garden on Wednesday with OpenRide - the new AOL software. You can download it now at : http://www.aol.com/openride

I downloaded OpenRide to check it out and it looks very much like the old AOL except the user interface now called Dynasizer - which is a four window pane that automatically adjusts your window to what activity you're doing - Email, Browsing, IM, Mediacenter, or Search.

For instance, if you are doing browsing, you'll see a screen like the on below where you can take a tour of OpenRide.
Or if you're doing media center activities like listening to music, it will enlarge the media center. Not rocket science, but probably very helpful for the average computer user like your grandparents. You need Windows XP with Service Pack 2 to run the software.

I wouldnt' call OpenRide a revolutionary product that revolutionizes the way you use the Internet, but I do believe it will make the web easier to use for the average user. Power users - stick with what you've got.

Hedge Funds Blowup - Vegas Management Down $9 Billion Following Amaranth Footsteps

posted by MR WAVETHEORY at 10/03/2006 09:42:00 PM

While the business rags are raving about the big disaster that was Amaranth Advisors (in case you were wondering what an amaranth is: it's a weed), few have talked about the massive losses at Vega Asset Management based in Madrid Spain. Vega, or should we call Vegas, which managed $12 billion just a few years ago and $6 billion in January, now has about $3 billion in the bank. They've lost about $9 billion in assets even more than the $6 billion lost by Amaranth. The Vega Select Opportunities Fund, once the flagship, now manages $1.4 billion. Manager Ravinder Mehra took all that money to Vega(s) and bet against bonds. Oops! He's down 17.5% this year. To make that back, he has to roughly make 35% just to break even. Below is the data courtsey of Lipper.

Data in this table based on: August 2006 performance.
NAV Monthly RoR Quarterly RoR YTD RoR 1 Year RoR 3 Year RoR 5 Year RoR Since Inception
23365.81 -9.76% -8.42% -6.77% -2.17% 1.84% 9.49% 14.54%


Do you see a trend? Well, going from right to left, it looks like the more recent the performance figure you examine, the more negative it becomes! What a perfect trend - down. Something tells me that investors in Vega would like to see it go the opposite way.

Meanwhile, the more risk averse among the hedge fundies are busting out of hedge fund land back into banking. Eton Park lost Stuart Hendel who is going back to the prime brokerage side of the business at Morgan Stanley (NYSE MS). Eton Park, founded by Eric Mindich of Goldman Sachs Group, Inc. (NYSE GS) has about $5.5 billion. It's up 7% this year.

Fox Launches PrimeTime Shows on MySpace

posted by MR WAVETHEORY at 10/03/2006 08:23:00 AM
In case you've been asleep, Fox which is owned by Big Daddy New Corporation (NYSE NWS) has put their prime time line up on Myspace. You must be thinking, Where can I find Fox TV shows online? Look no further than

http://www.myspace.com/fox

It's a great place to find shows. You can find 8 shows:
  • Prison Break
  • Justice
  • Bones
  • til Death
  • StandOff
  • Vanished
  • the Loop
  • Talk with Spike Speresten
The only downside is you have to download the Full Throttle player in order to view the content. Having Flash player won't do.

Actually, what I find interesting is the data from Google Trends which shows you which show is the most searched for out of the bunch. The top three Fox shows are Prison Break, Justice, and Bones. You can see that Prison Break is the most popular show of the bunch. Surprisingly, the most number of Prison Break queries is coming from Oslo, Norway, Goteberg, Sweden, and Melbourne, Australia. What about the US? I guess US watchers aren't that savvy about searching for Prison Break online. Or is it just that they can't get the show on TV in the Nordic so that they are searching for it online?


Where can I find AABC shows are available at:

http://dynamic.abc.go.com/streaming/landing

In contrast, ABC has 7 shows online as well (insteado of 8):

  • Grey's Anatomy
  • Desperate Housewives
  • Lost
  • Ugly Betty
  • Six Degrees
  • the Nine
  • the Knights of Prosperity
ABC's most popular show according to Google Trends is Lost followed by Desperate Housewives, and Grey's Anatomy. Surprisingly, residents of Auckland New Zealand and Sydney Australia are the most active searchers of Lost episodes followed by Rochester. What is it about these residents Down Under? Hmmm.... I wonder who's doing all that searching: Rupert Murdoch?

Skype Goes Mobile With Belkin

posted by MR WAVETHEORY at 10/03/2006 03:36:00 AM


How to grow Skype as it faces competition from talk for free competitors like Jajah has been a big question on the minds of investors. Skype, a division of eBay Inc (Nasdaq EBAY), may have found the answer in the Belkin Wi-Fi phone for Skype.

The Skype phone from Belkin allows anyone with a WiFi connection to talk for free with Skype users. Imagine sitting in an airport lounge with free WiFi acccess. All you need to do is to turn on your Skype phone - no need for a laptop - and dial. The phone connects to the network, asks you for your Skype id and passord, and you're set. Just dial the number or select your Skype buddy. You're connected.

The drawback of the phone is that it currently doesn't support authenticated hotspots which means you can't sign on via a T-Mobile hotspot. Otherwise, it works just like a normal phone.

Amazon is selling the Belkin Wi-Fi phone for Skype for $179.99 (F1PP000GN-SK). I expect the price to drop to less than half in 6 months. It's available for pre-order. With all this hubbub about VOIP, maybe this will give eBay a boost.

October 02, 2006

Borat Movie - Top Secret Invitation from MySpace

posted by MR WAVETHEORY at 10/02/2006 08:22:00 PM

Borat is a ridiculous movie about a Kazakstan's sixth most famous man and a leading journalist who comes to America to make a documentary for the State run TV network. It's so dumb, it's funny. The movie is using some real viral marketing to generate buzz. Check out the site of the Borat movie. You must enter top secret code to enter- if you find the code, please post it! Also, the movie producers signed up with MySpace's BlackCarpet to do private screenings in cities, complete with a MySpace profile for Borat.

The video below has been viewed over 800,000 since it was posted in August.

It's pretty wild. MySpace seems to have really found a business model in driving crowds to popular entertainment products. You can see also the edgy pictures and photos of Borat at the Cannes festival. The genre of content definitely is geared towards a younger crowd which really pushes the limits. I think this Borat movie premiere shows what big social networks can do. It's a great example of what MySpace can do that portals can't. While Yahoo! is merely linking to movie trailers for Borat, MySpace is getting users engaged in promoting and discussing it. That's a very different model - one that is interactive rather than static. What this means is that portals that focus on static information and content need to move towards more interactive experiences. Think about how AOL became successful. It was the chat rooms. MySpace is the same.

The success of MySpace really brings into question the viability of Yahoo!, MSN, AOL, and Google's current marketing strategy. After all, you don't seem them amassing loyal audiences that treat the site like a playground. Most of the users still go there because of e-mail which is static, boring, but necessary. I think it's only a matter of time before the portals go the MySpace route. Already, users are using it for messaging and this could bite into the e-mail usage of loyal portal users. MySpace is about fun products and entertainment and consumers like to have fun.

Wanted: Cheese Artisans, Pet Psychics, and Human Billboards, Plus 100 BullShit Jobs

posted by MR WAVETHEORY at 10/02/2006 07:16:00 PM
If you're looking for a cushy job, then look no further. There are plenty. People everyday are getting paid to be cheese artisans, pet psychics, and human billboards. Wonder what a pet psychic does for living, then you need to read 100 Bullshit Jobs...And How to Get Them, by Stanley Bing.

You might think that your job is bullshit until you read the book which talks about 100 Bullshit Jobs. Read about the poor fellow who gets paid to be a Pop Tart or Aquarium Cleaner. Cable News Demagogue? Think Jim Cramer. Read an excerpt here. There is a word for this kind of bullshit job: sinecure defined by Dictionary.com as:

si‧ne‧cure[sahy-ni-kyoor, sin-i-] Pronunciation Key - Show IPA Pronunciation
–noun
1.an office or position requiring little or no work, esp. one yielding profitable returns.
2.an ecclesiastical benefice without cure of souls.


Yes, that is how bad it is. There is an actual word for BS jobs. So, next time, you know you're not the only poor bloke.

Marvell Warns - Now You Know Marvell Is No Super Hero

posted by MR WAVETHEORY at 10/02/2006 05:27:00 PM


I wrote a few weeks ago that Marvell is no super hero. Today, Marvell warned and its stocked tanked 18%. Marvell Technology Group Ltd (Nasdaq MRVL) issued a press release is here. Congratulations to everyone who acted upon it!

* Marvell's acquisition strategy is not working

* Revenues are running short of estimates
* Problems with back dating stock options

Marvell is now expecting the revenues to be down about 10% from $574 million. Lower demand for disk drives is the reason. Interesting to notice that just a month ago Marvell's founders were on the front cover of Forbes as the new cool couple in tech land. That was their one month of fame.

Weili Dai was also recently on the list of 400 Richest Americans on Forbes. I think this means they are officially off the list. Easy come. Easy go. The photo on top was from the Forbes 400 list.

Sayonara Nasdaq Gambling Stocks - Gigamedia, Cryptologic, Optimal Group

posted by MR WAVETHEORY at 10/02/2006 07:07:00 AM















Nasdaq online gambling stocks are down huge along with their London brethen and fellow gamblign stocks like PartyGaming which were crushed. It's not everyday that an entire industry gets legislated out of existence!

The US stocks are:

Gigamedia Ltd. (Nasdaq GIGM)- Focus on online blackjack and poker and subject of a recent Investors Business Daily mention
Cryptologic, Inc. (Nasdaq CRYP) - Provides backend services to poker sites, lost largest customer this quarter, InterCasino
Optimal Group, Inc. (Nasdaq OPMR) - Payment and credit processing for gambling sites through FirePay

So, how is it looking? Not too good...

Columnar
SymbolTimeTradeChange% ChgVolumeIntradayRelated Info
GIGM9:51AM ET9.62Down 1.58Down 14.11%1,943,748Chart, Messages, Key Stats, More
CRYP9:51AM ET17.53Down 4.51Down 20.46%2,163,001Chart, Messages, Key Stats, More
OPMR9:51AM ET8.30Down 3.46Down 29.42%2,502,677Chart, Messages, Key Stats, More


Cryptologic is doing OK because it has a buyback going on - it announced last week just days before the legislation was passed. Should we say that they knew what was going to happen? (Read more previous article on how they generated $104 million out of thin air.)

Gigamedia is holding up because investors think it has more exposure to Europe than the US.

Optimal Group - well, it's getting crushed because the Safe Port Act (which is the bill that the Online gambling act was attached to) specifically prohibits businesses from transferring money for gambling activities.

Google Buys Garage for $1.3 million

posted by MR WAVETHEORY at 10/02/2006 04:02:00 AM












The Mountain View-based company bought the 1,900-square-foot home in nearby Menlo Park from one of its own employees, Susan Wojcicki, who had agreed to lease her garage for $1,700 per month because she wanted some help paying the mortgage.











Wojcicki, now Google's vice president of product management, didn't work for the company at the time and only knew the Stanford University graduate students because one of her friends had dated Brin.


What is the address of the Google Garage? How can I visit the Google Garage?
The address of the Google Garage is:

232 SANTA MARGARITA AVE
MENLO PARK CA 94025-2727

Thanks to Google, you can see a Google Map of the Google Garage.









Google bought the Garage on September 8, 2006. The assessed value of the property was $704,252.