understanding the psychology of behavior

So, two Old Media companies come together in an attempt to create a platform that will essentially be the center of distribution for their content. Sounds interesting. They are finally taking more of a controlling roll within the Internet.  (I will use the name Clown Co to describe the ‘nameless entity’ because I like the name it was given by others within the blog-o-sphere.)

From what I gather, they will be creating Clown Co, which in turn will be used to upload content from users and their content libraries (so far). Clown Co will then embed ads, and distribute those ad-embedded videos to their distribution partners. Currently their distribution partners pretty much control around 45% of the online video market share space. This all sounds goods for Clown Co.  Also, Clown Co’s distribution partners do not include Google and Youtube, which controls about 50-55% of the online video market share. Clown Co said they are open to all partners, but we must wait and see.

But, what does this really mean?

It means Clown Co. will most likely control the ads embedded within the content it distributes, which means it is the same formula being used via the traditional network distribution. Which means it ignores the preference of the users in the individual sites it will be distributing to. I do not know if targeted advertising matters when video is involved, but it does tell me Old Media probably does not care enough about it to utilize it. (Or maybe the ads will be relevant as per the specific content.)

Basically the distribution aspect of Clown Co reminds me of another that already exists. It is called Veoh.com. I can only imagine Veoh.com’s goal is similar to Clown Co… to ultimately distribute high quality content all to multiple video sites, not just their site.

If this is what Clown Co decides to do, so be it. I do not really care how NBC or FOX puts their content on demand via the Net, so long as they do it. But if I were an investor of NWS and GE I would be pretty upset that they are trying to re-create the wheel. I mean are their ambitions to create “the largest ad platform on earth” realistic? Do they have the knowledge of the Web and video site users to not mess up Clown Co? Will management egos get in the way?

If Clown Co wants to do the job of embedding the ads, maintain and create the ad inventory so be it. Ultimately the money is made via the amount of times the clip is viewed. As such, Youtube should become a distribution partner, assuming terms are fair. (Of Course this assumes Old Media will actually create a forum so great.)

What if others decide to pursue a similar distribution model? Will NBC and FOX not license their content to other companies because of Clown Co? Will they sacrifice potential profit for control?

Also if other companies, such as Google who understand internet users and advertising on the web, just want the raw content so they can utilize their own ‘Ad’ embedding system to maximize profits, will FOX and NBC provide the content?

There are still way too many questions regarding Clown Co. I just wish the Press Release was open to all reporters/bloggers so real questions were asked. The Press Release in-it-of-itself tells me the creators of Clown Co still do not understand the Net and its Users.

A European Google Exec stated that Google was talking to Samsung to build a phone. The blogs, then other media forums, ran with the story as if Google was developing a phone. (Most likely to get people’s attention due to the hype of the iPhone.)

In short order, a Google VP, Alan Eustace dismissed the Google Phone assumptions, and stated they were creating software for phones. What does this mean? It means a lot of things that were already created for the mobile phone. (ie Google Maps, search, G-Mail and more.)

The areas of software development I would focus on is Google Maps and Search. On top of this I would focus on Google’s Director of Research Peter Norvig. Peter Norvig is an Artificial Intelligence (AI) mad man. Combine the knowledge of Google Maps, your desires through Google Search and AI software that is able to learn what you like… you have an intelligent advisor that can suggest ideas to you.

This is concept is not new. Eric Schmidt has been touting it for sometime now. When he is at a conference and says, ‘wouldn’t it be nice if you searched in your mobile phone and wanted pizza, and the phone told you about a great pizza store as per your location’.

Think about this for a second, and what it takes to make this work, along with the potential of local advertising via this medium.

All the components are in place except the unifying software (as far as I know). But the recent talk of the Google Phone did reveal, at least to me, Google is in testing phase of this software that will unify their other services, and add a personal twist to the result of your search.

The only one thing that may find complex would be to trust whether or not the pizza store is ‘great’. IMO, Zagat or other User generated rating systems can be tied into the software.

Now I do not know about the specific electrical components needed to make this work via a mobile phone, and maybe Google didn’t either. So they talked to Samsung Engineers to develop one as per their specifications the software would require.

I do not think there will be a major correction, unless some catalyst is provided, but things look overbought (for the short-term). I’m seeing it across the board, so there maybe some level of consolidation next week.

I am more interested in seeing how the market react next week, then playing it. Currently I am still just long my displayed positions… no market short, even though I am anticipating some sort of consolidation.

Today’s volume on DNDN saw its most active day in a little over a year and a half. And this action was seen w/no news (that I know of). I do not know if there was a research report out or something like that… but from what I can see no real revolutionary new news that would cause such activity.

Because of the lack of news and coming off its lows, IMO, the movement is short covering.

It sucks when a Billionaire (or someone from his camp) tells a nobody (me) he has no clue.  Then again I never claimed to have one .  All I have ever claimed was logic. (But at least he responds to comments… that in it of itself is interesting.)

So Mark ‘thing up his ass for YouTube/Googe’ Cuban writes a post claiming the Old Media venture (a wannabe blend of Joost/YouTube) is a GREAT idea. (article)

Why is it so Great?  What has Old Media ever done, in the Internet space, which was GREAT and allows Cuban’s argument to hold any water? And why should people/investors believe now they are going to be great at this?  (The only caveat I will throw in to these questions is MySpace.  But, and a BIG BUT, is that News Corp bought MySpace after the foundations for traffic growth were well on their way.  And the best thing NWS did was to not fuck with the vision of its creators.)

So, other than MySpace, what revolutionary concept or idea or website did Old Media create or even improve upon?  What great innovation did they accomplish within the Internet space, let alone video over the Internet? 

What kind of leverage is this site going to have when its content can be viewed else where, and its audience is ZERO?

No matter how great this new venture is… ultimately the venture itself is irrelevant because content needs to be viewed.  Content needs an audience or it is worthless.

Content providers still do not get it.  Content providers need to go to the audience, the audience will not come to them.  But here they are creating a ‘me too’ site when plenty of other options already exist.  So not only are they NOT yet going to the audience, they decide to increase their spending on designing the site, maintaining the site, marketing the site, selling ads space through the site.

So they are going to take on all these added responsibilities, when there are plenty of options already out their for web distribution. 

Oh, but I know of one option that they do not like… a video site w/an established audience.

Cuban… lick my ass.  (And everyone knows Google’s Video search is lacking, that is no secret.  But their general search will remain healthy.)

When I first saw last months CPI numbers, and saw food increased I initially thought of the price of corn. I did not mention anything here due to the lack of articles about it, to reference it… but I found one. (article)

The one positive I see from this… it is an economic incentive to farm.

The one negative… until the incentive is realize and more corn/farmers arise, high prices will remain.

But understanding how capitalism works, I envision the cost of food to start going down as more farms expand or come online. It just takes some time. (How much time is the question I want to know.)

Thought I would pass this article along. This was a really nice simple step by step article toward valuing an unproven biotech company. I like it even more because the author (Adam Feuerstein) focuses on DNDN.

His ‘conservative’ estimates bring it to $27/share.

I especially like his last valuation model. I like it because it reminds me, at the very least, Provenge should be approved for those very sick that hormone theropy does not help.

This was from Viacom, regarding the EFF lawsuit…

“Viacom termed the lawsuit a waste of scarce judicial resources…”

Call me crazy, but I thought the same thing when Viacom filed their suit against GOOG.

I hit the save button and lost my entire analysis on the old media companies attempt to compete with YouTube.

Word Press you suck… you suck donkey balls.

Ever since ‘Panama’ came out a lot of talking heads have been touting Yahoo stock over Google stock due to Yahoo’s accelarated revenue and earnings growth. No one can really argue with accelarated revenue and earnings, and the recent appreciation in Yahoo’s stock reflects this accelaration.

Many are praising Panama, even Yahoo’s CEO himself gets a ‘broad smile’ from the results they are seeing with the system, BUT what is it actually doing? Panama was established to better monetize Yahoo’s search traffic, and based on Terry’s smile this is obviously happening. The problem I have with all the talking heads praising Panama, is that they are not mentioning Yahoo’s shrinking market share and huge gap between Google search.

Google is still gaining market share in search (as the February comScore ratings suggests), which means it has most of the users. Ultimately advertisers need to be where the audience is located. So while Yahoo appears to be doing a good job toward monetizing their search users and market share (finally), their ability to milk them is limited to their market share and growth of the sector. Google’s massive growth comes from their massive amounts of users (it continuously gains), along with sector growth. As such, I am not expecting Yahoo to see ‘Google-esc’ levels of growth beyond their first few months of initial monetization. After the initial monetiation, Yahoo search revenues should trend with sector growth or even lower if it continues to lose market share.