half a billion dollars for Yelp

Is Yelp really worth that much?

A quick back-of-the-envelope calculation makes me think not.
They've had $31 MM in funding, so the VCs will be getting a 16x exit, which is rather high. But then, Yelp has done rather well.
At 150+ employees, that's $30 MM /yr straight out. Plus some other SG&A expenses. With $30 MM revenue in 2009, I'd say they might be almost breaking even. Projected revenues in 2010 are $50 MM, so they might bring in a little less than $20 MM profit.
If I were the Yelp board, I'd take the $500 MM.

However, everyone seems to look at 2010 as the year of recovery, and online advertising is expected to grow quite a bit. If they do better than projected, the same offer might be worth more 6-9 months down the line.

If they want to go IPO, I think that as a retail investor I wouldn't buy. Not because of what it is worth today, but because I haven't seen much innovation there - how will it keep up with the fast changing landscape? I fear Yelp.com, as in the website by itself, might be plateauing out.

However, it seems to be worth half a billion dollars to Google. Think about who else might acquire Yelp.

Microsoft.
Yelp fits right in with Microsoft's Bing. Bing is approaching search vertical by vertical (which I think is the right way, and Google might be coming around to it too - it has been looking at Yelp and Trulia; but I digress). And Microsoft is the only company offering some real competition to Google's core business right now. So it is probably worth for Google to pay a few millions extra to acquire Yelp and thus block Microsoft.

Another important strategic advantage Yelp can bring to either of the two companies is local data and a social angle. Neither MS nor G are strong in these areas. The social aspect of Yelp is not been fully tapped into yet, but users participate on Yelp like nowhere else (except, perhaps, Twitter). Not even Facebook - activities on Facebook are becoming quite frivolous and there is little likelihood of anything serious to catch on there.

I think Microsoft would do more justice to Yelp, than Google. The Search Wars will get much more interesting if either of them does eventually acquire Yelp.

(numbers used in estimations taken from Crunchbase and/or Wikipedia)

search interfaces

I'm watching a video of Microsoft's Pivot - http://microsoftpdc.com/Sessions/VTL05.
They don't call it a search engine, but finding and exploring information on the web seems to be the primary task. The UI is extremely rich.

One of the reasons Sponsored Links on SERPs do so well is because the SERP itself is quite poor - in quality of the results as well as the user experience. If search engines provided all the answers, who would go clicking on ads.

Therefore, search supports a multi-billion dollar business because it doesn't work properly!

Perhaps that is the reason for such little progress in the area in the past so many years. Especially in the UI/UX.
Who's interested in breaking the current model?

ease of social interactions

If I may indulge in a little of that 20-20 hindsight, it is easy to see why IM, then social networks and then Twitter became so popular.

There was an inherent cost associated in picking up a telephone and calling somebody - you had to give a few minutes of focused attention to them, know what to speak about, make sure what you're saying is of value to them, think about whether they would be free to talk and for how long. And similarly for receiving a phone call.

Along came the Instant Messenger and did away with the need for pleasantries on the phone. You would know when people were available. You could have one sentence conversations with people as though they had always been in the same room with you. Much lower cost.

Social Networks. Even easier to remain connected with people. It became acceptable and usual, to "like" a link posted by someone you had not met in years, or to refute them rebuking your favorite sportsperson. Photographs - the most personal touch of all - added so much to that virtual link.

Then Twitter made it even easier and customary to share random thoughts, opinions, online content, gripes, victories, food menus, bad jokes and so many other mundane life-pieces. You could just talk into the air, and so many would listen. And a few would even reply back.

All this - so much easier than picking up the phone, wondering if it's the right time to call up someone you have not met in years to find out how their holiday in Greece was and whether they would recommend the hotel there. Wait, how do you even know they went to Greece this summer? Wait! How can you even assume you have their phone number!

Looking at this trend, what do you think is the next step in making this process even easier?
Listening to music with friends who are online at the same time? Watching Hulu with them? Just plain old browsing that you can share with people?

Two opportunities arise: the more things people share, the more you need help to consume all of it. And how do you meet all these people in the first place? Has that changed as dramatically as keeping in touch with all the people you have met? Can that change?

augmented fantasy

How involving would it be for the audience (and the creators) if the characters of a TV series were on Twitter. Tweeting as if they were real people, about their thoughts, events - some part of the main plot, some more to add to their characterizations.

The audience could reply to their tweets, and the characters would reply back. And have a conversation with the real world.

something missing

While I really like Quentin Tarantino's artistry and bent of imagination, I did not like Inglourious Basterds quite as much as his other films.

It's the small things in the plot that didn't go down well with me. It seems as if he wasn't quite sure how real or how fantastic to make his story and ended up with a little bit of both but neither. Not to mention that this mangling was not of individual characters, but of representations of entire political entities.

This article here - http://www.thedailybeast.com/blogs-and-stories/2009-08-09/my-father-the-inglourious-basterd/ - explains a little of that aftertaste I speak of.

To quote from the article a British soldier around the time of the Allied Invasion: ' “If you saw a dead German, you passed him and you didn’t laugh.” '

Other than that aftertaste, the film, by itself, is thoroughly enjoyable, being very classic Tarantino (although some scenes seemed to be directly adapted from Kill Bill).

Update: Yet another interesting article: The tragedy of Tarantino.

the blue umbrella

A quaint story by Ruskin Bond - I remember reading it in school in class 3 or 4. I even remember it was where I first learnt the word ravine. Funny how these tiny memories remain.

The film multiplies the magic of the story with Vishal Bharadwaj's genius. I love how he has used colour, and his music is brilliant (he composed his own). What is truly wonderful is how he manages to extract the ras* of a culture with a thousand years of history and portray it, so lifelike and along with all the eccentricities, on the screen.

Here's a trailer:


Do watch the movie if you get a chance.
It's also available on Netflix streaming.

*ras: hindi; pronounced as the first syllable in "rustic"; the closest english equivalent might be "essence", but the word definitely encapsulates something more that I'm not able to put my finger on. If you've got a better explanation, please do leave a comment.

asterix in hindi

My Monday morning was brightened up with a cousin telling me of Asterix comics translated into hindi. If you know hindi, check out how they've translated the names:

Dogmatix...........Kutta Bhaunkix
Vitalstatistix........Mukhiya Motumallix
Impedimenta.......Pyaari Sirdarda
Cacofonix..........Gavaiya Besurix
Fulliautomatix.....Lohatodix
Getafix.............Hakeem Vaidix

(Thank you, Nidhi!)

manner of speaking

I came across this talk by Seth Godin at the 2008 Business of Software conference.

Besides the great content and insights that Seth Godin always puts out, there are two things that I found incredible.

The first is his style of delivering the content. There was a lot of impact to the way he speaks, taking up the whole stage, moving about, waving his hands, etc. It conveys a lot of energy and energizes the audience. He also moves from one point to another quickly, making it worth his time and yours. It also is done on the assumption that the audience is smart, and can keep up with him. It keep the audience one their toes, alert and thinking all the time.

The second thing nearly blew me away. It came out when at the end he talked about some ideas he was working on at the time, yet to be released. He asked the audience to not take photographs or blog about it. And jumped into telling them about his new idea, establishing a new level of trust. The amount of commitment he shows to his audience is fascinating: you have come to hear me talk, and I am going to do everything I can to make it worth your while.

Watch it: (feedreaders may have to click here)

comments

Once in a while I click through from my feed reader to the webpage of the article I find is so much content there in the comments section that I miss out on.

And when you look at it, it is not uncommon to find a lot of user feedback there. Opinions given freely, for the sake of making your voice heard - it is natural. More people leave feedback on various blogs than on the feedback form for a product.

If only there were a way to extract all this information from there. The importance of listening to customers or potential customers cannot be understated.

At the very least, feed readers should have a way of integrating comments with the post.

meta blogging

@achitnis asked a simple question the other day on Twitter, and it occured to me that the only reason I haven't been blogging that I haven't had time to research and formulate my thoughts in a structured manner. Which may be a reasonable excuse. Or not.

So I've decided to blog even unbaked ideas, half-thought thoughts and at least the start the conversation. Leave me a comment or tweet back or grab me on IM or over coffee if you think the conversation is interesting and should be continued.

I'm going to think of a way to make my blog more wiki-like, so I can keep updating my posts and building upon them.

new music

Where do you find new music?
New not as in recently released, but new as in never heard before by you.

Odds are pretty high that you heard it in a friend's car or on their iPod, at a party or a YouTube link someone sent you.

Music is inherently social.
We like to enjoy music in company. And endorse our enjoyment by singing along, dancing to it, or even just tapping our feet. We pick up music when see other people enjoying the music.

Music on the web (and on our computers) sorely needs that social aspect.

Update:
Actually, there is one thing: some chat applications have a feature that changes your status to the title of music playing currently on your computer.

on indian tv journalism

With the 2009 Indian Election results slowly trickling in, I am happy to see how the people have voted. And even happier to see some of the younger and more educated candidates leading (as yet) over the incumbents.

In all this excitement, the media is, of course, most excited. I was listening to a panel discussion on NDTV.com and here are some of the striking remarks/exchanges that I have to report from 15 minutes of listening in:

--------
BJP chappie: We hold no one leader responsible for our performance.
Journalist (in all earnestness!): Sir, does that mean you have no responsible leader?

Yes, I would love for you to paraphrase what I say on a daily basis.
---------
Journalist to CPM: Are you regretting your decision to break out of the governing coalition?
CPM: No. We like to stand by our ideals and what we believe in.
Journalist: But in this era of coalition governments, shouldn't you compromise a little?

That's great. Urge him to compromise so you can catch him off guard. Oh, you don't play that game? You really believe he should compromise on his ideals?
---------
Journalist to BJP: Do you feel L.K.Advani has been let down by the party think-tank? I know you are a member of the think-tank so you will say no, but....

Haha. You don't say!
---------
Journalist to BJP rep: Please introspect.

What, are you confessing him?
---------
Journalist to BJP (Barkha Dutt, if I'm not wrong): Have you accepted defeat?
BJP: No, the results aren't final yet, and so far we are lagging. But we want to wait for the results.
Journalist: Once it is clear that you have lost, as it soon will be, you will have to concede defeat. In that case what will your comments be?

Phew. Why don't you stand for election with that attitude, miss?
--------

We have the media to hold a mirror up to the countenance of our political leaders. We need someone to do the same for the media.

the great indian election

Even though this Economist article says it all, the numbers signifying the scale of the national elections in India is something I just have to highlight by repeating here:

It will be spread over 5 stages,
taking 4 weeks and
involving 6.5 million staff.

In 543 constituencies,
4,617 candidates,
representing some 300 parties,
will compete for the ballots of an electorate of 714 million eligible voters.

In 828,804 polling stations,
1,368,430 electronic voting machines will be deployed.

It is hard not to be impressed by the process—and its resilience.

Do read http://www.economist.com/opinion/displaystory.cfm?story_id=13492427.
I so wish India had a provision for absentee ballot.

the stimulus package and the Valley

I was at a panel discussion hosted by Stanford's Venture Lab today called "The New Stimulus Package: What Does it Mean for the Valley?".

While a lot of it was plug by the panelists to promote their own organizations/businesses, and the rest too high level, there was some interesting information in there.

Quite a bit of money in the stimulus package is available to entrepreneurs, if they apply for grants. Obviously, their businesses must be able to justify these grants. The government is focusing on things like clean tech, energy efficiency, healthcare, infrastructure, etc. and so the money is allocated to these sectors. The numbers were from $500k to $20MM per grant.

The best part about these grants? They are anti-dilutory.

The amount of detail published (on recovery.gov, the stimulus package bill, etc.) by the government about the spending plan for the stimulus money is extremely impressive. It is available to everyone to comment, criticize and use. And people are doing it with a lot of interest.

The government itself is asking businesses and entrepreneurs to take initiative in this economic climate. See fbo.gov - Federal Business Opportunities.

Research institutions like the Lawrence Livermore Laboratories have a huge corpus of technologies unused for any commercial purpose that they are willing to let entrepreneurs use. Information about these is up on their websites, and anyone can partner with them to use their technology. Last year LLNL had 16 startups from existing technologies they had created but weren't using. And, they fund startups too.

The Fogarty Institute for Innovation does similar things around healthcare. They are part of the El Camino Hospital and are even helping a startup working on helping diabetics through social networking and an iPhone application prepare their grant application.

Movement of anything costs money. And government grants are not an exception. There are startups helping other startups get these government grants - they will do all your paperwork and grant applications for you, talk to legislators for you, etc. But a secondary economy was to be expected when sums of money amounting to nearly a trillion dollars are involved. It is not surprising how middle men are everywhere, and how quickly any vacuum is filled up.

Every sector has a detailed plan of how to spend their money. Except for education, which has $60 billion allocated. No one knows what to do with education!

There are some slides with exact numbers about the amounts of money involved and how it is all allocated and where the opportunities are. I'll link to them once they are up.

tinkering

Among hype about everything Twitter, one that caught my eye recently was Tinker.

It is a simple idea but extremely powerful in its ability to go viral. It is based on searches on Twitter and people create Events and provide keywords that might be used in tweets talking about that event to find tweets about that Event. Their website, of course, will show-and-tell you more.

These "Events" have a much larger scope than just real-life events that seem to be the focus at the moment. Essentially, discussions involving any entity can be tracked using the appropriate keywords. I really like how Tinker has packaged a simple use of the Twitter Search API - making it viral through widgets and a community. It is also mind-bogglingly easy to find events and track them - browsing and a click will suffice for the popular events. Most people using Twitter would be tech-savvy enough to be able to search using the right keywords and add the resulting feed to their feedreaders. But the concept of sharing "Events", finding those created by other users is very cool.

Something Twitter ought to have done already?

And this question re-inforces my belief that Twitter is a platform. But does it think and behave like one? In its quest for a business model, perhaps not. How about letting others in this ecological system find the business models and share revenue?

Coming back to Tinker. Play around with for 5 minutes and you will see that it just displays tweets that match certain keywords. And raises the question: what does Tinker not do. It does not make it easy for you sift through the numerous tweets about an event and glean information from there. Which, I would assume, is crux of the problem.

And since that is not enough food for thought, do not miss reading http://www.juiceanalytics.com/writing/twitter-analytics-analytics/ where Zach Gemignani talks about analytics as opposed to just metrics and shows some very interesting things he's done with the Twitter data.

CrisisOfCredit.com

CrisisOfCredit.com explains it perfectly - with a very simple animated story:


(via @vineeth)

The creators of this video did not close the loop completely. The investors at the end who have lost the money - where does their money come from? The creators of wealth in any economy are the workers, at the bottom of the chain in our case. These workers - you and I - want to give our monies to these investors in the hope of getting back "more" "later". And we keep asking for more - from our pension funds, from our 401Ks, from our insurance plans. This money comes back to us when we take a loan or a mortgage, leveraged many times over. We validate the business model of these investors.

Essentially, everyone is borrowing money from the future because we are too greedy to sustain ourselves on what we have today.

mac & pc, pc & mac

It's interesting how the two brands have evolved.

PC stands for Personal Computer - a very generic term. Yet it has come to mean a computer running Windows. And Windows has captured the mindshare associated with personal computers. Mac, not meaning anything, has evolved from the opposite direction and has come to mean everything the PC is not. In doing so, it has captured the same mindshare associated with personal computers.

books

I went and got myself a bookcase yesterday, and took my books from Bangalore out of their carton. I should have done this ages ago. There is something about having books around that makes the place feel more like home. Something old and familiar.

When I found only a handful of books in the carton, I realized just how many I have left behind. There was a brief moment of regret, but then, it's good to have space for newer books. I used to read a book a week; sometimes, more. This has steadily been decreasing over the years. I have just finished The Watchmen and as I try to think back to what I had last read, I see Atonement in my reading list on this blog on the left. That was 9 or 10 months ago! I have read Neil Gaiman's Sandman series since, but that's hardly a consolation.

Just got Friedrich Dürrenmatt's The Visit and The Execution of Justice. Wikipedia describes his works as "macabre satire"! I'm looking forward to reading these.

man on wire

Phillipe Petit's style of narration draws you into his story - exactly as many other people with him in the film aver to his way of pulling others into his life, his dream, his story.

Makes one wonder what capacity it is in us to make anything into a piece of art. Something beyond just a Darwinian sense of survival, I hope!

Man on Wire is one of the most beautiful love stories I've seen. Yes, love story. Partly because it is not about love.

hello world, again

It has been a long blogging break. And a lot has happened since the last time I blogged.

I moved to the San Francisco bay area and have just been terribly caught up with settling in.

In the whirlwind of the past two and a half months, I've sneaked in a skiing trip and a week with old college friends who are here in the USA. I've also started taking an evening course at Stanford on product strategy. Lots of more things on the agenda, so keep listening!

I find a lot less free time here than I had in Bangalore, so blogging is going to be brief. But I hope I can keep it up, nevertheless. I'm more active on twitter, where the Conversation is. And is a better place to find me alive and kicking.