Statistical Errors and Lifetime Value
Custora, a churn analysis and lifetime value calculation company, notes the results of not segmenting customers by churn rate. This is usually a bigger hypothetical than real problem, since different user categories aren’t usually quite so differentiated. But the hypothetical does illustrate the risks of simplistic user retention analysis.
Did the Internet Finally Kill the Fairness Doctrine?
The FCC has officially ended the Fairness Doctrine, which had previously been unenforced due to constitutionality issues. It’s interesting to consider how hard it would be to implement the Fairness Doctrine now, given how distributed the web is. How would Twitter handle it if a conservative meme happened to get heavily retweeted? What would WordPress do if their top bloggers all leaned left?
Google’s Hard Sell for the +1 Button
A Forbes article (since deleted, apparently), claimed that Google salespeople pushed for a +1 button by noting that not having one would hurt a site’s traffic. This is going to come up often. Google has maintained strict separation between paid search and organic search, but the +1 button straddles both worlds in several ways: +1s can be applied to ads as well as landing pages, and the +1 signal can generate more traffic and thus more ad clicks. But Google has generally been careful about keeping editorial and business separate.
Tumblr Raising a Massive Round?
Tumblr is one of the few sites that qualifies as a social media property but still allows traditional followed links. This has made it a pretty hot property among marketers—and is perhaps why VCs are rumored to be investing up to $100mm in the company without a clear business model.
StumbleUpon: A History
Mashable has a brief history of social network StumbleUpon. A few interesting points:
- Even with 600,000 users in in 2006, they weren’t sure it was a viable business. This reflects on both the funding climate of 2006 and the difficulty of monetizing social media clicks.
- eBay’s non-core acquisitions
Youtube’s New Attribution Model
WatchMojo says it’s a big deal. It’s hard to tell exactly how significant this will be: it looks like the net result is that it makes Youtube ads a more “fungible” category—it’s easier to measure the tradeoff between those ad impressions and others. The real question is whether Youtube was undervalued or overvalued in the absence of good measurements.
If Youtube was undervalued, one winner could be Demand Media, which supplies a huge amount of video content to Youtube, all of it designed to monetize.
Meanwhile, Facebook is the #3 video site.
On Daily Deal Quality
There’s a strong correlation between three-star Yelp reviews and daily deal participation. Bad reviews, and the restaurant is a bad experience for the daily deal site’s customers; good reviews, and it’s hard to justify the marketing expenditure. Which is why it’s easy to claim that daily deals are mediocre. A night of bad-but-cheap sushi isn’t a disaster, though.
What the GroupMe Deal Does for New York Tech
GroupMe was an early, easy win for several prominent New York angels, and returned millions of dollars to the tech investing ecosystem. Not all of that money will go straight back into angel deals, but it doesn’t take many acquisitions like this to keep things humming even if the broader market slows down.
Merrill Lynch Allows Brokers to Use LinkedIn
One of the ‘coiled spring’ aspects of social media business models is that their best customers are their most reluctant—lawyers, brokers, and doctors all provide highly monetizable advice that tends to risk getting them sued on a regular basis. Now that Merrill Lynch is letting brokers use LinkedIn, we may see more of this.
Email Usage Collapsing Among Teens
ComScore claims that all age groups under 55 are using email less often. It’s hard to interpret this: many, many more people use blogs, tweets, and Facebook messages for things that email used to be used for, so there’s a decent chance that email-style communication is growing, just without the “@” sign.
Hipmunk on the Economics of Air Travel
If there’s one critical point in this interview with Hipmunk’s founders, it is that the online airline ticket business is just lead-generation for the online hotel reservation business. This has been part of the bull thesis for Priceline for a while now.
Startups and Platforms
Lee Hower has a smart post on why platform startups often fail. The paradox goes a little deeper than that: not only do platform startups usually fail (or switch to building something successful on their platform), but the few platform startups that do succeed start out as non-platform companies before abstracting out the platform (e.g. Facebook, Twitter).
Selling Page-One Rankings Through Google News Inclusion
A few sites are selling implicit page one rankings through their Google News inclusion. This is close to the edge for Google—they don’t want it to be easy to buy page one placement, but they do want to encourage people to build good sites, and a site that powerful is probably a net benefit to Google’s ecosystem. It will be interesting to see how they handle this.
On Citing Sources and Such
Last night, our co-founder and Head of Research published a post about Sina Weibo. We inadvertently removed all of the links before publishing. (You can see this in a few cases where the piece mentions another blog post and doesn’t link to them. We’re correcting it now. One of the folks we failed to link to was Bill Bishop at Digicha, who was understandably upset.
We’ve explained the situation and gotten a partial correction from Bill. (And there’s plenty of circumstantial evidence supporting our claim that we didn’t just publish his stuff without a link and expect to get away with it. For example, the fact that we shared the link to our post with him via Twitter.)
We’re big believers in transparency and attribution. Since we’re in the news aggregation business and the research business, we can’t survive without them. We’ve apologized to Bill for publishing the piece without linking to him—accidental or not, it’s unacceptable—and we’d also like to apologize to our readers for any confusion this may have engendered.
Digital Due Diligence Weekly