Peter Yared's Musings

This post was also published in BusinessWeek . So what happened to open source as a business? There was a wave of “commercial open source” companies that were going to change the world, including SugarCRM, Alfresco, Jasper, Pentaho, and ActiveGrid, a company I started in 2003 to bring open source software into businesses. Each of these companies were going to lower costs with the open source business model and displace existing vendors in categories such as CRM, Document Management, Reporting, and Business Intelligence. It’s been over six years, and no commercial open source companies other than Red Hat, MySQL, and JBoss have had liquidity events. So what happened? Oracle and IBM, which derive the vast majority of their software revenue from proprietary software, have an increasing share of the software market. And there’s a bunch of commercial open source companies still trudging along. 1. The only successful open source companies sell commodities. Linux, MySQL, and JBoss are the on...

You may have read in BusinessWeek or TechCrunch when iWidgets closed an A round in January, despite the tough economic climate. In addition to having a strong product that solves a big headache for content publishers, a big part of why we got funded is our capital efficiency. iWidgets spent only $1.5M in 18 months to bring our iWidgets platform to market, launch it with a major customer (CBS), and then sign three more customers. Our leading competitor spent $10M in the same amount of time, just laid off a large portion of their staff, have no business model, and a product that solves yesterday's problem. While you can’t build a business without a plan, capital efficiency is the often-overlooked key ingredient for a successful startup. Capital efficiency isn’t just about not wasting money, it’s also about not having any fat. Too often, bloated, fatty companies are insulated from market realities — you can’t feel it when the road starts to get rough. So it is not just in this eco...

This post was also published in AdWeek. Over the past couple of years, the decreasing effectiveness of banner ads has led to increased hand-wringing. When I give talks nowadays, I start off by asking who clicked on a banner ad that day. No hands go up. Banner ads were all the rage for many years, culminating in 2007 with Google's $3.5 billion acquisition of DoubleClick. But as more people spend more time online, banner ads are becoming the billboards of the Internet. Billboards can be very effective. Ubiquitous Coca-Cola billboards build the brand. Billboards placed in highly visible locations like Times Square and Giants Stadium attract a premium. But it's quite the exceptional billboard that actually makes you take action -- calling a listed phone number to learn more about the business, for example -- just like it's quite the exceptional banner ad that gets you to click on it. And well-placed billboards, such as one on a highway advertising a restaurant in a ne...

A monumental shift in web traffic happened over the holiday season. Sites ranging from gossip such as PerezHilton.com to live streaming such as UStream.com suddenly began getting more of their traffic coming from Facebook than from Google. As reported in HitWise , last week PerezHilton.com had 8.7% of its visits from Facebook vs. 7.62% from Google. PerezHilton.com is a very popular site that recently scored its best traffic day ever in late February with 13.9 million page views. Content sites have spent billions of dollars — $12.2 billion in 2008 according to a recent eMarkerter report — on search engine optimization and search engine marketing in order to get traffic from Google and the other search sites. Yet organic traffic from Facebook is beating hits from Google. Why? The answer is pretty simple. It’s the same driving force that’s behind so much of social media. You are much more likely to click on a link that your friend recommends than you are to trust the arbitrary d...

I have blogged in the past about how Google's PageRank algorithm is providing decreasingly useful search results, and how vertical search is much more targeted and useful. The main issue here is that most searches are context-driven, for example when you type in a word and hit search, are you looking to buy something, a definition, or a review? The vast majority of my searches are vertical searches from the Firefox search toolbar. I have installed the following search engines into the dropdown: Amazon Dictionary.com EBay Facebook Google Maps IMDb LinkedIn MySpace Songza TheFind.com Thesaurus.com WhoIs Lookup Wikipedia Yelp YouTube Mycroft (to find more search engines to add!) For example, if I hear of a new artist on the radio and want to check out more tracks, I select Songza. If I want to check out their fan presence I select MySpace. And if I want to buy tracks or the album, I select Amazon. Picking the search vertical and then typing the search term is much more efficient ...

A thought occurred to me today while reading Virginia Hefferman's latest The Medium column in the Sunday New York Times, one of the best columns covering transitions in the media industry. Her article Content and Its Discontents laments how old media is becoming decimated. Yes, clearly reading a magazine or newspaper cover-to-cover is very old school, or as Jon Stewart poignantly nailed it with a joke newspaper entitled "Cincinnati Dump Accompaniment". But does it necessarily mean that content is dead just because newspapers and magazines are effectively dead? A newspaper column is to a newspaper as a track is to an album. The music industry has gone through a very similar transition as newspapers and magazines. Albums are definitely dead. Labels are pretty much dead. But music is flourishing! Fans can purchase tracks for a $1. A band of two like Ghostland Observatory or Trifonic can create amazing music that used to take bands of at least four.  Distributing a music vi...

Apple's next move occurred to me while I was walking by my local Apple store: Apple iTV, which will be:     Wall-mountable 37", 42", 50", 60+" LCD screens Look cool, with a hip Apple logo Stream iTunes video and audio content from the web and from your Mac Have special apps on the appstore that run on your TV (sports scores, etc.) Cable card compatible so you won't need a cable box Wirelessly display your MacBook's video feed iPhone-like touch screen remote control Include a browser controllable by above remote control's keyboard Built-in DVR So a very cool looking TV that is plug-and-play capable of showing video rentals and playing music. This will do to Sharp/Sony/Samsung/Comcast what the iPhone did to the Blackberry and AT&T: cost more, eviscerate the market, and bypass the network operator. Sweeeet.

I have posted a few times about how I often can go an entire day without going to a website, and instead spend my day in Google Reader to read content, iGoogle to see headlines and realtime information like stock quotes and weather, and Facebook for social information. Apparently I am not the only one spending most of my web time on these widget-oriented sites. Alexa 3 year usage graphs for top brands that I picked out at random all show decreasing or flat usage. Brands like FedEx and McDonalds are beginning to realize that their web presence is being increasingly ignored. Banner ad campaigns are increasingly expensive due to CPM price increases as ad placement competition increases. And to top it off, users hate banner ads more and more, so clickthrough rates (CTRs) are going down! Banner ad buyers now pay more for less! People don't go to brand web sites anymore, banner ads cost more, and people are not clicking on banner ads. These are trends that are not going to rever...

This post was also published in BusinessWeek . Widgets: The Future of Online Ads Look to the evolution of television advertising to understand the necessity of widgets in today's online world The sheer volume of Web sites has grown so overwhelming that an increasing number of consumers—not just those in their 20s—are adopting multipurpose tools to help them manage and personalize the vast amount of data thrown at them every day. The mainstream adoption of online social networks such as Facebook and MySpace and personalized home pages such as iGoogle and Netvibes reflects attempts by consumers to make the Web more manageable. This new mindset, not surprisingly, also holds for the way in which the audience is willing to engage with ads. Advertisers, many of which have only just begun shoveling more of their marketing dollars into promotional banners and boxes on Web sites, had better heed this shift sooner than later. Some Web trends prove to be fads, of course. But when hordes o...

This post was the source of a BusinessWeek article by Rachael King . There is a remarkable difference in the method and cost of startup infrastructure between when I started ActiveGrid in 2003 and wdgtbldr in 2007. Back in 2003, we still had to buy our own servers and hire IT people to get some basic services. This mindset prevailed into 2007, where to upgrade our Wiki into something much more functional, I learned that IT had physically installed two iterations of wikis on our servers. It was beyond me what features we would get from our own installation vs. a hosted one, so I suggested a policy of only using hosted infrastructure moving forwards. This led to a suggestion of having some meetings to discuss the concept, which in my experience means "not going to happen." :) Starting with a clean slate at wdgtbldr, there is definitely an "everything must be hosted" policy, and I am amazed at how cheaply and easily all of the functions of a small business can be se...