revenue

MySpace beating Facebook on ads? Well, duh

There's a big Wall Street Journal piece on Tuesday about how MySpace is still seriously beating Facebook in the advertising and marketing game, regardless of the fact that Facebook has started to breeze past it in traffic.

This is one of those stories geared toward the Journal's less technical readers, undoubtedly, since most of the details are no surprise to social media junkies. But the take-home point is a good one: Big media ownership has been helpful to MySpace, whereas the independent Facebook is still learning the advertising game.

MySpace is owned by News Corp. (which also owns … Read more

Intel warns on chip demand

Updated at 2:50 p.m. with correction of comments in FORM 10-Q

Intel reiterated in an SEC filing Friday that business conditions may worsen and that demand for its chips may take a hit because of global economic conditions.

As a result of the recent financial crisis, "there could be a number of follow-on effects from the credit crisis on Intel's business, including insolvency of key suppliers resulting in product delays; inability of customers to obtain credit to finance purchases of our products and/or customer insolvencies," Intel restated in a FORM 10-Q filing.

Intel also … Read more

Open source evolving into SaaS?

I've talked before about the close affinity between open source and SaaS, including that SaaS is built using open source, but it's only been this week that it the full import of open source-begets-SaaS came home to me.

Perhaps it was seeing Zimbra and OpenX both announce hosted offerings of their respective open-source email and ad server offerings.

Or perhaps it was my conversation with Bill Kaiser, a friend and Greylock venture capitalist, wherein it seemed that the most interesting new venture opportunities were in SaaS, and that open source has not resolved one of the fundamental problems with enterprise software: it's too complex, too cumbersome, and too Soviet in its design aesthetic.

This thought was underlined by Terry Barbounis, a friend and Christian Science Monitor CTO, who practically gushed about the positive experiences with SaaS offerings like Jive Software's Clearspace he has been having lately.

Open source is a massive upgrade over the proprietary lock-in of incumbent enterprise software solutions. It returns control to customers and makes it easy for them to try software for free and without obligation, as well as to tailor it to their individual needs.

But open source has not gone far enough - at least, as a movement - in addressing the need for software that is easy to pay for and use.

Intriguingly, somewhere in that need open source can be forgotten, as Dusty Davidson of BrightMix, an OpenX customer, unwittingly reveals in endorsing OpenX's hosted version:… Read more

It's becoming hard to distinguish open source from SaaS

I had a fascinating conversation with a Silicon Valley VC this morning. He has successfully invested in a range of open-source and software-as-a-service companies, and made a somewhat startling comment:

It's becoming harder and harder to discern between open-source and SaaS companies. Their revenue looks increasingly similar, as do their business models. It's becoming hard to tell, for example, whether SugarCRM is a SaaS company or an open-source company. In reality, it's both, and it's hard to tell where one begins and the other ends.

He is absolutely right, at least about the blending of SaaS and open source. As I noted in a previous post on SaaS business models, both open source and SaaS have increasingly turned to "freemium" models. Both are all about getting software in the hands of prospective customers as fast as possible, and looking to monetize that adoption downstream rather than upfront. Both provide a lower cost of entry and (often) a long-term cost savings, with a subscription-based revenue model.

Intriguingly, he told me that SaaS vendors have discovered that there is very little cost to supporting a customer, and little risk of churn once the customer is actively using the product. So more SaaS companies are finding ways to give away free versions of their service (which costs them little), monitoring actual usage, and sending in the sales team once adoption starts to increase. Sounds like open source, right?… Read more

eBay issues gloomy forecast as tech stocks tank again

Online auction giant eBay lowered its fourth-quarter revenue expectations and reported third-quarter numbers that met analyst forecasts.

Company executives said Wednesday that it expected fourth-quarter profit to come in between 25 cents to 27 cents per share, compared with the 39 cents it reported during the same period in 2007.

For the third quarter, eBay's earnings came in at the low end of Wall Street expectations with revenues of $2.12 billion, up $228 million from the third quarter of 2007. Net profit was $492 million, or 38 cents per share. Analysts predicted that eBay's earnings for the … Read more

Zuckerberg: Facebook is all about growth

Maybe it's advice he heard from a career counselor at Harvard and took to heart: Do what you love, and the money will follow. For now, what Mark Zuckerberg wants most for Facebook is to see it grow and grow and grow some more, without too much fretting over the bottom line.

In an interview with a blogger for the German newspaper Frankfurter Allgemeine Zeitung, Facebook's co-founder and CEO minced no words on the matter: "Growth is primary, revenue is secondary."

Of course, it could be less a philosophical matter than a practical one for a … Read more

The key to making money: Charge for your product

I loved this presentation by David Heinemeier Hansson of 37Signals. His topic? How to make money as an online software company.

His verdict? Charge for your product, but be careful whom you charge.

Chris Anderson elaborates on this theme:

37Signal's secret is not to target consumers (who don't like to pay) or big companies (that's a crowded space). Instead, they target the "Fortune 5 Million"--small companies with specific needs that are underserved...

It's interesting how closely some of Heinemeier Hansson's ideas map to the commercial open-source world, in which charging for one'… Read more

Between a rock and YouTube, video execs see promise

SAN FRANCISCO--If the $1 billion Web video advertising market is to reach the level of television's estimated $50 billion, it ironically won't be thanks to YouTube, the Internet's most popular spot for watching clips.

That's at least the read from Internet video executives here Thursday at the RBC Capital conference. Executives from popular video search and ad companies said that so-called user-generated videos like those on YouTube aren't drawing any significant dollars from advertisers or agencies. Advertisers need to control their brand, and it's seen as too risky to give up that control on … Read more

Sony sees big slump in income

The spring quarter was not a good one for Sony.

The consumer electronics giant on Tuesday reported that for the three months ended June 30, its net income was 35 billion yen ($330 million), or just more than half of the 66.5 billion recorded in the same period a year earlier.

Revenue for this year's second calendar quarter (the first quarter of Sony's April-to-March fiscal year) was 1.979 trillion yen, a slight gain from last year's 1.977 trillion yen.

There was at least one bright spot amid the gloom. Sony said its game unit … Read more