For a Start-Up, Visions of Profit in Podcasting

(Readers’ Note: I wanted to provide you with this interesting, biographical sketch by The New York Times’ technology writer John Markoff on a new San Francisco-based “podcasting” company called Odeo. It was started by Audioblogger founder Noah Glass and Blogger co-creator Evan Williams. Normally, I do not make a habit of reprinting copyrighted news pieces; however, in certain circumstances, where I can not adequately paraphrase a well-read piece, I will do so and will only do so when the news organization maintains a registration-required “walled garden” of content. No infringement is intended and I have gone above and beyond in ensuring The New York Times maintains full credit and copyright ownership.)

February 25th, 2005

For a Start-Up, Visions of Profit in Podcasting (The New York Times)

By JOHN MARKOFF
The New York Times

SAN FRANCISCO, Feb. 24 - The primarily amateur Internet audio medium known as podcasting will take a small, hopeful step on Friday toward becoming the commercial Web’s next big thing.

That step is planned by Odeo, a five-person start-up that is based in a walk-up apartment in this city’s Mission District and was co-founded by a Google alumnus. The company plans to introduce a Web-based system that is aimed at making a business of podcasting - the process of creating, finding, organizing and listening to digital audio files that range from living-room ramblings to BBC newscasts.

Audio files on the Internet are nothing new, of course. But the recent proliferation of portable iPods and other devices for storing and playing files in the MP3 audio format has created a mobile audience in this country - more than 11 million and growing - on whom podcasters are counting to listen to much more than downloaded songs and the occasional audio book.

The question for Odeo, and for the many other entrepreneurial efforts almost certain to come, is whether there is any money to be made from podcasting. Recall that the dot-com boom was full of start-ups betting on one or another notion of the Web’s potential. But for every felicitous pairing like Google and keyword searching, there were dozens of broken marriages like Pets.com and online dogfood sales.

In podcasting, there are already a number of small commercial efforts to create audio programs especially for listening to as mobile downloads. And there are both hardware and software systems that make it possible to convert over-the-air and Internet radio broadcasts for mobile storage and listening on MP3 players. One recent example is Radio Shark, a small device that sells for $70 and enables users of Macintosh computers to automatically record over-the-air radio programs and convert them to MP3 files for later, on-the-go playback.

The enterprising Web logger Adam Curry, a former MTV host, has created a podcast show called Daily Source Code, in which he plays music and chats about whatever is on his mind. The show, free so far, has several thousand daily listeners, he says.

Last week, Audible.com, which in 1994 pioneered the idea of using the Internet to download audio books and other audio material to personal computers, said that it would soon join the podcasting movement. The company, whose business currently includes distributing popular radio programs like “Car Talk” on a subscription basis over the Internet, now says it intends to make its software and distribution system available to people who want to produce their own podcasts.

“When I started Audible and we started signing up radio partners, people would ask me, ‘where does your technology leave radio?,’ ” said Donald Katz, Audible’s chairman. “Now it’s clear that the creative capacity that is out there greatly outstrips the capacity of the radio pipeline.”

But he also warned that podcasting has become the Internet buzzword of the moment and so is at risk of being overhyped. “Podcasting is drafting on the magic surrounding the word iPod,” he said.

Compared with the other various approaches so far, Odeo (pronounced OH-dee-oh) means to be podcast central - an all-in-one system that makes it possible for someone with no more equipment than a telephone to produce podcasts and also makes it possible for users to assemble custom playlists of audio files and copy them directly onto MP3 audio players.

The company plans to make money by selling audio content and advertising and, eventually, software for producing and editing podcasts.

Odeo, which is scheduled to make its formal debut on Friday at the Technology, Entertainment & Design Conference in Monterey, Calif., was founded by Noah Glass and Evan Williams, two pioneers of the Web logging, or blogging, movement.

Mr. Williams, who is 32, helped found a maker of Web logging software, Pyra Labs, which he sold to Google in 2003 for an undisclosed amount of stock, and then stayed at the company until last October. He predicts that podcasting will repeat the steep growth curve of the text blogging phenomenon - which went from only a few thousand blogs when he entered the field in 1999 to more than 7.3 million today.

He bases his forecast on the rapid proliferation of iPods and other handheld MP3 devices that are capable of playing digital audio files containing news, music and talk radio, as well as an increasingly diverse array of amateur productions that are more difficult to categorize.

The number of MP3 players in the United States is expected to grow from 11.3 million last year to more than 45 million in 2008, according to Jupiter Research. And as more of those devices have wireless communications capabilities, the ability for users to download material from the Web from wherever they are promises to expand the variety of potential podcast offerings - possibly including text-to-speech software for listening to written material plucked from the Web.

Odeo plans to base its business on the premise that the explosion of digital audio content has created the need for a central place to find relevant material and that there will also be a need for a market to buy and sell “premium” content in much the style of the eBay online marketplace.

Odeo, noting that advertising is already an accepted component of conventional radio, also plans to embed automatically generated audio ads within the downloadable files. And because the files are specifically chosen by the consumer, the company is also hoping that consumers and advertisers might find one another as readily as through the keyword Web search advertisements that are at the heart of Google’s and Yahoo’s businesses.

“These media advertising paradigms have thrived for a long time,” said Mr. Glass, 35, who previously founded a small company, Listen Lab, that provided a service called Audioblogger for posting audio snippets from a telephone directly to Web logs.

Mr. Williams and Mr. Glass became friends several years ago when they lived in adjacent apartments in San Francisco, after Mr. Glass noticed that his neighbor was constantly sitting in front of his computer while wearing a Blogger T-shirt.

When they started Odeo late last year, they folded in Listen Lab and have incorporated the Audioblogger services into Odeo’s offering.

While still too much in its infancy to be considered an immediate threat to the radio industry, podcasting does present the prospect of a growing army of iPod-toting commuters who take programming decisions out of the hands of broadcasters and customize their own listening.

Odeo’s founders say they believe that, as with other old and new media, conventional radio and podcasting can coexist in the long term. If, through podcasting, conventional radio programs are increasingly stored and played back on the listener’s schedule, rather than the broadcaster’s, then the trend could have the same time-shifting impact that TiVo-style video recorders have had on the viewing habits of television audiences.

But Mr. Williams said that the real promise of podcasting might lie not in what it means for conventional radio but in the new forms of expression the medium will permit. “We’re going to let people do what they do,” he said, “and we’ll see what they do and hope they do it a lot.”

—

Copyright (c) 2005 The New York Times Company. All rights reserved. Reprinted without permission for the benefit of this blog’s readership without having to register with the New York Times Online Web site to access the “walled garden”. No infringement intended, really — as reciprocol links have been provided to both the company and article Web pages.

ChoicePoint screws up

Personal information and data warehouser ChoicePoint was forced to admit, red-faced, that it screwed up with some of its “due diligence” practices when credentialing customers in its small business segment. At the heart of the information it disclosed in a shocking, and quite embarrassing, company statement, organized criminals, who include a Nigerian citizen that plead no contest in California state court in connection with the elaborate fraud and was subsequently sentenced to sixteen months in prison, that had previously stolen identities of U.S. citizens formed corporations using the stolen names, presumably either as principles or officers of the companies. Using these newly-formed companies, which masqueraded as payday loan and cheque cashing outlets as well as debt collection agencies, it applied to become small business customers of ChoicePoint to gain access to ChoicePoint’s massive collection of consumer data and personal information, including U.S. Social Security/state drivers’ license numbers, credit reports, and public record information such as court records, bankruptcies, liens, property titles, and other professional licenses. ChoicePoint said that because the companies operated by criminal fraudsters used the stolen names of good standing U.S. citizens, they were able to get by ChoicePoint’s “stringent” customer credentialing processes, such as bypassing its criminal record and background checks of its customers’ senior employees.

ChoicePoint says that it believes files on up to 145,000 U.S. consumers in 50 states and three territories (Guam, Puerto Rico, and the U.S. Virgin Islands) may be potentially compromised and some 750 people were victims of some form of identity theft and fraud based on, at least some of, the compromised information. It’s sent out detailed notices to those nearly 145,000 people and also said it will pay for one-year of free credit monitoring with the credit reporting agencies, Equifax, Experian, and TransUnion. It’s also advised everyone, not just those consumers affected, to regularly check their credit report with one of the aforementioned agencies and if, when reviewing their report, people find discrepancies it, such as credit applications the consumer did not request, to notify the credit reporting agency immediately to begin the process of correcting the report and also to place a fraud alert on the account. (Fraud alerts are a good tool to have in the shed in terms of preventing, or at least monitoring for, identity theft as they require the agency to call you to confirm businesses’ requests for copies of your credit file when applications for credit are made with such businesses. Plus, when you place a fraud alert with any one of the three agencies, it’s automatically forwarded to the other two. To learn more about such a process, visit ChoicePoint’s special Web page they have set up.)

Such advice is good advice, but it provides little consolation to those who have had their identity stolen and used for nefarious purposes as a result of such disclosure. Moreover, it raises some ethical questions. Should personal information and data warehousing suppliers, such as ChoicePoint, continue to operate virtually unregulated? And, as a supplementary to that question, should the U.S. Federal Trade Commission draft and adopt tough government regulations on the collection and dissemination of consumers’ personal information and credit files? Why do U.S. Social Security numbers (and Canadian Social Insurance numbers, for that matter) need to be included on credit reports and in the massive datastream of companies like ChoicePoint?

There’s no doubt we need credit reporting agencies and data collection companies, as they serve to provide issuers of credit, like banks, private-label credit card organizations, retailers, and others, a sort of guarantee that a person is likely going to be able to pay off their debt and in a manner consistent with the agreement between the lender and borrower. However, absolutely no useful purpose is served by providing U.S. SS/Canadian SI numbers to such corporations. Sure, these companies will argue that they require these numbers as they provide a unique identifier for each person, to properly sort the data into customer profiles. However, this is a red herring and a fallacy. Companies can simply sort customer profiles in the order of “Last Name, First Name, Middle Initial”.

Our government identification numbers are uniquely personal to us. They are who we are, what we’re about, and contain records of our earned income right from the first high school job to retirement pension, taxes paid, and other things of the sort. No individual, and no companies, need these numbers.

Footnote: It is worth noting that in the above referenced company statement, ChoicePoint was quick to point out that the incident was not caused by computer “hacking” and that it is working to make its so-called “due diligence” processes in signing up new customers of its small business product segment much stricter. It will now mask, or at least truncate, personally-sensitive information like drivers’ licenses and U.S. Social Security numbers. However, it stopped short of giving out this information entirely — governments and publicly-traded companies, or small businesses sponsored by publicly-traded companies, can access these numbers. It’s true that governments and large Nasdaq, NYSE, and TSX listed companies have strict privacy policies and employee codes of conduct, but by still allowing all publicly-traded companies access to these numbers, it raises the necessary question of, is that good enough? Many companies trade on the far less regulated over-the-counter boards, such as Pink Sheets, and could just as easily operate as nefariously as organized crime running closely-held companies. While it’s a start, it does nothing to address the fact that companies should not be collecting these numbers at all. It’s completely unnecessary.

Bomb-A-Tron™, anyone?

Bomb-A-Tron

It’s so true, and in fact, that site really encompasses why I don’t read the latest wire copies of bombings in Iraq. It’s the same, repetitive, uncreative copy-and-paste wording. Copy editors … the new journalists!

(For those curious, here’s my Bomb-A-Thon™ generated wire copy.)

Car Bomb Attack in Baquba kills 3

By Doug Mehus

Associated Press

Saturday, January 29, 2005; 10:34 PM

In Baquba today, explosives packed in a car detonated at a police checkpoint, killing 3 police officers and injuring 15, witnesses said.

US troops and tanks sealed off the area, which was strewn with parts of flaming wreckage and human remains.

The driver of the Toyota Land Cruiser slammed his bomb-laden car into a pickup truck that was used to block the gate leading to the police checkpoint and detonated the load of explosives, said policeman Mustafa Ibrahim.

The blast was extremely powerful, hurling the body of one of the police officers more than 75 yards, witnesses said.

“I heard the explosion, and it shattered glass everywhere,” said Faruz, a 26-year-old baker. “I saw cars burned and destroyed, fire, and body parts all over.”

U.S. officials called the attack a sign of the insurgents’ desperation.

“The fact of the matter is we’re keeping the insurgents off balance and they’re reeling backward. They’re trying to come at us and we’re giving it right back,” Brigadier General Taylor Truitt said.

“The terrorists are growing more desperate in their attempts to deprive the world of a free and peaceful Iraq and they’re trying to put it all on the line and give it all they can.”

There was no claim of responsibility for the latest Baquba attack, but it followed warnings blared from mosque speakers that Iraqis should stay away from police installations.

A little political humour: The President, First Lady, and Dick Cheney…

The President, the First Lady and Dick Cheney are flying on Air Force One.

George looks at Laura, chuckles and says, “You know, I could throw a $1,000.00 bill out the window right now and make somebody very happy.”

Laura shrugs her shoulders and says, “Well, I could throw ten $100.00 bills out the window and make 10 people very happy.”

Cheney says, “Of course then I could throw one hundred $10.00 bills out the window and make 100 people very happy.”

The pilot, who overhears their conversation, rolls his eyes and says to his co-pilot, “Such big shots back there! Hell, I could throw all three of them out the window and make 56 million people very happy.”

Martha Stewart closing online store, catalog operations

Martha Stewart closing online store, catalog operations: “Martha Stewart Living Omnimedia is closing its money-losing online and catalog businesses in February, according to a notice posted on the company’s Web site.”

Wow, although not entirely unexpected. After Ms. Stewart’s unjust and heavy-handed conviction for lying to investigators about a stock sale of ImClone Systems, Inc., even though she was never charged with insider trading and charges of the more serious securities fraud were thrown out by the judge, many analysts had predicted her company, Martha Stewart Living Omnimedia, Inc., would fold completely. I was more optimistic — and remain so. I believe they are simply closing unprofitable, money-losing divisions, including its marthastewart.com online store and its Martha By Mail mail-order catalog service. And, so they should. It’s a smart move. They’re still keeping the marthasflowers.com online flower ordering service, Martha Stewart Living glossy magazine, the lucrative retail relationships with Kmart and Sears Canada, and their TV production business.

It’s also worth mentioning that former ABC Entertainment President Susan Lyne was named President & CEO of MSO late last year, approximately eight months after ABC parent Walt Disney Company unceremoniously fired her, along with ABC Chair & CEO Lloyd Braun in the spring. Together, the Lyne and Braun pairing also spearheaded the development of now mega-hits “Desperate Housewives” and “Lost” but the executives at the Mouse House apparently had itchy fingers and couldn’t wait until the fall. For his part, Lloyd Braun was rewarded when Internet giant Yahoo! Inc. hired him as its Head of its Media & Entertainment corporate division. He oversees such properties as Yahoo! Games, Yahoo! Finance, Yahoo! Launch, Yahoo! News, and presumably, Yahoo!’s Musicmatch, Inc., subsidiary.

Trans Canada Credit becomes Wells Fargo Financial Canada

Wells Fargo Brand Expanding in Canada: “Trans Canada Credit Corporation, the consumer finance business that has served Canadians for more than 60 years, announced today it has changed its name effective Jan. 1 to Wells Fargo Financial Corporation Canada. The company remains a Canadian-based and Canadian-managed business, with headquarters in Mississauga.”

That is according to the news release issued January 4th, 2005, by parent company Wells Fargo & Company, the legendary banking brand that is deep rooted in American history and culture with its brand going back to 1852. According to the release, Wells Fargo Financial acquired Trans Canada Credit in November 1992 and operated it under that name until today. So essentially, Wells Fargo Financial Canada is a subsidiary of Wells Fargo Financial, the wholly-owned personal and commercial lending and financing arm of the publicly-traded Wells Fargo & Co. (NYSE: WFC).

Interesting stuff.

Thoughts on Honey, we shrunk the Google

Google Blog: Honey, we shrunk the Google

So, Web portal operator Google launched its newest product, the Google Mini, which indexes and sifts through up to 50,000 files, to complement its Google Search Appliance, which searches 100,000 or more documents in a corporate intranet environment. Google says it aims to target small and medium businesses with cash-starved budgets by selling the Google Mini at only $4,995. Although, personally speaking, I feel that $5,000 is still a huge price (even though the Google Search Appliance sells for $30,000 or more) for a small company to spend on a piece of intranet hardware for finding documents. Google is really targeting medium-sized businesses with this offering.

Google Mini Product Manager Rajen Sheth says, in the posting on the Google Blog linked above, that: “Customers are happier (and more likely to buy something) when they can quickly find the right information on a website. Employees are more productive when they actually find what they need on their networks.” That’s very true and medium- and large-sized businesses will be well-served by a search appliance such as the Google Mini or GSA. However, Google’s share of the enterprise search market is miniscule, with less than 1% of Google’s multi-billion dollar annual revenues (about $50 million) attributed to sales of its search appliance for corporations and universities. Does it really stand a chance at catching Fast Search and Transfer and Verity, the number two and one ranked players in enterprise search, in this market?

Six Apart buys LiveJournal and its parent, Danga Interactive

Six Apart, TypePad Buy Danga Interactive: “San Francisco-based Six Apart, developer of the popular Movable Type software and a blogging service called TypePad, is buying Portland, Ore.-based Danga Interactive Inc., which operates LiveJournal, a youthful blogging community.”

That’s what Associated Press business and technology writer Michael Liedtke writes in his latest article for the world’s largest wire news service. The news began percolating in the blogosphere even before the biggest news in the blogging world since Google bought Blogger was announced. Brad Fitzpatrick, the founder, president, and CEO of Danga Interactive, Inc., wrote that not all that much is changing, LiveJournal will remain forever, a scalable implementation of TrackBack will be implemented into the LiveJournal code base, and because Six Apart is known for prettiness, new themes (or layouts) will be coming to LiveJournal. Fitzpatrick goes on to write, in response to a question, “Why is Danga selling LiveJournal?”

“I love technology and designing the LiveJournal architecture but I hate running a business. While I’ve been learning a lot of business stuff over the past 5 years and it’s been kinda interesting, I just don’t love it and I’m not great at it. Plus it just keeps getting harder as LiveJournal grows, sucking away more of my time and youth. I’m ready to pass off what I see as “the boring stuff” to somebody else that I trust and focus on the fun stuff.

“Also, Six Apart has a lot of staff that we don’t… marketing, designers, usability people, etc. It’s been frustrating the past few years knowing that in a number of ways LiveJournal is technically the best but because we weren’t the prettiest and didn’t give good quote, we were often overlooked. I want that to change … we’ll continue to focus on technology and they’ll help us make our stuff pretty and usable. They want LiveJournal to stay LiveJournal and that’s why I picked Six Apart.”

What will change, for starters, is the Terms of Service and Privacy Policy will be made to agree with what Six Apart lawyers want. He also said that the LiveJournal technology will remain separate and continue to be developed, which isn’t a good idea in my opinion. While LiveJournal has more features and is much more scalable, it lacks good features like true permalinks, true trackbacks, and superior comment/post editing capabilities. I wish they’d create a modified installation of MovableType and use it on LiveJournal as a sort of technology experiment to promote its paid and professionally-supported versions.

When asked if LiveJournal would remain open source, Fitzpatrick hedged and said infrastructure components such as “memcached” and “BML” would as will the existing LiveJournal code base. He made no committment that future versions of LiveJournal would be open source.

I think it’s primarily a good move for both companies. Six Apart needed a free social networking, community-building, and blogging product which it could use to promote its subscription-based and professional offerings — even if LiveJournal is an entirely different architecture and platform. It still allows for some cross-branding and marketing opportunities, akin to that of discount ISP operator United Online, Inc., which owns NetZero, Juno, and BlueLight Internet, buying Renton, Wash.-based Classmates.com, Inc. in December and Orem, Utah-based About Web Services, which owns popular free Web hosting sites FreeServers and 50megs among other properties, in April of last year. United Online has used those buys for placing prominent NetZero and United Online branding on their respecting home pages. I predict that’s (part of) how Six Apart plans to use LiveJournal.

Pitfalls of Geotargeting

Articles from advertising industry online trade publications like ClickZ Network describe the benefits of geotargeting, that is targeting ads to user based on their location. To do this, the geolocation technology, as it’s called frequently by those in the business, primarily uses the user’s IP address, looks up the country of the IP address in a central database, and then serves ads targeted by location. Thus, you get the term “geotargeting”.

Well, as you can clearly see by the image above, when you have a country like Canada with two official languages, geotargeting doesn’t work so well. The geolocation technology at DoubleClick, who served that ad, must’ve thought it was genius serving a French language ad on an English language Web site because French people live in Canada. There is the problem. French people primarily live in the provinces of Quebec and New Brunswick. Since IP address location is determined by the Internet service provider to which it was allocated, and since most ISPs in Canada operate nationally, there is no way of (easily) targeting an ad to a specific province in Canada so you end up with funny incongruities such as this.

GuruNet, Huron Consulting complete IPOs

Online reference library provider GuruNet Corporation completed a moderatly successful initial public offering, now trading on the American Stock Exchange under the symbol “GRU”. Those wanting to peruse the press release can do so here. It opened slightly above its offering price of $5.00 per share, at $5.19.

Elsewhere, Huron Consulting Group Inc. completed an IPO on the Nasdaq under the symbol “HURN”. Huron was formed by former Arthur Andersen partners and management, in conjunction with private equity investors such as Lake Capital Partners and Lake Capital Management, who felt that a financial and corporate consulting company should be separate from a public company accounting firm. Hrm, sounds a little bit like Accenture, which was formerly known as Andersen Consulting and spun-off in an IPO from Arthur Andersen, or BearingPoint, which used to be KPMG Consulting and later spun-off. Shares of Huron priced at the high end of its range at $15, opened at $18.50, and now trade at $19.50. Wow.

Also on deck in the IPO market: DreamWorks Animation SKG, contextually-targeted advertising specialist Interchange (owner of the ePilot Advertising Network), and Shopping.com have all set the price range and terms of their offerings. They’re expected to debut in the next week or two.