AirBNB’s First Big Crisis
AirBNB takes a commission for letting strangers pay to sleep in one another’s houses. Anyone who hears about this business model immediately brings up the question of what happens when you rent to, or from, a psycho. (Note that Psycho took place in a standard-issue hotel.) This is a case study in what can go wrong. It’s detailed, and written by someone recovering from a traumatic incident, so the summary: an AirBNB user rented her apartment to someone; he and his friends ransacked it, stole money and family keepsakes, and basically rendered it uninhabitable. A response from AirBNB’s founder notes that they’re creating policies to prevent this, and that the suspect is now in custody.
Any time a company has a vastly cheaper but slightly inferior option to what’s already available, this kind of downside risk presents itself. There isn’t much that AirBNB can do except to respond as they have—given their incredible PR skills, they have the connections to get their response into whatever venue the original story is reported in. One horrible experience out of two million nights booked is by no means a bad record, especially when AirBNB is such a good deal for most travelers.
One notable part of AirBNB’s response: they’re offering hosts insurance. This allows them to essentially create several tiers of service, each of which is a little more hotel-like in terms of cost and experience. Instead of owning the bottom of the market, this puts them on the path to own the bottom of the market and have a shot at all but the top.
Microsoft is Keeping Bing for Strategic Reasons
Redmond Magazine argues that Bing is baked in to most new Microsoft products, and is thus impossible to dispose of. This may be the case: in some sense, Bing’s ostensible losses are a weakness of accounting, if the benefits are diffuse but the costs are measurable.
SEC Questions Groupon’s Accounting
The SEC may delay Groupon’s IPO over their accounting issues. As we have argued, this is overblown: Groupon’s accounting is a big issue because it’s obvious, and it’s obvious because Groupon has explained that they’re reporting additional metrics. Anyone who wants to see Groupon’s GAAP results can find them; they are, in fact, easier to find than the CSOI number that has the SEC up in arms. One of the weaknesses of net profit is that it’s a gameable number: CSOI is harder to game without actually hurting the business. So the SEC may end making Groupon’s accounting less revealing, not more.
Are Mobile Ads Overrated?
Display ad marketer Samir Soriano argues that mobile ads are poorly targeted and a waste of time, comparing them to banner ads circa 1999, and projecting that they’ll improve in the same way that banner ads did. While it’s true that mobile ads have a long way to go, it’s needlessly optimistic to expect such a dramatic improvement: the technology behind modern display ads already exists, and it’s unlikely that the mobile ad market will develop something as dramatically new as retargeting. There’s a strong case for more near-term optimism (the mobile ad market is treading a well-worn path), but more long-term pessimism (display is not native to mobile the way it is to desktops).
HomeAway’s Solid Earnings
In its first earnings report as a public company, HomeAway reported growth in sales and cash flow, and a drop in net profit. Digging into the numbers, they’re continuing to see more revenue per listing and more renewals, so the fundamentals of their business are doing better than a previous Digital Due Diligence report indicated.
The Startup “Alumni” Network
Geekwire reports on a fairly sloppy study of which companies’ ex employees raise the most venture capital for their startups. Predictably, Geekwire (a Seattle-focused site which has put together some excellent, well-researched stories) is able to pick apart the flubbed Seattle-related details in the story. More oddly, this study omits Paypal,whose alumni have founded so many companies there’s a Wikipedia page just to keep track.
The Second Derivative of Hiring is Doing Fine, Too
BetaBeat profiles a few New York technology recruiters, some of whom are doing things the old-fashioned way (“About that sizable network of his, Mr. Carvajal said he built it up over years in the business. “) and some of whom are doing things in a wonkier fashion (“[Recruiter Rob Dennis is] a few months into a plan to map the country’s top technical talent and how they move through the market in real time.”). Secondary players—the lawyers, recruiters, accountants, and underwriters—tend to make money when there’s a big supply/demand mismatch, but it’s entirely possible for the tech industry to enjoy sustained growth without that flowing to many recruiters’ bottom lines. Consider this a bubble indicator.
Solve Media’s Smart New Ad Unit
Have we reached Peak Minutes? Has engagement dropped so low that impressions are the only useable metric? Solve Media doesn’t think so. Their clever CAPTCHA-based ads force content consumers to type in answers related to popular brands. Anecdotally, consumers hate this, but, as always, the segment of the market that expresses strong opinions about ads is generally a segment not worth advertising to in the first place.
ComScore’s New Facebook Report
ComScore has posted a report on where people spend time on Facebook. It’s a strong endorsement of Facebook’s own design decisions: people spend time on the dynamic parts (their news feed, game pages), not on the less dynamic parts (e.g. brand pages). It’s worth noting that this report measures time on site, not monetizable time on site—branded pages may drive far more conversions, though they’re likely to get them by way of the news feed indirectly.
In other Facebook news, Facebook has expanded the social graph to include the unborn. This is great for targeting (“expectant mother” is a very valuable demographic), but it also fits in with Facebook’s plan to be the dominant identity system of the next century. Some people born a year from now will have had a presence on Facebook for months before they had a social security number or birth certificate, and that juts puts more distance between Facebook and the competition.
New SEO Tools Monitor Social Media Activities
SEOMoz has launched a new version of their Open Site Explorer. Most of the changes are quantitative, but they’ve added a way to measure social sharing activity on a page-by-page basis. That’s an acknowledgement that social media is a major part of search engine optimization, and makes it that much easier for marketers to game that part of the algorithm. “+1s for sale” notwithstanding, gaming social media is far less scalable than gaming the link graph, so this is still likely to raise the quality of rankable web content.
Are There Best Practices for Giant Sites?
A new Search Engine Watch post goes through a checklist of how to optimize giant sites. It begs the question: does anyone really know how to do this? And if they do, are they talking? The larger a site is, the more conventional best practices break down, and the more likely it is that a webmaster can get direct attention from search engineers at the major search engines. There’s a good chance that among top web properties, no useful ranking information is leaking out. This is a self-correcting problem: once a site is too big for conventional wisdom, they can work directly with the search engines. But it implies that search results for top sites are, and will remain, a black box.
A Fun Case Study in Text-Based Twitter Targeting
Researchers have created a list of phrases that predict gender and political orientation in Twitter. It’s a pretty amusing bunch: Democrats are vastly more likely to say “My upscale…” or “My Tofurkey…” while Republicans are more likely to mention their “Weapons” or “Walmart.” But it’s evidence that ad targeting on Twitter will work well based on text, even if users don’t explicitly express their interests.