Flight to, er, No Returns?

When I took the job at TechTicker, I had no idea a massive credit and banking crisis would become the dominant story of the markets. As I wrote before, it makes me feel a tad irrelevant as someone who focuses on tech companies and startup culture. But the plus is it's forced me to stay very engaged in the news flow of this crisis, and re-engage with my finance reporter roots.

Fun fact: I actually started my career covering finance. The reason I don't have a Southern accent? I used to get mocked when I called Wall Street and said things like, "What do y'all think about this market?" Good times.

Anyway, during the last downturn I talked to experts over and over again who talked about a flight to quality-- ie focusing tech holdings on the big, safe tech names-- as the way to survive the turbulence. Similarly, I have CNBC on in the green room all day and all I hear is that same advice. OK, so let's see how you did if you took it: According to this chart you would have lost money on nearly every name.

Now, I KNOW, people will say ten years isn't long-term enough. Tell that to someone who was ten years away from retirement in 1999, first of all. Also, that should be considered long-term in technology, shouldn't it? It reminds me of something Peter Thiel once told me that flicks to the cultural difference between Silicon Valley and Wall Street: A bet on, say, Microsoft isn't actually a technology play. Because Microsoft wants things to stay the same. It's actually a vote against innovation.

What if instead of keeping the bet on Yahoo ten years ago as the experts told you to, you bought Google at the IPO? Or instead of SAP, you went with Salesforce? Young risky companies, yes. But, per Peter's point, it seems that's a wiser bet if you're a believer in the fundamentals of tech, because the fundamentals of tech involve change and disruption. Very few companies can stay on top of multiple market and technological shifts. Investors should think long and hard about that conventional wisdom this time around.

Team TechTicker on Google's Chrome

Google's new browser is all anyone in techdom can talk about or think about today. (Except yours truly who's swamped with other stuff.) Here's a link to Walt Mossberg's Tech-Ticker write-up. He'll be on the show tomorrow to discuss.

Plus, Henry and Aaron talk about it in the video below. [Avid fans will note our new Scottrade sponsorship. Go team Yahoo Finance!]

My only side note amid the flood of coverage from every angle: Om had a nice write up on why Firefox isn't worried. I'd add to that that open source and Firefox die hards should actually be happy about this. Why? Two reasons: 1. There's been ongoing speculation that Google would buy Firefox at some point, given the cozy ad relationship of the two. Firefox has been outspoken that this wouldn't happen (see my video earlier this year with John Lilly below) and this move cements the idea that the two aren't eventually going to be one. Which leads us to reason no. 2: Google isn't doing this for the good of the Internet, it's doing it for its business and quest to discover another big revenue stream outside of paid search, ie, its ongoing war with everyone's no. 1 competitor, Microsoft.

That doesn't make Google bad in any way-- that makes them a good public company in fact. But if you believe in the mission of Firefox, Google risks becoming just another entrenched monopolist on the Web, making Firefox no less relevant, but hopefully lighting a fire under everyone to do better and innovate more.

[Warning: In the above interview, Henry goes insane at the end. Why Google's move suddenly means Mozilla should go public is beyond me! I think it's just the opposite! Its do-good, non-for-profit-ish strategy is now even more of a differentiator! Can you imagine how the stock would be selling off today if Mozilla were a public company? Those Wall Street guys and their one-track IPO minds!!]

When to Tell Your Wife You're Taking her Company Down (aka More from Cuil's Founders)

Two more segments of my interview with the controversial startup. The first is their take on the search landscape and why there was and is such a big hole. As a journalist, what I love about this clip is how bullish they remain on their technology as the only real alternative to Google. I expect some people admire it, and it do drive haters into even more of an angry rage. Also: Tom's explains why the launch was a success.

The second clip is Anna Patterson's story -- why she left Google and why she had mixed feelings about it. Anyone who's faced that decision to stay in a cushy job or risk it all on something new will relate to what she says. I also found the dynamic as husband and wife and co-founders fascinating. Tom Costello actually hid from his wife that he was working on a search engine -- showing VCs the idea before her-- and once she saw it she almost felt she had to quit. (Despite some concerns it would work outside of a math equation) First two segments here.

Cuil Speaks

Below are the first two clips from my exclusive post-launch sit down with Cuil founders Tom Costello and Anna Patterson. Also, it's exhibit A of why I have grown to love video as a reporter. Anna and Tom not only give an honest and direct answers to the questions surrounding their launch and the value of their search engine, but you see them as real human beings who are utterly resilient in the fire storm, but clearly there's also some hurt there.

Part of the problem with the blogosphere is a certain lack of humanity-- particularly amid anonymous commenters. To read the blogs, Cuil's founders went from geniuses to the anti-Christ. They become, at best, symbols for things, two-dimensional representations of entrepreneurs. But to see them on camera shows you them. You may not like them, and may hate their service, but at least you react to them as a people and not a printed headline on a screen. We've got five segments of the interview running today and I'll post the last three when they become live. Enjoy!

Net Neutrality Finally Getting Non-Valley Attention

I've done about 60 radio interviews in the last few months, and increasingly when it's a call-in show I get a question about Net Neutrality-- a topic deemed utterly wonky and boring just a year ago that is starting to get national, consumer attention. Chris Sacca's eyes lit up when I told him that. "Isn't it cool people are talking about it?" he said, like a kid on Christmas morning.

The Ex-Googler (or Xoogler as they're called here in the Valley...yeah, I know) has turned jet-setting, iron man-running gadfly crossed with budding angel investor. He's also got some other top secret stuff going on that he won't fill me in on. But through all of those roles, Net Neutrality has been a big issue for him. So I asked him to come by Tech Ticker HQ to fill us in on the issue. These clips are probably "Yeah, duh!" for most of my astute techie readers, but if you're one of those people who hears the words thrown around and feel dumb asking exactly what it means, take a look. Enjoy!

(BTW- apologies for a less than articulate day for me yesterday. :( Fortunately Sacca was on.)

In Case You Aren't on Twitter....

...Gmail is down and all hell has broken loose in the Valley. Here's a visual representation:

For something more scientific, read all this. Hopefully the angst won't take Twitter down too!

Hey, You, Get Off Of My Cloud!

This is yet another guest post by my super popular contributor and Twitter friend, Paisano. This time I asked him to do a think piece on that over-used buzz word of tech buzzwords, THE CLOUD! Enjoy!

The rumblings you hear overhead isn't thunder but everyone scrambling to setup shop in the cloud these days. The consensus is that we want to run and store all of our stuff in one centralized location online, not in several different local destinations which is a headache and time consuming. Let's focus on the cloud computing strategies for three of the biggest angels on the web these days: Yahoo, Microsoft and Google.

Cool

It's actually hard to pronounce Cuil as "cool" once you've seen it written. I was so busy trying not to visualize the spelling I had to do the intro to this video about 45 times, but hey, at least it made Aaron and the guys in the control room laugh! Bill O'Reilly I feel your pain!

Needless to say, I'm not a fan of the name, but I hope the new search engine can live up to some of the hype. As I say in the video below, I've been hearing about this company for a while from people I really respect and trust, so I was a bit bummed that the site was down so much today. Also, in my informal tests there were nowhere near the quality of results that are on Google. Although this seems to change moment to moment. I searched "Sarah Lacy" and it gave me zero results versus nearly 400,000 on Google. For a moment I was elated! No record of the tumultuous ups and downs of my Internet life? I searched again and got 77,000. And none of the first few pages had links to my blog or any of the hundreds of things I've actually written. That's pretty sub-par search for something so hyped.

Still, I trust my sources on this one. I plan to continue to give Cuil a chance. For one thing, I like the UI and I love the privacy policies. If they can come close to Google results, they'll build a solid fan base with those features alone. They may never really threaten Google, but it's great to continue to see innovation in this space. Search is so important to our everyday lives and not even Google does it perfectly.

Ad Innovation Check In

When did I start using Innovation non-ironically? Wow. I've been a business reporter too long.

At any rate...per my earlier post 2008 is the year for ad innovation in the Web world, and I'd argue that's harder than product innovation. Why? Product innovation is fun, first off. By its very nature you are working to give people something that will delight them. It's a time when anything is possible and you are your users are totally on the same side. But when it comes to finding new, clever and affective ways to deliver ads over the Web you're inherently at odds with a user that doesn't want to be interrupted, tricked or otherwise profited from. With Web 2.0, community-based sites this is typically where the whole mob uprising thing comes in. (See ch. 5 of my book, or even just the chapter title: "The Mob Giveth and the Mob Taketh Away.")

It also can require a different skill set: Is a product innovator always a good business innovator?

That's a big reason YouTube sold to Google. Amid the iPhone hype yesterday, a lot of people missed a story in AdAge about Eric Schmidt's latest YouTube advertising idea. First off, even Google-- the king of online business model innovation or at least execution-- has not been able to crack the YouTube nut. As the story says, video views swelled to an insane 4 billion in March, even as revenues were just $90 million, according to Bear Stearns. That's a pretty big disconnect. Schmidt has said it's priority no. 1 for Google this year and rightly so. As has been documented extensively by every analyst and business reporter on the planet, Google needs a second act because it can only gain so much more market share in search and on Wall Street it's all about obscene growth. (In the years Oracle-- and a good many other business software companies-- were in Wall Street's dog house they were still indecently profitable.)

The new plan basically lets content makers sell ads on their own video "channels." It's a page out of Ning's playbook-- currently the wiliest business model in Web 2.0 IMHO. Ning from day one told users trey could pay a monthly fee for your own social network, sell your own ads or have them sell ads on your page. No free lunch, means not having to come back and charge for lunch later.

I think it's one of the smarter strategies for YouTube so far.

Ooooooh! Maybe Valley Innovation Is about to Restart...

As a Valley-based business reporter I get chills (the good kind) when I read Jim Cramer -- or another of his pretending-to-get-tech Wall Street peers-- say something like this. Because as soon as people say innovation is dead in the Valley, it seems to slowly restart. Among other bon mots, Cramer told an audience at New York's "Hey! Us too!" Internet Week that there was more innovation going on in the Rust Belt than Silicon Valley.

I've been outspoken that there's not a lot of great Web innovation going on right now, but Cramer's statement is a stretch even for me. You know what Cramer misses? (Other than the under the radar work happening in clean tech, biotech, etc. The Valley is a big place after all.) He's focused on product innovation, which has somewhat stalled in the Valley's Web scene in aggregate. But business model innovation is where the Valley is at as Web companies and others in areas like open source hunt to find ways to turn insane audiences into cash. Memo to Jim: That's what made Google worth $175 billion today. The search engine was hardly a new-fangled application.

What I love about guys like Cramer is they tout they were rabid Google bulls "early on." Early = Once the S-1 was filed and we all saw the kind of numbers Google was putting up. Props to them for knowing the stock was worth more than $85 a share. But that's not the same thing as spotting "innovation," Wall Street. Just wondering how often Cramer actually comes out here....because I seem to see him on the Mad Money set just about everyday...or goes to the Rust Belt for that matter...

All snarking aside, I don't usually bash Cramer, because I think he's an amazing showman and knows the public markets better than I do. And I have a total appreciation for the rigors of being on camera everyday. But don't try to play the startup game, pal.

Oh! My favorite part: Cramer says TheStreet.com is one of those lone well positioned Web properties. Because so many young people are flocking there. Yeah, that one doesn't even need a snarky graph.