November 4, 2006

Amazon Web Services and Powerset in Business Week article

Jeff Bezos Cover of Business Week

Rob Hof at Business Week just came out with an article called Jeff Bezos's Risky Bet. The article talks about Amazon's Web Services initiative, in which Amazon is enabling other companies to take advantage of the massive technology infrastructure Amazon has developed to power its own operations:

Amazon has spent 12 years and $2 billion perfecting many of the pieces behind its online store. By most accounts, those operations are now among the biggest and most reliable in the world. "All the kinds of things you need to build great Web-scale applications are already in the guts of Amazon," says Bezos. "The only difference is, we're now exposing the guts, making [them] available to others."

This article was the first to announce that Powerset is one of the major early customers for Amazon's new Electric Compute Cloud (EC2) Web service. Here are the relevant paragraphs, which mention Powerset and some of our key angel investors:

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September 30, 2005

Google Prediction Markets

Patri Friedman, a google engineer who works on evaluating search quality, posted about the surprising accuracy of Google's Internal Prediction Market.

I've written a post about the previous prediction markets workshop at SuperNova2005, which gave some background on the topic from pioneers and leaders in the field.

I am excited to see Google developing and using prediction markets internally. It just points to what, in my mind, is one of the best things about Google: they really think about collective intelligence (CI), in the sense envisioned by Doug Englebart -- how to ensure that the many within an organization or community can process information and make decisions that benefit from scale, rather than get hurt by it.

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July 20, 2005

Snap.com raises $10M in VC Funding, led by Mayfield

Mayfield and Snap announced this week that Mayfield led a $10M venture capital investment round in Snap.com. I am proud to report that I helped to make this deal happen. My partner at Mayfield, Allen Morgan, will go on the Snap board of directors.

It might seem puzzling why you would invest in a general search company (perhaps as opposed to vertical search companies that might have more specific focus and could be acquired and merged into offerings by the incumbents), in the presence of so many giants. The article about Snap in USA Today suggests that Snap only wins if they can unseat Google. However, I think Snap represents an good investment, without any need that they become the new #1 or #2 general search engine. Below are my thoughts about the general search landscape and some major themes that Snap addresses. (Disclaimer: I am currently an Entrepreur in Residence at Mayfield and have a personal interest in Snap; the thoughts below are my own and should not be taken to represent the thoughts of Mayfield or Snap).

Online advertising is today a massive market that continues to grow rapidly. The U.S. paid search component of this market was $4B in 2004 and is predicted to grow to $6B by '06, with a worldwide paid search market growing to $23B by 2010. The paid search market comprises both search portals (e.g. Google Adwords), where users go specifically to search, and contextual advertising, where users are exposed to ads in the context of viewing publisher's websites (e.g. Google Adsense ads on NYT.com). The contextual advertising market is growing even faster than search portals (a desktop client advertising market is also growing quickly, but represents a much smaller portion of the market).

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July 1, 2005

Travel Search at VerticalLeap

Travel Search At Vertical Leap Vertical Search Event

Tag:

moderator: Niki Scevak, Jupiter Research

panelists:

Here are my raw notes. Further processing to come later.

niki: Recently left to start own venture. Took a deep look into vertical search. Travel and retail form the backbone. Travel has unique trend in that 30 years ago the listings were trapped inside mainframes. The internet webified those systems and brought them online, but kept intact the agency model of listings being centralized, and people transacting with the listing agency.

Post 9/11, airlines going bankrupt spawned discount airlines with closer connection to their customer.

Jafri: Travel is 40% of all ecommerce. Building a search company as believe the next generation of travel companies

Niki: How much is consumer demand in these 3 factors: 1. fragmenting of listings 2. more people buying travel online 3. market spending more money on search engine marketing

Phil: Travel is incredibly fragmented. Messy markets are good when looking at search as you can aggregate it all for consumers. Overwhelming rush of people and demand is good as well. This is the right sector, fusion of search and travel is a good mix. The peanut butter and chocolate combinations that taste great together.

Beatrice: Growing demand for onlie information search. You can just go online and search for tickets. In the past booking through travel agent were expensive systems. Many of those suppliers chose to establish their own channel. In US had 3 independent suppliers, in Europe over 50. Mobissimo caters to those independent suppliers, especially international. In the future, growing globalization of economics means we need search to locate inventory and prices.

Scott: Travel search represents the way some people shop for travel. A large and growing segment want to compare prices and availability, but want more than price comparison, want value comparison. Continue to see it as a blend going forward.

Jafri: $52B in transactions, going to $76B next year. The other two industries that come close are illegal...

The challenge for travel search engines is how to collect all this information. You wouldn't know you could buy a $2000 ticket wholesale for $500. Search is also of great value to suppliers, gives them market info they have historically never received because legacy systems don't capture it. They can use the info to dynamically change the price and increase market share. So we see this as a great opportunity for market to evolve from front ends to legacy systems, to a whole new infrastructure.

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June 25, 2005

Prediction Markets at Supernova 2005/CommerceNet Decentralized Commerce Workshop

Supernova 2005 opened with a day of Workshops. I attended the Decentralized Commerce workshop, organized by my friends at CommerceNet.

The morning session was about Prediction Markets.

Participants:
Robin Hanson (GMU)
Bernardo Huberman (HP)
David Pennock (Yahoo!)
Emile Servan-Schreiber (Newsfutures)
Walter Yuan (Caltech)

Abstract:

Prediction markets provide more reliable forecasts of election results than polls. They can also be used to get improved forecasts on sales levels, project completion dates, or to get more detailed data on consumer preferences than focus groups provide.

We'll discuss how they are being applied in business contexts to incorporate divergent views into business plans.We'll introduce the idea and its history in the first session, then proceed to current examples, tools, and discuss the future of this new approach.

For a useful overview of prediction markets, see the See Time magazine article: "The end of management".

I have been interested in this idea ever Robin Hanson (the founder of the field of prediction markets) and I were summer students in the AI Lab at NASA Ames Research Center, both working under Peter Cheeseman. This was right around the time when Robin wrote his first papers on the topic: "Idea Futures: An idea whose time has come?", and "Could gambling save science?". In order to match the work its NASA funding, Robin created a demonstration of how a set of Mars Rovers could place bets on the presence of scientific interest at different locations on Mars. The result would be the emergence of consensus beliefs that could be more accurate than the knowledge of any individual.

I also remember the time Robin hosted an Murder Mystery evening with a prediction market as an added twist. Like a normal such party, actors would read out each scene. But in Robin's version, the audience members would then place bets on the identity of the murderer by buying options. Based on the market dynamics, a ticket marked "This ticket is worth $1 if Professor Plum was the murderer") might start out having equal value as the other suspect tickets (so that you could be the whole set of them for $1), but then the price would fluctuate as unvents unfolded until the prices ultimately went to $0 for all but the actual murderer. It was really fun, an improvement on the original version.

My raw notes from the session are below.

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June 6, 2005

Shopzilla to be acquired for $525M

According to an article in Reuters today,
the E. W. Scripps Co., which owns newspapers, broadcast and cable TV networks, said it will pay $525 million in cash for 100 percent of Shopzilla, one of the leading pure-play shopping search engines (formerly known as Bizrate).

The article offers this rationale for the deal:

The Internet is shaking up the once-staid and lucrative business of classified advertising. Newspaper publishers that once enjoyed a virtual monopoly on the classified market now face increasing competition from Web sites like eBay.

This comes just days after Ebay agreed to buy Shopping.com. I think the eBay/Shopping.com deal seems to be more strategic, because eBay was already in the business of helping users comparison shop for products. But I do agree that the decline of the newspaper classified advertising business is driving major activity by all the papers. Following on these lines, I expect there will be a string of acquisitions of vertical search engines, particularly those related to classifieds, within the next year. The next one I would predict: Oodle, a classified search engine that aggregates across many sources of classified ads and provides a nice faceted search interface.

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June 2, 2005

eBay acquires Shopping.com for $620M

eBay announced today that they will acquire comparison shopping site Shopping.com for $620M in cash. This is obviously a major development in the online shopping space. It’s Ebay’s biggest purchase since Paypal.

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May 29, 2005

Yahoo's David Filo and Jerry Yang at D3

Kara Swisher and Walt Mossberg interviewed Yahoo!'s David Filo and Jerry Yang in the last session 2005 All Things Digital Conference. David and Jerry reflected on: For me, the most interesting part of the whole discussion concerned the acknowledgement that search is king today, but that tags and personalization are ushering in a new importance for editorial browsing:

David: People start with words, but in the results the directory is there. People have become very comfortable with typing in words.

Jerry: Philosophically, as people want to navigate they may choose to search, choose to browse. As we see more heightened awareness around tags, it brings us closer to a filtered or browse scenario. I think we're just starting to see the back and forth scenarios. Yahoo has that capability. We can do it in a very integrated way. Eventually those two finding metaphors will coexist.

The rest of this blog entry contains my notes.

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May 28, 2005

Barry Diller at D3: Search and Ecommerce, Media and Entertainment

Kara Swisher interviewed Barry Diller on the final day of the 2005 All Things Digital Conference. Barry reflected on trends in Media and Entertainment in a digital world, and provided significant insight into the strategy behind his purchase of Ask Jeeves and the InterActive Corp Ecommerce network. Key items I found interesting: The rest of this blog entry contains my notes.

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February 17, 2005

Merging of ecommerce and social networking

The merging of social networking and ecommerce is heating up...

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