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).
continue reading the Snap.com raises $10M in VC Funding, led by Mayfield
Posted by barney on July 20, 2005 at 9:18 pm | No Comments
July 1, 2005
Travel Search at VerticalLeap
Travel Search
At Vertical Leap Vertical Search Event
Tag: verticalleap
moderator: Niki Scevak, Jupiter Research
panelists:
- Phil Carpenter, SideStep
- Beatrice Tarka, Mobissimo
- Scott Jampol, Yahoo Travel / FareChase
- Vajid Jafri, Cfares
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.
continue reading the Travel Search at VerticalLeap
Posted by barney on July 1, 2005 at 1:58 pm | No Comments
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.