AllPeers Review
Dmitri Popov, one of our private tester also happens to write for NewsForge, the Online Newspaper for Linux and Open-Source. You can find his review of the current private beta version of AllPeers here.
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CPA Does Not Pay The Bills
So Google is introducing Cost-Per-Acquisition (or Action) advertising model and everybody is looking and talking and has an opinion. So do I 
This might be good for Google since it will reduce, if not eliminate, click-fraud. It’s also good for advertisers who will only pay when a sale occurs, just like any standard affiliation scheme. Welcome back to 1999!
But this move is not good for everybody and certainly not for website publishers.
In 2001, when the advertising online industry made the move from cpm (cost per impression) to cpc (cost per click), publishers saw their advertising revenue dramatically drop. With a cpa model, they now have to use space on their site for an ad which will only pay out when someone clicks on the ad (we’re talking less than 1% of visitors here), then falls in love straight away with the product they are being presented with and then jump on their wallet to get their credit card out. This is like a 5 clicks experience before the site owner sees any return.
When was the last time you clicked on an ad and made an impulsive buy? Unless Google tracks the users sent to the cpa advertisers and credits the site owner for future sales when/if the user goes back to that site and purchase the product (maybe with a time limit of 30 days), the revenue for publishers will drop when switching from cpc to cpa.
This, I’m afraid, is bad news for the small to medium size websites. Only sites with an enormous unsold inventory will benefit from it but still, the monetisation per page is ridiculously low.
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Beta Update
Judging from the comments to my last post, it’s probably time to give another update on the status of the AllPeers beta. As we’ve said a few times in the past, the purpose of having a private beta phase is to find problems while maintaining a manageable number of users. This creates a no-win situation to some degree since we can’t get testers unless we ask for people to sign up, but the very nature of a private beta means we don’t want to invite everyone at once. That said, we’re getting great feedback from the 2,000 people who have been invited so far, and we really appreciate that! You’ve helped us to find and fix a number of important issues.
We’re working extremely hard to get the public beta ready, so it’s somewhat vexing to have people come on our blog and accuse us of peddling vaporware. But that’s still far better than releasing something before it is ready for broad consumption. You only get one chance to make a first impression, as they say, and we want to make sure that this impression is a very positive one. AllPeers is a very powerful product, more so than most people perhaps realize (we have about 200,000 lines of source code in C++ and JavaScript), and it’s perfectly normal for it to take 2-3 months to go from private to public beta. We’re getting really close though, and we’ll continue to invite more private testers up until the day the public beta is released. Thanks for your patience and support!
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Those Who Forget the Past…
I’m can’t resist quoting the quote quoted by Techdirt from a quote on the EFF website of an ad run in Capitol Hill newspaper by the Consumer Electronics Association:
“I forsee a marked deterioration in American music…and a host of other injuries to music in its artistic manifestations, by virtue—or rather by vice—of the multiplication of the various music-reproducing machines…” -John Philip Sousa on the Player Piano (1906)
“The public will not buy songs that it can hear almost at will by a brief manipulation of the radio dials.” -Record Label Executive on FM Radio (1925)
“But now we are faced with a new and very troubling assault on our fiscal security, on our very economic life and we are facing it from a thing called the videocassette recorder.”
-MPAA on the VCR (1982)“When the manufacturers hand the public a license to record at home…not only will the songwriter tie a noose around his neck, not only will there be no more records to tape [but] the innocent public will be made an accessory to the destruction of four industries.”
-ASCAP on the Cassette Tape (1982)
Now compare with the apocalyptic pronouncements put forward by MPAA executive Fritz Attaway to justify stifling consumer choice. Funny, isn’t it?
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Mobile Communications, Expensive Nooo…
Every so often when I want to take the joy out of my day, I look at my mobile phone bill. I am struck by how ridiculously high the charges are in Europe. On average in Europe video calls cost € 0.5 per minute, voice calls cost € 0.25 per minute and SMS (texts) cost € 0.14, and these costs assume you are not roaming at which point an SMS can costs as much as € 0.85. Getting the sense that consumers are being taken for ride?
In my opinion, the mobile communications market offers tremendous opportunities for young companies to innovate. This sector has structural reasons why massive disruptive innovation is only a question of time. To name but three out of a long list: 1) inertia 2) fat margins and 3) massive user base.
Of course, when most talk about innovation in the mobile space, we generally hear about things like gaming, social networking, and video sharing. These are naturally areas where innovation will also flourish and I strongly believe that their time is coming, but why forget communications?
I encourage entrepreneurs to set their sites on the mobile communications space by offering products and services which greatly reduce costs while broadening the mobile communications user experience. I think for those who dare, you will not be disappointed.
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The Fall and Rise of the Semantic Web
One day I’ll write a business book describing the key maxims that I’ve picked up over the course of my career and adopted as guiding principles. Probably right after I learn Japanese, publish my first novel, break par over 18 holes, improvise a six-part fugue on a theme by Klaus Nomi and win the world backgammon championship. In the meantime, I can always pontificate about these pearls of wisdom here on Peer Pressure.
One of my favorites is the tendency of technology hype to peak far too early, causing folks to write off promising trends years before their time. By the time the hype starts to crystallize into reality, no one is paying attention since they’re already concentrating on the latest flavor du jour.
A particularly poignant example is the semantic web. This was all the rage back in the late 90’s, but I dare say most tech watchers have forgotten all about it as they work themselves into an AJAX-fueled, contextual advertising-funded frenzy. Meanwhile, clear evidence of its imminent emergence is starting to appear, as described for example in a recent blog post by Tim Bray.
The main problem with initial efforts to add structure and semantics to the web is that they relied on a big bang shift in the way web content is created, with no incremental path to adoption. The inevitable result is a classic tech catch 22: no one wants to create content that can’t be consumed, and no one wants to invest in tools to consume content that doesn’t yet exist. Perhaps the biggest driver of the future semantic web will thus be RSS, especially to the extent that this can be abused as a blanket term that also encompasses the far more flexible (and far less yucky) Atom. By bringing structured content to the masses in a way that’s immediately useful, RSS opens the door for a parallel web based on XML, with all the exciting possibilities this implies for more intelligent web applications.
Microformats are another important step. The idea of dual-purpose content that can be processed by human brains while we wait for computers to make them irrelevant neatly solves the chicken-and-egg adoption dilemma.
Naturally we’re not there yet. Some sort of persistent client-hosted identity, for example, is a prerequisite for a true semantic web. And that still seems tantilizingly out of reach. But gadgetry like Techorati’s microformat search and Ray Ozzie’s brilliant Live Clipboard are clear signs that the tide is turning.
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New Version Is Out
We have just pushed version 0.35 out and will be inviting more testers before the end of the week.
Here’s an abstract of the change log on new features (we also killed a few bugs).
- Webpage sharing:
You can now share a webpage just like you share a file. Simply drag the tab of the page, or drag the favico from the adress bar or right-click on the page and select the new menu “Share page with…”.
- Event bar:
An event bar has been implemented in the Navigator which will be used from time to time to alert you of new events. The event bar is invisible unless a new event appears.
- Update mechanism + Update available event:
When a new version of AllPeers is available, the event will display a new event in the event bar to allow you to easily know when a new version is ready.
- Support for mandatory update:
If a mandatory update is available, the Navigator’s content is empty and displays just a message “Mandatory update is available” plus a hyperlink.
- Multi-hubs:
Support for multi-hubs relay.
Existing testers can download it using the standard Tools/Extensions mecanism in Firefox.
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Beta Late Than Never
Despite hypotheses to the contrary, we haven’t all shut down shop to watch the World Cup, although I am pretty psyched about the U.S. Open golf this weekend. I haven’t been posting as much lately because I’m too busy coding.
AllPeers is getting better and better. We’ve added webpage sharing, which is very cool, as well as improved network support which should enable us to accelerate the pace at which we invite new testers and bring us much closer to the public beta. Unfortunately I’ve been wrestling unsuccessfully with an obscure Mozilla bug which is making my system tray icon crash sometimes, so that won’t be in the release until I find the solution (some people from the Mozilla community are giving me a helping hand).
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Everybody Loves the Sunshine
One of the most difficult decision in the life of the CEO of a start-up is to decide when to take… vacation. “How could the company I created survive without me for a few days!?” is the usual workalcoholic’s excuse.
It usually starts with my parents telling me I look very tired. Then my friends make comments like “when was the last time you went on holiday?” then it’s Matt who hint that I should “try to relax more”. So last week I made the big jump and decided to take a complete solid break away from email and the web and I went to bury myself on a small island in the Atlantic ocean - hey we have to use our investment money somehow 
Well the company did not collapse while I was away. Great things actually happened, the development team made some major progress and on top of everything my energy level is at its top.
Meanwhile, my friend Rodrigo, the mad French vlogger was interviewing Om Malik of GigaOm fame and asked him if he knew any cool company coming out of Europe. To know what his answer is just press play.
(The whole 12 minutes interview is here).
Thanks Om!
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Never Revver
Alex Rowland of Democracy in Media delves into the reasons why Revver, with its innovative compensation model for video uploaders, is being absolutely trounced by YouTube.
His analysis, as far as it goes, is sound. Using Revver is a good deal more inconvenient than using YouTube because you need to sign up for an account (to get paid) and use a special app to upload. One might suppose that earning money would effectively compensate for these factors, but in this case the potential payoff is far too low. A commentor goes on to note that Revver doesn’t even stack up well against YouTube on a feature-for-feature basis. I would add that the success of any such website, which relies enormously on network effects (who wants to upload videos that no one will see?), is dependent to a large degree on luck and timing. It might be the case that YouTube just happened to gain momentum at the right time and rapidly became the destination of choice for sharing and watching online video, with success breeding more success. After all, by all accounts it’s even more popular than Google Video, which is largely an equivalent offering from company that enjoys widespread adulation.
I disagree somewhat with the implications of Alex’s conclusion, however. He seems to be sounding the death knell for business models that compensate content creators, explaining that “the hive doesn’t participate because they’re getting paid, the hive participates because it likes to hear the buzz of the crowd.” The devil is in the details, however, and Revver is struggling is because it ignores the dynamics of this type of community. Very, very few people are capable of creating a video that strangers want to watch. And only they are worthy of compensation. So a model that seems to be premised on a more or less symmetrical relationship between creator and consumer is bound to fail. And yes, advertising is generally a poor mechanism for monetizing this type of content, just as most bloggers (even superstars) find that they don’t earn enough money from AdSense to bother with it.
The right model is to charge for the videos directly. Yes, this puts a huge additional burden on the consumers, but people are obviously willing to buy content, even online (witness iTunes). If a site is designed to let the cream float to the top, I’m sure that a lot of people would be willing to shell out a buck or two for the latest white-hot viral video. Only the elite few are capable of creating content that compelling, of course, but once you wring out all the inefficiencies inherent in advertising, they will be able to earn a lot of cash indeed. So offer free video with the occasional gem available for a fee. This seems to be the approach taken by Google Video, and while it’s yet to register a blip on the web giant’s balance sheet, I dare say any startup would be happy to have its revenues.
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Google’s Bedside Manner
Interesting that the latest columns from two of my favorite tech commentators, Jon Udell and Bob Cringely, both deal with how out of touch Google’s customer service and PR departments have become. Google is sounding more and more like Microsoft (in its early 1990’s incarnation) every day (which has both positive and negative implications). All this is based on hearsay, of course: I’ve never interacted with anyone from Google who wasn’t highly intelligent, articulate and polite (and the same goes for Microsoft, actually).
It’s relatively easy for a tech-focused company packed with programmers to excel in software development. Avoiding generic corporate-think in the ancilliary functions is a lot more of a challenge. I’m sure that Google won’t wither and die because its spin doctors irked influential pundits like Jon and Bob, but the long-term trend is a bit worrying. Cringely is absolutely right: a world-class company needs to recognize and address these issues as well as rolling out great software.
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See Ya C++?
I had a thought-provoking chat the other day with Mozillians Benjamin Smedberg and Mike Shaver. What surprised me was not so much their dislike of C++ as a language, which is understandable, but the contention that (exact quote from the chat log) “if we were writing mozilla from scratch now, I doubt we’d use C/C++ for the vast majority of it.” In response to my obvious followup question, Benjamin answered, “.NET/mono, almost certainly.”
What’s going on here? First of all, while C++ was a great innovation when Stroustrup dreamt it up in the 80’s, it was basically a clever hack to begin with and it’s getting rather long in tooth. It’s painful to work with a language that requires clunky header files, has a pitifully limited set of built-in types, doesn’t have proper support for exceptions, has subtly different syntax and behavior across platforms, etc. (complete with your own personal top ten things you hate about C++). Particularly painful when you consider the panoply of modern languages (Python, C#, Ruby, etc.) that have corrected most or all of these weaknesses.
Nonetheless, it’s very hard for me to imagine the kernel of a system like Mozilla being written in a language that doesn’t compile down to machine code at build time. The issue is that download size, startup time and other metrics can never be good enough for the consumer market. The .NET/mono runtime is presumably written in C/C++, so you could argue that this criterion is actually met if you consider the runtime itself to be the future Mozilla kernel. If the .NET/mono runtime were widely deployed, this might actually fly, but the need to get it onto the target machine is still a show-stopper for a consumer product. Microsoft is assuming that people will eventually get the .NET runtime as part of Windows, so rapid download, easy installation and the like weren’t high on the priority list.
The solution, one might suppose, is for Mozilla’s own “not C++” — JavaScript — to evolve so as to encompass the advantages of a Python or C#. And sure enough, Mozilla CTO Brendan Eich gave a talk at XTech on exactly this topic. I missed it because I was in Zaragoza, but judging from the slides, this would be a leap forward of several quanta. A little just-in-time compilation in the mix would be of enormous value as well since JavaScript is certainly not the speediest when compared with a compiled language like C.
So to go back to Benjamin’s original quote, the devil is in the details, in this case how we quantify “vast majority”. I certainly agree that C++ should be avoided where possible since it is such a drag on developer productivity. But moving wholesale to a new platform like .NET wouldn’t be the right move even if there were the resources to do it. Instead, Mozilla should position itself explicitly as a .NET competitor, with JavaScript 2.0 as its principle weapon moving forward. Yes, this means continuing to develop at least the core platform features in C++, but with killer apps like Firefox (something .NET sorely lacks), there is a good chance of winning this battle. And controlling a key web platform is certainly worth enduring some pain.
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New Features Coming
Ok yes we’ve been a bit slow on the blog front lately. We have been busy incorporating some new features into the next version (0.35).
This version should include some cool new features. You already know about the system tray icon. Another one is the extension of our data model to support webpages. Yes, we are now able to share webpages simply by dragging the page onto the person we want to recommend the page to. Private social bookmarking at its best.
I know there are zillions of bookmarking tools out there from del.icio.us to Digg but these are a bit like Flickr or YouTube: public galleries. The AllPeers webpages sharing is for people who do not want to publicly disclose what sites they bookmark. Also in term of user’s experience, no more cut and paste of URL into IM or email messages. To share a cool website with your friends, you only need to drag the page onto your friends’ group in the navigator. Then just like the sharing of any type of file, your friends then receive an alert and with one click can view the site you are sharing. I’m personally very excited about this as I constantly share pages with people.
If you are asking me when v0.35 is coming out I can only tell you that our QA person will get his hands on it next Tuesday. Depending on how the version behaves under our series of tests, it will be next week or the week after.
On another note, thanks to Mike Arrington from TechCrunch fame for making us his favorite start-up:
“I think my favorite startup right now, at least one of them, is AllPeers. It creates peer to peer networks on the fly…. They are based in Prague of all places and have raised money from the same guys that put money into Skype very early on. It is pretty cool.” [Source]
That’s it for now. Oh no I forgot. It’s Matt’s Birthday today so join me in wishing him a happy birthday and if you’re in Prague tonight come to his flat! He’s haviiiing a paaaaarty.
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