Internet Business

I have seen figures around the place of US$10 billion, $15 billion and even $20 billion as a possible value of facebook. Now microsoft is already serving ads on facebook, so it must have an idea of how good the ads are. The articles that I have read, this one being the most recent one, suggests that the ads on social networks are not all that lucrative.
Also consider the fact that this article suggests that Facebook may make a loss. Now it is not uncommon for sites that are making a loss to sell for millions and sometimes billions of dollars, but seriously, I think Bill Gates needs to intervene and not let Steve Ballmer get all caught up in the hype and make a stupid business decision. I heard somewhere that Microsoft’s cash reserves were somewhere around the $50 billion mark. They should be investing in internet companies that are profitable and that will add to their cash reserves in the future, not ones that will further deplete their cash reserves over time.
Also social media sites are fickle, friendster, use to be the leader before it slipped into obscurity. According to alexa, myspace.com is ranked at No 6, facebook.com is ranked at number 8. Myspace.com was sold for US$580 million, one would have to think that a facebook valuation over $1 billion does not look like good value.
Bill Gates appears to have a fairly close relationship with Warren Buffett. I think he should step in and make it mandatory that any deal over a billion dollars needs to be analysed and approved by Warren Buffet first.
It is not all that hard to spend a lot of cash and build sites that are immensely popular, the real challenge and value is in sites that are profitable.

This article I read today at seomoz contains some very interesting information on the top 100 sites on the internet.
The research was taken from a few sources, alexa, quantcast and compete. Im particular, of the top 25 domains, 60% were controlled by these big six companies. Google, Yahoo, Microsoft, News Corporation, Time Warner and Amazon.

Well a few days I made a post on why I thought Microsoft should bought CNET. Today I read a post on techcrunch

Other bidders may still come to the table. And if they bid more, CNET has to pay a relatively paltry $35 million breakup fee

I seriously think that Microsoft should buy CNET, invest in the server infrastructure and search technology to build a better search engine, develop it in stealth mode, test it in user test groups, and then launch it under the search.com brand.
Add in the future potential of tv.com and news.com and they would be in with a real winner with this transaction. CNET was one of the few early players in the internet space who really understood the value of a good domain name. They should make the move now, cause opportunities like this will not come around again.

Ramsay’s Kitchen Nightmares is a show that I quite like. One can take a few lessons and apply them to running a successful business. Mainly
1. Developing a good product that is targeted to your market.
2. Presenting it well and at a reasonable price.
3. Offering great customer service.
4. Marketing the service.
These seem to be common themes that are addressed in each episode. One thing that I find very interesting is how people react to the harsh advice of Gordon Ramsay. I have given harsh advice to people in the past and they generally do not take it well.
If somebody who had proven themselves to be extremely successful in the online business world, better than what I have achieved, I would gladly accept their advice, no matter how they expressed themself. I always think those people that ignore the advice of people who are much more successful than themself, are often fools and delusional.

According to this report at techcrunch Arstechnica.com was sold to Conde Nast’s Wired.com The price does not appear to be disclosed, but techcrunch quotes the sale price at a reported US$25 million in cash.
If this indeed were the case, it does make the sale of the weblogsinc.com network of blogs to Aol for a reported US$25 million look like a bargain. Amongst other popular blogs, weblogsinc included engadget.com, and others like joystiq.com and autoblog.com
engadget.com is clearly the leading blog in the technology field
engadget is the no 1 blog according to technorati, arstechnica is ranked number 7 on technorati.
the alexa rating for engadget is 382 considerably higher than arstechnica’s 2,382
Arstechnica.com does the advantage of having a forum with over 9 million posts, which makes it the 13th largest computer hardware forum in the world according to big-boards.com

In my opinion, CNET being bought by CBS represents another lost opportunity by Microsoft. In my opinion, they should have bought CNET, at $1.8 billion it looks like a relative bargain.

On the surface, CNET as a technology site does not hold the power and influence it once had, that has been eroded by more nimble internet tech sites like engadget.com etc However there is no doubting the popularity of download.com Add its gaming site gamespot.com, and these sites would have been a perfect fit for microsoft to promote its products.

Then you have domains like tv.com where the possibilities are enormous. I spend more time watching sites like youtube.com than normal tv these days. Tv being streamed via the internet could very well be the way of the future, and what better a name than tv.com

Then we have news.com Most people I know who are not heavy internet users, do use the internet to see the latest news stories. Here in Australia, one of the top two news sites is news.com.au A global news site branded under news.com would have been amazing.

Oh and now the real reason I think microsoft should have bought cnet. The domain search.com You just dont get a better domain for a search engine than that. msn search is a failure, live.com is a failure, search.com would have been a perfect brand to launch a new search engine, and search is where all the rivers of gold lie. They could have spent a few years building all the server infrastructure and building a better search product than google and launched it under the search.com brand. But alas, the suits at microsoft seem more interested in marketing and branding a useless product, they have got it all back to front. Build a better product, and you wont need all that fancy marketing.  And it wouldnt take a rocket scientist to be able to build a better search product than google, given that microsoft still controls internet explorer, which is still the most popular browser on the internet, though IE 7.0 was a mess in my opinion.

Microsoft buying Yahoo might deliver them more eyeballs, but it will not gain them any ground in search, as Yahoo does not have the search technology to take on google. Bill Gates is a brilliant man, he appears to be somewhat detached from the company these days, I do believe that if he got fired up in the spirit of when the company was founded, he could win the search wars.

This was one of the more impressive domain auctions I have seen at snapnames.com Dreamlife.com selling for US$171,750 at snapnames, my first impression was, whoever paid that much for this domain must be bonkers, well turns out it was bonkerstwo, the undefeated king of domain auctions who has access to what seems like an unlimited flow of cash on tap. I think it is overpriced. Inevitably some kind of parking page will pop up, and of course the ppc revenue will come nowhere close to matching the price paid for the domain, well at least I dont think so. So what is the strategy for a domain like this? overture shows that it has a search volume of 556 with the extension. Their is a hasbro game called dreamlife. Then of course there is the branding potential of a name like this, good for a film production company, dreamlife studios, or perhaps a challenger to the incredibly popular secondlife.com

Also on this weeks dnjournal sales chart, connected.co.uk was reported to have been sold for 80,000 pounds which is equivalent to around $159,400 US dollars.  Personally I think they payed too much, but the buyer netbasic from the UK appear to be quite a professional outfit and I am sure they will recoup their costs. What makes this particularly interesting is that the domain was purchased in January 2006 for $3,500 which is quite a nice return for such a short period of time.

According to the weekly dnjournal sales report, the domain iran.com was sold for US$400,000.  The domain was purchased by Rick Latona of digipawn.com. Now my first reaction was, that is not a domain that I would personally pay US$400,000 for, it is not exactly a top holiday destination at the moment. But if you look further, according to overture stats, the word iran for January 07 was searched for 367,397 times.  It already has a reasonably respectable alexa ranking of 229,928. On the site it says “Iran is the 18th largest country in the world and home to 70 million ”.  A little research of my own, not sure how accurate these figures are, show that Iran has the third largest oil reserves in the world. So basically, if somebody has US$400,000 to spend on a domain in the first place, I will assume that they must know what they are doing.

Well I cant resist a contest, seems like half the posts here are related to contests.  Anyhow, John Chow, someone who really knows how to make money in conjunction with Bluefur.com who is hosting canada websites, are currently holding a contest to win a 24″ lg monitor.