#ihatewhengirlssay "that didn't take long"

Interesting to watch "tweetalanches" happen... and where/when they get started. For example, today at 10am, "#ihatewhengirlssay" was not a hashtag with any tweets. At the moment .... a few hundred. It should be interesting to see how much "damage" it causes before the dust settles. The whole things reminds of Scott Adams' "Avatar" concept/character in his most excellent books: God's Debris and Religion War (no relation to James Cameron's upcoming movie).

Also of recent note: Twitter's going to start making money.

#ihatewhengirlsay "Twitter's going to make tons of money."

Best Deal of 2007: Microsoft-Facebook?

Much has been written on the terms of the deal between Microsoft and Facebook. The gist of it is this: Microsoft paid Facebook $240M for 1.6% of the company, and the exclusive rights to sell online advertising for the site.

This being the year-end, all pundit types have got their best and worst lists coming out, and this deal seems omnipresent on worst deals of the year lists.

Its not hard to see why this argument is made: "worst" is really a proxy for "stupidly lopsided value creation", and is Facebook remotely worth that much (remember that MySpace went for $500M and YouTube for $1.6B)? It creates an implied valuation on their user base (figure 50M users or so) of, like, $300 a head... that's some big math... hard to see how Microsoft ever really recoups its investment.

But of course, that's to focus on the value with regard to public markets and value cap - the *wrong* metric here. That implied valuation of $15B, is pretty much (forgive my language) bull$#!t because this deal was, in reality, a barter deal.

Let's look at the deal another way, very simply, in terms of cash:

1) Facebook gets a $240M cash infusion while giving up very little control or equity,
2) Microsoft gets a significant destination outside its network in which to build the value of its recent, very large acquistion of aQuantive (4% of the $6B that's already "sunk"),
3) Microsoft has to generate incremental ARPU of only $5 a user *in total* to break even,
4) Facebook is valued at $15B, which means...
5) Facebook is either (depending on where you think this ends): (a) off the market for some time at that price (so no Google, Yahoo, et al spoilers), or (b) tied to Microsoft and hardening/creating value in their online ad platform

Win, win, win, win, win - at least for Microsoft and Facebook: you know, the parties actually doing the deal?

Isn't that the definition of "best"? Lopsided value creation for *both* sides?

Any "investment" dollar$ back from the deal is pure upside for Microsoft. That means that they, more or less, let Facebook fill in the denominator: $240M of $XX - Microsoft doesn''t/didn't *really* care what that number was...

I don't know about you, but it leaves me with a funny taste in my mouth... is this the "revenue exchange" program of the new bubble - a variation of the old: "I'll buy from you if you buy from me and both our revenues go up, but we're not spending any money trick?"

Dunno - but it also smells suspiciously similar to another "equity for exclusivity" deal...

Hi Hulu Hulu Nuku Nuku Wah Ha Hah...

Updated: Hunh - they fixed the scaling :) Beta-in-motion... cool!

Hulu (the YouTube/iTunes clone from "Big Media") is now in beta (closed, but still)... see the embedded player below (link).

It looks pretty nice - nothing mind bogglingly interesting or anything, but somewhat well executed (annoyances already: can't invoke menu without sitting through the ad, scales size REALLY poorly - note that I'm not using the default "520 x 295" size... and permalink, wherefore art thou?). You can follow a "related content chain"to other assets by clicking on links when you invoke the "menu" - rollover the clip above to see what I mean.

I obtained this clip from from the Hulu blog (written by the CEO)- which has all of two entries since August.

CEO blogging is nice and Web 2.0h-ey - but only if you follow through, so minus style points for that. On the flipside, its an episode of the Office (full episode!) they use as a first example - which is frikkin' hilarious, so there's that.

I have to admit, as content providers increasingly push out the middle man, and offer the content directly... well - I'm not sure how many "pure" aggregators will be left standing.

Maybe this will be one. Or maybe not.

Unique Vistors are not users

Being at a Cable/Media giant now, as you might imagine, we discuss advertising a fair amount, and in particular, exploring the strengths, weaknesses, and, really, differences in how the advertisers, content creators, and distributors think about the eyeball value chain on the web vs broadcast media.

One of the obvious but interesting observations for web metrics is that the commonly used measure for audience is not actually people. That is to say, the "visitors" referred to by "unique visitors" isn't people at all, but devices. And even that's a bit of a misnomer, because its really, for PC users, a per computer per OS user account metric. Whether its a browser cookie, Flash local shared object, or Google Gears data store (the latter two don't get cleared when you delete browser history in your browser, btw) - nevertheless, they are all at the same level of "user" granularity. I'm going to suggest that OS user account is really a poor man's device and data virtualization technology, much in the same way that Multifinder was a poor man's multitasking technology back in the days of the original MacOS, and thus, we're talking about a device metric.

Unique visitors (UVs) really is a direct measure of how many devices connect to a given site. And it is correlated, of course, but not identical to the number of actual users visiting that property. Some sites you may use only at home or at work (one UV per user), while some may be used at work and home (two UVs per user), or, in cases where many users share the device (home computers, or set top boxes, for example) it may be one UV for many actual users.

Magazines will often refer to the "pass along" index of a magazine: that is, how many people might actually read it, but may not have purchased it (House&Garden magazine has a pass along readership of 14 or 15 people per sold copy, whilst National Geographic is around 5 or 6).

In this area, the Internet is surprisingly immature, given the promise (and increasing reality) of behavioural, demographic, and metric oriented targeting of the world's many-to-many publishing medium. This kind of thing becomes important not just for CPM advertising (that is, impression and brand based advertising), but even more so when considering the efficacy of CPA advertising (so called "Cost-Per-Action" advertising).

I mentioned magazines rather specifically, because it appears that Internet advertising growth is coming most directly from print and publishing, and not at all at the expense of broadcast (its shrunk nationally, but more than compensated in other channels). Perhaps we need to extend UV's to be UV/U's (Unique Visitors/Users), much as Nielsen's does for TV ratings/share to extend more actionable transparency to advertisers and targetting technologies?