Image via CrunchBase

Trying to catch up on the RSS feed from Building43. You can definitely see the huge amount of value for hearing thought leaders’ perspectives on the future of the web. And really the emerging importance of the web for small businesses. The power of the web is still predominately a “new frontier” for small businesses and there is going to be a lot of innovation taking place in the next couple of years to help businesses, large and small, harness the value that is out there for the taking.

Below is the video of Fred Wilson, partner at Union Square Ventures, discussing his perspective of the web now and where it is going. Not much discussion of small business in this one (perhaps Scoble felt a more FastCompany style interview was appropriate here).

But if you are going to watch a video to really get a good taste of where the web is headed, you can’t go wrong in watching this one.  Lot’s of good insights into USV’s investment philosophy as well as Fred weaves in a lot of their portfolio companies into the conversation.  And to echo on of Fred’s comments, this was a great video that I would have loved to bookmark, throw into a queue and watch on the TV…someone is going to innovate and build that company…maybe I should.

DALMATIAN : DOG ::

(A) oriole : bird

(B) horse : pony

(C) shark : great white

(D) ant : insect

(E) stock : savings

It seems with growing frequency, I’m pulled into conversations regarding Twitter with many who are just now learning about it.  Great Time article on Twitter by the way.  Yes, I get the often “I just don’t get Twitter.”  I used to think that too when I first heard about the service.  I quickly no longer thought that.  But, recently, I get “Why use Twitter when you can just update your status on Facebook?”  And this throws me right back into the 90′s:  “Do you use the internet?” “Oh yes, I use AOL all the time.”  So back to my SAT analogy:

web : AOL :: Twitter status : Facebook status

Remember the walled garden of AOL, how many users would think that was the web, never venturing out into the wild world of the wide web.  Times change but I see history repeating itself.  The struggle and growing awareness of open and closed systems.  There is a tremendous amount of value being generated off the openness of Twitter than is available within Facebook, where your status network can only be as big who you are willing to have in your personal friends’ list.  The same goes for status in LinkedIn and who you are willing to have in your professional connections’ list.  The situation is certainly more complex than AOL of the 90s but strikingly similar.

Certainly an attention grabber.  It certainly caught me off guard on first glance.  And I don’t think anyone will be clamoring to steal that tag line from them.

But there is certainly something to the campaign.  We live in a world of innovation, innovation is taking place everywhere around us:  genetics, new sources of energy, the web, sneakers that blink, sneakers that roll, beer that tastes like it has lime already in it…  While innovation is great and the right thing for many companies and products, is that always the case?

Too many times we see companies fall into the trap of innovating to create the next new thing that they lose sight of what got them where they are.  Worrying too much about what is next rather than concentrating on their core competency and ensuring that they maintain their competitive advantage  simply (or not so simply).  Sometimes, remaining the best in your space and at “what you do” needs to be the focus.  

I’ll always be a believer in being on the outlook for new markets, new features (that add value), new technology trends and understanding what could disrupt your business.  At the same time, focus must remain on the core, this campaign speaks volumes to how companies need to remain focused on the core knitting.  Just in the time its taken me to write this post, I like this ad more and more.  And it is just a bonus for Post that I don’t believe anyone is going to try to mimic this campaign.  How ironic. An innovative ad campaign saying ‘no’ to innovation.

The hot news of the day is Carol Bartz being the choice for CEO over at Yahoo! There is plenty of coverage out there about the news.  It seems from everything that I’ve read and how the markets have reacted that the choice is not a popular one.  My two cents on the subject is that we should take a step back and give Bartz a chance to assess the Yahoo! landscape, make some decisions and begin to re-align Yahoo! on the determined course and strategy.  I made some early comments on this over at TechCrunch.

Yahoo! has a tremendous number of assets and really smart people.  Products ranging from search to delicious to flickr all can be knitted together in a cohesive strategy if the right leader and decision making framework is in place.  The boat needs to get pointed in a unified direction. That is why I think Bartz could be a good choice.  She may be new to the web and to media but Yahoo! has a campus full of individuals who are passionate and go to work everyday to build great stuff.  Bartz, from what I’ve read thus far, seems like someone that can assess the playing field for the organization, distill the information and make key decisions.  She clearly understands the gauntlet laid out as she stated:

Yahoo…a company with great assets that frankly could use a little management.

It all seems to blur together at this point but it seems the news regarding the company has been on a downward news cycle since the infamous Peanut Butter memo.  Perhaps there was a lot of merit in that memo where the general gist is that Yahoo! had its hands in too many things and needed to focus.  That is before any of the Microsoft debacle even occurred.  Then everyone coming out of the woodwork to put their view on the situation and what they should do to which Bartz responds:

Everybody on outside deciding what Yahoo should or shouldn’t do–that’s going to stop.

As I said, she is going to need some time to get on the ground, assess and move from there.  She is going to need that chance to do it.  I, for one, believe she should have that chance.  Clearly, she does do:

I can’t give you a timeline. I’m very good at listening, digging around, finding out what’s going on. I don’t expect it’ll take an extraordinary amount of time, but this is a big company. Let’s not put ourselves in some crazy timeline. Let’s give this company some frigging breathing room.

I, again, am bullish on Yahoo!  I think they have some great elements going for it and I never quite rallied behind the concept that they were in real trouble.  Time will tell but I think picking a CEO like Carol Bartz is a step in the right direction in changing the negative momentum that has surrounded Yahoo! for some time and then getting the company plowing forward again.  That’s it, from here out, I plan to give them some room to breath.

IntenseDebate is one of the major blog commenting platforms out there.  The other is Disqus, the one I use on this blog and one I tend to favor based on overall reliability and feature set.  Both companies clearly get the value of commenting, user-generated content and the real power of conversation aggregation.  But if I were to put the two on a score card on execution, Disqus demonstrates real innovative thinking on how to put an overall platform together and paint their vision of what conversation aggregation can do and how to do it.  This was evidenced by their very early integration into WordPress and Daniel Ha’s continued work to integrate into FriendFeed once they emerged a critical aggregation player as well.

But, what is also clear is WordPress understands the value and importance of the comments on blogs (not that they didn’t before).  And as the major blog platform, WordPress has the value chain power to use this strategic acquisition to emerge as the leader in blogging as well as commenting.  And it is for this simple but important reason, that they acquisition is a huge coup for IntenseDebate in prepping for the future to potentially become the ultimate winner in this segment.  There is a sheer numbers game here and by WordPress rolling Intense’s toolkit out as part of their builds, it will instantaneously deploy Intense’s technology to blogs everywhere.  That removes one key obstacle for Intense that Disqus will continue to have to overcome in order to gain market share:  convincing blog owners to install.  Now, for IntenseDebate, it happens automatically.

Let’s hope that WordPress remains agnostic in their approach to continue to allow third party developers to build, promote and florish inside the WordPress platform.  I would like to continue to remain a Disqus user and expect to see fantastic things from them.  I will be keen to see how Disqus responds because we could be witnessing a business case of value chain integration that will be very tough to withstand.

Perhaps the answer is obvious:  MONEY.  But that is the easy way out.  Perhaps there are other obvious answers that I’m eager to listen to.  My view is there are tons of ways to make money and Microsoft has some of the strongest (while showing signs of weakness in some cases) revenue streams in their Windows, Office and XBox franchies.

So again, I ask the question:  Why does Microsoft have to play in search at all?

Does Microsoft have to play in every arena that is technology-related and has a large market pie?  That does not strike me as a good strategic criteria and in the long-term, successful companies are successful by deciding what to do as much as the things to not do.  Microsoft has traditionally built an organization that has been able to successfully play in a number of areas due to sheer size, strength, capital and aptitude.  I think those days are over, the technology industry is too multifaceted for any one company to have their hands in too many different cookie jars if you want to lead in any.

Google is the leader in search, that is their core.  Apple is the leader in digital music device, that is in their core.  Why does Microsoft have to be in search with Live/MSN and in digital music device with Zune?  Because they can doesn’t see like the right answer and it sometimes feels like that to me.

To be clear, I am not shaking a stick at what Microsoft has accomplished (in anything they do or have done).  It is incredible what they have and continue to accomplish, particularly from a revenue perspective.  Even what they’ve done online with MSN and Hotmail while I am not a user of either.  So it isn’t about that.

It is about my asking what is truly their core business and why not place so much more focus there rather than diversifying into a space like search that I think everyone knows is a much different “kettle of fish.”  If they spent their efforts in the core, would they be demonstrating amazing new offerings in the area of online office tools, perhaps even acquired Zoho?  Why didn’t they buy Plaxo and integrate it into Outlook (always seems like a not brainer to me) and also consistent with their attempts to grab Xobni.

I don’t know.  There seems like a number of angles that Microsoft can compete from its traditional areas of strength to compete in the online world.  All this talk about Yahoo! and all of the investment in search is geared towards, well, competing in the search space.  But is that necessary when there are so many other (perhaps non-du-jour) areas to play in on the web.

Anyway, just some thoughts…  Interested to here what others have to say on the topic, I’m sure the opinions will be passionate and wide-ranging.

UPDATE on Sunday, May 25:  Tim O’Reilly has a great and very related post to this one up on his blog.   Arrington over at TechCrunch has his own views about the risk to the industry of creating a search monopoly.  I’m much more with Tim on this one.  There is merit to having competition in search and I have no doubt there will be even if everyone does outsource their search to Google in the short-term.  But I don’t see why Microsoft has to be that competition, better to concentrate closer to their core.

Here are some of my thoughts of Microsoft Live Cash Back:

• I do not view this as “big” news out of Redmond nor do I feel it is a huge strike into the hull of the Google search tanker?  Verdict:  No material effects on Google’s search bottom-line.
• I always get very concerned when “cash back” or “lower prices” is the angle.  Sometimes it makes total sense when it is the underpinnings of the business model (which it could be here).  But because this is Microsoft and they tried so many different tactics against Google, the combination of attempts conveys to me a “this is our last shot” attempt at doing something sort of feeling.
• I feel only the truly price-sensitive will use this as one of their many tools when looking for the lowest price on a product they know they are actively shopping for.  Is this a large market? Perhaps. Could this become a leader in commerce showing?  Absolutely.  But that should be a concern for the Shopping.com’s of the world and Google Checkout.
• On the point above, why is everyone looking at this against Google overall.  Perhaps Microsoft simply has decided that grabbing share in the general search arena is a losing proposition and that commerce search is still really the unclaimed frontier?
• People search for products all the time.  However, often they are doing research on the best product for them.  So while a large percentage of Google searches are commerce related they ARE NOT NECESSARILY commerce related with the “intent-to-purchase”.  And that is the only thing Microsoft’s offering real tries to solve for.
• People care about experience and ease-of-use.  That is why everyone fell in love with Google in the first place, because it works.  So, premise is only 10% of the battle.  Any new search-related product better beat Google (and beat it hands-down) in experience, ease-of-use and results.  Otherwise, people are going to switch and the low switching costs of the web are not going to help.  By early look didn’t impress and it didn’t impress others either.

In my mind, I am looking beyond the points above and asking a more philosophical question:  Why does Microsoft have to play in search at all? To me, that is the fundamental strategic issue and probably another post which I’ll follow-up on.  The rest of this is just details if that question was answered incorrectly in the first place.

Sorry, I love Facebook but this simply strikes me at late nineties irrational valuations but an new stratospheric levels.  Of course this is a rumor and very inline with the 1% valuation Microsoft has already placed on the company but buying 1% and buying the whole enchalada at that valuation are two completely different things.  And I’m sure Microsoft has a team of folks a lot smarter than me doing IRRs, synergy analysis and long-term value analysis on what Microsoft can do from a revenue perspective overall with a great site like Facebook in its arsenal (not to mention it from a defensive maneuver against its core business).

To me, this is the Alex Rodriguez signing brought to the Internet.  The Rangers signed him, 10 years $275M.  The Yankees just parlayed that into 10 years, $325M.  Rodriquez, great player (Facebook).  Yankees, great franchise (Microsoft).  But completely off-the-grid and irrational.  Keeping the sports metaphor going and trying to put such an aquisition in perspective:  Microsoft could buy the TOP 18 NFL Franchises for the price of Facebook and those franchises have a cumulative revenue stream of $3.88B! (according to Forbes).

Think about it from that perspective.  The top 18 storied franchises in football with the likes of the Cowboys, Giants, Bears, Patriots, Redskins, Jets, Packers and Steelers to just name a few.

I see such an acquisition and such a valuation as crazy.  Bad for the web overall (for another post).  Potentially bad for Facebook and its users (again, another post).  And for that, I do not (or at least hope I do not) see this happening.  Sara Lacy doesn’t see it happening for different reasons.

UPDATE:  More conversation and interesting points on this topic at TechCrunch.

It remains the area of the business (typically) where it is all costs, all have-to expenditures, sole focus is to get the key elements in place with the least expense and lowest technology/business risk. And too often not looked at as a potential differentiator against competition nor a way to supplement or work to make the “front-line” technology operations that build products stronger.  The irony of it all is that the value of IT isn’t hidden at all, it is (or the potential) is clearly there.  Organizations choose to hide it with their practices and policies that govern IT at most fundamental of levels.

This whole school of though reminds me of a post I wrote a while back called The Enterprise Outlook is Cloudy.  Not fully on the mark but highly correlated because organizations’ choice to not use the cloud as part of IT strategy is directly tied to the “wall” discussed in the article.  The cloud, while it presents lower costs, it introduces greater risk to that of its “I never got fired for buying” brethren.  But it should be considered in cases a more strategic, moving the business forward option.  It does not, however, match with the way in which IT groups in most cases judge their own success.  This has to change.

From an outsider’s perspective, it seems crazy to think some of these potential partnerships that are being discussed are a better alternative than Yahoo! standalone. Time Warner? wow. Did I imagine what happened with AOL? If a financial transaction has to take place which apparently needs to since the situation is not going away, then Microsoft sure does seem the best alternative. As long as Microsoft basically leaves Yahoo! as their online arm, doing synergistic tie-ins to drive Microsoft’s online agenda. Microsoft keeping MSN running, however, seems duplicative and confusing. And, I can’t help but to continue to think that, even with the best of intentions, two companies of this size and different cultures often doesn’t lead to “one plus one equals three”. But again, I am not a financial analyst.

I, for one, am hoping that Yahoo! finds the financial methods to stay standalone. It will foster innovation, keep some competition in place, and I still think they have a LOT of runway to do great things.

UPDATE: Got an email regarding a related funny video. Uploaded over at my tumblr site. Thanks to Observ34 for sending my way.