There have been quite a number of complaints over the last few weeks that Youtube isn’t paying artists enough for showing their content. The argument from the music industry is that Youtube owes much of its success to the music industry. This seems like a far-fetched idea at best, but it is something that Google/Youtube have tacitly admitted in agreeing to pay ANYTHING for allowing music videos to be put on Youtube.

What’s the purpose of a music video? Is it to be an artistic expression in-and-of itself? I can’t honestly think that it is. No, a music video (much like a radio spot) is an advertisement – for the band, the song, and the album. It is quite frankly absurd to me that artists believe that they should be paid – beyond the amount they already get through the ads they place on their own pages – because Google is providing them a platform to transmit their commercials to millions of people around the world - FREE.

So when the Performance Rights Society (PRS – UK’s RIAA) could not reach an agreement, Youtube pulled all the music videos down in the UK, signaling that, in fact, it doesn’t need them nearly as much as they need Youtube. The best part? Numerous artists, even ones who had been complaining about how Google was “stealing their money” and “not paying for music” suddenly found that their own, personal websites didn’t work. The videos on their own sites had been embedded versions of Youtube videos. That’s right, in addition to providing free advertising and free distribution, they were also shouldering the largest, most expensive part of a band’s website – the streaming media content - FREE. The cost to artists to host and stream their own videos, thousands or millions of times, would be far higher than anything they could hope to re-coupe from licensing fees.

It appears that the PRS is doing everything it can to actively torpedo its artists’ futures online. Their actions have already driven Myspace Music and Pandora to simply cut off UK service. Does it appear to be hurting either of them? Not in the slightest. You know who it is hurting though? I made a list:

• The Fans
  • No longer able to find their favorite band’s music online
  • Can’t introduce friends to the music in an engaging way
• The Musicians
  • Less exposure means fewer ticket sales
  • Fewer new fans because of lack of sharing
• Music Video Makers
  • If a music video can ONLY be played on MTV, it has less value
  • Less value means people pay less to make music videos
  • Fewer bands (especially UK bands) will even bother making music videos

I hope this is helpful to the people at the PRS, and that they carefully consider who they are ultimately trying to serve. Clearly, artists and fans are both hurt by their actions, and value is generated for no one. It is yet another example of an outdated, monolithic group trying desperately to stay relevant.

So here’s my proposal: If artists want Google to pay them for every view, they can pay Google for every single embedded version of the video. Every time someone embeds it anywhere and Google isn’t getting any advertising revenue, the band can go ahead and get billed for that bandwidth. Then, at the end of the month, they can get together and see which bill is bigger – bandwidth or licensing.

Here’s a Radiohead (one of the bands that complained) video. Just for you to enjoy on Radiohead’s theoretical dime.

So there’s this interesting pattern I’ve observed in the distribution of technology - things generally trickle down to consumers. What used to be expensive and elite will, over time, become inexpensive and commonplace. Cellphones, computers, digital sound systems, etc. I know that’s not much of a surprise to most of you, so here’s what I think is going to happen.

Media storage is getting cheaper and easier all the time: the rise of the home server. Over the next few years (certainly by the end of 2020) most homes will have some kind of centralized storage. Just like 10 years ago people didn’t have routers and switches in their homes, now almost everyone does. With a home network comes multiple comptuers. Multiple computers leads to all kinds of problems - syncing files between machines, duplication of data, ease of access, usage location, etc. All of this adds up to a solution early adopters are starting to notice. Why put music on every computer when you could just store it on some low-powered, high-storage computer? Why set up complex mechanisms for downloading, transferring, and storing content on a laptop when you could just as easily store it on some server you own?

The obvious solution is to store it on a remote server someplace, up in the “cloud” for easy access anytime. The problem is that people don’t trust the cloud yet - data gets lost, privacy and security aren’t well explained, and retreival times are limited. Sure, you’ll keep things you explicitly want to share with others, but not most things. You’ll never keep your collection of tax records, illegal mp3s, adult entertainment and pirated movies up on a server someplace. No, you want it in a little box, tucked away in your house.

Ideally, it’ll be the size and shape of a router. It’ll plug in and have a bunch of storage for local use, and you’ll be able to expand it anytime. Why not?

Routers with extensible RAID file systems: the next big thing in home networks.

So as a new year (and a new President) are upon us, I find myself wondering about the future of television. I hypothesized last year that in the future, we’d free ourselves from arbitrary schedules and the concept of a “broadcast network” entirely. Why should a network (or “channel” for that matter) have to release only one show at a time? Why not let all the new shows for a day come out at a certain time?

Certainly, a portion of this country receives broadcasts over the air, and probably will for quite some time. This will limit us to the time-locked, one-show-per-channel But an ever-growing number of us have a feed from our local cable or phone company for internet. What that means is that the same person providing me the access to some arbitrary multicast feed of channels that I pay an exorbitant amount for is also letting me stream from the myriad of services online - Netflix, Hulu, Youtube, and a myriad of network-specific sites, like NBC.com and ABC.com. I feed all the “channels” into my Tivo DVR and then watch them when I want. The whole thing seems silly though, and there has to be a better way for everyone involved.

And here it is:

Currently, networks like NBC see themselves as content providers, effectively they are both publishers and distribution houses for a very narrow stream of content. They have a limit on the content they can carry, both from a financial resource standpoint, but more importantly they only own a few channels, which can only put a single show at a time on. This is a choking point which doesn’t NEED to exist in a modern system, but is vestigial backwash from when radio waves carried a signal out from one tower to your house.

I envision a day when networks like NBC act almost exclusively as content aggregation. They pay for shows to be made, insert their commercials and so forth directly into them, and then send dozens (or hundreds) of shows directly to my local cable / internet provider each week. Then, my provider can set up a “portal” - possibly even give me a little Set Top Box to stream it directly from their servers. Even manage subscriptions through the box - letting me automatically download a show (effectively subscribe), letting me pick my shows and pay for groups, seasons, genres, or just single episodes. Or an “all I can eat” pass to watch whatever I want when I want it.

Everything is On Demand. The amount of traffic I pull down from the Internet is dwarfed by the amount I pull down over a high-speed, local connection to a server sitting halfway across town. Why stream from NBC’s servers over an expensive, “real” internet connection when I can pull down from my local ISP?

What this will do is basically abolish the concept of a TV “network”. They’ll be feed services, and can focus on what they’re actually supposed to do - provide content. They’re publishers, not distributors, and they should stick to that. The value of a themed “schedule” pales in comparison to the value of watching what I want, when I want it, with not limit to storage, capacity, or the number of channels I can record at once. And I shouldn’t need a $1000+ piece of hardware or something I pay an extra $15/mo for. I should just do it.

Microsoft is working on something called “Media Room” - it is effectively a DVR for an entire cable provider. Record everything, turn your entire network into an “on demand”. It is incredibly promising, but the current content providers are crying “Foul!” at the concept of delivering content to users whenever they want it, rather than based on an arbitrary schedule. They’re fighting with lawyers and lawmakers, and it’ll be a while before technology and consumer benefit win out. The old, lumbering media giants don’t want to give up a piece of their estate, even though they’d be better off in the long run. Also, they don’t want to make it really easy for new competitors to enter the business of media distribution. There isn’t a way to easily monetize Youtube (yet), but if I could put content on my local ISP’s network and let people pay a quarter per show? I wouldn’t need NBC at all, except to make the expensive shows. The value of their distribution network would no longer be a hurdle, just the amount they can front for famous actors / sets / equipment.

Leveling the playing filed scares them, so they’ll fight it as long as they can.

On Sunday morning, I found myself sitting in a trendy little cafe in Hollywood, talking to a good friend of mine, Spaceman. We stood in line to place our order, discussing a wide variety of topics ranging from work to life to (naturally) the economy. We mused over the concept of a private currency, which some companies are implementing in baby steps (like Visa gift cards) and others are truly running with (like Microsoft points). And that brings me to tonight’s musing:

What would happen if the dollar lost 50% of it’s value next week? What would it mean? A lot of people have a difficult time separating the terms “currency”, “money”, and “wealth”. The US Dollar is just currency - it symbolizes an agreed-upon value (known as fiat money), but has no intrinsic value in and of itself. It is a tool, to facilitate trade. But like all tools, its usefulness waxes and wanes, and sometimes there’s a better tool for the job. Another currency, or another method all together.

Right now, I get paid in US Dollars, because the convenience (and expense) of not having to convert form another currency to the one used where I live is less than I’m likely to lose due to fluctuation in the value of the Dollar. If my economy started to nose-dive, what motivation would I have to keep my money there? Sure, decades ago it would have been nearly impossible to jump-ship with my money. Today, it’s a button on a (good) bank’s website. Why shouldn’t we shop around for the currency that offers us the best “bang for our buck”?

If the USD began to slide, and I mean really slide, due to inflation, poor management by our government, or for any other reason, today I can opt for another. How’s the Yen, Yuan, or Euro doing?

If you want to see what this is like, open up a Paypal account. Deposit, say, $20. Then flip it back and forth between any of the few dozen currencies they suppor, maybe once or twice a week at most . Their conversion rates are pretty good, they take a very nominal fee for the conversion (less than 3%). You’ll see you can, in fact, keep your money in any curency from USD to GBP to Yen to Euros. Neat, huh? Now, you’re a currency trader.

if you can easily switch currencies, there’s a second advantage: any one backed by a reasonably large and developed country won’t really nose-dive. The value of wealth circulating in a country can be thought of a lot like the market cap of a corporation. Currency is a futures market; betting on the ability of one currency (country) to out-perform another in the long-term. If the USD slips below the cash value of all the assets within the country, international currency traders will buy up TONS of it, because you know it is going to recover. You know you’ll get your money back if you wait long enough. Buying up billions of dollars will raise the price of dollars, correcting any downturn we begin to see. Or maybe they’ll just offer really valuable foreign currency for local services, like buying your house or car off you.

But until the rest of the world’s major and ancillary economies all collapse at the same time (in which case, you’re SOL no matter what),

don’t panic.

Hey there, college students. There’s a new fee on next semester’s tuition. No, it’s not to cover upgrades in the library or repaving the bike paths. It’s to cover the music you’re stealing. And you’ve got no say in the matter.

Warner Music Group recently approached a number of Universities throughout the US with a problem, and a wonderfully elegant solution. The problem? College students “steal” music. Now, we’re not talking about walking out of Target with it tucked under your jacket, when they say “steal” they mean “copyright infringement”, the big DL, swappin’ bits, or whatever you kids are calling it these days. Downloading music.

Warner proposed a truly graceful solution, one that I’m sure any 14th century monarch would be proud of: just fine EVERYONE! It is much too time consuming and expensive to actually bring everyone to court, especially for the relatively small number of people actually committing a crime. Rather than just take the shotgun-to-a-swarm-of-bees-in-front-of-a-small-child approach they have been, where an occasional target actually settles out of court, though hundreds of innocent people get accused and dragged through lengthy, expensive legal proceedings, Warner would like to simply place an arbitrary “tax” on all university students. A few dollars, maybe $5 or $10/mo, from every student, in every university in the country! This would all go into (their words, not mine) “a pot of money”. Then they would, on their honor, dole out money to content creators (it will be too hard to find out who) and license holders (themselves and their friends) in a “fair, not profit-motivated manner”.

And what do you get in exchange for this wonderful, per-student tax? The RIAA agrees to not sue the University. Note, this doesn’t say students, it says University. There are roughly 20.5 million undergraduate and graduate students in the US, according to the 2006 census . This means this pot-o-gold they’re hoping to gather could easily be in the hundreds of millions of dollars a MONTH, and billions per year.

Think about that. They’re trying to set up a scheme by which they get billions of dollars a year from students who’ve done nothing wrong, simply by virtue of belonging to a group in which SOME members break the law, and offer no protection in return.

One of the particularly upsetting points is on Slide 4, Point 1, Subpoint 2. “All Students or None”. This means that despite never having downloaded an album illegally, copied a friend’s CD or even listened to music played in an unlicensed venue, students will be forking over $5-10/mo in protection money. Now think about this: $15/mo gets you unlimited music from Microsoft, Rhapsody, or eMusic, legally. But they want $10 simply because SOME students at SOME universities are downloading music, and better to drown them all.

I hope, with every capitalist bone in my body, that no University would sell out its own students for this. I really genuinely do. But I have seen the music industry do some monumentally cruel things to its best customers, and the fact that this proposition is on the table means that somewhere, someone is considering it (Update: Columbia, Stanford, University of Chicago, University of Washington, MIT, University of Colorado, University of Michigan, Cornell, Penn State, University of California at Berkeley and University of Virginia are in active talks, “considering” it). And it only takes one before “precedent” is set and more fall in line. How long before this just gets rolled into our monthly Internet connection bill?

If you find yourself on the receiving end of such a fee, I strongly encourage you not to pay it. Pay your University fees, short the exact amount of the RIAA protection money. Refuse to pay, write a polite but firm letter to your bursar that you don’t download illegal music and feel that being treated as though you were a criminal by your own University is both wrong and unlawful. If the RIAA wishes to bring charges, then bring them in a court of law, not behind closed doors where the accused can’t even hear the charges against them or face their accuser.

One final gem: “Our approach is supported by the EFF, Public Knowledge and many organizations dedicated to network freedom.” Representatives of both the EFF and Public Knowledge have spoken out against this. They were never contacted for comment, input, feedback, or approval. It was just put in the bottom.

So here I am, thinking about the Starbucks business model, and how they could see a 97% fall in gross profit. Let’s take a look:

Starbucks doesn’t sell that much coffee, really. They sell milkshakes and cream and other high-sugar, high-fat substitutes. Like all drug-dealers, they eventually weaned their customers onto the hard stuff. Except that black(crack) coffee doesn’t require the glitz and glamor of going to Starbucks. Most offices give it away for free. Hell, pretend you’re going to buy a Prius and they’ll give you a cup of coffee at the dealership for free.

Starbucks was a part of the golden days of of the Coffee-Rush. People were excited that what was once a bitter, uncomfortable drink could be made delicious with just a few dozen grams of fat and sugar. So an entire generation on the verge of giving up coffee for energy drinks and caffeine pills came swarming back.

But then they went black, and you know what they say. “Once you go black, you never go back.” True enough, people could get their fix anywhere, and suddenly the Starbucks empire crumbled around the bleach-tipped heads of its Baristas. Why go to Starbucks for long lines and bad music when you can get your coffee (even your iced vanilla late) at McDonalds or Jack-in-the-Box for half as much? And sure, throw on an egg and a muffin, too.

Starbucks was a victim of its own success. Coffee became so popular that you could get it anywhere. Technology (paid for, in many cases, by Starbucks) improved to the point where a strung out monkey with no thumbs could brew you a perfect double-soy, half-caff latte with sugar-free caramel and non-fat foam. Even low-end delis became “coffee bars”, and in doing so people sought alternatives.

As consumer choice multiplied, flaws (real or imagined) in Starbucks began to emerge. Everyone became coffee snobs, and Starbucks, once a healthy margin above Folgers Crystals was now dropped to the level of the 4pm re-heated pot at Denny’s. People discussed how the region didn’t have a good rainy season this year, or how they roasted it a little to warm, or not long enough, or too long, or ground it too finely, or any number of other minutia to justify going someplace besides Starbucks. Anyplace, really.

And that, my friends, is how Starbucks was lost. The built a market, and rather than growing with it, acted like they were still wooing customers away from boiling water at home and mixing in a sand-colored powder to get a “cuppichino”, and failing to realize that once you can get a “Starbucks-quality” cup of coffee everywhere, it becomes a commodity. Smug satisfaction is gone, as is the sense that it’s somehow “worth” $3.75.

You know what they could do to fix it? Re-brand. Turn 1 in 10 Starbucks into a “Starbucks Experience”. Lower the light levels. Put in all-leather furniture. Kill the pop music, and stick with low volume ambinet jazz. Carpet everything, and make the machines quieter. Make Starbucks what it used to be, a destination, not merely a vendor. Charge 20% more for the coffee, but use “higher end” beans, for every drink. Use organic milk. Use syrups that aren’t just Tornai’s, or if you do, hide it by putting them in curved pitchers. Limit the crowd size, limit seating. Use soft, overhead lighting above each table and chair. Only let natural light in through diffused curtains, and use double-pane windows to block street noise. Serve coffee at the tables. Allow people to run a tab (even if it’s done thorugh a Starbucks credit-card). Create the impression that this is somehow “above” merely Starbucks, this is a Starbucks Experience. This is a place to be away from crowds, better than the common man. Somewhere that only a certain “class” of customer comes. A sanctuary. Over time, convert all your stores. Enjoy another 10-15 years of astronomic profits, then call me again.

Or just watch your stock price fall until you’re bought out by Proctor & Gamble. Whichever.

I have a less-than-simple financial package. At the moment of this writing, I have two checking and savings accounts with two banks (in mid-transition). I have three credit cards for various rewards programs, a mortgage and an equity line. And a paypal account.

With all this in tow, it is extremely difficult to get a unified vision of what exactly I’m spending my money on, and how to build towards a specific target (say, paying off my equity line by 2013).

Enter mint.com - a powerful online financial tool that integrates with banks, credit cards, even investment accounts, and puts it all in one place. It is read-only, so you can’t truly manage your accounts from it, but that’s just fine by me. I like being able to see all my accounts in one place. I like having a master ledger that spans 5 systems. It is bad ass. I like seeing where my expenses go. I like setting a budget and getting a text message when it is coming up. I like getting an email saying “Your credit card bill is due in 5 days” since the credit card company doesn’t seem to want to send those emails.

One feature I’m sure will improve over time, but that I don’t get a lot of use out of now, is the “savings” section. Since this is their main (probably only) source of revenue, I imagine as the service gains popularity there will many more useful “ways to save”. Right now, I get told that if I switched my United Visa card to a no-rewards Discover I could save $600 on interest, except that I don’t ever carry a balance or pay interest. I want something to look at my mortgage, value of my house, and assorted investments, and say “yakno, you could save some cash if you consolidated your line of equity with a 5yr fixed, low-APR loan from these guys”. That’s something I could get behind.

In the mean time, it is still extremely useful. Seeing how I spend my money is very handy. Everything being in one place is awesome. And oh yeah, did I mention? It’s FREE.

Check it out. They probably have your bank in their system, so it is really easy.

I am a big fan of Amazon. Be it free two-day shipping, solving my girlfriend’s shoe shopping needs, or selling DRM-free music cheaper than iTunes’ locked-down stuff.

About a week ago, I was discussing with my roommates one of the things I really enjoy with Amazon - wish lists. I realize I am notoriously hard to shop for, and so having a place where I can list things I like as I come across them, as well as little descriptions like “any olive oil sprayer will do” is fantastic. I can share the list with friends and family, and remove things as I receive them or buy them for myself. It also helps give people an idea of price, since on many things where you get it can be a huge difference. I mentioned recently how cool it would be to be able to add products from anywhere to my Amazon wish list.

Well, welcome to the future people. Amazon recently launched just such a feature: universal wishlists. I recall seeing sites that did ONLY this in the past. With Christmas coming fast upon us, the ability to send family to a single, non-threatening location like Amazon and say “Here’s some ideas” is great. Also, since I’m a little distance from my family these days (between 500 and 10,000 miles away) they don’t really know what I’ve got, and this helps with the awkward “this is wonderful, but I already have it” problem.

Anyhow, the thing is stupid-easy. It isn’t even a browser plugin, just a bookmark. You add a shortcut up along the top of your browser and whenever you’re on a site, just click “Add to wishlist”. Stores price, image, description, and some notes. Fan-freakin-tastic.

Here, check it out:

http://www.amazon.com/gp/wishlist/get-button/ref=cm_wl_uwl

That’s all for now.

So I’m not really an Apple guy. It isn’t that I dislike their products, or even have a particularly strong opinion on the whole “Now you’re an Apple user” cult that seems to happen. I think it really comes down to me seeing past the advertising veil. They’ve managed to take an industry where you have almost limitless consumer choice and reduce it to “us vs. them”

And they’re great at it.

Who is Apple’s biggest competitor? If you answered “Microsoft”, you’re wrong. But that’s OK, it’s what they want you to think. And they spend untold sums every year to make sure you keep thinking it.

When you really get down to it, Apple competes with other systems integrators and hardware companies; Dell, Sony Computer, Lenovo, HP, etc., companies that are, in many ways, not terribly different from Apple. They take all the same parts (even processors!) and stick them together in the same kind of boxes. They offer a range of similar products at similar prices, dip their toes into other markets, offer similarly built gear, and so on. So why play on a level playing field, when you can stack the odds?

The greatest myth that Apple has maintained is that you are choosing between Apple and Microsoft. This allows them to draw comparisons that feature them in an extremely positive light, and severely limit your choice as a consumer. When you have a problem with your Apple computer, you call your Apple help line, visit an Apple store, or send it to an Apple repair center. Ever try to get Microsoft on the phone to help you with your Dell? Apple marketing has convinced users it is because the software giant doesn’t care about them, and pawns off support and responsibility. Every comparison they make in their commercials builds on the idea that your choice is Apple or MSFT. Because if you were really choosing between Apple, HP, Lenovo, Dell, Sony, Eee, Asus, and a handfull of other companies, you’d pick Apple a lot less. They effectively shrunk the market to two players: Apple and “everyone else”.

Let’s get a quick fact out of the way, because it is difficult to really delve much deeper into this without it. Apple has about 4% of the computer market. That’s it. They’ve heald steady at that number (+ or - 1%) for the last decade. Through all their ups and downs, they’ve never crossed 5% and never dipped much below 3%. They’re a small player. But they have one thing that Dell and HP and the rest don’t: the brand.

Apple has arguably the most powerful brand in computing and consumer electronics to date. They have managed to make their users feel better for using Apple products, superior to those who do not. Take a look at their long-running campaign, the “I’m a Mac, I’m a PC” ads. Have you ever wondered why those ads exist? Is it to introduce a new product? Is it to recruit new users? No. It is to fluff up the egos of Mac users, reinforcing the idea that they are in an elite and select group (one that is larger than it really is), which has somehow seen beyond other computers to the perfection that is an Apple product. They are not just the overweight middle manager in a suit: they are the freedom loving, college-dropout pothead on the right. They are young, fasion conscious, and popular.

Apple ads are also a forum to spread misinformation about competitors and half-truths about Apple. Vista crashes a lot? Sure. Apple is immune to computer viruses? Why not? The ability to run Windows on a Mac is a feature, but the inability to run OSX on a PC is a shortcoming of Windows? Wow, I guess so! Apple commercials are strictly about building an emmotional relationship with the consumer and increasing the preceived value of a product. $2k for a computer you can buy anywhere else for $1500? That’s a hard sell. But $500 to feel like you’ve made the “smarter” choice? Well that’s just a good deal.

I could go on and on, but I’ll leave you with one last point: Apple prides itself on a minimalist approach to design, because complex computers are “scary” and unfriendly. This limits the things you can do with them. But as an entire generation grows up around computers, do you think Apple can maintain “simple is better” forever? Or will an OSX machine seem too “childish” by the time you hit 15? Only time will tell, but I think they have a big problem on their hands in the next few decades. That is if they make it that far.

So I seem to have a terrible problem with eaves-dropping. It isn’t so much that I particularly care about what other people are saying as I have an incredibly low bullshit threshold. So we’re sitting at this restaurant attached to a golf course, and the table next to us contains the three archetypal members of any .COM startup:

1. Young, enthusiastic technology guy
2. Mid-thirties manager / finance guy
3. Older “dreamer” (I think sometimes called a Grey Hair) - lends legitimacy

So these three guys sit down after we do, so I’m privy to this intro: The young guy (probably 21 or 22) walks up and says “Check it out” and proceeds to whip out his new iPhone.

Anyone who starts a conversation with an iPhone should not be trusted to make decisions, recommendations, or give advice of any kind on technology. Note this is not all iPhone owners, but simply those that begin conversations with a device they purchased. They are clearly a “style over substance” user, which is fine unless they’re recommending what YOU do with YOUR time / money, or explaining why they know the direction things are going. These people are followers, not leaders.

So they proceed to discuss their business venture. Here it is: They’re going to release a search engine that pays you. Well, not really pays you, but uses the money they would have paid you to make donations to a charity. And keeps some themselves. Anyhow, they’re going to take Google search results (probably by doing the Google API licensing thing the way Yahoo and others do), and “wrap” them in their own ads, and offer premium placement to their partners. Problem 1: Entering any market with the assumption “If we can even get 1%, that’s billions!”. They then begin to discuss implementation, because clearly this idea is so solid it bears no furhter discussion.

Their basic strategy is to offer advertisers a “tiered” structure. You want bold lettering? That’s extra. You want a green background? That’s extra. Think eBay listings. But cluttering up a search engine. All in the name of “donating to charity”.

They talk about user accounts. Apparently in order to use their search engine, you’ll have to log in. Then they can track your payments and donations and stuff. They’ll also sell your information.

So these guys seem to have completely missed the whole “user experience” angle. They’ve designed their product with their corporate goals in mind first, followed by the needs of their advertisers. No one stopped to think what logging in to a page full of ads and a Google search result would do to a user.

They’d be gone. I predict they’ll be lucky to break a thousand users. Most of those will be gaming the system in one way or another, or will be the advertisers.

So I want to call this a complete failure of an idea. If you want to break into the search market, you need to do one of three things.

1. Deliver “addative content” in a way that has never been done before. Ask.com is trying with their whole “enhanced search” - even Google is letting me pick products, services, maps, local businesses, etc as my possible search results. I don’t know what it is, but eBay listing-style ads where the more they pay the more annoying they get? That’s sure not it.
2. Define a positive user experience. Make sure that when I’m hitting your site I know exacty what I’m going to get. Don’t trick me into clicking ads. Don’t make some half-hearted appeal to “charity”, and don’t pepper me with ads. I’m just going to block them anyways.
3. Deliver better / more accurate results. I put this one last because it actually matters the least. If you can best Google at search results (hell, I have to say I find what I’m looking for faster on live.com than google.com sometimes), you’ll have a leg up. But almost no one will care.

So there you have it. All the ways in which this idea will fail, and the few things they could do to keep that from happening.

That’s all for now. I’ll update you when I hear another terrible, poorly thought-out idea.