Feel the pain

It was reported today that United Capital CEO, John Devaney, whose Horizon ABS Fund has been hit hard by subprime mortgage woes, is putting up for sale his 142-foot yacht for $23.5 million and a second home for $16.5 million.

Times are getting hard.

posted by John Wilson @ 11:15 AM Permanent Link ,

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A video is worth a 100 words + picture

One of the challenges with for sale ads in print is that it's sometimes hard to do justice to an item you are describing. Adding a photo helps but a flat 2 dimensional view still isn't quite there.

That's where online site have an obvious advantage i.e. ability to show video.

Yet few of them utilise this. This is why Hotswap, a recently launched used car site might do well. Aside from being a slick site, it allows sellers to post a video of their car. At last, a chance to see right round the car beforehand. It's such an obvious facility to provide. Admittedly it places a higher stress on the facilities of the site, but there is not exactly a shortage of video sharing sites looking for a raison d'etre.

Moreover, used cars sales is already proven in the online as ebay found to its surprise. Best of all, because they are a high value item, the site can generate reasonable fees.

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The lending squeeze begins

I wrote recently about how the a squeeze in debt markets could have profound effects on the leverage world of private equity. Well, The Times carried a story yesterday about the proposed EMI takeover launched by Terra Firma. They suggested that Citibank, the principle bank lender may be withholding support from extending the offer deadline to shareholders, only 26% of which have assented to the deal.

This deal is not alone, with the Boots financing deal also being reportedly renegotiated.

The sheer backlog of deals underwritten and waiting to be syndicated — about $250 billion (£121 billion) in America alone — has prompted several banks, including Citigroup, JPMorgan and Deutsche Bank to refuse to lend any more money to private equity until they have cleared their books of previous financing commitments.

Leaving aside the impact on EMI of yet another failure to secure a buyer, and the embarassment to Terra Firma, this backlog will have a material impact on the market. Notably, deals will become more expensive rendering some "marginal" ones unattractive. It will also introduce caution amongst sellers about whether buyers actually have the means to finance the deal. It also indicates that investors to whom banks sell on the debt are becoming more cautious with knock on effects for liquidity.

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posted by John Wilson @ 10:16 PM Permanent Link ,

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Livening up test cricket

I spent a fabulous day in the Pavillion at Lords on Sunday watching some great cricket including Kevin Pieterson's hundred and Sachin Tendulkar's last innings at Lords. The game was fascinating, with India fending off England's attempt to win the match.

The game sadly (for England) ended today in a draw with bad light halting play, with only one Indian wicket remaining. In part England were at fault for a slow over rate - a faster over rate would have given England more opportunities to bowl India out in time.

JP Rangaswami had gone to the game on Saturday (we'd hoped to meet up during the Test but it was not to be) and I know he will have been mightly relieved that India held out. In blogging about the game here, I was most entertained by his suggestion how to liven up a test match, which he submitted to a national paper.

someone in the FT asked the question “If you could introduce one new rule, or amend an existing rule, to bring the fans back to Test cricket, what would it be?” or words to that effect.
My entry was simple. Introduce a new rule. Henceforth, a batsman is not allowed to have faced more than six dot balls in succession, he must score off the seventh. In addition, he must score a boundary within every 24-ball sequence. If he fails to do either, he is given out for “Abusing the audience”. [I guess there weren’t that many entries, because I won the competition]

Nice idea JP, but it's just not cricket. Then again, they said the same about 20/20 when it was mooted.


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When buyers go crazy

A key element of some of the economics theory I studied at university was rational behaviour on the part of individuals and markets. This was propped up with an assumption that everyone had the same information - perfect markets. In the real world, markets can often be driven to some temporary irrational behaviour, either through imperfect information or exuberance.

It was interesting to read a report about a study on ebay by Ulrike Malmendier, an economist at the University of California at Berkeley, which found that consumers didn’t always buy goods at the best deal.

In one example, 166 auctions were tracked offering "CashFlow 101," a board game. During the seven-month trial, the game's designer sold the box set on his website for $195. Meanwhile, eBay sellers usually offered an opening price of about $45 and set a one-click, "buy it now" price of about $125.

However, some bidders grew so enthusiastic about winning the auction that they lost sight of the "buy it now" price, sometimes offering more than $185. In 43 percent of the auctions they found that bidders ended up paying more than the 'buy it now' price.

In a different study, Tanjim Hossain, an assistant professor at the Hong Kong University of Science and Technology posted his own controlled auctions. He offered identical items eg CDs, but played with the specifics of the sale. One copy would start at $4 with free shipping. The other would open at 1 cent but charge $3.99 for shipping. Either way, the initial cost was $4.

But bidders didn't see it that way. On average, the low-cost, high-shipping auction attracted more bids, more bidders, and 25 percent more money.

The least startling revelation was that buyers seem to favour auctions with more bidders. People will always take comfort from an item appearing to be popular, as it suggests this item may represent a great deal. Likewise being the first bidder is uncomfortable since it means you have to "tip your hand" and you may find yourself bidding alone.

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Harvey Goldsmith - Wise entrepreneur

In his evidence to the Parliamentary Select Committee on ticket touting, Harvey Goldsmith, the renowned promoter who recently had a TV show for entrepreneurs, said

Mr Goldsmith: We want to outlaw the whole secondary market. A ticket is currency. I am not aware there is a secondary market in pound notes that you as MPs endorse.

Hmmm. Do you think someone should drop him a note and let him know about the FX market, the interbank deposit market, the swaps market............ He must have a nightmare going abroad at present.


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London gets free wifi

Coming shortly after The Cloud launched their wifi network in the City of London, London is getting another wifi network, but this one is to be ad-funded rather than subscription.

Being offered by free-hotspot.com and MeshHopper who've partnered to create online-4-free, the service will offer free Wi-Fi access along the Thames River for 22 kilometres from Millbank to Greenwich. This new service will not only provide free Wi-Fi Internet access in hotels, restaurants, cafes and offices along the riverside, but also to people in boats on the Thames.

The free Wi-Fi service will be supported by sponsors, and users will be asked to watch a 15-30 second advert in order to obtain 15 minutes of free wireless Internet service; more adverts will be delivered each 15 minutes. Those who may want to bypass those ads need to sign up for the service provided by MeshHopper.

The free service offers download speeds of about 256kbps, while the pay service offers download speeds of 500 kbps -- equivalent to the speed of modern cellular data connections.

Free-hotspots operates about 1,500 small networks in locations across Europe.

Coverage info can be found here and below is a map showing reported coverage area.

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posted by John Wilson @ 11:07 PM Permanent Link ,

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On your bike, Monseur

Springwise reports on an amazing new scheme that has just launched in Paris, following on from a similar one in Lyon.

This weekend, Paris placed over 10,000 bikes in just 36 hours, launching an ambitious bike sharing system that is meant to 'lead a revolution in the way Parisians move around the city'. Dubbed Vélib' (from velo + liberté), the program aims to help reduce pollution and keep the people of Paris physically fit.

Customers can pick up a bicycle from one of 750 self-service points. If no bikes are available, renters are directed towards a well-stocked point nearby. After identifying themselves and providing credit or debit card details, users can take out a bike. A day pass costs EUR 1, allowing users as many rides as they like, provided each trip is less than 30 minutes. An additional half hour is EUR 1, with prices climbing for additional time used; the pricing model is aimed at encouraging quick turnover. Bikes can be returned at any service point. Once all 1,451 are in place (end of 2007), the nearest service point will never be far off — one every 300 metres, which means they'll be 4.4 times as densely distributed as metro stations. The number of bicycles will also be doubled, bringing the total to 20,600.

The sturdy grey bikes come with a metal basket on the handlebars and are heavier than standard bicycles, built to withstand heavy use. In line with the program's green image, Vélib‘ maintenance staff get around town on 130 electrically assisted bicycles. A barge with 12 stops along the Seine will pick up bikes in need of major repairs. Cleaning staff drive electric vehicles and use rain collected on the roofs of JCDecaux offices. Like a similar scheme in Lyon, where 10 percent of the city's population has a subscription to the local sharing scheme, Vélib‘ is operated by outdoor advertising giant JCDecaux, which is footing the bill in exchange for exclusive rights to 1,628 Paris billboards.

I'm astonished that London Mayor, Ken Livingston, hasnt already adopted this one for the City. It boast green and health benefits, as well as transportation benefits. It may be that Ken doesn't have billboards to trade, but I'm sure that there are other outlets e.g. the bikes could carry adverts on them; scheme members could agree to receive adverts. The journeys can easily be paid for via mobile phone or oyster cards or at one of the congestion charge pay points.

There's definitely a business opportunity here somewhere.

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posted by John Wilson @ 10:41 PM Permanent Link ,

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eSpew - Another music search engine to make record companies sick

Not as slick as Seeqpod, but similar in purpose, eSpew is devoted to music search. You can search by artist or song and it will retrieve results that you can either play in an eSpew player or download.

Again, the legality of the service is debatable. Is it radio or is it search? Are royalties chargeable on this and if so on whom?


posted by John Wilson @ 10:49 AM Permanent Link ,

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You say "Show me the money", but how much is enough

Will Price covers a recently popular theme in this post regarding the optimum amount of money to raise. Whilst many contend you should raise as much as you can, those with a marketing bent advise that it's better to show a path of increasing valuation in each round.

But how much is typically raised in the various rounds?

Will refers to Fewnwick's recent report on trends in venture capital which reported that the median valuations for A-D rounds were $5m, $12m, $23.5m, and $41.71m respectively.

Patterns and data suggest that for software companies an $8-10m "A" post appears to maximize the probability of a healthy B round.

What you can't ignore though is being ready with a sensible answer to the question - "So how do you plan to use this funding?".


posted by John Wilson @ 9:17 AM Permanent Link ,

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Whosoff - the free company holiday/sick chart

Every company with a few employees or more has some sort of holiday chart to provide visibility about who's away when - sometimes these are big wall planner charts, or they can be online calendar systems.

If you are in a company with a corporate intranet, one of the first applications usually developed is a holiday request process that routes requests for authorisation plus an absence recording system.

Well, Whosoff has done exactly that but for free and on the web - site lives off ad revenues.

You enter your employee names, their holiday entitlement and any details of employees that may not be of concurrently. Identify who can authorise holidays for whom, and the system uses emails to route requests around, tracking the responses.

The site also enables sick days to be recorded and interestingly this information is transparent to most people it appears, thereby making it very evident who is always off on Monday am after a weekend away.

They've even incorporate national holiday calendars and departmental structures.

Neat idea.

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posted by John Wilson @ 11:25 PM Permanent Link ,

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Stay tuned for an excellent online radio site

Tun3r is a really clever online radio station tuner. Simply move the dial across the radio station thumbnails to select a station or name the genre you're looking for and allow Tun3r to highlight relevant thumbnails for you to listen into.

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Mainstream TV audiences are too big for the internet right now

MSN has apparently broken the record for the most live video streams, reaching over 10 million streams with their online coverage of the Live Earth concert.

What's notable about this is how those audience figures compare with traditional TV viewing figures. In the UK, popular shows regular pull over 10 million viewers. The Live Earth show allegedly reached several hundred million concurrent viewers via traditional and satellite broadcast.

Whilst the internet makes it easy for people to watch recorded programmes whenever they want and hence reduces the likelihood of concurrent viewing of a single programme, the same number of people watching different content still places a hefty burden on the internet distribution infrastructure. Were TV audience to flip onto internet delivered TV today, I rather suspect it would be a frustrating experience for all concerned. Moreover, I suspect MSN threw a lot of technicians at the Live Earth broadcast because of its' scale. As such, we are definitely in baby-steps territory.


posted by John Wilson @ 11:06 AM Permanent Link ,

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AllofMP3 is dead - oops, it had babies.

Matthew Ingram has a post about the shutdown of AllofMP3, the Russian download site that had 6 million users. It had offered tracks for a few cents, based on their file size.

The site had become a cause celebre for the USA. U.S. Trade Representative Susan Schwab said last year "that if Russia wants to join the WTO, they should shut down the pirate music website [AllOfMP3] that is robbing U.S. recording companies of sales." Funny how the USA takes notice of the WTO when it affects their country, but not when they are found in contravention ie online gambling.

However, as Matthew and Torrent Freak point out, the beast has grown new heads. MP3Sugar and Mp3Sparks are but two Russian sites offering an identical service. Barriers to entry are low and shutting down one site and opening another identical one under another name is a relatively trivial exercise, aside from redirecting traffic. Moreover, the Russian Government can reasonably claim to have complied WTO requests given that the complaints named a particular operator.

posted by John Wilson @ 8:14 AM Permanent Link ,

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Spinvox makes Newsnight

Marlow (UK) based Spinvox got an 8 minute slot on tonight's BBC Newsnight to provide an insight into Spinvox and their aim to be the next "billion dollar" company via a stock exchange "flip".

Christina Domecq, CEO, talked about a range of issues
- how hard it was to raise the first £500k
- that she felt it was hard raising money in the UK, but felt simple good ideas (like hers) would always find investors
- how operational delivery was the key to the company's success

Also featured was Julie Meyer, CEO of Ariadne Capital, who acted as their early investor/advisor. Julie was praising the fact the many investors have done trivial due diligence because they believed in the CEO.

Christina informed the viewers that presently they have 140,000 users and that 12 major network operators including Cincinatti Bell have signed up. She added that she expects to have 10 million users in a year's time.

They have now raised £30m from VCs and Christina, in response to a question, suggested saw Spinvox as being the next Skype.

Her final note was that she believes the next big thing will be voice posting of blogs, using Spinvox of course.

Funnily enough, Spinvox was one of my first blog posts and has been my highest read post.


posted by John Wilson @ 11:13 PM Permanent Link ,

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Get your friends round on Friend Wheel

I long wanted to uncover a mechanism for seeing which of my friends/contacts is connected to which others on LinkedIn, but the site just makes it to hard - you have to go through each one individually and there is no way I'm even going to try doing it manually.

So it was with some delight that I came across Friend Wheel, which maps the connections that you have on Facebook and their links to each other. Mine is below.

As you can see, my Facebook contacts clearly split into so notable clusters (or none at all).

What a fabulous tool for a bunch of reasons
- when planning a party, you can easily see who already knows who.
- you can see relationships you perhaps never knew existed
- you might introduce friends to each other who you think would hit it off

C'mon LinkedIn, kindly keep up.

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posted by John Wilson @ 10:42 PM Permanent Link ,

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Goliath v Goliath

The New York Times is reporting that Universal Music Group has decided to not renew their annual contract with Apple to distribute their music on iTunes. Whilst Universal may still offer music on iTunes on a per-artist basis, Apple won't have access to the entire catalogue. Moreover, Universal can pull out whenever they want since they won't be under contract.

Crazy thing is that neither side would appear to win from this, never mind the general public - this is a large chunk of iTunes library vanishing, but also represents a large outlet for Universal. More significantly, if you are an iPod user, this may deprive you of Universal artists from your playlist on your iPod, unless of course you either elect to buy a physical CD in order to transfer (or turn to illegal download options).

Could this be Universal simply flexing its' muscles to extract a better deal from iTunes, which could take a variety of forms? Is it a retaliatory or pre-emptive strike?

Manufacturer v Distributor. A battle for control or survival?


posted by John Wilson @ 9:53 PM Permanent Link ,

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SeeqPod is a great discovery for music lovers

I really like Seeqpod which is a new music search engine with results delivered as “playable search results lists providing results from across the web. Audio and video results are played inside a slick music player.

As well as listening to the music for free, you can add tracks you find to a playlist, share it with others or embed the track on a site.

There is also the option to “discover” related artists based on your current results ala recommendation engine, similar to Pandora, Last.fm or Yahoo.

This is a really great app, and developers will love it to because it has been launched with an api allowing you to retrieve recommendations, as well as search results.

Interestingly, SeeqPod clearly consider themselves outside the scope of royalty payments because they are not hosting the tracks, merely acting as a search engine directing you to content made available elsewhere. For anyone from the RIAA, it may provide a useful snooping tool on anyone illegally publishing music on the web, but in the meantime it's definitely worth checking out.


posted by John Wilson @ 9:08 PM Permanent Link ,

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Fuel to the audit fire

The Econmist has a report that PricewaterhouseCoopers has withdrawn 10yrs of audit reports from the Russian oil company Yukos that was declared bankrupt last year after falling foul of tax authorities who imposed crippling tax penalties.

Leaving aside the absurdity of being able to change your audit opinion retrospectively, one wonders if investors might now have a legitimate claim against the firm for damages. After all, they have effectively admitted their opinions were wrong over a prolonged period. Moreover, they insist that this change of heart was Government inspired/encouraged/influenced, so it is their own decision.

posted by John Wilson @ 10:51 AM Permanent Link ,

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I think this online audio search app looks good - Hearhere

HearHere™ is a new search facility soon to be released by Pluggd that lets you quickly find the portions of an audio or video podcast that interest you. The search tool allows you to specify terms to search for and then utilises speech recognition and patterns to identify points in an audio file that match your search terms.

So, searching for “Lily Allen” in a podcast about Music will return a “heat map” highlighting places in the file that may be relevant, with colour coding to indicate likelihood of a match.

Subject to its' accuracy, it means that instead of listening through an entire audio file to find the relevant bits, you can search for them and jump right to what you’re looking for.

HearHere™ is only available for audio files, but apparently they will soon launch video search as well, called SeeHere.

This could be incredibly valuable to many groups, particularly if search could be deployed across multiple files simultaneously i.e. find relevant bits amongst my audio library. I can particularly imagine research analysts using this on recordings of corporate/investor conference calls to highlight places they think are relevant to their clients & sales traders.

Sadly, you can only try the demo tracks, rather than your own files at present.

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