Blue Screen Of Duds

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Archive for the ‘Short Notes’ Category

Short Notes: Quantitative Hedge Funds, Google App Engine, DTH, itimes

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I know the Google App Engine just took over the interwebs. We will get to that, but, later. Alpha Magazine has a nice write up (a bit all over the place in terms of direction, but very rich in terms of content) on quantitative hedge funds who marry cutting edge research from various faculties in science and marry them with the normal hedge fund business.

It is quite a long article, but is well worth the time you spend on it, if numbers, markets, arbitrage, learning (artificial and natural), behaviour and systems design are things which make you salivate more than blondes and brunettes. In a somewhat-related topic we have a fascinating entry on search algorithms that also mentions Pareto in the same breath. Most of the math in it flies like a supersonic above my head (confession time, I absolutely suck at math, go figure!), but do stick with him till the point where explains why there is no “best” search algorithm.

On to Google App Engine (finally!). If Google can bless this with the levels of reliability that they are known for, it will have the same effect that Ruby on Rails has had on start ups, by making bootstrapping of products so easy that it becomes absolutely irritating. David Recordon believes that the App Engine will provide apps that use it with a shared sense of a user, which is one of the major problems that face every socially-enabled product these days. Krzysztof Kowalczyk adds to the existing commentary and says it is the first, true internet operating system. But I do wonder about one thing. Everyone is very bullish on EC2 and GAE from the entry barrier point of view, the thing that remains to be seen is the exit barrier and how difficult it would be to leave such a framework, both in terms of cost and effort.

The last word on the GAE launch has to go to Michael Arrington, who can’t ever be expected to sit out a slugfest, especially one that draws traffic to Techcrunch on what is not really its strong ground – technology. He makes a post on the website about how Google has pulled down one of the first apps, HuddleChat, built by one of the Google employees showcasing the technology from a product perspective. He calls it “censorship” and the easily-inflamed community sets itself alight (rather predictably) over it, while the simple reason behind the move has no more logic behind it than avoidance of bad PR karma, which any company would want to avoid during such a major product launch. The move, by itself, does not make or break the world. Get over it (and yourselves, too) guys.

Meanwhile, all is not well in DTH land in India. The two leading players — Dish TV and Tata Sky — are said to be raking in losses to the tune of Rs 1400 crores (combined) in their quest to do a market land grab first and aim for profitability later. The current cost per user is Rs 1600 – Rs 2300 for each new subscription and the newer  MPEG 4 set top boxes that will hit the market soon are expected to increase the costs and losses even more.

Interestingly, Dish TV seems to think the tipping point where the ARPU will start going up, instead of down, is at the 7-8 million subscription mark. Which would mean that with 3 million subscribers, DIsh TV itself has to double its market penetration before margins start working in the opposite direction for them. That could easily see them doubling current losses in the coming years and that alongside other costs could see their current Rs 300 crore loss going up to 700 crores. In short, this won’t be a fun competition to be in, if you wind up being second-best.

In one of the last links for the day, we have David Manners deviating from his usual domain of semiconductors posting a note on how bad T5 at Heathrow is, which should be sent to every person who is fond of doing the customary India-bashing bits under the pretext “this just would not happen it the west.” The price quote from the post is the captain saying: “We’ve landed at Heathrow which is in chaos”.

Lastly, for today’s silly Twitter apps update. Grouptweet is a Twitter application that allows you to send tweets to a group of people. Even better is the blog Twitterholics, which will allow you to track such inane products without having to leave the comfort of your browser tab.

p.s: Oh yes, Indiatimes has launched their social networking website (finally!). Looks like TIL now has two schools of thought: the IIS/.Net based in-house products and the LAMP-stack based outsourced products. Then there is the Java stack that powers the e-commerce offering, the entirely outsourced email offering. Oh well, this is Indiatimes after all.

That said, it is a very clean implementation and if you want to make friends with half of the staff at iWorld Gurgaon, this is the place to be at! Product-wise this looks like something that was put together after cobbling together everything they could find on other products. And for those who are wondering about the email part in it, it looks like a re-implementation of the current whitebox email solution provided by Indiatimes.

I guess the thinking is that there are way too many inactive/spam accounts on the main Indiatimes email framework, this could be a clean/fresh start towards having a better user base that can be sold for more to the advertisers. Let us file this one away in the “social media will buy me lunch (dinner and next day’s breakfast too!) department.” (hat tip: Contentsutra).

Written by shyam

April 9, 2008 at 12:38 pm

Short Notes: Zapak, online ads, Twitterlocal

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Indiantelevision.com has a nice interview with Zapak Digital Entertainment’s COO Rohit Sharma about the company’s future plans, the $100 million investment in Reliance Entertainment by George Soros and other facets of the business that the company is involved in. While it may not be the most stunning or revealing interview ever done, it is also refreshing in terms of the lack of hyperbole involved. You always have to appreciate something like that.

Key takeaways include: 70%-75% market share and 4 million users for Zapak. No mention of the usage frequency, it looks more like an aggregate. Should have been interesting number, if he should have mentioned the daily/regular users. They are looking to build up capacity in their gameplexes up to 10,000 by the end of 2008. Subscription revenues via MMOG titles to start in May. Zero in-house development of games.

Advertising segment action continues with Federated Media being now rumoured to have taken on $50 million in a round-B funding fishing expedition. Valuations currently are very much like a LSD trip, everyone sees a different colour from another, led mainly by the fact that there are fewer exits that are showing up now, and as you can imagine not all exits are going to be profitable or successful, so it eventually ends up being a cozy little circle in which the VCs and investment bankers are going to increasingly push up valuation to get better exits. How will all that work out? You guess is as good as mine. We just don’t know yet.

And all is certainly not well in VC-land. The wise men now agree that earlier puff pieces about an increase in the size of funds making a beeline for India may NOT hold true if the US continues to be as volatile as it has been of late. This maybe actually good news, because that should at least prevent the 60,000th ‘social-networking-site-with-a-difference’ from getting funded as a result.

Jeremy Liew, meanwhile, posts a good short one on Andrew Chen’s take on forecasting sales for web start ups. Both are good reads irrespective of whether you are a start up or not.

Meanwhile, in related advertising news, there is a rumour going around that Tribalfusion is up for sale. There are very few independent players left now in the agency market. Considering how almost of all of them got bought out, you should have opted to make a career running an online advertising agency when your parents asked you much earlier in life, “son, what do you want to do in life?”

Now for today’s ZOMG! section. Apparently (hold your breath, bring on the drum roll and other theatrics!), it is friendship that is driving social networking in India! I am shocked. No, more like SHOCKED! Oh, the horror, the awe! I would not be too surprised if that is the case everywhere. Pointer to the pundits: Robert Scoble and Jason Calacanis are not your typical consumers of social networking.

In music-related news, rapper Jay-Z too bails out from the sinking-on-steroids ship called the record label and signs up with Live Nation for his future releases much like Madge and U2 did a while ago. If they were to have had put some kind of tracking on the memo sent to the labels, that running after piracy and using litigation as a means to profit does not actually get you sustained profits, it probably would show that it is still stuck at the sender’s end. Hint of the day: CD sales are dropping like the stock price of Bear Sterns did on the last couple of days before being picked up by JP Morgan, while concert attendances and profits are booming.

Speaking of Bear Sterns, Henry Blodget gets Goldman Sachs to comment on the Bear Sterns episode that they did not knowingly press the forward button on the tape labeled “How to wipe out an investment bank in a week: the Bear Sterns edition” with their version of the story.

Lastly, how can we have a day pass without having yet another Twitter app being released into the wild? Latest on the list is Twitter Local, which allows you to track tweets by their location via an RSS feed. Now, what could be an interesting use case for this? Oh, someone could pick up the feed and automatically publish that feed via a Twitter account. I mean, whodda thunk that?

Effectively, now you can track all Tweets to within a “1 mile” range of the location specified by you. Imagine the progress that humanity will make as a result of this. Now, not only can I hear my neighbour sneeze, I can also track that sneeze on Twitter when he tweets it. It just absolutely warms the cockles of my sometimes non-existent heart.

Written by shyam

April 4, 2008 at 9:03 am

Posted in Short Notes

Short Notes: Scalr, funding, job profiles et al

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Well, it was just a matter of time before it had to happen. Someone has finally cobbled up a a fully redundant, self-curing and self-scaling hosting environment utilizing Amazon’s EC2. This will have further reduce the entry barrier and time-to-market for small (well funded) start ups to deliver quick and probably lethal blows to the bigCo internet set ups. On the downside, we’ll get to see more Ruby on Rails apps that are made, well, just because they can be made. BTW, it is very Web 2.x compliant too since it drops the ‘e’ and is called Scalr.

Venky Harinarayan, co-founder of Kosmix, brings yet another perspective into the “Funding: why, when and how much?” question on Alt Search Engines. It is a nice read with ample stress on the key issues of valuation (internal, than the overhyped external projections), dilution and timing.

This one is a bit old, but what Theo Schlossnagle has written about his job profile is what a lot of people like me around the world will readily identify with. It is hard to give it a name, but it is a job, a mission, a career: all without a path or a name. And speaking of jobs, Yahoo! Music VP, Ian Rogers has left the company (as expected), to join a start up.

I honestly think the end of the old time internet corporations are very near due to their sheer bulk and lack of agility. They will surely exist in the B2B space, but as far as consumer-facing products are concerned, don’t look at them for the next big idea. Of course, M&A is always an option for them, but in 9/10 cases, being merged into one of those ends up killing the strengths that a smaller company brings to the table.

Parting shot: Teaching a six-year-old about RDF triples.

Written by shyam

April 3, 2008 at 8:19 am

Posted in Short Notes