Mark Evans

Vonage: More IPO Pain

The after-math of Vonage's IPO has taken a new and strange twist amid a report in the New York Times that Vonage is willing to reimburse underwriters who take a financial hit if Vonage customers refuse to pay for shares allocated to them. While a deal is supposed to be a deal, some of the 10,000 Vonage customers who enthusiastically bought into the IPO can't be happy that Vonage shares have tumbled more than 25% from their issue price of $17 a share. I guess it's a nice, low-cost goodwill gesture by Vonage to cover the costs of the brokerage firms that could be left holding the bag if investors balk at coughing up for their shares but it demonstrates just how badly the IPO came off - as well as putting the spotlight on who actually invested in the IPO and why. Can anyone explain to me why Vonage was able to raise more than $500-million despite the fact its balance sheet is awash in red ink and it competes in a competitive market with low barriers to entry? For more insight, check out Michael Urlocker, Silicon Valley This Morning and IP Democracy.

Update:  Vonage now claims it does not plan to buy back shares allocated to customers who want to renege on their stock purchases following the stock's tumble over the past week. In a statement, Vonage said its 10,000 customers who bought shares are "obligated to purchase their share allocation from the underwriters".

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Blogosphere Navel-Gazing

There's enough comment about Tim O'Reilly's decision to trademark "Web 2.0" (his response to the controversial issue is here) but the hailstorm of criticism it generated demonstrates how the blogosphere loves to chatter about itself among itself - something one could describe as cyber-navelgazing. The amount of time and energy devoted to whether O'Reilly has the right - or was right - in making a claim onWeb 2.0 (which he didn't invent) has been astounding but perhaps no one should be surprised by it. The blogosphere (and I'm a flag-waving member) loves nothing better to talk about what about people within the blogosphere are talking about to the point where it becomes a vicious circle. Is this a bad thing? No, because it demonstrates how enthusiastic and engaged people are about what's happening. But the O'Reilly firestorm does put the spotlight on one of the blogosphere's annoying habits that many of us who sit very close to the "fire" (or as my friend, Stuart MacDonald says, those us so close to trees we have bark marks), are often blissfully unaware about.

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Online Ads: Up, Up and Away

It looks like the advertising community has not only embraced the Internet but giving it a great, big bear-hug as online advertising in the first-quarter jumped 38% to $3.9-billion from a year-earlier, and 6% from the fourth-quarter, according to the Interactive Advertising Bureau and PWC. In a classic case of understatement, PWC's Peter Petrusky said “The Internet continues to shape the media landscape as more advertising dollars are going online. It is abundantly clear that marketers are seeing a compelling opportunity to leverage the Internet as a powerful medium that drives both branding and sales results.” While paid-search continues to account for most online ad spending (and lines the coffers of Google), video is gathering a growing momentum as advertisers look to combine the branding power of television and the measure-ability of the Web. Before anyone gets too excited about online advertising, it should be noted it only accounts for about 5% of total spending. Still, the market is growing and it's having a huge impact on the business models of newspapers, television broadcasters and radio stations. My industry - newspapers - need to jump hard on the online advertising bandwagon by providing clients with opportunity to place advertisers around relevant content. And the sooner newspapers forget about trying to sell online subscriptions, the better because Google News killed that business model a long time ago. The Guardian has a story about how online advertising in the U.K. will surpass newspaper advertising by the end of 2006. Wow!

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The "Q" is Cool

Kevin Restivo, my editor, Ian Karleff, and I just got a sneak-peek at the Motorola "Q", which will be available in the U.S. this week through Verizon, and, hopefully, for sale in Canada within the next few weeks. In a word, it's extremely cool. Okay, that's two words but the "Q" is the closest thing to the all-in-one device that I've seen. The quality of the screen for video is impressive, the MP3 player sounds great, the Web browser is real a Web browser (as opposed to the Blackberry's continued so-so efforts), and it's super-thin. One of the few downsides is the "Q" has pull e-mail, which means you have to fetch e-mail rather than having it automatically delivered but that's not a deal breaker. All in all, the "Q" has few negatives so I expect it will resonate with many consumers who have found the Blackberry too expensive, too geeky or unnecessary. Whether the "Q" can meet Motorola's aggressive sales targets (750,000 units in the first 90 days, 1.5 million in the next 90 days and three million in the three months after that) depends on how it is priced by carriers,  the cost of data plans and whether any bugs emerge such as inferior telephone service/quality. So will the "Q" be the next Blackberry-killer? I doubt it because there will be power users that want the reliability of the Blackberry's mobile e-mail and have no need for the frills of the "Q". But I do think the "Q" will do very well because it appears to be very user-friendly - kind of like a Blackberry for the rest of us. For an extensive review on the "Q", check out Geek.com. My column in the National Post about the "Q" can be found here. Update: Here's the Verizon ad for the "Q".

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Our Weekly Podcast: Vonage, HUM, eBay-Microsoft

We're a bit late with this week's podcast after experiencing some technical issues. We tried to do it using Skype and Pamela but the sound quality was terrible, which might have had to do with the fact I was on a wireless network. This week, Kevin and I took a look at Vonage, whose IPO bombed when it started trading; the strange takeover of Hummingbird Ltd; and the speculated mega-deal between Microsoft and eBay.
Update: I was recently interviewed by Stephen Hayward about all kinds of things tech. His podcast can be found here.

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Mac Woes

I'm trying out a beautiful, new MacBook (black) - thin, lightweight, nice screen. It's frustrating, however, that I can't use many of my favourites applications such as FeedDemon, Google Talk and Roboform.

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How 'Bout BeerCamp?

If you think it's just all fun, games and venture capital in Silicon Valley, you're probably right. Check out Winecamp, an "ad hoc, un-conference" (wonder if Tara Hunt or Riya, which sponsored the event, will trademark that fancy-dancy description!), where participants spend a weekend in Stockton, Ca. to "share and learn in an open environment" and presumably drink copious amount of fine California wine. Maybe we can do this kind of thing in Canada? How 'bout BeerCamp or HockeyCamp or SnowCamp or MapleSyrupCamp or BlackFlyCamp. Come on, if we really want to get the high-tech community going here in the Great White North, we need to think out of the box - just like those crazy Californians.
Addendum: Just to rub it in, here's Tara's take on the weekend.

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Who's a Journalist?

As a newspaper journalist and a blogger, I'm fascinated by the decision made on Friday by a U.S. Appeals court (Apple vs. bloggers who allegedly disclosed the company's secrets) that online and offline journalists are equally protected under the First Amendment and there is “no workable test or principle that would distinguish 'legitimate' and 'illegitimate' news”. The decision opens a huge can of worms about who's a journalist at a time when everyone can be a “journalist” by simply starting a blog or Web site. At the mesh conference (which I helped organize), one of the challenges was determining who warranted media accreditation. At an extreme, one could argue anyone who has a blog could have been given accreditation if you believe they provide editorial insight and “news”. Of course, this policy would kill the conference business because most people attending would attend for free as “journalists”. So how do you define a journalist? Do they have to be employed by a news organization and, if so, how do you define a “news organization”. From a big picture perspective, what we're is seeing the democratization of journalism - taking the business from something done by a small elite to an activity in which everyone with a blog, podcast, cell phone, etc. is a journalist. Look at what community journalism sites such as NowPublic.com are doing by creating large armies of news gatherers around the world. NowPublic has plans to leverage this “asset” by selling the services of its community journalists to mainstream media organizations on a licensed/pay-as-you-go basis. The “who's a journalist/who's not” question is just one of the many challenges facing major media organizations as they grapple with how to survive/evolve in a world where an increasingly amount of information is delivered and consumed on the Web. It's bad enough they have to figure out ways to make money (advertising? subscriptions? value-added services?) online without having to worry about the “competition” for readers and advertisers is a guy/gal producing high-quality insight and perspective on their blog/podcast. At the mesh conference “Who's a Journalist?” was one of our panel topics but the question could easily be the subject of a full-day event.
For more insight, check out Dave Winer, The Blogging Journalist, Jeff Jarvis (who provides several excerpts from the court decision) and The Volokh Conspiracy.

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Why the Fascination with the Blackberry-killer?

My column in the National Post this week is about Motorola's "Q", and the strange obsession people have with the hyping the next Blackberry-killer. The Inquirer has an odd story about a new Blackberry-killer to be unveiled soon that will be sold through ISPs. Blackrimglasses. has some comment on this mysterious device, while Om Malik puts some weekend fun on the issue by office an online poll on the next Blackberry-killer.

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Early Morning Thoughts 'bout Web 2.0, Vonage, MySpace

After much thought and a lot of reading, I'm even more convinced Tim O'Reilly is dead wrong in his efforts to trademark “Web 2.0″, and the people who are supporting him (particularly the Silicon Valley crowd) are nothing more than apologists who can't see the forest through the trees. Maybe O'Reilly invented the phrase “Web 2.0″ or maybe he didn't - but nevertheless it's now an integral part of the high-tech lexicon so  trying to put a legal claim on it is a mistake. Furthermore, the real value in “Web 2.0″ for O'Reilly is not owning it but how many people closely associate it with him. This gives O'Reilly cache and status as one of the Web 2.0 thought leaders. And shame on the U.S. Patent and Trade Office, which has apparently never met an idea that it won't patent or trademark.
  Update: It appears that Darcy DiNucci may have invented “Web 2.0″ given it appeared in a paper written in 1999. Hat tip to Rob Hyndman, who has excellent post on Web 2.0 that combines his expertise as a lawyer, his passion for the Web and his involvement with mesh, which I suspect we won't be calling “Canada's Web 2.0 conference” anymore.
  Okay, Vonage ended the week down at $13.20, down $3.98 from its IPO issue price. The company can't be accused of leaving money on the table! But what I want to know is who bought the IPO and why. I mean, there was so much criticism surrounding Vonage's large losses, uncertain prospects and the fierce industry competition that you would think investors would be cautious about jumping into the fray. You wonder how many Vonage customers took advantage of the “opportunity” to buy into the IPO on the belief that a company offering low prices would equate to a good investment.
   Finally, one of the most intriguing notions of the week is Scott Karp's contention that the downturn of MySpace has started. Scott's thesis is based on Alexa data and chats with people who study how teenagers behave (if that's even possible!). Mathew Ingram has a nice take on Scott's idea. He agrees with Stowe Boyd that MySpace is like a hot nightclub where people are willing to stand in long line-ups to get in - only to quickly abandon it when something new comes along. A good read is Mathew's column on social networks and their hunt for revenue.

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