The more I read about Jason Calacanis, the more I start to like him, despite being pretty rude to him in the past. That seems to be the trigger that makes him say something that completely resets the count, though. I’ll try to spare you an entire recap of Jason’s post about Twitter today. In summary, he gives 3 examples of why Twitter is en route to becoming a billion dollar company, despite not having a revenue model.

I guess if you’re running on investment money, it’s not that big of a deal. I do feel, however, as the CEO of Mahalo, that I should give Jason some advice; Businesses exist to make money. The time for Twitter to roll out a revenue model has come and gone. This is, however, typical of the pump and dump routine that recent websites have been giving. Pump your site up, make no revenue, sell it as a feature to another site.

In fact, I run a site that is free, and collects very little revenue. As an experiment I said the site was for sale. You know what happened? TechCrunch deadpooled it. In a way, they’re right. Despite little success (1600 users at the time; it now has well over 6000), Skinnyr was not profitable and therefore has no value on it’s own. Having value is, in my mind, the only reason for a business (note: I didn’t say website) to exist. The only value that Skinnyr possesses with it’s current implementation is supplementing another service or product. Major players in the industry with existing revenue models (Google, Yahoo) can get away with owning properties like these. Twitter can not.

Reaching “critical mass” is only useful if you’re selling a feature, not a business. Twitter is a useful feature, not a standalone businesses. Twitter could never be the next Google. The best Twitter can hope to be is on the level with MySpace, which made a measly 10 million dollar profit in mid 2007.

If that is indeed the goal of Twitter, happy hunting. A million dollars doesn’t last nearly as long as it did in the times of the dot-com bubble. The smart option is not to take an investment, not waste peoples time, and prove that your company can be profitable on it’s own two feet. If you do that, then when you sell your business you walk away with all of the money, not a small percentage of it.

Feed advertising is out of the question for Twitter. It would slice their userbase in half. Contextual advertising most likely would not even turn a profit. The only chance Twitter has for successful revenue is to add new features under a value added subscription plan. This would mean current users experience no difference in service, while paying customers receive extras. This is the only way, and there would still be the proverbial next guy who would offer those services for free.

Right here, I was about to point to classmates.com as a success story of using a value added subscription model, until further research indicated that classmates was losing money prior to being acquired in 2004.

In essence, I’ve just proven that what Jason said about Twitter’s route to profitability was wrong. Twitter has no route to profit. The only hope Twitter has is to “reach critical mass” and then get itself acquired. Either latch on to a bigger service like Wikipedia and Mozilla have done and like Wikia is hoping to do, or get acquired by a larger service.

A business should never need bailing out.

In short, you need a business model to run a business. You need profit to make that business worthwhile. Otherwise, you’re just rolling the dice.

I’ve been lightly following a certain set of stories regarding Adobe phoning home whenever you start up CS3 products. The basic idea is this; When you start a CS3 product, it sends a few packets of information to 192.168.112.2o7.net, which is actually just a subdomain for the website 2o7.net, which is owned by Omniture, a statistics company.

I’m not saying they’re giving away my social security number, I’m not saying there are even any privacy issues here. However, two things are awry in this scenario. The first is that they’re trying to hide the website address by disguising it as a local-looking IP address. The second is that they’re phoning home, no matter what the information is, without my permission.

Guess what, Adobe? THIS IS SPYWARE.

John Nack, the product manager for Adobe Photoshop, took it upon himself today to write a blog post about the situation. In this post, Mr Nack is lashing out at users and customers without providing a single answer.

The main point that John keeps bringing up is that a lot of people are on holiday, so it’s the perfect time to put up some major speculative post, because the companies involved won’t be able to respond. He likens it to 2 posts that have occured in the past two consecutive years… which are also about Adobe.

John, I think you’re a little too concerned with yourself. The prior posts and this one occurring around the holidays are merely coincidence.

In addition, John, you quoted Doug Miller saying that “There are only 3 places we track things via Omniture anywhere in or around our products”. Given that this 2o7.net example was not listed, it makes this statement inaccurate and therefore quotable with a grain of salt. You can’t deny that the products are contacting 2o7.net… so there are 4 places you track things via Omniture.

Nowhere in your post do you address the following; 1) Why is the address intended to be hidden? 2) What information is Adobe collecting?

Instead of peddling the idea that your customers and users are crying wolf, and instead of defending yourself to the point of insulting your customers intelligence (Crying wolf?? No common sense??), you should concentrate on finding out the real reason behind the 2o7.net domain.

Until then, you should probably shut your mouth before your foot ends up in it. Oh, and run your post by HR next time if you want to save a bit of face.

Last year I wrote an article on predictions for 2007. These are my predictions for 2008. This is part two of a two part series. In part one, I did a recap of my 2007 predictions.

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There was a phenomenal response to the IE6 banner idea. I promised a followup, so marinate on this for a few. Another idea for phasing out IE6 dawned on me just after I wrote the last article. If I spend 20% - 25% of my time developing for IE6, should I not charge 20% - 25% extra for IE6 support?

The idea is simple. If you’re going to be wasting time, you might as well be paid for it. This expense could be an ingenious way of gathering momentum for stamping out the IE6 embers. That makes me wonder… how much time do YOU spend developing for/fixing IE6 bugs? 10%? 20%? 30%? Is the notion of charging extra for IE support appealing to you?

In a recent TechCrunch article, it was made known that BrightCove.tv was discontinuing the ability for consumers to upload videos. Instead, they’re changing gears and focusing their effort on catering to the 4000 media clients who use their service.

This, in my eyes, is a brilliant business move. Erick Schonfeld of TechCrunch, however, sees it as a weakness. According to Erick, “I am tempted to put it in the deadpool, but will refrain for now. If it disappears completely, or arises Zombie-like in the future, we will let you know.”

I believe this is the wrong attitude to have. Erick’s article outlines only the negatives and looks for reasons to call BrightCove a failure. Since when did adapting to your customers needs become an act worthy of labeling a whole business as dead?

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