Author: Liz Gannes

Yahoo, like Microsoft and Google before it, has struck a deal to get access Twitter’s to real-time “firehose” of tweets. Starting Tuesday, tweets will appear on Yahoo’s front-page search results in real time (Yahoo had previously included tweets but not through Twitter’s real-time firehose, which it charges for). And coming soon, Yahoo will include real-time tweets on its News, Finance, Entertainment and Sports pages.

Yahoo is also announcing plans to integrate Twitter across all its sites, so that users can tweet their stream of actions on Yahoo, for instance leaving a comment on Yahoo Sports or uploading a photo to Flickr, said Cody Simms, senior director of product management for Yahoo Open Strategy, in an interview Monday. It’s part of Yahoo’s big strategy to be an aggregator for the social web. Users will also be able to import their stream of tweets into Yahoo and compose tweets from within Yahoo. This echoes Yahoo’s planned integration with Facebook, which it pre-announced in December.

Yahoo got trashed for pre-announcing that deal, which was viewed as a concession to let Facebook power Yahoo’s social experience. That is in part, I think, why it’s also pre-announcing the Twitter deal, to correct the record. Neither deal allows users to log in to Yahoo using their Facebook or Twitter ID. Rather, they incorporate Yahoo’s vast network of properties. Both deals are supposed to actually be implemented “later this year,” a delay that does speak to Yahoo’s overly complicated and distributed nature.

Simms said that Yahoo plans to strike deals with “other social networks that our users are using, both globally and in certain regions of the world.” He said that could also potentially include Google Buzz, a rival effort to aggregate social activity online.

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Stalking doesn’t have to be all bad. If you stalk yourself by recording everything you do, you can notice trends, improve your habits, see how you compare to your friends and the general public, and potentially get recommendations for things that people like you have done or liked. And web services combined with mobile phones offer pretty comprehensive opportunities for self-stalking these days.

A service called Strings, which launched today, is trying to find and collect all the different ways you can track yourself online — your purchases on Amazon, Zappos and other e-commerce sites; your watching on YouTube, Hulu and Netflix; your listening on iTunes; your check-ins on Foursquare. The service is not about socializing and sharing that information, like the Twitter-for-credit-cards Blippy, but about privately harnessing it. It aggregates all that different preference data to build a better picture of things and places you like. The problem with stalking yourself on the Internet is it’s potentially an invitation to other people to do the same — but Strings of course is promising to keep your data safe.

An analogy for Strings is perhaps people who engage in The Quantified Self practice, where they log their lives for health purposes. But Strings has the added — and perhaps paradoxical — twist that it will identify people like you within its system, as anonymously as possible or when you add them as contacts, in order to recommend new content and products to you. That’s its business model: taking an affiliate cut from new things you buy because you found them on Strings. Unlike many web startups, Strings is not advertising-driven, and it’s not asking users to pay, either; it’s trying to live off of e-commerce.

Strings CEO Edward Balassanian described his service during a recent interview as “the flip of FriendFeed: I decide who sees my stuff” (whereas FriendFeed provides a service for other users to aggregate their friends’ public online presences). There’s also a Strings desktop app, a browser extension and an iPhone app (doesn’t look like it’s available yet) to better share your behavior as it happens. Two-year-old Strings is self-funded and has 15 employees. A video explainer is embedded below.

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Twitter disclosed earlier today that it has crossed 50 million tweets per day. That’s a stat with a direct equivalent: Facebook status updates. As of earlier this month, Facebook had 60 million status updates per day. To be fair, Facebook doesn’t seem to count in that figure the millions of links and photos shared by its users as status updates, nor would it count comment threads. Whereas on Twitter, every tweet is just a tweet.

Twitter doesn’t report its user numbers, but it’s safe to say they’re smaller than the 400 million global active users of its rival and one-time potential acquirer in Palo Alto. And Twitter has seen tremendous growth; tweets per day were at 35 million at the end of 2009. Tweeters as a whole, and perhaps on an individual basis, as compared to Facebook, are prolifically talkative and more so everyday. Mathew reported on an MIT/Microsoft survey of tech-savvy folks that found twice as many respondents updated their Twitter a few times a day than their Facebook status.

Meanwhile, Nielsen said today that global users increased their time spent on social networking sites 82 percent in December 2009 versus December 2008, for a total of five-and-a-half hours per month, with Twitter and Facebook seeing particularly strong growth in the U.S. compared to their rivals. Of course, that was just December — ancient history in social networking stats time.

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Please see the disclosure about Facebook in my bio.

Twitter is finally stopping to catch its breath and report its own stats. The company said in a blog post today that it is now receiving and distributing 50 million posts per day, or 600 tweets per second. No moment undocumented, indeed.

That’s up from 35 million at the end of last year, growth of 1400 percent from 2.5 million at the start of 2009. It’s a dramatic leap, from 300,000 per day in 2008 and 5,000 per day in 2007. In retrospect, it’s funny to think that 2007’s SXSW conference is often cited as Twitter’s tipping point. The numbers just don’t even compare to today.

Twitter has suffered in the public eye when outsiders report its stats. For instance, comScore said last fall the site’s growth was stalling and Nielsen said last spring that most new Twitter users fail to come back the next month. Twitter, whose metrics are especially complicated because so many of its users connect to the service from applications made by outside vendors, could do little to confront or contextualize such stories, given it made so few  of its own stats available.

Kevin Weil of the Twitter analytics team said today that the chart of tweet growth does not include spam, but didn’t give much other detail about how the tweet spread breaks down. We’d wonder how many tweets are from bots, how many from celebrities, how many from what countries, how many from the long tail.

We have to imagine Twitter’s excuses for holding back on bragging about its amazing growth are the fact it only just added its 140th employee — and that the team has often had more important things to deal with, like keeping its service from going down again. I spoke recently with folks from Twitter who said they’re considering making more data available and manipulable for the general public, but such a product has yet to be built. Weil mentioned in his post that tweet deliveries and search are other ways to measure Twitter growth.

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In the last week at least four major newspapers have each run stories about the hacking that led Google to threaten that it might stop censoring results in China (which it hasn’t, yet). All of the stories were based on anonymous sourcing from security researchers and intelligence officials, but they don’t exactly paint a cohesive picture of what happened. Here are the key (sometimes conflicting) details that have emerged:

New York Times, Feb. 18: The online attacks, which used malware sent through email attachments, were traced to Shanghai Jiaotong University and the Lanxiang Vocational School. The latter is closely tied to the Chinese military. Before this information came to light, the investigation had implicated servers in Taiwan.

Washington Post, Feb. 20: Investigators have narrowed an exploit of an Internet Explorer 6 vulnerability down to six potential hackers, including contractors based at Chinese and U.S. tech companies in China. The code used in the attacks “was developed by a diverse group of Chinese hackers” and used Chinese servers.

Financial Times, Feb. 21: “A freelance security consultant in his 30s wrote the part of the program that used a previously unknown security hole in the Internet Explorer web browser to break into computers and insert the spyware.” Further, Chinese officials have privileged access to this researcher’s work, which he had also posted in part to a “hacking forum.”

Wall Street Journal, Feb. 22: A “prominent Asian hacking group,” with a tendency to “use the same type of attack code to pilfer data in every scheme it executes” is implicated. Investigators aren’t necessarily likely to pinpoint an individual, according to the report. The group is known to surgically attack a small set of machines rather than collecting massive amounts of data.

The Chinese government, meanwhile, has denied any involvement in the hacking attacks on Google and others, suggesting that Google is a pawn in U.S. diplomatic strategy and that the concept of “Internet freedom” that Google and the U.S. say they want to protect is a fallacy.

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Image by Flickr user googlisti.

Octazen's contact importer helped Facebook make its userbase viral.

Facebook last week acquired a small Malaysian startup called Octazen Solutions, maker of a contact importer that the social network had already been using to grow its number of users by encouraging them to invite their email contacts. Spokesperson Larry Yu described the buy as a “talent acquisition,” saying Octazen’s two employees have joined Facebook as engineers. As he put it in a company statement on the acquisition he sent via email:

“We’ve admired the engineering team’s efforts for some time now and this is part of our ongoing effort to add experienced, accomplished technical talent to help drive the company forward in its efforts to be the central way for people to connect and share information.”

Octazen’s software helps sites like Facebook grow by making it easy for users to invite their contacts on other services. When Octazen receives an email address and password it fetches a list of contacts and puts them in an array for customers to use and store (and hopefully not abuse!). Octazen has taken down most of its site in light of the acquisition, but archived versions show it charged for software licenses between $39 and $200 per domain server plus a yearly update fee.

Octazen said in a message posted on its site that it is no longer accepting new customers and that it will “enter a transition period to wind down operations.”

Facebook, which now has more than 400 million users including 250 million added in the last year alone, has kept fairly quiet on the acquisition front, focusing primarily on talent buys rather than products (though it did discuss purchasing its rival Twitter). Previously it bought Parakey and FriendFeed, whose former execs now work on Facebook-originated products rather than their own.

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Please see the disclosure in my bio about Facebook.

Twitpay, a service that facilitates payments by users that publicly state who they want to send money to on Twitter, has been bought for $100,000 by investors led by Acculynk CEO Ashish Bahl and Morgan Keegan investment banker Keith Meyers, according to the Atlanta Business Chronicle. The exclusive acquisition story is behind a $59 paywall, but some details are available in an accompanying blog post.

The new investors reportedly plan to invest $1 million in product developing and marketing. They will initially focus on raising money for charities, but are also looking to expand to other products and other social networks besides Twitter.

Twitpay, which launched a little over two years ago, currently directs users to PayPal to actually settle their debts but has also apparently built its own proprietary payment system. From the ABC blog post:

Charities post — or “tweet” — a request for donations. To make a payment, the donor re-posts — or re-tweets — that message. Doing so authenticates a transfer of money from the donor’s account to the nonprofit’s.

Twitpay keeps, on average, 5 percent of each transaction and the nonprofit gets its money within 72 hours. Since both the donor and the nonprofit are registered on Twitter, and the donor is additionally authenticated by Twitpay, charge-backs should be less than 5 percent.

Though there are plenty of other ways to donate money that are at least as easy as a tweet, there may be something about announcing to the world that you’re supporting a good cause. Making donations more accessible has been highly effective of late. For instance, text messaging to give $5 or $10 to Haiti earthquake disaster relief has raised more than $35 million, according to the Mobile Giving Foundation.

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As we are hosted on WordPress.com through their VIP enterprise publishing service, we were affected by an outage of their network of blogs today that’s been attributed to a core router change. All GigaOM sites (besides GigaOM Pro and OStatic, which are hosted independently) were down today from approximately 1:30 to 3:30 PT.

Automattic founder and frontman Matt Mullenweg explained in a blog post after the sites came back up that the company’s 10.2 million hosted blogs were down for 110 minutes, for a projected page view loss of 5.5 million. He attributed the downtime, Automattic’s worst in four years, to “an unscheduled change to a core router by one of our datacenter providers.” Mullenweg said the problem “broke all the mechanisms for failover between our locations in San Antonio and Chicago.” He assured users that all their data was safe and promised a “concrete plan” to better handle such situations in the future.

WordPress being down was only the latest of an outbreak of outages this week affecting us or companies we work closely with — given pretty much all of Palo Alto had no power yesterday after a plane crash and then our office Internet and phones (we are based in San Francisco) went out yesterday. It seemed almost fitting (but nonetheless frustrating) when our sites went down. We joked that it was due to rogue reporters’ illicit use of Chrome for Mac, which doesn’t seem to get along with WordPress.com, so we’ve been kindly reminded not to use it over and over again by our lead developer. (Sorry Chancey!) All you cloud haters out there can feel free to voice in about how dumb we are for trusting a hosted service.

All joking aside, I found it surprising that Automattic users — the majority of whom use its services for free — seemed to be fairly forgiving in the comments to Mullenweg’s apology post. It seems the company has enough goodwill to spare a couple hours of failure. But one thing’s for sure, people won’t be so friendly if it happens again.

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Disclosure: Automattic, maker of WordPress.com, is backed by True Ventures, a venture capital firm that is an investor in the parent company of this blog, Giga Omni Media. Om Malik, founder of Giga Omni Media, is also a venture partner at True.

Facebook users along with the social networking site’s advertisers will soon be able to pay for virtual goods and ads, respectively, using PayPal. The two companies’ strategic relationship is not exclusive, but it is significant, given the competitive space. Facebook could have kept its payments independent and tried to register all its users’ bank accounts and credit cards on its own — which would be an incredibly valuable resource. But then again the company has been talking about a payments platform for years and now is only testing credits within a few applications. (Though it also opened up mobile payments to outside provider Zong last year.)

Facebook said the move was in part because 70 percent of its 400 million users live outside the United States, so it can be hard for them to transfer money to the company online. PayPal has more than 81 million active accounts.

Online payments are a strategic battleground, and the deal is a good get for PayPal. Earlier this week Google hired a former PayPal executive to be VP of commerce and run Google Checkout. Other companies with massive online account bases tied to users’ money include Amazon and Apple.

Please see the disclosure in my bio about Facebook.

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Yahoo is now approved to be buddies with Microsoft.

More than two full years after Microsoft offered to buy Yahoo for $31 per share, the two companies have gotten approval from the U.S. and the EU to proceed with a long-term partnership. They jointly announced today that they “will now turn their attention to beginning the process of implementing the deal.” Wow, that’s one version of moving at Internet speed!

The deal, in case you dozed off, means that Bing will power some of Yahoo search and Yahoo will sell premium search advertising for both companies (Microsoft is paying Yahoo $50 million for the next three years to make the transition). It’s intended to help the two companies compete with Google, though it’s hard to imagine those two changes will shift either one out of “also-ran” status.

Though the deal is a concession on Yahoo’s part of the search business, the company has lately made efforts to draw attention to the improvements it will continue to make around search user interface — see our coverage of a recent press event on Yahoo search.

Microsoft and Yahoo said they are still working to gain approval from regulators in Korea, Taiwan and Japan.

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Clicker, at least in terms of branding and industry recognition, is doing the best job so far of being a television guide for the web. The company — which only launched three months ago at our NewTeeVee Live conference — has been rewarded with an $11 million Series B round led by JAFCO Ventures and including previous investors Benchmark Capital and Redpoint Ventures.

Now the mission is to attract Clicker users by the millions and score distribution deals to get to every screen. Clicker now has 750,000 monthly visitors to its site, and more through distribution on Boxee and other places, said CEO Jim Lanzone. That’s certainly respectable for a three-month-old site but a little low for a pre-revenue portal with $19 million in funding. Lanzone said he did the raise after significant interest from investors.

Clicker provides a very organized and nicely laid-out guide to legal venues for consuming content online. The idea is to save people the time and hassle of knowing where to find their favorite shows. “Our core asset is our database and the technologies to support, grow and maintain it,” said Lanzone. “It’s very agile, and can be deployed almost anywhere.”

However, the company faces a ton of competition, including other startups like SideReel and CastTV, existing large sites like the original TV Guide, as well as Hulu — which now has everyone but CBS in terms of major content, and directs its searchers to shows it doesn’t have. TV Everywhere-type projects from cable companies and other MSOs could potentially be good partners for Clicker but are perhaps as concerned with limiting access to content as they are with providing it. One advantage of Clicker is that it indexes web originals much better than any of those services.

Lanzone said this week that he plans for Clicker’s revenue model to be lead generation rather than video or display advertising. What he means by that is he will invite content producers and subscription services to target potential viewers of their shows (for instance, a cooking show would buy space against other cooking content) or their versions of shows (for instance, Netflix would try to attract viewers to its subscription stream).

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What do collaboration toolmaker AppJet, social search manager Aardvark and email search appmaker reMail have in common? A trio of little startups, they were all recently acquired by Google after being founded by former Google employees. So now those founders are returning to the nest — to work on similar projects, with generous re-signing bonuses in their pockets. These are multimillion-dollar acquhires.

More than 10 years after Google was founded, and five years after it went public, it’s a given that employees are going to leave, and new fresh faces will seem like better opportunities. In a time when Google is busy launching massive products like browsers and phones, folks with cool little ideas may well be better off exploring and testing them outside the company. It certainly would have been more convenient for its HR department had Google managed to keep these people employed by offering them opportunities internally — but then again you can’t feel bad for a company with $24.5 billion cash on hand when it has to go out and spend a few mil to recruit from the office park down the road.

Ex-Googlers also tend to be either comfortable financially, and able to fund their own projects off the ground, or at the very least well-résuméd enough to secure backing. (Others find financial security more relaxing than emboldening, and head off to retirement because they are rich beyond belief.)

It seems that Aardvark may be the only one of this trio of acquisitions whose product survives intact; the social search engine is now in Google Labs. Aardvark’s team had previously worked on Google projects such as AdSense, News, Firefox and machine learning. Meanwhile, the AppJet folks (who’d previously worked on Google products such as Search and Health) are teaming up with Google Wave, and reMail founder Gabor Cselle (who formerly was a Gmail intern) will be a Gmail product manager.

None of those startup products were able to find Google-like scale on their own, but they were all nicely designed and engineered and served a purpose. Development without Google’s global scale may have actually been a benefit; the missteps of last week’s Google Buzz launch showed that a new web product from within the company would have been better suited to a more modest rollout.

If the acquhire binge continues, who might be some of Google’s next targets? Some other ex-Googler web startups include Ooyala, TellApart, Red Beacon, MyLikes, OpTrip, Cuil, imo.im, Chai Labs and Howcast. Other acquirers have also taken a liking to Google offspring; for instance Facebook bought FriendFeed and Twitter bought Mixer Labs.

A history note via Om: Google’s not the first tech company to try to rejuvenate itself with old blood; Cisco pioneered the concept of a “spin-in,” which often involved investments in former employees’ startups and options to buy them.

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Image via Flickr user mikebaird.

Google has acquired a small email search company called reMail, reMail founder Gabor Cselle posted today on his blog. reMail, which was part of the Y Combinator program and raised funding from FriendFeed and Gmail founders Paul Buchheit and Sanjeev Singh, started in November 2008.

reMail, which made an iPhone app that Google will be discontinuing, provided comprehensive email search for email and IMAP accounts even in offline mode. (Personally, I’d used it until Apple enabled its own mail search for the iPhone, though some reviewers attested reMail was still superior, and I’d believe it.) Google currently doesn’t offer a Gmail app on the iPhone platform, preferring its snazzy HTML 5 web app experience. Cselle said current reMail users can continue to use the app though support will be discontinued at the end of March. Taking out an existing iPhone app is particularly notable given Google has its own competing mobile platform, Android.

While LinkedIn says reMail has or had three employees, Cselle writes in the singular in his blog post, saying he will be joining Google as a Gmail product manager. Cselle is a bit of an web mail fiend; he worked on Gmail while an intern at Google in 2004, researched email in grad school at ETH Zurich and was VP of engineering at Xobni.

Google also recently acquired another Y Combinator startup, EtherPad-maker AppJet, which Buchheit and Singh had invested in as well.

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Companies like Facebook and Automattic regularly brag about their user-to-engineer ratio — for instance, Facebook’s was 1.2 million to 1 last fall. But employee-to-global-attention ratio? That’s where Twitter has everyone beat. The company celebrated its 140th employee (aka character) last night with an office dance party. That’s a really small number compared to many measures of Twitter — its $1 billion valuation, its 1 billion tweets per daymonth, its seemingly millions of media mentions and integrations. As for other players in Twitter’s cohort of massive social web startups? YouTube says it has 400-500 employees, Facebook has more than 1,000, and Automattic (please see disclosure at the bottom) has around 40.

Disclosure: Automattic, maker of WordPress.com, is backed by True Ventures, a venture capital firm that is an investor in the parent company of this blog, Giga Omni Media. Om Malik, founder of Giga Omni Media, is also a venture partner at True.

Yapta today announced a partnership with travel search site Kayak that will make its highly useful flight-tracking service a lot more accessible. Yapta has a pretty awesome, consumer-friendly premise: Airlines mess with flight prices all the time, so if you’re bargain shopping it’s hard to know when to make a reservation. And what could be worse than when the price of a flight drops dramatically right after you bought it for some ridiculous amount?

What Yapta integration will look like on Kayak's search results (not live yet)

Yapta helps tell you when to buy and when you’re eligible for a refund (which you are, if the price drops — and this happens about 15 percent of the time, according to the company) by tracking flights you’re interested in and flights you’ve already bought.

In the past, using Yapta required the installation of a browser add-on or telling the site about your travel plans directly; now Kayak’s flight search engine is directly accessible on the site. But more importantly, all search results on Kayak and its subsidiary SideStep will soon give you the option to “track price drops,” which will prompt users to sign up for Yapta. Being on every Kayak results page should give Yapta a nice bump in signups, and it’ll be a great value-add for people who already use Kayak. (In fact, the reason I’m writing about this is I’m a user of both services, and I’m happy I’ll be able to get them in one place and stop using the pesky Yapta Firefox add-on.)

<strike>Kayak</strike> Yapta, which also recently integrated with TripIt, raised $2 million in Series B funding last summer in a round led by Voyager Capital.

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The benefits of the long tail may go beyond selling large quantities of niche items. Having a comprehensive inventory makes your customers more satisfied and more likely to patronize you again, according to a new paper from Yahoo presented earlier this month at a web search and data mining conference.

The Yahoo research came out of data sets of users’ Netflix and Yahoo Music ratings and Yahoo search and Nielsen-measured browsing behavior. It turns out that a little extra inventory goes a long way. Yahoo’s scientists found, for instance, that movies that attracted only 2 percent of demand had the potential to grow the Netflix customer base by 7 percent as a result of attracting newly satisfied customers. They also found that fulfilling an additional 1 percent of consumption in the tail of search queries yielded a 6 percent increase in the number of people who were very satisfied with search result inventory.

The kind of inventories you can find at big-box retailers or in the top 10,000 web sites leave out somewhere between 13 and 34 percent of consumption, depending on the category, and Yahoo’s scientists proved out theories of a material value in satisfying those long tail customers. And further, they found that everybody is really a long tail customer — we all have some niche we want scratched. Yahoo’s scientists did admit that their results may actually be more validating for other people’s businesses, like Amazon Marketplace and Half.com.

Their conclusions:

“Tail availability may boost head sales by offering consumers the convenience of ‘one-stop shopping’ for both their mainstream and niche interests.”

“Return on investment of niche products goes beyond direct revenue, extending to second-order gains associated with increased consumer satisfaction and repeat patronage.”

Joel Spolsky, the influential longtime software blogger, said this weekend that he plans to raise funding for StackOverflow, the programming Q&A site, and to that end will be on a roadshow next week in Silicon Valley. The Q&A space (aka “social search,” if you’re on a VC roadshow) is hopping right now, with Google buying Aardvark for a reported $50 million, and others such as Hunch and Quora attracting plenty of buzz (Aardvark raised $6 million from August Capital and Baseline Ventures, Hunch has raised at least $2 million, and Quora is self-funded last we checked but the service is swarming with VCs).

Spolsky’s fundraising disclosure came as a bit of a surprise, and provoked public disapproval from folks like 37signals’ David Heinemeier Hansson, given Spolsky has written before about the value of slow growth and how venture capitalists’ goals are not aligned with company founders. It was as if he had switched teams.

Spolsky said that StackOverflow has grown to 6 million monthly uniques in a year and a half, and is operating with 50 percent profit margins (based on minimal advertising). He said, “Now we’re biting off the bigger goal of changing the way everyone gets answers to their questions on the Internet, and that’s something we can’t do alone.” He said VCs could help him grow to a “big exit” or an IPO, add publicity and connections, and negotiate the “land grab” in the online Q&A space.

AnchorFree’s ad-supported VPN, Hotspot Shield, has been on a tear in the last year. The tool, which people use to protect their browsing privacy and also to access blocked web content, now has more than 7 million monthly users and 1.3 billion pages encrypted per month. Hotspot Shield’s userbase, which tripled in the last 12 months, is filled with expats — such as U.S. Army soldiers and businesspeople in China — according to CEO David Gorodyansky, who stopped by GigaOM today for an interview (see video below). More than 80 percent of Hotspot Shield users are browsing in English, while more than half of users are international. With that geeky, globetrotting demographic, the most effective ads on the service are tech and travel.

Sunnyvale, Calif.-based AnchorFree has raised $11 million in rounds led by Renaissance Capital, and has been profitable since May 2009. It has just 18 employees but a handles an immense amount of bandwidth, given it encrypts every page to which its users browse.

We spoke to Gorodyansky about the paradox of behavioral targeting to a userbase that explicitly wants to be anonymous and other topics in the 10-minute interview embedded here.