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Archive for March, 2011


Do Fish Drink Water?

Friday, March 18th, 2011

I scraped this answer, but I thought it was so interesting, I am reblogging it:

Fresh water fish absorb water through their skin and gills, saltwater fish actually do drink water.

In saltwater fish, they have to drink because their body’s concentration of salt is lower than the surrounding water. Therefore, they have to drink huge amounts of water every day to stay hydrated.

In freshwater fish, their salt concentration is higher than that of the surrounding water, and, as osmosis dictates, they absorb water through their highly permeable skin. To keep from bursting, freshwater fish actually have to excrete water, up to 10 times their body weight daily, unlike saltwater fish.

The Lure of Mediation

Thursday, March 17th, 2011

UPDATE: I love blogging because from time to time someone corrects my ignorance and I become smarter. I just received a lovely email indicating that AdMeld is now selling directly to agencies. While my source KNOWS STUFF, I am emailing Ben Barokas for comment. Shit, when did I turn into a reporter?

I am amazed at how many companies – ad networks, DSPs, and others, are considering getting into the mediation business these days.

The lure of mediation is obvious: If you see 100% of a sites inventory, you are seeing a much higher frequency of impressions, giving you more opportunities to monetize, you are potentially seeing some users that didn’t have the frequency to reach you in the daisy chain (super profitable), and you have more information about the absolute frequency of users (how many ads they have seen on the site).

This leads to a number of great monetization improvements:

  • You can front-run inventory
  • You have insight into the aggregate value of users
  • You can front-run inventory
  • You can front-run inventory
  • You can front-run inventory
  • You can front-run inventory

The terrible thing about mediation is that with great power comes great responsibility.

I feel like a proper mediation platform offers a few things to publishers:

  • A responsibility to maximize yield for the publisher – i.e. not front-running inventory
  • A responsibilty to offer transparent reporting

Many of the best known mediation platforms – AdMeld, Pubmatic, etc. – explicitly do not sell to non-ad networks. This allows them to report transparently on ad network performance with no risk of conflict and desire to front-run inventory. This also means that there is no difference between maximizing yield for them vs. maximizing yield for the publisher.

If I were an ad network, I would love to offer a mediation platform, because I want to front-run inventory, but the offering is so disingenous to customers, it is hard to imagine that it is a sustainable business.


Are DSPs Building Justifiable Valuations?

Wednesday, March 16th, 2011

I am reading more and more stories about DSPs raising large piles of money:

Lotame: $34m

MediaMath: $24m

DataXu: $19m

TradeDesk: $2.5m

TradeDesk appears to have a nice, sane strategy. If Invite Media was the industry leader and they were worth ~$80m, then all the rest of these companies are a long, long way away from justifying their valuations.

I am hearing more and more stories about how much of the revenue flowing through these platforms is essentially ad network business where the DSPs are taking on risk to run performance campaigns for agencies. While that is really interesting, is that revenue valuable? While it seems like the IPO market is opening, acquisition should still seem like a viable way out. If you build a $200m top-line ad network, I am unsure if anyone will acquire you today.

I wish I had more to say here, but why don’t people comment and we can go from there.




Is Twitter Evil?

Sunday, March 13th, 2011

It is super tragic watching Twitter struggle to find a business model. As has been widely documented, they have made, at some level, a fundamental shift that implies that people should no longer be able to build businesses using the Twitter API.

Frankly, this change in their Terms of Service is nothing less than shocking:

Courtesy of TechCrunch

Now, I am sure that Twitter represents this as “focusing development activity”, but when you look at developer-focused companies (“developers, developers, developers”), developers have always migrated to the most profitable areas and been slowly pushed out of business niches by the integration of functionality. If companies make Twitter clients and fill them with ads, will those end up being more popular than a Twitter client without ads? If Twitter can’t make a client people want to use, what does that mean?

The flip side of this is that, obviously, Google doesn’t let third parties scrape their organic search results and not show the ads.

Twitter is struggling toward some sort of balance, but it is very tough to turn a ship.