This is a bit late but it looks like while I have been away, WSJ reported on rumors of an M&A conversation between Yahoo! and Facebook, with a price tag around $1b.  There is much conversation on the topic in blogland, so I’ll let you read the various viewpoints yourself (if you have not, already) here, here, here and here.

I think, just like $580m a year ago, the $1b number is blowing people away. One needs to look at the deal from the acquirer’s perspective.  I think it would be a mistake for Yahoo! to pay $1b for Facebook.  As many have pointed out, their problem is not reach.  However, the same deal, in my mind, makes more sense for someone like Viacom, who’s got the content and is starving for attention.

David Byrne is predicting a need for music search in a recent journal entry:

Soon enough a site will open that is like a Google search for music
downloads — downloads that are not copy-protected but you still pay for.
…
Consumers don’t care who they buy them from if the interface is easy
and intuitive. Soon enough iTunes consumers will find they have reached
the 5th authorized player on their tracks and the frustration will set
in when they can’t listen to the music they paid for. They’ll start to
look elsewhere.

I have been watching ROOT for some time now.  I think it is founded on a very basic, sound concept and I am convinced it will be successful.

However, it has been a slow development.  I am surprised by this because, at this point:

• Internet traffic is liquid
• There’s broad acceptance of keyword buying
• There are existing players arbing out keyword price differences
• So, the next natural step is the creation of a marketplace/exchange to further remove remaining frictions in this area.

Seth Goldstein has just announced that the Chicago Board of Trade has invested in ROOT.  That’s great news and it is one more step in the completion of the above process.

MIT’s Technology Review compiles an annual list of young innovators in science, whose work is changing our lives, all under the age of 35.  This year the list includes a Turk, Utkan Demirci, 28, whose development of  disposable AIDS  diagnostic tool earned him the spot.   

NYTimes and Forbes are reporting that Facebook is lowering its admission requirements.

The move is meant to help the site expand, but it risks undercutting one of its attractions: it has been more exclusive and somewhat more protected than MySpace, its larger and more freewheeling rival.
…
Under its new system, Facebook will create new networks for 500 geographic regions, and it will allow anyone to join them. In the default setting, people in the region — like the New York City area — will be able to see the full profile of other members in the same region. Facebook has long offered a series of options that allow users to expand or contract the information shown to various sorts of people.

I tend to think of openness not in terms of who can join, but what hurdles does one need to jump to access content.  In those terms, Facebook is still a closed community and I think that tends to create an advantage for MySpace.

With the enormous awareness on social networking, you’d think companies would have embraced the concept much sooner.  A new article on Business Week summarizes the current state of networking in the enterprise, calling attention to a few major tacks companies take:

1. Encouraging employees to get more connected online (LinkedIn, OpenBC)
2. Creating stand-alone networks, such as alumni networks (SelectMinds)
3. Mining employee communications for network analysis purposes (Contact Networks)
4. Marketing networks, user communities and loyalty programs

Having been away from the enterprise services area for about a year now, it is still striking to see how fragmented the field remains.  Our vision for SelectMinds, when we founded it in 1999 was that there would be tremendous value in creating intra-company networks (in the shape of alumni programs) and ultimately linking them up in one unified professional network.
LinkedIn and OpenBC have been tackling the unified network area, but as the article points out, there are reasons for companies to be nervous.  The inside-out approach of starting in the enterprise may be the more successful model.  I think SelectMinds is in a unique position to accomplish that in the US market.

Fred analyzed the advertising-based monetization potential of YouTube, and came up with $150m.  His math looks like this:

Serving up 100m videos daily
80%are monetizable
$15 CPM for 10 sec pre-roll ad
After revenue sharing, $150m to YouTube annually
(There’s a further-detailed spreadsheet screenshot on Fred’s blog)

Jason Calacanis disagrees.  His figure is $20m and the disagreement is on the CPM rate. Jason thinks $2-3 CPM is more likely.

My guess would be between the two figures, probably closer to Fred’s numbers.  I think $2-3 CPM is too low – knowing what ad rates even in Turkey are, I think contextual ads on YouTube should be able to fetch more.  On the other hand, I have doubts about the % of monetizable content.  If I just filmed my daughter and uploaded the video to YouTube, I doubt my mother would be up to watching an ad before she sees footage of her granddaughter.

In a rebuttal to Ryan Carson’s piece on the lack of utility in social software (and Nick Carr’s concurring recent post), Fred Stutzman has a thoughtful post on the topic which ends up distilling the true value of social software – that it allows communities to flourish. He summarizes:

We are enabled to share by social software, and we share for the
communtiy. In doing so, we enter a feedback loop and are complimented
by our sharing. Ultimately, it is all about the affection of the
community – we just have to find the communities appropriate to our
interests.

Sharing and communication are tremendously strong basic urges.  Humans, as social animals, need to interact.  Evolution made us experts at physical interaction. A few hundred years with the printing press has made us semi-adept at distant one-to-many interaction.  In the connected age, we are beginning to learn about distant one-to-one (and many-to-many) interaction.  Experiments in social software are only tools to aid us in this process.

UPDATE: Stowe’s also written a good post on the topic.

Baris has an intelligent post on a problem facing vertical search engines:

The promise of vertical search is a good one.  If the search
engine focused on one sector, such as shopping, blogs, electronics or health,
they don’t have to crawl the entire web, and focus on much fewer sites and hone
their algorithms to deliver more relevant results faster.
…
As long as the cost of doing another search on Google is zero, I see a
difficult time for vertical search engines to keep the relevance edge over
time.

I think the real edge vertical search engines hold in the game is the layers of value they add to basic search.  Improved algorithms and site-filtering are good tricks; however, as Baris mentions, they can be manually replicated at no cost by consumers.  Examples of things a consumer can not add are:

• collaborative filtering (including digg-like aggregators, or last.fm-like intelligent proximity algorithms)
• proactive searches (such as RSS feeds indeed brings to you)
• time-related insight (such as historic home price information on Zillow)

I expect most successful vertical engines to keep innovating on the value layers.