business Archive

Just back from a business trip to Europe and Asia, Mahalo CEO Jason Calacanis has decided to make some cuts, firing nearly 10% of the staff and has started to rent out space to other startups. From what we understand, the rentals started earlier as Techcrunch50 finalist CauseCast has been renting space for a while. It’s good to see Jason took my advice from last week.

The staffers who were fired today are absolutely the best of the best. In London at FOWA, Calacanis explained that he only hires the top, best possible talent. This should probably help the fired staffers with future job inquiries. Good luck to all of those who lost their jobs at Mahalo today and if I can be of any help, send me an email.

One of the questions I’ve wondered about and have been asked for my opinion a number of times over the past month is whether the startups that are firing staff are doing it because of the economy or because their business model concepts or actual ideas are the real issue. It’s a very difficult question to answer without getting a look at the information from the inside. I posed the question on Twitter and was pointed to Jonathan Gheller who recently closed his startup Fashmatch. He notes that it wasn’t the economy that pushed them to close.

I certainly can’t say which reason is at fault for Jason’s decision to fire staff today. I can only assume it’s economy related based on the fact that his entire team are the highest delivering employees possible. 

My view on Mahalo is the same as it was day 1; to be successful they will need certain pages to drive the large share of revenue. While ads on the site now mirror exactly the other links on the page (this may actually confuse visitors), will that be enough to drive users to click on the ads? And how much does a page require to break-even? I’ve also started to see an overall drop in Mahalo’s standings in Google. What used to be instant page 1 status now has been pushed further back. Mahalo has $20 million in funding so they have some runway to continue to refine their business model as they continue to grow.

Mahalo Daily, the video show, also appears to be declining in viewership even with their SEO titles and excellent thumbnail work.

Ashkan summarizes the Mahalo business model:

Mahalo’s traffic strategy right now is simply to jump on the latest, breaking news, publish a page on it, and hope that Google’s super quick spiders index their page… It’s a gimmick, not a worthless one, but not exactly priceless either.

There’s been chatter about more Mahalo positions moving overseas. Our sources tell us that Jason has opened an office in Manilla. I don’t want to speculate on what positions are located there yet – we are still waiting for some final confirmation. We were provided this photo which was shot by a Mahalo staffer of what appears to be (unconfirmed) the Mahalo team in Manilla. I count 25 people in the photo.

A few years ago when someone visited a website they would expect to see a static page of content with some basic information on a company or individual. You would be greeted with the standard home page, followed by an about us/services page, and then if you were lucky, a contact page. You would read through the site and then judge whether or not the person/company really knows their stuff.

Nowadays having a blog is almost expected and in fact desired. Blogs offer something that static websites just can’t; (generally speaking) perspective and content. A blog gives far more insight into a company’s (or individuals) way of thinking and users like that. Now, instead of visiting a static page, a user can visit a dynamic page filled with valuable information and insight. If you are in the Venture Capital business then you can bet that your users are going to want to see a blog with some with some analysis on the VC market, tips and tricks for getting funding, how to avoid bad deals, etc. If you’re a hypnotherapist or marriage/family therapist you SHOULD have a blog that offers daily advice on how to deal with various situations, calming techniques, benefits of hypnotherapy, etc.

Blogs are becoming the new standard for websites and believe me blogs can be fantastic lead and revenue generation tools. If you are able to provide valuable information and analysis for the users in your respective industry, then your users will view you as being an authority in that industry. The Online Marketing Blog is a great example of how a blog is used to generate leads. Lee Odden and team put out quality content almost every regarding PR and SEO. As a result the blog is virtually an authority on the integration of PR and SEO and you can bet that Lee Odden and team are getting plenty of leads out of it. According to Lee, the Online Marketing Blog generates:

• 4 ad inquiries a week
• 1-2 speaking requests a week
• 1 media inquiry a week
• 4-5 leads a week.

As Lee puts it, “If the company has something to say then a blog is a great tool for them, and if they don’t have something to say then they have other business issues to deal with.”

Gone are the days of static content pages. Users want more; they want to understand the mindset of companies and individuals. They want to know what they can expect and they want to know that they can trust you. Blogging about your industry is a great way to build trust with your users and prospective clients. A blog gives your users a chance to see what you know and how you interpret information. Think of a job interview, you wouldn’t hire someone to run your marketing for you just because of their resume, you want to meet and interview the person before you offer them a job. A blog is a way for the world to interview you to see if they want to work with you. This is why it is so important to provide quality content to your readers on a regular basis.

You’re not still using that old website to get leads now are you?

Jacob Morgan is a social media consultant and runs a team of technical SEOs in San Francisco. follow him on twitter.

The question of business model timing seems to come up weekly with regards to some startup. As Twitter usage has grown, have they f’ed themselves out of a real, sustainable business model? And has Pownce done something right by launching with a business model? Personally I prefer that a startup come out of the gate with a business model — perhaps it’s the accountant in me.

This reminds me of a commercial for UPS where the geeks turned on the ecommerce application and at first one order came in at a time. Then all of a sudden, they received 1,000,000 orders and had no way to box or ship them.

As Twitter usage has continued to grow, when will they need to start to monetize the service? When will Fred Wilson and Union Square come a knocking (they provided a round of funding in 2007)? At that point, Fred noted that they had no idea what the business model was or would be.

In November, I wrote about Twitterific making money while Twitter hasn’t made a dime. Twitterific charges $15 for their software.

Most of the heavy Twitter users use the service via the API and "offsite". I actually use the Web site and refresh the page every few minutes while I am at home. How can they monetize the API usage? If a Twitter user already paid $15 for a piece of software, would they then be willing to pay Twitter for their account? It’s like paying for mIRC and then having to pay for the use of IRC itself.

Pownce launched with a basic business model — charging for premium messages and injecting them into a user’s stream. I like their idea.

What business models do you see Twitter employing and when? Will an advertising-based model make the Twitter hardcore users leave? Would you pay for Twitter access? Leave your thoughts and I will post the ideas later this week along with my business model ideas.

This afternoon CNNMoney had a segment discussing their column in Business 2.0 this month (they are partners). The reporter who appears to be one of the anchors of CNNMoney, Allen Wastler (no relation!), reviewed the top 101 Dumbest Moments of 2006 for businesses.

Normally I probably wouldn't post an item like this, but what makes it interesting is that Allen noted that this was the highest hit page for CNNMoney ever. So I had a look to see why. I would say that 1006 Diggs that should help. And this is just on the main URL, there are also Digg's and other social tools for all of the individual 101 pages as well!

• Digg – 1006 Diggs
• Del.icio.us – about 100 favorites

Check out the list as it's worth a look to see what not to do. I particularly enjoy:

• Northwest Airlines
• Vonage
• Starbucks
• Radio Shack

Which ones are your faves? What moments did they leave off?

We got dugg this week for our article, "Top 3 reasons to use clean URLs". It was certainly an exciting time and I hope it happens again soon (wink wink). And many have reported on the technical side of what happens when you get dugg. Stats showing that most people are using Windows, large resolutions (of course this never means they are browsing full screen) and that they are mostly using Firefox. All of that is great but I thought I would focus on what getting dugg means from a business standpoint.

Don't expect ad clicks

In 24 hours, we had over 20,000 pageviews to the dugg article. We didn't make enough in clicks from all of our ad sources to buy a happy meal. No, I am not talking about a big mac meal super sized, I am talking about a kids happy meal. Maybe if they leave the toy out we can afford it.

And in simple terms, people who come from Digg don't click ads. I think it is because Digg'ers are smarter than that and are really coming to read the content. The casual surfer may read your content, see an ad for x item and go to it. A Digg'er is on a mission: Read the content and get back to Digg to the next hot article.

Expect traffic even after the first 24 hours

In the first 24 hours after the Dugg, we received about 20,000 page views. Pretty exciting for a site that started three weeks ago. What is even more interesting is that even three days later, we are still receiving some traffic albeit lower. People seem to review Digg all the way to page 40! That is some excellent loyalty to Digg to go through pages and pages of Diggs.

Digg'ers don't browse

When I learned that our article was Dugg, I was very excited. I said to myself (I do that a lot) that we have a huge number of great articles, interviews and that these new visitors will see everything we have! Boy was I wrong! We were at about 6 pv/v which I think is excellent. Digg provided us with 1pv/v which sucks.

Digg will get you some links

It seems we have received about 10-14 new blogs linking to CenterNetworks. This is excellent. Getting inbound links is critical for SEO and 10-14 new links is like having a birthday party for yourself everyday! Keep 'em coming!

Short-term Alexa bump

We saw a huge increase in our Alexa rankings for the day we were dugg. So I guess I disagree with previous posters who say that Digg’ers do not use Alexa. While the majority probably does not, some percentage does and I will take the bump. While Alexa is a crappy tool overall, so many still rely on it for ad sales. And so, having a good Alexa is important. And I thank those of you who use it!

Net Result

The net result is that getting dugg is a good thing, a really good thing. If nothing else, digg gets you more traffic, more links, more eyes. And if you get one click, one incremental view or one more inbound link, then it is worth it. It won’t make you rich on ad clicks, but over time, it can certainly help you financial status.