We are just a month away from the big SXSW weekend of parties. If you will be arriving into Austin early, or live in Austin, you might want to check out the Web Camp that Microsoft (Nasdaq: MSFT) will host just days before SXSW begins. I have not attended a Microsoft Web Camp in the past so I can’t provide any reviews but the sessions look interesting and you will be fed.

You can register for the two-day event here – you must use a Windows Live ID (why I don’t know) and you must register for each day individually. From the course overview, “Microsoft’s 2 day Web Camps are events designed to teach you all about building websites using ASP.NET MVC, WebMatrix, OData and more. This event is a unique opportunity, partnering classroom learning on day one with hands-on-labs on day two, and leveraging experts to help you build new and exciting websites.”

The sessions include MVC basics, jQuery Globalization, data access and modeling, validation and testing processes. I don’t see any specific sessions around the Windows Phone but I have to image the topic will come up throughout both days. The event is free to attend and will be held at the AT&T conference center at the University of Texas in midtown.

Find more stories about: Austin, Conferences, Microsoft, sxsw, web, Web 2.0

I don’t know about you but I’ve always wondered to myself, “self wtf does centernetworks really sound like?” Well as of today I no longer need to ask myself that question. I can just head over to CodeOrgan, pop in a url and hear what the site sounds like.

Here’s how they come up with the sounds:

• to find the key – CodeOrgan pulls in all text, removes non-musical characters and then figures out which note is most commonly used
• synthesizer – whichever letter matching one of the 10 synthesizer effects is most popular
• drum loop – uses 10 loops and finds the most popular matching loop to content that is analyzed on the page that was entered into the CodeOrgan musical entry box and then the analysis to which is performed

InsideTransit is in the key of CM with a rock guitar and the number 6 drum loop. HTMLCenter pulls in key of A with “rifty” and the number 1 drum loop. And drumroll please, CenterNetworks has a vibe of key of A, strings and a drum loop number 8. I think I like the way CN sounds the best out of the three.

I tried out a variety of sites to hear their tunes – it’s pretty neat for a few minutes break in the workday. Interestingly, one blog I tried an error popped up, “too much bitching can’t process audio”.

Maybe there is a business model in selling mp3 recordings of your websites for $1. I’d buy my suite of sites straight away as they sound pretty darn decent. It would also be nice if they allowed for embedding the music as a widget so as readers are perusing your content, they can get a feel for the vibe of the website or blog.

Leave a comment with the sounds and melodies you like best on CodeOrgan. Make sure you leave a comment with the CodeOrgan link including the blog or website address in the link.

Happy weekend everyone!

Find more stories about: codeorgan, web, web sites

It seems nearly every startup I talk to is using Amazon Web Services (AWS). Either S3 for storage, EC2 for processing or one of the other options. Here at CN we use S3 for storage of nearly all static files.

Today Amazon has announced their third annual “Startup Challenge” which offers startups that are using AWS a chance to win a variety of prizes and service credits. Startups in United States, United Kingdom, Germany and Israel are eligible to enter and the entry period ends on August 25th. Also, startups must have earned no more than $5 million in annual revenue and/or raised more than $5 million in venture capital funding.

The top prize is $50,000 in cash, $50,000 in Amazon Web Services (AWS) credits, mentoring sessions from an AWS technical expert, and premium gold support for one year. There are a variety of other winners as well.

What’s great about the Startup Challenge is that unlike many startup contests, it doesn’t appear that Amazon is taking any equity for the prize amounts (of course you should check the rules to verify). My take is simple – if you use AWS in any form, submit your entry because, at a minimum, you get a $25 credit (which for CN is like 6 mos free service).

Find more stories about: Amazon, contest, startups, web

German-based Jimdo has put out a call to all Geocities users…a lifeboat if you will. Jimdo launched in 2007 and currently has a staff of 30.  The service offers an easy way to create a website and the company says that no technical skills are required.

Their “lifeboat” is a new offering they are near completion on which will allow Geocities users to transfer their sites into Jimdo. The basic Jimdo service is free and you can upgrade to JimdoPro for $5/month. JimdoPro offers more detailed statistics, larger storage space, personalized domain name, and no ads.

They are offering Geocities’ (and Google Pages) users 10% off the JimdoPro fee. This is a smart move for Jimdo as it makes them look like heros for helping users of a system that is closing.

Find more stories about: Germany 2.0, startups, web, Web 2.0, yahoo

Not only are most of the hottest Web 2.0 startups unprofitable, quite a few lack viable revenue models altogether. This has led cynics like me to criticize these startups quite harshly over the past several years.

Twitter, for instance, is the perfect example of the prototypical Web 2.0 startup that has captured the hearts and minds of the Web 2.0 "community" but hasn’t captured any real money (outside of venture capital).

When confronted with questions about the financial viability of their hottest startups, Web 2.0 proponents usually have a similar response: Rome wasn’t built in a day. When Google launched, we’re reminded, it didn’t know how exactly how it was going to make money. For young Web 2.0 startups that are growing rapidly, we’re often told that growth and "critical mass" are more important than revenue models and profitability.

As we recently learned that Digg was still losing money on revenue numbers that look quite paltry, it occurred to me that Digg and some of Web 2.0′s other hot young startups really aren’t hot young startups anymore.

Facebook was launched in February 2004. Digg was launched in November 2004. Twitter was launched in July 2006. Facebook is almost five years old, Digg is just over four years old and Twitter is two and a half years old.

They all share a common trait: none has developed into a self-sustaining business whose financial future seems assured.

But Rome wasn’t built in a day, right?

When Google launched to the public in 1998, AdWords wasn’t a part of the "business plan." Yet in 2001 – the third year of its existence – Google was already turning a profit. In an August 2001 BBC article, it was reported Google had been in the black for the past two quarters and that the company wasn’t making a little bit of cash – it was making a lot of it.

Eric Schmidt’s words: "We are quite profitable. We are not talking about 1%."

And what of other brands created during Bubble 1.0 that went on to grow into large enterprises? eBay was profitable almost right from the start.

According to an old press release, Yahoo reported a negligible profit in Q4 of 2005 – before it went public. Yahoo was officially incorporated as a business on March 1, 1995.

In short, three of the most prominent creations of the first .com boom were able to generate revenue and profits much faster than their Web 2.0 counterparts.

This is quite curious for two primary reasons.

The Myth of the Lean, Mean Startup

One of Web 2.0′s biggest myths: it’s far easier and far cheaper to get a startup off the ground today than it was a decade ago.

Citing the wide range of mature, open-source technologies and the abundance of talent available today, Web 2.0 proponents have told us that taking an idea from concept to reality, getting it launched and growing it can be a cheap affair.

If that’s the case, one would logically assume that today’s Web 2.0 startups would have developed into lean, mean revenue-generating machines. Instead, we see the exact opposite.

Facebook has over 600 employees and has raised over $400 million in capital (and is reportedly still looking for another big capital infusion). Digg has over 70 employees and has raised $40 million in capital. Twitter has somewhere around 25 employees and has raised $20 million in capital.

In other words, Facebook is a bloated company that spends money like it’s going out of style. Digg is a bloated company that is losing money on a marginal amount of revenue. Twitter is, relatively-speaking, the leanest of the bunch and ironically, the only company in this trio that could realistically implement a successful paid subscription model. Yet founder Biz Stone believes a business model could be a "distraction" at this stage of the game. Given Twitter’s recent security mishap, perhaps he’s right.

The reality is that while it’s true that open-source technologies and a large pool of development talent make building certain kinds of Internet "products" cheaper today, building a product and building a business around a product are two very different things.

Instead of following the lean-and-mean philosophy that Web 2.0 proponents promote, Web 2.0′s biggest stars have opted to put revenue models on the back burner. Instead, they’ve raised large amounts of capital at exorbitant valuations under the guise of supporting "growth" and achieving "critical mass." They figured that the revenue and profits would come eventually but clearly that was putting the cart before the horse.

This approach was fueled not only by the overabundance of easy venture capital money that needed to be invested and the promise of YouTube-sized acquisitions but by a stark truth: scaling services like Facebook and Twitter is not cheap.

Facebook’s $100 million debt financing for the sole purpose of leasing servers highlights very well the fact that offering free, advertising-supported services to millions upon millions of people is not a lean and- mean undertaking. The popularity of "open platforms", in which services need to allocate even greater resources to support applications that third-party developers have created, only exacerbates the situation.

In short, the model exhibited by the poster children of Web 2.0 does not reflect reality. Not only have the people who run Web 2.0′s most popular services largely bought into the model of VC bloat, the very nature of their services does not permit them to follow a lean-and-mean approach as traction is obtained.

The AdSense Economy

If you started an advertising-supported online content destination in the late 1990s, life was a lot tougher than it is today in many ways.

Back then, the nascent Internet advertising market was starting to grow rapidly and while there were huge opportunities for those entrepreneurs who were able to navigate it successfully, the market’s immaturity posed a lot of challenges.

That market is much easier to navigate today and Web 2.0 has been the beneficiary of what I like to call "The AdSense Economy." Thanks to AdSense, you can build an Internet product, launch it and "monetize" immediately by slapping up some ads courtesy of the friendly folks at Google.

In his article, "What is Web 2.0?", Tim O’Reilly lists AdSense as Web 2.0′s equivalent to Doubleclick.

And for good reason. AdSense (and programs like it) have been the initial primary source of revenue for many of the Web 2.0 "startups" that have launched (many of which you’ve never heard of, many of which you’ve already forgotten and many which have already disappeared into obscurity).

In theory, programs like AdSense give Web 2.0 upstarts a key advantage over their Web 1.0 counterparts: they permit low-effort monetization. If you launch a new service and manage to attract 10,000 visitors in the first month, you can monetize that traffic with almost no effort beyond adding a few lines of code to your website. Google, ad networks and other online ad companies do all the heavy lifting finding and dealing with advertisers.

Yet being able to monetize doesn’t mean being able to monetize effectively and profitably. The truth is that programs like AdSense are quite underwhelming and any service with real scale is not going to achieve anywhere near the same kinds of results with AdSense that it would with a dedicated ad sales staff (either internal or outsourced).

Sure, you’ve seen photos of AdSense webmasters holding up a $100,000+ check from Google and there are individuals and companies who make lots of money with AdSense. But they’re the exception, not the rule, and most of them are running services that are conducive to success (read: not "social media" services that tend to suffer from severe ad blindness).

But taking a step back, this isn’t about AdSense specifically. It’s about the mature online advertising market.

Many seemed to have believed the fact that this market was more mature than it was back in the late 1990s would be beneficial to Web 2.0 companies. After all, the online advertising market today is much more efficient and consists of a much bigger pie. Young Web 2.0 startups looking to tap into this should have an easier time, right?

Wrong. Market maturity is a double-edged sword because today’s mature online advertising market is:

More sophisticated. Ad buyers know a lot more about what they’re doing today than they did 10 years ago. This can make it more difficult for young startups to sell directly to brands and ad agencies because, even though a lot of money still gets thrown around and wasted, by in large, brands and ad agencies have a much better grasp of the digital space.

More competitive. Brands and ad agencies have a lot of options. In growing markets with lots of competition and few barriers to entry, a common characteristic is that the strong get stronger. Even though the online advertising pie is growing, major companies like Google and top properties and networks that register with comScore and Nielsen inevitably take a larger chunk of that pie because they represent the best avenue for efficient allocation of online ad spend in a cluttered online world.

Growing slower. Inevitably, nascent markets eventually mature and as they mature, growth slows. While the growth of online advertising (and the potential for future growth) is still quite significant, this market isn’t a plane that’s still sitting on the runway. What does this mean? It means that even if online advertising spend holds up relatively well during a deep recession, naturally slowing growth that’s inevitable in a maturing market could make the situation feel worse than the numbers might otherwise indicate.

Today’s economic downturn is far different (and far more severe) than the downturn in 2001 and that previous downturn, while painful for many, was actually not as problematic for the online advertising market as it should have been. The reason: the market was still so young and growing so much that the natural momentum it had for growth offset the macroeconomic climate. Today, a more mature online advertising market coupled with a more severe downturn will not be beneficial for Web 2.0 companies that are under the illusion that online advertising is recession-resistant.

All told, The AdSense Economy is not been as beneficial to the bottom line of Web 2.0 startups as many had argued it would be.

Conclusion

As we head into 2009 facing one of the toughest economic environments in decades knowing that the fun and games are over, it’s time to face the reality: the Web 2.0 we have today is not the Web 2.0 we envisioned a few short years ago.

The most popular Web 2.0 creations have not been cheap to grow and operate. They’re still struggling to find revenue models that will serve as the foundations of self-sustaining businesses and even those startups that generate significant revenue in absolute terms (namely Facebook) cannot justify the valuations they’ve been given. And profitability is still largely a pipe dream.

While it’s possible that Web 2.0 stars like Facebook, Digg and Twitter will turn things around, it’s quite clear that these companies are not like many of their hot Web 1.0 counterparts, which, despite having to battle challenges of their own, were able to develop viable revenue models and turn a profit relatively early on.

Given all this, for Web 2.0 proponents who continue to make the same asinine argument, "Don’t treat Web 2.0 like Web 1.0!", it’s 2009 and I concede defeat. Web 2.0 is not like Web 1.0. It’s in a special (ed) class of its own.

Find more stories about: Drama 2.0, money, Quick News, revenue sources, web, Web 2.0, web sites

I just sat in one of the "quicky" panels here in the afternoon. This one was presented by James Archer of Forty and I give him a 8.75/10 in score. Really quick and to the point, quick blips, no silly ppt animations and clear speaker. Very good job all around!

Here are my notes  — he went through this as a "40 step" plan….

step 1 – figure out your business
– freelancer
– partnership
– small team
– big agency
– company
he suggests that you figure out what you want to be and then work towards it

step 2 – limit your services
he notes every possible service but says you should really focus

step 3 – find a business role model
– their role model is starbucks

step 4 – don't be a flake
– make sure you appear correct to your business clients

step 5 – write a manual for the magic

step 6 – don't trust your brain

step 7 – don't let your clients followup with you
– you should contact them before they need to contact you

step 8 – don't let your colleagues follow up
– see step 7

step 9 – get addicted to strangers
– talk to people you don't know to help you grow

step 10 – always be teaching
– "tutorial marketing" helps to prove you know what you are talking about

step 11 – beware of perfection

step 12 – never trust a big butt and a smile

step 13 – cheap is sexy
– cashflow is critical to your business

step 14 – you didn't get ripped off
– we didn't get ripped off, we let ourselves get ripped off

step 15 – be firm with your clients
– they actually like this

step 16 – if we settle for nothing now…
– we will settle for nothing later – i.e. don't do spec work

step 17 – make it their idea

step 18 – don't bill hourly

step 19 – track your time

step 20 – honor your commitments

step 21 – be serious about scope
– shows the project cartoon

step 22 – study project physics

step 23 – never deliver crap

step 24 – never work anonymously

step 25 – use the right tools

step 26 – be different

step 27 – write your company constitution

step 28 – prioritize passion

step 29 – do a good job

step 30 – always do what's right

Step 31 – plan for the future

step 32 – plan your work and work your plan

step 33 – put employees first

step 34 – invest every dollar

step 35 – treat your clients like you love them

step 36 – use solid contracts

step 37 – embrace uncertainty

step 38 – play

step 39 – take vacations

step 40 – go that way, really fast

Find more stories about: Conferences, Quick News, sxsw, web

Netcraft released its Web Server Survey for November 2006 today and we have passed the 100 million web sites mark. Some interesting notes from their release:

The 100 million site milestone caps an extraordinary year in which the Internet has already added 27.4 million sites, easily topping the previous full-year growth record of 17 million from 2005. The Internet has doubled in size since May 2004, when the survey hit 50 million.

Blogs and small business web sites have driven the explosive growth this year, with huge increases at free blogging services at Google and Microsoft.

So what's really interesting is when I began commercial web design/development, Netcraft says there were already 10,000 web sites online. Seems pretty accurate. Some really cool stats include:

• April 1997 (1 million sites)
• February 2000 (10 million)
• September 2000 (20 million)

Apache still dominates the web server market holding over 60% market share.

The survey is well worth the read if only to imagine what the web was like when you began, even if that was just yesterday.

Find more stories about: netcraft, Quick News, web, web sites