Vinny Lingham’s Blog

This actually slipped by us - until Webuser magazine posted their online review earlier this month!

I managed to get a scan of the May issue, and with permission from Webuser, here it is.

I got some nice media coverage from ITWeb - thanks to Mandy de Waal for taking the time and effort to do the write up.

I’m attending the MIT/Stanford Venture Lab (VLAB) conference on Cloud Computing.

Jonathan Bryce, Co-founder, Mosso, is the keynote speaker.

Overview: “Cloud computing increases capacity and expands computing capabilities without heavy investment in infrastructure, training or software licensing. Most importantly though, it democratizes Web 2.0 application development. With the removal of two significant barriers to entry - cost and capacity access - suddenly even small, lesser-funded entrepreneurs can dream big and bring their grand Web 2.0 applications to market.”

Moderator: Ross Mayfield - Chairman, President & Co-founder, Socialtext

Panelists: Paul McNamara, CEO, Coghead
Ping Li, Partner, Accel Partners
Michael Crandell, CEO & Founder, RightScale
Lydia Leong, Research Director, Gartner
Jonathan Bryce, Co-founder, Mosso

There was a lot of Q&A and the basic agreement that the audience had was that cloud computing is the future, although there are a lot of challenges that lie ahead. I think the consensus view was somewhere between 5-10 years before it became mainstream practice.

Jonathan took the podium to discuss his experiences with Mosso, which is a subsidiary of RackSpace.

Rackspace in 2004 not only survived, but thrived during the downturn post 2000. Their average growth was about 60% a year and Jonathan was part of the team that drove the company to setup a virtualization platform for the company and facing the fact that cloud computing was inevitable, but they had to change or die. His proposal was to:

Stop selling servers
Share infrastructure
Cut prices by 1/4
Become an innovator

Jonathan realized that this would cannabalize the existing business, so they created a separate entity which was a threatening competitor, stole some of the best talent, moved out and bashed servers on their own site.

The differences between cloud computing and traditional servers are very startling. In the traditional server business, there is a lot of upfront cost that goes into setting up a server for a customer - which inevitably means setup fees and long term contracts. With cloud computing, it’s pay as you go, and it’s cheaper for both the customers and the provider.

Before Amazon launched S3, storage cost $20/GB with buyers needing to buy terabytes at a time. With S3, it’s not 15c/GB.

Many people wonder how and why we can offer unlimited free hosting at SynthaSite - this explains it quite well. The cost of hosting has dropped to a minimum amount and given that in a competitive market, the price drops to marginal costs (Economics 101), how can anyone charge a small business or personal user to host a website that literally costs pennies…

Cloud computing is changing the economics of the Net and allowing more competitive businesses to spawn, which will create business models and revenues out of value creation, and not complexity or overhead (value vs. time+materials+markup). It’s like comparing an accountant to an investment banker.

I’ve been looking for a more efficient system to replace the flawed commenting practices that blogs currently employ. There are number of up and coming services that look very good, such as SezWho & Disqus. After much deliberation, I have opted to go with Disqus (with a bit of help from Louis Gray )

Basically, Disqus allows me to centralize my comments and create a threaded environment that is far more intuitive than the current commenting system. For more information on Disqus, have a look at their FAQ.

I have two options going forward - the first is to only use it on old and new posts that have no comments (which is what I’ve already done - as you will see with this post), the second option is to apply it to the whole site and move all the historic comments into Disqus. I’ve very keen to do this, but before I do, I thought I’d test it out and get your feedback!

Join the “Disqussion” and let me know if you think I should move everything across…

Techcrunch has just announced that Google & Yahoo intend to do a partnership around search. This is a great move by Yahoo, as they clearly did not do a good job with Panama (Yahoo Search Marketing). I was one of the search marketing experts that assisted the guys at Yahoo back in 2006 with planning Panama, and not many of my suggestions back in 2006 were followed. They thought they knew better…evidently not!

So, what’s is Google going to do with Yahoo? The right thing! The key to Google’s success is global distribution and billing (any customer, any language, any time, any country). Google will consolidate all the Yahoo marketplaces in all the different countries, and enable anyone, through a central interface, to bid on search terms from one central location. Yahoo should have done this from day 1, and Microsoft hasn’t realised this yet either. The politics around setting up a different “market” for each country clearly overcome good business sense by both Yahoo & Microsoft. Google did it right. This was the critical flaw in Panama. It just took too long to roll out a separate market for each country and then they didn’t achieve any of the benefits that a large advertiser base could achieve, across different markets. In other words - they reduced the Return on Effort for advertisers.

The problem with CEO’s such as Steve Ballmer & Jerry Yang, is that much of the knowledge around their advertising systems lies with Product Managers, and technical folk that are much closer to the customer and this information does not float up to the top. They are too far removed from the detail to understand how to run a good search operation - it’s not their fault, it’s just how large organization works. Google is so efficient at extracting value from search, and have been doing it for so long, that unfortunately, hiring a product manager with 5 years experience in search just won’t cut it.

As I said before in this post (2 years ago), Microsoft & Yahoo will never beat Google unless they understand first principles of search marketing as a business and industry - and as yet, I’ve not been proven wrong. If anyone has Steve Ballmer’s email, tell him to give me a call and let him know that I’m more than happy to help him fix AdCenter - no charge!

Update: Ok - now this proves how dysfunctional Yahoo’s thinking around search is. The announcement was just made and it only applies to US & Canada. Google is obviously happy to get a foot into the door without taking the rest of the world with them. It’s not a complete takeover of the search function, but more of a supplement to their own efforts with Panama. I’m very interested to see how this will be implemented, and if foreign searchers will see their local results on Yahoo.com (i.e. if they are not in a local Yahoo site).