Piling on the VMW Mess Today

Lot’s of commentary today about VMware missing their number and CEO Greene out of the top job. For the record, when I was at SAP Ventures we looked at this deal but passed because of the husband/wife team (generally a big red flag for venture deals). It worked out for Diane and Mendel, and it would be stating the obvious to say that I regretted we passed on that deal but not just for the financial implications, Diane is the kind of entrepreneur you want to deal with, sincere and genuine but also really really smart.

Having said that, I think comments like this are misplaced and reactive:

Er, VMware may have tweaked its revenue forecast for 2008 to be “modestly below” previous guidance of 50 per cent growth. Few executives of multi-billion dollar companies usually get fired for 49 per cent growth, especially with an imploding worldwide economy in the background.

[From EMC CEO’s ego has cost investors billions | The Register]

VMW has been at the center of a lot of confusion about their revenue forecasts and actual performance. Following the catastrophic Jan 28th conference call with analysts there was a lively discussion on the Enterprise Irregulars message board about their call and the details. In Q4’07 the company put up $412m against a $417m forecast… which being off $5m doesn’t seem disastrous but the fact that they came up $5m short while sitting on $550m in deferred revenues made no sense.

On that Jan 28th call they forecast that revenue would grow from $1.3b to $1.9b in 2008, 50% growth which again does not look bad. What that meant is that the company would need to add about $650m in 2008 revenue to meet their growth target of 50%, but when you consider that $550m in deferred revenue on the books it means they were really treading water for 2008. Basically they weren’t growing 50% at all but rather just covering their bases… and this from a company that had reliably put up 80% revenue growth.

At the time there was a line of thought that the company was resetting Wall St. expectations but today we can comfortably suggest that the company has some serious competitive and market challenges facing them. Blame Wall St. for being overly reactive but what investors were challenging is that apparent deceleration in VMW’s business and no substantive answers for what was going on.

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Bit.ly and Semantic Mapping

Well this is geekilicious… not sure what application this will result in but it’s still geek chic.

In the background, Bit.ly is analyzing all of the pages that its users create shortcuts to using the Open Calais semantic analysis API from Reuters! Calais is something we’ve written about extensively here. Bit.ly will use Calais to determine the general category and specific subjects of all the pages its users create shortcuts to. That information will be freely available to the developer community using XML and JSON APIs as well.

[From Bit.ly: Please Use This TinyURL of the Future – ReadWriteWeb]

Checkpoint Friendly Laptop Bag

When I saw this on Engadget I got kind of excited at the prospect of not having to take my laptop out at the checkpoint. Then I saw the image…. then I read the info page, which reads like one of those 126 part expanding pamphlets that get glued onto drug packages… then I saw that this isn’t a product but an image of a future product. So basically what Skooba did was to release an image of what a future product may or may not look like. Brilliant.

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Rules, Rules, Rules

Always funny how “progressive” ends up meaning “controlled”. The list of rules that caterers have to abide by for the DNC this August is eye popping. It gets kinda hot in Denver around August, I’ll be curious to see how that bottled water rule holds up.

No bottled water, use pitchers instead

[FromFood at the Conventions]

Privacy Getting in the Way

“You have zero privacy anyway, get over it.”
– Scott McNealy, Jan. 1999

Once again we have “privacy concerns” being used to squash efforts to make advertising more effective by targeting it at people likely to want it.

Cable and phone companies say their growth increasingly depends on being able to deliver targeted advertising to their Internet and TV customers, but criticism from privacy advocates is threatening that strategy.

[From Free Preview – WSJ.com]

I admit to having mixed feelings about this. On one hand I simply don’t trust cable companies but on the other I have to wonder what the worst that could come of this is. The risk for privacy advocates is that they are the boy who cried wolf… what damages have actually been incurred because online behavioral data was made available to advertisers. Indeed one of the most successful online advertising networks of all time is Google Adsense and it is predicated on having context to online content that you are viewing or searching.

I’ve written about this many times before, advertising should have some utility and the first step in providing that enabling a better understanding of what I do in order to predict what I want. Online advertising should not be as it is today, which either relies on tricking someone into clicking on it, or as is the case with interstitials, forcing it in front of someone.

What is more troubling about this debate is the effort by some to undermine the rights of businesses offering services by demanding they attach privacy rights where there are none, public online spaces, and at any rate it is well established that it can be voluntarily sacrificed in exchange for some service or product benefit. This is exactly what happens every time you do a search on Google, login to Facebook/Myspace, and watch cable television, as well as a hundred other things we do on a daily basis.

We are currently running a pilot that takes advantage of Myspace’s hypertargeting for distributing widgets. The USA Today Pop Candy widget features content from the very popular column written by Whitney Matheson, featuring celebrity and entertainment news. What we are doing is taking advantage of the profile tags generated by Myspace for every user profile, then “suggesting” the widget based on alignment of those tags to the Pop Candy widget.

Why is this important? Well for USA Today they can drive distribution of their widget, which really just means extend their brand deeper into prospective audiences, in a more efficient manner than slamming an IAB compliant widget through an ad network and hoping people pick it up. For Myspace users they get the promise of more relevant content based on what is inferred by analyzing the content that is already on their pages.


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