EricEwe.com

North Carolina’s Department of Revenue had ordered the online retailer to provide full details on nearly 50 million purchases made by state residents between 2003 and 2010. NC is looking to collect taxes from NC residents that did not pay tax for that item that they purchased off Amazon.

Amazon.com filed a lawsuit stating that the lawsuit says the demand violates the privacy and First Amendment rights of Amazon’s customers. Amazon has no offices or warehouses in North Carolina, it’s not required to collect.

Last year, Amazon discontinued its affiliate program in North Carolina, which provides referrers with a small slice of the transaction, after the state legislature enacted a new law that would have used that program to force the company to collect sales taxes. 

A North Carolina legislator said at the time that the state would be able to force online retailers to collect even retroactive taxes; tax officials have reportedly sent letters to online retailers in the last few months saying they’re required to pa

I was browsing one of the tech sites and I stumbled upon this company – Swoopo.com. Pretty interesting and lucrative business model  – NO DOUBT!!!

Basically, they are an auction company which sells directly to consumers. Swoopo started in Germany and is making an impact in US. They focus on electronics like LED TVs, SLR Cameras, laptops, ipods, top end cell phones like the Nokia N97, etc

This is how their business model works.

1. Like eBay, you need to bid and be the highest or last bidder when the auction closes.
2. The highest bidder will pay for the item price at the close of the auction.

Simple and straight forward huh? So what’s the catch?

1. The bid increments are predetermined by Swoopo. I have seen mostly increments of $0.06 per bid.
2. In order to place a bid, you have to buy credits at $0.60 per credit.
3. As opposed to having the auction end at a predetermined time, it is always a moving target as to when the auction will close. See # 4 below for moving target details.
4. Every time somebody submits a bid, it will add 15seconds (sometimes 20 seconds depending on the item) to the auction closing time.
5. The key to winning is to be the last person bidding on the item when the countdown timer is zero.
   i.e. Assuming that I am looking at bidding on an Apple iPhone 3Gs. The countdown timer to the auction is 7 seconds when I submit my bid, it will add 15 seconds to the countdown timer making the timer 22 seconds. The goal is to be the last bidder when the timer is zero. It will cost me 1 credit which is $0.60 per bid.

Here is how it gets super duper lucrative: -

I was observing an auction for a Nokia N97 cell phone. Retail price on Nokia.com is $571, with the retail price of $699 but who pays retail.

The last bidder who won the item was Racer13 with 432 bids plus $119.76 for the item.

Auction ended on Oct-28-2009, at 12:34 PDT

By their calculations which I verified, Racer13 paid $373.56 for the phone (@ $0.60/bid X 432 bids  + $119.76 for item). He got a pretty decent deal as you can pick up a Nokia N97 for about $400 on eBay.

On the flip side, Swoopo made a killing selling this auction.

When I was looking at the auction, there were about a dozen people actively bidding on it. This is based on my unscientific observation.

If Racer13 paid 432 bids to be the winner, it would be safe to say that those other dozen or so bidder might have utilized 1/2 of the total # of bids that Racer13 used.

Total bids for that item:
=Racer13′s bids + 12 other competitors bids which is half of Racer13′s bids*
=432 + 2592
=3024
*Avg 216 bids per bidder X 12 bidders = 2592 bids

Total amount collected by Swoopo for the Nokia N97
=Item sold + (total bids X $0.60 per bid)
=$119.76 + (3024 X $0.60)
=$119.76 + $1814.40
=$1934.16

I would think that if you buy the N97 phone at wholesale the price, you might be able to get it for $270-$300. Making $1934.16 from $300 item, that is a 6X return and that ain’t too shabby.

Now, eBay would be kicking themselves while saying “Why didn’t I think of that?”

If you think that Swoopo is for you, you can sign up and test it out with 3 free bids, expiring 12/31/09. CLICK HERE

I have been working with Google since they were a fledgling company that was trying to claim market share from Overture/Yahoo and one of the beta testers for Gmail. When a company grows so fast, sometimes they will get sloppy.

Here is a good example, I signed up for a new MCC account for the Google Pay Per Click aka Google AdWords, the MMC confirmation email goes directly to the SPAM FOLDER in my GMAIL. I think there are simple things they overlooked….”to have Google emails not go into spam for Gmail accounts”.

 See email I got below which went into GMAIL SPAM.

Hello Eric Ewe,

We’re delighted that you’ve joined the Google Advertising Professionals Program. Using the components of this program – including online training and qualification, as well as marketing materials designed for your needs – you can more efficiently manage client accounts, extend your AdWords expertise, and attract more prospects.

To get started with the program:
1. Log into the Google Advertising Professionals Program site at https://adwords.google.com/professionals/account/?hl=en with the Google Account username and password you used during the program sign-up process. Familiarize yourself with the various elements of the site – it’s where you’ll be tracking your online training and qualifications for the program, as well as accessing useful resources such as marketing materials.
2. Create a Company account, or ask the Administrator of a Company you want to join to invite you as a Professional member (this allows you to take full advantage of the program features and benefits).
3. Create a My Client Center (MCC) account, if you don’t already have one, so you can more easily manage multiple client accounts. Managing a certain amount of spend in your My Client Center is also a requirement for qualification in the Google Advertising Professionals Program, so you should take a moment now to set up your MCC account by visiting http://www.google.com/adwords/myclientcenter.
4. Link your MCC account to your new Google Advertising Professionals Program account so that your managed spend can be associated with your account. Read this FAQ to learn how: https://adwords.google.com/support/select/professionals/bin/answer.py?answer=148358&hl=en.
5. Start learning! Visit the AdWords Learning Center to begin training for the Google Advertising Professionals Program exam. Once you pass the exam and have achieved the minimum client account spending requirements in your My Client Center, you’ll be eligible for qualification in the program. Access the Learning Center at: https://adwords.google.com/support/aw/go/learningcenter?hl=en
6. Explore our Help Center, which is full of useful information about qualification, training, and more. Visit the program Help Center at: https://adwords.google.com/support/select/professionals/?hl=en
7. Take advantage of AdWords promotional coupons: Once you become qualified through the Google Advertising Professionals Program we will provide you with 20 coupons, in the amount equivalent to $100 each, which may be applied to new client accounts. You can use them as an incentive for new advertisers to try AdWords and sign up through your company. You will receive your coupons in a separate email from us within one month of qualifying as a Google Advertising Professional – please note terms and conditions apply.
Congratulations on your enrollment in the Google Advertising Professionals Program! We look forward to all the great things you’ll do as a member.

If you have any questions or comments, please click the ‘Contact Us’ link at the bottom of your program page after you log in.

Sincerely,

Google Advertising Professionals Team

You have received this email because you recently signed up for the Google Advertising Professionals programs.

I was in Seattle recently and I met up with some of my friends from college, most of them worked for Microsoft. Wait, I think it was everybody who worked for Microsoft and there were people from the server group, guys who were working on the long awaited Windows 7 to some guys working on the infrastructure of their internal applications. One thing I heard from them were “Microsoft and the new anti virus” and everybody was given a beta copy.

Recently, Microsoft entered into the highly lucritive anti virus industry. In 2006, the industry was estimated at $4 billion and growing at 13.6% from the year before and that industry continues to grow as computers become more affordable. The new software released on Sept 29, 2009 is called Microsoft Security Essential and the it is a free download. Yes, FREE. The Microsoft Security Essentials provides real-time protection for your home PC that guards against viruses, spyware, and other malicious software. 

Reviews so far looks positive as it is simple to use, quiet and efficient. It is compatible with WIndows XP, Windows Vista, Windows 7 and you must have a genuine Windows to run the program. One cannot run Security Essential with other anti virus applications. The Security Essentials public beta also took fourth place in a recent roundup of free antivirus software. In a tests conducted by AV-Test.org, the Microsoft Security Essentials beta detected 97.8 percent of malware.

For a free application, I give it two thumbs up!

Link to download Microsoft Security Essential

Today, Google sent out about 100,000 invitations to the Google Wave for the Beta users. The Google Wave project was revealed at the Google I/O on May 27 – 28, 2009 in Moscone Center, San Francisco and limited account were given to those who attended. On Oct 1, 2009, it was released to beta tested who did not attend the I/O. The Google Wave is basically a communication and collaboration tool that works with richly formatted photos, text, videos, maps, and more. According to Google Wave‘s website:

A wave is equal parts conversation and document. People can communicate and work together with richly formatted text, photos, videos, maps, and more.

A wave is shared. Any participant can reply anywhere in the message, edit the content and add participants at any point in the process. Then playback lets anyone rewind the wave to see who said what and when.

A wave is live. With live transmission as you type, participants on a wave can have faster conversations, see edits and interact with extensions in real-time.

This created a buzz in the online tech and create a market for “entrepreneurs” who got the invite. Within minutes, ebay was flooded with Google Wave Invitations and some of the invitations were listed and sold  for $89.99.

Humm… so next time, be one of Google’s tester or be on their active list and you might be able to make a lot of dole.

I was one of the first few people who got a GMail invite when they were beta testing it and I could have sold mine for a fortune on eBay but it wasn’t in me. I did give out a dozen free invites to co-workers, friends out of the 100 invites I got. So, anybody for a free Gmail invite? 

$89.99/invite X 100 invites = $8,999 (Quite a nice change…)

The new Google Wave. 100,0000 invitations was sent out on 10/1/09

Adv: Send money internationally via Xoom

I was helping a company do a competitive analysis on a pro bono basis, and I came up with a short page for “intro to affiliate marketing”. I thought that I will post it here to give merchants (advertisers) an idea of affiliate marketing and an illustration of affiliate marketing.

AFFILIATE MARKETING DEFINITION
Affiliate marketing is an advertising channel in which advertisers (merchants) pay publishers (affiliates) only for results, such as a visitor making a purchase or filling out a form, rather than paying simply to reach a particular audience. This “pay-for-performance” model is in essence the modern version of the “finders’-fee” model, where individuals who introduce new clients to a business are compensated. The difference in the case of affiliate marketing is that advertisers only pay their publishers when the new client introduction results in a sale or a lead, making it a low-risk, high-reward environment for both parties. (Source: CJ)

MODELS
The two most common models are:
- CPA (Cost per action) – Commission paid based off the % of a sale, it is sometimes called “Revenue Sharing”. A company utilizing this model usually carries products for sale. i.e. Wal-Mart, Target, Buy.com which might pay 3% on the total sale.
- CPL (Cost per lead) – Fixed commission paid on each completed registration.
A lead generation model program might include companies that offer services like Match.com, LendingTree.com, DentalPlans.com which might pay $15 per registration.

MERCHANTS
Merchants are basically advertisers. They are looking to drive traffic to their website by working with affiliates. Merchants would push out banners, text links, dynamic rich media, RSS, email templates, etc to assist affiliates with the necessary tools and content so that affiliates are able to drive traffic to the merchant’s website.

AFFILIATES
Affiliates are publishers that will take the banners/content of the merchants and publish it on their website or other channels with the goal to help the merchant generate a sale/lead, and in return make a commission.

NETWORKS
It is basically the market place where the advertisers and publishers are able to meet and conduct business. It is like an eBay for advertisers and publishers where advertisers are able to push out offers, find new potential publishers while publishers are able to login, look for appealing offers, check their commission and communicate with advertisers.

TRADITIONAL MARKETING vs AFFILIATE MARKETING
In a “Traditional marketing”, merchants would broadcast their marketing message to consumers utilizing some of the online marketing vehicles. With this method, it can get relatively expensive to reach a particular audience and there is no assurance of ROI.
See illustration below for traditional marketing.

1. Merchants

2. Broadcast

3. Audience / Consumers

In “Affiliate Marketing”, merchants are able to partner with affiliate and broadcast their marketing message to a particular audience. At the same time, the affiliates are bearing the cost to reach out to audience with the goal of making a commission. See illustration below for the affiliate marketing model.

1. Merchants

2. Affiliates

3. Broadcast

4. Audience / Consumers

In the book, Stealing MySpace by Julia Angwin (published in 2009), it brought up lots of interesting facts especially in the earlier years. Here are some things that you might not know about that small company that started in Los Angeles, CA.

• Domain name (MySpace.com). The original domain name was bought and utilized as a free online file storage and at its peak, it saw 7.5 million registered users utilizing their service. They competed with XDrive which offered 100MB of free space, while MySpace offered 300MB. They folded and that domain was bought by DeWolfe of ResponseBase for $5000.
• Spam and trash. ResponseBase who developed MySpace did everything from spam, small trashy remote control cars which had a high return rate, useless eBooks which had lots of complaints. ResponseBase was also involved with spyware and unauthorized pop-up installation. ResponseBase was part of eUniverse which was later rebranded as Intermix.
• Rip Off concept. MySpace were no innovators. They copied Friendster, one after another application. They even copied some applications out there which resulted in them being sued and they settled out of court, to renaming some of their applications. i.e. hot-or-not. MySpace was developed to go after Friendster’s market, as they saw Google offering Friendster $30 million in Summer 2003.
• Ownership. MySpace was a side project for ResponseBase and ResponseBase was owned by Intermix. Intermix was bought my News Corp, not MySpace. News Corp was interested in acquiring MySpace but bought Intermix to get to it.
• Price. Intermix was bought for $580 million by News Corp. Unknown to the general public, some of the people who came up with MySpace pocketed $75 million over two years following the sale. DeWolfe and Anderson got $30 million for two year per person, which other shared $15 million over two year.
• Contender. Other than News Corp, Viacom was actively looking to buy Intermix due to the success of MySpace.

As reported on CNN, Internet boot camp operators are under investigation after a youth boot camp attendee died and another was admitted in critical condition.

Well folks, this is happening in China where the parents are sending their kids to these Internet boot camps that have sprouted up like mushrooms after storm. Internet use has skyrocketed in China, especially among teens and young adults. Knowing about this alarming addiction, Chinese parents have turned to hundreds of training camps that offer to wean their children from excessive Internet use. It is estimated that there are over 400 private rehabilitation clinics which charges about 5,000 Yuan (about US$750).

The teenager who is in critical condition is 14-year-old boy allegedly beaten at a boot camp is suffering from kidney failure and has water in the lungs. The boy was enrolled in the camp on August 4th, 2009. He was allegedly beaten three times between August 4 and August 11, which boot camp counselors denies that citing that “he fought with attendees” as he did not get along with them. Police discovered the boy in solitary confinement last week and he was taken to a hospital, according to media reports. He was discovered by accident after other attendees complaint about their own mistreatment.

In another camp, a 15-year-old died after his parents sent him to a summer training camp for his Internet addiction, according to Chinese news agency Xinhua. That camp was in south China’s Guangxi Zhuang Autonomous Region. Authorities detained several counselors and were investigating the incident. Injuries found on the body indicated the teen had been beaten severly, Xinhua reported.

Wu Yongjing, the man who established the military-style camp, admitted to the BBC that youngsters were sometimes subjected to “physical punishment.” Last month the Chinese government banned electro-shock therapy as treatment for Internet addiction after abuses were reported. Internet users claiming to have received the treatment wrote in blogs and forums about being tied down and subjected to shocks for 30 minutes at a time.

“Physical punishment is an effective way to educate children — as long as it can be controlled,” he said in an online story Wednesday.

So if you are in China and you hear mom saying “Get off the PC”, I think she means it.

MySpace, the once big dog on the block when it csomes to social networking announced today that it is acquiring iLike for $20 million to try to stay ahead of the curve. MySpace is trying to reinvent itself to stay ahead of the competition, i.e. Facebook.

In May 2008, MySpace was flying high with 74 million visits that month coming from U.S. alone. MySpace’s closest competitor, Facebook had only 36 million visits for the month. In May 2009, Facebook caught up with MySpace and they surged to 70.28 visits compared to MySpace which concluded the month with 70.24 million. If you are doing the math, Facebook grew by 97 percent, which MySpace shrunk by 5%.

iLike is a music-sharing service is considered the most-used music application across all social networks and, most notably, has a strong presence on MySpace rival Facebook.

Just five days ago (8/14/09), iLike launched a music download service this afternoon, offering users MP3 downloads for $0.89 to $1.29 per song. Previously the service only offered users the ability to sample 30 second clips of songs, or restricted full streaming via a partnership with Rhapsody (now phased out).

In April 2009, MySpace selected Owen Van Natta, a former Facebook chief revenue officer and vice president of operations to run the company as the CEO of MySpace. Natta hope that this acquisition will help slow down Facebook’s growth and in turn help spur its growth.

Back when in the good old days, there was only one decent way to get on the internet – NETSCAPE (I wouldn’t consider telnet a way to reach the WWW). But with Microsoft’s push for Internet Explorer and the initiation of the “browser wars” in the 1990s, that led to Netscape’s demise. Following that, Microsoft via Internet Explorer controlled 90% of the browser market.

Marc Andreessen, the founder is back and he is back with a vengeance. Andreessen who is now a VC is backing up the company that he co-founded, RockMelt. He co-founded this company, then sold it to Hewlett-Packard in 2007 for about $1.6 billion, but he is now back in the “browser war” when he poured money into the RockMelt as a VC.

At present, the browser market landscape consist of:

I know it can be a lucrative business to control searches and know more about your web users by controlling the browsers. Clearly, Google knows about the importance of browser and paid Mozilla, a nonprofit organization $75 million in 2007 to be their exclusive search partner, not to mention, Google also launched their browser -Google Chrome.

There were speculations that RockMelt is working with Facebook, but this was quashed by a Facebook spokesperson today.

That bring me to the questions,
1) Do we have more than enough browsers?
2) What can RockMelt provide that can’t be easily duplicated by Mozilla, Microsoft or Google with a month or so?
3) Do you think HP will recover their 1.6 billion investment?

*Note: Google Chrome was released on Sept 2, 2008. So they are still a new player in the market.