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This came as news to me when Friendster.com was acquired by a company in Malaysia. Friendster.com used to be the leading online social networking site and was often copied by the one Maga social networking site – MySpace.com (see book I finished on Stealing My Space).

I know that Friendster.com is a big hit in countries like Singapore, Indonesia, Malaysia, the Phillipines and maintains a strong foot hold in Asia, but the growth of the company within the last few years were very disappointing. According to an article in Wired.com (Issue 12.04 | April 2004), they valued Friendster at $53 million. After five years, Friendster was only able to double its value in comparison to companies like MySpace or the current social networking website titan, Facebook which is able to command a higher value and have seen a huge surge in growth.

A couple of days ago, Frindster was sold for a price tag of $110 million to a Malaysia company – MOL Global. MOL Global is an affiliate of online payment solutions provider MOL AccessPortal Bhd, which has Berjaya Corp Bhd chairman and chief executive officer (CEO) Tan Sri Vincent Tan as the principal shareholder.

An industry blog, TechCrunch, had in July valued Friendster at US$210mil, a fraction of Facebook’s estimated US$10bil valuation. According to Compete.com, Friendster is currently generating 1.1 million unique hits in Nov 2009 while Facebook is generating 128.3 million unique hits for the same period.

I doubt that Friendster will come close to what Facebook is doing but I am sure that MOL sees a value in Frienster to cough up $110 million, and if TechCrunch is accurate in their estimate, then Friendster was sold at 50 cents on the dollar.

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

Reaching your potential customers is critical to drive sales and email marketing is one of the lowest cost in any marketing channel. Email marketing is valuable to any business owners as it can be used to trigger sales, send out reminders or just used as a tool to reinforce a sale.

I have been blessed to worked with many email tools from custom programs and BCentral (Microsoft’s first attempt to penetrate the business community with their B2B applications which consisted of an email program) to some newer Email Service Provider (ESP) tools like iContact and Email labs.

Of all the ESP that I have used, I would recommend iContact due to its functionality and ease of use.

Here are five good reasons why iContact is better than some of the other email applications that I have used. Click here to learn more about iContact.

	KISS (Keep It Simple Stupid) Dashboard You do not to be a rocket scientist or a brain surgeon to use it. The dashboard is easy to understand and getting to the functionality you are looking for is never more than 3 clicks away. It is easy to setup and manage a new email campaign. You can easily segment an email list and see its performance easily without knowing any programming or queries. See screenshot below.
	No hassle management I have managed email systems where we would send out more than a million opt-in emails a month. You can have an award winning HTML email, or you can be giving away a trip to the moon but without a good delivery rate, it is worthless. I can tell you honestly that it can be a big hassle to manage the whitelisting process with ISP but with iContact, they have contracts with major ISPs to whitelist your list and promise a deliverability rates between 98%-99%.
	Emails, Surveys, RSS, social tools and more iContact provides email and other sophisticated features such as surveys, RSS feeds, autoresponders, to social tools and in one easy-to-use all-inclusive product without any additional charges. They often enhance their products often push out new releases without any upgrade cost.
	Tools to help you started If you do not know HTML or don’t want to pay a expensive graphic designers to come up with an email newsletter, iContact provides over 250 free professionally designed email newsletter templates . You can simply pick the design theme that fits your business or message, modify it with your own message and send it through their simple yet reliable system.
	ESP Free Trial If you are just looking to test the water, check them out as they have a free trial. Click here to find out more about iContact.

Easy to use iContact email newsletter application.

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

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.

If you think you know internet/online markting, then you should know these twenty (20) terms or jargons that are widely used by online marketers. If you are need to the industry, it’s good to pick up some of these acronyms as it is often thrown around.