Rafael Sosa’s Weblog

I applaud Rupert’s aggressive bid for Dow Jones and their line of newspaper which include the Wall Street Journal (WSJ). In a bid of $5 billion that would value the company at nearly 17 times estimated earnings, I see much more room for growth. Murdoch’s vision has transcended from the traditional media space into an online arena that is still being invented as we speak. His success in the acquisition of MySpace, the major social networking website on the Internet, positions Murdoch in advantage to understanding the hidden treasures that are locked in the vast cyberspace.

This is purely an online play. An interesting valuation justification is the fact that the company currently receives just 30 percent of their revenues online. The strong physical brand held in Dow Jones and their Wall Street Journal was kept mostly captive to the physical limitations of distribution. Furthermore, the costs associated with the physical delivery of information are about to disappear. In the near future, publications like the WSJ will reach the entire cyberspace with minimal costs. The current online subscription method for newspapers is an old way of dealing with selling valuable content. In the near future, with the proliferation of technologies allowing for micropayments, newspapers will be able to do something they never were able to do before – charge per article. In this new media space, traditional newspapers will benefit from this by reaching a wider number of readers, and receiving generous revenues from it.

Video of news from the market including Murdoch’s bid

As one of the beta testers of Microsoft’s Adcenter platform, I have to say that there is a long ways to go before going out of beta, but the product looks promising. At the moment, creating an ad campaign is painfully slow and at sometimes it completely crashes. This flaw alone keeps me from creating any other campaigns. In the process I found myself having to force the back button from my browser, the forward, and waiting a long time to see if the process was computing or just plain lost. These critical flaws must be fixed before Adcenter can aspire to take a big chunk from the current heavy weight champion Google Adwords.

There is light at the end of the tunnel for Adcenter. The overall menu of advertising targeting and specifications blow the competition away. I was amazed at the flexibility of the system to allow for multiple relationships between variables like the variables of time, demographics, and bids. In a campaign, I could bid $0.10 for the keyword “widgets”, but increase my bid to $0.30 for “widgets” if it is being shown to 18-24 year old males from New York on Wednesdays at 6-8PM.  This flexibility is outstanding and it’s something Microsoft can use to gain market share against Adwords – of course, if MS can fix the crawls and crashes.

Everything else from the experience was similar to Adwords and Yahoo’s product. You select a keyword, get related keywords, measure conversions, and estimate the position and amount of traffic expected based on your bid. Microsoft recently announced that they will be adding Adcenter’s client ads to their network of high quality sites. This announcement should place them at a better position of providing much more traffic than just by search. At the end, it will depend much on Microsoft’s capacity to take this product out of beta and aggressively increase their network of sites displaying such ads before Google catches up to the demographic targeting offered by Adcenter.

The past week sales for .Info domains resulted in these purchases:

Money.info $22,000

Bakery.info $9,000

Facts.info $2,550

Floors.info $2,470

Fences.info $2,470

Purchase.info $1,050

The interesting story is the purchase of Bakery.info for $9,000. As reported by DNJournal, the name was originally purchased for $1,850 at SnapNames in 2004 and then resold at a slight loss for $1,760 at Afternic early this year. The domain was finally sold last week to a bakery business in England for a $9,000 price tag. This shows a large discrepancy in value appreciation for the .INFO extension.

In the United States, .Info has had a weak acceptance. This holds true for all extensions other than .com, even their own .us country code extension. The reality for Europe is completely different. We can see how strong .co.uk is in England, and .Info is also surprisingly strong overseas. A graph by Grange Project Management (gpmgroup.com) shows a strong adoption of .Info in eastern Europe. Countries like Poland and the Czech Republic have registered more .Info domains than .net and .org. The price of .Info domains is also very well valued. An example is how Czech concrete company BEST, bought Best.info for $20,880 back in 2005.

(Grange Project Management)

Given the large amount of undeveloped .com domains, I see an opportunity in .Info being used to develop useful and informative websites under prime domain keywords. An example of this is the travel industry and how countries are developing their official travel sites under the .Info extension. See Spain and Austria. Private companies are also investing in this trend. Camping.Info sold in 2006 for $28,100 and has since been developed into a large Camping information website for Europe available in 35 languages. It will be interesting to see the future development of equally attractive .Info domains.

In a sign that seems to support the rebirth of Internet ad spending, popular site HOTorNOT has become completely free. They circled an email to their members today to announce that online advertising would be sufficient to support the costs of running the website, so it was no longer necessary to charge their members. The site became an overnight sensation in 2004 and has since seen a slippery decline in their traffic. However, they still manage to have retained enough traffic.

I expect for this trend of 100% ad supported sites continue to fuel the second wave of the Internet boom. As more and more companies rely solely on revenues from online advertising, it is difficult to see this as a long term sustainable revenue source. Nonetheless, this announcement will probably reignite HOTorNOT’s traffic numbers and take a bite off of websites in the dating field charging for memberships, such as Match and Yahoo! Personals.

In the meantime, all you single souls have a chance to hookup in the comfort of your homes for free.

A friend sent me this video, and it truly captures the history and future of what software will become. This future is almost here.