A few years ago I took a wild shot and believed a guy named Markus Frind. He made some wild claims and quite a few people thought I was gullible because of it. Turns out I was right.

How do you know if someone really is who they say they are? The internet makes this judgment task exceptionally hard. There are no faces. You don’t even know if the person you are talking to is a female or a cross dresser who hasn’t showered in six weeks.

First, you need a base of experience yourself. Bullshitters can be caught quickly when nothing they say fits reality. If you don’t know a thing about the subject at hand, you are flying blind. US investment banks had an easy time hawking complex and overpriced financial services to municipalities. Con artists know making marks feel smart is incredibly powerful.

Second, look at motivations. Does this person have something to sell you or some deal to do? If they have blatant commercial intent, set your credibility meter to 0. People will say and do anything to make money. But hey, we are in business. I have something to sell and so does everyone else I know. The key is do they have something to sell you.

Third, be able to test what you hear. If a claim is untestable or unprovable then your best off ignoring it. You can immediately throw out cult leaders and instead spend your time focusing on reality.

I’ve met many people through the web. Some are genuine, others are clearly liars. Most I’ll just never know who they really are. However, I don’t really care. In general, I judge people based on the usefulness of the information they provide. If a get-rich-quick blogger who never made a dime in their life writes something, and I make $10,000 off it, wonderful.

Because I have been running my business for a while I have some sense of the accuracy of an individual’s advice (rule number one.) If 90% of what someone says is in line with what you already know is true, its a good bet the remaining 10% is true.

Just starting out? Then you need to build up some first hand experience before going all on based off of what someone else says.

One of my favorite bloggers, Diorex, is back online. He has put up his old posts with no promises of making any new postings, but he is returning to my RSS subscriptions anyways. I’m sure if he has something he really wants to say it will be posted. Check them out at http://www.diorex.com/.

If you never read his blog before, check it out. Between his posts and talking to him in person at Ad-tech last year made me critically re-think my business for the better. I suspect he also had quite an influence on Paul over at UberAffiliate too.

Sometimes a picture is worth 1,000 words. Via Adwords:

Meanwhile Yahoo is busy building more niche portals so that is can sell you some ridiculously overpriced CPM inventory.

I am a picky reader. I prefer to take topics one at a time and study them very closely. Recently I decided to start going through all of Warren Buffet’s Letters to Berkshire Shareholders.

The past few years Warren Buffet has made reference to his partner’s book (Charlie Munger), Poor Charlie’s Almanack: The Wit and Wisdom of Charlie Munger. The book went on my “to read” list. However, after seeing an excellent post on Marc Andreessen‘s blog — The Psychology of Entrepreneurial Misjudgment, part 1: Biases 1-6, I immediately ordered two copies of the book.

Charlie Munger preaches the use of multiple mental models when approaching business and investing. I thought that I had a similar approach. That is, until I read Charlie has about 100 (I’ve been using maybe 4 or 5.)

The book gives a run down of Charlie’s life along with a collection of 10 talks he has given. There is a fair bit of repetition in the book’s 500 or so pages, but not so much in a bad way. Other than that, I have nothing bad to say. Do not expect a point-by-point list of what you should exactly do. This is a book about how to think so you can solve problems.

A blog review can’t do this justice. If you want a preview, check out Marc Andreessen’s post I linked to. Like it, you’ll like the book. You can grab a used copy off of Amazon, or get a new copy direct from the publisher.

In my previous post I said that Google is a data company, Yahoo is a content company. How so? They are both search engines, right?

Both Google and Yahoo provide lots of web services. Yahoo always was a portal & search engine, but over the years Google has continued to add more “portal” services — Google Maps, gmail, Google finance, and so on.

Take a closer look at the companies. Compare Google Finance to Yahoo Finance. One of these companies needs an engineer with a cup of coffee, the other needs an engineer, editor, and staff.

Yahoo is focusing on their own on-site content because of the display advertising revenue, there is no doubt about it. There is a problem with this approach. Short term, its not helping them keep up to pace. Long term, this model risks killing their company.

Yahoo is demonstrating a strong interest and desire to pursue an old model — a centralized content distribution structure (walled garden has been a popular phrase lately.)

Consider the two models. Yahoo pushes traffic to their own properties, presumably of good quality content. Google pushes traffic to outside properties, of the most popular content. Google doesn’t have to struggle or focusing on providing fresh content of the best caliber day after day. And, to make things even better, every hit to something the audience like is yet another point for Google’s brand value.

Take a look at YouTube and compare their traffic data to the monster video sites that existed years prior (such as eBaumsworld.) The owners of eBaumsworld certainly weren’t generating their own content. Like Yahoo, they were re-ordering and collecting outside content, presumably by hand. No matter how good the human element got at it, at some point, Youtube’s exponential growth rapidly dwarfed these older video sites within mere months.

Why? Because automated systems can sort and aggregate data far faster and far better than human editors.

Weigh these two things: As Google’s engineers work on rolling out next generation systems Yahoo’s editors have been building sub-portals aimed at a specific age demographic of women.

10 to 15 years out, where will Google be? Where will Yahoo be?

I’ve spent a lot of time weighing content verse data myself. Data won, I changed my business model. More on this topic in the near future.

Tech bloggers everywhere have been talking and throwing out predictions over the failed Yahoo Microsoft merger.

I’ll keep it simple. Google is a data company. Yahoo is a content company. That difference is night and day when it comes to focus and performance.

Content is a fine business model. Long term, a “be everything” model it is destined for failure. Niche publishers and aggregated feeds will grind away at their audience and profit margins.

Short term, the mis-focus has caused Yahoo to fail miserably by screwing up Panama. Also, for far to long they allowed garbage traffic access to the same PPC feed as high quality publishers and domainers. And thats just the beginning of the list. These are mistakes data companies don’t make. Google sure didn’t.