Web Publishing

There is currently severe flooding in the Manila area. This is being described as the worst flood there in over 40 years. This is a disaster; the AP is reporting 80 dead.

As many of you who know me, I have been a strong advocate of using Filipino programmers. If you happen to have staff in the Philippines please provide them with extra support.

I have a riddle for you.

When can you divide 100 by 5 and end up with a result that adds up to less than 100?

The answer, when you divide your attention.

In the past few years I’ve seen web entrepreneurs of two categories. The first is the category of people doing lots of different loosely or unrelated projects. The second is people who do different things, but when they are different, they are related. Project A compounds the value of project B.

Take a guess which category is full of people running successful multi-million dollar companies today.

No, not me, but the 80.3% of 2009 college graduates who don’t have a job upon graduating.

Big or small, you have a good shot at finding some free interns for your company this summer. I’d recommend giving it a shot.

Don’t pay them. If someone is ready to work for free there is a good chance that they are really interested in what they are doing.

If they work out well, you’ve just landed a good employee — which is damn hard to find I might add. If they don’t work out, your out $0 and you can move on to the next person.

Suggestion for current college students: switch your degree to something in very high demand. If you can’t figure that one out on your own, I suggest study of another type.

Just a few weeks back I happened to catch a few parts of the documentary, Enron: The Smartest Guys in The Room. I was shocked at how closely Enron’s actions paralleled my understanding of how the banking system generates profits. The only real difference? Enron traded “energy”, banks trade debt.

One of the things I do fairly well is reverse engineer business models. As an entrepreneur and investor this is probably the most important skill you can have. Anyone can be a copycat, but that just doesn’t mean anything. If you are truly good at doing this it allows you to copy best practices while ignoring the stuff that doesn’t matter.

When comparing Enron with American investment banks I saw underlying business models that were disturbingly close. In itself that is worth a post, but I don’t have the time to make it (this one is a stretch in itself but I feel it needs to be made.) Here specifically I am interested in how both hid and continue to hide liabilities off the balance sheet.

Truthfully I suspect a ton of companies have done or do similar things Enron did. The companies Enron dealt with didn’t seem to have a big problem helping them out (anyone remember Arthur Anderson?) The banks are more or less doing the same thing, except they can spend billions of dollars on lawyers to ensure everything follows ever single law while gliding through the loopholes. Enron’s mistake was playing dummy while leaving the job up to an amateur. Oops.

It was no surprise to me last night when the following story popped up on Bloomberg.

Bank of America Corp. Chief Executive Officer Kenneth D. Lewis may face scrutiny by the U.S. Securities and Exchange Commission for failing to disclose mounting losses at Merrill Lynch & Co. because of pressure from federal regulators to complete the takeover.

…

Cuomo revealed in a letter yesterday to Congress and federal regulators that Lewis testified in December that then- Treasury Secretary Henry Paulson may have threatened to remove the bank’s management and directors if the lender tried to back out of buying Merrill. Lewis said he was instructed by federal officials not to disclose Merrill’s losses, his desire to back out of the merger or the intervention of regulators, according to Cuomo.

(By the way, did you know when Hank took the job as Treasury Secretary he had a net worth of around $500 million? I have no idea what it is now.)

There have probably been a whole lot of illegal things going on within the federal government in regards to the banking bailout. This can not be the first or the only.

What makes this story even exist is that there are regulatory checks and balances in place. The SEC has a job to make sure laws are being followed. They have the authority to enforce those laws and they will.

The Federal Reserve along with the Treasury, on the other hand, act alone and are pretty much making up the rules as they go along. The elected representatives who should be watching over them may or may not have any idea what is going on. Hell, it sounds a lot like Abu Ghraib.

In all of the businesses I have examined and studied I have never seen so many smoke and mirrors. Henry Paulson, Ben Bernanke, and Timothy Geithner are delivering the lies and bullshit by the boatload. I am a complete loss how anyone in the news media actually believes what any of these guys are saying. Anyone remember this guy?

I am not naive. Unlike nearly everyone protesting the bailouts and intervention I know all too well what would happen if regulators and the Fed stood back. Countless bank accounts, retirement accounts, life insurance pools, insurance pools, and pension funds would be heading straight to zero. Many have already gone to zero, most have taken serious haircuts.

Will the alternative path we are taking be less painful or shorter? I don’t know.

Pay attention what banks you do business with. If necessary, consider placing bank failure clauses in your contracts. Irregardless of what the FDIC does a few shake ups in the upcoming could very well bankrupt your company. If you are overseas, you should be paying even closer attention. Chances are your bank is holding some of the horse shit debt US banks minted.

Just saw this on Digg: http://adage.com/article?article_id=135735 “After its package redesign, sales of the Tropicana Pure Premium line plummeted 20% between Jan. 1 and Feb. 22, costing the brand tens of millions of dollars.”

I’ve been busy. Too many details to go over now.

Here are a few things I’m seeing — many publishers are waiting in line to get wiped out.. Ad rates are down everywhere. Publishing companies both online and offline are laying off lots of people and going bankrupt.

The best prediction I can make is those with the least overhead survive. Each time a competitor bites the dust that frees up more of attention that can be driven to your own properties. Armed with a generic domain name a single person can now establish niche dominance (hint, you can’t build all that content on your own.)

On the fundamental economic level things have taken a turn for the worst. The whole model that relied on credit growth is dead. The global credit super cycle did collapse. At this point, there is no turning back. What we are dealing with is tens of trillions of dollars, not 2 or 3. My guess is that real estate prices and the US stock market could very well be headed to 1980s levels. The implications to the lower & middle class will be devastating. A large chunk of the upper class will be joining them. I can’t even begin to describe how politically destabilizing this will be for the developing world.

It is a fair assessment to say in recent years savings & investment have been confused with consumption. Baby boomer retirement savings were actually just financing the extravagant lifestyles of a select group who cashed out as others bought in. Now they won’t be retiring.

Again, my suggestions remain: kill your long term liabilities and hold on to cash. If you are positioned to benefit from a down turn (my company is) hire good people.

There still is money to be made out there. The people who do well during a downturn are the ones who cash in big during the next bubble.

Awesome story on Markus — http://www.inc.com/magazine/20090101/and-the-money-comes-rolling-in.html

Given the lengths of the recent blog posts, may be I should downgrade to twitter?

Great post by veteran domainer Rick Schwartz: “Whatever has happened in 2008 really won’t even begin to manifest itself until 2009. The fallout of all this has not hit yet. It will.” (investment bankers may feel differently)

Have goals for 2009? As always, I set mine about a month back.

There are a few different posts about carpel tunnel and ergonomics here.

I have been using a laptop keyboard for the past week, minimal problems. The difference? An Aeron chair. The difference is incredible.

Aaron Wall has a great post summarizing some of the recent problems in the advertising industry for publishers.

I saw this one coming, which was why I flipped my focus from selling inventory (as a publisher) to buying is (as an advertiser.) I guess I should change the name of this blog.

Many in the online advertising side have business models involving selling overpriced garbage to their customers. One of my friends recently dealt with a major US bank’s online advertising campaign. Every question he asked them — what sites are your ads being shown on, which banner ads convert the best — resulted in the answer, “we have no idea.”

Here is why you should pay attention as a publisher. If you think things are bad for you, they may be worse for ad networks and agencies you deal with. Aaron highlighted a story over at Techcrunch — “Glam blames the economy and extends payment terms from 60 or 90 to 120 days.” If I heard that from any company I dealt with, I’d assume they were at risk of going bankrupt and count on never being paid.

As I pointed out previously this is no time to close up shop. Most of the decline in ad inventory prices may be from advertisers ignoring their ROI. That means better and smarter deals on inventory for now. Are you a publisher? Great time to expand your community base through advertising. Running an ecommerce site relying on Google’s free traffic? Start learning the ins and outs of performance advertising.