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How a Big Name Start-Up Fails

07/01/2009
Research Reloaded: 

Interesting analysis from GigaOm on why the video startup Joost, started by Skype founders, has failed. Long story short: They hired too many people too early, made a mistake in having geographically separate management early on, didn't get Big Media onboard, and probably most importantly... took too long to realize that browser-based, not client-download-this-software-based, video was the future. The summary: They were a 1990's tech company in a 2009 world. Their trouble shows just what a challenge starting something new can be. These guys had the money, the big names, and a lot of early momentum. In any case, I'm sure Skype's brilliant founders will be up to something new in the not too far distant future. Anyways that's the end of this post.. back to watching Hulu...

 

Joost, a much-vaunted online video startup, today announced that it will offer a white-label video hosting platform, thus entering a crowded market littered with the carcasses of other failed video hosts. The company is also losing its famous chief executive, Mike Volpi, whom it’s replacing with Matt Zelesko, the current vice president of engineering. And it plans to cut a portion of its workforce — between about 70 of its remaining 90 employees, according to Advertising Age. It also shut down its office in the Netherlands.

LogMeIn Has a Succesful IPO, Let's Get More of These

07/01/2009
Research Reloaded: 

Looks like LogMeIn IPO has priced well and these days every US IPO we can get coming out of the economy is great news. US economy... keep 'em coming.

 

Update: LogMeIn is trading at $20.13 a share in its first hour of trading.

LogMeIn, a Woburn, Mass.-based company that is going public, has priced at $16 a share, according to The Wall Street Journal. LogMeIn will start trading tomorrow under the ticker “LOGM.” With 6.7 million shares on sale, LogMeIn raised a total of $107.2 million. It’s $16-a-share pricing was at the high end of the $14-$16 range, showing that there is a significant market interest in this company, as I pointed out in my previous post.

Afternoon Reading: Why Dumber Regulation Might Be Better Regulation

06/30/2009
Research Reloaded: 

Interesting reminder from Deal Journal: Regulators can make mistakes too, especially when the regulations they implement are increasingly complex. Markets don't always get it right, but why do current policy trends seem to believe that regulators will do better? Markets of diverse participants enabled by economic freedoms also have the flexibility to adapt very quickly and learn information. Changing a regulatory system is a far slower and more onerous process.

 

Dumbing down regulation: Why would anyone want dumber regulation? Well, one of the biggest criticism of the U.S.’s current approach to financial regulation and Obama’s plan to overhaul it is that it relies on regulators knowing best. Writes Justin Fox: “We regulate because financial systems are fragile, prone to booms and busts that can have harmful effects on the real economy. But regulators aren’t immune to the boom-bust cycle. They have an understandable habit of easing up when times are good and cracking down when they’re not.

Report: Hotel Values off 50% to 80% from Peak

06/30/2009

From HotelNewsNow.com: California to see record number of hotel foreclosures
The number of California hotels in default or foreclosed on jumped 125% in the last 60 days. The state now has 31 hotels that have been foreclosed on and 175 in default, according to California-based Atlas Hospitality.

With 19.6% of the total, San Bernardino County leads the state in foreclosed hotels. Riverside County follows with 16.1% and San Diego County has 12.9%. Los Angeles County, with 12% of the total, has the most hotels in default. San Bernardino County is next with 9.7% and San Diego County follows with 8.0%.
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New Research on Walking Away

06/30/2009

Here is an interesting new paper on homeowners with negative equity walking away: Moral and Social Constraints to Strategic Default on Mortgages by Guiso, Sapienza and Zingales. (ht Bob_in_MA)

The WSJ Real Time Economics has a summary: When Is It Cheaper to Ditch a Home Than Pay? The researchers found that homeowners start to default once their negative equity passes 10% of the home’s value. After that, they “walk away massively” after decreases of 15%. About 17% of households would default — even if they could pay the mortgage — when the equity shortfall hits 50% of the house’s value, they found.
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The Pirate Bay Has Been Bought By A Public Company [Updated...]

06/30/2009

Details are a bit scarce at this point, but Martin alerts us to the news that The Pirate Bay has apparently been sold to a public company for 60 million SEK (about $8 million US) -- at least according to a press release from the supposed buyer, Global Gaming Factory X (GGF). Apparently it's 30 million SEK/$4 million in cash and another the rest in shares in GGF. The company claims the acquisition will be complete in August, and that it will "launch new business models that allow compensation to the content providers and copyright owners." Separately, it appears GGF is also buying another technology company, called Peerialism.

Online Ad Rates Higher On Certain TV Shows Than TV Ad Rates

06/30/2009

We were just being told by a supposedly respectable media analyst that things like Hulu were anti-American, because it gave away content for "free" and could potentially bring down the entire media business. Yet, it appears that media businesses are learning how to monetize that online content quite well. Bloomberg notes that for shows like The Simpsons and CSI, online ad rates are actually higher than TV ad rates. There are good reasons for this, including the fact that advertisers recognize viewers of shows online are more committed to the shows -- in that they actively chose to seek out and watch that show, as opposed to just having the TV on in the living room while doing something else.

Is Piracy Also Increasing The Quality Of New Movies?

06/30/2009

We recently wrote about how the singer of the popular band the Fleet Foxes felt that unauthorized file sharing has improved the quality of new music, because it allows musicians to experience much more music, and that helps create more and better influences. This makes a lot of sense, as you realize how much creative content is really built on inspiration from other works. So, is the same thing true for movies? In a recent interview with film director and producer Tommy Pallotta (who did A Scanner Darkly), he talks about his latest project, American Prince, and its relationship to unauthorized file sharing. American Prince is a "followup" to Martin Scorsese's documentary American Boy from over thirty years ago.

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