The 2009 edition of the SIIA Previews is playing to a gloomy investment environment this year, as highlighted in data presented in the beginning of the afternoon's session by hosts PriceWaterhouseCoopers. Kate Bluvol, Audit Partner for PWC, noted that 4Q08 saw a 26 percent drop in venture capital deals over the same '07 period, though apparently total '08 investment was up a tad. IPOs were near-nil for 08 at 6 for the year, compared to more than 80 in '07. A hopeful sign is that investment in first-round companies was actually up as a portion of overall investment for the year, at 24 percent as compared to less than 17 percent in '07. So, hopefully, the growth companies for the recovery period over the horizon are still in place. Nevertheless, it's clear that it's going to be tough sledding for most entrepreneurs, especially those ventures which cannot generate clear cash flow at a disciplined rate. Another interesting note from PWC stats is that west coast investments are only about a third of last year's gravy train: the horns have been pulled in for now on pie-in-the-sky Valley plays, but there are a broad array of other investment sectors such as energy where money is still flowing. A person in the audience claimed angel money is down 50 to 70 percent, and the panelists seemed to concur.

This is all good news for companies like Dow Jones, which benefited from the acquisition of content harvesting service Generate last year, typical of the deals that major publishers are going to be executing during this value-picking season. Types of revenues streams are also a factor: Panelists Tom Aley, SVP and Managing Director, Dow Jones BRI and Ed Reitler, Parter, Reitler Brown & Rosenblatt LLC, emphasize that in a down market for ads revenues from viral marketing schemes and other social media-inspired plays are important streams to bolster cyclical factors. Whatever the play, though, the funds and rounds are smaller and fewer in between to get these returns flowing. "There's a lot of money right now," noted Joel Dreyfuss, and Tom Aley noted that there are funds out there still generating funds for new ideas, are eager to listen to good pitches. He noted B2B subscription services as a key point of interest.

Will U.S corporate compliance regulations such as Sarbanes-Oxley be loosened to lower the costs of corporate reporting for early-stage companies? It's speculative at this point, but with the need to encourage new energy technologies it's possible that the mood in Washington will balance the need for investment regulation with investment growth. Here's hoping that young companies get the funding and the media attention that they need to keep the transformation of the content industry continuing. As noted by Larry Schwartz, President of Newstex and Chair of the Previews event, several of the companies highlighted in earlier Previews sessions have gone on to very positive exits and/or successful ongoing business models. Following are relatively live impressions of the presentations by SIIA Previews companies.

RSuite CMS - Barry Bealer, Really Strategies, Inc.

CMS for publishers, run the whole show or just certain functions, make more efficient production environments, easier to repackage content and create new content products. Highly scalable, open and extensible. Easily integrated with other packages, ROI in months, not years. Audible.com used RSuite CMS, applied over a hundred of metadata fields to licensed content, increased production throughput 100 percent. BloodHorse mag and Web site, took in raw data and transformed it into useful pubications rapidly. Sage Publications takes offshored content, packages it through RSuite CMS and fans it out to specific publications and parters automatically. Really Strategies started as a consultant, then launched RSuite, now does both. Major publisher will be able to decommission six legacy systems with RSuite.
COMMENTS: I am a partisan of sorts with Barry, I do believe that they've done an excellent job of creating a production environment that makes it easy for publishers to either fully automate content formatting and generation and/or to get editorial teams to intervene and add value easily to well-structured content. Metadata capabilities are first rate.

Arity Corporation - Peter Gabel, President

People drowning in information, Arity organizes research. EXPRESSway helps researchers to focus on research content. Natural language processing, example, hearing loss, broad and narrow categorization and information on treatments, plus information about why a choice makes it through the sieve. Content from proprietary and subscription sources, helps people to gather and share information, organize information into notecards, can do on-the-fly mashups and analysis. Plays to casual researchers as well as research professionals. Tried at Kodak, WK, Pfizer, Elsevier, Turner, Monster, FedEx.
COMMENTS: I am fairly skeptical of these kinds of tools, not because Arity is a bad implementation but more because it's a crowded space at this time and there are only so many ways to slice taxonomies and ontologies. But the business model is good, working both directly and through enterprise publishing partnerships to solve business problems in a diverse array of sectors. Still in beta with publishing partners. Like RSuite this is solutions software that's getting productized. Not as sexy as Generate on the surface, but like Generate it's pretty well-targeted at solving specific problems in enterprise information. My guess: an acquisition target at a low multiple if the betas pan out. Not the strongest presentation of a pretty strong product.

InsideView - Umberto Milletti, CEO and Cofounder

Aggregates social media information and traditional business information and integrates it into key salesforce automation platforms with key analytics that can drive productivity. Strong leadership and investment team, customers are early adopters of productivity tools, 200+ customers, 6,000 end users, 96% renewal rate, lots of young companies but quite a few established companies. Smart Records from Jigsaw, Reuters, ZoomInfo and Hoovers blended into consolidated records. Injected into CRM applications for leads, opportunities, most recent and relevant information is at their fingertips. Well-integrated into workflows, not just mashups. Every person can see a different view of information, relevant to their work role and focus. Revenues from freemium model, subet of info on free side for CRM integration, pro model pays per month/seat. Integrates Google Apps, but unlike a Hoovers, this is more complete, fresher presentation. Can't mine cust DB, integrated in CRM. Social media aggregation key, calls it "socialprise," brings people up to date with key social networks without wasting time on social media products.
COMMENTS: This is a great play, neutral business information aggregation on key SaaS/enterprise/cloud platforms that includes analysis of both traditional and social media sources. This is good business information middleware, if you will, with a lot of high short-term integration value and an apparently good architecture for expansion. Strong presentation.

MixedInk - Vanessa Scanfeld, Founder and co-CEO

Collaborative writing tool developed by Cornell students/grads. Hard to get a single voice from individuals and communities. Community blends and rates content as it's contributed, top-rated version can be published by community. Example, past inaugural addresses from U.S. Presidents mixed. Can browse, rate and write. Currently top-rated version available. Rating on the criteria of "represents my view." If you like an addition in a wiki-like format can be added to another person's draft. List of versions is published, can be rated against others. Freemium and white-label custom integration model. Slate was an early customer.
COMMENTS: Interesting tool, I like the fact that it's easy to understand who contributed what to a piece via the pasting function. Needs help on business side to develop some core content, as Wikipedia was a lever for Wikimedia to get its software entrenched. Early stages, hopefully develops, use in government and politics could be a strong plus.

Prolifiq - Jeff Gaus

Helps customers sell image/formatted content more effectively, Getty Archives, Corbis, photos able to be released by sales teams easily. Cisco gets collateral out more efficiently. Able to activiate distribution via mobile devices such as Blackberries. Reuters using Prolifiq for their "Bluehouse" initiative. Profitable, cash-flow positive for two years. Helps stage content/collateral for helping sales to close. SaaS subscription model, revs/seat plus professional services.
COMMENTS: Question was "product or feature?" Good question, but I agree that it's a product. It helps people generate revenue, apparently with some success.

SBTV.com - Susan Solovic, CEO and co-Founder
"Just like turning on your television set." Top stories of the day or goal-directed stories. Small business resource - more than video, largest events calendar, "vast" video catalog, thousands of evergreen videos, podcasts, Internet radio, mobile content. Trusted voices, "don't have to weed through the dancing cat videos." 13,000 uniques at native sites, partnership with Hoover's, NFIB, Manta, Moli, Dell, Microsoft Office Live small business, others. White labels such as Tech Tactics, which Dell sponsors, they maintain editorial. Big advertisers. Profitable since '06, 15 mil ad views per month, 450K-850K unique visitors. Hoping to build via SEO and SEM strategy. Numbers starting to climb from it. Videos both from editorial staff and user-gen from SMBs, same search tools but non-editorial labeled to disavow editorial responsibility.
COMMENTS: Solid media play, good barriers to entry through editorial inventory, good potential but it will be a foot race in this economy to grow quickly enough. Seeking expansion capital.

Adgregate Markets - Henry Wong, CEO

Some creative and ad banner serving but the key ingredient is that it provides ecommerce experience in ad space. Verisign plus own encryption algorithm. 3X increase in actual product purchases, much higher CPMs, depending on contextual relevance. Advertisers can put it out many different ad networks or their own ad network. Marketplace of 130 bil for online ads, lots of upside. Customer Service - they handle first-line issues. Payouts are similar to other affliate ad network partners.
COMMENTS: Hot idea - transaction in context, I've been talking about this for a long time. Early days, but pretty good barriers to entry with security solution, good workhorse ecommerce solution that plays well with many.

Associated Content - Luke Beatty, CEO

Open content network, solves problem of consumers relying on search to find information. 200K content contributors, connecting their work with portal audience, pay cash for quality content. Help brand publishers, share ad revenue with content generators. Buyer Zone, Zappos gets white label content such as reviews that helps them to build out their portals with unique
content. 10 percent of content is video, more partners using it.
COMMENTS: Probably economically successful, low-cost content generation model, a step up from Helium or Pay-Per-Click, partnering strategy is smart, kind of a generic content engine. I am not personally fond of this kind of content, but it's evolving into a smart play.

Management CV, Inc. - Renny Ponvert, Founder and CEO

Statistical evaluation of company management teams with textual commentary. Predictive nature seems to be backed up with statistics, claims consistent picks of winning managment teams in Russell 3000, less utilities and finance. Rule-based text format similar to Value Line in concept, statistical regressions on past history, e.g., ex-GE execs haven't performed well statistically. Trying to measure management skill objectively. Focused on direct sales to money managers, profiles updated as new events such as new CEO trigger evaluation. Annually compensation plans are released, helps trigger textual commentary, largely annual-plus cycle.
COMMENTS: Really creative approach, this looks to be very promising, especially in a market that is looking for more meaningful predictive performance benchmarks.

Cell Journalist - Parker Polidor, Founder

Local media is the core value of news, turnkey platform to integrate user-generated news content into media sites, integrated into Web site, instant posting of comment is key to gaining audience share - has to be timely. Integrated revenue generation tools. CNN, other bigs got about 750 user-gen pieces online during Hurricane Ike, local outlets using Cell Journalist far more. Setup/maintenance model plus available ad revenues. Sell in and through media model. Working with Scrpps papers, other major deals brewing. iPhone app, allows easily branded window that captures tagging, geo data and descriptions right off of the mobile device. Highly scalable.
COMMENTS: Solid, solid, solid and very well placed with the end of community publishing that's likely to keep growing in a challenging economy. Cross-platform, good mix of revenue streams.

Good class of companies this year, pretty solid across the board. Great to see good things happening in the face of a challenging economy.

Keynote - Roger Ehrenberg, Managing Partner, IA Capital Partners, LLC

Monitor 110 - why did we fail? What undoes a startup?

No buck stops here leader, too internally focused, too much PR too early, too much money, lack of a real single vision - had a face that looked unified to others, but the dissent was there. "Two-headed monster is going to be less effective at being quick." Had top investors, but nobody challenged their structure. Team wasn't interacting with customers, wasn't in the company's DNA once the companies arrived. Over-engineered, proprietary and costly architecture. Unrealistic expectations for technology engendered a hiding culture instead of getting more exposure and feedback from potential clients. Too much money meant that you felt you had to do something big, but few revenues for four years. 2005 version had lots of problems, but if it had been exposed to customers it would have gotten good feedback. "Not a scrappy revenue-generating outlook."

"How does one fail successfully?" Humility - need to acknowledge and learn from failure, insight and persistence. And you have to work all the time. "Failure sucks. Being a first-time entrepreneur is very hard." Timing of a startup may be as important as the quality of the idea, says Harvard Business School. Persistence is one of the most important attributes for entrepreneurs, as is focusing on execution and not just ideas.

Lessons learned applied to Stocktwits. Single leader - Soren Macbeth, Separation between development and product staff, built the product for 50K, PR only after the product was functional in the market, then booted up 850K from users and strategic investors. Focused on building core IP, lots of open source for infrastructure, put effort in their own IP. Ruthless focus on customers, first premium products end Q1. Stocktwits stream is so clean that Bloomberg carries it in alternative news stream. Focused funding on people building models, up and running at low costs. Get revenues as soon as possible to build discipline into business DNA. Have to get to breakeven ASAP. "Failure plus learning plus persistence equals success." Great, honest presentation.

Labels: forecasts, private equity, profiles, siia information industry summit 2009, SIIA Previews, startups, venture capital

This year's SIIA Information Industry Summit includes for the second year the "Previews" event, an opportunity for major publishers, technology companies and investors to take a look at the up-and-coming companies in the content industry. There were at least 63 applicants for appearing in the Previews event, of which ten were chosen, so the quality of the companies is quite high overall. I live-blogged most of this, so some of it is a bit rough, but I think that you'll get the flow of this very dynamic event - and some good insights into some of the best of new content plays.

State of Startup Investment - PWC

Investment in venture plays remained strong 2007 according to David Silverman, Partner at PriceWaterhouseCoopers' MoneyTree report, with a 10 percent CAGR boost over 2006 overall and USD 70 billion-plus across all quaters. Software investment is down as a catgegory, but with investment up strongly in the media and entertainment industries and in business processses, it's a strong sign that technology plays are working their way up the value chain into solutions that inevitably make them increasingly content plays. Valuations on established companies are down, pushing more investors into earlier stage companies. VCs were able to turn 86 IPOs in 2007, the highest since the dot-com crash and a hopeful sign for emerging investments. There's quite a but of money that's being raised, so as the economy softens smart investors will continue to look towards venture capital plays to help them weather the down markets by building new value.

I will be providing short takes on a relatively live basis as the speakers provide their elevator pitches today, stay tuned for updates, when my batteries run out I'll post the rest this evening. The good news is that we got connectivity at the last minute for blogging.

Larry Schwartz, President, Newstex - How did the Class of 2007 Do?
Larry's quick update to last year's Preview event, apologies for scant details:

Eurekster: 5.5 million in financing, averages 25 million queries versus 10 million in early 2007.
Generate: 80 news customers, including Hearst Newspapers, Thomson Financial and Yahoo.
Near-Time: Added Wiley, CareFirst, partnership with U.S. government for "green" initiatives.
Inform Technologies: 15 million investment, 40 media clients
Pando: 16 million application installs, powering online delivery for NBC.
Attributor: Deals with AP, Reuters, speaking at IIS
Cranium Softworks: New product launches, anticipating funding in 2008
iCopyright: added 500 publishers in 2007, 5,000 transactions a day

Business & Investment Climate Update
Moderator: Bambi Francisco, CEO, Vator.tv

Brian Hirsch, Managing Director, Greenhill SAVP
Robert Levitan, CEO, Pando
David Silverman, Partner, PricewatershouseCoopers LLP
Ed Reitler, Parther, Reitler Brown & Rosenblatt LLC

Levitan: Lots of support for early-stage companies, later stage companies lot of support for known business models. VCs like to do due diligence on known business models. Our S/W deployed as consumer app, from 2 mil to 16 mil installs, everyone understands "freemium," took software up a level to corporate customers, NBC using technology between media player and software delivery network. Figures out if/when content should be downloaded, eliminates 80 percent of delivery costs. People don't know how to price this yet, it;s enterprise sales, sits on desktop, but still feeling their way through business model.
Bambi - rise of angel networks, lots of compa. nies that don't need VCs, just a few millions
Lots of CEOs using blogging to reach out to both investors and clients.

Silverman: VCs looking for established models, want to see revenues, profits when available. Might see more of a risk shift into earlier stages. Very vibrant market in NYC and beyond, downturn can happen but businesses are moving along. good opportunities for future.

Reitler: Good healthy growth 2003-2005, in current slowdown vs. internet "winter" of 2002-2003, not the same problems with recapitalization, more sustainable growth, slight uptick in early stage companies, healthier capital base. Lots of funds were insured, by SBA before, this time around plug is pulled on insurance. But deal flow is still strong, venture funds aren't investing in highly leveraged deals, mostly pure equity deals. Cash-rich institutions are taking on compelling business plans, as long as revenues come in from advertising and lead generation, should be a strong environment.

Hirsch: May be a recession, but doesn't really impact investment on innovation over past 30-40 years, many of the best companies were invented in the worst of times. But valuation is a factor, may have to give up more of your company or settle for less capital. Don't let economy stop you from starting a business if you have a good idea.

Bambi: Where are funds being deployed?
David: More of the same, biotech, med devices, in NYC internet ad companies, content creation companies, IAB/PWC quarterly report on interactive advertising, phenomenal growth, increased penetraion, more broadband, but need more technology.
Bambi: Brian, where is your money going?
Hirsch: Half of cos in marketing services, leadgen growth is accelerating, more measurable ROI, more value to marketers. Online ads, peel away Google and Yahoo still growing healthily, pure ad model challenging if you can't aggregate enough of an audience. Very careful at deploying dollars, west coast more aggressive in funding ad models. Not more risk-averse, like info-driven models, oppys for ad-driven models but pure ad-driven models can be developed via angel-backsed investments but for 30-50 million exits need to be highly efficient with capital and growth plans. Exits in social networknig are in 15-75 million exit range, not a lot of breakouts expected, cautious therefore for ad-driven.
Silverman: Big deals with nice returns, big players picking up pieces. [COMMENT: This is key, good time to pick up feautres and content that can make you stronger.]
Levitan: Video advertising is ripe for reinvention, will be nothing like pre-roll/post-roll markets today, complex algorithms will generate matches that will provide huge returns.
Reitler: Quigo had great returns. Leadgen offers still a lot of room for growth, buy media low and sell leads high, like a securities exchange, leading sellers to buyers. E.g., driveway pavers, narrow niches can be matched very precisely.

Bambi: Funding, what't it like raising funds today?

Levitan: Most VCs like to see mature business models, I enjoy being somewhere else, but telling the story requires much more education, investors need familiar benchmarks. Bambi: Do they care if you have revenue? Levitan: depends what traffic is for. As entrepreneur, a lot more people know a lot more details about a lot more business models. Kids may not have the full picture at how business models can grow. VCs are so smart, angels look more interesting for people proving ideas out, may be able to avoid VCs altogether. Previously it was a badge of honor to have a VC, but now you don't need that endorsement as much. Some VC funds will have to adapt.

QUICK TAKE: Funding is still healthy, private money has no where else to go right now, angels are more important than ever and there are plenty of people who may be able to make progress without going deep into VC money. Angels are getting more sophisticated, so the lines may be blurred to some degree.

Presentations Round One

ExpoTV: Video storytelling about products. 200K product reviews, unbiased, screened, coded, organized. Treat usergen more professionally, full rights to content and creative purchased but compensate contributors. Lots of metadata, more than in usergen platforms, leadgen revenues from ad inserts. No longer lonelygirl15, it's "lonely mom" as a consumer advocate. Syndicates to Yahoo! Shopping, Oxygen, Amazon, TimeWarner, Beliefnet, Planetfeedback. 8x video play growth, current views 2 million a month. Refer a friend program, most find it via the portal. Leadgen model is a winner, reviews are so highly targeted it should work very well. Also ad revenue.
QUICK TAKE: This is a strong play, great combination of community, structuring unstructured content for sophistiaced retrieval, syndication strategy, building revenues and reputation for contributors. Fairly high barriers to entry already with solid deals and content maintenance.

Health Monitoring Systems: Katrina hit, NOAA knew exactly what would happen, in contrast, no such event management, epidemics come but with no forecasting. Many events don't bloom into health crises, others do unexpectedly. Maps of disease patterns. 2006 Superbowl fans got sick on the way home and spread disease down I-80 in Ohio. Vision is to be national surveillance system for health. largest in U.S., 500-plus hospitals, customers in 10 states, looking fo expand data sources, provided by hospitals, they own analysis. States buy subscriptions.
QUICK TAKE: Didn't present all that well, but it's a pretty good play, that is, if they can build momentum. The "get it" factor is pretty good, there's a real market need. Low barriers to cometitive entry overall, but its pioneering position can help them build deal flow. Down economy may slow adoption. However, also possible to cross-sell into law enforcement.

LinkStorm: Pop-up content contextually related, focused on ecommerce, related products, 3x boost in click-through rates, equipped with graphics. Multi-level menu of options makes drill-down easy. Measure heavily user engagement, track click-throughs on a per-menu-item basis. Advertisers can act on insights and optimize menus real-time. GM, Overstock.com, Cisco, SAP, many majors. Estimating 100-200 million exit [COMMENT: well, with luck, never know]. "Roll Over" cue on screens demystifies use of technology, it's transparent, strictly OEM model. Take in feeds, will show all relevant products automatically, can sell sector data also.
QUICK TAKE: Great to see this technology find a home in advertising, solid investors backing it who understand markets, Makes each click much more valuable, user self-qualifies for more specific products before they ever get to actually click. Some barriers to entry given Sidman's investments in technology from other efforts, but main barrier is deal flow, he's moved very quickly into small presences and needs to expand it quickly before it gets positioned more as a feature than a platform. Pretty good bet for future growth, Google others could acquire, so exits are probably plentiful.

TutorVista: 5-10 million hours of free tutoring to give away, VOIP with whiteboarding, scheduled in advance, 30 subjects, PowerPoint-enabled instructional tool. Ad-driven, CEO helps to optimize content. Big push in India, Bangalore-based, tesp prep centers, 120 million Indian students attend centers. Creating branded "private schools," Sequoia, LightSpeed on board. India has the largest below-19 population, huge market. Tutors compensated well, double what they would make at university or schools, low turnover. new, voice-based tutoring, not a chat, subscription-based but some ads. Goal is a million tutees in a couple of years. One-on-one personalized tutuoring.
QUICK TAKE: Has competitors, but its focus on India's domestic market as well as international markets is key. Expect strong rapid growth, technology really isn't the issue, sounds fine overall, it's the VOIP that allows personal interaction that can make the difference. Solid, relatively quiet investment which is good for the investors as it's growing strong.

FeeDisclosure: About 1/3 of fees for closing mortgages are junk fees, fees for Adobe's free Acrobat software, etc. Identified fifteen categories that make up a real estate transaction, brokers give data for reporting and can become featured members, similar to LendingTree. Data includes service provider ratings, professionals provide trust by providing full disclosure. Forcing market to become more transparent. Consumer can compare their closing costs to national averages, whether fees are common. Patent pending. Can break down data to zip codes, price, location closes to home.
QUICK TAKE: Good basic argument, huge market, may become a trusted leader, in a tough lareal estate market this may be appealing for consumers, new legislation may force disclosure, pubic sentiment behind this. Could flip quickly, management seems professional, know their. market.

Presentations Round Two

Vator.tv:A platform for young companies to be discovered. started with 250 companies, now 800-plus. Wants to be the place where startups grow up. Wants to provide services and features that helps them to do it. Distributes news from companies via Blinkx, AlwaysOn, YouTube, VentureBeat, Mashable, profile updates get picked up as blogs. Hoover's company profiles are static, Vator.tv profiles are dynamic, cover hiring needs, creating announcement in video, RSS feeds, constituents, can help audiences to find related companies. A resource for other sites writing about these companies. Looking to make 70 percent of content from community, 30 percent editorial [COMMENT: This is probably going to be close to the de facto industry standard]. 1.5 million total views, seeking $30 CPMs, potential value in archives, subscriptions to data cuts. Thinking about value-add from directories of angel investors, etc.
QUICK TAKE: Sounds like an idea bigger than its initial packaging, still too early to tell where this is going. With Bambi's reputation it's likely that she'll have the entrees to make this fly to some degree in the long run, and "build it and they will come" can work when you have a highly focused and monetizable community such as high tech/content startups. Watch this as a potential model for evolving trade media in new directions - long run looks lot betster than the short run.

LingoSpot: Monetizing links. Harder to interlink in large sites, can be expensive proposition. Automatic, dynamic document interlinking - zero effort from pubishers, natural language processing provides links to relevant information. Can embed related videos, Amazon content. Sees 12 billion addressable market. More time spent on pages, Monthly licensing fee, revenue share on advertising sometimes, for example on video pre-rolls. Launched in July 2007. Looking for 3-4 million.
QUICK TAKE: Sphere-like but no big deals, more contextual analysis of keywords, like Sphere it can help people find more content in their own site more effectively. has potential but there's so much technology chasing these problems I worry about whether they'll be able to get significant deal flow and buzz to differentiate.

ArchieMD: Rich graphics for online service with deep content that can educate people on the body, diseases and injuries. High school students, military surgeons, internet health portals, general public, jury education - have 300 law firms as clients - with both generic animation and customized animation. Reed Elsevier partnershipfor health professions and higher education, looking for wider scope of distributio n for legal. A.D.A.M. is primary competitor but is more text oriented.
QUICK TAKE: This is a strong play, a good variety of audiences, monetization models, high-end value and mass audience value, Nobody really owns this, I think that main challenge is to make this a model that can interoperate with as many environments as possible. I can see markup with social media APIs something that could be quite appealing . A Google Health exit, perhaps?

Keibi: Control and measure user-generated content, adjacency is an issue for many publishers, moderation suite is key product. MySpace has tiers of moderators, small publishers have maybe one or two people, it doesn't scale either way. Content is ranked, scored, looks at other signals, prioritizes most likely offenders, keeps moderators productive. Hosted SaaS model, mostly subscription model with some CPM-based ad models. Has Bebo as client. Certification model, Keibi will provide a rating for a page of content (G/PG/R/X is general concept), ability to manage scores to be appropriate to specific advertisers has a filed patent.

QUICK TAKE: A highly useful service, SaaS model is fine, can be expanded, helps to decrease costs while growing UGC as rapidly as possible. This is a market that will grow significantly, has potential to become an industry standard, the need is clear, will only grow, competitive environment unclear, could wind up with too many solutions following a specific opportunity, but it seems to be a pretty clear field right now.

Courtroom Connect: Discovered more value in getting content out of courthouse than content into courthouse. Video will change practice of law, they capture the dramatic moments. Demo of Bill Gates testimony in antitrust suit, video side by side with exhibits of stamps, squirming as his testimony doesn't match exhibits. Cost MSFT 100 million on that case alone. Networks installed in 50 courtrooms in major markets, developing data bank, makes money on big hits but long tail is strong, 15-plus years of reuse. All major legal firms, legal outlets, can help lawyers be much more efficient. Universities want content in curricula. Review videotapes of opposition, helps them to prepare against lawyers and expert witnesses. Interactive focus groups, exhibit & document sharing, YouTube professional commentary. Revenues growing 50-100 percent per year. Existing television networks look only at sensational stuff, these are money-oriented trials.

QUICK TAKE: Wow. What a great application of public informaiton to a high-end and media product, well-placed, building up huge expertise, winning bids against telcos who see only the infrastructure opportunity, text transcripts are pricey, they have video and multimedia, more efficient. Oftentimes network installations are exclusive deals, like Wayport in hotels, so you have an exclusive service channel with deep content. Strong, strong, strong.


Closing Keynote: Kevin Ryan, Co-Chairman and Co-Founder, Alley Corp

Growth of Doubleclick was like 40 years in 9 years, dot-com crunch as "less fun," 70 percent of clients went bankrupt. Panther Express doing well, other key deals, ShopWiki, User-Generated Nation, SampleSales Online - needless to say a deep and successful portfolio.

Traditional media companies - it's going badly, but it will get much worse, "It's a disaster." Time-Warner has lost 80 percent of value in 18 months. Market Cap of TimeWarner now smaller than Google. Yahoo wouldn't budge off of one billion to buy Google [oops]. Google is even more powerful than people realize, sucking all the air out of the room. Numbers staggering. New York community is incredibly well positioned for startups, compared to ten years ago it's night and day. In 1950s, TV didn't wipe out movies, but movie consumption went down 90 percent, fundamental trends can change industry dynamics. Internet not as bad as that because human nature hasn't changed that much. But same people may not make the same amount of money. Profit margins were related to distribution monopolies. CapCities/ABC deal, how could ESPN be worth more than ABC, saw the 10x growth of value of ESPN. Structural problems, distribution, cost structures "just ridiculous." Doubleclick now worth 3 billion, Warner Music 3 billion, 10 people at WM with more than a million in compensation. Is that inherent in the model? $120/sq/ft offices is a choice. EMI was buying expensive "flowers" hand over fist, turned out to be hookers and drugs. [Sheesh]

"Traditional media companies have not been able to create new value in the online media space." They said "Wait 'till the big boys get in there," now not a single one of the top companies online was created by a traditional media company. People from startups have created more market capitalization than existing media companies from their infrastructure plays. Media companies are making better acquisitions, About.com, MarketWatch, MySpace, but cannot create internal DNA to be more competitive. On fundamental issues it will get worse, if I had a Kindle-like device to read my New York Times I would, not far away, about three years.

On Google side, "Google will be the first trillion-dollar company," takes percentages of other markets' ad shares consistently. Take out the Google numbers from internet spend, growth is in teens, not 30 percent. Will probably dissipate, number ten-priority products will suffer, but leading products have 80 percent-plus margins.

New York companies - why still in NYC was a question in old days, couldn't get a lawyer in 1996 that had worked on an Internet IPO. Changed completely - ten to twelve ex-Doubleclickers have developed their own companies. Two thirds of people in a recent Meetup for online people were already on their second startup. Infrastructure is here, will benefit from recession, relative value of VCs versus private equity will increase. Investment banks have no deals to talk about. Fundamental trends are not going away. 5 billion of acquisitions of New York-based media, more than Silicon Valley, don't hear about it, tech community "has a chip on its shoulder." Ladders is huge, don't hear about it. Digital media is a big growth area, New York is logical space, fashion is here, advertisers are here. Look at how much you spend per person in real estate, just use less per person. 6,000 per person on real estate, 3-4,000 in Pittsburgh, not as compelling as getting the right people. Oursourcing makes some functions more cost-effective for NYC work. Need better VC infrastructure, Boston firms are all working in NYC every week. Biotech still in Boston, but more pure technology companies like Doubleclick appearing in NYC. Lots of people being "freed up" from Wall Street this year, will learn that the Street is not as secure as they thought.

All of this creates opportunities. Social media is hot, but risk-reward is not always there. Look at taking areas worth billions and seeing if there are all the products that you need in the space. TheLadders was targeted at 100K+ jobs, those people don't use Monster, return will be huge. Re-segment markets - five windsurfing magazines in France, always opportunities. "If you spend more than five minutes online trying to find something, there's an opportunity." Hotel niches, retail niches. Video serving costs dropping rapidly, down to levels where advertising can support access. Magaines, radio are ugly, TV is not as bad, harder for a startup to do from scratch. Music labels are worth almost nothing, devastated.

QUICK TAKE: Not all new news, but a very compelling present on the online content markets that I've seen in a while. I'd agree that some of the Silicon Valley narcissism may have reached some sort of threshold, and I agree that NYC offers strong opportunities for startups picking off the bones of larger media companies and the ready pool of advertisers, but I'd suggest that the footprint is broader, more of a Bos-Wash Corridor community. That's where the West Coast iations a little more advantageous in some ways - a more concentrated community. The key factor is that there is not that much happening that's fundamentally new in consumer media technology lately. Apple's iPhone's advantages are based mostly on their largely failed exclusive deal with AT&T, for example. So we'll see whether there's any shift to the East Coast this year, I'll have to think about it but I'm still betting on a lot of trips to SFO this year.

Hope that you enjoyed this, more tomorrow on the Information Industry Summit

Labels: 2008, investment, SIIA Previews, startups, venture capital