Mary Meeker/MS Tech Trend Outlook

Very interesting presentation put together by Mary Meeker of Morgan Stanley and presented yesterday at the Web 2.0 Summit.

Buffett on equities

Great Op-Ed by Warren Buffett in the Times yesterday.

Today people who hold cash equivalents feel comfortable. They shouldn’t. They have opted for a terrible long-term asset, one that pays virtually nothing and is certain to depreciate in value. Indeed, the policies that government will follow in its efforts to alleviate the current crisis will probably prove inflationary and therefore accelerate declines in the real value of cash accounts.

Equities will almost certainly outperform cash over the next decade, probably by a substantial degree. Those investors who cling now to cash are betting they can efficiently time their move away from it later. In waiting for the comfort of good news, they are ignoring Wayne Gretzky’s advice: “I skate to where the puck is going to be, not to where it has been.”

I don’t like to opine on the stock market, and again I emphasize that I have no idea what the market will do in the short term. Nevertheless, I’ll follow the lead of a restaurant that opened in an empty bank building and then advertised: “Put your mouth where your money was.” Today my money and my mouth both say equities.

Investment Research after the storm

The last two weeks have kept most in the finance community glued to the headlines trying to figure out which earthquake will hit next. Mainstream media analysis has been focused on global economic issues and with numbers like $700B being thrown around, the $5.7B investment research industry, which has felt a substantial impact from the debt crisis and the Wall Street shakeup, has been largely overlooked. Nearly 3,000 equity research professionals have already been directly impacted.

Expert networks and sell-side research analysts

The recent partnership announcement between the Gerson Lehrman Group and Credit Suisse sparked some commentary from research industry insiders who were surprised that GLG was letting sell-side analysts access the GLG network, even for what is sure to be a hefty fee. I was a bit surprised to learn they weren’t doing this already. GLG and other expert networks have tens of thousands if not hundreds of thousands of experts in their networks. Sell-side research operations, while they may be on the decline, still control 75% of the $5.7 billion in trading commissions distributed to research providers annually. At KnowledgeBid, our best customers are firms that sell research and services based on primary research.  Contact us if you’d like to learn more about our network and how we can help you meet your customers’ needs.  We’d love to help.

Investment Research: Continued Shift

Ongoing market turmoil and the intensifying financial crunch have accelerated ongoing shift within the investment research industry. This morning Credit Suisse and the Gerson Lehrman Group announced a strategic partnership that will 1) give Credit Suisse analysts access to GLG consultants; 2) give GLG clients access to Credit Suisse analysts; 3) give GLG access to Credit Suisse distribution channels.

CareerBuilder valued at $1.35B, down 13% since ’06

Reuters is reporting that Gannett has purchased another 10% of CareerBuilder from the Tribune Company for $135M at a $1.35B valuation. The last time CareerBuilder was valued publicly was in ’06 when Gannett and Tribune bought a chunk of CareerBuilder from McClatchy at a $1.55B valuation. That’s a $200M loss in value over the last 2 years. Compete shows a 16% decrease in CareerBuilder’s traffic over the last year. This must have been an interesting negotiation because CareerBuilder is a large private company and the buyer and seller were both large existing stakeholders. Although losing $20M sounds bad, Gannett’s own stock has dropped nearly 50% this year alone, nearly $4B lost in market capitalization. Barron’s reported last week that Tribune, taken private in ’07 by Sam Zell for $8.2B, will be “hard-pressed to avoid bankruptcy, given plunging newspaper profits and its $12 billion of debt. Even a sale of the Tribune-owned Chicago Cubs and Wrigley Field for more than $1 billion would do little to cut Tribune’s debt. Zell says Tribune has adequate liquidity, but its public debt trades for less than 40 cents on the dollar, so investors aren’t convinced.”

So even though CareerBuilder has dropped in value, it may be one of the better assets on both company’s balance sheets (Cubs and Wrigley aside). I sure am glad I’m not in the newspaper business.

Checkout new jobs online.

The stats behind Editor-in-Chief of Harvard Law Review

I’m a law school nerd and watched Obama speech with a friend who asked me what it really means to be Editor-in-Chief of Harvard Law School, one of the credentials that I find most indicative of Obama’s intellectual horsepower.

Every year around 7,500 people apply to Harvard Law School. Roughly 560 students matriculate with, on average, a 3.8 undergrad GPA and a 99th percentile LSAT score. After 1L year studying legal theory, around 40 of the best students are appointed to Harvard Law Review based on their first year grades and writing. Law Reviews are highly competitive student run scholarly journals considered mandatory by many for high-end legal careers. For the 7% that make it on to Law Review, 2L year is more legal theory plus highly detailed editing of emerging legal scholarship pending publication in the journal. At the end of 2L year, one member of Law Review is elected to be the next year’s Editor-in-Chief by the existing members. The Editor-in-Chief then runs the process of producing the next year’s editions of the journal. Since 1887, 121 people have been appointed Editor-in-Chief of Harvard Law Review. There were more than 7,000 Rhodes Scholarships granted during the same period.

It’s the recruiters, stupid!

Jobs have long been targeted on the web. The economics involved are attractive. People want good jobs and employers are willing to pay for good employees.

In the last ten years, hundreds of businesses have launched with the goal of using the web to bring efficiencies to job markets and capturing value in the process. As a result, newspaper classifieds have died, consumed almost entirely by dynamic, searchable sites with tens of millions of listings.

Recruiters and headhunters, on the other hand, haven’t gone anywhere.

The classified puzzle

It’s a funny coincidence that Microsoft will be pulling the plug on their little known Live Expo classified service just three days after MySpace announced that they will be ramping theirs up with Oodle. These changes are indicative of the larger trend: the classified game remains elusive for large major new entrants. Facebook‘s classified service has been less than stellar (I can’t even find a link to it right now) and Edgeio has been shuttered while Craigslist and eBay continue to dominate the all-in-one classified scene.

Glance

In my post a while back about my picks for the best service providers for startups, I included my favorite desktop sharing software, Glance, which I use religiously. Glance was recommended to me by a friend and I use it for all my demos also for some internal stuff when sharing a screen is needed.

Last night I ran into a friend I see every couple of years and talk turned to startups. I was amazed to discover that my friend’s cousin Taylor Kew is one of the founders of Glance.  My friend was happy to learn that I use Glance ~5 times a week. I was then saddened to hear that Taylor passed away in August ’07 of lymphoma. If anyone at Glance sees this, thanks again for delivering a great service.  I can’t imagine how tough it must be to work through losing a founding member of your team.

The power of defaults

The snack machine in my office building gets a steady flow of patronage throughout the day. Last week I used a dollar bill to buy a 50 cent pack of gum and noticed that the 50 cents I was owed wasn’t returned automagically. I then hit the coin return button and the machine coughed up my change. Somewhere out there, there’s a genius that revolutionized the vending machine industry by changing this default. I’ve left at least an extra dollar in the machine since I first noticed this change last week. Brilliant.

Edit:  So it turns out I was totally wrong about this.  My dreams of a revolutionized snack vending machine industry have been shattered.  Thanks to bostonwolf’s comment I realized had assumed the machine retained change.  I was wrong.  If there is change owed after a transaction, the machine spits up the change in the coin slot ~2 minutes after the purchase.  Too bad.

User Value = Demographics + Tolerance

A subject often mulled over by startup founders and investors alike is the value of a user. Web services, just like brick and mortar service providers, try to make money from of those that use a service. Some sites charge users directly, but most rely on selling some form of access to their user base to others. Display advertisements, job postings, and direct messages are the three predominant monetization strategies used today. In the past several months, web services have begun to offer more and more targeted and focused access to their users, a trend that will certainly continue in the social network space in particular as companies begin to focus on monetization.

As this is a popular topic, Arrington recently ran an article entitled “Modeling the Real Market Value of Social Networks“. Ironically, he ignored a large amount of relevant data and instead posited a new way to value social networks…completely disconnected from any and all real market valuations (he missed a few major social networks as well). His end analysis is that demographics are the key factor in determining the value of a user base. I’ve been analyzing valuations, user bases, and user access recently and disagree with this analysis.

In order to examine the true drivers of user value, I aggregated below all of the recent available real market valuations for companies that monetize user profiles. I used a combination of enterprise values, acquisition prices, and pre-money valuations, all of which represent real market valuations. Dividing the number of profiles each company had at valuation by the valuation amount delivers the value the market put on one of that service’s users.

The numbers show that demographics are just part of user profile value. The other driver of user profile value is user tolerance, or what level of access a typical users is willing to endure. Gerson Lehrman (#1) has an extremely small user base in relative terms, but it is a group of professionals (high-end demographics) and, by definition, every user is willing to receive cold calls from Gerson Lehrman clients (perhaps the highest level of access there is). Dice (#3) has only 2M users but all are technology professionals interested in job opportunities (valuable demographics) and all are willing to receive messages or alerts about potential employers (high tolerance to access). In fact, five of the top six on the list allow for direct access to their user bases, while almost all of the bottom half of the group relies entirely on generic, unfocused display advertisements and will likely face much resistance to increased profile access (see: Wikipedia).

Going forward, it’s going to be important for web services to not only enable targeted access, but to also cultivate users that will stick around to receive it.

Company Valuation Derived from… Profiles Value Year GLG $875M Investment 200,000 $4,375 2007 Facebook $15B Investment 50,000,000 $300 2007 Dice $500M Enterprise Value 2,200,000 $227 2008 CareerBuilder $1.55B Investment 24,000,000 $65 2006 Affinity Labs $61M Acquisition 1,000,000 $61 2008 LinkedIn $1B Investment 22,000,000 $45 2008 Geni.com $90M Investment 2,000,000 $45 2007 Twitter $80M Investment 2,100,000 $38 2008 Badoo $300M Investment 10,000,000 $30 2008 Monster $1.88B Enterprise Value 80,000,000 $24 2008 Bebo $850M Acquisition 40,000,000 $21 2008 MySpace $580M Investment 22,000,000 $26 2005 Friends Reunited $208M Acquisition 15,000,000 $14 2005 Fotolog $90M Acquisition 10,000,000 $9 2007 Photobucket $300M Acquisition 40,000,000 $8 2007 Plaxo $150M Acquisition 50,000,000 $3 2008 Tagged $102M Investment 30,000,000 $3 2007 Various $50M Acquisition 18,000,000 $3 2007 BlackPlanet $38M Acquisition 16,500,000 $2 2008

Buzznet $15M Investment 7,000,000 $2 2007

If anyone has hard valuation/user profile data for yelp, myyearbook, orkut, HI5, Ning, classmates.com, friendster, reunion.com, habbo.com, hyves.com, imeem, live-journal, mixi, multiply, netlog, perfspot, skyrock, sonico, stidivz, V Kontakte, wayn, windows live spaces, xanga, xing, or any other companies in this genre please send them on.

eBay v. Tiffany: 4 years later, eBay wins

Well it looks like eBay v. Tiffany & Co. is finally over and eBay has come out on top. This is a huge case for the web and internet commerce. The ruling means that eBay (and other web based marketplaces like Craigslist)  can continue to rely on trademark holders to monitor their site for knock-off items. Back in 2004, Tiffany’s sued eBay for damages incurred from sales of knock-off Tiffany’s jewelry being sold on eBay and wanted to limit the number of Tiffany items any one seller can have for sale at one time. While a ruling in the favor of Tiffany’s would probably never registered on eBay’s radar screen, an avalanche of money hungry plaintiffs would have followed and the precedent would have been set that eBay could be liable for trademark infringement in regards to counterfeit goods. If any damages were awarded, hypothetically, any brand that has ever had a knock-off item sold on eBay would have stood to get some cash.

In 2001, the landmark case of ecommerce, Hendrickson v. eBay, the court found eBay to not be liable for stolen or counterfeit items sold on its site. The site was found to be in the safe harbor of the DMCA, and differentiated from the classic case of the flea market proprietor found liable for selling stolen goods. eBay was found to be in the safe harbor, including robust terms of service and links for users to flag inappropriate content. At the end of the day, Hendrickson required manufacturers to be on notice and proactively search and flag stolen goods on eBay. This was a big change from the flea market paradigm of the past, but there were a lot of strange things happening in 2001. Conversely, after Hendrickson, Napster & Grokster came through, which were about copyright but pondered a similar unchartered realms of e-commerce and trade. Napster couldn’t keep 100% pirated work off the site per court order, and were forced to shut down.

If eBay had lost the case and been put in a position where they needed to comply 100% a la the Napster Trajectory, they would have been put in an extremely difficult place, because while it is easy to recognize a NBC TV clip, it is not so easy to recognize a knock-off Tiffany & Co. ring by looking at a grainy photograph. This distinction may have been what in the end saved eBay. However, while Hendrickson and Napster both made trademark claims, they were overshadowed by the copyright issues in the cases which call to the DMCA. Tiffany’s claim was strictly within trademark.

Additional coverage: AP, Marketwatch, Reuters, NYT, CNET

Where’s SelfServe by MySpace?

Back in November of ’07, MySpace announced the future launch of “SelfServe by MySpace” which would “allow advertisers to directly purchase, create and analyze the performance of ads throughout the MySpace network.”  It was supposed to be in beta for two months then launched in early ’08.  It didn’t happen and ClickZ reported last month that SelfServe may launch in later summer or early fall.  MySpace is being left in the dust by Facebook Social Ads and LinkedIn DirectAds.  Now Orkut, Hi5, Bebo, Ning and the others need to step up to the targeted advertising plate as well.

LinkedIn quietly launches Research Network and DirectAds…let the monetization begin.

LinkedIn DirectAds
LinkedIn has quietly launched a beta version of a dynamic CPM text advertising platform called LinkedIn DirectAds. No formal announcement of the launch was made on the LinkedIn blog or elsewhere. According to the DIrectAds FAQ, advertisers will be able to dynamically target ads by age, gender, geography, educational institution, industry, and seniority. Minimum order size for an advertisement is $25, with the minimum number of impressions dependant on the targeting audience chosen by the advertiser. The rate that you pay for a CPM (1000 impressions) changes as you add or remove targeting options from your ad. Apparently the product will give click-through rates to advertisers, but billing will be based on CPM. In a unique twist, ads will also include the advertisers name and a link to their LinkedIn profile in hopes of “increasing transparency and visibility into the advertiser.” Much like the Facebook SocialAds platform, advertisers must have a profile on the network to launch an ad, although LinkedIn says they are limiting advertisers by completeness of profile, number of connections, date of profile creation and a number of other factors. I was unable to access the platform through my profile.

The DirectAds platform will bring LinkedIn closer to Facebook’s Social Ads technology, with these two leaving Bebo, MySpace, Plaxo, Friendster and the rest of the social networking world behind for now. I hope to be able to try the LinkedIn platform soon and give a head-to-head comparison. LinkedIn will continue to extract a premium on their advertising, as it seems they will be setting the price per CPM internally. A true market (e.g. Overture/pre-Panama Yahoo) or partial market (e.g. Google quality score) influence on price would likely result in prices lower than they would like, and they are clearly avoiding a CPC model for a reason since they are measuring CTR anyways. I think this slow transfer is very smart on their end especially considering their pre-IPO status, but as an advertiser I wish they would switch to a free market faster. Their ad margins will likely be lower than what they were getting with their rate card (although perhaps not), but the volume of advertisements will definitely spike upwards as you no longer have to go through a traditional advertising salesperson process to launch a targeted ad on their network.

LinkedIn Research Network
Additionally, on Thursday of last week LinkedIn quietly launched the LinkedIn Research Network, a product the company first mentioned back in February. No formal announcement of the actual launch was made on the LinkedIn blog or anywhere else, but the Research Network product page is live and linked to from the Premium Product footer, along with job, corporate, and upgrade links. Also linked is a 2 page product summary PDF. The product page outlines what is essentially a premium version of InMail (pdf). A Research Network subscriber can send send 20 InMails at once, and no monthly or daily limits are mentioned. Previously, LinkedIn BusinessPlus subscribers had the most InMail access and were limited to 10 InMails per month, so this is a dramatic increase in potential InMail volume. In the past advertisers could send targeted InMail blasts through LinkedIn’s advertising platform at $1 – $5 per recipient.

The LinkedIn Research Network is an attempt to move into the expert network industry and will be sold primarily to hedge, private equity and venture funds. According to a recent Integrity Research Associates report, there are roughly 25 expert networks in existence today. Aside from my company KnowledgeBid, every other expert network service operates on a subscription model. LinkedIn is likely gunning for the fat subscription fees that players like the Gerson Lehrman Group are pulling from investors (+$50k for access to one industry vertical of experts for 6 months), but the product they have launched is far more like the resume search/direct email services offered by Monster, HotJobs, CareerBuilder, Dice, etc. than an expert network. Perhaps down the road LinkedIn will try to facilitate the actual expert matching, but this iteration of the product just enables subscribers to send a large volume of cold emails to potential consultants. Additionally, the product page makes no mention of facilitating consultant payment and the only compliance functionality mentioned is a “research history”. Legal compliance is arguably the largest issue faced by expert networks today, and something that expert network users have come to expert from service providers. It’s possible that LinkedIn is intentionally not involving themselves with payment of experts in an attempt to remove themselves from the chain of liability if their service were to be used to facilitate insider trading or the like.

Congrats to LinkedIn on the product launches. I’m glad to see them competing with Facebook on the advertising technology side of things (let’s see an API guys!) and will certainly be keeping tabs on these products as they mature.

Facebook Ads now targeting professional titles, taking LinkedIn head on…

Facebook continues to quickly and quietly improve their advertising platform. In yet another innovation launched without formal announcement, Facebook now allows advertisers to target ads based on professional titles in user profiles. Previously ads could only target by keywords listed in users’ “interests” field. Now Facebook has indexed professional titles and allows for dynamic targeting through the Facebook Ads platform. Perhaps the recent launch of the advertising feedback function was in anticipation of an aggressive move towards monetization via heightened ad targeting? We’re still waiting on the Facebook Ads API but LinkedIn is still using a massively inflated CPM rate card despite their recent $1B valuation and and MySpace still uses Google adwords, putting Facebook miles ahead of the rest of the social networking pack when it comes to advertising technology.

Import Genius + the value of information

ImportGenius is an innovating new company organizing the extremely valuable and historically unorganized world of import records. One of the first hedge fund managers I spoke to when researching KnowledgeBid mentioned that he liked to talk to shipping container brokers about utilization rates and import/export trends. I’m sure ImportGenius will have no problem finding customers in the investment community. TechCrunch coverage here (yes, Mac fanboys will like it too). Yet another company taking a unique approach to accessing information value. Good luck!

Facebook quietly launches advertising feedback

The Facebook advertising platform continues to advance ahead of the rest of the social network pack. We’re still waiting on the API, but they’ve recently snuck out a feature that allows users to indicate whether they like or dislike an ad served up to them. Where previously there was just a link for “more ads”, there are now StumbleUpon style thumbs. Clicking on one of them pops up a window with feedback options. Screenshots below. The fact that Facebook is implementing these kinds of features before they launch an Ads API shows that they are approaching mass advertising very carefully. They know that they need users to make ads have value, and the better the ads are the more valuable their ad space will be. Also, it’s quite possible that having some interaction with ads beyond just clicking them will incentivize users to click more ads. The Facebook advertising platform continues become more and more interesting.

Career Advice from Fred Wilson

Fred Wilson has a great post looking back on his career and how he got into venture capital.  The title “I Got Lucky” pretty much sums it up.  This is the meatiest part:

If you want to be a top tier venture investor, you must be recognized as one of the experts in the field you invest in. When I was at Euclid, I used to watch in admiration as guys like Bill Kaiser worked the enterprise software business or Paul Ferri worked the communications equipment business. They knew the business cold and if you wanted to start a company in their area of expertise you went to them first. That’s what you have to get to if you want to make top tier returns in the venture capital business.

The way you do that is you work for at least ten years in the industry, getting operating experience, building a killer rolodex, and learning how the business works from the inside. Then in your mid to late 30s, you can make the move to the venture capital business, as a partner, not as a wet behind the ears associate who doesn’t know anything other than how to push numbers around a spreadsheet.

I did it all wrong and got lucky. I don’t recommend anyone reading this to try it the way I did it. If you choose to get an MBA, get a real job out of business school. Help to build a few businesses in an industry sector you really like. Become an expert in that industry. Then try your hand at venture capital. You’ll be much better at it than I was my first ten years in the business.

It’s tough to say if I like his or Warren Buffett’s career advice more.

Gehry on Leaks

TEDTalk with Frank Gehry covering a number of topics, including leaks. And if you understand what was so bad about what the Harbor Master said, leave a comment and fill me in.

Cloud Consulting + Distributed Professional Services

The Times recently ran an article by Michael Fitzgerald on the red hot cloud computing trend. Fitzgerald defined cloud computing to be “obtaining computing resources . . . from someplace outside your own four walls, and paying only for what you use.” The concept of cloud computing makes perfect sense: instead of paying for massive amounts of computing capacity to be ready for spikes in usage, site owners pay only for what they need, when they need it.

Fitzgerald’s definition illustrates the parallels between cloud computing and what we’re up to at KnowledgeBid as well as, in a larger sense, a growing trend in the professional services space. Like cloud computing services, KnowledgeBid provides services on an as needed basis, the difference being that instead of tapping into a cloud of computational power, KnowledgeBid facilitates access to a cloud of expertise and information.

A new lean breed of professional service companies is maturing with similar operating models, silently taking market share from the incumbent players. These firms have minimal office leases on their balance sheets and aren’t burdened with massive annual partnership payouts. They offer customized, lower priced services and often have broader offerings than their traditional competitors. The management of these firms plays a new and rapidly evolving role, combining matchmaker, headhunter, temp agency, accounting firm, compliance officer, and human resources department.

One of the hottest of these new breed is Axiom Legal Solutions, Inc. Founded in 2000 by Mark Harris and Alec Guettel and backed by Greenhill & Co., Benchmark Capital, and Panorama Capital, Axiom is disrupting the legal world by working closely with the in-house counsel at major corporations to fuel them with niche, qualified attorneys on a contract basis. Axiom “combines the flexibility of outside counsel with the best attributes of a sophisticated corporate law department”, collecting fees on attorney hours but without the weight of partner payouts and massive office leases. Axiom “is not a law firm” and “does not provide legal representation or advice” but does interview attorneys, hire them full-time, then place them directly with clients for specific engagements. Their clients include American Express, Bank of America, Cisco, Dow Jones, Goldman Sachs, Johnson & Johnson, New York Times, Nokia, Sun Microsystems, and Viacom, among others.

The most advanced segment of these new service providers is arguably the web development and design sector. Dominated by oDesk and eLance, these companies give customers access to a global network of developers, designers, and database architects. They don’t hire service providers directly but serve as a platform for clients to screen, interview, monitor and compensate service providers. These companies have seen explosive growth thanks to the web 2.0 boom. The chart above shows the number of hours worked through oDesk by month since 2003.

Running a similar model in the engineering space, Exponent, Inc. hires professionals on full time and staffs them with clients according to their specific needs much like Axiom. Exponent has been around in one form or another since 1967, and has morphed several times. It’s currently a publicly traded company and employs over 500 engineering and scientific professionals, covering 20 practice areas including biomechanics, buildings & structures, civil engineering, construction consulting, ecological & biological sciences, electrical & semiconductors, environmental & earth sciences, health sciences, chemical registration, food safety, epidemiology, biostatistics, computational biology, toxicology, mechanistic biology, exposure assessment, public health, industrial hygiene, industrial structures, mechanical engineering, materials science, statistical & data sciences, thermal sciences, and vehicle analysis. Exponent does have significant lease liabilities (~$5M in ‘07) but most/all is non-premium warehouse and laboratory space. The company saw solid growth vs the S&P last year.

At the end of the day these companies all provide value by making connections and managing relationships. As the world becomes more and more connected, I think this trend will continue. The professional services cloud will become more accessible, and the companies that facilitate access to it will gain market share at the cost of traditional professional service providers.

Tiffany v. eBay…still going

I called Judge Sullivan’s clerk last week and learned that Tiffany v. eBay is still under decision. Everything wrapped up in the courtroom ~6 months ago. Past coverage here.

620,000,000 profiles

I’ve recently been doing some analysis focusing on the growth rates of major social networks and resume databases (I’m saving major blogging platforms for another day, although I’m guessing there are ~400M blogs out there). For the purposes of this analysis I calculated the user profile CAGR for each major social network and resume database, assuming 1M profiles in the launch year and ending with the best estimate of user profiles today (May 2008).

The results show that there are nearly 620,000,000 robust user profiles among these services today, a figure that has grown at a 64% CAGR since ’95. Orkut has grown at the highest CAGR (231%) while MySpace claims the largest raw number of profiles (173M). The chart below nicely illustrates the social networking explosion staring in ’03, underlined by the steady growth of resume databases starting in the mid 90s. The exponentially higher growth rates of social networks can be attributed to the viral features that have come to define them. Traditional resume databases are useful but are generally non-viral so they continue to grow steadily. This analysis does not take into account spam and fake profiles and the chart massively simplifies the growth trends by retrospectively applying each company’s CAGR.

• CareerBuilder
• Alexa #8
• Launched 1995
• 24M resumes
• Average 1.85M additions per year
• 28% CAGR

• HotJobs
• Alexa #1 (Y! site)
• Launched 1996
• 30M resumes
• Average 2.5M additions per year
• 33% CAGR

• HI5
• Alexa #76
• Launched 1996
• 98M user profiles
• Average 8.16M additions per year
• 47% CAGR

• Monster
• Alexa #337
• Launched 1999
• 80M resumes
• Average 8.88M additions per year
• 63% CAGR

• MySpace
• Alexa #3
• Launched 2003
• 173M user profiles
• Average 34.6M additions per year
• 180% CAGR

• LinkedIn
• Alexa #54
• Launched 2003
• 22M user profiles
• Average 4.4M additions per year
• 86% CAGR

• Facebook
• Alexa #5
• Launched 2004
• 70M user profiles
• Average 17.5M additions per year
• 189% CAGR

• Orkut
• Alexa #51
• Launched in 2004
• 120M user profiles
• Average 30M additions per year
• 231% CAGR

Facebook: Reach and Saturation by Country, Part II

Updated here.

Roughly six months ago I posted some information that I dug out of Facebook’s then just launched Facebook Flyer Pro advertising platform. I’ve been poking around with Facebook again the last few days and recent talk about Facebook’s valuation inspired me to update my report. Facebook has improved their advertising platform, now just called Facebook Ads, and while ad creation is still manual, they offer CPC payment and social features on top of the incredible targeting they had with Flyer Pro. They still also display the number of users that an ad will target, so messing around with the UI can give you some interesting information about Facebook’s user base. Here I’ve added current data to the spreadsheet I started six months ago. In short, Facebook has added ~28 million users in the last 6 months, growing at an average 140% in the countries where they released data six months ago and today. 70% of their growth was in North America and Europe. I updated population figures so that saturation percentages would be accurate.

Updated saturation leaderboard:
Canada: 28.22%
Norway: 24.04%
UK: 16.88%
Australia: 13.30%
Sweden: 12.20%
Denmark: 10.73%

Trailing 6 month growth leaders:
Turkey: 875%
Israel: 393%
Colombia: 393%
France 294%
Malaysia: 255%
Switzerland: 199%

Investment Research + Massive Industry Shift

I had the opportunity to present KnowledgeBid at the Investorside Alternative Research conference in New York last week (conference agenda), attended by an interesting mix of independent alternative investment research providers and buy-side folks. The investment research industry has undergone massive change in the last 10 years, much of which is a result of the information technology explosion, Regulation FD, and unbundled commissions. The dominant groups at the conference last week primarily fell into three categories: 1) expert networks, 2) data mining, and 3) research management. Very few, if any, new players are producing traditional research reports with buy/sell recommendations or general industry analysis. Even fewer are associated with particular trading desks, something that never would have been seen 10 years ago. The recent explosion of the alternative research space has in large part been at the expense of traditional sell side research.

The sell side and other large financial service players are now actively partnering with, investing, and acquiring alternative research operations. There has been an explosion of activity in the space in the last six months, part of a larger trend that has been emerging since Reg FD was passed eight years ago. I’ve aggregated major announcements and milestones below (let me know if I missed anything interesting).

• 10.23.2000: Regulation FD Ratified by the SEC
• 3.2001 – 11.2001: US Economic Recession
• 10.15.2001: FirstRain $11M Series A
• 4.28.2003: $1.43B Global Analyst Research Settlement
• 7.15.2003: FirstRain $8M Series B
• 7.21.2003: BNY launches Jaywalk initiative
• 2.2004: Bessemer Ventures invests in Gerson Lehrman Group
• 3.4.2005: Standard & Poor’s acquires Vista Research
• 2.6.2006: Goldman Sachs invests in Investars
• 3.2006: UBS announces partnership with ASSET4
• 6.2006: Goldman Sachs launches Hudson Street initiative
  
• 6.29.2006: GS / Hudson Street invests in ASSET4
• 9.7.2006: DFJ invests in Monitor110 $5M Series B
• 10.30.2006: DFJ invests in Monitor110 $11M Series C
• 12.20.2006: Morgan Stanley partnership with Tamale Software
  
• 2.9.2007: GS / Hudson Street invests in Connotate Technologies
• 3.29.2007: BNY / Jaywalk announces alliance with Code Red
• 4.5.2007: GS / Hudson Street invests in iSuppli
• 5.2.2007: Evalueserve acquires Nitron Advisors
• 5.8.2007: GS / Hudson Street invests in Medley Global Advisors
• 9.10.2007: GS / Hudson Street invests in Lusight
• 9.27.2007: Merrill Lynch announces partnership with ASSET4
• 12.19.2007: Silver Lake invests +$200M in Gerson Lehrman Group
• 1.14.2008: Oak Partners invest in $13.6M FirstRain Round (Series C ?)
• 1.25.2008: RiskMetrics $245M IPO
• 2.11.2008: GS / Hudson Street invests in TrimTabs
• 2.27.2008: BNY / Jaywalk announces alliance with Tamale Software
• 3.6.2008: UBS invests in Integrity Research Associates
• 3.21.2008: GS / Hudson Street invests in QSG
  
• 3.27.2008: Morgan Stanley partnership with Gerson Lehrman Group
• 4.7.2008: Standard & Poors / CapIQ announces alliance with FirstRain
• 4.9.2008: Merrill Lynch launches Open Minds with Asset 4; Audit Integrity; Cypress Group; Decision Resources; Global Media Intelligence; HPDI and Primary Source
• 4.17.2008: Instinet exclusive relationship with Norbury Financial