Yahoo! Store Profile

Yahoo! Stores opened in 1998, making it one of the oldest, fully hosted ecommerce platforms available. The biggest strength of Yahoo! Stores is its immense, stable and reliable infrastructure. That means you don't have to worry about find your own Web hosting or worrying about site outages. Additionally, because of its long history, a large and experienced community of freelance designers and developers are available to help you customize your store. The biggest weakness of Yahoo! Stores is also its long history. There is a lot of legacy code and features added on top of other features. That means all the various options and features are confusing for new Yahoo! Store owners, and its admin interface is not optimized for ease of use. Yahoo! Stores also uses a proprietary language called RTML that is only useful for customizing Yahoo! Stores (good thing there's a large network of developers you can hire).

Google AdSense Tips...

Google just released a Newbie Central for their AdSense program, those ads webmasters can include on their site to earn money for every click on the ad from a visitor (if you're using the program, part of the advertiser budget will go to you, and the other part to Google). I wanted to add some tips from my own experience:

1. Ads can work well in-between other stuff. On a games site of mine, some of the games don't contain ads next to the game area; the AdSense ad will only be shown in-between game rounds. This is the time the visitor is not concentrating on performing a task but might take a small break, and be open to the option of visiting new sites.

2. Put too much emphasis on AdSense and your site may be linked to less. The more available space you dedicate to AdSense on your site, and the less you differentiate between ads and content in your design, the more money you earn with the program, right? Not quite. While pushing the AdSense may result in short-term gains, it might also convince some visitors that the site is too crowded to be worth visiting again. And some of those visitors may also be bloggers or other people who might otherwise help to promote your site with links to it. And the less your site gets linked to, the less traffic it gets, meaning AdSense revenues may go down in the long term.

3. Even if you get huge traffic, the AdSense income from the site is more dependent on the site type and audience. Google targets AdSense ads automatically to the site content. Or at least, it does so ideally – but some types of content fare better than others with this targeting. I noticed for instance that AdSense does better on a games site than on a technology blog. I also heard people say that AdSense does quite good on product oriented blogs; say, one post solely about the iPod; another post solely about Gadget XYZ, and so on.

4. Image ads can be relevant and work for you, but they might also apall some visitors. Google's AdSense program gives you the option to choose between a couple of different ad formats. Two main groups are text ads vs text & image ads. When you choose the latter, Google will deliver what they deem works best for your content (or so one would hope, and it would be in Google's best self-interest to serve you the best possible ad, it seems).

However, Google doesn't really know your layout preferences, and they don't really understand when your audience thinks ads are "too much"; and considering image ads include Flash animations (which you can't disable, once you go for image ads), Flash animations may well push some people away. One thing you can do is to only show image ads in areas where they don't disturb the content, e.g. at the end of posts. Also, you might want to listen to visitor feedback on the ads being served; I received emails before that the blinking ad on this or that site made a person want to leave the site, at which point I blocked the specific advertiser via the AdSense Setup -> Competitive Ad Filter option.

5. When it comes to context sensitive targeting, you can increase or lower the importance of certain parts of your page. To help Google find a matching ad for your content, you can use the HTML comment syntax by encapsulating more important parts with


... your important site content here ...
.

Or, to lower the importance of a section, use:


... your not so important site content here ...


(Google notes that it may take up to 2 weeks for this change to your site will be taken into account by the AdSense.)

What if your site doesn't have any good matchable content to begin with, though? Say, the page just includes an image. Well, for the reasons of search engine optimization but also ad optimization you might want to consider using at least a descriptive title, an explanatory footer containing the important keywords or keyphrases (the kind of footer that actually helps the human visitor by explaining what the page is about). In the case of image content, reasonable alt and title attribute texts should be used as well.*

*Whatever you do, don't resort to "keyword-stuffing" as it doesn't help your visitors and may get your page ranked lower in search engines.

6. Be aware of risks when you change ad layouts too much. I once had a system on the server to randomly differ between various AdSense layouts on the same page. Doing so I was hoping to add some good variety to keep the ads at least somewhat interesting and notable. Shortly after I stopped doing so and simply included a rather big static area for the AdSense to "do what it wants," the AdSense revenues for that site increased. Now, I don't know if this was a coincidence of some sorts, as revenues often go down or up even when you don't do anything, but it might well have been that there was a connection between adding too much homemade randomization, and lowered revenues.

At another time, during the redesign of this blog, I switched from one ad format to another for the end-of-posts AdSense ad space. This, combined with perhaps other layout changes, suddenly cut the ad revenues in half for the blog. It took me some time to realize that I had some ad channels* set up for the specific old layout size, and by changing this I must have kicked out all those advertisers who were pushing their ads through the channel.

*This setting can be found at AdSense Setup -> Channels.

7. Use competing ad systems when AdSense doesn't seem to work for a site. At CoverBrowser.com, which shows galleries of comic and book covers and so on, I tried including AdSense ads in "non-annoying" places in the layout (including trying to use AdSense affiliate links via AdSense Setup -> Referrals), but this didn't seem to work at all. However I then tried "affiliating" the "buy" link below individual covers, utilizing the eBay affiliate commission system offered by AuctionAds.com*. (Disclosure: Patrick Gavin, co-owner of AuctionAds, paid me for consulting before on other projects, like Sketchcast.com.) This worked a lot better, and as it was simply connected to an existing site feature, it also didn't add clutter.

A good start to find other ad programs is to search for adsense alternatives on Google... you will see a lot of lists which are dedicated to competitors. (Note that some of these competitors may be US-only.) You may also want to join an ad or blog network like The Deck, Federated Media (disclosure: I was part of Federated Media before), or 9 Rules. Before joining such a network – which might require you to show them your traffic stats and so on – check if their typical ads and campaigns fit with your site layout and your general ad type preferences.

*CommissionJunction also offers an eBay affiliate system but CommissionJunction has really low usability, in my opinion; setting it up is confusing.

8. Sometimes you may get a sudden increase in traffic, hence ad clicks, but you can't locate the source of the traffic. I'm using Google Analytics to track my sites, though AdSense is also a good first indicator of traffic explosions... because it will show the combined page views of all your sites (provided you include AdSense on all of them), as opposed to Google Analytics, where you need to check site by site individually.

However, sometimes even with Google Analytics, you won't be able to locate the source of your traffic because there's no specific new popular referrer being shown (a referrer is the site linking to your site, provided people click on that link). In these cases, it may well be that your site has been discussed in a TV show or similar, as the show won't "link" to you (but audiences will be entering your domain manually into the browser when they like what the saw on TV). When you feel that there has been a traffic explosion sometimes you may get additional email feedback in regards to your site, and it makes sense for you to ask your visitor: where did you first find out about the site? Maybe the can let you know about the name of the TV show, or magazine, or other "offline" source responsible for the peak. (I sometimes sent pointers to the BBC Click show for instance, with partly enormous effect.)

9. Consider using AdSense even when the page doesn't get any traffic yet. Who knows, some day the traffic suddenly explodes, and you might not realize fast enough and thus miss out on the action (as sometimes, traffic goes as fast as it comes).

On the other hand, reversely I would suggest to never do a site just to make ad money with it. That kind of motivation may lead to spammy sites that don't help anyone really. (If a project is great, it's great even if it doesn't make any money.)

10. Making money with AdSense takes time. In my experience, it may take many months to years for a site to gain enough traffic to make OK money through AdSense... if ever. I have almost never experienced any site making quick and easy money with AdSense (though you may be getting quicker results than me of course, as it depends on so many variables!).
I think for any site getting a couple of thousands of visitors a day, you might want to start playing around with AdSense to see where it takes you (if you didn't already include AdSense anyway just to see what happens, and following up on tip #9). As you are paid in US-$, the actual benefit the ad revenue will bring depends on your local costs of living as well (you might even ponder moving or going on an extended holiday trip if your local costs of living are too high for your site revenues to cover)....

Extra Cost to Buy Yahoo: Retention Pay

Microsoft’s pursuit of Yahoo, if successful, will leave it with more than one bill due.

The shareholders, to be sure, will collect their payment, but Microsoft will most likely need to put together a package of financial incentives to prevent talented engineers and managers from hopping to other jobs in Silicon Valley.

The employee retention program could be expensive, perhaps costing billions of dollars, based on what Microsoft did when it acquired another technology company last year.

A look at that deal suggests the extent to which people are the vital assets at companies that mainly generate ideas that become software and Web services. The hidden cost of “flight insurance” against employee defections may also be a reason Microsoft has resisted raising its bid, which is now worth $42 billion.

Last May, Microsoft bought Tellme Networks, a maker of voice-recognition software used in directory assistance and for searching the Internet through voice commands. Microsoft paid $800 million for Tellme, a private company based in Mountain View, Calif., but it put in another $100 million for employee retention programs, according to two people close to Microsoft. That figure has not been previously disclosed.

Cash payments, stock options and grants to encourage employees to stay after a takeover are fairly standard in Silicon Valley, venture capitalists and industry analysts say. These incentive plans, they add, can extend deep into the engineering ranks, unlike the situation in most other industries where retention packages, or “golden handcuffs,” are typically offered to a handful of top executives.

For Tellme, which has 330 employees, the money set aside amounts to more than $300,000 for each worker.

Yahoo is a much larger company, with more than 14,000 employees worldwide. And if Microsoft acquires Yahoo, any employee retention effort would probably be more tailored and less broad than for Tellme, analysts say. But even a program proportionately much smaller could add another sizable expense, perhaps a couple of billion dollars, to the overall cost of bringing Yahoo into the Microsoft fold, analysts estimate.

“It would be a significant additional expense that would come due over several years,” said David B. Yoffie, a professor at Harvard Business School. “And Microsoft knew that when they made the bid for Yahoo.”

When buying companies in Silicon Valley, Microsoft in particular may have to offer attractive incentives to keep employees. Its reputation is still tainted by memories of its strong-arm tactics against companies like Netscape and Sun Microsystems in the 1990s, which prompted a long-running federal antitrust case that it lost.

That reputation is probably dated, noted Mark R. Anderson, chief executive of the Strategic News Service, a technology newsletter. “But if you’re in the Valley, that first impression of Microsoft still has to be overcome,” Mr. Anderson said. “So I think the company pays more in employee retention packages — a Microsoft premium.”

At Tellme, there was some history to overcome. Michael McCue, a founder and the chief executive, was a vice president for technology at Netscape. He met regularly with Justice Department investigators when they were assembling their antitrust case against Microsoft.

When the chief executive of Microsoft, Steven A. Ballmer, offered to buy Tellme, Mr. McCue asked if his company would be forced to switch the operating system used in its data center, Sun’s Solaris, to Microsoft’s Windows.

“No, no, we’ve learned our lesson,” Mr. Ballmer replied, according to Mr. McCue.

Mr. McCue declined to discuss Microsoft’s employee retention program, other than to say it had been ample and effective. A few people have left, including Robert P. Komin, Tellme’s chief financial officer, who joined a solar energy start-up, Solexel. But 95 percent of the workers who were with Tellme when it became a subsidiary of Microsoft stayed.

“It’s been a great experience,” Mr. McCue said.

United Technologies Profit Jumps 26%

United Technologies Corp., which makes Otis elevators, Sikorsky helicopters and Carrier air conditioners, said Thursday its first-quarter earnings rose 26 percent as the weak dollar boosted profits throughout the business.

But its shares fell almost 3 percent as it reaffirmed a forecast for the year that was below Wall Street expectations.

The Hartford-based industrial conglomerate earned $1 billion, or $1.03 per share, in the quarter, up from $819 million, or 82 cents per share a year earlier. Analysts expected $1.01 per share, according to a Thomson Financial poll.

Revenue rose 12 percent to $13.7 billion from $12.3 billion a year earlier and was ahead of Wall Street's estimate for $13.4 billion.

Chief Executive Louis Chenevert says he is ''confident'' with the company's 2008 financial targets.

Chenevert reiterated United Technologies' 2008 profit forecast of $4.65 to $4.85 per share. Analysts expect earnings of $4.86 per share. Revenue is expected to grow to $59 billion, he said.

Its shares fell $2.13, or 2.9 percent, to $70.50 in morning trading.

The company's Fire and Security division, which makes and installs alarms, video surveillance systems and fire detection and fire fighting products, posted the biggest gains in revenue and profit. Revenue for the quarter was nearly $1.6 billion, up by more than 28 percent, and profit was $115 million, up by more than one-third.

The fire and security business is the most recent among United Technologies' business, which was established in 2003 with the acquisition of Chubb and expanded two years later with the acquisition of Kidde.

The conglomerate is seeking to expand the segment with a takeover bid, announced last month, of North Canton, Ohio-based Diebold Inc., a manufacturer of ATM's and voting machines.

EBay Chief Says Change Isn’t Over

More changes are coming to eBay, and John Donahoe, the new boss, is girding for the repercussions.

Mr. Donahoe, who has been running the company since his appointment to the top spot was announced in January, wants the company, the Internet’s largest e-commerce site, to operate less like an unruly flea market and more like a strip mall — where buyers are guaranteed to have a comfortable and predictable shopping experience.

The changes are intended to help eBay restart growth in its main marketplaces business, which has stagnated as Amazon.com has attracted eBay’s best buyers and sellers.

The effect of some of those changes was beginning to be seen in financial results. The company announced stronger overall earnings on Wednesday, including a 22 percent increase in net income from the year-ago quarter, beating analyst’s estimates. The results were aided by robust international sales, a weak dollar and eBay’s rapidly growing ancillary businesses, like the payment service PayPal and the Internet calling service Skype.

EBay’s stock, which was flat in late trading after the earnings report Wednesday, is up 20 percent, to $32.12, since mid-March on these positive signs. But its marketplaces business still continues to stagnate. The number of active eBay users increased only 1 percent in the last year, to 83.9 million.

To fix that, Mr. Donahoe has pushed through a series of significant changes to the auction site, many of them favoring big, reliable sellers. And that has meant inevitable rancor in eBay’s boisterous community of smaller sellers who have made a living out of selling knickknacks from home.

For example, in February sellers who viewed a recent change to eBay’s payment structure as a fee increase organized an attention-grabbing boycott of the site. In an interview after the quarterly earnings report on Wednesday, Mr. Donahoe, who officially succeeded Meg Whitman in March, said he was not fazed by the attention. “The good news is Meg prepared me well for this,” he said. “I will say at one point in the first quarter I got an e-mail from my mother that said, ‘John, eBay sellers may not love you, but your mother does.’ ”

Mr. Donahoe has signaled that everything eBay does is up for review. Among the speculation on the sweep of that statement is the possibility that eBay will sell Skype, which eBay bought in 2005, to the Internet search giant Google.

Mr. Donahoe did not dismiss the possibility, but said he wanted to give Skype’s new chief executive, Josh Silverman, more time to look at synergies between the calling service and eBay. “Let’s see if they exist,” he said. “In the meantime, we’re building a great business.”

Mr. Donahoe says he is focused on bringing consistency to the core marketplace business and improving the experience for buyers. Among his recent changes, eBay has revised the way that auction listings appear in search results on the site. Instead of listing auctions in the order which they end, the company is now favoring sellers with better ratings, lower shipping fees and cheaper prices.

Beginning in May, eBay will not allow sellers to leave negative feedback for buyers, a move that has many sellers complaining. “One of eBay’s mantras for the last 10 years was that they provide a level playing field for everyone,” says Jonathan Garriss, executive director of the Professional eBay Sellers Alliance, a group of eBay’s largest sellers. “But they now realize that just doesn’t work in today’s competitive environment. So they are doing a lot of things they never did before, like treating their biggest sellers like their customers and giving more things to their better customers. Any business does that.”

The fee and search changes, which took effect only six weeks ago in the United States, Britain and Germany, appear to be having a positive effect. In its earnings call Wednesday with analysts and investors, eBay said that it was seeing increases in the number of listings on the site and in gross merchandising volume or G.M.V., the total sum of all transactions on the eBay marketplace. G.M.V. in the latest quarter increased 12 percent from a year earlier.

The company said net income in the first quarter rose to $563 million, or 42 cents a share, on revenue of $2.19 billion, a 24 percent increase from the period a year ago. But its operating margin fell to 32 percent from 33.6 percent last year, as lower-margin businesses, including PayPal and Skype, grew quickly.

The changes in fees and search listings have drawn anger from some of the smaller mom-and-pop sellers on the site, who now say they have a harder time making a profit and getting their items to show up in search results.

“You can’t sell anything. Buyers say they can’t buy anything. It’s a disaster,” said Valerie Lennert, a longtime seller of custom doll clothes who helped organize the boycott in February. She says the new changes to eBay’s search engine effectively make her listings invisible.

Mr. Donahoe says it is not the company’s intent to discriminate against small sellers. But, he said, “where large and small sellers are trying to cut corners and not provide a good buying experience, we are making less room for them in the marketplace.”

Mr. Donahoe outlined some more coming changes to the site. In Australia, the company is testing a program that requires sellers to accept only PayPal payments. Mr. Donahoe said that if the test was successful, the company would introduce it in other countries “in months, not years.” Mr. Donahoe said the intent was to cut down on fraud on the site, but critics say the change will entitle eBay to a double helping of fees on each transaction.

Ms. Whitman was absent from eBay’s earnings call for the first time in more than a decade. Although she remains a director and advises Mr. Donahoe, she is spending part of her time as a national co-chairwoman for John McCain’s presidential campaign.

Free Bookmooch service puts novel spin on books

Like some of the luckiest people in high tech, John Buckman made a mint on his first company and now dabbles in passion projects.

But one of his latest companies may prove he's more than just lucky, at least if you buy the Silicon Valley adage: Strike it rich once, you're lucky. Twice, you're smart.


BookMooch.com founder John Buckman
(Credit: BookMooch.com)

BookMooch.com, Buckman's 20-month-old service that lets people trade their used books for the cost of postage, is making a small impression on a giant online retailer, Amazon.com. Even though BookMooch is free to members, the site generates an estimated half-million dollars in annual book sales for Amazon because of a browser plug-in called the Moochbar, which matches members' book wish lists to Amazon's retail inventory. For every 25 books swapped on BookMooch, at least one person buys a new book on Amazon through the Moochbar. BookMooch collects 8.34 percent on each of those Amazon sales.

"We're making money by accident," said Buckman, who spoke recently at a technology luncheon near his home in Berkeley, Calif.

Apart from still-negligible sales, what should be more of a wake-up call to the book industry is how the site is tapping into the so-called long tail of book retail with a social, free service. The long tail, as the theory goes, accounts for as much as 60 percent of the goods sold in an industry, or all those unpopular works that find a home with only a few. It's said that the lion's share of Amazon's book sales come from works that have a low sales ranking.

What's more, within the next nine months, Buckman expects to have the inventory of books--distributed among its members--that would rival that of the largest book wholesaler in the United States. BookMooch now has an inventory of about 480,000 books among its 70,000 trading members, but at its growth rate it should rival Ingram Book Company's 1 million books by early 2009, Buckman said. BookMooch's decentralized warehouse of books serves the long tail the same way that centralized warehouses like those of Ingram's serves the top of the tail.

"This is meant to be a noncommercial business, with no ads and no fees. We're just trying to do something fun and huge--like be the biggest bookstore on the planet," said Buckman, who sits on the board of the Electronic Frontier Foundation and European equivalent, the Open Rights Group. "It seems to me we should be able to trade more books than Amazon sells."

BookMooch isn't alone in appealing to people's desire to trade books or consume in a more earth-friendly way. Novel Action, Bookswap.com, and Swaptree.com are just a few of the sites that let members trade books. And while none of them is rivaling the traffic that Amazon and Google Books garner per month, they are collectively proving there's demand in the long tail. Eco-online book retailer Better World Books, which resells used books and donates some of the proceeds to global literacy projects, recently raised $4.5 million in its first round of financing to grow its business.

Buckman is a true Internet veteran. In 1994, he founded the e-mail software company Lyris with his wife, Pam. During a recent talk, he said Lyris was originally designed for groups of like-minded people to easily exchange e-mail. But, he said, it eventually became known as a spam company when it started selling to larger marketing clients that would use the software to send mass e-mails to customers. For him, the company was "desperately difficult and boring to run."

Four years later, he sold Lyris to J.L. Halsey Corp., but continued to head it for seven more years. During the luncheon, Buckman said his goal was to earn at least $3 million from the deal so that he could live comfortably on the $90,000 in annual interest. But he ended up with $32 million after 11 years with Lyris, more than enough to fund Magnatune and BookMooch.

Influenced by Buckminster Fuller
Long inspired by the inventor Buckminster Fuller, Buckman wanted to change the world by creating a company for which people would want to work for free, if they could. That's when he turned his sights to the music industry.

In 2004, Buckman started Magnatune, an Internet-era record label that would take on the major labels. Designed in the Linux model, in which developers can help improve the back-end of the music site, Magnatune is a music label that signs largely unknown artists and lets Web surfers decide how much they want to pay for their music, starting at about $5 for a record. Magnatune splits the sales with the artist 50-50.

Despite the promise for artists, Buckman said that Magnatune hasn't taken off. After five years in operation, it now breaks even with four employees. One reason for the uphill battle, he said, is that much of the $12 billion in annual sales from the U.S. music industry comes from music licensing. And because those licensing deals largely get done between two friends at a bar in Los Angeles, Magnatune artists are left out of the big music label conversations.

"Big companies don't want to do business with small fish," he said.

However, he learned a larger lesson with Magnatune. He created the service with the same construct as old-media: push something out to people and they will consume it, he said. He failed at creating a participatory environment in which people buy into the service, or have a personal stake in it.

BookMooch accomplishes that by asking people to put up 10 books of their own to receive one point, which will allow them to get their first book for free. In that deal, the new member must be willing to send off three of their own books to other BookMooch members. Unlike Lala.com and Peerflix.com--sites which have fallen down on paying postage for members--BookMooch requires that members pay to send the book. People who have more points than they can use on BookMooch, known as power moochers, can donate their points to charity groups on the site.

So far, BookMooch members have swapped as many as 700,000 books. The average member swaps 3.5 books per month, up from one book per month a year ago. The most-traded books on the site, whose membership consists largely of older moms, include Memory Keeper's Daughter by Kim Edwards (traded 780 times) and The Kite Runner (traded 585 times).

It's a sizable accomplishment considering that the Berkeley-based company has only two employees, and the project is funded solely by Buckman.

"If you want to change the world, find a better way to do something and have everyone follow it," Buckman said. "I'm not looking to generate revenue because I already made my $32 million."

When asked if he would entertain a buyout offer of his company for another $32 million, he said he would definitely have a conversation.

Even if he doesn't strike it rich with BookMooch, he may do something more valuable...like prove there's another way to tap into the book business.