We dropped Illy off at the vet this morning to have a mole removed from her lip. She developed it this summer and on her last checkup, the vet recommended that it be removed. We just got back from picking her up. She’s groggy from the anesthesia, but otherwise looks great. Ouzo doesn’t seem to care that she’s back home.
Undoing the Industrial Revolution:In the virtual world, you win by being good: Automation reduces the benefits of scale, the Internet equalizes distribution, and reputation follows from quality rather than incessantly repeated slogans.
Mass production replaced by specialized production. Good riddance McDonald’s and Budweiser. 
Jan Ullrich is upset about Lance’s comments about him being lazy: “Lance does not know me at all. This comment is probably due to his American mentality.”
Ullrich wasn’t much of a threat in the 2004 Tour but, assuming Lance does race it in 2005, this could be the start of a good rivalry. They’ve had a good rapport before, however.
It’s the start of Thanksgiving week, which is the biggest week on Recipezaar traffic-wise. December is huge because of Christmas and New Year’s, but that traffic surge is spread out over a couple weeks. Thanksgiving’s traffic is concentrated in three days: Monday will be our biggest day in our history, Tuesday is even bigger, Wednesday is huge and Thursday the traffic just drops at about 9am our time as people are finishing their food and sitting down to eat. History has shown that our Thanksgiving traffic sets the bar for what the following year averages month-to-month. So this week helps us project our growth for next year.
This demonstrates an unexpected advantage in running a cooking site: the traffic spikes are very predictable since they coincide with American holidays. Even Halloween and St. Patrick’s Day are big cooking holidays we’ve learned. As the internet population becomes more global, I expect this to change so that our spikes coincide with every holiday around the globe.
It’s exciting to watch the live stats on the servers that gauge their performance during this week. Last year went well, after we had an emergency repair a week before Thanksgiving Day. Over the course of 2004, we’ve added quite a bit of horsepower and made some significant software performance improvements so we’re confident enough that we decided not to add any additional hardware before Thanksgiving. So this week will tell us how smart/stupid that decision was.
Update: At 10am today, our hourly traffic for both hours between 8am and 10am blew away our highest hourly traffic ever. And daily traffic generally peaks from noon to 3pm, so those three hours are going to be interesting today.
Update #2: By the end of the day, our total traffic was 50% higher than the monthly average. Looking back at last year, it wasn’t until Wednesday that we hit 50% increase for the day. So even if Tuesday and Wednesday this year are the same as yesterday, we’ve done significantly better than last year!
Just got email from a friend who is at a hotel in Cupertino right now for a day of interviews at Apple tomorrow. Hey Apple, hire him!
Yesterday, we went to look at carpet samples. This time we went to the local Vashon furniture store, of all places, and were surprised to find a good selection there. We have a carpet we think we like. And then we put primer on the walls to prep for painting.
We’re still deciding what colors to paint the walls and trim. We got some samples yesterday but didn’t like them once we put them on the wall, but we got a better idea about the direction we want to go. We went to the hardware store and picked out more samples to try out. We’ll put those on after the Steelers game…
…Steelers won! We painted some colors on the wall. I think we’re set on the white for the walls and for the carpet, but the trim color is still a problem. We want the windows to show all the color of the outdoors so we want the interior colors to be less noticeable so as not to detract from the windows.
The drywall guys keep coming back for just a couple hours to put another coat on the new drywall. It looks done at this point. But they said yesterday they have to come back this morning for 20 minutes to put primer on.
Not exactly sure what’s next, either we’re going to paint the walls or they’re going to trim the window frames. The electrical work needs to be finished up, meaning putting the plates and jacks in and installing the in-wall heaters. After that, we’ll paint the trim and decide on flooring and get that installed. Then it’s done.
We’ve been thinking we’d do bamboo flooring, but now we’re thinking carpet instead. It’s less expensive, will be more durable against our dogs’ claws, Illy doesn’t like wood floors and carpet will be warmer. Decisions, decisions…
I finally solved the Airport Express problem I’ve had since I got it. The Airport Express would simply “drop-out” for a second or more. This wasn’t that noticeable when streaming music since iTunes buffers so much that a short loss of network connectivity had no effect. But when I used it to set up our temporary office, the drops were much more noticeable since I live in ssh sessions to various servers.
After lots of trial and error, I simply unplugged our older Linksys access point. It’s an 802.11b access point and the Express was getting confused between it and the newer 802.11g access point also in the house. Not a single dropped connection since! Fortunately, it doesn’t appear that we need the 802.11b since the greater range of the 802.11g access point seems to cover the house.
We watched Frontline’s show about Wal-Mart last night. Wal-Mart’s incredible power in the marketplace is not new information, but the extent to which Wal-Mart is benefitting China is new to me.
Wal-Mart’s mission to drive prices down for American consumers has the effect of squeezing American manufacturers to the point of bankruptcy, given that they can only go so low on wages to their employees. But China’s labor costs are extremely low, so Wal-Mart is increasingly relying on China’s manufacturers to give Americans their low prices.
That’s great for China, obviously, but maybe not so good for America. As one interviewee points out, it’d be wonderful for Americans if Americans were consumers only because they’re saving money, but Americans also need jobs. And this has a profound effect on our trade deficit — the US exports $3 billion worth of goods to China and imports $36 billion a year. In fact, our exports (raw materials, mostly) are being used by the Chinese manufacturers to build products that they sell back to us.
One American company fought back, though, and won. Five Rivers, an American manufacturer of television components, sued and forced anti-dumping tariffs on China. This effectively increased the costs to Chinese manufacturers for television components (Wal-Mart helped to defend the Chinese manufacturers in the legal case). But it may have been too late for Five Rivers — they filed for bankruptcy last month.
What made America strong economically, a large population of consumers with money to spend, could come to an end given that our jobs are decreasing in pay. With four times the population and increasing wages, China’s larger market of wealthier people could make China the economic superpower that dwarfs America’s economy.
Is this simply capitalism running its course? Is it the global economy being realized? Is Wal-Mart a company that is transforming American retail business to the benefit of the American economy? Or is Wal-Mart single-handedly turning China into an economic superpower? Will today’s merger of K-Mart and Sears, two of Wal-Mart’s victims, create a second Wal-Mart and increase our reliance on China?
Bambi Francisco reports that the web will continue to be advertising-based rather than subscription-based. She concludes this in spite of optimistic numbers for paid-sites, which is fairly new compared to almost a decade of online advertising. And she completely ignored the fact that online advertising is a tiny tiny tiny fraction of what it was in 1999 ($30/CPMs versus $1/CPMs today) — that’s not growth, it’s a slight bounce back from a number approaching zero.
And she incorrectly assumed that because total online advertising is increasing, that all sites supported by advertising are increasing their revenue. That would only be true if the size of the web, e.g., the number of web sites in existence, grew slower than advertising revenue. But that’s not true — the web is growing at exponential rates. If she asked a site that isn’t in the top 3 sites on the web, she would have heard a very different story: that advertising is decreasing in revenue and if a site is earning more revenue, it’s only because the traffic has grown at a higher rate than the advertising revenue per CPM has declined.
But although she tried to extrapolate it to all sites, her main point is about news sites. I agree that for news sites, advertising is the only way to go because news is fleeting; the masses don’t care about old news so old news is worthless. So charging for archives is hopeless. If a news site wants to charge for content, they’d better have exclusive content. But that’s news sites’ fatal flaw: news cannot be exclusive. For example, no news site could have kept the results of the 2004 Presidential election a secret for paid subscribers only.
But that’s not true for sites that provide a useful service that goes beyond the content itself. Recipezaar recently launched a pay version of the site that gives members additional features that free members don’t get. If we continue at our current rate for the rest of the 12 months, our first year will account for 30-40% of our advertising revenue. Not bad for the first year! And I expect that to only increase while advertising revenue continues to decrease. This works because Recipezaar is a web application, i.e., it’s software.
A web site is either a printing press or it’s an application. The economic future of the web is clear: advertising will (barely) support printing press web sites and fees will support advertising-free application sites.
