Internet Entrepreneurs Blog

If you think iTunes is the Web 2.0 way to find and listen to new music think again. Instead of simply delivering music to consumers in a new way, Last.fm uses the crowd to deliver targeted, streaming tunes for free.

Admittedly I didn’t get it at first. I had installed a precurser to the Last.fm software called ‘Audio Scrobbler’ that tracked which songs I listened to in iTunes and created online lists of the tracks and artists I played the most. Interesting but not terribly useful. After Audio Scrobbler was merged into Last.fm the website gained some social features that allowed members to view profiles of other members who had similar musical tastes. This meant if I found another member who liked Josh Joplin I could browse to see what else that member listened to in hopes I would like that music as well. Again, interesting information but not addictive by any means.

But the feature that I initially dismissed as useless is actually the reason I use Last.fm now: streaming stations. With the free Last.fm player you can listen to ’stations’ made up of artists similar to the artist you search for. For example, if you listen to the New Pornographers similar artist station you’ll hear the lesser known Mates of State, Destroyer, and Camera Obscura. The similar artists are determined by other members’ listening patterns and a tag-based system that is frighteningly accurate. Since becoming a Last.fm addict just a few weeks ago I’ve already purchased several CDs of artists I had never heard of before Last.fm.

Of course the streaming music player is limited in that you can’t rewind songs and can only skip forward (you can’t get everything for free, now can you?). The player even integrates information from Amazon, iTunes, and the Wikipedia to give you artist and song information in one location - how’s that for a mashup?

I’ve pretty much stopped listening to my iTunes library at work altogether in favor of Last.fm - now that’s disruptive!

Once your website is up and running it’s important to get feedback on aspects of the customer experience that just can’t be quantified by analytics alone. An online survey is even a great tool for folks thinking of starting a business to gain important market intelligence before jumping in. We run surveys on our sites from time to time when we have specific questions - like what our paid members think of our service offerings or user interface tweaks - and our tool of choice is Surveymonkey.

You can use Surveymonkey to create simple to complex online surveys and it’s free if you have less than 10 questions and 100 respondents. Otherwise most businesses can get by with the $20 a month plan that lets you send unlimited surveys to a predetermined number of respondents. Unfortunately there’s no ala carte option so if you run surveys infrequently like we do you’ll want to cancel your survey subscription once you’ve gathered your responses.

Surveymonkey even provides email tools to help you send out a survey link to you customers - just upload an excel file with your email addresses and it’s done! The analyticial tools provided online are adequate but if you want to do in depth statistical analysis I recommend popping your data into Excel. Even the online interface at Surveymonkey.com is superb - one of the best we’ve used.

A well designed survey is a great way to gather market intelligence that can give you a leg up on the competition while improving your online business. With powerful and easy to use tools like Surveymonkey anyone can get results quickly and cheaply.

Along the same lines of social network ghettos I wrote about a couple years ago, there are still thousands of  websites trying to be the YouTube for fill in the blank. “The blank” could be adrenaline sports (BroadbandSports.com) or Christian values (GodTube.com) and everything in between. Heck, there’s even a pornographic YouTube that’s actually one of the few successful incarnations but that’s another story

In this analysis I’ll stick to discussing BroadbandSports.com since it’s the video site I’m most familiar with but the lessons here are applicable to all the YouTube wannabes. The idea behind these sites is that niche audiences want their own place to share videos with like-minded viewers, something that isn’t possible with YouTube. Or is it?

YouTube already allows members to tag, rate, and comment on videos, making it easy for anyone to find what they’re looking for. For example, a mountain biker doesn’t need to go to BroadbandSports.com to find mountain biking videos - just type in ‘mountain biking’ and you’ll see YouTube has more than 39,000 videos (compared to a lower but respectable 800 videos on BBSports). Of course there is also a social aspect to sharing videos and YouTube has that covered as well with channels and groups which help segment viewers and videos into niche specific mini-sites.

BBSports faces an uphill challenge on the technical side as well. Processing and distributing online video isn’t trivial and the associated bandwidth costs can be excessive. The latest press releases from BBSports tout new features that allow folks to embed BBSports videos on MySpace and other social networks - a feature YouTube has included since its beginning years ago!

On the business side online video is still a fairly new concept and advertisers are still trying to figure out how to reach video consumers effectively. Even YouTube, owned by the internet advertising Goliath Google, isn’t a profitable endeavor on its own - not to mention the fact that it’s practically a lawsuit magnet for copyright holders. It seems the best finanical outcome for sites like BBSports is that someday they will be purchased by YouTube since all the money is in acquisition these days rather than in meaningful ad revenue.

For me video, like pure social networking, is an opportunity that is quickly vanishing for smaller internet players. While it’s still possible to start up a blog or a rich online community for your niche, I’d say stay away from video unless you’re prepared to slog it out with the big boys or you have a killer technological innovation up your sleeves.

Every entrepreneur needs a few good sources of new ideas and one of the websites we use is Springwise.com. At Springwise you’ll find dispatches on the latest ideas from around the world to stoke your imagination and creativity. The authors do a good job letting you in on new business ideas before they’re mainstream which often means huge growth potential for new entrants (imitation is the best flattery after all ) I subscribe to the weekly email newsletter but you can also get daily updates from the blog-style website.

Springwise has a sister website called Trendwatching that distills the overarching trends that connect many of the latest business ideas into a meme-rich monthly digest. I have to say I prefer Springwise since it leaves room for my own trend interpretations but Trendwatching is definitely a nice way to make sure you don’t miss the next big thing.

Last week I wrote about finding websites for sale and if you’re in the market, it’s important to understand the value of what you’re buying (or selling). Fortunately there are some online tools out there to give you an idea of a website’s value.

Most website valuation calculators use a combination of factors to evaluate a website’s worth: Google pagerank, daily visits, pageviews, domain length (shorter is better), # of backlinks, Alexa ranking, Quantcast ranking, etc. It often seems the more factors these sites take into account, the better the estimate. Still, these sites generally miss the mark since they fail to take into consideration factors they can’t measure (like e-commerce sales, subscriptions, email list size, etc.). One site we looked at gave Google an estimated value of $1.5B whereas Wall Street tends to value the site at $150B (100X greater!). Oddly, the same calculator said Yahoo! was worth $2.6B and one of our sites only $136 (we usually earn more than that on ads in a single day). Of the sites we tested one of the better ones was cubestat.com but your results may vary.

Still, perhaps the most reliable way to value any company (internet or not) is to use the cash flows the business generates to calculate the net present value (NPV). If the website earned (profit, not revenue) $10,000 last year and is growing 5% per year you can get a good estimate of the value of those cash flows over the next 5 years (roughly $40,000 at a 12% discount rate). No need for new math here just because we’re talking Internet businesses - good old NPV works just fine.

All of this is to say it’s important to do as much due dilligence as possible before buying ANY business, online or offline. Dig into the financials and you can come up with a good estimate for the value of any website!

I know I’ve been writing about blogging a lot lately but I truly believe it’s one of the best ways to market your internet business - no matter what your actual business model may be. Today I thought I’d share a tip for bloggers facing writer’s block: Google Alerts. Google Alerts is a free service anyone can sign up for that delivers an daily email digest of the latest news and blog articles containing keywords you specify. So if your website sells toys online you can sign up for a ‘toys’ Google Alert and let Google deliver industry news to you!

Of course if you’ve been reading this blog over the past couple months you know simply re-posting articles on your blog is a bad idea - not only because it’s plagiarism but also because your search rankings could be penalized for duplicate content. Instead, find an interesting article to summarize on your blog, then add your take on it. Readers will appreciate having a source for the latest news while thinking you must read every daily newspaper each morning (how’d he know there was an article in today’s Des Moines Register about toys made from corn?).

Sometimes an article may even spark an original idea you can write about on your blog. These are often the most successful articles from a search perspective and you’ll be amazed how many ideas you’ll get just by skimming the headlines. Even moderately narrow subjects produce dozens of news and blog mentions each day so you’ll almost never run low on inspiration.

Google Alerts is a powerful tool for bloggers looking for interesting daily content. It’s also a great way to keep tabs on your competitors to see what they’re talking about

SEOmoz posted a good article a couple days ago about learning search engine marketing from the top blogs. The post includes some great graphs the author uses to draw conclusions about the current state of blogging in terms of ownership, subject matter, operations, etc. A few charts jumped out at me as screaming opportunity for internet entrepreneurs and I thought I’d share my take.

1. 66% of blogs are ’self owned.’ Perhaps a more accurate title might be ‘privately owned,’ though this is pretty much the same idea. Anyway, the point is that this market isn’t (yet) dominated by large corporate players which is great for folks interested in getting started.

2. 57% of the top blogs are about technology. So for now the geeks dominate but that’s good news - the internet started that way after all and look where it is today! One huge category gap I see on this chart is sports. Unless sports blogs were simply lumped in with another category this is a huge opportunity since sports are, after all, big business. Ditto for all the other categories - technology isn’t the most important thing in most peoples’ lives yet tech blogs currently receive a hugely disproportionate share of visits.

3. 95% of the top blogs originate in the US. So blog reading doesn’t appear to have caught on in other countries yet but clearly the opportunity is massive. Forget about becoming the next Google or eBay in China or India - how about becoming the next Gawker in one of the BRICs?

Opportunity exists nearly everywhere you look on the internet and as an entrepreneur it’s important to filter the good opportunities from the great.

If you’re launching a web-based business on a shoe string budget you probably assume you can’t afford professional design services. And while it’s usually fine to lay out and design version 1.0 of your website yourself, I recommend splurging a bit on your brand identity early on.

Okay, so spending $300 on a logo isn’t exactly splurging but it’s money well spent. At Logoworks (now owned by HP) you can get a logo designed for your business starting at $300 - a steal compared to what it would cost at a typical agency (think thousands of dollars, not hundreds). But beyond just cost savings I’m a big fan of Logoworks for small internet businesses for a number of reasons:

1. The entire process is done online. Who cares if you live in a small town where the closest thing to a graphic artists are the kids in finger painting class - anyone with an internet connection has access to professional logo designers all over the world.

2. Working with Logoworks is great experience for future design relationships. Not only do you get to learn the design lingo (comp, revision, etc.) but working with Logoworks teaches you to articulate your design vision and see it through to completion. Start small so when you’re managing a $5,000 re-design for your site you’ll have the confidence to make it a success.

3. A clean logo is a solid design foundation for your site. If you are planning on designing your first website yourself it’s helpful to at least have a good starting point with your logo. Get ideas for color combinations, fonts, and overall style and you’ll be on your way!

4. Branding is important on day one. The Logoworks process is fairly quick (about a week or so) which means you’ll have your branding in place on day one of your launch. The sooner you can start building meaningful and memorable impressions of your brand, the more successful your business will be in the long run. Don’t put off your online branding for cost or timing reasons - it’s one of the most important first steps you’ll take.

5. The logo creation process is very well organized. There is detailed information at Logoworks.com so you can understand the entire process beforehand and it’s always easy to find out what’s next. Communcation with the team has been excellent in our experience and it’s one of Logoworks’ biggest strengths.

I realize this may read like some kind of infomercial for Logoworks but they’re honestly one of the cheapest, quickest, easiest services out there for web entrepreneurs looking for a simple word mark. Check them out for your next project!

We’re always on the lookout for website acquisitions that could fit the Review App model and there are a couple sites we use to find websites for sale. Buying a website can give entrepreneurs a huge jumpstart in building an online business but it’s important to first consider what you need. Some sites for sale offer a large registered user base while others offers may boast significant pageviews. Still others may offer large amounts of original content or design. Again, just keep in mind what your business needs most from an acquisition.

Sitepoint.com has listings for hundreds of ‘for sale’ websites but it’s often difficult to separate the scams from the legitimate opportunities. I recommend sticking with the Premium Web Sites for Sale category if you’re serious about getting started - and keep in mind you usually get what you pay for. eBay also lists websites for sale but the quality of the listings seems to be far lower than those on Sitepoint. Sitepoint offers more verification services as well so you know you’re dealing with legitimate sellers - check to see if your seller has been ‘Site Access Verified’ and ‘Telephone Verified’ before bidding.

Buying a website can be a risky transaction so be sure to do as much due diligence as possible. Also consider how you’ll raise the value of the site - improved marketing to grow pageviews, placing more display ads on the site, etc. The real estate market may be in the tank these days but flipping websites can be a lucrative side business if you know what to look for!

We’ve spent a lot of time on this blog talking about how to get your content into search engines but sometimes there are things you don’t want to get indexed. Sure you can use robots.txt and no-follow links to block search engines from indexing entire pages but we were curious about one thing: HTML comments. Do search engines read and index them?

For many of us HTML comments can contain embarassing or even proprietary information we’d prefer to keep hidden from the general page-viewing public. How many times have you written something like ‘messy code, I’ll clean this up later’ in the comments or even left database connection strings or development notes on a page by mistake? We certainly don’t condone the latter because while HTML comments are hidden from the casual browser a simple ‘view source’ will reveal your notes to anyone and everyone who pokes around.

But back to the question at hand: Do search engine spiders index HTML comments? Based on our tests the major search engines (Google, Yahoo, and MSN) do not index HTML comments - fortunate for many of us. It appears there is no need to go through and scrub your pages with comments right away but it’s still a good idea to write HTML comments AS IF they were potentially being indexed because you never know who is viewing your source.

If you were considering keyword stuffing your page through the use of HTML comments clearly this won’t work but you might be interested in our hidden DIV and hidden text posts.

Once again we’re out of SEO test results so let us know what SEO myths you’d like to see put to an objective test.