It's Rishi

At 4:02PM (Eastern), Google posts their Q4 earning results on the Business Wire. The big, big news (definitely the biggest news out of the valley for today) is that their numbers fell short of consensus estimates. At 5:11PM Reuters posts their summary of this news item and at 5:29PM, AP does the same. At around 5:30PM, this news cluster lands on Google News under the Business section. At 5:45PM, a CNN (via CNNMoney) writer has published an article covering this news.

It’s 6PM (Eastern), a full 2 hours since this news landed, and no sign of it on Memeorandum. This exhibits a limitation of pure algorithm-based aggregators is that in their attempt to maintain a high signal-to-noise ratio, they have a hard time grabbing big stories that are just breaking. However, I know several people that consider Memeorandum to be the best source for real-time Tech-business news. Clearly in this case, it is not.

What’s somewhat amusing about this is that the first news organization to post a follow-up to Google’s own announcement was not even US-based. It was The Financial Times, a London-based publication.

UPDATE: At around 6:15PM (Eastern), the news hits Memeorandum. The head story is the AP article and it has a couple posts from the blogosphere connected to it. I’m guessing what happens is that since there’s tons of news items posted by AP every day, there’s no way to isolate immediately which few are actually big news. Big news publications, in this case like CNN or TheStreet.com, publish fresh copy on the news and do not generally back-link. So, unless you are clustering news by relevance, you’re not going to be able to figure out what’s big until bloggers, for which back-linking is common practice, start posting about it.
Also, one could certainly argue that for 99.9% of people, a 2 hour delay is totally justifiable especially if it means keeping a high signal-to-noise ratio. I know for myself, this would usually be my preference as well.

Last night, I went to SuperHappyDevHouse, which is basically an all-night party/hack-a-thon graciously hosted by David Weekly at his own house. This particular SHDH was actually the 7th such event. I found out about SHDH last week at a BBQ thrown by the Meetro guys and decided that I would definitely drop by at this weekend’s event. The event runs from 7PM-7AM and unfortunately I arrived really late, around 1AM. I didn’t get a chance to participate in any of the interesting projects people were hacking on, but I did get a chance to meet some cool people including the man himself David Weekly (who’s working on PBWiki with another young entrepreneur I met recently, Ramit Sethi), Neil Kumar (an engineer at Yelp…Neil if you’re reading this come on bro hook me up with an invite to the next elite Yelpers party!), David Kadavy and Ben Yee from WorkMetro and David Quiec from Rrove.

All in all, I was happy I made it to the event and I’m looking forward to making it on time to the next SHDH so I can participate more.

There’s tons of inspiring quotations you and I hear on a regular basis. When I hear one, I’m usually like “oh wow! that’s so true!” but after passing it on to a couple friends, I forget it in a day or two. Well, one such quotation I heard recently I can’t seem to get out of my head:

“Whether you think you can or think you can’t, you’re right.” – Henry Ford

When I first heard this a few days ago, as usual I was like “oh wow! that’s so true!”. What one can achieve is all a matter of one’s attitude and commitment, right? Well, a few hours later, I started thinking more about this though and I realized that actually I don’t agree with it.

I reflected back on several situations that took place over the past few months in my life and I strongly feel as if the opposite is true: If you think you can you probably can’t. If you think you can’t, you probably can.

This may sound bizarre but think about it for a second. When a person is bullish on something, they tend to focus only on reasons which support their conclusion that it is possible, neglect the realities involved, and thus become overly optimistic. When a person is bearish on something, they tend to grasp at any excuses they can find which support the conclusion that it’s not possible and thus become overly pessimistic.

Anyways, I realize I’m totally overanalyzing Henry Ford’s quotation and I realize that it’s meant simply to be inspirational, but for some reason this quotation has been (uncharacteristically) stuck in my head for several days now. Which do you agree with, Henry Ford’s version or my contrarian version?

So the big news of the day is that Google has agreed to censor its search results in China. Because Google had not previously complied with China’s policies, the Chinese government either blocked or severely crippled access to Google. China’s a huge, growing market and being shut out of that market was obviously not good for Google. Immediately after the announcement was made, tons of negative headlines both in the mainstream media and the blogosphere sprouted up. The announcement caught everyone by surprise since agreeing to censor its results is so seemingly un-Google like. It’s kinda hard to “do no evil” if you’re implicitly supporting the Chinese government violate the human rights of their citizens. Google’s counter argument is that their hope is to influence a loosening of Chinese policies over the long-term.

To be honest, while I was surprised by the announcement, I wasn’t planning on losing sleep over the matter. After all, what do I care, right? I’ve got the beautiful 1st Amendment by my side (although we do unfortunately have the FCC). Well…

Other search engines, including Y! and MSN, already censor results in China. Out of curiosity, I searched for ‘tiananmen square’ on both Yahoo! and Yahoo! China. The result was sickening.

‘tiananmen square’ search on Yahoo!
1,790,000 hits. Pages of links describing the 1989 protest/massacre.

‘tiananmen square’ search on Yahoo! China
4 hits. Some junk spam.

Unbelievable. I’m finding it difficult for me not to care. It seems like Google’s need to satisfy its shareholders is corrupting the company’s values again.

UPDATE:

Earlier when I was writing this post, it seemed like Google China had not yet enabled censoring. Although, I just checked again and it looks like in fact it is now.

‘tiananmen square’ search on Google
1,810,000 hits. Pages of links describing the 1989 protest/massacre.

‘tiananmen square’ search on Google China
10 hits. Chinese tourist guides.

I can’t read Chinese but it does look like Google China is in fact printing an alert indicating to the user that the results have been censored.

My friend Rob Poitras pointed out to me that YouSendIt, one of the most popular free file hosting services, serves up a whopping 44TB of data every single day. He mentioned that as far as he knows, they are not profitable either. So, I was curious about how sound their business model is. I have to think that it is because just in the past year, there has been many other essentially identical services that have launched.

Unfortunately, I couldn’t dig up any hard numbers so we’ll have to base this analysis off of fairly rough details. The facts from YouSendIt.com claim 44TB of data daily and “over 8 million unique visitors” monthly.

Costs
It doesn’t take a genius to realize that by far the primary cost of doing business for a file hosting service is servers and bandwidth. I’m guessing the latter far outweighs the former. Not only are they serving an insane amount of data, but also for a file hosting service to compete, it needs to offer fast download speeds to users.

44TB of data flows daily and there is 86,400 secs in a day. At any given time, there is an average of 0.5GB/sec (which is 500MB/sec or 4000Mb/sec) being transferred. I really wish I had a good number of how much it costs to serve data on like a per GB basis. I can imagine some ways I could go about calculating it but without accurate starting data, it’s probably not worth the time. I saw some numbers like 1U rack space + 100Mbps unmetered for $2500/month. Let’s just say that you bought 40 of these. Each 1U file server maxes out its 100Mbps connection. Let’s say each file server is leased and runs about $500/month. So total cost for all this is 40 x ($2500+$500) = $120k/month. Obviously this is a very crudely made number and I’m sure that the scale that YouSendIt is doing things, it should be cheaper. However, there is a significant operational cost to keep such a large service like this running and there is some development cost for various software and tools and such. Let’s say total for everything costs $175k/month. (I still did not include general personnel and administrative costs for YouSendIt)

(Advertising) Revenue
YouSendIt makes money via advertising. However, because this advertising space is not very targeted (really the only way to target is the name of the file which is not necessarily meaningful at all), I just can’t see it having as high a CTR (click-thru-ratio) as a contextual systems like AdSense or keyword systems like AdWords. YouSendIt has two types of ads on their site, image/banner ads and text ads. My *guess* is that the image/banner ads are sold on an impression basis not CPC. I think that is typically the case with image ads because they are so imposing on a page, that it’s hard for the user not to notice it. The question is how expensive? Since it’s just not that targeted and users don’t really spend that much time viewing the page (just click download link and leave), I could see it going for $5 CPM (cost-per-thousand-impressions) which is $0.005/impression. For text ads (looks similar to AdSense text ads but it’s managed by a company called BidClix), depending on the type of business the advertiser is, YouSendIt charges a minimum of either $0.25 or $0.50 for each click. Looking at the current bid amounts which are a few pennies above the minimums, let’s assume an average of $0.40/click.

So to calculate monthly ad revenue, let’’s refer to the 8 million unique visitors per month. Let’s say that results in 10 million file-download-page views (the pages that show ads) per month (average of 1.25 page views per unique user per month). Each page view includes 2 of the banner/image ads so that’s 20 million impressions. At our figure of $0.005/impression, that’s $100k. For the text ads, since again they are not very targeted, a CTR of say 1% seems reasonable. 3 text ads are displayed at a time. So total clicks on average per page is 0.01 x 3 = 0.03. Multiplied by 10 million page views that’s 300k clicks per month. At an average of $0.40 per click, that’s a total revenue of $120k for click revenue. Total ad revenue estimate is $100k + $120k = $220k.

Final Analysis
So my estimate cost of operating this service is $175k and estimate of ad revenue is $220k on a monthly basis. So we got a profit right?! Well, as I mentioned earlier, I didn’t include administrative costs. Let’s just assume that’s a paltry $25k/month which is mainly salary for the key administrative individuals. Luckily the service sort of markets itself virally so I’m guessing marketing costs are very low. Anyways, so *total* montly cost is $200k and revenue is $220k. $20k/month profit..we’re in the black!

Again, this is an extremely rough conclusion. I am curious how far off I am though. What does interest me is that I think some of these file sharing sites received venture investment. I assume this means that these sites plan to leverage their traffic or content (somehow) into a more profitable business. The content seems like a tough play since it’s private and also a lot of it is probably (illegal) copyrighted material. Without such a long-term vision though, sites like these seem to me like a commodity. Even if I were to double my estimate for CPM to $10, the company still is making about a $1MM profit annually. The problem is growing that. Maybe a better operating margin can be squeezed out by improving efficiency or somehow offering more targeted advertising, but still it doesn’t seem like it would offer the growth potential that venture investors would want to see.

Anyways, I’d love to hear some comments on this analysis. If any YouSendIt guys read this, wanna tell me if my analysis is even remotely accurate? =)

In the 1930’s-50’s, GM sponsored the Parade of Progress, which was an exhibition that travelled across the country. As described in a 1953 parade booklet, the purpose of the Parade of Progress was “to show how science and industry combine to contribute to the high American standard of living” and “inspire young people everywhere to work toward an even better America for through them will come the perfection of methods, processes and discoveries still to be made”. Each year that the exhibition toured, millions of Americans, from the big cities to the smallest towns, attended. It gave people much needed hope and joy during the depression-ridden 1930’s and celebrated the prominence and world-leadership of America in the years following WWII.

One of the greatest symbols of the Parade of Progress was the GM Futurliner. The Futurliner was essentially a humongous bus of which several were built to serve as exhibit-on-wheels. Just the sight of these mammoth vehicles brought excitement whenever they arrived in a new town. 12 were built in total but only 3 remain today. 1 of these 3 was sold today for $4 million (+ 8% buyer’s commission) at the Barrett-Jackson collector car auction in Scottsdale, AZ. To read more about the remarkable story of the GM Futurliner and the auction, click here. The Futurliner, and the Parade of Progress it was built for, is a truly great expression of American optimism and industry. I would love to see a Futurliner in person one day and also would enjoy talking to someone who attended a Parade of Progress several decades ago.

I hope everyone had a great holidays and new year’s celebration. This year I didn’t really do anything too exciting, but I got a chance to hang out with friends and family and that more than made up for it. Anyways, I am predicting that 2006 will be a very interesting year for myself. The fate of my current company, Revunity, will be known and I have a few other ideas in my head that I want to explore in the coming months. On the personal side of things, I’m definitely going to take a vacation this year. I’m not sure where and I’m not sure how elaborate it will be but I really need one… a long one.

As for this blog, well, 2006 will be very exciting also. I’ve got a ton of things I wanna do with it. My main bottleneck is time, of course. But, I’m going to make a concerted effort to dedicate more time to this blog. I’ve only had this blog for a couple of months now and already I look forward to blogging. I’m constantly jotting down notes on topics I want to blog about. On at least a few occasions, I’ve hopped out of bed at night to jot some thoughts down. I scribble all my notes using Notepad into a sophisticated plain-text file. This file has quickly grown to be freakin huge. The problem has been that the rate of thoughts going into this text file is way faster than the rate at which I am pulling them out and blogging about them. I’m going to be doing my best to catch up.

Some things to expect in 2006 on this blog:

• Rishi’s thoughts on technology trends – I love technology. I love talking. I love talking about technology. Few things get me more excited then when light bulbs are going off in my head as I contemplate the “next big thing”. Anyone that knows me has heard several of these pitches. I pride myself on not being someone who’s just a talking head. I rarely take anything at face value, instead I’m always digging deeper. I’m also a big student of history. I enjoy looking at how the past can be used to predict the future. Thus, I feel like when I am talking about technology, and future trends of technology, I’m a force to be reckoned with. Anyways, a lot of my notes are about my thoughts on various trends in technology (mostly surrounding computing) and you’ll be seeing many posts talking about them.
• Business Book Cliff Notes – Ever since I got my Bachelor’s degree from Cal in 2001, I always assumed that at some point in the not too distant future I’d go back to school and get an MBA. Well, it’s still something I think about, although as time passes, I become less and less keen on the idea. I do know that there is much to the world of marketing, finance, leadership, etc. that I have yet to experience and learn. Since who knows if or when I’ll actually goto B-school, I’ve decided to start a reading curriculum for myself based on highly-rated-in-Amazon books covering various topics in business. Everything from marketing to how a hedge fund works. However, I’m not just going to read these books cover-to-cover. For each book I read, I’m going to write down what I learned from the book and what questions arose in my head while reading the book. I hope to sort of create my very own cliff notes to business. Obviously, business is best learned by doing. But, we’ve only got a limited amount of time on this planet so learning from knowledge and experiences of others will hopefully be a shortcut. Anyways, the best part for you guys is that you’ll be able to read and reference my cliff notes. Hopefully, both you and I, will find value in them.
• Side Projects – Like I said, I don’t really know what I’m going to be officially working on in 2006, but no matter what, I definitely hope to scrounge together some time to dedicate to some pet projects. One of the really great things about software these days is the richness of both tools and resources. In literally a few hours, you can whip together some pretty cool stuff. Hopefully I’ll be able to share some of my work with all you guys.

As you can tell 2006 is going to be super busy for me, but I’m looking forward to the challenge. =)

Unfortunately, I was not able to make it out to Detroit again this year for the auto show. This year’s show had several key unveilings of both production-ready models and concepts. Here’s my top 10 news items from the show:

10) 2007 Toyota Camry
About once a month someone is asking me what my pick is for a $20-25k family sedan. I’ve recommended the Accord, Mazda6, Passat, and Altima… never the Camry? Why? Well, the reason is because between the two obvious Maytag-like choices, those being the Camry and Accord, I always recommend the Accord because of it’s better aesthetics and better driving feel. Well, it looks like Toyota has come back swinging with its latest generation. Genuinely nice styling in and out, optional class-leading 268hp V6 mated to a 6spd automatic (impressive 22/31 mpg to boot) and well-equipped (moonroof and premium 6cd in-dash stereo standard on the volume leader LE). Unfortunately, the SE variant is still all show. There’s also a Camry Hybrid coming but I’m pretty much anti-Hybrid so I could care less.

9) Honda Fit
Finally Honda brings the Jazz/Fit stateside. I would have liked to see Honda work some of it’s magic to pull off 40mpg instead of the somewhat unimpressive 33/38mpg that it gets from it’s 1.5L inline4. I thought I had read Honda was going to use a CVT which would have boosted fuel economy and performance but I guess not. Without a doubt, it’s boxy mini-wagon shape hurts freeway efficiency. Anyways, the Fit is going to sell well. You get a cheap, reliable, good-looking car with a lot of utility. And it’s less quirky than the Scion’s of the world. It’ll be interesting to see how this car competes with the impressive, new Toyota Yaris.

Chevrolet Camaro Concept
At last year’s show, I couldn’t take my eyes off of the C6 Z06 that debuted. This year I can’t take my eyes off the Camaro Concept. Chevy show-stoppers two years in a row? Who would have thunk it? The news is this concept will go into production in 2009. I’m just hoping that Chevy will actually build something that’s close to the concept. They need to. Unfortunately, for Chevy (and GM), 2009 is a long long way off and with the way things are for GM, they may not have enough money to build a great production Camaro even if they want to. I’ve got a bad feeling that when this car hits showrooms 3 years from now, it’s gonna have Chevy’s typical rental-car feel as standard equipment.

7) Mazda Kabura Concept
I love this concept. It’s like the Miata and RX-8 had a baby. If Mazda builds this with the RENESIS motor this would be one brilliant, affordable sports car.

6) Dodge Challenger
This car is going to give the Mustang a run for its money. The Challenger looks mean just sitting there. My gripe: Based on all estimates I’ve seen, the Challenger is a 4000lb car. A 2-ton sports car? Ugh. Sure, with wide enough rubber, big brakes, and gobs of torque, it’s a capable car. But sometimes I wish the Big 3 wouldn’t just be complacent with the brute force approach. Unfortunately, most Americans (read: NASCAR fans) seem to prefer improving power-to-weight ratio by adding power rather than reducing weight.

5) Subaru B5-TPH

What makes this car so noteworthy is its technology tour-de-force powertrain. TPH stands for Turbo Parallel Hybrid. “the TPH drivetrain consists of a 10kW electric motor sandwiched between the transmission and turbocharged boxer engine. ” The electric motor eliminates turbo lag. The engine incorporates a Miller-cycle engine (anyone remember the Mazda Millenia S?). To top it all off, the Hybrid system even incorporates Lithium Ion batteries.

4) Infiniti Coupe Concept

This car gets my #3 vote (#1 Camaro Concept, #2 Lamborghini Miura Concept)for best looking car of the show. It’s vehicles like this (rumor is this concept is actually very close to what the next-gen G coupe will be) that confirm my belief since the release of the current generation G35 in 2002 that Nissan is serious about turning Infiniti into a world-class luxury brand. This concept is a beautiful evolution of the current generation car and assuming the rest of the specs hit the mark, it’s bound to be a hit for Infiniti. Amid super stiff competiton in the near-luxury segement, it’s absolutely critical that Infiniti continue the momentum they’ve got going right now.

3) Mercedes E320 BLUETEC
I’m a big supporter of diesel. For those that don’t know, diesel technology has come a long, long way in the past several years. Diesel engines are 20-40% more efficient than an equivalent gasoline engine. In Europe where gas is $$$, half of all new cars sold in 2005 were diesel-powered. Unfortunately, because of higher-sulfur content diesel fuel and tighter emission regulations here in the US, there’s not many diesel cars on the market. Well, Mercedes has developed a new diesel technology called BLUETEC which significantly reduces emissions. The E320 will be the first model here in the US to sport BLUETEC but DC is going to be building BLUETEC-powered Chrysler/Dodge/Jeep models as well. This is a BIG step forward for diesel in the US. Diesel makes sense. Hybrid does not. Up until now VW with their TDI-powered models has really been the only one serious about selling diesel in the US. With DCX getting serious about it too, diesel momentum should build.

2) Honda sweeps both the North American Car and Truck awards

This is Honda’s first time winning either award but most importantly it’s the first time in history that a single manufacturer has captured both awards. What an achievement! Both the Civic and Ridgeline are great examples of Honda’s phenomenal execution. I can’t think of another company that has such a high rate of winners over such a long period of time.

1) Geely makes history

The Geely 7151 CK may make a Kia feel like a Lexus, but what’s so historic about it is Geely is the first Chinese automobile manufacturer to to appear at the NAIAS. Chinese manufacturers certainly have their work cut out for them. Not only do they need to build competitive cars for the US market but also they need to build their own brand identity while fighting generally negative perception of a Chinese made car. It’s been 15 years since Hyundai debuted here in the US and they are still fighting an uphill battle (although Hyundai and Kia have been on somewhat of a roll of late). Ultimately, American consumers will benefit from increased competition so I welcome Geely and other Chinese companies with open arms.

There’s a good chance I’ll be attending the NYC show in April this year. Hopefully I’ll get to see all all the new model/concept debuts in person.

I’ve been doing some Kurzweil-inspired thinking lately and I have a question for you all:

What percentage of the knowledge in your brain can be found on the Web? In other words, let’s say you were able to express all the knowledge in your brain as statements of fact. What percentage of those statements would you be able to find on the Web?

Follow up question:
Think about that percent of knowledge that cannot be found on the Web. What kind of knowledge is it? What does it pertain to?

I have my own set of answers to these questions which I will be sharing in an upcoming mini-essay I’m writing, but I was hoping that some of you might post a comment with your own answers to these questions.
Thanks for your help!

I don’t know why it took me so long to finally watch The Aviator, but I finally did and what a treat. I never realized how truly remarkable a man Howard Hughes was. He was “at times an aviator, an engineer, an industrialist, a movie producer, a playboy, an eccentric and one of the wealthiest people in the world”. Hughes was not only a dreamer but he, on many occasions, resolutely risked his entire fortune (and on a few occasions, his life) to realize his dream. I think the best adjective I would use to describe him is fearless. His sheer will power and determination to conquer everything he touched is absolutely inspiring. The Aviator is really a phenomenal tribute to a phenomenal man.

If you haven’t seen the movie, I recommend you do so. In the meantime, read more about Hughes in his Wikipedia article. It’s a shame he never wrote an autobiography as I’m sure that would have been one fascinating read.