Second Life this, Second Life that.

I ran across the funny little parody Get a First Life when it was mentioned on TechCrunch.

Parodies are a great way to get a point across, provided people understand that it is a parody (when I see people taking Colbert seriously as a right-wing ‘pundit’, I shake my head). And if there is anything that needs to be gotten across, it is this: Second Life is over-rated

For those that have read my about page, you will know that I was once very intimately acquainted with MMOs and their large virtual worlds. Second Life was then, and still is, cumbersome, confusing, and crap. There, I said it.

Back in 2004 I met the Linden Labs fellows. I was hanging around with the IGE folk, and they were very close to having a deal signed. In fact, they did have a verbal agreement. They would provide the backend/market, and Linden Labs would sanction them as the ‘official’ company to go to. It would be win-win - Linden would get much needed income flow (the ‘world’ was floundering), and IGE would get its first official backing.

I left IGE soon after that (I was always marked as an independent contractor), and the deal never went through. From what my sources told me, Linden Labs had inflated the numbers, and having gotten greedy, had pushed out IGE in favor of setting up their own system.

So there are two things I want to raise issue with:

1. Second Life is over-rated And not over-rated like some sports player. Over-rated like the Origami Project (which I admit may still become useful). The numbers and metrics thrown around make no sense, and I don’t understand why people do not point that out. From BusinessWeek comes the number that a total of 1.5 million people have logged into SL once. Of that, only 17% still logged in after 30 days. But anyone that has worked with MMOs know that 30 days is no big deal. The real staying power is 90+ days. At that point, the player has done a significant investment into the world he/she is playing in. With the way Second Life is setup, how many of the users are actually contributing to Linden Lab’s bottom line?
2. The amount of money made in Second Life is a pittance. There was all this hype and news about how Anshe Chung becomes the first virtual world millionaire. Bullshit. The story (really a press release) made as much sense as Kevin Rose making 60 million dollars. Two things yelled ugh about this press release:
   1. Using some fuzzy math, Anshe claimed to be worth a million dollars. She doesn’t have a million dollars (far from it). But golly gosh darn it, she is worth that much. Nevermind having to find someone that actually pays that amount …
   2. What about Yantis, Brock, et all (of IGE fame). Back when I left them over two years ago, they were pulling $200,000 a day in revenue. Profit margins (never officially confirmed to me) were in the neighbourhood of 25%. That would mean roughly $50,000 a day in profit. That equates to $18.3 million in profit a year! Steve Slayer, the president of IGE, estimated the worldwide secondary market to be worth $800,000,000 over two years ago. So, I’m sorry, but Anshe’s story (already built on fuzzy math) is nothing impressive. IGE and the rest (even smaller companies like Lewt and Mogs) make more than a million dollars a year.

I will end with one final comparison. A 2006 year in review post by Terra Nova stated that Second Life’s peak concurrency was 20,000. I remember EverQuest 1 hit a concurrency of 100,000 when it had 500,000 paying subscribers. Second Life just does not warrant all the attention it gets.

Elena, the super-talented lead-designer at Design Disease (now a part of our BloggyNetwork) is currently updating the site to be a bit more … beautiful. Its like me, webdesignified.

And no, this isn’t my post for the day

If there is any niche that has abused (and raped and pillaged) the definition of a ‘website directory’, the honor definitely belongs to web hosting directories.

I just did a search for web hosting directory on Google. Lets look at the top 10 sites:

1. Shill. Using the guise of ‘award winners’ they list every advertiser they could possibly cram into the site.
2. Shill. From ‘top 10 web hosts’ to ‘hosts they recommend’, just a big big list of advertisers.
3. Shill. ‘Showcase’ - what about an actual directory?
4. Shill. What a surprise - TopHosts.com is the grand-daddy of shill hosting directories. On the frontpage alone I saw 16 image ads and 20 text link ads (both direct and redirects).
5. Mostly Shill. Their search does seem to bring up honest results, but everything else is shill/sponsored.
6. Shill. Their top 10 hosts are really ‘top 10 who will pay me the most’
7. Legitimate. Or sort of. They do push HostGator down your throat without mentioning its an advertisement, but its far better than the rest. The name is also very miss-leading (free?)
8. Semi-legitimate. I actually created this site a long long time ago. It was sold a long time ago (opportunity cost folks), and it looks like it has not been updated in ages. They have splashed AdSense all over the site (which didn’t exist when I made this site), and also list sites with an affiliate program first.
9. Shill. Ads and ads and more ads.
10. Broken. I couldn’t get any search form to work.

There is so many crappy websites out there claiming to be a web hosting directory it makes me gag. My above list only factors in ’sponsors’ - when you start adding the fake ‘reviews’ thrown in there that do nothing more than shill for the top paying hosting companies - gag x 2.

So whats a person like me to do? Write his own web hosting directory. More on that soon

UPDATE January 29: It is now live.

I have a long history with topsites. My first ‘big’ site (over 5,000 uniques a day) was Game Sites 200. It was an absolute juggernaut when it came to top lists - just look at these stats. When I sold it a while ago, it was getting over 100,000 unique visitors a day, and its yearly earnings was almost $200,000. That ain’t chump change. To put that in perspective, that is almost 4x the most popular blog on Blog Top Sites. Game Sites 200 generated over 250,000 clicks for the consistently top-voted sites.

I soon tired of the vote based system. Voting was a flawed mechanism. Because GS200 was such a source of traffic, often times webmasters would take their own websites hostage and demand visitors vote for them or that the site would be shutdown. Its both humbling and annoying - humbling in the sense that your website is so important, and annoying because people are inconveniencing users under your name. Throw in popups, spammers, bots, trick votes, and you have a recipe for a headache.

So when Jacob started to talk to me about working together on something, a topsites for blogs is what came to my mind. We would use Jacob’s network & my programming knowledge in topsites (I was busy with other stuff at that time) to combine our forces. Shades of Captain Planet.

The product, Blog Top Sites, has been a runaway success. Game Sites 200 was tough because we weren’t the first. For blogs, we were. And after Darren Rowse added us to his sidebar, it just took off. According to Technorati, we have over 10,500 links. Just counting our four most popular categories (Entertainment, Personal, Technology, and 1,000,000 for Blog Catalog and (almost) 1,000,000 for Blog Flux Directory puts Blog Top Sites in rare company.

But that isn’t the point. The point is how all I keep getting is copied. Over and over and over.

With Game Sites 200 there are dozens of toplists that copied every single category of Game Sites 200. Everytime we added a new category, it would magically appear on all the others. Ultimate Top 200 went so far as to use the exact same design as us (our old design), the exact same menu structure/style, and everything else in between. To add a bit of irony, they use evoTopsites, a product we created (before we spun off Evo-Dev) but did not actually use for Game Sites 200.

And the same thing exists with Blog Top Sites. Dozens of clones, that have all copied our categories and our appearance and our structure. Even our site details and what not is ripped off. I state this categorically because I modified the Blog Top Sites look from the original evoTopsites look. And yet they all look like Blog Top Sites.

Of course, none of them match the amount of traffic Blog Top Sites tracks. But still - annoying. Do something new!

The amount of information whirring around is manic. Furthermore, information is agnostic in value - it can be useful, not useful, it can be true, it can be false, and it can be a combination of all four.

I try to keep my RSS feed list as small as possible. The total number of feeds I am subscribed to right now is 70. Most of them are work-related, and a few are just plain interesting/thought-provoking (eg indexed and PostSecret).

My rule of being subscribed to a feed is simple. Five (formerly six) possible reasons:

1. You provide useful information. If you post four times in a row and none of the posts interest me - axed. I don’t have time for you.
2. My competition. It is smart business to know what they are upto.
3. My (our) own blogs. It is important to see what your readers are seeing.
4. My employee’s blogs. I encourage my employees to keep personal blogs, and it is good to know what is on their mind.
5. Others. These include the before-mentioned indexed and PostSecret.
6. Comments. Or I did. Not anymore - read on. I am still subscribed to this blog’s comment feed.

Even more important than keeping track of blogs is keeping track of comments. When you post a comment, knowing what follows is very important. Blogs that do not allow comments suck (only one I subscribe to that doesn’t allow comments is Seth’s Blog). Comments are where the real meat of information is, and skipping over that can be foolhardy (and maybe why people have 1000+ feeds subscribed to). To keep track of comments, I use Commentful (top secret notice: we have acquired the site and will be integrated it with Blog Flux soon). Any time I find a blog/forum post I want to track (even if I don’t cinnent), I add it to Commentful. After that it notifies me with a nice little green light in my FF statusbar. No need to visit each page or leave them open in a tab (which is what I used to) or subscribe to the entire comments feed. I instantly know what is going on and when.

The last thing is - email. I actually keep 5 primary emails (through Thunderbird). All the rest of the sites then forward to my one ‘collector’ email or are answered by an employee. Thunderbird Notify keeps my email a click-away in the taskbar, and I have it set to check every 60 minutes. Anything less than 60 minutes becomes distracting. This way I also answer all my emails as I get them.

Any other ways readers here deal with all the information out there?

I had thought that the blog train was starting to slow. The money-men were (are) starting to get in, and (thankfully) the importance of pageviews is waning while the importance of revenue is on the up.

Or so I thought.

Recently we began some house cleaning of Bloggy Network. We have built up a collection of some nice blog resources and it was time to let go. The best one of the bunch was Blog Catalog. A common sight alongside the menu bar of many blogs, it has over 1 million backlinks (as reported by Yahoo). Yet even with all those backlinks, its revenue was still meager - roughly $1700 a month.

So after some discussions between Jacob and I, we set a BIN of $40,000. At almost 24 months revenue, it sounded like a good deal for us. So Jacob went out and posted it on SitePoint. We were going to see how it went, and then start contacting private buyers to get somewhere near the BIN price.

The site sold in under 24 hours.

Within the first five hours we had two offers of ‘if you lower BIN to $30k I will buy it immediately.’ Within 12 hours of the BIN reached, Jacob told me that seven other people had contacted him if the deal fell through, and two even offered us more to break the deal (some people have no ethics).

Our other two sites also flew away. The first one was Eatonweb, which hit the BIN in roughly 72 hours. The sale price was 100x revenue. Eatonweb was the first blog directory, so we were a bit sad to see it go.

The other one was 2RSS. This one went BIN in roughly 3 hours, also at 100x monthly revenue.

So what happened? A few things to learn:

1. Blogs are as hot as ever. The speed at which the BINs were reached speak volumes for that. Incidentally the person who lamented not getting BlogCatalog also lamented not getting BlogRankings when it was for sale.
2. People can see quality. BlogCatalog was a top-notch quality site, and Eatonweb and 2RSS were two well established sites that need a bit of an overhaul. There is a lot of junk, and when you post something of high quality, it will get snapped up. I’ve sold about half a dozen sites, and all of them went for minimum 20 months revenue.
3. Set your BIN high! I do want to say that we have no regrets about the amount we did raise. But going back to my previous point - quality commands a premium. A good solid premium. When will the next PR7 blog directory with 1 million backlinks come again?
4. No place for emotions if you want to succeed. I sort of wanted to keep Eatonweb (after all, it was the first blog directory), but it simply didn’t make sense. When other people’s livelyhood depends on your decisions, getting emotional is not good.

This was a good move for us. Blog Flux is our main focus anyway, and it made sense to give these three sites new owners to take them to new levels.

[UPDATE: Doh! I keep clicking on ‘Save’ instead of ‘Publish’ in WP. Well - it is live now]

After Google’s AdSense had been out for a few months, the complaints started. People were building skeleton sites and throwing on AdSense on the site, trying to milk as much money as possible. These sites were nicknamed ‘Made for Adsense’ (MFA) and were generally frowned on. A Google search for Made for Adsense incidentally has a Wikipedia entry on scraper sites as the #1 result. Definitely not a popular concept.

But MFAs are in the past. The problem is they require too much effort - sure people are still doing it and making money, but there is a better alternative now.

Made for Linkbait (MFL).

I’ve covered shortcomings of user-generated content sites like Digg before. I’ve pointed out how people quickly jump on a bandwagon without checking facts. It seems one of the first things to go with user-generated content is fact-checking.

And so we have sites that spring up overnight with some sensational headline, grab a ton of links, and then a few months later either have ads thrown all over them or are redirected to another site for SEO-benefits (after gaining a few hundred diverse links).

Just today I saw three perfect examples:

http://automen.blogspot.com/index.html
http://iphonesucks.blogspot.com/
http://bestbuyscam.blogspot.com/

This has been happening for a while. But in the last month it has gotten worse, and it is really starting to appear everywhere now. All these sites follow classic linkbaiting hooks. And while the three links I mentioned were all from Digg, Reddit, Delicious, and the rest all suffer from the same problem.

MFA sites were a problem, but they were Google’s (and Yahoo’s and MSN’s and Ask’s) problem. MFL is a problem for all bloggers. And it is only going to get worse.

One of the sites we own is Local Moa. It is a New Zealand local search we did as a bit of a test-bed for some implementation techniques.

I recently got an email from a visitor of that site. To quote:

hi,
I would like to order chicken
thats 1 box of boneless chicken breasts and 1 box of thighs with legs

My address is:
26 xxxxxxxxxx st
xxx xxxxxx
ph xxx 2231
or xxx 7261

THANKS

Another one went like so:

Dear Sir / Madam ,

I hope you can assist.

I need some general information. I lead a very busy lifestyle (work and
look after two children) am overweight , tend to eat quite healthly , have
always exercised , find myself tired quite a lot of the time, concentration
tends to vary , quite affected by PMS.

Can you help ? could this be down to diet or am I taking to much on ?

Please gice me a call xxxxx-xxxxxx .

Kind Regards

xxxxxxx

Go see what the contact page looks like.

This of course is a small sampling - I have resumes, love letters (okay, really just one letter), booking inquiries, and so forth. What is really stunning is the amount of personal data thrown in (including a credit card number once!)

The internet is still very confusing to end users. End users that include small business owners.

Interestingly enough - iBegin, with roughly 10x the traffic, gets 1/10th the amount of such emails. I wonder why?

Recently the three leaders in the online local search field (Yelp, InsiderPages, and Judy’s Book) have gotten a lot of attention. With them (and ultra-niche sites like BackFence) laying off people left and right, the trumpet has started to sound. Local search does not work!

What a load of poppycock.

Local search does work. Hiring an excessive number of people without any clue about revenue does not work. And that applies to any industry.

Lets look at InsiderPages. Techcrunch reported that IP let go of 2/3rds of their staff recently. To pause for a second - what were those 2/3rds doing? Searching for ‘pizza - Pasadena, CA’ (their hometown) yielded 13 CPC links all driven by Google. They had two local sponsors for what is one of the most coveted keywords in their hometown. Clicking on one of those local sponsors was brutal - take a look at this. If I am a local sponsor, why the hell are there six CPC links on my listing? Going back to their search results - at 1600×1200 resolution, the first non-paid link was halfway down. Didn’t the entire Google vs Yahoo battle prove that jamming advertising down our collective throat is not a good idea? Humbug!

At least InsiderPages is going for cost-cutting. Their map results use images directly from the Google server. Impressive!

Judy’s Book decided to go and become a shopping site. Pretty much immediately after the change, two things happened:

1. Andy Sack (their CEO) posted that they just had their highest revenue day.
2. A lot of angry members stated how much they hated the changes. A lot of venom was especially saved for the City Editor program.

While a lot of people are throwing accolades at Judy’s Book for getting out and surviving, I would say the jury is still out there. A lot of people were (are?) coming to Judy’s Book for reviews and other information. Only after 6-12 months will the full impact of their change in direction be noticeable. Personally I find Andy Sack’s blog very interesting - he is very open about his mistakes. It takes guts to do that.

Lastly, and the darling of them all - Yelp. This is a company that has gone through $6 million and needs another $10 million. They are definitely doing something right - a lot of people are registering there and talking. But has anyone actually looked deeply into it? A lot of the chatter there goes on in their ‘Talk’ section, which is just a forum. If there is anything difficult to monetize on the web, it is a forum. And has anyone read the reviews? They are more like popularity-contest stories and less like insightful comments about an establishment. I could be jealous, but that site reminds me of MySpace.

A lot of people will argue that millions of dollars are needed to gain market share and mindshare and so forth. Last I heard, Yelp claimed 1.5 million unique visitors a month (this from the TechCrunch article). InsiderPages was at roughly 1 million. To put that into perspective, iBegin, which covers one major city (Toronto), one capital (Ottawa), and one really teeny-tiny city in Michigan (Kalamazoo) does over 250,000 unique visitors a month. It seems the money being spent on marketing isn’t being spent very well.

What’s my point? There is a lot of waste. Its like evolution - the weak are being eliminated. There are many local-oriented directories that are doing very well for themselves. The problem is that the current crop of local search just doesn’t cut it.

I get confused easily. I think its a personal character trait - I am rather accident prone, and have the oddest bruises at any given moment to prove it.

I also have a bit of a love/hate relationship with Arrington. My initial qualm was the hype train he was on, only talking about this financing or that financing with what seemed highly tainted windows. There seemed to be almost no criticism of these companies. It really peaked when all the evite sites came out with million dollar funding - is inviting people such a huge problem online?

But my love for him has gone up recently, with good topics such as blog linking declining, analyzing deleted blog posts, Apple being bullies and so forth. A lot less hype too - thats good!

Yet he continues to puzzle me about the evil PayPerPost. If the company is so evil, and if he wishes it would die - why such obsession? So he doesn’t like paid-blog posting - that is fine. Mention who evil PayPerPost is the first time, and then move on and talk about the problem (and not the company). Even subsequent posts about companies that pay you to blog (which all have much more clarified disclosure policies) were always compared to PayPerPost. This post about ReviewMe and CreamAid only mentions PayPerPost in the title. This next post about ReviewMe launching again mentions PayPerPost in the title. When the FTC announced it will start regulating word-of-mouth marketing, the title was all about FTC regulating PayPerPost. The latest post, just one day old, was about Another PayPerPost competitor. No need to mention SponsoredReviews.com (the actual site the content was about) - naw, lets just mention PayPerPost again.

Arrington’s Techcrunch is large, making it an easy target. But the point remains - if PayPerPost is so evil, why continually mention them? Sites like ReviewMe are very clear about their disclosure policy. As long as there is disclosure and there is no editorial control - what the hell is the problem? A company gets exposure without having to go through expensive PR machinery. Blogs are a great way of getting honest feedback. From the bloggers perspective - great! You are being paid to review. You are taking the time to analyze something - why shouldn’t you be compensated? Look at Graywolf’s review of TLA. He immediately announces it is a paid review, he does a decent review of the site, and he closes with again reminding the user that the post was paid.

PayPerPost let the advertiser force a positive review. It required no disclosure. ReviewMe (amongst others) did not let the advertiser demand anything. And there had to be disclosure. So why even compare the two?