Recently in Industry News Category

A Dream House After All

| No Comments | No TrackBacks

Karl Case:

This financial crisis has made us all too aware that we live in a Catch-22 world: the performance of the housing market drives the economy, and the performance of the economy drives the housing market. But housing has perhaps never been a better bargain, and sooner or later buyers will regain faith, inventories will shrink to reasonable levels, prices will rise and we'll even start building again. The American dream is not dead -- it's just taking a well-deserved rest.
Karl E. Case is a professor emeritus of economics at Wellesley and co-creator of Standard & Poor's Case-Shiller housing index.

A Visit to the US Treasury on Fannie & Freddie

| No Comments | No TrackBacks

Bill Gross 185K PDF:

Ninety-five percent of existing mortgage creation over the past 12 months were government guaranteed. The private market was nowhere to be found because they charged too much. It was the cost of private origination and securitization, perhaps more than any other factor, that justified government involvement. Prime, but non-conforming, mortgages (jumbos, insufficient down payments) were being purchased by PIMCO in the hundreds of millions of dollars every week, but at yields of 6, 7, and 8%. If that was the risk/ reward tradeoff, compared to FNMA and FHLMC yields at 3.5-4%, how could policymakers pretend that the housing baton could be quickly and cost-effectively passed back to the private market? Few, if any, could afford a new home at those interest rates. If you were a believer in the dominance and superiority of private markets, how could you deny the signal that markets were sending - that the risk was too high given the substantial losses of recent years?

My argument for the necessity of government backing was substantially based on this commonsensical, psychological, indeed sociological observation that the great housing debacle of 2007-2010+ would have a profound influence on homebuyers and mortgage lenders for decades to come. What did we learn from the Great Depression, for instance: Americans, for at least a generation or more, became savers - dominated by the insecurity of 20%+ unemployment rates and importance of a return of their money as opposed to a return on their money. It should be no different this time, even though the Great R. is a tempered version of the Great D. Americans now know that housing prices don't always go up, and that they can in fact go down by 30-50% in a few short years. Because of this experience, private mortgage lenders will demand extraordinary down payments, impeccable credit histories, and significantly higher yields than what markets grew used to over the past several decades.

Clusty search: Bill Gross, Pimco.

Interfluidity's notes after a recent Treasury meeting.

Ryan Singel:

The lawsuit (.pdf), filed in US District court in San Francisco, asks the court to find that the practice violated eavesdropping and hacking laws, and that the practice of secretly tracking users also violated state and federal fair trade laws. The lawsuit alleges a "pattern of covert online surveillance" and seeks status as a class action lawsuit. The lawsuit was filed by Joseph Malley, a privacy activist lawyer who also played key roles in other high profile privacy lawsuits, including a $9.5 million settlement earlier this year from Facebook over its ill-fated Beacon program and a settlement with Netflix after the company gave imperfectly anonymized data to contestants in a movie recommendation contest.

"The objective of this scheme was the online harvesting of consumers' personal information for Defendants' use in online marketing activities," wrote Malley, who called the technique "as simple as it was deceptive and devious."

Unlike traditional browser cookies, Flash cookies are relatively unknown to Web users, and they are not controlled through the cookie privacy controls in a browser. That means that even if a user thinks they have cleared their computer of tracking objects, they most likely have not.

Adobe's Flash software is installed on an estimated 98 percent of personal computers, and has been a key component in the explosion of online video, powering video players for sites such as YouTube and Hulu.

Websites can store up to 100KB of information in the plug-in, 25 times what a browser cookie can hold. Sites like Pandora.com also use Flash's storage capability to pre-load portions of songs or videos to ensure smooth playback.

Do We Still Need Websites?

| No Comments | No TrackBacks

So with all this relentless talk about Twitter accounts, Facebook fan pages and cool new apps, I have a serious and timely question. Do brand websites still matter?

Yes, I know -- even asking this question is a bit digitally sacrilegious. Websites are to digital strategy as models are to fashion, but do we really need them?


I mean, didn't things seem a tad curious during the World Cup when brands like Adidas and Nike actively promoted their Facebook page -- not their primary website -- at the end of their TV spots? Just this weekend, I saw a similar cross-feed to Facebook for Kohls. Talk about kicking the ball into a different goal.

Think about all the hoops we've jumped through to register proprietary domain names, in every country and business type -- this perpetually rationalized by an almost unstoppable parade of GoDaddy ads (titillation and all). As a domain-name collector myself, it's hard not to feel a twinge of asset deterioration.

But before you start penning the "ditch the brand website" memo, hold your tweets for a moment. Websites are not going away -- they might be more important than ever -- but they serve a different and evolved purpose today, especially in this new "social" context.

Think wholesale, less retail. Think distribution, less destination. Think serving, less selling.

Zachary Goldfarb:

For several decades, whenever a question of housing policy came up in Washington, two companies dominated. Fannie Mae and Freddie Mac marshaled armies of lobbyists, deep political connections and millions of dollars in contributions to get their way.

But now Fannie Mae and Freddie Mac, titans of the mortgage finance industry, are wards of the state, bailed out by Washington to the tune of $160 billion and banned from political activity. As the Obama administration and Congress prepare to take up overhauling the $12 trillion U.S. mortgage market, new interests are shaping the debate like never before.

Among those influencing many Democrats are affordable housing advocates and liberal think tanks that want the government to do less to foster homeownership and more to support rental housing for low-income people. Those influencing Republicans favor sharply reducing all federal support for housing.

Lunch with Alan Greenspan

| No Comments | No TrackBacks

Allen Beattie:

Escaping the latest of a string of steaming hot summer days, I duck gratefully into the cool interior of Tosca, an Italian restaurant in the lobbyist quarter of Washington DC. From the pavement it is not prepossessing, curtains entirely screening off the interior and presenting a blank face to the world. But the busy, clubby interior hums with power. Situated conveniently between Capitol Hill and the White House, and in the neighbourhood of some of Washington's most powerful political consultancies, it has a reputation as a location for political deals and power-broking at the highest levels. It was here, legend has it, that Tom Daschle spent a five-hour dinner persuading Barack Obama to run for the US presidency. It is very DC.



The Financial Times posted several articles on "Google's Black Box" this week:

Richard Waters:

In an office in Santa Monica, wedged between downtown Los Angeles and the Pacific Ocean, the future of the media industry is being drawn up.

Demand Media is a company created specifically for the Google Age. It tracks the queries entered into search engines to find out what users are interested in, then hires freelance writers at rock-bottom rates to rush out articles to meet the need.

To make sure these articles appear high up in the results when similar searches are done in future, it uses the techniques of search engine optimisation - the term given to the art of designing a web page so that it is accorded a higher ranking by Google's algorithm. It also makes money by displaying adverts alongside its articles from Google's advertising system.

The fact that content factories are being created to ride on the back of search engines highlights an uncomfortable paradox.

Google's search engine formula marks an ambitious attempt to model the real world in mathematics, identifying its users' needs and desires and delivering the best information from the web in milliseconds. But as its influence across the web grows, Google's algorithm is starting to shape the world it describes.

Tom Foremski:
Groups magnify chances of Google hits:
Companies with a high page rank are in a strong position to move into new markets. By "pointing" to this new information from their existing sites they can pass on some of their existing search engine aura, guaranteeing them more prominence.

This helps companies such as AOL and Yahoo as they move into the low-cost content business, says Mr Bonnie. "They can use their Google page rank to make sure their content floats to the top," he says.

Google's Mr Singhal calls this the problem of "brand recognition": where companies whose standing is based on their success in one area use this to "venture out into another class of information which they may not be as rich at". Google uses human raters to assess the quality of individual sites in order to counter this effect, he adds.

I've known about this for several years but wasn't able to get anyone from Google on the record. These Google employees have the power to promote or even completely erase a site from the Google index.
Scott Cleland:
Wow. After a decade of passionate public representations that Google's vaunted search algorithm is "neutral' and unbiased, we now learn it has substantial regular human intervention to discriminate what site gets what ranking, who gets found and who does not, and who wins and who loses in the business of online content.
The explosion in mobile apps, including our broker iPhone/iPad/iPod app, is changing everything online.

Internet Trends

| No Comments | No TrackBacks



Mary Meeker, Scott Devitt, Liang Wu: 1.2MB PDF.

Henry Blodget comments:

Some key points:

The iPad is one of the fastest-selling gadgets of all time (1mm in 28 days)

Android smartphone shipments almost now equal iPhone shipments (Apple's app leverage may disappear fast)

Global 3G wireless penetration just hit 20%, which is usually the inflection point to very rapid growth

Mobile app and search usage is up 2X year over year

iPad Internet usage is more similar to desktop usage than smartphone usage (more pageviews)

Japan shows the potential for mobile advertising: Japan mobile ad spending now $11/user, up from $1 per user six years ago.

Japan shows potential for mobile commerce: 19% of Rakutan's sales now from mobile.

Learn more about Main Street and our iPhone app. Cloud & mobile computing from leads to closings, and everything in between!

Erick Schonfeld:

The Huffington Post is taking on more of the trappings of a social network. Borrowing from Foursquare, today it will start giving out badges to loyal readers who share a lot of HuffPost stories via Facebook and Twitter (the Networker), comment like crazy (the Superuser), or flag inappropriate comments (the Moderator). The site also redesigned its user profile page to better highlight each user's comment stream, and her friends, fans, or followers.

Last summer, the site launched its HuffPost Social News network, allowing readers to log in with their Facebook IDs, and friend, fan, and follow each other on the site. It later added Twitter, Google, and Yahoo as login options. "We want to incorporate the best of social media," Arianna Huffington tells me. "It is important for the growth of the site so far, and even more important for the future growth."

The Huffington Post is already fairly huge. Five years after she launched it as a politics blog, it now attracts 23 million readers a month in the U.S. (comScore, March, 2010), which is more than the NYTimes.com (13.3 million). And the site now covers 20 different news categories, including media, entertainment, sports, business, and local city sections for New York, L.A., Chicago, and Denver. An art section is launching next month, and after that a travel section. Politics now represents less than a quarter of the HuffPosts's traffic.

Mike Arrington:

I sat down with Redfin CEO Glenn Kelman and investor/board member James Slavet to talk about the continued success of the Seattle-based company. Warning in advance - the interview was done at the end of the day and we were drinking beer from our new kegerator, and we rambled at times. Perfect for a Sunday afternoon viewing, in my opinion.

Kelman announced in the video that Redfin is now on a $30 million revenue run rate, up from $15 million last summer (and at that point they were profitable.

About this Archive

This page is an archive of recent entries in the Industry News category.

HomeFinder is the previous category.

International is the next category.

Find recent content on the main index or look in the archives to find all content.