Consider this: The Republican winner of the Iowa Caucus race won by only eight votes. Mitt Romney received 24.55 percent of the total, while former Senator Rick Santorum took home 24.54 percent — a very narrow victory.

In the New Hampshire primary last week, Mitt Romney also won, this time by a larger margin.

But on Zazzle, where customers get to design customized products and sell them on its marketplace, U.S. voters are voting with their pocketbooks.

For example, interest in Rick Santorum exploded in January. The number of people searching for his apparel and other merchandise is already five times greater than it was during the entire month of December.

Some of his popular apparel includes a “Rick Santorum has a raging clue,” T-shirt, and the more straightforward “Rick Santorum 2012″ coffee mug.

Meanwhile, searches for Mitt Romney’s products are only three times higher over the same time period. A popular button for Romney declares. “Mitt is Legit.”

President Barack Obama has a little more diversity of products on offer, probably because he’s been in the spotlight for longer. There’s the regular assortment of T-shirts and pins, of course, and also mouse pads, iPhone covers, skateboard art and ties.

Not all of the gear is always positive; some items might reflect how much someone dislikes a candidate.

Every year, the Iowa caucus is used to gauge which candidates U.S. voters prefer at the time, even if the outcome does not result in the selection of a national delegate.

Similarly, Redwood City, Calif.-based Zazzle believes it has a big enough forum to conduct a meaningful poll of its own. Tomorrow, the company will kick off a poll that will analyze design and purchasing behavior up until the day before Super Tuesday, which falls on March 6 this election year.

In the past, Zazzle has often been used by Americans to cast their vote. On the site, more than 2.5 million custom political designs, and one million political clothing items have been sold to date.

“Whereas Twitter and Facebook reflect consumer opinions through text, sites like Zazzle are where the physical manifestation of ideas and opinions take place. This has been an accurate form of pre-determining political stories since the 2008 election,” said Josh Neuman, Zazzle’s head of political merchandising and analyses, in a statement.

For instance, the year before Barack Obama took office in 2008, 21,099 items Obama-related items were created on Zazzle, 73 percent percent of which were positive.

The final poll won’t be unveiled until March, but in the meantime, here are some other recent trends Zazzle has witnessed:

• Interest in Santorum has exploded. The number of people searching for Santorum merchandise in January is already five times greater than during the whole month of December.
• Romney is seeing three times as much traffic.
• In January, there’s been a dramatic surge in merchandise sales for Ron Paul, who currently outsells Obama by nearly three times.
• Obama merchandise continues to be a top seller, but 60 percent of the items are anti-Obama themed.
• People are still buying merchandise for dropped-out candidates, including Herman Cain and Michele Bachmann. The sales for either of these candidates are higher than those for Gary Johnson, who is still in the race.

The ever-bickering crop of current Republican Presidential nominees dragging themselves to the first Iowa vote in the coming weeks almost makes you wish for a true political character to liven up the proceedings.

Or some nostalgia for the last go-round, which is definitely present in this trailer for HBO’s upcoming adaptation of “Game Change,” the lively book about the 2008 campaign, featuring the always telegenic Sarah Palin.

The former Alaska governor is played this time around by Julianne Moore, who really looks and sounds like the GOP VP candidate.

You betcha, she does:

Sony says that the credit card data associated with the accounts was encrypted, though there are anecdotal reports of credit card fraud occurring coincidental with the timing of the breach.

On top of that, regulators in places as varied as Connecticut and the U.K. and Ireland are demanding information, often the first step in investigations that lead to lawsuits. The office of Ireland’s data protection commissioner (cool title) says it wants a full report on the incident by the end of the week. The U.K.’s Information Commissioner’s Office is investigating. Perhaps Sony’s one lucky draw in all this, as Parmy Olson of Forbes notes, is that it won’t have to face the full fury of the European Union because authority for data privacy issues are reserved to individual member countries.

Meanwhile, the attorneys general of several U.S. states are starting to rumble, starting with Connecticut’s George Jepson, who said he is launching an investigation, while his counterparts in Missouri and Iowa are making the kind of public statements that are often a precursor to investigations of their own. A few lawmakers in Congress are tsk-ing disapprovingly too, mulling hearings and new legislation. Below is an appearance on CNBC by Sen. Richard Blumenthal, D-Conn., suggesting that the Department of Justice should launch its own investigation.

Thanks, Senator. However, my guess is that if the systems compromised are in the U.S.–and given the number of PlayStation Network customers there are in the U.S., how can they not be?–then one branch of Justice is already likely involved: The FBI. Hasn’t Sony already disclosed that it’s working with law enforcement? This isn’t exactly the sort of thing for which you call a local police agency.

Franken chairs the subcommittee on privacy, and says he wants to explore the situation, which could be the first hint that he wants to hold hearings.

He’s not the only person in Congress making noise about it. Sen. Richard Blumenthal, a Democrat from Connecticut, has asked Attorney General Eric Holder to investigate Epsilon for “possible civil and criminal liability.” There’s also talk of hearings on the matter in the House. On top of that, state attorney generals in Rhode Island, Iowa, Nevada and Oregon have started warning consumers in their state about the dangers of clicking links in suspicious emails that may emerge in the coming days. I’ve pasted Blumenthal’s letter below.

Shares in Epsilon parent Alliance Data Systems rose more than one percent today as concern among investors around the business unit that was responsible for 22 percent of its revenue last year seems to have abated for the moment. The company will report quarterly earnings on April 21, and we’re hoping management takes the opportunity to be forthcoming with more details about how the breach happened.

April 6, 2011

The Honorable Eric H. Holder, Jr.
Attorney General of the United States
United States Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001

Dear Mr. Attorney General:

I am writing to formally request an expedited investigation into possible civil and criminal liability, and to highlight key issues to consider in the course of that investigation, concerning recent reports of a major data security breach involving Epsilon, an internet email marketing firm.

On April 1, 2011, Epsilon reported that it had experienced a security breach of its database of customer names and email addresses which it collects from various companies, including many retail and financial firms. The company has not specified how many consumers have been affected by the security breach. Epsilon has not provided a list of companies affected. While some of Epsilon’s client companies have notified their customers of the breach, other consumers may be unaware that their names, email addresses and other potentially identifying information may be at risk.

I believe that immediate notification to all customers is vital to protect them – and enable them to protect themselves – from identity theft. Despite claims by Epsilon that only the names and email addresses of individuals may have been compromised by this security breach, I ask that your review of this incident determine whether individually identifiable financial information has been compromised. Names and email addresses would allow unscrupulous actors to send emails to consumers – ostensibly from the retailers which whom the consumer does business – seeking private financial information such as credit card numbers or checking or banking accounts.

I believe that affected individuals should be notified and provided with financial data security services, including free access to credit reporting services, for two years, the costs of which should be borne by Epsilon or its affected clients. I believe it is also necessary to provide every affected individual with sufficient insurance to protect them against possible financial consequences of identity theft.

Consumers deserve more complete information on the data breach, as well as the assurance that their personal financial information will be securely maintained. If personal financial information has been compromised as a result of this incident, Epsilon should be required to provide written notification of the breach, specific information about the data that may have been improperly accessed by third parties, and personal information security protection, including free access to credit reporting services, and insurance for two years.

Thank you for your attention to this important issue and for your continued work on behalf of the American public.

Sincerely,

Richard Blumenthal
United States Senate

The first real test of the state efforts comes this week in New Jersey, where Gov. Chris Christie is expected to decide the fate of a bill that would let Atlantic City casino companies run gambling websites for state residents.

The bill would make New Jersey the first state to sanction online gambling. The Republican governor, who has until Thursday to veto or sign the bill, hasn’t publicly stated his stance.

Regardless of Mr. Christie’s decision, gambling experts say momentum is growing behind states’ efforts to legalize online gambling for their own residents, known as intrastate gambling. Last week, Iowa lawmakers introduced a bill to legalize online poker, and California and Florida are among other states considering similar bills.

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Who: Kent Lindstrom

What: CEO

Why: Kent held various roles at Friendster, including president, after moving to the tech sector from a management position at Deloitte & Touche.

Where: placepop.com (Web site); @kentlind (Twitter); San Francisco (analog place)

Who Else: Foursquare and Gowalla are the big location fish right now, but a move from Facebook or Twitter could change the game at any moment.

Five Stats You Won’t Find in His Facebook Profile:

Worst Job: I was a busboy for one day, at this French place in La Jolla, California. I just couldn’t do it and my employer agreed.

Beach Bum: I ended up lifeguarding in La Jolla during high school. It’s not a bad job, but it’s a lot more boring than people think.

Geek Crush: Jeff Bezos of Amazon (AMZN). I really try to live by his regret avoidance principle. Basically, try to look forward and see what you would regret not doing, then just do that now.

Family Affair: I take after my mother’s father. He was an entrepreneur. He ran a cigar store in Muscatine, Iowa. And he just had it going on. Much more than my other grandfather, who worked at the phone company and was miserable.

Moment of Geek Spark: In the late 1990s, this guy who was PhD student at Stanford University showed me the really early Web. It wasn’t the Web yet. You could log into the computer at the University of Michigan from here in San Francisco. At that time, you had a very physical sense of, “Holy crap, I’m inside the library in Michigan, but I’m here in San Francisco. Now, you are jacked into Facebook and have no idea where that thing is.

Bio in 140 Characters

Kent lounged on the beaches of La Jolla before a BA and MBA at Northwestern. Then to Deloitte, Friendster and finally to PlacePop today.

The Five Questions

So, PlacePop is a location-based check-in app, but no game? Are you the Grinch?

You’ve got it. We are a location-based check-in app that enables sharing. You can share your location via Twitter or Facebook, as well as sharing photos and earning points.

Wait, so there are points, but no game?

Yeah, so, think of it like a frequent-flier program. You accumulate points, or, in our case, bronze, silver, gold or platinum status at a given location. We’ve only just released the app, but we’ve been in talks with various national brands, say, Tully’s Coffee, to start offering incentives for achieving specific status at a location.

The idea is that once we reach scale, we’ll be able to go to a business and say, “Hey, we have 2,500 people who are gold members that want a $3 off on their coffee.” We’ve got a Web site that allows a user who has gone to a place, say, 10 times and has silver status to say that they want a free drink. If you then get 250 people who have the same status to click that they like that specific idea, then one of our business development people can go to the restaurant and cut a deal.

We want to build this affinity program for every place in the world.

There is a sense around location-based services that they have huge potential, if only it could be realized. What is it? What are we waiting for?

Ever since I was at Friendster, I felt that associating people with a place was powerful. I think what we are seeing is a convergence of the location-based services and recommendations. I sort of see Yelp right now as sort of like Yahoo (YHOO) in Web 1.0–very good curation of recommendations.

At some point there will be this critical mass of location data, right? And then someone will come along and be a Google (GOOG). Instead of asking people what they think, and doing this very hard process of curation, we will be able to analyze the data about behaviors and do something altogether more powerful with it.

When you make the shift from reviewing and writing about things to observing what people actually do, you have the most substantial recommendation database of places that has ever existed. That transition hasn’t happened, but is about to.

What learnings from your Friendster experience should be shared with the Foursquare of the world?

I’d say first, don’t declare the game over. When Friendster came out, people were saying that this was it, and there was no more. It was over when MySpace came out. It was over when Tribe was gonna nail the local thing. You just have to stay at it.

The other thing is, be careful about being too much of a gimmick, rather than just a value proposition. You had the whole tagged thing with MySpace, where they were trying to use game dynamics to motivate behavior. Then you had Facebook come along and took all that out. There was no thing like, “Hey, get 50 friends and get the super-friendly Zuckerbadge.” Nothing like that. They just stuck to the value proposition.

Everyone was watching Facebook this week for a big location announcement. How are you guys planning to adjust?

We’ve had a Facebook app in development for a while. I think we’ll probably be releasing it this week. I think the lack of announcement from Facebook is an indication that they are going to do something, but that they are having an internal debate on exactly how.

It probably centers around the following: They are trying to figure out whether to do latitude and longitude, or whether they want to put in the places themselves. Once they’ve figured out that they want to do places, they need to decide if they want to do curated places–do they want to do, “Cornell: or just leave it to fan pages. Once they do that, they need to decide how much of their mobile app to devote to it. They are probably trying to figure out what that looks like.

Once that’s all figured out, they have to decide if they want to put it all in the API and let us use it to make a killer recommendation engine, or a dating engine to figure out who you are most compatible with.

The In Living Color Interview

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What prompted Time Inc. to drop six percent of its staff?

Time Warner (TWX) won’t release its most recent quarterly results until next week. But you can get a pretty good sense of how its publishing unit has been doing by looking at the numbers that Iowa-based magazine giant Meredith Corp. (MDP) just released.

And it’s grim.

Revenues at Meredith’s publishing unit, which puts out titles like Better Homes and Gardens and Ladies’ Home Journal (that ad above is from a 1972 issue) dropped nine percent in the last year, to $300 million. But ad revenues fell much more steeply, dropping 18 percent to $148 million. And operating profit plummeted 40 percent, to $33 million.

The good news in the earnings release is that there are still operating profits. But these are worrisome results.

So far this year, most of the ad-based businesses that have complained about declining revenues have pointed to weakness in the financial and auto industries. But Meredith’s publications don’t rely on those sectors for their ads.

From the release:

Companies that operate in Meredith’s endemic advertising categories–including food and beverages, prescription and non-prescription drugs, and home–have been impacted greatly by the current economic downturn. Combined, Meredith magazine advertising revenues in these categories declined over 25 percent in the first quarter, according to Publishers Information Bureau (PIB).”

Not surprisingly, Meredith says that the current quarter looks depressing too. Publishing ad revenues are “down in the high teens” it says.

So, don’t be shocked to see equally lousy news from Time Inc. next week.

[Image Credit: jbcurio]

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