Here’s USV principal’s Fred Wilson’s comment, via email: “Union Square Ventures is very fortunate to be able to add Andy Weissman to our partnership and we think he is a perfect fit for the entrepreneurs we want to work with and the sectors we want to participate in.” (More below.)

That will cause a small ripple in startupland, because Weissman was the one steering Betaworks’ investment portfolio. His partner John Borthwick handled the operational parts of the business, which has founded and/or nurtured startups like Summize, TweetDeck, Chartbeat and Bitly.

With Weissman’s departure, Betaworks’s focus will change. “Though we will continue to do seed stage investments, our primary focus will be on building the core capabilities of the companies that we acquire and grow in-house,” Borthwick said told his employees via email today. Betabeat first reported the news.

What Borthwick didn’t explain in his email is that he and Weissman had previously planned on raising a “sidecar fund” that would essentially split Betaworks into two businesses: An operating company run by Borthwick and an early-stage VC shop run by Weissman.

But that plan was discarded this summer, at least in part because of opposition from Betaworks’ investors, who include RRE Ventures, Intel, AOL and the New York Times. Investors argued that they had put money into a company where investing was only a component of the plan, not a full-time occupation; by raising a new investment fund, they argued, Betaworks would essentially be competing against some of its backers.

People familiar with the company say that the plan’s collapse didn’t lead directly to Weissman’s departure. But the backstory does provide context to his move to become a full-time venture capitalist.

When Weissman lands at Union Square, he’ll have plenty of money to work with. The firm, which has made a series of lucrative bets in high-profile Web 2.0 start-ups including Twitter, Zynga, Foursquare and Tumblr, is in the midst of raising a new $150-$200 million fund.

Four-year-old Betaworks, which now has more than 80 employees, ought to have plenty of money to work with, too. In addition to the $28 million it has raised to date, the company has also been able to turn some of its investments into cash via secondary market sales.

Most notably, it has recently sold Twitter shares it acquired in 2008, when the company bought search engine Summize. That alone should provide a nice cushion for Betaworks if it needs it: Twitter’s value has shot up from $100 million to $8.4 billion over the last three years.

And speaking of ripples, here’s one I’m guessing Weissman may enjoy:

Until now. Technology vet Peter Stern, whose last start-up ended up being acquired by Facebook, is bitly’s first official CEO.

He’s taking the reins from Betaworks CEO John Borthwick, who helped hatch bitly as one of his incubator’s projects and has overseen it since, while juggling lots of other balls at the same time.

Stern founded Zenbe, an email start-up that Facebook “acqhired” last fall, but most of his résumé predates the Web 2.0 era: He was co-founder of online brokerage Datek Online, and prior to that he helped build “cool electro-optic sensors and devices, most of which are classified.”

Bitly doesn’t make a whole lot of money helping publishers shorten their Web addresses, but it does get its hands on lots of data about stuff people share with each other on the Web. Just how valuable all that data can be is an open question, and in the past the company’s name has been floated as an acquisition target for Yahoo et al.

The fact that the Betaworks guys have hired a full-time manager for the company suggests that they’re not selling anytime soon. It’s a good bet that they’ll work to use that data in interesting ways. The first example we’ve seen has been in the News.me iPad reading/aggregation app, which bitly owns and powers.

Good news for people like me, by the way, who like the News.me concept but don’t read that much on their iPad: Stern says a version for Apple’s iPhone is in the works.

With All Things Digital Global HQ located in the heart of the Castro in San Francisco, BoomTown tries hard not to judge–even that dude who likes to come into the Starbucks (SBUX) naked.

But I made an exception to be a judge for an innovative civic geek contest that New York City is doing for the second year called BigApps 2.0.

Get it? Big Apple…BigApps!

In any case, Mayor Michael Bloomberg is opening up a whole mess of government information–350 data sets from more than 40 agencies–and letting software developers have at it.

According to NYC:

“The City continues to open more data on the www.NYC.gov Data Mine as part of transparency initiative. The Data Mine was established for last year’s competition and, as part of the City’s efforts to promote transparency across agencies, all data will remain available for public use after the conclusion of the competition. Additional datasets will be made available throughout the year.”

Some of the new juicy data includes: CompStat data, buildings complaints and real-time traffic numbers.

The winners for the best apps created to help New York City citizens will get cash prizes totaling $20,000.

Last year, there were 84 apps, including a winner from Big Apple Ed, a guide to schools there.

The new winners will be announced in March of 2011, after fellow judges of mine–including Union Square Ventures’ Fred Wilson, Hunch CEO Chris Dixon and Betaworks CEO John Borthwick–decide who is the best.

And how much do you want to bet there will be a bed-bug app submitted this year?

Here’s the official press release from NYC:

MAYOR BLOOMBERG Launches NYC BIGAPPS 2.0 COMPETITION

More than 350 Datasets Provided by More than 40 City Agencies and Commissions, Doubling Last Year’s Availability

Competition Builds on Citywide Efforts to Increase Government Transparency and Provide Greater Public Access to City Data

Mayor Michael R. Bloomberg, Deputy Mayor for Economic Development Robert K. Steel and Deputy Mayor for Operations Stephen Goldsmith today launched NYC BigApps 2.0, the second annual contest for software developers and members of the public to create web or mobile applications using City data. Building upon the success of the inaugural NYC BigApps Competition launched in October 2009, the City has roughly doubled the number of datasets available, bringing the total to more than 350. These datasets provide developers and programmers with additional material, including public safety data, buildings complaints, and real-time traffic numbers from which to create new digital applications. Last year’s winning applications are today helping New Yorkers find mass transit routes, review public school information and gather an array of information based on their current location. This year’s winning applications will receive cash prizes totaling $20,000. Deputy Mayor Steel will detail the program this evening at NY Tech Meetup, a monthly meeting of tech entrepreneurs where companies and developers demonstrate new technologies. Deputy Mayor Steel will be joined at the announcement by New York City Economic Development Corporation President Seth W. Pinsky, Department of Information Technology and Telecommunications Commissioner Carole Post and Mayor’s Office of Media and Entertainment Commissioner Katherine Oliver.

“NYC BigApps combines two of our Administration’s important priorities: making civic information more readily available to New Yorkers and promoting innovation and entrepreneurship in New York City,” said Mayor Bloomberg. “The inaugural NYC BigApps competition yielded an array of creative uses for City data, and–with nearly twice as much data formatted for application use this year–there are even more possibilities with version 2.0.”

“The most important thing that the public sector can do to help create jobs through technology innovation is to provide our talented entrepreneurs with the tools to create new products,” said Deputy Mayor Steel. “The BigApps competition does this by providing open access to City Data. Through the competition, we encourage the development of applications that can then be commercialized, spurring job growth and economic development in New York City.”

“NYC BigApps is redefining the relationship between City agencies and enterprising citizens, all while delivering value to the public,” said Deputy Mayor Goldsmith. “Last year, NYC BigApps contestants came up with innovative applications that would have never been created in the normal course of business. There is more data available for use in this year’s competition, so the potential for new and innovative tools that can benefit New Yorkers is even greater.”

“Last year’s Big Apps competition was an enormously successful way to achieve multiple goals: supporting the City’s important technology sector, giving entrepreneurs opportunities to create new products, and increasing the accessibility and transparency of City government,” said New York City Economic Development Corporation President Pinsky. “This year’s expanded contest promises to promote even more innovation and creative thinking among the vibrant and growing tech community in New York. We look forward to seeing the results of their efforts.”

“NYC BigApps, and the DataMine site that supports it, sits at the heart of the City’s open data efforts,” said Department of Information Technology and Telecommunications Commissioner Post. “This effort complements the many other ways we’ve worked to bring technology to life for New Yorkers, including 311 Online and the 311 iPhone app. Beyond today’s competition, we’ll continue enhancing the functionality of DataMine and expanding the amount of data available there for use across the City and around the globe.”

“At the Mayor’s Office of Media and Entertainment, we’re exploring new ways to share information about City resources and services across multiple platforms,” said Commissioner Oliver. “Already we’ve reached new audiences through QR codes on the Staten Island Ferry and on the sides of sanitation trucks, and we’re making the content of our online Video On Demand player available on various mobile devices. The NYC BigApps Competition is the perfect opportunity to further communication between the government and the public.”

The NYC BigApps Competition is open to individuals, and companies and non-profit organizations with fewer than 50 employees. More than 160 datasets have been added to the 190 compiled for the inaugural competition. New York City Economic Development Corporation and the Department of Information Technology and Telecommunications coordinated with over 40 City agencies and commissions to provide the datasets, with 15 new City agencies, including the Department of Environmental Protection, the School Construction Authority and the Campaign Finance Board, participating in Data Mine for the first time. New data on public safety, the City budget, complaints to the Department of Buildings, and real-time traffic information will all be available for download today at www.nyc.gov/data .

The Data Mine was established for last year’s competition and, as part of the City’s efforts to promote transparency across agencies, all data will remain available for public use after the conclusion of the competition. Additional datasets will be made available throughout the year. Information and updates on the NYC BigApps competition, as well as official rules, can be accessed at the competition website: www.NYCBigApps.com .

Fourteen winners will be chosen in total, including two new prizes–best application created by a high school, college or full-time graduate school student; and a Large Organization Recognition Award for organizations with 50 or more employees, which will not eligible for a cash prize. A panel of judges from the technology and venture capital community will select winners for Best Overall Application (Grand Prize, Second Prize, Third Prize and five honorable mentions), Investor’s Choice Application, City Talent Award, Student Award, and the Large Organization Recognition Award. Two Popular Choice Application awards will be determined by public voting. Judging criteria will include the benefit to residents, visitors and City government; the quality and implementation of the idea; and potential commercial value.

All submissions are due on January 12, 2011. The Popular Choice Application winners will be selected by public vote through www.NYCBigApps.com between January 26 and February 26. Winners will be selected and announced at an awards ceremony to be held in March.

Last year’s winners included: WayFinder NYC–an application that allows users to find the nearest and best directions to New York City subway and New Jersey PATH stations; Taxihack–an application that allows users to post live comments on New York City taxis and their drivers via email (alert@taxihack.com) or Twitter (@taxihack); Big Apple Ed–an education application that provide residents with an easy-to-use guide to schools in the City, including school searches, top ten lists , analyses , comparison charts , and detailed school profiles ; and NYC Way–an iPhone application that bundles more than 30 New York City resources and provides information sorted by the user’s current location. The developer of NYC Way, MyCityWay, received the first investment by the NYC Entrepreneurial Fund, a $22 million seed and early-stage investment fund established by the City and managed by FirstMark Capital.

The judging panel is comprised of: Dawn Barber, Founder, Tech Meetup; John Borthwick, CEO, Betaworks; Chris Dixon, CEO & Co-founder, Hunch; Esther Dyson, Chairman, Edventure; Stuart Ellman, Co-Founder & General Partner, RRE Ventures; Lawrence Lenihan, Founder, CEO and Managing Director, FirstMark Capital; Danny Schultz, Co-founder & Managing Director, Draper Fisher Jurvetson Gotham Ventures; Naveen Selvadurai, Co-founder, Foursquare; Kara Swisher, Co-Executive Editor, AllThingsD.com; and Union Square Ventures Partner Fred Wilson.

“We are thrilled to be powering the second NYC BigApps competition, with significantly more data made available for software developers and the general public,” said ChallengePost Founder and CEO Brandon Kessler. “We were wowed by the creativity of the apps in the first competition, and we look forward to giving new entrants the great exposure they deserve.”

“New York is home to some of the world’s best developers,” said Foursquare Co-founder Naveen Selvadurai. “It is great to see the City rewarding this talent and taking advantage of it to increase transparency and make the wealth of information on NYC.gov more easily accessible.”

Bit.ly has now raised about $14 million in a couple of years, but so far has only a nascent revenue stream: About 4,000 different companies have white label versions of Bit.ly’s URL shortener (the New York Times, for instance, uses Bit.ly to create addresses like this: http://nyti.ms/bm8lk2). But only some of them pay for that service, at a rate of $1,000 a month.

The real business, which Betaworks CEO John Borthwick says the company will begin to build out with its new money, is turning Bit.ly’s data set into money.

People clicked on six billion Bit.ly links last month, Borthwick says. And he imagines that all sorts of folks, from Google (GOOG) on down, would be willing to pay to license the data.

It’s worth noting that Yahoo (YHOO), among others, has been doing some tire-kicking around the service–maybe more, depending on whose story you’d like to listen to.

Other investors in this round include OATV, Mitch Kapor, Founders Fund, SV Angel, Joshua Stylman, Peter Hershberg and David Shen. The New York Times (NYT), as I have previously written, picked up a piece of Bit.ly this summer as partial payment for its work in in News.me, a yet-to-be-launched social news service for Apple’s (AAPL) iPad.

That’s the second time the paper has picked up a piece of Betaworks in the last year. In March, the Times invested in the the New York-based holding company/incubator/investor itself, as part of a $20 million funding round alongside investors like AOL (AOL) and Intel (INTC).

Betaworks CEO John Borthwick wouldn’t disclose the value of the Times’ stake in bit.ly, which has raised about $4 million so far. But the equity represents payment for the initial work the Times R&D group has put into the project, which they handed over to Betaworks this summer. Betaworks also paid out some cash as part of the transaction. No comment from the Times on the deal.

So what is News.Me, anyway? Borthwick won’t elaborate beyond what he told the, um, Times yesterday: It will be social and newsy and cool and it will start out as an app for Apple’s (AAPL) iPad when it debuts later this year.

But the bit.ly connection is an important and obvious clue here: Since Web surfers use bit.ly to shorten a gazillion links a year in order to pass them on–technically, it’s some 30 billion so far in 2010–the bit.ly guys can mine all sorts of data about which Web surfers are interested in a certain story, and which stories a Web surfer’s friends may be paying attention to. You can connect the dots from there.

And assuming bit.ly is a core part of News.Me, it makes it a little less likely that Betaworks will sell off bit.ly anytime soon. But plenty of people think Betaworks has entertained thoughts of selling, though Borthwick insists that the company is not for sale. At one point Google was said to have kicked the tires on the service, and executives at Yahoo have thought hard about the service as well, sources say.

Try Betaworks instead. That’s my translation of the holding company’s pitch, which seems to be effective. Yesterday, it announced that it had raised another $20 million in funding led by RRE Ventures and Intel (INTC); other new investors include AOL (AOL) and the New York Times (NYT).

Betaworks previously raised about $8 million from the likes of the Pilot Group, Ron Conway, Huffington Post co-founder Ken Lerer and AOL CEO Tim Armstrong, who bought in when he was still selling ads for Google (GOOG).

Betaworks is essentially a bet on “real time” companies in general and Twitter specifically. The New York-based outfit has invested in or built a couple dozen companies, almost all of which have something to do with social media. And many of them have direct links to Twitter.

The biggest Betaworks hit to date is an investment in Twitter itself: The company helped fund Summize, a real-time search engine Twitter bought in July 2008, back when the microblogging service was valued at a mere $100 million. Betaworks took its payment in Twitter equity, and that decision has worked out very nicely so far.

Other prominent Betaworks projects are Twitter plays as well. Twitter uses Bit.ly, the URL shortener Betaworks built and then spun off. And Betaworks funded TweetDeck, the most popular Twitter client, which also uses Bit.ly as its default URL shortener.

The risk, of course, is that there isn’t enough there there to support all these companies, which are very much in the Web 2.0 “users first, revenue later” model. As CEO John Borthwick puts it: “We’re either building a mountain or digging a hole.”

But Borthwick has an excellent pitch–the accent helps–which I got to hear when I dropped by his office yesterday. Co-founder Andy Weissman, alas, was AWOL. But if you want to hear his take, he maintains an excellent Tumblr (another Betaworks investment).

]]> http://allthingsd.com/20100312/is-betaworks-building-a-mountain-or-digging-a-hole/feed/ 0 http://allthingsd.com/20090810/an-oversized-ruckus-about-tiny-web-addresses-bitlys-bigfoot-offer-to-the-rest-of-the-business/ http://allthingsd.com/20090810/an-oversized-ruckus-about-tiny-web-addresses-bitlys-bigfoot-offer-to-the-rest-of-the-business/#comments Mon, 10 Aug 2009 17:31:41 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=9746 Are you up in arms about the impending demise of tr.im, one of the many services that shorten long Web addresses? Here’s a possible solution, offered by bit.ly, the industry’s bigfoot: A nonprofit archive/graveyard for tr.im’s tiny addresses, along with anyone else who wants to participate.

John Borthwick, who funded bit.ly via his Betaworks investment group, explains the details of his offer here, along with a bit of pro forma condolence for the demise of his competitor: “Sad day yesterday to see tr.im announce that they are shutting their doors, after failing to make a business of a nice service with a great URL.”

To me, that sounds a bit like a mafia don shaking his head a tad wistfully after hearing that one his old rivals got bumped off, then sending a big bouquet to the funeral. And I think that the tr.im team, as well as some of bit.ly’s other competitors, may take it in the same vein.

UPDATE: I spoke to Eric Woodward, CEO of Tr.im’s parent company Nambu Networks. As I thought, he’s uninterested in working with Bit.ly, either directly or via 301works, the third party archive Borthwick has proposed. His response: “Why would I want to upload all my of data to Bit.ly?” When I suggested that this might be a good move for his users, he allowed that it still might happen — if he can’t find a buyer for Tr.im. And that’s a distinct possiblity: Woodward said he has been looking for a buyer for the past few months, without success.

But Borthwick’s proposal also sounds like a good one to me. I’ll let the wiser Webheads explain whether it’s a real solution for the problem that tr.im’s failure will create for the Web, namely, the notion that lots of Web addresses, shortened for use in social Web services like Facebook and Twitter, will stop working one day.

And if you do think it’s a real problem and not just an annoyance for the service’s users, as well as for Web sites that got referral traffic from the service, then someone’s going to need to think of something. We’re going to see more of this.

That’s because if there is any business at all in URL-shortening, it’s going to be a scale business that ends up in the hands of a couple competitors, max. Just like search. And that means that dozens of mom-and-pop competitors (here’s a visual snapshot, taken last fall, of 117 URL-shorteners) are going to fall by the wayside.

Right now Bit.ly looks to be the Google (GOOG) of URL-shortening, and there is some griping that it got that status unfairly, via a deal with Twitter that made it the service’s default shortener last May (type a long Web address into the message box on Twitter’s Web page, and the service will automatically convert it into a bit.ly link–like this). Not true, says Borthwick–the Twitter deal helped, but it’s not responsible for the majority of Bit.ly’s traffic.

But there’s no reason for Borthwick, Bit.ly or Twitter to be defensive about the deal. If Twitter wants to pick a preferred vendor/partner/developer for any or all of its services, it should do so. It’s not going to do that very often; one of the main reasons that Twitter has taken off is the ecosystem of developers who have built innovative stuff using the service’s open architecture, and it won’t want to discourage that.

And if Twitter wants to work with someone it’s already doing business with–prior to Twitter’s most recent funding round, Betaworks owned a sizable slug of Twitter’s stock, via Twitter’s acquisition of Betaworks portfolio company Summize a year ago–there’s no problem with that, either.

In any case, the Bit.ly/Betaworks guys have other things to worry about. They still need to figure out how to take the data stream they’re mining from all those tiny Web addresses they’re making and do something useful/valuable with it.

Then again, so does Twitter.

]]> http://allthingsd.com/20090810/an-oversized-ruckus-about-tiny-web-addresses-bitlys-bigfoot-offer-to-the-rest-of-the-business/feed/ 0 http://allthingsd.com/20090618/just-how-much-search-share-does-twitter-really-have/ http://allthingsd.com/20090618/just-how-much-search-share-does-twitter-really-have/#comments Thu, 18 Jun 2009 19:04:16 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=8344 Twitter notched yet another milestone yesterday when it finally showed up on comScore’s index of Web search milestones. The catch: It barely registered, pulling down a search share of just 0.001 percent.

ComScore says Twitter logged 30.1 million search queries in May, more than Time Warner Cable (TWC), but not even on the same playing field as search also-rans like Ask.com.

But what if comScore is dramatically undercounting Twitter’s search–not just the standard undercounting that Web publishers always complain about, but something more significant?

It’s a given that comScore is undercounting. I know this because the research outfit told me so: The company confirmed today that it only measures searches executed at Twitter.com. But at least half of Twitter’s users are accessing the service without visiting the site, via third-party clients like Tweetdeck. And within that group of users is the power-user set, which is far more likely to be executing searches, many times a day in some cases, than Oprah fans who just joined the service last month.

So it’s easy enough to conclude that the majority of Twitter’s searches are going uncounted by comScore (SCOR). But how big is the gap? I’ve asked Twitter to share its search numbers, but I’m not holding my breath on that one. (UPDATE: See bottom of post)

In the meantime, let’s do some guesstimating.

Start with this year-old post by John Borthwick of Betaworks, who at the time was an investor in Summize, a Twitter search engine at the time (Twitter later bought Summize outright).

Borthwick reports seeing a huge number of search queries on Twitter on the opening day of Apple’s (AAPL) 2008 developer conference, topping out at an average of 190 queries per second. Tease that out over a full day, and you get 16.4 million searches in 24 hours.

For argument’s sake, let’s say that most of those searches occurred in an eight-hour stretch before, during and after Steve Jobs’s pronouncements that day, and knock that total down by two-thirds, to something like 5.5 million queries.

Steve Jobs pronouncements are rare things so it would be wrong to assume that Twitter sees similar usage patterns every day. But then again, Twitter has had an insane growth spurt in the last year: The most recent comScore traffic numbers peg monthly visitors at 32 million world-wide, up from a couple million a year ago.

See where this is going? Again, for argument’s sake, let’s say that Twitter’s peak traffic a year ago is now close to daily traffic today, and extrapolate that 5.5 million query guesstimate out for a month: You get something closer to 165 million queries.

Want to tweak any of my assumptions above? Be my guest. But no matter how you cut it, I’m sure that Twitter’s real search numbers are going to be several times higher than comScore’s number, at the very least.

Again, this matters in the end because Twitter’s most compelling investment thesis is that it can provide real-time search. And for that to mean something, the company is going to have to start registering as an actual search competitor at some point, not just to Time Warner Cable but to Yahoo (YHOO), Microsoft (MSFT) or even Google (GOOG). So how close, or far away, is that from happening?

UPDATE: Twitter cofounder Biz Stone responds, but declines to hand out any numbers. No surprise. I am a bit surprised to see him play down the importance of search at Twitter. I wonder if his investors are also surprised.

We don’t share absolute data such as total requests or queries per day but we do look at the whole ecosystem when we measure these things (not just Twitter.com).

Also, we are focused on the sharing and discovery of tweets so comparing Twitter to web search is interesting but not necessarily how we would measure success.

]]> http://allthingsd.com/20090618/just-how-much-search-share-does-twitter-really-have/feed/ 0 http://allthingsd.com/20090330/is-a-shorter-web-address-worth-big-money-bitly-raises-2m/ http://allthingsd.com/20090330/is-a-shorter-web-address-worth-big-money-bitly-raises-2m/#comments Mon, 30 Mar 2009 18:30:36 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=5772 Here’s another Web 2.0 riddle that seems particularly hard to solve post-Lehman: What’s the value of a service that takes a long Web address and makes it shorter?

One answer: Several million dollars.

Oh, and did I mention there’s no business model attached to said Web service?

Still with me?

OK. Here are the details: Betaworks, the incubator/start-up platform best known for selling Twitter a search engine for $15 million last year, is taking in-house project bit.ly and spinning it out as a separate company. A group of new investors, led by O’Reilly AlphaTech Ventures, has poured about $2 million into the company, which implies a valuation in the midseven figure range.

Other investors include Howard Lindzon’s Social Leverage group, Jeff Clavier’s SoftTech VC, and uber-angel Ron Conway. O’Reilly’s Bryce Roberts will join the board of the four-man company.

bit.ly is one of roughly a gazillion url-shorteners, all of which do the same thing. They take an unwieldy Web address like, say, this one: “http://mediamemo.allthingsd.com/20090330/huffington-post-pays-for-content-after-all-via-175-million-investigative-fund/” and turn it into something concise like this: “http://bit.ly/14WdlB.”

If you spend much time on Facebook, Twitter or any other Web service where brevity is useful, you’ve encountered a shortened URL, and you’re likely seeing more and more of them all the time. The bit.ly guys say people clicked on 20 million of their shortened Web addresses last week, and that the number is increasing by about 10 percent a week.

Great. So where’s the money? Many of bit.ly’s competitors, like the aptly named tinyurl.com, generate modest revenue by running Google (GOOG) ads against the many eyeballs that come to the site to use the service. But bit.ly won’t sell ads, and it plans on distinguishing itself by tracking all the clicks and streams that come through the service and using the data to provide interesting analytics and insights into who’s looking at what on the Web, in real time.

The logic: If you’re impressed with the possibilities of Twitter’s real-time search capabilities (see above), you’ll love bit.ly.

Great. So where’s the money? bit.ly is free to users, and the company says it doesn’t plan on selling its analytics or other tools to publishers. Team bit.ly says revenue will come sometime down the road, from something else–when they figure out what that is.

That kind of shrugging was par for the course during Boom 2.0 days. But in the dark days of last fall, even the sunniest Web optimists, including Betaworks founder John Borthwick himself, were telling start-ups that they had to face reality and start making money.

So either things have gotten much better than we realized or the bit.ly investors think it’s still worth betting on fast-growing, revenue-free start-ups. It’d be nice if both things are true.

]]> http://allthingsd.com/20090330/is-a-shorter-web-address-worth-big-money-bitly-raises-2m/feed/ 0 http://allthingsd.com/20090209/does-real-time-search-make-twitter-a-google-killer-its-fanbots-think-so-boomtown-not-quite-yet/ http://allthingsd.com/20090209/does-real-time-search-make-twitter-a-google-killer-its-fanbots-think-so-boomtown-not-quite-yet/#comments Mon, 09 Feb 2009 14:38:00 +0000 Kara Swisher http://kara.allthingsd.com/?p=9490

According the latest meme to sweep the digerati over the last several days, here are the words that should make the brainiac satraps over at Google very, very nervous: “See what’s happening–right now.”

That’s the motto right below the box on Twitter’s search engine–a page that looks awfully familiar to anyone who uses the Internet, since it is essentially a light-blue-colored rip-off of Google’s “I’m Feeling Lucky” mantra.

But, posits the new theory, it’s Google (GOOG) that should perhaps not be feeling so lucky when it comes to Twitter search because it is becoming the place for what is now being called “real-time” search.

Yesterday there was a Silicon Alley Insider piece alarmingly titled “Google Next Victim Of Creative Destruction?” by former AOLer John Borthwick–who should know a thing or two about the topic, given that he was a top exec at the once-vaunted online service as it imploded.

In it, relating a presentation to AOL execs in their heyday by the well-known management author, Clay Christensen, here’s Borthwick’s money quote:

[Christensen] said time and time again disruptive business confuse adjacent innovation for disruptive innovation. They think they are still disrupting when they are just innovating on the same theme that they began with. As a consequence they miss the grass roots challenger–the real disruptor to their business. The company who is disrupting their business doesn’t look relevant to the billion dollar franchise, it’s often scrappy and unpolished, it looks like a sideline business, and often its business model is TBD. With the AOL story now unraveled–I now see search as fragmenting and Twitter search doing to Google what broadband did to AOL.”

Having written an entire book about the disaster that became AOL, I would have to disagree a lot with Borthwick that the innovation of broadband killed the company.

For example, I would have started with AOL’s ponzi-scheme of an advertising business model, gross mismanagement, greed, backstabbing between Time Warner (TWX) and AOL after the merger and a complete noninterest in innovation in AOL’s later years as the key reasons for its demise, before I even got to broadband.

That aside, Borthwick does go on to make an interesting argument I have been hearing a lot of late among the digerati: that Twitter’s search results–and not its often-inane tweets–are its real treasure.

An investor in a start-up called Summize that was acquired by Twitter and is now its search engine, Borthwick correctly focuses on some interesting splintering off of two key search areas, video and real-time search.

Google already owns plain-vanilla search in a game-over way, with a disturbing share that just keeps getting bigger and bigger.

And, given Google’s ownership of YouTube and the fact that the online video service massively dominates the online video market, the search giant effectively owns video search. (One might note that it has been, heretofore ineffectively, hard at work trying to monetize it.)

But it is Twitter, as it quickly increases its user base from one million to three million to six million–and, doubtlessly, millions more now–that is the king of real-time search, which is to say, search that is done as news events unfold (the plane in the Hudson River, an earthquake, the Super Bowl, whatever) or other ongoing topics of the day.

Thus, while Google essentially controls the pages of about everything on the Internet, Twitter owns the social conversation online.

Writes Borthwick:

Imagine you are in line waiting for coffee and you hear people chattering about a plane landing on the Hudson. You go back to your desk and search Google for plane on the Hudson–today–weeks after the event, Google is replete with results–but the DAY of the incident there was nothing on the topic to be found on Google. Yet at http://search.twitter.com the conversations are right there in front of you. The same holds for any topical issues–lipstick on pig?–for real time questions, real time branding analysis, tracking a new product launch–on pretty much any subject if you want to know whats happening now, search.twitter.com will come up with a superior result set.”

Unfortunately, after that, except just stating that Google will inevitably fall over and die, because of the Twitter effect, Borthwick provides absolutely no explanation of what possible business model could make real-time search that kind of killer.

Will it be a text-based online advertising model like Google’s AdSense? Or are people who Twitter and search Twitter not as open to such ads when they are conversing?

Or could Twitter sell the analytics from these social searches to big brands, so they can do a deep dive into consumer behavior? Or is the bulk of that chatter–like, say, “Cheetos are yummy, but messy”–completely useless to them?

Does Twitter winning in real-time search mean no one wants regular Web search anymore? Or can both co-exist and be lucrative?

“Who knows?” is probably a better answer to all of this at this point, given how nascent and small the Twitter audience–save for in the noisy echo chamber of Silicon Valley and the media, where it looms large–still is.

That’s not to say I don’t use Twitter search more and more or that it’s probably a whole lot easier to monetize the start-up’s search than the content of its 140 characters.

Said a Twitter insider who is watching its search business grow a lot and notes that it is much bigger than people realize: “The search results are distinct to anything out there.”

That is true, and I would also say it is extremely useful too (even though bigger will inevitably make it less so, as there will be more dreck to slog through).

That’s why Facebook, as first reported here, made that $500 million run at Twitter and also why it opened its APIs on status this week to slow Twitter’s growth and cut its momentum a bit.

But Facebook also made the move to help itself. After all, many more young people–for all Twitter’s buzz–use its status update (ask some–I did), so it is in Facebook’s interest to keep it that way.

Of course, Google could also try to kill Twitter, by starting its own real-time search service, although that is the kind of innovative and viral thing that big companies usually cannot pull off as easily or deftly.

And it would come as no surprise if Google made an even larger bid for Twitter, given its interest in owning all search.

Or not, if Twitter can’t find a way to make real and sustained money from any of its many interesting parts, like search.

I, for one, hope it does, since it’d be nice to see someone tweet, um, tweak, the mighty Google for once, even if it does not have murder in mind.

Please see this disclosure related to me and Google.

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