My Internet Notebook

An informative interview of SocialText CEO Ross Mayfield by SandHill.com. SandHill.com | Management | The Next Wave of Enterprise 2.0. Some interesting tidbits of information:

HBS professor Andrew McAfee defines Enterprise 2.0 like this: “The use of emergent social software platforms within companies, or between companies and their partners or customers.”

In classic enterprise 1.0, 75% of enterprise knowledge are communicated thru and buried in email messages.

Intel-backed integrated Enterprise 2.0 solution, called SuiteTwo combines “best-of-breed” offerings in wikis, blogs and RSS from Socialtext, SixApart and Newsgator, bundled them on an Intel-based appliance and offers service and maintenance through SpikeSource. The market reception has been phenomenal.

My thinking on this is that Suite Two is missing an important web 2.0 aspect, which is social networking / community building. Teams, groups , divisions within a large corporation are just natural elements of a ‘social network’. I can imagine more communication and active knowledge sharing will happen with this model.

Cisco’s recent acquisition of tribe.net makes me think that Cisco may be onto something that’s going to be big in the next few years. Adding Cisco’s communication solutions (VoIP etc) on top of all the communities you can build with tribe.net, this starts to make more sense to me.

Xinhua-PRNewsWire reported that China’s largest out-of-home multi-platform life-style media company Focus Media (Nasdag: FMCN), has announced that it has entered into a definitive agreement to acquire Allyes Information Technology Company Limited, the largest internet advertising service company in China. This acquisition will enable Focus Media to enter China’s growing Internet advertising market.

According to a new report released by China Internet Association, the online advertising market in China reached RMB $4.98 billion in 2006, and is projected to grow at 50% annual rate to reach $11 billion in 2008. No surprise that FMCN wants a piece of the action as well.

Venture lenders are playing a growing role in bankrolling Silicon Valley’s latest boom.

As opposed to venture capitalists, who pay cash for equity, these venture lenders generally charge double-digit interest rates on par with the interest payments on high-risk corporate bonds, known as junk bonds. Lenders typically also get potential future stakes in the companies, via warrants that can be converted into equity. The warrants convert to equity if the start-up eventually gets bought or goes public.

They include SVB Financial Group, Lighthouse Capital Partners, Hercules Technology Growth Capital Inc. and Pinnacle Ventures. Such firms typically provide loans of $500,000 to $10 million and sometimes more to fund start-up operations or equipment purchases.

For startups with stable and/or growing revenue, venture lending may be a viable option without diluting the founders’ equity too much.

Chinese wireless communications company KongZhong (Nasdaq: KONG) won the title of the Best Small Cap for 2007 in a Motley Fool contest.

The reason cited for picking KONG was not entirely convincing though. Okay, it is an emerging market and it is a pure play in wireless communication. The competition in China’s WVAS 9wireless value add service) market is just too fierce. It would be a hard press to believe that KongZhong has the winning formula against Sohu, Sina or Tom Online in the wireless market.

The other four are Atheros (Nasdaq: ATHR), Walter Industries (NYSE: WLT), Portfolio Recovery Associates (Nasdaq: PRAA), Syneron (Nasdaq: ELOS).

Full stories, see: And the Best Small Cap for 2007 Is … [Fool.com: Commentary] December 11, 2006

The Wall Stree Journal reports that the leading Chinese language search engine Baidu.com is entering the Japanese market.

This looks to be a high risk bet on Baidu’s part. While the Japanese search market is large and tempting (10 times bigger than that of Chinese search market), the risk associated with such as a big undertaking can never be underestimated. For one, Yahoo (with local partners) and Google already owns the majority of the internet search market there. Secondly, Google is breathing down at Baidu’s neck in Beijing to try to steal market share away from Baidu. This is like, for Baidu, openning up two big battle fronts at the same time, while the resource at Baidu’s disposal is substantially smaller than either Yahoo Japan or Google. Maybe Baidu should be contemplating a secondary public offering of shares pretty soon.