I had the opportunity to appear as a guest on Robert Scoble’s show when I was up in Half Moon Bay last month. He just posted the interview this evening (~20min). In it we talk about virtual appliances, open source server applications and how our technology is eliminating days/hours of setup time and bringing an entire class of server software within reach of the average, non-technical user. Big thanks to Robert for having me on his show and to Francine Hardaway for the introduction!

Leave comments here if you have any.

is still a smart friend who reads a bunch of feeds and has coffee with you once in awhile.

It’s not Bloglines (though, Mark Fletcher, you are my hero). It’s not Google Reader with it’s dominant market share. Newsvine, Thunderbird and Newsgator… negative ghostrider.

We were talking about this on a walk yesterday- if you’re like me you’ll go through cycles where you purge every feed you’re tracking. Over time you slowly accumulate new ones feeling like you might be missing out on important developments until you realize you’re under water again in a noisy sea of posts ignoring 90% of them anyways. So you prune everything back- the veritable “binge & purge of RSS consumption.”

The happy medium I’ve ultimately settled upon is to follow a small subset of blogs and a few news sites and look to a handful of respected individuals and groups for awareness on important industry developments. RSS was a great invention to amplify one’s ability to track stuff of interest from a bunch of disparate sources- the first layer of amplification was centralizing all these sites into one reader. But the next layer of amplification is learning to rely upon trusted experts in the various fields of importance to filter the noise, synthesize the relevant info with their own expertise and share the important insights in person (and ideally, in a group of experts). Like roots of a tree that continuously branch for maximum surface area and absorption, this is why groups like Refresh are hugely valuable and why hubs of face-to-face casual interaction like Google campus and the coffee shops in San Francisco are such hotbeds of innovation.

What is PPA?

Pay-per-action advertising is a model where the advertiser gets paid only when the visitor completes a specified action on the advertised site. This model has incredible potential for both parties because it circumvents the problem of click fraud (it can be setup so advertisers are paid only when sales are made). From the advertiser’s perspective, you’ll happily pay commission on sales that are made and it’s like having an outsourced affiliate program that you don’t have to manage yourself. From the publisher’s perspective, you can “rep” products that are relevant to your site’s content and (in theory) earn more than you could via adsense because the payouts are much higher. Google’s move into this space disrupts incumbents Commission Junction and ShareASale which currently charge significant setup fees to get involved as an advertiser (Google charges no setup fees).

Our experience with the Google beta

The unfortunate reality of the current state of the PPA beta on Google is that it appears to be riddled with fraud. “But I thought you said you couldn’t get burned?” - let me explain. We signed up a few months ago and posted a handful of JumpBoxes in their directory offering a generous commission (over 30% for sales generated) to attract affiliates. We saw downloads skyrocket immediately but zero new conversions came from those new downloads. This probably should have been a red flag that the downloads were bogus, but we were still hopeful that it was just a matter of us adapting a landing page for better conversion and continued to run the PPA ads.

About two weeks into it we had seen not one sale originate from the PPA ads- we weren’t losing money on them since the payout was still tied to a sale, but the spurious downloads were throwing off our conversion numbers and tainting our stats. The participants in the Adsense Referrals network (which is this program from the publisher’s side) have a rating system for advertisers and we were concerned that we’d be blacklisted because we hadn’t yet done any payouts so we changed the rewarded action from a sale to the completion of a lead form upon successful download. We dropped the commission significantly to $.50 and treated it as a pure lead generation program. Fortunately we had set the daily cap in adspend because immediately people took advantage of this change and filled out junk emails repeatedly to earn the $.50 payout. I was surprised with how quickly this abuse came. We promptly shut off the PPA ads and discontinued participation in the program - we only lost something like $30 altogether.

Advice for Google

This has got to be a tough problem to combat from Google’s perspective. Juggling both sides of the equation, they have to attract enough quality advertisers with desirable and discreet products that work in the affiliate scenario while at the same time keeping a high quality of publisher in the referral network so as not to alienate the advertisers. Opportunity for fraud abounds - from the advertiser side, there’s no surefire way to enforce that the payout actions are accurately tracked (ie. i could start with the tracking script on our checkout thank you page and then remove it or selectively serve it every fifth purchase to dilute the commissions we pay and nobody would be the wiser). On the side of publisher fraud, it’s easy to participate only in the referral programs where payout doesn’t require a sale and then surf through an anonymizer to emulate people completing those actions via your ads. Google’s system of ratings from publishers is clearly how they are screening advertisers but they don’t seem to have a good way to eliminate the shady publishers. I didn’t see the equivalent ratings system for advertisers to use for this purpose.

Presumably the advice for now is to simply never pay commission on anything other than a sale- unfortunately that reduces the reach of this program to ecommerce sites only. My advice to Google though would be to disallow payment on actions other than sales to “cleanup the streets” in the near term and make it impossible for scammers to game the system. Once it’s economically unviable for them to make money there, they’ll leave and find another shady neighborhood to haunt. This whole thing oddly makes me wish there was an “Internet-wide Boys and Girls Club” to give fraudsters something positive to do- all that clicking just to earn $.50… you’d think there would be a HIT on the Amazon Mechanical Turk where they could legitimately earn more than that will less work…

I hope they figure something out because I love the approach in general of yoking reward as directly as possible to performance. Having studied the negative extremes of this principle with the Learned Helplessness paradigm in school, the idea of tethering reward to successful efforts has appealed to me on a very fundamental level and beyond business. I don’t have a silver-bullet suggestion for Google on how to stamp out fraudulent activity. It’s a very knotted messy problem that could easily spiral out of control scaring away advertisers and creating negative press. Fortunately they have some of the brightest minds on it - having just had lunch on their campus earlier this week, I can attest that it felt like there were definitely more brain cells per capita at Google than any place I’ve been on Earth.

If you’re like us you have a slew of different ad campaigns running at any given time- newsletters, pay-per-click, stumbleupon, download directories, sponsored banner ads, auto-responders, etc. Tracking conversions means being able to identify the visitors to your site who ultimately complete the desired action and know which avenue brought them to you (and it’s useless to experiment across ad channels if you don’t track which ones are working). You can roll your own home-grown mechanism to track conversions but if you have a Google Adwords account, you already have access to their cross-channel conversion tracking system which will do this for you. Here’s how you can take advantage of it:

1. Signup for an adwords account if you don’t have one already.
2. You’ll need to add the conversion tracking code snippet to the thank you page on your site that the visitor sees when he/she completes the intended action on your site. Follow the instructions here to set it up.
3. Next you’ll create a new cross channel tracking campaign for one of your ad channels- let’s do it for your newsletter first. What may be confusing is that even though we’re in your adwords account, adwords could be one channel you can use this to track all your ad initiatives). Follow their 3-step wizard for specifying the details of this newsletter-specific campaign and get the landing page code and the tracking URL.
4. Put the landing page code snippet in your header or footer so it’s on every page of your site (you only need to do this once and it works across all channels that you track).
5. Lastly, look at the newsletter-specific tracking URL and grab just the part that says:
   “?gad=xxxxxxxxxxxx” and append that to any links coming from your newsletter. Rinse and repeat for each ad campaign you have running so that they all get a unique tracking URL.

You’re now collecting data on how each campaign is doing and you’ll know exactly which ones are performing well and which ones suck. You can see from our data below that we have a spread of 0% - 38% effectiveness depending on the particular channel - that’s critical info to know if you’re spending thousands on ads! Minor improvements in conversion can translate to huge savings in adspend as I explained here. Happy conversion tracking!

We just launched what we call the “Proving Grounds” for JumpBox. It’s a private invite-only community that gets access to use unlocked, pre-release JumpBoxes. We added the following eight new open source server applications and have a bunch more on the way:

There’s already a decent velocity of member signups - we’ll probably throttle back membership at some point so grab an invite code while we’re handing them out freely.

Wow, the volume of commentary around the OpenSocial announcement last week is enormous. Let me explain why all the doomsday predictions for Facebook are off the mark. Here is an analogy:

Saying OpenSocial will kill Facebook is like predicting that Orbitz will kill SouthWest Airlines.

SWA still has superior value and user experience to any airline in the Orbitz consortium when it comes to reliable, affordable travel. And at the end of the day as a consumer of air travel you’re just buying a ticket and getting on a plane. Twenty-two competitors that have second-rate products don’t unite to form Voltron and having a bargain shopping aggregator doesn’t kill off the vendor who refuses to participate if he still has the best bargain for the customer. Likewise, having “one API to rule them all” is nice for developers writing applications for social networks but it takes more than that to make users of the abstaining network flee the place where all their friends are.

Josh Catone of ReadWriteWeb wrote an excellent analysis. Opening the platform and appealing to the developers to build applications is a tactic Facebook used to amplify their power and deliver the ultimate user experience while offloading the burden of developing compelling apps to external developers. Think of it as the development equivalent to a company’s reseller program only instead of leveraging external sales forces, they’re leveraging external development forces.

I share the same concern that Marshall Kirkpatrick expressed - for all the hype of OpenSocial, it doesn’t sound like it will truly be a 2-way street of open-ness as the name implies. It will be interesting to see how FB rolls with the punches but they shouldn’t have any more fear of OpenSocial than SWA has of Orbitz. They’ll participate when it makes sense. Maybe someone will write an abstraction layer that sits above FBML and OpenSocial XML? Maybe not and instead developers will have to write to both systems (like software vendors that write native Mac and PC installers)… Ultimately users go to the “clean well-lit place” that provides the best experience. As the industry moves inexorably towards open the underlying social network fabric becomes irrelevant (think IM channels - Gtalk, Yahoo, MSN, AIM, ICQ- irrelevant since Adium or Gaim is the interface that masks the underlying complexity). That Adium-equivalent for social networks will be the interesting piece at that point; a single dashboard that gives me one place to manage my digital identity easily in the way that Adium lets me forget what IM services I’m using and talk transparently to my friends regardless of the service they’re on.