For the past year I’ve been telling folks we’re in for a nasty correction–or even a recession–in 2006 and 2007. Why?

1. Housing bubble
2. Consumer debt at all time high
3. Consumer savings at an all time low
4. Much of consumer spending is based on paper wealth from their homes (sound familiar?)
5. The technology industry is based largely on consumers (think: iPod, Google, etc), or companies which enable companies that service consumers (i.e. Microsoft, Oracle, SAP, etc. selling into companies like McDonalds).
6. Cost of the war
7. Global terrorism
8. China’s never-ending need for oil will keep oil prices high–don’t think $100 a barrel won’t happen, it will.

Today I think we had one of those days when things start to come apart. Reminds me of the day right before the bubble burst, that my friend Jeff Dachis of Razorfish was edited down by 60 Minutes to look like a complete fool who couldn’t explain what his company did. The dotcom bubble bursted shortly after that.

Now, this isn’t as bad as back then (I mean, we don’t have accounting scandles going on right now–right?!).

Why do I think today was the day? The day that things could start coming apart?

First, I read Om’s insane $38 for a pair of eyeballs article, but more importantly some folks actually defended those numbers!

Second, there were not one, not two, but THREE, three articles in the WSJ today about the housing market slowing down. They all danced around the crash issue, but clearly that’s what’s on people’s minds.

Third, I looked up at the TV while having a diet Coke at LAX to see Bush defending the war in Iraq and how we couldn’t leave without winning. The look on his face was very disturbing, clearly the guy is torn and he’s feeling the heat. Someone like that might not make the best decisions. Sometimes he looks like he’s ready to say “we’re outta here!” other times it looks like we might stay there for five more years. I get the sense he’s not going to leave, which means a lot more national debt and a lot more terrorism in the short term.

Fourth, I’m on a layover right now and the top news story is Goog is down ~$20/5%. When investors–perhaps even insiders–start selling Google you know the parties over.

What do you guys think?
2006: banner year, bust, or average?

Going to be offline for most of the rest of the day traveling. I’m in meetings all day tomorrow… so, if you’re looking for me or Brian we’re out of pocket so ping Jade, Judith, or Shawn at weblogsinc.com.

Om… you know I love you, but this is absurd. Like really, really crazy. Weblogs, Inc. was bought by AOL because of revenue and revenue growth. Eyeballs and pageviews had nothing to do with it–zero. No one in the marketplace is buying things based on eyeballs–no one. It’s all based on revenue. Well… we also had an amazing management team and systems in place–those are very important too.

However, no one–NO ONE–is paying $38 per web user because no one–NO ONE–has any hope of ever making that kind of money back! I can’t comment on specifics of our deal, but let me just say this is really, really flawed.

How much money does Boingboing, Gawker or Weblogs, Inc. make off of a user? Well, if they were to read a blog every other day and read two pages each time that would be a total of 350 pages a year.

1,000 pages = 1 CPM (cost per thousand). Blogs prob. monitzie on avererage at $2 to $5 per 1,000 pages. So, what you would make off an a really loyal who came back all the time is around $1-3 per year or 1/10th of the $38 a user number.

Boingboing, like any other web property, is worth 1-10x revenue and 5-30x earnings. So, if BB does 30-50k a month/360-600k a year (which seems possible to me based on the ~5m page views a month) it would be worth between 500k and $3M (based on revenue since with five mouths and server hosting to pay for it doesn’t really have earnings–yet!). Those numbers fall into line with my calculation of a really loyal user being worth $1-3.

Paying much more than that amount wouldn’t make much sense unless you were an affinity buyer or buying the talent (which is all part time and spoken for on other projects anyway). You would be much better off putting the $3M to work on hiring a staff of 10 writers @ $100k, putting 1M towards a management team, and $1M towards marketing. That’s how these deals tend to go down.. people look at the cost of buying vs. building, and the numbers you’re putting out Om puts out are so absurd it’s laughable.

I used to say I was going to retire by the time I was 35.

Well, I turned 35 today and I wouldn’t even consider it–not for a second.

In fact, I consider everything I’ve done up to now the warmup for what’s to come. I’ve got more motivation, energy, and fire in my belly now than I ever have. Life surprises you that way I guess.

The Joystiq march continues…. PSPFanboy is online!

A journalist just asked me that question… here is my response:

Clearly blogs are a great way for folks to share previously unstructured, but potentially highly relevant, data. There is no real way to just put the random thoughts of thousands of agents into a database, but you can easily do that with a blog, and people can navigate those blogs really easily thanks to the links and tags put in place by humans (as opposed to search, which is so limited when compared to human intelligence).

The problem in most organizations today is that the folks in the trenches–the ones with the best information–don’t have a voice. When a company gives everyone the ability to speak on a level playing field you’re going to increase the noise level, sure, but that’s a small price to pay for the benefit of getting an honest look at what’s going on.

In fact, I think it would be great for some agents to be blogging publicly about what they are doing, without of course giving away important information. If agents exposed their issues and concerns to the blogosphere they would be very surprise at home much good data would come back to them.

18 months ago I ordered an amazing rocketship of a computer. A small form factor Shuttle put together by a really great company called ABS.

I like to replace my desktop every 12-18 months, and I’m long over due, so I’m again looking for advice from y’all. What computer should I get next? I know I want to gt a bigger computer because I want a) two video cards, b) a RAID setup, and c) massive storage (like a terabyte). I don’t think I can do that kind of a thing in a Shuttle, so I’m going back to the tower.

I’m going to use my old Shuttle as a media server (or maybe put Windows Media Center on it… however, I got to get an HD turner card for it which is a pain in the next).

So, what do you guys think?
Should I get a tower from ABS? Should I get a gaming rig from Voodoo, Alienware, or Falcon (I hear those are $1k extra just for the name!)?

Oh yeah, I want to be able to run three–yes three–24inch monitors off of it. Right now I’m kicking two Dell 2405’s and loving life. I want to move to three so I can be surrounded by them and have IM windows on the left, email in the middle, and side projects on the right.

Another day, another mini-brouhaha around an AOL service. As some of you might have been reading AOL’s blog platform, AOL Journals, has been dealing with a mini-brouhaha around the service.

Huge disclaimer: I’ve just met the folks running AOL Journals, and I’m not in charge of the group (some folks seem to think I am). At this point I don’t have any inside information on what is going on with AOL Journals. What follows are my observations and thoughts on the subject. If you’re with the press understand that I don’t speak for the company on this issue. Weblogs, Inc. is an operating company within AOL, and I’m the CEO of Weblogs, Inc. So, if you quote me in a story please make sure you put my comments in that context.

What happened: AOL added a big-old advertisement to the top of everyone’s blog on AOL Journals–without warning them in advance. These leaderboards (an IAB standard size) are fairly large, but not uncommon on the Internets (we have them at the top of all our blogs). Some bloggers were shocked when they had these advertisement sprung on them a week ago, and a small group of folks (< 100) defected from the service in protest.

From what I’ve read the service has 600,000 users so losing 100 isn’t a big deal on a pure numbers basis, however it’s bad from a PR standpoint and I would suspect these are some of the best users of the product. A similar protest happend over at Flickr when they started integrating the photosharing service with Yahoo’s other services. Now, we all know you shouldn’t run your business based on the vocal minority–but you certainly shouldn’t ignore them either. Your biggest critics are often your best source of advice. In fact, I always tell folks that your critics are basically giving you high-priced consulting for free. You should be thankful for their effort in helping make you a better person/company/service/etc.

Background: Many blog services are offered with two options: a) free with advertisements and b) paid without ads. The problem we have is that we’ve offered the service for free to everyone for a while and now we’ve changed that deal. Adding to the problem, from what I understand, is that right now we are not tracking who’s a paid AOL member and who’s a web-based user. Clearly the folks paying for AOL service should not have to have ads on their blogs. The folks who are getting free blogs *could* have advertisements on them, however they should at least have been given notice that this was going to happen. My homepage at MySpace has the same exact advertisement on it. However, it’s always been there so I don’t feel like someone has taken advantage of me when I look at it. My blog at Blogger.com is free and doesn’t have advertisements, but it does have the blogger promo bar up top, which I’m guess helps Google build a deeper relationship with users (i.e. it makes folks spend more time on Google services, which in turn makes Google money).

Update: We always had ads on free accounts as someone at AOL just told me. “Just as a clarification, we’ve had ads on blogs for non-paying-members since we opened up the product to allow non-paying-members to use it. So this change was for paying AOL members only. The overall point isn’t affected by this.”

What we did wrong: The main issues: a) the advertisements were added without user permission (just like the AIM buddies last week!) b) the adverisements were added without warning, and c) when the issue boiled up we had the PR department give the following canned statement:

“The decision to implement banner advertising on AOL Journals is consistent with our business and advertising practices.”

Now that was bad–really bad. We sound like we’re freakin’ robots, and bloggers do not want to talk to robots. They want to speak with a human being, preferably one who is also a blogger!

Look at how great a job Mena Trott at Six Apart has been doing with all the service problems over at Typepad and MoveableType. Their service has been sucking wind for months (background: here, here, here, and here ) and Mena basically fell on the sword. She *talked* to their customers about it. Heck, they even gave people refunds! Note, she didn’t send her PR person to handle the issue–she talked to her fellow bloggers! This wasn’t the first time either. When SixApart changed their pricing for MoveableType back in the day the blogging community went absolutly wild. Mena was brilliant in how she handled the venom, basically saying “our bad” and “we won’t ever do anything like that again.”

The result? Bloggers love Mena and they have forgiven SixApart for two huge mistakes. Mistakes that could have done major brand damage have actually turned into bonding experiences with the user base. People felt sorry for Mena and her crew at SixApart and sent letters of support! The blogosphere loves brutal honesty.

Why? Authenticity. Mena is authentically addressing the issues, and she has since day one. If her PR person gave a canned response SixApart users would have gotten even more upset. Frankly, Mena is the PR department for SixApart–she knows best how to talk to the customers and everyone over there gets that.

From what I can see, and I’ve only been here a month, we’ve got some work to do at AOL in terms of talking with our customer base. Frankly, most companies do so I’m not surprised at all. Adopting transparency is like getting pushed into an ice cold lake–it sucks at first, but after five minutes it’s invigorating.

As such, I’m pushing everyone here as hard as I can to start blogs and start talking with our customers. That’s why I’m tackling these issue here on my blog–to pull people out of their cubes and into the conversation. I’m sorry if the waters ice cold, but don’t worry you’ll learn to love it everyone. Life is so much simplier after you drink the transparency coolaid.

On that note, I will say we have an amazing, world-class, PR department here at AOL. They’ve been amazing to me and my team at Weblogs, Inc. So, none of this should be interpeted as a dig to the PR team. They’re doing the best they can I’m sure, but in this case one of us fancy-dancy managers should have spoke directly to the users and the press should have been directed to that perso
n’s blog.

Public relations has changed in a big way over the past two years. Sure, you still need a PR department, but the most important thing is to have your executives and product managers blogging authentically with your customers. Doing so will make the AOL’s PR department operate so much quicker and effectivly. As such, I’m trying to get a handle on who’s blogging at AOL and encourage more folks to blog.

What we did right: We made a quick step of putting a disclaimer under the advertisement, but that’s clearly too little. We’v got a ways to go before we make this right with the user base.

What should we do next: I’m in favor of taking the ads down for now, figuring out a way to determine who’s a paid member or not, and then adding the ads back to free blogs with something like 15 days notice. This way folks can either a) pay us and get no ads or b) take advantage of the free product with the ads. We should also apologize to the members and contact the folks who’ve left and offer them something to come back.

What do AOL Journal’s users think?
What do my peeps at the Journal’s product think?
What do you think?

What people are saying:

• It is an abomination that AOL advertises their journals as private and personal, then violates that trust with an invasion of that privacy with advertising by corporations.
• I am hoping this move will not be permanent. I don’t like change. But, I will when I have to
• AOL journals have me in a bind, I have friends here that I hate to leave yet AOL has me so pissed off at them for these dang ads.
  
• It’s a mite disconcerting how the Washington Post is more attentive to AOL subscribers and their needs than AOL itself.
• We didn’t get that victory I was hoping for, but Joe says that they are putting up a disclaimer, and that plays a part in this post and my decision. After carefully thinking and listening to other people’s advice, I have decided to resume My AOL Journal! I will be using my Blogger journal as a 2nd journal to mingle with my friends there.
• BusinessWeek’s blog chimes in.
• LOOK AT THE TOP OF MY JOURNAL. THAT FLOATING THING THAT IS USING UP MY AOL SPACE, SPACE THAT I PAY FOR. THAT IS NOT MY ADVERTISING SPAM (IT’S YOUR SPAM) SITTING THERE LIKE A BLEMISH. I DID NOT WRITE THAT. I DO NOT ENDORSE THAT, WHATEVER THE ADVERTISEMENT MIGHT BE AT THIS PARTICULAR MOMENT.
  

This is something we’ve been talking about doing for a long time on our blogs… I guess we’re getting big, fat and slow in our old age.

http://www.gothamist.com/labs/contribute

All our blogs have tip forms, and most are using Flickr and Del.icio.us to collect tips from readers, but this is really nice looking. Where my devs at?!!??!

I’m making it my mission to get AOL executives blogging. Right now I know of only one AOL blogger outside of Weblogs, Inc.

Update: Found a bunch of AOLers who blog!

1. Joseph Loong, Sr. Programming Manager, Blogs – AOL Community Location?
http://journals.aol.com/journalseditor/magicsmoke

2. Dossy Shoibara from AOLServer Title?, Location?
http://dossy.org/

3. Kevin Lawver, “Web Standards Guy” Department?, Location?
http://www.lawver.net

4. Jamie Mottra of AOL Sports Location?
http://www.misterirrelevant.com/

5. Mr. Panzer Title?, Department?, Location?
http://journals.aol.com/panzerjohn/abstractioneer/

11. http://journals.aol.com/panzerjohn/abstractioneer/

12. Greg from AIM
http://journals.aol.com/gregsblog/aimInfo/

13. Justin Uberti, Chief Architect, Instant Messaging, Dulles, VA
http://journals.aol.com/juberti/runningman

14. http://journals.aol.com/iad2la/IwantIneedIhavetohave/

Does anyone know any AOL execs blogging? If so post in the comments.

Also, an open invitation to any AOL exec who wants to blog: I’ll setup, design, and get you a unique domain name for your blog if you start blogging (or just start a Journals blog). Let’s get the word out about all the great stuff going on at AOL! Just ping me at AIM JasonCalacanis.