One thing I learned during the dotcom bubble and bust was that in every bubble there are “X-factors” that are not predictable but that have significant impact. During the dotcom bubble the accounting scandals and 9/11 were the X-factors that no-one (or at least few) could have predicted. We all knew the NASDAQ was way over-priced and we knew that there were too many well-funded startups chasing the same spaces. However, we didn’t know that Enron, Worldcom, Adelphia, etc. were going to implode, and we certainly didn’t know about 9/11 (we can debate what other folks knew and didn’t know in another post).

Folks are debating the real estate slowdown, but what the debates don’t take into account is the “outside factor(s)” that could push the market over the edge–like the accounting scandals did.

My intuition tells me that there are two X-factors waiting in the wings that will turn the soft-landing into something harder:

1. I think there might be *ramped* mortgage fraud going on. Like people buying five houses on bogus mortgages that say their living in a house.

2. “creative” mortgage options in California coming home to roost. Check out the infographic below from Marketwatch.

Update: Wow.. talk about ironic, the LATimes has a story today (that I didn’t see when I wrote this) about “a house that was facing imminent foreclosure by the bank. The owner had purchased it with a five-year, low-interest loan for more than $100,000 over what the real estate agent was now trying to get.”

Fred calls me and Mark to task for being YouTube haters, and says that YouTube is the “single best thing that has happened to the Net in the past several years.” I wouldn’t argue with that *single* best comment, but in fairness it is right up there with voip, blogging, podcasting, Google Adsense, social software, social news, and broadband.

Who wouldn’t want a free Tivo of the best video moments in the history of filmed media?! That’s not the point.

Fred’s second incorrect statement is that YouTube created the Flash Media player–dead wrong. They didn’t make it Fred, but they did make it a hit.

[ Update: Fred say's that when he mentioned the embedded flash player he was talking about the syndicated video feature... fair enough. ]

What Fred misses completely (and he doesn’t miss much) is that YouTube’s real invention was *syndicated* video. Up until YouTube folks would block other domain names from using their video because of the bandwidth bills. YouTube bravely (or foolishly if their company had/does run out of money due to bandwidth bills) did was *encourage* users to syndicate their videos and used that syndication as a promotion and a link back. That was brilliant–straight up brillaint.

That concept worked, and that syndicated concept is–I believe–their innovation. Does anyone else know of anyone who did syndicated video before YouTube? I don’t off the top of my head.

Now, my point all along about the YouTube service is that it is Napster on the web with very little else. Rewarding someone with a huge valuation or a huge exit for being a “pirate bay” is a joke, and that’s why the big media companies shut down Napster. They did it on principle, not based on logic. Logic would have told the media companies to buy the company and make it legit slowly. If the music companies they would own iTunes, not Steve Jobs.

Now, the technology behind the site is *easy* to build. Trust me on that one because our team at Netscape built it in a month, and our technology is MUCH better than YouTube’s. The reason is that the technology behind YouTube is Macromedia’s not YouTube’s. YouTube should get very little to no credit for their technology beyond the scalling of the service–which is not that easy (but not that hard either).

In fact, the technology piece is sooooooooo easy that Yahoo, AOL, MySpace, and countless startups have all built their own versions. Why would you pay a $1-2B to YouTube for Technology that costs < $50,000 to make/customize?! That is why companies with scale (aka traffic) like Yahoo, MySpace, Viacomm, and AOL have all created their own services. Only an idiot would pay someone $1b for technology that is a commodity and traffic that is based on their IP!

YouTube does have a great community in a very similar way that Napster and Bittorrent had and have great communities. However, if I had a bar that gave out free (stolen) beer every day I could build a great community as well…. but I digress.

What I will give YouTube a lot of credit for is leveraging mountains and mountains of illegal content to make a huge legal business, and for getting away with this plan for so long. They did show copyright holders of the world the value of their content online, and it’s created great companies like Revver which are coming up with models to pay origional content owners.

So, all credit to YouTube for:

a) syndicated video
b) staying in business this long without getting sued
c) showing video holders the value of their content
d) scaling the service

If YouTube can make the shift from back-alley pirate bay to legit content distributor it will be one of the great bait-and-swith, hit-and-run acts of of all time. Napster couldn’t thread that needle, and I frankly don’t think YouTube will.

If they do I’ll buy those dudes a bunch of beers and congradulating them on being the greatest hustlers of all time (and I mean hustler in Jay-Z sense of the word–respek!).

I’m leaving for podshow expo from Santa Monica in the next 20 minutes or so…. send me where the dinner/party/whatever is tonight.

my email is jason at my last name (calacanis.com) and my cell for SMS messages is 310 456 4900.

see peeps in a few!

We are about to tape the next episode of the Gillmor Gang–hosted at Podshow–and the topic of the show will be Adam Curry and Podshow raising ~$25M for their podcast startup. I think everyone knows where I stand, but the real question is will Adam allow this show on his own network? I’m sure he will ban this show… 30 minutes to show time!

I can’t wait for the Borat film… this guy is brilliant (respek to TMZ for the clip!!!)

Jim Bankoff and I discussed this RSS/buddy list feature at an internal meeting a while ago…. Stowe shows it off, so I guess it’s working now. Very, very cool…

We’ve had a bunch of consumer-generated military videos being uploaded to Netscape since we launched our youTube killer video service. Very cool…

… as someone points out in the comments the other side has their own version. Paging William Gibson.

Lest there be no question, we are now in a full-blown bubble. What on earth Podshow is going to do with almost $25M in funding is anyone’s guess, but it’s not going to end well I can tell you that. To raise this money they must have had a $35-60M pre-money valuation. That means the VCs are going to look for a $300-500M exit at the very least, and that means they need to get to $30-50M in revenue. Not sure I see that happening.

The entire concept is that this is niche media–you don’t need a lot of money. Weblogs, Inc. raised low six figures (from Mark Cuban) and we never spent it–we made money.

Unless Podshow is looking to do a rollup (which is what Ron and Adam were involved in during the last bubble) this is gonna end badly. I’d love to believe a podcasting business could grow to a billion dollars–but I just don’t.

I’ve got some budget to license video (and text) for Netscape.

How would you spend it if you were me?

interesting video found on Netscape…