Editor’s note: More and more mobile app developers are deciding to make apps for Android, even though it still doesn’t have the same reach as the iPhone. In this guest post Kevin Nakao, the VP of Mobile for Whitepages, makes the argument for taking the Android plunge now (as he is preparing to with a new Whitepages Android app launching next week). Follow him on Twitter @knakao

Mobile games publisher Gameloft might have thrown in the towel on Android, but that is a mistake. I certainly understand why they gave up on Android. Since launching in February of this year, our own Whitepages Caller ID app has become a top ten grossing Android application, and yet we’ve seen less than $54,000 in revenue. While our iPhone app download counts are in the millions, our Android app downloads are a mere 17 percent of this volume.

Despite our meager return on investment this year, I believe that the real potential for Android app developers lies in the New Year. Here’s why:

Editor’s note: Today, being a news junkie requires not just the ability to keep up with hundreds of breaking stories a day, but the ability to redistribute those stories to your followers and news sites. To get some insight into the modern news junkie, we asked Mrinal Desai to share with us how he screens the news in the guest post below. Desai is the co-founder of CrossLoop, but some of you may recognize him more from Twitter or Techmeme, where he tips stories every day—580 of those tips have appeared as headlines since the beginning of this year. You can read his last guest post here.

Like many out there, I have been, am and always will be a news addict. For many news junkies, it is the fleeting, current fix of information about a breaking topic that interests them, only to be replaced by the next headline. They jump from headline to headline, forgetting the one they just read as they move on to the next one.

For me personally, news is not only timely information on the current state of affairs but also a way to take a deep dive, to connect analysis and information together and learn through application. I am looking for insight. It could be patterns, it could be knowledge about an industry or it could be an opportunity to become introspective and ask questions.

Keeping this in mind, here is a snapshot of my consumption and distribution of news both offline and online. I’ll divide the way I screen the news by the screens on which it comes to me.

For startups, Christmas comes in November. Partners come back from vacation in September and deals start closing a few months later; since the credit crisis deferred fund-raising for most of the past year, November 2009 will probably end up being especially busy.

Redfin is one of the companies that just closed a round. Already the process has resulted in a huge shift in our mindset: from just surviving to building a juggernaut. That shift is one every startup can try on for size, whether it needs capital or not, by asking itself the same basic questions that VCs asked us.

The rapid development of interesting web services can be attributed to the ability of each successive builder to create a layer upon what others have built. The existence of APIs and callable web services means that each builder can add value on top. When you combine this with crowd-sourcing, you effectively pour lighter fluid (in a good way) on this layering process. The only remaining element required is a taxonomy to insure that the crowd-sourcing creates content that is structured enough to make sense despite coming from many hands.

PublicEarth, a Polaris portfolio company that is launching today, takes the power of API layering, crowd-sourcing, and taxonomy and focuses it on maps. PublicEarth describes itself as a wiki of places, specializing in collecting all those “long tail” places that most other databases tend to overlook.

Affiliate marketing is 15 years old this month—CyberErotica is said to have launched the first program in 1994. The adult industry has always been ahead of the curve, but I digress. Despite 15 years of existence, which is essentially an eternity in “online years”, the performance based marketing method is still in its infancy. Sure, there are lots of affiliate programs that exist for many online etailers (and other sites that seek sales, leads and visitors) and $2.1b was paid out last year from affiliate programs, but affiliate marketing is still not as easy as it should be for website/blog Publishers to implement and get compensated for their referrals.

For those that don’t know, affiliate marketing works like this—a company with a product or service for sale pays a referral fee to Publishers (marketing companies) that can drive sales, leads, or visitors to them. The Publisher is taking on the risk here—they might be outlaying their own cash on advertising to promote the product/service, or they are linking to that company’s product/service in the content of their site’s own webpages (when they could be linking to another company instead). The Publisher signs up for an account with the affiliate program and is then given “trackable links” to use in their content, which track referrals back to them. Most etailers have an affiliate marketing program in place—for example, Amazon.com’s Associates program will pay 4%-15% referral fees to you when a visitor of your website clicks a link on your site and makes a purchase at Amazon.com.

Twitter & Facebook Turn Everyone Into An Affiliate Marketer

Most recently, it’s not just websites/blogs that are referring sales, but rather individuals themselves, who are using realtime sites like Twitter and Facebook to influence their friends and followers by recommending products to buy, music to listen to, and movies to watch. These realtime discussions are becoming important sources of referral sales and leads for websites—if someone is asking on Twitter what digital camera they should buy, you bet your ass that Amazon.com wants anyone on the Internet responding to that user’s question to be linking to a camera for sale on Amazon.com (and not Walmart.com or BestBuy.com). Amazon.com wants to make sure that those influencers are compensated for referring people to buy from their website, which thus positively reinforces them to continue linking to Amazon.com product pages in the future.

In an efficient ad marketplace, the top keyword usually goes to whoever can spend the most money on it, normalized for conversion. Who can afford to spend the most money? Unfortunately, it’s not always the company with the best product, service, or price; under pure laissez faire advertising, it can be the company that tricks, lies, and steals more pennies out of each customer than any competitor. This often forces ethical competitors to make a very tough choice: roll over and stagnate (or die), or play a similar game. Playing to win means staying microscopically behind the red line or breaking the rules and not getting caught.

Let’s keep that as the backdrop as I tell a sordid story about lead generation on the Internet.

Last night we wrote about the lead generation scams within social gaming networks. This is a guest post by Dennis Yu, the CEO of BlitzLocal, a privately held 50 person advertising agency in Denver, Colorado, specializing in local search engine marketing for franchises and professional service firms via Google and Facebook. BlitzLocal is no longer in the business of spam, but they do specialize in Facebook advertising and are now using the platform they’ve developed to run campaigns for big brands and small businesses. Dennis writes a blog at dennis-yu.com

Did you know how Mark Zuckerberg supported Facebook in the early days, before he got venture funding? Casino ads. And how about those advertisers who were making over $100,000 a day selling Acai Berry and other weight loss products – they are friends of mine, pioneers of new advertising channels. You see those ads saying “Inbox (5). Nick, someone in San Francisco has a crush on you!” (with your name, profile picture, and city in the ad). I generated millions of dollars from these offers on Facebook – I am not proud of it, but it was very lucrative.

I will walk you through how these online scams work on Facebook and other social networks – the mechanics of how the money is made, some of the people involved, and who is actually clicking on ads. If you’re reading this article, there is a good chance that you are not the type of person actually clicking on these spam ads, but are you curious as to who actually is?

In June 2007, Facebook opened up their application developer platform so that anyone could build games on top of the social network. By having access to user data, game developers could instantly make engaging, viral games. Rate who is hottest among your friends, share quizzes, race cars, grow vegetables, and so forth – all with a click of a button. Users in one click gave the game permission to access their profile data and they didn’t think twice about it.

This guest post is by Adam L. Penenberg, author of Viral Loop.

Four months before my latest book hit store shelves, my publisher wanted to change the title. Viral Loop might be catchy, and reflect what the book is about—and isn’t that what a title is supposed to do?—but Hyperion worried that some readers would be put off by the word “viral.” Would they shrink away for fear it was about “swine flu”?

The book looks at entrepreneurs who built multimillion- and in some case billion-dollar businesses from scratch by incorporating virality into their products and businesses. Many iconic companies of our time, including Facebook, Twitter, YouTube, eBay, PayPal, Flickr and rising stars like Twitter are prime examples of a “viral loop”—to use the product, you have a strong incentive to spread it. At some point, as the number of users doubles, then triples, the company achieves what’s known as a “viral loop,” when the product spreads even if the company does nothing to promote it. The trick is that they all created something people really want, so much so that their customers happily spread the word about their product for them. The result: Never before has there been the potential to create wealth this fast, on this scale, and starting with so little.

This guest post was written by Roman Stanek, the founder and CEO of Good Data, a cloud-based business intelligence startup headquartered in San Francisco. Roman has been a tech entrepreneur for almost 20 years. He was founder and CEO of NetBeans (acquired by Sun Microsystems) and Systinet (acquired by Mercury Interactive and later Hewlett Packard). Read Roman’s blog here.

When I met Michael Arrington back in April, I told him he was crazy to dismiss the possibility of a first-class technology startup coming out of Europe. I was born and raised in the Czech Republic, I’ve spent the last 15 years working towards building a global hi-tech company. So naturally I took it a bit personally. But I’ve been thinking about this quite a bit since then.

The following post is by guest author Edo Segal (@edosegal), an entrepreneur who has launched and sold several companies, including Relegence to AOL. Today, he runs his Incubator/Investment vehicle Futurity Ventures, which recently launched a new search engine for wisdom.

Media scarcity is dead. In the future my son will have a flash drive that he will pay $29 for that will have the capacity to hold all movies and music ever released by a major label, studio or tv/cable network. It will take 30 seconds to clone the data over the network to a friend who will pay $14.99 for a device with double capacity a year later. How does the media industry survive such a coming disruption?

For many of us that have been in this game for a while, the word “convergence” harbors some shameful vibes. It conjures up many false hopes, dashed dreams and misfires. Nevertheless, I would contend that convergence is upon us and it has arrived from an unexpected delivery man: Steve Jobs. Apple has created a media consumption experience that has reduced friction to such a point that soon the consumer will not know if he is buying music, a movie or a game. The notion of App is changing. The lines between these different forms of media are quickly blurring and soon will be completely artificial. Already these distinctions are merely fossilized conventions that stem from consumers’ discovery habits. As those evolve, like learning that it is easier to go to Amazon and search to find a product than going to aisle 9 at the store. The coming confusion of the consumption experience where a user won’t care or know if what they are buying is a movie, a game or a music track presents vast opportunity.

This is a guest post by Nabeel Hyatt, Founder and CEO of Conduit Labs, which is the creator of Loudcrowd and other social games that help you experience music with your friends. His personal blog can be found at nabeelhyatt.com and he can be followed on Twitter @nabeel.

Yesterday, Facebook announced they are going to drastically alter the way applications can message users once again, likely throwing a wrench into every app developers’ growth rate. Hints of the coming turmoil appeared last week when Facebook changed the way feeds work. This caused enough worry that apparently Mark Pincus, Founder/CEO of Zynga, canceled his appearance at Harvard Business School so he could sit with his team and figure out what the impact would be to the viral rates of their massive hits such as Farmville and Cafe World. That’s not surprising, since getting posts in the feed is critical to continued growth, but the myopic focus on the “viral rate” by some in the industry has created an over-dependence on perhaps the wrong number.

The following is an excerpt from Adam L. Penenberg’s new book, Viral Loop: From Facebook To Twitter, How Today’s Smartest Businesses Grow Themselves.

Simply by designing your product the right way, you can build an insanely fast-growing business from scratch. No advertising or marketing budget, no need for a sales force, and venture capitalists will flock to throw money at you.

Many of the most successful Web 2.0 companies, including MySpace, YouTube, eBay, Flickr and rising stars like Twitter are prime examples of a “viral loop”—to use it, you have to spread it. The result: Never before has there been the potential to create wealth this fast, on this scale, and starting with so little.

In Viral Loop, Penenberg tells the fascinating story of the entrepreneurs who first harnessed the unprecedented potential of viral loops to create the successful online businesses—some worth billions of dollars—that we have all grown to rely on. The trick is that they created something people really want, so much so that their customers happily spread the word about their product for them.
One such business was Hotmail. After their 20th venture capitalist meeting, Sabeer Bhatia and Jack Smith, former hardware engineers at Apple who first came up with the idea for webmail, finally raised seed money from famed VC firm, Draper Fisher Jurvetson.

The number one question you all asked after reading my last blog post about starting a business from scratch was “how do I find my co-founders?”

Great question – let’s start with a bit of self reflection:

Close your eyes and visualize your group of closest friends.

Now, think specifically about how tall (or short) they all are.

Great, now ask yourself “are all of them roughly the same height?” I’ll bet most of them are – you included.

And therein lies the problem in finding co-founders for that startup you’re dying to launch. It’s most comfortable to hang out with people like ourselves, but those are exactly the folks you probably don’t want to co-found a startup with. Seems a bit unintuitive, right? I’ll explain.

Editor’s note: Below is an open letter to our President from guest author Edo Segal, a concerned web geek who cares about the future of our democracy. It is followed by a proposal and a new website for anyone who thinks they know what #obamashould do (cynics please skip post).

Mr President,

On the night of your acceptance speech, just before you walked on stage, “you” sent out an email saying “i will be in touch soon”—but you disappeared and all we were left with was the strange feeling you get when your older brother ditches you for his cooler friends. Does it take you winning a Nobel prize to get another direct letter from you?

Where’s the attention? The yes-we-can attitude, making us feel we can be good again? It seems that since you made it to the Oval Office you have been too busy at work, and our relationship has really suffered.

Hating venture capitalists is profoundly satisfying. After all, they are slack-jawed, monied, oily, know-nothings who carom off innovation, fire capable founders, squash angel investors, and exist mostly to make commercial bankers look smart and interesting.

Or at least that’s the story we like to tell. By “we,” of course, I mean all of us who lovingly poke venture capitalists in the eye with sticks now and then. They are such easy targets, what with making up numbers about how many jobs they create, missing great investments, delivering awful ten-year returns to investors, having higher failure rates among companies they fund than among the ones they don’t, and generally being so self-important and irony-unaware.

But that doesn’t mean VCs are quacks. Or that what they do isn’t hard. Or that it’s unimportant. Because it is important, and the good ones are smart, and what they do is very, very hard.

This is a guest post by Robert J. Moore, the CEO and co-founder of RJMetrics, a on-demand database analytics and business intelligence startup that helps online businesses measure, manage, and monetize better. He was previously a venture capital analyst and currently serves as an advisor to several New York startups. Robert blogs at The Metric System and can be followed on Twitter at @RJMetrics.

A few weeks ago, my former employer led a $100 million investment into Twitter and I must admit that I was quite jealous of my former colleagues. Chances are they got the opportunity to do some very cool analytics on Twitter's data.

Rather than wonder about what I missed, I decided to figure out what I could from the outside looking in. Using some statistical trickery, the Twitter API, and my RJMetrics dashboard, I uncovered a ton of astonishing new information about Twitter. Here are some highlights:

This guest post was written by San Francisco Mayor Gavin Newsom, who was elected to the position in 2003 and reelected in 2007. Newsom is also running for governor of California in the upcoming 2010 election. In this guest post, Mayor Newsom announces a contest to create apps using city data from DataSF.org,.

Last week, we announced a City App Store to highlight and centralize software applications developed from government data available on DataSF.org. The response from the community has been overwhelming.

We have received a number of new civic apps that are now featured in the DataSF App Showcase. We’ve added Mom Maps, a new iPhone app that helps you find kid friendly locations in San Francisco, Dadnab a text messaging service that gives you transit directions, and then there’s EveryBlock, which has just added a new feature. The site breaks down what types of services people are requesting from the city by neighborhood, zip code and day.

This type of innovation is exactly what we were hoping for when we launched DataSF.org less than six weeks ago.

We were not sure what people would create with the data, but we knew that many of our talented developers wanted to help improve San Francisco. Now, our community is coming together to help fill our app store with even more civic apps.

The Center for Investigative Reporting’s California Watch reporting team, Spot.Us, Craigslist founder Craig Newmark, MAPLight.org, the Gov 2.0 Summit, Sun Light Foundation and others are announcing today that they are joining forces to sponsor the first DataSF App Contest on Nov. 7.

The following guest post is written by Larry Chiang, a co-founder of Duck9 who also regularly blogs for BusinessWeek. Today he is reporting from the Finovate startup conference.

At the FinovateStartup conference in New York City today, it is clear that financial startups are pushing forward regardless of funding woes or a lackluster economy

Companies here at Finovate center around financial innovations. They track personal finance and are aggressively plodding forward because consumer adoption of the internet is rising. These companies did not just present ideas, they brought along established industry stalwarts to their demos. What’s more, many of these start-ups are already white labeling their product and integrating into established company sites (T-Mobile ads, Yahoo, Bank of America). The user interfaces are better than average, which is perhaps influenced by Finovate’s previous winner Mint.

Best in Show went to Kasasa, an Austin, Texas-based financial website that uses real-world rewards and charity donations to get people to open free deposit accounts.

This is a guest post written by a London-based VC. For the purposes of them being able to speak plainly without jeopardizing their fund or their career, I’ve allowed them to post anonymously. Why are we doing this? Well, while the startup eco-system is long in the tooth and highly developed in the US, the European scene is still a spotty, shy teenager, sometimes making a few mistakes. And as a result startups need educating. Make no mistake, LondonVC is a genuine VC and TechCrunch Europe met them face to face. Over the next few weeks they are going to offer a unique insight into the VC and startup world in Europe. I hope it’s enlightening for European startups. Read and learn.

One reason I started this column is because I see a lot of “injustices” in the VC-start-up universe, and while I’m obviously aware that we don’t work in the charity sector and that business is business — and we’re here to maximise investment returns! — I do think we should let market forces determine what’s reasonable or not for business practices and deal terms. However, this works only if entrepreneurs actually have access to experience and insight into what really has been “standard” or acceptable in the past.

Editor’s note: This guest post is written by Shelby Bonnie, the CEO of Whiskey Media. He co-founded CNET in 1993 and was the Chairman and CEO from 2000 to 2006. He served as Chairman of the IAB from 2001 to 2003.

OK, Advertising Week just ended… does anyone else feel like the online advertising industry is the orchestra, playing on while the Titanic is sinking?

We have a problem, folks. And I, for one, think we should start to fix it by killing off the CPM, once and for all.

I have been in the Internet media space for 16 years and will start by stating the obvious: The CPM has done more to stunt innovation and drag down quality products than any single thing on the Internet. Maybe it works in other mediums, but it sure as hell doesn’t work on the Internet. Having been both a small and big publisher (now small again), it’s been my experience that the collective focus on CPMs and counting eyeballs by marketers, agencies, and publishers has led to a whole mess of unintended consequences that have produced a series of “solutions” that work for none of those parties. And perhaps more importantly, it’s been terrible for users.

All campaigns start with the best of intentions: “let’s do something creative, engaging, and unique!” But unless someone really senior from the agency or client side intervenes, the road for a campaign always leads to the media buyer and the dreaded spreadsheet, where the two most important columns are impressions and cost. Ironically, there’s usually some good stuff in campaigns, but they are thrown in for free as “value adds.” At some point, publishers decide that if all clients care about is impressions, then OK, we’ll give them impressions. The output is an industry that overproduces shallow, superficial, commoditized impressions. Why do we have so many bad sites that republish the same junky content–content that’s often made by machines or $1-per-post contractors? Why do sites intentionally try to get us to turn lots of pages with tons of top 10 lists, photo galleries, or single-paragraph summaries of someone else’s story?

This is a guest post by Paul Fisher a Venture Capital investor with Advent Ventures in Europe Portfolio companies include Zong.com, Qype, Adeptra and DailyMotion. Paul blogs at The Coffee Shops of Mayfair and Twitters at @paulfish.

I have watched with interest as the Apple backlash intensifies* (see below). It seems the App Store has broken the camel’s back. There is massive resonance here for both entrepreneurs and VCs.

This quote from Chris Messina is my favorite. He thinks that the Apple App Store is a “flash in the pan” because it is a proprietary platform and, hey, wait a minute, proprietary platforms are counter to consumers’ interests. That’s why Microsoft accrued haters. And why folks are starting to feel the same about Apple?

This is a guest post by Kovas Boguta, the founder and CTO of new startup Infoharmoni. Kovas has analyzed twitter buzz around various startups and products that launched at TechCrunch50 last week. It gives a fascinating glimpse at how news blossoms, peaks and then fades.

People are social animals, and love to both move in packs. But they also like to purposefully individuate. One game-changing aspect of the real-time movement is being able to see this as never before. With real-time, and with algorithmic visualization, our “telescope” is strong enough to see the laws of social physics at work: existing social groups incubate new topics of interest, and existing interests incubate new social groups; both move in response to each other.

Twitter bills itself as the pulse of the planet, but it’s more like the pulse of creative networks. Take a look at these surprisingly visceral data movies, freshly computed from the TechCrunch50 Twitter stream, and showing an evolving network of companies competing for attention and publicity during the course of Tuesday:

Many of you may remember Ma.gnolia—the nifty social bookmarking tool that unfortunately imploded at the beginning of this year. Founded by Larry Halff almost 4 years ago, the site had a different aesthetic and attitude toward sharing information. It was one of the more community-minded tools I remember from that era, offering features like the ability to “thank” the sharer of a useful link, for example. It also possessed clean design and careful site organization. In my opinion, its take on sharing data really differentiated it.

Like many great things, Ma.gnolia didn’t start out to be big, but rather started out to be good—and it was. And, as is often the case with things that are good, Ma.gnolia become big by virtue of that goodness. Ironically, even though the membership of the service reached hundreds of thousands of account holders and tens of thousands of regular users, the infrastructure supporting the site was still incredibly small. It was run almost solely by Larry and the hardware and bandwidth he could support by himself. Unfortunately, there were some technical limitations to the honorable yet fragile DIY set-up running behind the scenes that ultimately led to the site’s premature demise. I was really bummed to watch the VOD-cast explaining the catastrophic nature of the data loss back in February and have thought about the site often, since that time.

I was able to catch up with Larry a while back and talk with him, not about what went wrong with Ma.gnolia 1.0 but rather what is in store for Ma.gnolia 2.0, if anything, and also pick his brain about the future of social bookmarking. If you were a fan of Ma.gnolia in the past, you will be happy to know that it is scheduled to relaunch September 22, by invite only.

This guest post was written by Meebo CEO Seth Sternberg. It is the first in a series of posts he’s writing about the decisions a young entrepreneur needs to make when she/he is first starting a business. The timing is perfect, there is more than a little overlap with Vivek Wadhwa’s guest post on venture capital earlier today. We’ll update this post with links to his further installments.

I was one of those kids who just couldn’t stop trying to start a company. I think I just really feared working for the Man. Problem was, I seemed to suck at the whole startup thing. Multiple attempts followed by multiple failures. At some point I just said, “screw it, I’ll get a high paying job.” Problem was, I couldn’t stop thinking of the next great thing that got me ridiculously excited. Turns out, it wasn’t so much that I was the problem. Rather, I didn’t have anyone around me familiar enough with startups to tell me that I was doing it all wrong.

Alibaba is best known for its international B2B e-commerce and sourcing market place Alibaba.com, but also operates Taobao – the “eBay of China” and largest C2C Internet retail web site, Alimama – an online advertising exchange and affiliate network – as well as Alipay, China’s most popular third-party online payment system modelled after Paypal but offering additional features such as escrow services.

Alibaba’s chairman Jack Ma, a former English teacher, founded Alibaba in 1999 out of his Hangzhou apartment. Ten years later the company has grown to China’s second largest Internet company. At the company’s tenth anniversary celebration, the man shared his lofty goals for the Alibaba Group in the next few years.