There were a lot of people, who, about a year ago made a lot of noises about how Jason Calacanis’s next project, wasn’t going to work (me included). Human edited directories will never ride in this day of automated algorithmic Google-ish-ness, and paying people to do be mechanical turk behind the scenes, grinding out said automation under the banner of a “social network” would be giant financial sinkhole.

Well, I was wrong.

I think.

According to Compete.com’s numbers, Mahalo has shown incredible growth since its inception, and has month after month continued to grow without difficulty. And this is without ads on-line, or off-line.

On the surface, it seems like natural growth, aided and abetted by Mahalo’s growing social network, Mahalo Social, as well as Mahalo Greenhouse, where people are paid based on the number of pages they help edit, not including of course, its daily video they produce, Mahalo Daily, with Veronica Belmont. Things like “socializing” Mahalo’s search by combining its social network *with* its greenhouse (your profile will improve with the amount of help you provide to editing edit and build its index) will probably help as well.

Or maybe Jason Calacanis is finally collecting his marker from Satan.

… I’m KIDDING of course (although I’m pretty sure many folks at the Affiliate Summit are not, in their very vocal vitriol).

Irrespective of the reason, Mahalo is growing like a weed and without acknowledging its success when you criticize its underlying philosophy … — well, that’s just being a tad dickish (btw, that’s “epitome”, not “impidimy”).

Congratulations, Jason. Its been almost a year, and Mahalo is doing just great. I’m eating crow, and I’m happy to do so.

Google Sites, Google’s update for Jotspot, the Wiki application it bought almost a year and a half ago has just been released. Now, just a question from a casual observer, but given how Squidoo has been embraced by SEO-types for its ability for anyone to generate content easily, for it to be indexed quickly, and for its links out to be relatively unchanged, one wonders what kind of implications Google Sites will have as well.

Granted, Google Sites looks like its under the “Google Apps” umbrella, which means that you probably have to own a domain first (to give the appearance, at least, of having a “business” that the app can go under), but on the surface there does seem to be some similarities here, not the very least, including the fact that it doesn’t outwardly support ads (nevermind Adsense). That is, its not natively offered as an option. Links as well, are not direct links, but get parsed through the Google url.

For example, links get changed into –> http://www.google.com/?url=XXXXX

Where “XXXXX” is the URL you are pointing to.

Anyway, I’m sure much more will be written about Google Sites in the coming future, but as it stands, it seems like Google’s intention is certainly to keep it SEO neutral (neutered?) for the time being.

Interesting: When Google bought Jotspot initially, there was already some thoughts about what kind of SEO implications this might have, this being one of them.

I love Picnik, the online image editor.  I’ve said so in the past, mostly because it is so slick, smooth and user-friendly. Therefore, it made my day to hear that Picnik has, in fact, gone Free!  Waved its premium membership, so that average (read: thrifty) folks can use their advanced editing features that were initially closed to them.  If you’ve waited to use Picnik, now’s the time to try it out!*

*Spending 5 more minutes trying things out / finishing the announcement, I realized that there is *still* a premium membership, and everything that *was* premium before is now available to all, and what they’ve done is made *another* set of features “premium” (including exclusive fonts and an unlimited “undo” history).  Second of all, they’ve opted to pay for these changes by going to an ad-supported model (which they can probably afford to do now that Picnik has an ‘arrangement’ with Flickr that probably pads the bottom line enough to move to this kind of revenue model).  I should warn you, if you hate ads, these ones are as intrusive as heck — they shrink your editing space by taking up real estate to the right and bottom of your screen.  On the other hand, if you hate ads and you’re using Firefox, you’re probably using no-script anyway, in which case the effects of these changes are to merely shrink your usable area.  Is it still “worth” it?  I’d still give it a “hell yea”, as some of these effects are still very slick, and very smooth.  And to be honest, probably worth the extra $25 to get rid of. 

Crunchyroll. You might vaguely remember some noise around this video-streaming site (let’s call it a YouTube clone) that hosts largely japanese “cartoons”, or anime, as its also known, as it got some coverage by TechCrunch and Venturebeat a few months ago. The noise was around the fact that it was generating bongo traffic, some unconfirmed revenue ($75k/ mo), and remarked by me somewhat snarkily, almost all on pirated material (more on that in a second).

Fast forward to 2008, and lo and behold, it looks like some VC’s are either gutsy, brainy, or just plain ol’ “I’ve got money burning a hole in my pants, and I’ve got to spend it somewhere” (also known as “stupid”), as Crunchyroll has got its first round of funding, courtesy of Venrock, to the tune of just over $4 million dollars, as reported quietly by the Private Equity Hub.

So, back to where I see the controversy: Crunchyroll’s content — the popular stuff — is almost all totally copyrighted material … *somewhere*. We’re talking popular (and less so) anime, full reel stuff, if its found in separate parts, almost always dubbed subbed (that is, “subtitled”) for English speaking audience. There’s also Asian movies by the bundle, Chinese, Korean, and Japanese (and probably more), all dubbed subbed for your easy perusal. The way that Crunchyroll makes its cash is through a membership fee, as you can pay to watch a higher quality streaming video.

And let’s give credit where its due: they will happily take down material *if* the copyright owners send in all the right DMCA paperwork. Furthermore, there are smaller sections (that’s probably growing) that are focused on user-generated videos (music videos, and videos of people with their riced up cars, for example).

So why was I all agog with this announcement?

Only that it seems like Crunchyroll’s success lies *soley* with its ability to stream copyrighted material that anime-obssessed otaku are overjoyed to watch — for free — without downloading. That a fraction of their this bunch is happy to buy a membership so that they can share in higher quality streaming seems to be an *extremely* dubious model to me, simply because its all hinging on the hope that the original owners of said copyright are *not* going to throw DMCA letters to take down all this material.

The “this is so stupid, I can’t believe how stupidly stupid this is” part of the argument probably carries on by saying that once companies across the Pacific Ocean *do* hear that Crunchyroll has funding, all it creates is a giant sign that says “we’re big enough so that you can now send your lawyers after us!” I guess that there are some VCs who are confident that, just like Google, there are some video-streaming sites that are just worth fighting for (but probably, unlike Google, don’t have the warchest to fund said legal fight).

But that brings me to the gutsy and or brainy part of it. Maybe there’s some part of the plan that we don’t yet know about; perhaps Crunchyroll has made a number of partnerships behind the scenes to stream a ton of copyrighted material. Who knows? Or maybe the minds behind Crunchyroll have some awesome way of maintaining members and viewership up even when the proverbial Golden Goose has been sued into submission (it looks like a classic figure four leg-lock, if you must know).

Hey, anything’s possible, I guess.

But I’m really hoping that their business plan *doesn’t* involve a lot of praying and hoping that the original copyright holders *don’t* DMCA the hell out of Crunchyroll, so that Otaku all over the world can watch their J-drama’s and anime gratis.

Looks like the blogosphere has jumped on Fred Wilson’s back-of-the-envelope financial analysis of Google, in light of Google’s apparent troubling click-fortunes (honestly, did anyone think we’d be having this discussion 6 months ago?).

He has a good point though: Google’s spending a fraction of its revenues on the one pony that’s actually making it cash money.  Personally, I’m looking at it from a glass half-full point of view. I *like* the idea of Google putting money into unfettered innovation that has a good chance of defining what the “internet” is, via software-as-service while owning the infrastructure behind it (don’t forget, Google has secretly been buying up dark fiber and building huge data centers, also largely in secret, to buttress this initiative).

Its obvious that the minds behind Google are looking well beyond its current incarnation, into a role that will not just compete, or lead, but to define and dominate new categories of technology that are nascent today.  So let the analysts quibble over click fraud data and decreased earnings.  As far as I’m concerned nothing’s changed with Google’s management, nor the direction that its been taking over the past year or so — and given that, I’ll be happy to continue betting on Google’s “one trick” pony for the forseeable future, because I know there are a few thoroughbreds in the stable that we haven’t even seen yet.

More:

• Henry Blodget has a more interesting Wallstreet-oriented discussion, using words like “EBIDTA”, and “run-rate free cash flow”, and “revenue”, and concludes that the reason why Google’s been spending like a drunken sailor on these capital expenditures is *because* its been a wash in cash.

The funny thing is that unlike Twitter, which took me over a year to “get”, it took me all of 5 minutes to “get” Friendfeed (which just announced a 5M dollar round of funding).  Anyway, the service is a bit mindblowing in as much as that you can basically have conversations *with* friends about things you share.  That description sounds underwhelming until you ask it to automatically broadcast things you want to share — Twitters, Blog postings, and almost anything with an RSS feed — and what you get is one long river of combined updates (you and your friends), with the ability to comment and have a conversation on any one of those “activities”.

Think of it like Twitter, except that it can pull in online activities automatically (that you choose), and there are opportunities to create nested comments for each activity that is broadcast.  In an odd way, its like having a better, more automated, more accurately annotated version of Twitter, although the emphasis on adding bare comments to your stream (which has no character limit) seems to be the difference so far (this is having played with it for 5 minutes).

Its one of those things you have to try, and since they’ve added the “add friend” function, which allows you to scour your email lists for people who are already *on* Friendfeed, it becomes a slam dunk.

Add me, and let’s try this conversation together. :)

More

• Louis Gray has been stalking Friendfeed for months
• Eric Eldon has an ongoing love affair with Friendfeed, and gives some Facebook-perspective
• Robert Scoble has finally jumped in (which is like the signal for other early adopters, I’m sure)
• Jason Kaneshiro puts in his three cents
• Erick Schonfield gives a review, and the Google-y backstory behind Friendfeed

So I had a chance to listen in on the Digg Town Hall today, which wasn’t quite the format I was expecting, as they fielded 20 questions that were sent to them (ordered by Diggs, naturally), rather than answer live question from the (virtual floor).

Nevertheless, what I got out of it was a few things:

1. Catching spam is a big priority: Digg is putting a lot of cash and resources into hiring people who can find algorithmic ways to tackle this stuff. And Kevin and Jay are keenly aware that the integrity of their site hinges on being able to catch spam — so much so that they self-censored themselves when trying to describe exactly how Digg promotes stuff, because they don’t want spammers using that information against Digg. One of the more interesting stories I heard was how one blog would pay a top Digger to submit stories — often good stories, quality stuff — have it promoted to the front page, and then weeks later, have that URL re-direct to another URL (or another page), thereby increasing traffic to that other page. Pretty crafty / black-hat stuff! Anyway, that’s just one example of the stuff they’re trying to fight off. Another one that they described was one enterprising guy hiring dozens (hundreds?) of people in eastern Europe (Romania?), and they caught the spamming as they were all from the same region (caught by IP address) which looked pretty suspicious.

2. They will never disclose their exit strategy: People ask them “all the time” whether Digg is going to get sold. They never talk about it, and probably never will talk about it. Rather, they want to invest their time into improving features with the site, such as the comments section and searching, and duplicate checking, which they readily admit, is something that they’re trying to fix.

3. Their emphasis is on improving Digg’s features — not its customer support: Ok, that’s not entirely true, because one of the things that’s coming in the pipeline (or so we’re told) is a forum of some kind for people to ask questions and have their questions answered; apparently there’s going to be two broad categories … one for general user type questions, and another for technical questions (how to get the Digg badge to work, and so on). What I actually mean is that there are a small but vocal (and important) group of Digg users, some of whom are considered the Digg elite (top Diggers, etc etc), who are pining for a way to get their emails answered in a personal, timely manner, about questions that probably have nothing to do with not understanding the FAQ. Questions around why people were banned, how they can get re-instated, blacklisting of URLs and the rationale for why that might be happening. These are all legitimate concerns, but it seems like Digg’s big focus is on features, and in spite of Jay’s reassurances (”we don’t just ban anyone; there’s a back and forth … a dialogue, before someone gets banned” for example), unconfirmed reports suggest that for many Diggers, that just hasn’t been their experience.

Other miscellania that I remember:

• There is no auto-bury function, rather just a sophisticated algorithm for judging which stories get promoted
• there is probably *as* a sophisticated function for burying just as their is for promoting
• “diversity” of people digging clearly has some importance (and weights each Digg differently, is what I got out of it). What diversity means exactly, they didn’t want to reveal.
• Kevin gets together with the guy from Delicious, and the other guy from Reddit (don’t know their names) to regularly commiserate over the never-ending battle between spammers, trying to game these social sites, and the kind of solutions they have to come up with to detect it, and then end it.
• There is only one guy “moderating” at any one time
• They don’t like to call him a moderator (they used another name, like “sys admin”, or something)
• They rely quite heavily on focus groups to help them decide which features suck, which ones they introduce, and to test new features.  There is a way to get into these groups, but by that time, either my own connection conked out, or they merely decided to pull the plug on the presentation.

The bottom line that I got out of it was they gave the appearance that they were trying to make Digg better — and that it takes time, and that they actually get most of the feedback that comes to them, positive and no.

Lastly, for the vocal Digger / social media crowd who are keen to get some better answers to their questions, unfortunately, while the mechanism that currently exists to get in touch with them is probably lacking (and sorely, from the sounds of some Diggers), its clear that this aspect of Digg isn’t something that’s a priority for them to fix — improving and adding new features to Digg is.

It’ll be interesting to see how that part of the debate evolves from townhall meeting, to townhall meeting.

More:

• Mat Ingram’s wrap up
• Social News Watch’s thoughts on the auto bury denial
• Mashable’s embeded Ustream of the entire Digg Town Hall
• CNet who thinks there was too much navel gazing