Benjamin Kuo’s Blog

A few years ago, there was a pretty standard question that investors would ask startup entrepeneurs looking for money: What happens if Microsoft decides to get into your market? The question today seems to have shifted, rightly so, to: what happens if Google gets into your market?

Last night, Google announced Google Voice, a voicemail transcription service, which goes head to head against a lot of startups. We covered the threat to local startup YouMail, this morning. But, there are lots of other startups who also are threatened by Google’s new offering. (Another local company affected by this is FreeConferenceCall, which offers free conference calling services–also a new offering in Google Voice).

It used to be that Microsoft would enter into, and dominate markets, using the huge revenue engine that was Microsoft’s operating systems (first, MS/DOS, then Microsoft Windows, and now, some combination of Windows/Microsoft Office/etc.). How they would do this was they would use either the power of bundling, or just the sheer ability to fund businesses and projects with those revenue engines until all the competition went out of business or sold. (anyone remember Visicalc? Wordperfect?)

It seems like we’re now seeing the same with Google, which is taking its dominance (and again, revenue engine) and using that to fund lots of projects as loss-leaders, with potentially huge impacts on startups in the sector. There’s now countless sectors which are not viable areas for startups, because of free, subsidized offerings from Google.

How will you react if Google enters your market?

Earlier this week, Internet Brands acquired twelve more web sites for the firm’s stable of web properties, bringing the firm’s total number of web sites up to 200. It’s an increasingly common strategy you are seeing out of Southern California companies: companies which are buying up small web sites, and selling advertising against those web sites to advertisers. The web market is increasingly looking a lot like the traditional publishing market; a set of publishers owning many, disparate but somewhat related vertical content properties. It’s a lot like the structure of the magazine publishing industry.

Among the more active and visible companies here, in addition to InternetBrands, are AtomicOnline, which has made numerous acquisitions recently either directly or through its CraveOnline subsidiary and Demand Media, Richard Rosenblatt’s new media startup. Demand Media, which in addition to running its own properties like Trails.com and eHow, also has a joint venture with Lance Armstrong, at Livestrong.com. Buzznet, a venture funded social media site focused on music, has been buying up music related blogs and other web sites–most recently a heavy metal site, and a punk music community. Even web video firms — like FunnyOrDie, the online comedy site started by comedian Will Ferrell, has its own stable of related sites, like PwnOrDie, ShredOrDie, and even EatDrinkOrDie — a food site. Similarly, new media studio DECA is spawning out its own set of web properties, including video tied to existing brand BoingBoing, a comedy site called BushLeague.TV, CoolMom.com for moms, and more.

What does this mean for small web publishers? For those who are creating their own niche sites, it’s actually a good thing; the emergence of these and other companies looking to aggregate critical mass of sites means that there is a set of possible buyers for projects; rarely do these bigger publishers go out and try to create their own sites.

(photo credit:  sporkist@flickr)

This is making the blog rounds today: Dreamhost, a Los Angeles-based web hosting company, accidentially overcharged its customers to the tune of $7.5M, due to a billing error. (Disclaimer: this blog page–but not our main site–happens to be hosted on Dreamhost. And yes, we did get a mysterious billing notice yesterday.)

comScore, the firm which tracks Internet traffic trends, issues web rankings every month on the top web sites. Today, two Southern California firms showed up on the firm’s top 10 list of companies having increases in unique visitors: JibJab and Buzznet. JibJab, the Santa Monica-based firm which runs an online content site focused on comedy and humor content, showed up as number two in the biggest increase in uniques for December; the firm went from 1.7M uniques to 4.4M uniques, a 156% increase in the number of visitors. Buzznet, which is based in Los Angeles and operates a social media, music-focused social networking site, also saw a big bump, going from 3.1M users to 4.97M unique users in December, up 60%. JibJab is venture backed by Polaris; Buzznet is backed by Anthem Ventures and Redpoint.