Salesforce outages vs Competition

Since last October there has been a lot of writing about Salesforce and their outages. This has of course started a discussion about the reability of SaaS. Like this one 'Salesforce.com's hiccups'  (Rough Type, 2006-02-01).

In order to be transparent Salesforce created the site http://trust.salesforce.com.
A site that monitors the uptime for their service.

However, the surprising part is that other SaaS companies are using this to impress the market. "Some of its rivals have taken to monitoring the site and sending e-mails to reporters whenever something is amiss."   The Tech Beat 2006-04-27 

How clever is that?
I guess the question the potential customers are asking themselves are if to go for a webservice. Not which one. Like pointed out in this ZDnet article 'Are Salesforce's outages sullying the reputation fo the SaaS model?'

Property investment company purchases an online community

Sten Mörtstedt, CEO of CLS Holdings plc (a property investment company), places a bid to buy the rest of Lunarstorm for 170 million SEK (roughly 18,2 million EUR). His interested in the company started in 2001 when he invested 15 million SEK for 30% of the company.

The aim is to go internationally
After years of talk Lunarstorm started last autumn to expand by launching the service in UK. Read more here.  According to an article in Dagens Industri on Saturday "they will invest a few hundred million SEK the coming years to launch the service in Europe, US and China".

Background
I believe the timing of the purchase has to do with the growing focus on similar services in the US. The biggest is MySpace. Bought by News Corp, the company run by media mogul Rupert Murdoch, nine months ago for $580m. The story told in CNN. Another one is FaceBook which is apparently on the market according to BusinessWeek. I bet the value of those companies is attracting the interest to grow something similar on this side of the pond.

Lunarstorm
Lunarstorm is Sweden's leading youth oriented community service with over 900 000 members logging in to their service every week. Roughly 80% of the youths between 12-17 years are using their service! The revenue was 71 million SEK last year with a profit of 14,9 million SEK.

Further reading see the article in the Herald Tribune (200511-28).
IDG wrote earlier this year a story about how they managed to start charging for their service. (Only in Swedish)

About communities
Last December BusinessWeek wrote an article on the culture of youth communities. More on the topic is found in the blog of Danah Boyd who recently had a speech about "Identity Production in a Networked Culture: Why Youth Heart MySpace" .

More about Sten Mörtstedt and CLS
"Sten Mortstedt, 65, began his career 1962 with Svenska Handelsbanken (Stockholm). 1968 was appointed Managing Director of the Mortstedt family property company Citadellet AB, which he successfully floated on the Stock Exchange in Stockholm 1981. Since 1977 he has been involved in establishing and running property and other family interests in Europe and USA and is the Executive Chairman of CLS Holdings plc (established in 1987 - listed on the London Stock Exchange 1994).

CLS Holdings plc is a property investment company, listed on the London Stock Exchange since 1994. It has an equity of £426m and a property portfolio in London, France, Sweden and Germany valued at over £1bn. CLS has invested primarily in offices. It has established local management operating from offices in London, Paris and Stockholm. The company was founded by its current Chairman, Sten Mortstedt whose family holds a controlling stake in the company."  The description is  from GRI. 

Software as a Service (SaaS)

I have never really felt to happy with calling a webbased service for ASP (application service provider) since that is for me what it was in 2000, a client/server software distribuated using, for example, Citrix to a webbrowser.

SaaS (Service as a Software) is better name for the services of the future. Something that is build from scratch for the web.

Where I found the acronym;
'Software as a service: The next big thing?'   (An article in InfoWorld 20th march 2006)

What if the investment bankers have to change...

I don't know about you, but I've never really understood how an IPO that on the first day raises , for example, over 25% could be a successful one. For me, that's an underpriced stock in the IPO process. But hey, I'm not an economist. Maybe that's the same thing as offering a product at a 30% higher price and giving the difference in rebate...  ;-)

Anyway, talking about IPOs and using the Internet. Here is an article from CNET that I found interesting.

"Using a system known as a Dutch auction, Hambrecht collects bids from all interested investors, big and small, and groups them by how much each is willing to pay. Its bankers then count down from the top bid until they reach the highest price at which the selling company could sell all of the shares it wants to offer.  The company can choose that price or, for various reasons, a lower one. Hambrecht then sells at the chosen price all the shares that were bid at that price or higher.

In a typical first-time sale of stock, investment bankers meet with managers of mutual funds and hedge funds to gauge their interest in a company, then set a price that is slightly below what they estimate is the market value. That method, as much art as science, often excludes most of the individual investors who want to buy shares and occasionally sets off a frenzied first day of trading. "

The interesting part is that well-establied business like Investment bankers have to change their buesiness due to a more effecient processes using technology. I wonder what will be the next big step for the property industry?

A new start-up for residential homes

Earlier this week a new service called Zillow opened up for a Beta (is there anything else these days?). It is all about automated valuation on homes in the US.

'How much is your house worth? Zillow knows'  A CNET article on the 7th february
'How scared should brokers be?' BusinessWeek on the January 13
'Zillow aims for realty riches' RedHerring, october 26, 2005
'Vad kostar Bill Gates hus?' Realtid.se, february 15th, 2006  (In Swedish)

Update on Friday, February 10, 2006 at 19:44 by Magnus (The Believer)

Blog entries regarding Zillow:
Zillow's CFO Spencer Rascoff's Blog about "what's going on in my work life at Zillow.com"
Their company blog is found here ZillowBlog.

However, some think it is 'duller than expected' (from yardley.ca)
Which highlight Homethinking service (also Beta!)

A great link is to Inman which have had a 'What is Zillow?' contest going prio to the launch. (Yes, Zillow has been quite secretive.. "to develop a new kind of online real estate service..." ). You have to read the posting on this one!

Not only is it interesting that a company is able to raise some $32 million but also the fact that their business model seems (?) to be based only on revenues from advertisment. In other words, maybe the thoughts back in 2000 wasn't that out of the scope... It sure works for Google to release services that attracts enough users in order for business to put in some major dollars for ads.

Update on Sunday, February 12, 2006 at 19:50 by Magnus (The Believer)

The service
Using Zillow you are able to define a street (in the US) and zoom in to street level and get a overlay of the size of the property and the "the Zestimates", which is based on, among others, tax asssesment record.  However, according to blogs the value is less than most people expect...

Update on Thursday, February 16, 2006 at 19:54 by Magnus (The Believer)

The debate goes on..
How does Zillow works, click here.
Including how to stop it evaluating your house.

Finally, a note on Zillow from Nicholas Carr himself that actually matters.