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Monday, May 31, 2010

The Latest from TechCrunch

The Latest from TechCrunch

Link to TechCrunch

US Fund To Invest $250 Million In Skolkovo, The “Russian Silicon Valley”

Posted: 31 May 2010 08:21 AM PDT

Siguler Guff & Company, a US-based private equity firm with over $8.5 billion of assets under management, is investing $250 million in a high-tech hub outside Moscow that is often referred to as Russia’s ‘answer to Silicon Valley’, according to various reports.

Siguler Guff, owner of a subsidiary called Russia Partners, has made the investment public right after a visit to innovation center Skolkovo.

Russian President Dmitry Medvedev recently invited a group of US venture capitalists and entrepreneurs to visit the high-tech hub, which is located in Moscow’s woody suburbs, in an effort to convince them of his plans to spur economic modernization and reduce its dependence on oil and gas by giving birth to a local ‘Silicon Valley’.

Siguler Guff will be pumping a quarter billion dollars in digital infrastructure and IT services for Skolkovo.

The private equity firm this becomes the first foreign investor in Skolkovo, but according to Russian business newspaper Vedomosti, there are currently talks with a number of companies in the United States, Asia and Europe – some names that are dropped include Cisco and Nokia.

Thanks for the heads up, Yakov.

(Images are sketches only, more are available here)

SimilarWeb Changes Name To SimilarGroup, Raises More Funding

Posted: 31 May 2010 07:47 AM PDT

SimilarWeb, which will henceforth be known as SimilarGroup, has raised more funding, bringing the total of capital injected into the company to $1.1 million.

The fresh funding is considered to be the company’s Series A round and will be used to expand its line of products, based on the core technology we previously wrote about:

The backbone of SimilarWeb's technology is based on multiphase analysis, which in plain English means that there are several engines running in the background, analyzing websites based on different mechanics, metrics and workflows. These include: user browsing trends, user ratings, tag analysis, ecosphere analysis, semantic breakdowns, and automated background research.

The company claims to have mapped millions of sites, and adding tens of thousands daily. This means that it will always suggest other sites, regardless of whether the site the user is currently on is a popular one, or one much further down the tail.

The change of the company’s name to SimilarGroup is meant to package all three web plays it now operates: SimilarSites.com, which the company claims to have millions of unique monthly users, SimilarWeb.com, a Firefox add-on, and TopSite.com, a search engine that’s still in beta.

Investors in the new round include Docor, Naftali Investments, Dr. Yossi Vardi, Omer Kaplan & Liron Rose (founders of AfterDownload.com), and a number of private investors.

UK Student Fined By College For Flirting Site — The Zuckerberg Story This Is Not

Posted: 31 May 2010 07:18 AM PDT

It looks like Mark Zuckerberg would not have got Facebook going if he'd started it at a British University. The founder of a UK site integrated with Facebook and Twitter allowing students to flirt has been fined £300 for bringing his university into disrepute. FitFinder only started last month but rapidly expanded to universities across the country. But founder Rich Martell, 21, a final-year computer sciences student at University College London, has been forced to take the site down. UCL said it had been contacted by a number of other universities unhappy about FitFinder. It's fined Martell £300 under UCL's "Disciplinary Code of Bringing the College into Disrepute" and told him that failure to pay the fine would put his degree at risk.

Apple Sold 2 Million iPads In 59 Days

Posted: 31 May 2010 06:05 AM PDT

Apple has just announced that sales of its tablet computer iPad have now topped two million in less than 60 days since its launch on April 3. That’s a whole lot of iPads in under two months, and the company only started shipping units to customers in countries outside the United States last weekend.

The news comes almost a month after Apple announced that it had sold 1 million units.

As previously announced, the iPad will be available in nine more – but still unnamed – countries in July and additional countries later this year.

And they’re still clinging on to the ‘magic’ rhetoric, apparently:

"Customers around the world are experiencing the magic of iPad, and seem to be loving it as much as we do," said Steve Jobs, Apple's CEO. "We appreciate their patience, and are working hard to build enough iPads for everyone."

Apple in a statement said developers have created over 5,000 new apps for iPad to date.

In a week, Jobs will be front and center at Apple's Worldwide Developer's Conference in San Francisco – the man’s keynote starts on Monday 7 June at 10 AM PST.

Are Questions The “Future Of Facebook”?

Posted: 31 May 2010 06:01 AM PDT

About a week ago, word started getting out that Facebook is beta testing a new “killer app” called Facebook Questions. For beta testers, the Questions feature appears in the left-hand column just below Events and Photos. It lets you ask and answer questions to and from your extended circle of friends.

A few days ago, Facebook opened up the private beta further and is now taking applications for anyone who wants to enter the beta. Facebook is taking its Questions product very seriously. “Help us build the future of Facebook,” reads the title of the page.

It puts the Questions product on par with Photos and Events.

As a beta tester, your job will be to ask great questions and provide great answers about your favorite topics. Economics? Skydiving? Relationships? Mexican Restaurants? It’s up to you. You’ll be the first person outside of Facebook to use this product. Your expert writing will be seen by tens of millions of people — including job recruiters. And we’ll bring our best beta testers out to California to tour Facebook headquarters and meet the team.

All you have to do to become a beta tester is submit three sample questions, such as

  • What are the main differences between Google Chrome and Internet Explorer?
  • What are women looking for in a relationship?
  • What methods has BP tried to clean up the oil spill?

In one fell swoop, Facebook is about to take on Yahoo Answers, Google (via recently acquired Aardvark), LinkedIn (notice the reference to job recruiters?), and Quora.  Q&A sites drive massive pageviews. It is an area Facebook can no longer ignore.  People already use Facebook informally to ask questions across their social network from time to time.  It is a type of status update, if you think about it.  The Questions feature will bucket all of these together, spread them across your friends and their friends, and make them searchable.

The advantage Facebook could have in the Q&A space is that to the extent that you find answers from your extended social network, questions can become the start of deeper conversations and spur new relationships. But breaking it out as a separate feature raises some new questions. Will every major type of status update now become its own feature on Facebook (like Photo and Event updates do)? And, if so, what’s next?

We Love You Too: 250+ TechCrunch Anniversary Meetups And Counting

Posted: 31 May 2010 05:50 AM PDT

On June 11, it will be exactly five years since Michael Arrington hit the ‘Publish’ button and introduced the Interwebz to the very first TechCrunch post (which was a brief profile of blog search engine Technorati, which Mike apparently labeled a real-time search engine at the time – what’s old is new again, right?).

We want to celebrate our fifth anniversary with as many people as we can, across the globe. So we are using the new Meetup Everywhere platform that Scott Heiferman announced on stage at TechCrunch Disrupt last week to organize TechCrunch Meetups on June 11 all around the world.

We’re not only celebrating TechCrunch, but the last five years of the Web in general. A lot has happened since June 2005, but the wheel keeps on turning, faster than ever. Sometimes, it’s good to take a breather, look back and celebrate, and then move on.

Either way, we were pleasantly surprised to see how many people jumped on this. On May 28, we counted nearly 150 meetups planned in places like New York City, San Francisco, London, Hyderabad, Bangalore, Seoul, Tel Aviv, Jakarta and Sophia.

Just three days later, another 100 were organized by readers and fans all over the world, so we’re at 252 and counting. We see meetups are being organized from ad Dasma’, Kuwait to Rio De Janeiro, Brazil and St. Petersburg, Russia. Amazing, and humbling.

Yes, we realize you probably just needed yet another excuse to party, but we’re all in awe that you’re willing to do under our banner anyway.

Have fun on our fifth birthday bash for us, will you? And don’t forget to send in pictures.

Stanford Graduates Release Pulse, A Must-Have News App For The iPad

Posted: 31 May 2010 04:28 AM PDT

Akshay Kothari and Ankit Gupta, two Stanford grads who signed up for the Launch Pad class at the University’s Institute of Design (aka d.school), could have hardly chosen a better path to try their hands at startup life. The pair has gone from idea to a (very cool) digital news app for the iPad in just 5 weeks, and they’re just getting started.

The application, called Pulse, is essentially a visually attractive RSS-based news aggregator. On sale for $3.99 (iTunes link), the app is aimed to please both hardcore RSS reader users and people who are willing to pay top dollars for single publication apps.

Pulse’s home screen renders stories from multiple sources on a dynamic mosaic interface. Swipe up and down to see headlines from various sources, and right and left to browse stories from a particular source (thanks for featuring TechCrunch in the demo video, guys).

Tapping on a story takes you to a text view of the article, and lets you switch to a Web view simply by toggling the appropriate button. You can also easily share articles with your friends on Facebook and Twitter or by e-mailing a link to the article. As you can tell from the video embedded below, Pulse works well in both Portrait and Landscape view.

We should note that streaming video in-app is not yet supported due to stability issues, but the makers promise that the next update will come with support for embedded video playing.

Big plus: Pulse can integrate feeds from your Google Reader.

Big minus: you can only add 20 RSS feeds to the reader (up from 10 at launch).

Nevertheless, a must-have (or at the very least, a must-try) app if you have an iPad.

Do not despair if you do not: Kothari and Gupta will expand Pulse to other platforms ‘very soon’, starting with the iPhone.

The Disappearing #flotilla Hashtag May Have A Simple Explanation

Posted: 31 May 2010 04:10 AM PDT

As we know from breaking news right now over 10 people have died after Israeli commandos boarded a convoy of ships carrying aid to Gaza, sparking an international controvery. But we're not going to get into the politics of that situation. What we're interested in is what happened on Twitter today. Because although the convoy has been dubbed a "flotilla" by Twitter users and a large number of people were using the #flotilla hashtag, this disappeared from after trending briefly. The only remaining related trend topic was Israil, the Turkish word for Israel. As a result, a large number of of people are calling out Twitter for "censoring" the #flotilla hashtag. In addition #flotilla was not appearing on Twitter's trending list despite the fact that it is pretty prominent on Google trends. It's causing a huge wave of controversy right now. So what can be found out about what happened to the #flotilla hashtag?

Is Print Media Doomed Worldwide or Just In The US?

Posted: 31 May 2010 02:32 AM PDT

As I walked in the headquarters of the Jawa Pos—the flagship newspaper of one of South East Asia's largest print media empires—I was wondering just how screwed my profession is; globally I mean.

Is the death of print a world-wide certainty or merely an American reality? After all a lot of "old economy" businesses are thriving in emerging markets thanks to Greenfield advantages and rising middle class economics. Spoiler alert: I walked out a few hours later not hugely convinced print is the future but willing to believe that in some places the death-blow of digital might be limited to a mere-crippling. How's that for bullish?

Language difference and a preponderance of statues aside, the Jawa Pos felt like any other newsroom of a large daily. It was almost 9 pm and there was a still a buzzing, frenzied office full of people —some of whom had been there since 5 am, and some of whom would be there until midnight. I sat down with the chief editor, Leak Kustiya (below, second from right), and his deputy at a large, circular table in the middle of the newsroom—the hub of all the department spokes and the spot where the editors make their daily decisions. It could have been a scene out of an Indonesian version of “All the President's Men.”

But when I asked how the paper was responding to the digital age, I was disappointed in the answer: We're protecting print revenues as long as we can. Wow, I thought. Have you learned nothing from the West? Web revenues will never equal print revenues, per ad. But guess what? Future competitors don't care. They are happy to build a business off of ads that are 20% of what you charge, because they are building a digital business without printing presses from the ground up. It's New York Times v. TechCrunch all over again.

Or is it? Every local paper claims superior coverage of local news will save it, but that takes having a young, aggressive staff of reporters—and most of those people were the first to leave when newspapers started their inevitable decline in revenues and death in morale by a million small rounds of layoffs.  I came away from the Jawa Pos thinking they might have a shot largely because of one factor: Hiring practices. In fact, the US media—including blogs like TechCrunch—could learn something from them. The company’s network of more than 150 publications and television stations is designed to avoid the exact problem that plagues old-school media: An overpaid preponderance of senior staff that doesn't do much.

The Jawa Pos will only hire someone if they are under 25 and you must retire when you hit 50—no matter what your seniority. And those slots are coveted positions. Some 400 people apply twice a year, and 100 get interviews. Fifteen are selected, and they enter a rigorous six month training period where they learn all aspects of the reporting trade and editors get plenty of time to see how they can work a beat, generate story ideas, break news and work under pressure. Typically only five get a permanent slot. The logic here, simply put, is that news is a young person's business. It's like American Idol for journalists. In some senses, it's precisely the opposite of the unions most US newsrooms have.

With 15-years experience mostly in old media, I've personally enjoyed the spoils of seniority and years spent paying my dues, although not nearly as much as someone who has been in the business 30 or 40 years. And guess what? There are just some things I did for a story in my youth that come harder to me now.

Dinners three-to-four nights a week, endless 6 a.m. breakfasts with sources, trolling the halls at the largest trade show conferences for a quote or a tip these are all things that give an advantage to younger, hungrier reporters without spouses or families the same way a 20-something entrepreneur has energy and a fresh look on an industry that a grey-haired veteran can't match. Hell, after spending 40-weeks on planes, lost on back-alley streets and dining on mini-bar Pringles around the world, I'm not even sure I'd sign up to write my current book-in-progress again.

Does experience and seniority have advantages in the work place? Of course. That's why the Jawa Pos lets you work there until you are fifty.

Given how many other countries err on the side of being too protective of workers, the somewhat draconian, Logan's Run approach was a surprise to me. But the Jawa Pos's policy ensures that only the best reporters are allowed on staff because getting a job isn't a simple as showing some clips or faking an interview and it ensures that despite clinging to a graying medium of print, the staff itself is always staying young, and hence, in touch with younger readers. It'll be interesting to watch and see if that's enough to beat a broader market certainty that print is dead and digital is the future. And if not? At the least the task of righting the ship will be left to younger blood.

It may sound cruel, but I'd argue it's not nearly as cruel as daily papers going out of business en masse and taking good reporters and editors with them. Maybe the Jawa Pos should look more closely at the mistakes our profession made ten years ago, but this is one big fail safe against complacency already in place.

Wireless Analyst Predicts Mobile LBS Revenues To Reach €420M In Europe By 2015

Posted: 31 May 2010 02:31 AM PDT

According to a new research report from Sweden-based wireless analyst Berg Insight, mobile location-based service revenues in Europe are forecasted to grow from €220 million in 2009 to €420 million in 2015. Berg Insight adds that local search, navigation services and social networking are poised to become the top applications in terms of number of users, which is sort of a give-away as those categories have already proven to be the most popular and fastest-growing among smartphone users worldwide. Berg Insight, which offers business intelligence to the telecom industry and provides analysis to companies such as AT&T, Microsoft, France Telecom, IBM, KPN Mobile, NTT Docomo, Nokia, Telefonica O2, Vodafone Group, Alcatel and Motorola, estimates that one third of all mobile subscribers in Europe will use "some kind of location-enhanced application" on a regular basis by 2015.

Friends Again: Pakistan Court Lifts Ban On Facebook

Posted: 31 May 2010 01:09 AM PDT

On Monday, a Pakistani court ordered authorities to restore access to social networking site Facebook after company officials reportedly apologized for a page deemed offensive to Muslims and removed its contents. The Lahore High Court imposed the nationwide ban almost two weeks ago amid outrage over the page, which encouraged users to post drawings of Muhammad, as many Muslims consider depictions of Islam’s Prophet to be blasphemous.

Earlier today, Justice Ejaz Ahmed Chaudhry of the Lahore High Court reversed the 19 May order to the Pakistani authorities to block the site.

“Restore Facebook. We don’t want to block access to information,” Justice Chaudhry told the court. He also requested the government to develop a system to find out how countries like Saudi Arabia were blocking access to “blasphemous” content on the internet.

According to Bloomberg / BusinessWeek, the ban was lifted after the court was told the company had exchanges with Richard Holbrooke, U.S. special envoy for Afghanistan and Pakistan. Chaudhry Zulfiqar, the lawyer who asked the court to block the popular social networking site on May 19, told a Bloomberg reporter by telephone:

"The counsel for the state provided documents showing correspondence between the Facebook management and Richard Holbrooke. According to those documents, Facebook assured the court no blasphemous material will be available to users in Pakistan."

Pakistani authorities had also blocked access to YouTube for containing “un-Islamic content”, but this ban was at least partially lifted last week.

Bangladesh also decided to block Facebook this weekend but said it would restore access to the site if the offensive material was removed.

More coverage on Reuters, Al Jazeera English, AFP and BBC.

NSFW: Never Mind The Bollocks – Why Carol Bartz Can’t Say What Yahoo Is Now

Posted: 30 May 2010 04:55 PM PDT

It’s Sunday afternoon in San Francisco, and while my American friends are out in the sun, celebrating some holiday or other – is this one Memorial Day or Labor Day or Arbor Day? – I’m confined to my hotel room, finishing the final edits of my book manuscript.

Specifically I’m editing a chapter that begins with me being thrown out of a Starbucks in Chicago for swearing on my cellphone. It was a strange – not unhilarious – episode, and one that caused me to consider the contrasting American and British attitudes towards profanity…

“The concept of 'appropriateness' is much more real to Americans than it is to Brits, despite us being the ones who are supposed to be stuffy and formal. I've noticed it a lot with swearing: while Brits of both genders will be quite happy, among friends, to use the word 'fuck' – as a verb, a noun and adjective or an adverb – a surprising number of Americans blanche at the idea. Rather they'd talk about 'dropping the F bomb' as if four letters were capable of levelling Nagasaki.”

And so it was this past week at TechCrunch Disrupt when Yahoo’s Carol Bartz now-infamously told Mike Arrington to “fuck off”. The remark was clearly something Bartz had prepared in advance, and at a British conference it would have been about as notable as a speaker wearing jeans rather than a suit. But in America the idea that a CEO – a female CEO no less – might resort to comedy foul language is headline news. Literally.

The swearing had the desired effect of course; becoming the meme of the conference – full of sound and fury, signifying nothing – and distracting from the real story: that the CEO of the third most visited site on the web was unable to concisely describe what her company actually does.

Mike highlighted this ridiculousness in a follow up post, putting the swearing controversy into perspective and focussing on the  difference between Bartz’ answer to the question “what is Yahoo?” and Tim Armstrong’s much snappier response for AOL. While Bartz rambled, Armstrong simply said “AOL is planning on being the largest high quality content producer for digital media”.

In Bartz’s defence, Armstrong’s answer was just as meaningless, skirting what AOL is and instead describing what he hopes it will one day become. Armstrong’s answer was accurate in the same way that I could accurately answer the question “Who is Paul Carr?” by saying “Paul Carr aims to be the multi-millionaire author of a slew of best-selling books, written between bouts of pornographic sex with Scarlet Johansson.” If wishing could make it so, Tim.

The truth is, while we may criticise her for her on-stage performance, “what is Yahoo?” is simply not a question that Carol Bartz is able to answer right now. No-one asks Google what it is, even though it does a million different things, because it does one thing – search – better than anyone else in the world. No-one asks Facebook what it does, because it does one thing – connecting friends – better than anyone else in the world. Yahoo doesn’t have that one thing – so while it might be everything, it’s also nothing.

So what should Yahoo’s one thing be?

Not search, obviously. That ship sailed long ago. It also shouldn’t be a portal, or a destination, or any other meaningless construction. Yes, a lot of people have Yahoo as their home page, but those people – by and large – simply don’t know any better. Carol can enthuse as much as she likes about her highly-personalised homepage widgets, but the next generation of Internet users won’t care. Facebook – or whatever comes next – will be their homepage; their content destination and everything in between. There’s nothing more personalised than friendships.

How about mobile? The company recently announced a partnership with Nokia, which sounds exciting but really only serves to underline how non-core mobile is to Yahoo’s competences. Also ‘mobile’ isn’t a service, or a product – rather it’s a way to deliver services or products.

Chat? Flickr? Blogging? Forums? No, no, no. Facebook has won that fight: Flickr might be the photo sharing choice of tool for the technorati, but for the vast majority of Internet users – particularly the young Internet users who Yahoo needs to lock in to guarantee its future – a photo simply doesn’t exist unless it’s uploaded to Facebook. Likewise chat, blogging, forums and all other aspects of user generated content are all ground that Yahoo has already lost, and can’t possibly win back.

What does that leave?

Ask any commentator, or entrepreneur or Investor and they’ll tell you that the hot business to be in right now is curation. There’s simply too much information – much of it user generated – flooding on to the web, and users are crying out for someone to sift and package it all in an intelligent and trustworthy way. That’s what Gilt Groupe or Groupon do for businesses, that’s what services like Quora do for information, that’s what our Twitter friends do for everything else. But while Gilt and Quora and even Twitter are still veritable newborns, Yahoo has been curating content – using real-life, professional human beings to sift through information – since the antediluvian days when Jerry Yang and David Filo posted their first link on “Jerry and David’s Guide to the World Wide Web

The days of employing humans to curate links are over but  there remains one area in which Yahoo’s legacy of curation, audience, trusted brand and significant human resources could come together to do something better than anyone else in the world…



Yahoo’s news product is excellent. Like Google, Yahoo offers a first-rate news aggregator – but unlike Google, the company actually has its own journalists contributing reporting to the mix. The result is a hybrid between aggregation, curation and traditional journalism, which makes Yahoo News arguably the most balanced online news source there is. Moreover, the company has spent years perfecting the use of online video for both news reporting and analysis. Take a few minutes to watch Yahoo Finance or Yahoo Sports and you’ll see some of the best (in terms of both production quality and content) programming available online; easily a match for the best that traditional broadcasting can offer.

And yet right now news and video languish in Yahoo’s overall portfolio; just one more thing that the company offers.

If Yahoo is seriously looking for the one thing that it could be the best in the world at, then news – specifically multi-media news – is a serious contender. CNN might have been the last generation’s “Most Trusted Name In News” but they just don’t have the innate understanding of the web that a company like Yahoo does. For most traditional broadcast or print news outlets, the concept of mixing together original reporting with aggregated content from other sources and the curational wisdom of the online crowds is utterly beyond their comprehension. The closest CNN has got to content aggregation is The Situation Room, while, when it comes to interactivity, even the mighty taxpayer-funded BBC hadn’t got much beyond reading out the occasional viewer email on screen.

Yahoo on the other hand understand innately how people use the web – they have billions of users whose behaviour they track; they know curation and aggregation; they’ve proved they know news and they certainly know video. By combining these resources, and then delivering the results through their hugely visible platform (yes, including mobile), they could blow CNN – and everyone else – out of the water.

At dinner the other night, I joked with a friend (who happens to work at Yahoo) that we might one day see a Yahoo journalist asking a question in the Whitehouse. That need not be a joke. Yahoo has the resources to hire hundreds of journalists – real journalists, not just the hungry children who churn out posts for Associated Content – and set them to work covering serious stories. Then it can integrate that coverage even more tightly with its news aggregation product, and at the same time expand the company’s flagship finance and sports video programming into politics, global affairs, entertainment and everything else that’s going on in the world. Mix in user-generated curation, courtesy of their billions of annual visitors, and you have the makings of a very large and very trusted online news and content network.

Put another way, Tim Armstrong may say that “AOL is planning on being the largest high quality content producer for digital media”, but Yahoo is in a position to actually make that happen.

But of course that’s just one idea. There are a dozen other possible roads that Bartz could take Yahoo, and thanks to the company’s sheer size she can still afford to take the time to explore them all. The critical thing is that she stops trying (and failing) to explain the dozens of things Yahoo does now, and instead settles on the one thing that Yahoo is going to do next. If she can do that then Yahoo might still be thriving in three years time.

If not then it’s — what’s the word, Carol?


Did Amazon Miss The Boat On Social Commerce?

Posted: 30 May 2010 04:30 PM PDT

Few will dispute Amazon's role as current king of the e-commerce space, but this week's TechCrunch Disrupt conference raised an interesting question: Did Amazon miss the boat on social commerce?

At the conference last week in New York, John Caplan, CEO, OpenSky; Rob Kalin, CEO, Etsy; Susan Lyne, CEO, Gilt Groupe and Dan Porter, CEO, OMGPOP sat down to discuss the idea of social commerce and where the marketplace is going in the future in terms of both monetization and socialization. All of the panelists seemed to agree that Amazon will continue to reign supreme in "commodity commerce" but will not be able to lead social commerce. Kalin stated, “I think Amazon is doing a good job monopolizing the boring way of shopping.” Caplan agreed, saying that “Amazon will own commodity commerce. They won’t lead the way to relationship commerce and more and more people are craving relationships in shopping.”

These relationships have captured the attention of millions of paying customers, and in turn, the interest of marquee investors from around the globe. Groupon recently raised a massive round valuing the company at $1.35 billion. Meanwhile, Gilt Groupe is expected to triple revenues this year, and fellow flash sale site Vente-Privee itself is on target to €650m in turnover globally this year.

Other industry giants are thinking through ways to horizontally integrate into the social commerce space. eBay, for example, is aggressively targeting the flash sales market, having recently launched the Fashion Vault, a flash sales site that offers deep discounts on designer items.

Meanwhile Amazon's interest in blending commerce with social dynamics seems flirtatious at best. It dipped its toes into the group- buying dynamics with a lightening deals feature, which allows a limited number of discounts in a given day for users. But the feature is hard to find, and Amazon doesn’t seem to be taking steps to make it more discoverable. Perhaps they are testing the viability of the product, but the industry is moving too fast to take an overly measured approach.

It was also rumored that Amazon was sniffing around Vente-Privee last Fall. Amazon, along with eBay and even Gilt, considered spending $1.5 billion to $4 billion in exchange for a rapid move into the space.

And while an acquisition may make perfect sense for a cash-rich company like Amazon (they have $5 billion in cash and securities), some will argue that they should continue to focus on scaling their traditional online retail business. After all, revenue continues to rise as they continue to sell ridiculous numbers of Kindles, and other products. And the executive team hasn't exactly been complacent, particularly with the recent $1.2 billion acquisition of Zappos.

And yet a dogged focus on "commodity commerce" may prove to be short-sighted. For over a decade, Amazon and eBay have enjoyed the fruits of a market that required a greater focus on scale than on innovation. But the rise of Groupon, Gilt, LivingSocial, Vente Privee and other social e-commerce sites have taught us an undeniable truth that customers are ready for something different. The question is whether Amazon will disrupt its own model in order to preserve its reign as the king.

Photo Credit/Flickr/Frialove

Disclosure: My husband is an employee of Groupon.


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