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This TV box has been staring me in the face — I look at it often — It turns on in the morning and I usually see it near bedtime. Between those bookends of life I stare at a computer screen. There is a break when I look at a smaller form with my Tilt phone. I am a communicator.

My e-mail saved me today when DTV4PC promised me 1,056 live channels on my PC. I have always wanted to watch live re-runs of the Mongolian version of The Price is Right.

If I owned a webhosting firm I would place one of my bets on TV, video hosting, streaming delivering or whatever…Adult purvayors (content providers) took the lead but now we are mainstreaming - streaming everything. This takes just what you want - people that want your stuff so you can deliver their stuff. Heavy demand on bandwidth, servers and everything else that generates revenues. Yes I would bet my bandwidth, technology, personnel, training, advertizing, reputation and all the cost centers to be a prime deliverer.

I want to test drive every car in a 3D, virtual world before I buy. Be able to look down and see where the cup holder is located.

You can either own content, or deliver content.

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Last Wednesday morning’s domainfest 2008 keynote presentation was from the Internet Commerce Association (ICA).  The ICA represents the interests of domain name owners in congress.  My initial “initiation” into the hosting industry was at a 1999 gathering of hosts to discuss legal and regulatory issues that were affecting hosts at the time.  Amazingly, some of those issues remain.

What does the industry gain from participating in the political process?  The short answer is a voice in Congress.  Make no mistake, companies like Amazon, Yahoo, Google and Microsoft are making sure that their voice is heard, and that their concerns about legislation that may affect their hosting businesses are presented to decision makers. The interests of those companies are likely to be significantly different than yours.

I’ve beat the association drum for a long time.  Most hosts I’ve talked to about this issue have argued that nothing has affected their business so far.  To address this argument, I’ve set out four items in a “wish list.”

DMCA reform:  entities and individuals who use the DMCA process should be required to state, under the penalty of perjury, that they have a good faith belief that the material identified in the complaint is infringing.  Currently, many copyright owners shoot first and ask questions later.  This has led to a situation where legitimate websites are shut down, only to demonstrate to the copyright owner that they have a license to use copyrighted information.

Clarification of data retention requirements:  web hosts should not be required to preserve evidence, or potential evidence, in third party litigation without compensation.  Recent revisions to the Federal Rules of Civil Procedure create incentives for third parties to demand that web hosts and other Internet infrastructure providers preserve data without compensating them.  The cost of preserving backup tapes, without recycling them, is, in some cases, enough to significantly squeeze a company’s profit margins.

Privacy / Data Integrity:  any legislation or rulemaking in this area should recognize the rights of web hosts who collect data to use that data in their business, and monetize it, with the consent of their customers.  As the web develops, creative businesses have found ways to enhance the user experience.  Any privacy legislation should not unduly limit these business ideas.

ICANN:  changes to domain name registration policies don’t unduly discriminate against domain name resellers.  Many hosts use cheap domain names to drive business.  ICANN regulations should facilitate internet commerce, not establish a registrar cartel.

In 2007, the masses spoke and demanded access to their email from anywhere. No longer could email access be limited to the desk at the office, the computer at home or an executive with a BlackBerry/Treo. In 2007, 24×7x365 email access from any device became the norm.

In early 2007 in the US, we saw the success of the AT&T Blackjack, T-Mobile Wing and BlackBerry's Pearl become available in fashionable colors. In June, we had the blockbuster success of Apple's iPhone launch. Clearly, the masses had decided that access to their email and the Internet on the go was mandatory.

Our role as service providers should be to foster access to email in any way possible. 2007 might go down in US technology history as the last year that the wireless carriers dictated not only the device, but also the accessibility and affordability of email on the device.

2008 brings many changes to the mobile device world – from Apple's promise of an SDK for the iPhone, to further enhancements and more device permeations in the Windows Mobile world, to the excitement around the Google Android devices.

While some argue that the iPhone is not a "business device," momentum seems to be moving that way as AT&T has recently created "business plans" for the iPhone. With a secure IMAP connection, business owners and IT administrators should rest assured that their users' email is being transmitted securely to an iPhone. While push email is always preferable and always part of the BlackBerry/Windows Mobile/Good Mobile – Microsoft Exchange combination, a business that has their employees connected to their corporate email 24×7x365 sees a giant productivity boost.

All of this is disruptive to Web hosts, IT Administrators and wireless carriers. It is important that we all strategize to create an unhindered email-connected world and making hosted Exchange available to your customers is the easiest way to get started.

The second day of domainfest 2008 concluded with a two hour live auction of domain names.  At the start of today’s auction “sex.la” had the highest minimum required bid (surprise surprise).  This auction in particular, and domainfest in general, got me to thinking about whether domain names should be considered to be real property, similar to real estate, or intellectual property, similar to trademarks and copyrights.  Based on the chats I’ve had in the exhibit hall, and at other conferences, it seems that domainers like the idea of giving domain names some, if not all, of the attributes of real property.  On the other hand, Big IP has been firm in its assertion that domain names should be considered to be intellectual property only.  While using either of these analytical frameworks would add a certain amount of legal certainty, I think that using either framework, exclusive of the other would be a missed opportunity to create law that reflects the particular place that the Internet occupies in society. 

Why do I hold this opinion?  Based on my experience, and that of other lawyers active in the domain space, the law applied to domain name disputes has diverged significantly from the reality of domains today.  While typosquatters and cybersquatters still exist, the era of “nikke.com” has long passed.  Ignoring this, Big IP still treats the domain name space as their own province based on the cybersquatting era. 

To illustrate this, one needs no better than the questions posed to my legal panel this morning.  The vast majority of them dealt with how to deal with requests from the general public to buy a domain name.  Why is this such a pressing legal issue that no fewer than three different permutations of this question were posed to the panelists?  The short answer is that the ACPA, and panel decisions under the UDRP, have given great weight to “excessive” requests for compensation for domain names, particularly when a domain name isn’t being put to “productive” use.  As a result, domain name owners have had to develop elaborate ways of answering questions about the value of their domains without triggering a presumption that they are in violation of the law.  This presumption, and other presumptions, like a parked domain is not being put to productive use, illustrate for me the application of a tortured interpretation of intellectual property law to domain names.

I can’t think of another area of the law where similar presumptions operate.  Using the real estate analogy, do we force a sale for a “reasonable price” on a person who has purchased a parcel of land in anticipation that it might be a good place for a shopping mall? 

Other than as a simple rubric for legal analysis, however, real estate doesn’t work very well for domain names.  The Internet isn’t Oklahoma in the 1880s.  The Internet is more of a public/private partnership in which societal concerns, and facilitation of commerce may need to be given priority over private gain and speculation limited to provide opportunities for more robust use.

As the linchpin of Internet functionality, the law needs to recognize that domain names cannot be subject to one legal theory exclusive of others.  Rather creative judges and legislators must recognize the importance of domain names both as a cradle of Internet innovation, and a natural extension of current trademarks.

 

 

I was struggling writing  a blog about web host valuations - you know the measurements, metrics and other forms of long division (A blog which I will write sometime.)  when I was saved  by news on the radio….and confirmed on Fox…

Web Hosting Companies on sale…it was all over my news.

At noon this date (January 22, 2008) web hosts firms are on sale. Companies had the ability to purchase web host firms today for a price less than yesterday.

This is 100% the truth - and will act as a short primer on valuations, the long division stuff I keep harping on.

About 11AM today the Fed lowered the benchmark overnight lending rate to 3.5 percent from 4.25 percent, the Fed wasn't even going to have a meeting for a week - took everyone for a surprise.

Earthshaking stuff, a 750 basis points (3/4%) cut is massive…check out your cc bill or mortgage in a couple of months and multiply by 100 million. 

How does this web host savings work Tom?  Thought you would never ask.

You see a lot of people (FOR EXAMPLE PURPOSES ONLY —- I DON'T BELIEVE THIS VALUATION)  throw around a value of 1X annual revenues (12 months) as a value for shared hosting companies — they have for quite a while — they will tomorrow.

Now a buyer, borrowing money to buy the web hosting company, has around an 8% savings in juice today over yesterday - money that could be used to pay for the acquisition. For the buyer this is a bargain as he/she is still buying at the 12X tomorrow (Because someone believed value metrics are static) just like they did yesterday — talk about a discount — the web host company is on sale. 

There is a lot involved in valuations — valuations are largely a factor of the ability to use cash (Cash before DAIT, EBITDA etc.) If you need cash to pay debt you can't spend as much up front — lowering valuations. 

But what will the buyer do with that extra money? What will you do with your cc or   mortgage savings? You buy more stuff - the host company buyer buys more hosting companies - supply side economics.

Oh yes, in my opinion web host values will go up due to this.   

Suggested additional reading in this tutorial: The Ultimate EBITDA

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New Commerce Communications

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By now you’ve probably read a thing or two about the typing error at DreamHost that caused the company to accidentally bill customers for roughly $7.5 million earlier this week.

DreamHost, characteristically, was quick to own up to the mistake, and let customers know what happened, through its blog. Of course, with a mistake of this magnitude there’s really no alternative to the honest-apology approach. I can only imagine that trying to keep something like this from getting out would at best cost the company its customers’ trust, and at worst make the whole incident indistinguishable from credit card fraud.

But I wonder how much damage DreamHost might have done to its reputation with this particular gaffe, and more specifically with the form and tone of its apology.

This is particularly interesting to me because of DreamHost’s successful past work in the areas of apologies and their tones. I’ve held up DreamHost in the past as an example of how to go about apologizing for mistakes. After a 2005 outage, it was precisely the way the company blogged about the outage that earned it, in many cases, the appreciation and respect of its customers.

(We ran a story about that situation and its outcome here)

This time, though, the company might have taken the wrong tone in its apology.

It’s a tricky thing, being glib. Particularly in the context of an apology. And there’s a world of difference between informal/forthright, and jokey and (as I’ve seen it described in several places) condescending.

Specifically (and I’ll keep this brief, since this point has already been made elsewhere) the offenses here are: the title “Um, Whoops” and tone (”Ha, the joke is on you! I guess. Um, okay, no, not really, I’m sorry.”), as well as the picture of Homer Simpson accompanying the post seem destined to be taken badly by customers who are understandably upset to find their bank accounts missing considerable sums of money.

This time, it seems, DreamHost’s personal and transparent mode of interacting with customers appears to have misfired.

Customer reaction, even the reaction revealed in the blog’s comment section, served to illustrate the affection DreamHost’s customers had for the company and its methods following its previous problems. The more than 600 comments on Monday’s apology post paint a different picture. While not every comment is negative, and certainly some are supportive and appreciative, the usual DreamHost feel-good atmosphere is decidedly absent. And a good portion of the posts are of the “Jokes are NOT APPROPRIATE in this situation” variety.

It remains to be seen just how significant the impact of this error is on DreamHost’s business, and how many of its customers actually set off in search of another service provider. But it’s certainly a change for me to be pointing out DreamHost as an example of a company doing a bad job of handling a volatile situation.

I can’t even think, off the top of my head, of who I’m going to use next time I need an example of “here’s how you should have done it” from a customer service standpoint. Will I really have to look outside the Web hosting business.

I hate to be glib myself, given the subject matter, but is it really that hard to get this right? Customers appreciate your candor. But they’re not your buddies. Especially when you’re messing with their money.

[Note: and here we’re just talking about the effectiveness of the apology. Of course, there’s the entirely separate issue of just how many major catastrophes necessitating large-scale public apologies are acceptable from a single service provider, and in what span of time.]

In this blog I will review the lessons, dilemmas and occasional miseries associated with hosting a server. I will describe in detail my hosting journey, from conception, through planning and implementation, to (I hope) triumph.

The importance of the web as a tool of self expression is quite obvious. Blogs, social networking and collaboration sites are hugely popular. These sites provide tools to facilitate creativity, and make it easy to contribute without knowledge of programming or design. Yet, the great majority of these sites are run by companies and media organizations, and users are tenants, not landlords. For owning and controlling web pages, one has to use a web hosting provider or use a co-location facility one's own server.

Let's consider the available hosting solutions. Most residential Internet providers, be they dial-up, cable or DSL, provide space for personal web pages at no extra cost. Shared hosting costs a few dollars monthly. Dedicated servers are available for lease at well under a hundred dollars a month. For this amount, one gets (or at least should get) quality hardware, fast and reliable backbone connectivity, server administration tools, site monitoring, technical support, and additional paid services. All these hosting options keep the noise, the heat, and the reboots far away from the user.

So, you must be asking, with so many cheap and easy alternatives around, why do I want to host my own server, rather than lease one? For quite a few reasons, actually. Because hosting my own server is a challenge and a learning experience, because it lets one have things exactly the way I like them, and because it gives me the freedom to mess things up, repeatedly, without serious consequences.

By hosting my own server, I can use any hardware I choose, run any OS I like, upgrade, downgrade, or replace hardware, operating systems and applications as I see fit, as often as I desire, without driving my ISP's technical staff up the wall. I can use any program and every available port, without the risk of violating my service agreement. No one (except the guards who admits me to the co-location facility) will ever know how many times I had to re-install the system . And with all the fidgeting, I will become a better server administrator, learn about the business and technology of hosting, and, last but not least, be able to write about it and learn from the experience of people with a similar interest.

If, like me, you enjoy tinkering, trying out different software packages until you find the one with the right combination of features, stability and usability, then hosting your own server is the best way. Provided, of course, that you can find a colocation facility that is not too far and let's you in 24×7.

I hope you keep up with my progress on this blog, and help me along with comments, suggestions and advice. My web site will be up soon - the URL is www.words2u.net. Feel free to visit the site, and tell me how I am doing. I would love to hear from you.