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Colleges have been receiving a LOT of new applications from students, at both the undergraduate and graduate levels.  I can’t say that I’m surprised.  Whenever there’s a recession, people use this time to increase their IQ, retool their skill sets and/or hideout before (re)entering the workforce.  This is in addition to the general trend of increasing numbers of high school graduates.

Businesses that service the education space, while not recession proof, are in a pretty good position, recession-wise, depending on the nature of the business.  These companies are hurt by the recession, since their customers make budgetary cuts, and thus, may slash certain spending.  However, this issue tends to be a little mitigated because they offer solutions that either save money or produce incremental increases in costs that are mostly offset by the benefit. 

Think about it. 

More students, means more tuition & fees.  Attracting students…and then retaining them is key to making money.    Duh!  After all, a four year student pays more in tuition, fees, books, room and board, than a student who drops out after the first year…and way more than a student who doesn’t go to that particular institution.  You’d be surprised at how many institutions still don’t get this…

Nonetheless, intuitions are generally seeing more applications.  Imagine being in admissions and receiving 75% more apps than last year.  You’d pray for a solution that could help you more efficiently and accurately manage the influx (this is classic benefit > cost).  Companies like Intelliworks make such apps.

So that’s one aspect.  Another is the non-traditional route, where students are doing distance learning or some hybrid (maybe some lecture and some web-based learning) or are “non-traditional” students, like working adults.  Institutions such as Strayer University and the University of Phoenix have long been fixtures in this space.  Others, like K12, hit the primary education space.  They’re content companies…they provide the curriculum. 

Other companies provide the tools to make learning easier and better, thus, enhancing retention rates.  I’m thinking of Blackboard, which provides the software for web-based learning (among other things).  When I was in school, we used a different app, but had the same functionality – profs could post lecture slides on the site; student groups can post their work from a group project, etc.  It made learning a heck of a lot easier.

And think about other companies in the vertical, like Princeton Review.  No doubt that before the increase college applications, there was an increase in college admission test taking.

So, I don’t think that revenues will necessary sky rocket for these companies.  But I do think that, among the companies in a recession, education companies can make a case for being well position in a recession.

The NY Times wrote a piece on Michael Eisner.  One of the dotes came in the form of saying his web-only ventures, namely Prom Queen, which I heard about shortly before launch (he invested in Vuguru, through his company, Tornante), reached over 20 million viewers.  

So, I was thinking, why are all these web properties that I’ve NEVER heard of, having these massive amounts of viewers?  Then, thanks to the manna from heaven compete.com, I checked out the unique visitors of Prom Queen.

Here it is…

I know Compete isn’t guaranteed as it doesn’t count certain traffic, but it’s a decent gauge on the total traffic, give or take a few thousand.  But being a few thousand off here, won’t add up to 20 million.

I tried to write the author, Tim Arango, to inform him of the potential discrepancy, but couldn’t find his email.

This is an article in Venture Beat.  It discusses Adeo Ressi’s views on the current venture capital industry and that all signs are pointing to a need for change in the venture capital business model.   

Check out slide #10.  There are a LOT of me too businesses.  I can’t help but think about Mixx.com.  It was a straight bite off of DIGG.  I couldn’t (still can’t) tell what the better mousetrap is with Mixx, but they might have something up their sleeves in the mid to long term. 

Wired recently blogged about Twitter. A snippet of the blog was about how dealt with its failed whale that plagued it earlier in the year.

The premise is that you find the weakest point in the system, fix it, then, move on to the next weakest point. And so on.

This made me think…Twitter’s servers are uniform…so fixing a weak point, any weak point, is critical to keeping the system/site running and not overloading other servers.

But what if the system isn’t uniform? What if one weak point isn’t as critical to the overall system as another weak point. Then focusing on the unimportant weak point is a distraction.

So let’s say that I make two products, A and B.

A has horrible margins (1%), and while its sells, and the company can’t make enough to meet the demand.

B is hot and has huge margins (60%) and demand is outpacing supply, but not as much as A.

Clearly, A is the weaker of the two as far as meeting demand, but I’d focus A. It yields considerably higher margins and making more will have a much more dramatic impact on results.

So considering utility is critical to fixing the weakest point concept.

I just got this email from what looked to be Wells Fargo.  These jokers have gotten a little more sophisticated.  The email seems to be legit LOOKING since the sender address was wellsfargo@wellsconnect.wellsfargo.com (although, apparently a mask).  But fake was written all over this one.

1.  I don’t have a Wells Fargo account

2. They are asking for private info (social, ATM/PIN…giving the PIN is incredible)

3.  Numerous grammatical errors towards the end

What’s funny is that they even have a link to go to learn more about fraud at the end.

I already notified Wells Fargo of the email.

The Wells Fargo email.

Dear Customer:

As part of our security measures, we regularly screen activity in the credit and debit cards system. During a recent screening, we noticed an issue regarding your account. Your account may have been accessed by an unauthorized third party.

As a precaution, we are requesting additional verification of your payment and personal information in order to protect your Wells Fargo account against unauthorized transactions.

Please send a fax with the following informations to remove any holds on this account. If we will not recive your fax within 24 hours your account will be temporary suspended.

Fax number: 1-609-228-5841

BILLING ADRESS:

-First name :
-Last name :
-SSN :
-Adress :
-City :
-Zipcode :
-Phone number :
-E-mail address :

Account Information:

-Credit/Debit card number(16 digits numbers of your card):
-Expiration Date :
-Code Verification number(3 digits number of the back of your card):
-ATM PIN ( for bank customer verification):

For your security we deactivated your card account.

Sincerely,
Wells Fargo
Online Customer Service

Protect yourself from fraud and identity theft. To learn more, go to
http://wellsfargo.com/privacy_security/fraud_prevention/

If you have a question about your account, please sign on to your secure online banking session at wellsfargo.com, click the Sign On button and then select “Contact Us.”

RealNetworks created software, RealDVD, that allows you to copy a DVD, on up to 5 computers for $30 (can get additional coverage for $20 each).

Studios (Paramount, Warner Brothers, 20^th Century Fox, Sony and Universal) are like, “Screw that!  We’re building a download biz and we’ll be damned if we lose any revenues from DVD sales.”  So studios are trying to establish a moat around this business to protect it…by suing the hell out of RNWK.

RNWK is saying that copying one’s personal collection of DVDs is cool and covered under fair use.

But given the limits software makers place on the number of copies of software licenses, isn’t RealNetworks being hypocritical?

What if I wanted to buy a copy of RNWKs software (any software) and put it on four computers instead of the three limit (mine, my wife’s laptop, her kid sister – who can’t afford it on her own, and my brother’s laptop).

RNWK would probably have a conniption!

Am I missing something???

As a consumer, I’d like RNWK software, since I’m not trying to make money off of this stuff.

I may want to mix some footage of home video of my 10 month old, with scenes from Star Wars and my mom’s amazing piano and vocal performance in 1989 J.  Again, this is for personal usage, so I’d hate to be limited on usage.

Yet, part of me wonders if the studios are going down the wrong path.  These are the same people who said the home entertainment market (i.e., video rentals) would kill its business.  Now the home entertainment market is massive and actually saves the bottom line for movies that either didn’t or couldn’t make it in theatres.  Adams Media Research estimates lost revenues from DVDs will be about $15B if consumers stop buying DVDs and instead copy DVDs from friends or rental outlets like Netflix or Blockbusters.

The other part wonders if the studios are borrowing a page from the old “failed” record label playbook, “sue anything that moves” philosophy.  In that case, when people virally spread music around the net, it actually created buzz for the artist, which reflected in concert ticket and merchandising sales, paid appearances in movies, etc.  The labels didn’t push to get any of that alternative revenue though.  This could drive merchandising, etc.  George Lucas realized this and built a massive empire (no pun intended) out of it.

But I have to admit, about this last point…it generally doesn’t cost as much to produce good music as it does a good movie.  So in theory, you have to recoup more of the cost from DVD than, say music CD sales.

A little bit ago, I wrote a blog on why video games are recession proof. The theory is that people want a nice form of entertainment that, in a recession, is extremely low cost. Think about it. For about $50 for a brand new game, you get unlimited play for the LIFE of the game. The means the cost/play or cost/hour of play is as close to zero as you can get. Compare that to the movies. That cost is $9/play or maybe $4.50/hour. It’s off the chain for most popular concerts.

So why would movies do well in a recession? I have a couple of thoughts…

1. People like going out. In a recession, this truth still holds. And in an environment when there are so many reasons to stay home, it’s still true. For example, the ungodly number of social networks, video chat, AIM and other ways (like the phone) to maintain contact with friends, in addition to movies on demand and the old tried and true, TV, are some of these reasons to stay home. These should not be underestimated.

2. Compared to other forms of entertainment, going to the movies is relatively cheap (assuming that you eat before/after the movies and avoid the concessions, which can eat a whole in your pocket). It always gives you something to talk about afterwards too.

3. The reason to go out to a movie is because something is good. There were so many movies I wanted to see this summer it’s ridiculous (The Hulk and Batman being two of them). This is very crucial. If there were horrid movies at the box office, theatres would not be doing well at all.

What’s interesting is that some theatre chains (the industry is coming off of a period of consolidation) are doing okay. Theoretically, consolidations should be good since you can squeeze synergies out of most of them. With the theatre consolidations, initially, I was wondering whether it would good, since the industry wasn’t doing that well. I kept myself in check, because you can never scold good companies in a bad industry (don’t throw the baby out with the bathwater – type of thing).

Here’s a wonderful blog from Wired.com that gives some stats on the matter.

Valleywag had a piece on The 4 Worst Athlete-Backed Startups of All Time.  In short, they name:

1. WePlay, a youth sports-related social network social.
2. Dunk.net, focused on promoting Shaq’s shoes and other wears, with backers, Shaq, Mike Piazza and DeLisha Milton
3. MVP.com, an e-tailer, with backers John Elway, Michael Jordan and Wayne Gretzky.
4. Chatwithastar.com, a celebrity blog portal, with backers bestselling author Burton Rocks and Billy Wagner

The article made me think about athlete’s and their money. 

It’s interesting in what and how some of the guys put their money in. 

The What

If I had a dime for everytime I heard an athlete wants to do a clothing line or a restaurant, I’d have so much seed money to start two ventures.  One financial advisor, who works closely with Venus and Serena, Donovan McNabb, and a few more, told me he advises his clients that if they’re thinking about investing in a restaurant, they’re better of throwing away the money…it’ll be easier and lot less stress.

The How

Now, this is fascinating…

Many athletes don’t know too much about business so they have advisors (smart move).  But many of them have their friend from around the way as their businesss guy (stupid move).  It’s classic “the blind leading the blind”.  Decisions aren’t made on hard data (like financials, reputation/experience of management team and size/sustainability of the market…you know, the usual cast of characters. 

Instead, it’s how confident does the guy pitching them seem, or how cool does the idea sound, or how can it boost their ego (of either the athlete or the advisor).

Very fascinating…

To their credit, some are getting wiser…thinking about things as a business, and getting the right people in place to help them make decisions.  Look at Jay-Z!

This is hilarious.  What’s funny is that my wife and I just passed a sign promoting Kenny Loggins in concert yesterday. 

One notable remark from “America’s Finest News Service”:

Analysts speculate that the sector-wide layoff was a result of multiple factors, including redundancies in the singing-songwriting division, rising rehab fees that have cost the group millions, and a 34 percent decline in jump-kicks since 2003. In addition, some of Aerosmith’s younger, more ambitious employees, such as Joe Perry, 57, are willing to sing and play an instrument at the same time, often for half the salary.

 Come on!  Gems, I tell you, these are gems.

Here’s the link to the article.

Yahoo is using viral marketing to push its search engine past Google.

Before I go there, I gotta admit, while I’m a free market kind of guy, I also don’t some companies that absolutely dominate a space (errr…unless I own stock in them at a good buy-in price). 

So when I see Google killing the competition in search, I want to see someone else to temper them (I don’t own stock in Google).

So Yahoo’s latest idea is to have other companies build search engines using Yahoo’s search technology, thereby saving these companies the cash necessary to build from scratch (Yahoo estimate: $300 million).  In return, Yahoo will sell ads on through those search engines.

I think it’s brilliant (barring a few possibly filled holes).  You have other developers customizing, and more importantly, marketing your technology, while you generate money through that method.  What it does is instantly make Yahoo bigger without the time, people and money to do it otherwise.

Classic viral marketing, in another form.

 The possible whole are the kinds of financial deals Yahoo would work the companies.  The NYTimes mentions Me.dium as an example of a partner-company that Yahoo has signed up (financial terms are uncertain).  Me.dium is a search engine (not yet fully released) that allows users to see what other websites their friends are going too.  The theory is that people place more weight on what their friends say than through other means.  This is true, for good or bad (if my friends are looking at ill-informed sites, then those are the ones that will probably pop up first in the search).