Everything You Didn't Know About Tech & Media


In 1983, a man named Bill Von Meister started a company called Control Video Corporation. CVC sold one product for $50 a pop. It was called Gameline and it allowed Atari 2600 video game console owners to buy new games over their phone lines for $1 each.

20-six years and countless corporate iterations later, Von Meister’s company is now known by a different name: AOL.

In January 2009, our Henry Blodget wrote that if it was going to survive, that New York York Times had to consider charging its readers for access to its online content. Little did Henry know that the Times was a quarter century ahead of him.

Explains Valleywag:

In 1983, Knight Ridder and AT&T joined to launch videotext service Viewtron. Anybody with a dedicated terminal, phone line, and $12 a month could access news from the Miami Herald and the New York Times, online shopping, banking and food delivery, via a 300-baud modem.

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AOL began as an on-demand video game service in 1983

From Wikipedia:

The CVC GameLine (Control Video Corporation) was a cartridge for the Atari 2600 which could download games using a telephone line.

In the early 1980s a cable pioneer named William von Meister was looking for a way to use his innovative modem transmission technology, recently acquired in ill-fated attempts of sending music to cable companies. Legal issues caused cable providers to step away from the service, leaving Von Meister with a delivery tool and no content.

He then converted his variable speed adaptive modem technology to download games from central servers to individual households. This allowed users to call up a system and, for a fee, download games to their GameLine modules. The game would typically work for 5-10 plays, after which the user would have to connect to GameLine again and pay for another download.

Physically, the GameLine looked like an oversized silver Atari cartridge, it had a phone jack on the side that was used to link the GameLine with the CVC computers. The GameLine module was able to transmit with pulse or tone dialling, this allowed the unit to be versatile in the field. The games on Gameline were all from third-party gamemakers, the largest of which was Imagic. Gameline tried, but failed to obtain licensing agreements from the largest game makers, such as Atari, Activision, Coleco, Mattel, and Parker Brothers.

In 1983, the New York Times charged $12/mo for access to online content

Valleywag explains:

In 1983, Knight Ridder and AT&T joined to launch videotext service Viewtron. Anybody with a dedicated terminal, phone line, and $12 a month could access news from the Miami Herald and the New York Times, online shopping, banking and food delivery, via a 300-baud modem. Norman Morrison, one of the subsidiary's VPs, said: 'We're at the beginning of home information technology. We are dancing naked on the stage of history.' Knight Ridder recorded a loss of $16 million on the project in 1984. Viewtron claimed as many as 3,100 subscribers before Knight Ridder folded the service in 1986. An impressive number considering all that equipment cost between $600 and $900. Bet it would've been more popular if it'd had porn.

Steve Case was not AOL's founder

From Vanity Fair:

At a 1983 Consumer Electronics Show in Las Vegas, Case's brother Dan, who was working for the investment bank Hambrecht & Quist, introduced Steve to the man who had created the Source, William Von Meister. A consummate inventor and entrepreneur, Von Meister was then running Control Video Corporation, whose sole product was something called GameLine, which allowed subscribers to download video games onto their Atari 2600 home game machines. At the 1983 electronics show, Von Meister and his chief technologist, Marc Seriff, took orders for tens of thousands of units. On the spot they also hired Steve Case, aged 25, as a marketing consultant. 'He had no credentials. He was a pizza-marketing guy,' recalled Seriff. But Case was enthusiastic and bright and optimistic; what is more, his brother Dan-or, rather, Dan's firm-had invested in Control Video.

From 'A Word about Ourselves,' published September 18, 1851:

We publish to-day the first number of the New York Daily Times, and we intend to issue it every morning, (Sundays excepted) for an indefinite number of years to come.

We have not entered upon the task of establishing a new daily paper inthis city, without due consideration of its difficulties as well as its encouragements. We understand perfectly, that graet capital, great industry, great patience are indispensable to its succes, and then even with all these, failure is not impossible.

The New York Times didn't print from August 10, 1978 to November 5, 1978.

Printing the NYT costs twice as much as sending every subscriber a free Kindle

From SAI:

According to the Times's Q308 10-Q, the company spends $63 million per quarter on raw materials and $148 million on wages and benefits. We've heard the wages and benefits for just the newsroom are about $200 million per year.

After multiplying the quarterly costs by four and subtracting that $200 million out, a rough estimate for the Times's delivery costs would be $644 million per year.

The Kindle retails for $359. In a recent open letter, Times spokesperson Catherine Mathis wrote: 'We have 830,000 loyal readers who have subscribed to The New York Times for more than two years.' Multiply those numbers together and you get $297 million -- a little less than half as much as $644 million.

And here's the thing: a source with knowledge of the real numbers tells us we're so low in our estimate of the Times's printing costs that we're not even in the ballpark.

Are we trying to say the the New York Times should force all its print subscribers onto the Kindle or else? No. That would kill ad revenues and also, not everyone loves the Kindle.

Facebook was built in a week

From the Harvard Crimson Online on Monday, February 09, 2004:

'After about a week of coding, Zuckerberg launched thefacebook.com last Wednesday afternoon. The website combines elements of a standard House face book with extensive profile features that allow students to search for others in their courses, social organisations and Houses.'

Facebook was originally a Hot Or Not for Harvard called Facemash

From the Harvard Crimson Online on Monday, February 09, 2004:

Zuckerberg said that he hoped the privacy options would help to restore his reputation following student outrage over facemash.com, a website he created in the fall semester.

Using without permission photos from House facebooks, Facemash juxtaposed the pictures of two random Harvard undergraduates and asked users to judge their physical attractiveness. The website drew the ire of students and administrators alike, and Zuckerberg shut it down within days of the initial launch.

Zuckerberg built Facebook without plans to make money

Twitter was its founders' second idea

The Twitter founders paid back their investors after their first idea failed

From a September 2006 post to Twitter CEO Evan William's blog:

I'm very excited to announce something that I've wanted to do forever.

Odeo has been acquired by a new company called Obvious Corp. Obvious Corp was started by myself, with help from long-time collaborator, Biz Stone, and other Odeo people.

Obvious has purchased all the assets of Odeo, Inc.--including odeo.com and twitter.com from the investors and other shareholders and will continue to run these services. Obvious is fully funded by me and, eventually, will create other things, as well.

The Back Story
Obvious is the company I've wanted to start for a very long time--before Odeo and even at the beginning of Pyra Labs. It's great that both of those companies worked out the way they did. I learned some crucial stuff, and doing what I'm doing now wouldn't have been as feasible before. But now I think the time is right.

As I wrote about last year, when I got involved with Odeo, it was at first supposed to be a part-time thing, as an advisor and investor. I got sucked in for numerous reasons, including my own ego, the hype surrounding podcasting, and a strong belief that there was a big opportunity there that I was uniquely suited to help realise in a short amount of time. Not all of those are particularly great reasons to make major life decisions, but some of them I wasn't aware of at the time.

Odeo was a humbling and highly educational experience for me. As I talked about at The Future of Web Apps, I screwed up several things, which hindered that quick success--several of which I knew better than do to beforehand: not focusing the product, building for other people, raising too much money too soon, etc.

But hey, hindsight's 20/20, right?

Odeo had plenty of money in the bank. We could have held out for a couple years. But we had to look at the risk and the opportunity cost. Just because we could spend the money doesn't mean we should. Did it seem like continuing on the path we were on would be the best use of both the money and the time of everyone involved? It did not.

I believe there is a lot of value in what we've built--both Odeo and Twitter--but I did not believe the structure was going to lead to the kind of success we wanted. In the new company, with a new structure, and a new model, I think they are great investments.

The New Model
We are attempting to create a new model for building and running web products. Nearly everyone I know in the Internet business is either at one of the giants, wishing they were at a startup, or at a startup that hopes get bought by a giant.

The models for how these types of companies build and launch products is fairly well-known--although some certainly do it better than others. My theory is that a confluence of factors are paving the way for a different type of company:

  • Sites are cheaper and faster to build
  • The consumer web is increasingly hits-driven and increasingly crowded, which makes it more difficult to predict what's going to work.
  • Sites that do get attention can make money with advertising and/or subscriptions.

    The Obvious model goes something like this:

  • Build things cheaply and rapidly by keeping teams small and self-organised.
  • Leverage technology, know-how, and infrastructure across products (but brand them separately, so they're focused and easy to understand)
  • Use the aggregate attention and user base of the network to gain traction for new services faster than they could gain awareness independently

    As services mature, the goal is to get them to profitability with advertising and/or subscriptions, so they can add to the network (and fund more building).

    When justified by growth, resource needs, and desire of the team, we will spin off growing properties to form their own entities (with outside investment). It's not that we're against investors and acquisitions. That model works great for some things--especially once the idea is proven. But we're also not an incubator, with the goal of hatching companies from everything we build. Some things are perfectly worthwhile but don't need to be a company.

    The New Deal
    Lastly, for me, I just wanted to create a company that would be as much fun and as fulfilling as possible. Fun in work to me means a lot of freedom, and ton of creativity, working with people I respect and like, and pursuing ideas that are just crazy enough to work. I don't want to have to worry about getting buy-in from executives or a board, raising money, worrying about investor's perceptions, or cashing out.

    It may be stupid. It may be naive. It may be selfish and undisciplined. And, frankly, it may not work. All I know is I'm more excited about work than I've been in a long time. And from excitement and bold moves, great things often happen.

  • From Yahoo's media relations site:

    The Web site started out as 'Jerry and David's Guide to the World Wide Web.' Jerry and David soon found they were not alone in wanting a single place to find useful Web sites. Before long, hundreds of people were accessing their guide from well beyond the Stanford trailer. Word spread from friends to what quickly became a significant, loyal audience throughout the closely-knit Internet community. Yahoo! celebrated its first million-hit day in the fall of 1994, translating to almost 100 thousand unique visitors.

    From Yahoo's media relations site:

    The name Yahoo! is an acronym for 'Yet Another Hierarchical Officious Oracle,' but Filo and Yang insist they selected the name because they liked the general definition of a yahoo: 'rude, unsophisticated, uncouth.' Yahoo! itself first resided on Yang's student workstation, 'Akebono,' while the software was lodged on Filo's computer, 'Konishiki' - both named after legendary sumo wrestlers.

    Yahoo raised just $33.8 million though its IPO

    From CNET, April 1996:

    Yahoo reported a loss of $643,000 on sales of $1.4 million during its first 10 months. Its public offering is being managed by Goldman, Sachs and is trading on the NASDAQ market under the symbol YHOO.

    The company late last night announced that it would offer 2.6 million shares at $13 each. Yahoo, one of the most popular search engines on the Internet, expects to bring in $32.5 million from the initial public offering.

    Apple actually had three founders

    From Network World:

    Contrary to popular belief, Apple was cofounded by three individuals -- Steve Jobs, Steve Wozniak and Ronald Wayne. Wayne initially worked with Jobs at Atari and subsequently drew up Apple's first contract, created the first Apple logo and also authored the original Apple I manual. Though he was initially given a 10% stake in the fledgling company, Wayne is not typically mentioned as a cofounder because he sold his stake in the company a mere two weeks after receiving it.

    The first Apple computer cost $666.66

    From Apple's first ad:

    The Apple Computer. A truly complete microcomputer system on a single PC board. Based on the MOS Technology 6502 micro-processor, the Apple also has a built-in video terminal and sockets for 8K bytes of onboard RAM memory. With the addition of a keyboard and video monitor, you'll have an extremely powerful computer system that can be used for anything from developing programs to playing games or running BASIC.

    Combining the computer, video terminal and dynamic memory on a single board has resulted in a large reduction in chip count, which means more reliability and lowered cost. Since the Apple comes fully assembled, tested & burned-in and has a complete power supply on-board, initial set-up is essentially 'hassle-free' and you can be running within minutes. At $666.66 (including 4K bytes RAM!) it opens many new possibilities for users and systems manufacturers.

    There are nine states without Apple Stores

    From Network World:

    Apple has 240 retail stores scattered among nine countries, but not every state in the union has its own. To date, nine states are missing an Apple Store. They are Alaska, Arkansas, Idaho, Montana, North Dakota, South Dakot, Vermont, West Virginia, Wyoming.

    From Valleywag:

    Google cofounder Sergey Brin told public radio's Marketplace that around one per cent of all Google searches go through the 'I'm Feeling Lucky' button. Because the button takes users directly to the top search result, Google doesn't get to show search ads on one per cent of all its searches. That costs the company around $110 million in annual revenue, according to Rapt's Tom Chavez.

    Google was named after a typo

    From Valleywag:

    Stanford student Sean Anderson was the guy who gave Larry Page the name of his search engine and company:

    Sean and Larry were in their office, trying to think up a good name -- something that related to the indexing of an immense amount of data. Sean verbally suggested the word 'googolplex,' and Larry responded verbally with the shortened form, 'googol.' Sean was seated at his computer terminal, so he executed a search of the Internet domain name registry database to see if the newly suggested name was still available for registration and use. Sean is not an infallible speller, and he made the mistake of searching for the name spelled as 'google.com,' which he found to be available.

    From Valleywag:

    Before Larry and Sergey named Google after a typo, Larry Page called his Stanford project BackRub. Blogoscoped thinks the name comes from the way Page's algorithm used backlinks to judge a search result's relevancy. We just think the name is kind of pervy, especially since Google is now a verb. Millions of people, BackRubbing all day long -- it's some kind of geek dream. And yes, by the way, that is Larry Page's hirsute paw.

    The first company to buy and run an ad through Google's automated auction business was a live mail-order lobster store.

    From Wired:

    Google's ads were always plain blocks of text relevant to the search query. But at first, there were two kinds. Ads at the top of the page were sold the old-fashioned way, by a crew of human beings headquartered largely in New York City. Salespeople wooed big customers over dinner, explaining what keywords meant and what the prices were. Advertisers were then billed by the number of user views, or impressions, regardless of whether anyone clicked on the ad. Down the right side were other ads that smaller businesses could buy directly online. The first of these, for live mail-order lobsters, was sold in 2000, just minutes after Google deployed a link reading see your ad here.

    Google tries to forecast which ads will get clicked on based on the day's temperature.

    From SAI:

    Google tries to forecast which ads will get clicked on based on the day's temperature. This makes sense when you start to think about queries like 'ski boots' and 'bikinis.'

    The Washington Post has its own theme song

    Jeff Bezos's father funded Amazon.com with a $300,000 check

    From the New York Times:

    IN 1994, Mr. Bezos was a 30-year-old hedge fund analyst with a degree in computer science and electrical engineering from Princeton when he came up with the idea for an online bookseller. He originally planned to call it Cadabra but later realised that it sounded too much like 'cadaver.' Ultimately, he settled on Amazon, in part because he thought it would convey the vast breadth of books he intended to sell.

    At the conference in Aspen, the moderator of Mr. Bezos's panel introduced him with a bit of Internet lore about how Mr. Bezos had written Amazon's business plan on a laptop computer in the passenger seat of a 1988 Chevy Blazer as his wife, MacKenzie, drove them across the country.

    Reality is a bit less colourful. The couple actually flew from New York to Fort Worth, where they picked up the Blazer - and a $300,000 check - from Mr. Bezos's father, a former engineer at ExxonMobil. And while Ms. Bezos did most of the driving on their way to Bellevue, Wash., where they started their business, she said her husband took turns at the wheel.

    Amazon sold the book in July, 1995.

    From Amazon:

    Douglas Hofstadter, best known for his masterpiece Godel, Escher, Bach: An Eternal Golden Braid, tackles the subject of artificial intelligence and machine learning in his thought-provoking work Fluid Concepts and Creative Analogies, written in conjunction with the Fluid Analogies Research Group at the University of Michigan. Driven to discover whether computers can be made to 'think' like humans, Hofstadter and his colleagues created a variety of computer programs that extrapolate sequences, apply pattern-matching strategies, make analogies, and even act 'creative.' As always, Hofstadter's work requires devotion on the part of the reader, but rewards him with fascinating insights into the nature of both human and machine intelligence.

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