Merry Christmas, Boston. You asked for it, and you got it. A big, publicly traded consumer tech company to put us on the map alongside the Silicon Valley bad boys and uppity New Yorkers. I present to you: TripAdvisor (NASDAQ: TRIP).

Sure, we already have Zipcar (NASDAQ: ZIP), Carbonite (NASDAQ: CARB), iRobot (NASDAQ: IRBT), and privately held but well-established companies like Wayfair, Kayak, and Harmonix. But TripAdvisor is different. Although the online travel firm is not new—it’s been cranking here in Boston for more than a decade—it has become one of the biggest consumer-focused Internet companies on the East Coast, with more than 1,100 employees; 50 million-plus unique visitors a month checking out hotel, restaurant, and travel reviews; and, oh yeah, a market cap north of $3 billion. Yet it hasn’t received as much media coverage or tech-community-adulation as you might expect over the years. (An exception to the former would be this in-depth story by my colleague Wade Roush; the latter would be this commentary from investor Chris Dixon.)

I spoke with TripAdvisor CEO Stephen Kaufer on Wednesday, the day his company officially became independent from Expedia (NASDAQ: EXPE) and started trading on the Nasdaq under its own stock symbol. Here are my takeaways from our chat:

1. TripAdvisor wants the spotlight now. “We have generally been very, very surprised at how little attention the press have paid to TripAdvisor,” Kaufer said. He pointed to his company’s size, number of employees, traffic, revenues, and profits, calling it “the $3 billion company in our own backyard.” On the local training and ecosystem front, he says college interns are turning down offers from Facebook and Google and working at TripAdvisor instead.

2. TripAdvisor is global. Seventy-five percent of the traffic to the company’s branded websites comes from outside the U.S. Think about that for a minute. “We’re almost unchallenged in most countries in the … Next Page »

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It’s probably the quietest Boston-area public offering of the year. But why? Maybe because it’s a spinoff from an already public company, and the deal was announced back in April. Or maybe because New England doesn’t go wild for its consumer-focused tech companies the way some other regions do. Or maybe everyone is just sick of online user reviews (and planning holiday travel).

For whatever reason, tomorrow’s first trading of Newton, MA-based TripAdvisor’s stock on the Nasdaq under the symbol “TRIP”—and the company’s official spinoff from Bellevue, WA-based Expedia (NASDAQ: EXPE)—doesn’t seem to be getting talked about or celebrated that much in local tech circles. And that’s probably just fine with TripAdvisor, which has always been understated when it comes to PR. (Its stock has already been trading under “TRIPV” for the past couple weeks.)

The company, which has more than 1,000 employees (doubled in the past two years), is a major international force in online travel and has been raking in the cash for the better part of a decade. TripAdvisor made $486 million in revenue in 2010 and is on pace for more this year. From what I can tell, the firm has never been particularly chummy with Boston media, marketing, or trade organizations. It does recruit heavily in the area though.

TripAdvisor started in 2000 as a search engine to help people find reviews of travel destinations. The company quickly became a destination in itself for user-generated reviews, and it figured out the lead-generation model before most people had even heard of lead-gen. The company makes money from advertising and referral fees when consumers book flights and hotels through its partner sites. One tidbit: Founding CEO Stephen Kaufer told my colleague Wade last year that TripAdvisor was “a couple months shy of going out of business” in late 2001 before it figured out its revenue model.

In 2004, TripAdvisor was bought by Internet giant IAC (NASDAQ: IACI) and became part of Expedia, which itself was spun out from IAC the following year. TripAdvisor the company has grown to encompass nearly 20 travel sites (including TripAdvisor.com, SeatGuru.com, and BookingBuddy.com) and is expanding aggressively in Europe, China, and other locales.

It sounds like going public should raise TripAdvisor’s international profile, but being independent of Expedia won’t change things much. The companies basically operated separately over the past seven years. One broader trend to watch: whether user-generated content for travel, hotels, restaurants, and other businesses remains a lucrative property to own, or whether it ends up getting lost in the noise of bigger and badder marketing devices of the coming decade.

Locally, there’s an interesting juxtaposition of TripAdvisor with other prominent travel tech firms. Just as TripAdvisor is going independent, Cambridge, MA-based ITA Software is being integrated into Google (NASDAQ: GOOG) as the search giant ramps up its own travel-site capabilities. And Kayak, the Connecticut-based travel meta-search company with a strong Boston presence, filed for an IPO late last year but has been waiting out the market and evolving its own offerings in this super-competitive sector.

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When last we checked with Matt Douglas of Punchbowl, a Framingham, MA, startup known for its party-planning software, he was taking a bloggy swing at Seth Priebatsch of SCVNGR fame. Now he has set his sights on the greeting card industry and the U.S. Postal Service.

Yes, with his startup’s latest product—a way for people to send electronic greeting cards that mimic paper cards in their look, design, and (digital) feel—Douglas looks to be putting another nail in the coffin of the Postal Service, an embattled institution that is losing billions of dollars a year and looks like it might have to cancel its Saturday delivery service.

Reached by phone, Douglas called the broader trend toward paperless bills, books, and documents a “tectonic shift” in the business world, with greeting cards being “the last industry entrenched in paper.” He wondered aloud, “Do you think people growing up on Twitter and Facebook are going to send greeting cards through the mail?” (No, of course not, but I can’t say I have much faith in what they are going to do, either.)

Unbeknownst to Douglas, I am a fan of the Post Office (and record stores, bookstores, and greeting cards). Not the surly counter service, mind you, but the noble essence of what they do, day in and day out, delivering physical stuff to and from the farthest reaches of the country. So I’m gonna rip Douglas a new one here.

Just kidding. I don’t actually like greeting cards. But the rest is true. I’m a dinosaur. Anyway, Punchbowl is one of several consumer-focused Web companies in New England that are making news these days. Here’s a roundup of a few items, leading off with Douglas’s startup:

—Punchbowl isn’t just for parties anymore. The five-year-old company’s new product around digital greeting cards might end up being a major moneymaker. “It’s early days, but this thing could be big,” Douglas says. The startup has grown to a dozen employees (about 18 total people) and has been cash-flow positive and self-sustaining over the past year, he says. The company is in the midst of raising a small financing round as well.

—Priceline.com, based in Norwalk, CT, has released its first iPad app. Like the company’s other products, the free app lets consumers make hotel reservations, often at a steep discount from posted rates. The advantage of the iPad app is it lets you zoom in and out more effectively, to see where the hotels you’re considering are located on city maps. Let it be known, I’m only linking to this iTunes page because it has a photo of William Shatner.

—TripAdvisor, the Newton, MA-based online travel firm, is under investigation by a U.K. regulator for allegedly misleading consumers by claiming its user reviews are genuine, among other things. Travel tech site Tnooz pointed out that TripAdvisor has made a subtle change to its hotel pages in recent weeks: Instead of “Reviews you can trust,” it now calls its user-generated content “Reviews from our community.”

—Springpad, the online notebook and personal assistant app made by Spring Partners of Charlestown, MA, is getting more social through an important integration with Facebook. As my colleague Erin detailed, Springpad now lets consumers aggregate their Facebook friends’ likes and check-ins and connect them to their notebook. The new feature has been rolling out to 2 million users this month.

—OK, this isn’t strictly a consumer app, but consumers are among the end users. Boston-based AisleBuyer, a mobile commerce startup, said it has developed a new tablet app (for iPad and Android) that helps retail employees interact with customers in stores and restaurants. The app includes things like consumer analytics and checkout features and will be available early next year.

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Palo Alto, CA-based VideoGenie, which helps companies collect, manage, and market customer-generated videos, said today that it has raised $2 million in a Series A financing round led by Blumberg Capital. Innovation Endeavors, Google chairman Eric Schmidt’s investing firm, also participated in the round. The company said in an announcement that it will use the funds to “fuel strategic business initiatives, expand the VideoGenie solution set, as well as expand the team to address the company’s rapid growth and accelerate new customer opportunities.”

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As this week’s massive failure of Amazon Web Services cloud-computing infrastructure continued to roil the Web today, a few things were sadly clear. Perhaps most striking of all: Major service providers and websites—companies with enough money and talent to avoid the problem—didn’t spend nearly enough energy planning for the inevitability of a breakdown.

Yes, it’s probably asking too much for many small startups to double up their cloud-computing spending to prepare for what has been, up to now, a very rare outage from one of the biggest players in IT infrastructure. But what about the service providers that harvest money from that long tail of little companies?

Exhibit A is San Francisco-based Heroku, the hugely popular development and hosting platform that relies on Amazon’s service. When Amazon went down, Heroku went with it—taking along more startups than it had to, if the middleman had hedged its bets more effectively. It’s possible that Heroku had plans to move in that direction eventually, but that obviously that hasn’t happened fast enough to avoid a devastating outage.

That’s not to excuse Amazon’s meltdown or spotty communication with affected parties, which has magnified the problem. But remember that Heroku is no scrappy little startup—the company was purchased just a few months ago by Salesforce.com (NYSE: CRM) for more than $200 million.

“For someone like Heroku, which literally hundreds of startups use—Heroku should start thinking about, ‘OK, what can we do to spread the risk?’” says entrepreneur Shyam Subramanyan, whose San Francisco Bay Area startup list.ly was shut down by the outage. “A lot of people are paying them money.”

Scott Sanchez from CloudNod.com pointed to Los Gatos, CA-based Netflix as a good example of a large company making sure it had redundant protection. “They’re charging half the world $9.95 a month. It’s important for them to stay available, and they invested in the proper architecture. And they didn’t have to point any fingers,” Sanchez says.

On the other side of the coin were companies like popular content-aggregation website Reddit, which was still in a bare-bones mode Friday afternoon because of Amazon’s cloud problems. Reddit, … Next Page »

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King of the Web, the social gaming startup led by some big names in Seattle tech, is opening up the private beta I speculated about earlier this month. Passwords were doled out to Twitter and Facebook followers today, and I took a peek under the hood.

From what I can see so far, King of the Web is a humor-oriented social networking site that pits everyone against each other in a quest to amass votes for the best profiles. The site says its “election cycles” are on a monthly basis, and the current cash prize right now is $1,000.

Here’s a screengrab from what looks to be the page of co-founder Nick Hanauer, who really does not need another $1,000 (I presume he’s not eligible to collect). Other top names at King of the Web include former Expedia CEO Rich Barton and Hanauer’s former aQuantive colleagues Maggie Finch and Scott Howe.

I’m reminded right away of Funny or Die, the comedy-video ranking site started by Will Ferrell and friends (although that has professional comedy content). There’s also a bit of pop-culture DNA recalling the meme factory over at Cheezburger Network, and even the ratings feature on plain old YouTube videos.

But it’s not just about comedy. The leader when I checked in was “Pwn Star,” who is actually campaigning on a platform of making female characters in video games better—less sexpot cliché, more butt-kicking awesome. Her page gives good and bad examples of what she’s talking about. The previous “king” was someone who posted a ton of puzzles to their page.

Other people are making it more of a straight-up popularity contest by posting videos of themselves doing funny things. That includes someone’s dog chasing a radio-controlled truck. The site is putting an emphasis on video as a means of getting your face and candidacy out there.

So let’s count the Internet trends being weaved together here: The social graph, gamification, and user-generated content. I’m not sure where to file the cash prizes part, but that’s really timeless.

As for the business model, we’ll have to see about that later. The people running the site are heavy Facebook and Twitter users, and I would guess this really will rely on lots of integration with those portals.

But you have to like the candor of the top guys: Barton told TechFlash last year that “It’s one of those ideas that’s totally binary. It will be huge or it will be nothing.”

As a side note, it’s interesting to see such a big elections angle from a guy like Hanauer. He lost big-time on his last foray in elections, when he vocally came out in support of Initiative 1098, which sought to establish a Washington state income tax on the rich.

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Every once in a while a startup pops up to lay claim to some area of search that Google, inexplicably, has not. (Yes, there are some.) This week it’s SearchReviews, a small Palo Alto, CA-based company that’s tapping the Web’s tens of millions of user-generated reviews of everything from electronic gadgets, to books to travel destinations. Today the company took the wraps off its new desktop search site as well as mobile search apps for iPhones and Android phones.

Founded by serial entrepreneur Ankesh Kumar, SearchReviews has collected more than 40 million reviews from more than 1,000 e-commerce and review sites, from Amazon to Zappos. Looking for an immersion blender that you can use to puree soups and smoothies? SearchReviews can locate 639 reviews (in this case, Home Shopping Network and Chefs Catalog are the richest sources). Searching for the perfect beach hotel for that Cancun vacation? SearchReviews has 1,178 reviews, mostly culled from TripAdvisor.

But more than just aggregating reviews into huge lists, SearchReviews re-indexes all of the reviews it collects to make it easier to answer specific questions, Kumar says. Say you’re wondering which Cancun hotels have the cleanest beaches. Turns out there are 94 reviews that touch specifically on this question.

It was just this sort of query, in fact, that led Kumar to build SearchReviews. “I was going on vacation for a few days with my wife and kids in Napa, and I was searching for hotels with indoor pools,” he says. “I wanted to find out how is the water temperature, how clean is the pool. I found five properties with 200 reviews per property. I don’t have time to read all of those.” Kumar calls SearchReviews a “mini-Google” that’s optimized for such keyword-based searches and saves people from having to search multiple review sites separately.

But it’s not stealing traffic from the sites whose reviews are indexed: the search results at SearchReviews lead users right back to the original source, such as TripAdvisor. The SearchReviews mobile apps add a dimension by allowing users to start a search by scanning a barcode with their smartphone’s camera. You could use this feature at Home Depot, for example, to gather consumer reviews before deciding which gas-fired outdoor grill to buy. There are also social features, such as a button that makes it easy for you to survey your Facebook friends for their own recommendations. “We have built it to be a Quora for shopping, if you like,” says Kumar, who adds that he … Next Page »

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San Francisco-based Bleacher Report, which publishes and syndicates fan-generated sports news online, said yesterday that it has completed a $10.5 million Series C financing round. Crosslink Capital led the round. Bleacher Report previously raised $7.3 million, in a June 2009 round led by Hillsven Capital. The site claims to be the Web’s fifth largest sports media destination, with more than 16 million monthly unique visitors.

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[Updated 3:30 pm, 4/23/10. See below] Zoran Popovic, a computer scientist at the University of Washington, is constructing 3-D virtual recreations of real life. First step, the UW campus; next, the whole world.

Building on a previous program called Photo Tourism that pieces together photos culled from Flickr into virtual 3-D models, PhotoCity is a “capture the flag”-esque game that recreates sections of campuses or city blocks, or, eventually, entire cities from user-generated photos (see reconstructed image, above right).

Photo Tourism was created by UW professor Steve Seitz, Microsoft researcher Richard Szeliski, and former UW graduate student Noah Snavely (now an assistant professor at Cornell University), and in 2006 was licensed to Microsoft. But that program was limited, Popovic said: While they could easily build a 3-D version of the Coliseum based on tourist photos deposited in Flickr, they were never going to get a usable model of the building next to the Coliseum, for example. [The list of people involved with Photo Tourism and PhotoCity has been corrected and updated---Eds.]

Popovic is interested in what he calls “serious games,” computer games that rely on volunteer user input to solve problems too difficult for computational power alone. Usually, players are motivated to help solve a problem by the lure of some kind of online competition. But recreating 3-D versions of city blocks or whole cities adds another layer of challenge—the game has to be compelling enough not only to get people to sit down and play it on their computers, but to take extra digital pictures for the sole purpose of expanding the 3-D world. “It occurred to me that one big problem is that you have to step away from the computer,” Popovic said. “So we wanted to know, is it possible to form a game framework where people go out and do stuff in the real world, instead of just sitting in front of their computers?”

To motivate people to take more pictures for the models, the group (including UW graduate students Kathleen Tuite and Dun-Yu Hsiao) created the PhotoCity game, which can be played on a computer or iPhone. A Google Maps image shows the playing field (so far, game locations include the UW and Cornell campuses, and neighborhoods in Seattle, New York, Boston, Chicago, Santa Barbara, Portland, Washington DC, and Moscow), and “flags” pop up at various points on the rough facade. Players then win these flags by taking enough pictures of that site—say, the northwest corner of UW’s Odegaard library—and then uploading them to the PhotoCity site. Win enough flags and you’ll eventually be the “owner” of the whole building. Other players can steal flags away by taking even more pictures.

The researchers launched the game at the end of March by announcing a competition between UW and Cornell, to see which school’s team could get the most photos of their campus by April 20, but soon other locations were added. Any user can “seed” a new playing field. The cross-country competition is now over, but results are still being analyzed, Popovic said, and the teams are planning a second round to start up April 30.

Popovic (left) is happy with how the game has progressed, but his group’s eventual goal is loftier: to recreate entire cities and, eventually, the world in 3-D from digital pictures. “If you can build a 3-D replica of your world, you can all of a sudden have all different kinds of games in that world,” Popovic said. “The idea is to make a game where the actual world itself is built, and people can actually become avatars and walk around and do … Next Page »

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Last night, we heard from a distinguished panel of executives on the opportunities in online advertising, at a TechFlash event in Seattle. The panel comprised some of the top names in the online ad world:

—Aaron Finn, founder and chairman of AdReady

—Brian McAndrews, former CEO of aQuantive, managing director at Madrona Venture Group

—Jeff Lanctot, managing director of advertiser and publisher solutions at Microsoft

—Charlie Tillinghast, president of MSNBC.com

Just a quick recap here. So what does the future hold? Where are the opportunities for startups, investors, advertisers, and publishers?

It’s clear things have changed a lot in the online-ad world since the heyday of three or four years ago. “It’s very challenging to have a business that’s based just on advertising,” McAndrews said. “For pure consumer Internet businesses, most ought to be thinking about multiple revenue streams.” To this end, he mentioned virtual goods—which I took to mean things like online currencies, electronic cards, and gifts (which are some options that Seattle-based BuddyTV has said it is looking at, for instance).

Finn pointed out that the term “ad-supported” means a lot of different things now. He cited Bellevue, WA-based BlueKai as a startup taking an interesting approach in the exchange of data between advertisers and publishers; it helps websites sell data on their consumers’ demographics or buying behavior to companies that wish to use the information to target their advertising more efficiently.

McAndrews said there are still opportunities in ad infrastructure as well—the technology of ad serving, “demand-side” platforms to help advertisers find places to pitch their wares, and “sell-side” platforms that might help media companies show off what they have to offer. Startups should think about products that are “bolt-ons to the bigger players, like DoubleClick [Google] or Atlas [Microsoft]. But to go head to head with them isn’t smart.” He also said there must be opportunities in working with consumers who are willing to pay hundreds of dollars a month in cable, Internet, and phone bills.

As for the rest of the panel discussion, I can’t be comprehensive. There was a lot of good information for people entrenched in the online advertising and publishing worlds. But here are my high-level takeaways on what the opportunities are out there:

1. Video

In the news world, Tillinghast said 20 percent of MSNBC’s ad revenue comes from video content, and it sounds like it’s growing fast. “Professional video seems to be a real strong point, and a defensible one,” he said.

“In video, content still is king,” McAndrews said. That’s opposed to online text articles, where it’s difficult to get even loyal readers to pay a cent. In entertainment, Hulu has done pretty well with … Next Page »

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Anytime a consumer Internet startup raises $10 million, it’s big news, especially around Seattle these days. So you’d think Avvo would want to tell the world about what it’s doing with all that money, which it just raised in a Series C investment round from DAG Ventures, Benchmark Capital, and Ignition Partners.

But founder and CEO Mark Britton is staying mum about how the $10 million will be used, other than to say it will “expand and enhance” the company’s products. I tried to get him to say what that means. Maybe Avvo will buy each of its two million unique monthly visitors a drink (joking)? Or pick up Cliff Lee’s 2010 pitching contract for the Mariners? No dice. OK, so Avvo, which runs a free legal services website with lawyer ratings, profiles, and a legal advice forum, is trying to maintain a low profile to keep its competitors in the dark.

Is this one of the best funded, but most boring startups in Seattle? No way. Just when I’m about to give up on learning anything revealing about the company and just ask him for a good lawyer joke, Britton launches into a very interesting historical narrative about where Avvo really comes from; the challenges of making consumer ratings work; and his lessons learned from working at Bellevue, WA-based travel site Expedia and observing Seattle-based Amazon from across town.

First, an update on how Avvo is doing, and why it chose to raise money now. Britton says the company is “approaching cash-flow positive quite quickly,” and that he and the company’s board discussed whether to use sales to fund its new initiatives (which shall remain a secret). “We think we have some really big ideas about how we can continue to expand on our success. One of our big initiatives has been sitting on the shelf for a year. We could not help but feel now is the time to pursue these initiatives. We could have financed them with excess cash flow, but as the Web proliferates, there is tremendous opportunity cost” in not expanding with a large new investment, he says. “We’ll meet in the next week, and we’ll put a stake in the ground for when we roll out these different elements.”

Britton has some unique perspective on how the Web has affected the legal industry and consumer behavior. Before founding Avvo, he was senior vice president and general counsel with Expedia—he was there from the early days—and prior to that, he was an attorney with Preston Gates & Ellis (now K&L Gates) when he first moved to Seattle from Washington DC in 1997 (he’s from Montana). Back then, lawyers didn’t even e-mail documents to clients or to each other; today they use document sharing sites on the Web. Due diligence used to be done by calling people on the phone; now it’s done using search engines and Web documents. “While I think the legal profession still has long way to go, the Web has fundamentally changed how lawyers practice law,” Britton says.

The genesis of Avvo came in early 2006. “I saw a very big need for the legal industry to take a significant step into Web 2.0,” he says. “Public records were being digitized, and with that comes lots of transparency. There is an increasing appetite for people to see advertising [online] backed up by objective information. Lawyers are about full disclosure, it’s part of the culture.”

Britton hadn’t really practiced law since 2003, yet he found himself still helping friends and family with their legal issues—in particular, evaluating lawyers. So he had the idea to create an … Next Page »

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TripAdvisor, which was founded 10 years ago this month, is a study in paradoxes:

• The Newton, MA-based company’s family of travel-related websites attracts 35 million unique visitors each month, making it one of the most successful Web properties in the Boston area—yet few people even realize the company is headquartered in New England.

• TripAdvisor’s sites are all about helping consumers plan trips to far-away destinations—but the company’s founders and managers don’t consider themselves travel enthusiasts.

• InterActive Corporation acquired the startup in 2004 made it a unit of Seattle-based Expedia (which was later spun off as an independent company)—yet TripAdvisor operates almost autonomously and is still led by its founding CEO, Stephen Kaufer.

• TripAdvisor’s most valuable asset has long been the millions of hotel and restaurant reviews contributed by its users—yet it’s now branching into the one segment of the travel industry, air travel, where customer opinion (read: chronic dissatisfaction) seems to have little impact on ticket sales or airline operations.

To reconcile all these apparent contradictions, it turns out, you need to look at TripAdvisor’s history. It’s a very long one, at least in Internet years. Remember GeoCities, Excite, Go, Blue Mountain Arts, AltaVista, Snap, or Xoom? Neither do most other people—but they were all among the top 15 most-visited websites back in 2000, when TripAdvisor got its start.

The way Kaufer tells it, TripAdvisor began as a specialized search engine designed to help people locate first-hand reviews of travel destinations, but became a destination unto itself once the founders recognized the value of the reviews being written by its own users and figured out how to make money on them. Kaufer says the company was “a couple of months shy of going out of business” in late 2001 when it finally discovered that it could collect handsome fees whenever readers clicked through to hotels or other businesses to make reservations. That’s still the main source of its revenue today.

Almost since it started, then, TripAdvisor has been a lead-generation engine more than anything else: it attracts visitors with its huge collection of user-generated reviews, then funnels them to travel-industry sites to complete their transactions. “Think of it as a glorious Yellow Pages filled with all the information you might like to find about where you’re going, with contact information, candid photos, and reviews,” Kaufer says.

That means the company’s main challenge has always been building and maintaining a highly scalable website with a very fast back end and … Next Page »

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San Diego-based Metaplace co-founder Ralph Koster announced on his blog today that the venture-backed company is shutting down Metaplace.com, its user-generated content website, effective Jan. 1. Koster, the former chief creative officer at Sony Online, says the Metaplace website, which offers users an online marketplace and platform for building their own social networking rooms “just hasn’t gotten traction.” Koster says the company itself isn’t going away, but he provides no details. The Metaplace website identifies its investors as Waltham, MA-based Charles River Ventures, Palo Alto, CA-based Cresendo Ventures, Marc Andreessen, and Ben Horowitz.

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Oh no you didn’t. Come on, Andrew Chen, you know better than to call out Seattle tech startups for not producing a world-changing consumer Internet company in the past few years. You’re an outsider now, having left Seattle for the San Francisco Bay Area after 2006. And now you’re telling us why you left? Them’s fighting words.

I’m intentionally fanning the flames here, of course. Chen is a startup exec in advertising and social media who used to work at Bellevue, WA-based Revenue Science (now called AudienceScience). His thesis, laid out in a blog post today, is that Seattle’s strong history in retail and commerce—Amazon, Starbucks, Nordstrom, Expedia, Blue Nile, Redfin, and others—still influences the kinds of companies that get started here. But then he takes it further.

“These retail and transactionally-focused businesses are great money-makers, but because they target in-market buyers for a particular good or service, it means that you’re not really building a huge audience,” Chen writes. “The classic way to build a huge audience is to focus on ad-driven businesses in the world of communication or content publishing, and there just aren’t that many of them in Seattle.” (Though he does give props to Ben Huh’s Cheezburger Network.)

“My hypothesis is that Seattle hasn’t produced mass audience consumer products mainly because it’s focused on down-to-earth charge-users-for-a-product types of businesses that are more transactional than community,” Chen continues. “I don’t think that’s a good or bad thing—just as you’ll get more biotech in Boston, there’s a specialization in Seattle around commerce/retail. But if you’re doing a social [user generated content] thing, the Bay area is the best place to be.”

In case you didn’t know, Seattle got sick of being compared to the Bay Area at least five years ago—yet the comparisons keep cropping up, sometimes for good reason. (See recent comments from UW TechTransfer’s Janis Machala, Vulcan Capital’s Steve Hall, and the UW’s Ed Lazowska.) So Chen’s remarks have triggered some heated discussion in the blogosphere today, especially around Seattle.

Is there anything constructive here? In a blog post of his own, entrepreneur and investor Chris DeVore of Seattle-based Founder’s Co-op doesn’t disagree with Chen’s basic premise. Instead he wonders how the community can broaden its impact. “Investment capital is a major input in the startup equation—many of the most successful angel and VC investors in Seattle made their biggest money on Amazon and Starbucks, and investors tend to look for patterns of success that are repeatable. It’s not surprising to see local money flowing toward the same kind of deals that delivered wins in the past,” DeVore writes. “If we want Seattle to be the kind of town that fosters a broader variety of software innovation, what kind of investment culture do we need to create?”

As an observer, I can see why local techies get irritated with cultural and geographic comparisons. And personally, I’ll take Amazon’s long-term business prospects over Twitter’s any day, but that’s not really the point. The point is how Seattle-area innovation and entrepreneurship can keep rising, keep changing the world (across gaming, mobile, and other areas)—and the issue that DeVore raises would seem to be a good place to start.

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Who says consumer websites are dead? Maybe you don’t need the ridiculous traffic of, say, Seattle-based Cheezburger Network (LOLcats) to survive on advertising revenues. Maybe user-generated content around a targeted niche, especially where there are purchasing decisions being made, can work well after all.

That’s the sense I got after talking with Tom Seery, the founder and president of Seattle-based RealSelf. Launched in 2006, RealSelf.com provides information about cosmetic treatments in an online community format that includes user reviews, doctor listings, and expert advice from cosmetic surgeons, dentists, and dermatologists. The treatments in question—a multibillion dollar market worldwide—run the gamut from nose jobs and tummy tucks to orthodontic braces and breast implants.

RealSelf is particularly interesting because it sits at the intersection of a number of fast-growing (but also challenging) areas for startups—social and community review sites, health 2.0, and ad-supported media sites. The company has gained some traction, growing 150 percent year over year in Web traffic; it now gets more than 700,000 unique visitors per month, Seery says. In terms of local startups with a similar strategy for capturing niches of Internet content (but these are not competitors), I’d mention Avvo, TeachStreet, Raveable, Redfin, Urbanspoon, and Zillow.

Like most promising startups, the story of RealSelf began with some important personal and business observations. Seery was a longtime employee of Bellevue, WA-based Expedia (NASDAQ: EXPE), and he saw the competing startup TripAdvisor plug away at hotel reviews and other user-generated ratings until 2004, when IAC (which then owned Expedia) had to buy it. “That was the ‘aha,’” Seery says. He thought, “Where else can we take this empowerment of consumers?”

Around the same time, Seery’s wife was researching a laser cosmetic treatment, and was having a hard time finding trustworthy reviews. So he thought, “Let’s create TripAdvisor for the cosmetic space.” The key adjustment he made was to introduce medical experts to the user community. The challenge there, as with most e-health sites like WebMD and Revolution Health, is that doctors are … Next Page »

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Say you’d like to look up an old friend from high school. You have no idea what happened to him after college, and you can’t find him on Facebook. But you do remember the address of his house down the street from your childhood home. What if there was a Web-based map where you could log on, locate your friend’s old house, and leave a virtual note for him to find?

That’s the scenario that Mark Sherman hopes millions of people will explore at ZoomAtlas, a new social mapping service going public today at O’Reilly Media’s Web 2.0 Expo in New York. Using the site’s tools, you can publicly annotate any location that has some personal meaning to you. That might mean leaving a note for someone, or it might mean reminiscing about the house where you grew up, or a school you attended, or even a restaurant where you had a good meal.

But Sherman, the president, CEO, and main funder of the Cambridge, MA-based startup, thinks finding long-lost acquaintances will be the most compelling use for the site. “There’s nothing on Facebook I’ve seen that allows you to reconnect on the micro level,” he says. “The closest thing you have is groups for school alumni—but that’s not the only place that people want to reconnect from.”

You can think of ZoomAtlas as a cross between Google Maps, Facebook, and Wikipedia, with user-generated missives and memories as the key ingredients that—in theory, at least—will make it more than just another mapping site.

Speaking of Wikipedia, Sherman says Ward Cunningham, the inventor of the first wiki, is a close friend and an advisor to the company. In a short essay posted on the site, Cunningham says ZoomAtlas is “a perfect example” of the collaborative philosophy behind wikis. “We can make an atlas of our world that shows what we know and love, not just what a satellite can see,” Cunningham writes. “We can weave our memories and impressions together using the computer’s ever improving graphics to make a collaborative picture from our eyes and minds and hearts in equal proportion.”

The first thing to try when you visit ZoomAtlas is typing in a specific street address—say, the house where you grew up. You’ll see a satellite image of the neighborhood, with small icons representing the location of each house. Each house icon can be edited in a number of ways: you can move it in case it’s not in the right location on the property, you can give it a different look to correspond to your memory of the place, you can write an article about that address (this is the most Wikipedia-like part), and you can attach short notes for others to find. Right now the maps are 2-D, but in the future, according to Sherman, you’ll be able to go inside houses and annotate individual rooms. “Users are empowered to help detail to the map to the point that every location on Earth, no matter how small, can be defined and have attributes assigned to it,” says Sherman.

But ZoomAtlas is more than just a map-based bulletin board where people can leave notes for long-lost friends, Sherman says. He hopes it will evolve into the locus for any online conversation linked to a place. “It’s a framework on which to allow discussion of locations, whether big or small,” he says. “If there were another Fort Hood incident, God forbid, you could … Next Page »

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It took about a year and a half before I could even begin to understand the I Can Has Cheezburger (or “LOLcats”) phenomenon online. The mundane yet bizarre cat pictures. The misspelled captions. The curious Internet-slang grammar. They were kind of funny, but mostly they were weird—and, at times, even a little annoying.

Yet millions of people flocked to these Web pages, submitting their own photos and captions and commenting on others. The Cheezburger Network, as the company behind it is now called (formerly Pet Holdings), has become a runaway success—an Internet sensation that has spawned a total of 26 humor sites, including FAIL Blog, GraphJam, Engrish Funny, and Emails From Crazy People. The original Cheezburger site hit 1 billion page views (10 billion cat images) earlier this month. And during the first half of 2009, the company raked in seven figures’ worth of revenue from advertising, licensing fees, and sales of merchandise, according to Time magazine.

So what’s its big secret? Why has the Cheezburger Network succeeded where so many other humor sites and blogs continue to toil in obscurity? It took me a while to realize it’s not about luck, or marketing, or the power of certain kinds of humor. There’s some good timing involved, sure, but mostly it’s about the drive and mentality of the company’s leader, Ben Huh.

Huh is often portrayed in the media as a jokester. Photos in articles show him wearing a funny hat or mask, surrounded by stuffed animals, or posing with a cheeseburger. That image is pretty far from the reality, as I understand from reading more about Huh and interviewing him recently. In a Q&A with Advertising Age earlier this week, for instance, Huh emphasized, “I am a business person.” And he shed some very interesting light on his approach to business: “We’ve gotten into situations where we’ve tried to acquire a blog for large sums of money, and they turned us down, and we’ve gone on to compete and we’ve won,” he said. “My final offer is, ‘If you do not do this, we will start a competitive blog, and we will not stop until we win.’”

Clearly, Huh has the killer instinct. He is deeply competitive, but not in an over-the-top way. He could turn out to be the Michael Jordan of consumer Internet startups, though we probably shouldn’t put him in the Hall of Fame just yet. Still, as a promising entrepreneur in his early 30s with a pretty big success already under his belt, his story—and his company’s strategy—is worth a closer look.

Huh first arrived in the Northwest in 2005 to work for Intava, an interactive media startup in Bellevue, WA. Before that, he had graduated from Northwestern University with a degree in journalism during the dot-com bubble. “They were handing out bonuses to college grads because we’d used the Internet once,” he jokes. Huh worked for a number of startups in the Chicago area, including his own Web analytics firm. “I made all the mistakes they say you’ll make,” he says. “I raised too little money, and spent all my time fundraising and not making a product for the market.”

By the time he landed in Seattle, Huh had made it a priority to always work for a company’s CEO, or at least have a dotted-line connection to them, in any job he took. “That was going to teach me more about running a company,” he says. “This is for my career, not for [any particular] job.” Huh had also learned from his previous startups to have a “huge focus on staying profitable.”

In 2007, he came across the I Can Has Cheezburger site, which had been started by a … Next Page »

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Raveable is a year-old Seattle-area startup that launched its hotel review summarization website in May. If there were a Raveable entry for Raveable itself, here’s what it might say:

Ranked 116 out of 340 tech startup websites in Seattle.

The good: Team is ambitious and knowledgeable; large market; useful technology; fun interface; customer focused; strong word of mouth.

The bad: Relatively new; pre-revenue company.

Best kept secret: Gaining attention from angel investors and VCs.

The idea of Raveable is to help leisure travelers quickly make sense of all the user reviews out there on the Web, and choose a hotel that’s right for them. So the company aggregates reviews from sites like TravelPost (Kayak), MyTravelGuide (Priceline), CitySearch, Yahoo Travel, and VirtualTourist, and provides a bullet-point analysis of the pros and cons of each hotel—for 55,000 establishments and counting in the U.S.

The company was founded by Philip Vaughn and Rafik Robeal, former Microsoft veterans with expertise in database applications, data synchronization, and mobile social networking. Raveable grew out of difficulties they’d each had in booking hotels quickly; they found they were sorting through dozens of reviews on multiple sites, without having a top-down view of how various hotels stack up against each other.

“We want to make it really easy to make a decision,” Vaughn says. “We were really frustrated by ‘Everything is 3.5 stars, everything is above average, everything is good.’”

The technology behind their approach is semantic analysis of text—an area that’s been in research for decades, but is increasingly being applied to Web search and corporate software. The goal is for the software to understand the meaning of sentences in user reviews—including the topic, the context, and the sentiment. So if reviews say the rooms are great, beds are comfortable, or parking is expensive, that’s pretty straightforward. But if they say the service could be faster, rooms get cold, the view is sick, or the place is in good need of repairs, say, the software relies on statistical models (trained and updated by the founders) to ascertain whether the sentiment is positive or negative.

Vaughn gives a sense of historical perspective, pointing out that Raveable fits into the trend … Next Page »

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It was a huge week for Hunch, the New York-based startup that’s experimenting with a new approach to answering life’s big and little questions—from “Which savings account should I use?” to “Which science fiction author would I like?” After more than two months in invitation-only preview mode, the site threw open its doors to the public on Monday, and doubled its user base in a single day to some 80,000 registered users.

An excited Caterina Fake, Hunch’s co-founder and chief product officer, told me, “There’s been a ton, a ton, a ton of activity” on Hunch since the public launch—including an unexpected number of users who are contributing to Hunch’s signature collection of questions or “topics.” As I explained in a column on Hunch back in April, each topic steers users toward concrete results after asking 10 or fewer multiple-choice questions. Designing topics—which take the form of decision trees, with each answer leading to a different set of possible outcomes—is fairly challenging, which is why Fake is pleasantly surprised to see as many as 20 percent of visitors trying their hands at it.

Fake, who’s famous as the co-founder of the photo-sharing service Flickr, calls Hunch a “collective knowledge system.” She thinks the high early participation rates can be attributed at least in part to the fact that audiences have been primed by similar online collections of user-generated advice and information, such as Yahoo Answers and Wikipedia.

But my bet is that Hunch is also tapping into something deeper—the fact that there are a lot of people who love giving advice. I’m talking about the congenitally opinionated; the people who, based on the scantiest information, seem to be able to supply definitive recommendations about where their acquaintances should shop or how they should dress or who they should marry. In other lives, these people might have been therapists, advice columnists, or astrologers—but now they can become topic authors on Hunch.

Actually, I’m being a bit tongue in cheek—in reality, as you can see from visiting Hunch and looking at the profiles of contributors, the service is attracting people for all sorts of different reasons. For now, according to Fake, the company isn’t too focused on making money—its staff of 10 is working mainly to make sure that it’s easy to build topics, and that users find useful answers.

While Hunch is based in New York, it’s practically an outpost of Boston, considering that General Catalyst Partners of Cambridge supplied most of its $2 million Series A funding. New York’s Bessemer Venture Partners, which has a Boston office, also participated. Then there’s the fact, in Fake’s words, that “We’re pretty much an MIT shop.” Co-founders Tom Pinckney and Matt Gattis, product designer Hugo Liu, and software engineer Peter Coles all have degrees from MIT. CEO and co-founder Chris Dixon and software engineer Will Gaybrick are from Harvard, which is close enough. And several of the Hunch principals worked together at SiteAdvisor, a Boston-based anti-spyware company acquired by McAfee in 2006. “I’m the only West Coasty type,” Fake says. [Correction 9:20 a.m. June 18, 2009: Polaris Venture Partners is not a Hunch funder, as this paragraph previously stated.]

I spoke at length with Fake on Tuesday. Here’s a condensed version of our conversation.

Xconomy: What’s the activity been like at Hunch this week?

Caterina Fake: Yesterday was obviously a huge day, because of the launch. We got a ton more contributions. We launched with 500 topics, and by the end of the preview period we had 2,500, and I’m going to venture a guess that we had roughly a bajillion added yesterday. We had roughly 40,000 members at the end of the trial period and that roughly doubled in one day yesterday.

X: What unexpected lessons have popped up since you opened up Hunch for preview in March?

CF: The main thing is that we didn’t anticipate we would have as many contributions as we got. That was huge, actually. We weren’t quite ready for the influx of topics, questions, and results. We had 20 percent of our users during the preview period turn out to be contributors. Usually, whenever you build a social media or collective knowledge system like this, like a Yelp or a Wikipedia or a Flickr, you get a different percentage of contributors, and our estimate was that less than 5 percent of Hunch users would become contributors, because [contributing] is fairly complex. It’s a different idea. And when I say 20 percent, I mean that 20 percent of people are contributing topics and questions, which is just a crazy number.

X: What do you think you’re doing with Hunch that draws people in and get them contributing?

CF: I think we’ve hit on something that is at large on the Internet today. We were well set up for this by previous sites such as Yahoo Answers and Wikipedia and the quizzes on Facebook. They’ve all set us up well for people understanding what we’re doing and accepting the idea that collective knowledge systems can be beneficial.

X: Do you think your 20 percent contribution rate will continue now that you’ve opened up Hunch to everyone?

CF: From my experience with Flickr and other products I’ve worked on, including Yahoo Answers, it tends to diminish over time. The contributors at the outset tend to be early adopters, people who … Next Page »

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Amazon.com wants your brain. Well, actually it wants your creative ideas for a television advertisement. The “Your Amazon Ad Contest” announced yesterday is giving customers of the Seattle, WA-based internet retail giant a chance to send in their own ads for the website. Two winners, one picked by Amazon and one voted on by people on the site, will win $10,000 in Amazon.com gift cards each. The ads will be shown in a to-be-announced movie festival and may end up on national television.

“User-generated content is the hallmark of Amazon from the very start,” said Steven Shure, the company’s vice president of global marketing, in an interview. He says he considers the contest an expansion of other opportunities customers have to add to the site—if a bit more formal than book reviews. “We believe customers know and care about Amazon,” he says.

It’s unclear how many and what quality of entries Amazon will receive by the July 17 deadline, which is why there is no guarantee that the ads will appear on TV. “We’re not going to air bad ads,” Shure says. If the same ad is picked by both the Amazon jury and the audience vote, its creator will receive the full $20,000—nothing to sneeze at, between Amazon’s constantly growing range of goods and the current economic climate. The prize money was picked as an “amount that would be meaningful to an individual,” Shure says.

Five finalists will be announced on August 24, and people will be able to vote for the audience prize winner until September 6, with the final winners revealed on September 21. (To submit an idea, go to www.amazon.com/yaac.)

Depending on the success of this contest, it may be repeated, Shure says. It also may be adapted for foreign markets, as a global outlook is the overall focus of Amazon’s marketing, he says. “If something works, we’ll keep trying it.”

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