Our tipster says the stores have been prepped and the promo is set to begin tomorrow. No word on how long it will run so you better get your new phones soon.

Scammers beware though, remember Verizon recently hiked its ETFs on most advanced devices to counter those that were taking advantage of Verizon's genius nature. It's no longer worth it to simply get two new phones, pay the ETF and hawk the other one on eBay for a quick profit.

1. The Answers market is in a land grab mode
Unlike eBay, where there's a general market for goods and you get huge network effects from having a critical mass of buyers and sellers, StackOverflow is all about niches. People who are searching for how to make sql server not go slow? aren't likely to bleed over to how to make swedish meatballs?.

This means that you'll have to fight for every niche. Similar to how general forums would have to fight for every niche. Just because you have a forum site that's big for gamers, you won't have much of an edge attracting foodies.

Finally, it's not like this is a new idea with no other entrants. Look at Yahoo Answers for a site that's still up with a similar model and look at Google Answers for another that couldn't be turned into a worthwhile business and closed.

2. Stack Overflow is like Starbucks
It really isn't. Starbucks can use capital efficiently because they have big capital expenditures securing land, building out stores, and purchasing coffee machines. Where's the capital intensity part of starting another answers site? Adding another server? Coming up with a new design?

It doesn't seem like Stack Overflow can efficiently use big money for anything but advertising itself. Which is kinda funny when the whole business is about getting page views to sell for ad crumbs. It also rings very much like dot-com. Remember when all you had to do was get eyeballs? Oh, it's free? Who cares, let's make it up on volume!

3. Stack Overflow wants to get on Techcrunch
If you're listing the publicity of Stack Overflow raises $10M in Series A by Fancy Schmancy VC as the 3rd pro for taking money, you're bound to be in trouble. The Techcrunch post you're going to get from this is going to scroll off the front page in 4 hours and nobody who's actually going to use your service is going to care.

Do you think people looking for an answer to how do I get the three gold rings in zelda? is going to give a hoot who's money you're burning to provide that forum? Or even that the advertisers you're hoping to attract is going to look at anything else than CPM and demographics for a clue on whether to invest? No.

4. The investor will give you advice, connections, and introductions
They may, but most of the introductions your typical investor is going to give you is how to get you out in 3-5 years. You can find a lot of advice in many places. Rarely is the quality of the advice associated with having money involved of largely superior quality.

And if you end up building something of considerable value, then the connections and introductions will come all by themselves. You usually have to work to fight them off with a stick when things are going great. And getting an intro to Mr. Very Important Person before you have anything of material value is usually not going to give you much anyway.

5. Taking money means big exit or IPO
I'd argue the opposite. When you take money, your exit is bound to be smaller unless you're playing the Web 2.0 lottery game (where a few lucky contestants gets bought for sums completely uncorrelated to business fundamentals). Taking money means giving up equity, which means there'll be less left over if you happen to build something that's valuable enough for others to buy.

And I don't know if you've heard, but the IPO markets aren't all that interested in eyeball companies without the numbers to back them up any more. Doesn't matter how many letters of the alphabet you've used for series whatever funding before you got there.

If you can build a great, profitable business, you'll have all the options to sell or go IPO. Taking VC only complicates that.

6. Taking VC will make your company successful
This one is funny. So if you're not looking to take VC and play the Web 2.0 lottery or aim for an early exit, you're just in it for personal aggrandizement. If you take the money, you just want the best for your business. Spot the disconnect here.

Now even given all this, there's actually still an argument for why Joel should take the money. It'll probably lower the chances of Stack Overflow ultimately succeeding as a long-term sustainable business, but if he has eyed that he has a hot property right now, it'll be a good time to take some money off the table.

A fool and his money will soon be departed applies equally to venture capitalists as it does to everyone else. If Joel and co. can negotiate a deal with Sand Hill road to give them a nice payout as part of the deal, this might well be even better than trying to shop around Stack Overflow for a sale that it's probably premature for.

Much better to take a small slice of the proceeds from a if this just get 1% of the billion dollar advertising market than to take the slice from how much money did you make for the past 12 months? of a strictly look-at-the-books sale.

Go cherries, go!

The feed yard is a place filled with rusted out digital representations of days gone by. It is home to the lost feeds of blogs and corporate sites that once used them diligently to share their ideas.

Like any scrap yard there is money to be made in this yard. It has been quite a surprise to me that a market for dormant or abandoned RSS feeds hasn't sprung up. The opportunity to engage subscribers within a niche without being required to go out and earn those subscribers is has been hanging around for years.

The concept was first introduced to me by a failing at Current TV years ago. They had a master feed http://feeds.feedburner.com/currenttv that I was subscribed to.

For nearly 6 months not a single update came through the feed. Then one day it was firing off 20 updates every few hours. Only the updates weren't for Current TV, they were for items on eBay with current' in the title.

Surprised, I got in touch with a friend that I thought might have contacts at Current to see if their feed had been hijacked. My friend did get me in touch with the right people and we traded a few emails. However, they were less concerned with the content in the feed than they were that it was still active.

At the time their FeedBurner account was currenttv and all other feeds were labeled currenttv/topic. This legacy feed was the only one that was cranking out eBay data so it went under the radar. I'm sure if you click the link for the feed above you were able to see what goodness was left inside.

I'm not sure whether this type of feed yard would lead to genuine commerce or nefarious activities but that isn't for me to decide. My guess is that it would be a gray area shunned by many and praised by others as an opportunity to extract value from failed properties. I think this is a revenue stream worth exploring for the right startup that doesn't mind a little rust.

DISCLOSURE OF MATERIAL CONNECTION: http://cmp.ly/0

The Feed Yard is a post from: TechStartups.com

Talk to most people about ecommerce and the first thing they probably think of is Amazon.com or eBay. Many of these folks feel that Amazon has locked up ecommerce and that eBay is the only site for person-to-person sales the online equivalent of a garage sale or a collectibles fair.

What if I told you that there's still opportunity in ecommerce. That you can create a competitive, profitable business without being threatened by the behemoths? All you have to do is niche yourself. (Yes, over the past few months I've begun to use niche as a verb because finding and serving a niche is a truly active process.)

Case in point: Gluten-Free food.

My son and I were both diagnosed with an allergy to wheat a few years back. Luckily it's nothing serious, but we both feel better when we avoid wheat. Now, try to find bread or pasta without wheat what a PITA! One solution is to buy Gluten-Free products. Gluten is found in wheat and typically if something is Gluten-Free, it's wheat-free. (Note: this is not always the case, but it helps you zero-in on wheat-free products.)

Our local Whole Foods Market has begun to carry lots of wheat-free, gluten-free products but sometimes without warning or an explanation, they'll stop carrying a product. Over the past few months, they've stopped carrying the only pancake mix that didn't taste like cardboard and we haven't been able to find it anywhere on a consistent basis at any of the local markets.

I found it online at glutenfree.com.

See, as more people in the United States have discovered that they have a wheat or gluten allergy, demand has grown. Realizing that it makes less economic sense for your local grocer to carry these products, this enterprising company started selling them online.

Sure, you have to tack on the cost of shipping, but it's better than eating cardboard for breakfast.

And they're not alone. The number of sites that appear in Google search results for Gluten Free and Wheat Free has grown exponentially in the three years since we discovered our allergy.

So, that begs the question: what other trends are we missing that the big e-tailers haven't tackled yet? What untapped niches are available for entrepreneurs to jump into and dominate before that trend reaches its tipping point and the big guys jump in?

Because then, it will be too late.

DISCLOSURE OF MATERIAL CONNECTION: http://cmp.ly/0

There's Riches in the Ecommerce Niches is a post from: TechStartups.com

What I am about to say is because I have been a long time member of the eBay affiliate program, now called eBay Partner Network. It is also of value to anyone that is starting or currently responsible for managing an affiliate program for a company.

My affinity for their brand is the result of being a partner for over three years, my wife being a seller on eBay for nearly ten years, API ease of use and the ability to earn revenue consistently for three years as part of the partner network.

But try as they might, eBay has not driven me away from the partner network . . . yet. They transitioned the program from Commission Junction to an internal program two years ago. The metrics and other monitoring tools suffered as eBay had to get their affiliate legs underneath them. No longer could an affiliate view the extensive reports for click monitoring, referrals, purchases, week to week comps, etc.

Then eBay transformed the program most recently from their CPA (where a partner was paid if their link resulted in a sale) program to a CPC program. This isn't your average CPC program with prices set per click it is based on an algorithm that calculates the quality of the clicks from a given link on a 24 hour basis and assigns them a monetary value.

With this most recent transition to CPC and a program controlled by an algorithm (see: bot) eBay developed a Transparency Team. This team has the task of reaching out to partners that have links that aren't performing in a manner that matches the eBay partner agreement (see: fraudulent).

This is a great idea in theory. However, this team wouldn't need to exist if the eBay partner network returned to the same type of reports that Commission Junction used. Instead, when reinventing the wheel, eBay eliminated any useful monitoring for partners. Thus making participating in their program as opaque as it can be. Metrics that provide a payout, ranking or trip the algorithm to send an automated email stating that a partner is somehow engaged in fraudulent activity are nonexistent.

Ebay has removed any substantive accounting for themselves in the process of monitoring or payouts, the crux of a developer or user becoming an affiliate. Hiding reports from users that are accustomed to them as part of other vendor programs.

The problem is a that is a basic customer service issue that has not been addressed by eBay. Reporting, prompt replies and useful feedback data would allow partners to build better programs that meet eBay's standards and can be crafted to drive more quality traffic to eBay.

This example says it all:

Two months ago I was contacted by the eBay Partner Network Transparency Team (see: bot generated email) stating that in their quest to be transparent I should do the same and that I was failing as a large percentage of my links weren't sending referrer data. Meaning that they don't have a record from these links of the website where the link was displayed and clicked on.

Fair enough to ask me about the links. Not fair or right, accusing someone of not being transparent when all of the click data is hidden away. Not fair is waiting two months to reply back with meaningless data stating that eBay is right. See below:

Ebay sure is right that I have a high non-referrer rate and that bots are removed. I guess I should stop questioning their authority . . . sure. I'd do that if I knew what the criteria were or what bots are being removed. Because for nearly two years they didn't remove a single bot from click data.

I've requested more data from the Transparency Team like IP addresses and user-agents of those clicks. Since I can't track the click that is actually going to eBay without breaking the user-agreement with eBay I will be at their mercy to figure out if the clicks are coming from mobile devices or and some proxy bot that has a lust for finding its way to eBay auctions. Maybe the bot master was blocked by eBay for not being transparent enough when scraping their auctions.

Ebay, this isn't how to be transparent or run a valued affiliate program. If my experience hadn't begun with your program on Commission Junction I wouldn't have such high hopes for how the current partner network could operate. As an affiliate, I want to make money, but I also want eBay to succeed.

DISCLOSURE OF MATERIAL CONNECTION: http://cmp.ly/4

Ebay Partner Network and Transparency is a post from: TechStartups.com

I'm sure this isn't because of me or my post yesterday, Ebay Partner Network and Transparency, but it is welcome news:

Click Filtering (on-going enhancements)

We have had a few reports that some of our affiliates have been experiencing issues with bots inflating their click numbers. We have been working on a few additional click filtering rules to continue to improve our capabilities in this area and ensure click counts in ePN are an accurate representation of valid clicks. We will continue to roll these out in the coming weeks.

We continue to try and improve the tools and reporting that is available for our partners. If you have thoughts or suggestions, please send them to Affiliates-Program-US@ebay.com. While we may not be able to respond to all suggestions personally, we value your input greatly.

That is the last of three sections in an email sent out by eBay today to keep network partners in the loop. And I have to say this is the closest that I have seen them come to taking feedback from their users into consideration (publicly).

Maybe eBay has learned from the great seller revolts after they changed programs and how those got started.

This email doesn't appear to come from the same group that is handling transparency, but regardless it's a step in the right direction especially if eBay can deliver on better reporting. Not only does it create transparency but it will allow partners and developers to see just how effective their efforts are. The bottom line is that opening up all the tracked data will make this a stronger program that can drive revenue for eBay the reason to have an affiliate and developer program.

I'm not sure if I shared how great their shopping API is but it is simply awesome. Like another great API, Twitter, it is very powerful. With better click data that includes IP and user-agent strings eBay could see a growth in full blown applications or ad networks being built from their platform.

You will be able to sleep better at night, I am sure, knowing that I will be sending my thoughts to the Affiliates Program email address. My first thought will be to ask them why it is an Affiiliate address and not a Partner one.

DISCLOSURE OF MATERIAL CONNECTION: http://cmp.ly/4

Ebay Partner Network Click Filtering is a post from: TechStartups.com

Like you, I've been a member and user of PayPal's service for years. They were early to the game and grew accordingly with a product that made buying online drop dead easy. With an exit to eBay they were integrated into a powerful money minting machine.

They also joined a culture of apathy and disdain for those that help them line their pockets developers.

Like their acquirer, PayPal continued to build a mediocre developer community, foster it with partial code samples, limited information and limited support. Now in kindness to PayPal they did begin providing better support a few years ago and are pretty good when it comes to engaging developers on the message boards offering solutions a problem that has plagued eBay for years.

Visit any eBay developer board and you'll find replies that focus on posting in the wrong thread topic instead of offering a solution. It shows the developers that they aren't a priority.

I was looking forward to the release of the brand spanking new PayPal X Developer Network. Hoping that my previous experience wouldn't hold true and that there would be a renewed focus on the developers that are integrating the PayPal gateways and API's into their platforms. But they let me down.

The new developer community site is plagued with broken links, the same old code samples and forums that stopped loading threads on October 28. The intention is there but the execution is hit and miss.

I can forgive them this time, though. Because it appears that their intention is to focus fully on their API implementations and integrate the legacy products like IPN and PDT into a more standardized solution.

Which will help PayPal as it moves toward working with developers to create a wider range of solutions like mobile and in application micro-payments.

Something else of note with the new PayPal X Developer Network is the improved site IA. Thank you to the person(s) that restructured the information and worked with the UI person(s) to highlight what developers want most . . . documentation.

DISCLOSURE OF MATERIAL CONNECTION: http://cmp.ly/0

PayPal X Developer Network Same as it Always Was is a post from: TechStartups.com

Getting started with the site is quite easy, because Outright has recently partnered with a number of financial services: you can import invoices from Freshbooks, receipts from Shoeboxed, your PayPal transaction history, as well as your credit card transactions through a deal with Expensify, which supports 94% of US credit cards. You only have to do this once once you've linked your account, they'll keep automatically updating until you unlink them.

Once you're done with the initial setup, everything on Outright is fairly self-explanatory (which is sort of the idea). The home screen presents you with a chart pitting your costs against your income to give you an at-a-glance look at your business's health. At the top of the screen you'll see tabs for Income, Expenses, Taxes, and Reports, where you can hone in on the transactions you're looking for. Transactions are automatically sorted into different categories (for example, the site knows that your airline's tickets belong under the Travel' category), and you can also generate reports on a per-customer basis, which would be helpful for eBay sellers. Beyond that the application helps with taxes by offering reminders when a deadline is coming up and an estimated amount that you'll have to pay.

Outright isn't as robust as some other financial services out there, but if you're looking to keep things simple it's certainly worth a look. The company was formerly called GoBoostrap.com, but changed its name in conjunction with news of its $2 million funding in February.

Crunch Network: MobileCrunch Mobile Gadgets and Applications, Delivered Daily.

eBay may have sold the majority of Skype earlier this month, but that may not matter if the two original founders of Skype get their way. They have just sued eBay and Skype's new investors for damages that they estimate total a rate of more than $75 million daily.

The case pits eBay against Joltid, which is owned by Skype's founders Janus Friis and Niklas Zennstrom. The issue is around a core piece of peer-to-peer technology utilized in Skype. Joltid seems to have the rights to it and has been seeking to yank the code since at least March. Now, they have filed an injunction and are seeking damages in U.S. District Court.

The lawsuit cites eBay, Silver Lake Partners, and its investment partners, who combined own the popular peer-to-peer calling service. The potential damages cited by the lawsuit are stunning, though. They claim that eBay's altering and misuse of their code could total to more than $75 million per day in damages, as each download of Skype is considered by them to be copyright infringement. If you do the math, that's over $27 billion per year. How they came up with that extraordinary number we cannot even begin to comprehend.

Apparently this is not all that unusual for the Skype founders, according to The New York Times, who reports that they've developed a reputation for litigation, stemming from three lawsuits they filed against an investment banker who represented them in the original Skype sale to eBay.

Tags: ebay, Skype

This website is dedicated to an examination of the law of secondary liability for trademark infringement the idea that someone other than a direct infringer can be liable for infringing another's trademark. Secondary liability for trademark infringement is a relatively recent development in the law, and it has evolved entirely in the courts. . . .

Of all the contexts in which secondary liability has been raised, whether contributory or vicarious, the Internet has by far generated the most interest and attention. The advent of Internet commerce has created new problems for the law to address. On the Internet, buying and selling take place among a seemingly infinite number of parties at lightning speed, making it difficult both to police and remediate infringement. These issues came to light in Tiffany v. eBay, where the court observed that "more than six million new listings are posted on eBay daily, and at any given time, some 100 million listings appear on the website."

I have posted my syllabus for this semester's Cyberspace Law course. This blog post describes the changes from my 2008 course reader. For more on my pedagogical approaches to the course, see my Teaching Cyberlaw article.

Trademark

* Deleted the Tiffany v. eBay case. This is a really rich and fascinating case, but it is really long and I ran out of time to cover it last year. Also, it will be mooted in the not-too-distant future by a Second Circuit opinion.

* Replaced the Playboy v. Netscape and FragranceNet keyword advertising cases with Hearts on Fire v. Blue Nile. The Hearts on Fire case isn't a perfect teaching case, but it discusses use in commerce, likelihood of consumer confusion/initial interest confusion, and a bit of the policy issues. I suspect a number of my Cyberlaw colleagues are teaching the Rescuecom case, but I chose not to. First, it is doctrinally narrow. Second, it is a confusing opinion. Third, I tried to teach it as a last-minute substitution in my IP survey course last semester and was not satisfied with the results. Finally, it involves the less common fact pattern of keyword sales rather than keyword purchases. So I decided that this year the Hearts on Fire case could cover all the necessary issues adequately.

An interesting note: this is the first time in 15 years that I am not teaching a Playboy case in Cyberlaw. Frankly, I had expected to teach at least one Playboy case in Cyberlaw forevermore!

* Added Google's trademark policy. I'm a little surprised it never occurred to me before to include this in my reader.

* Updated my all-new keyword advertising slides from my May presentation.

Copyright

* Deleted the Perfect 10 v. ccBill and Perfect 10 v. Visa cases. I have been struggling with how to teach the Ninth Circuit's Perfect 10 troika of cases for the last couple of years. The troika was over 100 pages of reading that nevertheless left students befuddled after all that work. But I felt constrained because the troika is the most definitive statement of Ninth Circuit law, and it is insightful to see the cases evolve. Nevertheless, I decided that the Amazon case was the most doctrinally significant, so I kept that and ditched the other 2.

* Added Io v. Veoh. To make up for taking out the Perfect 10 cases, I've added this case, which I think is a very clear exposition of a DMCA online safe harbor case.

* Added Parker v. Yahoo. I think this will be a good case to tie together some copyright doctrinal threads as well as provide a nice compare/contrast with the Ticketmaster v. RMG case.

Trespass to Chattels

* Replaced the Computer Fraud & Abuse Act statute with the most recently amended version.

* Included a slide that synthesizes the various trespass to chattel doctrines into a summary format.

Contracts

* Added the Harris v. Blockbuster case. It's a short case that efficiently makes several powerful pedagogical points--including perhaps most importantly, the perils of robo-drafting by copying language from other people's agreements.

Blogs and Social Networking Sites

* Replaced my old materials on blog law and social networking sites law with my most recent talk on both from February.

* Added my Third Wave of Internet Exceptionalism article

* Added the Moreno v. Hanford Sentinel case as an end-of-the-semester review case. As I said when I first blogged on the case, I think "this is one of the most interesting cases I've seen in a while," and I'm really excited about teaching it. I think it will be an excellent issue-spotting opportunity for students as well as a powerful reminder of the power of published words (and how those words can unintentionally affect the people we love).

Change to the Grading Options

My other big change this year is that I am giving students the option to write a wiki entry on a cyberlaw topic as part of their grade. This was inspired by my forthcoming paper on Wikipedia (which you'll hear more about soon). In connection with that paper, I was researching alternative labor sources that could power Wikipedia, and students working as part of a class assignment was one option I explore in the paper (with some reservations). As part of "eating my own dog food" (a terrible idiom that seems to be prevalent in the Silicon Valley), I figured I should give it a try myself. As you can see, the wiki-drafting is optional, not mandatory, so I'll be interested to see how many students choose the option. I'll also be interested to see what happens when the students actually try to submit their work to Wikipedia. I have a mental image of a massive buzzsaw, but perhaps I'm being too cynical.

Sponsor

After examining the companies and their social media activity levels, the brands were ranked on an "engagement scale" where scores ranged from a high of 127 to a low of 1. Those brands that were the most engaged saw their revenue grow over the past year by 18% while the least engaged brands saw losses of negative 6%.

Four "Engagement Profiles"

The study grouped the brands into one of four engagement profiles that related to the number of channels they're involved in and how deep that involvement is. At the top of the list are "mavens," the brands heavily engaged in seven or more social media channels - like Starbucks and Dell, for instance. "Butterflies" are like wannabe "mavens," and are also engaged in seven or more channels but are spread too thin, investing in some channels more so than others. "Selectives" focus on six or fewer channels but engage customers deeply in the ones they've chosen. Finally, there are "wallflowers," or brands engaged in six or fewer channels with below-average engagement; these include companies like McDonalds and BP.

Out of the top 10 brands engaged in social media, the mavens dominate the list. All of the top 10 are mavens and have seen financial success even in a down economy:

1. Starbucks (127)
2. Dell (123)
3. eBay (115)
4. Google (105)
5. Microsoft (103)
6. Thomson Reuters (101)
7. Nike (100)
8. Amazon (88)
9. SAP (86)
10. Tie - Yahoo!/Intel (85)

$$$ Does Social Media Pay? $$$

Of course what everyone really wants to know is whether or not social media actually pays off in terms of dollars and cents. This study seems to show that it does. The most-engaged brands are significantly outperforming their peers across numerous industries in both revenue and profit performance. They have even sustained strong revenue and margin growth in spite of the economy, notes the report.

Whether this correlation is actually a causation cannot be proven with the data on hand, it can only make the implication. Given the large number of companies analyzed and the consistent findings, it seems probable that social media has had a major impact on the companies' financial success.

It's also worth noting that the level of engagement appears to be a factor, too. The companies deeply engaged in fewer channels ("selectives") delivered higher gross and net margins than those only lightly engaged in more channels ("butterflies"). It other words, as the report says, "it's not about doing it all, but doing it right."

The ENGAGEMENTdb Web Site

Along with the complete study, available here, an accompanying web site has also been launched at www.engagementdb.com. On the site, companies can compare their social media efforts with the top 100 cited in the report. They can also opt to detail their social media efforts for inclusion in the online database at the site for future research and study.

This morning I received an invitation to Lazyfeed, which debuted at the TechCrunch event last week. Louis Gray has been playing with it and likes what he sees. Here are my initial impressions. Screen grabs follow.

Pros:

• Zemanta plus Google Alerts plus Posterous equals I don't know. (newcommbiz.com)
• LazyFeed: Get the News, Vids, and Pics You Want Without Even Trying (readwriteweb.com)
• The One Huge Issue That Is Going To Kill Tag-based Reading Systems (cloudave.com)

See and download the full gallery on posterous

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Sponsor

Identity Crisis

As Saul Hansell points out on the New York Times Bits blog, eBay is currently suffering from a major identity crisis. As we reported earlier this year, eBay's attempt to drive users away from auctions and towards fixed-price transactions ('Buy-it-Now') drove a lot of users away from the service, which, after all, used to be all about auctions. As Hansell rightly points out, a lot of this is meant to make users feel more secure about shopping at eBay, but at the same time, the company has also managed to annoy its traditional base of smaller sellers by focusing more on large retailers, while confusing users about what eBay really wants to be (auctions or Amazon competitor?).

Of course, it is also important to note that the current state of the economy also doesn't do eBay any favors. Consumer spending in general is down, and a lot of the items purchased on eBay were often collectibles and other items that were not necessities.

Bloomberg News

Warren Buffett

It turns out that the person who spent $1,680,300 for lunch with the investment guru wasn't a person at all: it was Canadian wealth-management firm Salida Capital. It went public about its purchase Wednesday.

Courtenay Wolfe, Salida's CEO, said that she and a handful of other employees will all share the lunch, which the firm's partners paid for.

We think we will be able to gain invaluable insights from his years of experience and current insights and perspectives, she said. We think lunch with Warren is going to be a once in a lifetime experience.

Ms. Wolfe will have to wait up to a year to get on Buffett's lunch schedule, so isn't yet sure exactly what she'll ask him. The world is changing, she said. But obviously his views of where the world is and where the market environment is going will be of importance.

Will it be worth more than $1.68 million to her firm? That would be the hope, she said.

Ms. Wolfe said the firm was also motivated by making a charitable donation to San Francisco's Glide Foundation, which gets all of the proceeds.

The auctioning was done by a person, who made a decision at the last second (a Buffett tactic?) to bid just $100 more, which gave Salida the final edge. It was $100 well spent, Ms. Wolfe said.

Max Ray Butler, 36, faces up to 60 years in prison for the two felonies under law, but his actual sentence will be influenced by a number of factors, not least a plea agreement with federal prosecutors that was filed under seal Monday.

Wearing an ill-fitting orange jail uniform and round glasses, his hair cut short and neat, the six-foot-plus Butler towered over the burly deputy marshals that brought him into the court room. Once he settled into his seat, he spoke softly and evenly as he answered questions from the judge, frequently drawing admonishments to speak up for the benefit of the court reporter.

I actually did the actions that are relevant in the indictment, and I am guilty, Butler said, at one point.

Butler identified himself in court as Max Vision, the name he gave himself in the 1990s when he became a superstar in the computer security community. At that time Butler was billing himself out as a $100-an-hour computer security consultant, and he earned the respect of his peers for creating and curating an open source library of attack signatures used to detect computer intrusions.

But it turned out Butler was staging recreational hacks on the side, and in 2001 he was sent to federal prison for 18 months for launching a scripted attack that closed security holes on thousands on Pentagon systems, and left backdoors behind for his own use.

While in prison, Butler met more serious criminals, and he was befriended by a professional swindler named Jeffrey Norminton. After his release, Norminton introduced him to an Orange County, California entrepreneur and former bank robber named Chris Aragon.

Butler admitted Monday that he began hacking banks, merchants and other hackers to steal credit card numbers, then sold them to Aragon. Aragon, who's pending trial on related state charges in southern California, turned that stolen data into near-perfect counterfeit cards, complete with holograms, and recruited a crew of shoppers who used the cards to snap up designer merchandise for resale on eBay. Aragon earned at least $1 million in the business, police say.

Butler became a priority to federal law enforcement officials in 2006, when, under the handle Iceman, he staged a brazen takeover of the online carder forums where hackers and fraudsters buy and sell stolen data, fake IDs and specialized underground services.

He hacked into the forums, wiped out their databases, and absorbed their content and membership into his own site, called CardersMarket.

On one of the sites he hacked, called DarkMarket, Butler later discovered that an administrator named Master Splyntr was logging in from an FBI office in Pittsburgh. Butler partnered with a Canadian hacker to try and expose Master Splyntr as a fed, but his claim was largely dismissed in the underground as inter-forum rivalry. DarkMarket went on to become a full-blown undercover FBI operation, and the FBI and Secret Service began an investigation into Iceman.

(I wrote about Butler in the January issue of Wired. I'm now working on a book about him and the carder forums for Crown publishing).

Using informants and some genuine electronic gumshoe work, the feds identified Iceman as Butler about a year later, and arrested him in September 2007 at a corporate apartment he used as a hacking safe house.

When the feds seized Butler's hard drive, they found five terabytes of encrypted data on his harddrive, the government said Monday. They later cracked Butler's crypto, and discovered 1.8 million stolen credit card numbers belonging to 1,000 different banks. The banks tallied the fraudulent charges on the cards at $86.4 million.

But Butler's defense attorney told U.S. District Judge Maurice B. Cohill Jr. Monday that Butler and his associates weren't' responsible for all of the fraudulent charges.

Butler, noted federal public defender, Michael Novara, frequently cracked the computers of other members of the underground, and stole their stuff. Some of the credit card numbers found on Butler's hard drive had been in the hands of cyber thieves before Butler began his hacking spree.

Max is kind of a hacker's hacker, said Novara. There was a lot of stuff on his computer that he was not responsible for, and did not intend to use.

I don't think I ever heard the expression, a hacker's hacker' before, said Judge Cohill, with a smile.

Sources say Butler's plea deal will also wrap up a separate federal case in Virginia, in which Butler is charged with staging the first documented spear phishing attack against employees of a financial institution, gaining access to the corporate network of Capitol One bank.

Butler was calm and attentive at Monday's proceeding, which opened with federal prosecutor Luke Dembosky crossing to the defense table to shake hands with the hacker, who smiled and nodded.

Through his attorney, Butler released a two-paragraph statement following his plea.

Max Vision, known in this case as Max Butler, pled guilty today as a first step toward getting this sad chapter of his life behind him. It is unfortunate that his life circumstances in 2005 led him to participate in this criminal conduct, and he very much regrets doing so, he wrote.

Max has always preferred using his extraordinary computer skills his computer vision for the good of society and the cyber world, and he hopes that he will be given the opportunity in the future to once again don the white hat.

Asked afterward what kind of sentence the government expects for Butler, Dembosky was vague with reporters. Suffice to say, it won't be probation.

See Also:

• Notorious Crime Forum DarkMarket Goes Dark
• Cybercrime Supersite DarkMarket' Was FBI Sting, Documents Confirm
• 56 Arrested in DarkMarket Sting, Says FBI
• One Hacker's Audacious Plan to Rule the Black Market in Stolen Credit Cards
• A White Hat' Goes to Jail

A 1950s ranch-style dollhouse went up on eBay today. One of our favorite sellers, momoderne, is opening the bids at $125, or buy it now for $135. It's not entirely modernist (the drapes and bedroom furniture are traditional remnants) but there are many progressive details such as the walls of glass, the built-in woodwork and room divider, the fireplace, and the pedestal chairs.

Update: Thanks to Anne's comment below, we have the original name: Magnetic Doll House by Child Guidance. TimeWarp Toys says it was produced in 1964.

Hope you'll pardon the big fat Picnik logo above. I'm beta testing a new slideshow feature. What do you think? Do you prefer this preview of eBay listings, or is the standard column of static photos (below) better?

On a good morning there's no alarm clock. I wake up with the sun and do my best to resist the instinctive urge to look at the computer or check email for at least an hour.

My vice of choice isn't coffee, but the Kindle. Its electronic shelves are filled mostly with the business books I read in order to grow up to be a real businessman (before someone figures out I'm not). At any point in time I have about 120 books downloaded. Interspersed between Drucker, Godin, and Buffett are classics like Seneca, which I wish I could read more often but only get to a few times a year.

Automattic, the holding company behind WordPress.com, finally got an office late last year at Pier 38, a beautiful open-floorplan space right on the Embarcadero. It's about a five-minute walk from my apartment, but my preference is to work from home. We're very much a virtual company where everyone primarily works from home (or their coffee shop of choice). The half dozen of us in the Bay Area will go in on Thursdays to have a little company, but six days out of the week the space is usually empty. But we throw some great parties there.

The team communicates mostly via P2, something a little like Twitter but password-protected, with real-time updates and threaded inline conversations. P2 is almost like a chat channel, but structured like a blog, and we've evolved to have almost a dozen across the 40 people at Automattic serving a variety of purposes. We fill any gaps in communication by IRC, Skype, and, in a pinch, email.

In my home office there are two 30-inch monitors a Mac and a PC. They share the same mouse and keyboard using Synergy so I can copy and paste between them. The Mac is mostly used for email and chat, while web stuff and coding happen on the PC. The keyboard is, of course, Dvorak, a more efficient keyboard layout that I switched to 10 years ago. I also have a Sony Z90 laptop with me all the time, whether I'm going overseas or just to the doctor's office. I'm pretty rough on laptops, sometimes going through two a year. At home I like to geek out with home servers and networking, and sometimes find myself doing IT support for family, friends, and colleagues.

One of my favorite programs that we didn't make is RescueTime. Hackers all know that you have to profile before you can optimize, and RescueTime runs in the trap of my computers and tracks how much time I spend on different things, sometimes with surprising results. My biggest time-suck is email, and to help out I wrote a WordPress plugin that filters people into folders based on their email address and priority settings which helps keep my inbox relatively clean. Tim Ferriss, author of The 4-Hour Work Week, advocates checking email only twice a week but that's too severe for me. I'm currently trying Leo Babauta's approach from The Power of Less, which suggests small steps like checking email five set times a day instead of constantly. It's like dieting: People who binge diet gain it all back. That happens to me with email.

Music is my muse and I listen to it all day. There's a lot of jazz Dexter Gordon and Sonny Rollins but I'm also a big fan of Jay-Z, Beyonc, and Method Man. I have an analog Shindo stereo that was hand built in Japan and the aural experience is mind-blowing. When you're coding you really have to be in the zone so I'll listen to a single song over and over on repeat, hundreds of times. It helps me focus. The other best way to focus is to turn off email and instant messenger. The moment that little toaster pops up and says you've got mail you're taken out of the flow. You're juggling variables and functions and layouts and the moment you look away it all falls to the ground it takes you 10 minutes getting it back in the air again.

A big part of my job is to manage the support, usability, and product development people who are scattered all over the globe, from Alabama to Ireland to Bulgaria. My management strategy is centered on hiring: find extremely self-motivated and curious people and then give them the autonomy to succeed. There's no manager looking over anybody's shoulder, so everyone needs to be self-directed. For every person we hire there are hundreds of applications. We always start people on a contract basis first; that way we mutually understand what it's like to work with each other. One of the most important things I look for in rsums is a history of contributing to Open Source projects, because I know these people will understand our ethos.

For four years I was the only developer on Akismet, our anti-spam service. It started because my mom had wanted to start a blog but I was scared she'd be bombarded by spam for Viagra and worse, think that's what I looked at all day. We finally added a second engineer to the project at the end of 2008, which was weird for me but was necessary for growth, especially as I'm pulled in more and more directions.

I go out for lunch whenever I can, which fits well with my preference for no meetings before 11 AM. There's something very personal about sharing food with someone; it's a deeper connection than shaking hands in a boardroom. Often when I'm in town I'll have lunch with Toni Schneider, my CEO. He and I get along super well which is one of the reasons I think the business has worked. He brings gravitas because he's a digital native but also has great startup experience including being the CEO of Oddpost, a webmail company Yahoo acquired in 2004. Sometimes we'll go to lunch at 12:30 and stay until 5.

In general, I'm pretty darn disorganized, late as often as not, and really bad at keeping a schedule. My PA is now focusing on office and event tasks so I'm in the market for someone new. Last year I was on the road 212 days and clocked 175,000 miles, which is seven times around the globe (according to Dopplr, a great travel journal I use). The bulk of my travel is to WordCamps, which are educational and networking events that celebrate blogging. Automattic held our first annual WordCamp in San Francisco in 2006, thrown together just a few weeks before the event happened. Now they've exploded all over the world and I've been to over 30 community-organized events from South Africa to the Philippines. I say they're a great bargain: a full day of quality speakers, BBQ lunch, a cool t-shirt, and a party for $25. We just wrapped the largest WordCamp ever here in San Francisco with over 700 people. Though I'd love to, if I went to every WordCamp I wouldn't have any time to actually build WordPress, so I'm cutting back and trying to go to every other one. They are great fun, though; it's a chance to be a rockstar for a day. In the Philippines after the conference was done I stayed almost two hours afterward taking pictures and autographing badges and laptops. I've even been asked to sign body parts. Really.

To document my experiences when I travel I use my Nikon D3 camera. My photos are autobiographical my memory is so bad (and the travel pretty grueling) that I'll forget everything about a trip, and the photos help trigger my memories. On the plane ride home I'll process and edit the photos as a narrative of each day, a visual diary. On my trip to Vietnam last February I took 2-3 thousand photos. I've heard that the difference between an amateur photographer and a pro is that the amateur shows you everything they shoot. I'm somewhere in between I'll post maybe a quarter of what I take.

I used to think constantly about building an audience for my blog but now my attitude is that if I'm not blogging for myself it's not worth it. I don't force myself to post once a day, I just do it when it feels natural. Sometimes people complain Write more about WordPress; we don't want to see photos of kids in Vietnam but I don't really care. For my 25th birthday in January I published a list of 2009 goals on my blog. It included learning Spanish, learning how to cook, and posting 10,000 photos. Cooking has been a total fail so far; I go out for every meal. If you open my refrigerator you'll find Girl Scout cookies and barbecue sauce. Photos are blazing along, half-way through the year and I've taken 20,000 photos and posted about 4,000 of them.

My blog is fortunate enough to get lot of comments and I read and manually approve each one. I think the broken windows theory a broken window or graffiti in a neighborhood begets more of the same applies online. I'll happily approve a comment from someone who completely disagrees with everything I believe in, but if I get a positive comment with a curse word in it I'll edit it out. My blog is like my living room: If someone was acting out in my house, I'd ask that person to leave.
I look at our numbers every day, usually after 5 PM PST when GMT goes into a new day. We have an internal dashboard where we track 500 to 600 statistics about everything from how often people are logging in to WordPress.com to how many words they're pressing per day. Almost all of the numbers are real-time.

I do my best work mid-morning and super late at night, from one to five in the morning. Some people don't need sleep, but I actually need a ton. I just sleep all the time, catching naps in the afternoon or a 20-minute snooze in the office. Our business is 24 hours folks in Australia start their day around 4 PM my time and our guys and girls in Europe get going around midnight. Sometimes I'll go out at night, come home from the bar at 2 or 3 AM, and then go back to work.

For WordPress we're trying to set up a community that will be around 10 to 30 years from now, one that's independent from the whims of the market. My role is somewhat like Linus for Linux or Shuttleworth for Ubuntu, affectionately referred to as BDFL, and it's my responsibility to meet as many users as possible and direct the software in a way that reflects their interest. Last year I probably met 5,000 or 6,000 WordPress users, about half of them who make their living from it. We want to be like Google, eBay, Amazon they all enable other people to make far more money than the company captures. That's ultimately what we're trying to do, we're trying to create a movement.

My Mom started a blog a couple of months ago. Six years into this, and we finally made it easy enough for my Mom to use. (She hates it when I say that.)

If you ask questions in the comments, I'll do my best to answer them.

The TOSBack.org site was, in part, an outgrowth of Facebook's change in its service agreement in February that seemingly allowed the company to use its members' content forever. Facebook changed its terms after an internet revolution of sorts.

The new tracker, chronicling 44 internet companies, shows terms of service agreements side by side with older and new versions, and highlights what is new.

The companies include Facebook, Google,Wordpress, Data.gov, YouTube, Apple, GoDaddy and, among others, eBay.

See Also:

• Experts Say MySpace Suicide Indictment Sets Scary' Legal
• AT&T, Comcast Deny RIAA Three-Strikes' Participation
• Comcast Deflects User's Questions - Updated
• AT&T Revokes Right to Disconnect Based on Political Speech
• Does Your ISP Sell Your Internet History? Help 27B Investigate
• Adware Maker Says Facebook Security Warning False and

Get Started

Our Sandbox environment is available now, for you to build and test your application. Find out more about the opportunity and how to get started at http://developer.ebay.com/products/selling-manager-applications/

You can also see the full program guidelines on the developer site, located at the URL below:
http://www.developer.ebay.com/products/selling-manager-applications/program/

Launch with us this Summer!

The public release of Selling Manager Applications to the eBay seller community will be in August 2009. We are continuing to accept applications for our summer release. If you are interested in launching with us this summer, please contact us to initiate your Business Review. We will be locking in our launch partners by mid-June.

Upcoming Changes

• The eBay Managed Billing Platform will be released in late June. Developers should expect disruption to production access in late June and disruption to sandbox access in early July. All developers will need to integrate with the managed billing platform after the release is complete. The key changes include:
• • Setting up billing plans for applications
  • Updates to the OEPI Interface
• In June, documentation will be provided to assist developers with these changes.
• The public release of Selling Manager Applications to the eBay seller community will be in August 2009.

For more information and latest status on the Selling Manager Applications platform, please see the Selling Manager Applications User Guide at:
http://developer.ebay.com/DevZone/selling-manager-applications/Concepts/SellingManagerApps_APIGuide.html

FIRST FLOOR

KITCHEN

FAMILY ROOM

DINING ROOM

LIVING ROOM

BATHROOM

ENTRY

SECOND FLOOR

BASEMENT

VERIZON Palm Treo 650 PDA Camera Cell Phone+MP3+EXTRAS Current bid: $59.00 on eBay Mint UNLOCKED PALM TREO 650 CINGULAR/T-MOBILE GSM PHONE Current bid: $70.99 on eBay See all 19,269 treo items on eBay.

Louis Vuitton Malletier, S.A. v. Akanoc Solutions, Inc., C 07-03952 JW (N.D. Cal. Dec. 23, 2008)

This is one of countless anti-counterfeiting actions by luxury brands against allegedly infringing websitesbut the twist is that the brand owner is going after the sites' web host. In Tiffany v. eBay, the big brand got very little traction against eBay based on eBay hosting auctions for allegedly infringing goods. This case doesn't turn out as well for the web host. The court, without citing Tiffany, leaves open the possibility that the web host could be liable for its customers' infringing activities. Why the difference?

Contributory Copyright Infringement

The court starts with contributory copyright infringement. The court doesn't clearly specify the direct copyright infringement taking place. It discusses evidence that the defendant's customers are selling counterfeit goods, but it doesn't connect the dots to show that the counterfeit goods are actually protected by copyright law. (It's not automatic that counterfeit goods infringe copyright).

Also, the DMCA online safe harbors are not mentioned, which makes sense if the copyright-infringing behavior is the actual sale of the counterfeit goods instead of publishing information about those goods. However, as we saw in the Tiffany case, the web host cannot determine if the goods being sold are actually counterfeit. Nevertheless, the court says a jury could find the web host had actual knowledge of the infringement due to a series of defendant emails and demands from the plaintiff. From my review, it appeared that the referenced emails involve the web host relaying the plaintiff's takedown notices to the hosted customers, so I'm not sure how these emails could evidence knowledge of the counterfeiting.

With respect to material contribution, the court references the confusing language from Perfect 10 v. Amazon and the archaic Napster precedent to say that failure to take simple measures to stop infringement can qualify as a material contribution (a standard referenced in Amazon), and the web host here could easily disable the IP address of the putatively infringing website. As a result, its failure to take such simple steps could constitute material contribution.

All told, the contributory copyright infringement analysis in this case is heavily plaintiff-favorable. It appears that the plaintiff's prima facie showing is (1) allegedly counterfeit goods being sold outside the host's purview (the direct infringement), (2) demand letters plus emails from the host to customers relaying takedown notices (knowledge), and (3) the host's ability to turn off accounts or disable IP addresses (material contribution). This is a disconcerting standard, because just about every web host could satisfy this test.

Contributory Trademark Infringement

The court references the contributory trademark infringement standard from the Ninth Circuit's 1999 Lockheed v. Network Solutions case, requiring knowledge of the infringement plus [d]irect control and monitoring of the instrumentality used by the third party to infringe the plaintiff's mark. In practice, it appears the court equates the contributory trademark and contributory copyright analysis. The court does so expressly for the knowledge prong, where the judge simply references its prior copyright discussion.

As for the host's control, the court analogizes the host to an offline swap meet (just like Tiffany did), shoots down some of the defendant's arguments and then says that, per Fonovisa, the defendant cannot remain willfully blind to infringement on its servers. This sounds a lot more like a contributory copyright infringement analysis than the Lockheed direct control and monitoring requirement.

I was disappointed that the court (like so many others) does not address the web host's eligibility for the printer/publisher defense. This might very well be apropos to web hosts.

Other Claims

The court dismisses the vicarious copyright infringement claim because there was no evidence that the web host's profits varied with the infringing activity. The court also dismisses the vicarious trademark infringement because the web host lacked the requisite agency relationship with its customers (why do apparently smart IP lawyers routinely allege vicarious trademark infringement when there is no agency???).

Implications

I think the contributory trademark infringement ruling is entirely consistent with the obvious hole left open by the Lockheed case, which excused a domain name registrar for selling allegedly infringing domain names but implied that web hosts might be treated differently. More surprising, perhaps, is that in the decade since the Lockheed case, we've had almost no cases mapping out the boundaries of web host liability for contributory trademark infringement. It's remained one of those known Cyberlaw frontiers. While it's nice to get a case addressing that frontier, I wish it were more favorable to web hosts.

Goddard v. Google, Inc., 2008 WL 5245490 (N.D. Cal. Dec. 17, 2008). My initial post when the complaint was filed. The Justia page.

Goddard sued Google because Google displayed third party AdWords ads for allegedly fraudulent mobile subscription services. On its face, this lawsuit appeared preempted by 47 USC 230 (consistent with other opinions granting 230 for third party ads, such as the recent Cisneros case), although the plaintiff included some allegations to try to get around 230. No such luck for them. This ruling kicks the lawsuit out on 230(c)(1) grounds with leave to amend (more on that in a moment).

I'm a big fan of Judge Fogel's opinions. He's a meticulous and thoughtful judge, and his opinions are always carefully constructed. In particular, this opinion is a terrific read for anyone who would like to see a cutting-edge 230 opinion. It discusses many of the major recent 230 cases (Roommates.com, Mazur, Doe v. MySpace, Craigslist, National Numismatic) and contextualizes them nicely. It's like a 230 year-in-review opinion. If you want a one-stop resource to see what's happened in 47 USC 230 jurisprudence in 2008, read this opinion.

Among other interesting aspects, this is the first opinion by a Ninth Circuit-bound district court judge that has a robust analysis of how Roommates.com applies to the case. (Roommates.com has been cited in a few other opinions, but usually in a very cursory fashion). Judge Fogel deftly wrestles with the multiple contradictory provisions of Roommates.com, noting that it is principally is a defendant-favorable ruling with only a thin layer of plaintiff-side opportunity. For example, Fogel reads the Roommates.com opinion very narrowly when he says "The [Roommates.com] court emphasized repeatedly that the website lost immunity only by forcing its users to provide the allegedly discriminatory information as a condition of access." The opinion did say that, but I'm not sure about the "only," and it said lots of other contradictory things as well.

The Unfair Competition Claim

The plaintiff argued that Google engaged in 17200 unfair competition by receiving funds from fraudulent ads. Though this may be a novel way of framing Google's involvement, it doesn't adequately mask the underlying argument that the defendant should lose 230 coverage because it received an economic benefit from third party tortious conduct--an argument that has been rejected many, many times before and doesn't fare any better here. The court reframes the argument as a premises liability argument and rejects it per Gentry and Doe v. MySpace.

Along the way, the court addresses the plaintiff's allegation in the complaint that Google helped draft the impermissible ad copy. The plaintiff didn't press this point after the complaint, and the court says (referencing its reading of Roommates.com) that "there is no suggestion in the current record that Google encouraged the [advertisers] to create the allegedly fraudulent content, or that the creation of such content was anything less than voluntary."

The court also addressed the plaintiff's argument that the claim was anchored in the federal anti-money laundering criminal statute and therefore should drop out of 230 per the exclusion for federal criminal law (230(e)(1)). The court correctly rejects this but doesn't cite precedent on this point, missing Doe v. Bates.

Breach of Contract/Negligence

The plaintiff's other main attack vector is that Google should be liable because it failed to enforce a provision in Google's AdWords contract with advertisers restricting fraudulent conduct. I've complained repeatedly about arguments trying to treat a vendor's contractual negative behavioral restriction as an affirmative representation by the vendor that such behavior won't occur on the website (my latest rant on this point). Fortunately, Judge Fogel has little difficulty rejecting this argument, correctly pointing to the Green v. AOL precedent involving the distribution of third party viruses in an AOL chatroom (the Noah v. AOL precedent