The Wall Street Journal had an interesting article last week entitled: “Investors to Web Start-Ups:
Where’s the Advertising?” The article mainly traces the experience of Glenn Kelman, who runs an online real-estate brokerage called Redfin Corp. Unlike migoa (or Trulia or Zillow, both of which are also mentioned in the article as advertising-based alternatives to Redfin), Redfin allows consumers to buy or sell homes online. Its model is based not on advertising, but rather on the commision that it receives for each real-estate transaction that it facilitates. The commissions are less than buyers would pay traditional brokers, so everyone is happy.

The main point of the article is that (as Kelman explains): “Today, there’s nothing more fashionable than having an ads-driven model.” So much so that most Silicon Valley analysts told him that he’d have more success if he switched to an advertising model. Kelman is “swimming against the tides,” meaning that he is one of the few Internet entrepreneurs whose business model isn’t based principally on advertising, and for that reason alone, he found it more difficult to raise funds from investors.

Steven Carpenter, CEO Of Cake Financial, makes the same point: “If you have a model that is different from the 90% of consumer-Web companies folks are seeing today … it’s difficult to break through that clutter.”

The logic is clear from the VC’s point of view. The Wall Street Journal explains:

“Venture capitalists tend to be fans of ad-driven sites since advertising revenue theoretically covers the cost of giving away a Web service free, and free sites attract users much faster than sites that charge money. Such sites are typically also cheap to run because there is often no need for customer-service agents or costs for physical goods. So such companies can have high profit margins if they succeed. Many of today’s hottest Web properties are based on the online-ad model, including Google Inc., which pairs ads with search results, and social-networking site Facebook Inc.”

I couldn’t help but think that our experience has been almost the opposite in Spain. A lot of VCs told us that they didn’t believe in an advertising-based model — that it was sufficiently discredited in 2001 — and that we should contemplate a commission-based model that would be secure. We kept telling them that serious money is being made based on advertising models, but many seem to believe that Google’s success is a fluke.

For me, the key question is: How do you build traffic? If you are available to create a product that can generate interesting traffic numbers, the money issues should resolve themselves in the mid-term future.

After all, online ad spend is growing at monster rates, with no apparent decline in sight. Many traditional media sectors, on the other hand, are in decline or at best growing very modestly.

In any case, let’s not cry for Kelman and Carpenter just yet. Kelman eventually raised $12 million in funding, and Carpenter also received VC funding.

Since I haven’t posted in a bit (I was away in Nice for a few days of vacation), I’m feeling a bit apologetic and maybe also a bit nostalgic. So I’ve decided to “honour” the Wall Street Journal article that initially inspired us to start migoa. It was back in late 2005 when Oriol and I were looking to start a business together and were scanning the US newspapers for interesting ideas. We came across this article, and the rest is history. It seems a bit outdated now — we’ve learned so much since reading this article about search, vertical search, advertising models, Internet businesses, etc. — but the article’s key insights remain the same: One size doesn’t fit all.

I hope the Wall Street Journal won’t mind this brief “honour”. It’s done with nothing but love (and Rupert Murdoch is apparently going the online Journal more accessible, so I’ll help give them a jumpstart).

———

	December 19, 2005

THE JOURNAL REPORT: TECHNOLOGY

DOW JONES REPRINTS This copy is for your personal, non-commercial use only. To order presentation-ready copies for distribution to your colleagues, clients or customers, use the Order Reprints tool at the bottom of any article or visit: www.djreprints.com. • See a sample reprint in PDF format. • Order a reprint of this article now. Consumer Technology Beyond Google Yes, there are other search engines. And some may even work better for you. By KEVIN J. DELANEY Staff Reporter of THE WALL STREET JOURNAL December 19, 2005; Page R1 One size doesn’t necessarily fit all. It’s true whether you’re talking about clothes or screwdrivers. And it’s also true in search engines. While Google Inc., Yahoo Inc. and Microsoft Corp. are great at serving up answers to many types of queries, they aren’t always the best way to find specialized information. You’ll often get thousands of results for your query — but many of them end up off-topic, and there’s no easy way to narrow them down to get to what you want. THE JOURNAL REPORT   See the complete Technology report1. That’s where a growing crop of specialized search sites comes in. They’re sometimes known as “vertical” search engines because they target a single vertical, or industry, category — such as booking travel, buying a house or finding a job. Instead of trawling through billions of Web pages to find results, the way the big engines do, vertical engines limit their searches to industry-specific sites. And they usually serve up lists of actual things — such as houses for sale or open jobs — instead of links to pages where you might find them. So you spend less time skimming through irrelevant links to find what you want. On top of that, the sites let you filter the results by factors such as salary, price or location. “Often, a specialized database can take you directly” to the most useful information and save you time, says Gary Price, news editor of the Search Engine Watch site. “Every useful result can’t be in the first few results from a major Web engine, and that’s where most people look.” GOOGLE KEEPS ON GROWING   PODCAST:2 Where will Google stop? The search giant has branched out into a variety of other Web services, from email to news to displaying satellite images online. WSJ’s Kevin J. Delaney discusses Google’s evolution, where it may be going from here, and how much of a threat its expansion poses to other companies. These sites often don’t look much like regular search engines. Since they often focus on finding goods and services instead of information, it can be hard to tell them apart from comparison-shopping sites or out-and-out retail sites. But the vertical sites all draw their data from a range of sources and generally don’t engage in any sorts of transactions themselves — they simply pass users along to the source of the information. The sites usually make their money from advertising, but in some cases they earn a commission on transactions, such as when users purchase books found through their site. To be sure, much of the material that vertical engines turn up also shows up in large search engines. The big guys also offer advanced search commands that let users home in on some types of information. But the big names’ general-purpose search engines rarely offer the vertical engines’ precision or ability to sort and filter the results. Perhaps the best measure of the vertical engines’ effectiveness: Big search-engine companies have splashed out into vertical areas themselves, such as Google’s video and book search sites, and the local search sites from Google, Microsoft and Yahoo that let you find businesses in a specific area. Here’s a look at some common search tasks — and a sampling of specialized search engines that will get you what you’re looking for. YOU’RE LOOKING FOR a book SEARCH TOOLS isbn.nu3, BookFinder4, RedLightGreen5, NetLibrary6 Searching for books online doesn’t begin and end with Amazon. Isbn.nu, a site owned by Seattle free-lance journalist and consultant Glenn Fleishman, allows users to find and compare prices on books across about a dozen different online retailers. BookFinder.com7, run by a unit of Canada’s Abebooks Inc., provides a similar service. RedLightGreen.com8, provided by RLG, a nonprofit collective of libraries and other institutions, takes the searching in a slightly different direction. Not only can you trawl through a database of bibliographic information looking for a title, you also can type in the name of your local public or university library and see if the book is in the stacks. Then there’s the NetLibrary.com9 service provided by the nonprofit OCLC Online Computer Library Center Inc. The service allows you to search the full text of more than 100,000 digitized books and audio books and then access that content from your computer. The service is free, but you usually need to supply a library-card number. A NetLibrary text search for “slavery,” for instance, returned 721 results, ranging from “The Boys’ Life of Abraham Lincoln” to “New Forces in Old China: An Inevitable Awakening.” Users can see where the keyword appears in the texts and then read the entire books online. Users can also find, download and listen to audio books free — including recent works such as “Extremely Loud & Incredibly Close” by Jonathan Safran Foer — on their Windows PCs or some compatible portable music players. Technology built into the audio files causes them to become unusable three weeks after being downloaded. Some big-name search engines are getting into this area. Google has made headlines with its program for scanning books in a handful of libraries and letting consumers search their texts; some writers and publishers are upset with Google’s digitizing books that are still protected by copyright. Meanwhile, a separate coalition of libraries and companies has created the Open Content Alliance, which aims to support the scanning of books and make them available for users to search and read online. The effort is starting with books whose copyrights have expired, and plans to get permission before scanning copyrighted books. The OCLC, for its part, has explicit agreements with publishers. YOU’RE LOOKING FOR job listings SEARCH TOOLS Simply Hired10, Indeed11, Yahoo HotJobs12 Job-hunting sites abound on the Internet. But some specialized search engines can turn up more postings — and make it easier to home in on the ones that interest you. On a recent day, Simply Hired Inc.’s site, for example, boasted an index of about 4.5 million help-wanted listings. Simply Hired, of Mountain View, Calif., draws from thousands of sources, including online classifieds and company Web sites, and job seekers can filter the results using a host of sophisticated criteria — ranging from location to whether an employer made the Working Mother magazine list of the 100 best companies to work for. A recent search on Simply Hired for accounting jobs in a 25-mile vicinity of Portland, Maine, turned up 74 help-wanted listings. A similar search at Monster Worldwide Inc.’s site turned up only six postings. Using filters, Simply Hired’s list can be narrowed to, for instance, 29 jobs at companies with revenue over $500 million. Indeed, of Stamford, Conn., takes a similar approach to searching a vast number of job-listing resources on its Web site, though it has a narrower range of filtering options. Users can get updated results for their searches sent to them via Really Simple Syndication, or RSS — a service that forwards the information to special Web sites or software for easy review. Yahoo’s HotJobs offers a similar service, having in July expanded to search through employer Web sites and other online job services. YOU’RE LOOKING FOR information from your industry SEARCH TOOLS GlobalSpec13, Scirus14, IT.com15, LawCrawler16 People in some fields — mostly technical ones — can use specialized search engines to easily find information related to their line of work. GlobalSpec Inc., for one, offers an engineering search engine that searches about 200 million engineering and technical Web pages. GlobalSpec, of Troy, N.Y., also allows users to search within specialized databases, such as published technical standards and patent filings in the U.S. and internationally. Elsevier BV’s Scirus.com17 search engine includes over 200 million science-specific Web pages. A search for “synapse” on Scirus turned up an estimated 38,000 results from scientific journals alone. Washington-based IT.com Inc.’s search engine is geared toward people researching topics and products related to corporate information technology, such as computer servers. But industry-specific engines aren’t limited to scientific fields. The FindLaw unit of Thomson Corp., Stamford, Conn., offers LawCrawler.com18: a Google search engine that limits its searches to legal-related Web sites or databases. YOU’RE LOOKING FOR a home to buy or rent SEARCH TOOLS Trulia19, HomePages20, Oodle21 Various commercial databases of homes for sale exist online, including the more than 2.5 million listings available through the National Association of Realtors at Realtor.com22. A few specialized search engines try to offer an alternative by searching through a range of other real-estate listings, such as classified ads. The search engine from San Francisco-based Trulia Inc., for example, mines more than 100,000 real-estate Web sites. Trulia, which was still in testing mode and limited to California listings at the time of this writing, recently turned up 175 homes for sale in Oakland with asking prices over $700,000, plotting them on a Google map of the area. HomePages.com23 from HouseValues Inc., Kirkland, Wash., similarly aggregates online real-estate listings and plots results on a map. The service covers the whole country, but it appears to be limited when searching in smaller cities. Oodle Inc., San Mateo, Calif., searches classified ads — for real-estate as well as other listings — and allows users to filter results by location, price, number of bedrooms and other criteria. Users can also have new listings emailed to them as they are posted. YOU’RE LOOKING FOR airline flights, hotels SEARCH TOOLS SideStep24, Kayak25, FareChase26, Mobissimo27 Many travel sites offer flights on a variety of airlines, cars from a range of rental companies, and hotels from a number of chains. But travel search engines can provide the most options by drawing on multiple sources. They search through the listings on traditional travel sites, as well as those on hotel, airline and rental-car sites — some of which don’t show up elsewhere. One granddaddy of the group is SideStep Inc., of Santa Clara, Calif. When the service started up, users had to download a toolbar for their Web browser to do comparison shopping. But consumers can now conduct searches using the company’s Web site, SideStep.com28. SideStep searches more than 100 travel-related sites, including ones whose listings don’t show up on some of the main travel-broker sites, such as discount airline JetBlue Airways and the Holiday Inn hotel chain. Kayak.com29 from Kayak Software Corp. of Norwalk, Conn., and Yahoo’s FareChase.com30 service offer similar features. Kayak’s bells and whistles include a graphical list of best fares from a given airport, using the Google Maps service. San Francisco-based Mobissimo Inc.’s Mobissimo.com31 Web site distinguishes itself by including flights from travel sites and discount airlines based in Europe and Asia. YOU’RE LOOKING FOR a person’s phone number and postal or email address SEARCH TOOL Argali White & Yellow32 The big search engines can provide addresses and phone numbers for businesses and individuals. But few, if any, can match the depth and power of Argali White & Yellow (Argali.com33), a search engine devoted to the task. To use Argali, from Darwin Holdings Inc., of Princeton, N.J., you must install a piece of software on your PC. (The program is free, but if you want a faster, ad-free version, a subscription costs up to $29.95 a year. No Mac version is available.) The service scours more than 20 online information sources and provides a number of useful ways to search and sort the data. Argali’s features include reverse lookup of phone numbers and addresses, links to maps of any given address, and information about other people and businesses on the same street. The service also offers to look up people’s email addresses, though it had little success in a quick test: A search for email addresses for a handful of individuals didn’t turn up any accurate ones. YOU’RE LOOKING FOR entries from reference sources SEARCH TOOL Answers.com34 If you go to a big search engine looking for background on a certain topic, you’ll usually get a series of links to other pages — which means more surfing to get what you want. Answers.com, formerly known as GuruNet, cuts out the middleman by collecting all the information and organizing it into a Web page. Type “Internet” into the site, for example, and it displays a comprehensive history and explanation of the Internet, with entries culled from the Computer Desktop Encyclopedia, Columbia University Press Encyclopedia, Wikipedia and other sources. The top results from Google on a recent day, by contrast, included the sites of Microsoft’s Internet Explorer software and an online movie database. “We see ourselves as complementary to search engines,” says Bob Rosenschein, chairman and chief executive of Answers Corp. in Jerusalem, which offers the service. Indeed, Google’s results page for some queries includes a “definition” link that takes users to the Answers.com results for the same query.   –Mr. Delaney is a staff reporter in The Wall Street Journal’s San Francisco bureau. Write to Kevin J. Delaney at kevin.delaney@wsj.com35

It’s one of my favorite times of year — the US Open.

I’m hoping that Serena and Roger win.

I want Rafa to make it to the finals and to prove that he can be successful outside of Roland Garros — that is, on surfaces other than clay — but I like Federer’s race to be the best of all time, and the elegance, good-naturedness and cool-minded efficiency with which he pursues his goal.

It’s likely that Roger will win another title. He’s the seemingly perfect tennis player. No weaknesses. Loves to win.

Serena Williams, on the other hand, has the potential to be one of the greatest female champions ever. The New York Times says that she is “dangerous when interested.” She already has 8 grand slam titles, which puts her in pretty elite company. But apparently, she has not lived up to her full potential, because she has been trying to balance her professional life with other interests and a personal life. Chris Everet, a former tennis champion, once wrote an open letter chasting Serena for not being a better tennis champion by devoting herself single-mindedly to her sport. People apparently don’t like the fact that Serena tries to have a life.

People also criticised Tiger Woods when he decided that he wanted to get married and have a kid. Apparently, a family would be a distraction to his game. People were sympathetic, however, when he took a few months off to mourn his father’s death from cancer. Tragedy makes for a compelling story. Personal happiness is more annoying and above all selfish.

Once you have already earned millions of dollars and realized let’s say 75% of your potential, is it a crime to want to enjoy it — even if that means losing a little bit of the edge that made you such a great competitor?

Or do you owe it to yourself — and to your place in history, if that concept makes any sense — to singlemindly and selfishly exploit your potential and “self-actualise” 150%?

Or to put it in the terms that Chris Evert suggested to Serena Williams, when you have been blessed with amazing opportunities and unique talent, is it selfish to pursue personal happiness over professional glory?

Lili León is the winner of our beta-testing contest! As Carlos mentioned in his post, over 250 people registered for the competition, but Lili won by a unanimous decision. It makes sense, as Lili is a freelance usability consultant with a degree in software engineering. And more importantly, Lili is passionate about web 2.0 projects.

Lili stopped by our offices last week to collect her winnings and to chat with us over cava and cake. She preferred the cash to the Xbox, as she said that her son already has a Play Station. I found Lili to be engaging, intelligent and hilarious. She speaks a mile a minute, and her conversation is usually flavored with humorous and insightful commentaries.

Lili told us that she had dedicated a lot of time to the contest, in part because she was intrigued by vertical search engines and in part because she wanted to grow professionally by applying her skills to innovative technologies. More than anything, Lili was interested in receiving feedback about her work. She said that the chance to collaborate indirectly with Albert Armengol, Joaquim Calaf and Juan Luis Hortelano was also a major part of the reason that she had participated.

It was obvious when we saw her submission that she’d put a thought and effort into it. Her winning beta-testing submission consisted of three elements: i) “simple” objective errors (typos, inconsistent usage of certain terms, etc); ii) usability; and iii) proposing innovative ideas that would create stickiness and help migoa retain its users.

A winning formula indeed!

For the record, I think it’s really cool that a woman won the beta-testing contest.

If you are interested in contacting Lili about helping you with your website, please feel free to send me an email or to contact her directly at nomehagaspensar @ gmail.com.

The other finalists

Juan Sebastián Díaz Caño

Although we didn’t have a chance to meet with them, I’d also like to thank our other two finalists for their excellent submissions:

Juan Sebastián Díaz Caño submitted an excellent review of our site that drew upon his experience as the creative director of an advertising agency called Comecocos Entertainment. His specialities include viral marketing and all of the creative elements of advertising.

If you’d like to get in touch with Juan Sebastián, you can contact him at juan.sebastian @ comecocos.com .

Raúl Andrés

Last but not least, Raul Andres impressed the judges with his proposal that drew upon his experience as an entrepreneur and business consultant. More specifically, in 2004 Juan started an academy that teaches about GNU/Linux, open-source software generally. Juan also serves a consultant to small and medium-sized businesses via a project called mctux://.

You can reach Raul at raul.andres @ mctux.info.

Thanks to everyone who participated in the contest!

I love Hollywood movies. To me, movies are a country’s modern-day parables. A good movie teaches me as much as about myself as the Sunday School lessons that I learned growing up. When a movie touches you, it’s because it reflects a larger truth or a more universal yearning that a talented director and group of actors have captured. And it seems that the current focus of modern Hollywood is on helping its audience — particularly, the white American male — understand his place in a modern world in which life is tough, and sexuality, gender, race and religion are not quite as simple as they once were.

Being American, I guess it was inevitable that I’d love Hollywood. When I was younger, I always thought I’d end up working there. Not as an actor, but as an entertainment lawyer. That was until I went to Los Angeles for a summer to work in Sullivan & Cromwell’s (a major Wall Street law firm) LA office and realised that even though Hollywood movies can move the spirit, LA itself is spiritually dead. Your value is determined by your proximity to A-list stars, many of whom are the products of plastic surgery and a loss of perspective. Not at all like the heroes that they play in the movies.

But I still love Hollywood movies, even though my European friends make fun of me for it. Many of them refuse to go to the movies with me.

So this past week — the middle of August is one of the deadest periods in Spain’s calendar — I’ve been watching a lot of them, sometimes by myself. Here’s a partial list of what I’ve been watching.

Blood Diamond (on DVD): Great movie. Leonardo DiCaprio is the modern-day prodigal son, an amoral, self-centred diamond smuggler who learns how to love from an African fisherman who will do anything to reunite his family, which has been torn apart by the Civil War in Sierra Leone. The rebels are atrocious, cutting off people’s hands to keep them from voting, brainwashing children to convert them into a brutal child-army and enslaving able-bodied men to work in diamond fields. It’s the sale of diamonds as wedding rings to European and American women that funds the rebels’ efforts, but the rest of the world ignores the issue until DiCaprio, initially lured by the desire to sell a priceless pink diamond, helps a beautiful journalist to get the information that she needs to write the story that will embarrass world leaders into initiating reform.

Take-home messages:

• even if you’ve been a total shit all of your life, it’s never to late to reform and do the right thing; and
• Africa (thanks to Angelina Jolie, Madonna, DiCaprio, Forrest Whitaker, Bono and a few other stars) is the new focus of left-leaning actors who want to use their star power to make the world a better place.

The Last King of Scotland (on DVD): Forrest Whitaker won the Oscar for this one, beating out Leonardo DiCaprio, who was nominated for Blood Diamond. He humanizes Idi Amin, the strange and brutal Ugandan dictator. But this isn’t his story. It’s really about Dr. Nicholas Garrigan, a fictional, young Scottish doctor who travels to Uganda to help the poor but ends up becoming Amin’s personal physician. Garrigan has just graduated from medical school, but he feels that he’s too much in his father’s shadow. (His father is also a doctor.) So he takes out the globe, spins it around and decides to go to wherever his finger stops it. He ends up going to the second place, because (if I remember correctly) the first place was Canada, and he vetoed fate’s first decision. Although the lead character here isn’t American, the issue is the same — a young man trying to find his place in the world, getting attracted by the glitz and glamour associated with an African dictator (a seemingly counter-intuitive proposition), and then eventually realizing that he needs to do the right thing — which is getting out the story of African atrocities to his primarily white European and American colleagues.

It’s interesting to note that in both “African” movies, the central contribution of the white protagonists is to give up personal gain and spread the message about the atrocities taking place in Africa. This is the principal message that Hollywood wants to send to its main audience, and I think that it’s a good one.

That being said, the more politically incorrect and ultimately more important question of why black Africans seem to have a penchant for savagely mutilating and enslaving each other is neatly avoided. After all, the take-home message is meant for the movie’s target audience, which is white (i.e., not black African), and no Hollywood exec wants to be accused of racism by highlighting delicate racial issues.

The Bourne Ultimatum (in theatres): Loved it. It was the best of the three Bourne movies so far. I loved the first one, liked the second one, and was blown away by the third one. We’re interested in Bourne, because he is the best. He looks like a normal guy (it’s Matt Damon), but he has supernatural physical abilities and he never gives up on his mission. In search of his identity and his humanity, it’s a metaphor for the lost sense of self suffered by the modern male in a metro-sexual, pop-psychology world. Men are taught to be strong and unemotional, but there’s a more recent trend to become more emotionally in touch with who we are and who we love. The interest in spies reflects our continuing concern with fighting terrorism, except that in America right now there’s a general distrust of the government (Hello GWB), and so the evil that Bourne fights against is less about foreign terrorists and more about the bad guys within the Department of Defense.

Take-home message: Life is a bitch and will throw you lots of obstacles, but if you kick ass in everything you do and never give up, you’ll survive. And by the way, try not to forget who you really are, and remember to love.

Regardless of the genre, American movies tend to be idealistic and moralistic, like Americans themselves. European movies tend to be more “realistic” and less morally judgmental. Life is tough for its protagonists as well, but there usually isn’t the stereotypically happy Hollywood ending, and the characters tend to be more emotionally complex.

I can see why some of my friends make fun of Hollywood movies.

But at the end of the day, it’s kind of like religion. It might not always make sense, and some of the stories might seem laughable, but it’s better to believe in something than to be cynical and not believe in anything at all.

Life really is tough. That much, everyone seems to agree on.

But hope and cheesy ideals sometimes help to make it a little more bearable.

Tornado Insider is reporting that early-stage funding is on track for a record year, suggesting that investors are pretty optimistic about the tech sector. In particular, they report that early-stage investments — both seed and first-round — in tech companies are on the rise, constituting 50% of all VC deals.

These are pre-bubble numbers.

• Most of the activity is occurring in Germany, France and the UK, but Germany shows the highest proportion of early-stage activity: 62%.
• The UK has the highest total number of early-stage rounds, but as a percentage of total funding activity, the UK is only at 42%, which places it behind Germany (62%) and France (46%).
• Of note, 69% of all European Internet deals are early-stage rounds.
• 
  High-Tech Gründerfonds has been the most active investor, with 18 seed and first-rounds investments. Index Ventures and Big Bang Ventures follow with 6 early-stage deals.

There are some bad news and some not-so-bad news if you are a Spanish Internet start-up.

The bad news

Tornado Insider has produced a study of European VC deals in 2007. Blognation has a good analysis of the study, but the bottom line is:

• the UK is still the place to be if you want to get funding. 30.6% of all technology investments targeted UK companies;
• Germany is a distant second to the UK, but it’s getting better. In fact, Germany is now 2nd in Europe, ahead of France, with 16.7% of all deals. (France used to be number 2.)
• France is now 3rd, with 11% of the deals in 2007 – down considerably from its 7-year average of 14.1%.
• The rest of the top 7 includes:
  • Israel — 8.7% in 2007 (average of 8.1% since 2000),
  • The Netherlands — 6.3% in 2007 (average of 5.4% since 2000),
  • Denmark — 4.4% in 2007 (average of 4.1% since 2000), and
  • Sweden — 4.1% in 2007 (average of 6.4% since 2000).

By cities, the distribution of European tech funding is as follows:

For Internet investments, London is clearly the place to be, with 20.8% of all European investments being made there. Paris is second, with 10.7% of all European Internet investments.

Spain is nowhere to be seen on any of these charts. It’s not even mentioned in any of the online summaries, which suggests that it’s largely irrelevant in terms of European VC funding.

The not so bad news

Tornado Insider also reports that there was a lot of VC activity in Spain last month. Spain tends to have an average of 1.5 deals per month, but 5 deals were recorded in July. It’s interesting to note that:

• none of the deals involved first-round financing for an Internet company (there is one second-round financing of an Internet company);
• Biotech and mobile account for 2/3 of the investments;
• The Basque Country and Navarra account for 1/2 of the investments, while Madrid accounts for the other 1/2; and
• There were no investments of any sort in Barcelona, even though 2 of the investors were Catalan.

Following is a summary of the Spanish deals that were reported in July 2007:

• Bilbao-based security software company Panda Security raised €10 million in a new funding round from HarbourVest Partners and Atlantic Bridge Ventures. Previous investors Investindustrial and Gala Capital also participated in this round.
• 3i, the European Founders Fund, angel investor Michael Kleindl and Molins Capital Inversión invested €5.75 million in second-rounding financing for Madrid-based BuyVIP, an invite-only online shopping community.
• Sodena invested €3 million in Navarra-based 3P Biopharmaceuticals.
• Debaeque Venture Capital invested €2million in first-round investment for Kimia Solutions, a Madrid-based media content developer. Kimia aims to develop technology to enable efficient delivery of rich media Internet content to mobile handsets.
• Clave Mayor invested €475,000 in Navarran company Laboratorios OJERpharma, which produces high-quality dermatological pharmacy products.
• Honorable mention goes to Berggi, a US-based developer of mobile messaging services for cell phones, which raised €6.6 million in early August from Avanzit and Adara Ventures. The company has offices in Madrid and is as much Spanish as it is American. Berggi enables consumers to use email, instant messaging, text, alerts and new messaging tools to stay connected with friends, family, and colleagues.

This is admittedly a small sample set that might not be representative of the big picture, but it suggests that pharma continues attracting money, mobile is hot, and investors tend to be cautious about Internet projects.

It also suggests that Barcelona is not the best place to be if you want to get significant first-round financing for an Internet project. It can be done (after all, we got financing from angel investors and from the government). But it’s challenging at best.

Reuters is running an interesting story today noting that Yahoo has beat Google in a major US user-satisfaction survey. The University of Michigan American Consumer Satisfaction Index (ACSI) showed that Google is on the decline, while ASK has shown the most improvement and Yahoo is no. 1:

• Ask.com’s search engine has risen most significantly in customer satisfaction ratings, up 5.6% to 75 points. ASK’s improvement is the result of a phenomenal redesign and refocusing on its search technology, plus an ambitious $100.000.000 marketing campaign.
• Yahoo rose 3.9% to 79 out of 100 points. It’s improvement is due to a relaunching of the main site and the increasing popularity of various features and services.
• Google fell by 3.7% to 78 points. It’s decline is due to the perception that the Company has not really improved or altered its search technology and interface in years. The summary is that Google needs to find a better way to market its new features and services, because the Company is being overshadowed by the dominance of its main search engine, which doesn’t look like it has changed much. And web users want to see marked improvements in a product from year to year to increase in their user satisfaction.
• AOL dropped more than 9% to 67 points, despite its recent strategic shift from an Internet access service to an ad-supported e-mail and entertainment source. AOL’s customer satisfaction score was only slightly higher than the IRS (the US tax authorities). That’s not a good sign.

Back when we went to Library House, Oriol and I met up with two cool entrepreneurs who run an innovative video-blog site: Vincent Camara (cool name for someone running a video site, and in fact, Vincent is the camera man!) and Eugene Tsyrklevich.

Their project is called Intruders.tv, and it aims to be a global network of video blogs covering the web 2.0 and technology ecosystem. They mainly go to all of the major conferences and events around the world, interview entrepreneurs and investors, visit exciting start-ups and give you a first look at the hottest technology.

I know that they are looking for collaborators in major European countries (including Spain), so if you have an interest in working in an exciting video project (and meeting other entrepreneurs in the process), please feel free to contact them.

In any case, you can see the interview that we did with them at the following link: http://uk.intruders.tv/Interview-with-Gary-Stewart-and-Oriol-Blasco-of-Migoa_a117.html <http://uk.intruders.tv/Interview-with-Gary-Stewart-and-Oriol-Blasco-of-Migoa_a117.html>.

It’ll be great when they we can embed the Intruder.tv video posts directly into blogs like how YouTube allows you to do, but for the moment, the interview is just one short click away.

I myself haven’t checked out the video, as I’m too self-conscious when I see myself on video. I always think that my voice sounds weird or that the image looks funny.

But as is often the case, I’m sure that I said something stupid or inappropriate. I’m sure that you’ll forgive me.

Ollivier has just posted the dates for the next OpenCoffeeClub Barcelona meetings:

• 12 Sept.
• 17 Oct.
• 14 Nov.

The events are held at the Duo Bar (Carrer del Rosselló, 156) at 8PM. If you have any questions, feel free to call Olliver at 620-97-94-92 or email him at ollivier@ojacq.com.

OpenCoffee is part of a larger initiative started by Saul Klein of Index Ventures. The goal is to encourage entrepreneurs, developers and investors to organise real-world informal meetups to chat, network and grow. The first Open Coffee events took place in London, but there are 66 member clubs all over the world, including in Barcelona. And given that the goal is to create an informal space, OpenCoffee is a great networking tool, particularly if your goal is to launch internationally. You can visit the OpenCoffeeClub in Paris or Berlin, for example, and feel like you are part of a larger, entrepreneurial family.

It’s a great idea. Oriol and I went to the OpenCoffee event in London after Essential Web, and we met Saul, other entrepreneurs and a few VCs. We met some investors that we’d met at events like Red Herring, and some even proposed new oppportunities to us. We’ve also been to a few of the OpenCoffee events in Barcelona, and when the air conditioning is working ;), it’s a great place to meet other entrepreneurs and even a few analysts from VCs such as La Caixa and High-Growth.

It’s a great supplement to First Tuesday:

• First Tuesday is usually more focused on a speaker; OpenCoffee is usually more focused on informal networking.
• First Tuesday tends to attract a lot of Spanish entrepreneurs, and Spanish is the language of choice; OpenCoffee tends to attract more expats, and English tends to be the language of choice.
• First Tuesday’s main advantage is that it has a bigger publicity machine, so it can attract more high-profile speakers and tends to have better turnout that usually includes most of Barcelona’s better-known entrepreneurs. It’s where we met Albert Armengol for the first time. It’s main disadvantage is that its events are centered around well-known personalities in the Barcelona Internet community, so it might be intimidating for brand-new start-ups.
• OpenCoffee is a recent initiative so it’s publicity machine is not as potent. But it still has a pretty good turnout, and it’s not as personality driven, which means that Ollivier invites all of the entrepreneurs to send in their logos, which will be displayed during the course of the event. In other words, each entrepreneur has a potential spotlight, even if he or she is not so well-known in the Spanish Internet community.

I think that both events are valuable, and I attend them both.

Thanks to Carlos and to Ollivier for organizing these events. Networking is essential for entrepreneurs, as who you know is often almost as important as what you know.