Letter Never Sent Tell me when to go.

The competition is going to need to invest a lot more money and talent in the arena Blizzard has now dominated. Conqueror in a War of Virtual Worlds:

Since November, World of Warcraft has signed up more than four million subscribers worldwide, making for an annual revenue stream of more than $700 million. About a million of those subscribers are in the United States (with more than half a million copies sold this year) and another 1.5 million are in China, where the game was introduced just three months ago. By contrast, EverQuest II now has between 450,000 and 500,000 subscribers worldwide, with about 80 percent in the United States.

Just a year ago, numbers like that would have classed EverQuest II as a big hit. The original EverQuest topped out at around a half-million players, and many, if not most, game executives came to believe that the pool of people willing to pay $15 a month to play a video game had been exhausted. The conventional wisdom in the industry then was that there could not possibly be more than a million people who would pay to play a massively multiplayer online game.

Now, World of Warcraft has shattered earlier assumptions about the potential size of the market.

Some business analysts see WoW more as an exceptional anomaly rather than a representation of growth in the online gaming market.

“I don’t think there are four million people in the world who really want to play online games every month,” said Michael Pachter, a research analyst for Wedbush Morgan, a securities firm. “World of Warcraft is such an exception. I frankly think it’s the buzz factor, and eventually it will come back to the mean, maybe a million subscribers.”

“It may continue to grow in China,” Mr. Pachter added, “but not in Europe or the U.S. We don’t need the imaginary outlet to feel a sense of accomplishment here. It just doesn’t work in the U.S. It just doesn’t make any sense.”

With the introduction of Skype 1.4, which is currently in beta, you can have calls to your SkypeIn number forwarded while you are not online. For example, you could set it up where your SkypeIn number forwards calls to your cell phone if you are offline. This is very cool. The only downside I see is that forwarded calls still use your SkypeOut minutes. On the other hand, that is still super cheap telephony since anyone in the world with Skype can now reach you on your cellphone without costing them a thing.

Kloeschen.com implemented a WordPress plugin based on the popular AdSense logger tracking script. We’ll be testing it here as of today. Basically, it tracks where your ad clicks and referrals are coming from, so you can produce better content for your site.

GoogleTalk is very efficient, very clean, and very well-done. Google is clearly an engineering company. Everything is intuitive and easy to do. You add contacts by sending them an email invite. Your email address is your contact name. The VoIP functionality works very well. If you have a mic and headset it does the rest. Great result.

GoogleTalk is based on Extensible Messaging and Presence Protocol (XMPP) developed by the Jabber open-source messaging project:

As specified in RFC 3920, the core “transport” layer for XMPP is an XML streaming protocol that makes it possible to exchange fragments of XML between any two network endpoints. Authentication and channel encryption happen at the XML streaming layer using the IETF-standard protocols for Simple Authentication and Security Layer (RFC 2222) and Transport Layer Security (RFC 2246). The normal architecture of XMPP is a pure client-server model, wherein clients connect to servers and (optionally) servers connect to each other for interdomain communications. XMPP addresses are fully internationalized, and are of the form for clients (similar to email).

A wide variety of applications can be built on top of the core XML streaming layer. The first such application is instant messaging (IM) and presence. The basic IM and presence extensions specified in RFC 3921 address the requirements of RFC 2779, as well as the contact list functionality expected IM and presence systems. RFC 3921 also makes it possible to separate the messaging and presence functionality if desired (although most deployments offer both).

XMPP extensions allow for additional functionality.

Both Skype and Google are talking about open IM (Instant Messaging). That means that eventually we’ll have some standard way to communicate with contacts on any of the various messaging platforms like ICQ, AIM, GT (Google Talk, which came out today), Jabber, Yahoo, MSN, etc. GoogleTalk itself runs on Jabber. I’m curious what will happen to the Hello messaging system they purchased with Picasa. Anyway, here’s what both Skype and Google have planned:

Hearsay courtesy of DownloadSquad on Google’s plans for GoogleTalk

According to our friends at Google, there’s a lot in store for Google Talk. Google is keenly interested in keeping the protocol open, and in fact you can access Google Talk’s servers with any Jabber-compatible client like Trillian, Gaim, Adium X, and iChat. (If you have one of these, I’m told you can connect using server talk.google.com and port 5222.) Google tells us that SIP support is coming soon and are in talks with Skype, AOL, and Yahoo! concerning interoperability.

I wonder how AOL and Yahoo feel about interoperability.

Skype is opening up its messaging with “SkypeNet API“. They have less to lose here than chat-focused products like AIM since Skype text chat is not the main benefit to Skype users who can use SkypeOut to place telephone calls worldwide.

Wouldn’t it be cool if your friends using other IM applications could contact you on Skype? We want Skype to be the worlds largest open IM system on the planet! What if you could use Skype to communicate with a product reviewer on a Web site, to chat with other players in an online game using Skype? All of these things and a few more that we haven’t dreamed up yet will become possiblities with SkypeNet API, a new set of tools and services that programmers can use to take Skype into new places that you may have never dreamed of before.

SkypeNet API will enable developers to access our IM and Presence system and bring it into new applications without needing to have the full version of Skype running on the machine. Think of it as mini Skype that can bring Skype to new places and let you do things you couldn’t do before. Details on the SkypeNet API will be coming soon, but we want to start the fun now. Interested in getting on board with SkypeNet now and just can’t wait until we publish more?

I just read this article about how China is developing a mandatory system that prevents video game players from playing for more than 3 consecutive hours. This is going to change the entire industry if true since they are one of the fastest growing markets for video and online games. I suppose developers could simply make geographically different versions of the game, yet it will have quite an impact in many areas. Link.

In addition, seven of China’s largest online gaming firms pledged Tuesday to “sacrifice short-term revenues” to create a “healthy” environment for young internet users. Companies signing onto the “Beijing Accord” were Shanda, NetEase, The9, Optisp, Kingsoft, SINA, and Sohu. These seven companies also pledged to deploy the system when development is completed.

Development of the system is scheduled for completion at the end of September 2005. Internal testing is scheduled to last for one year, beginning in October of 2005. After internal testing, trial operations of the system will be held using the games “The Legend of Mir II” and “The World of Legend” operated by Shanda, “Westward Journey Online” and “Fantasy Westward Journey Online” operated by NetEase, “World of Warcraft” and “MU” operated by The9, “JX Online” and “First Myth Online” operated by Kingsoft, “The Legend of Mir 3G” operated by Optisp, “Lineage II” operated by SINA, and “Blade Online” operated by Sohu.

Compulsorily deployment of the new system is expected to begin for all massive multiplayer online role-playing games and casual games in China in late 2005 or early 2006.

Google just announced it would be introducing $4 billion worth of new shares into the market in order to raise capital for acquisitions while the stock price is still high. Of course, this has the unfortunate problem of diluting the share value of anyone who holds Google stock (I’m not one of them). This article makes several good points:

In a filing with the Securities and Exchange Commission, the company said it would use some of the cash to make unspecified acquisitions, while the rest would be used for general corporate purposes. But it?s no secret that Google?s success has made it a target of large technology firms such as Yahoo and Microsoft, among others. And now the company is essentially admitting it needs more money to develop new products to fight off competition.

Also there was a good analysis of an appropriate valuation for the stock:

To look at Google, Damodaran fired up that same valuation model, which he designed specifically for valuing fast-growing firms. It employs a two-stage growth model that includes a single high-growth period followed by a stable growth period. (After all, no company can grow faster than the economy forever.) And it takes into account everything from operating leases that grant the use of equipment and other assets to future dilution from outstanding stock options. Using numbers from Google’s most recent quarterly financial report, Damodaran made several optimistic assumptions. He assumed revenues would climb 60% annually for the next three years before gradually declining to a stable growth rate of 4% a year after ten years (for a compounded average of 27% per year). He also assumed that pre-tax operating margins would decline gradually to 20% in ten years, from a current 32%, which is even more optimistic since that would yield operating income of almost $10 billion.

In the end, Damodaran’s analysis produced a value that’s far less than the current stock price. He figures Google is currently worth just $110 per share. And this assumes that the company will grow like gangbusters, taking in $49 billion in sales by mid-2015, compared with just $3.2 billion last year—an increase of some 1,400%.

For his part, Damodaran is baffled that anyone would pay close to $300 per share for Google. To justify paying this much, he says, you will need compounded revenue growth of about 40% a year, which would generate revenues of $135 billion and operating income of almost $30 billion in ten years. “If you believe this can happen, the stock is a good buy,” he says. “Is it possible? Sure. Is it likely? I don’t think so.”

The lucrative global business of taking advantage of lonely, gullible, and / or greedy Americans. MSNBC: ‘Nigerian scams’ keep evolving It bears repeating, but do not deal with anyone in or from Nigeria. Also, do not trust anyone you ‘meet’ on the Internet. When I worked at NCSoft, I used to discuss this with my coworkers, my contention being that online ‘relationships’ are inherently less real in some difficult to define way. Working at a video game company I was most certainly in the minority since most of the people I worked with had friends they spent time with only online. But I have seen it happen time after time, online friends betraying one another daily because of the ephemeral nature of online relationships. When I worked as a “Game Master” for Ultima Online I saw many cases where people would get scammed out of valuable items or entire accounts by people they thought of as close ‘friends’. People they ‘knew’ for months or years. This can happen in real life, too, but I would contend that real life presents greater obstacles to ill-doers in terms of detection and consequences. For one thing, in real life, it’s harder to pretend you’re of a different sex or age. Online you can be male, female, young, old, rich, poor, married, or single. Also, if you trick someone IRL (in real life, as we say) you are liable to get your butt kicked.

Macromedia Flash is fun. By fun I mean time-consuming and frustrating. But, no really, it is fun to mess around with. It just takes a long time to really make anything with it. It reminds me a lot of stop-motion animation, which I messed with during a brief spell almost ten years ago. If you want to make anything more than a couple minutes of action, you’re in for a lot of work. I worked on this little movie for an ex-coworker’s birthday for about 10-12 hours. Seriously. I don’t think I’m all that slow. I had about twenty something layers and the resulting .fla (Flash editable source) file was about 150 MB. You’re welcome to view the final result, which I think is funny, however be forewarned that it is full of inside jokes you could never be expected to understand.

I learned many Flash principles during this attempt. How to build a simple preloader, looping animation, and even some simple ActionScript.

If you’re a WordPress user and have a problem with comment spam you need to get the Link Right 2 Spam Plugin. Here’s how it works, which is actually very simple:

A simple WordPress 1.5 plugin that virtually eliminates comment spam. Prevents blind posting by adding a dynamic hidden field to the form and validating that field when posted. By default it logs all pertinent information to error_log so you can track the type and frequency of spam.

Since installing this plugin a couple months ago I have had zero spam comments! You can still spam my blog, but you’d have to be a human being until, and until they change the spam bots, that’s entirely too inefficient.