This is an interesting post by Marc Andreessen. He describes what he considers the three types of platforms companies build on the Internet. Worth reading to the end, even though it’s quite long.

If I had gotten my way, ESPN.com would’ve joined the level 2 platforms on the Internet. There are few reasons to not do it, and Andreessen’s point about AOL is absolutely right on target. Imagine the Internet if AOL had actually moved in that direction?

I don’t agree with everything he’s saying, and there is the obligatory Ning plug toward the end, but the broad point is absolutely right. The question is which businesses will thrive with that kind of platform approach, and whether level 3 makes sense for those businesses. There are a number of businesses where APIs beyond Level 1 don’t make sense.

Or, to put it another way, is there room for an open source version of FBML or FBJS to enable the plugin development of what he calls Level 2?

I guess it’s OK if I say this now, but I used to HATE ESPN.com’s home page. For at least the last 3 years, most of the time I was there, it had turned into a big, bloated, ugly, messy mishmosh of too much text, too much advertising, and too little organization. I would literally look at the Top Story area, and the headlines and then leave, immediately, to the safe, more pleasant confines of the various sport index pages inside the site. The only time I loved it was when it was converted into the “war” mode for major event coverage.

Late last week, however, ESPN launched a new version of the home page. I have to say, they basically fixed all of the problems and addressed a lot of the things I personally would argue for in meetings. Here’s a screen shot:

Think about what you’re seeing… there are only 2 ads above the fold. 2. Scores are front and center, and it’s clean and easy to read most of the content on the page. I’m still not a fan of the subdivided boxes in the second column (page 2, the Mag for example), because it’s easier to read when the widths are consistent all the way down. Overall, though, this thing is awesome.

My biggest, biggest super happy, Thank God you finally did it item is the fact that the page stops scrolling after one page down on my monitor. I don’t know if you remember, but the page used to scroll on for-freaking-ever. At least 3-4 page downs on my monitor, and on a 1024×768 or 1280×1024, that would be even worse. This one, I see the bottom pieces of content after hitting page down once. Love it, love it, love it. I personally would argue for this in meetings, but I couldn’t get edit to listen. I guess someone else made the more persuasive case. Whoever you are, you rock.

Now, any chance of bringing the photo gallery back to the front page? I miss it. The photography and photo editing at ESPN is one of it’s strengths. Wish we would see more than just the front page photo.

I’ve been looking at iTunes, Joost, and the other Internet-based ways to consume TV and am beginning to wonder if I could live without cable. It’s more or less possible to view episodic content, from shows like Lost and Heroes to The Daily Show and The Colbert Report using just iTunes. Sure, it’s not HD or even widescreen, but with the Apple TV now out, I’m sure that’s just around the corner. Microsoft is offering a similar service with it’s XBox Live offering, where you can download shows right to your XBox 360. Sony should be coming out with something as well.

My biggest concerns are around “live” broadcasts, things like sports, cable news, and weather. I can’t imagine TV without ESPN or football on Sunday or the other things that I can’t get over-the-air (OTA). No CNN or MSNBC on election night or during election season would be weird and I take the Weather Channel for granted.

At least for the news and weather things, there are OTA choices in the HDTV world. Almost every city I’ve been in using OTA HDTV, one of the local stations is broadcasting an automated 24-hour weather forecast on one of the sub channels. There are also more frequent news breaks on some of them, as well.

Really, it comes down to sports. Ultimately, it’s why ESPN can charge the subscriber fees it can. There are a ton of people just like me who get cable primarily to have ESPN. So, any world that replaces cable would need to offer a way to subscribe to ESPN, local live sports (NESN, YES, etc.), a la carte. Knowing how much ESPN relies on subscriber fees (worth several billion a year according to public estimates), that’s going to be a tough sell with the networks, let alone Comcast, Cox, AT&T, etc.

Still, I’d like to take a stab at what it would cost to watch the shows I really watch every month plus a guestimate on the “live” content based on current package pricing. I don’t know cable subscriber fees charged by folks like NESN, YES, etc. so I’m basing the price of getting all the Eagles games, for example, on 1/16th of the NFL Sunday Ticket price.

So, with that said, here is the list of TV I watch along with my estimated prices. Where available, I’ve taken prices directly from iTunes, and I’m estimating what I’d be willing to pay just for ESPN or CNN or the other “live” channels I want that aren’t OTA. These prices are per year.

My monthly cable bill is about $70 per month ($72.62 including box rental, remote rental, some of the taxes, and fees). That totals out to $840. So, I would be saving over $100 per year, avoiding commercials in most of the episodic TV (ESPN and live TV plus OTA could still sell advertising). The shows would be available when I want them and, if I used iTunes, the shows would be saved on my drives, available for viewing later over and over.

Am I forgetting any shows? How does this math work out for those of you that watch more TV? Keep in mind that OTA channels like ABC, NBC, CBS, FOX, etc. would still exist, so you wouldn’t lose things like American Idol or Dancing with the Stars or even Lost if you wanted to see it at the scheduled time.

Also, considering the paltry (by comparison) subscriber fees charged by Discovery, History Channel, TLC, etc., an a la carte broadcast-style offering would probably be within budget with the $100 savings.

Anyway, consider this a rough, back-of-the-envelope estimate. I’m curious what folks think is missing?

PS. All of this was prompted by this article on CNN reporting on changing TV habits. While it’s hard to take seriously any article that fails to mention commercial skipping with DVRs, it’s worth reading.

The Economist doesn’t really like some of the recent Internet acquisitions (sub required). The core of their concern is grounded on what you’d expect: some of these valuations seem completely out of whack. Their view of Ebay’s purchase of Skype is surprisingly harsh:

A Microsoft stake in AOL—which it would merge with its MSN portal—would come hot on the heels of last week’s purchase of Skype, an internet-phone company, by eBay, an internet-auction site. There is no doubt that there is huge commercial potential in internet telephony. But how that potential will come to fruition—and whether Skype will be the company that benefits—are very much open questions. Look at the raw numbers, and this seems like a deal with strikingly bubble-era economics: a price of at least $2.6 billion for a loss-making firm with unlimited ambition but expected revenues this year of only $60m.

…

Valuing a firm is tricky at the best of times (as is making a success of a merger), but it is especially hard for a young firm. The rationale of Rajiv Dutta, eBay’s chief financial officer, for the firm’s valuation of Skype does little to inspire confidence. He first compared Skype with eBay’s previous biggest acquisition, of PayPal, an online payment system that is not obviously comparable to a phone service (and which, unlike Skype, eBay knew intimately before the acquisition). PayPal cost 8% of eBay’s market capitalisation in October 2002, said Mr Dutta, whereas Skype cost only 4.8% of eBay’s current market cap. But is that the right measure? Skype’s revenue growth in the 12 months in which it has charged for some of its services, he noted, was faster than eBay’s at a similar stage in its development. Again, why is this relevant? Skype and eBay have completely different business models. Finally, its current losses notwithstanding, Mr Dutta thinks that Skype will have a long-term operating-profit margin of 20-25%—apparently for no other reason than that eBay also assumed that PayPal would achieve that same margin.

Ouch.

What’s interesting is that they aren’t knocking the importance of Internet telephony, just this deal. In fact, their cover story a few weeks back focused on the rise of Internet telephony.

I happen to buy the arguments put forth by The Economist. My reaction to the Skype deal was a muted, “Holy crap!” when I heard the numbers. Then, I was confused as to what Ebay and Skype could do for each other as part of the same enterprise. These aren’t complementary businesses as far as I can tell, even if they do some of the seller/buyer communications things I’ve been hearing about. In fact, I haven’t read one good explanation of why this makes sense as a acquisition and that’s probably the most unusual thing about this. It strikes me as a strategic partnership discussion that got way out of hand…