Software Marketing Resource Articles: 2005

You wrote the code, now how do you sell it?

Wednesday, December 28, 2005

Digital River Business Purchase Prices

If you are like me, you probably are curious to know what Digital River actually paid for many of their acquisitions. I did a little digging and have posted what I found. When reviewing the figures bear in mind that some of the negotiated companies mentioned earn-out figures are likely not integrated into the actual purchase price. The figures are not integrated into the actual purchase price. In other words if the sellers continue to perform and reach targeted sales figures they will likely receive bonuses that were negotiated at the time of purchase.

Of course the summaries below do not include the intricacies of each deal. Nearly all of the purchases involved some level of non-compete agreement. In fact many of the earlier deals had complex earn-out periods and conditions. I would encourage anyone interested in the complete details to refer to the Securities and Exchange Commission website. The excerpts that I included are from the SEC website and are publicly available.


Company Purchased





(+ 320,161 earnout)

2.5 Million


Public Software Library



Universal Commerce

(+ earnout)

2 Million
(+ earnout)


Walnut Creek CD ROM


1 Million



(+ conditions)



875 K
(870 K earnout)



750 K + 2.5 Million
(2.75 Million earnout)



1.1 Million with conditions + earnout options


Element 5

120 Million
(2.5 Million earnout)



7.5 Million (+ earnout)

The excerpts listed are from the Securities Exchange Commission websites and public filings.

April 1999
Maagnum Internet Group (aka Digibuy) -
In April 1999, pursuant to an Agreement and Plan of Merger by and among the Company, Maagnum Internet Group, a Connecticut corporation ("Maagnum"), and Cyrus Maaghul, the sole shareholder of Maagnum, Maagnum merged with and into the Company (the "Merger"). At the effective time of the Merger, Mr. Maaghul's shares of Maagnum common stock converted into the right to receive from the Company $2.5 million in cash, 88,809 shares of Common Stock of the Company, and up to an additional 320,161 shares of Common Stock that may be earned by Mr. Maaghul upon the achievement of certain business goals over the 24-month period following the closing date of the Merger.

In addition, pursuant to a Stock Purchase Agreement dated April 1, 1999 by and between the Company and Meiman Kentjana, a key employee of Maagnum, in consideration for Mr. Kentjana's agreement to waive certain rights with respect to Maagnum, the Company issued to Mr. Kentjana on the closing date of the Merger 22,841 shares of Common Stock and gave him the right to receive up to an additional 192,374 shares of Common Stock that may be earned by Mr. Kentjana upon the achievement of certain business goals over the 24-month period following the closing date of the Merger.

April 1999
Public Software Library (aka PSL)
Also in April 1999, pursuant to an Asset Purchase Agreement by and among the Company, Public Software Library Ltd., a Texas limited partnership ("Seller"), and the partners of Seller, the Company purchased substantially all of the assets and assumed certain liabilities of Seller in exchange for an aggregate of 161,842 shares of Common Stock of the Company.

June 1999
Universal Commerce (aka RegNow)
In June 1999, pursuant to an Agreement and Plan of Merger and Reorganization by and among the Company, Universal Commerce, Incorporated, a Delaware corporation ("RegNow"), certain stockholders of RegNow (the "Stockholders"), RegNow merged with and into the Company (the "RegNow Merger"). At the effective time of the RegNow Merger, the Stockholders received from the Company $2.0 million in cash and 306,884 shares of Common Stock of the Company in exchange for all outstanding RegNow shares. In addition, the Stockholders may receive additional shares of Common Stock upon the achievement of certain revenue goals over the 12-month period following the closing date of the RegNow Merger. In addition, certain individuals who are Stockholders are also eligible to receive up to an additional $2 million in cash if they remain employees of the Company for a period of 12 months following the closing date of the RegNow Merger.

October 1999
Walnut Creek CD ROM (aka Simtel)
On October 7, 1999, pursuant to an Asset Purchase Agreement dated October 7, 1999 by and among Digital River, Walnut Creek CDROM, Inc., a California corporation, and Robert Bruce, the sole shareholder of Walnut Creek, we purchased those assets of Walnut Creek related to its business of providing Internet downloads of its Windows and DOS-based software library, including the archives. In exchange for these assets, we made a cash payment to Walnut Creek of $1.0 million and issued to Walnut Creek 143,885 shares of our common stock.

August 2000
NetSales, Inc.
On August 24, 2000, pursuant to an Asset Purchase Agreement dated as of August 24, 2000 (the "Purchase Agreement") by and between the Registrant and NetSales, Inc. ("NetSales"), in exchange for 1,000,000 shares of common stock, the Registrant purchased those assets and assumed those liabilities of NetSales related to NetSales' software services business. The Purchase Agreement includes a contingent earnout whereby NetSales can receive up to an additional 350,000 shares of common stock based on performance over the 180 day period following August 24, 2000. Of the 1,000,000 shares of common stock issued at closing, 100,000 shares were placed in escrow to secure certain indemnification obligations contained in the Purchase Agreement. Subject to outstanding claims, the escrow will terminate 9 months following the closing.

December 2001
On December 28, 2001, pursuant to an asset purchase agreement dated as of December 28, 2001 among Digital River, Network Commerce Inc., and, Inc., we purchased certain assets and assumed certain liabilities of Network Commerce related to the business line in exchange for cash in the amount of $875,000. The asset purchase agreement includes a contingent earn-out whereby Network Commerce can receive additional cash earn-out payments of up to $870,000 based upon the revenue generated by the business over the 10 month period following the closing.

August 2001
On August 2, 2001, pursuant to a Stock Purchase Agreement dated as of August 2, 2001 by and among Digital River,, Inc., a Georgia corporation ("RegSoft"), and the following individuals (collectively, the "RegSoft Selling Stockholders"): Jason Foodmen, Robert Verzera, Ken White (also serving as Stockholders' Agent), Charles Zino and Robert Zino, we purchased all of the issued and outstanding shares of RegSoft in exchange for $750,000 in cash and a note for $2,500,000 that is payable in full on February 2, 2002. The Stock Purchase Agreement includes a contingent earn-out whereby the RegSoft Selling Stockholders can receive up to an additional $2,100,000 in cash based upon the revenue generated by RegSoft over the 12 months following the closing, and up to an additional $650,000 based on the number of RegSoft clients converted to our platform on or before the fifteen month anniversary of the closing.

November 2003
GameZone, Inc.
In November 2003, we acquired substantially all of the assets and assumed certain liabilities of GameZone, Inc., a provider of computer gaming resources and download destination sites on the Web, for the purchase price of $1.1 million in cash, of which $934,000 has been paid as of December 31, 2003. Additional goodwill of $821,000 was recorded as a result of this acquisition. We will amortize other intangible assets acquired, consisting of non-compete agreements and technology/tradename, over a three-year period. The agreement also provides GameZone the opportunity for additional cash or stock earn-outs based on our achieving certain revenue metrics related to computer gaming resources and download destination sites on the Web over the course of the thirty-six months and, at our sole discretion, the sixty months following the close of the acquisition. Such earn-out amounts, if paid, will be recorded as goodwill as they are considered incremental to the purchase price.

April 2004
Element 5 AG (ShareIt)
On April 19, 2004 we announced that we signed a definitive agreement to acquire element 5 AG, a privately held company based in Germany. Under the terms of the agreement, we paid $120 million in cash to acquire all of the outstanding shares of capital stock of element 5. We also may pay up to an additional $2.5 million in cash based on element 5's operating performance over the first 24 months subsequent to the acquisition. Such earn-out amounts, if paid, will be recorded as goodwill as they are considered incremental to the purchase price. In the second quarter of 2004, in connection with our acquisition of element 5, we began implementation of a plan intended to eliminate duplication of resources within the consolidated company. The plan includes the elimination of customer service positions at element 5's Greenburg, Pennsylvania customer service center and the termination of the Greenburg facility lease by the end of third quarter 2004. As of June 30, 2004, we have included $0.9 million towards the acquisition cost of element 5 related to this plan.

June 2004
On June 1, 2004, we announced that we acquired substantially all of the assets and assumed certain liabilities of Fireclick, Inc., a leading provider of Web-analysis solutions for online retailers. Under the terms of the agreement, we paid $7.5 million in cash. The agreement also provides Fireclick the opportunity for an earn-out based on our achieving certain revenue and profitability targets attributable to Fireclick over the course of the three years following the closing of the acquisition. Such earn-out amounts, if paid, will be recorded as goodwill as they are considered incremental to the purchase price.
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Violence in Games

With the holidays approaching I felt it that it was appropriate to address the issue of violence in games. As a parent I abhor violent games. Actually I dislike the way companies use violence to market to children. Sadly more and more entertainment companies are using use violence as a marketing tool.

As a professional I understand the need for businesses to make money. The fact of the matter is violence, like sex, sells. Compare the revenues in the software industry of an educational software developer like Flix Products or Pharos Games to that of Duke Nukem, sadly you will find that regardless of the high quality software, violence outsells quality interactive educational tools every time. Why?

Is it the emphasis society places on gore, making it "cool", or is it the lack of emphasis on education that is creating a society where there is disdain for intelligence and celebration for violence.

Software developers in the entertainment sector face a difficult decision, do they morally and ethically write software that they value and believe in, but won't feed their families? Or do they turn to the darkside and embrace violent games with narcistic twists that allow players to personalize their warriors?

More and more products are emerging with war themes or behavior that any sane individual would find offensive. While adults, in most cases, can distinguish between reality and fantasy but with the technological advancements and graphical barbaric nature of games being released.

Now, I'm not really a fanatical person, or parent for that matter, unless of course you ask my children, but I have to wonder who is at fault? Is it the parents who complain about the violence in the games but have little interest in those with educational value? Let's face it in this equation in most cases it is the parents who pay for the violent games, often succumbing to peer pressure so that their child will not be ostracized. Is it the fault of the media that glorifies violence or is the fault of society that fails to speak up? In modern society there is a stigma associated with being smart, it is a heavy cross for any child to bear. It is so much easier for children to be cool and play Quake. What values are we are ultimately instilled in these children's? It the fault of the developers themselves who capitalize on the blood being spilled, constantly pushing the limits of what is socially acceptable?

About the Author:
Sharon Housley manages marketing for the NotePage and FeedForAll product lines.

Educated Consumers

Not too long ago, a colleague asked me why we invest so heavily in consumer education. We have made a conscious decision to spend marketing dollars on consumer education for a very simple reason. Educated consumers are simply better customers.

Lets take a closer look at why educated consumers are better customers.

Less Technical Support.
1.) Educated consumers require less technical support. The reduced technical support results in lower overhead costs. Often educated consumers can further reduce the support burden by assisting or educating other customers or potential customers in forums, newsgroups, user groups or elsewhere in an industry community.

Often users with a strong technical background or understanding will often assist in the forums and provide users technical support. The result: an educated consumer is a happy and helpful customer.

Easier Sales.
2.) Generally speaking educated consumers have a better understanding of the technology, how it can be used and how it will benefit them. A customers understanding that an application will result in saved time, can easily justify the software's expense. Cost becomes less of an issue when long-term value is understood.

Reasonable Expectations.
3.) I hate to say it, but back in 1996 when we started out, consumer ignorance resulted in unrealistic expectations. Consumers purchased expecting that software would do their dishes and vacuum. Regardless of how well the software did what it was designed to do, if a customer expects it to do something else, they will not be a satisfied customer.

Educated consumers have realistic expectations and understanding of what can and cannot be accomplished.

Kinds of Consumer Education

1. Articles.
Educational articles not only propagate the success and understanding of a technology, but well written articles will often establish the writer as an industry expert.

Example (on the bottom)

2. White Papers.
Real world examples of how other users are using software to resolve problems or save time are often great illustrations of technology in action.


3. PPT Demonstrations.
Power point presentations not only assist with user education, but also can be used by User Groups to further evangelize and educate potential users.

All in all, educated consumers result in a happier user with realistic expectations. Ignorance often results in dissatisfaction and unrealistic expectations while education leads to long term happy and helpful customers.
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Sunday, December 25, 2005

New Years Predictions

Technology Predictions for 2006 and Reflections on 2005 - Technology is usually thought of as impersonal, but something needs to be recognized; without technology the personal elements of the 2005 tragedies would not likely have been conveyed to the extent and timeliness they were. Reflecting on 2005 and looking forward to 2006, technology will undoubtedly continue play a significant role in the future both on a personal and impersonal level.

2006 Year of Opportunity - The start of the year is traditionally the time for making lists of things that we won't do for very long. It's also the time of year when we re-arrange our homes and offices, look back over the year that was, and try to predict the year that lies ahead. 2005 was an interesting year for software marketing. The "try before you buy" concept continued to grow from strength to strength, PPC grew even more interesting, RSS flourished, and previously obscure words like "blog", "wiki" and "podcasting" started to become mainstream. 2006 also looks set to be an interesting year, so without further ado, my predictions for the year that lies to ahead, subject to alteration, amendment and selective amnesia.

Steve Rubel / Micro Persuasion Trends to Watch - One year from now, what will the state of the "feedospehere" look like? First, in order to look ahead we should look back.

Robin Good's New Media Predictions - If you stop looking for a second at the hundreds of interesting new tools and events happening online, what are the key trends you see? Where among the new emerging online media, should you be looking next when trying to understand where to invest your future energies and money?

PC World Winners and Losers of 2005 - What were the best and worst tech stories of the year? Our expert separates the good from the bad. In some cases, they're the same.

John Batelle's Predictions - This post marks my third year of making predictions for the coming year. I'm emboldened by not failing utterly in the past two years (well, for the most part), but I am sure this will only ensure that these prognostications will prove immeasurably off the mark.

Kevin Buron's 2006 Technology Predictions - What's going to happen in 2006? I don't know honestly but I have a few ideas.

Top 10 Tech Trends for 2006 - Once again, it's time for's annual look into a crystal ball for technology trends in 2006. Never mind that the smartest people in tech wouldn't dare make serious predictions about what innovations will catch fire next year. We make a humble try anyway.

Calacanis Predictions - Jason Calacanis predictions, Jason is the CEO of the blogging network Weblogs, Inc.

Top 10 Web Predictions for 2006 from Conversion Rater - My guesses at what some of the top web stories will be in 2006. Naturally, the real top 10 stories of 2006 will probably be ones that are impossible to predict, but that doesn't mean it isn't fun to try.

Corante Network Thinks about 2006 - Over the past couple of weeks, Corante Network contributors have been prognosticating about what they think is in store for 2006. Below is my effort to synthesize some of the larger themes articulated by my colleagues.

Scott Maxwell Now What? - 2005 is almost over, Now What?.Predictions for 2006

SEO Predictions - This started with a little list of things I thought had changed between 2005 and 2006 and turned into a large list of brainstormed ideas of things to keep in mind for the upcoming year. The first 30 I tried to compare the evolution somewhat. The rest didn't quite fit anything, and the whole thing turned out a bit random, but ended with the nice round number of 40.

Worst Tech Moments in 2005 - It was the year corporate and university data spills just kept coming, and the Supreme Court decided technology companies can be held responsible for the bad behavior of their users. Big firms lined up to help repressive governments; governments helped themselves to private phone calls and e-mail. A medical miracle transformed, overnight, into heartbreaking scandal.

More From Robin Good - Here are ten more disruptive and powerful changes that from my unique point of view, I see coming your way, whether you like it or not. I think there are still more key innovations and new technology changes that I am not yet covering here, but between my previous post and this, you can really get a broad and comprehensive idea of which are the web and the emerging new media technologies to master and watch in the coming months.

Big Stories in Search - from Danny Sullivan "Search caught fire last year, with new tools, services and virtually constant activity. Here's a look back at some of the most memorable themes and trends of the past year year."

ISE Predictions - It is that time of year again. Between the extra helpings of turkey soup and sandwiches, writers of every stripe are making lists of predictions for the coming twelve months. Last year, we got just over half our predictions correct. This year we hope to do as well or better but in an industry as dynamic and rapidly changing as the world of search, we couldn't expect to hit a home run on every prediction. The only thing that is certain is the idea 2006 will be as or more interesting than 2005.


Monday, December 12, 2005

Techie Gift Suggestion Bargains

$ 5.96

Mensa Number Puzzles - Some of Mensa's best math brains have set this range of fiendish number questions of all shapes and sizes for every level of ability. You'll find number grids, series problems, magic squares and much, much more -- but all you need to master these mind-teasers is a sense of fun, a methodical approach, common sense and patience.

$ 7.49

Mensa Mind Busters - mental mind twisters and brain teasers.

$ 5.99

Mensa : Secret Codes For Kids - The world of spies and secret codes is one that almost all children enjoy, both for its mystery and danger and its intellectual challenges. With this collection of messages encoded in puzzles, young Maigrets and Smileys can twist and turn their brain cells while honing their math and reading skills. Created as part of a series that stimulates children age nine and up in the mental arts, Robert Allen`s Mensa: Secret Codes for Kids even uses some of the most crucial secret messages of all time, artfully concealed in enjoyable puzzles for your young code-breaker.

$ 8.95

Mensa Brain Bafflers - Now masterminds of all ages can stimulate their mental prowess with these portable boxes of mind benders, created by Mensa's puzzle experts. 4.8" x 3.2". 70-80 cards.

$ 11.95

Vodoo Computer - You've tried logic, common sense and tech support. Now it's time to relate to your computer on its own terms: magic and voodoo. This 5-1/2" tall Voodoo "doll" comes with pins to help you cause or prevent such maddening glitches as Unimplimented Trap, Virus, Fatal Error, and What's That Smell? Show your computer who's boss once and for all. Includes 5 black pins and 5 white pins. Hand-stitched.

$ 8.95

Tech Micro Tool - Features Model Number: BXB-1 Strong tempered steel Black Oxide finish Precision pliers Phillips screwdriver Flat screwdriver Wire cutter Shear Locks to a key ring

$ 24.95

James Bonds Gadgets - An exclusive peek inside Q's lab highlights this look at the gadgets used by 007 in his famous films.

$ 11.21

A Dilbert Treasury - What Do You Call a Sociopath in a Cubicle? Answer a Coworker. The former occupant of cubicle 4S700R at Pacific Bell seems to have made a go of this cartoon strip thing. What began as a doodling diversion that Scott Adams shared with his officemates has exploded into one of the most read cartoon strips worldwide.

$ 34.95

Dilbert Zone Polo Shirt - Dress up (or down) with Dilbert Dilbert embroidered polo shirt will give you that certain "je ne sais quoi". Comfortable 100% cotton denim blue pique polo shirt is suitable for both office and weekend wear.

$ 19.95

Circuit Board Tie - Favorite circuit board tie Our most popular computer tie will add pizzazz to any attire. 100% polyester.

$ 29.95

Circuit Board Cube Clock - Add sophisticated flair to your office With this unconventional clock made from real recycled circuit boards. With its clockworks cleverly mounted on clear Lucite front, time appears to "float" on your desk! Varied colors and patterns. Enhances any office, computer den or home office decor.

$ 19.95

Pen Radio - ANothing gets better than the portable, hands free pen radio! With this pen radio you can scan your favorite FM stations with a single touch. The pen radio also has individual ear phones with a long cord for crisp FM sound including volume control!! Plus, it has a detachable ball point pen and clips easily to your clothing for hands free listening.

$ 29.95

User Friendly Tie - This sharp looking tie with tehnobabble and computer icons printed all-over a navy background will be your favorite when you have to wear one.

$ 44.95

User Friendly Books - Cartoon books keep you entertained One of the funniest, most off-beat, and original comic strips to come along in years, User Friendly tells the fictional story of Columbia Internet, "the friendliest, hardest-working, and most neurotic little Internet Service Provider in the world".

$ 9.71

The Root of All Evil - It's back to Columbia Internet, the friendliest, hardest working, and most neurotic little Internet Service Provider in the the world.

$ 22.95

Lord of the Rings 2 DVD Set - Frodo Baggins and the Fellowship continue their quest to destroy the One Ring in The Lord of the Rings: The Two Towers. This double-DVD set includes the PG-13 theatrical version of the film, and a second disc with over two hours of special features and extra content including a 10-minute preview of The Return of the King, the final installment of Peter Jackson's epic film trilogy

$ 19.95

Lord of the Rings; Activity Studio - This specially created CD-ROM is an ideal film companion to The Lord of the Rings: The Two Towers and consists of 9 amazing sections. A Print Room allows you to print fantastic imagery from the Two Towers film including Posters, Flyers, Bookmarks, Greeting Cards, Calendars, Party Kits, and more.

$ 29.95

Transforming Global Atomic Clock- You don't need to travel the world to find this incredible new alarm clock. For the first time ever you now have thtle accuracy of an atomic on a global scale. That's right. Not only does it stay in contact with the atomic clock in Colorado for accuracy that is 10 billionth of a second, it will also connect to other atomic clocks around the world. From Europe to Asia you'll be connected.

$ 39.95

Motaka Bionic Ear - Stop straining to hear words when you're in the back of the room or watching TV with the sound on low--our high-powered hearing enhancer will clear things up for you! The Super Ear Wireless Listening Device is a real breakthrough in sound magnification technology; you'll hear spoken words clearly and distinctly.

$ 19.95

Wireless Cellular Antenna - No more screaming on your cell phone while driving, "Can you hear me? Can you hear me now? How about now?!" Its not only annoying when you hit a spot of bad reception, it makes driving dangerous. With this quick-to-affix wireless glass mounted antenna, though, I can hear perfectly, and my blood pressure doesn't even rise.

$ 12.98

Shocking Computer Mouse - Your spouse spending too much time shopping online? Here's a great way to get their attention without a lot of "static." Just replace their ordinary mouse our very special electric one when they're out of the room. When they come back, they get the shock of their lives!

$ 9.98

Solar Engine Radiometer - No electricity! No batteries! No power except light! The brighter the light, the faster it turns. Runs up to 3000 rpm. Used in science classes for experiments. Partial vacuum in glass globe where 4 vanes spin on needlepoint bearing. Spins continuously from sun or light bulb.

$ 14.95

Set of 6 Wooden Puzzles - Six interlocking puzzles in this handsome set are designed to test your skill, dexterity and patience. Their solid wood construction also makes them interesting display pieces. Range from easy to medium levels of difficulty.

$ 14.88

Fireworks Kaleidescope - The coolest light show we've ever seen! Choose your volume then lay back and treat your senses to an explosion of bright colors and mind-blowing sound! Plug your personal headphones into the jack and listen to your personal show in stereo.

$ 19.95

Personal & Mini Desktop Water Dispenser - Fun and functional mini water dispenser. Just fill and chill the resealable 8-glass bottle with water, juice, iced tea, etc., and keep it handy on your desk or countertop.

$ 8.95

Electronic Christmas Tree - Fun This electronic X-mas Tree contains two astable flashing circuit. The led's flash randomly. Nice gadget

$ 69.95

300 in 1 Electronics - Everything You Need to Build 300 Exciting Electronic Projects.

$ 14.95

Knight Invader Car - The future of toys has arrived. KNIGHT INVADER is a super race car that includes mini-construction projects, teaches the basic principles of electricity, and demonstrates three different modes of propulsion. This sleek super racer has it all and a little bit more. KNIGHT INVADER can blow a fierce force of air to propel it off the starting line and challenges any contender to try and keep up with it, when changed into Direct motor drive.

$ 17.95

Voice Changer - Change your voice from male to female or vice versa. Add a vibrato sound to voice like the sound used to protect witnesses or anonymous rats on TV.

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Monday, November 28, 2005

The Golden Hour of Purchasing

Michael Halls from FileKicker recently conducted a fascinating statistical study. The study tracked the habits of approximately 2000 purchasers and the relationship between the time of the purchase and download. The results spoke of the "golden hour". Actually the results were so skewed, they more shouted GOLDEN HOUR, with the significant majority of purchasers occurring within the first hour of a download. Traditionally purchases occur within the first 24 hours of download as seen on the first graph Michael presents:

The Y-Axis is a percentage, the X-Axis is the number of days from download that the purchase occurred. Clearly about 65% of users order the product within 24 hours of downloading the software. Michael did not track the number of users that purchased prior to downloading, if those purchases were counted on day zero, the percentage would likely be significantly higher.

In order to further evaluate the habits of the purchaser, Michael took his study a step further evaluating the hour in which the purchaser purchased.

The second graph records how many hours after the download the purchase is made. The study reinforces the idea of a "golden" hour for shareware. If you don't close the sale in the first couple of hours, you will likely not close it at all.

The results were not surprising for consumer related applications or what would be considered "impulse" buys but the graph incorporated the results of business applications as well. While consumer purchases are somewhat predictable, the habits of business purchasers was a bit startling, as industry experts frequently claim that making a sale to a business takes more time. This may be true for some vertical or database intensive but according to the 2000 products and purchases tracked it is clear that developers need to seize the golden hour.
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Software Activation

Software piracy, software licensing and license control are all important issues to software developers. Small software developers did not have access to a system available to control a number of installations of licensed software products. A company could obtain a single license and use in among the network, or there could be a breach of security allowing multiple users to use fully licensed software on many different computers.

Tying software installation to hardware is the most common way to prevent or restrict those illegal activities. Hardware tying, however, has a drawback to software publishers: a user has to pass a Hardware ID to the software manufacturer at the time of ordering, which might affect his willingness to purchase that product at all.

With the development of the Internet it became important to control software licensing and distribution online to protect revenues from losses incurred by both intended and casual software piracy. An online license management system helps reduce both forms of piracy by ensuring that each copy of the software product being installed is legal and has been installed on a PC in compliance with its license terms. Installations beyond those allowed in the license agreement will fail to activate, thus preventing both casual and intended piracy.

The main question of this research is whether or not online software license activation is a effective solution of reducing software piracy. It was interesting to figure out if its direct or indirect benefits prevail over its disadvantages.

This research presents an in-depth evaluation of ActivateSoft.NET, a software activation system. It describes software activation policies as sets of parameters that allow precise control on how software end-user license agreements are enforced.

Finally, an experiment is designed and run, and raw data is collected on the usage of real-world software. Collected data is analyzed to find out how online license management can affect software usage patterns, providing a hint to answering the key question: whether or not the use of software activation reduces software piracy.

By O. Afonin

Quality Content to Rule the Web

The age old question keeps coming up, how do you retain website visitors, how do you make visitors return to your website? The answer should come as no surprise, fresh content. Content is truly king, the fresher the content the better the site. What many webmasters fail to realize is that there is an endless supply of content on the web that is freely available to webmasters.

Not only can public domain material be freely used and syndicated on websites, but a number of content publishers provide content in exchange for a link back to their websites. A variety of contents related to the website theme that is integrated into the website will attract the interest of both search engines and web surfers. The key to taking advantage of free content is integrating or including content that is directly related to the theme of the website.

1. Articles
Article repositories exist that categorizes content articles. Searching the repositories using keywords that are related to a websites theme will result in a wide variety of articles available for publication that are related to the site's existing web content. Articles in the repositories are available for syndication, which means webmasters can freely include the articles on their websites as long as they include the author resource box with valid links.

Use the following to locate topic specific articles:
Free Website Content -
GoArticles -

2. RSS Feeds
The contents of many RSS feeds can be syndicated. The added benefit of syndicating feeds is that they are frequently updated which will result in a steady stream of fresh changing content. In order to reap the benefits of syndicating RSS feeds, webmasters should use either an ASP script or PHP script to display the feeds contents as HTML.

Webmasters can navigate categories of RSS feed directories to locate related topic feeds or search for feeds using keywords.

Search the following directories to locate related RSS feeds:
RSS Network -
RSS Locator -

Free script for displaying RSS feeds as HTML:
rss2html.php -

3. Shareware Listings
Consider populating a website or section of a website with related niche software applications. Many software companies offer applications as free downloads. The downloads allow potential customers the opportunity to try an application prior to making a purchase decision. Categorizing and displaying software that relates to a website theme can generate a lot of interest. Most developers provide product descriptions and information in a PAD file which is simply XML. Developers can locate PAD files using the ASP site and the PAD kit can be used to display the contents of the PAD file.

PAD Kit -

4. Creative Commons
A Creative Commons license allows creators to place conditions on their copyrights. Many artists allow other publishers to use their creative and artwork, occasionally there are conditions that credit must be given, while others are available freely. Web publishers can find a lot of unique content, images and creative using the new Yahoo Creative Commons Search.

The Yahoo! Creative Commons Search service finds content across the Web that has a Creative Commons license.

Yahoo Creative Commons Search -
More on Creative Commons -

5. Forums
Consider creating a community forum where like-minded individuals or at the very least individuals with a common interest can discuss problems, concerns, related products or ideas. The forum posts will generate a fresh stream of new and self perpetuating website content.

Free Forum *note be sure to stay current on updates
PHPbb -

6. White Papers
Provide white papers, customer profiles or endorsements that detail how applications can be used in a specific industry. Creating a white paper section that explains how a specific product or service is used in a specific industry to solve a problem or increase productivity gives potential customers insight into how a specific service, product or technology will help in the course of a day.

Sample White Papers -

7. Directories
Creating a directory of related sites while time consuming can result in significant traffic. Directories typically are well respected resources and rank well in search engines.

Sample Niche Directories :
Podcasting Tools -
Finance Investing Feed Directory -

8. Newsletter Archive
If done properly online marketers see an almost instantaneous sales or traffic increases when they send newsletters but many do not benefit long term from the newsletter. Consider creating a newsletter archive, the content is already built, why not benefit from the potential traffic and unique phrases used, to attract new or potential customers?

Sample Archive
Software Marketing Newsletters -

9. Blog.
Ride the technological wave. A daily journal with information related to product or service launches, specials, technical tips, new product announcements

Sample Blog Archive
Our Blog -

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Wednesday, September 28, 2005

ISDEF Software Conference at a Glance

Commentary On Traveling to RUSSIA

I recently attended the ISDEF conference for software developers in Moscow, Russia. The conference was nothing like I had envisioned. If any western developers have interest in working with Russian developers in some capacity, they really ought to consider attending the conference in 2005. The possibilities and potential in Russia is really remarkable. And if you have not thought about this in some way you ought to consider it, as there are great opportunities waiting to be explored!

The conference attendees were not hobbyist, many of them were involved in collaborative projects and multiple businesses. The efforts made to pool resources was something that western developers could learn from.

ISDEF Overview - Tuesday
Well the initial plan was to meet David Halls from Emetrix, in New York at JFK and fly from JFK to Moscow, but after sitting for a few hours on the tarmac in Salt Lake, David's plane returned to the gate with mechanical issues. His flight was postponed until the following day, but not before sending his luggage to LAX. Best estimates put his bags in Russia by Saturday (it is now tuesday) :-( I didn't expect the trip to be problem free, but I have to admit I'm really glad that my bags, are not in Los Angeles.

Fortunately for me I found Bill Dickson, Paul, and Brant all from Digital River were on the same very cozy flight with me. Just knowing someone else on the flight was helpful. Did I mention the flight was cozy? Ok, cozy is an understatement. Nine hours on a flight in the second to last row ..... with Garfield as the movie de jour was not a fun trek :-(

ISDEF Overview Wednesday
When I arrived in Russia I was greeted by Alexei and Roman (thanks guys!). There mission was to transport me to the Holiday Inn Vinograd about a 1/2 hour away.

The ride was harrowing, driving in Russia is like nothing I've ever experienced. Alexei, fortunately was a very good, but somewhat aggressive driver. A few days into the trip, it was clear that what a locals said was true, traffic laws and red lights were merely suggestions.

After arriving at the hotel I met Serge Petrov from SoftLogica and Alex Katalov from Elcomsoft, whom I had corresponded with via e-mail, but had not previously met in person.

It seemed a relatively quiet wednesday, with most of the early arrivals staying in the lounge and chatting. For the Americans this meant sharing travel tales, and struggling to stay awake. One of the guests from winrar ran into some difficulties with the police in Moscow while visiting the Kremllin, apparently he wanted to meet Putin :-(

I had dinner with Bill Dickson from Simtel and discussed industry innovations and changes, speculating on what the future might hold.

ISDEF Overview Thursday
Thursday morning after connecting to the hotel's wireless network from my room I went to breakfast and met Misha Dyachkov from Pingram Marketing. I've known Misha for a number of years and he was the one who convinced Dave Collins from Shareware Promotions and myself to attend the ISDEF conference.

Dave, Misha, myself and some of the Digital River group took the hotel shuttle (big cars are safer) to Moscow's City Center to "see" Moscow. We visited Red Square and St. Basil's Cathedral. Then we headed back to officially register for the conference. The hotel shuttle was full of ISDEF attendees, and I had the opportunity to meet Vasiliy Tarasov from from Consult IT Now, as he allowed me to sit on his bag to make the ride more comfortable. :-)

Thursday evening ISDEF hosted a huge barbecue. A popular Russian band provided entertainment. The energy and passion for dancing was unlike anything I'd ever seen. I had dinner with Mike Granin and Denis from SoftIdentity. They are both from Siberia and they managed to dispell my preconceived stereotypes of life in Siberia. It was particularly nice to meet Mike and Denis because SoftIdentity just completed a new design for our FeedForAll application.

ISDEF Overview Friday
Amazingly even with the late night discussions and dancing, breakfast was packed. I met Serge Sushko from Alchemy Lab and . Serge and I have corresponded online for a number of years, in fact he is a NotePage integration partner, so it was a real treat to meet him in person!

With more than 430 software professionals registered for the ISDEF conference you did not generally have to look to far for synergistic relationships. I spent much of the conference milling around and chatting with developers. While the ISDEF board had made accommodations to provide realtime translations in English for foreigners, I found that networking with the Russian developers more enjoyable.

Surprisingly the language barrier was not a problem. Most of the developers in attendance spoke english, or at the very least read English The handful of times that someone had difficulty understanding me (or vice versa), I was able to recruit someone nearby to translate. While my crash course in Russian proved to be completely useless, it did add comic relief to the conference. While my pronunciation of the handful of Russian words that I had learned on my own usually resulted in bursts of laughter from the Russians, I found them to be gracious hosts and truly incredible business people.

Surprisingly I was not overly nervous about my presentation on Relationship Marketing. I had my speech written out, which made the translation go a little smoother than some of the other English speaking presenters. I could explain an entire slide without interruption, and then Misha would translate for me. I think the lack of nerves was ultimately because I knew that Misha would make me sound OK (and he did) interjecting editorial comments and humor along the way. :-) Nikolay from Agnitum and Chad from eSellerate were also both on hand to assist with presentation material if the need arose (thanks guys).

Friday evening Digital River hosted a reception with games and competitions for attendees, similar to the four corner theme at the Shareware Industry Conference (without the sumo wrestling).

I met up with Alexander Gorlach from MAPIlabs. We've worked with Alexander, in the past and it was a pleasure to meet him in person. We discussed possible ways we might work together in the future.

ISDEF Overview Saturday
Saturday resulted in more networking, although the late nights were beginning to show on some faces, the resilience of the attendees was really quite remarkable. I spoke with Michael Popov from Computerra a popular russian computer publication. I also had the opportunity to discuss some of the contrasting cultural differences with Mykola Rudenko from Rudenko Software. Mykola is from Kiev in the Ukraine, and for those westerners that don't know the Ukraine is not Russia. A point Mykola quickly pointed out. ;-)

One of the sessions on venture capital ran late, so dinner was somewhat staggered. I sat with Tatianna from Abbyy Software who has a palm application that translates russian to English! No more heavy dictionary for me!!! :-)

Final Thoughts
For those Americans interested in going next year, but concerned about the security. The security leaving Moscow was *really* extensive, I went through 7 security checks and every single bag on the flight was hand searched.

There is enormous potential in the Russian market. I hope to see more Russians this summer at the Shareware Industry Conference and more foreigners at ISDEF in 2005. Bridging the east and the west will benefit both groups of developers. There are significant opportunities for exchanges and synergistic relationships.

PPT Presentations from ISDEF Sessions
All of these sessions are in English. Russian presentations will be placed on the ISDEF website.

Basic Search Engine Optimizations (Dave Collins)
The Website as a Sales Tool (Dave Collins) ** this is a great one!!!
A Global Solution for a Global Economy (Brant Pallazza)
Relationship Networking & Partnering (Sharon Housley)
Affiliate Marketing Today (Brant Pallazza)
Registration Incentives (David Halls)

ALL Powerpoints (Some in Russian


1.) There are few hobbyist in the Russian shareware community, whether its the barrier to entry or the low cost of living in rural regions of Russia most Russian software companies have multiple employees.

2.) The business networking occurs all day and all night in Russia their is no distinction between business time and pleasure time.

3.) There are major industry changes underway in the area of registration services.

4.) The Russian community is very viral, and they strongly rely on each other for advice and recommendations.

5.) Relationship networking is key to growing into a variety of market segments. The best relationships are mutually beneficial. Partnering and networking is hot, more and more sites and developers are joining together to provide a value ad. Find ways to help each other.

6.) The software market really is global. US developers tend to be US centric and do not see the market potential in other regions or the possibility of partnering to reach those markets. Russians understand the benefits of reaching out of their circle and are eager to find others who will help them do this.

7.) While there are significant cultural differences between the US and Russia the underlying desire for business success is the same. The Russian developers were very open sharing ideas and information.

8.) Very few Russian developer's target specific audiences (or verticals) with their software. This is still an untapped market.

9.) Russian's were very honest and direct with their opinions, it was refreshing to cut through the niceties and get honest critical feedback about issues.

10.) It is safer to fly than to drive in Moscow.

Announcements at ISDEF

SWREG - Probably the most surprising was the announcement that Steve Lee is stepping down as CEO of SWREG. Get the full story about SWREG

DaveTalks - Dave Collins has announced a new look and format for his software article site

FeedForAll beta Announced - We announced the beta release of FeedForAll and RSS creation tool.

RSS4U - Mike Grannin announced a new project related to RSS. A free online newsreader.

Thank You's
Thanks to the ISDEF board for presenting a great, professional conference and welcoming the westerners into your world. Also a very special thank you to Misha for encouraging me to attend the conference and ensuring that I was properly introduced to everyone at the conference!

ISDEF 2005
As I understand it the ISDEF conference in 2005 will likely be held again at the Holiday Inn Vinograd, the hotel was very nice and were able to accomodate the needs of the conference. If you are a westerner contemplating attending please feel free to e-mail me with any questions related to the conference or travel. I will help you in anyway that I can.

About the Author
Sharon Housley manages marketing for the NotePage and FeedForAll product lines.

Ego Search RSS Feeds

Ego searches are free and simple searches designed to monitor blogs and news portals for mentions of your company, product, competitors or other specific keywords. Conducting ego searches not only allows you to stay informed, but also allows you to maintain a strategic advantage over competing companies.

A number of new Internet services are freely available that make these 'ego searches' painless and easy. Dynamically created keyword based RSS feeds, update in your RSS reader or news aggregators, each time new information containing the keyword appears in the searched resources. The dynamic feeds match requests against new information, as it comes online in real time.

The following free services allow for RSS feed ego searches.

Google News - Simply conduct a keyword search of Google News and then click the text that says "RSS" then save the url of the RSS feed into your news reader. Every time a new article with that keyword appears in Google News the feed in your RSS reader will automatically update.

BlogPulse - Find out what is being said about your products, company or your industry in the blogosphere. Conduct a keyword or url search on BlogPulse. Click the orange RSS icon above the search results and save the feed in your reader. Each time the keyword appears in a blog indexed by BlogPulse you will receive a new item in your feed reader. Another feature of BlogPulse is it will graph the keyword occurrences, providing a picture representation so that trends can be easily visualized. Hovering over the lines of the graph will provide details of actual blog mentions.

PubSub - Search on a keyword, then save and add the feed to your RSS reader using the icons provided. Optionally with PubSub you can direct your search to only alert you of posts in specific areas of interest including Press Releases, SEC/EDGAR Filings, Newsgroup Posts, or Weblog Entries

Technorati - Create watch lists, by entering the search term add item to the watch list and then scroll to the bottom click the blue RSS icon to obtain the url of the RSS feed that can be added to your reader. Technorati is a real-time search engine that keeps track of what is going on in the blogosphere. In order to setup a watchlist you will have to create a Technorati account.

Ice Rocket - Simply search Ice Rocket then click the RSS 2.0 button to obtain the url of the RSS feed that contains your search term. Add the url to your RSS reader or newsaggregator.

Find Articles - Traditional media channels can even be monitored using RSS. FindArticles routinely scans magazines and publications for keyword mentions. Conduct a search then click "RSS Alert" to obtain the url to the RSS feed. Add the feed to your reader to receive instant notification of new articles.

NewsTrove - NewsTrove indexes millions of news articles from a myriad of sources. Build an RSS feed on any topic imaginable. Enter your search words in the search box. Click 'Search' click the orange XML icon on the right side of the search results page and save the feed to your news reader.

BlogDigger - BlogDigger monitors the blogosphere and generally what is said daily in the blogs. Conduct a search on Blogdigger and click the orange XML icon to retrieve the url of the search feed. The feed should then be added to your RSS reader.

DayPop - Conduct a search and click the icon on the right that says XML, save the feed to your RSS aggregator. Only the most recent search results will appear.

Yahoo News - Conduct a search then click "view as RSS" in the right column save the feed in your aggregator. The feed will check Yahoo news for mentions.

Overall, ego searches are an excellent way to stay informed and maintain a strategic advantage over competitors. Knowing exactly what your online competitors are doing provides a competitive edge that can be used to your advantage. Keyword RSS feeds can be used to monitor key phrases for trademark abuses or monitoring the effectiveness of a specific press promotion. Although they sound daunting ego searches are simply good business sense.

Sunday, August 28, 2005

Competition is Good, Copying is Bad

I've always been of the opinion that competition is a good thing. It encourages all of us to be better and make better products. While it might be true that imitation is the sincerest form of flattery, copying someone else's work is simply wrong.

We recently came across a competitor using our sales copy. The competitor was using a web graph showing the traffic on one of our sites, along with our sales copy to promote their competing application. Digging a little further, I realized that their competing application was, in both form and function, identical to our application. The competing program contained identical screenshots, custom program icons and our help documentation. While the code of the program was, in fact, different, it was clear that our copyright had been violated.

We are not the first company to have our copyright violated and once the initial emotional reaction passed, we took action.

Dealing With Copyright or Trademark Violations:

Who, What and Where
Before reacting, it is important to do homework and research the alleged content violator. Arm yourself with information. Determining the who, what and where will guide you in taking the appropriate steps.

Determine WHO is violating your copyright
Research the website: do a Whois lookup to determine the site's owner. The domain owner can be found by entering the domain into and clicking on the link that says "Whois Lookup". If the copyright on software has been violated, check the PAD file for the author and release date.

Determine WHERE the website hosting is located
Determine where the website is hosted. Web hosts located in progressive countries will be more cooperative in addressing copyright violations. After determining the webhost's location, check the host's Terms of Service (TOS) and Acceptable Use Policy (AUP) to determine the level of cooperation you will likely receive. More often than not, a physical address and detailed information on how to report an abuse claim will be found in the webhost's terms of service.

Determine exactly WHAT violations have occurred.
When determining if a copyright violation has occurred, it is important to go back to the question of what constitutes a copyright violation.

Copyright is a form of protection provided by the laws of the United States (title 17, U.S. Code) to the authors of "original works of authorship." This work can be literary, dramatic, musical, artistic, or similar intellectual works. Copyright protection is available to both published and unpublished works. It is illegal for anyone to violate any of the rights provided by the copyright law to the owner of copyright. It is important to note that ideas can not be copywritten, and while it may be morally and ethically questionable, cloning a software application is not a copyright violation, yet copying a helpfile is a copyright violation.

Copyright protection exists from the time the work is created in fixed form. The copyright in the work of authorship immediately becomes the property of the author who created the work. Only the author or those deriving their rights through the author can rightfully claim copyright. Evaluate the violator's work to determine if text, graphics or any of the program or website's artistic qualities are the same as your creative works. Print hard copies of any documents and save electronic versions of web pages and executables. Capture screenshots of offenses, save documentation or the Help file that contains any duplications of text. Enter the URL of the offending website into to see the website's history and determine a timeline during which violations occurred. Look and feel can be subjective, try to focus on obvious or flagrant violations. Copied text or Help files is obvious when filing a complaint with web hosts or other third parties.

What is Next?
If you feel your copyright has, in fact, been violated there are a number of steps that you can take. Contacting third party service providers is a good starting point. Make a list of the providers with whom you can contact to report the violations.

1. Hosting
2. Online Ordering
3. If Software, Download Sites
4. Associations or Organizations

Aside from service providers, consider using existing relationships with parties who have a mutual interest or relationship with the other party. Often, knowing key people can result in a rapid response and increased dialogue with the purported offender.

Send simultaneous emails to each of the parties identified. Include details of the violation; using a PDF that displays screen captures or copies of text violations with website pointers is helpful. In the email, explain the action you wish to occur. If you want the web host to remove the website, say so. Also, ask that they keep you apprised of the situation.

In most cases you will receive responses from webhosts or registration services that require you to provide additional details so that the infringement can be investigated. It may seem obvious to the copyright holder, but the web hosts typically have a contractual agreement with their clients and are legally obligated to research any infringements before removing hosting or registration services.

Send a Cease and Desist letter and an email detailing that a copyright has been violated, include a reasonable deadline by which the offending copy or application should be removed. It is not necessary to provide the offender the details of the violation, as it is likely they are already aware of the offenses that have occurred. These actions will generally open a dialogue with the offender. If the offender ignores requests to remove the material that infringes on your copyright, pursue action with third party services. This will likely get the offender's attention.

Artists, developers, and writers all work hard to create unique material and copyrights should be respected by all.

About the Author:
Sharon Housley manages marketing for FeedForAll software for creating, editing, publishing RSS feeds and podcasts. In addition Sharon manages marketing for NotePage a wireless text messaging software company.

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