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In response to my post The Dynamics of Full Disclosure, Jeffrey Kalmikoff – one of the co-founders of Skinnycorp (the dudes who do Threadless) wrote an add-on titled On trust, transparency and disclosure. Jeffrey came up to Keystone and spent Jewish Christmas with me and Micah Baldwin – we talked about a bunch of fun stuff, ate chinese food, and played a lot of Rock Band. Good stuff Jeffrey.
A meme that regularly goes around the blogosphere is “full disclosure.” When someone blogs about something they have a financial interest in (e.g. an equity interest in a company) or something they benefit from financially (e.g. affiliate fees), should they include a “formal disclosure.”
I received the following email today:
“I appreciate all your book recommendations over the last several posts. It’s a great service. However, with full disclosure being the norm these days, you might want to mention that you benefit from book sales via your Amazon affiliate status. Pardon me if you have previously done this.”
So – for full disclosure, I benefit from book sales via my Amazon affiliate status. I don’t pay close attention to how much I get from this as I’m much more interested in the data underlying which books you dear reader actually buy and read as one of the features of the affiliate program is all the data I get from it.
My purpose of having an Amazon affiliate code is three fold:
- I want to understand how the Amazon affiliate program works (and evolves). This helps me with all of my investing activity.
- I am obsessed with the underlying data. All of the various affiliate / advertising programs I have on this blog provide me with a variety of data. I learn from this and can then help the companies I’m an investor in understand what appeals and doesn’t appeal to a publisher, using me as an example.
- I make enough money to get a discount from all of the books I buy at Amazon each year.
Summary: #1 and #2 help me as an investor. #3 generates a modest amount of money to me.
Let’s focus on #3 for a minute since this I think this is the core of the “full disclosure” email I received. In my case, I buy over 250 books / year at Amazon (I don’t know the exact number, but I’m estimating five a week which, based on what is on my Kindle along with the infinite pile of unread books, is low.) Since I’m buying a lot more on my Kindle these days, let’s use the average Kindle price of $10 which is also going to be low given the number of hardcover books in the infinite pile. That’s $2,500 per year of books. I expect that number is off by at least 100% – so I’m spending somewhere between $2,500 and $5,000 per year on books at Amazon.
I just ran my earnings report from Amazon for the past 12 months. Via my affiliate code, I’ve sold a net of 666 items (eek – subtle message in that – it’s actually 675 with returns of 7 and refunds of 2.) I’ve generated $16,247.89 for Amazon and received $1,072.89 in referral fees.
So – even if you take my $2,500 number, by buying books via my blog you’ve effectively helped me get a 40% discount from Amazon (20% if you take the $5,000 number, which I think is more realistic given my book buying habit.)
In either case, the financial beneficiary here is Amazon, not me, although I guess you could argue that I’m ahead by whatever my effective discount is. If my “book recommendations is a great service”, presumably this won’t really bother anyone (it might not have regardless). However, if every post I put up had an italicized “summary” of this post (or a link to it), that would probably get annoying over time!
I’m going to think more about what full disclosure actually means in the context of the evolving shift of purchasing, advertising, and content online. In the offline world, the construct of a reseller is well established (e.g. no one ever requires full disclosure from a bookstore when they sell – or promote – a book as it is well understand that they make a margin on every sale.) I get that there are different issues in the online world, especially around content, but as the creative destruction of the Internet starts to really take a toll on retail (and resellers), there may be new issues around the construct of full disclosure.
Finally, thanks to the blog reader who pointed this out to me. I hope this doesn’t come across as a gigantic rationalization on my part, or a defensive argument. Instead, my goal was to think through this out loud, in public, and in the spirit of full disclosure. If anyone out there has anything to add, or core principles that can help me define a forward looking view on this (e.g. what this should look like from 2010 forward), please weigh in with a comment.
For those of you that just got a flood of posts in your Feld Thoughts feed, that’s because of me. Yeah – I wrote a bunch of posts over the past few days, but I forgot to update where FeedBurner was pointing to grab the feed when we moved over to WordPress. I’m loving WordPress.org, but still futzing around with a few things. The feed should be better, but if you notice something messed up, tell me.
When Automattic acquired Intense Debate a few months ago, I committed to Toni Schneider and Matt Mullenweg that I’d convert my blogs from Movable Type to WordPress and become a WordPress fanboy. After the acquisition they sent me a bunch of stickers (along with my Automattic stock certificate). I’ve been dutifully putting my stickers up on lamp posts, doors, and computers all around the country. As of right now, I can also say that I’ve converted this blog over to WordPress.
If you notice any problems or wonky issues, please holler – either by email or by leaving a comment. If you have suggestions for WordPress plugins that I must put on this blog, please leave them in the comments.
As you probably noticed, for the past three weeks my blog has been up and down. The week of November 20th, Feld Thoughts came under a large distributed denial of service attack. While we’re not sure who began this attack (or why) we have finally been able to mitigate it enough to get the site back online thanks to ViaWest. Now for a little history as to what happened and how we combated it.
When we first started noticing problems with the blog, Ross did all the normal stuff and didn’t really notice anything. The server was online, CPU usage was nominal as was memory usage. It was available, it simply wouldn’t serve pages. Netstat eventually revealed the problem was a big DDoS attack.
For the first week, our friends at StillSecure jumped in and helped us tune our existing server to try to get us back up and stable. Each time we would get ahead of the attacker he/they would step the attack up to another level taking us back down. We’d been talking about moving from our small hosting provider to a Tier 1 provider given the existing traffic levels before the attack – we finally decided to bite the bullet and move everything to a new server at ViaWest (where many of our portfolio companies host.)
I’m happy to report that we have moved the site over to the new server with ViaWest and we’ve been able to put a real firewall in front of the server. This firewall, coupled with a much more powerful server and ViaWest’s substantial infrastructure, has gotten us back online and running great. While the attack continues we have so far been able to handle it.
So a big thanks goes to ViaWest and their team for the assistance they’ve given us getting our new server up and running. Also, big hugs to my friends at StillSecure for jumping in on a moments notice help us get to a place where at least we we able to weather the attack.
Thanks guys, you’re the best!