How To Increase Conversions For Organic Keywords

Courtesy: http://searchengineland.com/how-to-increase-conversions-for-organic-keywords-75649
 
Once your website starts getting at least some traffic from organic search queries, you can help increase conversions (inquiries, signups, purchases, phone calls etc) by investigating what happens once people reach your website from the search results.
You can use Google Analytics to choose what keywords to focus on and to check the entrance pages (landing pages) for issues hurting conversions.

How To Choose Which Organic Keywords To Focus On

Most websites have hundreds or thousands of keywords bringing visitors to their website so it’s ideal to have an easy way to select which keywords to focus on.
In Google Analytics, you should have either some important (non-ecommerce) conversion Goals being tracked or e-commerce turned on and set up so that it is tracking transactions. You’ll then be able to see the conversion rates by keyword as follows:

1. Choose Traffic Sources / Keywords
2. Set a date range of about 3 to 6 months (Less if you’ve made a fair number of changes to the site that might have affected rankings, changed URL’s etc)
3. Choose “Show: non-paid” (See the screen shot below)
4. Then choose either a Goal Set tab or the Ecommerce tab (see the screen shot below)

Sort on Visits if needed by clicking on the column title (or export to a spreadsheet so you can sort the data in various ways).

Google Analytics Organic Keyword Conversion Rates

Scan through the list and more closely examine any keywords with a conversion rate that is lower than some minimal percentage.
You’ll likely notice a fair number of keywords with a conversion rate of zero. You’ll need to make a judgment call on each of these as to whether the phrase is relevant to the conversion goals of your site.
Sites tend to rank for many phrases that aren’t very relevant and are not likely to lead to conversions. Skip those and focus on the keyword phrases that you believe should be leading to conversions.

Check The Entrance Pages For Issues

Although we have some control through optimization, it’s the search engines that decide what web pages rank high for organic keywords and thus become the entrance pages when people click through (unlike PPC where you choose the landing page) so the first step is to check any entrance page with more than a minimal number of entrances for issues.

• In the Google Analytics table of keywords you generated, click on a keyword in the table that you want to examine.
• Next, click on the drop down selector you’ll see in the screen shot below

• Then select Landing Page (see in the screen shot below):

You’ll be presented with a list of the entrance pages for that keyword (You may have to click “non-paid” again on this page too).
Unfortunately, Google Analytics doesn’t turn the entrance page listings into links in this table, so you’ll either need to copy and append the URL segment in the listing to the website address in a browser address bar or follow the next steps.
Here’s what I do using two monitors. I open Analytics again in another instance of the browser on the other monitor and do the following:

1. Choose Content / Top Landing Pages
2. Select “containing” in the Filter option selector you’ll see in the screen shot below.
3. Copy all or part of the URL segment from the keyword entrance page listing into the Filter field (see the screen shot below)
4. This will generate a list of entrance pages that contain the URL segment.
5. Click on the entrance page you want to examine.

Google Analytics Landing Pages Filter

When you click on the landing page you wish to examine a Content Detail page is presented. Click on the “visit this page” link you’ll see in the screen shot below to view the page.

Typical Issues With Organic Entrance Pages

Here are some typical issues we see with organic entrance pages along with some suggestions on how to handle them.
Files with no navigation
We often see the content of frames (albeit less often these days) or orphaned “pages”, or the content from pop-up windows get indexed in search engines and viewed without any site navigation. In other words, people are clicking on the search results for these files and the page that they land on has no easy way for them to navigate into the rest of the web site.
For framed pages (if you still have this issue) determine if they really need to be developed as a frames system and rebuild them if not. There are also some JavaScript solutions to ensure that frames pages load correctly. Trying Binging “JavaScript ensure frames load correctly”.
Consider not using pop-up windows or putting the content of pop-up windows into a folder and disallow that folder in your robots.txt file. Recheck what entrance pages are being returned after a couple of months.
Old web pages still live
Webmasters often leave old web pages up on the site where they continue to get indexed by search engine. Many times I’ve seen entire old versions of websites moved to a folder on the site, but search engines find and index them. Sometimes, these old pages rank for important keywords.
Unfortunately, old web pages usually have broken navigation links and images, out of date information, and countless other issues. Consider setting up a 301 redirect from the old page(s) to the best page on the live site to capture that keyword traffic for awhile. Then work to optimize a page(s) on the live site for the keywords.
File not found
You may get “404 file not found” errors for many reasons. You’ll need to determine why this is happening for specific keyword phrases to decide if there are issues that need to be addressed. In some cases “file not found” errors are returned from search results because a web page was deleted or moved and the search engines haven’t removed the old URL from their listings yet.
Setup a 301 redirect for this URL to the best page on the live site. Recheck what entrance pages are being returned for the keywords wtihin a couple of weeks or months.

Is This The Best Entrance Page For The Keyword Phrase?

If there are no issues with an entrance page such as those pointed out in the previous section, consider whether it’s the best page for people to enter the site for this search query. The fact that you are examining the entrance page for this keyword phrase because the conversion rate is low would suggest that it may not be the best entrance page.
Here’s an example from a client’s site. They sell cooking products on their e-commerce website. They also publish their own book on a specific cooking topic which they sell on the site. People do search on the name of the book.
However, the top entrance page, the page ranking highest for the name of the book, was a page for a free recipe from the book. Not only was there no easy way to get to the page where one could by the book, nowhere on the page was it even mentioned that the book was for sale.

The Insecurity of Google's ClientLogin Protocol

Courtesy: Bastian Könings, Jens Nickels, and Florian Schaub
http://www.uni-ulm.de/en/in/mi/staff/koenings/catching-authtokens.html

In a recent blog post Dan Wallach outlined some of the risks of using Android smartphones in open Wifi networks. He found that some Android applications transmit data in the clear, allowing an attacker to eavesdrop any transmitted information. Besides third-party apps, such as Twitter or Facebook, also the Google Calendar app transmitted unencrypted information. Wallach stated that "an eavesdropper can definitely see your calendar transactions and can likely impersonate you to Google Calendar". A fact that also applies to Google Contacts as another blog post revealed.
We wanted to know if it is really possible to launch an impersonation attack against Google services and started our own analysis. The short answer is: Yes, it is possible, and it is quite easy to do so. Further, the attack is not limited to Google Calendar and Contacts, but is theoretically feasible with all Google services using the ClientLogin authentication protocol for access to its data APIs.
ClientLogin is meant to be used for authentication by installed applications and Android apps. Basically, to use ClientLogin, an application needs to request an authentication token (authToken) from the Google service by passing an account name and password via a https connection. The returned authToken can be used for any subsequent request to the service API and is valid for a maximum duration of 2 weeks. However, if this authToken is used in requests send over unencrypted http, an adversary can easily sniff the authToken (e.g. with Wireshark, see screenshot below). Because the authToken is not bound to any session or device specific information the adversary  can subsequently use the captured authToken to access any personal data which is made available through the service API. For instance, the adversary can gain full access to the calendar, contacts information, or private web albums of the respective Google user. This means that the adversary can view, modify or delete any contacts, calendar events, or private pictures. This is not limited to items currently being synced but affects all items of that user.
The attack is very similar to stealing session cookies of websites (Sidejacking). The feasibility of Sidejacking attacks against well-known websites such as Facebook or Twitter, has lately been demonstrated by the Firesheep plugin which attracted a lot of attention.

Screenshot of Wireshark showing the authToken for ClientLogin in a data API request to the Picasa Web Albums service.

Scope

We tested this attack with Android versions 2.1 (Nexus One), 2.2 (HTC Desire, Nexus One), 2.2.1 (HTC Incredible S), 2.3.3 (Nexus One), 2.3.4 (HTC Desire, Nexus One), and 3.0 (Motorola XOOM) and with the native Google Calendar, Google Contacts, and Gallery apps (or respective synchronization services).

• Until Android 2.3.3 the Calendar and Contacts apps transmit any request in the clear via http and are therefore vulnerable to the authToken attack. This affects 99.7% of all Android smartphones (stats from 2nd of May 2011). Since Android 2.3 the Gallery app provides Picasa Web Albums synchronization which is also not encrypted.
• Since Android 2.3.4, the Calendar and Contacts apps are using a secure https connection. However, the Picasa synchronization is still using http and thus is still vulnerable.
• Our sniffed authTokens were valid for several days (14 days for a sniffed Calendar authToken), which enables adversaries to comfortably capture and make use of tokens at different times and locations.

Use of HTTPS in Android Google Apps:

Android version	Calendar Sync	Contacts Sync	Picasa Sync (Gallery)
3.0	yes	yes	?
2.3.4	yes	yes	no
2.3.3	no	no	no
2.2.1	no	no	n/a
2.2	no	no	n/a
2.1	no	no	n/a

Note that this vulnerability is not limited to standard Android apps but pertains to any Android apps and also desktop applications that make use of Google services via the ClientLogin protocol over HTTP rather than HTTPS. For example, the Google Calendar provider for Thunderbird if Google Calendar URLs are used without leading "https".

Collecting authTokens

To collect such authTokens on a large scale an adversary could setup a wifi access point with a common SSID (evil twin) of an unencrypted wireless network, e.g., T-Mobile, attwifi, starbucks. With default settings, Android phones automatically connect to a previously known network and many apps will attempt syncing immediately. While syncing would fail (unless the adversary forwards the requests), the adversary would capture authTokens for each service that attempted syncing. Due to the long lifetime of authTokens, the adversary can comfortably capture a large number of tokens and make use of them later on from a different location.

Implications

The implications of this vulnerability reach from disclosure to loss of personal information for the Calendar data. For Contact information, private information of others is also affected, potentially including phone numbers, home addresses, and email addresses. Beyond the mere stealing of such information, an adversary could perform subtle changes without the user noticing. For example, an adversary could change the stored email address of the victim's boss or business partners hoping to receive sensitive or confidential material pertaining to their business.

Fixing the issue

What app developers can do:

• Android apps and synchronization services using ClientLogin should immediately switch to https. In the newest Android release (2.3.4) this step was already taken for the Google Calendar and Contacts apps, but other apps need to follow. The Gallery app is developed by Cooliris who probably were not made aware of the issue. However, the Android security team told us that they are investigating the Gallery app as well. So hopefully a fix should be integrated in the next release.
• Google APIs offer more secure authentication services. Switching to oAuth for authentication would mitigate the authToken capture issue. Https should be used in addition to prevent synced data to be transmitted in the clear.

What Google/Android can do:

• The lifetime of an authToken should be drastically limited.
• Google services could reject ClientLogin based requests from insecure http connections to enforce use of https. Https is already required for the Google Docs API und will be required for Google Spreadsheet and Google Sites APIs in September 2011. It should be mandatory for all of Google's data APIs.
• Automatically connecting to known Wifi-networks could be limited to protected networks. At least a respective option should be provided to users.

What Android users can do:

• Update to Android 2.3.4. Update your phone to the current Android version as soon as possible. However, depending on your phone vendor you may have to wait weeks/months before an update is available for your phone. Hopefully this will change in the future. 
• Switch off automatic synchronization in the settings menu when connecting with open Wifi networks.
• Let your device forget an open network you previously connected to, to prevent automatic reconnection (long press network name and select forget)
• The best protection at the moment is to avoid open Wifi networks at all when using affected apps. 

How to Turn Customers into Brand Ambassadors

A wonderful post by Pradeep Chopra- Chief Executive of Digital Vidya
courtesy: http://blogs.wsj.com/indiarealtime/2011/04/27/chief-mentor-how-to-turn-customers-into-brand-ambassadors/


After I talked about the future of “search” in my previous article, lets now look at what a brand should do to win in the new “search” paradigm.


It starts with listening, a simple act in the digital world the importance of which is yet to be fully understood or appreciated. Listening to conversations about your brand or product or service offers multiple opportunities. If people are speaking well of you, you’ve an opportunity to convert them to your brand ambassadors. If they are speaking ill of you, thank them for helping identify an opportunity for you to grow and to resolve an issue in a way that turns around their perceptions and experience.

Don’t listen and you end up missing out on both opportunities above and you should be prepared to face a potential backlash from dissatisfied customers. For example, Vishal Rao, a frustrated customer of MakeMyTrip ended up creating a new site RuinedMyTrip.com to share his horrifying experience and it is prominent on searches for the company. For more on this, check out this Mint story.

Tools such as Google Alerts and TweetDeck do a great job of helping a brand listen to conversations about it. Once a brand has laid the foundation to continuously listen, it can embrace some or all of the opportunities of “social search,” some of which are below:

–Be present on relevant Social Media: Given that search results increasingly throw out more social media channels such as Facebook, LinkedIn, Twitter, Flickr, SlideShare, and others, being present on these channels opens up new opportunities to be found by customers on search engines. Take a minute to search for your name on Google and observe the results. This article ‘Google will force all B2B companies to Tweet’ will help you further understand the importance of Twitter.

–Turn your satisfied customers into brand ambassadors: Given that potential customers want to know about your product or service through the people who’ve already used it, the opportunity of leveraging your existing customers to bring in more customers is unmatched. But how? There are numerous ways to do it.
Recently, LinkedIn launched a new feature called its “Company Page,” where any company can list its products or services. There is no reason you should not request your satisfied customers to share their feedback about you. At Digital Vidya, we’ve been continuously making the most of our LinkedIn Company Page to build credibility and generate more business. Similarly, you can request recommendations be placed on your LinkedIn profile.

Today, Twitter is one of the favorite platforms for consumers to share their opinions. The question is whether you can encourage and inspire your satisfied customers to share their views about you. You can then use the stream of positive tweets about your brand as testimony to attract new customers. For examples, 24hoursloot.com has integrated a Twitter stream into their website in the form of “true testimonials from real people” to boost conversion rates for every campaign, which drives traffic to their Web site.
Believe me, it’s also worth spending time in identifying and requesting some of your customers to blog about you. Let me share two examples from our social media workshops: Social Media Workshops in India: The one I endorse and Social Media and the ‘GURUs’

In addition to blogging, it doesn’t cost you anything to request your satisfied customers write about their experience about your brand on popular review sites such as MouthShut.com. Here is an example of another business for which we requested experts to review our products at JavaRanch, one of the most popular Java discussion forums.


Likewise, depending upon your industry, you will have enough avenues to realize the opportunity of word of mouth. Please remember, if you are listening, you may discover a number of satisfied customers, who otherwise gets missed.

While it’s important to acknowledge and encourage your delighted customers, it’s even more critical to take care of your dissatisfied customers. In the world of social media, nothing works better than making a public apology and taking responsibility of your mistakes. By resolving the concerns of your customers in public, you are likely to strengthen your relationship with your satisfied customers in addition to turning your frustrated customers into brand ambassadors.

CafeCoffeeDay has an interesting case in which they smartly recovered from a short-lived crisis by appropriately responding to their customers in a timely way. By publicly dealing with the situation, as MakeMyTrip is also doing, you show that you are doing your best to improve customer satisfaction.
I will be happy to answer any questions you may have on the tools and case studies discussed. Moreover, I invite you to share relevant personal experiences in the Comments.

Mozilla added 'Add ons' to wall of shame

Source: Mashable.com
by Stan Schroeder


Mozilla has published a list of 10 Firefox add-ons which hinder the browser’s performance the most.

The list, available here, shows how much each add-on slows down Firefox at startup.

Ironically, an add-on called “FastestFox – Browse Faster” is on the list, together with several very popular ones, for example the developer-oriented Firebug and bookmark synchronizer Xmarks.
The slowest add-ons on the list, FoxLingo – Translator / Dictionary and Firebug, slow down Firefox’s startup by a whopping 74%.

The list is a result of a recent initiative by Mozilla to put a stop on performance-slowing add-ons. Mozilla announced it will perform automated performance tests of the top 100 add-ons hosted in its add-on gallery every week, and display warnings for add-ons that slow Firefox startup time by 25% or more.

Facebook HipHop serves 70% more traffic on same hardware

For all my Programmer friends
By Cade Metz in San Francisco
Source: http://www.theregister.co.uk/2011/03/31/facebook_hip_hop_performance_improvement/
 

When Facebook moved its servers to HipHop for PHP – the code transformer it built to convert PHP into optimized C++ – the company's average CPU usage dropped by 50 per cent. And after six months of additional engineering, the tool was about 1.8 times faster.

Now, after another six months, the company says, it has improved performance another 1.7 times. But this is more than just self congratulation. The project is open source, and it's been open since Facebook first switched its servers to HipHop in February 2010.

Unlike Google, you see, Facebook has been known to promptly open source some of the most important pieces of its back-end infrastructure.

With a Wednesday blog post, Facebook research scientist Xin Qi charts HipHop's relative throughput improvement over the last six months:

The end result, he says, is that HipHop can handle about 70 per cent more traffic on the same hardware infrastructure.

After transforming PHP into C++, HipHop compiles the code and builds binary files with the GNU C++ compiler, aka g++. The idea is that you can still code with high-level PHP, but then get the performance of C++ – though it does give up certain "rarely used" PHP features.

According to Qi, Facebook and the open source community have juiced the tool in several different ways. HipHop uses a version of the Alternative PHP Cache (APC), and engineers have stripped most of the serialization and unserialization operations. "Semantically, an object is serialized and unserialized when it is stored into and fetched from APC. However, serialization and unserialization are costly operations, commonly dominating the cost of APC data fetching itself," Qi says.

"Thus, we reworked the APC implementation in HipHop, getting rid of almost all the serialization/unserialization operations, while keeping the semantics equivalent to before."
But some serialization is still required, and this has been fine tuned. "Objects still need to be serialized or JSON-encoded in order to transfer them over the wire. To make things faster, we optimized various aspects of these operations, including UTF8/UTF16 conversions, object property accesses, number parsing, and so forth."

Facebook has also reduced the size of the binary code, improved memory allocation, and made several changes to the compiler. "Several phases in the compiler, including parsing, optimization, and code generation, are now parallelized. Hyves contributed changes to the generated C++ code to make it compile faster without losing any run-time efficiency," Qi says.
His crew can build a more than 1GB in about 15 minutes (after stripping out debug information). "Although faster compilation does not directly contribute to run-time efficiency," Qi says "it helps make the deployment process better."

The likes of Drupal, MediaWiki, and WordPress are now using HipHop. No one is using BigTable or the Second Coming of the Google File System. Except for Google. ®

Mozilla Engineer Calls IE9 Launch Miserable & Starts Abusing When Asked For Stats

One of the best analogy of IE9 and Mozilla..
Source: http://techie-buzz.com/tech-news/mozilla-engineer-calls-ie9-launch-miserable-starts-abusing-when-asked-for-stats.html
Written by:Manan Kakkar

If there’s something that ticks me off the most, it is the marketing/PR of a company fudging statistics to suit their needs. Both Microsoft and Mozilla announced new versions of the browsers this month and number of downloads in the first 24 hours were used to showcase how awesome the browsers are.
Microsoft did a blog post claiming 2.35 Million downloads for IE9 and Mozilla announced 7.1 Million downloads. Woah! That’s a huge difference! I mean really that’s almost 3 times but. Yes, there’s a capital BUT here. IE9 is only for Windows Vista and Windows 7 whereas Firefox is available for all desktop operating systems. This little piece of information has been conveniently skipped by all. Why IE9 is not available on Windows XP is Microsoft’s decision, they’ve talked about that and I shall not get into that since it has nothing to do with the download numbers.
Today Romit Mehta asked Asa Dotzler if he could share OS specific numbers for the downloads since that would give a clearer picture as to who “won” if the first 24 hour download numbers were the scale. The discussion had several analogies exchanged but Asa did not talk numbers, much like a PR professional he danced around but not being one he lost his cool and shit hit the roof. Here are some quotes:


Since I follow @Rawmeet and these statistics have been something of an issue for me since everyone started talking about them, I jumped into the discussion and here’s how that went:

Getting a PR response meant I had to take a dig at Mozilla:

I just got complimented by Asa for my persistence (and my blunt truth):

With that done, I decided to look at numbers. They weren’t going to come from Asa or Mozilla so the next best public source, Statscounter and here’s what I found:
The 28 days of March 2011

• Windows Vista – 13.74%
• Windows 7 – 30.63%
• Total download base for IE9 = 44.47% (2.35 Million Times)
• Compared to the 100% marketshare Firefox had, they managed 7.1 Million downloads.
• This is 55.53% more and they got 3 times the downloads.

Windows XP has 47.22% of the marketshare which means if IE9 were available on Windows XP the download numbers would’ve well been close. Or in other words, Firefox 4 didn’t exactly do a hell lot better than IE9 despite the 3x downloads.

So much for the BS Mozilla and you might want to get your engineers some anger management therapy. Maybe the congratulatory cake Microsoft sent Mozilla wasn’t his favourite flavour.

Is It a New Tech Bubble?

Banks pouring money into technology funds, wealthy clients and institutions clamoring to get pieces of start-ups, expectations of stock market debuts building — as Wall Street’s machinery kicks into second gear, some investors with memories of the Internet bust a decade earlier are wondering whether this sudden burst of activity spells danger for the industry once again.

With all this exuberance, valuations are soaring. Investments in Facebook and Zynga have more than quintupled the implied worth of each company in the last two years. The social shopping site Groupon is said to be considering an initial public offering that would value the company at $25 billion. Less than a year ago, the company was valued at $1.4 billion.

“I worry that investors think every social company will be as good as Facebook,” said Roger McNamee, a managing director of Elevation Partners and an investor in Facebook, who co-founded the private equity fund Silver Lake Partners in 1999 at the height of the boom. “You have an attractive set of companies right now, but it would be surprising if the next wave of social companies had as much impact as the first.”

Funds set up by Goldman and JPMorgan Chase have invested in Internet start-ups like Facebook and Twitter or in funds with stakes in those start-ups. Even the mutual fund giants Fidelity Investments and T. Rowe Price have stepped up their efforts, placing large bets on companies like Groupon and Zynga.

Thomas Weisel, founder of an investment bank called the Thomas Weisel Partners Group that prospered in the first Internet boom, says he is “astounded” by the amount of money now flooding the markets.

“I think it’s much greater today,” he said. “The pools of capital that are looking at these Internet companies are far greater today than what you had in 2000.”

Yet there are notable differences between the turn-of-the-century dot-com boom and now. For one, the stock market is not glutted with offerings. In 1999, there were 308 technology I.P.O.’s, making up about half of that year’s offerings, according to data from Morgan Stanley. In 2010, there were just 20 technology I.P.O.’s, based on Thomson Reuters data.

More important, the tech start-ups that have attracted so much interest from investors have real businesses — not just eyeballs and clicks. Companies like Facebook have fast-growing revenue. Groupon, which has been profitable since June 2009, is on track to take in billions in revenue this year. And since 1999, when 248 million people were online (less than 5 percent of the world’s population), broadband Internet and personal computing have become mainstream. About one in three people are online, or roughly two billion users, according to data from Internet World Stats, a Web site that compiles such numbers.

“In those days, you had tiny, little companies going public that hardly had a business plan,” Stefan Nagel, associate finance professor at Stanford University, said. “And now you’re talking about only a few companies — companies that are already global and with revenue.”

With such a small, elite group, the potential fallout if things go badly would be limited, some investors say. “Yes, we have a frenzy again,” said Lise Buyer, a principal of the Class V Group, an advisory firm for companies considering initial public offerings. “But the frenzy is on a very select group of companies. Facebook is clearly Secretariat, but there are a few other championship horses they are looking to bet on.”
Article Tools

For Wall Street, the initial attraction to Internet start-ups in the 1990s was the opportunity to earn fees from taking the companies to market. At its peak in 1999, the industry made $1.3 billion in underwriting fees, according to data from Thomson Reuters.

But as enthusiasm surged, many firms also rushed to make investments for their clients and themselves through special-purpose funds and direct investments. And in many cases the banks got burned just as ordinary investors did.

“The investment pools that we did back in 2000 did extremely poorly, because many of those companies went from filing an I.P.O. to bankruptcy courts in a matter of months,” said Mr. Weisel, whose firm was acquired by Stifel Financial last year.

In 1998, Goldman Sachs Capital Partners, the bank’s private equity arm, began a new, $2.8 billion fund largely geared toward Internet stocks. Before that fund, the group had made fewer than three dozen investments in the technology and communications sectors from 1992 to mid-1998, according to Goldman Sachs documents about the fund.

But between 1999 and 2000, the new fund made 56 technology-related investments, of about $27 million on average. In aggregate, the fund made $1.7 billion in technology investments — and lost about 40 percent of that after the bubble burst. (The group, which manages the money of pensions, sovereign wealth funds and other prominent clients, declined the opportunity to invest in Facebook early this year.)

Philip A. Cooper, who in 1999 was head of a separate Goldman Sachs group that managed fund of funds and other investments, recalled that investors were clamoring, “We want more tech, we want more.” Bowing to pressure, he created a $900 million technology-centric fund in 1999, and within eight weeks he had nearly $2 billion in orders. Despite the frenzy, he kept the cap at $900 million.

“There was a lot of demand, but we couldn’t see any way we could prudently put that much capital to work,” said Mr. Cooper, who has since left Goldman.

Other Wall Street firms, including JPMorgan Chase and Morgan Stanley, also made a number of small to midsize investments during the period. In 1999, for instance, Morgan Stanley joined Goldman Sachs and others in a $280 million investment in CarsDirect.com, which scrapped its initial plans to go public when the market deteriorated.

“We thought we were going to double our money in just a couple of weeks,” said Howard Lindzon, a hedge fund manager of Lindzon Capital Partners and former CarsDirect.com investor. “No one did any due diligence.” Mr. Lindzon lost more than $200,000 on his investment.

Also in 1999, Chase Capital Partners (which would later become part of JPMorgan Chase) invested in Kozmo.com — an online delivery service that raised hundreds of millions in venture funding. JPMorgan Chase, which just recently raised $1.2 billion for a new technology fund, at the time called Kozmo.com “an essential resource to consumers.” At its height, the company’s sprawling network of orange bike messengers employed more than a thousand people. Less than two years later, it ceased operations.

An online grocer, Webvan, was one of the most highly anticipated I.P.O.’s of the dot-com era. The business had raised nearly $1 billion in start-up capital from institutions like Softbank of Japan, Sequoia Capital and Goldman Sachs. Goldman, its lead underwriter, invested about $100 million.

On its first day, investors cheered as Webvan’s market value soared, rising 65 percent to about $8 billion at the close. Less than two years later, Webvan was bankrupt.

About the same time, Internet-centric mutual funds burst onto the scene. From just a handful in early 1999, there were more than 40 by the following year. One fund, the Merrill Lynch Internet Strategies fund, made its debut in late March 2000 — near the market’s peak — with $1.1 billion in assets. About one year later, the fund, with returns down about 70 percent, was closed and folded into another fund.

“We all piled into things that were considered hot and sexy,” said Paul Meeks, who was the fund’s portfolio manager. Mr. Meeks started six tech funds for Merrill Lynch from 1998 to 2000.

Today, the collective amount of money that Wall Street banks are pumping into Internet start-ups, on top of the surging cash piles from venture capital groups, hedge funds and private equity, is a major concern for some investors.

Over the last five months, many venture capital players have raised giant amounts of capital. One Facebook investor, Accel Partners, is about to raise $2 billion for investments in China and the United States, while Bessemer Venture Partners is said to be closing in on $1.5 billion for a new fund. Greylock Partners, Sequoia Capital, Andreessen Horowitz and Kleiner Perkins Caufield & Byers have collectively raised more than $3 billion in the last six months.

Mr. Weisel, who has also been tracking hedge fund activity, finds the numbers dizzying. Countless hedge funds are investing in private placements — “dozens and dozens of hedge funds are doing the same thing,” he said.

As cash continues to pile up, the fear is that all this money cannot be put to work responsibly. With only a few perceived “winners,” some investors must be choosing losers or paying too much, Mr. Meeks said.

“When you see the valuations being bandied about — I do think, boy, these better be really special companies.”

Source: http://dealbook.nytimes.com/2011/03/27/is-it-a-new-tech-bubble-lets-see-if-it-pops/?partner=rss&emc=rss