For Sifry at Technorati, of course, the sermon was blogs: That the "blogosphere," a term he helped popularize, was growing exponentially — never mind that many of the blogs Technorati counted were fakes, created by spammers to fool search engines and Web surfers. That this realm of blogs required search tools to navigate, tools that would somehow be distinct from workaday search engines. That the currency of blogs was not traffic, readership, or engagement, but "inbound links" — the back-scratching links provided by one blogger to another, in the name of bloggy solidarity.

The sermon proved false, of course. Blogs are just another form of content, easily searched with existing tools, once they were updated to account for a faster pace of publication. And advertisers rapidly learned that "inbound links" counted for little, and existing Web-tracking research firms could easily turn their attention to those few blogs which grew large enough to draw the interest of marketers. Sifry, spurred on by fervor, refused to see that — or acknowledge it. And finally, faced with the inability to reconcile his vision of the blogosphere's endless growth with the reality of cutting Technorati's expenses through layoffs, he avoided the hard decision by abdicating his role as CEO.

Furrier, too, has delayed facing hard realities. He's typical of the early podcasters: A geek with a lot to say, convinced that his self-involved patter is interesting. Furrier is clearly a persuasive type, enough so to have lured spokesblogger Robert Scoble away from Microsoft and to have gotten him to stay at PodTech, despite the increasing damage to his reputation.

What he hasn't done, however, is assemble content that a mass audience finds interesting. PodTech's lineup of channels remains thoroughly niche, and the company's flirtation with humorous programming ended disastrously, with the public meltdown of toxicly unfunny "comedian" Loren Feldman.

For Technorati and PodTech, these are exactly the moments when professional management is needed: Someone clear-eyed enough to see opportunities others might miss, but clear-headed enough to recognize when a founder's vision doesn't match reality. But hiring someone like that require the evangelist to swallow his ego and admit he might be wrong. Sifry, replaced by a temporary committee of underlings, hasn't done that; nor has Furrier, who tapped his COO to replace him.

Evangelism has a place in the business of technology. Without it, we'd all be scrapping over tiny slices of stagnant markets, instead of embracing growth. But evangelism is no substitute for achievement. Nor, in the end, is an evangelist a replacement for a real leader.

• Man, this is not the New York Times's best weekend. Their latest gaffe: calling Peter Hirshberg, chairman of blog search company Technorati, the CEO. Poor tech blogger Om Malik was afraid CEO Dave Sifry had been ousted. But Sifry replied on Om's blog that he's still in charge. He tells me the mix-up was probably an innocent mistake by the Times; no one interviewed Sifry for the article. [GigaOM]
• The campaign blog to free imprisoned medical marijuana dispenser Sparky Rose says that his prosecutors claim he had "no previous work history prior to the pot club." Rose was a high-rolling dot-com founder — same thing? [Free Sparky]
• CNET launches a new title called Crave, because the world needs yet another gadget blog. [Crave]
• Who wins the battle of YouTube vs. MySpace, now that the latter is aggressively moving into online video and breaking YouTube vids embedded on MySpace? Google wins, of course. [BusinessWeek]
• NY Times columnist Joe Nocera says Carly Fiorina's memoir of her time heading Hewlett-Packard is a revisionist history — she lies about earnings, he says, and her book should be called "It's All About Me." [NY Times Select]
• Business 2.0 editor Josh Quittner will pay all his journalists to run their own blogs — presumably so no one else leaves like B2 writer Om Malik to start their own media empire. [I Want Media]

The Economist, July 2002:

IT WAS an essential ingredient of dotcom business plans and conference slide-shows: Internet traffic, went the industry's favourite statistic, doubles every 100 days.... Unfortunately for the telecoms firms that rushed to build networks to carry the reported surge in traffic, it wasn't true.

So where did the claim come from? According to Andrew Odlyzko...the short answer is WorldCom.

Technorati founder Dave Sifry, August 2006:

The blogosphere has been doubling in size every 6 months or so. It is over 100 times bigger than it was just 3 years ago.

(Okay, let's be fair, Sifry says the growth will eventually slow. Right after Technorati gets sold to Fox or Viacom.)

The power of WorldCom's puff [Economist]
State of the Blogosphere, August 2006 [Sifry's Alerts]
Kevin Burton: The Numbers Don't Lie [OnoTech]

The money came from the same venture capital firms that gave Technorati $6.5 million at a valuation of $12 million in 2004. So back then, Technorati sold a third of the company.

Before that, it took angel investments. We can guess those investors own another sixth of Technorati. So when it asked for its Series C money, Technorati only had half the company left to sell. An industry expert says that the company must be low on cash, because with this round, the founders have basically given up control.

Last year, founder Dave Sifry said that funding announcements are like "proclaiming your latest levels of debt," according to ex-Technorati developer Niall Kennedy. No wonder Dave doesn't mention the funding in his blog — he's practically maxed out his platinum card.

Random Ramblings [PE Week Wire]
Technorati raises $7.6 million series C [Niall Kennedy]

The Technorati CEO shows how well his blog search beat Google's. He's all proud and "this is great stuff" and stuff. Granted, if all these brrreeeporters are registered Technorati users, that might give it a slight edge. And Scoble's audience is a 'rati-savvy group.

So Technorati rocks at finding Technorati users. Or even just the type of users who would blog fake words on Scoble's command. Blogger Eran Globen tells me, "It's a case of the tail wagging the dog, but I'm not sure who's the tail and who's the dog. I think it might be a strange case of two tails wagging each other."

brrreeeport report [Sifry's Alerts]
Brrreeeport [Technorati results]

Time to predict who sells first. We'll pick our top three favorites to win the race to flip (and show you some other flip-ready companies).

Then you pick three of the companies below and e-mail them, in the order you think they'll sell, to editor@valleywag.com with the subject "Flip trifecta." The contestant whose top three picks sell first, in the order they choose, wins a prize. In the case of a tie, the winner's chosen randomly.

Flip Trifecta: the race to sell out

1. Digg: Kevin Rose denies a Yahoo buyout, but commentators (like TWiT's Leo Laporte) say "if he sells, he's buying dinner."

2. Newsvine: The citizen-journalism-slash-real-journalism site hasn't even publicly launched, but it's already earning accolades from beta users. Already fresh, but still ripe, this would make a trendy purchase for Yahoo.

3. Tailrank: Kevin Burton's tiny aggregator could become a one-man merger — but only if Kevin drops his dream of a user-funded startup.

4. Odeo: A natural acquisition. None of the portals have a good podcast play. And it's not taking off all by itself. Biz Stone just left Google to work at this startup; could he find himself back on campus?

5. Riya: The facial recognition software is a perfect technology to complement Flickr. On one round of funding, Riya has already developed smart recognition algorithms — for example, it recognizes founder Tara Hunt. But one search giant already took a look at Riya and passed.

6. Six Apart: The blog platform developer is suffering downtime as it struggles to handle a growing user base. Would anyone buy a company that's a mishmash of publishing software, hosting services and a free community site? Or will Six Apart patch itself up and run solo?

7. Technorati: CEO Dave Sifry told the Red Herring two years ago to "watch this space" for the blog tracker's exit strategy. This year, BusinessWeek predicts a flip to Microsoft. But in those two years, Technorati's piled on a lot of VC funding. Will its investors force it to take a lowball offer?

8. Napster: Not selling any time soon, and definitely not to Google. This sucker's losing money fast.

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