Web 2.0 Exit Strategies

September 29, 2006

Marco Rosella has an interesting idea about how companies can promote their exit strategies at the upcoming Web 2.0 Conference … (Note – this is meant to be humorous):

“The success of a new service, if really demonstrated itself different from all the others, however could decree the end: where there’s a lack of Venture Capitals and/or the ads are to cover the band costs, naturally proportional to the traffic, the only reason of survival remains the sell to a big company.

As we know by now, Web 2.0 web application’s interfaces have their peculiar style defined by reflections, fades, drop-shadows, strong colors, rounded corners and star badges, these standing out in the header of every homepage.

Badges are the key element of this kind of design, being the first to flash user eyes, and so extremely important for the right communication of a message with fundamental importance.

Below you’ll find some example badges, arranged in four incremental levels, each one related to a different business model.” (Quote from Central Scrutinizer)

This is a humorous way to portray the current environment; however, it highlights a serious issue facing web 2.0 companies. With so many new web 2.0 companies, it becomes difficult to stand out in the crowd. Not all of them are looking to rise above the crowd in order to exit the business, but even getting mindshare with users can be difficult. Those that succeed in growing a large user base tend to do so virally, YouTube / MySpace / del.icio.us / etc., which is difficult to predict. Web 2.0 companies will need to focus on finding ways to get attention. Maybe the acquire me badges are not such a bad idea 🙂

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Is MySpace worth $10 – 20 BILLION?

September 28, 2006


Doubtful.

According to RBC Capital analyst Jordan Rohan, it might be possible. “Rohan said MySpace could demonstrate a value of between $US10 billion and $US20 billion within a few years. Acknowledging he was making an ‘audacious claim’ he justified the forecast on the basis of MySpace’s ‘raw, unprecedented user/usage growth.’” (Quote from Sydney Morning Herald).

This is bubble talk. Paul Kedroski thinks that “putting up oversized estimates of a company’s value is mostly a marketing move for a financial analyst, not an exercise in company valuation. The number doesn’t matter; it is simply a piece of red meat to attact the media pack.” (Quote from Infectious Greed).

Occassionally analysts get caught up in the excitement of the next new thing to make wild predictions about technology (aka the hockey stick projection). We saw way too many of these predictions during the dot-com bubble. Looking back at projections made in 1999 and early 2000, how many predicted that [insert name now defunct company here] was in a position to take over the world in just a few short years?

In reality, technologies rarely, if ever, continue meteoric rises, and MySpace is no different. Yes, MySpace has had tremendous growth. Yes, they are one of the most frequently visited sites on the Internet. However, two things are likely to prevent MySpace from hockey stick growth:

  • First, young people are fickle when it comes to trends. MySpace is the hottest social networking site right now, but it may not be as hot in a few years. The younger participants may find another site more interesting as they become old enough to participate, or another company may target the below 14 crowd and keep them as they grow older.

  • Second, growth will stabilize as the market gets saturated. A new group of 14 year-olds become old enough to use the site every year; however, at the same time, others will drop off as they outgrow it or move on to other interests.

I am not saying that MySpace will crash and burn anytime in the near future. I suspect that it will continue growing at a *reasonable* rate (just not at an exponential rate).


Class Action Lawsuit Against AOL for Privacy Violations

September 26, 2006

In classic AOL fashion, when receiving complaints about privacy concerns related to the release of search results for 600,000 customers, AOL responded by offering them a free month of AOL … a service that is already free. Interesting.

Here are the details from John Paczkowski at SiliconValley.com:

Filed Friday, the suit accuses AOL of violating the Electronic Communications Privacy Act, of fraudulent and deceptive business practices, and beyond that of a peerless ineptitude in its handling of the matter. “As of the date of this complaint it is the understanding of plaintiffs and their counsel that AOL has not done anything to help the members whose personal sensitive and confidential records were released to the public by AOL,” the complaint alleges. “AOL members who sought assistance from AOL about the disclosure of the Member Search Data were not offered any assistance. AOL’s only response, if any, was to offer the victimized member a free month of AOL service, a service which AOL is now offering for free.” (Quote from SiliconValley.com)

As we move more and more of our lives online, we need to spend more time thinking about privacy and security concerns, especially when we start to centralize our searching, email, calendars, blogs, chat, etc. with a single provider (AOL, Google, Yahoo, Microsoft, etc.) At the minimum, people need to better understand the risks of what can happen when our private information is made public.


New Sponsorship Model for Blogs / Websites

September 25, 2006


TechMeme just released their new sponsorship model, and their approach is bit different from what we have been seeing on most sites. The typical sponsorship model involves either Google-style AdSense ads or TechCrunch-style sponsorship logos. Both of these are great models; however, I think that the TechMeme model is the best possible model for TechMeme, and it would also work well on other sites.

For anyone not already familiar with TechMeme, it “is an entirely automated web service that looks at what bloggers are talking about, and linking to, and decides what is news based on that analysis.” (Quote from TechCrunch). The sponsors have a place on the sidebar (clearly labeled as the sponsorship section) where the sponsoring company’s most recent blog entry is displayed along with their logo. In other words, to refresh their ad on TechMeme, the company simply needs to add a blog entry, and the new link will propagate to TechMeme via an RSS feed.

I love this model. I almost never click on banner ads or sponsorship logos; however, if I see an interesting blog entry from one of the TechMeme sponsors, I would certainly click on it. I suspect that this model will drive more people to click through the ad, thus driving more traffic from TechMeme to the sponsor than a traditional ad might be expected to generate. The end result is that these type of ads will have more value for the sponsoring companies and TechMeme just might be able to charge more for these ads in comparison to a traditional ad.

Jeff Jarvis, an expert in online advertising, says:

“I like it. It’s relevant; it’s human and not automated; it’s appropriate to the form. And it pays. … I think this works and I’ll be eager to hear the sponsors’ experience. I’d love to have a such a unit here.” (Quote from Buzz Machine).

I will be curious to see how others follow this example or modify it to create similar ads on other sites.


Using Wikis for Corporate Collaboration

September 25, 2006

I just posted an entry on my Intel Trends in Web 2.0 blog about how “Wikis can be a great collaboration tool for use internally within the corporate environment or externally for use with customers or clients.”

If you want to learn more benefits of using wikis and hear about how I have been recently using wikis for collaboration, please visit my Intel Trends in Web 2.0 blog.


Open Culture Blog Feed Issues

September 23, 2006

The Blogger Beta seems to be doing something a bit strange with my feeds causing problems in some feed readers. I suggest using my Feedburner feed instead of the default Blogger feeds. I will attempt to keep it stable through any additional Blogger Beta feed issues.


Viral Goofiness

September 22, 2006

These Dance Sister Dance videos are popping up all over the place, so I just had to do one of my own.

One of my personal favorites is the video with Scoble and Arrington.