September 28, 2006
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).
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.
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.
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.
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.