Frequent thinker, occasional writer, constant smart-arse

Tag: youtube

Facebook is doing what Google did: enabling

The hype surrounding the Facebook platform has created a frenzy of hype – on it being a closed wall, on privacy and the right to users having control of their data, and of course the monetisation opportunities of the applications themselves (which on the whole, appear futile but that will change).

We’ve heard of applications becoming targeted, with one (rumoured) for $3 million – and it has proved applications are an excellent way to acquire users and generate leads to your off-Facebook website & products. We’ve also seen applications desperately trying to monetise their products, by putting Google Ads on the homepage of the application, which are probably just as effective as giving a steak to a vegetarian. The other day however was the first instance where I have seen a monetisation strategy by an application that genuinely looked possible.

It’s this application called Compare Friends, where you essentially compare two friends on a question (who’s nicer, who has better hair, who would you rather sleep with…). The aggregate of responses from your friends who have compared you, can indicate how a person sits in a social network. For example, I am most dateable in my network, and one of the people with prettiest eyes (oh shucks guys!).

The other day, I was given an option to access the premium service – which essentially analyses your friends’ responses.

compare sub

It occurred to me that monetisation strategies for the Facebook platform are possible beyond whacking Google Adsense on the application homepage. Valuable data can be collected by an application, such as what your friends think of you, and that can be turned into a useful service. Like above, they offer to tell you who is most likely to give you a good reference – that could be a useful thing. In the applications current iteration, I have no plans to pay 10 bucks for that data – but it does make you wonder that with time, more sophisticated services can be offered.

Facebook as the bastion of consumer insight

On a similar theme, I did an experiment a few months ago whereby I purchased a facebook poll, asking a certain demographic a serious question. The poll itself revealed some valuable data, as it gave me some more insight into the type of users of Facebook (following up from my original posting). However what it also revealed was the power of tapping into the crowd for a response so quickly.
clustered yes
Seeing the data come in by the minute as up to 200 people took the poll, as a marketer you could quickly gauge how people think about something in a statistically valid sample, in literally hours. You should read this posting discussing what I learned from the poll if you are interested.

It’s difficult to predict the trends I am seeing, and what will become of Facebook because a lot could happen. However one thing is certain, is that right now, it is a highly effective vehicle for individuals to gain insight about themselves – and generating this information is something I think people will pay for if it proves useful. Furthermore, it is an excellent way for organisations to organise quick and effective market research to test a hypothesis.

The power of Facebook, for external entities, is that it gives access to controlled populations whereby valuable data can be gained. As the WSJ notes, the platform has now started to see some clever applications that realise this. Expect a lot more to come.

Facebook is doing what Google did for the industry

When Google listed, a commentator said this could launch a new golden age that would bring optimism not seen since the bubble days to this badly shaken industry. I reflected on that point he made to see if his prophesy would come true one day. In case you hadn’t noticed, he was spot on!

When Google came, it did two big things for the industry

1) AdSense. Companies now had a revenue model – put some Google ads on your website in minutes. It was a cheap, effective advertising network that created an ecosystem. As of 30 June 2007, Google makes about 36% of their revenue from members in the Google network – meaning, non-Google websites. That’s about $2.7 billion. Although we can’t quantify how much their partners received – which could be anything from 20% to 70% (the $2.7 billion of course is Google’s share) – it would be safe to say Google helped the web ecosystem generate an extra $1 billion. That’s a lot of money!

2) Acquisitions. Google’s cash meant that buyouts where an option, rather than IPO, as is what most start-ups aimed for in the bubble days. In fact, I would argue the whole web2.0 strategy for startups is to get acquired by Google. This has encouraged innovation, as all parties from entrepreneurs to VC’s can make money from simply building features rather than actual businesses that have a positive cashflow. This innovation has a cumulative effect, as somewhere along the line, someone discovers an easy way to make money in ways others hadn’t thought possible.

Google’s starting to get stale now – but here comes Facebook to further add to the ecosystem. Their acquisition of a ‘web-operating system‘ built by a guy considered to be the next Bill Gates shows that Facebook’s growth is beyond a one hit wonder. The potential for the company to shake the industry is huge – for example, in advertising alone, they could roll out an advertising network that takes it a step further than contextual advertising as they actually have a full profile of 40 million people. This would make it the most efficient advertising system in the world. They could become the default login and identity system for people – no longer will you need to create an account for that pesky new site asking you to create an account. And as we are seeing currently, they enable a platform the helps other businesses generate business.

I’ve often heard people say that history will repeat itself – usually pointing to how 12 months ago Myspace was all the rage: Facebook is a fad, they will be replaced one day. I don’t think so – Facebook is evolving, and more importantly is that it is improving the entire web ecosystem. Facebook, like Google, is a company that strengthens the web economy. I am probably going to hate them one day, just like how my once loved Google is starting to annoy me now. But thank God it exists – because it’s enabling another generation of commerce that sees the sophistication of the web.

Tangler

This is the second post in a series – wizards of oz – which is to highlight the innovation we have down under, and how the business community needs to wake up and realise the opportunities. I review Tangler, a Sydney-based start-up that has recently released their application to the world as a public beta.

Tangler is a web-service that enables discussions over a network. Think of discussions with the immediacy of Instant Messaging (it’s easy), but with the persistency of a forum (messages are permanently stored). Discussions are arranged into communities of interest (groups), which are further broken down into topic areas. Click here to see a video overview.

Value

1) It’s a network application. Although it’s got a great design, and looks like a funky website, the real power of this web service is what it’s working towards: discussions over a network. Imagine a little widget with the topic “What do you think of Elias Bizannes?” placed on my (external) personal blog, my internal work blog, my myspace/facebook/social networking page, as well as it’s own dedicated forum on the Tangler site. A centralised discussion, in a decentralised manner. That’s big.

2) It’s community has great DNA. Communities are not easy things to build – my own experience on a getting-bigger-by-the-day internal project has shown that it is a complex science, touching everything from understand motivational theory to encouraging the right kind of behaviours (policing without policing). My usage on the site has shown to me that the active community building currently occuring, is on the right track. Anyone can hire a code monkey, wack on some flashy front-end, and say they have a great product. But not anyone can build a strong community – even Google struggles on this (the acquisition of YouTube happened largely because of community, because the YouTube community beat Google’s own service). Tangler’s community is already turning into a powerful asset – the DNA is there – now it just needs exposure, and the law of cumulative advantage will kick in.

3) The founder and staff are responsive to its community. I posted a question on the feedback forum, to prove this point: I got a response in an hour, on a Saturday. The staff at Tangler are super responsive – which in part, is due to the real-time discussion ability of the software – but also because of their commitment. As I state above – the value of Tangler is the community of users it builds – this type of responsiveness is crucial to keep its users satisfied to come back, because it makes them feel valued. Additionally, the community is driving the evolution of the application, and that’s the most powerful way to create something (adapting to where there is a need by the people that use it)

4) It’s a platform. What makes Tangler powerful, is that it encourages discussions around niche content areas. Make that niche content, being created for free. Low cost to produce + highly targeted content = an advertisers dream. Link it with a distributed network across the entire Internet (see 1 above), and you’ve got something special.

Conclusion

Social networks, which is what Tangler is, are characterised by:
1) the existence of a repository of user-generated content and
2) the need of members to communicate.

Tangler’s user-generated content and communications web make them an interesting fit for both media conglomerates and telecommunication companies (but for different reasons). I see a Tangler acquisition as a no-brainer for the big Telco’s. Integrating a social network like Tangler into Telstra, builds on the synergy between the communication needs of social network users and the communications expertise and service infrastructure of the communication companies. Unlike voice calls that are a commodity now, the Telco’s need to take advantage of their network infrastructure and accommodate for text-based discussions, which can be monetised for as long as the content exists (with advertising).

The challenge for Tangler however – as with any other Internet property – is that the scale of the audience of social networks determines the nature of the relationship with a communications company. Micro-sized social networks are not interesting to communication companies. Massive social networks are, but history has shown they would rather be partners than be acquired. To be attractive to the big end of town, Tangler needs to show to have a scale large enough to grow as a business but not too large to dictate the terms of the business.

My observations conclude me to think that they will be a hit once they open up their application to external developers, which will relieve the development bottleneck faced by their resource and time constrained team. However they shouldn’t rush this, as I still think their performance issues are not completely ironed out yet. An open API would be taken up by its enthusiastic community who are technologically orientated. Not too mention the strong relationships the CEO and CMO have forged with the local web entrepreneurial and development community in Australia.

My boss is currently doing a secondment as acting Finance Director at Sensis, Telstra’s media arm. Maybe I need to organise a catch-up with him, before these guys get snatched up by some US conglomerate!

I’m on the APML workgroup

As Chris announced, I’m now a member of the APML work-group. So the question, is why have I joined it? Because profiling is huge. People are only starting to get to grips with the loss of privacy on the web – I suppose an externality of an electronic world. I remember reading about some guy who posted on a marijuana bulletin board in 2000, and that it still comes up in Google searches. Prospective employers, prospective girlfriends, prospective anything – he now cannot control the information that he was once a pot head. It’s like someone watching you get changed, and you don’t have the option of pulling the curtain. Privacy, is about giving you the choice to use that curtain – whether you’re an exhibitionist or not!

Something a lot of people arn’t aware of, is the amount of data other companies are collecting – and you can’t control it. You reading this blog posting – I can find out what browser you have, what city you are viewing this from, who your Internet service providor is – heck I even know what version of windows you use. And I’m not even trying to profile you – think about Google or DoubleClick that know of every website you visit by placing a cookie on your computer.

Why do people want to collect information about you, known as your “attention data”? Because they can profile you – and when you can profile someone, you can personalise the experience for them…and target their advertising better.

The APML standard does a very simple thing: it allows you to control your “attention”. It’s still early days, and although there are some smart people discussing some deep issues on it, everyone on the work-group is still feeling their way of where this standard is going to go.

If you have thought about targeted advertising – and if you don’t you should – I would watch this standard. Or better still, start discussing it – this is a huge opportunity to set things right, before the Internet dominates our lives.

A bit of inspiration

and the text, if you don’t want to see the video:

Here’s to the crazy ones.

The misfits.

The rebels.

The troublemakers.

The round pegs in the square holes.

The ones who see things differently.

They’re not fond of rules.

And they have no respect for the status quo.

You can quote them, disagree with them,

glorify or vilify them.

About the only thing you can’t do is ignore them.

Because they change things.

They push the human race forward.

And while some may see them as the crazy ones,

we see genius.

Because the people who are crazy enough to think
they can change the world, are the ones who do.

?¢‚Ǩ‚ÄùApple Computer (via workhappy.net)

Building a (sustainable) business

One of the highlights at Bar camp Sydney, held on March 3rd 2007, was a presentation by Martin Wells and Mike Cannon-Brookes on “How to Start a company”. Both men have a lot of wisdom to share, which was worth every penny (no pun on the fact the event was free). However despite an awesome presentation that covered a lot of ground, there was one slide that in particular annoyed me. It bothered me so much that I wanted to say so, but I thought it might be better to let it be because the guys were doing an otherwise great job.

My problem was slide number two. It listed four companies as ‘ideal’ start-up businesses for all those in the room. Those companies were Flickr, Del.icio.us, YouTube, and MyBlogLog. Why I had a problem with that, was because if that is what web entrepreneurs are being told to look up to, then we have a bit of a problem.

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