Interview With Chris McGill of Mixx.com
Posted by Nick O'Neill on August 19th, 2008 5:40 PMThis afternoon I had the opportunity to speak with Chris McGill, the founder of Mixx.com. For those not aware of Mixx, the company provides a social content discovery service. The key offering is that users get to categorize their content via tags rather than have their content forced into pre-determined categories as Digg and Yahoo! Buzz currently do.
I also discussed yesterday’s opening of Yahoo! Buzz with Chris and what he though the impact on Mixx was. He suggested that Buzz does not target the same group of users that his site does. Chris also mentioned that the site continues to experience spectacular growth, attracting over 3 million users this month. Much of the growth has been attributed to organic sources (friends telling their friends) as well as the launch of the new Mixx communities.
I asked Chris about their monetization strategy and received the expected “we’re not currently focused on monetization” response. This afternoon I also posted that this has become an all too familiar response. If the site can continue to grow by leaps and bounds, the company may be justified in their delayed monetization strategy. I also spoke with Chris about a number of other things, so I definitely suggest listening to the podcast below!
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Primary Monetization Model for Social Media: Advertising
Posted by Nick O'Neill on August 19th, 2008 4:10 PMIf it wasn’t clear enough, advertising is the core source of revenue for all companies in the social web. As I wrote this morning, advertisers provide “the revenue for four out of the five primary types of companies in the social web economy”. In another article posted this morning on Alley Insider, Vasanth Sridharan revealed that RockYou will begin launching advertisements from car advertisers.
Car advertisers are some of the largest advertising spenders in the U.S. In the first quarter of 2008, General Motors spent $536.5 million, Toyota Motors spent $350.4 million and Ford Motors spent $330.2 million on advertising according to Nielsen Monitor-plus. The auto industry was also one of the first entrants into banner advertising and they are also one of the early entrants into social media.
What Matters More: Monetization or Users?
One of the classic statements in the social web industry is “our company is not currently focused on monetization”. The creators of technology products love to spend time focusing on refining their products while building the user base. In the early stage this makes a lot of sense because if only a few thousand users are coming to your site, it doesn’t really make much sense to try to generate revenue.
The strategy of “grow first, monetize later” seems to make sense for a lot of venture-backed companies because they have the luxury of time. Unfortunately though, I really don’t think these companies have as much time as they think. In a world of limitless inventory, investing the majority of a company’s resources in building more inventory doesn’t seem to make much sense.
Social Media Advertising is Nascent
This industry is still young though and advertisers are slowly (extremely slowly) beginning to understand what social media has to offer them. Spending money on a television advertisement does not generate as much interaction with your end consumer. As such we are seeing a number of creative ways to advertise in social media.
At the end of the day though, isn’t advertising just advertising? Advertisers want to invest money in promoting their products and services and they want some way of justifying their expenditures. Early on, social media campaigns provided little data in terms of return-on-equity (ROI). We are beginning to see that change though as new social analytics companies emerge and new forms of metrics generated.
It’s time for social media companies to invest more time in developing advertising solutions rather than their user base. Until someone comes up with a new way of making money through social media, it’s the only way to generate revenue.
(No Ratings Yet) Loading ...Can Facebook Give Consumers Control of Their Data?
Posted by Nick O'Neill on August 19th, 2008 10:00 AM
One of the primary issues facing consumers in the digital era is control of their private data. Yesterday I wrote about the Peter Jennings special “No Place to Hide” which covered a lot of the issues facing consumers. The reality is that munch of our transactional data is already tracked and used to create custom profiles of our identities. Online there is currently no way to manage that data and all one can rationally conclude is that somewhere along the line our data is being sold.
Give the Users Control
Facebook could provide an interesting solution: enable users to sell their data to advertisers. The pinnacle of this system has been discussed for years. A single system in which users can grant and revoke advertisers’ access to personal data at the user’s discretion. The reality is that such a theoretically beautiful system can’t compete with existing systems. That’s because advertisers can currently purchase your data and then they are free to do as they please.
With the assistance of personal privacy laws, Facebook could potentially give the consumers back control. With Facebook Connect, the users have control which contrasts to the first iteration of Facebook Beacon. In this new system, the users really do have control of the data that remote services can access. As one developer told me though “there is the terms of service and then there’s the laws of physics”.
Challenges Ahead
In other words the system makes a lot of sense as long as the developers abide by Facebook’s rules. Facebook has already had issues with this on the existing Facebook platform. We saw this issue arise when it became clear that users that had used Slide’s Fun Wall application had their entire profiles exposed to other users. Eventually Facebook realized the problem and shut down the application until Slide resolved the issue.
Policing the net isn’t scalable though. Automated systems are important in digital enforcement which means Facebook must focus on automating their policing activities. Facebook is being careful as they roll out Facebook Connect because any flaws in the system could prove catastrophic. Luckily for Facebook (and potentially not so lucky for the developer) users’ personally identifiable data is still protected by Facebook.
Taking One Step Forward
While we may not have complete control of our data in which we can grant and revoke access to advertisers, Facebook Connect is one step in the right direction. The reality is that users must have control of their data. Even Facebook doesn’t give users complete control yet though: users still have their personal data locked within Facebook’s databases and it’s not coming out anytime soon.
There is clearly a competitive rationale behind not giving users’ complete control. Is it possible to give users complete control of data access while limiting data ownership? Definitely and that’s exactly what Facebook is attempting to do. This doesn’t work as a long-term strategy but in the short-run it will most definitely help move toward giving the users back control.
For now we must accept that this is a step in the right direction yet still remain critical of future moves. Privacy is something that consumers lost control of long ago. Perhaps these new social services can begin to give the control back to the users.
(No Ratings Yet) Loading ...The Social Web Economy: Business Development & Sales People
Posted by Nick O'Neill on August 19th, 2008 9:00 AMThis is a continuation in the series on “The Social Web Economy“
While they don’t exactly have the same roles, I’m grouping business development and sales people into the same category. Both people end up doing a lot of the same things. The sales person’s primary job is to bring in advertising dollars. Whether it’s brands or advertising agencies that they are talking to, this group is generating the revenue for four out of the five primary types of companies in the social web economy (the only one they aren’t generating revenue for is analytics companies).
Analytics companies may or may not have a sales team depending on their strategy. They most definitely have a “business development team”. For the purpose of this post, the primary difference between business development and sales is that business development (or biz dev) focuses primarily on partnerships with other companies that help add value. Sales teams on the other hand bring in absolute dollars.
In small start-ups, the management team (or individual executive) does most of the business development. Advisory boards and boards of directors can also be leveraged to help perform business development operations. The bottom line is that this group is helping most of the companies in the social web economy keep afloat. For those companies that are in the red, these teams are most likely the ones taking the brunt of the beating after a CEO returns from their monthly board of directors meeting.
In order to generate substantial revenue, companies in the social web economy must have business development and sales teams. While the industry continues to search for alternative monetization models, it’s becoming increasingly clear that advertising dollars are the primary source of revenue. As such, companies are pitting one sales team against another, each attempting to offer creative new advertising solutions that will hopefully in the end bring in the big advertising dollars.
Unfortunately this space is becoming increasing competitive and in turn we are going to see a growing emphasis on hiring the top sales teams. No matter how you look at it, this group is driving the revenue. That’s the bottom line.
Next post in series: “The Social Web Economy: Investors”
(No Ratings Yet) Loading ...Friendster Launches OpenSocial Support
Posted by Nick O'Neill on August 18th, 2008 8:00 PM
Today, Friendster announced that they have deployed OpenSocial version 0.7 for their platform. In the coming months, the company will begin rolling out version 0.8, the version that MySpace announced support for in the past couple weeks. The most significant part of this announcement is that now developers that have build applications on other social platforms supporting OpenSocial will be able to make the accessible via Friendster much quicker.
In contrast to Facebook’s 30,000 plus applications, Friendster has only 569 applications. That’s not to suggest that the applications are not being used though. According to Friendster’s own statistics, “over 10 million unique users have added ‘apps’” since the launch of the platform last year. While less significant than some of the larger platforms, this is still a substantial number.
Monetization will continue to be a challenging issue for Friendster though given that their primary demographic is southeast Asia and the majority of advertising dollars are spent domestically. Whether or not the company is generating substantial revenue, the company has been able to expand its reach in Asia where the competition continues to heat up.
This is the first news to come out of the company since they announced a new CEO and $20 million in funding.
(No Ratings Yet) Loading ...LinkedIn Launches Company Directory
Posted by Nick O'Neill on August 18th, 2008 6:18 PMLast week LinkedIn launched their company directory which has been in beta for the past few months. They also introduced the ability to search by company based on industry, location and company size. I wrote about the new directory back in March but I didn’t have the chance to browse through the directory. My first search was to find all of the companies based in the “Internet” industry in D.C. The result? 118 companies. I then proceeded to do the same thing for San Francisco and came up with 505 companies! Not extremely shocking but still informative. Here are the number of internet companies in other popular “creative class” cities:
- Atlanta, Georgia - 48
- Austin, Texas - 41
- Boston, Mass - 132
- Chicago, Illinois - 76
- Denver, Colorado - 57
- France (Country) - 196
- London, U.K. - 125
- Los Angeles, California - 246
- Miami, Florida - 33
- New York, New York - 306
- Phoenix, Arizona - 21
- San Francisco, CA - 505
- Seattle, Washington - 84
- Washington, D.C. - 118
How accurate is this calculation? Not very accurate because in the United States, the total number of companies claiming the “Internet” industry only amount to 2,323 which is far less than I would imagine actually exist. Then again, LinkedIn was extremely accurate with the companies based in Washington, D.C. so there is a good chance that this is a pretty good indicator.
The directory couldn’t find my own company though (Social Times Inc.) which has been classified as an “Internet” company. There were also other companies missing but so far this is the most accurate directory I have found for “Internet” companies based in the Washington, D.C. area. Take a look around the LinkedIn company directory and let us know if you find any problems with it. Do you think this is a useful tool?
(No Ratings Yet) Loading ...Let’s Disqus the Social Times
Posted by Nick O'Neill on August 18th, 2008 12:59 PM
At the beginning of June I announced that Disqus had “out opened” my comments. While the service made a lot of sense, I still refrained from adding the service for one primary reason: I couldn’t keep a local backup of my comments. In their most recent version, Disqus has resolved the problem and now users can maintain a local copy of comments while taking advantage of the Disqus tool.
I previously suggested that one of the primary reasons that I liked Disqus was that comments posted by users showed up in FriendFeed. Theoretically, I could import a feed of comments on my site but this way, the comment will show up twice: once from my site and once in the user’s feed. Is there any other benefit to using Disqus? Well, one other feature that I find to be useful is threaded comments.
Additionally there is supposedly better spam filters. I have yet to test the system for long enough to know but I’m guessing the company can back up their claims. Finally, being able to reply to the comments via mobile makes things a heck of a lot easier for me. While I could have logged into wordpress and then commented on my site previously, this service makes things quick and easy.
Aside from that I have yet to figure out any other reasons to add Disqus. It has a nice design and it has worked so far so I’m sticking with it for now. Have you used Disqus? Is there any disadvantages of the service? Are there any benefits that I’m missing here?
(No Ratings Yet) Loading ...Twitter’s Path to Monetization: Copy Meebo
Posted by Nick O'Neill on August 18th, 2008 11:30 AM
This morning there was a post in BusinessWeek which discusses Twitter’s lacking monetization model and the possible ways the company could generate revenue. No matter which way you look at it, the most obvious way for Twitter to generate revenue is through some sort of advertising. Whether it’s banner advertising or in message advertising, advertising appears to be the quickest path to monetization.
So what type of advertising will be effective for Twitter? If you look at other social media destinations on the web, each service provides custom advertising solutions. For example, Facebook provides news feed advertisements (which typically have some sort of social relevance) that significantly contrast traditional banner advertisements. Meebo also provides an interesting solution and it’s one that I think Twitter should copy.
The advertisements are rich-media advertisements with the addition of user personalization. For example, Meebo’s advertising demo displays the Incredible Hulk advertisement. Users can easily switch their buddy icon to an Incredible Hulk branded icon as well as the site wallpaper. Users can also view video trailers and share those trailers with friends.
Meebo then reports back to the advertiser what sort of impact the advertisement had on conversations taking place across the service. Given that Twitter’s closest technology is chat, this form of advertising seems like a perfect solution. So far advertisers seem happy with Meebo’s offering so why wouldn’t they be happy with a similar offering on Twitter? They would!
The quickest path to monetization is to duplicate the monetization offerings of similar solutions. The only thing preventing Twitter from providing such a solution is the lack of a sales team. I’d be willing to bet that the company isn’t far from hiring one! Can you think of any other monetization solutions for Twitter?
(No Ratings Yet) Loading ...No Place to Hide Online Soon?
Posted by Nick O'Neill on August 18th, 2008 10:15 AMYesterday I watched an interesting show produced by Peter Jennings about the future of digital privacy sparked by a book, “No Place to Hide”, written by Robert O’Harrow, Jr., a reporter at the Washington Post. I was driven to Ted Leonsis’ Snag Films site thanks to an article in the Washbiz Blog. The film focuses on the future of digital privacy and is an informative piece which opened my eyes.
Over the past few months my focus on digital privacy has increased as I’ve begun to realize the flaws with the existing systems and that we are in the process of defining privacy standards. For the past few months my digital privacy exploration has been relatively limited to social networks and when I saw the video embedded below, I realized how big of a deal this really is.
The thing that struck me the most is how the same dynamic in which the private sector is able to act without interference from the public sector for the most part exists across most technology organizations within the U.S. I’m not sure that this is completely shocking but it is substantial. One of my personal goals over the coming months is to continue exploring the impact of social technology on privacy.
In the process, I hope that we can interact with and that readers of this site can learn from some of the policy makers who are helping to shape the future of digital privacy. As the film below highlights, the government remains to be ill-suited to handle the oversight of companies that oversee the management of our digital identities. For the past few months I have expressed the need for the creation of a formal organization that oversees digital privacy.
Whether or not this is a sufficient solution, it is important that this publication as well as others continue to explore this area. Without continuing coverage I fear that social technology could soon become as infamous as credit card companies when it comes to the trading of our digital identities without our explicit consent. This could be an unwarranted fear but without exploration of the issue I believe that we risk having our digital identities compromised further.
What do you believe the implications of social technology to be on digital privacy? Do you think an organization that oversees digital privacy is justifiable?
(No Ratings Yet) Loading ...Wordpress & Moveable Type to Throw Social Graph for a Loop
Posted by Nick O'Neill on August 18th, 2008 9:00 AMOver the past few years, there has been increasing tension among the owners of social networks and the users that interact with their friends via the sites. The primary tension resulted from the disconnected set of relationships across multiple sites and the inability to have a central location to manage our multiple identities. Hundreds if not thousands of solutions have popped up.
Some have come in the form of branded products while others have been categorized as new standards. One thing that hasn’t changed throughout all of the discussion about resolving the problem? A solution. While some of these offerings have a clear advantage over others, none of them have succeeded at attracting mainstream adoption.
Social Networks as the Hub
The best attempt at centralizing the social graph has been Facebook who arguably has the most accurate mapping of the social graph of any of the social networks to date. With their Facebook Connect offering as well as MySpace’s Data Availability product, both companies now have a chance to own our online identities. It is not as simple as releasing the products though.
MySpace released their Data Availability product back in June. As far as I can tell, the service has seen little adoption by developers. While I’m not completely sure about the slow adoption, based on the developers I’ve spoken with, it appears as though Facebook Connect could experience much quicker adoption.
The potential for centralized identities is significant and given their position as the largest global social network, Facebook has a shot at centralizing the majority of users’ identities online. For once, it seems as though there is a company that may actually have the ability to centralize registrations as well as identities and also has the adoption to back it up.
The digital landscape is glorious and simply when you keep everything else constant. Unfortunately things are not that simple.
Let’s Mess Things Up Some More
There are a lot of products on the web that would benefit from having their own social networks integrated into their sites. There are also a lot of brands that would benefit from having their own social networks. It’s for this exact reason that a whole slew of white label social network solutions were launched. Jeremiah Owyang has done the work of compiling a list of white label social networking platforms.
The problem with all of these different solutions is that they each have their own login and their own closed off versions of the social graph. I shouldn’t be letting Facebook and MySpace off the hook though because even their new services result in large, closed-off versions of the social graph as well. The difference is that they actually have a chance at becoming the central location of users’ identities online due to their broad reach.
Last week a large discussion ensued about the soon to be ubiquitous, blog-based social networks. Sarah Perez of Read/Write/Web suggested that the new version of Moveable Type and the upcoming launch of BuddyPress would mark a new era for blogs. Mainly that a large number of blogs will begin launching their own social networks. Duncan Riley provided the counter-argument, suggesting that people don’t have the time to join multiple social networks.
Whether or not people have time, it is clear that the launch of new services by Moveable Type and Wordpress will most definitely complicated central identities further. Moveable Type will claim support of OpenID and Wordpress could theoretically centralize users across all the blogs users become members of. This makes it easy for both to claim that they really aren’t complicating things that much.
Conclusion
The web is still a cluster f*ck. With a bunch of disconnected groups trying to provide centralized identity services and a bunch of disconnected sites and services looking to connect users, digital identities have become even more complex. All the while Silicon Valley thought leaders are struggling to make sense of it all. While there are big players that have a chance at making centralized identities mainstream, we are still at the early stages of these things becoming a reality.
Thankfully both Wordpress and Moveable Type are open-source and as such, it will be trivial to integrate existing services into the site. With the average blogger finding it complicated to modify the code of their site though these things could further complicate our online social graphs. We now have communication among our numerous contacts spread across email, messages on Facebook and MySpace, instant messaging and multiple other locations.
There’s about to be yet another place for those communications to happen: blog-based social networks. How do you think all of these things will fit together? Do you thing blog-based social networks really complicates things?
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