Social Advertising - not surprising that it's been overvalued

Google still waiting for social ad payoff | Tech news blog - CNET News.com

It's not surprising to me to see that social networking has not developed into a gold mine of revenue for advertising. As I said before, I think that Facebook and MySpace are fun and interesting tools for personal communication and interest-linked networking. They've changed a bit about how we look at using the internet as a part of our daily lives; and, as a facet of defining "Web 2.0" have redefined how we consider information being broadcast whether synchronously, asynchronously, or semi-synchronously.

The problem is that it hasn't really defined itself well in the realm of making business sense. Ads don't pay off as well in the space because when people are in the social network realm, they're often not that close to thinking about shopping or buying. Neither are they thinking about becoming "Yacht charter captains" "finding other dating networks" or "Joining the real estate revolution!" They're thinking about their friends, what their friends are doing, and who their friends' friends are. Sure, there's the occasional curiosity that I'll want to follow an ad link about a travel destination, but for the most part, ads on social networks are overvalued and not as effective.

The genius behind AdWords/AdSense is that often times, the ads are placed in spaces very closely linked to, if not already, shopping sites where the internet consumer is already looking. Looking through an on-line advice blog for tips on improving your Labradoodle's behavior? Oh look, there's an Adsense ad for a site that sells restraining devices and books on dog training. Duh. Looking up sports scores on Espn.com? Oh, look there's an ad for my team's paraphanalia or a link to FatHead.com - gee I really like their TV ads.

But advertising in the social networking realm will find it's place and value, it's just that the high level of activity and membership on these sites is not translating into the number of dollars some have anticipated. The controversy over Facebook's Beacon and subsequent advertising tie-ins on the social networking site certainly dealt a setback on the image of social networks as a place where advertisers could expect positive results. I think that there was a lot put into the idea of "peer value" that when you saw in your newsfeed that your (trusted) friend bought that cool new sweater at bluefly.com - you might feel compelled to visit bluefly and buy their stuff too. The (legitimate) privacy concerns blew that idea clearly out of the water along with the value that it potentially provided.

There are perhaps a few missing links in the chain, and probably ones that will get constructed over time. Some of these links are cultural - surrounding users' internet shopping and browsing habits, expectations of social networking sites - and some of these are technological. The technology itself has to make simply (literally) good business sense. I've often maintained that I'm surprised that in the wake of Facebook's inability to prove that open apps have delivered any type of application that provides a business benefit, that LinkedIN should be the platform that makes that possibility a reality. But so far, I'm mystified that little has been heard on that front.

Google also changed the way we look at internet advertising by (first) building a great search engine and (second) shaping ads to conform to a certain level of understated uniformity and play along with some "level playing field" type rules that made everyone happy. It's been a tremendous boon that has made many people - advertisers, consumers, and ad space providers - tremendously happy. Whoever figures out this happy point in the venn diagram of all stakeholders on social networks will be another tremendously rich person.

Blogged with Flock

Palm going... going...

Palm closing retail stores, paying out Treo owners | One More Thing - CNET News.com

Yes, this is somewhat sad news but not entirely unexpected.  As I (and many other's) have been saying for the past few years, Palm has not really shown a  clear, cohesive vision of what a mobile product can really be and keep pushing forward on that agenda. They've been supplanted by other products (Blackberry, iPhone, even Windows mobile - to a degree) that have embraced an effort to really create a good mobile product OS. 

Palm's OS used to be really cool.  And there were always people developing cool new apps for it - in those days Palm had all the potential and vision in the world.  When they bought (back) Handspring, and focused their business on the Treo, they showed a dedication and direction that signaled the real fusion of PDA and cell phone.  They were essentially the only PDA manufacturer that came from the direction of first making PDAs as opposed to cell phones to create a great product with the Treo. (Consider the 2nd in line was the hp iPaq.)

But Palm did not innovate.  And they did not embrace a real quality standard for web browsing on the thing, or integrate wifi, sync services with web providers, etc. etc. etc. I could go on but basically, they had a great opportunity to best out the iPhone well before the iPhone came out but didn't.  They could have focused on making the Palm OS better.  They could have built Wifi into the thing (instead of waiting to release it on the T|X).  They could have focused on building truly good social apps that would take advantage of broadband services. 

Then there was the Foleo fiasco.  It certainly wasn't a great business move to announce that the product was getting pulled one day before it was to be on the market.  Were there concerns about quality control?  Concerns about the public embracing this thing?  How was the OS different from the Garnet Palm OS?  I guess we'll never know too much about the thing but apparently from a business perspective, it was believed that the losses from releasing the foleo would have been worse than not releasing it - that's the only reason to do so.  Doesn't bode well.

So what's next for Palm?  Good question.   The centro does seem to be a pretty good product and reportedly, that's where Palm intends to spread more of their resources.  It's not an iPhone killer.  Clearly not business targeted to go after Blackberry's market share, the Centro has potential as a "Smartphone-lite" type product that would be good with kids, college students, and basically the consumer niche that has more social than business needs for it.  And social networking is HUGE right now.  Despite the (still) lack of wifi, palm could really get a boost if the embraced developing social app connections for it.  Say, a live wikipedia connection to get info at any time.  Or improvements in integrating mobile messaging with im, facebook, twitter, or any other social app.  How about GPS?  Media streaming?  I like the media bar that flock puts in it's browsers.  Anyone ever though of doing he same with photos on a smartphone?  C'mon people, the opportunities are out there....

Blogged with Flock

Twitter, Facebook - Google.org rallies to make useful for disasters and other emergencies

Twitter, Facebook called on for higher purpose | Tech news blog - CNET News.com

If you happened to see this item in the techNews arena, this is a great example of how tech companies can set vision to projects on the side that oversee the humanitarian aspects of what their technologies can do.  Despite the numbers of people using cell phones for social networking applications such as Twitter and Facebook are still relegated to the way early adopters, the feasibility of developing the infrastructure - neh, keeping in mind the need for this "emergency infrastructure" as the business infrastructure continues to develop - is very apparent and necessary.  It's a natural extension of how 911 services were developed in the late 60's by AT&T and standardized across the nation. (Note how this is not universal beyond the US and Canada.  In Europe the emergency number is 112, but I digress.)

It will be interesting to see how an emergency services medium establishes itself in a mobile culture and what standards begin to get adopted.  Currently we have some competing standards for mobile communication including IM, text, status messaging (like Twitter and Facebook), and of course voice.  How will standards be implemented? And where will GPS device location technology fit into the framework particularly amid privacy concerns?  Already, there are sort of a "voluntary" GPS location identifying services such as Dodgeball out there where you voluntarily identify your location in hopes of locating nearby friends or associates. It's sort of a weird upban Geocaching game...

Also fitting into the technology puzzle, is how reliant we will be on cell towers and/or other  remote transmission relays in the event of an emergency?  What id cell towers are put out by disasters and/or loss of power?  My home disaster kit includes a pair of FRS/GMRS radios which do not require relays in order to communicate between the two. Can FRS/GMRS be tapped into somehow by cell phones in the event of an emergency (I know, I know these are completely different technologies but let's get thinking here...)

Blogged with Flock

Is Facebook useful? LinkedIN? Social Networks for everyday living

Since there's nothing really new about this Web 2.0 medium and how it has been defined by greater social interaction and many interesting developments in the past few years (Wikipedia, Digg, Flickr, ad infinitum...) the largest buzz in the past 18 months have been generated by social networking tools, notedly MySpace, LinkedIn, and then Facebook (in approximately that order). 

Now that Facebook has been in the national consciousness (in terms of sheer number of members, MySpace still has the most, followed by FB, and then LinkedIn as of late 2007), the question must be raised, "what on earth is Facebook actually good for?"  Same goes for LinkedIn and MySpace. 

A bit of history first: MySpace made a big hit in late 2005 and an article in BusinessWeek then cited that it was originally designed as a platform for helping promote interest in lesser known pop music artists through "fansites" and connecting fans. Interest in connecting in general quickly spread as people outside of the teen-early20something set started flocking to MySpace and connecting their pages with their friends' pages.   Meanwhile, the folks at LinkedIn built a similar tool start with their launch in 2003 that sought to connect people based on their professional interests and experiences - uploading resumes, linking industry professionals, helping with job searches and business opportunities. Again, people (with jobs) flocked to connect themselves with friends and business contacts.  Finally, Facebook was launched in 2004 and made available then only to people with a .edu email address. It was started in part as a web based extension of those "freshman facebook" photo albums that many colleges and universities put out.  Toss in some interactive messaging tools and you have you basic college network tool online.  In late 2006, Facebook announced that they were opening registration to any email address, basically opening the floodgates against their competitors.  Finally, in May 2007, they announced that they were opening the platform to allow developers to build applications that can "plug-in" to facebook and take advantage of the social capabilities.  Since then, membership has skyrocketed, but has it proved to be useful?

To date, there are more than 13,000 applications the most popular being FunWall and SuperWall by Slide and RockYou respectively, two early comers to the FB app game that basically took an existing app (Wall) and made some improvements.  There are about 3.7 million active daily users of SuperWall which represents about 6% of the total number of registered daily users in FB (60 million).   After these top two apps, there's a tremendous decline in number of users from iLike to HoldEm Poker to "Where I've Been."  The other thing that you note about these applications is that all they do is either send messages to your friends, play games, or provide information about yourself and your interests.  In about 8 months of open application development, not a single application that makes any business sense has reared it's ugly head. 

That's not to say that applications need to make business sense.  But take a look at what Google did with acquiring Writely and turned it into Docs and Spreadsheets; how they acquired Blogger, JotSpot, YouTube, GrandCentral, and so on.  I'm not saying that the strategy needs to  be to acquire technologies that benefit your business but it might be time for the FaceBook guys to consider that there's a place to put partnerships and capital and that might be in applications that would actually help your bottom line.  So far, Facebook is not a business tool, nor does it appear headed in that direction.  It will be interesting to see in the coming year how they do define their strategy to be in a space greater than just connecting friends otherwise, they risk becoming a more purely entertainment type tool like MySpace and the vast majority of their  users will remain under 25. 

The other interesting observation will be to see how Google's OpenSocial tools come into play.  I've long thought that Google has been on the right track - they're not trying to suck you into their platform or everything that you do and commit you to their standards. It's up to you to decide if their tools make (business) sense for you and to move forward with it.  They're compelling on their own right and not trying to lock you into their world.   If the Google tool is better than anything else out there (often it is) then you stick with it.  And it usually costs you nothing.  I see the same strategy going forward with OpenSocial.

On the other hand, what is LinkedIn doing?  At first blush, it is a compelling tool - network with people based on your social and professional interests.  Business people don't have time to waste flirting or "poking" on social networks.  It's get in, get out, business sense is the bottom line.  So I've been puzzled for some time why LinkedIn doesn't build apps that are truly smart for business or at least make the same move FB did with opening up an app development platform so that applications like Writely, QuickBooks, etc. might find their way in?  I know, it's much more complicated than it sounds but it's a business opportunity that has $$ written all over it. 

So at this point, in early 2008 it's easy to say that there's not much useful under the sun with social networks however, there is a tremendous amount of business potential out there.  I have high hopes for all these tools (even MySpace) but at this point don't feel that the high valuations are particularly compelling.  If the capital potential right now is membership, MySpace should be a runaway winner however the vast majority of their users are very young.  LinkedIn has the greatest potential in terms of who their capital are - they just need to figure out how to make their product more interactive and compelling.  And finally Facebook, well it's just too darn bulky right now.  It's like the Yahoo Messenger of social networks - great features, lot's of users, and probably going to be stable for a while - but leaves itself to be open to become less relevant in a world that wants applications that help the bottom line.

Blogged with Flock

MacBook Air, Foleo, iFoleo? And what now of iTunes Sync with a skimpy HD?

One of the writers over at Gizmodo got it right with what I've been saying all day since Apple publicly released the MacBook Air - this thing looks an awful lot like the failed Palm Foleo that became Palm's "Jump the Shark" moment this past year despite pulling it just one day before it made it to store shelves.  I suppose somewhere there were a bunch of unused ultra thin magnesium cases that were slated to become Foleos and someone at Apple saw an opportunity.

But on the other end, on the surface this appears to be a very cool product - not iPhone cool, but certainly the sort of computer that will turn heads when placed on a desk.  I'm imagining that the true target market for this thing now is high end execs looking for a little wow factor for those business meetings.  I mean, it's clearly not a consumer driven machine and not going to be a great multimedia processing machine for media crunchers or web developers so they're going after the ultraportable execs who bought a Vaio TZ150N or Dell XPS M1330.  It will be interesting to see how the MBA rates against those in terms of battery life, efficiency, etc. and how reviewers like the low form-factor keyboard. 

Another thought that I had in observing that this thing does not have an onboard optical drive is that, obviously for traveling execs, you won't be able to play DVDs on this thing.  "That's OK," you (or Apple) say, "you can get all your entertainment and movies directly through the iTunes store and save it directly to the hard drive." 

All 80 GB of it.  Which is about the same size as the iPod classic now sans OS.  And Leopard takes up 10 GB alone.  The point is, if iTunes "syncs" your music/video library with your iPod, it would be impractical to store your library on your MBA hard drive especially if you have an iPod with 40GB+ on it.  Impossible with 80GB or more (iPod classic).  So this is now a problem for the exec on the road who might want to plug in for a podcast or download a new tune now and then.

The challenge for Apple now is going to modify iTunes so that it treats the iPod hard drive like a real external HD and doesn't keep two copies of everything on each storage medium.  This is a sort of "Back to the Future" problem now where disk space is once again a premium issue.  I think there's real benefit to Apple officially unlocking the full external HD potential of the iPod.  Movies can be played off the iPod onto the MBA screen, an external device could link the iPod with AppleTV to exchange/drive media, and darn it, you could save some valuable disk space on your MBA.

Blogged with Flock

Google (Android) + Apple (iPhone) = mobile bliss (we're hoping)

Google betting big on mobile market--and Apple

Well, Google proves once again that even as it appears that they might be prepared to take on a popular medium (iPhone) with their own, usually better take (Android), that they're still not leaving users of the old medium in the dark, a la Microsoft's usual strategy. Embracing the obvious success of the iPhone while developing your own bigger and better OS can only help you in the longer run. And this was probably done at fairly low cost. I'm just getting into the world of developing mobile apps, but basically all that needed to be engineered was to rewrite pages to detect the mobile Safari bowser on the iPhone and render the new iPhone specific interface when a user goes to www.google.com. Pretty simple if you've already been engineering pages for mobile. The only trick is just optimizing things to fit well in the screen space of the Safari browser. Apple has helped this a lot by designing a very elegant and comfortable web interface that transposes well for users who have been on traditional desktop/laptop browsers for years.

I don't have an iPhone myself (yet) however, I did have a friend show me the interface last night and I have to say that this thing looks good. It doesn't "miniaturize" the experience of google applications, it looks"google clean" and appears to provides the best features that most google users want (gmail, calendar, picassa, search). It will be interesting to observe if there will be some interesting hooks developed between Picassa and the iPhone photo application. An announcement at MacWorld today suggests that there is a "pseudo-GPS" feature now being brought to iPhone via googlemaps that was described as using triangulation [I thought that triangulation was how all GPS worked - measuring the distance between you and two satellites to establish your position on earth. Unless what they mean is by triangulation against two cell phone towers.... I don't know, but it's worth some investigation.]

Blogged with Flock

SearchMash

SearchMash

Here's an interesting variation on the google search engine. According to Yakov this thing is built on a google engine with an Adobe Flex front end. Clearly, there's interesting ways to build out layers on existing technologies.

Great as a multimedia approach

Blogged with Flock