Monday, February 27

The Social Web: crowd power

These are interesting times. We're all trying to figure things out, 'star gaze' and bounce off each other.

There's a lot of theory about the social publishing and what I like to label 'emotional' search.

The phrase 'social surfing' (, Yahoo360, conjures up numerous ideas for web collaboration and community that haven't even been touched on yet - imagine 'social buying', where users actively visiting an e-commerce site could, via a small app on their desktops meet each other, discuss the pro's/con's of the product and even 'group buy' to bring the costs down. Ebay pits buyers against each other, 'social buying' lets them gang up together. I am sure some of you may know of tools that do this already.

The idea was first came about in web 1.0 (that big bubble) by companies like GroupTrade, PriceLine, etc. But the buying process was controlled by the seller - so buyers never get true visibility of each other. Same goes for those mind-numbing TV channels, Bid-up TV, QVC and tat-for-dollars (I made that one up). To make the idea really take off, you've got to let consumers play the system, they need to 'gang-up', they need to really use their buying power in a fun way to get something better.

Ebay is fun, but it's buyer against buyer. What would happen if a couple of buyers could agree their bids and who was going to win - and help each other find another product for the one that missed out.

Disrupt the disruptive business!

Friday, February 24

China's rise does not mean conceding to China

I'm currently reading China Inc. by Ted C.Fisherman. Here's a small extract:

"Americans tend to focus on the huge inequality in trade between the two countries. It is a worry American's help to create by buying more from China's humming factories. In 2003, the Chinese sold the United States $152 billion more in goods than they bought. Contrary to common wisdom, the trade deficit with China does not mean that American's are spending down the national wealth at a much faster pace than ever before. So far, most of China's gains with American buyers have come at the expense of the other counties that once lured American dollars, especially other Asian countries.

......Columbia University economist Jeffery Sachs, counselor to nations, advises Americans to prepare for a world where by the year 2050, China's economy could well be 75 percent bigger than their own.

But conceding China's rise does not mean conceding to China. However, it does mean acknowledging a remarkable truth confronting us all....we need to know what is happening today in China - worker by worker, factory by factor - and why it will affect everyone."

Monday, February 20

It's all in the numbers

Food for thought:

1. India's internet users grew to 38.5m by the end of 2005 (+50% on previous year)

2. The Top Advertiser in the US by media value last year was...Vonage (not AT&T)

3. Search use in the states grew 55% y-o-y (are people struggling to find stuff?)

4. The medals for fastest growing broadband countries go to: Morroco, Romania and India

5. The most broadband lines are in US (46.9m), China (35.9m) and Japan (26.4m)

6. Users are experimenting with web browsers, our window on the net, now more than ever, Microsoft's share declined by 5% to 85% of users last year

7. Internet usage of TV and Internet has increased 72% in four years

8. 5% of Americans consume internet through RSS/XML aggregators

9. 81% of teens play games online, 79% use IM online (just 10% shy of email use amongst this group)

10. "There are three types of lies - lies, damn lies, and statistics." - Variously attributed to Benjamin Disraeli, Alfred Marshall, Mark Twain and many other dead people

Sunday, February 12

MSN fuzzy strategy and how this could be Microsoft's year

Following up on yesterday's post this article backs up the public/media confusion over where MSN sits in the whole picture. Here's a snippet:

Microsoft has appointed former MSNBC chief John Nicol to infuse the company's MSN portal with more multimedia content and make it more appealing to online advertisers. But with MSN rapidly being overshadowed by the company's Web-based services branded under the name "Live," some analysts are scratching their heads as to what exactly lies ahead for the MSN portal.

Analysts still see fuzzy future for MSN as new chief takes helm

So it would seem MSN is following Terry Semel's entertainment focussed Yahoo!

In Microsoft's defense this really could be the year where they hit back. The sleeping giant is hardly likely to snooze for long. Certainly the whispers are of a superb and aggresive PPC advertising platform, IE7 taking the leap forward we have all been waiting for (download the developers IE7 Beta here), "Live" and Vista providing two new integrated on/offline platforms going forward.

But in the internet space its probably their friendship with the global 'connected' community (and by that I mean the web developers, thought-leaders and entrepreneurs) that will make or break the fight back. For example, we'll all be forgiving of those two-year longBeta products from Google, Yahoo and Amazon - because the community of influencers rarely shoots these companies down for any bugs.

Microsoft still carries the baggage of an old school software company. And in the old software space we're much less forgiving of long-term Beta. When Microsoft make a final release, the community expects it to be finished, and immediately goes looking for the holes.

MS has certainly seeded it's developments this year to create some anticipation. I hope they execute well as it will really push Web 2.0, not to mention Google and others onwards.

Saturday, February 11

Google repositions as multi-media advertising platform

11 February 2010

Today, Google became the advertising platform of choice for News Corporation worldwide. The deal, worth $1 billion dollars per annum, will enable News Corporation to streamline production facilities, increase operating efficiencies and rapidly speed the delivery of targeted advertising on any platform (TV, Radio, Web, Mobile).

Using Google's MediaSense system, News Corporation can receive ads online for any platform, any brand within the group and across any target audience the advertiser specifies. Like the early AdSense system, popular at the beginning of this decade, Google has opened up advertising to the masses providing simple easy interfaces for small businesses to start spending ad dollars.

In 2005 Google was perceived as a threat to the world's major content brands as advertising money shifted from tradional media platforms to Google and other search engines. Now, it is widely recognised that Google's original advertising system has significantly grown the value of the advertising industry (media) globally. The technologies have opened previously undersold inventory to thousands of smaller advertisers. Whilst the media industry has benefited as a whole, the large brands have suffered rapid shake up in their sectors with declining yields and shifting of budgets between platforms. Google's advertising technology has redistributed some of those traditional premium rates across a wider range of publishers.

In addition advertising production costs have been forced down via MediaSense's simple editing and mixing interfaces, providing near professional audio, video, web, print and mobile advertising to be created on a home PC. Industry figures, such as WPP's Chief Executive Martin Sorrell, have struggled to find a competitive response to MediaSense as they are burdened with large creative and production teams, professional editing suites and capital city offices.

Recently, Google and many major media conglomerates have become strong bedfellows as Google shifted its strategy from search to being the technology powerhouse behind the content. Since 2008 search has become increasingly fragmented and competitive. It is now widely accepted that as digital media has matured, and consumers have formed habits, a multi-tude of brands serving specialist content areas are the preferred destination rather than search. Whilst search has become part of the plumbing of the internet, it has also taken a back seat as consumers are tired of seeking new sources of information and increasingly rely on their brand habits.

Yahoo, AOL and MSN have all pursued hybrid strategies, favouring to ownership of the technology as well as production of content. This has proved highly successful for AOL, with its Time Warner links, and Yahoo with an executive team experienced in content production and programming. Both have established themselves as global media brands cross-media, competing on an equal footing with News Corporation. Microsoft has struggled to make this hybrid strategy pay with its roots still firmly embedded in technology. Google's acquisition of DoubleClick in 2007 proved a decisive blow MSN and other pretenders to the advertising thrown.

Crucially, today's News Corporation deal provides Murdoch's group with unique access to Google's sophisticated analytics and customer insight. This is reported to be the first time that Google has allowed direct access to its analytics tools. Industry experts believe that this insight will be applied across the News Corporation group to improve programming, advertising targetting and will spawn new revenue streams.


None of the above has happenned...yet.

Reports this week show the building blocks towards it:

Google Sets Sights on Old Media

Google Sets Its Sights On Domination

Sunday, February 5

Amazon vs Wall St: Having your cook book and eating it

Another earnings dissapointment, this time from 2002's net darling Amazon, and there are claims from investment analysts that the maybe "the internet model e-tailer efficiencies are over".

In an article from The Register "Amazon blames the grinch that stole Christmas":

Bezos again stressed needed to invest for the future, in particularly digital services, adding that "if we were totally optimizing our cost structure for a kind of a steady-state business, you would see a different cost structure."

This prompted a withering piece of sarcasm from one analyst, Safa Rashtchy of Piper Jaffray. who told the WSJ: "It seems like Amazon is a company which will perpetually be in investment mode."®

Why would it not be in investment mode, Amazon is still gaining more customers, expanding geographically, improving technology and CRM and now fighting a growing number late starters who can copy-cat their technology. Is this situation really any different to when Coca-Cola, Levis or Starbucks first got started...? Let's remember Amazon is a company that has sprung up $8.5bn in sales in a few short years.

Here are my thoughts:

1. Amazon is the clear first mover and leader, and it's not making the mistake of getting complacent
2. The internet is only a decade young, there is still plenty of time for Wall St to drain these brands like a cash-cow
3. Efficiencies for e-tailers are finite - internet saves on marketing, crm, billing and stores - not the rest
4. The rest of the books/retail industy is playing catch-up, Amazon will have less "space" to dominate as time goes on
5. Maybe these analysts invested for the short-term, and want to cash-in on Amazon
6. It's too soon to consider this an 'income' stock, Amazon is a growth company - and it grew sales by 23% last year
6. Amazon can only dominate a small part of the longtail, because it can't stock everything. The rest of the tail is the preserve of small specialists i.e. the store in Paris that has 1,000 rare Tin Tin comics
7. The incremental return from further efficiencies/technologies will decline - since Amazon are already well optimised. But a 5% hit on earnings due to investment is more than justified by a 1% improvement in earnings year-on-year thereafter as a result of the investment
8. For all it's ingenuity and innovation, Amazon still has to manage real world costs (distn costs rising due to oil, exchange rate risks..), and the net efficiencies and growth will not always compensate

Everything goes in cycles. Net cycles are a little quicker. It was only five years ago Bezo's and Amazon was derided for its investment strategy, to then receive applause in 2002/2003 for turning a profit. That's not to say their respective stocks aren't overvalued right now but are we really so short sighted to question the business model?

Here's a reminder of the past:

Internet stocks hit 52-week lows on advertising, e-commerce worries