I'm kind of sick of hearing about the Google/YouTube acquisition.
Yes, I know. Another uber-success story of two twenty somethings who just cashed in on a gazillion dollars on a site they built in their apartment with a few developers. That's real nice.
Despite my acerbic tone, I commend the founders for their product innovation and consumer foresight. The end result of their hard work ... a pretty darn addicting site which has very high entertainment value.
Right now, Steve and Chad are probably at the plane dealership saying "does that GulfStream V come in Google blue."
Being acquired by Google is not a bad thing. You could have worse parents (think Microsoft). What did Mr. Hurley and Mr. Chen get .....
... the most recognizable brand name in technology, top notch technical talent, and sprinkle that in with loads of financial resources.
It will be interesting to see how Google mashes YouTube up with the current Google business model, if at all.
The execs at Google are wondering and scheming ...
How do we leverage/monetize the 35 million users, the 100 million daily video views we just bought for $1.65 billion.
Is it a pre and post roll play?
It's HAS to be much more than that. Otherwise, Google could have invested in their own video offering to do just that (just minus the audience, big assumption). The incremental opportunity lies in integrating some type of sponsored text ads into the video experience. This comes down to relevancy and targeting, Google's core competency (their secret sauce).
How much are those clicks worth now that you have a highly engaged consumer? Do you cross market a product/service based on previous click streams and that video? (i.e. behavioral targeting) Are these consumers THAT more ready to "transact"?
I don't know the answer to that.
I think it depends on the content. Quality content drives quality eyeballs/quality clicks.
I am curious to see how this merger impacts the world of paid search.
Clearly, a new channel has been born via this acquisition and Google will be putting their best and brightest on task to figure out the optimal way to capture more advertising spend here.
Tuesday, October 10, 2006
Thursday, September 28, 2006
Offline Print Media Will Survive
The imminent and current decline of eyeballs to print media is something that is often discussed. Clearly, people are moving online to consume today's media; this is happening across all verticals from autos, real estate to entertainment news.
Question is what do the newspapers, magazines do to keep those consumers?
Likely two options: A) invest in an online property if they already haven't or B) cut costs to keep the offline customers and make the business more efficient.
Sites like the Wall Street Journal and NY Times have done a tremendous job in executing on Path A but what about the rest of the bunch (i.e. the "mom and pop" type newspapers who still operate a printing press). The mom and pop don't necessarily have the financial resources of a rich parent company or the expertise to get into the online space.
It's a tough place to be right now, especially with all the money going into new consumer technologies and innovation. Competition can be deathly, as Darwin has so hypothesized and proven correct.
A ray of light does exist for old media .... "history shows that emerging mediums are additive. When a new medium shows up, the existing media still exist," says a VP at PQ Media, Leo Kivijarv.
There will always be a place for reading a newspaper over a Sunday morning coffee but over time, but I will ask .... for how long.
Question is what do the newspapers, magazines do to keep those consumers?
Likely two options: A) invest in an online property if they already haven't or B) cut costs to keep the offline customers and make the business more efficient.
Sites like the Wall Street Journal and NY Times have done a tremendous job in executing on Path A but what about the rest of the bunch (i.e. the "mom and pop" type newspapers who still operate a printing press). The mom and pop don't necessarily have the financial resources of a rich parent company or the expertise to get into the online space.
It's a tough place to be right now, especially with all the money going into new consumer technologies and innovation. Competition can be deathly, as Darwin has so hypothesized and proven correct.
A ray of light does exist for old media .... "history shows that emerging mediums are additive. When a new medium shows up, the existing media still exist," says a VP at PQ Media, Leo Kivijarv.
There will always be a place for reading a newspaper over a Sunday morning coffee but over time, but I will ask .... for how long.
Thursday, September 21, 2006
Funding Web 2.0, Venture Capital
No doubt that money is flowing into Web 2.0, however you define it.
VentureOne defines it as business models organized around some combo of user generated content, networking, and collaboration. They just came out with the latest numbers on 1st half 2006.
Here's a quick summary:
VentureOne defines it as business models organized around some combo of user generated content, networking, and collaboration. They just came out with the latest numbers on 1st half 2006.
Here's a quick summary:
- $262.3 million of venture capital into 49 Web 2.0 startups in the U.S. in the 1st half of 2006
- Consumer models are hot. They soaked up 63% of the funds at $165.3 million in the first half (27 deals)
- Median deal size for Web 2.0 companies was $4.4 million, 41% lower than the $7.5 median for venture financings on the aggregate
Wednesday, September 20, 2006
Zillow's Aiming at Customer Acquisition
Zillow came out with a new feature that is aimed at getting consumers more engaged and making their Zestimates more accurate.
Sounds like a win-win for the company and consumer.
What is it? A homeowner can edit their home facts.
The homeowner gets to set the facts straight on their home (SF, # bedrooms, bath, etc.) which will "help improve the accuracy of your Zestimate over time."
Very smart.
Why wouldn't every homeowner in America want to make sure their home is shown in the best possible light? Especially when it's time to sell.
Great in theory but in order to do this. The homeowner needs to REGISTER (ah ha!) and completing this process isn't exactly easy.
They need to verify you as the homeowner. That means you must provide either a credit card number or fax/mail a copy of your deed/title, mortgage statement, tax assessment, or utility bill to the company. How big of a barrier is this? I, myself, am not going to do this until others are using the Zestimate as a viable and trusted source for home values. It's a bit of a chicken and egg problem.
It's darn interesting to see how Zillow is trying innovative ways to build a relationship with their customers. I do wonder how many folks are going to take the time to pluck down a credit card or even fax a personal financial document to the company. Time will tell.
Here's a link on How To: Edit Home Facts.
Sounds like a win-win for the company and consumer.
What is it? A homeowner can edit their home facts.
The homeowner gets to set the facts straight on their home (SF, # bedrooms, bath, etc.) which will "help improve the accuracy of your Zestimate over time."
Very smart.
Why wouldn't every homeowner in America want to make sure their home is shown in the best possible light? Especially when it's time to sell.
Great in theory but in order to do this. The homeowner needs to REGISTER (ah ha!) and completing this process isn't exactly easy.
They need to verify you as the homeowner. That means you must provide either a credit card number or fax/mail a copy of your deed/title, mortgage statement, tax assessment, or utility bill to the company. How big of a barrier is this? I, myself, am not going to do this until others are using the Zestimate as a viable and trusted source for home values. It's a bit of a chicken and egg problem.
It's darn interesting to see how Zillow is trying innovative ways to build a relationship with their customers. I do wonder how many folks are going to take the time to pluck down a credit card or even fax a personal financial document to the company. Time will tell.
Here's a link on How To: Edit Home Facts.
Saturday, September 16, 2006
Web 2.0 Directory
A nicely executed directory with logos of all Web 2.0 companies. Visually pleasing. Check it here: Web 2.0.
Friday, September 01, 2006
Feeding the Edge
Edge Feeders.
Sounds like a specific category of the animal food chain. I came across this concept through a blog entry written by Fred Wilson, a managing partner at Flatiron Partners and Union Square Ventures.
He talks about the value of the network and how consumers want to create content on their own terms (think MySpace and YouTube) and want to be able to distribute that content on the edge. Content on the edge is not contained by a site/operator, like listings on a real estate site or editorials. It's the stuff that's widely and easily distributed by its creators. Enablers of the edge are the Edge Feeders who basically provide a platform for this content to be distributed.
The example he uses is Flickr. Flickr allows you to put all of your photos there and from there, you can post it to your blog, a family website, an Evite, et al. You get the point. It feeds all of your channels on the web. The value of this application is the ability to aggregate an enormous amount of edge content, organize it, and distribute it.
So what does this mean if you're not an Edge Feeder? I believe that site operators need to think hard about how to take advantage of facilitating the feeding of the edge. Giving control to the consumer is good and if you are in some way relying on user generated content, you will figure out a way to make it damn easy for users to feed their content into your site (i.e. click on a button and you have a direct feed from Flickr).
As evidenced by Flickr and Delicious, containing content creation is a thing of the past and feeding the edge is the future.
Fred's blog entry on Edge Feeders.
Sounds like a specific category of the animal food chain. I came across this concept through a blog entry written by Fred Wilson, a managing partner at Flatiron Partners and Union Square Ventures.
He talks about the value of the network and how consumers want to create content on their own terms (think MySpace and YouTube) and want to be able to distribute that content on the edge. Content on the edge is not contained by a site/operator, like listings on a real estate site or editorials. It's the stuff that's widely and easily distributed by its creators. Enablers of the edge are the Edge Feeders who basically provide a platform for this content to be distributed.
The example he uses is Flickr. Flickr allows you to put all of your photos there and from there, you can post it to your blog, a family website, an Evite, et al. You get the point. It feeds all of your channels on the web. The value of this application is the ability to aggregate an enormous amount of edge content, organize it, and distribute it.
So what does this mean if you're not an Edge Feeder? I believe that site operators need to think hard about how to take advantage of facilitating the feeding of the edge. Giving control to the consumer is good and if you are in some way relying on user generated content, you will figure out a way to make it damn easy for users to feed their content into your site (i.e. click on a button and you have a direct feed from Flickr).
As evidenced by Flickr and Delicious, containing content creation is a thing of the past and feeding the edge is the future.
Fred's blog entry on Edge Feeders.
Thursday, August 31, 2006
Podcasting & Apple
Can I tell you how much I like podcasting?!? Yes, I'm a bit late to the game but don't call me a luddite.
You see, I recently acquired a Nano from my mother-in-law (she won it in a raffle) and now finally understand why people are fanatical about Apple products. They're just so damn easy-to-use and not to mention beautifully designed. The last time I used an Apple product was back in my college days at Dartmouth where Apple had a deal with the college and all students used Macs. Once I graduated and entered the business world, however, there was no reason to go Mac.
So what about podcasting ...
Apple's collection of podcasts is very well-merchandised in their music store (by category and top lists) and most importantly, the quality of content is high. I love the fact that they have all types of NPR and NY Times podcasts. It's really opened up consumer access to very niche and specialized content. For example, I can subscribe to a podcast on Tai Chi or even learning Spanish.
Props to Steve Jobs and team for building beautiful hardware, easy-to-use software paired with content that is unique to my interests. While it's unclear that iTunes will own the podcasting space, it's clear they've done a wonderful job of integrating it into the core product.
You see, I recently acquired a Nano from my mother-in-law (she won it in a raffle) and now finally understand why people are fanatical about Apple products. They're just so damn easy-to-use and not to mention beautifully designed. The last time I used an Apple product was back in my college days at Dartmouth where Apple had a deal with the college and all students used Macs. Once I graduated and entered the business world, however, there was no reason to go Mac.
So what about podcasting ...
Apple's collection of podcasts is very well-merchandised in their music store (by category and top lists) and most importantly, the quality of content is high. I love the fact that they have all types of NPR and NY Times podcasts. It's really opened up consumer access to very niche and specialized content. For example, I can subscribe to a podcast on Tai Chi or even learning Spanish.
Props to Steve Jobs and team for building beautiful hardware, easy-to-use software paired with content that is unique to my interests. While it's unclear that iTunes will own the podcasting space, it's clear they've done a wonderful job of integrating it into the core product.
Monday, August 28, 2006
Ruby on Rails & Benefits to Web Innovation
Being on the business side of the Internet, I think it's important to stay on top of recent technology developments and what developers are using to build the latest and greatest web applications. I'm discovering that a fairly recent programming language called Ruby on Rails is catching on in the coding world.
It's important for a few reasons:
It's important for a few reasons:
- Shortens development cycles because it's a) easy to read, b) easy to write, and c) extremely iterative (immediate feedback)
- According to devs, the process of writing in Rails allows more expression and is generally more fun to code in
A few examples of sites built on Rails are:
The obvious benefit for us as consumers is the speed at which new web apps and services will be launched and tested ... exciting stuff.
Saturday, August 26, 2006
Support your "Local" Artist on Sellaband
A new site, called Sellaband, allows users to support their favorite musical artist (from all over the world) by buying monetary "parts"($10/part) and sharing in ad revenue from the music produced.
What an innovative way to allow new artists to showcase their talents, reach audiences all around the world, and develop a fan base that participates in the artists' success. It's going to be critical for the founders' to get the word out for this thing to scale. The artists need to get on board and the audiences will follow.
As for me, I found this Evanescence-like band from the Netherlands, whose lead singer has great vocals. Check them out on Sellaband: Nemesea.
See this TechCrunch article for other commentary: Sellaband.com.
What an innovative way to allow new artists to showcase their talents, reach audiences all around the world, and develop a fan base that participates in the artists' success. It's going to be critical for the founders' to get the word out for this thing to scale. The artists need to get on board and the audiences will follow.
As for me, I found this Evanescence-like band from the Netherlands, whose lead singer has great vocals. Check them out on Sellaband: Nemesea.
See this TechCrunch article for other commentary: Sellaband.com.
Monday, August 14, 2006
Long Tail Economics
Big in the press and among the businessrati these days (as in the last year). Just started reading The Long Tail by Chris Anderson and it's an interesting read so far.
The basic premise is that the aggregate sales of all the niche sales along the tail of the demand curve exceeds those in the head of the curve. And this goes against the traditional practice of focusing on the big hits in the head of the curve (i.e. movie blockbusters, billboard charts leaders).
This new model works particularly well for Internet based companies because the web has essentially created a costless distribution channel - making it very cheap to carry and sell all of the niche inventory. This long tail then becomes economically attractive.
Think Amazon, Real Networks' Rhaspody, Netflix. All those hard-to-find books, tracks, and videos.
Not totally revolutionary but nonetheless useful as one thinks about starting an Internet business and how you plan to serve your customer. Can you take advantage of these long tail economics in your business model?
Here's a link to the original Long Tail article from Wired magazine.
The basic premise is that the aggregate sales of all the niche sales along the tail of the demand curve exceeds those in the head of the curve. And this goes against the traditional practice of focusing on the big hits in the head of the curve (i.e. movie blockbusters, billboard charts leaders).
This new model works particularly well for Internet based companies because the web has essentially created a costless distribution channel - making it very cheap to carry and sell all of the niche inventory. This long tail then becomes economically attractive.
Think Amazon, Real Networks' Rhaspody, Netflix. All those hard-to-find books, tracks, and videos.
Not totally revolutionary but nonetheless useful as one thinks about starting an Internet business and how you plan to serve your customer. Can you take advantage of these long tail economics in your business model?
Here's a link to the original Long Tail article from Wired magazine.
Saturday, August 12, 2006
User Generated Content & Incentives
With my recent time off, I've had the time to think and write/blog which has been sort of a guilty pleasure since I'm not really being compensated for my "work" and it's not contributing to what I'd consider productive activities like mowing the lawn or paying my bills.
As such, I've begun to wonder how the recent explosion in user generated content (i.e. high flying startups like MySpace, Flickr, YouTube, Digg, Yelp) have given rise to real businesses. Real in the sense that that large corporations are willing to pay large dollars for it. But behind these businesses are the millions of folks pouring their sweat into creating this unique content.
So....
Will the consumer always be a free, willing, and abiding source of content?
Will there be a point in time when the collective force and motivation of individuals to contribute breaks down? When it becomes more difficult to scale ...
A likely response to this is for businesses to create a menu of incentives for individuals to 'play' on their network; this could be monetary (e.g. share in ad revenue) or intangible (e.g. favored/star status amongst users). So far, most of this has come in the form of self-aggrandizement but I suspect the monetary component is not too far off.
Something to think about as these businesses compete for a finite amount of resources, their "workers" time.
As such, I've begun to wonder how the recent explosion in user generated content (i.e. high flying startups like MySpace, Flickr, YouTube, Digg, Yelp) have given rise to real businesses. Real in the sense that that large corporations are willing to pay large dollars for it. But behind these businesses are the millions of folks pouring their sweat into creating this unique content.
So....
Will the consumer always be a free, willing, and abiding source of content?
Will there be a point in time when the collective force and motivation of individuals to contribute breaks down? When it becomes more difficult to scale ...
A likely response to this is for businesses to create a menu of incentives for individuals to 'play' on their network; this could be monetary (e.g. share in ad revenue) or intangible (e.g. favored/star status amongst users). So far, most of this has come in the form of self-aggrandizement but I suspect the monetary component is not too far off.
Something to think about as these businesses compete for a finite amount of resources, their "workers" time.
Monday, August 07, 2006
Zillow Thoughts, First of Many
A lot of my friends from around the U.S. have asked me what I think about Zillow.com. You've probably heard or read about them in the press. Zillow is the Seattle-based real estate start up that provides consumers with a free valuation on homes. The founders have managed to raise a significant amount of capital, $57 million, in 2 rounds which means there's an expectation that an exciting pipeline of new features and tools are on the horizon.
I personally like Zillow's site. It's got a fun, campy feel to it and the value proposition is pretty compelling. It's going to tell me the value of my home (or my neighbor's or my boss's or Bill Gates' home if you have his address). No strings attached.
I'd say that's a pretty big hook for the consumer. A few thoughts here...
The user/consumer needs to buy into this number. Do I believe it? Does the market believe it and use it? I.E. buyers, sellers, realtors. Zillow will need to fine tune and continue to invest in the Zestimate so that folks start to respect and treat it as a leading market indicator of value. Otherwise, the allure of the Zestimate could fade quickly and it becomes another hokey online tool.
Also for the ad business model to work, there's the issue of getting the consumer to stay on site. A one trick pony a business model don't make.
Right now, once I've looked up my target home, say my buddy Mark's in San Diego, I get my jollies sated and leave. I need something else compelling to click, read, etc.
While the company has done a great job of getting folks to the site (ave. 3-4 million unique visitors/month), what are they going to do to keep them there in the long run?
New content, services. Certainly. More recently, they've aded a financing tab and heat maps of cities around the U.S. to help with this.
I do wonder, though, about the ultimate opiate that will keep folks on-site .... listings?!?
You heard it here first. If Zillow were to somehow infiltrate the world of the Multiple Listing Service (MLS), I'd be first in line to put my meager savings down for a round three of financing.
I personally like Zillow's site. It's got a fun, campy feel to it and the value proposition is pretty compelling. It's going to tell me the value of my home (or my neighbor's or my boss's or Bill Gates' home if you have his address). No strings attached.
I'd say that's a pretty big hook for the consumer. A few thoughts here...
The user/consumer needs to buy into this number. Do I believe it? Does the market believe it and use it? I.E. buyers, sellers, realtors. Zillow will need to fine tune and continue to invest in the Zestimate so that folks start to respect and treat it as a leading market indicator of value. Otherwise, the allure of the Zestimate could fade quickly and it becomes another hokey online tool.
Also for the ad business model to work, there's the issue of getting the consumer to stay on site. A one trick pony a business model don't make.
Right now, once I've looked up my target home, say my buddy Mark's in San Diego, I get my jollies sated and leave. I need something else compelling to click, read, etc.
While the company has done a great job of getting folks to the site (ave. 3-4 million unique visitors/month), what are they going to do to keep them there in the long run?
New content, services. Certainly. More recently, they've aded a financing tab and heat maps of cities around the U.S. to help with this.
I do wonder, though, about the ultimate opiate that will keep folks on-site .... listings?!?
You heard it here first. If Zillow were to somehow infiltrate the world of the Multiple Listing Service (MLS), I'd be first in line to put my meager savings down for a round three of financing.
Saturday, August 05, 2006
Yelp's Secret Sauce and Local Advertising
I think the guys behind Yelp.com may onto something big. At a basic level, Yelp is a directory of reviews on local restaurants, shops, and other services. We've seen this before on Citysearch, Yahoo Local, and Judy's Book.
However, the difference here is that this site has a strong social networking thread that permeates the user experience. Think MySpace plus Judy's Book. I can create a profile (with pictures and other self-notables) to share my experiences, make my views known, and interact with other reviewers through comments and ratings. As a reviewer, I essentially become an authority/expert and I want to share this with other folks (leading to high value content). Morever, the UI does a good job of facilitating interactions between members. For example, my reviews can be rated as useful, funny, or cool AND users can even leave compliments, like "You're the best!" This keeps the member engaged and for some, they are delighted.
Here's the secret sauce: the output/content on local businesses is for the most part expressive, rich, personal, and valid. It's unique and real. You won't find this type of content on CitySearch or Yahoo Local. With this special content, you have the ability to garner a set of extremely engaged consumers .
Yelp now can sell these eyeballs to local advertisers (i.e. the local businesses the members are writing about). Local advertising has been the holy grail of online advertising but most companies have failed to gain any traction here. The Yelp model could prove to be an extremely effective channel to the small business owner.
In fact, Yelp HAS the goods (the detailed reviews) to pitch to the local dry cleaner or Thai restaurant. All they need now is to build a telesales force if they haven't already or partner with somebody who does.
Today, Yelp is sellling 1) enhanced listing information and 2) sponsored listings. Not surprising.
The key to scaling (getting more comprehensive and deeper) will be to continue to build a base of VERY influential and vocal reviewers in major cities across the U.S.
I will be watching closely to see what programs and incentives they use to grow this content.
I've recently jumped on the bandwagon myself. Check out my Yelp reviews HERE.
However, the difference here is that this site has a strong social networking thread that permeates the user experience. Think MySpace plus Judy's Book. I can create a profile (with pictures and other self-notables) to share my experiences, make my views known, and interact with other reviewers through comments and ratings. As a reviewer, I essentially become an authority/expert and I want to share this with other folks (leading to high value content). Morever, the UI does a good job of facilitating interactions between members. For example, my reviews can be rated as useful, funny, or cool AND users can even leave compliments, like "You're the best!" This keeps the member engaged and for some, they are delighted.
Here's the secret sauce: the output/content on local businesses is for the most part expressive, rich, personal, and valid. It's unique and real. You won't find this type of content on CitySearch or Yahoo Local. With this special content, you have the ability to garner a set of extremely engaged consumers .
Yelp now can sell these eyeballs to local advertisers (i.e. the local businesses the members are writing about). Local advertising has been the holy grail of online advertising but most companies have failed to gain any traction here. The Yelp model could prove to be an extremely effective channel to the small business owner.
In fact, Yelp HAS the goods (the detailed reviews) to pitch to the local dry cleaner or Thai restaurant. All they need now is to build a telesales force if they haven't already or partner with somebody who does.
Today, Yelp is sellling 1) enhanced listing information and 2) sponsored listings. Not surprising.
The key to scaling (getting more comprehensive and deeper) will be to continue to build a base of VERY influential and vocal reviewers in major cities across the U.S.
I will be watching closely to see what programs and incentives they use to grow this content.
I've recently jumped on the bandwagon myself. Check out my Yelp reviews HERE.
Wednesday, June 14, 2006
Mo' Money in Big Three?
A lot is happening in the consumer Internet space and we're fully aware of these major trends since we hear about them in the daily press. I'd like to call them the big three: social networking, blogging, and video. Sure, they've received a lot of buzz but has anybody in the space figured out how to work a revenue model into the equation?!?
I'm waiting for a YouTube, MySpace, or a Facebook to provide the GOODS on how monetizable their current user bases are. Yes, I understand that having a critical mass of users can support an advertising based model but can this be achieved in each case.
I have my doubts. A few things to throw out and test the waters. What is the likelihood of a wholesome P&G to advertise on the space of "Dark, Lolitish Vixen in Upper East Side" or how does YouTube overcome the ever rising hosting costs of all that video uploading? I would only imagine x% of pre roll or post roll ads (small %) are suitable/allowable. This is just a taste of the challenges facing monetization.
I'm confident that the media titans and their hired guns (bankers) are now closely considering the possibilities of leveraging said user bases and plotting an acquisition strategy. Lots of questions on what's strategic vs. financial, I'm sure.
I would hate to be the guy to put a value on an acquisition; yep, that's where the bankers get to earn their fees. ;)
I'm waiting for a YouTube, MySpace, or a Facebook to provide the GOODS on how monetizable their current user bases are. Yes, I understand that having a critical mass of users can support an advertising based model but can this be achieved in each case.
I have my doubts. A few things to throw out and test the waters. What is the likelihood of a wholesome P&G to advertise on the space of "Dark, Lolitish Vixen in Upper East Side" or how does YouTube overcome the ever rising hosting costs of all that video uploading? I would only imagine x% of pre roll or post roll ads (small %) are suitable/allowable. This is just a taste of the challenges facing monetization.
I'm confident that the media titans and their hired guns (bankers) are now closely considering the possibilities of leveraging said user bases and plotting an acquisition strategy. Lots of questions on what's strategic vs. financial, I'm sure.
I would hate to be the guy to put a value on an acquisition; yep, that's where the bankers get to earn their fees. ;)
Subscribe to:
Posts (Atom)