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Mary Meeker’s View Of The World In 50 Slides
Every year at the Web 2.0 Summit, Morgan Stanley Internet analyst Mary Meeker gives her view of the world, the Web, and the technology industry by quickly going through about 50 slides that illustrate the major trends she is tracking. Last year, she zeroed in on the China Bubble. This year, she talks about the root causes of the current economic downturn, the outlook for Web businesses, and where she still sees major growth (mobile and emerging markets).
She singles out the mobile industry as the one where both the most opportunity will be found and disruption will occur over the next five years. Moreover, she suggests that the U.S. is poised to lead the transition in mobile to a Web-centric model. (I totally agree). Interestingly, she points to the introduction of the first Android phone by T-Mobile, not the launch of the iPhone, as the key inflection point for the coming era of the mobile web.
Meeker’s full presentation, which she gave yesterday, is in the video embedded above and her full slide deck is below (thank you, Henry Blodget, for uploading them). The slides are also available here.
A few slides in particular stuck out for me. First, the growth rates for both e-commerce sales and Internet advertising are normalizing much faster than anyone expected they would compared to offline growth rates for retail sales and advertising. No doubt, this steep slowdown in growth is being compounded by the overall economic situation. In the first slide below, the red line is U.S. retail sales growth and the yellow line is e-commerce sales growth. See where the yellow line is headed?
In the second slide, the top green line is Internet advertising growth. At least it is still above all the other kinds of advertising and not yet in negative territory, but the trend does not look good.
In fact, as ad budgets decline and Web pages keep growing, the bigger problem is that the supply of ad slots on the Web is becoming greater than the demand to fill them. The only way to fill those slots is to lower the price of each spot. As the slide below illustrates, ad impressions keep growing, but the cost per thousand (CPM) keeps dropping (on average, to about $1.50 for banner ads and to just above $20 for rich media ads):
On the bright side, compared to the overall spending on other forms of advertising such as TV, print, and direct mail, Internet advertising still has a lot of share to gain, and will likely continue to do so.
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News Sites Attract Record Audience on Election Night
On Election night everyone was glued to their screens. Not just their TV screens, but also their computer screens. Going to the major news sites, hitting refresh on the interactive electoral maps millions of times, and watching Obama and McCain give their final speeches of the campaign streamed live over the Web. According to Akamai, which is the content delivery network for most major news sites including CNN (which had a record day on its own), NBC, Reuters, and the BBC, global visitors to news sites peaked last night at 11 PM with 8,572,042 visitors per minute.
That is double the normal traffic level, and 18 percent above the previous peak of 7.3 million visitors per minute achieved during the World Cup back in June, 2006. (The third biggest peak to news sites was last March during the first day of the U.S. college basketball playoffs when it hit 7 million visitors per minute).
How long will this record last and what will be the next event to topple it?
(Hat tip to Beet.TV).
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Google’s Election-Day Victory: FCC Approves Unlicensed Use Of “White Spaces” Spectrum
Google and other tech companies won a big battle in Washington today. In an Election Day meeting, the FCC approved the unlicensed use of “white spaces” spectrum newly freed up as a result of TV broadcasters going from analog to digital broadcasts. Google has long been leading the lobbying effort to turn this spectrum into a sort of WiFi 2.0. Telecom companies and sports leagues opposed opening up the spectrum, claiming that it would interfere with wireless headsets and other devices that use nearby licensed airwaves.
Google argued that the interference argument was bunk, and the FCC agreed. Although the FCC is requiring more testing before “white spaces” devices will be approved.
This is a big win not just for Google, but for the entire tech industry. Just as WiFi changed the way we connect to the Internet in our homes and offices, the “white spaces” spectrum could be used for longer-range wireless broadband connections. The wireless carriers are right to feel threatened.
As far as Google is concerned, it wants as many wireless networks as possible to connect to the Internet. The “white spaces” is part of a bigger thrust. For instance, consider a recent Google patent to tie disparate wireless networks together through a marketplace that would let people switch networks on the fly as they moved around based on price and quality of coverage. As we noted in a post about that patent:
The patent is part of Google’s broader agenda to get as many people online as possible with as many devices as possible. Hence the gPhone, its pressure on the FCC, and Larry Page’s bristling in support of open white spaces. The opening of white spaces in particular could lead to more connection points for mobile devices, ones that form an attractive alternative to those provided by wireless carriers. And Android-powered phones could be among the first to take advantage of a flexible connections system.
The FCC just gave Google the go-ahead to start its end-run around the carriers. But it also just approved Verizon’s acquisition of AllTell, so it is spreading its love around.
Update: In a blog post today, Google co-founder Larry Page writes:
I’ve always thought that there are a lot of really incredible things that engineers and entrepreneurs can do with this spectrum. We will soon have “Wi-Fi on steroids,” since these spectrum signals have much longer range than today’s Wi-Fi technology and broadband access can be spread using fewer base stations resulting in better coverage at lower cost. And it is wonderful that the FCC has adopted the same successful unlicensed model used for Wi-Fi, which has resulted in a projected 1 billion Wi-Fi chips being produced this year. Now that the FCC has set the rules, I’m sure that we’ll see similar growth in products to take advantage of this spectrum.As an engineer, I was also really gratified to see that the FCC decided to put science over politics. For years the broadcasting lobby and others have tried to spread fear and confusion about this technology, rather than allow the FCC’s engineers to simply do their work.
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Android Code Is Finally Released Into The Open-Source Wild
When Google announced the Android operating system and established the Open Handset Alliance to support it, the plan was always to release the mobile operating system as open-source code. Today, on the eve of the first Android phone hitting the market, it finally did that. Developers can find the entire codebase for Android here. That includes the linux kernel, the application platform, the system library, graphics and speech-recognition libraries, a media codex, and applications such as the browser, dialer, and contacts manager. Google’s Rich Miner, who helps head up the Android team there, tells me:
This is probably the largest repository of open source code that has been released at any one time. We have worked on the things we thought were important. But there is still a lot of work to do in all aspects of the platform, from tying it into different carrier networks. multimedia, speech recognition, and the graphic subsystems.
Android is already an extremely powerful mobile operating system. Now that it is open-source, Google hopes to spark an entire movement around it. As exciting as all the apps and features of Android are already, we haven’t seen nothing yet.
Here’s a video explaining what is being made available that asks: What would you do with Android? Tell us in comments.
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Imeem For Android Takes The Jukebox In The Sky And Puts It In Your Pocket
What good is an endless jukebox in the sky if you can only listen to it while you are sitting in front of your computer? Imeem answers that with what is certainly the best Android app I’ve seen (or heard) so far. It’s called imeem Mobile, and it is the musically-oriented social network’s first foray into the mobile arena.
Caveat: I’ve had a review phone for about a week, and only now are a bunch of new apps flooding onto the Android market in anticipation of T-Mobile’s G1 going on sale on Wednesday. So this is an early favorite that could be eclipsed by better apps down the road. But, just to compare, MySpace is also launching a mobile app for Android tonight, and that doesn’t even include any streaming music.
Imeem is one of the few music Websites with streaming licenses from all four major music labels, plus most of the independents. (MySpace Music is another). Imeem offers its music streams for free, supported by advertising and affiliate fees from music downloads. With imeem Mobile, the most popular songs from its catalog are available for streaming on the Android phone. Says CEO Dalton Caldwell:
We look at what the most popular songs are across imeem, and in real time populate them to be available on mobile. The catalog is a literal representation of what the community finds most interesting at different times. So the songs available change daily as tastes change.
You can search for specific artists (I had no trouble finding songs from a wide spectrum of artists including David Bowie, the Beastie Boys, Vampire Weekend, and Serge Gainsbourg, for instance). Or you can just pick one artist and let imeem create a playlist of related songs that it streams radio-style.
Each song can be favorited, blocked, paused, or bought on Amazon’s MP3 store (which downloads the MP3 straight to the phone’s music library). You can also skip to the next song. The recommendation engine works without a hitch if you start out with the right artist. I’m listening to it right now, and it is just as good as Pandora, which is saying a lot. The streaming quality over Wifi sounds just as good as my iPod (the 3G in my apartment is more spotty).
The app creates a station around each of your favorite artists, keeps a history of recent artists you’ve listened to, and lets you create a station based on your favorites and related artists. It also offers a Top 100 station base don the most popular songs on imeem, a Spotlight station where imeem promotes new acts, and a Discover station based purely on imeem’s personalized recommendations.
Every song you listen to or add as a favorite on imeem Mobile is reflected in your media tracker on the Website proper, and vice versa. So as you listen to songs while at your desktop, every artist you mark as a favorite will be available to you when you walk out the door with your Android phone.
The most glaring omission from the mobile app is that you cannot access your playlists from the site. Caldwell tells me:
We didn’t get the feature that enables access to your playlists on the phone into the final shipping build for this launch, but it is obviously something the imeem mobile app should do.
It should also give you access to your friend’s playlists and the option of building stations around their favorites. And the search feature could be improved. All in good time. But imeem Mobile is a clear example of how software that taps into the vast resources of the Web (in this case, a virtually limitless music database and the smarts that come from watching social interactions on a grand scale) can turn an Android phone into a real game-changer. Instead of 10,000 songs in your pocket, now you can have one million.
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SearchMe Adds Music Search With Unlimited Streaming Via Imeem Widgets
Okay, this has to be the coolest hack of the week. Visual search engine SearchMe has just added a music search tab that brings back results with free, legal, unlimited full-song streams and cover art you can flip through. It’s CoverFlow on the Web. And it actually trumps the experience one Yahoo’s music search, which also offers free full streams through Rhapsody—but those are limited to 25 streams a month per searcher.
SearchMe instead is tapping into imeem’s vast catalog of fully licensed music. (Along with Rhapsody and MySpace Music, imeem is one of a handful of companies with comprehensive music streaming rights from all the major labels). [Correction] But SearchMe is not using imeem’s API, which originally was limited to apps on imeem itself, but has since been extended to other sites through a. Instead, it using the widget loophole in imeem’s licensing deal with the record labels. Imeem users can stream any song and create playlists on imeem itself or through imeem’s widgets which can be embedded elsewhere. (Other partners such as Apture and Slide also use imeem’s API to invoke imeem widgets).
SearchMe is essentially grabbing the imeem widget for each song search result. As with all imeem music widgets, there are buttons on the bottom that will let anyone buy the song from iTunes, Amazon, or eBay. SearchMe won’t see any of that affiliate revenue, but if music search gets more people to actually use SearchMe it will worthwhile. The search engine is still tiny, but is gaining some traction (see Google Web Trends chart below).
This is a great way to discover music. You could do the same searches on imeem itself, but SearchMe’s user interface is bigger and beefier. Search for a band like Vampire Weekend (and click on the “music” tab), and all the results play through one after another. You can also create and save your own playlists by creating search stacks. For instance, here is a stack of the Top 10 Billboard songs.
Last week, SearchMe cut 20 percent of its staff (11 people). This week, it is making strides once again to move forward.
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Prosper And Other P2P Lenders Get Squeezed By The Credit Crunch
Prosper and other peer-to-peer lenders like Zopa and Lending Club may turn out to be collateral damage from the credit crisis. Yesterday, Prosper suspended new lending in order to register with the S.E.C to create a secondary marketplace for the loans on its site. As recently as Monday, Prosper didn’t think it would have to register as a seller of securities. But the new climate of heightened regulatory oversight in light of the current financial meltdown has changed all of that.
Lending Club previously had to do the same thing and suspend new lending last April . (The S.E.C just gave it the green light to start lending again on Tuesday). Zopa shut down it’s P2P lending site in the U.S. last week.
Even before the increased regulatory scrutiny, P2P lending took a massive hit along with the rest of the financial industry. As Brad Stone points out in an excellent piece in the NYT:
Monthly loan volumes at the company have been declining since the credit crisis worsened this spring. Prosper, which is unprofitable after raising $40 million in venture capital, now faces the damaging possibility that lenders may take their money off the site instead of waiting for the S.E.C. to allow lending to resume. That could take several months.
You can see on Lending Stats that Prosper’’s membership growth and the number of active lenders and borrowers took a dive starting last April. And delinquencies for loans more than 18 months old are trending at higher than 30 percent. That is because a large portion of Prosper’s loans are in the sub-prime category. People who couldn’t borrow from a bank, borrowed from their neighbors on Prosper instead.
Now they are temporarily shut down.
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Real World Got You Down? IBM Invites You To A Virtual Forbidden City.
Can’t afford a ticket to China to go visit the Forbidden City? Well, now all you need is your computer. IBM, which is a big believer in virtual worlds, and China’s Palace Museum have created an exact replica of the 178-acre Forbidden City. After working meticulously for three years to recreate every building and thousands of major artifacts, the virtual Forbidden City is now available for download (for Windows, Mac, or Linux). It’s free, although, I warn you the Mac version, at least, is a massive 275MB file.
Once inside, you can choose an avatar, dress him or her up in Qing Dynasty-era robes, take virtual tours, play Go with computer-controlled characters, call up maps, explore buildings and objects that allow you to click for deeper information. The virtual world was built on a gaming platform from Garage Games called Torque. ( I guess OpenSim wasn’t good enough. No word on whether it will be interoperable with Second Life)
So if you are looking for somewhere to weather out the current financial storm, but don’t have any money to actually go anywhere, you can spend hours roaming IBM’s virtual Forbidden City.
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As the Markets Melt, Wikinvest Wire Launches To Offer Advice From Financial Blogs
The current market gyrations have investors running everywhere seeking advice. What better time to launch a newswire culled from the latest posts of financial bloggers? That’s the idea behind Wikinvest Wire, which has just been launched by the user-edited investment site Wikinvest. Except that it is not really a newswire in the traditional sense. It is more like a contextual recommendation system for the blogs invited to participate.
Wikinvest Wire is starting off with 100 financial blogs, including Confused Capitalist, Money Morning, College Analysts, The Mess That Greenspan Made, Financial Armageddon, and Old School Value. All told the blogs attract about one million unique visitors a month. Wikinvest is also in the process of syndicating the Wikinvest Wire to mainstream media sites, where links will appear on their stock pages. Wikinvest Wire is invite-only, but interested bloggers can apply.
The Wire will exist primarily on the participating blogs themselves, on Wikinvest topic pages, and on the yet-to-be-named media sites. For each of the 100 financial blogs, at the end of each post three links will appear to posts from other blogs in the network discussing the same stock or financial topic (such as “Google (GOOG),” “bailout,” or “credit default swaps”). The contextual links will also appear on relevant pages on Wikinvest and other stock and financial sites. (See screenshot). In this sense, it is similar to contextual recommendation systems like Sphere, OutBrain, or BlogRovr, which all append recommended links at the end of blog posts or news articles using a variety of methods.
Nevertheless, Wikinvest co-founder Parker Conrad positions Wikinvest Wire as really taking on SeekingAlpha, an investing news site that republishes posts from select blogs and media outlets (including TechCrunch). Conrad argues:
This launch puts us directly in competition with a larger site—SeekingAlpha.com—in that both SeekingAlpha and the Wire are syndication platforms for investing bloggers. However, there are some important distinctions:
SeekingAlpha requires a blogger to give up their content to SeekingAlpha. The bloggers’ articles are published on SeekingAlpha, and SeekingAlpha distributes links to content on their site to their partners, such as Yahoo Finance. Investing bloggers use SeekingAlpha, grudgingly, because it increases their traffic marginally. But they also hate SeekingAlpha—because 99% of the traffic to their posts actually goes to SeekingAlpha. Selling ads against the bloggers’ content is, after all, SeekingAlpha’s business model. But you can see why that might chafe . . .
Wikinvest, however, does not require bloggers to host their content on our site—and all links, from media partners, wikinvest.com, and other bloggers, go directly to the blogger’s own site. What we get out of it are links back to Wikinvest which are included in the Wire.
There’s also another big difference Conrad forgot to mention. SeekingAlpha is an actual site where readers can go and see all of the posts it hand-picks in one place. There is no one place you can go to see all the posts included in the Wikinvest Wire. The links are generated algorithmically and distributed piecemeal all over the Web. There is not even an RSS feed that pulls all the 100 financial blogs that make up the Wikinvest Wire together. (Although, you can get an RSS feed for any Wikinvest topic page, which will include Wikinvest Wire posts for that topic).
All of this is by design, as Conrad explains above, to generate more traffic for the participating blogs. But it’s not really a wire unless there is one place you can go to see all the posts popping up as they go live. So I’m not sure SeekingAlpha has too much to worry about.
Nevertheless, the addition of relevant financial blog posts to each page on Wikinvest should help to make it an even more useful site than it is today. If you are trying to figure out what to do with your stock portfolio, it is worth checking out for the comprehensiveness of the data and collection of arguments from both bulls and bears on each stock. They also have great charts that anyone can annotate (I’ve embedded one below).
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Another Way To Follow The Campaign: Dipity’s Election Center Timelines
Want to follow every Tweet, blog post, YouTube video and Flickr photo put out by the Obama or McCain camps? Now you can follow the campaigns in a handy Dipity Election Center timeline. Using its latest Dipity 2.0 timeline mashup, the Election Center places each entry on a timeline that you can scroll through. Click on an entry, and a box opens to show you more detailed information. You can also leave a comment.
Each timeline can be embedded as a widget anywhere on the Web. And you can see everyone’s comments from any widget. The idea is that Obama supporters will put the Obama widget on their MySpace page or blog and that McCain supporters will do the same on theirs. I’ve embedded both widgets below. You can see by the larger number of entries for the Obama campaign that it is making better use of social media to get its message out. (At least that was the case when I looked at the timelines—see screenshot).
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Forget The Blackberry “Application Center.” The BerryStore Will Have Better Apps.
As Research in Motion prepares to open its Blackberry Application Center to answer the iPhone’s App Store, an unaffiliated startup called the BerryStore has already launched a competing app store for Blackberry Apps. What makes it better than the official BlackBerry App Center (besides the name), is that apps in the BerryStore work across both old and new BlackBerries alike (not just the upcoming BlackBerry Storm), and across carriers. The BlackBerry App center, in contrast, is designed to be a carrier-specific store, with different apps for different carriers.
AYou can download the BerryStore as an app itself by visiting www.berrystore.com on your BlackBerry. (The App Center will require users to download apps through their Blackberry browsers, which is not the best experience). Already there are about 40 apps in the store, ranging from Loopt, 3Jam, and TwitterBerry to Obopay, Citysense, and Google Mobile. All of them are currently free, although the company plans on offering paid apps in the future. Developers can get more details about how to submit apps or the BerryStore here.
Below is a list of each app currently in the BerryStore with a short description:
Books & Reference
NeoReader: Turns your Blackberry into a barcode scanner.
Blackberry Wiki: Wikipedia reader.
Beyond411: Yellow pages, maps, and directions.
MobipocketReader: Mobile e-reader.
Business & Finance
Obopay: P2P payments.
Bank of America: Manage your dwindling bank account.
NyTimes DealBook: A bookmark icon to the popular blog.
E-Trade Mobile Pro: Manage your dwindling stock portfolio.
Lifestyle
Google Mobile: Search, Maps, Gmail.
Opera: Opera Mini Web browser.
Zumobi:Mobile widgets.
Google Mail: As in Gmail.
Poynt: Local search.
Maufait InstaFind: Al-in-one 411, flight tracker, movie showtimes, stock quotes, weather, news.
Puretracks:Mobile music store.
Tellme: Voice-enabled GPS info.
reQall: Voice-to-text recorder, to-do list, and idea manager.
Nobex Radio Companion: Shows you the name of the songs playing on the radio.
News & Weather
Viigo: News, sports, entertainment, weather, stock and traffic alerts.
New York Times: Bookmark icon.
ABC News: Bookmark icon.
The Washington Post: Bookmark icon.
CNBC Mobile: Bookmark icon.
USA Today: Bookmark icon.
Slate: Bookmark icon.
PinStack.com: Forums
Social Networking
TwitterBerry: Mobile Twitter client that avoids SMS charges.
3jam: Group text messages.
eBuddy: Instant messaging app
Dexrex: Archives your text messages.
Pinger: Voice IM.
Sports
Sports Illustrated: Bookmark icon.
ESPN Mobile: Bookmark icon.
Travel & Navigation
Google Maps: What it sounds like.
GPSed: Map your GPS tracks, save them, and share them. Also geotags your photos.
Citysense: Live hotspot tracking.
WorldMate Live: A personal digital assistant for travelers
Utilities
Box.net: Access and share files on your BB.
AutoLock: Locks the keyboard.
MidpSSH: Connect to remote servers.
MiniMoni: Monitor IP traffic.
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What’s Your Tweet Worth? Um, . . . Nothing.
A month ago, I wrote about a company called TwittAd that lets you auction off ads on your Twitter page. Now, the company is sponsoring WhatsYourTweetWorth?, a vanity site where you enter your Twitter name, and it tells you how much your Tweets are worth based on how many followers you have. (Try it later, the site is down—probably being overwhelmed by people who are already Twittering about it). Before it went down, it said that TechCrunch, which has 26,361 followers, is worth $503 per month. Except that, it isn’t.
As I noted in my post on TwittAd:
The problem with placing ads on your Twitter page, though, is that ultimately you may just be advertising to yourself. I rarely go to the Twitter pages of people I follow. Their Tweets appear on my Twitter page (and my FriendFeed page, and my Thwirl client, and my Twinkle app on my iPhone). That’s why I follow people, so I can get their Tweets pushed to me. The only way ads are going to work on Twitter is if they are blended into the message stream and sent out as Tweets. But that would be annoying.
I’m sure that’s not going to stop everyone from a Twitter account checking ou thow much they are worth. Here’s a money-making idea TwittAd: Forget about trying to sell ads on Twitter pages, and put ads on WhatsYourTweetWorth instead. (Assuming they can get it to work again).
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Why The Online Music Industry Should Move To a Rev-Share Model
Memo to the Copyright Royalty Board: a bigger pie fills more bellies. Tomorrow, the three-judge panel that sets rates on music copyright fees is scheduled to announce new rates on digital music downloads for the next five years. The fees, which go to music publishers (the actual owners of the copyright to each song), are currently set at 9 cents per track. Music publishers want to raise that to 15 cents per track. Apple has vaguely threatened that it might have to shut down iTunes if the new rates go into effect (yeah, right).
Apple still controls about 85 percent of the digital download market, but these fees are also being paid by Amazon, Rhapsody, MySpace Music and others. The music publishers (who are often the artists themselves) want to future-proof their cut of the action and thus want to lock in as high a rate as possible. Apple and the record labels are arguing that the rates should be changed from a flat fee per song to a percentage of revenues. Apple wants to pay 6 percent of revenues, while the labels are suggesting 8 percent. Since, in the case of iTunes, this percentage would come out of the current 99 cents charged for each track, it actually amounts to a reduction in per track fees (6 cents and 8 cents respectively).
On its face, it looks like Apple and the record companies are once again trying to stick it to the little guy (artists, song writers, and other music publishers). But in this case, Apple and the recording industry are actually right. Music on the Web is currently crippled by the fees set by the Copyright Royalty Board (not just for downloads, but for streaming Internet radio as well). As it is, Apple pays 70 cents from each track sold to the record companies (which then pay the music publishers their cut). There is not much margin left out of which to take that extra 6 cents, and charging $1.05 per track will have an impact on sales.
Moving to a revenue-sharing model makes a lot more economic sense. That way digital music sales has more breathing room to establish itself, and the artists will be able to grow with the industry. Eight percent of a bigger pie is better than nine percent of a smaller one. Rather than focus on how much each publisher gets per track, the Copyright Royalty Board should try to maximize the total amount of fees that publishers will get. A rev-share model is the way to go.
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Trion Closes A Whopping $70 Million In Series C Funding
Trion World Network, an online games developer, announced today that it raised $70 million in Series C funding. Peacock Equity, the joint venture between GE Commercial Finance’s Media, Communications & Entertainment business and NBC Universal, which was a B-round investor, was one of the investors in the company’s C round, but it was led by “a large global financial institution” and Act II Capital.
The fact that Trion was able to raise $70 million speaks to the popularity of gaming, which is quickly becoming a real competitor to Hollywood. But what sets Trion apart is that all its games are server-based. In other words, all the gameplay, characters, and interactions between players are kept on Trion’s servers, which allows the company to remodel less-played portions of the game or add more content on-the-fly. Consumers who want to play the company’s games need a few simple downloads to get the company’s games running on their computers.
Speaking of games, Trion is currently working on its first MMORPG with NBC Universal’s Sci-Fi channel. It’s also developing a fantasy MMORPG with well-known game designer, Jon Van Caneghem. The company didn’t offer any more details about storyline or availability, but if investors are willing to spend $70 million on the hopeful success of two games, they obviously think Trion is on to something with the titles.
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Jay Adelson Hints That Facebook Connect Is the Future of Digg
A few select partner sites are beginning to roll out their integration with Facebook’s ID system through Facebook Connect. Last week, a CBS site was the first one to do so, and more are expected to go live soon. Digg will be one of them. (Other announced partners include Six Apart, ABC, CBS, Hulu, Kongregate, Loopt, Plaxo, Seesmic, StumbleUpon, Twitter, Vimeo, and Xobni). During a speech at the Web 2.0 Expo last week (video embedded below), Digg CEO Jay Adelson hinted at how Facebook Connect could help the social news site take “the next step of collaborative filtering” and how it is tied to the “future of Digg.”
At the most basic level, Facebook Connect will let you sign into Digg and all of these other partner Websites with nothing more than your Facebook username and password. Facebook wants to become the universal ID on the Web, and any progress it makes on that front would be a big deal in its own right. But Facebook Connect goes well beyond an ID management system. Partners can tap into all sorts of social data people put into their Facebook profiles, and actions on partner sites can be reflected back on your Facebook News Feed in a Beacon-like manner.
For Digg, Facebook Connect will help it personalize the headlines it shows to each member. During his presentation at Web 2.0 Expo, Adelson said:
We are about to add like 90 million registered Facebook users to Digg. How can I take that so your Frontpage experience is particular to you?
Adelson’s speech was about collaborative filtering and how the general, zeitgeist-type of collaborative filtering that Digg does already is merging with the more personal filtering that occurs on your activity stream in Facebook and elsewhere. He believes that the combination of the two will be particularly powerful:
It is the next step of collaborative filtering. It is the idea that instead of looking at a social network that you’ve created yourself, that you’ve entered in the names, I am going to look at all of you, everyone, and I’m going to compare you all together. I am going to find people like you and I am going to use that collective wisdom to find things that are more specifically interesting to you.
. . . When I think about the future of Digg. We have 16,000 submissions a day to the Digg platform. How are we going to take all of that data and make it interesting and relevant without this idea of the collaborative filter? Initially all we had was Diggs and buries. But I have a lot more data about how you use the data, where you come in from, and what your interests are.
Digg is already moving in this direction with its new recommendation system, which has resulted in a 40 percent increase in Diggs. But Facebook has a much richer set of data about your personal likes, dislikes, and recent activity across a broad spectrum of interests.
What Adelson is suggesting is that it is not enough to know what your group of self-selected friends and followers are buzzing about. What you really want to know is what are like-minded people buzzing about whether you know them or not. This is not a particularly new idea. (Last.fm, for instance, has been using this approach and the concept of musical “neighbors” to create personalized music recommendations for years). But what is new is the fact that a site like Digg will be able to improve its own core service by tapping into someone else’s repository of social data. And arguably, Facebook has a bigger and better repository of such data than nearly anyone else.
(Hat tip to Paul Sanchez for spotting the video).
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Is MySpace Music An Antitrust Lawsuit Waiting To Happen?
The billboards are up, the CEO search continues, and MySpace Music is set to launch sometime next week. It would have launched last week, but protracted negotiations with EMI to bring it aboard along with the other three music labels is believed to be the cause of the delay. If MySpace Music can launch with EMI it will overnight become a major new force for music distribution on the Web. That is because it will offer free streams of full-length tracks from all the major labels, legitimizing the advertising-supported model that is beginning to challenge iTunes’ pay-per-download approach. It will be more akin to a subscription model like Rhapsody’s, but without the subscription.
MySpace won’t be the first service to offer free ad-supported streams from all the major labels (imeem already does so, and even Rhapsody itself is moving towards a hybrid model that combines free-streaming, an MP3 store, and subscriptions). But it could be the first to run into serious antitrust issues.
Independent labels are already crying foul for being “blocked” from the service. The indies will likely be added over time. The bigger antitrust issue comes down to the pricing relationship between MySpace and the music labels. MySpace will have to be extra careful about how it structures its relationship with the music labels. MySpace Music is a joint venture between three of the four major music labels and is currently raising more capital at a $2 billion valuation. If EMI joins, it will probably want an equity stake as well.
It is not clear how MySpace Music will be paying the labels. But by giving them a financial stake in the business, MySpace Music has a chance of throwing out the current, problematic digital music business model. The problem with advertising-supported streams is that every music service on the Internet has to pay the labels about a penny per streamed song, which is the equivalent of a $10 CPM and is uneconomical.
The big unanswered question is whether MySpace Music will play by these same broken rules or whether it has convinced the labels to lower their prices (or simply accept a share of MySpace Music’s revenues). The music industry desperately needs a new digital business model. There is no question about that. But if the labels are going to allow MySpace Music to pay less per stream or not at all, and they themselves are joint venture partners in MySpace Music, that will open them up to charges of preferential pricing, collusion, and price discrimination. (The music industry’s own hush-hush TotalMusic project could run into the same issues).
So MySpace Music and the music labels might find themselves in a pickle. However, there is a solution that will help not only MySpace Music sidestep the antitrust pitfalls, but could also spark a whole new wave of growth in the entire digital music industry.
It’s simple really. The music labels should reset the rules by repricing the cost per song they charge to every music site on the Web. Whatever price MySpace Music is paying should be the price for all players. (A $1 effective CPM would make more sense). That might weaken MySpace Music’s competitive advantage, but getting clobbered by an antitrust lawsuit would be worse. And you know what they say about bigger pies.
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Facebook Connect Spotted In The Wild. Will Beacon Finally Die?
Your Facebook ID is about to be accepted at a whole lot more sites than just Facebook. Developers have been hacking away with Facebook Connect since last May, and now partner sites are getting ready to launch. CBS’s celebrity gossip site TheInsider is the first to do so. Anyone can log in using their Facebook ID, and then can choose to have any comments, article votes, or poll responses show up in their Facebook feed.
CBS is testing Facebook Connect on TheInsider, and if the response is favorable plans on rolling it out across other CBS.com and Cnet properties. Expect more sites not owned by CBS to launch next week.
More importantly, Facebook Connect could end up replacing Facebook’s Beacon service on CBS and elsewhere. Beacon, to remind everyone, is the advertising-driven platform that was riddled with privacy problems and caused some partners to wish they had never signed up (but never really went away). Beacon identifies whenever a Facebook member visits a partner site and allow certain actions such as adding a rating or review, or saving a recipe, to appear in that member’s feed on Facebook.
Despite patching up some Beacon’s privacy holes, it never really took off. Facebook Connect offers a much better privacy model. It is very clear that you are signing up for it, and there is the convenience factor of being able to use your existing Facebook username and password. And whatever your privacy settings are on Facebook get automatically transferred to every Facebook Connect site where you are also logged in. And for developers, there are just a lot more things they can do with Facebook Connect than make actions appear in members’ feeds. Groups, events, photos, and user status messages can all be grabbed from Facebook and used as features on other sites. As Facebook users make changes on Facebook (or on the partner sites), the changes are updated everywhere.
And Beacon? According to a Facebook spokesperson:
We are not accepting any new developers into the Facebook Beacon program, though the approximately 30 existing sites may continue to use the feature as it suits them best.
Beacon may not be dead quite yet. But it will be soon.
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Yahoo Launches Social Network — In India
Yahoo India announced that it has launched yet another social network for the 16-24 age bracket in an attempt to capture the growing market in India. And although scant details are available, it sounds interesting.
Dubbed SpotM, the new social network will bring college-aged and those close to going to college together in one space. There’s no word on how Yahoo will be able to ensure everyone using the service is really as old as they claim, but Yahoo believes it can manage that problem.
SpotM attempts to differentiate itself by offering two features: the idea of a secret friend and SMS integration with anonymous chat. According to Yahoo, SpotM will allow users to make friends with other users and if they choose, make those friends private so other users don’t know about the relationship. SMS integration with anonymous chat will let users correspond via SMS without revealing their phone number.
It’s nice to see Yahoo try something new, but whether or not its privacy initiatives will really work in its favor remains in doubt. As social networks become more popular, it’s transparency that parenting groups are looking for, not privacy. And once those issues arise, every social network buckles under the pressure. Will Yahoo be any different?
SpotM is currently in private beta.
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TechCrunch50 Session 1: Youth and Culture
Jason Calacanis and Michael Arrington opened TechCrunch50 today saying they wanted to create the “Sundance Film Festival” for the internet industry where companies are judged on merit. Here are our notes on the companies who presented in the first session of the conference, which showcased four startups that pertain to Youth and Culture. Highlights from the expert panel (Chad Hurley, co-founder of YouTube; Marrissa Mayer, VP product and search; Google; Ron Conway, prolific Angel investor; Dan Farber, Cnet, Editor in chief) also follow.
Shryk
Shryk (CB) — Web-based financial software called iThryv for children aimed at promoting financial literacy and good saving habits.
Co-founder Shane Kimpton presented how a mythical 8 year old girl “Lacy: would log into iThryv. Lacy has a savings account, 28 bucks in savings and a checking account. The savings are from her parents, desposited to teach her about credit and savings. She “wants” a Barbie Corvette toy and it lists it on her wish list along side her actual spending on recent purchases like toys. She works out she spent 50% on “wants” and 25% on “needs” which turns out not to be a good ratio for good money management. So on the manage money section she works out how to spend her money better.
Another example, “Jay” is 17 and he has a job and a girlfriend. The look of his account is more aimed at his age-group. Research says 25% of 18 to 24 year olds go bankrupt - so this is a way of keeping better tracking on incomes and outgoings. He starts to understand the way he manages his money is ranked against the way other users on the system of a similar age. He gets a score based on this. His score goes up the more he saves.
The founders emphasised that iThryv is not a bank. It’s a platform that sits on top of a banking system which allows banks to build a “customer for life” through the tools offered. They researched with banks and parents and built the site on this feedback. The site can also give suggestions about how to become entrepreneurs.
BlahGirls
Blah Girls — Backed by Ashton Kutcher, Blah Girls is a gossip site that features a group of animated teenage girls who provide opinions on what’s going on in the world of entertainment.
Presented by move actor Ashton Kutcher, a cartoon video preceded the presentation with some in-jokes about “silicone valley”, Jason Calacanis and Mike Arrington (”He looks like Peter Griffith”).
essentially speaking this is a video animation but scripted to report news and gossip from three “interactive celebrity-culture obsessed cartoon girls. They bring up to date celeb trends and news. The core function is a video player updated regularly. The animated characters are clearly scripted and written to give some witty news about celeb culture. Blah Girls is clearly not aimed at kids. The characters smoke Pot and make jokes about hanging out with celebs.
Kutcher said there is more to it than just video. You log in as a user and say “that video sucks”, for instance. You then get an email back with a URL which sends you to a comment response page. Tiffany - a blah girl - has a response which is unique to the user. So the girls in the show are talking to the user. You can ask the Blah girls for gossip advice, e.g is Google taking over the world? And they will reply “e.g. relationships are like skinny jeans, sometimes you have to starve yourself to have a chance.” The comments get updated weekly (seems a bit slow?).
The pitch:
1. The core, is creating high quality content
2. Interactivity and social engagement for retention - advertising model.
3. Seamless integrated branded content. Vitamin Water is the first partner and they have been built into the shows seamlessly.
The future is domestic and international, TV, Web and games and collaborations with media partners.
Tweegee
Tweegee (CB) — A hub for tweens, Tweegee offers the youth market a suite of online tools for social interaction and organization
Tweegee is “the future of social activities for kids aged 8-14″. There not enough stuff for this age group online, says the founders. This is a destination site with content, gaming and social networking. Two kids came up. “I got to make my Tweegee look like me with my hair sticking up” said a young boy, who presented on stage, so the kids can customise their avatar. It also has email, can change the colour of the background and make the text sparkly - appeals to kids. It’s a full email programme but with a very child-friendly interface. There is also some safe pre-written text designed to keep kids safe in their emails to each other. Kids invite other to meet their “buddy machine”. Buddy Meter works out your best friends on the system. The calendar option has birthdays and pitctures.
Avatars can be presented in front of Hockey sets etc. Daily Ratings, megazone. is a place to build you own site - like a sorts portal with live news. A folder allows user to put their stuff inside like songs, movies sand pictures on the PC which can be uploaded and sent to friends. 1GB of space. Safety is a top priority. A full safety features, “patent pending” tools. Gaming: Also features casual games for kids.
Hangout Industries
Hangout Industries (CB) — Blends social networking with virtual worlds by creating a 3D, online environment where 16-24 year olds can chat and share media.
Built in 6 months, this site is a Web-based virtual world aimed at kids and young adults and allows them to highly customise their virtual space. It combines the virtual nature of The Sims, with the privacy of Facebook, and Myspace’s customisation features. Works on low end PCs/Macs and all browsers. It’s highly immersive, but pulls in real-world goods so the T-shirts are real from Threadless. An Allposters.com deal streams posters direct into the rooms and you can buy them. It bridges offline and online, allowing real products to be bought for you and your avatar. Can customize objects like tables and chairs.
Gravity works on objects. You can also play drums / musical instruments along with a background soundtrack. Can pull in existing social graphs so that you friends can set up a room. You can see the videos your friends have been watching, and see streaming shows into the room. The avatar can be customised with 30 brands and 30 tastemakers, all signed up clients so far.
Expert Panel
Panel discussion with judges:
Chad Hurley, co-founder of YouTube
Marrissa Mayer, VP product and search, Google
Ron Conway, prolific Angel investor - 500 investments in last 20 years.
Dan Farber, Cnet, Editor in chief
Questions:
Chad: I’m most familiar with Blah girls - I think video will be big (he jokes). But seriously this has a great opportunity for advertising.
The others are good, but content and scalability may have distribution.
Marissa:
Hangout I like but - what’s going to cost people get them to engage with it?
Answer: It’s an iframe inside existing social networks.
Marrisa: Biz model?
Answer: Users want cool products, and are willing to pay for it on virtual currency.
Marissa:
iThryv - a concern I have is a lot of the advertising are credit cards and loans which may be problematic?
Answer: Banks and partners would offer their services. It’s about customer for life for the bank, and the bank pays for this service.
Ron:
I would invest in iThryv but not until you have investors or backers like banks. For the other companies there is a dilemma - for your users you have to get their allocated time for them to move from existing social networks and they will have to reduce their time on others. Tweens are a pretty saturated market so new entrants would have to grab mind-share. With hangout and blah girls: Both are compelling and you have unique intellectual property.
Hangout’s reply: A user would never leave their MySpace page etc. as the site runs as an iframe and or Facebook application.
Ashton/BlahGirls: Our products can also move - we want to partner with YoUtube, and will be launching the first episode of today with them. We can travel anywhere on the web. It’s a video, so it can run anywhere you can host video.
Tweegee: This offers the ability for people to spend time inside.
Ron: You can’t leverage Club Penguin or replace it. It’s one activity the kids might choose among others. Kids this age have the most time on the web to spend so getting their attention shouldn’t be a problem,
Dan Farber:
All the startups were interesting. Blah Girls has a unique advantage in that it is original content and could become cultish. But the once a week video seems slow and its not that interactive yet. iThryv looks good. Hangout creates a new kind of experience within these existing context. Product placement done well can create a business. Tweegee - I had hard time understanding the business and how it fits against kids’ attention with things like ClubPenguin.
Marrissa: Hard to see the safety aspect with Tweegee….
Tweegee Answer: Kids want to communicate with friends but most sites kids need to choose a pre-written sentence. We give them a bit of free text from a white-list vocabulary, like T9 on a cell phone. You can’t write number to reveal phone numbers etc. This is integrated in all aspects of the site.
Chad: iThryv - why did you create it?
Answer: A motivation was we saw a market for kids understanding financial literacy. The housing crisis shows people are bad at finance. Also, banks have a hard time creating a customer for life. People are now moving away from traditional banks. We did research with kids and parents to see how they use money.
Chad: You’re going to have to simplify the site further for that audience.
Marrissa: I don’t see the value. What bothered me was that it didn’t seem realistic. Kids don’t construct strategy and business plans in the way presented.
iThryv responded; We have more that we could show that could address this.
Ron: Banks and credit card companies would probably have to be the actual investors, rather than VC/Angel.
Ron: With Hangout and Blah Girls: We all know that search and display advertising are big opportunities. It’s obvious there is a new market surfacing called product placement. In Blah Girls you already have the have Vitamin Water company as a client. Assuming the content is high quality, they can drive up the prices. This is a multibillion dollar market on the web being created right now.