Amazon’s Challenges

The Economist writes:

Amazon’s challengers come from two directions. First, other online retailers are growing rapidly and appear in various forms. Many of the dotcoms are invading each others’ turf. From auctioning people’s old stuff, eBay now also hosts fixed-priced virtual shops offering new goods for sale. And Google is adding more shopping-type services, such as Froogle, a shopping-comparison service, and more recently its new Checkout payments system, which rivals eBay’s PayPal.

Second, traditional retailers are rapidly getting their online acts together. This pits Amazon against giant retailers with huge purchasing power, like America’s Wal-Mart and Britain’s Tesco. These multichannel retailers make a virtue of their ability to offer both bricks and clicks. Many provide online customers with the option of picking up goods from the shop down the road. This is proving popular with web buyers who want things immediately or are keen to avoid shipping costs and staying in to accept a delivery. Circuit City, a big American electricals chain, expects in-store pick-ups to account for more than half its online sales this year.


Bradley Horowitz writes: “The ability to seperate wheat from chaff, or more accurately personally interesting from collectively interesting, is subtle but huge. And it does so without the use of link flux (i.e. PageRank) but rather uses in system heuristics….Whats cool is that we can create a system that accommodates everything from the ridiculous to the sublime but knows the difference between the two! (Or perhaps more accurately is taught the difference by millions of users.) This is the power of interestingness!”

Metcalfe’s Law

IEEE Spectrum suggests that the Law may be wrong:

Of all the popular ideas of the Internet boom, one of the most dangerously influential was Metcalfe’s Law. Simply put, it says that the value of a communications network is proportional to the square of the number of its users.

The law is said to be true for any type of communications network, whether it involves telephones, computers, or users of the World Wide Web. While the notion of “value” is inevitably somewhat vague, the idea is that a network is more valuable the more people you can call or write to or the more Web pages you can link to.

Metcalfe’s Law attempts to quantify this increase in value. It is named for no less a luminary than Robert M. Metcalfe, the inventor of Ethernet. During the Internet boom, the law was an article of faith with entrepreneurs, venture capitalists, and engineers, because it seemed to offer a quantitative explanation for the boom’s various now-quaint mantras, like “network effects,” “first-mover advantage,” “Internet time,” and, most poignant of all, “build it and they will come.”

Prediction Markets

Business Week writes:

[Prediction Markets] are gaining wider acceptance. Markets are being used to let employees weigh in on a range of matters, from product launch dates to sales growth. Companies such as NewsFutures and Consensus Point even offer software and services to help companies set up their own prediction markets.

If it sounds like gambling, to some extent it is — except corporate prediction markets typically deal in play money. While some companies hand out cash prizes to winners, most give nonmonetary awards. The markets are helpful because they aggregate knowledge from a wide base of participants, and they can give CEOs a better handle on employee thinking. Still, getting busy workers to play along can be a struggle, and companies are divided on whether markets are reliable enough to justify the costs and the setup hassles.

TECH TALK: Mobile Internet: Publishing

Over the past few weeks, we have seen how the mobile Internet can be a very compelling opportunity in emerging markets like India. There are three challenges that need to be addressed: publishing, viewing and the business model. We will discuss each of them this week.

Publishing is important because there is a paucity of content that is mobile-friendly. Unless the creation of the content is addressed, it will be hard to get users. This is similar to the challenge faced on the Web in its early days. The use of HTML and proliferation of publishing tools created a cottage industry for content creation. Something similar needs to happen around the mobile.

Publishing for the mobile can be split into two making available static content (which doesn’t change often) and dynamic content (the incremental web, as we discussed last week). Static content will either need to be repurposed for the mobile if it already exists or it will need to be created. In the first case, the combination of creating a sitemap which is easily navigable on the mobile with links to the HTML pages transcoded for the mobile is the way to do. In the second case, publishing tools like a blogging platform, a wiki or an outliner can be used to create content for the mobile. In both cases, the publishing is likely to be done via a PC rather than a mobile.

The dynamic (or incremental) content can be published via a blogging tool. This creates RSS which users can subscribe to. The advantage of using a blogging platform for the incremental content is that it is makes publishing easy. There are other ways to publish SMS or multimedia from the phone itself can be thought of as the incremental content. In all cases, the use of a blogging platform as the backend can help in organising of the incremental content.

There will also be the need to take deep databases (eg. in finance, cricket, yellow pages) and make them available on the mobile in a manner that makes navigation easy. The good thing is that a lot of this content is already available for the PC-based Internet. Content owners should consider creating mobile versions of their sites. We have seen some newspapers and magazines create mobile sites a lot more needs to happen rapidly.

The next step will be to enable the creation of user-generated content, and foster communities. The MySpace of India will need to be built around the mobile rather than the PC. The time that the youth have with their mobiles is significantly greater than the time spent on a PC. Mobile communities will help accelerate the uptake of the mobile Internet.

Tomorrow: Viewing

Continue reading