The Economist writes in a survey:
Because of the convergence on IP networks, companies that used to be in separate industriestelephone operators, internet-service providers and cable-TV firmssuddenly find themselves in the same business. Cable companies now offer broadband internet and voice services over networks that used to carry just television, and telecoms firms have upgraded their networks to carry television signals. In the new converged world any firm that can deliver an IP stream to customers over its network can offer any or all of these services. And offering several of them together, many operators believe, is a winning strategy.
Whether or not convergence turns out to merit the hype, the industry has convinced itself that it is worth pursuing, and anyone who disagrees risks being left behind. As soon as one operator adopts convergence, all the others have to follow, says Mr Lombard. Quite how far and how fast the process will go remains to be seen. But like it or not, convergence is coming.
Silicon Valley Watcher writes about Smalltown and GrayBoxx:
Local search and local online commerce are the next battlegrounds for the giants such as Google and Yahoo, but also for many startup companies. The lure is the billions of dollars spent on Yellow Pages advertising by local businesses.
We have Yahoo Local and Google Local, plus Max Levchin’s Yelp, CitySearch, Ingenio, plus local newspapers and other companies–all trying to grab a piece of the local search and local commerce ad spend.
But tapping into the local businesses market through online services is hard. The same factors that make scaling a global online service easy on the Internet become reversed when applied to local businesses.
The New York Times writes:
The problems at Yahoo go beyond advertising. From video programming to social networking — areas of interest to users and advertisers alike — the company is losing its initiative. And each time a product fails in the market or is late, Yahoo loses some ability to do more deals and hire more talented employees.
Google, in the meantime, is taking advantage of Yahoos problems to cement crucial deals that could make its rivals recovery even more difficult. Before Google agreed to buy YouTube for $1.65 billion in stock, it paid $1 billion for 5 percent of AOL, locking in the right to sell text ads that appear next to its search results. And it agreed to pay $900 million over three and a half years to sell ads on MySpace.com, giving it a huge number of pages where it can place banner ads.
With these and other deals, Google has neutralized Yahoos big competitive advantage on Madison Avenue: its ability to sell the full range of advertising, from splashy video campaigns to text ads on search results.
[via Anish] Silicon.com writes:
According to HP, the future of cell phones won’t be cellular.
The devices will do without 3G, 2G – any other kind of G, in fact – and they won’t be packing WiMax or wi-fi either.
Instead, HP predicts, the mobile will become just one of a number of gadgets in your personal area network that will get its connectivity via your watch, or a magic box in your pocket, probably using Ultrawideband (UWB) wireless technology.
HP’s idea is to take the radios that would have previously sat inside each device and house them instead in a ‘personal hub’, which the users will carry with them every day.
Of late, YouTube has been trying to avoid the fate of Napster and negotiate deals with the big media players and in the process figure out a business model for itself. Knowledge@Wharton wrote recently about YouTube’s planned business model:
On Sept. 18, 2006, YouTube, the largest video sharing site on the web, and Warner Music Group announced a deal to distribute WMG’s music video catalog on YouTube. The catalog includes music videos, behind-the-scenes footage, artist interviews and other special content. In addition, YouTube’s bevy of amateur video producers can use WMG’s music library as soundtracks for the content they upload. As for copyright management, YouTube plans to build a content identification and royalty reporting system to identify video content — such as the most recent Madonna video — and divvy out payments to artists. The system, to be launched by the end of the year, will allow WMG to authorize rights to YouTube users. Advertising revenue will be shared between WMG and YouTube.
Wharton marketing professor Peter Fader says YouTube’s latest partnership (it also has a promotional deal with NBC) is “the single biggest business development deal in the history of digital media. This changes everything, and people will look back at it as a turning point.” Wharton public policy professor Joel Waldfogel acknowledges that YouTube is “becoming more attractive to media partners as more people use it,” but cautions that the WMG deal is just a first step to discovering a business model.
The Economist wrote recently about YouTubes monetisation efforts:
Aware that inserting advertisements at the beginning of video clips, as some sites do, is annoying and risks driving away YouTube’s users, Mr Hurley and Mr Chen have announced two experiments with advertising, with the promise of more to come. One idea is for brand channels in which corporate customers create pages for their own promotional clips. Warner Brothers Records, a music label, led the way, setting up a page to promote a new album by Paris Hilton. The second experiment is participatory video ads, whereby advertisements can be uploaded and then rated, shared and tagged just like amateur clips. This encourages engagement and participation, the company declares.
Even as YouTube now begins its life as part of Google, the one thing that is clear is that 2006 will be seen as the year the Internet transmogrified from a world of text to rich media, and YouTube will have its place as the primary change agent.