Video Advertising

Read/Write Web writes:

If video is indeed the most important type of user generated content today, and we have entered the monetization phase of the new web, then the gold rush fever surrounding video ads is not a surprise. But what is the right way of doing this?

The right way is going to be whoever manages to deliver ads in a format that does not annoy consumers. A repeat of what Google did with text ads, but in video, is going unlock huge advertising spending and shift even more of it online. Will this be Google or some other company? We do not know yet, but Google has already spent a whooping $1.65B on YouTube, so it will fight this battle hard. In this post we look at what different companies are doing today and consider the ingredients of a successful solution, using AdWords as a model.

Teens Online

AlwaysOn features an interview with Anastasia Goodstein, author of “Totally Wired: What Teens and Tweens Are Really Doing Online.”

Teenagers are connected to each other, lots more information, and media 24/7. They need parents and adults to set limits on this use and act as guides as to whats credible as well as to help them be more media and marketing savvy. It means that there is a new way of communicating that adds an element of distance, the possibility of anonymity, and the reality of much of this communication is public or can easily be made public.

Teens put the social in social networking. Being a teen is all about individuating from your parents and spending more time with peers. We did this by hanging out in malls, parks and parking lots. Todays teens are much more scheduled and structured, and todays parents are more reluctant to let teens hang out unsupervised.

India’s Power Crisis

The lack of power is the cover story in a recent issue of Business World. The New York Times also joins in:

[The] electricity crisis…represents one of the major hurdles to Indias ability to hoist itself into the front ranks of the global economy.

Look up at the tops of buildings, and on any given day, you are likely to find three, four or six smokestacks poking out of each, blowing gray-black plumes into the clouds. If the smokestacks are being used, it means the power is off and the building whether bright new mall, condominium or office is probably being powered by diesel-fed generators.

According to the Planning Commission of India, 600 million people roughly half the population are off the electric grid. For this reason, it is impossible to estimate accurately the total national shortfall.

But no matter how it is calculated, there is no doubt that Indias electricity crisis is becoming all the more acute for the roaring pace of the countrys economic growth and the new material aspirations it has generated.

WiFi and Mobiles

BBC News writes:

As the numbers turning to 3G are climbing, those mobile networks could be forgiven for thinking that it was only a matter of time before they started recouping the considerable capital cost of buying and building that network.

Unfortunately the relentless pace of innovation may be about to dent the dreams of recovering those costs.

As hotspots get linked up into mesh networks that offer blanket coverage they create a rival to the 3G networks currently in existence.

Coming iPhone Era

Tomi Ahonen writes: “June 2007 marks a watershed moment in time. Much like the Western calendar marks time from before and after Jesus Christ, and how the computer world changed totally by the Macintosh – remembering that Windows is Microsoft’s copy of the Mac operating system – I am certain that the mobile telecoms world will count its time in two Eras. The Era BI: time Before the iPhone, and the ERA AI: time After the iPhone. What will change? Pretty much everything. And funnily enough, most of it is not actually caused by the iPhone, they only happen to occur so closely to the iPhone, that the iPhone will be given much of the credit.”

TECH TALK: Facebook: The Vision

Fortune wrote a story on Facebook:

“Imagine that when you shopped online for a digital camera, you could see whether anyone you knew already owned it and ask them what they thought. Imagine that when you searched for a concert ticket you could learn if friends were headed to the same show.

Or that you knew which sites – or what news stories – people you trust found useful and which they disliked. Or maybe you could find out where all your friends and relatives are, right now (at least those who want to be found).”

“We want to make Facebook into something of an operating system so you can run full applications,” Zuckerberg [said]. He said Facebook is becoming a “platform,” meaning a software environment where others can create their own services, much the way anyone can write programs for Microsoft’s Windows operating system on PCs. Facebook, he explained, is a technology company, not a media one.

Today, social networking is fragmented. There are networks for dating, for philanthropy, for pet owners, for parents. But each has its own ways for members to register, describe themselves, communicate, and interact. Facebook aims to make much of that unnecessary. It will provide the underlying services – a platform – and offer access to its prerecruited pool of members. It will retain some online real estate and will still generate the lion’s share of its revenue from advertising.

Michael Parekh wrote:

If Facebook is able to even partially execute on the promise of this strategy, it could pose a long-term dilemma for the mainstream portals. Tactically, it makes a ton of sense for all of them to make sure their individual portal services are represented as applications within Facebook, thus leveraging Facebook’s networked audience.

Strategically, Facebook poses strategic risks for the major portals no less than what Google posed for Yahoo!, AOL and Microsoft back in the nineties, when they all used Google’s search engine as an outsourced service.
For smaller Web 2.0 companies, Facebook could be their best friend in the short-term. They potentially get substantial, and relatively inexpensive customer acquisition via Facebook, by making their services “applications” on Facebook’s platform.

In that sense, Facebook’s strategy is brilliant, since it makes a tail-wind out of the fact that the biggest problem facing hundreds of VC and angel-funded Web 2.0 startups, is to get massive, quick, inexpensive distribution.

Tomorrow: Looking Ahead

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Ramana Mulpury writes: “A few years ago, if you asked anyone at an emerging software company whether ASP/SaaS/On-Demand (referred to as ASP) solutions were for real, you would probably get a 50/50 response. Over the last year or so, Ive been seeing a completely different scale of adoption of ASP solutions. This scale of adoption can only mean one thing SaaS is here to stay. Not only that, small, mid-sized businesses, departments of large enterprises, and to some extent entire enterprises, are clearly embracing ASP solutions today.”

Hosted Lifebits

Jon Udell envisions life in the future:

Grade 3

Your teacher assigns a report that will be published in your e-portfolio, which is a website managed by the school. Your parents tell you to write the report, and publish it into your space. Then they release it to the schools content management system. A couple of years later the school switches to a new system and breaks all the old URLs. But the original version remains accessible throughout your parents lives, and yours, and even your kids.

Ad Networks and Deportalisation

Jeremy Liew writes: “If you cant grow by selling your own inventory, then youre forced to sell other peoples inventory. That was the driver of AOLs acquisition of, and its the driver of Microsoft and Yahoos recent acquisitions as well. It also explains the prices that they paid, which some fear to be too high. Fear of loss is always a greater motivator than the prospect of gain. The big portals are looking down the barrel of a loss of their share of total pageviews, and are willing to fight hard (i.e. pay up) to avert that loss.”

Social Network Sites

Danah Boyd writes: “Social network sites (SNSes) like MySpace, Facebook, and Bebo are ubiquitous and todays youth are spending a great deal of time using these sites to access public life. How is public life shaped by social technology? How are the properties of mediated publics, like social network sites, different from unmediated publics? This article seeks to explore the social dynamics of mediated public life in order to help educators understand their role in socialising todays youth.”

Google’s ARPU is $1

Read/Write Web writes: “Google makes $1 per internet user. But not all of the revenues come from Google Search – they control only 50% of the search market, but the whole web is organically getting covered by Google ads via AdSense and AdWords. Therefore, even if you perform your searches from Yahoo or Live, you may end up being directed to a long tail web page powered by Google AdSense. Another way to look at it – if you use Google as your favourite search engine, you may be giving them $2 per month. But even if you you use a different search engine, you may still give ~$0.5 via Adsense and the Long Tail.”

TECH TALK: Facebook: The Early Days

Wikipedia has this about the early days of Facebook: In early February of 2004, Harvard University sophomore Mark Zuckerberg founded “The Facebook”, with support from Andrew McCollum and Eduardo Saverin. By the end of the month, more than half of the undergraduate population at Harvard were registered on the service. Additionally at that time, Zuckerberg was joined by Dustin Moskovitz and Chris Hughes for site promotion and Facebook expanded to MIT, Boston University, and Boston College. This expansion continued in April of 2004, when it expanded to the rest of Ivy League and a few other schools. The following month, Zuckerberg, McCollum, Hughes, and Moscovitz moved to Palo Alto, California to continue work on Facebook’s development with additional help from Adam D’Angelo and Sean Parker….Facebook received approximately $500,000 from PayPal co-founder Peter Thiel in an angel round. By December , Facebook’s user base had exceeded one million.

Mashable put together a timeline of the key events in Facebook’s history:

February – Mark Zuckerberg and co-founders Dustin Moskovitz and Chris Hughes launch Facebook from their Harvard dorm room
March – Facebook expands from Harvard to Stanford, Columbia and Yale
June – Facebook moves its base of operations to Palo Alto, Calif.
September – Groups application is added; the Wall is added as a Profile feature
December – Facebook reaches nearly 1 million active users

May – Facebook raises $12.7 million in venture capital from Accel Partners;
Facebook grows to support more than 800 college networks
August – The Company officially changes its name to Facebook from
September – Facebook expands to add high school networks
October – Photos is added as an application
Facebook begins to add international school networks
December – Facebook reaches more than 5.5 million active users

April – Facebook raises $25 million from Greylock Partners and Meritech Capital Partners;
Facebook Mobile feature launches
May – Facebook expands to add work networks
August – Facebook development platform launches;
Notes application is introduced;
Facebook and Microsoft form strategic relationship for banner ad syndication
September – News Feed and Mini-Feed are introduced with additional privacy controls;
Facebook expands registration so anyone can join
November – Share feature added on Facebook, simultaneously launched on over 20 partner sites
December Facebook reaches more than 12 million active users

February – Virtual gift shop launches as a feature
March – Facebook reaches over 2 million active Canadian users and 1 million active UK users
April – Facebook reaches 20 million active users;
Facebook updates site design and adds network portals
May – Facebook launches Marketplace application for classified listings

Mashable has an earlier article profiling Facebook.

Tomorrow: The Vision

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China WAP Stats

China Web2.0 Review summarises:

# As of March 2007, there were about 39 million active wap users in China, they used mobile handsets to access WAP sites in last six months. About 90% among them are internet users as well, they access internet via PC in last six months.
# Most of the WAP users (over 60%) live in east of China, the concentration rate of WAP users are higher than that of internet users and mobile subscribers.
# About 9.7 million, or about one forth of total WAP users, live in Guangdong Province.
# 57% users will use WAP at least once a week.
# 26% users pay RMB 11-20 yuan per month for WAP usage, 23% users pay 21-50 yuan and 20% users pay 6-10 yuan.

Webification of Advertising

Phil Wainewright writes:

Today, were starting to understand that the Internet is going to fundamentally alter the way businesses promote their wares to prospective customers. So the entire online ad business is getting snapped up at (literally) any price. Even though the buyers have no clue what it is theyre trying to buy. All they know is that if they dont buy it, someone else will.

What theyre really trying to buy into is the webification of advertising. The same way that the internal combustion engine took the horseless carriage and turned it into something no one had ever anticipated, the Web is turning advertising into something we could never previously have imagined. Before the Web came along, advertising was a totally disconnected activity. Advertisers never had any certainty that their ads would be seen by any of their prospective customers, and even if they were, it was virtually impossible to assess how effectively they grabbed their attention.

Helio’s Ocean Design

Technology Review writes about the design of the new mobile phone from Helio: “The Ocean is hefty by today’s sleek standards, pill-shaped in a market of rectangular things. The company’s future will hinge on how much the intended audience appreciates those departures from conventional design. It will hinge on the layout of the device’s QWERTY keyboard. It will hinge on the simplicity of the messaging and search interface (for instance, the way it allows users to start typing from idle mode). And it will hinge on–the hinges. The Ocean (which will sell for $295, plus a monthly fee of $65 to $135 for rich-media subscriptions and varying allotments of voice minutes) sports a pair of them; operated by a novel three-way spring, they enable a keyboard to slide out from one side of the device and a numerical keypad to slide out from another.”


John Montgomery writes about Microsoft’s Popfly service for mashups:

# It’s easy to get. All you really need is Firefox 2 or IE 6 or 7. Oh, and Silverlight, but that’s pretty easy to get.
# It’s easy to use. People have talked about wanting programming to be like connecting Lego blocks; Popfly gets pretty close.
# You can create mashups with it. This is kind of its purpose, but it’s neat nonetheless.
# You can create web pages with it. We “borrowed” the Office Live team’s page editor technology.
# You can use it with Visual Studio. If you’re a VS user, you can get Popfly Explorer and start to share projects with your friends on Popfly.

Micro-Blogging and Twitter

Mark Glaser has an excellent tutorial: “Micro-blogging allows you to write brief text updates about your life on the go, and send them to friends and interested observers via text messaging, instant messaging, email or the web. The most popular service is called Twitter , which was developed last year and became popular among techno-gurus at the 2007 South by Southwest Conference in Austin, Texas. Part of the magic of Twitter is that it limits you to 140 characters per post, forcing you to make pithy statements on the fly.”

TECH TALK: Facebook: The Platform (Part 2)

Splashcast Media, one of the companies creating applications for Facebook, had this to say about the platform: Facebook is announcing the opening of what its calling The Platform a system for 3rd party companies to program their services for use inside of Facebook user pages. As part of the announcement, about 30 preselected companies that have integrated with The Platform ahead of time are being showcased to demonstrate what kinds of things are being made possible. This goes beyond the ability to post media from outside into Facebook and it goes beyond the previous Facebook API (also called The Platform) – outside companies are now being allowed to deploy advanced functionality inside the Facebook site…Some monetization in Facebook will be permitted, so long as its not done on the same pages where Microsoft ads are being run. More may be possible in the future. That is a remarkable differentiator compared to other, similar websites that maintain tight control over monetization in their ecosystems. This is one of the big unknowns in regards to Facebook opening up but there is every indication that this will be a real game changer. When companies cant monetize their presence in larger ecosystems, then innovation becomes far less affordable. If Facebook does allow meaningful monetization to occur, they could serve as a lifeline to hundreds of small companies that will then take risks, develop innovative new products and change the face of the web.

Fortune added:

From here on it will be wide open. Anyone will have access to Facebook’s so-called “markup language,” which is intended to be usable even by those with rudimentary programming skills. So kids in dorm rooms will be able to create simple applications to coordinate TV-watching or trips to the cafeteria with their friends. And some creative amateur coders are likely to come up with amazing new things to do inside Facebook. Companies, too, will find many ways that Facebook applications can improve productivity and collaboration.

The company will impose no limitations on what kinds of applications others can create, except that they be legal. Says Zuckerberg: “They can sell sponsorships, they can have ads, they can sell things, they can link off to another site – we are just agnostic.” He promises that Facebook will not give its own applications any special privileges or exclusive access to its members.

TechCrunch thinks of Facebook’s approach as the opposite of MySpace: The payoff is two way. Not only do developers get deep access to Facebooks twenty million users, Facebook also becomes a rich platform for third party applications…Facebooks strategy is almost the polar opposite from MySpace. While MySpace frets over third party widgets, alternatively shutting them down or acquiring them, Facebook is now opening up its core functions to all outside developers.

GigaOM had this to say: This move is more than catching up with MySpace and Bebo and what have you by adding outside widgets; Facebook has become a primary relationship and identity broker for millions of people. Now outsiders can capitalize on that information in a safe way, pulling from users expressed interests in their profiles, building on their stated intention to attend events, or simply giving them more dedicated tools for expressing themselves. The outside apps will be woven into a structure thats already been built and is utilized every day…Admittedly, there is some reinventing the wheel going on. Wasnt the browser declared to be the new OS just, like, two years ago?

Tomorrow: The Early Days

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Ad Markets

Tim Oren writes:

One is the collapse of the notion that users’ means of access would control where they spend their time and do their searches on the net. Whether your strategy hoped to influence the outcome via control of the user’s browser and PC (MSFT), dial-up (AOL) or broadband access (YHOO, via AT&T partnership), this chart shows you losing. Anyone just hitting the nets now is a self-proclaimed late adopter. Everyone else, from the pioneers to the late majority, have been out there long enough to find their own way around. The ‘control the user’ notion was probably bogus from the start, but it’s visibly dead now. (Wireless providers might profit from the lesson.)

Another conclusion is how a market has been beating a traditional sales model. Advertising is of course the payload of the ‘search’ marketplace.