Technorati, Bloglines, and The Economics of Feeds

by Umair Haque writes:

…It’s been less than cool for me to watch Technorati’s first-mover advantage eroding over the last few months, culminating in the Bloglines acquisition. I thought Technorati was incredibly cool from the day it launched, and I thought it had a very strong advantage.

Examining why, I think, reveals some pretty important strategic lessons about Web 2.0 (at least for me). It’s a fascinating story, because it’s about two players, (Technorati and Bloglines) with the same capabilities, but very different strategies – which led to very different outcomes. Here are my notes about it (based on some pretty strong assumptions – needless to say, YMMV).

There are three questions that hit me these days when I look at the blog ecosystem. First, why has Technorati stuck with a decayed standard – ‘watchlists’ – vs feeds? Second, why didn’t it extend it’s advantage to first-to-scale by locking in a user base? Third, why does Blogger continue to turn into Windows 98? Leaving number 3 aside, here are some thoughts on the first two.

Technorati, and I think most blog aggregators, have misunderstood the strategic landscape created by the economics of feeds.

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Rajesh Jain

An Entrepreneur based in Mumbai, India.