Friday, December 19, 2008

This Just In From Captain Obvious

There's an article this week in the NY Times treading some well-worn ground, namely that advertising on social networks isn't going so well:
Advertisers Face Hurdles on Social Networking Sites
There's not much new in the piece, so if you've already been reading on the topic you can probably skip this one; highly-placed in the piece, for instance, is this earth-shattering insight: "Members of social networks want to spend time with friends, not brands."

Still, maybe there's value in belaboring the point (or, at least, in documenting it in a publication as respected as the NYT). There is this one takeaway, though:
"Brand advertisers on Facebook can try one of two new approaches. They can be more intrusive, but the outcome will not be positive. Or they can create genuinely entertaining commercials, but spend ungodly sums to do so."
I can think of a third approach: don't advertise on social networks. And even a fourth: advertise, but do so knowing that you're advertising for the purpose of brand awareness rather than sales.

Actually, that last point is maybe a little interesting. Facebook and other social networks might be where ads go to die, but there's got to be an oppportunity cost if you don't advertise on those platforms. That is to say, there's a risk in choosing not to advertise on hot Internet media properties -- namely, your brand might come to be associated with old media, your parents' generation, etc. It's probably hard to quantify, but I'd love to see an analysis on an actual cost-benefit ratio of social network advertising, where the cost is obvious (the cost of producing the ad, placing the ad, maintaining the promotion plus any prizes you give out) but the benefit is maybe a little obscure (not just sales but also brand recognition and positive brand associations).

Wednesday, December 17, 2008

Ads and Social Networking Sites Go Together Like Orange Juice and Toothpaste

Which is to say, people hate that combo. I came across a useful summary to that effect this morning:
Social Networking Sites and Advertising
Here's a summary for those of you who are too busy to, you know, read:
  • Consumers have a very low tolerance for online ads
  • 29.9% of visitors surveyed will immediately leave a site they see as cluttered with ads
  • Ads on social networking sites result in substantially fewer click-throughs, and even those who do click are less likely to make a purchase
  • Don't even think about charging customers for an ad-free site; they like that idea even less.
So what's to be done if you're running a social networking site? Frankly, there only appear to be three options (only one of which is good):
  1. Hope that your cash in the bank is enough to tide you over until advertisers are willing to pay a lot more for click-throughs (or until some marketing genius develops a much more clickable banner ad)
  2. Get really smart, really quickly, about contextually targeting your ad inventory to your visitors
  3. Forget about the idea of monetizing social networking, and figure out how to make that a side-project to your core business of selling something else
Overall, #3 has the best chance of success. At the very least, it's less dependent on brilliant flashes of insight; those things are great when you have them, but "we'll figure it out later" is a poor excuse for a business model (are you listening, Twitter?).

The bottom line in this scenario is not everything can be monetized. There are times in every person's life when you have your wallet out, and other times when you're simply not interested in spending money. Successful online businesses are likely to be the ones whose services most closely align with those "wallet-out" moments. Social networking sites are trying to swim against that tide, and will continue to do so as long as they're exclusively focused on social networking.

Looking into my crystal ball, here's what I forecast for Web 3.0: Facebook, MySpace, Twitter, Friendfeed, etc.: they will all go away (at least in their current forms). In their place will be a bunch of online businesses that incorporate social networking elements by default. Web 2.0 taught us how powerful the Web could be as a social mechanism, but it was a stop along the way, not a destination.

Friday, December 12, 2008

Marketing Lessons from Google, a blog on search engine optimization, recently put out an article on "Marketing Lessons from Google." The full article is here:
A number of the "lessons," though, are applicable only to leaders of heartless multinationals -- few of whom, I imagine, are reading this blog. (Except for Steve Ballmer, of course. That guy will not leave me alone.*) There are also a fair number of "lessons" intended to prove how evil Google is (apparently the big G isn't too popular in the SEO world). For the rest of us, I've extracted three points that apply to smaller operations, interspersed with my own scintillating commentary. Shall we begin?
  • Offer a free version to make sure everyone who may want to has a chance to experience your product and/or service.
This is at the heart of a several-year argument I've had with a friend who founded a subscription-based content business. He has insistently argued that the lesson we all learned from the Web 1.0 bubble is that content isn't free, and only fools give it away for nothing. My response has always been two-fold: if you don't build an audience, a fair price will drive you out of business just as quickly as no price at all; and "the first taste is free" has been an excellent business model in the drug trade for decades now. Certainly it's true: if you never find a way to offset your operational costs, your business is doomed. But people today are accustomed to finding stuff for free online, and if the first thing they see when they come to your site is a hand out, asking for money, they'll leave. Give it to them for free long enough that they start to value what you offer, and then you have the chance to convert that value into coin.
  • Offer something that forces people to keep coming back to your website.
In Google's case, that's the search box enabled by default in Firefox (and now Chrome as well). The rest of us have to come up with other ways to spur repeat usage. One good idea is link journalism: leverage your expert status within the area of your site to provide visitors with a regularly-updated set of links to content on other sites. In short, you browse so that your vistors don't have to. Solve a problem for them, big or small, and they'll keep coming back as long as that problem persists.
  • Keep making small changes and talking about how important they are so you stay in the media.
I've noticed something about TechCrunch lately: many businesses covet that first post -- virtually a coming-out party for startups these days -- and the great bounce in traffic that comes with it. But TechCrunch also likes to report on significant updates to sites and services that they've already reported on. I could see where a smart business might think of those updates as part of a marketing plan (not just on Techcrunch, but also Webware and other like-minded blogs) that will keep the buzz flowing.

Does buzz flow?

* This is a joke. To my knowledge, I am not being stalked by Steve Ballmer. And Microsoft is in no ways a heartless multinational; bloodsucking vampires must have hearts, otherwise where would we hammer the wooden stakes?**

** Also a joke. Microsoft is not staffed with bloodsucking vampires. At least, I've never personally witnessed any bloodsucking, though I wouldn't put it past some of those marketing guys.

Wednesday, December 10, 2008

Take the Bird in the Hand

Useful insight from Seth Godin on the dreaded bounce rate:
Silly Traffic
If you do anything related to website analytics or traffic reports, you know about the bounce rate: that's the percentage of visitors who take one look at your website, stick out their tongues, and leave (perhaps never to come back). Industry standard bounce rate is somewhere around 70%-75%, so even if you're doing your job quite well, better than two-thirds of your visitors are leaving your site immediately. To some people, that looks like a challenge: how can we redesign our home page (they say) to capture more of those visitors and turn their disinterest into engagement?

Seth Godin suggests that maybe you shouldn't bother, since most of that traffic is random noise:

"'I'm just looking,' is no fun for most retailers. Yet they continue to pay high rent for high-traffic locations, and invest time and money in window displays. Very few retailers lament all the traffic that walks by the front door without ever walking in. A long time ago, they realized that the shoppers with focused intent are far more valuable. Smart retailers work hard to get focused people to walk in the door and to keep the riff raff walking on down the sidewalk.

Your website can do the same thing. In fact, you might want to make it more likely that bouncers bounce, not less, but only if those changes increase the results you get from the visitors you truly care about."

It's a good point. Website traffic figures conceal far more than they reveal; you know that X number of visitors came by and stayed for Y amount of time, but you don't know (much) about why they came and you know next to nothing about why they left (assuming you're not running an exit survey, which almost no one is). When you know next to nothing about your visitors, it's tempting to think of them all as potential customers who were turned off because of something you did or didn't do. In this light, your bounce rate is a big, ugly missed opportunity.

But when you think about it, Godin is exactly right: you're always going to get some visitors who came to your site by accident, and they left because you're not offering what they are looking for. Those people will never be customers. They'll never become members of your community. Nothing you do will ever change that. Far better, then, to spend your limited time finding ways to satisfy the people who do want to come to your site, and signal that desire by coming, staying for a while, and then coming back a second time.

A bird in the hand is worth two in the bush, and your bounce rate? That's the bush.

Monday, November 24, 2008

Mr. Obama Goes to Washington

A while back, TechCrunch ran an intriguing article on Obama's use of social media and its possible implications for what could be a game-changing presidency:
Is Obama Ready To Be a Two-Way President?
The article poses a what-if question: what if Obama, rather than simply using services like Facebook, YouTube, and Twitter to broadcast to voters, actually allowed people like you and me to communicate with him by the same means?
"If Obama dedicates a team aside from the outbound crew that "pushes" content through social channels in order to strategically reach, listen to, and embrace the 46% who voted against him, he might be able to run a truly democratic term. It could also curtail the necessity to campaign as much while in office in order to focus on the issues we elected him to fix."
The author (Brian Solis) proposes that Obama should use sites like to really open up the communications between President and constituent, going so far as to solicit policy suggestions from individual visitors and allow the community to vote these ideas up and down.

It's a powerful idea. Anyone who has lived through more than one presidential election is familiar with the process of candidates struggling to appear like men (or women) of the people while on campaign, only then to disappear behind closed doors in Washington once the election is won. The idea that Obama would set a new trend in which high elected representatives would remain in touch with the man on the street is a powerful evocation of the American political myth, as if it were a scene from an updated version of "Mister Smith Goes to Washington." The manager in me can't resist pointing out some parts of the idea that seem unrealistic -- does a sitting president really have the time to regularly record podcasts and engage in live exchanges with voters via the Web? Does the mystique of the presidency allow for candid, behind-the-scenes webcasts? -- but I can't deny the basic appeal of the idea.

I'd like to believe it can happen, too, but then I also read Newsweek's issue on the campaign. The "How He Did It" series of articles is an excellent account of the candidates and their campaign staffs, and I came away disappointed in how little I heard of Obama's social-networking efforts. They were mentioned -- Obama's digital team gets about three-fourths of a page in one of the articles -- but those mentions did not convey a sense that the Web was viewed as particularly important by the people running the campaign. Having read those articles, I now know more about David Axelrod's taste in soft drinks than I do about the campaigns' core digital strategy. Of course, there's a chance that old-school reporters simply don't understand what is happening right in front of them, but you have to ask: if social media were really that important to the Obama campaign, if the campaign's managers valued their digital strategy all that highly, would that not have eventually become apparent to the people who followed that campaign for months at a time?

I don't doubt that the Internet changed American politics for good this time out. If there's one thing politicians understand, it's money, and Obama outspent his opponent three-to-one on the basis of small contributions from individual donors. That's a game-changer right there, and every serious presidential candidate in the next campaign will reach out to web properties in an attempt to duplicate Obama's success. Crowd-sourcing the American government, though, is a much more radical step, one which raises very serious questions about practicality and proper implementation. It is also one which we have as of yet no reason to think that Obama will embrace.

I appreciate the passion of the TechCrunch piece -- and "passion" is a word I'd like to apply to TechCrunch more often -- but it describes a dream, not a reality. I look forward to seeing that dream represented in the updated "Mr. Smith" -- starring Wil Smith, no doubt, and coming soon to a theater near you.

Friday, November 21, 2008

Bring Readers Back By Sending Them Away

There's a good post today on Publishing 2.0, on the virtues of link journalism:
Link Journalism Drives Page Views and Engagement
"Link journalism," in a nutshell, is publishing content that consists almost entirely of links to other content. Usually this sort of thing attracts two types of criticism: that it's a lazy substitute for actual content generation, and that it's a suicidal surrender of visitors to a competitor's site. I can attest to many meetings I've attended in which one idea or another was shot down for the sole reason that it would send visitors away from the site, rather than keeping them around. Let's call this the flypaper model of site design: it seeks to trap visitors on the site, whether they want to be there or not.

The article above notes how wrong-headed this was: it talks about a page on a Tennessee Volunteers fan site that gets twice as many page views as any other page, despite the fact that it consists entirely of links to stories on other sites. Partly this is due to the fact that the page in question focuses on a breaking-news topic of great interest to the site's readers, but to explain it away as an exceptional case would miss a valuable point:

Aggregating links to content on other sites solves a problem for your readers.

We work in an attention economy. There is far too much information out there for anyone to assimilate on their own. For people who are interested in following news in general or even developments within a specific topic, this creates anxiety: maybe something important or interesting is happening RIGHT NOW and they won't hear about it. That's a problem, and the site that solves that problem will immediately go into their list of favorite web destinations. We can call this the banquet model of site design, since it presents visitors with a tasty spread of content that tempts them to return the next time they feel hungry for information.

In short, there are two ways to send visitors away, one good and one bad. You can send them away in a fashion that leaves a lasting negative impression of your site, or you can send them away feeling that your site is a good thing that gave them what they wanted. If you're in the latter category, the visitors who leave your site via external links will probably come back in time. Solve a big or pressing problem, and they'll come back repeatedly (and maybe even bring their friends).

Wednesday, November 19, 2008

Baby, You're a Star!

I've been working my way through the Razorfish vision document that I referenced in a previous post. At 84 pages, it's a weighty PDF download and not something that you really want to force your way through in one go. There are some good ideas scattered amongst those pages, though, and I'll be blogging on a few of them here. The first comes as a useful insight into building a site around individual experience:
"People want to feel special and tend to reach out to the things that make them feel that way. So, it's no surprise that people flock to social networks in droves; they make users feel like the star of their own lives. The same desires extend to companies, products and even TV networks. The lesson here is that socially-aware companies put customers and audiences at the center of their world, or at least make them a part-owner in it. The New York Times and most newspapers do this by simply highlighting the "most popular" articles other site visitors have read, searched or shared. CNN goes a step further and gives broadcast and digital airtime to user-generated, citizen journalist iReports. Nike does it too, by centering its Nike+ site on the user's profiles and the community's interactions, instead of its shoes. And Yahoo!, Google, and Coca-Cola go full bore--giving their entire home pages over to each user to "trick out" with their own MyYahoo! and iGoogle controls or Coke bottle designs. In all cases, the key is they make sure the spotlight is on the customers and not on themselves."
This is a critical insight, and one which I wish I had kept in mind when helping build video game websites over the past two years. On some level I think I already knew this, but it's easy to forget in a corporate environment where everyone knows the company's goals going in, and the developers come to the table with a list of features they're eager/willing to build, and the designers come with a vision for how the site should look and behave, and the marketing and product people have clear expectations of what messages should be pushed and where. The result is you end up with a site that's built to please developers, designers, product managers, and marketers. Is it really all that surprising, then, that customers find the results considerably less appealing?

But now imagine that you do the whole thing over, this time starting with a very simple premise: the site should make each visitor feel like a star. What does that mean in practical terms? Right off the bat, it means that when a visitor comes to the site for the first time, s/he should be asked to sign in, and every time after that the first thing s/he sees should be a personalized home page full of content that s/he has chosen. In my previous position we suggested that sites should include personalized home pages, but we never got anywhere because that was never a high enough priority. In the world where every visitor is a star, though, it's the highest priority of all.

Second, we should have been thinking of every visitor as the star of their own life. That means designing the site in such a way that they can bring aspects of their life onto the site, starting with a friends list that is platform-agnostic. We never discussed implementing OpenSocial or Facebook Connect, but we should have. Sure, not all of a visitor's friends are video game players, but it's his friends list, not ours. The universe revolves around the user, and the list of friends should not have been limited to the ones we were willing to display.

The third way we missed the boat was in displaying stats and leaderboards on our gaming sites that weren't focused on individual experience. We put up leaderboards that displayed the top-ranked players without really thinking about how that diminishes a person who is and never will be good enough at the game to be displayed there. On a site where you're the star, stats and leaderboards should tell your story; they should focus on what you're good at and highlight the areas where you have excelled. So you just completed your first online match and you finished fourth? That's great. You rock. Here's what you'll want to do next, and when you do, we'll help you brag about it, feel good about it, and have fun with it. Because it's all about you.

You begin to think completely differently about marketing when you imagine a site this way. In the old way of thinking, marketing was a general-purpose club used to bash every visitor over the head. The home page crawls with it: "Buy Now!" links, branded images, trademark bugs, and "news stories" that are actually warmed-over press releases. But a truly user-centered design might dispense with that home page altogether and redefine marketing as moments that occur within a customer's personal narrative:

"Don't have the game yet? When you're done viewing the trailer, we can introduce you to other people like you who are really enjoying it. If it sounds like fun, you can buy the game directly from this website."

"Just getting started? Struggling a bit? There are how-to videos in the media section, or you can buy this official strategy guide. Click here to download a free preview."

"Welcome back -- you originally signed up months ago, but you haven't visited in a while (and our records show that you haven't played online in nearly as long). Here's another game in the same genre that might prove more of a challenge, but don't forget that the sequel to this game is coming out in ten months -- click here to add that event to your personal calendar, and we'll send you an email when the demo is available for download."

I'm not a marketer, but I bet that would work pretty well. A one-size-fits-all marketing strategy never fits anyone for long, and in using it we train our visitors to ignore what we're saying. Marketing messages that address specific moments within a customer's personal narrative, though, are an actual value: they offer products to a visitor at a moment when s/he might really want those things. That's an effective strategy, and it starts with treating every user as a star.

Monday, November 17, 2008

Coloring Facebook Green

This morning we've got two angles on Facebook's problem of making money. First, from the venerable Wall Street Journal, comes word of a new approach to ads on that social networking platform, namely "engagement ads":

The new ads appear on the main screen when a person first logs in to Facebook. They prompt a user to do something within the ad, such as comment on a movie trailer or RSVP for the season finale of a TV show.

If the user completes the action, such as adding Bravo TV's "Project Runway" show to a personal list of events, Facebook tries to get Bravo's ad in front of more eyeballs by sharing a notice about what the user has done with their friends.

This is clearly a step in the right direction. Engagement ads place the onus on the advertiser to find a marketing angle that is intrinsically social, and thus at home within the context of Facebook and other similar web destinations. Rather than simply putting ads in front of users and hoping for the best, these ads should, in theory at least, make the ads part of the social experience.

Still, they're asking a lot of their users. They're basically requesting that viewers opt-in to their marketing campaign, and you have to wonder what sort of adoption rate they're going to see. If they're advertising something cool and fun -- like the "Project Runway" episode -- I expect they'll get pretty good numbers. If, though, the payoff is lame ("Sign up here to get an exclusive MSN Messenger icon" or something like that) they can't expect many people to take them up on the offer, let alone do so in full knowledge that all their online friends will be pinged with the fact that they have done so.

Meanwhile, Facebook whiz kid Mark Zuckerburg is not concerned:
In public appearances, Facebook's 24-year-old Chief Executive Mark Zuckerberg insists that his company remains more focused on expanding its user base than its revenues. The right business model for the site will emerge over time, he has said.
So traffic is the new profits, after all.

On the other side of the coin, web development house Razorfish has weighed in with their Consumer Experience Report for 2008. (They've published the report in Flash, regrettably enough, but there is a PDF download link.) Things actually look pretty good for Facebook and other social platforms. In Razorfish's survey, three fourths of respondents said they didn't mind seeing ads on social networking services, and nearly half reported that they had purchased a product based on an online ad or the recommendation of an online social connection. On the face of it, this is hard to line up with the estimate in the WSJ article that less than 1% of Facebook's visitors click on an ad, but perhaps with that sort of destination -- where you tend to come back repeatedly, even obsessively, to fine-tune your profile and check on your friends' status -- sooner or later you'll end up clicking on one ad or another.

When it comes to engagement ads, of course only time will tell whether visitors will click on them enough to save Facebook's bacon. But for now they certainly seem to be a step in the right direction; if nothing else, engagement ads force marketers to try to think of ads that are actually engaging, rather than merely distracting.

Wednesday, November 12, 2008

How To Make Readers Hate You

Before we get started on this post, give me a second. I need to build my audience.

Ahem: Holly Madison. Adrienne Bailon. Hi-5. Hurricane Paloma Path. NFL. Shelby Lynne. Jada Pinkett Smith. Barack Obama. Taylor Swift. Samantha Ronson. Jennifer Aniston. Hank Baskett.

All done! According to Yahoo! Buzz, those are some of the top searches today, and the fact that I've written a post that mentions such popular topics will certainly bring a wave of popularity to this blog (and Lord knows, we could use some traffic around here). Of course, people who want to learn more about Jada Pinkett Smith are going to be pretty disappointed when they find themselves reading a blog about web community, but I'll worry about that later. Or, actually, I won't -- because by then there will be new search terms at the top of Yahoo! Buzz, and I'll be busy writing a new post around them.

This content strategy, which I call "asinine" only because I can't think of a more scornful word for it, is apparently just the thing on some unnamed "big sites," at least according to this post on TechCrunch:

Some Big Sites are Using Google Trends To Direct Editorial

Reading deeper into the article, it turns out that it's mostly political and gossip blogs that we're talking about. And apparently they're quite happy with this tactic:

"We're not talking about a trivial amount of traffic, either. One person I spoke with about this yesterday said he can get up to 30,000 extra unique visitors per day just by focusing content on top queries, which is more than enough to dedicate a couple of full time people to the effort."

This is, of course, exactly the wrong way to build a long-term audience and encourage repeat visits to your site. When you write headlines and content with the express aim of gaming Google PageRank, you're borrowing a page from the spammer playbook. Sure, you'll get some short-term hits, and maybe for a while you'll feel good about your ad impressions, but the vast majority of these new visitors will be disappointed in what they find on your site, and that negative impression will stick with them for a while. In short, you're gaining empty traffic at the expense of your brand. That's not a viable long-term plan.

Speaking of long-term plans, get a load of Jennifer Aniston -- still toppin' the charts after all these years! "Friends" has come and gone, Brad Pitt has come and gone, but she's still rockin' the Internets. Good for her.

Tuesday, November 11, 2008

Wetpaint: The New Geocities (or Something More)?

Wetpaint is a business that's been getting some positive buzz lately. It's certainly been a favorite of TechCrunch:
Wetpaint Emerging as a Leading Social Publishing Platform
Wetpaint Raises $25 Million and Launches WetPaint Injected

It's a local Seattle company, and I thought I should check it out, so I visited the site today and took it through its paces.

The software looks quite solid, if not without the occasional quirk. It took me well over an hour to sign up for a new site, though honestly I can't say if that was the fault of Wetpaint's servers or my own crappy DSL service. And once I was there it took some futzing around before I could figure out the interface: for instance, you can create a to-do that tells other visitors what needs to be done on your site, but to-do's are an element attached to a specific page within the site, rather than something you create in the ToDos section highlighted at the top of the screen. Minor issue, sure, but it took me a while to figure that out. A little help text on the To-Dos page would have gone a long way.

Once you get the site working, it provides a solid and full-featured wiki experience. This, of course, has its good and bad points. On the good side, wikis are among the most useful sites out there these days. If you can get a large body of people to come together and pool their efforts, you really have something; you can't rival a wiki's ability to turn visitor enthusiasm into viable web content. On the other hand, wikis are not the most visually arresting sites around, and Wetpaint's designs are no different: browse through their gallery of "popular sites" and you'll see one wall of text after another. Good site design and wikis are rarely mentioned in the same sentence, and there's a reason for that.

Wikis are also a lot of work (unless you have a staff of minions ready to do the work for you). A new Wetpaint site is a like a big, empty box, and unless you're prepared to devote a lot of time to filling it with content, it's going to look like a ghost town. Judging by my experience signing up for a site, this happens a lot. My first thought was to create a wiki around GTD, the productivity system I've used for the past three or four years. I requested the URL "," only to find out that it had been taken. I visited that site and discovered that it is two years old, completely empty, and closed to all contributors. Pretty much the same goes for "," "," and "": barely a single useful page between them.

Browse wider, and you'll find that this is a common condition. I tried to find a Seahawks wiki and couldn't find a single one that was both current and actually about the Seattle Seahawks. I don't have official figures, of course, but my first impression is that the majority of Wetpaint sites are inactive, crappy, or both. That presents two problems: first it makes it very difficult to locate a good site via the Wetpaint homepage, and second, Wetpaint URLs are first-come, first-served: for two years now the owner of the clean and simple "" has done nothing with his site, but the URL is apparently his for life.

If you're as old as I am, the word "Geocities" probably comes to mind when you consider this scenario. Back in the day Geocities was considered an up-and-comer. It allowed anyone to publish their own website with a minimum of effort, and for a time that seemed really cool and empowering. Then, in the fullness of time, Geocities turned into a vast collection of cheap, ugly, abandoned sites -- often fansites of one type or another -- that you learned to avoid if there were any alternatives at all. Wetpaint's software is much better than Geocities' HTML templates, of course, but if the business ultimately fails, my bet is that it will go down in history as simply "Geocities on steroids."

Which brings us at last to the monetization question. Wetpaint would appear to have two sources of revenue: they provide wikis to third-party sites (with the wiki fully embedded in that site's chrome, and its contents fully searchable), and they attach text ads to personal sites. The first option seems like the better business plan. Putting advertising on personal sites was the Geocities business model. Hell, it was pretty much everyone's business model back then. And that model never worked, for a simple reason: no one pays attention to ads unless they're motivated to buy something. So, while the "Quantum of Solace" fansite advertised on the Wetpaint homepage may be pretty entertaining, I doubt many visitors will be browsing it with their wallets at the ready.

To Wetpaint's credit, the ads are pretty unobtrusive and mostly lie below the fold. And if they can find a clever way to identify the most active sites and match their content with appropriate advertising inventory (putting, say, Netflix ads on movie sites), they might make a go of it. Otherwise, I expect that the personal Wetpaint wikis will be, at best, a loss leader for the business-to-business service. Whether that B2B revenue stream is enough to keep the business afloat is a question for someone who knows what he's talking about (which is to say, not me).

So is Wetpaint the second coming of Geocities? Too early to tell. The quality bar is certainly higher, and the B2B angle is something extra that Geocities never had going for it. But wikis aren't going to be the hot, new thing forever, which means the clock is ticking on Wetpaint's business plan. If I were Wetpaint CEO for a day, I'd be tempted to take these measures:
  1. Cull the crap. If someone creates a site but then doesn't add any content for two weeks, delete it. If a site has been inactive for six months or more, send a notice to its owner and delete it if they don't respond. Return these URLs to the active pool. Wetpaint isn't just a business, it's also a brand. You want people to associate your company with quality. Geocities became the trailer park of the Internet; don't let that happen to you.
  2. Fast-track the moneymakers. Certain types of site will be (relatively) easy to monetize. Books sites, for instance, could promote Amazon or another online bookseller. Movie sites could promote Netflix or Blockbuster. Take a look at your ad inventory and make a strategic decision about the sites you would like users to build, then make it particularly easy for them to do so: encourage them on the home page to think of these topics, give them extra templates and layouts, etc. Nudge your users in the direction you want them to go.
  3. Tap the educational market. I see corporate wikis on Wetpaint. I see personal wikis on Wetpaint. So where are the educational wikis? I can see where a college professor might want wikis to organize her class materials and focus discussion, and I can definitely imagine an elementary or secondary school teacher having his class collaboratively build a wiki on some subject, as part of the lesson plan. Seems like this is an untapped market, and it would provide a definite win-win since educational wikis would seed Wetpaint with sites high on the quality curve.
  4. Show what's possible. You know what would have been a great source of publicity for Wetpaint? A best-of-breed presidential election wiki, chock full of information and high-quality content that shows off what the software can really do. It wouldn't take a major staff -- maybe an editor and a couple freelance writers -- to come up with the occasional high-profile wiki (on Christmas, the Super Bowl, high-profile movie releases, or whatever else comes to mind) to introduce people to your product, show them what they can do, and get them excited about building quality sites of their own. Best of all, there would be no reason to retire these sites once you're done; you could simply turn them over to the community and let visitors maintain them.
  5. Promote the winners. The Wetpaint homepage already lists a gallery of the better sites, but you could do more here. Which sites get the most traffic? Which ones have the most registered members? Which sites are climbing the ladder? In short: where are the success stories? Read this post on cumulative advantage and use it to boost successful sites into true destinations.
There are some real opportunities and challenges here. It will be interesting to see how it turns out.

Monday, November 10, 2008

Politics 2.0

There was an interesting article in the NYT this weekend on how Obama used social networking in his drive to the White House:
How Obama Tapped Into Social Networks’ Power
It's not a new story; a number of articles have already appeared about and how it helped foster and sustain the grassroots movement that propelled Obama to victory. For me, the most interesting aspect was the angle on what this victory means going forward. Some people see this as a transformative moment in American politics, when power exited the smoke-filled rooms and returned to the streets.

The juxtaposition of a networked, open-source campaign and a historically imperial office will have profound implications and raise significant questions. Special-interest groups and lobbyists will now contend with an environment of transparency and a president who owes them nothing. The news media will now contend with an administration that can take its case directly to its base without even booking time on the networks.

More profoundly, while many people think that President-elect Obama is a gift to the Democratic Party, he could actually hasten its demise. Political parties supply brand, ground troops, money and relationships, all things that Mr. Obama already owns.


But now Senator Obama’s 20-month conversation with the electorate enters a new phase. There is sense of ownership, a kind of possessive entitlement, on the part of the people who worked to elect him. The shorthand for his organizing Web site, “MyBO,” says it all.

“People will continue to expect a conversation, a two-way relationship that is a give and take,” said Thomas Gensemer, managing partner of Blue State Digital, which helped conceive and put into effect Obama’s digital outreach. “People who were part of the campaign will opt in to political or governing tracks and those relationships will continue in some form.”


The founders of America wanted a government that reflected its citizens, but would be at remove from the baser impulses of the mob. The mob, flush with victory, is at hand, but instead of pitchforks and lanterns, they have broadband and YouTube. Like every other presidency, the Obama administration will have its battles with the media, but that may seem like patty-cake if it runs afoul of the self-publishing, self-organizing democracy it helped create — say, by delaying health care legislation or breaking a promise on taxes.

That’s the thing about pipes today: they run both ways.

That's the second edge of this sword: if your campaign is based on citizen empowerment, you can't reasonably expect those citizens to sit back and do as they're told for the next four years. Obama's supporters feel (with some justification) that they are responsible for his victory, and their rage -- should he prove to be just another politician -- will be something to behold. Do you think that liberal Democrats turned on Clinton? That's nothing compared to what Obama can expect if he appears to sell out the ideas that energized his campaign.

In short, the Internet is a communications medium, not a broadcast medium. Any political campaign that relies extensively on the 'Net will need to treat the resulting representative-voter relationship as a conversation that runs both ways. Anything else will be seen as a hypocritical betrayal of the ideal.

Some go farther still, venturing on to a rather utopian viewpoint:

“It’s clear there has been a dramatic shift,” said Andrew Rasiej, the founder of the Personal Democracy Forum, an annual conference about the intersection of politics and technology. “Any politician who fails to recognize that we are in a post-party era with a new political ecology in which connecting like minds and forming a movement is so much easier will not be around long."

To me this smacks of irrational exuberance -- similar in a way to the pronouncements we heard during the first Internet bubble, when the old rules of business were allegedly being swept away for good. I'd expect the same goes for politics. Sure, Obama used social networking to bypass the campaign front runners. There is no doubt that his strength in primary caucuses (as opposed to the other primaries, where Hillary Clinton ran quite successfully) was related directly to the grassroots organization that Obama accomplished in part through Facebook and other social media platforms. Still, it is naive to think of this as the death of party politics; for every one person who voted for Obama because of something s/he saw on YouTube, there were probably ten -- maybe a hundred -- who voted for him because he was the Democratic nominee. Want proof? Ron Paul is another candidate who did a pretty good job of using the Internet to organize supporters, and look how well that campaign turned out.

Things have changed with Obama, but not dramatically. No candidate will ever ignore the Internet again, and hopefully none will (like McCain) casually admit that they don't even use email. Social networking will be an important grassroots organizational tool, but it will take its place alongside other grassroots organizational tools, such as telephones and direct mail. And just as Obama used an intensive (and expensive) television campaign to promote his candidacy, future candidates will use social networking as just one of the weapons in their campaign arsenal.

So I wouldn't be so quick to sound the death-knell of the party system, but this is still a good day for those of us who work with online communities. Our industry has taken a big step towards the media mainstream.

Still Struggling to Understand the Wisdom of Crowds

Recently TechCrunch offered a not-so-positive review of a new service called Piqqem that seeks to harness the wisdom of crowds:
Can Piqqem Use The Crowd To Pick Stocks? Don’t Bet On It.
Judging by the history of posts on this blog, this would be the point at which I decry Piqqem for failing to understand the factors that contribute to the wisdom of crowds. But, in fact, this time the service gets it: it asks users to predict stock futures, and they can't see other peoples' predictions until theirs are already in. Thus the service protects against the herding instinct that makes you (and me) more likely to favor a stock if we see that other people expect it to go up in price (otherwise known as the cumulative advantage).

Instead, this time it's TechCrunch that gets it wrong:

"If nothing else, Piqqem is certainly a good place to get ideas for stocks to invest in. But does it really have any chance of ever beating the market? Like any social investing site, its picks are only as good as the people who contribute to it. But beyond that, there is fatal flaw to this approach.

When it comes to stocks, the best prediction market out there is the stock market itself. It is the biggest prediction market out there, with millions of people predicting the future price of stocks every time they buy or sell shares. All of those predictions are aggregated together in the form of the price. To think that a few thousand, or even a few hundred thousand, people on Piqqem can do better is naive. And in fact, if you look at the prediction lines on Piqqem they already closely hue the actual stock price."

Where to start? The errors in this passage are almost too numerous to count:

  1. "The picks are only as good as the people who contribute to it." Actually not true at all -- and that's why it's the wisdom of a crowd, not the wisdom of a crowd of experts. If you really want to know how this works, read the book, but here's the short version: experts tend to make incorrect predictions because they're deeply entrenched in accepted ways of looking at a problem. That's why an aggregate of amateurs can make predictions that are actually better; as individuals they know nothing, but when you average their individual errors, you end up with an accurate consensus.
  2. The author (Erick Schoenfeld) conflates prediction markets with the wisdom of crowds. The book does talk about prediction markets, but it's not the same thing, for one primary reason: investors in a market are strongly influenced by what they see around them (which is where "irrational exuberance" and stock market crashes come from).
  3. Schoenfeld cites the fact that Piqqem's predictions are holding close to actual market performance as a criticism of the service -- but isn't that exactly what Piqqem is trying to do? If Piqqem's predictions are perfectly accurate, a historical graph of its predictions will exactly match the market's performance; it will simply predict that performance a little in advance.

Bottom line: Schoenfeld clearly has not read (or, possibly, understood) the book, and doesn't really get the idea behind Piqqem. Take his criticism with a grain of salt.

Monday, November 3, 2008

Second Verse: Same as the First?

Over on TechCrunch they've got a hand-wringing report on the apparent economics of Facebook:
Facebook May Be Growing Too Fast. And Hitting The Capital Markets Again.
Bottom line: Facebook has revenues of between $250 and $300 million per year, but it's burning through at least that much -- and possibly a lot more -- on operational and personnel expenses. So, amid all the accolades and congratulations, Facebook is still unable to justify its $15 billion valuation with actual profits.

Is the next step layoffs? Certainly they'd be in good company. Last I saw, tech sector layoffs in the wake of the credit crisis were at 19,000 and counting. For those of us who were around for the first Internet bubble, this has a familiar feel. First you have the heady days when a good idea is all you need to bring in a bunch of venture capital. Then you have explosive growth, punctuated by the occasional wild party with regrettable photographic and video footage circulated afterwards. Then you arrive at the hangover stage, when you're still burning money and your investors are losing patience. Then come the layoffs, followed (in most cases) by a complete shutdown.

It's a melancholy feeling, looking at that scenario playing out a second time. I didn't enjoy it the first time, and I doubt I'll enjoy it more now. It's easy to indulge in schadenfreude at the expense of the arrogant entrepreneurs at the head of these companies, but there are a lot of ordinary people -- people with kids, people just trying to make rent -- who end up getting hurt. I feel for them.

And again, the same lessons are to be learned this time as last. Namely this: "cool" is not a business plan. Facebook didn't start as a business, it started out as a cool idea some random guy built out in his dorm room. No matter how many members the service attracted, if they couldn't be monetized the idea would never make the shift from "cool" to "profitable." And if profitability isn't at the core of an idea from its very beginnings, is it all that surprising when profits prove elusive down the road?

Not everything needs to be profitable, of course. Some things should be built simply because they're cool, but in that case you're working on a hobby, not a business. And if you have a cool idea that so excites other people that they want to invest in it, there's no reason you should turn down the money. It's their money, and they can choose what to do with it. But take a look out there at the tech sector: for every ten popular sites and services that have not yet figured out a business plan, at least eight or nine never will. "Cool" is easy. I have cool ideas all the time. "Profitable," though, is hard, and ultimately that's what makes the difference between winners and losers.

If you want to build something cool, go for it. I encourage you in that dream. But if you want to build a business, keep working on your idea until coolness and profit go hand-in-hand. Otherwise, you're planning for failure.

Wednesday, October 29, 2008

The Web Travels in Deep Ruts

Recently I came across an older NY Times article on what is called "cumulative advantage":
Is Justin Timberlake a Product of Cumulative Advantage?
Cumulative advantage is the process by which people, when choosing something -- music to listen to, a product to buy, a movie to watch, a book to read -- are strongly influenced by the choices that other people have already made in the same space. In a nutshell, it is the process by which the rich get richer and the popular get even more so.
"...when people tend to like what other people like, differences in popularity are subject to what is called “cumulative advantage,” or the “rich get richer” effect. This means that if one object happens to be slightly more popular than another at just the right point, it will tend to become more popular still. As a result, even tiny, random fluctuations can blow up, generating potentially enormous long-run differences among even indistinguishable competitors — a phenomenon that is similar in some ways to the famous “butterfly effect” from chaos theory. Thus, if history were to be somehow rerun many times, seemingly identical universes with the same set of competitors and the same overall market tastes would quickly generate different winners: Madonna would have been popular in this world, but in some other version of history, she would be a nobody, and someone we have never heard of would be in her place."
This idea has all sorts of applications. First off, it makes market predictions nearly impossible. You can't predict which product will conquer all others because the intrinsic elements of that product -- its price, its quality, etc. -- are only partially responsible for its eventual success or failure. Take the iPod, for instance. It wasn't the first MP3 player. It arguably wasn't even the best when it first hit the market. But it was good enough for lots of people, and once it seemed like everyone had an iPod, Apple had the sort of thing that marketing money can't buy: the implicit endorsement of an entire population. When you're shopping for an MP3 player, what are you going to buy -- the Sandisk player that seems all right but which you don't know much about, or the iPod that lots of other people have bought before you (and it must be good, otherwise people wouldn't be buying it)? Odds are you'll make the choice that everyone else is making, thereby adding your weight to the iPod's cumulative advantage.

Clearly this is a serious problem for anyone trying to enter an established market, since you have to overcome the cumulative advantage of the rivals who are already there. That's obvious. But I think there's an interesting take on this question for website design: namely that cumulative advantage can also influence your traffic. I'm not just referring to Google's PageRank, though that's certainly a factor; Google weights more heavily sites that are referred to from other sites, so search will give a clear (cumulative) advantage to a site that's already out there, gathering links. But I think it may go deeper than this.

Consider a community-oriented site. Let's say it has articles, news posts, maybe a blog, maybe a forum, maybe even a wiki. Some of that content reflects traffic, some of it doesn't. Forums clearly display where the most posts are; they also often display elsewhere on the site what the most recent posts are. Blogs display traffic by way of comments. Wikis display traffic by the weight and detail of articles. All of these send a message to a site's visitors: this is where other people have gone. So, when you're on the site for the first time and wondering what to click on, where are you likely to go? To the (perhaps excellent) article or news post that (for all you know) has never been read before, or to the parts of the site that you can tell are attracting lots of attention? I think I already know.

It would be great to test this. I'm envisioning an A/B test in which some element of site content -- let's say news -- is published both with and without traffic figures (maybe a little feature below the news title that says, "Article read X times"). I'm willing to bet that showing readers where the traffic before them has gone will strongly influence them to head in that same direction themselves. Of course, this would mean a slow and lingering death for any content branded with the "Article read 0 times" mark of shame. You win some, and you lose some.

Bottom line takeaway: popularity and quality are rarely the same thing, and most likely that functions on the micro level as well as the macro. So don't take it too hard if your best stuff is getting next to no traffic; it may be that something else just happened to gain a cumulative advantage.

Friday, October 24, 2008

Newspaper 2.0

Via Techdirt, I came across a nice story of a Belgian newspaper that opened the door to the community of its readers. The writing and editorial staff were meeting to plan their coverage of the banking crisis, and one staff member live-blogged the meeting -- in effect inviting the newspaper website's readers into the room. The result was a lively back-and-forth, in which readers suggested story angles and submitted leads, while the newspaper staff posted updates as news broke.

It's an inspiring story. No doubt you've seen the many, many stories about how newspapers are unsure of what to do with the Internet, let alone social networks; too often those stories break down along the lines of newspaper writers complaining that Google is somehow stealing their content, or that the federal government should subsidize print newspapers in order to preserve the social function that they serve. Rarely, as here, do you see a story of a newspaper actively engaging with the community formed by its readers. There's a paternalistic tone to many of these stories, whereby the newspaper reporters are the keepers of knowledge and we, on the reader side, are mere passive recipients. But a newspaper's readership comprises a broad swath of society, and many of those readers have deep insights or unique perspectives that would enrich the coverage that a newspaper can provide. First, though, the newspaper staff has to be willing to listen.

Wednesday, October 22, 2008

Online Community: Still a Sausage Factory?

This morning the NY Times reports on a study released by the University of Southern California's Center for the Digital Future, in which men and women were polled about their feelings about online connections vs. real-world connections. According to the poll's findings, 60.3% of men value their online connections as highly as their offline connections, as opposed to just 47% of women. Men are also three times as likely to say that commitment to their online connections forces them to cut back on time spent with offline associates -- 21.5% of men vs. 7.3% of women.

Here's a link to the original press release (PDF format).

At first blush, this falls into the category of studies that are like cotton candy: they taste good at first, but ultimately are unsatisfying. How many men and women were polled? What was the age range, and how affluent were they? The numbers don't mean much if you can't place them in context.

A bigger problem with the study, though, is that it's being presented as an emerging trend:
"Visiting online communities and social networking sites is still an evolving experience for most Internet users, but we're already seeing gender differences of this type in online use," said Jeffrey I. Cole, director of the Center for the Digital Future. "These experiences will be major factors in social communication as relationships over the Internet increase."

Center researchers also report emerging gender differences in web surfing frequency and online reading habits. Findings from the Center's 2008 Digital Future Project reveal that men are more likely than women to surf the web "at least daily" (53.5 to 40.5 percent).
To which I can only say, where have these guys been? I can remember a day when online communities were for all intents and purposes 100% male. A gaming clan I used to belong to had a single woman among its 50-odd members, and that fact made us notorious among rival clans. It used to be that, if you met someone online who claimed to be a woman, acted like a woman, and uploaded pictures of herself showing that she was a woman, you were still pretty sure that "she" was actually a dude.

Interpretation always depends on your choice of baseline. If you posit -- as the authors of this study apparently did -- some mythical starting point in which men and women were perfectly equal in their likelihood to form online connections, then 60% to 47% looks like a worrying trend: we're throwing a party but no one's on the dance floor and the women are already starting to leave. If, however, your baseline is the actual history of online communities in this country, these numbers start to look a little different. 60% to 47% still looks like an emerging trend, but the trend line is moving in the opposite direction: far more women today are actively socializing online than in the past.

So, yes -- online communities are still numerically dominated by men. But, if this study has anything to teach us, it's that women are starting to show up in real numbers. Let's get this party started.

Saturday, October 18, 2008

Wondering How Twitter Will Make Money? You're Stupid!

This morning's moment of inanity comes courtesy of, in which they interview one of the venture capitalists investing in Twitter.
Twitter to Get Down to Business in 2009, Investors Say
To all of us who wonder how a micro-blogging service is ever going to make money, one of those investors has a singularly nuanced message: "Shut up, stupid face!"
“It’s like the stupidest question in the world: How’s Twitter going to make money?," said Union Square Ventures’ Fred Wilson, another investor. "It’s like 'How was Google going to make money?'"
And he's right, because of course there's no difference at all between Google and Twitter. One is a search engine that attracts people who are deliberately looking for something -- and often they're looking for something to buy -- while the other is a communication service that has no obvious merchandising or advertising tie-in. Ummm, wait a minute...

If you want to take a moment to make sure that Union Square Ventures' Fred Wilson isn't managing any of your money, go ahead -- I'll wait.

Back? OK. Wilson's confidence, it turns out, isn't based on anything that Twitter is doing. Instead he's looking at what other companies are doing -- or trying to do -- with Twitter.
Wilson said there are plenty of possibilities for building a business on Twitter, not only for themselves but for third party developers, like Twitterific, which are already supporting advertising in their apps. The recently acquired search engine, Summize, might be a good place to start.

“There’s a lot of commercial activity happening today on Twitter, and what Twitter’s going to do is figure out how to harness that commercial activity and make it better and stronger,” said Wilson.
Got that? If you're wondering about Twitter's future, stop. They're thinking about it. Brilliance is sure to ensue.

Of course this is little more than whistling in the wind, which is understandable in the middle of a recession (which until a few days ago looked like it might turn into a depression). Wilson's only notable for being unusually bad at disguising his wind-whistling. And while Twitter's intellectual elite may, in fact, figure out the perfect business plan for a service that depends entirely on being unobtrusive and ultimately not all that engaging, you and I are perfectly justified in wondering how they're going to do it. The fact that Google -- a company founded by different people, in a different market segment, at a different time, and with a different purpose -- managed to find a way to make money does not exactly fill me with confidence for Twitter's future.

Hell, they'll do well if they can just find a way to keep their servers from crashing.

Monday, September 29, 2008

Japanese Too Shy for Social Networks

There's an interesting article this week on Technology Review, which talks about how shyness is proving an obstacle in Japan to the adaption of western-style social networks:
Shyness in Japan's online social scene challenges international networking sites
The problem, in a nutshell, is that Japanese society values privacy and a certain social reticence, and Japanese web surfers are bringing these qualities online with them. Rather than embracing online communities as a chance to show off in a way that would seem unnatural or even antisocial offline, they are careful not to expose themselves too much online, and generally prefer invite-only communities that allow them to limit contact to people they already know.

This is an excellent example of something I've seen a lot lately: people taking their offline personas with them when they go online. It used to be that online communities were thought of as something akin to a massive costume party: "On the Internet," the comic read, "no one knows that you're a dog." But online interaction is too pervasive these days for this disjunction to endure. In an age when email and instant messaging has almost taken over for the telephone as a preferred form of social interaction (it certainly has for my mother), it now seems perfectly reasonable that you'll be the same person online as you are offline -- and your friends in both spheres will be the same. Online community, in short, is an extension of offline community.

There are exceptions, of course. Online dating sites, for instance, are full of guys pretending to be someone else. But I believe we're in the first stage of Internet routinization, by which online interaction will eventually become so mundane that we'll eventually stop caring about the distinction between online and offline.

On the Internet, in other words, everyone will know you're a dog, because you won't think to hide it from them.

Tuesday, September 23, 2008

To Moderate Or Not To Moderate?

Via TechCrunch comes word of the NotCot network, which wants to combine user-generated content with editorial control:

The NotCot Network: A Study in Structured User Generated Content

Their model is simple enough: get users to upload content, but funnel that content through editors and moderators who look it over, assess the quality (and legality), and "ensure the quality of the content." This is roughly equivalent to what we were doing on my previous gig, where we paid moderators to keep an eye on user actions. So it's from the basis of no little experience that I can say that I know what will happen here.

First, this model is not going to scale easily. The NotCot network will fail unless they have a very active community, with lots of people uploading stuff. Moderating a forum post is pretty easy; moderating a video submission is more time-consuming, particularly if the moderator is responsible for checking for copyright violations. NotCot is going to need to keep a lot of people on staff to handle the content, and those people will need to be paid for their time.

Second, they're going to run into serious challenges with international traffic. First, because foreign-language submissions pose a new set of problems (is that song in the background under copyright? If so, who owns it and how do you check the rights?). But beyond that, there's a time challenge: if your moderators work in North America on weekdays during normal business hours, what happens when someone posts a video from Europe just when everyone in the States is headed home? One thing I learned for certain: users hate it when they upload content and have to wait to see it posted. If it's a predictable wait of several hours, they get really upset. NotCot will probably need to hire second-shift workers, and might even need to find someone to police foreign-language markets (see above about not scaling easily).

Third, it's a lot easier to say that you will "ensure the quality of the content," but when you're actually out there in the trenches, what counts for quality? The only objective standard of "quality" is popularity among users, but that standard can't be applied to the pre-approval of content. Ultimately all you'll end up doing is ensuring that the content isn't illegal, obscene, or pornographic. The "quality" bar will be tossed out the window almost immediately, just by the demands of the job.

The biggest risk here for NotCot? That their editorial review will prove too intrusive. You're already asking a lot of your users when you tell them to capture video, edit it, and upload it to your servers. Asking them to also sit through a submission process that benefits them in no way is a dangerous second step. If that second step isn't almost perfectly painless, what's to stop them from going to YouTube and uploading the video over there instead?

My first job on the Internet was with Our business plan, back in those days, was to improve on Yahoo: we'd also provide an Internet guide, but ours would be composed exclusively of editor-vetted, quality sites. In the end, our visitors didn't really care. Yahoo made billions by including everybody; we ensured quality and went out of business, because the quality we provided wasn't of sufficient value. NotCot will need to find a way to do what we did better.

Monday, September 22, 2008

Social Networking Bigger Than Porn?

Over the weekend I came across an eye-catching headline: 
The article refers to recent research of Internet search activity that shows social networking eclipsing porn as the #1 thing people are looking for. It used to be that porn accounted for 20% of all activity online, but now this study suggests that it has fallen to 10%, and instead people are now searching for ways to connect with other people.

That lends itself to some heart-warming conclusions about people gravitating towards true friendship and away from empty connections, but there are likely a few things going on here. First, as the article points out, the decline in porn activity is deceptive: a drop from 20% a decade ago to 10% today may actually represent an increase in real numbers, given the overall growth of Internet usage in that period. Porn is well-known as an early adopter phenomenon; if you like porn, and you find out about a new, efficient delivery device, there's a good chance you'll buy a computer and a modem and check it out. For that reason, porn hounds were probably disproportionately represented on the early Internet.

Second, the author's  conclusion that young people today are too busy socializing to consume porn is probably a false dichotomy. Young people today grew up interacting with their friends via electronic media; ten years ago my niece was already busy after school using instant messaging to chat with her real-world friends. Now, as they enter their  twenties, they're carrying the same expectations onto the web. It's not that they're coming online and looking for something to do, then choosing between porn or social networking. Rather they're coming online with a predetermined idea of what to do, and social networking just happens to be that activity. 

Still, it's nice to see something taking precedence over porn in the online sphere. That's been the dirty little secret of the online marketplace for more than a decade now. It's high time that porn take its rightful place along the Internet's margins.

You Are What You Drink - Which Makes Me Schizophrenic

By way of Techcrunch, I discovered a new social networking site this morning:

The basic premise of Cocktailmatch is that you are what you drink, and that you like to associate with people who drink the same thing. Wine drinkers, in short,  would rather not hang out with whiskey drinkers, and guys who do tequila shots are most definitely not interested in those who like pina coladas (and getting caught in the rain). 

Then there's me: I drink wine at home, sometimes order beer with spicy food in a restaurant, and enjoy mojitos on special occasions. My friends and associates include wine snobs, beer dudes, and mixed-drink swillers. Apparently I'm the exception to Cocktailmatch's rule.

Or maybe it's simply self-selecting: perhaps the desired demographic for Cocktailmatch consists of those people who identify strongly with one, and only one, type of alcohol. In which case, those people finally have a website devoted exclusively to them. For the rest of us, Cocktailmatch seems like nothing more than an odd twist on the social networking scene.

Thursday, September 18, 2008

The Age of the Weak Link

A while ago a fascinating article by Clive Thompson ran in the New York Times, on the phenomenon of Twitter:
I'm So Totally, Digitally Close To You
In it, Thompson confronts the problem facing Twitter and many other Internet startups: at first blush, their services seem stupid. Blogging within a 140-character limit? That seems like nothing more than a recipe for trivia, a process of mind-numbing navel-gazing that would certainly be an exercise in tedium.

I remember my reaction when I first heard of Twitter: it seemed completely pointless. It reminded me of a German art film I once saw, mostly by mistake. The main character got on a bus, and during a stopover we in the audience were treated to a long, long scene in which the bus driver peeled his hard-boiled egg. "I bought a ticket so I could watch this?" I asked myself at the time. That's how Twitter seemed to me: a universe of people sending out status updates as they slowly peeled their eggs. Why should I care?

It turns out, though, that pretty much everyone has that reaction, until they've been using the service for a time and something starts to dawn on them: micro-blogging provides a special form of intimacy.
"... as the days went by, something changed. Haley discovered that he was beginning to sense the rhythms of his friends’ lives in a way he never had before. When one friend got sick with a virulent fever, he could tell by her Twitter updates when she was getting worse and the instant she finally turned the corner. He could see when friends were heading into hellish days at work or when they’d scored a big success. Even the daily catalog of sandwiches became oddly mesmerizing, a sort of metronomic click that he grew accustomed to seeing pop up in the middle of each day. This is the paradox of ambient awareness. Each little update — each individual bit of social information — is insignificant on its own, even supremely mundane. But taken together, over time, the little snippets coalesce into a surprisingly sophisticated portrait of your friends’ and family members’ lives, like thousands of dots making a pointillist painting."
Turns out there's a term for this sort of thing: it's called "ambient awareness." Look around you, in whatever room you're in right now. If you're in the office, maybe you can hear someone down the hall, talking on the phone. If you're at home, maybe your dog is scratching itself, or you can hear cars out on the street. Those are all part of your environment; you don't pay attention to them, but you'd feel their lack if they weren't there. If you're in the same room as someone, your ambient awareness includes little facts about their current situation: what they're doing, how they're feeling (which you pick up from their body posture or facial expression), and so on. If you're in a relationship, you probably remember times when the two of you were together but not actually interacting:
"Social scientists ... call it “ambient awareness.” It is, they say, very much like being physically near someone and picking up on his mood through the little things he does — body language, sighs, stray comments — out of the corner of your eye."
In short, the Internet has developed a new means of maintaining social connections. No matter how far away you are from your friends and loved ones, you can -- through social media -- maintain a form of connection that used to require physical proximity. This is not, however, to say that Web 2.0 allows us to maintain an infinite number of close friendships. Rather, these media function best as extensions of the offline world:
"Many maintained that their circle of true intimates, their very close friends and family, had not become bigger. Constant online contact had made those ties immeasurably richer, but it hadn’t actually increased the number of them; deep relationships are still predicated on face time, and there are only so many hours in the day for that."
This backs up something I've suspected for a long time: that online social networks function best, not when they try to create a social world that exists entirely in virtual space, but as an extension and backup of face-to-face connections that existed prior to the creation of the online service. When you find something cool online, who do you forward it to? Your friends, and when they adopt the same service a social connection is expanded, not created. Any company that seeks, for liability reasons, to limit offline connections between online friends is clearly swimming upstream.

There is a place, though, for old-school virtual relationships: they fall under the heading of "weak ties," and they can be very useful:
"But where their sociality had truly exploded was in their 'weak ties' -- loose acquaintances, people they knew less well. It might be someone they met at a conference, or someone from high school who recently “friended” them on Facebook, or somebody from last year’s holiday party. In their pre-Internet lives, these sorts of acquaintances would have quickly faded from their attention. But when one of these far-flung people suddenly posts a personal note to your feed, it is essentially a reminder that they exist. ... Sociologists have long found that “weak ties” greatly expand your ability to solve problems. For example, if you’re looking for a job and ask your friends, they won’t be much help; they’re too similar to you, and thus probably won’t have any leads that you don’t already have yourself. Remote acquaintances will be much more useful, because they’re farther afield, yet still socially intimate enough to want to help you out."
Which is, of course, why services like LinkedIn are successful: they are founded on the very notion of weak ties, and try to make those ties professionally useful.

There are many lessons to be learned here. I would suggest that anyone who builds websites for a living should copy the article locally and re-read it from time to time. Just a few thoughts that occur to me now:

First, this scenario poses a tremendous barrier to entry for new social networking sites. If the value of a service like Twitter is not apparent until after you've been using it for a while, it's going to be very difficult to convince new users to come by and give it a shot. Sounds like Twitter benefited greatly from word-of-mouth marketing from a few influential early-adopters, but it also sounds like the service could easily have disappeared without a trace. There was no inevitability to Twitter's success, and it will be extremely difficult for anyone to follow in their footsteps.

Second, I love the paradox of Twitter's creation: if you don't know how good it is until after you've been using it for a while, then logically no one who was in on the initial development of the service new what they were building. They might have believed firmly that they knew what they were doing, but they didn't know anything until after it was up and running and they were able to experience it along with everyone else. In short, Twitter's founders got very, very lucky. No doubt we're all in for a series of articles profiling these "visionaries," and there's also a good chance that one or more of them will, with great fanfare, move on to a new startup that will be like Twitter, only better. And I can predict it now: those startups will vanish from the face of the earth, because Twitter's founders didn't know what they were doing when they built Twitter, and they won't know what they're doing the next time out. Lightning doesn't strike twice in the same spot.

I don't mean to pick on Twitter. I think this is true of any community-oriented site or service: you don't know what you have until people start to use it. Inevitably they will use it in ways you didn't expect or intend. In a nutshell, the v1 of any community site is likely to miss the mark. So the only thing you can do is plan from Day One for v2: build into your schedule and budget the expectation that you'll need to tear everything down and start over, three to six months after launch.

This is, of course, a huge challenge. It's hard enough to get one site off the ground, let alone build with the assumption that you'll get it wrong and will need to correct it later. But, naturally, "get it wrong" is not the right phrase to use if you truly embrace the idea that the community will define how your site is to be used. Better to think of it in terms of a provisional launch: first you launch the platform, then you figure out what the service should look like through iterative testing and measurement. Which is, of course, how products like the iPod were designed: first Apple launches them, then they release updates that refine the specs and feature set in response to customer demand. If it's good enough for Steve Jobs, shouldn't it be good enough for you?

Friday, September 5, 2008

I Don't Get It

I like to think of myself as a pretty web-savvy guy. I'm out there, surfing the Internets, shooting the tubes; I understand what the whole Web 2.0 thing is about. Except that sometimes I feel like I don't.

On Webware recently was a (fairly positive) profile of a new service called Timelope. Timelope allows you to publish your browser history and browse the history of other users. That's what it does. That's all it does, and I don't get it.

Put simply, I don't grasp the appeal of cracking open a single browser history and seeing what it contains. It's a little creepy, frankly; it's like you chose a random person on the street and followed them wherever they went -- to the post office, to the drugstore, and then to the coffee shop where you watched them sip a tall iced latte.

The essence of Web 2.0 is sharing, but not everything is worth being shared. Right this moment I've got a collection of little scraps of paper in my left rear pocket. I could scan those pieces of paper and put them online, where others could view them or possibly scan random pieces of paper themselves. But what's the point? It's garbage that's mostly meaningless even to me. That's Timelope: a collection of data points that are so personal as to be trivial.

It took me a while to figure this out, but now I have it: Timelope pretends to Web 2.0-savvy sharing, but it's actually the complete opposite of that. Digg represents web sharing: the cumulative weight of individual opinion pushes the most compelling stories to the top. YouTube represent web sharing: I can search by topic and judge pretty quickly by the star rating which videos are worth loading. These services take one of the weakesses of the web -- its overwhelming number of voices and sources -- and turn that into a strength. Timelope, by contrast, is personal, and by being person it remains trivial.

Of course, maybe Timelope will go off to become the next big thing, and I'll be the dumbass waving his bony fist in the air and complaining about kids today. Most likely, though, this will go down as just one more bad idea in the days before the second Internet bubble.

Thursday, September 4, 2008

That's What I Thought

A post today on TechCrunch points out that, while online ad spending overall continues to grow at a very healthy 20% rate, more and more of that is going into search advertising, rather than banner ads and other ways to reach customers.

That's not much of a surprise. In a recession, companies are being careful with their money, and search has the great advantage of being an arena in which you know every visitor is actively looking for something (and often they're looking for something to buy). There's no reason not to expect search to dominate online ad spends for a long, long time (and that sound you hear is Google's shareholders rolling back and forth on big piles of money).

The optimists among us will suggest that the real issue here is the growing online ad market, and suggest that an improving economy will bring more dollars to display ads and others. Then the tide may rise high enough to lift all the boats. Until then, sites that hope to turn a profit based on display advertising will probably need to hold out for the long term.

Friday, August 29, 2008

Have Your Cake and Eat It?

Via Webware, I heard about Cake, a company that seeks to crowdsource stock trading:

Cake CEO Steve Carpenter believes that of the approximately $100 billion that consumers pay for stock management services, "a lot is wasted." He's built a service that identifies the stock picks from the best performing members in his community, and lets other users take advantage of their investing skills. Importantly, Cake doesn't show you just which stocks have done well among its users. That's old information. Rather, Cake identifies the users that are doing well in their portfolios and highlights their transactions, as they happen, for other users. One of the byproducts of that is the Cake Take, a rating service "akin to Morningstar," Carpenter says. But it's more predictive, more timely, and a lot less expensive to run, since it's algorithmic and not based on the opinion of paid analysts.

While the idea of cutting out the brokers and just letting the wisdom of the crowd guide you in your stock purchases does have a lot of appeal, this scenario raises certain issues:
  • This is not a true application of the wisdom of the crowds, as defined in the book of the same name. As I've railed in this blog before, the wisdom of the crowds emerges only under certain conditions: it must involve a large number of people voting on a topic about which they are not highly educated/indoctrinated in a conventional way of looking at things, and they should have no contact with one another in doing so (to prevent them from exerting influence on one another -- the crowd can only be wise when it is composed of individuals, rather than members of a group). Cake's setup encourages you to follow a few highly-successful traders (rather than a whole crowd of them), and there is no reason to think those traders aren't watching each other and following the same leads.
  • The whole enterprise is based on one article of faith: that top traders know what they're doing. It seems to me equally likely -- more likely, actually -- that these guys on top just happen to be on a lucky streak, and there's no more "wisdom" to be gained than you'd get by going to Vegas and asking some random old lady for tips on how to play the slots. (The proof is in the pudding: track the "top traders" on Cake over time, a year or more. If the same guys stay on top, they know what they're doing. If they come and go, it's all just another form of gambling.)

In short, it's not a crowd, and it's not likely to be wise.

Too often on Wall Street, it's the suckers who show up late who supply the money that allows the guys who got in early to cash out before the whole thing collapses. I don't doubt that Cake is entirely sincere in its crowdsourcing efforts, but I suspect that their product is likely to appeal to suckers destined to arrive when the party is over.

Yahoo What?

This news story caught my eye this morning:

File this one under the "ouch" category. Yahoo is shutting down its social-networking experiment, Yahoo Mash, after only a year in business.


Mash didn't really offer anything new, other than the fact that instead of inviting friends you created profiles for them and then invited them to customize and change them. You could also add "modules," a sort of rudimentary version of social-network apps. It was designed as a quirky, cute step up from Yahoo 360, the social network that Yahoo had based off its millions of pre-existing user accounts; if Yahoo 360 was analogous to AOL profiles, Mash was more like Facebook.

To which my first reply was: "Yahoo had a service called 'Mash?'"

And my second reply was: "Yahoo has a service called 'Yahoo 360?'"

Understand, I'm a Yahoo user from way back. I remember when Yahoo was the cool new kid on the block, showing us all what to do with Internet indexes. In the years leading up to the first dot-com bubble I worked for a company ( whose business plan was to be the thinking man's Yahoo. I've had a Yahoo email account for years and years, and I've spent a good number of hours browing through threads in this or that Yahoo Group. I have a My Yahoo page, which is the default page for my browser at home. I know Yahoo, I spend time on Yahoo, and yet I had no idea that Mash and Yahoo 360 even existed.

There are a couple takeaways here.

First, the hallowed me-too play doesn't work any better for the big boys than it does for the rest of us; if all you can say about your service is "it's kind of like Facebook," then you should go back to the drawing board. If your service is like Facebook but isn't better than Facebook, you'll fail for the very simple reason that people who want something like Facebook have already found what they're looking for in Facebook.

Second, get the friggin' word out. Yahoo is a profitable business and has money to spend on things. Yahoo owns a banner advertising business. Yahoo has a tremendous presence online. And yet somehow I -- a person who spends his entire day online -- never heard about Mash or Yahoo 360, even though I hit the Yahoo servers two or three times a day. That doesn't speak well for their advertising efforts. Assuming that they had an advertising effort.

If you want to know why Yahoo has been struggling of late, maybe this gives some indication. Build a service, don't tell anyone about it, and then kill it a year later when it fails to magically attract support through some sort of social osmosis. That's a lousy excuse for a business plan.