This post: http://www.businessinsider.com/facebook-and-twitter-will-always-be-crappy-businesses-2010-2 made the obligatory electronic rounds at Kosmix today. The high-level gist of the post is that Facebook and Twitter are uncontrolled Wild West environments that scare the bejesus out of ivory tower brand managers and – gasp! – even worse, ad agencies.
The post is also peppered with some cool history from Tripod.com, which Bo founded (Respect!) and ran in the 90s and how difficult it was to sell advertising on Tripod because of the fact that it was all user content without brand controls. This was all likely true back then, and community sites of all stripes certainly have challenges selling advertising.
But the overall argument is flaky at best and intellectually lazy at worst.
First of all, this ain’t the 90s. While brand managers and agency types continue to be “scared”, they’ve been brought to the Internet kicking and screaming. Hell, some of Facebook’s biggest advertisers are the same folks who run the biggest brands in the world (Procter and Gamble being the poster child here). Yes, FB’s *largest* advertiser might well be Zynga, which in turn derives its dollars from DR advertising types or other questionable marketers. But the larger point remains; brands and agencies are slowly getting more comfortable with social media, and the overall trend is undeniable in this direction. Brands and agencies recognize that they MUST engage with social media users; this is the whole point of Federated Media’s strategy.
Oh, and what to speak of Facebook’s rumored 700 million dollar plus topline number? You think Bo’s EverydayHealth makes 700 million topline? FAR FROM IT. Ask anyone in the industry in the know.
Secondly, yes, within certain verticals social media has an intractable problem. Word on the street is that DailyStrength, a Web 2.0 health darling, had to sell itself for a song because big pharma would never advertise on a UGC site (btw: I was formerly Product Manager for the second largest health site on the web so I’m not talking out of my a** here). An informational site like ours, or EverydayHealth in the case of Bo’s current venture, has an easier time making a brand sale.
But turning a data point like this into a blanket indictment of social media is simply naive. Social media sites have lower content production costs, more pageviews, lower CPMs but (potentially) higher total revenues.
Lastly, Bo tries to tie together – unsuccessfully – the connection between search and social media and how VCs have been fooled by the success of the first into investing heavily in the second. Again, this is irrelevant. Search and social media are simply different. Yes, social media will never sell at the CPMs as the kinds we command (at RightHealth and Kosmix, to speak nothing of what Google and Bing and are seeing) but THEY DONT NEED TO. They need to make thin margins against *their* cost of doing business at the volume of billions of impressions. A great business and one that I’d get behind any day.
The reality here is that the sites that are truly screwed are the small/medium social media sites – like DailyStrength – that can’t make the brand sale (yet) and lack the size and heft of Facebook and Twitter or even Ning. But Bo fails to make that point explicit and goes after, specifically, Facebook and Twitter.
Which, to me, makes no sense at all.
I’m going to pull an anti-Palin and play my elitist card. Where does Apple get off selling a device that I dropped 400 bucks on (and others spent more) at WAL-MART??
And to add insult to injury, Apple wants to price it at 99 dollars. Good Lord. Nothing says snobbery and Apple cultishness like a device you can buy after saving extra-extra-always-low-prices on Crocs.
I might give my membership card back.
I love TechMeme as much as the next Silicon Valley jerk, but seriously. There’s a reason people refer to us as the echo chamber. I’m amazed that people are getting twisted up over the guy hiring one editor to remove spurious stories or help manually improve relevance signals.
BIG DEAL. So what?
Umm, there’s a lot of folks who think that Wikipedia is being boosted by hand by Google. I don’t know if its true but Wiki’s increasing coverage via Google makes sense when viewed that way. Google also crawls a whitelist of sites much faster than the average Joe-Blow site (WordPress.com gets crawled very very frequently, for example).
ISN’T THAT A GLARING EXAMPLE OF BIAS??
Get over it. There’s no automated brain behind this thing.
The New York Times came out with a story about microblogging in the enterprise. It makes references to Yammer, Present.ly, and of course, Twitter. Most of the interviewees are companies that have adopted the services – Rubicon Project was the one that stood out for me.
As a few of you know, I’m a recent convert to Twitter and am slowly getting wrapped up in the missionary evangelical zeal that I mocked for so many months. When Yammer went live, I tried to get the good folks at Kosmix involved and so far the “launch” has been a miserable failure. A few updates trickle in here and there. No one has been instantly “hooked” onto the service. Several folks have come by my desk and made it a point to roll their eyes (these are the crusties who still don’t use Twitter, so we can ignore those data points) at me.
Why, I wonder, would a service like Yammer draw glowing reviews from Rubicon and fall flat at Kosmix? Here are some details that I could come up with:
- I have been unable to articulate a clear value prop to folks on our end. As a Twitter user, I “know” that Yammer will be useful to us but I’m unable to pinpoint exactly why and am unable to sell it.
- The service spread virally through our office and lots of folks signed up, then posted a message saying “What the hell is this?” and then bailed.
- Kosmix is 65 people with almost everyone located onsite. To top that, we’re a VERY instant message heavy culture, more so than the 2-3 other places I’ve worked at. People dont perceive the need for an additional IMish service.
- We’re horribly open door and the joint resembles a fish market right around 1130 am every day. There are about four hallway conversations occurring at high pitch and ping pong balls flying around as shots go awry. We know too much about other departments, not too little. The founders are very accessible. We eat lunch together every Friday. Getting updated isn’t usually a burning problem.
- We’re small. I can see Yammer being more valuable at the 100+ level with lots of sales people that are remote and see engineers once in three months (my previous company).
- We’re NOT a Twitter heavy culture. There around 7 people who are heavy Twitter users. More than a few others share a bewilderment at the Valley’s obsession with Twitter (you know who you are).
Anand (our co-founder) just cranked out a cool post for GigaOm that attempts to defy the doom and gloom pervading the tech blogosphere. Sun cuts 6000. Yahoo! cuts 10%. Mahalo spruced some ungodly percentage of folks and Seesmic hits 33% of their workforce.
Needless to say, I’m happy to see Kosmix continue down a path of prudent and cautious growth – I mean, we’re treating things as business as usual, working hard, playing ping pong and being ultra-lovable web geeks. What has changed is that since no one is looking at their stock portfolios on Google Finance anymore, productivity has probably taken a slight uptick – all in all, not a bad state of affairs.
Read the post if you’ve got five minutes. I didn’t know some of the stuff around VC firms carrying zombies around on their portfolios and that was pretty educational.
Also, stay tuned and keep an eye on Kosmix.com. We think you’ll like what we have to show over the next few weeks.
Great piece in The WSJ on Facebook’s newish ad format. http://online.wsj.com/article/SB122637098500816351.html?mod=googlenews_wsj is where you can find it. One piece of information in the article sounds odd. The writer quotes Jeremiah Owyang and claims that the banner ads on the site get less than 1% CTR.
Umm. And the problem is? I’d be willing to bet my paycheck on the fact that the CTR is *far* far worse than 1%. People would be paying more than 7 cent CPM if the CTR were 1%.
My addiction to Twitter as a daily – even hourly – “utility” continues to grow. Even though I pale in comparison to other VentureBeat-ers and even other Kosmix-ers in terms of usage, I’ve now hit 83 followees.
It is already hard to separate good signal from better signal and the minor amount of stupid noise (my dog took a shit, etc.) amongst my venerated followees. The iPhone Twinkle client by Tapulous tries to do a good job but is slower than a mule on some serious chronic. The website’s okay, I guess, but its hard to justify a visit to it more than 3-4 times a day. tWhirl is fine, too, but I dont know if they have a Mac client and even if so…mmm, the unsteady stream of tweets is simply shoved in my face, much like Outlook.
What’s a mildly bored fella without any real-life problems to do?? Is there a way to batch tweets? What about other UI paradigms that make all the tweets more digestible?