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 usually an SAI fan (and always thought Digg was overhyped for what they’d built), but this “analysis” of Digg’s business is exceedingly shoddy (original: http://www.alleyinsider.com/2008/12/diggs-miserable-business)
Here is a point-by-point rebuttal:
- Why is Digg’s burn 14 million dollars? Any good Silicon Valley estimate for a 4 year old company will tell you that the average employee costs close to 200k. At 60ish employees (guessing), Digg is mostly burning on salary and G&A with the remainder going to site operations. 22 million users and a decent amount of data moved around, that shit ain’t free.
- The post proves DIDDLY-SQUAT about Microsoft’s ad targeting. AFAI can tell, they took one screenshot of a run-of-site (untargeted ad) and called it out as an “indictment” of Microsoft. Clearly the writer has never sold ads or worked with ad traffickers. I’m not saying MS is awesome but I am saying that the post has ZERO INFORMATION one way or the other.
- Out of the 22 million visits via Quantcast, only 11 million are US based. The other 11 million may as well be nonexistent because ad marketplaces in other countries are underdeveloped or nonexistent. Worse, US advertisers frequently limit their ads to run on US traffic only, thereby capping the ad sellthrough for Digg in spite of high traffic. Facebook faces a similar problem in its display ad inventory vis a vis international users.
So – can someone make some sort of substantive argument?
Update: TC posted a pretty decent take on the issue. Most of Digg’s burn is probably engineers that are working on a self-serve ad product. I for one can believe that this might be interesting (certainly more interesting than Facebook’s sorry excuse for a self-serve ad product).
Not that my opinion matters…but when did that ever stop me from opening my voluminous trap? Okay, when Chrome came out and won me over with its slick UI, its Road Runner-esque speed and its general awesomeness, I was worried that Google would let it languish for months on end with a 0.xx version and no real improvements.
Thank God that’s not the case. Chrome 1.0 just came out, and one of these days us Mac users will have one too 🙂
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).
I mean, come on. What a great way to dig yourself into a hole by nicknaming your device “DREAM”. I’ve been following along on all the details as best as possible and am excited to see that Android will have a home in a few weeks.
But if there is ONE thing that HTC knows how to do (HTC, btw, stands for the cartoonish name High Tech Corporation), it is building devices that look and act like they were designed and manufactured by chumps. I owned an HTC device that ran Windows Mobile a few months ago. It was AWFUl. The slider is hard to operate. The keys are a bitch to operate. When you try to type with the slider out, you’re always afraid that the device is going to fall out of your hands. The fat slider, the four stupid buttons at the bottom, the standard T-Mobile co-branding at the top.
Sounds awful lot like business as usual, no? Where is the iPhone-like hardware disruption? Check out these stealth photos for yourself: http://www.engadget.com/photos/htcs-android-driven-dream-revealed-in-glorious-spy-photos/1008301/
Like every other Valley Apple fan boy, I’ve been spending lots of time downloading, discussing and evangelizing iPhone apps.
My favorite app right now, bar none, is Shazam. I cannot believe that the list of fawning servile fans of this app is so small, but let me be the first in line. Not only is the app usable and ridiculously useful, IMHO it points to something the music industry should have been working on for a long time.
What is Shazam? its an app that you install on your cellphone and run whenever you come across a track that you can’t recognize (which happens ALL the time to most of us at the gym, the car radio, and if you are a major Kenny G fan, in elevators). Once the app “listens” to a few seconds of the song, it sends the audio fingerprint up to the server and figures out the actual song and sends it down to the device. You can then proceed to purchase the track (at least on the iPhone you can) or watch a YouTube video.
This is great, but it is rendered more powerful by the iTunes model of music. Several commentators smarter than me have commented on how the album – a collection of songs sold as a whole – is still a valid form of music retail.
Based upon my personal behavior over the last 2 years, I call bullshit.
Purchasing music now is like purchasing a stick of gum while standing in line at Safeway. Or the National Enquirer if you want to be trashy about it. In other words, music purchases are starting to be impulse buys. You hear a great track, you WANT TO BUY IT RIGHT THERE. Given the low price point of 99 cents, you don’t think twice about making a purchase RIGHT NOW.
This impulse has been around since iTunes started to take off but its been dormant. I hear a great track on Entourage, I have to do the heavy lifting of remembering the stupid lyric, Googling the lyric (game over right there), finding the track on iTunes and then paying 99 cents for the privilege. Uhh, no thanks.
On the other hand, Shazam greases that impulse better than anything out there on the market right now. Plus, it retails for FREE via the appStore.
What’s not to love??
Okay, I’m pissed because I care. Or something like that.
You see, as a purveyor of fine health information, it is my job, nay, my calling, to wade through the trenches of health websites. There’s good ones (WebMD, Mayo, NIH sites, etc.) and then there’s the really bad content (don’t even get me started).
That’s why I was giddy like a 13 year old going to see Hannah Montana when I first previewed Google Knol. Seeded with a few hundred health topics written by physicians, the content quality and depth is unbelievable. It puts Wikipedia to shame. It puts everything else out there to shame.
Only problem? Doctors write when actively courted by Google (who doesn’t love a little love from our overlords?); they probably stop writing when they find that the AdSense ads surrounding their content monetize at 10 dollars a year.
Yeah. Doctors are people too, and sometimes wretchedly money-grubbing people. Fair enough.
So to really measure Google Knol’s quality since takeoff last week, we need a better way to navigate and access the site.
- What were the last five (or five hundred) Knols created? If they were about how to sell snake oil as opposed to medical topics, uh, I’d kinda like to know so I don’t syndicate that.
- How many Knols exist overall? Note that Wikipedia provides a pretty easy way to get to that number. Its called a full database dump and my company Kosmix uses it. Knol? Umm no. Evil much??
- Nav for the site is pretty retarded. I mean, look at this: http://knol.google.com/k/knol/directory-000#. Where is the categorization?
- Good Lord, there isn’t even a way to SORT the goddamn link above!!!
- Final offense: the title says “Collection of Featured Knols”. That means that the tip of the iceberg could be shiny and pretty while the rest of the iceberg is trying to sell me Viagra on the cheap. Come on, Knol, stand behind your product!