Silicon Valleywood

What to Look for from Google’s Social Networking Platform October 31, 2007

Lots of buzz about Google’s expected Thursday announcement of a social networking platform, possibly called “OpenSocial.” I haven’t talked with Google yet, but I’ll lay out a few things to look for, both hurdles and opportunities.

1) As an analyst who used to have the word “Unix” on his business card, I’ve seen a lot of “open” “consortia” fail miserably. Regular readers know my Rule of Partnership: For a deal to be important, two of the following three must occur:

– Money must change hands
– There must be exclusivity
– Product must ship

“Open” “consortia” aren’t deals. That’s one of the reasons they fail. The key here would be “Product must ship.”

2) The list of participants includes seemingly everybody but those that matter: the other consumer Internet platform players (except Google) and the online media powerhouses (i.e, sites with huge audiences). The platform gang would be, in alphabetical order so no one is upset: Amazon, eBay, (Google) Microsoft; and wannabes Facebook and Yahoo. (I think MySpace’s future is more portal than platform.)

3) Apparently there will be three sets of APIs (application programming interfaces for developers) covering profile info, friends relationships (the social graph), and feeds/activities. All well and good. But will Google bring along services for those APIs to tap, or is that somebody else’s job?

4) Google’s major innovations to the whole platform ecosystem model (invented by IBM and Microsoft) are two: mash-ups and revenue streams available to participants (e.g., AdSense and AdWords). This sounds fairly mash-y; let’s hear about the revenues.

So let’s sit back and watch the fun. Can Google, the best online innovator and favorite online brand, rally Everybody Else against the other platform playas? Will any of them join in? What of the other big online media gang?

Hulu Site Goes Almost Live October 29, 2007

Hulu’s up in previews. It’s pretty stark, but it’s simple to navigate, the streaming quality looks good, and it seems like shows are streamed after a very discrete “brought to you by”, with fairly minimal video ads once running. (I haven’t watched much yet.)

Disappointing: full length movies have ads, and they’re edited — Master and Commander looks like it’s the version they show on planes.

Nifty feature: easy to use clip editor for embedding or mailing:

I still think the Fox-NBC joint venture will have more legs as a distributor than as a destination. But it’s not a shabby destination.

Rockstars as Businessmen: NY Times Says “Yuck” October 27, 2007

The sneering tone in the NY Times’ review of Bon Jovi’s 10-day stand opening Newark’s new arena is perhaps understandable — it’s an “arts” review. But why does the business section dis artists for licensing their wares for commercials and just about everything else, given it acknowledges album sales are tanking? And picking on Velvet Revolver, a poor man’s — make that homeless person’s — Guns N’ Roses — come on.

Tidbits from Facebook-Microsoft Press Conference October 24, 2007

Almost live from the press conference:

Not much detail. Deal expands AdCenter’s exclusive as the third party network for Facebook into int’l markets. It doesn’t include search. No comments on guarantees, terms, etc. No comments on other potential partners.

Kevin Johnson, Microsoft’s prez of platforms & services division, said Facebook’s $15B valuation comes from extrapolating to a 200 to 300 million user base for Facebook, with a modest $$/user/year revenue stream. Three hundred million users? Where? China? (Facebook claims 50M now.)

They work together on lots of things. But they’re not telling what.

Facebook chief revenue officer Owen Van Natta finally said something about the potential for Facebook app developers to tap into AdCenter or other ad revenue streams. Finally. You know my rap: this is the way it should work for developers: allowing them to build their own revenue streams is a bug, not a feature.

Facebook will use the money to hire developers and buy servers. Not to hire an ad sales force, apparently.

New targeting schemes? Facebook says it focuses on user trust. But there are “certain details of the partnership we’re not disclosing…AdCenter is a big platform with massive scale…would imagine that would be leveraged on Facebook” at some point.

Microsoft says a lot about how Facebook is innovating on new ad formats unique to social networking.

But Is it Really About Selling Sentras? October 24, 2007

Intriguing detail in today’s Journal story on Nissan’s quasi-guerrilla marketing plans for its $70,000 GT-R sports car. Including in-game advertising with Electronic Arts. The punchline, though, comes in the penultimate graf:

Nissan forecasts sales of 200 GT-Rs per month in Japan. The company hasn’t said how many it expects to sell in the U.S. or whether the car’s price will approximate the $70,000 sticker in Japan. EA says that among the 45 million annual players of the Need for Speed game, the vast majority are 16-to-34-year-old men — not the best demographic for a high-five-figure car.

Jupiter concurs. But maybe the PS punchline is the last graf:

Paul Sakalas, 27 years old, first learned about the Skyline GT-R when he was playing Gran Turismo on his PlayStation. Mr. Sakalas, a radio producer in Virginia Beach, Va., says he was exuberant when he heard a new version of the car would finally be sold in the U.S. “But when I heard how much it cost, my dreams were crushed on the rocks of reality,” says Mr. Sakalas. He now drives a Nissan Sentra sedan.

…and this is about aspirational marketing for boring old Nissans. Fiendishly clever.

Economist Facebook Article Blows It on Network Effects October 24, 2007

Colleague Nate Elliott tipped me off on this Economist article that takes some of the, er, steam, out of Facebook. One thing I think the Economist screws up — sacrilege! — is its analysis of the network effect potential of social networks. It posits that there are diminishing returns to the size of social networks, because you don’t want everybody in yours — exclusivity is valuable.

Well, sure. But why can’t the social network companies develop tools that let you manage your different networks: ensure exclusivity where you want it, encourage overlap where it makes sense (some of my work pals do like the same movies as I do), lock out spammers, etc.?

If those tools work, and work especially well across a big network, then you might see another characteristic of network-effect markets: winner-takes-all. Frankly, I think it’s more likely you’ll see those tools cross networks, but still, that’s what some of the hype is about. I think Google and Microsoft know just a little bit more about network-effect platforms than the Economist apparently does.

Will Widgets Finally Move the Personalization Needle? October 23, 2007

Widgets are white hot, if not significantly profitable. According to JupiterResearch consumer surveys, awareness and usage was closer to zero than 10 percent only six to nine months ago. But now, 39 percent of online users are familiar with them, and 26 percent have used them. Over 40 percent of 18 to 24 year olds have used ’em, and they’re six times as likely to get them from friends as they are to get them from companies. That has huge implications for your social media programming and marketing tactics. But what about this?

User customization or personalization of Web pages hadn’t moved an inch in years, even though it’s one of the features that characterizes the Internet as a medium. If you were getting 15 to 20 percent of your users to customize your site, even a little, you were doing well. Fueled first by YouTube, Flickr, and MySpace, and turbocharged by Facebook, widgets might change that. To think, after all that work by Yahoo, Microsoft, Apple, et al., it took dumb-as-dirt embed codes.

See Jupiter widgets report.

Power of Potter, Part XXIII October 23, 2007

Regular readers know I often comment on Harry Potter-related media industry news. I have avoided noting the outing of Dumbledore (wasn’t it obvious?), but I can’t pass by colleague Patti Freeman Evans‘ observation:

Amazon’s Earnings

Third quarter revenue up 41%. Operating margin down 2 basis points. Hummm, could it be Harry Potter’s fault?

I’m no retail analyst, but how could you disagree? Lucky Patti didn’t say that to Maria Bartiromo today when she was on CNBC. No telling what the Money Honey would have done with that. And shame on her for asking Patti to make a stock pick. Heck, we don’t get paid nearly enough to do that!

Maria Bartiromo

Competition Is Good October 16, 2007

Wow, that didn’t take long. Thank you, Amazon.

Apple Inc. is reducing the price of all songs on its iTunes Store without anti-copying software to 99 cents from $1.29, bringing Apple’s prices on such tracks closer to those offered by Amazon.com Inc., Wal-Mart Stores Inc. and other rivals in online music.

Yahoo Adds Some Premium Brands to Publisher Network October 16, 2007

Buried in Yahoo’s earnings, was the announcement of four new ad deals. They’re with premium brands who have solid traffic, and signing them speaks well to Yahoo’s getting its ad network act together.

– Forbes is an exclusive, for remnant display
– WebMD is an exclusive, and also involves search
– Ziff Davis (I think they still have some titles left). Non-exclusive
– Cars.com (non exclusive)

Intriguingly, the deals are sort of two-way. All of the publishers can also buy Yahoo inventory to target their own site visitors who go on to a Yahoo property. But I’m using the term “target” pretty loosely, as none of them can actually buy context: no choice in property, position, or placement.

Cars.com is allowed to do geographic targeting, so this is not a technology limitation, but rather a resolution to potential channel conflict. Yahoo says it will serve up those 2-way ads based on its own yield management schemes, so presumably Forbes or WebMD would have to outbid other potential buyers.

Still, it’s a bit of a “take that, Google, you almost-media company” moment.