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Why Color Is More Than “Yet Another Photo-Sharing App” March 28, 2011

Posted by David Card in Uncategorized.
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Much of last week’s buzz surrounding the launch of Color was justifiably skeptical. The startup, after all, raised $41 million to enter a crowded space without a business model or customers, and many wonder whether the world really needs another mobile photo-sharing app. But two components of Color’s vision — implicit networks (connections created without user effort) and place/time tagging — extend far beyond photo-sharing, and make the company worth watching as a potential indicator of social media and data-mining trends.

The Color app for iPhones and Android lets users share photos in real time with other nearby photo-snappers. The sharing network is determined by proximity rather than by a user explicitly specifying who his friends are. Users are anonymous and all content is public.

Early reviews are pretty negative. Om writes that Color is attracting more attention from pundits than users because the app may not deliver obvious fun or utility. Matthew Ingram wonders if the big funding bet is on Color’s all-star team — which includes Bill Nguyen (Lala), Peter Pham (BillShrink) and former LinkedIn chief scientist DJ Patil — rather than its product or ideas.

But some of those ideas matter.

Implicit Networks

Angel investor and Hunch co-founder Chris Dixon says he’s intrigued by Color because it is pushing the envelope on implicit social graphs. Color’s implicit networks aren’t specified by users, but rather are based on underlying contexts like geography or shared interests. I’ve written before about context-based social networks, and how Facebook Groups is struggling to deliver them. Peter Yared, a VP at WebTrends, writes that Facebook is also experimenting with implicit neworks of friends.

If Color builds on its implict network concept it could deliver instant groups of friends for different occasions or interests, and expose recommendations based on common tastes. Marketers could target advertising or offers within a Color network to real-time groups around an event or location, or aimed by shared interests.

Place and Time Data

Search pundit John Battelle goes a little overboard on how Color could push augmented reality. But he’s right about the importance of geo-tagged data. In a presentation last week at GigaOM’s Structure Big Data 2011 conference, IBM Distinguished Engineer Jeff Jonas showed how adding place and time to data objects can power big data analysis, predicting a person’s likelihood of being at a give location with astounding accuracy, and assisting in identity management. Again, if Color is a leader in gathering this data, it could build out a powerful — yet still privacy-protected — targeted advertising network.

Business Model to Come?

Color chief Nguyen says the company is really about data-mining rather than photo-sharing. He says combining place and time data with implicit networks can help services or marketers parse the difference between entertainment and work activities. That information will affect the elasticity of Color’s networks — how broadly it expands or contracts its sharing range — and power its algorithms for ranking photos and, presumably, other content or advertising elements.

Nguyen also talks about a future news API that could spawn a curated news app for journalists. He describes a pretty dumb restaurant service that would help waitstaff know customers’ first names and interests. Before he sold Lala to Apple, reportedly for $85 million, Nguyen took the service through at least three different business models. Lala started as a CD trading service, morphed to a digital music locker, and then offered Web songs with perpetual streaming rights for ten cents each. With its talent and cash hoard, there’s no doubt Color will evolve as well.

Question of the week

Is Color more than just another photo-sharing app?

Facebook Patent Hints at Social Search Plans March 21, 2011

Posted by David Card in Uncategorized.
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Last week Facebook was awarded a patent that covered essential elements of social search. Patents don’t always predict products, but this one was acquired by Facebook when it purchased intellectual property from Friendster, which perhaps indicates new and active intent. Is Facebook is building an alternative to Google? Possibly. Let’s examine the state of social search and its potential implications for online media.

There is a “social will replace search” theory that runs something like this: Overwhelming amounts of data, along with SEO gaming, make Google’s traditional approach to ranking results less effective than it once was. And driven by social networks, a passive, feed-based user interface is usurping the old “seek and search” style of online navigation.

The big search engines like Google and Bing are already incorporating social signals into their ranking schemes, and into how their results are presented to users. It’s likely, in fact, that both social and search will co-exist as navigation modes. Some observers may have over-interpreted back-and-forth traffic among top sites (Google, Yahoo, MSN, Facebook) as an indication that Facebook drives more viewers than Google. A lot of cross-site traffic for them is the natural flow of an online session — check mail, headlines, social network — rather than a search- or feed-directed path. And sometimes a user’s friends aren’t the best source of relevance. Seeking medical information rather than a preferred dentist, or a convenient airline ticket rather than a fun vacation destination, will remain directed queries based on authority and the breadth of information coverage.

Social Search Competitors

If Facebook’s creating a social search alternative, Google is the big target; it has, after all, over $25 billion in search advertising revenue. It both integrates and segregates social technologies. Personalized social search that displays content shared or posted by a user’s friends is buried under More Search Tools on Google’s results page. It puts real-time search — licensed Twitter results and what public Facebook content it can crawl — a little higher on the page, and sprinkles in a few real-time results on its main results pane. With its existing strength in ad networks, Google is in the best position to build out real-time advertising.

Microsoft’s Bing, which isn’t really gaining ground on Google yet, has partnered with Facebook to gain more access to Facebook data like friends, status updates and Likes. Bing’s results feature Facebook and other social content a little more prominently than Google’s do, but Bing also offers a separate social content-only search function.

Other social search players include Topsy, which searches real-time content and keeps a deeper archive of tweets than Twitter does, and blekko, which uses human editors to create authoritative indices of results, partly by blocking what they determine low-quality sites. WOWD was building a social search engine, now concentrates on personalized feed filters. OneRiot ceded its real-time search to Topsy while it attempts to build an ad network.

What Facebook Might Do

The Facebook patent covers ranking and displaying search results by their popularity among a searcher’s contacts and those removed by a few degrees of separation. In fact, Facebook nearly does this already. When users start typing in the search field, Facebook auto-suggests content that’s been Liked by the user’s friends. Carefully adding friends of friends would expand the results index.

Facebook could be thinking of using its patent offensively to gain licensing royalties. But although Google’s patent portfolio isn’t as big as Microsoft’s, it’s pretty diverse, and even contains a lot of social technologies. So maybe the patent’s just defensive.

Building a full-blown search engine requires attempting to index the entire Web. Even if Facebook relied on its users to do the indexing, the results would be spotty. Facebook search would no doubt do well on entertainment, baby photos and sports trash talking. But that medical content and those travel arrangements would likely remain thin. Chances are, Bing remains Facebook’s search engine strategy.

Question of the week

What is Facebook’s social search strategy?

How Online Startups can Build Audiences on the Cheap March 14, 2011

Posted by David Card in Uncategorized.
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Last week, prominent investors declared in blog posts that two marketing tactics favored by many startups — search engine optimization and viral promotion via Facebook — were no longer viable. The real truth is that both remain effective but neither is free, and never was. So let’s examine how a startup making consumer apps or online services can get that much-coveted first million or two users as cheaply as possible.

Investor and Hunch co-founder Chris Dixon said he hasn’t seen any startups build a business through SEO since 2008. He reasons that Google’s ranking algorithm favors older sites with lots of links links. That is fostering an arms race between Google and the “black-hat” optimizers that build link farms and the content farms that create highly optimized but lightweight content.

Building off Dixon’s argument, Bessemer Venture Partners’ Sarah Tavel said she thought Facebook could still act as a startup’s primary free marketing channel, but that its efficacy had been severely diminished. Facebook is over-crowded with apps, she thinks, and is exerting more control over the viral amplification social gaming companies like Zynga used so effectively.

SEO, Facebook Never Free, Still Effective

SEO never was free. Big companies spend thousands of dollars on optimization tools (e.g., BrightEdge, Covario, SEOmoz, Yield Software) and search specialist agencies like iCrossing and 360i. These tools and services help companies with tagging and linking, and making their content and apps more discoverable and indexable by search engines. But more importantly, SEO still works.

Search guru Danny Sullivan advises multiple marketing tactics, and says he sees SEO working for plenty of companies. His own relatively new content site gets 20 percent to 40 percent of its traffic from search. Q&A sites like Quora and Stack Overflow have grown primarily through search and word of mouth. In this interview, Stack CEO Joel Spolsky concedes his sites’ user interface is so bad he depends on Google as his front end. SEO should remain a major marketing tactic for any startup.

Likewise, while it’s true that Facebook has clamped down on free promotions — game status updates only appear in other gamers’ feeds — the biggest Facebook success story wasn’t built on free viral tactics. Social commerce giant Groupon’s president Rob Solomon told me in an interview that Groupon didn’t do much SEO. It bought some paid listings and display ads from Google, but most of its marketing budget went for Facebook advertising. Groupon only did TV ads after it got to 50 million users.

At the same time, Inside Facebook wonders if Facebook might relax some of its viral restrictions, now that its games-driven Credits virtual currency business is starting to mature. It has already opened up Credits promotions. Along with SEO, most consumer startups should continue to use Facebook, but expect to spend some marketing dollars there.

Other Tactics for Audience Building

Getting that first million users that advertisers demand isn’t going to come for free, but it doesn’t have to be that expensive. Build marketing programs around the following:

  • Multichannel campaigns: Most ad inventory is still cheap at sub-50-cent CPMs. Facebook is building out free analytics tools to help plan marketing across offers, ads, Likes and Comments.
  • Flexible SEO: Google’s “panda” algorithm (upgrade affected more sites than usual. Here is some advice on how to react to the changes.
  • Lead generation: It’s a little sketchy, but you can still buy Facebook friends and Likes from companies like GetMorePopular.com and uSocial.
  • Other social networks: MySpace inventory is even cheaper than Facebook’s, and it still has 40 million users. Connect.me signed up 40,000 followers via Twitter without a product.

Question of the week

How can a consumer startup build an audience?

The Battle for Unified Communications Heats Up March 7, 2011

Posted by David Card in Uncategorized.
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Synchronous communications like mobile group chat are the latest battleground in the war over unified communications. Startups like GroupMe and Yobongo were part of a flurry of announcements last week on IM, chat and group messaging, but no matter how clever and fun their apps are, and no matter how much these companies hope to be the stars of this year’s SXSW conference, they’re not the real contenders in the race to create a unified communications hub.

Rather, the battle for what company supplies a user’s communications control panel is being fought among technology platform players like Google, Microsoft and Facebook. And a scrappy Skype can’t be ignored either.

The winners — and there’s enough interoperability across communications channels to accommodate multiple hubs — will have an application that its users access constantly. A unified communications hub offers potential customer lock-in through habit and the effort required to switch. Om wrote that by controlling a user’s synchronous interactions — sharing experiences that replicate reality — Google could fix its social media flops and beat Facebook. A unified communications hub could be the launchpad to do just that.

Building the Unified Communications Hub

A successful communications control panel will integrate three key components:

  • Universal communications channels: A user should be able to manage both real-time and asynchronous communications, one to one and multi-party, and across different channels: voice, email, text, video. Managing means initiating or receiving the message and moving gracefully between channels with as little effort as possible. For example, IMs should convert to SMS messages if the receiver is away from his computer or smartphone. Email and messaging from Google, Microsoft and Yahoo are good at this already.
  • Contact management: Besides just storing contacts and their various addresses, a universal communications hub increasingly needs to manage groups. It’s even better if that doesn’t require a user to work too hard. Facebook is attempting to get users to tag group members rather than make lists, and Google’s Gmail prioritization auto-sorts by “learning” from a user’s previous email activities. Location-based services and social graphs about a user’s relationships and preferences will play a big role here.
  • Presence management: People need better control over managing their availability. With chat and IM, you’re either available to all or not, and you have to manually screen your phone calls. By integrating contact groups and presence, a person could make himself available in real time for family in the evening, but available to co-workers only via email.

I’m less convinced about the need for a universal inbox, at least the way Facebook has implemented it. Yes, there should be one place to find notifications of communications waiting for you; Apple’s visual voice mail is a great example of this. But storing IMs and emails together, and sorting them only by user, seems oversimplified. Users likely appreciate the non-permanence of IMs and the flexibility of folders.

Handicapping the Contenders

So what are the contenders’ key strengths?

  • Google can lead with voice, mail and mobile. It should actively build hub features into Android, rather than depend on third-party apps.
  • Microsoft’s mail and IM strength is in corporate markets, and it gets along with Facebook on contact sharing. Nokia could be a strong partner in mobile hubs, but that’s going to take some time.
  • Facebook can leverage its social graph to create a hub that requires the least effort from users. It is gaining ground in synchronous communications and dominates link- and photo-sharing.
  • Skype has moved well beyond its original cheap calling pitch into an early lead in video, and already acts as a control panel for many consumer communications. It’s strengthening its enterprise position with web conferencing partner Citrix.

Question of the week

Who is leading the charge in unified communications?