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Browser wars, part IV May 29, 2012

Posted by David Card in Uncategorized.
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Yahoo seemed to be taking a page from an old 20th century playbook last week when it introduced Axis, its browser/search hybrid app for iOS. And there’s a rumor circulating that Facebook might be looking at acquiring Opera. Does this mean we’re about to enter “Browser Wars, Part IV?”

Eighteen months ago, I wrote a short piece of analysis arguing that browsers don’t matter anymore. My thesis was that major technology platform providers like Google, Apple and Facebook weren’t using browsers as a key distribution channel or developer strategy for their APIs. Browsers might still play a role, I wrote, by offering a development platform to help alleviate fragmented operating system markets like mobile phones and connected TVs.

Has much changed since then? Microsoft has lost a little market share in desktop browsers, but the most established market tracker still has Explorer with a 30-point lead over Firefox and Chrome. OS and browser are tightly integrated for mobile phones and tablets, and we might even see that pattern re-emerge in desktop operating environments.

Yahoo’s chances

So what is Yahoo trying to accomplish? Shouldn’t the troubled portal be concentrating its allegedly mobile-first strategy on apps that have a chance? Like, for instance, its Livestand newsreader? Oh wait, it just killed Livestand.

Axis is getting surprisingly good reviews. (So did Livestand.) But when implemented as an app for iOS, it’s less a full browser than a skin on Apple Safari. Axis uses Safari’s rendering engine, and doesn’t override Safari when other browser-related functions come into play, like posting updates or photos. Axis is an intriguing search and web navigation app that presents page images rather than links as results, remembers a user’s search history across devices and enables a personal home page.

Axis gives a slick demo on an iPad. But page thumbnails are an inefficient way to display search results on smartphone screens, and there’s no evidence that Yahoo is tuning results for mobile use by, for example, re-ordering results based on GPS data. The success of Axis will depend on whether users perceive its approach to be fun or offering utility. Axis may be fun to use on a tablet, but it doesn’t stack up well against recent social search initiatives from Microsoft or Google easy-answer utility.

Surprisingly, although Yahoo is talking about the potential of Axis advertising, it’s not showing any ads or paid search results right now. That’s odd, since tablet ads might command a premium for their novelty and potentially rich interaction. Yahoo’s leaving money on the table and potentially taking away revenue opportunities for Microsoft, its search partner.

Browsers as platforms

If Axis catches on, it might increase usage of Yahoo search and content. But Yahoo appears to have wisely abandoned any notions about being a technology platform provider. It is not using Axis as a package of APIs connected to Yahoo services upon which third-party developers build apps.

Facebook is a another story entirely. I’ve written before about why Facebook would like to deploy its platform on devices via a somewhat site-centric HTML5 strategy, to ease multiple-OS support and get around app store restrictions. Its intent to buy Instagram and its own Camera app probably indicates bridge tactics toward that longer-term strategy.

Right now, Facebook mobile performance is poor. For security reasons, Apple restricts how apps use Safari’s rendering and JavaScript engines. Safari and other browsers use just-in-time compiling that enables applications to run faster by optimizing on-the-fly for particular hardware configurations. Opera also relies on a fast rendering engine and server-side caching for performance. Facebook might indeed benefit from access to those kinds of technologies. If it does acquire or build a browser, though, Facebook should “disguise” it as a speedy app, rather than trying to steal usage away from the device’s default browser.

Question of the week

Does Facebook need to own a browser?
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Social commerce remains a licensing play May 21, 2012

Posted by David Card in Uncategorized.
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One theme attached to Facebook’s IPO was the company’s need for revenue diversification. Advertising and virtual goods pay Facebook’s bills, but delivering on the promise of social commerce – connecting the dots between content, curation, communications and commerce – would be golden. That’s something Facebook has failed to do so far. Meanwhile, a startup like FindTheBest is tapping an established social commerce revenue stream while Pinterest raised $100 million on e-commerce hopes.

Three main categories of services drive social commerce: 1) reviews and recommendations, 2) group buying and daily deals and 3) shopping communities. Facebook’s strategy is to use its platform to enable developers to weave all three together. But, while Likes are ubiquitous and Facebook is adding shopping-friendly “verbs” to its Open Graph, its own deals and coupons Offers product is off to a sluggish start and retailers and merchants have seen little success for their Facebook storefronts.

Beyond impulse purchases

Online commerce is largely directed shopping, playing off the web’s strength in search and price transparency. But social commerce – especially when it’s delivered within the confines of a social network – seems better suited to casual impulse purchases. Two areas where social technologies could add fuel for e-commerce are:

Potential players

FindTheBest began life as a consumer site, but increasingly positions its vertical comparison engines and aggregated and curated reviews as “content” for publishers. The company does revenue-sharing deals – from advertising, affiliate fees and lead generation – rather than pay-upfront licensing. That’s an intriguing model, if a little far removed from where the transaction occurs, and FindTheBest has signed 30 deals with publisher sites this quarter.

In contrast, even though the lead funder behind Pinterest’s latest round was the Japanese e-commerce holding company Rakuten, the transaction connection still seems a little whimsical. Content sites and some merchants show compelling anecdotal evidence that Pinterest can drive traffic, but they’re sketchy on conversion data. It would be wise for Pinterest to tap into this phenomenon by charging for marketing pages or collecting affiliate fees before it leaves too much money on the table.

Pinterest might turn out to be better at delivering licensable technologies than e-commerce transactions. In fact, that may be Facebook’s role as well. Right now, social commerce feels like a technology platform play rather than a retail business. According to our GigaOM Pro 1Q12 U.S. consumer survey, only 7 percent of social network users regularly shop on social networks. That’s a condition likely to continue for 24 to 36 months at least.

Question of the week

When will social commerce actually drive significant transactions?

Microsoft raises bar for social search May 14, 2012

Posted by David Card in Uncategorized.
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Last week, Microsoft showed off what it called the biggest redesign of its Bing search engine in its three-year history, featuring a results page loaded with social features. The new Bing will roll out to users over the next few weeks. Microsoft seems to have achieved its stated goal to balance social signals and an easy way to ask friends for advice “without compromising the core search experience.” In demos it’s a far deeper and more graceful implementation than Google’s justly criticized “Search plus your world” social personalization scheme.

What it means

Search is still vital for Microsoft. With this release, Microsoft has set the standard for social search. It has fine-tuned social results and presents them in their own sidebar that encourages but doesn’t depend on user interaction. Microsoft says its research shows that 90 percent of people tap into friends or experts before decisions, but it doesn’t bury algorithmic results beneath social data that may not be useful.

Microsoft is taking in data from a broad variety of social media sources including Facebook, Twitter, Quora, Foursquare, LinkedIn and even Google+. Microsoft has licensing agreements with Facebook and Twitter but also uses publicly available “scraped” information and data from social networks’ APIs. Google has alienated Facebook and Twitter to the point where Twitter reportedly blocks Google from using what would be normally public data.

Microsoft enables users to take direct actions based on results in what it calls the Snapshot section of a results page. It looks like Microsoft has been less heavy-handed than Google in promoting its own services, and pulls up info from Yelp, Open Table and others. Likewise, the social pane dispenses with the need to ingest social annotations directly into search results, yet still offers up logical actions with friends or “people who might know.”

Microsoft got social right; Google did not. (Danny Sullivan is skeptical that either has the formula.) No, social media won’t replace search. But Microsoft has a great demonstration of how to incorporates social signals into search. Google’s flubs have so far cost it no market share, and Microsoft’s own slim gains have come mostly at the expense of Yahoo, its partner in search technology. Microsoft still needs to get users to try out Bing, even before it can prove whether social media adds much to the search experience. It’s not clear whether big audience aggregators Yahoo or Facebook, that also uses some Microsoft search technology, will adopt these new conventions. AOL’s still a Google distributor. So it’s going to cost Microsoft a lot of advertising dollars to expose Bing.

Whom it affects

Google. Before Microsoft can gain any awareness, Google should do whatever it takes (i.e., spend liberally) to get its old Twitter license re-done; Facebook may be hopeless. Google should also tone down the promotion of its own products within general search results, and focus on building out vertical search sites. If they’re legitimately competitive, they’ll show up in organic results.

General-purpose search. Yahoo, AOL and Ask could copy or license Microsoft social results. The portals can focus on personalization based on their own extensive user data.

Vertical search. Sites that offer search of specific categories, like Kayak, media companies and retailers can all observe, adopt or license techniques from Microsoft. Social search should remain one facet of results – not the dominant method. That’s because there are no simple rules for when social search works. It’s not a matter of casual versus considered purchases. Friends can make valuable travel and local service provider recommendations, but their advice on medical, financial and entertainment choices may be suspect.

Key takeaway

Bing represents social done well, and it could lead to minor market share gains; but this is hardly the death of Google.

Question of the week

Will social search integration gain Microsoft any market share?