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Where consumer influencers hang out March 19, 2012

Posted by David Card in Uncategorized.
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A key objective of online social media marketing is to reach influential consumers and get them to pass the word. But marketers and advertisers have to find those influencers first. Do consumer technology influencers gather on Facebook? Are the fashionistas all on Pinterest?

Marketers and online publishers can better understand and reach consumer influencers in various product categories with analysis derived from our Q1 survey of 1,165 U.S. online adults. We asked consumers whether their friends seek their opinion on consumer electronics, movies and TV shows, and style, and whether they are the source for recommendations on financial matters. A relatively small number of people (20 to 25 percent of the U.S. online adult population, or 30 to 40 million people) carry much weight with their friends in any category, and they tend to be semi-specialists. (I have found in previous market research that teen influencers are a little different: Cool kids have clout across multiple categories.)

Fig1aConsumer electronics and technology influencers, the biggest category, shows the highest overlap. Over half of consumer tech influencers also influence friends in all of the other categories, even fashion. Don’t stereotype fashion influencers as female; 46 percent are male (60 percent of tech influencers are male). Clever marketers should combine themes in ad campaigns or offers. Entertainment combined with a mobile phone or PC is obvious, but what about fashion or finance?

Fig2a

As shown in Figure 2, social network usage is a mainstream phenomenon, and the influencers aren’t much different from the mainstream. Nearly two-thirds of video influencers are regular users of social networks, so they are a tiny bit more concentrated. That’s not too surprising, as they are a shade younger than the average online adult. Perhaps surprisingly, the youngest group of influential adults, the fashion influencers, are only average users of social networks.

So which social networks do influencers use? The same ones as everyone else. Ninety-four percent of regular social market users use Facebook, according to our survey. That figure only varies by a few percentage points for each category of influencers. Since Facebook has by far the most users of any social network, marketers will find lots of influencers there.

Fig3a

But at the same time, over half of the influencers that use social networks use more than one, and over 20 percent of each category use three or more. Our survey shows Facebook doesn’t always deliver the highest concentration of influencers. Marketers may be able to get a better bang for their advertising buck with campaigns or programs that use Twitter, as shown in Figure 3. Across the board, more Twitter users are influencers compared to other social networks. LinkedIn has a similar concentration of finance influencers among its membership.

What about the newest hot brand in social media, the social scrapbook Pinterest? Well, Pinterest still has a relatively small membership base of 10 to 15 million users, though those users spend time there like on no other network than Facebook. Our survey got a statistically insignificant number of respondents who use Pinterest. Examining the survey results for directional indicators, you will find that Pinterest appears to attract more than its share of early adopters and people who want to be in the know about new products. But while Pinterest attracts an above-average concentration of video influencers, it actually looks below average for fashion.

Marketers must probe deeper than what might be conventional wisdom. We encourage GigaOM Pro clients to ask us to dig into our consumer survey results. Meanwhile, keep an eye out for our coming survey-based analysis on social TV, e-books, social commerce, cord cutting and other topics.

Question of the week

What else would you like to know about consumer influencers?
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Why Microsoft can’t give up on search August 1, 2011

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Last week, a Reuters Breakingviews piece that was picked up by the New York Times generated controversy and counter-commentary over Microsoft’s struggling efforts in search. Breakingviews suggested that Microsoft abandon its money-losing search business and sell the Bing search engine to Facebook. This is a bad idea, even though Microsoft’s online business, mostly due to search, suffered a fiscal-year operating loss of $2.6 billion. Microsoft hasn’t cracked the code on how to make Bing a winner, though it has made incremental improvements in areas like user interface and social integration. But Microsoft has to keep at it, because it needs search for several reasons: 1) to defend its core platforms, 2) to compete with its biggest rival, Google, and 3) to solidify its ad business and open emerging revenue streams.

Defending the franchise

The foundation of Microsoft’s success has been the Windows platform: an operating system with APIs that powered an ecosystem and locked in developers, and that owned end users via its user interface familiarity. But search is the main navigation UI for the web, and it is playing an increasing role in desktop, application and local information navigation. Search can also set UI standards, and it threatens to wean users off their Windows dependency as cloud computing proliferates. Microsoft’s classic product strategy — integration — is one way that it can use Bing to hold off Google’s search UI incursions on Microsoft’s position in establishing cloud and enterprise APIs and services.

Competing with Google

Search is Google’s cash cow, and Google is Microsoft’s chief head-to-head competitor in a number of markets and in API platforms. Google’s massive profitability in search funds its efforts in applications, mobile platforms and online media (YouTube).

And what each company learns from search informs its efforts in machine learning, natural language development, personalization and e-commerce. Operating under the strategy that the best defense is a good offense, anything Microsoft can do to eat into Google’s search profitability forces Google into those other already-competitive markets.

Search marketers need a viable competitor to keep Google honest. Back in 2008, when Microsoft’s hostile $47.5 billion takeover offer for Yahoo threatened to consolidate search engine competition from three players to two, a Jupiter Research survey of advertisers and publishers showed that the majority of clients were worried about search advertising price increases. Think how much worse that could be if there were only one search engine. Realistically, Microsoft is one of the few companies that can afford the investment necessary in search.

Microsoft and advertising

Search is the biggest segment of online advertising, and it could be profitable for Microsoft if it can achieve scale. Microsoft believes that 10 to 15 percentage points more of market share would produce the necessary liquidity in its advertising marketplace, meaning better conversion rates and thus higher pricing (without gouging advertisers, because those results would convert better). If Microsoft were bigger in search, it could offer more accurate tools for advertisers trying to connect the dots across search and display advertising, producing more-valuable brand advertising analysis as well as targeting.

Contrary to what Henry Blodget thinks, Microsoft needs an ad business: It is likely that advertising will be a key source of cloud-based software revenues, especially for small businesses. After all, most consumer web businesses and cloud services get their money from a combination of fees and ads. Microsoft could create a marketplace of B2B services where search ads are one of the “currencies” buyers and sellers use. Another place where Bing could gain a toehold via integration is in mobile search, which may well pay off before mobile brand advertising, if Apple’s mobile ad network struggles are any indicator.

Finally, Facebook has plenty on its plate without trying to take on Google directly in search. It’s far more likely that Facebook hopes to continue to partner with Microsoft in search and advertising with social integration, while it concentrates on creating more valuable — and pricier — display ad inventory and sponsorships. In fact, the Microsoft-Facebook partnership’s continuing on its current course might just be Redmond’s best chance to gain search share.

Question of the week

Why should or shouldn’t Microsoft abandon search?

Yahoo’s growth options dwindling July 25, 2011

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Yahoo reported another disappointing quarter, with ex-TAC revenues (i.e., revenues minus the money it shares with ad network partners) down 5 percent, to just over $1 billion. Its core display advertising business was up 5 percent, but it appears to be losing share to companies like Google and Facebook. Yahoo is still one of the biggest online properties in the U.S., with fairly sturdy content and communications assets, but its options for restoring growth are getting fewer.

The reason? Yahoo has missed the most important new digital consumer trends. It might still have a shot at adding social media; after all, after many failures, Google’s Google+ project to add social elements to its services appears to be gaining traction, at least among early adopters. But Yahoo failed to translate a solid position in casual gaming into social gaming, and it is only dabbling in social commerce, even though it coined the phrase. And its acquisition of “content farm” Associated Content doesn’t seem to be increasing profitable traffic. Meanwhile, outsourcing its search business to Microsoft hasn’t paid off yet. So what is the company to do?

Yahoo blamed its display-ad sluggishness on a sales re-org that delayed some big deals. Let’s give Yahoo the benefit of the doubt and assume it still has good relationships with big-brand advertisers like GMC, Visa and Target (all of which are serving up rich media ads or sponsorships on Yahoo as I write this). If Yahoo cashed out its assets in China, it could use that money for other acquisitions and investments to bolster online advertising and gain a little social media momentum.

Yahoo already has a decent number of online video viewers – it’s a distant No. 3 after YouTube – but it is relatively weak in how much time those users spend with its content (35 minutes per viewer compared with Hulu’s 185, according to comScore). Buying Hulu might be too expensive: Apple and Google are rumored to be interested, and Hulu may not get long-term exclusive contracts for TV shows. But Yahoo’s brand-advertising expertise is still better than Hulu’s, or Netflix’s or Amazon’s. Its IntoNow TV check-in acquisition is already focused on synching twin-screen activities with on-air ads, and Yahoo Connected TV is showing signs of life. Yahoo could make a compelling social TV pitch to advertisers like Coke and Verizon, for example, connecting an on-air ad to an on-screen or PC-based check-in or other activity.

Yahoo could try to be the social-media advertising marketplace for everybody but Facebook. Even a social network as big as Twitter needs help creating and selling ads. If Yahoo didn’t choose to acquire a real-time ad network like OneRiot or 140 Proof that places ads near social streams, it could still bulk up its social targeting and analytics via Lotame, 33Across or Media6Degrees. With some acquisitions and integration, Yahoo could ease the effort a publisher or ad buyer has to make to cobble together customized solutions.

Yahoo is reportedly working on a hybrid content/ad syndication network. Instead of just renting out ad space, a second-tier online publisher could get related personalized content and advertising from Yahoo in a single package. Yahoo has plenty of high-quality content, and it could make Associated Content create advertorial-like opportunities. Newspaper publisher Gannett attributed a solid online quarter partly to its ad network partnership with Yahoo, proving that Yahoo has some success dealing with quasi-competitors.

With some effort, Yahoo could reenergize its business around video, a social advertising network and/or syndication over the next 9 to 18 months. Its costs are under control and its ad business is growing, albeit slowly. If investors or its board don’t have the patience, I suppose it could try to sell itself to Microsoft or AOL, assuming they’re still interested. Either would be a pure consolidation play among general-purpose content portals, combining audiences, tech infrastructure and sales forces. That kind of cost-savings merger is always brutal, and brutally difficult to execute.

Question of the week

How can Yahoo start growing again?

Updated: 4 reasons Pandora could win the fight for digital music June 20, 2011

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Updated. After nearly 11 years as a “startup,” personalized radio provider Pandora finally went public last week, raising over $230 million and debuting with a valuation of over $3 billion. It may be a labor of love, but with its focus on radio, Pandora has a better chance for mass adoption than some of the other new digital music services. Yes, I’m talking about those from Apple, Amazon, Google, Turntable and the will-it-ever-launch-in-the-U.S. Spotify. Pandora delivers a better radio experience while most of the others are aiming at a mythical “jukebox in the sky” that many users won’t need. Plus, other digital music services are trying to change, rather than enhance, well-established music listening and buying behavior.

True believers in digital music dwell on that vision of the jukebox in the sky capable of delivering any song to any device on demand, usually powered by a subscription “rental” business model. Rhapsody and Best Buy’s Napster have come closest to delivering that model in the U.S., but neither has ever been able to attract over a million subscribers at a $10 to $15 per month price. Spotify is building the same thing in Europe, with an ad-supported freemium twist to incite trial.

Chances are that Google’s and Amazon’s cloud-based music lockers — which today only give a user streaming access to his own uploaded collection — have plans to expand into the on-demand space. Apple appears more conservative. Today Apple is a digital retailer with a brand-new service for synchronizing local, rather than cloud, music storage.

On-demand streaming at the price that current royalties require faces a limited market opportunity in the U.S. I’d estimate it is five to seven million subscribers. Here’s the reasoning behind that seemingly conservative number. Pandora quotes convincing data that shows 80 percent of music-listening time is spent with radio rather than one’s own collection, and most of that listening is done in the car. I did surveys at Jupiter Research that showed that music is a relatively passive background activity for most people, and that their tastes aren’t very eclectic. Most people listen to the same genres and artists they listened to in high school or college.

Likewise, although everybody listens to music, nearly half of Americans don’t buy any, and of the remainder, 25 percent account for 75 percent of the spending. A relatively small number of heavy buyers spend $200 a year, while all the other spenders buy the equivalent of a CD or two. Even a $5 per month service is historically more than most people will spend on their own music. Yet satellite radio provider SiriusXM has over 20 million subscribers paying $13 to $17 per month.

So here’s why Pandora may catch on faster and ultimately gain more customers than some of the other contenders:

  • It’s catering to the masses. Most people listen to a programmed mix of artists organized by genre (i.e., radio). Pandora has genre channels as well as personalized channels that are even more tuned to a user’s favorites.
  • It has a radio business model, with premium upside potential. While Pandora has a $12 $36 per month subscription service, 85 percent of its revenues come from its free, ad-supported product.
  • It doesn’t depend on people shifting from ownership to rental. Users can still buy all the music they want to own from iTunes or Amazon. The “on-demand access to everything” pitch from Spotify or Rhapsody is geared to making people shift their yearly music spending to monthly rental. And it’s still more expensive.
  • It doesn’t need to integrate everything. Though it seems appealing to bundle music discovery, passive and on-demand listening, and collection management, that hasn’t proven to be a killer combo for Rhapsody.

Pandora’s product and business model are aligned with existing consumer behavior, and they are adapting to mobility well. Pandora itself doesn’t have to work as hard as companies trying to justify the jukebox in the sky, and it doesn’t require as much effort from its audience as some of the new social music experiences. Pandora is taking the easy path in digital music.

Question of the week

Which digital music service will gain the most traction?

What the Google-Facebook Battle Is Really About May 16, 2011

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Facebook’s silly scheme to plant anti-Google privacy stories further highlights the bitter rivalry between the two companies, but it also points at what they’re really fighting over. The competition is not so much about each company’s core business — search vs. advertising-powered social networking — as it is about future products and services, and each company’s respective role as a technology platform provider. And potential partners and competitors need to know which battles these two competitors will take seriously so they can adjust their own priorities and investments.

Here are the key areas of competition for Facebook and Google:

  • The “interest graph:” In contrast to a social graph of information about relationships between people, an interest graph based on topics might actually be a better indicator of purchase intent than what friends — who may not have similar tastes — like. Facebook Likes and Google search results feed such a graph — though Twitter may have more easily collectible info here than either.
  • Web navigation: Facebook hasn’t proven it can drive shoppers to commerce sites the way Google can, but it’s becoming an important source of visitors to online media sites like the New York Times, CNN and HuffPo. Consumer platforms depend on habitual use, so Google can’t risk losing ground as an overall web-discovery vehicle.
  • Communications: It’s unlikely social media will completely replace email, but both Google and Facebook are competing to be a user’s unified communications hub by integrating mail, chat and posts with contact lists and presence management. Such a hub would generate constant use and potential customer lock-in, and be a rich source of contact data.
  • Identity management/authentication: Facebook tries to enforce a single, authentic user identity, but it isn’t very good at letting that user manage his relationships between different types of friends or groups. Google does offer a sign-on service, but its Profiles are mostly for search personalization. Authenticated identities could play a big role in payments systems and professional/career relationships.
  • Ad networks: Google ad networks dominate search and are strong in direct-marketing display. In theory, Facebook’s Like network could serve context- and behavior-based advertising on sites web-wide. Facebook’s complaint that Google scrapes social information without explicit permission might be based on potential privacy legislation. One bill under consideration would give companies with formal consumer relationships more freedom to use data for advertising. That would give a company like Facebook an advantage over third-party ad networks.

Build, Buy or License?

Facebook doesn’t seem interested in building a conventional search engine, but Google sure is trying to build out some Facebook-like technologies. Google recently introduced +1, a competitor to Facebook Likes, where users recommend search results, ads and, eventually, web pages. Website owners will no doubt flock to +1 for its potential influence on Google search ranking. But, faced with yet another link-sharing option, users may ignore +1, especially since Google lacks an established equivalent of Facebook’s news feed to display links.

Neither company likes to license technology or data from other companies, with the exception of Facebook’s Microsoft partnership. Google seems to have some arrangement with Facebook that gives it access to Facebook company Pages, but the two have long bickered over sharing contact information.

Since they don’t like partnerships, how about acquisitions? Business Insider has a laundry list for Google, but two are big and might also appeal to Facebook:

  • Twitter: Either company’s ad business could instantly monetize Twitter better than Twitter can itself. But neither may need to buy into Twitter, as it seems pretty easy to get access to Twitter data.
  • LinkedIn: The professional social network is stingier about sharing data, has a working business model and could play an important role in identity authentication. But it’s about to go public, so would-be acquirers would have to act fast.

Question of the week

What are Facebook and Google really fighting over?

Integrating Social Media and Traditional Entertainment May 9, 2011

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Remember when social media was going to re-invent the entertainment business? Back in 2007 and 2008, Viacom’s MTV Networks tried to tie its shows together into the since-abandoned Flux social network, and even launched a short-lived TV channel driven by user-generated content. About the same time, NBC Universal’s Bravo network bought snarky fan site Television Without Pity, but has done nothing with it since. But that was then, and recent news suggests the social entertainment space is far from dead.

Last week, two big old media companies made acquisitions that signal new life: Warner Home Entertainment, home of the movie studio’s DVD efforts, acquired Flixster/Rotten Tomatoes, and News Corp.’s IGN bought Hearst’s UGO. Warner’s move hints at Netflix-envy: It said it wanted to use Flixster’s Facebook-driven user reviews and Rotten Tomatoes’ aggregation of professional ones to “grow digital content ownership.” Meanwhile, by doubling down on video game info sites, News Corp. is constructing a traditional aficionado-magazine model, but with lots of social media elements (user blogs, friend-following, points for participation). Most think News Corp. will spin off the combination.

Given these moves, has the industry finally figured out how to add social media to traditional entertainment for fun and profit?

Extending and Enhancing Entertainment Formats

Excitement about tablets and apps, lots of startup activity and Facebook’s role in distribution and audience acquisition are combining to create new opportunities to extend and enhance traditional entertainment forms. Expanding on Michael Wolf’s analysis of how this is working in social TV, here’s what TV and other entertainment media can do to capitalize on social media:

  • Discovery and user-based curation: GetGlue is the early leader in cross-media entertainment check-ins, smartly using Facebook and Twitter (a check-in auto-generates a topic hashtag) to amplify the promotion.
  • Extension: Forums and discussion boards give a fan a dose of his favorite TV show more than once a week, and book clubs are migrating online.
  • Shared experience: VH1 showed a slick app last week that, in addition to adding user commentary to live viewing, acts like a “DVR for tweets.”
  • Gamification: Entertainment check-ins deliver the ubiquitous participation stickers and leaderboards; they should offer virtual currency for loyalty.
  • Commerce: Apple’s Ping social network doesn’t seem to be boosting iTunes sales yet, and Facebook’s only just begun to dabble in video rentals.
  • Analytics and fan feedback: FOX Broadcasting and others use Think Passenger’s private communities for audience analysis. Who will figure out if simultaneous Twitter traffic means anything?

What’s Still Missing?

While the check-ins have stickers and can act as a launchpad for Twitter conversations, by and large, companies try to deliver the six objectives above via separate apps or experiences. Would they be more effective if they were integrated? I always thought digital music could blend discovery, retail and consumption, but Rhapsody combined them better than iTunes long before Spotify, and Rhapsody failed to catch on. Likewise, while a friend’s reviews and curation could emerge as valid components to an entertainment recommendation engine, by themselves they don’t appear to be as effective as the collaborative filtering approach of Netflix or Amazon, or Pandora’s professionally and algorithmically curated recommendations.

Perhaps the experiences should remain seaparte, but the business engine behind the apps and sites can benefit from roll-ups like News Corp.’s game-site play, or from formal partnerships and licensing. Some are emerging now: Time Warner already owns a piece of GetGlue and is responsible for many of the paid promotions that run on the service. Yahoo scooped up video check-in service IntoNow and is using audio recognition to track TV advertising. A handful of publishers are building a new digital book club and looking to tap AOL and Starbucks for ad sales and distribution.

It is inherently easier and more efficient in terms of audience reach, segmentation and analysis to offer advertising displayed on a network rather than an individual title or show. That means big media companies are best positioned to package and deliver social entertainment experiences along with advertising and sponsorship opportunities.

Question of the week

How can traditional entertainment companies implement social media strategies?

Privacy Legislation’s Potential Impact on Online Media April 18, 2011

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Last week, the bipartisan Kerry-McCain bill proposed legislation on a Commercial Privacy Bill of Rights that would put the Federal Trade Commission in charge of policing the online collection, sharing and use of personal information. Because the legislation is watered down relative to prior proposals, the Kerry-McCain bill will face the least industry resistance and is more likely to be passed this year. Passage would shift some power in online media, and force changes in the way online ad networks and other targeters work with content sites.

The proposed bill is relatively business-friendly, so much so that it’s drawing criticism from privacy rights activists. The bill:

  • Focuses explicitly on the use of personal information for behavioral ad targeting — and particularly on data sharing between companies — rather than information collection in general.
  • Mandates opt-out policies for personal information use, but only requires tighter opt-in permission for sharing “sensitive” personally identifiable information related to religion, health and finances.
  • Enables what some are calling a Facebook loophole that imposes lighter restrictions on web-wide information collection and use by companies where the user has an account. This would favor Facebook Connect over ad networks.
  • Is strict about data-sharing for behavioral targeting via third parties (data collectors and ad networks), but much looser on ad targeting done by a publisher that collects the data on its own site.
  • Does not address “Do Not Track,” the concept of a universal opt-out mechanism that users broadcast to sites popularized by the FTC last December. In February, Congresswoman Jackie Speier, D-Calif., proposed that the FTC create and manage a Do Not Track framework.

Although advertising industry groups are predictably resistant to any kind of regulation, their initial reactions to Kerry-McCain seem more muted than concerns they had prior to the bill’s introduction. Big tech companies like Facebook, Microsoft, eBay, Hewlett-Packard and Intel expressed support for the bill. The trade groups are probably relieved about the absence of Do Not Track, which they fear encourages users to block all cookies and customization indiscriminately, and requires potentially costly support from ad servers, ad networks and sites. Apple is the latest browser maker to experiment with Do Not Track support, after Mozilla and Microsoft; Google favors an alternative approach that maintains user opt-outs.

Privacy Legislation Impact Scenarios

The promise of online advertising has been the potential combination of television-like reach with precision targeting. Passage of the Kerry-McCain bill or something similar will have the following effects on the online media landscape:

  • Online content sites: Don’t call me a conspiracy theorist, but some traditional publishers like the Wall Street Journal might be perfectly happy without web-wide behavioral targeting. They could tout the value of their online/offline audience and promote contextual targeting and sponsorships. As noted, publishers would able to follow and target a user within their own site, which would benefit portals like Yahoo and AOL, which have huge audiences and broad variety of content.
  • Online advertising ecosystem: The bill’s restrictive approach to behavioral targeting favors search advertising over display ad formats. It also weakens industry efforts to deliver attribution, i.e., understanding and valuing the longer-term effects of seeing brand advertising. The data sharing guidelines could force data miners (Experian, Audience Science, BlueKai) and ad networks (DoubleClick, ValueClick, 24/7 Real Media) to secure more formal contractual relationships with content sites that have registered users. And the legislation seems to leave room for third parties to take user info and create anonymized groups of targetable customer “types” based on demographics and behavior.
  • Social targeting: Today, most third-party social targeters (Lotame, 33Across, Media6Degrees, Rapleaf) base their analysis on tracking user behavior with their own cookies, rather than getting access to API data from Facebook or Twitter. Legislation may make them pay for access, and even then, Facebook to-date has been stingy about data sharing. Likely it’s saving that targeting opportunity for itself.

Question of the week

How could potential privacy legislation affect online advertising?

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

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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?