Raja Jasti’s Blog - Renaissance Thinking

April 25, 2010

Who rules the web?

Filed under: Internet — Raja @ 12:40 pm

Facebook or Google? Mike Arrington says it is the age of Facebook.

Two years ago I was on the Charlie Rose show and we talked about, among other startups and trends, Facebook. It wasn’t clear then that Facebook had what it took to become one of the great technology companies. They had conquered the college market and were destroying the hopes and dreams of MySpace. But they were also reeling from the Beacon debacle and hadn’t proven that they could turn those massive reach and page view numbers into sustainable revenue streams.

Fast forward to today. Those questions have been answered. Facebook is profitable and probably is running at a billion dollar plus revenue run rate today. They have 400 million users and 500 million people visit the site each month. Only Google, Microsoft and Yahoo have more monthly visitors than Facebook. And only Google has more page views. And they aren’t done growing yet. In a year they will likely be second on the list of unique visitors. In two years, they’ll probably be first.

Their vision of an open graph of people and things (with Facebook at the center) is becoming reality, and debates by technologists won’t changes that. Facebook is taking over our identity and we are going along with that happily. It will take a new technology paradigm to disrupt what Facebook is doing.

Someday, maybe a decade from now, some new technology will rise and allow other companies to threaten Facebook. But until then there is little to stop them. Their march to dominance has just begun.

Facebook today is more a humongous portal. It wants to be the social fabric of the web with its open graph strategy. Its social graph today maps people to people (friends). Facebook wants to extend the social graph to map people to things (what they like, buy etc). They can NOT do this from its portal alone. Social graph of people to things resides mostly outside of Facebook in places like Amazon, Netflix, Yelp, Pandora, Ebay, Paypal etc. Social graph of things is fragmented and controlled by many different companies. Facebook wants to aggregate them into one mother of all social graphs. That is what open graph is all about. It remains to be seen if they can succeed. If they do then they can rule the web. Adertisers will pay anything for that. Until then Google is still the king of the web.

April 20, 2010

Killer Teen Platform - Texting

Filed under: Mobile, Trends — Raja @ 7:22 pm

What is the best way to reach teens? Email, IM, Facebok or Twitter? None of the above. The answer is texting.

One third of US teens text at least 100 times a day. Think about that? It is mind boggling. 100 or more messages a day.

File photo of contestants competing in the the LG Mobile Worldcup Texting Championship in New York 

LOS ANGELES (Reuters) – A third of U.S. teenagers with cell phones send more than 100 texts a day as texting has exploded to become the most popular means of communication for young people, according to new research.

The study by the Pew Internet and American Life Project, which offers a glimpse into teen culture and communication, found that texting has risen dramatically even since 2008, eclipsing cell phone calls, instant messaging, social networks — and talking face-to-face.

The Pew Research Center said that three-fourths of young people between the ages of 12 and 17 now own cell phones and of those that do, girls typically send or receive 80 text messages per day and boys, 30 per day.

“Texting is now the central hub of communication in the lives of teens today, and it has really skyrocketed in the last 18 months,” Pew researcher Amanda Lenhart said, attributing the rise in part to payment plans that allow unlimited texting.

The study’s authors also say that, unlike phone calls, text messaging can be quietly carried out under the noses of parents, teachers or other authority figures and, unlike computers, it can be done almost anywhere.

“We’ve kind of hit a tipping point where now teens expect other teens to respond to text messaging and to be available,” Lenhart said. “There is definitely an element of text messaging that fits so seamlessly into their lives.”

Text messaging has become so much a part of teenagers’ lives that 87 percent of those who text said that they sleep with, or next to, their phone.

When we think of mobile apps we think of iphone apps. How about SMS apps?

Our Alerts360 SMS app platform is focused on that huge opportunity.

 

April 18, 2010

Is Google Past its Prime?

Filed under: Business, Internet, Mobile, Technology, Trends — Raja @ 10:27 am

I was speaking with a friend who works for a major internet company recently. He has a theory that Google is on its way down. He based his opinion on a few observations: 1. Google gets most of its revenue from search advertising 2. Search adverising is maturing 3. Google is not able to innovate in other areas 4. Google is losing the talent war to other upstarts like facebook, twitter and new startups.

He asked me what I thought. I told him that while I agree with majority of his observations I wouldn’t yet say their best days are behind. I think online advertising is still in its formative stages. Google is the dominant player there. There is another mammoth area where Google is well positioned to be a major player. That is mobile.  But they need to execute and innovate better than they are doing right now.

If you look at Google as a company they have more in common with Microsoft than you would think. They are good at improving something rather than creating something totally new. They were not the first search engine (altavista, yahoo, excite, lycos) but they created the best one. They were not the first to search advertising (goto.com) but they perfected it.

Let’s look at their other products. They were not the first to web mail, maps, web apps, display ads, rss reader, photos, video, blogs, social networking, browser, mobile os and mobile advertising. Out of these they have done a decent job in web mail, maps, rss reader and mobile os through internal development and in blogs and video through acquisition. But none of these have provided a major alternative stream of revenue yet. They have been a one trick pony so far.

What is their problem? They are too much in a reactive mode. They seem to lack a cohesive strategy. They spray and pray. They have mediocre me too products in too many areas (google buzz, orkut, picasa, google wave, nexus one). The innovation seems to stall in companies they acquire (blogger, youtube, dodgeball, feedburner).

What should they do? Just pick one or two major areas (besides search and digital advertising) and execute the hell out of it. What should these areas be? I would pick mobile and cloud and do everything to dominate these markets.

In the mobile area they should focus on making adroid the most pervasive open mobile OS in the world. Nexus one sends confusing signals to the market and partners. It seems like a desperate attempt to copy Apple’s strategy. Apple has a lot of experience in consumer devices and it is good at it. Google is not. Google should focus on its strength and that is being a platform.

On the cloud front, they should provide the infrastructure, platform, apps and monetization solutions to make is dead simple for everyone to move to the cloud. Gmail, google apps, maps, youtube, blogger etc. all come under this area. There are many holes for Google to fill here and they should do it ASAP.

I think the next great enabler is the combination of mobile and the cloud. I am talking about mobile apps powered by the cloud. This is a green field right now. Google can own it.

They should of course continue to execute their vision of organizaing all the world’s information and making it universally accessible and useful. This means continue to execute in search and online advertising.

So Eric Schmidt, there is your road map for success.

April 17, 2010

Customer Stalking

Filed under: Internet, Media, Trends — Raja @ 11:34 am

Web and mobile are changing the face of advertising as we know it.  Let me give you an exmple. I recenlty visted a website that sells a software product.  Soon after that google ads for the site have been following me whereever I go. I see ads for this site on the blogs I visit, youtube videos I watch etc. It is kind of creepy. Google is tracking me with cookies and is serving me ads to the site since they know that I visited this site (so I must be interested in their product, in this case they are wrong). These ads have nothing to do with the blogs/videos  they are being servied on. It is a new kind of contextual advertising. I call it customer stalking.

Whether we like it or not, companies like google know a lot about us.  Soon most business will have access to such data. They can use it to sell you more effectively or annoy with offers you don’t want.

NY Times writes about how web and mobile coupons are used by companies to deanonymize their customers.

For decades, shoppers have taken advantage of coupons. Now, the coupons are taking advantage of the shoppers.

A new breed of coupon,  printed from the Internet or sent to mobile phones, is packed with information about the customer who uses it. While the coupons look standard, their bar codes can be loaded with a startling amount of data, including identification about the customer, Internet address, Facebook page information and even the search terms the customer used to find the coupon in the first place.

And all that information follows that customer into the mall. For example, if a man walks into a Filene’s Basement to buy a suit for his wedding and shows a coupon he retrieved online, the company’s marketing agency can figure out whether he used the search terms “Hugo Boss suit” or “discount wedding clothes” to research his purchase (just don’t tell his fiancée).

Coupons from the Internet are the fastest-growing part of the coupon world — their redemption increased 263 percent to about 50 million coupons in 2009, according to the coupon-processing company Inmar. Using coupons to link Internet behavior with in-store shopping lets retailers figure out which ad slogans or online product promotions work best, how long someone waits between searching and shopping, even what offers a shopper will respond to or ignore.

The coupons can, in some cases, be tracked not just to an anonymous shopper but to an identifiable person: a retailer could know that Amy Smith printed a 15 percent-off coupon after searching for appliance discounts at Ebates.com on Friday at 1:30 p.m. and redeemed it later that afternoon at the store.

“You can really key into who they are,” said Don Batsford Jr., who works on online advertising for the tax preparation company Jackson Hewitt, whose coupons include search information. “It’s almost like being able to read their mind, because they’re confessing to the search engine what they’re looking for.”

While companies once had a slim dossier on each consumer, they now have databases packed with information. And every time a person goes shopping, visits a Web site or buys something, the database gets another entry.

“There is a feeling that anonymity in this space is kind of dead,” said Chris Jay Hoofnagle, director of the Berkeley Center for Law and Technology’s information privacy programs.

Welcome to wonderful era of customer stalking.

April 16, 2010

Netflix on Wii

Filed under: Entertainment, Internet, Media — Raja @ 12:02 pm

Netflix sent us a DVD that enables movie streaming using Wii. it is quite transformative. We are no longer limited to DVDs or laptops to watch Netflix movies. The interface could be better (it doesn’t have search), but it is a start. I can see Netflix streaming really going mainstream with something like this. I was thinking of getting Roku box, but I don’t need it anymore.

Netflix also added subtitles to their streams. This is a much needed feaure as we watch a lot of international movies.

April 15, 2010

The Economics of Social Media

Filed under: Internet, Media — Raja @ 3:15 pm

Ning, one of the high profile social networking companies, has decided to shift its business model from freemium to exlusively premium. It is also laying off 40% of its staff.

Is this an indicator of the viability of ad supported social media or is this a case of failed execution?

They have enough traffic (7M monthly uniques) to attract advertisers. So why ditch ad supproted free service and go fully paid? This probably has to do with the challenges of monetizing social networking users and user generated content.

What does this say about Facebook and Twitter? Facebook is orders of magnitude bigger, so it may have economies of scale to make advertising work. Twitter is not there yet.

It will be interesting to see what this shakeup means for social media and user genetrated content.

Software and Media

Filed under: Internet, Media, Technology, Trends — Raja @ 10:42 am

Traditionally software and media are seen as separate products. They do overlap when it came to web media, but they are seen as two different worlds with separate epicenters in Silicon Valley and Hollywood.

There is a growing sentiment in the web2.0 circles that software is media. Fred wilson blogged about it today.

Media are the tools that are used to communicate. And software that runs on the web is part of the media landscape. That has certainly been true for things like online publications and online video and they are accepted as part of the media landscape. But I think all software should be characterized and thought of as media.

Like other forms of media, software produces an emotional reaction when we use it. Software needs to have a “voice.” It needs to be more than a simple utility. We need to feel something when we use software. The best software does this incredibly well.

Like media, the interfaces that present software to us need to be stylized, designed, and elegant. Software can be beautiful and the best software is beautiful.

And like media, the most important measurement for software today is the number of engaged users. The more engaged users a piece of software has, the more impactful it can be.

Many will read this and say “well that might be true for consumer software but not for enterprise software.” I don’t think so. This week we started using a web-based applicant tracking system for our hiring process. We have close to 400 applicants for the two jobs we posted and we need something to track all the applicants and help us run the process. We looked at a number of options and selected one of them. This is enterprise software, but I want the same experience with this software that I want with the best consumer software I use. I want it to be attractive, elegant, I want it to have a voice, I want it to be more than a simple utility.

Once we’ve begun to treat some of the software in our lives as media, we are going to treat all the software in our lives as media. And the software that is ugly, void of emotion and voice will not work as well for us. So I believe all software is media and will be seen as such by its users.

This trend certainly started from the consumer web. Media is consumed and web software is consumed not owned. As enterprise software is moving to the cloud it also is becoming a consumable rather than something that needs to be owned and operated. This is the trend that drives the mediafication of software.

April 13, 2010

Fox and NBC Launch Mobile JV

Filed under: Entertainment, Media, Mobile — Raja @ 2:10 pm

Fox, NBC and others are launching a joint venture mobile content service a la Hulu.

According to a release issued today, Fox, Gannett Broadcasting, Hearst Television, NBC, and eight other broadcast giants are launching a joint venture to develop a new national mobile content service.

The release says that the consortium will utilize existing “broadcast spectrum,” to enable member companies to provide content to mobile devices, including live and on-demand video, local and national news from print and electronic sources, as well as sports and entertainment programming.

Broadcast technology will come from to three station groups, Fox, NBC & Telemundo, and ION, and and the nine local broadcast groups, which are Belo, Cox, E.W. Scripps, Gannett, Hearst, Media General, Meredith, Post Newsweek and Raycom. Separately, these nine local broadcast companies formed Pearl Mobile DTV Company LLC as a vehicle for their involvement in the venture.

Twitter announces business model

Filed under: Internet, Media — Raja @ 11:03 am

Twitter finally discloses its plans to monetize its users. It is called promoted tweets.

 

Twitter will unveil on Tuesday a much-anticipated plan for making money from advertising, finally answering the question of how the company expects to turn its exponential growth into revenue.

The advertising program, which Twitter calls Promoted Tweets, will show up when Twitter users search for keywords that the advertisers have bought to link to their ads. Later, Twitter plans to show promoted posts in the stream of Twitter posts, based on how relevant they might be to a particular user.

Several companies will run ads, including Best Buy, Virgin America, Starbucks and Bravo.

“The idea behind Promoted Tweets is that we want to enhance the communications that companies are already having with customers on Twitter,” said Dick Costolo, Twitter’s chief operating officer.

This idea is clearly inspired by paid search model invented by GoTo.com and perfected by Google. This model mixes paid and organic search results. Interestingly Bill Gross, founder of GoTo.com, has launched a twitter ad platform  called Tweetup.com. It is being billed as AdSense for Twitter.

I think promoted tweets is an interesting idea. It remains to be seen how effective it will be as an advertising vehicle. If it works, it will be closer to display (brand) advertising than to google search advertising. This is the reason why twitter is using CPM (based on views/impressions) model for promoted tweets.

Twitter is using a metric called resonance to determine if a promoted tweet should be displayed or not. This is their version of relevance that google uses for search ads.

I see twitter mainly as a brand enagement platform, not so much as social  untility like facebook. Twitter can actually offer premimum accounts for brands to effectively engage with their fan/user community. That would be a solid business model. I can see them offering something like this fairly soon. There are some startusp such a cotweet that address this space.

April 12, 2010

New Health Law offers free preventive healthcare

Filed under: general — Raja @ 3:22 pm

From NYT:

You may not yet be aware, though, of another notable improvement to insurance, a change that could save a consumer or family hundreds of dollars a year. Under the new law, insurers must offer preventive services — like immunizations, cancer screenings and checkups — to consumers as part of the insurance policy, at no additional out-of-pocket charge.

The idea is that healthy Americans will be less costly Americans.

“This is transformative,” says Helen Darling, president of the National Business Group on Health, a nonprofit organization for large employers. “We’re moving from an insurance model that was based on treating illness and injury, to a model that’s focused on improving an individual’s health and identifying risk factors.”

The trend toward offering free preventive care has been gaining steam for a decade among large companies that provide employee health benefits. “Employers recognize that if they want to control costs, they have to persuade their workers to be healthier, including their children,” Ms. Darling said.

Three out of four large companies now offer free preventive health services to their workers, according to a 2009 survey by Mercer, a benefits consulting firm. Smaller employers, though, and individual health plans have been less likely to offer free care of any type.

But under the new law, more generous “wellness” benefits should eventually be available to almost all Americans with insurance.

“Eventually” is the operable word, though. Although this feature of the law goes into effect at the end of September, it will apply to new insurance policies only. That means if you switch to a different policy, or buy a new one, the preventive services will be offered.

This is a very good thing in the long term. Current US Healthcare incetivizes treatment as opposed to prevention. This is one of the reasons for the high healthcare costs. Offering free preventive care will serve to reduce expensive treatment in the long run and lower costs.

Older Posts »

Powered by WordPress