The Next Developer Land Grab: The Kindle?

Amazon Kindle

Amongst rumors of the impending arrival of the Apple Tablet, Amazon announced this week that they’re opening the Kindle, their famous e-reader, to external application developers. Techcrunch is not impressed and says “If you are going to try to steal Apple’s thunder just before its big Tablet announcement, you are going to have to do a little bit better than E-Ink Sudoku” but a lot of people are drinking the Apple kool-aid before even seeing a product…

As for the size of the installed base, Mitch Ratcliffe at ZDNet thinks Amazon has sold approximately 1.5 million Kindles so far.

What it means: I think it’s important news. When new “platforms” open up to developers, it’s the first ones in that get the biggest bang for their development efforts. I would suggest to everyone currently involved in mobile applications to sign up for the Kindle dev kit. There are probably interesting hybrid print/online applications that can be deployed on the Kindle (I’m looking at you directory publishers…). You can sign up for the development kit here.

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Who Will Own “Where”?

Most of my business readings this weekend have been various analysis of the potential Yahoo/Microsoft deal. Unfortunately, I haven’t been impressed by the level of the debate as many of the comments were all about “Microsoft is evil” and its corollary “Google is not”. I was hoping for more level-headed reflections but I think the involvement of Microsoft in the story created a highly-emotional environment in the tech blogosphere.

One of them stood out for me. Tim O’Reilly looked at the big picture and tries to extract some industry meaning, showing once again his crystal ball is one of the most polished in the industry. Talking about industry consolidation in general and Yahoo in particular, he offered:

The web companies that have a chance of surviving as independent entities are those that truly understand and exploit the rules of the new platform: harnessing collective intelligence to build rich troves of data that literally get better the more people use the application, running ahead of any possible competitor simply because of the network effects that pile on to keep them improving faster than any newcomer. Some of Yahoo!s properties (e.g. Flickr) have that characteristic, but Yahoo!’s business as a whole did not. It was ultimately a halfway house on the way to Web 2.0. It’s original business was based on a literal aggregation of user generated content, but it quickly became a more traditional content and services portal. Later companies like Google leapfrogged it by building services that tapped more directly into the native network effects of the Web.

The other important characteristic of the winners, of course, is that they tap into a data stream that really matters. Owning network effects around consumer photos, for instance, is much less powerful than owning network effects around paid search. So one of the key questions we have to ask ourselves going forward is this: what are the major data subsystems of the future Internet Operating System. Location, identity (and social graph), search (and not just web search but also product search, in which Amazon has a very strong position) come to mind. In a lot of ways, finding the data associated with the old vectors who, what, when, where, and how is a good place to start.

What it means: O’Reilly posits that local search (Location + Search) is one of the key elements of the future Internet Operating System. I completely agree with him. I would add that no one has locked the market yet. No one in that field is deeply embedded yet in the Web O/S. So, this still represents a major market opportunity. And the big question remains: who will own “where”?

What the Adult Industry Could Teach Traditional Media

You often hear about how the adult industry is an early adopter of new technologies and new business models but you rarely can read serious business articles that talk about how it could influence traditional media. I’ve recently read an interesting one in Revenue Magazine.

Here’s an excerpt:

“In the adult world, the profits are in the video content, and affiliates lure and hook customers by showing image galleries (often thumbnails) of naked people, and then directing them to the publishers who sell unlimited access accounts. Collins (Shawn Collins, co-founder of the Affiliate Summit conference) says video, audio or print media companies could greatly expand their conversions by using affiliates to distribute free samples of their content.

For example, the television networks or movie sellers could distribute clips from their sitcoms or films to affiliates to pique consumer interest, which enables customers to realize the value of the content, according to Collins. Media companies have yet to exploit the power of distributing content through affiliates, Collins says, and were slow to team up with video search engines such as YouTube.com to increase their exposure.

This strategy of partnering with large search engines and requiring users to register is the opposite of the niche marketing that has been critical to the adult industry’s success. Video search engine sites have too much content to successfully promote niches (such as British comedy or period-piece dramas) that would convert well as independent affiliate sites.

“Showing teaser videos and allowing them to be distributed virally” could boost the sales of online video, Collins says. Online music stores should allow affiliates to host and play select songs for free, and Amazon should share its technology for previewing a few pages of a book with affiliates. Reuter’s news is one of the video services that allow affiliates to display its content, but the company keeps all of the revenue from its pre-roll ads, which takes away the incentive from affiliates.”

What it means: excellent insights on how to build a network of affiliate sites to promote traditional media content online. This clearly fits with the Verticalization trend I identified earlier this year. I wonder if there’s not a revenue model there for affiliate TV stations?

What’s a Blog Widget?

Since the acquisition of MyBlogLog by Yahoo, I’ve had many questions regarding blog widgets. Today’s New York Times (found via GigaOM) brings some light to that phenomenon.

What are they?

Widgets are elements, often in the left or right columns of a blog, that enhance its usefulness or aesthetic appeal. (The term “widgets,” confusingly, can also refer to compact applications that operate on a computer’s desktop.) “Widgets pull content or services from some other place on the Web, and put it into your personal page,” said Fred Wilson, a venture capitalist at Union Square Ventures in Manhattan. Typically, they’re built with Flash software from Adobe, or the JavaScript programming language, which ensures that they work with most Web browsers.”

Three categories:

“Ed Anuff, a co-founder of Widgetbox.com, divides widgets into three categories. “One is self-expression widgets, like photo galleries, games or YouTube videos that you like,” he said. The second category includes widgets that generate revenue for a blogger, like a box that displays auctions from a particular eBay category, or a blogger’s favorite DVDs from Amazon.com. The third category, Mr. Anuff said, encompasses “site-enhancement widgets, like discussion forums, news feeds or a guest book, which provide better utility for your Web site.”

Popular ones:

“According to Widgetbox, its most popular widget allows bloggers to incorporate an updated feed of news items from the site Digg into their blogs. Matt Mullenweg, creator of the WordPress blogging software, says the widgets that his users have been incorporating into their sites lately include Meebo, an instant-messaging application that allows blog authors to chat with their visitors. “One of my favorites,” Mr. Mullenweg said, “is the Sphere It widget, which pops up a window to show you articles and other blog posts related to what you’re reading.”

Business Models:

“Most widgets are available free, though they usually carry links or logos that promote the site that supplies them, and they sometimes have advertising. As with other phenomena that make up the wave known as Web 2.0, blog widgets don’t always have clear revenue potential. “As a widget user, it’s not my problem to worry about how they’re going to make money,” said Guy Kawasaki, an author, blogger and venture capitalist. “But as an investor, would I invest in a widget company giving things away for free? It’s hard to see a business model for it, other than to hope that Google buys you.” Mr. Anuff predicted, however, that “by the second half of 2007, some widgets will shift to a subscription basis.” For some sites that offer fee-based services, widgets can act as roadside billboards that help lure traffic. ”

What it means: widgets are part of the atomization of the Web that I listed in my 2007 predictions. They allow decentralization of content, features and functionalities. Widgets are also available for Microsoft Vista (called gadgets) or the various start pages like the Google home page (also called gadgets) or NetVibes (called modules). The MySpace ecosystem has also seen an explosion of plug-ins and widgets. All are interesting way to propagate your content in other web sites, while maintaining control of it.

User-Generated Content: Recap of 2006 and What to Expect in 2007

This article by Bambi Francisco in MarketWatch recaps 2006 and sets the stage for 2007 in terms of the impact of user-generated content:

“Given our obsession with users, and ourselves, I’ve highlighted what will be in demand or wanted in 2007 as the audience is increasingly relied upon as the voice, the experts, the supporting actors and/or virtual stars of tomorrow. These bottoms-up celebrities combined with traditional top-down stars will increasingly dominate the new media landscape of 2007.

Wanted: Your contribution

The concept of a wiki — a site that essentially enables egalitarian editing and collaboration of everyone from experts to novices — has been around for many years. The best-known example is Wikipedia, an encyclopedia that anyone can edit. Today, Wikipedia has 725 million page views per month, up more than 400% from last year, according to Nielsen//NetRatings. And, the beauty of Wikipedia is that it has about 6 employees. This year, the wiki model exploded to the point that now a book is being written in wiki style. Barry Libert is spearheading the first book project to be written in such a manner. (…)

Wanted: Your expertise

“Everyone is an expert [in something],” according to Richard Rosenblatt, who was the former chairman of MySpace and who sold the social network to News Corp last year for $580 million. Today, Rosenblatt is heading up Demand Media, which he calls a new media site. Demand Media is looking for professional, expert content on any topic since the core of its strategy is to start with trusted, professional content and then provide the tools to let people contribute related content or opinions. Some of Demand Media’s sites that use expert commentary include eHow, trails.com, gardenguides.com and golflink.com.

Yahoo Answers is probably the most popular of services that rely on volunteer experts to give people answers to their questions. (…) Yahoo Answers, which now has 60 million users and 160 million answers, marked its one-year anniversary in early December. Those answers helped drive Yahoo Answers traffic from practically zero in November 2005 to 14.5 million this November, according to Nielsen//NetRatings. In a survey conducted by Yahoo Answers and Harris Interactive, a third of online adults have used a Q&A site. (…)

Wanted: Your opinions and comments

About 30% of online news site Topix.net comes from user-generated or reader comments. That’s expected to jump to about 50% next year, Topix.net’s CEO Rich Skrenta tells me. Take a look across the blogosphere and you’ll note that comments make up a large part of the content.

Wanted: Your history

User-generated content can come in the form of a users’ history. As long as people can know your history, it can help form recommendations that drive sales of products, movie rentals, or news articles. In the past, roughly 5% of Amazon‘s book sales came from recommendations, as estimated by analysts. According to Netflix members select approximately 60 percent of their movies based on movie recommendations tailored to their individual tastes.

Wanted: Your reviews, ratings

It all started with ePinions back in the late ’90s. It was a site that thrived on users giving their opinions about sundry topics. Now, reviews and ratings are not only everywhere, they’re essential in influencing what we buy, where we eat, and what we read. They’ve become a great filtering process. They’re the reason sellers are trusted on eBay. They’re the reason local restaurants which are reviewed by users on Yelp.com get new clients. They’re the reason we read certain articles from across the Web, thanks to Digg.com, which relies on users to vote for articles they like by submitting it.

Wanted: Your profiles and journals

We live in an age where what we do, and who we are, is the news. That became clearer to me after Facebook decided to make any update on a users’ profile become a news feed. While the service wasn’t very popular when announced, I think the millennial generation will get used to it. Profiles of every day people make up the social network sites — the fastest-growing sites — on the Web. News Corp’s MySpace, with 115 million members creating the content with their own profiles, saw page views and unique visitors more than double in November. Microsoft’s Windows Live Spaces, which has 70 million members creating profiles, also saw its unique visitors and page views more than double last month.

Wanted: Your video creations

NBC is integrating user-submitted videos, such as favorite pets and wedding woes. They’ll be videos that are family-oriented, said Mark Moore, founder and CEO of One True Media, the technology company hosting the user-submitted videos. Mixing user-submitted video and traditional content will become a bigger deal in 2007.

What it means: this is a great summary of the major pillars of user-generated content. Still looking for a good New Year’s resolution? Make sure you open the conversation with your users. They want to tell you something!