Hasbro/Mattel to Scrabble Fans: No Love For You!

(full disclosure: I love Scrabble and I’m a Facebook Scrabulous junkie)

A few days ago, I read with horror that Hasbro/Mattel were threatening to shut down Scrabulous, my favorite Facebook application. There was a sense of deja vu as the article was written by Josh Quittner, former editor-in-chief of Business 2.0, the magazine we tried to save last summer with a Facebook group. Quittner, showing an enormous sense of humor, titled his article “Will someone please start a Facebook group to save Scrabulous?”

Yesterday morning, we learned that the two toy companies (who co-own the rights to the Scrabble game) have decided to escalate the legal procedures to Facebook directly and ask the social network site to shut down the very popular application (more than 600,000 active users per day, 26% of the application installed base).


Flickr picture by allyrose18

Following this news, fellow Toronto blogger Matthew Ingram wrote a mordant blog post called “Hasbro and Mattel: Dumb, dumb, dumb“. In it, Ingram writes “From a legal perspective, Hasbro and Mattel are no doubt totally within their rights to have the app removed, or to sue, or do whatever they wish to protect their trademark. But from a marketing perspective I think they are missing the point.”

He’s right. Between the cottage and our home, my family owns four versions of Scrabble (two Deluxe and two travel versions). We want to play the game offline and online but unfortunately Hasbro/Mattel haven’t built one for us within Facebook, where our network of friends currently “resides”. Scrabulous is the only solid alternative. It reminds me of the way the music industry threatens the largest consumers of music, the peer-to-peer network users, by calling them thieves and suing them (a study published late last year showed that P2P downloaders buy more music). Great way to treat your most important customer base…

From a marketing point of view, Hasbro/Mattel could have gone through different routes. Ingram suggested: “So why not just buy the app from the developers for a couple of hundred grand and call it a day?” Attaboy commenting on Ingram’s post proposed: ” they should be demanding that Scrabulous pay a license or share their revenues, not demanding that it be shut down.” I add that shutting down Scrabulous will only serve to anger your biggest Scrabble fans. The big lesson for corporations is: fill consumers’ needs or it will be filled by others, and you might end up looking like bad guys.


Idearc Sued by Geomas, Claims to Own Local Search

(via Wired)

London-based Geomas filed suit (.pdf) late last year against Verizon Communications and its spinoff Idearc Media in a Texas federal court, alleging their Superpages.com search site infringes upon patent No. 5,930,474, for an “Internet Organizer for Accessing Geographically and Topically Based Information.” Last month, U.S. District Judge T. John Ward ruled the case could proceed to the discovery phase.

The patent describes an internet search functionality in which users can locate a topic or business based on their location. If you’ve ever looked for a nearby doctor or plumber online using your ZIP code or city, according to Geomas, the site you used likely infringed upon the patent. “In a perfect world, we commercialize the technology and grab licensing fees,” said Jason Galanis, founder of Geomas, which was formerly called Yellowone Investments. “We aren’t necessarily looking to sue as our main business, but realistically I think that’s going to have to happen.”

If he’s right, those sites could be forced to pay, or shut down their local search services. Geomas could rake in hundreds of millions of dollars in the process, and as search stalwarts see more local and map-centric search traffic and advertising revenue, the Verizon suit could be just the tip of the legal and licensing iceberg. Galanis said he’s raised $20 million to support the venture and is attempting to arrange licensing meetings with at least 20 firms Geomas believes infringe upon the patent.

The patent appears broad and obvious today, but was filed in 1996, before internet search became so commonplace. Roughly 100 companies, including Verizon, cite ‘474 as prior art in their own patents. Unlike many of those other companies, however, Geomas hasn’t created a working technology based on the patent, which Perkins said could give defendants an advantage in court.

What it means: as the Wired article says, the patent appears quite broad and obvious. I am not a lawyer but I definitely invite everyone running a local search site to take a look at the filing and follow this one closely. I’d love to know what my friend Greg thinks (as he used to be a practicing attorney).

Quote of the Day: YouTube Becoming More Advertiser-Friendly

“The challenge for YouTube is to become more advertiser-friendly without sending too many of its 38 million-plus monthly visitors looking for the exits. Its mostly young audience is easily turned off by hard-sell advertising, industry executives say. “This type of audience that YouTube attracts is very, very fickle,” says Chad Stoller, executive director of emerging platforms for Organic, a digital marketing agency owned by Omnicom. “It is very much a ‘What have you done for me lately?’ audience.”

(via the Wall Street Journal)

What it means: I think advertising appearing on YouTube is not what will make users run away. The disappearance of copyrighted content will. As Jason Calacanis said a year ago, Youtube was built on copyright infringement. Watch the rise of DailyMotion, the heir to the video throne.

Online Media Predictions for 2007: Video Monetization Models Get Clearer, Sites Go Vertical, Local Search Continues to Grow, RSS Goes Prime Time

This is the time of the year I like best when everyone starts posting their 2007 predictions around multiple topics. I’m a sucker for these things. I could read predictions all year long!

I just happened to find this compilation of predictions by Justin Patten from HumanLaw.org. I might get back to analyzing the whole list but one of them jumped at me: the Online Media 2007 predictions by Cory Treffiletti at MediaPost.

Here are some highlights from that Cory’s interesting list of media predictions:

  1. Copyright and user-generated content. “Google will put to rest two of the larger issues surrounding the potential monetization of YouTube: copyright and user-generated content. Legal precedent will be set and we will see the establishment of a compensation model for the redistribution of video content through the Internet.”
  2. Archive television catalogues will go online with burn-to-order biz models. “Major networks (ABC, NBC, CBS, Fox) will begin to launch their catalogues online and may even move to “burn-to-order” business models where consumers will be able to create their very own compilations of their favorite classic TV shows and burn them to DVDs. “
  3. Social networks will embrace the long tail. “Social networks will segment down to smaller sub-segments of the audience and follow the path the long tail is pointing toward. I think we may see age groups focused in specific networks, or behavioral mindsets focused on these groups. “
  4. Personal start pages will rise in importance again (with behavioral targeting). The proverbial “digital dashboard” will likely become important again. These personal pages will likely be created by someone with a strong understanding of behavioral targeting–because if this is where I always start my day, they can keep track of where I go and how, to personalize the Web for me.
  5. We will see an increase in original video programming online
  6. Local search might come into its own.

What it means: 2006 was certainly the year of the video and in 2007, the same way the Napster story set the ground for a legitimate online music business, I think the YouTube acquisition by Google will definitely set a precedent for the legitimization of the online video business. Google will certainly develop a monetization model which will become the de facto standard. I’m also a strong believer in the verticalization of all sorts of sites (social networks, video sites, etc.). Being all things to everyone is a game that can only be won by a few players. Specialization must occur or you die (I’m sure Darwin must have said that!). Not sure about personal Web start pages (I believe the battle for digital dashboards will occur on the desktop) but I think RSS will play a bigger role in 2007. And, as most of you know, I’m a very strong believer in local search and local advertising.

Update: you can read the 2007 Praized Blog predictions here!