Speaking in London Wikipedia founder Jimmy Wales made an obvious but important observation: the collaborative aspect of the internet – what many would call a key aspect of “Web 2.0”, is still in its infancy.
Although Wales seemed to focus on video collaboration and how that could improve I’d suggest that the real power of the online medium will *not* be video – rather we’ll find that many different combinations of photos, videos, and community will evolve into the next key style of web interaction.
This could be along the lines of a more powerful and more ubiquitous Flickr, acting within loose alliances of connected niche sites connected by Facebook and Myspace and Google Social and Open ID.
The niche aspect of the internet is already clear in Politics, where you find blogs and commenters and social networkers sticking pretty close to home, preaching to their own choirs and repeating the same themes throughout loosely connected social networks dominated these days by either Obama supporters or Obama bashers (who generally are McCain supporters but almost never talk about McCain!).
Obviously there are many, many exceptions, but if you look at many of the most successful major blog efforts it is interesting how partisan they are and how uninterested they are in providing more than ideological fodder consistent with what their readers already think: DailyKOS, DrudgeReport, Huffington Post, WorldNewsDaily are a handful of commercially successful sites that add little to an informed discussion but remain more popular than the far more balanced views you’ll find elsewhere. It’s encouraging that CNN and other major news outlets are looking more to interactivity and blogging, though I predict they’ll find it very challenging to monetize these social media assets in the amounts to which they are accustomed. As with Yellow Page websites, I think major media blog sites may struggle with the difference between advertising costs and expectations online and off.
Joe Duck 
you know what’s really sad is that some dude from oregon’s personal blog is providing infinitely more useful news and perspective than all those websites you just listed. i think you oughtta be editing some of those bigger-name sources. too bad you’ve already got a job. 😛
Hey, thanks Jay!
The fragmentation of the internet and its ad-hoc identity changes create a certain lack of collaboration.
Consider a blog that is normally devoted to some topic but suddenly starts to discuss some topic of great interest and treats it very well. How is this site going to be found and evaluated?
Consider a forum that deals with Travel to Las Vegas: a community forms, but there are several such separately owned and operated communities. Would a truly collaborative net combine them? Would strength in numbers help advertising revenue but hurt the sense of being a small intimate group?
Consider the world of discussing True Crime: ZILLIONS of sites, some quite good. Zillions of duplicate and repetitive posts, zillions of useless posts. Does collaboration have to involve ranking?
Just as airlines now make money on the traveller’s hotels and rental cars rather than the airline ticket, will websites make money on the collaborative value of the net or merely on the site’s actual content. Any website might feature an inventory of Mystery Movies, but the real ‘value’ in such an inventory will be enhancements that comments, recommendations and a sense of friendship among viewers provides. So just as providing an airplane ride becomes less valuable than capturing the rider’s ancillary spending will a Collaborative Web result in providing a film inventory being of little value in comparison to providing the ‘virtual popcorn and virtual shared experience’?
will a Collaborative Web result in providing a film inventory being of little value in comparison to providing the ‘virtual popcorn and virtual shared experience’?
Brilliantly put FG. I think the answer may be “yes” though I’m not sure there will be enough money in that space to create a lot of innovation. Embedded pay to click ads remain the key form on online ads though image icon ads are doing well in terms of revenues for highly targeted sites that can change a lot. I do not think those image ads “work” very well were the pay to clicks generally do if managed correctly.
There is now a prevailing idea in the startup community that “information deserves to be free” and online companies need to make their money with the collateral stuff. As information floods the internet and social networking takes over many argue that success will only come to those who manage the organization and socializing of that info very cleverly.
Okay… lets continue the analogy:
The Business Enterprise consists of providing an inventory of films for people to watch over the internet at their leisure.
We acknowledge that there ain’t much money being made in providing films; the money will come from providing the “experience” which consists of virtual popcorn, virtual companions, commentary about films, suggestions of films, … but how does one commoditize the “information” of just WHO is attracted to the site for the virtual experience of watching the film with someone in cyberspace? Is the social networking an ad-hoc process? A self-curated one? A professionally curated one? How do you maximize a website’s profits if the product is “a pint of ice-cream and two spoons” but niether the ice cream nor the spoons actually exist? Does the lovely young lady who passes up a REAL date make money for the website by accepting a virtual date to see a film? If everyone is providing “sizzle but not steaks”…. won’t the entire fad collapse at some point in time???
Some points to consider:
One Irish airline company recently refused to honor tickets sold by travel aggregators because the airline only got the airplane ticket revenue and it was the travel aggregator that skimmed the more profitable revenue from hotel reservations, rental cars and restaurant cyber-coupons.
Given the fact that the information relating to a customer’s actual location and actual spending habits is MORE profitable than providing the airplane ride, the question becomes how do you acquire the information and how to you “cherry pick” the market to get the most profitable travellers.
In the Virtual Movie Experience analogy… how do you go about getting the dedicated members since its the socially networked members that provide the revenue, NOT the actual rental of the movie. In providing ever more ephemeral abstractions such as virtual popcorn and virtual icecream and virtual companions and virtual running commentary about the movie and the “experience” does one improve revenue or merely run up programming and artificial intelligence costs?
A travel site can profit from attracting people who travel frequently but also people who travel to particular destinations and have intereststs that are KNOWN to the travel site (this makes the local fish restaurant happy to pay the travel site… it knows that a particular traveller not only eats out frequently but also that he likes to order salmon and likes to go to Salmon Fishing Retreats). Will all e-commerce soon evolve into social network oriented commerce? If the information is to be free, the networked relationships are the real money makers … but can’t someone come along and form yet another darned Social Networking site and steal all the customers???
FG I think you have framed the travel issues really well.
I don’t have clear answers though most of us trying to make a buck in the travel space (and most internet niches) are assuming that money will continue to come mostly from Google Adsense ads placed in context on pages (ie content driven per click keyword revenue).
Mobile advertising will probably take this form as well and is likely to increasingly be a key part of the travel market as smartphones are used to choose restaurants, attractions, lodging. However I think that, like video, the potential to make billions from mobile advertising is far away and elusive.
A key challenge for publishers is that the number of websites will likely grow much faster than ad revenues, so more sites will share fewer dollars. Although contrary to what you note above it’s actually hard for brand new sites to sweeep in with a successful idea and take away the market because Google prominence is expensive to buy and increasingly hard to get on the cheap even with clever search optimization. Google appears to be “rewarding” older, established sites with high ranks. I think this is partly based on greater authority (links and such) for the older sites but also a Google anti-spam measure. A 5 year old website is very likely “legitimate” and providing good info where a 5 day old website may simply have been create to manipulate ranks. This leads to a major defect in Google which is that brand new info tends to be hard to find. Conference info and dates, for example, are often misranked with older information about the conference. I know for a fact Google’s working on this problem and had a fun talk with one of the search team about this at the Google Party in August.
…. more coming soon – I need to elevate this and your comments to full blog posts because these are really key marketing issues for a lot of publishers …
Will all e-commerce soon evolve into social network oriented commerce? If the information is to be free, the networked relationships are the real money makers
No to first part, maybe to second. I think pay per click ads, where Google is dominant with Adwords for advertisers and Adsense for publishers, will be the big online ad kahuna for at least the next several years, esp. as advertising budgets shrink and ROI measures become even more of an advertising obsession (as they should be).
However a lot of folks are better that the answer to your second question is “yes” – that social networking and relationship marketing will be the key to the heart of consumers and their purchases.
My (minority) view however is that the potential to monetize social networks has been greatly exaggerated, and that Facebook’s fiascos in the realm of targeted biz to Facebooker marketing are a sign of how difficult it is to get people to “leave their friends” and go buy something.
Per click marketing was a brilliancy by Bill Gross of Overture that has been refined magnificently, algorithmically, by Google. It *enhances* in an honest and transparent way the search experience by providing clearly identified ads that are highly relevant to the search and product info experience.
I think marketing video and social is much harder because by definition it takes you out of the social relationship or away from the video you are watching. Exceptions to this will pop up here and there such as “let’s go buy something together now”, but I don’t see social as a prime marketing tool for many years. User profiles have enormous value to advertisers, but as we learned with Facebook Beacon even the perception the publisher is abusing that info leads to anxiety.
OK, this really need to be posts..
http://gimbolens
http://givaleriks.com