allensblog

Convergence on Two National Newspapers: Liberal or Conservative?

As the WSJ and NYT become our only surviving national US newspapers (leaving out USA Today and Washington Post), which is advantaged in reaching a large national audience: the clearly liberal NYT or the clearly conservative WSJ?  Maybe the industry will segment along current political lines, much as it has in other countries historically.

IT Glory Days

Interesting column in last Sunday's NYT by Randall Stross.  Continues a debate fomented by Larry Ellison (good summary of it here in the context of the Oracle/PeopleSoft merger) about whether IT is a "mature" industry (as opposed to a growth industry).  This is a hot topic in the VC world right now (e.g., is Saas going to save enterprise software investing because it's outgrowing the general market for IT spending?), and has implications for entrepreneurs - large VC funds can't make money investing in successful, but small-to-medium size outcomes.

More to come as part of the series on "Financing Innovation".

Modes of Online Collaboration -- Why not a hybrid?

There seem to be two major modes of online collaboration:  (1) the "messaging" model (email, IM, texting -- often with content files attached to the message (e.g., an Office file)) and the (2) the "shared workspace" model (e.g., wikis, Sharepoint, the various "web meeting" applications).  Each has strong advantages and disadvantages.

With the messaging model, it can quickly become difficult to keep track of the "master" file (e.g., the sales presentation in an attached Powerpoint file), and generate lots of "messaging" activity that is not productive.

With the shared workspace model, the need to shift from the primary "messaging" mode to a different mode of work (i.e., logging into a shared space that feels more oblique or indirect) can make the application seem more difficult and impede usage.

I haven't seen any good attempts to find a blended or hybrid model; I'd love to hear from anyone who knows of interesting attempts to do so.

Twitter Doesn't Need Revenue to be Valuable

Lots of debate going on about how Twitter will eventually monetize their traffic (or not).  And, they may actually figure out ways to do so.  But the economic value in Twitter is not in the monetization of their own traffic as an independent company, but rather in eventually selling to a larger "platform" company that can use Twitter's enormous traffic (plus, see yesterday's post in TechCrunch) across a larger platform to make money in ways other than display ads.

Media that is highly and fundamentally interactive (e.g., Facebook pages, Tweets -- and most "communications media" such as email and other messaging media (e.g., IM, texting) are lousy places to do advertising.  Users are simply too engaged with the "content" to notice marketing messages.  Hence the well-documented slide in eCPM's for (especially) display ads on social media sites.  So, Twitter, the apotheosis of engaging, fundamentally interactive media, is a lousy advertising medium.   So, too, were ICQ, Hotmail, YouTube, etc., yet they were enormously valuable to larger platforms that could find a way to leverage the enourmous usage each of the companies generated.

The investors (at least the early ones) likely will make a bundle on Twitter when it gets sold, even though Twitter, itself, may not be a huge revenue generator.

Facebook and Twitter = "Dumb Pipes"?

A story today in the FT reminded me of a conversation I'd had with a friend who is the head of a media buying agency a few weeks ago about how Facebook (and maybe Twitter) are becoming "dumb pipes" (more charitably, "platforms").   The argument:  FB and Twitter are fostering large and growing economies (for free) that are (or will be) larger than the revenues of FB or Twitter themselves (if Twitter eventually does have revenue).  FB and Twitter bear the expense of supporting these economies, but generate no revenue from them (or precious little given the ad rates on social media sites).

Case in point:  my friend mentioned that his clients had spent "tens of millions of dollars" in the past 12 months on marketing activities that leveraged FB (e.g., marketing campaigns using FB groups, FB apps, etc.), but that none of the "spend" was on FB "advertising", so FB received no revenue from the "tens of millions of dollars".

The same may well be true for Twitter, although, as I've argued elsewhere, Twitter may well become a valuable company despite never having substantial revenues (a la ICQ, Hotmail, YouTube, et al.).

Interesting challenge for FB (and Twitter and MySpace) to figure out how to monetize the robust and growing economic activity that takes place through their "pipes" (on their platforms) in ways other than putting display ads on the page views generated by the economic activity.

Kind of like some challenges facing the providers of other potentially "dumb pipes":  cable MSO's, phone companies, wireless carriers, etc.

Javascript vs. Flash

Is is just me, or am I seeing much more Javascript these days?  It seems to me that my browser (all of them: IE, Firefox and Chrome) alerts me that almost every web site I visit wants to install Javascript.  Anyone else encountering this?  If true, anyone have an explanation?