Cam Balzer's Web-Cite

Google and Friends to Open Source the Social Graph?

All the buzz is social networks these days. I initially wrote the Google "maka-maka" rumors off as a "me-too" strategy. But looks they're taking a significantly different tack. Google and Friends to Gang Up on Facebook - New York Times.

At the Web 2.0 Summit in San Fran two weeks ago, one of the biggest Facebook app developers, Slide, cryptically alluded to new opp that they were spending 80% of their time on. Looks like it was this trans-site platform.

I'm guessing what we're going to see is foreshadowed in Brad Fitzpatrick's manifesto on the social graph. Brad created LiveJournal, an early blogging platform, and now works for Google.

A centralized "owner" of the social graph is bad for the Internet. I'm not saying anybody should ban Facebook, though! Far from it. It's a great product, and I love it, but the graph needs to exist outside of Facebook. MySpace also has a lot of good data, but not all of it. Likewise LiveJournal, Digg, Twitter, Zooomr, Pownce, Friendster, Plaxo, the list goes on. More important is that any one of these sites shouldn't own it; nobody/everybody should. It should just exist.

He goes on to describe some of the necessary components for an open platform approach to centralizing this type of data. This would be a key component of any system to link multiple social networks together into an open API.

UPDATES:

• It's called OpenSocial according to The Times
• TechCrunch has more details on the APIs.
• Google's on info will be available here on Thursday: code.google.com/apis/opensocial

One subject's experience with Radiohead's grand experiment

For those of you not following this, the popular band decided not to sign with a major label after their last deal expired. They produced In Rainbows on their own and have released it as a digital download (or deluxe vinyl+CD package) via their own site at a price solely determined by purchaser, with no guidance other than "It's up to you".

So. Me the music buyer. First off, I buy ALL my music online. Except under duress, including international releases (bought via Amazon sites in the appropriate country) because of draconian measures by iTunes and the industry to prevent easy electronic purchase. Or draconian bands not selling anything digitally. Like Radiohead until 2 weeks ago.

Second, I don't download MP3s online. Tried it. Boring waste of time. Much rather spend my time checking out recommendations from a smart recommendation engine (iTunes biggest weakness).

Combine those two factors with a certain period of life spent not exploring new music and you get the fact that I'd never heard Radiohead before. So, the "name your own price" (NYOP?) strategy was instantly appealing to me. My initial price? 0.00GBP. A risk-free trial. The site itself, while beautiful, was a bit sucky, taking several tries to complete a purchase, but they did capture some interesting and potentially valuable info about me, including mandatorially(?!) my mobile number. They did nothing to discourage or punish me for my no cash "transaction"... didn't take a credit card or tell me why it would be a good idea to pay more.

Successful immediate download and I was hooked on my first listen. Immediately ordered (see firstly, above) their previous album Kid A from BN.com via Digby (a surprisingly pleasant mCommerce experience). And have listened to it many times in the last two weeks. To the point where, I realized my free trial was up.

So, today I return to the site and pay them 6GBP for it, or roughly $12USD. Why that amount? Well, an album on iTunes is usually $10. I like this album more than the average album, so I paid more. Plus, I appreciate their experiment and want to reward them for taking the risk. Kid A cost around $18 on BN, but that involves atoms and boxes and people's physical effort hefting it around the world, none of which pertain here.

One surprising thing, though, is that Radiohead's site didn't remember me. My password didn't work and they didn't recognize the email address they sent my receipt to. Glitch? Or did they give up on me after my zero-sum transaction? Surprising either way and slightly inconvenient. But no big deal overall. Still like the album enough not to mind.

Stepping out of the subject's shoes, a couple thoughts from an ecommerce/internet strategy POV. First, on the notion of risk free trials. Why don't more businesses dealing in bits or very low cost atoms take this route? Common with software, but why not more common with music or design or literature or games or ??? Seems like the kind of fan you want as an artist is one willing to pay for what you're doing. Free gets a lot of people through the door. The really interested, grateful ones will thank you with their wallets. Call it the busker economy!

Second, why did they do this completely on their own? Would an Amazon or iTunes launch generate more downloads? Reports / rumors claim they have pushed 1.2M downloads at an average of 5USD to 5GBP in a couple of weeks. But other reports suggest that the site was so slow, 250-500K just downloaded it off P2P sites. A real infrastructure could have netted them enough to cover the middleman fees. So, iTunes: why not support artists directly with this strategy, and only take a share of the transactions over a minimum price.

And a question: does this only work for established b(r)ands? Could you build a band on free or do you need to establish a relationship first and then go free? Do people need to see a baseline value set before they can be trusted to respond with a fair NYOP valuation?

Overall, makes you wonder what other businesses could learn from this? Could airlines charge a base price and let users pay on the way off the plane based on the quality of their experience? How hungry would that make everyone to deliver a great experience? Or let users NYOP for extras like window/bulkhead/exit seats and allocate to highest bidder per flight? Zappos gives shoe buyers a free trial, by covering shipping both ways. I'm sure most of their buyers have noticed that they are not the cheapest option. The free trial pays off in loyalty and premium pricing. Who else could make a business work this way?

And the winner is...

Link: Microsoft Acquires $240 Million Stake In Facebook.

Facebook social ad platform?

here it comes! Facebook confirms big upcoming advertising announcement | The Social - CNET News.com.

Wasted Advertising, take 2

I've expanded a bit on my Corollary to Wanamaker in my latest Chief Marketer column: Untracked Conversions Mean Wasted Advertising.

DISCLAIMER on today's Web 2.0 posts...

my web 2.0 summit posts this morning are stream of conversation notes, mostly for my own benefit. i haven't proofed them or verified data. quotes are paraphrases. i disclaim expertise in most of these areas so probably got some details wrong too. that being said ;-O hope you find them useful. personally i hate reading this kind of post!

BTW, presenter's full names and associations are available on the Web 2.0 summit agenda in case i didn't fully capture.

Edge: Video panel - stream of discussion at web 2.0 summit

Joost and Current presenting.

Mike Volpi and Joel Hyatt. Om Malik moderating

MV: we're not married to desktop app.
JH: our charter is to use the power of the technology to unleash creativity to affect the product of tv and to change the whole experience. joost is about building community around what tv is. we're changing tv with the tools

OM: which model wins?
MV: three components of "tv": creation, distribution and device. distinct businesses and each is being impacted. different models can coexist
JH: we believe kind of content on each device will be different. we get hung up on the fact that technologically we CAN view any content on any device. Current is trying to deliver best format/content to device. CBS nightly news viewership has shrunk every year for the last 20 yrs. CBS news avg viewer over 60. the mode of presentation is still the same as cronkite's days: "and that's the way it is".
MV: disagrees with the notion that everything has to be community driven. have to accommodate both modes. saying users are A OR B is the fundamental mistake that everyone makes.

OM: why bring user content to the television in a youtube world?
JH: youtube does an important thing... it's the bottom end of hte long tail. the pet cat video or aunt tilly's birthday will never get watched on tv. and by the way, that end of hte tail IS NOT YET A BUSINESS. the other end of youtube's curve, at the head, is not a business either (ie, viacom suit). current is just below that head. youtube is a phenomenon, not yet a business. current is a business hoping to be a phenomenon.
MV: youtube is a business if it's getting $20CPMs. what they don't do is provide high quality environmnet for professional content. they have a very effective platform for a clip culture. broadband creates demand for higher quality and curated content platform. that's the gap that joost is aiming for.

OM: joost coming in over the top, via the pipes, owned by service providers.
MV: not clear that there's a competitive advantage to own the pipe. unless someone blocks it, which consumers won't/shouldn't accept. france, japan have very high standards for speed and are driving this without a blocking issue. bandwidth is / will be a commodity. if providers monopolize this, govt shld do something about it. plus, we're improving our bandwidth usage and we're not going to get above the radar. if providers complain, we've got the right problem.

OM: upstream issues?
MV: streaming isn't a big issue in P2P because only small chunks come from each peer.

JH: likely to start via mobile in asia.

OM: economics? is advertising enough?
MV: yes. not via banners and keywords. have to do midroll. give before you get something back. you have to do targeting. internet gives targeting but can't really tell a story. plenty of market for REALLY targeted 30second spots at CPMs AT LEAST as good as tv. you can put frequency caps on it. you can really target. you can deliver at moments when users are enthralled.

OM: need real scale to make this work for advertisers.
MV: we won't have youtube like numbers. but we don't need it. we'll have more info about our users.
JH: one good thing about the old model. we get paid on 52M homes whether they use it or not. plus we have advertising revenues from sponsors. new platforms will be advertising powered.
OM: value of Joost user is higher than tv?
JH: our demo is highly valuable AND has deserted other TV. we've been profitable since 4th Q of 2006. advertisers ARE paying a premium to access this audience.
MV: too soon to say that our CPM's will be higher... but they will be higher than typical online advertising  CPMs

question: isn't joost married to desktop application.
MV: no, you can decouple distribution client from browser viewing. requires decryption. actively working on this. will be something to see in not too distant future.

MV: just because you put your back catalog content online doesn't mean you'll suddenly make money from it when you aren't already. people need to watch it. need fresher content for real monetization. content owners have embraced internet delivery but a lot of it is dated.

current.tv presentation at web2.0 summit - stream

TV is not dead. problem is that much of tv is crap.

Current brought bringing the whole process of producing and delivering tv.

most 30 second spots cost 1M. current's customers prefer consumer created ads 9-1.

current.com: far greater participation by everyone in everything happening on current. everything produced is all put out as a public assignment. everyone can submit and participate in creation of content. add text, links, photo, content, video, etc.

bigger idea: first true dual screen experience. see what played on tv and engage with it online. give them a reason to use BOTH screens together. that much more immersive and valuable experience when you use both together. this is true convergence. not just watching something in one place instead of hte other. the big idea is to do both together. take community, participation, social filtering and bring that to a really closed environment: tv...

[network in here just got WAY slower as everyone goes to current.com to check it out!]

big media: friend or foe? stream of panel at Web 2.0

Josh Quittner: Comcast blocking excessive use?
Amy Banse, ComCast: 99.99% of customers do everything they want happily. the excess is huge: equivalent to 18K emails per day every day. we offer them commercial upgrades.

JQ: future consumers moving to a multi-device world (cable + computer + game box and switch between them... and further future: one pipe... all IP and no cable. everything on web.

AB: we help consumers access internet via broadband. we believe customers are moving online and want the access. but cable tv will be around for a long time. radio didn't disappear with broadcast tv. broadcast didn't die with cable.
Quincy Smith, CBS: we believe future is a lot closer than we think. DVR tipping point future is 2-4 yrs. we have not found the internet to be cannibalistic to tv. online creates demand for tv. difference devices have different viewing modes. CBS tv audience is only 2-8% of online audience. +90% new audience online. see a two minute clip you like and you'll watch the show. need to embrace new partners and channels or you'll be ignored. we partnered with sling. arrogant to assume that our audience is only watching our content online. we tend to say "i don't know if online content will work on tv." that's not the point. we're not taking a defensive stance: this is a huge new opportunity for us.

QS: apples to apples. biggest clip on youtube last week: letterman interviewing paris hilton. instead of shutting it down, we embraced that... pulled it into our world. those minutes are meaningful even in network tv metrics: 3% share compared to tv audience on this clip.
AB: TV viewing has gone up every year for the last 30 years, including last year. online viewing is not cannibalizing tv. i don't think "online video vs tv video" is a dichotomy viewers are thinking of. our role as a "video distributor" is to provide a UI that flows between screens and lets pple find what they want on any screen whereever they are. combination hardward/software interface. our job to provide a best in class search and consumption environment. not cable vs internet. but how can i get in front and provide it all to my customers when they want it in a way they want it.

JQ: are you worried about google and public wifi/wimax. will we start expecting free wifi everywhere?
AB: i'm not a dinosaur running scared! google's a phenomenon. but it's a synergistic relationship. users want our pipe to get content. we add value to the experience. we're not afraid.

JQ: social networks. fb has created open platform. let users do all the work which will bring in more users.
QS: talk about social networks as the "water cooler". media has never tried to OWN the water cooler. we have to be involve in the online water cooler conversations. what's never been done in media is to create apps that start the conversation and facilitate it, keeping it close enough to your property that you can monetize it with your advertisers. we have to feed the watercooler... something will ignite it if we don't. acquisitions: last.fm, [dot starter]. need new stuff and a new view of the brand so that pple want to watch your stuff. we have to get used to pple going where they want to get what they want, instead of expecting them to come to us.
AB: huge new opp for new and old media. most significant thing is that a new media world is evolving. don't know where it's going.

JQ: retransmission fees? shld comcast pay cbs for customers?
AB: we do pay them for some content, cable content. we feel broadcast content is delivered over the air for free so why should our customers have to.
QS: i'll sidestep. great relationship with comcast for distributing content online.

question: internet and artificial national boundaries for distribution of media. when will we start acting like this is a global network?
QS: CBS is 90% US based revenue. our barriers to thinking bigger should be smaller but still slow. makign clips and news available internationally via partners. making sure rights are there to distribute int'l. would love to see full episodes available in italy and use the interest as early indication of tv interest/potential. seed the market with full content...
AB: rights issue

question / mary meeker: monetization of the water cooler? new ad tools?
QS: watershed. 63-74% of business is advertising based. clear that pre/post/sushi roll doesn't work. esp with smaller and smaller clips. need to make sure we find the right ways to do this. super agencies are all thinking about this the right way. need standardized formats to get scale on this. [this is the crux]. next couple of years are critical. starting to happen. we're the largest channel on youtube and seeing lots of monetization. some sponsorship. for full episodes, pre/mid/post does work but it's not going to be the biggest part of the volume.

question: move to non-linear distribution / viewing. what happens when this becomes dominant model?
AB: yes. we're moving that way. our VOD and DVR are aimed there. there are pple who will choose different modes. our role is to provide all those experiences.

question (pixo teen social network): generational shifts in consumption
AB: clearly teens more comfortable with non-linear. happy and will make experience available.

My take: clearly everyone can and will distribute their stuff everywhere and anywhere. key issue is the fragmentation of devices and consumption, which creates challenges for advertisers to get scale.

Randall Stephenson - CEO of AT&T at Web 2.0 Summit - stream of conversation with John Battelle

[don't quote me, i'm no expert in telecom!]

RS: Recognized need for scale. Wireless business was substandard in 2000. Create a jv and govt rules enabled. Still subscale wireless after cingular. Acquired AT&T wireless and finally got enough scale: largest at the time. national footprint. 60MM subscribers.

JB: reassembled the AT&T of yore?
RS: old AT&T was long distance and wired. this is a wireless and broadband business.

jb: backbone business. why is bandwidth so bad in the US? what's in the way of 100in/100out?
RS: public policy. on a huge push into conneticut but public utility commission wanted them to be a "cable company"

RS: our business is connectivity and moving 1s and 0s. efficient, seamless and mobile. put in place incentives and apis for usage of bandwidth

JB: net neutrality
RS: never discriminated. we don't block peer-to-peer. we don't block anyone's content.

JB: view of 700MHZ
RS: beachfront property. the best you'll find for a long time. iPhone has driven 4x growth of data usage. looking out 5-6yrs, you're going to be out of spectrum. bought aloha with national bandwidth in the 700Mhz range. $2.5BN for a co with no revenues. enhanced footprint.

RS: wondering if there's a business model in the open access model.
JB: web has made money on open access model.
RS: but we need to buy spectrum, add network, add operations. does that business model still work?

JB: google? 260BN mkt cap. GG +200BN mkt cap on 10% of AT&T revenues.
RS: That's a great model. great gig if you can get it.... It's all about the growth rate. Not investing a ton in capital
JB: they are investing
RS: not relative to the revenue. we're doing 10-15% cap ex investment
JB: does it tick you off?! you're unflappable!
RS: how many models have been built on top of teleco. we all want the same thing and we're all new in this. we all want this interent thing to grow and flourish. i'm an infrastructure play. plowing a ton of money in and don't want a lot of interference with my ability to monetize. gov't regulations KILL growth. we're behind on broadband infrastructure because the rules get DORKED UP and no one invests.

RS: bringing in an advertising supported directory assistance model. live in some markets now. it will scale. we'll build it ourselves.

JB: steve jobs?
RS: we've got a good relationship.
JB: how is the iPhone deal going?
RS: going great. not sure we could have asked much more than we've got.
JB: some pple are unhappy with EDGE ;-) why isn't it better? and when?
RS: will get better as we upgrade markets to 3G. Steve wanted it on EDGE. wanted ubiquitous network. EDGE is only one like it. I don't like EDGE speed either. wifi is good surrogate. we've gotta get customer the WiFi.

JB: "magic five". local, long distance, high speed video, data, [?]. how are your "kids" doing in school? RS: they do best when they're playing together. core is: it all starts with wireless. it's the most personal decision a person makes: service and device. we've got it and hte assets are great. halo effect of iPhone in stores. recently, added standalone broadband and it's taking off. video rolling out. reselling satellite. landline cannibalized by wireless but broadband and wireless compensating. wireless is the most important piece of this.

JB: what would you change about regulatory environment?
RS: american experiment succeeds because of economic strength. things that increase velocity of commerce will improve economy. erie canal sped up commerce. railroad. telephone. wireless. internet takes to another level. make sure the velocity of commerce is increasing built on telecom. add rules and you slow this all down. STAY out of telecom unless you see a problem.

remove barriers to local high speed last mile connections. those rules are there because of cable sanctioned monopolies. we were that but the world has changed. tech has bypassed regulations. video and broadband rules are not keeping pace with technology. i can put high speed to your home if it's only internet but if i put video on it, i get blocked.

JB: why not let others provide service over that pipe. if you open it up, everyone will compete to offer the best.
RS: need these rules out of the way like in CA where they removed them and we're heavily investing.

JB: as we move around in teh cloud. we're leaving trails accessible to various actors. there's potential for abuse. govt accessing this personal data [easily]...
RS: law is clear about what we have to do. it's not an ambiguous rule. we've published this in letter to dingle. very specific criteria and if so we're compelled to provide info. we don't have the information to judge validity of the requests
JB: but there have been cases of govt "fishing" expeditions. no one can even disclose that they received this request. google refused and compelled a lawsuit and that's the only way we knew it happened. are you responsible to have a moral sensibility about abusive requests?
RS: of course. have to ask if we're doing the right thing.

Question: how will you tackle advertising to phones?
RS: we can't do it all alone. we know this. iPhone is an example. we will partner in advertising market, in bringing ads to our customers.

Question: why not invest in fibre to the home?
RS: we don't need to send all the video channels to the home if they're not being used. that's what IP video is all about

Question: will you be selling locked phones five years from now?
RS: in an unlocked environment, we're not going to subsidize a $500 phone. start with the premise of getting the customer experience right. same applies to open access. we're adding new applications on the IMS platform. improves cust experience. when it's right, we'll open the API for more development and further improved customer exper. we just can't screw up cust exper.

Question: really no business in open access 700MHZ?
RS: google HAS NOT said they are going to bid. there will be an open access environment.

Question: corporate account for iPhones?
RS: yes. Jobs has said this is coming. won't say when. need data security etc. but it will be there?