Wolfram Alpha, released on May 15th 2009, is an answer engine designed by Wolfram Research. This new engine answers factual questions directly instead of providing a list of websites that may have the answer. It derives answers from a core knowledge base of data. This method is similar to the way Google answers mathematical questions, but Wolfram Alpha searches a larger range of data. Although it has been frequently compared to Google, in reality it is fundamentally different. It would be more appropriately labeled an answer machine rather than a search engine. In many ways, Wolfram Alpha is more likely to compete with Wikipedia than Google.
Wolfram's business model contains much ambiguity. Apparently, Wolfram Research intends to sell subscriptions to advanced users who want to integrate their data with the Wolfram database. This strategy alone does not have the potential to produce another Google. There are simply not enough advanced users to generate revenues comparable to Google. This is why Wolfram also sells display ads, although it is unclear how advertisement works on the site and how this will generate enough revenue. On Wolfram's faq page, they state they are "concentrating on major corporate sponsorships" and not targeted advertising. Wolfram was initially designed purely for academics. If it plans to generate revenue through any form of advertisement, it must develop a larger network.
Sunday, June 14, 2009
Twitter = Traffic, a TechCrunch Statistical Breakdown
The main point of this post on TechCrunch is the following – the most common ways people use Twitter are:
1. As a social information filter
2. As a link distributor
TechCrunch has come to this conclusion through first-hand experience - during the last few months, outside traffic to the site from Twitter has grown so much that Twitter is now second only to Google.
Top Sources of Traffic To TechCrunch
1. Google: 32.7%
2. Direct: 22.7%
3. Twitter: 9.7%
4. Digg: 7.4%
5. Techmeme: 2.4%
6. Other: 25.1%
Much of this traffic is generated by TechCrunch's Twitter account, with over 700,000 followers. TechCrunch uses this account to send out story links, driving followers to its site. These tweets spread virally, as followers retweet (forward) the link to others. The main take-away from this post on TechCrunch is this = "Twitter is not just about micro-media. The most powerful Tweets are those which point elsewhere."
While TechCrunch is a unique site, with a demographic that is not representative of the public, there are clearly other opportunities in that statement. As an Arts Administration student, I can see how arts organizations (or sports, any ticketed event) could utilize Twitter to make sure no seats go unsold to any event. As Twitter provides real-time feedback, using Tiny URLs to send out waves of ticketing in tiered prices could allow for an instant gauge of demand and supply, in a perishable environment where the product has a limtited shelf-life.
Click here for the TechCrunch blog post on this topic.
1. As a social information filter
2. As a link distributor
TechCrunch has come to this conclusion through first-hand experience - during the last few months, outside traffic to the site from Twitter has grown so much that Twitter is now second only to Google.
Top Sources of Traffic To TechCrunch
1. Google: 32.7%
2. Direct: 22.7%
3. Twitter: 9.7%
4. Digg: 7.4%
5. Techmeme: 2.4%
6. Other: 25.1%
Much of this traffic is generated by TechCrunch's Twitter account, with over 700,000 followers. TechCrunch uses this account to send out story links, driving followers to its site. These tweets spread virally, as followers retweet (forward) the link to others. The main take-away from this post on TechCrunch is this = "Twitter is not just about micro-media. The most powerful Tweets are those which point elsewhere."
While TechCrunch is a unique site, with a demographic that is not representative of the public, there are clearly other opportunities in that statement. As an Arts Administration student, I can see how arts organizations (or sports, any ticketed event) could utilize Twitter to make sure no seats go unsold to any event. As Twitter provides real-time feedback, using Tiny URLs to send out waves of ticketing in tiered prices could allow for an instant gauge of demand and supply, in a perishable environment where the product has a limtited shelf-life.
Click here for the TechCrunch blog post on this topic.
Fear Grips Google?.. Really?..
Is Google really scared of anything other than the term 'anti-trust'? :)
According to James Doran in the New York Post on June 14th, "co-founder Sergey Brin is so rattled by the launch of Microsoft's rival search engine that he has assembled a team of top engineers to work on urgent upgrades to his Web service."
So why does Bing have Google scared?
So why does Bing have Google scared?
- Apparently there is something about the search algorithm in Bing that has Brin concerned - and the fact that one of Google's co-founders is so hands-on regarding this particular competitor has industry insiders taking notice.
- Google and Yahoo! dominate the search market, with 60 and 20% market shares respectively, and Microsoft has been largely unsuccessful in competing - but Bing has been received favorably by critics, was launched with a gigantic marketing budget ($80-100M according to the Post), and early statistics show Bing increasing Microsoft's market share by two percentage points, to about 11 percent.
But 'Fear Grips Google' seems to be a bit of an overstatement by the Post at the moment, as Scott Kessler, senior analyst at Standard & Poor's and a Google specialist, notes the main motivations for consumers' choice in search is ease of use and habit - making Google harder to scare than an $80M marketing budget and favorable reviews.
While I've tried out Bing and find it to be quite user-friendly, the force of habit motivation that Kessler mentions is a difficult hurdle to overcome. It will be interesting to see how Microsoft proceeds in gaining market share once this initial marketing push phase is complete. Can they stay in the game, after setting the pace at $80-100M, to overcome this Google habit of ours?
Read 'Fear Grips Google' in the NY Post here:
http://www.nypost.com/seven/06142009/business/fear_grips_google_174235.htm
While I've tried out Bing and find it to be quite user-friendly, the force of habit motivation that Kessler mentions is a difficult hurdle to overcome. It will be interesting to see how Microsoft proceeds in gaining market share once this initial marketing push phase is complete. Can they stay in the game, after setting the pace at $80-100M, to overcome this Google habit of ours?
Read 'Fear Grips Google' in the NY Post here:
http://www.nypost.com/seven/06142009/business/fear_grips_google_174235.htm
Spotting the Internet 'Liar'!
Do you lie about personal information in your online profiles? New York City residents were interviewed and evaluated to check the accuracy of their profiles posted on Internet dating websites, including Match.com and Yahoo! Personals. Apparently, survey online daters admitted to being less than 100% honest about the info they post about themselves on dating sites. Men and women lie about their height, weight, age, but also income, politics, education, and smoking tobacco. After Professor Kagan brought it up in class, I made some research and came across with this article.
Psychological Study of Online Profile Accuracy
These individuals were asked to rate the accuracy of information such as physical appearance, social status, relationship information, habits, and beliefs on their printed-out online profile. Internet daters participating in this study also reported how acceptable they believed it would be to lie about the information on their dating profiles. Accurate information about their height, weight, and age was collected from the Internet daters, using a measuring tape, a scale, and their driver’s licenses.
Is Your Online Profile Accurate?
Overall, the participants reported to be very accurate about their relationship status and whether or not they have children – a sensible finding, considering that future romantic partners would easily find out if they had lied.
Study participants told experimenters that they had lied most often about socially sensitive subjects, including income, occupation, and smoking. Men were slightly more likely than women to lie about their income, and women were slightly more likely than men to lie about whether or not they smoked tobacco. Interestingly, men lied more often than women about their level of education, and women lied more often than men about their political views.
Lies about Height, Weight, and Age
According to their own admissions, both men and women often lied about their age and physical appearance in their Internet dating profiles. The researchers have precise data on these items, having measured them in the laboratory. Over 80 percent of the online daters lied about their age, height, or weight. Body weight was the most frequently inaccurate information, with over half of participants misrepresenting their weight by five or more pounds.
Female online daters were most likely to lie about their weight (59%), followed by height (42%), and age (13%). Male Internet dating profiles were most inaccurate about height (61%), followed by weight (55%), and age (24%).
Is it Acceptable to Lie in Your Dating Profile?
Overall, Internet daters participating in the Cornell University study reported that it was generally unacceptable to lie in online dating profiles. In general, participants told experimenters that it was least acceptable to lie about education and relationship status, and most acceptable to lie about income and interests.
Men and women differed somewhat in what types of lies were socially acceptable. Male online daters agreed that it was least acceptable to lie about whether or not you were in a relationship or had children, but believed that it is relatively acceptable to lie about income, occupation, politics, and interests.
Females dating on the Internet reported that lying about relationship historyandsocial status including occupation and education was highly unacceptable. Interestingly, while women were more likely to lie about being a smoker, they also considered lying about smoking highly unacceptable. Female online daters believed that it is (relatively) most acceptable to lie about hair and eye color, income, and interests.
Internet Dating Lies
Online Profiles Inaccurate, Study Shows
(http://psychology.suite101.com/article.cfm/internet_dating_lies)
Google's Grab for the Display Ad Market
Google's Grab for the Display Ad Market
The search king aims to unseat Yahoo and Microsoft with new, ultratargeted banner ads. Will Web publishers and online ad agencies bite?I came across this article yesterday. It is about Google's redoubling efforts to grab a bigger piece of the largest online ad market it doesn't control: display ads, the pictorial banners and videos that account for more than a third of the $40 billion online ad market. Google faces a tough challenge. Yahoo! and Microsoft's MSN have a huge lead in display ads, largely because they can put ads on their own pages of content, like Yahoo Finance and MSN Money. Google hopes to place more display ads on its YouTube site as well as on thousands of partner sites.
The fastest-growing kind of display ads, called performance ads, work more like search. They allow advertisers to use data analysis and user-tracking technologies to match ads more closely to likely buyers and measure mouse clicks and other actions so advertisers pay only when ads deliver.
And some think anything but search gets short shrift inside Google. "Display is still the redheaded stepchild of their ad initiatives," says Rob Leathern, CEO at CPM Advisors, which helps advertisers improve their online campaigns.
Insiders say that's partly why Google has seen a stream of departures of ad executives in the past two months who see more opportunities elsewhere. Most recently, David Rosenblatt, president of Google's display-ad efforts and former DoubleClick CEO, left in May. But Brin insists Google is serious. "Display is going to be a large business for us," he says. "It's not just an experiment."
Dear CNN, Please Check Twitter for News About Iran
The "western world's most feared government" is shaking with insurrection in the streets after a contested election and the leading name in news, CNN, is shockingly absent from the story. Twitter, meanwhile, is how Iranians are communicating with the outside world. It's the best place to follow events going on in that country and CNN's failure to engage with the story is one of the hottest topics of conversation there.
Hours after Iranian police began clashing with tens of thousands of people in the street, the top story on CNN.com remains peoples' confusion about the switch from analog TV signals.
One quip we've seen is that "Tienanmen + Twitter = Tehran." Twenty years ago this month, CNN brought real time news about the Tienanmen Square uprising to the world. It's really strange that the network is absent from this story. CNN anchor and mega-Tweeter Rick Sanchezdefensively Tweeted hours ago that he covered Iran throughout the afternoon on TV, so perhaps it's just the CNN.com web team that's incurring the wrath of news consumers. CNN's official Twitter account has been silent for four hours.
The BBC is covering the story well, we found this video posted to YouTube. It's being passed around Twitter. These photos on Flickr are good, too. This video from LiveLeak is quite moving, if likely to cause motion-sickness. Twitter search engine Twazzup has created a great aggregator page for real-time multi-media updates from and about Iran. Andrew Sullivan writes well about the extensive use of Twitter by Iranians in the uprising. This in a country where the government recently debated applying the death penalty for subversive blogging.
Barack Obama has a good excuse for not engaging substantially with the protests in the streets - if he condemns the incumbent's victory then negotiations around nuclear weapons will be much more difficult. What's CNN's excuse?
Twenty years ago CNN's coverage of Tienanmen Square made its reputation. If in twenty more years it has become consensus that real-time, online, crowdsourced media is the best place to keep up with current events, this incident could be an important part of that history unfolding.
(http://www.nytimes.com/external/readwriteweb/2009/06/14/14readwriteweb-dear-cnn-please-check-twitter-for-news-abou-45130.html)
"BLACK OR WHITE": Online Consumer Philosophy --What, and how, we can learn
Online discussion groups allow people whose social or physical separation previously kept them from communicating to form groups to discuss mutual interests, entertain each other, and work collectively. Some of online discussions can directly influence the purchase of products and services. In spite of its potential importance, the quality and quantity of participants or a follower, it comes up with two questions: what can we learn from the “bulletin board” discussion groups and how best can we learn it? We examine characteristics of online discussion that make it special both to participants and researchers. 
Conversation Analysis Applications:
Attitudes and Values: online discussion participants bring the same bias online that exist in the real world. If content analysis is used, it may be necessary to examine a number of postings over time to assess stable attitudes.
Knowledge and Expertise: Participants can establish expertise and a reputation for expertise can be established over time that can be related to how central a participant is in the network.
Personal Disclosure: It is possible to disguise online identity completely or to divulge a great deal. Domain names can indicate what background the participant is from.
Motivation for response: participants my want to be entertained or to feel a part of a group. They also may be motivated to persuade, to win, to dominate, or to vent their emotions. These motivations may be analyzed at the level of individual postings since participants may want to accomplish different things at different times.
Role: In any particular posting, contributors assume a role that closely ties to their motivation including providing information, initiating a topic, asking a question, answering a question, clarifying an answer, corroborating an answer, and emotionally supporting a participant. Over time it may be observed that participants consistently assume the same role.
Message Tone: tone refers to the participants attitude toward the subject matter. Consistent with the kind of context used in conversation analysis, tone may be characterized further. Conflict refers to clear differences of opinion and threatens positive face.
Content analysis: Perhaps most importantly, discussions can be characterized by the particular terms and points made. These terms are used to compile a dictionary that can be used in content analysis.
Is wolfram alpha a google challenger or a niche search site for geeks?
Wolfram Alpha was unveiled several weeks ago to much fanfare. It has been called a combination of a "research library, a graphing calculator, and a search engine". A recent article discussed how wolfram alpha does search in way altogether different than Google.
After watching the fascinating tutorial, I decided to try it out myself. I did not have as much success in pulling out relevant information and I have noticed that while it is excellent at doing computation, it is not necessarily the best database of the world's information. I tried a simple search for the baseball homerun record, but was not able to find the relevant statistic. At best wolfram alpha works like an advanced scientific calculator.
I don't see it becoming a large popular search engine, though. It provides relevant DATA but not necessarily relevant INFORMATION. The data is organized in a way that it can all be used in a computation. As the article points out, Wolfram Alpha is can tell you Apple's stock price, but it won't give you the recipe for an apple pie. When many users searches are based on something they want to do, or go to, such as movies, recipes, relevant articles, etc, Google seems much more suited to the task. When you have a specific quantifiable problem, then you might go to Wolfram Alpha.
I do think the real value added in Wolfram Alpha is the attractive and intuitive way in which it presents the results data. Instead of simply giving a list of relevant articles and websites, like Google, it will display graphs, data, tables, and relevant statistics to the search that would never appear under Google's Pagelink algorithm. So, while it is a very interesting and unique internet search provider, it's not going to overtake Google anytime soon...
After watching the fascinating tutorial, I decided to try it out myself. I did not have as much success in pulling out relevant information and I have noticed that while it is excellent at doing computation, it is not necessarily the best database of the world's information. I tried a simple search for the baseball homerun record, but was not able to find the relevant statistic. At best wolfram alpha works like an advanced scientific calculator.
I don't see it becoming a large popular search engine, though. It provides relevant DATA but not necessarily relevant INFORMATION. The data is organized in a way that it can all be used in a computation. As the article points out, Wolfram Alpha is can tell you Apple's stock price, but it won't give you the recipe for an apple pie. When many users searches are based on something they want to do, or go to, such as movies, recipes, relevant articles, etc, Google seems much more suited to the task. When you have a specific quantifiable problem, then you might go to Wolfram Alpha.
I do think the real value added in Wolfram Alpha is the attractive and intuitive way in which it presents the results data. Instead of simply giving a list of relevant articles and websites, like Google, it will display graphs, data, tables, and relevant statistics to the search that would never appear under Google's Pagelink algorithm. So, while it is a very interesting and unique internet search provider, it's not going to overtake Google anytime soon...
Saturday, June 13, 2009
Twitter Angst Blog, Just for fun!
I do not like Green Eggs and Ham. I tried them once. Twitter is the modern day version of this story. Twitter’s viral marketing buzz is like that crazy Dr. Seuss junky character Sam who keeps popping up to tell me to try it. Everyone from basketball stars to movie stars to astronauts in space has mentioned Twitter numerous times. (Even though our Prof. mentioned that someone else does the Twitterwork for some of them). I’m just tired of hearing about them tweeting in their tweetsphere with their tweetybird followers. Question, if you send out a tweet but no one is there to read it, does it really exist?
I know nothing about the technology, so like any MBA student would, I researched it. Yes you might ask why wouldn’t I just try it? Well, If 7 million twits tweeted off a cliff, would you? If I gave it a shot, I’d probably just try to start a twitterlution and see how many people I could piss off by my twitterrhea of the mouth. And yes, these are all approved twerminologies as approved in the official Twictionary. (http://mashable.com/2008/11/15/twitterspeak/). So you can see the contempt, can’t we just call it what it is? Mass text messaging!
The talk of the town is how to monetize Twitter’s 7 million subscriber base. “Twitter could sell a service to marketers who want daily or even hourly reports about topics discussed on Twitter,” says Ian Schafer, CEO of ad agency Deep Focus. There is talk about corporations wanting to aggregate user feeds to gather important branding data about products. Dell's recent success in sending coupons to its followers shows market potential, but advertising just isn’t the stated goal of the founders who have to- date secured $55 million in venture funding (yet).
The positive social networking impact beyond just knowing what your friends are doing is that breaking news has been tweeted on before traditional media channels, such as the landing of Flight 1549 in the Hudson. Protesters have also found a new method to organize such as the coordinated war protests in San Francisco while China preemptively shut Twitter down in anticipation of Tiananmen Square protests.
These positives still rely on groups/organizations/people wanting to feed eager listeners information about their products/ideas/updates yet too much junk could alienate the listening base and Twitter might end up on a tweet to no-where. So yes, for the time being I am holding out for the next thing, (video “tweeting” on my friend’s site http://12seconds.tv/ ). I’ve yet to find someone that has talked up Twitter and told me that they love it and can’t live without it, until then, I won't try them Sam-I-Am.
CHINA: Alibaba.com: Green Commerce Continues
In class,Prof Jeremy guided us pretty well on thinking more broader and deeper about online dynamic applications like E-commence, online auction,real estate broker,dating,social networking etc. Triggered with the comprehensive "picture" addressed by him, I think, besides personal social and entertainment needs, how should we come up with the indivudial social responsibility of protecting environment by using internet tools toward "Green" products. For you enrichment, I hope the article could give you a sense of what's going on in China about the green commerce and trigger you thinking about how to embrace the new energy ecological system global trend. 
June 5, 2009, 7:31 am
"Despite the downturn, online trade in environmentally friendly products is holding up well", said CEO of Alibaba.com, the Chinese e-commerce and business-to-business giant. Over the past two years, the company reports that its Web site has seen a steady growth of searches for alternative energy resources like solar and wind power, electric cars, fuels and organic products. Solar-powered energy and organic products are the fastest-growing green sectors, increasing 71 percent and 68 percent year-on-year, respectively, in the first quarter of 2009, according to the company. Solar lights are among the most popular green items sold online, as countries in Europe, and parts of the United States begin to replace traditional streetlights with sun-powered alternatives. “Despite the downturn, online trade in environmentally friendly products is holding up well,” said David Wei, the chief executive of Alibaba.com. “This is because going green not only saves money, but it also creates money, especially as more entrepreneurs develop innovative products to support growing global demand.” Some members of Alibaba.com’s trading community agree.
“Climate change is having a positive impact on our business. Our sales have been growing by 30 to 40 percent over the past three years thanks to strong demand for green products from customers in the U.S., Europe, Middle East and Southeast Asia,” said Xiao Benpeng, the international trade manager for a company based in Hubei that specializes in high-tech solar energy products, and a member of Alibaba.com. China itself has set goals of generating 16 percent of its energy from renewable sources by 2020, and it has set aside about $30 billion of its economic stimulus package ofr the energy conversation and ecological engineering. Alibaba.com executives say they believe that these large-scale green projects will translate into multiple e-commerce opportunities.
Kindle's New Competitor
Google plans to enter the digital book market and directly compete with Amazon's Kindle. Google will allow its partner publishers to make their books available for purchase from any web-enabled device (PC, smartphone, etc), in contrast to Amazon's Kindle Store, which sells e-books that can only be read by the Kindle reader, the iPhone, or the iPod Touch.
Amazon's Kindle has been given many titles - from the iPod of reading to the savior of the newspaper. It is a wireless e-book reader that is linked to Amazon's Digital Text Platform. Although not the first of its kind, the Kindle is made unique by the Digital Text Platform, which enables authors to self-publish directly to the Kindle. Publishers have accepted the Kindle for many reasons, such as the attractive cost structure compared to old methods of printing and distribution and the restrictions on sharing (any purchased book is locked onto the Kindle - no printing or sharing it). Newspapers are also pleased with Kindle's effect on their business (newspaper subscriptions are the Kindle's top sellers), although they are wary of the eminent transition from ad-based revenue to fee-based revenue. The Kindle's business model is also unique in that the first few chapters of any book are free - so the customers can make a purchase decision after they started the book
Google's entry into the market may be troublesome for Amazon. The new Kindle Dx (now available in multiple sizes) is offered at a steep price of $489. If the Kindle network suffers from competition with Google, customers could potentially face a tremendous loss. This, in combination with Google's compatibility with virtually any device may significantly reduce demand for the Kindle.
Before Google's announcement the Kindle's outlook was extremely positive. Barclays Capital predicted Kindle devices would produce $840 million in profit on $3.7 billion in sales in 2012. Citigroup predicted total sales at 500,000 units. It is possible these forecasts will diminish in the near future.
Given the Kindle's high price and sharing restrictions, Amazon appears to have little choice but to promote the physical advantages of the Kindle device and compete fiercely over exclusive distribution rights with publishers. This may also prove to be difficult, because publishers will have little incentive to distribute exclusively to Google or Amazon. It is no secret the record labels agreed to extremely low margins at the onset of the iPod. Any smart publisher would want avoid such a mistake.
http://www.ecommercetimes.com/rsstory/67213.html
Amazon's Kindle has been given many titles - from the iPod of reading to the savior of the newspaper. It is a wireless e-book reader that is linked to Amazon's Digital Text Platform. Although not the first of its kind, the Kindle is made unique by the Digital Text Platform, which enables authors to self-publish directly to the Kindle. Publishers have accepted the Kindle for many reasons, such as the attractive cost structure compared to old methods of printing and distribution and the restrictions on sharing (any purchased book is locked onto the Kindle - no printing or sharing it). Newspapers are also pleased with Kindle's effect on their business (newspaper subscriptions are the Kindle's top sellers), although they are wary of the eminent transition from ad-based revenue to fee-based revenue. The Kindle's business model is also unique in that the first few chapters of any book are free - so the customers can make a purchase decision after they started the book
Google's entry into the market may be troublesome for Amazon. The new Kindle Dx (now available in multiple sizes) is offered at a steep price of $489. If the Kindle network suffers from competition with Google, customers could potentially face a tremendous loss. This, in combination with Google's compatibility with virtually any device may significantly reduce demand for the Kindle.
Before Google's announcement the Kindle's outlook was extremely positive. Barclays Capital predicted Kindle devices would produce $840 million in profit on $3.7 billion in sales in 2012. Citigroup predicted total sales at 500,000 units. It is possible these forecasts will diminish in the near future.
Given the Kindle's high price and sharing restrictions, Amazon appears to have little choice but to promote the physical advantages of the Kindle device and compete fiercely over exclusive distribution rights with publishers. This may also prove to be difficult, because publishers will have little incentive to distribute exclusively to Google or Amazon. It is no secret the record labels agreed to extremely low margins at the onset of the iPod. Any smart publisher would want avoid such a mistake.
http://www.ecommercetimes.com/rsstory/67213.html
The New York Times: In Developing Countries, Web Grows Without Profit (II)
The Facebook social network is also considering lowering the quality of videos and photographs delivered to some regions in an effort to reduce expenses.
“We can decide, either on a country by country or user by user basis, to engineer the quality of the service for that cohort of users,” said Jonathan Heiliger, the executive who oversees Facebook’s computing infrastructure.
Facebook is in a particularly difficult predicament. Seventy percent of its 200 million members live outside the United States, many in regions that do not contribute much to Facebook’s bottom line. At the same time, the company faces the expensive prospect of storing 850 million photos and eight million videos uploaded to the site each month.
Facebook, which says it favors membership growth over profitability for now, is trying to increase revenue overseas by hiring advertising sales staff in countries like Britain, Australia and France.
In other parts of the world, Microsoft serves ads on the site and Facebook offers self-service tools to advertisers. But those ads are far less lucrative than the ones Facebook itself sells in the United States and Western Europe.
As a result, speculation has swirled about Facebook’s finances. Industry analysts wonder aloud how fast the company is losing money and whether it needs to solicit another round of investment.
Facebook said last month that it was on track to become profitable next year. But as it did, Gideon Yu, Facebook’s experienced chief financial officer, left the company. Three people familiar with the internal maneuverings at Facebook said Mr. Yu objected to such a rosy projection as the company was struggling to finance its expensive global growth.
Web entrepreneurs like Mr. Shapiro of Veoh, still struggling with his decision to restrict his site from much of the world, might have to find a way to soothe their battered consciences.
The New York Times: In Developing Countries, Web Grows Without Profit (I)
Facebook is booming in Turkey and Indonesia, and YouTube’s audience has nearly doubled in India and Brazil; nevertheless, these and other Web companies with big global audiences and renowned brands struggle to turn even a tiny profit in emergent countries. I Just stumbled across this interesting article from The New York Times, which will help us understand some of the reasons for this huge growth without a proportional profit.
Web companies that rely on advertising are enjoying some of their most vibrant growth in developing countries. But those are also the same places where it can be the most expensive to operate, since Web companies often need more servers to make content available to parts of the world with limited bandwidth. And in those countries, online display advertising is least likely to translate into results.
This intractable contradiction has become a serious drag on the bottom lines of photo-sharing sites, social networks and video distributors like YouTube. It is also threatening the fervent idealism of Internet entrepreneurs, who hoped to unite the world in a single online village but are increasingly finding that the economics of that vision just do not work.
Last year, Veoh, a video-sharing site operated from San Diego, decided to block its service from users in Africa, Asia, Latin America and Eastern Europe, citing the dim prospects of making money and the high cost of delivering video there.
“I believe in free, open communications,” Dmitry Shapiro, the company’s chief executive, said. “But these people are so hungry for this content. They sit and they watch and watch and watch. The problem is they are eating up bandwidth, and it’s very difficult to derive revenue from it.”
Internet start-ups that came of age during the Web 2.0 era, roughly from 2004 to the beginning of the recession at the end of 2007, generally subscribed to a widely accepted blueprint: build huge global audiences with a free service, and let advertising pay the bills.
But many of them ran smack into global economic reality. There may be 1.6 billion people in the world with Internet access, but fewer than half of them have incomes high enough to interest major advertisers.
“It’s a problem every Internet company has,” said Michelangelo Volpi, chief executive of Joost, a video site with half its audience outside the United States.
“Whenever you have a lot of user-generated material, your bandwidth gets utilized in Asia, the Middle East, Latin America, where bandwidth is expensive and ad rates are ridiculously low,” Mr. Volpi said. If Web companies “really want to make money, they would shut off all those countries.”
Few Internet companies have taken that drastic step, but many are exploring other ways to increase revenue or cut costs in developing countries.
MySpace — the News Corporation’s social network with 130 million members, about 45 percent of them overseas — is testing a feature for countries with slower Internet connections called Profile Lite. It is a stripped-down version of the site that is less expensive to display because it requires less bandwidth.
MySpace says it may make Profile Lite the primary version for its members in India, where it has 760,000 users, although people there could click on a link to switch to the richer version of the site.
Perhaps no company is more in the grip of the international paradox than YouTube, which a Credit Suisse analyst, Spencer Wang, recently estimated could lose $470 million in 2009, in part because of the high cost of delivering billions of videos each month. Google, which owns YouTube, disputed the analysis but offered no details on the site’s financial situation.
Tom Pickett, director of online sales and operations at YouTube, says the company still hews to its vision of bringing online video to the entire globe. In the last two years, it has pushed to create local versions of its site in countries like India, Brazil and Poland.
But Mr. Pickett also says that YouTube has slowed the creation of new international hubs and shifted its focus to making money. He says that does not rule out restricting bandwidth in certain countries as a way to control costs — essentially making YouTube a slower, lower-quality viewing experience in the developing world.
“We may choose to set a limit to how much we are willing to pay in bandwidth cost,” Mr. Pickett said. In some countries, he said, “there may be particular peak times where instead of high definition, we might decrease the resolution.”
Is Kindle the Future of Reading?
As we all know, Amazon is trying to revolutionize the literary world with the introduction of the Kindle, a wireless reading device that allows you to download in only 60 seconds (I'm sure this will get faster) from a selection of over 285,000 books (I'm sure this number will double in the near future), and for a fraction of the price that they would cost on bookshelves (these prices could drop further as well). Now in its third reincarnation (Kindle DX), the questions remains whether Kindle will successfully win over the current generation of readers?
Clearly the Kindle has its appeal. It's cost effective, it's environmentally conscious (though lithium polymer batteries still pose some environmental challenges), and it has an attractive quasi-first generation iPod look. But for many old-school readers (including myself), what makes books appealing is the fact that they are tactile and don't have the same effect on your eyes as reading text on an LCD. Amazon is clearly trying to overcome this hurdle. According to their website, the newest Kindle: "Reads like real paper! Now boasts 16 shades of gray for clear text and even crisper images!"
But whatever difficulties Amazon will have marketing to the current generation of readers, there is one demographic they have no problem reaching out to -- today's youth. I've already overheard parents gushing about how their kids are devouring books through their Kindles, sometimes buying three to four new books a week. And now I've learned that in my home state of California, Gov. Schwarzenegger plans to save millions by putting school textbooks online. I personally think this is a good idea, just based on memories of how insanely expensive high school textbooks were (especially the ones that I barely cracked open), and it will save the state a great deal of money, paper, materials, etc.
But it still makes me think, if the next generation of students is growing up reading all their books on Kindles and doing all their homework reading online, is it only be a matter time before reading a paper book is just another old pastime?
Clearly the Kindle has its appeal. It's cost effective, it's environmentally conscious (though lithium polymer batteries still pose some environmental challenges), and it has an attractive quasi-first generation iPod look. But for many old-school readers (including myself), what makes books appealing is the fact that they are tactile and don't have the same effect on your eyes as reading text on an LCD. Amazon is clearly trying to overcome this hurdle. According to their website, the newest Kindle: "Reads like real paper! Now boasts 16 shades of gray for clear text and even crisper images!"
But whatever difficulties Amazon will have marketing to the current generation of readers, there is one demographic they have no problem reaching out to -- today's youth. I've already overheard parents gushing about how their kids are devouring books through their Kindles, sometimes buying three to four new books a week. And now I've learned that in my home state of California, Gov. Schwarzenegger plans to save millions by putting school textbooks online. I personally think this is a good idea, just based on memories of how insanely expensive high school textbooks were (especially the ones that I barely cracked open), and it will save the state a great deal of money, paper, materials, etc.
But it still makes me think, if the next generation of students is growing up reading all their books on Kindles and doing all their homework reading online, is it only be a matter time before reading a paper book is just another old pastime?
Tales from the (marketing) Darkside (Part Deux)
So we come from newspapers to collectibles... and now its time to move to multichannel agency marketing. As the Director of Account Management, I supervised a Marketing team to handle the multichannel market efforts of a portfolio of niche luxury clients.... that's right- LUXURY.
What I have learned a long time ago is that it does not matter what you market, its how you market. So the same foundation of direct marketing basics apply whether you are selling a $30 collectible or a $5000 Steuben crystal vase. In the context of my role in helping my clients achieve success, I would like to highlight some key things that worked for Kenneth Cole a few years back.
Kenneth Cole was a great client. Au courant and trendy, they embraced the online space much more so than other clients. Their demographic skewed younger and so the ability to communicate to their buyers in their medium was vital. One key driver was email. Developing a email contact strategy was vital, so KC had subscriber lists by frequency and by content. They collected customer info such as month of birth so that they could email special offers on their Birthday. They collected monthly online customer surveys and used that metric as a barometer for their stores' ability to manage customer service. They were challenged by the costs of the offline catalogs, but these online efforts were measurable and cost-effective. While I do not know how their marketing efforts are today, I can say they did embrace online channel more so than other clients within my portfolio and tried to use the email in particular to connect with them in a relevant, meaningful way.
So fast forward to today. I spoke a bit about my time in the credit reporting industry a few posts ago. Today, I run the web marketing for Knewton.com.
Currently, I am working on all the key elements that make successful web acquisition possible:
What I have learned a long time ago is that it does not matter what you market, its how you market. So the same foundation of direct marketing basics apply whether you are selling a $30 collectible or a $5000 Steuben crystal vase. In the context of my role in helping my clients achieve success, I would like to highlight some key things that worked for Kenneth Cole a few years back.
Kenneth Cole was a great client. Au courant and trendy, they embraced the online space much more so than other clients. Their demographic skewed younger and so the ability to communicate to their buyers in their medium was vital. One key driver was email. Developing a email contact strategy was vital, so KC had subscriber lists by frequency and by content. They collected customer info such as month of birth so that they could email special offers on their Birthday. They collected monthly online customer surveys and used that metric as a barometer for their stores' ability to manage customer service. They were challenged by the costs of the offline catalogs, but these online efforts were measurable and cost-effective. While I do not know how their marketing efforts are today, I can say they did embrace online channel more so than other clients within my portfolio and tried to use the email in particular to connect with them in a relevant, meaningful way.So fast forward to today. I spoke a bit about my time in the credit reporting industry a few posts ago. Today, I run the web marketing for Knewton.com.
Currently, I am working on all the key elements that make successful web acquisition possible:
Creatives - Testing of the elements that successfully convey the utility of the product is critical to getting good prospects.- SEO and SEM - Paid and Organic traffic are intertwined.... Get the keywords that matter to customers and make sure the pages are optimized to them. Google Analytics and Adwords has been vital to getting this learning.
- Display Media - Very difficult channel but another source for prospecting leads. Watch the metrics and negotiate CPMs or even CPCs if at all possible.
- Affiliate Partnerships - Get others to distribute the message -- especially if bandwidth is tight internally. BTW, my Linkshare offer will be live soon so any interested pubs should check out my offer.
- Email marketing - Critical to keeping you top-of-mind with prospects... regular, relevant and consistent contact is key.
Tales from the (marketing) Darkside (is there any other kind?)
Looking back to my marketing experience over the past decade, I've sold many things to many people both on- and off-line.
Here is Part I of a personal journey of high- (and low-) lights of my online marketing career so far....
There are some marketing I've done that I am very proud of --- like my entrepreneurial student business I ran as an undergrad selling and delivering the New York Times to students and faculty. In 1997, I created a crude but effective columbia.edu hosted website that students could order subscriptions and sent their orders through inter-campus mail (a few brave souls sent me their CC info via email by "securely" breaking the numbers up in several messages --- this was of their own volition!). This was a business I devoted my soul into. I even sent email confirmations of orders via my personal student email address. It was a great way to get my hands dirty and learn using multi-channel strategies to connect with customers (Inter-campus mail, Campus email, Columbia website, Sign-up table on steps of Low Library etc.)
Others, not so proud... Yes, I had my hand at marketing some fairly cringe-worthy products, such as this collector plate featuring none other than the Pillsbury Dough boy.
My first job out of college and I found that my Ivy League education prepared me little for the challenge of marketing collectible "gems" like this. The business model was 99.9% offline and at the time, the online channel was simply not a priority. My company used sophisticated database mining and all types of offline marketing to push these very niche products to tight, product-defined offline mailing segments. But beyond the Herculean direct mail campaigns, publication ads and inserts, the company website was essentially an after-thought.
I (and to a much larger degree, my ex-company) made a lot of money doing this but it was not my dream to apply my marketing skills and passion towards these disposable trifles in a fairly crude and inefficient channel. I would order trailer trucks full of marketing mailers with the tacit knowledge that 1-2% response would be called resounding success (while 98% of the mailing was simply junk-mail). This was mailings by the millions. The direct mail and catalog industry was one that I did not see long-term growth (I liken it the current newspaper industries' struggles to remain relevant with its customers).
So once I paid off my Ivy-League sized tuition loans in just 2 years, it was time to move on.
Now with the rise of targeted SEM and other long-tail mining strategies, I can see enormous potential in these "outlier" products in the Internet space. While I am not privvy to my ex- company's current strategies, I hope that SEO and SEM are core to tapping the niche audience out there that would love to get their hands on that Doughboy plate.
(to be cont'd)
Here is Part I of a personal journey of high- (and low-) lights of my online marketing career so far....
There are some marketing I've done that I am very proud of --- like my entrepreneurial student business I ran as an undergrad selling and delivering the New York Times to students and faculty. In 1997, I created a crude but effective columbia.edu hosted website that students could order subscriptions and sent their orders through inter-campus mail (a few brave souls sent me their CC info via email by "securely" breaking the numbers up in several messages --- this was of their own volition!). This was a business I devoted my soul into. I even sent email confirmations of orders via my personal student email address. It was a great way to get my hands dirty and learn using multi-channel strategies to connect with customers (Inter-campus mail, Campus email, Columbia website, Sign-up table on steps of Low Library etc.)Others, not so proud... Yes, I had my hand at marketing some fairly cringe-worthy products, such as this collector plate featuring none other than the Pillsbury Dough boy.
My first job out of college and I found that my Ivy League education prepared me little for the challenge of marketing collectible "gems" like this. The business model was 99.9% offline and at the time, the online channel was simply not a priority. My company used sophisticated database mining and all types of offline marketing to push these very niche products to tight, product-defined offline mailing segments. But beyond the Herculean direct mail campaigns, publication ads and inserts, the company website was essentially an after-thought.
I (and to a much larger degree, my ex-company) made a lot of money doing this but it was not my dream to apply my marketing skills and passion towards these disposable trifles in a fairly crude and inefficient channel. I would order trailer trucks full of marketing mailers with the tacit knowledge that 1-2% response would be called resounding success (while 98% of the mailing was simply junk-mail). This was mailings by the millions. The direct mail and catalog industry was one that I did not see long-term growth (I liken it the current newspaper industries' struggles to remain relevant with its customers).
So once I paid off my Ivy-League sized tuition loans in just 2 years, it was time to move on.
Now with the rise of targeted SEM and other long-tail mining strategies, I can see enormous potential in these "outlier" products in the Internet space. While I am not privvy to my ex- company's current strategies, I hope that SEO and SEM are core to tapping the niche audience out there that would love to get their hands on that Doughboy plate.
(to be cont'd)
Twitter can make money? Will wonders never cease.
Despite the fact that Prof. Kagan's final contains questions regarding this very subject, I thought it was time to blog a bit on Twitter. I think everyone (and their grandmothers) know what it does but the biggest question remaining is "Can it make money?"Well, apparently Dell says "YES!"
In a recent WSJ.com article "Dell Sells $3 Million Through Twitter", Dell reports healthy sales generated by their outlet site, DellOutlet.
With over 620,000 followers, Dell uses Twitter's brief and timely communication model to disseminate time-sensitive and quantity limited promotions. (i.e. 20% off any Dell Outlet Printer. Enter at checkout: 06G$WMFPKXPCT8 – exp 6/2 or after 1st 500 redemptions) and answer customer questions.
The key to this success lies in adapting the Dell Outlet messages to the Twitter medium:
- Niche segmentation: Outlet customers
- Promo distribution is fast and often
- Promo is limited by time and qty
So we know Dell makes money! Now if Twitter actually charges Dell for this service, they may make money too!
Disintermediation Strategies
Disintermediation Strategies
In class we discussed Disintermediation, the act of cutting out the middlemen in Internet based transactions while aggregating data. We covered Travel and Classifieds and metadata sites that aggregate the retail travel and job posting sites to provide even more Channel Features to the existing sites.
In class we discussed Disintermediation, the act of cutting out the middlemen in Internet based transactions while aggregating data. We covered Travel and Classifieds and metadata sites that aggregate the retail travel and job posting sites to provide even more Channel Features to the existing sites.
The largest disintermediated industry in terms of ad spending is the Financial Services Sector. The graph shows that Financial services accounted for 13% of the 23 Billion spent in advertising in 2008. The Hitwise reported that Yahoo Finance had more site views than Etrade, Shwab, Scottrade, and TD Ameritrade combined. The success of disintermediated sites is by providing all information needed to make an informed purchase without the middleman.
On a similar note, in light of the recent downturn in the Automobile market, car companies should start better methods of disintermediation and cut out the salesperson. Instead of costly and headache prone car dealerships, consumers can possess all information online and have an orbitz-like metadata site comparing prices. When all information is online customers can eliminate the hassle while car companies can circumvent dealerships and set up salesperson free test drive sites.
Usually when a customer decides on a car, he or she knows the exact make, model, color and options. Start comparison shopping online! Auto advertising is also one of the biggest online ad spenders at 12% of all ad spending in 2008. The industry should take this advertising the next step with ecommerce solutions. Especially after the recent forced closings of dealerships by GM and Chrysler.
CHINA: Alibaba.com: Green Commerce Continues
In class,Prof Jeremy guided us pretty well on thinking more broader and deeper about online dynamic applications like E-commence, online auction,real estate broker,dating,social networking etc. Triggered with the comprehensive "picture" addressed by him, I think, besides personal social and entertainment needs, how should we come up with the indivudial social responsibility of protecting environment by using internet tools toward "Green" products. For you enrichment, I hope the article could give you a sense of what's going on in China about the green commerce and trigger you thinking about how to embrace the new energy ecological system global trend.
June 5, 2009, 7:31 am
"Despite the downturn, online trade in environmentally friendly products is holding up well", said CEO of Alibaba.com, the Chinese e-commerce and business-to-business giant. Over the past two years, the company reports that its Web site has seen a steady growth of searches for alternative energy resources like solar and wind power, electric cars, fuels and organic products. Solar-powered energy and organic products are the fastest-growing green sectors, increasing 71 percent and 68 percent year-on-year, respectively, in the first quarter of 2009, according to the company. Solar lights are among the most popular green items sold online, as countries in Europe, and parts of the United States begin to replace traditional streetlights with sun-powered alternatives. “Despite the downturn, online trade in environmentally friendly products is holding up well,” said David Wei, the chief executive of Alibaba.com. “This is because going green not only saves money, but it also creates money, especially as more entrepreneurs develop innovative products to support growing global demand.” Some members of Alibaba.com’s trading community agree.
“Climate change is having a positive impact on our business. Our sales have been growing by 30 to 40 percent over the past three years thanks to strong demand for green products from customers in the U.S., Europe, Middle East and Southeast Asia,” said Xiao Benpeng, the international trade manager for a company based in Hubei that specializes in high-tech solar energy products, and a member of Alibaba.com. China itself has set goals of generating 16 percent of its energy from renewable sources by 2020, and it has set aside about $30 billion of its economic stimulus package ofr the energy conversation and ecological engineering. Alibaba.com executives say they believe that these large-scale green projects will translate into multiple e-commerce opportunities.
Friday, June 12, 2009
A Myspace Resurgence?
In our last class, Professor Kagan mentioned how Facebook is becoming the world industry leader in social networking while MySpace is plateauing. So the question remains: what is MySpace going to do about it?
Apparently, quite a lot. According to a recent CNN article, MySpace has undergone some significant internal reshuffling, including the hiring of a new chief executive, Owen Van Natta, who has done extensive work in online music and entertainment, and used to be an executive at ... you guessed it, Facebook. To me, this appears to signal either that MySpace will start taking on characteristics that seem more in line with Facebook's, or that it will return to its music roots, which is what propelled the social networking site in the first place (or, perhaps a combination of both).
The article also quotes Adam Ostrow from Mashable.com, who attributes the decline of MySpace to its current owner, News Corp. The implication is that a corporation is poorly equipped to run a social networking site. I tend to believe him, given that Friendster began to stagnate when its founder Jonathan Abrams allowed too many corporate chefs to spoil the broth, in a manner of speaking.
Interestingly enough, Facebook is growing into quite a large corporation itself, with well over 700 employees (I've actually noticed a number of my friends in Nor Cal are listing Facebook as their employer on ... you guessed again, Facebook). It's true that Mark Zuckerberg adamantly denied Digital Sky Technologies' CEO Yuri Milner a seat on the board. But it may only be a matter of time before Zuckerberg caves in and allows Facebook to take on more board members with long corporate resumes, and this perhaps may cause Facebook to lose its innovative luster, as with the social networking companies that preceded it.
But the point of the article again, is that there is hope after stagnation. Just as Friendster is making its comeback through discovering new markets in Southeast Asia, MySpace is banking its own comeback on innovation and reinvention. One last hurdle both companies may still have to face, however, is their "demographics problem". According to the CNN article, because MySpace's audience is younger than Facebook's, it is less appealing to advertisers. By the same token, Friendster's international audience proves more difficult for advertisers to make money than with a domestic audience.
For me, there were three important take-aways from all this: (1) In the social networking world, innovation is the key to staying on top; (2) Corporate board members and investors may in fact stifle innovation instead of fueling it; and, (3) Even when companies plateau or plummet, there's always room for a resurgence.
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