More soon. News here.
Or perhaps I should say, lazywebbing out loud. I have been thinking about the connection between Twitter and Facebook (many folks, including myself, have noticed how once Twitter updates your status, comments increase in Facebook, but it’s a one way experience). In short, Twitter is a Facebook application, but Facebook is not a Twitter application. It should be. But will FB Connect be enough to make it so? Sure, I know you can import your social graph and profile info, but can you import comments on status? IT’d be cool if you could. And what can you do with the data? Has Twitter taken a stance on FBConnect? Is it going to build it in? Should it? I’m running to my last set of meetings in NYC this morning and will check in on this thread before hitting the airport. I think there’s something in there worth picking apart….
YouTube as a reference site and search king (yes, video is grammar).
Microsoft’s (and others’) Plot to Kill Google. Good luck with that.
A survey underwritten by MSFT finds advertisers are wary of Google. Despite the source, I can’t imagine this isn’t true. If only they also weren’t wary of Microsoft.
I’m in NYC in back to back to back meetings, but thought I’d note some news of the day.
My in box greeted me with this from Cowen Jim Friedland analyst this morning:
We are updating our U.S. online advertising industry projections to account for the weakening macro outlook. We expect the online ad market to shrink by 1% in 2009, compared to our prior projection of 3% growth; we are projecting paid search growth of 5% and an 8% decline in display advertising. Our estimates are based on the assumption of a 10% decline in the total U.S. ad market in 2009. We continue to believe that search will eventually account for 10-15% of total ad budgets (up from 5% in 2008) and that Google will continue to gain share. Although upward number revisions are unlikely in the near term, we believe that Google is attractively valued based on our downside scenario of 0% revenue growth in 2009.
We expect online advertising to account for 9.6% of total ad budgets in 2009, up from 8.7% in 2008. The one consistent message we are hearing from our industry checks is that advertisers are shifting spending to search at the expense of traditional media (we have also heard that display ad budgets are being shifted to search in the weak macro environment). We expect this trend to continue, regardless of how much the overall advertising pie shrinks in 2009, given the higher returns generated by search compared to other media.
We continue to believe that search will eventually account for 10-15% global ad budgets, up from 4-5% today. We expect online advertising to eventually account for 25% of the total U.S. ad market, which is the level achieved by the television ad market at maturity. Paid search accounts for 60% of online ad spending, and we expect the ratio to hold, or increase, given that search offers higher returns than display ads; 25% x 60% = 15% target share.
In other words, it’s all going to hell, but folks will push money to search, because search performs. I think this misses the way media markets work, which is to say, one can only harvest so much demand, before one needs to create it, and to create it, you need to build brands. And to do that, you need to figure out how to engage with potential customers online. More on that when I’m not traveling.
I’m traveling to NY for a few days this week, and alas, will be on a plane during part of the inaugural speech. But I am very excited that a new era is dawning, and I hope we have both patience and high expectations for our new government.
Yesterday, we got a new news search engine which taps into Twitter that Yahoo’s excited about, as it uses their BOSS system. That kind of annoyed me. Why didn’t Yahoo just build the service themselves? Or a regular Twitter search service, for that matter? And where’s Twitter search from Google?
Well, my answer is simple: Competition.
The reason there is not a “Twitter search” from Yahoo or Google is because both companies want to own Twitter, or at least, they want to own the phenomenon of real time search Twitter represents. If they were to create a Twitter search, it would validate Twitter and give the company way too much power. Yahoo has a deep memory of essentially creating Google by using Google as its main search engine during Google’s early rise. If any company has a shot at beating Twitter, it’s Yahoo, to my mind.
And Google is likely viewing Twitter as a competitor, and is probably noodling the addition of Twitter-like functionality to Blogger (if it hasn’t already, I’m not following the service too closely). The reason? TweetSense. I am certain Google wants AdSense to be TweetSense, and I am equally certain that the Twitter team will want to build its own version of a scaled ad platform that matches consumer intent, as declared through Tweets and search, to marketers’ paid listings.
We are seeing the same movie over at Facebook. It’s going to be fascinating to watch.
They are talking again – Yahoo and Microsoft, and many are claiming a deal in which MSFT buys Yahoo search is imminent. But we’ve heard this before. I don’t think straight out selling Yahoo search to MSFT makes sense. Jerry is right – the piece notes his view that advertisers want to buy brand with search – and as I’ve written in the past, search gives a company like Yahoo extremely valuable data – consumer insights that help drive product development.
Instead, there’s a third way.
Recall my 2009 predictions:
1. I predicted that Yahoo would buy AOL, then MSFT would work a search deal for the combined entity
2. I predicted that Microsoft would gain 5-10 points of share this year.
The two clearly work together.
But what I think is interesting, or could be, is the creation of a third party search company that is owned by Yahoo and Microsoft. I guess I will keep banging the Soverture drum. I wrote this piece back in March of 2007. From it:
Everyone knows how difficult it’s been for both Yahoo and Microsoft to beat Google at its own game – search. Yahoo has been beat up for years over its lackluster monetization efforts – after initially gaining plaudits for its bold purchase of Overture. And over at Microsoft, search is still at the Windows 1.0 phase, and the rumblings I’m hearing out of Redmond are not encouraging. People are leaving, search share is dropping, and recruitment is tough.
But then again, both companies bring a lot to the table. Yahoo did a great job combining several engines into one solid organic search performer, and early reports on Panama are also solid. Microsoft has an innovative approach in its demographically-driven AdCenter. Both companies have significant traffic of good intent. For building search companies, Yahoo is in the right location. Microsoft has huge market cap and cash. Both need to do something, quickly, to prove to Wall St. that they can compete with King Google.
So why not join forces, like back in the good old days when Overture fed both Yahoo and Microsoft? Such a venture solves any number of tough problems
One of my predictions in 2009 was that Twitter is going to continue to take off. When I read on TC that Pierre Omidyar is fascinated with the service to the point of investing in a related company and even acting as an exec, I have to feel a tad bit validated. A caveat – Omidyar Networks is an investor in my company FM.