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Pandora's Facebook Box

By - March 16, 2011

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(image) I flew to Detroit today, and thankfully Delta had wifi. Since I’ll be speaking at a GM conference later in the week, and the fine folks from Pandora will be there, among others, I went and checked in on the site, which I’ll admit I haven’t visited in some time (I still consume music the old fashioned way – I buy CDs and rip them to iTunes). Now, the theme of GM’s internal conference is all about “the app economy” and fortunately, lately I’ve found myself thinking a lot about this samesaid phenomenon. Given that, allow me to digress. As usual, I have no idea where this is going, but at least I know where it’s going to start: With my first visit to Pandora in some time.

Here’s what happened. Pandora has done a “deep integration” with Facebook since my last visit (yeah it’s been a while), meaning that when I showed up (and was logged into Facebook already), Pandora went ahead and filled out my profile using Facebook data. To the site’s credit (and I hope based on some terms of service from Facebook), the service notified me of this, and asked me if using my Facebook profile was OK.

Now, you may recall the kitty-with-a-ball-of-yarn that is my Facebook account. In short, it’s a tangled mess, and I’m at a loss around what to do about it. Short version: I said yes to the first 5000 folks who asked to be my “friend” and found myself with a pretty useless “social graph.” I’ve tried a few times to remedy the situation, but Facebook ain’t making it easy. The service wants you to be who you already are, not who you might want to become, that much is obvious. And who I already am on Facebook is a not-so-hot mess.

So…now I’m faced with importing this samesaid mess into Pandora, a place I was hoping to craft in the image of my own musical tastes. Do I click “OK”, or do I do the sensible thing, ditch the Facebook integration, and start from scratch? I mean, I have no idea how Pandora was *actually* going to use the data it got from Facebook, did I? Obviously the sensible thing was to be cautious, and click No F’in Way.

Of course I clicked Go Ahead, Use the Mess. Because, in the end, all I wanted to do was get to the music, consequences be dammed. Sure, I had no idea how or what Pandora was really going to do with my Facebook data, but honestly, I kind of didn’t care. I figured if it sucked, I’d find a way out. Right? (Actually, yes, you can undo the connection in settings.)

But connecting to Facebook got me thinking. First off, I wondered if Pandora even knew what do to with my “social graph” – given it has no rhyme or reason, and with 5000 or so connections, should Pandora really want to Go Deep, it’d probably melt a few CPUs down at the Music Genome project. And second, it made me wonder whether, had I chosen instead to do the work at Pandora, building my own profile from scratch…well had I done that, I’ll tell you this: I’d sure as hell like to import THAT profile into Facebook, and make THAT profile who I am up in ZuckerLand. Because it sure would reflect my identity a heckuva lot better than Facebook does at the current moment.

Hmmm. Now there’s an idea. What if I could take all that declaration of who I am that I do out on the “rest of the web”, and somehow drive that back INTO Facebook, in such a way as to shift Facebook’s understanding of who I am in a way that I controlled? And what if I could do that over and over, creating all sorts of different identities, ones I could mix and match on a whim, or a mood, or a social instance? Wouldn’t that be cool? I mean, if I could start all over, from scratch, I think I’d like to start at a place like Pandora, build a profile of who I am, and then import that profile (sort of like a piece of digital clothing) into a place like Facebook. Starting at Facebook, in a way, seems backassward. I’m not who I say I am, or who I say my friends are, one time on one platform built just for declaring my identity.

I’m what I do, in context, and that context shifts based on any number of axes – who I’m sharing with, social frame (professional? personal? familial? commercial? intimate? public? etc.), hell, it even shifts with my mood. And it sure as heck shifts over time. (I think this is what Eric was referring to when he joked that we should all have the right to get a new identity after college).

Increasingly, I’m frustrated with a world that wants me to be one thing – one profile, one easily structured dataset, one ring to rule them all. This just ain’t the way the real world works. It’s what I was getting at when I penned “Identity and the Independent Web” last year, and it’s a piece of yarn I’ll continue to pull at, mess be dammed. I want to be able to push data back into Facebook, such that Facebook changes who it thinks I am, and I want to be in control of that process.

In other words, I’d love to be able to tell Facebook, I’m feeling Pandorish right about now…show me what you got for me now?

And I predict that day will come. If not with Facebook, then with a platform that understands me better, one I’ll be more than happy to inhabit.

Am I crazy, or just too early? Tell me what you think.

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KSJO 92.3 – Good Product, Bad Marketing. A Case Study

By - March 06, 2011

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This is a story of a radio station – you know, those old school, pre-Internet media outlets that folks my age grew up listening to. I’ve always been rather fond of radio, in a nostalgic way, and I’ve had an off again, on again relationship with it over the years. For the past few years, it’s been mostly off – I only listen to AM sports radio (my beloved Giants) and NPR on FM. Whenever I get a new car, I get six months free of Sirius, and I check into Howard Stern, but then the trial period ends, and I just don’t feel like the subscription price is worth it, particularly given it’s not transferrable to any of my other cars.

Now, back in the day, radio really meant something. Remember the FM radio boom? If you’re over 40 or so, you probably do – the peak was the 1970s, where, according to Wikipedia “FM radio experienced a golden age of integrity programming, with disc jockeys playing what they wanted, including album cuts not designated as “singles” and lengthy progressive rock tracks.”

In case you’re wondering, it was this period of time that inspired the name of my company Federated Media, or FM – the explosion of independent voice in radio during the 1970s was quite similar to the explosion of independent voices on the web today….but I’m taking a detour. Back to my story…

So a week or so ago I find myself stuck in my car for longer than my average commute, and both sports radio and NPR were, for various reasons, insufferable (which they both can be quite often). I listen to my own music a lot as I work or work out, so I wasn’t hankering to plug in my own tunes (and it’s impossible to do so while driving if you want to make a call, thanks Audi!).

I was looking for something new – in short, I was in discovery mode.

So what did I do? Well, I reverted back to my 1970s roots, and I started flipping around the FM dial. Nearly everything I landed on was terrible – the same old top-40 pop or lowest-common-denominator format crap that’s infected this increasingly irrelevant industry for more than ten years (I’m looking at you, Alice 97.3!).

Then I landed on 92.3 – KSJO – and out came, of all bands, the Local Natives.

Now the Local Natives aren’t utterly arcane, but they aren’t exactly mainstream either (at least, they weren’t a year ago. I’ve heard their music in commercials recently, but that’s pretty standard these days). In short, it was quite surprising to find them on the radio at all, and the song being played was not one of their better-known ones – it was, in old FM parlance, a “B side.”

The next song was of a similar mindset, something by The National I think, or maybe it was Band of Horses or Morning Benders. After that was a deep Broken Bells track. Every one of these bands I have gone to see live, at a festival like Bonnaroo or Austin City Limits, or at a music hall like The Independent in San Francisco. This was music I really connected with, one song after another.

Experiencing what felt like *my* music being played on the radio was a total shock – it had been nearly 30 years since a radio station was a community I wanted to be part of – a badge I’d wear, so to speak. And anyone who reads this site knows that my definition of a truly successful “publication” is one that has a voice and point of view which draws a community together.

Here I had found a real publication of a radio station. What a novelty!

Over the past few days I’ve been actually listening to KSJO because the music is good – I know nearly all of it, and that which I don’t know is interesting – I wanted to know more. Oddly, the format of the station is “DJ-less” – there’s no one telling me the names of the bands – in fact, I’ve never even heard the station break for an advertisement (a red flag, to my mind – clearly this couldn’t last).

The only break between songs is an ongoing, pre-recorded “campaign” called “Save Alternative,” voiced in a rather irritating manner by a young woman trying to be a bit too cool for school. Given that the “save alternative” stuff was pretty minimal, it didn’t drive me off the station, I was digging the music and I was intrigued by this new entrant on the dial. At some point the woman’s voice mentioned “savealternative.com” so of course, I decided to check it out online. Clearly, whoever had just bought the station was working up some kind of promotion around this, and I figured they must be starting it commercial free.

Here’s where the story goes south.

On the site, there’s nothing but a page imploring visitors to join “SALT”, the “Save ALTernative Cult”. “Justice is coming” the site promises. Ick. Maybe I’m not in the demo, but honestly, all this “us vs. the man” stuff is pretty cliche. Justice for whom? Folks tired of shitty radio? OK, but really, do I need to join a cult for this?

But even though the voice was off putting, I signed up to be on their email list, because the music was just that good. In other words, the product was great, even though the marketing, so far, was way off key.

The marketing only got worse, at least in practice. In fact, it’s rather a case study of what NOT to do if you have a product so good, people actually do work to tell you more about themselves.

Here I was, a fan of the product who converted from an on air listener to taking action on the web – I actually filled out an online form. As any marketer knows, that makes me one of the most valuable potential customers that station could ever have – in particular as I was an early adopter. It turns out, the station was sold on Feb 28, 2011 to a new owner, and this format was barely a week old by the time I filled out the form. And while I don’t want to make too big a deal of it, I think I’d qualify as an influencer – I’ve got a few hundred thousand followers of my RSS and Twitter feeds. I wanted to tell people about the new station, but…well, while the product was great, the marketing was now in the way. I wasn’t sure I wanted to send folks to savealternative.com. It was a bit too…cheesy. I couldn’t endorse it. (I didn’t even want to “Like” it on Facebook.)

So I gave them my email address and other info, including some of the bands I liked, and that was that. The homepage promised I’d find out about local bands and other promotions, and that sounded good. There’s literally nothing else on the site, not even a playlist (which was the main reason I went to the site in the first place).

I was still curious about the station, and wanted to know the playlist, and I figured the “regular station” must have a site as well. A bit of Googling landed me at a very odd place – it had some of the playlist info I was looking for, but it also had a slide show with pictures of the Kim Kardashian in a tiny swimsuit and a bunch of other random, corporate rock crap – not exactly consistent with the product which drew me in the first place.

In short, I was utterly confused. Today, as I wrote this post, I tried to find that site again, and for now anyway, the site is offline (there’s another one related to the sale here, again, with nothing on it). I probably saw a site in transition as the ownership was being transferred. But first impressions are critical to growing a viral and evangelistic audience, and so far, the new owners were blowing it.

I’m not trying to pile on here, but it does get worse. It’s been a week since I gave “savealternative.com” my email address, and so far, it’s been crickets. I didn’t even get a confirmation email thanking me for joining up. I want to connect, I want to become part of the community implied by this fresh new voice on the radio, but…whoever’s running marketing there is fumbling around in the dark.

I for one hope they find the light switch. And for any of you planning digital marketing campaigns, keep this case study in mind. If you’ve got a great product, make sure your marketing and comms pay it off online. Your early evangelizers are the spark that amplify your brand. Don’t snuff it out before it has a chance to catch fire.

NB: I’ve been thinking a lot about local and location-based marketing in advance of FM’s Austin Signal event this week. If any brand is location-based, it’s a local radio station…hence the long post…

The Internet Interest Bubble

By - March 03, 2011

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A couple of days ago I was speaking with Reuters reporter Connie Loizos, who’s been covering the Internet space since the days of the Industry Standard (she worked at the Red Herring). She was working on a story questioning whether there was a new bubble brewing in our space, a question that many have asked in the past few months, in particular as it relates to private financings of startups. You can find that story here, on PEHub.

As readers of this site know, I don’t believe we’re in a real bubble, at least not the kind that popped in late 2000 (or the housing bubble, which seems still to be popping). But that’s not the interesting part of our conversation. Connie asked if I thought the press was in part culpable for our collective obsession with sky-high private company valuations, “hot new startups,” and the like.

Of course the answer is yes – there’s an “interest bubble” of sorts – but the answer is nuanced. And nuance is something I’ve found in short supply throughout the Internet ecosystem – at least in what we’ve come to call “the press.”

So let’s break it down. First off, what is “the press”? If you define it as “responsible journalists working diligently at their craft” then I’d submit we no longer have an information ecosystem dominated by “the press.” Indeed, we have a ton of great reporters doing their jobs – probably far more now than we had even at the height of the first boom. But the overall conversation is no longer dominated by their work. Instead, we have migrated to a more free-wheeling discourse driven by any number of interested parties. As it relates to the Internet industry, that means VCs and entrepreneurs promoting or angling for investments or promotion (or souring a deal they didn’t get a part of), bankers trying to influence any number of outcomes, and sources within all manners of companies pushing their own agenda on Twitter, Quora, or in private conversations with bloggers and other media outlets.

The tweets, conference utterances, and blog posts of these sources are instantly turned into “news stories” by the post-cambrian publishing explosion of sites covering the narrative that was once the province of first-generation Internet magazines like the Industry Standard (that’s the prototype of the first Standard above). And of course, I celebrate this explosion – Federated Media has been central to the business model of most of these second-generation sites, either as former partners (Ars Technica, TechCrunch, Digg, Reddit and soon Mashable) or current (Business Insider, Read Write Web, The Next Web, VentureBeat, GigaOm and scores of others just in the tech space alone).

But while I love the role these publications play in our information processing, it seems we’re failing to evolve past the first few stages in that process. Sources hint or brag or dish, then those tidbits are quickly worked into stories. But where’s the bigger picture? Where’s the hold-on-a-minute-let’s-think-this-through-and make-a-few-phone-calls-and-see-how-it-develops approach? Where’s the conceptual scoop? The second-day (or even second week) analysis?

To be fair, every single publication covering this space does wonderful analysis, from time to time, but their bread and butter is chasing what Connie called “the echo chamber.” Lately, that chamber has gotten very, very large – millions upon millions of people visit these tech news sites, because the narrative they chronicle is more important than it’s ever been. Our industry impacts a huge swatch of society and culture, and increasingly is understood to be the core driver of pretty much all of business today.

I’m extremely proud that this story has gotten to the point of so much interest and so much coverage. But are we paying attention to the right things? I’m not sure we always are. I sense a big opportunity to create a new kind of publication, one that has at the center of its brand a thoughtful and deeply informed point of view. I’m not sure how such a site might become profitable in this current era of page-view driven publishing, but I’m relatively certain that could be figured out. I for one want to read this publication, and I wish it existed.

The Rise of Digital Plumage

By - February 27, 2011

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Before we go out, my wife will often ask “how are people dressing tonight?” I’m never quite sure how to answer – at least for her. In essence, she’s asking me to read the room we’ll be in, and then translate the social nuance of that room to her choice of clothing.

While I certainly pay attention to what I wear, I’ve come to the point in my life where choosing clothes for a social night out isn’t that big a deal anymore. Women, or perhaps my wife in particular, seem far more attuned to the symbolism of social dress than I (perhaps that’s why it takes them so long to get ready!). It’s not that I don’t appreciate a well tailored jacket – I do – it’s just…well I know what I like, and I like things simple. If you’ve seen me speak at a conference, you pretty much know what I look like at dinner on a Saturday night. Instrumenting the nuances of my social dress pretty much comes down to “white shirt or black?” and “those jeans or these?” (Though I will admit to a weakness for shoes.)

Of course there are a lot of nuances in the choices of which jeans, shoes, shirts or jackets we wear, even if they seem similar on their face. And those nuances count, a lot, in how we feel about ourselves in the context of a social situation, and they doubly matter in how others view us. Clothes may or may not make the man, but we all wear clothes (for the most part!), and we all wear them differently.

We humans have been obsessed with clothing for literally thousands of years, and we’re the only animals on the planet that purposefully drape ourselves in social symbols of our own creation. (Clearly, many animals have “clothing” of their own – plumage comes to mind – but we’re the only ones who change our plumage pretty much every day, if not more often.) And in the past few hundred or so years, brands have emerged (from Abercrombie to Zegna) which have very real meaning to us. We drape ourselves in these brands, and they project all manner of meaning into the world.

Where am I going with all this? Well, stick with me. I was on the phone with Doc Searls last week, preparing for an onstage conversation we’re having at the IAB conference later this week. We’ll be discussing issues of how consumers’ data is used by marketers, and why, so far, no ecosystem has evolved that puts the customer in the driver’s seat when it comes to leveraging our own data (Doc is working on this under the rubric of “VRM“). The theme of the IAB meeting is “The People vs. Data” – framing the debate as “us vs. them” – where “us” is folks on the web, and “them” is the ecosystem of marketing infrastructure using “our” data to serve increasingly sophisticated messages to us.

But who owns that data? Don’t we, at least in conjunction with the services we use? And why haven’t we taken control of it?

Well, possibly because we don’t see data as social clothing. But I think, in time, we will. Every day, we wake up and spend at least a few minutes instrumenting our clothing choices for the day. Why don’t we do the same with our data and identities online?

I’m tempted to blame Facebook for this – because as I’ve pointed out here many times, Facebook is currently a pretty homogenous place, with relatively poor instrumentation of who we are, socially. Our Facebook identities are the same no matter to whom we present them. How strange is it that we as humans have created an elaborate, branded costume culture to declare who we are in the physical world, but online, we’re all pretty much wearing khakis and blue shirts?

I suggested that one reason was that we, as consumers and customers, simply didn’t want to spend the time required to instrument our data so that it was presented in such a way as to be valuable to us. It’s just too much work. But over time, I think we will change our views of this, and begin to clothe ourselves in various highly instrumented digital garments. And there’s a very large business opportunity out there for brands to emerge as creators, distributors, and yes, sellers, of this new digital clothing.

Update: The Journal has a piece today around startups in the privacy and personal data “asset class” which smacks of a kind of digital clothing.

Google, Social, and Facebook: One Ring Does Not Rule Them All

By - February 17, 2011

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When I read Google announcements like this one, An update to Google Social Search, I find myself wondering why Google doesn’t just come out and say something like this: “We know social search is important, and we’re working on it. However, we don’t think the solution lies in working only with Facebook, because, to be honest, we think social media is bigger than one company, one platform, or one “social graph.” We’ve got a bigger vision for what social means in the world, and here it is.”

Wouldn’t that be great?

Because honestly, I think the company does have a bigger vision, and I think it’s rooted in the idea of instrumentation and multiples of signals (as in, scores if not thousands of signals understood to be social in nature). In other words, there is not one “ring to rule them all” – there is no one monoculture of what “social” means. For now, it appears that way. Just like it appears that there’s one tablet OS. But the world won’t shake out that way – we’re far too complicated as humans to relegate our identity to a single platform. It will be distributed, nuanced, federated. And it should be instrumented and controlled by the individual. At least, I sure hope it will be.  

Google might as well declare this up front and call it a strategy. In that context, it might even make sense to do further Facebook integration in the near term, as one of many signals, of course. Google already uses some limited Facebook data (scroll down), but clearly has decided to not lean in here (or can’t come to terms with Facebook around usage policies). Clearly the two companies are wary of working together. But it’s my hope that over time, whether or not they do should be a moot issue.

Why? Because I view my Facebook data as, well, mine. Now, that may not really be the case, but if it’s mine, I should be able to tell Google to use it in search, or not. That’s an instrumentation signal I should be able to choose. Just like I can chose to use my Facebook identity to log into this blog, or any number of other sites and services. It should be my choice, not Facebook’s, and not Google’s either.

Switch the control point to the customer, and this issue sort of goes away. I have a longer post in me about “social clothing” – came up on a phone call with Doc Searls yesterday – and hopefully when I get to that, this might make a bit more sense….

Remember Googlezon?

By - January 25, 2011

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Lately I’ve become a bit obsessed with predicting the future. Not the present future, as in one year from now – I do that every year, after all. But the long-ish future, as in ten to twenty years out. That kind of a time horizon is tantalizing, because it’s within the reach of our reason – if only we play the right trends out, and anticipate new ones that could defensibly emerge.

I’ve often found that predicting the future is a waste of time, but reporting the future is a worthy endeavor. More on that in another post, but I learned this distinction from my mentors an co-founders at Wired back in the early 1990s.

Late last year the Economist asked me to predict what the world might be like in 2036. When they asked, I of course said yes, because heck, it’s very rare for anyone to get a byline in the Economist (most pieces run without credit). I think my predictions were OK, but I have to say I can’t defend them with any kind of rigorous framework.

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Over the past week or so, however, an idea has grown inside my mind, and I can’t shake it. I spend a lot of time thinking about where this Internet Economy is going, and I’ve grown tired of the short view. I’m itching for a wider vista, for a time frame that spans years, if not decades. Most of the blogs, news outlets, and pundits I read day-to-day are stuck in the short now. I want to think more about the long future.

So I’ve started looking for predictions that spanned at least a decade. And of course the first one that came to mind was EPIC 2014. I remember covering this short film in 2004, when it first came out. It caused quite a stir back then, because the scenario it painted seemed so…possible. And given that it was predicting events an entire decade later, it had a certain whiff of science fiction to it. We want to believe in science fiction – after all, it’s nothing more than proof that the future is already here, just unevenly distributed.

EPIC 2014 focused on one thread of our ever-changing Internet Economy – our relationship to media. Some six-plus years of heady change later, I wondered, how does it hold up? And what can we learn from watching it now, just a few years from its predictive date of 2014?

Well, depending on how you grade it, it’s either an utter failure, or pretty smart, given the constraints of the time.

Remember, after all, that in late 2004, Facebook didn’t really exist. Certainly the idea of the “social graph” was years from cultural currency. Twitter was utterly foreign. EPIC 2014 is interesting for the assumptions it makes, and what it got right, and what it got wrong. Here are few choice ones:

- The New York Times “goes offline.” This seemed vaguely possible only a year ago. Now, the Times seems quite a bit more healthy, and it’s certainly not going anywhere soon. In fact, most news outlets look to the Times as forging a new model for news, one that just might work.

- Google buys Tivo. Nope, but damn, I bet many wish they had. This assumes Google wants to be a really good interface to TV. Apparently, no one at Google got that memo, yet. Because all I have heard about Google TV is that the interface is way, way too hard to understand.

- Microsoft responds to Google by buying Friendster and creating “social news.” If only! That might have saved Friendster, if only for a year or two. But the thinking that social news would be really important was prescient. Microsoft would create this social news service by 2007, EPIC predicted. Well, the company did a major deal with Digg in early 08. How did *that* work out, eh?!

- Google will create a service called “Google Grid” – a smart prediction of cloud computing; with “subscriptions” to “editors” who add value to the grid. This presages Twitter and Tumblr, or the rise of social editors and supernodes, as I’ve written previously.

- Google and Amazon would join forces, with Amazon lending its recommendation smarts, and Google lending its grid computing. Oddly, Amazon is now the leader in cloud, with Google a close second. And so far, Google and Amazon haven’t become real partners, in fact, if anything they are poised to be mortal enemies given the fight over media distribution coming with Kindle, Android, Google TV, and Amazon’s streaming media ambitions.

Overall, what I find fascinating about EPIC is how it got the overarching trends right, in the main, but the timeline and the details, while supporting a compelling narrative, were utterly wrong. Yes, the cloud is coming, but man, it ain’t gonna take over the world in a mere five or six years! Yes, social news and social editing will be critical, but NO, the winners of the current day – Google, Amazon, and Microsoft – would NOT rule that world. Totally new and unpredictable startups – Facebook, Twitter, Tumblr – own that space now. And in the meantime, a shooting star – Digg – came, flamed, and went!

All in all, I love EPIC 2014 just for the fact that it was made. Here and below is a link, again, to the video, this time on YouTube, which, of course, didn’t exist when EPIC was made.

I love the Internet.

The InterDependent Web

By - January 23, 2011

When I wrote Identity and The Independent Web last Fall, I was sketching out the beginnings of what I sense was an important distinction in how we consume the web. This distinction turned on one simple concept: Dependency.

Of course, the post itself was nearly 2500 words in length and wandered into all sorts of poorly lit alleys, so one could be forgiven for not easily drawing that conclusion. But since that Thinking Out Loud session, I’ve continued to ponder this distinction, and I’ve found it’s become a quite useful framing tool for understanding the web.

So here’s another attempt at defining one corner of the “Independent Web,” as distinct from the “Dependent Web.” In my original piece, I state:

The Dependent Web is dominated by companies that deliver services, content and advertising based on who that service believes you to be: What you see on these sites “depends” on their proprietary model of your identity, including what you’ve done in the past, what you’re doing right now, what “cohorts” you might fall into based on third- or first-party data and algorithms, and any number of other robust signals.

The Independent Web, for the most part, does not shift its content or services based on who you are.

Yahoo, for example, will show you one of a possible 38,000 home pages, depending on who Yahoo believes you to be. Yahoo Mail (or any other mail, for that matter), is an utterly dependent service: it will only show you your mail (we hope). Facebook, of course, creates an entirely different experience for you than it does for me, because what Facebook shows us depends on who Facebook thinks we are. And search, in general, is a dependent service – what you see as results depends both on what you input as a query, as well as who the search service believes you are (personalized search).

And while I believe this idea of a dependent service being defined as “one that changes depending on its profile of you” is important, this isn’t the only feature that distinguishes Independent sites from Dependent ones.

Another way to understand the distinction is that Dependent sites tend to be ones we, well, depend on for some basic service in our lives. You might depend on Yahoo or Google for mail. We depend on Facebook for our social graph, and Twitter for our “interest graph.” Of course we depend on Google (or Bing) for search. And I’m starting to depend on StumbleUpon to surface sites I might like.

In fact, most of us “depend” on Dependent-web services to discover independent sites – a fact we may as well call “the interdependence of the independent and dependent web.”

Whew. We employ both kinds of sites, and each type depends on the other for value. What would Google be without the billion points of independent light out the rest of the web?

Not much, to my mind, and I think that’s essentially the point of both Fred’s call out today (see his piece on The Independent Web) as well as his partner Albert’s advice to Larry Page.

The funny thing is, Dependent web sites crave the dollars that big marketers spend on branding, but their services don’t complement brands, in the main. Yet up until recently, brands haven’t have many other places to spend their dollars online (brands love scale), so they’ve spent them at large dependent web services, and, in the main, bemoaned their comparative weakness to television. Yahoo Mail is a famously terrible place to put brand advertising. Google is a direct marketing machine, but it’s not a great environment for brands. Brands love Twitter and Facebook, but are still trying to figure out how to leverage those services at scale – Facebook’s “engagement ads” are not exactly brand friendly, though they can serve as great distribution for a branded story somewhere else (same for Twitter’s promoted services).

So where does that brand story live? My answer: On the Independent web.

Consider the sub-category of “content” on the web. It’s a very large part of what makes the web, the web – millions of “content sites,” ranging from the smallest blog to ESPN.com. Most of these sites don’t change what they show us depending on who they think we are. So does the “independent/dependent/interdependent” framework help us distinguish anything interesting here?

I think it does. To me, an independent content site is one driven by a sense of shared passion around a subject or a voice, one that a consumer independently chooses to visit and engage with.

Publishers pay close attention to what visitors choose to do independently on our sites – we covet “repeat visitors,” “high engagement,” and “low bounce rates.” Do visitors come back independently, or do we, as publishers, depend on acquiring one-time traffic from SEO, SMO, or other “tricks”? Once visitors come via a dependent service like search or social or StumbleUpon, do they independently elect to consume more than just the one page they’ve landed on?

When it comes to “engagement”, dependent sites tend to have more of it, at least if you are measuring in user minutes. Folks stay on Facebook for a long, long time. Twitter users go back over and over again, especially power users. The average Google user goes back again and again. Most of Yahoo’s engagement is in mail – take mail out of Yahoo, and Yahoo would lose a huge chunk of its user minutes.

But there’s a big difference between engagement on a dependent site, and engagement on an independent site. And in a word, that difference is what makes a brand.

When we engage with content, we engage with a shared narrative – a new story is told, an old story is retold or re-interpreted. And that shared narrative shifts what we believe and how we see the world. We are in the space of shared symbols – brands – and it is in this space that marketers can tell their stories and shift our perceptions.

I’m fascinated by how brands can leverage Dependent services in conjunction with the Independent web, and if there’s one conclusion I’ve come to, it’s this: Brands must be robust actors in the Independent web, underwriting its ecosystem and participating in its ongoing creation and curation. It’s not enough to “have a presence in Facebook” or “do an upfront with Yahoo and Google.” Brands must also engage where ideas and narratives are born and shaped – and learn to join the Independent web.

Sure, that idea is self-serving – FM’s tagline is “powering the best of the Independent web, at scale.” But that doesn’t mean we don’t love us some Dependent web services. We’ve been pioneers in working with all kinds of great services, from Digg in 2006 to Facebook Platform in 2007; Twitter in 2008 to Foursquare in 2010. If you’re going to succeed as a publisher or a brand on the web, you need to work with both. They’re interdependent, and wonderfully so.

Some might argue that you never need to leave a particular service or domain – that you can “get all you need” in one place. I certainly hope not. That sounds like a movie we’ve seen before, and don’t need to watch again.

Make My Baby – Is The Baby Facebook? Updated: No, It's Myspace…

By - January 18, 2011

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Over the weekend, as I pondered an eMarketer report estimating Facebook’s advertising revenue at $1.86 billion (seems low), I wondered to myself: When will Facebook start to drive the kind of widespread graymarket activity which proved Google’s immense worth? Or will it ever?

Allow me to explain. Back in the days when Google and its rival Overture were on the rise (this would be pre-IPO for Google, so around 2002-3), an army of small time arbitragers were gathering, leveraging Adwords (and in 2003, Adsense) to make money in any number of ways. But the basics were pretty easy to grok: Say you could purchase a click on Adwords for the term “cute kitty” for fifty cents. And say further that when someone clicked on your Adword, they’d show up at a third-party site, and 10 percent of the time, they’d follow instructions to fill out a mortgage application. And say that further, you could sell that filled-out application to a lender for $15.

If you do the math – ten clicks costs you $5 on Adwords, but you make $15 for selling that lead, which converts one in ten times – it explains why a huge business sprang up around Adwords and Adsense. If you are paying attention, redirecting attention from cute kitties to mortgage brokers will pay extremely well. The same proved true for all manners of lead generation, from cel phone plans to life insurance to automobiles.

It’s legal, but it leaves a kind of queasy feeling in your stomach, don’t it?

Now, just that feeling has risen up around Facebook advertising in the past (in particular around social gaming), but I was waiting for it to break out full blown into the “real world” outside of Internet ponziland. When would Facebook become a hotbed of affiliate arbitrage across the board? To me, that would be a sign that Facebook was breaking out just like Google did in 2003.

So it’s funny how this story from RWW breaks just this weekend. And funnier still how it’s all about Google’s competitor, Bing, which has changed the economics of the Internet advertising ecosystem by pricing conversions well above previous floors. It’s all just too rich. Literally. (Google’s Matt Cutts points this out in his own way right here).

The details: RWW found the fact that a random website called “Make-My-Baby.com” was the third largest advertiser on Facebook in Q3 2010. Turns out, it’s an affiliate play driven by Microsoft Bing bounty money. In short, Microsoft offers a certain amount of money, per user, to anyone who can convert that user into a Bing customer. The company behind Make My Baby, Zugo, seems to be a vintage arbitrageur. In fact, Zugo hasn’t even updated its terms and conditions, which date back to 2009 and seem cut and pasted from a program they ran in England doing for Ask.com that they are now doing for Bing.

Clearly, Zugo has found that buying ads on Facebook pays well. The question remains, however, whether that is true for a whole new class of arbitrageur.

Ah, me loves me some Interwebs.

Update: Bing has terminated its relationship with Zugo, SEL reports. And Zugo was using MySpace inventory, NOT Facebook….

No, In Fact, We Haven't Seen This Movie Before

By - January 13, 2011

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Thanks to monster private financings from Groupon and Facebook, as well as the promise of major IPOs from Demand, LinkedIn, Zynga and others, the predictable “watch out, here we go again” buzz is rising up in the press. This article from Ad Age, subtitled “With Billion-Dollar Dot-com Valuations Back in a Big Way, It’s Time for Alarm Bells to Start Ringing,” is typical of the bunch. With a “we’ve seen this movie before” tone, it points out that most of the successful companies of today had models that were tried ten years ago, and in the main they failed.

But I’d like to point out a couple pretty obvious differences between the dot com busts of a decade ago, and the companies that are now earning billion dollar valuations. To wit:

- Each of the companies earning these valuations have revenues in the hundreds of millions or more, and operating profits in the tens of millions, if not more. Most also have operating histories of many years, and/or executives and boards who have extensive histories operating in the Internet economy.

- The markets overall have changed dramatically, on many different fronts. First of all, nearly every consumer in the developed world is comfortable spending money using the web. Second, the web is firmly a mobile medium, enabling business models that were mere dreams a decade ago. And third, the markets have been mostly closed to public investment in the “Internet thesis” for most of the past ten years, so there is a very strong pent up demand to invest in what many see as the future of how business will be done.

Combine these factors and you have what I view as a pretty solid environment: a strong demand for quality companies, and quality companies to fulfill that demand. Is $50 billion too high for Facebook, or $5billion too high for Groupon? Well, we’ll see. As the initial surge of IPO demand abates, newly public companies will prove their value in the long term by delivering growth. At least they have strong platforms of revenues and profits, as well as extraordinary market positions, from which to start. Remember, Google went public in 2004 at under $100, and nearly everyone thought the company was overvalued.

Back in the dot com era, most retail Internet investors were buying on the come, on promises that the hand waving and affirmations of Web 1.0 entrepreneurs would magically come true. Almost none of the companies that went public back then could boast the metrics today’s private winners do. Truth be told, the promises of the Internet hand wavers are coming true, but for investors in the 1990s, it’s a decade too late.

We’re in an entirely different place, as an industry, than we were ten years ago. I very much doubt we’ll see the same mistakes made again. If money losing companies with nothing but an idea and some VC backers manage to go public, I’ll be the first to write a post about our collective amnesia.

And this is not to say that marginal companies won’t attempt to go public in coming years, or that there won’t be flameouts and losers over time. There always are. But compared to the late 1990s, the companies lining up to offer themselves to the public look healthy, well positioned, and very, very real.

What Everyone Seems to Miss In Facebook's Private or Public Debate…

By - January 04, 2011

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…is the core reason it makes sense for Facebook to be public: Accountability to its customers. The rest of this debate is simply financial folks arguing amongst themselves.

Facebook is the greatest repository of data about people’s intentions, relationships, and utterances that ever has been created. Period. And a company that owns that much private data should be accountable to the public. The public should be able to review its practices, its financials, and question its intentions in a manner backed by our collective and legally codified will. That’s the point of a public company – accountability, transparency, and thorough reporting.

If Facebook wants to stay private and not be part of the social mores which we’ve built that govern major corporations (flawed though they may be), well I think that would be a major strategic blunder, one that would ultimately doom the company. It’s fine for all sorts of companies to stay private, for all sorts of reasons. But a company like Facebook, with its unprecedented grasp of our social data, should be accountable to the public. If it isn’t, we’ll migrate our “social graphs” to a company that is.

If Zuckerberg doesn’t want to be a public CEO and deal with the realities of that, as this Reuters piece argues, well, he should find a CEO who is willing to do the job.

(If you’re not up on the debate, here’s a primer.)