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To Be Clear: Do Not Build Your Brand House On Land You Don’t Own

By - February 28, 2014

Too07(image) I took a rigorous walk early this morning, a new habit I’m trying to adopt – today was Day Two. Long walks force a certain meditative awareness. You’re not moving so fast that you miss the world’s details passing by  – in fact, you can stop to inspect something that might catch your eye. Today I explored an abandoned log cabin set beside a lake, for example. I’ve sped by that cabin at least a thousand times on my mountain bike, but when you’re walking, discovery is far more of an affordance.

Besides the cabin, the most remarkable quality of today’s walk was the water – it’s (finally) been raining hard here in Northern California, and the hills and forests of Marin are again alive with the rush of water coursing its inevitable path toward the sea. White twisting ribbons cut through each topographic wrinkle, joining forces to form great streams at the base of any given canyon. The gathering roar of a swollen stream, rich with foam and brown earth – well, it’s certainly  good for the soul.

I can’t say the same of my daily “walks” through the Internet. Each day I spend an hour or more reading industry news. I’m pretty sure you do too – that’s probably the impetus for your visit here – chances are you clicked on a link on Facebook, LinkedIn, Twitter, Google, or in email. Someone you know said “check this out,” or – and bless you if this is the case – you actually follow my musings and visit on a regular basis.

But the truth is, we now mostly find content via aggregated streams. Streams are the new distribution. We dip in and out of streams, we curate and search our streams, we abandon barren streams and pick up new streams, hoping they might prove more nourishing. Back before streams ruled the world, of course, we had a habit of visiting actual “pools” – sites that we found worthy because they did a good job of creating content that we valued. (Before that, I think we read actual publications. But that was a long, long time ago…)

Which got me thinking. What makes a stream? In the real world, streams are made from water, terrain, and gravity. To belabor the metaphor to the media business, content is the water, publishers are the terrain, and our thirst for good content is the gravity.

As publishers – and I include all marketing brands in this category – the question then becomes: “What terrain do we claim as ours?”

Deciding where to lay down roots as a publisher is an existential choice. Continuing the physical metaphor a bit further, it’s the equivalent of deciding what land to buy (or lease). If your intention is to build something permanent and lasting on that land, it’s generally a good idea to *own* the soil beneath your feet.

This is why I wrote Put Your Taproot Into the Independent Web two years ago. If you’re going to build something, don’t build on land someone else already owns. You want your own land, your own domain, your own sovereignty.

Trouble is, so much of the choice land – the land where all the *people* are – is already owned by someone else: By Google, Facebook, Twitter, LinkedIn, Yahoo, and Apple (in apps, anyway). These platforms are where are the people are, after all. It’s where the headwaters form for most of the powerful streams on the Internet.  It’s tempting to build your brand on those lands – but my counsel is simple: Don’t. There’s plenty of land out there on the Rest of The Internet. In fact, there’s as much land as you want, and what you make of it is up to you as a publisher.

Quick: Name one successful publisher that built its brand on the back of a social platform? Can’t do it? Neither can I, unless you count sites like UpWorthy. And those flying near the social network sun risk getting seriously burned. There’s a reason publishers don’t build on top of social platforms: publishers are an independent lot, and they naturally understand the value of owning your own domain. Publishers don’t want to be beholden to the shifting sands of inscrutable platform policies. So why on earth would a brand?

Despite the fact that my once-revolutionary bromide “all brands are publishers” is now commonplace, most brands still don’t quite understand how to act like a publisher.

Which takes me to this piece, Facebook is not making friends on Madison Avenue (Digiday). Besides the quippy headline and the rather obvious storyline (a burgeoning Internet company failing to satisfy agencies? Pretty much Dog-Bites-Man), the thing that got me to perk up was this:

One point of frustration is Facebook’s ongoing squeezing of traffic to organic brand content. A digital agency exec described a recent meeting with Facebook that turned contentious. In what was meant to be a routine meeting, the exec said the Facebook rep told him the brands the agency works with would now have to pay Facebook for the same amount of reach they once enjoyed automatically. That position and Facebook’s perceived attitude have led to some disillusionment on Madison Avenue, where many bought into the dream peddled by Facebook that brands could set up shop on the platform as “publishers” and amass big audiences on their own….

…The cruel irony in all of this is that brands themselves greatly helped Facebook by giving it free advertising in their TV commercials and sites, urging their customers to “like” the brand — and paying Facebook to pile up likes. Facebook has returned the favor by choking off  brands’ access to those communities. That’s one expensive and frustrating lesson that it’s better to own than rent.

Put another way: “Wait, I did what you asked, Facebook, and set up a big content site on your platform that drew a fair number of visitors organically. Now you’ve changed the rules of the game, and you want me to pay to get their attention?!”

Yup. You leased your land, Mr. Brand Marketer, and the rent’s going up. If I were you, I’d get back to your own domain. Spend your money building something worthy, then spend to drive people there. Your agencies have entire creative and media departments that are good at just such practices. They might even spend a fair amount carefully purchasing distribution through Facebook’s streams. I’m guessing Facebook will be happy to take your money. But there’s no point in paying them twice.

 

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What Would You Ask Sundar Pichai, SVP Android & Chrome at Google?

By - February 24, 2014

sundar_pichaiA week from this coming Sunday at SXSW, I’ll be interviewing Sundar Pichai, Google’s Senior Vice President, Android, Chrome & Apps. Pichai has a huge job at Google, overseeing the company’s mobile ecosystem, from hardware (the Nexus platform) to the burgeoning Play store (oh, and that little browser/OS called Chrome, to boot). Last year, he took over Android from its founder Andy Rubin, who has moved his focus to new (and currently undisclosed) Google moonshots. Android is a huge business for Google – more than a billion devices have been activated since its inception. And that’s well before markets for autos, wearables, and enterprise heat up.

The interview is in classic SXSW keynote form – just us on stage, with a room of 1,000 or so attendees from the festival’s interactive track. On a prep call last week, Sundar mentioned he’d be up for hearing from readers here and on various social networks, so I’m issuing a call: What questions do you have for the man in charge of Google’s mobile future? A few that come to mind:

– What is Android’s role beyond phones & tablets? Pichai has said Android is moving into areas such as the enterprise, wearables, and automobiles. How might that play out? Will Nest become an Android device? Will you have to join Google+ to manage your thermostat?!

– I’ve called Google Now “The tip of a very long spear.” Is that a fair characterization?

– Much has been written about fragmentation in the Android ecosystem-is this a problem? Is Android truly “open”?

– The relationship between Google and Samsung seems strained – how is it going?

– What is the future of the Nexus effort – is Google committed to being a hardware player, or is the Nexus line mainly a way to show off how best to create devices? Related – what happened with Motorola? Was that a mistake, or part of a master plan?

– How do Chromebooks and the Chrome OS fit into Google’s future? How do we think about Chrome as separate from Android?

–  Chromecast, Google Fiber, Play, YouTube: All seem positioned to combat the Comcasts of the world. What’s Google’s POV on cord cutting and the cablecos?
Might Google up and buy sports rights?

What questions do you have for Pichai? Leave a comment here, or tweet them to me @johnbattelle. Hope to see you at SXSW!

Buh-Bye, CableCo

By - February 13, 2014

chromecastWhen it comes to television business models and the endless debate about “cutting the cord,” I consider myself in the “fast follower” camp – I’m not willing to endure the headaches and technical backflips required to get rid of cable entirely, but I sure am open to alternatives should they present themselves. I’m eager for Aereo to get to San Francisco, but until it does, I’ve stuck with my way-too-expensive cable subscription.

My rants on cable’s products (here’s my favorite – still true after 8 years!) and services (please don’t get me started) are well known by friends and family, but because I have had no simple alternative, I pay more than $200 a month to Comcast, who announced plans today to consolidate its market by purchasing one its largest peers, Time Warner.

But in the past few months, a clever, $35 device from Google has started to chip away at Comcast’s grip on my family television viewership. You’ve probably heard about it – it’s called Chromecast. It’s a neat little hack – it looks like a USB storage dongle, but you plug it into any HDMI port on a standard flatscreen. It uses wifi to sync with your mobile phone or tablet, and within minutes you are watching Netflix, YouTube, or your browser on your television. It’s kind of magic, and it’s changed how we watch TV completely.

The reason my Comcast bill is so high boils down to a luxury tax: I get charged something like ten bucks a month for “extra” cable boxes. I don’t *need* these boxes, but if I *want* a TV screen in secondary places (my music room, office, etc.) I have to pay for the privilege. Turns out, I really only use those screens for watching movies and shows on demand. Comcast’s on demand service is so lame, I can’t really describe it here, so I prefer to use NetFlix or Hulu – both of which work with Chromecast. Goodbye, cable boxes!

It’ll be interesting to watch services slowly but – to my mind – inevitably bail on the cablecos. First to go will have to be sports networks – I’d far rather subscribe to the MLB channel than overpay Comcast to see my beloved Giants. I imagine local news will be next – since they are often already available via the web (which you can stream via a Chrome browser).

In fact, there’s a ton of video on the web – much of it very high quality, but there’s really not been much *programming* of that video for audiences who live in a post-cable world. Well, I’ve joined that world, happily, and I hope the programming will soon catch up with the distribution. Chromecast just opened up its platform for third party applications – a big move that could bring a lot of innovation to “television” – something it desperately needs, given it’s been in the grips of monopoly for decades. Buh-bye, Cableco!

 

We Are Not Google, Therefore, We Are

By - February 06, 2014

RubiconS1If you read me regularly, you know I am a fan of programmatic adtech. In fact, I think it’s one of the most important developments of the 21st century. And over the past few quarters, adtech has gotten quite hot, thanks to the recent successes of Rocket Fuel (up to 50 and holding from its open at 29), Criteo (trading above its already inflated opening price of 31), and, by extension, Facebook and Twitter (don’t get me started, but both these companies should be understood as programmatic plays, in my opinion).

But while I like all those companies, I find Rubicon’s recent filing far more interesting. Why? Well, here’s the money shot of the S-1:

Independence. We believe our independent market position enables us to better serve buyers and sellers because we are not burdened with any structural conflicts arising from owning and operating digital media properties while offering advertising purchasing solutions to buyers.

Ah, there it is, in a nutshell: “We are not Google, therefore, we are.” Rubicon uses the words “independent” or “independence” more than a half a dozen times in its S1, about the same number of times the word “Google” is invoked.

I am in full support of an independent adtech ecosystem. It’s vitally important that the world have options when it comes to what flavor of programmatic infrastructure it uses to transact – and when I say the “world” I mean everybody, from publishers to advertisers, consumers to service providers. Criteo and Rocket Fuel are important companies, but they don’t directly compete with Google – their business leverages buying strategies to maximize profits. Rubicon, on the other hand, has a full adtech stack and is focused on publishers (and yes, that’s what sovrn is as well).

Over time, we won’t be talking about “publishers” and “advertisers,” we’ll be talking about “consumers” and “services.” And the infrastructure that connects those two parties should not be a default – it should be driven by competition between independent players.

So bravo, Rubicon, for making that statement so clearly in your S-1. I wish you luck.

A Big Day For Federated, and the Birth of Sovrn Holdings

By - January 28, 2014

LINFMSOVRNToday marks a big milestone for Federated Media, the company we launched way back in 2005. As you can read here, LIN Media is acquiring Federated Media’s brand and content marketing business, and a new company, sovrn Holdings, Inc. (“sovrn”), has been born. Sovrn will continue to build on what was FM’s programmatic publisher platform, a business based on our acquisition of Lijit Networks back in 2011.

When I returned as FM’s CEO in early 2013 after a two-year absence, it was my job to assess where we stood, and how we could most successfully invest our resources. At the time, FM had two distinct business lines: Its pioneering content marketing practice, and its burgeoning programmatic exchange. As readers of this site know well, I’m bullish on both.  I love our legacy as one of the creators of modern content marketing and defender of premium independent publishing, and I’m extremely proud of our massive exchange, which is growing like crazy (more than 90% topline growth y/y, and profitable). Both businesses have strong partners, strong people, and great futures.

So why split them up? Well, the truth is LIN Media offered us a deal that just made sense. LIN, a public company, is focused on building a world-class digital media offering, and has the resources and people that can take Federated’s business to the next level. It’s incredibly important to me personally that something I was instrumental in building finds a home that respects and appreciates its history, while at the same time desiring to invest in its future. That’s exactly what LIN is committed to doing. Now that it is part of LIN, the Federated Media brand can grow faster – and that means more revenue and opportunities for the partners who have made FM what it is.

Meanwhile, our programmatic business has been growing so fast that it demands the focused attention of its executives, as well as more investment – the opportunity is tremendous. This transaction with LIN will allow the new company – sovrn – to pursue its dream of building a next-generation publisher-facing programmatic platform leveraging all the data and insights we’ve gained over the past few years.

Personally, this deal means I will be stepping back into the role I had in 2011 and 2012, but now as Executive Chair of sovrn. (Yes, that means I can once again focus on writing, among other things!) Walter Knapp, my COO and the leader of our programmatic business, is stepping into the role of CEO of sovrn. It’s been an honor to work side by side with Walter over the past year, he’s incredibly talented and deeply passionate. I know with him at the helm, sovrn is going to do extraordinary things.

And for Federated Media, the same team – all of them – who have been running our award-winning content marketing business will remain with Federated, and continue to work with our great publishing and marketing partners to power the best of the independent web. Chris Eberle, a wonderful and talented exec who I put in charge of the content marketing business last year, continues as Federated’s GM. And I’ll be working with LIN and Federated in various ways during the transition as well.

I’ve seen a lot of ups and downs in my nearly 30 years working in this business, but I can honestly say that this deal feels special. I left Wired before it was sold to Conde Nast and Lycos, so I didn’t experience that transition. At the Industry Standard, well, I stayed till the bitter end, but the company didn’t make it – that story’s best told over a whisky. With the Web 2 conferences, I made the choice to stop even though the business was doing fine – a personal decision that allowed me to focus on FM and writing. But with FM, the circle has been completed – FM is moving on to a new chapter, with new leaders and owners, nearly nine years after its first steps.

A couple of months ago my first child was admitted into the college of his choice, and in June we’ll be watching him leave the nest and explore new worlds. It’s bittersweet and emotional. I feel similarly about Federated – it’s time to help something I started head out into the world and into its next home. I’m thrilled that that home is LIN, a company whose people I’ve come to know and deeply respect. And I want everyone involved with FM to know I’ll always be there if they need advice and support.

So, onwards! Here’s to a remarkable nine years with Federated, and here’s to the future of both Federated Media and sovrn, the company it helped to create.

Note to Interwebs: Pinterest Can’t Be, And Won’t Be, Only About Images.

By - January 21, 2014

pinterstPinterest is an interesting service – built entirely on the curation and sharing of images, and valued at billions of dollars. But when it comes time to lean into a business model, every service has to find and leverage its core DNA – and for Pinterest, it’s clear it can’t be images. That bus left a while ago (and Facebook was driving it, with Instagram riding shotgun and Snapchat….oh, never mind).

Anyway, two bits of news today that I think help us understand where Pinterest is going. First, Pinterest’s announcement that it’s getting into recipe search. And second, news that Pinterest is experimenting with GIFs.

To me, the conclusion is this: Pinterest is about collecting, curating, and sharing media objects, regardless of what they are. They can be images, which is how Pinterest got to its first jaw-dropping valuation. Or they can be….anything. Recipes? Sure. GIFs? Uh-huh. Web pages? Why not? Videos? Sure! Ummmm…files? Well, yeah, of course.

It seems everyone is converging on a simple set of facts: Our lives are digital, and we wish to share our lives. Pinterest came at it through images, artfully curated. Facebook came at it through friends, cunningly organized. Dropbox came to it via files, cleverly clouded. Countless others will come at the same opportunity through countless other ways. And countless others – Flickr, delicio.us, Friendster, Myspace – have already tried.

It’s getting a bit crowded, don’t you think?

Google Buys Nest

By - January 13, 2014

nestToday comes the news that Google is buying Nest, a move that, upon reflection, should have been obvious (the price tag of more than $3 billion, not so obvious!). If the company is truly executing its mission of helping us organize the world’s information and make it available, it makes sense to have a major play in the Internet of Things, in particular, those things that consumers view as extremely valuable. Nest, a company that has rethought the previously unsexy world of home control devices, is a perfect platform for launching computing devices that feed on valuable data, and tie seamlessly to Google’s other platforms, like Android, Nexus, Search/Knowledge, and more.

My first thought upon hearing this news was of Apple – if ever there was an Apple-like company, it’s Nest. Founded by an ex-Apple employee, Nest devices do for thermostats and smoke alarms what the Mac did for PCs – made them relevant and far more valuable. And Nest was in essence a design driven company – just like Apple. But it’s a sign of how sprawling Google’s ambitions are when compared to Apple, which I can’t imagine ever getting into home control systems, much less autonomous cars or robotics.

Google is proving itself willing to make huge bets in markets it believes will become drivers of tomorrow’s data ecosystem. Draped in that light, Nest seems an inevitable move. So what might be next? To answer that question, start with those things we view as super-valuable, but are not yet widely lit with computable information. Clothing? Cars? Healthcare? Food?! Well…why not?

The Four Phases of CES: I, Consumer, Am Electronic

By - January 08, 2014

CESCES is a huge event, one that almost everybody in our industry has been to at least once, if not multiple times. I’ve been going for the better part of 25 years, so I’ve seen a lot of change. And after my first day here, the biggest takeaway I’m getting is a sense of deja vu.

Back in the early days, CES was mostly about exciting new televisions, clock radios, and stereo components. Call that the first incarnation of CES – literally, electronics for consumers. Stuff you plugged in, stuff that “electrified” your life with sound and video.

But starting in the mid to late 1908s, a brash new industry was starting to take over the “buzz” on the show floor – personal computers. PCs were becoming a “consumer electronic” and for the next decade or so, PCs were the “it” industry at CES. The PC era of CES was its second incarnation, and it brought our industry onto the show floor in a big way.

By 2000, CES morphed yet again, and the brash new industry at the center of buzz was the consumer Internet. Yahoo, AOL, and myriad now-dead startups competed for headlines and hot-party tickets. The Consumer Internet marked CES’s third phase change.

A fourth phase came in the last five to ten years – the mobile wave. Nokia and Blackberry, then Samsung, Apple, and Google became major players at the event.

The funny thing is, as each of these waves have hit CES, none of them have eliminated the wave before. CES was always a crazy quilt where you’d find cheesy aftermarket car stereo folks right next to the slickest new laptop, or the latest robotic toy for your kid.

But this year, I think the biggest trend is how these once-separate parts of CES are getting mashed together. In a way, CES is once again all about consumer electronics, but they are all computers now, they are all connected through the Internet, and they are mobile and location aware.

The two biggest stories here are the rise of the connected car, on the one hand, and the Internet of Things, on the other. The auto industry has always been here, but mostly represented by after-market players who did massive car stereo installations. Now every major auto maker is here in force, touting their cars as mobile, Internet-connected experience machines with app stores and serious computing power. Auto makers know their future lies in the marriage of their “platform” – the car itself – with the digital fabric of our lives.

Meanwhile, the other big story is how everything – from babies clothes to the machines that wash them – has become a “consumer electronic” – thanks to the Internet of Things. (Stephen Wolfram has even announced a computable database of “connected devices.”) Autos are simply one more connected device – albeit one of our most prized and expensive ones.

I’m left, after one day of meetings and chance encounters, with the sense that four massive tectonic plates – consumer devices, PCs, mobile platforms, and the Internet – are crashing up against one another, causing chaos, opportunity, and more change than we’ve seen in any previous era. There are few standards or touchstones for how this will all work out, but one thing is clear – at the center of this stands the individual – the “Consumer.” And the essence of who that person is is described by data – data that is computed through devices, platforms, and Internet services. We have a long, long way to go before our industry creates a seamless experience across all consumer electronics, based on that data. But to me, that’s probably the biggest opportunity there is. I’ll unpack this idea in a later post, but for now, it’s off to more CES madness.

 

Predictions 2014: A Difficult Year To See

By - January 03, 2014

1-nostradamusThis post marks the 10th edition of my annual predictions – it’s quite possibly the only thing I’ve consistently done for a decade in my life (besides this site, of course, which is going into its 12th year).

But gazing into 2014 has been the hardest of the bunch – and not because the industry is getting so complicated. I’ve been mulling these predictions for months, yet one overwhelming storm cloud has been obscuring my otherwise consistent forecasting abilities. The subject of this cloud has nothing – directly – to do with digital media, marketing, technology or platform ecosystems – the places where I focus much of my writing. But while the topic is orthogonal at best, it’s weighing heavily on me.

So what’s making it harder than usual to predict what might happen over the coming year? In a phrase, it’s global warming. I know, that’s not remotely the topic of this site, nor is it in any way a subject I can claim even a modicum of expertise. But as I bend to the work of a new year in our industry, I can’t help but wonder if our efforts to create a better world through technology are made rather small when compared to the environmental alarm bells going off around the globe.

I’ve been worried about the effects of our increasingly technologized culture on the earth’s carefully balanced ecosystem for some time now. But, perhaps like you, I’ve kept it to myself, and assuaged my concerns with a vague sense that we’ll figure it out through a combination of policy, individual and social action, and technological solutions. Up until recently, I felt we had enough time to reverse the impact we’ve inflicted on our environment. It seemed we were figuring it out, slowly but surely. The world was waking up to the problem, new policies were coming online (new mileage requirements, the phase out of the incandescent bulb, etc). And I took my own incremental steps – installing a solar system that provides nearly 90% of our home’s energy, converting my heating to solar/electrical, buying a Prius for my kids.

But I’m not so sure this mix of individual action and policy is enough – and with every passing day, we seem to be heading toward a tipping point, one that no magic technological solution can undo.

If you’re wondering what’s made me feel this way, a couple of choice articles from 2013 (and there were too many to count) should do the trick. One “holy shit” moment for me was a piece on ocean acidification, relating scientific discoveries that the oceans are turning acidic at a pace faster than any time since a mass extinction event 300 million years ago. But that article is a puff piece compared to this downer, courtesy The Nation: The Coming Instant Planetary Emergency. I know – the article is published in a liberal publication, so pile on, climate deniers… Regardless, I suggest you read it. Or, if you prefer whistling past our collective graveyard, which feels like a reasonable alternative, spare yourself the pain. I can summarize it for you: Nearly every scientist paying attention has concluded global warming is happening far faster, and with far more devastating impact, than previously thought, and we’re very close to the point where events will create a domino effect – receding Arctic ice allowing for huge releases of super-greenhouse methane gases, for instance. In fact, we may well be past the point of “fixing” it, if we ever could.

And who wants to spend all day worrying about futures we can’t fix? That’s no fun, and it’s the opposite of why I got into this industry nearly 30 years ago. As Ben Horowitz pointed out recently, one key meaning of technology is  “a better way of doing things.” So if we believe that, shouldn’t we bend our technologic infrastructure to the world’s greatest problem? If not – why not? Are the climate deniers right? I for one don’t believe they are. But I can’t prove they aren’t. So this constant existential anxiety grows within me – and if conversations with many others in our industry is any indication, I’m not alone.

In a way, the climate change issue reminds me of the biggest story inside our industry last year: Snowden’s NSA revelations. Both are so big, and so hard to imagine how an individual might truly effect change, that we collectively resort to gallows humor, and shuffle onwards, hoping things will work out for the best.

And yet somehow, this all leads me to my 2014 predictions. The past nine prediction posts have been, at their core, my own gut speaking (a full list is at the bottom of this post). I don’t do a ton of research before I sit down to write, it’s more of a zeitgeistian exposition. It includes my hopes and fears for our industry, an industry I believe to be among the most important forces on our planet. Last year, for example, I wrote my predictions based mainly on what I wished would happen, not what I thought realistically would.

For this year’s 2014 predictions, then, I’m going to once again predict what I hope will happen. You’ll see from the first one that I believe our industry, collectively, can and must take a lead role in addressing our “planetary emergency.” At least, I sure hope we will. For if not us…

1. 2014 is the year climate change goes from a political debate to a global force for unification and immediate action. It will be seen as the year the Internet adopted the planet as its cause.

Because the industry represents the new guard of power in our society,  Internet, technology, and media leaders will take strong positions in the climate change debate, calling for dramatic and immediate action, including forming the equivalent of a “Manhattan Project” for technological solutions to all manner of related issues – transportation, energy, carbon sequestration, geoengineering, healthcare, economics, agriculture.

While I am skeptical of a technological “silver bullet” approach to solving our self-created problems, I also believe in the concept of “hybrid vigor” – of connecting super smart people across multiple disciplines to rapidly prototype new approaches to otherwise intractable problems. And I cannot imagine one company or government will solve the issue of climate change (no matter how many wind farms or autonomous cars Google might create), nor will thousands of well meaning but loosely connected organizations (or the UN, for that matter).

I can imagine that the processes, culture, and approaches to problem solving enabled by the Internet can be applied to the issue of climate change. The lessons of disruptors like Google, Twitter, and Amazon, as well as newer entrants like airbnb, Uber, and Dropbox, can be applied to solving larger problems than where to sleep, how to get a cab, or where and how our data are accessed. We need the best minds of our society focused on larger problems – but first, we need to collectively believe that problem is as large as it most likely is.

2014, I hope, is the year the problem births a real movement – a platform, if you will, larger than any one organization, one industry, or one political point of view. The only time we’ve seen a platform like that emerge is the Internet itself. So there’s a certain symmetry to the hypothesis – if we are to solve humankind’s most difficult problem, we’ll have to adopt the core principles and lessons of our most elegant and important creation: the Internet. The solution, if it is to come from us, will be native to the Internet. I can’t really say how, but I do know one thing: I want to be part of it, just like I wanted to be part of the Internet back in 1987.

I’ll admit, it’s kind of hard to write anything more after that. I mean, who cares if Facebook has a good or bad year if the apocalypse is looming? Well, it’s entirely possible that my #1 prediction doesn’t happen, and then how would that look, batting .000 for the year (I’ve been batting better than .500 over the past decade, after all)? To salvage some part of my dignity, I’m going to go ahead and try to prognosticate a bit closer to home for the next few items.

2. Automakers adopt a “bring your own” approach to mobile integration. The world of the automobile moves slowly. It can take years for a new model to move from design to prototype to commercially available model. Last year I asked a senior executive at a major auto manufacturer the age old question: “What business are you in?” His reply, after careful consideration, was this: “We are in the mobile experience business.” I somewhat expected that reply, so I followed up with another question: “How on earth will you compete with Apple and Google?” Somewhat exasperated, he said this was the  existential question his company had to face.

2014 will be the year auto companies come to terms with this question. It won’t happen all at once, because nothing moves that fast in the auto industry. While most car companies have some kind of connectivity with smart phone platforms, for the most part they are pretty limited. Automakers find themselves in the same positions as carriers (an apt term, when you think about it) back at the dawn of the smart phone era – will they attempt to create their own interfaces for the phones they market, or will they allow third parties to own the endpoint relationship to consumers? It’s tempting for auto makers to think they can jump into the mobile user interface business, but I think they’re smart enough to know they can’t win there. Our mobile lives require an interface that understands us across myriad devices –  the automobile is just one of those devices. The smartest car makers will realize this first, and redesign their “device platforms” to work seamlessly with whatever primary mobile UI a consumer picks. That means building a car UI not as an end into itself, but as a platform for others to build upon.

Remember, these are predictions I *hope* will happen. It’s entirely possible that automakers will continue the haphazard and siloed approach they’re currently taking with regard to mobile integration, simply because they lack conviction on whether or not they want to directly compete with Google and Apple for the consumer’s attention inside the car. Instead, they should focus on creating the best service possible that integrates and extends those already dominant platforms.

3. By year’s end, Twitter will be roundly criticized for doing basically what it did at the beginning of the year. The world loves a second act, and will demand one of Twitter now that the company is public. The company may make a spectacular acquisition or two (see below), but in the main, its moves in 2014 will likely be incremental. This is because the company has plenty of dry powder in the products and services it already has in its arsenal – it’ll roll out a full fledged exchange, a la FBX, it’ll roll out new versions of its core ad products (with a particular emphasis on video), it’ll create more media-like “events” across the service, it’ll continue its embrace of television and popular culture…in other words, it will consolidate the strengths it already has. And 12 months from now, everyone will be tweeting about how Twitter has run out of ideas. Sound familiar, Facebook?

Now this isn’t what I hope for the company to do, but I already wrote up my great desire for Twitter last year. Still waiting on that one (and I’m not sure it’s realistic).

4. Twitter and Apple will have their first big fight, most likely over an acquisition. Up till now, Twitter and Apple have been best of corporate friends. But in 2014, the relationship will fray, quite possibly because Apple comes to the realization it has to play in the consumer software and services world more than it has in the past.  At the same time, there will be a few juicy M&A targets that Twitter has its eye on, targets that most likely are exactly what Apple covets as well. I’ll spare you the list of possible candidates, as most likely I’d miss the mark. But I’d expect entertainment to be the most hotly contested space.

5. Google will see its search related revenues slow, but will start to extract more revenues from its Android base. Search as we know it is moving to another realm (for more, see my post on Google Now). Desktop search revenues, long the cash cow of Google, will slow in 2014, and the company will be looking to replace them with revenues culled from its overall dominance in mobile OS distribution. I’m not certain how Google will do this – perhaps it will buy Microsoft’s revenue generating patents, or maybe it’ll integrate commerce into Google Now – but clearly Google needs another leg to its revenue stool. 2014 will be the year it builds one.

6. Google Glass will win – but only because Google licenses the tech, and a third party will end up making the version everyone wants. Google Glass has been lambasted as “Segway for your face” – and certainly the device is not yet a consumer hit. But a year from now, the $1500 price tag will come down by half or more, and Google will realize that the point isn’t to be in the hardware business, it’s to get Google Now to as many people as possible. So Google will license Glass sometime next year, and the real consumer accessory pros (Oakley? GoPro? Nike? Nest?!) will create a Glass everyone wants.   

7. Facebook will buy something really big. My best guess? Dropbox. Facebook knows it’s become a service folks use, but don’t live on anymore. And it will be looking for ways to become more than just a place to organize a high school reunion or stay in touch with people you’d rather not talk to FTF. It wants and needs to be what its mission says it is: “to give people the power to share and make the world more open and connected.” The social graph is just part of that mission – Facebook needs a strong cloud service if it wants a shot at being a more important player in our lives. Something like Dropbox (or Box) is just the ticket. But to satisfy the egos and pocketbooks of those two players, Facebook will have to pay up big time. It may not be able to, or it may decide to look at Evernote instead. I certainly hope the company avoids the obvious but less-substantive play of Pinterest. I like Pinterest, but that’s not what Facebook needs right now.

As with Twitter, this prediction does not reflect my greatest hope for Facebook, but again, I wrote that last year, and again…oh never mind.

8. Overall, 2014 will be a great year for the technology and Internet industries, again, as measured in financial terms. There are dozens of good companies lined up for IPOs, a healthy appetite for tech plays in the markets, a strong secular trend in adtech in particular, and any number of “point to” successes from 2013. That strikes me as a recipe for a strong 2014. However, if I were predicting two years out, I’d leave you with this warning: Squirrel your nuts away in 2014. This won’t last forever.

Related:

Predictions 2013

2013: How I Did

Predictions 2012

2012: How I Did

Looking Back: How Did My 2013 Predictions Fare?

By - December 30, 2013

1-nostradamus

It’s that time of year: The annual ritual of looking back and looking forward is in full voice. Long time readers know I always make predictions around the turn of the year, and I expect my 2014 prognostications will come sometime this weekend. Meanwhile, it’s time to take a look at what I wrote a year ago, and judge how well I did.

You may recall I took a different approach in 2013, and wrote predictions mainly for things I *hoped* would come true, rather than things I expected would. I’ve been doing these predictions for nine years now, and I guess I was looking for a fresh angle. All in all, things came out OK, but you be the judge. Here are my predictions, and my short summary on how they fared.

1. We figure out what the hell “Big Data” really is, and realize it’s bigger than we thought (despite its poor name).

One can argue whether “we” figured out what Big Data is, but we sure realized it’s bigger than we thought. The Rocket Fuel IPO is one clear measure of that, the Snowden/NSA revelations are yet another. And “Big Data is going to be big” is an echoing theme once again for 2014, from the various predictions posts I’ve seen over the past few weeks. Whether or not society has a clear grip on the definition of “Big Data,” I’d argue every thinking person in our world understands it’s a concept that has significant bearing on our collective and individual future. With that in mind, I’ll declare this prediction box checked.

2. Adtech does not capitulate, in fact, it has its best year ever, thanks to … data. 

At the beginning of the year, many were predicting that ad tech was going to have a year of capitulation – but the opposite has in fact occurred. Terry Kawaja revised his charts to show a more than doubling of the companies in the space this past year, and while some might argue that a few ad tech IPOs were not high flyers- Tremor and Yume take the lead here – the fact is, they got out and are now stabilizing. Meanwhile, Rocket Fuel is a massive win, so is Criteo, and so is Twitter – which is as much an ad tech business as it is a social networking or platform company. My own experience in the space – FM’s ad tech business – only corroborates my prediction – our business had an extraordinary 2013, beating all our forecasts handily and growing at near triple digit rates on a large base from 2013.

The basis for all this growth? Data, of course, but more importantly, a more sophisticated approach to data. Criteo and Rocket Fuel were rewarded for this sophistication, and understanding how to manage this new currency of data will be at the center of value creation for 2014.

I think this prediction has also proven accurate. So far, 2 for 2.

3. Google trumps Apple in mobile 

In this prediction, I laid out that I hoped Google would steal Apple’s crown as the leader in mobile. Judging this one is going to prove tricky – Google has clearly outstripped Apple in sales and buzz, Apple still won on profit and driving high end behaviors like e-commerce. I’d argue that sales matter more in the long term, and this prediction has occurred.   However, in my 2013 post I suggested that Google would win by coming up with The Next Big Thing, like the Razr or the iPhone, and while the Nexus 5 and the Moto X are well-received devices (I have the Nexus 5, and I believe it’s far better than any iPhone out there), it’d be difficult to argue they are The Next Big Thing. And Glass – well, not yet, anyway.

I also wrote this: “Google needs to actively promote a vision that is 180 degrees from that of Apple: Open, interoperable, accessible, ungated. This allows for real innovation in UI, services, and apps. Google will win by highlighting things that only Android-based devices running Jellybean or later can do: you (consumers and developers) can interact with digital services and content in a web-like fashion.”

So far, this has not occurred – at least in the marketplace. Google did take a big step forward with Android app linking, but it’s not clear this feature is going to take off, or be implemented in a way that creates the ecosystem I was pining for in my original post.

I’d give myself a half check on this one. So far, 2.5 of 3.

4. The Internet enables frictionless (but accountable) payments, enabling all manner of business models that previously have been unnaturally retarded.

Well…sort of. Bitcoin woke us all up to a new way to pay, and culturally I think a much larger percentage of us have become accustomed to the idea that money no longer comes with the friction it once had. Credit Uber for that – but Uber is not exactly used by the masses. And Square had, by all accounts, a massive year. Still and all, the ecosystem breakthrough I was hoping for has not happened. I also predicted that major consumer-facing online platforms based on “free” – Google and Facebook chief among them, though Twitter is a potential player here as well – will begin to press their customers for real dollars in exchange for premium services. This is undeniably true. Facebook and Twitter ask us for money to promote my posts, LinkedIn keeps trying to upsell us to Premium, Google wants to sell us a better Play experience, Hulu,

Spotify, you name it, they want our money.

I got this one mostly right, I’d say – perhaps 75% right. 3.25 of 4 so far.

5.  Twitter comes of age and recommits itself as an open platform. 

I think I missed at least half of this one, but it’s worth talking about why. First, sure, if having a killer IPO is coming of age, then Twitter came of age. But the real point I was making is the one about committing to being an open platform. I predicted (again, remember these are my hopes) that the company would clarify its sometimes confusing rules of the road, resulting in some breakout new services from third parties. I also predicted Twitter would get itself into some good old fashioned tempests with Big Overbearing Governments and Corporations, much to the delight of folks who used to cheer Google for doing similar things in the past. Lastly, I predicted Twitter would roll out paid services.

So, how did I fare? It’s hard to say, definitively. I don’t feel like I have a clear sense of how important Twitter’s role is in the Open Source world, but it’s clearly committed to being an active player. As for clarifying its approach to developers and opening up an ecosystem for third parties, unless I’m missing something, I don’t think that really happened. Topsy, which is one of the most important Twitter developers, was bought by Apple, but as I posted earlier, I don’t think that was because of Twitter per se. And where are all the cool new third party apps built on top of the Twitter platform? Honestly, I don’t see them. The Twitter platform is best when used as an identity layer, so far. Nothing new there. And no breakout new apps, at least, not from third parties.

Now, on the issue of “tempests with Governments,” Twitter most certainly checked the box. While incidents in the UK, France, and other countries kept execs busy, what was most interesting is how Twitter was *not* implicated, at least directly, in the NSA fracas this year. The company also joined its peers in expressing dismay, and recently implemented tougher anti-snooping security, going beyond the HTTPS that Google, Yahoo and others have installed.

All in all, what I was going for in this prediction was the emergence of an open, robust third-party platform from Twitter, and while I can’t say it’s gotten worse, I also can’t say much happened to push it forward. So I’d say this one was mostly a miss, overall – though I’d give myself .25 for “coming of age” and committing to stand against Big Bad Government. I stand at 3.5 of 5 now. 

6. Facebook embraces the “rest of the web.”

Well, this was probably my biggest “hope” of all the predictions I made. I wrote: “I believe 2013 will be the year it realizes it’s OK to share – bilaterally – with The World That Isn’t Facebook. That means making it really easy to export your identity and data, for example – competing on service, not lock in. And creating a kickass web-based advertising network/exchange. And  learning how to play nice with the hundreds of thousands of publishers out there, pro, semi pro and amateur, who create the value that drives so much engagement on its core platform.”

Umm…not so much. I still think this strategy is crucial to Facebook’s long term value. But it didn’t happen this past year. Big miss. I’m now 3.5 of 6.

7.  By the end of the year, Amazon will have an advertising business on a run rate comparable to Microsoft.

Well, this one is refreshingly specific, isn’t it!? I should easily be able to show if I was right, one way or the other. Well, not so fast. Both companies bury their advertising revenue inside other categories, which make it nearly impossible to understand and compare the media components. By all accounts in the press and from what I’ve heard from industry folk, Amazon’s advertising business is growing very quickly. I made this prediction to highlight that, by year’s end, Amazon would be a force to be reckoned with in advertising. I think anyone paying attention to programmatic advertising would agree this is true. I just can’t prove it yet. So…give me half a check.

4 of 7 so far.

8. The world will learn what “synthetic biology” is, because of a major breakthrough in the field.

Well, it didn’t happen, at least, not in a massive way. No major breakthrough that hit a 24 hour news cycle, just a constant, steady drip of small but important steps all year long. Sigh, I missed this one completely, since I predicted “the world will learn” and unless you were really paying attention, you’d have missed that 2013 was a big year in synthetic biology. No points for me here.

So, that’s 4 of 8, or batting .500. Not an awesome year, but not bad either. The predictions where I whiffed – Facebook, synthetic biology, Twitter’s open platform – I whiffed because I badly wanted them to come true, but the facts are in the way. Lesson learned….my next post will be my 2014 predictions. We’ll see if I take those lessons to heart.