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Predictions 2010: How Did I Do?

By - December 27, 2010

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Predictions 2010

2009 Predictions

2009 How I Did

2008 Predictions

2008 How I Did

2007 Predictions

2007 How I Did
2006 Predictions
2006 How I Did
2005 Predictions
2005 How I Did
2004 Predictions

2004 How I Did

Well, it’s that time of year again, time to see how well, or poorly, I did predicting events in the past year. This is my “keep myself honest” post, next week, I hope, I’ll post my predictions for 2011.

So how did I do for 2010? Overall, I’d say it was a mixed year, but by my score, I hit 7 of 12, with 3 pushes and two outright fails. A fair amount is open to interpretation, as we will see. To the results:

Prediction #1: 2010 will mark the beginning of the end of US dominance of the web. This is a pretty soft one to prove, but I think it’s certainly defensible. First of all, the “rest of the world” is growing far more quickly than the US in terms of Internet use, growth, and related development. In the broader economy, China looms large, and is already far larger than the US in Internet population. In terms of startups, I’d have to say we’re not there yet – the US is still the center of innovation, at least for scaled platforms like Twitter, Tumblr, Facebook, Groupon. But I only predicted that this would be the *start* of this shift, so I’d say the jury is out on whether I was right. But hey, Fred agrees with me…Score: Push.

Prediction #2: Google will make a corporate decision to become seen as a software brand rather than as “just a search engine.” I think this clearly happened in 2010. With both Android and Google Apps in the center of its strategy, Google and its partners poured hundreds of millions of dollars into building the Google brand to mean “an excellent software platform” and next to nothing (OK, one Superbowl ad) into the brand meaning “Search.” Score: +1.

Prediction #3: 2010 will see a major privacy brouhaha, not unlike the AOL search debacle but around social and/or advertising related data. OK, maybe this was a layup, but wow, did this come true, in spades. Take your pick, was it Google’s Street View data collection? Or maybe Facebook’s half-year long meltdown, beginning with sharing all data with search, and ending with the Open Graph? (Not to mention Google Buzz!) In any case, privacy has become the center of attention in Washington, with multiple investigations and pending legislation all brewing, in particular around social and advertising data. 2010 will be remembered as the year privacy took center stage. Score: +1.

Prediction #4: By year’s end the web will have seen a significant new development in user interface design. Well, again, I think this one happened. Not only did Gawker “redefine” what a blog is, the rise of the tablet and touch interfaces, as well as shifts to gestural in gaming (Kinect) have shifted how the web is consumed and produced. 2010 was most certainly the year the web pivoted from boring old HTML to a new approach to user interface based on touch and gesture, not to mention voice (which is coming hard on touch’s heels). Score: +1.

Prediction #5: Apple’s “iTablet” will disappoint. I know, I know, it sure seems like I blew this one. But remember folks, the iPad did in fact disappoint, nearly everyone, when it was announced. It was pretty much universally panned for not having a camera, being the wrong size, being a self-contained universe that shunned the open web, Flash, etc. So in a way, I was right. Then again, the thing went on to be the biggest hit since the iPod, so I was wrong too. I’d score this a push.

Prediction #6: 2010 will see the rise of an open gaming platform. Alas, this did not happen. I thought Microsoft would open up Kinect, as the technology has massive potential. So far, it has not, and no one else has done anything either. Score: -1.

Prediction #7: Traditional search results will deteriorate to the point that folks begin to question search’s validity as a service. I think it’s hard to argue with the overall decline in search results as a core driver of web navigation. Social is clearly on the upswing, and in general, the rise of content farms and the stirrings of data wars between Google and Facebook have meant that search is no longer the presumed king of the web. However, I don’t think it got as bad as I predicted it would, so I give myself a fail on this one, but I predict I’m right here in the long run. Here’s more on why. Score: -1.

Prediction #8: Bing will move to a strong but distant second in search, eclipsing Yahoo in share. This happened, depending on who’s counting, and if you take the Yahoo/Microsoft search deal into account, it clearly happened. Score: +1.

Prediction #9: Internet advertising will see a sharp increase…and most predictive models are not accounting for this rise. I was right on this one as well. Not only did online spend eclipse newspaper spend, but online suprised most forecasters with significant double digit (14% at least) Y/Y growth. By comparison, overall ad spending grew just 3% in the US. That’s sharp by my book. Score: +1.

Prediction #10: The tech/Internet industry will see a surge in quality IPOs. Well, I thought this one would be a layup, and instead, it’s at the very least a push. We did have a surge in filings, but we did not see a ton of companies go public, though compared to 2009, one could easily call this year’s lineup a relative surge. It was the busiest IPO year (overall) since 2007, but we did not see action where we might have expected – from Facebook, LinkedIn, Zynga, or even companies like MediaBank. We did see important filings from Hulu, Betfair, Demand and Skype, but neither have made it out so far. In fact, I did make another related prediction: one, if not more will be withdrawn. That happened, just this month, with Hulu. I’d score this one a push.

Prediction #11: We’ll see a major step forward in breaking the man/machine barrier. I honestly don’t know if this came true. I do know that when machines can translate poetry, and the creation of synthetic life, the strong advances in gene sequencing, and the reprogramming of cells, we’re certainly making progress. I’m out of my depth here, so readers, did this prediction come true or not?! For now, I’ll punt and call it a push.

Prediction #12: I’ll figure out what I want to do with my book. Yep, I’ve figured it out. More on that early next year. Score: +1.

So, overall, 3 pushes, 2 fails, and 7 wins. That’s not a bad year. How do you think I did?

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Signal LA Agenda Is Up

By - December 23, 2010

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I’m pleased to announce that the preliminary agenda for our first ever Signal conference, Signal LA, is live and online. Signal is FM’s conference series highlighting one major trend in digital media and marketing, in one city, on one day.

First up is Los Angeles, Feb 8th, with a focus on Content Marketing. Check out the amazing lineup:

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Register today, I expect this to sell out. I’m thrilled to be doing more of these high quality events next year. It’s going to be a lot of fun. And it doesn’t hurt that we’re doing Signal LA at the SLS Hotel, which is pretty much the best place going at the moment….

The Year In Writing, 2010

By - December 22, 2010

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This has become something of a tradition at Searchblog (well, OK, it’s the second time in three years), in which I review the year in posts and note those of which I am particularly proud. For me it’s a way to remember what I’ve been on about, and catalog some of my sketches for further work (perhaps as a book, ahem).

So in chronological order, here are the posts I liked from these past 12 months, with some commentary as well:

January

Predictions 2010 I’ll be getting to this in a post later this week.

Search Getting Worse? What Did I Mean?! I wrote a series on this. This is a summary.

Google’s Tortured History With China In which the eventual unraveling of Google’s business in China began.

The Evolving Search Interface: Mobile Drives Search As App Or why mobile is a major threat to Google, and why Google responded with Android.

Why The Apple iPad Will Disappoint (The Obama Effect) I was wrong about the iPad being a dud, but not wrong about it disappointing me. It pretty much made everyone else happy, but I don’t like it mainly for the politics of it. And it did disappoint nearly everyone when it was announced, but then became a major hit. As to why I was unhappy: The Tuesday Signal: Birth of Another Orifice

Google Rolling Out Social Search: But Does It Leverage Facebook?  Glimmerings of what has become a full out data sharing war between the rivals.


February

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Thursday Signal: Are You Checked In? I realize, in this post, that checking in is a new field in the Database of Intentions.

Updated: Google to Air “Search Stories” Ad During Super Bowl… My big scoop of the year. Sigh, I guess Searchblog isn’t much of a news outlet, is it?!

The Thursday Signal: Is Google Losing Its Customer Focus? In which I determine it is, based on Buzz.

I Don’t Like The iPad Because… I guess I had to keep hammering on this. This is about how the iPad is loved by all traditional media because of its locked distribution model.

Friday Signal: The Web Gets Its Wisdom Teeth (We Hope) An extension of my MOLRS riff: Weds. Signal – “Local-Mobile-RealTime”: Re-imagining Social


March

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Why I Like Working With Marketers Because it makes me smarter.

Oh Looky! It’s Video of Bloody Jesus! (Nevermind the Facts) This year I seem to have become a cranky old journalism professor. This is one of a number rants on how bad some journalism has gotten. Also this one: Google v. China? No, It’s Bigger Than That

Toward a New Understanding of Publishing (Part 1) Cross posted from the FM blog. My first organized thoughts on brands as publishers.

My Location Is A Box of Cereal In which I expand on the idea of the check in as an important new Signal.

The 2010 Web2 Summit Theme: Points of Control Introducing the theme of this year’s event.

The Signal – Instrumenting Our Social Lives The idea of “instrumentation” is introduced and explored. I’ve used this framing all year long.

Video Chat on the Plane? Illegal? OK? Legal Gray Area? Turns out, it depends, but another example of pushing cultural and legal boundaries.

Database of Intentions Chart – Version 2, Updated for Commerce The definitive chart, at least for now. Based on: The Database of Intentions Is Far Larger Than I Thought

April

Brands As Publishers – Part 2 Second in the series started above.

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Foursquare – I Wish It Was Better For Me… And I still do.

Twitter To Roll Out “Promoted Tweets”: Initial Thoughts (Developing) My first take on Twitter’s long anticipated business model.

An Open Letter to Apple Regarding The Company’s Approach to Conversation with Its Peers and Its Community Everyone came to speak at Web 2, except Apple. This was my plea. It went unanswered.

Twitter’s “Public Interest Graph” My take on the value and signal Twitter is starting to create.

On Google’s Brand I point out that the brand is starting to mean too much and not enough.

The Gap Scenario I use this all the time now as a talking point around MOLRS.


May

The iAd: Steve Jobs Regifts The Mobile Marketing Experiencewillywkna.jpg I was not impressed.

Google’s New Mission? “To Organize the World’s information (Unless It Starts With “i”) …..” Google don’t play in Apple’s “Planet of the Apps.”

Fear Is A No No – Except at Night My thinking out loud about being a CEO and a leader. Got a lot of response to this.

The ROI of iAds – A Lot of Unanswered Questions And still unanswered, far as I can tell.

Five Years In One Place, An Appreciation It really is amazing that I love my work after five and one half years.

Is The iPad A Disappointment? Depends When You Sold Your AOL Stock. In which I attempt to explain my POV on the device, again.

June

Of Course Apple Is Going to Do Search. But not search as you know it today.

It’s Official – Apple Kicking Google Out of iWorld Wow, 91 comments, one of the largest responses this year…

Is Apple’s iWorld “The Web”? In which I tell a story about my son…

Will Google Compete With Facebook? Er…It Already Is, Folks. It’s not if, it’s not when, it’s how.

July

Is Yahoo Dead? I Don’t Think So. Who Else With This Scale Can Be Neutral?Screen shot 2010-07-14 at 1.06.43 PM.png My defense of Yahoo, which six months later, I stand by, though I can’t say the company is looking healthy.

On Facebook, Google, and Our Evolving Social Mores Online I go a lot deeper into the concept of Instrumentation here.

Search, Foursquare, and Checking Into States of Mind How a checkin is like search, if you redefine both a bit. Example: Checking into the state of mind of “wanting to buy a car.”

What Means This, To “Go Google”!? It means the brand isn’t about search alone.

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August

Second (Day) Thoughts on Google-Verizon Framework – Isn’t This All About Android? Or maybe, GoogleTV *and* Android. Or Maybe It’s Really About (Google) TV…

AT&T Weighs In: Trust Us, We Know What You Want More thoughts on the net neutrality debate.

Finding a Yogurt Shop A Mile Away: I’m Not Feeling Lucky. An old school rant on the state of search.

Is Google Objective? No. Well, maybe. Sort of. Depending on your point of view.

Web 2 Summit Points of Control: The Map I am very proud of this work.

On Retargeting: Fix The Conversation In which I propose a solution. That Was Fast: TellApart Implements A Searchblog Suggestion In which that solution is implemented.

September

More Thoughts On Demand: A Referendum of Sorts on Google and Social My longish take on Demand’s IPO and business.

Nielsen: Bing Overtakes Yahoo In Search Share Proving my prediction true…

Stop It. Google Won’t Buy Twitter. And why I thought that. One of the most tweeted posts of the year (wonder why).

October

Identity and The Independent Websocial_contract.large.jpg One of my longer pieces, and probably more important than most as well, in that it starts to frame a bigger idea – that of revealed identity as well as the concept of dependent and independent webs. FM, as you might expect, plans on being the most important media company in the independent web space, while working well with the leaders of the dependent web.

All Brands Are Politicians More of my thinking about what it means to be a brand in the context of today’s web.

November

Mark Zuckerberg at Web 2 – A Maturing CEO The most replayed stream of the Web 2 Summit. My writing suffers in October and November due to the work of Web 2 (well, honestly, it suffers all year long). But the output is almost worth it. However, I must say, I can’t both write a book, run FM, and run Web 2. Something will have to give.

Groupon Is Worth More Than $2.5 Billion My first post on Groupon, not my last.

Twitter’s Great Big Problem Is Its Massive Opportunity Twitter at another inflection point, a critical one. This one was third or so in retweets.


December

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In Google’s Opinion…. My continuing exploration of the concept of objectivity in search and algorithms.

Google’s “Opinion” Sparks Interesting Dialog On Tying of Services to Search And on it goes…

Is RSS Really Dead? No, apparently not, as this post got the most comments of the year.

Social Editors and Super Nodes – An Appreciation of RSS And it led to this post, which really crystalized my thinking about a key attribute of the social web.

Why Wouldn’t Google Mirror Wikileaks? Because no one wants to be the target of banks and major governments, I suppose.

Signal, Curation, Discovery The more time I spend in this industry, the more I enjoy writing about it.

Thinking Out Loud: What’s Driving Groupon? Second in retweets and still going.

That’s it – quite a lot of writing when you sum it all up. I was a bit bummed out during the year that I was not writing enough, and honestly, there are scores of posts I wish I had the time to create. While 50,000 or so words ain’t bad, it’s not what I’d like to do. So this coming year, I’ll be doing more, that much I can promise. And reviewing the work above does lead me to some promising conclusions about where “the next book” is going. And that makes me grateful for this site, and for your time. Thank you.

Thinking Out Loud: What's Driving Groupon?

By - December 17, 2010

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In the current issue of the New Yorker, columnist James Surowiecki, who I generally admire, gets it exactly wrong when it comes to Groupon.

He writes:

” But it seems unlikely that it’s going to become a revolutionary company, along the lines of YouTube, Facebook, Twitter, and Google. ….Groupon, by contrast, is a much more old-school business. It doesn’t have any obvious technological advantage. Its users don’t really do anything other than hit the “buy” button. And its business requires lots of hands-on attention…”

Well, that’s a defensible opinion, but after visiting CEO Andrew Mason this week in Chicago, and thinking about it a bit, I must say that I wholeheartedly diasagree.

Many folks think of Groupon as a relatively simple idea. A daily deal, a large sales force, and that’s about it. Too easy to copy (there are scores of “Groupon clones”), and too labor intensive (the more small businesses you want to work with, the more sales and service people you need).

All this is true. But it fails to understand the power of Groupon’s model. To sum it up: Groupon has built a new channel into the heart of the the world’s economic activity: Small businesses. And it is that channel where the true power lies.

First, the economic math: Small businesses create more than 50% of US GDP and create more than 75% of net new jobs each year. But small businesses represent a fragmented, maddeningly difficult sector of our economy – 23 million small pieces loosely joined. Any platform that has connected them and added value to their bottom line has turned into a massive new business.

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Over the past century, there have been two such new platforms. The most recent is Google, a proxy for the rise of the web as a platform for small business lead generation. Before that, it was the Yellow Pages, a proxy for the rise of the telephone as a platform for lead generation.

Groupon, I believe, has the potential to be a new proxy – one that subsumes the platforms of both the Internet and the telephone, and adds multiple dimensions beyond them.

I know that’s a stretch, but hear me out.

First, let’s review the Yellow Pages. What is it? Well, for the most part, it’s a paper-based publishing platform that combines a curated local business phone directory with advertising listings. Nearly every single small business with a phone number is listed in the Yellow Pages, and a large percentage of them also buy advertising to promote their wares as well.

In short, the Yellow Pages is a platform that connects every single consumer with a phone to every single local business with a phone.

As a business, the Yellow Pages consists of folks who manage the listings and produce the books, as well as a very large sales force which calls on local businesses. Once a year, the product turns over, and a new book is made.

That’s it. Simple (and certainly not technologically defensible), and while it’s clearly in decline, the Yellow Pages is currently a $15 billion revenue business in the US alone. Now, the Yellow Pages is also an online business, but they were late the party, and have pretty much lost to Google when it comes to the platform play.

Google represents a second new platform which connects consumers and small businesses. Many forget that it was small business that drove early adoption of AdWords (as well as Overture, its early competition). And while not every small business is yet online – 36% of US small businesses still don’t have a web site – a the clear majority of them do, and milllions of them use AdWords, as well as organic search, to drive leads to their business. Google makes billions of dollars leveraging its platform, which, by the way, has subsumed the Yellow Pages business and grown well past it into any number of other markets, including most major international regions.

Google alone is on a $30 billion revenue run rate, and it’s only ten years old. That’s twice the US revenues of the Yellow Pages, which were built up over more than 50 years.

So to review, the Yellow Pages leveraged the telephone to create a massively scaled and profitable platform connecting consumers and businesses. Google did the same, but leveraged the Internet (and subsumed the telephone as well).

And Groupon is doing it again, subsuming the telephone, the Internet, and leveraging an entirely new platform: the mobile web. google_logo1.jpg

Now, before you yell at me and claim that Groupon is anything BUT a mobile-driven company (the company sends email to 40mm US subscribers, for example), recall my definition of mobile is a bit more complicated than most.

Remember MOLRS? As I said in that post: “if you are going to think about mobile, you have to think about social, local, and real time.” In short, mobile is meaningless without context: Where someone is (or is about to go), who someone is with (or about to go meet), and why someone is where they are (or with who they are with). And, of course, when someone is where they are (and with whomever they are there with…).

Whew. Sorry, but you get the picture.

Now, let’s think about MOLRS in relation to small business. First, small business owners (SBOs) care deeply about location. Are they in a good location? Will customers be able to find them? Is there parking? A good neighborhood? Strong foot traffic?

Second, SBOs care deeply about relationships and word of mouth (or what we will call social). Do people refer their friends and family to the business? Are people happy with the service? Will they say nice things?

Third, SBOs care very much about timing (what I call “real time” in my MOLRS breakdown). What are the best hours for foot traffic? What are the best times to run promotions? How can I bring in more business during slow times? How does seasonality effect my business? When should I have a sale?

In short, SBOs are driven by local, social, and real time.

Turns out, so is Groupon.

Now, ask any small business owner what they wish for more of, and they’ll give you a resounding answer: More customers. It’s why they pay for the Yellow Pages ad, and it’s why they buy AdWords from Google.

And it’s why they are starting to buy Groupon’s product, at a breakneck pace. Sure, some of them buy too much of it, or fail to do the math and lose money on the come. They’ll adjust, and if they don’t, smarter SBOs will eat their lunch, and the world will move on.

To my mind, the proof is in Groupon’s growth rate. I’ve never seen anything like it – well, since Google. And just as Google lapped the Yellow Pages in a fraction of the time, Groupon seems to be on track to do the same to Google.

Good sources have told me that Groupon is growing at 50 percent a month, with a revenue run rate of nearly $2 billion a year (based on last month’s revenues). By next month, that run rate may well hit $2.7 billion. The month after that, should the growth continue, the run rate would clear $4 billion.

Google’s run rate, when revealed in its IPO filing six years ago, was staggering – it grew from under $200 million to $1.6 billion in less than three years. Groupon is on track to do the same – but in less than one year.

That’s pretty extraordinary. But remember, Groupon has figured out a way to deliver what SBOs want most: more customers in their stores. And unlike Google or the Yellow Pages, Groupon doesn’t sell advertising. Instead, it takes 50% of the actual revenue driven by its platform. Trust me, that’s potentially a much bigger number.

Actually, it’s pretty interesting to see how the business model of driving leads to business has shifted as each platform has risen to dominance. The Yellow Pages charge a set price for a display ad, with no guarantee that the ad would drive any leads. Google turned the model upside down, and charged only when people clicked on the ad. Groupon doesn’t charge anything at all: It simply takes half the revenue generated when a deal is fulfilled by its platform.

So to summarize, I think those who claim Groupon’s business is too simple are focused on the wrong things. Sure, there are other deal sites. But none have Groupon’s scale. Sure, Groupon’s model of one deal in one city on one day is limited, but it’s easy to see how the product scales against category, zip code, time of day, and many other variables. And sure, Groupon has a lot of people who have to touch a lot of businesses and a lot of customers every day. But to me, that’s the company’s strength: SBOs are in the people business, and therefore, so must Groupon be.

And this, to my mind, is why Facebook or Google can’t compete with Groupon. Imagine Facebook or Google with 1,000 people who do nothing but talk to customers all day long? Yep, I can hear the laughter from here….

While I was visiting earlier this week, CEO Mason told me that a significant percentage of Groupon’s customer service reps are members of Chicago’s vibrant improv scene. That makes sense to me – if you are going to deal with possibly upset people all day, it helps to have a culture of humor and thinking on your feet.

That culture will serve Groupon well as it attempts to deal with world record-breaking growth. While there is no certainty the company won’t blow its lead, it’s already a major international player. And while Mason would not comment on the rampant speculation over a $6 billion offer from Google that reportedly fell apart last week, in the end, it may be that the idea of Groupon being purchased by Google is as silly as the idea that the Regional Bell Operating Companies, who originally had the monopoly on the Yellow Pages market, could or should have bought Google.

In the end, it wouldn’t have been a fit.

We've (Still) Lost the Backlink, and I For One Want It Back.

By - December 16, 2010

backrub-tm.jpgRemember back in the halcyon days of the web, when bloggers shared a sense of community with each other, linking back and forth to each other as a matter of social grace and conversation, as opposed to calculated consideration?

Well, if not, that’s how it was back in 2003 or so, when I started blogging. Now, that signal (who linked to you recently) is gone, and honestly, not just for blogging. It’s also gone for most of the web. Of course, you can find it, if you want to geek out in your refer logs. But honestly, why have we buried it there?

The funny thing is, this is the very signal Larry Page was looking for when he came upon the idea for Google with Sergey. Backrub, remember?

I sense there’s about to be some serious reconsideration of the value of declarative and transparent backlinks. I don’t know why, but call it an itch I’m scratchin’, rather like that of RSS….

All of this brought on by my continued and early explorations of Tumblr….

Google Instant Isn't Opinion, Apparently?

By - December 13, 2010

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I was just reading this piece from Fast Company: Top Google Engineer: Google Instant Has No Brand Bias, and this quote struck me:

“What we do at Google and what we’ve done for years is to not inject any subjectivity into these algorithms,” says Amit Singhal, Google Fellow and head of the company’s search quality, ranking, and algorithm team. “We didn’t want to introduce any bias into the mathematical modeling–our modeling is predicting, given a letter, what’s the probability of completion.

Singhal is speaking about Google Instant, which has apparently accused of bias in its suggested search algorithm. I believe he’s speaking the truth – that when it comes to whatever is suggested, it’s pretty much all math, save a few human-coded exceptions around porn, etc.

But the problem Google has is that when it says one thing about one algorithm, it resonates around all others. This is the curse of PageRank – one ring to rule them all, at least in the minds of most consumers. And in that sense, it directly contradicts Google’s take on the “objectivity” of algorithms, as I discussed here. In short, it’s in Google’s interest to say algorithms are protected speech (opinions), and therefore protected by the First Amendment.

Apparently, that doesn’t apply to Google Instant. Hmmm.

Signal, Curation, Discovery

By - December 11, 2010

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This past week I spent a fair amount of time in New York, meeting with smart folks who collectively have been responsible for funding and/or starting companies as varied as DoubleClick, Twitter, Foursquare, Tumblr, Federated Media (my team), and scores of others. I also met with some very smart execs at American Express, a company that has a history of innovation, in particular as it relates to working with startups in the Internet space.

I love talking with these folks, because while we might have business to discuss, we usually spend most of our time riffing about themes and ideas in our shared industry. By the time I reached Tumblr, a notion around “discovery” was crystallizing. It’s been rattling around my head for some time, so indulge me an effort to Think It Out Loud, if you would.

Since its inception, the web has presented us with a discovery problem. How do we find something we wish to pay attention to (or connect with)? In the beginning this problem applied to just web sites – “How do I find a site worth my time?” But as the web has evolved, the problem keeps emerging again – first with discrete pieces of content – “How do I find the answer to a question about….” – and then with people: “How do I find a particular person on the web?” And now we’ve started to combine all of these categories of discovery: “How do I find someone to follow who has smart things to say about my industry?” In short, over time, the problem has not gotten better, it’s gotten far more complicated. If all search had to do was categorize web content, I’d wager it’d be close to solved by now.

But I’m getting ahead of myself.

Our first solution to the web’s initial discovery problem was to curate websites into directories, with Yahoo being the most successful of the bunch. Yahoo became a crucial driver of the web’s first economic model: banner ads. It not only owned the largest share of banner sales, but it drove traffic to the lion’s share of second-party sites who also sold banner ads.

But directories have clumsy interfaces, and they didn’t scale to the overwhelming growth in the number of websites. There were too many sites to catalog, and it was hard to determine relative rank of one site to another, in particular in context of what any one individual might find relevant (this is notable – because where directories broke down was essentially around their inflexibility to deal with individual’s specific discovery needs. Directories failed at personalization, and because they were human-created, they failed to scale. Ironically, the first human-created discovery product failed to feel…human).

Thus, while Yahoo remains to this day a major Internet company, its failure to keep up with the Internet’s discovery problem left an opening for a new startup, one that solved discovery for the web in a new way. That company, of course, was Google. By the end of the 1990s, five years into the commercial web, discovery was a mess. One major reason was that what we wanted to discover was shifting – from sites we might check out to content that addressed our specific needs.

Google exploited the human-created link as its cat-herding signal. While one might argue around the edges, what Google did was bring the web’s content to heel. Instead of using the site as the discrete unit of discovery, it used the page – a specific unit of content. (Its core algorithm, after all, was called PageRank – yes, named after co-founder Larry Page, but the entendre stuck because it was apt).

Google search not only revolutionized discovery, it created an entire ecosystem of economic value, one that continues to be the web’s most powerful (at least for now). As with the Yahoo era, Google became not only the web’s largest seller of advertising, it also became the largest referrer of traffic to other sites that sold advertising. Google proved the thesis that if you find a strong signal (the link), and curate it at scale (the search engine), you can become the most important company in the Internet economy. With both, of course, the true currency was human attention.

But once again, what we want to pay attention to is changing. Sure, we still want to find good sites (Yahoo’s original differentiation), and we want to find just the right content (Google’s original differentiation). But now we also want to find out “What’s Happening” and “Who’s Doing What”, as well as “Who Might I Connect With” in any number of ways.*

All of these questions are essentially human in nature, and that means the web has pivoted, as many have pointed out, from a site- and content-specific axis to a people-specific axis. Google’s great question is whether it can pivot with the web – hence all the industry speculation about Google’s social strategy, its sharing of data with Facebook (or not), and its ability to integrate social signal into its essentially HTML-driven search engine.

While this drama plays out, the web once again is becoming a mess when it comes to discovery, and once again new startups have sprung up, each providing new approaches to curate signal from the ever-increasing noise. They are, in order of founding, Facebook, Twitter, and Tumblr, and oddly enough, while each initially addressed an important discovery problem, they also in turn created a new one, in the process opening up yet another opportunity – one that subsequent (or previous) companies may well take advantage of.

Let me try to explain, starting with Facebook. When Facebook started, it was a revelation for most – a new way to discover not only what mattered on the web, but a way to connect with your friends and family, as well as discover new people you might find interesting or worthy of “friending.” Much as Google helped the web pivot from sites to content, Facebook became the axis for the web’s pivot to people. The “social graph” became an important curator of our overall web experience, and once again, a company embarked on the process of dominating the web: find a strong signal (the social graph), curate it at scale (the Facebook platform), and you may become the most important company in the Internet economy (the jury is out on Facebook overtaking Google for the crown, but I’d say deliberations are certainly keeping big G up at night).

But a funny thing has started to happen to Facebook – at least for me, and a lot of other folks as well. It’s getting to be a pretty noisy place. The problem is one, again, of scale: the more friends I have, the more noise there is, and the less valuable the service becomes. Not to mention the issue of instrumentation: Facebook is a great place for me to instrument my friend graph, but what about my interests, my professional life, and my various other contextual identities? Not to mention, Facebook wasn’t a very lively place to discover what’s up, at least not until the newsfeed was forced onto the home page.

Credit Twitter for that move. Twitter’s original differentiation was its ability to deliver a signal of “what’s happening”. Facebook quickly followed suit, but Twitter remains the strongest signal, in the main because of its asymmetrical approach to following, as opposed to symmetric friending. Twitter is yet another company that has the potential to be “the next Yahoo or Google” when it comes to signal, discovery, and curation, but it’s not there yet. Far too many folks find Twitter to be mostly noise and very little signal.

In its early years, things were even worse. When I first started using Twitter, I wrote quite a bit about Twitter’s discovery problem – it was near impossible to find the right folks to follow, and once you did, it was almost as difficult to curate value from the stream of tweets those people created.

Twitter’s first answer to its discovery problem – the Suggested User List – was pretty much Yahoo 1994: A subjective, curated list of interesting tweeters. The company’s second attempt, “Who To Follow,” is a mashup of Google 2001 and Facebook 2007: an algorithm that looks at what content is consumed and who your follow, then suggests folks to follow. I find this new iteration very useful, and have begun to follow a lot more folks because of it.

But now I have a new discovery problem: There’s simply too much content for me to grok. (For more on this, see Twitter’s Great Big Problem Is Its Massive Opportunity). Add in Facebook (people) and Google search (a proxy for everything on the web), and I’m overwhelmed by choices, all of them possibly good, but none of them ranked in a way that helps me determine which I should pay attention to, when, or why.

It’s 1999 all over again, and I’m not talking about a financing bubble. The ecosystem is ripe for another new player to emerge, and that’s one of the reasons I went to see the folks at Tumblr yesterday.

As I pointed out in Social Editors and Super Nodes – An Appreciation of RSS, Tumblr is growing like, well, Google in 2002, Facebook in 2006, or Twitter in 2008. The question I’d like to know is….why?

I’m just starting to play with the service, but I’ve got a thesis: Tumblr combines the best of self expression (Facebook and blogging platforms) with the best of curation (Twitter and RSS), and seems to have stumbled into a second-order social interest graph to boot (I’m still figuring out the social mores of Tumblr, but I am quite certain they exist). People who use Tumblr a lot tell me it “makes them feel smarter” about what matters in the web, because it unpacks all sorts of valuable pieces of content into one curated stream – a stream curated by people who you find interesting. It’s sort of a rich media Twitter, but the stuff folks are curating seems far more considered, because they are in a more advanced social relationship with their audience than with folks on Twitter. In a way, it feels like the early days of blogging, crossed with the early days of Twitter. With a better CMS and a dash of social networking, and a twist. If that makes any sense at all.

Tumblr, in any case, has its drawbacks: It feels a bit like a walled garden, it doesn’t seem to play nice with the “rest of the web” yet, and – here’s the kicker – finding people to follow is utterly useless, at least in the beginning.

Just as with Twitter in the early days, it’s nearly impossible to find interesting people to follow on Tumblr, even if you know they’re there. For example, I knew that Fred Wilson, who I respect greatly, is a Tumblr user (and investor), so as soon as I joined the service, I typed his name into the search bar at the top of Tumblr’s “dashboard” home page. No results. That’s because that search bar only searches what’s on your page, not all of Tumblr itself. In short, Tumblr’s search is deeply broken, just like Twitter’s search was back in the day (and web search was before Google). I remember asking Evan Williams, in 2008, the best way to find someone on Twitter, and his response was “Google them, and add the word Twitter.” I’m pretty sure the same is true at present for Tumblr. (It’s how I found Fred, anyway).

Continuing the echoes of past approaches to the same problem, Tumblr currently provides a “suggested users” like directory on its site, highlighting folks you might find interesting. I predict this will not be around for long – because it simply doesn’t solve the problem we want it to solve. I want to find the right users for me to follow, not ones that folks at Tumblr find interesting.

If Tumblr can iron out these early kinks, well, I’d warrant it will take its place in the pantheon of companies who have found a signal, curated it at scale, and solved yet another important discovery problem. The funny thing is, all of them are still in the game – even Yahoo, who I’ve spent quite a bit of time with over the past few months. I’m looking forwarding to continuing the conversation about how they approach the opportunity of discovery, and how each might push into new territories. Twitter, for example, seems clearly headed toward a Tumblr-like approach to content curation and discovery with its right hand pane. Google continues to try to solve for people discovery, and Facebook has yet to prove it can scale as a true content-discovery engine.

The folks at Google used to always say “search is a problem that is only five-percent solved.” I think now they might really mean “discovery is a problem that will always need to be solved.” Keep trying, folks. It gets more interesting by the day.

* I’m going to leave out the signals of commerce (What I want to buy) and location (Where I am now) for later ruminations. If you want my early framing thoughts, check out Database of Intentions Chart – Version 2, Updated for Commerce, The Gap Scenario,and My Location Is A Box of Cereal for starters.

Google, China, Wikileaks: The Actual Cable

By - December 08, 2010

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When the Wikileaks story broke, I wrote a short piece chastising folks for blogging the assertion that one of the cables proves the Chinese government was behind the Google hacking which preceded Google’s pulling out of the country. The cable is based on single sources, who are anonymous and second-hand, and that doesn’t pass the journalistic sniff test.

My colleague Matt McAlister at the Guardian has sent me the link to the entire cable, and while I stand by my original take on the story, it sure is intriguing to read. In fact, the details I find most interesting are the interactions alleged between Baidu and the Chinese goverment.

From the cable:

….

Another contact claimed a top PRC leader was actively working with Google competitor Baidu against Google.

….

Google’s recent move presented a major dilemma (maodun) for the Chinese government, not because of the cyber-security aspect but because of Google’s direct challenge to China’s legal restrictions on Internet content. The immediate strategy, XXXXXXXXXXXX said, seemed to be to appeal to Chinese nationalism by accusing Google and the U.S. government of working together to force China to accept “Western values” and undermine China’s rule of law. The problem the censors were facing, however, was that Google’s demand to deliver uncensored search results was very difficult to spin as an attack on China, and the entire episode had made Google more interesting and attractive to Chinese Internet users. All of a sudden, XXXXXXXXXXXX continued, Baidu looked like a boring state-owned enterprise while Google “seems very attractive, like the forbidden fruit.”

….

XXXXXXXXXXXX noted the pronounced disconnect between views of U.S. parent companies and local subsidiaries. PRC-based company officials often downplayed the extent of PRC government interference in their operations for fear of consequences for their local markets. Our contact emphasized that Google and other U.S. companies in China were struggling with the stated Chinese goal of technology transfer for the purpose of excluding foreign competition. This consultant noted the Chinese were exploiting the global economic downturn to enact increasingly draconian product certification and government procurement regulations to force foreign-invested enterprises (FIEs) to transfer intellectual property and to carve away the market share of foreign companies.

Introducing FM's Signal Conference Series

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SIGNAL.pngI’m pleased to formally announce Federated Media’s upcoming Signal Series – three full-day conferences in three great cities. Born from FM’s annual Conversational Marketing Summit and my daily Signal newsletter, the Signal conference series focuses on one key topic in one city at a time. These three events will culminate in our annual CM Summit in New York next June during Internet Week.
We’ve nearly completed the program for the first event – Signal LA. The event is February 8th at the SLS Hotel (it’s quite nice!). The focus, as befits an event in LA, is content marketing, one of the more talked about trends in brand marketing today.  Our speaker line-up, as I hope you’ve come to expect, is stellar, and we’re really excited for what we’re sure will be an interesting, informative and impactful day. Please join us!

Confirmed speakers for Signal LA include:

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Luke Beatty, VP & GM, Associated Content Yahoo!

Joanne Bradford, Chief Revenue Officer, Demand Media

Deanna Brown, COO, Federated Media

Chris Cunningham, CEO / founder, appssavvy

Arianna Huffington, Founder, Huffington Post

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Peter Guber, Chairman & CEO, Mandalay Entertainment

Ann Lewnes, SVP Global Marketing, Adobe

Joel Lunenfeld, CEO, Moxie Interactive

Suzie Reider, Director of Sales and Marketing, YouTube

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Rashmi Sinha, Founder, Slideshare

Biz Stone, Co-founder, Twitter

will.i.am, Founder, Dipdive and Black Eyed Peas

We’re still adding great speakers, so watch our site for more updates.

Signal is produced for senior decision makers in the Internet, media, and marketing businesses. If you’re involved in the digital media ecosystem, you belong at Signal. Sign up today.

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Why Wouldn't Google Mirror Wikileaks?

By - December 07, 2010

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(image) Consider: Your mission is to “organize the world’s information and make it universally accessible.” You thumbed your nose at Wall Street, and you proved them wrong. You’ve stood up to the entire media industry by purchasing YouTube and defending fair use in the face of extraordinary pressure. You’ve done the same with the political and economic giant that is China*. And you’re hanging the entirety of your defense against European monopoly charges on the premise of free speech.

So why not take a bold step, and stand with Wikileaks? The world’s largest Internet company taking a clear stand would be huge news, and it’d call the bloviating bluff of all the politicians acting out of fear of embarrassment, or worse. The Wikileaks story may well be, as pointed out by many, the most important and defining story of the Internet age.

It just might prove to be the smartest PR move Google ever made. (And it could, of course, prove to be the exact opposite). And it looks, so far, like rival Facebook is leaning toward supporting Wikileaks.

After all, tens of millions of Stieg Larsson readers can’t be wrong…and I’m guessing they all see the charges against Assange as driven by more than trumped up sex scandal or politically motivated condemnation. Honestly, Larsson himself could not have written a better potboiler than what’s unfolding before us.

Just thinking out loud. What do you think?

*(And hey, it turns out Wikileaks may have already done Google a solid when it comes to China…)