I’m very proud to announce the initial 2010 Web 2.0 Summit program. You can see the lineup on the Summit site here.
Our 2010 theme Points of Control, helped us create a lineup that is truly remarkable, full of industry titans and insurgents alike. Alongside policy leaders such as Julius Genachowski, Chairman of the FCC, we’ll hear from the Internet’s most powerful CEOs:
- Google’s Eric Schmidt, perhaps the most active player in our points of control map – defending the company’s home turf of search, extending its reach into mobile payments, content, advertising platforms, social networking, and more.
- Robin Li, CEO of China’s biggest search engine Baidu which has ambitions well beyond its current (massive) scale.
- Todd Bradley and Jon Rubinstein, the duo responsible for HP’s Palm integration (not to mention the largest maker of computing devices in the world).
- Ariel Emmanuel, the co-CEO of William Morris Endeavor Entertainment (and yes, the man who inspired Entourage…)
- Kathy Savitz, CEO of Lockerz helping us understand the behavior of “Generation Z.”
- Mark Zuckerberg, CEO of Facebook, in one of his first one on one conversations in months.
- Ev Williams, CEO of Twitter, six months into the launch of his company’s new revenue platform.
- Andrew Mason, CEO of Groupon, one of the fastest growing companies in the history of business.
- Richard Rosenblatt, CEO of the surging Demand Media (which filed for an IPO just last month).
- Davis Guggenheim, director of An Inconvenient Truth and the forthcoming Waiting for Superman.
- Yuri Milner, the Russian super-investor who owns nearly 10 percent of Facebook, among many other major platform players.
- Jim Balsillie, the co-CEO of RIM, who has plenty to talk about given the upheaval in the mobile marketplace.
These conversations will be paired with a series of high-powered, dynamic presentations we call High Order Bits that are tailored to push our thinking. All our panels focus around our theme, Points of Control, and industry topics include: Mobile Platforms, Content, Finance, Advertising Platforms, Education, and, not to forget, Location Based Services.
As has been since Day 1 in 2004, Mary Meeker will share her annual ‘Internet Trends’ presentation; Bing Gordon will explore The New Geography of Gaming with Don Mattrick of Microsoft; and Zappos CEO Tony Hsieh will swap stories on growth, culture, and financial triumph alongside Susan Lyne, CEO of Gilt, and Richard Rosenblatt.
Throughout this robust program, we added bits of humor and passion sprinkled across the three days in a format we call Ignite. We culled the best of the best from around the world — human experiences shared through exactly 20 slides in exactly five minutes. Be sure to catch them; they go fast but leave a strong impression.
We’ve also got Carol Bartz, Perter Chernin, Marc Benioff, John Doerr, Fred Wilson, Jack Dorsey, and so much more… I’ve only covered some of the high points, but sprinkled throughout will be presentations from Wim Elfrink, EVP & Chief Globalization Officer at Cisco, Mark Pincus, CEO of Zynga, Vinod Khosla, Founder of Khosla Ventures, Steven Berlin Johnson, author of Where Good Ideas Come From: The Natural History of Innovation, and many more, including some surprise product and company announcements.
And if you haven’t already, register today to join the conversation this November. If you need an invite, as a Searchblog reader, I can make sure you get one. Just ping me at jbat at battellemedia dot com.
Hope to see you there!
Way back in January, I predicted (see #8) that Microsoft’s Bing would overtake Yahoo in share to become #2 in search. Today, at least one measurement service seems to have validated that claim, which at the time was a bit far-fetched, given the nearly seven point gap in share between the two companies.
These figures do not consider the Yahoo/Bing’s search deal. From the release, which is not yet up on the site:
According to new research released by The Nielsen Company, for the first time, MSN/Windows Live/Bing Search overtakes Yahoo! as the #2 search engine in the U.S., with a 13.9% share of search volume in August 2010, a 0.25% delta increase from last month.
Although Google saw little change in its month-over-month search volume, it still dominates the search market, accounting for 65% of all U.S. searches.
Yahoo! followed Google and MSN/Windows Live/Bing Search with a 13.1% share of U.S. searches, falling from a 14.6% share in July 2010 to 13.1% (a 1.2% delta decrease or an 8% relative decrease).
In terms of a year-over-year comparison, Google has seen little change in its share of search while Yahoo! has seen a small but steady decline, going from a 16% share to 13.1% (a delta drop of 2.9% or a relative drop of 18%). MSN/Windows Live/Bing’s share has grown from 10.7% in August 2009 to 13.9% (a delta increase of 3.2% or a relative increase of 30%).
For those of you who haven’t signed up for the Signal newsletter (shame on you, really), it’s my daily roundup of what’s happening in the world of media, marketing, and platforms. You can get it via RSS or email here (sign up for the newsletter in upper right hand corner).
As I do from time to time, here’s the last week or so for all you RSS readers.
Google today introduced what many are calling a major evolution in search interface today, sparking a landslide of commentary about the impact on SEO, mobile, competitors, search share, revenue, you name it.
It’s a lot to digest, and as much as I’d like to have a definitive statement on Google’s move to “instant search,” I don’t. Yet. I prefer to use it for a while, and think on it a bit more. I will admit that my initial response is more “meh” than “WOW!” – but then, I can’t really back that up. In the main, I think any major shift in search interface that is still predicated on typing inside a command line is most likely not going to change things much.
Then again, there are scores of folks who don’t share that half-formed sentiment. Here are some of the most prominent:
Live Blogging Google ‘Streaming” Search Event & How To Watch Live (SEL) Danny’s coverage of the news as it happened.
Search: now faster than the speed of type (Google Blog) The official announcement, with video.
Google Instant Makes SEO Irrelevant (Rubel) Not so fast, says Matt, below.
Thoughts on Google Instant (Matt Cutts) Matt is a key guy on search quality at Google. He says Google Instant will not kill SEO, among other things.
About Google Instant (Google.com) More from Google on why they did it.
Google Instant: A Mobile App Approach to Search (GigaOm) Interesting and cogent insight.
Google Instant Search: The Complete User’s Guide (SEL) As you would expect, second day overview on the first day from SEL.
Google Instant officially announced. Never underestimate speed. (TNW) Speed is the focus of Google’s announcement.
Google Just Killed The “I’m Feeling Lucky Button” (GOOG) (SAI) And, according to SAI, made a cool 100MM+ in the process.
More after a few days of using it…
It’s been nearly a month since Demand filed its S1, and I promised you all a longer look after my initial posting. Here are some thoughts now that I’ve had a chance to digest the document. A caveat: I know Demand CEO Richard Rosenblatt well, and consider him a friend. And one of his investors, Oak, is an investor in my company, Federated Media. However, neither Oak nor Richard participated in the preparation of this post.
First off, the offering is notable for the number of banks that grace its cover sheet. I count ten, as many as Google had in its IPO back in 2004. That shows the hunger in the financial world for a win – and the company that gets in front of that hunger has a better chance than most to succeed in an offering, as those banks will all be pushing shares to their best clients.
But Demand’s S1 is far more traditional than Google’s. There’s no auction involved, and the company stays far away from the revolutionary prose espoused in Google’s S1 (remember “Google is not a conventional company. We do not intend to become one” ? And recall my response: “Yow,” I said to myself (and now to you…). “Do they really want to set themselves up like this?”)
One can debate whether Google has managed to live up to its S1, six years later, but it’s clear that Demand isn’t planning on setting itself up in a similar way. The two lead bankers are stalwarts Goldman and Morgan Stanley, and it looks like Demand is going to play this one straight down the middle.
I find Demand’s IPO interesting for several reasons, but the one that really gets me thinking is the company’s positioning – a new form of media company that leverages technology, algorithms, and scale. It reminds me of Yahoo – which picked up Demand-like Associated Content recently.
Yahoo is currently running an industry campaign titled “Science, Art, and Scale” – arguing that it takes all three to make a great media company. When it comes to Demand, one might argue there’s a distinct lack of “Art,” but young companies always play to their initial strengths. Regardless of whether you believe Demand is the next big thing or a “content farm,” anyone who is paying attention to the world of Internet media should take the time to get smart on Demand’s model. Win or lose, there’s much to learn in how the market judges this offering.
In fact, I believe this IPO could well be a tipping point of sorts, a referendum on not just the financial markets, but on the Era of Google as we know it. More on that in a minute.
Demand checks the box as a typical Internet media company – it’s got large reach and scale with owned and operated properties like eHow and Livestrong.com, and it’s got a freshly minted syndication business for its largely service-driven content base. But having large numbers (86 million uniques, in the case of Demand) isn’t enough to get a company public these days (ten years ago was a different story).
Investors now want a company to show them how its can turn those uniques into dollars, ideally via multiple product lines. And Demand has a pretty impressive history of doing just that – not without controversy, to be certain, but still, the scale is impressive.
Demand declares its mission thusly: “To fulfill the world’s demand for commercially valuable content.” As has been outlined well by others, Demand’s core product, at least as far as it is encountered by a consumer, is the daily creation of thousands of text and video articles on mostly service-related topics: How To Choose a Watermelon, for example, or How to Tie A Tie. Demand has also begun to create and aggregate content against celebrity brands in classic media categories – Lance Armstrong in health, or Tyra Banks in women’s interest.
Demand also is one of the world’s largest registrars, where it actively plays the domain game, leveraging “type in traffic” against AdSense for Domains and Yahoo’s competing product, as well as testing that traffic against its own content (which in itself is monetized through both AdSense and site specific brand campaigns). The domain business is extremely lucrative, in that it offers both subscription and advertising revenue, and operating costs are low. As Demand puts it in the S1: “Our Registrar complements our Content & Media service offering by providing us with a recurring base of subscription revenue, a valuable source of data regarding Internet users’ online interests, expanded third-party distribution opportunities and proprietary access to commercially valuable domain names that we selectively add to our owned and operated websites.”
I’m not going to wade into the debate over “content farms” here, mainly because I honestly find it a distraction. Demand has clearly found a strong and scaleable place in the search and content ecosystem. If journalists and publishers find it the model insulting, I suggest they create a better one. Demand’s content studio isn’t ever going to win a Pulitzer, nor, frankly, should it be asked to. But it works for me when I want to tie a tie. And that, times millions of uniques a day, is a real business.
As most coverage has pointed out at length, Demand is not making money, at least not on a GAAP accounting basis, which of course is what matters at the bottom line. But the company is quick to point out that it is, in fact, making money on an “adjusted OIBIDA” basis, and a lot of it. From the S1:
“For the year ended December 31, 2009 and the six months ended June 30, 2010, we reported revenue of $198 million and $114 million, respectively. For these same periods, we reported net losses of $22 million and $6 million, respectively, operating loss of $18 million and $4 million, respectively, and adjusted operating income before depreciation and amortization, or Adjusted OIBDA, of $37 million and $26 million, respectively. See “Summary Consolidated Financial Information and Other Data—Non-GAAP Financial Measures” for a reconciliation of Adjusted OIBDA to the closest comparable measures calculated in accordance with GAAP.”
On page 12 of the filing, the company gets into this measure, and it’ll be by this measure that the company hopes to be judged in financial circles. Sorry to give you more financial jargon, but it’s important:
“Our non-GAAP Adjusted OIBDA financial measure differs from GAAP in that it excludes certain expenses such as depreciation, amortization, stock-based compensation, and certain non-cash purchase accounting adjustments, as well as the financial impact of gains or losses on certain asset sales or dispositions. Our non-GAAP revenue less TAC financial measure differs from GAAP as it reflects our consolidated revenues net of our traffic acquisition costs. Adjusted OIBDA, or its equivalent, and revenue less TAC are frequently used by security analysts, investors and others as a common financial measure of operating performance.”
In short, it’s the OIBDA that’s got ten banks eager to take this company public. As far as I can tell, the OIBDA measure is intended to showcase Demand’s content business (as opposed to the registrar revenue), as the content business is growing far faster, overtaking registrar revenue 58% to 42% this year. By the measure of content OIBDA, the company is minting money, nearly $26 million in the first six months of this year.
However, Demand chose to take all that operating profit, plus some, and reinvest it (mostly) in acquisitions (to the tune of $21mm). And GAAP rules meant the rest of the operating profit was eaten up by non cash items like content amortization, stock option expenses, and depreciation.
In other words, the company could have been GAAP profitable, but – and this is important – it chose not to be. That’s interesting. We’ll see if the market agrees with this strategy.
Regardless, the company has significant revenue, and that revenue is ramping. $114 million in the first half of 2010 is impressive, and that’s before Q4, which for most media companies comprises 40% or more of annual revenue. That puts Demand on track to clear more than a quarter of a billion in revenue this year.
The Google Referendum and the Social Connection
OK, moving on from financials, the next key factor in the Demand offering is how, in a very real sense, it’s a referendum on Google’s current and future business prospects. Google is far and away the largest referrer of traffic to Demand properties, and its largest revenue source as well (this includes revenue from YouTube via eHow and other videos). The S1 acknowledges this, declaring that the company receives 26% of its revenue from Google, but it does not explicitly say what percentage of traffic it receives from Big G. Suffice it to say, it’s got to be huge. (Danny has an estimate here – it’s in the mid thirty percent range).
So the big question is this: If Demand is, in essence, a company that leverages Google as a platform (like Zynga does Facebook, for example), how will the stock market handicap Demand’s – and therefore Google’s – future?
It’s a worthy question. Google as an investment hasn’t done so well lately, in particular compared to rival Apple. Another rival, Facebook, is most likely going to be the hottest IPO after Demand (or Skype). So from Google’s standpoint, Demand is an important event, and I’m going to guess Google executives are rooting for it to be a raging success.
To me, all of this turns not on whether Demand will continue to be a search and content success (it will, to my mind), but whether Demand’s content can in some way become essential in what is increasingly a social content ecosystem. Of course, that is a key question for Google as well – can it add a third dimension of social to its flat content-based model of search?
Put another way, Google owns the web of directed intent – help me find WHAT I need, WHEN I need it. Content like Demand works beautifully in this world, and up till now, the web has been modeled on the search centered world of WHAT. But the web is moving to a web of indirect intent – modeled more on how people communicate with each other, as opposed to how people find answers. That’s a WHO-driven web, a social web – a Facebook web. And the WHAT web, led by Google, hasn’t cracked that nut. The reason? Well, in short, people are not predictable. That’s the charley horse of social. We love to share, but writing algorithms that predict sharing is a tricky business.
Criticisms of Demand’s content declare, rightfully, that “flat” articles about how best to tie a tie or potty train a pet are not the kind of articles that most people want to share. They serve a single purpose: they are consumed and folks move on. It’s a classic search model.
Branded content, however, is far more social, because branded content is written with a human voice and published by a branded entity. Search drives a lot of traffic to branded content, of course, but once there, people tend to share branded content a lot more than “how to tie a tie.” The former is socially shareable (“hey, check this out, it’s interesting”) and the latter is specific (“I need an answer, and I don’t think my friends have the same need right now”).
This was ever so. Voice and point of view are the distinction here. Encyclopedias and Yellow Pages don’t have it, Mashable and the Huffington Post do. People are far more likely to point a friend to a link on HuffPo than a link on eHow.
So whatever Demand’s social strategy is will say a lot about how the company, and by extension Google, might compete in the next few years.
Unfortunately, the S1 doesn’t give us much to go on when it comes to this topic. Demand does, through its purchase of Pluck, provide “enterprise-class social media tools allow websites to add feature-rich applications, such as user profiles, comments, forums, reviews, blogs, photo and video sharing, media galleries, groups and messaging offered through our social media application product suite.”
But Demand does not disclose how much revenue it receives from this offering. I think one can safely assume it’s not very large.
So how can Demand get more social? A few ways. First, it can build “up the pyramid” – create branded sites like Livestrong.com that draw scale from thousands of “how to” articles, then layer more social branded content on top. This is clearly an area the company is getting into, with its recently inked deal with Tyra Banks, for example.
Second, it can figure a way to makes its service content accessible through the new distribution channel of social. As I’ve said many times, social is challenging search as the navigation interface for consumer intent. To put it another way, many of us are just as likely to tweet or post on Facebook something like the following “Help! I forgot how to tie a tie!” as we are to search for that on Google. We then hope one of our pals will post a link to – well, perhaps to eHow’s page on the subject.
What if there were a better way to surface those links as smart responses to such questions, through Facebook’s own advertising platform, for example, or a new app that Demand might create on the Facebook Platform? That’s one way to make service content more social – weave it into the fabric of social services at the root level. When I ask that question on Facebook about tying that tie, perhaps the response comes from a Demand content app.
But how does this help Google? I’m not sure, to be honest. At some point, the company will have to figure a way to play nicely with Facebook. Perhaps if Demand succeeds, both as a public company and in relationship to social, Google will see Demand as a point of entry to solving this problem. I’m not predicting this, as it’d be a stretch for Google to own a company that clearly competes with the rest of the content web – the same content web Google depends on for its value. Then again, Google did buy YouTube….
In Conclusion: The Role of Data
Perhaps the least discussed aspect of Demand’s business, but one that clearly is critical to its long term success, is the amount of data the company has on how people search, what they do once they do search, and what they do once they engage with a piece of content. This includes how they share it, where they go next, and so on. The ability to see those patterns, make products against them, and ultimately profit form them is at the heart of Demand’s model.
Given the size of Demand’s content network, its sophistication in terms of leveraging search data, and its ambition to be a larger brand player, I can see the company starting businesses in the data services field – should it decide to. Or it might, as Google does, keep that data for itself, and leverage it to its own end. Either way, I think it’s worth noting that there’s a hidden data gem in Demand’s business, one that will be a major asset as it negotiates acquisitions, new product developments, and business deals with the major players of the Internet Economy.
Demand’s bid for the public spotlight comes at a fascinating time for the world of content, navigation, and social media. It raises questions about the future models of search and social networks. Watch this one, and watch how leaders Google and Facebook respond to it.
Fortunately for us, Demand Media CEO Rosenblatt agreed to come speak at Web 2 prior to filing for the IPO. That means he can continue to be part of the event. You can register or request an invitation on the site here.
Back in the day, it was news when Google used its massive home page distribution to push its new Chrome browser.
Google putting ads on its home page?! A big deal, even if they were for Google’s own products. It spoke to an ongoing creep inside the company of leveraging its position in search to help it win in other markets, and to some, it felt like a violation of Google’s own principles in the process.
Well, it’d not be fair for me to at least point out that Microsoft is now doing the same thing, using its 11 or so points of share on Bing to push IE 8, its upgraded web browser (see upper right corner)
It’s also notable that as far as I can tell, Microsoft is only showing the promotion to users of Firefox and Chrome. I can’t see the ad on Safari, my native browser, so if a colleague (thanks GB) hadn’t pointed it out, I would have missed it entirely. Wonder why Microsoft is sparing the Safari crowd?
Indications of an Apple/Microsoft detente? The plot thickens…
Fred points out apps and services that are “Mobile First Web Second.” I don’t like the distinction. To me, it’s all the web. It’s this kind of thinking that leads to Wired’s ill-considered proclamation that “the Web is dead.” (I debate that in the second half of this thread here).
What, after all, is the web, really? To me, it’s a set of standards that allow for interconnection, sharing of experience and data, navigation between experiences, and a level playing field for anyone to create value. If we continue to see mobile as “different” from the web, we may lose the magic the web has evoked – the free and open platform which has allowed thousands of startups to bloom, many of which have changed the world, and, I hope, will continue to do so.
For more on this, read the Economist piece: A virtual counter-revolution. (Image at left is from that piece).
Earlier this week I mused out loud about retargeting, suggesting that perhaps it’s time for marketers to not just chase folks around the web in hopes they might irritate us into submission, but rather offer us the chance to politely say “Not right now, thanks.”
One of Searchblog’s readers turned out to be Josh McFarland, CEO of remarketing startup TellApart. He marshalled his team and within 24 hours had a working prototype integrated into his service. Here’s how it works, in his words:
Hi John –
Clicking on that [X] will disable remarketed ads from that advertiser, reloading the ad with a message that further allows the consumer to opt-out of TellApart targeting altogether (industry best-practice functionality):
This is now live for all TellApart Diapers.com ads, with the exception of 10% of the users which we use as a control baseline (to measure effects on CTR, conversion rates, etc.)
I applaude McFarland’s ability to quickly iterate and act on what he judges to be good input.
And he acknowledges, this is just version 1.0 of the functionality, executed within 24 hours of my original post. McFarland says he plans to add a lot more features. I think that’s needed, for both marketers as well as consumers – conversation is not just yes/no or off/on, and McFarland gets that.
From a follow up email exchange:
Here’s what we’re working on next, and we’re right in line with your thoughts:
1) Option of pausing the ad for the remainder of the time we predicted the user to be in-market for that retailer — instead of a straight, permanent opt-out.
We named our display ads application “Transactional Retargeting” in a nod to the fact that someone is in market for an item (our clients currently are pure-play e-tailers) for a limited window (5-12 days depending on the retailer’s avg consideration cycle), and most people leave a site without buying and never return during that window. Our job is to present those otherwise lost users with compelling ads (and sometimes offers) to get them to click back and transact… Transactional Retargeting drives higher conversion rates and incremental sales. This also means we only show users ads during those same 5-12 days. This modified “pause” functionality will allow users to stop ads for now but gives the merchant the ability to reconnect in the future.
2) Allowing more feedback as to why the user didn’t like the ad (a la Facebook)
3) A link to a much more informative page (about remarketing, TellApart, etc.) – which we are designing now.
One thing we have to balance, however, is the need to have the consumer rapidly choose one of three paths with the display ad: click through, ignore, or decline. Whereas other providers get paid for building overly complex ad widgets (with tabs, text content, tiny scrollbars, even purchase completion within ad), our goal is to definitively drive the user back to the retailer’s full site where they can re-engage with and complete their purchase.
Our business model couldn’t be simpler: we get paid a percentage of revenue for sales that result from a click through on a TellApart ad. That is the only way we make money. No sham view throughs or cost-per-ad-engagement; we drive clicks that convert. As ex-Googlers, it’s our DNA to start with a very hardcore DR approach, because when we can prove our system works under even the most brutal scrutiny (e-retailers managing ROI down to the penny), it will work for everyone (audience buying, brand campaigns, seasonal promotions, etc.)
Impressive. Expect more from TellApart soon, follow the company’s moves here.
One of the best cards in AOL’s difficult hand has been its search deal with Google, which was up for renewal this year. This morning the two companies announced (ahead of a December deadline) that they were staying together, though I can only imagine the folks at Bing didn’t make it easy. At the moment, only three parties know what Google paid – Google, AOL, and Microsoft, which knows at least what Google must have topped to win the deal.
Here’s the official release. Financial details are not disclosed, yet, but more will probably be available in future SEC filings.