Yes, I’m at it again, but this year I promise to be a bit more pared down, a bit more to the point. I had nearly 20 predictions last year, I’m hoping that by the time I lift my fingers from the keyboard I’ll have a few less. So Happy New Year, and to business:
1. Thanks to Google’s dominance in search and media and a complacent DOJ, Microsoft will buy a better position in online media. Acknowledging that it can’t build it, Microsoft will shop its way into a dominant position. AOL, Yahoo, or IAC will be leading candidates for acquisition. Microsoft will name a strong second in command to Steve Ballmer who will run their entire media division after this acquisition. If that person is not Steve Berkowitz, he will leave.
1. (a) If Microsoft does not buy AOL, Yahoo will, and failing that, AOL will go public, but the IPO will receive a lukewarm review.
2. A major media outlet will predict that the “Web 2.0” bubble has burst or deflated seriously. The prediction will be wrong. I’ve been seeing more and more respected voices out there claiming we’re in a bubble of some sort or another when it comes to “Web 2.0.” I predicted that the meme will have played out in 2006, and I think I was right, but the underlying foundational strength of what created that meme is far too strong to be a bubble or played out.
3. Google will integrate YouTube into its main services. YouTube will be promoted via the “video” tab on Google’s home page. YouTube will keeps its name and domain, but the business/sales end will be interchangeable.
4. Related to this, Google Video Ads will dissappoint until Q4 2007. Why? Because advertisers in video have all sorts of structural reasons to not want to work the way Google wants them to work. Until the Fall of 07, when these differences will be worked out, and Google will have a slam dunk quarter in a form of advertising outside of text ads for the first time in its history.
5. Yahoo will not regain its luster, but will take the steps necessary to do so by the end of the year. I am not seeing anything out of Yahoo that says “radical change.” There is a lot riding on Panama, but even an excellent new platform needs at least a year to get its footing. Hence, I would not predict a banner year for Yahoo, but a rebuilding year, sort of like the 49ers had this year.
6. eBay will have a major change in executive leadership. This feels overdue.
7. Amazon will continue to push beyond ecommerce into web services, the market will punish it for doing so, and by the end of the year Bezos will be forced to defend his investments as his stock takes a hit for those services’ failing to find traction. It’s not that I don’t believe in Jeff’s vision, it’s the track record with things like Alexa and the very real sense I have that the market for what Jeff’s selling is not yet fully baked.
8. There will be a brief, somewhat irrational spurt of acquisitions related to “content”, in particular independent media sites with good demographics and a decent audience profile. I say irrational because by the end of the year, it will be clear why those sites were independent in the first place.
9. Speaking of the content business, it will face a major test as two forces converge to undermine the pageview model: Ajax, on the one hand, and ad blockers on the other. Both will be addressed with alarm and alacrity by industry efforts. By the end of the year, new metrics will emerge to help publishers and marketers understand audience engagement.
10. “Blog 2.0” will become a reality. By this I mean that Version 1.0 blogsites, of which I think Searchblog is a good example, will begin to look dated and fade in comparison to sites that employ better approaches to content management, navigation, intelligent widgets and web services, etc.
11. One major Internet player will really screw up the privacy/trust issue, in a way bigger than even AOL did last year.
12. The Google founders will find themselves the subject of at least one major “takedown” piece in the mainstream media. The piece will claim they have lost touch with the company they founded, that it has outgrown them, and that they have become enamored of the life of the super wealthy – hobnobbing with stars, flying to exotic locations to kite surf, testing fighter jets and the like. This piece is inevitable, in my view.
13. Allow me, for the third year now, to repeat my mobile prediction in the hope it will come true: Mobile will finally be plugged into the web in a way that makes sense for the average user and a major mobile innovation – the kind that makes us all say – Jeez that was obvious – will occur. At the core of this innovation will be the concept of search. The outlines of such an innovation: it’ll be a way for mobile users to gather the unstructured data they leverage every day while talking on the phone and make it useful to their personal web (including email and RSS, in particular). And it will be a business that looks and feels like a Web 2.0 business – leveraging iterative web development practices, open APIs, and innovation in assembly – that makes the leap.
14. Lastly, I will begin work on my second book. Yes, I have an idea…but it’s not entirely fleshed out yet… and, I will stop making predictions about FM. It was fine to do last year, but this year, I feel like the business is in a new place, one that feels wrong to predict. It could go in so many great directions this year, I don’t want to jinx any of them.
Happy New Year to you all, and here’s to a great 2007!