Predictions 08: How Did I Do?

Related:

2007 Predictions

2007 How I Did

2006 Predictions

2006 How I Did

2005 Predictions

2005 How I Did

2004 Predictions

2004 How I Did

Reading over my predictions for 2008, I was struck with one thing: It wasn’t a list. It was more of a narrative, making decoding how I did that much more difficult. After the narrative, I focused on the biggies – Google, Yahoo, Facebook, Microsoft, AOL, and Newscorp/FIM. I’ll have to keep that in mind when I post my predictions for 2009 on Jan 1 next year.

So to the task. I first made a list from the narrative, then went back and noted how I did under each item. I think on average, I did pretty well:

1. (On online advertising) I’m going to buck all my colleagues fears, however, and predict that web-based advertising businesses will in fact enjoy significant gains in 2008. These gains, however, will not be evenly distributed.

I think this proved to be true. At least through Q3 2008, online advertising continued double digit year to year growth. Q3 was slower, to be sure, at 11%, but I think we’ll end the year with “significant gains.” Next year, well, that’s going to be another story, but we’ll get to that in my predictions 09 post.

2. It will not be an easy market for major public debuts. But we will see at least one, if not two new IPOs.

I got this partially right. The first part of the sentence was clearly correct. And the second, well, there were a couple new Internet/Tech related IPOs, including RackSpace (price in early August) and ArcSight (enterprise IT, priced in Feb), but they were certainly not in areas I’d call central to what I like to write about, or predicted (see below – I suggested that if the market allowed some big companies might spin assets out (it didn’t and they didn’t)).

3. 2008 will also be seen as the year that proves Conversational Marketing as a new form of advertising

I think this was absolutely accurate. For more on that, see the FM Blog, Chas’s site (FM’s Publisher), and the case studies and writings of scores of folks, including David Armano, David Churbuck, Deb Schultz, Shel Israel, Seth Godin, and of course, all the brands on Twitter.

4. 2008 will be the year of integration indigestion for the majors, and as such, it will mean M&A will slow down for those companies. All those advertising-based acquisitions in 2006-7 will have to start to pay off, and the results will be uneven to say the least.

I think this is pretty accurate. Sure, the majors made acquisitions, but nothing like what we saw in 2007. AOL did buy Bebo. But as for ad plays, results have been very uneven for Yahoo (Right Media, Blue Lithium, etc), and Microsoft (aQuantive, etc). Google seems to be doing better with DoubleClick, and it remains to be seen what AOL can do with Bebo and its earlier acquisition of Tacoda. Advertising.com continues to be a bright spot for the company.

5. …continued erosion of the traditional mobile oligarchy. But despite the best efforts of Android, not much will get done this year

Well, we saw a phone, but it hasn’t lit the world on fire. Google is using them as employee gifts instead of cash this year.

6. As for the Web 2 world, we’ll see a ton of venture funded companies go by the wayside

Yep.

7. We’ll also see an uptick in acquisitions, as the boards of companies that that thought they were worth tens or hundreds of millions of dollars decide to settle for decent returns.

Also true, but I sense I was a bit early on this. I think this will happen more next year.

Now for the company specific predictions. First, Google:

1. 2008 will be the year Wall Street gets frustrated with Google.

Sometimes, a picture says it best:

It’s clear the bloom came off the Google Wall St. rose in 2008.

2. Google will continue to struggle with its display advertising business, at least as it is traditionally understood, in part due to a culture conflict between its engineering-based roots and the thousands of media-saavy sales and marketing folks the company has hired in the past two years

I think this clearly occurred (note Armstrong’s acknowledgement of this issue here, Comscore noted that Google had just 1.5% of the display market by June), but with the appointment of David Rosenblatt as President, Display, I expect the conflict to be resolved, at least temporarily. I do not believe, however, that this issue is anywhere near off the table. To do display right, you have to act like a publisher.

Yahoo:

1. Yahoo, meanwhile, will spend most of 2008 trying to figure out what to do with what it bought in 2007, and attempting to articulate a strategy that is anything but “we have 500 million users, so we must be important.” By mid year, it will have succeeded.

Well, I was right about the first part, and very, very wrong about the second. I guess I was just too optimistic that Yahoo would get its shit together by mid year. Both the bear hug that was the lost Microsoft deal, and then the goat rodeo that was the lost Google deal, killed any clarity at Yahoo. But I do believe there is a comeback story to be written there. It just won’t be Jerry writing it.

2. By year’s end, Yahoo will have combined in a major way with another third party, and it won’t be either [Microsoft or Google].

In a funny way, I was right about the key part here – that Yahoo would NOT combine with either Microsoft or Google, though it clearly tried to do both. I was intonnating it might combine with another biggie, and the one I had in mind was AOL. This almost happened by year’s end (hey, there are a few more days…) and clearly I think WILL happen early next year – Yahoo needs a CEO first, most insiders agree.

Microsoft:

1. Microsoft will fail to gain much traction in anything that is Web related

I think I nailed this one.

2. In 2008, Microsoft will finally figure out what do to with aQuantive, and by the end of the year, it will be clear what the company must do with it: Let it free.

While I am not sure I nailed this one, the key folks at aQuantive did leave recently, and what I’ve heard about the integration there lead me to believe this could have happened, but now, I think Microsoft is committed to the platform it is building off the service.



Facebook:

1. First, the company will suffer from a serious identity crisis, as it realizes it must change its core DNA from tech- and founder-focused startup to media-focused Real Company with Lots of Employees

This one is really hard to prove, but I think it’s arguably very true. All the anecdotes I’ve heard about the company in the past year (the employee stock repricings, the rumors of a hiring freeze, early founders leaving, etc.) point to this conclusion.

2. the company will find itself stuck in the hell of pre IPO preparations, again, like Google in 2003-4. This will frustrate company leaders to the point of looking for a CEO whose job is, in essence, to talk to Wall Street. But until Facebook figures out a way to justify its lofty valuation, this hire will be stymied.

I think the markets let Facebook off the hook on this issue, for this year. I asked Mark about his role as CEO at Web 2, and he seemed content to stay in the position. Instead, he brought in Sheryl Sandberg from Google. However, if Facebook wants to go public late next year (assuming a recovery), I think this will remain an issue.

3. the most important short term focus for the company in 2008 will be solving for the Social Ads quandry. (By this I mean how to build the equivalent of a AdWords and AdSense for the “social graph.”) Though it will take promising steps, the company will fail to get it just right, at least by the end of the year and all by itself, but it will still find itself profitable and on the path toward an 2009 IPO

I think I got this right. However, I have no idea if the company is profitable anymore. It was a year ago, but it’s hard to say now. I do know the company has not significantly grown its employee base (it’s at around 7-800), but the service itself is growing very, very quickly, and all those servers are damn expensive. I think Facebook stands on the brink of solving the social ads issue, but it has yet to do so. Facebook Connect is key to this. We’ll know a lot more when and if we see a public filing next year.

4. By mid 2008, there will be very serious rumors about an acquisition battle over the company between Google and Microsoft. But Facebook will play the middle, and most likely cut a deal with a third party, which despite the strong relationship with Microsoft, could well be Yahoo or a smaller but growing company that looks a lot like Facebook.

Always the subject of takeover rumors wrt MSFT and GOOG, Facebook worked very hard to make me look like a genius when it tried to acquire Twitter last month. Alas, Evan decided to make this prediction a tantalizing “almost.”

AOL:

1. Platform A will go public, if the markets allow. The rest of AOL will be sold or folded into Time Warner in ways that, regrettably, will finally signal the end of the original Case-ian dream.

Markets did NOT allow. And for now, AOL remains a continual cultural thorn in the side of a rapidly deflating Time Warner. We’ll see if Yahoo and Time Warner can agree on the right price/structure to put the two companies together.

Newscorp/FIM:

1. Major problems will become apparent by early in the year, and those problems have to do with structure: Who is really in charge of “Fox Interactive”, and what does that mean?…. There will be a battle for control over all of Newscorp’s interactive assets, one that will limit the company’s ability to execute any clear strategy. That said, MySpace will make a comeback of sorts, and look for it to…

I have to admit, I have no idea if this prediction was true, as I was not close to the company’s internal issues this past year. Any readers have insight? In any case, the lack of a clear strategy was, well, quite clear until it….

2. …cut a very important deal in 2008 with regard to its future.

…until MySpace finally cemented its play in the music space, its core driver, in an very strong move to battle iTunes. It took a while to get a CEO, but that was announced last month as well.

And lastly, my personal prediction:

1. I will be back at work on a book, at least a couple days a week, by mid year. This is simply too important for me to ignore, it’s literally a physical urge I feel now. 2008 will be the year it becomes real for me.

While I wrote a fair amount on the topic of the new book in the past year, in particular in partnership with FM’s clients like American Express, Reuters, and Looksmart, I really did not make any progress here. I am quite unhappy about this, but not defeated. I have plans to figure out how to do this in 09. Really.

Well, that’s my scorecard. I think I got more right than wrong.

How do you think I did?