I do believe there is a huge market to be made in adapting video to weblike channels… THE MESSAGE Gone in 30 Seconds The classic TV spot can’t dominate advertising much longer. Microsoft’s new MSN Video is bringing Web-based commercials to a computer monitor near you. By John Battelle, November…
I do believe there is a huge market to be made in adapting video to weblike channels…
Gone in 30 Seconds
The classic TV spot can’t dominate advertising much longer. Microsoft’s new MSN Video is bringing Web-based commercials to a computer monitor near you.
By John Battelle, November 2003 Issue
NOTE: This has been updated from the version published in the November 2003 issue of Business 2.0
Let’s consider a few fun stats. First, broadband has reached nearly 39 percent of all Internet-connected households and is expected to be in 79 percent in five years. Next, research firm In-Stat/MDR predicts that corporate spending on broadband content-delivery services, essential to high-quality video streaming on the Web, will almost triple by 2007. Third, the vast majority (72 percent) of work connections are high-speed. Throw in the forecast that TiVo-like devices will be in 20 percent of American homes (and certainly a higher percentage of wealthy ones) by 2007. And finally, 99 percent of homes with incomes over $100,000 have Net access, and it’s a safe bet that most of those have broadband connections.
Add it all together and here’s what it means: A massive broadband marketing opportunity is upon us — and, as a recent Yankee Group report concludes, the 30-second TV ad will soon lose top billing as our most valuable marketing vehicle. What will replace it? Web-based video advertising. (more via link below)
A longer piece on MSFT which came out of the news that Yahoo bought Overture. THE MESSAGE Mr. Gates and the Hunt for Search Yahoo’s grab for Overture seemed to outflank Microsoft. But wait: Bill’s search-engine strategy is not what everyone thinks. By John Battelle, September 2003 Issue Like TV…
A longer piece on MSFT which came out of the news that Yahoo bought Overture.
Mr. Gates and the Hunt for Search
Yahoo’s grab for Overture seemed to outflank Microsoft. But wait: Bill’s search-engine strategy is not what everyone thinks.
By John Battelle, September 2003 Issue
Like TV broadcasting and the automobile business before it, the Internet media industry has now resolved to the Rule of Three. Of the scores of companies that battled for dominance in the 1990s, only Yahoo (YHOO), Microsoft (MSFT), and Google remain serious contenders. They, along with AOL (AOL), own the lion’s share of Internet advertising and worldwide English-language traffic. Yahoo’s recent acquisition of Overture (OVER) reaffirms, if the idea needed reaffirming, that Internet media obeys the same urge to consolidate as every other industry.
It proves something else, too, about this phase of the Internet’s evolution. The key driver is no longer content, but intent. The business is no longer about selling advertisers the eyeballs you’ve caught with news, images, games, and the like. It’s about selling users at the moment they make their online desires known through their search queries. In plain terms, the engine of Internet media is once again search. (That, by the way, is why I’m leaving AOL out of this discussion. Preoccupied with many other problems, the dial-up giant — a corporate sibling of this magazine — is leaving its search functions to Google.)
Search will account for more than $2 billion in advertising sales this year. It’s predicted to grow at 35 percent annually, to nearly $7 billion by 2007, according to U.S. Bancorp Piper Jaffray. Beyond the numbers, search has become the most important commercial application on the Web. Not only is it the defining task of any portal, but it’s also the preferred doorway into e-tailers like Amazon (AMZN), as well as auto, home, and dating sites. An online consumer business can no longer afford to have poor search capabilities.
By the middle of last year, both MSN and Yahoo had realized that they needed to rethink their search strategies. To profit from search, a company needs three elements, all of which Google already had. First, you must have high-quality “algorithmic” search, which attempts to match users perfectly with what they’re seeking. For years MSN and Yahoo have outsourced algorithmic search to companies such as Inktomi and Google. Second, you need a paid search network, which allows you to display links to paying advertisers alongside your editorial results. Both MSN and Yahoo had outsourced this to Overture. And third, you need your own distribution. In other words, you must own the site where the consumer makes his or her query and the results are displayed. Until recently this was the only element that either Yahoo or MSN truly owned.
By buying Inktomi last December and then Overture in July, Yahoo has taken control of the two missing elements, which arguably leaves MSN in the worst position of the Big Three. Besides having the only site of the three that is consistently unprofitable, it is outsourcing both its algorithmic and its paid search technology to a major competitor. Not exactly an ideal situation.
But aside from Netscape’s early investors, not many people have ever gotten rich by underestimating Microsoft. (more via link below)
Think you control your own entertainment system? Think again. THE MESSAGE Don’t Stifle Progress A number of states are trying to do what the federal government couldn’t: Kill innovation on the broadband Internet. By John Battelle, August 2003 Issue What if it were illegal to connect your computer to the…
Think you control your own entertainment system? Think again.
Don’t Stifle Progress
A number of states are trying to do what the federal government couldn’t: Kill innovation on the broadband Internet.
By John Battelle, August 2003 Issue
What if it were illegal to connect your computer to the Internet without asking permission? It seems unthinkable, but an ongoing legislative imbroglio has brought that very question to the fore.
The fight pits the cable industry and (surprise!) the Motion Picture Association of America against a battery of consumer and civil liberties groups. It revolves around a set of bills that opponents have labeled “Super DMCAs” — state-level legislation modeled on the much-reviled federal Digital Millennium Copyright Act of 1998.
During the past 36 months, these bills have been passed in the legislatures of seven states, including Michigan and Pennsylvania, with nine more waiting in the wings. In each case, the legislation is cloaked in the seemingly benign language of preventing cable signal theft and has been quietly fed to a somnambulating legislative body. But all of these bills also contain extraordinary language that gives the access industry (cable, satellite, and phone) complete control over what devices you can connect to their broadband networks. They also make many things we take for granted — such as anonymity, firewalls, even instant messaging — potentially illegal.
In other words, these bills could create “early lockdown” of the broadband Internet, meaning that every aspect of how the network is used could be dictated by the access provider. And when the rules governing a robust system prevent innovation and favor one set of players above all others, the system withers. Even the Internet.
(more via link below)
Open source search – in an age where innovation is increasingly silo'd in large companies, this is a good idea whose time has come. I didn't like the "watch out" angle, but…it gets a reader's interest. THE MESSAGE Watch Out, Google Nutch could rewrite the rules of search development –…
Open source search – in an age where innovation is increasingly silo’d in large companies, this is a good idea whose time has come. I didn’t like the “watch out” angle, but…it gets a reader’s interest.
Watch Out, Google
Nutch could rewrite the rules of search development — especially with an impressive roster of Internet luminaries now lining up behind it.
By John Battelle, August 08, 2003 (Web Special)
Ask anyone in Silicon Valley what the hottest application on the Internet is today and you can bet their answer will be search. The dealmaking has been nothing short of torrid. Only a year ago there were at least half a dozen major players. Now there are just three: Yahoo (YHOO), which last month bought search giant Overture (OVER) in a $1.6 billion deal; Google, the undisputed king of search; and Microsoft (MSFT), which is busy building a search platform of its own. They’re all fighting to dominate the huge and ballooning market, already worth $2 billion and expected to generate between $6 billion and $8 billion in revenues by 2007.
Search is a game of intellectual property, innovation, and market position. The three combatants all keep jealous watch over their patents (Yahoo, for one, has more than 60), engineering talent (hundreds of Ph.D. holders work at Google), and market advantages (Microsoft — need we say more?). Indeed, search is such a complicated and expensive undertaking that analysts have pegged the cost of market entry at well over $100 million.
All that could change this fall, when a new player strides onto the field.
(more via link below)
When I saw this ad, I knew I was watching the future of online video advertising unfold. THE MESSAGE Downloading the Future of TV Advertising With a plink and a plunk and 86 moving parts, Honda reminds the ad world of the value of great content — and teaches…
When I saw this ad, I knew I was watching the future of online video advertising unfold.
Downloading the Future of TV Advertising
With a plink and a plunk and 86 moving parts, Honda reminds the ad world of the value of great content — and teaches it something about the power of interactivity.
By John Battelle, July 2003 Issue
In April 2003, Honda U.K. debuted an extraordinary two-minute television advertisement called “Cog.”Through the simple act of releasing a remarkable television commercial onto the Web, the U.K. wing of automobile giant Honda (HMC) has unleashed something of a typhoon in the advertising business. Though it has yet to fully play out, Honda’s ad proves the value of content and could stand as a turning point in the history of the television spot — proof that interactivity won’t kill television advertising, as many are now predicting, but may instead be instrumental in saving it.
Back in April, Honda U.K. debuted an extraordinary two-minute television advertisement called “Cog.” Aired only in the United Kingdom, the film — and that really is the best term for it — is a Rube Goldbergian ballet, a synchronized dance of 86 distinct parts from a Honda Accord that roll, pirouette, and fly along the floor in a mesmerizing production of meticulously intended consequence. The spot begins with a sequence of three cogs rolling along a plank; one falls to the floor, and a cam shaft rolls, setting an exhaust tube slowly spinning, which knocks three precisely placed grommets down the slope of a hood, and so on. (Download the ad for yourself at Honda UK.)
(more via link below)
Oh, if only we had this three years ago, at thestandard.com… THE MESSAGE Putting Online Ads in Context Overture and Google have figured out how to sell the Web. Paid search has already saved Yahoo — and your business might be next. By John Battelle, June 2003 Issue The long-awaited…
Putting Online Ads in Context
Overture and Google have figured out how to sell the Web. Paid search has already saved Yahoo — and your business might be next.
By John Battelle, June 2003 Issue
The long-awaited “30-second spot for the Web” — a way for ads to finally work online – may well be at hand. Overture (OVER), the company some say saved Yahoo’s (YHOO) bacon, will shortly roll out a service that opens up the entire Web to a new form of advertising. “It’s potentially revolutionary,” says Scott Moore, who oversees Slate and MSNBC.com for Microsoft (MSFT). How revolutionary? Moore says using Overture’s new service, or one like it, could well push his sites to sustained profitability.
The breakthrough, which I’ll call “contextual advertising,” involves commercial links that appear adjacent to relevant content on websites. Say you’re at Caranddriver.com, reading a review of the Acura MDX. In place of banners for everything from cell phones to cars you don’t care about, you would see paid text links advertising the Acura website, the Edmunds auto comparison site, and leasing companies vying for your business. These are the same links you’d see if you typed “Acura MDX” into Overture’s client portals, like MSN or Yahoo.
Google also plays in this new market with an offering called “content-targeted advertising.” The beauty of both is their ease of use for publishers: Overture and Google automatically analyze the publishers’ pages and insert relevant links on the fly. All the publishers have to do is collect a check. It’s close to manna from heaven.
(more by clicking on link below)
For this piece, I daydreamed about how TiVo might be saved by Steve Jobs. I wish this were the case. With cable coming on strong, I am not feeling so cheery about TiVo's chances. THE MESSAGE Is TiVo NeXT? The beleaguered personal video recorder company is ripe for an…
For this piece, I daydreamed about how TiVo might be saved by Steve Jobs. I wish this were the case. With cable coming on strong, I am not feeling so cheery about TiVo’s chances.
Is TiVo NeXT?
The beleaguered personal video recorder company is ripe for an Apple takeover.
By John Battelle, May 2003 Issue
Everyone who has TiVo (TIVO) loves TiVo; it is to television what Macintosh was to computing — a revelation. Which is exactly why Apple (AAPL) should buy TiVo and once again redefine the intersection of culture and technology.
Folks love TiVo for the same reason they loved the Mac in 1984 and the iPod in 2001: It gives control back to the end user. TiVo viewers call the shots regarding when, how, and — soon — even where they watch. Once content or access is purchased, the end user is in charge, just like with the iPod.
But unlike the iPod, TiVo and systems like it are in serious trouble. The culprit is the entertainment industry. TiVo has an abeyant Napster-like quality — and the content business is scared silly that it will not only destroy advertising revenues but become the platform for video swapping on the Internet. Case in point: A coalition of entertainment companies recently sued TiVo competitor Sonicblue into bankruptcy.
(more by clicking on link below)
I wrote this a year ago (there's a three-month lag from writing to pub date with monthly magazines). I was sick of the press hammering the internet, with the presumption that everything we did over the past four years was a waste. Turns out, it wasn't. THE MESSAGE Alive and…
I wrote this a year ago (there’s a three-month lag from writing to pub date with monthly magazines). I was sick of the press hammering the internet, with the presumption that everything we did over the past four years was a waste. Turns out, it wasn’t.
Alive and Well
From content providers to dog-food retailers, Internet business has moved to a new stage of stable growth. That’s the real story — so why aren’t we hearing it?
By John Battelle, March 2003 Issue
Any avid reader of the business press has seen endless variations on this tired theme: Internet business is dead. It was all a dot-con, and it dot-bombed.
Eager for an easy target and brimming with schadenfreude, many business reporters (and a few opportunistic book authors) continue to tear down the Net with nearly the same enthusiasm they displayed while building it up. But the facts tell a different story.
Let’s start with the flashing VCR clock of all dot-bomb maxims, the Internet pet-food industry. There’s no better proof of dotcom stupidity than the fact that venture capitalists funded not one but at least four pet-food websites at the same time. Thank God for us all, they are dead.
Except … they’re not. In fact, type “buy pet food” into Google and you’ll get scores of active merchants selling pet food online. I put in a call to one of them, Geoffrey Walker, CEO of PetFoodDirect.com. Surprise: His business grew 22 percent last year, and he expects similar growth this year. In fact, he and his three or four biggest competitors — yup, there are still that many players in this category — are all doing well. As for Pets.com, the now-defunct Sock Puppet company, Walker is thrilled about all that exposure, which let consumers know that they no longer had to lug around 40-pound bags of kibble. Pets.com now redirects to Petsmart (PETM), whose stock price has rung up a 44 percent increase since a year ago. Woof! (for more click link below)
Yeah, I've been threatening to post the past year's Business 2.0 columns, and I'm about to start. I've decided to post then in sequence as full text posts to the home page, then classify them as "Columns" using Moveable Type's "Categories" tools. That way, once they've moved off the home…
Yeah, I’ve been threatening to post the past year’s Business 2.0 columns, and I’m about to start. I’ve decided to post then in sequence as full text posts to the home page, then classify them as “Columns” using Moveable Type’s “Categories” tools. That way, once they’ve moved off the home page, they will live forever under a “Columns” link on the left. This way, future columns can be posted and added to the list automatically.
(As long as I’m posting site notes, if you can’t see a picture in the upper left hand corner, make your browser wider by pulling the lower right hand corner to the right till the picture shows up….ahh, that’s better).
So take note, a blizzard of posts (well, about a dozen or so) will follow, and you may want to simply ignore them for the next little while.