Just the Facts: Dispelling the RSS, Blog, and Openness Myth
Almost 3 month ago, on a trip out to Korea, Joi Ito wondered why the blogosphere in Korea is so different from the ones out in the US. In the post, he noted how “closed” their blogosphere was compared to the US. He mentioned that RSS and Trackback were non-existent. And that blogs only link to each other (and back) using the tools and functionalities that the blog aggregators provided, essentially creating a “walled garden” around its own community. Furthermore, the idea that people only blogged for the immediate circle of friends rather than a general “readership” was odd to Joi too.
Of course, the ensuing conversation in the comments section attributed the cause to cultural tendencies, industry concentration, ease of use etc. (more here and here) Or even worse, that the Koreans “simply don’t get it” . . . ie that in the web 2.0 world they should be using an open architecture because …. because its “better” and its “the right thing to do.”
Well in the last few weeks with all the buzz around blogging, RSS and their respective popularity, diffusion, adoption, awareness etc etc. . . I think we can say that we have a definite sampling issue on our hands. In effect, those in the “technorati” circle (me included) have yet to venture out to and truly live sex chat experience the “other side of the blogosphere” as experienced by the general public.
NetRatings released a report that finally had people questioning the pervasiveness of RSS (and openness) of blog. Whether it is awareness, availability, or usage, the blogosphere is not as “open” as Joi had initially thought in the US. Brad Burnham talks about this sampling problem from the perspective of VC’s in his RSS Geeks Only Please post with a few more follow-ups here, here and here.
Without any number its hard to draw much conclusion as most are simply anecdotal or expressed (surveyed) evidence. . . .so I set out to surf the web to get some #’s. Here is what I came up with . . . and its quite shocking to me in fact.
The RSS-less blog world mainly includes Xanga, LiveJournal, and MySpace. (Myspace is more blogs than social networking, just go check it out)
The RSS-enabled world consists of TypePad, Blogger, Blogspot. (actually more like a % the total since not all RSS feeds are enabled, but for this lets be conservative and assume all these blog are RSS enabled.)
Now the shocking part. . . I found pageview data for July for these sites. . .
Xanga+LiveJournal = 1.6M Pageviews
Xanga+LiveJournal+Myspace = 8.9M Pageviews
Typepad+Blogger+Blogspot = 265K Pageviews
Including Myspace, the RSS-less camp has over 33X the pageviews of the RSS-enabled camp. And around 6X without Myspace.
Now even if there are an equal number of RSS blogs are not hosted by typepad, blogger, and blogspot, the RSS-less world still overwhelms RSS-enabled.
I guess our blogosphere is not so different from that of Korea after all. Look around Xanga or LiveJournal. . . people are simply blogging about their lives to friends and family . . . no annoying meme’s or debates . . . no one trying to get anyone fired . . .
So what does this say about RSS? Well, its hard to use and not as popular as people thought. Lots of work needs to be done to help it “cross-the-chasm.” I have no doubt that it will one day be a fundamental livejasmin technology of web 2.0; but for now, some one need to work on RSS user friendliness for the Joe Q Public. Oh and we need to get some data (with big enough sample) before drawing random conclusions.
Back in 2000, Clay Shirky wrote a seminal piece against micropayments.
Time have changed however. The hottest topic right now is revenue share with content providers. Pete Cashmore has the latest on the Shoposphere rev share story - with inspirations from Kevin Burton and TechCrunch. This time it is no longer about will READERS pay for content. They are free to read whatever they want for nothing. The advertisers themselves are not paying in micro-chunks either. . . no they are spending colletively billions on search advertising. . . so who are the ones getting paid in a few cent or dollar at a time? The so called “slaves” who graciously fill blogs and whatever social networks full of content will get paid based on ad clicks they generate.
So then, the better question Shirk would have asked today is. . . Will these content generators want to get recieve $.96 a month from 15 different sites on 15 different checks? Of course not. I rather you pay me one large check. . . better yet . . . I hate going to the bank so acrue it till its atleast $20 before sending it to me. . . or even better yet. . . ACH it to my bank account directly. . . As a blogger I know how LITTLE google is actually paying me. So if I actually have one of these random “pick lists” that should be about the amount I am expecting, so I think the use case is completely reasonable.
To do everything above, you need a micropayment micro-commission system. If I was paypal (which I kinda am :) ) I’m licking my chops right now for a chance to dominate this jasminlive market. . . and for bitpass, yahoo wallet (eek), or google wallet (forgone conclusion it coming out), I’m thanking god for the latest turn of the events. . .
If I was an entrepreneur (I think I am), I’m letting the newsvines, shopospheres, fotolia (sp?) of the world work on their little niches. . . I’m gonna go sell pans and shovels to the gold rushers instead. . . ie provide the infrastructure to make this all happen. My pre-money starts at $12M . . .just like 4info
Achilles Heel(s) of Vertical Search Applications
Vertical search engines add value to the END USERS in two main ways . . . creating semantics around data (metadata) and using those meta data to enable a more interactive search experience (which hopefully translates to higher relevancy). As Google become smarter and smarter around solving both problems (look at froogle and google local), vertical search engine are beginning to feel the crunch. In any industry the natural response to competition coming from a horizontal player is to move up the value chain in order to focus on the entire end user experience using integration as the main competitive weapon.
For content providers, the main value proposition of vertical search engine is simply traffic. The problem with vertical search engines is that most of them do not have the traffic scale of Google to be able to hold content owner hostage - preventing site owners from closing their site to search engines despite of the obvious threat of dis-intermediation. Om has taken up the torch in grilling these guys on this topic at the Search SIG and no one have a good response. (mp3 here). Again, the “out” for vertical search engines is to go the “application” route. The hope is to convince the content owners that veritcal search is creating an application ontop of their content rather than simply adding value through aggregation (which translates to disintermediation).
At SDForum’s Search SIG , a lot of vertical search engines are beginning to reposition themselves for the incoming onslaught by calling themselves vertical search application. Giving credit where its due, Dave McClure of SimplyHired has championed this cause since the very beginning before other players jumped on the bandwagon. His comment in John Battelle’s Service to Application post is characteristic of his usual stance.
There is two major problems with the vertical search application angle. (both could be overcome but still an issue).
1. From the end user perspective, having an more “inter-active” experience is not neccessarily important. Anyone who have been building search engines know that users rarely “interact” with search engines. Perhaps Google have trained searchers to be instantaneously critical but users rarely go beyond the first few page of a search result and rarely do more than hit “next page” What this means is that all the semantics that the vertical players have created around the data is only good for the user to evaluate relevancy but not to IMPROVE relevancy. Users are not likely to learn to click on functionalities to filter and re-rank search results. Perhaps Ajax will solve this problem in the future by improving user friendliness, but for now, this is a serious concern for many vertical search players. That despite their effots to add more application functionality around the search engine, the users refuse to see it as an application.
2. The content providers themselves also want to be application providers. Old school offline content owners are adept at repackaging data and selling them through multiple channels and formats. Building applications will be the obvious growth strategy for jump starting thier flat revenue base and/or stock price. The online content owners will also have to learn to do so to survive. Perhaps a few of the vertical search app providers will be acquired strictly for this purpose, but these players generally do not have the equity or cash horde to be able to pay for premiums of internet acquisitions.
Perhaps there is hope for the vertical search app companies, but I think the answer lies not in search applications BUT in “transaction” applications. Look at eBay, without paypal, it would look not so different to a vertical search app/engine. But with paypal, eBay is a much more valuable and defensible. Moving beyond solving “dicovery” issues to “settlement” efficiency could be the next phase of growth for vertical search apps. . . but again. . . they will run up against web 1.0 startups that already do both (ie. simplyhired versus. monster).
The End of Google’s Innocence?
Google was (and still is) the type of company that proud itself in being one of the few companies in the world where most of the management and strategic decisions are made bottoms up . . . by engineers and managers who are closest to cutting edge technology and users. This was so much so that when Eric Schmidt formed the “corporate strategy” group within Google, it was named Business Operations instead to quell concerns within the company that an elite group of ex-MBA’s and strategy consultants will instead determine the fate of a company that previously had been havens for engineers and alpha-geeks. (Biz Ops as the group is called internally is quite a cryptic set of meaningless words . . . if I saw that on a business card, I would have thought of customer service, IT, or some sort of project/process management group if I didn’t know better)
Only 12 month ago, Google was the type of company that went out and acquired relatively obscure technology leaders like Keyhole and Picasa. I bet those acquisition were driven by Google engineers trying to solve technical problems for a product they want to launch and eventually decide it would be better to acquire rather than build or buy. The idea then bubbled up to some executive who championed the purchase. Since the acquisition cost was relatively cheap, this model was entirely feasible.
Times have changed; however . . . Google is growing up rapidly in front of our eyes. Today these Biz Ops guys are stumping around the Valley, Virginia, Redmond, Beijing, Luxembourg and all across the world looking to put Google’s $100B (close enough) market cap to work. They are not talking some tiny hundred million dollar acquisition . . . no, these guys are rumored to be buying everything from Skype, AOL, to TIVO. . . really anything and everything. Whenever there is an auction for a technology or media company any where in world, these guys will be there waiting to give away some funny money. In short, they are no different than any other large company in the world run amuck with MBA’s trying to take over the world in one swoop and moving on to the next target with little remorse or thought.
The “old” Google is still alive and well, but “new” Google is growing stronger everyday . . . there really is no turning back. If Google wants to play with the big boys, this is the road they need to walk down . . . with the tacit understanding (resignation?) that innovation and product development will not get them where they need to be . . . that they cannot corner the market on talent and innovation, try as they may. That incumbent market share, experience, relationships, and knowledge still meant for something. That PageRank COULD be the only time in Google’s lifetime a disruptive technology they created turned an industry upside down. As most companies have learned by now, you stack the deck in your favor any way you can . . . and if that means using some stock to your advantage, then so be it. Google is a two headed beast now, even if they tried to hide one of them with some innocuous sounding business cards . . . it remain to be seen if the two heads will get along or the infinitely noble and envious bottoms-up culture and ecology will become the victim of Google’s own growth spurt . . . Really no different than every single start-up turned gorilla in the last 50 years . . .
Spam, Spit, and now Sbots - AOL Thinking Small Again
Last week I loaded up my AIM and got the following mesage
"AIM added a new AIM Bots Group to your Buddy List Send IM to moviefone and shoppingbuddy for great holiday flicks and gift ideas"
I looked around the blogosphere to find out if I was the only one and found this post on PaidContent which referenced a WSJ article. After confirming it was from AOL and not some random IM spam I was pretty confused . . . I IM’ed with the bots for a while, and came to two conclusions . . .
1. hey thats pretty cool. . .
2. damn AOL is fucking around with my buddy list . . . if there ever was a egregious violation of privacy/trust this is it
Ideas like these bots have been around since bubble 1.0 but the “warn” feature in AIM prevented scalable implementation of these applications since anyone (including competitors) could shut down a bot app. AOL, being the draconian walled garden enterprise that it was, refused to open up their API to allow “certified” bots to be built that could not be “warned.” As a result, a slew of entrepreneurs threw away their business plans and went after some sort of 2.0 opportunities instead.
Instead of railing on AOL for being a “sbot” master, I’m going to take another (perhaps more harsh) approach. That is . . . I can’t believe AOL hasn’t learned its lesson from the last 5 years. After squandering the chance to kick MSN’s ass and failing to realize that it already is what Yahoo! hopes to but may never become . . . (nothing on Google . . . we all fucked up on that one) . . . its following a web 1.0, proprietary approach to interactive IM again. . . ie . . AOL is thinking way too small and way too closed . . . Is virginia really this far from the valley that these guys just dont get it?
This is what I think AOL should do with this market opportunity
1. Open up the AIM API
2. Build hosting infrastructure (open not proprietary) for IM bots (with slews of technical backends - jboss, php, ruby on rails etc)
3. Build a certification, re-certification, and dispute resolution system (think Verisign + Truste + whitelist infrastructure) for bots
4. Create a simple to use “if-then-like” XML based language for creating simple bots (but still support standard rest and/or soap interconnects for more advanced apps) and simple web based development enviroment (like wordpress is for content)
5. Charge for hosting (which is optional) and the certification system
6. Build a marketplace for discovering and rating these bots
7. Build a payment mechanism for bot builders to charge for these bots (and take a slice from each transaction)
8. Build a text based advertising network (more on this later)
9. Lastly, integrate voice XML standard into the API
Now, if you ask me if this is really that big of a market for this kind of investment I’ll say two words . . . mobile applications. The premium SMS market is way too screwed up (I talked about this in this post. . BTW before eBay bought Skype). Essentially greedy mobile carriers are killing the potential of the market by insisting on taking 30%-70% of GROSS REVENUE of premium text messages. With AIM having decent penetration into mobile devices, this is an end around for entreperneurs to build ANY type of mobile text applications which they could not before due to economics of the value chain (such as selling movie tickets through the cellphone). The idea here, which I hope AOL gets, is that anyone could get up and running, with less than $1,000 in startup cost, his or her version of 4info. The opportunity for running a location based SMS advertising network embedded into the hosting infrastructure as a monetization tool for app developers is HUGE as well (ie adsense for mobile apps). Furthermore, the voip/mobile voip opportunity is just as huge if not bigger . . . BUT I’m not going to talk about it since everyone knows about Skype and Nuance. . . (plus other personal reaons).
Come on AOL, you missed out on web 2.0, this is your chance to be the ultimate enabler and aggregator of Mobile 2.0 . . . dont fuck it up by spamming my AIM instead. . .