News.com is reporting that Google has just revealed a preview of its new “Friend Connect,” a user-friendly method of adding social features to web sites without needing extensive programming knowledge. Friend Connect is obviously an attempt to jump on the social networking Web 2.0 bandwagon, but Google is approaching it from a different point of view.
Instead of launching just another social networking web site like MySpace or Facebook, Google has created a series of social “plug-ins” that can be added to any web site without needing programming or technical knowledge. This in itself is a pretty clever innovation, and could conceivably take off big, assuming that it is user-friendly enough, and that Google markets the new Friend Connect service in the right way.
Imagine having MySpace or Facebook connectivity available on a huge variety of web sites, from Amazon.com to flyfishingweekly.com (or whatever you are into). That is exactly what Google is attempting with the Friend Connect service. This way, you don’t need a centralized social networking site and all — you can simply have your Facebook-type social interface and connections anywhere you go online.
Users of the service will be able to interact with and view the activities of all their friends on existing sites, including Facebook, Google Talk, Orkut, Plaxo and others. The Friend Connect interface will use a secure authorization process to increase security, and keep your social network safe while surfing around various sites online.
For the time being, only a few sites are including the Friend Connect interface. Google is seeking feedback from webmasters and users about the functionality of the service before the official launch takes place– scheduled for later this year.
In effect, the Friend Connect interface is a type of widget that is easily included on any web page. Google expects the interfaces to be popular among a wide variety of web sites because of their ability to bring in increased Web traffic, and enhance surfers experience on a particular site. For example, if you’re reading a series of articles on the wired.com and decide to check in with your friends on Facebook, you don’t have to open a new web page at all — you can simply use the Friend Connect interface right on the page you are reading.
The beauty of the service is that your social connections and applications will all be immediately synced up with your MySpace or Facebook page. Assuming that the Friend Connect application is stable, it could prove a great success, and will likely be adopted by millions of web sites around the world. We will have to wait for the official launch of Friend Connect later this year to see how it plays out, and if the service can live up to the hype.
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With the US economy on shaky ground, interest rates being slashed, and the real estate market in a serious slump, online companies have begun to wonder if there is a web 2.0 bubble burst just around the corner.
Everyone remembers the .com crash and burn of 2001, when many startups went under, and others struggled to survive through some economically tough times. With so much uncertainty about the U. S. economy, analysts are wondering if we are facing a new dot com slump. Even the all mighty Google.com has announced that it will lay off some employees, and many other big players in the industry appear to be tightening their belts, reducing costs and spending.
Overall though, web-based businesses appear to be faring better than their brick and mortar counterparts in the current state of the economy. Online Mega-retailers such as Buy.com, Amazon.com and Overstock.com have all done well during the first quarter of 2008. Even many smaller web-based businesses report “decent” earnings so far this year.
Contrast these reports with the financial woes of many off-line retailers who are struggling, such as Nordstrom, Macy’s and other high-end department stores. One reason why web-based retailers appear to be weathering the storm better is the perception that buying online is cheaper. In times of financial hardship, more consumers may turn to online retailers as a way to save a few bucks.
Likewise, with the price of gasoline hovering around four dollars per gallon, consumers may find it more cost-effective to shop online, rather than driving all over town searching for bargains. Whatever the reasons though, it is clear that most of the big name retailers online are proving more profitable than their off-line counterparts — at least for the time being.
However, there is some evidence of a “thinning of the herd” mentality affecting online business startups. One example of this is Mowser.com, a web service that translates web sites into mobile Internet versions for viewing on cell phones and other mobile Internet devices. Mowser is closing up shop this year after failing to raise funding for the expansion of their site.
Some analysts see Mowser’s problems as an early warning of a new web 2.0 bubble burst on the horizon. But other experts disagree, and point out that Mowser’s service falls into a niche that is gradually disappearing. They claim that the gap between the “regular” Internet and the mobile Internet is narrowing, so the market for Mowser’s Web translation service is shrinking on a near daily basis.
It is highly unlikely that there will be a dot com bubble burst anything like the 2001 version, though online businesses will certainly have to deal with the same economic challenges as off-line retailers in 2008. So far though, online businesses are holding their own, and at least weathering the storm, if not avoiding it altogether.
Flickr, the popular photo sharing web site now owned by Yahoo, has announced plans to add streaming video to its repertoire. Initially, the video offerings will be limited to only 90 second clips, with a maximum file size of 150 MB.
According to News.com, Yahoo plans to incorporate streaming video into Flickr, and the video clips will be managed just like photos on the site, the only exception being that video clips will feature a selection of playback controls. The videos will be shown as a thumbnail image along the users other photos. Comments can also be added, as well as captions, geo tags and privacy restrictions to make the videos private or public.
With most digital cameras now sporting video capability, Yahoo is making the decision to incorporate these clips as “long photos.” Yahoo is attempting to encourage original video clips, not television episodes or DVD captures, and a strict copyright infringement policy will be in effect to discourage the type of video “borrowing” that is so common on YouTube.
Flickr has been wildly successful as a photo and image sharing site, leading to some speculation that the move into video could threaten the dominance of Google’s YouTube. For the time being though, Flickr should pose no serious competition to YouTube, which is capable of handling much longer videos and greater file sizes.
Another big difference is that only Flickr users with Pro subscriptions will have the opportunity to publish videos. The site will convert various formats of video, including AVI, MPEG, and MOV into a standard streaming flash video format. Flickr will also store the original video, and the sites existing uploader will be used to upload video as well as images.
According to industry experts, the biggest hurdle Yahoo will face in incorporating streaming video is the 90 second clip limitation, which is likely to be a big problem for many users. But where Flickr video may succeed is in posting personal and family video clips to share with relatives and friends, an area where YouTube is weak. After all, many families with video clips of children would not consider putting them on YouTube — but families who have already used Flickr to upload photos would likely consider uploading short video clips as well.
The other big hurdle for Yahoo will be convincing Flickr users to sign up for a $25 per year Pro account. Only time will tell if Yahoo will be able to convince users that signing up for a $25 Pro account is worthwhile to include their short video clips alongside photos.
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In what could be described as a marketing ploy to advertise to the adult female demographic, Yahoo has launched Shine, a new web site which Yahoo claims will reach approximately 40 million women, aged 25 to 54.
Shine is being touted as a “lifestyles destination” for women, and will combine many different elements from Yahoo’s flagship portal page, including the food, health, fashion and astrology sections. In effect, Yahoo is “repurposing” Web content already available on yahoo.com, and packaging it together in a format designed to appeal specifically to adult women.
The new site will also utilize content from publishers as diverse as Time magazine and Condé Nast. There will also be user submitted content and blogs, as well as work and finance related content, specifically geared toward women who Yahoo have labeled “chief household officers,” a borderline offensive term to describe women who make the majority of purchasing decisions for the household, and spend a good deal of time online.
But not everyone is happy about Yahoo’s obvious attempt to “divide and conquer” the female demographic in such an advertising-friendly manner. Immediately following the launch of Shine, blogs and message boards online were bristling with critical comments about what many women see as a “very cynical and poorly executed” attempt to appeal to modern women.
The big question is, is it really necessary for Yahoo to reinvent “Woman’s Day” or “Home and Garden” online? Many women feel that the days of male-dominated corporations publishing content to appeal to a stereotypical Stepford wife that never really existed are long gone. Reading some of the comments online from women about the new Yahoo Shine site, I detected a strong feeling of resentment toward Yahoo, and other corporations intent on capitalizing off of female stereotypes.
Another worrisome fact; when checking out Shine for myself (yes, male Web surfers are allowed on the site — just don’t start posting comments about football or chest hair :-) the new portal seemed more like a clumsily-designed exercise in advertising, more than a destination that offered any real value to Web browsers, be they male or female. In fact, it appears that Yahoo has attempted to gear Shine so heavily toward a stereotypical corporate idea of what women want, that it almost ends up feeling like a Saturday Night Live-style parody.
As one female blogger pointed out, “real” women are looking for articles about computer programming, aerodynamics, world issues and healthcare technology, NOT patronizing tips on homemaking, astrology or becoming a Stepford Wife. Yahoo would be wise to listen to the female voices online, and re-think the format of Shine.
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What is Bebo? That’s the question many people are asking today. Businessweek.com is reporting that AOL has pulled out it’s sizable checkbook to purchase the pre-teen social networking website known as Bebo. Buying Bebo gives AOL access to their growing teen and preteen audience, as well as providing a way to compete with the other big social networks online, including MySpace and Facebook.
AOL will pay $850 million for the California-based Bebo, a move which surprised many analysts. Bebo is a relatively small web site, but their growth has been significant over the past year, and they’re now the third most popular social networking site online.
“Old media” corporations are in a bit of a feeding frenzy, seeking to buy into the social networking bandwagon. Rupert Murdoch’s NewsCorp purchased MySpace a few years back for $580 million, and Facebook has received plenty of offers as well, though the company has remained independent thus far.
Bebo was established in 2005 and currently has 40 million users around the world. The influx of preteens to the site has helped Bebo grow significantly over the past year. Visits to the web site have increased by 60% from January of 2006, and Bebo now boasts approximately 7.1 million unique hits per month.
Even though Bebo is growing at an impressive rate, its user statistics are still humble compared to MySpace’s global audience of more than 100 million. Facebook also has a significant advantage, with over 64 million members and a 200% increase in visits to the site over the past 15 months.
But where MySpace and Facebook have focused on attracting older teens and young adults, Bebo is attempting to carve out a niche for itself with the younger teen and preteen audience. The challenge AOL will face in adding Bebo to its roster of online real estate is to differentiate the site from the other popular social networks.
AOL CEO Randy Falco says that the company plans to merge Bebo with AOL’s instant messenger service, and monetize the site through teen-oriented advertising. Analysts predict that advertising on social networks will increase to $2.89 billion in 2009.
Bebo established itself quickly as an online presence, and garnered coveted partnerships with the likes of MTV, CBS and even the BBC. AOL will seek to expand the site, and the challenge will be to bring in the advertising dollars without alienating Bebo’s notoriously fickle teen demographic.
Users of social networking sites — especially teen users — are known to be wary of heavily advertised, overly commercial ventures. Bebo’s members could quickly bail on the site if they sense Bebo is becoming too predictable and commercial. So in this sense, AOL must walk a tight rope between increasing the advertising revenue of the site, while maintaining Bebo’s low-key, irreverent attitude. Whether AOL can successfully turn a profit from Bebo will depend on the subtlety of its adverts, and the uniqueness of content it can contribute to the site.
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Another indicator that the US may be slipping into a recession: even powerhouse companies like Google Inc. are feeling the heat, as the company’s so-called pay-per-click search engine advertising service faces setbacks.
Experts say that one reason for the decline in Google stock shares this quarter is the lackluster performance of the company’s AdWords online advertising service. In the United States particularly, fewer web surfers are clicking on Google’s Internet ads, resulting in a weaker bottom line for Google, and causing the company’s stock to slide somewhat on Wall Street.
The Internet research firm ComScore has just completed a study which indicates that American Internet users are “tuning out” online advertising to a greater and greater extent. Word of the report reached Wall Street — already shaky from a series of poor financial indicators over the last few months — and caused Google’s stock price to sink to it’s lowest position in nearly a year.
The downturn in Google’s search engine advertising is not really a surprise to many online companies. Not that many years ago, the Internet was littered with flashing, neon-like graphic banner advertisements; and for a while they were effective. But eventually, surfers began ignoring the intrusive banner ads, and in many online communities, resenting the “spammy” commercialism of the banners.
Consequently, the value of banner advertising online began to fade, and is now less effective than ever. The same thing appears to be slowly happening to Google’s search engine advertising. As web surfers become savvier, they increasingly ignore text links they perceive to be paid advertisements, favoring unadvertised content rich web sites that provide good information.
Unless Google is able to put a new spin on their online ads, experts predict that the trend toward lower click-through rates on Google advertisements will continue. More and more, online consumers are turning to social networking sites such as MySpace or FaceBook when seeking out recommendations for products.
Web analyst Clayton Moran of the Stanford group says “we don’t see a compelling reason to buy…[Google]…stock right now, noting that the company is bound to have some rough months ahead in 2008.
But according to Wired.com, other analysts see the downturn in Google’s revenue as a short-term “blip,” not a sign that their best days are behind them. They point out that Google has recently instigated several new policy changes in its search engine advertising program in an attempt to weed out poor quality web sites, and those that do not comply with Google’s terms of service.
Google Chairman Eric Schmidt sees the downturn as a necessary step which will pay off in the long run. Let’s hope the market agrees.
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The Yahoo board of directors has officially rejected Microsoft’s $44.6 billion takeover offer today. After reviewing the offer over 10 days, Yahoo decided that the $31 per share offered by Microsoft “substantially undervalues the company.”
Bloomberg.com is reporting that Yahoo co-founder and chief executive officer, Jerry Yang e-mailed the company’s employees today outlining the board’s decision to reject Microsoft’s “unsolicited offer.” Yang says that Yahoo’s recent investments will help drive visitors to the company’s sites, and with online advertising expected to reach US81 billion by 2011, the company is positioned to see significant growth over the next few years.
In effect, the Yahoo board of directors is gambling that they can create a more valuable company that Microsoft could, if allowed to keep the reins. The official rejection statement by Yahoo pointed to its growing ad network and portfolio of acquired web sites to make their case. But some analysts are skeptical. For example, in the online advertising department, Google’s ad sales increased seven times faster than Yahoo’s in 2007, leaving Yahoo a very distant second, and increasing pressure on the company to further develop its advertising network.
Meanwhile, the word on Wall Street is that Microsoft is currently weighing its options, and considering if it should raise its offer or take the matter straight to Yahoo’s shareholders for a vote, bypassing the Company’s Board of Directors altogether. There were rumors last week that Microsoft may seek to overthrow the Yahoo board by appealing directly to shareholders if its offer was rejected.
The real challenge for Yahoo’s board now is to convince shareholders — many of which are company employees — that rejecting Microsoft’s offer was the right thing to do. After all, Microsoft was offering a 62% increase on the current price of the stock. Yahoo directors may face an uphill battle convincing shareholders not to sellout to Microsoft if “The Big M” begins pressuring individual investors to sell.
And there are signs that Microsoft may not give up so easily on the acquisition. A combined Microsoft and Yahoo Company would control more than 25% of the worldwide online advertising market, making them a potential challenger to the (thus far) unstoppable Google Inc.
And even though the company is not directly involved, the role Google plays in this transaction cannot be underestimated. Some analysts are suggesting that Yahoo could essentially “cut a deal” with Google to help them thwart off a hostile takeover by Microsoft. The New York Times is reporting that Google CEO Eric Schmidt has approached Yang about the possibility of a partnership between the two companies.
Yahoo is so far refusing to comment on the possibility of a partnership with Google.
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Okay, here’s the good news: it looks like there may finally be some serious competition to Google’s domination of the online world. After all, competition benefits everyone in a free market, right?
Now here’s the bad news: the competition could very well end up being Microsoft. Oh brother!
Bloomberg.com is reporting that Microsoft is attempting an “unsolicited takeover” of Yahoo Inc. Microsoft has put in a $44.6 billion bid to buy out Yahoo lock, stock and barrel. The offer breaks down to $31 per each individual share of Yahoo stock, and represents a staggering 62% increase on the current price of shares held by Yahoo investors.
With an offer so large, you have to believe that shareholders are taking it seriously, especially in light of Yahoo’s recent quarterly earnings, which fell a belt-tightening 23% in the fourth quarter of 2007.
Microsoft has been “chomping at the bit” for some time to gain a stronger online presence, and beef up their fledgling Microsoft Live search engine. Purchasing Yahoo would give Microsoft access to a much greater worldwide search network, all of Yahoo’s portal and social networking sites, and make them the only true competition for Google.com.
Microsoft is claiming that by taking over Yahoo, operating costs for the two companies could be decreased by as much as $1 billion per year. Although Yahoo corporate executives have been tight-lipped about the proposed merger/takeover so far, a company representative said that Yahoo plans to evaluate the proposal “promptly.”
Yahoo shareholders have taken a bit of a beating over the last few years. Selling out to Microsoft would provide them with a type of “golden parachute” to dump their Yahoo stock, while realizing a sizable profit. Overall, the value of Yahoo shares have declined by nearly 50% over the past two years, leaving shareholders anxious, and the company ripe for an “unsolicited” takeover attempt.
But while Yahoo has been floundering, Google.com continues to thrive; the company reported a staggering 52% increase in sales the fourth quarter of 2007, representing Google’s 14th consecutive quarter of increased sales.
Even though Yahoo’s search network has barely made a dent in Google’s online search domination, when combined with Microsoft’s Live search service, it could represent as much as 35 to 40% of North American search engine traffic, giving the combined Yahoo/Microsoft company a fighting chance to compete against Google online.
Many Web experts have been praying for the day when Google finally receives some serious competition, but few of them will be relieved that that competition might finally come from Microsoft, a near-monopoly in its own right. So while having a serious competitor to Google’s dominance sounds like a good thing, the fact that it could be Microsoft leaves many in the IT industry feeling uneasy about the possible merger, and the future of the web.
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The digital revolution has touched nearly every part of society and nowhere is this truer than in the media and publishing industries. Fewer and fewer consumers will actually buy a physical CD of music for example, opting to simply download MP3s online from iTunes, Amazon.com, or any number of other digital music portals.
Likewise, films are increasingly being rented and watched online, without having to be made into DVDs or other video formats. For example, Netflix has recently introduced a “watch online” feature allowing subscribers to view thousands of available films, documentaries and television shows “on demand” on their computer.
But one area of the publishing and media business that has so far failed to adapt to the new digital world is the printed word. Hard and soft cover books are more popular than ever, and attempts to mass-market e-books, or digitized versions of books which can be read on a computer, have so far not sparked the imagination of the public at large.
While it is true that e-books continue to sell very well when he comes to very specific, nonfiction information, such as how-to guides, the public has so far not responded well to buying e-books of novels or other modern literary works.
But Amazon.com chief executive officer, Jeff Bezos, wants to change all that. Bezos considers hard and soft cover books to be relics of a bygone age, and would like to see e-books replace standard tomes the same way that MP3s are replacing CDs.
To help bring about this paradigm shift with the buying public, Amazon.com is unveiling a brand new handheld book reader called “Kindle.” The idea is for Amazon’s new Kindle to do for digital books what the Apple iPod has done for digital music — make it accessible, mainstream, and above all else, cool.
The Kindle is a portable, mobile hard drive that will hold about 200 books, and is connected to the Internet via Sprint’s high-speed cell network, allowing users to search and download any book available online in just a few seconds. Kindle will be roughly the size of a paperback book, and display book pages on a backlit LCD that appears more like a standard paper page than a computer screen.
The Kindle’s official release date is November the 19th, and it will be available for sale on Amazon.com for $399. The real question is, will die-hard book lovers be willing to trade in their old paper tomes for a newfangled backlit e-book reader?
Amazon.com is betting that, given time, downloading books to a personal reader will become as commonplace as downloading digital music to an iPod — and just as profitable.
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Does anyone remember back in the good old days when Napster was nothing more than a couple of a naughty college boys “fighting the power” of the music industry? Yes, way back in the 90s, Napster was the “bad boy” online application that established businesses both resented and feared. So have they been able to keep up this bad boy, outsider image in the new millennia? Not exactly…
Beginning sometime in November, Napster Inc. will start offering “Napster Mobile” to AT&T wireless network subscribers. Customers will be able to download songs over the air from a huge variety of over 5 million tracks.
Yes, it you read that right. Napster, the former feared and hated adversary of big business everywhere, has just inked a deal with perhaps the oldest of the old guard, AT&T. Strange bedfellows indeed.
But it’s a brave — and some would say sad — new world out there, and Napster Inc. appears to be chasing consumers with all the verve of a Fortune 500 corporation. The Napster deal with AT&T is all the more striking when you consider the company began with two friends in a college dorm room helping friends to share music files online.
But the new Napster — Napster Inc. — has virtually nothing in common with its earliest beginnings. Instead of “fighting the power,” Napster now seems hell-bent on “becoming the power.” And the new agreement with AT&T could be just the kind of savvy corporate deal to make that happen.
Under the terms of the new agreement, AT&T customers will have access to five downloadable music tracks per month for the price of $7.49. Another option allows single song downloads for the set price of $1.99 per song. In addition, AT&T users will be offered five songs free upon signing up with the new Napster Mobile.
AT&T vice president Mark Collins says that the new agreement “reinforces AT&T’s leadership in providing the industry’s largest mobile music platform.” The company already has an agreement in place with Apple to use its iTunes music download service, and a separate agreement with eMusic, which claims to be the world’s largest independent music distributor, with over 2.7 million titles in its inventory.
Adding Napster downloads to these previous agreements helps solidify AT&T’s dominance in the mobile music marketplace. The company has even convinced pop group Matchbox Twenty to debut its new album on the new Napster Mobile service.
This type of aggressive promotion bodes well for the new AT&T-Napster Mobile agreement and is sure to keep shareholders happy. The Rebel Napster of the ’90s may be long gone, but the new Napster’s mission statement appears to be, “if you can’t beat them–join them.”
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