Overclocked

I’m sitting on a quick (30 minute) session on mobile. I’ll be heading back to D.C. tonight.

Just finished my panel on net politics and it was one of the better ones I’ve been involved with. It was ideologically balanced with myself and Mark SooHoo (McCain) for the Republicans and Texas State Rep. Mark Strama (the moderator) and Clay Johnson (Blue State Digital/Obama) for the Dems. Strama has a very interesting story. He was an Internet entrepreneur turned politician who probably has the most technically sophisticated approach to field organization I’ve ever seen from a local candidate. I’ll post links from any coverage of the event.

One general observation about this conference and others. Conference attendees are always the perfect stereotype for the demographic being represented. Whether it’s techies, conservatives, or sales guys… this is always true.

Austin is a very cool town but probably has the worst designed convention center I’ve ever been in.

11:37 — I’m now in a panel on “After Bust 2.0.” MUCH more crowded than the first panel of the day so I’m sitting on the floor in back.
11:40 — Gina Bianchini of Ning and panel say a shakeout is probably coming, but it doesn’t involved public markets so it won’t be as bad. It’s fundamentally different if a private investor loses money instead of the NASDAQ crashing.
11:44 — Two-way media like blogs kill bad ideas early on. So no more selling pet food over the Internet. But still do we need 600 digg and del.icio.us clones?
11:45 — WiFi is VERY slow.
11:46 — Web2.0 is lower scale than Web1.0 but that’s not exactly what venture investors want to hear. The crash won’t be as bad but the peak won’t be as high.
11:47 — It’s easier to fund things that work (duh) (i.e. once something has 2 million users). Secondary rounds of financing are bigger and make sense.
11:49 — Bianchini: It’s just as hard to build a small business as it is to build a big business. The shift from “not proven” to “proven” is getting a lot shorter. “This is a great time to be an entrepreneur.” Venture firms are quicker to jump on stuff. Do NOT go to a venture firm and ask for $5 million to prototype something. You have to be lean and cost-effective.
11:51 — In my corner here: 7 Macs, 1 PC (me).
11:53 — One way to start a business. Go back to your failed business plan from ‘99 and try it again.
11:55 — Bianchini: Don’t go chasing conventional wisdom. In the first bust it was B2B. The ones that stayed B2C (selling handbags) put their heads down and survived the crash. Trust your gut. Don’t build your business to look cool to VCs, build it around the consumer. VCs will eventually come along.
11:58 — Discovery Channel producer talks about how to apply Web 2.0 to existing offline companies. ABC News is getting innovative. USA Today is getting very Digg-like. Will their users nav to that? Interesting tidbit is that a lot of this new content isn’t indexable by Google, representing a view within the company that this doesn’t represent their brand.
12:01 — Don’t get distracted by the technology audience.
12:03 — In technology failure is not rewarded, but if you fail you are viewed as contributing positively to the ecosystem. A lot of the companies we really admire now were founded in 2001, 2002, 2003. Flickr, Dogster, etc. It was driven by passion not economic concerns.
12:04 — “Speaking of Dogster…” starts off a questioner from Dogster. What’s making things expensive is salary inflation — same problem as Bust 1.0.
12:09 — Google is very profitable because of search. Beyond contextual ads, it’s very, very, very hard to monetize based on ads. CNet probably has the best non-Google model. Also Ajax is throwing out assumptions about pageviews (preach it!).
12:10 — Hottest market is video, but advertisers are skittish about content. People don’t want their ad seen next to a beheading video, which was a theme in the last panel I attended.
12:13 — A guy from Satisfaction (great company name) has a model that relies on putting a layer of play over a boring industry like customer service. I feel like I’m porting back to the Joi Ito/Justin Hall panel from yesterday…
12:18 — Bianchini: What’s fun about right now is that anyone with passion and an idea can get in on the action. Big industries constrained by legal departments and IT departments. The most important thing about right now is authenticity (I see this in politics too).
12:20 — A guy from Harvard Business Review on the panel is talking about porting over Web2.0 into their efforts. Harvard was considered the “voice of God.” USA Today redesign was a paradigm shift in media. When people first propose building Digg or Slashdot-like features on traditional sites, it scares the crap out of people. Once competitors adopt them, that’s fine. Bianchini: eBay was doing community 11 years ago. This is not new.
12:22 — Will average USA Today readers adopt the Digg model. (Netscape users didn’t.) Remember, USA Today as a brand is thoroughly average. You read it because it’s at your hotel room door in the morning.
12:27 — There’s a talk about outsourcing now. People bragging about “cheap engineers in Buenos Aires…” Don’t you want good engineers? Let’s break down a lot of this crap about someone in the Bay Area is better than someone outside.
12:30 — One guy from Burlington, VT survived the bust by migrating his dot-com to a web development shop. He asks if a particular industry is more bust-worthy?
12:31 — Answer: The market probably can’t support 15 more video sharing sites.

9:58 — The crowd at the Austin Convention Center has thinned out (that or lots of people are massively hung over) and people are filtering in for the film festival. A panel on independent video content is about to get underway here with Mike Pettis (Blip.tv), Violet Blue, Amanda Congdon, Nate Pagel (Podaddies), and Bre Pettis.
10:02 — 7,000,000,000 video streams last year.
10:03 — Different approaches to monetization — getting jobs as video bloggers, advertising on videos, and building your reputation first then monetizing.
10:05 — Young men (the early adopters) are not watching TV anymore. They’re watching video online, says Pagel. True, but they’re mostly gaming.
10:06 — Pagel: People are getting close to quitting their day jobs with video content.
10:07 — Apparently, Ze Frank has made an obscene amount of money selling virtual rubber duckies. For $250. It’s self-sponsorship. (I’m officially in the wrong business.)
10:09 — Hudack: Do you need an audience as big as Ze’s and to be as crazy as him to “sell rubber duckies.” I’m going to venture that the answer to that is yes.
10:13 — Is the sponsorship model more pure than advertising?
10:15 — When do you transition from indie media that people will want to donate money to to Big Media where brands will want to pay you? There’s no road map.
10:17 — Congdon: Brands sponsor my show. Monthly she does a web chat… users see a “plaque” of her thanking a sponsor. Doesn’t compromise the “Web 2.0ishness” of her site.
10:17 — Congdon: “My site on ABC News is such a mess.” That has 30 second pre-roll video. So she has control over her personal site.
10:19 — Hudack: Preroll video on one site killed 75% of traffic and it never recovered.
10:19 — General consensus that preroll is icky. Pagel: There are many different types of formats. It’s key to come up with stuff that is contextual.
10:21 — Hudack: They have seen a 50% dropoff for watching a postroll ads.
10:24 — Hudack: Brands are scared to death of user generated content. Blip matches brands with popular video blogs, like Dove with Amanda.
10:26 — Pagel: Popular video bloggers should contact advertisers who might be a good fit.
10:28 — A questioner is talking about user generated video that pimp products for free.
10:29 — Commercial advertisers are massively fearful of what is in your archives. On TV they rely on the networks as a filtering mechanism.
10:32 — Pagel prints an email on screen from the agency repping the Air Force. They don’t like UGC:

Hi Nate,

Thank you for reaching out to us. The Air Force has requested we do not run on UGC or social networking sites given content control and associated risks.

If you’d like us to meet we can, but I want to be upfront as this is a challenge or ours as we try to reach teens/young adults.

So they’re trying to reach young people, but can’t advertise on MySpace. Great.

10:34 — Question from the panel: What’s a GRP? There’s a cultural disconnect here…
10:35 — No one has a good video ad serving platform.
10:36 — As I’m blogging a panel about bloggers potentially embarrassing advertisers, the AdSense unit to the right is running an ad with Ann Coulter. The irony…
10:38 — Video CPMs range from $1.75 on MySpace up to $25.
10:38 — This panel is very ad driven. Amanda Congdon and Violet Blue haven’t said very much.
10:44 — You actually have the read to terms of service on whatever video sharing site you’re uploading to.
10:45 — If you have an ad you know will go viral, make sure there is a clickthrough action at the end to generate revenue.
10:47 — Blue (finally): Indie media can say things big media can’t.
10:48 — Video to make money is fundamentally different than video for art. There’s a tension there.
10:49 — Hudack: Advertisers haven’t asked for a change in content to advertise; they are sensitive to it. They are making a business decision about whether to associate their brand with a site.
10:52 — Hudack again warns against putting up a bad video for fear of scaring off big advertisers.
10:54 — switching to blackberry since battery is dying. CPC will eventually become the thing in video advertising but not yet since advertisers don’t get it.
10:55 — an old time video guy is asking a question. He’s produced lots of documentaries for networks. Nothing has happened to them beyond the network run - a testament to the lack of stickiness in traditional media.
10:59 — bottom line; sure people can make money from this but it won’t be a lot. Starving artists will always be among us.
11:01 — lots of advertisers don’t want clicks. They just want their logo there. But interactive enables you to measure beyond generic branding. Is it a paradigm
shift? Big agencies don’t care because its not enough of their budget.
11:05 — Congdon: build your brand before advertising b/c that will determine the nature of your advertising. Blue: we lead advertisers follow.

After three hours of tarmac hell in Houston, I’m finally here at SXSW just in time for the last panel of the day. I’m sitting with Mike Krempasky in a panel on World of Warcraft and gaming featuring Joi Ito. Hey, if you can’t learn new things…

5:04 — They’re talking WoW vs. Second Life. I’m liking WoW already…
5:05 — You can play WoW videos inside of Second Life.
5:06 — WoW features lots of addons (threat meters, chat windows, etc.)… it’s a huge dashboard while you’re fighting. Not unlike Firefox. It’s MMRPG meets project management.

5:08 — OK, I’m lost already.
5:09 — Soldiers in Iraq say this WAY AHEAD of the kind of instruments they have in combat. Photo coming shortly… Way ahead of enterprise project management software.
5:12 — Video of this presentation:

5:13 — Second Life is simulation, WoW is metaphor. Second Life tries to imitate real life (not very successfully IMO); WoW has nothing to do with real life — you’re not learning direct knowledge about how to do stuff; you’re learning certain values (teamwork, getting rewarded for good work, etc.). It’s implied this is more fulfilling than SL.
5:18 — The second panelist (I’ll pull up his name here Justin Hall) says he doesn’t play WoW. It takes over your screen; it’s all consuming.
5:18 — His MySpace page.
5:19 — He’s talking about software that tracks experience points — from spyware to Last.fm. How to apply this clickstream data to life online?
5:21 — There’s no way to do this systematically… how do you aggregate all your del.icio.us stuff, all the pages you’ve visited. It’s not easy. He has to manually code something that tracks it all. Sounds like a lot of work.
5:24 — It’s a Firefox sidebar. Sounds like Attention Trust.
5:24 — Joi asks what’s multiplayer about this. “It’s multiplayer because it has leaderboards!” I think he’s having some fun with us at the end of the day. I think this is related to gaming… somehow.
5:27 — Third panelist — who apparently does not have his own website — talks about how the boundaries between games and applications are dissolving. Apparently so, judging by the panel thus far.
5:30 — Games are how you imagine controlling a task in the virtual space. Good definition.
5:31 — Flickr evolved from a game.
5:30 — There is an app that’s Total Information Awareness for the Web. It publishes the contents of your frontmost window to the Web. We will know what everyone is doing all the time. (Umm… no thanks. -ed.) Here it is.
5:35 — Europe and Japan are way ahead in terms of recording every step of your life. It’s called texting. Applause line: Maybe these mobile devices are for more than just conference calls.
5:37 — Ito: This goes back towards an unhealthy attitude towards play in the U.S., which says it’s just for kids. Hence business software sucks because we don’t apply the lessons of wargaming.
5:39 — Ok, the hippies have officially taken over.
5:42 — How gaming meets productivity. Apps that reward employees for staying out of their email for at least 15 minutes… presumably so they can get real work done.
5:46 — Twitter is real big here.
5:52 — This panel has been hippy-dippy (particularly the Q&A) — but it seems to me there’s some value to introducing social/gaming elements into productivity software. Maybe it’ll make to-do lists sticky.
5:56 — A questioner stands up for seriousness and hierarchy and The Man. You don’t want your EMT to have a playful attitude. “I don’t see cops getting real playful.”
6:03 — No one is talking about the logical endpoint of tracking of your every move through passive MMRPG. Advertising. It’s AdWords on crack.
6:08 — On Twitter, Rex Hammock who is sitting a few rows in front of me calls this panel “disruptional… beyond great.”

After an intriguing initial pop, Daylife has dropped back to an audience share that would indicate something in the range of 10,000 uniques per day. Will they be able to monetize this?

This chart shows the sharp fall-off after their initial launch in early January, in comparison to the social news darling of early 2006, Newsvine.

There are two problems with Daylife’s model.

One is that they’re trying to make reading news into a lifestyle thing. Their scroll of massive pictures with headlines (which they’ve now shelved) was pretty to look at, but didn’t get at the essential news reading experience most people want — to consume (or scan) good content with brutal efficiency.

Their topical pages are just more along these lines. They don’t have a “hard news” feel to them at all. Feel-good quotes from primary sources along with photos and charts figure prominently. The actual news seems to be secondary. It’s like a news site designed by the folks behind Flickr.

Daylife is news aggregation rather than hosting. They’re going at Google News (which I’ve never been a huge fan of) and not Newsvine or Yahoo! News. This will be a limiting factor in their growth. The people who use Memeorandum and navigate through topic-based verticals to get their news are the uber-specialized power users. Their goal is to digest a lot of news about a very specific topic very fast. Sure, your CPMs will be higher but you’ll never get six-figure audiences with tools like these. That’s because that’s not how most people consume their news. They scan AOL or MSN or Drudge for interesting stories choosing a la carte from an editor-generated smorgasbord. If you’re using a tool like Daylife or Google News, you’re more likely to be an information distributor looking for everything that’s said about you than a general-interest information consumer.

This morning the Beta Stage came up in my feedreader. I liked their suggestion for a peppier McCain logo.

They had another post on The Shins and successful user-generated video.

I watch the video.

Then I pull up iTunes and buy the song. I’d heard it on the radio before but couldn’t place the title or the artist.

How many more were there like me?

With all the chatter about how marketing sucks, it’s fun and different to tell a story as a consumer about when marketing works. And for me, it’s rarely ever open-point-click-buy.

Scott Karp is skeptical that widgets will ever see broad mainstream adoption, arguing that they’re very similar to RSS:

But I was struck by how widgets, like RSS, are really more of a boon for online publishers than for average folks. Widgets, like RSS, are great for syndicating information, or in the case of widgets, also application functions. But for average users, they are only useful for aggregating on a start page, and really, how often do most people change their start pages?

The inability of anyone to explain widgets or RSS in terms that the average person can understand is really striking.

I’m more bullish on widgets than I am on RSS.

Last month, I pegged the RSS universe in the U.S. at 3.5 million. I did this by looking at Nielsen’s monthly unique number for Feedburner. If you want to work backwards from another point of reference, dividing Bloglines uniques by Bloglines marketshare also yields a number in the low millions.

Considering that there’s no one blogosphere that numbers more than 3-4 million (rightosphere, leftosphere, techosphere, celebosphere, etc.) that’s probably not bad.

But I agree that there is a mainstream wall around RSS. I didn’t fully embrace it until doing my job depended on it. Clicking on my Favorites is a habit I have yet to fully break. I also think there’s something not-quite-sticky about non-human aggregators. Memeorandum probably has a very devoted following, but its monthly uniques are in the low tens of thousands. Contrast with the human touch of Drudge. And if Drudge had an RSS feed, would you subscribe? I’m sure I would, as knowing what’s on Drudge now drives my world, but an average user wouldn’t. The experience of maybe spotting the flashing siren is just too compelling.

Widgets I think have more potential. MySpace users may not know how to put hyperlinks in their blogs, but they get widgets. Our experience with this on the last Presidential campaign was similar. It was 2003. People were putting out these little XML buttons on their blogs, but nobody really got what they were. Mainstream RSS readers were virtually unheard of, to say nothing of an easy way to incorporate RSS headlines on other blogs.

So we settled on building a news widget people could embed on their blogs. The reviewers called them lame, but more than 5,000 sites were running them, and we consistently saw a 10-15% traffic boost on all our news stories — and our news items were pretty well trafficked. Why this approach? Because you had to be a programmer to know how to embed RSS headlines on your blog; you only had to cut and paste one line of code to use a widget. People instinctively got that, and they continue to get it as demonstrated by the YouTubeization of everything.

Jeremy Zawodny has a contrarian take on widgets from a coder & security perspective. That’s something I can certainly understand. If you’re going to serve widgets, you’d better make sure your hosting is bulletproof.

Widgets are a bit messy and the early adopters snipe at them. That’s the clearest sign they’ve gone mainstream.

This is old, but very cool nonetheless:

Auren Hoffman’s Rapleaf has recently launched Upscoop as a “fun, free service.” Upscoop is at once revolutionary… and a little bit creepy. It will poll your entire contact list from Gmail, Hotmail, Yahoo or AOL, tell you which social networks they’re on, and often provide direct links to their profiles.

I had 474 contacts in my old Gmail. It was really interesting to see the market penetration of various Web 2.0 sites (and some 1.0 sites) among my contacts. The breakdown was as follows:

Classmates 70
Flickr 69
MySpace 66
UPDATE: Facebook 40 (via Facebook’s Friend Finder tool)
Tickle 25
Friendster 20
Bebo 15
AIM 14 (only AOL.com addresses)

It’s interesting to see Classmates outpolling MySpace with 150 million members. A big part of that is age — I’d guess the average age of my contacts is 35, so it’s outside the MySpace Generation. But it shows that Classmates is probably quite a bit bigger than Facebook (not tracked by Upscoop) but doesn’t figure much in social networking discussions because of its pay model/lack of stickiness. From its extensive advertising, you have to assume that Classmates is profitable, but you wonder what kind of pressure it will face as more open sites like Facebook and MySpace start catering to alumni.

Zack Exley has an ingenious solution to Wikipedia’s money problems: Ask.

If the situation is really as dire as it sounds, then why not go a little further? For one day per month, place an interstitial message over a shadowed-out home page that explains that Wikipedia relies on donations and asks people to make one. There would be a very large and visible, “Sorry, I can’t” button to let people get right to the site if they don’t donate. It would take them about 30 minutes to rig that up. And it would bring in several million dollars each day they do it (that is based on watching the speed of their past fundraising campaigns where they put a progress bar at the top). Maybe they’d only have to do it once per quarter.

When people complain to me they aren’t raising any money online, my first question is “Well, have you asked?” And usually, the answer is no, or it’s some half-hearted ask embedded deep in several paragraphs of text — kind of like what Zack says Wikipedia is doing now.

I have another suggestion for how Wikimedia can make money. Go for-profit. An unobtrusive Google adstrip embedded in each Wikipedia entry would likely grab a high CPM because each page is highly contextual. But wait, isn’t this the idea between Wikia? Well, yeah, except Wikia should be part of Wikipedia.

Right now, the Wikipedia universe is artificially limited by the community’s insistence on notoriety before a new article is created. That means an article on small fry like me gets shouted down by the community. Likewise, a series of articles detailing the finer points of Family Guy wouldn’t have a place in Wikipedia; that’s Wikia’s thing.

If knowledge is universal, and even the most random scrap of knowledge is interesting to someone, why shouldn’t it be on Wikipedia? This is the Internet. Surely you can’t argue that a page’s mere presence crowds out the pages on general interest stuff.

There is the problem of Wikipedia getting into the weeds by including esoteric tidbits on general interest subjects. That’s a problem that could be dealt with sub-pages, by including advanced reading material one can toggle on and off, sort of like an in-line footnoting system. Wikipedia could be more open to chronicling all knowledge than it currently is. And it’s not like Wikia’s model of siloed wikis has taken off or anything. People still like the original.

If they didn’t want to go the advertising route (understandable), another model could be to capitalize on Wiki content that should be walled off: internal company wikis / corporate knowledge bases, either through advertising, enterprise licenses, or consulting. Yeah, the boring, high-margin stuff…