Phil Sim

Web, media, PR and… footy

Edgio really is an Edge Case

My good mate Crocodile Dundee once famously said “That’s not a knife, this is a knife”. I keep reading all this great blog press about Edgio and all I can keep thinking is “That’s not a business model, this is a business model” and then I pull out my great big, shiny Adsense blade.

Edgio now has an official blog. And oh what a blog it is. To quote Frank Gruber, Mike Arrington has penned a “wonderful explanation and background on edgio”. C’mon Frank, it’s marketing guff. Actually, then again it must be wonderful because everybody in the ‘sphere seems to have taken the bait, hook, line and sinker.

The second Edgio post lists all the wonderful things that bloggers like Scoble, Winer and Stowe have had to say about the Web 2.0 golden child. We note that Squash’ critique of Edgio didn’t make the roll call. An accidental oversight, surely.

Pete Cashmore also got all worked up over Edgio after Arrington gave him a personal demonstration.

I gotta say that I love Edgeio. Mike Arrington called me today and gave me a demo of the new classifieds service he has worked on with Keith Teare. I really can’t fault it.

Ok, Pete, let me help you out with the faulting part. You’ve written:

Last of all: the business model. Unlike about 90% of the stuff that gets labelled (tagged?) Web 2.0, Edgeio actually has one. Actually it has a few, but the main monetization method appears to be sponsored listings – pay 25 cents a day to get your listing bumped up to the top.

I’ll say it again, the whole reason the edge will prove successful if indeed it does, is because it means you don’t have to pay anyone to get your listings bumped. If Edgeio is even half successful, you’ll have all manner of clones pop up overnight. Except they won’t charge and they’ll just rely on AdSense revenues. You can’t lock up the Edge, it’s distributed, it’s wild, it won’t stand for this kind of commercialisation. I can’t possible see what Edgio can offer that will give it any semblance of ownership over edge listings, while still promoting the kind of critical mass it will need to get this off the ground.

Pete also call Edgio an eBay Killer. Care to explain? Now, maybe if Edgio created blog-plug ins where you could actually host your own little auction, then we could start to head down that path, but eBay is not just a classifieds engine, it’s an auction engine, and so as far as I can see, it’s pretty damn immune from any attacks from the edge.

Is the fawning over Edgio simply because Mike Arrington’s behind it. I find it hard to fathom how so many smart people are going goo ga over a concept that to me, appears based on a whole host of presumptions that are still light years away from proving viable.

It’s an “edge case” in more ways than one.

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12 Responses

  1. PeteCashmore says:

    Hey, good to see someone trying to point out some of the negatives.

    Well, I don’t think the positivity towards Edgeio has anything to do with Mike being involved – if it was crap, I would have told him. I think perhaps it’s an idea that’s ahead of the curve, but I don’t think it’s too far ahead.

    I think a lot of the skepticism towards innovative companies comes from the notion that it “won’t appeal to mainstream audiences”, but that ignores the trend that mainstream audiences always, always catch up with the early adopters eventually. They might not, for instance, subscribe to thousands of feeds, but they will eventually use Memeorandum-style aggregators or personalization engines to filter and prioritize what they read online. And equally, your Mom and Dad might not install a WordPress blog, but increasingly mainstream users do upload content in a sharable, syndicated form – photo-sharing (especially from camera phones), product reviews and the like. Edge aggregators can place themselves in the middle of this stream of free content and build a toll booth – be it for classified listings, product reviews, calendar entries or any of the formats supported by structured blogging and microformats. I think CoComment is an excellent example of an edge aggregator, although I’m sure the creators didn’t design it with that in mind.

    OK, so on to your idea about Edgeio getting cloned. Of course it will. Just like Del.icio.us got cloned. Digg, too. And Digg is a good example – it’s essentially an aggregator (albeit a human-powered one) that filters news stories. Some of the clones are just as good as Digg, but haven’t gained the same traction. Why? My guess is network effect – Digg experienced strong network effects, and Edgeio is likely to enjoy a similar effect if it takes off.

    My point about eBay is that all centralized content stores will eventually get disrupted by decentralization. Edgeio might not do it, but someone will. Perhaps Google. Either way, the walled gardens seem under threat.

    But you also raise an interesting point – whether companies should try to build ahead of the curve, or simply take these ideas to mainstream audiences. We fawn over sites like Flickr, but really it has tiny traffic compared to mainstream websites. Even YouTube – which is only a few months old – is about to overtake Flickr in terms of reach and traffic. MySpace, meanwhile, has the kind of traffic that hosted blogging sites could only dream of. So yes, we’re myopic – and my recent adoration of CoComment is probably a symptom of that. Perhaps we should care more about bringing these services to mainstream audiences and less about pursuing ideas that are “lightyears” ahead of the game.

    Most businesses fail in some way, so being a skeptic is always a safe bet. Edgeio makes sense to me and anyone else who has been studying web trends. But whether that insight converts into business success is impossible to tell.

  2. Phil Sim says:

    Hey Peter, appreciate the thoughtful response… I have to say though, I’ve given what I call edge economics an awful lot of thought and I keep coming back to the fact that the only company that’s set up to profit from it is Google. I wish Edgio all the best, but I just don’t think that it’s model has that “network effect” angle to it.

    Oh and on eBay – I still don’t see how a distributed, edge-based auction system works. Remember FreeMarket or whatever they were called tried a variety of that by trying to provide an aggregated auction space for publishers. Didn’t work. I think eBay’s core business is more bullet proof than any online business out there and for taht reason I think it’s them and not Microsoft or Yahoo that Google has to keep the closest eye on.

  3. Frank Gruber says:

    Very intriguing post and blog. There was a lot of speculation in the blogosphere as to what exactly edgeio was going to be. Rob Hof posted some details after viewing a demo at SDForum so some of the questions were beginning to be answered.

    What I was getting at on the post you mentioned from SomewhatFrank.com is that edgeio launched a blog that explains in more detail about edgeio thus eliminating some of the need for further speculation surrounding the project. “Marketing guff” or not, it is the first official communications from edgeio into the blogosphere about the project. The post explains the players involved and so on and so forth; Details that were not previously documented by anyone. Also I found a few screen shots on Flickr on Sunday morning prior to Pete revealing some screen shots of his own thus adding more clarity to the project.

  4. […] Here’s another blog post that has its doubts: Edgio really is an Edge Case My good mate Crocodile Dundee once famously said “That’s not a knife, this is a knife”. I keep reading all this great blog press about Edgio and all I can keep thinking is “That’s not a business model, this is a business model” and then I pull out my great big, shiny Adsense blade. […]

  5. Hi Phil, Thank you very much for your blog post, and your blog in general. I like sites that rip on stuff intelligently. It’s free consulting for the companies and people you talk about.

    You raise a lot of good points in your post that I want to talk about further. I’d also like to give you a personal demo of the product if you are interested. Just email me at mike at edgeio and we’ll set something up.

    Also, I agree, we are not an ebay killer. We just want to further the ideals of edge/blog publishing and give people new tools to do things that we think/hope they’ll want. We are passionate enough about the idea to spend our time and money on this, and look forward to seeing how the experiment goes.

    Thanks again for the feedback.

  6. […] Here’s another blog post that has its doubts: Edgio really is an Edge Case My good mate Crocodile Dundee once famously said “That’s not a knife, this is a knife”. I keep reading all this great blog press about Edgio and all I can keep thinking is “That’s not a business model, this is a business model” and then I pull out my great big, shiny Adsense blade. […]

  7. […] There’s more discussion on edgeio today, including great posts by Phil Sim, Pete Cashmore, David Parmet, Alex Moskalyuk, Michael Wales, TheLastPodcast, Russel Reno, SuperAff, Brian Oberkirtch, LikeItMatters and Luca Mearelli. […]

  8. […] Phil Sim disagrees with Pete. Has some critical points. […]

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  10. Good points,
    I think where eBay is vulnerable, and a problem most people ignore, is in the area of crime. There are far too many auctions involving stolen merchandise, knock-offs and intellectual property violations. EBay does not do near enough to combat this. At some point, I believe, it will come home to roost. What is the legal liability here? And will Edgio be the company that reaps the rewards when the “stuff” hits the fan? Who knows. I for one, and looking forward to the fallout.

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