Phil Sim

Web, media, PR and… footy

Facebook to flip

Regular Squash readers would know I hate the Build-to-flip mentality. By that I mean, where entrepreneurs start a business with the sole intention of building it up quickly and then selling it off, without any real thought to a developing a sustainable business model.

It enforces the preconception that Web businesses are dodgy, disposable and desperate.

However, when it comes to widgets and Facebook apps, then Build-to-flip is really the only business model and the $3 million acquisition of Where I’ve Been by TripAdvisor is a wonderful example of why.

The chances of Where I’ve Been creator Craig Ulliott being able to monetise his clever little Facebook widget is pretty negligible. In fact, given the bandwidth and processing it’s probably been chewing up, chances are it would flare-out pretty quickly under it’s own steam

However, the app is a wonderful fit for a larger organisation like TripAdvisor.

 InsideFacebook which broke the story calculates that it values each user at $1.30 for the 2.3 million users of the app and notes that is 30 times what Slide paid for Fave Peeps. Mashable has declared the sale “insanity” and “ridiculous” paying that amount of money for that many users.

“We say users in a relative way, however, since these surely aren’t as valuable as the users on an independent site: they’re “borrowed” members of Facebook who could ultimately decide that they’d like to switch to a different travel app. Monetizing them, meanwhile, is also a challenge. No doubt TripAdvisor was wise to tap the youth demo through acquisition, but justifying that price seems impossible.

A quick check of Facebook shows the app debuted on around June 8: ignoring the high server costs and other expenses, Craig has made about $43,000 for every day his app has been live. Incidentally, that’s about as much as the average American earns in a year.”

Is $1.30 really that much? A lot of advertisers pay more than that for each AdSense click. I’m quite sure if TripAdvisor manages to convert a reasonable portion of those users into users, it will more than justify the price. TripAdvisor is a wonderful service and definitely became my number one research tool when travelling last year. Where I’ve Been is a wonderfully targetted demographic. Every single person I know who has the app on their site is a big traveller.

The question TripAdvisor has to ask itself is would it get a better marketing return out of $3 million with a more traditional advertising and marketing campaign. I very much doubt it, especially given that Where I’ve Been probably has a lot of growth left in it.

So getting back to my original proposition. Flipping works for Facebook because the amount of value that a larger organisation can get out of a widget like this is just so much greater than what a one-man creator could ever hope to achive. So Craig gets a great windfall for not a lot of effort, TripAdvisor gets a sensational marketing platform and everybody’s happy. Flip on Facebook creators!

Filed under: AJAX Challenge

Google and StarOffice continue to dissapoint

Duncan Riley writes for TechCrunch today that Google’s inclusion of StarOffice in Google Pack adds credibility to the suite and will result in an increase in marketshare.

I’ve got to say if this is the best that the much-hyped collaboration between the two companies has brought about in the significant amount of time since they supposedly agreed to start working together then there is no credibility to be gained from either party.

I ran OpenOffice for probably six months to give myself a desktop-based option to Google Apps but on my latest desktop install I didn’t bother. I user Word Pad as my offline writer and Publisher if I’m doing something that’s a little tricky for printing.

Google and Sun had a real opportunity to do something great with their collaboration and give users a true online/offline solution if they had managed to get the two working together. Surely it couldn’t have been that much work to to write a plug-in for StarOffice so that documents created on your desktop also got synched with your Google Docs.

Filed under: AJAX Challenge

Interview with a blogger

Today I had a two-hour interview with Microsoft’s main man for Live in Australia, Harvey Sanchez.

A lot of interesting stuff came out of it that I’ll blog over the next week or so, but I think the very fact that I was given the interview is a big tick for Microsoft straight off the bat.

As far as my tech writing goes these days, I’m very much a blogger rather than a reporter. So I consider it pretty significant that someone in Harvey’s position would take that amount of time-out to talk to me, as a blogger, about Microsoft’s strategy with Live. Similiarly, I noticed a number of bloggers were given access to the media room at Tech.Ed and Microsoft is very definitely leading the acceptance of blogging as a serious medium in Australia.

Now maybe it had something to do with the fact that I’m a former tech journo and still very active in the community. Maybe it had something to do with the fact that at Tech.Ed last week, Microsoft weren’t able to find me a rep to talk about Live, but whatever the case I do appreciate the time that Harvey spent with me and generally the progressive attitude their showing towards blogging. I don’t know what it’s like in the US, but down here it’s really difficult to dislike Microsoft right now. I don’t see any of the arrogance associated with the Microsoft I used to know and all of their people I’ve met recently have been very genuine and open. While, I’m at it, a big congrats to the bloke who has been Microsoft’s main man when it has come to interfacing with bloggers and who I think has probably had a lot to do with the way Microsoft thinks down here – Frank Arrigo – who has just landed in Redmond and will be taking his unique style to the world now!

Anyway, back to the interview. To be honest, I’d just about written off Microsoft as a real threat in the Internet services market, however, I have a much better appreciation that this market has a long, long way to play out and Microsoft is doing a lot of work that’s not come to the surface yet. They’re definitely capable of doing a Houdini act in this market again if they can execute some of their ideas – but they’ve still got to prove they can do so.

Hopefully, over my next few blog posts I can provide a little bit of insight into where Microsoft’s collective heads are at with Live and (as I’m prone to do) I’ve got a lot of opinions about what they need to get right to make it work.

Filed under: AJAX Challenge

Facebook feeds finally see the light

Facebook finally gave re-birth to its RSS feeds – proving once again that you shouldn’t pay too much attention to your users.

I once worked on a news magazine. We generally ran four news stories on the cover, which follows generally accepted practice to give the reader as much reason to open the book as possible. Just at the time that we were preparing for a re-design, my editor received a letter from a reader complaining about what we call spills; ie stories that spill off onto inside pages.

So when we redesigned, our editor made the decision to not use any spills based pretty much on that letter and then some informal anecdotal research. We had one main story and a picture pointer to a larger inside story.

Guess what? Our reader results dived. Now, I agree spills are a pain to navigate, but they’re unfortunate necessities for a news magazine. As a print publisher, you just need to give your reader every reason to look further into the book. Users/readers get comfortable with a particular way of doing things or they think in isolation about their own experience.

So sure take into account focus groups and user research, but don’t assume it to be gospel. Facebook’s RSS feeds were always a great idea and it probably wouldn’t have copped a lot of the “silo” criticism if it had stuck to its guns and introduced them at the same time it launched its newsfeeds. However, a bunch of noisy users convinced Facebook to back down on it and so all Facebook users have gone with out.

I don’t know, maybe Facebook treated this exactly the right way. It stuck to its gun on the newsfeed feature, dropped the RSS feeds and then reintroduced them when the time was right.

However, I kind of think Facebook should have just held its ground from the start. There’s no reason Facebook shouldn’t have feeds. I’ve got my status updates in my sidebar now and its already increased my useage of the service.

Filed under: AJAX Challenge

Microsoft speeds up in online apps race

My renewed interest in Microsoft Live appears well-timed has just announced a bunch of new stuff for its Hotmail product.

A lot of attention has been given to the increase in storage, but I kind of yawn over that one. Were it not for Google recently announcing plans to try and charge for storage this wouldn’t have grabbed much attention, given that Yahoo and AOL! are both giving away unlimited storage.

A few bloggers are expecting Google to bend on this one. I’m not so sure. What was neat about the Google announcement is that there is a clear indicator that there are behind-the-scenes integration happening and for me thats more exciting then any storage limits. After all, how many people have actually got anywhere near there storage capacities.

Google I think is clearly thinking bigger picture. When you start talking file and image storage, you can’t go giving away free unlimited storage because people will actually use it. Quite frankly, I have no qualms paying for the right online products. I pay for Smugmug because its by far my favourite online photo sharing site and we pay for the Premium edition of Google Apps. I just want great products.

Which brings us to what I consider the most important of the Hotmail announcements – performance. Across the Windows Live ‘suite’ and I use that terms loosely, Microsoft’s offering have just been too slow. It’s just the one thing you can’t do when your doing online apps and I’ve had similiar problems with some of the Zoho offerings. It’s the one thing Google does well.

So anyway that Microsoft can speed up the new AJAX apps will be a good start to gaining back some ground.

Interestingly, most Hotmail users I know are still on the classic version. On the Internet, speed is king!

Recommended related reading at Read/Write Web talking about Live integration.

Filed under: AJAX Challenge

FaceBook WILL BE for business

I have a mate who wants to develop a new social network because he doesn’t like the way that Facebook mixes up his personal and business contacts.

Today, I read Scott Karp’s piece on Publishing 2.0 where he uses capital letters to emphasis that Facebook is NOT for business.

Let’s be clear of one thing – there’s a bunch of stuff that’s not ideal about Facebook. It was built for college kids and is now trying to position itself as the de facto standard social platform. To do so, it’s prioritised its “platform” at the expense of building out any new functionality. But it would be naive to think that down the track, Facebook isn’t going to fix a bunch of things that irk users at the moment. Like having different personas, different sets of friends, etc. I’d suggest once they’re happy with their “platform” they’ll look to make their core functionality far more flexible. Let’s not forget the first group that Facebook was opened up to beyond its core was corporates. Being a business tool is clearly an objective and this Facebook is team is very, very smart. It’s only a matter of time before they do things that make the service work better for different circles of acquaintances.  [Note, the news of AJAX support for its developer platform – these guys aren’t standing still)

Even without any of that, I’ve got oodles more out of Facebook in 3 months than I’ve gotten out of LinkedIn in three years.

So Scott, I match your caps with five of my own.  Facebook isn’t perfect for business right now, but social is social. Business works more from relationships that it ever did and no matter how good a job any new startup does in plugging the holes, it’s never going to have the critical mass that Facebook does.

I do think there will be social networks that will rise up but they will need to do a lot better of providing value-add than something like Linked-In. Meanwhile, I really can’t see anything knocking off Facebook as people’s generic social application.

In the meantime, my advice to anyone thinking about doing a social network is don’t think you can beat Facebook by doing something it doesn’t. Facebook will get it right and then you have nothing left to defend. If you can build a social community all well and good but that requires a lot more than just generic social networking features.

Filed under: AJAX Challenge

No Live at Tech.Ed

Well, I failed in my mission to get a better understanding of what Live is at Tech.Ed. There haven’t been any sessions about it, nor are there any Live people up at the event. Indeed, the general feel I get from talking to the Microsoft folk is that Live is very much a work-in-progress both in terms of how it’s going to be communicated and what is actually going to be encompassed by the brand.

However, I have been promised an interview with local Microsoft Live expert Harvey Sanchez when I get back to Sydney, so more to come!

In the meantime, TechCrunch had this from a Japanese presentation.

Filed under: AJAX Challenge

Microsoft: Apple gets it! Lock the user in

As anyone who reads Squash knows I’m a pretty passionate believer in online browser-based applications. So I’m kind of skulking around Tech.Ed this week, hoping I don’t get booted out for daring to ignore the latest version of Office thats loaded onto every PC here and instead hacking out this piece on my Google Docs account. My primary mission while I’m at Tech.Ed is to try and understand just what the hell Microsoft is doing in this space, because I’m finding it increasingly bewildering that we’re yet to see more from Microsoft in this space – keeping in mind the famous call-to-action email that went out to Microsofties from Ray Ozzie a while ago now.

So I made it a point of order to get to the 8:15am session this morning from Michael Platt, Director, Web Application Architecture, Microsoft US titled ‘Software + Services: Microsoft’s vision for SOA, SaaS and Web 2.0’

One thing is clear, and I guess this isn’t surprising, Microsoft doesn’t believe that browser-based delivery of apps is the way forward. It seems to acknowledge there’s a place for it, but it believes that by combining rich desktop software plus web services, you’re going to deliver the user a richer experience. I first heard this line back in the nineties by then wunder-analyst George Colony from Forrester, so its not new thinking.

For the most part, it hasn’t eventuated, yet. Platt admitted there are major problems with the desktop software model, like version management, but his argument is that moving holus bolus to browser-based delivery is throwing the baby out with the bathwater and it’s a better idea to just fix the problem around version management then lose the rich-application capabilities inherent to desktop software. He also made the point that as SaaS models make use of advanced AJAX technologies like persistence to enable offline access then they’re going to have to deal with version management, anyway.

Platt basically referenced two examples of Software + Services, one being Exchange. However, the other, interestingly was Apple.

“The company that really gets this, other than us, of course, is Apple.”

It became pretty clear that Microsoft is pretty enamoured with what Apple has managed to achieve with the iPod and iTunes, in terms of creating an “ecosystem” that ties together its player-software on the device, the iTunes software on the PC and the digital download web service.

Aside from providing the richer experience, the other big benefit of the software + services model is it locks the user into your system, Platt argued. It’s very difficult to crack Apple’s iPod ecosystem. Certainly, Microsoft knows that better than anyone. He compared the software + services model to that of rich web-based applications, where he argued it’s very hard to gain competitive advantage because as soon as you roll-out a new feature or functionality, it can very easily be copied.

I liked some of the ideas that Platt outlined – basically that the delivery of services has to be pretty agnostic and portable to any device, platform or delivery vehicle dependent on what the user’s preference is – however there was this underlying message that lock-in is something to be strived for. While Apple has made it work with iTunes, I think today’s generation of users won’t tolerate lock-in. They want the freedom to jump from web service to web service, depending on which is better at any point in time. I don’t think that business is in a position any longer to dictate that if you want this functionality, then you’re going to have to download and install this piece of code. I know I shy away from any downloads – if I can find a comparable online service I’ll use it instead. My PC stays cleaner, works faster and I get portability between any PCs.

A couple of other interesting points. Platt positively gushed over the XBox Live platform. He said Microsoft has come to realise that pure peer-to-peer doesn’t work – which is interesting in itself based on the amount of money its invested in Groove – and that what you need is a combination of P2P in addition to a centralised-service component, again, using whichever model makes sense for which ever particular service you’re trying to deliver. He showed a CRM service that Microsoft has built internally for its sales staff, which uses P2P to update the various sales staff”s notes and interactions, but also fed data back and forth from a central Siebel database. He admitted that architecturally it’s been a bitch to build and that Microsoft has had a lot of problems getting it right, but thats how XBox works. It uses P2P where it makes sense for VoIP but talks back to the central server when that makes more sense.

Some interesting possibilities here. Consider perhaps a CRM application that access a central store of user records, but stores your history notes which you might not want to trust to a SaaS model locally and then shares those among your team via P2P.

So a lot of interesting stuff. I can kind of see there are definitely situations where software + services make sense but I still think that browser-based delivery of applications is the model that’s going to dominate in the long-run. Maybe you’ll add desktop software on top of the SaaS service to deliver advanced functionality, but I think there’s a decision that everyone needs to make as to what your primary platform is going to be. I think browser-based, Microsoft is still thinking from its desktop heritage. Maybe that question is still a way off being answered, but I will concede that the future is almost certainly going to involve some form of combination of the two, just as there will very likely be a combinaton of P2P vs centralised server deliver.

Platt made a couple of references to Live, noting that you shouldn’t think of Live as anything but a brand. So I’m not a lot clearer on that one, but I’m on the case!

Filed under: AJAX Challenge

Time for another reality check

It’s more than a year and a half now since I started this blog with the tagline: “Stop here for a Web 2.0 reality check”.

My rationale for starting this blog in the first instance was that I believed the hype and hoopla around Web 2.0 at the time was only going to hurt the industry and lead to another bubble.

Today, I’m taking part in a panel at Microsoft’s Tech-Ed event where we’ll be discussing Web 2.0, and I’m basically participating as someone who’s going to argue against the Web 2.0 hype. So I thought it was a good time for me to blog my own reality check as to where the Web 2.0 industry is at almost a couple of years since the start of this blog.

Below are  four of the foundation beliefs I’ve consistently argued since starting this blog:

1. Too many Web 2.0 models have no business model
It’s still very much the case. In the past 18 months,  we’ve not seen any radical new business models  that  promise to increase the ability of dot coms to monetise traffic. Google AdSense remains the dominant revenue source for most dotcoms and frankly 95% of startups won’t pay the bills with the AdSense revenue they ‘re ever likely to earn

2. Web 2.0 is heading towards a bubble
Nothing’s exploded yet, but there are still too many companies raising VC capital at stupid valuations they’re never going to live up to. I spend my first six months, lambasting a whole bunch of me-too online calendar/photo/productivity apps. Now, I’d point the finger at me-too social networking apps and video tools. Sorry folks, but both those markets are pretty much done and duster. I simply don’t get what some of these VCs are thinking with the multimillion dollar valuations they’re putting on some of these startups. It’s not sustainable.

3. Web 2.0 is a stupid term
A couple of years after it was coined, it’s an even more stupid term. The longer Web 2.0 as the badge for the industry dominates, the staler it gets. Even after all this time, ordinary people, still don’t get it. I spoke to a friend of mine last night who is a coder during the Tech.Ed welcome dinner and even he didn’t really understand what Web 2.0 was supposed to mean. It’s just the Internet, people.

4. The head up its own arse viewpoint of Web 2.0
The Web 2.0 community is  still incredibly insular. The same group of people still jump from beta service to beta service. Meanwhile, my mum still doesn’t get Web 2.0, my wife doesn’t get nor do most of my non-techy friend.

I’d add to this

1. The upcoming privacy backlash
It’s only going to take a couple of cases of people’s MySpace/Facebook/etc profiles being misused for criminal gain before everybody is going to start to worry about being so free and easy with “sharing” such intimate details of their personal lives. When that happens, the fun and value of social networks is going to plummet. There will be a backlash, there is always is.

2. Web 2.0 as a fad
The Web 2.0 community has an incredibly short attention span. It moves from one hot service to the next. The argument goes that as the Web 2.0 digerati moves on, hopefully there is enough of a critical mass of users left behind that a sustainable business can carry on. But increasingly I see a lot of these things as fads. Will apps like Facebook and MySpace stand the test of time or is it something we all just jump onto before moving onto the next cool thing to do. The utility of a lot of these services is still questionable – they tend to soak up more of your time than they give back – and as such must be viewed as recreational pursuits.

History shows us most recreational pursuits come and go and come and go. Who’s to say social networking isn’t just the latest digital yo-yo? I’m not saying it definitely will be, but I think the view that social networking is just going to grow and grow is based on some pretty shady beliefs.

3. Everything old is new
I think we kind of all believed a couple of years ago that we’d continue to see incredible innovation and that they’d be a whole raft of really new , revolutionary ideas come about. But really it hasn’t happened? I’d struggle to name any category of so-called Web 2.0 apps that haven’t been around for at least five years and more likely ten. What’s worse is that even now it appears innovation has stalled somewhat. How many more social networks do we need?

As an online entrepreneur I wouldn’t want to be any other place, but I continue to worry that the heat and hype behind this market is going to result in a pop. Certainly, there can never be a crash like we saw in 2000 but the current level of valuations isn’t sustainable and has to correct. In 2001, being a dot com entrepreneur was up there with being a used-car salesperson in terms of credibility and respect. No-one wants to see that again.

Filed under: AJAX Challenge

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