by Josh Bernoff

In February we published research based on our expectation that interactive marketers should continue their investments in social applications with a recession potentially coming.

Today we published the results of new research that shows that many interactive marketers actually plan increases in the face of recession. (Forrester clients will be able to see the whole report, others will see a summary when clicking on the link.) We asked this question:

Assuming the economy is in a recession in the next six months, how would you change your investment in interactive marketing overall?

Of 333 interactive marketers surveyed, 26% plan to increase their interactive marketing investments, and 46% will maintain them at current levels. (13% plan a decrease and 15% aren't sure.)

Where is that money going? Here's a chart from the report.

Social networks will get the largest number of increases, over 40% of those using it, along with user-generated content, blogs, and that old standby, email marketing. Every single form of online marketing we surveyed had at least half the marketers increasing or maintaining their investment (online display ads fared the worst; based on this sample it could see more decreases than increases.)

Note that the variation in N reflects the varying number of people familiar with or using each type of marketing. But for all the major technologies we got more than 100 responses.

Are these typical of marketers in general? Remember, the respondents are interactive marketers at large and medium-sized companies and ad agencies, so you can expect a little more optimism. But I believe these results reflect a real commitment to the power of interactive marketing over traditional advertising, which always suffers in a recession.

This is also evidence that in contrast to the bubble of 2001/2002, this housing-driven downturn hasn't spread to depress all investment in new ideas. People are recognizing that in a recession, social application investments are relatively cheap and deliver measurable results, despite their newness.

Our advice to marketers, as describe in the report, is this: measure what you do, so you can justify it when the axe comes. And build assets, not campaigns, it's a better use of your money.

Marketers reading this -- do you agree with what our panel said?

by Josh Bernoff

We continually get asked by our corporate clients: why do people participate in social activity online? What drives them?

In Groundswell we tried to collect as many reasons as we could, to reflect the diversity that drives all this participation. In this post I'll list as many as I can. But this is just a start -- participation is as varied as the people who participate.

• Keeping up friendships. Facebook is about connecting with people you know, to find out what's going on with them.
• Making new friends. We’ve all heard stories of people hooking up on social networks. According to Forrester's consumer surveys, one in five online singles has viewed or participated in online dating in the past year.
• Succumbing to social pressure from existing friends. People in the groundswell want their friends there, too. Your friends, your daughter, or your golf buddies are emailing you right now, asking you to join them.
• Paying it forward. Having seen that a site is useful, you may be moved to contribute.
• The altruistic impulse. This is Flickr cofounder Caterina Fake's "culture of generosity." It's what made Wikipedia possible. People just want to help.
• The prurient impulse. People are sexy, entertaining, and stupid. All that is on display in an endless parade of exhibitionism.
• The creative impulse. If you're a photographer, a writer, or a videographer, the Web is the perfect place to show your work.
• The validation impulse. People who post information on Yahoo! Answers, for example, would like to be seen as knowledgeable experts.
• The affinity impulse. If your bowling league, your PTA, or your fellow Red Sox fans have connected online, you can join and connect with people who share your interests.

Respect this diversity. Keep it in mind as you set up your social applications. Assuming everyone wants the same thing as you do -- or as each other -- is a big mistake.

by Charlene Li

I'm often asked if Twitter is important or not, and while I'm not a major booster, I fall on the side that it's an idea and technology to watch closely. A conversation with a colleague yesterday sparked me to write this post, which has been rattling around in my brain for a while. It shows how Twitter connects people in new ways previously not possible. 

Twitter is somewhat of a new thing for me -- I'm what is described  as a "binge twitter-er", in that I go for long periods when I don't tweet anything. I'm getting a little better, using Twitter to ask questions or to share a post or link. But I do think it's particularly interesting in that it's a unique communication tool, and I thought I'd illustrate it with this example.

I'm in the midst of a launching the Groundswell book and realized that given all of the upcoming travel, that I would really benefit from a Clear pass, which allows me to skip to the front of the security lanes. I'm lucky in that the airport closest to me, SFO, has a Clear Lanes at pretty much every security area, so I can fly through. I have to say, I am absolutely loving it.

During the sign-up process (which I did back in January), I noticed an area where I can enter a discount code. A little bit of searching turned up that I could get a referral code from someone who already had a Clear pass, and we would both get a free month of service.

But how to find someone? I figured there had to be someone I knew amongst my frequent flyer friends and colleagues who had a pass....but I didn't have the time to send out an email, nor did I want to spam everyone. That's when I decided to Twitter the following:

charleneli   Signing up for flyclear.com. Does anyone have a referral code I can use? I think you'll get 1 month free. FCFS. 04:53 PM January 16, 2008

My friend, Christopher Carfi, saw my tweet and replied with the following:

 ccarfi   @charleneli: i think @anildash uses flyclear. 04:56 PM January 16, 2008 

So still in Twitter, I sent a direct message to Anil Dash at Six Apart asking him about it. Here's his response:

anildash i *love* Clear. My referrer code is *********, and i blogged about it here: http://tinyurl.com/2fhf9r 05:12 PM January 16, 2008 

(Note: Clear members aren't allowed to broadcast/publish their discount numbers, so I removed it from Anil's reply)

Now this is important to note. The time between when I put out my first tweet and Anil's response was 19 minutes. That's pretty fast, especially considering that I most of that delay was me getting around to sending Anil the direct message in the first place.

Imagine what it would have taken for me to track down, email/spam my contacts to hunt down that code. So the benefit to me was a month of Clear's $100 service, or $8.33.

I'd love to hear how Twitter has helped you get something done -- beyond sharing links, ideas, or communicating with people in your network.

And if you're thinking about getting a Clear pass, let me (or Anil) know and we can "make" another $8.33 together!

by Josh Bernoff

Jennifer Jones of Marketing Voices inteviewed me for Podtech.net about social applications in a recession.  They featured this on their home page for a while.

I've embedded the Podcast here for your convenience.

by Charlene Li

On Monday, I gave the kick off speech for the Graphing Social Patterns West conference on the topic, “The Future Of Social Networks” (slides are available on SlideShare, summaries available on News.com, ReadWriteWeb, and allfacebook.) Note that this is still ongoing research, so I welcome your comments.

I set my time frame for the long term – five, even ten years out. That’s because unless we know where we want to end up, how could we ever craft a strategy to get there? For inspiration, I thought about my grade-school kids, who in ten years will be in the midst of social network engagement. I believe they (and we) will look back to 2008 and think it archaic and quaint that we had to go to a destination like Facebook or LinkedIn to “be social”.

Instead, I believe that in the future, social networks will be like air. They will be anywhere and everywhere we need and want them to be. And also, without that social context in our connected lives, we won’t really feel like we are truly living and alive, just as without sufficient air, we won’t really be able to breathe deeply.

There are four components of what I’m calling this idea of “ubiquitous social networks”: 1) Profiles; 2) Relationships; 3) Activities; and 4) Business models. These aren’t new -- I wrote about the first three in my original report on social networks back in May 2004. But in the context of ubiquitous social networks, they will develop into the following: 1) Universal identities; 2) A single social graph; 3) Social context for activities; and 4) Social influence defining marketing value. For more detail on each of these components, see the extended post (warning: it's really long!).

The ubiquitous social network isn’t going to happen overnight – in fact, it’s going to take five+ years to come to fruition. This is part of the continued evolution of open platforms, starting with walled garden services like Prodigy, Compuserve, and AOL that evolved into the major portal aggregators like Yahoo!, MSN, and AOL. This gave way to the “search era” where Google et. al. made all of the Internet easily accessible. Today’s social networks are a throwback to those early closed platforms, and they will be opened up by new “entrants” into the social space – namely, Yahoo!, Microsoft, Google, and AOL – who will leverage their deep, daily relationships with online audiences.

In the end, there are two essential things that have to present for this all to happen. The first is technology -- ubiquitous Internet access and the servers to enable real-time social graph access. Given the pace of technology development, I'm pretty sure this will happen. The second is much harder -- trust has to be present, between people, between social networks, marketers, and developers. This is what is going take a lot of time, effort, and patience, but the optimist in me thinks that it will come. That's because people will press for it, demanding that sites and applications adhere to a Bill of Rights for users of the Social Web.

So what is a social network, marketer, or developer to do? Here are my recommendations:

• Create linkages between services based on individually-controlled identity federation
• Compete on creating the most compelling social experience, not social graph lock-in
• Develop social applications that have meaning
• Integrate social networks into existing activities
• Design business models that reflect the value created by people’s social network

In the extended post (click on "More" below) is a more detailed explanation of how I see each of the four components of ubiquitous social networks developing.

As I mentioned above, this is ongoing research and I'm far from done. So if you have ideas, comments, criticisms, or examples, let me know via comments below or email at cli at forrester dot com.

by Josh Bernoff

When Kevin Rose and Alex Albrecht invited me to watch their live Diggnation podcast recording in St. Louis (we were both there to connect with some of Anheuser Busch's marketing staff) here's what I imagined: a camera set up in a bar with two guys talking, and patrons walking by and wondering what was up.

Boy was I wrong. Here's what it was really like:

300 rowdy, screaming people crammed into a performance space, cheering, interrupting, and grooving on being in the same room with somebody they admire. Love. Are into. Kevin and Alex got a treatment that wouldn't have seemed unusual for Sacha Baron Cohen or Jennifer Jessica Simpson.

Who are these guys?

Kevin was an on-air personality on TechTV and created Digg, the site where people vote on the news stories they consider most worth reading. The Diggnation podcast is an outgrowth of that site, an on-air review of the stories that matter to Digg members. It's part of a lineup of shows put on by Revision3, run by Kevin's ex-TechTV crony Jim Louderback.

But what it really is, is two guys on a couch, drinking and shooting the bull with the tens of thousands of people they know care about the same things as them -- which means tech, but also other news. Among the stories Kevin and Alex highlighted this week were the new Indiana Jones trailer, the death of the HD DVD format, and . . . Castro's retirement. Yup. They think a new government in Cuba is cool. Not as cool as Indiana Jones, but close.

Flush your idea of digg's audience down the toilet. First, all they had to do was announce they were coming to Saint Louis and hordes of people people showed up. I met or heard about people who drove all the way from Kansas City (four hours) and Minneapolis (more like ten). The audience was about 25% women. And while it was dominated by 21-30 year olds, you would be hard pressed to call these folks technogeeks. These were just people who enjoyed being part of an idea -- the idea of a guy on the net saying and doing whatever he feels like.

Diggnation's sales manager told me they charge $16K for a sponsorship. Kevin and Alex talk about the sponsors on air, like Johnny Carson used to do, but with a lot more profanity (and real enthusiasm). There is no focus group. There is just a guy who knows what his audience wants -- because, after all, he has a Web site where they vote on it.

Do you think big media can really get their heads around this? Any of it? I don't think so.

Note: I'm embedding last week's podcast since this week's isn't edited yet. When it comes out I'll replace it. Now you can see what I saw (below). Profanity included.

by Josh Bernoff

I got a fair amount of pickup on my recession post, including articles in AdWeek and MediaPost, and mentions a bunch of blogs including Logic+Emotion, Web Strategist (my colleague Jeremiah), Micropersuasion, ZDNet, and even Techmeme. There was also this interesting post from Bernard Lunn at ReadWriteWeb, "This is not our bubble," which looks at how the recession will affect entrepreneurs and venture investments.

There was plenty of cheering from the social sphere, along with some jeering, too. But I think some people missed the point (or more likely, I wasn't clear enough about what the point was).

I say social applications and not social media for a reason. People will want to boost word of mouth in a recession. This is great news if you're selling community apps to companies. It's also good news for Facebook community applications and groups. You're a company and you want to charge up your citizen marketers about your product -- you can build your own application or climb on board an existing network and work within it.

This is not good news for plain old banner ads, or any other form of CPM-based, brand-based advertising. That includes banner ads in Facebook. Raw monetization of traffic won't be worth any more in a recession -- it will be worth less, since awareness-building will be less important.

What does this mean?

First of all, it means that Facebook, Myspace, et. al need to continue to work harder on innovative ways to create social advertising opportunities that are more creative and less intrusive than Beacon v1. Is the recession good or bad for the big social networking sites? Depends on how soon they can get those ad formats working.

Second, it means all those me-too, social-network with a twist startups who don't have a monetization plan, or whose plan is dependent on traffic=advertising, are in trouble. This is social media -- media being defined as ways to turn traffic into advertising. Not a good place to be sitting in a recession, when marketers are looking for scale and interaction and persuasion, not just impressions.

by Josh Bernoff

Is a recession coming? Don't ask me -- I'm not an economist, and even the economists don't really know. But if it's anything like the last recession, advertising will plummet and experimental media will crater. (In the 2001 recession, US advertising dropped 9% and Internet advertising plummeted 27%, according to Veronis Suhler Stevenson.)

But do not panic. Things are different this time.

Here's what smart marketers should know:

• It's not a tech bubble. The last recession was caused by the dot-com bubble and the terrorist attacks. There was a lot of ignorant money out there chasing illusory opportunity, and companies had overinvested in technology. This time, the precipitating event is a housing bubble, and technology spending is not irrational.

• Awareness ads will lose effectiveness. Advertising (or as we often call it, "shouting") is mostly about generating awareness and reinforcing brands. In a recession, ordinary consumers like you and me aren't as willing to spend. Sure, we'll be aware of the product, but that doesn't make so much difference when you're worried about your future. Advertising is expensive and is a lot easier to cut than headcount. Many are predicting ad spending will hold up; I'm not so sure.

• But social applications are about consideration, not awareness. Blogs, word of mouth, social networks . . . they're about people connecting with other people. You may resist advertising if your finances are tight, but if your bud tells you that new movie is really worth seeing or that the Gap has the cutest new tops, that's more persuasive than advertising. Basically, in a recession, the consideration phase is more important than awareness -- and that's where advertising flops and social applications succeed.

• It's cheap. Social applications can be nearly free (think blogs, Ning.com, facebook pages) and even more sophisticated communities are typically $30K to $200K -- a lot cheaper than a significant sized ad campaign. After our last post, all the responses were positive. One interactive marketer from a highly cyclical company told us this:

"Budgets are tight in light of the economic conditions as you surmise, but [the budget for social applications] has not been impacted. We are still keen to move forward with our trial and have support….at this point anyway.  Interactive in general has been more protected than other comms areas and saw an increase."

• It's measurable. If your social application doesn't have a measurable output, you'd better get one. But if it does -- if it generates leads, or conversions, or buzz, or something useful -- then you can prove it's working. beinggirl.com is four times as effective as TV ads, Procter & Gamble told us. That won't get cut in a recession.

These same arguments apply to some other forms of online marketing, including search ads and email marketing. Those are going to be good investments in a recession. If you're smart, you'll position yourself now with proof your apps are working. Then when the ad dollars get tight, you'll be in good shape.

Click here to see what we wrote for our clients (we've made this piece of research free for everyone).

Also on this topic, see also David Armano's post on 10 ways digital can help you thrive in a recession. And an earlier Paul LaMonica post (CNN Money) featuring my old colleague Jim Nail.

Finally: I'm anticipating this topic might get some currency around the blogosphere and the mediasphere . . . if you want to follow the reactions, tune in to my twitter feed at twitter.com/jbernoff

by Josh Bernoff

I'm just curious -- corporate social strategists: Are you getting pushback in the face of the potential recession? Are your budgets being cut? Or maybe increased?

Add your comments here or email me at jbernoff (at) forrester.com -- I'd love to hear from you.

by Charlene Li

The video highlights from our Consumer Forum 2007 are now available. Josh and I were keynotes and we spoke in details about some of the key highlights from our book. Below is a summary of the keynote speakers and speech topics. In particular, I highly recommend the speeches by Christie Hefner and Henry Jenkins.

***Note that you need to use Internet Explorer to use the navigation and see the slides.***

By Jeremiah Owyang, insight from Charlene Li and Shar VanBoskirk.  This is also being cross-posted on the Jeremiah's Web Strategist Blog and the  Forrester Marketing Blog. 

Executive Summary
Both Facebook and MySpace have launched profile and network targeted advertising and marketing products. As they both use member interests and the communities which they are part of, trust continues to become key in adoption as information is passed along the network. The sheer size of MySpace’s member base, as well as the thriving local business membership will lead to success. Facebook, which brings a unique solution evolves advertisements to endorsements and encourages members to subscribe to a brand in what we are calling “Fan-Sumers” (an evolution of the consumer). As consumers share their affinities, brands can advertise using trusted social relationships.

Data: Highest trust comes from friends or acquaintances

(Left Graph: Consumers trust their friends and acquaintances far more than any other sources –Report: Leveraging User-Generated Content, 2007)

Trust is and will continue to be one of the most important attributes in the decision making process. 

Communities form online, trust develops
How we get information continues to evolve as communities form online organized by individuals with similar interests. Just like in real life, we identify our interests, and are often influenced by opinions and experiences of trusted peers in our communities. For many, social networking sites embody these relationships and influence how trusted decisions are made.

MySpace: Brands have a home and can hyper-target ads
The already active MySpace platform is leveraging their already active member profile pages, encouraging the many small and medium businesses to setup a online storefront and providing tools to make it easy to self-serve advertisements to their customers. It’s easy to make the case that demand and inventory are present.

Webmaster not needed: MySpace profile for businesses
Small businesses can continue to build their online profile on MySpace (many of them already have), but now, because of their familiarity with self-marketing (restaurant, nightclub, and other local businesses and their customers) on Myspace.

Self-service ads remove middle man
When friction is removed, efficiency is created. With MySpace’s “Self-Service” ad network small businesese can target ads across a variety of affinities (over 300) and deploy ads on users’ profile pages. These ads, which should (by theory) be relevant and contextual to a user who has self-populated their profile page will have these ads displayed.

Advertising balance required in already busy MySpace
With marketers already with a strong presence in MySpace this could continue to erode away at early adopter “cool kids” from embracing MySpace. But as cycles have shown, where communities form, marketers follow.

User experience continues to be free-form
These ads, which will conform to IAB advertising standards (sizes) will give advertisers the freedom to create the ads in the style accustomed to the network. Yes, expect more blinking text.

To watch: OpenSocial
As OpenSocial starts to be deployed across MySpace and other partners, expect profile ads to be tied to widgets and vice versa; a fabric of links. I’ve already outlined How to explain OpenSocial to your executives.

Inaccurate user profiles could result in mis-targeting of ads
We know that many members do not make their profiles accurate which could yield inconsistencies in how and where ads are displayed. While MySpace has assured they’re accounting for rogue outliers, expect some inefficiencies in advertisements.

Our Call: Sheer mass will yield success
We think this to be a win for MySpace, given their great reach, there are millions of users with active profiles, and there’s also plenty of inventory as many small and local businesses that are present will be comfortable deploying ads where their community already exists.

Facebook: Rise of the Fan-Sumer
Going beyond just profile matching of advertisements, Facebook allows consumers to self-identify with brands and becoming fans. In turn, brands can use these “Fan-Sumers” as endorsers to their own trusted networks, resulting in trusted word-of-mouth. Brands can also self-manage their own campaigns, and there’s some unique opportunities for eCommerce widgets or applications to be part of this formula.

There are three major components to today’s announcement, they include the following:

1) Facebook Pages: Brands get their own profile
For the first time, businesses will legitimately be able to setup profile pages, much like MySpace’s business profiles feature. Next, Facebook members will add these brands as ‘fans’ (much like friends) and this will produce a connection between the parties. Members will self-identify with brands in what we are calling “Fan-Sumers”. Furthermore, this service, called “Beacon” gives third parties the ability to share information on the newsfeed and provides lots of unique opportunities. Sponsored groups will start to evolve into this new form brand profile as this system gets adopted.

2) SocialAds: Endorsements at the friend level lead to eCommerce
Once a member has indicated they are a fan of a brand, that brand can choose to purchase SocialAds (from Facebook Sales or via a self-service platform). A unique endorsement of a product or brand will now appear on that individuals news feed or banner or skyscraper ads. Advertisers can purchase social ads target by profile demographics and profiles, as well as by activities done in Facebook. Payment is an auction-based system available to marketers via both CPM and CPC pricing.

3) Use “Insight” for control and flexibility
This self-service dashboard called Insight gives the marketer detailed knowledge how their advertising campaign is working on Facebook. It’s expected that advertisers will have flexibility, control over the type of ads they deploy, in what quantity, and the demographics they want to target.

A likely scenario:
Shauna, who enjoys Revlon products, indicates she’s a fan of the brand and becomes a Fan-Sumer. Marketers at Revlon can then purchase SocialAds, which will then display on Shauna’s newsfeed or on ads on her profile. If Shauna purchases Revlon makeup from Amazon, her newsfeed could indicate an eCommerce links recommending it to her 100 trusted friends, resulting in further sales.

Implications for Facebook:

Members have more control over ads
Facebook users can opt to turn off social ads, and friends of that user can ‘dial down’ endorsements they see using preferences. We believe that Facebook is attempting to respect the rights of users by giving control to members to ‘opt-in’ to become a Fan-Sumer.

Quest for Fans will cause brands to beg
Since social ads only work if a member has indicated they are a fan, brands will be working to earn and buy fans to accept them as members. Expect a lot of noise to be generated from this activity as brands run campaigns to encourage members to add them as fans through discussion boards, banner ads, and special offers.

Hard to qualify a “business”
Facebook is limiting these features to ‘real’ businesses and organizations. Expect an entire team to be crawling and dealing with this qualifying the issue. As recent member accounts have been disabled from Facebook, expect businesses and organizations to encounter same issues.

Limited ad supply to raise prices
Because Facebook members will see only two social ads per day, we expect the supply of ads to be in scarce supply and thus raising prices and not matching the value. This could shift ad buying to large brands who have experience buying and managing search and direct response ads.

Our Call: Brand affinity leads to community endorsements and more trusted marketing.
We see this as a win for Facebook, this highly targeted system isn’t just about web advertising but about brand affinity and hooks into what’s really important, trusted endorsements from people in a network. This truly is the next generation of advertising. Facebook tells us that the worst case it will be 2 times click through rate over the performance of (existing is 4-26%)

Next Steps For Brands

Experiment: Because of the control and flexibility, we recommend to brands that are currently on either of these social networks to experiment and test.

Learn how to efficiently manage your campaigns. There’s clearly a trend towards self-service, which provides efficiencies for both businesses and the platforms.

To know: Marketing has changed, advertising is no longer a sole-solution. Marketers must also learn how to be part of communities, engage with them, and be part of the conversation.

To know: Marketing is now distributed, brands must embrace communities where they currently exist, rather than solely driving them to their corporate website.

This digest not only explains what is happening, but why it matters to you. If this was helpful, please pass it on. Love to hear your thoughts, please leave a comment, even if you don’t agree.

by Josh Bernoff

The San Jose Mercury News, among others, is reporting that Google's YouTube will begin checking content for copyrights, specifically in a test with Disney and Time Warner's content. They finally admitted they are using Audible Magic's clever system for checking copyrighted music, which the Merc reported earlier but Google wouldn't confirm.

Now Google is asking copyright holders to send them copies of videos to check against. Mark Cuban, ever the copyright defender and YouTube attacker, cried foul at that one.

Now I'll tell you what's really happening here (in my analyst's opinion).

Google will indeed start "fingerprinting" and indexing any video copyright holders send it. It will even get around to using this to block video content that it can identify that way, just as it is promising. This blocking will be poor at first -- it's hard to recognize video content -- but it will get better over time. (It won't stop the Viacom suit, though.)

In the meantime, Google will start to assemble an (internal) collection of copyrighted video. No, they won't steal it or publish it. But as they develop algorithms for identifying video by machine, they can use this collection as a test. Does our algorithm correctly identify the last episode of "The Sopranos," the "Daily Show" from last Tuesday, the evening news from WMUR Manchester for April 1, 2007? Can we really tell when Cameron Diaz was the guest on the Tonight Show using our face recognition algorithm? And so on.

There are hundreds of thousands of hours of professional video produced every day all around the world. This adds up to way more than the 10 million or so music tracks Audible Magic is collecting -- by orders of magnitude. Audible Magic has a great asset -- all the music labels send it all their music for indexing. If Google gets its way, all those video producers will pipe their video into Google, with descriptions, every day. Every movie and all the DVD extras. Every TV show. Every commercial. Every baseball game and cricket match. Every music video. Everything. And that, my friends, is a pretty good repository to test your video search on.

This is just what Google needs to make a video search that doesn't suck. And since everybody's else's video search sucks, that will be an incredible edge for Google.

Tags: YouTube, copyrights, Viacom, Google, Audible Magic, video search, bernoff, Forrester Research, Groundswell

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By Charlene Li

Twitter has been hailed as "a total waste of time" to "the next generation IM". The site allows users to easily and frequently update what they are doing, through a Web browser, IM, or text message. It's been quite the buzz among early adopters -- Hitwise has some data on Twitter's growth. Robert Scoble calls it "blogging mated with IM" and is a frequent user. I've set up an account too, but I find it darn hard to remember to Twitter (I've set it up to nudge me every 24 hours, but I usually ignore it, my bad). And Mat Balez has a great post on why he thinks Twitter will be dead before the end of the year.

Here's our take: Twitter is going to be overused, overload people, who will then get turned off. There is just simply too much noise and not enough valuable "signal" to be worthwhile. I run into a case of TMI - too much information -- in that I don't really need to know that you're heading to the bathroom, etc.

Yet, I think there is real potential for a service like Twitter in several areas: 1) for small, trusted groups to keep up to date with each other; 2) publishing information easily; and 3) as an aggregator of information. Here are some more details:

1) Keeping in touch with people that matter. This is a service that my mother would love -- she always wants to know what I'm doing. The same thing applies to the workplace where team members can provide regular updates on their activities. This would be especially helpful on a project where fast communication can be a real advantage. For example, Disney has used blogs to track engineering activities - what if they could use a Twitter interface to do quick updates? There are several other enterprise ideas (collected by Kim Bayne) including a feedback channel for customer service, marketing ticker for press, and monitoring of system status. Crucial to this is the ability to segment your Twitter life into different areas -- my co-workers don't really need to know what I did over the weekend with my kids, and vice versa. Permissions make this a hairy nut to crack, but I think it's essential to make the Twitter pages more relevant to each of my social circles.
2) Easy publication. Up to now, user-generated content took a lot of work. But with Twitter, the idea is to make it so easy that you do it all the time -- you only have 140 characters in which to do this. But this is still hard, so some of the more promising innovations include TwiTunes that adds the current track you're listening to in iTunes to Twitter. My favorite is autotwit, which allows you to schedule future posts. But I can see a time when I could simply have Twitter updated from my Outlook Calendar. Permission controls again, will be essential.
3) Information aggregation and mashups. I can get Twitter Weather, as well as Tube Twitter which gives updates for specific London Underground lines. There are also mashups like Twittermaps.com, which uses specific tagging in Twitter to map your locations -- you write a post "L:94404" or any other geocodable location and you show up on a map. Cool, but not that useful. Even more interesting is Dealtagger.com, which allows any deals that you tag on the service to also show up on Twitter.

Intrigued? I certainly am. I still take the current Twitter-mania with a huge grain of salt, mostly because in its current state Twitter is going appeal only to a small subset of people who enjoy publicly sharing what they are doing. But watch out -- I think that like IM, blogging, and social networking, services like Twitter will evolve with new features and functionality to actually become useful communication and information tools.

Want more examples? Check out the Twitter Wiki for the latest. And please, let us know how you see a service like Twitter evolving.

Tags: Groundswell, Forrester, twitter

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By Josh Bernoff

Reading Steve Rubel's post on how to stop people stealing blog designs was interesting, but with music and movies getting ripped off left and right why is it at the top of the list to protect blog designs? Obviously because it hits close to home --this is our stuff you're stealing now, not corporate stuff.

This called to mind an experience I had a few years back with peer-to-peer company LimeWire in which an executive there told me the company made its money selling the professional version of its peer-to-peer client. Since LimeWire was widely used to share (steal?) copyrighted music, I had to ask "does anyone use peer-to-peer to steal LimeWire's professional version." The LimeWire guy was shocked, shocked!, at the idea that people would steal code -- the fruit of their labors.

The same sort of irony came to the fore when YouTube threatened TechCrunch over its articles about tools that allows people to download videos from YouTube.

This leads me to the following definitions:

Fair use is when I use your content.

Piracy is when you use my content.

Tags: PR, piracy, fair use, bernoff, Forrester Research, Groundswell

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The anticipated Yahoo! reorg hit tonight -- the press release with all of the details is up on Yahoo!'s site, as well as stories in the WSJ and CNET. Here's a quick summary and my take of the announcement.

Yahoo! will be reorged into three groups:

1) Audience Group, focused on audience building. Note that this is not about content creation, but instead, "focused on building the largest and most valuable audiences and relationships on and off the Yahoo! network". Kudos to Yahoo! for understanding that this is not about creating more and more content destinations a la Yahoo! Food, but creating new experiences, especially with social media. Despite Yahoo!'s acquisitions of Web 2.0 darlings like Flickr and del.icio.us, Yahoo!'s social media initiatives remain mostly isolated, siloed products like Yahoo! Answers. The key to their success: spreading the social media mindset far and wide into all of the dark corners of Yahoo!.

One other key thing to note: Yahoo! recognizes that the audience relationships are key both "on and off the Yahoo! network". I think this is a huge recognition that the world does not revolve around the the yahoo.com domain and is moving into the mobile and devices space. I'm also looking forward to seeing the expansion of Yahoo! Widgets beyond desktop widgets and into more Web-based widgets a la Google Gadgets for Web pages.

Of all the groups, I think this is the one that will make or break Yahoo!'s strategy. In the end, the race is not to be the best search engine technology-wise, or to have the most advertisers. It's about being relevant to your audience, no matter where they go or what they do. This has always been Yahoo!'s core strength and I'm glad to see they are putting it front and center where it belongs. Now, they have this small detail of hiring an executive to lead this group....

2) Advertisers & Publishers Group. In what is being seen as a CEO-grooming move, current Yahoo! CFO Susan Decker will be shifting over to the revenue generating side of the business. A key challenge: regaining momentum lost with the delay in launching the new search advertising platform. But even more important will be the integration of Yahoo!'s leading brand advertising solutions with search -- a potentially powerful and potent advertising offering that ties bridges the consideration gap between brand awareness and purchase.

3) Technology Group. This group centralizes technology development under CTO Farzad Nazem. This means that core platform infrastructure -- like social media, search, communication, and very importantly, profile/identity management will be under one unified roof. In the past, there appeared to be individual product teams developing these core technologies in isolation of each other. The most glaring example is identity. I actually have TWO profiles on Yahoo! -- one that's associated with my Yahoo! account and another that's part of my Yahoo! 360 page. The new centralized technology group will certainly help rationalize such inconsistencies, but a key challenge will be maintaining that consistency while giving enough room to allow developers to innovate broadly -- and quickly.

One last thing of note: the press release contained a coherent mission statement for Yahoo! -- "to connect people to their passions, their communities, and the world's knowledge." I really like this because it puts "people" at the center of Yahoo!'s strategy. Compare this to Google's mission "to organize the world's information" and you get an idea of how each company's battle plan. I have been a long-time Yahoo! user and this past year saw my slow defection from Yahoo! Mail to Gmail and Yahoo! Calendar to Google Calendar. I still use Yahoo! Maps for local searches, but am finding my loyalty shifting there as well to Google Maps simply because of the availability of the Google search box in my browser. It breaks my heart, because I do have this emotional attachment to Yahoo! and would love to give them a chance to win back more of my online experiences.

So kudos to Yahoo! for taking the bold, tough move -- I'm looking forward to seeing what transpires in the next few months. I'd love to hear what you think of the reorg -- and what you think Yahoo!'s biggest challenges going forward will be. How could Yahoo! win *your* loyalty?


Technorati Tags: yahoo, reorg, google

So here’s the next big rumor – that Google will buy YouTube for $1.6 billionM. The WSJ article, the TechCrunch post had some of the early takes, but rather than add to the furor of whether the rumor is true or not, I’m going to focus on why Google and YouTube would be interested in working together.

Here’s my quick take on the rumored acquisition:

Why would Google buy YouTube? To start, 35 million users in the US and 100 million daily video views. But it’s not just the sheer numbers that grabs Google’s attention. YouTube is a gem because it figured out what Google, Yahoo!, MSN, AOL, and all of the other video players in the marketplace couldn’t – that it’s not about the video. It’s really about the community that’s around the video.

Take a look at the screenshot below of the same “Extreme Diet Coke And Mentos Experiment” video on YouTube and Google Video. You’ll notice that YouTube has many things you can do with the video – rate it, save it to favorites, comment on it, share it, see other related videos, and view the user’s playlists, etc. I think you get the idea.

Then take a look at the Google screenshot. Let’s see… you can add a comment (that’s new). There are a few other additional features like browsing related videos or via tags. But clearly, the focus is on the big, dominant video player.

YouTube is winning the hearts of the audience because video search simply doesn’t work. You have to instead rely on the opinions, ratings, and playlist compilations of others to discover good video. 

Why would YouTube want to be bought by Google? My colleagues, Josh Bernoff and Ted Schadler, discussed earlier this week in their blogs that earlier this week that YouTube faces substantial risk with lawsuits coming from music and video copyright holders, and how they could potentially address those concerns – namely by developing technologies to identify copyrighted materials against a body of work provided by the copyright holders. But who is in a better position to develop that technology – 60 burnt out people at YouTube or the legendary technical minds at Google?

Moreover, Josh points out that YouTube faces potential “cease and decease” actions from copyright holders, and risks following in the footsteps of Napster where it could its activities can be seriously compromised. But this morning, Josh and I discussed that a copyright holder would be much more likely to negotiate and partner with Google than a start-up like YouTube. Update: Josh just posted his thoughts on the rumored acquisition as well.

Is YouTube worth $1.6B? You betcha. That’s 4 cents per video stream ($1.6B divided by 100 million daily views * 365 days) and it’s still growing. Another way to think of it is that YouTube has roughly 50 million users (35M in the US according to Nielsen NetRatings, and probably another 15M worldwide) which comes out to $32 per user. It’s high, but it’s also reasonable.

Granted, YouTube is just beginning to monetize its audience, but having access to  Google’s über-ad network gives it a huge leg up. But this is where I hope YouTube stays the course in not cluttering up its unique interface with sponsored text ads, or its video experience with pre- and post-roll video ads.

The real opportunity for YouTube is to create a completely different kind of advertising form, one that is based on community engagement and involvement, rather than the traditional interruptive style of advertising. Take a look at their home page – here’s a screenshot from today. There’s a small text link to a “Follow the Finger” video contest sponsored by Butterfinger (screenshot also included). Advertisers are loathed to develop these special campaigns together – they would much rather slap on existing banners and promotions. But given the size and attractiveness of the YouTube audience, the site can command not only top dollar with exclusiveness, but also demand that advertisers adhere to specific standards that guarantee the best user experience.

If the acquisition goes forward, Google will be pressured to quickly realize a return on its first major investment. My hope is that Google will resist the temptation to turn YouTube into yet another cluttered ad space and allow the company to push advertisers into this new, engaged form of advertising.

Google Finance launched tonight – I had a sneak peak from Google last week and got a chance to play with it a bit after it went live tonight. I also had a chance to speak with a Yahoo! spokesperson after the Google site launched and was able to get their reaction. Here’s my quick take on the new service and what it means:

There are three new features in Google Finance that stood out for me:

-         Search. No need to know the ticker symbol of a company. I could type in company names like Home Depot and Target, and get the full information page in a wink. On Yahoo! Finance, MSN Money, and Marketwatch.com, I have to know the ticker symbol. And even when I use the lookup, especially for Target, I get a long list of companies with the name “target” in them. Finally, I don’t feel like a dummy when trying to look up companies!

-         Charts. Google took a page from its Maps product and makes the charts interactive – you can drag them back and forth over time to see how prices have changed, without having to wait for the page to refresh. Another nice feature – key new s stories are mapped out on the chart (see the screenshot above).

-         Community advocates on message boards. Google will have as part of every publicly traded company, a message board that is a part of Google Groups. Taking a page from the popular Yahoo! Finance message boards, Google has created a discussion area for every publicly traded company (or so it appears). Inappropriate and spam postings have always been the bane of the Yahoo! boards, so Google’s put in place a few things, most notably the use of employees (yes, employees!) who will police the boards. What strikes me as ironic is that rather than employ technology to solve the problem, Google is using people to monitor the boards, in much the same way they review the content for search ads. Amazingly, there is no ability for users to flag posts for review – if quality is important, why doesn’t Google leverage its users to be the front lines in the fight for quality?

So overall, Google has done a very, very nice job pulling together a financial portal. Oops, did I just say “portal”? Sure looks like Google is pursuing that strategy now, doesn’t it! And rightly so – just take a look at the discussion board about Google and you’ll see person after person saying that they are defecting from their current finance site (mostly Yahoo!) to use Google.

But I frankly think that we won’t be seeing a mass migration of people from other finance sites to Google anytime soon. The most obvious defectors will be Google enthusiasts – they won’t be able to wait to add Google Finance to their personalized home page. But I believe that most mainstream financial site users will stick with their current sources for now, primarily because it’s simply a pain to have to re-enter your detailed portfolio information again! Are nice charts and company look-ups enough to shift people over to Google Finance? And don’t forget that Yahoo! and MSN have invested heavily in producing their own content, and I fully expect that they will improve their search, charts, and boards quickly as well.

But these features are all window dressing. In the end, Google Finance is a definite improvement on existing services, but it didn’t blow me away. It felt like it was incremental improvements rather than something that fundamentally changed the financial site game.

I believe that Yahoo! actually has the opportunity to change the game, but only if it taps into its nascent social computing strategy. For example, it may give users the technology to rank posts on quality or flag inappropriate posts. But also think about the power of tags on posts, or the ability to see rich profiles that enable users to connect with each other based on their similar investment goals. Think of a social network where I could find working moms who have to balance saving for college, retirement -- and are in the midst of building a house.

So kudos to Google for launching a nice new site that ups the ante, but don’t rest on your laurels for long – your competitors will quickly match you feature for feature, and raise you with their larger installed user bases.