Web 2.0 Revenue Models ?? Drama 2.0 Weights In

Web critic blog – Drama 2.0 has a post about the realities of Web 2.0. Not  to toot my own horm but if you’re interested in Web 2.0 business models just read my posts from the past 2 years – the monetization answers are there.

Here’s the conclusion that Drama 2.0 came up with – pretty right on.

As we head into 2009 facing one of the toughest economic environments in decades knowing that the fun and games are over, it’s time to face the reality: the Web 2.0 we have today is not the Web 2.0 we envisioned a few short years ago.

The most popular Web 2.0 creations have not been cheap to grow and operate. They’re still struggling to find revenue models that will serve as the foundations of self-sustaining businesses and even those startups that generate significant revenue in absolute terms (namely Facebook) cannot justify the valuations they’ve been given. And profitability is still largely a pipe dream.

While it’s possible that Web 2.0 stars like Facebook, Digg and Twitter will turn things around, it’s quite clear that these companies are not like many of their hot Web 1.0 counterparts, which, despite having to battle challenges of their own, were able to develop viable revenue models and turn a profit relatively early on.

Given all this, for Web 2.0 proponents who continue to make the same asinine argument, “Don’t treat Web 2.0 like Web 1.0!”, it’s 2009 and I concede defeat. Web 2.0 is not like Web 1.0. It’s in a special (ed) class of its own.

Web 2.0 Art By Sean Tiner – Pretty Cool Stuff

Sean Tiner recently created this portrait of me.

furrier20art

It’s part of Faces, an ongoing social media art series that he started at the beginning of 2008. To launch the art series, Tiner first created 50 portraits of friends from Facebook and posted the artwork on the social networking site. He theorized that by posting the portraits and tagging his Facebook friends in the portraits, it would help to create awareness and interest in his artwork. Following the first 50 portraits, Tiner started created portraits of people that he found interesting, including Seth Godin, Darren Rose, and Chris Brogan.

I’m honored that Tiner has included me in his portrait series and look forward to seeing more of the series as it unfolds. To view more of his series check out his blog or view his eBook (I’m on page #57).

New York Times – A Failed Ad Strategy

New York Times is now selling ads on their front page. I have to say that I didn’t even notice.  This is the reason why it’s a failed strategy.  Trend is away from print to online and that is where the NYTimes should be focused.  Not only are web users not clicking on display ads, a new crop of software led by Adblocker Plus is blocking all the ads.  Adblocker Plus used on about 10% of all web users is quietly gaining ground as a tool for end users.  I wonder if the New York Times will see the impact of the fact that display ads are being blocked.

From Adage.

The New York Times unveiled a display ad on its front page, despite decades of fear that advertising there could contaminate the journalistic product or brand.

New York Times front page ad

Enlarge
Today’s ad, which promotes CBS, occupies a strip of real estate two and a half inches high at the very bottom of page A1.

Today’s ad, which promotes CBS, occupies a strip of real estate two and a half inches high at the very bottom of page A1. That makes the unit less noticeable than the boxes available on the front of Rupert Murdoch’s Wall Street Journal, but it’s still a big departure for the Times.

In a statement this morning, the Times pitched the turnabout as win for marketers. “In 2006 we began testing ads on some section fronts and received a very positive response from the advertising community,” said Denise Warren, senior VP-chief advertising officer for the New York Times Media Group.

Taking its situation seriously
But it’s also a clear reflection that the Times is taking its situation seriously, something that was questioned after a recent presentation to investors and analysts. The New York Times Co. finally cut its costly dividend payments last November but drew fire for failing to suspend them altogether. “It just seems the reality is it’s a very, very difficult business right now, newspapers,” a questioner told executives. “And the notion that cash is flowing out of the company to the equity seems — it seems like you may not understand the gravity of the situation.”

In a funny way, the awful business environment may have actually freed the business side to sell the ads without worrying about an outcry from the newsroom.

“While three years ago the notion of the august New York Times serving up front-page ads would have stirred emotions far and wide, today it’s a one-day story,” said Ken Doctor, a newspaper vet turned media analyst for Outsell, a research and advisory firm. “When someone doesn’t have enough to eat, he doesn’t quibble about the source of the food.”

Made their peace
Many other papers have already made their peace with front-page advertising. The Journal began selling front-page units in 2006, carefully milking their potential to get big commitments from the five marketers allowed to buy them each year.

“Every single purchase has with it an annual commitment, an online commitment,” said Michael Rooney, chief revenue officer at Journal parent Dow Jones. “Some are multiyear, and some are global as well.”

With such prominent ad units, of course, it’s easy to wonder how the big articles next to them hurt or enhance their effectiveness. General Motors and Hewlett-Packard ads have bumped up against negative coverage of their own companies.

The front of the Journal’s Marketplace section today, on the other hand, shows an Oracle ad next to an article pegged to the Consumer Electronics Show. That’s an adjacency Oracle might have liked to arrange — which in turn is a possible suspicion that bothers opponents of these ads. Mr. Rooney said the paper never talks about news articles with advertisers. “It’s just not a conversation we would ever have,” he said. “Whether it’s the B section, the A section or anywhere in the paper, we sell our audience.”

Off the table
Last June The Washington Post’s new publisher, Katharine Weymouth, told Ad Age that front-page ads remained off the table. “I’ve had advertisers beg me to put ads on the front page, and we’re not ready to do that,” she said. The same goes for ads on Post-it notes affixed to the paper. “We declined to do that because we thought it cheapened the front page.”

Since then, of course, the economy has worsened dramatically. The Washington Post Co. saw print-ad revenue at its newspapers fall 14% in the third quarter.

This morning Ms. Weymouth confirmed, however, that the Post still doesn’t sell front-page ads. “No,” she e-mailed Ad Age. “The Washington Post does not currently accept front-page ads in our print edition.”

Secrets of the Web 2.0 World – What Secrets? 2009 Prediction – Groups Become Productive

Wall Street Journal posts a story about the secrets of the web 2.0 world. The issue is “What Secrets?”.

Web 2.0 is a phenom that is disrupting all industries. The Social Web or whatever you call it has arrived. The idea that it’s just a marketing platform is only one thread of the benefits of Web 2.0. Sure having engaged users is great, but what about the impact on invention, learning, collaboration, user experience, new venture creation,.. etc. The Web 2.0 phenom will create massive change.

What Secrets?

Web 2.0 isn’t some unknown thing. Many think there are secrets but it’s pretty simple the web connects people and people work together. The core issue is that no one has figured out what it is and how to harness it. That is the public little secret. Many of my friends are building companies to enable this new discovery. The innovation will come from leveraging the web 2.0 platform to create new forms of apps (some may just be show up on the IPhone app store).

My prediction in 2009 is that you’ll see group productivity increase dramatically. As ‘trust’ becomes more central this year so will the relationship that bloom from it. That is where the productivity angle will kick in. Call social networks a ‘recession product’ or a new work tool – it will matter starting in 2009.

Web 2.0 is upon us in full force and the impact from work to play will be disruptive EXCEPT now will see it become known. The people who can harness it will win – from marketers to users to institutions.

Web 2.0 Summit – Just Doing Business – What Bubble

I have to say that I was a bit skeptical about the recent Web 2.0 Summit.  I thought that it would be a bust.  In fact first impressions were that it was trending that way.  However after Jerry Yang’s conversation with John Batelle the Web2.0 Summit pickup up the pace.

I had a chance to speak with many of my friends in the space, and it was clear that doing business and building ventures was on the mind of many.  Unlike recent years where the Web 2.0 Summit felt a bit bubbly, this year was different.  Many were talking about ideas and sending signals of open collaboration – many among serial entrepreneurs.  For companies in the Web 2.0 space the conversation was on doing business.

It was an environment of executives doing deals.  What a concept.  The reality of the market is now on doing business.  The event was successful and for the first time I felt a strong sense of business focus.  Industry participants actually looking to build an industry.

This begs the question:  was there ever a bubble?  Sure some companies are flashy and ajaxy but in reality we never had a bubble or bubble burst.  The financial reality or depression didn’t originate from Silicon Valley or Web 2.0.  The crisis vectored in from mainstream financial systems.

Future of Web 2.0 – Just Do Business.  That’s on the mind of entrepreneurs, VCs, and large corporations.  How refeshing.

Blogging 2.0 – Blogging, Podcasting Growing UP -Yes They Are Mainstream

The economist has a great story about blogging and how it has gone mainstream. I would add podcasting to that list as well.  I was there when blogging started and podcasting and yes it is true both are mainstream leaving many of the pioneers like me and Jason trying to figure out the roles in the new order.  The fact is most pioneers can’t compete with mainstream professionals. The economist talks about Jason Calacannis as the example of blogging pioneer.  Jason is a great blogger and has shown the way for many.

Jason is a pioneer in blogging, but the real reason (my opinion) that Jason stopped blogging was because he had a company to build and run – Mahalo which is in big trouble.  Email makes sense for Jason because it is more controlled, and it keeps his social graph and influence in place verses the treadmill we call full time blogging.

When I started PodTech in the early days of 2005 had a huge audience and my show was very popular – millions of people were exposed to my podcast (thanks to blogging and itunes).  I gave that up to try to run the company that was venture backed.  Now I’m considering doing it again.  See poll on the side bar.

Back to Pioneering or Blogging and Podcasting 2.0

I see blogging changing so called Blogging 2.0.  It will more about real time collaboration.  More about experts not generalists.   In fact other blogger agree at web 2.0 summit I spoke with Toni Schnieder CEO of WordPress and he agrees.  They are seeing massive uptake on expert or specialism blogs.  Also this reaches deep into the web.  Toni mentioned that wordpress has over 200 million unique users – that’s massive.

I have launched a new blog in June called Broadband Developments www.BroadDev.com which is a prototype for a collaborative blogging hub.  So far the results are working.  We’ll see if that can be a model for Blogging 2.0 – experts working together.

Is Yahoo Being Served Silicon Valley Divorce Papers ? It Needs Big Game Changing Product

I’ve been thinking about the Jerry Yang conversation yesterday with John Batelle and it hit me – Yahoo has for years being the outsider in Silicon Valley. The recent blog and press coverage of Jerry’s comments yesterday make it clear that the core culture in Silicon Valley is frustrated with Yahoo and by default Jerry Yang.

Two posts stand out in my mind that got me thinking about this. Mike Arrington’s post and Om Malik’s post (other coverage is basically saying the same thing) speak to the core feelings about Yahoo.  I know both Mike and Om love Yahoo for it’s storied history, but like they and others (me included) are frustrated by the bungled execution.

What’s really going on here?  Yahoo losted a ton of great people in the years that it milked it’s dominant portal status.  That is compounded by a misdirection in strategy one that during the Semel years (the media focus) saw Yahoo lose many of their top product and engineering mavericks.  Innovation is the culture of Silicon Valley and Yahoo lost that years ago.  The recent pile on going down is just built up frustration by Silicon Valley on Yahoo and Jerry Yang is taking all the heat.

I’m pulling for Jerry Yang because I respect the ‘guts’ that it takes for the founder to come back.  It’s very noble of Jerry, but trying to transform his company into a platform player will take years.  It will take new leadership underneath Jerry.  Fact is they just don’t have the ‘chops’ on the product and engineering side.  Silicon Valley wants nothing to do with a ‘false’ prophet.  Jerry needs to move faster or the ‘mob’ will take them down (as Mike Arrington suggests).

Turning the Yahoo battleship will take time.  All Yahoo needs is one game changing new product.  This reminds me of the old minicomputer days.  Yahoo is the Digital Equipment Corp (DEC) of Web 2.0.  They’ve been on this portal and media thing why to long (similar to DEC on the minicomputer) – it might be too late. Some minicomputer companies like HP got new relevant products (hello LaserJet) that fueled a reinvention.

If Yahoo doesn’t get the new product and engineering mojo back Silicon Valley and others will completely turn on Yahoo.

It’s doable for Yahoo due to their ‘huge’ installed base of users, but the window is closing. They need a new product that is relevant – a new flagship.

Run Jerry Run!  Get it done.

I would love to see the founder take back his company and make the turn around.  The question is “do they have the people to do it”?  Silicon Valley doesn’t thinks so.

I’m not convinced yet of Yahoo’s demise and will wait to judge Yahoo.  I think that they can. I vote for the founder to stay – Jerry should stay, but he needs a new management team that will follow the founder in his vision.  I blame Semel not Jerry.

What do you think that they need to do?