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Google’s OpenSocial benefits smaller social networks October 31, 2007

Posted by jeremyliew in facebook, myspace, platforms, social media, social networks, widgets.

Breaking news tonight about Google teaming up with several social networks to create a set of standards for application developers. The NY Times says:

On Thursday, an alliance of companies led by Google plans to begin introducing a common set of standards to allow software developers to write programs for Google’s social network, Orkut, as well as others, including LinkedIn, hi5, Friendster, Plaxo and Ning.

According to Techcrunch:

OpenSocial is a set of three common APIs, defined by Google with input from partners, that allow developers to access core functions and information at social networks:

* Profile Information (user data)
* Friends Information (social graph)
* Activities (things that happen, News Feed type stuff)

Lots of discussion on the web about it.

This is great news for widget and app developers like Flixster and Rockyou (both Lightspeed companies) as the burden of building apps for multiple platforms can quickly get overwhelming for the resources of a small company. It’s also great news for the largely “second tier” social networks (in terms of US users) that are members of the network.

According to Venturebeat, Facebook was invited but declined to join. Not a big surprise.

Open networks like this benefit smaller players. It’s simple math. Lets say you’re a social network with N members. You’re looking to join a coalition of other social networks to create an open standard; in aggregate they have M unique users. Your benefit is proportional to M and your cost is proportional to N. So the cost is greatest when N is large (big social networks will have app developers jumping at the opportunity to develop for their users anyway) and smallest when N is small (as they probably would not get a lot of apps developed for them on a standalone basis otherwise).

This same scenario has played out whenever there have been dominant closed platforms. Windows remain relatively closed (with dominant market share) while Linux embraced openness. AOL tried to stay closed (using its proprietary Rainman programming language) while small web sites embraced the openness of the web. Anil Dash had a good post covering this history earlier

Historically, openness has taken share against (even large) closed networks because M keeps getting bigger and bigger and more developers get encouraged to write for the platform.

Also historically the biggest owners of closed platforms have been slow to embrace openness, if they ever did at all.

The other variable in this case is how friendly each social network is to app developers making money. It isn’t enough to get a lot of users on a platform if you can’t get paid. Rockyou and Slide both shifted their efforts from the larger Myspace to the smaller Facebook when Facebook opened up because they could make money from Facebook but not from Myspace.

We’ll see if past is prologue!

We’re all gamers now October 25, 2007

Posted by jeremyliew in advertising, business models, casual games, gaming.

Sat through an interesting panel on casual gaming today at a Goldman Sachs event, with representatives from Oberon, Big Fish, Wild Tangent and Liberty Media. Alex St. John of Wild Tangent was his usual feisty self, throwing hand grenades in all directions and keeping the conversation lively.

A few interesting insights came from the discussion. A couple of the panelists pushed back on the Wikipedia definition of Casual Games:

The term casual game is used to refer to a category of electronic or computer games targeted at a mass audience — typically with very simple rules or play techniques, a very low degree of strategy, making them easy to learn and play as a pastime. They require no long-term time commitment or special skills to play, and there are comparatively low production and distribution costs for the producer. Casual games typically are played on a personal computer online in web browsers, although the Wii and Nintendo DS are also often referred to as a platforms catering to casual gamers. Casual gaming demographics also vary greatly from those of traditional computer games, as the typical casual gamer is older and more predominantly female.

Instead, Alex proposed that we’re all gamers now, and that this is a shift in media consumption comparable to the rise of TV. Whereas shrink-wrapped gaming can be compared to a movie – you don’t know how much you’ll enjoy the experience until after you’ve paid (reviews and recommendations notwithstanding), he compared casual gaming to TV – you try it for free, and it has to entertain you and earn the right for you to keep coming back. He says that no one refers to “TVers” as a group because everyone watches TV, and similarly no one will refer to “gamers” as a group because everyone will play games.

Another interesting claim from Alex was that Wild Tangent made 15c per game play (under a mix of purchased premium games and advertiser sponsored games). That implies a $150 CPM, which is extraordinary. He also said that they were sold out of advertising inventory, even at these CPMs, and implied that given these economics it almost always made more sense to offer casual games for free (increasing by 50-100x their usage) than depend on selling games to 1-2% of the audience who try the game. This was heavily disputed by other panelists, at least in part on the basis of the current size of the ad budgets being dedicated to online gaming.

Most interesting panel I’ve been to in a while.

Meaning = Data + Structure October 22, 2007

Posted by jeremyliew in data, meaning, semantic web, structure, user generated content.

Through Techcrunch, I saw the video “Information R/evolution” embedded below (5minutes, worth watching):

The video’s key message is that when information is stored digitally instead of in a material world, then our assumptions about how to get to information, and how information gets to us, are substantially disrupted, allowing for high quality (and quantity) user generated, organized, curated and disseminated content.

It’s an entertaining video and spot on. However, I think it glosses over one key point about make information truly useful. User generated content, often unstructured, can be very hard to navigate and search through. Adding structure makes the data vastly more meaningful.

Search engines are the best example of how adding structure (a search index) to an unstructured data set (the list of all websites) makes the dataset more useful. Whether that structure is established by link popularity (as Google and all modern search engines do) or by human editors (as Yahoo started out) affects the size and quality of the structure, but even a rudimentary structure built by humans is better than no structure at all.

Social networks are another great example of how adding structure (a social graph) to an unstructured data set (personal home pages) improves the data’s usefulness. There were plenty of successful examples of personal home pages and people directories in the late 90s , including Tripod and AOL’s People Connect, but none of them had the high levels of user engagement that MySpace, Facebook, Bebo and the current generation of social networks have.

One of the key themes of Web 2.0 has been the rise of user generated content. Often this content has been largely unstructured. Unstructured data is hard to navigate by search – you need to rely on the text, and that can be misleading.

Take one of my favorite websites, Yelp, as an example. If I do a search for diabetes near 94111, I get one relevant result (i.e. a doctor) in the top 10 – the rest of the results range from tattoo parlors to ice cream parlors, auto repair to sake stores. All contain the word “diabetes” in a review, some humorously, others incidentally.

This isn’t a one off either; try baseball mitt, TV repair or shotgun. In every case, the search terms show up in the text of the review, which is the best that you can hope for with unstructured data.

Recently I’ve started to become intrigued in companies who are adding structure to unstructured data. There seem to be at least three broad approaches to this problem:

1. User generated structure
2. Inferring structure from knowledge of the domain
3. Inferring structure from user behavior.

I’m not smart enough to know if this is the semantic web or web 3.0, or even if the labels are meaningful. But I do know that finding ways to add or infer structure from data is going to improve the user experience, and that is always something worth watching for.

I’m going to explore the three broad approaches that I’ve seen in subsequent posts, but would love to hear reader’s thoughts on this topic.

I’ve found this post on the structured web by Alex Iskold to be very helpful in thinking about this topic.

Three ways that a conference lobby is like Facebook October 21, 2007

Posted by jeremyliew in communication, Consumer internet, performance, social networks, web 2.0.

I spent three days last week at the Web 2.0 Summit, mostly in the lobby of the Palace hotel. The lobby served as the crossroads for the conference; all attendees passed through there and many never seemed to leave it! It was a great venue to catch up with friends and industry contacts among the attendees and lobbyconners.

It struck me that the conference lobby was like a social network in three ways:

Public Communication as Performance

At Web 2.0, if you wanted to have a private conversation, you would leave the lobby and find some place more private. In a social network, if you wanted to have a private conversation you would send a private message. But if you were OK with others seeing your conversation, you would stay in the lobby, or post a public message on the Wall/Comments. The Performance aspect of communication is seen both online and offline.

Serendipitous communication

In ordinary life, you communicate with far fewer people than you’d like to. You forget, you get busy, and you don’t reach out to people that you’d like to talk to more often. But in the lobby of a conference, you’re always accidentally running into people that you’d love to talk to but don’t usually see. This is one of the biggest benefits of conferences.

Similarly, social networks bring up opportunities to communicate with people that you may not have connected with in a while. Perhaps you see one of their comments posted on a friend’s MySpace page, or you get an update on them from the Facebook feed, and are prompted to ping them. I’ve been communicating more regularly with ex colleagues and extended family because of Facebook.

Lightweight Interactions

Over the course of two days at a conference you’ll see the same people a number of times. After you’ve talked, there is only so much you can say the next time, so your interactions tend to get lighter weight. You want to acknowledge each other but not necessarily get involved in a long conversation. So you smile, shake hands, clap shoulders, bump fists, wink, wave, or kiss cheeks (gender specific!) instead. It is the same rationale that leads you to text a friend instead of call.

Social networks provide similar lightweight opportunities for interaction. Facebook’s poke is the simplest example. Although Kara Swisher thinks that many Facebook apps are childish, I think they are providing an avenue for lightweight interactions between friends. Whether you’re buying someone a drink, biting them to turn them into a zombie, hugging, slapping or tickling them, the subtext of “I’m thinking of you” is there.


People building social media companies and other companies that require user interaction should bear these examples in mind. It is hard to create new mental models of behavior for users. As always, if there is an offline parallel for the online behavior you want from your users, you’re more likely to succeed. These three elements of social network behavior have clear offline parallels.

Online ads targeted by offline data October 18, 2007

Posted by jeremyliew in ad networks, advertising.

Wednesday’s WSJ has a fascinating article about how Acxiom mines offline data to target online ads. It’s the most targeted and data rich approach to targeting online ads that I’ve heard of or seen and I’m very surprised that it didn’t get more blogosphere coverage.

Acxiom’s new service, Relevance-X, goes further, drawing on the company’s database of 133 million households to determine which ads to show. Acxiom’s consumer database includes information gleaned from sources such as public real-estate and motor-vehicle records, surveys and warrantee cards consumers fill out. Estimates of annual income, marital status, average ages of kids, home ownership and property value, educational level and travel histories are also available.

The company classifies each U.S. household into 70 clusters based, it says, “on that household’s specific consumer and demographic characteristics, including shopping, media, lifestyle and attitudinal information.” Clusters range from “Married Sophisticates” to “Penny Pinchers.”

Acxiom contracts with Web sites that collect consumer addresses, such as online retailers and those offering sweepstakes and surveys. In a blink, Acxiom looks up the people who provide their addresses in its database, matches them with their demographic and lifestyle clusters and places “cookies,” or small pieces of tracking data, on their computer hard drives.

When those people visit Acxiom partner Web sites in the future, Acxiom can read cluster codes embedded in the cookies and use them to pick which ads to show. The company doesn’t disclose the sites that carry such targeted ads, but says they reach 60% of U.S. Internet users.

That allows a company selling an expensive antiwrinkle cream, for example, to contract with Acxiom to display its ads to affluent women 40 years or older in the “Skyboxes and Suburbans” or “Summit Estates” clusters.


Acxiom says that there are no privacy concerns because only gender, zip and the segment that a person belongs to are stored in the cookie and used to target, and segments are all at least 1m people. Personally, I don’t see why there should be any privacy concerns for online targeting since this same data has been used to target offline advertising for a long time. But this is exactly what caused Doubleclick’s acquisition of Abacus Direct to come under huge scrutiny in 2000, and led to the subsequent spin off of Abacus.

This data could have a significant positive effect on industry wide CPMs if its targeting can really improve the effectiveness of online advertising.

Discovery versus Search October 17, 2007

Posted by jeremyliew in discovery, Search, time poor.

I’ve posted in the past about the difference between internet users who are time rich and time poor.

Time Rich people use the internet to kill some time. They are bored. They are willing to be diverted and entertained.

Web services based on discovery are often useful to the time rich. Last Sunday’s NY Times has a good article on one of the leading discovery services, Stumbleupon. Since its acquisition by Ebay, Stumble has continued to add functionality and grow:

In recent months, StumbleUpon has added the ability to stumble through specific sites, including Wikipedia, Flickr, YouTube, TheOnion.com, CNN.com and PBS.org.

It is when you are stumbling through YouTube or through Web videos in general that the StumbleUpon experience most resembles the TV remote — though one that tries to serve up programming to match your interests and whose suggestions get better with time.

That is one reason Mr. Camp is confident that StumbleUpon, or some other discovery service, will become a Web-wide hit over the next few years, as people increasingly shift their consumption of media to online from offline. “People aren’t going to stop channel surfing just because they don’t have a TV and they have laptops instead,” he said.

My hypothesis is that discovery works best when the cost of being wrong is very low. With Stumble, you get presented new websites (or videos, or news stories) and can almost instantly figure out if they are of interest to you. Channel surfing works similarly – you can often quickly identify if a show is of interest, especially if its a show that you’re somewhat familiar with. Browsing through Flickr’s interesting pictures works that way as well.

But some other forms of content (e.g. music, audiobooks, novels, movies, video games) can take you a little longer to tell if you like them or not. Songs often take more than one listen to develop an appreciation. Audiobooks and novels require a commitment of at least 15-30 minutes before you get drawn in. Completely new movies are the same way. If they are not interesting, then you’ve wasted a meaningful amount of time – the cost of being wrong is higher. This makes you less willing to keep on “discovering” more content at random – you want more data (e.g. reviews, plot summaries, information on the actors/bands etc) before you’re willing to try something new.

Do readers have any thoughts on this?

Seven things entrepreneurs should know about PR October 15, 2007

Posted by jeremyliew in Consumer internet, Entrepreneur, PR, start-up, startups.

The following is a guest blog posting by Laurie Thornton,the principal and co-founder of Radiate PR, a boutique public relations agency representing emerging growth companies in the Silicon Valley and beyond. Radiate is also Lightspeed Venture Partners‘ PR firm.
While attending the Lightspeed Internet User Acquisition Summit last month, three of Silicon Valley’s most respected journalists – Matt Marshall of VentureBeat, Rebecca Buckman of the Wall Street Journal and Erika Brown of Forbes — offered some insider tips on PR. Whether you’re familiar with the ins-and-outs of the process, most agree that public relations can deliver tangible results: drive significant Web traffic, fuel user acquisition and contribute directly to a company’s bottom-line. Here’s a snapshot of what was shared that afternoon, plus a few more thoughts on the ABCs of publicity, aimed at first-time, do-it-yourself entrepreneurs.

-Know Your Target – Take Careful Aim
: Any practitioner will tell you that tailoring a story pitch is essential. It’s well worth the time to thoroughly research the target outlet, understand the readership and know what the specific journalist covers. Sought after reporters receive upwards of 200 pitches a day. You won’t even make the first cut if your story idea isn’t spot-on.

-Implement the 30-Second Rule: The editorial world is saturated, so engaging a journalist at the outset is the hardest part of the job. Make the pitches brief – no more than a few short paragraphs. Too much text is a turn off! Craft your story idea as a well devised teaser and the reporter will be more likely to respond. You’ve got very little time to get their attention, so make it count.

-It’s Not Just About You: The majority of journalists won’t write about Company X’s new product, but they might cover it within the context of a larger category article or trend story. Consider Jaxtr, a VoIP contender. Here’s an opportunity to tell a David vs. Goliath story about how their service stacks up against Skype, the reigning industry behemoth who is generating some negative headlines at the moment. Package a timely story idea about how your company is making its own notable impact, or uniquely competing in the broader market.

-Users Tell it Best
: During my firm’s nearly four-year tenure representing LinkedIn, we frequently parlayed user success stories to demonstrate the tangible value of a social network for business – one that could help you land a job, get a trusted referral, etc. With these editorial placements, user sign-ups measurably increased. Then there’s PeerTrainer, a social network for diet and fitness, who utilized astonishing ‘before and after shots’ of a successful user. The compelling story of this woman’s personal journey landed her on the cover of People Magazine, where she directly credited PeerTrainer with her 100-pound weight loss. For both companies, the testimonials proved the most convincing and powerful way to attract and secure new users, and motivate existing ones.

-Patience, My Friends: The PR process can be likened to the sales cycle. Can you imagine your business development guy closing a major deal with a coveted strategic partner with one intro email and a single follow up call? Coverage doesn’t always happen overnight.

-Play Fair, or Don’t Play at All: We expect journalists to be fair, accurate and truthful in their reporting. Conversely, we need to play by the same rules. Always be straightforward and don’t cover up or candy coat the facts. Also, if you ever offer an exclusive – stick to your commitment. Forge reciprocal relationships with journalists. They pay off for both you and the reporters – everyone can win.

-Oh, Yeah — Please Don’t Forget About the Product: A solid product that tracks to its promised claims is a check-box requirement for any successful PR program. Expectations are extremely high, even in the early Beta phase. Budget and bandwidth constraints aside, don’t rush out before a product is adequately tested and refined. The press and other critics will take notice. Not even a really clever PR pro can compensate for an offering that doesn’t deliver. Resist the temptation to simply get your offering out there as quickly as possible before it’s really ready. If you can, take that extra time to make your product shine from day one. The great publicity will follow.