The Praized Blog

Back in December, in “A look back at 2007“, I wrote that I believed early adopters’ interest in Facebook had peaked and had even started to decline. Recently, the blogosphere echoed that sentiment with news of “Facebook fatigue”.

1. In January, The Register started by saying “Whisper it, but numbers from web analytics outfit comScore have confirmed what the chatter in bars and cafes has been saying for months - people are, just, well, bored of social networks.” About Facebook, they added that “behaviour seems much the same; join, accumulate dozens of semi-friends, spy on a few exes for a bit, play some Scrabulous, get bored, then get on with your life, occasionally dropping in to respond to a message or see some photos that have been posted.”
2. A few weeks later, Techcrunch also looking at ComScore data said “The number of people who visit Facebook has been leveling off over the past few months in the U.S., and even dipped by about 800,000 individuals in January. (…) Maybe all that friend spam has something to do with the decline. Will the Facebook fatigue get worse, or is this just a temporary dip?”
3. Adding his grain of salt, Rory Cellan-Jones from the BBC added: “The general feeling is that the kids, with their minute attention spans, have already tired of the social networking site and moved on to something more hip and happening. I think the opposite is true - that Facebook’s new wave of older users have decided it is just not worth the bother and are now leaving it to the kids.”

I agree. My personal experience with Facebook is that its relative utility for me has decreased drastically in the last few months. There used to be a lot of “friend” activities in my newsfeed and in my status updates. Even though I have more than 550 “friends”, I suspect that only 20% at most are using it regularly. As I wrote two months ago, Facebook is just a game. Industry pundits are looking for utility and, for a while, it certainly felt like Facebook was IT. But not anymore. Has something replaced it? Yes. Today, I’d like to say it’s Twitter. It’s all anecdotal, mind you, based on my brain filtering a massive quantity of articles and blog posts I read every day. You’ll have to trust me on this. Should you still care about Facebook? A resounding YES! As Jeremy Liew from Lightspeed Ventures Partners says “The digerati, with their Outlook address books and social network friends lists in the 1000s, bloated by people they met at conferences several years ago, are edge use cases. Their experience is atypical. Normal users of social networks use Facebook apps in the same way that middle America forwards emails to one another.” Those millions of users are not going away and Facebook is still a formidable platform to broadcast your brand and content.

But back to Twitter, what is it? Twitter is a micro-blogging application that allows you to send text messages of up to 140 characters. It really exploded on the Web scene last year at the SXSW Interactive Festival. People started using it in drove but I wasn’t sure what to do with it (and I’m sure I was not alone), until Facebook taught us how to “Twitter” through its “Status Update” feature. Along with the newsfeed, it is one of Facebook’s killer apps but I think most people found it too limited in functionality. It was really just about broadcasting information.

Twitter is much more. It can be a:

1. Broadcast tool. Send information to your network of “followers”, your latest blog post, a breaking news, a summary of a conference you’re attending, the boring stuff of your daily life, etc. Best of all, you can share clickable URLs.
2. Conversation tool. Using the @ symbol followed by the Twitter alias, you can ask questions, join an existing conversation and contribute to the community.
3. Early warning system. Breaking news seem to pop-up on Twitter much more quickly than in other media. I’ve learned about different breaking news more quickly in the last few weeks using it. Some people have already created specific channels for breaking news, which you can start following. See BreakingNewsOn or the Techmeme firehose.
4. Proxy conferences. Recently, I was able to follow updates from the TED, a very coveted invite-only conference. You could obviously follow it in real time, but through structured data standards called hashtags, you can also see what people have been reporting about TED here.
5. Subscribe to people. Where else can you follow updates and insights from industry luminaries like Pierre Omidyar (eBay’s founder) or Paul Kedrosky (famed Canadian VC)? There are hundreds of interesting people to follow in Twitter.

Howard Rheingold of SmartMobs fame offers even more reasons to like Twitter.

Twitter obviously has flaws:

1. It hasn’t announced a business model yet and people are afraid its introduction will break the utility.
2. It suffers from many well-documented technical interruptions.
3. You can’t segment your “tribes”, allowing you to improve the signal-to-noise ratio, as you start following more people.
4. Most of my (and possibly your) contacts are not on Twitter yet, which reduces its intrinsic value.
5. It’s a huge time-waster, looking at the conversation feed and making sense of it all.

But even with these flaws, I expect Twitter to really catch fire in the next few months, with more people joining, trying it out, finding utility and transforming it into a vibrant worlwide conversation-based community. Even my Praized Media partner, Sylvain, is organizing the first TwittYul, an informal event for Montreal Twitter users and fans You could read about it first … on Twitter. BTW, if you join and want to follow my “tweets”, I can be found here: http://twitter.com/Praized

In business blogs everywhere, it’s that time of the year again, when we start looking back at the year that was and we start to forecast what 2008 will look like. In this post, I look back at 2007 and discuss the most significant local and social media news of the year.

1) Facebook

Clearly, Facebook was the number one news of 2007. By allowing anyone to open up an account in the Fall of 2006 (at about the same time they introduced their newsfeed function), Facebook paved the way for the arrival of tech enthusiasts and early adopters/influencers. Silicon Valley got very excited in the Spring and the launch of the F8 platform in May, allowing third-party developers to build applications, brought more excitement. I believe early adopters’ interest in Facebook has peaked (and has even started to decline) but the job is done. More than 55M active users of all ages access the site every month. The social network had a couple of setbacks around the end of the year with the beacon fracas and the launch of OpenSocial by Google but I believe it does not tarnish their luster. Facebook retaliated by opening up their infrastructure. The biggest benefit to the Web in general: Facebook is introducing people to the social web (micro-blogging, blogging, pictures uploading, “friending”), people who will eventually graduate to more complex social applications.

2) The opening up of the social web

Symbolized by the publication of the OpenSocial standard, the web is becoming more social and more open. Additionnally, the announcement by Six Apart that Movable Type, their leading blogging software, is going open source and the launch of the DiSo initiative to create open source implementations of distributed social networking are also important projects. Social will be part of the fabric of the web.

3) The launch of the iPhone and the unveiling of Android

Apple created quite a stir in June by launching the iPhone, a beautiful device that changes the way we see mobile web access. It’s not a perfect machine by any mean (still very closed) but it’s a game changer. The Android mobile platform by Google is also potentially very disruptive and paves the way to an interesting 2008 in that field. Local mobile search, the famous holy grail of local search, is on the verge of becoming reality.

4) The acquisition of Ingenio by AT&T/YellowPages.com

This purchase is a critical move for YellowPages.com and it clearly signals to the rest of the directory industry that call-tracking/pay-per-call will be the unifying standard in local product bundling, allowing a single sales force to sell multiple media formats. In the same vein, Marchex acquired Voicestar earlier this year.

5) The Radiohead “pay what you want” experiment

Even though it wasn’t as radical as industry watchers wanted it to be (Radiohead is still going to release a CD version of InRainbows), this trial by one of the most preeminent alt-rock group generated a lot of discussions in the blogosphere. Consumers were allowed to pay whatever they wanted to pay for the download including not paying at all. ComScore released some disheartening information about the percentage of people who paid for the album but that was quickly shot down by Radiohead’s management. In any case, the music industry needs more bleeding edge experiments like this one to find their future business model(s).

6) Reality check in the local search industry

The last two Kelsey conferences offered a sobering and realistic look at the realities of local search. Local is tough, hasn’t been cracked yet but offers tremendous opportunities. Stakeholders are realizing that partnerships will be needed to succeed. Two senior executives from the print directory industry talked openly about the opportunities and challenges of being a traditional media publisher and it was the first time that we heard that kind of discourse publicly. Google, Yahoo and Microsoft are all courting traditional local media companies that possess large sales forces to help them increase local revenues. I think we’re getting close to the “acceptance” stage of the Internet grief cycle and we should see a lot of action next year on the local search front.

I’d love to get your feedback on 2007 events. Anything important I forgot?

Are user reviews important in local search? Data from the latest Kelsey Group/comScore survey presented today by Brian Jurutka from comScore seems to indicate it is critical from a user point of view as 24% of online consumers have used an online review site prior to buying an offline service in the last 3 months.  In addition, more than 75% of those review-informed purchasers cited online reviews as influential in their purchase decision process.

Why are consumer reviews influential?

• They are seen as unbiased 3rd party feedback
• They are efficient
• They provide an opportunity for feedback

Who writes reviews?

• Broadband users, young professionals, 25-49. 46% of review users have contributed a review as well.

Why do consumers write reviews?

• Helps other consumers (62%)
• Gives me “consumer power” (44%)
• It’s a fun activity (33%)
• It helps me “get back” at a provider after experiencing poor service (24%)
• I was compensated to do it. (19%)

Other highlights:

• Better reviews drive higher revenues. Consumers were willing to pay 20% more for services that were rated 5 stars vs. 4 stars.
• In addition, a significant portion of people were not willing to purchase from a 1-star place.
• 97% believed the review was accurate post-sale.

Update: the official press release.

According to Keller Fay Group (via the Center for Media Research), there are 3.5 billion brand-related conversations per day in the U.S. 8% (280MM) of those are happening online. Let’s speculate for an instant. If 25% of those online conversations are local in nature, that means an impressive 70 million local conversations are happening online every day in the US in e-mails, instant messenging, blogs, forums, social networks and other online communities.

Let’s equate these conversations to local searches and compare them with ComScore “IYP” searches. According to this article from SearchEngineLand, these totaled 808MM in the US in Q1 2007. In a three-month period, 6.3 billion local conversations are potentially happening online. That’s 7 times the total “IYP” searches universe! And a whopping 35 times the total of the current leader, Yahoo!

What it means: for anyone who doubted that local search was very fragmented online, I think these numbers speak for themselves. In addition, the ability to deploy a social media strategy for anyone operating in that space is key.

(via Online Media Daily)

Apparel, food and beverage and low-cost product categories are better received by consumers visiting blogs than other types of marketers, according to Chicago-based comScore’s new product that measures consumer consumption of marketing through blog and social network conversations. “More serious categories such as insurance, financial services and pharmaceuticals do not engage blog visitors as well,” says Andrew Lipsman, senior analyst at comScore.

“The intensity of usage with conversational media sites is unique to the Internet,” Lipsman adds, with heavy visitors to conversational media sites in particular exhibiting certain niche online behaviors that can be underrepresented in a general consumer panel.

That fact inspired creation of the new tool to measure the intensity and predict the velocity and magnitude of its growth. Federated Media Publishing, the Sausalito, Calif.-based advertising platform for blogs, lent comScore its expertise on the consumer population that visits blogs, contributes commentary to blogs and social networks, and offers advertisers a stickier relationship.

What it means: more and more people are interested in conversational media as a way to market products/services but are not sure about the effectiveness of branded advertising alongside conversations. It’s therefore very appropriate that Comscore starts providing some data to support ad buys around this new media environment.

Found on WebProNews, a video interview with Stuart McKelvey, President and CEO of TMP Directional Marketing. He’s at SES San Jose to present the results of a recent local search study done with ComScore.

Highlights of the interview:

• Offline local searches are mostly centered on service-based companies
• Online local searches have a more product-centric purpose
• Consumers are searching for businesses located within 1 to 20 miles of their home
• Close to the transaction, 40% of consumers are still shopping around and can be influenced
• 30% of consumers want to transact offline
• 20% wanted to talk to someone before closing the transaction

As I mentioned yesterday, I attended FacebookCamp in Toronto on Tuesday night. It was well attended (over 400 people) and the room was about 50% tech-oriented and 50% business-oriented. Roy Pereira, one of the organizers seen below on the right (the other host is Andrew Cherwenka), told the crowd the objective was to encourage more Toronto-based developers and companies to use the Facebook application platform and further Toronto’s global presence in technology.

We then jumped straight into action with a very informative presentation by Meagan Marks from Facebook. Called “Best Practices around Product Design and Viral Marketing”, it offered multiple data points about the size of Facebook in Canada and some tips & tricks on how to leverage the site. The Facebook team asked that we do not videotape the presentation which made me thing their live presentations are walled gardens as well…

Data highlights:

• Worldwide: 33M active users (people coming to the site at least once a month), 150,000 new users are added each day.
• 90,000 application developers, 1700 applications with more 100 users.
• #6 network in Canada with 11.3M unique visitors in June 2007 according to Comscore (close to 50% reach). Facebook claims they also have 8.5 billion page views per month.
• They have 3.3M active users. 68% are daily users and 61% are out of college,
• 75% of active users have an application installed.
• 10% of all application developers are based in Canada and Toronto is one of the top 10 largest developer communities

Marketing highlights:

• Facebook is all about identity, information and social context. It’s about connections between people, it’s powered by valuable social connections, and enhanced by network effects.
• How do you get high growth, high users applications? By having deep integration in all channels: the newsfeed, the product directory, the profile page but there are other places where you can hook your app.
• Profile integration: there are many places where you can embed your app including in the left navigation, under the user picture, in the upper right or in the middle of the page.
• The best way to leverage the profile box is to show recent interactions, recently added content, social relevancy (who), the temporal aspect (what happened today and yesterday). The content is all about expression, not consumption.
• News feed optimization (NFO): increase the relevancy of what’s pushed through the newsfeed ( for example, what the user did and the relationship with their friends) and utilize call-to-action buttons.
• Additional integration points: the message, the profile actions, the wall, and the share button
• An interesting marketing idea was to find other developers who have built complimentary apps to cross-promote your own app.

She also mentioned that Facebook was already seeing new business opportunities emerging from developers. Among them, she mentioned virtual currencies (ex: munny in Fluff friends), Ad networks, APIs on top API (for example, the Super Wall API).

She suggested app developers use the following metrics to measure success:

1. Vitality metrics: installed base, outgoing impressions, conversion rate
2. Engagement metrics: repeat sessions, canvas page views. She showed the following formula: installed users x impressions/installed users x acquisitions/impressions = new users acquired (see the following picture here from the Global Nerdy site)

Joey deVilla has an amazing summary of that session as well on GlobalNerdy.com, with even more details.

Yes, there is such a thing as a widget conference! I’m not there but some bloggers and one article from Online Media Daily have some insights about it:

As opt-in distribution networks popular among young consumers, widgets are on the rise, according to the analysts and agency types who gathered Wednesday in New York for the first WidgetCon. “This space is just showing some incredible month-over-month growth,” said Linda Boland Abraham, executive vice president, comScore. “If I were a widget maker, I’d be touting the young demographic that widgets are reaching.” In North America, more than 81 million consumers–or a full 40.3% of all online consumers–were exposed to Web widgets in April, according to a widget tracking service recently launched by comScore. For now, its Widget Metrix service only tracks widgets–mainly photo and video-streaming players–that can be embedded on Web pages like blogs and social networking pages, rather than desktop widgets. (Notably, it is not tracking YouTube’s video players.)

Joanna Pena-Bickley adds: “The widget is facilitating the evolution through giving us a mechanism for portable content, commerce, community and transactions in consumers lives.”

Daniela Capistrano says: “I do not believe that widgets will completely replace websites as some might believe, but I do believe they will change the way that all content is published, promoted, and shared.”

Jeremy Pepper thought that “NYC is about monetization. San Francisco is about community. Or, NY is about style and SF is about substance - either would work. And, at this conference, no one seems to care about the community. I came to this on my vacation, so just stayed for the two key panels - and walked away with the realization that while advertising and marketing (the majority of the people at the conference) are in deep in widgets, they are the last people that should be touching this space. Why? They don’t communicate - they push content, and don’t seem to care about community. ”

What it means: Widget(s) have enormous potential as a content/brand/business model distribution vehicle. When working on their design, make sure you think about the user value you’re offering. Think feature, not advertising, and let it go. If you build a large network of widget users but you’re not monetizing in the short term, don’t worry about it. It’s a great problem to have!

VentureBeat has the news:

Citysearch, the division of IAC focuses on local reviews of restaurants and other services, has acquired the struggling local review start-up, Insider Pages.

The purchase (amount undisclosed) comes at a time of increasing competition in the race to deliver a compelling local search services. Citysearch’s parent, IAC, has already bolstered its local search offerings, namely with Ask City, a property that packages everything from local search to local maps, reviews, and ticket services.

However, more entrants have arrived to nip traffic away from Citysearch, an early player that has seen its traffic stagnate in recent months. There’s Yelp, Judysbook and Backfence, for starters. Earlier today, we mentioned new competitor Outside.in, another company going after the local community news and events area. (…)

Insider Pages has about 600,000 user reviews, and they’ll be integrated into the Citysearch’s offering, she said. It has 2.5 million monthly unique readers, she said, based on Comscore and internal tracking numbers.

She would not say whether the purchase price was more than $10 million invested in the company by Sequoia Capital, Softbank and Idealab. She said there were multiple bidders, but that Insider Pages preferred Citysearch because it is complementary. Insider Pages is popular among suburban parents and homeowners, she said, giving it strength in the home, garden, health and plumber review areas. Citysearch is stronger in bars, arts and entertainment. Citysearch will absorb Insider Page employees in its San Francisco office.

Rev2 says it was sold for “for an estimated sum of $13 million.”

What it means: I’m surprised it was not acquired by a directory company as it would have been a great jumpstart for any user review strategy (becoming more and more important in any local search site). From the article above, it sounds like the acquisition will be complimentary based on different content & users. I know the Citysearch demographics well (Yellow Pages Group used to be the Citysearch licensee in Canada) but I don’t know enough about InsiderPages’ users to really comment on the complementarity.

Just found this interesting tidbit on eMarketer:

Even preteens have social networks now. Sites like Club Penguin, Whyville.net, Habbo Hotel, Imbee.com and Nickelodeon’s Nicktropolis offer tweens a MySpace of their own. The sites offer either fantasy worlds (members at Club Penguin have tuxedoed birds as avatars) or more standard fare like blogging and music sharing. Club Penguin had four million unique visitors in January 2007, according to comScore Media Metrix.

Parents like the sites’ security (no random chat offers here), but they are still cautioned to monitor for cyber-bullying and the amount of time their childen spend playing online. There’s also the question of ads. Ad-free sites make money strictly through membership subscriptions and promotional tie-ins. Whyville and Disney Xtreme Digital (DXD) have plenty of third-party advertising, and DXD also has Disney branding in spades.

For more information on these sites:

“Virtual penguin world: Social sites such as ClubPenguin allow kids to safely emulate teen trends.” (via KansasCity.com)

“Why is Whyville a hit? It’s safe, fun” (via Seattle Times)

“Safer cyber-playrooms” (DXD & Nicktropolis) (via USA Today)

Habbo Hotel’s entry in Wikipedia

“Imbee Launches MySpace for Kids” via Mashable

What it means: always interesting to see a detailed list of competing sites, in this case, social networks for tweens.