The Praized Blog

In light of the latest Kelsey Conference in Seattle last week whose theme was “vertical marketplaces”, I read with great interest this eMarketer article about online communities. Analyzing a portion of the “2008 Digital Future Project“(.pdf) report produced by the USC Annenberg School Center for the Digital Future, eMarketer reports that “nearly half of US Internet users (…) said they belonged to a hobby-oriented online community, a full 41% of respondents belonged to an online social community, and one-third belonged to an online professional community.”

The following graph shows the types of communities users belong to:

eMarketer also quotes a recent The Economist article that said “… that the future of social networking will not be one big social graph but instead myriad small communities on the internet to replicate the millions that exist offline. No single company, therefore, can capture the social graph. Ning, a fast-growing company with offices directly across the street from Facebook in Palo Alto, is built around this idea. It lets users build their own social networks for each circle of friends.”

What it means: I’ve often mentioned how much I like this Wired article about meganiches. I’ve often said that I’m a strong proponent of media “verticalization”. I therefore believe Ning is onto something really big as the social Web becomes more distributed.

Remember my January blog post where I came to the conclusion that Facebook was just a big game? It has been officially confirmed by a report from Flowing Data.

According to Techcrunch, “About half of the 23, 160 applications on Facebook fall into the “Just for Fun” or “Gaming” categories. “Dating” and “Chat” are also high up the list.”

Very interesting first half-day yesterday at the Kelsey Group’s Drilling Down on Local ‘08. The theme of the conference is “Marketplaces”. It regroups products such as classifieds, auctions and vertical sites. Here are highlights from the first two sessions:

As an introduction, the Kelsey Group’s team provided us with some background information on “Marketplaces”. Neal Polachek first described the local end game as “better search, discovery, and engagement”. He even quoted the Cluetrain Manifesto’s “Markets are conversation”. He also talked about their latest global ad revenue forecast for 2007-2012, stating that the biggest category winner would be Internet and the biggest loser would be newspapers. As I wrote last week, the Kelsey group believes that Verticals will capture a large chunk of online advertising by 2012. Matt Booth then talked about three specific verticals (travel, automotive, home services) that have had a tremendous impact on offline/online business and media spending. For example, Matt showed two juxtaposed graphs showing the decline of newspapers’ automotive revenues vs. Autotrader.com’s revenue increase. Peter Krasilovsky finished the intro by stating that it’s now time to “uncouple” print and online media bundles. As print revenues decline, you need to have online-only ad products to compensate. Peter added that you also want to “verticalize” your offer to expand your revenues.

The second session “Remaking the Los Angeles Times (Online)” starred Rob Barrett, Senior VP of Interactive Media, GM, LATimes.com. He started by mentioning that most of what he’s currently working on is not very visible online now. He spent the first couple of years at the LA Times refocusing the online business. His main focus has been to build the display ad business (as opposed to classifieds). It’s going to generate $25M in revenues this year. Barrett says it’s now “time to finally break the newspaper paradigm online”. The LA Times’ online strategy needs to be local as opposed to national as it will allow them to differentiate their offer versus other “national” newspapers like the New York Times. They’ve realized that local users are key to online revenues as they generate more monthly page views and twice the display revenue per page views. Their product approach is “we want to own Los Angeles”, i.e. be integral to life of Angelinos, be the source of news and information about Los Angeles to the world and be an information retailer by creating, aggregating and curating LA content.

The Latimes.com web site is slowly transforming itself into a hyperlocal social network. All content pieces are going to be tagged and indexed by category and geography. By targeting on demographics and on geo, the LA Times is hoping to raise their average CPMs and improve ad effectiveness. They are creating the best targeting machine for the LA DNA. Barrett then showed us pilots of various new vertical sections that are very promising:

• The Travel section: http://travel.latimes.com
• A hyperlocal arts & entertainment guide: http://theguide.latimes.com
• Hollywood backlot to show pictures of movies shooting: launching next week
• User-generated photo and video content: photos & videos, http://yourscene.latimes.com
• The Homicide map: http://www.latimes.com/news/local/crime/homicidemap/

Was reading this morning a great analysis by Mathew Ingram about a New York Times article describing the way “young people” get/read their political news. It’s clearly more and more about word of mouth and your social graph.

As Mathew says: “It’s not that there is anything earth-shatteringly new in the piece, mind you. But I think it does a great job of describing how digital “word of mouth” — in other words, social networking of all kinds including Twitter, IM, Facebook and so on — has become a dominant means of news delivery for young people in a way that I’m not sure old geezers like myself quite grasp, no matter how often people describe it”

The Times sums it up: “In essence, they are replacing the professional filter — reading The Washington Post, clicking on CNN.com — with a social one. (…) In one sense, this social filter is simply a technological version of the oldest tool in politics: word of mouth.”

What it means: I remember when I joined Yellow Pages Group in 1999 (called Bell ActiMedia at the time), old-timers used to tell me that the biggest “competitor” to directory publishers wasn’t other directory publishers (or Google or other online directories), it was word of mouth. People have always asked their friends for recommendations and it has always represented a large volume of local search “queries”.

Admittedly, news and local search are not totally the same. Local search information is usually more of a pull (i.e. someone looking for a product/service) than a push (i.e. someone broadcasting information about a new merchant they found). It’s also more “evergreen” than news, i.e. unless you’re a total local merchant junkie, you don’t need to learn in a timely fashion about a new restaurant opening in your neighborhood. But there’s the seed out there of future consumer behavior which could create a great disruption effect on local search. Who knows? It might become valuable to broadcast information about your favorite local merchants. As I estimated in this blog post, there’s potentially 7 more times online local conversations than online directories searches currently. Anyone who successfully harness these conversations will create very valuable local search inventory.

As I mentioned in my last blog post, the conversation between Steven Johnson and Henry Jenkins yesterday afternoon at SXSW08 was brilliant and insightful. Here are some interesting snippets (all paraphrased, hope I captured the intent):

On Harry Potter:

• We hear a lot about the fact that Harry Potter helped children take up reading but it’s more than that. They also took up writing (fan fiction), learned how to use social networks, learned how to be political, via online communities.

On Barack Obama:

• The “Yes We Can” slogan uses the language of social networks and collective intelligence. Young people online use “we”, politicians use “I”, very egocentric. Some political pundits say his platform is weak. It’s not weak, it’s like a stub in Wikipedia. We’ll do this together.

On social tissue:

• World of Warcraft (videogames) is the new social glue, like bowling was in the 1950’s.
• The Internet is actually helping repair the social tissue that was broken by increased population mobility. We now carry our relationships on our back, like turtles.
• The main challenge is drilling down to the local level. Traditional media has not been doing a good job at covering the hyperlocal news. It’s a hard problem to solve. It’s the “pothole” issue. If you’ve been obsessing about that pothole in front of your house, and it gets filled by the city, it’s big news for you. But it’s not for residents of the next street.

On harnessing the community:

• Maybe we can use high school kids? They have time, skills, idealism and want to serve their community. How can we free them to talk about local?

More about this conversation here and here. A “graphic” recording of the conversation is here.

Yesterday afternoon at SXSW08, Steven Johnson, Outside.in’s CEO, was interviewing the brilliant Henry Jenkins, Director of the MIT Comparative Media Studies Program. I’ll come back to Jenkins’ insights in a later blog post.

Johnson, while talking about hyperlocal, collective intelligence and communities, unveiled a screenshot of a soon-to-be released feature of Outside.in called “On My Radar”. According to the sneak peek page, “On My Radar lets you zoom down and see all the current buzz on the block you’re standing on, while simultaneously keeping tabs on places around the country that interest you.” It uses Yahoo’s FireEagle location technology.

(see the bigger image here)

What it means: On My Radar is very similar to the Facebook newsfeed, one of most interesting features of the popular social network site. I like the fact that they’ve segmented the geographical elements from the very hyperlocal (within 500 feet of you) to the city-level (Brooklyn). I see two challenges to this idea: depth of content and activity. Without these two, a local newsfeed is less relevant. But if they can mine enough information (and frequent updates) from local bloggers and Outside.in users, this might be a very interesting way to discover hyperlocal news.

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

Just read this interesting snippet of information regarding Microsoft’s current R&D efforts in social networking

One project, known as Salsa, aims to use one’s corporate data to piece together their social network, or at least their network of co-workers. In its current form, the software is a plug-in to Outlook that shows social-networking information such as a photo and profile next to an incoming e-mail message. The program also pieces together a list of “friends” based on e-mail frequency and other data.

The Associated Press also reported on this news and added that Salsa”(..) integrates public social networking data such as Facebook.com entries, Twitter.com activity updates, and other information into the email windows of Microsoft Corp.’s Outlook email application. The tool allows people writing and responding to email to know more about the up-to-the-minute status of people they are corresponding with.”

What it means: finally, Microsoft is starting to explore the social networking power of Outlook, possibly the place where most people live their online social lives. I remember, at Mix06, Tim O’Reilly asking Bill Gates when they were going to leverage that installed base (”Outlook for many people is a reflection of their real social network”). I wonder if anyone can work on something like that with the Outlook API? There are reams of data ready to be mined in outlook e-mails (travel information, e-com transactions, events, merchant recommendations, etc.) but you need to show consumers you’re bringing lots of value, if you want them to add your plug-in.

Nice additional information to complement my “Digg is an Oligarchy” post from a month ago. Based on data culled from the first Digg Townhall, the folks at CenterNetworks made a quick calculation.

On an average weekday, you have a 150 in 10,000 chance that your submission will hit the frontpage. However we need to remove a piece of your chance because we know that some sites (in Tech for example: Gizmodo, Engadget, NYT, Techcrunch, Lifehacker, Ars Technica) will get more than one a day on average. (…) I peg these special sites at 25% of the daily average which leaves the rest of us with the balance 112 out of 10,000 chance.

CenterNetworks posits that if things don’t improve, the average site or user might not continue to see a benefit in submitting something to Digg.com. Given that there are now two other valuable social news sites out there (Reddit and Mixx), it might be more appropriate to spend energy there instead. They do have a solution for Digg though: “create separate verticals which would allow 150 stories in each category to hit the frontpage of that vertical each day. ” i.e. increase real estate by “verticalizing” the site.

What it means: I totally agrees with CenterNetworks’ proposed solution. I believe the Web is continuing to become more and more vertical and successful “destination” sites that target everything/everyone risk being desintermediated by vertical sites doing a better job than them. We’re seeing the same phenomenon in social networks right now.

Yesterday morning, I had the opportunity to moderate a social media panel at the Infopresse conference on social networking. Sitting on my panel was Guillaume Bouchard from NVI, a Montreal-based SEO/SMO firm. He explained to the crowd of more than 280 people how, by using social media tools, he manages to generate brand awareness and increase the online street cred of Canpages, a Canadian directory company competing against Yellow Pages Group in Canada.

It starts with the creation of original and quirky content in the Canpages blog. His team then seeds that content in the various social news sites like Digg and Reddit. Working with a large network of friends and contacts, he’s able to catch the eye of online influencers who might (or might not) promote that piece of original content.

His best success so far with Canpages has been this blog post about “Weird Canadian Restaurants”. It was submitted to Digg and generated 676 diggs and 101 comments. It was promoted to the first page of the site and generated good traffic (he did not disclose how much) for the Canpages blog. It was also favorited by people in StumbleUpon, another social tool that has the reputation of driving a lot of traffic. The post was well enough crafted to be picked up by Dan Mitchell from the New York Times, which generated some more traffic to the Canpages blog.

What it means: a great use (and a great understanding) of social media tools and sites to build a new directory brand and make it more exciting for “cool kids”. This is also a great strategy to build new incoming links to your domain, thereby increasing your page rank in Google. You’ve got to wonder though if there are long-lasting positive effects from both a brand equity and online directory site usage but I don’t think it hurts given the runner-up position they occupy in the market.