The Praized Blog

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.

Yesterday, I wrote about what I thought were the most important news in 2007 in the local and social media space. Today, I’d like to propose my 2008 predictions, an always interesting exercise.

1. The year of Identity. One of the big challenges of social media is having to sign-up and add your friends in a multitude of web sites. Expect 2008 to be the year where this problem becomes a major issue and gets potentially solved through identity interoperability initiatives like OpenID.
2. Social is now everywhere and open. The last few months of 2007 have set the stage for a very social 2008. Any new major initiatives will include social elements by default and will use existing standards like OpenSocial, DiSo or Facebook.
3. Fragmentation & personalization of media. Given the lower barrier to entry for new local/social projects, user and advertiser fragmentation will continue to accelerate in 2008. From a user point of view, this will lead to new personalization tools allowing consumers to create their own unique media view.
4. The year of ad networks. As a corollary of point #3 above, given that user fragmentation will accelerate, an increasingly large number of ad networks will pop-up to aggregate consumers into a critical advertising mass. It’s all about advertiser defragmentation. Directory publishers will want to become ad networks themselves to push their ads outside of their core destination sites in order to increase their total reach.
5. Content wants to be distributed. That’s the second corollary of point #3. Increasing user fragmentation requires content producers to atomize their content and push it in the fabric of the web. Think of your business in terms of content units or atoms (some inspiration came from Clay Shirky’s “fame vs. fortune” post from 2003).
6. Social graph-based search. I am now a firm believer that social graph-based search will be the future of search (including local search) and we will see this concept gain some tractions in 2008. I think humans will always trust recommendations and advice from people in their “social network” (friends, family, colleagues, known experts, etc.) more than a machine. Online word-of-mouth is the biggest local search opportunity out there.
7. More M&A activity in local. 2007 was quite active from a local M&A (Idearc buying Infospace’s directory business, Citysearch/InsiderPages, AT&T/Ingenio, Marchex/Voicestar, etc.) but I expect 2008 to be even more active given i) the need for directory publishers to execute on their strategies and ii) the need to aggregate traffic to increase advertiser ROI.
8. Mobile: the year before the big bang. 2008 will be the year where a solid mobile development base (open devices, networks, platforms) is established leading to an explosion in 2009. Watch for the Google spectrum bid in January.

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.

The day started with Robert Scoble discussing how “social graph-based search” (Mahalo, Techmeme, Facebook, etc.) is going to beat Google and other search engines.

Scott Karp summarizes Robert’s points:

• Humans can judge what’s missing from an aggregation of information on a topic
• The key to effective human filtering is leveraging a “fabric of trusted individuals”/”people who are trusted and credible”
• By connecting these trusted people through a social network, you can leverage that resulting social graph to validate trust and create network effects

Then, Karl Martino added:

(…) there is a growing role for “Trusted Human Editors In Filtering The Web”. Our friends, our families, our communities. Not just machines and algorithms. My favorite and fellow bloggers, Slashdot, Salon, the home page of the NYTimes, Philly Future, Shelley Powers, Scott himself, my news reader subscriptions, are all trusted humans, or representations of trusted humans, filtering the Web for me. So it
still comes down to trust - What organizations do we trust? What systems do we trust? What communities do we trust? What people do we trust?

What it means: I believe the web is slowly transforming itself into a big word of mouth machine. Social will eventually be embedded directly in the fabric of the world wide web. Media companies have an advantage today as they are a trusted source but those that resist the “socialization” of the web will be left behind. In the directory business, there is a saying that word of mouth is the biggest competitor out there. I think it can become the biggest opportunity in local search.

I’ve been reading many articles about social search in the press in the last few months. Jimmy Wales’ Wikia (and to a lesser extent Jason Calacanis’ Mahalo) has been getting a lot of buzz and I’m not sure I saw the big potential until I read this article in today’s New York Times. Naver.com isthe leading search engine in South Korea with 77% of all web searches (vs. 1.7% for Google) and it’s leveraging social search.

Highlights:

When NHN, an online gaming company, set up the search portal in 1999, the site looked like a grocery store where most of the shelves were empty. Like Google, Naver found there simply was not enough Korean text in cyberspace to make a Korean search engine a viable business. “So we began creating Korean-language text,” said Lee Kyung Ryul, an NHN spokesman. “At Google, users basically look for data that already exists on the Internet. In South Korea, if you want to be a search engine, you have to create your own database.” The strategy was right on the money. In this country, where more than 70 percent of a population of 48 million use the Internet, most of them with high-speed connections, people do not just want information when they log on; they want a sense of community and the kind of human interaction provided by Naver’s “Knowledge iN” real-time question-and-answer platform. (…)

Each day, on average, 16 million people visit Naver — the name comes from the English words neighbor and navigator — keying 110 million queries into its standard Google-like search function. But Naver users also post an average of 44,000 questions a day through Knowledge iN, the interactive Q.&A. database. These receive about 110,000 answers, ranging from one-sentence replies to academic essays complete with footnotes. The format, which Naver introduced in 2002, has become a must-have feature for Korean search portals. The portals maintain the questions and answers in proprietary databases not shared with other portals or with search engines like Google. When a visitor to a portal does a Web search, its search engine yields relevant items from its own Q.&A. database along with traditional search results from news sites and Web pages. Naver has so far accumulated a user-generated database of 70 million entries. (…)

Google, which started its search service in the Korean language in 2000, introduced an upgraded Korean-language service in May. The new version deviates from Google’s celebrated bare-bones style. In South Korea, people prefer portal sites that resemble department stores, filled with eye-catching animation and multiple features. “It’s obvious to me that Korea is a great laboratory of the digital age,” Eric E. Schmidt, the chairman of Google, said in Seoul at the introduction of the new search service.

What it means: I’m starting to think social search has a great future but I also think it’s difficult to start from scratch like Wikia and Mahalo. I also think there might be an amazing opportunity out there for directory publishers (and anyone operating a local search site with a good amount of traffic) to launch a social search application to complement their current database of content. Who will be the first large-scale local social search site?

Yesterday was a fascinating day at Digg, the very popular social news voting site. After receiving a cease & desist letter asking the Digg management team to remove posts containing the key to cracking the HD-DVD encryption code, they removed the posts and deleted the accounts of the people who posted them.

Following that decision, their users revolted and started submitting the encryption code in all sorts of creative fashion. During part of the day, all the top news on Digg were about that story. Digg finally decided they would not fight the community and “…after seeing hundreds of stories and reading thousands of comments, you’ve made it clear. You’d rather see Digg go down fighting than bow down to a bigger company. We hear you, and effective immediately we won’t delete stories or comments containing the code and will deal with whatever the consequences might be. If we lose, then what the hell, at least we died trying.”

What it means: don’t underestimate the power of your users within a social media environment. Users become a much more important stakeholder in your day-to-day operations. Mashable has an interesting take on the future of this situation where Digg users could actually contribute money to a defense fund if they get sued. Mashable adds “Digg users could also significantly affect the coverage of the story on the Internet and in the press, even swaying popular opinion. An opportunity in a crisis?” Fascinating!

Having worked in the videogames industry in a previous life, I was intrigued by this blog post by Jeremy Liew from Lightspeed Ventures Partners. In it, he discusses how point systems can reward user behavior in social media and takes Yelp as an example.

Here’s an excerpt from his post:

The Pew Internet & American Life Project just released a new report about tagging. The survey has found that “28% of Internet users have tagged or categorized content online such as photos, news stories or blog posts. On a typical day online, 7% of internet users say they tag or categorize online content. ”

What is a tag?

According to Wikipedia, “a tag is a (relevant) keyword or term associated with or assigned to a piece of information (like picture, article, or video clip), thus describing the item and enabling keyword-based classification of information it is applied to.”

Who are the taggers?

According to the survey, “Taggers look like classic early adopters of technology. They are more likely to be under age 40, and have higher levels of education and income. Taggers are considerably more likely to have broadband connections at home, rather than dial-up connections. Men and women are equally likely to be taggers, while online minorities are a bit more likely than whites to be taggers.”

In addition, there is also an interesting interview with David Weinberger (co-author of the Cluetrain Manifesto). Asked “What started the current interest in tagging? He answers: “First, tagging lets us organize the vastness of the Web. Second, tagging is social.” He’s also working on a new book: Everything Is Miscellaneous: The Power of the New Digital Disorder

(found via David Weinberger’s blog)

What it means: Those numbers are definitely higher than I thought they would be. Ever since I started blogging (a short three months ago!), I’ve discovered the power of tags. Not only do tags help organize your content, they help others find your content through search engines or other sites like Technorati or Del.icio.us. Coming from the business directory (”Yellow Pages”) world, I believe the future marriage of taxonomy and tags (folksonomy) will create a much stronger online categorization system. As more and more people start tagging content, any web site owner with structured data needs to allow their users to tag the information. BTW, David’s book seems fascinating. I wonder if one of my readers has received an advanced copy and could comment on it?

Danny Sullivan from Search Engine Land dropped a bomb on the SEO world last Wednesday by firmly putting a new stake in the ground:

“…over the past few weeks, I’ve found myself more and more thinking that if you want to go beyond Google as a search marketer, the other search engines that matter first are the “social media search engines.” After them come the other major general purpose search engines like Yahoo, Microsoft and Ask.”

“Search marketers should tap into search engines — and that includes the social media search engines. Neil Patel’s Forget ABCs - The Social Media Alphabet Is DNRS (…) is an excellent introduction to some of these players, for those not up on social media search engines and social media optimization. (…) They are traffic powerhouses you can’t ignore.”

What it means: Wow! Social Media (Digg, Techmeme, Del.icio.us, possibly MySpace, etc.) are now considered to be the second biggest source of traffic after Google for certain types of sites (news, blogs, etc.). Which means Social Media Optimization (discussed in the Praized blog in November) should now be a key element of your traffic strategy. Are you properly leveraging these sites?

I was just reading Scott Karp’s post about the demise of Findory, a personalized news service created by Greg Linden (which strangely enough I quoted in the Praized blog yesterday)

Scott cites Om Malik : “Despite being drop dead simple, Findory never realized its true potential as an information discovery engine. It has all the makings of being a personal memetracker, something a lot of folks have been clamoring for. In contrast the general purpose memetrackers that follow conversations, like Techmeme and Tailrank keep growing. ”