In a moment of glee for every person who hates social networks and/or the idea that they’re real businesses, research firm eMarketer has dropped its projections for the amount of money spent on social networks in the US, from an estimated $1.6 billion spent on social network ads, to $1.4 billion. It expects social network ad spending to increase by 55 percent this year versus 163 percent last year.
EMarketer feels it now has a better handle on social network ad spending for the more distant future, too. In 2011, it expects $2.4 billion to be spent versus its previous estimate of $2.7 billion.
Here are the reasons for the update to the previous report, which was published in December of 2007. A less rosy outlook on the economy will affect the amount of money spent by advertisers for years to come. Even the market leaders like Facebook and MySpace have yet to present compelling ad revenue models. Both companies, and others, have their own efforts to target advertising to users based on users’ demographic and personal information.
For those of us who think that social network application could partially prove their value through ads, the report now includes information on spending within social networking widgets and their more complex form, applications on Facebook and now other social networks. The fact that the forecast dropped in spite of this is not impressive.
But advertisers, like eMarketer, are still figuring out how to measure these ads, and define how valuable they are. Anyone who has seen a branded virtual good within a social game on Facebook can get an idea of this — what does a branded good mean to a user? Let’s say a user buys a virtual Mountain Dew bottle within a game. Does this mean you can tie that purchase to the likelihood that the user will go out and buy Mountain Dew?
Of course, television and newspaper ads aren’t necessarily more verifiable than social network ads, but advertisers are used to spending money on them. The bulls of social networking, like widget-maker Slide’s chief executive, Max Levchin, already see themselves as more engaging than television. But in order to prove themselves to advertisers on a large scale, they’ll need to bring better metrics to the table than traditional media can offer, and that proven forms of online advertising like search ads can even better offer.
EMarketer, in the meantime, expects to see social networks add new revenue from local advertising and automated social network ad sales.
And for those of us who wonder about whether or not Facebook is breaking even — and should need to be taking out $100 million loans for infrastructure — eMarketer says that it expects Facebook to make $265 million in ad revenue this year, below the previous $305 million projection. Note: The cost to an advertiser of creating branded applications on Facebook isn’t counted here
Of course, anyone reading about the report needs to remember that it doesn’t address other ways social networks make money, like e-commerce, that social networks and their applications are looking at closely.
Posts Tagged ‘co:MySpace’
New business models, the explosion of data, and new uses for technology topped the agenda at last week’s IBM Almaden Institute, which brought together a group of very smart researchers and industry experts from around the globe. They talked about how to innovate by taking advantage of the rising tide of data; topics included “Life on an Instrumented Planet.” Here are some highlights from a handful of the talks at IBM’s research center in the hills above San Jose, Calif. I think the speakers did a good job of reaching high elevations in their talks. This is the first of two posts on the conference.
Hal Varian, chief economist at Google, opened the conference with a talk about how components, complements and standards have become critical to innovation. Components are things like screws or microprocessors that are the essential ingredients for a more complex system. This was pretty elementary stuff, but Varian had some insights that you only get if you look at things from a high elevation.
Complements are things like DVD disks and DVD players. They both have to arrive in the market at the same time in order for the DVD market to take off. Varian says that coordination isn’t easy because such complements often involve companies in different industries with different business models. One of the fundamental drivers of coordination has been Moore’s Law, which holds that chip capacity doubles every couple of years or so, putting demands on improved performance across the entire technology spectrum.
Often, the value of one product is enhanced by the presence of another, like hamburger and ketchup or microprocessors and hard drives. Sometimes one complement tries to absorb another, like when Sony (consumer electronics maker) bought Columbia (movie studio) but that frequently results in poor results (AOL Time Warner).
Standards are great for the creation of product ecosystems, but it’s dangerous when one or two companies (Wintel) monopolize the supply of a standard component. If one partner in the ecosystem cuts prices, the entire group benefits. Revenue sharing turns out to be one way to get ecosystems to accelerate. For instance, DVD rentals didn’t take off right away because initially, Blockbuster had to buy movies from the DVD makers. They only became a hit when DVD makers gave Blockbuster the disks for free and then, in turn, Blockbuster gave back a share of the revenue every time a disk was rented. Hence, in today’s increasingly complicated world full of complex product ecosystems, innovations in business models may be key to making a product take off.
Kris Pister, founder of Dust Networks, talked about the progress made in the last decade by mesh networks based on a “smart dust” wireless sensors. He admitted that a lot of the early excitement around such networks was overhyped. As a professor at UC Berkeley, he pioneered the research from around 1997 to 2002. The goal was to create mesh networks with thousands or millions of nodes, each around a millimeter cubed in dimensions. Such nodes could be deployed in places such as grape vineyards where they could measure data, such as dryness or temperature, and pass it along to the next node via a short-range wireless signal. Read the rest of this entry »
Google is announcing Friend Connect (link goes live tonight), a way to “sprinkle social features across any web site in a matter of hours,” Google director of engineering David Glazer says. And also a way to put Google at the center of every social interaction on the web.
Friend Connect lets you integrate your list of friends, your interests and other information from a social network into any web site, a chance for smaller sites to include social networking information and third-party applications. A webmaster can implement Friend Connect through accessing an administrative page, and allowing information from Facebook and other sites onto his or her own site through code that they paste in.
See this sample site created by Google, below:
But Friend Connect is very much a work in progress. It will let you access your Facebook friends lists, to see things like which of your Facebook friends has also visited a particular site. But, it doesn’t offer a way for Facebook applications to run on your site. On the other hand, it very pointedly will let you run applications that use a standard called Open Social. However, MySpace, the largest social network that is part of Open Social — as well as Facebook — launched their respective rival “connect” services last week. More on that in a second.
Friend Connect’s three components:
One. A way for users to sign in to access their social network data on a third-party site. Friend Connect a so-called “single sign-on” system called OpenID, which offers one set of credentials that you can use anywhere on the web, instead of having to create new password and login. You can use AOL, Yahoo — or Google — usernames and passwords through Open ID to get access.
Two. A source of friends, where you’re able to access your friend relationship data from a social network, on a third-party site. The standard being used is called OAuth, and it lets you choose to bring in friends from sources. When Friend Connect launched tonight, it will integrate with Google Talk, Orkut and Facebook. Soon, hi5 and Plaxo. Eventually, standard APIs will give better access. MySpace isn’t ready, but probably will integrate at some point.
Three. Social network applications on Open Social. Applications built by third parties using the Open Social applications development standard will be able to run on any site.
Note for social network users and application developers: Sites that use Friend Connect can opt-in to introduce information back in to news feeds on other sites — so maybe you’ll see information from a friend on another site integrated into Facebook? It’s like Beacon, Facebook’s ad program, but better, maybe.
Why is this a big deal?
MySpace and Facebook have both introduced their own “connect services.” MySpace launched a service it calls “data availability” last Thursday, that also lets you access your MySpace data like friend relationships on third-party sites. Facebook released something similar on Friday, which was actually more of an update to its existing application programming interface for accessing its data on third-party sites (that API was first launched in the fall of 2006). In fact, Facebook’s API is apparently how Google is getting Facebook information for Friend Connect.
What does this all mean? Will thousands if not millions of smaller site begin integrating with social networks through any one of these services? Will third party applications on Facebook and other social networks find whole new audiences across the web? Who will offer the preferred method of connecting social applications: MySpace, Facebook or Google? Will it be MySpace because of its size, Facebook because its booming growth and impressive tech, Google because of its many interlocking services and market leadership in other areas?
We see the web moving toward an end-state where people can use any app with any friend on any site,” Glazer says.
What’s not clear is who gets to control the data, and who gets to make money.
For a little more, here’s an excerpt from Google’s response to my question about Google’s use of Facebook’s data. Note: I obtained this recording via ReadWriteTalk (Thanks, Sean), and I encourage you to read ReadWriteWeb’s excellent coverage of Friend Connect, here.
updated
We’re at the point that when either of the two social networking giants, MySpace and Facebook, does something, the other has to respond. Yesterday, MySpace unveiled its “Data Availability” initiative, allowing other sites around the Internet to utilize its users’ data to update profiles, photos, videos and other attributes. Today, according to a TechCrunch scoop, Facebook is following that up with “Facebook Connect”. Which does, wait for it — the exact same thing.
As Mike Arrington points out, Facebook Connect is basically an updated version of Facebook’s API for third party sites. These sites will now be able to use Facebook’s trusted identification methods, profile information (including pictures, videos, events and the like), friend lists and privacy settings. Just as with MySpace’s announcement, the idea is to make Facebook a central hub of users’ web experience.
Lest you think this wasn’t a game of one-upmanship: whereas MySpace announced Twitter as a launch partner for its initiative yesterday, Facebook is launching with Digg as a partner. The social news voting site is quite a bit larger than the micro-messaging Twitter.
Facebook Connect’s formal launch won’t happen for a couple of weeks. We’ll update when we know more.
update: Dave Morin, Facebook’s senior platform manager has posted on the Facebook Developers Blog with more details about Facebook Connect. Some of the details:
Today we are announcing Facebook Connect. Facebook Connect is the next iteration of Facebook Platform that allows users to “connect” their Facebook identity, friends and privacy to any site. This will now enable third party websites to implement and offer even more features of Facebook Platform off of Facebook – similar to features available to third party applications today on Facebook.
Here are just a few of the coming features of Facebook Connect:
Mobile life is blooming. Some 47 mobile social network companies have emerged globally, to help cater to our need to message and communicate while on the go.
But what about the huge incumbents, like MySpace or Facebook? Will they thrive on the mobile web?
Well, the 47 mobile-only networks will probably tell you that mobile is a whole different animal, and downplay the threat of a switch by their millions of users to those big guys. But in reality, even though some mobile-only social networks have gotten big — Mocospace, for example, has 1 billion page views worldwide, most of it in the US — their computer-based rivals are catching up now that new wireless devices, such as the iPhone, are making it easier for internet apps to transition to mobile.
My goal for this article was to find the top ten most significant social mobile companies.
It was difficult reporting. With so many different players competing in the mobile social network space, we’re seeing a lot of different approaches and fragmentation. For my own thinking, I sketched out a diagram during lunch with an entrepreneur (see above for a cleaned up version of it). It’s partly based on generalizations, but it’ll give you an idea of what’s happening here in the U.S.
I’ve organized the mobile social companies into four groups. In addition to heavyweights MySpace and Facebook, I’ve picked eight companies — based on market share, differentiation through features, niche market and technology — that seem to be emerging as the most significant players.
[Disclosure: I consult for one of the companies named here, Peperoni.]
Group 1: The internet heavyweights – MySpace and Facebook
When I talked to MySpace and Facebook to see what kind of uptake they’d been seeing on their mobile sites (eg. m.myspace.com) I got quite a surprise. According to the user numbers they provided, both companies have already passed Mocospace.
MySpace’s Brandon Lucas, Senior Director of Mobile Business Development told me MySpace Mobile USA had 1.4 billion visits last month. That’s compared to 1 billion visits to Mocospace this March, according to Mocospace CEO Justin Siegel. A source at Facebook confirmed to me that Facebook Mobile has also passed Mocospace’s numbers in the USA, too, but didn’t give me specific numbers. Expect announcements on that in the coming weeks.
MySpace Mobile launched in December 2006, followed by Facebook Mobile a month later. The growth of MySpace Mobile and Facebook Mobile is mainly due to operator deals that put them “ondeck.” MySpace and Facebook are looking to close as many deals with operators as possible. For Myspace Mobile, the goal is to be available on-deck with “every major operator, everywhere,” Lucas says. As of now, MySpace Mobile has signed 23 carriers in 13 countries, and we expect the number to rise. M-Metrics told MySpace Mobile around three weeks ago that they are the fastest growing mobile site in the US, says Lucas.
The barrier to traffic growth, according to Lucas, is awareness. Expect more banner ads for MySpace Mobile on its web site very soon to raise awareness. MySpace is willing to split revenue with operators, he says. Despite the split, “mobile advertising has grown in the last six months to be a real business for us”, he adds. He sees MySpace as playing the same role on mobile devices as it does on the web. He wants MySpace to be a “mobile advertising driver” for the industry — and wants to lure the brands advertising on its online version to add mobile advertising too. He said MySpace Mobile “wants to build a business for everybody” and that “we will share insights for everybody to profit.”
I also asked Lucas to comment on a MySpace strategy statement I came across in Stuart Dredge’s recent article on social mobile networking in New Media Age: ”We expect that half of our total traffic will be coming from mobile devices within the next five years,” the article quoted a MySpace representative as saying. Brandon said that’s a January quote from MySpace CEO Chris De Wolfe and reaffirms that mobile is one of the Read the rest of this entry »
FriendFeed has garnered a lot of popularity within the tech community for its ability to aggregate information across a wide range of social networks, and layer a new conversation on top of that. Minggl is a new service attempting to do something similar, only via the browser rather than a web page.
I sat down with Minggl founder Dewey Gaedcke and marketing director Brian Buser to go over the service and have them show me what it was all about.
Minggl exists as a browser plug-in for both Firefox and Internet Explorer. Thanks to this, it’s always running (as long as you want it to be) while your browser is open. Say you want to track what your contacts are doing. To do this on FriendFeed you would have to have window with the site open and switch back to check it constantly. With Minggl you simply browse the web as you normally would as notifications appear on your toolbar as your contacts update various services
But Minggl does a lot more than this. It also allows you to merge your friends together from different online networks and tag those friends so you can easily search for and find just who you are looking for. Say you have a group of friends you go hiking with. Simply tag anyone with “hiking” from across any network you have set up on Minggl, and they will show up in your sidebar upon a search.
The service also has a “status blaster” which allows you to update your status across all the sites that use such functionality, like Twitter, Facebook and MySpace. You can also do group messaging on networks from within Minggl. That feature is interesting because it points to one of the bigger differences that separates Minggl from other services, including FriendFeed.
Where FriendFeed uses sites’ APIs to pull in information from other networks, Minggl actually logs you in to the services in the background to pull information. Because of this, Gaedcke explains, Minggl has access to MySpace and LinkedIn and also the data on Facebook, such as the News Feed, that they won’t send out via API. You are constantly logged in to these sites, but you can still set the interval with which Minggl checks for updates.
Getting the information from these social networks was crucial for Minggl because it is “more friend-centric than news-centric,” Gaedcke notes.
Right now Minngl works with the Facebook, MySpace, LinkedIn and Twtter. The service also just launched integration with the popular social news voting site Digg to pull in the stories users submit and vote on.
The service doesn’t plan on stopping with those. Gaedcke and Buser said that it’s relatively easy to add more services to the toolbar, so we should expect the likes of YouTube, Flickr, Yelp and others soon. Also in the pipeline are some very cool and interesting features that they are hesitant to share at this time, but they gave me a sneak peak, and I can certainly vouch for them being potentially controversial — and popular, if executed right.
Minggl does have limited advertisements in the activity stream sidebar right now, but it is more focused on building up a loyal user base than monetizing right now
Another competitor for Minggl would have to be the social network-infused browser Flock. Flock might do things a little prettier, but it also requires that you download and use an entirely new browser. With Minggl, you can stick with either Firefox or Internet Explorer. Then there are newer services like MySocial 24×7 which takes FriendFeed’s services and ports them into your browser.
Okay, the title may be a slight exaggeration, but the data from a new study by the social contact search site Rapleaf is nonetheless interesting.
In what they claim is the largest social network study ever done, Rapleaf looked at the social connections of both men and women. All told, they collected data from over 30 million people on sites such as Facebook, MySpace, Bebo, Flickr, Hi5 and others.
Interestingly, when you focus on users with fewer connections (well, relatively speaking — we’re talking about one group of people with between 1 and 100 connections, and another with between 100 and 1,000), women tend to have more friends than men. However, when you get to a really large number of connections (1,000 to 10,000, and also 10,000+), men have more friends. Since it’s highly unlikely that someone (here’s looking at you Robert Scoble) actually knows 10,000 or more people well enough to consider them friends, this data would seem to suggest that men are simply using these networks more for business rather than personal usage.
Here’s some of the key data (find the full data here):
Of the people with at least 1 friend, 53.57% are female and 46.43% are male.
Social Networkers (1-100 friends):
- Around 80% of the sample set
- Women have on average 62 friends
- Men have on average 57 friends
- Women are more likely to be Social Networkers
Connectors (100-1,000 friends)
- Around 19% of the sample set
- Women have on average 185 friends
- Men have on average 172 friends
- Women are more likely to be Connectors
Super Connectors (1,000-10,000 friends):
- 0.66% of the sample set
- Women have on average 1,837 friends
- Men have on average 1,944 friends
- Men are more like to be Super Connectors
Uber Connectors (10,000+ friends)
- 0.02% of the sample set
- Women have on average 24,077 friends
- Men have on average 24,584 friends
- Men are more likely to be Uber Connectors
MySpace is the first social network company to let third party applications pay in order receive prominent placement in front of the site’s users. Sources tell social network blogger Nick O’Neill that they have been pitched between $50,000 and $100,000 by MySpace to appear for one week as a featured application on MySpace’s application gallery. Applications can also buy space on a category application page, so if you have a new music app you could have it be featured on the music app category page.
See the screenshot, above, of widget-maker Slide’s “SuperPoke! Pets” application, featured in the “Animals & Pets” category.
O’Neill thinks this is bad news for application ad networks — and that’s true as far as the pyramid scheme-like “cost per install” model goes, where one application will advertise another application within their own application (got all that?). But as we’ve covered, Social Media, Lookery and other ad networks are also working with brand advertisers and with new targeting practices to to reach social networking users. For many, the CPI model isn’t as relevant as it was last fall. Whether MySpace will compete more broadly against these companies seems to be an open question.
Of course, this slightly hurts any application that can’t afford to be featured, and benefits the better-funded apps that can grow through buying ads. Excerpt of the presentation, below, the rest of it on The Social Times.
Today, MySpace has more incremental news about its emerging developer platform. It has slightly rejigged its user interface to include a couple links to its existing gallery page of third party applications. One link is on the top toolbar on a user’s homepage, the other is on its user dashboard. These links may help more users find out about applications, even though the site has yet to add powerful ways for apps to spread among users.
MySpace has been much faster to roll out announcement about its developer platform than actual features — but that’s okay, because the site is the largest potential market left for third-party developers of social network applications.
MySpace gets around 74 million monthly active users in the US and around 110 million worldwide. As Max Levchin of leading widget-maker Slide told me yesterday, MySpace isn’t just about its size. The company matters because MySpace users in the United States like to use widgets (and presumably applications), and they’re “susceptible” to advertising.
While MySpace has allowed simple widgets for years, its developer platform offers the ability to build more complex applications that use notifications, email invites and other so-called “viral channels” to spread and keep users engaged.
So far, the gallery features more than 1,000 MySpace-approved applications that have — with minimal access to users until today — been installed a grand total of 2.1 million times.
SightSpeed, a desktop-based video conferencing application, tomorrow launches SightSpeed Light (see screenshot below), a widget video conferencing app, on the Myspace application platform.
SightSpeed Light provides a Flash-based free video chat and video mail between MySpace users, but it is also integrated with SightSpeed on the desktop. The company has plans to relase the widget on social networks LinkedIn, Salesforce, Plaxo, Orkut, Hi5 and others, but so far it doesn’t have a date for these releases.
Last year, SightSpeed released Vlip, a video logging and video chat website aimed at the casual user, but it seems to have fallen off the map.
This seems to be SightSpeed’s first foray into directly attracting the casual user, whereas for years it has attracted businesses. In 2007, some 1.5 billion minutes were used on SightSpeed, the company boasts, but it won’t release metrics on the size of its user base, traction and growth, or profitability.
The original SightSpeed product, mostly used by businesses, is a Windows/Mac desktop video conferencing application that comes in three packages: free and ad supported, a premium $9.95/mo subscription model that includes multi-party chatting, extended video mail, and video mail tracking, as well as SightSpeed business with an admin console and report-building for $19.95/mo.
Chief Technology Officer Aron Rosenberg says he considers the widget as just one way video conferencing will reach a mass audience — and he wants to stay ahead of free competitors Oovoo, Tokbox, and Skype Video.
“For all the people who have heard of Skype, there are billions of people who have not, and millions who associate [Skype] with just phone conferencing. Skype may have 200 million users, but so did Yahoo,” he says in a thinly veiled comparison to Google’s eclipse of Yahoo even though Yahoo was once much bigger.
SightSpeed’s advantage over Skype and other competitors is quality, Rosenberg said. However, Oovoo and Tokbox offer multi-party video chat for free, which SightSpeed charges for.
VoIP phones from Vonage can be integrated with Sightspeed. Sighspeed can be co-branded and white labeled, has an open API, and it also works well with PC manufacturers says Rosenberg, taking another swipe at Skype by remarking how closed and un-interoperable Ebay’s stepchild is.
Sightspeed is included in every Creative Labs webcam installed, which Rosenberg credits for a significant chunk of the company’s distribution, as well as a partnership with Logitech, and has received rave reviews from PC Mag.
The future for SightSpeed is on the mobile device, says Rosenberg, who looks to the US to advance its phones in the upcoming years — Taiwan already has $100-$200 video phones he says.
So far, SightSpeed works with an Nokia N95 mobile phone, with plans to be accessible on the next-generation iPhone.
World’s biggest chip maker qualms tech market fears: Intel reported solid first-quarter results in the face of a weak U.S. economy. The company reported revenue was up 9 percent to $9.7 billion in the quarter ended March 31 while net income was $1.4 billion, down 12 percent due to a write-down but in line with expectations. Some growth is coming from strong server-chip sales as Google and others build massive data centers for cloud computing, said Paul Otellini, Intel’s CEO. Second-quarter guidance exceeded analysts’ expectations. About 80 percent of the chip company’s sales are overseas, which explains the strong growth despite a U.S. recession. Intel is pounding its rival Advanced Micro Devices, which is laying off 10 percent of its work force. AMD reports earnings on Thursday. Flash memory prices were down again, hurting Intel’s margins. The chip giant is selling its NOR flash memory business to a joint venture, dubbed Numonyx, with ST Microelectronics. Intel’s stock rose 8 percent in after-hours trading.
Codexis files for IPO: Biotech company Codexis hopes to raise $100 million in an IPO. The Redwood City, Calif., company sells catalysts used in chemical manufacturing and other processes. It also makes biofuels. Contractors use the Codexis catalysts to make ingredients for drug companiesl. In 2007, Codexis lost $39 million on sales of $25.3 million. The company has raised $72 million from investors including Shell Oil, Bio-One Capital, CMEA Ventures, Pequot Ventures, Chevron Technology Ventures and Maxygen. Credit Suisse Group, Goldman Sachs & Co., Piper Jaffray Co., RBC Capital Markets and Thomas Weisel Partners LLC are the underwriters for the offering.
Cell phone companies support LTE: Big wireless equipment makers threw their support behind a high-speed wireless Internet and cell phone technology known as LTE, or long-term evolution. Nokia, Alcatel-Lucent, Ericsson, and NEC agreed to limit royalty fees charged for patents related to LTE. The wireless network is one of the primary competitors to the WiMax wireless Internet technology supported by Intel and others. The LTE networks will be built by carriers such as Vodaphone Group, AT&T and Verizon in the coming years as they promise to deliver fast web-browsing over mobile gadgets.
Tesla drives into litigation: Electric sports car maker has filed a lawsuit against rival electric-car maker Fisker Automotive. Tesla alleged that the designers at Fisker misappropriated trade secrets after they designed the body and interior of Tesla’s car and then announced they planned to create their own vehicle. On top of that, Tesla is also being sued for failing to pay a transmission supplier. Magna Powertrain sued Tesla for failing to pay Magna for its work to design a two-speed transmission for the Tesla Roadster. Magna is seeking $5.6 million.
Peter Gabriel backs new music discovery site: TechCrunch reports the rock star is backing a digital music company dubbed The Filter. The site is a meta-recommendation engine for movies, music, and web video. Recommendations on the site’s home page change daily and there are RSS feeds to music and movies. The site is in a closed beta at the moment.
Porn action: AdultVest Inc., the Beverly Hills, Calif.-based investment bank that focuses on the adult industry, said in a statement that it has acquired iPorn.com. The company said it has very big plans for iPorn and the acquisition is a “natural fit.” AdultVest said it has other expansion plans on the way. We’ll leave that one alone.
MySpace shoots for global expansion: News Corp.’s MySpace plans a big expansion overseas to help boost revenue and profits in coming years. Travis Katz, senior vice president of MySpace’s international business, said the company plans expansions overseas. The company launched its Korean-language site on Tuesday.
Hearst Magazines teams up with Spleak network: The publisher, whose magazines including CosmoGirl, Seventeen and Teen, will now distribute its content to sites like Facebook and AIM through Spleak’s platform, which combines traditional media with user generated content. Mashable has more details.
Updated with commentary from RockYou
It’s a tale of two social network developer platforms. Hi5, a site popular in some Spanish-speaking Latin American countries and other regions around the world, launched its platform at the beginning of this month — and the third parties that have applications on the site are reporting impressive growth.
Leading widget company RockYou, for example, says its “SuperFive” application has already been installed two million times in the last couple of weeks. Why? Hi5 specifically offers ways for users to contact each other through third-party applications.
Meanwhile, applications on market leader MySpace’s platform have been seeing insignificant growth since it launched in mid-March — because MySpace has yet to introduce effective ways for applications to contact users. However, one top developer tells us that MySpace will soon be offering notifications, email messages, and other so-called “viral channels” already available on Hi5.
So MySpace may soon become the hot spot for applications that third parties have long hoped for. Meanwhile, Hi5 may have done a better job of addressing the spam problem.
Does “viral growth” = spam?
To get an idea of what I mean by “viral growth,” here’s a closer look at RockYou’s “SuperFive” application, which lets users send action messages like a “hug,” “tickle,” etc. to Hi5 friends. If this sounds familiar, it’s because 1) Hi5 already has a feature called “five” which is basically a copy of Facebook’s “poke” feature and 2) RockYou and competitors already offer Facebook applications where you can hug/tickle/poke your Facebook friends
I’ve been hearing that this messaging feature is actually useful for companies that want branded contact with users, like being able to “throw a Coke” at a friend (I made that example up, but you get my drift). Many developers have made good money from selling branded pokes/hugs/tickles.
Update: While this sort of application may seem silly to me, and to many VentureBeat readers, RockYou points out that many, many users find it meaningful — and who are we to judge that? RockYou also makes another interesting point.
Facebook, the first social network to offer a developer platform, has spent much of the past year shutting down ways that applications spam users — and trying to placate users who don’t want to use applications.
Hi5 has instead come out with a new notification system specifically for applications (see the bottom of the screenshot). This means that there is little risk of users feeling spammed by applications messages, because they can just ignore invites, etc. if they don’t want to deal with it.
RockYou says it has been working hard with Hi5 and other social networks to make sure that its user experience is non-intrusive.
The bigger picture
Another other story here is that Hi5 — and MySpace — allow applications built in the OpenSocial application standard to run on their platforms. OpenSocial lets a developer quickly modify an application so it can work on any site that conforms to OpenSocial’s specifications. RockYou and many other developers say that Open Social is saving them time writing code, even though each member social network requires some customization to fit its particular feature set.
It looks like Hi5 is going to stay at the center of developer attention, at least for awhile. As the San Francisco company bragged when it launched its platform, there’s only a 25 percent overlap between its 35 million monthly active worldwide users, and users on rival social networks: The average Hi5 user isn’t on MySpace or Facebook. This means that it is especially important for developers to build applications in languages besides English, top application developer Blake Commagere tells me. Hi5 even offered free language translation services to the first 100 apps submitted.
While still in its early days, Hi5 may have found a good balance between growth and spam-control.
The trend has been clear for a while: Digital music is the future of the industry. Now we have the data to prove it. Apple’s iTunes music store has surpassed Wal-Mart to become the number 1 retailer of music in the United States.
Okay, so a digital store is the top seller of music in the United States, now what? War.
As was reported yesterday, MySpace is entering the fray with MySpace Music (our coverage). Amazon, already a strong competitor in traditional music sales, also has a solid digital offering with AmazonMP3. These three behemoths should shape the landscape for years to come.
Apple continues to dominate the space currently, but it might have a few chinks in its armor. Of the four major music labels, only EMI is currently allowing iTunes to sell DRM-free versions of its catalog. Steve Jobs himself has said this will be the future of the industry, yet iTunes is failing to deliver on this promise (our coverage). AmazonMP3 has all of the major labels providing DRM-free tracks, while MySpace Music already has three of the four on board (interestingly, with only EMI holding out).
This lack of DRM-free music is hardly Apple’s fault — it’s clear the record labels want a legitimate contender to iTunes to lessen Jobs’ stranglehold on their industry. DRM-free music is the leverage they have at the moment, and they are using it.
However, the unwillingness to provide DRM-free tracks while still offering up the protected versions on iTunes is also assuring that Apple will keep selling iPods. The truth is that most people still do not care about DRM-free or even necessarily understand what it means. They want a fast and simple way to buy music online — and no one does that better than Apple. By purchasing all of those protected tracks on iTunes, they must also keep buying iPods to play them.
Buying iPods, in turn, will keep them using iTunes. Round and round we go. This is a cycle the other services will need to negate to compete. While Amazon is playing the DRM-free card, MySpace Music can hope its huge social network can make for a more compelling musical experience than iTunes.
There has been talk that Apple could switch things up and move to a subscription-based version of iTunes (our coverage). While it may seem odd that Apple would switch from a strategy that has led to its dominance (selling individual protected tracks), Apple may also see the writing on the wall with these two strong competitors coming for them.
So what about the other big names in music sales?
Wal-Mart dominated the music purchasing landscape for a long time thanks to its brick and mortar stores. The company has a digital download service, but it is foolishly restricted to users who are running Windows XP, 2000 or Vista, use Internet Explorer as their browser and Windows Media Player as their digital music player. Those kind of limitations are not going to win over many iTunes users.
Another retail power, Best Buy, also has a digital music store, but it is laughably complex. First of all they have a system where you have to purchase digital download cards (yes, actual physical cards) or buy a group of songs online. They also have a streaming service via a partnership with Rhapsody , but once again, access is very restrictive to select operating systems and browsers.
This looks to be a three horse race for now between iTunes, AmazonMP3 and MySpace Music — at least until Facebook gets involved.
Social networking site MySpace and music have worked well together in the past. New bands got recognition, popular bands gained new fans. Now MySpace is looking to extend that relationship by launching a full-scale music store. This launch will be happening sometime within the next 5 days, according to Reuters.
The service will be appropriately titled “MySpace Music”, and is said to have the support of at least 3 of the major labels. Sony BMG Music Entertainment, Vivendi’s Universal Music Group and Warner Music Group Corp. would each have a stake in the new service along with MySpace parent News Corp. It is not clear if the other big label, EMI, is involved.
None of the companies are talking, so details are scant at this point, but the service is said to be a direct competitor to Apple’s iTunes. It’s well known that the record labels have long thought that Steve Jobs has held too much over their industry. Their slowness in delivering DRM-free music to iTunes while giving it to AmazonMP3 may be helping that service grow (our coverage). MySpace Music could well be an attack on another front.
The fact that EMI is not known to be involved in the MySpace Music partnership makes sense as well — EMI is still the only major label giving Apple DRM-free music, so they presumably have a pretty good relationship.
MySpace Music is launching now because News Corp. and Universal Music have finally settled a longstanding lawsuit, according to Silicon Alley Insider.
[photo: flickr/orange beard]
Online video traffic in the UK is up 178 percent over the past year, new Hitwise data shows. With headlines trumpeting the rise of online video stateside, it’s easy to overlook the effect it is having in other parts of the world as well.
Not surprisingly, the most popular video site in the UK is YouTube. With a market share over 55 percent, the site is actually more dominant in the UK than it is in the United States, where it has a market share around 34 percent, according to the latest numbers from comScore.
YouTube’s UK dominance is even more impressive when you consider that the No. 2 video site is the UK portal of YouTube with nearly a 14 percent market share! Combined, YouTube controls nearly 70 percent of the market.
The third most popular video site in the UK is the BBC’s iPlayer. The site streams the BBC’s original content over the Internet to your web browser. The iPlayer has been getting quite a bit of buzz stateside recently for its publicly stated desire to work with Apple to become available on the Apple TV device. The BBC recently launched a beta version of the iPlayer for the iPhone in the UK as well.
The only other non-Google property with much traction is MySpaceTV, which controls just over 5 percent of the market. MySpace is the second most popular social networking site in the UK behind Facebook and just ahead of Bebo.
[The Hitwise chart above shows the surge in UK Internet traffic to top video sites over the past two years.]
MySpace nearing deals with music labels — Before long, MySpace may be offering streaming music and ad-supported downloads from Sony BMG and Warner Music Group, according to a report from the NY Post. A deal with the two music giants might challenge the dominance of Imeem, which has so far held the advantage in its deals with the four music majors.
Tudou.com raises another $53M, maybe — The Chinese video portal Tudou.com may have picked up $53 million, raising its lifetime total to $81 million, according to news site SinoCast. That wasn’t quite enough for peHUB, which made some calls and was “peppered” with “no comments” from previous investors. Primack suggests that the company may be nervous about an upcoming government penalty, but is likely just tardy in announcing the funding.
Mixx makes top users even more powerful — While the social news site Digg has moved to limit the power of its top users, newer, smaller competitor Mixx seems to have the opposite idea. The site, which calls its top users “Super Mixxers”, has given them the ability to tag news stories as “Breaking”, effectively forcing those stories to display on the front page. Giving the most devoted users more powers essentially makes them the editors of the site, a risky move that other sites have so far avoided.
Xerox begins offering carbon calculator for business — What kind of environmental footprint does the paper use of your office cause? What about using the printer? Xerox has unveiled a new “Sustainability Calculator” to let you know. Of course, nothing is free in life, and becoming sustainable might involve buying some of Xerox’s newest products or availing yourself of their “document outsourcing” service. In the long run, though, getting rid of that old ice-cream cart-sized printer might both help the environment and save money. Get an earful on why from some Xerox spokespeople, here.
Founder’s Co-op starts seeding Seattle-area companies — The co-founders of ill-fated local site Judy’s Book have learned from their lesson, and decided not to start a new company. Instead, the two have opened the Founder’s Co-op, a $2 million fund for seed-stage companies in the Seattle area. Investments will range from $10,000 to $250,000, no doubt served with a side of hard-earned wisdom. Read more at the Seattle PI.
Celebrities are the sign of the beast bubble — Taking a trip down memory lane, GigaOm recalls massive fundings of sites started by actors, musicians and sports stars in the dotcom era — then compares them with recent investments into IBeatYou (coverage here), which has received investment from sports stars, and Skispace, owned by a ski champion. “There might be more such celebrity social-something-video-whatever efforts lurking … when you read about them, well, you know the end is near,” says Om. Then again, we survived the launch three weeks ago of MC Hammer’s DanceJam, so maybe the internet is more resilient this time around.
Viewdle takes first investment from Dubai fund — Viewdle, a company that’s working on a video search technology based on facial recognition, has raised an undisclosed first funding from Dubai-based investment group KIT Capital, according to VentureWire (subscription required). We covered Viewdle during its TechCrunch40 launch.