5. MySpace acquired by News Corp

In the age before the rise of Facebook, MySpace was the new behemoth in the social network space. Earlier players (sixdegrees.com, friendster) had appeared and faded but MySpace seemed to be on a never-ending growth trend. When NewsCorp offered US$580 million for the company in 2005, it looked like an outrageous amount of money and a few people claimed that the founders could have received more money if they had held out.

It is possible that MySpace could have grown into something even bigger but, under NewsCorp’s umbrella, the company seems to have had a hard time keeping up with the competition. The rise and multi-billion dollar valuation of Facebook seems to illustrate what could have been, had MySpace remained independent but, on the other hand, the fall of friendster might also have served as a potential scenario.

Either way, the deal established the concept of social network sites as here to stay.

4. YouTube acquired by Google

It was a deal that brought back many fond memories of the bygone dotcom era: a small company with no revenue and no business plan in place getting acquired for US1.65 billion. Google’s acquisition of YouTube in 2006, the largest in its history, ended up being an outlier in terms of outsized deals in the Web 2.0 space.

But it did establish consumer-created content, and online videos as two important trend in the internet space. In one felt swoop, the deal put on a spark to the online video space and, while the company has had to contend with issues around illegal videos being posted to its site, forced video content producers to start thinking about online distribution strategies.

That deal can be seen as the grandfather of Hulu, iTunes and Amazon’s video offering, as well as Netflix on demand.

3. Apple and AT&T partnership

Sometimes, a partnership is more important than an acquisition. In the case of this deal, having AT&T, one of the most traditional telco vendors, agree to major concessions in order to get its hand on a coveted new phone was revolutionary: in a world where carriers traditionally decided what software was running on the phone and what sites could be accessed with it, AT&T let Apple make all the design decisions, open up the deck to external developers, under some levels of control, and provide access to any site on the internet.

From the moment the iPhone was announced, it looked like a winner. It helped move more people to GSM-based networks, allowing for more interesting phones to enter the market. The 2007 partnership heralded a new age of competition and innovation in the mobile space, delivering, for the first time, on some of the promises that had been made around that concept for well over a decade. It also forced carrier to rethink their own business models as the heavy loads of traffic generated by the 3rd and 4th generation of the device defied the predicted usage patterns and forced mobile providers to upgrade their network.

2. Time-Warner acquired by AOL

Whether a deal is good depends on the side of the table one sits on. The January 2000 acquisition of Time-Warner by AOL was great for AOL shareholders and turned disastrous for Time-Warner’s. Playing on the fear instilled in media companies by the success of dotcoms left and right, AOL managed to engineer a deal where most of the shares of a merger would go to its shareholders.

Ultimately, the deal became a disaster for all parties involved as the attempt at finding synergies between the two companies found themselves bumping against the cold reality of political warfare and corporate protectionism. With units fighting against each other for most of the decade, the only way to reclaim the piece was to spin-off AOL, 9 years later, for less than 1 percent of the combined value of the two companies in 2000.

If there is a bigger example of destruction of financial value by a deal, I’m not aware of it. Ultimately, the importance of this deal is two-fold: first, it was the last big deal of the dotcom era and can serve as the marker for the end of that era (some might quibble that the stock market didn’t fall apart until about 6 months later but that’s just a detail). The deal also showed that expertise in online and not online are not necessarily compatible. Both require different business models and experts who understand the particulars of each market.

1. Google acquires Applied Semantics

The number one tech deal of the decade is probably going to be a contentious choice as it is also one of the smallest deal on a financial basis. Google acquired Applied Semantics in 2003 for a bit over US$100 million, most of it in stock. What did Applied Semantics do? Well, to put it quite simply, it did contextual text-based advertising. The company’s work serves as the base for Google’s AdSense program, which delivers roughly half of Google’s ad revenue. I would argue that, without this acquisition, Google’s advertising reach would not have extended as far as it did and that this acquisition serves as one of the largest drivers of revenue to the company and its key differentiator against other online ad offerings.

Because AdSense has been such a substantial engine of revenue Growth for Google; because it was developed by an outside company most people haven’t heard off; because Google is now one of the most important players in the tech space, dictating and directing trends in our industry;  I would say that this is the single most important tech deal of the decade.

Tristan Louis is the founder and CEO of Keepskor and writes the influential tnl.net weblog, where this was initially posted under the title 10 Tech Deals that Defined the Decade — Part 2. You can follow him on twitter here or receive his weekly newsletter by subscribing here.

10. IBM acquires PwC Consulting

In 2002, IBM acquired the consulting arm of Price-Waterhouse for US$3.5 billion. The move helped solidify IBM’s position in the consulting business and helped it move away from being a hardware and software manufacturer and more into the higher-margins consulting arena. The deal was very favorable to IBM in that it was able to acquire the company for less than 1 time revenue.

10.b PayPal acquired by Ebay

When Ebay acquired Paypal for US$1.5 billion, the move seemed to be a very risky one. Why would an auction house want to get an emerging payment system that really didn’t seem to fit much with its business model.

Ultimately, the deal has turned out to be quite a good bet as Paypal is now the engine of Ebay’s growth. In fact, most of the value of Ebay now resides in a payment system that has left many financial institution envious of its reach.

9. Lenovo acquires IBM’s computer division

In 2005, the company that had launched the personal computer revolution into the office changed hand as Lenovo, previously a local chinese computer manufacturer with no real global footprint, acquired IBM’s personal computer division for US$1.3 billion. The deal established Lenovo as a global player in the PC market and heralded the arrival of Chinese companies on the global scene.

8. Verizon acquires MCI

In the 1990s, MCI became one of the largest players in the telecommunication business, acquiring and rolling up small regional telephone companies and internet backbone operators. The problem, however, was that most of the growth it demonstrated on paper was based on fraudulent statements and accounting tricks that ended up with the company filing the largest bankruptcy on record at the time (this has since been superceded by other bankruptcies).  Verizon acquired the company in 2005 for $US 6.7 billion, picking up one of the largest internet backbone operator in the process.

The deal, which had come on the heel of SBC’s acquisition of AT&T, was the last one in the landline telecom consolidation that left most of the country’s telephone and internet infrastructure under the control of either AT&T or Verizon.

7. Microsoft / Yahoo partner on Search

Sometimes, the importance of a deal has move to do with the disruptive effect it has on the parties involved than the successful outcome it may represent. Such is the case of the Microsoft/Yahoo partnership which came after years of discussions between the two companies. From 2005 to 2007, Microsoft attempted to quietly acquire Yahoo but the reluctance of Yahoo’s leadership at the time left those calls unanswered. In February 2008, Microsoft decided to take the discussion to a whole new level by making an unsolicited takeover bid of $US44.6 billion in cash and stock in early 2008. The goal was to combine the two companies into a combined one that could compete with Google. Over the next quarter, the two company would battle publicly, with Microsoft eventually giving up on its attempt.

For the next year and a half, Yahoo went through major upheavals due to its refusal to take Microsoft’s offer and the negative impact it ended up having on its market capitalization. With a new CEO installed, Yahoo then went on to agree to outsource its search business to Microsoft, taking it away from the business that had initially served as the foundation of the company. While the link-up has not been completed as of this writing, the disruption that all those negotiations created for the two companies allowed their chief rival, Google, to consolidate its hold on the markets that were at stake. As of this writing, the market share of search held by a combined Yahoo/Microsoft partnership has dropped substantially from where it was when the Microsoft bid was initially made.

6. Weblogs Inc. acquired by AOL

Weblogs Inc. was founded by Jason Calacanis (and Brian Alvey) as a network of blogs, including the popular engadget, which was run by Pete Rojas (also the founder of Gizmodo). When AOL bought the company, in 2005, the price was rumored to be around US$25 to US$30 million. At the time, some felt AOL had overpaid. Today, some feel Weblogs Inc. sold for too cheap.

The reason I would consider this deal significant is that it was the first major deal involving blogs (some would argue that Google’s acquisition of blogger fit the bill but my counter to that was that blogger was a blog tool company while weblogs inc. was a blog content company). Because AOL, an arm of Time-Warner at the time, was a large corporate entity, this acquisition legitimized blogging within the corporate world and made it easier for any subsequent blog-related deal to happen.

In the next entry, we will look at the top 5 on the list. Some of them may surprise you.

Update: Part 2 is up.

Tristan Louis is the founder and CEO of Keepskor and writes the influential tnl.net weblog, where this was initially posted under the title 10 Tech Deals that defined the decade — Part 1. You can follow him on twitter here or receive his weekly newsletter by subscribing here.

So the first prediction I will make is a purely personal one and more of a promise than a prediction: 2009 will be a year when more new postings will emerge from TNL.net.

Macro-economics

I do not share the optimism of many other people in the technology field when it comes to macro-economic factors and their impact on the technology field. My view is that the first half of 2009 will be much worse than the last half of 2008 and that the second half of the year will, at best, look like the first half of last year.

I suspect that the financial picture will get more constrained over the next fiew months as banks start feeling the impact of a consumer-led credit card crisis as individuals try to save their houses by maxing out the credit card instead and eventually reach the end of the credit limit, unable to repay.

In the broader economy, the current credit crunch will continue to have an impact on all industry and I suspect this will lead to large companies first encouraging voluntary layoffs, followed by further job cuts. This will translate into a larger impact on the retail sector, which is still larger than it ought to be under the current condition. Expect more consolidation in retail, with some large players closing shop altogether.

Start-ups

I don’t think it’s very hard to predict a wave of start-up failures this year. However, this will not be anywhere near as bad as it was during the first dotcom bubble because the current crash is not seeing inflated VC investments as its core. The level of investments in web 2.0 companies never reached the excesses we saw during web 1.0 so I suspect that many start-ups will float away with more of a wimper than a bang.

Established Web Players

Some of the more established web 1.0 companies will have a rough year.

I would not be surprised to see Yahoo no longer running as an independent firm by year end. My suspicion is that it will either be combined with AOL as part of a complex transaction that will spin AOL out of Time-Warner and combine with Yahoo (a combination that I suspect will leave all involved hopeful for the best at the start of the transaction and disenchanted with the result by year end) or, should the stock price drop lower, I would not be overly surprised if Rupert Murdoch were to swoop in and pick it up to combine Yahoo with other News Corp. Interactive properties (including MySpace).

eBay is another company that will have a rough year in 2009. Much attention will be paid to it as Meg Whitman, the company’s former CEO makes a gubernatorial bid in California and many will point to her leadership there as either an example of success or failure, depending on which side of the political spectrum they stand on. Meanwhile, eBay’s auction business will continue to crater and more of its revenue will come from its PayPal and Skype subsidiaries.

Amazon will survive the retail downturn and may actually emerge as a winner in the category. As more retail consolidates, Amazon’s rich data-mining abilities are making it the Wal-Mart of the online world and I expect it to see growth in the retail space as smaller players fall off by the wayside. Furthermore, its diversification, with the company also offering some of its infrastructure via web services for a low fee will pay off as more startups will move their operations to the Amazon cloud as part of some cost savings efforts.

Meanwhile, Microsoft will continue to sputter along in the online space, possibly picking up the search business from Yahoo but ultimately ending the year without any significant gains in the online space. Hopefully, by then they will have released Windows 7, which may undo some of the reputational damage the company suffered after the release of Windows Vista.

In the next entry, we’ll look at the media space and how those macro-economic changes will have an impact on that.

Tristan Louis is the founder and CEO of Keepskor and writes the influential tnl.net weblog, where this was initially posted under the title 2009 Predictions: Intro. You can follow him on twitter here or receive his weekly newsletter by subscribing here.

The potential merger has long been rumored and there are many reasons for which it could actually make a lot of sense for both companies. A question, though, remains as to who the winners and losers are in that deal. Topline, it’s clear that Microsoft and Yahoo benefit from this and clear that it doesn’t benefit Google. But who else?

Let’s look at the deal and try to figure it outs

Winners

OpenID: Only a few days ago, Yahoo announced support for OpenID, a system that allows users to use their yahoo credentials as a way to login to other services. Surprisingly, this was the goal of Microsoft Passport (now knows as Windows Live ID), almost a decade ago. A pairing between Microsoft and Yahoo could represent a major win for OpenID, especially if the partnership extends Yahoo’s commitment to Windows. One could see OpenID being incorporated with Active Directory in the future, leaving any non-openID provider in a lurch.

AT&T: Yahoo has a partnership with AT&T for IPTV. Combine that with the recent acquisition of Maven Networks, the IPTV efforts Microsoft has taken, and its relationship with MSNBC and there’s added strength provided to AT&T’s foray into the television space.

AOL: Many people would put AOL in the loser category but I think this partnership makes it a potential acquisition target for Google now, which means that Time-Warner could try to get a premium and spin-off a property they’ve had a hard time managing.

Losers

Advertising Agencies: It was only a few weeks ago that I joined GroupM. At the time, my feeling was that someone needed to build a counter-balance to Google’s power in the online space and, since any online pairing seemed unlikely, large ad buyers were the only ones that could provide that counter-balance. Now that Microsoft and Yahoo are providing that counter-balance, advertisers are going to be squeezed not by one but two giants. With two players representing more than 75 percent of all possible ad buys, the online companies will dictate terms to ad agencies and not the other way around. That window of opportunity appears to be closing for ad agencies.

However, a large enough online ad buyer could, if they standardized their platform and streamlined it to make single aggregated buys (for example, tell Google or Microsoft/Yahoo! that you will buy XX% percent of their ad inventory next quarter if they discount the rates by YY% compared to the competition) but ad agencies do not yet have enough streamlined data to be able to build risk models around such large scale purchases.

Ask.com:  Unfortunately, IAC does not have any major partnership with the larger players in the market. It’s fight to stay in the search game appears to be an uphill struggle from now on. There doesn’t seem to be that many strategic options relating to the changing dynamics of their portion of the market.

News Corp.: A combined Yahoo/Microsoft partnership would own roughly 40 percent of the overall market for finance-related online news (according to Hitwise, Yahoo finance is just shy of 30% of the market and MSN money represents a bit over 10% ). This will have an impact on the likes of MarketWatch and the Wall Street Journal online. Furthermore, the coupling of Microsoft’s desktop money client with Yahoo’s strength in the online finance news space will be hard to defeat.

Any email provider: Microsoft/Yahoo will have almost 80 percent of the webmail market (Gmail comes in second with 6 percent). This means that any company that is trying to provide this as a standalone service will have to follow whatever direction the new entity takes.

Web 2.0 companies: With one less buyer in the market, that makes it more difficult to sell at a rick premium.

I’m sure there are many others I’m missing. Feel free to comment in the discussion thread.

Tristan Louis is the founder and CEO of Keepskor and writes the influential tnl.net weblog, where this was initially posted under the title Non-obvious winners and losers in Microsoft Yahoo Deal. You can follow him on twitter here or receive his weekly newsletter by subscribing here.

June 26th of this year will mark the 10th anniversary of the ACLU vs. Reno decision in the supreme court, which struck down the communication decency act and extended first amendment protection to the Internet:

The record demonstrates that the growth of the Internet has been and continues to be phenomenal. As a matter of constitutional tradition, in the absence of evidence to the contrary, we presume that governmental regulation of the content of speech is more likely to interfere with the free exchange of ideas than to encourage it. The interest in encouraging freedom of expression in a democratic society outweighs any theoretical but unproven benefit of censorship.

It is based on that legal grounding that I believe that codes of conducts will generally result in lowering the value of internet speech. The last sentence, in particular (“he interest in encouraging freedom of expression in a democratic society outweighs any theoretical but unproven benefit of censorship”) represents what I believe to be the most outstanding statement as to why Internet speech needs to be protected. That said, let’s now go into a dissection.

We celebrate the blogosphere because it embraces frank and open conversation. But frankness does not have to mean lack of civility. We present this Blogger Code of Conduct in hopes that it helps create a culture that encourages both personal expression and constructive conversation.

I, too, believe in frank and open conversation. The establishment of rules (or codes) seems to act as a way to “close” conversation, even if it is in a way that is limited by certain boundaries and while I agree that frankness and lack of civility are not equals, a question immediately arises as to who considers what proper civil discourse? Looking back at the creation of the United States and the institution of the Federalist papers, civility has generally been seen as the enemy of openness. The discourse between the US founding fathers was far from civil (even, in the celebrated case of Hamilton vs. Burr, ending up in a disagreement on civility ending up in a duel that greatly shortened the life of one of America’s greatest genius.) So, from the opening statement, we are already faced with an interesting challenge: how do we “encourage both personal expression and constructive conversation” while at the same time trying to clamp down on disagreement through that dangerous weapon called civility?

1. We take responsibility for our own words and for the comments we allow on our blog.

I generally agree with that comment but the challenge here is that it leads to immediate censorship. If I disagree with a comment on my blog, this statement basically puts me in a position to forbid that comment as I do not want to take responsibility for it. So, at this point, I am being forced to decide that comments on my site will have to agree with my own view or I have to take responsibility for comments that I disagree with. How many bloggers will be tempted to act as censor in those cases?

We are committed to the “Civility Enforced” standard: we will not post unacceptable content, and we’ll delete comments that contain it.

Deletion works as active form of censorship and also introduces an interesting legal question. As editor of the comment section, one would then become liable for every other comment that made it through, increasing the possibility of people being prosecuted because of the comments on their sites. Without censorship, they could be seen more along the lines of common carriers and would find themselves faced with a greater chance of winning such case. By agreeing to delete, they could face a tough battle.

We define unacceptable content as anything included or linked to that:
– is being used to abuse, harass, stalk, or threaten others

Once again, let me harp on who gets to define those terms. What constitute abuse? Is saying that “I believe so and so is a dimwit for saying…” considered a type of abuse?

- is libelous, knowingly false, ad-hominem, or misrepresents another person,

Libelous is a word with a lot of legal weight to it. This opens up a whole set of legal issues around how people talk online. The appearance of falseness can be enough to trigger a lawsuit (but not enough to win) and this portion seems to also fly in the face of a lot of established law (Zeran v American Online, for example). Another question about this section is “knowingly false”: to whom? to the owner of the blog? to the writer of the comment? to the person the comment is made about? to other parties?

- infringes upon a copyright or trademark

Google, Yahoo, Microsoft, O’Reilly, AOL, etc… are all trademarks. I have not put a TM after every single one of those trademarks in posts I write on TNL.net, which technically makes me in violation of this effort, from a trademark standpoint.

For the purpose of this post, I am quoting the substantial majority of the post by tim O’Reilly, which would technically put me in violation of his copyright. However, Tim has a Creative Commons License so he’s granting me some rights. Unfortunately, the rights granted by the CC license also say that you can’t reuse the content for commercial purpose: I run adsense ads on this site, which could be considered a commercial effort so, as such, I would technically be in violation of Tim’s copyright AND CC license. Under the terms of this, quoting substantial portion of copyrighted content would be a violation of the code. This means that blogs now have a choice: write only original content without extensive quoting or don’t run ads. It’s a tough choice for many bloggers.

- violates an obligation of confidentiality

Enron, the Pentagon Papers, and Watergate are only a few high level cases in the United States that involved a violation of confidentiality. Recent such violations could include the revelations about Abu Ghraib prison and Walter Reed. None of these stories could exist without such violation. Would it be a good thing to purge them?

- violates the privacy of others

This is a higher standard than what is currently given in any other media. Public persona are not given privacy protection in traditional media. Should it be different online?

We define and determine what is “unacceptable content” on a case-by-case basis, and our definitions are not limited to this list. If we delete a comment or link, we will say so and explain why. [We reserve the right to change these standards at any time with no notice.]

Who is we here? And why a “case by case” basis? This seems very dangerous to me, especially with the express notion of those standards changing at any time with no notice.

2. We won’t say anything online that we wouldn’t say in person.

I generally agree with that but what about people using the anonymity of the Internet in order to avoid reprisal. If that standard is held, then it will do a lot to clamp down on information that could have been useful but, because it is about powerful people, can’t be disclosed without fear of reprisal.

3. We connect privately before we respond publicly.

Does that mean that every person that’s talked about it contactable? If the president of the United States makes a comment, how do I connect privately to him before responding publicly? Does my sending him a letter constitute such private communication or do I need to wait for an acknowledgment of receipt?

When we encounter conflicts and misrepresentation in the blogosphere, we make every effort to talk privately and directly to the person(s) involved–or find an intermediary who can do so–before we publish any posts or comments about the issue.

Same as above. What if the attempt is not answered? Does that make it OK? Do we need to vet every comment beforehand? Should I send this to Tim and wait for his comment before I publish it? What if he sits on it: does that quash the story altogether?

4. When we believe someone is unfairly attacking another, we take action.

What type of action? What constitutes an unfair attack?

When someone who is publishing comments or blog postings that are offensive, we’ll tell them so (privately, if possible–see above) and ask them to publicly make amends.

Once again, how do we contact them? What if they don’t respond?

If those published comments could be construed as a threat, and the perpetrator doesn’t withdraw them and apologize, we will cooperate with law enforcement to protect the target of the threat.

Isn’t that already codified by existing law? Why does a code of conduct need to codify this? It’s already a given that such thing must happen (lack of cooperation with law enforcement can carry heavy fines and imprisonment). Which law enforcement authorities should we cooperate with: all of them? Only some? For example, if the Chinese government, Syrian government, Iranian government, South Korean government or other type of government where freedom of expression is not as expressively granted as it is in the United States contacts us, should we comply? I say no, but this code appears to say yes.

5. We do not allow anonymous comments.

Going back to my examples regarding the pentagon papers, Watergate, Enron and others: those would not have existed without anonymous comments. How does this code deal with that?

We require commenters to supply a valid email address before they can post, though we allow commenters to identify themselves with an alias, rather than their real name.

What happens if they hide behind a free email service? Is that OK? If so, what is the value of this statement?

6. We ignore the trolls.

This seems to be in violation of the rest of the code as ignoring them means giving them a free pass? If we delete their comments, we’re not ignoring them.

We prefer not to respond to nasty comments about us or our blog, as long as they don’t veer into abuse or libel. We believe that feeding the trolls only encourages them–“Never wrestle with a pig. You both get dirty, but the pig likes it.” Ignoring public attacks is often the best way to contain them.

If that’s the case, why should they be deleted then? This last section seems to contradict the rest of the code…

Because of such lapses and because I believe that “the interest in encouraging freedom of expression in a democratic society outweighs any theoretical but unproven benefit of censorship,” I have to say that this code is not only a bad idea but one that should strenuously be rejected by members of the blogosphere.

Tristan Louis is the founder and CEO of Keepskor and writes the influential tnl.net weblog, where this was initially posted under the title Blogger’s Code of Conduct: a Dissection. You can follow him on twitter here or receive his weekly newsletter by subscribing here.

Mobile

Last year, I declared that video would be big in the Internet space and this year, I believe that mobile will be a major focus.

The devices

While mobile devices will continue to grow on the existing curve, adding more processing power and more memory, they will also add a number of features with are significantly different from the ones we’ve been accustomed to see on a mobile phone. Cameras will increasingly become just a tick on the feature list and location-aware devices will become more prevalent (they will sport a GPS chip).

The new features will come in 3 key areas: first, more mobile devices will be able to multi-task, allowing users to use functions on their phone while making a call at the same time. The multi-tasking will extend to wireless services too and people will be able to surf the web or use internet-based application at the same time as they are making a phone call. A key hardware change in those mobile devices will be an increase in the number of phones (and other mobile device) that not only have a GSM or CDMA chip but also sport a WiFi receiver. This will allow the devices to run across a variety of networks. I suspect (and am probably going out on a limb here as my guess is that this would be early) that some of the devices will conform to the 802.11n WiFi standard, and will use that technology as a bridge to 3G because 3G deployment in the United States will be slow.

The second big hardware innovation in mobile devices will be the presence of RFID readers and chips that will allow users to use them for person-to-person or person-to-business commerce, turning mobile devices into electronic wallets. Deployments in Near Field Communications for credit cards have already started to happen on a trial basis in cities like New York.

The third big hardware innovation in mobile devices, in my mind, will come from the fact that some devices will be DNLA certified, allowing them to exchange, photos, music and videos with other devices in your house.

The services

This year, the rise of mobile services will be powered by a sharp drop in the price of data service offerings from mobile operators, with some operators offering flat-rate all-you-can-ear services to their customers.

In the content arena, the most popular type of service will be near-CD-quality audio downloads. There may be some offerings in the streaming audio market but I suspect that those will be very limited. The second most popular content service, in the mobile space, will be mobile video, with TV and user-created content (mobile YouTube and competitors) filling that gap. Those services will be advertising supported, with revenue sharing agreement between the mobile operators and the content providers.

Map services will also enjoy some level of success. The recent introduction of Google Maps on the Treo platform can be seen as an example of that trend and location-aware device will offer richer experiences in that space, with live traffic info, weather, and maybe some advertising being part of the offerings.

However, content will not take the forefront on mobile services, which will still be dominated by communication as the primary type of application. In that space, though, regular phone service will not be the predominant form of communication. SMS and MMS will be integrated with instant messaging platforms and email, to provide a complete communication package. Expect features like the ability to send text messages to multiple parties at once to start appearing, allowing for chat-like interfaces on phones.

As a result of those changes, social networks will also start integrating mobile applications more closely this year. MySpace and other networks like it will offer integrated solutions for mobile blogging, podcasting, and vlogging, as well as integrated chat and location aware social networking services. Dating services will be another arena to go mobile with the ability to identify matches within your general area.

Wrapping up the offerings will also be limited trials in the videophone space, leveraging off new next generation 3G infrastructures. The videophone trials (and 3G in general) will still be limited offerings by the end of the year, due to the high premium charged for such services.

On the voice end, the introduction of WiFi on some mobile devices will give rise to VoIP mobile applications. If the devices sport 802.11n receivers and such infrastructure is deployed, services around that space could eclipse traditional voice traffic.

Apple

Due to the added power mobile phones now have, the iPod is threatened. Apple makes a defensive move by unveiling the Apple ecosystem, centered around use of media in general and of the Apple iTunes store in particular. With the introduction of its own offering in the mobile space (an iPod with phone functionality and not a phone with iPod functionality) and in the living room (the already pre-announced iTV components), Apple presents a strategy that allows for simple integration of all their components into a digital lifestyle offering.

In the non-media space, Apple bundles blogs and wikis with the new version of OSX and starts offering Web 2.0-like functionality on its Xserve servers, in a bid to get a spot in enterprise racks. They will also merge in social networking features in their calendaring and address book applications, allowing for a more integrated experience.

In another bid for enterprise positioning, Apple will include virtualization of other Operating Systems natively in the next version of OSX, allowing their computers to run Windows and OSX applications side by side under OSX. The feature will take some of the existing Apple bootcamp attributes and turns them into an equivalent of Parallels.

In a surprise move, Apple will also announce that it has signed a partnership with Google, which will offer the Google Apps for your domain as a replacement for the .mac service offered by Apple. The service will now be available either as a free ad-supported service, or on the same premium service offering as before without ads.

On the hardware end, Apple will endorse 802.11n as their standard for media distribution, equipping all new computers and the iTV device with receiver cards so it can leverage off the higher speeds offered by that standard. Because of its long-standing relationship with Sony, the company will also decide to side with BlueRay as their standard for next-generation disks, equipping their new laptops with drives following that standard.

Microsoft

Microsoft’s oft-delayed Windows Vista will finally be released but adoption of the new operating system will be lackluster as few of today’s computers can support it. The same will be true of the release of Microsoft Office 2007, as most users feel perfectly OK with the version of those products they have running on their desktops.

With the major release of updates to the Windows and Office platforms behind it, the company will focus efforts in other areas. In the console market, Xbox 360 will become the dominant game platform, due to slow adoption of the PS3 platform. Microsoft will innovate heavily on that platform, leveraging its positioning in the living room to offer more movies, more TV shows and other types of services around it. Meanwhile, the company will also work on a major revision of their Zune offering, offering a new version of the iPod competitors that will be better received than its predecessor. However, Zune 2.0 will not make a major dent into the iPod market. On the web end, Microsoft will consider the acquisition of either Yahoo! or AOL as a way to shore up its MSN offering and adopt a more aggressive stance in its fight for online advertising revenue.

Virtual Currencies

There will be more talk about the digitization of money this year. Microsoft will use its Microsoft points as a new form of currency that can be used not only on the Zune marketplace and the Xbox live marketplace but also as a way to pay for goods and services online with approved merchants. This will be followed by support for a payment solution (like Google Payment or Paypal) in a stake to get a stronger foothold in that space.

Google will continue pushing its Google Payment engine, moving it to an international base before year end. Meanwhile Paypal will continue expanding its lead in the space and will start offering virtual credit card numbers that will be usable on any system and tie back to Paypal on the back-end.

But the big stories in the virtual currency space will be around the rise of virtual worlds like SecondLife and others, which will see their own virtual currencies rise against the dollar. Their will be discussion about the power those virtual worlds operators have over money flows and calls for regulations of those currencies (and possible taxation of revenue made in those virtual worlds) in several countries around the world.

Virtual Worlds

Speaking of virtual worlds, there will be a continuing explosion in the growth of this phenomenon. By year end, SecondLife alone will have over 15 millions residents, but will be experience growth pains. At least one other major virtual world operators will appear in the space but most corporations will rush to SecondLife.

The initial hype that started appearing in the mainstream press about SecondLife will give way to a number of negative stories, probably talking about some of the darker aspects of the virtual world phenomenons, including gold farming, the sex trade, and gambling. Some politician will use the negative press as a way to grab headline by calling for a government inquiry in the dealings of virtual worlds operators.

While I declared 2007 the year of mobile, virtual worlds will come of close second in terms of highlights for the year. I suspect that LindenLab will surprise people by announcing that it will open up its platform and present the underlying components as a new standard for the web. The company will then start offering their grid software as a standalone application that corporations can install on their own servers if they want more control. LindenLab will also allow companies to use customized version of their thick client that could be branded with company destinations and other goodies.

Due to LindenLab’s strength in the space, many companies will consider acquiring it but many will be turned off by all the negative press and potential for government involvement.

Media

Mainstream media will continue trying to co-opt successful bloggers and will also turn its attention to successful podcasters and vloggers. New stars will emerge online, develop followings there and make the jump to mainstream media, while the reverse path will be taken by mainstream reporters and actors, who will increasingly start vlogging and podcasting (they’re already blogging).

Pressured by lower viewership in their traditional timeslots, TV stations will start posting more content online, with at least one TV station offering all its primetime slate online in and advertising supported fashion. Smaller video distributors, in the meantime, will start investigating using bittorrent for distribution of their content. Some old TV show will see its archive fully posted online and will start receiving a new stream of revenue as a result of that online appearance.

Meanwhile, ad revenue will continue to shift to web, and media will reluctantly follow. By year end, most newspapers will have combined their print and online newsrooms, and many will be cutting back on print to focus more on their online presence. As part of this shift to online, we will also see increased reliance on user generated content, with some newspapers offering blogs to their readers and encouraging active participation in making the news.

However, most of those efforts will not generate the expected returns as Google gobbles up increasing share of overall internet ad revenue, and starts expanding to audio and video. Discussion in the traditional media will start shifting to whether Google is too powerful for everyone’s good.

Death of the website/webpage

Another important shift in the media space will be the death of the concept of traditional website or web page as a result of increasing consumption of content via RSS or through distribution of widgets that can be embedded in other people’s sites. People will move away from the term web site and start talking about web properties. Because content will not necessarily be consumed in the creator’s site, there will be discussions of a new for new advertising/revenue models for such content and a need for new metrics to identify reach and audience. This will present a new opportunity for companies in the web analytics space.

As the web page is no longer seen as the best way to measure the success of a web property, the CPM will be on its last gasp as a model for selling online advertising, replaced largely by cost per click (CPC) and increasingly by cost per action (CPA) as the way to sell ads online.

Web 2.0

There will be increasing verticalisation in the web 2.0 space, with social networks, search, and web service offerings becoming more focused this year. However, this will also mean that many companies that were only single features will not be able to adapt and will die. Others will continue to be acquired for sums in the under $100 million category and few, if any, will go public.

Tagging will become more and more implicit, with less and less users actually doing the tagging and more and more tags being generated algorithmically. More applications will start looking at people’s behavior and creating the appropriate tags or making the appropriate modifications in the background.

But it’s not all doom and gloom for web 2.0 as Enterprise 2.0 becomes a reality. Use of blogs, wikis and VoIP behind the firewall commonplace at most large corporations and other technologies introduced as part of web 2.0 (AJAX, podcasting, etc…) will become more common in Global 100 corporations.

And speaking of the enterprise space, enterprise search will be huge, with Fast and/or Autonomy being acquired by Oracle, HP, or Microsoft. More focused will be paid on creating strong search solutions for the unstructured data on intranets and IBM will be a major player in the space.

Conclusion

At year end, many of those predictions will be wrong but a few will be correct. In the meantime, I’ll try to keep everyone up to date and hopefully will keep providing great content throughout the rest of the year.

I think 2007 will be another banner year and believe that we are looking at another existing set of new developments. Feel free to comment below and tell me what you think I may have missed (or point me to other prognostications, as I haven’t had time to get to my aggregator since Christmas).

Tristan Louis is the founder and CEO of Keepskor and writes the influential tnl.net weblog, where this was initially posted under the title 2007 Predictions. You can follow him on twitter here or receive his weekly newsletter by subscribing here.

Broadband Penetration

It wasn’t much going out on a limb to estimate that broadband penetration would increase. However, the implications are generally harder to extricate. The rise of VoIP has been realized, with my predictions about large-scale operators adopting VoIP as their own only partially realized. All the major operators do have a specific VoIP offering but few are using it as a total replacement of their backend so I guess I was overly optimistic in my assessment.

In terms of other implications of broadband, though, my predictions about video where correct: Apple did announce (or is that pre-announce) a living room strategy with the iTV (new name to be announced at MacWorld). My assumption that they would not market it as a computer are correct and that direct access to the media store and emphasis on HDTV seem to be correct. Also in video, Google did offer a pay per view system (on Google video) but not in partnership with AOL… and my assumption of this generating good buzz for AOL, allowing it to do an IPO, was way off base.

TV stations increasing their online position with advertising supported media was also correct. I was, however, early in my predictions about ad insertion mechanisms being better targeted than traditional advertising. Currently, online video advertising is still about equivalent to TV advertising (minus the large audience size) so better targeting is something that will probably come in the future.

YouTube could easily be considered a new type of video aggregator, and its acquisition by Google fits into my thinking about major portals acquiring those new aggregators. I was also (I must admit my own surprise here) partially correct in predicting that Tivo would open up and start positioning itself as a new aggregator for content online and offline. I was dead wrong, however, on it being acquired, as I was about Yahoo! acquiring NetFlix.

TV stations going fully online was also overly optimistic. While a few efforts, like TrioTV, were launched as a way to keep flagging brands alive, no small station went completely online in 2006. What happened, however, was that large stations put popular shows online, rankling some of their affiliates in the process. The idea of putting local news online is what I would consider one of the big missed opportunities for traditional media. It’s content that could be repositioned online easily and could be sold on a network basis in terms of advertising so I’m surprised that it hasn’t been done yet. Maybe in 2007.

My predictions about the trajectory of vidcasting seemed to be pretty dead on. Amanda Congdon signing up with ABC can be seen as the beginning of a trend, in terms of vidcaster moving to traditional media. Traditional media are still seeing this phenomenon as small and largely to be ignored but the rise of citizen journalists has gotten them to pay a little more notice (reference Senator Allen and the Macaca incident and you start understanding the power of citizen powered video).

On the infrastructure end, my predictions about outcries relating to the security of the network were wrong but incumbent line operators asking for more control was not: the fight over Net Neutrality is the battleground pitting operators who want to close up the net vs. people who believe that the Internet has been successful because of that openness. I sit in the latter camp and I think this fight will continue through 2007 and probably beyond.

Growth and Scalability

My predictions about 2.0 sites being unable to cope with explosive growth proved wrong. Looks like there are a lot of people out there who are doing great work making sure that those sites stay up and kudos to them for that.

My fears about mainstream media hedging out the traditional blogs also appeared wrong. Traditional media did attempt to co-opt blogging but, apart from a few exceptions (Business Week comes to mind), few have achieved any major traction in the space. It appears that established bloggers are now the new gatekeepers of the blogosphere and traditional media will not be able to displace them (I suspect that the next move by traditional media organizations will be to co-opt those bloggers now).

Radio stations did offer more shows via podcast, which is a very welcomed improvement I had predicted. However, very few TV stations are offering shows via vidcast. Hosting services offering a share of advertising revenue did start to appear but few podcasters signed on, as it turns out that my predictions about escalating bandwidth cost constraining podcasters were wrong.

On the crash and burn side, few companies actually did so little talk of bubble burst 2.0 have happened. Stories about Google hubris have started appearing and as I write this, Google has lost 10 percent from its highest price this year (the stock is trading at US$461 while its high was US$513) so I guess I got this one right too.

My bets on consolidation were wrong and LinkedIn was not acquired. Oh, and tagging as a market hasn’t really been decimated. Instead, it appears that Yahoo! loves the concept and has gone out to buy most of the players in the space.

My prediction of a massive Google backlash also proved incorrect. While rumblings are starting to happen among tech luminaries, those have had little effect on how business operates and interacts with Google, and thus has had little effect on Google itself so far.

While new companies emerged in the analytics space, none of them really provided anything revolutionary I can think of so my guess on this space being a great new area of activity was wrong. However, I think it’s a space that does need more work.

Trust did not become as hot a topic as I thought it would. While there were a few discussions around trust-related issues in the blogosphere (the most recent examples to come to mind are the payperpost debacle and the recent Microsoft laptop delivery discussion), trust itself did not become a major topic. My prediction about anonymous editing of Wikipedia was partially correct, though, as Wikipedia is working on a tighter policy and better controls. My predictions regarding a major hack of Wikipedia were wrong (thankfully) but I’m glad that they are taking the appropriate steps to deal with minor problems before they became major.

Conclusion

I have to say I’m pleasantly surprised with how accurate a number of my predictions were. This year was a pretty amazing one and my success rate on this effort makes it that much harder in terms of predicting 2007 as I now have to keep up with a good rate of success. We’ll see next year when I review the 2007 predictions I should be making soon.

Tristan Louis is the founder and CEO of Keepskor and writes the influential tnl.net weblog, where this was initially posted under the title 2006 Predictions — The Review. You can follow him on twitter here or receive his weekly newsletter by subscribing here.

1. Access (aka Subscriptions)
2. Hosting (aka Real Estate)
3. Platform (aka Client/Server)
4. Collaboration
5. Event Planning
6. Education
7. Building/Designing
8. Professional Services
9. Integration
10. Trade platforms

I will now go an and elaborate on each of those points. They are divided into three broad categories: opportunities for virtual world vendors, for users, and what I would call secondary markets.

Opportunities For Virtual World Vendors

I would generally group the opportunities for virtual world vendors into three broad category: access, hosting, and tools.

Access (aka subscriptions)

At the current time, this is the opportunity that most of the existing players have been mining the most. The basic model is simple: sell monthly or hourly subscription services to users. This is really no different than the business that AOL, Compuserve, and early ISPs were into, charging a fee to access an environment. Much like those early players in the Internet space were providing easy to use tools to access the net, the subscription model is charging an entry fee into a virtual world. This is the predominant source of revenue for virtual worlds but, as trade is becoming more common, some of the virtual worlds are starting to drop the subscription requirement. For example, There.com and SecondLife now offer free accounts, which come with a more limited set of capabilities.

Hosting (aka Real Estate)

Some worlds have also started going into the hosting business, allowing users to essentially buy a portion of a server, through real-estate transactions. SecondLife is the world with the most developed type of economics around that model, charging a Land Use Fee, which can be equated to a hosting plan charge on the web. The model is based on access to a shared server, scaling up all the way to having a dedicated server (or sim, as they call it.)

Platform (aka Client/Server)

I would argue that the model for virtual world is basically similar to the model of web-browser and web-server or application server. I would not be surprised to see a virtual world provider unbundling the service from their own server and starting to provide corporations or other entities with the ability to customize their own client and host their own server. In this model, the virtual world provider would essentially repeat the strategy initially take by Netscape in the early 90s, selling both client and servers.

As the space grows, I also foresee some need for consolidation relating to this space, in order to ensure that the underlying code becomes the industry standard. Because of how close their approach is in looking at that space, I’d foresee SecondLife and There.com to be the first to entertain such thoughts. SecondLife already provides a rich syntactic language for programming purpose. There.com provides tools for creating virtual goods. Both of them could benefit from such a merger and their combined effort could become the dominant provider in the space.

Opportunities for users

There also exists a number of opportunities for denizens of virtual worlds. Most of those opportunities seem to center around the fact that there are places for people to meet and interact in an environment that is much richer than other electronic collaboration platforms.

Collaboration

As such, the initial opportunity for individuals and companies in virtual worlds is around the area of collaboration. Business Week recently reported that Rivers Run Red saved $175,000 last year by holding meetings in SecondLife. This is no small amount of money for a small business and, in this age of increasing security checklines at airports adding to the length of travel, virtual worlds may be the best collaboration platform yet. At the current time, no company has focused on that angle but there is an opportunity for a company that would focus virtual worlds away from the gaming aspect and start offering a corporate virtual world where companies could hold virtual offices.

Event Planning

Increasingly music stars are moving in that space. Suzanne Vega and Duran Duran recently made announcements relating to their entry in the space. The BBC, MTV, and Fox have already held events in virtual spaces. Technical conferences have had virtual world components. Major League Baseball has dipped its toe in the field. Organizing events, preparing the space, publicizing, booking and training speakers are all jobs that require some level of expertise and there are dollars associated with providing that expertise.

Education

Educational organization, from Harvard to the New Media Campus, have created virtual training grounds to explore development in those spaces. There are also opportunities around teaching classes in building virtual assets. In SecondLife, on most night, you can find people teaching how to create and program the basic building blocks available in the space. One can envision people getting paid for this type of work further down the line.

Professional Services

SecondLife has created an eco-system where professional journalists, DJs, ad agencies, and other types of services (some of the more risque ones involving the sex trade) are interacting on a daily basis. Once again, economies are being created around this space, mirroring traditional world equivalents in the virtual realm.

Building/Designing

Another interesting area, in terms of opportunities is in the realm of creating new digital goods and selling them in the virtual space. There are already a number of people (claims of 3,000 entrepreneurs each making at least $20,000 a year in SecondLife have been widespread) who are making a living at this. Most goods from the real world can have a digital equivalent and companies like American Apparel have noticed the space, offering virtual equivalent of their goods, having sub-contracted the development of those goods to a third party.

Secondary Markets creating new opportunities

Another set of opportunities exist outside of the virtual worlds themselves, which should prove that the space is developing but here to stay.

Integration

Virtual Worlds are generally closed spaces. Some, like SecondLife, have started opening up to the wider net. For example, users can now visit Amazon.com in SecondLife, thanks to the Amazon API and SecondLife’s ability to call on it from inside its virtual world. Those opportunities represent a new space and integration houses with expertise in both the virtual world and the wider web will be well positioned to take advantage of those opportunities. If my belief that a next generation browser will arise out of the virtual world space is correct, those integration houses could be well positioned to be the next big powerhouses in online marketing.

Trade platforms

Another portion of the secondary market is surrounding the thin link between the trade that happens in those virtual worlds and real dollars. Companies or individuals who manage to create a platform that offers a way to trade from one of the virtual worlds into another might find themselves as the new middle-men in a space that is bound to grow economically and profit from making a small percentage on every inter-virtual world transaction.

Tristan Louis is the founder and CEO of Keepskor and writes the influential tnl.net weblog, where this was initially posted under the title Top 10 Opportunities in Virtual Worlds. You can follow him on twitter here or receive his weekly newsletter by subscribing here.

Core Components

One of my favorite quotes about the future comes from William Gibson: “The future is here, it’s just not evenly distributed yet.” Based on this, it is relatively easy to make future predictions by looking at some of the core things that are happening today.

Some of the trends I’m starting to look at in terms of defining how the next generation will work include

• The rise of always-on high-speed internet connections
• The IPzation of everything
• The drop in the price of real-world sensors
• The rise of participatory applications

Looking at each of the components individually, it is hard to form a picture of where the world is going. However, looking at them together and how they interact, a picture starts to form.

A seismic generational shift

We are now starting to reach the tipping point in what will be a major generational shift. Over the next few years, people who were born in the Internet era (ie. after the Internet became commonplace) will start entering the workforce. In a way, my generation (I’m 35) was too old to be part of this shift. Younger people, however, are used to a word where IM, email, SMS, and always-on communication is an inalienable right.

I believe this will force companies to start dropping restrictions on such uses of the network. Already, we are seeing more corporations adopt Instant Messaging (IM) as an approved form of communication (primarily for corporations with widely distributed workforce) to tag along with email, which has now become a de-facto in business. IM has changed some of the factors inherent to communication in the past: traditionally, communication between members of a distributed workforce was slow and relatively inefficient (yes, even Email had some inefficiencies in terms of productivity.) As things like IM, video IM, and shared applications over IM, take hold, workers can now have meetings with faraway places in the same fashion as they used to with their co-workers in a similar physical setting.

As those physical boundaries start to drop, what’s happening is also a rethinking of how teams are organized (with a growing emphasis on distributed virtual teams) and where people have to be to work (it doesn’t matter as much any more). Some smaller start-ups even forego the idea of having much of a physical location (for example, WeblogInc, which my friend Jason Calacanis sold to AOL last year, had no physical office prior to the sale).

RSS, while still nascent, is also starting to take hold in companies. As it becomes more and more of the way data is exchanged, RSS will start replacing other methods of giving updates. With the pervasiness of RSS as a delivery envelope (and, since it supports enclosures, RSS can deliver any type of data), the way sites are authored in the future will be not through a centralized approach (as is the current model, with a web server being connected in a one to one relationship with a data storage piece like a database) but through a decentralized model where specialized sites will offer narrowly focused types of services that will then be aggregated on a page. The early indications of this shift can be seen in the “mashups” of sites like Google Map and craigslist, for example and I believe the next generation of people entering the workforce will demand such freedom to recombine systems in the future. Along with the recombination of applications, they will also demand that such flexibility exist in the way they work and we will see the rise of a more modular and flexible workforce, with virtual teams replacing the more rigid structures that currently exist in corporations.

This is the first article in a 6 part series. You can read the following parts here:

• Part 1: Intro
• Part 2: Always on
• Part 3: IPzation
• Part 4: Sensors
• Part 5: Participatory Applications
• Part 6: Conclusion

Tristan Louis is the founder and CEO of Keepskor and writes the influential tnl.net weblog, where this was initially posted under the title Future Tense — Intro. You can follow him on twitter here or receive his weekly newsletter by subscribing here.

Before I go any further in this, I want to have a huge disclaimer: I’m a pretty big fan of some Google products. One can see Google ads running on this site (I’m an AdSense user) and a portion of my traffic gets here thanks to Google’s search engine. i’m also a big user of the search engine, I have a Gmail account (although it is not my primary email system) and I use Google Maps and Google News often. I’ve played with the search API in the past and, for the most part, I’ve been happy with my overall Google experience. However, I worry that the company is heading in the wrong direction and I want to ensure they remain a viable player as they have re-ignited investments in the search space, which has benefited all users on the Internet. However, I fear that, if they are not careful, they could suffer a fate similar to that of Netscape, which popularized web browsing and ended up being gobbled up by AOL, where it is now a shadow of its former self.

That said, let’s look at some of the disturbing similarities.

Market Shares are no guarantee

In the early days of the commercial Internet (let’s say 1996), Netscape was a very successful company. It had beaten every Wall Street expectation and completed a stock offering that had captured the imagination of the general public. The Netscape management graced the covers of most magazines in America and the little browser that could (then in version 2.0) had captured an impressive 75+ percent of the market. Netscape had also introduced its own line of web servers, with a proprietary language called LiveWire, which allowed to create more dynamic applications. The company was also offering a web page development tool, and struck partnerships with many companies to integrate their audio and video components with the browser.

Microsoft had come out with Windows 95, which included a browser (Internet Explorer) which they had licensed from an outside source (NCSA, the place where Marc Andreesen had worked prior to Netscape and the browser was Mosaic, an early web browser Marc had been involved with). The world had mostly laughed at the pitiful version 1.0 offering from Redmond. It was simply a bad product, which did not get much redemption with version 2.0.

Microsoft on the Offensive

The folks at Netscape were feeling pretty smug. After all, they dominated the browser market, had managed to get a way to sell server products and comments about the upcoming irrelevance of Microsoft started making the rounds. But the giant was awake and the clouds over Redmond only covered a flurry of activity. By the time IE 3.0 was released, most people had written Microsoft off. If they couldn’t get as simple a piece of code as a browser to catch up, how could they have a chance to survive.

Netscape had come out with version 3.0 and it was good, if a little bloated from the everything but the kitchen sink approach they were taking. Netscape was now offering an Internet suite that included a browser, a mail client, a newsreader client, an IRC client, some groupware capabilities, etc, etc… There was no way Microsoft could catch up.

Netscape Navigator 4 came out and it was good. It was running Java applets, it could do DHTML, etc.. Basically people liked it and didn’t see a reason to switch…

But Microsoft released IE 4.0 and it was better than people expected. it matched the Netscape browser feature for feature and threw in a few things. One of the people in charge of that development was a guy by the name of Yusuf Medhi, who now happens to be the head of MSN.

While Microsoft had fired a major shot with that new browser, everyone expected that all that would change again when Netscape 5 would come out.

Netscape 5 never came out. In fact, Microsoft release IE 5.0 and started gaining market shares (stealing them from Netscape). Netscape seemed to be trapped in its own legacy and had problem getting a new product out. Microsoft release IE 5.5 and Netscape was working on a new rewrite of their product.

Finally, Netscape 6 came out, conveniently skipping a version. Was it the answer to Microsoft that all had hoped? Not quite and by that point it was too late.

Netscape never recovered and now lives as a shadow of its former self. Microsoft put out a 6.0 version of their browser, cleaning up some of the last parts of the markets they wanted and then went to sleep, in terms of browser, until the recent competitive threat of Firefox reared its head, eating up some of their hard earned market shares.

So what went wrong? The answer is complex but I believe that a mix of Hubris (we can beat Microsoft, we have a huge market share) combined with some sloppy releases, the development of a bit of a monoculture (we set the agenda, the industry will follow), an unwillingness to deal with massive competitive threats, a loss of focus on core assets, and a media world that loves to take down the companies they’ve built up all added up.

How does this apply to Google?

For starters, it is clear that massive market shares are no guarantee of success. Google currently holds around 60 percent of the search market, which is good but is also a reason for concern as it is more likely that this share will go down than it is that it will go up.

More worrisome, however, is the development of the Google monoculture. Much of what is going on at Google is happening with little involvement and input from the community. This is where Microsoft generally starts striking. Say what you want about the Redmond giant, they know how to listen and how to take brutal feedback and turn it into decent product. Microsoft is not known for great products but it is known for decent ones. Last week, Microsoft organized Search Champs, gathering a bunch of smart people from the industry in a room and having them talk to them. I was there and was surprised by how focused they are on winning this one. It is the kind of focus I have not seen come from them since the browser wars.

If it wants to survive, Google needs to do something similar. Throwing a product out to the world with the world beta on it is not a feedback loop. Sitting down with users, developers, thought leaders is. The feedback is not always good but it helps improve the product, which is how one wins this war. Furthermore, the goodwill generated by getting people invested in its products and their success allows a company to develop a strong following from a small group of dedicated users, who then serves as advocates in the marketplace. They can have an impact in changing opinion and not involving them can be dangerous.

Of those people, developers tend to be the more finicky. Alas, the success of many platforms on the Internet depends on developers. As developers go, so tend the marketplace because developers tend to be early adopters. Developers were the first people to switch from Yahoo to Altavista. They were the first group to switch from Altavista to Google. Where will they go next? Is it guaranteed that they will stay with Google (however, here is an interesting case, as developers tend to have a bias against Microsoft. The corollary of this is that Microsoft has to offer something that is radically better in order to make gains in the developer world). A good way for Google to mend some of the rift with the development community would be to support RSS along with ATOM as a syndication format. At the current time, Google is the only major search engine without native RSS support.

Another area to watch out for is the loss of focus. Could someone at Google please explain to me how the Google pack, Google WiFi, Google IM or the Google web accelerator fit Google’s mission (to organize the world’s information). How does owning a radio advertising business (something they acquired recently) fit in that model? It seems that Google is trying to do a lot of things in a lot of areas. I’m sure they’re all interesting things but what does that do to the core search assets on which the business was build (or is it that search is just a side business and Google’s mission is really about advertising?) There has been much discussion in the search world about the relevancy of results in the Google search engine suffering from some level of degradation. As always, expectations are high and any decrease (or lack of improvement) in the quality of the search index will be seen as a loss of focus.

Following the Netscape sloppy release, Google also has to worry about better testing before putting products out. Its recent stumbles with the release of Google NewsReader and Google Analytics showed the world products that were not fully ready for market release. The market acceptance for the word beta goes only so far and Google may suffer some reputational damage if it continues along a curve or release first and fix it later (this, however, is not necessarily a standalone cause for failure, as we’ve learned from the release of many Microsoft products that needed their own round of stabilization)

Last but not least is the burning glare of the media world and of Wall Street. As can be seen now that lofty (and, one could add, unrealistic) expectations could not be met, punishment (in the form of a declining stock price) is coming. Similarly, the press is getting more critical. This is part of a normal cycle: a company is hyped up and then taken down. These are just fads (ask your friends at Yahoo!, who have managed to go through the whole cycle and are starting to go back through a build-up phase now).

And, as a postcript, take the advice of pundits like myself with a grain of salt. There are lessons to be learned but I can’t guarantee that these are the right ones to learn. However, what is certain is that Google needs to remain a viable player in search if for no other reason than to keep companies like Microsoft honest. As we’ve seen in the browser wars, once a company wins, it tends to slow down on the innovation front and search is still so young a field that it needs major progress on the innovation front.

Tristan Louis is the founder and CEO of Keepskor and writes the influential tnl.net weblog, where this was initially posted under the title Googling Netscape. You can follow him on twitter here or receive his weekly newsletter by subscribing here.

Software

The first thing I’m taking a look into is what are the software packages each offers:

So it looks like we will be dealing with three different types of digital right management systems, making it difficult to actually have content play on every single device. If only Apple, Microsoft, and possibly Google, could sit down and agree on a standard way to handle this, it would make everyone’s life easier. However, because they all want to lock-in users, we will see an increasing amount of incompatibilities pop up. This becomes more visible in the portable space, which I’m highlighting below:

If my analysis is correct, Apple is using its dominance in the iPod space to try to gain power in the living room; Microsoft is using its dominance in the living room to try to get traction in the non-PC world (and gets an early edge as it will play on the Sony Playstation Portable and works on the Treo 700w); Yahoo! is hoping that an alliance with Nokia, which has a strong position in the mobile phone business, will help it in that space. This makes for a future battle in the portable video space with Microsoft getting an early hedge.

What content and how much?

But all the discussion so far has been one of technology. The real question is what content is available and how much it will cost. Let’s look at what they will offer:

Apple has done a good job in capitalizing off its early lead in the space to get music related content and some TV content. However, it is weak in the news, weather and sports arena, which could be an issue (I’ve actually heard from people at several large content providers of those types that they fear the power that Apple has in that space and, as a result, are wondering whether they should offer content to Apple at all because they are afraid to be led down a path where Apple would be in the lead, with them getting little input into price and strategy).

Also of note here is the fact that none of the portal is yet offering movie download. I expect Apple to be the first out the door with such an offering. Google and Yahoo! may also enter that space but Microsoft will not (as some of its partners like MovieLink, CinemaNow and Starz, are already offering such things) and AOL may only offer Time-Warner content (other studios will probably not want to offer their content through a competitor). Yahoo! will probably hedge out Google in that area too, largely due to the fact that its management has deep ties into Hollywood.

Last but not least is the amount of user-content. Google and Yahoo! are playing with the long tail, hoping that user-generated content will help them fill some of the pipeline. This will be an interesting test as to how compelling that content can be and there may be some tricky issues relating to copyright but it seems to be a risk those two players are willing to take.

The next question is how much this will cost:

In this space, it is interesting to see two different business model collide: on one side, you have companies that are looking to offer advertising supported content to the masses and charge a premium for some of the content. The charging model on the premium content is also divergent from player to player: Apple is looking at a fixed per unit price, while AOL and Microsoft are looking at an all you can eat price for a larger fee. Although Yahoo! has not announced much in this space, they look primarily to the advertising supported model as the way to go. Google, on the other hand, is going to try to create a marketplace based on variable rates, and will probably use something similar to an AdWord for Video type of program to subsidize their own free content.

Update:

I’m making a few changes to the tables (primarily in the Google columns) based on the latest information I’ve received.

Tristan Louis is the founder and CEO of Keepskor and writes the influential tnl.net weblog, where this was initially posted under the title Portals and Video — An Overview. You can follow him on twitter here or receive his weekly newsletter by subscribing here.

Broadband penetration

Broadband penetration will continue to increase in the United States and Europe. Large scale deployments of city-wide broadband efforts in several large cities will start making internet access similar to phone or electric service, widespread and the type of thing few people think of. On the bleeding edge of the Internet access development world, some large scale networks, most probably coming from phone companies, will break the 10-Mbps barrier and close in on the 100-Mbps speed, making internet access on par with regular local network access.

The downside of this widespread deployment of high-speed internet access will be in the phone industry, where next generation (3G) rollouts of high speed wireless networks will prove costly and offer lackluster service considering its high price. This will force a drastic reduction in prices towards the end of the year or early 2007, in an attempt to recover some revenue from the large investments.

Implications of increased broadband penetration

The increase in broadband penetration will have several large implications, including the rollout of more voice over IP services, video services, and the infrastructure security.

Voice Over IP

Voice over IP will continue to see widespread deployment and large phone companies will start migrating their full networks to IP-based traffic. This will make VoIP the primary form of telephone communication for wired lines by the end of 2006, though few people will be aware of the change as it will largely happen behind the scenes, not touching people’s independent system.

Telephony services will increase as the VoIP phenomenon continues to increase. Expect early efforts in video telephony to start rolling out and becoming more mainstream towards the end of the year. Also expect to see the rise of wireless devices that can bridge the gap between computer and regular telephony, providing access to the network in a number of different ways.

Video

Video over IP will be very hot in 2006, with several major changes in the industry. First will be the announcement, by Apple, of its new mac-mini intel-powered platform designed specifically for the living room. Following on the success of the iPod, Apple will market the device less as a computer and more as a video consumption tool that will include stunning high definition resolution and will offer direct access to the iMedia store (formerly known as the iTunes music store) where one will be able to download movies and TV shows, as well as content created by amateurs.

Google, in partnership with AOL (and its sister companies within the Time-Warner world), will offer a pay-per-view system, mirroring some of the iMedia store offerings. The system will be available both in the AOL closed garden client (where it will use some level of acceleration to speed up delivery) and on the web through a new client package offered by Google and largely developed by the AOL client software team. The strength of the move will generate enough positive buzz for AOL that Time-Warner will be able to spin-off the unit and will be considering an IPO towards the beginning of 2007.

Seeing their advertising revenues eroding, TV stations will start offering more content online, also sponsored by advertising. New types of online video ad insertion and tracking system will be created by several companies, with Google, Microsoft, and Yahoo! offering aggregated model based on something similar to Google AdWords but offering not only targeting based on keywords but also based on certain demographic information.

New video aggregators will start appearing, offering a way to customize your own TV station. Some will be acquired by the major portals (unless the portals themselves have already developed that capability by the time this trend manifests itself). Meanwhile, Tivo will recast itself as one of those portals and will be acquired by Microsoft and merged with MSNTV (unless it is acquired by Sony, and merged with the PlayStation 3, or Panasonic, and kept as a standalone.)

Having lost in the bidding war for Tivo, Yahoo! will decide to acquire NetFlix and merge it with some of its video offerings, providing not only distribution of DVDs but also online streaming of content.

On the strength of revenues from online ads, some small cable or local TV stations will start offering their complete programming slate online, for free, and adverting supported. This will rankle a few of the cable companies and syndicators who looked to those companies as another revenue stream. Meanwhile, on the same basis, most local TV news will be available online for free through an advertising supported model. During one major story, a local TV station’s feed will compete with the national networks in terms of reporting, as more viewers flood its website than watch the same story unfold on television.

The competition for those types of stories will continue to increase, as citizen journalism provides raw unscripted video of events. Videocasting, following on the success of podcasting, will start seeing some traction with a few podcasting and vidcasters signing deals with traditional media. Traditional media will look at it as an interesting set of development but one that ultimately won’t be trusted by the public because they do not have the right seal of approval; their prediction will turn out to be wrong.

Infrastructure

The rise of broadband and the increasing numbers of basic services running on the internet infrastructure will give rise to fear that the infrastructure is under-protected. From a technical policy viewpoint, electronic infrastructures will become a major national security matter with fears that the very openness of the internet could represent a large security risk. This will be seized upon by the network providers (phone companies, cable companies) and some security consultants as a way to push for policy that will allow those incumbent communications services to administer their networks with tighter control, with decision as to what they are willing to let run on the network and what they are not willing to. A subsequent battle will ensue as VoIP companies and media companies will complain about the network providers squeezing them out. No decision on any of this will be made in 2006 but the debate will continue through 2007 and beyond.

Growth and Scalability

2006 will be an explosive year in the Web 2.0 sphere. Explosive because it will see triple if not quadruple digit growth in number of users but also explosive because it will see several popular sites unable to deal with the capacity issues relating to that explosion.

On the RSS end, the explosion in growth will really start when Internet Explorer 7.0 becomes a priority upgrade on windows stations. The inclusion of some RSS feeds as defaults in the browser will prove to be too much for some sites which had not expected the onslaught of millions of new hits. Readership from RSS readers will increase as more users realize that they can get their favorite sites delivered to them instead of going out and checking to see if they are updated.

As more people discover RSS, more of them will start valuing blogs and many will start their own. However, the concept of becoming a professional blogger will decrease as many people who thought they could make money off their blog will find that the effort in doing so was higher than they had expected and will abandon their blog.

Meanwhile, other web 2.0 subjects will fail: Tagging services like del.icio.us will be see as too complicated by the general public (although they will continue to thrive in the more geeky world) but tagging of pictures (as in Flickr) will continue to grow. Most blog networks will fail to attain the amount of traffic required to play seriously in the advertising world and will be forced to either merge or shut down. Meanwhile, companies offering only a set of web services with the idea to generate revenue solely from advertising may find themselves in a bind as advertising revenue will fail to grow at the same pace as the new offerings.

Implications of Growth

The explosive growth in traffic see during 2006 has implications across a number of players in the blogging world and metadata space. It also has implications in terms of scalability, business, and trust.

Blogging, podcasting, vidcasting

As blogging takes better hold in the mainstream (your parents WILL be blogging), the number of subscribers per individual blog feed will drop into the low teens, with blogs being read by close family members and friends only. A few breakout blogs, specializing on particular narrow subjects will manage to increase their readership but the world will largely consolidate around less than 1,000 major blogs: of those, the vast majority will not be from any members of the Technorati 100 or any other such list. The vast majority of those mainstream blogs will be the ones created by mainstream media outlets, which will use their existing reach to heavily promote their own blog.

Radio stations will increasingly start offering podcasts and TV stations will offering vidcasts. Most, however, will do so through centralized hosting capabilities provided by their parent companies. Smaller podcasters and vidcasters will have a hard time to compete with those larger companies as they are forced to look into ways to support their own bandwidth costs and will sign contracts with hosting services promising a share of advertising revenue in exchange for doing the hosting: that share will largely go to the hosting service with many podcasters/vidcasters finding they are not really making more than a few 100 dollars a months from all their hard work.

Crash and Burn

One of the hosting services will crash in a major way, taking with it a few days worth of the hard work of thousands of people who were hosting on it. The provider will initially recover but suffer a subsequent crash that will seal its fate as a doomed company. The majority of its users will leave and join one of the larger hosting services provided by Yahoo!, Microsoft, and Google.

Beyond the hosting world, scalability will also be a hot buzzword as more services, ranging from RSS hosting providers like FeedBurner to search engines like Technorati and Feedster to analytics providers like Google and MeasureMap will experience temporary failures and growth pains.

The cost of upgrading the service infrastructure will be too much to bear for some companies, which will be forced to shutter their door, sell out, or merge with a similar service. Meanwhile, many web-based service companies will fail to generate enough advertising revenue to continue upgrading. A flurry of mergers and closures will happen over a few months, leading people to wonder if this is bubble bust 2.0.

The downside of all those fears about a bust will be in the increased number of negative stories about technology in the mainstream media. Stories will mention the hubris of web 2.0 founders and will showcase Google as a typical example of this hubris, highlighting its free lunches and other things that were thought cool in 205: As a result of all those negative stories (and others but more on that later), Google will loose several billions (possibly even tens of billions) of dollars from the high of its market capitalization, shedding anywhere from 10 to 25 percent off its high.

After the consolidation, there will only be one or two independent players in each of the following (notwithstanding the fact that there will also be offering from the bigger portal players): blog hosting , vlog hosting, podcast hosting (WordPress and Typepad will either be the two in these three sectors or will have merged), blog search, social networks (speaking os social networks, Yahoo! or Microsoft will buy LinkedIn (if it’s Microsoft, LinkedIn will quickly be integrated with Outlook and offer Plaxo-like features).

Meanwhile, a sector which will have been decimated will be tagging. Following slow adoption by the mainstream, largely due to the complexity of adding tags to pages, many tagging companies will fail. Tagging, as a concept, however, will remain and be adopted by most major search engines: as Metadata entry is simplified with the introduction of Windows Vista and Office 12 (both of which will be delivered by Microsoft to a relatively lukewarm market), and tagging becomes a browser feature, it stops being a differentiator.

Trust is hot topic

Fear of Google knowing a little too much about people will bring a slate of bad press for a company that was the darling of the mainstream media in 2005. The introduction of its Google finance service, hooking up into people’s bank accounts and payments systems will be seen as the company becoming too large a player, with fear of it becoming a monopoly. The backlash will first start in silicon Valley, with many tech luminaries starting to tear down the company. It will continue with publications that were once its biggest cheerleader becoming its biggest detractor. As a result, many of the companies that relied on Google for key services (advertising, analytics) will try to distance themselves from it and start looking for other providers (meanwhile, companies looking for funding will excise Google from their business plans, in order to avoid being associated with it by VCs). Yahoo! will pick up some of the adsense/adwords business, along with Microsoft, which will offer a similar service.

Meanwhile, in the analytics space, new companies will be formed and attract a lot of venture capital. Many of them will offer ways to opt-out of their tracking and some will offer added incentive to people willing to provide them with more information. New models in the space will emerge and at least one player will provide a revolutionary approach that will change the analytics landscape.

In the blogosphere too, trust will be a major subject as some of the top bloggers will grapple with issues surrounding defamation of character, libel, accuracy, and reliability after a top-name blogger is sued for something he/she said or linked to. Furthermore, some of the top bloggers will grapple with issues relating to invasion of privacy as they become more famous in the mainstream media.

On the Wikipedia end, anonymous editing will be abandoned after the revelation of a major hack altering minor facts over several months in an automated fashion has rendered a core version of the wikipedia unusable. The wikipedia trustee will revert wikipedia to an earlier date, erasing all changes performed during that period of times and destroying several significant entries on 2006 current events. The mainstream press will pile on about the inaccuracies of wikipedia, bringing back earlier scandals as proof that no information on the internet can be trusted unless it comes from a reliable source (incidentally presented as being a member of the media establishment).

Conclusion

In late 2006, a substantial portion of these predictions will be wrong and some may turn out to be dead on (although most of the ones mentioning companies by name will most probably be wrong).

Meanwhile, on a personal level, 2006 will be a year of big changes. However, I promise it will also be a year of continued writing on TNL.net, even if it is at the same substantial post every week or two rate that readers have gotten accustomed to. I hope you’ll join me for the ride.

Tristan Louis is the founder and CEO of Keepskor and writes the influential tnl.net weblog, where this was initially posted under the title 2006 Predictions. You can follow him on twitter here or receive his weekly newsletter by subscribing here.

The Search Space

Google is undoubtedly the leader in search. It is what they specialized in and continues to be their most cherished asset. But does Google offer search products that fill a niche which is not covered by its competitors? Let’s take a look…

The interesting thing, when looking at this data, is that, apart from Catalog and Usenet search, Google does not offer services offered by others or currently under development. Interestingly, Google does not have any offerings in the Audio (nor a Podcast offering) and Encyclopedia space (although Wikipedia results sometimes pop-up in search results.) This seems to highlight two potential areas where Google will introduce new products: an audio search engine, which will include podcasts, and some type of partnership with Wikipedia to fill the reference space.

What is interesting here is that Google has generally been the first to market with many of the search collections listed. From this, one can deduce that Google works more as a competitive threat to its competitors, forcing them to invest more in their search product and, in the process, improving the quality and breadth of search data for every user on the Internet. This is a good thing but not revolutionary unto its own.

Search Services

The next area I decided to look into, in order to divine the whats and wheres of Google was the type of search-specific services it offered, compared to the same competitors.

This is actually interesting in that the offerings are pretty close. Of note here is a departure on the part of Microsoft, which is experimenting with clustered search. None of its competitors have show a product in that space and this may be an interesting indication of how they plan to play in that space.

Also of note is the fact that only Google offers a paid answering service (Google Answers). A question for players in that space could be whether something like the recent Mechanical Turk offering from Amazon could help a company fill that niche. This seems to be an untapped market that is only being mined by Google.

Non-search services

OK, so we can clearly see that Google has done a good job in the search space and its competitors are working hard to play catch up in that area. While they’re doing so, Google has been busy ramping up its offerings and closing some holes in terms of being an online media player. Let’s take a look at how it is fairing in the non-search space.

Of note in that area is the fact that Google has managed to revamp the email space with its Gmail offering, forcing Yahoo! and Microsoft to work on a revamp of products user-interface that had not really evolved much since their introductions. A couple of interesting holes in the Google offerings in terms of auctions and calendaring will probably be filled in the near future with online offerings closing the gap in those areas. Heck, even people working at some of their competitors are clamoring for such offerings.

More interesting, however, is the fact that Google is the only player in that space without a substantial access offering. Basically, they’ve been using the public internet as their accessibility world. This can provide some details as to the recent rumors of their developing a large scale WiFi network and some of their interest in purchasing dark fiber or other rumors about their interest in AOL.

Once again, it seems that Google has served well as spurring its competitors into action but the magic Google sauce does not seem to reside in the product offerings.

Developer Services

While all those offerings seem of interest to the general public, Google has been doing a good job in catering to early adopters, who generally impact general opinion. When doing a comparison on that space, it was fascinating to see that Google took the lead in most categories and that AOL did not even play in any of them.

That last item is one to ponder. Google is not in the hosting business yet. But it seems that there is potential for them and, once again, could play along the lines of Google trying to harvest dark fiber. They’ve revolutionized the online email space by offering a larger amount of disk space than any competitors. It seems they could be doing the same in the hosting space by offering a combination of easy to set-up and update tools (based on the blogger set of templates) with some more powerful features like Database management (the rumored GoogleBase, which now has its own URL, even though the code still seems to be sitting behind a login area.

Conclusions

Google does innovate in some spaces but has largely innovated in order to gain entry in markets that already existed. As a rule of thumb, they’ve been very smart at breathing new innovations in those markets. However, their competitors are generally quick to notice and are catching up.

In terms of future offerings, I would not be surprised to see the following products coming from Google over the next few months:

• An audio search engine, which will include a podcasting component (and possibly a podcast authoring component via blogger)
• A strategic partnership with Wikipedia or some other encyclopedia
• Some type of clustered search offering
• A calendar product, which will probably inject new life in that space
• An auction offering, tied with an internal payment system
• A web hosting service that will scale from small entities to large ones and will include Gmail as part of the email offering
• Some type of access service, probably using their WiFi solution

Whether that all happens of course is pure speculation on my part and whether it is enough to sustain their market capitalization (north of $100 billion as I write this) is something I better leave to people who know how to invest.

Tristan Louis is the founder and CEO of Keepskor and writes the influential tnl.net weblog, where this was initially posted under the title Reading the Google Tea Leaves. You can follow him on twitter here or receive his weekly newsletter by subscribing here.

The power of the network and links

Many in the blogosphere say that traffic is not a good measure of what blogs are but that conversation, as represented by links and indexes like Technorati, represent a more accurate view of the value of a blog. As a result, I decided to look at how may sites were linking to sites in the WeblogInc empire. Jason and Brian have been doing a great job at building a stable of blogs but it seems a large portion of their success comes from a single blog. Let’s dig into the numbers.

In the following table, I took a look at the list of blogs listed on the weblogs Inc. main site and ran the Technorati site numbers against them (duplicate entries in the weblogsinc list were removed as well as entries that pointed to sites which no longer exist).

Once you have this data, you can start doing some quick analysis. For starters, I started to analyze what percentage of the overall network linkage each blog represented. I then took that percentage figure and used it against three different financial scenarios which have been floated around: some people say the company received 25 million dollars in the acquisition, and others have mentioned a figure of 30–40 million dollars. The details look as follows:

However, in order to get a cleaner picture, I started to dig into more details. First, I analyzed the different segment performance:

What’s interesting here is that the consumer segment is responsible for the majority of linkage so I dug in much further. What I found is that the sum of the EnGadget linkage represents over a third of the overall network traffic (the actual number is 15,529 links for a 35.07% share of the network).

Data for the rest of us?

In acquiring Weblogs Inc., AOL has now provided us with some numbers traditional media are willing to pay for a blog. Looking at the numbers above, one can try to guess at the value of a link from an external site. a single link on the weblogsinc network represents 0.002258559942180087 percent of the overall network.

At the different rumored price points from AOL, it looks as follows:

I don’t know if those values are based on any real rationale but it’s nice to dream up the value of one’s blog based on this.

Should we now assume that traditional media companies are willing to pay between $500 and $1000 per site that links into a blog?

Not quite. The incremental value is in the size of the network and the underlying tools. Jason and Brian have been working on developing a blog authoring technology, called BlogSmith, that sits at the core of their network and one has to believe that AOL saw some value in the software too. However, one can easily say that blog valuations are going to be easier to make after this deal since it provides the first yardstick in that space.

Tristan Louis is the founder and CEO of Keepskor and writes the influential tnl.net weblog, where this was initially posted under the title Doing the numbers on the AOL-WeblogsInc deal. You can follow him on twitter here or receive his weekly newsletter by subscribing here.

Solid Integration

The first thing that is apparent is that this is more than just a blogging package or social network one. From the name to the way one’s web page is integrated with other parts of Yahoo!, it is clear that this is a longer term play with attempts at integration.

While some integration points are pretty solid (Yahoo! messenger, Yahoo! Launch, Yahoo! local, and the Yahoo! photo service seem well integrated), others are major misses. For example, why is it that this service has a different mailbox than my already existing Yahoo! mailbox? (and does that mean I now need to check mail in two accounts?) Going further, why are services like Yahoo profile and Geocities not integrated in this? It seems they would be natural integration point and yet they are nowhere to be seen. Last but not least is the main question about integration of my.yahoo and “My page” on this service. There should be another natural point of integration there, shouldn’t there be?

Basic blogging

The blogging platform, though light on features, seems pretty solid. The authoring interface is clean and uncluttered and presents a
public blog that has the most basic of blog features: entries, permalink, blogroll, RSS, and comments. This is far from earth-shattering and blogger still offers a richer experience as a whole but this could be a good starter kit. In a way, it has the same feel as similar offerings from AOL and MSN so I doubt Yahoo! will unseat Blogger with this offering.

Worries about copyrights

More worrisome, however, is the RSS feed. I took a look at it was a bit annoyed by the URL structure for it but that was the least of my worries. When I looked inside is when I made the decision that I would never use the 360 blog for anything serious. My reason was in the code of the RSS feed where the following appeared:
Copyright 2005, Yahoo!

I looked at this and thought that maybe I had misread the
terms of services when I signed up. So I went to read them again and found the following

8. CONTENT SUBMITTED OR MADE AVAILABLE FOR INCLUSION ON THE SERVICEYahoo! does not claim ownership of Content you submit or make available for inclusion on the Service.

How could it be then, that the content of my RSS channel is copyrighted by Yahoo!? I’m not sure but I thing it’s good enough a reason to steer clear of using this service. The service may offer some interesting stuff (for example, closer inspection revealed that moblogging is possible) but do I really want to give my copyright to Yahoo! In a world where large media corporations are trying to get more and more control over the content they own, one has to be careful about the content they give to those large corporations.

Social Networking

The social network component looks like every other social networks out there. As a late entrant into the game, I don’t know how much play Yahoo! will get out of this as people get what I would consider “social network fatigue” which is a disease which symptoms are very simple: if you’re tired of having to invite people to another social network, you’re suffering from it. I now have accounts on Orkut, LinkedIn, Ryze, Friendster and a few others: what more will Yahoo! offer me and how can I get my contact from one of those into the others easily? What we need is an aggregator of social networks (or an agreement between the different social networks to work on a common format so that if I have a relationship with one person on a social network, the other social network would recognize that link and not force me to re-invite the person). When I have a social relationship with a person, I do not have to contact them every time I use a different device. It seems that, as social networks proliferate, the individual value of the concept is dropping further and further.

Tristan Louis is the founder and CEO of Keepskor and writes the influential tnl.net weblog, where this was initially posted under the title Looking around Yahoo! 360. You can follow him on twitter here or receive his weekly newsletter by subscribing here.

Apple

Scored well on the introduction of the Apple mini, which represents Apple’s entry into the lower end market. However, no video iPod this year, only a photo one, leaving Apple far, far, away from the movie downloading world.

On the computer end, Apple did not introduce a G5 portable. Wishful thinking on my part, true, and still a wish I hope to see fulfilled in 2005.

Convergence: Music Stores

As expected, Apple has solidified its relationship with AOL, offering the iTunes store under an AOL login. However, the store is not fully integrated within the AOL service.

As predicted, the world of online music is now divided into two camps: AAC and Windows Media. However, the surprising move was from Real Networks, which was the first company beyond Apple to adopt the AAC format.

Convergence: Voice Over IP

As predicted, voice over IP has had tremendous growth in 2004. AT&T’s exit from the consumer market can be seen as a move to reorganize around land-line offerings. Also of significance this year was the introduction of VoIP services from most of the big telco player.

Regulatory discussions are now exploding, with telcos pushing for deregulation as “a way to compete” against the new players in the field. At the same time, the same traditional companies are pushing for regulation of VoIP businesses.

Wireless: Wi-Fi phones

Dead wrong on that one. Maybe next year!

While WiFi continues to progress at high speed, the introduction of phone services using such service is limited.

Business: Revenge of the Internet companies

Google did its IPO as expected and that went very well. Other Internet companies also went public this year but one can hardly talk of coattail effect.

On the bright side for investors, my predictions about the decline in stock prices for the big players did not pan out. However, I still maintain that the stock prices of companies like Ebay, yahoo, and amazon are too high.

Business; Sun in Trouble

As expected, SUN continues to have trouble financially but I have to admit I was wrong in terms of what I expected them to do. They are still in the SPARC business and are still pushing Solaris as their main OS.

Development: Standards at the forefront

This one was an easy one. As sites like ESPN and Wired moved to new standard formats, more and more people and companies are getting interested in more standard compliant code. Not a headline grabber but definitely a strong move.

Society: Social Networks at the core

Wrong, wrong, wrong. Social networks were slowly moving but not really getting more important this year. Their integration with search could, however, yield great potentials.

Politics: Internet comes of age

The Internet did come of age in this election cycle but Howard Dean did not win the democratic candidacy. However he, and other groups, managed to use the Internet to mobilize millions of people. The Republicans, on the other side, used the power of conservative bloggers to attack candidates (for example, the Swiftboat veterans for truth) and then take on the establishment (Dan Rather and Memogate).

Coming Soon: My predictions for 2005!

Tristan Louis is the founder and CEO of Keepskor and writes the influential tnl.net weblog, where this was initially posted under the title 2004 predictions: Recap. You can follow him on twitter here or receive his weekly newsletter by subscribing here.

Historical perspective

Every time a major change happens in technology, the stock market goes through some ups and downs. The explosion of a new medium or a new technological advance generally helps create a whole slew of new companies. After a few years, a lot of those companies fold and go away. It happened with radio; it happened with television (Time Magazine called the color television “the most resounding industrial flop of 1956″); it happened with early computers (remember MITS? Tandy? Commodore? Heath? Morrow? Any of those companies still around today?)… and yet, each of those created markets that went up, went bust and revolutionized the way business is done and media is consumed.

Doing the numbers

But maybe there was a real failure. Maybe the dotcoms are responsible for the big loss in jobs and the wiping out of the US economy.

Let’s take a closer look at where the money went bad in the 90s. What is the biggest failure of the 90s? Enron. Must have been a big dotcom. The only problem with that is that, taking a look at their website in 1999, their homepage talked about them being an energy trader (thanks to the Internet archive for preserving such jewel). When Enron wiped it, it took 150 billion dollars out of the marketplace. By comparison, if you combine Webvan ($1 billion), HomeRun ($750 million), pets.com ($250 million), etoys ($100 million), boo.com ($100 million), furniture.com ($125 million), you still come up with less than 1/20th of the overall failure of Enron. We could look at Worldcom, a large-scale phone company, the other big loser in the downturn and get similar analysis but since it was not a dotcom itself, what’s the point.

What we now call the dotcom bubble was a case of money going largely to companies that pretended to be dotcoms and, through shady practices, defrauded investors. Under the covers, however, they were NOT dotcoms. While many dotcoms failed during the early 2000s, those failures did not compare in any way to the failure of just two large-scale shady companies.

Internet vs. media

As we all know, the Internet gets around the mainstream media and it’s not something they enjoy. But of course, we know that the media are lilly-white when it comes to the dotcom bubble. All of them warned investors about the financial fundamentals of Internet companies, right? Well, except for continuous 24 hours reports on CNN, MSNBC, CNBC, CNN/fn, touting the wonders of the new economy; also except for magazines like Time, Newsweek, Fortune, Business Week, etc… which did the same; except for newspapers like the Wall Street Journal, the New York Times, USA Today, etc… that wrote flattering profiles of dotcoms and their owners.

The truth is, the media created much of the dotcom bubble, and then, when things went south (as they were expected to), said that they had never believed in all that stuff… except they seemed to have forgotten to tell people during the go-go 90s that they didn’t believe in the dotcom potentials.

Internet and Politics

So the next question, once we know that the media were responsible for the Internet bubble, is in looking at how they work in politics. Governor Dean, an unknown governor from a small state, uses the Internet for political purpose. His campaign manager moved power to the edge, empowering people in terms of getting involved in the electoral process. Together they raised $40 million dollars from individuals.

The media made it very clear that Dean had no chance of ever winning. Actually, it was so obvious to them that they barely covered him. Time magazine was so sure that he was an also-ran that they never covered him, except for that gushing cover article annointing him front-runner 6 months before the first votes were cast. And Newsweek did not consider him possibly having a chance either, right?

The media did set Dean up for a fall by raising expectations and then, when he failed to meet them, complaining that he did not meet them. This is a familiar game. For example, AOL told reporters that MSN would start with 2 million customers after the introduction of windows 95. It was not a number that microsoft invented, it was one invented by its competitor. The same is true about the introduction of Windows 95: at the time, an analyst said that Microsoft would sell 10 million copies from August to December 1995. When Microsoft failed to meet this, the same analyst put out a report saying that uptake must be slow because Microsoft had failed to meet the 10 million target. In the same way, the media said Dean would come in at number one, and when he failed to do so, said that his campaign was faltering.

I would say the only mistake the Dean campaign made in all of this was to listen to the media and change to fit their expectations. The change, of course, meant divorcing oneself from the Internet crowd and I think that, in the end, the real loser in all of this is, once again, the Internet and its potential for true democratization of the electoral system.

Tristan Louis is the founder and CEO of Keepskor and writes the influential tnl.net weblog, where this was initially posted under the title Blowing Bubbles. You can follow him on twitter here or receive his weekly newsletter by subscribing here.

It may sound like heresy and would create quite some controversy in the online space but let’s face it, the browser wars are over. Since AOL decided to get out of the browser business, the Mozilla foundation has successfully managed a transition and is now moving forward on adding value to their offerings.

By adopting Mozilla as their core rendering engine, Microsoft could achieve a number of quick wins: first of all, it would allow it to adopt a number of new features that many users have requested. Things like tabbed browsing, an expandable plug-in architecture, a rendering language for the application layer (no more XUL vs XAML discussions) would come out of the box.

Second, it would put an end to issues relating to standard compliance that have plagued the different implementation. Since Internet Explorer controls the market, and Mozilla and Firebird represent a substantial portion of the remaining of the market, throwing Microsoft’s support behind Mozilla would mean an increase in market share for IE in that compatibility issues between the two browsers would become inexistent.

Such a move would also get Microsoft more involved in the open source community and could be seen as extending an olive branch to that world by saying that Microsoft employees can work side by side with open source volunteers to produce great software.

Last but not least would be the fact that Microsoft could offer versions of IE for more platforms, discontinuing its concept of abandoning the Macintosh platform and extending into Linux and other Unix system (wouldn’t that be ironic?)

While it is evident to see what advantage Microsoft gains, some people may wonder what are the advantages for the Mozilla foundation. On this end, I would see a couple of things.

First of all, a player like Microsoft backing Mozilla would solidify the financial footing of the Mozilla foundation for years to come. Another issue would be in terms of market share: While IE has a dominant market share and Mozilla still remains the second player by a large margin, such an alliance would make both browsers only one, hence turning the platform in the de-facto industry standard.

Another advantage to the Mozilla foundation would be the marketing power of Microsoft coupled with the technological advances made by the Mozilla foundation could help standard compliance flourish around the internet. At the current time, many web developers only develop for Internet Explorer because it has the leading market share.

The firebird effort would also benefit from this as I am assuming that Microsoft would still want to keep Outlook as its email client (the integration with Exchange server means that trying to get Microsoft to move to a new email client would be difficult at best)

The road would not be an easy one. First of all, Microsoft would have to find a way to either import its plug-in architecture (the ActiveX one) into Mozilla or abandon it and consider Mozilla’s approach instead. This would be a major development as many of the security issues in IE have been relating to this.

The other thing would be an audit of the Mozilla code base to plug any holes that may exist and ensure close connectivity between the Windows Operating System and the browser. At the current time, I would venture to say that Mozilla products have benefited from the lack of notice by script kiddies. Becoming the largest player in the market would make Mozilla an instant target.

While I am dreaming about this, the realist in me says that it will not happen. But then again, one can always dream.…

Tristan Louis is the founder and CEO of Keepskor and writes the influential tnl.net weblog, where this was initially posted under the title A Modest Browser Proposal. You can follow him on twitter here or receive his weekly newsletter by subscribing here.

Apple

Apple will come out with a new lower-powered, lower-cost version of the iPod. The idea here is that they want to extend their lead in the digital music space and use the iTunes music store as a leverage for selling more iPods. From there, I suspect they will introduce a new low-end iPod which will follow the existing iPod line and offer less hard drive space at a lower price. In conjunction with this announcement, they will introduce a new line of iPods that offer support for both audio and video. From there, we might see a tentative move into the digital video space, with the possibility of their extending the offering on the iTunes music store to include downloadable music videos. Later on in the year, rumors will go uncofirmed as to whether Apple plans to introduce a downloadable movies service.

Apple will also announce the release of a new class of laptops powered by the G5 chip but offering lower speeds than their desktop counterparts, due to issues relating with chip cooling.

Convergence: Music Stores

As more music store follow Apple’s lead, we will see at least one other site (probably Wal-Mart’s) offering downloadable AAC files and follow Apple’s lead. On the other side, Apple will announce that it is solidifying its relationship with AOL and offering the iTunes music store as a component of AOL.

The recognition that the online music business is a low margin one will force many players to reassess their strategy, with consolidation ensuing in that market and solidifying across two standards: Windows Media Player files and AAC files.

Convergence: Voice over IP

2004 will be a big year for Voice over IP with many companies offering Internet telephony products in both the small and medium business arena and the consumer one. As major telephone companies unroll their offering in that arena, thoughts will go to redefining what a telecommunication company is about and new consolidation and splits will see phone companies reorganizing around two business models, either as utility providers, providing the infrastructure (the hardwired lines that go into a house or office), or as service corporations, providing services that run over those lines (the voice telephone will begin to be thought of as a service instead of a utility).

By year end, there will be a lot of discussion as to what those companies are about and calls to reshape the regulatory dialogue on what a telecommunication infrastructure is about. The other discussion on regulation will go towards figuring out how to deal with pricing models on communication services as the new services will destroy the concept of local and long distance.

Wireless: WiFi phones and integration everywhere

A big surprise will be the rise of mobile phones that use Wireless Internet connectivity (Wi-Fi) and voice over IP to allow users to place calls using the Internet infrastructure.

Data services will become more prominent in mobile phones, led by camera-phones, which will increasingly be used for multimedia messaging, and the introduction of some videophone services. As mobile phone companies see more pressure on their voice services, due to the introduction of WiFi phones and continued pressure relating to number portability, they will look to data services as a new source of income.

Business: Revenge of the Internet companies

Internet business will be in the headlines again as Internet companies show they have built successful business models based on profit instead of promise. As a result, investor confidence in Internet stock will return with an increase on stocks of companies that show they can use technology to lower costs and increase productivity.

In parallel, venture capitalists will start investing in new technology companies. Much of the money that has stayed dormant for the last few years will be invested in new companies that focus on services in the infrastructure, security, and interconnectivity arenas.

Of course, the big initial public offering of the year will be Google, which will generate enough excitement in the investment community to have a coattail effect on other Internet stocks.

On the downside of the investment picture, the stocks of Amazon, Ebay, and Yahoo will loose value as investors realize that their price/earning ratio are out of proportion compared to the rest of the market. Amazon will try stemming the losses in their share price by announcing that they are moving to a new strategy: offering a complete set of hosted services for retailers who want to lower their cost, instead of just being an online retailer on its own.

Business: Sun in trouble

Sun microsystems will see itself in a difficult situation as it finds itself squeezed on the lower end by Linux, which will continue to eat Solaris’ marketshares, and on the higher end by Linux, which will increasingly be seen as the way to go when it comes to large scale applications. Companies like IBM and HP will offer utility computing as a “better approach” for large scale applications, running them on mainframes instead of large numbers of blades.

On the educational end, Sun will lose marketshares to Apple, which will be pushing its G5 and OSX platform as a better alternative.

In a dramatic announcement to save the company, Scott McNealy will announce that Sun will abandon Solaris and move completely to Linux by the end of 2005. The company will also look to sell its SPARC processor business, with either HP or IBM picking it up, and announce that it is moving to a new hardware architecture, based on chips produced by another company.

Development: Standards at the forefront

Many large scale businesses will realize the value of building Internet applications on open standards like XML, XHTML, and CSS. As a result, the redesign of many major corporate sites will support those standards and an increasing amount of time will be devoted to making websites more accessible.

RSS will also experience a major growth curve as more and more people become aware of the power offered by such a subscription model. Much discussion will be paid to defining business models for delivery of RSS with media organizations trying to figure out how to distribute advertising in their RSS feeds. Initially, the Internet community will denounce the introduction of ads in RSS feeds but will come to admit it as a necessary evil later on in the year.

Society: Social Networks at the core

While services like Friendster, Tribe, Ryze, and pluggedin received a lot of coverage in the tech sector last year, many investments in the sector will fail as companies just look at social networking as yet another feature to add to their site. The existing players will either merge or be sold to companies like AOL, Yahoo, or Microsoft, which will add social networking as another component in their online product offerings.

Apple will be the surprise player in this new arena, using OSX as the basis for a new social networking platform that will merge their address book application with mail, calendaring and chat services to provide an end to end solution on user’s desktops and offer added services through their .mac platform.

Politics: Internet comes of age

Much of the US presidential campaign will be using the Internet as a political tool to organize supporters and raise funds. The early lead taken by Vermont Senator and democractic presidential candidate Howard Dean will help him win his party’s nomination. Using the same tools during the general election, Dean will try to ignite the general democratic base in a fight against George Bush. The Republican party will enter the election season with a similar set of tools and much of the campaign will be fought online with some potential scandal arising out of one of the candidate’s site being hacked. As a result of the Internet battle, record numbers of voters will show up at the polls in November.

Of course, TNL.net will continue reporting on all this and show how wrong all those predictions were at the end of year.

Tristan Louis is the founder and CEO of Keepskor and writes the influential tnl.net weblog, where this was initially posted under the title 2004 Predictions. You can follow him on twitter here or receive his weekly newsletter by subscribing here.

The key is in the incremental approach taken to developing those services. The first thing is that the larger companies largely sat the initial rush out and learned from mistakes made by dotcoms. From there, they have figured what the pitfalls are and can now roll out services that customers will want. This incremental approach really represents a new set of opportunities for people willing to go back and see what goods and services developed unsuccessfully during the dotcom rush have potentials. Once you’ve identified an opportunity, examine where the previous business went wrong, learn from their mistakes, and start rolling new services out quietly. After initial tests, expand. Of course, as always, keep an eye on the bottom line and you will be a winner.

It sounds really dumb but that’s where the dotcom revolution went wrong. The hubris of the late 90s was eventually the undoing of many companies. Now that the easy money has shaken out of the field, people taking a slow, careful approach are reaping some of the benefits.

Tristan Louis is the founder and CEO of Keepskor and writes the influential tnl.net weblog, where this was initially posted under the title Incrementalism. You can follow him on twitter here or receive his weekly newsletter by subscribing here.