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tricks that ended up with the company filing the largest bankruptcy on record at the time (this has since been superceded by other bankruptcies).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.

Recently, though, TechMeme has gotten me thinking about the tech blogosphere conversations as a whole and their longer term relevance. To the small “web 2.0″ community, TechMeme serves as a bit of a paper of record; The subhead even claims that it represents the “Tech Web, page A1”, claiming to bring us the important stories. But how do those stories fare over time? Is today’s hot topic a step in understanding a longer term trend or is it just a temporary distraction that will be forgotten a month/3 months/6 months/a year from now.

Fortunately, Gabe Rivera, the founder of TechMeme must have anticipated such a question and provided a way to look at TechMeme as it was a particular point in its short history. Using the simple interface, it’s easy to see the page as it existed at a precise point in time. So I decided to start looking at the site at the same time in single month spaces. The middle of the night and middle of the day position ought to be good time stamps so I decided to look at the site at 12am and 12pm on the selected date. I also had to discount the fact that April 1st is April fool’s day so I could not use the first of the month as this fact could skew the data. Here are the dates and times I ended up with:

• Today: June 2nd 2008 at 12am and 12pm
• A week ago: May 26, 2008 at 12am and 12pm
• Two weeks ago: May 19, 2008 at 12am and 12pm
• One month ago: May 2, 2008 at 12am and 12pm
• Two months ago: April 2, 2008 at 12am and 12pm
• Three months ago: March 2, 2008 at 12am and 12pm
• Six months ago: December 2, 2007 at 12am and 12pm
• Nine months ago: September 2, 2007 at 12am and 12pm
• One Year ago: June 2 2007 at 12am and 12pm
• Two years ago: June 2, 2006 at 12am and 12pm

With 20 data points, here’s what I discovered.

Today

Based on today’s news at noon, it looks like the important subjects at noon in the blogosphere are Adobe’s latest move, combining Flash and Acrobat with their entry in the already crowded (Google, Microsoft, Zoho, etc..) web-based office suite market. At midnight, things were a little less exciting, with discussion around the privacy issues Google Maps is raising with their StreetView offering.

Of course, it’s still too early to tell whether those stories will have a long term impact so let’s roll the tape back a little.

One Week Ago: May 26, 2008

At noon, a week ago, the top story was about a new type of SSD, developed by Samsung. Since it’s hardware, I assume that the impact of this news can’t be felt initially but there could be longer term repercussions. Also of note on that page is a small item lower on the page about Paypal outages. An interesting trend in my research on this is that this story is slowly developing over a period of weeks and months and the noise level appears to be increasing on it.

At midnight, the discussion was around Google’s power and the needed for another organization to work as a counter balance to that powerful force in the search engine space. Coupled with the discussions last night about privacy issues relating to Google maps, it seems we are seeing an emerging pattern here.

Two Weeks Ago: May 19, 2008

Two weeks ago, at noontime, the claim that Microsoft would eventually buy Facebook and keep it close was dominating TechMeme. At this point, no announcement has been made so this is largely conjecture and, while an interesting opinion, it’s not really news. This editorial was largely in response to the news item that dominated the previous 12 hour cycle about Microsoft’s statements regarding pursuing a possible deals other than a full acquisition with Yahoo!

One Month Ago: May 2, 2008

On May 2, 2008 at noon, the big news was… that the Google RSS reader is now available for the iphone. I’m sure many people consider this event as a major turning point when… well, hmm… a big big deal. Amusingly, Adobe was also in the news that day, with news that its flash plugin would escape computers and appear in set top boxes and mobile phones.

Another big subject was Steve Ballmer’s mention that Microsoft could go it alone without Yahoo, a discussion that dominated the midnight page on that day. The Yahoo/Microsoft chat has been kind of the soap opera of our industry and this latest installment was remembered as a turning point (or not) by many.

A possibly interesting trend piece, around midnight, was also intriguing: Will Grand Theft Auto IV hurt Iron Man opening weekend sales. I haven’t seen a follow up on that piece yet, which could tell us whether video games are displacing movies as the primary form of entertainment but my guess is that the answer is no.

Two Months Ago: April 2, 2008

On April 2, 2008 at noon, the top story on techmeme was about Intel’s plan for chips that would power up more mobile devices. Interestingly, this story was largely driven by mainstream media as the lead was taken by john Markoff of the New York Times, followed by comments from Forbes magazine, and Infoworld. The other related story was the press release itself, which can be seen as bloggers pointing straight to the source of the news. I suspect that this story will probably have more legs moving forward. A cursory glance provides glances at developing stories ranging from the rumor stage (that all important Google/Skype partnership or acquisition… which didn’t happen) to the focus on process (like the approval of Office Open XML as an ISO standard).

The departure of Google’s CIO dominated the prior night’s news cycle and word of Apple’s 3G iphone started to filter through.

Three Months Ago: March 2, 2008

March 2, 2008 at noon provides us perspective on today’s news, thanks to Microsoft’s announcement of ITS entry into the web-based office suite market. When put side by side with today’s announcement by Adobe, it seems to start pointing to more of a trend. Beyond that, little news that seems to be of note from a memorable standpoint.

The interesting thing here is that the same subject was leading the previous night’s news cycle. This seems to establish a first rule for techmeme: subjects that survive on the front page more than 12 hours may be worth paying attention to.

Six Month Ago: December 2, 2007

There’s an all saying in journalism that 3 items make for a trend. In the case of this study, it looks like Web-based office suite are definitely the hottest trend around, as the top news on December 2, 2007 at noon was information about the future of Google’s offering in that space (either that or there is an unwritten rule in the technology field that information about web-based office suites MUST be introduced on the second day of the month or wait until the following month).

The subject was starting to climb the chart 12 hours earlier, even thought the discussion at the time was dominated by a Facebook misstep (remember Facebook Beacons? Well, that was around that time). From an interface standpoint, it also brings up something that I’d like to recommend to Gabe: could you add and up or down arrow to highlight if a subject is getting more play or not. On something like this, it would be nice to get an idea of the stickiness of a topic. It appears many topic appear low on the page and move up over time, the quicker and faster they move up seems to indicate the importance of the story and it would be a nice addition to have that info on the screen.

Nine Month Ago: September 2, 2007

September 2, 2007 was a quiet news day. I guess everyone was mourning the death of the newspaper, which was forced by Google on that day, according to the noon-time headlines. There doesn’t seem to have been any other major news around midnight either. This, however, could be an artifact in the data as September 2, 2007 was a Sunday, which is generally a pretty quiet news day as most people don’t work on Sunday.

Interestingly, a story that is just now starting to get more notice is the continuing brushfires around Paypal’s outages. Not that sexy a subject but one that started to be raised around that time. At the time, discussion of Google’s entry in the mobile market centered around the idea they would deliver a device instead of a platform.

Last Year and Two Years Ago

A year ago, at noon, the Techmeme conversation was around porn. During the night, though, the conversation was centering around the acquisition of Feedburner by Google. This is probably remembered by people in the industry as an important milestone and here, techmeme shines at organizing a package with the appropriate conversations.

Things do not improve much if you go further back: 2 years ago, at noon, and midnight, gives us little to mull over.

Conclusion

The data seems to point that the front page of TechMeme largely represents what’s hot right now but does not necessarily highlight stories which have a longer term type of impact. In that sense, it may also be highlighting that discussions in the tech blogosphere are largely centered on insider-type minutia while failing to put things in a larger context. This appears to present a myopic view of the tech world that leaves us with lots of data but preciously little information. So while TechMeme provides a useful tool in terms of getting an idea of the pulse of the conversation “right now,” it does little in providing data that would allow someone to understand the larger trends that are affecting our world as a result of the internet (and web 2.0 revolution).

I would argue that the answer to the question I posed in the title for that post is a resounding yes. Because it deals largely with the trivial and assess little value to longer type impact, TechMeme creates a self-imposed myopia on its readers and participants. A possible exception is when a story manages to survives through multiple 12-hour instances, providing many angles to the same events. But those events are few and far between.

Whether the lack of headlines with a major impact is a phenomenon that is unique to TechMeme or to the tech world in general is a question I’d like to leave to readers and I’d appreciate comments as to your thinking around this.

But all this comes down to a simple fact: if you’ve missed what happened on TechMeme in the last XX hours, days or weeks, you may not necessarily have missed much. so kick back, relax, step away from the computer and, if you need to catch up, you can always pick up a mainstream publication that may cover a distilled version of what happened if it’s of any particular significance.

Tristan Louis is the founder and CEO of Keepskor and writes the influential tnl.net weblog, where this was initially posted under the title Is Techmeme myopic?. 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.

I was recently describing my update process to David Strom, after he had posted an entry on his blog about how poor the contact management system in Gmail was, and I hit upon a realization: A lot of the work that goes into keeping all that information up to date seems to be something that ought to be more suited to some level of automation. Why is it that there is no real linkage between my address book, different email systems, social networks, IM systems, Skype (and other voice over IP solutions) and my mobile phone? Each of those appears to live in a silo, unable to offer me a full view of the people I know.

While Plaxo does a good job of synchronizing metadata about people (What I would consider as rank, name, and serial number ie. the basics like physical address, IM address, phone, and email), it has yet to evolve into a solution that would give me a full view of the relationships I have.

I also played with a number of CRM packages like SugarCRM but ultimately, they fail because their view is completely sales-centric, with the idea of people being largely seen as members of a company and sales prospects to be closed. I am not much of a salesperson (unless you consider pushing new ideas on people a type of sale, which arguably it is) but my view of the world is much richer than that. I don’t want to think of people as buyers.

However, the concepts of grouping information in CRMs is somewhat attractive. What I want is a view of my relationship with people that would group:

• The basic type of address book information available in my address book and/or on my PDA and/or phone.
• The rich email discussions I have had with said people
• The similarly rich IM discussions I have had.
• SMS or MMS discussions synched from my phone.
• Social Networks interactions
• Feeds for the person (to things like their blog, their last.fm account, etc…)
• Trackbacks and other blog related discussions.

The interesting thing is that each of this information is available in a digitized fashion but there is no centralized point that allows me to see said information about Joe Smith.

Why is that?

So I’d like to suggest the creation of a new class of software called the “Personal Relationship Manager” or PRM. The purpose of a PRM would be to help you manage your life instead of trying to manage sales.

Basic Personal Relationship Manager

Of course, people are going to say that this product or that product solves my existing problem. In order to get those people to think before they push their solution, let me describe in details what I want:

Contact Information

• Integration of my address book across different email services: the contact part of this is largely completed by Plaxo as they have managed to integrate and aggregate the address book from a number of services. They need to provide an interface to integrate others but they seem closer than anyone else on this.
• Integration of my address book across different IM services: top line, the following would be needed from day one: AIM, MSN IM, Yahoo IM, Google IM, ICQ, and Jabber. I should not have to reenter information for each.
• Integration of my address book across different social networks: this is getting trickier as most of the popular social networks look to that type of data as owned by them. However, an ideal PRM would integrate and aggregate the information my friends give on a social network into a single view.
• Integration of my address book and mobile and VOIP solutions: Caller ID on my VoIP solutions like Skype, Vonage, etc… and on my mobile phone should be integrated into a contact view. Today, my Treo asks me if I want to create a new contact or add a number to a contact if it’s not in my address book already. I want that type of feature across all voice communication solution.

Conversations and Status

• Integration of Email conversations across all email services I use: At minimum, this should allow to bring IMAP and POP into my PRM.
• Integration of IM conversations across all IM services I use: Most IM services now have an archival feature. That should be presented as part of a user view.
• Integration of Social Network Status and related messages across all socially-aware applications: From social network status to Last.FM music, from WeSabe to Twitter, my friends are updating information in a variety of services. I should have a dedicated news feed for each individual view.
• Integration of SMS/MMS history: SMS and MMS sent to my mobile phone should be integrated into the overview of people.
• Possible Integration of Voicemail and audio messages: At a later time, integrating those into the package would be a nice to have.

Input

• The PRM should manage relationships across social network: This ought not be aggressive but the system should check when people I know join a particular network I’m on. If it finds a match, it ought to tell me that it did and, based on my settings, either ask for a linkage automatically, or ask me to approve/deny asking for such linkage.
• The PRM could (not should) become a single point of entry for broadcast messages. For example, if I change jobs (as I did recently), I would update that system with the job change status in a single location and it would update that information across all the touch points where I have entered that information.
• The PRM could (not should) be a single entry point for status broadcast. At the very least, it should allow me to set which system ought to be integrated via simple rules similar to filtering (for example, I could say “If I update Service X, also update Service Y and Service Z.”

Programming Bits

• Low change footprint: A new application should not force me to change everything I already use. Instead, it should work with the applications I already use. This is probably the hardest thing in developing the application I’m highlighting as it will have to integrate with other services/software via some kind of service oriented architecture but not take over their basic features.
• Fully addressable via API: The PRM, if built successfully, would become central to managing relationships. As a result, it could become the source of data that applications could be built on. Because much of the data is personal, a strong set of security and access controls would need to be in place in order to ensure that only the data people in my PRM want to distribute is distributable. On the other hand, the data should be formatted in such a consistent way that developers could build applications that integrate with the PRM.
• Online/Offline addressable: Knock me off the network and I should still be able to have access to some of the data. Put me back on the network and I should be able to resync it all with the most up to date information.
• Decentralized: People tend to prefer having their contact info in the hands of more than one providers as they feel that type of information is largely personal. A PRM solution would thus have to be in a mode that can be federated so no single entity is in full control of the data.

So the purpose of the system, once built, would be to give me a view of my friends/contacts/etc… that is consolidated. It would probably provide me with a high level contact overview (listing all the ways to get in touch with someone), and then allow me to drill on the different conversations I’ve had with the person across a variety of systems (Email, IM, phone, social nets) as well as give me an overview of what they’ve been up to thanks to a status message and socially aware apps screen. And it would have to do all that without me changing any of the systems I’m currently using. It’s a tall order but it’s one that, if satisfied, could easily become the central way for people to manage their relationship.

If your product does indeed satisfy all those requirements, you may have made a sale. And if you have an interest in developing a PRM, I’ll be happy to be an alpha tester.

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

Of course, day one is always amusing. First, it’s clear that the security claims are not fully justified. And moving from the confines of the OSX world, which is generally like a meticulously cleaned up suburban neighborhood into the wilds known as the world of Windows was bound to test some of Apple’s mettle when it comes to security. But that’s really besides the point: the software is not a full released version and one can hope that it will be improved upon further down the line (then again, hope springs eternal.)

But all this is really besides the point. In order to see what is happening, one must start thinking about why would Apple think about a new browser today.

The first popular line is that it works as a good environment for developing applications for the iPhone, now that Steve Jobs has stated that this would be the only way developers can currently develop for that new device. GigaOm believes that AJAX will change the way mobile devices applications are developed. I’m not sure I share Om’s enthusiasm for that approach: for starters, the system sports WiFi and EDGE but no higher speed wireless network. So, unless you’re near a WiFi hotspot (and I’m sure one was available for Steve Jobs’ presentation), you may find responsiveness sluggish. Small amounts of data are OK when running on an EDGE network but the startup for a new AJAX-powered application will probably be on the slower side. However, having denied access to the core system on the iPhone to developers (as it did for the iPod), Apple had to toss them a bone and Safari was that bone. That bone is called Safari.

The next challenge for Apple was that, while a lot of developers use OSX, the majority of development is still not happening on their platform. In fact, more energy is expanded in the web development community to making sure that something works with the Firefox browser than is to make sure that it works with the Safari browser. By now swinging the tantalizing carrot of iPhone coolness, Apple is making sure that more developers ensure their sites work with Safari. From that sense, it avoids future problems with some of their mac users being unhappy with the fact that some sites don’t work on Safari, blaming Apple for it instead of the site’s developers, and it creates a new platform for itself: develop something on Safari and it will run on macs, windows, and the iPhone.

Apple is basically pushing Safari as a new platform, borrowing a strategy that was first highlighted by Marc Andreesen almost 15 years ago: back in the day, Marc stated that he wanted Netscape to replace windows or just turn it into a set of basic components with everything running into the browser. Of course, this was at a time when you were lucky if you had a 56k modem so it didn’t make much sense then. In a world where bandwidth is high enough, applications can now resides largely on the network so Apple pushing Safari as a new platform could make some degree of sense.

The next step to think of is that while an application may make sense in terms of running fully online, even Google has seen some of the limitations of that model. Their offering of the Google Gears showed that they are interested in moving some of their application to an environment where a network connection is not required 100 percent of the time.

So Apple’s strategy would require a way for Apple to ensure that things can be installed locally within Windows. This is where something that was not mentioned by the folks at Apple is showing up when you install Safari:

Now that’s very interesting. Why would Apple be so interested in installing those two pieces of software on your computer? After all, they are not necessary for developing applications for the iPhone. But before going into speculations as to why they are there, let me explain what those two applications do:

• Bonjour, according to Wikipedia, is “Apple’s implementation of ZeroConf,” a technology that allows inexpert users to connect computers, networked printers, and other items together and expect them to work automatically.
• Software update, also according to Wikipedia, installs the latest version of Apple software on a computer. It was first introduced on the Windows platform as part of iTunes.

The presence of those two packages higlights that Apple is not just interested in the desktop but wants to play within a wider environment:

One can assume that Bonjour might be embedded in the iPhone and AppleTV as well as future version of the iPod. This would basically hit right at the heart of Microsoft’s strategy of creating a distributed environment where the Xbox, Windows Media Center, and other Windows powered devices are all interconnected. Apple would now enter that world and get all their stuff also connected on Microsoft’s turf.

The presence of software update, while not fully mined yet, could be equivalent to Google Pack, which also happens to include the Google Updater, which Google describes as follows:

The Google Updater is the program that downloads and installs all the software in the Google Pack. You can use the Google Updater to monitor the status of your installation, run software that’s been installed, or uninstall software. A Google Updater icon will appear in your system tray and will display notifications when new software is available.

With that in place, the windows desktop is increasingly looking as a new battleground. On one site you’ve got the incumbent, with Windows Update, then you have the new claimants to the throne in the form of Google and Apple. Right now, Apple is actually starting to push new products with the Apple Software Update: installing the new Safari software on a virgin machine (ie. one without any Apple software update) yielded the following Software Update Window:

So I install a browser and the next thing Apple is telling me is that I should really consider installing iTunes and Quicktime. What next? This is obviously a good delivery vehicle for Apple to push more software down the lines.

So they’re developing their own eco-system right on top of Windows. In a way, one could think that they are basically taking the same approach as Microsoft did with the Office platform: Develop on someone else’s turf but also optimize for your own.

It’s a brilliant strategic move and one that could eventually yield to much more software coming from Apple to the Windows platform.

So why would Apple care about Windows?

Well, beyond the basic point that there are more Windows users than there are mac users is the fact that Apple is working on setting up new ecosystems for itself. The iPod was the first obvious move in that direction and they are betting that the iPhone will be a similar winner for them. Earlier this year, when Steve Jobs introduced the iPhone, he also dropped the word computer from the name of the company. Apple’s future is not in the computer space (and it is appears the company is running out of new ideas for its operating system as the new OS features presented in yesterday’s keynote were incremental at best) but in the consumer electronics space. They hope to control what’s in your hands (iPod, iPhone), what’s on your screen (iTV, iTunes) and how you access the content. By having control to the access point, Apple can then influence the pricing models in the delivery of media and ensure they take their own percentage along the way: it’s something that worked for them in the music space, something they’re working on in the video space, and I suspect something they’ll eventually look into in the software space.

Apple wants to control the points of entry and charge a fee for access to them (further highlighting that point is this blog entry by Larry Dignan at ZDnet, which highlights that Apple is getting some nice revenue from Google and Yahoo). All and all, Apple could eventually succeed on grounds that Microsoft once wanted to claim as its own: to become the tollbooth to the Internet and the new world of media.

Tristan Louis is the founder and CEO of Keepskor and writes the influential tnl.net weblog, where this was initially posted under the title Safari: Apple’s New Platform?. 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.

Looking Back

In the ensuing 6 years, I’ve been going over and over what went wrong and discovered more lessons along the way: the market conditions were wrong, we were young and arrogant, and, for the most part, we didn’t really understand the magnitude of what we were trying to accomplish: to remind people, our goal was to launch a website in 16 countries (15 EU countries + the US) on day one, localizing our site for each of them. At the time (1999), no one had accomplished that broad a coverage (nor had anyone even tried to).

So it seemed a little crazy but, then again, crazy people had built Netscape, Yahoo, Ebay, and Amazon in the previous few years. So crazy seemed not only possible but it seemed to be the key to success on the Internet. The problems we encountered fell in a number of areas: currency exchanges, tax issues, language localization, integration with many fulfillment partners and a front-end experience that called for broadband connections. We basically wanted to build eCommerce 2.0 long before there was a web 2.0.

Looking Forward

So fast-forward to now. Broadband uptake is nearing 50% in many of the target countries and the number of users has grown tremendously, governments have learned about internet ecommerce and now have specific rules relating to it. And integration across many system is what web services and mash-ups are all about. Do I smell progress? So let’s revisit my old post (which later was published in Business 2.0) points and look at them through the 2006 lens.

The Currency Problem

Back then, the 16 countries we targeted meant 16 different currencies.

Today, with the rise of the Euro as a unifying currency, the same 16 countries only have 4 different currencies (the UK still being stuck on the pound sterling and Denmark keeping its currency a national one pegged to the Euro. The US and the Euro are the other two currencies covered.) This greatly reduces the complexity of pricing models across Europe and makes the overall cost of managing the catalog much lower.

Back then, we actually had to build our own currency tracker, with people inputing the exchange rates daily into the system to keep everything aligned.

Today, you can get access to currency exchanges via web services (just off the top of my head, I can think of Reuters and CBS Marketwatch providing this type of data), therefore automating what was once a manual task and, once again, reducing administration costs for the catalog.

Tax Issues

Back then, there was no consistency in the way taxes were assessed on goods sold online. The financial people at Boo.com version 1 spent a lot of time with a big 5 accountant group and a lot of local government to lobby for normalization of rules around taxes on cross-border business.

Today, because all of those governments understand the value of internet commerce and because many have worked in conjunctions with each other (through the G8 and the EU) to normalize rules surrounding taxation of goods sold on the Internet the problem is easier to solve.

Back then, we had to build our own systems to track all the vagaries of the different tax systems. It wasn’t a build vs. buy decision because there were no packages offered on the market to deal with this.

Today, you can buy software packages that has all the taxation rules built in so that problem is no longer one you need to build for. You can just buy the technology and let the vendor worry about the changes in taxation laws.

Language Localization

When we set out to build Boo.com, a strong component was the idea of offering the online store in the local language of the user. Boo.com was actually the first store to offer as high a level of customization by market and we had to make a number of changes to the e-commerce software package to make it into a globalized platform. Remember that, at the time, e-commerce was primarily the domain of US and UK companies so selling in a language other than English was rare. E-commerce sites which sold goods in non-English markets were generally customized on a one off basis but no one, prior to Boo.com, had attempted to have a single back-end system run multiple countries.

Today, more vendors are selling solutions which can be customized across a variety of western languages. The solutions are not yet perfect but, for the most part, they work (there are still a number of issues when it comes to localization across 2-byte languages, especially when it comes to site with mixed languages.) Back then, we also had to develop a content management system that could handle translation workflows and management of content in multiple languages. It wasn’t pretty but it worked and it required a lot of internal translation to happen. Each product had description, sizes, etc… available in multiple languages. That part was actually a fairly large management of content nightmare. Today, modern content management system can handle more complex workflows (allowing to track when translations are completed) and even can provide hooks to farm-out translation of the content to external parties. This substantially reduces the cost of a multi-country offering.

Integration with fulfillment partners

Back then, a fair number of people at Boo.com were experts in EDI (or electronic data infrastructure) because EDI bridges were the only way to integrate into our fulfillment partners. Web services didn’t exist so we had batch jobs triggering every hour to the warehouses at DeutchePost and UPS so they could pick, pack and ship the orders. This was expensive and probably the area where we lost the most money on a single transaction.

Today, services like fulfillment by Amazon provide the same service at a substantially lower cost and with less integration headaches as web services are making it easy to integrate their services into an e-commerce operation. That saving alone could justify the existence of Boo.com 2.0 (actually, it would be 3.0 as FashionMall tried to resurrect Boo.com once already).

Front-end

No discussion of Boo.com can be full unless we talk about its front-end.

The Broadband Penetration Problem 

Many people laughed at the attempt we made at creating a more user friendly interface to e-commerce. Back then, a more interactive experience meant using Flash. It was the only way to get a lot of parts moving together. Things like Zoom-In/Zoom-out or Rotate type of effects were hard to accomplish with DHTML and much easier to do so with Flash. Since XML didn’t exist, we didn’t have AJAX. Since we didn’t have AJAX, we went with Flash. Since we went with Flash, the assets were large. Since the assets were large and the average user was connecting via a 56k modem, the site looked slow.

The idea was that every click should feel snappy, a model now common with AJAX-based applications but we failed in one assumption, which is that broadband penetration would move at a faster rate. Our expectation were that 1Megabit lines (much slower than what one now gets via cable or DSL) would be readily available within a year. That was a very flawed assumption and we had not planned any contingency for any slower a deployment.

Selling clothes requires details

Another interesting challenge was that we were trying to sell clothes online. Evaluating a DVD, CD, or book online is easy. However, clothing is different: when people shop for clothes, they like to feel the fabric, look at the details in the fabric. That experience was hard to reproduce online. Back then, what we set out to do, in order to help mimic some of the experience was to have highly detailed pictures of the goods. 

Every product was shot multiple times at a stunning 5 megapixels per picture (the highest possible resolution at the time). This meant picture files that were about 1–2 Mb per file, something that seems small in the era of Flickr and YouTube but was massive in the era of 56k modems. The advantage of such detailed pictures was that you could zoom in to a level higher than what you could do in a store (part of our attempt to compensate for the fact that you couldn’t touch the merchandise). Today, such level of detail is standard among most of the online clothing manufacturers and with more broadband lines, it’s no big deal.

Another innovation we introduced was the presentation of products in 3D. You could basically rotate every product in our inventory any way you wanted. This, at a time when QuickTimeVR was not on the marketplace. This meant getting our photography partners to come up with completely new approaches to taking product shots, sometimes requiring as many as 15–20 shots per product in order to get everything right. Those pictures were then taken into Flash and adjusted so that you could rotate the product and zoom in and out of it, a feat that now seems pretty standard, using QuickTimeVR.

All that photography work didn’t come cheap, especially when you consider that this was done across 5,000 products and that all the assets were then stored on our servers (Hard Drive space was nowhere near as cheap as it is now). 

Modeling

Another innovation was the introduction of virtual models you could use to try the clothes on. Today, Sears offers a lower quality version of what we were offering back then (their model still requires a reload of the full page to turn it.) Because all the products had 3D equivalent, modeling them was relatively easy and we decided to throw it in as an extra feature that helped enhance the user experience. Once again, because of the processing and bandwidth required to make that happen, the idea was ahead of its time. 

Miss Boo

So we now all know that chatty avatars on web sites are not a good idea. The concept behind Miss Boo was to help make the experience similar to that of a store, with a sales assistant (Miss Boo), helping you out. Our long term goal was to have Miss Boo attached on the back-end to a real person so we could have integrated IM while you were shopping (that plan never came to fruition as the company had other concerns after launch). In the process, though, we’ve learned that avatars are generally despised and probably helped many sites avoid them.

Tagging

Because we wanted the experience to be a more communal one, we had a way for users to tag clothing (well, we didn’t call them tags, we called them “LaBOOls” (labels, with a Boo in the middle, get it?) in the great tradition of badly named things on our site). However, because there was no AJAX or other way to quickly get the data back and forth, it required a reload of the whole page after each tag was applied. The feature was quickly killed in order to gain speed but I can’t think of any other site that had tagging on products at the time (if I’m wrong, please rectify me in the comments).

Chatty Tone

The BooZine (Boo Magazine) was our attempt to create a more friendly, open tone when dealing with users. We didn’t want to be just a store, we wanted to engage the users. When our forums (remember, this is before blogs were popular) started filling up with vitriolic comments, we were forced to shut them down, closing a channel of communication for users to us. It was a real shame but I think our attempt can be mirrored in the way most web 2.0 companies now have a blog that they use to receive feedback from users.

A more mature market

Back then, few people were buying stuff online. Even fewer were buying clothes online and an even smaller number than that was buying hip clothing. Considering all the challenges Boo.com was trying to address, its target market was just too small to make it a successful business.

Today, blogs like CoolHunting, HypeBeast or MocoLoco show that there is a market for the types of goods Boo was trying to sell. That, in itself, could be a good reason for Boo.com to come back: The market they were addressing is finally there. However, it may also be a reason for it to not comeback: the market they were addressing now has competitors in it.

Was Boo.com the first Web 2.0 company?

I have to admit that I’ve been feeling a certain level of uneasiness about Web 2.0: to me, there didn’t seem to be much there that I had not seen before: web services (yup, done since 2000), user generated content (tried it in a limited fashion with with the “labools” and forums), more transparency (tried that with forums in the past), chatty tone (attempted at Boo). What I failed to realize is that where we failed was in the way we implemented things. But looking back now, the reason it didn’t feel new was that much of that experimentation was on our site only, not part of a more widespread phenomenon.

Another thing that got me thinking along the way of Boo.com as a Web 2.0 company was the excellent post on Pixel Acres about the visual design of web 2.0. Let me explain, picking points from the article:

Integral to Web 2.0 is harnessing the input of website visitors. Users can generate content for a web service, promote it in a “viral” peer-to-peer fashion, and improve it’s data quality through their opinions and preferences.

Users of Boo could create their model, share it with friends (following the UGC model, I guess). So the input component was there, as was the sharing one.

Most Web 2.0 sites come across as friendly, approachable and small-scale, using subtle design decisions to gain our trust.

Every decision about the front end was to make it appear friendly, chatty and hide as much of the complexity as possible (that’s why so many people thought what we were doing was easy but badly implemented).

Bright, cheerful colors dominate Web 2.0 sites… Bold primary colors suggest a playful, fun attitude and also help to draw attention to important page elements.

One word: orange. The boo.com site had cheerful colors all over the place (sometimes so cheerful that I worried it would be seen as a toy)

Rounded Everything: The friendliness of rounded corners is in keeping with the comfortable, informal tone of many web 2.0 sites… In a great FontShop article analysing the logos of Web 2.0, it was clear that rounded typefaces are all the rage. This smooth approach to type lends a modern playfulness to a company’s visual identity.

Yup, Boo.com was round, very round, even the logo and the fonts. From a visual standpoint, it was much closer to today’s web 2.0 site than the ones it lived among.

Most Web 2.0 sites devote prime real estate to the message that they offer a free service.

Well, we kept pushing our “Free” boozine (Boo Magazine) and looked at it as a way to hook people into coming back again and again to the site.

You won’t find any stock photography of smiling support staff on a Web 2.0 site — that’s a tactic favored by small companies trying to mimic large corporations. Simple icons and screenshots are the order of the day when it comes to imagery on Web 2.0 sites. 3D and beveled icons can lend elegance and polish to a page design that is otherwise fairly stark.

Boo.com was 100% stock photography free. It was all icons and cartoons.

A good Web 2.0 app ought to be lightweight and easy for users to grasp, and clever visual design and copywriting can help remove barriers to entry. Smart use of layout, color, type and copy can go a long way towards easing the pain.

Well, we failed on the lightweight end of things but the design was to be as airy as possible.

As far as Web 2.0 is concerned, bigger is definitely better. Bigger text, that is. Large text is easy on the eye, and coupled with snappy copywriting makes information easy to absorb. And now that accessibility is cool, it’s possible to be a hotshot web designer and use enormous type.

… and back then, people said we didn’t make good use of the real estate because the fonts on our screens were too big. However, note that accessibility was inexistant at Boo.com

The layout of Web 2.0 sites might be described as minimal. With a focus on legibility and ease of use, good use is made of white space. White space allows important information to stand apart, provides rest for the eye, and imparts a sense of calm and order. Generous leading also makes text copy easier for the eye to follow. Some Web 2.0 layouts are so minimal that they verge on boring, but designed well, an uncluttered page can be incredibly tasteful.

Yes, we had a lot of whitespace.

Friendly, informal copywriting allows a more personal relationship with website visitors.

People complained that our content was too informal, actually. I guess taste has changed in the following years.

So, from a visual standpoint, we may have established some of the rules that are now considered good visual rules for Web 2.0 companies. Of course, feature wise, we didn’t have RSS (it had not achieved the level of popularity it now has) and worked largely as a walled garden (all interaction happened on our site) but Boo.com was probably sitting closer to a Web 2.0 sensibility than most companies that existed at the time.

Conclusion

Based on past history, the complexity that existed back then has largely disappeared, making it possible for Boo.com to exist in the web 2.0 world. The market has also evolved to the point where many of the innovations first introduced by Boo.com are now considered mainstream and where many of its barriers to entry seem to have disappeared. This means that Boo.com could have a chance at surviving this round. However, one would have to be careful about overspending on advertising (a crime that Boo.com was responsible of, with its massive multi-country ad budget). A question that remains on the viability of the brand is whether the errors of the past have damaged the brand to a point where it would not be able to come back. It is probably the most dangerous factor in the rebirth of Boo.com and, if the negative press of the past overshadows the re-emergence of this company, it could be a fatal flaw that could ultimately make this a bad idea.

I wish much luck to the parties involved in the relaunch. Hopefully, they won’t suffer from the same arrogance we suffered from in the first iteration of the company and will be able to build a strong business around this brand.

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

So yes, Google is paying $1.65 billion for youtube, Ebay spent $2.6 billion on Skype (making the Google/YouTube deal look like a cheap deal), and News Corp. paid $580 million for MySpace (making them look frugal compared to the other two big deals) but the truth is that, across 20 major deals, those 3 stand out as the exception and not the rule. It appears that, on average, deals are generally below $50 million and, in most cases, lower than $10 million.

Bubble 2.0?

I’m sure people are going to call me out on this because I’ve previously warned about the possibility of a new bubble being created. However, at the current time, it seems the data does not support that conclusion yet.

What it appears to support, however, is an interesting calendar anomaly: it appears that major deals generally happen in the 4th quarter of the years (either that, or I got my data set wrong)

Another interesting point is that I haven’t found any other chart of that type around the net. So I figured this page can be a starting point. Hopefully, faithful readers will help me fill this chart with more data points so we can do more granular analysis

Tristan Louis is the founder and CEO of Keepskor and writes the influential tnl.net weblog, where this was initially posted under the title No Bubble 2.0 yet. You can follow him on twitter here or receive his weekly newsletter by subscribing here.

Today’s news that the Net Neutrality bill was defeated may create future problems for American internet businesses but will not kill the Internet, as some have claimed. Instead, it will probably dictate, in the long run, the death of the very proponents of a ban on net neutrality: phone and cable companies which have been trying to overreach in their attempt to fatten up their bottom line.

Looking at the stakes

At issue in this debate is how bandwidth is distributed and whether it should be metered in any fashion. At the current time, in the US, most people who get broadband pay a flat monthly service fee that gives them unlimited bandwidth at up to a certain speed. Under a new model many phone companies and cable companies are trying to popularize, this would change. Their view is that certain services, like phone service or video service, require more bandwidth and therefore should be charged in a different way. they would basically introduce new charges that would offer access to such service for a premium.

The fear from many is that such model would get them into the business of monitoring what type of services are available and being selective in what access they offer. For example, they could start offering access to certain sites at a premium fee but decline access to other sites or degrade the service in such a way that those other sites would not work well on most computers.

Short term impact

In the short run, few will feel the impact of the communication providers’ strategy. A few pockets here and there will start failing but, all and all, only new services will be affected. Where it gets interesting, however, is when new offerings start making their way onto the Internet.

At the current time, the US is already starting to lag in broadband penetration. This will become a bigger issue if the telecommunication providers have their way as they will probably start moderate increase in the basic price of broadband access. Some may consider this view alarmist but history tells us that basic rates on phone service have generally been increasing, which is interesting considering the complains about competition forcing companies to lower their rate. The same increase in rates has been true on the cable side of the equation, where rates of service are slowly moving up.

As price is one of the major levers in increasing broadband adoption, such rise in prices will only slow things down. Of course, it may not be a point of concern until one considers the global marketplace. Unlike the United States, other countries are rapidly moving to increase broadband adoption and the speed of broadband lines altogether. What that will result in is a greater capacity to create and develop next generation applications that they will then be able to resell to the rest of the world.

We’ve already witnessed the rise of foreign companies establishing themselves almost overnight as major player with the recent appearance of Skype, a company that was born outside the US borders and rapidly acquired a following that made it worth several billion dollars. This wealth generation happened outside of the US because broadband was cheaper and more accessible there. I’ve also recently seen offerings by a couple of non-US companies that may follow the same curve and I am getting concerned about the US ability to compete if bandwidth is not widespread, increasing in size and inexpensive enough for all.

Restrictions on broadband access and degraded (or uncompetitive speeds) may ultimately represent a major Achilles heel in the US ability to compete on the global stage.

Long Term Impact

But what if…

John Gilmore, prominent Internet activist, once said

The Net treats censorship as damage and routes around it.

Extending the approach, one could start wondering how the net would work around censorship at the source (which is basically what limited access could become).

Enters the concept of Mesh Networking. In a mesh network, computers can work in a peer to peer fashion to connect to each other. One could envision mesh networks being created out of thin air (using wireless Internet access card) without having to go onto the lines of the telco providers. Of course, the issue would still be in terms of traveling over long distances to ensure that sites that are located in far away locations are still accessible. This problem could be solved by some of the content providers themselves, who could enter in some form of social contracts amongst each others agreeing that they would carry each other traffic back and forth, bypassing some the last-mile telco providers in the process. Under such a model, Google’s data center would allow for amazon to use their bandwidth and vice –versa, Microsoft or Yahoo would allow each other similar rights of way and so on… As they all operate large facilities, they could cover a substantial portion of the US public and bypass the telcos all the same.

Under such a scenario, people would start abandoning the restrictive networks offered by phone and cable companies to access the more free and open network offered by the content providers. The result would be an eventual displacement of the telco providers in the long run and, due to probable resentment fostered in the process, an evaporation of any revenue from their other services as those would probably be tied to line access.

Conclusion

If Net Neutrality goes, US competitiveness will be affected negatively and will result in more new wealth being generated outside of the US than in the US. Furthermore, in the long run, an overreach could result in people abandoning the telcos altogether, if Mesh networks take off.

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

It seems every time Apple or Google introduces a new product, the buzz is high. For example, Apple recently introduced a $350 speaker and, while the reaction was more tepid than it has been for other Apple products, no one seem to point that the emperor was looking very very naked. Yet, Microsoft keeps throwing out new products and few people seem to be very interested (no matter how Scoble tries to browbeat us into thinking of Microsoft as cool).

Similarly, today, Google introduced a finance section that mimicked much of what yahoo! finance has been doing for years. It has a couple of nice AJAX-based features but, all and all, it’s not enough of an improvement to be considered like something that could potentially dominate the tech news cycle. And yet, every major tech pub or mainstream publication has covered the release.

why?

Trying to divine the source of coolness

What Google and Apple seem to have understood is that there are ways to make oneself look cool. I’m going to try to lay out some of the things I’ve seen (and I hope that others will chime in in the comments):

Rumor Mill

First, let the rumors float or give the appearance that you don’t want rumors spreading. Google Finance has long been a rumored product (as is Google payment, for example) but no word ever came out of the company about their intentions. In fact, Google is relatively stingy in terms of providing advance information about their products. They have learned to let the rumors run wild, leaving their competitors tearing their hair out trying to divine what Google will do next.

Apple takes a different approach to this. In the past, the company has been relatively ruthless in its attempts to shut leaks down. However, it seems that, when leaks are presenting compelling products and the company doesn’t really have anything to announce, Apple is happy to let the rumor mill run wild. So, before the release of the iSpeaker, uh, iPod Hi-Fi, Apple did not crack down on rumors about a new video iPod.

The two approaches speak to two different traits: one is to be extremely secretive about your action and the other is to let rumors go wild as long as they paint a picture of your company that is far cheerier than its reality.

The one feature

When selling technology, there are two publics to serve: the early adopters, and the general public. The early adopters are a fickle bunch but they can have some influence on the general public. So giving the early adopters one feature that they will like is an important feature of creating good buzz. Similarly, when dealing with the general public, emphasize the one feature that makes your product different. It doesn’t have to be something that is actually innovative (many companies were making MP3 players years before the iPod; many companies have offered services (other than search) which did what Google did in categories like mail, web hosting, classified, news, etc..) but it has to be presented as such. The early adopters may groan but they are eventually drowned out by the masses.

Thus, Apple did not release a featureless MP3 players without a screen, they released the “Shuffle” which allowed people to get a little more randomness out of their music collection. Or Apple didn’t release a $350 speaker, they release a Hi-Fi system that will work with an iPod (iPod sold separately). Similarly, Google did not release a Geocities rethread, they released pages, a cool online web editor and page hosting service. They did not release a me-too version of finance: look at the cool graphs they have.

I may sound a little cynical in that last paragraph but I believe it is this kind of cynicism that infuses the marketing of cool products. They may not be the top technology in the market but they are different. And emphasizing that they are different gives a chance to the users to feel like they, too, are different.

Cool by association

The next item on the list, in terms of generating buzz is to create an appearance of exclusivity from the get-go. Thus Apple does not complain too much when the police report rise in theft of iPod, due to the high visibility of the white headphones (see, our product is so popular, people steal it). Similarly, Google did not offer a free web-mail service for all, you had to receive an invitation.

By creating a certain level of exclusivity or belonging to a certain tribe, Apple and Google have managed to go beyond the product. They’ve created an aura of cool in being associated with them. When a new product comes out, you have to check it out or you will be out of the loop. The trend folds on itself, ensuring that future product launches benefit from the buzz of previous product launches. Over times, the duds are forgotten, and the companies are seen as innovative.

Look! Feel!

One of the other things to consider, when creating some level of buzz is the fizz and whiz of look and feel. Apple is known for designing beautiful computers (in the mainstream PC world, only Sony puts as much thought into how their computers look). The energy they put into the design allows them to bypass some of the technology issues that other vendors would encounter.

Similarly, Google has become an expert at using AJAx for their interfaces. As a result, new products generally look more polished than the competition. In the case of Finance application, it was interesting to see comments by people in the financial space on the performance of the product in terms of delays giving stock quote prices, etc.. However, few users would drill in and discover that stock prices were about 20–25 behind, or that

What value does buzz have?

At the end of the day, though, much remains to be seen about the value of such buzz. While Apple generates a lot of buzz about its computers, it still only retains between 5 and 10 percent of the market. Similarly, while Google has generated much buzz for all its new products, its bread and butter is still revenue from advertising on the search engine. So the question that still needs to be considered is whether buzz has value beyond the introduction of a new product and what that value translates to in terms of real dollars.

Tristan Louis is the founder and CEO of Keepskor and writes the influential tnl.net weblog, where this was initially posted under the title Building Buzz. 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.

TNL: so the rumors are true: Webjay acquired by Yahoo! You should post it on your blog.

Lucas Gonze: That’s right. It turns out that when they sign up new people, y! makes them put on this pointy hat that sorts them into “houses”. This makes no sense to me, but it turns out that I am “hufflepuff”

TNL: Hehe… stay away from Slitherins

Lucas Gonze: They’re over in the DRM group.

TNL: Tell me the reason for this acquisition.

Lucas Gonze: The point of it is playlists. It’s a sign that Y! takes playlists seriously. The point of playlists is that they are to internet media what RSS is to weblogs and HTML is to browsing. Playlists are the one vehicle for timed media; if it has an intrinsic sense of time, it’s a playlist, that’s an important category of functionality. Now, aside from Webjay and XSPF, the action is all over on the iPod.

TNL: So, if I understand you well, playlist + MediaRSS + content = new form of distribution channel?

Lucas Gonze: that’s about right. From the audio and video perspective, the meaning of playlists is that they’re the container format for the internet. CDs are over; mixtapes are only an analogy; Radio, television, movie theaters — not internet. So Webjay and my other playlist work is what Yahoo is about with this acquisition

TNL: If I understand well, playlists are somewhat of a reintegration item. Yahoo! is looking at them as a way to tie all the disparate bits that have come out of the breakout into podcasts, independent tunes, movies, shows, etc… to resort things into channels?

Lucas Gonze: That is beautifully said, Tristan. I agree with that, except that reality is not quite as elegant. The point of this work is to create a truly healthy and robust internet media industry but one which is not just a transplant of the old ways of doing things. The new industry is going to be native to the internet (the playlist is a native format).
Playlists do resort things into channels and they do make possible all the sort of goodness we’re used to with weblogs — like Technorati and Del.icio.us — with multimedia Examples of the kinds of goodness I’m talking about:

• Interactivity wide open; anybody on the internet is a full participant
• Implementation wide open; anybody with the chops can write programs which contribute to the ecosystem
• and interoperability; anybody should be able to author content which anybody can render

TNL: This sounds dangerously like a lightnet. You seem to be offering a world that is widely open, while all the big portals are looking at locking things up.

Lucas Gonze: I think that the place we’re going is to a media industry which is perfectly at home on the internet. Given that I’m here to make money for Yahoo, it’s fine to lock things up by doing such a great job that users would be crazy to use any other software.

TNL: You mentioned interactivity as a key feature of playlists. Do you think that playlists merge multimedia with social software? And, if yes, is that a direction Yahoo! plans to take it into?

Lucas Gonze: That’s exactly the value. Social software is not an empty trend. It’s central to the value of the internet. So the question with regard to media is how do you make social media? How do you make songs which anybody can get inside of and interact with on their own terms? To some extent that’s what playlists accomplish.
About whether that’s the direction Yahoo! plans to take it into, I can’t speak for Yahoo!, given that I’ve only been an employee for about 45 minutes.

TNL: So what are you going to be doing at Yahoo! ?

Lucas Gonze: There’s a spacecraft which crash landed in the desert. My job is to investigate the dead lifeforms and attempt to make contact with their homeworld. But that’s off the record. On the record I can only say that we’ll be building best-of-breed internet-native social-software with tags.

TNL: can you throw a couple more buzzwords in there?

Lucas Gonze: I can enable that.

Lucas then had to run off but I wish him much luck on this venture. The obvious value of something like WebJay to a company like Yahoo! is in the social aspect of sharing multimedia. I believe that the real value, beyond the core tools being acquired in the organization and sharing of digital media. Over the last year, Yahoo! has been acquiring companies that relied on the wisdom of crowds to organize content of various types (del.icio.us for bookmarks, flickr for pictures). WebJay nows fills that space for music and could probably easily be extended to support other media types. In that sense, Google is now taking an early step in terms of merging social software and multimedia.

There are many opportunities in that space: Much as Flickr has shown that user-generated and organized pictures are a good way for people to share this type of media, something like WebJay could extent from sharing your music collection and/or tastes to an eventual basis for sharing larger media files (like videos of the family).

The tool also allows for auto-discovery of content: point it to a URL and it will find any songs that’s linked from it and organize them into an easy to use playlist. This could have some great implications for podcasters as it provides and easy tool to create archive pages.

Beyond the sharing and auto-discovery is also the openness of WebJay. What is most astounding, when you look at it, is how open it is. The system gives you the direct URL of the files that are shared, even though the files themselves are not stored on WebJay itself.

Update:

It’s now official.

Tristan Louis is the founder and CEO of Keepskor and writes the influential tnl.net weblog, where this was initially posted under the title Yahoo! acquires WebJay. 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.

Voice Over IP

The big surprise here was the acquisition game. When I made the predictions last year, i thought that the acquirers would be larger telcos. However, companies like Ebay and Yahoo! have been playing the acquisition game, looking at telecom space as a feature to add to their product set.

It does, however, show the rise of European players in the US telecom market. Skype was clearly a European player that was seen as a major player in the US market, which explains the acquisition by Ebay.

Asterisk also experienced a banner year with deployments increasing in the small and medium enterprise market. It has not yet broken into the large scale enterprise market so I get only half points for this prediction.

Entertainment Convergence

The convergence I predicted in the post is now in full swing. the introduction of the Xbox 360 as a convergence device and the rise of the video iPod as a way to move television into the arena of small consumer electronics has turbocharged the space.

While MP3 has not yet become the standard for mobile phone, it is starting to emerge. The disastrous release of the Motorola ROCKR has probably slowed progress in that area but I still content that it will happen in the future. Pass on this one.

Meanwhile, the prediction that the movie industry would start suing is starting to come true. They’ve started with a campaign trying to convince people of the evils of illegal downloading. However, the MPAA seems to have learned, to some extent, about the disastrous effect of suing one’s customers and is being careful to not follow in the footsteps of the RIAA.

Also as predicted, legal downloading of television shows is happening. It came from an unexpected source in the form of Apple, which is now taking the formula it applied to music into the rest of the space.

The decision by both XM and Sirius to offer a combined solution that includes both Internet streams and satellite feeds in the same package is following my prediction that radio is about to be upended.

The rise of user-created content is also one of the big stories of 2005 and I believe it will continue through 2006. While no star has broken out of the podcasting and videocasting world, I believe we’re on the cusp of seeing this happen. On the video end, I believe rocketboom will be the first star to break out. Their recent announcement of a partnership with Tivo is just the beginning. On the podcast end, the space is getting more complicated: the entry of the mainstream players into the market could act as a buffer, keeping new players away or at least protecting the status quo.

Business

Large mergers did indeed take the forefront in the 2005 year, however none of the mergers I predicted actually happened. A lot of money went into merger and acquisition budgets and has increased greatly in 2005.

Also impressive is the fact that many of the smaller players were the target of acquisition. It seems the new exit scenario for web 2.0 companies is not to go the IPO route but to find a larger company that will gobble you up.

Apple

This one is way off. Most of my predictions were off base: Apple did introduce a video player, to critical and consumer acclaim, and an iWork product suite, but they did not introduce any photo camera, a recording player, or a way to send images straight to printers. Their partnership with a phone company (Motorola and the ROKR) was fairly disastrous, showing the company still prefers going at it alone than trying to partner up.

Development

Service oriented architectures, trust and security did take to the forefront this year. Meanwhile weblogs and content management systems have not merged yet. However, more and more large companies are starting to take a look at weblog software, with RSS become a major distribution channel. This trend will continue to accelerate into the new year.

Personal

On the personal front, I made a commitment to blog more often. While it looks like this commitment will not come true (I didn’t create more entries), it comes with a substantial disclaimer. This year, I tried to focus on longer, more analytical types of pieces. My decision of doing it that way was largely due to a decision to try to add to the overall discussion instead of rehashing what other people have been saying. The interesting thing is that this approach has actually resulted in more readership. You don’t have to blog a lot to get people to read you; you just have to craft quality blog entries.

Tristan Louis is the founder and CEO of Keepskor and writes the influential tnl.net weblog, where this was initially posted under the title 2005 Predictions: Keeping the Score. You can follow him on twitter here or receive his weekly newsletter by subscribing here.

Framing the debate

The discussion centered largely around the Google Print Library Project and Google’s decision to scan books without first asking for authorization from the copyright holders. They do content, however, that they will remove books from their index if the copyright holder asks them to do so. In the last few months, the Author’s Guild and the American Association of Publishers have sued Google, alleging violations of copyright law.

Meanwhile, a separate effort set up by some of Google’s competitors (notably Yahoo! and Microsoft) and called the Open Content Alliance has taken an opt-in approach to scanning copyright holdings, including only content that is no longer under copyright protection or content that has been expressly authorized by the copyright holder. This effort has not been sued by the two groups.

Private vs. Public

What is interesting here is that much of the debate really centers around an issue of public vs. private. Google is really creating a private holding out of content initially created by other people. While I initially was on the site of Google when I first heard about this debate, I am starting to wonder whether their position is correct. While it is a good thing that Google gives access to a way to search content which was not previously searchable, why is it OK for Google to not share that content with others? Why is it that they are not joining the Open Content Alliance and sharing access to content they have created? Why is it that they are creating a walled garden around content they did not create and only allow interaction with that content through Google? Those are questions that Google has not answered and need to be answered if we are to trust the company’s unofficial “Don’t be evil” motto.

However, this is an issue that goes far beyond books when you start thinking about it. Google has largely been building a reputation based on its ability to search various types of data, assuming that the copyright holders were allowing them to do so. I first looked into that issue about 5 years ago Deja News put out the “For Sale” sign, which was eventually picked up by Google. What is interesting is that Google needs data. Without it, Google is useless: the value of a search engine is related to how many assets it holds and how well it can organize them. This is why size does matter even though some now try to claim it no longer does.

I would go as far as extrapolate that this is the biggest dilemma for most web 2.0 companies: as more and more of them rely on system where the data is almost as important as how one interacts with it, they are found starving for data. However, they have to balance that with the ideal of being more transparent and share that data with other entities. The dilemma then becomes how to keep a private set of data in the public eye while keeping the public from stealing and/or misusing your private data.

I asked the panelists whether the issue was that Google was turning the author’s data into private Google property and whether Google joining the Open Content Alliance would solve the problem. David Drummond, who was there representing Google did not answer the question. Allan Adler, from the Association of American Publishers, stated that they would drop their objections (and thus potentially their lawsuit) if Google were to follow the established principles of the Open Content Alliance. In order to decipher that statement, I went back to the OCA’s website and looked for what those principles were. They are are follows:

• The OCA will encourage the greatest possible degree of access to and reuse of collections in the archive, while respecting the rights of content owners and contributors.
• Contributors will determine the terms and conditions under which their collections are distributed and how attribution should be made.
• The OCA need not be obligated to accept all content that is offered to it and may give preference to that which can be made widely accessible.
• The OCA will offer collection and item-level metadata of its hosted collections in a variety of formats.
• The OCA welcomes efforts to create and offer tools (including finding aids, catalogs, and indexes) that will enhance the usability of the materials in the archive.
• Copies of the OCA collections will reside in multiple archives internationally to ensure their long-term preservation and accessibility to all.

The last few words (“and accessibility to all”) are particularly interesting. These, I believe, may be a large part of the reason Google is not going to join the OCA.

In a way, Google is appropriating other people’s work (the actual content of the books) and creating a private property around it. Had Google created the content or provided the tools to do so, they might have a claim to being part of the creation. However, it seems that, in scanning the content, they are appropriating content which is not rightfully theirs without first asking for authority to do so. That can’t be right.

What price for those rights?

It is interesting that Google has wrapped its argument around the Fair Use doctrine as the copyright office seems to clearly state that one of the factors to consider is

the amount and substantiality of the portion used in relation to the copyrighted work as a whole

The reason that is interesting is that it points to an issue in terms of whether they are infringing or not. Considering the fact that they do have to copy the works in full in order to be successful in their undertaking, it seems that they would indeed be in infringement under a strict reading of that section of Copyright law.

One of the items that were overlooked by most of the media coverage is the question of price for the rights. Larry Lessig, during an exchange with Nick Taylor, of the Authors Guild, stated that he feared that the Author’s Guild and the Association of American Publishers would eventually settle their lawsuit with Google. This fear is well grounded when one realizes that the majority of lawsuits are settled out of court but it gains extra weight if there is a potential that Google will lose. To understand Lessig’s fears, however, one has to go one step further and start looking into the effect of such a settlement. First of all, Google is rich (as of this writing, Google had a market capitalization sitting north of $100 billion); There is nothing wrong with that, except for the fact that they can pay a lot more than other companies could. If they were to settle with the authors and publishers for a lot of money (which is what the receiving parties will be pushing for), they will create a precedent whereby rights that previously were available for free will now have a fairly hefty price tag.

This is not only bad for people trying to develop new businesses to compete with Google but has a potential for being bad for democracy in general as it might create two different groups in a society: those who can pay for access to certain content and those who can’t. In the long run, that sounds like a pretty evil thing to me and this is, once again, where the need for a system that is accessible to all and collections that reside in multiple archives are an important pre-requisite. If the authors and publishers are serious about being remunerated for their work, they are going to have to play this one for the long run. What it means is that settling is not an option! They must see this case all the way through to the Supreme Court of the United States. The reason this is necessary is that, if they settle, they change the negotiation from one where they are of equal weight to an asymmetric one where Google has all the power (because it keeps the access locked down). In the future, Google could decide what and when those authors and publishers have a say in that relationship. This is very dangerous. In a way, the relationship is one that fits a prisoner’s dilemma scheme nicely, showing that the only solution is to keep fighting:

It is interesting to see that there is really no room but to fight. In a weird way, Google has become its own anti-thesis, being evil as a direct result of its own actions. Because, in order to protect its own economic interest, it must keep a walled garden, Google is stuck in a position where it will have to negotiate rights or lose the right to go after print. From the Google standpoint, the decision is to get one party to settle and leverage that into a position of strength to force the other party to settle. Once a settlement has been accomplished with both parties, however, Google will have established a price tags on rights. Because of that price tags, many parties (whether individuals or companies) will no longer be able to play in that space. Many could debate whether this is intentionally evil or not but few can deny that it creates an evil state of affairs.

And what about CC?

A lot of this discussion, of course, cannot happen without taking into Creative Commons into account. I was surprised that Lessig was not making more of a case for the CC license to the publishers and authors. However, it was interesting to see him grilling Allan Adler on what constituted fair rights. Adler took a very evasive approach to dodge the question, leaving it absolutely unanswered. It is, however, an important question that needs to be dealt with if any resolution is to come.

One of the possible compromise would be for Google to agree they will no longer force an opt out model in exchange for a blanket endorsement of CC by the publishers and authors. Because CC licenses has a number of variables, it might allow some speeding up of the process in terms of willing to grant rights. This would also greatly benefit the Open Content Alliance project and thus ensure that content is widely shared and distributed while allowing content authors and publishers some level of control over what rights they would give away. The funny thing is that this may, in the end, be the only way out of the mess Google has created and that no one else seems to have suggested it.

Tristan Louis is the founder and CEO of Keepskor and writes the influential tnl.net weblog, where this was initially posted under the title Copy and Print. 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.