Web 2.0 And Beyond | Startup Addict Musings

Entries Tagged as 'Web 2.0 and Beyond'

2008 Predictions from Startup Addict Musings

Web 2.0 startups precipitously funded in 2007 with “me-too” syndrome will join the growing dead pool in 2008.

Startup Addict Musing predictions:

1. I will finally get StartupAddict 2.0 launched (startupaddict.com) by Jan 31. 2008 with a 500K subscriber user-base goal by the end of 2008.

2. Web 2.0 term will die (or at least graduate to new jargon)

3. Battle for web-service applications and a continued shift to web OS by the big three (yahoo, Google and Microsoft). The web-service business model will continue to flourish startups.

4. Google will move into the content world rather than just be an information aggregator. This trend will traverse into many of the advertising networks. The networks will delve into content themselves and serve relevant ads. Fragmentation will continue in ad networks as in-house bias content is favored over independent content providers / publishers.

5. Online web users and subscribers will intermingle more freely between social networks through open standards and widgets.

6. Companies will monetize the built-in audiences of many email clients (gmail, hotmail) and Instant Messengers with advertising and additional social services.

7. Google will continue to strive for world domination in just about every technology business vertical you can think of.

8. Linked-In will try to go public, be acquired or revamp and monetize its’ user-base further.

Other great 2008 predictions:

Battelle always has compelling and usually very accurate predictions. Check out his 2007 prediction roundup to see how he did.

Tags: Web 2.0 and Beyond by Startup Addict

Knol and Google’s plan to take over the world.

“Your over-confidence will be your downfall.” - Luke Skywalker

“Your faith in your friends will be yours.” - Darth Sidious

“Don’t be Evil” - Google’s original mantra is put to the test daily…headline by headline of their galactic domination. Google’s recent launch of “Knol”, a competitor to Wikipedia is making huge ripples in Google’s supposedly non-bias data indexing pond. As techcrunch points out Google has gone from indexing content to being a full blown content provider themselves.GigaOm also has a very interesting take and convincing analogy pertaining to Google’s attempt to manipulate the destiny of others based on their own page rank system (PayperPost and realrank is an example of that). What is hysterical is who Om compares Google to:

Google using its page rank system to its own benefit. Think of it this way: Google’s mysterious Page Rank system is what Internet Explorer was to Microsoft in the late 1990s: a way to control the destiny of others.

Knol is an interesting animal and it may benefit the little guy in big ways. Google suggested that ads will be split with contributers (experts on subjects that create content). The problem is how Google serves the results of Knol over blogs, wikipedia and other sites. Favoritism has enter the equation some where.

One only needs to look at Google’s expansion patterns to realize the little search engine that good know much more than Search. Being a public company requires meeting expectations for growth and with wall streets benchmarks and lofty alphas ratios so high simply does not allow the company to stay in the search arena. The company would never be able to sustain the 700+ share price to remain in ideal search. The take over the world list is getting bigger and faster by the headline:

1. Orkut and opensocial (backdoor approach to social networking with a built in audience that doesn’t even know their going social)
2. Android and open handset alliance (getting in bed with the big boys and then will launch a phone of their own….they’re buying spectrum for crying out loud.)
3. Consumer Hardware - (look what it did for apple and the writing is on the wall)
4. The premier ad network for Internet, Television and Radio. (effectively killing the traditional ad agency or making them adapt under the G-umbrella)

These are but just a few of the verticals Google is re-writing the rules and dominating.

Tags: Web 2.0 and Beyond by Startup Addict

Why Yahoo should pay $20 billion for AOL.

Reading a few articles on alleyinsider regarding Yahoo possibly purchasing AOL from Time Warner for $13 - 15 billion got me thinking (clearly got Time Warner thinking). In a web world of retarded valuations Time Warner demanding $20 billion is par for the course, however here is why I might finally agree. If Facebook commands roughly 40 million users and has a going valuation of $15 billion with an unproven advertising model then check this:

According to Wikipedia and a recent AVC post AIM is boasting a 63 million user base in the middle of 2006! So let’s dare to say that it is around 75 million users today and will come with the AOL’s gigantic purchase of advertising.com. Couple that with some social services and advertising prowess (RightMedia) that Yahoo already wields and bingo…a certified a*s-kicking social machine with a user acquisition of $266 per user instead $375 per Facebook user. Don’t forget Yahoo’s existing market cap and user base would dilute the cost of the new services even further.

Tags: Web 2.0 and Beyond by Startup Addict

Web 2.0 term is getting tired

According to VentureBeat an interesting article from SiliconValleyWatcher web 2.0 is not only getting haggard but is no longer worthy of further investment from the VC community. In my humble opinion, anyone who states the web 2.0 term is getting old is just another fool sipp’in on the hater-aid.

You don’t have to call the kettle black, but that doesn’t mean you won’t eat the stew from it. Web 2.0 may be a tired term for all the “me too” startups, but it’s more of a VC escape for the 90% of investments that were roasted in the Web 1.0 days (remembered in the history books as the dot-com era). Every segment of the Internet has to possess indelible jargon in order to lay claim to a revolutionary trend that matures the Internet to the next level…graduation if you will.

Some VC money may be halting on web 2.0 investment but that is simply because the VC firm has chosen a different “fresher” name for the same investment. Let me know your thoughts on the Web 2.0 battle of the term…

Tags: Web 2.0 and Beyond by Startup Addict

Discovery buys HowStuffWorks for $250 Million

CBS isn’t the only network buying up successful web properties, Discovery is plunking down $250 million big one to connect Discovery content into the HowStuffWorks brand. Networks and traditional media companies alike are realizing the fragmentation of media continues at a rapid pace and rather than struggle for user attention why not meet users head-on in multiple mediums. Brand extension from traditional media outlets into new outlets is the only way to maintain a strong brand in a web 2.0 world. Discovery is certainly on the right track and I personally have to say the networks content is only getting better and more original. Can’t beat lobster wars or myth busters.

Blogs I stumbled across reporting the deal are ValleyWag and TechCrunch

Tags: Uncategorized, Web 2.0 and Beyond by Startup Addict

CBS buys Dotspotter for $10 Million

Gossip blogs and websites are all the rage. They generate enormous amounts of traffic and run the gamut of pop culture searches. I have blogged about CBS numerous times (wallstrip and last.fm acquisitions) as the network continues to diversify into a number of interactive and web 2.0 properties. “Content is king” and CBS continues to bet big on that platitude. $10 Million bucks for an infant site with next to no revenue is par of the course in the wake of over-inflated valuations in web acquisitions. However it bods well for a friend of my who is in this catergory and it may have just landed him some nice valuation. Take a peak at his glamor gab blog with a southern twist over at Fatback and Collards.

Paid content has the full scoop along with some sweet info about the seed angels behind Dotspotter.

Tags: Web 2.0 and Beyond by Startup Addict

Facebook application froth continues

I love the Internet and how quickly froth is created in new web 2.0 properties. I define froth as speculative investments and over-valuation on web properties. Froth is the proverbial gold rush or road to riches in search of the holy grail of acquisition. Froth is industry agnostic as well, take the Real Estate industry in localized markets through the United States for example, still reeling (like many web 1.0 companies) from too much froth and over zealous investments. It’s human nature to create froth and it is one of the more exciting business topics to track. Facebook continues to be the hot web property of choice at the moment that not only creates excessive froth but all the subcultures that are utilizing the social network.
One facebook web application worth a mention is Texas Hold’em Poker which according to paidContenthas 158,018 users. That would place each registered user (from an acquisition standpoint) worth $12.66. Remember an earlier posting that Facebook itself at a $15 billion valuation would put an acquisition cost of $375 a user. According to The New York times article that paidContent references Altura Ventures has launched a $25 million facebook-only fund for apps that are generating buzz and hopefully revenue. I compare these figures with what I’m willing to spend to acquire new customers for StartupAddict.com and I’m around $1.33 for user acquisition…..plenty of room for froth if SA ever picks up steam and hits critical mass. News Corp is still my hero for picking up Myspace at around $12 bucks a user.

Tags: Web 2.0 and Beyond by Startup Addict

Microsoft gets Google-DoubleClick cough syrup

Microsoft is a company so ridiculously successful and possesses so much cash, it simply cannot stand companies (like Google) that add any meaningful competition to the game of web domination. I came across an article in InfoWorld that totally floored me. Apparently it is okay for Microsoft to make purchases in the online advertising area with the aQuanitive acquisition for $6 billion along with smaller diversifed acquisitions like European mobile ad company ScreenTonic (oh did I mention AdECN as well). But for Google to score a nice purchase price ($3 billion) on ad powerhouse DoubleClick just won’t do for the Redmond forefather. Let’s not forget the third player Yahoo playing Pacman on RightMedia for a cool $680 Mill.

Microsoft as a result is launching an entire campaign against Google stating too much consumer privacy information and clickstream will be at stake if the M&A goes through. Now don’t get me wrong…. a valid point and one that should be investigated accordingly, but coming from Microsoft is laugh out loud funny. I mean if you look up Monopoly in the dictionary it says Microsoft. The point I’m trying to make is the online Ad market is clearly heating up and just like the traditional television networks there will be continued consolidation and a few conglomerate players in the online ad space at the end of the day. I just think that Microsoft needs to realize the web is more volatile and uncertain of a frontier than the brilliant but simplistic bridge of operating system to hardware in the Windows world.

Tags: Web 2.0 and Beyond by Startup Addict

Microsoft Faces-off with Facebook…maybe.

I debated on whether I was going to post on the Microsoft Facebook deal seeing how all the usual credibles had it covered such as Om,
Valleywag and VentureBeat. Even so, I couldn’t resist the juicy WSJ story and had to add my two cents. History tends to repeat itself and if over-valuation didn’t teach us anything in the Web 1.0 days, it will likely teach us this trip around if a social network such as Facebook sells for $15 billion (the speculated high of the valuation). It was not long ago (less than a year) various sources thought $2 billion was a little rich and now we’re between $10 to $15 billion?

Lets pop a sober pill for a second and look at the facts for rational sake.
Facebook is monetizing their traffic through advertisers and premium services like any other venture but it’s pretty hard to clear the break-even mark on $15 billion with adsense, ajax and advertisers.
Speaking of breakeven, let’s touch on that. If the influx of traffic and multi-million-user base actually paid the bills the Web 2.0 community would be a Utopia. Just imagine if 50% of the Facebook users paid $10 bucks a month and those same subscribers paid the monthly bill for 6 years…voila! Breakeven on $14.4 billion. Of course that is assuming Facebook is free of expenses over those 6 years and also assumes that 50% are subscribing (20% is probably more realistic with the rest advertising revenue). Facebook’s real revenue figures float around $150 million a year right now. No, I didn’t forget a zero.

Remember the $580 Million News Corp purchase? Facebook is clearly the better social network but Rupert Murdoch has a much better shot at profitability. Actually at these valuations News Corp could flip the social network and make a cool $10 billion.

Even “Mad Money” Jim Cramer stated Microsoft is a nice buy as a stock if they don’t do anything stupid like buy Facebook in a high froth web environment. At the end of the day I truly love Facebook and the creator’s success story. I think Mark Zuckerberg is the poster child for my Startup Addict motto “Dream Big, Be Great”…but even greatness has a price tag and $15 billion just ain’t it.

Tags: Web 2.0 and Beyond by Startup Addict

Open Platforms Abound.

Opening a Platform continues to define Web 2.0. Continually the biggest driving factor in the second generation of the web is the “wiki” style collaboration from social users. Myspace looks like it will be following suit of Facebook according to VentureBeat from an FT article. Thus allowing prosumers and developers to mashup and add to the Myspace platform. A popular move to catch a second wave of growth for these social networks. These trends are exciting to see and inevitable as the social networking giants blow past critical-mass and are asking the question now what?

The keys to the castle have clearly gone to the users in the present web. Users need to be able to personalize, adapt and make an off the shelf product or service their own. Any startup needs to carefully think about the mutually beneficial relationship being created between product/service and consumer needs. The Platform mentality needs to be thought of in advance rather than an inflexible webservice that will end of getting hacked to suit by user’s anyway. Second life is another exciting example of fast pace growth driven solely by user generated content. Linden Labs created the parameters and playground and let the users go “hog-wild”. This methodology is permeating all forms of Web 2.0 services currently and a trend that is only going to grow larger, more effect and faster paced. If a startup does not pay attention to these new wikinomics (good book by Don Tapscott & Antony D Williams) they will be out of business quickly and classified as a relic of the early Internet.

Tags: Web 2.0 and Beyond by Startup Addict

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