Google has crushed PayperPost Bloggers by taking pagerank away according to a recent TechCrunch article. I posted about Ted Murphy’s PayperPost earlier this year (now under the IZEA umbrella). Clearly, he has a right to be upset, the posts have been a great new revenue stream for entrepreneurs and bloggers trying to make a buck. The blogging posts are clearly indicated as “sponsored” and should be taken as advertorial content only.
This is a new and continued pattern that Google is showcasing in link rehabilitation in the company’s pagerank forumula. First it was the text link sales and crossing linking that made certain bloggers lose 2 - 3 levels of page rank, now Payperpost is following under the mighty hand as well. If links are procreated through monetary means, Google is watching that much is clear.
Granted this is an entrepreneur and startup blog, however you know it is the end of days when a news story about Santa Clause becoming political correct takes front page. Ho ho ho is no longer allowed because some women could get offended. Good old Saint Nick has to say ha ha ha now. If Imus in the morning got slammed for his ho comment, I guess it was Santa’s turn. The question I have is do we need to change fairy tales now too? I mean the seven dwarfs walk by Snow White every day saying “Hi-ho” “Hi-ho”. Because Snow white is not really a ho, one would assume that is a pleasant off to work song. What a world we live in.
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.
So it was only a matter of time before the new jargon would appear (MVN) “Managed Vertical Network”. Glam Media the leading provider of women content on the Internet announced their new platform network (press release). Although in all honesty Federated Media by Battelle was truly the first successful and revolutionary kid on the block when it comes to (MVN). Even Martha Stewart was using the FM principles.
What a tangled web we weave. The similarities that exist between the old synergy found in advertising firms, production companies and television networks of the late 90s and early 2000s (where I use to live and breathe) are now found in the current explosion of publishers, advertisers and online content. Startups or “migratory” businesses becoming a network or platform that facilitates publishing and advertising are potent forces. It is the sweet spot of choice and steadily becoming the cash cow of choice for big media.
Advertisers historically have always paid the bill for content regardless of the medium. Whether it be television, radio, print, online etc. The trend of online advertisings is irrefutable from past data and future data…take a quick peak.
If that is not a compelling enough reason to start a “MVN” startup then just take a quick look at the content trend. CBS has been gobbling up new media content companies by the dozens (just do a CBS search on this site for posts). Barry Diller is spinning IAC into a several properties and dealbook quoted “Web- and advertising-focused business that includes Ask.com and Match.com”. The M&A list is in orbit for 2007 in the web 2.0 world.
Where we thought there would be convergence, in fact is divergence. Where we thought would be Search and Social Networks are Vertical Search and Vertical Social Networks. The long-tail philosophy couldn’t be more proven then the current state of the Internet.
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…
Myspace, Facebook and Google’s opensocial have all made major announcements regarding a social evolution for advertising. Myspace and Facebook have announced new advertising systems that are integrated in the social networks. Facebook has more than 60 major companies already signed up for “user advertising” from Blockbuster to Verizon. Facebook’s advertising model does away with the old push model of placing ads in the user’s face and hope for the best. FB’s system allows a company like Sony Pictures to create a Facebook page and have uses interact with the page and message that are pushed out on the network to receptive or targeted users. User’s can then hold the company accountable by leaving reviews or spreading the message to friends etc. enabling viral growth of the ad. Truly an interesting concept but way to early to determine effectiveness and/or hot spots in privacy.
Discussions of a Do Not Track List continue as online advertising spending continues to surge. Behavioral advertising is in the infancy and a certain level of checks and balances need to be put in place to properly protect privacy. It’s all about free will…as long as a user knows about it or has the option to opt out, life is good. Anne Zelenk over at GigOm has some interesting comments regarding becoming Adfriends.
Opensocial has been getting big traffic since Google’s announcement into the social arena. Myspace along with numerous other social heavy weights have thrown their hat into the ring. I scan a number of blogs on a daily basis and I truly wish I could remember where I saw a graph of Orkut and Myspace teamed up (in terms of traffic) compared to Facebook. I’m sure a blog in my blogroll lineup is the culprit but I cannot think whom? Anyway, it portrayed a crushing blow to the 40 million users of Facebook. I employ you to take a look at how truly amazing opensocial will be for both Google and social networks. Take a look a the campfire 1 discussion below Google orchestrated regarding Hi5, Flixter, Slide and other case studies. It is as beneficial for the social networks as it is the widget makers. This will create such a drastic change in privacy settings and advertising that no one has even had time to think about it yet.
Opensocial - You got to love Google. The company has become a poster child web startup soaring past 700 bucks a share and has a market capitalization bigger than coca-cola and McDonalds combined (now that is serious). If you’ve been following the postings in this blog or the opensocial posts from TechCrunch, VentureBeat and John Battelle then you know Google is in the social arena.
As a social entrepreneur I see this as more of a boon than bust. Take StartupAddict.com for instance which currently is riddled with broken code from our first wave of programmers (not much longer) and the 2.0 version based on a drupal core is going to be live the middle of this month. I am salivating at the possibility of taking these open social API’s for a spin and have live by Christmas in a 2.x release. If I’m feeling this way as a newbie, Imagine how the other big social networks and social media companies with an established user base like Bebo, myspace, slide, rockyou feel.
One of Google’s spokesperson said “There will be plenty of revenue opportunities for everyone”. This is great news….but any social network with little to no subscription model in place depends on advertising as the only source of revenue to subsidize the growth of the company for bandwidth, hiring etc. So Google can’t be giving away the advertising farm totally, maybe just a reincarnation of adsense socially (so to speak).
