the reflexions insider

Google is full of really smart people working on really hard problems. This is nothing new. Indeed the image of brilliant young engineers working on game-changing new products has come to define the company’s identity. What’s surprising to me is Google’s relative lack of significant innovation in recent years on its bread-and-butter product: search. Recent rumblings indicate that this may start to change.

The company is understandably hesitant to tinker with its core product, which some analysts estimate generates over 90% of its total revenue, especially given its most recent quarter which exceeded even the most optimistic expectations (in a recession, no less). But the sands are shifitng, and the sheer size of Google means it will be hard-pressed to compete with smaller, more nimble competitors who are starting to get attention, like Powerset and Twitter.

A recent article at Google Watch suggests that Google sees its future in the semantic web, a collection of standards and technologies that seek to deliver more meaning and structure to the web’s content but have largely languished due to a lack of widespread adoption. From the article, Google CEO Eric Schmidt is recently quoted as saying:

“Wouldn’t it be nice if Google understood the meaning of your phrase rather than just the words that are in [...]

Like the flying car, teleportation, and artificial intelligence, the concept of micropayments has been espoused for years by some futurists — and many crackpots — as not just a good idea but something that will do nothing less than transform society. Others have been less than thrilled with the idea. But what has happened over the last 10 years or so since real investments were made (and almost without exception, lost) on the concept is startling. Micropayments are fast becoming a part of the fabric of the commercial internet, although in very practical context and mostly due to two companies - Apple and Amazon - who are competing for the future of digital music sales.

The comic artist Scott McCloud made a name for himself during the early 2000’s with unique and visually compelling arguments in his own web comic form for why micropayments were the future of at least one type of digital content: web comics, drawing the ire of everyone from Clay Shirky to Tycho of Penny Arcade (many original links of what became one of the web’s legendary flame wars are dead but see Wired’s coverage of McCloud from 2001 here). Micropayments - a simple and innovative idea in principle if not in practice - has been one of the [...]

(Image by nswlearnscope via Flickr)

Recently the ever-snarky tech/finance blog Silicon Alley Insider held a contest to propose how to fix what they called Digg.com’s “broken business model” (”broken” because Digg lost $2M on $6.4M in revenue, a staggering loss by any standard). The winner would have his or her proposal (and resume) delivered personally to Digg founder Kevin Rose and CEO Jay Adelson. The winner was Keith Cowing, an MBA student at Cornell, who suggested among other things that Digg generate revenue by selling sponsored posts on the home page and data to marketers about its users. Probably something Digg should consider but it’s hardly a revolutionary thought and not exactly the kind of model that will transform underperforming web 2.0 properties into revenue generators.

By and large the “web 2.0″ crop of business models has been disappointing. There are no shortage of examples. YouTube, purchased by Google for $1.65 billion, has a revenue model that’s “so secret, even Google doesn’t know what it is.” While Google doesn’t publish financial information about YouTube, its impact on revenue has been [...]

Consider this: Twitter didn’t exist three years ago. YouTube didn’t exist four years ago. And Facebook, the second most-visited website in the world on Christmas Day, 2008 (after Google), was started as a half-serious side project by Mark Zuckerberg in his dorm room less than five years ago. All of these websites were effectively created after the (now oft reviled) term “Web 2.0″ was coined by Tim O’Reilly and John Battelle in 2004.

By any standard, profitable or not, these are enormous web properties. And the timeline above demonstrates how rapidly the web landscape shifts and how fickle are its users.

Below I’ve identified several trends that I think will make an impact over the coming months and into 2010. This isn’t meant to be a “prediction” list per se, but an attempt at identifying how the current dynamics of social media will play out. Enjoy.

Twitter will launch a commercial subscription service that will generate revenue by letting companies use the platform to connect with customers. It will receive additional buyout offers but will remain independent for at least another year. I believe its investors are convinced that it’s worth more than their potential suitors think. And I believe they’re right. But having zero revenue is not sustainable.
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Razorfish recently released a presentation entitled “Portable Social Graphs - Imagining Their Potential.” You can download it here on Slideshare. It’s an insightful and thought-provoking look at what the next few years might hold as social web applications take their first steps toward meaningful integration - sharing profile data, relationships, and even authentication across the traditional “walled garden” model of separate and distinct platforms.

This concept isn’t entirely new. Standards like like “friend-of-a-friend” (with awkward moniker “FOAF“) have attempted to provide the mechanisms necessary to share structured social data in an intelligent and contextual way. But historically, proprietary social networks have failed to embrace open standards and have declined to enable their users - and competitors - to use their members’ data, arguably their most valuable asset.

And perhaps the most useful aspect of FB Connect is that it simply saves the user time. Blog platforms and comment systems like Disqus have already plugged in to FB Connect so that you can comment on a myriad of blogs without having to register an account for each one. That yields a real, tangible time savings for a huge audience and lets users carry their identity with them from site to site with minimal effort. The time saved is the [...]