the reflexions insider

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.

1. 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.
2. Microsoft will increase its stake in Facebook at a far lower valuation than its previous purchase. It’s one of MS’s only opportunities to reposition itself in the quickly maturing domain of social media. As a result, Facebook Connect will draw further comparisons to failed MS Passport although it will be integrated with several high profile websites and while it will become the dominant “single sign-on” solution for many websites, it will remain largely confined to blogs and discussion forums. MS will integrate Facebook with Windows 7 in a move that will fall somewhere between feeling-around-in-the-dark and spot-on brilliant.
3. While YouTube will remain the dominant user-generated video site, the poor quality of user comments, its new measures to discourage anonymous postings, and competition from other sites like Hulu.com will diminish its overall relevance as a destination for online video. As much as we all love homemade videos of cats, episodes of Family Guy and 30 Rock will simply draw too much of a crowd and too many advertising dollars.
4. Yahoo! will be acquired in the wake of Jerry Yang’s departure at a fraction of Microsoft’s original offer in 2007. It will engage in further layoffs, and will see its stock price and overall relevance diminish further.
5. A deepening cash flow crisis will force The New York Times Company to announce significant cutbacks in staff and production and will be forced to liquidate significant assets like the Boston Globe, About.com, its 17% stake in the Red Sox, or its own new headquarters (which it recently mortgaged and could lease from a buyer to free up $600M in cash). Get ready for a weekend-only print edition and possibly no print edition at all.

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