Ad Networks Are the New Dot-Coms

By Saul Hansell

 

It’s no longer enough to have a Web site. Blog software let absolutely everyone into that club. Now the way to fame and riches seems to be starting an advertising network.

In just the last two days, Martha Stewart Omnimedia, BuzzMetrics and ZoomInfo all said they would start ad networks. Most significantly, Facebook is preparing to start one that draws on the information it has about users.

Meanwhile, the existing networks are expanding. AOL just agreed to buy Quigo, which helps publishers sell advertising on their own sites. And Google, the biggest ad network by far, said it would start putting ads into videogames.

Martha Stewart has started Martha’s Circle,” a network that includes Apartment Therapy, 101 Cookbooks, Style Me Pretty and other sites that are “Martha-like in their aspirations and interests,” Wenda Harris Millard, the president of Martha Stewart Omnimedia, told Advertising Age.

For Martha, this is a way to leverage the company’s existing sales force and attract more attention from marketers because it can offer
them more reach.

Other sites are morphing their own business models to tap into the ad network craze. For example, ZoomInfo, a company that started out as a search engine for information about people, is now planning to use the data it gleans about people in a targeted ad network.

BuzzLogic is going the other way, trying to use software originally designed to help marketers find influential bloggers for advertising purposes. Its new ad network is meant to put advertisements next to discussions related to what they are trying to sell. Mortgage lenders, for example, can advertise on blogs talking about home buying.

Prediction 1: We’ll see dozens more ad networks announced in the next six months.

Prediction 2: 95 percent of them will be gone in two years.

Everyone who has ever sold advertising says that buyers like things to be simple. And the plethora of competing networks and technologies is anything but. Google has already proven that there is a powerful network effect to advertising. The more buyers and sellers in one place, the better prices for all.

Yes, there are some who argue that the rise of advertising exchanges, like Yahoo’s Right Media, will help make the market efficient for lots of players. That could be, but I’ll still stand by the idea that Google and a handful of others will end up with the vast bulk of the ad network business.

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Dial Google for Mobile Social Networking

By Clint Boulton

Google is expected to announce software and services that will enable handset makers to bring new phones to market by the middle of next year, the Wall Street Journal reported Oct. 30.

The news, in which the Journal cited people familiar with the matter, is a variance from original reports claiming that Google wouldn’t shed light on its mobile plans until next year.

The Journal said Google would not release an actual phone, but rather a software operating system and likely some mobilized versions of popular applications.

IDC analyst Karsten Weide agreed, noting that he is expecting something fairly pedestrian, a showcase of Google’s online applications such as Google Maps, YouTube and Gmail for the mobile phone.

“They’re going to open it so other developers develop applications on it and then they are going to sell advertising against that,” Weide told eWEEK.

Google declined to comment on or confirm anything in the Journal story, but mobile versions of traditional Google Apps will likely be the tip of the iceberg. This is because Internet companies far and wide are laser-focusing on the mobile and social networking markets to find green fields in online advertising.

The real forward-looking services are intersections of mobile and social networking services, and Google knows this. Consider that Google has purchased three mobile social networking startups Dodgeball, Zingku and Jaiku in the last two plus years.

Dodgeball, a mobile social networking startup purchased in May 2005, lets friends find each other from their mobile phones using location-based services.

Zingku and Jaiku, acquired this past September and this October, respectively, are mobile social networking service providers that offer the brightest hope of success for Google if it can seed its phone.

Zingku lets users create and share invitations or “mobile fliers” using standard text messaging, picture messaging, instant messaging and Web browsers.

For example, merchants, which Zingku defines as “anyone who has something to promote,” can create interactive “mobile fliers” and then e-mail a “zing-code” to their customers who opt to pull the flier to their mobile phone. The customer can zing the flier to friends they think may be interested.

Jaiku’s software enables microblogs, or short text messages used to update those in a social network on what’s new.

These applications might not seem like a big deal now. After all, of the millions of people who own smart phones, how many of them have even discovered Dodgeball, Zingku and Jaiku?

But that is immaterial. As we’ve seen from MySpace, Facebook, LinkedIn, Twitter and just about any other social network, the user pick-up will be viral. If Google can just put a little bit of its cachet and marketing oomph behind these services, people will use them.

IDC’s Weide agreed that there’s no reason why Google’s mobile suite could not at some point in time include social networking functionality or services. Of course, rolling out the applications is the easy part and something Google has proven its mettle at.

What will happen if Google bids on spectrum as it has suggested? What if it can’t compete with the phone carriers, which are loath to allow their devices to any applications and services? What toll will privacy concerns have on Google’s bid for the wireless market?

Weide told eWEEK there is speculation that Google will get in bed with Apple for its wireless network strategy. Hmmmm. Is that why Google CEO Eric Schmidt landed a seat on Apple’s board?

All quipping aside, Googlers love Apple. During a keynote on innovation at Interop New York on Oct. 25, Matt Glotzbach, director of product management for Google Enterprise repeatedly alluded to Apple’s history of innovation, from the iPod to the iPhone.

What company wouldn’t want to duplicate Apple’s iPhone success coming into the market, selling millions of phones? Apple is a tough act to follow in the consumer space, so you can bet Google will put forth its best effort.

But will it be enough?

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Influential Customers Think User Reviews are Planted

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According to a new study, some of the most influential consumers believe companies are guilty of manipulating reviews through other means, as well.

PR firm Burson-Marsteller surveyed 1,000 influential consumers and found that an increasing number of them believe fake reviews and positive comments left by corporations are prevalent and problematic. The study revealed that 30 percent of consumers are concerned, up from 20 percent in 2001. Fifty-seven percent said they’d be less likely to buy a product if they suspected the company paid someone to leave a positive review.

Marketers depend on “e-fluentials” — people who influence their social network’s purchasing habits and decisions — to interest others in their product. But most of these people aren’t on board with the whole compensation-for-recommendation idea. That doesn’t mean they don’t want to use their influence; they just have other motivations — such as an honest interest in offering helpful information.

Ame Wadler, chief strategic officer at Burson, says companies can feel free to leave reviews, so long as they do so honestly:

“There’s no rocket science here: transparency matters. Those entities that are the most transparent and say, ‘It’s us and we’re proud of what we’re saying,’ do far better than those organizations that don’t reveal themselves.”

Peer Networks Like Sermo Point Ways to Profit from Knowledge

We can categorize social networks into two extremes: monoliths like Facebook that seek to be everything to everybody, contrasted with networks built by companies like Dow Chemical Co. and KPMG that interest mostly their current (and possibly former) employees.

Even as Facebook CEO Mark Zuckerberg continues to imply that Facebook is worth every bit of its $15 billion valuation, he offers few guideposts for its long-term business plans, reports the Times Online from the recent Web 2.o Conference in San Francisco. After Facebook creates a model of what he calls “the social graph,” Zuckerberg says, “… then we can expose those people to a set of applications which will enable them to share their information more effectively.”

Fair enough. We have little doubt that Facebook will do some very interesting things in the future. But we were intrigued by the emergence of a network for physicians called Sermo.

Some 30,000 doctors use the network to discuss diagnoses and treatments with their peers. Sermo and similar networks such as INmobile.org, which serves executives of wireless companies, appear to stake out a patch of middle ground between Facebook and specialized corporate networks. They are broader than company networks yet far narrower in scope than Facebook (or even LinkedIn), with their ready-made “social graphs” for folks who share professional interests.

Not only that, but they offer more readily apparent business models than Facebook and MySpace. As detailed in a Wall Street Journal article, while membership in INMobile.org is free, members must pay to list their promotions and ads in a “marketplace” section.

Sermo is even more interesting. While its members don’t pay, outsiders like hedge funds — which are interested in tracking doctors’ feedback on topics like new drugs or other treatments — do. It just announced a partnership with pharmaceutical giant Pfizer which is designed to facilitate online collaboration between Pfizer and its members. (While financial details aren’t discussed in a press release, we assume Pfizer pays something for this access.)

While this puts Sermo in the somewhat uneasy position of protecting the interests of both its members and of corporate partners like Pfizer, it is creating a new model in which, says Carr, a network operator can sell “not the eyeballs of its members but their ideas, observations, and conversations.”

Obviously key to this model is avoiding the kind of incidents that have dogged Wikipedia, whose contributors sometimes lie about their credentials. But this is the beauty of a not entirely “open” network, especially one in which members can wreck their careers by not being truthful.

Assuming professional networks can find a reliable and unobtrusive way of vetting their members, we expect to see more of them. If nothing else, we’ll expect many trade associations to beef up their online collaborative capabilities.

Meet Your Neighbors, but Just Not in Person

By BOB TEDESCHI

FACEBOOK and MySpace struck a chord with people who want to socialize from a distance. But will people use social networks to actually meet their neighbors?

That’s the hope of at least one new company, LifeAt.com, which is putting a local spin on the social networking model. The company creates password-protected Web sites for apartment buildings and housing developments, allowing residents to post pictures and profiles of themselves, share information about favorite local eateries and gripe about slow elevators and peeling paint.

“I like the idea a lot,” said Charlene Li, an analyst with Forrester Research, a consulting firm. “Living in the same building means you tend to share the same socioeconomic background and interests, and giving people information on things like where to eat and where to shop makes it very, very relevant.”

Ms. Li said her only reservations about the idea are that its appeal may be limited to big cities, and that LifeAt could be hard-pressed to generate many local advertising sales on its own, as most local businesses are not accustomed to buying online ads. Rather, she said, it would probably have to distribute ads for companies like Google and share commissions.

Matthew Goldstein, LifeAt’s chief operating officer, said the company is only now completing its advertising strategy. For now, the company, based in Brooklyn, is surviving on the roughly $6,000 it receives from each building that signs up for the service. It does not charge the buildings yearly fees.

More than 335 buildings have joined since LifeAt began in March. About 600 more buildings are scheduled to introduce LifeAt Web sites by year’s end. The company does not currently share ad revenues with the buildings, but Mr. Goldstein said that could change.

Among buildings with LifeAt Web sites, Mr. Goldstein said, residents of 64 percent of the units have created personal pages. Property managers, who give residents login and password information, also use the sites to post news about maintenance work and vacancies.

The profile pages created by residents are similar to those on other online social networks. Users post descriptions and pictures of themselves on personal pages, along with pictures of their friends in the building. In the Marketplace section, users can post free classified ads for old furniture, appliances andbaby-sitting services, and rate local eateries and businesses.

Several months ago, Tara Brooke, a childbirth counselor who lives in a 300-unit apartment building in Lower Manhattan, posted an ad for her service, Power of Birth, on the building’s LifeAt Web site. She received so many responses that she opened an office in SoHo and hired more workers. “The ad was a lot more personal because it’s where you live,” Ms. Brooke said.

The personal connections made through the site have been more superficial, Ms. Brooke said, although she acknowledged that it has helped her become friendly with more neighbors. “I’m not single, but if I was, I’d definitely be on there looking for a date,” she said. “It has that MySpace feel to it, but it’s much more intimate because you actually know these people are within reach.”

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LifeAt is not the first to try this approach, but it appears to be the first to generate much money from it. Since late 2004, MeetTheNeighbors.org, a for-profit company based in Manhattan, has operated a social networking service for apartment dwellers.

That site, which is free, has about 15,000 users, and last year began serving residents of Boston, London and Dublin. Jared Nissim, the company’s founder, runs the site as a sidelight to his primary business, the Lunch Club, which helps strangers meet.

Mr. Nissim said some buildings have considerably more active Web sites than others, thanks mostly to the efforts of volunteers in the building who are responsible for managing the content of the site. “It may be one of the flaws of our system that it relies on one primary contact to get the ball rolling,” he said.

By contrast, each building on the LifeAt service is overseen by a company representative, who spends a few days logging neighborhood services and restaurants into the site before it makes it debut. Everything but the forum postings are screened for inappropriate content by LifeAt employees.

As with any online forum, those on LifeAt can devolve into rant sessions, which is why some property managers asked Mr. Goldstein to discontinue that part of the service for their sites. “But one developer heard the residents were just putting up a Yahoo blog behind his back instead, so they decided to keep it open so they could be proactive about things,” Mr. Goldstein said.

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Alan D. Lev, president of the Belgravia Group, a residential development company based in Chicago, recently introduced its first LifeAt site for a 400-unit condominium on North Lake Shore Drive, in Chicago. Mr. Lev said the service is well-suited to the people in their mid-20s who live in the building.

“I think it’s very important for them to be able to go on there and be able to interact amongst the residents, and see all the restaurants and places to go,” Mr. Lev said. “And it allows them to converse with the management company more easily, so there’s no pent-up anger about what might be going on with the building.”

Others have experimented with social networking Web sites aimed at city residents without intending to make money. I-Neighbors.org is a site set up by Keith N. Hampton, a sociologist at Annenberg School of Communication at the University of Pennsylvania, to study the role that Web sites can play in strengthening offline social ties.

Mr. Hampton said that I-Neighbors continues to grow, with 45,000 people now using the free service. He said, however, that people in apartment buildings generally do not pursue social connections with their neighbors.

“They’re younger people who move more, have no children and they’re early in their careers,” he said. “They tend to be less interested in the people who live around them, and more interested in their own social networks.”

The one exception to that, Mr. Hampton said, is New York, “where availability of housing makes people live in apartment buildings who may otherwise not.”

“That said, it sounds like LifeAt is having some nice success,” Mr. Hampton said. “But in terms of having an impact on the communication among residents and their ability to build new social ties, the apartment building model will have limited success.”

Source: New York Times

Blog: Skype as a social network

Skype has some 220 million users, vs. Facebook’s 40 million. About 20% of these Skypers use the service all the time. They can already message and call each other through the network. They are already able to exchange files (in fact, that capability is more developed on Skype than on many existing social networks). If only Skype made it easier for people to post and exchange photos and videos, and allowed for postings of longer profiles, it could rival MySpace and its ilk, sustained through advertising and sponsorships.

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Yahoo Tries Social Networking… Again

Bob Hof of BusinessWeek just got an invite from Mike Speiser, Yahoo’s VP of community, to join its newest social network, called Mash, which have an interesting wrinkle: Other people can add stuff to your profile. The service seems aimed at young people. Many people are suffering from social-network overload. Facebook for a general-purpose network and LinkedIn for strictly professional stuff. People will add more if the social networks are really focused on small, discrete groups.

At MASH

1. You can make starter profiles for your friends. Think: “first round’s on me.”
2. You can leave your profile open to contributions by trusted friends.
3. You can customize your — or your friend’s — profile with modules from a growing gallery of apps

And of course, there are extensive privacy controls in Mash and you set the boundaries that you’re comfortable with.”

Other features:

Not only can you customize your page and add modules, you can also edit your friends’ pages (with their permission). That means if you were my friend, you would be able to pimp my profile and ‘Mash Pet’, move and add modules on my page, contribute to my ‘about me’ and ‘my stuff’, and vice versa. But again, this is only if I let you . You also can keep track of all the activity that occurs on your profile.

The Blurt is like a status…Your My Stuff is basically a blank, html-friendly module that allows you to you put as much *whatever-you’d-like* in there—images, videos, music and all. You can also click and drag modules to rearrange them on your page.

Module Gallery allows you to see other modules you can add to your page and your friends’ pages! (PimpMyPet, Translucency and YouTube are some of my faves).

There’s no search by names yet, so the best way to find your friends on Mash is by email.

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