Archive for May, 2007

Wednesday was Acquisition Day

Thursday, May 31st, 2007

Yesterday proved to be a big day in the web 2.0 world, as two of the biggest names were scooped up by two of the Internet’s heavyweights. Here is a recap of the day’s events:

It will be interesting to see what CBS and eBay planned to do with their new purchases and/or how they plan to integrate them with currents services.

I have to yet to grasp a good understanding of how these takeovers play a role in the grand scheme of things for both companies, but my mind is churning through the possibilities. In any case, there is always the potential to simply let the service or site live on its own. This model is more from an ‘investment’ approach for the company with the prospect of generating revenue in the future via the external, mutually-exclusive property. Another possibility is the re-sale of the site/service to a willing party at a later date for a greater dollar value, creating a reasonable ROI.

My hope is that the brand power and ‘corporate’ atmosphere of these giants don’t disrupt and ruin the communities built by these web 2.0 gems. Their tight cultures are what make them so special. Destroying those synergies would, in essence, destroy their very nature and DNA. Brings Vertical Search to the Tutor Industry

Wednesday, May 30th, 2007 hopes to simplify the process of finding a tutor. The service is tailored for both students and parents. The site claims to have a directory of over 9,000 tutors, who pay nothing to post their profile. For this reason, I believe that the revenue model can be summed up in two words: Google Adwords.

Each search query comprises two elements - the subject and region. Examples include:

  • Math - Phoenix, Arizona
  • Biology - Dallas
  • Literature - 08647

The interface and layout are fairly clean, intuitive, and easy-to-use. The company logo could use some work, but the concept is strong.

Setting Tutorz aside for a second, the notions of ‘local’ and ‘vertical search’ work together in a very relevant, pertinent manner. I expect to see more of this in the near future. ZipLocal is a very good Canadian example of this.

Vertical search is extremely similar to specialized directories, if you can imagine that for a second. The only difference is the method of discovery for the user. In one case, the user browses for a particular product or service. In the other case, a search is performed. In other words, vertical search isn’t entirely re-inventing the wheel, but perhaps making it easier and saving time for the user. 

Everyone’s Web 2.0 Revenue Model

Monday, May 28th, 2007

The buzz and hype of the new web landscape has subsided considerably. Yet, to my surprise, more and more ‘web 2.0′ start-ups continue to operate with the cheesiest, most over-used strategies.

  • “We’re currently in stealth mode.”
  • “Our AJAX widget will VOIP the RSS while podcasting to bloggers in a wiki-like fashion.”
  • Our target market is anyone who uses the Internet.”

These crack me up. Like… give us all a break. My favourite though… is one that is not as apparent, or even stated anywhere. It pertains to the revenue models of these ventures. Contrary to what many may think (especially the companies themselves), a revenue model was never part of the initial strategy.

To some, this may come as surprising. To others, it’s common knowledge. Many of these start-ups launch a FREE product with the intention of exploding onto the market, harnessing viral growth, and eventually selling to a larger, more established player. WOW, there is it. The revenue model is actually an exit strategy. I think that is a web 2.0 trend in itself.

Web 2.0 revenue model = Exit strategy

This makes sense for naive Internet entrepreneurs because:

  • It eliminates that monetary barrier to entry for users (as mentioned above)
  • They have no idea how to monetize a product in the first place AND/OR they find comfort in the the phrase, “We’ll build traffic, then figure out how to monetize later”.
  • The company realizes that if they do eventually implement a revenue model (advertising, subscription, etc…), they will piss off users and many will defect from the site or service.

So, as you can see, companies resort to the FREE model with the intention of ’slapping on’ a revenue model somewhere down the road. There never was a revenue model to begin with.

Now, don’t get me wrong… I love free products and don’t want to pay for anything if I don’t have to. But from a business perspective, that is not a sustainable or savvy model.

Profiling Canadian Start-Ups

Friday, May 25th, 2007

It can be tough to get PR on the web - especially if you’re a Canadian start-up. I know this from personal experience. I’ve worked or consulted for several Canadian start-ups. Residing in Victoria, BC, I can understand that Canada isn’t exactly Silicon Valley. But this great country should not be overlooked when it comes to new technology. Numerous successful web 2.0 ventures can trace their roots back to Canada.

For this very reason, I am excited when new, Canadian technology blogs sprout up. A recent entrant into the space, StartUpNorth, is looking to put the spotlight on little-known Canadian start-ups. This should help shine some light on entrepreneurial ventures of the North. Having said that, it is not the first of its kind. Other popular Canadian technology blogs that profile start-ups include Maple Leaf 2.0 and Mathew Ingram’s blog. I highly recommend both. Add them to your RSS reader.

MappingTheWeb also profiles Canadian start-ups from time to time.

The point is that new blogs or entrants in the space should not be considered competition, but rather added coverage and exposure for the Canadian tech industry. This benefits us all and solidifies Canada’s reputation for innovation on the web.

Watch out Silicon Valley… Beware the black sheep of the Internet…

Can Social Bookmarking Sites Provide Better Results Than the Search Engines?

Wednesday, May 23rd, 2007

Let’s head back to the SEO days of the late 90’s. META tags were all the rage, most notably META keywords. Now back to 2007… The use of such ‘indicators’ is coming full-swing. Although the ‘META keywords’ phrase is now shunned upon, tagging tends to be a concept that many accept with open arms. At the core, they are essentially the same thing. A user or publisher is providing a word or phrase (i.e. metadata or context) to a given page in this case. However, the amount people that provide this data is the difference.

Some are saying that this type system may provide more accurate and relevant results than other search algorithms, most notably Google’s.

Social bookmarking sites essentially allow a large audience to tag individual pages all over the web. It is similar to providing META keywords, but on a much larger scale. I call it ‘tagging by the masses’. Hopefully the wisdom of the crowds is more pertinent than a computer-based algorithm.

One downfall of such a system is the possibility of gaming or cheating. Mismatched tags and spam can ultimately lead to personal financial gain (for some), as well as inferior results for the user. Though this is easier to accomplish using a tag-based system, gaming is still widespread within traditional, algorithm-based search engines as well. Search engine optimized, AdWords-smothered pages still continue to appear in the results, although an effort has been made to eliminate them.

Perhaps one of the traditional, ‘lagging’ search engine should look at incorporating tag-based results in their own algorithm or results. A risk such as this could provide a spark or catalyst that Ask or MSN so desperately needs.