Archive for the ‘strategy’ Category

Google NEEDS a Social Network

Tuesday, August 7th, 2007

Google logoGoogle has always prided itself on aggregating user data. After all, their mission is “to organize the world’s information and make it universally accessible and useful”. A social network is a great way to acquire user information and data without bluntly asking for it. Millions upon millions of people have provided a detailed map of their lives in Facebook, for example. This information is priceless. Rather than fill out a lenghty, tedious registration form, users slowly complete their profiles over time.

At this point, Google really only has two options. It can:

  1. Create a social network from scratch, or;
  2. Acquire an existing social network.

With all due respect, Orkut just doesn’t cut it. I would even wager that the majority of North American Internet users have never heard of the service - never mind knowing that it is owned by Google. Furthermore, the percentage of English-speaking users is less than 8%, based on Alexa stats

An English-focused social network would tie everything together and create new opportunities for the company. The search giant would not only be able to leverage its highly successful Adsense platform, but also explore potential new revenue models. Further integration with existing social properties (i.e. Blogger, Picasa, Gmail, etc…) could provide a stunning value proposition for existing Google users, as well as potential new users.

What Do You Get When You Combine AJAX, RSS, Widgets, Wikis, Podcasting, VOIP, and Tagging?

Monday, August 6th, 2007

The typical marketing plan of a clueless, old-school Internet company looking to kick it up a notch with some new-school, trendy social marketing strategies. 

Sound familiar? Countless Internet companies have become brain-washed. They are convinced that these new technologies are critical to their future success. In some cases, they may be right. But for the most part, they lack fit. Successful marketing techniques have to be strategized on an individual basis. What works for one start-up may not work for another. In other words, RSS may work for company A, while widgets may be best suited for company B.

My consulting background has really driven this point home. I’ve heard things like: “Our website NEEDS tagging” or “Let’s throw in some AJAX”. My subsequent steps are as follows:

  1. I laugh (well, not aloud).
  2. I describe the technology in detail and outline the benefits.
  3. In most cases, I dismiss the use of the given technology.

My basis is simple: the ‘trendy’ technology MUST further the user experience and/or provide a greater marketing punch. The simple implementation of a technology for the sake of an implementation is pointless. Simply put, the questions that a company needs to ask itself are as follows:

  • Will this technology create a more enjoyable user experience?
  • Can we reach more potential users if we implement this technology?
  • Do we simply find comfort and security in new, buzzword-compliant marketing techniques?

All jokes aside, this is a serious problem. More and more, we are seeing the use of these technologies in places they shouldn’t be. They are a waste of resources and confuse the offering.

Simplicity is key.

If traditional Internet marketing strategies (such as e-mail marketing or SEO) will provide the greatest ROI, then forget about RSS, podcasting, and the rest of their buzzword siblings. With all due respect, I am a huge advocate of all the technologies mentioned. Their place on the Internet cannot be argued, but they must be used in the proper context. 

PS. Another correct answer to the initial question would have been: the typical business plan of a Silicon Valley start-up. Too many start-ups are looking to jump on the web 2.0 buzzword bandwagon - VCs just don’t buy it anymore, literally.

Will eBay Ever Be Caught?

Thursday, August 2nd, 2007

eBay logoeBay has been at the top for a long, long time. It is one of the few to have successfully weathered the dot-com crash of the late 90s and early 2000s. In doing so, it has established itself as the premiere online auction spot. Ask anyone to name an online auction service. Chances are they will name eBay 99 times out of 100.

Why has the company been so successful? Why hasn’t any other auction site been able to make a run at eBay? After all, an auction is not sophisticated technology. The underlying concept itself has been around for centuries, perhaps even milleniums. The reason eBay has been at the top for so long is because of the Network Effect. Please read the preceding post to gain a full understanding of the rest of this post.

So what is it going to take for someone to challenge eBay (if indeed it is possible)? eBay must have an Achilles’ heel………. right? I sure hope so. Anytime a monopoly emerges, the best interest of the consumer is in jeopardy.

The way I see it, some company is going to have to pour a ton of money into a killer auction app to have a fighting chance against eBay. Even then, I’m not so sure the giant can be beaten. eBay isn’t trying to create a market. eBay is the market.

Anyone have any idea how eBay can be conquered? Or what it might take to do so?

What Google Needs To Do Next

Wednesday, August 1st, 2007

There are two things that Google needs to do in the next year to maintain its current momentum and market position:

  1. Reinvent itself.
  2. Explore new revenue channels. 

Yes indeed, Google needs to reinvent itself. People like to cheer for the underdog. GoogleGoogle logo used to be in that position. It is no longer the case. Due to its control and substantial market share, Google is now the big kid on the block. With this dominating presence comes a certain level of community backlash and disapproval. Microsoft experienced this and continues to do so.

Google has always had a habit of not only meeting expectations, but also exceeding them by a wide margin. Product launches have caused phenomenal buzz. Product quality has been second to none. Google needs to continue this tradition to be successful and well-liked by the Internet community. Marketing can only go so far. The products must speak for themselves. The lack of innovation, launches, and recent news (acquisition aside) has put the company in a stagnant position. I am not being critical - I am just making an observation. Having said that, I think that big things are in the works. I expect to see a full office suite (obviously), as well as a surprise in the coming months. A social network? A Google browser? A Google wi-fi network? I don’t know, but I have high hopes.

Secondly, Google needs to rethink its revenue model. Putting all their eggs in one basket has worked well for them up until now. Increased competition, click fraud, and lack of diversification are all now working against the company. Something like 98% of Google’s revenue is derived from advertising. This is not sustainable over the long term. The company needs to explore alternatives. Who would have ever thought Rome would fall? What about Enron? The big guy is never at the top forever. Nevertheless, things can be done to hedge against a collapse. For Google, this starts with revenue diversification and perhaps even an overhaul of the current AdWords/AdSense system.

If Google is able to reinvent itself and adopt new revenue channels, I think it has the opportunity to stay on top longer than it would otherwise. I have confidence that the current management team will make the right decisions. Although I doubt any of them read this blog, I hope that they are thinking the same things as I. It would be a pity for Google to run the same course as Microsoft.

A Word On The Twitter Financing

Monday, July 30th, 2007

Twitter logoWord around the blogosphere is that Twitter is close to closing a round of financing. Michael Arrington estimates the round to be somewhere in the $1-5 million range. That seems a bit low given the amount of buzz and attention the company has been getting over the past 6 months. I would have expected a larger round, but this smaller round does make sense when you think about it.

The smaller the round, the less diluted the company becomes. The founders can retain majority ownership and control. Furthermore, I am guessing that only a small amount of capital is needed to take the company to the next level. After all, Twitter is a micro-blogging service. How much does it really cost to run a company that facilitates the dissemination of short text messages?

I think that a small round is a very smart move by the company. I assume that many were expecting a gargantuan round, only to be disappointed. By minimizing the influx of funds, Twitter can spur growth and still maintain company unity. The next round of financing will probably be a different story with a whole new set of challenges.