Archive for the ‘trends’ Category

The Mystery of Web Statistics

Wednesday, January 24th, 2007

GraphFor centuries, believers and non-believers alike have argued over the existence of Bigfoot, the Loch Ness Monster, and UFO’s among others things. But these mysterious phenomenon have been overshadowed by the biggest mystery of all… web statistics.

This enigma is even more prominent in the new web landscape. Start-ups are not known for sharing their page views, visits, or uniques… or more importantly their user base.

Even if a start-up does choose to share these coveted statistics, manipulation can transpire. Straight-up lying can manifest as no third-party auditing is being performed. Moreover, numbers can be skewed and morphed to the liking of the company. Sure, you may claim to have 2 million registered accounts, but if only 50,000 users sign in in a given month, we’re talking about a whole different story. And thank God the days of web 1.0 and ‘hits’ have passed. Otherwise, companies would still be glorifying these meaningless statistics.

Yet, let it be known, not all companies choose to hide their stats. The big guys (MySpace, Craigslist, Wikipedia, etc…) tend to divulge their metrics without hesitation. This is for obvious reasons. They have ‘made it’. Once a company is producing, say, 1+ billion page views per month, they’re more than happy to share their stats and bask in the glory.

But for the little guys, it’s the opposite. It’s almost like encountering a bear in the woods. Look big. Shy away. Don’t let it be known that you’re actually smaller than you appear to be.

Some interesting points to note:

  • AJAX is causing a stir around web statistics, as a page load is not needed. This will not only force changes in terms of web standards, but more importantly for advertisers and publishers. A new system/metric may will be needed.
  • Traffic information aggregators such Alexa, Hitwise, Comscore, and Compete are all trying to solve the web statistic mystery, but to no avail. Although they must be praised for their efforts and relative rankings, the only way to truly solve this problem is by having the individual sites open up their statistics and allow third-party tracking/auditing.

In the end, a chameleon company is only kidding itself. By trying to appear larger than it actually it, it is no farther ahead than its actual statistics. Without revenues, the company will fail. And if the company chooses to try and acquire financing or put itself up for sale, a due diligence process will be carried out by the prospective company or investor… upon which the truth will come out.

Where Did the Web 2.0 Buzz Go?

Tuesday, January 23rd, 2007

Is it just me or has the hype seem to have faded? I swear it was only 6 months ago (or even a few months ago) that the buzz was still buzzing. Now, it seems to have lingered. Though healthy for the Internet economy, it seems that many entrepreneurs and web junkies aren’t getting their daily dose of high adrenaline, heart-pumping web 2.0 hoopla they so dearly crave.

Evidence of this trend can be witnessed by visiting TechCrunch, widely accepeted as the grand daddy of web 2.0 blogs. It seems the content nowadays is focused more and more around the big guys (Google, Yahoo, Microsoft, AOL, Amazon) than around the small start-ups that TechCrunch became famous for writing about. I wouldn’t go as far as saying TechCrunch is selling out, but maybe we are seeing a shift. Perhaps less and less new web start-ups are launching? Perhaps major consolidation is imminent?

Furthermore, it seems TechCrunch is adding a new candidate to the “Dead Pool” on a daily basis. In other words, more and more start-ups are filing for bankruptcy and/or selling off their assets, as they just can’t make a go of it.

Maybe the industry is in a lull? Maybe a moderate crash is to be expected? I don’t think so.

New web start-ups will continue to launch as long as the Internet is running, albeit less at times than others. In any case, it takes less money and human resources than ever before to launch a successful venture. Many 1-, 2-, and 3-man operations have gone on to accomplish big things in a short time period. Many web application frameworks, such as Ruby on Rails, have given start-ups a head-start and allowed them to concentrate less on building a service from scratch, and more on creating an excellent experience. Moreover, this also allows for more time to be concentrated on the business functions as well, most notably marketing and business development.

It will be interesting to see if this lack of news is just a short-term bump or if we are indeed in the midst of a major overhaul. My guess is that it’s the former.

Dethroning the Internet Giants

Saturday, January 20th, 2007

On the net, there are several industries dominated by one major player. Some include video, search, books, social networks, auctions, and classifieds. If you are unaware of who the industry leader is in any of these categories, then you’re probably living under a rock. In any case, check your answers against my list:

These Internet powerhouses dominate their respective realms with little threat from the competition. Furthermore, in most cases, they’re surging even farther ahead of the competition as we speak.

So how do you dethrone these Internet kings? By slicing their product or service offering into verticals.

Chop, chop, chop. It’s the only way to compete. Any start-up looking to break into the above categories needs to carve out a niche and extract of subset of the larger player’s target market.

I touched on this concept a little bit in my post about the Evolution of a Hot Internet Space. I’ve said it once and I’ll say it again and again and again… Verticals, fragmentation, and niches are what’s in store for the new web. Nobody can directly compete with the big guys right out off the gate. It’s certain death. But if they choose a smaller market, they can prosper.

Let’s look at potential niches within the big headings:

  • VIDEO - Vlogs, funny videos, news clips.
  • SEARCH - Product, forums, blogs.
  • BOOKS - Used, rare, comics.
  • SOCIAL NETWORKS - Age range, region, topic of interest.
  • AUCTIONS - Product type, region, auction type.
  • CLASSIFIEDS - By region… jobs, for rent.

As you can see, it’s easy break down the main categories into sub-groups. The hard part is creating a tailor-made service for the group.

An interesting point is focused around the marketing of the service. A generic offering is actually harder to market than a more specific service. Having ‘everyone’ as your target market is great, but doesn’t bode well for a marketing campaign.

Nowadays, blogs, blog communities, groups, forums, and niche interest sites are rampant. These make the task of marketing a targeted service much easier and more manageable. In addition, it’s also be much easier to locate and convert potential product evangelists and influencers.

So, next time someone says their target market is potentially everyone, tell them to grab a niche.

Web 1.0: User Participation?

Friday, January 19th, 2007

The concept of user-contribution is relatively new. Only recently has it really gone mainstream. Wikipedia proved out the model and many corporate entities are now harnessing the power of wikis. The evidence is real and the trend is here to stay.

But the notion of ‘user participation’ has been around for longer than we think. Often times, we hear the term used interchangeably with its sibling mentioned above. Nevertheless, they shouldn’t be confused as they represent different concepts.

In my opinion, user-contribution describes a situation where users contribute on an individual level and the aggregate of the contributions is more powerful than the individual expenditures. In other words, the more people that collaborate, the better the overall outcome or results. Meanwhile, user participation simply conveys the idea that users participate on an individual level and add separate pieces to the cause. There is no aggregate and every piece needs to be examined. Obviously, conclusions can be pulled from the various sources, but there is no resounding interpretation.

Basically, I’m saying that user participation has been around awhile in the form of forums. Wikipedia describes a forum as “a facility on the World Wide Web for holding discussions and posting user generated content, or the web application software used to provide the facility”. The system essentially runs itself with little or not human intervention - ignoring the moderation aspect, of course.

These discussion facilities have been around since the dawn of the Internet.

My point is that is user participation is old school, not something new or revolutionary. The idea of user-contribution (or crowdsourcing in some cases) is newer and much more powerful. It harnesses the knowledge of the masses to create an entity or solve a problem that could not otherwise be achieved by the individuals pieces.

Wow, that began to sound like an introductory philosophy class.

Evolution of a Hot Internet Space

Wednesday, January 17th, 2007

Over the past 2 years, we have seen exponential growth in a few select Internet spaces. For this article in particular, we will take a look at three of them: social networking, photo sharing, and video sharing. We will observe how each evolved, developed, and solidified its place in the mainstream.

Charles Darwin would have been proud. The evolution of these spaces support the notion of ‘natural selection’ and ’survival of the fittest’. In any case, here is the development as I witnessed it:

  1. Several players enter a space early in the game. Due to the immaturity of the industry and lack of education, little adoption has taken place thusfar. In addition, simplicity and functionality are not optimal. Finally, the user experience is far from perfect.
  2. Then, along comes a player who recognizes the potential growth of the industry. However, contrary to previous development, this new entrant decides to simplify the game and create the utmost user experience. Not only does this create a more intuitive service, but it exemplifies the flaws and weaknesses of competitors. In this case, I am talking about MySpace (social networking), Flickr (photo sharing), and YouTube (video sharing).
  3. These new-comers entered a potentially lucrative space, dummied down the offering, and created a functional, enjoyable user experience. For realistic reasons, exponential growth ensued. In the case of MySpace, users invited their friends as this is the raison d’etre for a social network. This spurred viral growth. In the other two cases, users upload their user-generated content and media files. But what good are uploaded files if only you get to view them. There is no value there whatsoever. Value enters the equation when a user invites their friends or other potential users to view their photo(s) and or video(s). Once again, this encourages viral growth.
  4. After a year or two of phenomenal growth, the industry leader gets bought out by an Internet giant or media conglomerate (MySpace > Fox Interactive; Flickr > Yahoo; YouTube > Google). At this point, revenue models are still in their infancy, and the acquisition company is focusing more on the size, growth, and demographic of the user base. Eventually however, the acquisitor must implement a revenue model in order to turn a profit from the deal.
  5. In all three cases, a somewhat targeted advertising model materializes. And as of today, all three services continue to operate as independent entities with a lack of branding from the parent.
  6. At this point, many of the smaller players have fallen off the charts. They’ve either run out of cash or failed to generate a considerable amount of traffic. Only a select few industry headliners can generate enough revenue (and in some cases, profit) to stay afloat.
  7. What happens now is the denouement of the industry. This is where things begin to get interesting. Of all the secondary players who cannot compete with the leader, many will ignore the warning signs and continue to position itself against the leader, only to fall short in the end. Nevertheless, the smarter companies will approach the situation differently. These players will take on a niche. This fragments the industry and creates unique verticals. Now sites can grab small subsets of users and traffic from the leader and build a loyal user base from a different angle. Though the potential target market may be smaller, the potential for success and the ability to drive higher CPMs is much more likely.

Here is a small list of some of the secondary level players who have done a good job of harnessing a smaller, more targeted audience:




So what will be the next hot Internet space? If I knew, I wouldn’t be posting right now.

NOTE: Some may argue that Photobucket is the leader in the photo sharing space. Though it does get the majority of traffic and usage, it fails to grab the attention and buzz of the press.