Archive for June, 2011

by Ben Elowitz

The Wall Street Journal and The New York Times both reported Thursday that the Federal Trade Commission (FTC) may be preparing to issue subpoenas to Google as part of a civil antitrust investigation into the company’s search engine business.

If this proves to be true, then Google may finally be forced to face its real moment of truth.

As I’ve been saying, Google is seriously limiting itself – and its future – by sticking with its anonymous algorithm and not finding more significant ways to take advantage of the fast-growing Social Web. Google is also coming under intensifying pressure from Facebook, which is the de facto operating system of the Social Web and increasingly taking share from the searchable web, Google’s previously dominant domain.

If the FTC leans on Google, the company could find itself pinned down in a crippling – or at least debilitating – three-front war. On one battlefield, it would be forced to fight the Federal government; on another, it would be required to grapple with Facebook, which is establishing Social Web supremacy; and then, on a third, a suddenly more limited Google would have to contend with increased competition in search from Microsoft’s Bing.

I like Google CEO Larry Page, but he’s hardly the digital equivalent of Napoleon or General George Patton.

The real question here, though, is whether Google is stuck in search, or whether it can innovate into new markets, social and otherwise.

In some ways, Google’s potential conflict with Washington D.C. is reminiscent of the mid-1990’s, when The Department of Justice alleged that Microsoft engaged in exclusionary (and anti-competitive) actions in the browser market as part of its efforts to maintain muscle in personal computer operating systems. The resulting legal action distracted Microsoft and required a good deal of time and energy that might have been better spent innovating for the surging Internet.  And what’s even worse, many saw the ordeal and ensuing similar European legal wrangles as tipping a cultural mindset change from one of fiercely aggressive growth to one of cautious bureaucracy.  And that cultural change that seems to have kept the company out of pretty much all the greatest technology growth markets of the last decade.

No one knows if a similar fate awaits Google. But, in any event, it’s becoming quite clear that “more of the same” isn’t going to allow Page & Co. to continue their success of the last decade into the next.

by Ben Elowitz

This article was recently featured as a contributed piece at Fortune.com,
regarding Google’s need to to manage itself and Wall Street through a leadership and business transition.

Facebook is the social king today, but Google doesn’t have to give up on the Internet’s future.

Courtesy Google

Google is confronting a series of rugged (and, perhaps, ultimately insurmountable) challenges. And make no mistake: these challenges loom large, because Google’s dominance of the Internet landscape is increasingly being threatened by Facebook’s rise.

If Google (GOOG) is going to maintain its leadership, still-new CEO Larry Page needs to have a plan for the social Web. And, as the new CEO, he’ll need investors to be confident that he’s got this handled.

There are four things Page could do to renew Google’s dominance:

1. Admit that Google has a problem.

Page needs to acknowledge to his employees the enormous threat posed by the socialization of the Web: already, 25 percent of all page views on the Internet are not only social, but served by Google’s enemy, Facebook; meanwhile, Google has no significant share whatsoever in any social activity. Google’s CEO should also be declaring to his employees that Google’s next life stage must be fully social. In addition, Page must offer analysts a more substantive and authentic message. 

When Google’s senior executive team sweeps its social Web weakness under the rug, Wall Street isn’t fooled. And Page’s silence doesn’t stop the tough conversation from happening. Indeed, in this age of investor sophistication and watchfulness, admitting neither problems nor opportunities only heightens the fact that the CEO isn’t taking his business seriously. Page could have preempted the hard-edged conversation with his analysts recently by proving that Google is ready to fully participate in the opportunity presented by the social Web. If framed well, and backed by demonstrative action, this could even help to highlight the potential upside in Google’s future, and that’s always a positive when it comes to dealing with the Street.

2. Show Google understands how the Web is changing.

Facebook isn’t just another really popular Web site. Rather, the entire nature of the Web has been transformed from a bunch of pages on servers that Google crawls, to the world’s people connected to each other and sharing their lives. Just as significant, more and more of the Internet’s capabilities are delivered via apps, rather than on HTML forms. 

Gone are the days when Web developers would make everything HTML-compliant just for Google’s sake, while end-users had forgivingly low bars for their own experiences. Now, customers must come first to publishers – and that means providing them with content when, where, and how they want it in the social networks, in video, and on mobile devices. Page needs to clearly show that he understands the “ground rules” of the new Web; then he needs to lay them out crisply, with their differences distinctly noted, so that his business units – from the moneymakers of search and advertising to the experiments in social media – can start remaking themselves accordingly. Gmail, for example, should be reinventing communication for a fully connected world in which email usage is on the decline, just as it reinvented the category when email was still on the rise seven years ago; and Google Apps needs to rethink how applications can be so much more than mere Microsoft Office stand-ins when its users are connected to the Web most of the time.

3. Recruit hard for new talent.

It’s not enough to rotate the deck chairs and the bodies that sit in them; it’s time for Google to parachute in some rescuers. For example, Google needs to win notables like Vadim Lavrusik, who just joined Facebook, to help guide social content in news and media; and it also needs to remake its employment proposition to attract the up-and-coming stars like those who have joined Facebook, as well as those who have started their own companies. Google developed an amazing human resources formula that attracted a slew of talent to fuel the search wave; but now the talent wars are underway, and Facebook’s pre-IPO buzz has leapfrogged over Google’s gourmet chef and personal training perks to attract the best and the brightest. Google needs to reinvent its formula and demonstrate a winning strategy to attract the next generation of stars.

4. Show your work on social.

Finally, Page should be demonstrating progress on a host of new, socially supercharged products and ideas that Google desperately needs right now. In addition to pulling from the outside, the company should be incubating its own ideas to take advantage of the social Web. Page’s incentive compensation plan is a start, but it doesn’t go nearly far enough to light a fire that will help Google out-compete Facebook, a private company that has already garnered nearly 50 percent of Google’s own market capitalization – without having even signaled an entry into the search marketplace yet. Google’s home turf of search is uncharted territory for Facebook, but, just as importantly, the social terrain has already proven a minefield for Google. Page should be working on these four items each and every day. But he should also be communicating his progress in these areas on an ongoing basis to investors and analysts, as well as employees. And, as for how, the outreach needs to be personal. 

He’s Google’s CEO; it’s his responsibility; and it’s an integral part of the top job – a job, by the way, that he recently chose to assume and shoulder.

In his debut earnings call with investors, Page made nary a mention of social. By sweeping the social Web and his new chief competitor under the rug, Page seemed to be making the false assumption that the analysts and media covering the company wouldn’t notice the rising force of social or Google’s lack of social progress. 

Of course, nothing could be further from the truth, because Facebook’s $78 billion valuation represents a lump beneath the rug that’s nearly the size of Mt. Rainier.

Google can’t just ignore this mountainous marketplace impediment. And investors aren’t the only ones that take notice of Google’s lack of strategy here: the engineers coding Google’s products need to know that their leaders want to attack, not ignore, the mountain.

Markets go up, and markets go down. But opportunities like the social Web come along only so often. So, if Page and Google remain radio silent on Facebook’s clear and present threat, they’ll be frittering away much more than their market cap. They’ll be gambling with their greatness. And that would be a huge mistake.

by Ben Elowitz

Credit: James Duncan Davidson/O'Reilly Media, Inc

For a company that has sworn it’s a communications utility, and not a media company, Facebook sure does have some outstanding media talent on its Board of Directors.

Included, of course, is The Washington Post Company’s Don Graham, who is successfully bridging the print and digital generations.

And Now Reed Hastings of Netflix.

I’m wondering whether Mark Zuckerberg has changed his mind, or whether something different is going on.

And, as I’m thinking over what an increasingly social world means, I’m asking myself whether a communications utility is really any different from a media company.

The answer may be “no.”

Here’s why: Increasingly, the “distribution” part of media is being handled by lots of point distributors, each passing along to their own network, rather than by big companies that own dedicated equipment or spectrum like newspapers and broadcasters did.

And, as for content creation, we all know it’s gone from an oligarchy of anointed editorial sources to legions of content creators and commenters.

For Reed Hastings, he has a ton to learn from Zuckerberg about how to re-imagine content creation and distribution.  But Hastings, for his part, can help Zuckerberg learn how to rapidly build and scale a powerful business model that is increasingly playing in the world of content.

After all, no matter how Facebook likes to think of itself, it’s increasingly in the business of connecting audience to content.

So, that pretty much makes it a media company.

However the company defines itself, though, it’s clear to see that Facebook is playing a key role in digital media’s evolving model.  And it’s a smart of Mark Z. to learn from Hastings – who is one of the best in the world at innovating to serve today’s consumers in new and untold ways.

by Ben Elowitz

The upside of all the data that can be collected about us on the social web today is that we can increasingly get better and more relevant information faster.

But there’s a dark side that Brian Stelter reported on this week in The New York Times – all that data can leave us exposed.

There’s no question that the benefits of a connected world are immense; but, after reading Brian’s probing piece and taking a big gulp, I recognize that it also means we’ll see more abuse.

The new information exchanges, marketplaces, and networks we are building online have huge power because they connect so many disparate people and things together.  That’s the appeal; and it’s also the genesis of the inherent potential for misuse.

In previous Web generations, newsgroups, eBay, and Craigslist offered people extraordinary new dimensions of information, commerce, and connection.  And we saw a small – but harmful – percentage of misuse.

And yet, the bigger surprise to me isn’t that these exchanges can be exploited, but that they work at all.  Whether they’re propelled by financial or ego-centric motives, the nefarious exploiters seem to be outnumbered twenty-to-one or more, and the exchanges largely work in spite of them.

Lately, I have been thinking and writing a good deal about the divergent approaches that Facebook and Google have been taking when it comes to the Web.

It’s clear that Facebook is a world filled with identity – and with a vast network where every node is identified comes unprecedented personal risk.  Do I really want my friends, my enemies, my government, and worse, my mother, to connect all the dots of my existence?

No, most assuredly not.

And yet having my identity established online offers enough payoffs that I permit it.

Increasingly, Facebook has been pushing for the benefits of an identified and networked world; at the same time, Google has established itself as the king of the anonymous Web.  The result is that Facebook finds itself in one privacy imbroglio after another; and I’m sure more are on the way.

But while Google scans the pages of the Web without any sense of human identity, its former CEO rues that they have missed out on the benefits of the social Web as a result.

We’re definitely walking a fine digital line here.

But my money is on an increasingly social Web; and we’ll clearly have to address the downsides as we tip-toe – or barrel – into the future.

by Ben Elowitz

This article originally appeared as a feature at AllThingsD.

We all read the statistics every week documenting the meteoric new growth areas of the Internet, and they are impressive:

Online video is exploding, with annual user growth of more than 45 percent.  Mobile-device time spent increased 28 percent last year – with average smart-phone time spent doubling.   And social networks are now used by 90 percent of U.S. Internet users – for an average of more than four hours a month.

None of this is a newsflash.  Every venture capitalist, Web publisher, and digital marketer is hyper-aware of these three trends.

But what’s happening to the rest of the Web?

The Web Is Shrinking - Elowitz/Wetpaint

The Web Is Shrinking.  Really.

When you take these three growth areas out of the picture, the size of the hole left behind is staggering:  the rest of the Web – the tried and true core that we thought would have limitless growth – is already shrinking.

Here are the facts:

When you exclude just Facebook from the rest of the Web, consumption in terms of minutes of use shrank by nearly nine percent between March 2010 and March 2011, according to data from comScore.  And, even when you include Facebook usage, total non-mobile Internet consumption still dropped three percent over the same period.

We’ve known that social is growing lightning fast – notably, Facebook consumption, which grew by 69 percent; but now it’s clear that Facebook is not growing in addition to the Web.  Rather, it’s actually taking consumption away from the publishers who compete on the rest of the Web.

And just what is the rest of the Web?

I have been calling it the “document Web,” based on how Google and other Web architectures view its pages as documents, linked together. But increasingly, it might as well be called the “searchable Web” since it’s accessed predominantly as a reference, and navigated primarily via search.

And it’s becoming less relevant.

In the last year, Facebook’s share of users’ time online grew from one out of every 13 minutes of use nationwide, to one out of every eight.  In aggregate, that means the document Web was down more than half a billion hours of use (that’s more than 800 lifetimes) this March versus last March.  And in financial terms, that represents a lost opportunity of $2.2 billion in advertising inventory that didn’t exist this year.

The Creation of a New, Connected Web

The change in the Web’s direction is a clear indication to me that we aren’t just in the midst of a boom for new interaction modes, but rather a generational overhaul of the Internet.

What replaces the declining searchable Web is a new and “fully connected” digital life.  You may have heard this before.  After all, the promise of the Web was to connect pages with hyperlinks.  Well, this time, “connected” means much more.  It means the Web connects us, as people, to each one of the individuals who’s online; and those connections, ultimately, extend from one of us to all of us.

Just as significantly, this all happens in real-time, and at nearly all times.

And here’s what’s different when you connect people, as opposed to pages: Now, the Web knows who we are (identity); is with us at all times wherever we go (mobile); threads our relationships with others (social); and delivers meaningful experiences beyond just text and graphics (video).

The connected, social Web is alive, moving, proactive, and personal; while the document Web is just an artifact – suited as a universal reference, but hardly a personal experience.

The Social Web Versus the Searchable Web

Analytical explanations – increasing smart-phone penetration, bandwidth availability, and technology sophistication – fill in some of the gaps as we try to understand this sea change, but they fall short.

Something larger is afoot, and it’s not about science or technology.  Rather, as human beings, we have changed how we fit the Internet into our lives.

And the nature of the Web is changing to match. The old searchable Web is crashing; while the new connected, social Web is lifting off.

The implications for publishers are massive.

The last decade has been defined by the rise of Google as the nearly limitless supplier of traffic to digital media properties.  And so a generation of digital media publishers developed and followed the same playbook:  create lots of content around top keywords; engineer for search engine optimization (SEO); and expand the surface area in search engines to reach more users.  The objective was to catch visitors in their net; expand reach – as measured by ComScore; look more impressive to advertisers; and capture more demand.

The landscape is changing, and fast.

SEO’s strategic value is quickly fading as Google’s growth slows and its prominence in distribution slides away.  In its place, Facebook has become the wiring hub of the connected Web – a new “home base” alternative to Google’s dominance of the last decade.  Facebook began receiving as many visits as Google in March 2010, and already garners more than three times as many minutes as Google each month from users, according to comScore.  Looking ahead, the best projections of U.S. online reach indicate that Facebook will surpass Google on that metric in less than a year, too.

And with this change, the nature of the relationship between users and publishers is being altered fundamentally – and perhaps forever.

Search offers a utility relationship, connecting users to content for the briefest of transactions; typically, it provokes users to just one page-view so they can find a piece of information, and then they move on.

But social discovery builds a relationship.  Leveraging social endorsements and an environment of serendipitous discovery, consumers meet publishers in a meaningful context. As a result, the relationship that forms is stronger – and, more importantly for publishers, it’s branded.

Unlike the ecosystem set up by Google, where the search engine ironically intermediates between users and the objects of their queries (so that users reinforce their loyalty to Google, far more than to the publisher), in the world of social publishing, the Facebook hub enables a direct, if constrained, relationship between users and media brands.

The results – at least for my own company, Wetpaint – are that social media brings more qualified eyeballs and retains them.  People who come via social media stay longer on the first visit; and they are more likely to come back sooner and more frequently.  Overall, our visitors from social networks have a relationship that’s several times stronger – and several times as valuable when measured in engagement, page-views, and revenues – than the relationships people form when then arrive through search.

The Human Connection

But it’s not just a change in mechanics.  It’s a change in our human relationships.

Lewis D’Vorkin, the Chief Product Officer at Forbes, speaks of it when he and Alex Knapp talk about “live” media, quantum entanglement and mutually rewarding relationships that bind authors and readers on the new connected Web.  It’s a sense of the Web moving from static published reference to living digital companion.

But there’s even more, and this vast change foreshadows bigger and better impacts on our lives.  The greatest innovators in social media are driving along exactly that edge today.   As one friend commented recently on the full potential of connected lives, by being joined more closely together, we can increase empathy and meaning, while decreasing isolation.

Toward a Fully Connected Future

Admittedly, we’re early in the replacement cycle when it comes to the connected Web. Even for strong connected Web performers like Huffington Post, my own company, Wetpaint, and others, the sum total of traffic from Facebook, Twitter, video, and mobile may add up to only half the total, or less.

But the trend has tipped; and with that tip has come both the business necessity and the human impact potential of elevating the relationship.

As the document Web of old shrinks, the new connected Web expands and delivers experiences that make our time online more effective, efficient, and enjoyable.

And that changes the role of companies on the Web from mere content publishers or providers to truly connected digital partners for real people.

Does Search Limit Us?

20 Jun
2011

by Ben Elowitz

I just read a provocative review of a provocative new book – “The Filter Bubble: What the Internet Is Hiding From You,” by Eli Pariser.

The board president of MoveOn.org, Pariser muses about the perils of excessive personalization on the Web. He’s also concerned that technology companies are narrowing our digital experiences.

“Personalization filters,” he writes, “serve up a kind of invisible autopropaganda, indoctrinating us with our own ideas, amplifying our desire for things that are familiar and leaving us oblivious to the dangers lurking in the dark territory of the unknown.”

This point of view echoes that of legal scholar Cass Sunstein, who worried about Internet users getting stuck inside “information cocoons” in his book, “Republic.com.” 

Pariser has a solution for this, and he calls for greater openness and diversity when it comes to search results and recommendations so that unfettered and serendipitous discovery can take place.

My opinion is more intricate. I believe that personalization lives on a spectrum, as opposed to an all-or-nothing scenario. At one end, overdone personalization can produce an unhealthy bubble of self-ignorance as Pariser and Sunstein suggest. But at the other end of the spectrum, where no personalization exists, things are equally bad. The key is determining what’s best for the individual customer experience.

Taking search as an example, the future of personalization is getting the right resources or results to answer your needs as effectively as possible. But personalization doesn’t mean that we have to change the answer. Rather, it means having – and using – much more context about you than what’s available in technology and user interfaces today.

Personalization done well will generate the results you want, without forcing you to sift through the results you would have ignored anyway. And personalization still leaves room to access diversity and alternatives: done right, it will center the bullseye of its results right on your most likely interests; but that doesn’t mean it needs to block out the rest.

In fact, as long as we are interested in diversity, search engines and other content discovery engines will deliver it – because they are in the business of serving our interests. And if they stop doing so, the reason won’t be the technology’s preferences – it will be our own preferences.

In the meantime, the best companies will enable users to have control on the privacy front. And even with those controls, most consumers will almost certainly trade personal information for spot-on content and the right kind of delivery.

So, once again, I come down on the side of Web users. I’m in favor of personalization done well, and I’m all for letting consumers decide for themselves what works and what doesn’t online.

 

by Ben Elowitz

A couple of weeks ago, here in Seattle,  I had the opportunity to participate in a discussion about the future of SEO (search engine optimization) and SMO (social media optimization), along with one of the top SEO experts in the world:  Rand Fishkin.  The conversation was a lively one, moderated and reported –by Curt Woodward, at Xconomy.

My view is that – particularly for media – we are at a tipping moment.  The web is no longer a field of static documents navigated by a precise search engine.  Instead it’s a living organic distribution machine from person to person, through the ether of “social operating systems” like Facebook and Twitter.  And, as a result, I expect Google will be losing ground to Facebook.

It’s was a lively and fun dialogue.

Read the highlights and play-by-play here, courtesy of @curtwoodward.

by Ben Elowitz

Microsoft unveiled its first preview of the Windows 8 user interface at the All Things D D9 conference last week.  It was a thrill to see it.  And my first reaction was that it looks more like media than software.

But upon further reflection, it’s more than just Microsoft.  It’s been the theme of the recent wave of operating system overhauls on mobile devices, which are now taking root on the desktop, too. It’s happened on the iPad, on Palm/HP’s WebOS, and now finally on Windows’ mainstream interface. User experiences are showing more design heritage from print and media, and less from software roots.

It’s an important marker.  Going back decades to the beginning of the personal computing revolution, software was written by programmers, who were doing their best to make machine instructions controllable by end users.  It was an inside-out approach:  starting with the microprocessor’s constraints and translating them into displays that were at least interpretable by end-users.

Now, programmers have the luxury of fast processors, sophisticated graphics systems, and advanced libraries – not to mention the development of the new field of user experience.  So, instead of starting with microprocessors and asking users to adapt, we are seeing design go the other way:  we are starting with real people (consumers) and making the software conform to them.

When we do that, the “a-ha” to me is that the consumer-first approach is a media approach, not a software approach.  It doesn’t start with the machine; it starts with the audience.  And that’s exactly what the expertise of media is.  The result culminated in Steve Sinofsky’s demo of a complete overhaul of Windows 8’s interface, that looks so much like a media property, and not so much like any desktop software interface that we are used to.  Indeed, the “desktop” metaphor of previous generations of Mac, PC, and Unix interfaces is blown up entirely, replaced by a start screen with so many content tiles, each formatted richly and compellingly in a glossy, high-production-values sort of way

The future of software is looking a lot like media.

 

by Ben Elowitz

This article originally appeared as a feature on TechCrunch.

I was surprised to hear former Google CEO Eric Schmidt publicly lament lost opportunities and missed chances to catch Facebook the other day.

I used to envy Google and the vast digital empire that Schmidt commanded.  Google had one of the most intricate monopolies of all time. It had the most impressive dataset the world had ever seen; the most sophisticated algorithm to make sense of it; an audience of a billion users expressing their interest; and more than a million advertisers bidding furiously to reach those consumers at just the right moment.

What’s more, it had captured the ultimate prize: increasing returns to scale. Only Google could spread such huge R&D costs among an even more humongous query volume, all while offering advertisers the chance to reach most of the population with one buy. Google had earned its success.

It competed on being smarter.

It was.

And it won.

Google’s business strength was simply taken for granted; so much so that even deep-pocketed competitors like Yahoo and Microsoft stopped trying to outdo Google’s massive scale and core algorithmic know-how.

And that’s why I used to think that Google was unstoppable.

Until I realized one very important thing: despite the fact that Google goes to great lengths to keep its index fresh by indexing pages that often change every hour, or even every few minutes, and despite its efforts at realtime search (including searching the Twitter firehose), its dominant dataset is dead, while the Web is—each day more so than the last—vibrantly and energetically alive.

Indeed, Google’s revered and unparalleled dataset is increasingly dating itself as an ossified relic akin to the Dead Sea Scrolls—outshined by the freshness of the living, breathing organism that is the social Web.

Like dusty and determined archaeologists, Google’s massive bots crawl the Web looking for the artifacts of digital civilization. And what they find is fossils—in the form of pages and links: the leave-behinds of writers, contributors, and casual end-users who have deposited traces of themselves in the skinny crevices and dark recesses of the Internet. Google analyzes these remains, and yet it has almost no first-hand knowledge of any of the users who created this content—or those who are searching for it.

Enter Facebook.

Since its founding in 2004, Facebook has focused on enabling social connections, not on search. And yet, in the process, Facebook has created a platform that knows more than 600 million people, complete with identity, interests, and activities online. The company’s relentless and organic expansion—from an application to an emergent social operating system—has enabled it to know its users, not only on the Facebook.com domain, but also on other sites, as they travel throughout the Internet.

While Google has amassed an incredible database consisting of the fossilized linkages between most Web pages on the planet, Facebook possesses an asset that’s far more valuable—the realtime linkages between real people and the Web.

What does this mean, and what are the implications here?

Well, in a nutshell, Facebook has stored a treasure trove of distinctive data that, if fully utilized, could put Google out of business.

Yes, put Google out of business.

Here’s why.

Facebook’s data allows it to do more than just guess what its customers might be interested in; the company’s data can help it know with greater certainty what its customers are really interested in. And this key difference could potentially give Facebook a tremendous advantage in search when it eventually decides to move in that direction.

If Google’s business has been built on choosing which Web pages, out of all those in the universe, are most likely to appeal to any given (but anonymous) query string, think about this: Facebook already knows, for the most part, which pages appeal to whom—specifically and directly.

And, even more powerfully, Facebook knows each of our individual and collective behavior patterns well enough to predict what we’ll like even without us expressing our intent.

Think of it: Facebook can apply science that is analogous to what Amazon uses to massively increase purchase likelihood by suggesting and responding to every minute interactive cue. Whereas Amazon relies on aggregate behavior, Facebook adds in the intimate patterns of each individual—along with their friends and the behavioral peers they’ve never met all around the world. And each of them is logged in and identified as a real person.

When Google was born, its advantage stemmed from its ability to collect and analyze superior data. While other publishers looked myopically at each page on the Web as a standalone realm, Google found that the link relationships between those pages held more valuable relevance data than the pages themselves. All of a sudden, the isolated views of players like AltaVista and Yahoo began to look one-dimensional. And ownership of what is now the $20-billion-plus search advertising market was cemented.

In the last several weeks, Google has indicated how important Facebook-like social networks are to its still-vast ambitions. One proof point is the launch of the new +1 product; another is the company’s internal announcement that bonuses will be tied to success on the social Web.

It may seem that this is about capturing a new market opportunity. But, trust me, it’s not. In reality, it’s Google’s recognition that Facebook has the same kind of advantage over Google that Google is used to having over its competitors.

And Google is smart to be scared.

Very smart.

But, if the truth be told, it will take far more than +1 to measure up to the whole new human dimension of the Internet. After all, the human organism is home territory for Facebook and utterly foreign turf for Google’s algorithmic machine.

Photo credit: flickr/Ken and Nyetta

by Ben Elowitz

This week at the All Things D D9 conference, I found myself telling people that lately I’ve been “tricoastal.”  It’s a codeword I’m enjoying for the rotation I have been doing between the Bay Area, Los Angeles, and New York.  I seem to run between the three of them continually, as I’m trying to put together my best thinking about the future of media.  And, despite the time, expense, and hassle of the travel, I keep finding that blending the three of them is far more powerful than if I spent time in any one of them.  And if I didn’t visit all three frequently, I wouldn’t just be facing the catastrophic loss of super elite status on multiple airliner, nor innumerable calls from my mother asking “where are you and are you wearing a sweater??”.  Far worse, I’d be missing an accurate picture of media.

My company, Wetpaint, has its roots in Silicon Valley.  The Valley is great for its appreciation of the mechanics of digital media.  In fact, it’s obsessed with them.  The Bay Area practically invented the word “virality,” and it understands distribution – both through search engines and social networks, and from person to person – far better than others.  At least at a mechanical level.  The Bay Area culture is left-brained; it celebrates analytics, tactics, and leverage created by software and automation to get nonlinear results from human efforts.  However, it is blind to the art of content and the realities of the advertising business.  It assumes that both of these can be deconstructed successively into analytical components; that all actors are rational; and that these are systems problems, not human problems.  But these assumptions are all patently false in media.

New York, on the other hand, recognizes the art of editorial and the less predictable, more spontaneous nature of the consumer.  The iconic titles of companies like Conde Nast, and their personality-driven cultures, seem to have established a reverence for the editor-monarch with perfect knowledge, and have embedded a culture of royalty based on editorial superiority that translates into sales prowess.  And that last component is met by New York’s enormous advertising machine, which operates based on a currency of relationships and perks.

But it’s Los Angeles that impresses me even more for being image-obsessed.  Hollywood’s influence seems to understand the value of brands the best – that brands are greater than the sum of their parts.  The LA mentality, however, assumes that content creators have captive distribution – as they do in broadcast and cable TV channel agreements and movie theater agreements.  It assumes that once a brand is launched it becomes a pipe through which you can shove whatever content you want, like a cable channel, as though the lead-in and lead-out are guaranteed.  And it carries an assumption that brand franchises have immense value to be tapped and negotiated by dealmakers.

In truth, digital media doesn’t operate this way.  No distribution is guaranteed.  Just as LA has seen the record companies crumbling under disaggregation, now it is happening to other forms of digital content.  Published content online needs to find its audience one “single” at a time.  The brand value of the collection, while still significant, no longer carries guaranteed distribution online.  And the personalities linked to that content no longer have the star-power that an Anna Wintour or Tina Brown have been able to create in the New York model.

None of which is to say that the Silicon Valley mechanists are right, either.  They aren’t. Their mechanical analysis of the universe doesn’t survive contact with humanity.

Instead, what I love to find every time I tour is how these pieces fit together.

If you’re not practicing the art of content that the New York media is best at, then you are creating a bunch of meaningless drivel that will never deserve the loyalty of a branded relationship.  That branded relationship is the exact mantra of LA’s movie franchise creators; and yet, the distribution mentality of LA (that you can own a captive channel) is all wrong.  Instead, I find that the Silicon Valley mindset of each item needing to find its audience – and then self-lubricate for viral distribution – complements it best.  And this, then, reinforces the fact that it all starts with the NYC notion of content, in contrast to Silicon Valley’s algorithmic bias that it’s all about the technology.

By putting the three together, we end up with a complete picture of media – content, mechanics, and brands all working together – and that combination is one that represents how the audience behaves, with human drives around interest, engagement, and loyalty.

 

 


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