YouTube Vs MySpace

YouTube hype machine is cranking at a zillion RPMs a minute. A profitless IPO, a billion dollar sale to one of these half a dozen companies, lawsuits, illegal content and how it helped them become what they are. The latest is this concept floated by The Guardian that it is bigger than MySpace.

The video sharing site has taken a 3.9% share of global internet visits a day compared with 3.35% for MySpace, according to internet analysis company Alexa.

However, the data from Hitwise is the quite different from Alexa data used by The Guardian. For the week ending July 29, 2006 MySpace.com received 4.73% market share of visits versus the .23% market share of visits for YouTube.com. For the week ending July 29, 2006, MySpace was ranked #1 based on market share of visits (please note Hitwise breaks out domains of larger properties) while YouTube was ranked #29. (According to Hitwise data based on market share of visits, MySpace was ranked 6th for the week ending July 30, 2005 while YouTube was ranked 80,628.)

Written by Om Malik on August 1st, 2006 with no comments.
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More Troubles At MySpace

Since this morning, we have been noticing increased comment activity on our previous post about MySpace outage. It seems a lot of people are having trouble with the service, and accounts are being deleted. I would have ignored this trend for a wee bit longer, but Mashable is finding similar comments, so this is a bigger problem. The story has been dugg already!

It has been a hard couple of weeks for the largest social networking site in the world. Soaring temperatures caused power outages in the greater Los Angeles area, knocking out the power in one of the hosting centers that house MySpace. It was not the Equinix data center, but instead the InterNAP data center that went out. Fox Interactive President Ross Levinsohn says the company is working hard to beef up its infrastructure, and adding redundancy.

Frankly, it is a big surprise that the service hasn’t had a hiccup before, though it has had its share of non-tech problems. According to Hitwise, Myspace.com has achieved a 3814% increase in visits over two years (comparing the market share of visits for the week ending July 22, 2006 versus the week ending July 24, 2004) and 140% increase in visits since the same time last year (week ending July 23, 2005.) Hitwise estimates that MySpace accounts for about 81.24% of the total social networking market.

Written by Om Malik on July 28th, 2006 with no comments.
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Cyworld: Good Morning America

Cyworld, the South Korean-born social network, has opened its U.S. site into “public beta,” meaning anyone can now access the site and create those lovable “minihomes” and “minirooms” that have captured more than a third of the Korean population (see screen shots of the U.S. site below.)

Like MySpace’s web pages, U.S. Cyworld users are able to customize their sites with photos, images, and music and can send and receive messages for other users. Unlike MySpace the site is based around cutesy avatars called “Minime’s”, buying and shopping with “acorn” points and design elements that evoke a wholesome goodness that’s both kitchsy hip and a bit pollyanna.

Dozens of new social networks are coming to market this year, but Cyworld has seven years of experience and the backing of SK Communications, a subsidiary of Korea’s largest wireless operator SK Telecom, to kick off its attempt at global domination.

Cyworld’s U.S. efforts are more than just a way to tap the American market, the site is the platform for building sites that will be launched in Europe — Germany and the U.K. among other EU countries — as well as South America, and east Asia. Cyworld already has sites in China, Japan and Taiwan.

While MySpace has similar plans to launch in Germany this summer, Cyworld plans to open a site in Germany early next year in a partnership with Deutsche Telecom.

In some markets like Germany, Cyworld would rather partner with a local company, and a local telecom company like Deutsche Telecom is a natural fit given Cyworld also offers a mobile service. In different countries the site might take on different flavors, and in Germany the site could take on more of a dating element, says Michael Streefland, Vice President of marketing for Cyworld.

For the U.S. site, the 30-person Cyworld team in San Francisco has spent months localizing the Korean content to make it more U.S.-friendly, altering the layout and getting rid of Korean-content that just doesn’t translate. Cyworld’s music service, which broadcasts music for visitors to homepages, and has been wildly popular in Korea selling some six million songs a month, will be used for the U.S. site. Deals with U.S. music labels are now being finalised.

Cyworld is also working on its mobile service for the U.S., which won’t likely launch until next year. Part of that is because the company wants to watch and see the moves of MySpace mobile, which has an exclusive deal with SK Telecom’s MVNO Helio. Cyworld Mobile won’t likely have a direct relationship with Helio, given both are newcomers to the U.S. market says Henry Chon, Cyworld US CEO.

Henry gives a ballpark figure of $10 million for launching Cyworld’s U.S. site, but says SK Communications will give them whatever they need to succeed in the market. He says he’s talked with all the major venture firms in the valley, and isn’t interested in raising money for financial reasons. That said, he might be interested in a strategic partnership.

Cyworld’s U.S. site could be more of a testing ground for the company’s international plans rather than an attempt to dominate the U.S. market. The Cyworld team knows there’s a slew of social network sites in the U.S. already cleaning house. “We are being realistic. There are a lot of hardships in the U.S. market,” says Henry Chon. “But we’ve been here since 1999. We’re going to bring that experience here,” he says.

The U.S. site officially launches in August, but anyone can access it now. Go check it out and give us your feedback!

Written by Katie Fehrenbacher on July 27th, 2006 with no comments.
Read more articles on MySpace and Social Networks and Helio and Cyworld.

Men at Work At MySpace

MySpace, the largest social network in the world went dark this past weekend, thanks to a large-scale blackout in downtown Los Angeles, according to company officials. The outage that left nearly 80-million users without access to their pages for a few hours, has galvanized MySpace’s corporate parent, Fox Interactive Media into spending more and building redundancy for the fast growing network.

“The weekend was brutal, and caused some issues,” FIM president Ross Levinsohn said in an interview this morning. (Read, The Sly Fox.) He explained that MySpace has two data centers in the Los Angeles area – one in downtown LA that is operated by InterNAP, and another in El Segundo, that is owned by Equinix.

The problem was in the downtown building. A switch meltdown caused blackouts in downtown and shut down the building, only to be followed by air-conditioning outage. “Suddenly our servers heated up and (nearly) melted,” Levinsohn added. “We are looking to add more data centers, preferably on the East Coast to make the system even more redundant.”

Levinsohn admitted that it was going to take time, since these are complex issues. He did say that the company is sparing no expense to keep MySpace performing at its optimum best. Maybe the blackout served as a wake-up call for News Corp. – the multinational that Murdoch built is no longer just a media giant, it is a technology company and needs to spend like one.

Written by Om Malik on July 25th, 2006 with no comments.
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VoIP Quality from bad to worse

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Written by VoIP & Gadgets Blog on July 25th, 2006 with no comments.
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MySpace Down Again

A power outage seems to have hit the data center that hosts MySpace.com, the largest social network in the world. This is the second day in a row we have heard similar reports, though today we have managed to grab a screen shot. Ironically, the www.myspace.com still shows an ad - at least the FIM has its priorities right.

But seriously, it is hard to believe that a service this large could just have one data center. Have they not heard of redundancy? I am pretty sure there is more to the story. One can only imagine how millions of MySpace users feel right now. Mashable has more information on this developing story.

Update: Jake says that MySpace is in the Equinix data center.

Mark Fletcher explains the technical issues involving MySpace and other social networks, and why MySpace could be in one datacenter.

Written by Om Malik on July 23rd, 2006 with no comments.
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The German MySpace: Lokalisten

MySpace plans to launch a site in Germany this summer, looking to move into one of the biggest Internet markets in Europe. But the company will face local entrenched players when it arrives. German users say that Lokalisten holds the title of the “MySpace of Germany” and has been bringing in an increasing amount of users. According to Nielsen Netratings the site had less than 150,000 unique users in the month of June, so that’s still a small market. But the German social network market is just starting to take off, and Lokalisten is one of the emerging leaders.

According to Alexa stats Lokalisten increased its reach by 115% over the past 3 months, with 22.9 page views per visit. If this Lokalisten blogspot site is to be believed, the site is bringing in up to 3,600 concurrent users at a time on an average afternoon, and is upgrading its server system to stay ahold of the traffic.

Nielsen Netratings sent us some data about German online community sites–which includes a broader list of social-oriented web sites than just social networks–and the market includes 15 million users. The top German community sites were Wer-weiss-was, Windows Live, Yahoo Geocities, and Knuddels.de. With so many German Internet users participating in “community sites,” it could be a pretty good indicator of how big German social networks sites could grow.

Like the growing popularity of social networks in the U.S. and the U.K., Germany will likely see an influx of new users and emerging start-ups looking to develop the relatively untapped market in the coming months. If you’re an avid Lokalisten user, or use other German social network sites, let us know!

Written by Katie Fehrenbacher on July 21st, 2006 with no comments.
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Murdoch & McCaw: A Likely Match?

Murdoch is reportedly planning to jump into the world of WiMAX through its DirecTV broadcast company, and could either partner with Clearwire or go after its own spectrum. The Hollywood Reporter says the most likely story is a link with McCaw’s Clearwire, and quotes sources that say News Corp and DirectTV are in “advanced” talks with Clearwire.

Robert Young, the soothsayer who sees things before others had alluded to Murdoch’s broadband plans almost a year ago. You must go and read Murdoch, WiMax and The Two Way Web and get a sense of why it is the most important priority for News Corp.

Another option could be those spectrum auctions coming up in August that everyone from Gabelli, and Paul Allen to William Berkman are eying. FCC files say a group called Wireless DBS, which is backed by DirecTV, News Corp, Fox Entertainment, EchoStar, Rupert Murdoch, and EchoStar’s Charles Ergen, among others, are looking to bid. Though, the application is incomplete and today is the last day to update it. These applications could be a low-risk placeholder, but then again, it’s an indicator of company ambition.

Written by Katie Fehrenbacher on July 18th, 2006 with no comments.
Read more articles on Unwired and WiMAX and MySpace and Clearwire.

Yahoo Rejects MySpace #1 Claim

Yesterday Hitwise released stats that pushed MySpace into the #1 spot in terms of market share of visits, beating out Yahoo’s mail site for the first time. Murdoch must have been thrilled, but Yahoo was more than a little PO..d.

Yahoo responded by saying the Hitwise data was misleading and not accurate to compare MySpace with just its mail domain. A reasonable point, but Hitwise was still pretty clear on what it was claiming. A lot of people are debating this. I am sure folks from Hitwise would have something to say about this… we are waiting!

Written by Katie Fehrenbacher on July 12th, 2006 with no comments.
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Zango and MySpace Adware Fiasco

MySpace got tangled up with the marketing company Zango this week after a researcher pointed out that the social network is spreading Zango’s adware. Answers from both sides were pretty unclear and generally incoherent, as vitalsecurity.org points out in a nice rant entitled “The Great Divide.”

Written by Katie Fehrenbacher on July 12th, 2006 with no comments.
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MySpace: Internet’s New #1

MySpace is now the number one site in the U.S. in terms of market share of visits says research firm Hitwise. Over the past two weeks Murdoch’s social network grew in market share of visits to reach 4.46% for all Internet visits in the U.S. for the week ending July 8th. The Hitwise stat launches MySpace over Yahoo Mail for the first time. Of course that’s good news for the site’s plans to build a socially integrated media empire.

For the entire month of June, ComScore’s data still places Yahoo over MySpace in terms of visitors, but said that MySpace still grew in both page views and unique visitors. We’ll see when next month’s numbers emerge if the trend stays the same. When it comes to unique visitors, though, MySpace isn’t growing as fast as Yahoo, Time Warner Network, MSN-Microsoft, Google, or eBay–it’s ranked 6th on uniques.

Written by Katie Fehrenbacher on July 11th, 2006 with no comments.
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Habbo Hotel Is Going Mobile

Sulake, the Finnish company behind the popular online virtual world Habbo Hotel, said it will take €6 million euros ($7.7 million) from Japanese Movida Group to both set up a Japanese operation and to push its content onto cell phones.

Movida Group is a joint venture between Softbank BB and Asian Groove, an interactive entertainment company, and Sulake is backed by investors like Benchmark Capital, 3i, and Elisa Group. The investment is a step in the company’s plans to replicate the wild success of its online site, which has brought in an astounding 53 million registered users worldwide, to the mobile world.

Wireless domination might not be too hard, given the company already sells Habbo-themed mobile content like wallpaper, ringtones, and games. Sulake did a survey of its Habbo users and the company says 85% of respondents were interested in buying Habbo mobile content–mobile games are by far the most popular.

We have also learnt that the company is working on a mobile Internet site called “Pocket Habbo” that will launch later this summer, which will give cell phone users access to aspects of the Habbo community, including messaging, blogging, and buying and selling Habbo currency. Then in the first quarter of next year the company plans to release a mobile client that will more fully recreate the Habbo web-based experience.

Sulake can stand to make significant money off porting Habbo to cell phones. The company plans to work with handset manufacturers, to preinstall the mobile community, carriers, to boost mobile portal traffic, and other entertainment brands to distribute content wirelessly. A Habbo-themed handset could even be in order–Habbo MVNO? It’s such a good idea that combined with the success of the Internet site, a company exec said Sulake is planning an IPO at the end of next year.

One reason Habbo Hotel will likely be so successful on the mobile, is because its virtual-only animations and avatars, exclude some of the real-world problems associated with a MySpace-style social network. It’s the same thing with Cyworld, Korea’s mostly virtual world, which has also been successful on mobile.

On the other hand Verizon was rumored to have bypassed on the original MySpace mobile deal, because of privacy concerns. Conservative carriers don’t welcome a lot of those hassles, and while MySpace will likely land on the traditional carriers next year, after its exclusive contract with Helio, mobile Habbo will likely already be there.

Written by Katie Fehrenbacher on July 11th, 2006 with no comments.
Read more articles on Unwired and MySpace and Cellular and Social Networks and virtual worlds.

The Rise of the Socially-Integrated Media Empire

Rupert Murdoch build his media empire, News Corp, the old-fashioned way… by vertically and horizontally integrating deep and wide into the layers of the media industry (e.g. from production to distribution). But with his acquisition of MySpace, Murdoch has gone down a new path… a new dimension of strategic corporate development that I like to call “social integration”.

Just as the name implies, social integration targets the ownership of critical assets in the social media supply chain (e.g. social networks like MySpace or People Aggregator, socially-programmed video services like YouTube or VideoEgg, social photo services like Photobucket or Flickr, socially-curated news sites like Digg or Newsvine, etc.). But in a radical departure from the old vertical and horizontal integration strategies of traditional media, social integration recognizes the fact that social media, by definition, shifts much of the media supply functions directly into the hands of the audience itself.

In other words, with social media, the consumers are in control of production, programming, and distribution … which is a complete reversal of the traditional media model. This reversal in control leads to some interesting consequences, the most obvious being the impact it has on the translation of core competencies within traditional media organizations (they become largely obsolete in the context of social media). But the greater long-term consequences of social integration involve strategic market development.

As social media continues its stunning incursion into the overall media landscape and usurps valuable mindshare, particularly from the younger demographic, the degree to which a traditional media company socially integrates into its audience is rapidly becoming the proxy for its ability to survive the future. But in order to survive via social integration, the players must first understand the real strategic implications of social media.

Many traditional media companies view social media as sort of a “farm league” and a promotional vehicle for Hollywood, one that will augment but not threaten their existing brands, copyrights, talent, and superior storytelling resources. This is a critically flawed view and it’s reminiscent of the strategic mistake that AOL made during the ‘90s. AOL viewed the Internet at large as a wildly chaotic resource that they needed to tame and manicure behind its walled garden. To some extent, AOL treated the Internet as a subset of its proprietary service, positioning itself as the gatekeeper to what they deemed valuable and worthy. This is precisely the way traditional media (especially Hollywood) views social media today.

But just as the Internet was not a subset of AOL, social media will not become a subset of traditional media. In fact, social media will increasingly begin to compete directly with traditional media consumption. Yes, it is true that the media output produced and distributed by the audience itself will generally be of lower production value and quality. Even so, they will prove highly competitive to Hollywood products, as the personal engagement factor inherent in personal media outweighs any loss of production value.

So given the competitive nature of social media and the operational challenges it represents, why should media companies even think of embracing social integration? Because they have no choice… social media will continue to take market share away from traditional media, regardless of whether the media companies participate or not.

And if that’s the case, it’s better to eat your own children… otherwise, Google and Yahoo will gladly oblige. At the end of the day, the media conglomerates should view social media much like they did the rise of cable TV. Cable eventually took half the market away from traditional broadcast TV, so the media conglomerates vertically and horizontally integrated their way into cable in order to buy back market share. They should do the same with social media by pursuing a strategy of social integration. Rupert Murdoch already made his first move, and it looks like NBC is about to take their first baby steps. Welcome to the new world of socially-integrated media empires! Robert Young is a serial entrepreneur who played a major role in the invention & commercialization of the world’s first consumer ISP, Internet advertising (pay-per-click ads), free email, and digital media superdistribution.

Written by Robert Young on July 11th, 2006 with no comments.
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FIM Revenues - $500 million in 2007

A couple of days ago, a post by Robert Young prompted many to point out that MySpace was not that big a revenue opportunity.

It is hard to break down the numbers - analysts estimate about $200 million in the current fiscal year - but for the current year, Fox Interactive is going to bring in about $350 million in calendar 2006. The sales are expected to jump to $500 million or so in fiscal 2007 (ending July 31, 2007.) Rupert Murdoch was talking to investors about the Internet business and revenue opportunities in Sydney, Australia. (Also, The Sly Fox)

MySpace is also launching in Japan in partnership with Softbank. The 50:50 joint venture is expected to launch sometime in September 2006. (Remember back in the day, Softbank and Yahoo had a special thing going. Maybe this is a new special thing in the making?

Written by Om Malik on June 30th, 2006 with no comments.
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The Sly Fox

Ross Levinsohn’s wheeling and dealing to get News Corp. back in the Web game has been ridiculed by many as profligate and late. But he may yet prove them all wrong. … this is my latest article for Business 2.0, which is now available online. A lot of people had some wonderful comments and insights on Robert Young’s post from yesterday, and perhaps this piece adds to the whole conversation. I hope you find the time to read it. (Of course you could read about Ross’ boss here!)

PS: Slow Blogging today - a pinched nerve is preventing me from writing today!

Written by Om Malik on June 28th, 2006 with no comments.
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Google and MySpace: Woulda, Coulda, Shoulda!!

By Robert Young

In the latest (July) issue of Wired magazine, Rupert Murdoch claims that Google…

“…could have bought MySpace three months before we did for half the price. They thought, ‘It’s nothing special. We can do that.’”

So that means Google could have acquired MySpace a year ago for about $290 million. Talk about a strategic blunder… the thought of Google and MySpace, combined, boggles the mind. Instead, Google is left thinking of what could have been. And to add insult to injury, it may turn out that not acquiring MySpace may end up being more expensive for Google!

As widely reported, MySpace is now the largest source of search traffic for Google, accounting for over 8% of their inbound traffic as of early May. That essentially means that MySpace is responsible for about $400 million of Google’s annual revenues. Knowing this, MySpace is trying to capitalize by holding an auction for its search business. If Google wins, it will end up sharing a significant percentage of that $400 million with MySpace… John Battelle thinks the split to MySpace will be close to 90%. And Google would need to pay it every year. Needless to say, had Google acquired MySpace, no such payments would have to be made.

In addition to the real costs that Google is likely to incur, there’s also the opportunity cost. Had Google acquired MySpace, they would likely be ranked the #1 Internet property on all user & usage metrics… nudging out Yahoo! from that top spot. It certainly would have been quite a sight to see… being #1 overall, based on its dominance in search fortified with an even greater dominance in the social networking category. It certainly would have cemented Google’s leadership into a near-ineffable state of invincibility.

Having said all that, I personally believe it would be foolish for Google to pay MySpace anything. Even if MySpace strikes a deal with a competitive search engine, it’s highly likely that the users will simply bypass the default and go to Google anyway.

Robert Young is a serial entrepreneur who played a major role in the invention & commercialization of the world’s first consumer ISP, Internet advertising (pay-per-click ads), free email, and digital media superdistribution.

Written by Robert Young on June 27th, 2006 with no comments.
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“All Things Digital” Is Must Reading

Great must reading in the Wall Street Journal's Technology special report on "All Things Digital" from earlier this week.

Coverage is from "D4: All Things Digital -- The Wall Street Journal Executive Conference," hosted by Walt Mossberg (left) and Kara Swisher (right). Conference was held May 30-June 1.

Interviews, for example, with Bill Gates on Vista, MySpace and his competition; Robert Iger (Walt Disney Co.) on the future of entertainment; and director Barry Sonnenfeld (Get Shorty, Men in Black) on why the Internet is bad for movies.

Let me know if you agree with these folks ...

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Written by VoIP & Gadgets Blog on June 22nd, 2006 with no comments.
Read more articles on Uncategorized and News and MySpace and walt disney and wall street journal and walt mossberg and d4 and get shorty and kara swisher and men in black and robert iger and vista.

Of Social Nets & Business Models

By Robert Young

Last week at a conference in New York City, the head of Fox Interactive Media, Ross Levinsohn, told the audience:

“More mainstream marketing on MySpace will be kept to the “well-lit” areas of the site, like the Books, Comedy, Film, and Games sections rather than on individual profile pages, which have less strict content controls–something many advertisers have expressed concerns about.” “We want to make it easier for marketers to work with us,” Levinsohn said.

I like the way Scott Karp reacted to the announcement when he wrote, “Sounds more like advertising will be roped off away from the action, like protesters at a Bush rally.” Heh.. funny! My reaction was similarly skeptical, because it seems that a traditional media mind set might be nudging them (FIM) in the wrong direction.

As most now realize, the fundamental problem that social networks face when trying to monetize through an advertising-driven business model is the lack of trust.  To be more explicit, while brand advertisers have historically trusted people as consumers, they do not trust them in the new role of producer (e.g. uncontrollable content).  Likewise, people who are armed with the power of interactivity are also demonstrating that they are increasingly distrustful of brand advertisers (e.g. ad-skipping).

In many ways, social networks today, at their current stage of evolution, are much like the currencies of underdeveloped nations… or countries that are politically unstable.  In such circumstances, governments must do all they can to create and engender trust among its nation’s constituents and institutions. After all, what is money without the people’s trust… it’s just a devalued piece of worthless paper.

MySpace, and thus other social networks, are in a similar predicament. MySpace in particular, needs to be a catalyst for trust among its users and advertisers.  While taking a strategy of segregation (e.g. “roping off” brand-safe areas) might satisfy conservative advertisers and yield some dollars in the short term, such efforts will actually serve to undermine and limit the long-term viability of its business model by further exacerbating the distrust between users and advertisers.  Instead, what MySpace needs to do is to tackle the problem head-on by launching programs that ultimately create new levels of trust between its constituents where none existed before.

Given that broad, high-altitude view, let me now zoom in by proposing a specific program idea along the lines of what I’m talking about. Whether the idea, in and of itself, has any merit is not the point here; the objective is to demonstrate a direction that exemplifies how trust can be created between users and advertisers.

Imagine the following scenario:

A teenage girl is checking her MySpace profile. She notices a new video ad for Old Navy on her page. But this particular ad jumps out at her because she immediately notices that the person in the ad is actually someone from her high school!! Without hesitation, she hits the “play” button and watches her friend talking and dancing, while modeling Old Navy’s new line of Madras casual wear. The ad seems homegrown in some ways, yet professional overall… a feel that was intentionally designed into the creative execution by Old Navy’s ad agency. Excited, she notices that her cousin (who’s attending college) is online so she IMs her to describe the ad she just saw. Her cousin IMs back to say that she saw the exact same Old Navy ad on her own MySpace page earlier, but in her case, the girl in the ad was someone she knew at her college.

Now, let’s step back and digest the implications of what just happened. In a broad sense, this type of program is no different than what advertisers do when they sign-up mega-celebrities (e.g. Catherine Zeta-Jones and T-Mobile) or superstar athletes (e.g. David Beckham and Motorola) as spokespeople for ad campaigns or for product endorsement deals. When it comes to advertising in mass media, a big name is required since such campaigns are only effective if the viewer already knows who that celebrity is. But in a social network, micro-celebrities who are well known within their network of micro-communities could prove just as effective and potentially even more so, particularly if such campaigns are able to generate buzz, excitement and a cool-factor.

As for MySpace’s role in all this, they are in the unique position to know better than anyone (as the owner of the platform with all the user data) who the “brand-safe” users are within its network.

Thus MySpace can effectively play the role of talent agent by aggregating a list of users who would be appropriate for advertisers within various categories. In fact, the incentive “to be discovered” is likely to spur many users to express themselves in a manner that will position them favorably for consideration. The result is a win for everyone involved.

By enabling advertisers to partner with users, this is the type of program that would create trust between the parties. This trust, multiplied by the number of ad campaigns and the users enlisted, could then be propagated throughout the entire social network in a manner that is completely native to the medium itself. In this vein, it’s worth noting that a campaign like this cannot be implemented efficiently or cost-effectively in any form of mass media.

Remember, social networks are a new medium for self-expression and, unlike traditional media, the content is being produced and owned by the audience itself. This is a new model that requires new rules… and for advertising, the most important rule is to launch programs that integrate users and advertisers, not segregate them. By aligning their interests, trust will be created and social networks will be able to offer advertisers, and users, benefits that are truly unique to the new medium.

So as is the case with money, trust will enable social networks to develop business models with sustainable value.

Robert Young is a serial entrepreneur who played a major role in the invention & commercialization of the world’s first consumer ISP, Internet advertising (pay-per-click ads), free email, and digital media superdistribution.

Written by Robert Young on June 19th, 2006 with no comments.
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Social Networks are the New Media

By Robert Young

No one can argue that MySpace has been the “it girl” for the past year. And the fact that she belongs to Rupert Murdoch only seems to have heightened the envy, and gotten everyone’s knickers in a twist. As a result, it seems that nearly every media company and venture capital fund on the planet is out on the dance floor stumbling over one another to see if they can identify the next breathless social networking beauty.

Yet in all this craziness, it would behoove those looking into this space to step back for a moment, take a deep breath, and realize something fundamental… social networking is a micro-phenomenon of a much larger macro-trend that the Internet has spawned since its birth… digital self-expression. And today’s social networks (along with other forms of social media, like blogging and online video-sharing) are just the tip of iceberg when it comes to the long-term potential of digital self-expression.

Much like corporations leveraged Internet 1.0 by creating digital storefronts and giving rise to ecommerce, people around the world are now learning how to leverage the incredible power inherent in the URL to create what is essentially a parallel universe of digital identities. And just like all things Internet, digital identities are not subject to the boundaries of geography, or the laws of physics, or any of the other limitations of being a carbon-based life-form. As such, the extensibility and scale of the “digital you” is far-reaching, as are the strategic implications to the media industry. In many ways, the art-form of self-expression has become the “new media”, and social networks are their distribution channels.

It’s crucial to understand that social networks are architected to help scale self-expression to new heights, both in terms of the extent of self-expression as well as the reach of distribution (e.g. number of “friends” and the effects of the whole six degrees of separation thing). A simple example… a person on MySpace can have thousands upon thousands of friends. This was not possible before the Internet, and even prior online communications & community innovations like email, chat/forums, and IM didn’t truly enable this kind of scale. Moreover, a person can now express him/herself with multidimensional, multimedia depth via text, photos, audio and video… again, to a degree that was not really possible before.

To some extent, self-expression should be viewed as a new industry, one that will co-exist alongside other traditional media industries like movies, TV, radio, newspapers and magazines. But in this new industry, the raw materials for the “products” are the people… or as Marshall McLuhan might say, “the people are the message” when it comes to social networks. So for any player who seeks to enter this industry and become the next social networking phenom, the key is to look at self-expression and social networks as a new medium and to view the audience itself as a new generation of “cultural products”.

In the past century, the creation of cultural products was centered in Hollywood. Now, social networks are broadening the scope of cultural media to include “identity production” (a very appropriate term coined by danah boyd), all the while decentralizing the ecosystem out to the edges. For traditional media companies that are seeking to enter this space (e.g. MTV, Martha Stewart, etc.), it’s critical to follow the audience into the development of this new market by re-focusing core assets that have the capability to deepen the level, and heighten the production value, of self-expression.

Think of this way… what if “American Idol” had been produced solely by the capabilities of the contestants themselves, without the expertise and talent of the show’s producers, directors, writers, etc. As talented and entertaining as the contestants are, the resulting production quality, the level of emotional engagement, viewership/ratings and monetization potential of the full package would likely be far inferior to what we all see on the air today. Well, social networks should be seen in a similar way… people want to express themselves and the platforms that allow them to do so with the most creativity and production value, are the ones that people will flock to.

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Robert Young is a serial entrepreneur who played a major role in the invention & commercialization of the world’s first consumer ISP, Internet advertising (pay-per-click ads), free email, and digital media superdistribution.

Written by Om Malik on May 30th, 2006 with no comments.
Read more articles on MySpace and Social Networks.

MySpace IM Is Live

Somedays, the news trends just happen. Today, it is all about the IM, instant messengers that is.

AOL launched its new IM-based AIM Phoneline service, only to be followed by Microsoft Messenger Live Beta thatwas made available for download.

And now MySpace IM is making its presence felt. The IM client is now being made available to MySpace users. Now you can IM, Tom and let him know how you really feel about him. Kareem Mayan, a FIM insider has all the details, and Mashable takes a look at the the new IM client. Pete, we are waiting for the full review… come on now!

Written by Om Malik on May 9th, 2006 with no comments.
Read more articles on MySpace and VoIP Apps.

Fox Buys Newroo, kSolo

Ross Levinsohn, made a big splash a few months ago when he announced at an Under The Radar event that he had bought someone in the room. The news zipped across the Silicon Valley right on to my Power Book, just when the Business 2.0 Next Net panel got underway. In subsequent weeks everyone speculated, but now the news is final.

FIM has officially announced that it bought Newroo, and kSolo.com, which is sort of like an online karaoke service. I had heard about the kSolo deal, but could not nail down the specifics. Oh well…here it is. Mike has blogged the full press release. The deals are small - very small. (Nevertheless, FIM is being pretty active these days - Simply Hired investment, and now these deals.. will there be more to follow?)

Newroo is like a meme-tracker for everything and I got the demo from Dan Gould, and was suitably impressed. Levinsohn was impressed enough to spend a few million on the company which never got a chance to come out of stealth. I saw some prototypes build by Gould & Co, that would go well with the celebrity crazy MySpace crowd.

Written by Om Malik on May 1st, 2006 with