Erik Sundelöf

entrepreneur, thinker and Swede

Does monopoly ring a bell?
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I read some recent blog post on the Google-YouTube acquisition. Look at the chart at http://googlelogs.blogspot.com.

One question immediately pops up. Didn’t the first step get taken to a total monopoly of the user-contributed media market for video? If so, is that good or bad? Personally I am skeptical. We will see. Obviously and without any doubt, the next thriller and power struggle will be between MySpace and GooTube. I’ll guess I have to get some popcorn for that thriller.

The owner structure behind media companies in the US have been discussed for quite some time now and many people (including) me have argued that the user-contributed media is the way to go. It still is. However, this acquisition calls for a discussion about the ownership structures behind this today established arena of the internet. Does the anti-trust case ring a bell here?

Do we really want to have the famous flash movie EPIC 2014 realised?

I don’t!

Note: Bruno Giussanni offers an excellent post on the whole scenery of the aquisition even before it was revealed. You can find his post here.

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Google buys YouTube… Hmmm…
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I guess it is a great thing…

I spoke to a friend Thursday when the rumor just started. We concluded that the acquisition is all about getting the biggest chunk of the market, or to some extent the whole market. I do not think it has anything to do with what YouTube is actually doing. This is purely a corporate strategy from Google to secure its position as the number one player on the user-contributed video market. I haven’t seen any arguments so far that that market is worth that kind of money, but then again no one has really shown me the numbers.

Is the market that big? I have no idea. I doubt it, at least as of today’s form. It is big in the sense that everyone is talking about it, so the acquisition is probably correct from short-term perspective.

User-contributed media is the flavor of this year. I admit I am doing my fair share of it in my work on inthefieldONLINE.net and Ajgar.com. But what is it all about really? Think of it as the IT software business reality show. It is purely based on the entertainment value. Will it change? I think so. It has to. I do not think it is sane to continue down the track, especially as this kind of media is moving towards news. Today’s form of user contributed media contains a lot of child deceases which needs to be cured in order for it to be really useful for media companies. Reputation systems, copyrights and costs are all topics that are too quickly discarded. We will see more and more substantial content, and the same development as the blogosphere went through, the total sphere of user-contributed media will have to go through. This especially requires new business models as such SixApart changed the business model of blogging. i have previously written a lot of entries on the topic:

Back to YouTube. Is YouTube today worth $1.6 billion? Maybe, maybe not. I think the question is as simple as that. You need to look at the bigger picture, but also have a more conceptual discussion of where we are heading with this whole sphere. YouTube are worth $1.6 billion for Google and almost that to Yahoo in their positioning game here in the valley. More importantly, it is a sign that Google is turning into the same strategy as Microsoft have been accused of.

Definitely, the game will be about Facebook. What a ridiculous acquisition price will we see then… The stakes just got bigger… maybe David Hornik will be right after all – The Bubble 2.0 is coming. The acquisition prices are not really sane anymore.

I now hope that the fortune wheel of the valley doesn’t start to spin too fast…

Note: The Swedish company bubblare.se is an excellent example of how to still compete in this saturated market with a focus in the business. They apparently have some statistics showing they are really a good competitor on the market in Sweden. It is also an example of the importance of language modulisation in the local market. Even in big market such as Japan language plays an essential role. I spoke to a Japanese friend the other day, who told me that Japanese kids generally cannot read English well so they prefer Japanese sites. Give them web/mobile search in their native language as well as the interface. This is especially important for user-contributed media sites. How good will they be able to do if they can’t search for the content nor understand how to submit? Even better is that you can do this via cellphones now as of NeoKeys. I met them a few weeks ago and they really have a cool product. It is really cool and the right as well as the necessary way for the future.

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Conceptual mobile approach for emerging markets
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I have been discussing cellphone approaches in lately and wrote a short entry on it. This is only an approach how to deal with cellphones and the web, and the strategy needs to be defined out of each unique situation, each country and each project. Using the approach to define it is however a good start. Mobile strategies for especially content providers must also be dynamic, change over time and have a short response time to changes in the market.

Considering cellphone interaction with the web via a cellphone interface is an essential and necessary part of any media venture inside the emerging markets, especially in Asia, the Middle East and Africa. Besides the technology issues defined below there is an essential need to take the human needs and abilities into consideration.

Technology
In principle interaction via cellphones to the web is simple. Think of the phone as a thin client on a network, but in this case a cellular network. Keep that thought in your head during the presentation below.

The possible cellphone application is then constrain by:

  • The available connectivity which is often constrained to lower generation networks, especially in emerging markets,
  • Restricted interactability is a fact due to small keyboards,
  • The small screens constrains the amount of representable data, and
  • the lack of operating system standards complicates development of general cellphone clients.

The connectivity is best faced by making the data model low-bandwidth intense. The restricted interactability is faced by making the application such that the user can predefine actions on the server, as well as having a set of default actions. Thereby the number of necessary “commands” by the user is minimized, and could in some cases be eliminated. By presenting an abstract or light version of the content on the cell phone and combine that with an easy access to the full version in the corresponding web application, the issue with small screens is addressed. Such an approach will also benefit the educational part of any project as you drive the users towards the PC-platform. Ultimately this will also improve the available bandwidth using the “supply and demand” strategy. Making sure the mobile strategy supports already in the handset built-in technology, you ensure independence of operating systems on the handset.

Network generation agnostic solutions such as SMS and almost agnostic such as EMS, MMS and WAP are choices which fulfill all the above requirements, if combined with some careful thought about what data makes sense to present on the cellular platform. The method has been successfully proven on inthefieldONLINE.net, which illustrates the proper interaction model.

If you need to present more data on the handset side, WAP is the right choice, even though the user can get a bit confused about the pricing associated even though often much lower than for SMS/MMS. For submission of data, SMS and/or MMS are still in many cases a better choice as the user is more comfortable. Another complexity you are facing with WAP is access speeds usually still are fairly low, and WML, i.e. “mobile HTML”, is interpreted/rendered differently on different cellphones.

To strengthen the user experience for those with better handsets you should compliment this solution with a client, which then could be defined for the most commonly used in the region of interest. An alternative is to establish a partnership to a handset provider, which are dominant in the region of interest.

A great part of the cellphones is of course the mobility, and thus the location of the user when interacting with the web becomes very interesting. Today the availability of location increases, and thus using that data as a part of the interaction becomes interesting. The main issues are here

  • Privacy – Violating the privacy? In some applications you really do not want to reveal where you are. In some applications you really do not want to reveal where you are. This is usually solved by enabling the user to choose if he/she wants to be tracked.
  • Billing – who pays for what?
  • Availability – Which networks support it?

All these issues will be sorted out over time, but in the cases where GIS data is available it should be used.

Importantly is that if you use as much built-in technology as possible you ensure the broadest possible market as well as increase the adoption rate. As ordinary cell phones will suffice, there is no need to buy high end and expensive cell phones. In the case of social ventures this simplifies the management of the strategy on the long term as there is less need for complex partnership models with handset manufacturers.

Billing model
The simplicity on the technology side should be matched by the simplicity in the business model to secure a satisfactory adoption rate. In regions such as India, Africa and the Middle East, people are more comfortable to pay their cell phone operator rather than to pay an “additional” bill to a third party. A strategic partnership to the cell phone operator or similar moves the complexity away from the user, and you gain control over the money flux. You are interfacing the billing from the user, and takes on some of the complexity. You as a “information service provider” deal with the payments as everything is done neatly through already established channels which the cell phone network providers already have. Still you will be able to track all the different market data you will need.

Alliances with cell phone providers gain access to GIS data and thereby map up submission according to location. The data can be filtered on location, and then using tools such as Google Map, Google Earth, Yahoo Maps, Microsoft Live Local and/or MapQuest presented to the user in an appealing way. From a marketing perspective understanding on what regions are particular active is gained and marketing efforts as well as billing structure can be focused.

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The Social Web also known as Web 2.0
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This blog was originally posted on http://inthefieldonline.net/blog.

I read an article on the Swedish business news site N24 on the web 2.0 and what that really is. I decided I needed to clear up a few concepts and wrote a Swedish blog on the subject at http://www.sundelof.net.Web 2.0 is probably one of the most discussed topics in the valley today. Everyone has their opinion on it. Personally I think it is way to over hyped and more feels like a marketing gimmick. Looking back on what the father of the web’s Tim Berners-Lee intentions with the web it all becomes clear. Web 2.0 is nothing else than going back to the original idea of the web. Less broadcasting and is more about creating connections. Moreover I rather talk about ‘‘the social web’‘ instead of the web 2.0 and the characteristics of the social web is:

  • Connected
  • Stupid yet smart technology
  • Inexpensive
  • Human
  • Immediate
  • Ubiquitous

Now that is not that difficult. Right?

During the first stumbling steps I think the web was exactly this, but as time progressed the market forces changed the game and we lost focus on the true intention and vision of what the web should be. We talk more about business models than about true needs of people. I wrote an entry recently about this as a celebration for the 15th anniversary of the web – In the Wake of the Birth of Web.

Going back to the source. I will start with a few quotes from Sir Tim Berners-Lee.

Tim Berners-Lee writes in the second paragraph of his book ”Weaving the web” where he explains how the web got created: ”The vision I have for the Web is about anything being potentially connected to anything. It is a vision that provides us with new freedom, and allows us to grow faster than we ever could when we were fettered by the hierarchical classification systems into which we bound ourselves. It leaves the entirety of our previous ways of working as just one tool among many. And it brings the workings society closer to the workings of our minds.”

He continues one paragraph afterwards: ”The irony is that in all its guises – commerce, research and surfing – the Web is already so much a part of our lives that familiarity has clouded our perception of the Web itself. To understand the Web in the broadest and deepest sense, to fully partake the vision that I and my colleagues share, one must understand how the Web came to be.”

Finally I will quote him on a topic very much relevant on what is so intensively discussed in the IT sector. Human Computer Interaction (HCI) and user friendly design, but also has some relevancy for interaction with people with disabilities.
“The power of the Web is in its universality. Access by everyone regardless of disability is an essential aspect.”

No question he knows what he is speaking about. After all he was the architect behind the Web. Brilliant people such as Vincent Cerf came later to solve the technical architectural problem as signal protocols. The latter is now the lead internet evangelist at Google

The first part of the first quote brings up what is normally referred to as web 2.0 or as I prefer to call it the social web. Obviously the first intention was exactly the one as so many now claim is the new web 2.0. We are just trying to correct our mistakes that is. Maybe this is one of the examples that the market forces not always are for the greater good for the conceptual development. They need to be there but we need to be careful not to get carried away by the first revenue model. What do we want to accomplish down the line? Long term visions should be as important the so often short term market forces.

What is the web 2.0? Tim O’Reilly presented a definition at the conference Web 2.0 in 2004 and it is described here – What is the web 2.0?. Bear in mind that the definition has slightly shifted over time so some of the content is “out-of-date”.

The discussion involves all big players such as for instance Clay Shirky at NYU (http://shirky.com) and Dan Gillmor. Dan is normally considered as the father of citizen media and is now the director for the grassroot journalism initiative at Harvard University called the Center for Citizen media (http://citmedia.org). he also wrote the famous book ”We The Media”. Clay Shirky opened up the field of social software and raised the awareness of at least some developers that social software is very different from just software.

The shift from normal software mostly focused on interaction with one user and very seldom several. Interaction between users was a truly new concept and thee were many mistakes made there. I usually recommend to all who wants to work in the field of social software to read the excellent piece by Clay Shirky – The Group is Its Own Worst Enemy – as it further emphasizes the need of structure, if yet only slight, inside the software.

More people inside the tech sphere start to realize that in order to build social software (and working inside open-source projects) you need to understand that the word ‘social’ is there for a reason. Yet I have in too many times, still do see and come across solutions that are not even close to being able to be called ‘social software’ even though they are marketed as such. They simply forgot that the social part must be there…

The second part of the quote is something that is very interesting and is intensively discussed in especially the valley. How can you make money out of this social web? Some say you cannot earn money out of social media directly but you can earn it from products derived from them. I think the truth is in between but probably more towards the latter. At least if you are looking for a sustainable business model.

Nicholas Carr, editor pa Harvard Review Letters, the man behind the blog http://roughtype.com, wrote the provoking book ”Does IT matter?” where he more or less smashes the trust put in the value of IT for any business. Many people regard him as too negative and completely wrong, but it is hard to claim that there is absolutely no value in what he says. The value of traditional IT inside the business is probably overall overrated as for now. The value of social media inside business however is still something that can provide a competitive advantage for new businesses. This is where many of the players in the valley are located. You may want to call it ‘value innovation’ if you want, but it still ‘just’ seeking a new market.

Back to the web 2.0 discussion and the existing solutions. Carr should be considered as slightly provoking and is to be considered as one of the most skeptical person towards for instance Wikipedia. Web 2.0 and as he puts it ”it’s flagship Wikipedia” is discussed in one of his more famous blog entries – The Amorality of Web 2.0. This is one of the most valid entries in the debate I have read so far and especially take note on the comments where people such as Dan Gilmor, Dave Winer and Ross Mayfield all contribute to the discussion. Carr continues the discussion in two other blog posts on the recent structural changes of Wikipedia. They can be found at The Death of Wikipedia and Now, let’s bury the myth.

Bloggers such Carr (here used as some kind of Devils advocate) keep the discussion sane and hopefully they wil help preventing the business from becoming as overhyped as in the last kaboom bubble. Considering what I saw attending the TechCrunch party in August I wonder if we are not creating a new bubble. Fortunately it seems as the whole business is not in side the bubble, which is kind of relaxing. What we can learn from the discussion in his entries and other blogs is very simple and as I put in my blog entry In the Wake of the Birth of Web: “…that successful and sustainable technology solutions all fulfill true needs of real people.”

Where does all this fit in to the society? Just look at Thomas L Friedmans in many ways ”rich of words” book ”The world is flat”. There is a incredible faith out there in outsourcing, software solutions, webbased solutions and the IT sector as a whole, including everything from call centers, video stores to software developers and CRM systems. The flatness of the world is something that is purely new to the world society and thus we are facing new challenges. We havent got used to them and therefore new issues arises. One of the more recent issues we have started to face is the legal owner structure of the web and its implications on the web. Again Carr wrote an article on this matter and it is found here – The Web is unflat. Internationally the issue was discussed at the World Summit in Tunis earlier this year.

Recently I indicated partly where I see the social web heading in the future and then more focused on the interaction with traditional media organizations. The blog entries were written in the wake of the discussions and interviews with CNN and BBC:

Obviously there is no shortage of unanswered questions, but I do not see them at all as new. maybe some of the solutions wil be slightly new. I am not sure. I more see this as an attempt to go back to the original intention with the web. Back to the basics so to say. Keep it simple stupid. and so forth Maybe it helps to label this as the creation of web 2.0. I don’t know. What I do know is that the whole concept of web 2.0 is very much overhyped.

What I do know is that the new social web is a step in the right direction. We just need to keep our focus and not become blindfolded by the need of revenue steams. We should be as creative there as elsewhere. There must be an alternative to online advertising. At least I hope so. I am getting tired of them. :)

Update: Bruno Giussani at http://giussani.typepad.com/loip/ pointed out an important error in the facts. Vint Cerf was one of the people developed the protocols enabling the web to be born. I apologize for the mistake. He also points out:
“Your point about going back to the origin of the web is right. (“connections”, by the way, not only among people but also among data). Just look at the many things that are happening now (blogs, skype, mashups, youtube), they were all ideas of the mid-1990s already, that could not be implemented because bandwidth, compression algorithms, and some other tech pieces were not there.”

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