Posts filed under 'Microsoft'
It looks like it’s really going to get interesting in the battle for publisher ad space. In the last year Microsoft has started to become much more serious about locking up publisher properties, and they’ve done so again with WSJ.com and its related properties.
It’s great for large publishers that they’ll now have Yahoo!, Microsoft, Google, and every other ad network in the world fighting for their inventory. The smart publishers are going to take advantage of this, and use technology and negotiation to make a killing. I’d advise when they partner, to work with the most open partner.
This is also good for AdCenter advertisers because in the past the AdCenter content network didn’t provide that much volume. Microsoft hasn’t opened up a program like Adsense or YPN that any publisher can sign up for, so the content network has been limited to Microsoft non-search properties and other top publishers they have relationships with. More relationships like this one will expand that content network base, especially if you’re a financial advertiser.
January 30th, 2008
MSN AdCenter has announced that they’ve 509.entry”>launched their content network to be available to advertisers. But my question is, where’s the content?
Well, I actually know that it’s supposed to be on MSN content properties and any other high-level publishers they may have ad distribution relationships. However, what’s interesting is they don’t have a publisher network out there along the lines of Adsense or YPN to distribute these ads. It seems like they’d be better off launching both around the same time, although the theory may be that getting the advertisers into it now will prime the pump for the publisher network when they launch it. And you know they’ll launch it especially since they announced “ContentAds” over a year ago.
I’d actually like to see another player in the contextual network market. As any of you who have been reading my blog know, even though I work for Yahoo!, I’m all about competition helping publishers earn more money. And of course helping provide the tools to make that happen….
August 21st, 2007
It’s been a crazy couple of months. Not only did my
Conversion Rater › Edit — WordPress2007/04/29/yahoo-acquires-right-media-im-a-yahooligan/”>employer agree to be acquired by Yahoo!, but our competitive landscape has changed dramatically with Google acquiring Doubleclick, Microsoft acquiring aQuantive, WPP acquiring 24/7 RealMedia and AOL acquiring AdTech AG to go along with what they already own in Advertising.com.
Additionally, there are still some other large players who are also in the game such as News Corp./Myspace/Strategic Data Corp, and IAC/Ask.com.
Obviously this is a big land grab for these large companies, combined with trying to get innovative companies who are pushing things forward in online advertising. The Wall St. Journal talks about the ad exchange concept and how it relates to these acquisitions.
The media and blogs have been covering these stories quite a bit, but I’ve seen a lot of writers and commenters really not having a great gasp on what pieces of the advertising business each company has now, how they all stack up, and what it all means going forward. So, I’ll try and help out.
Who’s Got What?
After the acquisitions are all complete, we need to stack up all the areas that matter in the online advertising battle that’s taking shape. (A checkmark means they have an asset, the 1/2 means they do to some extent but not to the same level as the other companies).
Asset | Google | Yahoo! | MSFT | WPP | AOL | NewsCorp | IAC/Ask |
|---|
Search Inventory |  | | | | |  | |
Search Ad Platform | | | | | | | |
Contextual Network | | | | | | | |
Display Ad Network | | | | | | | |
Ad Serving | | | | | | | |
Ad Exchange | | | | | | | |
Ad Agencies | | | | | | | |
Owns Own Content | | | | | | | |
Now that we have our handy chart, let’s break it down by asset.
Search Inventory
This refers to the company actually owning search engine ad inventory, which basically means do they have significant search results in which they can show ads against. Search inventory is generally very valuable to advertisers and generates good revenues for the company because users often have an intent to buy or act and the technology can match ads to their intent.
Google is the king here with over 60% of the market with Yahoo also having a nice chunk, then it tapers off with Microsoft and and IAC/Ask.com. We’ll give News Corp. a 1/2 because Myspace does have a search feature that creates a chunk of inventory that Google currently monetizes for them.
Search Ad Platform
Just having search inventory doesn’t mean you have a good advertiser platform to monetize that inventory. Google has Adwords, Yahoo has Yahoo Search Marketing (Panama), Microsoft has AdCenter, and Ask.com has their Sponsored Listings. We’ll give AOL a 1/2 because they have a white-labeled version of Adwords to buy their search inventory separately.
Contextual Ad Network
Now that we know who has strong search ad platforms, do they have a publisher network in which they can give their advertisers additional reach through placing contextual ads on publisher sites? Google leads the way here with Adsense being the strongest ad network. Yahoo! has the Yahoo Publisher Network which has played second fiddle to Adsense but has a strong publisher base. Microsoft has announced a beta of their publisher network, but as far as I know isn’t accepting invitations from it anywhere so it gets a half point. Ask.com rounds out the group with the announcement of their contextual program as well, although I haven’t seen this in action anywhere either so we’ll give them a half instead of a full check mark.
Display Ad Network
While contextual networks are great, they aren’t the only ad game in town as the display ad has continued to be the leader in high-dollar brand advertising, and has also made a strong run over the past few years in direct response. Ad exchanges, optimization, and increased use of data and technology has allowed the display ad to make a comeback. Although some would argue that it never left.
I was tempted to give Google a half mark on this one, as their display advertising efforts through Adsense haven’t set the world on fire, but their acquisition of Doubleclick makes it fairly obvious that this asset will exist fully in the arsenal. While Doubleclick isn’t an ad network today, it’s likely Google is going to integrate/leverage display capabilities to have a serious display network.
Yahoo! has such a vast amount of content and so many properties that they essentially are an ad network just on their own site. To add on though, in the agreed acquisition of Right Media they also add on a good sized network in Right Media’s Remix Network. Additionally, the Right Media Exchange has over 60 ad network clients, so the display ad network business is definitely a strong point for Yahoo! moving forward.
Microsoft is now a stronger player in the display ad network business by buying aQuantive which has a high-quality network in DrivePM. They also have started to act a bit like a network with representing Facebook’s inventory. WPP is a player with the acquisition of 24/7 Real Media which has a strong display ad network. AOL definitely gets a strong checkmark as the owners of one of the largest display ad networks in Advertising.com.
One could argue that News Corp has a display ad network of it’s own properties such as Myspace, FoxSports, Scout.com, AmericanIdol.com, etc. However, they’ll get credit for that in the “Owns own content” category. IAC/Ask is in a similar situation with the content properties they own, but neither are quite display ad networks (yet).
Ad Serving
Having networks is a primary driver of revenue due to the nice margins, but there is an extreme amount of power when you control the ad serving infrastructure of the web. It’s another example of how the online advertising wars are playing out on many fronts. It’s usually quite easy for publishers and advertisers to switch ad networks they work with, but there is usually a much deeper integration with your ad serving partner.
Google has long been rumored to be building their own ad server, but the Doubleclick acquisition gives them both advertiser and publisher ad serving. Yahoo! has had a strong internal ad server for a long time, and the acquisition of Right Media gives them an immediate ad server to offer to clients as well. Microsoft is now fully capable with the Atlas and Accipter ad serving platforms being part of their acquisition. Atlas is one of the leading advertiser and agency ad serving platforms, while Accipter is stronger in the publisher realm. WPP brought 24/7 Real Media’s Open Ad Stream ad serving platform into their war chest, which has a strong publisher base as well. AOL also purchased Ad Tech:AG, a German ad serving firm that will be part of their Advertising.com unit. One would have to think they have plans to roll this out and start pushing their own ad serving technology.
News Corp comes in with a half-check due to their acquisition of Strategic Data Corp. It’s not clear yet whether they wanted to just own that technology internally, or actually ever roll it out to any clients.
Ad Exchange
Perhaps my favorite piece of the puzzle! Right Media’s success combined with Doubleclick announcing their own soon-to-be exchange, and general buzz about exchanges everywhere leads me to believe it’s a key piece of the advertising wars. Why? Well, exchanges remove friction, connect partners, and provide a common trading platform in which all the players can benefit. Whoever can build the largest and most successful exchange will continue to attract buyers, sellers, and brokers of all shapes and sizes which will grow their advertising ecosystem. An exchange also can tie in to the other categories in this post such as ad networks, ad serving, and other technology.
Google gets a half-check because they have an exchange in the works with their acquisition of Doubleclick. It’s not a full check because it isn’t launched yet, and I’ve heard rumors from some that it could just be more like a big ad network. Without knowing all the details, it didn’t make sense to give them a full check yet. Yahoo! gets the only full checkmark in this category by acquiring Right Media. Right Media is a full-blown exchange, has been for over two years, and has over 20,000 companies buying and selling via the technology to the tune of over 120 billion ad impressions per month.
Ad Agencies
Ad agencies are important because they are essentially the controllers of the majority of brand advertising dollars spent on the web today. They choose the tools and platforms they want to work with, and those companies benefit and will continue to benefit in the future by getting more access to the ad spend from the agencies. While I don’t think it’s totally necessary in the advertising wars to actually own agencies as a couple of companies now do, but it is important to have your ad tools and platforms in heavy use by the agencies in order to get more access to the dollars.
Beyond having agencies buying from Adwords, Google now has their hooks more in the agency market from the DART For Advertisers product they control from the Doubleclick acquisition. DART for Advertisers is one of the most commonly used ad servers in the agency world. Yahoo! does have agencies buying through Panama, but currently has no tools being used by agencies beyond that.
Microsoft is now an agency powerhouse. Not only is the Atlas ad server an agency favorite, they also now own a significant share of the agency market from the aQuantive acquisition. It’ll be interesting to see how the agencies owned by Microsoft choose to work with the other major players in the space. WPP is a conglomerate of agencies, so it’s safe to say they’ve got this business covered. Will their agencies adopt Open Ad Stream as their ad server of choice?
Owns Own Content
One thing that I think is sometimes lost in all this is the power of the companies that own and control their own content. It puts you less in the position of relying in outside companies to actually have a place to serve your ads and provide advertisers value. It also allows you to test and develop using your own properties instead of having to put clients through it, and it can be leveraged in many other ways such as behavioral targeting.
I didn’t clearly define whether search results count or not as owning your own content. However, Google obviously leveraged this a great deal by getting advertisers to advertise on their search results that they then can also push out through their content network. Either way, Google qualifies for a full check since they’ve also continued to grow their services like Gmail and Google Calendar where they can show ads, but also in acquiring YouTube.
Yahoo! is the big daddy of owning your own content. The Yahoo! properties are vast and large and in almost every key vertical. As strong as Google is in search, Yahoo! holds a similar edge in content ownership. An example of the properties they own which usually fall right around the top of all web properties in each vertical: Yahoo! Mail, Yahoo! Finance, Yahoo! News, Yahoo! Sports, Yahoo! Search, Yahoo! Calendar, My Yahoo!, del.icio.us, Flickr, Yahoo! Answers, Yahoo! Video, etc.
Microsoft is also strong in the content game with MSN, Hotmail, MSN Search, etc. They aren’t quite up to Yahoo’s level but are a serious player. AOL is similar as well with all the AOL verticals and properties and definitely deserves a full check. News Corp is good as well with the behemoth known as MySpace, Fox News, Fox Sports, Scout.com, AmericanIdol.com, etc. Not to be left out, IAC is yet another strong content player with Ask.com, Ticketmaster.com, Match.com, CitySearch, CollegeHumor, and more.
Summary
Where does all this leave things in the battle for online advertising supremacy? Assuming all the acquisitions go through, there is the integration challenge for each company to go through, as well as prioritizing what they’re going to execute and how. Then they actually have to go execute on it. It’s impossible to call a winner at this point, but looking at the chart it’s clear to see that Google and Yahoo! are the best positioned to fight out the battle, with Microsoft also close enough to keep their name in the mix.
Looking at Google and Yahoo! specifically, they each have some strengths and weaknesses that will make it very interesting. Google has the advantage in search monetization, the Adsense network, and in ad serving. Yahoo! has strengths in their owned content, ad exchange, and display ad business. Which company can close the gaps on the other, and who will move forward with the right strategy over the next few years? Only time will tell, but you can bet it’s going to be fun to watch and participate in. I also wouldn’t count out the other players such as News Corp, AOL, etc. as they are all capable of making moves, and are each very successful in their current strong areas at this point. We also may see many deep partnerships come into play instead of having each company trying to own their own asset. Let the fun continue.
June 18th, 2007
Marshall Sponder turned me on to a post from Ian Thomas at Microsoft confirming the rumors that Microsoft is building a web analytics application code named Gatineau.
As noted in the post, Gatineau is built from Deepmetrix which Microsoft acquired last year, and they look to be aiming at a similar market as Google Analytics. Although Ian says they hope to not repeat the same problems Google Analytics did when it launched which was outages and slow response.
The functionality is not released at this point, but Marshall hopes that much of the MSN AdCenter tools and data are integrated as well, and even goes on to suggest that Google Analytics should snatch up Quantcast and integrate them.
Quantcast is definitely a cool service, and it seems to me like a useful acquisition for either an analytics company or even an advertising network or advertising technology company. Having that data on publishers integrated with an advertising solution would be rather handy.
Regardless, there’s no launch date on Gastineau, and from Ian’s post saying he hopes they get out in 2007 it could be a bit of a wait.
January 13th, 2007
A space that’s been full of promise for the past few in the online advertising world is behavioral targeting. It’s actually probably been talked about far more than it’s been put into practice, but most studies and tests seem to show that it always provides much better results than showing users random ads.
Who’s been doing it? Well, Yahoo has been a leader due to all the data they have on a user as well as the massive reach, and a couple of ad networks with a focus on it are Tacoda and Revenue Science. You could make an argument that Google is doing behavioral targeting by showing you ads based on what you’re searching for, but I’m not sure it fits the standard definition perfectly.
The concept is great. You store data on users and where they go and what they do, then find them in other places and show them ads related to what they are interested in. The problem is that to work effectively companies end up needing a lot of data and a massive reach to find users they have information on in the right places to show them ads. It’s really been the primary reason that this type of targeting has been slow to pick up.
Now comes news that Microsoft is getting serious about it. I guess they’ve been testing it for over a year, but I was surprised that they weren’t already offering this to advertisers. After I got over that, I read an interesting post on HipMojo.com that theorizes that Microsoft will acquire an advertising network to expand it’s reach. Being that reach has been a problem for behavioral marketers, this seems to make sense. Especially when most people think AOL’s purchase of Advertising.com was a smart move for AOL. Who does HipMojo.com suggest they might acquire?
- aQuantive
- Valueclick
- Tribal Fusion
- Revenue Science
- Tacoda
- etc.
aQuantive is the operator of ad server Atlas DMT which is heavily used by agencies and large online advertisers. That could potentially provide a lot of reach in some ways, but Atlas has not been that known for having publisher relationships, although they recently acquired ad serving company Accipter which is more known to be an ad server for publishers.
Valueclick operates a number of businesses such as Commission Junction so it might be more than Microsoft needs if they’re looking for reach, but Valueclick’s ad network is one of the largest.
Tribal Fusion is more of a pure play network and may have a higher inventory quality than Valueclick, but it’s reach is most likely less.
Revenue Science and Tacoda are both leaders in behavioral targeting so that may make sense for technology reasons, but they also don’t have the reach of the larger players mentioned above.
Many interesting options, and it’s the first prediction I’ve seen that suggests Microsoft would acquire an ad network. In some ways I think it’s unlikely because Microsoft may figure they have the reach they need with all their properties, but I’m not sure they really do on the level they need to make it work. I’m not sure advertisers are thinking of going to Microsoft today as much as Microsoft would like, and maybe an acquisition like this would make them more of a player in the online advertising space.
December 31st, 2006
Publishers and bloggers who have had the experience of having their content “Dugg”, “Scaped”, or featured prominently on any other social news or bookmarking sites have seen the short traffic spikes that tend to occur from this experience. Many have commented that beyond those huge traffic spikes there isn’t much long term value from having your content featured, and why submit to them at all if your content isn’t going to make the front page when the traffic spike occurs?
A recent experience with organic search results and some research has caused me to believe that the long term value proposition is changing and will get even better. It also sheds some light on which social sites may grow in traffic, and which of the three major search engines indexes them the best.
The Initial Query
My parents have an ecommerce site primarily selling an ergonomic stool called the Swopper Chair. I provide some technical consulting for them and I needed to look up some PHP shopping carts. So I did a Google search for “best php shopping cart”.
I started reading through the results, and noticed the result from Digg half way down. Knowing what Digg is, I figured it’d be a good recommendation and probably have some comments and additional links that might help me out. I read through the comments and ended up clicking through to both the Dugg URL and some of the URLs in the comments.
This made me wonder if there is potential for organic search results for social news and bookmarking sites to drive long tail traffic to your site, maybe even if your article never got many votes and never made the front page of the site.
The Tests
It was time to start picking some search queries and see what kind of results appear from social sites and what about those sites makes that happen. I’ll link to the query along with what social sites have results and where the original article ends up in the results.
Test 1: john battelle keynote
This was a search term from the post I made from John Battelle’s keynote at the Blog Business Summit last week that did not get many votes on the social sites, and got a few links to my post from the blogosphere.
Google:
- 5th – Netscape
- 7th – Digg
- 11th – ConversionRater (my post)
The result of that is if I hadn’t submitted my article to Netscape and Digg I’d have no chance of getting any visitors who didn’t pass the first results page. Of course, the visitor has to click through Netscape/Digg to get to my actual article, but the chances of that are decent based on how those sites are structured.
Yahoo Search:
No results from the social sites. Either Yahoo doesn’t index them well, or index them quick enough.
MSN Live Search:
- 10th – ConversionRater
- 13th – Netscape
Interesting that Digg was not here at all when Netscape was listed.
Summary: Google provided the best and the most beneficial results for using social news to get higher rankings for an article than I could get on my own without submitting it.
Test 2: yahoo invests
This term is from the title of a more popular article than our first test. This one is from SmartMoney.com to the tune of 137 Diggs that was on the Business and Finance front section on Digg, and I also made a blog post with the same phrase in the title.
Google:
- 3rd – Digg
- 5th – Searchmob (A Digg like site from John Battelle about the search industry)
- 6th – SmartMoney.com Article (Actual article that was Dugg)
- 7th – ConversionRater blog post
Solid results, and the presence of social sites and linking between them and my blog post allowed this one story to take 7 of the top 10 search results, even though Yahoo has invested in many, many things over the years. This provides a lesson that sites like Digg hold a huge page rank and authority now that it ranks higher than most media outlet sites that have reported on Yahoo investing in various things.
Yahoo Search:
- 17th – ConversionRater blog post
- 21st – SearchMob
- 23rd – DuggMirror (site that mirrors popular articles on Digg)
So where the heck is Digg? They haven’t been on either test so far. Does Yahoo not index Digg? Now that Searchmob has shown up on two engines, maybe it’s an important site to add to the submission mix even though it’s not as well known as others. This is the only story I’ve ever submitted there, so that looks promising. Yahoo also had much more varying results instead of just the Right Media investment story, so perhaps Google’s top results are more time-sensitive.
MSN Live Search:
- 2nd – ConversionRater blog post
- 11th – SmartMoney.com article that was Dugg heavily
- 17th – Digg
- 19th – SearchMob
Live Search likes my blog the best which is great, but also interesting to see SearchMob popping up again in the top 20.
Summary: Google’s results make Digg and Searchmob look especially important to get higher rankings. It doesn’t look like social sites matter to Yahoo, and MSN results are mixed.
Test 3: toyota logo
A few weeks ago my friend Mike Rundle had a little run in with Toyota based on a company working for them taking the 9rules leaf logo and barely changing it for a site they were running. I figured this search query might be a bit harder to rank high on, so it’d be interesting to see if the social networks helped out.
Google:
- 6th – BusinessLogs.com original post
- 10th – Digg
- 11th – Netscape
- 20th – Reddit
Not bad, but the social sites might not help all that much as the original post would probably get clicked on more. It is interesting to see our first sighting of Reddit.
Yahoo Search: No results
Ugh, Yahoo hates social sites and blogs!
MSN Live Search:
- 4th – Digg
- 8th – BusinessLogs Original Post
The Digg listing is a big help here at potentially getting more search traffic.
Summary of Tests
Even though it was a pretty quick test, and the search terms I tested aren’t that competitive, it’s clear that submitting your site to the social news services can help drive more traffic to your site through organic search.
I think we can also see that Google seems to embrace fresh content and the social news sites more than Yahoo and MSN, and Yahoo definitely isn’t a big fan. This is probably not a big deal as most publishers are primarily concerned with Google traffic anyway.
What does this tell us about the social sites?
Digg and Netscape were definitely the most commonly found sites, and I ran some more additional quick tests and found that Netscape seems to also show up ahead of Digg in many cases. I had an extremely hard time finding Reddit or del.icio.us in any results. Why is this? Let’s take a look at why each of these sites may or may not rank highly:
Digg:
- Lots of link popularity and authority. 8/10 Google Page Rank (if that means anything).
- Uses title of article in the page title well.
- Article title in an h3 tag.
- Uses title in search-friendly URL.
- Community comments make the page have more text and makes the Digg listing page like an article itself. It can provide more keywords and variety.
- They provide incentive to blog about their stories (and thus get more link popularity) by listing the Digg users who blogged about the story with a link back to their blog.
- There are sites like Duggmirror and blogs that basically just republish Digg listings and content so it drives more links.
Netscape:
- Even more link popularity than Digg, but this is a benefit of Netscape.com’s long time place on the web. 9/10 in Google page rank. This could account for why Netscape sometimes comes up ahead of Digg for the same stories.
- Uses title of article in the page title well.
- Article title in an h3 tag.
- Uses title in search-friendly URL.
- Community comments make the page have more text, but usually not as many comments as Digg.
- Didn’t see any incentive to blog the stories.
- Probably not as many mirrors or sites republishing their content as Digg.
Reddit:
- Decent link popularity at 7/10 Page Rank, but not as good as Digg and Netscape.
- Uses title of article in the page title well.
- No header tag around article title (ouch).
- Does not use the article title in the URL.
- Community comments make the page have more text.
- Didn’t see any incentive to blog the stories.
- Probably not as many mirrors or sites republishing their content as Digg.
del.icio.us:
- Link popularity is good and similar to Digg at 8/10 Page Rank.
- Does not use title of the article as the title of the page.
- Uses h4 tag for article headline.
- Does not use the title of the article in the URL.
- Instead of it really being comments and a discussion, users leave notes about the bookmark. They are usually very similar notes.
- No incentive to blog the stories.
- I’ve actually heard before that del.icio.us blocks search engines from indexing it with their robots.txt file. I haven’t researched if that’s true, but judging from how they have their bookmark pages set up it does not appear that they are trying to get good organic search results. I did find their tag pages listed in some search results however.
Searchmob:
- Low link popularity, currently showing a 0/10 in Page Rank. The root domain of battellemedia.com does have an 8/10 though, so that probably carries over.
- Uses title of article in the page title well.
- Article title in an h4 tag.
- Uses title in search-friendly URL.
- There is the potential for comments, but since it gets less traffic there aren’t many comments.
- It does take trackbacks which can encourage blogging the stories. Didn’t look too common though.
Social Site Summary
Based on looking at how they have set things up, Digg and Netscape are positioned the best to continue to grow from organic search results. This will be a key to break out of the tech audience and into the mainstream web userbase. If users find Digg through Google results they may be inclined to stick around. Also, as publishers learn about the value they can get from having their articles submitted to these sites, Digg and Netscape will get more submissions while other sites won’t.
It seems to me like Reddit and del.icio.us are missing the boat here and not doing some very easy things they could do in order to get their pages show up more in organic search. Do they not want traffic?
November 3rd, 2006
As 2006 began I made a set of predictions for what I thought would happen related to web applications, comipanies, and “Web 2.0”.
We’re two-thirds through 2006, so I figured it was a good time to revisit how many of them have come true, and if any are still likely to occur in the rest of 2006.
1. RSS will become two-way with the help of 175.entry”>Simple Sharing Extensions.
Hmm, well, this is slowly improving, but I don’t think I really nailed this one. Hopefully we’ll see more of this in the future but the buzz around it seems to have died down or just moved behind the scenes.
2. Social news site Digg will expand into other content areas and media types and then will be acquired.
I was half right on this one. Digg did indeed expand into other content areas and media types, but no acquisition has occurred. Will that still happen? There hasn’t been any buzz around it lately, and Digg has gone through some recent problems as bloggers have noticed that Digg might not be as democratic as we thought, and they’ve lost some top users to Netscape’s offer to pay top social news finders.
Digg also faces competition from other social news services like Reddit, Newsvine, and Netscape, and while none of them has gotten to Digg’s level, it’s still early in the social news race. There are also numerous sites launching all the time which work just like Digg but are focused on specific verticals. It may be that what they’re doing isn’t unique enough now to really warrant someone wanting to acquire them that badly.
3. Web 2.0 will be looked down upon as a buzzword, and it’s usage will drop off dramatically.
This has definitely occurred, and more people seem to be moving past the term into just accepting things as new web applications. We’re also hearing “social web” or “social media” for a lot of Web 2.0 applications.
4. Face-recognition photo application Riya will be acquired by a major player.
Oops, didn’t happen yet either. Riya switched up their model a bit and are taking on an even bigger challenge of web image search with their facial recognition technology being a big part of that mix. I’d say at this point an acquisition in 2006 is unlikely, but I wouldn’t rule it out in the long term.
5. Some ecommerce shopping applications using the more recent advancements in social web technologies will be developed and will succeed.
Web shopping seems to move a little slower than other applications, but we have seen some cool new shopping applications. Jellyfish probably has made the most noise this year with their Value Per Action advertising model, but taking a look at this Alexa graph it doesn’t look they’ve had much traffic uptake from consumers. Of course, don’t always trust Alexa, I think Jellyfish is compelling although not revolutionary, but has a long way to go before it’s a major player. 
6. Google Analytics will again drop the hammer on the web analytics industry.
Another one I missed, there hasn’t been much out of Google Analytics besides finally opening up to the public. Google may be spread too thin in this case, or maybe they have no new analytics ideas, but they haven’t done anything special with it since launching it.
7. A forward thinking company will build technology to support transparency, efficiency, and relationships in the online advertising business.
Hey, what do you know, Right Media is doing this. Okay, I’ll admit this was a loaded prediction when I knew it was happening. Still, I think we’ve made great progress in 2006 thus far, and the rest of the year and 2007 could be really special.
8. Microsoft will launch a contextual advertising network that will either be huge, or fail miserably.
They have started issuing beta invites for advertisers to particiate in their content ad network. So we don’t really know yet if it will be a success or not. There hasn’t even been much detail yet on what the service will consist of, but if Adcenter is any indication it could have some interesting features, but be very IE-specific and bug heavy.
9. Two to three new startups will be so cool and successful they will make the heroes of 2005 like Flickr and del.icio.us seem small and insignificant.
I think YouTube makes a strong case for this being a correct prediction, and Digg has also been pretty cool and successful, although neither of them have been acquired like Flickr or Delicious. Of course, let’s recall that those two were not acquired for huge amounts of money though.
10. The venture capital investments and acquisition bubble will heat up even more, then deflate in the 2nd half of 2006 after a number of companies fail..
It seems as if things have cooled a bit in the 2nd half of 2006. Rojo was recently acquired by Six Apart, and there have been some recent venture capital investments but nothing too crazy.
Overall
Not bad, but I think I can do better with future predictions. I think I’m just early on a few of them, and maybe flat out wrong on one or two.
September 10th, 2006
It was announced earlier this week that Microsoft has won an advertising deal with Facebook, and terms weren’t disclosed.
Shoemoney seems to have a source saying the
deal came in around $850 million, others hear
it’s more like $200 million, but without knowing exact terms beyond it involving display advertising and sponsored listings it’s hard to really analyze the details too much.
Steve Berkowitz, senior vice president of the online services group for Microsoft, said ads would be made for Facebook, but they could also be aimed at any of MSN’s various Internet properties, which have a total of 400 million users worldwide. At the same time, ads running on MSN properties may also appear on Facebook, depending on what audience the advertiser wants to reach.
Also according to the Times:
Phil Leigh, president of Inside Digital Media, a market research firm specializing in digital media, said of the deal. “But Facebook is also a legitimate test bed, a place where Microsoft can test new technology in a commercial context,’’ he said.
“What we’ll see is Microsoft attempt to do some fairly leading-edge type of things, involving banner ads, animation and interactivity,’’ he added. “Whatever technology they develop and use effectively in Facebook, they’ll be able to use it elsewhere.’’
Couple those with Steve Ballmer’s quote back in May from Red Herring:
“...think of us as becoming the eBay of advertising where we will bring together buyers and sellers in an online marketplace.”
Looks to me like Microsoft just made the first big play towards their exchange marketplace, and Google’s really had their own “private” exchange for a while with Adwords/Adsense.
Already I see some difference in Microsoft’s ideas from
other exchange marketplaces out there, and that they are exclusively representing Facebook’s advertising inventory. Is that really the best thing for Facebook long term? Sure, it helps with their guaranteed cash flow if Microsoft will throw hundreds of millions at their inventory up front, but doesn’t that mean in an open advertising marketplace they could make even more money if anyone could buy from them directly?
Microsoft is going to be taking a sizeable cut of any ad showing up on Facebook. Is that really the most efficient and profitable thing for Facebook? How much incentive does it provide for Microsoft to work their asses off when they’ve got the inventory locked up? What if Microsoft had to continually compete with others to win access to Facebook’s inventory?
Based on these things, I’d say Microsoft is the winner in this deal providing that Facebook’s inventory is worth what they’re estimating.
As Microsoft, Google, and others continue to move into the advertising marketplace/exchange space over the next couple of years, I hope people realize that buying exclusive access to inventory does not constitute providing a true advertising exchange.
August 25th, 2006
Reviews like this haven’t made me too anxious to dive into MSN’s AdCenter product to buy advertising.
I wonder how Microsoft feels about the uptake so far. The product was years in the making, and there just hasn’t been much buzz or positive experiences to point to so far.
I’ll give it a spin soon to see for myself, but haven’t read anything that’s motivated me to do so.
June 13th, 2006
After the initial Google Spreadsheet announcement, blogs are buzzing with some of the biggest voices bashing Google, some defending them, and others just questioning their intent.
The complaints seem to range from Google getting distracted from their core mission to just putting out incomplete or bad products.
I disagree with both ideas. First, their core mission has been organizing information and allowing people to find it, and the tools they’ve been building and releasing all do have to do with organizing and working with information. And, at this point their core revenue model is advertising from Adwords ads showing up in search results and in Adsense. The main dangers to that revenue model are someone making it obsolete in some way, or Google losing search volume and losing Adsense publishers. Creating these free tools people use keeps people involved in the Google brand, thus making searchers more likely to use Google Search, advertisers more likely to think of advertising with Google, and publishers more likely to work with Adsense.
As to whether the products are revolutionary enough doesn’t matter that much. Google Spreadsheet isn’t revolutionary, and it’s not better than Excel. However, it’s good enough for a lot of Excel users, it’s free, and it’s on the web meaning users don’t need to fumble around with if it’s installed or not.
Here’s a way I like to think about web product development. When my 4 year-old daughter needs a spreadsheet application to start doing her first school projects or financial work on it, which is she more likely to use? Pay $269 for Office to get Excel? Or use a free and simple web-based application like Google Spreadsheet? I know which way I’ll be pointing her when that time comes.
That’s the thing, Google has time. The product doesn’t need to be perfect now, they’ve got the size and momentum that they’ll get users simply on their name and their Google-like ability to make things pretty darn easy to use. Will they be the best spreadsheet application in 8 years when my daughter needs it? I have no idea, but they should probably be trying.
June 7th, 2006
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