A discussion of ecommerce, online advertising, Web 2.0, web entrepreneurship, and just making the web convert for your goals.
I’ve been thinking a lot lately about what web applications I use and why, and of course how this relates to what I’m doing at work.
Keeping things simple is considered an overused idea these days in the web application world. I’d attribute some of this to the success 37Signals has had with their applications, blogs, ebooks, and seminars that push this philosophy.
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One of the things that’s interesting adjusting to working for a much larger company now, is that the company launches products and services you had no idea were even in development. Such is the case tonight when I saw the news that Yahoo! Kickstart launched.
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Yes, like everyone else I think Facebook is a well-done and valuable internet property. They’ve executed really well, managed to steal the thunder from Myspace, and are the darling of Silicon Valley.
But until they prove they can monetize their audience in a very powerful manner, how is a $10-$15 billion valuation justified even in these bubbly times?
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Facebook announced today that they’re becoming an open platform for developers and third-party applications.
This is absolutely the right move, and is the prime example why I think Facebook ends up being bigger than Myspace in the long run.
As a recent post by Robert Young at GigaOm brings up, was Facebook “Smart or Stupid” by not taking a buyout offer in 2006?
Traffic is up according to Alexa, so one might think they made the right move and are worth more today than they were in 2006. And what’s not to think that traffic won’t keep going up as there are more college students every year, and now that Facebook is open to non-college students they can stick around after graduating.
However, what good is that traffic if you can’t monetize it well? Robert Young’s piece reports that Facebook isn’t having a ton of luck in this area. If this is true, I see two things happening over 2007. First, they’ll prove that it’s hard to monetize their traffic extremely well, as has really been the case with social networking traffic thus far. And second, social networking won’t be as hot as it was in 2006 when it was really the new and exciting kid on the block. Once those two things happen, will those huge buyout offers still exist? Probably not.
Of course, there are a lot of companies and people working on monetizing social network traffic better, so it’s quite possible that strides are made there. And if Facebook continues to grow and dominate their space, then maybe. But the numbers being thrown around in 2006 were pretty high, so I think they may regret not taking one of those deals when it’s all said and done.
Ironic that this is occurring while I’m at Affiliate Summit where many of these networks are doing business, but Jon from Wickedfire has talked to numerous sources who have confirmed this is occurring.
You can see his forum thread post about it here, but essentially Myspace is suing these networks for violating the CAN Spam Act for spamming people through the Myspace bulletin feature.
Jon points out that Myspace is seeking for two types of damages:
Myspace’s lawsuit against the networks are to ban them, and their owners from visiting the myspace.com site.
Myspace is seeking punitive damages from $20 million to $75 million PER network.
Apparently the total is over $500 million as 14-17 networks are targeted. He goes on to add:
The list of networks being sued reads like a shopping list, because they all, at some point or another drafted known Myspace spammers and phishers into their programs to promote their offers, even AFTER cease and desist letters were issued to them by Myspace.
What does this all mean? Apparently affiliate networks have been openly recruiting known spammers and phishers to promote their offers through spamming Myspace users. Many of you have probably been asked to be friends with “hot girl” profiles who then proceed to send you bulletins for all types of things. If Myspace sent them cease and desist letters and they continued to do this, you can’t blame Myspace for getting a bit upset here.
If Myspace is successful it will definitely put a major hurt on the networks being sued, potentially putting some of them out of business.
While it’s not known yet if the CAN Spam Act qualifies here, it will be interesting to see what sort of ruling occurs or if everyone settles out of court. Either way, Myspace is taking a big step here to say that spam is not okay regardless of whether it’s email or web bulletins on a social network.
It’s a bit of an estimate, but according to a recent post at Venturebeat, Friendster made $700,000 in revenue in December on 6 billion page views. This equates to making $0.12 per 1000 page views. I checked and they look to average about three ads per page, meaning they’re really making $0.04 per 1000 ad impressions, giving them an effective CPM of $0.04.
Is this good? I’m sure that low of a number shocks some people, probably bloggers and other niche publishers who get really high CPM numbers from targeted advertising, Google Adsense, or Yahoo Publisher Network.
Social networks are a different animal though, as contextual advertising doesn’t work as well when there isn’t a strong context to grab from a page. In the cases of most social networks, display banner-style advertising generates higher rates. But is $0.04 good?
I know the data of some other social networks, and I can say that this isn’t THAT shocking, but I definitely think there is room for improvement. I have some ideas on how I’d improve Friendster’s advertising revenue, but first I’d like to see if any of you out there have any suggestions. Speak up!
Announcements are all over the place, as MyBlogLog has been acquired by Yahoo! and will be made part of the Yahoo Developer Network.
MyBlogLog is pretty fun, kind of a social network for bloggers and blog readers at this point which makes it feel like a blog social network/LinkedIn hybrid, with an added voyeur twist of both seeing who’s browsing your blog or being seen reading other blogs. While I’m not sure it fits perfectly with the social network aspects, MyBlogLog has some simple blog analytics built in as well, so if you have the code for the reader widget like you see in my right sidebar, it also is tracking some basic stats for me.
The analytics it provides are basic but useful for most bloggers, and I actually find myself looking at them more often than some other analytics packages I used or have used simply because I’m using MyBlogLog to add a contact or join a community. So, simply having the location of the analytics being part of something else useful is making mre more likely to use them. They also have a few more advanced analytics that you have to pay to have access for. It’d be interesting to know what percentage of blog publishers are paying for analytics. 5-10% perhaps?
Being that I work for a company that Yahoo is a minority investor in, when I heard about the announcement I immediately started of thinking of ways that the application I head up called RMX Direct could potentially work with MyBlogLog. My immediate thought is that if bloggers using MyBlogLog for analytics, perhaps we could do an intergration of some type to provide ad network management through RMX Direct as well. Perhaps I’ll get in touch!
I’ve been a LinkedIn user for a couple of years, but never saw much value in it. It was mildly interesting, but being that I wasn’t job hunting or recruiting, I didn’t see much benefit. LinkedIn has grown in popularity recently, had some major press, and others are also seeing a lot of value in the ability to use LinkedIn for recruiting.
It’s great to see LinkedIn being successful with their subscription services, but is it still anything more than a recruiting and sales tool? Is that enough to keep powerful and busy business people listed and engaged? I’d imagine LinkedIn has a plan on additional services they could provide soon, because I feel like I could and should engage with it more, yet I don’t. At least now that I’m in a position where I’m looking to hire great talent, expanding my LinkedIn network is important for that reason. Along those lines, you can now find my public profile on my About page for this blog.
As we continue to build RMX Direct at Right Media, the situation comes up where we need to test new features or debug a problem using a site that is owned by an employee so that it’s not a real customer having to test for us.
Previously, we used to use a site known as Whoomp.com operated by myself, Cameron McNeeley, and Dave Barousse. It worked quite well, except that the site required the constant updating of content to keep up high enough traffic levels so that we could test effectively, and some ad networks require certain traffic levels to accept your site. We have jobs that we love as well as friends and family to be with so we didn’t have really have time to keep Whoomp.com going, so we sold the site.
One might suggest that we just create some quick test site, but many of our tests require steady traffic levels, users from many geographic regions, and that we have enough traffic to get accepted by most ad networks.
As it became more obvious we were in dire need of a legitimate site, the former Whoomp.com team huddled up to brainstorm and create a site that fulfilled the following requirements:
Additionally, we decided it’d be great to “live blog” the launch and growth of the site so that we could educate our publishers and anyone else out there interested in starting a website with advertising as a revenue model. The focus will be on growing the advertising revenue, and how to work with RMX Direct to do so. We plan on sharing all our traffic and advertising revenue stats in the process. The proof is in the pudding right?
I also plan on blogging about any successful marketing tactics, interesting stories, or anything else that seems blog worthy related to it.
After 15 minutes much deliberation, we came up with VoFiles.com. VoFiles is a play on the Digg-style voting site, except changed to voting on social network profiles in different categories. Is it a unique and genius business model destined for huge success? No, but we hadn’t seen such a site for voting on profiles, and it satisfies all the criteria laid out above.
It was quick to build using the open source code from Pligg, word has already started to spread a bit and random people are adding content, and if it catches on in any of the social networks we should be able to generate enough traffic to make it a site we can test with.
Naturally, we can use any help you can give to get the ball rolling. If you’d like to link to VoFiles, submit profiles, vote on profiles, subscribe to the RSS feed, or provide any suggestions, you are welcome to do so.
Expect a post soon outlining our initial advertising setup and strategy.
Now, for our first of what will hopefully be weekly check-ins on VoFiles’ progress in growth and advertising. The following data is all for the previous week of when I report it:
NOVERMBER 26-DECEMBER 2nd
User Accounts: 10
Visits: 65
Page Views: 546
Ad Revenue: $0.32
Overall eCPM: $0.18
Google Page Rank: 0/10
Alexa Rank: 594,900
Alexa Graph:
RMX Direct Advertiser Report: (click to enlarge)
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