Good, if painful, signal from New MySpace Leadership

Today announcements of sharp people cuts at MySpace hit and hit hard.  This is a painful step, and my sympathies go out to any employee impacted.  I take no pleasure or glee in poking fun at this.  I’m sure that in the coming days, plenty of press will focus on more salacious elements of the moves, the pain inside MySpace, whether offices are remaining open, etc.  The story of growing so quickly, getting bought by News Corporation, followed by the rapid flattening of growth–all within the span of a few years–is just too much of a story to pass up for many.

That’s not my focus.  Instead, I’d like to write and applaud Owen Van Natta and his exec team for moving quickly to cut down while they try to figure out what to do.  In a post I wrote upon the announcement of Mr. Van Natta’s appointment to the role, I suggested that I’d be watching for 3 things–(1) a focus on scenarios, (2) execution, and (3) any cultural phenomenon starting in MySpace versus the other tools (Twit, FBK, etc.).  Given that it’s been less than one month, I’d say that taking the step of cutting back this fast and this hard is an example of execution.  It’s a painful sign, but a good one. I’d not expected such decisiveness here to be honest.

I think this is a good move, not just because it helps signal an execution focus.  I think it also helps the team that remains get hunkered down to figure out what the heck they’re actually going to go do.  The features and scenarios that might help them get ahead are not ones that should take tons of people.  Instead, they need a tight focus with highly motivated superstars–hard to do that when you’ve got wave after wave of layoffs.  Better to just get the cut done big and fast.  So kudos to the leaders of MySpace for having the courage to get after this fast.

MySpace still has miles to go before it sleeps.  But I’d say that this is on the whole a good sign, and I’ll be interested to see what’s next with them.

Filed under: business, social media , MySpace, News Corporation, Social network

I’d listen to Jon Stewart before Chris Anderson on fixing media’s business model

Image via Wikipedia

TechCrunch summarizes Wired Editor-in-Chief Chris Anderson’s rules for pricing on online media by calling them “counterintuitive.”  Author Erick Schoenfeld, writes that Mr. Anderson “articulated something that is now increasingly becoming obvious: As products go digital, their marginal cost goes to zero.”

“This is the law of gravity online,” says Anderson. “Everything that becomes digital will become free. There will be a free version, either you will be competing with free or giving it away for free and selling something else. If it is not zero today, it will be zero tomorrow.”

He then goes on to summarize Anderson’s new “rules”, which appear to be:

1. The best model is a mix of free and paid
2. You can’t charge for an exclusive that will be repeated elsewhere,
3. Don’t charge for the most popular content on your site,
4. Content behind a pay wall should appeal to niches, the narrower the niche the better

I’m scratching my head a bit here, and I’d love to have read more evidence of this actually working at mass scale. There are a bunch of counter-examples that a hard-headed business guy like me might push back on here with a hearty WTF.   First off, some counterexamples.

The best model is a mix of 100% pay / 0% free, like World of Warcraft.  It’s media IMHO, you want onto their servers, you pay to be there.

Any packaged software (or pharmaceutical for that matter) has a marginal cost of zero, it is still for pay.  I reject the idea that media–becuase its marginal cost is zero–cannot be for pay.  Plenty of other high-value products have zero marginal costs and extract high prices.  Linux and Windows have been two versions of digital OSs for more than 10 years.  Windows still has the vast, vast majority of revenue and unit share.

Plenty of authors are finding opportunities to charge for their content–especially in the financial sector. Jeremy Siegel for example.

Finally, nowhere do I hear that the core model of big media brand (e.g., WSJ) and all its writers are needed to do what they do.  I love the WSJ, and this stinks to write.  But the net net is that most news will be covered by more citizen-oriented news outlets by  citizen journalists and niches that are running around snapping Twitpics and posting to blogs.  This will mean that vastly smaller newsrooms are going to be needed to do what they do today.  Some will be needed and some are crucial.  But many will be continuing to compete with free.  Very hard to deal with.  This needs to get teed up and discussed.  Openly.

With that out of the way, now I want to explain why I think this talk is off base with respect to big media.  Brands such as the WSJ, Wired, Time, Newsweek do have a well-known problem–they’ve got a bunch of folks in a priesthood of journalism competing with their congregation of citizen bloggers, twitterers and so forth who are happily, ignobly disrupting the stuffing out of them.

Anderson’s prescription may work for them, but I’m extremely dubious.  I think that the congregation of citizens is going to disrupt all the slices of profit from the priesthood of jounralists.  While I might pay a few bucks for virtual currency on Zynga or a special hat on WeeWorld, I’m not going to pay $0.99 for an article that I can just read somewhere else.

I really think that we’re watching in journalism what we saw in the auto makers a few years ago.  We are looking at an industry that doesn’t realize its dead yet.   The business model needs far more dramatic reinvention in terms of what we’ll consume.  That debate ain’t happening though.  Instead, what we’re hearing is that the pricing model needs to go this long tail route, which is a baby step.  They’re using a pea shooter against an elephant on this.

As an example of how radical things need to get, here’s Jon Stewart talking to Katie Couric about what the TV news should do.  His ideas are closer to what I think needs to happen than working on a long-tail price model.

Jon Stewart Interviews Katie Couric

Here Stewart gives Couric all kinds of crazy suggestions–”free colonoscopy for viewers,” etc.  These get laughs, but he’s basically right.  Old media is going to need things like cage-matched talking heads debating health care pay-per-view, manage Wolf Blitzer’s as a multi-medai franchise similar to Tom Petty, and a bunch of other completely crazy ideas.

The idea that a pricing model as suggested is going to do the trick is in my mind, extremely short-sighted and likely to fail.  Media franchises will need to think radically about trying vastly new and different things, else they’ll be in the same spot GM / Chrysler are in now.

Jon Stewart’s become one of the most trusted ‘newsmen’ in the US, crazily.  His ideas on how to fix big media may make him the smartest business person too!

Filed under: business, marketing, social media, technology , Chris Anderson, jon stewart, media, Pricing

Facebook’s Vanity URLs’ impact: web-based mail will be the big loser

Image via CrunchBase

Like hundreds of thousands of others apparently, I grabbed a vanity URL On Facebook Friday night.  (I’m www.facebook.com/jay.jamison.) As it was all the rage in the geekosphere, I was aware it was happening.  As the Penguins had just won Game 7 and their 3rd Stanley Cup, I was at home, happy, and ready to jump onto Facebook and grab my URL.

The experience was no fuss and quick.  I was surprised in that sense, as I’d expected to have long queues as Facebooks servers melted with everyone trying to get their URL.  Didn’t happen–the whole thing took about 30 seconds.

So after grabbing my URL, I then finally gave some thought as to what was so important or not about these “Vanity URLs.”  Some, like Om Malik, speculate that it may take a bite out of Twitter’s growth.  I disagree with Om on this–I think the nature of the conversations and interaction in Twitter is fundamentally different than Facebook.  Having Vanity URLs might make groups of friends on FBK have more Twitter-y like conversations, I suppose.  But as a user of both services, I still see them as fundamentally different.  Facebook’s a place where I share with friends updates, thoughts, photos, etc. on a range of topics.  Twitter is in a sense more universal–it’s like a user-generated teletype news feed with people I know and those I don’t.  Vanity URLs don’t really change that for FBK, @replies won’t do all that much either, as my circle of friends already kind of do this in a klugey way in conversations on FBK.

So I don’t see this as a shot across Twitter’s bow, really.  Instead, I think this is more about making it easy for Facebook to grab and secure the next genertion of users.  What I mean here is that I expect that web-based email is going to feel the brunt of this move.  If you’re 13 say, and starting to use computers more deeply, why are you really going to need web mail now?  You aren’t.  You just grab your little Vanity URL, and you tell the world you’re www.facebook.com/your.name.  I’d think the groups more directly impacted in the short term are not Twitter, but gmail, hotmail, aol im, etc.

Filed under: Twitter, business, social media, technology , Facebook, Social Networking, Twitter, Vanity URL

I still think this is a goofy debate re: Twitter & retaining users

Image by Joe Penniston via Flickr

I wrote about this recently here, but just saw this as I was eating lunch: Twitter is retaining more users than Nielsen thinks » VentureBeat.

I agree with the conclusion—Twitter shouldn’t worry—but I find the logic goofy.

Sure retention is important, but it really doesn’t matter as much for Twitter as it does for FBK or MYSpace if a Twitter joiner is an active “Tweeter.”  This is because, as with YouTube or Flickr, a Twitter account holder gets access to the search of the ‘real time web’ or whatever it is we’re calling the sum of all the tweets the user can search. 

In other words, the consuming non-tweeter gets value from the size of the twitter network.  If he or she never tweets, he’s still getting value.  So long as the total audience of twitter continues to grow its account size, and so long as a non-zero percentage of that audience is tweeting and adding to the unique content asset Twitter has, then Twitter is in stellar shape.

The right metrics are not about retention or number of tweets, IMHO.  I think its about # of total tweets, # of accounts, and in time, # of searches in short-term.  Over time, the retention number will go up as more people figure out how to tweet. 

 

 

Filed under: internet, social media , social media, Twitter

What I’ll watch for with MySpace: progress on bite-size chunks

Tech Crunch’s article, MySpace Is In Real Trouble If These Page View Declines Don’t Reverse, provides a sobering view of the challenge in front of MySpace CEO Owen Van Natta and his newly installed exec team.

I’m going to assume that TC’s numbers are accurate, and I’m in general agreement with the conclusion—momentum is not on MySpace’s side.   This is a big task, as TC asserts, never been done successfully. 

Still, as with any big task, its important to split it up into smaller, bite sized chunks.  There are ton of things that could be focused on to read the tea leaves as to whether MySpace is making progress or not.  To make things simple, here are the 3 key bite size chunks I’ll be watching for to assess whether MySpace is making progress:

1. Execs speaking about and delivering on useful, concrete customer scenarios.  I remarked in a prior post how vague and nebulous an ex-MySpace Chairman’s Richard Rosenblatt advice was, compared with a much more concrete, user-focused entrepreneur like Joel Spolsky.  This was a bit unfair as Rosenblatt shouldn’t give concrete advice.  At the same time, when the exec team now speaks, I’ll compare their words with his.  If its as vague and general, and it doesn’t have specific concrete customer scenarios that appear appealing, then it’ll be more of the same.  Creating value for users is vital here, as with anywhere else.  Watch for this—I’d say within 45 days, there should be relatively clear statements on what customer scenarios excite the execs and what concretely they’re doing.  If its general “own the spaces MySpace can own,” blather, then I’d say that’s a big red flag.   
2. Execution.  Mr. Van Natta has assembled a strong core group of execs around him.  This is a great start.  It’ll now be interesting to watch what they deliver in terms of features, in specific timelines, relative to update cycles from Facebook, Twitter and others.  Given the inherent pressure of lost momentum, with the pressure that must be coming from News, the MySpace execs will get pulled in many different directions.  I’ll watch for what they are able to ship in specific timeframes.  If there isn’t anything substantial product-wise done by time school starts up in the fall, I’d say that this is a sign of real trouble. 
3. (Any) cultural phenomenon created, fueled and fanned on MySpace.  The page view and traffic numbers won’t turn overnight.  What does and can shift quickly is passion around some trend or phenomenon or whatever.  A band must break there, a movie must be discovered there—the thing we all are talking about must be found once on MySpace.  This has happened on MySpace in the past I think, but now, this discovery happens other places more often—FBK(the election or the 25 things phenomenon) or Twitter (Sully’s plane).  When MySpace gets mentioned at lal these days, its generally only as one of several social media services where stuff like this happens.  MySpace needs to be central to some of these experiences.  If in 6 months there hasn’t been one of these, then I’d say its a sign of continuing difficulties for MySpace. 

Filed under: social media, technology , MySpace, technology

Who I’d bet against if Twitter were sold

Image via Wikipedia

This post is inspired by Warren Buffett.  Buffett often talks about how with new technology it’s impossible to pick the winners, but it’s obvious who to short.  He uses the example of the thousands of automobile companies formed in the US over a century ago, fewer than 4 remained a few decades later.  At the start of the auto industry you’d have no idea which 4 car companies to bet on, but you probably should have known to short horses.  Same thing here. 

Speculation continues to mount that Twitter is in acquisition talks with tech analysts and journalists writing about what firms as Apple, Google, Microsoft, and News Corp should or must do.

I wouldn’t put money on who might win or even if Twitter wants to do a deal—there are too many moving parts to read this, as I mentioned yesterday.  If I had to bet, I’d probably say that the most likely 2 scenarios are that that Twitter doesn’t sell or that MSFT acquires them.  The second most likely would be for News to buy them.

If Twitter does indeed sell to MSFT (or rather, anyone but News), then I think there are some obvious bet against that I’d make.  Namely, Twitter clients—e.g., Tweetdeck and Seesmic.  Perhaps others, but those two in particular would I think have a very hard to reach mainstream distribution against someone like MSFT or Google.  One of the challenges with building desktop apps I suppose. 

 

 

Filed under: business, internet, social media, technology , business, social media, Twitter

Stackoverflow & MySpace : A study in (stark) contrasts

Two posts over the last 24 hours caught my eye due to the stark contrasts between them.  Imagine you knew nothing about the two companies, just had the video below on StackOverflow or the TechCrunch article on MySpace—which one would you be betting is ramping up on momentum, and which one is basically without clear direction? 

The moral of this story is very simple: companies that articulate concrete, useful end-user scenarios do well; those that don’t struggle. 

Case 1: user-scenario centric.  Joel Spolsky gave a talk at Google’s campus on StackOverflow.com “a free question and answer site built by developers for developers that has fostered a strong and committed online community in under one year.”   

It’s an informative talk, embedded below.  I could happily recommend it to any entrepreneur, as it is does such an effective job walking through the problem Joel saw, the competitive landscape, and how his team worked on StackOverflow as a solution.  It made me interested enough to go to the site and play around – even though I have nearly zero business being on a site for developers. 

 

Contrast this with TechCrunch’s article Former MySpace Chairman Richard Rosenblatt’s Advice To The New Executive Team.  While Rosenblatt goes to lengths to describe why he is hesitant to give advice, he then dispenses with “general thoughts on where MySpace can push forward.”  (BTW, don’t you love how people say they don’t want to give advice, and then they do so?!?)

Anyway, Rosenblatt’s advice is admittedly high level, and that’s probably the right tone.  Still, Mr. Rosenblatt’s core thrusts are pretty lame, even for general advice.  His list:

• Own the spaces that only MySpace can
• Transform your unique UGC into marketable media
• Listen to the community and let them guide YOU

Nowhere in his article is there one mention of a single user scenario that is at all interesting to me as a user and consumer of social media.  Yikes.  I get that its not his place to offer “operational” advice.  But still, when someone who’s been affiliated closely with a company, as Mr. Rosneblatt has, and they cannot articulate a single user scenario, then that to me is a sign of real trouble. 

I’m a Rupert Murdoch fan, mainly because he’s built such an amazing track record, and he’s singularly unbowed by the troubles his industry faces.  I’m hopeful that his team at MySpace will hit the ground running and create fantastically interesting end user scenarios that would get me and others interested and involved in the franchise that they’ve created. 

 

 

Filed under: business, entrepreneurship, social media, technology , MySpace, stackoverflow.com, technology

MTV Wheezing Into Social Media Age

According to Tech Crunch,  “MTV has announced plans to a launch a show that taps into the power of social media, tightly integrating with Facebook and Twitter to maximize fan interaction.”  Wow, does this come across as the old media guys trying to wheeze their way into the party.  It’s not so much the strategy of MTV embracing the reality of their user base–they realize their users are using social media, makes sense that they’d use it.  Still, when to read about this on Tech Crunch as a show planning to use social media as a channel, versus just doing it and attracting users, the whole thing just sounds so put on.

I’d contrast it with the very powerful, useful manner in which CNN used Fbk and more recently Twitter in the election, inauguration and more recently with the swine flu and even with Larry King.  CNN has done a fantastic job, I’d say.  They’ve continued to drive the content that’s their bread and butter, first and foremost.  They’ve augmented it nicely with social media.  This is the way for ‘old media’ to integrate the newest media technologies.  The MTV approach that starts by saying we’ll have a Twit/FBK integration into some show, well, I don’t know, sounds pretty weak to me.  We’ll see.  Wheeze.

Filed under: business, social media , CNN, MTV, social media

Does MySpace Really Need a Chief Revenue Officer?

MySpace pulled trigger on Owen Van Natta to run MySpace.  

While I don’t know Mr. Van Natta, my quick take reaction and question centers on whether a former Chief Revenue Officer of Facebook is really going to fix what’s ailing MySpace.  IOW, is the revenue problem really the issue that’s highest priority to MySpace?  My take—absolutely not. 

MySpace’s growth has flat-lined, dead in the water relative to Facebook, to say nothing of Twitter.  The site built for teens as the cool hang-out and spot for media now looks bloated, slow and niched. 

So my question is, how’s a business guy really going to fix that?  What ails MySpace, IMHO, is far more product related – it’s an SNS that appeals to a younger demographic, and isn’t tracking to pull in older users in the same way that FBK and TWIT are.  This isn’t a business problem, it’s a product problem.

Scarier still, I’ve read elsewhere the argument that MySpace needs to be the SNS for Music.  Perhaps this is why you bring in a Revenue Officer.  My first take is that this is a dumb idea—take a MySpace, a flat lining SNS and combine it with a dying industry.  Good luck there!  Maybe as an encore Mr. Van Natta could combine AIG and GM. 

It’s not at all obvious what the next steps are for MySpace, and how it might speak to a broader set of users.  Their product doesn’t.  The business strategy of pulling in media like music doesn’t resonate with me at all to a level of scale that’d be needed to make an impact.  Sounds like a mess.  My bet would be on MySpace getting sold in next 2 years at >50% markdown to acquisition price. 

Filed under: business, internet, social media , MySpace, technology

Seesmic Desktop release: a strong product step that exposes the right question on Twitter’s business model

Background: I downloaded Seesmic Desktop tonight.  I like it a lot, but that’s not the subject of this post.  This post is about the importance of Twitter’s business model to nurture a vibrant ecosystem.

2009 is shaping up to be the year Twitter’s white-hotness explodes into the mainstream.  To me, nothing made this more clear than the New York Times’ real-time mapping of tweets during the Super Bowl. 

Leading up to and following the Super Bowl, the media coverage and hype on Twitter has been, in a word, superlative.  Literally, stuff of Silicon Valley legend.  Facebook and Google are rumored acquirers.  Inaugurations and political conversations are changed.  Terrorist attacks are reported first through twitter.  Sully’s downed plane was twittered.  Etc.

And all this is fantastic.  Twitter’s a very useful service, and there’s not a shred of doubt in my mind that it will continue to have an ever increasing impact, its management team will find a substantial, sustaining business model for itself, and its founders, investors, and employees will make a well-deserved, honestly gained fortune. 

In the technosphere, not everyone is so sanguine.  It is a common question to ponder how Twitter might make money.  I was pondering this myself tonight as I tried out Seesmic Desktop.  I realized the question of Twitter making revenue is a silly question; entirely the wrong question.   Playing with Seesmic more, though I realized that there is a better question on the topic of Twitter and business model. 

The right question is this: how will Twitter enable a broad and sustainably profitable partner ecosystem? 

Twitter is clearly the PLATFORM, rubbing in Barry Bonds’ “Clear,” and eating the Michael Phelps 20,000 calorie diet (no bong hits thank you!)  to bulk up into the 800# gorilla it will be.   It’ll make revenue in the same way that Bonds, Phelps, Microsoft, and Google do—they have natural monopolies, in the form of hand-eye coordination to hit 800 HRs, win 8 Olympic medals or own 98% share of PC OSs or 75% of web search.  Twitter’s got the traffic, the network effect is strong and increasing. 

Everyone else though — the Tweetdeck or Seesmic Desktop or Bit.ly guys are the “Applications,” and they don’t ride with the Platform guys (yet).    The Application guys, at least for now, appear to be catching the crumbs from Twitter’s table.  This is a challenge for Twitter, potentially a tough one for them longer term.  To use the most powerful recent example of platform healthiness—the Iphone–the great thing about the Iphone platform is that it’s crystal clear that app vendors can make money on it.  App writer builds app; app writer gets royalty.  Very clean.  very simple.

With Twitter, less so.  While I think its silly to ask whether Twitter will make money, I do think its a fair and important question to ask whether the Twitter App guys will and how they’ll do it sustainably.  And answering this question is important, not just to the App guys, but in fact to Twitter as well. 

Here’s why.  First, it is going to be hard work for app vendors to get and sustain a lead, as Seesmic and Tweetdeck among others will likely show us in the next several months.  The arms race will continue, etc., but it’ll be difficult to see who will ‘win’ the market share.   Beyond that then, there’s the question of how would either monetize?  Will they have an ad platform from Twitter they can tap, similar to Facebook?  Not clear yet.  Are customers going to want to send virtual beers or pokes thru Twitter in the same way they do in Facebook?  Not sure.  So my view is that the application guys have a tough slog in front of them.  They could end up winning some market share war, without any revenue legs to stand on. 

And this is something Twitter needs to help the Seesmics and others get clear around.  How all this tweeting will turn into sustainable revenue for them.  Twitter can’t entirely punt this to the app guy, nor can Twitter solve it entirely for them.  In my experiences with platforms, and I spent a decade on them, this ain’t easy. 

It’ll be exciting to watch Twitter continue to grow and the innovation in the ecosystem around it.  I’ll be keen to see how Twitter’s business model comes forth, and I’ll pay attention to how that model helps app vendors make money. 

Filed under: Twitter, business, internet, social media , seesmic, Twitter