Blind Five Year Old

Is there any argument that the capital of the Internet is San Francisco?

Sure, there are other areas of activity. New York City, Los Angeles, Chicago, Seattle, Boston, Austin and a smattering of international destinations all have enclaves of Internet related activity. But the heart of the Internet remains in San Francisco. Or the Bay Area to be more precise.

Just think of the companies based in the Bay Area. Google. Yahoo. Facebook. Twitter. Yelp. Craigslist. eBay. YouTube. FriendFeed. Wikipedia (relocated from Florida). WordPress. Mozilla. Photobucket. Apple. Netflix. CNET. Adobe. Ask. LinkedIn. Snapfish. Digg. ZEDO. Pandora. CafePress. Salesforce.

I’m not even scratching the surface of all the start-ups and other sites, nor am I straying into traditional technology which would be another long list.

The Language of the Internet

Nowhere else is the language of the Internet spoken so fluently. Talk of browsers, social media, search engines, eCommerce, digital media, programming and more are par for the course. You’re bound to hear it if you sit down in a Starbucks and eavesdrop on conversations.

In New York it’s Wall Street. In Los Angeles it’s Hollywood. In Chicago it’s advertising. In Austin it’s music. In Seattle it’s … coffee and the weather. In Boston it’s … the Red Sox. In San Francisco, it’s the Internet.

Under this assumption, the White House is Google. I admit that I haven’t figured out who or where the Capitol is located. (Nominations anyone?)

The other cities mentioned above serve as Internet embassies. These embassies are important, but make no mistake, you’re in a foreign land. The locals don’t speak the language.

Finding the Internet Capital

I know a little more about this topic since I lived in Washington, D.C. for a little over 6 years. Washington D.C. is, without question, the capital of politics. Again, that’s not to say you can’t be a political animal in your own state or city, but D.C. is where it all comes together.

Even in college I couldn’t help but talk about politics and legislation as I drank yards of beer with friends. I knew it was time to leave when the bathroom graffiti was about NAFTA.

I moved from San Diego (yeah, I’ve hop scotched here and there) to San Francisco because I wanted to get into Internet marketing.

Why not do it in San Diego? Well, back in 1999 there was really only one San Diego based option – MP3.com. And the number of applications to openings was staggering. (So was their eventual implosion.)

On a lark (and to my wife’s shock) I sent three resumes to San Francisco based companies. I got three interviews and eventually landed one of those jobs.

San Francisco Detractors

Some simply don’t get it. They view the Bay Area, or Silicon Valley (the latter term seemingly used as a pejorative), as too focused and too caught up with itself. It’s expensive they moan. You live in a bubble and don’t see what’s really going on they shout.

Mind you, the same type of arguments can be applied to Washington, D.C, government and politics. But there are checks and balances.

Internal factions remind us of the outside world. We have our fair share of contrarians. Bubbles pop. And yes, from time to time ambassadors from Internet embassies remind us that there’s life beyond our corner of the world. And there is great work happening beyond the Bay Area.

But at the end of the day …

The capital of the Internet is San Francisco.

That’s right, parents are the driving force behind the Internet. I don’t mean end users, I mean those who are creating, building and managing the sites, applications and companies that power the Internet.

Web 1.0

15 years ago a bunch of young visionaries and entrepreneurs developed new businesses and companies that would change the way we get news, do research, communicate and purchase goods and services. It was the wild west of business and I was lucky to get in on the tail end of that era.

Web 1.0 was about youthful exuberance. Many spent like drunken sailors and the stories of excess are legendary. Nearly everyone in the industry was young and it didn’t seem like we had to conform to the way anyone else conducted business.

People lived to work and often slept at work. Kitchens were stocked with free soda and munchies. There was no dress code. We shot Nerf guns at each other, rode around in the office on Razor scooters, got good at foosball and relaxed in our comfy Aeron chairs. Companies grew without the aide of a business plan. We counted our options and talked about what number we were in the company.

Po Bronson captured the time in The Nudist on the Late Shift.

The Nudist on the Late Shift came out at the height of the great social experiment – dot com fever, summer of 1999. Amazingly, it still stands the test of time, being the definitive portrait of that crazy place and time in our modern history, when all the rules were rewritten. My classic piece is the first chapter, The Newcomers, which was inspired by the works of Joan Didion, Upton Sinclair, and John Steinbeck, who chronicled other great migrations to California. From 1996 to 2000, almost 400,000 young people moved to the Bay Area from elsewhere to seek their fortune and fate in the internet industry …

It was the era of WebVan, Pets.com and Kozmo. (Ah, Kozmo how I miss thee!) In retrospect it was a lot like college.

The Nuclear Winter

Then the bottom dropped out of the Internet. Reality reared its head and the party was over. The dot com crash, or dot bomb if you like the nuclear winter metaphor, was a wake up call. Suddenly we were the butt of jokes. We finally got our comeuppance!

Thousands of us pulled the cord and found work in other areas and industries. It had been fun but it was time to grow up and start a ‘real’ career. But others stuck around – those of us who thrive on the edge of business. Those who like the chaos and can stomach the ups and downs of the roller coaster. We still saw promise in the Internet. We’d make it work.

By the end of the nuclear winter the fraternity of Internet colleagues was relatively small. Yet, we were well placed when the Internet rose from the ashes. We’d amassed a wealth of experience and learned from our mistakes.

Web 2.0

Something else happened when the Internet returned from the grave. We were in our thirties. Many of us who stuck around had started families. We matured. As any parent will tell you, your view on life and your priorities change once you’re a parent.

We became more fiscally responsible and that translated into the way we ran new start-ups. Excess was out. Making your dollar go farther was in.

The idea of living at work disappeared. Flexible hours became widely accepted and more and more found they could get just as much done working at home. We had kids and we wanted to be there for them. (Or we were made sick by them!)

It was about efficiency and output. It was about time-shifting. Just like TiVo, we’d pause work until later in the evening and then catch up with email.

We understood failure and that tempered our ego. (Tempered mind you, many of us still have big egos.) Our conversations were no longer about Burning Man, they were about elementary schools.

Parents Drove Innovation?

Think about the innovations in the last few years. How much of it was influenced by the fact that those creating it were parents? Parents want to be untethered from work, to time-shift, to document and to reminisce.

Mobile applications allow us to be elsewhere but still be connected. I can be at the playground with my daughter but still stay on top of any pressing matters via my phone. Add lighter more powerful laptops and wifi and suddenly I can go anywhere and still be ‘in the office’.

RSS and other feed based applications let us digest news on our own time.

Social Networks let us connect and interact with others without the time sink of meetings. LinkedIn makes it easy to network – something we learned was more important then we thought. Facebook lets us connect with old friends but only at arm’s length. No awkward coffee store meet ups, thank you very much.

Blogging lets us document our life and our passions. Could the need for self-expression, to keep your own identity as a person, and as a parent, be part of the reason blogs took off?

Is microblogging a way to do the same but a reaction to an infringement on our most precious resource – time? Is the rise of real-time blogging of conferences a way to optimize our information and time balance?

Are the rise of photo and video applications and platforms due to the desire to document our families? Flickr photo albums of first steps sent to family members near and far. The Flip Video Camcorder that lets us put all those dance recitals on video and share them with the world.

Really, why exactly are kids show mashups so popular?

Parents Run the Internet

The Internet has evolved and matured in parallel with those innovators who flocked to it in the mid-to-late 90s. It should come as no surprise that parents now run the Internet.

Lately, you can’t go a day without Yahoo talking about their new open initiatives. Whether it’s Yahoo BOSS (Build your Own Search Service), Yahoo Pipes or Yahoo SearchMonkey, it’s all about openness and collaboration.

Yahoo SearchMonkey

Yahoo SearchMonkey is the most interesting initiative for search. During SMX West every Yahoo presenter seemed to have a SearchMonkey slide in their deck. I can understand why.

Using SearchMonkey, developers and site owners can use structured data to make Yahoo! Search results more useful and visually appealing, and drive more relevant traffic to their sites.

SearchMonkey turns dreary search results into something more interesting.

There are only a handful of default SearchMonkey apps currently running on Yahoo and the number of user apps is still a middling 100 or so. Yet, the idea seems right.

SearchMonkey is add-ons for search

That’s right. SearchMonkey apps are the equivalent of Firefox add-ons.

Add-ons extend Firefox, letting you personalize your browsing experience. Take a look around and make Firefox your own.

Yahoo isn’t going to win on their search algorithm. While the result sets are subjective, Google is the perceived leader and perception is reality. In addition, Google is far more focused on perfecting search and iterating the algorithm.

That’s why SearchMonkey is a smart move. Taking a page from Firefox and WordPress, Yahoo is hoping that developers will make their results more appealing and usable through easy customization.

Firehoo

That’s not where the similarities stop. Yahoo has a similar position in search as Firefox does in browsers. They’re both up against large market share giants, Google and Internet Explorer respectively. Hence, they both fight against user inertia.

There are differences. Yahoo had the market share lead and let it slip from their grasp and many (myself included) would argue that Firefox is a better product (add-ons or not) then Internet Explorer.

Could Yahoo become the Firefox of search?

Maybe, but only if they focus and promote SearchMonkey apps to sites, developers and, most importantly, to users. Unfortunately Yahoo isn’t doing this and remains distracted and unfocused.

It would make search far more interesting if Yahoo got serious about SearchMonkey and fully implementing a customized search strategy to woo users back to Yahoo.

Twitter search is a great feature but it in no way threatens Google’s dominance in search.

Recency does not equal relevance

The major flaw of using Twitter as a search engine is that recent tweets on a subject do not equal relevance on that subject. This should be obvious but lets do a few searches to illustrate the point. I’ll use searches that appeared in the top 100 from the Google Hot Trends list at some point on February 15, 2009.

Yosemite Camping

Which of the results best satisfies the query? Without question it’s Google. Let’s try another.

Daytona 500 Pace Car

In this instance both provide the answer. The Daytona 500 Pace Car is a 2010 Chevy Camaro. The Google result tells me it’s black and gold and gives me plenty of authority sites to visit.

Twitter on the other hand doesn’t provide this level of detail. In addition, two of the five results are from Mahalo and a third is from kinougo. More on ‘him’ later. For now lets try one last search.

Crayola Factory

Hands down Google satisfies this query better than Twitter. The only link available is, again, from our friend kinougo. So who is kinougo?

Essentially auto generated Tweets based on hot searches. But where do they lead?

Look at that! An API based link farm with Google AdSense as the revenue source. That looks … awful!

Twitter would have been a near complete bust if it were not for Mahalo and kinougo. Yet, these sites are simply exploiting Twitter search, not contributing to it in a natural way. I doubt the user experience on these clicks would reinforce the idea that Twitter was the place to search. Probably the exact opposite.

Recency works only for hyper real-time events: earthquakes, Presidential debates and conferences to name a few. (Sidenote: There’s this other site called FriendFeed which actually did a bang up job on real-time commentary on the Presidential debates.)

Authority is nonexistent

What makes anyone believe that the latest 5 or 10 tweets on a subject are at all authoritative! Twitter has no mechanism to determine what is the best result for a given query other than the Tweets from their users in a very short time span. Do you trust the random users of Twitter that much? I don’t and neither does Google.

The Google algorithm tries to present the most authoritative, the most right, the most useful results, not just johnny-come-lately blog posts and certainly not some 140 character missive. They might not always get it right, but they’re trying … hard.

Duplication is a problem

Twitter doesn’t handle duplicate results, opening itself up for SPAM both real and unintentional. Even for the hyper real-time events how many times do you need to see the same quote over and over again?

Twitter is not a Google competitor

Relevance, authority and duplication all ensure that Twitter is not, and likely never will be, a Google competitor. At best Twitter could provide supplemental information to a real search engine. Twitter is the crawl at the bottom of a cable news channel.

“I just ate a mango” isn’t going to disrupt the search world.

The other night I fell asleep watching Blade Runner.

Before nodding off I got to see a young Edward James Olmos (a nice juxtaposition to seeing him in Battlestar Galactica) and the amazing logo laden neon skylines that serve as the back drop to the epic Philip K. Dick story.

A lot has been made of the product placement used in Blade Runner. Not because it was the first to use it, or that it was so prominent (which it was) but because many of the advertisers fell on hard times.

Among the folklore that has grown up around the film over the years has been the belief that the film was a curse to the companies whose logos were displayed prominently as product placements in some scenes. While they were market leaders at the time, many of them experienced disastrous setbacks over the next decade and hardly exist today. [Wikipedia]

The blatant product placement, track record of the advertisers and new technology got me thinking. What happens when an advertiser or brand ceases to exist? Right now that brand will live forever on film, locked on celluloid for eternity. But does it have to be that way?

Could product replacement be a new advertising venue?

In the digital age the logo of Coca-Cola can be swapped with that of Pepsi. Atari could be replaced by Wii. A dead brand can be replaced by the new thriving brand. Science Fiction has the greatest ability to make these changes because there are no inherent problems with anachronisms.

Period pieces would probably be off-limits (e.g. – Sense and Sensibility) and modern movies would pose potential, but not unsolvable, problems. For instance, the Mellow Yellow car featured in Days of Thunder couldn’t be digitally altered to promote ROCKST★R but could to promote Mountain Dew.

It’s an intriguing idea, though I’m sure some movie purists would howl at the moon if product replacement came to fruition. Yet, the new formats in which we’re consuming media make this type of substitution seem possible.

Product placement localization seems likely too. Imagine a character drinking from a branded bottle of beer. Couldn’t that brand be altered based on localization? Bud Light in the United States, Labatt Blue in Canada, Skol in Brazil and Krombacher in Germany.

Clearly this wouldn’t always make sense and could disrupt the suspension of disbelief necessary for many films. Make no mistake, product replacement is a Pandora’s box. But imagine the additional revenue potential of selling ‘dead brand’ space in movies.

Would you be disturbed by product replacement?

The Google team has quietly announced changes to the thumbnail selections for videos that might spell the end of the Rick Roll.

In December YouTube announced changes in a post titled ‘A YouTube for All of Us‘. Outside of the strange capitalization the post contained the following statements.

Improved thumbnails – To make sure your thumbnail represents your video, your choices will now be selected algorithmically. You’ll still have three thumbnails to choose from, but they will no longer be auto-generated from the 25/50/75 points in the video index.

More accurate video information – Our Community Guidelines have always prohibited folks from attempting to game view counts by entering misleading information in video descriptions, tags, titles, and other metadata.

Recently, the Google Research Blog explained a bit more about Smart Thumbnails on YouTube.

… our previous system of choosing thumbnails from the 25, 50 and 75% marks in the video, which often led to arbitrary, uninformative or sometimes even misleading images, is now a thing of the past.  When a new video comes to YouTube, we now analyze it with an algorithm whose aim is to pick a set of images that are visually representative of the content of the video.

Clearly Rick Rolling would be Exhibit A and any engineer working on a video algorithm would use Rick Rolls as a use case for development.

Is this the end of Rick Rolling? Perhaps. Or maybe it’s a continuing chess game as Rick Rollers figure out ways to beat the new thumbnail algorithm.

Never gonna give you up … never gonna …

Are eCommerce sites overlooking RSS?

RSS still hasn’t hit the mainstream, but could eCommerce sites help drive RSS adoption and at the same time increase the effectiveness and reduce the costs of their communications with customers? Yes!

Too many eCommerce sites seem to believe that the only place for RSS exists if they have their own blog. And lets face it, many don’t have the bandwidth to produce a decent blog. It’s a resource drain and one that many find hard to explain during budget meetings.

Yet, most eCommerce sites already have blogs, they just don’t know it. They’re called newsletters. So the time and effort argument is irrelevant.

Why push newsletters via RSS?

Most eCommerce sites use email as their primary method of communication. Yet, email has three big (and growing) drawbacks: deliverability, over saturation and cost.

Deliverability issues persist as email finds its way into spam folders or bounces due to changed email addresses. A 2007 Internet Retailer survey indicated that only 40% of respondents experienced 90%+ deliverability. And a 2008 Return Path report showed commercial deliverability at 88%.

Just like the old direct mail world, people move … a lot. Here’s the data from Jupiter Research (2008) and Return Path (2007) respectively.

17% of Americans create a new email address every 6 months

30% of subscribers change email addresses annually

Part of the deliverability problem is over saturation. Email marketers have overused the medium, flooding mailboxes to the point where users feel overwhelmed. The result has been a steady decline in open rates, from nearly 40% in 2003 to 13% in 2008.

Many eCommerce sites have increased the frequency of email to respond to declining open rates. The open rate might be low on each email but if you send six emails a month your total open rate might wind up being pretty good.

Yet, there is incremental cost associated with this increased volume. Not only that but it contributes to the over saturation problem which negatively impacts open rate and effectiveness. It’s a vicious and costly cycle in which eCommerce sites wind up paying more for less.

The advantages of RSS

RSS solves most, if not all, of the deliverability problem. There is no spam filter or black list. I’d also argue that you’re less likely to switch readers than email addresses, thus reducing the churn rate of your subscriber base.

Email has become unncessarily intrusive and ephemeral. An email will be pushed ‘below the fold’ of a person’s inbox with greater speed as the volume of email a person receives increases. The adage ‘out of sight, out of mind’ is apt in this instance.

Over saturation might be an issue in RSS but the format is a more ‘on demand’ type of solution. TV networks are starting to understand this, that forcing people to watch their show at 8pm on Thursday might not be optimal. Similarly, RSS allows subscribers to engage with your content on their own terms.

Subscribers will still get an inbound notification that new content has arrived, so you’ll still see an immediate (though perhaps less pronounced) traffic surge. And the content will have a longer life due to increased delivery and visibility in the reader.

Did I mention RSS would be radically cheaper than email? Leaps and bounds cheaper really.

But didn’t eCommerce already try RSS?

Yes and no. When RSS first arrived on the scene there was a big ruckus about how RSS could replace email. The problem was marketers didn’t have a clue how to really make that happen. Most didn’t even use RSS and found it confusing at best.

I speak from experience. I was smack dab in the middle of it all as Director of Marketing at Alibris. I sensed that it had potential but I didn’t fully grok RSS until later on, after I’d left the eCommerce space.

The topic was a blip on the radar at conferences and no one really wanted to upset the applecart. Email was a solid performer and search was the shiny new channel.

So any attempts made in those years were premature and uninformed for the most part.

Why could RSS succeed this time?

If eCommerce sites began to understand that RSS could help them achieve their goals they could be a force of change for the technology. RSS needs to be relaunched, rebranded or both. Who better to do that then those in the business of selling.

In addition, the reader market has matured and stabilized. I see no reason why Google wouldn’t want to partner with major retailers and offer their customers an easy (perhaps cobranded) way to start using RSS using Google Reader.

Finally, RSS can be used more creatively by eCommerce sites. In a tough economy, why not let users select products and create a price watch feed? Or let users subscribe to reviews of a product to help them through the sales cycle?

Email versus RSS

The revenue stream from email has obscured the growing cost of the channel. I don’t know of a single eCommerce retailer who really ‘likes’ their email service provider. The time and money dedicated to producing and sending email seems to grow and not shrink.

Yet, instead of looking at new ways to communicate with customers many simply look to ‘fix’ email or find another service provider. Deliverability in particular has given rise to a number of new businesses. That should be a clear signal for change.

I’m not saying eCommerce should abandon email, but the ones who figure out RSS will have a marked advantage.

Here’s a simple way to get your Twitter replies delivered to you via RSS.

• From your Twitter home page, scroll down to the bottom and click on Search
• Search for your replies using @[your username] (for me that would be @ajkohn)
• Select the ‘Feed for this query’ link on the top right hand side of the search results page

That’s it. Your Twitter replies will now be delivered to you via RSS in your favorite reader.

How many words does it take to get to the end of a Google search query?

One

Two

Three

Four

Five

Six

Seven

Okay, I’ll spare you the tedium. The answer is 32 words!

I’m guessing this isn’t new but it just happened to catch my attention. It would have been far more interesting if they’d stopped at 42.

Now is the time when bloggers go on the record with their thoughts for the year ahead. Place your bets! Stake your claim! Here’s mine.

Facebook Becomes A Portal

Realizing that social media and advertising is like oil and water, Facebook repositions itself as a portal leveraging Microsoft’s Live Search as the revenue model. This also might result in the potential acquisition of Netvibes to provide a more robust offering to compete with Yahoo!

Identity Systems Fail

Confused about the difference between OpenID, Facebook Connect and Google Friend Connect, users throw up their hands and decide not to use any of the above.

Video Advertising Succeeds

The adoption of video is surging faster than many expected. Longer formats and better quality will bring even more eyeballs who will grudgingly accept advertising.

Microformats Go Mainstream

Why they aren’t already is shocking. Nevertheless, in 2009 we’ll see microformats become a standard and search results will become far more robust as a result.

Banner CTR Becomes Obsolete

Brands will finally realize that measuring success by click through rate (CTR) isn’t working. Measurement ‘beyond clicks’ will be the new yardstick, whether that’s through new brand advertising measurement services like Vizu or through monitoring services like Brandwatch and Trackur among a gaggle of others.

RSS Adoption Spikes

Someone will (finally) figure out how to market RSS to ‘the masses’ who will grasp the sublime benefits of having content come to you instead of the other way around.

Kindle 2.0 Flops

Amid a weak economy Amazon releases the newest version of Kindle. Other readers have gained ground where Kindle has not and at the core Kindle is a solution without a problem.

Google Search Share Stalls

The move by Facebook (see above) causes a radical change in the search landscape. Microsoft passes Yahoo! for second place and talks about a Microsoft Yahoo merger are (unbearably) reignited.

FriendFeed Surpasses Twitter

FriendFeed adoption increases at an accelerated pace due to quick innovation, uncluttered design and an interface that lends itself to communication.

Someone ‘Dies’

Users reach social media overload and VCs get even more nervous about revenue creating social media shrinkage. In this instance ‘Dying’ means a company goes under or is purchased for a song. My short list includes Plurk, Twitter, Digg and Seesmic. This isn’t a reflection of the people or product but the inability to truly reach the mainstream with a service that has a profit model.

There are plenty of other things that I believe will happen in 2009, but they seem more obvious or an extension of current trends. Instead I tried to be a bit more bold, at least on a few of my predictions.

We’ll check in this time next year to see how I fared. In the meantime, feel free to comment and provide your feedback and reaction to my predictions.