What’s the digg effect?

21 08 2007

A relatively new verb that has been coined around the Internet is “dugg.”  Digg.com is a user generated content provider which prioritizes news articles, videos, blogs based on other people’s opinion.  Based on this simple conjecture, the highest rated news articles float to the top of the site and thus get higher traffic.  As people agree with the initial user, the site begins to get “dugg” even more (or voted as being a good article/site) and gets higher traffic.

So the question to ask oneself is how do you get to be “dugg” on the internet.  What are the characteristics of a site that is well received by the Digg population?  In my opinion, there is no set formula that makes something popular on the Internet.  I think the prime example for “random popularity” on the internet comes with video traffic on YouTube.  The phenomenon of lonelygirl15 would never get traction on normal television screens.  Yet placed on YouTube, this type of viral marketing spreads like a wildfire.  The recent phenomenon of Chocolate Rain has received over 6 million views.  I don’t know about you, but I never would imagine something like this catching fire.

At Digg.com, a user can easily see the top 20 digg’s of the day to see what content is appealing towards the consumer.  Unfortunately, Digg.com doesn’t necessarily show a proper subset of the internet.  For instance, if I put this blog on digg.com, I would probably get 5-10 diggs, simply by telling my friends.  Granted, this content may not be interesting enough to forward on to many friends, but it will get lost in the midst of all of the other content.  Currently, the top 100 digg users control most of the community which creates an inflated digg score on certain sites.  Some digg users are pinged by sites to “get their traffic up.”  Getting a high digg score means free traffic = higher ad revenue/free publicity.

So how do you control inflation on the web.  eBay.com for instance has seen this for years under their feedback system.  If 99% of the population on eBay has a feedback rating of 95% and above, doesn’t it lose it’s value?  What about the only getting the top 100 digg users articles on the front page of digg….does the community really have a voice?

This brings me back to the bigger point of the day – is it wrong to have this type of system?  The Internet is amazing because every voice is equal (relatively).  No matter who you are, you will always be able to comment/blog/speak what you want to an infinite audience.  However, when certain users begin to control the content that is shown to the mass public, problems can begin to arise.  Whether you get “techcrunched” by getting an inordinate amount of traffic from Michael Arrington’s site, or get “dugg” by digg.com, your site/content will be much more prominent in the web space.

Just my $.02…

-SD

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Facebook 2.0

23 05 2007

First of all, I’d like to apologize for the lack of blogging in the past month. For once, I can blame the lack of internet usage due to my hardware problems. With my hard drive failing, I had to use alternative resources to revive my laptop. Purchasing a $400 laptop hard drive was not in my budget, but paying 10% of that from a seller in Seattle was something that was…thanks eBay (shameless plug).

A lot has happened since the last time in my blog. Google purchased DoubleClick for an insane amount of money. Just when you thought that no one would one up that, Microsoft shows their muscle by purchasing the equivalent company for $6 billion. Rumors have been spreading that Microsoft is in talks with Yahoo for a possible merger/takeover. I’m not sure if this is actually true, but we’ll see. The next three months should be interesting.

But I’m not here to speak about the real big guns like Yahoo, Google, MSFT, and eBay. I’m here to talk about the young company that has defied every stereotype of a web 2.0 company and has reverted to the classical model of forging the path on its own. After Google established itself, relatively later than some of the other companies, no company has really sought to go public (successfully anyway). Facebook, however, has had a very interesting history going against analyst expectations. Let’s take a quick revisit of the history of Facebook.

It began as a frustrated student from Harvard couldn’t properly find information about another student on campus. (I felt the same way about my PH system but I didn’t think of the billion dollar idea at the time…sigh). After starting out at the IVY League schools, it began to expand schools around the nation. When facebook came to Northwestern for instance, it was the middle of midterms week. I’m pretty sure the school’s average decreased due to the productivity killer that facebook was. Zuckerberg drops out of Harvard, moves to the valley, yada yada yada, rumor to sell to Yahoo for $750 million, $1.2 Billion, but no go…the rest is history.

So what now? For a company that has done so much for its users – what more can it do? How does a young company like this stay “cool” to a demographic that gets bored with something quicker than making a TV dinner. I have a couple of ideas that not only apply to Facebook – but any new company searching for its niche.

Reinventing the wheel on the same car is not a bad thing.

Facebook tested the waters by launching Newsfeed and saw the repercussions of their actions. Essentially they learned “you don’t mess with people’s privacy settings.” That being said, you do need to do something new in order to keep users interested. Now if you poll a group of students, they would probably tell you that they hate change regarding sites. This is a case, however, where users don’t necessarily know what is best for them.  Newsfeed, for instance, was a genius way to reduce the number of page views for Facebook.  Though they were up in arms about it, once given control, it has become a way of life in browsing Facebook.

The coolest thing I’ve found about Facebook is it’s intelligent updating of Newsfeed.  If you randomly browse someones profile that you haven’t seen, their information is much more likely to pop up on your Newsfeed.  This is done to:

  • create a hierarchical structure of indexing what users want (tagging)
  • properly utilize the top 20 items on Newsfeed, proper structuring

This structuring is something that is seen very often in repeated paging of various content.  For instance, you’ll see it a lot in video games, computer graphics, and backgrounds of programs.  To see it with information is something very unique.

Entering new spaces builds your base

Facebook launched its own “marketplace” last week.  Social Networking establishes connections that are otherwise not their in eBay or Craigslist.  The comfort factor of having a relationship with someone that you are doing business with is not to be overlooked.  EBay has been successful in my opinion because there did not exist an alternative platform to do business with your friends.  That being said, I think the transactions between Facebook friends will be more of convenience versus pure business.  Nonetheless, Facebook can charge for transaction fees and advertisements for revenue sources.

Facebook also has the ability to take a bit of a myspace approach by integrating music into their profiles.  Crucial to any social networking site is the ability to give all types of information about a person.  MySpace was started as a music site to be able to launch young music careers.  Facebook has the network to fulfill this niche.

The sky is the limit

Facebook can do whatever it wants in the future.  Ultimately, it can expand further, reinvent its site every so often, but it needs to get a steady source of revenue with high growth possibilities.  Ultimately, this means clever partnerships with big companies to integrate its contact lists with software applications.  These deals will be crucial for Facebook to go “2.0.”

Just my $.02…

-SD





Goooootube! – The Redefinition of an Entrepreneur

6 11 2006

Let me begin by apologizing for the lack of blogging during the last 2 months. After getting back to school away from the cubicle lifestyle, I found it difficult to keep up with the tech news and keep this site updated. Nonetheless, I plan on trying to update it more frequently because I’ve felt as though I’ve lost some touch with the tech news.

In the last two months, the tech industry has been active as usual. The biggest news, however, involves two of the powerhouse internet companies teaming together. Google recently acquired YouTube for $1.65 billion dollars. Though this may seem like a simple powerhouse buyout, the implications of something like this have significantly changed the landscapes of entrepreneurs and internet companies around the industry.

Why become an entrepreneur?

The goal of starting a company has changed since the 90’s. Entrepreneurs used to have the goal of starting a company, getting funded by a well known VC firm, and then going IPO and riding off into the sunset. These entrepreneurs would ultimately hit it big with one firm, then move onto another project or even start their own fund to promote other small ideas. The PayPal “mafia” as they are called are notorious for starting great companies like Yelp, YouTube and even LinkedIn.

But the question that we have to ask ourselves is the following: Has the goal of starting a company and treading your own path changed in the last five years? Companies these days seem to start up and have zero idea on how to make money through their sites (YouTube included). Their model is meant to gain significant amounts of traffic so that a larger company can ultimately buy them out.

At this point, we have to ask ourselves, do we consider that still entrepreneurial? Starting your own company and developing an idea is exceptional, but the main selling point for all of these companies is simply traffic. Grouper was bought by Sony for $66 million dollars, MySpace was bought by News Corp and a plethora of other companies are looking to make that quick buck. The bottom line is that the mold and motives of an entrepreneur has changed significantly since the 90’s.

Why is traffic so important?

Let’s take Google for example. What is their main motivation to buy a company like YouTube? Is it the potential impending law suits that may come of the large amount of copy written material on the site? Or is it the expensive bandwidth costs that they have to pay on a monthly basis (rumored around $1million). In Google’s eyes, they gain significant traffic to divert back to their home site “Google.com.” From Google.com, with the increased amount of traffic, they can start charging more for their advertisements so that their sponsored links can be sold for higher prices.

This model makes a lot of sense for Google. Higher traffic is the only way they can make more money since they are already so large. Their external services that they have tried to do have not been very successful. Nonetheless – this model will probably be adopted by companies like Yahoo, where an acquisition in facebook can significantly increase their traffic and ad pricing.

So now what?

This partnership will prove to be the building blocks for other companies and how they operate. It should be interesting to see when the phase of web 2.0 companies getting bought will slow down. The way things are going, however, it doesn’t seem like it will slow down anytime soon.

Just my $.02 (feels good to say that again)

–SD





Hey Google…we don’t need to hear about everything you do..

11 08 2006

Have you noticed recently how everything that Google ever does, however minute it may be, seems to be coming out in the press. Today – Google indicated that they’re making some revisions to their homepage as they’re adding a “video” link on the top. Now is that really necessary to hear about every small thing that Google does?

I understand that when Google has a large product or enters into a new business, it’s definitely worthy of some press. Their overall stature in the market and ability to shake up a market sector creates a stir in any company. Google Checkout, their new payment platform for buyers created a large wave among PayPal, as PayPal was the reigning e-commerce platform champions for the past 4-5 years. Issues like that are worthy of news – a simple integration change on their website is not.

Google Local for instance came out with saved address location last week which was also worthy of the press – something that Microsoft, Yahoo and most other maps had done a year ago. I understand that Google is a large player but every change they make is not going to shake up an industry.

Which brings me to my next point sparked by a fantastic article I read in business week regarding Google products. I love google and I love the way they have simplified the web – but their products do not gain as much traction as expected. The reason I liked this article was not because it was simply putting down Google, but because it actually took an accurate snapshot of what is going on in the market right now. It’s very simple to praise the companies that are doing very well – but to find fault in them is a much different ball game. Let’s look at some of their product which got an extremely large welcoming…but not too large following:

  • Google Spreadsheets – deemed to be the “excel killer” has yet to really get any traction – reasoning? I think when you’re using a spreadsheet you’re looking to make complicated calculations…the simplicity model just doesn’t work.
  • Google Writely – This is the word processor unit which came out recently – I think this has some functionality if integrated with blogger – a straight to webpage posting through the browser – without that however, it could be a nice way to alleviate the concerns of using word-pad.
  • Google Checkout – considered the PayPal Killer – this app has gotten some heads to turn because of its rebate offers – it has ways to go and the initial feedback is showing that there are many delays with the user experience. Announced today however, you can get a free t shirt if you make a $20 purchase or more using it
  • Google Video – YouTube seems to have taken this market – when it first came out, it really was big with the top 100 videos.
  • Google Talk – Stats recently came out that only 44,000 users use Gtalk on a consistent basis – MSN has almost 10 times that number

I guess what I’m getting at is when you step back and look at the Google products, they really haven’t done as well as the reception that they get. How will this affect their bottom line? Well we’ll have to see soon.

Just my $.02

–SD





Personal Computer – Is it still personal?

15 06 2006

Here is something that was sparked by an ad I saw for HP – the idea of reinventing the personal computer – bringing it back to square one. Some background on this was that in the older days – computers were gigantic machines which would take exponentially long times to process huge math programs and were used by large companies/graduate studies as a means of experimentation. It was only with the influence of companies like Xerox, Apple and the small company up in Seattle that applications began to be created with a personal computer which could be used by the common man.

The question arises today on whether we have come to an age where computers have become such a large part of our life, that it seizes to be personal. Rather it becomes a part of our life, a component that is necessary for our everyday lives and activities. This post is not really a test on how we use computers and whether it is necessary – but really how the computer has changed in terms of usage and such.

I think it is necessary define the parameters before delving into a problem in order to get a better understanding of what is being addressed in this post:

  • computers are becoming ubiquitious – everyone has it and the definition of a computer is a bit hazy. I use computer in a broad sense which is all inclusive of internet connectivity.
  • The question is, would it still be considered a computer if you have an email device/smartphone PDA device. Ultimately, these are meant for internet connectivity and are predominantely used for remote email access

The question now that we ask ourselves is how has the usage of the computer changed since the internet was first invented. We went through one phase of the web in which we surfed the internet, used email through software clients and ultimately had a distinction between internet connectivity and software usage. With dial up speeds, it was a task to use the internet.

As we've progressed from that point onward, a lot has changed. Broadband internet connectivity has demonstrated that whereever we are, we can be connected to the internet. Ultimately, this caused the movement of web 2.0, a vague term coined to demonstrate that the internet is changing and the way that we use it will as well. This means the following, any machine can become literally personalized with content specific to the user. You can already see this taking place with Google, Microsoft and other websites. Personalized content is one of the hottest sectors in internet technology today.

This brings us to the question at hand, if everything is become personalized on the web, what is left for each of us on our personal computer. Pretty soon we'll be able to store most of our files on a shared server, everything will be available again via the internet and all uses of the internet which is specific to us can be done from any computer around the world with a broadband internet connection. With the Wi-Fi revolution panning out as planned, pretty soon we wont even need a wire for most of this. Is the computer still personal, for the time being yes….but in a couple of years, probably not.

If you've been watching TV recently, HP came out with an advertisement about this with famous rap mogul Jay-Z and the different facets of how he uses his computer. As a means of catering to a wide audience, they attempt to show how the HP computers can do a variety of activites rather than simply niching themselves into one market (like Apple with media). Their tagline – making the computer personal again. I thank them for giving me the inspiration to question this statement.