Wednesday, January 31, 2007

Conspiracy theory No. 1: Google's evil plan

posted by Andy Leff
Time for my daily conspiracy theory-slash-rant! Today's springboard: YouTube's announcement that it will share profits with people who generate enough content to draw advertisers.

This business model will pan out in one, and only one way. Google (YouTube's parent co.) has a huge purse of money -- at last count, around $7 billion. They can and will dip into it to pay their most prolific video uploaders.

This will get everyone onto YouTube which, overnight, became Google's most recognized brand. Google will then make even more money, and slowly push sites with similar profit-sharing models -- Revver, Metacafe, and, among others -- into death by 1000 cuts.

Then, as these smaller players asphyxiate, Google will acquire them. This, in turn, adds more market share for their own video services, as they fold these other services into YouTube.

And once they have control of the video market, it would not surprise me to see them roll out advertisements embedded in their videos (such as what AdBrite is doing in beta mode) to make -- all together now! -- even more money.

The final nail in the digital coffin: Google AdWords all over these pages. This will make them the dominant multimedia site on the planet, and win them an almost-but-not-quite monopoly.

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Tuesday, January 30, 2007

Sweden says 'Ja' to Second Life

posted by Andy Leff
Move over, IKEA and meatballs! Sweden is staking another claim to fame by becoming the first country to establish an official embassy within Second Life.

This is ridiculous. Yet it's an excellent example of how far people and organizations are willing to push the envelope when it comes to social networking.

And going too far is arguably better than going nowhere at all. How does your business stack up in the social networking arena? Are you connected to other businesses in your space? Can your network-savvy customers find you? Moreover, can the right advertisers find you?

Ask these questions now, and you increase your chances of getting the right virtual passport for true social commerce.

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Monday, January 29, 2007

Gazing into the MySpace crystal ball

posted by Andy Leff
Hot off the social network presses -- MySpace is planning to double the number of countries it serves by the end of 2007, but as of yet, is not naming names.

My prediction for one of those undisclosed markets: South Korea. Wouldn't surprise me in the least if MySpace launches there, considering it's essentially the tech hub for Asia, with the highest broadband penetration in the world.

Now enter the competition. There's already an active, popular South Korean social networking site called Cyworld. (Here's the U.S. version, for those of you who don't have time to brush up on your Hangugeo.)

Think Second Life, but bigger. Plus, Cyworld makes a ton of money from advertising, hosting corporate-sponsored pages, and selling backgrounds, charms, graphics, and music for individual sites.

Cool, right? Well, this is even cooler ... Cyworld attracts approximately 90 percent of people ages 16 to 28 in South Korea. And what U.S. company wouldn't kill for such broad access to that coveted demographic?

Also, wouldn't surprise me if MySpace starts to position itself to take a whack at Google in 2007 by buying up companies and making itself a huge portal. It's already got the traffic -- now it just needs the real estate. (Hmm. Maybe it can get some in Cyworld ...)

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Sunday, January 14, 2007

E-commerce goes up in '06, grows up in '07

posted by Andy Leff
Great news for small businesses everywhere: 2006 featured double digit growth in the e-commerce field -- over $102 billion for the year.

Can't get better than that, right? Oh wait. It can. Analysts are projecting an additional 20 percent increase in '07.

Key reasons for this growth:

* increasing adoption of broadband
* lower prices in online channels
* increased convenience of online shopping

This makes it the perfect time for businesses to get online and get connected to one another -- and to advertisers -- before they miss the bus on an incredibly lucrative market opportunity. Yet not enough businesses are there, deterred by the perception that e-commerce infrastructure is expensive, or that identity thieves will ravage their customer base.

Both excuses are ungrounded. Yes, it can be expensive to get online, especially for a smaller business. Web-site setup alone can cost thousands of dollars. But look at the ultimate purpose: to source new business. This makes a $2,000 investment upfront well worth it down the road, especially if the business focuses on search engine optimization, networking, and community contacts.

And don't get me started on credit cards. I blame media hype for the cloud of fear over identity theft and fraud. When people go into a clothing store at the mall and steal a jacket, do you hear about that? No. Why? Because someone stealing a jacket does not sell newspapers, magazines, or prime-time news coverage on network TV. Online crime does.

As a result, business owners' perception of identity theft is relative -- not absolute -- and should not deter online business. Besides, new stringent security protocols in place at many e-commerce and advertising sites make shopping there safer than handing your credit card to the cashier at 7-11.

If you want your business to grow, take the 'new school' approach: technology. Doing it 'old school' -- brick and mortar stores, cash-only transactions, etc. -- will help your competition.

It's easy to implement, too. Call your local Chamber of Commerce, and ask if they offer any Internet service provider deals. Check with the Better Business Bureau to find a reputable Web developer who fits your budget. And keep an eye on local initiatives: Many cities, Philadelphia among them, are announcing municipal Wi-Fi initiatives that extend free and reduced prices for community-wide Internet.

Sooner or later, everyone will join the 21st-century party. Don't let your business arrive fashionably late -- especially when it doesn't have to.

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