Thursday, January 11, 2007

Show me the money: the buzzword for 2007

Valleywag does an analysis and informs us that usage of Web 2.0 term was at its peak sometime in October 2006 and from then on, there is almost a freefall.

This had to happen. Barely 10 days into 2007, and we see Backfence backing down, Tagworld almost over (?)…the Techcrunch deadpool is filling up.

In all forms of so-called Web 2.0 startups, the focus will be on monetization – revenue, profits, what else?

- how will Video sites pay users and make money at the same time?
- how will Digg improve its earnings?
- how will the social bookmarking site make money? Will they choose to pay for server costs from their own pockets for 3 years at least?
- how will citizen journalism sites make money? So as to push the cause of CitiJ, better stories, better interactivity.

Notes on the ideal cellphone

Pictured above is the Black Box phone concept from Benq-Siemens.

1. Be cool. The phone is a style statement. Something that you can show off.
2. Apple iPhone type large touch screen and sleek.
3. 3 Megapixel and above camera (Nokia N series, Sony Ericsson 790). 2 Cameras – one in front for Chatting, and the other at the back for general recording.
4. Open source platform: For example, Moko, Tuxphone, Linux mobile. Let free third party application providers.
5. One click item send feature (post to blog, flickr, etc.)
6. Wireless keyboard support.
7. Third party support to all popular document types – Pdf, MS Office, etc.
8. Voice recognition: For example, the iPhone is of no use for the blind.
9. Larger flash drive: At least 16 GB. Sandisk recently came up with 32 GB solid state hard disk but is priced at $600 for the moment.
10. USB 2.0
11. Micro SD or similar slot.
12. GPS
13. 3G and above
14 . Fully wireless: Wifi, Wimax, VoIP, Bluetooth.
15. Freedom from the carriers: looking at scenarios where P2P mobile networks thrive.
16. One touch synchronization with other devices: PC, Media Server, etc.
17. Simple, inituitive user interface.
Idea: why not let the user design his own interface?
Something on the lines of customizing the desktop, the browser, search.
18. RIM-like hassle-free email.
19. Push-to-talk, IM
20. Battery life: 16 hours audio, 8 hours talk
21. All-in-one: GSM, CDMA, GPRS
22. No DRM
23. RSS, alerts

This is an incomplete list. Help me out here, please.

What came before the iPhone

News about the iPhone started coming in a big way since January 2006. Last year, we saw some interesting concept phone designs and many iPhone designs by enthusiasts as well.

A sampling of these designs, starting with a phone from LG which looks uncannily similar to the iPhone, followed by a touch screen version of the iPod designed by fans when asked for what they wanted most in the next version of the iPod.

Engadget is running a story on the LG phone featured above and asks whether Apple will have to face another lawsuit after Cisco.

Followed by that is my choice from more than 35 iPhone concept desings from enthusiasts at this great site devoted to iPhone designs. My other favorite designs are the Black Box concept phone from Benq- Siemens and Nokia's full screen cellphone concept.

For more, click on these Google search results for iPhone designs and concept phone.

Wednesday, January 10, 2007

Apple’s iPhone: 8 important issues

1. On Apple’s new Avatar as a Consumer Electronics Company

About the move from the office to the drawing room - there are challenges ahead:

The margins in consumer electronics are 20% and below.
According to CNBC, Apple enjoys a profit margin of 25% on the iPod and 30% on Apple PCs.

I was watching CNBC’s coverage of the iPhone launch and an analyst informs that he is more interested in Apple’s capture of the PC market, it has currently increased its market share to about 4%.

How Apple transfers its brand aura to the consumer electronics remains to be seen.
The iPod’s 5-year run will help matters – many will know the Apple brand this time around.

Apple will have to come up with a mix of Nokia’s ‘design + reach’ philoshophy and someone like Bang & Olufson/ Bose type ‘Nichiness’.

2. On the iPhone revolutionalizing the mobile phone business
You remove the keypad and make it thin - where is the revolution? Maybe they are talking about the Sleek looks.

I know shares of Motorola (Cingular was a big buyer of Razr phones), RIM and others went down as news of the iPhone’s launch came out, but these are early times.

There were Mp3 players before the iPod. There were phones, 'phones- cum -music -players -cum- touch screen interfaces' before the iPhone. Nokia already has many phones with Wi-fi.

I will call it a revolution if the iPhone changes people's usage of the music phone. The iPhone will be a revolution if it sells in big numbers, without Cingular's support, in countries all across the world.

3. Is it a Smartphone?

Applications from third parties are not allowed. So, for the moment, no RSS reader.

Engadget doesn’t think so as only Apple can add new application to the iPhone. On the other hand Jupiter analyst Michael Gartenberg says that in the United States already many carriers lock their smartphones, only allowing "trusted" applications to be installed.

4. Moving beyond Cingular and the U.S.
Cingular is at present North America's largest cellular network. Verizon, the number 2 player with 57 million customers won’t bite Apple’s offer as it runs its own iTunes’ like Vcast Music download service, based on Microsoft platform, launched this time around last year.

Apple needs to unlock the iPhone and come up with some crucial add-ons for a quick entry into the Asia and European market, which are more mobile savvy than the United States. I can tell you that many of my friends heard about the Apple brand only when they saw the iPod.

5. Apple should focus on addressing the needs of business users

RIM has a good grip on the corporate market and is a good role model to follow in the Mobile market. RIM has done well in a niche market and making money with its E-mail service on mobiles.

At present, iPhone has no support for Microsoft documents and MS attachments. Support for MS Exchange is either unclear or missing.

6. Wifi over 3G?
By not supporting 3G at the moment, Apple recognizes the growing importance of Wifi in the mobile market. Wifi, along with Wimax, Bluetooth and VoIP promises to free users from the clutches of carriers.

Wired says:

it would have been far better if Apple had taken on the carriers' chokehold on handset provisioning wholesale, and simply sold unlocked phones.

7. iPhone vs.the UPMC
The UMPC, ultra-mobile PC with 7-inch screens is based on Windows XP and was launched via a viral campaign in Feb 2006. The project was codenamed Project Origami

The only UPMS launched till yet is Samsung Q1B, which has 3G internet access, 32 GB solid-state hard drive, and is priced at $ 900 which is a killer. At that price point, people are better off buying laptops. The iPhone’s $499/$599 pricing is a start in the right direction, but Apple will have to come up with add-ons and improvements quickly.

8. Issues with Hardware and Accessories
The iPhone has the same old built-in, non-user-serviceable battery, like the iPod. Would it hurt Apple’s ‘design aesthetics” to go in for a Nokia-like Lithium battery?

I suspect we will to buy expensive QWERTY keyboards from Apple later on when Keyboard is added later. A keyboard-less world is still some while away.

As usual, detailed coverage of the iPhone's launch is over at Gizmodo and Engadget.

Tuesday, January 09, 2007

Mybloglog: a better model for blog networks?

When Yahoo announced that it has purchased Mybloglog, a startup which came into being in July 2006, it led me to think about the model of current blog network model, which is basically 2-200 so-so blogs grouped around 2-4 bestselling blogs, trying to present the face of a newspaper to advertisers.

The blog network model
Blog Network owners are in the old media mould, for which blogging is a tool for cheap and easy publishing. When you work for a blog network, you are no more the blogger in the free-spirited blogger way.

Other models
A network like 9Rules, comprising of independent bloggers under a common advertising platform seems closest to the idea behind Myboglog, which builds social networks on blogs and on social networking sites.

For example, my account on Mybloglog would show my chosen favorite bloggers as my friends, provided they have a Mybloglog account.

You might also say MyBlogLog is the more 'social' version of the good old blogroll. Unlike traditional blog neworks, you add and remove your friends, depending on their activity.

The advertising aspect of Mybloglog:

Mybloglog also looks at reader behavior inside blogs, like what is being read and where readers go next, delivering information it can sell to web advertisers...that’s probably the charm for Yahoo.

Second Life officially declares open house for spammers

Perhaps trying to deflect criticism for building excessive hype, owners of Second Life Linden Labs have announced that the Second Life code is available free under the GPL license.

Everyone is trying to set set the agenda for 2007 - from Bill Gates, Michael arrington to everone else. Second Life has competition as well and they want to monetize on their first-come position. Among the competition, there is Multiverse, Areae, and Open Croquet.

However, the server code is not open sourced, only the client source. Second Life is going the Myspace way, creating a new economy of service providers
who do everything from helping users decorate their profiles to creating tools that let advertisers target MySpace users.

Second Life is not going that far, it is only going to allow a competitive marketplace for hosters of connected Second Life clients.

There is no new system. You still play by Second Life’s rules.

- As I said earlier, what’s the joy in going to a place which is more Spam and marketing universe than a fun, game-like Universe?

- What is a virtual world with all the goodies that you cannot do in real life?
Where is the booty for example? Where is the excitement other than corporate sponsored Second Life parties?

- Expect more pesty spambots who will peddle everything from magazine subscriptions and cut rate household items to the billion-dollar lottery.

- Expect the Nigerian scammers to move in to Second Life as well.

- Open source or no, you still have to have an account to log in. The money does not stop.

At least the Myspace people do not ask for money in lieu of all that spam.

Monday, January 08, 2007

Getting on top of Digg is out, becoming a top Digg user is in

There is no fun in getting your story on top of Digg anymore.

If you are not the New York Times or any of the famous news sites, the Digg effect brings your server down and few visitors click on the ads.

Make a resolution this year to be Top Digg user.
Scott Karp says being a Top Digg user is the same like being a NYT editor. That is hyperbole of course, trying to please the gods at Digg.

Saying that success on Digg is just like success in old media, Scott informs that:

- only the top 2,457 Digg users have gotten 3 or more stories to the homepage, putting them in the top 0.35% of Digg’s 707,593 registered users.

- only the top 1,662 Digg users have gotten 4 or more stories to the homepage, putting them in the top 0.23%.

So, how do you become a Top Digg user?
Seomoz says that top 100 Digg Users Control 56% of Digg's HomePage.

Ozgur Alaz is a top Digg user.
His suggestions are simple:

- Make Friends:
… look at Top user screen and sort them by dugg stories you see that some of diggers dugg more than 10000 story. Add them as a friend. They are more likely to add their diggs to your stories

- Digg Your Friends News:
Rules of reciprocation is true for digg community, too. If you dugg your friends’ stories they respond positively and they start to dugg your stories, too.

Aaaz is another top Digg user. He became a top digg user in 30 days and a top 10 user in 3 months.

His secret?
1. Aaaz has 458 Digg users as friends and over 600 Digg users call Aaaz a friend. Forget these mismatching numbers, all part of the Web 2.0 algorithm.
2. Aaaz puts most stories from traditional top news sites -,,,,,,, and

Like Techmeme, the guys at Digg prefer news sites over blogs for news items. I guess blogs are then best at DIY stuff. A reason why this blog will never make it to the front page. :-)

So, before you launch your news site, make sure you have at least 75 friends on Digg. If its is easy for guys like Aaaz and Ozgur, you can do it too. Or, you can ask your friends, employees and family to have Digg accounts. Tell them it is as cool as being a NYT reporter.


Web 2.0 gets a Pied Piper in a cheerleader’s uniform

Entrepreneurs must not heed Michael Arrington’s call for disregarding revenues and profits and focus on building upon network effects. Although I agree with Arrington’s call to go slow on detailed, 5-year business planning

January often seems to the month for setting the agenda for the rest of the year. In January 2006, we read a lot about the viability and future of Blog Networks. In January 2007, Web 2.0 startups are on the line. Latest news stories point towards trouble brewing ahead. CEOs are leaving (example: Backfence); companies are downsizing and so forth.

Ironically, Techcruch also has a deadpool with lists of companies shutting down.

Entrepreneurs must wake up and smell the coffee. First, forgive this silly analogy.

1. Arrington’s ‘Everything is Fine’ call is similar to the times before the stock market implosion in 1929, before the Dotcom collapse in 2000. He has a lot running on Web 2.0 , on all those startups sponsoring Techcruch parties and web sites.

Remember, Techcruch is one of the few media startups actually making money from the Web 2.0 boom.

2. Arrington says, “Network Effect is still the most powerful force driving Internet success today.”

Duh? Bob Metcalfe’s idea has influenced startups in the earlier Dotcom boom. Remember the unending procession of free email providers? The Latest portal? The Dog food delivery site?

Things are not much different now. Just because we can all share links does not mean anything, in business terms. There is only one company making big money from links, a company by the name of Google.

Social networks are the portals of today. How many social networks do you remember apart from Orkut, Facebook, Myspace and Beebo? There are more than 300 of them and counting.

3. Arrington says, “I disagree that Web 2.0 companies cannot become sustainable businesses”.

But how? How much advertising money is floating around? There is too much inventory to go around. While Techcrunch is thriving at brand-related advertising money, others have to work real hard for the important shopping advertising money.

Classified advertising brings in good money but it seems Craigslist has a first call on that.

How long can companies hope to go on free user-generated content?

4. Building to Flip is no answer. The Guys at Google, Yahoo and Microsoft are not that dumb, you know. They now what applications they can built and launch on their own and what they are going to buy. Google knew its Video offering sucked and so it bought Youtube.

5. Arrington says, “a failure by companies to drive earnings enough to keep up with stock prices” was the main reason for the “Web 1.0 implosion.”

That is not all. There was too much VC money chasing too many stupid, me-too ideas. The only reason this current Web 1.0 boom persists is that startup costs have hit the bottom.

The only other costs startups have to pay are sponsor costs for Techcrunch type blogs so that they get favorable mention.

This is a weak Viral strategy. Users of your service do not read Techcrunch, they are over at the likes of Orkut and Facebook.

6. There is a big difference in being a cheerleader of entrepreneurs and being the Pied Piper.

Isn’t it funny that the same Web site that seemingly disavows profits makes tones of money itself.
Upside, Red Herring and The Standard said the same before the Web 1.0 debacle.

I wish I had some answers for Web 2.0 entrepreneurs. All I can say is keep your costs and expectations down and hunker in for a long run. Focus on your users’ needs rather than PR needs.

Web 2.0 companies are not some form of Islamic banking which abhors profits and interest. The founder of Matsushita Electronics (Panasonic) used to say that when you start a company using borrowed money, you are using society’s resources - you must make something worthwhile.

Related analysis here.

Sunday, January 07, 2007

Microsoft's new fear: a simple browser tool

The new GUtil firefox extension promises to make Google OS a reality sooner than we previously thought. Presently in early stage versions, GUtil installs a top-down start menu to the browser’s address bar, just like in Windows or Mac OS.

Google Blogoscoped says the implementation leaves a lot to be desired.

However, if GUtil is able to provide a seamless, single-click access to all of Google’s online tools, it can be a big blow for desktop software providers. Microsoft and Vista supporters, take note.

Google toolbar also provides similar functions, but this Desktop OS-like metaphor is catchy.

My suggestions:

1. I think adding a ‘log in to Google’ option should some first - prompting users to log in if the user has not logged in already.

2. Many of us are afraid of Google’s ‘Store all data’ idea, so it would also be nice if the software give users a checklist of types of datawe want Google to save online – for example, you may choose to save your articles, spreadsheets and presentations online but opt for saving passwords and searches on your computer.

That would make users feel more comfortable with using online applications.

3. Last idea: The drop down menu must also have a better version of Google Personal Start page, with tagging and options for adding widgets. Adding options for enterprises to control list of widgets would also be nice.