In the wake of the explosive LinkedIn IPO, which saw a 109% first day gain that valued the nine-year old company with over 100 million users at $8.9 billion, an intense spotlight has been focused on the new wave of Web-based companies that have taken venture capitalists and private and secondary markets by storm. The highly anticipated and inevitable IPOs of Web titans Facebook and Groupon have – rightly or wrongly – brought up fears of a “bubble” reminiscent of the dot-com bust that wiped away the fortunes of millions and oversaw the collapse of hundreds of “companies” that rushed to go public without revenues, not to mention profits.
(My take? We’re not in a bubble. Not yet. The lessons from a decade ago are fresh enough in the minds of VCs and investors, and the simple fact that we are being cautious and asking questions proves we are eons away from the insanity of 2000.)
The promise of the new media era is dependent on a new era of advertising, one that is integrated across many platforms, channels and formats. The booming success of Google and others dependent on online advertising may lead some to think that the market is saturated, leaving little opportunity for new entrants or growth for existing players. However, the data paints a dramatically different picture. The IAB projects double-digit growth in global online advertising spending for each of the next four years, reaching nearly $100 billion by 2014, or 17.4% of combined global ad spending.
There is a significant trend that one doesn’t need to dive through troves of data to recognize: people across the world are spending more time online. The time spent online on computers, tablets and smartphones is dramatically increasing year over year, but even these markets are relatively under-served. Just 82 million of more than 330 million Americans access the Internet on their mobile phones, and just 31% of wireless subscribers own a smartphone. Even with the billions of dollars in profits enjoyed by Apple, Google, Nokia and Microsoft in the mobile sector, the market is just getting started. More users with more Web-enabled smartphones means more ad dollars flowing to Web companies from the world’s biggest spenders.
So does this mean the tens of billions of dollars spent on television advertising will magically flow online? No. New value is created by reaching consumers online, and that means new dollars will be spent. Television advertising offers benefits that the hottest social media and branded content companies could never provide, and vice versa. It is the value of connecting and conversing with consumers in the new media era that will entice advertisers to direct new dollars from their ad budgets toward online campaigns.
The power to connect brands and consumers where the conversations are happening (social) and at the point of intent (branded content, action-oriented content) provides the opportunity for companies that offer these services to capitalize on the significant upside potential in the online advertising market. Online advertising isn’t just text links and banner ads. The new formats enabled by tablet and mobile technology and revolutionary business models ensure Silicon Valley’s best executors will reap the rewards of a booming online advertising market in the coming years.
Hat Tip: AdWeek – The Changing Scope of Online Advertising
IAB Report: 2010 Internet Advertising Reveneus Increase 15% to $26 Billion, A New Record
Under the tutelage of Bill Gates, Microsoft exploded into one of the world’s largest and most valuable companies, generating billions of dollars in profits annually for shareholders. The dot-com boom made many employees and investors millionaires, and the company appeared unstoppable.
As the company matured, growth stabilized and new tech darlings like Google stole the spotlight. Delayed product launches of centerpiece operating systems, failed products and advertising campaigns, broken acquisition deals and an apparent lack of internal innovation gave Microsoft a reputation as a “has been” that had passed its prime, and current CEO Steve Ballmer lost the confidence of many investors.
However, new data is showing that Microsoft may be experiencing a reversal of fortunes, as the company’s investments in search are beginning to pay off. The brutally competitive search engine market has had one dominant player for the last decade – Google – which has held as much as 80 percent of the United States search market.
In October 2010, the U.S. search marketshare breakdown was as follows: Google (72.15%); Yahoo + Bing (23.64%). The most recent Hitwise data shows Bing has made substantial gains at the expense of Google and Yahoo. Bing-powered search now controls 30.01% of the U.S. search market, while Google’s share has fallen to 64.42%. (See below: Image courtesy of Mashable.)
These gains may be the result of a major multi-platform ad push by Microsoft for Bing, but the trend is a positive sign for investors and spectators that have remained loyal to the company.
Strong performance in search, high expectations for tablet and PC versions of the upcoming Windows 8 platform, new developer confidence in the Windows Phone platform following the recent Nokia partnership announcement, the smashing success of Kinect and Xbox 360 and widespread adoption of Microsoft’s iPhone and iPad apps are powerful indicators of a possible Microsoft mindshare and marketshare resurgence.
Less than a decade after Wall Street and Silicon Valley critics alike pronounced the death of Apple as a legitimate player in the lucrative personal computer market, the world has witnessed the resurgence of the Cupertino-based company as the dominant force in the rapidly-growing world of consumer electronics. Could we be seeing the beginning of an Apple-esque Microsoft turnaround? Critics will call it wishful thinking, but with Google in the process of a massive leadership change, Yahoo! undergoing a drawn-out transition phase and the tenure of Apple CEO Steve Jobs uncertain, the competitive landscape is changing and Microsoft has substantial opportunities in search, PCs and mobile.
Free utility software is one of the great perks of the Web, with generous tinkerers sharing their creations with the world at no cost. One of my favorite tools, Wordle, comes from Johnathan Feinberg and partial source code owner IBM.
Wordle is a clever tag cloud tool that automatically creates a custom text cloud from a slate of creative templates. Users can enter text manually, copy/paste text blocks, or allow the program to crawl any website and Wordle will create a custom word cloud with the given text. Users can then edit word orientation, edit text colors, alter color variation and access a host of other customizations.
(Click to enlarge.)
To create your own custom text cloud for free, visit www.Wordle.net.
What are your favorite free tools from around the Web? Share with a comment below.
Today Yahoo! announced a new search product, Search Direct, that integrates richer content and instant results to the search experience.
Could this be the product & morale boost Yahoo! needs? It just may be. After months of public hits and high-profile executive departures, Yahoo! has taken a significant step forward in reversing the company’s downward trend. Competition from Google, Facebook, Twitter and others have put pressure on Yahoo! to release an innovative, revolutionary product to capitalize on the company’s massive Web audience.
Search Direct is clearly an effort to make Yahoo! Search more of a destination and less a sea of links. Search is about content and information discovery, and reducing the number of steps it takes to get a user from query to information is vital.
View and test Search Direct here.
Google Instant was a start – it brought links to users faster. Yahoo! Direct Search takes it one step further, providing a richer experience and faster, more comprehensive access to answers, not just links to answers. It’s early and the product is still being refined, but it has big potential.
Here is the press release from Yahoo! announcing Search Direct:
Yahoo! (NASDAQ: YHOO), the premier digital media company, today announced Search Direct, which delivers answers and direct access to websites before you complete a query, hit the search button, or go to a search results page. This search innovation supports Yahoo!’s strategy to fundamentally shift the way people experience the Web – by providing the richest, most integrated content faster and more efficiently.This new feature, currently in beta, taps into Yahoo!’s unique opportunity to combine content and structured data and to provide a rich search experience. Search Direct predicts search results as fast as a person types, character by character, and presents those results dynamically, generating a fast, simple search experience that goes beyond a list of blue links. Search Direct rolls out in a public beta to Yahoo! users across the U.S. today, and will be available in other Yahoo! products and markets later this year.
“With today’s launch, direct answers – not the search results page – is the primary focus. We are redefining the search process and prominently displaying direct answers where search decisions are being made,” said Shashi Seth, senior vice president, Yahoo! Search and Marketplaces. “Search Direct is evidence of Yahoo! continuing to lead innovation in search, enabling people to take action faster, find what is most important, and sample what is possible with the next stage of search technology.”
With Search Direct, Yahoo! content is combined with information from the Web to provide rich answers, not just links, and to give people the option to immediately engage or continue to a traditional search results page. In this beta release, coverage includes top trending searches, movies, TV, sports teams and players, weather, local, travel, stocks, and shopping categories now available at search.yahoo.com.
· Trending Searches – The moment the cursor hits the search box, top search trends appear and are updated every 10 minutes to display the latest and greatest search trends.
· Search Previews – Search Direct predicts the search term as you type, providing the 10 most likely searches. You can then easily scan each option to see the related top results and find the best match for your needs.
· Direct Answers – For many common searches, Search Direct provides instant answers before you click the Search button. Find an address or phone number, a three-day weather forecast, financial stock performance, the top trending stories at Yahoo! News, or when and where a movie is playing – all without going to a results page.
· Direct Results – When you scan the search options and find the site you need, Search Direct provides exactly that – direct access to the site. No more overwhelming pages of links.
· Rich Content – For all top searches about sports, top news stories, and finance, Search Direct displays rich content that only the world’s largest digital media company can provide. For example, type “n” to get the Yahoo! News display, which always shows the top two trending stories.
Yahoo! will continue to enhance and update Search Direct with new content, such as popular music and local listings. For more information and a demo video of Search Direct from Yahoo!, visit search.yahoo.com and our company blog, Yodel Anecdotal.
After weeks of speculation, Amazon officially announced the launch of an on-demand streaming video service, free of charge for Amazon Prime members. Subscribers (who pay $79 per year for unlimited two-day shipping) will now have instant access to more than 5,000 movies and television shows. But can Amazon – a company that has recently branched out into new businesses – make any significant impact in a streaming video market dominated by Netflix?
Netflix boasts more than 20 million subscribers in North America and enjoys some of the highest customer satisfaction ratings in the country. CEO Reed Hastings has led Netflix to the height of corporate and consumer dominance, and in spite of the recent pullback in the company’s stock, the widespread growth is expected to continue. Netflix offers a massive media library of licensed content more than four times the size of Amazon’s, and with a growing number of instant streaming companies launching, the ability to host the most (and best) content is a key determining factor in the battle for customers. On the heels of the Amazon launch, Netflix announced a two-year, non-exclusive partnership with CBS that will bolster Netflix’s current content offerings.
Many agree that while Amazon’s new streaming service will be a valuable deal-sweetener on top of the unlimited shipping, Netflix isn’t currently facing a significant threat from the market newcomer. Perhaps more intriguing is the precarious partnership that exists between Netflix and Amazon’s cloud infrastructure, Amazon Web Services (AWS).
In early 2010, Netflix transferred a significant portion of its Web technology to AWS, a move that brought the streaming giant from massive data centers to Amazon’s massive cloud service. The transition freed Netflix from the massive financial costs and resource allocation demanded by the Oracle and IBM data centers it had previously used. Amazon’s cloud service allows Netflix to focus its engineering resources on customer-facing innovations and more importantly, allows the company to scale more efficiently. AWS offers a pay-as-you-go model that allows Netflix to add and subtract capacity as needed, eliminating contract commitments and resource-devouring depreciation costs.
In light of Amazon’s push into the instant streaming market, the two companies now face an intriguing competitive partnership. For Amazon Prime subscribers, the new perk will serve as an additional fringe benefit, but Netflix subscribers aren’t likely to abandon the company they so passionately enjoy and support. Neither the content offering nor the price point from Amazon are currently compelling enough to initiate the switch. Can Amazon leverage its impressive distribution channels and massive network of users to lure consumers to the company’s new video service? Will Netflix look to Rackspace or Microsoft for its cloud computing needs as competition from Amazon strengthens?
The ties between the two company are significant and will undoubtedly play a role in the future of the video streaming market, but the extent to which these two industry titans will co-exist or compete remains to be seen.