Gone Fiching?

Billy, creator of Downfly created something pretty interesting called Fichey.  He designed it as a navigational tool to browse links people had sent to you via Downfly, but this week Billy, Seth and I decided to launch it as an independent application .    A Microfiche inspired browse tool, that lets you browse popular sites.  Billy pushed it out last night and TechCrunch picked it up today.    A fun week in the press.

Java time

Big changes at Fotolog last week — we shipped the new Fotolog memberpage.  It is written in Java, an update from the old PHP code that goes back to the founding of the site.   Results are coming in and it looks like significant performance gains across the board.  

First the member experience has improved — the new page is cleaner and has a faster response time.   But in addition, we are now serving the site on less than half the boxes that we were using.  

Registrations are up — over the weekend we are seeing our daily registrations up over 35% given the improved performance and a requirement to register to post a guest book message.  Revenue lift from Google is trending up approximately 15% given additional contextual data from the guestbooks. 

This new code base will allow us to innovate much more on the member experience — that is why we made this change — we did expect to realize some other benefits.  But these across the board immediate gains are far broader than I expected.  

  

Mac App’s

A few people have asked me what applications I am using on my Mac, in particular all the little sidecar applications I use. When I start using a new application I typically add it to the "app's I use" section of findin.gs. But here is a snapshot of some of the more interesting applications I am currently using.

Omnifocus : Omnifocus is a Getting Things Done (aka, GTD) application that grew out of the work of Ethan Schoonover and the set of scripts that he wrote called Kinkless GTD. I tried Kinkless, moved over to Actiontastic and now I am trialling Ominfocus and loving it. The degree of granularity it offers in terms of project/context control is great – as you flip from project to context, zoom in and out of focus, see Ethan screencast of the product. In Betaworks I have a diverse set of projects that I want to track and manage — Omnifocus is still underdevelopment but the omingroup have the beginnings of a great application here.

Neoffice : Open Office for the Mac, works great, unlike MSFT Office it runs native, and becasue it opens files all inside of one application its far faster than office. I dont generate many office docs, I use Neo essentially as a viewer — works very well. The best of lotus Symphony final comes to life as an open source project.

Spirited away: I like to work with a clean desktop — Spirited Away does just that,it cleans up applications that are not in focus after X minutes, very useful.

Backdrop : Nice little application that drops a curtain between the application in focus and others – for someone who likes working with a clean space, this is a great little app. Spirited away and backdrop work very nicely together.

Mindmanager: Just starting to work with version 7. Its good client based mindmapping software, I am still trying to figure out how to integrate this into my workflow (aka "why do I need this, how does it help")

Groupcal : To synch between exchange and ical, snerdware has a piece of software that runs pretty well. Warning, dont disrupt a synch — recovery is not fun.

Quicksilver : Amazingly versatile finder application

Glance : Remote desktop, demo's and presentations, glance is something the Flog team introduced me to and its way simpler than the alternatives (webex etc).

Disk Warrior : I was doing some preventive maintence to the other week and tried to install Tech Tools Pro. In the process my hard drive melted down — half way through the installation I was stuck and off to the Genius bar.   Disk Warrior fixed the problem, Tech Tools didnt.   For hard disk errors Disk Warrior.

Thats it for now 

Alexa?

Now Alexa is tracking Fotolog as #15 in the world, with reach above 2% for the first time??!@?   Facebook is at 2.055% and they have had 80% growth in the past 3 months.    Yes, yes I know Alexa has its limitations but Comscore, Alexa, Quantcast all pointing to solid growth.

Fotolog snapshot from June 26th on Alexa

Flog clips, onward …

Some clips of recent Fotolog data … next week today we will pass 9 million user accounts.  The team has grown our audience by 60% since I came on board in late December and over 150% since June 2006.   Flog is currently the 20th most trafficked site in the world according to Alexa.  Comscore now ranks us as the largest site in Argentina, measured by total page views (we're doing 3x the page views of Yahoo).   In Spain, we're ranked #10, pageview wise we have seen a lot of growth in Europe this year, especially in Spain, Portugal, Italy and Germany. 

Comscore data for May 2007, top sites in Argentina

Also in May the site saw strong growth in the US (60% growth in unique visitors), albeit from a smaller base.    The arrival of micro-blogging sites in the US like Tumblr and Twitter is demonstrating how the use cases around blogging or self publishing are fragmenting.    Letting people post some combination of text, images, videos, presence and location — mingle that with a social network, shake, don't stir, and you get what Fotolog is about.  

Based on usage data Fotolog has become more of a social media network (tracking the usage patterns of MySpace, Mixi, Facebook and Bebo) rather than traditional online media network.   Lapping Yahoo in Argentina clearly supports this engagement argument — Fotolog's unique visitors are 1MM less than Yahoo's, yet the total minutes on the site are twice that of Yahoo and pages are 3x.     Fotolog's reach on Alexa continues to grow — over the past three months we are up 23% to 1.7% (note, I don't understand what happening with Orkut, both reach and growth seems to be slowing this year).    

I will be very interested to see how our launch of point-to-point IM does on Flog.   Within the next 10 days we will have Userplane's service up and running so members can message each other with one click (no client, user to user IM).     And to boot, Fotolog will have another significant announcement to make in the next few days.

F8 and that Telegraph road

The launch last week of Facebook's platform initiative, F8, has generated a lot of talk, much of it in the mainstream press.  Its a compelling story, Facebook is becoming a platform, out maneuvering Myspace, doing to the web what Microsoft did to the PC.   Its a story we have heard before, it seems to recur periodically.  However, the announcement last week was mostly about distribution –  it didn't involve either deep or open access to Facebook data nor open access to its infrastructure.   F8 as it stands today is a partnering platform.  This one more small step in a long negotiation that is taking place between web sites on how data is owned, on how its shared between sites and how people navigate through services on one site to another.   This conversation is still in its infancy.  

XML really began the process of lateral data flows between sites and the vision of the semantic web offers a rich set possibilities — yet it's early days — most sites still operate in vaccum's and most user data is still stuck in proprietary silos.   And while the technology certainly needs to evolve so do the scope and kind of business arrangements.   The web of contracts, contracts between vertical sites, contacts between sites and users – needs to evolve in order for the vision of the semantic web to reach some of its compelling end points.   Weaving, back to the Facebook announcement.  What happens next is more interesting than what happened last week.    Facebook has taken a different approach to Myspace – who has opt'd to control much of its third party innovation through fairly simplistic interfaces and binary business driven rules, more like a traditional media company, vs. letting the community really build on top of the service in a meaningful manner.     As the Facebook platform evolves there are a handful of things I will be watching:

1. How deep are are the API's that Facebook is going to present to the community.    Facebook markup language is a proprietary API, the "platform" maybe wide in terms of distribution but its not deep, there is little to no access for third parties to the social data or infrastructure that makes Facebook such an interesting service, and its not open for developers to just build on, everyone accepted into the platform has to be sanctioned by Facebook, the degree of openness, real openness (vs. marketing gibberish) will dictate the depth and the value of the platform.   Amazon has done a great job at developing a set of platform services — starting with the affiliate model, extending it into community and then the Mechanical Turk and the elastic computing cloud services.  These web services were built step by step along with trust and a degree of openness that surprised many.    Pretty much every startup I work with today is using EC2/S3 — if Facebook going to have the same influence over the web application space, if so they need to open up more than a distribution funnel. iLike's weekend server hunt demonstrates a need on the infrastructure side, but the is also a real need re: social data.    Offering Facebook users the ability to port social data, their social network across applications and letting applications developers innovate on top of that data set would be really interesting.

2. How will the application metaphor evolve?   I see the metaphor Facebook has applied as the most interesting thing in the announcement last week.  The web has spawned many interesting platforms for micro application development.    Applets, plugin's –  from WordPress to Firefox to Myspace there is a an active ecosystem of development around many web sites.    But the term application suggests user control beyond a widget or plug-in, applications are often monolithic, the management of applications by the underlying OS is usually benign and in service to the application (get me that device driver)  — the term application presents a high bar for Facebook to jump over.    To me the use of the term suggests a rich set of API's and a clearly defined layer – a layering of both technical and business terms.   Its an exciting challenge to see if they can make this truly an application environments.   And if they do, what is Facebook's relationship to these applications?   The identity issue below is only scratching the surface of this question.   It was fascinating to me that in the announcement last week most of the mainstream press look in the rear view mirror for metaphors — this was going to be like windows was to the PC.   I hope not — we don't need another OS, what we need are open development platforms — and open access to data.    I did a lot of work on platforms a long time back — back in 1998, I invested in a company called WebOS that tried to go down the path of applying the desktop metaphor to the web, of duplicating the inadequacies of the desktop on the web.    There were few people comparing last week's announcement to Adobe's Apollo — Apollo is setup to be a more traditional, extensible platform.  One of the companies I am working with — im in like with you — is developing much of its service in Apollo.   Apollo is truly a web application environment — offering state management outside of the browser, for example Apollo will let me do my web mail while I am unconnected.  But Adobe is building this as a platform service, like Flash the intent is to proliferate the tool set across the web, developers will adopt it as will end users and like Flash it will provide revenue from scaled developers paying Adobe a license fee.   This is a platform business model that the market understands.   A cross platform run time isnt as sexy sounding at F8, but it might be more meaningful.  And then there is Firefox 3 — another valid comparison that didnt seem to come up in many discussions.   

3. How will application providers be promoted in Facebook?   This is critical to understanding the underlying business terms between the distributor and the application creator.   Last weeks announcement was about distribution, and it formalized an approach for Facebook partners, business development in a box, a highly scalable approach to partnering.     But what are the underlying economic drivers?     At AOL promotion and positioning was usually governed by dollars spent.    At Google it now seems to be about long term strategic value: years ago the Google services that were tiled above search results – were best in class – for finance related searches (search for a stock ticker), Yahoo finance was promoted, Mapquest was the default when you searched for a location.   Then slowly over time Google services received prominence equal or better to others.   Today its pretty much all Google services upfront, in default positions — nice to leave some pointers for competitors but as Google knows well defaults drive traffic and traffic drives revenue.  

Screenshot of Facebook's application directory

Last week the COO at Facebook, Owen Van Natta, said:  "How are we promising not to trump your application? We're going to level the playing field, developers won't be second-class citizens–we're going to compete directly with them."   Accordingly, the Facebook application directory is organized today mostly by popularity — but mostly is different to always. 

See the ringed sections of the screenshot — unlike third parties Facebook applications don't list the number of users of its applications (Marketplace is a Facebook application).    And note the that Application directory (boxed) starts with Facebook's top Applications.    Finally, as the users expands and contracts the application list (the more carat, where the arrow is pointing) Facebook's one advertisement on the page moves down, partially below the fold.  Tell me this execution isn't setup to collide with business priorities.

In Japan, on the cell phone, Do Co Mo understood that with a limited UI placement of third party services needed to be ranked by usage.   Is Facebook headed down the same path — and what does the COO really mean?? — Facebook owns this garden, competing directly with application providers is going to be, interesting.

4. How will Facebook manage identity and data across third party applications?   Some sites promoted in F8 seem to be managing identity independent from Facebook, others are doing a one click install and sign in (but even in the case of Mosoto, you are signed in for chat but to file share you need to sign in again?).    Does Facebook become a alternative identity broker on the web and if so they are going to have to a lot more open in their approach to data — open ID is a pretty high standard.      Facebook has traditionally had a fairly rough privacy policy — they gather a lot of data about their users and there has been a fair amount of controversy about it.    As they manage data across applications this is only going to get more challenging. 

5. Lastly, how does Zuckerberg social graph extend beyond the core college audience / behavior?   The feed feature added a whole new dimension to Facebook and extended the time people were spending on the site significantly, Comscore data suggests it went up by over 5 mins per day.   Fotolog has a similar, feature that alerts users to new uploads by friends — its a significant driver of our navigational based traffic.   But how does the audience and the use cases evolve beyond the core?   Will people outside of college enter in real names into profiles and will the social dynamics of the broader audience fit with the services that were built for the student based audience?   Over the past year I have started to use LinkedIn more — its starting to become useful, the network is large enough, the alerts I get from LinkedIn are useful — not spam.  I signed up for Facebook shortly after they opened up — but I didn't go back, till friends started inviting me.   Over the past 6 months I have visited the sites to confirm friends but there is nothing useful about Facebook as yet, and useful aside it better be either personal or entertaining — but like so many other social networks its about collecting connections, but whats are the services that are going to drive usage for me — I don't see it yet.   

This is a quote from Giga Om's review post the launch event, its worth a slow read.   "Zuckerberg says you can serve ads on your app pages and keep all the revenue, sell them yourselves or use a network, and process transactions within the site, keeping all the revenue without diverting users off Facebook. This was the opposite to what was stated in the WSJ article earlier this week, and gets by far the biggest reaction from the crowd."  

This got the biggest reaction from the crowd??  Maybe a crowd packed with Web 2.0 service and feature developers who are in need of an audience found it it interesting.    If a user today opt's in to use your site on Firefox — or your application on windows — or even within the grandfather of walled garden's AOL — you still get to keep the ad-revenue.  So why is this a big surprise?  Maybe the attention the announcement garnered is also about the proliferation of web based features searching for a destination to marry themselves to.

Intent and that Telegraph Road

A long time ago came a man on a track
Walking thirty miles with a pack on his back
And he put down his load where he thought it was the best
Made a home in the wilderness

I do think its worth do ask whats the intent behind the Facebook announcement, who is meant to serve and whats the need behind the F8 initiative?    The Facebook was launched as a service for US college students.   It was full of social tools, it let you build out your own network, post events, notes, photos and most importantly its all private, so that students can develop a profile that is real vs. many of the fantasy based profiling you see on Myspace and other sites.   Facebook achieved a lot of its early traction for the same reason as Cyworld did– you could enter your College, your year and actually find friends, colleagues, friends to be, cruches etc.  Because people used real names on the service — emails were verified by domain and you could find anyone in your university.   This was and is a big idea — few sites have a relationship based with their users that maps to real identities.     Anyone who has attended a US university or college knows exactly what this is about. Then came the monetization.  

Facebook started with advertising, they achieved some remarkable successes by mid 2005 they became profitable, they had 2,000+ colleges and 20,000+ high schools on the service.   And the audience was rabidly engaged — 2/3rd's of the active membership came to the site everyday.     But look at Facebook's reach through 2006 — it is flat, because by 2006 they had tapped into an audience and grown the business about as far as it could go given its natural limitations: students.    Reach tracked by AlexaThey were now faced with the question of how to scale your business beyond its base.   They could go global — there are services like FriendsReunited in the UK and Australia who are demonstrating, albeit with differences , that the market exists outside of the US for a Facebook like service.    And /or they could opt to extend the scope of the Facebook offering and try to reach a broader audience in the US beyond students.   They decided to push on both fronts but most significantly in September last year Facebook opened up to users irrespective of whether they were in school or not.   In 2007 Facebook's reach more than tripled.  Before they opened up the doors to the broader audience they were adding 15,000 members a day, today they are adding 100,000 a day (NYT stat, note Fortune says 150,000 a day).  They now have 24M active users, posting mostly Photos, notes and events.

Then came the churches then came the schools
Then came the lawyers then came the rules
Then came the trains and the trucks with their loads
And the dirty old track was the telegraph road

But now reach has extended they need to find ways to get people to spend more time on the site.  Here comes the platform initiative.  The platform that was released last week is about extending Facebook in a different manner to the other social networking sites.  Its about continuing to extend Facebook features by offering distribution of third party applications on Facebook.  Yet the features been added are contained within the Facebook experience.   Out the gate its a great opportunity for fledgling sites, particularly sites that are more of a feature than a destination — Facebook is offering one click installs for applications within Facebook. Its about distribution and its about continuing to drive the amount of time people are spending on the site, which in turns drives advertising.  Facebook is playing the same game as media aggregators have played since the dawn of time.    Whether its Disney, Yahoo or AOL — its all about getting in front of the distribution firehose — they are selling their audience.   Day 1 its not setup as a sale.   Remember that AOL used to pay service providers to offer content and services within the walled garden — then in 1996 when AOL hit a scale it stopped paying providers and started charging — bit by bit AOL flipped the model.  This all seems far less interesting and ambitious than the headlines suggest.   Zuckerberg told Kirkpatrick that what Facebook is unveiling would be "the most powerful distribution mechanism that's been created in a generation."  I hope its is more than that.     If Facebook's F8 is about trying to extend the size and scale of innovation and services in what amounts to another a walled garden experience it will another building block in the long history of web hype.  The Facebook has a great social platform to build off, I hope they are brave enough to let their users take their data and extend services beyond their control, beyond the walled garden.  

A last point worth making is the absence of Microsoft, Yahoo, Ebay and AOL in the platform / social networking space.     Live.com was meant to be a web development platform — but things hewed back to Windows with the launch of Vista.  Microsoft developed much of the thinking behind the web as a platform — with hailstorm and then live.com — but IE7 and Live haven't taken the lead.   Yahoo made all these great acquisitions, many of which they they have left in silos and failed to build upon.    Ebay has this amazing social / trust network that links merchants and end users.    We think of profiles as been specific to social net, but Ebays profiles as they relate to trust and commerce and communications (skype) are a trove of data that could be opened up to users, applications and the web as a whole.  And the merchant relationships, what about extending them into advertising.     Like wise with AOL — there was a recent comment about the importance of opening up AIM, again…     Its amazing to see the leaders of earlier generations of the web MIA — gone from this social networking race.

The semantic web needs to be distributed at its core, another walled garden is too low a bar for a really powerful and interesting social network to aim for.  I hope Facebook actually step beyond the marketing hype and deliver a social platform for the web.

Happy birthday Fotolog

Today is Fotolog's 5th birthday — a few words, and some images to mark the day.   It has been an amazing five years for Fotolog.  The history of the site is fairly straightforward.    Fotolog was started in mid '02 by Scott Heiferman.   Adam Seifer came on board soon after and took over the project and Scott focussed on building Meetup.   

The vision of the service was to cater to new picture taking behavior — as people were starting to adopt digital cameras the use cases around the capture and processing of images was also evolving.  Pictures have always been social – but the digital world was giving images a whole new social dimension.  Fotolog was created as a social media network — the genesis was Photo Blogging, the result was a mixture of social networking and user created media sharing.   This is what Scott's original Flog looked like:     

First Cyper Picture

The layout of Fotolog, was and is intentionally simple.     Fotolog has resisted the temptation to add feature after feature — rather it has stuck to offering a handful of features, similar to Craig's list the focus has been on the content and the conversations.    From the early days Scott and Adam had the vision that the pages on Fotolog needed to be social.    They needed to include not only your images, but also images from across the network, providing a visual navigation that today drives much of the time our members spend on the site, a self formed, organic distribution system, letting members see and be seen.    Complementing this social network of images they added comments and guest book entries — making the experience one where media intersects with communications, day in day out, millions of images collide with billions of conversations.     The growth of Fotolog has been steady and consistent — but it took 2 years to gather real steam — as the chart below illustrates.   In early 2005 we hit a million members — amazing to consider, since we are now adding close to a million a month.  

Milestones Flog

The phenomena started in Brazil.   Adam will tell you that in those early days he was concerned that Fotolog might get stuck in Brazil, Portuguese isn't a global language.   But Brazilian's have turned out to be a strong early indicator of global internet phenomenas — from ICQ to Hotmail to Okrut to Fotolog, Brazilians seem to have a knack for early adoption of global social platforms.  The Fotolog audience started skipping geographies and borders and today we sign up members from approximately 70 different countries everyday.    Our audience is still very large in South and Central America and we have complemented that base with strong European growth.   The primary language of Fotolog is images, beyond that the chatter around the site includes and mixes many different languages.  

This is what the home page looked like when we hit a million members.   Its not that different to what the home page looks like today — again, simplicity and consistency has mattered to the history of Fotolog.  

 1MM Flog'ers

Out of interest I checked how many of the 15 members with images above were still active on Fotolog.    A quick check of member names and recent posts indicated that nine of them have updated Flogs in the past six months.    Four of them have updated their Flog in the past 3 weeks — juju15 , lepadilha, tabata, mash — its amazing that after years members are still coming back and using Fotolog to share their world 

Yesterday we had 673,150 uploads to the site — with our regime of one photo a day and 8.3M member accounts that means that yesterday a little over 8% of the people who have ever signed up to the site, uploaded a photo to Fotolog.    That doesnt included all the members who just visited friends Flogs — but to have 8 percent of your membership coming back everyday is pretty engaging and pretty amazing.   Fotolog also hit #18 on Alexa earlier this week — our highest ranking ever.   The traffic on the site continues to surge — our reach continues to grow (see a ranking vs. facebook), and for people who want to relate us to other US photo sites (which I always say is a poor comparison, given that Fotolog is about self publishing and socializing and photo's just happen to be the medium, they aren't the end), see the relative traffic rankings over the past three years, vs. other photo sites, Photobucket is picking up share, Flickr seems to be flatlining, and Shutterfly is still a seasonal processing site.     Fotolog is a testament to the creativity the internet has unleashed — millions of people sharing moments of their lives through images and conversations.  

A thank you from the team in NY to all of the people and all of our members who have made this global collage of conversations possible.  

And read Adam's Birthday post here .    

The Photobucket Sale and Fotolog

In the wake of Photobucket's sale last week to News Corp., people have asked me two questions: 

(i) How is Fotolog different from Photobucket?
(ii) Why did News Corp. buy photobucket? 

With the week now over, let me take a pass at answering both questions.  

How is Fotolog different from Photobucket?  

Photobucket and Fotolog are both built around media (photos and videos) and they are both related to social networking.  And they are both experiencing rapid growth.    But that’s where the similarity ends. Photobucket is a tool that is agnostic of destination – while Fotolog is a destination. Photobucket stores image-based media, then distributes it to your page on social networking sites such as Myspace, Bebo, Piczo, Friendster, etc. Fotolog is a destination where you post one image a day which then becomes the center of a social interaction/chat with your friends.  It’s intentionally simple – stripped down and focused on the social media experience. 

The Photobucket acquisition affirms the importance of user-generated content of any media type — images, video, etc. — and media's emerging relationship with social networking. I often call Fotolog a social media site because it's all about the intersection of media and communications, two things which were once like oil and water — they traveled on separate pipes and represented distinct experiences. But they are now coming together in fascinating ways. It's early days, but I believe that the combination of media and communications — gifting, sharing and transferring social capital, between users/members, via user-generated content or digital assets that represent identity — is a more than a trend. 

The first generation of social-networking sites stressed self-publishing over connections (from Geocities, to Tripod to Blogger).  The next generation focused mostly on connections (sixdegrees, and friendster are the classic examples here — tools to gather friends and connections, as social capital accrues in theory to the people with the most connections). The third and current generation of sites blends media with connections — each with a different emphasis. 

Focusing in on Photobucket and Fotolog — the difference between the two is clear when you look at traffic and usage data. Both sites are on a tear. Alexa (link #1 below) ranks Fotolog as 24th largest in the world — Photobucket is 44th . As CEO of Fotolog, I'm obviously privy to more data, but focussing on proportionate growth — the Alexa link shows rapid growth for both sites. Comscore measures Photobucket with 28M uniques and us with 13M. Comscore is panel-based, and at Fotolog we are working with some other data shops to confirm this data.  We recently starting dropping Quantcast pixels on our site and they track us at 26M uniques — data sources aside, the point here is that both sites are large and growing fast. 

Site usage patterns tell a different story. See the table below with Comscore data from March — the average minutes per day is hightlighted. Photobucket averages 7 minutes per day while Fotolog averages 23 minutes per day. Fotolog does 261M total visits, compared to 90M for Photobucket. Media-wise Photobucket has 2.5BN photos, Fotolog has about 1/10th that number at 230M – but in order to maximize user response, Fotololg only permits one up load per day.  Photobucket also offers video, which Fotolog is targeting for the future. Socially, the sites couldn’t be more different, given Fotolog’s status as a destination with an emphasis on conversations.  Our site has more than 2BN conversations posted, approximately 10 per image. 

Data table

In terms of user profile, Photobucket and Fotolog are both very international. Alexa tracks 29% of Photobucket's audience as US-based (Myspace-related) with a further 5% in the UK (Bebo) and the remainder apparently pretty evenly spread worldwide. I do wonder how accurate this data is — as approx 60% of Photobuckets traffic is tethered to Myspace which in turn is mostly US traffic. I know in Fotolog's case the Alexa geographical ratings are different to our Google analytic ratings. Last month a fifth of our traffic was in Southern Europe (Spain, Italy, Germany), which doesn’t come across clearly on Alexa. Fotolog has members signing up every day from 70 different countries, with the bulk of our audience in South/Central America (where the viral growth first took off) and Europe. The site is growing in some European countries, month over month, at a blistering 28%. Numbers like that compound fast. And the growth is 100% organic, with no marketing or member incentives. 

So why did Newscorp buy Photobucket?

The first reason that is much cited for the transaction is defensive — News Corp. / Myspace bought Photobucket to make sure no one else bought them. News Corp. understands that the media on its social network is vital to the experience, and having a third party manage the bulk of the media on MySpace was a risk. This concern can only have been exacerbated with the rise of YouTube and its purchase by Google.   Moreover, Photobucket's push into video must be attractive for News Corp. as a foil for its competition with YouTube – it’s no coincidence that since that deal, Myspace has been so aggressively promoting its videos on its homepage and elsewhere. So media matters — but this is more than media or UGC – It’s also the most common form of digital personalization.   Taking photos out of their analog construct, they are a very simple form of digital customization, it’s far easier to take a picture of something than to render some customization in photoshop. On Fotolog we have tens of thousands of pictures of people's computer screens while gaming, or desktops, or pictures of people sneekers – Fotolog members have posted over 60,000 pictures of Converse / Chuck Tailor's — or custom images.  In other words, this is about personalization, and the camera or a "picture" is just a tool.  

Beyond this strategy my guess there is a broader opportunity — Photobucket is a photo and video tool that could become a web-wide locker for the storage of digital media. Just as eBay's acquisition of Pay Pal wasn't meant to just serve just eBay, my guess is that NewsCorp’s purchase of Photobucket isn’t just meant to serve MySpace.  The opportunity is to serve the web, I suspect that’s the broad strategy.   Granted, there are risks to a broader strategy — eBay didn't effectively execute and while Pay Pal has recently picked up share the first few years after that acquisition amounted to treading water at best.    The fact that Google is now driving into the payments business is a testament to that failure — eBay had the running room to be the web payments platform.   There is also an audience risk — Photobucket users might not pick it as a the service of choice for other media types, the audience may move on and News Corp. could be faced with a whole new dominant parasite on its host in 18 months.    Given all of this the deal once again distinguishes News Corp. as one of the media companies in the world driving headlong into building digital media assets that are indigenous, not extensions of existing franchises.

Lastly, people wonder what the Photobucket deal means in terms of valuation and monetization of social media sites. On this front, the acquisition is good news for Fotolog and our peers. In contrast to You Tube, Photobucket demonstrated that UGC could be effectively monetized, a path that we are following at Fotolog.   The market has valued highly a popular tool that facilitates social media networking communities.   That only reflects well on both the segment and both the destinations and tools associated with it.   

nanking

I went to see Ted Leonsis’s film Nanking this week. It is a hard movie to write about, let alone see. The film documents the rape of Nanking, an event that I thought was named as a metaphor for a city that was pillaged. Pillaged it was but the people were also indiscriminately raped. It’s an awful, gut wrenching documentary of human nature and war. It is also a story of eight or so people who managed to save hundreds of thousands of lives — but there is little to no glorification of their roles, its told upfront, in your face, the words are taken directly from the diaries of survivors. Disasters of this kind are usually told from a distant, sanitized, and historical perspective. This movie does none of the above — similar to Spielberg’s Shoah documentary. Amazingly one of the people who saved so many was the head of Siemens — a Nazi. I also didn’t realize the dates of the massacre — this was 1937/38 — a full year before the start of WW2. Seemingly we leant nothing, would things have turned out differently if this history had been documented and telegraphed around the world?

A few people asked me — should I see it? I think its a personal decision that warrants a few minutes of thought. We are at war today and almost everything we see if filtered through the sanitized lens of our media — this film is about war and the depths of human depravity, its not nice and the loose ends aren’t tied up in a way that gives you any closure. The bravery of a few people is a small measure compared to the depth of evil that is documented. I never understood the degree of attention that rested on Koizumi’s decision to visit the Tokyo War Shrine. I now understand what an historical affront that was.

Finally, documenting the tools of war propaganda — so literally — was something I had never seen before. It’s clear why this history was never clearly documented or told in Japanese history books. Why the soldiers wanted the westerners out of the city before the military arrived. Seeing clips of Japanese journalist filming children getting candy from soldiers as the people of Nanking were been “liberated” — while nothing could have been closer to the truth. Even if you insist on discussing the many subjective truths that make up history — there needs to be some averaging, and history here has been seemingly devoid of any perspective. Nanking is a reminder to chew carefully before consuming any news media today. For that reason alone I think its worth seeing the film.

Hybrid waste

I am trying out the Canon TX1 hybrid cam. I am a big fan of hybrids — for the past couple of years I have used the Sony DSC M1 hybrid. This Canon promises a lot and thus far seems to deliver fairly well. The Camera is very stripped down and easy to use — but the ergonomics aren’t as good as the Sony, harder to hold and shoot with one hand. Stills are 7.1 pixels and other than the flash (which is weak) the stills are good. The face identification software does a really good job of finding faces — less clear whether the adjustments it does once it has found faces is worth much, but that strange allure of technology recognizing a human feature is enough to make one think it must be have some value.

Video is just weird. Canon promote this as an HD hybrid and sure enough the video is 720p, 16:9, 30fps. But it records in M-JPEG (Motion JPEG – basically a string of jpeg images?!). Hugely inefficient at encoding, gives you approx. 13mins of video on a 4 gig card? There is the advantage that you can pull a still from the video stream, which is kinda interesting if you want to wade through a gazzillon frames for the 1/30th of a precious second. But why M-JPEG, Divx or MPEG4? I suspect they wanted to (a) save on licensing fee’s — and (b) make sure the camera wasnt too good at doing video. The tension that hybrids have for Camera manufactures persist — if its too good then people wont need to buy two devices. But the choice is an interesting testament to how the plunging cost of storage continues to radically effect technology standards.

Web 2.0 firms face unusual problem: too many customers

I wrote the following as a response to “Web 2.0 firms face unusual problem: too many customers a confusing article in the Mercury News (amusingly, since publication, the title changed to “Web 2.0’s global traffic dilemma”)

To the editor:

Try this for a headline: “San Jose Mercury-News faces unusual problem: too many readers.” You’re not likely to see it. The notion in your March 8 article, “Web 2.0 firms face unusual problem: too many customers,” is equally preposterous to anyone who understands the dynamics of media let alone social networks, where the addition of an member is even more valuable to the network. Not to mention the growing value of international audiences. The web, is becoming an increasingly international phenemena, as the US market matures and companies seek new audiences — that pesky other W is coming into focus.

My company, Fotolog is a very international web site — with 90% of our traffic outside of the US, we are the 29th largest site online. We are the third largest social network in the world, ahead of Facebook, behind Orkut and Myspace. Like Orkut our extraordinary growth started in Brazil but it then grew through all the other major South American countries to Europe. People in the US sometimes ask me whether Flog is really a social network. The experience on Fotolog is social, the media people discuss are photos — but if you consider that against each of the 200 million photos on the site there is on average 10 posts, you can see how social the site is. If you want to measure us as a photo site, today we’re larger than photo sites like Shutterfly and Ofoto with almost 10 times the page views of Flickr. But more important to me is our extraordinary level of engagement – nearly 20 percent of our members visit the site every day, spending approx 24 minutes a day with us — thats the social bit again. How did this happen? Is it the viral nature of the site, its stripped down wikipedia like simplicity of the site, or the fact that images, the media type that drive the conversations on Fotolog are undestandable to a global audience. The answer is not clear, but the service has become a global phenomena and the exchange of social capital across the network is clearly a key driver of our viral growth. Each active member brings non-linear value to the network, from wherever they come.

Beyond its misconception of individual member value, the article was also off in dismissing the international audience. A glance at the headlines – MySpace’s international expansion, Google’s deal this past week with Friendster, the number of European cross-border acquisitions – all underscore how web companies are looking beyond our borders to find new audiences — as U.S. Internet user growth matures and foreign advertising markets develop rapidly. 2% yoy growth is what comscore recently tracked US growth to be. Okrut may be big in Brazil, but even in young geographies like Brazil, market data again contradict the articles assertion that “there are still no mechanisms for making money (online) in Brazil.” According to Zenith/Optimedia, Brazil’s Internet advertising spend will exceed $124 million this year this represents a growing share of a total (local) advertising market of over $7 billion. No mechanisms?, a little bit of data usually helps ground broad brush statements.

Fotolog’s place as one of a small number of social networks able to continually build audience across multiple geographies gives us a head start in the race for these rising global advertising revenues. Our international reach has boosted us into the top 30 in Alexa’s global rankings and top 20 in many countries as our audience has spread from the U.S. to Latin America to Europe. As the web becomes an increasingly global phenema its important for the US to continue to look outward and lead in that development. Google clearly views Orkut, as it views many of its business lines, through a long term lens. But even if they didnt, the assertion in the article that Google wouldnt keep Okrut betrays a lack of understanding of the economics behind these businesses. The operating leverage that I see in my business — one where a small amount of capital and less than 25 people have built a top 30 web site is extraordinary. Orkut is likely made up of Orkut and a few other people. Newspapers for one — would die for that kind of operating leverage.

Lastly, the article manages to blur a critical area of national competitiveness — as the web becomes increasingly international its important for us to look beyond our borders for innovation as well as audience growth. Our friends in “old europe” are buying for less than $30, 20 mpbs broadband connections with telephony and video thrown in for free. The proliferation of thick broadband pipes is driving innovation in places the US would typically lead. In the past quarter two of the video offerings to gain the most attention — Joost and Babbelgum are both coming out of “old europe”. The rest of the world is becoming more than just another audience, its also another platform for innovation.

It’s a big world out there and Silicon Valley is at its best when its looking outward for opportunity and change, not inward.

Sincerely,

John Borthwick

CEO

Fotolog

(turns out they only accept letters of 150 words or so, so the press team cut this down to size)

Resolution, from Thomas the tank engine to the Wii

Thomas that tank engine

I was thinking about how the resolution of an experience changes the experience.    Thoughts began while playing with my children.   My son loves to play with trains, small Thomas trains, small tracks you piece together and trains you push around.   For Christmas my brother asked me what my son would like and I thought that a battery powered train (see right picture) would be a hit.    It was but it also changed the way my children play with the trains.   With the battery powered train the focus became setting up the tracks in some form of circular shape and then watch them go round and round.    Play with the push trains had been much more imaginative, it was about setting up the tracks, creating narratives and pushing the trains around, speaking the narratives out loud.   Thomas the electric tank engine stopped most of that.    It was now about just watching him (the train that is) chug round and round the track, usually pulling cars, sometimes on his own.   Less creative, less social, less physical, and shorter time wise.   I was thinking how does the resolution of media and experience effect the experience of the media and play associated with it.   

It seems that like with comics if media or the experience isnt too polished, too finished, it leaves plenty of room for the human mind to fill in the gaps and engage in the experience vs. observe the experience.   This reminded me of a great interview with Brian Eno where he talked about the importance of leaving media and cultural products open and "unfinshed" (from 1995, I found the orgnial and posted it to findin.gs DB).  But it also seems like engaging kinesthetically with the play transforms it — as my wife said when i asked her why the play was different with the trains you have to push she said because they "have to be the motion" not observe it.        

The Wii, is unfinished, resolution is low, characters (in sports for example) are comic like and the physical engagement in the experience manages to trick the human mind, at least mine, that the experience is pretty much "real".   Its amazing what a little bit of sound and a slight vibration in the remote does — its sophisticated enough to telling my brain that the experienceis so close to tennis or boxing that its real.  Its interesting to think about how these somewhat rough, unfinished experiences are open enough to let one become fully immersed.    Like WOW vs. Second Life.   The environment is unfinished and pretty rough — but the experience is one of total immersion.    And medieval narratives are such a dominant underpinning in our culture that the moment you engage in WOW you have a narrative to engage with.   Second Life seems more polished, and it doesn't have a narrative overlay, much of it is about events and engaging people in living a "second life".      Now its time to get back to my weekend and leave this post, well — unfinished.

Jim Gray Missing / Amazon Mechanical Turk

Great example of what the turk can do — distributed application to search for a missing person on satellite images, takes 5 mins of time to sign in and search five images / details below: 

Amazon Mechanical Turk Jim Gray Missing: Help find him by searching satellite imagery Jim Gray Background On Sunday, January 28th, 2007, Jim Gray, a renowned computer scientist was reported missing at sea. As of Thursday, Feb. 1st, the US Coast Guard has called off the search, having found no trace of the boat or any of its emergency equipment. Follow the story here. Through the generous efforts of his friends, family, various communities and agencies, detailed satellite imagery has been made available for his last known whereabouts.

Choice, end to end control, distributed innovation and that iphone thing

A lot of chatter about the iphone — just read Dave Winer's piece — lots of conspiracy theories about how real the Job's demo was and people are starting to focus on the question of how closed the platform is.  Jobs has said that the platform will allow third party development but it will be "restricted" and managed — like ipod games.  Apple believes that in order to get a product into market — out of the box — end to end control of the hardware and software experience is the easiest and fastest way to deliver something that works to users.   This worked in the case of the ipod — it wasnt the first MP3 player to hit the market, it was just the first to work as seamlessly as it did, from the device to the pc.   There are smart phones of many flavors out there today — but they all require a lot of setup, maintenance etc.  The iphone is clearly going to be different — take a look at the Pogue's list of what is does and doesnt do.    

Last year I lived in Italy for six months and I made some notes about what an insanely mobile the country was — 57M people with 70M cell phones.   There are more mobile phones here than fixed lines, estimates are that 18% of the population have cut the cord (chk). Kids and couples walk around listening to cell phones playing music, like 30 years ago people would walk around listening to a radio.    Someone we know was chatted up by a waiter at a restaurant — for follow up, he offered her a SIM chip instead of offering his phone number.   SMS is everywhere and its far more conversational than in the US. The rates and pricing plans push people to SMS.    Wifi is fairly available and the cell co's are clearly nervous about voip / skype – 3 (Hutchison Whampoa) has an offer in market for $15 a month unlimited voip calling to over 25 countries from your handset.    And in Italy Apple has next to no presence (as of 06 they had no stores and next to no market share).  In Italy Apple has next to no presence (as of 06 they had no stores and next to no market share).

Over time the iPod functionality needs to merge into the phone.     Yet Apple has created a business model that is based on tethering hardware to software and reaping all of the margins on the hardware.    The result is that music that I have "bought" on iTunes isn't transportable to other non apple devices.   I really haven't bought it, its a rental agreement – with the a right to listen to that music on 5 apple pc's / devices.  Jobs knows that the ipod is close to its peak and its time to move the ball — the question in my mind is whether open and unlocked alternatives — palm, symbian, rim and even linux phones can out run Apple. 

The pressure points are in my mind (a) apple's dependency on the ipod and its related business mode — the iphone needs to have everything the high end ipod has (focus will be on music, video and phone — watch how they execute on core ipod features (eg: access to itunes store from the device (which today is not available), music and video sharing (also not available)) and then non ipod functionality.    The phone is a messaging device, music and ipod functionality needs to balanced against great messaging capabilities — voice and text (Phones outside of the US are used more for messaging that voice — calling them phones is a cultural artifact — they are messaging devices with voice as a secondary features)   (b) apple's tie to cingular (2 years), and the associated restrictions this brings with it (re: no voip, open wifi roaming, no HSDPA/3g, requirement for a 2 year contract, no unlocked alternative etc.)  (c) the tension between a closed end to end platform with controlled innovation vs. an open platform with distributed innovation and lastly (d) the execution of the hardware / device and the lack of a keyboard.  If this is mostly a media device Apple will miss the broader market. 

I have no doubt people will buy this product — it seems like a beautiful piece of hardware and simply postioned as the highest end ipod it will find a market —  just like the nano or video ipod.  But neither the nano or the video ipod defined a new category — they were devices in a long stream of innovation that started with the orginal ipod.   The iphone needs to define a whole new stream of innovation independent from the ipod.  And the business model will likely also have to evolve — in more developed markets (south korea the flip has occurred to a subsription model, $5 a month for all the music you want / can eat).     I am going to be watching the pressure points listed above to see whether similar to the ps3 vs. Wii the lowend offer some real alternatives, without all the restrictions that Apple's business model now imposes on it as the category leader – the mobile world needs to see some real innovation and what I saw last week suggests that not going to come from Apple. 

Things to watch in 2007

7 4 07
(things to watch in 07)

1. Google will feel the tension between search and browse and their associated business models. Google quick check-out will emerge as the companies key innovation beyond search and paid listings. Yahoo and Ebay will follow AOL and be rolled into the operating theatre — the problem isnt technology (panama etc.) its the business model tradeoff’s they have both made re: the tail.

2. Sector wise e-commerce will rise in importance as alternative currencies emerge as legitimate ways to transact. Its a different take on the subscription model but using ingame currencies to transact for other products (see qq coin). On the subject of virtual worlds, growth will continue at a pace, but second life will emerge as the one everyone could understand but few actually wanted to visit more than once.

3. Geographically, the rest of the world will come into focus as internet and media companies search for customers and growth and innovation. ROW will start to be a legitimate force of innovation rather than just a platform to duplicate US business models.

4. Connectivity wise, wireless broadband will finally become a force to be contend with

5. Policy wise: the Net Neutrality debate will recede as it becomes evident that while network providers need to have the ability to ability to manage bits, those who think they can manage or shape the transport layer to the bias one application or service over another will be proven wrong. The influence and relative progress of the ROW will help here. And while the focus is on policy — the internet policy debate will switch to US broadband adoption and relative speed/price of offerings in US vs. ROW.

6. In terms of protocols and the evolution of the web — web 2.0 given that it has moved from a useful definition to a undefined meme will recede in importance and the semantic web will begin to take shape, standards, api’s will be extended to form the basis for the next iteration of the internet

7. Hardware and device wise, Vista’s influence will be mostly in the enterprise, the Ipod starts looking tired, the Itv box becomes a big deal. Leopard will be a bigger deal than most expect. Xbox 360 will get squeezed from the bottom (Wiiiii!), PS3 will make its numbers, the product is pretty good, not as much fun as Wii but nonetheless good. And Linux phones should be on your radar, they are on mine.