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The Second (Dot)Coming
…but this time the buzzwords are ‘social’ and 'media’. In scenes reminiscent of oooh… 1997 investors and high profile folk all over the place are launching new sites and investing in old ones. The latest? One-to-watch (literally) – video search engine Blinkx.
The Independent reports today that shares in Blinkx surged 40 per cent after the company’s market debut as investors clamoured to invest in the world’s largest internet video search provider.
Blinkx has been spun out of Autonomy, the contextual internet search specialist that has retained a 10 per cent stake in the business. While Autonomy has often struggled to explain the significance and potential of its complex technology to befuddled investors, it appears that the rapid success of internet video companies such as YouTube has underlined the growth prospects of Blinkx.
In scenes reminiscent of the dotcom boom that characterised the markets in the early part of this decade, Blinkx shares surged 40 per cent to 63p on the first day of trading on the AIM market. The initial listing price of 45p a share was already at the top end of the pricing range and the IPO was strongly oversubscribed. Blinkx ended the day with a market capitalisation of £175m.
Blinkx offers more than 13 million hours of indexed video content, making it the largest video search engine in the world. Mr Chandratillake said the company’s technology provides “the critical link” between the consumer and the fragmented online content industry. It processed 1.1 million searches last month alone.
The company has raised £25m that will be used predominantly to bulk up its sales and development staff. Mr Chandratillake said the company was looking to launch a broadband-based television service. He added that the company was also looking to develop an advertising platform.
It remains to be seen if any of these platforms will really make money. How oddly familiar …
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“Steal This Site” (Terms and Conditions Apply)
As reported over at TechCrunch, new-on-the-block categorizer Vast has summed the appeal of a great dataset and a flexible API into three little words: Steal This Site.
It’s an irresistable offer! Until you think it through:
- Steal, as in: use all our data, innovate. Do your thing, but make sure we get a namecheck. Come play with our toys, but it’s our game and our rules. [Abbie Hoffman must be spinning in his grave.]
- This Site, as in: we’re cornering the market. Everyone will be part of our ecosystem, just like Google.
Web 2.0 runs on the fuel of community-driven content, but the engines that grind value from that content are as centralised as ever. As Bruce Sterling put it recently in a well-worth-reading speech, paraphrasing Alan Liu (of The Laws of Cool fame:
[…] in the guise of empowering users through all this participatory fooforaw, Web 2.0 is actually a ploy to return the Internet’s technical power to the specialized geek clique that originally built Web 1.0. They stole our revolution, now we’re stealing it back. And selling it to Yahoo.
Don’t get us wrong – Vast looks cool. Very cool. But there’s no such thing as a free lunch. You’re not stealing their site. You’re spreading their meme, helping them corner their market, expanding their media surface. Bigging up their value for the inevitable IPO or selloff. And good for them: this is what late capitalism looks like, and damned if we aren’t part of it. But hey – we like a good old fashioned backlash as much as anyone.
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How Dotcom 2.0 Went Hyperbolic and Flattened Old Media…
After a lot of reflection, we think we’ve seen the light: Dotcom 2.0 is using the exponential growth of networks, and the enthusiasm of consumers to make their own content using their tools – in each instance of which there’s a little of their ‘media DNA’ – to create a 'Springtime for New Media’ which will eclipse anything seen before.
Get the skinny over at our sister site, Cluster.
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Don’t Sell It, Spread It
It’s not even yet Spring, and dotcom fever has beaten avian flu to become the first pandemic of the year. Those infected are either dusting off their elevator pitches from 1999 and getting their Aeron chairs out of hock, or profoundly suspicious that it’s all a false alarm: that the slow boom is about to turn to another decisive bust. Google is the poster child of Dotcom 2.0, but recently lost a (meaningless) $15.3b of share value in a single day. What does it all mean?
As we’ve said before: we think, this time around, that what will sort the winners from the losers, the dotgones from the dotgonnas, is the degree to which the hopeful new startups, all beamingly optimistic and wifi-ready, realise one simple truth: Dotcom 2.0 isn’t about selling stuff over the web.
It’s about creating and giving away tools through which consumers themselves can create: new media, new businesses, new ways of being. And then using those innovations – the user-created ones – in turn as fresh media channels through which to spread content, marketing messages, other tools which in themselves create more opportunities for innovation – a self-feeding networked ecosystem, Gaia for the Internet, in which there’s opportunity aplenty for everyone with an idea or something to say.
That’s the dream. The reality? Compare and contrast, for example, Kodak’s latest attempt to get with the wired generation (oh, and survive as a brand): a subscription-based photoblogging system – which has been roundly dissed from all sides – with the storming success of Flickr. Sometimes dreams come true.
This isn’t the old ‘give away the razor and charge for the blades’ business model. It’s about genuinely giving away the best technology available, and then making it even more useful by allowing others to hack it, expand it, use it for their own purposes – retaining just enough control over the resulting creations that there’s still ad-sales, profiling or some other revenue stream built-in to the DNA [or technically, the EULA and API] of whatever the community makes with it downstream. Look at Skype. Look at Google. Look at eBay. They’re not flogging a product – they’re blazing a trail. Dotcom 2.0 is all about accelerating its own evolution, and empowering consumers – even people simply uploading and tagging their holiday snaps – to work as hackers who are adding value, information and with every action pushing the whole thing forward. Dotcom 2.1? Ready for demo this afternoon. 2.2.1? Here Monday. We’re all part of it.
With the above in mind, we offer you in closing the venture capitalist David Hornick’s recent anecdote Company Building For Eight Year Olds (via Gawker), in which an attempt to explain to his son 'what daddy does at the office’ turns into an object lesson of how the Dotcom 2.0 ecosystem works to enable (even small) people to make their mark on the world. To horribly paraphrase Frank-N-Furter, Don’t Sell It, Spread It.
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Dotcom 2.0: Magicians of Media
How long ago it seems, the dotcom bubble and bust. To our eyes, there are two real differences-which-make-a-difference between the first dotcoms and what’s going on at the moment:
- There’s a touch of the vaudeville magician about the current crop of dotcoms: while distracting their consumers (and the markets) with simplicity and openness, they make their money (and are betting their futures) on plans for media empires to rival anything we’ve seen before.
While punters are having fun with these new toys – uploading their photos, posting to their blogs, gawping at the bigshinything – those same consumers are themselves building, click by click, from the online terra nulla, new media territories where tomorrow the future of marketing and sales will be decided through products and services sold back to them via the channels they themselves have created. Brilliant!
As evidence, we offer the following:- Google is still viewed as a search engine, but its revenue (and future) depends on its footprint as a media owner: every Google brand extension gives it more media surface on which to plant its ads – and as for targetting, who knows what you want better than Google?
- The must-have iPod probably only really exists to get iTunes onto people’s desktops, and to thus give Steve Job’s growing media empire an early mover advantage in owning media delivery in the next decade – leveraging both brand loyalty with consumers and his success in getting traditional content owners to actually sign up for online delivery – a major triumph given their conservatism.
- Skype wants ‘the world to call for free’, but still makes its margin from the extras it offers which allow Skypers to interact with the world of traditional telephony.
- It’s not just consumers being roped in to create the very markets in which the dotcoms wish to sell. The most savvy of these businesses offer out their services for others to innovate with.
Got a clever idea for a location-based service? Use Google Maps for the interface, and concentrate on the bit of your business that’s unique. Want to add voice chat to your dating site? You don’t need to spend millions on infrastructure, just build it using Skype. Google, Skype, Flickr and the rest make it easy for other people’s clever ideas to come to market: each business using their services increases their media surface and earns them some incremental revenue. Individual bloggers might add a few new pages for Google ads – a startup using Google Maps might just kick-start a whole new category of media in its own right. Lowering the bar for other clever businesses is a low-risk investment in the 99.9999% of innovation that happens outside the established dotcoms themselves.
These then are what the volume businesses for the 21st century look like – billion-dollar enterprises with cuddly, fun brands and friend-get-friend appeal, which offer access to their core services 'for free’ to other innovators in return for new media opportunities in the ecosystems they encourage to flourish around them. And so far, it works: not only are these upstarts making obscene amounts of money, they’ve jump-started a new wave of creative systems and services. Look on their works ye traditional media giants, and despair.
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Ning
Call it Web 2.0, call it this year’s dotcom hype, call it what you want. The latest and coolest generation of websites are designed to be bent, broken and pasted together by users themselves. Well, users who can code, anyway. Photo-sharing site Flickr, Google Maps, and blog search engine Technorati are just a few sites which publish interfaces to their internal workings, so anyone with some programming skills can use their data to their own purposes – see for example our earlier story about online maps.
Ning takes things a step further – rather than providing a specific hackable service, Ning’s API provides general tools for building community and data-based online applications. Imagine the bastard child of Google Maps and Hotornot.com, but done by everyday users instead of people who really understand how to program. We’re a little doubtful – our resident geek observes that while it’s easy to Ning-up a work-alike of an existing site, real innovation takes some real coding skills.
More about this ‘mash up playground’ on the Googlemapsmania blog.