Global Nerdy

There's a new pretender looking to dent, if not unseat, the current king of internet advertising. From Adweek:

Unlike Google, which charges advertisers on a per-click basis, Turn relies on a cost-per-action scheme. It charges advertisers only if users take desired actions, such as filling out registration forms or closing on sales. (A marketer such as Starwood, for example, could bid $20 for each hotel night booked, $3 for every e-mail sign-up and 75 cents for each site visit.)

In my Unified Field Theory of Advertising, we've been on a long evolutionary march from completely unaccountable analog-style advertising (where and advertiser pays for an impression), towards accountable digital advertising (such as the cost per click, or CPC, model Google employs). The logical extension, then, is the world Turn partly lives in: cost per action (CPA). In other words, the advertiser doesn't pay anything until the action they want is performed.

This will sound familiar to anyone who's been involved in what's called affiliate marketing. Amazon.com's Associates program, for example, offers anyone with a site the ability to earn a commission every time they send a person to Amazon.com and that person buys something within that same session. ValueClick's CommissionJunction subsidiary is one of the bigger guns in this space, operating affiliate marketing programs for a number of third parties, such as eBay, Expedia, and Sony.

Cost per action sounds like the most accountable form of advertising possibe: the marketer doesn't pay unless something they consider valuable actually happens. That has its drawbacks, however. First, advertisers must be trusted to accurately account for conversions (after all, it's in their interest to game the system to show fewer conversions), but there are contractual and technical ways to prevent this kind of fraud. Second, CPA, skewed as it is towards the advertiser, shifts the risk entirely on the publisher; they have to dedicate inventory to an ad that may not perform as the advertiser has defined (ie, a sale, a sign up, etc). The advertiser may gain an impression or even a click-through, but the publisher sees nothing from it.

That may be the primary reason for Turn's interesting mix of blended targeting and effective cost per thousand impressions (effective CPM) in their ad selection engine. TechCrunch describes it about as well as I could:

When visitors come to a site, data about those users, contextual analysis of the site, of the ads and of every ad permutation’s success in that and related sites are all considered in determining each ad’s probability of success. That probability of conversion is then considered relative to the price being paid on a CPA bases. The CPA bid divided by the probability of the action being taken equals an ad’s effective revenue per thousand impressions. And thus an ad is served!

The first set of calculations tries to find the right match of advertisement with site content and visitor profile. From those results, Turn attempts to take some of the risk out of the game for the publisher (while also giving advertisers traffic they value), by placing the ad with the highest effective CPM. That way, they avoid tying up a publisher's inventory with ads with a low probability of conversion. If their data indicates that your site won't send over the kind of traffic that might, say, book a hotel room, but will click through on an ad for travel services, the latter should show as a higher effective CPM even if the revenue per action is a fraction of the first possible ad scenario.

Assuming their algorithms work, that is. Given that Turn is being run by ex-AltaVista executives who did stints at Overture (after Overture bought AltaVista, but before Overture was itself bought by Yahoo!), we can probably assume some genuine understanding of these problems.

VentureBeat is reporting that Turn has raised $18MM from Norwest, Trident, and Shasta.

Link

Tags: advertising, Turn, Google, CPA, CPC, AltaVista

Microsoft's jumped into the market for downloading video into the living room, via the Xbox 360. According to the New York Times:

Owners of Microsoft’s Xbox 360 game console will soon be able to watch science fiction epics as well as play them.

Microsoft said last night that it would offer movies and episodes of television shows for downloading through its Xbox Live online service in the United States, starting Nov. 22.

With the new offerings, Microsoft is joining cable giants and Internet start-ups on the long list of companies hoping to profit from video downloading. But Internet-based services have had trouble getting traction because it can be complex to send a downloaded film to a television screen and frustrating to watch it on the small screen of a computer. Owners of the Xbox have already connected it to a TV and, in most cases, the Internet.

“What makes this big is that there’s no PC in the middle,” said Rob Enderle, principal analyst at the Enderle Group.

In the last few years, Microsoft has been pushing the idea of Media Center PCs, which are meant to sit in the living room and supply music and video to the stereo and the television set. But the concept has not caught on, in part because of the complexity of setting up and using these systems.

A few interesting things about this announcement:

Just as with Zune, Microsoft's end-running their own platform-and-ecosystem pitch built around Windows to address a consumer electronics market with a closed, vertically integrated system. With Xbox 360, Microsoft controls the device and the service providing the content. This has the virtue of simplifying the experience for the customer. As the Times article notes, cobbling together a system around the Media Center PC spec hasn't proved very popular outside a hard core of early adopters. Given the success Apple has had with video content for iPods, it's interesting to see Microsoft leverage Xbox rather than Zune as their platform. Then again, perhaps that bit of integration can wait for later

The content on offer seems very targeted at the mythical Xbox owner: dudes. Cartoons from Adult Swim, classic "Star Trek" episodes, and "Jackass: The Movie" all speak to the MAXIM-reading demo that seems to buy the preponderance of Xboxen (and to the Viacom-heavy character of the deals Microsoft has struck, although Warner's in there, too). Makes you wonder how far into the mainstream this offering will actually go on the Xbox platform without some radical change in who buys and uses these things.

Some of the service's details are also notable: HD is a pretty big deal. Video on the iTunes store is passable, but hardly DVD-quality. The ability to re-download purchases (which means you can log into your Xbox Live profile over a friend's Xbox 360 and see the movies you've purchased) is very convenient, but practically limited to television shows; your movie downloads are rentals that "disappear" after 24 hours. This re-download-ability is designed in part to address one of the shortcomings of having a console at the heart of a video to the home strategy. As the Wall Street Journal notes:

[T]he Xbox 360 has limited storage capacity. Xbox 360 users will be able to store only about 16 hours of standard-quality video and about 4½ hours of high-definition video on the machine, room for only a smattering of movies and television shows. For users who delete television shows to make room for additional content, Microsoft says they will be able to download previously purchased shows again at no charge.

You can be sure that Sony and Nintendo are both considering similar offerings, adding to the clutter around video on demand.

Link

Tags: Microsoft, Xbox 360, video on demand, Media Center PC

That post title must rank as the most use of the word "widget" in a four-word headline.

Anyway, Om's hosting his inaugural Widgets Live! conflab: a first-ever conference dedicated to those little bits and bobs that adorn MySpace pages, blogs, and desktops with tiny, focused streams of content (say, the weather, sports scores, or the three most recent posts from a given site). The GigaOm people are blogging it here, among other places.

Judging by the buzz, the biggest announcement from the conference so far was Fox Interactive's announcement of SpringWidgets. Mike "TechCrunch" Arrington describes SpringWidgets' announcement thusly:

It is a unique offering in the increasingly complicated widget space, although the desktop portion of it only works on the Windows platform. Widget platforms today work on websites (see Google Gadgets and WidgetBox) or the desktop (see Yahoo Widgets). Microsoft has a widget platform that will work on the Vista desktop and also on live.com pages. But no one has created a single widget platform that works on most websites as well as the desktop. That’s what SpringWidgets is launching.

Each widget can be embedded on a website or placed on a desktop. And they are easily shared, so if a website visitor sees a widget they like they can click a link and add it to their own site, or their desktop, or both. That’s an important innovation, and a useful one for websites.

All of which sounded good and exciting, until I visited the SpringWidgets site, and found out that, in order for this magical web-to-desktop widget swapping to work, you needed to install their widget engine on your machine. I assume, given what I've heard of SpringWidgets' demo, that the engine is Flash-based. It'll probably get some traction, given the mighty distribution engine that is MySpace, but this just adds to the widget Babel out there.

Still, the ability to see a widget you like and quickly snap it into your own site is pretty smart (and part of the feature set in my head for my yet-to-be-developed KillerWidgetAppPlatform). Anything that speed the sharing of widgets is nothing but good news for microcontent. Now, if only we could break down the barriers between the widget engines of the world (web and desktop). Mac OS X has a native widget engine. Vista will come with one of their own, too. Widgets on web pages all descend from either the Ajax or Flash family trees. I'd love to see a way for a widget maker to target the whole lot of them without YAWE (Yet Another Widget Engine).

Link

Tags: widgets, SpringWidgets, microcontent, standards

Tim O'Reilly announces a new publication on the Radar blog:

I'm announcing a special report that I've been working on for the past few months with John Musser of ProgrammableWeb.com fame, entitled Web 2.0 Principles and Best Practices. John has taken my What is Web 2.0? paper and expanded on it, producing a detailed analysis of the Web 2.0 core principles that I outlined there and has specified best practices that are derived from them, a number of drill-down analyses of sites (including amazon.com and flickr) to show how they apply those principles, and perhaps most importantly, a self-analysis tool.

Before I get started, I just want to say that if I sound cranky during any part of this post, maybe it's because Tim lets us know he's writing his post from Necker Island [warning: brutal, window-grabbing Flash site where Sir Richard brags about his private island], where he's briefing executives from the Virgin Group on Web 2.0-ness.

The nature of Tim's junket is one of the points I want to make about the new report (which was actually written, as Tim says, by John Musser): Musser and O'Reilly are taking the Web 2.0 message and using this report to tune it for a corporate audience, trying to clue the lumbering beasts of global business into how they can launch the next YouTube, MySpace, or Digg, or apply enjoy the fruits of Web 2.0 labor inside the enterprise.

If you've been engaged (either directly or as an interested observer) in the development of what people are calling Web 2.0 for any length of time, nothing in Musser's report should come as a surprise. At least, that's the sense I get from the report's executive summary (which is available for download), and from Dion Hinchcliffe's excellent run-down. So, to all the commenters to Tim's post, fretting at the cost of the report, I say "relax." If you're an entrepreneur with a burning desire to let fly your ideas in Web 2.0 form, you've probably internalized everything Musser and O'Reilly have said anyway.

No, this report isn't for the guy in the home office brewing up the next YouTube. This report's a cheat sheet for the very casually familiar but otherwise interested corporate decision-maker, tasked with competing with Mr Home Office. And in that context, it's pretty damn cheap. You could spend nearly as much for a quick four-page brief from a brand-name industry analyst like Forrester, and you'd certainly have to cough up far more (think thousands) for something that provided a thought-out framework and self-assessment model.

As for whether it's too early in the game to start making pronouncements on "best practices," that's an open question. Again, I've just scanned the ToC and the executive summary, but it would be fair to say that you won't be steered far wrong by Musser and O'Reilly. Perhaps we should just call them "good practices."

More than anything, the existence of this report is an indicator of how the Web 2.0 meme has evolved, and penetrated the consciousness of the corporate world.

Link

Tags: Web 2.0, O'Reilly, Musser, enterprise 2.0, Ajax, research

Despite having known each other for nearly 20 years, I forgot Joey's birthday yesterday (he turned 39). What an ultra-maroon (me).

Happy birthday, Joe. I give you the cheapest present possible: page views.

Tags: birthday, Joey, ass

Surely the biggest news of the day will be Google's trial deal to sell ads in some of the largest metro dallies in the United States:

For Google, the test is an important step to the company’s audacious long-term goal: to build a single computer system through which advertisers can promote their products in any medium. For the newspaper industry, reeling from the loss of both readers and advertisers, this new system offers a curious bargain: the publishers can get much-needed revenue but in doing so they may well make Google — which is already the biggest seller of online advertising — even stronger.

Newspapers have long tried ways to develop standby advertisers willing to fill unused space at a discount. But the Google program is meant to appeal to small businesses and those in far-flung locations that cannot be easily serviced by local papers.

The list of tree-killers reads like the biggest of the big: Gannett, Hearst, The Washington Post Company, Tribune, and The New York Times Company.

While conventional wisdom says that newsprint's share of marketing dollars is inevitably declining, it's still large. From Google's standpoint, this product will give them an opportunity to expand the spend coming from their very large base of search-only and online-only advertisers; the companies for whom Google represents the point of control for marketing. We're talking about online retailers, small regional advertisers…organizations for whom the newspapers' only product offering has been in the classifieds.

This is where the newspapers see some upside: the ability to fill remnant inventory with relevant advertising without the additional work or headcount required to serve the advertiser. Right now, that space is going to house ads.

Should this be viewed as a sign of weakness on the part of the newspapers? The inevitable fallout of past strategic mistakes? Jeff "BuzzMachine" Jarvis thinks so:

[T]urning over ad sales to Google — strengthening Google over their own brands, as Hansell’s story points out — only reveals the bankruptcy of their own strategies and soon businesses. Oh, if I were running a newspaper (fat chance), I’d probably sign on, too, because there’s little time and less choice. But it is only an indication of what Google can do and newspapers can’t.

A harsh read, perhaps, but I think it takes into account the future conflict this deal might portend. Right now, Google's selling this as a way for them to reach advertisers newspapers can't. But what happens when Google has all the pieces in place for a major brand advertiser? When they can offer, say, Ford, the ability to launch, track, and manage targeted text, audio, and video, both online and in their more traditional settings (print, radio, broadcast and cable)? That's precisely the kind of advertiser today's media companies (let's call them "Big Content") have grown fat and happy serving. What will these same newspaper companies do when Google (and/or Yahoo!, and/or Microsoft, etc) turns them into just another self-serve channel to be flipped on and off in a national or global advertiser's campaign management console?

The major newspapers have put themselves in a no-man's land of 21st century media: too big to serve local businesses, too small the be national or global marketing partners, and too slow to adapt to the way advertisers want to work.

Link

Tags: Google, newspapers, advertising

It'll be a busy day for me today, as I'll be flying from the Tucows offices in Toronto to Santa Clara, where I'll be attending, manning the Tucows booth and moderating a panel session at ISPCON Fall 2006 in Santa Clara at the Santa Clara Convention Center. I'll be filing stories as usual throughout the week, both on the goings-on at ISPCON and the 'net in general.

This will probably be my only shot at posting here today, so I thought I'd go wide and cover a number of stories.

Hanging Out with Doc Searls

The opening day keynote at ISPCON will be Internet Service: The Fifth Utility? and will be presented by Elliot Noss (Tucows CEO and my boss' boss) and Doc Searls (Cluetrain Manifesto co-author, Linux Journal editor and adult supervisor of the blogosphere). I'll shoot video of the keynote and I'm hoping to catch Doc for a quick podcast interview as well.

A New Toy!

Tucows has purchased a new toy for me to use: the M-Audio Microtrack 24/96 digital recorder. It'll get its first serious shakedown at ISPCON, where I'll use it to conduct on-the-spot podcast interviews and take notes from my trip. While I'm at it, I'll keep notes on my experiences with it and post a review here.

“What the Web 2.0?”

On Wednesday afternoon, I'll be moderating a panel at ISPCON titled What the Web 2.0? in which the panelists and I will talk about the implications of Web 2.0 for ISPs and hosting services. Here's the description of the panel, straight from the conference site:

You can talk all day long about blogs, tags, MySpace and YouTube
without putting a single dollar in your pocket. We're going to spend
this hour together doing the exact opposite. First we'll cover the
“what and why” of the subject through an overview of the direct and
indirect value these big trends represent for ISPs, Hosts and
customers. Then, we'll address the “how” of providers and customers
alike who are leveraging these technologies out in the wild with some
best practices. Finally, the “wow” being the business impact it is
having, it's potential, overall customer behavior/usage habits, effects
on bandwidth, churn, ARPU, adoption and of course how this all
translates into real dollars in your pocket, better customer
relationships and unique value in the marketplace.

And here are the panelists:

• Javier Hall, CCO, Userplane
• Kevin Henrikson, Director of Engineering, Zimbra
• Josh Jones, CJO and Co-Founder, DreamHost
• Ivaylo Lenkov, CTO and Founder, SiteKreator
• Dallas Bethune, Co-Founder / CTO, DreamHost

It's great to have these guys on board; I'm really looking forward to moderating this panel. Once again, I'll record audio (and possibly video) from this session.

Web 2.0 Conference

In San Francisco — 40 miles north of ISPCON and on the same days — venerable publishing company O'Reilly will be hosting the Web 2.0 Conference 2006. Expect O'Reilly and company to take a little razzing for heat for their registration of the phrase “Web 2.0” as a service mark for their conferences; you may remember the controversy that cost them a little community goodwill back in May. The practical upshot of the service mark is that only O'Reilly may use the term “Web 2.0” in the name of a conference.

Seeing as my only scheduled obligation at ISPCON is to moderate a panel on Wednesday afternoon, I might find a way to sneak up north and crash a couple of Web 2.0 conference parties and chat with some of the players and hackers. If I do, you'll read about it here.

Timed to coincide with the Web 2.0 Conference is the O'Reilly report Web 2.0 Principles and Best Practices. Tim describes it in a posting in the O'Reilly Radar blog:

So it's with a great deal of pleasure (less travel required!) that I'm
announcing a special report that I've been working on for the past few
months with John Musser of ProgrammableWeb.com fame, entitled Web 2.0 Principles and Best Practices. John has taken my What is Web 2.0?
paper and expanded on it, producing a detailed analysis of the Web 2.0
core principles that I outlined there and has specified best practices
that are derived from them, a number of drill-down analyses of sites
(including amazon.com and flickr) to show how they apply those
principles, and perhaps most importantly, a self-analysis tool.

The PDF version of the report sells for US$375. According to the promo material, the report:

• identifies eight core patterns that are keys to understanding and navigating the Web 2.0 era
• details the problems each pattern solves or opportunities it creates
• explains the technological, economic, and demographic market trends driving the development and adoption of Web 2.0
• illustrates best practices through case studies of industry leaders
• provides tools for hands-on self-assessment.

State of the Blogosphere

I'm going to read Dave Sifry's latest Technorati State of the Blogosphere report on the flight to San Jose. Here are some quick highlights from the report:

• Technorati is currently tracking over 57 million blogs.
• The blogosphere doubled every 5 – 7 months from Q2 2004 to Q2 2006, and today the blogosphere is doubling in size every 230 days.
• They've been aggressively removing spam blogs, a.k.a. “splogs” from their index — the fraction of the new blogs that get into Technorati index that are splogs has been reduced from about 8% to about 4%.
• The total posting volume of the blogosphere is about 1.3 million posts a day, which is double that of this time last year.
• The top languages of the blogosphere, in order of decreasing popularity: English, Japanese, Chinese and Spanish, with Italian, Portuguese, Russian and French sharing a four-way tie for fifth place.

State of the Computer Book Market

Tim O'Reilly has posted the second part of his quarterly “State of the Computer Book Market Report” on O'Reilly Radar (in case you missed it, part one is here). Here are some highlights:

• Web Design and Development has been the most substantial
  bright spot in the market, with 22% year-on-year growth in this
  category. This might well be expected in a period in which Web
  2.0 is the buzzword du-jour. In addition to breaking topics
  like Ruby on Rails, AJAX, Javascript, and ASP.Net, there's been
  nice growth in books on web design and web page creation. Books
  on blogging and podcasting have also finally caught on, after
  several prior false starts.
• Microsoft's server release earlier in the year is still
  driving strong sales of books on C#, Visual Basic, and SQL Server.
  However, other database topics are also up modestly.
• The growth in books on digital photography has slowed
  considerably. If not for the inclusion of the iPod category, the
  Digital Media supercategory would be flat.
• The hardest-hit part of the market was books on consumer
  operating systems, down 17% from the same period a year ago.
• The professional development and administration segment was
  down 2%, but might have been worse but for the strong performance
  of Microsoft languages, Python, Ruby, software project management, and database topics.
• Ruby has continued to grow apace, although its 255% growth rate
  is off last quarter's torrid 687% increase! Interestingly, PHP
  also picked up some steam, up 11% vs. last quarter's 6% YoY
  increase. Python's 27% YoY gain, up from last quarter's 6% gain,
  shows even more strength. In short, while Ruby has become the language
  of
  choice for many web startups, PHP and Python are both far from
  out of the game. With the addition of web frameworks like
  Django and Pylons, Python is becoming a real contender
  as a first rate language for Web 2.0 applications. (Google's commitment
  to the language doesn't hurt either, as Google is a hiring magnet, and
  Python skills are much in demand.)
• The decline of Java book sales has accelerated, while C#
  books have continued their steady increase. When you aggregate
  books on both C# “.Net Languages” (books that cover both C# and
  VB.Net), the C# book market is now about 12% larger than Java. (Of
  course, some of those .Net Languages book purchasers could be buying
  them for their coverage of VB.)
• Javascript book sales are up 152% — actually less than we
  expected given the new release of JavaScript this fall. If you
  aggregate sales of ActionScript books with JavaScript (and
  ActionScript is, after all, a dialect of JavaScript), it is now
  the 2nd largest language (after Java), in terms of book sales. (It's
  third if you aggregate the “.Net languages” category entirely to VB
  rather than to C#. See the note above about Java vs. C#.)
• While sales are still tiny, we see signs that developers are
  taking a second look at languages such as Lisp and
  Scheme. Specialized languages such as MDX (used with SQL Server) and Lua (used for game programming) are also showing growth.

30 Rapid-fire Website Wins, Guaranteed

Last but not least, one more ISPCON presentation: my boss, Ken Schafer, will be making his presentation, 30 Rapid-fire Website Wins, Guaranteed on Thursday. Here's the offical conference description:

Many ISPs and Hosts fail to realize the full potential of their own
websites and spend little time updating, let alone optimizing them to
achieve key business objectives. What's the desired outcome for your
site? Serve as a local community portal, a customer extranet for
support or webmail, a place to showcase solutions, convert new leads to
customers or just tired brochureware for that snazzy $19.95 dial-up?
During this fast-paced “no holds barred” session, Internet best
practice expert Ken Schafer will guide you through 30 ways to make your
site dramatically better and meet key business objectives. Using dozens
of examples, we'll provide eye-opening insights into how these Quick
Wins and Big Ideas can shape your site and provide an unfair advantage
over your competitors. GUARANTEE: If at the end of the session you
don't feel you have at least five techniques that will improve YOUR
site, Ken will personally assess your site and give you five ways to
improve it!

As with the other Tucows-sponsored ISPCON events, I'll be recording this one and I'll tell you where you can find it once it's been posted.