BloGiza

Jacko, Neda, and the Limits of Social Media

As I write this, the memorial service for Michael Jackson is about to kick off. While a large majority of the US (and world) population will be glued to their TV sets watching the spectacle, I imagine that my colleague Michael Eisenberg from Benchmark won’t be one of them.

The other day, Michael penned a heartfelt blog entry entitled “Michael Jackson Killed the Iranian Revolution” which deals in general with how the world focuses its attention to breaking events and more specifically how social media shapes and relates to this. Michael was bothered at what he perceived to be a major shift in world attention away from the popular uprising in Iran and towards the death of the King of Pop.

We have a problem. If our attention and that of the news media can be swayed from earth shattering events and real people, fighting real oppression with the ease that Michael Jackson swayed it, we have a problem. If we are riveted by a miscreant pedophile, who lived extravagantly and ran away from reality, then we have lost our moral compass. Twitter is a pretty accurate reflection of what people are thinking and CNN is a reflection of what media people are thinking. Jackson is ahead of Iran on Twitter and the top story on CNN today was Jackson's memorial. We have a problem.

To some degree, I share his frustration. Less than a month ago, ordinary Iranian citizens took to the streets to protest the outcome of what clearly looked like a rigged election. While the protests were the main story, the sub-story was the role that social media played in all this. Thanks to the power of online tools, people in one of the world’s more oppressive countries were able to bypass the official Iranian media and bring awareness to their cause. Twitter became a major source of news coming out of Iran, while the death of one of the protesters, Neda Agha-Soltan, gained international exposure via YouTube. At the same time, concerned people outside of Iran used the same social media platforms to show their support for the demonstrators.

It seemed, at least to a lot of people involved in the tech/New Media world that we were witnessing something earth-changing.

But, two weeks later, Michael Jackson suffered a heart attack and Iran got pushed back into the inside pages of the newspaper. The attention of the world turned from the streets of Tehran to the Staples Center in Los Angeles.

So, is it right to say that Jacko’s death killed the revolution in Iran? I’d say it’s a bit of a stretch, both factually and conceptually. First, let’s look at the timeline. By the time Jackson’s heart gave out on him early last week, it had become clear to just about everybody that the revolution in Iran was petering out. The authorities used a combination of violence (and the threat of violence) combined with small measures of appeasement, and the street protests quickly died down. Which is to say, world attention would have soon shifted away from Iran even were Michael Jackson still with us.

But on a more conceptual level, I think we need to take a step back and evaluate the ability of social media to influence real-world events. And here, I am probably going to take a lot of flack from friends from the tech community when I say that Twitter as a world-changing tool is highly overrated.

Many friends of mine did their part to raise awareness of the Iran situation, whether changing their avatar color to green or working to keep #irranrevolution a trending topic on Twitter for as long as possible. In this way, it was similar to concerted efforts the day before Jacko died to raise awareness of Gilad Shalit on the third anniversary of his kidnapping. In our little social-media bubble, it’s easy and a bit too tempting to imagine that our little actions are helping to make the world a better place.

But unfortunately, reality has a funny way of laughing in our faces. Gilad Shalit is still held prisoner by Hamas, and Iran is still ruled by a clerical dictatorship that has proven it will beat down its populace by force if it needs to in order to survive. In other words, while Twitter can be a powerful weapon against dictatorship, guns are still a much more powerful counter-weapon.

Now, I’m not completely dumping on Twitter or Facebook or YouTube as a tool in the fight for democracy. There is definitely value to raising awareness. However, as Aung San Suu Kyi or the wretched population of Darfur will tell you, raising awareness only gets you so far. Dictatorships have a tendency to survive, since they have little compunction about using force against their own people (or, in the case of China, a combination of force, co-optation and bribery). Those that fall do so because of internal tensions or, as in the case of Slobodan Milosevic or Saddam Hussein, through external force.

The real fear about relying on generalized "awareness" efforts is that it often takes the focus away from actions that might make a real difference, such as pressuring our own leaders to take a stronger stance against the dictators.

This post (which is a lot more political than the blog usually gets) might sound overly pessimistic. But it’s not meant to. I think one of the things the Internet revolution has done well in the past month is to uncover a lot of the fissures and tensions which underlie the rule of the mullahs in Tehran. These fissures, I strongly believe, will eventually undermine their rule and bring change to Iran.

However the clerics are not dumb; the next time uprisings start, the first thing they’ll do is cut off access to Twitter.

Twitter, Facebook and Real Identities

Two interesting events made news in the social media realm last week.  The first was Twitter’s announcement that it would start a Verified Account program to prevent identity confusion. The second was Facebook offering customizable URLs for its users. While not directly related to each other, both initiatives go to the heart of how online identities are evolving.

Twitter’s Verified Accounts come to deal with the issue of fake celebrities on the service. While @oprah, @aplusk, and @britneyspears are all the real deal (or at least the flacks running Oprah’s and Britney’s social marketing activities), there are plenty of others, including the late lamented @cwalken and @steve_buscemi accounts (both suspended) which were nothing more than clever fakes.

With the new verified accounts, says Twitter…

…you can easily see which accounts we know are 'real' and authentic. That means we've been in contact with the person or entity the account is representing and verified that it is approved. (This does not mean we have verified who, exactly, is writing the tweets.)

This also does not mean that accounts without the 'Verified Account' badge are fake. The vast majority of accounts on the system are not impersonators, and we don't have the ability to check 100% of them. For now, we've only verified a handful of accounts to help with cases of mistaken identity or impersonation.

For the foreseeable future, the program will apply primarily to celebs and other high-profile users. Regular shmoes like myself will have to continue to monitor the service regularly to make sure that @fake_shaister does not rear its ugly head.

On to Facebook and its vanity URL program, or to use the official lingo “Facebook usernames”. This is a useful-ish little feature that allows FB users to change the URL of their profile page to incorporate a name. In other words, instead of directing people to http://www.facebook.com/profile.php?id=1234567 you could tell them to go to http://www.facebook.com/shaitsur instead.

It’s not the most mind-bendingly awesome feature they could have come up with, but it is relatively useful at least for those of us who showed up to the land grab early enough to get our chosen username. (Sorry, other Shai Tsur).

So, what’s the connection here? I think it has to do with identity management and the shift in general in how we live our lives online. Back in the old days of the Internet, most people did not share much of their lives online and a lot of those that did tended to hide behind made up names and avatars.

Both the Twitter Verified Accounts and Facebook Usernames suggest that the standard has now switched to the other side. Increasingly, you are you, both offline and offline. If you want to be someone else, the big social networking providers will do their best to nudge you in the opposite direction.

It could also be argued that this is another sign that we are living our lives online a lot more than we used to and that even people who aren’t @jeffpulver are beginning to see their offline and online lives converging.

IMHO there’s an opportunity here for plays that will aggregate, manage, and protect your online identity moving forward. This certainly makes sense for celebrities who want to play the social media game effectively, but it would also be good for other users who currently manage their time on a variety of different social networking sites.

Update on the Cloud

Giza was one of the sponsors of this year’s IGT Cloud Investment Summit for Virtualization and Cloud/SaaS Based Technologies which was held today in Tel Aviv. The conference brought together startups, investors, and large corporations to get their take on the state of the Cloud.

As has been the case in the last couple of years, Cloud Computing is probably the biggest buzzword in the software/IT world. Increasingly, companies are harnessing the power of distributed computers to reduce both IT and development costs.

With the rise of Amazon’s Web Services and Google’s App Engine, small and medium-sized companies can also harness the power of the Cloud for everything from storage to high-performance computing tasks. In short, it feels the Cloud is definitely upon us, a feeling that was reinforced by today’s event.

Some of my takeaways:

1. Infrastructure vs. Platform vs. Service – We continue to see the evolution of the “as a service” notion. It is increasingly important to think in general terms of Software as a Service, Platform as a Service, and Infrastructure as a Service. In other words, to distinguish the offerings provided by Salesforce.com (software) on the one hand, from Amazon Web Services (Infrastructure and Platform) on the other, as well as offerings provided by a company like GigaSpaces that enables the smooth interface between the two.
   
   In this continuum, startups should constantly be looking for ways to fill in the gaps between the three general aspects of the cloud. Specifically, the participants today talked about issues such as integration, security, and reliability which are currently limiting factors on the growth of the industry.
    
2. The Cloud is Changing the Landscape – Two presentations in the morning session drove the point that the advent of the Cloud has opened up new business areas for companies that historically have not been involved in IT.
   
   Nava Levy from Amdocs argued that Communication Service Providers (mainly telcos) are increasingly looking at providing Cloud IT service as a new revenue stream. She made the point that CSPs can leverage a number of advantages, such as their strong relationship with their customers and heavy financial muscle, in order to branch out into cloud-based services. This will emerge as a growing factor in their constant struggle to avoid becoming dumb pipes.
   
   Similarly, we heard Simone Brunozzi, Amazon’s Technology Evangelist for Europe, who gave a rundown of the various offerings that make up Amazon Web Services. This has expanded from the popular S3 and EC2 storage and virtual servers, to a whole host of other services. These include the content delivery network CloudFront and ElasticMapReduce, which allows the relatively easy deployment of servers under the Hadoop framework for high performance tasks such as those demanded by scientific or financial users.
   
   The point is that we see companies in completely different fields – telecommunications services and online retail – both competing in a new realm. Who will succeed? Will the telcos be able to utilize their strong market position to gain traction or will their dinosaur-like size give the advantage to fleeter competitors like Amazon or maybe Oracle?
    
3. Barriers to Entry – The meatiest part of the morning came from a panel discussion involving the “customers” of Cloud Computing, e.g. company CIOs. In theory, Cloud Computing, especially the Software as a Service aspect of it, should be the CIO’s best friend, as it allows the company to deploy IT services without a lot of the attendant costs in hardware and deployment.
   
   And while there does seem to be a general willingness to adopt some aspects of the cloud, there is still some hesitation as well.
   
   The biggest issues continue to be security and reliability. Some information (think health or banking records) will certainly not be migrating to the Cloud anytime soon, both due to government regulation and basic security concerns.
   
   Gadi Gilon, Partner’s CIO, mentioned that at the moment Cloud Computing is seen as a good solution for offloading a lot of the company’s non-mission critical applications. The core apps, however, will remain in-house for the foreseeable future. On the other hand, we may be seeing a rise in hybrid systems that communicate between both the external Cloud and internal company Cloud.
   
   Gilon made a point that startups need to remember: When selling to large companies they will be competing in many ways with expensive legacy systems. The point being that startups should always think how to best adapt themselves to integrate with old existing systems.
    
4. “Starvation for Innovation” – Probably the biggest takeaway from the conference, at least from the perspective of an investor was this: There is a move towards Cloud-based services at the same time that the Cloud is enabling very large companies to engage in new lines of business. At the same time, these companies have been cutting back on their internal R&D efforts.
   
   The result is a good environment for acquisitions, as the large companies will seek to buy the abilities that they lack. Startups that find the right way to navigate the new landscape may very well find themselves in a strong position in the next few years.

China - A Bird's Eye View

My friend Shai Tsur asked me to write few words on China for BloGiza. I do not regard myself as an expert by any means and trust that my views are taken with consideration. 

China is increasing access to personal computers and the Internet. This combined with domestic companies' increasing use of complex software in day-to-day business operations have spurred significant growth of China's Internet and software companies. Sales in China's software industry have increased over tenfold since 2000 from 59.3 billion RMB to 680 billion RMB in 2008. China's online population surpassed the United States' in February 2008, making it the worlds largest with approximately 310 million netizens. The fact that around 18% of China's total population is online, versus 71.4% of the US's, suggests that remarkable growth opportunities are still very much present, if you have a suitable joint venture, balls and money, there is plenty of room.

In my opinion, the Internet sector will be able to handle the financial downturn better than most sectors. Younger, middle class consumers who populate most of the Chinese Internet community have spent the same time if not more online in 2008 and Q1of 2009 and brought more of their friends along for the ride. With the online community expanding exponentially it is making up in value and positioning, than compared to the actual ad spending. It is after all early stages for the industry. In 2009, China ad spending is estimated at US$2 Billion compared US$ 25 Billion in the United States. A big difference sure, but the US is a mature market, while China is still in its infancy.

I refer to the year of 1994, when WebCrawler launched the world’s first full-text Web search engine and Time magazine’s cover for July 25th was titled ‘The Strange New World of the Internet’, as the beginning of the Internet in the US. I regard February 2008 as the ‘real’ beginning of the Chinese Internet. That month the total number of netizens reached 220+ million, 15% of the population, an online critical mass in comparison to the population. Online access has only been improving in the past 2 years.

I would very much like to see the comparisons of China to US in 15 years, the same head start the US has now over China. Analysts always like to compare the two in their reports and I find it more and more dull-witted. In 15 years from today, I will be 48 years old and China’s Internet will be 1+ billion online strong (larger than Europe, US, South America, Australia combined).

I estimate annual ad spending to be approximately US$ 100 Billion. With the computer growth rate maintaining a 35% lead over the US 2.2% the next few years will be important. Computers will be in more homes, online payment methods established and secured, a regulated ad market will emerge, more lenient regulations for web operators, reassurance from advertisers will be overtaken by their need for penetration. Presence in China is too big to cast aside.

Revenue is key in any business, but I do believe that in order for an Internet ‘start-up’ to succeed during the early stages when the sector is on the rise it is more about fundraising than revenue. I do believe that China is very much on the same theme, although it involves a much greater amount of backing as there is still a long way more to go and one embarking on the journey better be fully prepared for the ups and downs. Being solely revenue-driven is not enough in the market today.

No one is generating such impressive numbers. Let’s not forget that when Alibaba IPO’d in late 2007 at US$ 9 Billion it did only US$ 180 Million in revenues and approximately US$ 14 million in net profit. This was the same when it shot to a market cap of $25 Billion a few short weeks later.

Landmark companies such as Tencent, Giant Group, Shanda, Baidu, Taobao / Alibaba, Sina, Sohu are generating large numbers, but still pale in comparison to their international counter-parts. The rest are more or less competing for what is left over.

Foreign Web Metrics & the F@! K-ups when Trying to Rank China Websites

The issue of metrics amongst critics, reporters, VC’s or other types with no understanding of the ‘errors’ in measuring Chinese websites always frustrates me. There is always some ‘intellectual’ that thinks Alexa for example is his/her way of valuing or evaluating the basic traffic status of a website. Well, in China it’s not applicable. I have stated this before, but they think I am ‘pulling their leg’. If you want to be regarded an idiot by a web operator in China start your sentence with ‘I saw on Alexa……...’

This is Alexa in China, blatantly ridiculous:

Alexa ranks the following in the Top 100 Websites of China:

• Bank of America -Yes, yes, the ALL English, Bank Of America website designated for US account holders or corporate matters is ranked 75th largest website of China according to Alexa. No joke, kindly check yourself
• Wikipedia - Ranked 56th largest website in China according to Alexa. The 56th most populated online destination in China by Alexa. Wow, unbelievable for a website that has been blocked and banned in China since November 2006. No Chinese IP can even access Wikipedia as it is blocked. But according to Alexa it ranks them as the 56th largest website of China.
• RapidShare - Is ranked 29th largest website in China just below xiaonei.com the largest social network in China whose parent company Oak Pacific raised US$ 400 million in 2008. Not bad for NOT having a Chinese version or text website - RapidShare has no Chinese url.
• Craigslist - Ranked 32nd largest website in China according to Alexa, Not bad right? Guess what, there is no Chinese version, no information or variation of China and no directory reflective of the country. But according to Alexa it ranks up there with the 2nd most popular video sharing website of China.
• DoubleClick - 44th largest according to Alexa, the ALL English corporate website of DoubleClick is the 44th largest in China.

It is truly irresponsible of Alexa to make such ridiculous ranking or traffic reports for China based websites. What makes it even more careless is that it breeds misinformation and misrepresentation which can lead to a poor investment or an inappropriate introduction.

Alexa should note that it is not applicable for China, it is irresponsible and although the following public companies; Sohu, Sina, Baidu, Netease have all issued statement, it has been disregarded.

I had a news reporter in Israel recently ask me, ‘Why does 360quan not appear on Alexa?’. I think it was best it was a con call, otherwise I might have punched him’ as I am so so tired of misinformation.

Google Trends is a much more respected tool than Alexa, when it relates to the rest of the world. In China it is still difficult as Google does not host solely in China, there is information lost over the ‘Great Firewall’ of China and at the end of the day Google is not a dominant force in China, their ‘trends’ are not applicable on a whole. Not that ‘trendy’ in China when compared to Baidu.

As for traffic reports or ranking of Chinese websites, iResearch is great, CNNIC a government division, or Baidu’s SearchLabs which ranked 360Quan as the most popular site amongst teens two years in a row and our browser iQ:Smart in the top eight.

Video - Taking a Tumble Online?

The Chinese Internet video market is seeing an increase of only 0.5%.

This flat growth is attributed to a number of factors such as P2P services being weakened, copyright protections becoming more important; and traditional media companies beginning to move into this sector.

The dominant position of P2P live service providers has been weakened and the market concentration has decreased. PPStream and PPLive, two major Chinese P2P live service providers, owned market share of 12.9% and 12.1%, respectively. The reasons for the decrease of market concentration are because the value of video websites has further gained the recognition of advertisers after the 2008 Beijing Olympic Games. In addition, these video websites enhanced their marketing and sales, which helped them shorten the distance to the P2P live service providers, who started earlier in the online advertising sector.

Second, video websites attached more importance to copyright purchases than the video-sharing model and enhanced their establishment of an authentic movie and TV products sharing platform. These high costs brought great pressure to video websites, and to turn their traffic to revenue as soon as possible, the video websites started to shift to authorized content to gain the recognition of advertisers. In the fourth quarter of 2008, Youku.com and Ku6.com topped the Chinese video website market with the market share of 8.6% and 8.5%, respectively.

Finally, traditional movie and TV media and organizations entered the online video channels in China. For example, Beijing Television Station has launched its own online TV channel and China Film Group Corporation has launched online broadcasting of short films. As the function of online video gained the recognition of traditional movie and TV makers, these companies realized that cooperation would bring more benefits than competing with online video websites. Taking online video as a new revenue channel, traditional movie and TV makers can not only expand their channels, but also can realize the value of their products for the second time.

Given the challenges of 2008 for Video sharing sites with regards Government license issues and now the advertising revenues being harder to attract and cover the significant cost structures it is likely we will see consolidation in this market and worst, some sites failing.

Koolanoo Group Updates

In December 2008, I stepped down as CEO of Koolanoo Group and remain today as Chairman of the Board.

The Company’s new CEO is Mr. Dan Brody. Previously, Dan held positions as Managing Director at the United Sates Government IT Office in China, where he was representing companies such as ATT, Cisco, HP, IBM, Intel, Lucent, Oracle, TimeWarner, Google, Microsoft enter and operate in China. Later, he was Director of Government Relations & Head of Business Development for Motorola China. Later he helped launch off Google in China. Widely referred to in China as ‘Google Dan’ as he was the 1st Google employee in China. Dan was Strategic Partner of Google China, and the Director of Business Development for Google. He holds 3 Model UN Best Delegate Awards and is Manager of the US-China Policy Foundation.

Mr. Brody is responsible for all executive management in Koolanoo Group China.

The Company today owns several leading web brands and software properties in China. In total Koolanoo Group develops, operates, invests and manages over 18 websites in China. Products include 360Quan, myiq.cn, 9949.cn, 6887.cn, Shimao.tv amongst others. In addition, the company had invested in iQ:Smarter an Internet Browser which launched on October 2008, servicing the Internet café environment, which still is responsible for 40% of all oline access. iQ:Mail, iQ:Music, iQ:Videos are all such integrator plug-ins created for the Chinese version. (www.myIQ.cn or English basic version www.myIQ.cn/en/ )

For introduction purpose the following was uploaded for BloGiza readers:

• iQ:Smarter
• 360Quan

The Company has broadened its reach with a client-software division, Web, and further new media license holdings. Koolanoo Group is affiliated with several international content providers, games companies and other such new media affiliations.

Koolanoo Group is in the right place and at the right time.

O.D. Kobo is the Chairman of Koolanoo Group

Techonomy 2009

Capping off a mad week of events and conferences surrounding Kinnernet, the Techonomy event kicked off earlier in Tel Aviv. Techonomy is kind of a local answer to industry showcases like the TC50 but with a smaller and more manageable group of presenting companies.

Six companies, all of them in the social media space got up and gave brief presentations. Then, a panel of industry experts (which included, among others, Giza MD Eyal Niv) provided their own input to the entrepreneurs presenting.

The companies which presented were:

• Sense of Fashion –an online marketspace for independent fashion designers and fashionistas everywhere
  
• Hoody – a social network-cum-services board focused on local neighborhoods
  
• GrazeIT – a StumbleUpon-type service in which users can take their content and provide a link back to it on relevant Web sites
  
• Vetrinas – A map/online shopping platform that enables virtual window shopping
  
• Tra.cx – A suite of analytics about our social interactions across multiple social media services
  
• Face – a photo recognition platform that automatically recognizes and tags photos of users and their friends on Facebook

First, I should note that the whole event was very well-organized. Big props to Orli Yakuel for getting it set up. The presentations were short and to the point. The panel made good points. And as a whole it was a useful exercise both for the presenting companies and the audience.

Following the presentations, journalist Sarah Lacy took questions from the audience and talked a bit about what she has learned about the Israeli scene compared to Silicon Valley. Lacy is in Israel doing research for her next book and kicked up a big storm here last week with a post in Tech Crunch about the questions facing Israel’s tech industry.

In addition, there was a Twitter back channel running on one of the onstage screens the whole time showing real-time tweets from the crowd. Which provided a lot of fun, especially to those of us doing the tweeting.

The event might have been mis-sold a bit. The name “Techonomy” seems to imply that the subject would be the intersection of technologies and business models. In reality, most of the presenting companies were notably lacking in either Tech or Onomy.

Now, this is not necessarily a criticism. There is precious little heavy tech in the Internet space in general. The name of the game is user experience above everything else. And, as Lacy pointed out, a lot of the more successful social media companies (e.g. Twitter) did not start off with any business model in mind. They let the users define both the way the product works as well as how you make money from it.

Also, it’s not true that revenue models were entirely absent. Sense of Fashion, Hoody, and Vetrinas all offer a social shopping solution of one sort or another – based on shared interests or shared locations.

The other three companies are technologically nifty even if the revenue model is less clear. Tra.cx, for instance, allows you to analyze your behavior and that of your friends on social media services in all manner of interesting ways. The company says it does have a revenue model, but declined to specify what it was. An even more important issue IMHO is what kind of user they plan to target, and how they can expand their audience base beyond the realms of social media geeks like me.

GrazeIT has a nifty concept that, ideally, would enable users to more easily direct traffic to their own content by leveraging relevant web sites, forums etc. The company, however, has a real battle ahead of it. In order for the service to become valuable, the network effect needs to kick in big time (i.e. the more users you have, the more valuable it becomes to any individual users). At the same time, users utilize the service with a Firefox plugin. And from experience I can tell you that plugin businesses are difficult.

Finally, we have Face, which won the audience vote for favorite company at the end of the event.

Face provides the ultimate Facebook photo application. The company has taken a new approach to the problem of facial recognition by leveraging the information available on social networks to narrow down the list of possibilities. In other words, Face looks at you, your friends, and events you attended and uses this information to guess more intelligently about the identities of the people in the photographs. The results are really impressive. Face’s Photo Finder application can successfully identify people even in situations of extreme low light or extreme blur.

It’s also a veritable click factory. I’ve been playing with it for a few months now (proud alpha user that I am) and can testify that it’s pretty damned addictive.

The big question that still hangs over the industry here, one that hasn’t been answered yet in my opinion, is whether Israel is capable of creating the next great social service. The technological ability is definitely there. I think the real issues are whether Israeli companies understand the needs of their users well enough (and are connected enough to users in order to make the necessary adaptations) and whether our geographical disconnect from the center of the industry (e.g. the Valley) means that local companies need to move out to the States as soon as is feasible.

At any rate, an interesting and entertaining day!

Bridging the “Why Hasn’t It Happened?” gap

Last week, I had the pleasure of attending a talk given by New Media guru Mitch Oscar, who is in charge of televisual applications at the global media agency MPG. (Props to AdsVantage for organizing the event).

In his presentation, Mitch focused on how the world of interactive TV is taking shape. Interactive TV is part of the general media industry which is comprised, as it has been always, of three major components: content producers who create the content, advertisers who essentially fund the content, and distribution platforms which bring the content to the end users.

The biggest changes over the last decade have come primarily on the side of the distribution platforms. Where once there were basically two distribution mechanisms (network TV and radio) today there are nearly 20 different and sometimes complementary platforms with which users encounter content. This includes everything from digital television to satellite radio and includes the set-top boxes and interactive episode guides that power the experience.

The explosion in distribution has fragmented the industry and created internal media silos. Different media agencies and content creators deal with different distribution platforms in different regions. Each one has a different piece of the puzzle, but no one is able to put it together from above.

The lack of communication between the different silos has been one of the key factors keeping New Media (or interactive TV or whatever term you want to give it) from achieving what should be nearly boundless economic and cultural potential.

In this way, interactive TV is a lot like mobile Internet: it should be much bigger than it actually is. You have the technology to drive new media consumption experiences (be it on handhelds, on the Web, or on the TV in your living room); you have what appears to be a critical mass of users receptive to consuming media in new ways; and you have the advertisers who are receptive to the new media and distribution types.

Yet everything remains mired in what I like to call the “Why Hasn’t It Happened?” gap.

Ad spend is still overwhelmingly directed to old media channels, primarily broadcast television and radio. New Media avenues (for example Hulu) remain a kind of sideshow with the relatively small ad budgets to show for it.

There appears to be a missing link here between the situation as it is and the situation that technology makes possible. In order for things to change in a meaningful way, content creators and advertisers will need the ability to provide what Mitch calls a “360 degree experience” based on the consumer and not the device

Interestingly, the key obstacles are less technological than they are worldview-related. Or, more to the point, they are technological but a lot less on the distribution side than one would expect. The real issue is how to provide a unified experience across multiple device types but done in a manner that the advertising agencies are used to dealing with.

Some of the key issues that need to be resolved:

• Measurability – getting reliable data across different platform types. This is a lot more non-trivial than you’d imagine. To give one banal example: When measuring television viewing, do you measure each separate set-top box in a household or the household itself?
• Standardization – This involves everything from standardized ad formats to the definitions of measurable ad spend units. For example: how do you translate a CPM model to interactive TV?
• Addressability – This is the holy grail of advertising, involving as it does the delivery of the right targeted ad to the right person at the right time.

All these issues, by the by, while not necessarily the most sexy part of the high tech world, present huge opportunities for the startups that can crack the code. From the investor side, IMHO this will be one of the most interesting sub-sectors of the overall Internet industry in the next few years.

Meanwhile, back in China…

It’s been a while since we reported on the goings-on in China, which in many ways is the last great Internet frontier.

Koolanoo Group, one of Giza’s portfolio companies, recently celebrated the second anniversary of the launch of 360Quan.com, its flagship Web property. 360Quan is a social network for Chinese youth which offers a wide variety of activities of the sort you would expect: blogs, music, photo and video sharing, and a wide range of applications.

Since launching in early 2007, the site has grown enormously with millions of registered users and monthly pageviews in the hundreds of millions. The 360Quan site is consistently ranked in the top 10 in its category.

(The Chinese categorize websites in a slightly different way than we are used to. 360Quan falls under what can best be translated as “make friends websites,” a category that also includes online dating sites).

In its space, 360Quan is one of the most popular sites for Chinese teens who spend hours online on it each week. Interestingly, the most popular activity appears to be PK, which is the Chinese equivalent of Hot or Not. In case anyone was wondering whether online fads carry across cultures.

Now, Koolanoo is looking to expand its activities in new directions. In recent weeks, the company has launched iQ, a Web browser which fits the needs of the Chinese Internet community.

Nearly half of Internet users in China do their Web surfing from Internet cafes. This creates a number of complications about privacy and personalization – namely, how do I keep my settings and favorites with me while keeping other people from accessing my online history. The current crop of browsers are not built to deal with these problems. iQ is.

iQ operates under a nifty virtualization scheme that separates the browser settings from the physical browser. iQ users register to the service (it’s free). Then, they login each time they want to surf. Their settings are saved on the server side rather than on the client, allowing them to enjoy the same browsing experience from any computer.

On top of being useful, the browser is pretty slick. The design is clean and attractive and offers a number of different skins for customization. And the UI is such that it brings the browser settings – which are normally kind of hidden, especially for non-technical users – to the forefront in an easy to use manner. Techie types will also notice that it is quite lightweight and quick.

The browser is now available in English for anyone who wants to try it out.

Introducing Triond

One of Giza’s portfolio companies has finally emerged from stealth mode. As such, we have the pleasure of introducing everyone to Triond.

What is Triond you ask? Triond is a publishing platform that aims to solve the main problems of most content creators on the Web: audience and monetization.

And it’s a major problem. A lot of people maintain blogs. If you happen to be Scoble then you have developed a large following over the years. And if you're a guy like Shoemoney you've also learned how to squeeze a couple of bucks out of your online presence.

However, for the rest of the millions of mere mortals who produce content online, both of these are daunting problems. Most people don’t know how to go about attracting readership much beyond family and friends. The vast majority don’t know how to monetize their content at all, and even the relatively sophisticated ones who have figured out how to put AdWords on their site generally have no idea about SEO and other ways of raising their CPM.

In fact, most content creators just want to focus on what they do best – be it write, take photographs, make videos, or whatever – and not have to bother with the hassles of trying to create their own successful blog, dealing with advertising, and constantly feeling the pressure to create regular updates.

Which is where Triond comes in.

Triond is an end-to-end publishing service consisting of a centralized publishing platform (located at Triond.com) and a content network of nearly 30 targeted destination sites. The sites range from travel to business to computers to poetry and creative writing. Users upload their content to Triond, which publishes it on the most appropriate site in the network. The content sites generate much higher traffic than most beginner blogs could hope to get, and they are fully and effectively monetized.

And here’s the best part: Triond shares the revenues that the content generates 50/50 with the content creators.

In short, Triond provides content creators with a clear value proposition: You focus on creating content, we'll handle the rest, and you earn what your content is really worth.

The service has been running in stealth mode for the last 18 months or so, slowly building up a dedicated and passionate user base. The Triond site provides each creator with a portfolio for his/her stuff as well as a community for content creators to provide each other with feedback and support.

Triond is operated by Stanza Ltd, which recently graduated from Giza’s Ofek Program to become a full portfolio company. Stanza was founded by Shahar Solomianik, Oren Solomianik, and Udi Oz, a great group of entrepreneurs with a strong understanding of the mechanism of Web publishing.

Old Media Strikes Back

Gil Dibner had a good post this morning about the recent flap between Hulu and Boxee. Hulu, the joint venture between NBC and News Corp, is an ad-funded free service which streams video content from NBC and Fox (at least to those lucky folks living in the US). Boxee is one of the most interesting online media startups provides software for watching online media on your TV, providing a very slick content library and social networking features.

Boxee has been working with Hulu to provide easy access to Hulu content via Boxee’s software. Well, no longer. Citing concerns from content providers, Hulu announced that it was pulling its content from Boxee.

On the one hand, Hulu’s move can be viewed as slightly idiotic. In addition to pulling content from Boxee, Hulu has also stopped providing its shows to TV.com, a rival video streaming service owned by CBS and CNet. But while TV.com has emerged as a direct competitor, Boxee is more of a delivery channel. Also, it’s unclear from the statement on Hulu’s blog exactly what the “concerns” of content providers are regarding Boxee.

I’m guessing that the problem is not with what Boxee is offering per se more than it is a general and unspecified discomfort with the idea of releasing premium content online.

For the last couple of years we in the media/tech-geek community have developed this belief that premium offline content will eventually migrate completely online. And online content is on a one-way march towards a state of free. In other words, that people will transition from the old way of doing things (e.g. paying for content) towards freemium and ad-funded service. In this context, the old-guard media companies – the recording, TV, and film industries who have been slow to adapt to the new realities – come off as pitiable dinosaurs, unable to adapt themselves to the new reality.

And yet, what we’ve been seeing lately is that the dinosaurs still have a lot of bite left to them. The recent trial in Sweden of the founders of the Bittorrent sharing site The Pirate Bay is another example. While the outcome of that trial has yet to be seen, it is clearly an indication that the industry not content to lie down and accept the adage that content wants to be free. We will most likely be seeing more such initiatives in the future, especially if the verdict goes against the Pirate Bay.

Bottom line is this: don’t count out old media just yet, and don’t hurry to bury the paid content model.

Jack Shafer has an interesting article in Slate this week where he argues that there is still a lot of potential yet for paid premium content. This is especially true for those services that deliver the content via applications other than the Web (think the iTunes store or the Kindle).

If you look at it this way, we can imagine a scenario where Hulu and Boxee manage to hook up again, perhaps as the two key components of a set top box type service.

IMScouting Critiques the National Squad

From our sports desk:

Yedioth Aharonot, Israel's leading newspaper, stirred up a big pile of controversy the other day. At issue was an article questioning the choices that Dror Kashtan, Israel's National Football Squad coach, has made regarding the makeup of the squad.

The national team is about to start preliminary competition in the buildup to the World Cup next year, and Kashtan has been criticized for not choosing a wide range of leading Israeli players. Kashtan has generally remained mum about his choices, leaving his assistant coach to answer the criticism with vague statements about putting together a cohesive, professional team.

Enter IMScouting. At the request of Yedioth, IMScouting put together a table of the most efficient Israeli players based on a combination of time played and goals scored or assists. In other words, a table showing how many minutes, on average, it took each player to either score a goal or assist with one.

Of the list of top ten players, it turns out that Kashtan only picked one -- Yosi Benayoun, who came in ninth on the list -- to be on the national squad. As a result, Kashtan faces even more criticism, now backed up by solid statistics.

(A Turkish newspaper did a similar exercise with Turkish players using IMScouting's database, with similar results).

This just goes to show the power of good data aggregation in a market that hasn't faced it before. Way to go, IMScouting!