BloGiza

The online year that was

As today is the last day of 2007, it’s a little hard to resist looking back at the past year and trying to sum it up. So, I won’t resist. Unlike last year, 2007 is hard to summarize with one handy tag such as “the year of online video” or “the year of social networks”. There was a lot of activity in a number of different areas, the rise of a major player in the social networking space, and the rise of a new form of communication.

So, herewith a few highlights IMHO of the online industry in 2007

Story of the year: The consolidation of the advertising industry
Y’all thought I was going to say Facebook, right? Now, while the rise of Facebook is certainly the most hyped story of the year, my vote for the most significant development  (not to mention the biggest source of M&A activity) is the rapid consolidation of the online advertising space.

During the last 12 months, Google bought out Doubleclick for $3B. Shortly thereafter, Microsoft acquired aQuantive for a staggering $6B. AOL bought out targeted ad firm Tacoda, as well as Quigo which. Yahoo acquired Blue Lithium, as well as a majority stake in Right Media. WPP bought 24/7 Real Media. And the list actually goes on.

The M&A hyperactivity in this sector is an indication of the fact that online advertising has reached a certain stage of maturity. Beyond that, the consolidation is likely to have long-term ramifications, especially in regards to the rise of Google as the behemoth of the information age as well as the development of new business models online. And that’s what makes this, at least for me, the biggest development of the year.

Phenomenon of the year: Facebook
Obviously, I couldn’t not mention Facebook which gained momentum extremely rapidly this year and became the go-to social network for those of us who aren’t musicians, 14-year-olds, or skeevy perverts. Facebook only opened itself up to the world outside the university sphere towards the end of 2006. I joined up early this year. Before long, almost every high tech-ist I knew (and many I didn’t) was on it. Lately, the sphere has expanded further and everyone, their parents, and their parents’ friends are connected. Clearly we’re on to something.

Of course, it will be interesting to see whether Facebook will be an ongoing concern for most people or just a passing fad. I like it for business purposes, as a tool for microblogging, and as the communications platform of choice for a number of my friends. On the other hand, I have a hard time answering those who complain that there’s nothing to do there. We shall see.

New technology: Microblogging
The rise of Twitter and its clones provided us with probably the only real new media form we’ve had in a few years, viz. microblogging. At first, the concept seemed a bit stupid. After all, why would I want to blog in tiny, one- or two-sentence bursts? But then you start getting into it and discover that Twittering (or updating your Facebook status, which I tend to do more) is a nice complement to blogging for those times when you have something small and/or clever to say but which doesn’t warrant an entire post. Plus, it’s the first Internet app that makes perfect sense for the mobile. It’ll be interesting to see who snaps up Twitter and for how much.

Interesting development in local tech: The renaissance of the Israeli internet scene
Three or four years ago, it seemed that the Internet industry in Israel was close to dead. During the days of the ’99-’00 bubble, the high tech scene was awash in Internet startups looking to be the next ICQ. Then the bubble burst and most of the companies went under. Worse, the VC industry was burned on the subject and it subsequently became almost impossible to get a new Internet startup funded.

As recently as two years ago I regularly had colleagues in the VC world lecturing me that Israel was incapable of producing Internet companies and, besides, these types of investments weren’t suited for VC anyway. What a difference a few years and a YouTube (and a Facebook) later make.

Once again, we are seeing dozens of new Internet companies each month. What’s more, there is a real feeling of an Internet scene here, helped along in no small part by Facebook, the work of groups like the Co.ils and the Geek Garage, and of course Jeff Pulver’s social activities. Let’s hope this continues to develop and mature.

Case of possible overhype: Online video
I’ll catch some crap from friends about this, but the online video space has become somewhat overhyped in the last year. Actually, that’s kind of unfair. What has happened is that in the post-YouTube age, online video has become ubiquitous. This has led to a lot of noise and a sense of, “Ok, what do we do now?”

Towards the end of last year, it looked like the field of mid-tail, independently produced video content (e.g. Ask a Ninja, Rocketboom, Ze Frank) would be the next big thing. As of now, that has failed to happen. There haven’t been any real breakthroughs this year. Even projects as big and as hyped as Joost have yet to take off as a mass-market application.

I still have big hopes for this sector, but it may have to wait until sometime in mid-2008.

Predictions for 2008
You’ve got to be kidding me. Only fools make predictions in this online age where what you write will forever haunt you. Still, I’ll make some safe and predictable ones for the upcoming 12 months:

• There will be a number of huge-size Internet exits that will have people scratching their heads
• The whole notion of privacy will continue to erode as Google finds out more and more about you
• Mobile internet will remain where it has for the last three or four years, i.e. tantalizingly around the corner as the Next Big Thing
• Some technology or company that you’re not thinking about will be the big story of 2008

So, for all my celebrating friends and colleagues out there, I want to extend best wishes for the new year and hope that 2008 brings health, happiness and success to us all.

The Great Vertical Social Network Shootout

I don't know about the rest of youse guys, but I'm beginning to feel slightly awash in a sea of social networks. Don't get me wrong, I'm all for vertical social networking and I see it as one of the logical developments of the MySpace revolution.

Lately, us Israeli Internet aficionados have found ourselves spoiled for choice when it comes to choosing a social network of our very own.
First into the fray was The Marker Cafe, an online spot where tech-savvy Israeli business types could get together. A couple of months after that, the iDrink guys rolled out their site, which serves as an online complement to the real-world Internet drinking club.

Now, our friends from The Coils have brought out the.co.ils Zone, which also provides an online space for Israeli Internet entrepreneurs (as well as us investor types) to meet, talk, do business, put up photos, share links, and all that other fun social networking stuff.

Hovering above this all, of course, is Facebook which has seen an incredibly quick uptake of Israeli Internet scenesters, and which already contains an iDrink group, a co.ils group, and numerous other groups related to the Israeli Internet.

So, the question now becomes what to do with all this activity. And frankly, I'm kind of stumped. iDrink is nice, but is limited in its functionality. The Marker Cafe has plenty of functionality. It is, however, in Hebrew only which cuts it off from the rest of the world.

The co.ils Zone looks like it has a lot of potential (assuming that Ning, the platform on which the Zone is built, gets their act together and deals with its recent outages). But it will be a challenge for them to get a critical mass of people actually using the site, what with all the competition from the other sites.

What do you think?

What Facebook gets right (and what it gets right less)

Those of you who know me probably know that I've become a pretty big Facebook addict of late. I've actually never been that much of a social networking guy. I've played around with MySpace, but never really got into it. The closest I've come to being active in a social network is LinkedIn, but that has limited functionality and a narrowly defined purpose.

However, when Facebook CEO Mark Zuckerberg announced the company's new strategy to become an open platform for third-party web developers, I decided to give it a try. And I've been coming back ever since. Often several times a day.

Simply put, Facebook rocks. It has a robust set of features with user retention fairly built in. And now you can use your Facebook account as a single organizing site for all those other addictive applications -- Twitter, Flickr, de.licio.us, etc.

So, IMHO what sets Facebook apart from the competition? A couple of things:

1. Layout - In a word: clean. One of my biggest beefs with MySpace that it's such a friggin' mess. I know the kids (allegedly) like it, but I could never find my way around the place. With Facebook, everything is laid out in a nice, clear, navigatable manner.
2. Seeing what your friends are up to - Facebook's "news feed" updates you about everything your friends are doing on facebook: changes in profile, items posted, groups joined, etc etc. Among other things, it hips you to applications and groups that you might not have found. Also, it's addictive like nobody's business, and subtly encourages you to go back and check the site a couple of times a day.
3. Easily added applications - What can I say, between Facebook and Netvibes you almost never have to go anywhere else on the Internet anymore. It all comes to you
4. That "poke" feature - Useless but cute, an example of how to keep things light and fun
5. Positioning - Not really a feature per se, but Facebook seems a bit more serious (or real) a place than MySpace. Or, as my friend Chris commented, "it's about 900 percent less skeevy than MySpace."

Now, don't get me wrong, there are still plenty of things that need fixing. To wit:

1. Control over layout sucks. Unlike Netvibes, where you can move around any item anywhere, open up your own tabs, and define the number of columns you want, with Facebook the columns are fixed and there are many elements that can't be moved at all or can only be moved up and down in their respective columns. I would expect a lot more control over my customization.
2. While I love the fact that I can access applications directly from my Facebook page, I would love it even more if I could access them on my Facebook page. As it is, all third party apps open up in their own page. Which isn't so bad for some apps. But it sure would be nice to be able to Twitter without having to jump to a different screen.
3. No built-in chat feature. Yes, you can choose from about a dozen third-party apps. But come on, isn't IM a must-have these days if you want to speak to Generation Y users?
4. Other small quibbles, such as the "How do you know this person" function when trying to verify contacts. The list of options is pretty limited and reflects Facebook's past as a social network for college kids (one of the options is "We hooked up"). At the very least, give an "other" option.

In short, Facebook is progressing in the right direction but isn't quite there yet. My feeling, however, is that when they do get there they will become the social network of choice for a lot of people who don't play around with social networks yet. The kids and the indie bands will always have MySpace; the rest of us may likely be found here.