Sexy Widget

MySpace and Project Playlist: 20M Users Up in Smoke?

Over the weekend, MySpace blocked Project Playlist (now Playlist.com) widgets from appearing on its site.  When Techcrunch asked about the block, MySpace's statement was as follows:

MySpace has received notices of infringement about Project Playlist at different times from several of the major music companies currently suing Project Playlist. Per our policy of taking very seriously the requests of rights holders to block access to third party sites that are believed to be infringing, we have evaluated the requests of the major music companies and determined that it is in our best interest not to allow Project Playlist widgets on MySpace, and effective immediately, we will no longer be allowing these widgets within the MySpace platform. Any third party widgets (including any music widgets) are welcome on MySpace so long as they do not include infringing content—we encourage our users to utilize the many legitimate applications found on MySpace and across the Web.

So how big of a hit is this for Project Playlist?

It's unclear, but my best best guess is that it's a massive hit.  On November 21, Playlist founder reported 40M registered users.

A "site:myspace.com playlist.com" query on Google yields more than 8.5M results.  And because MySpace offers private, uncrawlable photos, 8.5M is only the tip of the iceberg.

While I haven't found any statistics about what percentage of MySpace profiles are private, I know it's not insignificant from my company's experience with our MySpace application.  A conservative estimate of 1/3 MySpace profiles as private yields another estimated 4.25M Project Playlist widgets if you assume that their widgets appear at the same rate on private profiles as public ones.

Using this back of the envelope analysis, that's a total of nearly 13M users affected by the MySpace block.  And given that Google crawl numbers are typically understated, and that ProjectPlaylist burst onto the scene largely due to its traction on MySpace, I suspect the real hit might be closer to half.

13M to 20M users of your service zapped from one day to the next.

The last time I saw a public beatdown of a widget provider by MySpace, it was Photobucket that took the hit - and the beatdown seemed to be an attempt by MySpace to negotiate a better price.

This one feels different - given the recent news of the RIAA deciding not to go after end users, and Mixwit's abrupt shutdown, it appears to me that the record labels have shifted legal resources from harassing end users to harassing the companies that enable listening to copyrighted music for free.

If you are in the online music business, these are scary times.  The record labels seem determined not to fade quietly into irrelevance.

Facebook's Aggregation Through Federation, and What it Means for Friendfeed

I'm a big fan of Friendfeed.  As I said in a recent post:

Whenever I start to think hard about what I see as the defining trends of this mini era of the web; feeds, rivers of content, ambient awareness, and cross domain features, I get back to…. FriendFeed. The aggregation layer that sits on top. The service that can achieve an impossible level of activity (100M entries!) without even need to build its own community….while paradoxically, being able to build its own community on top of the activity streams of other services.

The problem with big ideas is that they tend to attract the big fish.  This is why entrepreneurs are often caught fielding the question "what's to stop Google or Facebook from doing this" from potential investors.

From where I'm sitting, it looks like Friendfeed has caught the attention of a real big fish, one that is growing by 600K users per day.

When I first started following Facebook closely, around the time of their platform release, it seemed that Facebook was doing everything in its power to become the Internet.  Not able to build every feature themself, they opened up a platform to allow outside developers to build features (called "apps") that would make all sorts of new activity streams available for the Facebook newsfeed.  Of course, all this activity would happen within the confines of the Facebook domain, leading some to ask if user of your Facebook app user was really your user at all.

Unfortunately for Facebook, many of the apps that prospered had more to do with viral tricks than meaningful content that could enrich a newsfeed.

In April, Facebook quietly launched an aggregation feature that in VentureBeat's words cause them to be "kinda competing with Friendfeed."  Using this tool, users could import activity streams from a handful of popular sites like Delicious and Picasa, or a blog's RSS feed. 

Facebook did this pretty half ass.  They didn't promote the feature, they limited users to one RSS feed, and they didn't put any marketing or dev might behind building out a library of importable services.

At this point, it looked like Friendfeed might be left alone to run with the aggregation layer.

But then, Facebook Connect happened.

In a thoughtful post, Om Malik discussed the "third rail of our increasingly social web": federation vs. aggregation:

The big question facing the social web depends on the direction it needs to take. A sharp increase in the number of web services and social networks has many of us yearning for a single sign-on, which has led to the idea of “federation.” On the flip side, we also want one place to manage our diverse web services in one place — in other words, aggregation. These two diametrically opposed views of how we are going to come to grips with our social web are going to face an intense debate until consumers vote with their clicks.

To Om, Facebook Connect is an example of federation:

Facebook Connect, which was announced in May and is being rolled out this week, allows you to use your Facebook login to access Facebook’s partner web sites, then broadcast what you are doing on those sites to everyone on Facebook.

I don't disagree - Facebook Connect has a big federation component to it.  However, I think this is also a big aggregation play.  Sites using Facebook Connect for login also have the option to push stories back to the user's Facebook mini feed, in effect, making Facebook a Friendfeed style aggregator.  The big jump here is that instead of aggregating silly Facebook app stories like "Lawrence threw a snowball at Hooman, would you like to throw a snowball?"  Facebook is instead aggregating real activity from real websites.

Facebook is aggregating through federation. (which brings me to Facebook vs. Friendfeed)

While Friendfeed is aggregating activity one user at a time, depending on each user to manually select their services and import their various feeds, Facebook is aggregating activity streams in batch, on a site by site basis.

And in my experience, batch usually beats one by one.  Site implemented APIs spread content faster than user distributed widgets.  Batch imports grow databases bigger and faster than do databases grown by users adding listings one by one.

And there are other advantages of batch aggregation as opposed to one by one aggregation.  Friendfeed is an early adopter service.  It appeals to folks who use lots of different services, and it is only usable by folks who know how to grab an RSS feed and import it.  Friendfeed does offer a library of importable services that makes it a bit easier than copying and pasting an RSS feed, but there's a gatekeeper element involved to get your service included in their library.

Facebook Connect, on the other hand, is self serve and can reach and affect mainstream users who might never have had the desire or expertise to sign up for Friendfeed.  Simply put, a decision made by one person on behalf of a site can drive the import of millions of stories into Facebook's newsfeeds.

Things can turn really fast in this industry.  A few weeks ago, Friendfeed was the undisputed king of the aggregators.  Now, I'm not so sure.

Why Twitter Will Implement Facebook Connect

Sexy Widget is not a news breaking blog.

That Twitter plans on implementing Facebook Connect isn't really news - especially as their CEO has publicly said that they would.

But I do think that the motivations are pretty interesting.  Twitter is a big, ambitious service with  enormous aspirations.  It's not inconceivable to think that they might one day be bigger than Facebook, and they already compete head to head in owning the status / update space.  Given these tensions, the decision for Twitter to cede some portion of their registrations to Facebook is not one to be taken lightly.

In other words, there must be a pretty damn good reason that Twitter would let Facebook own some percentage of their logins.

Here's what I think the reason is.  I think it's about the river - more specifically, setting up brand new Twitter users with friends to follow.

A few weeks ago I was at the Berkeley Play conference where Twitter co-founder Biz Stone was the keynote speaker.  During that keynote, Biz mentioned that "new user experience" was one of the company's top priorities.  He hinted at things like exploring the ability to subscribe to topics as an easy way for new users to build out a compelling content river / newsfeed.

More recently, Twitter CEO Ev Williams was quoted as saying (re: new user experience), "It's amazing anyone uses Twitter today.  Twitter is hard."

Clearly, exploring the best way to get new users hooked on Twitter with a custom river of tweets made just for them is high on the company's list.

It's not a difficult jump to see what Facebook Connect would be a tempting proposition for Twitter.  People signing up for Twitter with Facebook Connect could easily, automatically, instantaneously, be set to follow their Facebook Friends on Twitter.  With two clicks - one to initiate Facebook Connect, and one to confirm the connection - new users would not only be signed up for Twitter, but would also have a prepopulated river of content from people that they have a real world connection to.

I mentioned in my recent Facebook Connect Pros and Cons post that websites based on the follower / friend model will be intrigued by this aspect of Facebook Connect.  Twitter is no different.

On Facebook Connect and Authenticity

Justin Smith over at Inside Facebook raises an interesting point during his recent post "Facebook Connect Making Blog Comments More Authentic."

In the few days since Facebook Connect launched, we’ve noticed something: blog commenting is becoming more authentic. The presence of trusted Facebook identity is creating a context for more meaningful conversation on the web.

For example, when Facebook Connect launched on Inside Facebook, Mark Zuckerberg, several people at Facebook, and dozens of people in the industry commented on Inside Facebook for the first time. Why? Because for the first time, Facebook Connect has enabled real identity on the web. In other words, everyone knows who’s actually talking.

Justin concludes that the identity verification made possible by Facebook Connect will have a couple of positive implications for blogs:

1. If your comments are connected to your Facebook identity, you’re not going to publish things you might say anonymously.
2. Because comments connected to a Facebook identity are connected to a real person with a reputation (usually), they are more trustworthy (at least to the extent of that person’s reputation).

(I'd encourage you to click through to see the whole post, and if you haven't already, subscribe to Justin's stuff - he consistently writes a superior blog)

I don't disagree with Justin's points here.  On RateItAll we occasionally see some pretty nasty stuff - particularly in sensitive "third rail" type topics like politics, religion, and race.  We've often thought that folks would be act a bit more civilly towards each other, and measure their words a bit more carefully, if their real identities were associated with the post.

But is transparency always better than anonymity?  I would like to say yes, but practical experience might say otherwise.

Topix CEO Chris Tolles recently said during a presentation that removing the registration hurdle from an online community - in other words, making posting completely anonymous - increases the volume of content posted by 20X.  How much of this increase is due to the increased convenience of not having to register, and how much of this has to do with contributors' desire to be completely anonymous with no email, no nickname, nothing?  In this blog post, Chris actually takes on the anonymous vs. registered debate, shares some numbers, and concludes:

While anonymous posts have a roughly 50% higher kill rate, they also account for 3X the comment and commenter volume. If one asks, “where are we getting the most acceptable comments from?”, the answer is clearly the non-registered user base. As pointed out above, that there are as many registered users on Topix is partially due to offering anonymous comments.

For most user generated content sites, success is directly correlated with the volume of content created.  More volume means more activity which means more potential hooks into your site which means a faster growth rate.  If increased identity transparency among your user base slows your content creation, it may very well slow your rate of growth.

And from a user perspective, when you are faced with a reality of publishing content that will be part of your permanent, real life record, to be seen by your friends, dates, work colleagues, employers, and kids, I don't think it's farfetched to think that some folks will choose to publish less, or not to publish at all.

And what about quality?  There is certainly a strong case to be made that folks are more likely put more thought into their posts if their real life reputation is associated with their online identity. However, it's not hard to think of cases in which increased transparency might lead to decreased honesty, which might well be considered damaging to the quality of discussion.  Anyone who has been around the San Francisco tech scene knows that there is a fair amount of online backslapping done not because of any actual agreement or respect, but because of the realities of having to do business with folks that you might secretly find boorish.  Might not the conversation be more productive if more folks felt free to say what they really think?

As a caretaker of a fairly large, mostly anonymous online community, I'm excited about the possibilities of increased transparency and authenticity.  But I also know that it's going to be a big, scary jump for many of our members, and worry A) that content production will go down; and B) honesty will go down. 

In the short term, I don't think this is a make or break issue.  Services like Facebook Connect can be offered as an option, letting sites continue to provide anonymity if they choose.

But whether or not increased transparency and authenticity is a net gain or not, it's coming.  Understanding and managing the implications of this shift from anonymous identities to real identities will likely be one of the big challenges / opportunities of 2009.

Three Options for RSS to Widget Conversion

The widget landscape is changing a bit.  The company that has been converting my employer's RSS feeds into Flash widgets, MuseStorm, is shifting gears a bit to focus on agency tools.

As I see it, there are three primary service providers for converting RSS feeds to widgets as we close out 2008.

Widgetbox

One of the earliest players in the widget infrastructure space, Widgetbox offers a variety of widget and app related tools and services.  Most recently, they have been positioning themselves as widget distributors (via their widget gallery), and as a tool for blog distribution (via their blog network.).  Their Blidget tool is a very quick and easy way to convert RSS feeds to attactive, customizable Flash widgets.  I have written about Widgetbox extensively on this blog (here, here, here, here)  Here's an example of a widget created from an RSS feed using the Widgetbox Blidget tool:

Newsgator

Newsgator cut their widget teeth helping newspapers convert their content into Javascript widgets.  They have a number of enterprise class services to help publishers convert their content to widgets.  I have written about Newsgator on this blog here and here.  Here's an example of a widget created from an RSS feed using the Newsgator tool.

Springwidgets

Owned by Fox Media, Springwidgets has some nice RSS to widget conversion tools.  As their blog has not been updated since February, I'm not sure how active this business is any longer.  I have written about Springwidgets on this blog here and here.   Here's an example of a widget built using Springwidgets.

Get this widget!

Facebook Connect: The Pros and Cons

Like many online communities, my employer is considering integrating Facebook Connect.

Wikipedia defines Facebook Connect as:

A single sign-on service that competes with OpenID, the service enables Facebook users to login to affiliated sites using their Facebook account and share information from such sites with their Facebook friends.

We see the primary appeal of implementing Facebook Connect as:

Reducing the Registration Hurdle

While anyone can browse ratings and reviews on RateItAll, only registered users can post content.  The simpler our registration process, the more review content gets posted.  The more review content that gets posted, the more new visitors we attract, and the more advertising and affiliate revenue we earn.  Simply put, reducing the barriers tosignup is mission critical for our company.

Currently our registration process consists of:

- User Name
- Password
- Email address

This is about as simple as you can go without abandoning signup altogether.

Facebook connect reduces registration to two clicks; 1) clicking the Facebook Logo; and 2) confirming that you want to associate your Facebook account with the host site

As an added bonus, Facebook Connect will pull in the user's profile photo, which is a surprisingly big deal for community sites.

To try logging into a third party site with your Facebook credentials, check out this test site.

Promotion on Facebook

Anyone who has built (or considered building) a Facebook app knows that the primary incentive to do so was the promise of injecting your brand / content into a very active, very viral community.  If things went well, interconnected networks ofFacebook friends might spread your stuff to millions of new users (though it was unclear if an app user  was a "real" user ).  In recent months, it has seemed that for all but a few companies, the Facebook platform has offered diminishing returns.  A redesign has relegated applications to a separate tab, and spammy apps have caused Facebook to restrict the site's viral channels.  Finally, frequent changes to the platform itself meant that just keeping your app up required a lot of handholding.

Facebook Connect offers the same promise of viral growth, but without a few of the headaches of the FB platform.  With Facebook Connect, third party sites can push stories into participating members' news feeds.  Unlike Facebook apps which drive traffic to your app's Facebook canvas pages, Facebook Connect drives traffic from Facebook, directly to your site. 

In theory, Facebook Connect allows you to enjoy the distribution power of Facebook without the platform headaches of maintaining, distributing, and monetizing a parallel app.

Helping New Users Find Friends on Your Service

Any community that uses a newsfeed / follower format knows that connecting new users to friends is a huge challenge.  If a new user has no friends on a service, theirnewsfeed is likely to be empty.  An empty newsfeed is not a good user experience.

In addition to reducing the registration hurdle, Facebook Connect allows your service to connect new users to their friends by checking to see if any of their Facebook friends are already on your service.  The Facebook Connect example site provides a good instance of this - in my case, it found 12 of my Facebook friends that were already on the service.

So let's review - on most newsfeed sites today the new user flow looks like this:

1) user registers with email, password, user name, with possible email confirmation; 2) user is prompted to use an unsecure friend lookup by giving away their email credentials or to search friends by user name; 3) user is prompted to confirm friend status.

With a site using Facebook connect, this whole process of signing up and finding friends can be reduced to two clicks.

The Cons

The obvious downside of going all in with Facebook Connect is that you cede the registration information of some percentage of your new users to a third party, for profit company.  If your users' email addresses do not reside in your database, you lose the ability to send your users things like alerts, activity updates, and newsletters.  This can adversely impact your site's community ifFacebook Connect users can not be alerted when other users do things like send them a message, or write on their wall.  To some extent, you risk creating two classes of users of your site.

It is, however, possible to implement parts of Facebook Connect, but not others.  For example, a site might choose to implement the push / distribution aspect of publishing stories viaFacebook Connect, while still requiring their own proprietary login.   

Additionally, unlike Google Friend Connect and MySpaceID, Facebook Connect is not built with open standards.  Says data portability advocate Chris Saad:

Essentially, Facebook is trying to replace all logins with their own, and control the creation, distribution and application of the social graph using their proprietary platform.

To some extent, sites that use Facebook Connect are protected against future Facebook shenanigans by virtue of the service being hosted on their domains.  To use a ridiculous example, let's say Facebook is acquired by Microsoft and Microsoft begins charging your new users $1 to sign up to your site using Facebook Connect.  In this scenario, it would be no big thing for the third party site to just rip out Facebook Connect from their site.  Facebook Connect is a complementary registration system - it does not need to replace your existing registration, and there doesn't seem to be any implied dependence onFacebook for continued operation of your site.

Conclusion

By easing registration requirements, offering increased distribution, and solving for what to do with a new user with no friends, Facebook has come up with three very compelling arguments for online communities to take Facebook Connect for a spin.  The distribution piece in particular is brilliant - it makes Facebook both a Federator by distributing its registration system AND an Aggregator, by pulling in Internet wide activity into a central newsfeed.  It's also classic hub & spoke strategy.  Facebook is telling us site owners that they will trade us traffic for distribution of their registration system.  For all of Google's might, their lack of a central newsfeed limits the ability for Google Friend Connect to drive you traffic.

I know for many people, the fact that Facebook Connect doesn't use open standards is a big problem.  Idealogically, I don't really care as long as our site's users are not adversely impacted, and we are able to grow our business in the most efficient manner possible.  And because there doesn't seem to be any ongoing dependence built into usingFacebook Connect, it doesn't seem like an irreversible decision.

Resources:

Facebook Connect Wiki

How to Add FB Connect to Your Blog

ReadWriteWeb on promise and risks of Facebook Connect

Carnage4Life on FB Connect

What's Your Favorite Newsfeed / River Format Site?

I'm working on a big post highlighting some of the innovative things that folks are doing with a newsfeed / river format.

Sites like Genwi (RSS Reader, content sharing), Twones (music), Outside.in (hyper local content), and of course, heavy hitters like Facebook, Twitter, and FriendFeed, are all betting heavily on the feed / river format as the primary way users like to consume content.

I'm looking for less well known companies that are also embracing this format - if you are working on something like this, or know of sites doing interesting things in this area, please let me know.

Your Online Ad Business Model: Screwed, but Trending Upwards

Add this to the "does anybody really know what they're talking about" file.

Last week, The Economist Published an article entitled "Internet Advertising will be Relatively Unscathed During the Downturn."  The article talks about why online advertising is not the risky proposition it used to be, and several specific formats that seem to be doing well.  It then says:

All this makes spending on advertising much less speculative, so that it starts to be treated instead as a cost of sales. This is one reason why online advertising should suffer less than other sorts. This week eMarketer, a market-research firm, predicted that online-advertising spending in America, which makes up about half the global total, will increase by 8.9% in 2009, rather than the 14.5% it had forecast in August. The firm thinks search advertising will grow by 14.9% and rich-media ads by 7.5%, whereas display ads will grow by 6.6%. In short, online advertising will continue to expand in the recession—just not as quickly as previously expected.

Enter the New York Times.  In a provocatively titled post called "A Web Start-Up Counting on Ad Sales?  Good Luck," with an even more linkbaity URL optimization of "are-free-ad-supported-web-sites-over," the author proceeds to write an article that seemingly has nothing to do with its edgy title. 

The author starts with the case that you need traction to power an ad supported business model:

Advertising requires an audience, and that takes a few years to build. Web start-ups struggle with the question of whether to sacrifice revenue for several years, build a huge audience and then sell them ads, as YouTube did, or find an alternative revenue stream that will bring in money from day one.

From there, things start to get confusing.  It seems that the author is trying to make the point that because the overall ad market is going down, it will now be much harder to get start-ups with no traction funded, because you can't just count on advertising as a future revenue stream:

The venture capitalists that back those start-ups have different philosophies, but as a group they have grown much more cautious about backing companies that have no immediate way to bring in some revenue.

Were companies with no traction getting funded before the downturn?  I guess people like Marc Andreessen were, but folks like that seem to be the exception rather than the rule.

The author then seems to make the opposite point, by quoting Khosla Ventures David Weiden:

David Weiden, the Khosla Ventures partner who heads up tech investments for the firm, is not worried about advertising’s vulnerability — it will take a hit, he predicts, but Web sites will still be able to sell ad space.

And then:

“The ad model is somewhat worse but not radically worse,” he said. “What’s worse is getting funded that way.” If a company approaches investors with a plan to lose money for three or four years while building an audience, it will encounter many closed doors, he said. “It’s gone from plausible to almost implausible.”

From where I'm sitting, online advertising seems to be one of the few business models that is NOT falling off a cliff.  My employer's CPM numbers are up year over year, as are those of other entrepreneurs' that I talk to.  The macro numbers seem to support this observation, if you believe The Economist or eMarketer.

Is now really the time to race to a "safer" B2B model, hire a sales force, and hitch your wagon to the enterprise sales cycle?

I understand that diversified revenue models are better than putting all of your eggs in one basket.

But now is not the time to make the case that businesses supported by online advertising are in jeopardy.  If anything, network driven online advertising is the least risky revenue model available to startups in this particular downturn.  Online CPMs are projected to rise during the downturn, embedding a bit of ad code in your pages requires zero overhead, and there is no indication that folks are going to stop browsing free sites during a downturn - while there are plenty of indications that enterprises are slashing their budgets.

Maybe I'm missing something, but I think that the NYT got this one almost precisely backwards.

Interview with Search Engine World

Here's a ten minute interview with Search Engine World's Vanessa Zamora in which I talk about the fragmentation of the web, the rise of the river / newsfeed format, and the distribution power of APIs - I also plug a new version of RateItAll that is coming out shortly:

Adage: Widgets are Underused by Marketers

There's a nicely written piece on widgets and marketing in today's Adage:

...Branded widgets are the refrigerator magnets of the Brave New World. These compact, portable little software apps -- from video players to countdown clocks to makeup simulators -- are inexpensive to distribute, free to the user and (often enough) distinctly useful. At a minimum, they carry an ad message wherever they go.

That's at a minimum. At a maximum, the widget is something like the magical connection between marketers and consumers, not only replacing the one-way messaging long dominated by media advertising but vastly outperforming it. Because online the link is literal and direct, and along its path, data of behavior, preference and intention are left at every step. Oh, and your target consumers actually go out searching for your branded gimcrack. Oh, and they display it within easy reach. Oh, and they pass copies along to their friends and associates. Oh, and because they've been turned on by a friend, they are hospitable and receptive recipients. And, oh, in case this didn't quite register the first time I mentioned it, the barriers to entry are preposterously low. "The money is a joke," says Hillel Cooperman, ex-Microsoft big shot and founder of small Seattle software-development shop Jackson Fish Market. "It's a rounding error in the marketing business."