There’s not much description required here: the concept is simple, and executed elegantly. We Are Hunted is a great site for a Friday - a fun and fresh way to explore new music, filtered by Twitter. You can listen to everything, and follow purchase links to iTunes, Amazon, and “InSound.” I’m having a great time with it and discovering lots of new tunes - and I bet you will too.

“Ning had 4.7 million unique visitors as of January and surpassed 1 million social networks — about one-fifth of them considered active — last month.”[CNN]

So: that’s 4.7M visitors, divided into 200,000 active social networks. Do the math: that’s 23.5 visitors per social network per month.

Ok, this is a simplistic analysis - but the likely truth is that a very small number of networks probably account for the vast majority of Ning’s userbase and traffic. Not necessarily a bad thing from a business model standpoint, but not in line with global commons image portrayed to CNN either.

Image: Gina Bianchini, CEO of Ning - credit to CNN/Ning.

At the end, I draw one important lesson out these four examples: the value of evangelism.

Incidentally, this isn’t meant to be read as rude or snarky, and I have nothing but respect for anyone that can produce anything remotely useful online — and I’m certainly guilty myself of lots of half-baked “start-ups” that were (or are) conceptually questionable, and that by and large I’ve allowed to wither and die.

So - sit back and enjoy a brief reprieve from the new and exciting, and remember…

Teqlo.com

A widget building platform, Teqlo offered essentially a web-based IDE and centralized distribution model. Now replaced, I suppose, by things like JQuery.

Teqlo was the topic of my very first post - 5 Tips to make Teqlo a Survivor. Unbeknowst to me, I happened to choose what was at the time one of the VC communities most visible Web 2.0 proponents - Jeff Nolan. It was a great post as it bought a tonne of interest to my blog very quickly, and introduced me to great people like Zoli Erdos. My blogging career has essentially been downhill since this very first post.

So it was for Teqlo too, though. I don`t think they even had time to implement any of my five suggestions before Jeff Nolan famously fired himself in a well-timed exit, short months before Teqlo through in the towel entirely. Jeff came away looking noble for falling on his own sword, Teqlo faded into oblivion.

Current State: Teqlo.com still has the Teqlo favicon and HTML page title, interestingly enough. So, wherever its hosted hasn`t been repurposed or whathaveyou. The site is dead as a doornail, though - all it does is spit out 404`s in frames.

Status: DONE.

Me.dium.com

Ho ho - I’m so clever, as evidenced by my snappy, succinct post title - Me.dium is Ma.rginal. Me.dium offered what I thought was a profoundly perplexing visualization to accompany your browsing. If, for example, you were at TechCrunch.com, you could see, floating in a cloud, which other Me.dium users were also there, and then presumably connect on the basis of your common interest in TechCrunch. Me.dium kicked off with a bang in 2007 with $15 million in funding (!).

Apparently, I wasn`t the only one that found it to be more my.sterious (ha ha) than useful. Me.dium leveraged its user base and the availability of the Yahoo! BOSS platform last summer to start a foray into “social search.” Using the browsing habits of its members, Me.dium offered search results with a layer of social filtering. That lasted until November of 2008, when the Me.dium brand was abandoned in favour of OneRiot - a “real time” search engine that appeared to drop technological ties to Me.dium, abandoning the tracking plugin.

OneRiot persists to this day, with regular posts to their blog and a good looking traffic curve. OneRiot is currently threatened by Google and Twitter, both juggernauts vying for the real-time search title.

Current State: Me.dium.com now redirects to OneRiot - a realtime search engine. Does it reuse any of the technology behind Me.dium? Doesn`t look like it.

Status: Re-branded, and alive.

Persai.com

An easy target, this one. Persai was founded by the bombastic & obscene trio behind the caustic tech blog Uncov.com. I reserved a particularly witty post title for this one: You say Per-say, I say Persai - let’s call the whole thing off. Snort.

Persai launched late 2007 / early 2008 as an interest-based newsreader/recommendation engine. That is to say, you told it your interests by selecting a few keywords, and it would display a content stream customized for you. As you read or disregarded Persai’s selections, they system would refine its recommendations. Given the amount of heavy-duty-sounding math (who am I to judge) that cluttered the now-disappeared Persai blog, I had been expecting great things.

By July of 2008, the Persai brand was dead, and the technology re-purposed into a blog search engine called Pressflip. Pressflip still exists, having sense been re-positioned as another real-time search engine. It looks to be suffering.

October of last year saw one of the founders throw in the towel. The Pressflip Tumblr blog has one update, from April. The Pressflip Twitter feed stopped being updated about a month ago too.

Current State: Persai.com redirects to Pressflip.com. Pressflip looks like its dying on the vine. Uncov.com is dead too.

Status: Re-branded, and bleeding out.

Cluztr.com

At one point, I thought Cluztr was going to be the next big thing. Cluztr is a social browsing tool, that predated things like the DiggBar by years. Its conceptually simple - surf away, let the Cluztr plugin capture your clickstream, and then use that data as a basis for making social connections and discovering content that you may like.

Cluztr’s simple, looks pretty good, but is a ghost town - its traffic is now less than some of my project’s, which is a bad thing.

Additionally, all of the activity on the site is driven by a very few users. Cluztr seems to be a perfect example of a site that had potential - but never achieved critical social mass, and lacking an active evangelist (last blog content about Cluztr is from 2007), has since died on the vine.

Current State: Still exists.

Status: Stagnant.

Summary: Key Learning

Looking at other’s successes, failures, and evolution is a great way to gain insight into how-to achieve your own goals or tweak your own sites & strategies. The biggest take-away is the simplest: if whatever you’re doing isn’t taking off, twist it into a “real time search engine.” Hah. In all seriousness, there’s one big thing that I would take-away from these examples:

Have an evangelist in your corner. Its easy to poke fun at hard-to-define roles like social network or “community” manager, but sites like Cluztr - which offered unique-at-the-time technology, really show the need to have someone “out there” (on the internets) working for you. They’re the one updating your Twitter feed, emailing bloggers, and talking up MSM journalists. Without that public voice, it doesn’t matter how cool your service is.

IMHO, Sony suffers from the same corporate gigantism that afflicted GM - an over complex portfolio of products catering to an everything-to-everyone market strategy that by design results in mediocre entries across the board. So long as there’s no Apple (or Toyota) waiting in the wings to swoop in and steal entire markets with vastly superior products, everything is fine - a company like Sony could sit and milk cash cows. But such days in consumer electronics are over, and companies like Sony with bloated strategies and slow reactions are unable to keep up with trends, much less make them.

Saving Sony is a huge job, likely involving restructuring and divesture, and I’m not going to pretend that I have slightest clue as to how to go about doing any of that. I will, however, offer my grassroots observations, and share below 5 moves that I think Sony could make to improve responsiveness and focus their efforts on segments in which they stand a chance of winning.

1. Cede the PMP market to Apple

Its incredibly painful, but now is no time for corporate hubris, Sony. The Walkman brand is diluted to the point of worthlessness, and years of mediocre product offerings, goofy file formats, and painful desktop software have poisoned the Sony brand in consumer’s minds for MP3 players. Mounting an assault on Apple from the current position of brand decrepitude is a non-starter. Plus, you have a viable, under-invested platform for mobile media in the PSP - so quit wasting development and marketing resources on a market you’ve comprehensively lost.

2. Enough with the freaking Memory Sticks

I like Sony cameras - I like their lenses, and their form factors - but I’ll never buy one because their consumer range still requires ridiculous memory sticks (example). SD & CF are the consumer standards. Memory Stick just alienates any consumer who knows better. And, Sony is aware of this fact: the Alpha DSLR’s all take Memory Stick or Compact Flash; the implication is the prosumers are worthy of standard formats, while mainstream consumers are a ripoff target.

Every R&D dollar that Sony invests in creating another ludicrous Memory Stick variant is a dollar that’s also working against them in the market. While Memory Stick manufacturing may be profitable on a quarter-to-quarter basis, the format is poisoning the Sony brand in the minds of the consumers that matter (i.e.: the tech savvy influencers). Its time to get realistic (ditch Memory Stick) and innovative (built in EyeFi functionality, please).

3. Start iterating the PSP model line

The PSP was unveiled in 2004. Since that time, it has enjoyed no substantive changes, recieving only a single aesthetic refresh. In the same period, Apple did the following with the iPod:

• 2004: Intro’d the mini
• 2004: 4G ipods
• 2004: iPod photo
• 2005: Intro’d the shuffle
• 2005: Bumped Mini capacity
• 2005: iPod Color consolidates previous model lines
• 2005: iPod Nano
• 2005: 5g iPod Video
• 2006: 2g Shuffle
• ETC ETC ETC

That’s constant iteration, offering more features and capacity at the same pricepoints, year after year after year. Apple’s strategy drives repeat purchases and keeps the brand fresh and exciting. Sony’s strategy… stagnates. A good companion in lousy follow-up would be the Motorola RAZR. The PSP had all the makings of a great ecosystem platform: wifi, big screen, flexible software — but Sony let the fire go out. Its not to late to jumpstart the PSP, but Sony is in danger of losing mobile media & gaming to the iPod Touch and iPhone.

4. Stop Selling the PS2 and chop the price of the PS3

There were headlines over the weekend about how the PS2 continues to outsell the PS3 on a regular basis. Why is Sony cannibalizing their own sales? If PS3 profitability depends on installed base, why are they not making sure everyone walks away with a PS3? If Sony’s media ecosystem depends on the PS3, why is it still priced out of range?

Please note that Microsoft does not sell the original XBox anymore. Nintendo no longer sells the Gamecube. There’s a reason for this: grabbing profit margin on out-of-date hardware sales makes no sense when your long-term strategy depends on installed base.

5. Invest in Sony-Ericsson

How is it that the one-time mobile media powerhouse of the world has come to be the co-owner of an entirely lacklustre, generic, and unintersting family of run-of-the-mill feature phones? How is it that Apple is seizing mobile market share (partly) on the strength of gaming while Sony can’t even get a Playstation Phone out the door? Check out this release about a Playstation Phone coming by Christmas… of 2007. What happened there? How about this patent filing from 2008 - what ever happened to that phone?

Combine this point with #3 above. A PSP refresh is a natural fit for an S-E investment, and apparently someone over there knows this, judging from the patent filings. Its time that Sony & Ericsson put aside the political and budget squabbling that apparently afflicts their relationship and actually produced something of note.

That’s it from me - what about you?

If you read this far, you must have an opinion on my points, or points of your own for Sony - please share them in comments.

My initial reaction is to oppose; if it were the 80’s, I’d be similarly upset about a law to wiretap VCR’s and punish people playing dupes. But - its not the 80’s. Music can be downloaded legally and inexpensively from a variety of sources, and now freed of DRM, can be played anywhere. Free, legal music is available from a variety of sources too (Spotify, MySpace, etc.). Movies are not as far along, but aren’t far behind either. The moral/technological justifications for piracy are losing their meaning.

So really, I’m not opposed to a three-strikes system (more on France’s implementation). It certainly seems more reasonable than extorting payments from downloaders RIAA-style. And, I’d rather have a government agency identifying and communicating with me than a corporation.

But: is France’s move a good one? No. There’s something intuitively unsavory about it. Michael Geist points out that the law allows for guilt by accusation, with “guiltiness” being ascertained without court involvement. This last bit actually runs afoul of EU legislation.

The whole thing is awkward. The three-strikes concept loses all of its credibility without judicial weight behind the assertion of guilt; but, to involve the courts in every case places far too much weight on the judicial system. There isn’t any way around it in our traditional legal framework, which is why everyone’s commenting on the legislation without offering any alternatives.

What if there were a way to create a non-traditional judicial framework, however, tailored to processing these cases extremely quickly? I’m thinking of red light cameras, for instance, that dispense with much of the overhead of legally processing a speeding ticket, but that still allow for a courthouse dispute should the defendant wish to defend themselves.

In many ways, the two legal situations compare very well. Where I live, red light cameras confer a fine - but no legal penalty. This is a nod to the fact that anyone could be driving a vehicle captured by camera, but that ultimately its the vehicle owner’s responsibility to choose who they give access to the vehicle, what they do with it, and who pays a fine. Should someone receiving a camera ticket wish to dispute it, they can do so via the traditional court system. An internet equivalent would acknowledge the responsibility of the owner of an IP address (the account holder), without assuming that they are the individual actually doing the downloading (driving).

The key difference is that France’s internet law involves disconnection - akin to the police seizing your car after three camera tickets even though its your kid driving it. That’s the part that bother’s the EU too - disconnection without judicial process denies people the right to communicate for what may be arbitrary reasons. So - what about switching France’s law from disconnection to fines, and backing it with a legal framework similar to that used around camera tickets? Three strikes, then fines, graded to encourage account holders to proactively manage their network, supported by education (’Network Security for Residential Internet Customers”), with the option to plead “not guilty” at any point and engage the judicial process? Disconnection could follow unpaid fines - but in response to an account holder being guilty of not settling fines (by either paying or taking the case through due process) - not because they’ve been accused of file sharing.

Now, I know that as many people hate red light cameras as hate restrictive internet laws. So: tell me why I’m wrong, and why my plan stinks too.

Red Light Cam: Houston Clear Thinkers.

Witness Microsoft’s latest stab at the PMP/Phone market. (1) They are still schlocking the same, tired, rejected, rental model that has failed to ignite anywhere else, (2) they’re using false logic, apples-to-oranges comparisons, and spurious endorsements to do it. I’m not going to get in-depth on the campaign - Ars wraps it up nicely - “The ad does make a point, but I doubt it’s going to be one that resonates with many.”

…it’s really an argument between two business models — à la carte vs. subscription — that the market has so far settled in Apple’s favor. [Apple 2.0]

Back to Microsoft & GM. Consider MS’s Zune & digital music moves. The PlaysForSure fiasco. The Vista fiasco. The Microsoft “search” strategy. MS’s tentative, ill-conceived, and over-valued investment in Facebook. Origami & the UMPC fiasco. WinMo and its absolute defeat by Apple. I’m sure anyone could add a bunch more to this list without breaking a sweat. This latest Zune push is the most recent in a long line of marketing & product misfires.

MS is “successful” at this point because of its market dominance in a few aging/threatened segments, and is depending on those cash cows to finance its fumbling, flailing, directionless attempts to find relevance in the Internet Era (exception: XBox). The MS reliance on office productivity software and aging desktop OS’s is not too different from GM’s long dependence on  Cavalier and fleet sales.

As noted, IMHO MS has avoided GM’s fate mainly by virtue of not having historical legacy debts and ridiculous union contracts. That being said: MS could benefit greatly by taking a strategic look at their product portfolio and pruning some branches, as GM is doing or has done with Oldsmobile, Pontiac, Hummer, etc. Pruning allows for energy & dollars to be invested in products with a chance of success; painful though it may be to cede some markets to competitors, it only makes sense. Recommendation: Start with the Zune.

Which begs the question, who’s going to own the space by building the first desktop App Store? I’m looking at you Adobe. I’m envisioning an “Air Market” with similar bells and whistles to the iPhone App Store - Free and Paid, seamless account integration, a quality-enforcing (and no-doubt controversey-generating) approval process, a good updating system, and fun-to-explore categories. Adobe takes X% as a cut, developers get the rest, and everyone’s happy.

Where’s Adobe on this? Or Microsoft for that matter? Why hasn’t Apple extended the App Store off of phones and iPods and onto OSX?

A decent App Store infrastructure for desktop apps would also go a ways to mitigating the most common compliant that I received about my earlier post: No one wants a profusion of apps clutering up their desktop. And yet, we embrace that profusion on our phones, because those apps exist within a well-managed infrastructure — there’s no reason the same couldn’t be implemented on desktops.

EDIT: When your done reading this, you should read the follow-up post “Where are the desktop App Stores?”

This article on the NYT’s Adobe Air newspaper reader I think highlights a trend that iTunes started: pulling applications and content back out of the browser. It makes sense:

• Apps can provide a better user experience than generalist browsers.
• Apps help companies “own” the user relationship - branding, formatting, metrics, and the like.
• They also enforce loyalty, or at least habitual usage - the presence of an icon on your desktop or in your Start menu is a powerful call to action.

Were also at a juncture where there are platforms robust enough to handle many of the headaches of multi-platform development. The NYT Reader app, for instance, is developed in Adobe AIR - the NYT doesn’t care if you’re on Vista 32, XP 64, Sp1 or 3, or whatever - Adobe handles it. That simplicity, combined with the user facing points above, make apps a compelling proposition, and I think we can expect to see more such apps over time.

Was the Browser was a Blip?

In a way, you can think of the web browser as a clunky proto-app platform that allowed for (with the exception of browser differences) platform independent development at the cost of clunky HTML-limited implementation and laggy operation. Most people will acknowledge that browsers are often less than ideal.

Interestingly, I believe its really mobile apps that have highlighted browser’s shortcomings, and app platform’s ability to address them. On my iPhone, for instance, reading the Globe and Mail is vastly superior via the Globe and Mail app compared to getting to it via the browser. A similar user experience on my desktop would welcomed - a fact recognized by the NYT.

If you want another example, consider Amazon or eBay. In my mind, each of these would benefit greatly from an iTunes style app implementation. Speed (pushing processing to the client, and transmitting less data), superior UI design, better account integration - essentially every element of the buying experience has the potential to be improved.

Final point: apps lend themselves to business models more than browsers. Witness the simplicity of the iTunes buying experience. Beyond the UI & account integration potential of apps, its also a conceptual difference: I would be that pulling users out of the browser, where the expectation is “free,” and into an app environment would significantly increase conversions.

The bottom line is that apps offer the potential to improve user experiences in any setting - mobile or desktop - and modern, evolved IDE’s reduce the cost of development. Expect more organizations to recognize this, and apps to proliferate.

A few other implications spring to mind. More jobs for developers. A proliferation of apps, followed by a consumer backlash as desktops become cluttered, followed by some Apple App-store-esque organization scheme.

EDIT: When your done reading this, you should read the follow-up post “Where are the desktop App Stores?”

Times reader pic: JK On The Run.

Rupert Murdoch sounds off

What I would suggest, however, is that Murdoch’s assertion that “content” has gotten short shrift in the internet age is false. What Murdoch needs to acknowledge is that historical profit levels enjoyed by MSM are a combination of profit derived from content, and profit derived from distribution.

From printing press to paper route to doorstep, traditional media have owned and profited from the paper pipeline - tacking a margin onto the scarcity imposed by the “last mile” problem.

What the papers have seen in the erosion of their profits is not the devaluing of content, but the devaluing of their distribution network as presses and hand-delivery have been supplanted. I would argue that the cost/price/profit of content hasn’t changed at all, but that newspapers are now looking to content to replace the margin previously enjoyed from distribution. I don’t have the numbers to back up this assertion, and perhaps its off-base - but on some level it makes intuitive sense.

And with that sense comes coping strategies. Imposing the artifical scarcity of paywalls on content is not one of them.

1. Transition to paperless.

At their core, newspapers are “news” organizations. The value they deliver is from collecting and analyzing the news; their competitive advantage comes from having the networks in place to gather more relevant news faster, and the people in place to analyze and package that news for their audience.

I would love to see the budgets for a newspaper: for each dollar spent internally, what percentage directly goes to supporting the core functions of reporting and newsmaking? What percentage goes to delivery drivers and call centers? What percentage goes to leasing printing presses? To maintaining warehouse space?

Printing and distribution are not part of this core; they are vertical integration that history has imposed and technology has devalued. Now is the time to divest expensive assests and distribution overhead (over, perhaps a 24 - 36 month transition period, ensuring continuity in ad sales, and spreading the write-down over several quarters). Close the administrative departments, the circulation desk, the call center. Layoff the paper boys & girls (sorry kids). Anticipate the paperless future and proactively move towards it.

Why has CNN never launched a national newspaper? There’s a reason CNN is online and on TV, and not in a newsstand. Distribution is dead. Distribution is overhead that takes dollars away from the core.

2. Reinvest in marketing.

Ad sales. Business model innovation. How did newspapers lose classifieds to Craigslist and eBay? How can an industry fail so completely to capitalize on their leadership position, and in doing so forgo huge profits and entire business models? By underinvesting in marketing, both the sales team, and the strategic side - that’s how.

Ad sales teams need to be looking at ways to move local advertising online, and bring more national advertising to the local level. Doing either requires bodies - sales people to work the phones, and strategists to give them something to sell.

More to Say

There’s plenty more to talk about on this theme, which I’ll hopefully develop in later posts. In the meantime, though, ponder the notion that newspaper profits have been artificially inflated through-out the industry’s history by profit-taking on distribution and non-core vertically integrated capabilities. The corollary is that the value of content is now being rationalized, and current revenues may be the new equilibrium. If that’s the case, what strategies do papers have to no just survive, but grow?

More Discussion:

PaidContent (UK) lists good reasons why the paywall won’t work: the genie is out of the bottle, and consumer expectations are set.

Teleread relates historical price-sensitivity in the newspaper industry to the modern web age.

TechDirt questions the ability of moribund newsmakers to provide enough motivation for free-cultured web consumers to pay for anything they offer.

MediaMemo questions Murdoch’s digital strategy and the “danger” of getting locked into a single platform - as the music industry has with iTunes.

Techgeist tells it like it is: we are too cheap and spoiled and probably should be paying for some things with actual dollars, not just eyeballs.

The Equity Kicker sums it all up and points out that Murdoch’s good at what he does and may be right.