An unlikely trio: Slide’s valuation, NY legislation and the Economist?

First there was Friendster, then MySpace, then Slide, then Friendfeed, and then FriendFeedFeed (a highly comical spoof I might add)….what do all of these companies have in common.

They all are trying to one up the other at what is considered a valuable attention point online: what are your friends or “top” friends doing online. The belief being that if this is an origin point online for users, it’s best to own that origin point (see “Google” and “search revenues”)

Untold riches, perhaps, go to the company that can migrate users around the web and create group influence in terms of buying. What’s the value of a click from the search term, “Chicago hotel” when I (I being Slide, Facebook, Friendfeedfeedfeedfeed) can bring you a number of users who are purchasing in Chicago hotel rooms in unison.

This is the basis of both Facebook and Slide’s valuation.

A contrarian view is taken in an article from the Economist today: http://www.economist.com/business/displaystory.cfm?story_id=10880936 suggesting that there are no riches here, citing a comment by Charlene Li (a very sharp Forrester analyst).

It is set-up as follows: “But should users really have to visit a specific website to do this sort of thing? “We will look back to 2008 and think it archaic and quaint that we had to go to a destination like Facebook or LinkedIn to be social,” says Charlene Li at Forrester Research, a consultancy.”

And this brings us back to yesterday’s news regarding user tracking and services and it is important to define two things here:

– the web is not about destinations or web sites as the Economist and Ms. Li might suggest, but it is about structuring data in a format that scales (see: Facebook) and tracking and providing functionality with how people use that data. Whether Facebook, for example, suffers a catastrophic loss of traffic is irrelevant, the question is, can it’s users be tracked, reported on, and provided with functionality around data in realtime.

It only matters that it is easy to “manage the relationship of data to provider (my friend, x website) at Facebook.

– Point 2: Do users want to pay for content or will they accept advertising to get it for free?

As the current Web would attest, they want it be free and supported by advertising. If this is the case, then value for social network or “social network managers” (slide, etc) will somehow be figured out.

This is undoubtedly true if you look at the history of media and especially that history online. Here are some examples off the top of my head:

– magazines, where users pay for the right to receive targeted content. I actually pay to get the Outside magazine holiday gift issue. It’s amazing. 

– Napster, where the ability to get content for free trumped all models. With iTunes, users are paying for the content, but not paying for the iTunes service.

Or you can merely ask yourself a question like: Would I pay for Google?

This post is still rough and I will be updating it and editing it throughout the day.

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