Alexander van Elsas’s Weblog on new media & technologies and their effect on social behavior

Yesterday John Furrier and Robert Scoble dominated tech discussions when they wrote about the possibility of Microsoft buying Facebook and then locking Google out of part of the web (the Facebook Walhalla that is). It seems like a possible scenario. Facebook has an incredible amount of users and is one of the largest walled gardens in the world (MySpace would be the other and bigger one). Microsoft can’t beat Google in advertisement or search, but they really want to be a serious competitor. That is why Microsoft wants to buy (part) of Yahoo now.  And if they were to buy Facebook they could possibly have access to a holy grail with 100Mln users and their interactions with their friends (e.g the Facebook social graph). They could then build search on that social graph and possibly become the “next-generation” Google. That is a search and advertisement giant on social networks. These take-over rumors have already been denied by Facebook but that really doesn’t matter much. I’m not interested in such a deal, but I am interested in the thought that some might be delusional enough to think they can lock down millions of users and confine them to a small part of the web.

There are some serious flaws in such a scheme. I named the most obvious and important one already yesterday and it’s that human nature doesn’t like to be confined (within a specific area of the web). We don’t like walled gardens and we are bound to find a way out. The argument against this (Facebook is a walled garden and has already 100Mln users) is weak as there currently isn’t a viable alternative. But there will be one once the web is divided into an open and a closed section.

But underlying this customer freedom there is another big issue at hand. The current fight between the big Web companies isn’t really about users or web. You might think its data, but that is only a trigger for something else. The fight is about control. Most web 2.0 company, with the social networks leading the pack, think they can control part of the web (and therefore part of the revenues) if they can control the data that flows through it. That is the main reason for building walled gardens, its about control.

Facebook now controls the data of 100Mln people. With that control they can decide who gets a share in the pie and who doesn’t. Scraping attempt (e.g. data removal from Facebook) gets the penalty of removal. The argument provided is that the user’s privacy is at risk, but that is a ridiculous argument. They might even believe it a bit, but underneath that argument is always the fear of loss of control.

There isn’t a single web 2.0 company that can guard the user’s privacy. It just doesn’t fit the business model they are executing (unless your main product is privacy, but then you don’t need the web 2.0 FREE business model. You can get users to pay for it the old fashioned way). In the end there can be only one responsible for data and privacy, and that is the user.

The ability to control data is highly overrated by social networks. Every network hogs the data of its users as if it were pure gold, but the real value of a social network doesn’t lie in the data. You can’t map me into a profile by hogging my data. On the web you only get to see a fraction of the real me, a public persiflage. I might even have multi facet identities, or a different identities for different things. If you are going to map advertisement to me it won’t take into account my mood of today, the things I experienced yesterday, the things that interest me right now.  You could take away my data from me, but how are you going to take away my interactions? Do you think that if I’m banned from your service or a network I can’t interact with my friends any more? There isn’t any control, just an illusion of it.

That is why a User Centric Web will be more valuable. In a User Centric Web the roles are switched. In a User Centric Web the user controls his data and the service provider does what it needs to do, provide service. No battles over data, users, social graphs, networks or walled gardens. Only battle over what matters most, user value. The service provider that provides the best service will win.

Can you feel the power of such a paradigm switch? Put the user in control means letting go of the false illusion that you as a service provider had control in the first place. It forces any service provider to think about user value, about how to be more attractive to the user than any competitor ever could be. The paradigm switch would immediately break down walled gardens and create an open space where the user can travel anywhere he wants to and take his friends and data with him.

And the great thing about it is that you really don’t need all that data to service me in the best possible way. You can provide me value without controlling my data.  If you provide me value I will even hand you the data that is needed for you to provide me value. You don’t have to guess what I’m about, I’ll tell you if it helps you to help me. Does that mean that having data has no value. Of course not. But hogging data from users and trying to control the user through that data doesn’t make sense. Context, interactions, actions, needs, emotions, experience. They are all much more important than data. I like what Fred Wilson says about this.

Social web services need not fear data portability. They need to fear others providing a better experience. Because when others do that, the flow of data moves and they aren’t in the middle anymore. They might still have your data but they won’t have you. And that’s where the value is.

And remember, just when you think you have control, a new generation of users arise and they’ll want revolution. Dear Microsoft, Yahoo, Google, and Facebook. You don’t have to control my data to provide me value.

Update

Bruce Schneier just wrote a really good essay on the issue of data and privacy. Ties in nicely with this post.

Michael Mace reports that mobile applications, or the development of software that runs on specific mobile platforms is dead. Michael Mace is an expert from the industry so he probably knows what he is talking about.  He writes:

We told ourselves that the fundamental rule of our business was: Mobile is different. But we lost sight of an even more fundamental law that applies to any computing platform:

A platform that is technically flawed but has a good business model will always beat a platform that is elegant but has a poor business model.

As it turns out developing software specific for mobile platforms developers encounter many difficulties. According to Michael Mace there are at least 10 different platforms software needs to be developed upon. The software needs certification, which costs a lot of money. But most important of all, the mobile operator has effectively taken over all distribution making it nearly impossible for a mobile software developer to distribute his software. The solution to this, Michal says, is the web:

Meanwhile, there is now an alternative platform for mobile developers. It’s horribly flawed technically, not at all optimized for mobile usage, and in fact was designed for a completely different form of computing. It would be hard to create a computing architecture more inappropriate for use over a cellular data network. But it has a business model that sweeps away all of the barriers in the mobile market. Mobile developers are starting to switch to it, a trickle that is soon going to grow. And this time I think the flash flood will last.

If you haven’t figured it out yet, I’m talking about the Web. I think Web applications are going to destroy most native app development for mobiles. Not because the Web is a better technology for mobile, but because it has a better business model.

His most important argument to support this is that on the web the domination of the mobile operators is broken. I agree with Michael on that. The mobile operators do not control development, distribution, marketing and sales on the web. For this reason Google and Yahoo have very effectively pushed the mobile operators back into their role as access provider. It is the mobile operators arrogance, coming from a world in which they had a monopoly, that has lead to failed attempts to move up the value chain. Experiments with content distribution and other innovative services have failed. Mostly because the mobile operator, unlike most web companies, never had to think about providing the user with value.

So where does that leave the user? He is stuck with the world wide web that really doesn’t fit very well onto his small mobile device.  Browsing the web using a mobile device leads to a number of problems:

1. Browsing is expensive. Current web pages aren’t optimized for mobile devices forcing the user to download a lot of redundant information. As mobile data rates are still expensive the user is left with high monthly bills.
2. Browsing is slow. I currently use a Nokia N95 with UMTS/HSDPA connection and still it takes ages to view pages on the web. Not nearly as fast as my laptop, making it a cumbersome experience
3. Inputting data is a pain. I don’t have a keyboard to type, so I’m stuck using the mobile phone buttons. The overhead is at least 50% forcing me to type way more than I want to. And I tried using the iPhone’s keyboard. It’s arguably better than using the mobile phone buttons, but I still mistype a lot, because of the small size of the keyboard.
4. The screen of the mobile phone is just too small to look at web pages. Apple has invented the touch screen and smart gesture UI allowing me to quickly zoom in/out ad move around on a page. But it really isn’t solving the problem, the UI is simply providing an optimized solution for a problem that isn’t fundamentally resolved.
5. My Nokia N95 has GPRS/UMTS/HSDPA/WiFi/BlueTooth and Infrared capabilities. While this is technically probably the best you can get right now, it isn’t simple to use. This makes (affordable) access for naive mobile users a difficult task.
6. A mobile phone isn’t a computer. It has all the technology inside that computers have too, but it is fundamentally different due to not only its size but also the way it is used. For me it isn’t a computer or a telephone. It is my remote control of life. Web developers often fail to understand the implications of this. We need fundamental rethinking of service development for mobile devices. Developers that translate web services onto mobile devices will not succeed in addressing these issues.

How can we get the mass to adopt the mobile web? In my opinion a few things need to be addressed first in order to make this happen:

1. Mobile operators need to lower their data rate plans and come with easy to understand flat rate rate plans that allow users to download and upload as much data as they want without having to pay too much for it. The operators won’t be doing that just to please us of course. But with the increased competition in mobile voice, and from access technologies such as WiFi and possibly WiMax leading to price erosion, the operators will have to rethink their mobile data strategy.
2. Hardware manufacturers need to rethink the software currently residing on mobile devices. It is too technical, too functionality oriented and is not fit to fill in my desire to make it my remote control of life. I’ve explained this earlier in a post called “We need a revolution in Mobile UI thinking”. Apple is doing a much better job than any of the hardware makers such as Nokia and Samsung and that should really make them think about what they have been producing so far.
3. Service developers need to really understand what I use my remote control of life for. It isn’t a very small computer that I use to do the same thing I can do much better on a full size laptop. My mobile device is an interaction device. I use it to interact with others. I do not (yet) use it as a TV screen. I don’t need to have all my web services on it. But I do need every innovative service that allows me to interact with my family and friends. It contains my most important address book. It allows me to send and receive messages, I can call and talk to people, and in the future I can see other people on it too. I can capture images and video with it and I might want to share those immediately with my family and friends. I want to know what the people I follow closely are doing and I want to be able to reach one or many of them without any effort on my side. I want to see all messages addressed to me or messages the people I follow find important enough to share, no matter if it is SMS, e-mail, a Tweet, IM, whatever. Sure, I listen to music on it, I surf the web every once in a while, and I even sometimes watch some video or TV on it. But not nearly as often as I interact with others on it! Once we get the interaction right, we might start thinking about other services like identification or buying and selling of stuff. But interaction comes first, always.

The desire of humans to interact and use their personal remote control for it will be large enough to ensure that mobile Internet will become successful in the end. Since the (technical, cost) barriers are still quite large I think the mass will not adopt it yet.  2008 might be the year in which a number of the issues will be addressed. We might see further improvements in usability, platform standardization with Google’s Android, improved mobile search, the breakthrough of Twitter like services to the mass, and even a few optimized mobile web based services. We will see a few (ad-based) experiments to offer free or low cost mobile services. But my guess is that mass adoption of Mobile Internet will take a bit longer. First we need people to rethink the fundamentals so that the mobile device can support the interaction between the user and his contacts better than it does now. It’s usability could be so much better!

The past few days I have watched a lot of people writing about Mobile Internet.  Not surprising as one of the most important mobile conferences is taking place in Barcelona right now and a lot of companies are using that conference to launch their mobile initiatives. I am a bit disappointed to hear what seems to be happening there right now. What strikes me most is that mobile operators simply do not have a clue how to position themselves in the mobile Internet arena. They have taken a great beating from non-mobile companies like Yahoo and Google and still really don’t know what hit them exactly. According to a post in Ars Technica even the top executive Mr Sarin of the largest mobile operator worldwide, Vodafone, doesn’t know what to do.

Mobile carriers need to step up their game and make mobile services easier to use, says Vodafone CEO Arun Sarin, lest they willingly hand over business to media giants like Google. Sarin made the comments when speaking to the press during this week’s Mobile World Congress conference in Barcelona, admitting that his industry has not traditionally done a good job in making new mobile services appealing to users. Not doing anything to fix that, will be the industry’s biggest mistake, he said.

And another quote from that article:

Mobile carriers have the experience and opportunity to keep these customers from slipping away. But in order to do so, they have to offer something up besides a means for other companies to transport data. “Customers want social networking, email, SMS, instant messaging, voice—you name it,” Sarin said. “Communication is our core business. We have to be in all of these spaces.”

Oh boy is he in trouble. Let’s see where he is coming from. Traditionally, Mobile operators have one advantage that other companies don’t have. They offer access to the mobile network. Mobile operators have the monopoly on that. They own the network and monetize users accessing it. There was never a need for the operators to even think about user experience or user services. No need to compete over services, just deliver access and use clever marketing techniques to make your mobile brand more interesting than the other mobile brands. And that is fine in a world where access and the ability to communicate anywhere is the most important user value.

The same thing happened when the Internet grew big in the 90’s. People all went to Internet access providers because they needed access. That was fine for a while, but then other companies realised that once people were on-line there was a much bigger revenue stream available to those that provided the user value in services. There isn’t a single Internet access company that has successfully made the switch from access to user value services.You still get charged for access, but you probably don’t use their e-mail service or spam filters or whatever service any more. E-mail is free and with more storage you can imagine. Other companies filled the gap with anti-virus, spam, and content services. And the Internet access companies are stuck to do what they do best, provide access. They have all tried to create their own content services and failed. They have tried to build advertisement platforms but others moved much faster. It is the penalty for a company that provides nothing more than a pretty expensive plumbing system underlying our on-line experiences.

So Mr Sarin and all other mobile operator executives can try to become user value service providers but they will fail at it. Google, Yahoo, and many other companies have already taken up that part of the revenue stream. They couldn’t be bothered by mobile networks, access technology and the like. They concentrate on what matters in the end. The user experience. Marginalising the role of the Mobile operator to what it does best, providing access.

And then I read this article which talks about a panel discussion between user experience and technology experts during the Mobile World congress. A quote from the article:

The panel, whose title was It’s the User Experience, Stupid agreed that iPhone represents a model for mobile operators to follow, but they reached little agreement on how to follow.

One direction, advocated by Lucia Predolin, international marketing and communications director for Buongirono S.p.A. of Milan, Italy, is to manipulate users by identifying their “need states” — including such compulsions as “killing time,” and “making the most of it” — and fulfilling them subliminally.

Adobe’s Murarka proposed a more technological approach to improving the user experience, satisfying the mobile phone subscriber through better interface design. Sarah Lipman, co-founder and R&D director for Power2B, suggested an almost mystical solution, somehow tapping into users’ “neural networks” to navigate a mobile phone interface “using touch and pre-touch input.”

Never, never trust an International Marketing and Communications director that wants to “manipulate” users. Or someone that wants to “tap into users neural networks”. These people do not have a clue. If this is the innovating power from the mobile industry we will remain in a mobile stone age for a bit longer.

Apple understood that usability, status, and the ability to show of yet another cool device where the first step into improving the mobile experience with their launch of the iPhone. Before the iPhone usability sucks on almost any mobile device. And I’m not the only one that feels that way. It turns out that Apple iPhone users perform 50 times more search requests than other mobile phone users. What is interesting to me, which isn’t mentioned in the source, is whether the searches are performed using the mobile network or a WiFi network. Big difference in my opinion, as the first one costs the uer money, while the second option simply turns the iPhone into a small handheld computer.

In another article it is even suggested that within a few years the number of mobile search requests will overtake fixed Internet searches. Which is true, but sort of obvious. Already here are more mobile devices on the planet than there are fixed Internet computers. If we marginally decrease the complexity to be able to access the web mobile, then people are bound to start using search engines. Good news for Google? They think so.

I do not necessarily agree with that. While more search suggest more advertisement revenues I can’t help but think that we don’t need more search. We need an entire different information access paradigm that is build upon the foundation of a small mobile device. Instead of the current “let’s copy our laptop web experience and cram it on a device with a screen no larger than a few inches and pretty unusable input interfaces”. We definitely need to improve the usability of mobile devices, but before that we need a revolution in mobile UI thinking.

Is Yahoo’s announcement of their new mobile service OneConnect the answer to this? Not sure about that. I saw a demo video of the new service that is to launch in the third quarter of this year and although it combines all kinds of social networks into a single portal, it seems rather complex and technical to me.  Sure, it’s cool they can connect all major social networks and track people on them, but in itself that is a technical solution to a problem I haven’t experienced yet.  What underlying user value has lead to this service other than “lets make sure we can connect to all these cool services so that we can get lots of users and a big market share. Can you imagine trying to set up that service on your mobile phone and actually make it work with a single button press? Now that would be a cool trick. Honestly, I did ask for such a service last year already, I still wonder if Yahoo has been reading up on my blog. They got me one thing I asked for, but forgot the other great ideas I mentioned in that post

Mobile is considered the most important growth market. Forget the Internet, mobile is where the action will be the coming years. Maybe that’s why Microsoft has replaced its entire management team on Mobile. With massive markets waiting to be unlocked in India, China, Africa, there is more money to be made on the mobile web than the fixed web. But if we have to wait for these 10 most important trends from the Mobile World congress I would say dream on. There are lots of little, currently unknown companies out there that understand human behaviour, mobile technology and user needs on the move. These companies will come with services not thought of before. And some of them will become as big as Google and Yahoo now are on the Web.

A lot of different, seemingly unrelated, things are happening right now in the tech world. Looking through different feeds most of the discussions are about:

The mash-up of content seems to be important right now. I see it everywhere. People love the idea of taking different, seemingly unrelated, bits of data to mash it up into something new and unexpected.  The latest example being the Google - Twitter super Tuesday election mashup. My tech friends all talk excitingly about the possibilities of mash ups. I seldom get enthusiastic about these development. Just because it is technically possible to combine data doesn’t mean I have to like it. It takes more than technical miracles to make me start using this stuff, daily, and integrate it into my life.

Thinking about that I realised that in one area I do like mash-ups. I often write blog posts that way. I read a lot of stuff, have all kinds of experiences with family, friends, at work, and after a while a story seems to develop itself until it draws enough attention to be written down. Often triggered by observations from the people I follow on blogs, an observation or analysis can kick start a series of thoughts that lead to a new post. And I’m not talking about the stories on TechMeme, TechCrunch or any of the other major “breaking news” blogs. No, these things happen most of the time on blogs where people actually analyse behavior, and have something to say about that.

Why am I writing all of this down? Well, because a series of unrelated events and stories I have been reading the past days have led me to write down the title of this post “Big brother is watching me”. It started with a post from one of my favorite pattern hounds, Rolf Skyberg (I’m not anywhere near his capabilities to analyse and detect patterns), who talked about an identity theft that happened to him. In a post called “W3Top.org is stealing Twitter updates” Rolf wrote:

Apparently, W3Top.org thinks it’s perfectly appropriate to take my Twitter updates, post them as part of their “100% Free online dating and matchmaking service for singles”, and create a bogus account for me with bogus friends and an even more bogus location.

He goes on and asks himself the following question:

So this leaves us with the question, who really owns my Twitters? I wrote them, posted them to Twitter, and merrily went long my way.

Twitter is quite clear about copyright of twitters in their Terms of Service:

We claim no intellectual property rights over the material you provide to the Twitter service. Your profile and materials uploaded remain yours.

According to the Berne copyright convention, anything privately created is held in copyright by the creator. Brad Templeton explains this here on his page of 10 copyright myths:

For example, in the USA, almost everything created privately and originally after April 1, 1989 is copyrighted and protected whether it has a notice or not.

So we have a copyright violation (I never granted permission for Xasa/Bitacle to republish my works), but we also have something bordering on identity theft.

By republishing my content along with my known username and avatar image, they are implying that I support and endorse their service. This is, by the way exactly what they want people to think.

Because who wants to use a dating service that nobody else actually uses?

I went on and was overwhelmed by the number of “breaking news” posts about the Microsoft bid on Yahoo, the consequences and possible counter-strikes of Google. Ways for Yahoo to get out of a possible deal with Microsoft, US elections with Google and Twitter doing all kinds of data mash ups. Both Google and Yahoo going after Microsoft Outlook with their own upgrades of e-mail packages. Google entering the mobile market in China, and so on and so on.

So the major companies are fighting it out in the open again. A lot of suggestions have been made about the  strategy behind it all. I even made some observations about that myself suggesting that Microsoft and Yahoo could easily build the largest social network ever via integration and innovation of their e-mail services and that even Google might get a bit nervous about that. Robert Scoble seems to think different. He suggests that Google is stirring up the fire to draw attention away from their attempts to jump into the lucrative mobile market.

Then I came across a really good post by Zephoria. In her post called “Just because we can doesn’t mean we should” she talks about the ease at which techies are creating mash-ups without thinking about the possible consequences for the user. She says:

I am worried about the tech industry rhetoric around exposing user data and connections. This is another case of a decision dilemma concerning capability and responsibility. I said this ages ago wrt Facebook’s News Feed, but it is once again relevant with Google’s Social Graph API announcement. In both cases, the sentiment is that this is already public data and the service is only making access easier and more efficient for the end user. I totally get where Mark and Brad are coming at with this. I deeply respect both of them, but I also think that they live in a land of privilege where the consequences that they face when being exposed are relatively minor. In other words, they can eat meals of only chocolate because they aren’t diabetic.

Read her article, it’s well worth your time. The clashes between the big companies is a fight over two things. Data and control. Who has most data and who can control it best. It is what makes Google a fortune, it is what Yahoo wanted to make a fortune out, and it is what Microsoft wants to get his hands on. And if you thought things were all quite with Facebook, it turns out they have added a few new “features” below the radar. One of them is a feature that can suggest friends to you. Facebook can do this because they “own” everything we naive users put into our Facebook accounts. I think it is a pretty meaningless feature. If I needed advice on who should be my friend, I might as well join a dating service.

But it also helps me remind myself that free always comes at a cost. Behind every free service there are hurdles of eager beaver marketeers paying huge amounts of money to collect and mash up your personal data. This giving them the false illusion that if they have access to my personal data in the social networks I participate in, their message will reach me more effectively. Marketeers are idiots of course. They shouldn’t be thinking about that. they should be thinking about providing me value, but that’s another story.

If this era on the web is to be characterised then I would say it is the era where everyone is fighting over data and data control. Big brother is watching me, with the difference that there isn’t one big brother. There are uncountable big brothers, with a few major ones that have their claws into probably 80% of our web experiences. I agree with Zephoria that this is all happening too fast without enough thinking about the consequences for the user. She ends her article with:

Just because people can profile, stereotype, and label people doesn’t mean that they should. Just because people can surveil those around them doesn’t mean that they should. Just because parents can stalk their children doesn’t mean that they should. So why on earth do we believe that just because technology can expose people means that it should?

I don’t think the collecting and mashing up of personal data can be stopped anymore. We have all been drawn into an addiction of “free”services and we are unable to get out of that advertisement trap. Web entrepreneurs can’t think up any new buisness models to compete with the free model. But it might come at great cost. I want the right to own my own data, and I understand that it comes with my own responsibility to control and use that data. I doubt any of the data hoggers is really there to protect my privacy. That is fine really. As long as we all understand the consequences of this, and we all make sure to expose only those parts of ourselves that we feel comfortable with. Remember, big brother is not only watching me, but he is also on to you!

There is a lot of talk about the Microsoft takeover attempt of Yahoo this weekend. TechMeme is flooded with blog posts about the subject. I’m not so interested in the “breaking news” factor, but I am more interested in the effects this might have on the web and its users. Both Microsoft and Yahoo have great assets, which combined might even make Google become a bit nervous.

I doubt it will be in advertisement. Google is the absolute number one in that game and it will be nearly impossible to beat them at their own game. Microsoft has large aspirations in the advertisement world, and Yahoo has performed rather poorly there given all the traffic they receive.

If Microsoft wants to create more value by acquiring Yahoo I would suggest that they start combining and innovating over one of the biggest assets they jointly would have, e-mail.  There are more e-mail users worldwide than any other web service. E-mail is, although outdated, still the most frequently used communication tool. It is more popular and has more users than all social networks like MySPace and Facebook together. Consider the possibilities if e-mail was to be updated and improved to become the ultimate social network. No need to acquire new users, simply offer the hundreds of million users worldwide the possibility to interact in a network.

I said this before in a post entitled: “Dear Yahoo, Microsoft, Google e-mail: Forget Facebook, start innovating!”. E-mail could very well be the heart of a new type of social network. Tim O’Reilly makes a similar observation in his excellent post here. It would need a major redesign though to make it fit for what users really want. In my earlier post I mentioned 9 possible improvements to make e-mail the ultimate social networking environment. If Microsoft/Yahoo would join efforts in making e-mail a social networking tool then Google would have something to worry about. And that isn’t bad at all.

Google really needs competition to keep them sharp. Should they be really worried? Well, yes, a bit. But Google also has assets that could easily be combined into great social networking tools. Let’s not forget they have GMail and chat, Orkut, Google Maps, Android, OpenSocial, RSS and Jaiku. When these assets are combined the right way Google could easily facilitate the ultimate social network, with Gmail at its heart.

It will be interesting to see what will happen the next months. Will Microsoft and Yahoo create the biggest social network ever? Will Google pick up the challenge and roll out their version of a social network? Facebook and Myspace, you better watch out!

I’m wondering if Yahoo is slowly getting back into the game. They have incredible amounts of traffic to their sites but never seem to be able to convert it into great services and loads of revenues, when compared to a company like Google.

I am not wondering about that because Yahoo might be joining OpenID, which is great.

I’m not wondering about that because they are finally starting to innovate around probably one of their biggest assets, email, with Yahoo Life (not a great name, but I understand it is under construction. I think it is a very smart move. I have always questioned why so little innovation takes place in the biggest interaction thing around since last century (yes, I’m referring to e-mail). I wrote a post about that earlier, called “Dear Yahoo, Microsoft, Google e-mail: Forget about Facebook, start innovating”.

I’m not even wondering about that because right now I’m listening to a song by Dizzee Rascals - Sirens, which is not on my computer, but it’s embedded in a new browser based MP3 player Yahoo released just now. It allows you to listen to music on web pages without having to download software, which is kinda cool and useful.

I’m wondering if Yahoo is slowly getting back into the game because it seems they have some great people on board. Remember, great companies start with great people. Jim Collins wrote in his excellent book “Good to Great” that great companies first get great people on board before they figure out where to drive the bus. I wrote a bit about that here. Yahoo’s Ian Rogers falls into that category (picture taken from his blog).

I wrote about a presentation he gave last year in a post called “Advice to the record industry: Go from distribution of music to distribution of emotions”.

I posted 5 advices there,and I think it is pretty cool that at least four of them are now being worked on by Yahoo. I said:

1. Stimulate fan interaction. Provide the fan with a platform in which he can access the music content and mash it up into something new and exciting.
2. Focus on additional content. If the music is free, why not give it to the fan for free? But lock him in with additional merchandising stuff, exclusive pictures, video’s, tickets to live concerts, contests, live chats with the band, etc. And while you are at it, combine that with the excellent branding opportunities it provides. And make damn sure it is easy and convenient for the user.
3. Think interaction. People love to interact, and a fan is more than willing to pay for it. That is why they go to concerts and listen/sing along to the music. Add the mobile platform to this.
4. How about providing the user easy ways to record and distribute his own music.
5. Provide the music for free and across any platform the fan uses. Think iPod, think mobile phone, think stereo set at home, think computer, think p2p etc. Make distribution even more convenient than it already is, and make a living of the emotions.

With the release of their browser based MP3 player Yahoo is now creating the technology to make distribution easier. They are clearly thinking about user interaction and creation, additional content. In other words, Yahoo is looking at the experience of music, not the distribution of MP3’s. And that is why I am a fan of Ian. He just wrote another excellent post as a followup to last years work.

He is acting on the assumption that the previous walled garden the music industry has been build upon has set back that same industry for over 8 years now. I like Ian’s personal mantra

“I will not invest in futile attempts to create digital scarcity. I will always leverage scale”.

Ian turns out to be a visonair in this industry where he openly discusses previous failures and now promotes an open system in which the focus is to create user value. Not just for record or distribution companies, but for everyone in the ecosystem.

Ian might get some difficult questions regarding revenues, return on investments, etc. but I’m betting that he is going to kick start a change in the music industry, and to go along with that, within Yahoo too. A change where the focus will not be to leverage scarcity, closed or walled gardens. But to leverage user value, with open systems and easy to use tooling. Ian is added to my list of  people I admire and follow for what they are crying out to the world. These people all embody leadership that ultimately will lead to a next revolution in developments and thinking.

If I would have to name one thing technology has brought us the past years it would be the ability to interact with each other. There are so many ways we can connect now that we almost need to hire a PA to manage all these connections. People love to interact. Without interaction life would be meaningless (probably why prisoners are sometimes locked into isolation). As interaction provides value, we should be looking at ways to monetize on that interaction (instead of monetizing on ads). The ability to interact is in my opinion the most important value driver for any service.

There are so many examples of interactions creating value. When writing this up I remembered a Harvard Business Review study about eBay. It turns out that people that joined the eBay community buy and sell more stuff on the eBay site, than people that are not part of the eBay community. Approximately 80.000 people were asked to join the eBay community, 3300 became active users, and 11.000 became lurkers. Revenues after one year of following these people increased up to 56% with eBay profiting several million dollars from the increased trading of both active community members and lurkers.

Or what about the study here, that tells us that in 2012 4,81 Bln mobile users will sent approximately 3,7 trillion SMS messages to each other, That is an average of 769 SMS messages per year, or 2,1 SMS messages per user per day, leading to $ 67 Bln SMS revenues. BTW, the largest mobile growth is to be expected in Asia.

Why do people love to watch video’s on YouTube or look at Facebook most of their time. In my opinion it is not the “sit back and watch” or “entertain me” behavior we all display when watching TV. I bet that every time we are at YouTube or Facebook it provides us with thoughts, ideas, memories or experiences that we can communicate about. It is this communication that makes the experience valuable. Sharing this crazy video with a friend and have a laugh about it. Looking at this dorky or very cool person on Facebook and talk about that with friends. We just can’t help ourselves. We need to communicate.

A recent study in Canada shows (again) that people that download music using peer 2 peer technology (in other words download illegally) buy more CD’s than people that don’t download music. Bands are now bypassing the “old”music distribution and distribute music themselves, even leaving the responsibility to pay for it with the user. Why does it work? Because it leads to interaction. Interaction between the band and its fans. Interaction between the fans, and interaction between the fan just downloading the music and his non-fan friend which he now tries to convince how incredibly cool this band is. Focusing on the interaction in music provides an experience that in itself will create value.

Why then, when people display such obvious needs to communicate, do web 2.0 business models not leverage this interaction directly? It is because the web enforces disjoint metrics upon us. Actually Google is probably largely responsible for this. Their PageRank has made us all into traffic slaves. When providing commercial services on-line it is all about having a high PageRank, about users being able to find your service and then view it. In order to be noticed, what better to do than provide cool services for free? But someone always has to pay the bill. And the way to do this, orchestrated by large media companies like Google, Yahoo, Facebook, is to create advertisement revenues. The metrics are easily manipulated leading to possibilities to fraud the system. Before you know it we are back into the advertisement bombarded TV world again. But advertisement does not increase the value of interaction. It doesn’t provide real value when two people are connecting (”this message was sponsored by..”). And people have found effective ways to get around it, using the remote control zapping away, or using DVD recorders to fast forward advertisement. On the Internet, most users will simply ignore ads, like a blind spot. This leaves only those that create massive amounts of traffic to their sites to actually earn some revenues in advertisement (there is always some fool clicking on an ad). I’m not naive, advertisement will always be there, but I don’t think it should rule our interactions.

The things is, people will interact, no matter what. Why not focus on increasing the value of the interaction itself. Let people pay for the interaction, instead of trying to monetize something on the side that doesn’t ad value to this interaction. It goes against all rules of web 2.0 business models. It might be a barrier for people to join a service when everything else is free. You are probably scaring of both investors and advertisers with this approach. But, if you provide real value to a user, and you are able to get that message to him, isn’t it worth a try? You know there is one piece of knowledge that supports you taking that disruptive step. The conversation never stops.

Short update:

Just after posting this I saw Tom Foremski posting a message that there is a growing distaste by VC firms of web 2.0 companies.

For example, Kleiner Perkins Caufield & Byers, Silicon Valley’s leading VC firm, has stopped investing in Web 2.0 startups. “We have absolutely no interest in funding Web 2.0 companies,” says Randy Komisar, a partner at Kleiner Perkins. He mentioned this during an after dinner conversation last week. He said he had recently told John Battelle, one of the organizers of the rapidly growing Web 2.0 Summit conference, that the term no longer had the same positive cachet it once had. In the VC community it clearly has a negative one.

Sounds like we are perhaps on a turning point? Maybe this will trigger startups to step out of the usual business model and come up with exciting new services and equally exciting new revenue models.

After the dust clears from the Google answer to Facebook’s popularity, and the first applications of the new APIs are already showing up, it is now the time to start analysing what should happen next.

Let’s get one thing straight. Google might get a formidable position in social networking land with their “one ring that binds them all” called OpenSocial. But Google still needs excellent application developers to start using the infrastructure they will provide through their OpenSocial APIs. The most important challenge will be if we can develop user centric services instead of network centric services. I have written a number of posts on this earlier, for example “The flaws in web 2.0 and how to correct” and a followup to that “Design of an Open Social Interaction Network: Human Needs” describing some of the human needs that are to be addressed.

In this context I came across a few posts this morning that drew my attention.

Chris Messina wrote a really excellent piece called “OpenSocial and Address book 2.0: Putting People into the protocol”. In this piece he talks about a topic that I have written about a lot. The observation that services are build the benefit of the service creator, not for its user.

The future is in portable, independent identities valid, like Visa, everywhere that you want to be. It’s not just about social network fatigue and getting fed up with filling out profiles at every social network you join and re-adding all your friends. Yeah, those things are annoying but more importantly, the fact that you have to do it every time just to get basic value from each system means that each has been designed to benefit itself, rather than the individuals coming and going. The whole damn thing needs to be inverted, and like recently rejoined ant segments dumped from many an ant farm, the fractured, divided, shattered into a billion fragments-people of the web must rejoin themselves and become whole in the eyes of the services that, what else?, serve them!

He goes on and envisions a future in which this relationship is inverted completely:

Imagine this: imagine designing a web service where you don’t store the permanent records of facets of people, but instead you simply build services that serve people. In fact, it’s no longer even in your best interest to store data about people long term because, in fact, the data ages so rapidly that it’s next to useless to try to keep up with it. Instead, it’s about looking across the data that someone makes transactionally available to you (for a split second) and offering up the best service given what you’ve observed when similar fingerprint-profiles have come to your system in the past.

And while you are at it read his original post “People in the protocol” as well. Chris used to work at Flock. No wonder he is able to come up with such a list. Only few seem to really understand the power of the web browser in service development. It is by definition user centric, not platform or destination centric. It is a tool that will help solve the issue that the Internet does not evolve around you now.
Another interesting post was written by Doc Searl called “Free Customers make free markets”. He writes in response to a post by Dave Winer who proposes that the next change will be to free the user:

When we have free users, we won’t ask companies to “let me control” my data. Instead, we’ll ask “What data of mine will I let this or that company use.”

Think about what it means to be a “user”, and what a “user” is.

Because companies are users too.

The idea behind this challenge isn’t to put the shoe on the other foot, but to put proper shoes on both feet.

We need real relationships here. Not the kind where one party has the exclusive power to “let” the other party have rights, data or anything else. Not the kind where one party has to beg the other party for their freedom. Not the kind where “Customer Relationship Management” consists of “capturing”, “managing” and “owning” customers as if they were cattle.

Then I came across a small article that talks about Yahoo’s plans with social networking. Nice one. I challenged Yahoo, Google and Microsoft earlier to start innovating on the concept of e-mail as a social networking tool instead of copying Facebook, and it looks like Yahoo is on it (I doubt I put them on it though :-))

So what does all of this mean? To me these are important signals. Acknowledgement of influencial bloggers that we desperately need to rethink business models currently used in many web 2.0 companies.

OpenSocial will fuel a fire that cannot be stopped once some serious developments evolve using these APIs. Developments in which the user is standing in the center as the most important person to be served. Not the network, not the service creator, not even the almighty Google.

The user is back, and he won’t be ignored this time!

Short update: Google is announcing right now that MySpace joins the OpenSocial camp. According to TechCrunch they have been working on it in secret. Well, it is good news for the user, now we wait and see if Facebook will open up under this pressure.

With all the jittering and twittering on Google buying Jaiku some interesting posts might not get the attention they deserve.

First there is the excellent post by Ian Rogers (Yahoo Entertainment) on  8 waisted years in the music industry.

Then there were several more announcements (here) after Radiohead took the lead in letting the fans decide what to pay for their latest album. I already wrote a piece on the disruptiveness of that measure here.

Sounds like we are going into an exciting new phase of the music industry. If anyone can alter the worthless defensive strategies the industry came with from the inside it would be the bands and their fans!

I’m pretty excited about this. Music is a powerful emotions, communication and community driving factor. Let’s see what services will pop up in the next few months. It wouldn’t surprise me that the illegal downloading of music can be diminished to a small factor by creating the services people actually want, instead of treating them as thieves who cannot be trusted.