ISM Signpost #28
04.08 ISSUE 28
*** Growing Pains ***
*** Ask and you will find ***
*** Search me ***
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+++ The social scene +++
AOL acquires Bebo
Time Warner’s AOL is battling to regain relevance with the $850m acquisition of Bebo, the social networking site. It is the portal’s biggest acquisition in several years and signals that AOL is banking on social networking’s key role in online advertising as it attempts to transform its business model from subscription into a portal supported by ads.
Although Bebo has a strong presence in the UK, it is dwarfed by US competitors like MySpace and Facebook. Based in San Francisco, Bebo had 22 million visitors worldwide in January, compared with MySpace’s 109m and Facebook’s 101m, according to comScore Inc. About 11m of Bebo’s 40m registered users are in the UK, and it has announced plans to launch sites in France, Germany, Spain, Italy and the Netherlands this year.
But the risk for AOL lies in whether the huge traffic on social networking sites can be transformed into real revenues. AOL has responded to sceptics by quoting figures from eMarketer predicting that by 2011, $4.1bn will be spent by advertisers around the world on social networks, up from just $480m in 2006.
Additionally, Bebo has established a distinctive identity among other social networks as a place for professionally-produced media content such as the KateModern online soap opera. It has also been successful at enabling users to incorporate video clips into their profiles.
AOL plans to twin Bebo with its chat services AOL Instant Messenger and ICQ, creating a platform that it says will reach 80 million unique visitors around the world. It is also planning to apply its own technology to Bebo’s community, using the data that Bebo users enter into the profiles they create about themselves to help better target ads both on that site and on the network of websites where it brokers ads.
Of course the irony lies in the fact that social networking stole customers away from a previous generation of communication tools exemplified by AOL’s messaging tool. AOL’s chief executive, Randy Falco believes that social networking lies at the roots of his portal. “It was really invented here at AOL. We let it get away from us,” he said.
+++ Growing Pains +++
Facebook hires COO from Google
As Facebook swiftly matures from a ‘hot’ start-up into a corporation that needs to grow revenues and find a better business model; Sheryl Sandberg, Google’s VP online sales and operations has joined as COO.
Sandberg, who has worked at Google for six years, will report directly to Facebook’s CEO, 23 year old Mark Zuckerberg, who founded the social networking site four years ago. Zuckerberg is reluctant to hand over the CEO role, according to those in the know. The founders of Google, Yahoo and eBay all handed the reins to outsider CEOs within three years of founding their companies.
Meanwhile, Amazon has launched two new products aiming to pull Facebook’s network into its retail environment. Amazon Giver and Amazon Grapevine ties Amazon’s own wishlists and product reviews into Facebook’s pages.
A Facebook user who adds the “Giver” application to his or her online profile can then view other users’ Amazon wish lists, and link through them to make a purchase at Amazon’s site.
The Grapevine application will automatically update a participating Facebook users’ online friends if he or she adds items to their own Amazon wish list, or writes a product review on the Amazon site.It is hoped that these ‘social shopping’ applications and the use of artificial intelligence techniques will make online shopping more engaging.
Last year, Microsoft invested $240 million in Facebook, valuing the startup at $15 billion. According to comScore, Facebook had 101 million visitors in January 2008, up from 25 million in January 2007.
+++ Ask and you will find +++
Ask.com’s new strategy
Ask.com is retreating back to basics in the US. It now plans to refocus on what it does best – searches framed as questions, rather than single words or phrases. It is planning to launch new products and enhance its technology through efforts like pulling in more community-generated answers.This follows last year’s efforts to broaden its appeal to a more technology-savvy audience by offering search results that combine text, video and maps all on one screen. In the US, Ask’s audience are predominantly middle-American, female consumers who like to tap in a particular question to the search engine It is not yet known how this change in strategy will filter down to Ask’s European operations. There have been reports that Ask is considering seling a stake in its European business to a media company. Apparently, talks of a joint venture with broadcaster BSkyB fizzled out.
Ask is owned by IAC, which is currently battling to disentangle itself from its majority voting shareholder, Liberty Media Corp. If the breakup goes ahead, Ask will become IAC’s flagship brand, meaning all eyes will be on the success of its new strategy.
+++ Search me +++
My Mahalo launch
My Mahalo, the new social search engine, is attempting to build a bridge between social networks and search. The beta service enables users to import ratings and reviews from other social media sites and share them with their contacts on Mahalo Social, similar to Yahoo’s delicious.
When users search on Mahalo, they will be presented with content first from their friends, followed by the most trusted Mahalo users. So a search for the film Fargo will show you how many of your friends have seen the movie, how many want to see it, how many reviewed it.
Instead of having to visit several social media sites to find the various comments, ratings, reviews and other content your friends have created, Mahalo users can see all of that information in one place, if their friends have imported their data into Mahalo.
Users who have installed the Mahalo toolbar will be asked when they visit another social media site whether or not they’d like to import their content from those sites to Mahalo. Mahalo users build trust by recommending links, and by having those links accepted by the Mahalo guides and added to a page. At launch, My Mahalo will feature five types of content: places & trips, products, music, movies and books.
My Mahalo is part of Mahalo.com, the human-powered search engine that was launched last year by Jason McCabe Calacanis, former founder and CEO of Weblogs, sold to AOL in 2005.
Daily search industry updates can be found at http://news.isearchm.com.SIGNPOST is published monthly by ISM Ltd.
The opinions expressed are those of the Editor and not necessarily those of ISM Ltd.
All material Copyright 2008 ISM Ltd. All rights reserved.
