eBay Helps Finance Businesses in the World's Poorest Countries

EBay has launched MicroPlace, a global microfinance site that provides loans to businesses in some of the world's poorest countries. It is similar to the Kiva.org service that has been operating for the last 2 years, which has already providing more than US$13 million in funding. MicroPlace and Kiva are noble initiatives that hopefully will be replicated by other businesses and entrepreneurs who are looking to give back to the global community. It'd be fantastic to see these companies really take off and do well.

New eBay site lets people finance the world's poor

By Jonathan Stempel, 25 October 2007, Reuters
(Additional reporting by Eric Auchard in San Francisco)

EBay, the world's largest online auctioneer and payments company, launched on Wednesday a Web site allowing ordinary investors to buy securities aimed at improving conditions in the world's poorest countries.

MicroPlace will allow people to invest as little as US$100 to support development in impoverished areas.

So-called microfinance is the supply of loans, savings, insurance and other basic financial services to low-income households and businesses, typically without collateral. It is often conducted in emerging economies, where people cannot typically obtain bank loans.

Microfinance is at work in more than 100 countries, and is generally provided by financial institutions or wealthier investors. It gained wider renown last October when Bangladeshi economist Muhammad Yunus, who pioneered it in 1976, and the Grameen Bank he founded won the Nobel Peace Prize.

"Capital markets are just waking up to this asset class," Tracey Pettengill Turner, the founder and general manager of MicroPlace, said in an interview. "This is different because it is the first Web-based service for the everyday investor to invest in microfinance, and earn an investment return while addressing global poverty."

Turner said she has worked in Bangladesh, and worked at Grameen in 1998 after graduating from Stanford Business School. She said she sold MicroPlace to eBay in June 2006.

Another microfinance site, Kiva.org, said last week it has built a $13 million loan portfolio in its first two years to help about 20,000 entrepreneurs. Other sites include Finca International's http://www.villagebanking.org and Accion International's http://www.accion.org.

TRACK RECORDS

MicroPlace chose the Calvert Social Investment Foundation to offer its first 10 securities, where funds are designated for such countries as Cambodia, Ecuador, Ghana and Tajikistan.

The securities mature in two to four years and, despite lacking credit ratings, yield just 1.5 percent to 3 percent a year. That's below the 3.8 percent yield on similar maturity U.S. Treasuries, which have essentially no credit risk.

Turner said issuers "generally have very good track records, often with 10 years in investing in microfinance with no history of defaults." She added that the issuers often set aside reserves to limit potential credit risk.

Investments may be made through eBay's PayPal service, or a regular bank checking account, and investors are assessed no fees, commissions or expenses. Prospectuses are available online, and MicroPlace is regulated as a brokerage by the Financial Industry Regulatory Authority.

Turner said MicroPlace makes money from charging issuers to list. "We aspire to break-even, and if and when we reach profitability, eBay intends to reinvest any profits back into its own social initiatives," she said.

Catherine England, a spokeswoman for San Jose, California-based eBay, said the program will be "not material" to results at the online auctioneer and payments company.

Microsoft Buys 1.6% of Facebook

Microsoft has pulled out its rather large wallet and given Facebook US$240 million for a 1.6% stake in the business. This would seem a sound move as a competitor blocking strategy and potentially to integrate Live Search into Facebook (similar to the $1 billion + deal Google has with MySpace). However, two considerations also come to mind: will this see a merger of MSN's content, Hotmail and IM properties into Facebook? And if not, did Microsoft pay too much? Only time will tell.

Microsoft trumps Google to snare Facebook stake

The Sydney Morning Herald, October 25, 2007

Microsoft will take a $US240 million ($267.66 million) stake in the wildly popular social-networking website Facebook as part of an expansion of the strategic alliance of the two firms, the companies said on Wednesday.

The deal to buy a 1.6 per cent stake values Facebook at $US15 billion ($16.8 billion).

Today's news comes less than four years after Mark Zuckerberg started the online social networking site in his Harvard University dorm room.

Besides validating Zuckerberg's decision to rebuff a $US1 billion takeover offer from Yahoo last year, Microsoft's money should be more than enough to pay for Facebook's ambitious expansion plans until the privately held company goes public.

Zuckerberg, 23, has indicated he would like to hold off on an initial public offering for at least two more years. In the meantime, Facebook hopes to become an advertising magnet by substantially increasing its current audience of nearly 50 million active users, who connect with friends on the site through messaging, photo-sharing and other tools.

The deal means Microsoft will become the exclusive third-party advertising partner for Facebook, and will begin to sell advertising for Facebook internationally in addition to the United States, the companies said.

"We are pleased to take our Microsoft partnership to the next level," said Owen Van Natta, vice-president of operations and chief revenue officer at Facebook.

"We think this expanded relationship will allow Facebook to continue to innovate and grow as a technology leader and major player in social computing, as well as bring relevant advertising to the more than 49 million active users of Facebook."

Reports said the deal came after fierce competition between Microsoft and Google.

The Facebook investment represents a coup for Microsoft because it provides the world's largest software maker with a toehold on one of the internet's hottest platforms and a potentially lucrative forum for selling online ads.

With the Facebook investment, Microsoft dealt a rare setback to Google, which had previously trumped its bitter rival in earlier bidding battles involving AOL and internet ad service DoubleClick.

Although News Corp's MySpace.com remains the largest social network, Facebook has been growing at a far more rapid clip during the past year.

Facebook attracted 30.6 million US visitors during September compared with 68.4 million at MySpace.

In September, Facebook was the 6th most visited property worldwide with 73.5 million unique visitors (aged 15 and over), and the 5th most highly trafficked property worldwide with 34.5 billion page views, according to ratings agency comScore.

The agency said Microsoft's social networking equivalent - called "Windows Live Spaces" - attracted an audience of 9.8 million.

MySpace follows Facebook in Becoming an Application Platform

In a long-awaited move, MySpace has followed in the footsteps of rapidly growing rival Facebook in offering a "platform" that application developers can build upon. Despite have millions of more users, MySpace has struggled in 2007 to match the pace of growth and hype that Facebook has generated. It will be interesting to see what quality of applications are developed for the MySpace platform - will we see more of the silly (but popular) applications Facebook is known for or more serious consumer and business applications? My expectation is that with the power and resources of News Limited/Fox Interactive Media behind MySpace, a number of high-quality "seed" applications will be produced to get them ahead of Facebook.

MySpace makes move on Facebook

Michele Gershberg and Eric Auchard in San Francisco, October 19, 2007, Australian IT

NEWS Corp's MySpace, the world's largest online social network, said it will allow outside developers further access to its service to counter the growth of smaller rival Facebook.

News Corp chairman Rupert Murdoch joined MySpace chief executive Chris DeWolfe to make the announcement before Silicon Valley's internet elite and answer questions about the media conglomerate's digital future.

"We are opening our platform in the next couple of months," Mr DeWolfe said, confirming months of speculation that MySpace would follow in the footsteps of Facebook, which emerged as a serious competitor after allowing software developers to create applications for its users.

At the same time Murdoch signalled lower expectations for MySpace revenue in the company's 2008 fiscal year ending in June, suggesting it may not reach a previous forecast of over $US800 million ($893 million).

"I might say $US750 (million) but it's at least 30 times what it was the day we bought it two years ago," Mr Murdoch said at the web 2.0 Summit in San Francisco. "If we keep that trajectory going like that we'll be very happy."

Mr Murdoch's acquisition of MySpace for $US580 million in 2005 crowned him as the smartest media executive at the time, once rivals realized the potential of its growing base of users for promotions and advertising.

But privately held Facebook has surged to a strong second place in the social network world since it opened its site a year ago beyond an original base of college students and started allowing in May independent software makers to build applications for users and profit from it.

"There's been so much excitement, energy and growth on the part of Facebook," said Forrester analyst Charlene Li. "There's a lot of pressure on MySpace to capture that energy."

While MySpace remains the leader with nearly 110 million users, Facebook's rapid growth to over 47 million members has made it a new media darling, with media reports pegging its potential value to investors as high as $US15 billion.

"I would say we're different (than Facebook) and in spite of all the hype we seem to be growing faster," Mr Murdoch said.

Asked what he thought of such a valuation, Mr Murdoch added: "What it really does is it tells you that News Corp is totally underpriced."

News Corp is the publisher of The Australian.

For four years MySpace has allowed users to embed features from other websites by pasting bits of code on their MySpace pages. But Facebook's open call to developers has already attracted 6,000 independent applications to its site.

"YouTube, for one, basically generated all their early traffic on MySpace," Mr DeWolfe said of the company's traditional willingness to let other web companies build businesses on MySpace. YouTube is the online video unit of Google.

Mr DeWolfe said he was seeking to create a far more lucrative environment for outside developers on MySpace than currently exists on Facebook, where so far advertising opportunities for independent application developers are limited.

"The idea will be to allow outside developers to tightly integrate their applications into MySpace," Mr DeWolfe told Reuters following his on-stage appearance.

Software programmers will be able to control key aspects of how features like photos or user authentication work, allowing them to build more complex web services than the restrictive approach MySpace has employed to date with outsiders.

Importantly, the company plans to give developers control over advertising that runs on the web pages they create to host new services on MySpace. "There is going to be paid revenue opportunities for all the developers," Mr DeWolfe said.

MySpace also plans to take steps to protect its users from potential security problems or overload created by a sudden flood of new applications. It is setting up a "sandbox" version of the site for 2 million users who elect to get early access to new applications while they are still in test mode.

Mr DeWolfe also said he and MySpace co-founder Tom Anderson have signed up for an additional two-year contract. He did not disclose financial terms.

MySpace had already taken steps to bulk up its presence and showcase its technology expertise, opening an office in San Francisco this week with about 50 employees and plans to expand its team to about 200 people within the next year.

Dotcom Bust 2.0?

For those of us who went through the pain of the first dotcom bust around the start of the millenium this will all seem familiar - huge valuations on companies that are just not making money.

Dot-com fever stirs sense of déjà vu

By Brad Stone and Matt Richtel, International Herald Tribune
Published: October 16, 2007

SAN FRANCISCO: Silicon Valley's math is getting fuzzy again.

Internet companies with funny names, little revenue and few customers are commanding high prices. And investors, having seemingly forgotten the pain of the first dot-com bust, are displaying symptoms of the disorder known as irrational exuberance.

Consider Facebook, the popular but financially unproven social networking site, which is reportedly being valued by investors at up to $15 billion. That is nearly half the value of Yahoo, a company with 38 times as many employees and, based on estimates of Facebook's income, 32 times more revenue. Google, which recently surged past $600 a share, is now worth more than IBM, a company with eight times more revenue.

More broadly, Internet start-ups are drawing investment based on their ability to build an audience, not bring in revenue - the very alchemy that many say led to the inflating and undoing of the dot-com bubble.

The surge in the perceived value of some start-ups has even surprised some entrepreneurs who are benefiting from it. A year ago, Yahoo invested in Right Media, a New York company developing an online advertising network. Yahoo's investment valued the company at $200 million. Six months later, when Yahoo acquired Right Media outright, the purchase price had swelled to $850 million.

What changed? According to Right Media's co-founder Brian O'Kelley, very little, except for the fact that Microsoft and Google were writing billion-dollar checks to buy online advertising networks, and Yahoo felt that it needed to pay any price to keep up.

"I have to say I giggled," O'Kelley, 30, said of Yahoo's acquisition, which earned him $25 million. "There is no way we quadrupled the value of the company in six months."

The trend is described as a return to madness by skeptics or as a rational approach to unlimited opportunities presented by the Internet by true believers. Greed, fear and a desperate rush to pick the next big winner are all adding fuel to the fire that is Silicon Valley's boom. "There's definitely a lot of betting going on, and it's not rational," said Tim O'Reilly, a technology conference promoter and book publisher.

O'Reilly, who is credited with coining the phrase "Web 2.0," said he thought that Silicon Valley was creating a new set of society-altering tools. But that has not stopped him from worrying that the industry is now minting too many copycat companies, half-baked business plans and overpriced buyouts.

When the bubble inevitably pops, he said, "there are going to be a lot of people out of work again."

Putting a value on start-ups has always been a mix of science and speculation. But as happened in the first dot-com boom and the recent surge in housing, seasoned financial professionals are seemingly indulging in some strange instinct to turn away from the science and lean instead on the speculation.

This time around, people indulging in that optimistic thinking are not mom-and-pop investors or day-traders but venture capitalists whose coffers are overflowing with money from university endowments and hedge funds. Many of those financial professionals say everything is different this time.

More than 1.3 billion people around the world now use the Internet, many with speedy broadband connections and a willingness to immerse themselves in digital culture. The flood of advertising dollars to the Web has become an indomitable trend and a proven way for these new start-ups to make money, while the revenue models of the dot-coms of yesteryear were often little more than sleight of hand.

"The environmental factors are much different than they were eight years ago," said Roelof Botha, a partner at Sequoia Capital and an early backer of YouTube. "The cost of doing business has declined dramatically, and traditional media companies have also woken up to the opportunities of the Web. That does open up the aperture for a different outcome this time."

Some trace the start of the new bubble to eBay's $3.1 billion acquisition of the Internet telephone startup Skype in 2005. EBay's chief executive, Meg Whitman, reportedly outbid Google for the company. EBay acknowledged this month that it had overpaid for Skype by about $1.43 billion, and Niklas Zennstrom, a Skype co-founder, left the company.

Google's acquisition of YouTube last year for $1.65 billion, under similarly competitive bidding, may have accelerated the transition to loftier values. Google executives and many analysts argued that YouTube was well worth the price tag if it became the next entertainment juggernaut.

It still might. Over 205 million people visit YouTube each month, according to the research firm ComScore. Still, Citigroup recently estimated that YouTube would bring in $135 million in revenue in 2008. At that rate, the number of videos watched on the site would have to grow 1,642 percent before YouTube accounts for just 5 percent of Google's revenue.

"We are almost going back to year 2000-types of errors," said Aaron Kessler of Piper Jaffray. Internet companies, he added, "are buying users instead of revenue and profitability."

The Skype and YouTube windfalls helped to give the newest batch of Internet entrepreneurs their dreams of improbable wealth. They also brought back practices that were seemingly discredited during the first boom. For example, in the first dot-com gold rush, Internet companies did not have to demonstrate to investors that they could make money. Now that once again appears to be true.

Twitter, a San Francisco company that lets users alert friends to what they are doing at any given moment over their mobile phones, recently raised an undisclosed amount of financing. The company is not focused on making money and no one in the company is even working on how to do so, said its co-founder and creative director, Biz Stone.

"At the moment, we're focused on growing our network and our user experience," Stone said. "When you have a lot of traffic, there's always a clear business model."

That is not necessarily illogical in the current climate. A European competitor, Jaiku, also devoid of income, was bought last week by Google for an undisclosed sum. With the competitive logic that prevails at the major Internet companies, the deal may have further raised Twitter's appeal to Google's rivals.

The high value placed on many startups and minimal requirements for financial performance are raising expectations of other entrepreneurs. Sharon Wienbar, managing director of Scale Ventures Partners, an investment firm, cited the $100 million valuation that investors recently gave to the Internet genealogy site Geni.com, founded last year in Los Angeles by a veteran of PayPal. "Now every entrepreneur thinks he should get that," Wienbar said. "I have a feeling a lot of entrepreneurs are secretly meeting for beers on the Peninsula, saying, 'Hey, look what I got."'

O'Kelley, the Right Media co-founder, said other entrepreneurs had begun to think that the financing game was best played by avoiding actual revenue, since that only limits the imagination of investors. "It's a screwed-up incentive structure, just like you had in the first bubble," he said.

Another company benefiting from the exuberance is Ning, which allows users to create their own MySpace-style, ad-supported social networks. It was recently valued by investors at more than $200 million, mainly because its main backer and founder, Marc Andreessen, has a successful history with the Internet hits Netscape and Opsware.

Andreessen has argued on his blog that there is no bubble and that the high prices represent a rational desire to stake a claim in the potentially huge markets of the future. He also says companies that create mass-market hits always find ways to make money.

But he acknowledges that a seemingly inexhaustible flood of capital into Silicon Valley is helping to power the boom. Venture capitalists are flush with cash from institutional investors, eager for Internet-style returns on their money. That money has to go somewhere.

"The upward valuations pressure," Andreessen said, "is the result of decisions being made by people wearing suits in cities like New York and Boston who would never ever meet with start-ups. If that ever goes away, it will have consequences. But it doesn't look like they will change their minds."

Facebook Providing Start-up Funding for Application Developers

Here's a very interesting development from the Facebook team. Eager to drive smarter applications (YES, we're all very sick of Vampire and Pirate requests!) and of course revenue, Facebook are providing $10 million in almost no-strings-attached funding.

Facebook announces “fbFund” - grants for developers

Posted by Steve O'Hear, ZDnet.com

In a keynote conversation with Mike Arrington at the TechCrunch40 conference, Facebook founder and CEO Mark Zuckerberg announced that the company will be offering grants to budding Facebook platform developers, through its newly formed “fbFund”.

Administered and funded ($10 million) by VCs Accel Partners and The Founders Fund, grants of between $25,000-$250,000 will be open to anyone interested in creating a startup based on the Facebook Platform. The grants will not come with any conditions except that the grantee use the funds to build Facebook applications, and that Accel Partners and The Founders Fund will have first refusal in any future round of funding. In other words, this isn’t cash for equity, although one other condition apples: only individuals or companies who have not raised any formal venture funding, qualify.

Applications will be reviewed by the fbFund committee made up of Mark Zuckerberg, Facebook founder and CEO, and Chamath Palihapitiya, Facebook vice president of product marketing and operations. Facebook board members Jim Breyer (Accel Partners) and Peter Thiel (The Founders Fund) will also be part of the committee. Additionally, the fund will rely upon an advisory council that includes Reid Hoffman, founder and chairman of LinkedIn; Josh Koppelman, founder of First Round Capital; and Rajeev Motwani, professor of computer science at Stanford University and early advisor to Google.

Why is Facebook doing this?

In their words: “We are forming this fund to help grow the Facebook application ecosystem. By decreasing the barrier to start a company, we hope to entice an even larger group of people to become entrepreneurs and build a compelling business on Facebook Platform. We hope this is also a funding model that other venture capitalists will follow.”

So, as per all of Facebook’s recent strategy, it’s all about firming up the notion of Facebook as a platform. If developers and entrepreneurs can be enticed, with a little financial and advisory help, to develop for Facebook first, then Facebook’s business model will benefit. What interesting about the Facebook platform is that the barriers to entry are already pretty low, so a fairly no-stringed attached grant, even as little as $25,000, could go along way.

Picking up on the Facebook statement above, in which the company says that they “hope this is also a funding model that other venture capitalists will follow”, the newly formed fbFund certainly makes other venture capital that is aimed at Facebook developers, a little less attractive.

US Consumers Watching More TV Online

Here is a very interesting statistic from the US: 16% of households who use the Internet are watching TV shows online. Even more interesting, the key reason behind this growing trend is that people are wanting to avoid TV commercials. I'd suggest this is an opportunity for alternative content producers (i.e. not TV stations) to use the Internet to gain an audience or for existing broacasters to multicast via TV and online (and ideally wireless to mobile devices too).

Consumers Watching More TV Online

Personal Convenience and Avoiding Commercials Key
By R. Thomas Umstead -- Multichannel News, 10/15/2007 10:35:00 AM

Nearly 16% of American households who use the Internet watch television broadcasts online, according to a report released Monday by The Conference Board and TNS.

The Consumer Internet Barometer survey says more than three out of five online TV viewers cite personal convenience as the major reason for watching TV broadcasts online, while more than one-third choose online viewing in order to avoid watching television commercials. Other reasons sited include portability and a preference for computer viewing.

“Although online television viewing is still not a widespread phenomenon, the proportion of users has increased since 2006 and is likely to increase over tie, given consumers’ love for entertainment,” said Lynn Franco, director of The Conference Board Consumer Research Center.

Online users catching up on missed content have increased to 42% from 30% a year ago, according to the report, which is based on a third quarter survey of 10,000 households. Consumers viewing entire episodes on the Internet have doubled, and now approximately half watch their favorite shows online.

“One reason that personal convenience is the top reason for online viewing is that much of the same content available for television viewers is also available online,” Franco said.

The top methods for viewing broadcasts online are streaming and free downloading, according to the report. About two-thirds of viewers stream online content, while more than 40% download content for free.

“Over the next few years, the growing popularity of viewing TV episodes/shows online is going to have a huge impact on the way brands and advertisers communicate with viewers,” TNS executive vice president of technology, telecommunications and media Shari Morwood said in a statement. “If advertisers can effectively leverage the online video platform, we should see much more interactivity and emotional connections between brands and he online TV viewing audience.”

TV-Quality Internet Platform From Joost Is Another Headache for TV Stations Around the World

Here's another headache for TV stations around the world. With the launch of the Joost service (from the people behind Skype) there's now a TV-quality alternative that allows content creators to distribute their shows, films, music videos, etc. to a global audience. This is an opportunity for content creators (think US and UK broadcasters like Fox, BBC, etc.) to reach a broader audience but it doesn't bode well for TV stations around the world, whose business model is directly tied to broadcasting someone else's content...

TV-quality online network goes live

Audrey Stuart, Cannes, October 15, 2007

THE world's first TV-quality online television network went on display at last week's MIPCOM audiovisual trade show offering legal, free entertainment and raising questions about what this will mean for the massive TV business.
The network, Joost, launched this month just ahead of a clutch of competitors that include Italy's Babelgum, offers legal rather than pirated entertainment for free.

"The internet will start off showing traditional entertainment but eventually users and content creators will use the capabilities of the internet to create some amazing entertainment," said Mike Volpi, who heads up Joost.

Many mighty internet operators, such as AOL, MSN and Yahoo are investing heavily in making their own TV shows.

Media giant News Corp, publisher of The Australian, has spent a fortune buying into massively popular internet social networking site MySpace, and has launched MySpace TV, which will be available in over 12 countries.

And telecommunications companies around the world are investing in IPTV television packages packed with satellite TV shows, as well as video-on-demand that customers can watch on their sitting room TV sets, and pay for in their telephone bill.

The TV and digital media industries are right to be concerned, experts at MIPCOM said, as no one really knows how the current explosion of new ways to watch and interact with television will evolve.

But everyone remembers how the internet quickly changed everyone's lives.

Mr Volpi said over two million users had already downloaded the Joost application needed to use the fledgling TV service, which has been recording more than 100,000 downloads a day since it started on October 1.

But "it's early days," Mr Volpi cautioned, adding that the length of time users were staying on the channel varied enormously from region to region - though it was upwards of 20 minutes.

In the US, TV fans were opting for comedy and sci-fi, while in Latin America, and Brazil in particular, music videos were tops. Europeans were going for full-length feature films.

Mr Volpi said Joost aimed to remain a free service funded by advertisements and hoped to attract more creative, interactive ads.

As to content, he said users could look forward in the future to big-branded TV series as well as a vast library of older TV shows along with the mass of user-generated content on services like YouTube.

Joost would get a huge boost if Volpi succeeds in persuading major TV channels to put "fat belly" crowd-pulling shows such as "CSI" and "Survivor" and major sports events like major league baseball.

But that looked unlikely here, where the world's broadcasting heavyweights this week were busy explaining they were moving into the internet space themselves to increase and keep audiences.

BBC Worldwide digital media head Simon Danker said its popular motoring show "Top Gear" made a big hit on Yahoo Japan after it failed to get a spot for the show on Japanese television.

Leslie Moonves, chief executive of US broadcasting giant CBS, said his company is starting to create original programming for the web as well as exploring other opportunities.

Google's First Move into Applications You Take With You

While speculative, Google continues to eye the future. And that future is portable applications - particularly those that can be accessed via mobile or social networking sites.

I expect that Google's purchase of Jaiku (a competitor to Twitter) will be the first of a number of acquisitions of a social networking or mobile application focused on the growth potential, rather than a purchase of a company with real revenues and a solid business model. While there's certainly a "dotcom boom" feeling of the late 1990's, there's little chance that such an acquisition won't turn into revenue gold for Google.

Google Buys 'Micro-Blogging' Service Jaiku

Similar to Twitter, another broadcast messaging platform to social networks, Jaiku has become popular with a small subset of the digirati in this country.

By Richard Martin, InformationWeek, October 9, 2007 01:00 PM

Continuing to build its portfolio of mobile services and applications, Google(GOOG) Tuesday said it has purchased Jaiku, a Helsinki-based provider of "mobile social networking" features. The terms of the acquisition weren't disclosed.

Founded in February 2006 by Finnish entrepreneurs Jyri Engestrom and Petteri Koponen, Jaiku allows users to continuously update their "activity stream" (brief telegraphic messages on their current whereabouts and doings) over PCs, laptops, or mobile phones. Perhaps more important, it also gives "presence information" of other users -- i.e., their current availability and the status of their mobile phone. Jaiku software divines a person's location from nearby cell towers.

Similar to Twitter, another broadcast messaging platform to social networks, Jaiku has become popular with a small subset of the digirati in this country.

"On the surface, Jaiku looks a lot like Twitter," wrote technology publisher Tim O'Reilly on his blog recently, "but it's far more than that."

The Jaiku presence-aware technology could be integrated with existing Google products such as Gmail, Google Talk, or unified communications application GrandCentral, also acquired by Google earlier this year. Google's search technology also could be applied to make the Jaiku user experience more powerful.

Without commenting on specific plans, Google product manager Tony Hsieh wrote on the company's blog, "We plan to use the ideas and technology behind Jaiku to make compelling and useful products."

The Jaiku acquisition is the latest in a string of Google purchases of mobile applications providers including GrandCentral (bought in July) and Zingku (another mobile social networking provider, bought last month). Google also has partnered with Sprint Nextel to create a "mobile portal" for the wireless carrier's WiMax network, currently under construction, and has said it will likely bid in the upcoming FCC auction of valuable spectrum in the 700-MHz band.

On Monday, Google said it will expand the market for ad-supported online video beyond YouTube by enabling Web site publishers to run YouTube videos, accompanied by ads, on their own sites.

Social Networking Applications - Breaking the "One Site, One Service" Paradigm

Personally, I'm a big fan of Facebook. Particularly with the whole concept of the integrated applications and "widgets" that can be accessed on your profile page and, very importantly, shared with friends. Clearly the quality of applications will improve over time but what's particularly exciting is that Facebook (and other social network sites) applications present a new opportunity: multiple entry points into a service.

For example, traditional "dating" sites require you to log into a website conduct a search and communicate via that site. You will receive notifications via email and there may be an option of receiving information to your mobile phone. But essentially it's a limited service that requires you to be on that website to do anything useful. If a Facebook application were developed by that dating service to send a feed of potential partners/matches to your Facebook page, it would catch you when you're in that "social mindset", does all the work for you and prompts you to delve further into the search results back on the dating site. If the concept is then made interactive (where you can link it with your Facebook status updates for example) or onto a mobile device, it starts to get very exciting... Don't get me started on location based services, where if you entered data into a Facebook app suggesting you were heading out on the town that night you can receive a txt or data feed to your mobile letting you know of a potential match in the same pub/club you've just walked into (GPS tracking to within 5 metres!). Think of the possibilities!

Here's an interesting article on Facebook and it's applications from The Sydney Morning Herald:

The Sydney Morning Herald, Next, October 9, 2007

Facebook is no longer just a social time waster, it's a platform for on-demand software. Randal Leeb-du Toit talks to the developers building this new world.

EVER wondered what your stripper name is? If so, you're not alone - 2.7 million Facebook users have added the What's My Stripper Name application to their profiles.

It's just one example of the viral power of the Facebook online social network - and a hint to its potential as a platform for marketing and delivering on-demand software.

Two weeks ago, news broke that Microsoft was in talks to buy a slice of Facebook, which would value the company at $US10 billion ($A11.2 billion). A week later it outlined its Microsoft Online strategy, of "software plus services" delivered partly, or entirely, through the web browser.

TheBroth doesn't need Microsoft to validate the potential of software delivered online. This Perth collaborative art community, launched last year, wrote What's My Stripper Name.

TheBroth's founder Markus Weichselbaum (aka Bambi Candylips) says Facebook was a chance to show the team's intellectual property to many users, rather than attracting them to separate websites.

"Our decision to enter this space was for commercial reasons," Mr Weichselbaum says. "We're lucky that we are working on applications that are fun to develop and fun for our users."

Its first application, PuzzleBee, transformed a photo into a puzzle to share. When the number of users increased exponentially - now more than half a million - he realised he was on a winner and a portfolio of applications was built.

They have more than 5.7 million users, helped by virally attractive functions such as male stripper names and rating friends' names.

It's just one of the success stories on Facebook's open development platform, launched on May 24. A hundred days on, there were more than 70,000 developers on Facebook's developer forum and more than 3000 applications vetted by Facebook for addition to the system.

While most, like Stripper Name, are just for fun, Facebook obviously means business. Last month it announced fbFund, $10 million of grants for anyone interested in building their business on Facebook's platform. Any individual or company can apply for $25,000 to $250,000, as long as they have not raised any formal venture funding. It is administered by Facebook but funded by venture capitalists.

"We are forming this fund to help grow the Facebook application ecosystem," the company wrote on its blog.

"By decreasing the barrier to start a company, we hope to entice an even larger group of people to become entrepreneurs and build a compelling business on Facebook Platform.

"We hope this is also a funding model that other venture capitalists will follow."

Kazaa's former chief technology officer, Phil Morle, says the most compelling aspect of the platform is access to millions of users and the very fabric of the social network.

"Developers can create a rich universe of people and connections without requiring years of hard work and luck. In addition, the technical approach Facebook has taken and the developer documentation they have created has enabled developers to quickly get results by building on the languages and models they already use."

Companies have already set up to focus on Facebook applications. Social Media founder David Henderson says Facebook use is all about Generation Y, which spends much time in this medium.

"Facebook is the new TV," Mr Henderson says. "Only this medium is social and engaging, not passive and linear." Social Media has raised $1 million from Silicon Valley venture capitalists Charles River Ventures.

Understanding what users of a social network want is key to getting them to download and use a developer's applications, says Jia Shen, chief technology officer of California-based RockYou. It serves 150 million applications to more than 200 countries across several social networks.

Mr Shen says his applications are tailored to social networks' needs. MySpace applications cater to self-expression and provide flashy decoration. Facebook applications are about users interacting with the software and their friends.

"MySpace is about meeting people and has a strong dating aspect, whereas Facebook is about people you've met or already know," Mr Shen says. "On MySpace 80 per cent of the views are of user profiles. On Facebook people spend the majority of time on the newsfeed page and from there they launch off into the different applications they are interested in."

RockYou, which received a second round of venture-capital funding in May, launched some of the first applications on Facebook. One of its most popular is Likeness, which enables a user to discover who they most look like among their friends or film stars.

Mr Shen says the concept was that a user expresses herself or himself and then pushes the application to friends, saying "Hey everybody, this is more interesting if you engage with it, too."

"Because a user's friends are there, it's a whole lot more interesting."

Applications have to be about long-term value rather than converting people into users.

A good example is the Zombies game, by which people bite friends and turn them into zombies.

"It's only been three months but Facebook applications have already gone through five epochs of evolution," Mr Shen says.

"Zombies started out as a goofy game but the real value of this application is leveraging the horde and the network effect of how many friends a user has infected.

"This allows the user to level themself up and engage in different types of battles."

He sees applications such as Zombies including item acquisition and trading. This is the long-term dream of many companies - using the platform to make money.

RockYou is leveraging the reach of its applications into making money. For example, it helped Yahoo! launch a music-video application by integrating it with its Likeness and Superwall applications.

It also promoted the application on its Facebook advertising network, which has 100,000 installations a day. This resulted in the Yahoo! application growing 200 times faster than it would have otherwise.

RockYou's advertising network helps small developers to launch applications at a fast pace - it charges on a cost-per-install basis and guarantees a certain number of users.

RockYou makes money from advertisements on the application pages and brand sponsorships. It recently did a James Bond Casino Royale campaign on its Slideshow application.

THE business angle of Facebook has not escaped venture capitalists. Altura Ventures is the world's first Facebook-only venture capital firm. Chief executive Lee Lorenzen says Facebook will have 200 million users and be worth $100 billion in 18 months.

"This is about the social operating system and if we look at the huge fortunes made around the internet browser, the equivalent time period to now would be 1994 - about a year before Netscape went public," he says.

Mr Lorenzen says the idea is to write software that entices a user back frequently to the canvas page, where they will want to interact with it repeatedly.

He says Facebook's success is a wake-up call for companies such as Google, which positions itself as a door to the web.

Social Media's Mr Henderson agrees.

"Like Netscape's browser challenged Microsoft's dominance a decade earlier, the social network platform will challenge Google's dominance.

"It won't happen overnight but the seeds have been sown.

"We are transitioning from a web of content to a web of people - from page rank to social graph."

Facebook is not without controversy. Mr Weichselbaum warns that Facebook is "a young platform on many levels".

"Serious developers used to serious application development may find it difficult to keep up with Facebook's unannounced code releases," he says.

Balancing the interests of users and developers and maintaining the security of the site is paramount. Facebook issues new programming code most Tuesday evenings from its Palo Alto offices. This sometimes breaks a developer's application.

"Users oblivious to the inner workings of the Facebook developer platform leave scathing reviews on applications they feel are badly programmed or don't work - even though the developer is innocent and Facebook itself is to blame," Mr Weichselbaum says.

"Within the many-thousand-strong Facebook developers' community, voices are getting louder that accuse Facebook of acting recklessly for not testing new code enough before releasing it."

Rather than putting him off the platform, Mr Weichselbaum treats these issues as "opportunity costs".

But the big question is how big is this opportunity?

Mr Morle cautions that Facebook risks flaming out if users get bored. The Facebook team and outside developers need to innovate to keep users coming back.

"I'm waiting for Facebook to allow us to get access to their application platform interface from outside of Facebook.

"They could become a unified service for users to store their relationships," he says.

FACEBOOK

THE STATS

Founded: February 2004

Open registration policy: September 2006

Facebook Platform launched: May 2007

Page views per month: 54 billion

Active users: 43 million

Australian users: 1.4 million

Average time on site per user per day: 20 minutes

Average weekly growth since January: 3 per cent

New applications added per day: 100

Photos uploaded daily: 14 million

Official blog: http://blog.facebook.com

Source: Facebook.com

Facebook - Changing the Web

Here's a great overview and insight into how Facebook (moreso than other social networking sites, because of it's "application platform" model), is changing how we do things on the Internet.

The Facebook revolution

The Internet megahit may be growing into the biggest, most valuable database in the world.

By Fred Vogelstein, October 7, 2007

When I first met Mark Zuckerberg, he seemed as much a visitor to his surroundings as I was. It was earlier this summer, in Facebook's boardroom in Palo Alto, and it was clear Zuckerberg hadn't spend a lot of time there. He wondered aloud to his media aide why we were meeting in such a big and off-putting formal space. His comments caught me off-guard. I expected a guy who has become as rich and famous as Zuckerberg to more fully embrace it. And then I thought, "Of course he feels awkward about his surroundings. He's only 23 years old."

It's been like that from the beginning for Zuckerberg. Ever since he started Facebook out of his Harvard dorm room four years ago, he has been scrambling to keep up with epic growth in his and the company's fame and fortune. The last year has been particularly remarkable. Users have quadrupled while employees and revenues have tripled. Zuckerberg was mocked briefly in 2006 for turning down a near $1-billion buyout from Yahoo. Now, there is talk that Google and Microsoft both want to buy a chunk of or all of Facebook for a valuation north of $10 billion. Meanwhile, in bars and at cocktail parties, Silicon Valleyites ask. "Do you think he's more like Steve Jobs or Bill Gates?"

Another round of Silicon Valley hype, you say? Perhaps. It does defy a certain logic that a 23-year-old might be worth -- based on his 30% stake in Facebook -- $3 billion. But the facts are these: Facebook is the hottest social networking company on the planet right now. And two very smart companies -- Google and Microsoft -- along with most of Silicon Valley believe that Facebook, or its kind of technology, is going to completely change the way you use the Internet in five years. Is that worth $5 billion? $10 billion? $15 billion? I don't know, but I know it's worth a lot.

When I first met Zuckerberg, I hadn't figured that out. Sure, MySpace -- owned by Rupert Murdoch's News Corp. -- had more than 100 million users, and Facebook had 40 million. But these were all teenagers sharing party pictures online, right? At their best, the two websites seemed like a more technologically advanced version of Internet chat rooms. At worst, they were a hangout for scammers and sexual predators.

It turns out that Facebook's reputation as a teen site, at least, is fading fast. The fastest-growing age group on Facebook is over 35, representing 11% of its users. And it is clear from talking to Zuckerberg that he thinks everyone on the planet can -- and should -- have a Facebook page. His vision is Googilian? Microsoftian? Intergalactic? Choose your word. He wants Facebook to become the biggest, most valuable database in the world -- the database of human likes and dislikes or, as author John Battelle likes to say, "the database of intentions."

If you don't know what a Facebook page is, well, that's what it is: Your contact information, your picture, an e-mail in-box and a compendium of your likes and dislikes, all -- and this is critical -- verified by your friends and typically only viewable by them. You can easily create a fake identity on Facebook, or a real identity with fake credentials. But you either end up with no friends or get called out for lying. This is a big distinction between MySpace and Facebook -- for the moment.

You can't change the look and feel of your Facebook page as much as you can on MySpace, but since May you can do something much cooler: choose from a giant list of free, non-Facebook-produced programs that will run inside your page the same way Microsoft Word and Excel run on your PC. There are more than 5,000 to choose from. Zuckerberg and Facebook don't have to anticipate all the things Facebook users want to do with their pages, but instead will let them bubble up from the global marketplace of ideas. Two of the most popular -- iLike and Movies -- allow users to know what music, concerts and movies their friends like best. Another, Causes, makes it easy to tell your friends the causes you care most about and solicit donations.

It all sounds way too complicated for mortals to understand until you hear Zuckerberg explain it. Boiled down, it goes like this: Humans get their information from two places -- from mainstream media or some other centralized organization such as a church, and from their network of family, friends, neighbors and colleagues. We've already digitized the first. Almost every news organization has a website now. What Zuckerberg is trying to do with Facebook is digitize the second.

Think about what this means. Right now, the interactions among friends, neighbors and colleagues -- a.k.a. word of mouth -- is still analog. You go to a cocktail party, and a friend tells you about this incredible pediatrician he's found. You ask a few other friends to confirm that data and eventually two things happen: You switch doctors, and the physician becomes a favorite in town. Now imagine that information automatically pushed out to all your friends, tested, verified and returned to you in 24 hours, and you have Zuckerberg's vision for Facebook.

Zuckerberg doesn't think we'll stop getting our information hub-and-spoke-like from big news organizations. But he does think that news about Mom's surgery or Dad's latest trip will get to friends and relatives faster and play a more prominent role in our lives. Zuckerberg is often quoted saying, "We're not trying to help you make new friends online. We're just trying to help you digitally map out the relationships you already have."

The kinds of information one can push through a digital web of family, friends, neighbors and colleagues -- properly segmented -- is endless and powerful. For instance, because I have a Facebook profile, I already know what books, magazines and newspapers my friends read, what websites they frequently visit, what music they listen to and what TV shows and movies they like. Many executives I know "google" and "facebook" job candidates before they arrive for an interview.

Down the road, I imagine that if I'm burglarized and put that on my Facebook page, every one of my neighbors -- and the police -- will know that too. I know bloggers who use Facebook to automatically tell their readers what's on their mind by having Facebook keep track of the books and articles they read every day. They do that in addition to posting mini-essays, photos and movies. There is already lots of talk about how someday our Facebook page, or something like it, will serve as our universal identity -- where hospitals can go to check our health insurance, where banks can go to check our employment and credit-worthiness, even where the Internal Revenue Service can go to find our tax data.

Zuckerberg and the 200 Facebookers he has working for him have only just begun thinking of ways to make money from all this information. But it's pretty clear from talking to him and his executives what they have in mind. What corporation or politician wouldn't die for a look inside Facebook's developing database of consumer likes and dislikes?

For companies like Google and Microsoft -- really, any corporation -- it's not clear what is scarier, the idea that another company would administer this "social graph," as Zuckerberg refers to our web of relationships, or that we, the users -- and not them, the corporations -- would control our data. They've bet their future on being the center of their customers' universe, either through a search box and various other online offerings that Google has, or through Windows, Office and the growing online offerings that Microsoft has. If we, the users, through our Facebook page, become the hub, and they, the corporations, our spokes, the idea that we once worried about Microsoft's monopoly or, as we do now, Google's growing power in online advertising, will seem very silly indeed.

Google's Move Into Mobile

I found this interesting article on itnews.com.au that speculates what Google's move into mobile might involve. While mobile content and applications are still in their infancy, it's an industry on a very slow, but very hot, boil. It seems quite obvious with Google's overnight dominance of mapping and it's push into online apps (particularly Gmail and it's competing offering to Office Live) that mobile is going to be the next big frontier for growth.

Google unplugged: gPhone or not, Google's going mobile

Google has already developed a dozen smartphone applications, including mobile versions of its search, maps, Gmail, calendar, and RSS reader tools. Google software has been integrated with BlackBerrys, and the company has partnerships with cell carriers in the United States and abroad. There's a strong chance Google will participate in the FCC auction of 700-MHz spectrum. Connect the dots.

By all appearances, Google's just getting started. The company's searching for an executive to head its mobile business development in North America. The candidate, according to the job description, should have "a thorough understanding of the mobile vertical, both from a carrier and a handset OEM perspective."

Handset OEM perspective? That could be a reference to the rumored Google phone, reportedly to be designed in collaboration with Taiwanese handset maker HTC. Speculation has it that the phone would carry the Google brand and come with Google services and applications, perhaps running on a Google-developed mobile operating system.

Google isn't commenting, but the search giant's influence could hasten the transition to a more open mobile market, one in which service providers find it harder to tie customers to lopsided contracts, closed e-mail standards, and restricted Internet access.

In an interview last week with InformationWeek, Dilip Venkatachari, a director of product management, spoke generally about Google's mobile strategy but declined to discuss future products and services.

"The mobile ecosystem has multiple players, all of whom bring significant value," Venkatachari said. "The most important thing is for all of us to work together to improve the consumer experience."

For IT managers, "Google-to-go" holds promise and peril. Businesses can expect easier-to-deploy mobile applications, more choices in carrier offerings, and, possibly, lower prices for wireless services. Yet that disruption will make the process of choosing software and devices and managing them all more challenging than ever.

Evolving Strategy

Google has been expanding its mobile software portfolio since 2005, when it acquired Android, a developer of mobile phone operating systems. Google's evasive about its plans for that technology, but the acquisition fueled predictions that Google will develop its own mobile OS, either for a Google phone or to run on handsets from other vendors. Any Google OS would be tightly integrated with the company's search, maps, Gmail, voice over IP, and other apps.

Google mobile ads--text-based, targeted ads that appear with search results on cell phones--debuted last year in Japan and quickly spread worldwide. In general, users have been receptive to display ads on mobile screens, defying analysts' predictions to the contrary. In September, Google extended its advertising platform to various forms of mobile content with AdSense for Mobile, software that aims ads at users based on the mobile content they're downloading.

Previously reluctant to involve itself in Beltway politics, Google this year waded into the FCC's planned auction of the last prime frequencies for advanced wireless services. CEO Eric Schmidt pledged US$4.6 billion in bids--but with stipulations. Google wanted the auction winner to be required to build a network that lets any appropriate device connect and one that's open to other service providers. Google got the former but not the latter; Schmidt said last month the company would likely still bid in the auctions, perhaps as part of a consortium.

Google has done a good job of getting its software onto the most widely used business smartphone, Research In Motion's BlackBerry. Google Mobile Maps works with the BlackBerry's GPS capability, and RIM and Google have integrated Gmail with the BlackBerry, so received messages show up in a Gmail in-box on the device. Last week, Google Local Search was joined with BlackBerry Maps, so users can receive results based on their location. What's more, Google Talk IM is optimized for the BlackBerry and can be downloaded from RIM's www.discoverblackberry.com site.

Google hasn't fared as well with Nokia, the world's No. 1 handset maker, which last month unveiled its own suite of mobile Web services, called Ovi.

Overseas carriers such as Vodafone in Europe, KDDI in Japan, and China Mobile have agreed to display Google applications and services on their handsets, while in the United States, Sprint Nextel and T-Mobile are listed as Google partners, though few details have been forthcoming.

"We're working with a wide range of partners, including some of the U.S. carriers like Sprint, to develop a set of customer experiences that provide users with better access to search and more improved applications," Venkatachari said.

Of course, finding a way to make money off free content and services is Google's endgame--and something it already does very well.

"We bring unrivaled scale in that business," said Venkatachari. "We do one thing and do it right: We serve the most relevant ads for the consumer in a particular situation."

Who stands to lose if Google succeeds? Microsoft, for one. Microsoft's Windows Mobile 6 operating system is expected to ship on 20 million devices this year. The last thing Microsoft wants to see is an exploding population of smartphone users abandon Office, which also runs on smartphones, for Google's free, untethered applications.

That's a real risk. Sea Change Management, a small financial services company, switched last year from Microsoft Office to Google Apps (though it still uses Excel where necessary). The company accesses Docs & Spreadsheets from PCs and smartphones "anywhere in the world," says managing principal Jason Winship. Employees collaborate using Gmail chat and shared documents.

Google's strategy may take another year or two to play out, which gives Microsoft some time to catch up to Google in the area where it's lacking--cheap and easy Web applications. The idiosyncrasies of the cellular market--including the conflicting agendas of handset manufacturers and cellular network operators, and network limitations--are deep rooted. "Handset nirvana," if that's what Google has in mind, will take time, says Yankee Group analyst John Jackson.

Brazen Moves

But don't underestimate Google's willingness to make bold moves--bid on spectrum, develop a mobile operating system, design a smartphone--that could shake up this inhibited market.

"Google will gladly lose money on a phone to be involved in this market, if it means getting more eyeballs in front of their services," says analyst Carmi Levy at AR Communications.

Google mobile apps often make their way into enterprises from the bottom up. At Lafayette Federal Credit Union, some employees have begun using Google Maps on their BlackBerrys without oversight from the IT department.

"They can download and use such resources as they see fit," VP of IT John Straub says by e-mail.

That's one way to do it, albeit potentially risky. IT departments may want to manage employee adoption of Google's mobile toolset, establishing policies for usage and security.

Just how IT administrators will actually manage Google's mobile software is another question. While Google Apps comes with basic management and update tools, the company hasn't put out a manage-ment console for its mobile applications, nor is it saying when one might become available. As Google goes mobile, the cellular industry, smartphone market, and customers are all flying with it--by the seat of their pants.

See original article on www.InformationWeek.com

Top 10 Digital Trends

Here's a great article, written by Richard MacManus, that discusses the (short-term) trends in digital.

TOP 10 WEB TRENDS
Written by Richard MacManus / September 5, 2007

We're well into the current era of the Web, commonly referred to as Web 2.0. Features of this phase of the Web include search, social networks, online media (music, video, etc), content aggregation and syndication (RSS), mashups (APIs), and much more. Currently the Web is still mostly accessed via a PC, but we're starting to see more Web excitement from mobile devices (e.g. iPhone) and television sets (e.g. XBox Live 360).
What then can we expect from the next 10 or so years on the Web? As NatC commented in this week's poll, the biggest impact of the Web in 10 years time won't necessarily be via a computer screen - "your online activity will be mixed with your presence, travels, objects you buy or act with." Also a lot of crossover will occur among the 10 trends below (and more) and there will be Web technologies that become enormously popular that we can't predict now.
Bearing all that in mind, here are 10 Web trends to look out for over the next 10 years...

1. Semantic Web
Sir Tim Berners-Lee's vision for a Semantic Web has been The Next Big Thing for a long time now. Indeed it's become almost mythical, like Moby Dick. In a nutshell, the Semantic Web is about machines talking to machines. It's about making the Web more 'intelligent', or as Berners-Lee himself described it : computers "analyzing all the data on the Web – the content, links, and transactions between people and computers." At other times, Berners-Lee has described it as "the application of weblike design to data" - for example designing for re-use of information.
As Alex Iskold wrote in The Road to the Semantic Web, the core idea of the Semantic Web is to create the meta data describing data, which will enable computers to process the meaning of things. Once computers are equipped with semantics, they will be capable of solving complex semantical optimization problems.

So when will the Semantic Web arrive? The building blocks are here already: RDF, OWL, microformats are a few of them. But as Alex noted in his post, it will take some time to annotate the world's information and then to capture personal information in the right way. Some companies, such as Hakia and Powerset and Alex's own AdaptiveBlue, are actively trying to implement the Semantic Web. So we are getting close, but we are probably a few years off still before the big promise of the Semantic Web is fulfilled.
Semantic Web pic by dullhunk

2. Artificial Intelligence

Possibly the ultimate Next Big Thing in the history of computing, AI has been the dream of computer scientists since 1950 - when Alan Turing introduced the Turing test to test a machine's capability to participate in human-like conversation. In the context of the Web, AI means making intelligent machines. In that sense, it has some things in common with the Semantic Web vision.

We've only begun to scratch the surface of AI on the Web. Amazon.com has attempted to introduce aspects of AI with Mechanical Turk , their task management service. It enables computer programs to co-ordinate the use of human intelligence to perform tasks which computers are unable to do. Since its launch on 2 November 2005, Mechanical Turk has gradually built up a following - there is a forum for "Turkers" called Turker Nation , which appears to have light-to-medium level patronage. However we reported in January that Mturk isn't being used as much as the initial hype period in Nov-Dec 05.

Nevertheless, AI has a lot of promise on the Web. AI techniques are being used in "search 2.0" companies like Hakia and Powerset. Numenta is an exciting new company by tech legend Jeff Hawkins, which is attempting to build a new, brain-like computing paradigm - with neural networks and cellular automata. In english this means that Numenta is trying to enable computers to tackle problems that come easy to us humans, like recognizing faces or seeing patterns in music. But since computers are much faster than humans when it comes to computation, we hope that new frontiers will be broken - enabling us to solve the problems that were unreachable before.

3. Virtual Worlds

Second Life gets a lot of mainstream media attention as a future Web system. But at a recent Supernova panel that Sean Ammirati attended, the discussion touched on many other virtual world opportunities.

Looking at Korea as an example, as the 'young generation' grows up and infrastructure is built out, virtual worlds will become a vibrant market all over the world over the next 10 years.
It's not just about digital life, but also making our real life more digital. As Alex Iskold explained, on one hand we have the rapid rise of Second Life and other virtual worlds. On the other we are beginning to annotate our planet with digital information, via technologies like Google Earth.


4. Mobile

Mobile Web is another Next Big Thing on slow boil. It's already big in parts of Asia and Europe, and it received a kick in the US market this year with the release of Apple's iPhone. This is just the beginning. In 10 years time there will be many more location-aware services available via mobile devices; such as getting personalized shopping offers as you walk through your local mall, or getting map directions while driving your car, or hooking up with your friends on a Friday night. Look for the big Internet companies like Yahoo and Google to become key mobile portals, alongside the mobile operators.

Companies like Nokia, Sony-Ericsson, Palm, Blackberry and Microsoft have been active in the Mobile Web for years now, but one of the main issues with Mobile Web has always been usability. The iPhone has a revolutionary UI that makes it easier for users to browse the Web, using zooming, pinching and other methods. Also, as Alex Iskold noted, the iPhone is a strategy that may expand Apple's sphere of influence, from web browsing to social networking and even possibly search.

So even despite the iPhone hype, in the US at least (and probably other countries when it arrives) the iPhone will probably be seen in 10 years time as the breakthrough Mobile Web device.

5. Attention Economy

The Attention Economy is a marketplace where consumers agree to receive services in exchange for their attention. Examples include personalized news, personalized search, alerts and recommendations to buy. The Attention Economy is about the consumer having choice - they get to choose where their attention is 'spent'. Another key ingredient in the attention game is relevancy. As long as the consumer sees relevant content, he/she is going to stick around - and that creates more opportunities to sell.

Expect to see this concept become more important to the Web's economy over the next decade. We're already seeing it with the likes of Amazon and Netflix, but there is a lot more opportunity yet to explore from startups.
See also: The Attention Economy: An Overview, by Alex Iskold

6. Web Sites as Web Services

Alex Iskold wrote in March that as more and more of the Web is becoming remixable, the entire system is turning into both a platform and the database. Major web sites are going to be transformed into web services - and will effectively expose their information to the world. Such transformations are never smooth - e.g. scalability is a big issue and legal aspects are never simple. But, said Alex, it is not a question of if web sites become web services, but when and how.

The transformation will happen in one of two ways. Some web sites will follow the example of Amazon, del.icio.us and Flickr and will offer their information via a REST API. Others will try to keep their information proprietary, but it will be opened via mashups created using services like Dapper, Teqlo and Yahoo! Pipes. The net effect will be that unstructured information will give way to structured information - paving the road to more intelligent computing.
Note that we can also see this trend play out currently with widgets and especially Facebook in 2007. Perhaps in 10 years time the web services landscape will be much more open, because the 'walled garden' problem is still with us in 2007.
See also: Web 3.0: When Web Sites Become Web Services, by Alex Iskold

7. Online Video / Internet TV

This is a trend that has already exploded on the Web - but you still get the sense there's a lot more to come yet. In October 2006 Google acquired the hottest online video property on the planet, YouTube. Later on that same month, news came out that the founders of Kazaa and Skype were building an Internet TV service, nicknamed The Venice Project (later named Joost). In 2007, YouTube continues to dominate. Meanwhile Internet TV services are slowly getting off the ground.

Our network blog last100 has an excellent overview of the current Internet TV landscape, with reviews of 8 Internet TV apps . Read/WriteWeb's Josh Catone also reviewed 3 of them - Joost, Babelgum, Zattoo.

It's fair to say that in 10 years time, Internet TV will be totally different to what it is today. Higher quality pictures, more powerful streaming, personalization, sharing, and much more - it's all coming over the next decade. Perhaps the big question is: how will the current mainstream TV networks (NBC, CNN, etc) adapt?
Zattoo, from Internet Killed The Television Star: Reviews of Joost, Babelgum, Zattoo, and More, by Josh Catone

8. Rich Internet Apps

As the current trend of hybrid web/desktop apps continues, expect to see RIA (rich internet apps) continue to increase in use and functionality. Adobe's AIR platform (Adobe Integrated Runtime) is one of the leaders, along with Microsoft with its Windows Presentation Foundation. Also in the mix is Laszlo with its open source OpenLaszlo platform and there are several other startups offering RIA platforms. Let's not forget also that Ajax is generally considered to be an RIA - it remains to be seen though how long Ajax lasts, or whether there will be a '2.0'.
As Ryan Stewart wrote for Read/WriteWeb back in April 2006 (well before he joined Adobe), "Rich Internet Apps allow sophisticated effects and transitions that are important in keeping the user engaged. This means developers will be able to take the amazing changes in the Web for granted and start focusing on a flawless experience for the users. It is going to be an exciting time for anyone involved in building the new Web, because the interfaces are finally catching up with the content."

The past year has proven Ryan right, with Adobe and Microsoft duking it out with RIA technologies. And there's a lot more innovation to happen yet, so in 10 years time I can't wait to see what the lay of the RIA land is!

9. International Web

As of 2007, the US is still the major market in the Web. But in 10 years time, things might be very different. China is often touted as a growth market, but other countries with big populations will also grow - India and African nations for example.

For most web 2.0 apps and websites (R/WW included), the US market makes up over 50% of their users. Indeed, comScore reported in November 2006 that 3/4 of traffic to top websites is international. comScore said that 14 of the top 25 US Web properties now attract more visitors from outside the US than from within. That includes the top 5 US properties - Yahoo! Sites, Time Warner Network, Microsoft, Google Sites, and eBay.

However, it is still early days and the revenues are not big in international markets at this point. In 10 years time, revenue will probably be flowing from the International Web.

10. Personalization

Personalization has been a strong theme in 2007, particularly with Google. Indeed Read/WriteWeb did a feature week on Personalizing Google. But you can see this trend play out among a lot of web 2.0 startups and companies - from last.fm to MyStrands to Yahoo homepage and more.

What can we expect over the next decade? Recently we asked Sep Kamvar, Lead Software Engineer for Personalization at Google, whether there will be a 'Personal PageRank' system in the future. He replied:
"We have various levels of personalization. For those who are signed up for Web History, we have the deepest personalization, but even for those who are not signed up for Web History, we personalize your results based on what country you are searching from. As we move forward, personalization will continue to be a gradient; the more you share with Google, the more tailored your results will be."

If nothing else, it'll be fascinating to track how Google uses personalization over the coming years - and how it deals with the privacy issues.