Andy’s Accounts

I figured Hulu was probably worth a blog post with the whole Disney signing-on thing in the news recently.  I’ve been using Hulu for almost a year now and I’ve gotta say it is fantastic.  It’s gotten to the point that I don’t even watch tv anymore, everything I need is pretty much on Hulu.

The popularity of Hulu makes Google’s investment in YouTube seem particularly unfounded, in my opinion.  Sure, in a battle of content quantity YouTube will beat anybody, but as far as qualitygoes Hulu is the victor by far in my opinion.  This is why I’m perfectly happy to watch a few 30 second commercials thrown in the middle of my shows on Hulu - it’s worth it for the quality, longer videos they provide.  I would not be willing to do the same on YouTube, where the video I’m watching may only last 20 seconds and may not even appeal to me.

And pertaining to the Hulu vs. TV debate, I actually watch the Hulu commercials; 30 seconds just isn’t enough time for me to get up and go do something else.  Advertisers are paying millions of dollars to show their ads to an empty couch, while others are paying significantly less and actually receiving my attention.  It doesn’t take an MIS major to figure out the this new, Web 2.0 business model is worth noting.  It may not be making Hulu rich, but I’ll bet they’re much less in the red than YouTube is, which is a good thing…I guess.  Well, it’s a start, anyways…

It was very clear to me that unique users are king in DFJ Mercury’s mind, and as far as the valuation approaches we’ve discussed in class, I would have to agree that this is probably one of the best.  Of course, it resides in a sea of approaches that fail to point to any real monetization, but still, as far as poisons go, this seems like a pretty good pick.  Reaching critical mass does seem to be one of the best ways for a company with no revenue model to set itself up for success somewhere down the line.  And it was pretty clear that companies are placing a great deal of value in unique users when no revenue model exists, so perhaps that alone is enough to justify making it a primary goal.

I found it very interesting that the bulk of DFJ Mercury’s strategy seems to be investing in ideas with little to no plans for monetization, putting a bunch of pretty bows and ribbons on the ideas (active monthly users, hints of revenue models, etc), then pawning it off to the Big 5 company that doesn’t want to see the idea in the hands of the other four.  The idea itself may be highly flawed (ie no profitability in sight), but DFJ Mercury’s job is not to help or improve the idea, but rather to dress it up and then pass it along to someone else before the flaws become apparent (ie attempting to implement a revenue model and seeing it fail).  Or at least that’s how the presentation came off to me.  I left class thinking that venture capitalists are less about finding and improving a good idea, and more about finding an idea you think you can sell.

Now I’m not saying this strategy is bad; on the contrary, it seems to be working spectacularly well.  It just seems to me that this kind of thinking and purchasing behavior could easily lead to another tech bubble that will pop if a revenue model isn’t discovered soon.  But as long as companies are willing to invest in potential instead of monetary results, I can’t say that I blame DFJ Mercury for their approach to venture capitalism.

So, on the advice of Mr. Peabody, I went ahead and got myself a Twitter account today to see what this craze is all about.  The first thing that struck me was that the website didn’t look very professional.  It’s passable, sure, but I expected more from you Twitter.  After making my profile I went looking for friends, not to follow them but just to see who else was on Twitter.  Fewer of my friends were on there than I expected.  Then I got bored, wrote a brief tweet for my 0 followers, and signed off.  So yeah, I’ll try to keep up with this thing for a while, in hopes that its value will reveal itself to me, but we shall see…

The idea behind Moximity is one I can see becoming very popular.  Any time a company can utilize a pull advertising model instead of a push model, everybody wins - the advertisers reach their target market and are more likely to make a sale, and the consumers receive meaningful information and special offers.  The examples where this model can be used effectively are few and far between, but when it is used (*coughGooglecough*) the results can be pretty spectacular.

Having said that, I don’t believe that Moximity will be a major player in this industry for very long.  They have a first-mover advantage going for them, but unfortunately their main competitors seems to be Google.  This is always trouble.  Bryan addressed this concern in his presentation by stating that Google is more focused on giving consumers information about where they are now, as opposed to where they’ll be shortly (Moximity’s approach), but this seems like a very naïve argument to me.  Google, missing out on an opportunity to collect more information about all of us through a pull advertising opportunity?  Not likely.

Google has all of the technology and know-how to enter this field; they’ve practically entered it already with the Google Latitude application.  Sure, Latitude places more emphasis on social connections with friends, but it’s just a step away from finding you and your friends a nice place to eat or a movie to see after connecting through targeted advertisements.  Latitude is not yet available on iPhones, but will be soon, and once that happens I don’t see what proprietary features Moximity will be able to offer that Google can’t quickly replicate.

That’s not to say that Moximity can’t have a wonderful life after being acquired by one of the big guys, though…

So as we are all aware, a few weeks ago Facebook made some drastic changes to their website which rearranged the layout, emphasized fan pages and statuses, and deemphasized applications.  This is not the first time that Facebook has made major changes to their site, and just like on every other occasion there was a huge backlash against their “improvements” that jeopardized the move entirely.  These backlashes will be the main topic of today’s blog.

If it was not already painfully obvious, people hate change.  Within hours of Facebook’s move to the new “Twitterbook” format I had several friends updating their statuses to reflect their hatred of the new Facebook.  Within 48 hours at least a quarter of my friends had followed suit.  By the end of the week it was closer to half.  I received numerous invitations to groups decrying the new Facebook, and even a few wallposts from friends looking for another victim on which they could vent their frustrations.

For the life of me, I cannot understand where these emotions come from.  The new Facebook had been out for like…2 hours…and already people were convinced that it was the worst thing that ever happened.  How can someone possibly make such an assessment after so very little time with the new system?  It’s maddening to me - just because things change doesn’t mean that the changes are for the worse!  And even if they are, it’s impossible to make this decision in a matter of hours, or often even days.  The closed-mindedness exhibited by so many people was baffling to me.  This is Facebook; it is not a matter of life and death that the home page looks a little different and one of your buttons has been moved to a slightly different location.  There really are more important things to worry about in life.

And like I mentioned before, this isn’t the first time Facebook has made major changes to the site.  Remember the huge backlash after they added the Mini Feed and News Feed?  Remember the outrage over the lack of privacy and the groups of 500,000+ declaring they would leave Facebook if things didn’t go back to the way they were?  Ok, here we are a year or two later.  Who out there still thinks those changes were a bad thing?  Can anyone even imagine going back to the way things were?  I think that the majority of us cannot.  The Mini Feed was exactly what people wanted - a handy tool that made spying on others much easier.  But Facebook has taught us that if something is new, it is bad.

I think that’s a ridiculous notion, especially in the context of something like Facebook where the changes are not going to be enough to make you stop using their services.  No one can leave Facebook because Facebook has everyone.  I do not foresee Facebook screwing up so badly that they trigger a mass exodus to some other site.  If people end up leaving Facebook for a competitor, it will be because the other social network has some valuable functionality or feature that Facebook doesn’t offer.  It won’t help that Facebook has made changes that are unpopular with its users, but in my opinion that certainly won’t be the straw that breaks the camel’s back.  Network effects are king in the social networking market, and Facebook has them.  They stole them from MySpace mostly by offering something new (privacy/exclusivity), rather than by taking advantage of some unpopular change MySpace made to its site.

As is my trend, I have no strong feelings one way or the other about the new Facebook.  I don’t care that fan pages have been emphasized because I don’t use them, and I don’t care that applications have been deemphasized because I don’t use them.  Perhaps my apathy is the main reason I can’t understand others’ strong emotions about Facebook, but once again, I just feel like there are more important things to worry about.  I’m just glad that by now we’ve gotten over the hump where people have finally stopped complaining about the new Facebook and have accepted that it’s here to stay.  They can either get used to the new format and begin to realize that it’s not the end of the world or 100% a bad thing, or they can leave Facebook and never come back.  Oh wait, no they can’t…

The DadLabs guest lecture was a bit of a mixed bag for me.  It was interesting to hear about how the group got their start, what goes into producing an online show, and the new opportunities for DadLabs to expand its audience, but overall I felt that the lecture focused too much on DadLabs specifics and not enough on the broader Web 2.0 environment they are working in.  However, for a first try, I thought the DadLabs guys did a pretty good job.

So while I might not have been all that interested in the difficulties of securing book publishers or reality television shows, in a broader sense I was very impressed by just how many opportunities stemmed from these little 5 minute shows a few guys produced from a warehouse.  It reinforces the things we’ve talked about in class, like the lowering of barriers to entry, diminishing costs, and the reduced difficulty of securing an audience when using Web 2.0 technologies.

The DadLabs presentation reminded me of another example where a Web 2.0 format was used for a website that became very popular and led to new opportunities.  fmylife.com is a website with a blog format that I’ve visited a few times where people post short stories about unfortunate things that happened to them that day.  It was launched just last year, but has exploded in popularity and has already secured a book deal.  It’s amazing to me just how quickly these sorts of things can happen.

In one sense, examples such as DadLabs and fmylife.com remind me that it really is true that anybody can take advantage of Web 2.0 technologies to accomplish things that were never possible just a few years ago.  But on the other hand, I’m well aware that these websites are the exception to the rule, rather than the norm.  But on the plus side, it shows that if you have a really good Web 2.0-facilitated idea, produce it well, generate enough interest, and figure out how your platform can be expanded to more traditional mediums, Web 2.0 ventures can, in fact, be profitable.  If only this wasn’t such a difficult thing to accomplish…

Wow! That was some fascinating stuff!  Honestly, while he was speaking I wasn’t really focusing on the Web 2.0 environment he was working in or how the concepts we’ve discussed in class would apply to his story, I was just hanging on his every word and waiting to find out what happened next.  Now that’s not to say that there aren’t any Web 2.0 lessons to be learned, I just felt like Judd’s speech was more about telling a story than explaining the hows and whys of Web 2.0 in a real world context.

But now that I think about it, maybe the reason Web 2.0 concepts didn’t come jumping out at me during his story was because they were so deeply entrenched in his actions and pervaded everything he was doing.  The battle over Wikipedia, the blogging and counter-blogging, the Amazon reviews, all done by a few key players masquerading as a number of different online personalities, and all of it possible only because of the emerging Web 2.0 technologies that we have been discussing.

I guess I would say that the main point I took away from Judd’s presentation was just how powerful Web 2.0 can be.  The example we read in the textbook about how a guy was able to locate a lost cell phone and get it returned to its rightful owner certainly proved this point, but in my opinion in pales in comparison to what Judd was able to do.  Not only were Web 2.0 technologies part of the solution to the problem, they were the actual front that the battle was waged on.  Some of the things that Gary Weiss was able to do to promote his book, slander Judd and Patrick Byrne, and promote the validity of naked short selling through Web 2.0 platforms were incredible, and the fact that Judd was able to use follow his trail the whole way was even more astounding.  Even while Web 2.0 technologies are allowing users to be heard in new and more powerful ways, there is clearly a trade-off to be considered.  As Judd emphasized, the potential for harm, slander, and self-promotion are all very real threats that can arise when everyone has a voice, and there are very few people out there who would go to the lengths Judd went to just to prove a point.

Perhaps in five or ten years the events that unfolded in Judd’s story will be unable to take place as Web 2.0 technologies are further developed to include content filters, user accountability, and stricter security. In the meantime, however, it seems to be worthwhile to be cautiously aware of the amount of power a single user can wield by using Web 2.0 technologies for personal gain and ulterior motives.

As I said in my first blog post, I really enjoy listening to guest lecturers.  They bring an entirely new perspective and set of experiences that I always find interesting and informative.  Jeff’s lecture was no exception; he got me thinking about social networks in ways I hadn’t before.  I didn’t necessarily agree with everything he said, but he’s the expert and I’m not so I’m certainly not ruling anything he discussed out!

Jeff stated that he believed the emergence of the importance of the Internet and e-business ten or so years ago is comparable to the dawn of social networking that we are experiencing today.  That was one of the main statements Jeff made that stuck out to me, and also one of the hardest one’s for me to believe.  After entering this class, it didn’t take long for me to realize that there was a lot more potential in social networking in the business environment than I was aware of, but I certainly wouldn’t have made a comparison like that!  Maybe it’s just the fact that this technology is still being developed, enhanced, and (hopefully) monetized, but I have trouble seeing a not-so-distant-future where social networking is king.  I see the potential - the facilitated communication, idea sharing, user-created content, feedback, etc - but businesses would have to make dramatic changes to their structures and business processes to embrace this environment.  Much of the power would be taken from the higher-ups and spread more evenly throughout the company and to the consumers. Where is the incentive to make such dramatic changes when there are huge doubts about the ability to monetize any of it?

Perhaps the most compelling argument to counter my doubts came from Jeff’s experiences when he approached businesses about going online in the 90s.  My concerns would have applied just as aptly to his claims then, and yet look at where we are today.  But there are two main differences I see between then and now.  I think that the potential for monetization was greater for e-commerce than it is now for social networking.  I would imagine that this served as one of the most compelling reasons for businesses to go online in the late 90s and early 2000s, especially as the Internet population grew.  Yet this leads me to the other main difference: the social networking scene is already hugely populated, which could not be said for the Internet in its early days, yet almost all attempts at monetization have failed thus far.  For most businesses, everything needs to be tied to the bottom line, and there has yet to be a company that can serve as an example for how social networking can offer a return on investment.  Companies like Google and Amazon have had success with implementing pieces of the social networking puzzle, but have yet to reach the grand scale the Jeff believes is coming in the near future.  Until a company embraces Jeff’s vision and proves that it can be profitable, I speculate that social networking in a business context will be perceived as an idea with great potential, but one that is monetarily unrealistic.

Hooray, after a few technical difficulties I am once again able to access my blog to…blog!

I’ve never actually written a blog before, and now that I think about I’ve never really even read one with any consistently, so I’m not entirely sure how to begin.  Writing a bit about myself seems like the most logical place to start, though.  I’m a third-year MIS major and Marketing minor here at the University of Texas at Austin.  When my life isn’t revolving around school work and team projects, you will probably find me killing time on my computer, playing racquetball, or playing board/card games with my friends.  Racquetball…I love it so…I had only played it twice before I came to UT, but a friend and I just got really into the sport when we came here to UT, playing probably 6 or 7 days of the week on average.  So of course I joined the UT Racquetball Club as a freshman, and now I’m proud to say that I’m the president of the club!  It’s very exciting and I love doing it.

I could also write a whole bunch about how much I love to play boardgames and card games, but I suppose I should save that for another time and get to what this blog is actually supposed to be about: MIS 373 - Social Networking.  I heard about this class last semester when my MIS 375 professor, Tim Ruefli, mentioned it during class one time.  It sounded like a really interesting and unique idea for an MIS class, so I at least knew that I wanted to check it out.  I’m glad that I did, because thus far I’ve really enjoyed the lectures we’ve had, and even the reading have been very interesting.  Plus I always enjoy guest lecturers, and it sounds like we’ll be having quite a few as the semester progresses.

This is the first time that I’ve been in a class that is being offered for the first time, or at least the first time that I’m aware of it.  This adds an interesting dynamic to the class, one that encourages experimentation.  I fully expect that some of these experiments may not work so well in the end in a classroom environment, but I’ll be curious to see which ones prevail.  The lectures and readings all seem to be going very well; I’m learning a lot and enjoying our class discussions.  I’ve never been a big talker in any of my classes, even those with a participation grade like this one (which sadly has turned a few As into Bs :(  ), but hopefully I will be able to overcome my reluctance to speak up.  I’ve said that before though…

The facebook application project seems like it will be a sizeable amount of work, but nevertheless I am looking forward to working on it and seeing what my group can come up with.  The project will provide us with some great real world experience, and will allow us to flex those creativity muscles that we MIS majors so rarely get to use, stereotypically speaking :)

Funnily enough, the biggest question mark for me in this class right now is the very blog I am writing now.  I have never really had any interest whatsoever in writing one.  I have a few friends that write blogs, but I have never been very interested in reading them, and as a result I’ve always thought that would also be the case if I wrote a blog myself.  Who would actually want to read about my thoughts and experiences on a weekly basis?  Couldn’t they just ask me about them in person if they really wanted to know what’s going through my head?  And I especially wonder who would actually want to read about MIS 373-related topics…only the very bored or the coerced, I would think.  But then again, what do I know about blogging?  I do still think it is an interesting idea to make a required blog for a class, and maybe the value of blogging will become more clear to me as the semester progresses.  I hope it does.  And I must admit, this relaxed, informal style of writing is greatly preferred over the rigid weekly papers I’ve had to write in some other MIS classes I’ve taken!

Well that’s probably enough blogging for today.  Yeah, this class starts in 10 minutes, that’s probably a good indication that I should wrap it up and head over there…