The discussion over Google’s latest move into behavioral ad targeting is all over TechMeme. Basically what this means is that Google will start selling users (or more specifically, clusters of users, like football fans for example) in addition to words:

Today we are launching “interest-based” advertising as a beta test on our partner sites and on YouTube. These ads will associate categories of interest – say sports, gardening, cars, pets – with your browser, based on the types of sites you visit and the pages you view. We may then use those interest categories to show you more relevant text and display ads. (…)
So if you visit an online sports store, you may later be shown ads on other websites offering you a discount on running shoes during that store’s upcoming sale.

Google’ is not the first to embrace behavioral targeting as other companies (including Google’s own DoubleClick) were already offering advertisers these features, but it is certainly the biggest.
Behavioral targeting on Google massive network of sites (just think of anyone who’s using Google Analytics, which is pretty much everyone) is certainly a game changing event to the online advertising industry.

The responses online (and ones I usually get talking to people about the topic as we’re doing stuff in this area at Nuconomy) range from simple skepticism of behavioral targeting effectiveness (like Google’s own Matt Cutts…) to Big Brother concerns.

To the latter group, concerned with privacy and worried about its actions online being tracked I have to say – NEWS FLASH! you don’t have privacy on the internet… everything you do is already being tracked, analyzed and can be linked back to you even if stored anonymously (ever heard of Thelma Arnold?), the only question is what do you get out of it?

I hope that with behavioral targeted ads I will see less irrelevant ads offering me low mortgages and seduction courses and more ads geared towards tech gear, maybe even making online ads actually useful (can’t remember the last time I clicked an ad. with time I just learned to automatically ignore these ad banners…). But I think change is not going to hit just the advertising market…

Google’s move can (hopefully) marks the beginning of a personal internet era where sites will customize their entire layout and content based on the preferences, or habits of the browsing users.
My favorite news site will know I care about tech and biz. and never read sports news and will modify its homepage layout based on these preferences, the recommendation widget on my blog will show post recommendation based on the viewers’ recent browsing history rather than based on traffic, and so on…

Behavioral targeting opens the door on a conceptual change, not just in advertising…

Related Resources:

• The Borg’s Cookies Are Delicious, Indeed – Zoli discusses privacy concerns over at Cloud Avenue.
• Google AdSense Starts Behavioral Targeting- Google Blogscoped doesn’t like behavioral targeting…
• Making ads more interesting– Google’s announcement on their blog.
• Behavioral Targeting in Google AdSense 

Tags: Advertising, Behavioral Targeting, Google, privacy

I  was very fortunate to get invited to the 2009 DLD Conference as a participant (Thanks to Yossi Vardi!). This was my first time at DLD and I can definitely say it has been the most amazing conference I have been to so far.

As defined by Steffi Czerny "DLD is interdisciplinary, creating interfaces and connecting people from the most different worlds." the conference’s “New Realities” theme encourages participants to discuss and formulates perspectives on markets following an eventful year, setting the agenda for 2009.

Or as Yossi Vardi defines it:

I told people that of my generation no one will understand instant messaging. And I was told my generation was already dead. But our generation has experiences the new generation does not have: real handshakes and real warmth of the hand. This still has to  move into social networks. And this is what we provide here: This old style feeling.
…
We invite you for 4 things:

• to get food for thought
• to make new friends
• to play
• to laugh

Think Distributed

So what is the new reality we’re living in? the repeating theme in most panels I’ve been to was the same:
We’re going through a fundamental change from centralized control (over content, decision making, …) to a distributed structure.

This change becomes very clear when you go over the following panels (and most other panels too):

• 100 Million Uniques
• New Media Models
• On Leadership
• Cloud Computing

All these panels talk about a new reality where, in order to survive, you have to give up on centralized control and go distributed.
On the 100 Million Uniques and New Media Models we hear about new distributed media networks that distribute information rather than creating and controlling it. On cloud computing we learn about technologies allowing companies to lose control over infrastructure for increased agility and lower costs, and on On Leadership we have the story of Best Buy that transformed its culture from “communicating at employees” to empowering their employees using social media tools.

Distributed Media

On New Media Models we’ve heard from Jeff Jarvis who says that the future of media distributed – aggregating content from a lot of independent sources rather than controlling the creation of content in-house.
On his latest book, “What Would Google Do?” (which I got signed at the event. Thanks Jeff! )  discusses the importance of building a platform for content, handing over control to users to build and distribute content, making your distributed network larger.

Traditional media companies think centralized. They create and control content and then spend a fortune on advertising in order to try and attract us, the consumers, to their content. This worked pretty well for big online media companies, like Yahoo for example, so far.
However, consumer today are relying more and more on social, self organization tools, to collect, sort, filter and rate content. Tools like Digg, Twitter, delicious and Facebook replace the functions that content portals used to provide.

In this new reality media companies need to stop thinking of themselves as an end – a closed content site (or portal) users come to in order to find content – and start distributing themselves.
Google distributes itself. It has its widgets, ads, maps and videos embedded in millions of web pages that it doesn’t own and it is making its profit of this vast distribution network.
Another example for distributed content is Glam. On 100 Million Uniques, Samir Arora, CEO of Glam described his company the following way:

“Glam is a distributed network that recognizes the fact that people go to many sites as opposed to a few, and that is the fundamental change that is happening today. So instead of bringing people to one place, we find out where people go and are there.”

“with every day that was passing, fueled by Google, its easier to find more sites, as opposed to one portal.

Instead of producing women targeted content and competing with all the other women content producers out there, Glam finds the best women content producers out there (some are lone bloggers and other can be bigger media companies) and invites them to join its network. It then sells ads on those sites and shares it revenue with them. It also aggregates the best content of its network to Glam.com, where it sells ads at a higher rate and shares its revenues too.
Glam helps sites on its network by sharing technology and content, and delivering traffic (and advertisers) to its member sites.

Distributed Leadership

Changing from centralized control to a distributed structure is not limited to the media and advertising world.
On the On Leadership panel we see how Best Buy made a strategic decision to distributing control to its employees allowing them to self organize and interact using social Web 2.0 tools.
By changing the company culture  “Less control from the top, more taking responsibility” the role of the CEO changes from  to defining a common goal, not way to get there, and relying the companies human capital to do what it takes to get there.
So some control over what’s going on is lost, but according to Best Buy CEO Brad Anderson, “this stuff builds energy. if people have self accountability and can do something that they helped created and love they got more energy. what a customer would get when he gets into that store is that he could tell whether that store has got energy and engaged employees serving him or not”.

So if there’s one thing I have to take from my  time at DLD 2009 its this: give up control, think distributed.

More on DLD:

• No Hope for Traditional Media Companies?
• Creating an Attractive Internet Company – It’s All About Emotions

Recommended session videos:

• 100 Million Uniques
• Reflections on a Crisis
• Predictably Irrational
• On Leadership
• New Media Models
• Software

Tags: DLD, DLD09

The Internet is a media platform based on content from traditional media companies (Times Magazine, etc.) as well as content produced by its users – blogs, forums and other social communication platforms.

This vast new world of content is taking the lead from traditional media. Newspapers, Magazines and TV Channels are all loosing their audience in favor of the internet. Those traditional media companies who do develop strong internet presence are still having troubles as income from online advertising does not cover the decrease in income from traditional advertising and subscription fees.

The New Media Models (video) panel, on last week’s DLD conference, tries to deal with the question of business models that media companies can use to profit on the web.

When asked about what kind of new media outlet they’d start today, non of the panel’s participants would start a print newspaper or a magazine.

“I wouldn’t start a newspaper. There might be a place for a magazine to sit on my coffee table, but not for a NewsWeek or a BusinessWeek or a daily newspaper I think its absurd… I understand why the do it, revenues on print are so great vs. online but it has to go way” said Michael Arrington. According to Arrington we’re going to be consuming our news and other content online or on digital devices and once a certain threshold is reached it’ll no longer be profitable to print. “It doesn’t make any sense for news to be on paper because of its just the cost structure” he summarizes.

Jeff Jarvis said he would start a distributed content network, like Glam. According to Jeff not owning and controlling the data is what allowed Glam to literally explode to more than 110 Million unique users in 3 years. While content owners have to spend a fortune advertising to bring people in, distributed networks just go to where the people are. People today reach content via rating sites like DIGG or Twitter messages and no longer require central content portals to collect, sort, filter and rate content them. Jeff says that media companies need to start asking “How can we build platforms on which others succeed?”, they have to become platforms for content distributed around the web (like YouTube for example) rather than producing and controlling their own content.

On that same note, Arrington added that traditional media sites, who’s cost structure includes all kinds of expenses that do not produce content – like programmers, office space – can’t compete with an army of bloggers who blog from their home using their laptop and free software.

Carolyn McCall, who is the CEO of Guardian Media Group (representing the “traditional” media companies) confirmed the fact that income from the printing business is going down while internet income, even for a huge company like the Guardian Group, do not compensate for these losses. However, she also mentions that 25 million users use the Guardian’s web and that its income is 300 million dollars a year and that both numbers continue growing.

The panelist could not explain why advertising budget that are taken from the print versions of the media do not move in their entirety to the online advertising world, and they could also not find a definite business model to run media company online (even Jeff’s example for a distributed network – Glam – is still not profitable and taking VC money) but they all agree that print is phasing out and that there’s a need for a new model for online media and journalism.

Tags: Carolyn McCall, DLD, DLD09, Glam, Guardian Media Group, Jeff Jarvis, Michael Arrington, TechCrunch

How do you create an internet company\product that can get the attention of more than 100 million unique viewers a month?

That’s the tough question that Yossi Vardi’s was trying to find an answer to on his panel at this year’s DLD conference – 100,000 Million Uniques (video) – together with Glam’s co-founder Samir Arora, YouTube’s co-founder and CEO Chad Hurley, CEO of the Mozilla Foundation Mitchell Baker and Toby Coppel who is a VP at Yahoo!.

The answer, according to Yossi and the panel speakers, who all run companies with over 100 million users, is that having a good product is not enough; there has to be an emotional connection between the product and its users.

After discussing the process of starting, marketing and improving their products the panel’s conclusion was that users engagement is the result of an emotional involvement between the users and the product and others users and a feeling of participating in creation of something new.

A good example for that is Yahoo’s Q&A service that, according to Coppel, has more than 140 million users a month. Although most users are passive and only read the questions and answers, 5%-7% of the users write answers, and they do so without getting paid – they share their knowledge with the world.
According to Coppel, the emotional connection to a product is achieved by providing a platform to self organize allowing people to create and share knowledge and experiences and find other like minded people.

Baker explained that Firefox’s success is based on the sense of mission – to build a piece of the internet that is a public assert – which turns out to be an emotional goal for a lot of people.

And what about YouTube? Chad Hurley explains its success on the focus on creating a simple-as-possible user experience and allowing people to distribute content by embedding videos  – “We try to associate our easy to use service with our brand – YouTube – and to allow people to take that experience, take that video code to embed and place on their own websites and blogs so that people can experience it there as well and drive traffic back to our service. Beyond creating a service that adds value people need to connect emotionally to the brand that you’re creating”.

To demonstrate the importance of emotion, Yossi Vardi showed two YouTube videos of the aria Nessum Dorma. The first video, sang by Pavarotti only received about 9 million views while the second video, sang by Paul Potts, a hobbyist opera singer, received well over 40 million views.

Vardi later asked Hurley why the second video was so popular. “Well he’s good” was Hurley’s answer.

Tags: Chad Hurely, DLD, DLD09, Glam, Mitchel Baker, Mozilla Foundation, Samir Arora, Toby Coppel, Yahoo, Yossi Vardi, YouTube

The New York Times features an article entitled "The Computer Industry Comes With Built-In Term Limits" two days ago, discussing the tech industry’s Single-Era Conjecture:

"the invisible law that makes it impossible for a company in the computer business to enjoy pre-eminence that spans two technological eras."

The article explains about disruption with a focus on Microsoft, Google and the "Internet Tidal Wave".

The disruptive effect described in the article has been studied by Clayton M. Christensen, a Harvard Business School professor, who published “The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail” (1997) in which he presented a what would become a widely noted framework to explain how seemingly well-managed, successful companies fail to  prepare for the arrival of a disruptive technology and eventually lost market leadership.

"The Innovator’s Dilemma" remains one of the best books I’ve ever read and if you haven’t read it yet I suggest you do so…

Software Patents is a controvertial subjects. It has been the subject of an intense debate on the past few decades, so intense that it even has its own wikipedia page.
One of the main problems with the current patent system is that it is way to easy to file patents on obvious ideas (such as the famouse VB “Is Not” operator or Eolas’s patent on emmbeding objects in html) which then get approved by the patent examiners who are overworked and do  not have the resources to validate all the motions.

There seems to be a new hope and bringing some sanity to the software patents field in the form of a yearlong pilot project, endores by the U.S. Patent and Trademark Office, that aims to allow anyone who is interested to weigh in on 250 pending patent applications belonging to one of the more difficult categories to decipher: that including computer architecture, software and information security. Read more on the CNet post…

Maybe this is the first step in ending the race of software companies to produce large ammounts of pointless patents (as protection ofcourse…) and reverting some of the resources spent on lawyers to induce some real innovation…

Tags: IP, Software Patents

Seeing the amount of media attention apple gets, I couldn’t help but wondering what is it exactly that makes Apple’s launch so exciting.

Is it the reality distortion field usually surrounding big conventions like CES and MacWorld (and TechEd and SAPphire…)? Maybe, but its also there on Microsoft conventions have it too and I didn’t see such a media fest around Vista or the new Office 2007.

I think it has to do with the way to two companies differ when exposing products to the market.

While Microsoft announces relatively early and feeds the market with blogs, dog-food versions, CTPs, beta etc. Apple keeps quite and let everyone speculate about what its doing and maybe feeding some rumors every now and then…

I wonder how these different process affect product development too. I mean in one company everyone see what you’re doing and you’re constantly getting community feed back, which means there’s a lot of noise which makes it a lot harder to manage the project.
On the other side the devs have the quite to do their work without disturbance but they also risk missing the market expectations…

I can’t really pick the one I like better of these approaches… What do you think?

Technorati : Apple, Business, Microsoft, Technology

Tags: Apple, Marketing, Microsoft

Ron Garret wrote an interesting post about the top 10 geek business myths.

Since I’ve started my new career as a venture capitalist I have become keenly aware of some of the classic mistakes that geeks make when trying to raise money for a new business. Instead of writing the same comments over and over again I thought I’d try to summarize some of the mistakes that people — especially smart people — make when they decide to try to turn their bright ideas into money. Here then is my top-ten list of geek business myths…

There’s an interesting discussion on John Battelle’s blog about the amount the different software companies spend on research and development.

I would just like to add to what is said there that I find it amazing that Microsoft manages to keep all its projects and research focused on specific and long-term goals (.NET 3.0, Vista, etc.).
I find that much more useful than Google’s approach of shooting in all directions and releasing a new “beta” every other week…

עוד מאמר פורסם היום ב-TheMarker על חשיבות של תעשיית המשחקים בעתיד.
אז למה באמת אין הרבה חברות משחקים בארץ? אם באמת קרנות הון סיכון היו מתעניינות בנושא כבר היינו רואים כמה חברות רציניות בשוק אבל אין כאלה.
לפני כמה חודשים חיפשתי עבודה בתחום ולא מצאתי שום דבר. למה?

הסיבה העיקרית לכך, לדעתי, היא שחברות שמות את מרכז הכובד על הטכנולוגיה ולא המשחק עצמו. “יש לנו טכנולוגיה מדהימה שאפשר לעשות איתה סימולציות…..  וגם משחקים” הוא משפט טיפוסי שהייתי שומע…
בשביל לפתח משחק טוב צריך תוכן (רעיון טוב, משחקיות ובקיצור – עניין), מנוע אפשר לקנות…
אפילו החברות המוזכרות בכתבה מוזכרות בהקשר טכנולוגי ולא משחקי…  “כמו splinter cell רק עם פרסומות” זה לא רעיון למשחק ונראה לי יותר מכוון מפרסמים מאשר לקהל השחקנים.

כנ”ל תלתן שבכלל מתרכזת בתחום הסימולציות הצבאיות אבל בפוטנציה אפשר לעשות מזה משחק…

כל החברות בשוק מתייחסות למשחקים כשוק נוסף, הזדמנות לרווח צדדי ולכן לא רואים פה שום פיתוח רציני בתחום…

חבל..

Tags: Game Development, Gamedev, Israel