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Jun 16, 2009 2
In 1997, I can recall my older sisters saying how cumbersome email was.
In 1999, I can recall high school classmates saying that Napster will never replace music CD’s.
In 2005, I remember friends saying how stupid Facebook is.
Today, I hear business associates saying that print is well positioned.
Though we have yet to see the later three statements proven false and may never, it is this same mentality that causes business to be in a continuous state of “catch-up”. We’ve seen this in the multiple industries disrupted by innovation and changing consumer behavior. Gannett should have created Blogger, NBC should have created YouTube, and Yellowpages should have created Yelp.
I’m not defending the value of Twitter as a lead generating service for the apartment industry as of today. And I am not saying that Twitter, FriendFeed, or Facebook is the next platform that will change the way we find apartments. But I think it is a mistake to make all decisions based on measurable results.
Here is why:
1) It takes time to build and adapt to new technologies.
There is a learning curve involved. You cannot just get a PageRank of 9 overnight. You cannot build a network of followers for your blog with one post. You cannot build your online content presence by creating a Facebook Fanpage.
2) Social Media is also an engagement, communication, and customer service tool.
Not all results of customer service are immediately measurable. I do not need to defend the value of transparency; we all use UCG and review sites everyday. But I feel like I need to convey this… The way we (consumers) communicate, interact, and consume information is changing and for the most part, has changed. The social web, reviews, and UGC influence our purchasing decisions.
Would you stop using your phone because it does not provide a way to effectively market to consumers? Now replace the words, “your phone” with “social media”.
Newspapers have a daily circulation of over 40 million with 39% of people read newspapers. Print is still providing significant results. There is no doubt that print should be a main source of advertising for many companies.
However, the proportion that read just the print version of a newspaper fell by a quarter, from 34% to 25% over the two-year period. Within the week, hundreds of thousands will stop reading. Within a few months, millions will stop reading. Within 10 years, the industry may not exist at all. Though print may not be dead, it is definitely dying.
Mar 15, 2009 Comments Off
For those that don’t know, TenCent is the owner of the leading IM franchise in China – a product known affectionately as “QQ”. TenCent was founded in 1998, has 355 million users, US$1.2B in annual revenues, and a US$11.2B market capitalization. The stock chart for the past 5 years is included in the adjacent graphic. The two primary drivers of revenue for TenCent are digital items and casual game packages and upgrades. Advertising, which doesn’t work well on U.S. products like IM, doesn’t work well in China either. Advertising revenues for TenCent represent only 12% of total revenues. Recently, I asked a leading Internet analyst which company in China is best positioned above all others? He quickly replied “TenCent”.
Facebook already has very large succesful third-party games and could build some killer ones internally. Additionally, virtual gifts are approximately 1/5 of Facebooks revenue. Surprisingly, an estimated $50 to $60 million is made from Facebook virtual gifts.
Though I agree that the digital goods and games model will undoubly be extremely profitable if executed correctly, here is my easy and fast recommended revenue model for Twitter and Facebook.
1) I’ve been saying for years that our all aspects of our offline lives are migrating online. Our conversations, our interactions, and our thoughts are being held and recorded online.
2) We are already recommending books, restaurants, electronics, websites, and all sorts of consumer goods online.
However, these mentioned on Facebook and Twitter are not hyperlinked. What if Twitter and Facebook hyperlinked mentioned of goods or services relevant to the conversation? For instance, if a friend recommends a book on Twitter, it would link to Amazon so I could purchase it or read a summary/reviews of it. Think Zemanta.com or Apture.com for online conversations.
Would I pay for a link to a neighborhood or apartment in a conversation on Twitter or Facebook? I am cheap and I would pay boatloads for that.
So similar to the Google model that brings back relevant advertisements based on key terms, advertisers could pay for links in the text of conversations as long as it is extremely relevant. If I mention Apple Macbooks in a conversation, the “Apple” text is linked to Apple’s homepage. No doubt there is downside to the user experience if it is not executed correctly, but I think a few relevant links here and there would actually be helpful.
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