We are overloaded with information.  During the course of my day I email, tweet, comment, post, chat, message, buzz, check in, call, sms, mms, bbm and sometimes (if I’m really lucky) actually talk to people.  We are moving towards an ever increasing flood of content (much of it automated) and it’s only gettin’ worse.  One day soon everything will tweet.

It’s not the the sheer quantity of information that’s the problem (faster flow of information will only help people achieve more), it’s how we send and receive it:

• Sending: How do I send out information so that it reaches it’s intended audience only.  In the upcoming era of persistent, public online identity, how do I can still share my green-beer, toga party pictures with my friends and make sure potential clients don’t see it?  Additionally, I want to publicize my boring social media posts without spamming my friends who I know really, really don’t care.
• Receiving: With all this content around how do I make sure that that important stuff gets to me FAST, while the stuff that matters stays buried (until I get really bored or have lots of time to look through it).

The idea that’s been bouncin’ around my head tries to address the second point… enter: sign.al.

I have a dream… that one day my phone will ring when my buddy is callin’ me up to go grab a beer, while calls from vodafone bill collectors stay silent.  That my blackberry will only flash in meetings only when really really important stuff happens (like the Mets scoring a winning run).  That one day, we’ll be able to ignore the tens, hundereds or thousands of messages that don’t matter, and focus our attentions on the ones that do. Here’s how sign.al would work

• You give it all your account information (gmail, facebook, twitter, etc…)
• It starts off like any aggregator (Seesmic for instance), showing you a timeline of emails, facebook messages, tweets, yadda yadda:

• Aright, now’s where it starts getting cool… after a little while, it moves away from a timeline view, to a priority view.  It starts guessing knowing what you are most likely gonna want to read and respond to and starts moving those to the top.  This shift is already happening (FB news feed vs time line, Mozilla Raindrop, Xobni for Bberry)
• Sign.al can know what’s important by:
  • Frequency – How regularly you read and respond to individuals
  • Speed – Of your read/response
  • Popularity – The number of comments, retweets, likes, and mentions
  • Proximity – Number of shared connections
  • Medium – @mentions more weightage the email cc’s?
  • Geolocation – Are messages from Mumbai and NYC more important to me?
  • Time of day – Are certain types of messages more important at a certain time?
  • Content – Am I more likely to be interested in content about the Jets regardless of where, when, how it’s getting to me? (yes)
  • Recency – Moving away from this but still a factor
• Phase 2 – Phone app
  • Incorporating voice and SMS into the mix of content to prioritize
  • Different types of notifications instead of timeline: ring for an important sms, vibrate for a somewhat important @mention, silent for a newsletter.
• Phase 3 – Setting status (implicitly?): In a meeting, driving, out to lunch, available – Based on this reduce/amplify notification methods.  If I’m sitting at the airport bored and normally my phone vibrates for an important tweet, now ring.
• Phase 4 – Anticipate – Based on where I am, the type of message, who I’m connecting with, the medium, the format etc… start anticipating how I may respond to them (in a totally not creepy big brotherish way)

Ideas are a dime a dozen, execution’s what matters.  Take this idea, build it, I’ll use it and be happy (just be forewarned you need to legal operations in Albania to actually register the sign.al domain name :p ).

quick update: my buddy Aditya actually wants to make this happen… check out his blog for more info.

Related posts:

1. Steal this Product Idea #2
2. Steal this Product Idea #3: Get Together
3. An Intro to Social Data Portability

• Why/How do B2B companies engage in social media?
• What should companies listen to on the social web and how?
• What type of content should your company be generating?
• What is social search and how does it effect marketing?
• What are first steps businesses can take to start participating in the social web?

My main points are as follows:

• Social media can be used to achieve many of your business objectives (generating awareness, capturing leads, sales, recruitment, etc…).
• The main opportunity for social media in B2B organizations is establishing yourself as a thought leader.
• Create content that appeals to a wider audience then just your current customers.
• Become a destination for anyone looking to learn more about the industry.
• We’re moving away from static search toward recommendations.
• It is critical to have conversations going on about your company.

Video and Slides below:

Related posts:

1. Eating our own Dogfood in Marketing 2.0 Class
2. Intro to Social Media Videos
3. Slides from Social Media Training Sessions

Google still dominates the most lucrative percentage of marketing dollars spent on the web:

But recently they seem scared. Google is a one trick pony, with the Adwords serving as their main source of revenue. They’ve tried over and over to replicat it’s success but have failed miserably with Youtube, Dodgeball, Jaiku, Lively, Orkut and Wave. I visited Google’s New York offices in Jan 2007. The most memorable moment (besides the organic salmon burgers in the cafeteria) was when one of the engineers said that Google was the only site in the world, whose goal was to minimize time spent on it. At the time I was blown away – “Give the people what they want.”

Fast forward to today – for most searches related to products, services or experiential recommendations – Google fails:

People no longer trust the anonymous, SEO optimized, affiliate marketing driven, possibly automated, blog post. The next web is built on relationship driven, public, recommendations. Google’s biggest threat is not another search engine, but a change to the underlying way that people search. Enter Facebook and Twitter. I no longer search for news, it finds me (goodbye RSS).  It’s no surprise Google has made numerous plays at Twitter and FB has changed it’s whole strategy because of Twitter. They are all fighting for the same role, to be the underlying real-time, social operating system on the web.

Eyeballs and CPM ads are finally being replaced by microtransactions and quantified actions. Subscriptions are the new black. G used to be the gateway to the web.  Now, more sites are reporting an increasing trend of quality traffic from Twitter and FB.  The top brass at Google knows that social is critical.

Purchasing Aardvark is a brilliant (third or fourth) play into the social arena. With Buzz just released, Google now has a captive audience of 176mil (in Gmail) to test, position and improve social search (before it’s too late).  People don’t want to be sold to, but will gladly buy products based on recommendations by people they trust.  The line between advertising and content is blurring.  The key is being able to monitize recommendations (companies would gladly pay 2% of a product’s price for a sale).

What will be interesting to see is if either Facebook, Twitter or Google is able to do it alone (doubtful – but maybe FB), whether some big-time M&A will happen (Goog buys Twitter), or whether they will be forced to open up to each other, each find their respective niches, and continue to compete on the fringe (likely).   What do you think, with Buzz + Aardvark will they be able to achieve monetizable, real-time, social search before FB and Twitter?

Related posts:

1. Google’s Biggest Competitor isn’t another Search Engine
2. Slides from Social Media Training Sessions
3. Why Would Anyone Advertise Online Without Google/Facebook?

There are a number of questions which Google fails to answer:

• “where’s the best bagel in new york?”
• “what’s a cheap, clean, centrally located hotel in bangkok”
• “which DSLR camera should I buy?”

In the cases above, you’re most likely to get SEO-optimized aggregator/review site whose primary motivation is affiliate sales.  And forget about finding anything usable to:

• “what’s everyone up to this weekend?”
• “should I get a tattoo?”
• “is business school right for me”

Increasingly, I turn to Twitter and Facebook for these types of questions:

Aardvark is another really nice product that tries to answer these experiential/recommendation type of questions.  It’s easy to use (via a chat bot) and gets quick and solid responses.  The same question got me three responses within 10 min (here’s two):

• (From Rakesh R./24/M/Arlington,US, Re: **cameras**
  go for canon 50D with a kit lens to start with . Your body is excellent but lens is OK types. u can always improve on ur lens whne u know what u needhttp://vark.com/z/b41bf (Amazon: Canon EOS 50D)
• (From Sam A./M/Dubai,UnitedArabEmirates, Re: **cameras**
  Well the best bet would be to start looking at the more popular brands:
  Canon and Nikon. Some people also swear by Olympus and Leica (the latter
  being seriously expensive), and even Sony. I’d stay away from Sony because
  cameras is not their real bread and butter (though I have read some good
  reviews regarding their Alpha series). Now I wouldn’t recommend sticking to
  the popular brands because they’re better or provide the best value for
  money, but rather for things beyond that: availability of accessories,
  lenses, repair options, etc. I personally just purchased a Canon D7 and it’s
  a really great camera. Though a little on the pricey side, it provides great
  value for money. Things like high continuous shooting rate, HD video, etc.
  This site helps you actually buy one: http://reviews.cnet.com/dslr-buying-guide/

  This website will be really helpful in doing some comparisons: http://snapsort.com/
  Enjoy!

Imagine if I could aggregate this data, slice and dice according to my tastes (i.e. 2nd degree relationships within NYC who have bought a camera in the last 6 weeks), compare prices and actually buy this thing from a single application?  This is a game changer that could be a devastating blow to Google SEM and forever change the way we buy products and services (though Google’s smart and they’re workin’ on it) . Facebook ::nudge nudge wink wink:: I’m lookin’ at you…

My favorite quote from the excellent video by @equalman (posted below) is:

We no longer search for the news, the news finds us…
In the near future we will no longer search for products and services they will find us

Increasingly though, it’s not just individuals who will be turning to social tools to answer tough questions:

There’s a new tool that can help companies predict sales for the coming weeks, or decide whether to increase inventories or put items on sale in certain stores.

It’s Twitter.

~ MIT Sloan

Social data from Facebook, Twitter and the like combined with traditional CRMs will allow you to keep track of buzz, transactions and brand loyalty/sentiment, letting you answer questions like:

• What are people saying about my product right now?
• How has the perception of my brand changed recently and in what direction is it trending?
• Geographically where is my biggest, rapidly emerging and diminishing customers?
• Who are my biggest evangelists, in what demographic do they fall in, where are they located?
• Who are my biggest naysayers, how can I change their perception?
• What is the perception of my product vs. my competitors?
• What product features do my (potential) customers want?
• Where is my next potential biggest growth market?
• What are the trending (in both directions) topics in my industry?

Social CRM is totally hot right now and an important trend to watch this year:

Everyone’s talking… are you listening?

Related posts:

1. Advertising Is Not a Sustainable Business Model for the Web (unless you are a Search Engine)
2. The Transition to Real-Time, Social Search
3. Game Changer: Why Google bought Aardvark for $50 million

• We have a fairly active Google Wave which covers the course goals and meeting notes.  Students are free to edit the course outline, ask questions and suggest topics for future classes (please note you must be logged in to Google for this to work… the embed API is also fairly new – i.e. buggy):

• We have a few really awesome guest speakers including:
  • Maneesh Madambath – Founder of Smursh reviewing current trends in Social Media
  • Guarav Mishra – CEO 2020 Social discussing using social advertising to recruit members into brand communities
  • Vaibhav Arya – CTO of Skezno giving an overview of paid online advertising
  • Brian Burns – Founder of SpeakWell Communications discussing copywriting for the web
  • Adam Sachs – Co-founder of Ignightr talkin’ ’bout creating an investor pitch
  • Ninad Raval – UX Lead at Directi discussing Web Analytics and A/B Testing
  • Lauren Vargas – Community Manager at Radian6 discussing social media monitoring
  • What’s Web 2.0ey about this is that half the speakers are based in the US and will be conducting their sessions via skype/video conferencing.
• Rather then a preassigned reading list, the students are being asked to share a few links weekly with each other via Twitter and Wave.
• Students can ask questions/make suggestions/provide their own examples (via twitter and wave) during the class.
• The students will be partnering with a local NGO to raise awareness or solicit donations for a social cause using social media and an SEM campaign (hopefully Yahoo! and Google will come through and donate some ad credits).  These projects will be posted publicly.

Other things I could be/should be doing:

• Posting the course outline (as a wave) and inviting everyone whose registered for the ISB course to make their edits/suggestions (for topics or speakers)/questions/modifications prior to the start of the course.
• Reaching out to students in these universities ahead of time (via Twitter) to build some hype and make sure the class is filled up.

Anyone else have any ideas on how to make the course better?  Let me know…

Related posts:

1. B2B Social Media Marketing
2. Slides from Social Media Training Sessions
3. The Transition to Real-Time, Social Search

Video:

The videos from the actual lecture didn’t come out to well (you can see them here and here).  Below is the same session I gave to our team internally:

Slides:

Course Outline:

Prior Reading:

• Put Ad on Web. Count Clicks. Revise.
• India Digital Outlook Report 2009
• Ads Follow Web Users, and Get More Personal
• Introduction to Google Adwords (video – 15min)

Introduction
iTunes Case Study – You are the marketing manager responsible for launching the iTunes Store in India
- What are your objectives?
- How do you go about achieving those objectives?
Goals:
- Discuss branding vs. performance objectives
- Discuss differences between online and offline marketing (targeting, measurement, reach)
- Discuss the marketing funnel (Awareness, Consideration, Conversion, Loyalty, Advocacy)
- Review options for online advertising in relationship to the funnel
Review terminology:
- Impression, CPM, CPC, CPA/L/S, Goal, Conversion, CTR

Methods of Online Advertising
Search Engine Marketing (SEM) – Google Adwords Example
- How does Google determine which ads to display to users? Keyword, bid, location, quality score / relevance (clickthrough)
- Why are the bulk of most ad budgets allocated to SEM http://mashable.com/2009/07/08/social-media-marketing-growth/#mb – intent
Ads on Social Networks – Facebook Ads
- Targeting based on demographics
Ad networks – Right Media Exchange
- What is the advantage of purchasing an ad on an network rather then directly on a site itself – Non-premium, performance based, auction, reach
Affiliate Sales – Amazon
- Description of the affiliate model
Email Marketing – Email Brain
- Review analytics for email marketing
- Discuss limitations on reach

Revisit iTunes Case Study
How can you determine effectiveness of online marketing campaigns?
- Demonstrate eCPM / eCPA calcualtions
- Link online marketing metrics to sales

Ask students to come up with a marketing plan
- Split class into branding vs. performance
- Determine goals and budget allocation based on historical results

Measurement and Course Correction
Demonstrate Google Analytics
- Show ecommerce analytics
- Glean insights, create hypothesis based on analytics data (i.e. per visit value of certain states are high, let’s see if additional marketing – online or offline – will help us generate more sale with less spend)
Course Correction
- 3 slides for creative, source and keyword performance
- Discuss actively managing campaigns and getting rid of underperforming ads, sources, keywords

Related posts:

1. Why Would Anyone Advertise Online Without Google/Facebook?
2. Advertising Is Not a Sustainable Business Model for the Web (unless you are a Search Engine)
3. Slides from Social Media Training Sessions

Business models on the web are undergoing a massive transformation. Originally mimicking the print industry (advertising revenues based on circulation numbers), we are now only beginning to explore real value adding, revenue generating opportunities which leverage the real-time, social, location-aware, collaborative nature of the web. While there are companies who are strategically concerned with building a profitable enterprise from the getgo (like 37signals, Zynga), there are many others who are concerned with building great products, attracting a huge user base and figuring out the home-run revenue streams later (most notably: Google, FB, Twitter).

There’s a ton of factors that come into play when choosing which route to take (do you have money? can you take the risk? are there obvious monetization opportunities now? by forgoing these are you putting yourself in a better position to capitalize on larger opportunities down the road?), but let’s assume for a sec you are in the user base game. How many user’s do you need to actually make some money. Here’s some back of the envelope stats (please take these with a grain of salt, some numbers here are estimates):

Some Observations:

• There’s a big difference between market cap, investment round valuation and acquisition price, for the purposes of this exercise I combined them. There’s also a difference between registered users, active users, monthly unique visitors, etc… I needed someway to make comparisons, I’m smushing stuff up to draw comparisons.
• I should probably add a few more companies like Skype, Paypal, eBay, Amazon, etc… to make this less search and social network focused.
• Google crushes it $12/user/year damn dude…
• YouTube founders are extremely lucky to get that kind of exit
• Valuations and revenues don’t seem to be related (surprise)
• Across all these companies the average revenue per user is: $2.87 and average valuation per user is: $35.62. Want to be a billion dollar company? You’ll need approximately 28mil users (I’m kidding… sort of)

What do you think? Is it better to play the userbase game or find ways to monetize immediately? Any way to make the above numbers more accurate? Any other conclusions you can draw from this data? Would love to hear from you…

Resources used:

http://www.comscore.com/Press_Events/Press_Releases/2008/10/Top_50_US_Internet_Sites
http://yhoo.client.shareholder.com/annuals.cfm
http://www.techcrunch.com/2009/04/15/boom-twitter-more-than-doubles-unique-visitors-to-93-million-in-march/
http://www.facebook.com/press/info.php?statistics
http://investor.google.com/fin_data.html
http://www.investorplace.com/experts/douglas_mcintyre/articles/twitter-facebook-myspace-value.html
http://blogs.zdnet.com/micro-markets/?p=283
http://mashable.com/2008/01/16/snap-interactive/
http://247wallst.com/2007/02/16/googles_revenue/

Related posts:

1. Billion Dollar Business Idea
2. Advertising Is Not a Sustainable Business Model for the Web (unless you are a Search Engine)
3. Game Changer: Why Google bought Aardvark for $50 million

Part 1: Introduction to Social Media

Part 2: Twitter, Facebook and Social Data Portability

Recommended prior reading:

• Razorfish Consumer Experience Report – Meet the Connected Consumer, Advertising as a Service, How Micro-Interactions Are Changing the Way We Communicate Online, How Tiny Applications Are Remaking the Future of the Web (approx 30 pages)
• Brave New World of Digital Intimacy – NYTimes (approx 8 pages)

The video on the second slide is:

Part 3: Introduction to Online Advertising

Recommended prior reading:

• Put Ad on Web. Count Clicks. Revise. – NYTimes (2 pages)
• Connect the Thoughts – Adweek (3 pages)

Agenda:

• Overview of buying/selling models
• How to compare different models (with examples)
• Intro to Google Adwords
• Intro to purchasing ads on Social Networks (FB/LinkedIn)
• Future of online advertising (social ads)

Note: My collegues did this talk, I will get the slides eventually and post

Part 4: Introduction to Analytics and Measuring Marketing ROI

Recommended prior reading:

• Razorfish – Digital Outlook Report ’09 (Social Influence Measurement – p 137 – 143)

As a course, I would structure this a bit differently, and some of the issues glossed over would receive their own dedicated section. For a longer course I would also include topics like Monetization Strategies for the Web, Data Driven decision making using Analytics (A/B Testing, Optimizing landing pages, SEO), The Future (Convergence, Social Ads, The Importance of Real-Time, The concept of life streaming). Any thoughts? I will flesh out a course outline and post some notes online soon…

Related posts:

1. Advertising Is Not a Sustainable Business Model for the Web (unless you are a Search Engine)
2. B2B Social Media Marketing
3. The Transition to Real-Time, Social Search

Facebook Connect

Simply put, Facebook Connect allows you to build a Facebook application outside of Facebook. You can integrate with Facebook’s authentication, retrieve profile information about your users, allow your users to find their friends who have “connected” with your site, as well as selectively publish actions to a user’s activity stream.   Developing a Facebook Connect application requires software development chops but gives you access to Facebook’s 200m users.  Digg and CNN both demonstrate different approaches to integration.

CNN
CNN offered a live video stream during Obama’s inaugration.  It included a Facebook Connect application which allowed users to sign in with their Facebook credentials and participate in a live global chat.

Chattin' bout Barry

The participation numbers are staggering.  According to Mashable:

1. 600,000 status updates posted through the CNN.com Live Facebook feed
2. Facebook averaged 4,000 status updates per minute during the broadcast
3. 8,500 status updates were posted during the first minute of Obama’s speech
4. “Millions” of people logged into Facebook during the broadcast

These numbers would’ve never been achievable if users had to register with CNN to participate.  Recently, the Whitehouse has taken a cue and announced a similar application for it’s live video events.

Digg
Digg’s Facebook Connect implementation allows you to link your Digg and Facebook accounts.  Each story you digg, shows up on your activity stream (for all your friends to see).  For Digg, the beneifts are immediate, more people will see that I am digging stories and click back to the site.

Signing Into Facebook Connect

Digg story on my Facebook activity feed

Facebook Connect is now also available for the iPhone.  This is huge and will create a whole new world of mobile social applications.

OpenSocial

OpenSocial is similar to Facebook Connect but allows you to build applications that run in orkut, MySpace, Hi5, Friendster, Ning and Yahoo! and other 3rd party sites.

Virgin Global Row
The Virgin Global Row is a one crazy dude’s story about circling Antarctica in a boat by himself (and raising some money for charity).  OpenSocial integration allows you to login, connect with other people who have joined the site, and push your actions on the site to your various social networks.

Open social options

Google Friend Connect
Google has also release a set of plug n play widgets based on OpenSocial called Google Friend Connect.  Currently there are about 10 widgets available including sign-in, comments, polls, reviews, events and recommendations.  This is cool because it allows anyone to quickly and easily incorporate social elements to their site (no coding required).

Sign in with Twitter

Yep, you guessed it, sign in with Twitter allows 3rd party sites to publish activity to your Twitter stream.  One example of this is Spymaster (the Twitter game which equally amazed and pissed people off).

Spymaster
Spymaster is a game which allows you to go on missions, raise money, buy weapons and attack other spies (Twitter users).  Success is based on how many of your followers play the game and how often you send out updates through your twitter stream.   IMO the game is pretty boring although it is undeniably attracting a huge following and a really nice example of a successful viral campaign.

Bribing you to tweet about your activities

Real time spymaster activity

Conclusion

There’s a big battle over who will become the defacto social OS of the web.  In the future sites/widgets/apps will be social (and location aware), the question is where your data will be sourced from.  At this point Facebook is clearly in the lead, but Google has deep pockets and Twiter is making huge strides.  As Facebook and Twitter launch payment platforms, the opportunity to monitize through social ads and microtransactions presents a huge opportunity.  Got friends?

Related posts:

1. Slides from Social Media Training Sessions
2. Intro to Social Media Videos
3. The Transition to Real-Time, Social Search

Over the last few months I’ve seen a growing number of companies offering alternative strategies to generating revenue.

Subscription Services / Premium Content (Blizzard, New York Times, GigaOM, Forrester)

The most straightforward revenue source is paid subscriptions. Blizzard, makers of World of Warcraft, absolutely crush it.

“if [their] 10 million subscribers were to pay the regular $14.99 month-to-month fee, then Blizzard would fill its pockets with almost $150 million every single month… that means a revenue-target of more than $1.7 billion for FY 2008.”

While many media companies have experimented with paid subscription models, very few have been able to do it successfully.  The exception is research focused companies like Forrester which banks on corporates with deep pockets shelling out $700 for a 12 page report.  GigaOM and TechCrunch have also recently launched similar premium research and analysis services.

The New York Times recently released it’s TimesReader 2.0 Adobe Air client. While the client offers an improved user experience, I can’t ever imagine shelling out $3.45 a week for content I can get for free.  Though I would pay for their $3 iPhone app.

It’s possible that with the success of the Kindle, these paid content services will flourish in the future.

Freemium (Wetpaint, Pandora, Google Apps)

A variation on premium content services is the freemium model. Give away 80% of your service for free, and charge for heavy users who want more functionality or a better experience. Pandora, a music discovery product, recently launched a premium services which, for $36 a year, removes ads, provides higher quality streaming music and offers a desktop app.  A compelling offering for their top tier of users.

Wetpaint is another company that has found success through the freemium model:

“When Ben Elowitz formed Wetpaint in 2005, it was intended to let anyone create a Web site free… Wetpaint typically offers advertisers space on a few Web sites with a few hundred thousand visitors. But last fall, many of their advertisers raised their sights to publishers with more than five million readers, Mr. Elowitz said. Rates for leftover ad space fell to 25 cents per thousand views from $1… Now, Wetpaint charges its big company customers, like HBO and Fox, a fee in exchange for providing extra services like site promotion and moderating reader forums… Smaller customers can pay to keep their sites free of ads. Wetpaint plans to add more paid services, including additional storage for big files and personalized domain names. It is also considering selling virtual goods on its sites. “

Finally Google Apps is another nice example of successfully upselling premium services. The communication and collaboration platform is free for up to 50 users, but for $50 per user per year you get access to a whole range of services including: additional storage space, email security and archiving, video sharing, phone support and access to API’s.

App Stores (Apple, Nokia, Blackberry, Google Android)

It’s tough to argue against the game-changing success of the Apple App Store.  Rival companies like Google, Nokia and Blackberry have launched their own stores (the Android Market, Ovi store and Blackberry App World respectively).  A cursory glance on the Blackberry store only showed about 20 apps, and none of them were paid.  While they won’t be competitive with Apple (at least for some time), it’s at least showing that this model is profitable and worth pursuing.  I’m sure this is now central to how mobile handset makers and software developers plan on monetizing phones.

Interestingly this model is now being extended beyond just phones (and why not!).  According to the Sun CEO, Jonathan Schwartz:

“Vector is a network service to connect companies of all sizes and types to the roughly one billion Java users all over the world. Vector (which we’ll likely rename the Java Store), has the potential to deliver the world’s largest audience to developers and businesses leveraging Java and JavaFX.

Our runtimes reach more consumers than just about any other company on earth. That ubiquity has obvious value to search companies, but it’s also quite valuable to banks looking to sign up new accounts, sports franchises looking for new viewers, media companies and news organizations looking for new subscribers – basically, any Java developer looking to escape the browser to reach a billion or so consumers.

How will it work? Candidate applications will be submitted via a simple web site, evaluated by Sun for safety and content, then presented under free or fee terms to the broad Java audience via our update mechanism. Over time, developers will bid for position on our storefront, and the relationships won’t be exclusive (as they have been for search). As with other app stores, Sun will charge for distribution – but unlike other app stores, whose audiences are tiny, measured in the millions or tens of millions, ours will have what we estimate to be approximately a billion users. That’s clearly a lot of traffic, and will position the Java App Store as having just about the world’s largest audience. “

I believe that a paid app store is also a viable business model for social sites like Facebook, LinkedIn and Twitter.

Microtransaction (Tencent, Zygna, Facebook)

Tencent, the largest Chinese social network, focuses on microtransactions as their primary revenue source.  Users pay for subscriptions, virtual clothes for your avatar, new weapons, cute pets, etc… From their ’09 first quarter results:

Internet services (digital goods, game subscriptions, micro-transactions) – $279.9 mil (76% of total revenues)
Mobile Subscriptions – $64.5 (17.6% of total revenue)
Online Advertising – $21 mil (5.9% of total revenues)

Online advertising only 5.9% of their total $350mil revenues?  Impressive.

Another company successfully generating revenues from social gaming microtransactions is Zygna.  According to TechCrunch:

“Zynga, the online gaming publisher, is making a ton of money… [close] to $100 million. And clearly, it’s accelerating… There looks to be a bright future in the online gaming sphere and specifically around micro-transactions. That’s how Zynga makes most of its money. With some of its leading games on MySpace and Facebook, it charges users for playing time or for things like chips in poker. These small purchases which usually amount to only a few dollars at a time, start to add up quick. And that’s only with a small percentage of overall players opting to buy them.”

Facebook finally launched it’s much anticipated payment platform for testing.  Facebook hopes to be the OS for the social web.  They are banking on companies like Zygna figuring out what it the masses want and developing social applications on top of their platform.  App developers will be able to charge for subscriptions and create opportunities for in-app transactions. Facebook will get a cut of each transaction.  Cha-ching!

Another interesting company in this space is Tipjoy, which facilitates small payments on Twitter. I haven’t seen this used effectively yet, but I imagine a micropayment based Craigslist Twitter app could be successful.

Trend Analysis (Twitter, Zensify)

It’s undeniable that Twitter has achieved massive popularity, but that doesn’t always translate to profits (see YouTube). I believe Twitter’s most effective strategy for monetization will be mining and performing trend analysis on the millions of thought bubbles created by users daily. Both companies and individuals would pay big money to answer the following questions:

• What are people saying about me/my product right now?
• How has the perception of my brand changed recently and in what direction is it trending?
• Geographically where is my biggest, rapidly emerging and diminishing audiences?
• Who are my biggest evangelists, in what demographic do they fall in, where are they located?
• Who are my biggest naysayers, how can I change their perception?
• What is the perception of my product vs. my competitors?
• What are the trending (in both directions) topics in my industry?

On a smaller scale the new iPhone app Zensify:

“Shows the user trends within your social graph in the form of a tag cloud of key words. In other words it brings a lot more intelligence to your social graph. Suddenly, you can see a big trending topic amongst people you follow… “Wouldn’t it be cool if “trending topics” were localized to the people who are followed by the people you follow.” Well Zensify does this… And it doesn’t just do it across Twitter. It does it also does it across updates from Facebook, YouTube, Flickr, Digg, Delicious, Photobucket and 12seconds.”

I believe that providing a set of tools to monitor trends amongst your social graph (and public timelines), will be a huge revenue opportunity for companies looking to monetize on social and real-time.

Conclusion

When the internet was originally created the “page metaphor” mimicked the existing print industry. It followed that the way to monetize was through advertisements. As we move from pages to activity streams we’re starting to see entirely new, innovative ways to profit. We are still in the infancy of this new stream based revolution and while companies like Twitter and Facebook have achieved huge valuations no one (especially the Newspaper and Music industries) has yet figured out Monetization 2.0. Put on your thinking hats…

Related posts:

1. Google’s Biggest Competitor isn’t another Search Engine
2. The Transition to Real-Time, Social Search
3. Billion Dollar Business Idea