broadstuff

The problems with Web 1.0 companies acquiring lots of small Web 2.0 assets are outlined in a Yahoo internal memo - but the solution proposed here seems to be more dangerous than the problem!

Allegedly by Brad Garlinghouse - a Yahoo senior V.P - and reported in the Wall Street Journal yesterday, the complete text plus some interesting comments are on Paul Kedrowsky's blog here and some more comments on it by Liz Gannes et al are here

The article is interesting as it essentially describes a company whose culture is moving towards the same old corporate culture most other big companies have. I would be very surprised if Google did not have many if the same problems, lessened only because they are newer.

There is one bit where he complains about Yahoo's predilection for recruiting in new talent from outside (he has been there a whopping 3.5 years....apres moi.... (I suspect that this is a Good Thing as its a continual influx of people who are up to date that prevents corporate ossification. Yahoo is buying new guys who do stuff well ! )

But the bit that really worries me is this- Yahoo is asked to:

3. Execute a radical reorganization

a) The current business unit structure must go away.

b) We must dramatically decentralize and eliminate as much of the matrix as possible.

c) We must reduce our headcount by 15-20%.

Massive head hacking in the supposedly high growth Internet space...whats going on here?
Plus a root and branch restructuring of the company?

Reading the comments in the articles referenced, I seem to be a lone contrarian voice, but in my experience although talking tough always sounds good, sorting out positions like this need some subtlety and craft. Being Lean and Agile is not about axe swinging, as the Japanese have taught the US in industry after industry in the Old Economy.

OK, so there is duplication - but that is not life threatening if managed, and uncontrolled decentralisation usually makes it worse.

Undoubtedly some stuff needs to be sold off or closed down in a market as rapidly shifting as this - be astounding if there wasn't. But, do all of the above proposals together, and the whole company would be in complete introspective confusion for months, and this is not the right time for that.

Like Old Time medicine, these sort of approaches can kill or cure - although these cures look good on paper (and in business plans), execution is usually far, far harder if everything is changing at once

Yahoo is still in pretty good shape, throws out a lot of free cash, and is still a leader in many of its fields. This is the time for careful rationalisation and innovation, not slash 'n burn!

Postscript - a certain relief, i am not the only one who thinks this memo did not hit the spot - Robert Young over at GigaOm has also asked some searching questions.

Post Postscript - definitely not just me...this guy is clearly a wealth hazard and has form - see this article in The Street.

Technology research house isuppli has put out a research note showing that the new PS3 is c $250 - $300 underpriced for what it is, and has been extremely well engineered for power: To quote:

With the PlayStation 3, you are getting the performance of a supercomputer at the price of an entry-level PC,” said Andrew Rassweiler, teardown services manager and senior analyst for iSuppli.

and later...

The Cell Broadband Engine from IBM, which serves as the central processing unit of the PlayStation 3, provides the equivalent computing power of eight individual microprocessors. The Cell is what endows the PlayStation 3 with its supercomputer-like power, Rassweiler observed.

(Though Apple apparently was unimpressed and went with Intel, but its not clear if that was for technical reasons or commercial)

There are two PS3 machines - a $500 one with 20Gb, and a $600 one with 60Gb - and 802.11g Wifi. What makes this whole thing very interesting to me though is that Sony Computer Entertainment boss Ken Kutaragi has claimed that the PlayStation 3 is being positioned as a supercomputer capable of running multiple operating systems, with the Linux system to be pre-installed on the machine's hard drive.

Add Linux to that bigger machine's storage, processing power and the WiFi makes it very, very interesting - because it possibly could be, with a bit of tweaking, a very powerful but fairly low cost"black box" around which to build an Open IP to TV home solution that is easier to use than a PC, cheaper than a Multimedia server, and does more than an IPTV set top box.

This is possible today - I remember seeing a demo at BBC Labs open day last year showing a PS2 being used as a home entertainment controller - but the extra capability of the PS3 means a lot more can be done.

It seems to still be a bit clunky - to quote from engadget:

1. Can you connect and play media from a USB hard drive?

We know this is the number one question people are asking right now, and we'll tell you this: we connected a thumb drive, and it recognized it. But it wouldn't play any of our MP4 / H.264 video or MP3 audio, so something seemed awry. It wouldn't even find the files on the drive, our PlayStation said there were none. So we're going to have to get back to you on this until we can do some further testing.
Update: Ittousai's PlayStation does properly read media from USB. Maybe ours is a firmware issue, we're not sure yet.

.....

3 Can the PS3 stream videos, movies, pictures, etc., from a PC?

No, not currently. This is something we really wanted to see, but they're just not prepared to do yet. If you're Japanese, however, you can download video via P-TV on So-net.

4. Would the PS3 be good replacement for or complement my Media Center PC?

That's a pretty subjective question. You can't stream media to or from it; you can copy media to it.

As so much of the technology is new there is bound to be a shakedown period for the PS3, and its also not clear yet how open the system will be. But, but if it were to become more open, there are a lot of potential applications that it could be used for that are currently done in the "digital mess" of the home - that plethora of home PC's, Set Top Boxes, Media Servers, Slingboxes etc etc.

If this happens and if takeup is high this could be a very disruptive play for controlling the home IP Broadband Media systems.

And it plays games.....

Postscript - we've been following this PS3 Supercomputer story...I don't think we've seen that last of this machine's potential. Additional posts of ours on this beastie are here, here and here.

In February this year I was playing with Ning, and set up what I think is the world's first Anti Social Network, GrumpyBugger.arg

Problem with Ning is that it is a world of its own so the grumpyblogosphere can't easily post to it. Only 4 posts so far...bleeding heck! (Still, it is an antisocial network)

Stupid name anyway, Ning. What were they thinking, needs an "r" at the end!

Anyway, this post was to just to claim that I was first with antisocial media in case some other b*st*rd tries to claim it.

Or Patent it.

Like Flickr. Looks like you can patent anything these days! Maybe I should patent AntiSocial Networking. Maybe I should invent a rating routine for Orneriness, just tippex out Interestingness and replace it with Orniriness, heaven knows the Flickr patent is wide open enough.

And as for the rubbish most blogs spout, and RSS feeds and all that - you'd think it had only just been invented. I remember when you had to know your Archie from your Veronica...we had it tough.

Seriously, I do think though that there is a role for a site that picks up on life's frustrations, see which ones really resonate - may even get something done about them.

Now blog off the lot of you, I want my coffee

Postscript - Found this very interesting post on antisocial media applications on Seamus McCauley's blog here

Over the last two evenings I went to 2 different Social media sessions, one at NMK's Beers and Innovation session which I have blogged about here, hypothesizing about Beer as a Social Medium.

Last night I went along to my first Social Media Club London meeting hosted by the genial Hayley Allman and chaired (cat-herded?) by the tres formidable Jackie Danicki . Thanks to both of you.

Lots of beer there too, confirming my Beer-is-the-oil-of-social-mediums hypothesis (see the picture in the above link). The beer was cold and the discussion was heated, what more could one want?

Ged Carroll and Umair Haque have already done great writeups of what was discussed, and some of their thoughts on the issues. For what its worth, here is my 2 pence (or is that 6 Linden $):

1. RSS Fatigue

Many of us in the room were Post-RSS, I have blogged before on my own experience, with Rivers of Data swamping me with Floods of Cr*p. Seems like I Am Not Alone. Most of our solutions were to use various forms of our own trusted social networks to filter the stuff - using social media to mediate the social medium as it were.

2. The Parameters of Social Media Quality

There was an interesting debate about what made for high quality social media messages - is it heartfelt authenticity, high quality production values, beautifully groomed messages, trusted advocates or what?

Two corollaries to this were raised - firstly, the issue around Social Media-ocrity - i.e. if you are only talking to your In Crowd, it can become very insular and thus probably lower quality world; and secondly, the need for a Serendipity Switch - how do you inject valuable "new stuff" from outside your social circle - Editors used to do this, how does the the Social Media Editor function, especially as the Wisdom of Crowds is increasingly gamed (eg Digg, Google)?

There was also an interesting debate about absolute quality of media. I used to be believe in absolute, I now believe in relative by watching those pioneers of new media, my kids - who will sit entranced by crappy quality YouTube videos made on grainy webcams by complete amateurs, but with content that is absolutely relevant to them (like, oh, singing Pokemon songs and pulling faces). One kid's meat....

Stepping back and getting all strategic here (I am a consultant after all) it seems that we need to look at the shifting economics of each piece of the digital value chain to think this one through:

- cost of content search and production - going down
- cost of editing media (via social mediation etc) - going down
- cost of producing and distributing said media - going down
- cost of consuming the media - going down
- value pie available (time available and $ to spend) - staying the same - the "attention constant"

In other words, the cost of entry is lower but the boundaries of the game are the same, so is the New Stuff a more efficient approach than the Old? If yes, it will stick, replacing older media. If not, it won't. Right now the New Media 2.0 is in high growth, becoming significant, but in general these things are S curve shaped.

History also suggests that there will be a period of extreme experimentation with Social media, the New Media will then find its unique (and optimal) voice, and take its place alongside the Old Medias (Medii?), shuffling them along the bench a space.

3. The Economics of Marketing in a Socially Mediated world

This was a multi strand but key discussion, Umair has already had a go at reflecting on this in his post, I quote:

....what is the economic point of marketing in the post-network economy?

Is it "facilitating" of discussion? Is it as shapers of messages? Is it "engagement"? What economic meaning do these fuzzy concepts have (if any)? Etc...

The point here is that the economic rationale for marketing is undergoing tectonic shifts (and these shifts are only going to accelerate). These shifts point to the simple fact that the yesterday's economic rationale for marketing is, today, less and less valid.

Ged also comes at this from another angle here:

What is participation? - What would be considered to be consumption patterns in old media (like reading a newspaper or watching television) was considered to be participation in new media. Many of the participants didn't see the contradiction, which I found to be an curious viewpoint

Taking Ged's point first - in a digital world you leave digital footprints, so merely by tracking what, where and when you are consuming, data has been created that is valuable - think of Google as a darn big Nectar Card scheme.

If I may be so bold as to build on Umair's point by quoting myself in an earlier post I wrote today (is that bad manners?). Re Advertising:

....there is one thing that has totally changed since 2002 - and it changes everything - it is the sheer number of people connected to the internet today compared to 5 years ago. In 2001 the 'Net was a minority sport, now it is mainstream, and big bandwidth.

This means that it is almost inevitable that a large amount of Ad money still being spent in (declining) traditional media will move to the Online world. The current Online Ad spend is still tiny as a % of all Ad spend, and the basics of human behaviour - we want better stuff than what we are prepared to pay for it - will stay the same, so Ads will make up that spending gap.

As well as the demand side shifting, the supply side has some major shifts too. This is essentially because Online Ads are a darn site more efficient.

The Old Media system has high costs throughout the supply chain, and it delivers a product that "only half works, and I don't know which half". The overall value in this supply chain is under threat because:

- Costs of production and distribution are much lower online - the reason we have spam is that it is so cheap to do, and Google's ads are essentially the old "back of magazine" local classified ads moving onto the glossy front (web) pages.

- Online ads are more targeted, the analytics of the real-time feedback loops allows much higher levels of efficient iteration between campaigns (in fact it is now a continual campaign in effect).

- Social Media - ie services connecting our wisdom of crowds - can now efficiently carry out some of the roles that Advertising took on in a Broadcast world. Ditto Search, ditto Webservice analytics.

Do I have an answer yet to where this will end up...as I said last night, no...but I leave you with a heretical thought - will New Media, due to the reasons above, actually shrink the Advertising Pie? Is Advertising today just a construct of the Industrial, Broadcast grade world that is largely uneccessary in an interactive Social Medium?

I look forward to the next session..........

In the last 2 evenings I have attended two events focusing on Social Media, and the striking thing about these compared to the ones I attended a few months ago is that they are no longer populated by geeks, but increasingly by Advertising and PR people. It feels like 2001, so is the Eyeball Bubble back in full swing?. Well, it is but there is a reason this time - there are just so many more eyeballs online now.

Om Malik wrote a nice piece about this in Business Week last year, and I quote:

Back in 2000, every entrepreneur who started a Web content company carried the same PowerPoint slide. It charted the astounding growth of U.S. online advertising, from next to nothing in 1995 to $6 billion in 1999. Then a dotted line shot up to the projection for 2005--typically the $16.5 billion figure supplied by New York City-based Jupiter Communications. If a website could just attract visitors, the slide argued, advertising dollars would follow.

Venture capitalists and big portals bought in, placing sky-high valuations on sites that promised large audiences. Of course, the market for traffic dried up as online advertising slumped from $8.2 billion in 2001 to $6 billion in 2002. But here's the kicker: Web content deals are on the rise again, and Internet ad spending should reach $12 billion this year, meaning Jupiter's once-ridiculed forecast wasn't far off the mark. Viewers for Sale

But from the Yay-sayers, there has just been a new graph in Jason Calacanis's blog here that reminded me of all this, but I see that Om is now sounding the Ominous Warning from the Sceptic tank, in the GigaOm blog there

So, is Om right and this will all flatline, or is Jason right and its a headlong charge into the sunny uplands of Advertopia?

Well, earlier this year we had to do some predictions about the whole interactive Ad market for a client, and while this is always dangerous, there is one thing that has totally changed since 2002 - and it changes everything - it is the sheer number of people connected to the internet today compared to 5 years ago. In 2001 the 'Net was a minority sport, now it is mainstream, and big bandwidth.

This means that it is almost inevitable that a large amount of Ad money still being spent in (declining) traditional media will move to the Online world. The current Online Ad spend is still tiny as a % of all Ad spend, and the basics of human behaviour - we want better stuff than what we are prepared to pay for it - will stay the same, so Ads will make up that spending gap.

So is it a 20 year spree of accelerating growth as Jason assumes...no, I don't think so either - this is an S curve, and growth will level off....at what % of the total global Ad spend I don't know, but somewhere between 15 and 20% is not unbelievable - still a big number.

What I am not clear on is whether the Total Ad Pie (all media) will grow or not - I think it may even shrink.

This is essentially because Online Ads are a darn site more efficient. The current Old Media system has high costs throughout the supply chain, and it delivers a product that "only half works, and I don't know which half". The overall value in this supply chain is under threat because:

- Costs of production and distribution are much lower online - the reason we have spam is that it is so cheap, Google's ads are essentially the old "back of magazine" classified ads moving onto the glossy (web) pages.

- Online ads are more targeted, the analytics of the real-tie feedback loops allows much higher levels of efficient iteration between campaigns

- Social Media - ie services connecting our wisdom of crowds - can now efficiently carry out some of the roles that advertising took on in a Broadcast world.

On the growth side however, there are large parts of the planet who are only now getting to the stage where someone will want to advertise to them. Will we see reduction in Ad industry pies in the OECD, as it grows in the BRIC?

As in any rapidly evolving industry, there will be oversights, blind alleys, peaks and troughs, and bad stats - and letting Ad peple near stats is bound to be dangerous

Rumours are flying today that 3 UK is to be sold soon...its not just me that heard this, here is another swallow

No surprises really, its been clear for quite a while that the business model is bust, looks like Hutchison's deep pockets have finally been emptied. Very hard to compete in a hypercompetitive market like the UK, especially as 3G has been so slow to take off

So, who will buy?

It is now traditional in the UK for a foreign Telco to buy a UK mobile company, and we don't have a US one yet - but maybe BT could use it given its complementary assets - IPTV, DSL, Fusion et al.

Or maybe Google, as they say that YouTube will go Mobile and Yahoo and Vodafone have just eloped.

Or even Carphone Warehouse? Ntl and Virgin have got together so thats them out probably

Now we think Sky might be a good fit, after all this would give them a Quad play, and maybe all those MySpace users can get a free phone too

Interesting Times....................just a rumour of course

Postscript - Hutchison have apparently denied this rumour, and will instead announce a new business model for 3 UK tomorrow - more to follow later.....

Post Postcript - 3 UK announced today on their website that they are launching a new service model called "X - series". I quote:

It will extend several of the core applications and uses of the broadband internet to the mobile handset, with a new pricing model. The X-Series from 3 will be supported by the leading internet companies, cutting-edge handsets from the world's leading mobile manufacturers and premium customer service.

Customers will be able to make unlimited calls from their mobile using Skype, watch their home television via their mobile using Sling, access their home PC remotely using Orb and have access to the best of internet and messaging services from Yahoo!, Windows Live Messenger and Google.

The X-Series from 3 will be priced like fixed line broadband. It will offer use of mobile internet services free at the time of use, for a flat fee. The X-Series from 3 will be available in the UK from the 1st December 2006 and in 3's other markets around the world in early 2007.

So - a new pricing model, based on a flat fee from the 1st of December. US mobile companies are already doing "as much as you can eat" deals, so this is a welcomed plan. What has held the UK mobile media industry back vis a vis the 'Net are:

(i) adhering to a walled garden model, which guarantees a large % of a small pie rather than a small % of a big one. Didn't work on the Internet, it is not sustainable here - the mobile music market went elsewhere, and so will the video market under current conditions. Over the last 3 years new web 2.0 technologies and faster fixed line (and wifi) broadband have made mobile data services increasingly dated.

(ii) unrealistic pricing of services vs physical and internet based media (the dreaded "sticker shock" effect - £1.50 for the song, £5 for the download).

It does not look like the service is fully open, and as yet no details on the prices.

If the prices are set at Internet level then this is attempting to massively disrupt (crash?) the mobile 3G services market - not so much selling the company, as betting it!

Went along to the NMK Beers and Innovation event last night, topic was Social Networking by Design.

Speakers were Meg Pickard of AOL Europe, Tim Morgan of Mint, who set up the Islandoo site for Channel 4 Reality TV wannabees, and Philip Wilkinson of Crowdstorm, a social shopping site.

Meg's talk was very interesting, she trained as an anthropologist and it showed - my observation is that people who have studied human structures are very perceptive about this whole space, and I thought some of her definitions were very thought provoking, such as the trends in social networks from the generic to the niche as communications mediums change.

Philip listed the number of players in various verticals in the space. Interesting, as the One Question I had gone with was whether these worthies thought that social network dynamics promoted "long tail" or "hit based" structures, as the economics are totally different but key to what will come to pass. Meg stepped up to the plate on this one with a view that there is a long tail of niches, but in each niche the structure is probably hit based.

Another point she made was about the social networks people made at University, where you joined various societies to "talk rubbish with people who were interested in the same thing, and get p*ssed". Thus the unsung role of Beer in the Design of Social Networks, of which more later.

My main reason for going however was to understand a bit more about Islandoo, as the "game theory" for this social network is different - it is to get onto the Channel 4 TV Reality TV programme Shipwrecked rather than the more day to day raison d'etre of most sites. It was interesting to hear Tim's views on the user base - apparently they are very creative, mainly very extrovert Type A's, are all excellent to each other, and stay on even after they know they won't be picked.

So, all on best behaviour then. No anti-social networking here....

The really interesting question that emerged here in the Q&A session (not just for Islandoo) was the "what do you do with a community like this when the original reason it exists is gone" and (subtext) you don't want to pay for running it any more.

Clearly every John Company and Jo Brand wants to get the buzz going when they have something to flog, and much heat is being generated doing this right now - but it also became clear (to me, anyway) that the thinking overall was much muddier about what to do once that objective is met.

This blends into the issue of what makes any one site popular and (more important) sticky. Someone coined the term "user ROI" to describe the concept of the user getting sufficient payback from the investment of time they put in to a social network profile on a site, and thus that leaving them high and dry was probably going to engender the opposite of loyalty.

In addition, research continually shows that the average pissed off customer is much noisier than a happy one, and with the 'Net as a transmission medium the disaffected can reach a lot of people fast, so I suspect that many of these Brands will find that, like all Affaires, these relationships are easy to get into but much, much harder to get out of without tears.

Les Liasions Dangereuses ?

There is hope though - work we have done with clients suggests that Social Networks are actually very powerful ways to build ongoing customer loyalty if done correctly. In fact they have shown themselves to be very good at reducing cost of customer service and reducing churn, even being able to pick up signs of customer defection before they leave.

I am continually bemused at the emphasis so many companies put on Getting New Customers rather than Keeping The Ones You Have. Company after company in industry after industry I consult to tell me that the cost of acquiring a new customer is many times higher than retaining an existing one, that the ROI of the customer is often 12 months plus, and yet, and yet......no one has (to my knowledge anyway) set up on Second Life to service its customers.

Clearly once the customer has paid, Les Affaire is over....

Now, back to the role of Beer in the Design of Social Networks.

I met Deirdre Molloy who put together these (very interesting) Beers and Innovation programs and Helen Keegan who runs a more mobile oriented event called Swedish Beers - and chatted more to Meg, Tim, Philip and various others over a beer (or three).

What became clear (as my vision got more blurred) is that beer is a remarkable substance, being both the oil and the glue of social networks. Maybe Meg knows of a PhD thesis somewhere that explores this role of beer in social networks? I do recall reading once in Scientific American that beer probably allowed early urban society to start, as water in those Mesopotamian cities was just too dangerous to drink.

Overall, the networking at these events, and the trading of ideas, is far more "full bandwidth" than the broadest broadband network. Perhaps for any virtual Social Network to really have longevity, a joie de vivre, to be truly sticky, it must have tangible points where people can interact tete a tete.

And drink beer, of course.....

A flurry of Big Stories from Yahoo
and Google on mobile advertising this week.

Google CEO Eric Schmidt said yesterday that you may get a free phone in the next few years if you sign up for targeted Ads. He also said Google had no plans to directly give away phones itself, nor is he aware of any effort by partners such as phone makers or mobile operators like Vodafone to make such a radical move, he said.

However, there is more data from the other announcement - Yahoo and Vodafone have tied the knot on a deal too... to quote:

Under the deal, Yahoo will become Vodafone's exclusive display advertising partner in the United Kingdom, providing a variety of mobile advertising formats across Vodafone's content services. The companies plan to roll out the initiative in the United Kingdom in the first half of next year.

Customers who agree to accept targeted display ads will receive savings on certain Vodafone services, which may include the "Vodafone live!" portal, games, television and picture messaging services.

Cool, I love free...but...I live in the UK and I get a very nice free phone once a year already, without signing up for Ads, all I need is a contract above a certain value. Clearly not aimed at me then, so is it yet another play for the Pay As You Go "yoof" demographic who have little money but enough time to watch the ads?.

Also, this plan is to subsidise all those extra services rather than pure telephony (or are there plans to charge for the phones unless you take Ads?). I'm not sure that its going to be used by the kids for these media services either, because there are already ad-free devices around, called iPods et al.

Death before Inconvenience, as they say on the barricades of the New Media Revolution.

Or is this just the next draught of 3G snake oil to persuade the teenage scribblers in the City that Mobile is still a Growth Industry, not a Utility?

The one near-certain prediction is that Mobile Ad Avoidance technology will suddenly become very, very hot.

Actually, I am told (anecdotally of course) that the cost to acquire a new mobile customer is c 5 - 10 x greater than the cost to retain an existing one. As the UK is now oversold and they all seem to keep about the same relative share year on year its a zero sum game anyway, so maybe its a better plan to recruit fewer new customers, "re-engineer" the customer recruitment functions, pocket the recruitment fees and just focus on keeping those customers that one has? Imagine if much of that saved sales and marketing cost was handed back to the existing customers in the form of discounts, sans 'phone adverts.

A Utilitarian approach, methinks?

On a slightly different tack, Katie Fehrenbacher over at GigaOm thinks this is all interesting because Voda chose Yahoo over Google, pointing to Google's "interesting" reputation in dealmaking in the industry. (Yahoo also recruited a senior UK Mobile bod from Vodafone fairly recently, so that may also have had some bearing on this outcome.)

Big Issue for me though is that Vodafone is c 25% of the (very competitive) UK market, so will Yahoo do deals with all the others too, or will one go with Google, another with AOL etc? (O2 is allegedly flirting with MySpace too.)

And then, what happens if I like Google services more than Yahoo but own a Voda 'phone. Do I chuck Voda to go to Google, or chuck Google to stay with Voda? And if I'm on Bebo not MySpace? And, if I sometimes use Google and sometimes Yahoo.....

Ah, the joys of walled gardens...clearly they are built to last

Every Tom, Dick and Harriet Company now seem to think the New New Thing is to announce your next new new product in Second Life, with Sun and Dell being the latest up.

I don't know who is advising them (well, actually I do...see below) but this is a becoming a bad idea, since:

(i) It has been overdone, it is just so not cool anymore - the buzz being created is more Wilde than Wild now (see Sun's here and Dell's here).

(ii) It is inconvenient for the intended audience if they have to log in to 2nd Life for the show, as it takes quite a few hours to handle a 2nd Life avatar competently - even less complex sites such as Habbo Hotel can have their problems for participants (see here for the pitfalls one can experience).

(iii) The tone is wrong for Dell - with an exclusive only audience it flies in the face of the whole "inclusive" movement that Web 2.0 is (or was - since the Web 2.0 Conference last week was apparently invite only maybe this is the New New Trend. Mayhap Mash and Cash don't mix?).

OK, its another small step for mammon - but why 2nd Life anyway, why not elsewhere?

It’s all to do with Wizardry.

It is apparently very hard to credibly advertise todays' products like computers, soda and other consumer stuff in a medieval "Sword and Sorcery" gameworld (except Swords by Wilkinson maybe?). Unfortunately all the other large Virtual Worlds (Runescape, World of Warcraft) are basically Dark Age dreamlands. (See here for a quick 101 on Virtual Economics.)

In other words 2nd Life however has enough virtual footfall (1 million alleged Avatars) to be interesting, and flogging today's consumer crafts to Trolls and Wizards is just too incongruous.

However, Second Lifers are apparently getting fed up with the grief these PR "flacks" are causing. After all, most people's wishes for Paradise do not include hucksters, billboards, boorish touristi and all the 1st Life hustle they are trying to get away from (I assume anyway), so (shock horror) the cool school are heading out to the islands, setting up private spaces and leaving the virtual inner cities to the Griefers.

For example, one major area called DreamLand (about 10% of Second Life) has just voted to ban PR flacksters from their turf. This report on the Nov 11th edition of the Second Life Herald is indicative of the anger welling up.

"Especially with the engagement of public relations firms in the space, a few corporate players have demonstrated their willingness to take advantage of early Second Life pioneers' achievements in unethical ways. It appears to have become common practice in certain corporate circles to copy concepts that have long been pioneered by Second Life residents, to then make false claims of inventorship in the real world media. Examples are companies that falsely claimed to launch the '1st radio station in SL', '1st fashion brand in SL', '1st tabloid in SL' or to be the '1st company launched in SL'. All these concepts have already been pioneered for years in professional, successful and profitable ways by lesser known Second Life residents."

Androids may dream of Electric Sheep, but not with advertising on their flanks.

Taking things further, there are now episodes of protest art and the Second Life Liberation Army has placed bounties on the heads of the Ad agencies bringing corporates into Second Life.

Linden labs, (Second Life's Creators) in the meantime have been raising prices on the islands, allegedly to stop property flipping but many residents think this is to stem the flow of Virtual Refugees away from the (commercially) richer soil of the Mainland. Whatever the reasons, prices are going up and commercialism is rushing in where avatars fear to tread.

But, even assuming the flacksters become more sensitive to the virtual environment, the issue longer term is that asking people to pay more to be bombarded with Messages from Our Sponsors is not sustainable in the long term, as by and large we (virtually and really) don't like commercialism except as a bribe to get at something else we want more cheaply than we otherwise can get it.

I am thus waiting spellbound for the first Ad-supported Virtual World that pays you for the amount of time you spend on it.

After all, if Google can give away mobile phones for free, paid for by advertising, then giving away a Virtual Mansion and adjacent Billboard should be a bagatelle.

You read it here first

Now, being contrarian we're going the other way...brewing Virtual Mead to sell on Runescape. Its just that programming all those virtual bees takes so darn long.....

I was asked that by a more traditional industry friend of mine the other day, and as I engaged brain into gear, about to flow into an answer I had to stop....all those calendars and geeky widgets....actually, it’s a damn good question.

Reading Liz Gannes' article on the Web 2.0 conference sparked this in my memory....she notes that:

When we were in Los Angeles a couple weeks ago, there was tangible excitement about the new age of digital media. The Hollywood types were bursting to talk about this revolutionary age of amateur talent ushered in by YouTube. This week, web 2.0 crowd treated the YouTube acquisition simply as a huge transaction, with the only interesting aftermath being lawsuits. Here, we’re so far ahead of the curve, it’s a race to see who can be cynical first.

The thing is, those "media" ones - YouTube and Skype and Flickr and MySpace etc - are clearly heavy duty consumer plays, but quite a large number of Web 2.0 plays seem to me to be early adopter only, for geeks by geeks. And so many are doing the same thing - how many calendars, desktops et al can we really use?

Over at Christian Mayaud's All Things Web 2.0 there is a log of c 2,200 Web 2.0 apps sorted into about 130 categories. (Christian used an Open Directory so the user does the metadata...interesting in itself).

OK, I'm sure its not a definitive guide - though its not a bad start - but its interesting paging through them and mentally ticking off those that are aimed at big consumer markets, and those that are more geek fodder.

B2B is very thin on the ground right now.

In her article Liz comments on a session at Web 2.0, the "startup launch pad", of 13 hot companies chosen from 200, which she notes:

" ....failed to dazzle; heavy on the PowerPoint and not on the impressive technology, and far too many of the companies part of the insular crowd, or often the investment portfolios, of the judges."

Hmmm...groupthink, and worse still, geek groupthink? The point about the 13 companies being tied to the judges is concerning too.

Its hard to see beyond many of these companies beta sites (though a few look like me-toos following after early sector leaders), so here is a summary from the independently minded Richard McManus who was there. Overall he was underwhelmed (it seems to me) citing just 3 for further interest. And if that was the Top 13, I wonder what the other 187 were like then?

And in my view a lot of these companies are not companies at all, just applications - these are not self sustaining businesses.

So, back to the Question: who are these guys really trying to sell to - their customers or their potential buyer?

(Postsript - a short video of the launchpad is shown here)