MappingTheWeb //

The typical marketing plan of a clueless, old-school Internet company looking to kick it up a notch with some new-school, trendy social marketing strategies. 

Sound familiar? Countless Internet companies have become brain-washed. They are convinced that these new technologies are critical to their future success. In some cases, they may be right. But for the most part, they lack fit. Successful marketing techniques have to be strategized on an individual basis. What works for one start-up may not work for another. In other words, RSS may work for company A, while widgets may be best suited for company B.

My consulting background has really driven this point home. I’ve heard things like: “Our website NEEDS tagging” or “Let’s throw in some AJAX”. My subsequent steps are as follows:

1. I laugh (well, not aloud).
2. I describe the technology in detail and outline the benefits.
3. In most cases, I dismiss the use of the given technology.

My basis is simple: the ‘trendy’ technology MUST further the user experience and/or provide a greater marketing punch. The simple implementation of a technology for the sake of an implementation is pointless. Simply put, the questions that a company needs to ask itself are as follows:

• Will this technology create a more enjoyable user experience?
• Can we reach more potential users if we implement this technology?
• Do we simply find comfort and security in new, buzzword-compliant marketing techniques?

All jokes aside, this is a serious problem. More and more, we are seeing the use of these technologies in places they shouldn’t be. They are a waste of resources and confuse the offering.

Simplicity is key.

If traditional Internet marketing strategies (such as e-mail marketing or SEO) will provide the greatest ROI, then forget about RSS, podcasting, and the rest of their buzzword siblings. With all due respect, I am a huge advocate of all the technologies mentioned. Their place on the Internet cannot be argued, but they must be used in the proper context. 

PS. Another correct answer to the initial question would have been: the typical business plan of a Silicon Valley start-up. Too many start-ups are looking to jump on the web 2.0 buzzword bandwagon - VCs just don’t buy it anymore, literally.

Word around the blogosphere is that Twitter is close to closing a round of financing. Michael Arrington estimates the round to be somewhere in the $1-5 million range. That seems a bit low given the amount of buzz and attention the company has been getting over the past 6 months. I would have expected a larger round, but this smaller round does make sense when you think about it.

The smaller the round, the less diluted the company becomes. The founders can retain majority ownership and control. Furthermore, I am guessing that only a small amount of capital is needed to take the company to the next level. After all, Twitter is a micro-blogging service. How much does it really cost to run a company that facilitates the dissemination of short text messages?

I think that a small round is a very smart move by the company. I assume that many were expecting a gargantuan round, only to be disappointed. By minimizing the influx of funds, Twitter can spur growth and still maintain company unity. The next round of financing will probably be a different story with a whole new set of challenges.

Once again, rumours are swirling about a potential Facebook acquisition. This time, Google is the culprit. Sergey Brin, co-founder of Google, has expressed interest in the exploding social network. This isn’t the first Facebook takeover rumour we’ve heard so far this week. Already, reports surfaced that Microsoft has been in talks with Facebook. In addition, acquisition talks between Yahoo and Facebook have been going on for what seems like forever. The future of Facebook is uncertain to say the least.

What would a Google takeover mean for the search giant? Access to a large, highly sought-after market and ownership of a respectable social network (finally). Orkut just didn’t cut it. What would a deal mean for Facebook? Lots of money for Zuckerberg and more targeted advertising.

Let’s be honest though. This is an information deal - it’s all about the data. Facebook is a marketer’s dream. The amount of information available is ridiculous. Regional, demographic, social - Facebook has it all. Google would simply be adding another database of information to their arsenal. It’s all part of their master plan to take over the world. Muhuhaha…

Other rumours are circulating that indicate Google is laying back and waiting for Facebook to come to them. Still, others are saying that Zuckerberg and co. are sticking with their initial plan of staying indepedent, shunning all takeover offers, and planning to go public later this year.

Perhaps this is simply another Google PR stunt to raise awareness about the company. We haven’t heard much from the company in the last week or so. Ha. Having said that, they fooled me when they bought YouTube. It seems that the search giant is always looking to buy the cream of the crop in any given space, not only to acquire a large user base, but also to generate excessive amounts of PR and buzz.

Money always seems to be the big issue when it comes to Facebook acquisition talks. Because the social network is growing at such a phenomenal rate, it always seems to have the upper hand in takeover talks. What this means is that it can call the shots - i.e. the only way Facebook will sell out is if they are offered a huge sum of money. As mentioned, Zuckerberg has indicated an unwillingness to sell. But we live in a capitalist society. If the price is right, it is pretty hard to say no. Don’t forget that Google has deep pockets and a track record of getting what they want. Will Google be the one to finally pull the trigger? Can we say hello to GooBook?

The buzz and hype of the new web landscape has subsided considerably. Yet, to my surprise, more and more ‘web 2.0′ start-ups continue to operate with the cheesiest, most over-used strategies.

• “We’re currently in stealth mode.”
• “Our AJAX widget will VOIP the RSS while podcasting to bloggers in a wiki-like fashion.”
• Our target market is anyone who uses the Internet.”

These crack me up. Like… give us all a break. My favourite though… is one that is not as apparent, or even stated anywhere. It pertains to the revenue models of these ventures. Contrary to what many may think (especially the companies themselves), a revenue model was never part of the initial strategy.

To some, this may come as surprising. To others, it’s common knowledge. Many of these start-ups launch a FREE product with the intention of exploding onto the market, harnessing viral growth, and eventually selling to a larger, more established player. WOW, there is it. The revenue model is actually an exit strategy. I think that is a web 2.0 trend in itself.

Web 2.0 revenue model = Exit strategy

This makes sense for naive Internet entrepreneurs because:

• It eliminates that monetary barrier to entry for users (as mentioned above)
• They have no idea how to monetize a product in the first place AND/OR they find comfort in the the phrase, “We’ll build traffic, then figure out how to monetize later”.
• The company realizes that if they do eventually implement a revenue model (advertising, subscription, etc…), they will piss off users and many will defect from the site or service.

So, as you can see, companies resort to the FREE model with the intention of ’slapping on’ a revenue model somewhere down the road. There never was a revenue model to begin with.

Now, don’t get me wrong… I love free products and don’t want to pay for anything if I don’t have to. But from a business perspective, that is not a sustainable or savvy model.

First, Niklas Zennstrom and Janus Friis created KaZaa. Next, they re-invented the wheel and developed Skype. Today, they announced a $45 million round of financing for their newest venture - Joost. This number seems a little ridiculous for an A round, but who am I to talk? Their track record says it all. These guys could have started a social network for poodle owners and still raised the same amount of money.

After two big successes already, investors lined up to finance their newest endeavour. I’m sure they were all drooling and itching to get in on this new project. Furthermore, I’m guessing that the Joost boys got everything on their terms, including a premium valuation. Successful players in the deal included Sequoia Capital, Index Ventures, Viacom, CBS, and Li Ka-shing. Perhaps Ka-shing will change his name to KA-CHING if this investment pays off. I just hope I can get a chunk of the IPO one day…

Hey… I have an idea for a series that could be streamed via Joost. The series would be focused around two superheroes who like causing chaos, re-inventing the wheel, and making a lot of money in the process. They would call it ‘The Disruptors’. Need I say who the main characters would be?

These European boys have a passion for disrupting the party and stirring up sh!t. Nevertheless, their strategic intuition, superior branding skills, and forward-thinking abilities cannot be ignored. I can’t wait to see their fourth venture. And this time I want a piece…