MappingTheWeb //

The blogosphere is once again abuzz with “bubble” speculation. This recurring theme tends to pop its head into the blog world every few months. This time though, many are anxious. Some are convinced that the inevitable US recession will stifle innovation and steer the web into some sort of temporary holding cell. This is definitely not the case. In fact, the Internet is headed to more prosperous times in an era where innovation and development will only accelerate.

My first question to those who think we are in a bubble is this: why do you think we’re in a bubble? To be honest, I haven’t seen many ridiculous fundings (Facebook aside), nor a rash of Internet IPOs. A frenzy of unsubstantiated capital infusions forms the basis for any bubble. The subsequent lack of liquidity ignites a sell-off, depreciating valuations. This was the case in the first and only Internet bubble. Greedy VCs, armed with the belief that advertising would pave the road to riches, invested in any and every company with an enticing .com name. We all know the outcome of this story.

The current Internet landscape looks much different. Information is prevalent and infrastructure developments have changed the game. The capital markets have also changed. You no longer need a million dollars to start a company. In order words, the key contributing factor to any bubble has been negated to a large degree.

An Internet start-up can be launched at no cost, assuming human labour is discounted and a computer and Internet connection are readily available. Any given Internet user can leverage open source software and/or free tools. Furthermore, widespread documentation and education are available at no cost. This equates to minimal barriers to entry.

The significance is that anyone can launch a start-up at any time, on any budget, and iterate quickly. The information and tools are available and the cost is negligible. Time is the only real variable. All of these factors lead to a significant decrease in the probability of a bubble as raising capital no longer becomes an issue in many cases.

Note: I am speaking in general terms. Every start-up situation will be different. Having said that, the underlying factors remain the same.

[The Future of Location-Based Advertising] - Back on February 6th of this year, Gavin asked:

“I am interested in what you think about location-based advertising, and its prominence going forward? Do you think it will succeed?”

Anyone who reads my blog on a regular basis knows how much I love the concept of “local”. I see many benefits, both for the user and the company. That in mind, my answer to the stated question becomes obvious. I think that location-based advertising will play a key role in the evolution of the advertising space.

It seems like a lot of companies are trying to re-invent the wheel nowadays. Many are looking to capitalize on ‘the next big thing’ in advertising. Well, they’ll be happy to know it’s already here and I just saved them millions in research costs (thank me later). Location-based advertising, though nothing revolutionary, is both pertinent to the viewer and lucrative for the company. Just think about it for a second. Instead of viewing ads for whatever online shop or site, the viewer is subject to an ad from a business in their region. If further segmentation can be exploited, the ad becomes even more pertinent to the reader. This usually translates to higher conversions for the company as well. It’s really a win-win situation. The downside for the company is a (potentially) pricy CPM. In addition, inventory levels may easily be maximized given a strict set of constraints.

In any case, I see more companies entering this advertising vertical and others expanding into it. From the other side, I see more advertisers leveraging geographic-based advertising to target potential customers. Internet penetration rates are now at a point where inventory levels in a given region make a case for local advertising. This potential supply is lucrative and should be capitalized upon. Mark my word, local is here to stay.

[FriendFeed is the New Hot Sh*t] - Almost exactly a year ago (March 13th, 2007 to be exact), I wrote a post entitled “Twitter is Hot Sh*t Right Now”. Well, a year has passed and the Twitter hype continues to build. The skeptics are eating their words and micro-blogging continues to climb in popularity. This Internet phenomenon may very well be the future of personal blogging. So now what? What’s next? Let me introduce you to FriendFeed…

If you haven’t heard of or checked out FriendFeed yet, it is a must. This extremely useful, yet simple, service has caught fire and become very popular among the A-list tech bloggers. As was the case with Twitter, many think this short-term viral growth will subside. I’m not so sure.

What makes Facebook so viral and sticky? In other words, why do users continue to visit the site on a frequent basis? Answer: the news feed. They are constantly receiving new news about their friends’ activity. This is both interesting and useful. So why stop at Facebook? What if there was a universal news feed that could tie together all the services that your friends are using? This is the basis for FriendFeed.

Once I’ve added my friends, I can see new updates and changes on services like Twitter, Flickr, StumbleUpon, Ma.gnolia, Pownce, or a blog. Not only that, but I can reply and rate the content as well - all from the FriendFeed site. Very cool. The user experience is clean and intuitive. They’ve added only the necessary features and nothing more. I congratulate them on a job well done.

The only thing I don’t like about FriendFeed is their stereotypical web 2.0 logo… but I’ll let that one slide.

What are your initial thoughts on FriendFeed? 

Like I say, the local Victoria tech scene is really starting to heat up, especially in the pure-play Internet space. Historically, Victoria has had very few players in this space, but more and more seem to be popping up on a regular basis. This recent surge is creating a strong sense of community within the the tech region. Another byproduct of this phenomenon is an increasing number of tech events and groups, providing entrepreneurs the ability to share valuable knowledge and resources.

A few of the start-ups that are paving the way in the Victoria pure-play Internet space include:

• DailySplice - Personalized, daily podcast radio.
• Indochino - Affordable, tailored men’s suits online.
• Teampages - Simplified team and league management tools for sports.
• Oprius - Web-based application suite for network marketers.

Two other early-stage players include Zumer and Utilium (both in private Beta) .

I look forward to watching the local tech community grow and prosper. My guess is that we’ve only seen the beginning and we can expect much more to come.

Disclosure: I am on the board of advisors for DailySplice and I have done consulting or informal advising for all the companies listed above.

[Effectiveness of Facebook Apps as a Marketing Tool] - A little while back, I asked readers to submit questions they would like me to answer or blog about. The first one I’d like to tackle was submitted by Mark Evans, who blogs at MarkEvansTech and serves as Director of Community of Canadian-based start-up PlanetEye. Mark wrote:

“What’s your take on the effectiveness of Facebook apps as a branding/marketing tool?”

My cliched first thought was, “Good question”. After giving it some further time and consideration, I’ve come to the conclusion that, as a whole, Facebook apps are not a great marketing tool. Obviously this is a generalization and apps may prove to be a successful strategy for some companies. Let me explain my logic…

It’s all about perception.

Branding and positioning are an important part of any online strategy. Subsequently, solidifying status and credibility within an industry is essential. Still with me? The recent onslaught of Facebook apps has saturated the “marketplace”.  A lack of management on behalf of the social network has driven many to utter frustration with the highly-touted platform.

For this very reason, I think that the introduction of a Facebook app may be more detrimental than advantageous, in some cases, unless extreme caution and delicacy are exercised. A suitable Facebook app would have to provide compelling value and utility. Furthermore, there would have to be a certain level of fit with the exposed community of users.

My guess is that a majority will disagree with this train of thought, but I’m just giving my take on the situation.

In all honesty, I think that most apps are being created for amusement purposes - not as branding vehicles.  The ability to “poke” someone or write on their “FunWall” is great, but these dominant apps may reflect negatively upon your company if you are trying to portray a more professional, sophisticated image.

Jumping back to August 2007, I wrote a post about the short-term success and long-term failure of the platform. I still believe much of that post to be true. The effectiveness of apps has decreased significantly due to the surge of entrants.

I think that more users are starting to see things the same way as I do. For the most part, Facebook apps are more of a hassle than they’re worth.  They cause huge amounts of clutter and force users to scroll down long profile pages to find what they’re looking for. They’re also very distracting at times. What I find most annoying is the increased page load time. In other words, unless you’re creating an app for pure amusement or you happen to be in the business of “fun”, then Facebook apps are likely to be a poor marketing tool unless a cautious, very well sought out strategy is executed upon.