BERKELEY, Calif. — Once a unique place for hackers and geeks, blogging
and social networking have now become multi-million dollar enterprises where
IT heavies roam in search of money-making opportunities.
Few doubt the growing influence of Web loggers on the media and on the Internet. Just look at thousands of individual blogs documenting this week’s Democratic National Convention in Boston as one example.
The industry itself has shifted from its early adopter stage to an
“awkward adolescence,” according to experts attending last Friday’s BlogOn
2004 conference here. But major IT players like Microsoft, IBM,
and others are finding that they can
embrace blogs instead of fearing them and transition the communication
platform from a technical tool to an enterprise goldmine.
“This is becoming a global phenomenon,” Chris Shipley, BlogOn executive
producer, said during her introduction to more than 300 industry leaders.
“It is not accidental that this is happening in the social media marketplace
and is happening faster than Web adoption. In the last three months, we have
seen tens of millions of dollars of investments in this space. We are
finding a community that is looking at this marketplace and is getting
excited.”
Using aggregation technologies of the day such as XML,
Really Simple Syndication or Rich Site Summary
blogs and personal journals are supplying tens of millions of bits of
information every day. Polling firm comScore Media Metrix recently reported
Google’s Blogspot.com received 3.38 million unique visitors in March alone.
Socialtext CEO Ross Mayfield attributes much of the recent explosion in
blogs to a ease of use and the relatively low cost aspects of the technology
built on top of a Linux, Apache, MySQL, and Perl stack.
“Social media builds relationships. Connection happens before conversation, but still, this is business,” Mayfield said. “What you will not find on your balance sheet is an underlying value proposition of enhancing social capital.”
Some of the major IT players have tossed their hats in the blog ring early. One
of the largest projects is Microsoft’s Channel 9. launched in April, the
community was built in about two to three weeks. Microsoft evangelist Jeff Sandquist said
the idea was to humanize Microsoft and get people talking
“We embed video in there. Lean and mean,” Sandquist said. “People shoot
footage on campus. We edit. We put it up on the home page. There are all
sorts of ways to participate in Channel 9. Not every employee can write a
Web log. Some people contribute video. Some people just take a snapshot of
what they’re doing on any given day.”
Channel 9 also has a wiki
would want to help us edit Microsoft.com?” Sandquist said. “People are
working to improve Explorer. The product group is working with those
customers. There are many different ways to participate in channel 9, and
people can also participate without even visiting the site.”
The revolution is expected to eventually impact all of Microsoft’s
software. For its new Visual Studio Express Edition for C# programmers, the
company is including sample code that allows users to build their own RSS
Screen Saver.
IBM is also at the forefront of social media. Jim Spohrer, IBM venture
capital relations group CTO, said the company is
seeing a lot of value that can be created inside organizations with tools like RSS, Atom and XML.
“Businesses can be more efficient in tapping into their internal IQ,” Spohrer said. “I’m on calls every day with people all over the world, and it
appears that there’s a lot of value that could be captured instantly.
There’s a thing called Coase’s Law that touches on transaction costs inside
a firm versus transaction costs outside the firm. The point is to have the
internal transaction costs as low as possible. This first hit home with me
at a recent meeting. We went out to dinner, we’re sitting around a table,
and there were 15 people other than myself. There was a sense of discomfort
I hadn’t felt for a while, and I realized that I wished I was on a
teleconference with these people. I couldn’t use my tools to learn more
about them and their work, their goals, their achievements. I felt I was in
the Stone Age. I’d have to be very slow to get information and rely on
conversation.”
Spohrer also pointed out that the environment for social media has to get
smarter.
“Cell phones are going to keep getting better,” he said. “You won’t even
have to open up your laptop; you could make a presentation through your
phone. The cell phone, to me, is the more interesting platform to me. With
cell phones, cameras, and GPS, which allows us to get into augmented
reality — walking around with your cell phone in China and Japan, you can
see a sign, take a picture, and get a translation. It’s getting better, but
not as fast as we would like. This is a very inefficient meeting. Look at
the archaic forum. I couldn’t get online with the wireless. And the most
social media is [the program]. There’s a lot of information about people in
here. I just wish I knew more about you in the audience.”
Other major companies active in blogging and social media include Nokia,
which is beta testing a program called Lifeblog. The 30
Euro (USD$36) software platform connects Nokia’s new 7610 camera phone —
and later its 60 Series phones like the 6630 — with a desktop aggregator
that can automatically publish to an RSS feed. The program is scheduled to
officially launch in either October or November.
Apple Computer recently included an RSS aggregator in
its next generation Macintosh operating system that developers can take
advantage of RSS and Atom technologies in their Mac-compatible applications.
And while the giants of IT take their swipe at XML and RSS aggregators,
hundreds of startups are positioning themselves to take advantage of the
situation. During the conference, VC investors like John Zeisler, a
venture partner with Gabriel Venture Partners, are keeping their eyes on the
future of social networking.
“You have to start at the bottom of the pyramid — with the technology —
before you can move up the stack,” Zeisler told internetnews.com .
“There are a lot of startup companies that are working on bringing this to
the enterprise. Some of the funding will come from large companies like
Microsoft and IBM. Some will come from investment houses. But RSS and
blogging is in its very early stages. this is the cognoscente.”
Place Your Ad Here
As RSS goes mainstream, publishers have also started experimenting with
ways to make their feeds pay for themselves.
For example, the New York Times partnered with blogging software maker Userland to provide
ad-free news summary feeds; InfoWorld.com and some other publications have
begun inserting plain text ads immediately after the text of their RSS feed
items, much as Yahoo Groups mailing lists do with e-mail subscriptions.
Daypop.com — a current-events search engine that crawls major news sites
and Web logs — paid its bandwidth bills for the year simply by placing ads
on its front page and inside its RSS Top News feed. And then there are the
myriads of value-added services that sell custom RSS feeds based on
searches. For example, RSSJobs.com will monitor the results of your job
searches on HotJobs, Monster.com, and other sites, and deliver the results
in an RSS feed.
Blogs are also breaking the rules when it comes to traditional marketing
methods. Founder and COO of ActiveWords.com, Buzz Bruggeman said his company
launched its first product in 1999, just before the Y2K event.
“We didn’t sell a thing for nine months. Then the dot com crash hit us,
and we didn’t sell a thing for nine more months,” Bruggeman recounted. “So I
had to figure out how these things work. I read a little book called the
Cluetrain Manifesto. If a market is a conversation, what if a product was a
conversation? How could I get bloggers to engage in a conversation about our
product? I found who the really smart bloggers were, sent them our software,
and they began writing about our product,” he said.
“More than half of our downloads
came about because of people blogging about ActiveWords. If it’s about
making it easier, making it better, and participating in this dialogue, it’s
extremely important. We got a four-star review in a major publication that
has a circulation of 2.3 millions. They said, ‘Get ready. And brace
yourselves for the onslaught.’ We got 32 downloads. Later, [Microsoft
blogging guru] Robert Scoble blogged about our stuff, and we got 400
downloads. We need to learn how to leverage this stuff.”
No Fear in the Enterprise
So how should corporations contend with social media? Lisa Poulson, a
business consultant with Kirtland Enterprise Group, suggests enterprises
watch and learn.
“There are a lot of people who have a lot of opinions about every
corporation, and they’re having conversations. That’s free market research,”
Poulson said. “A corporation that is afraid of the participation that comes
with conversation has larger problems. With social media, corporations lose
control of when news gets released. That’s OK.”
Poulson also told internetnews.com that public relations agencies
have to be flexible in using blogs and other social media.
“PR firms love to control the message, control who says the message,
control who has access to who says the message and the timing of the
message,” she said. “Blogs upset the applecart in all four ways. But
building that credibility and trust are still the basis for that individual
relationship.”
As in the case of Channel 9, Poulson said that the issues being discussed
are not the voice of Microsoft directly, but of its user base. In that case,
she points out that third-party sites can then give validation to the
company’s message or at least serve as a public domain for discussion and
valuable customer feedback.
Editor’s note: Internetnews.com freelancer Craig McGuire contributed to this report.
