The 10 Most Important Social and Digital Media Developments of 2009

Year in Social and Digital Media, 2009: Facebook ,Twitter, revenue, Kindle and Hulu

We aren’t going to call 2009 the seminal year in the rise of social media, social networking or any of the novel digital applications and media that fly under the banner Web 2.0. That would be a bit presumptuous. But this year did bring a bumper crop of notable developments across the social Web and digital media, and we thought it would be worthwhile to commemorate a few of them.

We’ve assembled a top 10 list in loosely considered order, of significant themes and plot points in the unfolding story of the remaking of the media landscape — social and otherwise. Enjoy!

10. The Kindle changed everything

So Amazon (NASDAQ: AMZN) introduced its e-reader in 2007, but this year the Kindle has come into its own. This holiday season, Amazon proudly announced that it was sold more Kindles than any other product, and for the first time, it actually sold more digital books than print editions.

But this is a bigger story than just a win for Amazon. For years, e-readers had been something of a laughing stock in the tech industry — big hype, no sales. Now it’s one of the fastest-growing categories in consumer electronics. Barnes & Noble and Sony both had trouble keeping their devices in stock through the holiday season. Numerous firms introduced or announced plans for new devices this year, with many more to come in 2010, leading to breathless stories that run along the lines of “How Amazon Reinvented the Book.” Hyperbole aside, the Kindle and its competitors are forging a new market that Forrester Research is projecting to double in 2010, offering a small ray of hope for beleaguered print publications — from books to magazines to newspapers.

9. The ‘Craigslist killer’

Less significant for the facts of the crime — a medical student allegedly murdered an escort he solicited on Craigslist — than the colorful aftermath, the story of Philip Markoff was a case study in the sensationalism that has accompanied age-old crimes committed with the aid of new media. Markoff was quickly dubbed the “Craigslist Killer,” a villain whom ambitious politicians seized on to launch an attack against an immensely popular and almost entirely benign Web site.

Had Markoff met the woman is accused of murdering through a newspaper classified ad or the numerous escort services that advertise in the yellow pages, this would have been a non-story. But because it was Craigslist, a relatively new and still not entirely understood online service, the case became a sensation, just as have some instances of cyber-bullying and sexual predation on social networks. Thanks to the grandstanding of elected officials like South Carolina Attorney General Henry McMaster and Cook County Sheriff Thomas Dart, Craigslist spent much of the first half of the year bathed in negative publicity, reminding us that in certain circles, that which is new is feared.

8. Facebook and Twitter in the black? So they can make money!

Without question, Facebook and Twitter were the two most buzz-worthy social sites of 2009. But since their respective foundings, both have faced the persistent question about how they plan to parlay a base of users who enjoy a free service into a profitable business. Both took significant steps toward answering that question this year.

First, in March, Facebook took the rare step of divulging some of its financial information, leaking word to reporters that it had been operating at a profit for five straight quarters, and was on track for a 70 percent jump in annual revenue in 2009. Facebook derives the bulk of its revenue from advertising and the sale of virtual goods. Then, late this month, reports surfaced that Twitter was actually operating in the black. The company, whose founders had long talked about developing and selling an enterprise-class product, had apparently scored enough cash from their deals to license real-time content to the search engines of Google, Microsoft and Yahoo that it was operating at a profit. So it wasn’t a down year for everyone.

7. Social media in government

Barack Obama rode into the Oval Office in January on a wave of promises about openness and transparency, vowing to look for technological solutions to every problem the country faces and change the way business is done in Washington. Given that he’d just finished up what most agree was a remarkably tech-savvy campaign, open government advocates had high hopes. How open government has really become after year one of the Obama administration remains a matter of considerable debate, and it seems safe to say that if things in Washington have changed at all, it has been in the direction of incivility and partisan intransigence.

But there is no denying that Obama and his team have spent a good deal of time and energy expanding the government’s presence online. From delivering the weekly address to the nation on YouTube to hosting an online town hall meeting, Obama has been trying to hang on to his new-media credibility. Dozens of new government Web sites and blogs have sprung up, inviting comments from the public, and more federal proceedings are streamed over the Web than ever before. The State Department has begun including new media training in the curriculum for all foreign service officers, and earlier this month the Office of Management and Budget released its long-awaited open government directive, setting a timetable for the agencies to take steps like publishing information online and setting up Web sites where the public has a chance to comment on policies and proposals.

6. The agonies of journalism

Oh, the anxiety! Most are aware that 2009 was not a kind year to the news business. More and more people were getting their news online, aggregators were plentiful, classified revenue was dissipating, newspaper subscriptions dwindled and a sour economy continued to sap advertisers’ budgets. Much of this was not new or even markedly different from previous years. But as the economic predicament grew more dire, the first big-city papers closed shop, beginning with Denver’s Rocky Mountain News and the Seattle Post-Intelligencer, both beta papers in two-newspaper towns. But that left many to wonder how long it would be before a major American city would be left with no newspaper at all.

And so it wasn’t long before an industry’s existential crisis became a matter for debate among policy makers, with the great, still-unanswered question being: can the Internet produce a business model that will support quality, time-consuming accountability journalism of the sort that can be physically dangerous or legally perilous. If not, is this a case of market failure that warrants the involvement of the government? Everyone has an opinion, which made 2009 a noisy place in certain media and policy circles, as Congress held hearings, the Federal Trade Commission convened a two-day workshop, think tanks and industry conventions tried to breath hope into new ideas, and sometimes resurrect old ones. As in the TV industry, the events of 2009 were a dramatic illustration for the news business of the challenges of adapting old media to new, and the growing instability of a model that relies on advertising to subsidize the production of quality content.

Page 2: Miley Cyrus off Twitter? Oh no!

5. Miley Cyrus off Twitter? Oh no!

When the Disney star deleted her Twitter account in October, leaving more than 2 million followers in the lurch, it was big news. A seminal moment in the pantheon of social media developments over the past year? Perhaps not. But by god, people were upset. One fan threatened to kill his cat if she didn’t come back to Twitter. Miley made a rap video (“Good Bye Twitter“) explaining her decision:

Everything that I type, and everything that I do

All those lame gossip sites take it and they make it news

I want my private life private …

Cyrus is hardly the only celebrity to call off the love affair with Twitter, but hers was certainly the highest-profile breakup. It lands on this list because 2009 introduced much of the world to a new method of keeping tabs on people’s favorite celebrities, or at least their ghost-tweeting assistants. For many, it became an all-access affair, where Reese Witherspoon shopping for produce or Ashton Kutcher standing in line at a coffee shop became a newsworthy event (and fertile ground for parody). It was big news when Oprah Winfrey set up a Twitter account, and then gauchely posted her maiden tweet in call caps. Kutcher built a buzz for himself when he challenged CNN to a race to 1 million followers. Professional athletes have been slapped with fines for tweeting during games. During the Wimbledon tennis tournament, announcers on ESPN 2 and NBC (Mary Carillo especially) contorted into unnatural positions to work Twitter references into their coverage, routinely asking players about their Twitter usage in post-match interviews. That wave of celebrity Twitter followers may well have crested in 2009, but let it not be forgotten that, for a time, it was a phenomenon, however unseemly.

4. Social media’s woes: security and privacy

For all of the excitement and surging popularity that have attended sites like Twitter and Facebook in 2009, the social Web has become a favorite target of hackers and malware purveyors. Some do it for fun and publicity, others with an eye toward identity theft or other nefarious exploits. Whatever the motive, attacks on social sites were a recurring theme throughout the year that doesn’t show any signs of abating as we head into 2010. Partly because the sites are so popular, and partly because we trust them with a lot of our personal information, when they get hacked, it’s big news. And an image problem, particularly if they have serious hopes for making inroads in the business community.

Then there’s privacy, which is a big one for Facebook. This year has brought intense scrutiny from some regulators and privacy advocates, as well as its boisterous community of users. Facebook has responded with a series of updates aimed to clarify and simplify its privacy practices. The latest, rolled out earlier this month, was billed as the most comprehensive effort to improve the site’s privacy policy — and make people aware of it — in the young company’s history. Its reward? A complaint filed with the Federal Trade Commission asking regulators to intervene with legal action against the site.

3. Twittering Iran

In June, when Iranian authorities cracked down on protesters following the disputed presidential election, Twitter won itself a new legitimacy as news organizations were expelled from the country and the micro-blogging service became a prolific source of information about what was happening in the streets. The romantic idea that the so-called “Twitter Revolution” — the notion that Twitter was the glue holding together a ragtag resistance movement trying to cast off the shackles of a repressive regime, was, well a little overhyped.

There was no Twitter Revolution, and it is true that the vast majority of the online chatter about Iran on the site in those chaotic days in June was contributed by people writing from other countries. But there was enough real information coming out of Iran at a time when foreign correspondents were filing their dispatches from neighboring countries that the State Department prevailed on Twitter executives to delay a scheduled maintenance outage to keep a line of communication open with the people in Tehran. We saw something similar happen in November 2008 with the frantic Twitter posts during the terrorist attacks in Mumbai. Less than two months later, a jet landed on the Hudson River, with pictures and short messages describing the incident bouncing all over Twitter well before the mainstream news outlets were on the scene. On the occasion of the Iranian protests, the incident that more than any other has established Twitter as something bigger than a novelty, the Onion said it best, as it usually does, when it ran the headline: “Twitter Creator on Iran: ‘I Never Intended for Twitter to Be Useful.'”

2. The race to real-time

As the year unfolded, the online vanguard assumed a growing sense of urgency about information. It became about immediacy, real-time everything: news, social exchanges, status updates. Certainly Twitter, by its design and popularity, had a lot to do with this. Its surging base of users seemed to prove that there was a demand for delivering information in seconds to an online populace for whom e-mail seemed a relic of a bygone era.

Keen to meet that demand, the biggest companies on the Web have been revamping their online offerings with a more real-time feel. It began in March, when Facebook unveiled a redesign that gave prominent placement to a real-time status update feature that looked very similar to what Twitter offers. Several site tweaks later, Facebook ends the year as a direct competitor to the micro-blogging upstart. Couple that with the recent deals Twitter has signed with Google, Microsoft and Yahoo to incorporate real-time updates in those companies’ search results, and it seems clear that a great many well-paid Internet executives have decided that the real-time Web is the way of the future.

1. What is to be done about video?

The TV industry continued to slowly warm to the free, on-demand ethos of the Web while struggling to preserve a business model that came under severe strain in 2009. One notable development came in June, when Time Warner (NYSE: TWC) and Comcast (NASDAQ: CMCSA) began nationwide trials of a program they’re calling TV Everywhere, offering paying subscribers the option to watch premium content on the Web. Much to the consternation of advocacy groups who warn against erecting walled gardens on the Web, trials of the program have expanded to new content and distribution providers.

But 2009 also saw moves by Hulu, acting under pressure from joint owners NBC Universal (now in agreement to be taken over by Comcast) and News Corp., to pull content from sites and services like TV.com and Boxee, a fine reminder that this lurching transition is happening in fits and starts. Then News Corp. executives, in their push to revitalize the paid-content business model, began hinting that Hulu could become a pay site, and are currently locked in negotiations with Time Warner Cable in an effort to extract a sweeter distribution deal, a dispute that could, in a worst case scenario, mean that Fox stations are pulled from the cable operator’s lineup. So the AP caps off the year with a dark story warning that the model of free, strictly ad-supported TV under the generally understood distribution arrangements could be ending.

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