I’m no developer, but from vantage point, Microsoft scores one today against Apple for embracing Adobe’s flash. In fact, if the game was football, this would be a touchdown. How so?
1- As Google’s CEO Eric Schmidt is lobbying that a Microsoft acquisition of Yahoo! would break the Web, Microsoft shows that it can embrace another standard on mobile that competes with one of its own.
2- Of course, for any handheld to function and thrive, it needs flash… because flash is ubiquitous in online video. Video will undoubtedly drive wireless entertainment and mobile advertising. I am not saying that Apple and its iPhone will not do well on this front, but it won’t do as well as it should due to its snobbish rejection of Adobe’s flash. So in this context, MSFT just gave its own mobile OS a shot in the arm by embracing flash.
To put this all into context, from News.com:
Flash Lite has several limitations compared with regular Flash, beyond the inability to support much of Flash 9. Apple CEO Steve Jobs rather emphatically declared his disdain for Flash Lite at Apple’s annual shareholder meeting, saying Flash Lite was “not capable of being used with the Web.” Murarka declined to comment specifically on Jobs’ put-down, but noted that Flash Lite ships on 500 million mobile devices.
He did acknowledge that developers using Adobe’s Flex tools can’t build Flash Lite Web pages, although the newer CS3 suite of tools does support Flash Lite.
But one huge advantage of Flash Lite is that it’s currently available for mobile devices. Microsoft’s Silverlight for Mobile is not.
Silverlight is Microsoft’s attempt to rein in on Adobe’s position in the Web development market with Flash. Microsoft is fighting an uphill battle, though, in trying to get Web developers to build sites using its technology as opposed to Adobe’s.
Then again, I am biased, because flash is integral to WatchMojo.com on our property… but on syndication network, we are as neutral and agnostic as you can get.
We’ll have a few pieces of news pertaining to Adobe ourselves…
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WatchMojo NewsletterWhat if advertising does not work? Well, it doesn’t. Advertising works because of economic determinism, but in odd ways.
- If no one advertises alongside a piece of content, the price of that real estate falls enough to make it financially viable to be there.
- If too many companies advertise alongside a piece of content, the price of that real estate increases and becomes prohibitive for many, but for some, not being proves far costlier.
In this context, advertising has nothing to do with short-term ROI, but with necessity, or to quote Darwin, survival.
Speaking of ROI, however: at Paid Content’s Future of Business Media, I heard:
- Tad Smith, Reed Business Information has a very good point: for all of the talk about targeted [web] media being preferred comes the flip side: “If a Chief Marketing Officer can spend $1M on TV, $1M on print and $1M online, but with online you can see that it has a negative ROI, what do you do? What happens when you realize just how much of a negative ROI some campaigns get online. What will that result in? I don’t know.”
I guess ignorance is bliss. He has a good point, but I’d say how much greater of a negative does print, TV or radio “yield”? Of course, you know the expression, if you’re gonna be in the negative, go big!
I think all of this talk is folly. We’ve been down this road before. In 2000, we wondered, search is the second most popular activity on the Web after email and 7 out of 10 websites are found via the Web, but so what.
So what? So Google crushed everyone by focusing on search and here we are today in a Google dominated world.
The next area of growth is video. There will not be 1 Google of video. Too many companies in investing in video and no one platform is taking precedence. While video (and display) advertising are fundamentally different than search advertising, they remain marketing tools… so at their core, they share more similarities than differences.
Video is where search was in 2000-2001: it’s a major component of the online media landscape looking for a business model.
Indeed, a video stream is no different than a search query: it has an informational component and a commercial component.
While a search query conveys intent, a video stream captures interest. While performance-based marketers care about intent, branded advertisers care about interest.
Yes, those who search are looking for something, some times of a commercial nature. But they represent a far smaller component of purchasing power. To build awareness, market share you need to advertise to many more would-be consumers than those who are looking for your product (and online, can do so easily anyway).
This is why video will be far more important than search. Advertising alongside video will capture the attention of those who are interested in informational things that have the psychodemographic you are targeting.
Advertising works, just not in a direct, methodical, linear fashion. More importantly, the payoff comes over time, and sometimes, the time value of money makes the investment seem like a loss-leader.
More on this in “What is the value of a video stream?“
The first wave of Web brands died during the Nuclear Winter of 2001-03: Excite, Lycos et al. were all fantastically strong brands and companies in the late 1990s, but they are all nowhere to be seen amongst the digital media elite. The main argument was that Excite and Lycos - purveyors of the first search engines - all fell in love with portaldom and turned their backs on search.
Search vs. Portaldom
Those who survived, it’s not a coincidence, are those who invested in search: Google, of course, being the leader. But also Yahoo! (it did invest to acquire Inktomi and Overture, albeit belatedly) and IAC, who plunked down $1.8B for Ask Jeeves.
But 2007-08 is ushering in an era where even some those survivors are not going to make it.
- Yahoo!? About to be swallowed by MSFT. It might not disappear, but its future remains uncertain.
- IAC: a mish-mash of brands, maybe, but with Jeeves the butler being kyboshed, it now looks like Ask.com will also be remade as a powered-by-Google search engine.
- Netscape (not a search engine but a browser and portal): AOL pulled the plug on that last year.
Google vs. Yahoo! - How Yahoo! Lost the Web
The Mercury News has a fantastic article on how Yahoo! lost to Google here. I have covered Yahoo!’s misguided decision to power its search with Google as a catastrophic and ultimately fatal move.
Is YouTube to MySpace what Google was to Yahoo!?
As I was writing this, I wondered, if video is indeed where search was in 2000-02 (depending on who you ask and what metric you use), then could Yahoo!’s decision to use Google akin to how MySpace helped grow YouTube by not blocking YouTube embeds on the massively large social networking site (disclosure: WatchMojo.com provides content to both YouTube and MySpace TV).
In all fairness, that’s an unfair question: MySpace is not really directly competitive to YouTube, they were then complementary services. Only since MySpace launched MySpace TV did it compete head on with YouTube. But YouTube has since Day 1 been as much as social networking as it has been about video. In fact, both MySpace and YouTube remain communities.
So in that context, while MySpace remains the largest social networking site in the world, YouTube’s lead as the largest video file sharing community continues to grow. Are these two companies diverging or converging? Is MySpace competing with Facebook (a social network) or YouTube (an entertainment community centered around video)? Oddly enough, if you ask Facebook, they would say they are competing with Google, and not MySpace.
I wonder, over time, will MySpace’s decision to not block YouTube embeds go down in history the way Yahoo!’s decision to help Google does today?
My guess: probably not: MySpace is part of News Corp. now so its future success is all-but-guaranteed. I also think that the strategy of the two companies is different enough for both of them to carve out significant pieces of the pie.
But the fact that Google owns YouTube and is partnered with MySpace by way of the massive $900M ad deal is not short in irony. How so?
Well, Google ended up owning YouTube. So not only did it trump Yahoo! but it also owns the company that poses a threat to Yahoo!’s supremacy in video advertising. YouTube generates 1 out of 3 streams online.
But moreover, in owning YouTube and powering ads on MySpace, Google is in fact the ad network most exposed to social media… What is really odd is that with email being the ultimate communications tool and My.Yahoo being the original launch page… this is really a market that Yahoo! should have owned.
As we hear that Yahoo! will enable videos on Flickr, I cannot help but think how badly Yahoo! story has ended (or, I guess, will end). Why the Flickr story is relevant here, frankly, is that Flickr + del.icio.us (another unit of Yahoo!) = YouTube. See more on that here.
With a few bounces going the other way, Yahoo! could have been Google + MySpace + Facebook + YouTube, but instead, it will be a subsidiary of Microsoft sometime in 2008.
History has a very funny way of unfolding, doesn’t it?
Disclaimer: Long - albeit lighter - on Yahoo!
In 2006, I sat my wife down and told her: I was going to start a company, I would finance it myself until it made sense to raise outside funding or someone showed interest. She asked me a few questions, then I basically characterized the move as saying “instead of trusting CEOs and employees of companies I had nothing to do with and no impact on” I would be betting on myself, my ability to identify an opportunity, recruit a team, determine a business plan and build a company.
It was risky, but pointing to criminal cases like Worldcom, Enron, Arthur Andersen and not-criminal meltdowns like Yahoo! or flat stock prices like Microsoft, I thought it was a no-brainer.
From 2006 to 2008, apart from the odd revenue source from advertising, licensing, consulting, syndication, etc., I have done just that: transferring wealth from my trading account to the company’s balance sheet to cover operations. It’s been risky, no doubt. I think the investment is starting to pay off, but it is indeed crazy by most people’s standards.
Occasionally, however, you see cases where trust in publicly traded companies not only backfires but ruins you.
After seeing Bear Stearns melt away in a week, I turned to Yahoo!’s message boards to see what people were saying. In one post, a man asked how he would tell his wife about the news, news that basically evaporated their retirement money. I feel for the man. He is a victim in this debacle, like countless others. The CEO and senior managers are already lining up their next jobs. The investor, the one we as company managers are supposedly indebted to by way of our fiduciary duty is screwed.
Bear Stearns is not a high flying stock, it’s not a dot com flash in the pan: it is - or should I say was - a venerable 85-year old institution. The stock hit $159 last year, was in the $60s earlier this year, started last week at $45, ended the week at $30 and then sold over the weekend for $2/share.
It’s down 85% this morning, obviously.
It should be noted that the US government stepped in to “help” the company, and a deal this past weekend took place when the markets were closed, after Bear Stearns CEO assured everyone that the company would be fine.
Is it over? You tell me. But Lehman seems to be walking around with a bull’s eye on its back, according to CNN:
Shares of the brokerage firm slid 15% in early trading after the firm said it’s got enough cash to keep doing business. The firm made the statement after a big Asian bank asked traders not to do new transactions with Lehman, The Wall Street Journal reported.
If I owned Lehman Bros., why on earth would I remain in the stock? I am also curious to see how many lawsuits will pour down on Bear Stears and in turn JP Morgan Chase, who bought the troubled financial giant.
Henry Blodget has a good explanation of what went wrong. I touched on this too in “World to US: Who’s Your Daddy?” - based on Blodget’s take, I guess it’s better to sell a part of your financial system to foreigners to avoid what happened to Bear Stearns.
PLAY
