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Seeing how Twitter’s every move is being scrutinized, it reminds me a lot of Facebook circa 2007-08.
Like Facebook, Twitter is essentially a communications tool. But unlike email and chat, what Facebook and Twitter (as it continues to grow) are also navigation tools, look at the Top 10 beneficiaries of Twitter’s surging traffic:
And here is the trendline for each:
Twitter’s growth has been nothing short of spectacular, but I repeat what I said: Twitter is 2009’s version of Facebook… and before you know, I predict Crapstr will come along and steal Twitter’s thunder in 2010.
Navigation, Content and Communication
Google would be navigation, clearly they won that game. They are now moving towards communications, with things like Gmail… but as email morphs into social networking, they are now moving into that space more and more.
This is why I think Google and Facebook are the real enemies or combatants in that space.
I don’t see MySpace and Facebook as competitors… and this kind of supports my argument that moving forward, MySpace will be increasingly a competitor to Microsoft’s MSN.com and Yahoo.com, which both aggregate content and editorialize it. This also explains why MSFT invested in Facebook, not just to avoid Google from buying/ investing in Facebook, but also as a proxy to fight Google on the communications front.
MySpace will be an entertainment hub, Facebook will be a tech platform, basically, used largely to communicate. Long term, even if Facebook seems to be more valuable, MySpace will generate far more revenue.
Consumers - the engine that kept the American economy humming - seem to be losing confidence, and the ability to shop. From NY Times:
Suddenly, our consumer society is doing a lot less consuming. The numbers are pretty incredible. Sales of new vehicles have dropped 32 percent in the third quarter. Consumer spending appears likely to fall next year for the first time since 1980 and perhaps by the largest amount since 1942.
Well… I will say this, up to this fall, when I would send out follow-up emails to folks at other companies, I’d say 99% of those emails would go through… then in September, I saw about 5-10% bounce back, now, I’d say 10-15% seem to bounce back. Not all of those are explained by layoffs, but a good portion are.
Wordpress: when I want to choose a category, I don’t like to have to scroll down dozens, if not hundreds of categories (especially on our TenMojo.com Top 10 list site)… I’d like to be able to start to type in the category and have an auto-speller list all of the pre-existing options.
Gmail: why do I have to scroll all the way down a message before pressing Reply or Forward. I know the commercial reason why: it’s akin to malls making you go around before taking the next escalator… it forces you to walk by the stores and see the sales… Gmail is similar, by having to scroll down you have to see the text link ads. However, when you are emailing someone back and forth frequently, the thread can be very long… and this becomes tedious.
Please, just do these two things.
More suggestions to be filed under “Assuming you care”:
You have to wonder:
Yahoo! gets most of its impressions in Y! Mail… and mail is notoriously hard to monetize.
Yet Google - who is printing money thanks to their search domination - invested heavily to get into email with Gmail. Is that smart management or allocation of capital? Not sure.
Of course, email is the biggest social networking platform out there (more here)… but then again, social networking inventory is really not monetizable… so what gives?
More on social networking’s woes with monetization here:
Related: Social Media
- Connecting the Dots: Why Social Media Fails at Generating Revenue
- Why Social Media and Advertising = Fail
- Dark Cloud, Meet Social Media. Social Media, Meet Dark Cloud
- Social Media Hype Train Continues
- When Will Social Media Get It?
- Why Social Media and Beacon Are Doomed to Fail and What Facebook Should Do
- Social Media Growing Pains
Xobni is about to sell to MSFT, supposedly. I think that is a natural home for Xobni; while in the short term Xobni is limited in terms of capability, email and the inbox remain central to all communications, so maybe selling too soon is not the best decision, who knows.
But I wonder where the entrepreneurs who build companies are. Facebook deserves some credit for trying to remain independent and build an actual company. Let’s face it, Facebook could have very easily been seen as a simple product part of Yahoo!, MSFT, Google, Viacom, IAC or News Corp.
I am not sure if Facebook remained independent, however, because of a deep belief that they should remain independent; I think Facebook did not sell because every time someone made then an offer, Mark Zuckerberg and his Board thought they were worth more.
The reason for that is practical: it takes time for a seller gathers all of the documentation and submits it to a buyer, the buyer takes additional time to assess all of that info and conduct some due diligence. They maintain an eye on developments and new milestones, but the buying party then submits an offer largely based on the info that was submitted, and not the additional material. But the selling party has access to more information and - assuming the company is growing and going in the right direction - more bullish on their prospects and value. This is a very normal thing to consider in M&A.
I know the feeling all too well: since Q2 2006 we have had informal M&A talks with different parties and each and every time, what someone was willing to pay (even if admittedly it’s always been informal) has been a bit less than what I thought we should sell for. Moreover, of the lot, the two companies who seemingly have agreed to what we were seeking in a potential sale never backed it with an actual term sheet, suggesting that they were being nice and diplomatic and not sincere (I am not saying they were not sincere in overall talks etc., I am referring to them seemingly agreeing to the price but not backing it up, so not sincere in believing we were worth what we were asking for, basically). Frankly, money was always secondary to fits and the other deal details.
Anyway, the thing is, and I swear this is not gamesmanship, I actually think we have a business that can remain independent and pull the rug from under many traditional media companies whose cost structures and overall modus operandi simply will not compete with us. I could list about 74 reasons why over time, it’s easier for a disruptor in online video content to beat a traditional media company, that does not mean that we’ll put anyone out of business… it just means we can create enough value and build enough revenue to remain independent. Bear in mind, value does not mean generate more revenue, it just means have investors be more bullish about your prospects than others’. Google, for example, does not generate more revenue than most companies, but it’s a Top 10 company by market cap.
This is where Paul Graham is somewhat right: ultimately, would-be buyers did not offer enough for the respective sellers. All sane business people realize there’s a price that is worthy of accepting even if their head and heart says they can continue.Google itself could have been a mere search box in Yahoo!, MSFT, [you name it] but no one thought they were worth much. Truth is: even the Googlers themselves did not really see how big the market would be, thinking that invariably if nothing else panned out, they could slap on some Doubleclick code and serve some banners… how ironic then that Google would buy DCLK for $3.1B.
Anyway, it would be nice to see more and more entrepreneurs hatching businesses that are built to last, and not built to flip. I guess it would also be nice if entrepreneurs weren’t driven by money… which begs a whole other post on the matter.
If I were a MSFT exec I’d lose my mind seeing this:
That’s right: you open up Microsoft Outlook and what do you get when you search for something?
Google Desktop Search. I’m not saying that buying Yahoo! would help Redmond on that front per se… but the mere fact that Google is making inroads in MSFT’s backyard is enough for Steve Ballmer to eat a chair.
There was a rumor recently that Xobni was to be acquired by MSFT. I could certainly see that happening, Xobni is an email inbox on crack… I saw it at TC40… right now, it’s compatible with MSFT Outlook alone.
While MSFT remains a likely company to buy it (as does Google, believe it or not), I think Facebook should use some of that $240M MSFT money and offer to acquire Xobni. How much would it cost? I don’t know. Xobni has raised about $5M so even though investors want 5, 10, 100x return, I think they would sell for Facebook equity, even if it means at an inflated $15B valuation.
Why? The backers are: First Round Capital, Atomico, Khosla Ventures and I think those funds would love to get their hands on Facebook stock. Had they invested $10-50M, I would not say this, but a fat multiple on $5M in financing won’t make a change on their balance sheet or fund performance… but getting some Facebook skin (you can thank me for avoiding the reference to ’skin on Mark Zuckerberg’) would be preferred, I think.
Let’s face it, it beats cold hard cash from MSFT. Did I just say that? Yeah, scrap that last line… you know what I mean, hopefully. Of course, the initial thinking on this is: MSFT would not welcome this… but if you look yonder - way yonder - MSFT will eventually buy Facebook (no one else will, especially with a $15B floor price) if it does not build a business to IPO… then MSFT might prefer to have Facebook handle integrating Xobni.
All of this is Ash talking smack, of course… but the more I pontificate about this, the more plausible it all becomes…
Especially as MSFT ingests and integrates Yahoo!
Note: Long YHOO.
Related:
- Facebook vs. Google - Clash of the Titans - aka. email is the ultimate social network
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