I sometimes wonder why the leader in breaking new startups needs to rehash bas business ideas from the Web’s first golden age, but I guess there’s a need to cover all news.
All to say, a week after All Advantage returns as Agloco, we learn that Boo might too be making a comeback.
If indeed bad things come in three’s, what - or rather, who - should we expect next from the WWW’s graveyard of bad business plans and weak execution case studies?
Actually, I think we already know the answer. Click here for the third one…
Jokes aside, and I can’t believe I am about to say this, fashion is a natural opportunity online, Boo was more of a disaster from an execution and hubris perspective than concept alone (Agloco/All Advantage, in my humble opinion, is plain arrogance and a bad business premise).
In fact, a lot of people are asking if social networking’s many promising niches include shopping in general and fashion in particular. Think about it: is MySpace passing up billions in revenue by not pursuing ecommerce?
That’s a good question.
- We know that MySpace is having difficulty generating substantial revenue at News Corp.
- We also know that MySpace’s founders capitalized on something that predecessor Friendster did not capitalize on: an open network and the promotional music aspect. Could it be that MySpace’s refusal to pursue eCommerce will prove to be the wild card that allows someone else to build market share?
- Mark Jung - co-founder of IGN, COO of FIM - was trying to encourage MySpace’s co-founders to develop the commercial opportunity on MySpace, to which Tom Anderson and Chris DeWolfe were not too interested in (read through the lines in this quote to get a better sense of why Jung left FIM last month).
From NYT:
The bigger opportunity, however, is not so much selling banner ads, but finding ways to integrate advertisers into the site’s web of relationships. Wendy’s Old Fashioned Hamburgers, for example, created a profile for the animated square hamburger character from its television campaign. About 100,000 people signed up to be “friends” with the square.
Fox officials wonder whether this sort of commerce, built on relationships, can be extended to small businesses. A Ford dealership in, say, Indiana could create a profile, said Mark A. Jung, the chief operating officer of Fox Interactive. The profiles themselves, he said, would probably be free, but MySpace would sell enhancements to help businesses attract customers and complete transactions, Mr. Jung said.
Yet here is another place that executives at Fox and MySpace don’t see eye to eye. Mr. DeWolfe discounted the idea of people creating profile pages for small businesses. “If it was a really commercial profile — the gas station down the street — no one is going to sign up to be one of their friends,” he said. “There is nothing interesting about it.”
For now, Mr. DeWolfe said, he has more down-to-earth plans. With the News Corporation’s help, he is opening an office in London to coordinate MySpace’s expansion in Europe. He is cutting deals to let members connect to MySpace over cellphones.
- As you can tell, MySpace’s founders - who were rumored to be unhappy with how little money they made - are less interested in making more money for their new boss, Rupert Murdoch, than to live out their music aspiration dreams. So just because / even though they recognize that money can be mdae by joining eCommerce and social networking does not mean that they necesssarily will. In other words, they might gladly let that opportunity slip to keep the in-crowd happy on MySpace.
- Of course, should MySpace decide to enter the shopping sphere, it need not go out and invest in massive eCommerce infrastructure, there are millions of affiliate programs and potential partners it can sign on - and lock in slotting fees to boot - if it wants to position itself for eCommerce… It’s like some wise men say: no need to buy the cow if you can get the milk for free.
Of course, given MySpace’s founders reluctance to tweak their magic formula and the slowdown in MySpace’s growth, any overtly commercial push on MySpace might prove to become intolerable amongst the MySpace faithful.
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November 26th, 2006 at 4:36 pm
[…] This idea has been commented on already by (among others) Muhammad Saleem at The Mu Life and Pete Cashmore at Mashable. As Froosh points out at HipMojo, News Corp. has been looking for ways to “monetize” MySpace ever since they paid more than half a billion dollars for it. But how best to do it? Not everyone is crazy about the idea of Wendy’s and Burger King setting up profiles for their advertising characters, and it’s hard to blame them. […]
November 26th, 2006 at 5:21 pm
[…] HipMojo.com - Main Street Meets Madison Avenue, Wall Street and Silicon Valley » Social Networking, Shopping and the In-Crowd? An interesting piece on the opportunities of integrating retail and brands into social networks. (tags: socialnetwork article) […]