Is the consumer Web another bubble? Entrepreneurs everywhere suddenly think they know what the next next thing will be, and consumers, especially young consumers, are center stage. Venture capitalists are chasing consumer deals again, egged on by some big recent acquisitions. The recent sale of MySpace, after just two years of operation, to NewsCorp for $580 million is the latest example everybody is talking about. (Sorry, Google!)
It seems the Web is a cool place to hang out. “Fortune” magazine’s cover this month proclaims, “It’s time for Madison Avenue to stop worrying and learn to love the Web.” Web advertising isn’t dead after all. You know by the time something makes it to the cover of “Fortune,” things are heating up. But the rules may be changing.
According to Nielsen//NetRatings, community sites are growing faster than any other category, with a 214 percent year-over-year increase in online advertising. I’m not too fond of the label “community sites,” but the Nielsen number captures a clear trend: people are spending lots of time online socializing and connecting.
So what’s actually working: community sites, blogs, personal sharing, hookups, soapbox-ware? Here are some themes to help us understand what’s going on and to predict success:
- The people connection. The site has to be easy and fun to feature yourself and hook up. Finding other people, socializing, and, yes, sex are powerful motivators. MySpace is inhabited by a young, hip crowd. Profile pictures are often provocative, and the site feels like a giant billboard featuring “posters” of people showing off their 93 best friends. Millions find this worthwhile. People who want to hook up are a powerful driver of the consumer Internet.
- More social drivers. Connecting with others is a powerful social driver, but not the only one. Though it doesn’t have the traffic or adoption of MySpace, Flickr motivates by sharing pictures. Sharing with friends, family, and the community at large is a social driver. Collaboration is another social driver, as evidenced with Wikipedia. Hundreds of thousands of articles have been contributed to and edited in Wikipedia. That’s a lot of collaboration. Sites that seem to gain momentum have clearly defined social drivers, such as collaboration, sharing, and hooking up.
- Women first. A friend shared an interesting observation recently: many community sites attract a majority of women early on. By pulling in women, men inevitably follow. Funny how that works.
- Community ownership. Sites such as craigslist and Wikipedia were built by their communities. It’s not just the content most of us associate with the site. The underlying code is developed by a far-flung community of hobbyists, experts, and programmers. The community of people you attract not only use the site but also create the experience and often the tools.
- Openness. A constant, open dialogue with obsessively engaged founders is the hallmark of many successful consumer sites. Blogs and wikis (define) let users post their input and feedback to a company, which in turn responds openly in a dialogue format. Listening to users isn’t an afterthought; it’s defining to some of the best communities. But openness goes beyond communication with users.
Consider the powerful phenomenon of open APIs (define). Through open APIs, third-party sites can easily integrate new capabilities into their own sites as well as post data and share information with your site. Flickr and Technorati are good examples of how open APIs are used to leverage and develop a rich ecosystem of interconnected capabilities and services.
“What about ease of use?” you ask. Most sites I’ve tried, with a few exceptions, are complicated. It takes effort to learn how to use this stuff. That’s OK, as long as there’s tangible benefit on the other end. When there is, people start using the services to hook up, share, collaborate, and just plain old gloat.
The consumer Web is hot. Though I’m fascinated to see how many copycats take good ideas and wrap them in ever-fancier window dressings, there are some novel ideas, too. I love the Wikipedia phenomenon. Backfence is good, too. Del.icio.us introduced a neat hack in the social bookmarking space (but the space’s killer app isn’t yet apparent). I like the idea behind EVDB, too. There are many others. Lots of neat tools and some good technology… and waiting in the wings there’ll surely be some that will defy gravity and take off.
As that happens, new online ad models will emerge. Keep you eyes peeled. “Fortune” may be telling Madison Avenue to stop worrying. What it didn’t mention was this party has barely started, and the rules are still changing.
By the way, I’m one of those people with a great idea for how to make the consumer Web easier to use. My new company will soon launch its beta service for helping people make more sense of the Web. Stay tuned.