Questions for Esther Dyson

Esther Dyson is an international investor and advisor to an extraordinary number of digital media and marketing companies. She has stakes in such Web stalwarts as Technorati, MeetUp.com, Dotomi, and Visible Path, as well as lesser known U.S. and overseas companies like Eventful.com, Vizu, and Riya.

ClickZ caught up with Dyson in the wake of her recent travels in Asia. The conversation hit on a range of topics, including her take on digital lifestyles in India, marketing to small business in the “Office 2.0” age, the Google/YouTube buzz, and what she thinks is under-hyped at the moment. She also shared her own list of favorite Web sites.

Q. You’ve been traveling a lot lately. Any observations about digital lifestyles and marketing outside the U.S.?

A. One thing Americans completely miss is simply the [size of] the rest of the world. If you’re building new software, you can build it for the American market, which is 300 million people, max. Or if you look outside, there are several billion people, not all of them yet online, but they’re coming soon.

There’s a lot of people who get to the Internet by cell phone. I’m an investor in a little cell phone payment company in India. The notion of paying by check just doesn’t happen in emerging markets.

Q. The atmosphere around the Web seems very excited to those of us who have been covering it for a long time. Is the enthusiasm of the media and investment community at 1999 levels? What are you most interested in at the moment?

A. It’s not quite that crazy. But there’s a lot of frenzy and a lot of people are funding fundamentally redundant stuff. You need a certain amount of redundancy in the economy, but it’s crazy to think there are going to be 30 companies that are going to have 20 percent market share each.

I was just at this Office 2.0 conference. A lot of people think Office 2.0 is a spreadsheet in the sky. A lot of it is management of activity rather than management of content. You have something more like a spreadsheet where people can manage their own interactions. It’s peer-to-peer, not necessarily top-down and hierarchical. It’s very different from your traditional heavyweight corporate workflow.

Q. And how do you think advertisers can get involved?

A. First of all, they’re often not welcome inside the corporate world. Whether it’s on your spreadsheet or on your task manager, for a corporation, they’d rather just pay the money and be unencumbered.

What’s interesting about Office 2.0 is, like eBay and Google, it’s bringing the power that used to be available only to large corporations to small companies. For people who market to small business, it is an opportunity, because a lot of the stuff is going to be Web-based. If you can have your tool sponsored by an office supply company, that makes a lot of sense for everyone involved.

Q. There’s a ton of buzz specifically around social networking and video right now.

A. Gee, I wonder why.

Q. …And a lot of what’s written has to do with audience size, valuations, and mergers. It seems very much driven by the investment community. What’s being overlooked?

A. One thing that’s being overlooked is that YouTube is worth a lot more to Google than to most people.

Second, I think the value in the long run is not going to be “Oh gee, I put an ad on. I got three more impressions.” It’s using the ad more effectively to be part of the conversation rather than a decoration on a page. What marketers need to do is figure out how to use this technology, not simply to decorate it. That means having a sense of humor and figuring out where your product comes in. It requires imagination. It’s using the medium, rather than just inhabiting.

Q. I want to talk for a minute about click fraud, spyware, spammy affiliate tactics, all the unsavory marketing happening online. You’ve written recently that the advertisers will ultimately need to drive the clean-up of publisher networks that are supporting much of those practices. How do you propose they do that?

A. It will vary. If I’ve got 8,000 pairs of green sneakers and I’ve got to get rid of them and I don’t care about my reputation, [nothing will deter me]. If I am a reputable advertiser, and people like ClickZ, Ben Edelman and Stop Badware are really coming after me, I’m going to reconsider. Please keep making this point.

Marketers are the ones inserting ad money into the system. Consumers, and more specifically people with a voice like you, need to start holding them to account.

The fact that they didn’t know is just not a good enough excuse any more.

Q. What sites do you visit most often?

A. Flickr, The New York Times, Technorati, and a whole bunch of different travel sites. I’m pretty transaction oriented. And of course, Google. I’m a very long tail person.

Q. What’s one of your long tail faves?

A. Sunlightfoundation.com , where you can find out what your Congress people are up to.