Anti-Social Networking?

We are all like kids in a sweet shop. We just can't get enough of social media this and social media that, what's our Klout and the next best social network.

It's as if socialising never existed. And as everything grows like topsy we all vigorously defend the right to free speech. Shame on China, shame on Arabia for not allowing Facebook and Google in - it should be the right of every person to have an account on which to post silly pictures of their cat and share anti-Muslim jingoistic emails from outraged Americans.

We are a generation (even us oldies) who have re-invented the term social. I mean, you are simply not influential if you can actually talk to important people - you have to have an extremely large network of followers who hang on your every digital word to be really influential these days. 'What goes on on tour, goes on YouTube' and other phrases that have entered our lives and suddenly what we do is far more public. We fight for data privacy and then we log into Facebook and make sure our profile is 100%. We 'out' Ryan Giggs on Twitter but we abhor spam attacks. Life is suddenly full of odd paradoxes.

But what of the legacy? Today, if I was so inclined, I could seek out chatrooms which trade in private bank data by the batch of thousands, I could join interest groups that organise Jihad, I could become a member of a pedophile ring, I could join groups and groom young children for all sorts of things, I could join sites which cater for the most bizarre sexual acts in life. The world is my oyster.

In that morbid and mundane place we call the real world, people starve and crimes are committed by weird people. Online, people are cool and the only crimes are our lack of imagination and a low PeerIndex score. Losers are those who haven't joined tumblr or received hair removal from Groupon. Pedophiles are merely active social networkers, after all. We can organise raves, parties and terrorist acts while getting to the events on special offers on lastminute.com. The world is limited only by our imagination.

I have yet to hear the term anti-social media or networking. We have yet to have any real impetus on law making that embraces the internet and social networking. Groups will fight it as it spoils the fun. But it will come, I suppose. You can have too much of a good thing.
We are in an important period for the digital world. The fever pitch is high as valuations get talked up and the last thing you want is law makers stepping in and spoiling the fun. But we may be creating the easiest and most useful ways for anti-social people to commit their anti-social acts.

Here's an interesting statistic. Crime has not gone down any but car theft is at it lowest for years. I wonder what all those artful criminals are doing these days? Checking who's online, who's travelling on Tripit, who is buying and selling what on eBay, scamming us on our Microsoft support? (Surely we are all just glad of a call mentioning Microsoft).

At some point, I dare say we will all sober up from the party and with sore heads survey the mess that surrounds us. It will have been such good fun at the time that we just didn't see the obvious happening. But we will see it some day.

When?

Roll Up, Roll Up - Everything Must Go

Fired on by Arnold Schwarzenegger's garage sale in California which saw old bikes, lawnmowers, sofas and old 8 track tapes raise an approximate 89 dollars and 15 cents to dent the state's budget deficit as much as gnat would the grill of a speeding juggernaut, Gordon Brown is putting out the country's old assets to help reduce the £175bn deficit.

From tomorrow you should be able to bid for the Tote on Ebay and Barclays will probably handle the student loan book as they are experts in taking toxic debt and turning it into £millions of profit for themselves and the alchemists who touch the rubbish with their financial version of the Philosopher's Stone. They are up to their old tricks again as with the Protium gag of last month, this time with £4bn of Collateralised Debt Obligations worth about as much as a knackered push bike in real terms. After those boys have finished with it there will be more capital on their balance sheet, a hefty book profit on a new loan and around 45 new millionaires after a few strokes of a pen and two fingers at the taxpayer and the FSA. The Student Loan book should be a doddle for clever people like that.

There are some who question the prudence of our PM on financial matters, would you believe. This fire sale should raise around £16bn to help reduce our rather desperate position and probably not inspire all the credit agencies curious as to how our Bond sales will go after our Quantitative Easing finishes as any more of it will reduce us to a banana republic with no bananas. Some wistfully remember that there was a time when we had rather a lot of gold in our vaults at the Bank of England - today those vaults are stationery cupboards as some bright spark sold it all close to the bottom of the market. Had we some left at this point it might have been handy as all those smiling chaps on TV might have bought some as those in the know will tell you gold is at record high prices.

Some would say only an idiot would have sold our reserves at a cut price and not kept it back for what it really was meant to be for - a rainy day when we were almost bankrupt. But Gordon knew best then as he does today. Fear not, £16bn is just the start of it. Jacqui Smith has pledged to sell her husband's collection of porn videos, Hazel Blears has said she would sell her second home if she could work out with the taxman which one that is while several MPs want to sell the shirts off their backs as they feel they are underpaid and hard done by on expenses.

Welcome to Britain, where it's the sale of the century. Everything must go.

Festival of Media 2009, Valencia

I find myself in a hotel in the wonderful City of Valencia surrounded by luvvies and advertising types who tonight will host their industry 'oscars', having played on the town last night and 'networked' late at the Ghecko Bar.

Some people's idea of 'networking' might be murmuring over a beer at such a bar, for some it is bellowing to be heard in a private conversation in an empty room as they like the sound of their own voice but I think the person in the next door room in my hotel went a step further than most. At first I thought they had found the porn channel on the TV and accidentally sat on the volume button but the rather enthusiastic sounds became a little more human as time went on. They were the unmistakable sounds of either someone trying to impress or who has been paid for. I decided on the former as it started up again with gusto at around 3am before the door slammed and someone left. No names, no pack drill.

So The Festival of Media 2009 is no different from any other event, I concluded.

The Good and The Famous

It is a bit of a marketing coup in that the only direct flights from London to Valencia are via Easyjet and even David Puttnam took the same route as Iberia goes via Madrid or Barcelona at £700 a pop while BA doesn't go there at all. Stelios will be pleased in his nice apartment in Monaco where he hides from our taxman but enjoys his knighthood alongside Philip Green - for him every penny counts.

Online marketing is one of the few industries to have thrived in this recession and it was plain to see amongst the throng of people who had spent £1,800 a head to participate that they were doing well. Stress was eased by copious biscuits, ice creams, glasses of Rioja and free massages on the Adconion Stand, who along with Microsoft Advertising, Orange and VivaKi were the principle sponsors of the event which was organised by C Squared.

There were also many 'Thought Leaders' at the event who had clearly paid significant sums for the privilege of 'Thinking' while a tiny smattering of exhibitors had small but natty stands - including a scaletrix set on the Eurosport stand which I assume was a scaled down model of the Grand Prix to be hosted on the streets of this city in August this year. As it happened, there were all sorts of 'Partners' at the event who vied to sponsor tags to press rooms, to VIP lounges to media to news - you name it, and someone sponsored it. Such is the way in the media, so I'm told.

I met a nice guy on the first night, Phil Cooper who is the CEO and founder of Utarget and who had recently sold a majority stake of his company to Fox. He was busy preparing his talk for the next day but he wasn't bellowing loudly in an American accent to make sure everyone heard him in an empty room nor, to my knowledge, was he the person in the next door room. Dare I say it, he seemed quite a regular guy.

Day One - Transitions

The theme of Day One was all about transitions which was to remind us how media was changing in terms of presentation and how we could all spend more money than before on marketing. It's true that internet marketing has brought a sea-change in the possibilities of not just targeting people but analysing the results too. But the industry needs to get rid of this cliquey 'scam' image of people passing one click to the next and amassing enormous clicks and revenues very quickly for few discernible results. For every piece of content you produce, someone, somewhere can earn money by passing it around and promoting click throughs which most would dispute actually occur and certainly have little to do with the advert and product. It seems that automated click throughs are at the heart of the whole set up and there is a great deal of money to be made on this. Just ask Google.

The Power Play of the day came from eBay and Doug McCallum, VP of eBay EMEA, who was kissing goodbye old models and extolling how eBay was changing to get diversified revenue streams. This is a point in question - eBay is one of the chosen platforms for scammers and it is too easy for them to play the game while eBay itself has moved away from its roots of 'stay at home' millionaires, ditched the smaller traders and focused on big-spending corporates who want to buy and sell on its platform. The trouble is, until it shakes free of the scammers then people will not trust it too well, no matter how much the nice words sounded.

So I settled for the talk entitled 'Are you a re multiplier' and found that if I wasn't, the person in the next door room probably was.

Day Two - Recession and Innovation

From 'Can clients understand IP?' to 'Seriously Social Media' it was all about pioneering communication change and online advertising. The recession has been a bad time for traditional advertising but it has been a great success for online stuff - the industry grew this year at a very sharp rate. The JC in JC Decaux was at the event to augment this fact and how their bus stop and billboard ads are no more and how it will all be online soon - but not yet. After all, we still like to see black and white pictures of Posh and Becks peering at us through the tattoos, Armani underwear and labelled perfumes on the streets of Milan. Tradition cannot change overnight but it can certainly increase spend.

There were some good talks on 'Determining media value in a recession' and 'The Future of Targeting' - all very relevant if you are watching the pennies. But the over-riding message was that the only way out of a recession was to spend more on your brand and more on social media and more on everything, in fact. There is a good logic here - there is no point in stopping spend on marketing in a recession but there is also a profound message about getting value for what you pay for. That has yet to be determined in some quarters but that is always the beauty of the media industry.

Numbers count and science has little to do with it, darlings. Just sup the free drinks and lunches and they will do the rest.

The Oscars

Which brings me neatly on to the 'Industry Oscars' tonight which I shall sadly miss. But when we get awards for 'Best use of the digital landscape' and 'Award for branding bravery' I think it's time to beat a path to the airport. However, I should point out that the Dove Pro-Age campaign is short-listed in the latter but then again so is 'India votes: To shave or not'.

I leave you with the advert on the back page of the Delegate Book from Advertising Week who have a show in New York in September - 'Kudos to the Festival of Media 2009 for progressive leadership and vision.' It did not slip my attention that the advert was placed before the event.

Book up early for next year, luvvies. At £1,800, you know it's worth it.

Twitter Me, Baby

I was at a party last night, some 300 people in a marquee at the 50th birthday of a good friend, Nick 'Shirtie' Gray. I knew around 30 people there and spent my time trying to speak to them and for us all to hear each other over the babble and music. To my mind it was very much like Twitter - lots of noise, irrelevant comment and inconsequential trivia verging on the immaterial and inevitably you gravitate to the people you know and trust as they say the most interesting things.

I suppose I don't seem to get this Twitter phenomenon from many angles. Then again SMS was an unlikely winner for me - initially a service left in by phone and airtime providers as a back channel for administration purposes, someone had the bright idea of introducing the service as a chargeable item and the rest is history. As it was already built into the service, there was no incremental cost of provision and so any charge was pure bottom line. Who would have thought that sending a short, almost illegible text to lots of people would ever take off? Now we send hundreds of millions of them via every airtime provider - and telecom companies could not be happier.


Twitter is described as micro-blogging, social network messaging or the SMS of the web. But here's the odd thing - founded in 2006 and having 34 employees, Twitter has raised around $57 million of venture capital money, the latest $35 million of which was raised early this year. Yet it has still to make a bean of revenue - in fact, it has a business plan, if you can call it that, which has no model by which it can charge money. What it does have is well over 5 million users from me to Barack Obama and in between many celebrities and important people, and then the cuddly girl from Essex who follows everyone, bless her.

Monetisation

This is the new word which Silicon Valley uses which is the process by which a company whose sole business model is to accumulate users, subscribers or followers can extract cash from its 'success'. The VCs behind Twitter must have something in mind - one of them is Jeff Bezos, the founder of Amazon and he knows a thing or two about making money. But Twitter may be different. Users of the service cringe at the idea of commercialisation of what they see as a 'pure' world of 'tweets'. So offering premium services or adverts alongside or embedded in tweets are frowned upon even though some their parties offer such a service. And that's the odd thing - lots of other companies are making good money off the back of Twitter, like offering advice on how to tailor tweets to get your company messages or news over to users or to promote blogs. Many companies have come out with tweet aggregators or filtering services, some offering mobile tweets - it seems the only people who cannot make money are the people who actually made the service in the first place.

The No Business Model Company

Rather like Facebook, Twitter has a dilemma ahead. Do they continue to offer a free service and just accumulate users, allowing other companies to make money while they just have fun or do they cheese off users big time and start charging for use of part or all of the service?

The latter would seem to be a non-option and many companies have fallen foul of such a business model - what is given for free is very hard to charge for afterwards unless you tell people up front this is what you plan to do. Twitter has always said that would not be done.

So there is only one other business model that works. Twitter, like Facebook has a notional value as a company. The CEO, Evan Williams, has already allegedly turned down at least one offer of $1 billion + for the company and it is reported that Google are stalking Twitter as its prey. It seems that perhaps the problem of monetising Twitter could be left to someone else, like Google.

We have seen that model at work previously. Skype came out with its revolutionary IP telephony service which allows free phonecalls across the web. Even better, it allowed IP calls to be routed to callers on standard or mobile phones by transporting the call largely for free and then just popping out at a local exchange or cell and the caller just paid the local call or reduced mobile rate. For international calling it is superb and with some new business services like voicemail, SkypeIn, and conferencing it is even better and the quality is now very good. As Skype took off with virtually no revenue, in came eBay and paid $billions for it. Since then, little has changed to either company, leaving the investment community to scratch their heads as to why eBay would have blown so much money for so little added value or profit to its business.

Twitter has that similar feel to it - even if Google were to buy it, how could it really allow Google to become a more profitable company if it were not to tamper with Twitter's model of free service?

I have blogged recently on Google and one angle is that Google wants to create more of its own content, particularly as a source of news. Twitter has proved very valuable in getting short news flashes into circulation about incidents but it can also be the source for rumours. While Google might have plans to be a news service of its own, with millions of freelance twittering journalists in its armoury, the problem will be the authentication of news. It could just become a platform for rumour, smears, innuendo and libel rather than an authentic, approved news service.

In terms of how the VC money has been spent, Evan Williams himself has been vague on why they even raised it and you have to suspect that when notable companies like Benchmark give money for no discernible reason from the founders, that they have other options in mind for themselves. A sale of Twitter is almost the only exit route that will 'monetise' their investment.

Where that leaves Twitter's users for the future is anyone's guess at this stage.

Scalability

One of the problems that has persisted with Twitter has been its ability to cope with scaling. Unlike SMS on mobile devices, the network had the built in redundancy to cope already there. Twitter was very intermittent when I first tried it about a year ago and a few re-writes of the server technology has got it into better shape but that does pose questions on the future, particularly if Twitter does become some kind of advertising or news service.

The inherent technology has an API to it that has allowed many companies to capitalise on Twitter. In can be embedded in other software and so the aggregation and filtering services have been easy to make while having Twitter in Facebook has extended its reach. It is highly likely, amid all the associated publicity, that Twitter will at least double its user community within the next year or so and this will pose a big strain on its underlying technology which has been tested severely at much smaller levels of users already. I suspect that is where a good deal of the VC will get absorbed.

This week in London, some people behind Lastminute.com launched a new service for companies to advertise down Twitter. From what I heard on the radio, Twitter purists will squirm at the thought, and I think this is where a risk to the plan lies. Bright sparks can see this as some kind of ticker tape advertising service which can embed logos and neat messages. If that is the case, I think users will go nuts as a well as the service getting stretched to breaking point to cope with the traffic and potential increase in resource use.


What Are You Doing?


The natty catchphrase that goes with Twitter is the raison d'etre. From announcing you are walking the dogs to watching the soccer, Twitter is the platform of the mundane with the occasional chirp of note. It is not dissimilar to everyday life or my party - eventually we will gather those we appreciate around us. Thomas Power, co-founder of Ecademy, sees this as the third iteration of the web where people will follow us having found us. I think there are some flaws to this logic. We are currently, as a society, obsessed with the trivial and things like Big Brother seem to be a huge success because we are fascinated by watching what other people do even it is incredibly boring. Maybe it's our animal instincts coming to the fore - we want alpha people to follow. But I can't help feeling this obsession with knowing if someone is having a cup of tea or not is short lived - soon we have to get back to what matters.

Or do we? Tweet on, baby. Who are you following?

Where Next for eBay?

This year's annual eBay gathering eBay Live was not the usual happy-go lucky affair celebrating the rise of the individual, small time seller. The expected 10,000 attendees was rumoured to be much reduced as the auction pioneer experienced the effects of boycotts from the small sellers it built its business on.

One of the more controversial areas in the firing line is the new eBay seller transaction ratings. In a move to stop retaliatory negative feedback, eBay has introduced a new system where sellers can only leave positive feedback ratings. Lorrie Norrington, President of eBay Marketplaces said, 'Building trust is a priority for us and it should be for you too. But some of our users have developed bad habits.' It was part of a talk that received much booing.

There was much talk of small sellers quitting and moving to rivals, many talked of lobbying Google to become a credible rival. Meanwhile eBay is changing. CEO, John Donahoe, stated 'The Company wants to operate less like a car-boot sale and more like a shopping mall'. Therein lies one of the issues.

The issue of trust in using eBay is a major problem as it has long been dogged with an image of dodgy dealers, scams and fraud. I have personally been on the end of an attempted scam when having bid on a car and failed to win, I was offered a 'second chance' at my derisory offer price. Being the trusting sort and tempted by an amazing bargain I was completely sucked in by the official-looking eBay email and so ignored the fine detail that the transaction was to take place outside of eBay. I was given a phone number, email address and details to transfer the deposit of £2,000 by Western Union. Looking back, I was really dumb, but I can understand how people get sucked in by this official-looking scam. Luckily, Western Union came to the rescue and put me straight onto a special security department who informed me in the London area alone, eBay scams were running at the level of around £1.6m per week. Even that could buy enough petrol, gas and electricity for an average British family for a few weeks. Meanwhile, eBay had an email address I could send the attempted fraud to from which I got an automatic reply. I had supplied the email address and phone number and to my knowledge none of it was followed up.

How is the eBay Model Changing?

In the quest to find its nirvana, eBay is moving its model evermore away from its auction roots - the idea a seller could put a reserve on an item and over a short period buyers could bid against each other and buy at the highest bid. In the last quarter of 2007, fixed-price sales accounted for 42% of the total revenue for eBay which is now a staggering $60bn last year from 233m customers. However, despite a 22%leap in profits thanks to a superb performance by its Paypal subsidiary, the eBay core business was pretty flat and listings rose only 4%. Its business is vastly underperforming the ecommerce market where Amazon is growing at 32%.

Part of the cause in underperformance of its core business is that small sellers are not the only ones affected. Larger sellers like Emovieposter.com who have sold over $13m on eBay have estimated to continue their business under new fee changes would increase selling costs by 40%. The claim is that large discounts for the massive sellers will be offered by eBay and there will be changes in its search processes to favour them with good feedback.

eBay seems to be looking to drive toward the Amazon model. Its major issue is that Amazon does not have the weight of all those small sellers to carry and it has virtually zero fraud. What happened to the integration of the Skype acquisition - well there was no mention of that particular 'weight' around the corporation's neck.

Is This The End of The Housewife Millionaires?

So does this signal that eBay is about to ditch the generation of small time business folk who from their homes bought and sold items and made a very healthy living out of it? The stay at home entrepreneurs who used eBay initially to get a supplementary income and found that their reach was way beyond the boundaries of their home and all across the US and beyond. Will this be the end of the era when anyone could pop onto the web, participate in a short auction and find a secondhand barbecue for the Summer months at a bargain price?

Inevitably businesses have to change to maintain their momentum and deliver consistent growth and returns for shareholders but I cannot help feeling eBay has rather cynically ditched the very customers who fuelled the staggering growth of its business. I also think that it has a long, long way to go to match the simplicity, logistical expertise and image that an Amazon has in terms of trusted buying. The difference in the model is that Amazon is a true internet retailer - in charge of its own logistics, product buying, selling and payments; an end-to-end online store. eBay is a platform for traders to sell and buyers to buy, only the payment side is owned by eBay the rest is delivered by the traders and buyers amongst themselves. It still means that eBay is very dependent on the trustworthiness of those who use its platform and their logistical expertise and honesty which means the eBay brand will forever be the sum of its traders.

eBay might have done well to contemplate that as it moved toward the goal of an online shopping mall, because once you have ditched the small market traders there is no turning back should eBay fail to achieve its goals. I think it's a massive gamble.