Trend 1: People Power and Web 2.0:
The web has entered its second-generation. As a manifestation of this second-generation Web today we are witnessing the spawning of user-generated, user controlled, and user-validated content on Web. The tools of production of content, from blogging to video sharing, are fully democratized, and the engine for growth is the talent, and capacity of regular folks, who are, in aggregate, creating a distributed labor force of unprecedented scale.
Each of us has knowledge that’s valuable to someone, somewhere.
What does this all mean for Portals and Corporations?
The most successful Web companies today are building business models around or based on user-generated content.
From Amazon.com to MySpace.com to Craiglist to Wikipedia to Flickr, the most successful of the companies on Web today belongs to the second-generation Web.
Even for the regular veterans like Amazon.com and even for companies like NetFlix.com much of the Value comes from their tens of millions of customer reviews. Users click trail on Amazon is used to create better recommendations for those who follow. A query on Google and the pages that one find relevant give feedback that fine-tunes the search algorithms. These companies have found ways to harness the wisdom of the crowd, extracting information that was there all along, just latent and lost.
Indian portals have started realizing and noticing this trend but they still have to figure out the full potential of harnessing the second-generation Web on their portals. The pace of adoption at these portals is quite slow currently. Successful verticals like travel, jobs and matrimony in India are also slow movers in this context.
Successful market portals will have an edge in this regard. But a majority of the portals are still trying to figure out the issue of second-generation Web and how to gain full steam from this latest trend of user-generated content.
They can’t ignore it and are quite sure of it, but how fast they adapt to this trend is still to be seen in the Indian context.
Trend 2: Any Time, Any Place, Any Format, Any Screen-A show is always on
In 2004, viewers tuned in to 2.9 billion music videos streamed from the Yahoo Music site.
In 2005, close to 25 million unique viewers visited Yahoo Music and watched 4 billion clips. But it wasn’t until 2006, when music labels started looking to Yahoo as an indispensable part of their marketing strategy.
This multiscreen video trend is fast catching up across the nations of the world and India is no exception to this trend. All major telecom and Internet players in India have seen a promising growth in the mobile downloads and Internet downloads market in the last 2 to 3 years.
The demand for content has fueled portals like Yahoo to come up with content tailored for all kinds of different screens: first run television shows, original content such as online webisodes of the soap opera and time-sensitive news and sports segments. Once posted such content take on a viral life of their own. Recently STAR India has launched India’s first webisode for “Pyaar Ke Do Naam”. March 31, 2006 saw STAR’s official website, Indya.com, premiering the channel’s forthcoming show, ‘Pyaar Ke Do Naam…Ek Radha, Ek Shyaam’ on Indya Tube.
As content companies scramble, hardware makers are also responding to the multiscreen demand with offerings of their own. Apple’s video iPod and Samsung’s video-enabled cell phones are just the start.
Portals like Indiatimes.com in India are well positioned to gain from this trend. They have the early movers advantage in this category of business model and they are expecting a spike in their short code 8888 based download services in the coming few months.
Many other portals in the new segments and travel segments have been quick to adopt this latest trend. Recently irctc.co.in launched a mobile-based railway ticket booking facility to facilitate booking through tailored for all kinds of access devices and screens.
However portals in India have still time to catch up with this new trend. One reason being that worldwide leading corporations are still working to trying figure out the details pertaining to the demand patterns of these new multiscreen consumers.
This move toward any time, any screen content will also push portal players and other creators to post their wares on third-party sites like Yahoo, Google, and iTunes.
Trend 3: Personalize It
Amazon.com uses purchase and pageview histories to create a unique Web page that includes recommendations tuned to your taste. Netflix looks at past DVD rentals and suggests future choices. Apple’s iTunes and Google Video are prodding radio and television out of the broadcast era and into the dawning age of individualized media.
Today whether it is buying Jeans, shoes, cosmetics or booking an online travel service for that matter, the era of consumer products tailored to personal tastes is fast catching up.
Personalization remains the exception in hard goods but has become a rule online.
This trend has fuelled the adoption of various types of personalization techniques on portals. Techniques like collaborative filtering, choice matrix and fuzzy sets matching have become a necessity rather than just fads on portals.
With increasing pressure on content creation, portals are differentiating their content more and more on the basis of various tools and techniques to personalize the content.
Trend 4: Buy It Now: Acquisition is the new end game
The old school approach is to build a big R&D department and to put smart minds on control and let them come up with something innovative. But today more and more corporation across the world has realized that blue-sky research is fast becoming a drag on the bottom line. They are increasingly taking an alternative route that saves them money, saves extra pains and they get someone else to do the sweaty work for them.
And as a solution more and more corporation worldwide has started buying out small firms that are already succeeding in a new market.
Cisco long ago adopted this approach-acquiring 107 companies over a 12-year period ending in 2005-and along the way became one of the most valuable tech companies in the world. The network equipment manufacturer continues to deal its way into new markets. To expand its presence in the digital living room, Cisco spent $6.9 billion last year-nearly twice its entire R&D budget-to buy cable-box maker Scientific-Atlanta. This is R&D by M&A.
This trend is now evident across the world across the industries especially so in the online world. In 2005, News Corporation entered the social networking fray with a $580 million buyout of MySpace’s parent company. In May of this year it bought online karaoke player kSolo.com and news aggregator Newroo. eBay last year dropped $2.6 billion on voice-over-IP player Skype. Owing to booming ad revenue, Google and Yahoo have a combined $4.3 billion in cash and equivalents, and they’re not afraid to spend big. In the last 18 months, Google gobbled up Dodgeball, Urchin Software, and Upstartle, gaining entry into mobile social networking, Web analytics tools, and Web-based word processing. Yahoo went on to its way swallowing Konfabulator, Webjay, Upcoming.org, Flickr, and del.icio.us. Now the company offers interface widgets, online playlists, an event-tracking service, and photo and bookmark sharing. Microsoft on the other hand extended its domain by acquiring a staggering 24 companies in the last year or so, including bookmarking startup Onfolio.
Small Internet firms meanwhile, are eager to step up to the auction block. In Indian Internet space one this trend will also gain momentum in the months to come. Consolidation will soon start happening in verticals like online travel. This space is already getting crowded, with almost all new players offering the same service model. Soon the big players will gobble up the small new startups and the market travel space will mature further in the coming few months in India.
The market for IPOs has weakened since the bubble burst, and new regulations have made an exit strategy a costly and cumbersome affair for new players. So the new endgame is acquisition all the way and it will indeed be a win-win situation for all.
Trend 5: Open Standards and Open Access Technology is the order of the day
Today openness has become a fundamental business principle, but its value hasn’t always been so obvious. In the 1970s and 80s, front-runners were companies like Oracle and Microsoft. They tried to make their proprietary technologies into de facto standards. Owning the standard made a company dominant, allowing it to dictate how customers used its products. With each new product cycle, customers had to tear out the old apps and install the new, and companies selling accessories had to scramble to update their wares.
Then came along the Internet-the apotheosis of open standards. Now, apps didn’t need to be written with their own user interface to run locally on Windows, Mac OS, or Unix. The browser window became the default interface for all kinds of things, from commerce to network administration to stock trading to email. Once installed on a vendor’s server, updates were available immediately. And the open environment encouraged competition, driving continual improvements.
Now we have Salesfore.com, which delivers software through a browser window. The model has been so successful that salesforce.com has recently furthered its reach to deliver their services on mobile as well. The company revenue is growing by more than 50 percent annually, and rivals like Oracle and SAP are picking hints from its strategy.
Now companies are taking this software-as-service model to the next level by making public the instructions that control certain internal operations. For instance, users can tap into the Amazon.com or eBay servers to create their own storefront. Similarly, one can mash up Google Maps with Flickr photos. SOA, XML, Web services are defining the winners in the Web space today.
Rescinding ownership results in cheaper, better software for everyone and the advantages of SOA (Service Oriented Architecture) are becoming more and more obvious to tech players around the world. While online vendors open their servers in pursuit of profit, programmers have embraced open source licensing for idealistic reasons.
However closed systems aren’t obsolete-yet. They still rule in game consoles and handheld devices. And the telecom and cable TV industries seem reluctant to adapt to the changing technological environment.
Still, the power of openness is boosting efficiencies and pumping up bottom lines throughout the business ecosystem. The path forward is clear: It starts with an open door.
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