The Business Web 2.0

Be A Magpie promises advertising bucks from Twitter. But even with outside help Twitter struggles to find a viable business model.

A week ago today the penny dropped. I had been reading about Be A Magpie (also know as just "Magpie"), a service that enables you to sign up to "tweet" advertisements during your normal use of Twitter and earn money from each one placed. I signed up, if only really to see how it worked and whether there really was potential for those who love Twitter to benefit from it financially.

But as I did this I was reading loads about Obama's use of Web 2.0 on his way to a seat at the White House. And I wondered: what if I search Google News for Obama news stories (you can guess the quantity this time last week), take an RSS feed from that, push it through Twitterfeed -- which I have long used with great success to broadcast blog updates and the like -- and then add Magpie to place an ad between news items from which I then receive revenue? With Twitterfeed delivering five news items each 30 minutes (with more than enough Obamafest material to work with) and Magpie placing a money making ad between each news story, that's ten ads an hour with what sort of earning potential if I let it just chug away in the background? I sniffed an easy money making opportunity: both from the plan and writing and marketing a "get rich quick" book about it aferwards!

First off, I should point out that Magpie got on to me pretty quickly. Okay, asking, over Twitter, whether I had discovered a scam meant I actually tripped myself up at the first hurdle (the Magpie guys use Twitter search it would seem), but it did lead to some enlightening dialogue with the guys at Magpie HQ in Berlin. Latching on to my plan, they first claimed I would be committing fraud; this was rubbish, but we agreed to settle on breach of Terms of Service: Magpie states that automated tweets are a no-no if you sign up to their service. So then I wondered what if you occasionally take a news feed item but the rest are hand crafted? Where is the limit?

Magpie claims to have an algorithm that calculates whether you are tweeting automatically and to stop you earning from them if you are. I think it may be simpler than that, but there is no doubt they look to ensure "reasonable use" of RSS feeds, bots and the like before they decide whether you should be making money from their ad service. The "limit" was unspecific, in spite of asking; a "reasonable" amount of automated tweets was all I could get them to confim they considered acceptable.

So do you want to know how much twitter.com/obamaupdates earned from 391 posts over the week? Er... nothing. Even my long running Twitter account of twitter.com/wecando.biz has only earned me 0.84 Euros over the two weeks I have been running it (around 70 tweets, most of which are Biz Needs from our website posted through an RSS feed).

So what's happening? Is Magpie intelligent enough to stop you earning from automated tweets, as they claim? Are there too few advertisers to serve enough ads to tweets that the money making potential is actually there, even if you play by the rules? Or did they just rumble me and sabotage my experiment? Who knows. What we can be fairly sure of is that the guys at Magpie haven't presented a viable business model to Twitter or its many fans just yet.

Ian Hendry
CEO, WeCanDo.BIZ
http://www.wecando.biz

The software giant announces a move into social networking, but struggles to play catch up let alone innovate.

Poor old Microsoft. They very nearly missed out on the Internet altogether. First they had to displace the Netscape browser by controversially -- and according to some courts, illegally -- giving away Internet Explorer with Windows to get a place at the table, even. Then they found no one ever went to their websites, prefering AOL and, latterly, Google before reinventing MSN to finally get some traffic... only to find people liked Facebook and MySpace more.

Now, finally, we see the software giant embracing Web 2.0 with an announcement this week that they're adding news feeds, a feature 120 million people have been enjoying on Facebook for over a year (and which, since, almost every other site has already added).

It could all have been so different. I first signed up for a Hotmail account around ten years ago, soon enough after launch to get ianhendry@hotmail.com as my address. I have a comprehensive address book defining who else I know on the Internet. I have used Live Messenger for many years and it remains my preferred IM solution to this day. I still have a lot invested in Microsoft, as do many others. So how are they doing such a poor job of exploiting that and innovating in the areas the web is firmly headed?

The announcements this week from Chris Jones, VP at Windows Live, amount to Microsoft doing little more than a bit of social networking aggregation; services that you can find a hundred of in the web already. Most people, I imagine, will just keep doing what they were doing at source, rather than make the effort to go to Live to find out what is happening elsewhere on internet where they already have an account and regularly visit already: "Come here so you can find out what we interrupted you doing over there" isn't very compelling. Microsoft's aim, of course, is that you spend more time on the Live properties so they can sell more advertisements. Yes, that's the advertising based revenue model which most other Web 2.0 companies are realising doesn't work. By any measurement, what Microsoft is doing is not innovating. It's barely catching up.

In March 2008 Microsoft acquired web authentication company Credentica. Within its portfolio it now has a great method for helping to log people in to websites using centrally held authentication details -- in essence, single sign on, one password for all the sites you could wish to visit. In its Live services, such as Messenger and Hotmail (and this could extend out to Outlook easily) it has details of your "social graph", people you know. Combine the two and Microsoft has the power to provide a central site with login details and a "friends" list which it could then enable users to make use of on other social networking sites. Those sites would provide the services they are today, but you wouldn't need a new identity or to build your friends list from scratch on every one you visit. It could be all that OpenId and OpenSocial have been promising for a year, but not delivering.

With Facebook on board (rememember Microsoft owns a small percentage), tehy could easily import friend information from that and help Facebook properly implement the long delayed Facebook Connect.

With this sort of power at its disposal, an announcement that it's adding a news feed to integrate with Hotmail is, frankly, a bit lame.

Is there no-one in Redmond who gets Web 2.0 and the position of dominance Microsoft could hold if it used properly the tools it already has?

Where do I apply for a job?

Ian Hendry
CEO, WeCanDo.BIZ
http://www.wecando.biz

Hamburg-based XING increases members by 53 per cent, doubles profits.

It continues to be the case that while some of the more fashionable social networks like Facebook and Twitter continue to talk of only growth and that revenue is unimportant for them, the "first Web 2.0 to go public", business focused socnet XING, is proving that such businesses can show validity -- even in uncertain economic times.

Its latest set of results released yesterday saw membership grow 53% over the past year 12 months to 6.53 million, over half a million of which are paying subscribers.

Revenues for the first nine months of the year topped 25 million Euros, already exceeding the total for 2007 by 28%. Good news on profits too, which are already double 2007 figures at 4.72 million Euros.

This news contrasts with privately held competitor LinkedIn's announcement that it is to lay-off 10% of its workforce made just a week ago.

I often blog on the clear out that could well happen in the Web 2.0 world as those with no valid business model get "found out" and I often get criticised for lack of vision. XING's performance proves that such businesses can be valid if they chase real world objectives. Whereas XING is not the best known network, it is proving to be one of the most sound.

Ian Hendry
CEO, WeCanDo.BIZ
http://www.wecando.biz

Just a few weeks after LinkedIn announced an investment from SAP, Facebook and Salesforce.com buddy up.

If you don't follow Salesforce.com, it's their Dreamforce expo this week, where users and developers of the on-demand, cloud dominator wannabe all meet up and talk about how great their choice was. And Salesforce.com reveals some stuff that no one knew about.

It's already revealed it plans to offer website hosting through its on-demand Force.com platform (you'll find me commenting on this all over the web), but it was very interesting to hear about Facebook COO Sheryl Sandberg joining The Ego himself, SFDC CEO Marc Benioff on stage for a presentation of a social network to CRM connector -- thanks to Bernard Lunn of RWW for bringing to my attention (full story at http://www.readwriteweb.com/cgi-bin/mt/mt-tb.cgi/8826).

It was fairly predictable stuff, the only real interest coming in what Salesforce.com would do and with whom to counter the recent investment in LinkedIn by rival SAP. The answer was to buddy up with the biggest name in social networking: Facebook is four times the size of LinkedIn, although doesn't share it's business only focus. I wouldn't have expected Benioff to settle for anyone less.

But is Facebook a place to be integrating business applications? Well Salesforce.com demonstrated an example where a recruiter is using their CRM application with Facebook -- cheekily, as LinkedIn considers itself the darling of the hiring industry. Still, this scenario aside, is this an admission from SFDC that they are strongest in B2C (business to consumer) rather than B2B (to business)?

I can't help thinking the alliance was motivated by headlines more than sound strategy and natural alignment...

Ian Hendry
CEO, WeCanDo.BIZ
http://www.wecando.biz

LinkedIn adds apps in a move that seems to ape Facebook, but are strictly professional. The only problem is, they don’t work.

I am an avid LinkedIn new follower and Google Alerts gives me several stories a day to digest. Recently, I read a few bemoaning the way in which LinkedIn seems not to have developed any in spite of recent investments. Today, the soothsayers were silenced by a radical new addition to the LinkedIn business networking service: applications.

Now, if you’re thinking Facebook applications you will no doubt be delighted to read that sheep throwing and movie quizzes will not be something you have have to engage in with business contacts alongside your Facebook friends. LinkedIn’s applications are “productivity applications that range from gathering information that professionals around you are generating to enhancing your abilities to collaborate and communicate more effectively. You’ll be able to work much more closely with your contacts on LinkedIn” says founder and CEO Reid Hoffman in his blog.

Most are provided by external companies who have adapted their own services so they can run inside LinkedIn, but one developed by LinkedIn itself is Company Buzz. This tool enables you to see what is being said on Twitter about your company. It may be many people’s first foray into social media monitoring and if you ignore the fact that LinkedIn’s 30 million users are likely to be saying more about your company than Twitter’s 3 million users, it sounds like a useful application.

The problem is, it doesn’t work.

I just tried to add Company Buzz to my own LinkedIn profile and I got a message back saying it has technical difficulties.

Even when it does get to work, I am unsure how it actually is going to give me what it promises. LinkedIn says my Company Group is “Entel”, which is, in fact, a truncated version of one of my company names and not a company I work for at all (I already get irrelevant news headlines each time I log in). It completely ignores my current WeCanDo.BIZ entry. So when it does start to work I have a feeling it will be showing me Twitter entries for a company I don’t work for, and neither of the two I do.

Perhaps the real point is though, will these apps be enough to get the 30 million registered users coming back regularly?

Ian Hendry
CEO, WeCanDo.BIZ
http://www.wecando.biz