The Business Web 2.0

The usual "focusing on new challenges" line punted out as former eBay Germany head fills his shoes at business focused social network.

Thanks to Mike Butcher (http://uk.techcrunch.com/2008/11/24/xing-ceo-quits-replaced-by-former-ebay-drone/trackback/) some interesting news from XING this morning.

Co-founder and CEO Lars Hinrichs is set to quit to make way for Dr Stefan Gross-Selbeck, the former head of eBay Germany, who will take up the role in January. Hinrichs will stay involved in the businesses, sitting on the supervisory board to enable him to continue his 5 years of service.

Given consistently great results from XING -- although it never seems enough for the German company to ever get mentioned alongside LinkedIn in the many more column inches its American rival manages -- it's odd that he has chosen to move aside at this time. The almost mandatory "pursuing other interests" excuse featured in Hinrich's blog today (http://blog.xing.com/2008/11/a-new-chapter-in-the-company-history/), although I would suggest he is leaving before he's finished the job: XING holds a strong position in Germany, Spain and Turkey (the second two thanks to acquisitions) but XING is yet to fully establish itself in other parts of Europe, Asia or the US to offer some much needed competition to LinkedIn.

I'll watch with interest any attempts to address these issues from the incoming CEO early next year.

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

It's a year since some of the biggest names in social networking joined to collaborate on interoperability. What have they achieved in that time?

I'll admit I was sceptical from the start. My first read of the press release announcing OpenSocial had me seeing sheep throwing applications, popular on Facebook at the time, proliferating around other places on the web were I conducted more serious business. Well, Facebook was a notable absentee from the OpenSocial iniative actually, but I feared that the mold for "social applications" had been set.

One year later I can see I needn't have been so concerned. The OpenSocial Foundation, the group formed to help manage the development community around its open API (Application Programming Interface) standards says that millions of web users are already getting real benefit, with many more OpenSocial apps planned -- the next batch of which will hit LinkedIn users within a month.

But who knows about the apps that exist? And who can see the benefits they are getting?

An early OpenSocial manifestation was Google Friend Connect, a rival to Facebook Connect which planned to enable website owners to embed the social graph elements from existing socnets into their own sites. It would allow MySpace users to collect on your site and share details of things they liked about it with their MySpace friends. The appeal of 100 million MySpace members being able to better use your own website was clear to many website owners, all of whom rubbed their hands with glee waiting for the code to arrive. Amid much fanfare and the inevitable "who will win? Google or Facebook?" questions, nothing came of it: I am not aware of one GFC implementation (incidentally, it never took off for Facebook Connect either, with no more than a handful of live implementations thus far). The promise remains unfulfilled. And that was one of the first and better sounding OpenSocial applications.

LinkedIn has recently launched some application to its business-focused social network, but beyond some file sharing and collaborative stuff limited in scale, no one would know that OpenSocial underpins them. In fact, it's not very apparent why OpenSocial would need to underpin them, as they are sitting on a social network where the sharing capabilities with other members of your social graph already exist.

One year on, and in a world where many social networks have grown by 50% during that year, the impact of a very well-supported (AOL, Bebo, hi5, Google, LinkedIn, MySpace, Ning, Yahoo!...), formal interopability group to get them all talking has been, unfortunately, negligable.

My view is that the group seems to be shying away from the biggest challenges, but the ones that REALLY bring benefits to users of its members' sites. In spite of supporting OpenID and developing OpenAuth, nearly all of the sites above still require you to set up and administeran individual account, have a unique login and build your networks of friends from scratch each time. This is WAY more a chore to users than the miniscule benefits most of the developed apps bring. And yet we feel no closer now to seeing portable identities and social graphs than we did when all the mission statement and vision slides were first put up 12 months ago.

To my mind, this is THE single biggest inhibitor to the uptake and effectiveness of Web 2.0. That each site needs to take you through a broadly similar registration process only to start you off from Social Square One again is what is stopping people signing up for interesting new niche social networks and from getting full use of those they are already on. Cracking this challenge would have been a great first birthday present to OpenSocial from its founder members.

So in spite of having the tools to do it, why is the OpenSocial Foundation and its members content to put their focus into apps which show you what books your business contacts are reading (LinkedIn app, November 2008)? Maybe because some of the big names behind the initiative "own" all the users and actually DON'T wish to make the Web 2.0 open enough for people to be able to choose which sites they visit without some barriers in the way...?

I'd be interested in your take.

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

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