When You Pay For Something That's Free
There's been a lot of techie hype over Kevin Rose's lastest start up. (Kevin Rose is the founder of Digg).
Pownce is a P2P way to send "messages, files, links, and events" to your friends. But outside of this, is the fact that Pownce is still in Beta. Not much different than other Web 2.0 companies and to limit their testers Pownce is only letting folks with invites join. Again, not much different. What is different is the artificial marketplace that has surfaced because of this. Remember Gmail? Gmail invites at one point were hitting $200 on eBay. Now
Pownce invites are ranging from a starting bid of 1 cent to a buy it now of $9.99.
I'm not sure who is posting these invites for sale, but could it be Pownce's own team? While Pownce cannot charge (it would be against the Internet's business model), folks with invites can create an artificial market and therefore make each free invite somewhat valuable. If they can do this demand is going to outstrip supply, which will create a buzz around this "free" product.
I don't think that Pownce has the name recognition that Gmail did at this same point for it to work. Also, how many people are willing to pay for this? It's not the same as Gmail which is interoperable with other email addresses. Right now there were 3 bids for Pownce invites and other sites like
Mashable and
Techcrunch give these invites away for free.
We'll see how this strategy works, I wouldn't be surprised if it backfired, although some blogs have picked up on the artificial marketplace....
Labels: digg
Revision3 raises $8 million
Digg Founders Kevin Rose and Jay Adelson have
raised an additional $8 million for their Revision3 website. The additional capital should allow for Revision3 to add to its 10 show slate and to expand its website and operations. The most popular of their shows Diggnation is advertising supported but has a very interesting business model where the hosts actually talk about the products (kind of like Howard Stern). The shows hit the geek demographic with shows that are called Ctrl-Alt-Chicken, Pixel Perfect, and XLR8R TV. It also allows you to take the content on the go with QuickTime downloads. Their Flash player from BitGravity is also a solid high quality flash player. Overall, a pretty solid product and the best example of monetizing online video to date.
Labels: digg
Crowds Being Manipulated
I didn't want to write about this, but I think that if its brought to attention to most of these online platforms, perhaps something will be done about it. Some of the most influential websites include
Digg,
Reddit,
YouTube,
MySpace, and
Yahoo News. Like most social networking sites, these sites include areas for superlatives, that is Most Viewed, Most Emailed, Highest Rated, etc. Collactive which Sequoia Capital invested in (via
The Alarm Clock) helps you get your story to the top of these sites. You simply submit your story to Collactive and they utilize their network to affect the social network rankings. Digg, of course, is not happy with this, as their tool like most of the other tools above is all about the collective "wisdom of crowds" and not about a single lobbyist manipulating the system. However, as Mashable has
pointed out before, its fairly easy to game YouTube to get to the
"Most Viewed" list via a couple of browser plug ins and a desire to do so.
As you can see this is a big problem not just for marketers but news in general. To some extent, yes, we need editors to make sure that we get real news on the front page instead of simply the most viewed, otherwise we'd still probably be
reading about Anna Nicole. But at the same time, Web 2.0 is about the collective intelligence of the group, and not simply the brute force that Collactive or any other system manipulation provides. And therefore you can see the danger here. The Web is about equality and not about money. However, if tools can be used to receive honorable mentions, high diggs, YouTube views, then the rich will continue to get richer. Great products and services will still be available online but will need to compete against the deep pockets of larger companies whose products might not be as superior. Furthermore, if we know that these rankings are being manipulated then what's the point? It becomes editorial again and the most Digg'd article becomes similar to "Collactive Presents..." and YouTube's Most Viewed becomes "Videos who's owners had nothing better to do but refresh a few hundred thousand times in order to draw traffic to their own websites."
It's a big problem for Web 2.0 just like spam was a big problem (and still is) for Web 1.0, especially for YouTube, where SuperMoviesDownload.com is trying to steal some of their traffic by gaming the system. And based on this, perhaps they will be able to more accurately reflect the collective wisdom of crowds...
Labels: digg, myspace, web 2.0, wisdom of crowds, youtube
Power of the People
Even
Digg couldn't withstand the power of the people or the so called
Wisdom of Crowds. Digg, traditionally against any type of DRM, monitors its posts and takes down anything that they feel is morally wrong. Yesterday (via
TechCrunch) someone posted the decryption key to HD DVDs. After the Digg team took it down, someone reposted it. Pretty soon, the entire Digg site went down with a deluge of the decryption key posted all over it. Kevin Rose, Digg's co-founder, says on their
blog:
But now, after seeing hundreds of stories and reading thousands of comments, you’ve made it clear. You’d rather see Digg go down fighting than bow down to a bigger company. We hear you, and effective immediately we won’t delete stories or comments containing the code and will deal with whatever the consequences might be. If we lose, then what the hell, at least we died trying.So that's it, that's what happens when you try to turn against popular opinion. Digg (valued at
$60 million per Businessweek's cover story) could become the next
Friendster, where users left at the blink of an eye. Fickle consumers have the power and especially online where the butterfly effect is magnified ten times over. It's a scary place to be right now for Digg as many of their million plus users have revolted against them.
What does this mean? Well, I've touched on it before, and again, I'm not sure how this phenomenon happens but if you think about companies out there
Apple,
Google, and
Craigslist are the "good guys" while
Microsoft,
Yahoo, and
Dell are the "bady guys." It's a connotation that can most likely be traced to a few choice events (Microsoft knocking down Netscape, Yahoo charging for email, and Dell's customer service debacle.) While Apple has come clean with its iPod batteries, Google discloses all (or wants you to think that), and Craigslist doesn't make that much money only through its job postings. Since then Dell has apologized, Microsoft has been a bit more open, and Yahoo provides free unlimited storage. However, the damage is done, and just like
Gladwell's book Blink, these corporations are the evil empire while our knight in shining armor are the former companies. Stay open, make sure that your PR team has experience in damage control, and address your customers because the power of the crowd is too much to handle (at least for a $60 million company).
Labels: apple, blink, digg, drm, google, microsoft, wisdom of crowds, yahoo
